Citadel Diversified Investment Trust
TSX : CTD.UN

Citadel Diversified Investment Trust
Citadel S-1 Income Trust Fund
TSX : SDL.UN

Citadel S-1 Income Trust Fund
Citadel HYTES Fund
TSX : CHF.UN

Citadel HYTES Fund
Citadel SMaRT Fund
TSX : CRT.UN

Citadel SMaRT Fund
MYDAS Fund
TSX : MYF.UN

MYDAS Fund
Citadel Multi-Sector Income Fund
TSX : CMS.UN

Citadel Multi-Sector Income Fund
Series S-1 Income Fund
TSX : SRC.UN

Series S-1 Income Fund
Citadel Income & Growth Fund
TSX : CIF.UN

Citadel Income & Growth Fund
Income & Equity Index Participation Fund
TSX : IEP.UN

Income & Equity Index Participation Fund
Energy Plus Income Trust
TSX : EPF.UN

Energy Plus Income Trust

August 22, 2005 12:20 ET

Citadel Funds Special Meeting

CALGARY, ALBERTA--(CCNMatthews - Aug. 22, 2005) - Citadel Diversified Investment Trust ("Diversified") (TSX:CTD.UN); Citadel S-1 Income Trust Fund ("S-1") (TSX:SDL.UN); Citadel Hytes Fund ("Hytes") (TSX:CHF.UN); Citadel SMART Fund ("Smart") (TSX:CRT.UN); MYDAS Fund ("MYDAS") (TSX:MYF.UN); Citadel Multi-Sector Income Fund ("Multi-Sector") (TSX:CMS.UN); Series S-1 Income Fund ("Series S-1") (TSX:SRC.UN); Citadel Income & Growth Fund ("Income & Growth") (TSX:CIF.UN); Income & Equity Index Participation Fund ("Income & Equity") (TSX:IEP.UN); and Energy Plus Income Trust ("Energy Plus" and collectively, the "Citadel Funds") (TSX:EPF.UN) wish to advise that a special meetings of the holders of trust units of each of the foregoing Citadel Funds will be held at the TSX Broadcast & Conference Centre, Exchange Tower, 130 King Street West, Toronto, Ontario M5X 1J2 on September 14, 2005 at 9:00 am (Toronto time) to consider the following matters:

All Citadel Funds

1. Merger of Citadel Funds. To authorize the board of directors of each of the Citadel Funds to merge with any one or more other funds within the Citadel Group of Funds™ with similar investment objectives, policies and restrictions. The administrators of the Citadel Funds believe that a merger would provide numerous benefits to holders of trust units of merging Citadel Funds, such as increasing the liquidity for all unitholders, reducing fund operating costs and reducing the trading price discount to net asset value which seems to be associated with smaller market capitalization closed end funds. Any such merger would be effected on a tax-deferred rollover basis.

2. Consolidation of Fund Administrators. To permit the amalgamation of administrators of each of the Citadel Funds and the assignment of the applicable administration agreement to a single operating corporation whose mandate will be to provide administrative services to all of the Citadel Funds. Currently, the administrative structure of the funds within the Citadel Group of Funds™ is not as efficient as it might be if some or all of the administration agreements and administrators were combined into a single operating entity. Further efficiencies could also be realized through the combination of administrators into, and the transfer of administration agreements to, a single operating entity.

All Citadel Funds, Excluding Energy Plus

3. Securities Lending. To approve the amendment of investment restrictions in the declaration of trust of each of the Citadel Funds (excluding Energy Plus) to permit the respective Citadel Fund to enter into securities lending agreements. The Energy Plus Declaration of Trust does not restrict Energy Plus from securities lending. In light of the increased flexibility of Energy Plus, and the prospect of generating additional returns, holders of trust units of each of the other Citadel Funds will be asked to consider amendments to permit securities lending arrangements similar to those permitted by Energy Plus.

MYDAS, Multi-Sector, Series S-1, Income & Growth and Income & Equity

4. Unit Issuance At Less Than NAV Pursuant to DRIP. To approve the amendment of the declaration of trust of each of MYDAS, Multi-Sector, Series S-1, Income & Growth and Income & Equity to permit the respective Citadel Fund to issue trust units at a price per trust unit that is less than the net asset value per trust unit at such time in connection with the DRIP. Several of the Citadel Funds utilize the weighted average market price to price their distributions while MYDAS, Multi-Sector, Series S-1, Income & Growth and Income & Equity base the purchase price of trust units pursuant to the DRIP on the net asset value of the particular Citadel Fund. The two methodologies do not always yield the same prices, which can create confusion in the marketplace. To eliminate confusion, it is therefore proposed that all Citadel Funds will utilize the weighted average market price to determine the purchase price of trust units pursuant to their respective DRIP. As the price under the weighted average market price may be less than the net asset value of the particular Citadel Fund at any given time, an amendment is necessary to permit trust units to be issued at a price per trust unit that is less than the net asset value per trust unit.

S-1, Hytes and MYDAS

5. Unit Split. To approve the division of the outstanding trust units of S-1, Hytes and MYDAS on a two-for-one basis. Management believes the subdivision will encourage greater market liquidity and wider distribution among retail investors, as a lower unit price makes a board lot more affordable. The proposed subdivision would not affect the rights of the holders of any of the units, and would not result in taxable income or in any gain or loss to the holders of these units.

MYDAS, Series S-1 and Multi-Sector

6. Allow Investments in Stapled Units. To approve the amendment of the investment policies contained in the declaration of trust of each of MYDAS, Series S-1 and Multi-Sector to permit the applicable fund to invest in the stapled units of issuers. Given that the attributes of stapled units are very similar to those of trust units of mutual fund trusts and provide a stable distribution stream, allowing MYDAS, Series S-1 and Multi Sector to include stapled units in their portfolios represents both an additional diversification opportunity and access to certain industry sectors that might otherwise not be invested in by the respective Citadel Fund.

Income & Growth and Energy Plus

7. Unit Issuance at Less Than NAV. To approve the amendment of the declaration of trust of each of Income & Growth and Energy Plus to permit the issuance of trust units at a price that is less than the net asset value per trust unit at such time. Both of these respective funds are of the view that the issuance of these trust units at a price which may be less than the per unit net asset value of the respective Fund may sometimes be in the best interests of the Citadel Fund. For example, the issuance of Income & Growth Units at a price equal to 95% of the net asset value in exchange for trust units of a closed end trust whose units were trading at a discount to its net asset value of more than 95% would result in an increase in the per unit net asset value of Income & Growth following such an issuance.

Diversified

8. Reserve Additional Units for Payment of Fees in Units. To approve the reservation of a number of trust units of Diversified for issuance to Citadel Diversified Management Ltd., Bloom Investment Counsel Inc. and directors of Citadel Diversified Management Ltd. in satisfaction of fees payable to such parties in respect of services provided to Diversified. Management believes that the payment of these fees in trust units aligns the interest of the management and Diversified unitholders, and is in the best interests of Diversified and holders of Diversified trust units.

9. Permit Payment of Fees in Either Cash or Units. To approve the amendment of the administrative services agreement in respect of Diversified to allow for the payment of fees payable in either cash or trust units, at the election of the administrator. The ability to elect to pay administration and investment management fees and director retainers in either trust units or cash would give Diversified Management greater flexibility in managing the affairs of Diversified and in particular allow it to avoid or delay the necessity for additional unitholder meetings to approve future trust unit issues, as required under policies of the TSX, and thereby more effectively control future unitholder meeting costs.

S-1

10. Permit Replacement of Trustee. To approve the amendment of the declaration of trust to permit the replacement of the trustee of S-1 by the independent directors of Citadel S1 Management Ltd. Unlike the declarations of trust of all other Citadel Funds, the S-1 Declaration of Trust does not contemplate the appointment of a replacement trustee for S-1 without the need for a unitholder meeting. Such a situation creates a significant impediment to ensuring that S-1 Management is able to promote economic and operational efficiency with respect to the selection of its service providers.

Unitholders of the applicable Citadel Funds of record on August 15, 2005 will be entitled to vote on the foregoing proposed unitholder resolutions. A voting proxy and proxy circular have been mailed to each beneficial holders of Trust Units in each of the Citadel Funds. All unitholders are requested to complete and return the voting proxy as soon as possible.

Kingsdale Shareholder Services Inc. has been retained to provide solicitation services in connection with the unitholder meetings. Any questions and requests for assistance may be directed to our Proxy Solicitation Agent at the telephone number and location set out below:

Contact Information

  • Kingsdale Shareholder Services Inc.
    The Exchange Tower
    130 King Street West, Suite 2950, P.O. Box 361
    Toronto, Ontario
    M5X 1E2
    or
    Kingsdale Shareholder Services Inc.
    North American Toll Free Phone: 1-866-833-6977
    North American Toll Free Facsimile: 1-866-545-5580
    Facsimile: 416-867-2271
    or
    Citadel Diversified Management Ltd.
    Joe MacDonald
    Executive Vice President, Sales and Marketing
    1-877-261-9674
    Website: www.citadelfunds.com