Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
Salomon Brothers Capital Fund Inc
(Name of Registrant as Specified In Its charter)
Payment of Filing Fee (check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
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:
(5) Total fee paid:
Fee paid previously with preliminary materials.
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 statements
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:
<PAGE>
(4) Date Filed:
<PAGE>
Salomon Brothers Capital Fund Inc
7 World Trade Center, New York, New York 10048
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
August _____, 1996
To the Stockholders:
Notice is hereby given that a special meeting (the "Meeting") of
stockholders of Salomon Brothers Capital Fund Inc (the "Fund") will be held at
7 World Trade Center, New York, New York on September 30, 1996 at 10:00 a.m.,
New York time. A Proxy Statement which provides information about the purpose
of the Meeting and a proxy card for you to cast your votes are included with
this notice. The Meeting will be held for the purposes of considering and
voting upon:
1. Amendments to the Fund's Articles of Incorporation to permit
implementation by the Fund of a multi-class distribution system for its
shares (Proposal 1);
2. Amendment to the Fund's Articles of Incorporation to reduce the
par value of the Fund's common stock from $1.00 to $.001 (Proposal 2); and
3. Any other business that may properly come before the Meeting.
The Board of Directors of the Fund recommends that you vote "FOR"
Proposals 1 and 2. The close of business on July 23, 1996 has been fixed as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting.
By Order of the Board of Directors,
Tana E. Tselepis
Secretary
TO AVOID UNNECESSARY EXPENSE OR FURTHER SOLICITATION, WE URGE YOU to
indicate voting instructions on the enclosed proxy, date and sign it and
return it promptly in the envelope provided, no matter how large or small
your holdings may be.
<PAGE>
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 Fund 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 a name shown in the
registration.
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. . . . . . . . . . . . . . . . . . . John Doe
c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan . . . . . . . . John Doe, Trustee
Trust Accounts
(1) ABC Trust . . . . . . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee . . . . . . . . . . . . Jane B. Doe
u/t/d 12/28/78
Custodial or Estate Accounts
(1) John B. Smith Cust . . . . . . . . . . . . . John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith . . . . . . . . . . . . . . . . John B. Smith, Jr., Executor
<PAGE>
Salomon Brothers Capital Fund Inc
7 World Trade Center, New York, New York 10048
____________________
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation by the Board of Directors of Salomon Brothers Capital Fund Inc
(the "Fund") of proxies to be used at a special meeting (the "Meeting") of
stockholders to be held at 7 World Trade Center, New York, New York, on
September 30, 1996 at 10:00 a.m., New York time (and at any adjournment or
adjournments thereof). This proxy statement and the accompanying form of proxy
are first being mailed to stockholders on or about August ____, 1996.
Stockholders who execute proxies retain the right to revoke them in person at
the Meeting or by written notice received by the Secretary of the Fund at any
time before they are voted. Unrevoked proxies will be voted in accordance with
the specifications thereon and, unless specified to the contrary, will be voted
FOR Proposals 1 and 2. The close of business on July 23, 1996 has been fixed
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Meeting. Each stockholder is entitled
to one vote for each full share and an appropriate fraction of a vote for each
fractional share held. As of the Record Date, there were 5,827,469.419 shares
of Common Stock issued and outstanding.
In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares represented at the Meeting in person or by proxy. The persons named as
proxies will vote those proxies which they are entitled to vote FOR or AGAINST
any such proposal to adjourn to another date in their discretion. A
stockholder vote may be taken on one or more proposals in this proxy statement
prior to any such adjournment if sufficient votes have been received for
approval. Under the By-Laws of the Fund, a quorum is constituted by the
presence in person or by proxy of the holders of record of a majority of the
outstanding shares of Capital Stock of the Fund entitled to vote at the
Meeting. Abstentions and Broker Non-Votes (reflected by signed but unvoted
proxies), as defined below, do not count as votes cast with respect to any
proposal. With respect to a proposal requiring the affirmative vote of a
majority of the outstanding shares of Capital Stock, the effect of abstentions
and Broker Non-Votes is the same as a vote against such proposal. "Broker
Non-Votes" are shares held by a broker or nominee as to which instructions have
not been received from the beneficial owners or persons entitled to vote and
the broker or nominee does not have discretionary voting power.
The Fund's investment manager and administrator is Salomon
Brothers Asset Management Inc, 7 World Trade Center, New York, New York 10048.
The Fund will furnish without charge a copy of its Annual Report
for the fiscal year ended December 31, 1995, to any stockholder requesting the
report. Such requests should be made in writing to the Fund at the address
above or by calling 1-800-SALOMON (1-800-725-6666).
Proposal 1: Amendments to the Fund's
<PAGE>
Articles of Incorporation to Permit Implementation by the Fund
of a Multi-Class Distribution System for its Shares
The Board of Directors has determined that it is in the best
interests of the Fund and its stockholders for the Fund to seek to attract new
investors and assets to the Fund by facilitating distribution of the Fund's
shares through the issuance of multiple classes of shares with different
distribution and sales charge options (a "Multiple Pricing System"). Although
the Multiple Pricing System would allow the Fund flexibility to implement
various distribution alternatives suited to the needs of particular investors,
it would not alter the ability of current stockholders to purchase additional
Fund shares without paying any sales charge or any distribution or service fees
pursuant to a Rule 12b-1 Plan nor would it impose any such sales charge or any
distribution or service fees on current stockholders' assets. Indeed, the
Board believes that implementation of a Multiple Pricing System should benefit
current stockholders over time by increasing the Fund's economies of scale by
spreading fixed costs over a larger asset base. The Directors have further
determined that in order to achieve these results, several amendments to the
Fund's Articles of Incorporation are required. Accordingly, at a meeting of
the Board of Directors held on July 16, 1996, the Directors, including a
majority of the Directors who are not "interested persons," as such term is
defined under the Investment Company Act of 1940, as amended (the "1940 Act"),
approved amendments to the Fund's Articles of Incorporation, which are
described below, to permit implementation of the Multiple Pricing System and
recommended that these amendments be submitted to the stockholders of the Fund
for their approval.
Purpose of Multiple Pricing System
The purpose of implementing the Multiple Pricing System is to
attract more investment dollars to the Fund and facilitate distribution of the
Fund's shares by offering the investing public different purchasing options for
shares of the Fund. Under the proposed Multiple Pricing System, a new investor
would be able to choose the method of purchasing shares that is most beneficial
given the amount of his or her purchase, the length of time the investor
expects to hold his or her shares, and other relevant circumstances.
Accordingly, the Directors believe that the implementation of the proposed
Multiple Pricing System will better enable the Fund to meet the competitive
demands of today's financial services industry. In addition, if the Fund were
required to organize separate portfolios to provide additional distribution
flexibility instead of adding new classes of shares to the existing portfolio,
the success of such new portfolio might be limited. Under the proposed
Multiple Pricing System, new investors would be able to benefit from the
additional stability resulting from their ability to invest in an established,
sizeable investment fund and from the potential economies of scale resulting
from a larger investment portfolio.
The management of the Fund, the rate of the advisory fees payable
by current (and new) stockholders of the Fund and the Fund's investment
objective, policies and techniques will not be affected by the implementation
of the Multiple Pricing System.
Description of Multiple Pricing System
Under the Multiple Pricing System, three new classes of shares of
the Fund would initially be offered to the public. Each class of shares of the
Fund would represent interests in the same portfolio of investments, and would
<PAGE>
be identical in all respects, except for the compensation and other
arrangements permitted by different service and distribution plan fees for each
class, as described below, voting rights with respect to any matter
specifically affecting a class, the impact of any expenses directly
attributable to a class and any differences in features for purchasing,
redeeming, exchanging or converting shares of each class and/or in distribution
arrangements for the offer and sale of such shares.
"Class A" shares would be offered for sale at net asset value per
share plus a front end sales charge of up to 4.75% subject to certain
reductions set forth in the Prospectus. In addition, Class A shares would be
subject to an ongoing service fee at an annual rate of .25% of their respective
average daily net assets. Certain purchases of Class A shares qualify for a
waived or reduced front end sales charge. Where the front end sales charge has
been waived for purchases of $1 million or more, a contingent deferred sales
charge ("CDSC") of 1% will be charged for redemptions made within one year of
purchase.
"Class B" shares would be offered for sale for purchases of less
than $250,000. Class B shares would be offered for sale at net asset value per
share without a front end sales charge but would be subject to a CDSC of 5% if
redeemed during the first or second year after purchase, and declining each
year thereafter to 0% after the sixth year. Class B shares would also be
subject to an ongoing distribution fee at an annual rate of .75% of their
respective average daily net assets and a service fee at an annual rate of .25%
of their respective average daily net assets. In addition, Class B shares
would automatically convert to Class A shares six years after purchase.
"Class C" shares would be offered for sale for purchases of less
than $1,000,000. Class C shares would be offered for sale at net asset value
per share without a front end sales charge, would be subject to a CDSC of 1% if
redeemed within the first year of purchase, and would be subject to an ongoing
distribution fee at an annual rate of .75% of their respective average daily
net assets and a service fee at an annual rate of .25% of their respective
average daily net assets. In addition, Class C shares would automatically
convert to Class A shares ten years after purchase.
If the Multiple Pricing System is implemented, the existing shares
of the Fund would be reclassified as Class O shares of the Fund. Class O
shares will not be subject to any sales charges or distribution or service fees
pursuant to a Rule 12b-1 Plan. Only Class O stockholders will be permitted to
purchase additional Class O shares.
The following table presents the key features of each new class:
Rule 12b-1 Fees
Service
Fee Distribution Conversion
Class Sales Charge Fee Feature
A Front End (CDSC of 1% .25% None None
during the first year
for purchases of $1
million or more)
<PAGE>
B 6 year CDSC .25% .75% Converts to
Class A after 6
years
C CDSC of 1% within one .25% .75% Converts to
year of purchase Class A after 10
years
O None None None None
(existing
shares)
Under the proposed Multiple Pricing System, shares of each class
of the Fund (including Class O shares) would be exchangeable for shares of the
same class of the other funds included in the Salomon Brothers Investment
Series, but would not be exchangeable for shares of a different class of any
other fund. As a result, Class O shareholders of the Fund would be eligible to
exchange their Class O shares for, or to purchase, Class O shares of other
funds included in the Salomon Brothers Investment Series and avoid any sales
charges or distribution or service fees pursuant to a Rule 12b-1 Plan. The
Salomon Brothers Investment Series currently includes the Salomon Brothers Cash
Management Fund, the Salomon Brothers New York Municipal Bond Fund, the Salomon
Brothers National Intermediate Municipal Fund, the Salomon Brothers U.S.
Government Income Fund, the Salomon Brothers High Yield Bond Fund, the Salomon
Brothers Strategic Bond Fund, the Salomon Brothers Total Return Fund, the
Salomon Brothers Asia Growth Fund, the Salomon Brothers Investors Fund and will
include the Salomon Brothers New York Municipal Money Market Fund and, if
stockholders approve this proposal, the Fund.
To permit the implementation of the Multiple Pricing System, the
Board of Directors, at a meeting held on July 16, 1996, considered and approved
distribution and/or service plans pursuant to Rule 12b-1 under the 1940 Act for
Class A shares, Class B shares and Class C shares of the Fund, to reflect the
different distribution and service fees to be borne by each such class of
shares as described above. These service and distribution plans will not
become effective unless and until the Fund implements the Multiple Pricing
System.
Expense Information
The following tables are intended to assist investors in
understanding the various costs and expenses that would be applicable to each
class of shares of the Fund. The tables correspond to those presently included
in the first several pages of the Fund's prospectus and, with the exception of
the column entitled "Current," are indicative of the anticipated changes to the
current tables that will be made if this proposal is approved.
Pro Forma
Class
O(a)
(existi
ng Class
Current shares) Class A Class B C
<PAGE>
SHAREHOLDER TRANSACTION
EXPENSES*
Maximum Sales Charge Imposed on
Purchases (as
a percentage of offering 4.75%(b
price) None None ) None None
Maximum Sales Charge Imposed
on Reinvested Dividends None None None None None
Contingent Deferred Sales Charge None None 1% 5% 1%
(as a during first during
percentage of original the year, the
purchase price or redemption first 5% first
price, whichever is lower) year second year
for year,
purchas 4%
es of third
$1 mill year,
ion or 3%
more fourth
year,
2%
fifth
year,
1%
sixth
year,
and
0%
after
sixth
year
Redemption Fees None None None None None
Exchange Fee None None None None None
(a) Only Class O shareholders are permitted to purchase additional Class O
shares.
(b) Reduced for purchases of $50,000 and over, decreasing to 0% for purchases
of $1,000,000 and over.
* Under certain circumstances, certain broker/dealers may impose transaction
fees on the purchase and/or sale of shares.
The following table sets forth the expenses incurred by
the Fund for its fiscal year ended December 31, 1995 and also sets forth pro
forma expenses of the Fund assuming the Multiple Pricing System had been in
effect during this period.
Pro Forma
Class O
(existi
ng
Current shares) Class A Class B Class C
<PAGE>
ANNUAL FUND OPERATING
EXPENSES
Management Fees 1.00% 1.00% 1.00% 1.00% 1.00%
Rule 12b-1 fees N/A N/A .25% 1.00% 1.00%
Other expenses* .36% .36% .36% .36% .36%
Total 1.36% 1.36% 1.61% 2.36% 2.36%
* "Other expenses" includes fees for shareholder services, custodial fees,
legal and accounting fees, printing costs and registration fees.
The following example illustrates your expenses on a Fund
investment both currently and under the proposed Multiple Pricing System,
assuming annual expenses set forth in the preceding table. The example should
not be considered a representation of past or future expenses. Actual expenses
may be greater or less than those shown.
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:
Pro Forma
Class O Class B
(existing No Class
Current shares) Class A* Class B** Redemption C**
1 Year $ 14 $ 14 $ 63 $ 74 $ 24 $ 34
3 Years $ 43 $ 43 $ 96 $114 $ 74 $ 74
5 Years $ 74 $ 74 $131 $146 $126 $126
10 Years $164 $164 $230 $234*** $234*** $270
* Assumes deduction at the time of purchase of the maximum 4.75% sales
charge.
** Assumes deduction at the time of redemption of the maximum CDSC applicable
for that time period.
*** Reflects the conversion to Class A shares six years after purchase, and
therefore years seven through ten reflect Class A expenses.
Proposed Amendments to Articles of Incorporation
The proposed amendments provide, among other things, that the
Directors have the authority, without further action or approval of the
stockholders, to divide the shares of the Fund into classes, to fix and
determine the different rights and preferences between the different classes of
shares of the Fund, and provide that certain expenses specifically allocable to
a particular class of the Fund's shares may be so allocated to such class. The
proposed amendments will enable the Fund to issue multiple classes of shares on
a basis similar to that of other funds that have adopted multi-class
distribution systems. A copy
of the proposed amendments to the Fund's Articles of Incorporation is attached
as Exhibit A to this Proxy Statement.<F1>
<PAGE>
As part of the Multiple Pricing System, the proposed amendments
also clarify that the front end sales charge may, if the Board of Directors so
determines, be waived for certain qualified purchasers such as officers,
directors and employees of the Fund or of organizations furnishing managerial,
supervisory or distribution services to the Fund. A waiver of the sales charge
for these types of qualified purchasers is consistent with industry practice,
provides an incentive to parties associated with the Fund to work hard in the
interest of the Fund and, in the Board's view, is appropriate in that no
additional distribution costs are incurred in selling to purchasers
knowledgeable about the Fund's objective, policies and operations.
The proposed amendments to the Articles of Incorporation will
also permit the Board of Directors to increase or decrease the authorized
common stock of the Corporation and to classify and reclassify shares of the
Fund into additional classes of common stock at a future date. The Board of
Directors currently has no current intention of increasing or decreasing the
authorized common stock or of creating any classes of common stock other than
the classes discussed above.
Management of the Fund plans to implement the Multiple Pricing
System by amending the Fund's Registration Statement on Form N-1A and the
related Prospectus. The proposed Multiple Pricing System described above may
be modified if the Board determines it is in the best interests of the Fund and
its stockholders.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENTS TO THE
FUND'S ARTICLES OF INCORPORATION TO PERMIT IMPLEMENTATION BY THE FUND OF A
MULTI-CLASS DISTRIBUTION SYSTEM FOR ITS SHARES.
Required Vote
Approval of the proposed amendments to the Fund's Articles of
Incorporation will require the affirmative vote of more than 50% of the
outstanding shares of the Fund entitled to vote thereon.
In the event the stockholders do not approve this proposal and
the Multiple Pricing System is not adopted, the Fund will continue to offer a
single class of shares of common stock.
Proposal 2: Amendment to the Fund's Articles of Incorporation to Reduce the
Par Value of the Fund's Common Stock
from $1.00 to $.001
In addition to the proposed amendments to the Articles of
Incorporation set forth in Proposal 1, the Board of Directors has determined
that it is also in the best interests of the Fund to amend the Articles of
Incorporation to reduce the par value of the Fund's shares from $1.00 to $.001.
The reason for the proposed amendment is that if the Fund is ever required to
increase its authorized number of shares of common stock, the State of
Maryland, the Fund's jurisdiction of incorporation, will charge a fee based on
the increase in the aggregate par value of the Fund. Therefore, with a reduced
par value, the Fund would incur a lower fee if it ever increases its authorized
number of shares.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENT TO THE FUND'S
<PAGE>
ARTICLES OF INCORPORATION TO REDUCE THE PAR VALUE OF THE FUND'S COMMON STOCK
FROM $1.00 TO $.001.
Required Vote
Approval of the proposed amendment to the Fund's Articles of
Incorporation will require the affirmative vote of more than 50% of the
outstanding shares of the Fund entitled to vote thereon.
In the event the stockholders do not approve this proposal, the
par value of the Fund's common stock will remain at $1.00.
Other Business
The Board of Directors of the Fund does not know of any other
matter which may come before the Meeting. If any other matter properly comes
before the Meeting, it is the intention of the persons named in the proxy to
vote the proxies in accordance with their judgment on that matter.
Share Ownership
The following table sets forth, as of July 29, 1996, shares of
the Fund owned beneficially by, and certain other share ownership information
with respect to, Directors of the Fund and all executive officers and Directors
as a group. As of this date, the executive officers and Directors of the Fund
owned, individually and in the aggregate, less than 1% of the outstanding
shares of the Fund. As of July 17, 1996, Salomon Inc's Profit Sharing Plan,
whose business address is Seven World Trade Center, New York, NY 10048, was
the record owner of approximately 51.5% of the outstanding shares of the Fund.
Number of Shares
Beneficially Owned
As of July 29,
Beneficial Owner 1996
Charles F. Barber 12,327.965
Andrew L. Breech --
Thomas W. Brock --
Carol L. Colman 350.697
William R. Dill 609.775
Michael S. Hyland --
Clifford M. Kirtland, Jr. --
Robert W. Lawless --
Louis P. Mattis 735.228
Thomas F. Schlafly 4,320.413
Richard E. Dahlberg --
Allan R. White, III --
Ross S. Margolies --
Lawrence H. Kaplan --
All executive officers and
Directors as
a group 18,144.078
Proposals to be Submitted by Stockholders
<PAGE>
The Fund does not generally hold an Annual Meeting of
Stockholders. Stockholders wishing to submit proposals for inclusion in a
proxy statement for a subsequent stockholders' meeting should send their
written proposals to the Secretary of the Fund at the address set forth on the
cover of the proxy statement.
Expenses of Proxy Solicitation
The costs of preparing, assembling and mailing material in
connection with this solicitation of proxies will be borne by the Fund.
Proxies may also be solicited personally by officers of the Fund and by regular
employees of Salomon Brothers Asset Management Inc or its affiliates, or other
representatives of the Fund by telephone or telegraph, in addition to the use
of the mails. Brokerage houses, banks and other fiduciaries may be requested
to forward proxy solicitation material to their principals to obtain
authorization for the execution of proxies, and they will be reimbursed by the
Fund for out-of-pocket expenses incurred in this connection. [D.F. King & Co.,
Inc. has been retained to assist in the solicitation of proxies at a fee to be
paid by the Fund and estimated at $______, plus disbursements.]
August __, 1996
<PAGE>
____________________
[FN]
<F1> As a result of amending and restating the Articles of Incorporation,
certain paragraph numbers have changed without any substantive effect.
<PAGE>
EXHIBIT A
(Restated through April 30, 1990 with proposed 1996 amendments
for classes and related changes)
SALOMON BROTHERS CAPITAL FUND INC
ARTICLES OF AMENDMENT AND RESTATEMENT
SALOMON BROTHERS CAPITAL FUND INC, a Maryland corporation, having its
principal office in Baltimore City, Maryland (which is hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended and restated in
its entirety to read as follows:
* * * * * *
RESTATED ARTICLES OF INCORPORATION
of
SALOMON BROTHERS CAPITAL FUND INC
THIS IS TO CERTIFY:
FIRST: The name of the corporation (the "Corporation") is Salomon
Brothers Capital Fund Inc.
SECOND: The purpose or purposes for which the Corporation is
formed and the business or objects to be transacted, carried on and promoted by
it are as follows:
1. To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, assign,
negotiate, lend, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of these Articles, without limitation of the generality thereof,
be deemed to include any stocks, shares, bonds, debentures, notes,
mortgages or other obligations, and any certificates, receipts, options,
warrants or other instruments representing rights to receive, purchase or
subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets) created or issued by any
persons, firms, associations, corporations, syndicates, combinations,
organizations, governments or subdivisions thereof; and to exercise, as
owner or holder of any securities, all rights, powers and privileges in
respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of any and
all such securities.
2. To issue and sell shares of its own capital stock in such
amounts and on such terms and conditions, for such purposes and for such
<PAGE>
amount or kind of consideration (including, without limitation thereto,
securities) now or hereafter permitted by the laws of Maryland and by
these Articles of Incorporation, as its Board of Directors in its
discretion may determine.
3. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue, retire or cancel (all without the vote or consent of
the stockholders of the Corporation) shares of its capital stock, in any
manner and to the extent now or hereafter permitted by the laws of
Maryland and by these Articles of Incorporation.
4. To conduct its business in all its branches at one or more
offices in Maryland and elsewhere in any part of the world, without
restriction or limit as to extent.
5. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or, to the extent now or
hereafter permitted by the laws of Maryland, as a member of, or as the
owner or holder of any stock of, or shares of interest in, any firm,
association, corporation, trust or syndicate; and in connection therewith
to make or enter into such deeds or contracts with any persons, firms,
associations, corporations, syndicates, governments or subdivisions
thereof, and to do such acts and things and to exercise such powers, as a
natural person could lawfully make, enter into, do or exercise.
6. To do any and all such further acts and things and to exercise
any and all such further powers as may be incidental, relative or
conducive to, or necessary, appropriate or desirable for, the
accomplishment, carrying out or attainment of all or any of the foregoing
purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to, or
inference from, the terms of any other clause of this or any other Article of
these Articles of Incorporation, and shall each be regarded as independent, and
construed as powers as well as objects and purposes, and the enumeration of
specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of
the Corporation now or hereafter conferred by the laws of the State of
Maryland, nor shall the expression of one thing be deemed to exclude another,
though it be of like nature, not expressed; provided, however, that the
Corporation shall not have the power to carry on within the State of Maryland
any business whatsoever the carrying on of which would preclude it from being
classified as an ordinary business corporation under the laws of said State;
nor shall it carry on any business, or exercise any powers, in any other state,
territory, district or country except to the extent that the same may lawfully
be carried on or exercised under the laws thereof.
THIRD: The post office address of the principal office of the
Corporation in the State of Maryland is 32 South Street, Baltimore, Maryland
21202.
FOURTH: The resident agent of the Corporation in the State of
Maryland is The Corporation Trust Incorporated, whose post office address is 32
South Street, Baltimore, Maryland 21202. Such resident agent is a corporation
of the State of Maryland.
<PAGE>
FIFTH: 1. The total number of shares of stock of all classes which
the Corporation initially has authority to issue is 25,000,000 shares of
capital stock (par value $.001 per share), amounting in aggregate par value to
$25,000,000. All of such shares are initially classified as "Common Stock".
The Common Stock (unless otherwise specified in the articles supplementary
designating such Class) shall initially have four classes of shares, which
shall be designated "Class A Common Stock", "Class B Common Stock", "Class C
Common Stock" and "Class O Common Stock" each consisting, until further
changed, of the lesser of (x) 25,000,000 shares or (y) the number of shares
that could be issued by issuing all of the shares of Common Stock currently or
hereafter classified less the total number of shares of Common Stock of all
other classes then issued and outstanding. Any Class of Common Stock shall be
referred to herein individually as a "Class" and collectively, together with
any further class or classes of Common Stock from time to time established, as
the "Classes".
2. Unless otherwise prohibited by law, so long as the Corporation
is registered as an open-end company under the Investment Company Act of
1940, as amended (the "Investment Company Act"), the Board of Directors
shall have the power and authority, without the approval of the holders of
any outstanding shares, to increase or decrease the number of shares of
capital stock or the number of shares of capital stock of any class that
the Corporation has authority to issue.
3. The Board of Directors may classify or reclassify any unissued
shares of capital stock (whether or not such shares have been previously
classified or reclassified) from time to time by setting or changing in
any one or more respects the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
or terms or conditions of redemption of such shares of stock.
4. The following is a description of the preferences, conversion
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption of the
shares of Common Stock of the Corporation (unless provided otherwise by
the Board of Directors with respect to any such additional Classes at the
time it is established and designated):
(a) Dividends and Distributions. Dividends and capital gains
distributions on shares of Common Stock may be paid with such
frequency, in such form and in such amount as the Board of Directors
may determine by resolution adopted from time to time, or pursuant to
a standing resolution or resolutions adopted only once or with such
frequency as the Board of Directors may determine. All dividends and
distributions on shares of Common Stock shall be distributed to the
holders of Common Stock held by such holders at the date and time of
record established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure, the Board of Directors may
determine that no dividend or distribution shall be payable on shares
as to which the stockholder's purchase order and/or payment have not
been received by the time or times established by the Board of
Directors under such program or procedure.
<PAGE>
Dividends and distributions may be paid in cash, property or
additional shares of Common Stock of the same or another Class, or a
combination thereof, as determined by the Board of Directors or
pursuant to any program that the Board of Directors may have in
effect at the time for the election by stockholders of the form in
which dividends or distributions are to be paid. Any such dividend
or distribution paid in shares shall be paid at the current net asset
value thereof.
(b) Voting. On each matter submitted to a vote of the
stockholders, each holder of shares of common Stock shall be entitled
to one vote for each share standing in his name on the books of the
Corporation, irrespective of the Class thereof, and all shares of all
Classes shall vote as a single class ("Single Class Voting");
provided, however, that (i) as to any matter with respect to which a
separate vote of any Class is required by the Investment Company Act
or by the Maryland General Corporation Law, such requirement as to a
separate vote by that Class shall apply in lieu of Single Class
Voting; (ii) in the event that the separate vote requirement referred
to in clause (i) above applies with respect to one or more Classes,
then, subject to clause (iii) below, the shares of all other Classes
shall vote as a single class; and (iii) as to any matter which does
not affect the interest of a particular Class, only the holders of
shares of the one or more affected Classes shall be entitled to vote.
(c) Redemption by Stockholders. Each holder of shares of
Common Stock shall have the right at such times as may be permitted
by the Corporation to require the Corporation to redeem all or any
part of his shares, at a redemption price per share equal to the net
asset value per share of Common Stock next determined after the
shares are properly tendered for redemption, less such redemption fee
or sales charge, if any, as may be established by the Board of
Directors in its sole discretion. Payment of the redemption price
shall be in cash; provided, however, that if the Board of Directors
determines, which determination shall be conclusive, that conditions
exist which make payment wholly in cash unwise or undesirable, the
Corporation may, to the extent and in the manner permitted by the
Investment Company Act, make payment wholly or partly in securities
or other assets, at the value of such securities or assets used in
such determination of net asset value.
Notwithstanding the foregoing, the Corporation may postpone
payment of the redemption price and may suspend the right of the
holders of shares of Common Stock to require the Corporation to
redeem shares during any period or at any time when and to the extent
permissible under the Investment Company Act.
(d) Redemption by Corporation. The Board of Directors may
cause the Corporation to redeem at their net asset value the shares
of any Common Stock held in an account having, because of redemptions
or exchanges, a net asset value on the date of the notice of
redemption less than a minimum investment specified by the Board of
Directors from time to time in its sole discretion, provided that
prior written notice of the proposed redemption has been given to the
holder of any such account by mail, postage prepaid, at the address
contained in the books and records of the Corporation and such holder
<PAGE>
has been given an opportunity to purchase the required value of
additional shares.
(e) Net Asset Value Per Share. The net asset value per share
of any Class shall be the quotient obtained by dividing the value of
the net assets of that Class (being the value of the securities and
other assets attributable to that Class less the liabilities
attributable to that Class) by the total number of shares of that
Class outstanding, all as determined by or under the direction of the
Board of Directors in accordance with generally accepted accounting
principles and the Investment Company Act. Subject to the applicable
provisions of the Investment Company Act, the Board of Directors, in
its sole discretion, may prescribe and shall set forth in the By-Laws
of the Corporation or in a duly adopted resolution of the Board of
Directors such bases and times for determining the value of the
assets attributable to, and the net asset value per share of
outstanding shares of, each Class, or the net income attributable to
such shares, as the Board of Directors deems necessary or desirable.
The Board of Directors shall have full discretion, to the extent not
inconsistent with the Maryland General Corporation Law and the
Investment Company Act, to determine which items shall be treated as
income and which items as capital and whether any item of expense
shall be charged to income or capital. Each such determination and
allocation shall be conclusive and binding for all purposes.
(f) Equality. All shares of each particular Class shall
represent an equal proportionate interest in the assets attributable
to that Class (subject to the liabilities of that Class), and each
share of any particular Class shall be equal to each other share of
that Class. The Board of Directors may from time to time divide or
combine the shares of any particular Class into a greater or lesser
number of shares of that Class without thereby changing the
proportionate interest in the assets attributable to that Class or in
any way affecting the rights of holders of shares of any other Class.
5. All Classes of Common Stock of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other shares of Common Stock;
provided, however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(a) The Class A Common Stock, Class B Common Stock and Class C
Common Stock shares shall be subject to such front-end sales loads
and/or contingent deferred sales charges as may be established from
time to time by the Board of Directors in accordance with the
Investment Company Act and applicable rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD").
(b) The Class O Common Stock shares shall not be subject to
front-end sales loads or contingent deferred sales charges.
(c) Expenses related solely to a particular Class (including,
without limitation, expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement,
plan or other arrangement, however designated) shall be borne by that
Class and shall be appropriately reflected (in the manner determined
<PAGE>
by the Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that Class.
(d) On the sixth anniversary of the first business day of the
month following the month in which Class B Common Stock shares were
purchased by a stockholder, such Class B Common Stock shares (as well
as a pro rata portion of any Class B Common Stock shares purchased
through the reinvestment of dividends and other distributions paid in
respect of all Class B Common Stock shares held by such stockholder)
shall automatically convert to Class A Common Stock shares; provided,
however, that such conversion shall be subject to the continuing
availability of an Internal Revenue Service ruling and opinion of
counsel to the effect that the conversion of the Class B Common Stock
shares does not constitute a taxable event under federal income tax
law. The Board of Directors, in its sole discretion, may suspend the
conversion of Class B Common Stock shares if such ruling and opinion
are no longer available.
(e) On the tenth anniversary of the first business day of the
month following the month in which Class C Common Stock shares were
purchased by a stockholder, such Class C Common Stock shares (as well
as a pro rata portion of any Class C Common Stock shares purchased
through the reinvestment of dividends and other distributions paid in
respect of all Class C Common Stock shares held by such stockholder)
shall automatically convert to Class A shares; provided, however,
that such conversion shall be subject to the continuing availability
of an Internal Revenue Service ruling and an opinion of counsel to
the effect that the conversion of the Class C Common Stock shares
does not constitute a taxable event under federal income tax law.
The Board of Directors, in its sole discretion, may suspend the
conversion of Class C Common Stock shares if such ruling and opinion
are no longer available.
(f) The number of shares of the Class A Common Stock into which
the Class B or Class C Common Stock is converted pursuant to
subsections (5)(e) and (5)(f) above shall equal the number (including
for these purposes fractional shares) obtained by dividing the net
asset value per share of the Class B or Class C Common Stock, as the
case may be, for purposes of sales and redemptions on the conversion
date by the net asset value per share of the Class A Common Stock for
purposes of sales and redemptions thereof on the conversion date.
(g) The holders of each Class of capital stock classified or
designated by this Charter shall have such rights to exchange their
shares for stock of any other Class or shares of another investment
company upon such terms as may be approved by the Board of Directors
from time to time and set forth in appropriate disclosure documents
under the applicable law, rules and regulations of the SEC and the
rules of the NASD, including but not limited to such rights to credit
holding periods of the stock exchanged with respect to the stock
received in the exchange.
6. The Corporation may issue and sell fractions of shares of
capital stock having pro rata all the rights of full shares, including,
without limitation, the right to vote and to receive dividends, and
wherever the words "share" or "shares" are used in the charter or By-Laws
of the Corporation, they shall be deemed to include fractions of shares
<PAGE>
where the context does not clearly indicate that only full shares are
intended.
7. The Corporation shall not be obligated to issue certificates
representing shares of any Class of capital stock. At the time of issue
or transfer of shares without certificates, the Corporation shall provide
the stockholder with such information as may be required under the
Maryland General Corporation Law.
8. All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of these Articles of
Incorporation.
SIXTH: The number of Directors of the Corporation shall be ten and
the names of those who are now serving as Directors of the Corporation until
the next meeting of stockholders or until their successors are duly
chosen and qualified are as follows:
Charles F. Barber Michael S. Hyland
Andrew L. Breech Clifford M. Kirtland, Jr.
Thomas W. Brock Robert W. Lawless
Carol L. Colman Louis P. Mattis
William R. Dill Thomas F. Schlafly
However, the By-Laws of the Corporation may fix the number of
Directors at a number greater or less than that named in these Articles of
Incorporation, provided that in no case shall the number of Directors be less
than three, and may authorize the Board of Directors, by the vote of a majority
of the entire Board of Directors, to increase or decrease the number of
Directors fixed by these Articles of Incorporation or by the By-Laws within a
limit specified in the By-Laws and to fill the vacancies created by any such
increase in the number of Directors. Unless otherwise provided by the By-Laws
of the Corporation, the Directors of the Corporation need not be stockholders
therein.
SEVENTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the Corporation and
of the Directors and stockholders.
1. The By-Laws of the Corporation may divide the Directors of the
Corporation into classes and prescribe the tenure of office of the several
classes, but no class shall be elected for a period shorter than that from
the time of the election following the division into classes until the
next annual meeting and thereafter for a period shorter than the interval
between annual meetings or for a longer period than five years, and the
term of office of at least one class shall expire each year.
Notwithstanding the foregoing, no such division into classes shall be made
prior to the first annual meeting of stockholders of the Corporation.
2. The holders of shares of the capital stock of the Corporation
shall have the right to inspect the records, documents, accounts and books
of the Corporation, subject to reasonable regulations of the Board of
Directors or in the By-Laws of the Corporation, not contrary to Maryland
law, as to whether and to what extent, and at what times and places, and
under what conditions and regulations such right shall be exercised.
<PAGE>
3. Any Director, or any officer elected or appointed by the Board of
Directors or by a committee of said Board or by the stockholders or
otherwise, may be removed at any time with or without cause, in such
lawful manner as may be provided in the By-Laws of the Corporation or in
accordance with the laws of Maryland.
4. If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold their meetings, to have an office or
offices and, subject to the provisions of the laws of Maryland, to keep
the books of the Corporation outside of said State at such places as may
from time to time be designated by them.
5. In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the Board of Directors may exercise
all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the express provisions
of the laws of Maryland, of these Articles of Incorporation and of the
By-Laws of the Corporation.
6. Shares of stock in other corporations shall be voted by the
President or a Vice President, or such officer or officers of the
Corporation as the Board of Directors shall designate for the purpose, or
by a proxy or proxies thereunto duly authorized by the Board of Directors,
except as otherwise ordered by vote of the holders of a majority of the
shares of the capital stock of the Corporation outstanding and entitled to
vote in respect thereto.
7. (a) The Corporation shall not purchase from or sell to (i) any
officer, Director or employee of the Corporation, (ii) any partnership of
which any officer, Director or employee of the Corporation is a member,
(iii) any corporation or association of which any officer, Director or
employee of the Corporation is an officer, director or trustee, (iv) any
person or organization furnishing managerial, supervisory or distributing
services to the Corporation, (v) any officer, director, partner, trustee
or employee of, or person owning of record any of the stock of, any person
or organization furnishing such managerial supervisory or distributing
services, (vi) any partnership of which any officer, director, partner,
trustee or employee of, or person owning of record any of the stock of,
any person or organization furnishing such managerial, supervisory or
distributing services, is a member, or (vii) any corporation or
association of which any officer, director, partner or trustee of, or
person owning of record any of the stock of, any person or organization
furnishing such managerial, supervisory or distributing services, is an
officer, director or trustee, as principals, any securities (other than
stock which may be issued by the Corporation), nor shall the Corporation
make any loan to any officer, Director or employee of the Corporation, to
any partnership of which any officer, Director or employee of the
Corporation is a member, to any corporation or association of which any
officer, Director or employee of the Corporation is an officer, directors
or trustee, to any person or organization furnishing managerial,
supervisory or distributing services to the Corporation, or to any
officer, director, partner, trustee or employee of, or person owning of
record any of the stock of, any person or organization furnishing such
managerial, supervisory or distributing services; provided, however, that
nothing herein shall prohibit any person, partnership, association or
corporation with which the Corporation may have any management or
distributing contract, or any officer, Director or employee of the
<PAGE>
Corporation, either directly or through a partnership, association or
corporation, from being paid any brokerage commissions in the purchase
and/or sale of securities for the account of the Corporation, and provided
further that any advances of fees or expenses to any organization
furnishing managerial, supervisory or distributing services to the
Corporation or any advances of expenses pursuant to subparagraph (c) of
this paragraph 7 shall not be deemed the making of a loan within the
meaning of this subparagraph (a); and any officer, Director, employee or
stockholder of the Corporation, either directly or through a partnership,
association or corporation, may act as distributor or underwriter in
connection with the sale of stock which may be issued by the Corporation,
and each and every person who may become an officer, Director or employee
of the Corporation is hereby relieved from any liability that might
otherwise exist from contracting as aforesaid with the Corporation for the
benefit of himself or any partnership, association or corporation in which
he may be interested, except that nothing herein shall protect any
Director or officer of the Corporation against any liability to the
Corporation or to its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
(b) Subject only to the provisions of subparagraph (a) of this
paragraph 7 and the provisions of the Investment Company Act ,
any Director, officer or employee individually, or any partnership of
which any Director, officer or employee may be a member, or any
corporation or association of which any Director, officer or employee
may be an officer, director, trustee, employee or stockholder, may be
a party to, or may be pecuniarily or otherwise interested in, any
contract of transaction of the Corporation, and in the absence of
fraud no contract or other transaction shall be thereby affected or
invalidated; provided that in case a Director, or a partnership,
corporation or association of which a Director is a member, officer,
director, trustee, employee or stockholder is so interested, such
fact shall be disclosed or shall have been known to the Board of
Directors or a majority thereof; and any Director of the Corporation
who is so interested, or who is also a director, officer, trustee,
employee or stockholder of such other corporation or association or a
member of such partnership which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Board of
Directors of the Corporation which shall authorize any such contract
or transaction, with like force and effect as if he were not such
director, officer, trustee, employee or stockholder of such other
corporation or association or not so interested or a member of a
partnership so interested.
(c) The Corporation shall indemnify (i) its Directors and
officers, whether serving the Corporation or at its request any other
entity, to the fullest extent required or permitted by the laws of
Maryland now or hereafter in force and the Investment Company Act
, including the advance of expenses under the procedures
required, and to the fullest extent permitted, by law and (ii) other
employees and agents to such extent as shall be authorized by the
Board of Directors or provided by the Corporation's By-Laws or by
contract and permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
<PAGE>
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such By-Laws, resolutions or
contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No
amendment of these Articles of Incorporation or repeal of any of its
provisions shall limit or eliminate the right to indemnification
provided hereunder with respect to acts or omissions occurring prior
to such amendment or repeal.
(d) Specifically, but without limitation of the foregoing, the
Corporation may enter into a distribution or management contract and
other contracts with, and may otherwise do business with, Salomon
Brothers Inc, Salomon Brothers Asset Management Inc, and any
affiliate of either of the foregoing now existing or hereafter
created, notwithstanding that the Board of Directors of the
Corporation may be composed in part of officers, directors or
employees of said corporations and officers of the Corporation may
have been or may be or become officers, directors or employees of
said corporations, and in the absence of fraud the Corporation and
such corporations may deal freely with each other, and neither such
distribution contract or management contract nor any other contract
or transaction between the Corporation and such corporations or any
of then shall be invalidated or in any wise affected thereby, nor
shall any Director or officer of the Corporation be liable to the
Corporation or to any stockholder or creditor thereof or to any other
person for any loss incurred by it or him under or by reason of any
such contract or transaction; provided that nothing herein shall
protect any Director or officer of the Corporation against any
liability to the Corporation or to its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office; and provided always that such contract
or transaction shall have been on terms that were not unfair to the
Corporation at the time it was entered into.
(e) The Corporation is adopting its corporate title through
permission of Salomon Brothers Asset Management Inc; and if it shall
enter into a management contract with such corporation, as authorized
herein, the Corporation shall make appropriate covenants that, upon
the expiration or termination of such contract or upon its breach by
the Corporation, the Corporation will, at the request of such
corporation, eliminate all reference to "Salomon Brothers" from its
corporate name and will not thereafter transact any business in a
corporate name using the words "Salomon Brothers" in any form or
combination whatsoever, or otherwise use the words "Salomon Brothers"
as a part of its name or otherwise. Such covenants on the part of
the Corporation are hereby made binding upon it, its Directors, offi-
cers, stockholders, creditors and all other persons claiming under or
through it.
(f) To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no Director or officer of
the Corporation shall be personally liable to the Corporation or its
stockholders for money damages, except to the extent such exemption
from liability or limitation thereof is not permitted by the
Investment Company Act . No amendment of these Articles of
<PAGE>
Incorporation or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers under this
provision with respect to any act of omission which occurred prior to
such amendment or repeal.
8. No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation other than such, if any, as the Board of
Directors, in its sole discretion, may determine and at such price or
prices and upon such other terms as the Board of Directors, in its sole
discretion, may fix; and any stock or other securities which the Board of
Directors may determine to offer for subscription may, as the Board of
Directors in its sole discretion shall determine, be offered to the
holders of any class, series or type of stock or other securities at the
time outstanding to the exclusion of the holders of any or all other
classes, series or types of stock or other securities at the time
outstanding.
9. Notwithstanding any provision of law requiring the authorization
of any action by a greater proportion than a majority of the total number
of shares of all classes of capital stock or of the total number of shares
of any class of capital stock entitled to vote as a separate class, such
action shall be valid and effective if authorized by the affirmative vote
of the holders of a majority of the total number of shares of all classes
outstanding and entitled to vote thereon, or of the class entitled to vote
thereon as a separate class, as the case may be, except as otherwise
provided in the charter of the Corporation. At a meeting of stockholders
the presence in person or by proxy of stockholders entitled to cast a
majority of all the votes entitled to be cast on any matter with respect
to which one or more classes of capital stock are entitled to vote as a
separate class shall constitute a quorum of such separate class for action
on that matter. Whether or not a quorum of such a separate class for
action on any such matter is present, a meeting of stockholders convened
on the date for which it was called may be adjourned as to that matter
from time to time without further notice by a majority vote of the
stockholders of the separate class present in person or by proxy to a date
not more than 120 days after the original record date.
10. The Board of Directors is hereby empowered to authorize the
issuance and sale, from time to time, of shares of the capital stock of
the Corporation, whether for cash at not less than the par value thereof
or for such other consideration including securities as the Board of
Directors in its discretion may deem advisable, in the manner and to the
extent now or hereafter permitted by the laws of Maryland.
EIGHTH: From time to time any of the provisions of these
Articles of Incorporation may be amended, altered or repealed (including any
amendment which changes the terms of any of the outstanding stock by
classification, reclassification or otherwise), upon the vote of the holders of
a majority of the shares of capital stock of the Corporation at the time
outstanding and entitled to vote, and other provisions which might under the
statutes of the State of Maryland at the time in force be lawfully contained in
articles of incorporation may be added or inserted upon the vote of the holders
of a majority of the shares of capital stock of the Corporation at the time
outstanding and entitled to vote, and all rights at any time conferred upon the
stockholders of the Corporation by these Articles of Incorporation are granted
<PAGE>
subject to the provisions of this Article EIGTH. The Corporation shall notify
the stockholders in its next subsequent regular report to the stockholders of
any amendment to these Articles of Incorporation.
The term "Articles of Incorporation" or "these Articles of
Incorporation" as used herein and in the By-Laws of the Corporation shall be
deemed to mean these Articles of Incorporation as from time to time amended and
restated.
* * * * * *
SECOND: This amendment decreases the par value of the Corporation's
Capital Stock from $1.00 per share to $.001 per share.
THIRD: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 2-605(a)(4) of the Maryland General
Corporation Law, the Board of Directors has duly changed the name or other
designation of the currently issued and outstanding shares of capital stock of
the Corporation from "Capital Stock (par value $.001 per share)" to "Class O
Common Stock (par value $.001 per share)."
FOURTH: The amendment and restatement does not increase the
authorized stock of the Corporation.
FIFTH: The foregoing amendment and restatement to the Charter of the
Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporations.
SIXTH: The foregoing amendment and restatement to the Charter of the
Corporation shall become effective at ____________ on ______________, 199__.
IN WITNESS WHEREOF, SALOMON BROTHERS CAPITAL FUND INC has caused
these presents to be signed in its name and on its behalf by its President and
witnessed by its Secretary on ______________, 199___.
WITNESS: SALOMON BROTHERS CAPITAL
FUND INC
By: Secretary
President
THE UNDERSIGNED, President of SALOMON BROTHERS CAPITAL FUND INC who
executed on behalf of the Corporation the foregoing Articles of Amendment and
Restatement of which this certificate is made a part, hereby acknowledges in
the name and on behalf of said Corporation the foregoing Articles of Amendment
and Restatement to be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information, and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
President
<PAGE>
SALOMON BROTHERS CAPITAL FUND INC
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Lawrence H. Kaplan, Alan M. Mandel,
Jennifer Muzzey and Tana E. Tselepis, and each of them, attorneys and proxies
for the undersigned, with full power of substitution and revocation to
represent the undersigned and to vote on behalf of the undersigned all shares
of the Salomon Brothers Capital Fund Inc (the "Fund") which the undersigned is
entitled to vote at a Special Meeting of Stockholders of the Fund to be
held at Seven World Trade Center, New York, New York on September 30,
1996, and at any adjournment thereof. The undersigned hereby acknowledges
receipt of the Notice of Meeting and accompanying Proxy Statement 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 Meeting. A
majority of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have
and may exercise all of the power and authority of said proxies hereunder.
The undersigned hereby revokes any proxy previously given.
Please Mark, Sign, and Return this Proxy Promptly
Using the Enclosed Envelope.
Date_______________________________________, 1996
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.
Signature(s), Title(s), if applicable
_____________________________________
_____________________________________
<PAGE>
This proxy, if properly executed, will be voted in the manner directed by
the stockholder.
If no direction is made to the contrary, the proxy will be voted FOR
proposal 1 and proposal 2.
Please refer to the Proxy Statement for a discussion of the Proposals.
Please Sign and Date on Reverse Side and Mail in Accompanying Postpaid
Envelope.
Please vote by filling in the appropriate boxes below, as shown, using
blue or black ink or dark pencil. Do not use red ink. /X/
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
PROPOSAL 1 AND PROPOSAL 2 / / / / / /
1. Amendments to the Fund's Articles of / / / / / /
Incorporation to permit implementation
by the Fund of a multi-class
distribution system for its shares.
2. Amendment to the Fund's Articles of / / / / / /
Incorporation to reduce the par value
of the Fund's common stock from $1.00
to $.001.
3. Any other business that may properly / / / / / /
come before the meeting.
I will be attending the meeting. / /
