<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Smith Barney Disciplined Small Cap Fund, Inc.
Smith Barney Money Funds, Inc.
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Muni Funds
................................................................................
(Names of Co-Registrants as Specified In Their Charters)
................................................................................
(Name of Person(s) Filing Proxy Statement, if other than the 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)(1) 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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
<PAGE>
....................................................................
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 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:
...................................................................
<PAGE>
Dear Fellow Shareholder:
As an investor in the Smith Barney Mutual Fund Family, you are cordially
invited to attend a special shareholder meeting(s) to be held at the time and
place specified in the attached Notice of Special Meeting. Shareholder
meetings are held by mutual fund companies periodically as issues arise
requiring shareholder approval. This meeting is being held to elect Directors,
to propose changes to certain specific investment policies currently in effect
and, with respect to certain Funds, to approve retaining such Funds'
classification as non-diversified funds.
Enclosed for your review is a joint proxy statement that describes the
proposals that will be submitted to shareholders for approval at the meeting.
Note that not all of the proposals relate to each Fund. However, because many
of our shareholders own shares of more than one Smith Barney Mutual Fund, a
joint proxy statement is being sent to you to reduce the preparation,
printing, handling and postage expenses that would be incurred if we sent out
separate proxy statements for each Fund.
Please refer to page 5 of the proxy statement for a list of the proposals
which are applicable to your Fund.
PROPOSAL 1. ELECT THE FUND'S BOARD OF DIRECTORS/TRUSTEES
Proposal One asks that you elect the Board of Directors or Trustees of each
Fund. The pages following Proposal One provide a brief description of each
nominee's background and current status with the Fund.
The Board of each Fund recommends that you vote "FOR" the election of
nominees to the Board.
PROPOSAL 2. APPROVE PROPOSED CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES
Every mutual fund has certain specific investment policies that can only be
changed with the approval of the fund's shareholders. Such policies are often
referred to as "fundamental" investment policies. Proposal Two asks that you
approve certain changes to the fundamental investment policies of the Smith
Barney Mutual Funds in light of various regulatory, business and industry
developments that have occurred since the original adoption of these policies
by the Funds. The three principal objectives of this proposal are:
i) To simplify the Funds' investment policies to make them consistent
among the investment companies distributed by Smith Barney.
ii) To eliminate or make non-fundamental certain investment policies
that are no longer required by law to be fundamental. Once an investment
policy has become "non-fundamental", the Fund's Board of Directors/
<PAGE>
Trustees would have to approve any changes to such policy. Giving the
Board the flexibility to make changes in non-fundamental policies without
the expense of obtaining shareholder approval each time a change is
desired will save the Fund money, and will make it easier for the Fund's
portfolio manager(s) to utilize new investment policies and techniques to
respond more rapidly to changing market conditions. Shareholders would of
course receive notice of any investment policy changes approved by the
Board.
iii) To reclassify as "non-fundamental" or eliminate certain investment
policies that had previously been adopted to meet certain requirements
under state securities laws that are no longer applicable. Prior to
October 11, 1996, mutual funds not only had to comply with various federal
investment policy restrictions, but also with state law investment
restrictions as well. Some of such state laws were actually more
restrictive than the federal laws, making compliance very difficult. In an
effort to streamline the registration process of mutual funds, effective
on October 11, 1996, the states no longer require that mutual funds adopt
specific investment policies. Because such investment policies were
originally adopted by the Funds as "fundamental" investment policies,
shareholder approval is necessary to reclassify them as non-fundamental or
to eliminate them.
As described more fully in the proxy statement, many of the changes are
currently not expected to result in changes in the investment techniques or
operations of a Fund. In most instances, the changes permit a Fund's Board to
determine whether the implementation of a new technique or policy is in the
best interests of the shareholders.
The Board of each Fund recommends that you vote "FOR" the changes to the
Fund's fundamental investment policies as described in the proxy statement.
PROPOSAL 3. APPROVE RETAINING THE FUNDS' CLASSIFICATION AS NON-DIVERSIFIED
(THE CALIFORNIA MONEY MARKET PORTFOLIO, THE FLORIDA PORTFOLIO, THE GEORGIA
PORTFOLIO AND THE PENNSYLVANIA PORTFOLIO ONLY)
Every mutual fund elects to be either a "diversified" mutual fund or a "non-
diversified" mutual fund. As the words imply, a "non-diversified" mutual fund
is permitted to invest in a fewer number of securities than is required by a
diversified mutual fund. Many state municipal funds elect to be non-
diversified because, depending on market conditions, there may be a limited
number of securities issued by a state, which would thus limit the number of
investment opportunities available to such fund. Occasionally, a mutual fund
that originally elected to register as non-
2
<PAGE>
diversified, finds that there are ample investment opportunities, and is thus
able to invest its assets in a diversified manner. The Securities and Exchange
Commission has taken the position that any mutual fund that has elected to be
a non-diversified fund, but operates as a diversified fund for at least three
years, must obtain shareholder approval to retain its status as a non-
diversified fund for the future.
The California Money Market Portfolio, the Florida Portfolio, the Georgia
Portfolio and the Pennsylvania Portfolio each originally elected to operate as
a non-diversified mutual fund. During the last three years, however, each such
Fund has operated as a diversified fund and thus must obtain shareholder
approval to retain its status as a non-diversified fund.
The Board of each Fund, including a majority of the independent Board
members, recommends that you vote "FOR" retaining the classification as a
"non-diversified" mutual fund.
YOUR VOTE IS IMPORTANT!
We ask that you review the attached proxy carefully. If you do not plan to
attend the meeting, we ask that you complete, sign, date and return the proxy
as soon as possible in the enclosed postage-paid envelope. Thank you in
advance for your attention and vote with regard to these important proposals.
Sincerely,
Heath B. McLendon
Chairman
3
<PAGE>
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<PAGE>
SMITH BARNEY
Smith Barney Disciplined Small Cap Fund, Inc. Smith Barney Money Funds, Inc.
(all Series) Smith Barney Municipal Money Market Fund, Inc. Smith Barney Muni
Funds (all Series)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
----------------------
TO BE HELD ON FEBRUARY 6 AND MARCH 9, 1998
----------------------
<PAGE>
TO THE SHAREHOLDERS:
Notice is hereby given that a Special Meeting of Shareholders of each of the
registered investment companies listed above (each a "Fund," and collectively,
the "Funds"), will be held on the dates and at the times and locations
specified below. Also set out below are the number of shares of each Fund and
to the extent composed of one or more separate series, the number of shares of
each such series issued and outstanding at the close of business on November
3, 1997 or, in the case of the Cash Portfolio of Smith Barney Money Funds,
Inc., at the close of business on October 31, 1997.
The Special Meeting of the following Fund will be held in Conference Room
26C at 388 Greenwich Street, New York, New York on February 6, 1998 at the
following time:
<TABLE>
<CAPTION>
MEETING SHARES
TIME OUTSTANDING
---------- ------------------
<S> <C> <C>
Smith Barney Muni Funds........................... 11:00 a.m.
California Money Market Portfolio......................... 1,529,248,749.800
Florida Portfolio......................................... 14,080,589.973
Georgia Portfolio......................................... 2,171,357.629
Limited Term Portfolio.................................... 41,410,315.127
National Portfolio........................................ 26,966,981.493
New York Money Market Portfolio........................... 957,735,227.460
New York Portfolio........................................ 53,631,391.829
Pennsylvania Portfolio.................................... 2,986,677.475
The Special Meeting of the following Fund will be held in Conference Room 26C
at 388 Greenwich Street, New York, New York on March 9, 1998 at the following
time:
Smith Barney Disciplined Small Cap Fund, Inc. .... 11:30 a.m. 5,164,865.683
The Special Meeting of each of the following Funds will be held in Conference
Room 26B at 388 Greenwich Street, New York, New York on March 9, 1998 at the
following times:
Smith Barney Money Funds, Inc. ................... 10:45 a.m.
Cash Portfolio............................................ 30,490,344,964.414
Government Portfolio...................................... 4,645,496,644.191
Retirement Portfolio...................................... 1,348,637,071.208
Smith Barney Municipal Money Market Fund, Inc..... 11:15 a.m. 5,647,545,463.080
</TABLE>
2
<PAGE>
The special meetings are being held for the following purposes:
<TABLE>
<CAPTION>
PAGE NO. IN
THE ATTACHED
JOINT PROXY
STATEMENT
------------
<S> <C>
1. To elect Directors or Trustees of each Fund (Proposal 1)--ALL
FUNDS.......................................................... 5
2. To approve or disapprove the reclassification, modification
and/or elimination of certain fundamental investment policies
(Proposal 2)--ALL FUNDS (SERIES)............................... 10
3. To approve or disapprove the retention of each Fund's
classification as a "non-diversified" investment company under
the 1940 Act (Proposal 3)--SMITH BARNEY MUNI FUNDS (CALIFORNIA
MONEY MARKET, FLORIDA, GEORGIA AND PENNSYLVANIA PORTFOLIOS
ONLY).......................................................... 25
4. To transact such other business as may properly come before the
meeting or any adjournment thereof (Proposal 4)--ALL FUNDS..... 27
</TABLE>
The close of business on December 10, 1997 has been fixed as the record date
for the determination of shareholders of the Funds entitled to notice of and
to vote at the meeting and any adjournment thereof.
By Order of the Directors or Trustees,
Christina T. Sydor, Secretary
December 10, 1997
----------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED
TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD(S) IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH ON THE
FOLLOWING PAGE. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
3
<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(s) involved in validating your
vote if you fail to sign your proxy card(s) properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card(s).
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(s).
3. All Other Accounts: The capacity of the individual signing the proxy
card(s) should be indicated unless it is reflected in the form of
registration. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
------------ ---------------
<C> <S> <C>
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,
Executor
</TABLE>
4
<PAGE>
Smith Barney Disciplined Small Cap Fund, Inc.
Smith Barney Money Funds, Inc.
(all Series)
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Muni Funds
(all Series)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
SPECIAL MEETINGS OF SHAREHOLDERS
----------------------
TO BE HELD ON FEBRUARY 6 AND MARCH 9, 1998
----------------------
<PAGE>
JOINT PROXY STATEMENT
INTRODUCTION
This document is a joint proxy statement for the registered investment
companies listed above (each a "Fund" and, collectively, the "Funds"*). This
joint proxy statement is being furnished to the shareholders of the Funds in
connection with each respective Fund's Board of Directors' or Trustees' (each
a "Board" and, collectively, the "Boards") solicitation of proxies to be used
at the special meetings of shareholders of the Funds to be held on the dates
specified in the Notice of Meeting of Shareholders and proxy card(s) that
accompany this Proxy Statement, or any adjournment or adjournments thereof
(collectively, the "Meeting"). The Meeting will be held on the day and at the
time and location specified in the Notice of Meeting of Shareholders and proxy
card(s) that accompany this Proxy Statement. This joint proxy statement and
accompanying proxy card(s) will first be mailed to shareholders on or about
December 12, 1997. Proxy solicitations will be made primarily by mail, but
proxy solicitations also may be made by telephone, telegraph or personal
interviews conducted by officers and employees of the Funds; Smith Barney Inc.
("Smith Barney") and PFS Distributors, Inc., distributors of shares of the
Funds; the investment adviser (each an "Adviser" and, collectively, the
"Advisers") of a Fund; and/or First Data Investor Services Group, Inc. ("First
Data"), the Funds' transfer agent. Such representatives and employees will not
receive additional compensation for solicitation activities. Smith Barney has
retained the services of First Data to assist in the solicitation of proxies.
The aggregate cost of solicitation of the shareholders of all funds in the
Smith Barney mutual fund complex (most of which are covered under other proxy
statements) is expected to be approximately $7.6 million. The proportionate
costs of the proxy solicitation and expenses incurred in connection with the
preparation of this joint proxy statement and its enclosures will be borne by
the Funds, with the Funds' cost being allocated based in part on a Fund's
assets and in part on its number of shareholders. The Funds also will
reimburse expenses of forwarding solicitation materials to beneficial owners
of shares of the Funds. If the Funds record votes by telephone, 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 may be revoked at any time before they
are voted in the same manner that proxies voted by mail may be revoked.
Each share is entitled to one vote and any fractional share is entitled to a
fractional vote. If the enclosed proxy is properly executed and returned in
time to be voted at the Meeting, the shares represented thereby will be voted
in accordance
- -----------
* Some Funds are composed of one or more separate series, each of which is
referred to herein as a "Series" or, for purposes of Proposals 2 and 3, as a
"Fund".
2
<PAGE>
with the instructions marked thereon. Unless instructions to the contrary are
marked thereon, a proxy will be voted FOR the election of the nominees for
Directors or Trustees ("Board members"), FOR the other matters listed in the
accompanying Notice of Meeting of Shareholders and FOR any other matters deemed
appropriate. If you properly execute the enclosed proxy and give no voting
instructions, your shares will be voted FOR the proposals set forth herein.
Abstentions will be counted as present for purposes of determining a quorum,
but will not be counted as voting. Broker non-votes (i.e., proxies received
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote the
shares on a particular matter with respect to which the broker or nominees do
not have discretionary power) will be treated the same as abstentions. Any
shareholder who has given a proxy has the right to revoke it at any time prior
to its exercise either by attending the Meeting and voting his or her shares in
person or by submitting a letter of revocation or a later-dated proxy to the
appropriate Fund at the above address prior to the date of the Meeting.
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 with
respect to any such proposals. In determining whether to adjourn the Meeting,
the following factors may be considered: the nature of the proposals that are
the subject of the Meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the Meeting in person or by
proxy. When voting on a proposed adjournment, the persons named as proxies will
vote for the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote "Against" the item, in which
case such shares will be voted against the proposed adjournment with respect to
that item. A shareholder vote may be taken on one or more of the proposals in
this joint proxy statement prior to any adjournment if sufficient votes have
been received for approval. Under the master trust agreement, charter or by-
laws, as applicable, of each Fund (other than Smith Barney Muni Funds and Smith
Barney Disciplined Small Cap Fund, Inc.) a quorum is constituted by the
presence in person or by proxy of the holders of a majority of the outstanding
shares of a Fund entitled to vote at the Meeting. Under the By-laws of Smith
Barney Muni Funds and Smith Barney Disciplined Small Cap Fund, Inc., a quorum
is constituted by the presence in person or by proxy of the holders of one-
third of the outstanding shares of that Fund entitled to vote at the Meeting.
The Boards have fixed the close of business on December 10, 1997 as the
record date (the "Record Date") for the determination of shareholders of the
Funds
3
<PAGE>
entitled to notice of and to vote at the Meeting. At the close of business on
November 3, 1997 or, in the case of the Cash Portfolio of Smith Barney Money
Funds,. Inc., at the close of business on October 31, 1997, the number of
shares of each Fund shown in the accompanying Notice of Meeting were issued and
outstanding.
As of October 31, 1997, to the knowledge of each Fund and its Board, no
single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934), except as set forth in Annex I hereto, owned
beneficially or of record more than 5% of the outstanding shares of a Fund. As
of the Record Date, the officers and Board members of each Fund beneficially
owned less than 1% of the shares of each Fund.
This joint proxy statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate proxy statement for each Fund and, because many shareholders own
shares of more than one Fund, to avoid burdening shareholders with more than
one proxy statement. Although some proposals described herein relate to several
or all of the Funds, shareholders of each Series of each Fund will vote
separately on each proposal on which shareholders of that Fund are entitled to
vote (except that all Series of each Fund will vote as a single fund on
Proposal 1), and separate proxy cards are enclosed for each Fund in respect of
which a shareholder is a record owner of shares. Thus, if a proposal is
approved by shareholders of one Fund and disapproved by shareholders of other
Funds, the proposal will be implemented for the Fund that approved the proposal
and will not be implemented for any Fund that did not approve the proposal. It
is therefore essential that shareholders complete, date and sign each enclosed
proxy card. Set forth below are the proposals on which shareholders of each
respective Fund are entitled to vote.
Proposal 1 requires for approval the affirmative vote of a plurality of the
votes cast at the Meeting in person or by proxy (a "Plurality Vote") for all
Funds. Because abstentions and broker non-votes are not treated as shares
voted, abstentions and broker non-votes have no impact on Proposal 1. Approval
of Proposals 2 and 3 requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund (or Series thereof) which, as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
means the lesser of (a) 67% of the Fund's (or Series') shares present at a
meeting of its shareholders if the owners of more than 50% of the shares of the
Fund (or Series) then outstanding are present in person or by proxy or (b) more
than 50% of the Fund's (or Series') outstanding shares (a "Majority Vote").
Abstentions and broker non-votes are treated as votes "against" Proposals 2 and
3.
4
<PAGE>
PROPOSALS APPLICABLE TO EACH FUND
<TABLE>
<CAPTION>
FUND NAME PROPOSALS APPLICABLE TO FUND
--------- ----------------------------
<S> <C>
Smith Barney Disciplined Small Cap
Fund, Inc........................................ 1, 2(A,B,C,D,E,F,G,H,I,N)
Smith Barney Money Funds, Inc...................... 1, 2(A,D,E,F,H,I,J,M,N,O,R)
Smith Barney Municipal Money Market Fund, Inc...... 1, 2(A,D,E,F,G,H,I,O)
Smith Barney Muni Funds............................ 1, 2(C,D,E,F,G,H,I,R)
California Money Market Portfolio only........... 3
Florida Portfolio only........................... 3
Georgia Portfolio only........................... 3
Limited Term Portfolio only...................... 2(A)
National Portfolio only.......................... 2(A,L,M)
New York Portfolio only.......................... 2(L,M)
Pennsylvania Portfolio only...................... 3
</TABLE>
PROPOSAL 1:
TO ELECT DIRECTORS OR TRUSTEES OF EACH FUND
ALL FUNDS
The first proposal to be considered at the Meeting is the election of
Directors or Trustees of the Funds.
All of the nominees are currently serving as a director or trustee of the
Board to which he or she is nominated, and all of the nominees serve as a
director, trustee and/or general partner of other investment companies for
which Smith Barney serves as distributor. Each nominee has consented to serve
as a Board member if elected at the Meeting. If a designated nominee declines
or otherwise becomes unavailable for election, however, the proxy confers
discretionary power on the persons named therein to vote in favor of a
substitute nominee or nominees.
If elected, the Board members will hold office without limit in time, subject
to the Emeritus Program* adopted by the Funds, and except that any Board
- -----------
* Each Fund has adopted an Emeritus Program for non-interested Board members
pursuant to which each Fund's Board and the management of that Fund can
continue to benefit from the experience of long-time Board members who have
resigned from the Board. Pursuant to this Program, Board members with 10
years of service may agree to provide services as an emeritus director at age
72 and, pursuant to resolutions adopted by certain Funds, must retire from
the Boards at age 80. Service as an emeritus director is limited to 10 years.
Each emeritus director agrees to be available for consultation with the Board
and management of the Fund and may attend Board meetings.
5
<PAGE>
member may resign and any Board member may be removed at any meeting of
shareholders called for that purpose by at least a majority of the votes
entitled to be cast for the election of Board members. In case a vacancy shall
exist for any reason, the remaining Board members may fill the vacancy by
appointing another Board member. If at any time less than a majority of the
Board members holding office have been elected by shareholders, the Board
members then in office will call a shareholders meeting for the purpose of
electing Board members.
Each Board has an Audit Committee and a Nominating Committee each consisting
of all Board members who are not "interested persons" (as defined in the 1940
Act) of the Fund ("independent Board members"). The Audit Committee reviews
the scope and results of a Fund's annual audit with the Fund's independent
accountants and recommends the engagement of accountants. Included among the
functions of the Nominating Committee is the selection and nomination for
appointment and election of candidates to serve as independent Board members.
The Nominating Committee, in its discretion, may also coordinate with Board
members who are "interested persons" in the selection and election of Fund
officers and may consider nominees recommended by shareholders to serve as
directors or trustees, provided that shareholders submit such recommendations
in compliance with all the pertinent provisions of Rule 14a-8 under the
Securities Exchange Act of 1934. Exhibit A hereto sets forth certain
information regarding compensation paid to each of the Board members and the
number of Board, Audit Committee and Nominating Committee meetings each Fund
has held in the calendar year ended December 31, 1996. Each nominee for Board
member attended at least 75% of the meetings that were held in the calendar
year ended December 31, 1996. None of the Boards has a Compensation Committee.
The executive officers of each Fund are set forth in Exhibits B and C hereto.
Each officer of a Fund will serve at the discretion of the Board.
Set forth in the following table are the nominees for election as Board
member of each Fund, together with certain other information. "Interested
persons" of the Fund, as defined in the 1940 Act, by virtue of their positions
as officer or director of the Fund's investment adviser, distributor or one of
their affiliates, are marked by an asterisk. Other directorships include
directorships, general partnerships or trusteeships of companies that are
required to report to the Securities and Exchange Commission (the "SEC"),
other than registered investment companies. For purposes of this Proxy
Statement, the address of each Board member is P.O. Box 5128, Westborough, MA,
01581-5128.
6
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7
<PAGE>
NOMINEES FOR ELECTION TO THE BOARDS OF
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC. AND
SMITH BARNEY MUNI FUNDS
<TABLE>
<CAPTION>
DIRECTOR OF
SMITH BARNEY
DISCIPLINED SMALL
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER CAP FUND, INC.
DIRECTORSHIPS DURING THE PAST FIVE YEARS SINCE
- ----------------------------------------- -----------------
<S> <C>
Donald R. Foley, age 74. 1997
Retired; Former Vice President of Edwin Bird Wilson,
Incorporated, an advertising agency.
Paul Hardin, age 65. 1997
Interim President of the University of Alabama at Birmingham;
Professor of Law at University of North Carolina at Chapel
Hill; a Director of The Summit Bancorporation; Former
Chancellor of the University of North Carolina at Chapel
Hill.
*Heath B. McLendon, age 64. 1997
Managing Director of Smith Barney; President and Director of
Smith Barney Mutual Funds Management Inc. and Travelers
Investment Adviser, Inc.; Chairman of Smith Barney Strategy
Advisers Inc. Prior to July 1993, Senior Executive Vice
President of Shearson Lehman Brothers Inc., Vice Chairman of
Shearson Asset Management, Director of PanAgora Asset
Management, Inc. and PanAgora Asset Management Limited.
Roderick C. Rasmussen, age 71. 1997
Investment Counselor; Former Vice President of Dresdner and
Company Inc., investment counselors.
*Bruce D. Sargent, age 53. 1997
Managing Director of Smith Barney and Vice President of Smith
Barney Mutual Funds Management, Inc.
John P. Toolan, age 66. 1997
Retired; Former Director and Chairman of Smith Barney Trust
Company, Director of Smith Barney Holdings Inc. and various
subsidiaries; Senior Executive Vice President, Director and
Member of the Executive Committee of Smith Barney; Director
of John Hancock Funds.
</TABLE>
8
<PAGE>
NOMINEES FOR ELECTION TO THE BOARDS OF
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC. AND
SMITH BARNEY MUNI FUNDS
<TABLE>
<CAPTION>
DIRECTOR OF
DIRECTOR OF SMITH BARNEY TRUSTEE OF
SMITH BARNEY MUNICIPAL MONEY SMITH BARNEY
MONEY FUNDS, INC. MARKET FUND, INC. MUNI FUNDS
SINCE SINCE SINCE
- ----------------- ----------------- -------------
<S> <C> <C>
1974 1975 1985
1994 1994 1994
1995 1995 1995
1982 1982 1985
N/A N/A N/A
1982 1982 1985
</TABLE>
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REQUIRED VOTE
Election of the listed nominees for Board members of a Fund must be approved
by a Plurality Vote for all Funds.
THE BOARD OF EACH FUND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION
OF NOMINEES TO THE BOARD.
PROPOSAL 2:
TO APPROVE OR DISAPPROVE THE RECLASSIFICATION, MODIFICATION AND/OR ELIMINATION
OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES
ALL FUNDS
The 1940 Act requires a registered investment company, including each of the
Funds, to have certain specific investment policies that can be changed only
by a Majority Vote of the company's shareholders. Investment companies may
also elect to designate other policies that may be changed only by a
shareholder vote. Both types of policies are often referred to as
"fundamental" policies. (In this joint proxy statement, the word "restriction"
or "limitation" is sometimes used to describe a policy). Certain fundamental
policies have been adopted in the past by the Funds to reflect certain
regulatory, business or industry conditions that are no longer in effect.
Accordingly, each Fund's Board authorized a review of the Fund's fundamental
policies with the following goals: (i) to simplify, modernize and make
consistent with those of other investment companies distributed by Smith
Barney, the Funds' policies that are required to be fundamental, (ii) to
reclassify as non-fundamental any policies that are not required to be
fundamental under the 1940 Act or the positions of the staff of the SEC in
interpreting the 1940 Act, in which case, depending on the circumstances, the
policy would be either eliminated or adopted by the Board as a non-fundamental
policy in the same or a modified form and (iii) to reclassify as non-
fundamental or to eliminate certain policies previously required under state
securities laws. Non-fundamental policies can be changed by the Board without
shareholder approval, subject to compliance with applicable SEC disclosure
requirements.
This proposal seeks shareholder approval of changes that are intended to
accomplish the foregoing goals. Shareholders of any particular Fund will be
able to vote for or against or abstain from voting with respect to each of the
proposed changes applicable to that Fund. The proposed changes to the
fundamental policies are discussed in detail below. By reducing to a minimum
those policies that can be changed only by a shareholder vote, each Fund
should be able to avoid the costs and delay associated with a shareholder
meeting and each Board believes that the Adviser's ability to manage the
Fund's portfolio in a changing regulatory or investment environment will be
enhanced. Accordingly, investment management opportunities generally will be
increased. Before a Fund engages in any new investment policy, its Board must
approve it.
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Generally, the Funds do not have precisely the same set of investment
restrictions. The Funds often have specific restrictions that are
substantially similar but not necessarily identical. Please refer to the
policies as set forth in Exhibit D hereto, which includes the current text of
the relevant Funds' fundamental investment restrictions. If a fundamental
policy is proposed by the Board to be modified or made non-fundamental, the
text of the proposed revision is supplied in the discussion below.
The percentage limitations contained in the restrictions described herein
apply at the time of purchases of portfolio securities.
If these investment policy changes are approved by shareholders at the
meeting, each Fund's Prospectus and Statement of Additional Information will
be amended or supplemented in order to reflect the elimination, amendment
and/or reclassification of the investment policies. Shareholders will be
notified by the Fund of any future investment policy changes, either in the
Fund's Prospectus or Statement of Additional Information, which are updated at
least annually, or in other Fund correspondence.
In this Proposal 2, references to a "Fund" refer to a registered investment
company or a series thereof, as the case may be.
A.SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (LIMITED TERM PORTFOLIO AND NATIONAL PORTFOLIO
ONLY)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY RELATING TO DIVERSIFICATION
Under the 1940 Act, a "diversified" fund is permitted to invest, with
respect to 75% of its assets, up to 5% of its assets in one issuer, provided
that the investment represents less than 10% of the issuer's voting
securities. A number of these Funds initially adopted more restrictive
fundamental limitations of 5% per issuer with respect to 100% of Fund assets.
Several Funds' fundamental policies similarly apply the 10% limitation on
voting securities to 100% of its assets, in some cases applying this
limitation to "any class of securities" of an issuer. The Board of each of
these Funds believes that these restrictions should be standardized and
conformed to the statutory definition of diversification under the 1940 Act in
order to enhance the Fund's ability to pursue its investment objective by
investing a larger but still limited amount of its assets in a single issuer.
If approved by shareholders, the Fund's new policy on diversification will
permit the Fund to invest, with respect to 25% of its assets, more than 5% of
its assets in an issuer. Notwithstanding the proposal, Smith Barney Money
Funds, Inc. and Smith Barney Municipal Money Market Fund, Inc. will, in
accordance with the requirements of
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the rules adopted under the 1940 Act with respect to money market funds,
continue to be managed so as to be 100% diversified.
This Proposal will increase the amount of assets of some Funds that may be
invested in the securities of any one issuer, and with respect to other Funds,
this Proposal will eliminate the restriction against holding more than 10% of
any "class" of an issuer's securities. To the extent that the Fund invests a
greater proportion of its assets in a single issuer, it will be subject to a
correspondingly greater degree of risk associated with that investment. Please
refer to Appendix D to compare your Fund's current investment policy with the
one proposed below. For your convenience, a table of contents has been inserted
at the beginning of Appendix D which will refer you to the page on which your
Fund's current policies are set forth. Set forth below is each Fund's policy on
diversification, as proposed to be modified:
[The Fund will not] invest in a manner that would cause it to fail to be
a "diversified company" under the 1940 Act and the rules, regulations and
orders thereunder.
B.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
MODIFICATION OF THE FUND'S FUNDAMENTAL POLICY REGARDING ISSUANCE OF SENIOR
SECURITIES
Although the definition of a "senior security" involves complex statutory and
regulatory concepts, a senior security is generally thought of as an obligation
of a fund which has a claim to the fund's assets or earnings that takes
precedence over the claims of the fund's shareholders. The 1940 Act generally
prohibits mutual funds from issuing senior securities; however, mutual funds
are permitted to engage in certain types of transactions that might be
considered "senior securities" as long as certain conditions are satisfied. For
example, a transaction which obligates a fund to pay money at a future date
(e.g., the purchase of securities to be settled on a date that is further away
than the normal settlement period) may be considered a "senior security." A
mutual fund is permitted to enter into this type of transaction if it maintains
a segregated account containing liquid securities in value equal to its
obligation to pay cash for the securities at a future date. The Funds utilize
transactions that may be considered to give rise to "senior securities" only in
accordance with applicable regulatory requirements under the 1940 Act.
The primary purpose of the proposal is to revise the Fund's fundamental
limitation with respect to senior securities to conform to a limitation that is
expected to become the standard for all Smith Barney Funds. If the proposal is
approved, the new fundamental senior securities limitation cannot be changed
without a vote of the Fund's shareholders.
Adoption of the proposed limitation on senior securities is not expected to
affect the way in which the Fund is managed, the investment performance of the
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<PAGE>
Fund, or the securities or instruments in which the Fund invests. The Fund is
not currently engaged in issuing senior securities, except with the
protections afforded by segregated accounts, and the Fund has no current
intention to begin issuing senior securities. The proposed limitation would
recognize that the Fund may issue such securities only to the extent permitted
under the 1940 Act. To the extent the Fund becomes involved in such securities
trading practices, the Board of the Fund will carefully review the Fund's
disclosure of its participation and the risks of loss to the Fund and its
shareholders which may result from such trading practices. The Board will
further determine whether such trading practices are consistent with the
Fund's investment policies.
Set forth below is the policy on issuance of senior securities, as proposed
to be modified:
[The Fund will not] issue "senior securities" as defined in the 1940 Act
and the rules, regulations and orders thereunder, except as permitted
under the 1940 Act and the rules, regulations and orders thereunder.
C.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING INDUSTRY
CONCENTRATION
Each of these Funds has a fundamental policy that prohibits the Fund from
concentrating its investments in any one industry. The language of the Funds'
policies, however, varies widely. It is proposed that these policies be
standardized and made more flexible. The modified policies will not involve
any change in the manner in which each Fund's assets are currently managed.
Set forth below is each Fund's policy on industry concentration, as proposed
to be modified:
[The Fund will not] invest more than 25% of its total assets in
securities, the issuers of which conduct their principal business
activities in the same industry. For purposes of this limitation,
securities of the U.S. government (including its agencies and
instrumentalities) and securities of state or municipal governments and
their political subdivisions are not considered to be issued by members of
any industry.
D.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING BORROWING
Every Fund is required to have a fundamental policy with respect to
borrowing and each Fund is presently prohibited from borrowing, except as
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<PAGE>
borrowings may be necessary for temporary or emergency purposes (such as
meeting redemption requests that might otherwise require the untimely
disposition of securities). Certain Funds had limited their permissible
borrowings to amounts not in excess of a specified amount, such as 10% or 33 -
1/3% of the Fund's total assets, and, in some cases, except as engaging in
certain investment strategies may be considered borrowings. The language of
these policies, however, varies widely from Fund to Fund. It is therefore
proposed that this language be simplified and standardized. In addition, the
Funds that do not already have specific authority are proposed to be granted
authority to engage in reverse repurchase agreements and forward roll
transactions, practices that may be deemed to involve borrowing and are
frequently authorized for use by sophisticated institutional asset managers.
Under a reverse repurchase agreement, a Fund would sell securities and agree
to repurchase them at a mutually agreed date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish and maintain a
segregated account with an approved custodian containing cash or liquid
securities having a value not less than the repurchase price (including
accrued interest). Reverse repurchase agreements involve the risk that the
market value of the securities may decline prior to the repurchase date. The
cash proceeds of the sales may be invested in securities or other instruments.
In the event the buyer of securities under a reverse repurchase agreement
files for bankruptcy or becomes insolvent, such buyer or its trustee or
receiver may receive an extension of time to determine whether to enforce the
Fund's obligation to repurchase the securities, and the Fund's use of the
proceeds of the reverse repurchase agreement may effectively be restricted
pending such decision.
A Fund also may enter into forward roll transactions, in which the Fund
sells fixed income securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. During the roll
period, the Fund would forego principal and interest paid on such securities.
The Fund would be compensated by the difference between the current sales
price and the forward price for the future purchase, as well as by the
interest earned on the cash proceeds of the initial sale.
If a Fund borrows and uses the proceeds to make additional investments,
income and appreciation from such investments will improve its performance if
they exceed the associated borrowing costs but impair its performance if they
are less than such borrowing costs. This speculative factor is known as
"leverage". These Funds have chosen not to borrow money for leveraging
purposes. The policies of certain Funds currently provide that whenever
borrowings other than repurchase agreements and forward roll transactions
exceed 5% of the value of the Fund's total assets, the Fund will not make
additional investments. While the 1940 Act and the rules thereunder do not
require such a policy, and the Funds do not propose to include language to
this effect in their fundamental restrictions, the Board of each Fund has
determined that its assets should be managed in accordance with such a policy.
Set forth below is each such Fund's policy on borrowing, as proposed to be
modified or adopted:
[The Fund will not] borrow money, except that (a) the Fund may borrow
from banks for temporary or emergency (not leveraging) purposes, including
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<PAGE>
the meeting of redemption requests which might otherwise require the
untimely disposition of securities, and (b) the Fund may, to the extent
consistent with its investment policies, enter into reverse repurchase
agreements, forward roll transactions and similar investment strategies
and techniques. To the extent that it engages in transactions described in
(a) and (b), the Fund will be limited so that no more than 33 -1/3% of the
value of its total assets (including the amount borrowed), valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) valued at the time the borrowing is made, is derived from such
transactions.
E.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
ELIMINATION OF EACH FUND'S FUNDAMENTAL POLICY RESTRICTING ITS ABILITY TO
PLEDGE ASSETS
The Board of each of these Funds has approved, subject to shareholder
approval, the elimination of fundamental policies restricting the Fund's
ability to pledge its assets to other parties. The elimination of the Fund's
fundamental investment limitations regarding pledging assets would remove all
restrictions on the ability of each Fund to pledge, mortgage, hypothecate or
otherwise encumber its assets, except for those restrictions imposed by or
under the 1940 Act, and would leave the imposition of any further limits on
the Fund's pledging activities to the sole discretion of the Board, subject to
applicable SEC disclosure requirements.
A Fund's current fundamental investment limitations on pledging assets may
conflict with its ability to engage in permitted borrowings, purchase
securities on a when-issued or delayed delivery basis, lend portfolio
securities, enter into escrow arrangements in connection with writing options,
enter into collateral arrangements in connection with investments involving
futures contracts and options thereon and possibly to engage in other
investments and arrangements that may develop in the future. Each Board has
approved the elimination of the Fund's fundamental investment limitations
restricting pledging of assets to avoid these potential conflicts and to
secure greater flexibility for the future.
The potential conflict between a Fund's pledging and borrowing limitations,
for instance, arises because banks generally require borrowers such as a Fund
to pledge assets in order to collateralize the amount borrowed. The Funds
currently are permitted to borrow from banks for temporary or emergency
purposes in limited amounts that vary from Fund to Fund and, in most cases, to
pledge assets to secure permitted borrowings. Loan agreements between
investment companies and banks generally require collateral or provide that
the bank may, at its option, require collateral for future outstanding loans.
The amount of required collateral, however, generally exceeds the principal
amount of the loan. Therefore, the limitation on the amount of portfolio
securities that a Fund is permitted to pledge effectively reduces the maximum
borrowing ability of such Fund to below the
15
<PAGE>
amount it is permitted to borrow. Each Board believes that the pledging
limitations should be eliminated to ensure that the Fund's flexibility to
consider borrowing money temporarily as a means of raising cash is not limited
by restrictions in its ability to pledge assets. The pledging of assets may,
however, limit some flexibility that a portfolio manager has to engage in
transactions involving Fund assets or to meet extraordinary redemptions if, at
the same time, the loans for which the assets are pledged remain outstanding.
F.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING LENDING BY THE
FUND
Each of these Funds has or is required to have a fundamental policy
prohibiting the Fund from lending its assets to other persons, or limiting its
authority to lend assets, except that certain Funds may variously engage in
loans of their portfolio securities, enter into repurchase agreements and
purchase debt instruments. The language of these policies is proposed to be
standardized and clarified.
If this proposal is approved by shareholders, each Fund may lend portfolio
securities to well-known and recognized U.S. and foreign brokers, dealers and
banks. Currently, the maximum allowed under the 1940 Act is 33 -1/3% of the
value of a Fund's total assets. A Fund will not lend securities to Smith
Barney or its affiliates, unless the Fund has applied for and received
specific authority to do so from the SEC. A Fund's loan of securities will be
collateralized as required by the SEC, by cash, letters of credit or U.S.
government securities. The cash or instruments collateralizing a Fund's loan
of securities will be maintained at all times in a segregated account with the
Fund's custodian, or with a designated sub-custodian, in an amount at least
equal to the current market value of the loaned securities. From time to time,
a Fund may pay a part of the interest earned from the investment of collateral
received for securities loaned to the borrower and/or a third party that is
unaffiliated with the Fund and is acting as a "finder" (unless the SEC permits
affiliated persons to serve as "finders"). Whenever a Fund loans securities,
it will comply with conditions established by the SEC, which conditions
currently include: (1) the Fund must receive at least 100% cash collateral or
equivalent securities from the borrower; (2) the borrower must increase the
collateral whenever the market value of the securities loaned rises above the
level of the collateral; (3) the Fund must be able to terminate the loan at
any time; (4) the Fund must receive reasonable interest on the loan, as well
as any dividends, interest or other distributions on the loaned securities,
and any increase in market value; (5) the Fund may pay only reasonable
custodian fees in connection with the loan; and (6) voting rights on the
loaned securities may pass to the borrower except that, if a material event
adversely affecting the investment in the loaned securities
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occurs, the Fund must terminate the loan and regain the right to vote the
securities. In lending securities to U.S. and foreign brokers, dealers and
banks, the Fund will be subject to risks, which, like those associated with
other extensions of credit, include possible loss of rights in the collateral
should the borrower fail financially.
The practice of lending securities is expected to generate income for the
Funds. The Adviser for each Fund is responsible for assuring that this
practice will not effect adversely a Fund's ability to meet its investment
objective, including an objective of growth or capital appreciation.
Set forth below is the policy on lending, as proposed to be modified:
[The Fund will not] make loans. This restriction does not apply to: (a)
the purchase of debt obligations in which the Fund may invest consistent
with its investment objectives and policies; (b) repurchase agreements;
and (c) loans of its portfolio securities, to the fullest extent permitted
under the 1940 Act.
G.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING THE UNDERWRITING
OF SECURITIES OF OTHER ISSUERS
Each of these Funds has or is required to have a policy regarding the Fund
acting as an underwriter of securities. The language of the Funds' policies,
however, varies widely. Some Funds combine this policy with the Funds' policy
regarding restricted securities. The policy respecting restricted securities
is now proposed to be adopted as a separate policy and is discussed below
under sub-paragraph J. This policy is proposed to be standardized and
clarified, but not changed in any material way. The modification will clarify
that the Fund will not be deemed to be an underwriter by reason of disposing
of portfolio securities. The modification will not involve any change in the
manner in which the Fund is currently managed.
Set forth below is each Fund's policy on underwriting, as proposed to be
modified:
[The Fund will not] engage in the business of underwriting securities
issued by other persons, except to the extent that the Fund may
technically be deemed to be an underwriter under the Securities Act of
1933, as amended, in disposing of portfolio securities.
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H.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
RECLASSIFICATION AS NON-FUNDAMENTAL AND MODIFICATION OF EACH FUND'S
FUNDAMENTAL POLICY REGARDING THE PURCHASE OF SECURITIES ON MARGIN AND THE
SHORT SALE OF SECURITIES
Each of these Funds has a fundamental policy that prohibits the Fund from
purchasing securities on margin and making short sales. The Board of each Fund
recommends that shareholders vote to eliminate these fundamental investment
limitations and replace them with the standard non-fundamental policy set
forth below. The policy, as proposed, would give each Fund's Board greater
flexibility in its ability to respond to the availability of new instruments
and strategies.
Margin purchases involve the purchase of securities with money borrowed from
a broker. Each Fund's current fundamental policy prohibits the Fund from
purchasing securities on margin, except to obtain short-term credits as may be
necessary for the clearance of transactions and for initial and variation
margin payments made in connection with the purchase and sale of futures
contracts and options on futures contracts or related options. With these
exceptions, mutual funds are unable to enter into most types of margin
transactions under applicable SEC regulations. As a result, elimination of
each Fund's fundamental limitation on margin transactions is unlikely to
affect the Fund's investment strategies at this time. However, in the event of
a change in the applicable federal regulatory requirements, the Funds may
alter their investment practices in the future.
Each Fund's current fundamental policy prohibits the making of short sales,
except short sales "against the box." As used in this context, a short sale
"against the box" means a short sale where the Fund owns the securities sold
short or, by virtue of its ownership of other securities, the Fund has the
right to obtain securities equivalent in kind and amount to the securities
sold. The proposed non-fundamental limitation includes this exception. As with
margin transactions, the Board of each Fund does not anticipate that
elimination of the fundamental policy on short sales will affect the Fund's
investment strategies at this time.
While certain Funds have a separate fundamental policy regarding the
purchase of securities on margin and making short sales, others combine these
policies into one global policy. The policy as proposed to be adopted below
eliminates these differences and combines the two investment policies into a
global one:
[The Fund will not] purchase any securities on margin (except for such
short-term credits as are necessary for the clearance of purchases and
sales of portfolio securities) or sell any securities short (except
"against the box"). For purposes of this restriction, the deposit or
payment by the Fund of underlying securities and other assets in escrow
and collateral agreements with
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respect to initial or maintenance margin in connection with futures
contracts and related options and options on securities, indexes or
similar items is not considered to be the purchase of a security on
margin.
I.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
SMITH BARNEY MUNI FUNDS (ALL SERIES)
MODIFICATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING THE FUND'S
PURCHASE OR SALE OF REAL ESTATE, REAL ESTATE LIMITED PARTNERSHIP INTERESTS
OR COMMODITIES
Each of these Funds has or is required to have a policy with respect to
investments in real estate, which may or may not contain a restriction against
investments in real estate limited partnership interests and in commodities
contracts. If approved by shareholders, these restrictions would be amended to
permit the Fund to invest in securities of companies that deal in mortgages
and real estate and securities secured by real estate and interests therein.
In addition, the modified restriction reserves for the Fund the freedom of
action to hold and sell real estate acquired as a result of the Fund's
ownership of securities. For example, this modified policy would allow the
Fund to dispose of real estate in the event that it acquired real estate as
the result of a default on securities it holds.
The modified policy would also permit, without further action by
shareholders, the Fund to purchase and sell futures contracts and options
thereon.
Although no Fund has any current intention of expanding the range of
instruments it is currently permitted to purchase, the modification of this
policy would permit a Fund greater flexibility to respond to market and other
developments. Any future change in the Fund's manner of investing or the
instruments it may purchase would require Board approval and appropriate
disclosure to shareholders.
The proposed modification also permits the Funds (other than Smith Barney
Money Funds, Inc.) to invest in real estate investment trust securities.
Although this modification is not expected to involve any change in the manner
in which a Fund's assets are currently invested, the proposed limitation seeks
to avoid ambiguity by making it explicit that the Funds (other than Smith
Barney Money Funds, Inc. which has a fundamental policy prohibiting it from
investing in such securities) may, to the extent consistent with their outlook
on the market, invest in real estate investment trust securities.
To the extent that the Funds invest in real estate related securities, the
Funds' performance will be subject to the risks of the real estate market.
This industry is sensitive to factors such as real estate values and property
taxes, overbuilding, variations in rental income, and interest rates.
Performance could also be affected by the structure, cash flow and management
skill of real estate companies.
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Set forth below are the Funds' policies regarding the purchase or sale of
real estate or commodities, as proposed to be modified or adopted:
ALL FUNDS EXCEPT SMITH BARNEY MONEY FUNDS, INC. AND SMITH BARNEY MUNI
FUNDS:
[The Fund will not] purchase or sell real estate, real estate mortgages,
commodities or commodity contracts, but this restriction shall not prevent
the Fund from (a) investing in securities of issuers engaged in the real
estate business or the business of investing in real estate (including
interests in limited partnerships owning or otherwise engaging in the real
estate business or the business of investing in real estate) and
securities which are secured by real estate or interests therein; (b)
holding or selling real estate received in connection with securities it
holds or held; (c) trading in futures contracts and options on futures
contracts (including options on currencies to the extent consistent with
the Funds' investment objective and policies); or (d) investing in real
estate investment trust securities.
SMITH BARNEY MONEY FUNDS, INC. AND SMITH BARNEY MUNI FUNDS ONLY:
The policy of each of the Short-Term U.S. Treasury Securities Portfolio of
Smith Barney Funds, Inc., Smith Barney Money Funds Inc. and Smith Barney Muni
Funds currently prohibits each Fund from investing in real estate investment
trusts. The policy as proposed to be adopted below maintains those
restrictions and therefore differs from the policies proposed above with
respect to others.
[The Fund will not] purchase or sell real estate, real estate mortgages,
real estate investment trust securities, commodities or commodity
contracts, but this restriction shall not prevent the Fund from (a)
investing in securities of issuers engaged in the real estate business or
the business of investing in real estate (including interests in limited
partnerships owning or otherwise engaging in the real estate business or
the business of investing in real estate) and securities which are secured
by real estate or interests therein; (b) holding or selling real estate
received in connection with securities it holds or held; or (c) trading in
futures contracts and options on futures contracts (including options on
currencies to the extent consistent with the Funds' investment objective
and policies).
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J.SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
RECLASSIFICATION AS NON-FUNDAMENTAL OF EACH FUND'S FUNDAMENTAL POLICIES
REGARDING INVESTMENTS IN RESTRICTED AND ILLIQUID SECURITIES.
Each of these Funds' fundamental policies currently provide that the Fund
will not purchase or otherwise acquire any securities that are subject to
legal or contractual restrictions on resale or for which there is no readily
available market or, in some cases, enter into a repurchase agreement maturing
in more than five business or seven calendar days, if as a result more than
10% of its assets would be invested in all such securities. These policies are
not required to be fundamental and, additionally, are considered overly
restrictive in the current regulatory and market environment.
If approved by shareholders, these policies would be reclassified as non-
fundamental and the Board intends to adopt a non-fundamental investment policy
that could be changed by vote of the Board in response to regulatory or market
developments without further approval by shareholders. The non-fundamental
policy would provide that the Fund could not purchase or otherwise acquire any
security if, as a result, more than 10% of its net assets would be invested in
securities that are illiquid.
An open-end investment company, including each of the Funds, may not hold a
significant amount of illiquid securities because these securities may be
difficult to value accurately and because it is possible that the investment
company would have difficulty liquidating such securities if necessary in
order to satisfy in a timely manner requests to redeem shares of the Fund. In
general, illiquid securities have included those enumerated in each Fund's
fundamental restriction (e.g., securities subject to contractual or legal
restrictions on resale, securities for which there is no readily available
market and repurchase agreements or time deposits maturing in greater than
seven days). The securities markets are evolving, however, and new types of
instruments have developed that make each Fund's current policies on illiquid
investments overbroad and unnecessarily restrictive. In addition, the markets
for some types of securities are almost exclusively institutional--repurchase
agreements, commercial paper, many types of municipal securities and some
corporate bonds and notes. These instruments are often exempt from
registration under the U.S. securities laws or sold in transactions not
requiring registration. Consequently, institutional investors depend on the
issuer's ability to honor a demand for repayment in less than seven days or on
an efficient institutional market in which the unregistered security can
readily be resold. The fact that there may be legal or contractual
restrictions on resale to the general public, therefore, does not necessarily
determine the liquidity of these investments.
In recognition of the increased size and liquidity of the institutional
market for unregistered securities and the importance of institutional
investors in the capital formation process, the SEC has advanced rule and
legislative proposals designed to facilitate efficient trading among
institutional investors. The most important of these, Rule 144A under the
Securities Act of 1933, as amended, contemplates a particularly broad
institutional trading market for securities subject to restriction on resale
to the general public. As these institutional markets develop, the Funds could
be constrained by their current investment restrictions even though
21
<PAGE>
the institutional restricted securities markets would provide readily
ascertainable market values for such securities and the ability to liquidate an
investment in order to satisfy Fund share redemption orders on a timely basis.
In order to take advantage of these regulatory initiatives and the increasingly
liquid institutional trading markets, the Board recommends that the Fund
reclassify as non-fundamental its policies regarding investments in illiquid
securities and limit such investments to not more than 10% of its net assets.
Under this new policy, restricted securities that have nonetheless been
determined to be liquid may be purchased without limitation. As a result, Funds
that may previously have been prohibited from investing in all restricted
securities, will be able, under the new proposal, to invest in securities that
are restricted but liquid, such as those that can be offered and sold to
"qualified institutional buyers" under Rule 144A.
If this proposal is approved by shareholders, the specific types of
securities that may be deemed to be illiquid or liquid will be determined by
the Board in a manner consistent with current regulatory positions of the SEC
and its staff. The Board has adopted guidelines and delegated to management the
daily function of determining and monitoring liquidity of restricted securities
available pursuant to Rule 144A. The Board, however, retains sufficient
oversight and is ultimately responsible for the determinations. Since it is not
possible to predict with assurance exactly how the market for Rule 144A
restricted securities will develop, the Board will carefully monitor each
Fund's investments in these securities, focusing on such important factors,
among others, as valuation, liquidity and availability of information.
Investments in restricted securities could have the effect of increasing the
level of illiquidity in a Fund to the extent that qualified institutional
buyers become for a time uninterested in these restricted securities. By making
each Fund's policy on illiquid securities non-fundamental, the Funds will be
able to respond more rapidly to regulatory and market developments because a
shareholder vote will not be required to redefine the types of securities that
are deemed illiquid. Set forth below is the non-fundamental policy proposed to
be adopted by the Board of each Fund if this proposal is approved by
shareholders of the Fund:
[The Fund will not] purchase or otherwise acquire any security if, as a
result, more than 10% of its net assets would be invested in securities
that are illiquid.
K.NOT APPLICABLE TO THE FUNDS
L.SMITH BARNEY MUNI FUNDS (NATIONAL PORTFOLIO AND NEW YORK PORTFOLIO ONLY)
ELIMINATION OF EACH FUND'S FUNDAMENTAL POLICY REGARDING THE PURCHASE OF
SECURITIES OF AN ISSUER WHEN THE BOARD MEMBERS AND OFFICERS OF THE FUND OR
OF THE ADVISER HOLD MORE THAN 1/2 OF 1% AND/OR TOGETHER THEY OWN MORE THAN
5% OF THE SECURITIES OF THE ISSUER
These Funds' fundamental policies currently include a restriction that
prohibits the Funds from purchasing or retaining the securities of any issuer
if any
22
<PAGE>
officer or Board member of the Fund or of the Fund's investment adviser
individually owns more than 1/2 of 1% of the securities of that issuer and/or
together they own more than 5% of such securities. This investment restriction
was originally adopted to address requirements no longer applicable to the
Funds under state securities laws in connection with the registration of shares
of the Funds for sale in certain states. Neither the Funds nor their management
is aware of any past violations of this policy, but the Funds have been advised
by their management that accurate monitoring of compliance with this
restriction is difficult, burdensome and may inhibit portfolio management.
Accordingly, the Board of these Funds has determined that the benefits derived
from this restriction are now outweighed by the cost of compliance and the
possible inhibitions on management, and elimination of this restriction will
potentially increase the Funds' flexibility when selecting investments for a
Fund in the future. The ability of a Fund to invest in companies in which its
directors and officers, or its affiliates and their directors and officers,
hold interests would continue to be restricted by the 1940 Act and each Fund's
Code of Ethics, whether or not the current fundamental investment restriction
is eliminated. The elimination of this restriction is not expected to involve
any change in the manner in which a Fund's assets are currently invested.
M.SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNI FUNDS (NATIONAL PORTFOLIO AND NEW YORK PORTFOLIO ONLY)
RECLASSIFICATION AS NON-FUNDAMENTAL OF EACH FUND'S INVESTMENT POLICY
REGARDING PURCHASES OF SECURITIES OF OTHER INVESTMENT COMPANIES.
These Funds currently have a fundamental investment policy prohibiting
investments in other investment companies, except as part of a merger,
consolidation, or acquisition of assets or, in the case of some Funds, in
certain other circumstances such as when the investment is otherwise generally
permitted by the 1940 Act or pursuant to any exemption adopted by the SEC. If
approved by shareholders, this restriction would be reclassified as non-
fundamental. Each Fund's Board currently intends to maintain a policy that
would involve no change in the manner in which the Fund's assets are invested.
In addition, the 1940 Act currently limits the amount an investment company may
invest in other investment companies. As a result, this reclassification should
not be material but will provide each Fund greater flexibility to respond to
regulatory and other developments.
N.SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
RECLASSIFICATION AS NON-FUNDAMENTAL OF EACH FUND'S FUNDAMENTAL POLICY
PROHIBITING THE PURCHASE OF SECURITIES FOR PURPOSES OF EXERCISING CONTROL
OR MANAGEMENT
These Funds have a fundamental policy prohibiting the Fund from investing its
assets so as to exercise control or management (or control of management) of
23
<PAGE>
an issuer. Although the restriction was required under certain state securities
laws, it is not required to be fundamental. If approved by shareholders, this
policy would be reclassified as non-fundamental and each Board currently
intends to adopt a substantially similar non-fundamental investment policy that
would involve no change in the manner in which the Fund's assets are currently
invested. This will provide each Fund greater flexibility to respond to
regulatory and other developments.
O.SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
RECLASSIFICATION AS NON-FUNDAMENTAL OF EACH FUND'S FUNDAMENTAL POLICY
REGARDING THE FUND'S INVESTMENTS IN OIL, GAS OR OTHER MINERAL EXPLORATION
OR DEVELOPMENT PROGRAMS
Each of these Funds has a fundamental policy prohibiting investment in any
oil, gas or other mineral exploration or development program, with certain
exceptions. This investment restriction was adopted to address requirements
under certain state securities laws, but is not required to be fundamental.
Each Board believes that this investment restriction should be reclassified as
a non-fundamental policy to respond to regulatory developments. If approved by
shareholders, each Board currently intends to adopt a substantially similar
non-fundamental policy.
P.NOT APPLICABLE TO THE FUNDS
Q.NOT APPLICABLE TO THE FUNDS
R.SMITH BARNEY MONEY FUNDS, INC. (ALL SERIES)
SMITH BARNEY MUNI FUNDS (ALL SERIES)
RECLASSIFICATION AS NON-FUNDAMENTAL OF EACH FUND'S FUNDAMENTAL POLICY ON
THE PURCHASE OR SALE OF PUTS, CALLS, AND COMBINATIONS THEREOF
Each of these Funds has a fundamental policy limiting investments involving
puts, calls, straddles and spreads. The Board of each Fund recommends that
shareholders vote to eliminate this fundamental investment limitation. Although
no Fund has any current intention of actually expanding the range of
instruments it is currently permitted to purchase, the reclassification as non-
fundamental of a Fund's fundamental policy limiting investments involving puts,
calls, straddles and/or spreads would permit the Fund greater flexibility to
respond to market and other developments. Certain Funds' current investment
policies place limits on the percentage of Fund assets that may be invested in
options such as puts and calls. Although these Funds are proposing to
reclassify such investment policies as non-fundamental, the Funds have no
current intention of changing their investment policies with respect to puts,
calls and combinations thereof, including changing
24
<PAGE>
any such limits which are now placed on the Funds' ability to invest in such
instruments. In addition, Funds that historically have not engaged in investing
in such instruments will do so pursuant to the new policy only under the
careful review of each Fund's Board, which review may include, among other
things, placing limitations on the value of the Fund's assets invested in such
instruments and limitations on the level of risk deemed to be acceptable in
connection with such investments. Put and call options involve a certain degree
of risk. If a put or call option written by a Fund were exercised, the Fund
would be obligated to buy or sell the underlying security at the exercise
price. As a result, writing a put option involves the risk of a decrease in the
market value of the underlying security, in which case the option could be
exercised and the underlying security would then be sold by the option holder
to the Fund at a higher price than its current market value. Writing a call
option involves the risk of an increase in the market value of the underlying
security, in which case the option could be exercised and the underlying
security would then be sold by the Fund to the option holder at a lower price
than its current market value. Any future change in the Fund's manner of
investing or the instruments it may purchase will accompany appropriate
disclosure to shareholders.
S. NOT APPLICABLE TO THE FUNDS
REQUIRED VOTE
Approval of each investment policy proposal requires a Majority Vote of each
Fund. Each Board has considered various factors and believes that approval of
these investment policy changes are in the best interest of the Fund and its
shareholders. If these investment proposals are not approved by any Fund, that
Fund's current fundamental investment policies will remain in effect.
THE BOARD OF EACH FUND, INCLUDING A MAJORITY OF THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE RECLASSIFICATION, MODIFICATION
AND/OR ELIMINATION OF THE FUNDS' FUNDAMENTAL POLICIES AS DESCRIBED ABOVE.
PROPOSAL 3:
TO APPROVE RETENTION OF THE FUNDS' CLASSIFICATION AS "NON-DIVERSIFIED"
INVESTMENT COMPANIES UNDER THE 1940 ACT.
SMITH BARNEY MUNI FUNDS (CALIFORNIA MONEY MARKET PORTFOLIO, FLORIDA PORTFOLIO,
GEORGIA PORTFOLIO AND PENNSYLVANIA PORTFOLIO ONLY)
Each of the California Money Market, Florida, Georgia and Pennsylvania Series
of Smith Barney Muni Funds (collectively referred to in this Proposal 3 as the
"Funds") were originally registered as "non-diversified" investment companies
under the 1940 Act. As defined in the 1940 Act, a "diversified" investment
company must, with respect to 75% of its assets, have no more than
25
<PAGE>
5% of its total assets invested in a single issuer and own not more than 10% of
the outstanding voting securities of any single issuer. All other funds not
electing to meet this definition are "non-diversified" investment companies
within the meaning of the 1940 Act. During the past three years, the portfolio
managers for these Funds have found it appropriate to diversify their
investments, in light of available investment opportunities and market
conditions, notwithstanding this original election. The SEC has taken the
position that non-diversified funds that have operated as diversified
investment companies for at least three years must obtain shareholder approval
to retain their status as non-diversified funds.
The Adviser has advised the Board of Smith Barney Muni Funds that non-
diversified status affords the Funds greater investment flexibility in the best
interest of shareholders. This flexibility could be especially useful and
desirable for Funds such as the ones to which this Proposal pertains, where
investments are limited largely to issues yielding income that is not subject
to income tax in a particular state. If this Proposal is approved, the Funds
will not be limited by the 1940 Act in the proportion of their assets that they
may invest in the obligations of a single issuer. Each Fund, however, intends
to conduct its operations so as to qualify as a "regulated investment company"
for purposes of the Internal Revenue Code of 1986, as amended (the "Code"),
which will relieve the Fund of any liability for Federal income tax and state
franchise taxes to the extent its earnings are distributed to shareholders. To
so qualify, among other requirements, each Fund will limit its investments so
that, at the close of each quarter of the taxable year, (a) not more than 25%
of the market value of the Fund's total assets will be invested in the
securities of a single issuer, (b) with respect to 50% of the market value of
its total assets, not more than 5% of the market value of its total assets will
be invested in the securities of a single issuer, and (c) the Fund will not own
more than 10% of the outstanding voting securities of a single issuer.
Each Fund's assumption of larger positions in the obligations of a smaller
number of issuers may cause that Fund's share price to fluctuate to a greater
extent than that of a diversified company as a result of changes in the
financial condition or in the market's assessment of the issuers.
REQUIRED VOTE
Approval of this Proposal for each Fund requires a Majority Vote of the Fund.
The Board of each Fund has considered various factors and believes that
approval of this Proposal is in the best interest of each Fund and its
shareholders. If the Proposal is not approved, the Boards will consider various
alternatives, including allowing the Funds to be classified as diversified
funds under the 1940 Act or resoliciting shareholders.
THE BOARD OF THE FUND, INCLUDING A MAJORITY OF THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" RETENTION OF CLASSIFICATION OF THE
FUND AS A "NON-DIVERSIFIED" INVESTMENT COMPANY UNDER THE 1940 ACT.
26
<PAGE>
ADDITIONAL INFORMATION
The name and address of each Fund's investment adviser(s), principal
underwriter and Administrator are set forth in Exhibit C hereto.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Funds do not hold regular shareholders meetings. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the Fund at the address set forth on the cover of this joint proxy statement.
Proposals must be received at a reasonable time prior to the date of a meeting
of shareholders to be considered for inclusion in the materials for a Fund's
meeting. Timely submission of a proposal does not, however, necessarily mean
that such proposal will be included.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% (25% in the case of some Funds) of each
Fund's outstanding voting securities (as defined in the 1940 Act) may require
the calling of a meeting of shareholders for the purpose of voting on the
removal of any Board member of the Fund. Meetings of shareholders for any
other purpose also shall be called by the Board members when requested in
writing by shareholders holding at least 10% (25% in the case of some Funds)
of the shares then outstanding or, if the Board members shall fail to call or
give notice of any meeting of shareholders for a period of 30 days after such
application, shareholders holding at least 10% of the shares then outstanding
may call and give notice of such meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Funds do not intend to present any other business at the Meeting, nor
are they aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy card(s) will vote thereon in accordance with their
judgment.
December 10, 1997
A FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT AND THE MOST
RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY, TO A
SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO A FUND BY
CALLING (800) 473-6977 OR BY WRITING TO A FUND, 388 GREENWICH STREET, NEW
YORK, NEW YORK 10013.
----------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN EACH PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PAID ENVELOPE.
27
<PAGE>
EXHIBIT A
BOARD MEMBER COMPENSATION,
BOARD AND COMMITTEE MEETINGS
<TABLE>
<CAPTION>
AMOUNTS PAID DURING CALENDAR YEAR ENDED DONALD R. PAUL HEATH B.
DECEMBER 31, 1996 FROM FUND TO BOARD MEMBER FOLEY HARDIN MCLENDON
- ------------------------------------------- --------- ------- --------
<S> <C> <C> <C>
Smith Barney Disciplined Small Cap Fund, Inc.*...... $ 828 $ 956 $ 0
Smith Barney Money Funds, Inc. ..................... $16,944 $32,301 $ 0
Smith Barney Municipal Money Market Fund, Inc....... $ 3,226 $ 5,895 $ 0
Smith Barney Muni Funds............................. $ 8,421 $11,161 $ 0
Compensation Paid to Board Members from all other
Smith Barney Funds................................ $ 5,280 $ 6,515 $ 0
Total Compensation**................................ $34,699 $56,828 $ 0
</TABLE>
- -----------
* Smith Barney Disciplined Small Cap Fund, Inc. is a successor to The
Inefficient-Market Fund, Inc., a closed-end investment company. The figures
reflected in this Exhibit A were accrued during the period that Fund
functioned as a closed-end investment company.
** Reflects amounts paid to Board member for the last complete Calendar Year
of each Fund on whose Board the Board member sits.
A-1
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
NUMBER OF AUDIT NOMINATING
BOARD COMMITTEE COMMITTEE
MEETINGS MEETINGS MEETINGS
HELD HELD HELD
DURING DURING DURING
CALENDAR CALENDAR CALENDAR
YEAR ENDED YEAR ENDED YEAR ENDED
RODERICK C. BRUCE D. JOHN P. DECEMBER 31, DECEMBER 31, DECEMBER 31,
RASMUSSEN SARGENT TOOLAN 1996 1996 1996
- ----------- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 856 $ 0 $ 856 7 2 0
$32,002 $ 0 $32,002 8 2 0
$ 5,754 $ 0 $ 5,754 7 2 0
$10,239 $ 0 $10,239 8 2 0
$ 6,051 $ 0 $ 6,151
$54,902 $ 0 $55,002
</TABLE>
A-2
<PAGE>
EXHIBIT B
EXECUTIVE OFFICERS OF THE FUNDS
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER
(AGE) PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE FOR PAST 5 YEARS
------------------------- -------------------------------------------------------------
<C> <S>
Joseph Benevento (29) Vice President of Smith Barney.
Sandip A. Bhagat (37) President of Travelers Investment Management Company ("TIMCO");
prior to 1995, Senior Portfolio Manager for TIMCO.
Peter M. Coffey (53) Managing Director of Smith Barney.
Lewis E. Daidone (40) Managing Director of Smith Barney; Director and Senior Vice
President of Smith Barney Mutual Funds Management Inc.
("SBMFM") and Travelers Investment Adviser, Inc. ("TIA");
Senior Vice President and Treasurer of 41 Funds of Smith Barney
Mutual Funds.
Martin R. Hanley (31) Vice President of Smith Barney; prior to August 1993, Vice
President of Shearson Lehman Advisors ("SLA").
Kent A. Kelley (47) Chief Executive Officer of TIMCO; prior to 1995, president and
Chief Investment Officer of TIMCO.
Heath B. McLendon (64) Managing Director of Smith Barney; President and Director of
SBMFM and TIA; Chairman of Smith Barney Strategy Advisers Inc.;
prior to 1993, Senior Executive Vice President of Shearson
Lehman Brothers Inc., Vice Chairman of Shearson Asset
Management, Director of PanAgora Asset Management, Inc. and
PanAgora Asset Management Limited.
Lawrence T. McDermott (49) Managing Director of Smith Barney; prior to July 1993, Managing
Director of SLA.
Christina T. Sydor (45) Managing Director of Smith Barney; General Counsel, Secretary
of SBMFM and TIA and Secretary of 41 Smith Barney Mutual Funds.
Phyllis M. Zahorodny (39) Managing Director of Smith Barney; prior to July 1993, Managing
Director of SLA.
</TABLE>
B-1
<PAGE>
(This page intentionally left blank)
<PAGE>
NAMES AND ADDRESSES OF INVESTMENT ADVISERS, DISTRIBUTORS, ADMINISTRATORS AND
OFFICERS
UNLESS OTHERWISE INDICATED IN THIS EXHIBIT C, THE FOLLOWING INFORMATION APPLIES
TO ALL FUNDS:
INVESTMENT ADVISER EXECUTIVE OFFICERS*:
AND ADMINISTRATOR:
Heath B. McLendon, Chairman of the Board and
Smith Barney Mutual Chief Executive Officer
Funds Management
Inc.388 Greenwich
StreetNew York, NY
10013
Lewis E. Daidone, Senior Vice President and
Treasurer
DISTRIBUTOR: Christina T. Sydor, Secretary
Smith Barney Inc.388
Greenwich StreetNew
York, NY 10013
<TABLE>
<CAPTION>
INVESTMENT ADVISERS,
FUND DISTRIBUTORS AND ADMINISTRATORS EXECUTIVE OFFICERS*
---- ------------------------------- -------------------
<S> <C> <C>
Smith Barney Disciplined Investment Adviser: Sandip A. Bhagat, Vice President
Small Cap Funds, Inc. Travelers Investment Management Kent A. Kelley, Vice President
Company
One Tower Square
Hartford, CT 06183-2030
Smith Barney Money Phyllis M. Zahorodny, Vice
Funds, Inc. President and Investment Officer
Martin R. Hanley, Vice President
and
Investment Officer
Smith Barney Municipal Lawrence T. McDermott, Vice
Money President and Investment Officer
Market Fund, Inc.
Peter M. Coffey, Vice President
and Investment Officer
Joseph Benevento, Vice President
and
Investment Officer
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C> <C>
Smith Barney Muni Funds Peter M. Coffey, Vice President
and Investment Officer
Lawrence T. McDermott, Vice
President and Investment Officer
Joseph Benevento, Vice President
and
Investment Officer
</TABLE>
- ----
* Please refer to Exhibit B for a description of each officer's background.
C-2
<PAGE>
EXHIBIT D
CURRENT TEXT OF THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES SUBJECT TO CHANGES
AS DESCRIBED IN PROPOSAL 2
INDEX
<TABLE>
<S> <C>
Smith Barney Disciplined Small Cap Fund, Inc............................... D-1
Smith Barney Money Funds, Inc.............................................. D-1
Smith Barney Municipal Money Market Fund, Inc.............................. D-3
Smith Barney Muni Funds
California Money Market Portfolio and New York Money Market Portfolio.... D-3
Florida Portfolio, Georgia Portfolio, Limited Term Portfolio, and
Pennsylvania Portfolio................................................. D-4
National Portfolio and New York Portfolio................................ D-5
</TABLE>
To the extent the text of each of your Fund's current fundamental investment
policies is proposed to be modified by Proposal 2 of this Proxy Statement,
such investment policy is followed in this Appendix D by a parenthetical
referencing the sub-proposal in Proposal 2 which proposes to modify it. Please
use these parenthetical references to compare each of your Fund's current
fundamental investment policies with each of the policies as proposed to be
adopted in Proposal 2 hereto.
<PAGE>
TEXT
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC. MAY NOT:
(1) Invest 25% or more of the value of its total assets in any one industry.
(Subproposal C).
(2) Borrow money (including borrowing through entering into reverse
repurchase agreements) in excess of 33- 1/3% of its total assets (including
the amount borrowed but excluding any liabilities and indebtedness
constituting senior securities) except that the Fund may borrow up to an
additional 5% of its total assets for temporary purposes, pledge its assets
other than to secure such borrowings or in connection with hedging
transactions, short sales, when-issued and forward commitment transaction and
similar investment strategies. (Subproposals D, E).
(3) Issue any senior security if such issuance is specifically prohibited by
the 1940 Act or the rules and regulations thereunder (for the purpose of this
restriction, collateral arrangements with respect to options, futures
contracts and options on futures contracts and collateral arrangements with
respect to initial and variation margin are not deemed to be the issuance of a
senior security). (Subproposal B).
(4) Make loans, except that the Fund may purchase debt obligations, may
enter into repurchase agreements and may lend its securities. (Subproposal F).
(5) Underwrite the securities of other issuers, except to the extent that in
connection with the disposition of portfolio securities the Fund may be deemed
to be an underwriter. (Subproposal G).
(6) Invest for the purpose of exercising control over management of any
company. (Subproposal N).
(7) Purchase real estate or interests therein other than securities secured
by real estate, participation therein or real estate investment trusts and
similar instruments. (Subproposal I).
(8) Purchase or sell commodities or commodities contracts except for hedging
purposes. (Subproposal I).
(9) Make any short sale of securities except in conformity with applicable
laws, rules and regulations and unless, giving effect to such sales, the value
of the Fund's total assets and the Fund's aggregate short sales of a
particular class of an issuer's securities do not exceed 25% of the then
outstanding securities of that class of the issuer's securities. (Subproposal
H).
(10) Purchase any security (other than U.S. obligations) such that (a) more
than 25% of the Fund's total assets would be invested in securities of a
single issuer or (b) as to 75% of the Fund's total assets (i) more than 5% of
the Fund's total assets would be invested in the securities of a single issuer
or (ii) the Fund would own more than 10% of the voting securities of a single
issuer. (Subproposal A).
SMITH BARNEY MONEY FUNDS, INC.:
(1) No Portfolio may borrow money except from banks for temporary purposes
in an amount up to 10% of the value of its total assets and may pledge its
D-1
<PAGE>
assets in an amount up to 10% of the value of its total assets only to secure
such borrowings. The Fund will borrow money only to accommodate requests for
the redemption of shares while effecting an orderly liquidation of portfolio
securities or to clear securities transactions and not for leveraging purposes.
Whenever borrowings exceed 5% of the value of a Portfolio's total assets, the
Portfolio will not make any additional investments. This restriction shall not
be deemed to prohibit the Government Portfolio from entering into reverse
repurchase agreements so long as not more than 33- 1/3% of the Portfolio's
total assets are subject to such agreements, nor will it be deemed to prohibit
the Fund from obtaining letters of credit solely for purposes of participating
in a captive insurance company sponsored by the Investment Company Institute to
provide fidelity and directors and officers liability insurance. (Subproposals
D, E).
(2) The Cash Portfolio and the Retirement Portfolio each may not with respect
to 75% of its assets invest more than 5% of its assets in the securities of any
one issuer, except securities issued or guaranteed as to principal and interest
by the U.S. Government, its agencies or instrumentalities or U.S. bank
obligations./1/ (Subproposal A).
(3) Neither the Cash Portfolio nor the Retirement Portfolio may invest less
than 25% of its assets in bank obligations (including both domestic and foreign
bank obligations) and each reserves freedom of action to concentrate in
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities.
(4) No Portfolio may sell securities short. (Subproposal H).
(5) No Portfolio may write or purchase put or call options. (Subproposal R).
(6) No Portfolio may purchase illiquid securities (such as repurchase
agreements with maturities in excess of seven days) or other securities that
are not readily marketable if more than 10% of the total assets of the
Portfolio would be invested in such securities. (Subproposal J).
(7) No Portfolio may purchase or sell real estate, real estate investment
trust securities, commodities, or oil and gas interests. (Subproposals I, O).
(8) No Portfolio may make loans to others (except through the purchase of
debt obligations referred to under "Investment Objectives and Policies" in the
Prospectus), except that the Fund may purchase and simultaneously resell for
later delivery, obligations issued or guaranteed as to principal and interest
by the U.S. Government or its agencies or instrumentalities; provided, however,
that the Fund will not enter into such a repurchase agreement on behalf of a
Portfolio if, as a result thereof, more than 10% of its total assets (taken at
current value) at that time would be subject to repurchase agreements maturing
in more than seven days. (Subproposal F).
(9) No Portfolio may invest in companies for the purpose of exercising
control. (Subproposal N).
- -----------
/1/ In compliance with Rule 2a-7 under the Act, the Cash Portfolio and
Retirement Portfolio each will not purchase any securities, other than
obligations of the U.S. Government or its agencies and instrumentalities, if,
immediately after such purchase, more than 5% of the value of the Portfolio's
total assets would be invested in securities of any one issuer. The Fund's
fundamental policy would give each such Portfolio the ability to invest, with
respect to 25% of the Portfolio's assets, more than 5% of its assets in any one
issuer only in the event that Rule 2a-7 is amended in the future.
D-2
<PAGE>
(10) No Portfolio may invest in securities of other investment companies,
except as they may be acquired as part of a merger, consolidation or
acquisition of assets. (Subproposal M).
Notwithstanding any of the foregoing investment restrictions, each of the
Cash Portfolio, the Government Portfolio, and the Retirement Portfolio may
invest up to 100% of its assets in U.S. Government obligations.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC. MAY NOT:
(1) Purchase the securities of any issuer (except states, territories and
possessions of the United States, the United States Government and its agencies
and instrumentalities or securities which are backed by the full faith and
credit of the United States) if as a result more than 5% of its total assets
would be invested in the securities of such issuer, except that up to 25% of
the Fund's total assets may be invested without regard to such limitation (as
used in this Prospectus, the entity that has the ultimate responsibility for
the payment of interest and principal on a security will be deemed to be its
issuer). (Subproposal A).
(2) Borrow money except for temporary or emergency purposes and not for
investment purposes, and then in an amount not exceeding 10% of the value of
its total assets at the time of borrowing and no investments will be made while
borrowings exceed 5% of total assets. (Subproposal D).
(3) Pledge, mortgage or hypothecate its assets except that, to secure
borrowings permitted by subparagraph (2) above, it may pledge assets having a
market value at the time of pledge not exceeding 10% of the value of its total
assets. (Subproposal E).
(4) Underwrite any issue of securities except in connection with the purchase
of securities for its portfolio of municipal obligations. (Subproposal G).
(5) Purchase or sell real estate but it may invest in municipal securities
secured by real estate or interests therein. (Subproposal I).
(6) Purchase or sell commodities or commodity contracts or oil, gas, or other
mineral exploration or development programs. (Subproposal O).
(7) Make loans, except by engaging in repurchase transactions.
(Subproposal F).
(8) Make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance of
transactions. (Subproposal H).
SMITH BARNEY MUNI FUNDS:
THE CALIFORNIA MONEY MARKET PORTFOLIO AND THE NEW YORK MONEY MARKET PORTFOLIO
EACH MAY NOT:
(1) Borrow money, except from banks for temporary purposes (such as
facilitating redemptions or for extraordinary or emergency purposes) in an
amount not to exceed 10% of the value of its total assets at the time the
borrowing is made (not including the amount borrowed) and no investments will
be made while borrowings exceed 5% of total assets. (Subproposal D).
(2) Mortgage or pledge any of its assets, except to secure borrowings
permitted under (1) above. (Subproposal E).
D-3
<PAGE>
(3) Invest more than 25% of total assets taken at market value in any one
industry; except that Municipal Obligations and securities of the U.S.
Government, its agencies and instrumentalities and Municipal Obligations of
California with respect to the California Money Market Portfolio and Municipal
Obligations of New York with respect to the New York Money Market Portfolio are
not considered an industry for purposes of this limitation. (Subproposal C).
(4) Purchase or hold any real estate, except that the Portfolio may invest in
securities secured by real estate or interests therein or issued by persons
(other than real estate investment trusts) which deal in real estate or
interests therein. (Subproposal I).
(5) Write or purchase put, call, straddle or spread options; purchase
securities on margin or sell "short". (Subproposals H, R).
(6) Underwrite the securities of other issuers. (Subproposal G).
(7) Purchase or sell commodities and commodity contracts. (Subproposal I).
(8) Make loans, except to the extent the purchase of bonds or other evidences
of indebtedness or the entry into repurchase agreements or deposits with banks,
including the Fund's Custodian, may be considered loans. (Subproposal F).
THE FLORIDA PORTFOLIO, THE GEORGIA PORTFOLIO, THE LIMITED TERM PORTFOLIO, AND
THE PENNSYLVANIA PORTFOLIO EACH MAY NOT:
(1) Borrow money, except from banks for temporary purposes (such as
facilitating redemptions or for extraordinary or emergency purposes) in an
amount not to exceed 10% of the value of its total assets at the time the
borrowing is made (not including the amount borrowed) and no investments will
be made while borrowings exceed 5% of total assets. (Subproposal D).
(2) Mortgage or pledge any of its assets, except to secure borrowings
permitted under (1) above. (Subproposal E).
(3) Invest more than 25% of total assets taken at market value in any one
industry, except that Municipal Obligations and securities of the U.S.
Government, its agencies and instrumentalities and Municipal Obligations of
Georgia with respect to the Georgia Portfolio, Municipal Obligations of
Pennsylvania with respect to the Pennsylvania Portfolio and Municipal
Obligations of Florida with respect to the Florida Portfolio are not considered
an industry for purposes of this limitation. (Subproposal C).
(4) Purchase or hold any real estate, except that the Portfolio may invest in
securities secured by real estate or interests therein or issued by persons
(other than real estate investment trusts) which deal in real estate or
interests therein. (Subproposal I).
(5) Write or purchase put, call, straddle or spread options; purchase
securities on margin or sell "short". (Subproposals H, R).
(6) Underwrite the securities of other issuers. (Subproposal G).
(7) Purchase or sell commodities and commodity contracts, except that the
Portfolio may invest in or sell municipal bond index futures contracts,
provided that immediately thereafter not more than 33- 1/3% of its net assets
would be hedged or the amount of margin deposits on the Portfolio's existing
futures contracts would not exceed 5% of the value of its total assets.
(Subproposal I).
D-4
<PAGE>
(8) Make loans, except to the extent the purchase of bonds or other evidences
of indebtedness or the entry into repurchase agreements or deposits with banks,
including the Funds' Custodian, may be considered loans. (Subproposal F).
THE NATIONAL PORTFOLIO AND THE NEW YORK PORTFOLIO EACH MAY NOT:
(1) Borrow money, except from banks for temporary purposes (such as
facilitating redemptions or for extraordinary or emergency purposes) in an
amount not to exceed 10% of the value of its total assets at the time the
borrowing is made (not including the amount borrowed) and no investment will be
made while borrowing exceeds 5% of total assets. (Subproposal D).
(2) Mortgage or pledge any of its assets, except to secure borrowings
permitted under (1) above. (Subproposal E).
(3) Invest more than 25% of total assets taken at market value in any one
industry, except that Municipal Obligations and securities of the U.S.
Government, its agencies and instrumentalities and Municipal Obligations of New
York State with respect to the New York Portfolio are not considered an
industry for purposes of this limitation. (Subproposal C).
(4) The National Portfolio may not with respect to 75% of the value of its
total assets, purchase securities of any issuer if immediately thereafter more
than 5% of total assets at market value would be invested in the securities of
any issuer (except that this limitation does not apply to obligations issued or
guaranteed as to principal and interest either by the U.S. Government or its
agencies or instrumentalities or by New York State or its political
subdivisions with respect to the New York Portfolio). (Subproposal A).
(5) Invest in securities issued by other investment companies, except as
permitted by Section 12(d)(1) of the Investment Company Act of 1940 or in
connection with a merger, consolidation, acquisition or reorganization.
(Subproposal M).
(6) Purchase or hold any real estate, except that a Portfolio may invest in
securities secured by real estate or interests therein or issued by persons
(other than real estate investment trusts) who deal in real estate or interests
therein. (Subproposal I).
(7) Purchase or hold the securities of any issuer, if to its knowledge,
Trustees or officers of the Fund individually owning beneficially more than .5%
of the securities of that issuer own in the aggregate more than 5% of such
securities. (Subproposal L).
(8) Write or purchase put, call, straddle or spread options; purchase
securities on margin or sell "short". (Subproposals H, R).
(9) Underwrite the securities of other issuers. (Subproposal G).
(10) Purchase or sell commodities and commodity contracts, except that each
Portfolio may invest in or sell municipal bond index future contracts; provided
that immediately thereafter not more than 33- 1/3% of its net assets would be
hedged or the amount of margin deposits on the Portfolio's existing futures
contracts would not exceed 5% of the value of its total assets. (Subproposal
I).
(11) Make loans, except to the extent the purchase of bonds or other
evidences of indebtedness or the entry into repurchase agreements or deposits
with banks, including the Fund's Custodian, may be considered loans (and the
Fund has no present intention of entering into repurchase agreements).
(Subproposal F).
D-5
<PAGE>
ANNEX I
5% BENEFICIAL OWNERS
<TABLE>
<CAPTION>
NAME AND AMOUNT OF
ADDRESS OF BENEFICIAL PERCENT
FUND BENEFICIAL OWNER OWNERSHIP OF FUND
---- ---------------- ---------- -------
<C> <S> <C> <C>
SMITH BARNEY Smith Barney 520,000.903 10.07%
DISCIPLINED SMALL International Inc.
CAP FUND, INC. Tokyo Branch
B-1 Acct- F. Reidenbach
Yebusi Garden Pl Tower
28FL
20-3, Ebisu 4-Chome
Shibuya-Ku
Tokyo 150, Japan
Charles Schwab & Co. Inc 501,076.598 9.70%
101 Montgomery Street
San Francisco, CA 94104
SMITH BARNEY MUNI
FUNDS
Pennsylvania Portfolio James J. Broussard 197,971.084 6.63%
530 Derwyn Road
Drexel Hill, PA 19026-
1203
</TABLE>
I-1
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED BELOW.
----- --------------------------------------------------
Please fold and detach card at perforation before mailing.
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
MEETING: MARCH 9, 1998 AT 11:30 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above hereby appoints
Heath B. McLendon, Christina T. Sydor and Robert A. Vegliante attorneys with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 388 Greenwich Street, New York, New York, at the
date and time indicated above and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated December 10, 1997 and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. A majority of the proxies present and acting
at the Special Meeting in person or by substitute (or, if only one shall be
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.
Date:_________________ 199__
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign the
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s) Title(s), if applicable
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE.
----- ----------------------------------------------------------------
Please fold and detach card at perforation before mailing.
1. To elect Directors/Trustees of the Fund.
Donald R. Foley; Paul Hardin; Heath B. McLendon; Roderick C. Rasmussen; Bruce
D. Sargent; John P. Toolan
(Bruce D. Sargent is nominated to the Board of Smith Barney Disciplined
Small Cap Fund only)
FOR ALL FOR ALL EXCEPT WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 1.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.
- ------------------------------------------------------------------------------
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
<TABLE>
<S> <C> <C>
(2A) Diversification (2I) Real Estate or Commodities (2O) Oil, Gas or Other Mineral
(2B) Senior Securities (2J) Restricted and Illiquid Exploration
(2C) Industry Concentration Securities (2P) Participation in Joint
(2D) Borrowing (2K) Unseasoned Issuers Trading Accounts
(2E) Pledging Assets (2L) Management's Ownership of (2Q) Certain Enumerated
(2F) Lending Portfolio Securities Instruments
(2G) Underwriting of Securities (2M) Securities of Other (2R) Puts and Calls
(2H) Margins and Short Sales Investment Companies (2S) Transactions with Affiliates
(2N) Exercising Control or
Management
</TABLE>
FOR ALL EXCEPT FOR ALL WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 2.
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
_______________________________________________________________________________
3. Not applicable to your Fund.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
[ ] [ ] [ ] 4.
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED BELOW.
----- --------------------------------------------------
Please fold and detach card at perforation before mailing.
SMITH BARNEY MONEY FUNDS, INC.
MEETING: MARCH 9, 1998 AT 10:45 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above hereby appoints
Heath B. McLendon, Christina T. Sydor and Robert A. Vegliante attorneys with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 388 Greenwich Street, New York, New York, at the
date and time indicated above and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated December 10, 1997 and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. A majority of the proxies present and acting
at the Special Meeting in person or by substitute (or, if only one shall be
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.
Date:_________________ 199__
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign the
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s) Title(s), if applicable
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE.
----- ----------------------------------------------------------------
Please fold and detach card at perforation before mailing.
1. To elect Directors/Trustees of the Fund.
Donald R. Foley; Paul Hardin; Heath B. McLendon; Roderick C. Rasmussen;
Bruce D. Sargent; John P. Toolan
(Bruce D. Sargent is nominated to the Board of Smith Barney Disciplined
Small Cap Fund only)
FOR ALL FOR ALL EXCEPT WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 1.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.
- -------------------------------------------------------------------------------
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
<TABLE>
<S> <C> <C>
(2A) Diversification (2I) Real Estate or Commodities (2O) Oil, Gas or Other Mineral
(2B) Senior Securities (2J) Restricted and Illiquid Exploration
(2C) Industry Concentration Securities (2P) Participation in Joint
(2D) Borrowing (2K) Unseasoned Issuers Trading Accounts
(2E) Pledging Assets (2L) Management's Ownership of (2Q) Certain Enumerated
(2F) Lending Portfolio Securities Instruments
(2G) Underwriting of Securities (2M) Securities of Other (2R) Puts and Calls
(2H) Margins and Short Sales Investment Companies (2S) Transactions with Affiliates
(2N) Exercising Control or
Management
</TABLE>
FOR ALL EXCEPT FOR ALL WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 2.
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
_______________________________________________________________________________
3. Not applicable to your Fund.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
[ ] [ ] [ ] 4.
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED BELOW.
----- --------------------------------------------------
Please fold and detach card at perforation before mailing.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
MEETING: MARCH 9, 1998 AT 11:15 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above hereby appoints
Heath B. McLendon, Christina T. Sydor and Robert A. Vegliante attorneys with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 388 Greenwich Street, New York, New York, at the
date and time indicated above and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated December 10, 1997 and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. A majority of the proxies present and acting
at the Special Meeting in person or by substitute (or, if only one shall be
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.
Date:_________________ 199__
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign the
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s) Title(s), if applicable
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE.
----- ----------------------------------------------------------------
Please fold and detach card at perforation before mailing.
1. To elect Directors/Trustees of the Fund.
Donald R. Foley; Paul Hardin; Heath B. McLendon; Roderick C.
Rasmussen;
Bruce D. Sargent; John P. Toolan
(Bruce D. Sargent is nominated to the Board of Smith Barney Disciplined
Small Cap Fund only)
FOR ALL FOR ALL EXCEPT WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 1.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.
- -------------------------------------------------------------------------------
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
<TABLE>
<S> <C> <C>
(2A) Diversification (2I) Real Estate or Commodities (2O) Oil, Gas or Other Mineral
(2B) Senior Securities (2J) Restricted and Illiquid Exploration
(2C) Industry Concentration Securities (2P) Participation in Joint
(2D) Borrowing (2K) Unseasoned Issuers Trading Accounts
(2E) Pledging Assets (2L) Management's Ownership of (2Q) Certain Enumerated
(2F) Lending Portfolio Securities Instruments
(2G) Underwriting of Securities (2M) Securities of Other (2R) Puts and Calls
(2H) Margins and Short Sales Investment Companies (2S) Transactions with Affiliates
(2N) Exercising Control or
Management
</TABLE>
FOR ALL EXCEPT FOR ALL WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 2.
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
_______________________________________________________________________________
3. Not applicable to your Fund.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
[ ] [ ] [ ] 4.
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED BELOW.
----- --------------------------------------------------
Please fold and detach card at perforation before mailing.
SMITH BARNEY MUNI FUNDS
MEETING: FEBRUARY 6, 1998 AT 11:00 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above hereby appoints
Heath B. McLendon, Christina T. Sydor and Robert A. Vegliante attorneys with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 388 Greenwich Street, New York, New York, at the
date and time indicated above and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated December 10, 1997 and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. A majority of the proxies present and acting
at the Special Meeting in person or by substitute (or, if only one shall be
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.
Date:_________________ 199__
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign the
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s) Title(s), if applicable
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE.
----- ----------------------------------------------------------------
Please fold and detach card at perforation before mailing.
1. To elect Directors/Trustees of the Fund.
Donald R. Foley; Paul Hardin; Heath B. McLendon; Roderick C.
Rasmussen;
Bruce D. Sargent; John P. Toolan
(Bruce D. Sargent is nominated to the Board of Smith Barney Disciplined
Small Cap Fund only)
FOR ALL FOR ALL EXCEPT WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 1.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.
- --------------------------------------------------------------------------------
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
<TABLE>
<S> <C> <C>
(2A) Diversification (2I) Real Estate or Commodities (2O) Oil, Gas or Other Mineral
(2B) Senior Securities (2J) Restricted and Illiquid Exploration
(2C) Industry Concentration Securities (2P) Participation in Joint
(2D) Borrowing (2K) Unseasoned Issuers Trading Accounts
(2E) Pledging Assets (2L) Management's Ownership of (2Q) Certain Enumerated
(2F) Lending Portfolio Securities Instruments
(2G) Underwriting of Securities (2M) Securities of Other (2R) Puts and Calls
(2H) Margins and Short Sales Investment Companies (2S) Transactions with Affiliates
(2N) Exercising Control or
Management
</TABLE>
FOR ALL EXCEPT FOR ALL WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 2.
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
_______________________________________________________________________________
3. Not applicable to your Fund.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
[ ] [ ] [ ] 4.
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED BELOW.
----- --------------------------------------------------
Please fold and detach card at perforation before mailing.
SMITH BARNEY MUNI FUNDS
MEETING: FEBRUARY 6, 1998 AT 11:00 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above hereby appoints
Heath B. McLendon, Christina T. Sydor and Robert A. Vegliante attorneys with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 388 Greenwich Street, New York, New York, at the
date and time indicated above and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated December 10, 1997 and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. A majority of the proxies present and acting
at the Special Meeting in person or by substitute (or, if only one shall be
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.
Date:_________________ 199__
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign the
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s) Title(s), if applicable
<PAGE>
PLEASE VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS.
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE.
----- ----------------------------------------------------------------
Please fold and detach card at perforation before mailing.
1. To elect Trustees of the Fund.
Donald R. Foley; Paul Hardin; Heath B. McLendon; Roderick C. Rasmussen;
John P. Toolan
FOR ALL FOR ALL EXCEPT WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 1.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.
- -------------------------------------------------------------------------------
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
<TABLE>
<S> <C> <C>
(2A) Diversification (2I) Real Estate or Commodities (2O) Oil, Gas or Other Mineral
(2B) Senior Securities (2J) Restricted and Illiquid Exploration
(2C) Industry Concentration Securities (2P) Participation in Joint
(2D) Borrowing (2K) Unseasoned Issuers Trading Accounts
(2E) Pledging Assets (2L) Management's Ownership of (2Q) Certain Enumerated
(2F) Lending Portfolio Securities Instruments
(2G) Underwriting of Securities (2M) Securities of Other (2R) Puts and Calls
(2H) Margins and Short Sales Investment Companies (2S) Transactions with Affiliates
(2N) Exercising Control or
Management
</TABLE>
FOR ALL EXCEPT FOR ALL WITHHOLD ALL
AS MARKED BELOW
[ ] [ ] [ ] 2.
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
_______________________________________________________________________________
3. (FOR THE CALIFORNIA MONEY MARKET, FLORIDA, GEORGIA AND PENNSYLVANIA
PORTFOLIOS OF THE SMITH BARNEY MUNI FUNDS ONLY) To approve retention of each
Fund's classification as a "non-diversified" investment company under the
1940 Act.
[ ] [ ] [ ] 3.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
[ ] [ ] [ ] 4.
