As filed with the Securities and Exchange Commission on February 20, 2001.
File Nos. 333-
811-6310
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
GREENWICH STREET SERIES FUND
(Exact Name of Registrant as Specified in Charter)
7 World Trade Center
New York, NY 10048
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, Including Area Code: 800-451-2010
HEATH B. McLENDON
SSB CITI FUND MANAGEMENT LLC
7 WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(Name and Address of Agent for Service)
With Copies To
Robert I. Frenkel, Esq. Christina T. Sydor, Esq. Roger P. Joseph, Esq. Burton M. Leibert, Esq.
SSB Citi Fund Management LLC SSB Citi Fund Management LLC Bingham Dana LLP Willkie Farr & Gallagher
7 World Trade Center 7 World Trade Center 150 Federal Street 787 Seventh Avenue
New York, NY 10048 New York, NY 10048 Boston, MA 02110 New York, NY 10019
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the Registration Statement becomes effective under the Securities Act of 1933
TITLE OF SECURITIES BEING REGISTERED:
Shares of Beneficial Interest ($0.001 par value) of the Registrant
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The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment Company
Act of 1940; accordingly, no fee is payable herewith because of reliance upon
Section 24(f).
It is proposed that this filing will become effective on March 22, 2001
pursuant to Rule 488 under the Securities Act of 1933.
This filing relates to securities to be issued to CitiSelect VIP Folio 200
Conservative and CitiSelect VIP Folio 300 Balanced in connection with the
reorganizations described herein.
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[Letter to Variable Contract Owners]
CITISELECT VIP FOLIO 200 CONSERVATIVE
CITISELECT VIP FOLIO 300 BALANCED
7 World Trade Center, New York, New York 10048
March 22, 2001
Dear Variable Annuity Contract or
Variable Life Insurance Policy Owner:
Shares of CitiSelect VIP Folio 200 Conservative and/or CitiSelect VIP Folio
300 Balanced (each, a "CitiSelect Portfolio" and together, the "CitiSelect
Portfolios") have been purchased at your direction by your insurance company
(your "Insurance Company") through one or more of its separate accounts to fund
benefits payable under your variable annuity contract or variable life
insurance policy (each, a "variable contract"). Your Insurance Company, as the
legal owner of those separate accounts, has been asked to approve an Agreement
and Plan of Reorganization whereby all of the assets (other than those
specified in the Agreement and Plan of Reorganization) of the CitiSelect
Portfolios will be transferred to the Appreciation Portfolio (the "Smith Barney
Portfolio"), a series of Greenwich Street Series Fund, in exchange for shares
of the Smith Barney Portfolio. You, as an owner of a variable contract that has
an interest in one or more of those separate accounts, are being asked by your
Insurance Company for instructions as to how to vote the shares of the
CitiSelect Portfolios that are attributable to your variable contract.
If the Agreement and Plan of Reorganization is approved and consummated, the
separate account(s) in which you have an interest will own shares of the Smith
Barney Portfolio instead of shares of the CitiSelect Portfolios. Each separate
account will receive shares of the Smith Barney Portfolio with an aggregate net
asset value equal to the aggregate net asset value of the shares of the
CitiSelect Portfolio owned by it prior to the reorganization.
The Smith Barney Portfolio is advised by SSB Citi Fund Management LLC ("SSB
Citi"). SSB Citi, like Citibank, N.A. ("Citibank"), the adviser of the
CitiSelect Portfolios, is a subsidiary of Citigroup Inc. Citigroup has proposed
the reorganization of each CitiSelect Portfolio into the Smith Barney Portfolio
in order to eliminate duplication in the mutual fund investment advisory
operations of SSB Citi and Citibank.
After carefully studying the merits of the proposal, the Board of Trustees
of the CitiSelect Portfolios has determined that the reorganization of each
CitiSelect Portfolio with the Smith Barney Portfolio will benefit the
shareholders of that CitiSelect Portfolio.
The Smith Barney Portfolio will offer the separate account(s) in which you
have an interest a mutual fund with investment objectives and policies that are
in some ways similar to those of the CitiSelect Portfolios, although there are
important differences. The Trustees of the CitiSelect Portfolios believe that
combining the assets of the CitiSelect Portfolios with the Smith Barney
Portfolio could result in more efficient mutual fund operations due to
economies of scale.
Please read the enclosed materials carefully. Although the Smith Barney
Portfolio has investment objectives and policies that are in many ways similar
to those of the CitiSelect Portfolios, there are
important differences. If, after your review of the enclosed materials you
determine that the Smith Barney Portfolio is not an appropriate investment for
you, you may want to consider transferring your interest in a CitiSelect
Portfolio to another separate account offered by your Insurance Company. Any
such transfer will be without charge and will not count as a transfer under the
variable contracts that limit allowable transfers. Please consult the
prospectus for your variable contract for more information.
The Board of Trustees of the CitiSelect Portfolios believes that the
proposal set forth in the enclosed notice of meeting is important and
recommends that you read the enclosed materials carefully and then instruct
your Insurance Company to vote for the proposal. Please take a moment now to
sign and return the voting instruction form(s) in the enclosed postage-paid
envelope. You may also cast your vote by telecopy, via the internet or by
telephone as described in the enclosed materials. For more information, please
contact your insurance agent. Additional Information regarding voting is
included with the voting instructions card in this package.
Respectfully,
Heath B. McLendon
President
WE URGE YOU TO SIGN AND RETURN THE VOTING INSTRUCTION FORM(S) IN THE ENCLOSED
POSTAGE-PAID ENVELOPE, OR CAST YOUR VOTE BY TELECOPY, VIA THE INTERNET OR BY
TELEPHONE AS DESCRIBED IN THE ENCLOSED MATERIALS.
[Letter to Shareholders]
CITISELECT VIP FOLIO 200 CONSERVATIVE
CITISELECT VIP FOLIO 300 BALANCED
7 World Trade Center, New York, New York 10048
March 22, 2001
Dear Shareholders:
You are being asked to vote on an Agreement and Plan of Reorganization
whereby all of the assets (other than those specified in the Agreement and Plan
of Reorganization referred to below) of CitiSelect VIP Folio 200 Conservative
and/or CitiSelect VIP Folio 300 Balanced (each, a "CitiSelect Portfolio" and
together, the "CitiSelect Portfolios"), each a series of Variable Annuity
Portfolios, will be transferred to the Appreciation Portfolio (the "Smith
Barney Portfolio"), a series of Greenwich Street Series Fund, in exchange for
shares of the Smith Barney Portfolio.
If the Agreement and Plan of Reorganization is approved and consummated, you
will no longer be a shareholder of your CitiSelect Portfolio(s); you will
become a shareholder of the Smith Barney Portfolio. You will receive shares of
the Smith Barney Portfolio with an aggregate net asset value equal to the
aggregate net asset value of your shares in the CitiSelect Portfolio(s).
The Smith Barney Portfolio is advised by SSB Citi Fund Management LLC ("SSB
Citi"). SSB Citi, like Citibank, N.A. ("Citibank"), the adviser of the
CitiSelect Portfolios, is a subsidiary of Citigroup Inc. Citigroup has proposed
the reorganization of each CitiSelect Portfolio into the Smith Barney Portfolio
in order to eliminate duplication in the mutual fund investment advisory
operations of SSB Citi and Citibank.
After carefully studying the merits of the proposal, the Board of Trustees
of the CitiSelect Portfolios has determined that the reorganization of each
CitiSelect Portfolio with the Smith Barney Portfolio will benefit the
shareholders of that CitiSelect Portfolio.
The Smith Barney Portfolio will offer CitiSelect shareholders a mutual fund
with investment objectives and policies that are in some ways similar to those
of the CitiSelect Portfolios, although there are important differences. The
Trustees of the CitiSelect Portfolios believe that combining the assets of the
CitiSelect Portfolios with the Smith Barney Portfolio could result in more
efficient mutual fund operations due to economies of scale.
The Board of Trustees of the CitiSelect Portfolios believes that the
proposal set forth in the notice of meeting is important and recommends that
you read the enclosed materials carefully and then vote for the proposal.
Please take a moment now to sign and return your proxy card(s) in the enclosed
postage-paid envelope. You may also cast your vote by telecopy, via the
internet or by telephone as described in the enclosed materials. Additional
Information regarding voting is included with the proxy card in this package.
Respectfully,
Heath B. McLendon
President
WE URGE YOU TO SIGN AND RETURN YOUR PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID
ENVELOPE, OR CAST YOUR VOTE BY TELECOPY, VIA THE INTERNET OR BY TELEPHONE AS
DESCRIBED IN THE ENCLOSED MATERIALS, TO ENSURE A QUORUM AT THE MEETING. YOUR
VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
CITISELECT VIP FOLIO 200 CONSERVATIVE
CITISELECT VIP FOLIO 300 BALANCED
7 World Trade Center
New York, New York 10048
Telephone: (800) 451-2010
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Please take notice that a Special Meeting of Shareholders of CitiSelect VIP
Folio 200 Conservative and CitiSelect VIP Folio 300 Balanced (each, a
"CitiSelect Portfolio" and together, the "CitiSelect Portfolios"), each a
series of Variable Annuity Portfolios, will be held at the offices of Citigroup
Asset Management, 7 World Trade Center, Downtown Conference Center Rooms 2 and
3, New York, New York 10048, on Wednesday, April 18, 2001, at 11:00 a.m.,
Eastern time, for the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and
Plan of Reorganization which provides for and contemplates: (1)
the transfer of all of the assets (other than those specified in
the Agreement and Plan of Reorganization) and all of the
liabilities of each CitiSelect Portfolio to the Appreciation
Portfolio (the "Smith Barney Portfolio"), a series of Greenwich
Street Series Fund, solely in exchange for shares of the Smith
Barney Portfolio; (2) the distribution of the shares of the
Smith Barney Portfolio to the shareholders of the CitiSelect
Portfolios in liquidation of each CitiSelect Portfolio; and (3)
the termination of each CitiSelect Portfolio.
ITEM 2. To transact such other business as may properly come before the
Special Meeting of Shareholders and any adjournments thereof.
Item 1 is described in the attached Proxy Statement/Prospectus.
Shares of the CitiSelect Portfolios may only be purchased by insurance
company separate accounts to fund benefits payable under certain variable
annuity contracts and variable life insurance policies ("variable contracts").
Each insurance company that, through its separate accounts, owns shares of the
CitiSelect Portfolios hereby solicits the owners of the variable contracts with
interests in those separate accounts for instructions as to how to vote at the
Special Meeting of Shareholders and agrees to vote at the Special Meeting of
Shareholders and at any adjournment thereof the shares of the CitiSelect
Portfolios held by those separate accounts in accordance with those
instructions. THE BOARD OF TRUSTEES OF VARIABLE ANNUITY PORTFOLIOS RECOMMENDS
THAT YOU VOTE IN FAVOR OF ITEM 1.
If you are a shareholder of record on February 20, 2001 you are entitled to
vote at the Special Meeting of Shareholders and at any adjournments thereof. If
you are a variable contract owner of record on February 20, 2001, you have the
right to instruct your insurance company how to vote the shares of each
CitiSelect Portfolio that are attributable to your variable contract.
Robert I. Frenkel, Secretary
March 22, 2001
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY OR VOTING INSTRUCTION FORM, WHICH WILL HELP AVOID
THE ADDITIONAL EXPENSE OF A SECOND SOLICITATION. THE ENCLOSED ADDRESSED
ENVELOPE REQUIRES NO POSTAGE AND IS PROVIDED FOR YOUR CONVE-NIENCE. YOU ALSO
MAY RETURN PROXIES AND VOTING INSTRUCTION FORMS BY TOUCH-TONE VOTING OVER THE
TELEPHONE OR BY VOTING ON THE INTERNET.
COMBINED PROXY STATEMENT/PROSPECTUS
March 22, 2001
Relating to the acquisition by
APPRECIATION PORTFOLIO, a series of
GREENWICH STREET SERIES FUND
7 World Trade Center
New York, NY 10048
Telephone: (800) 451-2010
of the assets of
CITISELECT VIP FOLIO 200 CONSERVATIVE and
CITISELECT VIP FOLIO 300 BALANCED, each a series of
VARIABLE ANNUITY PORTFOLIOS
7 World Trade Center
New York, NY 10048
Telephone: (800) 451-2010
This Proxy Statement/Prospectus is furnished to shareholders of CitiSelect
VIP Folio 200 Conservative and CitiSelect VIP Folio 300 Balanced (each, a
"CitiSelect Portfolio" and together, the "CitiSelect Portfolios"), each a
series of Variable Annuity Portfolios ("VAP"), in connection with the
solicitation of proxies for a Special Meeting of Shareholders of the CitiSelect
Portfolios at which shareholders will be asked to consider and approve a
proposed Agreement and Plan of Reorganization (the "Plan") between VAP, on
behalf of each CitiSelect Portfolio, and Greenwich Street Series Fund (the
"Smith Barney Trust"), on behalf of its series the Appreciation Portfolio (the
"Smith Barney Portfolio").
The Plan provides that all of the assets (other than those specified in the
Plan) and all of the liabilities of each CitiSelect Portfolio will be
transferred to the Smith Barney Portfolio. In exchange for the transfer of
these assets and liabilities, each CitiSelect Portfolio will receive shares of
the Smith Barney Portfolio. Shares of the Smith Barney Portfolio so received
will then be distributed to the shareholders of the CitiSelect Portfolios in
complete liquidation of the CitiSelect Portfolios, and each CitiSelect
Portfolio will be terminated. As a result of these reorganization transactions,
each shareholder of a CitiSelect Portfolio will receive that number of full and
fractional shares of the Smith Barney Portfolio having an aggregate net asset
value equal to the aggregate net asset value of the shareholder's shares of the
respective CitiSelect Portfolio held on the closing date of the reorganization
transaction (the "Reorganization").
The CitiSelect Portfolios and Smith Barney Portfolio are each series of
open-end management investment companies. The investment objectives and
policies of the Smith Barney Portfolio are compared to those of the CitiSelect
Portfolios in this Proxy Statement/Prospectus. The Smith Barney Portfolio
pursues its investment objective by investing primarily in equity securities of
U.S. companies. The CitiSelect Portfolios are asset allocation funds that
pursue their investment objectives by investing in a mix of equity and fixed
income securities.
PLEASE READ THE ENCLOSED MATERIALS CAREFULLY. ALTHOUGH THE SMITH BARNEY
PORTFOLIO HAS INVESTMENT OBJECTIVES AND POLICIES THAT ARE IN MANY WAYS SIMILAR
TO THOSE OF THE CITISELECT PORTFOLIOS, THERE ARE IMPORTANT DIFFERENCES. IF,
AFTER YOUR REVIEW OF THE ENCLOSED MATERIALS YOU DETERMINE THAT THE SMITH BARNEY
PORTFOLIO IS NOT AN APPROPRIATE INVESTMENT FOR YOU, YOU MAY WANT TO CONSIDER
TRANSFERRING YOUR INTEREST IN A CITISELECT PORTFOLIO TO ANOTHER SEPARATE
ACCOUNT OFFERED BY YOUR INSURANCE COMPANY. ANY SUCH TRANSFER WILL BE WITHOUT
CHARGE AND WILL NOT COUNT AS A TRANSFER UNDER THE VARIABLE CONTRACTS THAT LIMIT
ALLOWABLE TRANSFERS. PLEASE CONSULT THE PROSPECTUS FOR YOUR VARIABLE CONTRACT
FOR MORE INFORMATION.
This Proxy Statement/Prospectus, which should be retained for future
reference, sets forth concisely the information about the Smith Barney
Portfolio that a prospective investor should know before investing. For a more
detailed discussion of the investment objectives, policies, restrictions and
risks of the Smith Barney Portfolio, see the Prospectus for the Smith Barney
Portfolio, dated April 28, 2000, as supplemented from time to time, which is
included herewith and incorporated herein by reference. This Proxy
Statement/Prospectus is also accompanied by the Smith Barney Portfolio's annual
report to shareholders for the year ended December 31, 2000, which is
incorporated herein by reference. Additional information is set forth in the
Statement of Additional Information of the Smith Barney Portfolio, dated April
28, 2000, as amended June 9, 2000, which is incorporated herein by reference.
The Statement of Additional Information of the Smith Barney Portfolio is on
file with the Securities and Exchange Commission and is available without
charge upon request by writing or calling the Smith Barney Portfolio at the
address or telephone number indicated above.
Additional information is set forth in (a) the Statement of Additional
Information relating to this Proxy Statement/Prospectus, dated March 22, 2001,
(b) the Prospectus and Statement of Additional Information of the CitiSelect
Portfolios, dated May 1, 2000, and (c) the Annual Report for the fiscal year
ended December 31, 2000 relating to the CitiSelect Portfolios. Each of these
documents is incorporated herein by reference and is on file with the
Securities and Exchange Commission. You may obtain a copy of any of these
documents without charge upon request by writing or calling the CitiSelect
Portfolios at the address or telephone number indicated above.
This Proxy Statement/Prospectus is expected to be first sent to shareholders
on or about March 22, 2001.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY
REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRE-SENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CITISELECT PORTFOLIOS
OR THE SMITH BARNEY PORTFOLIO.
TABLE OF CONTENTS
Page
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SYNOPSIS....................................................... 1
Proposed Transaction........................................ 1
Comparison of Investment Objectives and Policies............ 1
Investment Advisory Services and Management Fees............ 4
Overall Expenses............................................ 4
Distribution of Shares and Other Services................... 6
Purchase Policies and Redemption Information................ 7
Dividends and Other Distributions........................... 8
Tax Consequences............................................ 8
PRINCIPAL INVESTMENTS, RISK FACTORS AND INVESTMENT RESTRICTIONS 9
Principal Investments and Risk Factors...................... 9
Fundamental Investment Restrictions......................... 15
Non-Fundamental Investment Restrictions..................... 15
THE PROPOSED TRANSACTION....................................... 17
Description of the Plan..................................... 17
Reasons for the Proposed Transaction........................ 17
Description of the Securities to be Issued.................. 19
Federal Income Tax Consequences............................. 20
Liquidation and Termination of the CitiSelect Portfolios.... 21
Portfolio Securities........................................ 21
Portfolio Turnover.......................................... 22
Pro Forma Capitalization.................................... 22
Performance................................................. 22
VOTING INFORMATION............................................. 23
General Information......................................... 23
Quorum; Vote Required to Approve Proposal................... 24
Outstanding Shareholders.................................... 24
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS.................... 27
OTHER MATTERS.................................................. 27
SYNOPSIS
The following is a summary of certain information contained in this Proxy
Statement/Prospectus regarding the CitiSelect Portfolios and the Smith Barney
Portfolio (each, a "Portfolio," and collectively, the "Portfolios") and the
proposed Reorganization. This summary is qualified by reference to the more
complete information contained elsewhere in this Proxy Statement/Prospectus,
the Prospectus of the Smith Barney Portfolio, the Prospectus of the CitiSelect
Portfolios and the Plan, the form of which is attached to this Proxy
Statement/Prospectus as Exhibit A. Shareholders of the CitiSelect Portfolios
should read this entire Proxy Statement/Prospectus carefully.
Proposed Transaction
The Board of Trustees of VAP, on behalf of the CitiSelect Portfolios,
including a majority of the Trustees who are not "interested persons" of such
CitiSelect Portfolios (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) (the "Non-Interested Trustees"), approved the Plan on
February 16, 2001. The Plan provides that all of the assets (other than those
specified in the Plan) and all of the liabilities of CitiSelect VIP Folio 200
Conservative and CitiSelect VIP Folio 300 Balanced will be transferred to the
Smith Barney Portfolio. In exchange for the transfer of those assets and
liabilities, each CitiSelect Portfolio will receive shares of the Smith Barney
Portfolio. Shares of the Smith Barney Portfolio so received will then be
distributed to the shareholders of the CitiSelect Portfolios in complete
liquidation of the CitiSelect Portfolios, and each CitiSelect Portfolio will be
terminated. As a result of the Reorganization, each shareholder of a CitiSelect
Portfolio will receive that number of full and fractional shares of the Smith
Barney Portfolio having an aggregate net asset value equal to the aggregate net
asset value of the shareholder's shares of the respective CitiSelect Portfolio
held as of the close of business on the closing date of the Reorganization (the
"Closing Date"). The Closing Date is expected to be on or about April 19, 2001
or such other date as the parties may agree in writing.
For the reasons described below under "The Proposed Transaction--Reasons for
the Proposed Transaction," the Board of Trustees of VAP, on behalf of the
CitiSelect Portfolios, including a majority of the Non-Interested Trustees, has
concluded that the Reorganization is in the best interests of each of the
CitiSelect Portfolios and their respective shareholders and that the interests
of the existing shareholders of the CitiSelect Portfolios will not be diluted
as a result of the Reorganization.
Accordingly, the Trustees recommend approval of the Plan. If the Plan is not
approved, the CitiSelect Portfolios will continue in existence unless other
action is taken by the Trustees; such other action may potentially include, but
not be limited to, resubmission of the Plan to shareholders or maintaining the
status quo.
Comparison of Investment Objectives and Policies
Goals
The goal of CitiSelect VIP Folio 200 Conservative is as high a total return
over time as is consistent with a primary emphasis on fixed income securities
and a secondary emphasis on equity securities. The goal of CitiSelect VIP Folio
300 Balanced is as high a total return over time as is consistent with a
balanced emphasis on equity and fixed income securities.
The goal of the Smith Barney Portfolio is long-term appreciation of capital.
The Smith Barney Portfolio invests primarily in equity securities.
1
PLEASE NOTE THAT THERE ARE DIFFERENCES IN THE PORTFOLIOS' INVESTMENT
POLICIES AND THE MANNER IN WHICH THE PORTFOLIOS SEEK TO ACHIEVE THEIR GOALS.
THESE DIFFERENCES ARE DISCUSSED IN MORE DETAIL BELOW.
Investment Policies
Asset Allocation. Each CitiSelect Portfolio is a diversified asset
allocation fund that invests in a mix of equity and debt securities. Citibank,
N.A. ("Citibank"), the Portfolios' investment manager, allocates the assets of
each Portfolio to offer a specified level of return and a corresponding amount
of risk. Citibank generally allocates between 60% and 80% of the assets of
CitiSelect VIP Folio 200 Conservative to fixed income securities and between
20% and 40% of the Portfolio's assets to equity securities. CitiSelect VIP
Folio 300 Balanced is designed to offer the potential for higher returns and a
corresponding larger amount of risk than CitiSelect VIP Folio 200 Conservative.
Accordingly, Citibank generally allocates a smaller portion of the assets of
CitiSelect VIP Folio 300 Balanced to fixed income investments, typically
between 40% and 60%, and a larger portion of that Portfolio's assets to equity
investments, typically between 40% and 60%. Cash flows into or out of the
Portfolios, or market fluctuations, however, may produce different results.
Citibank monitors the Portfolios' asset mixes daily and conducts quarterly
reviews to determine whether to rebalance the Portfolios' investments.
Citibank may further allocate the Portfolios' equity securities among large
cap securities, small cap securities and international securities, and the
Portfolios' fixed income securities among U.S. and foreign investment grade
bonds and high yield (or junk) bonds. Citibank is not required to allocate the
Portfolio's assets among all of these types of equity and fixed income
securities at all times.
The Smith Barney Portfolio invests primarily in equity securities of.
Although the Portfolio intends to be fully invested in equity securities, it
may invest up to 35% of its total assets in debt securities and money market
instruments for cash management or other purposes. The Smith Barney Portfolio
invests typically in medium and large cap securities but may also invest in
small cap securities.
Equity Securities. The CitiSelect Portfolios' equity securities may include
common stocks, preferred stocks, securities convertible into common stocks and
warrants. Citibank may allocate the Portfolios' equity securities among large
cap issuers, small cap issuers and international issuers. These further
allocations are intended to maximize returns while managing overall volatility.
The Smith Barney Portfolio invests primarily in equity securities of U.S.
companies including common stocks and preferred stocks, debt securities
convertible into equity securities, and warrants and rights relating to equity
securities. The Smith Barney Portfolio's equity securities consist of a broad
range of companies, industries and sectors. The Smith Barney Portfolio invests
typically in medium and large cap securities but may also invest in small cap
securities.
Debt Securities. Each Portfolio's fixed income securities may include bonds
and short-term notes issued by the U.S. government (or its agencies and
instrumentalities), corporate bonds and short-term notes, mortgage-backed
securities, asset-backed securities and repurchase agreements. Citibank may
allocate the CitiSelect Portfolios' fixed income securities among U.S. and
foreign government and corporate bonds and between high yield (or junk) bonds
and investment grade securities. These further allocations are intended to
maximize returns while managing overall volatility of the CitiSelect
Portfolios. The Smith Barney Portfolio may not invest its assets in junk bonds.
Neither CitiSelect Portfolio anticipates investing more than 25% of its total
assets in junk bonds. Junk bonds may subject the CitiSelect Portfolios to
higher risks, as discussed under "Principal Investments, Risk Factors and
Investment Restrictions" below.
2
Neither the CitiSelect Portfolios nor the Smith Barney Portfolio are subject
to restrictions on the maturity of the individual securities in which the
Portfolios may invest.
Derivative Securities. Each Portfolio may invest in derivative securities,
including options on securities and foreign currencies, stock index options,
forward currency contracts, interest rate and foreign currency futures
contracts, stock index futures contracts and options on futures contracts. The
CitiSelect Portfolios also may invest in swap agreements, including interest
rate and currency swaps, equity swaps and other types of available swap
agreements including caps, collars and floors. The Smith Barney Portfolio may
invest in certain types of derivative securities only for hedging purposes or
as a substitute for buying and selling securities. The CitiSelect Portfolios
may invest in these same derivative securities for hedging and non-hedging
purposes, to enhance potential gains, to generate income, and also to manage
the maturity or duration of fixed income securities. Each of the Portfolios is
subject to certain limitations imposed by the Commodity Futures Trading
Commission with respect to its investments in derivatives. (See "Principal
Investments, Risk Factors and Investment Restrictions" below for information on
the risks of derivatives.)
Foreign Securities. The CitiSelect Portfolios may invest without limit in
foreign securities. The Smith Barney Portfolio may invest up to 10% of its net
assets in foreign securities. The CitiSelect Portfolios emphasize securities
included in the MSCI EAFE Index, which contains securities of companies located
in Europe, Australia and the Far East. These Portfolios also may invest in
emerging market equity securities. The Smith Barney Portfolio may not invest in
securities issued by issuers in developing countries (see "Principal
Investments, Risk Factors and Investment Restrictions" below for more
information on the risks of foreign securities).
Security Selection Process
Citibank allocates the CitiSelect Portfolios' investments among different
types of securities and investment styles so that the Portfolios may benefit
from investment cycles when securities with particular characteristics, or
those selected based on a particular investment style, outperform other
securities in the same asset class. To implement this strategy, Citibank
employs multiple subadvisers with expertise managing specific types of
securities or managing in a particular style.
Equity Securities. Citibank allocates the CitiSelect Portfolios' equity
investments among different investment styles. These styles include investing
in "growth" stocks (i.e., those issued by companies with seasoned management
teams, track records of above-average performance and strong earnings growth)
and investing in "value" stocks (i.e., those that appear undervalued or priced
below their true worth).
SSB Citi's investment strategy focuses on individual company selection and
management of cash reserves. SSB Citi seeks investments for the Smith Barney
Portfolio among a strong core of growth and value stocks, consisting primarily
of blue chip companies dominant in their industries. The Smith Barney Portfolio
may also invest in companies with prospects for sustained earnings growth
and/or a cyclical earnings record.
Fixed Income Securities. Citibank may diversify the fixed income securities
of the CitiSelect Portfolios among U.S. and non-U.S. investment grade corporate
debt obligations, securities issued by the U.S. government and its agencies and
instrumentalities, investment grade debt securities issued by foreign
governments, and U.S. and non-U.S. high yield debt securities. There is no
requirement that a CitiSelect Portfolio invest in each type of fixed income
security. The Portfolios may invest in securities with all maturities,
including long-term bonds (10+ years), intermediate notes (3 to 10 years) and
short-term notes (1 to 3 years).
3
The Smith Barney Portfolio intends to be fully invested in equity securities
but will temporarily invest in debt obligations, preferred securities or short
term money market instruments when SSB Citi believes that a conservative or
defensive investment posture is warranted or when opportunities for capital
appreciation do not appear attractive.
Investment Advisory Services and Management Fees
Citibank, a wholly-owned subsidiary of Citigroup Inc., serves as the
investment manager of the CitiSelect Portfolios. SSB Citi, also a wholly-owned
subsidiary of Citigroup Inc., serves as the investment manager of the Smith
Barney Portfolio and will continue to serve as the investment manager of the
Smith Barney Portfolio after the consummation of the Reorganization. Citigroup
businesses provide a broad range of financial services and asset management,
banking and consumer finance, credit and charge cards, insurance, investments,
investment banking and trading and use diverse channels to make them available
to consumer and corporate customers around the world.
Citibank employs SSB Citi (the manager of the Smith Barney Portfolio) as a
subadviser to manage the Portfolio's investments in large cap value securities.
Citibank is responsible for the management of all CitiSelect Portfolio
investments in large cap growth securities, small cap growth securities,
domestic investment grade fixed income securities, small cap value securities,
high-yield debt securities, international equity securities and foreign fixed
income securities.
Richard Goldman, a Vice President of Citibank, has been the overall
portfolio manager of the CitiSelect Portfolios since January, 1999.
Harry D. Cohen has been responsible for the day-to-day management of the
Smith Barney Portfolio since 1991 and will continue to be responsible for the
day-to-day management of the Portfolio after consummation of the
Reorganization. Mr. Cohen is an investment officer of SSB Citi and a managing
director of Salomon Smith Barney.
Each CitiSelect Portfolio pays an aggregate management fee, which is accrued
daily and paid monthly, of 0.75% of that Portfolio's average daily net assets
on an annualized basis for the Portfolio's then-current fiscal year. This
aggregate management fee includes fees payable to Citibank for the asset
management and administrative services Citibank provides the CitiSelect
Portfolios and fees payable to the subadvisers for their advisory services.
The management fee for the Smith Barney Portfolio is calculated at the
annual rate of 0.55% of that Portfolio's average daily net assets. The Smith
Barney Portfolio also pays to SSB Citi a fee for its administrative services in
the amount of 0.20% of its average daily net assets. Thus, the Smith Barney
Portfolio pays the same percentage of its average daily net assets in advisory
and management fees as the CitiSelect Portfolios. For a comparison of the total
annual operating expenses, both before and after waivers, of the CitiSelect
Portfolios and Smith Barney Portfolio, please review the expense tables under
"Overall Expenses" below.
Overall Expenses
The total annual operating expenses as a percentage of average net assets
for the Smith Barney Portfolio, as determined for the Portfolio's most recent
fiscal year, were lower than the total annual operating expenses of each
CitiSelect Portfolio for its most recent fiscal year, even after taking into
account the waiver or reimbursement of a portion of the CitiSelect Portfolios'
expenses.
4
Further information about the expenses of the CitiSelect Portfolios and the
Smith Barney Portfolio for their fiscal years ended December 31, 2000 and pro
forma expenses following the proposed Reorganization are outlined in the table
below.
Citiselect VIP Pro Forma
Folio 200 Appreciation Appreciation
Conservative Portfolio Portfolio
----------- --------- ---------
SHAREHOLDER FEES/1/
Fees Paid Directly FromYour Investment
Maximum Sales Charge (Load) Imposed on Purchases................ None None None
Maximum Deferred Sales Charge (Load)............................ None None None
ANNUAL FUND OPERATING EXPENSES/1/
Expenses That Are Deducted From Fund Assets
Management Fees................................................. 0.75%/2/ 0.75%/2/ 0.75%/2/
Distribution (12b-1) Fees....................................... None None None
Other Expenses (administrative, shareholder servicing and other
expenses)..................................................... 4.17% 0.03% 0.03%
Total Annual Fund Operating Expenses*........................... 4.92% 0.78% 0.78%
*Because some of the expenses of CitiSelect VIP Folio 200
Conservative were waived or reimbursed, actual total operating
expenses for its fiscal year ended 12/31/00 were: 0.95%
- --------
/1/ The foregoing fees and expenses do not reflect the fees and expenses
associated with the variable contracts for which the Portfolios serve as
investment vehicles. None of the fees or expenses associated with the
variable contracts will change as a result of the Reorganization.
/2 /A combined fee for investment advisory and administrative services.
This example is intended to help you compare the cost of investing in each
of the Portfolios. The example assumes you invest $10,000 in each Portfolio for
the time periods indicated and then redeem all of your shares at the end of
those periods. The example also assumes your investment has a 5% return each
year and that each Portfolio's annual operating expenses (before waivers and
reimbursements) remain the same. This example does not reflect the fees and
expenses associated with the variable contracts for which the Portfolios serve
as investment vehicles. None of the fees or expenses associated with the
variable contracts will change as a result of the Reorganization. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
CitiSelect VIP Folio 200 Conservative $492 $1,478 $2,465 $4,940
Appreciation Portfolio............... $ 80 $ 249 $ 433 $ 966
Pro Forma Appreciation Portfolio..... $ 80 $ 249 $ 433 $ 966
5
Citiselect VIP Pro Forma
Folio 300 Appreciation Appreciation
Balanced Portfolio Portfolio
----------- --------- ---------
SHAREHOLDER FEES/1/
Fees Paid Directly FromYour Investment
Maximum Sales Charge (Load) Imposed on Purchases.................... None None None
Maximum Deferred Sales Charge (Load)................................ None None None
ANNUAL FUND OPERATING EXPENSES
Expenses That Are Deducted From Fund Assets
Management Fees..................................................... 0.75%/2/ 0.75%/2/ 0.75%/2/
Distribution (12b-1) Fees........................................... None None None
Other Expenses (administrative, shareholder servicing and other
expenses)......................................................... 2.93% 0.03% 0.03%
Total Annual Fund Operating Expenses*............................... 3.68% 0.78% 0.78%
*Because some of the expenses of CitiSelect VIP Folio 300 Balanced
were waived or reimbursed, actual total operating expenses for its
fiscal year ended 12/31/00 were: 0.95%
- --------
/1/ The foregoing fees and expenses do not reflect the fees and expenses
associated with the variable contracts for which the Portfolios serve as
investment vehicles. None of the fees or expenses associated with the
variable contracts will change as a result of the Reorganization.
/2/ A combined fee for investment advisory and administrative services.
This example is intended to help you compare the cost of investing in each
of the Portfolios. The example assumes you invest $10,000 in each Portfolio for
the time periods indicated and then redeem all of your shares at the end of
those periods. The example also assumes your investment has a 5% return each
year and that each Portfolio's annual operating expenses (before waivers and
reimbursements) remain the same. This example does not reflect the fees and
expenses associated with the variable contracts for which the Portfolios serve
as investment vehicles. None of the fees or expenses associated with the
variable contract will change as a result of the Reorganization. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
CitiSelect VIP Folio 300 Balanced $370 $1,126 $1,902 $3,932
Appreciation Portfolio........... $ 80 $ 249 $ 433 $ 966
Pro Forma Appreciation Portfolio. $ 80 $ 249 $ 433 $ 966
Distribution of Shares and Other Services
Distributor
The distributor of the CitiSelect Portfolios and of the Smith Barney
Portfolio is Salomon Smith Barney Inc. Salomon Smith Barney is not paid a fee
for providing distribution services to the Portfolios.
The shares of each of the Portfolios are sold exclusively to separate
accounts of insurance companies to fund the variable contracts issued by those
companies. A separate account buys or sells shares of a Portfolio based on
6
(i) a variable contract owner's instruction to invest or receive back money
under the variable contract (such as making a premium payment or surrendering a
contract) and (ii) the operation of a variable contract itself (such as the
deduction of fees and charges).
Other Service Providers
As indicated below, the CitiSelect Portfolios and the Smith Barney Portfolio
generally have different service providers. Upon completion of the
Reorganization, the Smith Barney Portfolio will continue to engage its existing
service providers. In all cases, the types of services provided to the
Portfolios under these service arrangements are substantially similar.
Service Provider CitiSelect Portfolios Smith Barney Portfolio
- ---------------- --------------------- ----------------------
Custodian State Street Bank and Trust PFPC Trust Company
Company
Auditors PricewaterhouseCoopers LLP KPMG LLP
Transfer Agent Citi Fiduciary Trust Company Citi Fiduciary Trust Company
Sub-Transfer Agent N/A PFPC Global Fund Services
Purchase Policies and Redemption Information
Purchase Policies
You may not purchase shares of any Portfolio directly. You can only invest
in a Portfolio by purchasing a variable annuity contract or variable life
insurance policy offered by a participating insurance company and directing the
allocation of part or all of your premium payments to a separate account that
invests in a Portfolio as permitted under the prospectus for your variable
contract. You should read the prospectus of your variable contract for more
information. The terms of your variable contract will not change as a result of
the Reorganization.
The Portfolios do not impose any minimum initial or subsequent investment
requirements but your variable contract may.
Redemptions
Shares of the CitiSelect Portfolios and the Smith Barney Portfolio are
redeemable on any business day at a price equal to the net asset value of the
shares the next time it is calculated after receipt by the Portfolio of a
redemption order from a separate account. Each Portfolio has the right to pay
redemption proceeds by distributing securities instead of cash. In that case, a
shareholder may incur costs (such as brokerage commissions) converting the
securities into cash.
Insurance company separate accounts may sell Portfolio shares to generate
cash to meet various obligations under variable contracts. You should read your
variable contract prospectus for the separate account's policy on when or
whether to buy or redeem Portfolio shares, to find out how you may withdraw
from or cancel your policy, what surrender fees or expenses you may incur and
whether you may be taxed on the amount of any withdrawal, including any penalty
tax. The terms of your variable contract will not change as a result of the
Reorganization.
7
Dividends and Other Distributions
The CitiSelect Portfolios and the Smith Barney Portfolio have similar
policies relating to dividend and capital gain distributions to shareholders.
For each Portfolio, capital gain distributions and dividends are automatically
reinvested in additional shares of the Portfolio. The Portfolios pay dividends
and distribute capital gains, if any, according to the following schedule:
Income Dividend Capital Gain
Portfolio Distributions Distributions
--------- ------------- -------------
CitiSelect VIP Folio 200 Conservative annually (in December) annually (in December)
CitiSelect VIP Folio 300 Balanced annually (in December) annually (in December)
Appreciation Portfolio annually annually (shortly after the close of
the fiscal year)
On or immediately prior to the Closing Date of the Reorganization, each of
the CitiSelect Portfolios will distribute (in the form of one or more dividends
and/or other distributions) to its shareholders substantially all of its
investment company taxable income and realized net capital gain, if any, for
the current taxable year through the date of such distribution or dividend.
Such distributions or dividends will automatically be reinvested in the manner
described above. Between the Closing Date and the end of its current taxable
year, it is expected that the Smith Barney Portfolio will make one or more
similar distributions to its shareholders, including the former CitiSelect
shareholders who receive shares of the Smith Barney Portfolio in the
Reorganization. See your variable contract prospectus for information regarding
the federal income tax treatment of distributions to insurance company separate
accounts and to owners of variable contracts.
Tax Consequences
Although there is some uncertainty as to the precise tax treatment of the
Reorganization of a CitiSelect Portfolio, the Reorganization of a CitiSelect
Portfolio should not cause any shareholder of that CitiSelect Portfolio that is
a separate account of an insurance company holding shares of that CitiSelect
Portfolio solely to fund benefits under variable contracts, or any owner of
such a variable contract, to recognize a taxable gain or loss for federal
income tax purposes.
As further described below under the heading "The Proposed
Transaction--Federal Income Tax Consequences," VAP and the Smith Barney Trust
believe that the Reorganization of each CitiSelect Portfolio is likely to
constitute a reorganization within the meaning of section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). If that is the case,
the Reorganization of each CitiSelect Portfolio will not cause that CitiSelect
Portfolio, its shareholders, or any owner of a variable contract that has an
interest in a separate account to recognize any gain or loss for federal income
tax purposes.
If, on the other hand, the Reorganization of a CitiSelect Portfolio does not
constitute a reorganization under section 368(a), that CitiSelect Portfolio
will recognize any applicable gain or loss on the transfer of its assets to the
Smith Barney Portfolio in exchange for shares of the Smith Barney Portfolio and
the assumption of the liabilities of that CitiSelect Portfolio by the Smith
Barney Portfolio. However, as a result of its status as a regulated investment
company, it is not expected that a CitiSelect Portfolio will have any federal
income tax liability as a result of such gain or loss. In addition, because of
the special tax rules applicable to insurance companies and variable contracts,
the distribution of the shares of the Smith Barney Portfolio in exchange for
CitiSelect Portfolio shares in the Reorganization should not cause any owner of
a variable contract, or any shareholder of a CitiSelect Portfolio that is a
separate account of an insurance company holding its shares of a CitiSelect
Portfolio solely to fund benefits under variable contracts, to realize a
taxable gain or loss for federal income tax purposes. See "The Proposed
Transaction--Federal Income Tax Consequences."
8
PRINCIPAL INVESTMENTS, RISK FACTORS, AND INVESTMENT RESTRICTIONS
Principal Investments and Risk Factors
The investment objectives and policies and risk factors of CitiSelect
Portfolios are, in some respects, similar to those of the Smith Barney
Portfolio. There are, however, certain important differences. The following
discussion summarizes some of the more significant similarities and differences
in the investment policies and risk factors of each of the CitiSelect
Portfolios and the Smith Barney Portfolio and is qualified in its entirety by
the Prospectuses and Statements of Additional Information of each of the
CitiSelect Portfolios and the Smith Barney Portfolio incorporated herein by
reference.
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
---------------------------- -------------------------------------------------
All Portfolios Asset Allocation:
Each CitiSelect Each CitiSelect Portfolio invests in a mix of equity and fixed income
Portfolio--allocates assets securities (each of these types of securities is referred to as an asset
between equity and fixed class). Citibank may further allocate the Portfolios' equity securities
income securities among large cap issuers, small cap issuers and international issuers and
its fixed income securities among U.S. and foreign investment grade and
Smith Barney Portfolio--may high-yield bonds. The CitiSelect Portfolios' investment strategies depend
invest up to 35% of its assets largely on the investment manager's skill in both identifying the long
in fixed income securities, term performance and relationships between asset classes and in
including money market assessing accurately the growth potential or credit quality of companies
instruments, but intends to be in which the Portfolios invest, in predicting accurately the direction of
fully invested in equity interest rates or the maturity of certain debt obligations, and other factors.
securities In addition, the investment manager may be wrong in its determinations.
Citibank may change the Portfolios' asset allocations from time to time
in response to market conditions and other factors. No approval by the
Trustees of the CitiSelect Portfolios is required.
The Smith Barney Portfolio intends to be fully invested in equity
securities. Although the Smith Barney Portfolio does not intend to
allocate its assets among equity and fixed income securities, it may invest
up to 35% of its total assets in fixed income securities, including money
market instruments for cash management or other purposes.
The risks of investing in each Portfolio depend on the securities it holds
and the investment strategy it uses. The CitiSelect Portfolios, for
example, may be more susceptible to interest-rate risk and credit risk (as
explained below) than the Smith Barney Portfolio because the Smith
Barney Portfolio generally does not intend to invest in fixed income
securities or invests in them to a more limited extent. Conversely, the
Smith Barney Portfolio, because it invests more of its assets in equity
securities, may be more susceptible to greater price volatility than the
CitiSelect Portfolios.
9
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
- ---------------------------- -------------------------------------------------
All Portfolios Market Risk:
The prices of securities will rise or fall due to changing economic,
political or market conditions, or due to the company's individual
situation. Some securities held by a Portfolio may be quite volatile,
meaning that their prices can change significantly in a short time.
All Portfolios Growth and Value Investing:
In selecting equity investments for the CitiSelect Portfolios, Citibank
employs both growth and value investing strategies. Growth securities
are typically sensitive to market movements because their market prices
tend to reflect future expectations. When it appears that those
expectations will not be met, the prices of growth securities typically fall.
An investment in growth securities may underperform certain other stock
investments, such as value stocks, during periods when growth stocks are
out of favor.
Value investing involves selecting stocks that are inexpensive compared
to other companies with similar earnings or assets. However, value
stocks may continue to be inexpensive for long periods of time, and may
never realize their potential. A security may not achieve its expected
value because the circumstances causing it to be underpriced may stay
the same or worsen. Value stocks may underperform certain other stock
investments, such as growth stocks, during periods when value stocks are
out of favor.
SSB Citi's investment strategy focuses on individual company selection and
management of cash reserves. SSB Citi seeks investments among a strong
core of growth and value stocks, consisting primarily of blue chip
companies dominant in their industries. The Smith Barney Portfolio may
also invest in companies with prospects for sustained earnings growth and/or
a cyclical earnings record. Generally, companies in the Smith Barney
Portfolio fall into one of the following categories: (1) undervalued
companies--companies with assets or earning power that are either
unrecognized or undervalued; and (2) investments offering growth at a
reasonable price--companies with superior demonstrated and expected
growth characteristic whose stocks are available at a reasonable price.
Because this strategy combines both growth and value investing, it also
offers style diversification. This strategy is subject to the same risks as both
growth investing and value investing.
To the extent that the Portfolios invest varying proportions of their assets
in growth or value securities, they may perform differently when one
style or the other is out of favor due to the differences in the investment
styles they emphasize.
10
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
- ---------------------------- -------------------------------------------------
All Portfolios Portfolio Selection:
The success of each Portfolio's investment strategy depends in large part
on its portfolio managers. In selecting equity securities, a Portfolio's
portfolio managers may not be correct in identifying securities of
companies that perform well based on a "growth" or "value" strategy. In
selecting fixed income securities, the portfolio managers may be unable
to predict accurately the direction of interest rates or the maturity of
certain debt obligations, or to assess accurately credit quality and other
factors. Alternatively, the portfolio managers may not appropriately
allocate a Portfolio's assets between equity and fixed income securities.
In that case, you may lose money, or your investment may not do as well
as an investment in another mutual fund with a similar investment focus.
All Portfolios Small Capitalization Issuers:
Each Portfolio may invest in small capitalization companies. Investing in
small companies involves unique risks. Compared to large companies,
small companies, and the market for their common stocks, are likely to:
.Be more sensitive to changes in the economy, earnings results and
investor expectations.
.Have more limited product lines and capital resources.
. Experience sharper swings in market values.
.Be harder to sell at the times and prices the Portfolio thinks
appropriate.
All Portfolios Interest Rate Risk:
In general, the prices of debt securities rise when interest rates fall, and
fall when interest rates rise. Longer-term obligations are usually more
sensitive to interest rate changes. A change in interest rates could cause a
Portfolio's share price to go down.
All Portfolios Credit Risk:
Some issuers may not make payments on debt securities held by a
Portfolio. Or, an issuer's financial condition may deteriorate, leading to
greater volatility in the price of the security and making the security more
difficult for the Portfolio to sell. Lower-quality debt securities are more
susceptible to this risk than higher-quality debt securities. As noted
below, only the CitiSelect Portfolios may invest in lower-quality debt
securities known as "junk bonds." To the extent that a Portfolio's assets
are invested in lower-quality debt securities, that Portfolio may be
subject to greater risk.
11
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
---------------------------- -------------------------------------------------
CitiSelect Portfolios Junk Bonds:
Each CitiSelect Portfolio may invest in debt securities of any grade,
including junk bonds. Junk bonds are considered to be speculative
investments and involve greater risks than higher-quality securities. The
value of junk bonds will usually fall substantially if the issuer defaults or
goes bankrupt. Even anticipation of defaults by certain issuers, or the
perception of economic or financial weakness, may cause the market for
junk bonds to fall. The price of a junk bond may therefore fluctuate
drastically due to bad news about the issuer or the economy in general.
Lower quality debt securities, especially junk bonds, may be less liquid
and may be more difficult for the Portfolio to value and sell. The
Portfolio may incur additional expenses if an issuer defaults and the
Portfolio tries to recover some of its losses in a bankruptcy or other
similar proceeding.
The Smith Barney Portfolio does not invest in junk bonds. The Smith
Barney Portfolio is therefore not subject to the additional risks related to
junk bonds.
All Portfolios Foreign Securities:
Smith Barney Portfolio--has Investments in foreign securities involve risks relating to political, social
no current intention to invest and economic developments abroad, as well as risks resulting from the
in emerging markets differences between the regulations to which U.S. and foreign issuers and
markets are subject. These risks may include expropriation of assets,
CitiSelect Portfolios--may confiscatory taxation, withholding taxes on dividends and interest paid
invest in emerging markets on Portfolio investments, fluctuations in currency exchange rates,
currency exchange controls and other limitations on the use or transfer of
assets by the Portfolio or issuers of securities, and political or social
instability. There may be rapid changes in the value of foreign currencies
or securities, causing the Portfolio's share price to be volatile. In
addition, in certain circumstances, the Portfolio could realize reduced or
no value in U.S. dollars from its investments in foreign securities,
causing the Portfolio's share price to go down. Finally, there is generally
less information about non-U.S. issuers or markets available because of
less rigorous disclosure and accounting standards or regulatory practices.
The CitiSelect Portfolios may invest in issuers located in emerging, or
developing, markets. All of the risks of investing in foreign securities are
heightened by investing in these markets.
The Smith Barney Portfolio has no current intention to invest in
emerging markets. The Smith Barney Portfolio is therefore not subject to
the additional risks of emerging markets securities.
12
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
- ---------------------------- -------------------------------------------------
All Portfolios Prepayment and Extension Risk:
The issuers of debt securities held by the Portfolios may be able to call a
bond or prepay principal due on the securities, particularly during periods
of declining interest rates. The Portfolios may not be able to reinvest that
principal at attractive rates, and the Portfolios may lose any premium
paid. On the other hand, rising interest rates may cause prepayments to
occur at slower than expected rates. This effectively lengthens the
maturity of debt securities, making them more sensitive to interest rate
changes.
All Portfolios Convertible Securities:
Each Portfolio may invest in convertible securities. Convertible
securities, which are debt securities that may be converted into stock, are
subject to the market risk of stocks, and, like other debt securities, are
also subject to interest rate risk and the credit risk of their issuers. Call
provisions may allow the issuer to repay the debt before it matures.
All Portfolios Derivatives:
Smith Barney Each Portfolio may invest in derivative securities, including options on
Portfolio--subject to certain securities, stock index options, forward currency contracts, interest rate
limits on types and amount of futures contracts, stock index futures contracts and options on futures
derivatives contracts:
CitiSelect Portfolios--may .To hedge against the economic impact of adverse changes in the
invest in additional types of market value of portfolio securities, because of changes in interest
derivatives and for broader, rates or exchange rates; or
non-hedging purposes
.As a substitute for buying or selling securities.
The CitiSelect Portfolios may also invest in derivative securities for non-
hedging purposes, to enhance potential gains or to generate income.
A derivative contract will obligate or entitle a Portfolio to deliver or
receive an asset or cash payment based on the change in value of one or
more securities, currencies or indices.
The Portfolios' use of derivatives may involve leveraging. Under
leveraging, a relatively small investment may produce substantial losses
or gains for a Portfolio, well beyond the Portfolio's initial investment.
Using derivatives can disproportionately increase losses and reduce
opportunities for gains when interest rates, exchange rates or securities
markets are changing. A Portfolio may not fully benefit from or may lose
money on derivatives if changes in their value do not correspond
accurately to changes in the value of the Portfolio's holdings.
13
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
- ---------------------------- -------------------------------------------------
The other parties to certain derivative contracts present the same types of
default risk as issuers of fixed income securities. Derivatives can also
make a Portfolio less liquid and harder to value, especially in declining
markets.
As described above, the Smith Barney Portfolio is subject to certain
limitations on its use of derivatives. In contrast, the CitiSelect Portfolios
have more flexibility with respect to their types and amounts of
derivatives in which they can invest. In certain circumstances, the
CitiSelect Portfolios may be subject to higher risk than the Smith Barney
Portfolio because of this flexibility with respect to derivative investments
CitiSelect Portfolios Only Short Sales:
The CitiSelect Portfolios may engage in short sales. A short sale occurs
when a Portfolio's portfolio manager, anticipating that the price of a
security will decline, enters into an agreement to sell the security even
though the Portfolio does not own it. The Portfolio will then borrow the
same security from a broker or other institution in order to complete the
sale. The Portfolio must later purchase the security in order to return the
security borrowed. If the portfolio manager has predicted accurately, the
price at which the Portfolio buys the security will be less than the price at
which the Portfolio earlier sold the security, creating a profit for the
Portfolio. However, if the price of the security goes up during this period,
the Portfolio will be forced to buy the security for more than its sale
price, causing a loss to the Portfolio. Losses from short sales may be
unlimited.
The Smith Barney Portfolio generally does not engage in short sales. To
the extent that a CitiSelect Portfolio engages in short sales, it may be
subject to more risk than the Smith Barney Portfolio.
All Portfolios Portfolio Turnover:
The Portfolios may engage in active and frequent trading to achieve their
principal investment strategies. Frequent trading increases transaction
costs, which could detract from a Portfolio's performance.
Although the portfolio managers of the Portfolios attempt to minimize
portfolio turnover, from time to time a Portfolio's annual portfolio
turnover rate may exceed 100%. For a comparison of the historical
portfolio turnover rates of the Portfolios, see "The Proposed
Transaction--Portfolio Turnover" below.
14
Portfolio(s) Subject to Risk Principal Investment and Accompanying Risk Factor
- ---------------------------- -------------------------------------------------
All Portfolios Defensive Strategies:
The Portfolios may, from time to time, take temporary defensive
positions that are inconsistent with the Portfolios' principal investment
strategies in attempting to respond to adverse market, political or other
conditions. When doing so, the Portfolios may invest without limit in
high-quality money market or other short-term instruments, and may not
be pursuing their investment goals.
The foregoing describes the principal investments and related risks of each
Portfolio. Each Portfolio may invest in additional types of investments and may
be subject to additional risk factors that are described in the Statement of
Additional Information of that Portfolio. Certain of these non-principal
investments and related risk factors may differ for each Portfolio. For
example, the Smith Barney Portfolio may not invest in securities of issuers
from developing markets, while the CitiSelect Portfolios may do so without
limit. For a description of these investments and related risks, please consult
the Prospectus and Statement of Additional Information of the applicable
Portfolio.
Fundamental Investment Restrictions
Each Portfolio has adopted certain fundamental investment restrictions which
may not be changed without the affirmative vote of the holders of a majority of
the outstanding voting securities (as defined in the 1940 Act) of that
Portfolio. The Smith Barney Portfolio is subject to fundamental investment
restrictions that, in general, are similar to those of the CitiSelect
Portfolios. These fundamental restrictions limit the amounts that a Portfolio
may borrow and prohibit the Portfolio from investing in a manner that would
cause it to fail to be a diversified investment company under the 1940 Act,
from investing more than 25% of the Portfolio's total assets in securities of
issuers in the same industry (with certain exceptions), from making loans (with
certain exceptions), from underwriting securities issued by other persons, from
purchasing or selling real estate, commodities or commodity contracts (with
certain exceptions), from investing in oil, gas or mineral leases (with respect
to the CitiSelect Portfolios only), or from issuing "senior securities" (as
defined in the 1940 Act) to the extent prohibited by the 1940 Act.
Although these restrictions are similar, their parameters may be different
among the Portfolios.
Non-Fundamental Investment Restrictions
In addition to the fundamental restrictions described above, each of the
Portfolios is subject to certain non-fundamental restrictions that may be
changed at any time by that Portfolio's Board of Trustees without shareholder
approval.
These non-fundamental restrictions provide that neither of the CitiSelect
Portfolios may:
(l) borrow money in excess of 10% of the total assets of the Portfolio
(taken at cost), except that a Portfolio may borrow up to 25% of its total
assets when such borrowing is necessary to meet redemption requests
(moreover, no CitiSelect Portfolio will purchase any securities for the
Portfolio at any time at which borrowings exceed 5% of the total assets of
the Portfolio (taken at market value); or
15
(2) invest more than 20% of its total assets in the securities of issuers
located in any one foreign country, except that the Portfolio may have an
additional 15% of its total assets in the securities of issuers located in
any one of the following countries: Australia, Canada, France, Japan, the
Untied Kingdom, or Germany.
The Smith Barney Portfolio's non-fundamental restrictions provide that the
Smith Barney Portfolio may not:
(1) invest in oil, gas or other mineral exploration or development
programs;
(2) purchase securities on margin (except for such short-term credits as
are necessary for the clearance of purchases and sales of portfolio
securities) or sell any securities short (except "against the box");
(3) write or sell puts, calls, straddles, spreads or combinations
thereof, except as permitted under the Portfolio's investment goals and
policies;
(4) purchase any security if as a result the Portfolio would then have
more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for fewer
than three years;
(5) make investments for the purpose of exercising control or management;
(6) invest in warrants other than those acquired by the Portfolio as part
of a unit or attached to securities at the time of purchase (except as
permitted under the Portfolio's investment goals and policies) if, as a
result, the investments (valued at the lower of cost or market) would exceed
5% of the value of the Portfolio's net assets or if, as a result, more than
2% of the Portfolio's net assets would be invested in warrants not listed on
a recognized U.S. or foreign exchange to the extent permitted by applicable
state securities laws;
(7) purchase restricted securities, illiquid securities or other
securities that are not readily marketable if more than 10% of the total
assets of the Portfolio would be invested in such securities;
(8) invest more than 10% of its total assets in time deposits maturing in
more than seven calendar days; or
(9) invest in securities of other investment companies registered or
required to be registered under the 1940 Act, except as they may be acquired
as part of a merger, consolidation, reorganization, acquisition of assets or
an offer of exchange or as otherwise permitted by law.
As a result of these differences in non-fundamental restrictions, the Smith
Barney Portfolio may be more limited in its ability to engage in certain types
of transactions than the CitiSelect Portfolios. However, these additional
non-fundamental restrictions may also prevent the Smith Barney Portfolio from
engaging in transactions that would subject the Portfolio to additional risks.
For additional information, you should consult the Prospectus and Statement
of Additional Information of the applicable Portfolio.
16
THE PROPOSED TRANSACTION
Description of the Plan
As described above, the Plan provides that all of the assets (other than
those specified in the Plan) and all of the liabilities of each CitiSelect
Portfolio will be transferred to the Smith Barney Portfolio. In exchange for
the transfer of those assets and liabilities, each of the CitiSelect Portfolios
will receive shares of the Smith Barney Portfolio ("Reorganization Shares").
Reorganization Shares of the Smith Barney Portfolio so received will then be
distributed to the shareholders of the CitiSelect Portfolios in complete
liquidation of the CitiSelect Portfolios, and each CitiSelect Portfolio will be
terminated.
As a result of the Reorganization, each shareholder of a CitiSelect
Portfolio will receive that number of full and fractional shares of the Smith
Barney Portfolio having an aggregate net asset value equal to the aggregate net
asset value of the shareholder's shares of the respective CitiSelect Portfolio
held on the Closing Date. The Smith Barney Portfolio will establish an account
for each CitiSelect shareholder that will reflect the number of shares of the
Smith Barney Portfolio distributed to that shareholder. The Smith Barney
Portfolio's shares issued in the Reorganization will be in uncertificated form.
Until the closing of the Reorganization, shareholders that are invested in
the CitiSelect Portfolios will, of course, continue to be able to sell shares
at the net asset value next determined after receipt by the CitiSelect
Portfolios' transfer agent of a redemption request in proper form. Redemption
requests received by the CitiSelect Portfolios' transfer agent after the
closing of the Reorganization will be treated as requests received for the
redemption of shares of the Smith Barney Portfolio.
The obligations of the CitiSelect Portfolios and the Smith Barney Portfolio
under the Plan are subject to various conditions, as stated therein. Among
other things, the Plan requires that all filings be made with, and all
authority be received from, the Securities and Exchange Commission and state
securities commissions as may be necessary in the opinion of counsel to permit
the parties to carry out the transactions contemplated by the Plan. The
CitiSelect Portfolios and the Smith Barney Portfolio are in the process of
making the necessary filings.
To provide against unforeseen events, the Plan may be terminated prior to
the Closing Date by action of the Trustees of either the CitiSelect Portfolios
or the Smith Barney Portfolio or amended prior to the Closing Date by action of
the Trustees of the CitiSelect Portfolios and the Smith Barney Portfolio, in
each case notwithstanding the approval of the Plan by the shareholders of the
CitiSelect Portfolios. However, no amendment may be made that materially
adversely affects the interests of the shareholders of a CitiSelect Portfolio
without obtaining the approval of that CitiSelect Portfolio's shareholders. The
CitiSelect Portfolios and the Smith Barney Portfolio may at any time waive
compliance with certain of the covenants and conditions contained in the Plan.
The Plan provides that in the event the Plan is approved with respect to one
but not both of the CitiSelect Portfolios, the failure of one CitiSelect
Portfolio to consummate the transactions contemplated by the Plan shall not
affect the consummation or validity of the Plan with respect to the other
CitiSelect Portfolio.
Citibank and SSB Citi will assume and pay all of the expenses that are
solely and directly related to the Reorganization. Shareholders have no rights
of appraisal.
Reasons for the Proposed Transaction
At a meeting of the Board of Trustees of VAP held on February 16, 2001, the
Trustees of VAP, including a majority of the Non-Interested Trustees,
considered materials discussing the potential benefits to the shareholders
17
of the CitiSelect Portfolios if the CitiSelect Portfolios were to reorganize
with and into the Smith Barney Portfolio. For the reasons discussed below, the
Board of Trustees of VAP, including a majority of the Non-Interested Trustees,
has determined that the proposed Reorganization is in the best interests of the
CitiSelect Portfolios and their shareholders and that the interests of the
CitiSelect shareholders will not be diluted as a result of the proposed
Reorganization.
The proposed combination of the CitiSelect Portfolios into the Smith Barney
Portfolio will allow the shareholders of the CitiSelect Portfolios to continue
to participate in a professionally-managed portfolio. The Trustees of VAP
believe that each CitiSelect Portfolio and its shareholders will benefit from
the proposed Reorganization for the following reasons:
Economies of Scale; Fees and Expenses
Each CitiSelect Portfolio has fewer assets than the Smith Barney Portfolio
and lesser prospects for growth. As a result, the CitiSelect Portfolios may not
be able to reduce their operating expenses in the future and may find it
increasingly difficult to achieve competitive investment results. In contrast,
the Smith Barney has a large, expanding asset base and is offered through a
wide range of insurance products.
In light of the foregoing, SSB Citi and Citibank believe that the
combination of the CitiSelect Portfolios and the Smith Barney Portfolio into a
single larger fund will increase potential economic and other efficiencies for
investors and may result in lower total annual expense ratios. Of course, there
is no assurance that this will be the case. Some of the fixed expenses
currently paid by the Portfolios, such as accounting, legal and printing costs,
would be spread over a larger asset base upon the combination of the CitiSelect
Portfolios and Smith Barney Portfolio. Other things being equal, shareholders
may be expected to benefit from economies of scale through lower expense ratios
and higher net income distributions over time.
In addition, CitiSelect shareholders will benefit from the lower total
annual operating expenses of the Smith Barney Portfolio (as determined for each
Portfolio's most recent fiscal year). The total annual operating expenses for
the Smith Barney Portfolio are lower than the total annual operating expenses
of the CitiSelect Portfolios, both before and after waivers.
No Effect on Variable Contracts
After the Reorganization the owners of the variable contracts who invest,
through separate accounts, in the CitiSelect Portfolios will be afforded the
same contract rights they currently have under their variable contracts,
including surrender and other transfer rights, with respect to amounts invested
under those contracts. The Reorganization will take place at net asset value
and will not increase or decrease the amount of the policy value of any
variable contract. The Reorganization will not impose any additional fees on
owners of variable contracts nor will the Reorganization have any effect on the
charges currently imposed under the variable contracts. Variable contract
owners will not bear any added cost or expense as a result of the
Reorganization. In addition, the Reorganization will in no way change whatever
tax benefits the contract owners currently enjoy and will not result in any
adverse federal income tax consequences for any separate account or contract
owner. Finally, the Reorganization will in no way alter the insurance benefits
enjoyed by variable contract owners or the contractual obligations of the
insurance companies that issued those contracts.
Due to a combination of factors, including the benefits described above, the
Board of Trustees of VAP, on behalf of the CitiSelect Portfolios, believes that
each CitiSelect Portfolio and its shareholders would benefit from
18
a reorganization with the Smith Barney Portfolio. ACCORDINGLY, IT IS
RECOMMENDED THAT THE CITISELECT SHAREHOLDERS APPROVE THE REORGANIZATION WITH
THE SMITH BARNEY PORTFOLIO.
The Board of Trustees of VAP, on behalf of the CitiSelect Portfolios, in
recommending the proposed transaction, considered a number of factors,
including the following:
(a) the total lower annual expense ratios of the Smith Barney Portfolio
as compared to the CitiSelect Portfolios, both before and after waivers;
(b) the long-term viability of the CitiSelect Portfolios as compared to
that of the Smith Barney Portfolio;
(c) the potential benefits to CitiSelect shareholders of becoming
shareholders of a mutual fund with a larger asset base;
(d) the ability of each variable contract owner with an interest in a
CitiSelect Portfolio to transfer his or her interest out of that CitiSelect
Portfolio and into a separate account that may be a more appropriate
investment for that variable contract owner, without charge and without such
transfer counting as a transfer under variable contracts that limit
allowable transfers;
(e) the advisory, distribution, and other servicing arrangements of the
Smith Barney Portfolio;
(f) the terms and conditions of the Reorganization and that it should not
result in a dilution of CitiSelect shareholder interests;
(g) the amount of costs and expenses to the CitiSelect Portfolios of the
Reorganization;
(h) a variety of alternatives potentially available to the CitiSelect
Portfolios;
(i) the CitiSelect Portfolios' investment objectives, policies and
restrictions as compared with those of the Smith Barney Portfolio; and
(j) the historical performance of the Smith Barney Portfolio.
Description of the Securities to Be Issued
Each CitiSelect Portfolio is a diversified series of VAP, which was
organized as a business trust under the laws of the Commonwealth of
Massachusetts on October 18, 1996 and is registered with the Securities and
Exchange Commission as an open-end management investment company. The Smith
Barney Portfolio is a diversified series of the Smith Barney Trust, which was
organized a business trust under the laws of the Commonwealth of Massachusetts
pursuant to the First Amended and Restated Master Trust Agreement dated October
14, 1998, as amended from time to time, and is registered with the Securities
and Exchange Commission as an open-end management investment company.
Each Portfolio currently offers one class of shares. Each share of a
Portfolio represents an interest in the Portfolio that is equal to and
proportionate with each other share of the Portfolio. Each share of each
Portfolio has identical voting, dividend, liquidation and other rights on the
same terms and conditions. Shareholders are entitled to one vote per share held
on matters on which they are entitled to vote. Shareholders in the Portfolios
do not have cumulative voting rights, and shareholders owning more than 50% of
the outstanding shares of either VAP or the Smith Barney Trust may elect all of
the Trustees if they choose to do so and in such event the other shareholders
would not be able to elect any Trustee.
19
VAP is not required to hold annual meetings of shareholders but VAP will
hold special meetings of shareholders when in the judgment of the Trustees it
is necessary or desirable to submit matters for a shareholder vote. The Smith
Barney Trust is also not required to hold annual meetings of shareholders but
meetings of shareholders may be called by the Trustees from time to time for
the purpose of taking action upon any matter requiring the vote or authority of
the shareholders as provided in the Master Trust Agreement or upon any other
matter deemed by the Trustees to be necessary or desirable.
Shareholders of VAP have, under certain circumstances (e.g., upon the
application and submission of certain specified documents to the Trustees by a
specified number of shareholders), the right to communicate with other
shareholders in connection with requesting a meeting of shareholders for the
purpose of removing one or more Trustees. Shareholders also have under certain
circumstances the right to remove one or more Trustees without a meeting by a
declaration in writing by a specified number of shareholders. The Trustees of
the Smith Barney Trust must promptly call and give notice of a meeting of
shareholders for the purpose of voting upon removal of any Trustee of the Smith
Barney Trust when requested to do so in writing by shareholders holding not
less than 10% of the shares then outstanding.
Federal Income Tax Consequences
Based on certain factual representations made by VAP and the Smith Barney
Trust, Bingham Dana LLP, as tax counsel to VAP, has advised the CitiSelect
Portfolios and the Smith Barney Portfolio that the Reorganization of each
CitiSelect Portfolio will satisfy all of the requirements to be treated as a
reorganization under section 368(a) of the Code, with the exception of the
"continuity of business enterprise" requirement. In order to satisfy that
requirement as to either Reorganization, the Smith Barney Portfolio must either
continue the historic business of that CitiSelect Portfolio or use a
significant portion of that CitiSelect Portfolio's historic business assets in
a business. VAP and the Smith Barney Trust are not in a position to represent
that the Smith Barney Portfolio will satisfy either requirement. As a result,
Bingham Dana LLP is unable to render an opinion as to whether the
Reorganization of each CitiSelect Portfolio of will constitute a tax-free
reorganization under section 368(a) of the Code. Nevertheless VAP and the Smith
Barney Trust believe it is likely that the Smith Barney Portfolio will satisfy
one or both of the tests for continuity of business enterprise with respect to
each Reorganization. If, in fact, the Smith Barney Portfolio does satisfy at
least one of those tests with respect to a Reorganization, that Reorganization
will be a tax-free reorganization under section 368(a).
As described below, moreover, the federal income tax consequences to a
CitiSelect Portfolio and its shareholders, as well as to owners of variable
contracts that are based on the investment performance of a CitiSelect
Portfolio, should generally be the same whether or not the Reorganization
constitutes a reorganization under section 368(a).
While VAP and the Smith Barney Trust are not aware of any adverse state or
local tax consequences of the proposed Reorganization, they have not requested
any ruling or opinion with respect to such consequences and shareholders and
owners of variable contracts may wish to consult their own tax advisers with
respect to such matters.
Tax consequences of treatment as a reorganization under section 368(a)
If a Reorganization of a CitiSelect Portfolio constitutes a tax-free
reorganization under section 368(a) of the Code, that CitiSelect Portfolio and
the Smith Barney Portfolio will be a party to a reorganization within the
20
meaning of section 368(b) of the Code, and, for federal income tax purposes;
(i) no gain or loss will be recognized by that CitiSelect Portfolio upon the
transfer of its assets to the Smith Barney Portfolio soleley in exchange for
shares and the assumption by the Smith Barney Portfolio of liabilities of that
CitiSelect Portfolio or upon the distribution of such shares to that CitiSelect
Portfolio's shareholders in exchange for their shares of that CitiSelect
Portfolio; (ii) the basis of the assets of that CitiSelect Portfolio in the
hands of the Smith Barney Portfolio will be the same as the basis of such
assets in the hands of that CitiSelect Portfolio immediately prior to the
transfer; (iii) the holding period of the assets of that CitiSelect Portfolio
in the hands of the Smith Barney Portfolio will include the period during which
such assets were held by that CitiSelect Portfolio; (iv) no gain or loss will
be recognized by the Smith Barney Portfolio upon the receipt of the assets of
that CitiSelect Portfolio solely in exchange for Smith Barney Portfolio shares
and the assumption by the Smith Barney Portfolio of all of the liabilities of
that CitiSelect Portfolio; (v) no gain or loss will be recognized by the
shareholders of that CitiSelect Portfolio upon the receipt of Smith Barney
Portfolio shares solely in exchange for their shares of the CitiSelect
Portfolio as part of the transaction; (vi) the basis of the Smith Barney
Portfolio shares received by the shareholders of that CitiSelect Portfolio will
be, in the aggregate, the same as the basis, in the aggregate, of the shares of
that CitiSelect Portfolio exchanged therefor; and (vii) the holding period of
the Smith Barney Portfolio shares received by the shareholders of that
CitiSelect Portfolio will include the holding period during which the shares of
that CitiSelect Portfolio exchanged therefor were held, provided that at the
time of the exchange the shares of that CitiSelect Portfolio were held as
capital assets in the hands of the shareholders of that CitiSelect Portfolio.
Tax consequences if the Reorganization does not constitute a reorganization
under section 368(a)
If the Reorganization of a CitiSelect Portfolio does not constitute a
tax-free reorganization under section 368(a) of the Code, that CitiSelect
Portfolio will recognize gain or loss on the transfer of its assets to the
Smith Barney Portfolio as if it had disposed of these assets for an amount of
cash equal to the value of the Smith Barney Portfolio shares received in the
exchange, plus the amount of any liabilities of that CitiSelect Portfolio
assumed by the Smith Barney Portfolio. However, so long as a CitiSelect
Portfolio qualifies as a regulated investment company under section 851 of the
Code for its taxable year ending on the Closing Date and makes all
distributions in accordance with the timing requirements imposed by the Code,
it will not have any federal income tax liability.
In addition, pursuant to section 817 of the Code, to the extent that an
insurance company shareholder of a CitiSelect Portfolio holds its CitiSelect
Portfolio shares in a separate account to fund benefits under variable
contracts, its basis in the shares will generally be equal to the fair market
value of the shares. Consequently, the exchange of CitiSelect Portfolio shares
for the Smith Barney Portfolio shares should not cause such a shareholder to
realize any taxable gain or loss.
Finally, in either case, the owner of a variable contract will not recognize
gain or loss on the Reorganization of a CitiSelect Portfolio because such an
owner is not considered to own the shares of the CitiSelect Portfolio or the
Smith Barney Portfolio for federal income tax purposes.
Liquidation and Termination of the CitiSelect Portfolios
If the Reorganization is effected, the CitiSelect Portfolios will be
liquidated and terminated, and the Portfolios' outstanding shares will be
cancelled.
Portfolio Securities
If the Reorganization is effected, each CitiSelect Portfolio will transfer
its portfolio securities to the Smith Barney Portfolio and SSB Citi will
analyze and evaluate such portfolio securities. Consistent with the Smith
21
Barney Portfolio's investment objective and policies, any restrictions imposed
by the Code and the best interests of the Smith Barney Portfolio's shareholders
(including former shareholders of the CitiSelect Portfolios), SSB Citi will
determine whether to maintain an investment in these portfolio securities.
Portfolio Turnover
The portfolio turnover rates of CitiSelect VIP Folio 200 Conservative and
the CitiSelect VIP Folio 300 Balanced were 264% and 204%, respectively, for the
fiscal year ended December 31, 2000. The portfolio turnover rate for the Smith
Barney Portfolio for its fiscal year ended December 31, 2000 was 64%. For a
discussion of the risks relating to portfolio turnover, see "Principal
Investments and Risk Factors".
Pro Forma Capitalization
Because the CitiSelect Portfolios will be combined in the Reorganization
with the Smith Barney Portfolio, the total capitalization of the Smith Barney
Portfolio after the Reorganization is expected to be greater than the current
capitalization of the CitiSelect Portfolios. The following table sets forth as
of January 31, 2001: (a) the capitalization of each of the CitiSelect
Portfolios and the Smith Barney Portfolio, and (b) the pro forma capitalization
of the Smith Barney Portfolio as adjusted to give effect to the Reorganization.
If the Reorganization is consummated, the capitalization of the CitiSelect
Portfolios and the Smith Barney Portfolio is likely to be different at the
effective time of the Reorganization as a result of daily share purchase and
redemption activity. Because the net asset value of the CitiSelect Portfolios
is less than ten percent of the Smith Barney Portfolio's value, pro forma
financial statements are not required to be and have not been prepared for
inclusion in the Statement of Additional Information filed in connection with
the Reorganization.
Shares Net Asset Value
Total Net Assets Outstanding Per Share
---------------- -------------- ---------------
CitiSelect VIP Folio 200 Conservative $ 9,254,056.11 886,549.065 $10.44
CitiSelect VIP Folio 300 Balanced.... $ 13,200,126.40 1,218,747.843 $10.83
Appreciation Portfolio............... $628,185,470.34 26,750,907.536 $23.48
Pro Forma Appreciation Portfolio..... $650,639,652.85 27,707,218.546 $23.48
Performance
Performance shown below is as of December 31, 2000, is based on historical
earnings and is not predictive of future performance. Performance reflects
reinvestment of dividends and other earnings, but does not reflect the fees and
expenses incurred from investing through an insurance company separate account.
If these fees and expenses had been included, the returns would have been
lower. For more information about Portfolio expenses, please refer to "Overall
Expenses" above.
The following table shows the total returns of each Portfolio for the
calendar years indicated.
CitiSelect VIP CitiSelect VIP
Folio 200 Folio 300 Appreciation
Conservative Balanced Portfolio
-------------- -------------- --------------
Year Ended:
December 31, 2000. 2.89% 2.55% (0.41)%
December 31, 1999. 1.57% 4.76% 13.12%
December 31, 1998. 7.33% 7.10% 19.15%
Best Quarter......... 6.42% (12/98) 8.12% (12/98) 16.91% (12/98)
Worst Quarter........ (4.09)% (9/98) (6.80)% (9/98) (9.65)% (9/98)
22
The table below shows the average annual total returns for each Portfolio as
of December 31, 2000.
CitiSelect VIP CitiSelect VIP
Folio 200 Folio 300 Appreciation
Conservative Balanced Portfolio
-------------- -------------- ------------
One Year.......... 2.89% 2.55% (0.41)%
Five Years........ n/a n/a 15.23%
Ten Years......... n/a n/a n/a
Since Inception/1/ 5.00% 5.90% 13.02%
- --------
/1/ CitiSelect VIP Folio 200 Conservative commenced operations on February 10,
1997; CitiSelect VIP Folio 300 Balanced commenced operations on February 10,
1997; and the Appreciation Portfolio commenced operations on October 16,
1991.
When you consider the performance of the Portfolios, please note that
differences in performance may be attributable in part to the markets and types
of securities in which each Portfolio invests. For example, the CitiSelect
Portfolios are diversified asset allocation funds that invest in fixed income
as well as equity securities. The Smith Barney Portfolio invests primarily in
equity securities. Equity securities typically have greater potential for
growth of capital than fixed income securities, and have the potential to
outperform fixed income securities over the long term. There have been,
however, periods when fixed income securities have outperformed equity
securities. During those periods, it is likely that the CitiSelect Portfolios
would outperform the Smith Barney Portfolio. Please also note that, as
described above, equity securities may be susceptible to greater price
volatility than fixed income securities.
VOTING INFORMATION
General Information
The Board of Trustees of VAP, on behalf of the CitiSelect Portfolios, is
furnishing this combined Proxy Statement/Prospectus in connection with the
solicitation of proxies for a Special Meeting of Shareholders of the CitiSelect
Portfolios at which shareholders will be asked to consider and approve the
proposed Plan with respect to eachCitiSelect Portfolio of which such
shareholder own shares. All of the shareholders of the CitiSelect Portfolios
are insurance company separate accounts.
With respect to shares of a CitiSelect Portfolio owned by an insurance
company separate account, the insurance company will vote the shares of such
CitiSelect Portfolio at the Special Meeting in accordance with the voting
instructions received from the owners of the variable contracts that have
interests in that separate account. Each insurance company may, except as
prohibited by law, vote shares attributable to variable contracts for which no
voting instructions are received in proportion (for, against or abstain) to
those for which voting instructions are received by that insurance company.
It is expected that the solicitation of proxies and voting instructions will
be primarily by mail. Officers and service contractors of the CitiSelect
Portfolios and Smith Barney Portfolio and insurance companies may also solicit
proxies and voting instructions by telephone or otherwise. Alamo Direct has
been retained to assist in the solicitation of proxies, at a cost of
approximately $45,000. Shareholders and contract owners may vote (1) by mail,
by marking, signing, dating and returning the enclosed proxy ballot(s) or
voting instruction form(s) (as applicable) in the enclosed postage-paid
envelope, (2) by touch-tone voting over the telephone, or (3) by voting via the
internet.
23
Any shareholder of the CitiSelect Portfolios giving a proxy has the power to
revoke it by submitting a written notice of revocation to the CitiSelect
Portfolios or by attending the Special Meeting and voting in person. Variable
contract owners may revoke previously submitted voting instructions given to an
insurance company at any time prior to the Special Meeting by submitting to the
insurance company a written notice of revocation. All properly executed proxies
and voting instruction forms received in time for the Special Meeting will be
voted as specified in the proxy or voting instruction form or, if no
specification is made, in favor of the proposals referred to in this Proxy
Statement.
Quorum; Vote Required to Approve Proposal
The holders of a majority of the outstanding shares entitled to vote of a
CitiSelect Portfolio present in person or by proxy shall constitute a quorum at
any meeting of shareholders for the transaction of business by that Portfolio.
A shareholder vote may be taken with respect to one or both CitiSelect
Portfolios on some or all matters if a quorum is present and sufficient votes
have been received for approval with respect to such CitiSelect Portfolio.
If the necessary quorum to transact business or the vote required to approve
the Plan with respect to either CitiSelect Portfolio is not obtained at the
Special Meeting, the persons named as proxies may propose one or more
adjournments of the Special Meeting in accordance with applicable law to permit
further solicitation of proxies with respect to the CitiSelect Portfolio that
did not receive the vote necessary for approval of the Plan or did not obtain a
quorum. Any such adjournment as to a matter will require the affirmative vote
of the holders of a majority of the CitiSelect Portfolio's shares present in
person or by proxy at the Special Meeting. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor of that proposal and will vote against any such adjournment those
proxies to be voted against that proposal.
For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions will be treated as shares that are
present but which have not been voted.
With respect to each CitiSelect Portfolio, the Plan must be approved by the
vote of (a) 67% or more of the voting securities of the Portfolio present at
the Special Meeting, if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented by proxy; or (b) more
than 50% of the outstanding voting securities of the Portfolio, whichever is
less. Abstentions will have the effect of a "no" vote on the proposal to
approve the Plan. The Plan provides that in the event the Plan is approved with
respect to one but not both of the CitiSelect Portfolios, the failure of one
CitiSelect Portfolio to consummate the transactions contemplated by the Plan
shall not affect the consummation or validity of the Plan with respect to the
other CitiSelect Portfolio.
Outstanding Shareholders
Holders of record of the shares of the CitiSelect Portfolios at the close
of business on February 20, 2001 (the "Record Date"), as to any matter on which
they are entitled to vote, will be entitled to one vote per share on all
business of the Special Meeting. As of February 12, 2001, there were
882,837.852 outstanding shares of CitiSelect VIP Folio 200 Conservative and
1,189,670.740 outstanding shares of CitiSelect VIP Folio 300 Balanced.
All shares of the CitiSelect Portfolios and the Smith Barney Portfolio are
owned of record by insurance company separate accounts for the benefit of
variable contract owners. No variable contract owner had, as of
24
January 29, 2001 or January 26, 2001, as applicable, voting authority over as
much as 5% of any Portfolio's shares. The insurance company separate accounts
that own shares of the Portfolios do not have an economic interest in the
Portfolios.
Listed below are the name, address and share ownership of each person known
to the CitiSelect Portfolios to own 5% or more of the shares of the CitiSelect
VIP Folio 200 Conservative or CitiSelect VIP Folio 300 Balanced as of January
29, 2001. The table also indicates the percentage of the Smith Barney
Portfolio's shares that would be owned by such persons upon consummation of the
Reorganization on the basis of present holdings and commitments. The type of
ownership of each person listed below is record ownership.
Pro Forma Percentage
Percentage Ownership Post-
Name and Address Ownership Reorganization
- ---------------- --------- -------------------
CitiSelect VIP Folio 200 Conservative:
Travelers Life & Annuity Co........... 27.6% 0.4%
FBO CitiCorp Life Insurance Co.
Attn: Shareholder Accounting
One Tower Square, 6MS
Hartford, CT 06183-0001
Travelers Life & Annuity Co........... 72.4% 1.0%
FBO First CitiCorp Life Insurance Co.
Attn: Shareholder Accounting
One Tower Square, 6MS
Hartford, CT 06183-0001
CitiSelect VIP Folio 300 Balanced:
Travelers Life & Annuity & Co......... 27.1% 0.6%
FBO CitiCorp Life Insurance Co.
Attn: Shareholder Accounting
One Tower Square, 6MS
Hartford, CT 06183-0001
Travelers Life & Annuity Co........... 72.9% 1.5%
FBO First CitiCorp Life Insurance Co.
Attn: Shareholder Accounting
One Tower Square, 6MS
Hartford, CT 06183-0001
25
Listed below are the name, address and share ownership of each person known
to the Smith Barney Portfolio to own 5% or more of the Smith Barney Portfolio
as of January 26, 2001. The table also indicates the percentage of the Smith
Barney Portfolio's shares that would be owned by such persons upon consummation
of the Reorganization on the basis of present holdings and commitments. The
type of ownership of each person listed below is record ownership.
Pro Forma
Percentage
Ownership
Percentage Post-
Name and Address Ownership Reorganization
---------------- --------- -------------
Appreciation Portfolio:
Travelers Life & Annuity Company. 65.6% 63.2%
Attn: Shareholder Accounting, 6MS
One Tower Square
Hartford, CT 06183
Equitable Life of Iowa...........
Prime Elite...................... 14.1% 13.6%
Attn: Gina Keck H51
644 Locust Street
Des Moines, IA 50306
Travelers Insurance Company...... 13.6% 13.1%
Attn: Shareholder Accounting, 6MS
One Tower Square
Hartford, CT 06183
IDS Life Variable Account........ 6.6% 6.4%
For Salomon Smith Barney
Attn: Unit 229
IDS Tower 10
Minneapolis, MN 55402
Because all shares of the CitiSelect Portfolios are owned of record by
insurance companies separate accounts as of January 29, 2001, the officers and
Trustees of VAP as a group owned none of either CitiSelect Portfolio's
outstanding shares. Likewise, because all shares of the Smith Barney Portfolio
are owned of record by insurance companies separate accounts, as of January 26,
2001, the officers and Trustees of the Smith Barney Trust as a group owned none
of the Smith Barney Portfolio's outstanding shares.
26
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
As noted above, additional information about the CitiSelect Portfolios, the
Smith Barney Portfolio and the Reorganization has been filed with the
Securities and Exchange Commission and may be obtained without charge by
writing or calling the CitiSelect Portfolios, 7 World Trade Center, New York,
New York 10048, telephone number (800) 451-2010, or the Smith Barney Portfolio,
7 World Trade Center, New York, New York 10048, telephone number (800)
451-2010. Information included in this Proxy Statement/Prospectus concerning
the CitiSelect Portfolios was provided by Variable Annuity Portfolios, on
behalf of the CitiSelect Portfolios, and information concerning the Smith
Barney Portfolio was provided by Greenwich Street Series Fund, on behalf of the
Smith Barney Portfolio.
Each Portfolio files reports, proxy materials and other information about
the applicable Portfolio with the Securities and Exchange Commission. Such
reports, proxy material and other information can be inspected and copied at
the Public Reference Room maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington D.C. 20549 at prescribed rates or without charge from the Commission
at publicinfo@sec.gov.
OTHER MATTERS
No Trustee is aware of any matters that will be presented for action at the
Special Meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy or voting instruction
form in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy or voting instruction form the
discretionary authority to vote the shares as to any such other matters in
accordance with their best judgment in the interest of the CitiSelect
Portfolios.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) OR VOTING
INSTRUCTION FORM(S) PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. YOU MAY ALSO CAST YOUR VOTE VIA THE INTERNET OR BY TELEPHONE.
27
Exhibit A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this [ ] day of [ ], 2001 between Variable Annuity Portfolios, a
Massachusetts business trust with its principal place of business at 7 World
Trade Center, New York, New York 10048 ("the Acquired Trust"), on behalf of its
series CitiSelect VIP Folio 200 Conservative and CitiSelect VIP Folio 300
Balanced (each an "Acquired Portfolio," and together, the "Acquired
Portfolios"), and Greenwich Street Series Fund, a Massachusetts business trust
with its principal place of business at 7 World Trade Center, New York, New
York 10048 (the "Acquiring Trust"), on behalf of its series Appreciation
Portfolio (the "Acquiring Portfolio," and together with the Acquired
Portfolios, the "Portfolios"), and, solely for purposes of Sections 6.6 and
10.2 below, Citibank, N.A., a national banking association, and SSB Citi Fund
Management LLC, a Delaware limited liability company.
Pursuant to this Agreement the Acquired Trust, on behalf of the Acquired
Portfolios, will transfer all of the assets (except as set forth in Section 1.2
hereof) of the Acquired Portfolios to the Acquiring Trust, on behalf of the
Acquiring Portfolio, in exchange solely for shares ($0.001 par value per share)
of the Acquiring Portfolio (the "Acquiring Portfolio Shares") and the
assumption by the Acquiring Trust, on behalf of the Acquiring Portfolio, of all
of the liabilities of the Acquired Portfolio. The Acquired Portfolios will then
distribute the Acquiring Portfolio Shares to the shareholders of each of the
Acquired Portfolios as provided in Section 1.5 of this Agreement (collectively,
the "Reorganizations").
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Transfer of Assets of each Acquired Portfolio to the Acquiring Portfolio in
Exchange for Acquiring Portfolio Shares, the Assumption of all
Liabilities of the Acquired Portfolios and the Liquidation of the
Acquired Portfolios
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Trust, on
behalf of the Acquired Portfolios, agrees to transfer to the Acquiring
Portfolio substantially all of the Acquired Portfolios' assets as set forth in
section 1.2, and the Acquiring Trust, on behalf of the Acquiring Portfolio,
agrees in exchange therefor (i) to deliver to the Acquired Portfolios that
number of full and fractional Acquiring Portfolio Shares determined by dividing
the value of the Acquired Portfolios' net assets, computed in the manner and as
of the time and date set forth in section 2.1, by the net asset value of one
Acquiring Portfolio Share, computed in the manner and as of the time and date
set forth in section 2.2; and (ii) to assume all of the liabilities of the
Acquired Portfolios, as set forth in section 1.3. Such transactions shall take
place at the closing provided for in section 3.1 (the "Closing").
1.2. The assets of the Acquired Portfolios to be acquired by the Acquiring
Portfolio (collectively, "Assets") shall consist of all property and assets of
every kind and nature of the Acquired Portfolios, including, without
limitation, all cash, cash equivalents, securities, commodities, futures,
claims (whether absolute or contingent, known or unknown), receivables
(including dividend, interest and other receivables), good will and other
intangible property, any deferred or prepaid expenses shown on the unaudited
statement of assets and liabilities, and all interests, rights, privileges and
powers, other than cash in an amount necessary to pay dividends and
distributions as provided in section 1.4 hereof and the Acquired Portfolios'
rights under this Agreement.
1.3. The Acquiring Portfolio shall assume all liabilities of each Acquired
Portfolio, whether accrued or contingent, existing at the Valuation Time as
defined in section 2.1. Each Acquired Portfolio will endeavor to discharge all
of its known liabilities and obligations prior to the Closing Date as defined
in section 3.1, other than those liabilities and obligations which would
otherwise be discharged at a later date in the ordinary course of business.
1.4. On or as soon as practicable prior to the Closing Date, each of the
Acquired Portfolios will declare and pay to its shareholders of record one or
more dividends and/or other distributions so that it will have distributed
substantially all of its investment company taxable income (computed without
regard to any deduction for dividends paid) and realized net capital gain, if
any, for the current taxable year through the Closing Date.
1.5. Immediately after the transfer of its assets provided for in section
1.1, the Acquired Portfolios will distribute to their shareholders of record
(the "Acquired Portfolio Shareholders"), determined as of the Valuation Time as
defined in section 2.1, on a pro rata basis, the Acquiring Portfolio Shares
received by the Acquired Portfolios pursuant to section 1.1 and will completely
liquidate. Such distribution and liquidation will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Acquired Portfolios on the books of the Acquiring Portfolio to open accounts on
the share records of the Acquiring Portfolio in the names of the Acquired
Portfolio Shareholders. The aggregate net asset value of the Acquiring
Portfolio Shares to be so credited to Acquired Portfolio Shareholders shall be
equal to the aggregate net asset value of the shares of the Acquired Portfolios
(the "Acquired Portfolio Shares") owned by such shareholders as of the
Valuation Time. All issued and outstanding shares of the Acquired Portfolios
will simultaneously be cancelled on the books of the Acquired Portfolios. The
Acquiring Portfolio will not issue certificates representing Acquiring
Portfolio Shares in connection with such exchange.
1.6. Ownership of Acquiring Portfolio Shares will be shown on the Acquiring
Portfolio's books. Shares of the Acquiring Portfolio will be issued in the
manner described in the Acquiring Portfolio's then-current prospectus and
statement of additional information.
1.7. Any reporting responsibility of the Acquired Portfolios, including,
without limitation, the responsibility for filing of regulatory reports, tax
returns or other documents with the Securities and Exchange Commission (the
"Commission"), any state securities commission, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Portfolios.
1.8. All books and records of the Acquired Portfolios, including all books
and records required to be maintained under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the rules and regulations thereunder, shall be
available to the Acquiring Portfolio from and after the Closing Date and shall
be turned over to the Acquiring Portfolio as soon as practicable following the
Closing Date.
2. Valuation
2.1. The value of the net assets of the Acquired Portfolios shall be
computed as of the close of regular trading on the New York Stock Exchange,
Inc. ("NYSE") on the Closing Date (such time and date also being hereinafter
called the "Valuation Time"), after the declaration and payment of any
dividends and/or other distributions on that date, using the valuation
procedures described in the Acquiring Portfolio's then-current prospectus and
statement of additional information.
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2.2. The net asset value of a Acquiring Portfolio Share shall be the net
asset value of a share of the Acquiring Portfolio computed as of the Valuation
Time using the valuation procedures set forth in the Acquiring Portfolio's
then-current prospectus and statement of additional information.
2.3. The number of Acquiring Portfolio Shares to be issued (including
fractional shares, if any) in exchange for the Assets of each Acquired
Portfolio, less the value of the liabilities of that Acquired Portfolio
assumed, shall be determined by dividing the value of the Assets of the
Acquired Portfolio less the value of the liabilities of the Acquired Portfolio
as determined in accordance with section 2.1, by the net asset value of a
Acquiring Portfolio Share determined in accordance with section 2.2.
2.4. All computations of value hereunder shall be made by or under the
direction of each Portfolio's investment adviser in accordance with its regular
practice and the requirements of the 1940 Act, and shall be subject to
confirmation by each Portfolio's Board of Trustees, and independent
accountants.
3. Closing and Closing Date
3.1. The Closing of each Reorganization contemplated by this Agreement shall
be April 19, 2001, or such earlier or later date as the parties may agree in
writing (the "Closing Date"). All acts taking place at the Closing shall be
deemed to take place simultaneously as of 4:00 p.m., Eastern time, on the
Closing Date, unless otherwise agreed to by the parties. The Closing shall be
held at the offices of Bingham Dana LLP, 399 Park Avenue, New York, New York,
or at such other place and time as the parties may agree.
3.2. The Acquired Trust shall furnish to the Acquiring Trust a statement of
each Acquired Portfolio's net assets, together with a list of portfolio
holdings with values as determined in section 2.1, all as of the Valuation
Time, certified by the Acquired Trust's President (or any Vice President) and
Treasurer (or any Assistant Treasurer).
3.3. The Acquired Trust shall deliver at the Closing a certificate of an
authorized officer of the Acquired Trust certifying that the Acquired Trust has
instructed State Street Bank and Trust Company ("State Street"), as custodian
for the Acquired Portfolios, to deliver the Assets of the Acquired Portfolios
to PFPC Trust Company ("PFPC"), custodian for the Acquiring Portfolio, prior to
or on the Closing Date. The portfolio securities of the Acquired Portfolios
represented by a certificate or other written instrument shall be presented by
State Street to PFPC for examination no later than five business days preceding
the Closing Date and transferred and delivered by the Acquired Portfolios as of
the Closing Date for the account of the Acquiring Portfolio duly endorsed in
proper form for transfer in such condition as to constitute good delivery
thereof. The Acquired Portfolios' Securities and instruments deposited with a
securities depository, as defined in Rule 17f-4 under the 1940 Act, shall be
delivered as of the Closing Date by book entry in accordance with the customary
practices of such depositories and State Street. The cash to be transferred by
the Acquired Portfolios shall be delivered by wire transfer of federal funds on
the Closing Date.
3.4. The Acquired Trust shall instruct Citi Fiduciary Trust Company, as
transfer agent of the Acquired Portfolios, to deliver at the Closing its
records containing the names and addresses of the Acquired Portfolio
Shareholders and the number and percentage ownership (to three decimal places)
of outstanding Acquired Portfolio Shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Portfolio shall issue and
deliver a confirmation evidencing the Acquiring Portfolio Shares to be credited
on the Closing Date to the Acquired Portfolios or provide evidence satisfactory
to the Acquired Portfolios that such Acquiring Portfolio Shares have been
credited to the Acquired Portfolios' accounts on the books of the Acquiring
Portfolio.
A-3
3.5. In the event that immediately prior to the Valuation Time (a) the NYSE
or another primary trading market for portfolio securities of the Acquiring
Portfolio or the Acquired Portfolios shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
the NYSE or elsewhere shall be disrupted so that, in the judgment of the Board
of Trustees of the Acquired Trust or the Board of Trustees of the Acquiring
Trust, accurate appraisal of the value of the net assets with respect to the
Acquiring Portfolio Shares or the Acquired Portfolio Shares is impracticable,
the Closing Date shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have been
restored.
3.6. At the Closing, each party shall deliver to the other such bills of
sale, checks, assumption agreements, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request to effect the transactions contemplated by this Agreement.
4. Representations and Warranties
4.1. The Acquired Trust, on behalf of itself and each Acquired Portfolio,
represents and warrants to the Acquiring Trust and the Acquiring Portfolio as
follows:
(a) The Acquired Trust is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts with power
under its Declaration of Trust to own all of its properties and assets and
to carry on its business as it is now being conducted. Each Acquired
Portfolio has been duly established as a series of the Acquired Trust.
(b) The Acquired Trust is registered with the Commission as an open-end
management investment company under the 1940 Act, and such registration is
in full force and effect.
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Trust, on behalf of the Acquired Portfolios, of the transactions
contemplated herein, except such as may be required under the Securities Act
of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934
(the "1934 Act"), the 1940 Act, and state securities laws.
(d) The Acquired Portfolios are not, and the execution, delivery and
performance of this Agreement by the Acquired Trust on behalf of the
Acquired Portfolios will not result, in violation of Massachusetts law or of
the Acquired Trust's Declaration of Trust or By-Laws, or of any material
agreement, indenture, instrument, contract, lease or other undertaking known
to counsel to which either Acquired Portfolio is a party or by which it is
bound, and the execution, delivery and performance of this Agreement by the
Acquired Trust on behalf of the Acquired Portfolios will not result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to
which either Acquired Portfolio is a party or by which it is bound.
(e) To the Acquired Trust's knowledge, there is no material litigation or
administrative proceeding or investigation of or before any court or
governmental body presently pending or threatened against either Acquired
Portfolio or any properties or assets held by it. The Acquired Trust knows
of no facts which might form the basis for the institution of such
proceedings or which would materially and adversely affect its business or
the business of the Acquired Portfolios, and is not a party to or subject to
the provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its or the Acquired Portfolios'
business or its or the Acquired Portfolios' ability to consummate the
transactions herein contemplated.
A-4
(f) The financial statements of the Acquired Portfolios at and for the
year ended December 31, 2000 have been audited by PricewaterhouseCoopers
LLP, independent certified public accountants, and are in accordance with
generally accepted accounting principles ("GAAP") consistently applied. All
of such statements (copies of which have been furnished to the Acquiring
Portfolio) present fairly, in all material respects, the financial position,
results of operations, changes in net assets and financial highlights of the
Acquired Portfolios as of the dates thereof in accordance with GAAP, and
there are no known contingent liabilities of either Acquired Portfolio
required to be reflected on a statement of assets and liabilities (including
the notes thereto) in accordance with GAAP as of such dates not disclosed
therein.
(g) Since December 31, 2000, there has not been any material adverse
change in either Acquired Portfolio's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business, or any incurrence by either Acquired Portfolio of indebtedness
maturing more than one year from the date such indebtedness was incurred
except as otherwise disclosed to and accepted in writing by the Acquiring
Portfolio. For purposes of this subsection (g), a decline in net asset value
per share of a Acquired Portfolio due to declines in market values of
securities in the Acquired Portfolio's portfolio, the discharge of Acquired
Portfolio liabilities, or the redemption of Acquired Portfolio Shares by
Acquired Portfolio Shareholders shall not constitute a material adverse
change.
(h) At the date hereof and at the Closing Date, all federal and other tax
returns and reports of the Acquired Portfolios required by law to have been
filed by such dates (including any extensions) have or shall have been filed
and are or will be correct in all material respects, and all federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof, and, to the best of the Acquired Trust's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to such returns.
(i) For each taxable year of its operation (including the tax year ending
on the Closing Date), each Acquired Portfolio has met the requirements of
Subchapter M of the Code for qualification as a regulated investment company
and has elected to be treated as such, and has been eligible to and has
computed its federal income tax under Section 852 of the Code. At Closing,
each Acquired Portfolio will have distributed all of its investment company
taxable income and net capital gain (as defined in the Code) that has
accrued up to the Closing Date.
(j) All issued and outstanding shares of the Acquired Portfolios (i) have
been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities laws, (ii) are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable, and (iii) will be held at the time of the Closing by the
persons and in the amounts set forth in the records of the Acquired
Portfolios' transfer agent, as provided in section 3.4. There are no
outstanding options, warrants or other rights to subscribe for or purchase
any Acquired Portfolio Shares, nor is there outstanding any security
convertible into any Acquired Portfolio Share.
(k) At the Closing Date, the Acquired Trust, on behalf of each Acquired
Portfolio, will have good and marketable title to such Acquired Portfolio's
Assets and full right, power and authority to sell, assign, transfer and
deliver such Assets hereunder free of any liens or other encumbrances,
except those liens or encumbrances as to which the Acquiring Trust, on
behalf of the Acquiring Portfolio, has received notice at or prior to the
Closing, and upon delivery and payment for such Assets, the Acquiring
Portfolio will acquire good and marketable title thereto, subject to no
restrictions on the full transfer thereof, except those restrictions as to
which the Acquiring Portfolio has received notice and necessary
documentation at or prior to the Closing.
A-5
(l) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Trustees of the
Acquired Trust, and, subject to the approval of the shareholders of the
Acquired Portfolios, this Agreement constitutes a valid and binding
obligation of the Acquired Trust, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general principles of equity.
(m) The information to be furnished by the Acquired Trust for use in
applications for orders, registration statements or proxy materials or for
use in any other document filed or to be filed with any federal, state or
local regulatory authority (including the National Association of Securities
Dealers, Inc.), which may be necessary or appropriate in connection with the
transactions contemplated hereby, shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto.
(n) The current combined prospectus and statement of additional
information of the Acquired Portfolios conform in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder, and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially misleading.
(o) The combined proxy statement of the Acquired Portfolios to be
included in the Registration Statement referred to in section 5.7 (the
"Proxy Statement"), insofar as it relates to the Acquired Portfolios, will,
on the effective date of the Registration Statement and on the Closing Date,
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements are made, not materially misleading; provided, however, that the
representations and warranties in this section shall not apply to statements
in or omissions from the Proxy Statement and the Registration Statement made
in reliance upon and in conformity with information that was furnished or
should have been furnished by the Acquiring Trust for use therein.
4.2. The Acquiring Trust, on behalf of itself and the Acquiring Portfolio,
represents and warrants to the Acquired Trust and the Acquired Portfolios as
follows:
(a) The Acquiring Trust is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts with power
under its Master Trust Agreement to own all of its properties and assets and
to carry on its business as it is now being conducted. The Acquiring
Portfolio has been duly established as a series of the Acquiring Trust.
(b) The Acquiring Trust is registered with the Commission as an open-end
management investment company under the 1940 Act, and such registration is
in full force and effect.
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Trust, on behalf of the Acquiring Portfolio, of the transactions
contemplated herein, except such as may be required under the 1933 Act, the
1934 Act, the 1940 Act, and state securities laws.
(d) The Acquiring Portfolio is not, and the execution, delivery and
performance of this Agreement by the Acquiring Trust on behalf of the
Acquiring Portfolio will not result, in violation of Massachusetts law or
A-6
of the Acquiring Trust's Master Trust Agreement or By-Laws, or of any
material agreement, indenture, instrument, contract, lease or other
undertaking known to counsel to which the Acquiring Portfolio is a party or
by which it is bound, and the execution, delivery and performance of this
Agreement by the Acquiring Trust on behalf of the Acquiring Portfolio will
not result in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Acquiring Portfolio is a party or by which
it is bound.
(e) To the Acquiring Trust's knowledge, there is no material litigation
or administrative proceeding or investigation of or before any court or
governmental body presently pending or threatened against the Acquiring
Portfolio or any properties or assets held by it. The Acquiring Trust knows
of no facts which might form the basis for the institution of such
proceedings or which would materially and adversely affect its business or
the business of the Acquiring Portfolio, and is not a party to or subject to
the provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its or the Acquiring Portfolio's
business or its or the Acquiring Portfolio's ability to consummate the
transactions herein contemplated.
(f) The financial statements of the Acquiring Portfolio at and for the
year ended December 31, 2000 have been audited by KPMG LLP, independent
certified public accountants, and are in accordance with GAAP consistently
applied. All such statements (copies of which have been furnished to the
Acquired Portfolios) present fairly, in all material respects, the financial
position, results of operations, changes in net assets and financial
highlights of the Acquiring Portfolio as of such date in accordance with
GAAP, and there are no known contingent liabilities of the Acquiring
Portfolio required to be reflected on a statement of assets and liabilities
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein.
(g) Since December 31, 2000, there has not been any material adverse
change in the Acquiring Portfolio's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Portfolio of indebtedness maturing more
than one year from the date such indebtedness was incurred except as
otherwise disclosed to and accepted in writing by the Acquired Portfolios.
For purposes of this subsection (g), a decline in net asset value per share
of the Acquiring Portfolio due to declines in market values of securities in
the portfolio of the Acquiring Portfolio, the discharge of Acquiring
Portfolio liabilities, or the redemption of Acquiring Portfolio Shares by
Acquiring Portfolio shareholders shall not constitute a material adverse
change.
(h) At the date hereof and at the Closing Date, all federal and other tax
returns and reports of the Acquiring Portfolio required by law to have been
filed by such dates (including any extensions) have or shall have been filed
and are or will be correct in all material respects, and all federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof, and, to the best of the Acquiring Trust's knowledge, no
such return is currently under audit and no assessment has been asserted
with respect to such returns.
(i) For each taxable year of its operation, the Acquiring Portfolio has
met the requirements of Subchapter M of the Code for qualification as a
regulated investment company and has elected to be treated as such, has been
eligible to and has computed its federal income tax under Section 852 of the
Code, and intends to do so for the taxable year including the Closing Date.
(j) All issued and outstanding shares of the Acquiring Portfolio (i) have
been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration
A-7
requirements of the 1933 Act and state securities laws, and (ii) are, and on
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. There are no outstanding options, warrants or other
rights to subscribe for or purchase any Acquiring Portfolio Shares, nor is
there outstanding any security convertible into any Acquiring Portfolio
Share. The Acquiring Portfolio Shares to be issued and delivered to the
Acquired Portfolios for the account of the Acquired Portfolio Shareholders
pursuant to the terms of this Agreement, at the Closing Date, will have been
duly authorized and, when so issued and delivered, will be duly and validly
issued and outstanding Acquiring Portfolio Shares, and will be fully paid
and non-assessable.
(k) At the Closing Date, the Acquiring Trust, on behalf of the Acquiring
Portfolio, will have good and marketable title to the Acquiring Portfolio's
assets, free of any liens or other encumbrances, except those liens or
encumbrances as to which the Acquired Trust, on behalf of the Acquired
Portfolios, has received notice at or prior to the Closing.
(l) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Trustees of the
Acquiring Trust, and this Agreement constitutes a valid and binding
obligation of the Acquiring Trust, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general principles of equity.
(m) The information to be furnished by the Acquiring Trust for use in
applications for orders, registration statements or proxy materials or for
use in any other document filed or to be filed with any federal, state or
local regulatory authority (including the National Association of Securities
Dealers, Inc.), which may be necessary or appropriate in connection with the
transactions contemplated hereby, shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto.
(n) The current prospectus and statement of additional information of the
Acquiring Portfolio conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading.
(o) The Proxy Statement, insofar as it relates to the Acquiring
Portfolio, and the Registration Statement will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially
misleading; provided, however, that the representations and warranties in
this section shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in
conformity with information that was furnished or should have been furnished
by the Acquired Trust for use therein.
5. Covenants
5.1. Each Portfolio covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that (a) such
ordinary course of business will include (i) the declaration and payment of
customary dividends and other distributions and (ii) such changes as are
contemplated by the
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Portfolio's normal operations; and (b) each Portfolio shall retain exclusive
control of the composition of its portfolio until the Closing Date.
5.2. Upon reasonable notice, the Acquiring Trust's officers and agents shall
have reasonable access to the Acquired Portfolios' books and records necessary
to maintain current knowledge of the Acquired Portfolios and to ensure that the
representations and warranties made by the Acquired Portfolios are accurate.
5.3. The Acquired Trust and the Acquired Portfolios covenant to call a
meeting of the shareholders of the Acquired Portfolios to consider and act upon
this Agreement and to take all other reasonable action necessary to obtain
approval of the transactions contemplated herein. Such meeting shall be
scheduled for no later than April 18, 2001 (or such other date as the parties
may agree to in writing).
5.4. The Acquired Trust and the Acquired Portfolios covenant that the
Acquiring Portfolio Shares to be issued hereunder are not being acquired for
the purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
5.5. The Acquired Trust on behalf of the Acquired Portfolios covenants that
it will assist the Acquiring Trust in obtaining such information as the
Acquiring Trust reasonably requests concerning the beneficial ownership of each
Acquired Portfolios' Shares and will provide, to the extent that such
information is reasonably available, the Acquiring Trust with a list of the
affiliates of the Acquired Portfolios.
5.6. Subject to the provisions of this Agreement, the parties hereto will
each take, or cause to be taken, all actions, and do or cause to be done, all
things reasonably necessary, proper, and/or advisable to consummate and make
effective the transactions contemplated by this Agreement.
5.7. The Acquiring Trust will file a Registration Statement on Form N-14
(the "Registration Statement") under the 1933 Act, and the Acquired Trust will
file the Proxy Statement contained therein, in connection with the meeting of
shareholders of the Acquired Portfolios to consider approval of this Agreement
and the transactions contemplated herein, with the Commission as promptly as
practicable. The Acquired Trust and the Acquired Portfolios will provide the
Acquiring Trust with information relating to it that is required by the 1933
Act, the 1934 Act and the 1940 Act to be included in the Registration
Statement, including the Proxy Statement.
5.8. The Acquired Trust and each Acquired Portfolio covenants that it will,
from time to time, as and when reasonably requested by the Acquiring Trust,
execute and deliver or cause to be executed and delivered all such assignments
and other instruments, and will take or cause to be taken such further action,
as the Acquiring Trust may reasonably deem necessary or desirable in order to
vest in and confirm the Acquiring Trust's title to and possession of the Assets
and otherwise to carry out the intent and purpose of this Agreement.
5.9. Each of the Acquiring Trust and the Acquiring Portfolio covenants that
it will, from time to time, as and when reasonably requested by the Acquired
Trust, execute and deliver or cause to be executed and delivered all such
assignments, assumption agreements, releases and other instruments, and will
take or cause to be taken such further action, as the Acquired Trust may
reasonably deem necessary or desirable in order to (i) vest and confirm the
Acquired Trust's title to and possession of all Acquiring Portfolio Shares to
be transferred to the Acquired Portfolios pursuant to this Agreement and (ii)
assume the assumed liabilities of the Acquired Portfolios.
5.10. The Acquired Trust, the Acquiring Trust and each Portfolio covenant to
use all reasonable efforts to obtain the approvals and authorizations required
by the 1933 Act, the 1940 Act and such of the state securities laws as it deems
appropriate in order to consummate the transactions contemplated herein and, in
the case of the Acquiring Portfolio, to continue its operations after the
Closing Date.
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5.11. As soon as reasonably practicable after the Closing, each Acquired
Portfolio shall make a liquidating distribution to its shareholders consisting
of the Acquiring Portfolio Shares received at the Closing.
5.12. Each of the Acquiring Portfolio and the Acquired Portfolios shall use
its reasonable best efforts to fulfill or obtain the fulfillment of the
conditions precedent to effect the transactions contemplated by this Agreement
as promptly as practicable.
6. Conditions Precedent To Obligations Of The Acquired Trust
The obligations of the Acquired Trust and the Acquired Portfolios to
consummate the transactions provided for herein shall be subject, at the
Acquired Trust's election, to the performance by the Acquiring Trust and the
Acquiring Portfolio of all the obligations to be performed by them hereunder on
or before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of the Acquiring Trust, on behalf of
itself and the Acquiring Portfolio, contained in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the
Closing Date, with the same force and effect as if made on and as of the
Closing Date; and there shall be (i) no pending or threatened litigation
brought by any person against the Acquiring Trust or the Acquiring Portfolio,
the Acquired Trust or the Acquired Portfolios, or the advisers, trustees or
officers of any of the foregoing, arising out of this Agreement and (ii) no
facts known to the Acquired Trust or the Acquired Portfolios, or the Acquiring
Trust or the Acquiring Portfolio, which any of such persons reasonably believes
might result in such litigation.
6.2. The Acquiring Trust shall have delivered to the Acquired Trust on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquired Trust and dated as
of the Closing Date, to the effect that the representations and warranties of
the Acquiring Trust and the Acquiring Portfolio made in this Agreement are true
and correct on and as of the Closing Date and as to such other matters as the
Acquired Trust shall reasonably request.
6.3. The Acquired Trust shall have received on the Closing Date an opinion
of Willkie Farr & Gallagher, in a form reasonably satisfactory to the Acquired
Trust, and dated as of the Closing Date, to the effect that:
(a) the Acquiring Trust has been established as a voluntary association
with transferable shares of beneficial interest commonly referred to as a
Massachusetts business trust, and is existing under the laws of the
Commonwealth of Massachusetts, and the Acquiring Portfolio has been duly
designated as a series of the Acquiring Trust;
(b) the Acquiring Trust, with respect to the Acquiring Portfolio, has the
power as a Massachusetts business trust to carry on its business as
presently conducted in accordance with the description thereof in the
Acquiring Trust's registration statement under the 1940 Act;
(c) the Agreement has been duly authorized, executed and delivered by the
Acquiring Trust, on behalf of the Acquiring Portfolio, and assuming due
authorization and delivery of the Agreement by the Acquired Trust on behalf
of the Acquired Portfolios, constitutes a valid and legally binding
obligation of the Acquiring Trust, on behalf of the Acquiring Portfolios
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, marshaling, or other laws
and rules of law affecting the enforcement generally of creditors' rights
and remedies and subject to general principles of equity (regardless of
whether considered at a preceding in law or equity);
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(d) the execution and delivery of the Agreement did not, and the exchange
of the Acquired Portfolios' assets for Acquiring Portfolio Shares pursuant
to the Agreement will not, violate the Acquiring Trust's Master Trust
Agreement or By-laws; and
(e) to the knowledge of such counsel, all regulatory consents,
authorizations, approvals or filings required to be obtained or made by the
Acquiring Trust under the Federal laws of the United States or the laws of
the Commonwealth of Massachusetts for the exchange of the Acquired
Portfolios' assets for Acquiring Portfolio Shares pursuant to the Agreement
have been obtained or made.
Such opinion may state that it is solely for the benefit of the Acquired Trust,
its Trustees and its officers, and counsel may rely as to matters governed by
the laws of the Commonwealth of Massachusetts on an opinion of Massachusetts
counsel. Such opinion may contain such assumptions and limitations as shall be
(i) in the opinion of Willkie, Farr & Gallagher appropriate to render the
opinions expressed therein, and (ii) reasonably acceptable to the Acquired
Trust. Such opinion also shall include such other matters incident to the
transaction contemplated hereby as the Acquired Trust may reasonably request.
6.4. The Acquiring Trust and the Acquiring Portfolio shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
6.5. The Acquiring Trust, on behalf of the Acquiring Portfolio, shall have
executed and delivered an assumption agreement in form reasonably satisfactory
to the Acquired Trust pursuant to which the Acquiring Trust, on behalf of the
Acquiring Portfolio, will assume all of the liabilities of the Acquired
Portfolios existing at the Valuation Time.
6.6. SSB Citi Fund Management LLC and/or Citibank, N.A. shall obtain, if
reasonably requested by the Acquired Trust's Board of Trustees, an endorsement
to the Acquired Trust's existing errors and omissions and directors and
officers liability insurance policy, or other evidence of insurance,
satisfactory in all respects to the Acquired Trust's Board of Trustees, at no
cost to the Acquired Trust or the Acquired Portfolios and such endorsement or
other insurance shall be in full force and effect.
7. Conditions Precedent to Obligations of the Acquiring Trust
The obligations of the Acquiring Trust and the Acquiring Portfolio to
consummate the transactions provided for herein shall be subject, at the
Acquiring Trust's election, to the performance by the Acquired Trust and the
Acquired Portfolios of all of the obligations to be performed by them hereunder
on or before the Closing Date and, in addition thereto, the following further
conditions:
7.1. All representations and warranties of the Acquired Trust, on behalf of
itself and the Acquired Portfolios, contained in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the
Closing Date, with the same force and effect as if made on and as of the
Closing Date; and there shall be (i) no pending or threatened litigation
brought by any person against the Acquired Trust or the Acquired Portfolios,
the Acquiring Trust or the Acquiring Portfolio or the advisers, trustees or
officers of any of the foregoing, arising out of this Agreement and (ii) no
facts known to the Acquiring Trust or the Acquiring Portfolio, or the Acquired
Trust or the Acquired Portfolios, which any of such persons reasonably believes
might result in such litigation.
7.2. The Acquired Trust shall have delivered to the Acquiring Trust the
statements of net assets described in section 3.2 certified by the Treasurer of
the Acquired Trust.
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7.3. The Acquired Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquiring Trust and dated
as of the Closing Date, to the effect that the representations and warranties
of the Acquired Trust and the Acquired Portfolios made in this Agreement are
true and correct on and as of the Closing Date and as to such other matters as
the Acquiring Trust shall reasonably request.
7.4. The Acquiring Trust shall have received on the Closing Date an opinion
of Bingham Dana LLP, in a form reasonably satisfactory to the Acquiring Trust,
and dated as of the Closing Date, to the effect that:
(a) the Acquired Trust has been established as a voluntary association
with transferable shares of beneficial interest commonly referred to as a
Massachusetts business trust, and is existing under the laws of the
Commonwealth of Massachusetts, and each Acquired Portfolio has been duly
designated as a series of the Acquired Trust;
(b) the Acquired Trust, with respect to the Acquired Portfolios, has the
power as a Massachusetts business trust to carry on their business as
presently conducted in accordance with the description thereof in the
Acquired Trust's registration statement under the 1940 Act;
(c) the Agreement has been duly authorized, executed and delivered by the
Acquired Trust, and constitutes a valid and legally binding obligation of
the Acquired Trust, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
marshaling, or other laws and rules of law affecting the enforcement
generally of creditors' rights and remedies (including such as may deny
giving effect to waivers of debtors' or guarantors' rights), and
considerations of public policy;
(d) the execution and delivery of the Agreement did not, and the exchange
of the Acquired Portfolios' assets for Acquiring Portfolio Shares pursuant
to the Agreement will not, violate the Acquired Trust's Declaration of Trust
or By-laws; and
(e) to the knowledge of such counsel, all regulatory consents,
authorizations, approvals or filings required to be obtained or made by the
Acquired Trust under the Federal laws of the United States or the laws of
the Commonwealth of Massachusetts for the exchange of the Acquired
Portfolios' assets for Acquiring Portfolio Shares pursuant to the Agreement
have been obtained or made.
Such opinion may state that it is solely for the benefit of the Acquiring
Trust, its Trustees and its officers. Such opinion also shall include such
other matters incident to the transaction contemplated hereby as the Acquiring
Trust may reasonably request.
7.5. The Acquired Trust and the Acquired Portfolios shall have performed all
of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
8. Further Conditions Precedent
If any of the conditions set forth below have not been met on or before the
Closing Date with respect to a Acquired Portfolio or the Acquiring Portfolio,
the other party to this Agreement shall, at its option, not be required to
consummate the applicable Reorganization of the Portfolios contemplated by this
Agreement. Neither Reorganization is contingent upon the closing of the other
Reorganization, and the failure to be consummated of one Reorganization shall
not, without more, excuse the consummation of the other Reorganization.
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8.1. This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of each
Acquired Portfolio in accordance with the provisions of the Acquired Trust's
Declaration of Trust and By-Laws, applicable Massachusetts law and the 1940
Act, and certified copies of the resolutions evidencing such approval shall
have been delivered to the Acquiring Portfolio. Notwithstanding anything herein
to the contrary, neither party may waive the condition set forth in this
section 8.1.
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending or to either party's knowledge threatened before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
material damages or other relief in connection with, this Agreement or the
transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Acquiring Trust and the Acquiring Portfolio or the Acquired Trust and the
Acquired Portfolios to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Portfolio
or the Acquired Portfolios.
8.4. The Registration Statement shall have become effective under the 1933
Act and applicable Blue Sky provisions, and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.5. The parties shall have received an opinion of Bingham Dana LLP
addressed to the Acquired Trust, the Acquired Portfolios, the Acquiring Trust
and the Acquiring Portfolio with respect to the federal income tax consequences
of the Reorganization which is consistent with the disclosure regarding such
matters set forth in the Registration Statement. The delivery of such opinion
is conditioned upon receipt by Bingham Dana LLP of representations it shall
request of each Portfolio.
9. Indemnification
9.1. The Acquiring Trust agrees to indemnify and hold harmless the Acquired
Trust, its Trustees and its officers from and against any and all losses,
claims, damages, liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of investigation) to
which any such indemnified party may become subject, insofar as any such loss,
claim, damage, liability or expense (or actions with respect thereto) arises
out of or is based on any breach by the Acquiring Trust or the Acquiring
Portfolio of any of its representations, warranties, covenants or agreements
set forth in this Agreement.
9.2. The Acquired Trust agrees to indemnify and hold harmless the Acquiring
Trust, its Trustees and its officers from and against any and all losses,
claims, damages, liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of investigation) to
which any such indemnified party may become subject, insofar as any such loss,
claim, damage, liability or expense (or actions with respect thereto) arises
out of or is based on any breach by the Acquired Trust or either of the
Acquired Portfolios of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
10. Fees And Expenses
10.1. The Acquiring Trust and the Acquired Trust each represents and
warrants to the other that it has no obligations to pay any brokers or finders
fees in connection with the transactions provided for herein.
A-13
10.2. Expenses of each Reorganization will be borne equally by Citibank,
N.A. and SSB Citi Fund Management LLC.
11. Entire Agreement; Survival Of Warranties
11.1. The parties agree that neither party has made any representation,
warranty or covenant not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
11.2. Except as specified in the next sentence set forth in this section
11.2, the representations, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith shall
not survive the consummation of the transactions contemplated hereunder.
The covenants to be performed after the Closing and the obligations of each
of the Acquired Trust, on behalf of each of the Acquired Portfolios, and the
Acquiring Trust, on behalf of the Acquiring Portfolio, in sections 9.1 and 9.2
shall survive the Closing.
12. Termination
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by either party by (i) mutual agreement of the parties, (ii)
by either party if the Closing shall not have occurred on or before June 30,
2001, unless such date is extended by mutual agreement of the parties, or (iii)
by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective trustees or officers,
except for any such material breach or intentional misrepresentation, as to
each of which all remedies at law or in equity of the party adversely affected
shall survive.
13. Amendments
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Trust and the Acquiring Trust; provided, however, that following the
meeting of shareholders of the Acquired Portfolios called by the Acquired
Portfolios pursuant to section 5.3 of this Agreement, no such amendment may
have the effect of reducing the number of the Acquiring Portfolio Shares to be
issued to the shareholders of either Acquired Portfolio under this Agreement to
the detriment of such shareholders without their further approval.
14. Notices
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be deemed duly given
if delivered by hand (including by Federal Express or similar express courier)
or transmitted by facsimile or three days after being mailed by prepaid
registered or certified mail, return receipt requested, addressed to the
Acquired Trust or the Acquired Portfolios, c/o Variable Annuity Portfolios, 7
World Trade Center, New York, New York 10048, with a copy to Roger P. Joseph,
Esq., Bingham Dana LLP, 150 Federal Street, Boston, MA 02110, or to the
Acquiring Trust or the Acquiring Portfolio, c/o Greenwich Street Series Fund, 7
World Trade Center, New York, New York 10048, with a copy to Burton M. Leibert,
Esq., Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York 10019,
or to any other address that the Acquired Trust or the Acquiring Trust shall
have last designated by notice to the other party.
15. Headings; Counterparts; Assignment; Limitation Of Liability
15.1. The Article and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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15.2. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
15.3. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation (including the shareholders of any Portfolio) any rights or
remedies under or by reason of this Agreement, other than the parties hereto
and their successor and permitted assigns. Nothing in this section is intended
to limit the rights of shareholders of the Acquired Trust to maintain
derivative actions with respect to this Agreement, subject to and in accordance
with applicable law.
15.4. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the Commonwealth of Massachusetts, without regard
to its principles of conflicts of laws.
15.5. The Acquired Trust is a business trust organized under Massachusetts
law and under a Declaration of Trust, to which reference is hereby made and a
copy of which, with amendments, is on file with the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law. It is expressly
acknowledged and agreed that the obligations of the Acquired Trust entered into
in the name or on behalf of the Acquired Trust by any of its Trustees,
officers, employees or agents are not made individually, but in such
capacities, that the Acquired Trust's obligations under this Agreement bind
only that portion of the trust estate consisting of assets of the applicable
Acquired Portfolio and not any Trustee, officer, employee, agent or shareholder
individually, and that any liability of the Acquired Trust under this Agreement
or in connection with the transactions contemplated herein shall be discharged
only out of the assets of the applicable Acquired Portfolio.
15.6. The Acquiring Trust is a business trustorganized under Massachusetts
law and under a First Amended and Restated Master Trust Agreement dated October
14, 1998, as amended from time to time, to which reference is hereby made and a
copy of which, with amendments, is on file with the Secretary of State of the
Commonwealth of Massachusetts and elsewhere as required by law. It is expressly
acknowledged and agreed that the obligations of the Acquiring Trust entered
into in the name or on behalf of the Acquiring Trust by any of its Trustees,
officers, employees or agents are not made individually, but in such
capacities, that the Acquiring Trust's obligations under this Agreement bind
only that portion of the trust estate consisting of assets of the Acquiring
Portfolio and not any Trustees, officer, employee, agent or shareholder
individually, and that any liability of the Acquiring Trust under this
Agreement or in connection with the transactions contemplated herein shall be
discharged only out of the assets of the Acquiring Portfolio.
[Signatures follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President and attested by its Secretary or
Assistant Secretary.
Attest: VARIABLE ANNUITY PORTFOLIOS
on behalf of CitiSelect VIP Folio 200 Conservative and
CitiSelect VIP Folio 300 Balanced
By:
Name:
Title:
Attest: GREENWICH STREET SERIES FUND
on behalf of Appreciation Portfolio
By:
Name:
Title:
Solely for purposes of Sections 6.6 and 10.2:
CITIBANK, N.A.
By:
Name:
Title:
SSB CITI FUND MANAGEMENT LLC
By:
Name:
Title:
A-16
PART B
STATEMENT OF ADDITIONAL INFORMATION
RELATING TO THE ACQUISITION BY THE
APPRECIATION PORTFOLIO (THE "SMITH BARNEY PORTFOLIO"),
A SERIES OF GREENWICH STREET SERIES FUND
7 World Trade Center
New York, New York 10048
(800) 451-2010
OF THE ASSETS OF
CITISELECT VIP FOLIO 200 CONSERVATIVE AND CITISELECT VIP FOLIO 300 BALANCED
(THE "CITISELECT PORTFOLIOS"), EACH A SERIES OF VARIABLE ANNUITY PORTFOLIOS
("VAP")
7 World Trade Center
New York, New York 10048
(800) 451-2010
Dated: March 22, 2001
This Statement of Additional Information is not a prospectus. A Proxy
Statement/ Prospectus, dated March 22, 2001, relating to the above-referenced
matter may be obtained without charge by calling or writing the Smith Barney
Portfolio at the telephone number or address set forth above. This Statement of
Additional Information should be read in conjunction with the Proxy
Statement/Prospectus. Each of the following documents accompanies this
Statement of Additional Information and is incorporated herein by reference:
1. Prospectus dated April 28, 2000 and Statement of Additional Information
dated April 28, 2000 as amended June 9, 2000 and December 21, 2000 for
the Smith Barney Portfolio.
2. Prospectus and Statement of Additional Information for the CitiSelect
Portfolios, dated May 1, 2000.
3. Annual Report of the Smith Barney Portfolio for the year ended December
31, 2000.
4. Annual Report of the CitiSelect Portfolios for the year ended December
31, 2000.
1
TABLE OF CONTENTS
Page
----
General Information 3
2
GENERAL INFORMATION
This Statement of Additional Information relates to the proposed transfer of
all of the assets (other than those specified in the Agreement and Plan of
Reorganization) and all of the liabilities of the CitiSelect Portfolios to the
Smith Barney Portfolio, in exchange for shares of the Smith Barney Portfolio
(the "Reorganization"). The shares issued by the Smith Barney Portfolio will
have an aggregate net asset value equal to the aggregate net asset value of the
shares of the respective CitiSelect Portfolio that were outstanding immediately
before the effective time of the Reorganization.
After the transfer of all of its assets (other than those specified in the
Agreement and Plan of Reorganization) and all of the liabilities in exchange
for the Smith Barney Portfolio shares, the CitiSelect Portfolios will
distribute such shares to their shareholders in liquidation of the CitiSelect
Portfolios. Each shareholder owning shares of the CitiSelect Portfolios at the
effective time of the Reorganization will receive shares of the Smith Barney
Portfolio of equal value, and will receive any unpaid dividends or
distributions that were declared before the effective time of the
Reorganization on shares of the CitiSelect Portfolios. The Smith Barney
Portfolio will establish an account for each former shareholder of the
CitiSelect Portfolios reflecting the appropriate number of shares distributed
to such shareholder. These accounts will be substantially identical to the
accounts maintained by the CitiSelect Portfolios for each shareholder. Upon
completion of the Reorganization with respect to the CitiSelect Portfolios, all
outstanding shares of the CitiSelect Portfolios will have been redeemed and
cancelled in exchange for shares distributed by the Smith Barney Portfolio, and
the CitiSelect Portfolios will wind up their affairs and be terminated as a
series of VAP under Massachusetts law.
Because the net asset value of the CitiSelect Portfolios is less than ten
percent of the Smith Barney Portfolio's value, pro forma financial statements
are not required to be and have not been prepared for inclusion in this
Statement of Additional Information.
For further information about the transaction, see the Combined Proxy
Statement/Prospectus.
3
PART C: OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by reference to section 9 of the
Agreement and Plan of Reorganization and Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement filed on Form N1A with the SEC on October
15, 1991 (the "Registration Statement").
Item 16. Exhibits
(1)(a) Registrant's Master Trust Agreement and Amendment Nos. 1 and 2 are incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration Statement as filed with the SEC on
December 1, 1993 ("Post-Effective Amendment No. 6").
(1)(b) Registrant's Amendments No. 3 and No. 4 to the Master Trust Agreement are incorporated by reference
to Post-Effective Amendment No. 15 as filed with the SEC on December 24, 1998 ("Post-Effective
Amendment No. 15").
(2) Registrant's By-Laws are incorporated by reference to the Registration Statement.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization is filed herewith as Exhibit A.
(5) Not Applicable.
(6)(a) Investment Advisory Agreement dated April 1, 1995 between the Registrant and Travelers Investment
Management Company relating to Equity Index Portfolio, is incorporated by reference to Post-Effective
Amendment No. 10 to the Registrant's Registration Statement as filed with the SEC on May 3, 1995
("Post-Effective Amendment No. 10").
(6)(b) Investment Advisory Agreements dated July 30, 1993 between the Registrant and Greenwich Street
Advisors relating to Money Market, Intermediate High Grade, Diversified Strategic Income, Equity
Income and Growth and Income Portfolios and between the Registrant and Smith Barney Shearson
Asset Management relating to Appreciation Portfolio dated July 30, 1993, are incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's Registration Statement as filed with the SEC on
October 22, 1993 ("Post Effective Amendment No. 4").
Investment Advisory Agreement with Smith Barney Shearson Asset Management relating to Total
Return Portfolio, dated November 23, 1993, is incorporated by reference to Post-Effective Amendment
No. 6.
Investment Advisory Agreement with Smith Barney Advisers, Inc. relating to International Equity
Portfolio, dated November 23, 1993, is incorporated by reference to Post-Effective Amendment No. 6.
Investment Advisory Agreement with American Capital Asset Management, Inc. relating to Emerging
Growth Portfolio, is incorporated by reference to Post-Effective Amendment No. 10.
Form of Investment Advisory Agreement with Greenwich Street Advisors relating to Diversified
Strategic Income Portfolio dated March 21, 1994 is incorporated by reference to Post-Effective
Amendment No. 9 to the Registration Statement as filed with the SEC on May 1, 1994 ("Post-Effective
Amendment No. 9").
Form of Sub-Investment Advisory Agreement with Smith Barney Global Capital Management Inc.
relating to Diversified Strategic Income Portfolio dated March 21, 1994 is incorporated by reference to
Post-Effective Amendment No. 9.
(7) Distribution Agreement with Salomon Smith Barney Inc., dated June 5, 2000.
(8) Not Applicable.
(9)(a) Form of Custody Agreement between the Registrant and PNC Bank, National Association is
incorporated by reference to Post-Effective Amendment No. 11 to the Registration Statement as filed
with the SEC on September 6, 1995.
(9)(b) Form of Custody Agreement between the Registrant and The Chase Manhattan Bank is incorporated by
reference to Post-Effective Amendment No. 13 to the Registration Statement as filed with the SEC on
April 29, 1997.
(10) Not Applicable.
(11) Opinion and Consent of Willkie Farr & Gallagher is filed herewith.
(12) Opinion of Bingham Dana LLP supporting the tax matters and consequences to shareholders discussed
in the prospectus will be filed by amendment.
(13)(a) Administration Agreements dated June 4, 1994 with Smith Barney Mutual Funds Management Inc.
relating to Money Market, Intermediate High Grade, Diversified Strategic Income, Equity Income,
Equity Index, Growth and Income, Appreciation, Total Return, Emerging Growth and International
Equity Portfolios are incorporated by reference to Post-Effective Amendment No. 10.
(13)(b) Transfer Agency Agreement between the Registrant and The Shareholder Services Group, Inc. dated
August 2, 1993 is incorporated by reference to Post-Effective Amendment No. 7 to the Registrant's
Registration Statement as filed with the SEC on March 1, 1994.
(14) Consents of Independent Public Accountants are filed herewith.
(15) Not Applicable.
(16) Not Applicable.
(17)(a) Forms of proxy cards and voting instruction forms are filed herewith.
(17)(b) Annual Report of CitiSelect VIP Folio 200 Conservative and CitiSelect VIP Folio 300 Balanced, dated
December 31, 2000, is incorporated herein by reference.
(17)(c) Annual Report of the Select Government Portfolio, dated October 31, 2000, is incorporated herein by
reference.
(17)(d) Prospectus and statement of additional information of CitiSelect VIP Folio 200 Conservative and
CitiSelect VIP Folio 300 Balanced is incorporated by reference to Post-Effective Amendment No. 7 to
Variable Annuity Portfolios' Registration Statement as filed with the SEC on April 28, 2000.
(17)(e) Prospectus and statement of additional information of the Select Government Portfolio is incorporated
by reference to Post-Effective Amendment No. 25 to the Smith Barney Investment Series' Registration
Statement as filed with the SEC on February 28, 2000.
2
(17)(f) Annual Report of Registrant, dated December 31, 2000, is incorporated herein by reference.
(17)(g) Prospectus dated April 28, 2000 and the Statement of Additional Information dated April 28, 2000 as
amended June 9, 2000 and December 21, 2000 of Registrant, are incorporated herein by reference.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act [17 C.F.R.
230.145c], the reoffering prospectus will contain the information called for by
the applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
3
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, this Registration Statement has been signed on behalf of the Registrant
in the City of New York and the State of New York on the 20th day of February,
2001.
GREENWICH STREET SERIES FUND
By: /S/ HEATH B. MCLENDON
-----------------------------
Heath B. McLendon
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-14 has been signed below by the following
persons in the capacity and on the date indicated.
Name Title Date
---- ----- ----
/S/ HEATH B. MCLENDON Chairman of the Board, President February 20, 2001
- -------------------------------------------------- and Chief Executive Officer
Heath B. McLendon
/S/ LEWIS E. DAIDONE Senior Vice President, Treasurer, February 20, 2001
- -------------------------------------------------- Chief Financial and Accounting
Lewis E. Daidone Officer
/S/ HERBER BARG* Trustee February 20, 2001
- --------------------------------------------------
Herber Barg
/S/ ALFRED J. BIANCHETTI* Trustee February 20, 2001
- --------------------------------------------------
Alfred J. Bianchetti
/S/ MARTIN BRODY* Trustee February 20, 2001
- --------------------------------------------------
Martin Brody
/S/ DWIGHT B. CRANE* Trustee February 20, 2001
- --------------------------------------------------
Dwight B. Crane
/S/ BURT N. DORSETT* Trustee February 20, 2001
- --------------------------------------------------
Burt N. Dorsett
/S/ ELLIOT S. JAFFE* Trustee February 20, 2001
- --------------------------------------------------
Elliot S. Jaffe
/S/ STEPHEN E. KAUFMAN* Trustee February 20, 2001
- --------------------------------------------------
Stephen E. Kaufman
/S/ JOSEPH J. MCCANN* Trustee February 20, 2001
- --------------------------------------------------
Joseph J. McCann
/S/ CORNELIUS C. ROSE, JR.* Trustee February 20, 2001
- --------------------------------------------------
Cornelius C. Rose, Jr.
*By: /S/ HEATH B. MCLENDON
- --------------------------------------------------
Heath B. McLendon
Executed by Heath B. McLendon, Attorney-in-Fact on
behalf of those indicated, pursuant to Powers of
Attorney dated July 12, 2000.
4
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
(11) Opinion and Consent of Willkie Farr & Gallagher.
(14) Consents of Independent Public Accountants.
(17)(a) Forms of proxy cards and voting instruction forms.