SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
SMITH BARNEY ALLOCATION SERIES INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
2) Aggregate number of securities to which
transaction applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee
was paid previously. Identify the previous
filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed: November 16, 2000
A SPECIAL NOTICE TO SHAREHOLDERS OF SMITH BARNEY ALLOCATION
SERIES INC.
(FORMERLY KNOWN AS SMITH BARNEY CONCERT ALLOCATION SERIES
INC.)
WITH RESPECT TO
GLOBAL PORTFOLIO
HIGH GROWTH PORTFOLIO
GROWTH PORTFOLIO
BALANCED PORTFOLIO
CONSERVATIVE PORTFOLIO
INCOME PORTFOLIO
Dear Shareholder:
I am writing to inform you about some important
changes that have been approved by the Board of Directors
of Smith Barney Allocation Series Inc. (the "Company")
regarding the management of the Global Portfolio, High
Growth Portfolio, Growth Portfolio, Balanced Portfolio,
Conservative Portfolio, and Income Portfolio (each, a
"Portfolio" or collectively, the ''Portfolios'').
SSB Citi Fund Management LLC ("SSB Citi") currently
acts as investment adviser to the Portfolios pursuant to a
separate Asset Allocation and Administration Agreement for
each Portfolio (each, a "Current Agreement" or
collectively, the "Current Agreements"). Under the Current
Agreements, SSB Citi provides investment advisory and
administrative services, including investing each
Portfolio's assets, providing investment research and
supervising each Portfolio's investments in accordance with
its investment objective, policies and restrictions. For
these services, SSB Citi is paid an annual fee of 0.35% of
each Portfolio's average daily net assets. This fee is a
bundled, or "all-in" fee, which requires SSB Citi to pay
all other operating expenses for each Portfolio out of this
one fee, except charges for distribution under the
Company's distribution plan. In a traditional mutual fund
advisory contract, the investment adviser is compensated
solely for its investment advisory services, as described
above, and the fund bears the cost of all other operating
expenses.
On October 10, 2000, a majority of the Board of
Directors of the Company, including a majority of the
Directors who are not interested persons of the Portfolios,
voted to restructure the Current Agreements by eliminating
the all-in advisory fee and replacing it with a traditional
advisory fee that compensates SSB Citi solely for its
investment advisory services. Pursuant to the
restructuring, each Current Agreement will be replaced by a
new agreement (each a "New Agreement" or collectively the
"New Agreements") providing for an advisory fee calculated
at the annual rate of 0.20% of that Portfolio's average
daily net assets. Although the New Agreements provide for
lower advisory fees, the Portfolios will be subject to
higher total operating expenses since they will bear all of
their own operating expenses. However, the proposed fee
structure will be subject to a voluntary fee waiver and
expense reimbursement in order to maintain an expense cap
on each of the Portfolios that is no more than 0.20% higher
than the current total expenses for that Portfolio. This
expense cap will not be changed in the future without the
approval of the Board of Directors of the Company. This
structure should permit the Portfolios to remain
competitive and allow the Company and the Portfolios to
provide shareholders with enhanced services on the same
basis provided by other funds.
There are no other proposed changes and the
Portfolios will continue to be managed pursuant to the
investment objectives and policies as set forth in the
Prospectus.
A special shareholder meeting regarding the proposed
New Agreements is scheduled to take place on January 23,
2001. I ask that you take a few moments to review the
accompanying proxy materials carefully. Shareholders
owning shares in more than one of the Company's Portfolios
will receive a separate proxy card for each Portfolio and
Share Class owned. If you do not plan to attend the
special shareholder meeting, please complete each proxy
card (unless you are voting by telephone or through the
Internet) and return it as soon as possible in the postage-
paid envelope. We also encourage you to vote by telephone
or through the Internet. Proxies may be voted by telephone
by calling the toll-free number that appears on your proxy
card or through the Internet by using the Internet address
located on your proxy card.
Voting by telephone or through the Internet will
reduce the time and costs associated with the proxy
solicitation. When the Portfolios record proxies by
telephone or through the Internet, they will use reasonable
procedures designed to (i) authenticate shareholders'
identities, (ii) allow shareholders to authorize the voting
of their shares in accordance with their instructions and
(iii) confirm that their instructions have been properly
recorded.
Whichever voting method you choose, please read the
full text of the proxy statement before you vote.
Thank you for taking the time to read this letter and
the accompanying proxy statement. We look forward to
helping you pursue your financial goals in the years ahead.
Sincerely,
Heath B. McLendon
Chairman of the Board of Directors
December 1, 2000
SMITH BARNEY ALLOCATION SERIES INC.
(FORMERLY KNOWN AS SMITH BARNEY CONCERT ALLOCATION SERIES
INC.)
WITH RESPECT TO
GLOBAL PORTFOLIO
HIGH GROWTH PORTFOLIO
GROWTH PORTFOLIO
BALANCED PORTFOLIO
CONSERVATIVE PORTFOLIO
INCOME PORTFOLIO
388 Greenwich Street, New York, New York 10013
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On January 23, 2001
TO THE SHAREHOLDERS:
A special meeting (the "Special Meeting") of Smith
Barney Allocation Series Inc. (the "Company") on behalf of
the shareholders of the Global Portfolio, High Growth
Portfolio, Growth Portfolio, Balanced Portfolio,
Conservative Portfolio, and Income Portfolio (each, a
"Portfolio" or collectively, the "Portfolios") will be held
on January 23, 2001 beginning at 9 a.m. Eastern time at the
offices of SSB Citi Fund Management LLC ("SSB Citi"),
Downtown Conference Center, Lobby, 7 World Trade Center,
New York, New York, 10048 to consider and vote on the
following proposal:
To approve or disapprove a new Asset Allocation
and Administration Agreement with SSB Citi on behalf of
each Portfolio.
The appointed proxies will vote in their
discretion on any other business as may properly come
before the Special Meeting or any adjournments thereof.
Shareholders of record at the close of business on November
3, 2000 are entitled to notice of and to vote at the
Special Meeting and any adjournments thereof. As a
convenience to shareholders, you can now vote in any of
four ways:
? By mail, by completing, dating, signing and returning
the proxy card in the enclosed envelope that requires no
postage if mailed in the United States;
? By telephone, with a toll-free call to the telephone
number that appears on your proxy card;
? Through the Internet, by using the Internet address
located on your proxy card and following the
instructions on the site; or
? In person at the Special Meeting.
Your vote is important and your participation in
the governance of the Portfolios does make a difference.
The proposal has been approved by a majority of
the Company's Board of Directors, including a majority of
the Directors who are not interested persons of the
Company, the Portfolios or SSB Citi, who believe the
proposal set forth above is important and recommend you
read the enclosed material carefully and recommend you vote
"FOR" the proposal. Your immediate response will help save
on the costs of additional solicitations. We look forward
to your participation.
This notice and related proxy material are first
being mailed to shareholders on or about December 1, 2000
or as soon as practicable thereafter. This proxy is being
solicited on behalf of the Board of Directors of the
Company.
December 1, 2000
By Order of the Board of Directors,
Christina T. Sydor, Secretary
THE PORTFOLIOS WILL FURNISH, WITHOUT CHARGE, A COPY OF
THEIR MOST RECENT ANNUAL REPORT AND MOST RECENT SEMI-ANNUAL
REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY, TO A
SHAREHOLDER OF ANY PORTFOLIO UPON REQUEST. ANY SUCH REQUEST
SHOULD BE MADE BY CALLING (800) 842-8573 OR BY WRITING TO
THE SECRETARY OF THE PORTFOLIO AT 7 WORLD TRADE CENTER, NEW
YORK, NEW YORK 10048.
SHAREHOLDERS OF THE PORTFOLIOS ARE INVITED TO ATTEND THE
SPECIAL MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO
ATTEND THE SPECIAL MEETING, PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON EACH ENCLOSED PROXY CARD, DATE AND SIGN
EACH PROXY CARD, AND RETURN EACH PROXY CARD IN THE ENVELOPE
PROVIDED UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE
INTERNET. EACH PROXY CARD IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. PROXIES MAY ALSO BE VOTED BY TELEPHONE BY CALLING
THE TOLL-FREE NUMBER THAT APPEARS ON YOUR PROXY CARD OR
THROUGH THE INTERNET BY USING THE INTERNET ADDRESS LOCATED
ON YOUR PROXY CARD.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK THAT YOU MAIL YOUR PROXY CARD(S)
PROMPTLY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU CAST YOUR VOTE:
- FOR APPROVAL OF A NEW ASSET ALLOCATION AND
ADMINISTRATION AGREEMENT WITH SSB CITI ON BEHALF OF EACH
PORTFOLIO
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY
(UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE
INTERNET)
NO MATTER HOW MANY SHARES YOU OWN.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be
of assistance to you and avoid the time and expense to the
Company involved in validating your vote if you fail to
sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it
appears in the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of
the party signing should conform exactly to the name shown
in the registration on the proxy card.
3. All Other Accounts: The capacity of the individual
signing the proxy card should be indicated unless it is
reflected in the form of registration. For example:
Registration Valid
Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe,
Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John
Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B.
Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B.
Smith
(2) Estate of John B. Smith John B.
Smith Jr., Executor
SMITH BARNEY ALLOCATION SERIES INC.
(FORMERLY KNOWN AS SMITH BARNEY CONCERT ALLOCATION SERIES
INC.)
WITH RESPECT TO
GLOBAL PORTFOLIO
HIGH GROWTH PORTFOLIO
GROWTH PORTFOLIO
BALANCED PORTFOLIO
CONSERVATIVE PORTFOLIO
INCOME PORTFOLIO
388 Greenwich Street, New York, New York 10013
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
To Be Held On January 23, 2001
General
The accompanying proxy is solicited by the Board of
Directors of Smith Barney Allocation Series Inc. (the
"Company") on behalf of the Global Portfolio, High Growth
Portfolio, Growth Portfolio, Balanced Portfolio,
Conservative Portfolio, and Income Portfolio (each, a
"Portfolio" or collectively, the "Portfolios"), in
connection with the special meeting of shareholders (the
"Special Meeting") of the Portfolios to be held at the
offices of SSB Citi Fund Management LLC ("SSB Citi"), the
Downtown Conference Center, Lobby, 7 World Trade Center,
New York, New York 10048 beginning at 9 a.m. Eastern time
on January 23, 2001.
Each Portfolio is a "fund of funds" which seeks to
achieve its objective by investing in a number of
underlying open-end management investment companies or
series thereof. These underlying funds, which are operated
by SSB Citi and an affiliate thereof, are described in the
Portfolios' prospectus.
The proposal to be considered and voted on at the
Special Meeting is as follows:
To approve or disapprove a new Asset Allocation and
Administration Agreement (each a "New Agreement" or
collectively, the "New Agreements") with SSB Citi on behalf
of each Portfolio.
The appointed proxies will vote in their discretion
on any other business as may properly come before the
Special Meeting or any adjournments thereof. The Board of
Directors has fixed the close of business on November 3,
2000 as the record date (the "Record Date") for the
determination of holders of shares of the Portfolios
entitled to notice of and to vote at the Special Meeting
(the "Shares"). Shareholders of the Portfolios on the
Record Date will be entitled to one vote per share with
respect to the proposal submitted to the Shareholders of
the Portfolios, with no share having cumulative voting
rights.
Those persons who owned, beneficially or of
record, more than 5% of the outstanding shares of any of
the Portfolios as of the Record Date, to the best knowledge
of the Board and the Portfolios, are set forth in Annex A
hereto. As of the Record Date, the officers and Directors
of the Company, collectively, beneficially owned less than
1% of the shares of the Portfolio.
Voting
The favorable vote of the holders of a "majority of
the outstanding voting securities" of each Portfolio, as
defined in the Investment Company Act of 1940, as amended
(the "1940 Act"), is required to approve each Portfolio's
New Agreement. The 1940 Act defines a "majority of the
outstanding voting securities" of each Portfolio to mean
the lesser of (a) the vote of holders of 67% or more of the
shares of Common Stock of each Portfolio present in person
or by proxy at the Special Meeting, if the holders of more
than 50% of the outstanding Common Stock of each Portfolio
are present in person or by proxy, or (b) the vote of the
holders of more than 50% of the outstanding Common Stock of
each Portfolio.
The Proxy Statement, Notice of Special Meeting and
the proxy card are first being mailed to shareholders on or
about December 1, 2000 or as soon as practicable
thereafter. All properly executed proxies received prior
to the Special Meeting will be voted at the Special Meeting
in accordance with the instructions marked thereon.
Proxies received prior to the Special Meeting on
which no vote is indicated will be voted "for" the
proposal. For purposes of determining the presence of a
quorum for transacting business at the Special Meeting,
abstentions and broker "non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are
present but which have not been voted. The holders of at
least one-third of the outstanding shares entitled to vote
on the proposal must be present in person or by proxy to
have a quorum to conduct business at the Special Meeting.
Because abstentions and broker non-votes are treated as
shares present but not voting, any abstentions and broker
non-votes will have the effect of votes against the
proposal for purposes of tabulating the votes necessary for
the proposal's approval. Accordingly, shareholders are
urged to forward their voting instructions promptly.
Any proxy may be revoked at any time prior to
exercise thereof by giving written notice to the Secretary
of the Company at the address indicated above, by voting in
person at the Special Meeting, by telephone or on the
Internet.
The Company knows of no other business that will
be presented for consideration at the Special Meeting. If
any other matters are properly presented, it is the
intention of the persons named on the enclosed proxy to
vote proxies in accordance with their best judgment. In
the event a quorum is present at the Special Meeting but
sufficient votes to approve the proposal are not received,
the persons named as proxies may propose one or more
adjournments of the Special Meeting to permit further
solicitation of proxies provided they determine that such
an adjournment and additional solicitation is reasonable
and in the interest of shareholders based on a
consideration of all relevant factors, including the nature
of the relevant proposal, the percentage of votes then
cast, the percentage of negative votes then cast, the
nature of the proposed solicitation activities and the
nature of the reasons for such further solicitation. Any
such adjournment will require the affirmative vote of the
holders of a majority of the shares present in person or by
proxy at the Special Meeting. The persons named as proxies
will vote in favor of such adjournment those proxies which
they are entitled to vote in favor of the proposal and will
vote against any such adjournment those proxies to be voted
against the proposal.
PROPOSAL:
APPROVAL OF A NEW ASSET ALLOCATION AND ADMINISTRATION
AGREEMENT WITH SSB CITI ON BEHALF OF EACH PORTFOLIO
Introduction
The Board of Directors of the Company is recommending
that the shareholders of each Portfolio approve a New
Agreement for each Portfolio providing for a restructuring
of advisory fees, to be entered into between the Company
(on behalf of each Portfolio) and SSB Citi. SSB Citi
serves as investment adviser to each Portfolio and is a
wholly owned subsidiary of Salomon Smith Barney Holdings
Inc. ("Holdings"), which is a wholly owned subsidiary of
Citigroup Inc. ("Citigroup").
At a meeting of the Board of Directors of the Company
held on October 10, 2000, a majority of the Board,
including a majority of the Directors who are not
interested persons of the Company, the Portfolios or SSB
Citi (the "Independent Directors"), approved the New
Agreements on behalf of each Portfolio, subject to
shareholder approval. The current Asset Allocation and
Administration Agreements (each, a "Current Agreement" or
collectively, the "Current Agreements") for the High Growth
Portfolio, Growth Portfolio, Balanced Portfolio,
Conservative Portfolio and Income Portfolio commenced on
January 26, 1996, and the Current Agreement for the Global
Portfolio commenced on March 9, 1998. If the shareholders
approve the New Agreements, they will be effective on
January __, 2001. If the shareholders do not approve the
New Agreements, the Current Agreements will remain in
effect and the Company's Board of Directors will consider
whether other courses of action, including a
reconsideration of the New Agreements, are appropriate.
Each New Agreement reflects the proposed
restructuring of the advisory fee, including a decrease in
the advisory fee and, effectively, an increase in total
operating expenses, and also reflects the new name of the
adviser, SSB Citi, successor to Mutual Management Corp.
Except for those changes, its terms are substantially
similar to the terms of each Current Agreement.
Current Agreements and Proposed New Agreements
SSB Citi currently acts as investment adviser to the
Portfolios pursuant to the Current Agreements. Under the
Current Agreements, SSB Citi provides investment advisory
and administrative services, including investing each
Portfolio's assets, providing investment research and
supervising each Portfolio's investments in accordance with
its investment objective, policies and restrictions. For
these services, SSB Citi is paid an annual fee of 0.35% of
each Portfolio's average daily net assets. For the fiscal
year ended January 31, 2000, SSB Citi was paid an aggregate
fee of $2,922,105.35 on behalf of all of the Portfolios.
The advisory fee has been a bundled, or "all-in" fee, which
requires SSB Citi to pay all of the Portfolios' other
operating expenses out of this fee, including transfer
agency, audit, legal, printing, SEC registration and
miscellaneous (but not including charges for distribution
under the Company's 12b-1 plan). In a traditional mutual
fund advisory contract, the investment adviser is
compensated solely for its investment advisory services, as
described above, and the fund bears the cost of all other
operating expenses.
At the time the Company was organized and the Current
Agreements were approved, the all-in fee structure was
considered simpler and more efficient in administering the
Portfolios. It was also anticipated at that time that the
all-in fee would generate sufficient levels of fees to
cover each Portfolio's expenses, including transfer agency
and sub-transfer agency charges, and generate a reasonable
profit. However, because of a higher than anticipated
number of small accounts, the expenses of the Portfolios
have been significantly higher than anticipated.
The high cost of servicing a large number of
relatively small accounts will be exacerbated as a result
of a recent decision by PFS Shareholder Services Inc.
("PFSSS") to significantly upgrade client services in order
to increase client satisfaction and retention. PFSSS, a
wholly owned subsidiary of Citigroup, serves as a sub-
transfer agent for the Company, maintaining shareholder
account records for a majority of the Portfolios'
outstanding shares. Although this upgrade will result in
enhanced shareholder services, as further described below,
it will also result in increased sub-transfer agency costs.
As a result of the increase in expenses above what
was originally contemplated and the desire to provide
service enhancements to the Company's shareholders, SSB
Citi is proposing that the Portfolios adopt a new fee
structure. The proposed fee structure will consist of an
advisory fee of 0.20%, with other expenses, including
transfer agency fees, to be charged directly to the
Portfolios. The proposed fee structure will also be
subject to a voluntary fee waiver and expense reimbursement
by SSB Citi, as further described below. The Board of
Directors has determined that the proposed fee structure,
unbundling the advisory fee paid to SSB Citi from fees for
other services, provides for an appropriate level of
advisory fees.
With respect to the transfer agency fee, PFSSS is
requesting an increase in fees from the current level of
$11.00 for Class A shares and $12.00 for Class B and L
shares (borne by SSB Citi under the Current Agreements) to
$18.00 for Class A shares and $20.00 for Class B and Class
L shares. As previously noted, this level of transfer
agency fee is necessary because of the enhancements that
PFSSS will be making for client services, which include,
among other things, on-line and telephone account access
and improved shareholder communications, including
integrated account statements and year-end tax statements.
Currently, a small percentage (approximately 14%) of the
Company's shareholders have more extensive services than
those currently available to PFSSS clients. In order to
provide comparable services to all investors, PFSSS will
incur higher costs and, therefore, it will be necessary for
PFSSS to charge higher transfer agency fees. The Company
and SSB Citi propose to pass along these costs to all
investors, as contemplated by the proposed fee
restructuring.
The proposed fee structure will be subject to a
voluntary fee waiver and expense reimbursement in order to
maintain an expense cap on each of the Portfolios that is
no more than 0.20% higher than current expenses, an
increase from 0.60% to 0.80% for Class A shares and from
1.35% to 1.55% for Class B and Class L shares. This
expense cap will not be changed in the future without the
approval of the Company's Board of Directors.
Impact of the New Agreements
As stated in the Introduction, the New Agreements
each provide for a decrease in the advisory fee and an
effective increase in total operating expenses when
compared to the Current Agreements. The following table
compares the advisory fees paid by the Portfolios to SSB
Citi for the fiscal year ended January 31, 2000 as
calculated under the Current Agreements to the advisory
fees each Portfolio would have paid if the New Agreements
had been in effect. This table reflects only the proposed
changes in advisory fees and does not reflect the increase
in total operating expenses as shown in the tables below.
Portfolio
Current
Agreement
New
Agreement
Percentage
Difference
Global
$93,310
$53,169.17
-43.02%
High Growth
$2,747,177
$1,493,095.
23
-45.65%
Growth
$3,282,233
$1,866,098.
09
-43.15%
Balanced
$1,899,634
$1,083,686.
03
-42.95%
Conservative
$519,947
$295,534.82
-43.16%
Income
$248,660
$141,217.91
-43.21%
The following table compares the total operating
expenses, including advisory fees, under the Current
Agreements to the total operating expenses to be incurred
under the New Agreements.
Comparative Fee Table*
Curren
t
Agreem
ent
New
Agreement
Portfolio
Adviso
ry Fee
12b-1
Fee
Other
Expen
ses
Total
Operati
ng
Expense
s
Advisor
y Fee
12b-1 Fee
Other
Expens
es
Total
Operati
ng
Expense
s
(After
Expense
Cap)**
Global
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.69%
0.80%
High Growth
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.51%
0.80%
Growth
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.39%
0.80%
Balanced
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.28%
0.73%
Conservative
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.24%
0.69%
Income
0.35%
0.25%
None
0.60%
0.20%
0.25%
0.22%
0.67%
*The table sets forth expenses for Class A shares.
**An 80 basis point cap will be imposed on Class A shares
with any increases subject to Board approval. Total
operating expenses under the New Agreements for the Global,
High Growth and Growth Portfolios reflect voluntary fee
waivers and expense reimbursements of 0.34%, 0.16% and
0.04% respectively. Class B and L shares total expenses
will be capped at 1.55% (0.20% higher than current expenses
of 1.35%).
The table below shows the total Portfolio expense
ratios when combined with the underlying fund expense
ratios under the Current Agreements and the New Agreements.
Comparative Fee Table (With Underlying Fund Expense
Ratios)*
Current
Agreement
New
Agreement
Portfolio
Expense
s
Underlying
Fund
Expenses
Total**
Portfolio
Expense
s
Underlying
Fund
Expenses
Total
**
Global
0.60%
1.03%
1.63
%
0.80%
1.03%
1.83%
High
Growth
0.60%
0.85%
1.45
%
0.80%
0.85%
1.65%
Growth
0.60%
0.79%
1.39
%
0.80%
0.79%
1.57%
Balanced
0.60%
0.72%
1.32
%
0.73%
0.72%
1.45%
Conservative
0.60%
0.72%
1.32
%
0.69%
0.72%
1.41%
Income
0.60%
0.67%
1.27
%
0.67%
0.67%
1.34%
*The table sets forth expenses for Class A shares. Class B
and L shares will be capped at 1.55% (0.20% higher than the
current 1.35% charge to the extent expenses are above that
level).
**Underlying fund expenses and, therefore, total expenses
may be higher or lower based upon amounts allocated to the
respective underlying funds.
Example: The following tables illustrate the expenses a
shareholder would pay on a $10,000 investment in a
Portfolio assuming the fees and expenses stated in the
comparative fee tables above under both the Current
Agreements and the New Agreements.
Global Portfolio*
Before
After
Number of Years
1
3
5
10
1
3
5
10
A
657
988
134
2
2336
677
1047
1441
2541
B Redemption
748
1063
138
3
2527
767
1121
1482
2729
B No Redemption
241
742
127
0
2527
261
802
1370
2729
L Redemption
439
835
135
8
2789
459
894
1457
2986
L No Redemption
339
835
135
8
2789
359
894
1457
2986
Y
140
437
755
1657
161
499
860
1878
High Growth Portfolio*
Before
After
Number of Years
1
3
5
10
1
3
5
10
A
640
936
125
3
2148
659
994
1352
2357
B Redemption
730
1010
129
3
2342
750
1068
1393
2547
B No Redemption
223
688
118
0
2342
243
748
1280
2547
L Redemption
421
781
126
8
2609
441
841
1368
2809
L No Redemption
321
781
126
8
2609
341
841
1368
2809
Y
122
381
660
1455
143
443
765
1680
Growth Portfolio*
Before
After
Number of Years
1
3
5
10
1
3
5
10
A
634
918
122
2
2085
654
977
1322
2295
B Redemption
724
992
126
3
2279
744
1051
1363
2486
B No Redemption
217
670
114
9
2279
237
730
1250
2486
L Redemption
415
763
123
8
2548
435
823
1338
2749
L No Redemption
315
763
123
8
2548
335
823
1338
2749
Y
116
362
628
1386
126
393
681
1500
Balanced Portfolio*
Befo
re
After
Number of Years
1
3
5
10
1
3
5
10
A
628
897
1187
2011
647
956
1287
2222
B Redemption
717
971
1227
2205
737
1030
1328
2414
B No Redemption
210
649
1114
2205
230
709
1215
2414
L Redemption
408
742
1202
2476
428
802
1303
2679
L No Redemption
308
742
1202
2476
328
802
1303
2679
Y
109
340
590
1306
129
403
697
1534
Conservative Portfolio*
Befo
re
After
Number of Years
1
3
5
10
1
3
5
10
A
578
849
114
1
1969
598
909
1242
2181
B Redemption
642
897
110
0
2005
662
956
1202
2218
B No Redemption
185
573
985
2005
205
634
1088
2218
L Redemption
379
652
105
0
2163
398
712
1152
2373
L No Redemption
278
652
105
0
2163
298
712
1152
2373
Y
109
340
590
1306
129
403
697
1534
Income Portfolio*
Before
After
Number of Years
1
3
5
10
1
3
5
10
A
574
835
111
6
1915
593
894
1217
2128
B Redemption
537
882
107
5
1951
657
942
1177
2165
B No Redemption
180
557
959
1951
200
618
1062
2165
L Redemption
374
636
102
4
2110
394
697
1126
2321
L No Redemption
273
636
102
4
2110
293
697
1126
2321
Y
104
325
563
1248
124
387
670
1477
*The examples assume:
? You invest $10,000 for the period shown
? Your investment has a 5% return each year
? You reinvest all distributions and dividends without a
sales charge
? The Portfolios' operating expenses stay the same
? The expenses of the underlying funds are reflected
Board of Directors Evaluation
The Board of Directors met on October 10, 2000 to
consider SSB Citi's proposal to restructure the advisory
fees and to increase total expenses of each Portfolio.
The Board of Directors reviewed the circumstances
surrounding the proposal. SSB Citi informed the Board that
the current advisory fee was structured as a bundled, or
all-in, advisory fee. SSB Citi explained that it paid
virtually all of the Portfolios' other expenses (other than
the fees payable under the plan adopted pursuant to Rule
12b-1 under the 1940 Act and extraordinary expenses) out of
this fee. Therefore, any increases in such expenses were
paid directly by SSB Citi.
SSB Citi noted that the costs of certain of the
services paid out of the advisory fee, in particular the
sub-transfer agency fees, as described above, have been
increasing beyond what the Board of Directors or SSB Citi
contemplated at the time the all-in fee structure was
established. These costs have been increasing largely
because PFSSS has been servicing a higher than anticipated
number of small accounts and because of its intention to
provide enhanced transfer agency services. The Board was
informed that because shareholders would continue to need
and desire enhanced services, there would, in all
likelihood, be further service enhancements with possible
accompanying increases in expenses. Thus, in order to
permit the Portfolios to remain competitive and to allow
the Portfolios to provide their shareholders with enhanced
services on the same basis provided by other funds, a
restructuring of the advisory fee for each Portfolio was
proposed.
SSB Citi described the sub-transfer agency
enhancements PFSSS planned to provide. These include,
among other things, on-line and telephone account access
and improved shareholder communications, including
integrated account statements and year-end tax statements.
Currently, some of the Fund's shareholders already benefit
from such extensive services. SSB Citi explained that it
was necessary to incur higher transfer agency costs in
order to provide comparable services to all investors in
the Portfolios.
SSB Citi reviewed the proposed fee structure and
expense increase with the Board of Directors. SSB Citi
explained its proposal to lower the current advisory fee
from 0.35% of each Portfolio's average daily net assets to
0.20% of each Portfolio's average daily net assets. SSB
Citi further explained to the Board that, although the
advisory fee will be lower following the restructuring, the
Portfolios will pay higher total operating expenses because
all other operating expenses previously paid by SSB Citi
will be borne directly by the Portfolios.
SSB Citi agreed that each Portfolio's total expenses
would be subject to a voluntary fee waiver and expense
reimbursement in order to maintain an expense cap on each
of the Portfolios that is no more than 0.20% higher than
current expenses for each Portfolio. SSB Citi also agreed
that this expense cap would not be changed in the future
without the prior approval of the Board of Directors. The
New Agreements will be subject to termination by the Board
of Directors on 60 days' prior written notice.
The Board was reminded that, at its meeting on June
13, 2000, it was furnished with a study prepared by SSB
Citi setting forth its revenues, expenses and resulting
profitability in connection with its management of the
Portfolios. At its October 10, 2000 meeting, the Board was
given a competitive fund of funds expense analysis
comparing the Portfolios' expected and proposed expenses to
those borne by a representative list of investment
companies with structures similar to the Portfolios.
Finally, the Board received a comparison of the current
transfer agency fees paid by SSB Citi under the Current
Agreements, the proposed transfer agency fees to be paid by
the Portfolios under the New Agreements and the industry
average transfer agency fees. SSB Citi observed that both
the current transfer agency fees and the proposed transfer
agency fees are lower than the industry average.
In their review, the Board of Directors considered,
among other factors, the reasons presented by SSB Citi for
the proposed advisory fee restructuring and increase,
including the desirability of providing enhanced services
to all shareholders and, in particular, the enhanced
services to be provided by PFSSS; the nature, quality and
scope of the services provided to the Portfolios by SSB
Citi; the importance of supporting quality, long-term
service by SSB Citi to achieve solid investment performance
and efficient fund management and operations; the data as
to revenues, expenses and profitability of SSB Citi, the
competitive fund of funds analysis and the comparison of
the current and proposed transfer agency fees with transfer
agency fees charged by comparable funds; the fact that
Portfolio expenses will be subject to a voluntary expense
cap; the effect of the proposed advisory fee restructuring
and increase on the expense ratio of the Portfolios; and
SSB Citi's overall profitability and financial resources.
Based on the information provided to the Board of
Directors and the factors discussed above, a majority of
the Board of Directors, including a majority of the
Independent Directors, approved the proposed advisory fee
restructuring, including an increase in total expenses, and
the New Agreements, subject to shareholder approval.
Description of SSB Citi
SSB Citi acts as investment adviser to the Portfolios
pursuant to a separate Current Agreement with each
Portfolio. Pursuant to each of those Agreements, SSB Citi
determines how each Portfolio's assets are invested in the
underlying funds and in repurchase agreements pursuant to
the investment objectives and policies of each Portfolio
set forth in the prospectus and makes recommendations to
the Board of Directors concerning changes to (a) the
underlying funds in which the Portfolios may invest, (b)
the percentage range of assets that may be invested by each
Portfolio in any one underlying fund and (c) the percentage
range of assets of any Portfolio that may be invested in
equity funds and fixed income funds (including money market
funds). In addition to such services, SSB Citi pays the
salaries of all officers and employees who are employed by
both it and the Company, maintains office facilities for
the Company, furnishes the Company with statistical and
research data, clerical help and accounting, data
processing, bookkeeping, internal auditing and legal
services and certain other services required by the Company
and each Portfolio, prepares reports to each Portfolio's
shareholders and prepares tax returns, reports to and
filings with the SEC and state Blue Sky authorities. SSB
Citi provides investment advisory and management services
to investment companies affiliated with Salomon Smith
Barney.
SSB Citi (successor to SSBC Fund Management Inc.) was
organized as a Delaware corporation on March 12, 1968 and
converted to a Delaware limited liability company in 1999.
Its principal business address is 7 World Trade Center, New
York, New York, 10048. SSB Citi is a wholly-owned
subsidiary of Holdings which is also located at 7 World
Trade Center, New York, New York, 10048. Holdings is a
wholly-owned subsidiary of Citigroup, which is located at 1
Citicorp Center, 153 East 53rd Street, New York, New York
10028.
The names, titles and principal occupations of the
current directors and executive officers of SSB Citi are
set forth below:
Heath B. McLendon. The principal occupation of Mr.
McLendon is to serve as Chairman or Co-Chairman of investment
companies managed by affiliates of Citigroup and as President
and Chief Executive Officer of SSB Citi.
A. George Saks. The principal occupation of Mr. Saks
is to serve as Director of SSB Citi and Managing Director
and Special Counsel of Salomon Smith Barney.
Lewis E. Daidone. The principal occupation of Mr.
Daidone is to serve as Executive Vice President and Treasurer
of 61 investment companies associated with Citigroup,
Managing Director of Salomon Smith Barney and Director and
Senior Vice President of SSB Citi.
Michael J. Day. The principal occupation of Mr. Day
is to serve as Treasurer of SSB Citi and Managing Director
of Salomon Smith Barney.
Virgil H. Cumming. The principal occupation of Mr.
Cumming is to serve as Chief Investment Officer of SSB
Citi.
Christina T. Sydor. The principal occupation of Ms.
Sydor is to serve as Managing Director of Salomon Smith
Barney, General Counsel and Secretary of SSB Citi and
Secretary of 61 investment companies associated with
Citigroup.
John Blevins. The principal occupation of Mr.
Blevins is to serve as Chief Compliance Officer of SSB
Citi.
R. Jay Gerken. The principal occupation of Mr. Gerken
is to serve as Managing Director of Salomon Smith Barney and
portfolio manager of four investment companies associated
with Citigroup, including the Company's Portfolios.
With the exception of Heath B. McLendon, Lewis E.
Daidone, Christina T. Sydor and R. Jay Gerken, no other
officers or Directors of the Company are officers,
directors or employees of SSB Citi.
Portfolio Manager
R. Jay Gerken, a Managing Director of Salomon Smith
Barney, has been responsible for the day-to-day operations
of the Portfolios since inception. Mr. Gerken has been
with Salomon Smith Barney or companies that are now part of
Salomon Smith Barney since 1988. A team of investment
professionals currently assists Mr. Gerken in the
management of the Portfolio. If the shareholders approve
the change in management fees, Mr. Gerken will continue to
manage the Portfolios in accordance with their investment
objectives.
Other Information
Salomon Smith Barney, located at 7 World Trade
Center, New York, New York 10048, serves as the Company's
principal underwriter pursuant to a written agreement dated
June 5, 2000. For the fiscal year ended January 31, 2000,
the Portfolios paid no commissions to Salomon Smith Barney,
an ''affiliated broker'' of the Portfolios as defined in
Schedule 14A of the Securities Exchange Act of 1934.
Required Vote
Approval of the proposal requires the affirmative
vote of a ''majority of the outstanding voting
securities,'' as defined above, of each Portfolio. The
Board of Directors of the Company, including the
Independent Directors, recommend that the shareholders of
the Portfolios vote in favor of the proposal.
Issued and Outstanding Shares
As of the close of business on the Record Date, the
following shares were issued and outstanding for each
Portfolio:
Portfolio
Class A
Class B
Class L
Class
Y
Class Z
Global
Portfolio
1,647,242.5
08
1,239,809.
768
109,720.14
8
- 0 -
- 0 -
High Growth
Portfolio
27,457,270.
990
22,982,571
.997
3,096,059.
747
1.009
- 0 -
Growth
Portfolio
29,724,053.
654
31,517,213
.931
3,830,343.
661
1.012
- 0 -
Balanced
Portfolio
17,455,739.
149
17,865,562
.552
2,719,819.
471
1.070
44,812.8
69
Conservative
Portfolio
5,485,734.4
11
4,520,855.
909
623,444.14
3
1.014
- 0 -
Income
Portfolio
2,545,651.5
82
2,183,559.
736
319,732.02
5
1.022
- 0 -
ADDITIONAL INFORMATION
Proxy Solicitation
Proxy solicitations will be made primarily by mail,
but proxy solicitations also may be made by telephone,
telegraph, other electronic means or personal interviews
conducted by officers and employees of the Company; Salomon
Smith Barney, the Company's principal underwriter; Citi
Fiduciary Trust Company (''Citi''), transfer agent of the
Company; and/or PFPC Global Fund Services ("PFPC") or
PFSSS, sub-transfer agents of the Company. Such
representatives and employees will not receive additional
compensation for solicitation activities. Salomon Smith
Barney has retained the services of PFPC to assist in the
solicitation of proxies. The aggregate cost of solicitation
of the shareholders of the Portfolio is expected to be
approximately $___________. The costs of the proxy
solicitation and expenses incurred in connection with the
preparation of this Proxy Statement and its enclosures will
be borne by the Portfolios. The Portfolios also will
reimburse expenses of forwarding solicitation materials to
beneficial owners of shares of the Portfolios.
If the Portfolios record votes by telephone or on the
Internet, they will use procedures designed to authenticate
shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with
their instructions, and to confirm that their instructions
have been properly recorded. Proxies voted by telephone or
on the Internet may be revoked at any time before they are
voted in the same manner that proxies voted by mail may be
revoked.
Proposals of Shareholders
The Company does not hold regular shareholder
meetings. Shareholders wishing to submit proposals for
inclusion in a proxy statement for a shareholder meeting
subsequent to the Special Meeting, if any, should send
their written proposals to the Secretary of the Company at
the address set forth on the cover of this Proxy Statement.
Proposals must be received within a reasonable time before
the solicitation of proxies for such Special Meeting. The
timely submission of a proposal does not guarantee its
inclusion.
Shareholders' Request for Special Meeting
Special meetings of shareholders for any purpose or
purposes, unless otherwise prescribed by statute or by the
Company's Charter, may be held at any place within the
United States and may be called at any time at the request
in writing of shareholders entitled to cast at least 10% of
the votes entitled to be cast at the meeting upon payment
by such shareholders to the Company of the reasonably
estimated cost of preparing and mailing a notice of the
meeting (which estimated cost shall be provided to such
shareholders by the Secretary of the Company). A written
request shall state the purpose or purposes of the proposed
meeting.
Other Matters To Come Before the Special Meeting
The Company does not intend to present any other
business at the Special Meeting, nor is it aware that any
shareholder intends to do so. If, however, any other
matters are properly brought before the Special Meeting,
the persons named in the accompanying proxy card will vote
thereon in accordance with their judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL
MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE (UNLESS THEY ARE VOTING BY TELEPHONE
OR THROUGH THE INTERNET).
By Order of the Board of Directors,
Christina T. Sydor
Secretary
ANNEX A
Conservative Portfolio - Class A
Travelers Insurance Company
Separate Account QPN 401(k)
One Tower Square
Hartford, CT 06183
Attn: Roger Ferland
owned 325,707.415 shares (5.9270%)
Income Portfolio - Class L
Frontier Trust Company as Trustee
Citizens State Bank Salary Savings
111 Monument Circle, Suite 3100
Indianapolis, IN 46204
Owned 27,048.635 (8.4468%)
Rita Diana
SSB IRA Custodian
108 Palmetto Lane Road
Milford, PA 18337
Owned 18,406.522 (5.7480%)
Balanced Portfolio - Class A
Travelers Insurance Company
Separate Account QPN 401(k)
One Tower Square
Hartford, CT 06183
Attn: Roger Ferland
owned 1,019,304.315 shares (5.8346%)
EXHIBIT A
SMITH BARNEY ALLOCATION SERIES INC.
__________ PORTFOLIO
ASSET ALLOCATION AND ADMINISTRATION AGREEMENT
AGREEMENT, made this __ day of January 2001 between
Smith Barney Allocation Series Inc., a Maryland corporation
(the "Fund"), with respect to the _______ Portfolio (the
"Portfolio") and SSB Citi Fund Management LLC, a Delaware
limited liability company ("SSB Citi").
W I T N E S S E T H:
WHEREAS, the Portfolio is a series of the Fund which
will operate as an open-end management investment company
registered under the Investment Company Act of 1940, as
amended, and the rules thereunder (the "1940 Act"); and
WHEREAS, the Fund has been organized for the purpose
of investing its assets in (a) open-end management
investment companies or series thereof that are or will be
part of a group of investment companies that holds itself
out to investors as related companies for purposes of
investment and investor services (i) for which Salomon
Smith Barney Inc. ("Salomon Smith Barney") or any entity
controlling, controlled by, or under common control with
Salomon Smith Barney now or in the future acts as principal
underwriter or (ii) for which Salomon Smith Barney or SSB
Citi or any entity controlling, controlled by, or under
common control with Salomon Smith Barney or SSB Citi now or
in the future acts as investment adviser (collectively, the
"Underlying Smith Barney Funds") and (b) repurchase
agreements, and the Fund desires to avail itself of the
experience, sources of information, advice, assistance and
facilities available to SSB Citi and to have SSB Citi perform
for it various asset allocation and administration services;
and SSB Citi is willing to furnish such advice and services
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is agreed as follows:
1. The Fund on behalf of the Portfolio hereby
appoints SSB Citi to act as investment adviser to the
Portfolio on the terms set forth in this Agreement. SSB Citi
accepts such appointment and agrees to render the services
herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of
Directors of the Fund (the "Board"), SSB Citi shall manage
the investment of the Portfolio's assets and provide
investment research advice and supervision of the Portfolio's
investments in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the Fund's
Registration Statement under the 1940 Act as it may be
amended from time to time (the "Registration Statement"), and
subject to the following understandings:
(a) SSB Citi shall provide supervision of the Portfolio's
investments and determine from time to time the
investments or securities that will be purchased,
retained or sold by the Portfolio. SSB Citi shall
determine the percentage of the Portfolio's assets
invested from time to time in (i) each Underlying
Smith Barney Fund selected by the Board pursuant to
the investment objective and policies of the
Portfolio as set forth in the prospectus forming part
of the Registration Statement and (ii) repurchase
agreements. SSB Citi shall allocate investments for
the Portfolio among the Underlying Smith Barney Funds
and repurchase agreements based on factors it
considers relevant, including its outlook for the
economy, financial markets and the relative
performance of the Underlying Smith Barney Funds.
The allocation among the Underlying Smith Barney
Funds shall be made within investment ranges
established by the Board, which will designate
minimum and maximum percentages for each of the
Underlying Smith Barney Funds.
SSB Citi will also make recommendations to the Board
concerning changes to (i) the Underlying Smith Barney
Funds in which the Portfolio may invest, (ii) the
percentage range of assets that may be invested by
the Portfolio in any one Underlying Smith Barney Fund
and (iii) the percentage range of assets of the
Portfolio that may be invested in equity funds and
fixed income funds (including money market funds).
(b) SSB Citi shall use its best judgment in the performance
of its duties under this Agreement.
(c) SSB Citi undertakes to perform its duties and
obligations under this Agreement in conformity with the
Registration Statement, with the requirements of the
1940 Act and all other applicable Federal and state laws
and regulations and with the instructions and directions
of the Board.
(d) SSB Citi shall maintain books and records with respect
to the Portfolio's investment transactions and such
other books and records required to be maintained by SSB
Citi pursuant to the Rules of the Securities and
Exchange Commission ("SEC") under the 1940 Act and SSB
Citi shall render to the Board such periodic and special
reports as the Board may reasonably request. SSB Citi
agrees that all books and records that it maintains for
the Portfolio or the Fund are the property of the Fund
and it will surrender promptly to the Fund on behalf of
the Portfolio any of such books and records upon the
Fund's request.
(e) SSB Citi will (i) maintain office facilities for the
Fund, (ii) furnish the Portfolio with statistical and
research data, clerical help and accounting, data
processing, bookkeeping, internal auditing and legal
services and certain other services required by the
Fund and the Portfolio, (iii) prepare reports to each
Portfolio's shareholders and (iv) prepare tax returns,
reports to and filings with the SEC and state Blue Sky
authorities.
3. SSB Citi will bear all of the expenses of its
employees and overhead in connection with its duties under
this Agreement.
4. For the services provided and the expenses
assumed pursuant to this Agreement, the Fund will pay to
SSB Citi out of the assets of the Portfolio a monthly fee
in arrears equal to 0.20% per annum of the Portfolio's
average daily net assets during the month.
5. SSB Citi shall authorize and permit any of its
directors, officers and employees who may be elected as
directors or officers of the Fund to serve in the capacities
in which they are elected.
6. SSB Citi shall not be liable for any error of
judgment or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except a
loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services (in which case
any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 1940 Act) or a
loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties
under this Agreement.
7. This Agreement shall commence January __, 2001 and
shall continue in effect for a period of two years from its
effective date, and if not sooner terminated, will continue
in effect for successive periods of 12 months thereafter,
provided that each continuance is specifically approved at
least annually in conformity with the requirements of the
1940 Act. This Agreement may be terminated as a whole at any
time by the Fund on behalf of the Portfolio, without the
payment of any penalty, upon the vote of a majority of the
Board or the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Portfolio, or
by SSB Citi, on 60 days' written notice by either party to
the other. This Agreement shall terminate automatically in
the event of its assignment (as defined in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict
the right of any of SSB Citi's directors, officers, or
employees who may also be a director, officer or employee of
the Fund to engage in any other business or to devote his or
her time and attention in part to management or other aspects
of any business, whether of a similar or a dissimilar nature,
nor limit or restrict the Manager's right to engage in any
other business or to render services of any kind to any other
corporation, firm, individual or association. The investment
management services provided by SSB Citi hereunder are not to
be deemed exclusive, and SSB Citi shall be free to render
similar services to others.
9. Any notice or other communication required to be
given pursuant to this Agreement shall be deemed duly given
if delivered or mailed by registered mail, postage prepaid,
(i) to SSB Citi at 7 World Trade Center, New York, New York
10048, Attention: Secretary; or (ii) to the Fund at 388
Greenwich Street, New York, New York 10013, Attention:
Secretary.
10. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without
giving effect to the conflict of law rules thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
SMITH BARNEY ALLOCATION SERIES INC.
on behalf of the ___________ Portfolio
By: ___________________________________
Heath B. McLendon
Chairman of the Board
Attest: _________________________________
_________________________________
Christina T. Sydor
Secretary
SSB Citi Fund Management LLC
By: ___________________________________
Heath B. McLendon
President
Attest: _________________________________
Christina T. Sydor
General Counsel
FORM OF PROXY CARD
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
..................................................................
..................................................................
..............................
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
Smith Barney Allocation Series Inc.
_______ Portfolio
This Proxy is Solicited on Behalf
of the Directors of Smith Barney
Allocation Series Inc.
The undersigned holder of shares of the _______ Portfolio (the
"Portfolio"), a portfolio of the Smith Barney Allocation Series
Inc., a Maryland corporation, hereby appoints Heath B. McLendon,
Christina T. Sydor, and Barbara J. Allen, and each of them, with
full power of substitution, attorneys and proxies for the
undersigned to vote all shares of the Portfolio that the
undersigned is entitled in any capacity to vote at the special
meeting of shareholders of the Portfolio and at any and all
adjournments or postponements thereof (the "Special Meeting") to
be held at the offices of the investment adviser for the
Portfolio, SSB Citi Fund Management LLC, Downtown Conference
Center, Lobby, 7 World Trade Center, New York, New York, 10048 on
January 23, 2001 at 9:00 A.M. Eastern time. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and
Proxy Statement dated November __, 2000 and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In
their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Special Meeting. A
majority of the proxies present and acting at the Special Meeting
in person or by substitute (or, if only one shall be so present,
then that one) shall have and may exercise all the power and
authority of said proxies hereunder. The undersigned hereby
revokes any proxy previously given.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at
hand.
2) Call 1-800-___-____.
3) Enter the [__-digit] control number set forth on the Proxy
card and follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at
hand.
2) Go to Website www.__________.com.
3) Enter the [__-digit] control number set forth on the Proxy
card and follow the simple instructions.
DO NOT RETURN YOUR PROXY CARD
IF YOU VOTE BY TELEPHONE OR INTERNET.
PLEASE SIGN, DATE AND
RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE
(UNLESS VOTING BY
TELEPHONE OR THE
INTERNET)
NOTE: PLEASE SIGN
EXACTLY AS YOUR NAME
APPEARS ON THIS PROXY.
IF JOINT OWNERS, EITHER
MAY SIGN THIS PROXY.
WHEN SIGNING AS
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE,
GUARDIAN OR CORPORATE
OFFICER, PLEASE GIVE
YOUR FULL TITLE.
DATE:
________________________
__________________
________________________
________________________
________________________
________________________
(Signature(s), Title(s),
if applicable)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
..................................................................
..................................................................
..............................
Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the manner
directed herein by the
undersigned
shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
All ABSTAIN votes will be counted in determining the existence of
a quorum but as votes
AGAINST the proposal.
Please refer to the Proxy Statement for a discussion of the
Proposal.
1. APPROVAL OF A NEW ASSET ALLOCATION AND FOR AGAINST
ABSTAIN
ADMINISTRATION AGREEMENT WITH SSB CITI
FUND MANAGEMENT LLC ON BEHALF OF THE PORTFOLIO.
Please sign on the reverse side. XXX
