THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Check the appropriate box:
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[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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1) Amount previously paid:
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4) Date Filed: _______________
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[FORM OF SOLICITATION LETTER]
THE TRAVELERS INSURANCE COMPANY
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR
VARIABLE ANNUITIES ("ACCOUNT GIS")
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
("ACCOUNT MM")
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
("ACCOUNT QB")
(EACH AN "ACCOUNT" AND, COLLECTIVELY, THE "ACCOUNTS")
One Cityplace, Hartford, Connecticut 06103
May __, 2005
Dear Variable Annuity Contract Owner:
Units of the above-named Accounts of The Travelers Insurance Company
("TIC") have been purchased at your direction to fund benefits payable under
your variable annuity contract (the "variable contracts"). As owner of the Units
of the Accounts, you are being asked (i) to approve a new investment advisory
agreement between each Account and Travelers Asset Management International
Company LLC ("TAMIC"), the investment adviser to each Account; (ii) to approve a
proposal with respect to the future operation of each Account whereby TAMIC may
from time to time, to the extent permitted by an exemption ("manager of managers
exemption") granted by the Securities and Exchange Commission and subject to
approval by the Board of Managers, enter into new or amended agreements with
subadvisers with respect to the Account without obtaining contract owner
approval of such agreements, and to permit such subadvisers to manage the assets
of the Account pursuant to such subadvisory agreement; and (iii) to elect a new
member to the Board of Managers of each Account.
YOUR VOTE IS IMPORTANT!
TAMIC is the investment adviser for each Account. Citigroup Inc.
("Citigroup") has reached an agreement with MetLife, Inc. ("MetLife") to sell
TIC to MetLife. As part of this transaction, TAMIC, which is currently an
indirect wholly owned subsidiary of Citigroup, would become an indirect wholly
owned subsidiary of MetLife. Under applicable law, a change of control of TAMIC
may therefore be deemed to occur, which in turn results in the assignment of
TAMIC's investment advisory agreements with the Accounts, as well as its
subadvisory agreement with the subadviser for Account GIS, and the termination
of those agreements pursuant to the terms of those agreements.
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The Accounts are seeking approval by the variable contract owners of new
investment advisory agreements with TAMIC. With respect to any subadvisory
agreements, upon becoming a subsidiary of MetLife, TAMIC would also be able to
utilize an exemption, if approved by the variable contract owners, from the
Securities and Exchange Commission that would allow TAMIC to operate as a
"manager of managers" to the Accounts. As a manager of managers, TAMIC would
retain the responsibility for hiring and, when appropriate, replacing
subadvisers. Subject to certain conditions, TAMIC would be permitted to enter
into a new subadvisory agreement for an Account, subject to Board approval.
TAMIC would not need, however, to obtain variable contract owner approval, which
would otherwise be required, to enter into a new agreement with the current
subadviser or a new subadviser.
The current member of the Accounts' Boards of Managers who is affiliated
with Citigroup has informed the Accounts' Board that if the sale of TIC to
MetLife is consummated, he will resign as a Board member. Accordingly, it is
being proposed that variable contract owners elect, subject to consummation of
the sale, a manager affiliated with MetLife to replace the current member of the
Board affiliated with Citigroup.
After carefully considering the merits of the proposals, the Board of
Managers of the Accounts (the "Board") has determined that approval of the
proposals is in the best interests of each Account's contract owners.
The Board recommends that you read the enclosed proxy materials carefully
and then vote FOR the proposals. PLEASE TAKE A MOMENT NOW TO SIGN AND RETURN THE
PROXY FORM(S) IN THE ENCLOSED POSTAGE-PAID ENVELOPE. For more information,
please call TIC at 1-800-842-9368.
Respectfully,
The Travelers Insurance Company
WE URGE YOU TO SIGN AND RETURN THE PROXY FORM(S) IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR
VARIABLE ANNUITIES
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
(EACH AN "ACCOUNT" AND, COLLECTIVELY, THE "ACCOUNTS")
ONE CITYPLACE
HARTFORD, CONNECTICUT 06103
MAY , 2005
NOTICE OF SPECIAL MEETING OF VARIABLE ANNUITY CONTRACT
OWNERS
To Variable Annuity Contract Owners:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the variable annuity
contract owners (the "Contract Owners") of each Account will be held at One
Cityplace, Hartford, Connecticut 06103, on June 10, 2005 at 9:00 a.m. (Eastern
time), for the following purposes:
ITEM 1. To consider and approve a new investment advisory agreement
between each Account and Travelers Asset Management International Company
LLC ("TAMIC").
ITEM 2. To consider and approve a proposal with respect to the future
operation of each Account whereby TAMIC may from time to time, to the
extent permitted by an exemption granted by the Securities and Exchange
Commission and subject to approval by the Board of Managers, enter into new
or amended agreements with subadvisers with respect to the Account without
obtaining Contract Owner approval of such agreements, and to permit such
subadvisers to manage the assets of the Account pursuant to such
subadvisory agreements.
ITEM 3. To elect a new member of the Board of Managers.
ITEM 4. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
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THE BOARD OF MANAGERS OF THE ACCOUNTS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
IN FAVOR OF ITEMS 1, 2 AND 3.
Contract Owners of record as of the close of business on April 15, 2005 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
CONTRACT OWNERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF
MANAGERS OF EACH ACCOUNT. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE
EXERCISED BY SUBMITTING A WRITTEN NOTICE OF REVOCATION OR SUBSEQUENTLY EXECUTED
VOTING INSTRUCTIONS OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
By Order of the Board of Managers
-----------------------------------------
Kathleen A. McGah, Secretary to the Board
May , 2005
Hartford, Connecticut
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THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE
ANNUITIES ("ACCOUNT GIS")
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
("ACCOUNT MM")
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES ("ACCOUNT
QB")
(EACH AN "ACCOUNT" AND, COLLECTIVELY, THE "ACCOUNTS")
ONE CITYPLACE
HARTFORD, CONNECTICUT 06103
(800) 842-9368
JOINT PROXY STATEMENT
This Joint Proxy Statement ("Proxy Statement") is being furnished in
connection with the solicitation of voting instructions by the Board of Managers
(the "Board of Managers" or the "Managers") of the Accounts for use at the joint
special meeting of the variable annuity contract owners of the Accounts
("Contract Owners") scheduled for June 24, 2005 at 9:00 a.m. (Eastern time), and
any adjournments thereof, at the offices of the Accounts at the address set
forth above on this Proxy Statement (the "Meeting"). At the Meeting, Contract
Owners of each Account will be asked to (i) consider and approve a new
investment advisory agreement between the Account and Travelers Asset Management
International Company LLC ("TAMIC"); (ii) consider and approve a proposal (the
"manager of managers proposal") with respect to the future operation of the
Account whereby TAMIC may from time to time, subject to approval by the Board of
Managers and to the extent permitted by an exemption granted by the Securities
and Exchange Commission ("SEC"), enter into new or amended agreements with
subadvisers with respect to the Account without obtaining Contract Owner
approval of such subadvisory agreements, and to permit such subadvisers to
manage the assets of the Account pursuant to such subadvisory agreements; and
(iii) elect a new member of the Board of Managers (together, the "Proposals").
Contract Owners of each Account will vote separately as to each Proposal.
The variable annuity contracts are issued by The Travelers Insurance
Company ("TIC"), and are funded by the Accounts, each of which is a separate
account of TIC.
This Proxy Statement describes more fully the Proposals. Forms of the new
investment advisory agreements are included as Appendices A-1 through A-3 of
this Proxy Statement.
The Meeting will be held on June 24, 2005 at 9:00 a.m. (Eastern time) at
the Account's offices at One Cityplace, Hartford, Connecticut 06103. It is
expected that this Proxy Statement will be mailed on or about May , 2005.
Contract Owners of record at the close of business on April 15, 2005 (the
"Record Date") are entitled to vote on the Proposals. At the Meeting, Contract
Owners will consider and approve or disapprove each Proposal.
The chart below lists the number of units of each Account that were
outstanding as of the close of business on the Record Date. Each unit of a
Account is entitled to one vote, with proportionate voting for fractional units.
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Total Number of Units Outstanding
Name of Account as of April 15, 2005
---------------------------------------------------
ACCOUNT GIS 26,481,297.3985
ACCOUNT MM 24,475,770.0997
ACCOUNT QB 13,188,264.0935
THE BOARD OF MANAGERS OF EACH ACCOUNT UNANIMOUSLY RECOMMENDS THAT VARIABLE
ANNUITY CONTRACT OWNERS VOTE "FOR" EACH PROPOSAL.
COPIES OF EACH ACCOUNT'S MOST RECENT ANNUAL AND SEMIANNUAL REPORTS ARE
AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY CALLING THE ACCOUNT (TOLL-FREE) AT
1-800-842-9368 .
The Proposals are related to the proposed sale of TIC by Citigroup Inc.
("Citigroup") to MetLife, Inc. ("MetLife") as described in greater detail under
Proposal 1 below. This sale is expected to close on or about June 30, 2005 (the
"MetLife Closing Date").
PROPOSAL 1 - APPROVAL OF INVESTMENT ADVISORY AGREEMENT.
SUMMARY
TAMIC currently serves as investment adviser to each Account pursuant to a
separate investment advisory agreement between TAMIC and the Account (the
"Current Advisory Agreements"). For Account GIS, TAMIC has entered into a
subadvisory agreement (the "GIS Subadvisory Agreement") with The Travelers
Investment Management Company ("TIMCO"). As explained in more detail below,
Contract Owners are being asked to approve new investment advisory agreements
between each Account and TAMIC (the "New Advisory Agreements"). THE NEW ADVISORY
AGREEMENTS WILL CONTAIN TERMS SUBSTANTIALLY THE SAME AS THOSE IN THE CURRENT
ADVISORY AGREEMENTS.
MetLife and Citigroup have announced an agreement for the sale of TIC by
Citigroup to MetLife (the "MetLife Transaction") for $11.5 billion, subject to
closing adjustments. The MetLife Transaction includes the acquisition of TIC
subsidiary TAMIC, the investment adviser to the Accounts, by MetLife. Contract
Owners are not being asked to approve the MetLife Transaction. However, given
that the Accounts' investment adviser will have a new parent company (MetLife)
and that under the Investment Company Act of 1940 (the "1940 Act"), a change in
control of the investment adviser results in a termination of that adviser's
investment advisory contracts, the Current Advisory Agreements and the GIS
Subadvisory Agreement will terminate upon the effective date of the sale of TIC.
Thus, the New Advisory Agreements must be submitted to a vote of the Contract
Owners.
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Under the terms of the MetLife Transaction, Citigroup will receive $1.0 to
$3.0 billion in MetLife equity securities and the balance in cash. The MetLife
Transaction is subject to certain domestic and international regulatory
approvals, as well as other customary conditions to closing. It is planned that
the closing of the MetLife Transaction will take place on June 30, 2005 or soon
thereafter.
MetLife, through its subsidiaries and affiliates, is a leading provider of
insurance and other financial services to individual and institutional
customers. In the United States, the MetLife companies serve individuals in
approximately 13 million households and provide benefits to 37 million customers
and their family members through their employee benefit plan sponsors.
Representatives of MetLife have represented to the Board of Managers that
MetLife has no current intention of proposing changes to the investment
objectives, policies and restrictions of the Accounts, or of merging the
Accounts with any other investment companies or series thereof sponsored by
MetLife. However, such representative have indicated that MetLife plans to cause
TAMIC, subject to Board approval, to retain Salomon Brothers Asset Management
Inc. ("Salomon"), currently an affiliate of TAMIC, as a temporary subadviser for
those Accounts (QB and MM) that are now managed directly by TAMIC without a
subadviser, effective on or about the MetLife Closing Date. The portfolio
managers employed by Salomon are also currently employees of TAMIC and are the
current portfolio managers of these Accounts, so for these Accounts, there will
be no change in the day-to-day portfolio manager. Furthermore, MetLife may in
the future make or recommend to the Managers such additional changes to any
Accounts, including merging one or more Accounts into other MetLife-sponsored
funds, as it determines are appropriate and as permitted by applicable law.
In connection with the closing of the MetLife Transaction, MetLife,
Citigroup and certain of their affiliates will enter into a Distribution
Agreement under which Citigroup-affiliated broker-dealers will, subject to the
terms and conditions of such Distribution Agreement, continue to offer existing
TIC insurance contracts for a period of ten years from the MetLife Closing Date.
In addition, MetLife, Citigroup and certain of their affiliates will enter into
an Investment Products Agreement under which the existing TIC insurance products
will, for a period of five years after the MetLife Closing Date and subject to
the other terms and conditions of the Investment Products Agreement, continue to
include the same Citigroup-sponsored funds that are currently included as
investment options under such products.
As reflected by Proposal 2, representatives of MetLife have recommended
that each Account operate in the future as a "manager of managers" fund. (Please
see Proposal 2 for more information.) Thus, if Proposal 2 is approved by the
Contract Owners of each Account at the Meeting, new subadvisory agreements for
the Accounts will be approved only by the Board of the Account, as permitted by
the manager of managers proposal.
MetLife has agreed that it will satisfy certain conditions set forth in
Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe
harbor, which allows an investment adviser to an investment company or any of
its affiliated persons to receive any amount or benefit in connection with a
change in control of the investment adviser so long as certain conditions are
met. One such provision provides that no "unfair burden" may be imposed upon the
investment company as a result of such a change-in-control transaction or any
express or implied terms, conditions or understandings applicable thereto. The
term "unfair burden" is defined in Section 15(f) to include any arrangement,
during the two-year period after the change in control, whereby the investment
adviser, or any interested person of such adviser, receives or is entitled to
receive any compensation, directly or indirectly, from the investment company or
its shareholders (other than fees for bona fide investment advisory or other
services) or from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of
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the investment company (other than bona fide ordinary compensation as principal
underwriter for such investment company).
The Accounts have not been advised by MetLife or TAMIC of any circumstance
arising from the MetLife Transaction that might result in the imposition of an
"unfair burden" on the Accounts as a result of the MetLife Transaction.
Moreover, MetLife has agreed that for a period of not less than two years after
the consummation of the MetLife Transaction, it will refrain from imposing an
"unfair burden" on the Accounts in connection with the MetLife Transaction.
Proposal 1 assumes the consummation of the MetLife Transaction. Should the
MetLife Transaction fail to close, then there would be no change in control of
TAMIC, and no consequent termination of the Current Advisory Agreements. Thus no
vote would be necessary to approve any new agreements.
THE INVESTMENT ADVISORY AGREEMENTS
THE CURRENT ADVISORY AGREEMENTS
The following chart lists the date of each Current Advisory Agreement, the
date it was last considered and renewed or approved by the Board of Managers,
the date on which it was last approved by Contract Owners subsequent to the
commencement of operations of the Account, and the reason it was last submitted
for Shareholder approval.
Date Last
Date Last Approved or Approved
Name of Date of Current Renewed by Board of By Contract Owners and
Account Advisory Agreement Managers Reason for Submission
- ---------------------------------------------------------------------------------
Account GIS May 1, 1998, July 23, 2004 N.A.
as last amended
October 31, 2003
Account MM December 30, 1992, July 23, 2004 N.A.
as last amended
October 31, 2003
Account QB December 30, 1992, July 23, 2004 N.A.
as last amended
October 31, 2003
The key terms, including fees, of the Current Advisory Agreements are set
out in detail under the heading "The New Advisory Agreements" below.
The following table summarizes the advisory fees paid by each Account to
TAMIC for the fiscal year ended December 31, 2004.
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NAME OF ACCOUNT AGGREGATE ADVISORY FEES PAID
- --------------- ----------------------------
Account GIS
Account MM
Account QB
THE NEW ADVISORY AGREEMENTS
The New Advisory Agreements are the same in all material respects as the
Current Advisory Agreements, except that language will be added to the New
Advisory Agreements to make explicit the authority of TAMIC to hire and oversee
subadvisers. In addition, each New Advisory Agreement will reflect the MetLife
Closing Date as its new effective date. Forms of the New Advisory Agreements for
Accounts are attached to this proxy statement as Exhibit A-1 through Exhibit
A-3.
Under the New Advisory Agreements, TAMIC will continue to provide
investment advisory services to each Account, including the investment and
reinvestment of the Account's assets in accordance with the investment
objectives, policies and restrictions of the Account. The New Advisory
Agreements explicitly authorize TAMIC, subject to the approval of the Board of
Managers, to enter into agreements with other investment advisers to provide
investment advice or other services to the Account. Such Agreements provide that
TAMIC remains responsible for ensuring that any such subadviser conducts its
operations in a manner consistent with the terms of the Agreement.
All services under the New Advisory Agreements must be provided in
accordance with the provisions of the 1940 Act and any rules or regulations
thereunder, the Securities Act of 1933 and any rules or regulations thereunder,
the Internal Revenue Code, any other applicable provision of law, the resolution
of The Travelers Insurance Company's Board of Directors establishing the
Account, the Account's rules and regulations, any policies adopted by the
Managers, and the investment policies of the Account as disclosed in the
Account's registration statement on file with the Securities and Exchange
Commission (the "SEC"), as amended from time to time.
As compensation for its services, TAMIC will be entitled to receive from
each Account fees calculated as a percentage of the Account's average daily net
assets. Fees under the New Advisory Agreements will be calculated at the same
rate as those incurred under the Current Advisory Agreements. The annual rate
paid by each Account is set forth below.
ADVISORY FEE PAID TO
TAMIC
(AS A PERCENTAGE OF
ACCOUNT DAILY NET ASSETS)
------- ---------------------
Account 0.65% on the first
GIS $500 million; 0.55%
of the next $500
million; 0.50% of the
next $500 million;
0.45% of the next
$500 million; 0.40%
over $2 billion
Account 0.3233%
QB
Account 0.3233%
MM
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Contingent upon receipt of Contract Owner approval, the New Advisory
Agreements will be effective upon the MetLife Closing, and will continue in
effect until July, 2005 when the annual review of such Agreements for renewal
had been planned independently of the MetLife Transaction. Thereafter, each New
Advisory Agreement will continue in effect as to any Account for successive
annual periods, provided their continuance is approved at least annually by (1)
a majority vote, cast in person at a meeting called for that purpose, of the
Managers or (2) a vote of the holders of a majority of the outstanding voting
securities (as defined by the 1940 Act) of the Account and (3) in either event
by a majority of the Managers who are not "interested persons," as defined in
the 1940 Act, of TAMIC (the "Independent Managers").
Under the New Advisory Agreements, TAMIC will continue to provide, at its
expense, office space, facilities and equipment for carrying out its agreed-upon
duties. TAMIC or an affiliate also bears the cost of reasonable compensation,
fees, and related expenses of the Account's officers and its Managers that are
"interested persons" of the Account. Other expenses incurred in the operation of
a Account are generally paid by such Account.
The New Advisory Agreement for each Account provides that it may be
terminated by the Managers, a majority of Contract Owners of the Account, or
TAMIC (but not without the prior approval of a new investment advisory agreement
by the Contract Owners) at any time, without penalty, by giving the other party
60 days' written notice.
TAMIC acts as investment adviser to other investment companies with
investment objectives similar to Account QB. Specifically, the Travelers Managed
Income Portfolio of the Travelers Series Fund Inc. and the Travelers Quality
Bond Portfolio of The Travelers Series Trust, which are also managed by TAMIC,
are similar in investment objectives to Account QB. TAMIC receives a management
fee of 0.65% of the daily net assets of the Travelers Managed Income Portfolio,
and in turn pays 0.10% to another entity owned by Citigroup for administrative
services. As of December 31, 2004, the total assets in the Travelers Managed
Income Portfolio were $ .
TAMIC receives an advisory fee of 0.3233% of the daily net assets of the
Travelers Quality Bond Portfolio of The Travelers Series Trust. As of December
31, 2004, the total assets in that Trust were $ .
MANAGERS' CONSIDERATIONS
In connection with making its determinations, the Board was provided with
information about MetLife and its purchase of TIC from Citigroup. At a
telephonic meeting on March 17, 2005 and in-person meetings on March 29 and 30,
2005, the Managers discussed with certain MetLife representatives MetLife's
intentions regarding the preservation and strengthening of TAMIC's business and
MetLife's intentions regarding staffing changes and executive leadership changes
at TAMIC. The MetLife representatives also discussed and provided the Managers
with certain written information on MetLife's business and products, including
the experience of MetLife's advisory subsidiaries in
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overseeing subadvised mutual funds. The Managers also discussed the plans and
anticipated roles and responsibilities of certain TAMIC employees and officers
after the MetLife Transaction.
Among other things, the Managers considered:
- the ability of TAMIC to continue its oversight of both the
investment and compliance operations of the subadviser after the change in
control;
- the intention of MetLife to integrate TIC, including TAMIC, into
MetLife's current businesses to create a single business operation;
- anticipated changes to back office operations relating to the
Accounts, including the provision of administrative and transfer agency
services, after the change in control; and
- the fact that the terms of each New Advisory Agreements, including
the fees, would be identical to the Current Advisory Agreements, except for the
inception date and the express authority for TAMIC to retain subadvisers.
The Board of Managers was also informed that, in light of personnel changes
at TAMIC that are expected to occur or on about the MetLife Closing Date,
MetLife intends to hire Salomon Brothers Asset Management ("Salomon"), currently
an affiliate of TAMIC (though Salomon will not be an affiliate after the MetLife
Closing Date), as temporary subadviser for those Accounts that are now managed
directly by TAMIC without a subadviser, effective on or about the MetLife
Closing Date. They were told that the portfolio managers to be employed by
Salomon to manage the Accounts are also currently employees of TAMIC and are the
current portfolio managers of these Accounts, so for these Accounts, there is
expected to be no change in the day-to-day portfolio manager. The Board was also
told that after the MetLife Closing Date, MetLife's plan is for TAMIC to conduct
a formal search for candidates to act as subadviser on an ongoing basis to those
Accounts, and to make a recommendation to the Board, probably in the Fall of
2005.
The Board also considered the agreements between MetLife and Citigroup
entered into in connection with the MetLife Transaction under which
Citigroup-affiliated broker-dealers will continue to offer the existing
insurance contracts of TIC and its current affiliates and such contracts will
continue to include Citigroup-sponsored funds as investment options, as
discussed in more detail under "Summary" above.
The Board of Managers also considered its plans to perform a full review of
the New Advisory Agreements pursuant to Section 15(c) of the 1940 Act at its
regularly scheduled July Board meeting, which will occur approximately three
weeks after the MetLife Closing Date. In light of the continuity of investment
management under the New Advisory Agreements, the short period between the
effective date of those Agreements and the upcoming full review, and MetLife's
plans to conduct a formal search for a subadviser for the Accounts for which
Salomon would serve as temporary subadviser, the Board did not deem it necessary
at this time to conduct an in-depth review of the services provided by TAMIC
under the Agreements. Nonetheless, with respect to the nature, extent and
quality of the services provided by TAMIC and the investment performance of the
Accounts, the Board noted that the performance of the Accounts had generally
been good. As to the profits realized by TAMIC from its relationship with the
Accounts, the Board noted that it was satisfied that TAMIC's profits were not
excessive in the past, and that it was not possible to predict how the MetLife
Transaction would affect such profits. As to whether economies of scale would be
realized as the Accounts grow and whether fee levels reflect any such economies
of scale, the Board noted that the investment advisory fee rates for
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Account GIS included "breakpoints" that reduced the fees payable at higher asset
levels, and noted its intention to explore the possibility of instituting
breakpoints for those Accounts where they were not currently in place. The Board
of Managers also considered such additional factors they felt were relevant.
After carefully considering the information described above, the Board of
Managers of each Account, including the Independent Managers, unanimously voted
to approve the New Advisory Agreement for the Account and to recommend that the
Account's Contract Owners vote to approve the New Advisory Agreement for their
Account.
In the event that the Contract Owners of an Account have not approved the
New Advisory Agreement for their Account by the MetLife Closing Date, TAMIC will
enter into an interim advisory agreement for that Account pursuant to Rule 15a-4
under the 1940 Act, which will take effect immediately following the closing of
the MetLife Transaction. The interim advisory agreement for an Account will be
in substantially the form of the proposed New Advisory Agreement for the Account
but also will include certain provisions required by Rule 15a-4. These
provisions include a maximum term of 150 days, a provision that the trustees or
a majority of the Account's Contract Owners may terminate the agreement at any
time without penalty on not more than 10 days' written notice, and a provision
that the compensation earned by TAMIC thereunder will be held in an
interest-bearing escrow account until shareholder approval of the New Advisory
Agreement is obtained, after which the amount in the escrow account (together
with any interest) will be paid to TAMIC. If an Account has not received the
requisite shareholder approval for the New Advisory Agreement within 150 days
after the MetLife Closing Date, the Board of Managers will consider other
appropriate arrangements subject to approval in accordance with the 1940 Act.
THE BOARD OF MANAGERS OF EACH ACCOUNT, INCLUDING ALL OF THE INDEPENDENT
MANAGERS, UNANIMOUSLY RECOMMENDS THAT CONTRACT OWNERS VOTE FOR APPROVAL OF THE
NEW ADVISORY AGREEMENT FOR SUCH ACCOUNT.
INVESTMENT ADVISER
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC ("TAMIC")
TAMIC, a Delaware Limited Liability Company, serves as investment adviser
to each Account, as well as to certain other registered investment companies.
TAMIC also provides investment advice to individual and pooled pension and
profit-sharing accounts and non-affiliated insurance companies. TAMIC is a
registered investment adviser that has provided investment advisory services
since its incorporation in 1978. TAMIC is currently an indirect wholly owned
subsidiary of The Travelers Insurance Company, which is an indirect wholly owned
subsidiary of Citigroup. TAMIC's principal offices are located at 242 Trumbull
Street, Hartford, Connecticut, 06115. The principal executive officer and
directors of TAMIC are set forth in the following table.
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OFFICER OR DIRECTOR PRINCIPAL OCCUPATION ADDRESS
Peter J. Wilby Managing Director, Chief Investment Officer North 399 Park Avenue
Director American Fixed Income, High Yield and Emerging New York, NY 10043
Markets - Citigroup Asset Management
James C. Zelter Chief Investment Officer - Citigroup Global 390 Greenwich Street
Director Investments New York, NY 10013
David A. Torchia Managing Director - Citigroup Asset Management 399 Park Avenue
Director New York, NY 10043
David P. Marks Chief Investment Officer - Citigroup Insurance 242 Trumbull St
President Investments Hartford, CT 06103
BROKERAGE
The policy of TAMIC ( the "adviser"), in selecting brokers to execute
transactions in the Accounts' portfolio securities, is to seek best execution of
orders at the most favorable prices. The determination of what may constitute
best execution and price in the execution of a securities transaction by a
broker involves a number of considerations, including, without limitation:
o the overall direct net economic result to the Account, involving both
price paid or received and any commissions and other cost paid;
o the efficiency with which the transaction is effected;
o the ability to effect the transaction at all where a large block is
involved;
o the availability of the broker to stand ready to execute potentially
difficult transactions in the future; and
o the financial strength and stability of the broker.
Such considerations are judgmental and are weighed by management in
determining the overall reasonableness of brokerage commissions paid. In
addition to the foregoing, one factor in the selection of brokers is the receipt
of research services, analyses and reports concerning issuers, industries,
securities, economic factors and trends, and other statistical and factual
information. The brokerage commission paid by an Account for a transaction may
be greater than the commission that would have been charged by another broker if
the difference is determined in good faith to be justified in light of the
brokerage and information provided. The cost, value and specific application of
such information may not be determinable, and it is not practical to allocate
these costs, value or specific applications among the Accounts and other clients
of the adviser. Accordingly, the adviser or its other clients may indirectly
benefit from the availability of such information. This situation may create a
conflict of interest for the adviser. Similarly, an Account may indirectly
benefit from information made available as a result of transactions for other
clients of an adviser.
Purchases and sales of bonds and money market instruments usually are
principal transactions and normally are purchased directly from the issuer or
from the underwriter or market maker for the securities. There usually are no
brokerage commissions paid for such purchases. Purchases from the underwriters
include the underwriting commission or concession, and purchases from dealers
serving as market makers include the spread between the bid and asked prices.
-14-
The adviser's policies with respect to brokerage are and will be reviewed
by the Board of Managers periodically. Because of the possibility of further
regulatory developments affecting the securities exchanges and brokerage
practices generally, or due to other appropriate factors, the foregoing
practices may be changed, modified or eliminated.
PROPOSAL 2. FUTURE SUBADVISORY AGREEMENTS WITHOUT VARIABLE ANNUITY CONTRACT
OWNER VOTE
Each Account proposes, to the extent permitted by an exemption granted by
the SEC and subject to approval by the Account's Board of Managers, to permit
TAMIC to enter into new or amended agreements with any subadviser with respect
to the Account without obtaining shareholder approval of such agreements, and to
permit such subadvisers to manage the assets of the Account pursuant to such
subadvisory agreements.
The 1940 Act generally provides that an investment adviser or subadviser to
a mutual fund may act as such only pursuant to a written agreement that has been
approved by a vote of the fund's shareholders, as well as by a vote of a
majority of the directors of the fund who are not parties to such agreement or
interested persons of any party to such agreement. Certain MetLife subsidiaries,
which are registered with the SEC as "investment advisers", however, have
received from the SEC an exemption from the shareholder approval voting
requirement in certain circumstances (the "SEC Exemption").
Upon becoming an indirect subsidiary of MetLife, the SEC exemption would
also apply to TAMIC and, subject to certain conditions, any Account advised by
TAMIC. Under the SEC Exemption, TAMIC would be permitted, under specified
conditions, to enter into new and amended subadvisory agreements for the
management of an Account, including agreements with new subadvisers and
agreements with existing subadvisers if there is a material change in the terms
of the subadvisory agreement, or if there is an "assignment," as defined in the
1940 Act, or other event causing termination of the existing subadvisory
agreement, without obtaining the approval of the Account's shareholders (the
Contract Owners) of such new or amended sub-advisory agreement. Such agreements
must nevertheless be approved by the Board of Managers, in accordance with the
requirements of the 1940 Act. One of the conditions of the SEC Exemption is that
within 90 days after entering into a new or amended subadvisory agreement
without Contract Owner approval, the Account must provide to Contract Owners an
information statement setting forth substantially the information that would be
required to be contained in a proxy statement for a meeting of Contract Owners
to vote on the approval of the agreement. Furthermore, the Account would still
require Contract Owner approval to materially amend its investment advisory
agreement with TAMIC (including any amendment to raise the management fee rate
payable under such agreement) or to enter into a new investment advisory
agreement with TAMIC or any other adviser.
The SEC has proposed a new Rule 15a-5 under the 1940 Act which would codify
the relief granted by the SEC Exemption. While the proposed rule generally
contains the same conditions as the SEC exemption obtained by MetLife, there are
some differences. The conditions of the new Rule would likely supersede the
conditions of the SEC exemption obtained by MetLife. As proposed, the most
significant difference in the conditions of the proposed new Rule is that the
name of each Account must have the investment adviser's name precede the name of
the subadviser, if the subadviser's name is included in the name of the Account.
To the extent that the Rule as finally adopted has this or other
-15-
different conditions, TAMIC and the Accounts will likely have to comply with
this and any other different conditions contained in the final version of the
Rule as adopted by the SEC.
The Accounts are requesting Contract Owner approval of this Proposal for
several reasons. As described under Proposal 1, the Accounts can utilize an
adviser/subadviser management structure, where TAMIC acts as each Account's
investment adviser, and delegating the day-to-day portfolio management to a
subadviser. (Currently TAMIC has retained a subadviser only for Account GIS,
but, as described above under Proposal 1, TAMIC is considering hiring a
subadviser, Salomon, for Account QB and Account MP.) Under such a structure, the
Account's subadviser would act in a capacity similar to that of the portfolio
manager in a more traditional structure that does not involve a subadviser.
Specifically, the Account's subadviser, like a portfolio manager in a more
traditional mutual fund advisory structure, manages the Account under the
oversight and supervision of the Account's adviser. If an Account were to change
subadvisers, TAMIC would continue in its role as adviser and would continue to
exercise oversight and supervision of the Account's investment affairs as
conducted by the new subadviser. Changing the Account's subadviser is,
therefore, analogous to the adviser's replacing the portfolio manager of a
single-manager managed fund who is employed by the adviser, which does not
require shareholder approval under the 1940 Act.
In addition, given the Account's management structure, the shareholder
approval requirement under the 1940 Act may cause an Account's Contract Owners
to incur unnecessary expenses and could hinder the prompt implementation of
subadvisory changes that are in the best interest of the Contract Owners, such
as prompt removal of a subadviser if circumstances warrant such removal. The
Managers believe that without the ability to promptly employ or re-employ a
subadviser, investors' expectations may be frustrated and an Account and its
Contract Owners could be disadvantaged under certain circumstances. These
circumstances include: (a) where a sub-adviser has been terminated because its
performance was unsatisfactory or its retention was otherwise deemed
inadvisable, (b) where a subadviser has resigned and (c) where there has been an
"assignment" (i.e., a change in the actual control or management of a
subadviser) or other event causing the termination of a subadvisory agreement.
In the absence of an exemption, to obtain the shareholder approval required
by the 1940 Act for a subadvisory agreement, an Account would need to convene a
Contract Owners' meeting, which invariably involves considerable delay and
expense. Where TAMIC, as adviser, has recommended replacement of a subadviser,
and the Managers have determined that such replacement is necessary or
appropriate, the Account could receive less than satisfactory subadvisory
services prior to the time that an agreement with a new subadviser is approved
by the Contract Owners. Also, in that situation or where there has been an
unexpected resignation or change in control of a subadviser (events which, in
many cases, are beyond the control of the Account), the Account may be forced to
operate with a less than satisfactory subadviser for some period of time. In
such circumstances, without the ability to engage a new subadviser promptly,
TAMIC, as the adviser, might have to assume direct responsibility on a temporary
basis for management of the assets previously assigned to a subadviser.
If this manager of managers Proposal is approved by the Shareholders at the
Meeting, it is the present intention of MetLife and TAMIC to use the authority
granted by the exemption to retain the present subadviser of Account GIS, and,
as previously discussed, hire Salomon to be the subadviser for Accounts QB and
MM.
If the MetLife Transaction is not consummated, then TAMIC will not have the
authority to enter into new or amended agreements without Contract Owner
approval, since the SEC Exemption only
-16-
applies to affiliates of MetLife. However, TAMIC would have the ability, subject
to Board approval, to apply to the SEC for its own exemption as well as the
ability to utilize proposed Rule 15a-5 if and when it is actually adopted,
without seeking any additional Contract Owner approval.
If the Contract Owners of an Account do not approve this Proposal, the
Board of Managers of the Account will consider such alternative actions as may
be in the best interests of the Account.
THE BOARD OF MANAGERS OF EACH ACCOUNT, INCLUDING ALL OF THE INDEPENDENT
MANAGERS, UNANIMOUSLY RECOMMENDS THAT THE CONTRACT OWNERS VOTE TO APPROVE THE
PROPOSED GRANT OF AUTHORITY TO PERMIT TAMIC TO ENTER INTO NEW OR AMENDED
AGREEMENTS WITH SUBADVISERS WITH RESPECT TO THE ACCOUNTS WITHOUT OBTAINING
CONTRACT OWNER APPROVAL OF SUCH AGREEMENTS, AND TO PERMIT SUCH SUBADVISERS TO
MANAGE THE ASSETS OF THE ACCOUNTS PURSUANT TO SUCH SUBADVISORY AGREEMENTS.
PROPOSAL 3. ELECTION OF NEW MEMBER OF BOARD OF MANAGERS.
Ms. Elizabeth Forget, a [INSERT TITLE] of MetLife, has been nominated by
the Board of Managers, pursuant to a recommendation of the Nominating and
Administration Committee of the Board, to serve as a member of the Board of
Managers of each Account, effective on the MetLife Closing Date. If elected by
the Contract Owners at the Meeting, Ms. Forget will replace Mr. Jay Gerken, who,
in connection with the sale of TAMIC to MetLife described in Proposal 1 above,
will resign as a member of the Board. Ms. Forget will serve until her successor
is elected and qualified. It is expected that if so elected, Ms. Forget would
also replace Mr. Gerken as Chairman, President and CEO of the Accounts. Ms.
Forget's current principal occupation and other relevant circumstances are set
forth in the table below.
If the MetLife Transaction is not consummated, then this Proposal will not
take effect. In that event, Ms. Forget will not become a member of the Board of
Managers or an officer of the Accounts .
For the year ended December 31, 2004, the Board of Managers met times. Each
member of the Board attended at least seventy-five percent of the Board
meetings.
Contract Owners of the Account can send communications to the Board of
Managers by submitting them to the Board in care of the Secretary to the Board
listed below, using the address on the cover page of this Joint Proxy Statement.
The following tables give information about each member of the Board of
Managers and the officers of the Accounts. As with Mr. Gerken, it is expected
that the Board of Managers of the Accounts will be replacing the current
officers with new officers affiliated with MetLife as part of the transactions
described above in Proposal 1.
-17-
OFFICERS AND INTERESTED MANAGERS
NUMBER OF
PORTFOLIOS
IN
TERM OF ACCOUNT OTHER
POSITION(S) OFFICE AND COMPLEX DIRECTORSHIPS OF
HELD WITH LENGTH OF PRINCIPAL OCCUPATION DURING LAST FIVE OVERSEEN BY PUBLIC COMPANIES
NAME ADDRESS AND AGE ACCOUNTS TIME SERVED YEARS MANAGER HELD BY MANAGER
- --------------------- -------------- ----------- -------------------------------------------- ----------- ----------------
*R. Jay Gerken Chairman, Since 2002 Managing Director (1989 to present) of N/A N/A
399 Park Avenue President, CEO Citigroup Global Markets Inc.; Chairman,
New York, NY and Manager President andCEO of Smith Barney Account
Age 53 Management LLC; Travelers Investment
Adviser, Inc. and CitiFund Management Inc.
Chairman, Chief Executive Officer and
President, Board of Managers
(2002-present), six Variable Annuity
Separate Accounts of The Travelers
Insurance Company+; Chairman, Chief
Executive Officer and Trustee
(2002-present), five mutual funds
sponsored by The Travelers Insurance
Company.++
*Elizabeth Forget Nominee as New
[address] Manager
Ernest J. Wright Assistant Since 2004 Vice President and Secretary N/A N/A
One Cityplace Secretary to (1996-present), Assistant Secretary
Hartford, Connecticut the Board (1994-1996), Counsel (1987- present),
Age 64 The Travelers Insurance Company; Secretary
(1994 to 2004), Assistant Secretary
(2004 to present), six Variable Annuity
Separate Accounts of The Travelers
Insurance Company+; Assistant Secretary
(2004-present), five mutual funds
sponsored by The Travelers Insurance
Company; Secretary (1994-2004).++
Kathleen A. McGah Secretary to Since 2004 Deputy General Counsel (1999 - present), N/A N/A
One Cityplace the Board Assistant Secretary (1995-present), The
Hartford, Connecticut Travelers Insurance Company; Assistant
Age 54 Secretary (1995 to 2004), Secretary
(2004 to present), six Variable Annuity
Separate Accounts of The Travelers
Insurance Company+; Assistant Secretary,
(1995 to 2004); Secretary (2002-present),
five mutual funds sponsored by The
Travelers Insurance Company, Assistant
Secretary (1995-2004);.++ Prior to January
1995, Counsel, ITT Hartford Life Insurance
Company.
David A. Golino Principal Since 1998 Vice President and Controller (1999 - N/A N/A
One Cityplace Accounting present;, The Travelers Insurance Company,
Hartford, CT Officer Second Vice President (1996-1999); Principal
Age 42 Accounting Officer (1998 to present); six
Variable Annuity Separate Accounts of The
Travelers Insurance Company.+
William D. Wilcox Chief AML Since 2002 Counsel and Chief Compliance Officer (1999 N/A N/A
One Cityplace Compliance - present); The Travelers Insurance Company;
Hartford, CT Officer Chief AML Compliance (2002-present), six
Age 40 Variable Annuity Separate Accounts of The
Travelers Insurance Company,+ Chief
Compliance Officer (2002-present); five
mutual funds sponsored by The Travelers
Insurance Company.++
-18-
NON-INTERESTED MANAGERS
NUMBER OF
PORTFOLIOS
IN
TERM OF ACCOUNT OTHER
POSITION(S) OFFICE AND COMPLEX DIRECTORSHIPS OF
HELD WITH LENGTH OF PRINCIPAL OCCUPATION DURING LAST FIVE OVERSEEN BY PUBLIC COMPANIES
NAME ADDRESS AND AGE ACCOUNTS TIME SERVED YEARS MANAGER HELD BY MANAGER
- --------------------- -------------- ----------- -------------------------------------------- ----------- ----------------
Robert E. McGill, III Manager Since 1974 Retired manufacturing executive. Director 40+++ None
295 Hancock Street (1995-2000), Chemfab Corporation
Williamstown, MA (specialty materials manufacturer);
Age 73 Director (1999-2001), Ravenwood Winery,
Inc.; Director (1999-2003), Lydall Inc.
(manufacturer of fiber materials); Member,
Board of Managers (1974-present), six
Variable Annuity Separate Accounts of The
Travelers Insurance Company+; Trustee
(1990-present), five mutual funds
sponsored by The Travelers Insurance
Company.++
Lewis Mandell Manager Since 1990 Professor of Finance and Managerial 40+++ Director (2000-
Manager (Trust) Economics, University at Buffalo since present),
160 Jacobs Hall 1998. Dean, School of Management Delaware North
Buffalo, NY (1998-2001), University at Buffalo; Corp.
Age 61 Member, Board of Managers (1990-present), (hospitality
six Variable Annuity Separate Accounts of business)
The Travelers Insurance Company+; Trustee
(1990-present), five mutual funds
sponsored by The Travelers Insurance
Company.++
Frances M. Hawk, Manager Since 1991 Private Investor (1997-present). Member, 40+++ None
CFA, CFP Board of Managers (1991-present), six
Manager Variable Annuity Separate Accounts of The
108 Oxford Hill Lane Travelers Insurance Company+; Trustee
Downingtown, PA (1991-present), five mutual funds
Age 56 sponsored by The Travelers Insurance
Company.++
- ------------
* Mr. Gerken is an "interested person" within the meaning of the 1940
Act, as amended, by virtue of his position as Managing Director of Citigroup
Global Markets Inc., an indirect wholly owned subsidiary of Citigroup, and his
ownership of shares and options to purchase shares of Citigroup, the
-19-
indirect parent of The Travelers Insurance Company. Ms. Forget, if elected as a
Manager, will be an "interested person" by virtue of her position as of MetLife.
+ The six Variable Annuity Separate Accounts are: The Travelers Growth
and Income Stock Account for Variable Annuities, The Travelers Quality Bond
Account for Variable Annuities, The Travelers Money Market Account for Variable
Annuities, Tactical Growth and Income Stock Account for Variable Annuities,
Tactical Short-Term Bond Account for Variable Annuities and Tactical Aggressive
Stock Account for Variable Annuities.
++ The five Mutual Funds are: Capital Appreciation Fund, Money Market
Portfolio, High Yield Bond Trust, Managed Assets Trust and The Travelers Series
Trust.
+++ Seven of these 40 portfolios have not yet commenced operations.
The Independent Managers will continue to be independent after the MetLife
Closing Date.
Effective January 1, 2003, Mr. Knight Edwards retired from his position on
the Board. He remains as an Emeritus Manager. An Emeritus Manager is permitted
to attend meetings, but has no voting powers.
COMMITTEES
To operate more efficiently, the Board has established two operating
committees. The Nominating and Administration Committee recommends candidates
for the nomination as independent members of the Board. The Committee also
periodically reviews Board governance procedures, composition of the Board, and
compensation for the Board of Managers, and the Committee monitors the
performance of legal counsel employed by the Accounts and the Independent
Managers.
The Nominating and Administration Committee will consider nominees
recommendations by Contract Owners. Such recommendations should be submitted to
the Account in care of The Travelers Insurance Company, using the address on the
cover page of this Joint Proxy Statement. Biographical and occupational
information about the candidate must be included, as well as the written consent
of the candidate to serve on the Board if elected.
In addition to Contract Owner recommendations, recommendations for
candidates for Independent Manager may be made by any of the Managers or by
management of the Accounts or TIC. In evaluating candidates for nomination to
the Board of Managers of the Account as Independent Managers, the Nominating and
Administration Committee requires that the candidate be independent in terms of
both the letter and spirit of the 1940 Act. The Committee will consider the
effect of any relationships beyond those set forth in the 1940 Act that might
impair independence. The Committee will consider whether it may be appropriate
to add individuals with different backgrounds or skill sets from those on the
Board already.
For the year ended December 31, 2004, the Nominating and Administration
Committee met one times. The charter of the Committee is attached hereto as
Appendix B. It not available on any website.
The Audit Committee monitors the appointment, compensation and termination
of the Accounts' independent auditors. The Committee also monitors the overall
quality of the Accounts' financial reports and other financial information, the
independence and audit work of the Accounts' independent auditors
-20-
and the Accounts' financial reporting policies, practices and internal controls.
For the year ended December 31, 2004, the Audit Committee met two times.
For the year ended December 31, 2004, the members of the Nominating and
Administration Committee, and the Audit Committee were Robert E. McGill III,
Lewis Mandell, and Frances M. Hawk. Managers do not receive any additional
compensation for their committee services.
COMPENSATION
Members of the Board who are also officers or employees of Citigroup Inc.
or its subsidiaries (after the MetLife Closing Date, of MetLife, Inc. or its
subsidiaries) are not entitled to any fee for their services to the Account. The
Independent Managers receive an aggregate retainer of $30,000 for service on the
Boards of the five mutual funds sponsored by TIC and the six Variable Annuity
Separate Accounts (including the Accounts) established by TIC. They also receive
an aggregate fee of $3,500 for each meeting of such Boards attended and an
additional fee of $1,000 for the second and each subsequent day of a regular
scheduled meeting. Board Members with 10 years of service may agree to provide
services as an emeritus manager at age 72. Upon reaching 80 years of age, a
Manager must elect status as a emeritus manager. An emeritus manager will
receive 50% of the annual retainer and 50% of meeting fees, if attended, but in
no event for more than 10 years. The chart below shows the compensation paid to
Board Members for the year ended December 31, 2004. Mr. Knight Edwards, as
Emeritus Manager, was paid $3,175 for the year ended December 31, 2004.
COMPENSATION TABLE
Interested Managers
Pension or Total Compensation
Aggregate Retirement Benefits From Account and
Name of Person, Compensation From Accrued As Part of Account Complex
Position Each Account(1) Account Expenses Paid to Managers
- --------------------- ----------------- ------------------- ------------------
Elizabeth Forget(2)
Chairman and Manager N/A N/A N/A
Independent Managers
Pension or Total Compensation
Aggregate Retirement Benefits From Account and
Name of Person, Compensation From Accrued As Part of Account Complex
Position Each Account(1) Account Expenses Paid to Managers
- --------------------- ----------------- ------------------- ------------------
Robert E. McGill, III
Manager $ 2,634.62 N/A $ 68,500(3)
Lewis Mandell
Manager $ 1,923.08 N/A $ 50,000
Frances M. Hawk, CFA,
CFP
Manager $ 2,096.15 N/A $ 54,500
-21-
- ----------
(1) No compensation was deferred for any Manager or Officer under a
deferred compensation plan.
(2) Ms. Forget was not a member of the Board of Managers during 2004.
(3) Mr. McGill received additional compensation for attending meetings of a
task force of the directors/managers of various Citigroup-sponsored investment
companies as a representative of the Independent Managers of the Accounts.
The table below sets forth the dollar range of equity securities in the
Accounts beneficially owned by a Manager, and, on an aggregate basis, in all
registered investment companies overseen by a Manager in the complex of funds,
as of December 31, 2004.
Aggregate Dollar Range of
Equity Securities in all
Registered Investment
Companies overseen by
Dollar Range of Equity Managers in Family of
Manager Securities in the Accounts Investment Companies
- --------------------- -------------------------- ---------------------------
Elizabeth Forget None None
Robert E. McGill, III None None
Lewis Mandell None None
Frances M. Hawk None None
THE BOARD OF MANAGERS OF EACH ACCOUNT UNANIMOUSLY RECOMMENDS THAT THE CONTRACT
OWNERS VOTE TO ELECT THE NOMINEE AS A MEMBER OF THE BOARD OF MANAGERS.
VOTING INFORMATION
Contract Owners may vote (1) by mail: simply enclose the executed proxy
card in the postage-paid envelope found within the proxy package; (2) by
Internet: access the website listed on the proxy card; you will need the control
number located on the proxy card; or (3) by fax; dial the toll-free number
listed on the proxy card; you will need the control number listed on the proxy
card. If the Account records votes by fax or through the Internet, it will use
procedures reasonably designed to authenticate contract owners' identities, to
allow contract owners to vote units in accordance with their instructions,
-22-
and to confirm that their instructions have been properly recorded. Proxies
voted by fax or through the Internet may be revoked at any time before they are
voted as described below.
Twenty percent of the outstanding units of an Account represented in person
or by proxy must be present at the Meeting to constitute a quorum. If a quorum
is not present at the Meeting, or if a quorum is present but, at the Meeting,
sufficient votes to approve the Proposals are not received, the persons with
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any adjournment will require the affirmative vote of a
majority of the units represented at the Meeting in person or by proxy. Based on
voting instructions received, proxies will vote in favor of such adjournment
those proxies that are in favor of a Proposal, will vote against any
adjournments those proxies that are against the Proposal, and will abstain from
voting with respect to any adjournment those proxies that are marked to abstain
in connection with the Proposal. Abstentions will be counted as present for
purposes of determining a quorum, but will not be counted as voting with respect
to those proposals from which Contract Owners abstain.
Except for the election of the new Manager, approval of a Proposal by an
Account's Contract Owners requires the affirmative vote of the holders of the
lesser of (a) 67% or more of the voting securities present at the Meeting or
represented by proxy if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy or (b) more than 50% of the
outstanding voting securities of the Account. Contract Owners of record are
entitled to one vote for each full unit owned, with a fractional vote for each
fractional unit. Under the Rules and Regulations for each Account, the
affirmative vote of a plurality of the units of the Account present and entitled
to vote is required to elect a Manager.
The Board has fixed April 15, 2005 as the record date for determining
Contract Owners entitled to receive notice of and to vote at the Meetings. To be
counted, TIC must receive an owner's properly executed proxy at the Accounts'
office by 5:00 p.m. Eastern time on June 23, 2005. Contract owners may revoke
previously submitted proxies given to TIC by notifying TIC in writing at any
time before 5:00 p.m. (Eastern time) on June 23, 2005 or by attending and voting
in person at the Meetings. The expenses of soliciting the proxy will be borne
50% by MetLife and 50% by [CITIGROUP ENTITY]. The solicitation will be made
primarily by mail, but TIC and its affiliates may make telephone, electronic, or
oral communications to contract owners.
The name, address and percentage ownership of the persons who owned
beneficially more than 5% of a Account, and the percentage of such ownership,
are as follows:
Percentage of Account Owned
Name and Address Account on Record Date
- ---------------- ------- ---------------------------
The Managers and Officers of each Account beneficially owned in the
aggregate less than 1% of the Account.
-23-
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP ("KPMG") currently serves as the independent registered public
accounting firm for the Accounts. As a result of insurance services provided to
KPMG by MetLife, KPMG is not considered independent of MetLife and will not be
permitted to serve as the independent registered public accounting firm for the
Accounts after the MetLife Transaction. The Board of Managers of each of the
Accounts intends to select a successor accounting firm in the near future.
KPMG has no direct or material indirect interest in an Account.
Representatives of KPMG will not be present at the Meeting.
To the extent required by applicable regulations, pre-approval by the Audit
Committee of the Board is needed for all audit and permissible non-audit
services rendered by KPMG to each Account and all permissible non-audit services
rendered by KPMG to TIC and any entity controlling, controlled by or under
common control with TIC that provides ongoing services to an Account (each, a
"Service Affiliate") if the services relate directly to the operations and
financial reporting of such Account. Pre-approval is currently on an
engagement-by-engagement basis.
Schedule A attached hereto includes tables that set forth for each Account,
for each Account's two most recent fiscal years, the fees billed by KPMG for (a)
all audit and non-audit services provided directly to the Account and (b) those
non-audit services provided to the Account's Service Affiliates that relate
directly to the Account's operations and financial reporting under the following
captions:
(i) Audit Fees - fees related to the audit and review of the financial
statements included in annual reports and registration statements, and
other services that are normally provided in connection with statutory and
regulatory filings or engagements.
(ii) Audit-Related Fees - fees related to assurance and related services
that are reasonably related to the performance of the audit or review of
financial statements, but not reported under "Audit Fees," including
accounting consultations, agreed-upon procedure reports, attestation
reports, comfort letters and internal control reviews.
(iii) Tax Fees - fees associated with tax compliance, tax advice and tax
planning, including services relating to the filing or amendment of
federal, state or local income tax returns, regulated investment company
qualification reviews and tax distribution and analysis reviews.
(iv) All Other Fees - fees for products and services provided to the
Account by KPMG other than those reported under "Audit Fees,"
"Audit-Related Fees" and "Tax Fees."
Schedule A attached hereto also sets forth the aggregate fees billed by
KPMG, for each Account's two most recent fiscal years, for non-audit services
rendered to each Account and to each Account's Service Affiliates.
The Audit Committee has considered whether the provision by KPMG of
non-audit services to the Account's Service Affiliates that were not
pre-approved by the Audit Committee (because such services were provided prior
to the effectiveness of SEC rules requiring pre-approval or because such
services did not relate directly to the operations and financial reporting of
the Account) was compatible with maintaining the independence of KPMG as the
Account's principal auditor.
-24-
OTHER INFORMATION
Travelers Distribution LLC, One Cityplace, Hartford, Connecticut,
06103-3415, is the principal underwriter for each of the Accounts. TIC is the
administrator of each of the Accounts.
COST OF SOLICITATION
The cost of soliciting these proxies will be borne 50% by MetLife and 50%
by [CITIGROUP ENTITY]. Proxies may be solicited by directors, officers or
employees of TIC on behalf of the Board of Managers of each Account, either in
person, by telephone or by telegram.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters come before the Meeting, it is each Board's
intention that proxies will vote on such matters in accordance with the judgment
of the proxy.
CONTRACT OWNER INQUIRIES
Contract Owner inquiries may be addressed to an Account in writing at the
address on the cover page of this Proxy Statement or by telephoning
1-800-842-9368.
* * *
CONTRACT OWNERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXIES AND RETURN THEM IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
-25-
APPENDIX A-1
(FORM OF NEW INVESTMENT ADVISORY AGREEMENT FOR ACCOUNT GIS)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of this 30th day of June, 2005,
between Travelers Asset Management International Company LLC, a limited
liability company duly organized and existing under the law of the state of New
York (hereinafter "TAMIC") and The Travelers Growth and Income Stock Account for
Variable Annuities (hereinafter "Account GIS"), a separate account of The
Travelers Insurance Company established by authority of a resolution of The
Travelers Insurance Company's Board of Directors on September 22, 1967, pursuant
to Public Act 529 of the 1967 Connecticut General Assembly.
WITNESSETH:
WHEREAS, Account GIS and TAMIC wish to enter into an agreement setting
forth the terms upon which TAMIC will perform certain services for Account GIS.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Account GIS hereby employs TAMIC to manage the investment and reinvestment
of the assets of Account GIS and to perform the other services herein set forth,
subject to the supervision of the Board of Managers of Account GIS (hereinafter
the "Board") for the period and on the terms herein set forth. TAMIC hereby
accepts such employment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth for the
compensation herein provided.
2. In carrying out these obligations to manage the investment and reinvestment
of the assets of Account GIS, TAMIC shall:
a. obtain and evaluate pertinent economic, statistical and financial data
and other information relevant to the investment policy of Account GIS,
affecting the economy generally and individual companies or industries, the
securities of which are included in Account GIS's portfolio or are under
consideration for inclusion therein;
b. be authorized to purchase supplemental research and other services from
brokers at additional cost to Account GIS;
c. regularly furnish to the Board recommendations with respect to any
investment program for approval, modification or rejection by the Board;
d. take such steps as are necessary to implement the investment program
approved by the Board;
e. regularly report to the Board with respect to implementation of the
approved investment program and any other activities in connection with the
administration of the assets of Account GIS; and
f. vote proxies on securities held by the Account or delegate such
responsibility to a sub-adviser appointed pursuant to this Agreement. TAMIC
represents that it or its delegee has adopted and implemented written
policies and procedures reasonably designed to ensure that it will vote
proxies in the best interest of the Account and its unit holders, which
policies and procedures describe how TAMIC or its delegee addresses
material conflicts of interest between its interests and those of the
Account with respect to proxy voting. TAMIC shall furnish the Account with
such information reasonably requested by the Account, in such form as may
be requested, as is necessary (1) for a summary description of TAMIC's or
its delegee's proxy voting policies and procedures to be included in the
registration statement with respect to the Account, and (2) for the proxy
voting record for the Account to be filed with the SEC in accordance with
the requirement of Form N-PX (or any successor form).
3. TAMIC may engage a sub-adviser to furnish investment management information
and advice to assist TAMIC in carrying out its responsibilities under this
Agreement. TAMIC shall remain responsible for ensuring that each sub-adviser
conducts its operations in a manner consistent with the terms of this Agreement
4. Any investment program undertaken by TAMIC pursuant to this Agreement and any
other activities undertaken by TAMIC on behalf of Account GIS shall at all times
be subject to any directives of the Board or any duly constituted committee
thereof acting pursuant to like authority.
5. For the services rendered hereunder, TAMIC will receive an amount equivalent
on an annual basis to the following:
AGGREGATE
ANNUAL NET ASSET
MANAGEMENT FEE VALUE OF THE ACCOUNT
--------------------- --------------------
0.65% of the first $ 500,000,000, plus
0.55% of the next $ 500,000,000, plus
0.50% of the next $ 500,000,000, plus
0.45% of the next $ 500,000,000, plus
0.40% of amounts over $ 2,000,000,000
The advisory fees will be deducted on each valuation date.
6. The services of TAMIC to Account GIS hereunder are not to be deemed exclusive
and TAMIC shall be free to render similar services to others so long as its
services hereunder are not impaired or interfered with thereby.
7. If approved by a vote of a majority of the outstanding voting securities of
Account GIS (as defined in the Investment Company Act of 1940), this Investment
Advisory Agreement:
a. may not be terminated by TAMIC, without the prior approval of a new
Investment Advisory Agreement by a vote of a majority of the outstanding
voting securities of Account GIS, and shall be subject to termination,
without the payment of any penalty, upon sixty days' written notice to the
investment adviser, by the Board of Managers or by a vote of a majority of
the outstanding voting securities of Account GIS;
b. shall not be amended without prior approval of a majority of the
outstanding voting securities of Account GIS;
c. shall automatically terminate upon assignment by either party; and
d. shall continue in effect for a period of more than two years from the
date of its execution, only so long as such continuance is specifically
approved (i) at least annually by a vote of a majority of the Board of
Managers who are not parties to, or interested persons of any party to,
such agreement, cast in person at a meeting called for the purpose of
voting on such approval and at which the Board has been furnished such
information as may be reasonably necessary to evaluate the terms of said
agreement, or (ii) by a vote of a majority of the outstanding voting
securities of Account GIS.
8. This Investment Advisory Agreement is subject to the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Investment Advisory
Agreement to be signed by their respective officials thereunto duly authorized
and seals to be affixed, in the case of TAMIC, as of the day and year first
above written.
THE TRAVELERS GROWTH AND INCOME STOCK
ACCOUNT FOR VARIABLE ANNUITIES
By:
-------------------
Chairman, Board of Managers
WITNESS:
- --------------------------
Secretary, Board of Managers
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
-------------------
President
ATTEST: (Seal)
- ------------------------
Corporate Secretary
APPENDIX A-2
(FORM OF NEW INVESTMENT ADVISORY AGREEMENT FOR ACCOUNT QB)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of this 30th day of June, 2005,
between Travelers Asset Management International Company LLC, a limited
liability company duly organized and existing under the law of the state of New
York (hereinafter "TAMIC") and The Travelers Quality Bond Account for Variable
Annuities (hereinafter "Account QB"), a separate account of The Travelers
Insurance Company established by its President and Chief Executive Officer on
July 29, 1974, pursuant to a resolution of The Travelers Insurance Company's
Board of Directors on August 4, 1967, pursuant to Section 38-154a of the
Connecticut General Statutes.
WITNESSETH:
WHEREAS, Account QB and TAMIC wish to enter into an agreement setting forth
the terms upon which TAMIC will perform certain services for Account QB.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Account QB hereby employs TAMIC to manage the investment and reinvestment of
the assets of Account QB and to perform the other services herein set forth,
subject to the supervision of the Board of Managers of Account QB (hereinafter
the "Board") for the period and on the terms herein set forth. TAMIC hereby
accepts such employment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth for the
compensation herein provided.
2. In carrying out these obligations to manage the investment and reinvestment
of the assets of Account QB, TAMIC shall:
a. obtain and evaluate pertinent economic, statistical and financial data
and other information relevant to the investment policy of Account QB,
affecting the economy generally and individual companies or industries, the
securities of which are included in Account QB's portfolio or are under
consideration for inclusion therein;
b. be authorized to purchase supplemental research and other services from
brokers at additional cost to Account QB;
c. regularly furnish to the Board recommendations with respect to any
investment program for approval, modification or rejection by the Board;
d. take such steps as are necessary to implement the investment program
approved by the Board;
e. regularly report to the Board with respect to implementation of the
approved investment program and any other activities in connection with the
administration of the assets of Account QB; and
f. vote proxies on securities held by the Account or delegate such
responsibility to a sub-adviser appointed pursuant to this Agreement. TAMIC
represents that it or its delegee has adopted and implemented written
policies and procedures reasonably designed to ensure that it will vote
proxies in the best interest of the Account and its unit holders, which
policies and procedures describe how TAMIC or its delegee addresses
material conflicts of interest between its interests and those of the
Account with respect to proxy voting. TAMIC shall furnish the Account with
such information reasonably requested by the Account, in such form as may
be requested, as is necessary (1) for a summary description of TAMIC's or
its delegee's proxy voting policies and procedures to be included in the
registration statement with respect to the Account, and (2) for the proxy
voting record for the Account to be filed with the SEC in accordance with
the requirement of Form N-PX (or any successor form).
3. TAMIC may engage a sub-adviser to furnish investment management information
and advice to assist TAMIC in carrying out its responsibilities under this
Agreement. TAMIC shall remain responsible for ensuring that each sub-adviser
conducts its operations in a manner consistent with the terms of this Agreement
4. Any investment program undertaken by TAMIC pursuant to this Agreement and any
other activities undertaken by TAMIC on behalf of Account QB shall at all times
be subject to any directives of the Board or any duly constituted committee
thereof acting pursuant to like authority.
5. For the services rendered hereunder, TAMIC will receive an amount equivalent
on an annual basis to 0.3233% of the average daily net assets of Account QB,
such fees to be deducted on each valuation date.
6. The services of TAMIC to Account QB hereunder are not to be deemed exclusive
and TAMIC shall be free to render similar services to others so long as its
services hereunder are not impaired or interfered with thereby.
7. If approved by a vote of a majority of the outstanding voting securities of
Account QB (as defined in the Investment Company Act of 1940), this Investment
Advisory Agreement:
a. may not be terminated by TAMIC, without the prior approval of a new
Investment Advisory Agreement by a vote of a majority of the outstanding
voting securities of Account QB, and shall be subject to termination,
without the payment of any penalty, upon sixty days' written notice to the
investment adviser, by the Board of Managers or by a vote of a majority of
the outstanding voting securities of Account QB;
b. shall not be amended without prior approval of a majority of the
outstanding voting securities of Account QB;
c. shall automatically terminate upon assignment by either party; and
d. shall continue in effect for a period of more than two years from the
date of its execution, only so long as such continuance is specifically
approved (i) at least annually by a vote of a majority of the Board of
Managers who are not parties to, or interested persons of any party to,
such agreement, cast in person at a meeting called for the purpose of
voting on such approval and at which the Board has been furnished such
information as may be reasonably necessary to evaluate the terms of said
agreement, or (ii) by a vote of a majority of the outstanding voting
securities of Account QB.
8. This Investment Advisory Agreement is subject to the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Investment Advisory
Agreement to be signed by their respective officials thereunto duly authorized
and seals to be affixed, in the case of TAMIC, as of the day and year first
above written.
THE TRAVELERS QUALITY BOND
ACCOUNT FOR VARIABLE ANNUITIES
By:
--------------------
Chairman, Board of Managers
WITNESS:
- ---------------------
Secretary, Board of Managers
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
--------------------
President
ATTEST: (Seal)
- ---------------------
Corporate Secretary
APPENDIX A-3
(FORM OF NEW INVESTMENT ADVISORY AGREEMENT FOR ACCOUNT MM)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of this 30th day of June, 2005,
between Travelers Asset Management International Company LLC, a limited
liability company duly organized and existing under the law of the state of New
York (hereinafter "TAMIC") and The Travelers Money Market Account for Variable
Annuities (hereinafter "Account MM"), a separate account of The Travelers
Insurance Company established by its President and Chief Executive Officer on
December 29, 1981, pursuant to a resolution of The Travelers Insurance Company's
Board of Directors on August 4, 1967, pursuant to Section 38-154a of the
Connecticut General Statutes.
WITNESSETH:
WHEREAS, Account MM and TAMIC wish to enter into an agreement setting forth
the terms upon which TAMIC will perform certain services for Account MM.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Account MM hereby employs TAMIC to manage the investment and reinvestment
of the assets of Account MM and to perform the other services herein set forth,
subject to the supervision of the Board of Managers of Account MM (hereinafter
the "Board") for the period and on the terms herein set forth. TAMIC hereby
accepts such employment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth for the
compensation herein provided.
2. In carrying out these obligations to manage the investment and reinvestment
of the assets of Account MM, TAMIC shall:
a. obtain and evaluate pertinent economic, statistical and financial data
and other information relevant to the investment policy of Account MM,
affecting the economy generally and individual companies or industries, the
securities of which are included in Account MM's portfolio or are under
consideration for inclusion therein;
b. be authorized to purchase supplemental research and other services from
brokers at additional cost to Account MM;
c. regularly furnish to the Board recommendations with respect to any
investment program for approval, modification or rejection by the Board;
d. take such steps as are necessary to implement the investment program
approved by the Board;
e. regularly report to the Board with respect to implementation of the
approved investment program and any other activities in connection with the
administration of the assets of Account MM; and
f. vote proxies on securities held by the Account or delegate such
responsibility to a sub-adviser appointed pursuant to this Agreement. TAMIC
represents that it or its delegee has adopted and implemented written
policies and procedures reasonably designed to ensure that it will vote
proxies in the best interest of the Account and its unit holders, which
policies and procedures describe how TAMIC or its delegee addresses
material conflicts of interest between its interests and those of the
Account with respect to proxy voting. TAMIC shall furnish the Account with
such information reasonably requested by the Account, in such form as may
be requested, as is necessary (1) for a summary description of TAMIC's or
its delegee's proxy voting policies and procedures to be included in the
registration statement with respect to the Account, and (2) for the proxy
voting record for the Account to be filed with the SEC in accordance with
the requirement of Form N-PX (or any successor form).
3. TAMIC may engage a sub-adviser to furnish investment management information
and advice to assist TAMIC in carrying out its responsibilities under this
Agreement. TAMIC shall remain responsible for ensuring that each sub-adviser
conducts its operations in a manner consistent with the terms of this Agreement
4. Any investment program undertaken by TAMIC pursuant to this Agreement and any
other activities undertaken by TAMIC on behalf of Account MM shall at all times
be subject to any directives of the Board or any duly constituted committee
thereof acting pursuant to like authority.
5. For the services rendered hereunder, TAMIC will receive an amount equivalent
on an annual basis to 0.3233% of the average daily net assets of Account MM,
such fees to be deducted on each valuation date.
6. The services of TAMIC to Account MM hereunder are not to be deemed exclusive
and TAMIC shall be free to render similar services to others so long as its
services hereunder are not impaired or interfered with thereby.
7. If approved by a vote of a majority of the outstanding voting securities of
Account MM (as defined in the Investment Company Act of 1940), this Investment
Advisory Agreement:
a. may not be terminated by TAMIC, without the prior approval of a new
Investment Advisory Agreement by a vote of a majority of the outstanding voting
securities of Account MM, and shall be subject to termination, without the
payment of any penalty, upon sixty days' written notice to the investment
adviser, by the Board of Managers or by a vote of a majority of the outstanding
voting securities of Account MM;
b. shall not be amended without prior approval of a majority of the
outstanding voting securities of Account MM;
c. shall automatically terminate upon assignment by either party; and
d. shall continue in effect for a period of more than two years from the
date of its execution, only so long as such continuance is specifically approved
(i) at least annually by a vote of a majority of the Board of Managers who are
not parties to, or interested persons of any party to, such agreement, cast in
person at a meeting called for the purpose of voting on such approval and at
which the Board has been furnished such information as may be reasonably
necessary to evaluate the terms of said agreement, or (ii) by a vote of a
majority of the outstanding voting securities of Account MM.
8. This Investment Advisory Agreement is subject to the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Investment Advisory
Agreement to be signed by their respective officials thereunto duly authorized
and seals to be affixed, in the case of TAMIC, as of the day and year first
above written.
THE TRAVELERS MONEY MARKET
ACCOUNT FOR VARIABLE ANNUITIES
By:
-------------------
Chairman, Board of Managers
WITNESS:
- ---------------------------
Secretary, Board of Managers
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
--------------------
President
ATTEST: (Seal)
- -------------------------
Corporate Secretary
APPENDIX B
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
NOMINATING AND ADMINISTRATION COMMITTEE CHARTER
(a) Nominating and Administration Committee Membership
The Nominating and Administration Committee shall be composed entirely of
non-interested and independent trustees*.
(b) Board Nominations and Functions
1. The Committee shall nominate and elect candidates for "non-interested"
trustee membership on the Board of Trustees ("Board"). The Committee shall
evaluate candidates' qualifications for Board membership as non-interested
trustees and their independence from the Funds' manager and other principal
service providers. Persons selected must be non-interested and independent
in terms of both the letter and the spirit of the 1940 Act. The Committee
shall also consider the effect of any relationships beyond those delineated
in the 1940 Act that might impair independence, E.G., business, financial
or family relationships with managers or service providers.
2. The Committee shall periodically review Board governance procedures and
shall recommend any appropriate changes to the full Board.
3. The Committee shall periodically review the composition of the Board to
determine whether it may be appropriate to add individuals with different
backgrounds or skill sets from those already on the Board.
4. The Committee shall periodically review director compensation and shall
recommend any appropriate changes to the non-interested and independent
trustees as a group.
- ----------
* "Trustee" shall refer to both trustees and managers.
-26-
(c) Committee Nominations and Functions
1. The Committee shall make nominations for membership on all committees and
shall review committee assignments at least annually.
2. The Committee shall review as necessary the responsibilities of any
committees of the Board, whether there is a continuing need for each
committee, whether there is a need for additional committees of the Board,
and whether committees should be combined or reorganized. The Committee
shall make recommendations for any such action to the full Board.
(d) Other Powers and Responsibilities
1. The Committee shall monitor the performance of legal counsel employed by
the Funds and the non-interested and independent trustees, and shall be
responsible for the supervision of counsel for the non-interested and
independent trustees.
2. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to retain special
counsel and other experts or consultants at the expense of the appropriate
Fund(s).
3. The Committee shall review this Charter at least annually and recommend any
changes to the full Board.
-27-
SCHEDULE A
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
Fees billed by KPMG for services provided directly to each Account:
AUDIT-RELATED
ACCOUNT BILLING DATE AUDIT FEES FEES TAX FEES
- ----------- ------------ ---------- ------------- --------
Account GIS
Account QB
Account MM
For each Account's last two fiscal years, no fees were billed by KPGM that would
be disclosed under the caption "All Other Fees" to any Account.
Fees billed by KPMG for services provided to each Account's Service Affiliates
that relate directly to such Account's operations and financial reporting:
AUDIT-RELATED ALL OTHER FEES
ACCOUNT BILLING DATE FEES (1) TAX FEES (1) (1)
- ------------- ------------ ------------- ------------ --------------
Service
Affiliates of
Account GIS
Service
Affiliates of
Account QB
Service
Affiliates of
Account MM
(1) This amount reflects the fees billed to Service Affiliates of the Account
for non-audit services relating directly to the operations and financial
reporting of the Account (which services also related to the operations and
financial reporting of all investment companies within the funds complex).
-28-
For periods prior to May 6, 2003, the amounts shown above under "Audit-Related
Fees," "Tax Fees" and "All Other Fees" relate to permitted non-audit services
that would have been subject to pre-approval if the SEC rules relating to
pre-approval of non-audit services had been in effect. During the periods
indicated in the table above, no services described under "Audit-Related Fees,"
"Tax Fees" or "All Other Fees" were approved pursuant to the de minimis
exception set forth in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Aggregate fees billed by KPMG for each Account's two most recent fiscal years
for non-audit services rendered to each Account and to each Account's Service
Affiliates:
AGGREGATE FEES PAID AGGREGATE FEES PAID
FOR FISCAL YEAR ENDED FOR FISCAL YEAR ENDED
ACCOUNT DECEMBER 31, 2003 DECEMBER 31, 2004
- ----------- --------------------- ---------------------
Account GIS $ $
Account QB $ $
Account MM $ $
-29-
FORM OF PROXY
[NAME OF ACCOUNT]
Proxy for the Special Meeting of Variable Annuity Contract Owners to be held on
June 24, 2005
The undersigned, revoking all proxies heretofore given, hereby appoints ,or
either one of them, as Proxies, with full power of substitution, to vote on
behalf of the undersigned all units of [Name of Account] which the undersigned
is entitled to vote at the Special Meeting of Variable Annuity Contract Owners
to be held at 9:00 a.m. on June 24, 2005, at One Cityplace, Hartford,
Connecticut, and at any adjournment thereof, in the manner directed below with
respect to the matters described in the Proxy Statement for the Special Meeting,
receipt of which is hereby acknowledged, and in their discretion, upon such
other matters as may properly come before the Special Meeting or any adjournment
thereof.
Please vote by marking the appropriate box below:
For Against Abstain
1. To approve a new investment advisory agreement. for the Account. [ ] [ ] [ ]
2. To approve a manager of managers proposal for the Account.
[ ] [ ] [ ]
3. Election of New Member of Board of Managers. For Withhold
Elizabeth Forget has been nominated by the Board of Managers of the Account to
serve until her successor is elected and qualified. [ ] [ ]
I realize that if I return this form without providing any instructions
regarding a proposal, my timely returning of this form will be deemed to be an
instruction to vote in favor of the proposal. These voting instructions may be
revoked prior to the special meeting by notifying the secretary of the Account,
in writing by 5:00 p.m. on June 23, 2005. In their discretion, the Proxies are
authorized to vote on any and all other business as may properly come before the
meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF MANAGERS. THE BOARD OF
MANAGERS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 and 3. THE UNITS REPRESENTED
HEREBY WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED VARIABLE ANNUITY CONTRACT OWNER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
If a contract is held jointly, each contract owner should sign. If only one
signs, his or her signature will be binding. If the contract owner is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the contract owner is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner." If the
contract owner is a trust, the trustee should sign in his or her own name,
indicating that he or she is a "Trustee."
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF CARD.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
PRE-ADDRESSED, POSTAGE-PAID ENVELOPE. PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.
DATE:___________, 2005
If signing in a representative capacity
(as attorney, executor or administrator,
trustee, guardian or custodian,
corporate officer or general partner),
please indicate such capacity following
signature. Proxies for custodian
accounts must be signed by the named
custodian, not by the minor.
----------------------------------------
Signature(s) if held jointly (Title(s), if
Required.