As filed with the Securities and Exchange Commission on March 1,
1999
Securities Act Registration No. 2-51301
Investment Company Act Registration No. 811-2490
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No.
[X] Post-Effective Amendment No. 51
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940,
Amendment No. 51
SMITH BARNEY MONEY FUNDS, INC.
(a Maryland Corporation)
(Exact name of Registrant as Specified in Charter)
388 Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)
(212) 816-6474
(Registrant's Telephone Number, including Area Code:)
Christina T. Sydor, Secretary
388 Greenwich Street
New York, New York 10013
(Name and Address of Agent For Service)
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to Rule 485(b)
[ ] On (date) pursuant to Rule 485(b)
[XXX] 60 days after filing pursuant to paragraph (a)(1) of Rule
485
[ ] On April 30, 1999 pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of
Rule 485
[ ] On (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new
effective date for a
previously filed post-effective amendment.
PART A: Prospectus
<PAGE>
--------------------------
[Logo]
Smith Barney Mutual Funds
Investing for your future.
Every day.
--------------------------
PROSPECTUS SMITH BARNEY
MUTUAL FUNDS
- --------------------------------------------------------------------------------
April 30, 1999 MONEY MARKET FUNDS
Retirement Portfolio
Class A Shares
Cash Portfolio
Government Portfolio
Class A, L and Y Shares
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
Fund goals and strategies......................................... 4
Risks, performance and expenses................................... 5
Management........................................................ 10
Choosing a class of shares to buy................................. 11
Comparing the funds' classes...................................... 12
Deferred sales charges............................................ 13
Buying shares..................................................... 14
Exchanging shares................................................. 15
Redeeming shares.................................................. 16
Other things to know about
share transactions............................................... 18
Smith Barney 401(k) and
ExecChoice(TM) programs.......................................... 20
Dividends, distributions and
taxes............................................................ 21
Share price....................................................... 22
Financial highlights.............................................. 22
</TABLE>
YOU SHOULD KNOW:
An investment in a fund is not a bank deposit and is not insured or guaranteed
by the FDIC or any other government agency. There is no assurance that each
fund will be able to maintain a stable net asset value of $1.00 per share.
Money Market Funds 1
<PAGE>
FUND GOALS AND STRATEGIES
INVESTMENT OBJECTIVES
Each fund seeks maximum current income and preservation of capital.
KEY INVESTMENTS
Government Portfolio. The fund invests exclusively in U.S. government
obligations, including mortgage-backed securities and related repurchase
agreements.
Cash Portfolio and Retirement Portfolio. Each fund invests in high quality,
U.S. dollar denominated short term debt securities. These may include
obligations issued by U.S. and foreign banks, the U.S. government, its agencies
or instrumentalities, U.S. states and municipalities and U.S. and foreign
corporate issuers. Each fund will invest at least 25% of its assets in
obligations of domestic and foreign banks. Either the principal amount of each
obligation must be fully insured by the FDIC or the issuing bank must have more
than $100 million of working capital or more than $1 billion of total assets.
Cash Portfolio and Retirement Portfolio may invest in all types of money market
securities including commercial paper, certificates of deposit, bankers'
acceptances, mortgage-backed and asset-backed securities, repurchase agreements
and other short term debt securities. The funds limit foreign investments to
issuers located in major industrialized countries.
Minimum credit quality. Cash Portfolio and Retirement Portfolio invest in
commercial paper and other short-term obligations rated by a nationally
recognized rating organization in the highest short term rating category, or if
unrated, of equivalent quality, and in other corporate obligations and
municipal obligations rated in the two highest rating categories, or if rated,
of equivalent quality. Government Portfolio invests exclusively in securities
rated in the highest short term rating category, or if unrated, of equivalent
quality.
Maximum maturity. Each fund invests exclusively in securities having remaining
maturities of 397 days or less. Each fund maintains a dollar-weighted average
portfolio maturity of 90 days or less.
2
<PAGE>
SELECTION PROCESS
In selecting investments for the funds, the manager looks for:
. The best relative values based on an analysis of yield, price, interest rate
sensitivity and credit quality
. Issuers offering minimal credit risk
. Maturities consistent with the manager's outlook for interest rates
RISKS, PERFORMANCE AND EXPENSES
All investments involve some degree of risk. However, each fund is a "money
market fund" and, as such, seeks income by investing in short-term debt
securities that meet strict standards established by the Board of Directors
based on special rules for money market funds adopted under federal law.
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Although the funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money by investing in the funds, or the funds
could underperform other short term debt instruments or money market funds if:
. Interest rates rise sharply.
. An issuer or guarantor of the funds' securities defaults, or has its credit
rating downgraded.
. The manager's judgment about the value or credit quality of a particular
security proves to be incorrect.
Cash Portfolio and Retirement Portfolio each invests at least 25% of its
assets in obligations of domestic and foreign banks and, as a result, is more
susceptible to events affecting the banking industry. The value of the funds'
foreign securities may go down because of unfavorable government actions or
political instability.
WHO MAY WANT TO INVEST
The funds may be an appropriate investment if you:
. Are seeking current income
. Are looking for an investment with lower risk than most other types of funds
. Are looking to allocate a portion of your assets to money market securities
Money Market Funds 3
<PAGE>
TOTAL RETURN
The bar charts indicate the risks of investing in the funds by showing changes
in the funds' performance from year to year. Past performance does not
necessarily indicate how a fund will perform in the future.
[CHART APPEARS HERE]
QUARTERLY RETURNS: Highest: xx% in ___ quarter 199X; Lowest: xx% in ___
quarter 199X
The bar chart shows the performance of the fund's Class A shares for each of the
past 10 calendar years. Class L and Y shares would have different performance
because of their different expenses.
[CHART APPEARS HERE]
QUARTERLY RETURNS: Highest: xx% in ___ quarter 199X; Lowest: xx% in ___
quarter 199X
The bar chart shows the performance of the fund's Class A shares for each of the
past 10 calendar years. Class L and Y shares would have different performance
because of their different expenses.
[CHART APPEARS HERE]
QUARTERLY RETURNS: Highest: xx% in ___ quarter 199X; Lowest: xx% in ___
quarter 199X
The bar chart shows the performance of the fund's Class A shares for each of the
past 10 calendar years.
4
<PAGE>
COMPARATIVE PERFORMANCE
The table indicates the risks of investing in the funds by comparing the average
annual total return of each class of the funds for the periods shown with that
of the 90 day Treasury bill. This table assumes redemption of shares at the end
of the period and reinvestment of distributions and dividends.
AVERAGE ANNUAL TOTAL RETURNS
Calendar Years Ended December 31, 1998
<TABLE>
<CAPTION>
Fund 1 year 5 years 10 years Since Inception
inception Date
<S> <C> <C> <C> <C> <C>
Cash Portfolio
Class A 5/28/74
Class L 11/10/94
Class Y 12/29/94
Government Portfolio
Class A 5/28/74
Class L/1/ 3/5/93
Class Y/2/ 10/28/93
Retirement Portfolio
Class A 5/28/74
90 day T-bill /3/ n/a
</TABLE>
/1/ Represents previously issued Class B shares which were renamed Class C
shares on November 7, 1994 and renamed Class L shares on June 12, 1998.
/2/ Represents previously issued Class C shares which were renamed Class Y
shares on November 7, 1994.
/3/ Index comparison begins on May 28, 1974.
7 DAY YIELD AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
CASH PORTFOLIO GOVERNMENT PORTFOLIO RETIREMENT
PORTFOLIO
-----------------------------------------------------------------------
Class A Class L Class Y Class A Class L Class Y Class A
<S> <C> <C> <C> <C> <C> <C> <C>
7 day yield
- ----------------------------------------------------------------------------------------------
</TABLE>
Call 1-877-795-2703 for the funds' current yield.
Money Market Funds 5
<PAGE>
FEES AND EXPENSES
This table sets forth the fees and expenses you will pay if you invest in the
funds' shares.
<TABLE>
<CAPTION>
ALL FUNDS CASH PORTFOLIO AND
GOVERNMENT PORTFOLIO ONLY
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER FEES
(paid directly from your investment) Class A Class L Class Y
Maximum sales charge on purchases None None None
Maximum deferred sales charge on None/1/ None None
redemptions
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CASH PORTFOLIO GOVERNMENT PORTFOLIO RETIREMENT
PORTFOLIO
Class A Class L Class Y Class A Class L Class Y Class A
<S> <C> <C> <C> <C> <C> <C> <C>
ANNUAL FUND
OPERATING EXPENSES
(paid by the fund as a
% of net assets)
- ------------------------------------------------------------------------------------------------------------
Management fee 0.38% 0.38% 0.38% 0.43% 0.43% 0.43% 0.44%
Distribution and 0.10% 0.10% N/A 0.10% 0.10% N/A 0.10%
service (12b-1) fee
Other expenses/3/ --- --- --- --- --- --- ---
Total annual fund === === === === === === ===
operating expenses/3/
- ------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Class A shares exchanged from another Smith Barney fund subject to a
deferred sales charge remain subject to the original fund's deferred sales
charge while held in the funds.
/2/ Because the manager has agreed to limit total annual fund operating
expenses to 0.70% of the fund's average daily net assets, actual expenses were:
<TABLE>
<CAPTION>
CASH PORTFOLIO GOVERNMENT PORTFOLIO RETIREMENT
PORTFOLIO
Class A Class L Class Y Class A Class L Class Y Class A
<S> <C> <C> <C> <C> <C> <C> <C>
Management fee --- --- --- --- --- --- ---
Total annual fund
operating expenses === === === === === === ===
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The manager may change or eliminate these expense limits at any time on
fourteen days prior notice to shareholder.
6
<PAGE>
EXAMPLE
This example helps you compare the costs of investing in the funds with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
. You invest $10,000 in the fund for the period shown
. Your investment has a 5% return each year
. You reinvest all distributions and dividends without a sales charge
. Redemption of your shares at the end of the period
<TABLE>
<CAPTION>
NUMBER OF YEARS YOU OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH PORTFOLIO
Class A $ $ $ $
Class L $ $ $ $
Class Y $ $ $ $
GOVERNMENT PORTFOLIO
Class A $ $ $ $
Class L $ $ $ $
Class Y $ $ $ $
RETIREMENT PORTFOLIO
Class A $ $ $ $
</TABLE>
Money Market Funds 7
<PAGE>
MANAGEMENT
MANAGER. The funds' investment manager is SSBC Fund Management Inc., an
affiliate of Salomon Smith Barney Inc. The manager's address is 388 Greenwich
Street, New York, New York 10013. The manager selects the funds' investments and
oversees their operations. The manager and Salomon Smith Barney are subsidiaries
of Citigroup Inc. Citigroup businesses produce a broad range of financial
services -- asset management, banking and consumer finance, credit and charge
cards, insurance, investments, investment banking and trading -- and use diverse
channels to make them available to consumer and corporate customers around the
world.
MANAGEMENT FEE. For its services, the manager received a fee during the fund's
last fiscal year equal to the amount shown below:
------------------------------------------------------------
Management fee as a percentage of
Fund the fund's average daily net assets
------------------------------------------------------------
Cash Portfolio 0.xx%
------------------------------------------------------------
Government Portfolio 0.xx%
------------------------------------------------------------
Retirement Portfolio 0.xx%
------------------------------------------------------------
DISTRIBUTOR. The fund has entered into an agreement with CFBDS, Inc. to
distribute the fund's shares. A selling group consisting of Salomon Smith Barney
and other broker-dealers sells fund shares to the public.
DISTRIBUTION PLANS. Each fund has adopted Rule 12b-1 distribution plans for its
Class A and, if applicable, Class L shares. Under each plan, the fund pays
service fees. These fees are an ongoing expense and, over time, may cost you
more than other types of sales charges.
YEAR 2000 ISSUE. Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the funds. The cost of addressing the Year 2000 issue, if
substantial, could adversely affect companies and governments that issue
securities held by the funds. The manager and Salomon Smith Barney are
addressing the Year 2000 issue for their systems. The funds have been informed
by other service providers that they are taking similar measures. Although the
funds do not expect the Year 2000 issue to adversely affect them, the funds
cannot guarantee the efforts of each fund (limited to requesting and receiving
reports from its service providers) or its service providers to correct the
problem will be successful.
8
<PAGE>
CHOOSING A CLASS OF SHARES TO BUY
Retirement Portfolio is available only through qualified retirement plans and
offers only Class A shares. For Cash Portfolio and Government Portfolio, you can
choose between two classes of shares: Classes A and Y. Class L shares are
available only to participating plans opened prior to June 21, 1996 (described
on [page 20]). Each class has different expenses, allowing you to choose the
class that best meets your needs.
You may buy shares from:
. A Salomon Smith Barney Financial Consultant
. An investment dealer in the selling group or a broker that clears through
Salomon Smith Barney -- a dealer representative
. Each fund, but only if you are investing through certain qualified plans or
certain dealer representatives
INVESTMENT MINIMUMS - CASH PORTFOLIO AND GOVERNMENT PORTFOLIO. Minimum initial
and additional investment amounts vary depending on the class of shares you buy
and the nature of your investment account.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
INITIAL ADDITIONAL
CLASS A CLASS Y ALL CLASSES
<S> <C> <C> <C>
General $1,000 $15 million $50
IRAs, Self Employed Retirement Plans, $ 250 $15 million $50
Uniform Gift to Minor Accounts
Qualified Retirement Plans* $ 25 $15 million $25
Salomon Smith Barney Sweep Features variable n/a variable
Simple IRAs $ 1 n/a $ 1
Monthly Systematic Investment Plans $ 25 n/a $25
Quarterly Systematic Investment Plans $ 50 n/a $50
- -------------------------------------------------------------------------------------------
</TABLE>
*Qualified Retirement Plans are retirement plans qualified under Section
403(b)(7) or Section 401(a) of the Internal Revenue Code, including 401(k) plans
INVESTMENT MINIMUMS - RETIREMENT PORTFOLIO. The minimum initial investment is
$200; each additional investment must be $1 or more.
Money Market Funds 9
<PAGE>
SALOMON SMITH BARNEY BROKERAGE ACCOUNTS
If you maintain certain types of securities brokerage accounts with Salomon
Smith Barney, you may request that your free credit balances (i.e., immediately
available funds) be invested automatically in Class A shares of a designated
money market fund either daily or weekly. A complete record of fund dividends,
purchases and redemptions will be included on your regular Salomon Smith Barney
brokerage statement. In addition to this sweep service, shareholders of Salomon
Smith Barney FMA PLUS(SM) accounts may also take advantage of: a free IRA, Free
dividend reinvestment, unlimited checking, 100 free ATM withdrawals each
year, gain/loss analysis and online computer access to account information.
Contact your Salomon Smith Barney Financial Consultant for more complete
information.
COMPARING THE FUNDS' CLASSES
Your Salomon Smith Barney Financial Consultant or dealer representative can help
you decide which class meets your goals. They may receive different compensation
depending upon which class you choose.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
CLASS A CLASS L CLASS Y
for the Cash Portfolio and Government Portfolio
only
<S> <C> <C> <C>
KEY FEATURES . Higher annual .Higher annual . Must invest at least
expenses than Class Y expenses than $15 million
Class Y . Lower annual expenses
than
either Class A or Class L
INITIAL SALES CHARGE/1/ None None None
DEFERRED SALES CHARGE/2/ None None None
ANNUAL SERVICE FEES 0.10% of average 0.10% of average None
daily daily net assets
net assets
EXCHANGEABLE INTO/3/ Class A shares of Class L shares of Class Y shares of most
most Smith Barney most Smith Barney Smith
funds funds Barney funds
- ---------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Initial sales charges may apply if you exchange shares of the funds for
shares of another Smith Barney fund.
/2/ Shares exchanged from another Smith Barney fund subject to a deferred sales
charge remain subject to the original fund's deferred sales charge while held in
the funds.
/3/ Ask your Salomon Smith Barney Financial Consultant or dealer representative
or visit the web site for the Smith Barney funds available for exchange.
10
<PAGE>
LETTER OF INTENT: CLASS Y SHARES
You may buy Class Y shares of Cash Portfolio or Government Portfolio at net
asset value with no initial sales charge. To purchase Class Y shares, you must
meet the $15,000,000 initial investment requirement. You can use a letter of
intent to meet this requirement by buying Class Y shares of a fund over a 13-
month period. To qualify, you must initially invest $5,000,000.
DEFERRED SALES CHARGES
If Class A shares of the Cash Portfolio or Government Portfolio are acquired by
exchange from another Smith Barney fund subject to a deferred sales charge the
original deferred sales charge will apply to these shares. If you redeem any of
these shares within 12 months of the date you purchased shares of the original
fund, the funds' shares may be subject to a deferred sales charge of 1.00%.
The deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.
You do not pay a deferred sales charge on:
. Shares exchanged for shares of another Smith Barney fund
. Shares that represent reinvested distributions and dividends
. Shares that are no longer subject to the deferred sales charge
If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your Salomon Smith Barney Financial Consultant or dealer representative.
Salomon Smith Barney receives deferred sales charges as partial compensation for
its expenses in selling shares, including the payment of compensation to your
Salomon Smith Barney Financial Consultant or dealer representative.
DEFERRED SALES CHARGE WAIVERS
The deferred sales charge for each share class will generally be waived:
. On certain distributions from a retirement plan
. For involuntary redemptions of small account balances
. For 12 months following the death or disability of a shareholder
If you want to learn more about additional waivers of deferred sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the Statement of Additional Information ("SAI").
Money Market Funds 11
<PAGE>
BUYING SHARES
THROUGH A You should contact your Salomon Smith Barney Financial Consultant
SALOMON or dealer representative to open a brokerage account and make
SMITH arrangements to buy shares.
BARNEY
FINANCIAL If you do not provide the following information, your order will
CONSULTANT be rejected
OR DEALER
REPRESEN- . Specific fund being bought
TATIVE . Class of shares being bought
. Dollar amount or number of shares to buy
You should pay for your shares through your brokerage account at
the time you place your order. Salomon Smith Barney or your
dealer representative may charge an annual account maintenance
fee.
- --------------------------------------------------------------------------------
THROUGH THE Qualified retirement plans and certain other investors who are
FUNDS clients of the selling group are eligible to buy shares directly
TRANSFER from the fund.
AGENT
. Write the transfer agent at the following address:
Smith Barney Money Funds
(Specify Portfolio and Class of Shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
. ENCLOSE A CHECK TO PAY FOR THE SHARES. FOR INITIAL PURCHASES,
COMPLETE AND SEND AN ACCOUNT APPLICATION.
. FOR MORE INFORMATION, CALL THE TRANSFER AGENT AT 1-800-451-
2010
- --------------------------------------------------------------------------------
THROUGH A You may authorize Salomon Smith Barney, your dealer
SYSTEMATIC representative or the transfer agent to transfer funds
INVESTMENT automatically from a regular bank account to buy shares on a
PLAN regular basis.
. Amounts transferred should be at least: $25 monthly or $50
quarterly
. If you do not have sufficient funds in your account on a
transfer date, Salomon Smith Barney, your dealer representative
or the transfer agent may charge you a fee
FOR MORE INFORMATION, CONTACT YOUR SALOMON SMITH BARNEY FINANCIAL
CONSULTANT, DEALER REPRESENTATIVE OR THE TRANSFER AGENT OR
CONSULT THE SAI.
12
<PAGE>
EXCHANGING SHARES
SMITH You should contact your Salomon Smith Barney Financial Consultant
BARNEY or dealer representative to exchange into other Smith Barney
OFFERS A funds. Be sure to read the prospectus of the Smith Barney fund
DISTINCTIVE you are exchanging into.
FAMILY OF
FUNDS . You may exchange shares only for shares of the same class of
TAILORED TO another Smith Barney Fund. Not all Smith Barney funds offer all
HELP MEET classes.
THE VARYING
NEEDS OF . Not all Smith Barney funds may be offered in your state of
BOTH LARGE residence. Contact your Salomon Smith Barney Financial
AND SMALL Consultant, dealer representative or the transfer agent.
INVESTORS
. You must meet the minimum investment amount for each fund
. You must meet the minimum investment amount for each fund
. If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with signed
stock powers (documents transferring ownership of certificates)
before the exchange is effective.
. The fund may suspend or terminate your exchange privilege if
you engage in an excessive pattern of exchanges.
- --------------------------------------------------------------------------------
SALES Your shares may be subject to an initial sales charge at the time
CHARGES of the exchange. for more information, contact your Salomon Smith
Barney Financial Consultant, dealer representative or the
transfer agent.
Your deferred sales charge (if any) will continue to be measured
from the date of your original purchase of another fund's shares
subject to a deferred sales charge.
- --------------------------------------------------------------------------------
BY If you do not have a brokerage account, you may be eligible to
TELEPHONE exchange shares through the transfer agent. You must complete an
authorization form to authorize telephone transfers. If eligible,
you may make telephone exchanges on any day the New York Stock
Exchange is open. Call the transfer agent at 1-800-451-2010
between 9:00 a.m. and 5:00 p.m. (Eastern time). Requests received
after the close of regular trading on the Exchange are priced at
the net asset value next determined.
You can make telephone exchanges only between accounts that have
identical registrations.
- --------------------------------------------------------------------------------
BY MAIL If you do not have a Salomon Smith Barney brokerage account,
contact your dealer representative or write to the transfer agent
at the address on the opposite page.
Money Market Funds 13
<PAGE>
REDEEMING SHARES
GENERALLY Contact your Salomon Smith Barney Financial Consultant or dealer
representative to redeem shares of the funds.
If you hold share certificates, the transfer agent must receive
the certificates endorsed for transfer or with signed stock
powers before the redemption is effective.
If the shares are held by a fiduciary or corporation, other
documents may be required.
Your redemption proceeds generally will be sent on the next
business day after your request is received in good order.
However, if you recently purchased your shares by check, your
redemption proceeds will not be sent to you until your original
check clears, which may take up to 15 days.
If you have a Salomon Smith Barney brokerage account, your
redemption proceeds will be placed in your account and not
reinvested without your specific instruction. In other cases,
unless you direct otherwise, your redemption proceeds will be
paid by check mailed to your address of record.
- --------------------------------------------------------------------------------
BY MAIL For accounts held directly at the funds, send written requests to
the transfer agent at the following address:
Smith Barney Money Funds
(Specify Portfolio and Class of Shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
Your written request must provide the following:
. Your account number
. The class of shares and the dollar amount or number of shares
to be redeemed
. Signatures of each owner exactly as the account is registered
14
<PAGE>
BY If you do not have a brokerage account, you may be eligible to
TELEPHONE redeem shares (except those held in retirement plans) in amounts
up to $10,000 per day through the transfer agent. You must
complete an authorization form to authorize telephone
redemptions. If eligible, you may request redemptions by
telephone on any day the New York Stock Exchange is open. Call
the transfer agent at 1-800-451-2010 between 9:00 a.m. and 5:00
p.m. (Eastern time). Requests received after the close of regular
trading on the Exchange are priced at the net asset value next
determined.
Your redemption proceeds can be sent by check to your address of
record or by wire transfer to a bank account designated on your
authorization form. You may be charged a fee for wire transfers.
You must submit a new authorization form to change the bank
account designated to receive wire transfers and you may be asked
to provide certain other documents.
Money Market Funds 15
<PAGE>
OTHER THINGS TO KNOW ABOUT SHARE TRANSACTIONS
When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed.
. Name of the fund
. Account number
. Class of shares being bought, exchanged or redeemed
. Dollar amount or number of shares being bought, exchanged or
redeemed
. Signature of each owner exactly as the account is registered
A request to purchase shares becomes effective only when Salomon Smith Barney, a
selling group member or the transfer agent receives, or converts the purchase
amount into, federal funds.
The transfer agent will try to confirm that any telephone exchange or redemption
request is genuine by recording calls, asking the caller to provide a personal
identification number for the account, sending you a written confirmation or
requiring other confirmation procedures from time to time.
SIGNATURE GUARANTEES. To be in good order, your redemption request must include
a signature guarantee if you:
. Are redeeming (together with other requests submitted in the previous 10
days) over $10,000 of shares
. Are sending signed share certificates or stock powers to the transfer agent
. Instruct the transfer agent to mail the check to an address different from
the one on your account
. Changed your account registration
. Want the check paid to someone other than the account owner(s)
. Are transferring the redemption proceeds to an account with a different
registration
You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.
16
<PAGE>
Each fund has the right to:
. Suspend the offering of shares
. Waive or change minimum and additional investment amounts
. Reject any purchase or exchange order
. Change, revoke or suspend the exchange privilege
. Suspend telephone transactions
. Suspend or postpone redemptions of shares on any day when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the Securities
and Exchange Commission
. Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities
SMALL ACCOUNT BALANCES. If your account falls below $500 ($100 for Retirement
Portfolio) because of a redemption of fund shares, a fund may ask you to bring
your account up to $500 ($100 for Retirement Portfolio). If your account is
still below $500 ($100 for Retirement Portfolio) after 60 days, the fund may
close your account and send you the redemption proceeds.
EXCESSIVE EXCHANGE TRANSACTIONS. The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other
shareholders. If so, the funds may limit additional purchases and/or exchanges
by the shareholder.
SHARE CERTIFICATES. The funds do not issue share certificates unless a written
request is made to the transfer agent. If you hold share certificates, it will
take longer to exchange or redeem shares.
Money Market Funds 17
<PAGE>
SMITH BARNEY 401(K) AND EXECCHOICE(TM) PROGRAMS
You may be eligible to participate in the Smith Barney 401(k) program or the
Smith Barney ExecChoice(TM) program. The funds offer Class A and Class L shares
to participating plans as investment alternatives under the programs. You can
meet minimum investment and exchange amounts by combining the plan's investments
in any of the Smith Barney funds.
There are no sales charges when you buy or sell shares and the class of shares
you may purchase depends on the amount of your initial investment. Once a class
of shares is chosen, all additional purchases must be of the same class.
. Class A shares may be purchased by plans investing at least $1 million.
. On purchases of less than $1 million, Class L shares will be issued. Class L
shares are eligible for conversion to Class A shares not later than 8 years
after the plan joined the program. They are eligible for conversion sooner in
the following circumstances:
If the account was opened on or after June 21, 1996 and a total of $1
million is invested in Smith Barney Funds Class L shares (other than shares
of money market funds), all Class L shares are eligible for exchange after
the plan is in the program 5 years.
If the account was opened before June 21, 1996 and a total of $500,000 is
invested in Smith Barney Funds Class L and Class O shares (other than
shares of money market funds) on December 31 in any year, all such shares
are eligible for exchange on or about March 31 of the following year.
For more information, call your Salomon Smith Barney Financial Consultant or the
transfer agent, or consult the SAI.
18
<PAGE>
DISTRIBUTIONS, DIVIDENDS AND TAXES
DIVIDENDS. Each fund declares a dividend of substantially all of its net
investment income on each day the New York Stock Exchange is open. Income
dividends are paid monthly. Each fund generally makes capital gain
distributions, if any, once a year, typically in December. Each fund may pay
additional distributions and dividends at other times if necessary for the fund
to avoid a federal tax. Each fund expects distributions to be primarily from
income. Dividends and capital gain distributions are reinvested in additional
fund shares of the same class you hold. Alternatively, you can instruct your
Salomon Smith Barney Financial Consultant, dealer representative or the transfer
agent to have your distributions and/or dividends paid in cash. You can change
your choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.
TAXES. In general, receiving distributions (whether in cash or additional
shares) is a taxable event. However, distributions from Retirement Portfolio
are not taxable to the qualified retirement plans that hold its shares.
- --------------------------------------------------------------------------------
TRANSACTION FEDERAL TAX STATUS
Redemption or exchange of shares Usually no gain or loss; loss may
result to extent of any deferred sales
charge
Long-term capital gain distributions Long-term capital gain
Short-term capital gain distributions Ordinary income
Dividends Ordinary income
- --------------------------------------------------------------------------------
Each fund anticipates that it will normally not earn or distribute any long-term
capital gains.
After the end of each year, the fund will provide you with information about the
distributions and dividends you received during the previous year. If you do
not provide the fund with your correct taxpayer identification number and any
required certifications, you may be subject to back-up withholding of 31% of
your distributions and dividends. Because each shareholder's circumstances are
different and special tax rules may apply, you should consult your tax adviser
about your investment in the funds.
Money Market Funds 19
<PAGE>
SHARE PRICE
You may buy, exchange or redeem shares at their net asset value, plus any
applicable deferred sales charge, next determined after receipt of your request
in good order. Each fund's net asset value is the value of its assets minus its
liabilities. Net asset value is calculated separately for each class of shares.
Each fund calculates its net asset value at noon, Eastern time, every day the
New York Stock Exchange is open. The Exchange is closed on certain holidays
listed in the SAI.
Each fund uses the amortized cost method to value its portfolio securities.
Using this method, a fund constantly amortizes over the remaining life of a
security the difference between the principal amount due at maturity and the
cost of the security to the fund.
<TABLE>
<CAPTION>
FORM OF PURCHASE PAYMENT PURCHASE IS EFFECTIVE AND DIVIDENDS BEGIN
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
. Payment in federal funds If received At noon, On that day
. Having a sufficient cash before noon, Eastern time, on
balance in your account Eastern time: that day
with Salomon Smith Barney
or a selling group member If received after At noon the On the next
noon: next day business
day after
effectiveness
- ------------------------------------------------------------------------------------------------
. Other forms of payment,
with conversion into, or
advance of, federal funds
by Salomon Smith Barney On the next
or a selling group member At noon on the next business day business day after
. Other forms of payment effectiveness
received by the transfer
agent
- ------------------------------------------------------------------------------------------------
</TABLE>
Salomon Smith Barney or members of the selling group must promptly transmit all
orders to buy, exchange or redeem shares to the fund's agent.
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the
performance of each fund's classes for the past 5 years. Certain information
reflects financial results for a single share. Total return represents the rate
that a shareholder would have earned (or lost) on a fund share assuming
reinvestment of all dividends and distributions. The information in the
following tables was audited by KPMG LLP, independent accountants, whose report,
along with the funds' financial statements, are included in the annual report
(available upon request).
20
<PAGE>
CASH PORTFOLIO
FOR A CLASS A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.37 0.54 0.50 0.50
- -----------------------------------------------------------------------------------
Total income (loss) from operations 0.37 0.54 0.50 0.50
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.37) (0.54) (0.50) (0.50)
Total distributions (0.37) (0.54) (0.50) (0.50)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------
TOTAL RETURN 3.73% 5.53% 4.98% 5.12%
- -----------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $17,590 $22,969 $27,434 $30,827
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------------
Expenses 0.64% 0.62% 0.62% 0.64%
Net investment income (loss) 4.10 5.39 4.87 5.01
- -----------------------------------------------------------------------------------
</TABLE>
Money Market Funds 21
<PAGE>
CASH PORTFOLIO
FOR A CLASS L SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05 0.01
- -----------------------------------------------------------------------------------------
Total income (loss) from operations 0.05 0.05 0.05 0.01
- -----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.01)
- -----------------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.01)
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------
Total return 5.17% 4.98% 5.53% (0.01)%(3)
- -----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $2,016 $ 2 $ 2 $ 1
- -----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.59% 0.62% 0.62% 0.62%(3)
Net investment income (loss) 5.05 4.87 5.39 4.77 (3)
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts calculated using the monthly average shares method.
(2) Inception date November 10, 1994.
(3) Annualized.
(4) Not annualized.
22
<PAGE>
CASH PORTFOLIO
FOR A CLASS Y SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05 0.00
- ------------------------------------------------------------------------------------------
Total income (loss) from operations 0.05 0.05 0.05 0.0
- ------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.01)
- ------------------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.00)
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------
Total return 5.32% 5.09% 5.50% (0.00)%(3)
- ------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $63,985 $ 52 $ 30 $ 0.5
- ------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.43% 0.52% 0.51% 0.53%(2)
Net investment income (loss) 5.22 4.97 5.29 5.23 (2)
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date December 29, 1994.
(2) Annualized.
(3) Not annualized.
Money Market Funds 23
<PAGE>
GOVERNMENT PORTFOLIO
FOR A CLASS A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.49 0.48 0.53 0.36
- -----------------------------------------------------------------------------------
Total income (loss) from operations 0.49 0.48 0.53 0.36
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
- -----------------------------------------------------------------------------------
Net investment income (0.49) (0.48) (0.53) (0.36)
- -----------------------------------------------------------------------------------
Total distributions (0.49) (0.48) (0.53) (0.36)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------
Total return 5.04% 4.89% 5.45% 3.63%
- -----------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $4,572 $4,353 $4,038 $3,695
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.61% 0.61% 0.60% 0.61%
Net investment income (loss) 4.92 4.78 5.31 4.03
- -----------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
GOVERNMENT PORTFOLIO
FOR A CLASS L SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05 0.04
- --------------------------------------------------------------------------------------
Total income (loss) from operations 0.05 0.05 0.05 0.04
- --------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.04)
- --------------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.04)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------
Total return 5.04% 4.89% 5.46% (3.63)%
- --------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $ 502 $ 1 $ 2 $ 4
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.61% 0.61% 0.60% 0.61%
Net investment income (loss) 4.90 4.78 5.36 4.77
- --------------------------------------------------------------------------------------
</TABLE>
(1) Represents previously issued Class B shares which were renamed Class C
shares on November 7, 1994.
Money Market Funds 25
<PAGE>
GOVERNMENT PORTFOLIO
FOR A CLASS Y SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05 0.04
- --------------------------------------------------------------------------------------
Total income (loss) from operations 0.05 0.05 0.05 0.04
- --------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.04)
- --------------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.04)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------
Total return 5.14% 4.99% 5.55% 3.65%
- --------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $7,430 $ 52 $ 5 $ 1
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.51% 0.51% 0.50% 0.60%
Net investment income (loss) 4.98 4.88 5.51 3.58
- --------------------------------------------------------------------------------------
</TABLE>
(1) Represents previously issued Class C shares, which were renamed Class Y
shares on November 7, 1994.
26
<PAGE>
RETIREMENT PORTFOLIO
FOR A CLASS A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
DECEMBER 31:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05 0.04
- ----------------------------------------------------------------------------------
Total income (loss) from operations 0.05 0.05 0.05 0.04
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.04)
- ----------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.04)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------
Total return 5.03% 4.86% 5.42% 3.67%
- ----------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000,000)'S $1,367 $1,355 $ 1,280 $1,061
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.71% 0.71% 0.72% 0.70%
Net investment income (loss) 4.92 4.75 5.28 3.57
- ----------------------------------------------------------------------------------
</TABLE>
Money Market Funds 27
<PAGE>
SALOMON SMITH BARNEY(SM)
A MEMBER OF CITIGROUP [SYMBOL]
MONEY MARKET FUNDS
SHAREHOLDER REPORTS. Annual and semiannual reports to shareholders provide
additional information about the funds' investments. These reports discuss the
market conditions and investment strategies that affected the funds'
performance.
The funds send only one report to a household if more than one account has the
same address. Contact your Salomon Smith Barney Financial Consultant, dealer
representative or the transfer agent if you do not want this policy to apply to
you.
STATEMENT OF ADDITIONAL INFORMATION. The statement of additional information
provides more detailed information about the funds and is incorporated by
reference into (is legally part of) this prospectus.
You can make inquiries about the funds or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Salomon
Smith Barney Financial Consultant or dealer representative, by calling the funds
at 1-800-451-2010, or by writing to the funds at Smith Barney Mutual Funds, 388
Greenwich Street, MF2, New York, New York 10013.
VISIT OUR WEB SITE. Our web site is located at www.smithbarney.com
You can also review the funds' shareholder reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can get copies of these materials for a
fee by writing to the Public Reference Section of the Commission, Washington,
D.C. 20549-6009. Information about the public reference room may be obtained by
calling 1-800-SEC-0330. You can get the same information free from the
Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the funds that is not in this prospectus, you
should not rely upon that information. Neither the funds nor the distributor is
offering to sell shares of the funds to any person to whom the funds may not
lawfully sell their shares.
(SM)Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
(Investment Company Act file no. 811-02490)
<PAGE>
-------------------------
[Logo]
Smith Barney Mutual
Funds
Investing for your
future.
Every day.
-------------------------
PROSPECTUS SMITH BARNEY
MUTUAL FUNDS
________________________________________________________________________
April 30, 1999 MONEY MARKET FUNDS
Cash Portfolio
Government Portfolio
Class Z Shares
The Securities and Exchange Commission has not approved or disapproved
these securities or determined whether this prospectus is accurate or
complete. Any statement to the contrary is a crime.
<PAGE>
The Class Z shares described in this prospectus are offered exclusively for
sale to tax-exempt employee benefit and retirement plans of
Salomon Smith Barney Inc. and any of its affiliates.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
Fund goals and strategies.................................................. 4
Risks, performance and expenses............................................ 5
MANAGEMENT................................................................. 8
Buying, selling and redeeming Class Z shares............................... 9
Share price................................................................ 10
Dividends, distributions and taxes......................................... 11
Financial highlights....................................................... 12
</TABLE>
YOU SHOULD KNOW:
An investment in a fund is not a bank deposit and is not insured or guaranteed
by the FDIC or any other government agency. There is no assurance that each
fund will be able to maintain a stable net asset value of $1.00 per share.
Money Market Funds -- Class Z Shares 1
<PAGE>
FUND GOALS AND STRATEGIES
INVESTMENT OBJECTIVES
Each fund seeks maximum current income and preservation of capital.
KEY INVESTMENTS
Government Portfolio. The fund invests exclusively in U.S. government
obligations, including mortgage-backed securities and related repurchase
agreements.
Cash Portfolio. The fund invests in high quality, U.S. dollar denominated short
term debt securities. These may include obligations issued by U.S. and foreign
banks, the U.S. government, its agencies or instrumentalities, U.S. states and
municipalities and U.S. and foreign corporate issuers. The fund will invest at
least 25% of its assets in obligations of domestic and foreign banks. Either
the principal amount of each obligation must be fully insured by the FDIC or the
issuing bank must have more than $100 million of working capital or more than $1
billion of total assets.
Cash Portfolio may invest in all types of money market securities including
commercial paper, certificates of deposit, bankers' acceptances, mortgage-backed
and asset-backed securities, repurchase agreements and other short term debt
securities. The funds limit foreign investments to issuers located in major
industrialized countries.
Minimum credit quality. Cash Portfolio invests in commercial paper and other
short-term obligations rated by a nationally recognized rating organization in
the highest short term rating category, or if unrated, of equivalent quality,
and in other corporate obligations and municipal obligations rated in the two
highest rating categories, or if rated, of equivalent quality. Government
Portfolio invests exclusively in securities rated in the highest short term
rating category, or if unrated, of equivalent quality.
Maximum maturity. Each fund invests exclusively in securities having remaining
maturities of 397 days or less. Each fund maintains a dollar-weighted average
portfolio maturity of 90 days or less.
2
<PAGE>
SELECTION PROCESS
In selecting investments for the funds, the manager looks for:
. The best relative values based on an analysis of yield, price, interest rate
sensitivity and credit quality
. Issuers offering minimal credit risk
. Maturities consistent with the manager's outlook for interest rates
RISKS, PERFORMANCE AND EXPENSES
All investments involve some degree of risk. However, each fund is a "money
market fund" and, as such, seeks income by investing in short-term debt
securities that meet strict standards established by the Board of Directors
based on special rules for money market funds adopted under federal law.
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Although the funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money by investing in the funds, or the funds
could underperform other short term debt instruments or money market funds if:
. Interest rates rise sharply.
. An issuer or guarantor of the funds' securities defaults, or has its credit
rating downgraded.
. The manager's judgment about the value or credit quality of a particular
security proves to be incorrect.
Cash Portfolio invests at least 25% of its assets in obligations of domestic and
foreign banks and, as a result, is more susceptible to events affecting the
banking industry. The value of the funds' foreign securities may go down
because of unfavorable government actions or political instability.
WHO MAY WANT TO INVEST
The funds may be an appropriate investment if you:
. Are seeking current income
. Are looking for an investment with lower risk than most other types of funds
. Are looking to allocate a portion of your assets to money market securities
Money Market Funds -- Class Z Shares 3
<PAGE>
TOTAL RETURN
The bar charts indicate the risks of investing in the funds by showing changes
in the funds' performance from year to year. Past performance does not
necessarily indicate how a fund will perform in the future.
[GRAPH APPEARS HERE]
Quarterly returns: Highest: xx% in ___ quarter 199X; Lowest: xx% in ___
quarter 199X
The bar chart shows the performance of the fund's Class Z shares for the last
four full calendar years since inception on November 15, 1994.
[GRAPH APPEARS HERE]
Quarterly returns: Highest: xx% in ___ quarter 199X; Lowest: xx% in ___
quarter 199X
The bar chart shows the performance of the fund's Class Z shares for the last
four full calendar years since inception
on November 9, 1994.
COMPARATIVE PERFORMANCE
The table indicates the risks of investing in the funds by comparing the average
annual total return of Class Z of the funds for the periods shown with that of
the 90 day Treasury bill. This table assumes redemption of shares at the end of
the period and reinvestment of distributions and dividends.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CALENDAR YEARS ENDED DECEMBER 31, 1998
Fund 1 year 5 years Since inception Inception Date
<S> <C> <C> <C> <C>
Cash Portfolio 11/15/94
Government Portfolio 11/9/94
90 day Treasury bill * n/a
</TABLE>
* Index comparison begins on November 9, 1994.
As of December 31, 1998, the 7-day yield for Cash Portfolio and Government
Portfolio was ______ and ______, respectively. Call 1-877-795-2703 for each
funds' current yield.
4
<PAGE>
FEES AND EXPENSES
The table sets forth the fees and expenses you will pay if you invest in the
funds' shares.
<TABLE>
<CAPTION>
CASH PORTFOLIO GOVERNMENT PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER FEES
(PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum sales charge on purchases None None
Maximum deferred sales charge on redemptions None None
- ---------------------------------------------------------------------------------------------------------------
CASH PORTFOLIO GOVERNMENT PORTFOLIO
ANNUAL FUND OPERATING EXPENSES (paid
by the fund as a % of net assets)
- ---------------------------------------------------------------------------------------------------------------
Management fee
Distribution and service (12b-1) fee
Other expenses
Total annual fund operating expenses/1/
- ---------------------------------------------------------------------------------------------------------------
/1/ Because the manager has agreed to limit annual fund operating expenses to
.70%, actual expenses were:
CASH PORTFOLIO GOVERNMENT PORTFOLIO
Management fee ____ ____
Total annual fund operating expenses ---- ____
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
EXAMPLE
This example helps you compare the costs of investing in the funds with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
. You invest $10,000 in the fund for the period shown
. Your investment has a 5% return each year
. You reinvest all distributions and dividends without a sales charge
. Redemption of your shares at the end of the period
<TABLE>
<CAPTION>
NUMBER OF YEARS YOU OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Portfolio $ $ $ $
Government Portfolio
</TABLE>
Money Market Funds -- Class Z Shares 5
<PAGE>
MANAGEMENT
MANAGER. The fund's investment manager is SSBC Fund Management Inc., an
affiliate of Salomon Smith Barney Inc. The manager's address is 388 Greenwich
Street, New York, New York 10013. The manager selects each fund's investments
and oversees its operations. The manager and Salomon Smith Barney are
subsidiaries of Citigroup Inc. Citigroup businesses produce a broad range of
financial services -- asset management, banking and consumer finance, credit and
charge cards, insurance, investments, investment banking and trading -- and use
diverse channels to make them available to consumer and corporate customers
around the world.
Management fee. For its services, the manager received a fee during each fund's
last fiscal year equal to the amount shown below.
FUND MANAGEMENT FEE AS A PERCENTAGE OF
the fund's average daily net assets
Cash Portfolio 0.xx%
Government Portfolio 0.xx%
DISTRIBUTOR. Each fund has entered into an agreement with CFBDS, Inc. to
distribute the fund's shares. [A selling group consisting of Salomon Smith
Barney and other broker-dealers sells fund shares to the public].
YEAR 2000 ISSUE. Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the funds. The manager and Salomon Smith Barney are
addressing the Year 2000 issue for their systems. The cost of addressing the
Year 2000 issue, if substantial, could adversely affect companies and
governments that issue securities held by the funds. Each fund has been
informed by its other service providers that they are taking similar measures.
Although the funds do not expect the Year 2000 issue to adversely affect them,
the funds cannot guarantee that their efforts (limited to requesting and
receiving reports from their service providers) or their service providers to
correct the problem will be successful.
6
<PAGE>
BUYING, SELLING AND EXCHANGING CLASS Z SHARES
Through a You may buy, sell or exchange Class Z shares only through
qualified a "qualified plan." A qualified plan is a tax-exempt
plan employee benefit or retirement plan of Salomon Smith
Barney, Inc. or one of its affiliates.
There are no minimum investment requirements for Class Z
shares. However, each fund reserves the right to change
this policy at any time.
Buying Orders to buy Class Z shares must be made in accordance
with the terms of a qualified plan. If you are a
participant in a qualified plan, you may place an order
with your plan to buy Class Z shares at net asset value,
without any sales charge. Payment is due to Salomon Smith
Barney on settlement date, which is the third business day
after your order is accepted. [If you make payment prior
to this date, you may designate a temporary investment
(such as a money market fund of the Smith Barney Mutual
Funds) for payment until settlement date.] Each fund
reserves the right to reject any order to buy shares and
to suspend the offering of shares for a period of time.
Selling Qualified plans may redeem their shares on any day on
which the fund calculates its net asset value. You should
consult the terms of your qualified plan for special
redemption provisions.
Exchanging You should consult your qualified plan for information
about available exchange options.
Money Market Funds -- Class Z Shares 7
<PAGE>
SHARE PRICE
Qualified plans may buy, exchange or redeem Class Z shares of each fund at the
net asset value next determined after receipt of your request in good order.
Each fund's net asset value is the value of its assets minus its liabilities.
Net asset value is calculated separately for each class of shares. Each fund
calculates net asset value at noon, Eastern time, every day the New York Stock
Exchange is open. The Exchange is closed on certain holidays listed in the SAI.
Each fund uses the amortized cost method to value its portfolio securities.
Using this method, a fund constantly amortizes over the remaining life of a
security the difference between the principal amount due at maturity and the
cost of the security to the fund.
<TABLE>
<CAPTION>
FORM OF PURCHASE PAYMENT PURCHASE IS EFFECTIVE AND DIVIDENDS BEGIN
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
. Payment in federal funds If received before At noon, Eastern
. Having a sufficient cash noon, Eastern time: time, on that day
balance in your account with
Salomon Smith Barney or a If received after At noon, the next
selling group member noon: business day
- -----------------------------------------------------------------------------------------------------------------------
. Other forms of payment, with
conversion into, or advance of,
federal funds by Salomon Smith At noon on the next business day
Barney or a selling group member
. Other forms of payment received
by the transfer agent
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
In order to buy, redeem or exchange shares at that day's price, you must place
your order with your qualified plan before the New York Stock Exchange closes.
If the New York Stock Exchange closes early, you must place your order with your
qualified plan prior to the actual closing time. Otherwise, you will receive
the next business day's price.
Your qualified plan must transmit all orders to buy, exchange or redeem shares
to the funds' agent before the agent's close of business.
8
<PAGE>
DISTRIBUTIONS, DIVIDENDS AND TAXES
An investment in the fund will have the following consequences for a qualified
plan as the owner of shares in the fund. Qualified plan participants should
consult their plan document or tax advisors about the tax consequences of
participating in a qualified plan
Dividends. The fund generally makes capital gain distributions and pays
dividends, if any, once a year, typically in December. The fund may pay
additional distributions and dividends at other times if necessary for the fund
to avoid a federal tax. Capital gain distributions and dividends are reinvested
in addition Class Z shares. The fund expects distributions to be primarily from
capital gains. No sales charge is imposed on reinvested distributions to be
primarily from capital gains. No sales charge is imposed on reinvested
distributions or dividends. Alternatively, a qualified plan can instruct its
Salomon Smith Barney Financial Consultant, dealer representative or the transfer
agent to have distributions and/or dividends paid in cash. It can change that
choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.
Taxes. Provided that qualified plan has not borrowed to finance its investment
in the fund, it will not be taxable on the receipt of dividends and
distributions from the fund.
Because each shareholder's circumstances are different and special tax rules may
apply, you should consult with your tax adviser about your investment in the
funds.
Money Market Funds -- Class Z Shares 9
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the
performance of each fund's Class Z shares for the past 5 years. Certain
information reflects financial results for a single share. Total return
represents the rate that a shareholder would have earned (or lost) on a fund
share assuming reinvestment of all dividends and distributions. The information
in the following tables was audited by KPMG LLP, independent accountants, whose
report, along with the funds' financial statements, are included in the annual
report (available upon request).
Cash Portfolio
For a Class Z share of capital stock outstanding throughout each year ended
December 31:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.052 0.051 0.055 0.006
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations 0.052 0.051 0.055 0.006
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.052) (0.051) (0.055) (0.006)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.052) (0.051) (0.055) (0.006)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total return 5.33% 5.06% 5.63% .60%(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000)'s 6 6 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 0.44% 0.53% 0.52% 0.47%(2)
Net investment income (loss) 5.21 4.96 5.49 5.12 (2)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from November 15, 1994 (inception date) to December 31,
1994.
(2) Not annualized.
(3) Annualized.
10
<PAGE>
Money Market Funds -- Class Z Shares --
Government Portfolio
For a Class Z share of capital stock outstanding throughout each year ended
DEcember 31:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.050 0.049 0.054 0.007
- ---------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations 0.050 0.049 0.054 0.007
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.050) (0.049) (0.054) (0.007)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.050) (0.049) (0.054) (0.007)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Total return 5.14% 4.99% 5.56% 0.70%(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000)'s 51,210 36,840 31,113 29,669
Ratios to average net assets:
Expenses 0.51% 0.51% 0.50% 0.51%(3)
Net investment income (loss) 5.03 4.88 5.42 4.93(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from November 9, 1994 (inception date) to December 31, 1994.
(2) Not annualized.
(3) Annualized.
Money Market Funds -- Class Z Shares 11
<PAGE>
SALOMON SMITH BARNEY(SM)
a member of citigroup [Symbol]
MONEY MARKET FUNDS
SHAREHOLDER REPORTS. Annual and semiannual reports to shareholders provide
additional information about the funds' investments. These reports discuss the
market conditions and investment strategies that affected the funds'
performance.
The fund sends only one report to a household if more than one account has the
same address. Contact your qualified plan or the transfer agent if you do not
want this policy to apply to you.
Statement of additional information. The statement of additional information
provides more detailed information about the funds and is incorporated by
reference into (is legally a part of) this prospectus.
You can make inquiries about the funds or obtain shareholder reports or the
statement of additional information (without charge) by contacting your
qualified plan, [by calling the fund at 1-800-451-2010, or by writing to the
funds at Smith Barney Mutual Funds, 388 Greenwich Street, MF2, New York, New
York 10013].
Visit our web site. Our web site is located at www.smithbarney.com
You can also review the funds' shareholder reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can get copies of these materials for a
fee by writing to the Public Reference Section of the Commission, Washington,
D.C. 20549-6009. Information about the public reference room may be obtained by
calling 1-800-SEC-0330. You can get the same information free from the
Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the funds that is not in this prospectus, you
should not rely upon that information. Neither the funds nor the distributor is
offering to sell shares of the funds to any person to whom the funds may not
lawfully sell its shares.
(SM) Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
(Investment Company Act file no. 811-02490)
Part B: Statement of Additional Information
April 30, 1999
STATEMENT OF ADDITIONAL INFORMATION
SMITH BARNEY MONEY FUNDS, INC.
388 Greenwich Street
New York, New York 10013
[insert phone number]
Class A Shares
Class L Shares
Class Y Shares
Class Z Shares
Smith Barney Money Funds, Inc. (the "Company") is a money market fund
that invests in high quality money market instruments. The Company
seeks to provide:
Daily Income
Convenience
Daily Liquidity
Stability of Net Asset Value
Shares of the Company are currently offered in three Portfolios (each, a
"fund"):
Cash Portfolio
Government Portfolio
Retirement Portfolio
This Statement of Additional information is not a Prospectus. It is
intended to provide more detailed information about the Company as well
as matters already discussed in the Prospectus and therefore should be
read in conjunction with the April 30, 1999 Prospectus which may be
obtained from the Company or a Salomon Smith Barney Financial
Consultant.
CONTENTS
Directors and Executive Officers 2
Investment Objectives and Management Policies 4
Risk Factors 8
Investment Restrictions and Fundamental Policies 8
Computation of Yield 10
Valuation of Shares and Amortized Cost Valuation 11
IRA and Other Prototype Retirement Plans 12
Purchase of Shares 13
Redemption of Shares 15
Exchange Privilege 18
Taxes 18
Investment Management and Other Services 19
Additional Information about the Funds 21
Voting Rights 22
Financial Statements 24
Appendix A - Securities Ratings 25
In all cases, there can be no assurance that a fund will achieve its
investment objective.
Shares of the funds are not insured or guaranteed by the U.S.
Government. There is no assurance that each fund will be able to
maintain a stable net asset value of $1.00 per share.
DIRECTORS AND EXECUTIVE OFFICERS
Overall responsibility for management and supervision of each fund rests
with the Company's Board of Directors. The directors approve all
significant agreements between the Company and the companies that
furnish services to the Company and the funds, including agreements with
the Company's distributor, investment manager, custodian, transfer agent
and dividend disbursing agent. The day-to-day operations of each fund
are delegated to that fund's investment manager. The directors and
executive officers of the Company, together with information as to their
principal business occupations during the past five years are shown
below.
DONALD R. FOLEY, Director
Retired; 3668 Freshwater Drive, Jupiter, Florida 33477. Director of 10
investment companies associated with Salomon Smith Barney. Formerly
Vice President of Edwin Bird Wilson, Incorporated (advertising); 76.
PAUL HARDIN, Director
Professor of Law at University of North Carolina at Chapel Hill; 12083
Morehead, Chapel Hill, North Carolina 27514; Director of 12 investment
companies associated with Salomon Smith Barney; Director of The Summit
Bancorporation; Formerly, Chancellor of the University of North Carolina
at Chapel Hill, University of North Carolina; 67.
HEATH B. McLENDON1, Chairman of the Board, President and Chief Executive
Officer
Managing Director of Salomon Smith Barney; Director of forty-two
investment companies associated with Salomon Smith Barney; Director and
President of Mutual Management Corp. ("SSBC or the "Manager") (formerly
known as Smith Barney Mutual Funds Management Inc.) and Travelers
Investment Adviser, Inc. ("TIA"); Chairman of the Board of Smith Barney
Strategy Advisors 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; 65.
RODERICK C. RASMUSSEN, Director
Investment Counselor; 9 Cadence Court, Morristown, New Jersey 07960.
Director of 10 investment companies associated with Salomon Smith
Barney. Formerly Vice President of Dresdner and Company Inc.
(investment counselors); 72.
JOHN P. TOOLAN, Director
Retired; 13 Chadwell Place, Morristown, New Jersey 07960. Director of
10 investment companies associated with Salomon Smith Barney. Formerly,
Director and Chairman of Smith Barney Trust Company, Director of Smith
Barney Holdings Inc. and the Manager and Senior Executive Vice
President, Director and Member of the Executive Committee of Salomon
Smith Barney; 68.
LEWIS E. DAIDONE, Senior Vice President and Treasurer
Managing Director of Salomon Smith Barney; Senior Vice President and
Treasurer of 42 investment companies associated with Salomon Smith
Barney; Director and Senior Vice President of the Manager and TIA; 41.
PHYLLIS M. ZAHORODNY, Vice President and Investment Officer
Managing Director of Salomon Smith Barney; Prior to August, 1993,
Managing Director and Portfolio Manager of Shearson Lehman Brothers
Inc.; 40.
MARTIN R. HANLEY, Investment Officer
Vice President of Salomon Smith Barney; Prior to August, 1993, Vice
President and Senior Trader of Shearson Lehman Brothers; 32.
IRVING DAVID, Controller and Assistant Secretary
Vice President of Salomon Smith Barney and the Manager; Controller of 2
investment companies associated with Salomon Smith Barney. Prior to
March, 1994, Assistant Treasurer of First Investment Management Company;
37.
CHRISTINA T. SYDOR, Secretary
Managing Director of Salomon Smith Barney; Secretary of 42 investment
companies associated with Salomon Smith Barney; Secretary and General
Counsel of the Manager and TIA; 48.
The business address of each of the officers of the Company listed above
is 388 Greenwich Street, New York, NY 10013. Such persons are
compensated by Salomon Smith Barney and are not separately compensated
by the Company. On April __, 1999, directors and officers owned in the
aggregate less than 1% of the outstanding securities of each fund.
The following table shows the compensation paid by the Company to each
director during the Company's last fiscal year. None of the officers of
the Company received any compensation from the Company for such period.
Officers and interested directors of the Company are compensated by
Salomon Smith Barney.
COMPENSATION TABLE
Name of Person
Aggregate
Compensat
ion from
the
Company
Pension or
Retirement
Benefits
Accrued as
Part of
Company's
Expenses
Total
Compensat
ion from
Fund
Complex
Estimated
Annual
Benefits
upon
Retiremen
t
Total
Number of
Funds for
Which
Person
Serves
with Fund
Complex
Joseph H.
Fleiss2, 3
$
$0
$
$
Donald R. Foley
0
Paul Hardin
0
Francis P.
Martin2
0
Heath B.
McLendon1
0
Roderick C.
Rasmussen
0
John P. Toolan2
0
1 Designates a director who is an "interested person" of the Company.
2 Pursuant to a deferred compensation plan, the indicated persons
elected to defer the following amounts of their compensation from the
Company Joseph H. Fleiss: $15,642, Donald R Foley: $15,642, Francis
P. Martin: $32,784 and John P. Toolan: $33,084, and the following
amounts of their total compensation from the Fund Complex: Joseph H.
Fleiss: $21,000, Donald R. Foley: $21,000, Francis P. Martin: $53,000
and John P. Toolan: $55,400 .
3 Director Emeritus. Upon attainment of age 72 the Company's current
Directors may elect to change to emeritus status. Any directors
elected or appointed to the Board of Directors in the future will be
required to change to emeritus status upon attainment of age 80.
Directors Emeritus are entitled to serve in emeritus status for a
maximum of 10 years during which time they are paid 50% of the annual
retainer fee and meeting fees otherwise applicable to the Company's
directors, together with reasonable out-of-pocket expenses for each
meeting attended. During the Company's last fiscal year, aggregate
compensation from the Company to Emeritus Directors totaled
$_________.
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
General. The Prospectus discusses each fund's investment objective and
the policies each fund employs to achieve its objective. Each fund is
an open-end, diversified management investment company under the
Investment Company Act of 1940 (the "1940 Act"). Each fund's investment
manager is SSBC Fund Management Inc. ("SSBC" or the "Manager").
The funds operate as money market funds, and utilize certain investment
policies so that, to the extent reasonably possible, each fund's price
per share will not change from $1.00, although no assurance can be given
that this goal will be achieved on a continuous basis.
Each fund's investments are limited to United States dollar-denominated
instruments (and repurchase agreements thereon) that, at the time of
acquisition (including any related credit enhancement features) have
received a rating in one of the two highest categories (the highest
category for Cash Portfolio) for short-term debt obligations from the
''Requisite NRSROs'', securities of issuers that have received such a
rating with respect to other comparable securities, and comparable
unrated securities. ''Requisite NRSROs'' means (a) any two nationally
recognized statistical rating organizations (''NRSROs'') that have
issued a rating with respect to a security or class of debt obligations
of an issuer, or (b) one NRSRO, if only one NRSRO has issued such a
rating at the time that the Fund acquires the security. The NRSROs
currently designated as such by the SEC are Standard & Poor's Ratings
Group (''S&P''), Moody's Investors Service, Inc. (''Moody's''), Duff and
Phelps Inc., FitchIBCA, Inc. and Thompson BankWatch.
The following is a description of the types of money market instruments
in which each fund may invest:
U.S. government obligations (each fund). Obligations issued or
guaranteed as to payment of principal and interest by the U.S.
Government (including Treasury bills, notes and bonds) or by its
agencies and instrumentalities (such as the Government National Mortgage
Association, the Student Loan Marketing Association, the Tennessee
Valley Authority, the Bank for Cooperatives, the Farmers Home
Administration, Federal Farm Credit Banks, Federal Home Loan Banks,
Federal Intermediate Credit Banks, Federal Land Banks, the Export-Import
Bank of the U.S., the Federal Housing Administration, the Federal Home
Loan Mortgage Corporation, the U.S. Postal Service, the Federal
Financing Bank and the Federal National Mortgage Association). Some of
these securities (such as Treasury bills) are supported by the full
faith and credit of the U.S. Treasury; others (such as obligations of
the Federal Home Loan Bank) are supported by the right of the issuer to
borrow from the Treasury; while still others (such as obligations of the
Student Loan Marketing Association) are supported only by the credit of
the particular agency or instrumentality.
Repurchase agreements (each fund). Each fund may enter into repurchase
agreement transactions with any broker/dealer or other financial
institution, including the funds' custodian, that is deemed creditworthy
by the Manager, under guidelines approved by the Board of Directors. A
repurchase agreement arises when the Company acquires a security for a
fund and simultaneously agrees to resell it to the vendor at an agreed-
upon future date, normally the next business day. The resale price is
greater than the purchase price and reflects an agreed-upon return
unrelated to the coupon rate on the purchased security. Such
transactions afford an opportunity for the fund to invest temporarily
available cash at no market risk. The fund requires continual
maintenance of the market value of the collateral in amounts at least
equal to the resale price. The fund's risk is limited to the ability of
the seller to pay the agreed-upon amount on the delivery date; however,
if the seller defaults, realization upon the collateral by the fund may
be delayed or limited, or the fund might incur a loss if the value of
the collateral securing the repurchase agreement declines and might
incur disposition costs in connection with liquidating the collateral.
The fund will not enter into a repurchase agreement if, as a result
thereof, more than 10% of the fund's net assets at that time would be
comprised of repurchase agreements maturing in more than seven days
and/or any other investments deemed to be illiquid.
The following are permitted investments for the Cash Portfolio and
Retirement Portfolio; the Government Portfolio will invest only in U.S.
Government obligations and repurchase agreements secured by those
obligations.
Commercial Paper and Other Short-term Obligations (Cash Portfolio and
Retirement Portfolio). Commercial paper (including variable amount
master demand notes and funding agreements) consists of short-term,
unsecured promissory notes issued by corporations, partnerships, trusts
and other entities to finance short-term credit needs. Short-term
obligations also include mortgage-related or asset-backed debt or debt-
like instruments, including pass-through certificates representing
participation in, or bonds and notes backed by, pools of mortgage,
credit card, automobile or other types of receivables. These structured
financings will be supported by sufficient collateral and other credit
enhancements, including letters of credit, insurance, reserve funds and
guarantees by third parties, to enable such instruments to obtain the
requisite quality ratings from NRSROs. Commercial paper and such other
short-term obligations will be rated in the highest category for short-
term debt obligations by the requisite NRSROs at the time of acquisition
by a fund, or will be unrated securities determined to be comparable
thereto.
High Quality Corporate Obligations (Cash Portfolio and Retirement
Portfolio). Obligations of corporations that are originally issued with
a maturity of greater than 397 days and are: (1) rated as long-term
debt obligations in the two highest rating categories (the highest for
Cash Portfolio) by the requisite NRSROs and (2) issued by an issuer that
has a class of short-term debt obligations that are comparable in
priority and security with the obligation and that have been rated in
one of the two highest rating categories for short-term debt
obligations, or are otherwise comparable to short-term debt obligations
having such a rating. Each fund will invest only in corporate
obligations with remaining maturities of 13 months or less.
Bank Obligations (Cash Portfolio and Retirement Portfolio). Obligations
(including certificates of deposit, bankers' acceptances and fixed time
deposits) and securities backed by letters of credit of U.S. banks or
other U.S. financial institutions that are members of the Federal
Reserve System or the Federal Deposit Insurance Corporation (''FDIC'')
(including obligations of foreign branches of such members) if either:
(a) the principal amount of the obligation is insured in full by the
FDIC, or (b) the issuer of such obligation has capital, surplus and
undivided profits in excess of $100 million or total assets of $1
billion (as reported in its most recently published financial statements
prior to the date of investment). Under current FDIC regulations, the
maximum insurance payable as to any one certificate of deposit is
$100,000; therefore, certificates of deposit in denominations greater
than $100,000 that are purchased by a fund will not be fully insured.
The Cash Portfolio and Retirement Portfolio each will not purchase a
fixed time deposit with an ultimate maturity of more than six months,
and will limit its investment in fixed time deposits maturing from two
business to seven calendar days and/or any other investments deemed to
be illiquid to 10% of its net assets.
The Cash Portfolio and Retirement Portfolio each will maintain at least
25% of its total assets invested in obligations of domestic and foreign
banks, subject to the above-mentioned size criteria. Each fund may
invest in instruments issued by domestic banks, including those issued
by their branches outside the United States and subsidiaries located in
Canada, and in instruments issued by foreign banks through their
branches located in the United States and the United Kingdom. In
addition, the Cash Portfolio and Retirement Portfolio may invest in
fixed time deposits of foreign banks issued through their branches
located in Grand Cayman Island, London, Nassau, Tokyo and Toronto.
Municipal Obligations (Cash Portfolio and Retirement Portfolio). Debt
obligations of states, cities, counties, municipalities, municipal
agencies and regional districts rated SP-1+ or A-1 or AA or better by
S&P or MIG 2, VMIG 2 or Prime-1 or Aa or better by Moody's or, if not
rated, are determined by the Manager to be of comparable quality. Cash
Portfolio only invests in municipal obligations rated in the highest
short-term rating category. At certain times, supply/demand imbalances
in the tax-exempt market cause municipal obligations to yield more than
taxable obligations of equivalent credit quality and maturity length.
The purchase of these securities could enhance a fund's yield. Each of
Cash Portfolio and Retirement Portfolio will not invest more than 10% of
its total assets in municipal obligations.
Time Deposits (Cash Portfolio and Retirement Portfolio). Cash Portfolio
and Retirement Portfolio may invest in fixed time deposits with an
ultimate maturity of not more than six months. In addition, each of
these funds currently intends to limit investment in fixed time deposits
with a maturity of two business days or more, when combined with other
illiquid assets of the fund, so that not more than 10% of its assets
would be invested in all such illiquid instruments. Fixed time
deposits, unlike negotiable certificates of deposit, generally do not
have a market and may be subject to penalties for early withdrawal of
funds.
Asset-Backed Securities (Cash Portfolio and Retirement Portfolio). Cash
Portfolio and Retirement Portfolio may invest in asset-backed securities
arising through the grouping by governmental, government-related and
private organizations of loans, receivables and other assets originated
by various lenders. Interests in pools of these assets differ from
other forms of debt securities, which normally provide for periodic
payment of interest in fixed amounts with principal paid at maturity or
specified call dates. Instead, asset-backed securities provide periodic
payments which generally consist of both interest and principal
payments.
The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments.
The rate of such prepayments, and hence the life of an asset-backed
security, will be primarily a function of current market interest rates,
although other economic and demographic factors may be involved. For
example, falling interest rates generally result in an increase in the
rate of prepayments of mortgage loans while rising interest rates
generally decrease the rate of prepayments. An acceleration in
prepayments in response to sharply falling interest rates will shorten
the security's average maturity and limit the potential appreciation in
the security's value relative to a conventional debt security. In
periods of sharply rising rates, prepayments generally slow, increasing
the security's average life and its potential for price depreciation.
Illiquid and Restricted Securities (Cash Portfolio and Retirement
Portfolio). Each fund may purchase securities that are not registered
("restricted securities") under the Securities Act of 1933, as amended
(the "1933 Act"), but can be offered and sold to "qualified
institutional buyers" under Rule 144A under the 1933 Act ("Rule 144A").
Each fund may also invest a portion of its assets in illiquid
investments, which include repurchase agreements maturing in more than
seven days. The Board of Directors may determine, based upon a
continuing review of the trading markets for the specific restricted
security, that such restricted securities are liquid. The Board of
Directors 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 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 purchasing these restricted securities. The funds
may also purchase restricted securities that are not registered under
Rule 144A.
The Articles of Incorporation of the Company permit the Board of
Directors to establish additional funds of the Company from time to
time. The investment restrictions applicable to any such additional
fund would be established by the Board of Directors at the time such
fund were established and may differ from those set forth above.
Other Investment Techniques
The following pertains to each fund:
Portfolio Turnover. Each fund may, to a limited degree, engage in
short-term trading to attempt to take advantage of short-term market
variations, or may dispose of a portfolio security prior to its maturity
if it believes such disposition advisable or it needs to generate cash
to satisfy redemptions. In such cases, a fund may realize a gain or
loss.
Borrowing. Each fund may borrow money from banks for temporary or
emergency purposes, including for the purpose of accommodating requests
for the redemption of shares while effecting an orderly liquidation of
portfolio securities, and not for leveraging purposes.
Reverse Repurchase Agreements. The Government Portfolio may invest 1/3
of its total assets in reverse repurchase agreements and enter into
reverse repurchase agreements with broker/dealers and other financial
institutions including the funds' custodian. Such agreements involve
the sale of portfolio securities with an agreement to repurchase the
securities at an agreed-upon price, date and interest payment and have
the characteristics of borrowing. Since the proceeds of borrowings
under reverse repurchase agreements are invested, this would introduce
the speculative factor known as "leverage." Such transactions are only
advantageous if the Government Portfolio has an opportunity to earn a
greater rate of interest on the cash derived from the transaction than
the interest cost of obtaining that cash. Opportunities to realize
earnings from the use of the proceeds equal to or greater than the
interest required to be paid may not always be available, and the Fund
intends to use the reverse repurchase technique only when the Manager
believes it will be advantageous to the Government Portfolio. The use
of reverse repurchase agreements may exaggerate any interim increase or
decrease in the value of the Government Portfolio's assets. The funds'
custodian bank will maintain a separate account for the Government
Portfolio with securities having a value equal to or greater than such
commitments.
Year 2000. The investment management services provided to each fund by
the Manager and the services provided to shareholders by Salomon Smith
Barney, the funds' Distributor, depend on the smooth functioning of
their computer systems. Many computer software systems in use today
cannot recognize the year 2000, but revert to 1900 or some other date,
due to the manner in which dates were encoded and calculated. That
failure could have a negative impact on the funds' operations, including
the handling of securities trades, pricing and account services. The
Manager and Salomon Smith Barney have advised the funds that they have
been reviewing all of their computer systems and actively working on
necessary changes to their systems to prepare for the year 2000 and
expect that their systems will be compliant before that date. In
addition, the Manager has been advised by the funds' custodian, transfer
agent and accounting service agent that they are also in the process of
modifying their systems with the same goal. There can, however, be no
assurance that the Manager, Salomon Smith Barney or any other service
provider will be successful, or that interaction with other non-
complying computer systems will not impair fund services at that time.
RISK FACTORS
Interest Rate Risk. General changes in interest rates result in
increases or decreases in the market value of the obligations held by a
fund (but do not affect the amortized cost valuations). The market
value of the obligations held by each fund can be expected to vary
inversely to changes in prevailing interest rates. Investors also
should recognize that, in periods of declining interest rates, each
fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates, each fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its shares
will likely be invested in instruments producing lower yields than the
balance of its investments, thereby reducing the Portfolio's current
yield. In periods of rising interest rates, the opposite can be
expected to occur.
Foreign Investments (Cash Portfolio and Retirement Portfolio).
Investments in securities issued by foreign banks or foreign issuers
present certain additional risks. Foreign issuers generally are not
subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements applicable
to domestic issuers. In addition, there may be less publicly available
information about a foreign issuer than about a domestic issuer. Cash
Portfolio and Retirement Portfolio may invest in Eurodollar and Yankee
obligations, which are certificates of deposit issued in U.S. dollars by
foreign banks and foreign branches of U.S. banks. The risks of
Eurodollar and Yankee obligations include the possibility that a foreign
government will not allow U.S. dollar-denominated assets to leave the
foreign country and the possibility that adverse political or economic
developments will affect investments in a foreign country.
INVESTMENT RESTRICTIONS AND FUNDAMENTAL POLICIES
The funds are subject to following restrictions and policies that are
"fundamental," which means that they cannot be changed without approval
by a vote of a majority of the outstanding voting securities of a fund
affected by the change, as defined in the 1940 Act and in accordance
with Rule 18f-2 thereunder (see "Voting Rights").
Fundamental Policies - Each fund. Without the approval of a majority of
its outstanding voting securities, no fund may:
1. 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. (However, since each of the
funds operates as money market fund under Rule 2a-7 under the Act,
compliance with Rule 2a-7 is deemed to satisfy the diversification
requirements otherwise applicable to diversified investment
companies under the 1940 Act.)
2. 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.
3. Borrow money, except that (a) the fund may borrow from banks for
temporary or emergency (not leveraging) purposes, including 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.
4. 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.
5. Purchase or sell real estate, real estate mortgages, real estate
investment trust securities, commodities or commodity contracts,
but this restriction shall not prevent each 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 fund's
investment objective and policies).
Additional Fundamental Policies - Cash Portfolio and Retirement
Portfolio. In addition to the fundamental policies stated above for all
funds:
1. Neither Cash Portfolio nor Retirement Portfolio may invest less
than 25% of its assets in bank obligations (including both
domestic and foreign bank obligations) and reserves freedom of
action to concentrate in securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies and
instrumentalities.
Nonfundamental Policies. The funds are subject to the following
restrictions and policies which are "non-fundamental" and which may be
changed by the Company's Board of Directors without shareholder
approval, subject to any applicable disclosure requirements. As a
nonfundamental policy, no fund may:
1. 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 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.
2. Invest in securities of other investment companies except as may
be acquired as part of a merger, consolidation, or acquisition of
assets.
3. 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.
4. Invest in oil and gas interests.
5. Invest in any company for the purpose of exercising control.
6. Write or purchase put or call options.
All of the foregoing restrictions that are stated in terms of
percentages will apply at the time an investment is made; a subsequent
increase or decrease in the percentage that may result from changes in
values or net assets will not result in a violation of the restriction.
Notwithstanding any of the foregoing investment restrictions, each of
the funds may invest up to 100% of its assets in U.S. Government
Obligations.
COMPUTATION OF YIELD
From time to time the Company may advertise the yield and effective
yield of its funds. For Cash Portfolio and Government Portfolio, each
fund may advertise the yield and effective yield of Class A, Class L and
Class Y shares. These yield figures are based on historical earnings
and are not intended to indicate future performance. The yield of a
fund or a class refers to the net investment income generated by an
investment in the fund or the class over a specific seven-day period
(which will be stated in the advertisement). This net investment income
is then annualized. The effective yield is calculated similarly but,
when annualized, the income earned by an investment in the fund or the
class is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of the assumed
reinvestment.
For the seven-day period ended December 31, 1998, the yield for the Cash
Portfolio was _____% (the effective yield was _____%) for Class A
shares, _____% (the effective yield was _____%) for Class L shares, and
_____% (the effective yield was _____%) for Class Y shares, with an
average dollar-weighted portfolio maturity of _____ days; the yield for
the Government Portfolio was _____% (the effective yield was _____%) for
the Class A and Class L shares and _____% (the effective yield was
_____%) for the Class Y shares with an average dollar-weighted maturity
of _____ days; and the yield for the Retirement Portfolio was _____%
(the effective yield was _____%) with an average dollar-weighted
portfolio maturity of _____ days. The Company quotes current yield of
each fund and class by dividing the net change in the value of a
hypothetical preexisting account having a balance of one share at the
beginning of a recent seven-day base period by the value of the account
at the beginning of the base period and multiplying this base period
return by 365/7. Net change in account value is the value of additional
shares purchased with dividends from original shares and dividends
declared on both original shares and any additional shares, but does not
include any changes in unrealized appreciation or depreciation. In
addition, for each fund and class the Company may from time to time
quote effective yield figures assuming the compounding of dividends.
The effective yield will be slightly higher than the yield because of
the compounding effect. The Company also quotes for each fund and class
the average dollar-weighted portfolio maturity for the corresponding
seven-day period.
Although principal is not insured and there can be no assurance that a
$1.00 per share net asset value will be maintained, it is not expected
that the net asset value of any fund's shares will fluctuate because the
Company uses the amortized cost method of valuation. (See "Valuation of
Shares.") Investors should bear in mind that yield is a function of the
type, quality and maturity of the instruments in a fund and the fund's
operating expenses. While current yield information may be useful,
investors should realize that each fund's current yield will fluctuate,
is not necessarily representative of future results and may not provide
a basis for comparison with bank deposits or other investments that pay
a fixed yield for a stated period of time.
VALUATION OF SHARES AND AMORTIZED COST VALUATION
The net asset value per share of each fund is determined as of 12 noon
Eastern time on each day that the New York Stock Exchange (''NYSE'') is
open by dividing the fund's net assets attributable to each class (i.e.,
the value of its assets less liabilities) by the total number of shares
of the class outstanding. Each fund may also determine net asset value
per share on days when the NYSE is not open, but when the settlement of
securities may otherwise occur. As noted above, each fund employs the
amortized cost method of valuing portfolio securities and seeks to
continue to maintain a constant net asset value of $1.00 per share.
The Prospectus states that net asset value will be determined on any day
the New York Stock Exchange is open and that the net asset value may be
determined on any day that the settlement of securities otherwise
occurs. The New York Stock Exchange is closed on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas and on the preceding Friday or subsequent Monday when one of
these holidays falls on a Saturday or Sunday, respectively.
The Company uses the "amortized cost method" for valuing portfolio
securities pursuant to Rule 2a-7 under the 1940 Act. The amortized cost
method of valuation of each fund's portfolio securities involves valuing
a security at its cost at the time of purchase and thereafter assuming a
constant amortization to maturity of any discount from or premium to the
stated principal amount of the security, regardless of the impact of
fluctuating interest rates on its market value. The market value of
portfolio securities will fluctuate on the basis of the creditworthiness
of the issuers of such securities and with changes in interest rates
generally. While the amortized cost method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the fund would receive
if it sold the instrument. During such periods the yields to investors
in a fund may differ somewhat from that obtained in a similar fund that
uses mark-to-market values for all its portfolio securities. For
example, if the use of amortized cost resulted in a lower (higher)
aggregate portfolio value on a particular day, a prospective investor in
the funds would be able to obtain a somewhat higher (lower) yield than
would result from investment in such similar company, and existing
investors would receive less (more) investment income.
The purpose of this method of valuation is to attempt to maintain a
constant net asset value per share, and it is expected that the price of
the funds' shares will remain at $1.00; however, shareholders should be
aware that despite procedures that will be followed to have a stabilized
price, including maintaining a maximum dollar-weighted average portfolio
maturity of 90 days and investing in securities with remaining
maturities of only 13 months or less, there is no assurance that at some
future date there will not be a rapid change in prevailing interest
rates, a default by an issuer or some other event that could cause the
fund's price per share to change from $1.00.
IRA AND OTHER PROTOTYPE RETIREMENT PLANS
Copies of the following plans with custody or trust agreements have been
approved by the Internal Revenue Service and are available from the
Company or Salomon Smith Barney; investors should consult with their own
tax or retirement planning advisors prior to the establishment of a
plan.
IRA, Rollover IRA and Simplified Employee Pension - IRA
The Small Business Job Protection Act of 1996 changed the eligibility
requirements for participants in Individual Retirement Accounts
("IRAs"). Under these new provisions, if you or your spouse have earned
income, each of you may establish an IRA and make maximum annual
contributions equal to the lesser of earned income or $2,000. As a
result of this legislation, married couples where one spouse is non-
working may now contribute a total of $4,000 annually to their IRAs.
The Taxpayer Relief Act of 1997 has changed the requirements for
determining whether or not you are eligible to make a deductible IRA
contribution. Under the new rules effective January 1, 1998, if you are
considered an active participant in an employer-sponsored retirement
plan, you may still be eligible for a full or partial deduction
depending upon your combined adjusted gross income ("AGI"). For married
couples filing jointly for 1998, a full deduction is permitted if your
combined AGI is $50,000 or less ($30,000 for unmarried individuals); a
partial deduction will be allowed when AGI is between $50,000-$60,000
($30,000-$40,000 for an unmarried individual); and no deduction is
available when AGI is $60,000 or more ($40,000 for an unmarried
individual). However, if you are married and your spouse is covered by
a employer-sponsored retirement plan, but you are not, you will be
eligible for a full deduction if your combined AGI is $150,000 or less.
A partial deduction is permitted if your combined AGI is between
$150,000-$160,000, and no deduction is permitted when AGI is above
$160,000.
The rules applicable to so-called "Roth IRAs" differ from those
described above.
A Rollover IRA is available to defer taxes on lump sum payments and
other qualifying rollover amounts (no maximum) received from another
retirement plan.
An employer who has established a Simplified Employee Pension - IRA
("SEP-IRA") on behalf of eligible employees may make a maximum annual
contribution to each participant's account of 15% (up to $24,000) of
each participant's compensation. Compensation is capped at $160,000 for
1998.
Paired Defined Contribution Prototype
Corporations (including Subchapter S corporations) and non-corporate
entities may purchase shares of the Company through the Smith Barney
Prototype Paired Defined Contribution Plan (the "Prototype"). The
Prototype permits adoption of profit-sharing provisions, money purchase
pension provisions, or both, to provide benefits for eligible employees
and their beneficiaries. The Prototype provides for a maximum annual
tax deductible contribution on behalf of each Participant of up to 25%
of compensation, but not to exceed $30,000 (provided that a money
purchase pension plan or both a profit-sharing plan and a money purchase
pension plan are adopted thereunder).
PURCHASE OF SHARES
Cash Portfolio and Government Portfolio. The minimum initial investment
for Class A is $1,000 for each Cash Portfolio and Government Portfolio
account and the minimum subsequent investment is $50, except for
purchases through (a) IRAs and Self-Employed Retirement Plans, for which
the minimum initial and subsequent investments are $250 and $50,
respectively, and (b) retirement plans qualified under Section 403(b)(7)
or Section 401(a) of the Internal Revenue Code of 1986, as amended (the
''Code''), for which the minimum initial and subsequent investments are
$25. There are no minimum investment requirements in Class A shares for
employees of Citigroup Inc. (''Citigroup'') and its subsidiaries,
including Salomon Smith Barney, and Directors or Trustees of any
Travelers-affiliated funds, including the Smith Barney Mutual Funds, and
their spouses and children. The minimum initial investment for Class Y
is $15,000,000 for each Cash Portfolio and Government Portfolio account
(except for purchases of Class Y shares by Smith Barney Concert
Allocation Series Inc., for which there is no minimum purchase amount)
and the minimum subsequent investment is $50. For shareholders
purchasing shares of a Portfolio through the Systematic Investment Plan
on a monthly basis, the minimum initial investment requirement for Class
A shares and the subsequent investment requirement for all classes is
$25. For shareholders purchasing shares of a fund through the
Systematic Investment Plan on a quarterly basis, the minimum initial
investment requirement for Class A shares and the subsequent investment
requirement for all classes is $50. In addition, Class Z shares, which
are offered pursuant to a separate prospectus, are offered exclusively
to tax-exempt employee benefit and retirement plans of Salomon Smith
Barney and its affiliates.
Class A and Class Y shares of the Cash Portfolio and Government
Portfolio are available for purchase directly by investors. Class L
shares of the Cash Portfolio and Government Portfolio are available for
purchase only by Participating Plans (as defined under ''Purchase of
Shares-Smith Barney 401(k) and ExecChoiceTM Programs'') opened prior to
June 21, 1996, either directly or as part of an exchange privilege
transaction with certain other funds sponsored by Salomon Smith Barney.
Class L shares of the Government Portfolio that represent previously
issued ''Class B'' shares may only be redeemed or exchanged out of the
fund.
Retirement Portfolio. Shares of the Retirement Portfolio are offered
exclusively to retirement plans under Sections 401 and 408 of the Code.
To purchase these shares, a brokerage account for your retirement plan
must be established with Salomon Smith Barney upon completion of an
account application available from your Financial Consultant. Salomon
Smith Barney has advised the fund that the minimum initial purchase is
$200 for each Retirement Portfolio account, and subsequent investments
may be $1.00 or more. Salomon Smith Barney also has advised the fund
that on each business day it will automatically invest all good funds of
$1.00 or more in the brokerage account in full shares of the Retirement
Portfolio, and there is no charge for this service.
Each fund's shares are sold continuously at their net asset value next
determined after a purchase order is received and becomes effective. A
purchase order becomes effective, and income dividends begin to accrue,
when the fund, Salomon Smith Barney or an Introducing Broker receives,
or converts the purchase amount into, Federal funds (i.e., monies of
member banks within the Federal Reserve System held on deposit at a
Federal Reserve Bank). When orders for the purchase of fund shares are
paid for in Federal funds which is required if shares are purchased
through First Data, or are placed by an investor with sufficient Federal
funds or cash balance in the investor's brokerage account with Salomon
Smith Barney or the Introducing Broker, the order becomes effective on
the day of receipt if received prior to 12 noon, Eastern time, on any
day the Fund calculates its net asset value. See ''Valuation of
Shares.'' Purchase orders received after 12 noon on any business day
are effective as of the next time the net asset value is determined.
When orders for the purchase of fund shares are paid for other than in
Federal funds, Salomon Smith Barney or the Introducing Broker, acting on
behalf of the investor, will complete the conversion into, or itself
advance, Federal funds, and the order will become effective on the day
following its receipt by the fund, Salomon Smith Barney or the
Introducing Broker.
Systematic Investment Plan. Shareholders may make additions to their
accounts at any time by purchasing shares through a service known as the
Systematic Investment Plan. Under the Systematic Investment Plan,
Salomon Smith Barney or First Data is authorized through preauthorized
transfers of at least $25 on a monthly basis or at least $50 on a
quarterly basis to charge the regular bank account or other financial
institution indicated by the shareholder, to provide systematic
additions to the shareholder's Portfolio account. A shareholder who has
insufficient funds to complete the transfer will be charged a fee of up
to $25 by Salomon Smith Barney or First Data. Additional information is
available from the fund or a Salomon Smith Barney Financial Consultant.
Smith Barney 401(k) and ExecChoiceTM Programs. Investors may be eligible
to participate in the Smith Barney 401(k) Program or the Smith Barney
ExecChoiceTM Program. To the extent applicable, the same terms and
conditions, which are outlined below, are offered to all plans
participating (''Participating Plans'') in these programs.
The Cash Portfolio and Government Portfolio each offers to Participating
Plans Class A shares as an investment choice under the Smith Barney
401(k) and ExecChoiceTM Programs, provided the Participating Plan makes
an initial investment of $1,000,000 or more in Class A shares of one or
more funds of the Smith Barney Mutual Funds. Class A shares acquired
through the Participating Plans are subject to the same service and/or
distribution fees as the Class A shares acquired by other investors;
however, they are not subject to any initial sales charge or contingent
deferred sales charge (''CDSC'').
Class L shares of the Cash Portfolio and Government Portfolio are not
available for purchase by Participating Plans opened on or after June
21, 1996, but may continue to be purchased by any Participating Plan
opened prior to such date and originally investing in such class. Class
L shares acquired are not subject to any sales charge or CDSC.
In any year after the date a Participating Plan enrolled in the Smith
Barney 401(k) Program, if its total Class L holdings in all non-money
market Smith Barney Mutual Funds equal at least $500,000 as of the
calendar year-end, the Participating Plan will be offered the
opportunity to exchange all of its Class L shares for Class A shares of
the same Portfolio. Such Plans will be notified in writing within 30
days after the last business day of the calendar year and, unless the
exchange offer has been rejected in writing, the exchange will occur on
or about the last business day of the following March.
Any Participating Plan that has not previously qualified for an exchange
into Class A shares will be offered the opportunity to exchange all of
its Class L shares for Class A shares of the same Portfolio, regardless
of asset size, at the end of the eighth year after the date the
Participating Plan enrolled in the Smith Barney 401(k) Program. Such
Participating Plans will be notified of the pending exchange in writing
approximately 60 days before the eighth anniversary of the enrollment
date and, unless the exchange has been rejected in writing, the exchange
will occur on or about the eighth anniversary date. Once an exchange
has occurred, a Participating Plan will not be eligible to acquire
additional Class L shares of the Portfolio but instead may acquire Class
A shares of the Portfolio.
Participating Plans wishing to acquire shares of the Cash Portfolio and
Government Portfolio through the Smith Barney 401(k) Program or the
Smith Barney ExecChoiceTM Program must purchase such shares directly
from First Data. For further information regarding these Programs,
investors should contact a Salomon Smith Barney Financial Consultant.
Letter of Intent - Class Y Shares. A Letter of Intent may be used as a
way for investors to meet the minimum investment requirement for Class Y
shares. Such investors must make an initial minimum purchase of
$5,000,000 in Class Y shares of the Fund and agree to purchase a total
of $15,000,000 of Class Y Shares of the Fund within 13 months from the
date of the Letter. If a total investment of $15,000,000 is not made
within the 13-month period, all Class Y shares purchased during such
period will be transferred to Class A shares, where they will be subject
to all fees (including a service fee of 0.25%) and expenses applicable
to the Fund's Class A shares, which may include a CDSC of 1.00%. Please
contact a Salomon Smith Barney Financial Consultant or the Transfer
Agent for further information.
REDEMPTION OF SHARES
Shareholders may redeem their shares without charge on any day a fund
calculates its net asset value. See ''Valuation of Shares.'' Redemption
requests received in proper form before 12 noon, Eastern time, are
priced at the net asset value as next determined on that day.
Redemption requests received after 12 noon, Eastern time, are priced at
the net asset value next determined. Redemption requests must be made
through a Salomon Smith Barney Financial Consultant or dealer
representative through whom the shares were purchased, except that
shareholders who purchased shares of the fund from First Data may also
redeem shares directly through First Data. A shareholder desiring to
redeem shares represented by certificates also must present the
certificates to a Salomon Smith Barney Financial Consultant, dealer
representative or First Data endorsed for transfer (or accompanied by an
endorsed stock power), signed exactly as the shares are registered.
Redemption requests involving shares represented by certificates will
not be deemed received until the certificates are received by First Data
in proper form.
Each fund normally transmits redemption proceeds on the business day
following receipt of a redemption request but, in any event, payment
will be made within three days thereafter, exclusive of days on which
the NYSE is closed and the settlement of securities does not otherwise
occur, or as permitted under the 1940 Act in extraordinary
circumstances. Generally, if the redemption proceeds are remitted to a
Salomon Smith Barney brokerage account, these funds will not be invested
for the shareholder's benefit without specific instruction and Salomon
Smith Barney will benefit from the use of temporarily uninvested funds.
A shareholder who pays for fund shares by personal check will be
credited with the proceeds of a redemption of those shares only after
the purchase check has been collected, which may take up to ten days or
more. A shareholder who anticipates the need for more immediate access
to his or her investment should purchase shares with Federal funds, by
bank wire or with a certified or cashier's check.
Fund shareholders who purchase securities through a Salomon Smith Barney
Financial Consultant or dealer representative may take advantage of
special redemption procedures under which Class A shares of the fund
will be redeemed automatically to the extent necessary to satisfy debit
balances arising in the shareholder's account with a Salomon Smith
Barney Financial Consultant or dealer representative. One example of
how an automatic redemption may occur involves the purchase of
securities. If a shareholder purchases securities but does not pay for
them by the settlement date, the number of fund shares necessary to
cover the debit will be redeemed automatically as of the settlement
date, which usually occurs three business days after the trade date.
Class A shares that are subject to a CDSC (see ''Redemption of Shares-
Contingent Deferred Sales Charge'') are not eligible for such automatic
redemption and will only be redeemed upon specific request. If the
shareholder does not request redemption of such shares, the
shareholder's account with a Salomon Smith Barney Financial Consultant
or dealer representative may be margined to satisfy debit balances if
sufficient fund shares that are not subject to any applicable CDSC are
unavailable. No fee is currently charged with respect to these
automatic transactions. Shareholders not wishing to participate in
these arrangements should notify their Salomon Smith Barney Financial
Consultant or dealer representative.
A written redemption request must (a) state the class and number or
dollar amount of shares to be redeemed, (b) identify the shareholder's
account number and (c) be signed by each registered owner exactly as the
shares are registered. If the shares to be redeemed were issued in
certificate form, the certificates must be endorsed for transfer (or be
accompanied by an endorsed stock power) and must be submitted to First
Data together with the redemption request. Any signature appearing on a
written redemption request in excess of $10,000, share certificate or
stock power must be guaranteed by an eligible guarantor institution such
as a domestic bank, savings and loan institution, domestic credit union,
member bank of the Federal Reserve System or member firm of a national
securities exchange. Written redemption requests of $10,000 or less do
not require a signature guarantee unless more than one such redemption
request is made in any 10-day period. Redemption proceeds will be
mailed to an investor's address of record. First Data may require
additional supporting documents for redemptions made by corporations,
executors, administrators, trustees or guardians. A redemption request
will not be deemed properly received until First Data receives all
required documents in proper form.
Telephone Redemption and Exchange Program. To determine if a
shareholder is entitled to participate in this program, he or she should
contact First Data at 1-800-451-2010. Once eligibility is confirmed,
the shareholder must complete and return a Telephone/Wire Authorization
Form, along with a signature guarantee, that will be provided by First
Data upon request. (Alternatively, an investor may authorize telephone
redemptions on the new account application with the applicant's
signature guarantee when making his/her initial investment in the fund.)
Redemptions. Redemption requests of up to $10,000 of any class or
classes of a fund's shares may be made by eligible shareholders by
calling First Data at 1-800-451-2010. Such requests may be made between
9:00 a.m. and 4:00 p.m. (Eastern time) on any day the NYSE is open.
Redemptions of shares (i) by retirement plans or (ii) for which
certificates have been issued are not permitted under this program.
A shareholder will have the option of having the redemption proceeds
mailed to his/her address of record or wired to a bank account
predesignated by the shareholder. Generally, redemption proceeds will
be mailed or wired, as the case may be, on the next business day
following the redemption request. In order to use the wire procedures,
the bank receiving the proceeds must be a member of the Federal Reserve
System or have a correspondent relationship with a member bank. The
fund reserves the right to charge shareholders a nominal fee for each
wire redemption. Such charges, if any, will be assessed against the
shareholder's account from which shares were redeemed. In order to
change the bank account designated to receive redemption proceeds, a
shareholder must complete a new Telephone/Wire Authorization Form and,
for the protection of the shareholder's assets, will be required to
provide a signature guarantee and certain other documentation.
Exchanges. Eligible shareholders may make exchanges by telephone if the
account registration of the shares of the fund being acquired is
identical to the registration of the shares of the fund exchanged. Such
exchange requests may be made by calling First Data at 1-800-451-2010
between 9:00 a.m. and 4:00 p.m. (Eastern time) on any day on which the
NYSE is open. See ''Exchange Privilege'' for more information.
Additional information regarding Telephone Redemption and Exchange
Program. Neither the funds nor their agents will be liable for
following instructions communicated by telephone that are reasonably
believed to be genuine. Each fund and its agents will employ procedures
designed to verify the identity of the caller and legitimacy of
instructions (for example, a shareholder's name and account number will
be required and phone calls may be recorded). Each fund reserves the
right to suspend, modify or discontinue the telephone redemption and
exchange program or to impose a charge for this service at any time
following at least seven (7) days prior notice to shareholders.
Contingent Deferred Sales Charge - Cash Portfolio and Government
Portfolio
Class A shares of the Cash Portfolio and Government Portfolio and Class
L shares of the Government Portfolio that represent previously issued
''Class B'' shares acquired as part of an exchange privilege
transaction, which were originally acquired in one of the other Smith
Barney Mutual Funds at net asset value subject to a CDSC, continue to be
subject to any applicable CDSC of the original fund. Therefore, such
Class A and Class L shares that are redeemed within 12 months of the
date of purchase of the original fund may be subject to a CDSC of 1.00%.
The amount of any CDSC will be paid to and retained by Salomon Smith
Barney. The CDSC will be assessed based on an amount equal to the
account value at the time of redemption, and will not be imposed on
increases in value above the initial purchase price in the original
fund. In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.
In determining the applicability of any CDSC, it will be assumed that a
redemption is made first of shares representing capital appreciation,
next of shares representing the reinvestments of dividends and capital
gain distributions and finally of other shares held by the shareholder
for the longest period of time. The length of time that Class A and
Class L shares have been held will be calculated from the date that the
shares were initially acquired in one of the other Smith Barney Mutual
Funds, and the amount of shares being redeemed will be considered to
represent, as applicable, the value of capital appreciation or dividend
and capital gain distribution reinvestments in such other funds. For
federal income tax purposes, the amount of the CDSC will reduce the gain
(if any) or increase the loss (if any), as the case may be, on
redemption.
The CDSC on Class A and Class L shares, if any, will be waived on (a)
exchanges (see ''Exchange Privilege'' below); (b) redemptions of shares
within twelve months following the death or disability of the
shareholder; (c) redemption of shares made in connection with qualified
distributions from retirement plans or IRAs upon the attainment of age
59 1/2; (d) involuntary redemptions; and (e) redemptions of shares to
effect a combination of a Portfolio with any investment company by
merger, acquisition of assets or otherwise. In addition, a shareholder
who has redeemed shares from other funds of the Smith Barney Mutual
Funds may, under certain circumstances, reinvest all or part of the
redemption proceeds within 60 days and receive pro rata credit for any
CDSC imposed on the prior redemption.
CDSC waivers will be granted subject to confirmation (by Salomon Smith
Barney in the case of shareholders who are also Salomon Smith Barney
clients or by First Data in the case of all other shareholders) of the
shareholder's status or holdings, as the case may be.
For information concerning the CDSC applicable to Class A and Class L
shares acquired through the Smith Barney 401(k) or ExecChoiceTM Program,
see ''Purchase of Shares.''
EXCHANGE PRIVILEGE
Except as otherwise noted below, shares of each class may be exchanged
for shares of the same class in any of the Smith Barney Mutual Funds, to
the extent shares are offered for sale in the shareholder's state of
residence. Exchanges of Class A and Class L shares are subject to
minimum investment requirements and all shares are subject to other
terms or requirements of the fund into which exchanges are made and a
sales charge may apply.
Class A Exchanges. Class A shares of each fund will be subject to the
applicable sales charge upon the exchange of such shares for Class A
shares of another fund of the Smith Barney Mutual Funds sold with a
sales charge.
Class Y Exchanges. Class Y shareholders of a fund who wish to exchange
all or a portion of their Class Y shares for Class Y shares in any of
the funds identified above may do so without imposition of any charge.
Additional Information Regarding the Exchange Privilege. Excessive
exchange transactions may be detrimental to each fund's performance and
its shareholders. The investment manager may determine that a pattern
of frequent exchanges is excessive and contrary to the best interests of
a fund's other shareholders. In this event the fund may, at its
discretion, decide to limit additional purchases and/or exchanges by the
shareholder. Upon such a determination the fund will provide notice in
writing or by telephone to the shareholder at least 15 days prior to
suspending the exchange privilege and during the 15 day period the
shareholder will be required to (a) redeem his or her shares in the fund
or (b) remain invested in the Portfolio or exchange into any of the
funds of the Smith Barney Mutual Funds ordinarily available, which
position the shareholder would be expected to maintain for a significant
period of time. All relevant factors will be considered in determining
what constitutes an abusive pattern of exchanges.
Certain shareholders may be able to exchange shares by telephone. See
''Redemption of Shares - Telephone Redemption and Exchange Program.''
Exchanges will be processed at the net asset value next determined, plus
any applicable sales charge. Redemption procedures discussed above are
also applicable for exchanging shares, and exchanges will be made upon
receipt of all supporting documents in proper form. If the account
registration of the shares of the fund being acquired is identical to
the registration of the shares of the fund exchanged, no signature
guarantee is required. Before exchanging shares, investors should read
the current prospectus describing the shares to be acquired. These
exchange privileges are available to shareholders resident in any state
in which the fund shares being acquired may legally be sold. The
Company reserves the right to modify or discontinue exchange privileges
upon 60 days' prior notice to shareholders.
TAXES
The following is a general summary of selected federal income tax
considerations that may affect the funds and their shareholders. In
addition to the considerations described below, there may be other
federal, state, local, or foreign tax applications to consider. The
summary does not address all of the federal income tax consequences
potentially applicable to the funds, or to all categories of investors,
some of which may be subject to special tax rules. The summary is not
intended as a substitute for individual tax advice and investors are
urged to consult their own tax advisors as to the tax consequences of an
investment in a fund.
Dividends and Automatic Reinvestment. Net investment income includes
interest accrued and discount earned and all short term realized gains
and losses on portfolio securities and is less premium amortized and
expenses accrued. If a shareholder redeems in full an account between
payment days, all dividends declared up to and including the date of
liquidation will be paid with the proceeds from the redemption of
shares. The per share dividends of Class A and Class L shares of the
Cash Portfolio and the Government Portfolio may be less than the per
share dividends of Class Y shares of each such Portfolio principally as
a result of the service fee applicable to Class A and Class L shares.
Long-term capital gains, if any, will be in the same per share amount
for each class and will be distributed annually.
Each fund has qualified and intends to qualify each year as a regulated
investment company under Subchapter M of the Code by complying with
certain requirements regarding the sources and distribution of its
income and the diversification of its assets. As a regulated investment
company, each fund will not be subject to Federal income taxes to the
extent that it distributes its investment company taxable income and, if
any, net capital gain in accordance with the Code's timing and other
requirements. For Federal income tax purposes, dividends and capital
gains distributions, if any, whether in shares or cash, are taxable to
shareholders of each fund that are not tax-exempt or tax deferred
retirement plans, accounts or entities. Each fund anticipates that all
or substantially all of its distributions will be taxable as ordinary
income under the Code. Under the Internal Revenue Code, no portion of
the Fund's distributions will be eligible for the dividends received
deduction for corporations.
Dividends and other distributions by the funds are generally treated
under the Code as received by the shareholders at the time the dividend
or distribution is made. However, any dividends or other distributions
declared by a fund in October, November or December and made payable to
shareholders of record in such a month would be treated under the Code
as if received by shareholders on December 31 of the year in which they
are declared if they are paid in the following January.
Dividends to shareholders who are nonresident aliens or foreign entities
may be subject to nonresident alien withholding (which differs from the
backup withholding described in the Prospectus) of federal income tax at
a maximum rate of 30%, subject to possible reduction under an applicable
income tax treaty (if any). Other distributions to these shareholders
may be subject to backup withholding unless their foreign status is
properly certified in the manner required under the Code. Nonresident
aliens and foreign entities should consult their own tax advisers
regarding these and other possible tax consequences of investing in the
funds.
INVESTMENT MANAGEMENT AND OTHER SERVICES
Manager. SSBC manages the day to day operations of each fund pursuant
to management agreements entered into by the Company on behalf of each
fund. Under the management agreements, the Manager offers each fund
advice and assistance with respect to the acquisition, holding or
disposal of securities and recommendations with respect to other aspects
of the business and affairs of each fund. It also furnishes each fund
with executive and other personnel; management, bookkeeping, accounting
and administrative services; office space and equipment; and the
services of the officers and employees of the fund. SSBC is a
subsidiary of Salomon Smith Barney Holdings, Inc., which is a subsidiary
of Citigroup Group Inc. ("Citigroup"), a publicly owned financial
services company.
For the years 1996, 1997 and 1998, the funds paid management fees as
shown below:
Fund
Management Fee
1996
1997
1998
Cash Portfolio
$103,013,084
$117,380,871
Government Portfolio
18,688,740
19,475,520
Retirement Portfolio
5,588,496
5,982,179
The respective funds' management agreements, which were approved by
their shareholders on September 16, 1994 and became effective on
November 21, 1994, provide for daily compensation of the Manager at the
following annual rates:
Fund
Fund Asset Breakpoints
Management Fee as a
Percentage of Average Daily
Net Assets
Cash Portfolio
First $6 billion
0.45%
Over $6 billion up to $12
billion
0.425%
Over $12 billion up to $18
billion
0.40%
Over $18 billion
0.35%
Government
Portfolio
First $2.5 billion
0.45%
Over $2.5 billion up to $5
billion
0.40%
Over $5 billion
0.35%
Retirement
Portfolio
First $1 billion
0.45%
Over $1 billion up to $2
billion
0.40%
Over $2 billion
0.35%
Each fund's management agreement further provides that all other
expenses not specifically assumed by the Manager under the agreement are
borne by the Company. Expenses payable by the Company include, but are
not limited to, all charges of custodians (including sums as custodian
and sums for keeping books, performing portfolio valuations, and for
rendering other services to the Company) and shareholder servicing
agents, filing fees and expenses relating to the registration and
qualification of the Company's shares under Federal or state securities
laws and maintaining such registrations and qualifications (including
the printing of the Company's registration statements and prospectuses),
expenses of preparing, printing and distributing all proxy material,
reports and notices to shareholders, out-of-pocket expenses of directors
and fees of directors who are not "interested persons" as defined in the
1940 Act, fees of auditors and legal counsel, interest, taxes, fees and
commissions of every kind, expenses of issue, repurchase or redemption
of shares, and all other costs incident to the Company's corporate
existence and extraordinary expenses such as litigation and
indemnification expenses. Direct expenses are charged to the relevant
fund; general corporate expenses of the Company are allocated among all
the funds on the basis of relative net assets. No sales or promotion
expenses are incurred by the Fund, but expenses incurred in complying
with laws regulating the issue or sale of the Company's shares are not
deemed sales or promotion expenses.
The Manager has agreed that if in any fiscal year the total expenses of
any fund, exclusive of taxes, brokerage, interest and extraordinary
expenses, exceed 0.70% of the average daily net assets for that fiscal
year of the fund, the Manager will reduce its fee to the extent of such
excess, or reimburse any such excess amount to the relevant fund. The
0.70% voluntary expense limitation shall be in effect until it is
terminated by 14 days' written notice to shareholders and by supplement
to the then current prospectus.
Each fund's management agreement will continue in effect if specifically
approved annually by a majority of the directors of the Company,
including a majority of the directors who are not parties to such
contract or "interested persons" of any such parry. Each agreement may
be terminated without penalty by either of the parties on 60 days'
written notice and must terminate in the event of its assignment. It
may be amended or modified only if approved by vote of the holders of "a
majority of the outstanding voting securities" of such fund as defined
in the 1940 Act and rules thereunder which is discussed below under
"Voting Rights."
Each agreement provides that the Manager is not liable for any act or
omission in the course of or in connection with rendering services under
the agreement in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
The term ''Smith Barney'' in the title of the Company has been adopted
by permission of Salomon Smith Barney and is subject to the right of
Salomon Smith Barney to elect that the Company stop using the term in
any form or combination of its name.
Distributor. CFBDS, 20 Milk Street, Boston, MA 02109-5408, distributes
shares of the fund as principal underwriter and as such conducts a
continuous offspring pursuant to a "best efforts" arrangement
requiring CFBDS to take and pay for only such securities as may be sold
to the public. Pursuant to a plan of distribution adopted by the fund
under Rule 12b-1 under the 1940 Act (a "Plan"), CFBDS is paid a
service fee with respect to Class A, and Class L shares of the Fund at
the annual rate of 0.10% of the average daily net assets attributable to
these Classes. The fee is used to pay Salomon Smith Barney's Financial
Consultants and PFS's Financial Consultants for servicing shareholder
accounts for as long as a shareholder remains a holder of the class.
The service fee is also spent on the following types of expenses: (1)
the pro rata share of other employment costs of such Financial
Consultants (e.g., FICA, employee benefits, etc.); (2) employment
expenses of home office personnel primarily responsible for providing
service to a Portfolio's shareholders; and (3) the pro rata share of
branch office fixed expenses (including branch overhead allocations).
Brokerage. The Manager places orders for the purchase and sale of
securities for the funds of the Company. All of the portfolio
transactions have been principal transactions with major dealers in
money market instruments, on which no brokerage commissions are paid.
Purchases from or sales to dealers serving as market-makers include the
spread between the bid and asked prices. No portfolio transactions are
handled by Salomon Smith Barney.
ADDITIONAL INFORMATION ABOUT THE FUNDS
The Company, an open-end, diversified management investment company, was
incorporated under Maryland law on May 28, 1974. The Company currently
has outstanding three series of shares, representing shares in separate
Funds - the Cash Portfolio, the Government Portfolio and the Retirement
Portfolio - and the Company's Board of Directors may authorize the
creation of additional series of shares. Each share of a fund or class
represents an equal proportionate interest in the net assets of that
fund or class with each other share of the same fund or class and is
entitled to such dividends and distributions out of the net income of
that fund or class as are declared in the discretion of the Board.
Shareholders are entitled to one vote for each share held and will vote
in the aggregate and not by fund or class except as otherwise required
by the 1940 Act or Maryland law. In the event of the liquidation or
dissolution of a fund or of the Company, shares of a fund are entitled
to receive the assets belonging to that fund and a proportionate
distribution of any general assets not belonging to any particular fund
that are available for distribution based upon the relative net assets
of the respective funds.
Voting Rights. As permitted by Maryland law, there will normally be no
meetings of shareholders for the purpose of electing directors unless
and until such time as less than a majority of the directors holding
office have been elected by shareholders. At that time, the directors
then in office will call a shareholders' meeting for the election of
directors. The directors must call a meeting of shareholders for the
purpose of voting upon the question of removal of any director when
requested in writing to do so by the record holders of not less than 10%
of the outstanding shares of the Company. At such a meeting, a director
may be removed after the holders of record of not less than a majority
of the outstanding shares of the Company have declared that the director
be removed either by declaration in writing or by votes cast in person
or by proxy. Except as set forth above, the directors shall continue to
hold office and may appoint successor directors.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of the Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an
investment company shall not be deemed to have been effectively acted
upon unless approved by "vote of a majority of the outstanding voting
securities" (as defined below) of each fund or class affected by the
matter. Rule 18f-2 further provides that a fund or class shall be
deemed to be affected by a matter unless it is clear that the interests
of each fund or class in a matter are identical or that the matter does
not affect any interest of the fund or class. Under the rule the
approval of a management agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a fund
only if approved by a majority of the outstanding voting securities of
the fund affected by the matter. The rule, however, also provides that
the ratification of independent public accountants, the election of
directors, and the approval of a distribution agreement that is
submitted to shareholders are not subject to the separate voting
requirements and may be effectively acted upon by a vote of the holders
of a majority of all fund shares voting without regard to fund.
As used in the Prospectus and this Statement of Additional Information,
a "vote of a majority of the outstanding voting securities" means the
affirmative vote of the lesser of (a) more than 50% of the outstanding
shares of the Company (or the affected fund or class) or (b) 67% or more
of such shares present at a meeting if more than 50% of the outstanding
shares of the Company (or the affected fund or class) are represented at
the meeting in person or by proxy.
Following are the names, addresses and percent of ownership of each
person who owns of record or is known by the Company to own of record of
beneficially 5% or more of any Class of a fund as of April __, 1999:
Custodian. PNC Bank, National Association, a national banking
association with offices at 17th and Chestnut Streets, Philadelphia,
Pennsylvania (the "Custodian") serves as custodian of the Fund's
investments.
Transfer and Dividend Disbursing Agent. First Data Investor Services
Group, Inc., Exchange Place, Boston, Massachusetts 02109 serves as the
Fund's transfer and dividend disbursing agent.
Independent Auditors. KPMG LLP, 345 Park Avenue, New York, New York
10154, has been selected as independent auditors for each fund for its
fiscal year ending December 31, 1999 to examine and report on their
examination of the financial statements and financial highlights of the
funds.
Annual and Semi-Annual Reports. The Company sends its shareholders a
semi-annual report and an audited annual report, which include listings
of the investment securities held by each fund at the end of the period
covered. In an effort to reduce the funds' printing and mailing costs,
the funds plans to consolidate the mailing of their semi-annual and
annual reports by household. This consolidation means that a household
having multiple accounts with the identical address of record will
receive a single copy of each report. Shareholders who do not want this
consolidation to apply to their accounts should contact their Salomon
Smith Barney Financial Consultant or the transfer agent.
Minimum Account Size. The Company reserves the right to redeem
involuntarily any shareholder's account in Cash Portfolio or Government
Portfolio if the aggregate net asset value of the shares held in the
account in either fund is less than $500, and to redeem involuntarily
any shareholder's account in Retirement Portfolio if the aggregate net
asset value of the shares held in the account is less than $100. With
respect to Cash Portfolio and Government Portfolio, any applicable CDSC
will be deducted from the proceeds of this redemption. (If a
shareholder has more than one account in these funds, each account must
satisfy the minimum account size.) Before the Board of Directors of the
Company elects to exercise such right, shareholders will receive prior
written notice and will be permitted 60 days to bring accounts up to the
minimum to avoid involuntary redemption.
FINANCIAL STATEMENTS
The following financial information will be incorporated by reference to
the Company's 1998 Annual Report to Shareholders which will be
subsequently filed in a Post-Effective Amendment to this Registration
Statement:
APPENDIX A - SECURITIES RATINGS
BOND (AND NOTES) RATINGS
Moody's Investors Service, Inc.
Aaa - Bonds that are rated "Aaa" are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected
by a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa - Bonds that are rated '"Aa" are judged to be of high quality
by all standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in "Aaa"
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present that make the long term
risks appear somewhat larger than in "Aaa" securities.
Note: The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in
the lower end of its generic rating category.
Standard & Poor's Rating Group
AAA - Debt rated "AAA" has the highest rating assigned by Standard
& Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA - Debt rated "AA" has a very strong capacity to pay interest
and repay principal and differs from the highest rated issues only in
small degree.
Plus (+) or Minus (-): The rating of "AA" may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of
the project being financed by the debt being rated and indicates that
payment of debt service requirements is largely or entirely dependent
upon the successful and timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the
project, makes no comment on the likelihood of' or the risk of default
upon failure of' such completion. The investor should exercise judgment
with respect to such likelihood and risk.
L - The letter "L" indicates that the rating pertains to the
principal amount of those bonds where the underlying deposit collateral
is fully insured by the Federal Savings & Loan Insurance Corp. or the
Federal Deposit Insurance Corp.
- Continuance of the rating is contingent upon S&Ps receipt of
closing documentation confirming investments and cash flow.
* - Continuance of the rating is contingent upon S&Ps receipt of
an executed copy of the escrow agreement.
Fitch IBCA, Inc.
AAA - Bonds rated AAA by Fitch have the lowest expectation of
credit risk. The obligor has an exceptionally strong capacity for
timely payment of financial commitments which is highly unlikely to be
adversely affected by foreseeable events.
AA - Bonds rated AA by Fitch have a very low expectation of credit
risk. They indicate very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.
Plus (+) Minus (-): Plus and minus signs are used with a rating
symbol to indicate the relative position of a credit within the rating
category. Plus and minus signs, however, are not used in the "AAA"
category.
COMMERCIAL PAPER RATINGS
Moody's Investors Service, Inc.
Issuers rated "Prime-1" (or related supporting institutions) have
a superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment will normally be evidenced by the following
characteristics: leading market positions in well-established
industries; high rates of return on funds employed; conservative
capitalization structures with moderated reliance on debt and ample
asset protection; broad margins in earnings coverage of fixed financial
changes and high internal cash generation; well-established access to a
range of financial markets and assured sources of alternate liquidity.
Issuers rated "Prime-2" (or related supporting institutions) have
strong capacity for repayment of short-term promissory obligations.
This will normally be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage rations,
while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Standard & Poor's Ratings Group
A-1 - This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issuers determined to possess overwhelming safety characteristics will
be denoted with a plus (+) sign designation.
A-2 - Capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as high as for
issues designated A-1.
Fitch IBCA, Inc.
Fitch's short-term ratings apply to debt obligations that are
payable on demand or have original maturities of generally up to three
years, including commercial paper, certificates of deposit, medium-term
notes, and municipal and investment notes.
The short-term rating places greater emphasis than a long-term
rating on the existence of liquidity necessary to meet financial
commitment in a timely manner.
Fitch's short-term ratings are as follows:
F1+ - Issues assigned this rating are regarded as having the
strongest capacity for timely payments of financial commitments. The
"+" denotes an exceptionally strong credit feature.
Fl - Issues assigned this rating are regarded as having the
strongest capacity for timely payment of financial commitments.
F2 - Issues assigned this rating have a satisfactory capacity for
timely payment of financial commitments, but the margin of safety is not
as great as in the case of the higher ratings.
Duff& Phelps Inc.
Duff 1+ - Indicates the highest certainty of timely payment:
short-term liquidity is clearly outstanding, and safety is just below
risk-free United States Treasury short-term obligations.
Duff 1 - Indicates a high certainty of timely payment.
Duff 2 - Indicates a good certainty of timely payment liquidity
factors and company fundamentals are sound.
Thompson BankWatch ("TBW")
TBW-1 - Indicates a very high degree of likelihood that principal
and interest will be paid on a timely basis.
TBW-2 - while the degree of safety regarding timely repayment of
principal and interest is strong, the relative degree of safety is not
as high as for issues rated TBW- 1.
- -26-
PART C - OTHER INFORMATION
Item 23. Exhibits
(a) (1) Articles Supplementary to the Articles of
Incorporation dated November 7, 1985, January 30,
1984, August 12, 1980 and May 8, 1980 are
incorporated by reference to Exhibits (a) through
(d) to Post-Effective Amendment No. 32.
(2) Articles Supplementary to the Articles of
Incorporation dated December 5, 1990 and Articles of
Amendment dated April 19, 1991 are incorporated by
reference to Exhibit 1(b) and (c) to Post-Effective
Amendment No. 35.
(3) Articles of Amendment to the Articles of
Incorporation dated October 28, 1992 and Articles
Supplementary to the Articles of Incorporation dated
December 8, 1992 are incorporated by reference to
Exhibit 1(c) and (d) to Post-Effective Amendment No.
41.
(4) Certificate of Correction dated July 15, 1994 is
filed herewith.
(5) Articles Supplementary to the Articles of
Incorporation dated July 19, 1994 is filed herewith.
(6) Articles of Amendment to Articles of
Incorporation dated November 3,1994 is filed
herewith.
(7) Articles Supplementary to Articles of
Incorporation dated November 3,1994 is
filed herewith.
(8) Articles Supplementary to Articles of
Incorporation dated November 3,1994 is filed herewith.
(9) Articles Supplementary to Articles of Incorporation
dated January 16, 1996 is filed
herewith.
(10) Articles Supplementary to Articles of Incorporation
dated January 30, 1998 is filed
herewith.
(11) Articles of Amendment to Articles of
Incorporation dated June 1998 is filed herewith.
(b) (1) Bylaws are incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 32.
(2) Restated By-Laws are filed herewith.
(c) Specimen Stock Certificates for the Cash Portfolio,
Government Portfolio and Retirement Portfolio are
incorporated by reference to Exhibits 4(a) through (c)
to Post-Effective Amendment No. 32.
(d) (1) Management Agreement - U.S. Treasury Portfolio is
incorporated by reference to Exhibit 5(a) to Post-
Effective Amendment No. 34.
(2) Management Agreement for the Cash Portfolio is
incorporated by reference to Exhibit 5(b) to Post-
Effective Amendment No. 44.
(3) Management Agreement for the Government Portfolio is
incorporated by reference to Exhibit 5(c) to Post-
Effective Amendment No. 44.
(4) Management Agreement for the Retirement Portfolio is
incorporated by reference to Exhibit 5(d) to Post-
Effective Amendment No. 44.
(e) (1) Underwriting Agreement is
incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 32.
(2) Distribution Agreement between the Registrant
and CFBDS Inc. dated October 8,
1998 is filed herewith.
(f) Not applicable.
(g) Custodian Agreement is incorporated by reference to
Exhibit 8 to Post-Effective Amendment No. 32.
(h) Form of Transfer Agency Agreement is incorporated by
reference to Exhibit 9 to Post-Effective Amendment No.
49.
(i) Opinion and Consent of Sullivan & Cromwell as to
legality of
the series of shares being registered is incorporated
by reference to the
Registration Statement and Post-Effective
Amendment No. 31.
(j) (1) Auditors' Report (see the Annual Report to
Shareholders which is incorporated by reference in the
Statement of Additional Information)
(2) Auditors' Consent ( to be filed by amendment)
(k) Not applicable.
(l) Not applicable.
(m) (1) Plan of Distribution Pursuant to Rule 12b-1 for the
Cash Portfolio is incorporated by reference to
Exhibit 15(a) to Post-Effective Amendment No. 44.
(2) Plan of Distribution Pursuant to Rule 12b-1 for the
Government Portfolio is incorporated by reference to
Exhibit 15(b) to Post-Effective Amendment No. 44.
(3) Plan of Distribution Pursuant to Rule 12b-1 for the
Retirement Portfolio is incorporated by reference to
Exhibit 15 to Post-Effective Amendment No. 42.
(4) Form of Amended and Restated Plan of Distribution to
Rule 12b-1 for the Registrant is filed herewith.
(n) Financial Data Schedule (to be filed by amendment)
(o) (1) Plan pursuant to Rule 18f-3 is incorporated by
reference to Exhibit 18 to Post-Effective Amendment No.
47.
(2) Plan pursuant to Rule 18f-3 is filed herewith.
Item 24. Persons Controlled by or under Common Control with
Registrant
(None)
Item 25. Indemnification
Reference is made to Article SEVENTH of Registrant's
Articles of Incorporation for a complete statement of its
terms.
Subparagraph (9) of Article SEVENTH provides: "Anything
herein contained to the contrary notwithstanding, no
officer or director of the corporation shall be
indemnified for any liability to the registrant or its
security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the
conduct of his office."
Registrant is a named assured on a joint insured bond
pursuant to Rule 17g-1 of the Investment Company Act of
1940. Other assureds include SSBC Fund Management Inc.
(formerly Mutual Management Corp.) (Registrant's Manager)
and affiliated investment companies.
Item 26. Business and other Connections of Investment Adviser
Information as to the Directors and Officers of SSBC Fund
Management Inc. (formerly Mutual Management Corp.) is
included in its Form ADV (File No. 801-8314), filed with
the Commission, which is incorporated herein by reference
thereto.
Item 27. Principal Underwriters
(a) CFBDS, Inc., ("CFBDS") the Registrant's Distributor, is also
the distributor for the following Smith Barney funds: Concert
Investment Series, Consulting Group Capital Markets Funds,
Greenwich Street Series Fund, Smith Barney Adjustable Rate
Government Income Fund, Smith Barney Aggressive Growth Fund
Inc., Smith Barney Appreciation Fund Inc., Smith Barney Arizona
Municipals Fund Inc., Smith Barney California Municipals Fund
Inc., Smith Barney Concert Allocation Series Inc., Smith Barney
Equity Funds, Smith Barney Fundamental Value Fund Inc., Smith
Barney Funds, Inc., Smith Barney Income Funds, Smith Barney
Institutional Cash Management Fund, Inc., Smith Barney
Investment Funds Inc., Smith Barney Investment Trust, Smith
Barney Managed Governments Fund Inc., Smith Barney Managed
Municipals Fund Inc., Smith Barney Massachusetts Municipals
Fund, Smith Barney Muni Funds, Smith Barney Municipal Money
Market Fund, Inc., Smith Barney Natural Resources Fund Inc.,
Smith Barney New Jersey Municipals Fund Inc., Smith Barney
Oregon Municipals Fund Inc., Smith Barney Principal Return
Fund, Smith Barney Small Cap Blend Fund, Inc., Smith Barney
Telecommunications Trust, Smith Barney Variable Account Funds,
Smith Barney World Funds, Inc., Travelers Series Fund Inc., and
various series of unit investment trusts.
CFBDS also serves as the distributor for the following funds: The
Travelers Fund UL for Variable Annuities, The Travelers Fund VA for
Variable Annuities, The Travelers Fund BD for Variable Annuities, The
Travelers Fund BD II for Variable Annuities, The Travelers Fund BD III
for Variable Annuities, The Travelers Fund BD IV for Variable
Annuities, The Travelers Fund ABD for Variable Annuities, The Travelers
Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for
Variable Annuities, The Travelers Separate Account QP for Variable
Annuities, The Travelers Separate Account TM for Variable Annuities,
The Travelers Separate Account TM II for Variable Annuities, The
Travelers Separate Account Five for Variable Annuities, The Travelers
Separate Account Six for Variable Annuities, The Travelers Separate
Account Seven for Variable Annuities, The Travelers Separate Account
Eight for Variable Annuities, The Travelers Fund UL for Variable
Annuities, The Travelers Fund UL II for Variable Annuities, The
Travelers Variable Life Insurance Separate Account One, The Travelers
Variable Life Insurance Separate Account Two, The Travelers Variable
Life Insurance Separate Account Three, The Travelers Variable Life
Insurance Separate Account Four, The Travelers Separate Account MGA,
The Travelers Separate Account MGA II, The Travelers Growth and Income
Stock Account for Variable Annuities, The Travelers Quality Bond
Account for Variable Annuities, The Travelers Money Market Account for
Variable Annuities, The Travelers Timed Growth and Income Stock Account
for Variable Annuities, The Travelers Timed Short-Term Bond Account for
Variable Annuities, The Travelers Timed Aggressive Stock Account for
Variable Annuities, The Travelers Timed Bond Account for Variable
Annuities.
In addition, CFBDS, the Registrant's Distributor, is also the
distributor for CitiFunds Multi-State Tax Free Trust, CitiFunds
Premium Trust, CitiFunds Institutional Trust, CitiFunds Tax Free
Reserves, CitiFunds Trust I, CitiFunds Trust II, CitiFunds Trust
III, CitiFunds International Trust, CitiFunds Fixed Income Trust,
CitiSelect VIP Folio 200, CitiSelect VIP Folio 300, CitiSelect VIP
Folio 400, CitiSelect VIP Folio 500, CitiFunds Small Cap Growth
VIP Portfolio. CFBDS is also the placement agent for Large Cap
Value Portfolio, Small Cap Value Portfolio, International
Portfolio, Foreign Bond Portfolio, Intermediate Income Portfolio,
Short-Term Portfolio, Growth & Income Portfolio, U.S. Fixed Income
Portfolio, Large Cap Growth Portfolio, Small Cap Growth Portfolio,
International Equity Portfolio, Balanced Portfolio, Government
Income Portfolio, Tax Free Reserves Portfolio, Cash Reserves
Portfolio and U.S. Treasury Reserves Portfolio.
In addition, CFBDS is also the distributor for the following
Salomon Brothers funds: Salomon Brothers Opportunity Fund Inc.,
Salomon Brothers Investors Fund Inc., Salomon Brothers Capital
Fund Inc., Salomon Brothers Series Funds Inc., Salomon Brothers
Institutional Series Funds Inc., Salomon Brothers Variable Series
Funds Inc.
In addition, CFBDS is also the distributor for the Centurion
Funds, Inc.
(b) The information required by this Item 27 with respect to
each director and officer of CFBDS is incorporated by reference to
Schedule A of Form BD filed by CFBDS pursuant to the Securities
and Exchange Act of 1934 (File No. 8-32417).
(c) Not applicable.
Item 28. Location of Accounts and Records
PNC Bank, National Association, 17th and Chestnut Streets,
Philadelphia, Pennsylvania 19103, and First Data Investor
Services Group, Inc., 53 State Street, Boston,
Massachusetts 02109, will maintain the custodian and the
shareholders servicing agent records, respectively,
required by Section 31(a) of the 1940 Act.
All other records required by Section 31(a) are maintained
at the offices of the Registrant at 388 Greenwich Street,
New York, New York 10013 (and preserved for the periods
specified by Rule 31a-2) of the 1940 Act.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed
on its behalf by the undersigned, and where applicable, the true
and lawful attorney-in-fact, thereto duly authorized, in the City
of New York, and State of New York on the 1st day of March 1999.
SMITH BARNEY MONEY FUNDS, INC.
By: /s/ Heath B. McLendon
Heath B. McLendon
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on the
date indicated.
Signatures Title Date
/s/Heath B. McLendon Chairman of the Board, March 1, 1999
(Heath B. McLendon) President and Chief
Executive Officer
/s/Donald R. Foley* Director March 1, 1999
(Donald R. Foley)
/s/ Paul Hardin* Director March 1, 1999
(Paul Hardin)
/s/Roderick C. Rasmussen* Director March 1, 1999
(Roderick C. Rasmussen)
/s/John P. Toolan* Director March 1, 1999
(John P. Toolan)
/s/Lewis E. Daidone Treasurer (Principal March 1, 1999
(Lewis E. Daidone) Financial and
Accounting Officer)
*By: /s/ Christina T. Sydor March 1, 1999
Christina T. Sydor
Pursuant to Power of Attorney
EXHIBIT INDEX
Exhibit No. Exhibit
(a) (4) Certificate of Correction dated July 15, 1994
(5) Articles Supplementary to the Articles of
Incorporation dated July 19, 1994
(6) Articles of Amendment to Articles of
Incorporation dated November 3,1994
(7) Articles Supplementary to Articles of
Incorporation dated November 3, 1994
(8) Articles Supplementary to Articles of
Incorporation dated November 3,1994
(9) Articles Supplementary to Articles of
Incorporation dated January 16, 1996
(10) Articles Supplementary to Articles of
Incorporation dated January 30, 1998
(11) Articles of Amendment to Articles of
Incorporation dated June 1998
(b) (2) Restated By-Laws
(e) (2) Distribution Agreement
(m) (4) Form of Amended and Restated Plan pursuant
to Rule 12b-1
(o) (2) Plan pursuant to Rule 18f-3
SMITH BARNEY MONEY FUNDS, INC.
CERTIFICATE OF CORRECTION
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The title of the document being corrected is Articles
Supplementary.
SECOND: The name of the party to the document being corrected is
Smith Barney Money Funds, Inc.
THIRD: The date that the document being corrected was filed is
December 10, 1992.
FOURTH: The following provision of the Articles Supplementary is
hereby corrected as follows:
ARTICLE SECOND (a) of the Articles Supplementary which now reads
as follows:
"(a) The Government Portfolio series of the Common Stock shall
have three classes of shares, which shall be designated Class A, Class B
and Class C, each consisting, until further changed, of the lesser of
(x) 500,000,000 shares or (y) the number of shares that could be issued
by issuing all of the shares of Common Stock of that series less the
total number of shares of all classes of Common Stock of that series
then issued and outstanding."
is corrected to read as follows:
"(a) The Government Portfolio series of the Common Stock shall
have three classes of shares, which shall be designated Class A, Class B
and Class C, each consisting, until further changed, of the lesser of
(x) 2,000,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock of that series less
the total number of shares of all classes of Common Stock of that series
then issued and outstanding."
FIFTH: The execution of the Articles Supplementary was not
defective.
IN WITNESS WHEREOF, Smith Barney Money Funds, Inc. has caused
these presents to be signed in its name and on its behalf by its
Chairman of the Board and Chief Executive Officer and witnessed by its
Secretary on this July 15, 1994.
Witness: SMITH BARNEY MONEY FUNDS, INC.
/s/ Christina T. Sydor By: /s/ Stephen J.Treadway
Christina T. Sydor Stephen J. Treadway
Secretary Chairman of the Board
and Chief Executive Officer
THE UNDERSIGNED, the Chairman of the Board and Chief Executive
Officer of Smith Barney Money Funds, Inc. who executed on behalf of the
Corporation the foregoing Certificate of Correction, hereby acknowledges
in the name and on behalf of the Corporation the foregoing Certificate
of Correction to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein are true in all
material respects under the penalties of perjury.
/s/ Stephen J. Treadway
Stephen J. Treadway
Chairman of the Board
and Chief Executive Officer
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES SUPPLEMENTARY
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Taxation of Maryland that:
FIRST: Pursuant to the authority of the Board of Directors to
classify and reclassify unissued shares of Common Stock, the Board of
Directors has divided the Cash Portfolio series of the Common Stock of
the Corporation into Classes A, C, Y and Z and has provided for the
issuance of shares of such classes.
SECOND: The terms of the Common Stock as set by the Board of
Directors are as follows:
(a) The Cash Portfolio series of the Common Stock shall have
four classes of shares, which shall be designated Class A,
Class C, Class Y and Class Z, each consisting, until further
changed, of the lesser of (x) 4,000,000,000 shares or (y) the
number of shares that could be issued by issuing all of the
shares of Common Stock of that series less the total number
of shares of all other classes of Common Stock of that series
then issued and outstanding.
(b) All Classes of such series of Common Stock of the
Corporation shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation,
and other rights with any other shares of Common Stock of
that series; provided, however, that notwithstanding anything
in the charter of the Corporation to the contrary:
(1) The Class A Shares shall be subject to such front-end
sales loads as may be established by the Board of
Directors from time to time in accordance with the
Investment Company Act of 1940 (the "Investment Company
Act") and applicable rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD").
(2) The Class A and Class C Shares shall be subject to
such contingent deferred sales charges (which may differ
between Classes) as may be established from time to time
by the Board of Directors in accordance with the
Investment Company Act and applicable rules and
regulations of the NASD.
(3) The Class Y and Class Z Shares shall be subject to
such front-end sales loads or such contingent deferred
sales charges or both as may be established by the Board
of Directors from time to time in accordance with the
Investment Company Act and applicable rules and
regulations of the NASD and as disclosed in the then
current Prospectus.
(4) Expenses related solely to a particular Class of such
series (including, without limitation, distribution
expenses under a Rule 12b-1 plan and administrative
expenses under an administration or service agreement,
plan or other arrangement, however designated, which may
differ among the various Classes) shall be borne by that
Class and shall be appropriately reflected (in the manner
determined by the Board of Directors) in the net asset
value, dividends, distribution and liquidation rights of
the shares of that Class.
(5) At such time as may be determined by the Board of
Directors in accordance with the Investment Company Act
and applicable rules and regulations of the NASD and
reflected in the current registration statement relating
to such series, shares of a particular Class of such
series may be automatically converted into shares of
another Class; provided, however, that such conversion
shall be subject to the continuing availability of an
opinion of counsel to the effect that such conversion does
not constitute a taxable event under federal income tax
law and shall otherwise be in accordance with the
Investment Company Act. The Board of Directors, in its
sole discretion, may suspend any conversion rights if such
opinion is no longer available.
(6) As to any matter with respect to which a separate
vote of any Class is required by the Investment Company
Act or by the Maryland General Corporation Law (including,
without limitation, approval of any plan, agreement or
other arrangement referred to in subsection (3) above),
such requirement as to a separate vote by that Class shall
apply in lieu of single class voting, and, if permitted by
the Investment Company Act or any rules, regulations, or
order thereunder and the Maryland General Corporation Law,
the Classes of more than one series shall vote together as
a single Class on any such matter which shall have the
same effect on each such Class. As to any matter that
does not affect the interest of a particular Class, only
the holders of shares of the affected Classes shall be
entitled to vote.
THIRD: The Shares aforesaid have been duly classified by the Board
of Directors
pursuant to authority and power contained in the Charter of the
Corporation.
IN WITNESS WHEREOF, Smith Barney Money Funds, Inc. has caused these
presents to be signed in its name and on its behalf by its Chairman of
the Board and Chief Executive Officer and witnessed by its Secretary on
July 19, 1994.
WITNESS: SMITH BARNEY MONEY FUNDS, INC.
By:
Christina T. Sydor, Secretary Stephen J. Treadway,
Chairman of the Board and
Chief Executive Officer
THE UNDERSIGNED, Chairman of the Board and Chief Executive Officer
of Smith Barney Money Funds, Inc., who executed on behalf of the
Corporation Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation
the foregoing Articles Supplementary to be the corporate act of said
Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in
all material respects under the penalties of perjury.
Stephen J. Treadway,
Chairman of the Board and
Chief Executive Officer.
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES OF AMENDMENT
CHANGING NAME OF CLASSES
PURSUANT TO MGCL SECTION 2-605
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended to
provide as follows:
(A) The name and designation of the Class C Shares of the
Government Portfolio series of capital stock are hereby changed to Class
Y Shares of such series or portfolio.
(B) The name and designation of the Class B Shares of the
Government Portfolio series of capital stock are hereby changed to Class
C Shares of such series or portfolio.
SECOND: The amendment does not change the outstanding capital
stock of the Corporation or the aggregate par value thereof.
THIRD: The foregoing amendment to the Charter of the Corporation
has been approved by the Board of Directors and is limited to changes
expressly permitted by Section 2-605 of the Maryland General Corporation
Law.
FOURTH: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
IN WITNESS WHEREOF, the Corporation has caused these presents to
be signed in its name and on its behalf by its Chairman of the Board and
witnessed by its Secretary on this 3rd day of November, 1994.
Attest: SMITH BARNEY MONEY FUNDS, INC.
_________________________ By:
____________________________
Christina T. Sydor Stephen J. Treadway
Secretary Chairman of the Board
THE UNDERSIGNED, the Chairman of the Board of Smith Barney Money
Funds, Inc. who executed on behalf of the Corporation the foregoing
Articles of Amendment of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing
Articles
of Amendment to be the corporate act of the Corporation and hereby
certifies to the best of his knowledge, information and belief the
matters and facts set forth herein with respect to the authorization and
approval thereof are true in all material respects under the penalties
of perjury.
_____________________________
Stephen J. Treadway
Chairman of the Board
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES SUPPLEMENTARY
INCREASING AUTHORIZED STOCK
AS AUTHORIZED BY SECTION 2-105(c) OF
THE MARYLAND GENERAL CORPORATION LAW
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: In accordance with Section 2-105(c) of the Maryland
General Corporation Law, the Board of Directors has increased the
authorized capital stock of (1) the Cash Portfolio series of the
Corporation to 25,000,000,000 shares of Common Stock (par value $.01 per
share); (2) the Government Portfolio series of the Corporation to
10,000,000,000 shares of Common Stock (par value $.01 per share); and
(3) the Retirement Portfolio series of the Corporation to 5,000,000,000
shares of Common Stock (par value $.01 per share).
SECOND: (a) As of immediately before the increase the total
number of shares of stock of: (1) all classes which the Cash Portfolio
series of the Corporation has authority to issue is 4,000,000,000 shares
of Common Stock (par value $.01 per share); (2) all classes which the
Government Portfolio series of the Corporation has authority to issue is
2,000,000,000 shares of Common Stock (par value $.01 per share); and (3)
all classes which the Retirement Portfolio series of the Corporation has
authority to issue is 2,000,000,000 shares of Common Stock (par value
$.01 per share).
(b) As increased the total number of shares of stock of: (1) all
classes which the Cash Portfolio series of the Corporation has authority
to issue is 25,000,000,000 shares of Common Stock (par value $.01 per
share); (2) all classes which the Government Portfolio series of the
Corporation has authority to issue is 10,000,000,000 shares of Common
Stock (par value $.01 per share); and (3) all classes which the
Retirement Portfolio series of the Corporation has authority to issue is
5,000,000,000 shares of Common Stock (par value $.01 per share).
(c) The aggregate par value of: (1) all shares of the Cash
Portfolio having a par value is $40,000,000 before the increase and
$250,000,000 as increased; (2) all shares of the Government
Portfolio having a par value is $20,000,000 before the increase and
$100,000,000 as increased; and (3) all shares of the Retirement
Portfolio having a par value is $20,000,000 before the increase and
$50,000,000 as increased.
THIRD: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
IN WITNESS WHEREOF, the Corporation has caused these presents to
be signed in its name and on its behalf by its Chairman of the Board and
witnessed by its Secretary on this 3rd day of November, 1994.
Attest: SMITH BARNEY MONEY FUNDS, INC.
_________________________ By:
____________________________
Christina T. Sydor Stephen J. Treadway
Secretary Chairman of the Board
THE UNDERSIGNED, the Chairman of the Board of Smith Barney Money
Funds, Inc. who executed on behalf of the Corporation the foregoing
Articles Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing
Articles Supplementary to be the corporate act of the Corporation and
hereby certifies to the best of his knowledge, information and belief
the matters and facts set forth herein with respect to the authorization
and approval thereof are true in all material respects under the
penalties of perjury.
_____________________________
Stephen J. Treadway
Chairman of the Board
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES SUPPLEMENTARY
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: Pursuant to the authority of the Board of Directors to
classify and reclassify unissued shares of capital stock of the
Corporation, the Board of Directors has reclassified (1) a portion
of the authorized but unissued shares of capital stock of each of
the "Cash Portfolio" and the "Government Portfolio" into Class Y
shares of capital stock of such series or portfolios, (2) a portion
of the authorized but unissued shares of capital stock of each of
the "Cash Portfolio" and the "Government Portfolio" into Class Z
shares of capital stock of such series or portfolios and (3) a
portion of the authorized but unissued shares of capital stock of
the "Retirement Portfolio" into Class Y shares of capital stock of
such series or portfolio, in each case having the preferences,
conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions
of redemption of such shares as contained in the charter and as
supplemented by the provisions hereinafter set forth.
SECOND: All Classes of any series or portfolio of Common Stock of
the Corporation shall represent the same interest in the
Corporation and have identical preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemption as any other
shares of Common Stock of that series or portfolio; provided,
however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(1) The Class A shares, Class C shares, Class Y shares and
Class Z shares of each series or portfolio shall be subject
to such front-end sales loads or such contingent deferred
sales charges as may be established by the Board of Directors
from time to time in accordance with the Investment Company
Act of 1940 (the "Investment Company Act") and applicable
rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD") and set forth in the
then current prospectus for such shares;
(2) Expenses related solely to a particular Class of a series
or portfolio (including, without limitation, distribution
expenses under a Rule 12b-1 plan and administrative expenses
under an administration or service agreement, plan or other
arrangement, however designated, which may differ among the
various Classes) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by the
Board of Directors) in the net asset value, dividends,
distribution and liquidation of that Class;
(3) At such time as may be determined by the Board of
Directors in accordance with the Investment Company Act and
applicable rules and regulations of the NASD and reflected in
the current registration statement relating to a series or
portfolio, shares of a particular Class of a series or
portfolio may be automatically converted into shares of
another Class; provided, however, that such conversion shall
be subject to the continuing availability of an opinion of
counsel to the effect that such conversion does not
constitute a taxable event under federal income tax law and
shall otherwise be in accordance with the Investment Company
Act. The Board of Directors, in its sole discretion, may
suspend any conversion rights if such opinion is no longer
available; and
(4) As to any matter with respect to which a separate vote of
any Class is required by the Investment Company Act or by the
Maryland General Corporation Law (including without
limitation, approval of any plan, agreement or other
arrangement referred to in subsection (2) of this Article
SECOND), such requirement as to a separate vote by the Class
shall apply in lieu of single class voting, and, if permitted
by the Investment Company Act or any rules, regulations, or
order thereunder and the Maryland General Corporation Law,
the Classes of more than one series or portfolio shall vote
together as a single Class on any such matter which shall
have the same effect on each such Class. As to any matter
that does not affect the interest of a particular Class, only
the holders of shares of the affected Classes shall be
entitled to vote.
THIRD: After giving effect to the reclassification of shares
herein provided for, the Cash Portfolio has been divided into four
classes of shares, designated Class A, Class C, Class Y and Class
Z, and each consisting, until further changed, of the lesser of (x)
25,000,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock of that series
or portfolio less the total number of shares of all other classes
of Common Stock of that series or portfolio then issued and
outstanding.
FOURTH: After giving effect to the reclassification of shares
herein provided for, the Government Portfolio has been divided into
four classes of shares, designated Class A, Class C, Class Y and
Class Z, and each consisting, until further changed, of the lesser
of (x) 10,000,000,000 shares or (y) the number of shares that could
be issued by issuing all of the shares of Common Stock of that
series or portfolio less the total number of shares of all other
classes of Common Stock of that series or portfolio then issued and
outstanding.
FIFTH: After giving effect to the reclassification of shares
herein provided for, the Retirement Portfolio has been divided into
two classes of shares, designated Class A and Class Y, and each
consisting, until further changed, of the lesser of (x)
5,000,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock of that series
or portfolio less the total number of shares of all other classes
of Common Stock of that series or portfolio then issued and
outstanding.
SIXTH: These Articles Supplementary do not change the outstanding
capital stock of the Corporation or the aggregate par value
thereof.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Chairman of the Board and
witnessed by its Secretary on this 3rd day of November, 1994.
WITNESS: SMITH BARNEY MONEY FUNDS, INC.
By:
Christina T. Sydor Stephen J. Treadway
Secretary Chairman of the Board
THE UNDERSIGNED, the Chairman of the Board of Smith Barney Money
Funds, Inc., who executed on behalf of the Corporation the foregoing
Articles Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of the Corporation and
hereby certifies to the best of his knowledge, information and belief the
matters and facts set forth herein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
Stephen J. Treadway
Chairman of the Board
U:\sorrenti\sbm\artsupp.N94
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES SUPPLEMENTARY
INCREASING AUTHORIZED STOCK
AS AUTHORIZED BY SECTION 2-105(c) OF
THE MARYLAND GENERAL CORPORATION LAW
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
SECOND: In accordance with Section 2-105(c) of the Maryland
General Corporation Law, the Board of Directors has increased the
authorized capital stock of the Corporation to 55,000,000,000 shares of
Common Stock (par value $.01 per share).
THIRD: (a) As of immediately before the increase the total number
of shares of stock of all classes which the Corporation had authority to
issue was 40,000,000,000 shares, of which no shares were Preferred Stock
and 40,000,000,000 shares were Common Stock (par value $.01 per share),
divided into three series designated as the Cash Portfolio series, the
Government Portfolio series and the Retirement Portfolio series. The
Cash Portfolio series consisted of four classes of shares, designated
Class A, Class C, Class Y and Class Z, each such class consisting, until
further changed, of the lesser of (x) 25,000,000,000 shares or (y) the
number of shares that could be issued by issuing all of the shares of
Common Stock of that series or portfolio less the total number of shares
of all other classes of Common Stock of that series or portfolio then
issued and outstanding. The Government Portfolio series consisted of
four classes of shares, designated Class A, Class C, Class Y and Class Z
shares, each such class consisting, until further changed, of the lesser
of (x) 10,000,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock of that series or
portfolio less the total number of shares of all other classes of Common
Stock of that series or portfolio then issued and outstanding. The
Retirement Portfolio series consisted of two classes of shares,
designated Class A and Class Y shares, each such class consisting, until
further changed, of the lesser of (x) 5,000,000,000 shares or (y) the
number of shares that could be issued by issuing all of the shares of
Common Stock of that series or portfolio less the total number of shares
of all other classes of Common Stock of that series or portfolio then
issued and outstanding.
(b) As increased the total number of shares of stock of all
classes which the Corporation has authority to issue is 55,000,000,000
shares, of which no shares are Preferred Stock and 55,000,000,000 shares
are Common Stock (par value $.01 per share), which shall consist, until
further changed of the Cash Portfolio series, the Government Portfolio
series and the Retirement Portfolio series. The Cash Portfolio series
consists of four classes of shares, designated Class A, Class C, Class Y
and Class Z, each such class consisting, until further changed, of the
lesser of (x) 40,000,000,000 shares or (y) the number of shares that
could be issued by issuing all of the shares of Common Stock of that
series or portfolio less the total number of shares of all other classes
of Common Stock of that series or portfolio then issued and outstanding.
The Government Portfolio series consists of four classes of shares,
designated Class A, Class C, Class Y and Class Z shares, each such class
consisting, until further changed, of the lesser of (x) 10,000,000,000
shares or (y) the number of shares that could be issued by issuing all of
the shares of Common Stock of that series or portfolio less the total
number of shares of all other classes of Common Stock of that series or
portfolio then issued and outstanding. The Retirement Portfolio series
consists of two classes of shares, designated Class A and Class Y shares,
each such class consisting, until further changed, of the lesser of (x)
5,000,000,000 shares or (y) the number of shares that could be issued by
issuing all of the shares of Common Stock of that series or portfolio
less the total number of shares of all other classes of Common Stock of
that series or portfolio then issued and outstanding.
(c) The aggregate par value of all shares of the Corporation
having a par value is $400,000,000 before the increase and $550,000,000
as increased.
FOURTH: The terms of the Class A, Class C, Class Y and Class Z
shares of the Cash Portfolio series are set forth in the Charter of the
Corporation. The terms of the Class A, Class C, Class Y and Class Z
shares of the Government Portfolio series are set forth in the Charter of
the Corporation. The terms of the Class A and Class Y shares of the
Retirement Portfolio series are set forth in the Charter of the
Corporation.
IN WITNESS WHEREOF, Smith Barney Money Funds, Inc. has caused
these presents to be signed in its name and on its behalf by its Chairman
of the Board and witnessed by its Secretary on this 17th day of January,
1996.
Attest: SMITH BARNEY MONEY FUNDS, INC.
_________________________ By:
____________________________
Christina T. Sydor Heath B. McLendon
Secretary Chairman of the Board
THE UNDERSIGNED, the Chairman of the Board of Smith Barney Money
Funds, Inc. who executed on behalf of the Corporation the foregoing
Articles Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing
Articles Supplementary to be the corporate act of the Corporation and
hereby certifies to the best of his knowledge, information and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
_____________________________
Heath B. McLendon
Chairman of the Board
g:\funds\smfi\misc\artsupp.J96
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES SUPPLEMENTARY
INCREASING AUTHORIZED STOCK
AS AUTHORIZED BY SECTION 2-105(c) OF
THE MARYLAND GENERAL CORPORATION LAW
Smith Barney Money Funds, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
SECOND: In accordance with Section 2-105(c) of the Maryland
General Corporation Law, the Board of Directors has increased the
authorized capital stock of the Corporation to 65,000,000,000 shares of
Common Stock (par value $.01 per share).
THIRD: (a) As of immediately before the increase the total number
of shares of stock of all classes which the Corporation had authority to
issue was 55,000,000,000 shares, of which no shares were Preferred Stock
and 55,000,000,000 shares were Common Stock (par value $.01 per share),
divided into three series designated as the Cash Portfolio series, the
Government Portfolio series and the Retirement Portfolio series. The
Cash Portfolio series consisted of four classes of shares, designated
Class A, Class C, Class Y and Class Z, each such class consisting, until
further changed, of the lesser of (x) 40,000,000,000 shares or (y) the
number of shares that could be issued by issuing all of the shares of
Common Stock of that series or portfolio less the total number of shares
of all other classes of Common Stock of that series or portfolio then
issued and outstanding. The Government Portfolio series consisted of
four classes of shares, designated Class A, Class C, Class Y and Class Z
shares, each such class consisting, until further changed, of the lesser
of (x) 10,000,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock of that series or
portfolio less the total number of shares of all other classes of Common
Stock of that series or portfolio then issued and outstanding. The
Retirement Portfolio series consisted of two classes of shares,
designated Class A and Class Y shares, each such class consisting, until
further changed, of the lesser of (x) 5,000,000,000 shares or (y) the
number of shares that could be issued by issuing all of the shares of
Common Stock of that series or portfolio less the total number of shares
of all other classes of Common Stock of that series or portfolio then
issued and outstanding.
(b) As increased the total number of shares of stock of all
classes which the Corporation has authority to issue is 65,000,000,000
shares, of which no shares are Preferred Stock and 65,000,000,000 shares
are Common Stock (par value $.01 per share), which shall consist, until
further changed, of the Cash Portfolio series, the Government Portfolio
series and the Retirement Portfolio series. The Cash Portfolio series
consists of four classes of shares, designated Class A, Class C, Class Y
and Class Z, each such class consisting, until further changed, of the
lesser of (x) 50,000,000,000 shares or (y) the number of shares that
could be issued by issuing all of the shares of Common Stock of that
series or portfolio less the total number of shares of all other classes
of Common Stock of that series or portfolio then issued and outstanding.
The Government Portfolio series consists of four classes of shares,
designated Class A, Class C, Class Y and Class Z shares, each such class
consisting, until further changed, of the lesser of (x) 10,000,000,000
shares or (y) the number of shares that could be issued by issuing all of
the shares of Common Stock of that series or portfolio less the total
number of shares of all other classes of Common Stock of that series or
portfolio then issued and outstanding. The Retirement Portfolio series
consists of two classes of shares, designated Class A and Class Y shares,
each such class consisting, until further changed, of the lesser of (x)
5,000,000,000 shares or (y) the number of shares that could be issued by
issuing all of the shares of Common Stock of that series or portfolio
less the total number of shares of all other classes of Common Stock of
that series or portfolio then issued and outstanding.
(c) The aggregate par value of all shares of the Corporation
having a par value is $550,000,000 before the increase and $650,000,000
as increased.
FOURTH: The terms of the Class A, Class C, Class Y and Class Z
shares of the Cash Portfolio series are set forth in the Charter of the
Corporation. The terms of the Class A, Class C, Class Y and Class Z
shares of the Government Portfolio series are set forth in the Charter of
the Corporation. The terms of the Class A and Class Y shares of the
Retirement Portfolio series are set forth in the Charter of the
Corporation.
IN WITNESS WHEREOF, Smith Barney Money Funds, Inc. has caused
these presents to be signed in its name and on its behalf by its
President and witnessed by its Secretary on this 30th day of January,
1998.
Attest: SMITH BARNEY MONEY FUNDS, INC.
_________________________ By:
____________________________
Christina T. Sydor Heath B. McLendon
Secretary President
THE UNDERSIGNED, the President of Smith Barney Money Funds, Inc.
who executed on behalf of the Corporation the foregoing Articles
Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing
Articles Supplementary to be the corporate act of the Corporation and
hereby certifies to the best of his knowledge, information and belief the
matters and facts set forth therein with respect, to the authorization
and approval thereof are true in all material respects under the
penalties of perjury.
_____________________________
Heath B. McLendon
President
u:legal\funds\smfi\orgdocs\artsupp.J98 3
SMITH BARNEY MONEY FUNDS, INC.
ARTICLES OF AMENDMENT
Smith Barney Money Funds, Inc., a Maryland corporation, having
its principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended to provide as follows:
The name and designation of the Class C shares of the Cash Portfolio and
Government Portfolio series of capital stock of the Corporation is hereby
changed to the Class L shares of each such series.
SECOND: The amendment does not change the outstanding capital stock
of the Corporation or the aggregate par value thereof.
THIRD: The foregoing amendment to the Charter of the Corporation has
been approved by the Board of Directors and is limited to a change
expressly permitted by Section 2-605 of the Maryland General Corporation Law.
FOURTH: The Corporation is registered as an open-end management
investment company under the Investment Company Act of 1940.
FIFTH: The amendment to the Charter of the Corporation effected hereby
shall become effective at 9:00 a.m. on June 12, 1998.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its President and witnessed by
its Secretary on this ___ day of June, 1998.
SMITH BARNEY MONEY FUNDS, INC.
By:________________________
Name: Heath B. McLendon
Title: President
ATTEST:
_________________________
Name: Christina T. Sydor
Title: Secretary
THE UNDERSIGNED, the President of Smith Barney Money Funds, Inc.,
who executed on behalf of the Corporation the foregoing Articles of
Amendment of which this certificate is made a part, hereby acknowledges in
the name and on behalf of the Corporation the foregoing Articles of
Amendment to be the corporate act of the Corporation and hereby certifies
to the best of his knowledge, information and belief the matters and facts
set forth herein with respect to the authorization and approval thereof are
true in all material respects under the penalties of perjury.
__________________________
Name: Heath B. McLendon
Title: President
??
??
(Footnote continued from previous page)
(Footnote continued to next page)
- - 3 -
As amended through 3/3/95
and restated as of 9/10/97
SMITH BARNEY MONEY FUNDS, INC.
(formerly NATIONAL LIQUID RESERVES, INC.)
* * * * *
B Y - L A W S
* * * * *
ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of
Baltimore, State of Maryland.
Section 2. The corporation may also have offices at such other
places both within and without the state of Maryland as the board of
directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of stockholders shall be held at the
office of the corporation in New York City, State of New York. Meetings
may be held at the principal office in this State or at such other place
within the United States as designated in the by-laws or fixed by the
Board of Directors pursuant to the by-laws.
Section 2. Annual Meeting. The annual meeting of stockholders
of the Corporation for the election of directors and for the transaction
of such other business as may properly be brought before the meeting
shall be held on such day in each year as shall be designated annually
by the Board of Directors; provided however, that an annual meeting of
stockholders shall not be required to be held in any year in which none
of the following is required to be acted on by stockholders pursuant to
the Investment Company Act of 1940: election of directors; approval of
the management agreement; ratification of the selection of independent
public accountants; and approval of a distribution agreement.
Section 3. At any time in the interval between annual meetings
special meetings of the stockholders may be called by the board of
directors, or by the president, a vice-president, the secretary, or an
assistant secretary.
Section 4. Special meetings of stockholders shall be called by
the secretary upon the written request of the holders of shares entitled
to not less than twenty-five percent of all the votes entitled to be
cast at such meeting. Such request shall state the purpose or purposes
of such meeting and the matters proposed to be acted on thereat. The
secretary shall inform such stockholders of the reasonably estimated
cost of preparing and mailing such notice of the meeting, and upon
payment to the corporation of such costs the secretary shall give notice
stating the purpose or purposes of the meeting to all stockholders
entitled to vote at such meeting. No special meeting need be called
upon the request of the holders of shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting, to consider
any matter which is substantially the same as a matter voted upon at any
special meeting of the stockholders held during the preceding twelve
months.
Section 5. Not less than ten nor more than ninety days before
the date of every stockholders' meeting, the secretary shall give to
each stockholder entitled to vote at such meeting, and to each
stockholder not entitled to vote who is entitled by statute to notice,
written or printed notice stating the time and place of the meeting and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called, either by mail or by presenting it to him personally
or by leaving it at his residence or usual place of business. If
mailed, such notice shall be deemed to be given when deposited in the
United States mail addressed to the stockholder at his post-office
address as it appears on the records of the corporation, with postage
thereon prepaid.
Section 6. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 7. At any meeting of stockholders the presence in person
or by proxy of stockholders entitled to cast a majority of the votes
thereat shall constitute a quorum; but this section shall not affect any
requirement under the statute or under the charter for the vote
necessary for the adoption of any measure.
Section 8. A majority of the votes cast at a meeting of
stockholders, duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may
properly come before the meeting, unless more than a majority of the
votes cast is required by the statute or by the charter.
Section 9. Each outstanding share of stock having voting power
shall be entitled to one vote on each matter submitted to vote at a
meeting of stockholders; but no share shall be entitled to vote if any
installment payable thereon is overdue and unpaid. A stockholder may
vote the shares owned of record by him either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven months from its
date, unless otherwise provided in the proxy. At all meetings of
stockholders, unless the voting is conducted by inspectors, all
questions relating to the qualification of voters and the validity of
proxies and the acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 10. A meeting of stockholders convened on the date for
which it was called may be adjourned as permitted by Maryland Law. If a
quorum shall not be present or represented at such meeting of
stockholders, a majority of the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn
the meeting. At any adjourned session of a meeting which a quorum shall
be present or represented any business may be transacted that might have
been transacted at the meeting as originally noticed.
Section 11. Any action required or permitted to be taken at any
meeting of stockholders may be taken without a meeting, if a consent in
writing, setting forth such action, is signed by all the stockholders
entitled to vote on the subject matter thereof and any other
stockholders entitled to notice of a meeting of stockholders (but not to
vote thereat) have waived in writing any rights which they may have to
dissent from such action, and such consent and waiver are filed with the
records of the corporation.
ARTICLE III
DIRECTORS
Section 1. The number of directors of the corporation shall be
ten. By vote of a majority of the entire board of directors, the number
of directors fixed by the charter or by these by-laws may be increased
or decreased from time to time not exceeding 15 nor less than 3, but the
tenure of office of a director shall not be affected by any decrease in
the number of directors so made by the board. Until the first annual
meeting of stockholders or until successors are duly elected and
qualify, the board shall consist of the persons named as such in the
charter. At the first annual meeting of stockholders and at each annual
meeting thereafter, the stockholders shall elect directors to hold
office until the next annual meeting or until their successors are
elected and qualify. Directors need not be stockholders in the
corporation.
Section 2. Any vacancy occurring in the board of directors for
any cause other than by reason of an increase in the number of directors
may be filled by a majority of the remaining members of the board of
directors, although such majority is less than a quorum. Any vacancy
occurring by reason of an increase in the number of directors may be
filled by action of a majority of the entire board of directors. A
director elected by the board of directors to fill a vacancy shall be
elected to hold office until the next annual meeting of stockholders or
until his successor is elected and qualifies.
Section 3. The business and affairs of the corporation shall be
managed by its board of directors, which may exercise all of the powers
of the corporation, except such as are by law or by the charter or by
these by-laws conferred upon or reserved to the stockholders.
Section 4. At any meeting of stockholders, duly called and at
which a quorum is present, the stockholders may, by the affirmative vote
of the holders of a majority of the votes entitled to be cast thereon,
remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. Meetings of the board of directors, regular or
special, may be held at any place in or out of the State of Maryland as
the board may from time to time determine.
Section 6. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the
vote of the stockholders at the annual meeting, and no notice of such
meeting shall be necessary to the newly elected directors in order
legally to constitute the meeting, provided a quorum shall be present.
In the event of the failure of the stockholders to fix the time or place
of such first meeting of the newly elected board of directors, or in the
event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings
of the board of directors, or as shall be specified in a written waiver
signed by all of the directors.
Section 7. Regular meetings of the board of directors may be
held without notice at such time and place as shall from time to time be
determined by the board of directors.
Section 8. Special meetings of the board of directors may be
called at any time by the board of directors or the executive committee,
if one be constituted, by vote at a meeting, or by the president or by a
majority of the directors or a majority of the members of the executive
committee in writing with or without a meeting. Special meetings may be
held at such place or places within or without Maryland as may be
designated from time to time by the board of directors; in the absence
of such designation such meeting shall be held at such places as may be
designated in the call.
Section 9. Notice of the place and time of every special meeting
of the board of directors shall be served on each director or sent to
him by telegraph or by mail, or by leaving the same at his residence or
usual place of business at least two days before the date of the
meeting. If mailed, such notice shall be deemed to be given when
deposited in the United States mail addressed to the director at his
post-office address as it appears on the records of the corporation,
with postage thereon prepaid.
Section 10. At all meetings of the board a majority of the
entire board of directors shall constitute a quorum for the transaction
of business and the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of the board of
directors unless the concurrence of a greater proportion is required for
such action by statute, the articles of incorporation or these by-laws.
If a quorum shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 11. Any action required or permitted to be taken at any
meeting of the board of directors or of any committee thereof may be
taken without a meeting, if a written consent to such action is signed
by all members of the board or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings of the
board or committee.
COMMITTEES OF DIRECTORS
Section 12. The board of directors may appoint from among its
members an executive committee and other committees composed of two or
more directors, and may delegate to such committees, in the intervals
between meetings of the board of directors, any or all of the powers of
the board of directors in the management of the business and affairs of
the corporation, except the power to declare dividends, to issue stock
or to recommend to stockholders any action requiring stockholders'
approval. In the absence of any member of any such committee, the
members thereof present at any meeting, whether or not they constitute a
quorum, may appoint a member of the board of directors to act in the
place of such absent members.
Section 13. The committees shall keep minutes of their
proceedings and shall report the same to the board of directors at the
meeting next succeeding, and any action by the committees shall be
subject to revision and alteration by the board of directors, provided
that no rights of third persons shall be affected by any such revision
or alteration.
COMPENSATION OF DIRECTORS
Section 14. Directors may receive compensation for services to
the corporation in their capacities as directors or otherwise in such
manner and in such amounts as may be fixed from
time to time by the board of directors.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or
stockholders at their addresses appearing on the books of the
corporation. Notice by mail shall be deemed to be given at the time
when the same shall be mailed. In the case of stockholders' meetings
the notice may be left at the stockholders residence or usual place of
business. Notice to directors may also be given by telegram.
Section 2. Whenever any notice of the time, place or purpose of
any meeting of stockholders, directors or committee is required to be
given under the provisions of the statute or under the provisions of the
charter or these bylaws, a waiver thereof in writing, signed by the
person or persons entitled to such notice and filed with the records of
the meeting, whether before or after the holding thereof, or actual
attendance at the meeting stockholders in person or by proxy or at the
meeting of directors or committee in person, shall be deemed equivalent
to the giving of such notice to such persons.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the board of directors and shall be a president, a vice-president, a
secretary and a treasurer. The president shall be selected from among
the directors. The board of directors may also choose additional vice-
presidents, and one or more assistant secretaries and assistant
treasurers. Two or more offices, except those of president and vice-
president, may be held by the same person but no officer shall execute,
acknowledge or verify any instrument in more than one capacity, if such
instrument is required by law, the charter or these by-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president from among
the directors, and shall choose one or more vice-presidents, a secretary
and a treasurer, none of whom need be a member of the board.
Section 3. The board of directors may appoint such other
officials and agents as it shall deem necessary, who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall serve for one
year and until their successors are chosen and qualify. Any officer or
agent may be removed by the board of directors whenever, in its
judgment, the best interests of the corporation will be served thereby,
but such removal shall be without prejudice to the contractual rights,
if any, of the person so removed. If the office of any officer becomes
vacant for any reason, the vacancy shall be filled by the board of
directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of
the corporation; he shall preside at all meetings of the stockholders
and directors, shall have general and active management of the business
of the corporation, and shall see that all orders and resolutions of the
board are carried into effect.
Section 7. He shall execute in the corporate name all authorized
deeds, mortgages, bonds, contracts or other instruments requiring a
seal, under the seal of the corporation, except in cases in which the
signing or execution thereof shall be expressly delegated by the board
of directors to some other officer or agent of the corporation.
VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than
one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president, perform
the duties and exercise the powers of the president, and shall perform
such other duties and have such other powers as the board of directors
may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board
of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors, and shall perform such other
duties as may be prescribed by the board of directors or president,
under whose supervision he shall be. He shall keep in safe custody the
seal of the corporation and, when authorized by the board of directors,
affix the same to any instrument requiring it and, when so affixed, it
shall be attested by this signature or by the signature of an assistant
secretary.
Section 10. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the board of
directors, shall, in the absence or disability of the secretary, perform
the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors
may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and
shall deposit all moneys and other valuable effects in the name and to
the credit of the corporation in such depositories as may be designated
by the board of directors.
Section 12. He shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for
such disbursements, and shall render to the president and the board of
directors, at its regular meetings, or when the board of directors so
requires an account of all his transactions as treasurer and of the
financial condition of the corporation.
Section 13. If required by the board of directors, he shall give
the corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the board for the faithful performance of the
duties of his office and for the restoration to the corporation, in case
of his death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in
his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board
of directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall
perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Each stockholder shall be entitled to a certificate
or certificates which shall represent and certify the number and kind of
class of shares owned by him in the corporation. Each certificate shall
be signed by the president or a vice-president and countersigned by the
secretary or an assistant secretary or the treasurer or an assistant
treasurer or an assistant treasurer and may be sealed with the corporate
seal.
Section 2. The signatures may be either manual or facsimile
signatures and the seal may be either facsimile or any other form of
seal. In case any officer who as signed any certificate ceases to be an
officer of the corporation before the certificates is issued, the
certificate may nevertheless be issued by corporation with the same
effect as if the officer had not ceased to be such officer as of the
date of its issue. Every certificate representing stock issued by a
corporation which is authorized to issue stock of more than one class
shall set forth upon the face or back of the certificate, a full
statement or summary of the designations, preferences, limitations, and
relative rights of the shares of each class authorized to be issued and,
if the corporation is authorized to issue any preferred or special class
in series, the variations in the relative rights and preferences between
the shares of each such series so far as the same have been fixed and
determined and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series. A
summary of such information included in a registration statement
permitted to become effective under the Federal Securities Act of 1933,
as now or hereafter amended, shall be acceptable summary for the
purposes of this section. In lieu of such full statement or summary,
there may be set forth upon the face or back of the certificate a
statement that the corporation will furnish to any stockholder upon
request and without charge, a full statement of such information. Every
certificate representing shares which are restricted or limited as to
transferability by the corporation issuing such shares shall either (i)
set forth upon the face or back of the certificate a full statement of
such restriction or limitation or (ii) state that the corporation will
furnish such a statement upon request and without charge to any holder
of such shares. No certificate shall be issued for any share of stock
until such share is full [sic] paid.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been stolen, lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be stolen, lost or destroyed. When
authorizing such issue of a new certificate or certificates, the board
of directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such stolen, lost or destroyed
certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and to give the corporation
a bond, with sufficient surety, to the corporation to indemnify it
against any loss or claim which may arise by reason of the issuance of a
new certificate.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
RECORD DATE
Section 5. The board of directors may fix, in advance, a date as
the record date for the purpose of determining stockholders entitled to
notice of, or to vote at, any meeting of stockholders, or stockholders
entitled to receive payment of any dividend or the allotment of any
rights, or in order to make a determination of stockholders for any
other proper purpose. Such date, in any case, shall be not more than
sixty days, and in case of a meeting of stockholders not less than ten
days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Maryland.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the articles of incorporation, if any, may
be declared by the board of directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in its
own shares, subject to the provisions of the statute and of the articles
of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property the
corporation, or for such other purpose as the directors shall think
conducive to the interests of the corporation, and the directors may
modify or abolish any such reserve in the manner in which it was
created.
ANNUAL STATEMENT
Section 3. The president or a vice-president or the treasurer
shall prepare or cause to be prepared annually a full and correct
statement of the affairs of the corporation, including a balance sheet
and a financial statement of operations for the preceding fiscal year,
which shall be submitted at the annual meeting and shall be filed within
twenty days filed within twenty days thereafter at the principal office
of the corporation in the State of Maryland.
CHECKS
Section 4. All checks, drafts, and orders for the payment of
money, notes and other evidences of indebtedness, issued in the name of
the corporation shall be signed by such officer or officers as the board
of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words
"Corporate Seal, Maryland." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
STOCK LEDGER
Section 7. The corporation shall maintain at Provident Financial
Processing Corporation, Wilmington, Delaware an original stock ledger
containing the names and addresses of all stockholders and the number of
shares of each class held by each stockholder. Such stock ledger may be
in written form or any other form capable of being converted into
written form within a reasonable time for visual inspection.
ARTICLE VIII
AMENDMENTS
Section 1. The board of directors shall have the power, at any
regular meeting or at any special meeting if notice thereof be included
in the notice of such special meeting, to alter or repeal any by-laws of
the corporation and to make new by-laws, except that the board of
directors shall not alter or repeal any by-laws made by the
stockholders.
Section 2. The stockholders shall have the power, at any annual
meeting or at any special meeting if notice thereof be included in the
notice of such special meeting, to alter or repeal any by-laws of the
corporation and to make new by-laws.
14
u:\legal\funds\smfi\orgdocs\By-laws
SMITH BARNEY MONEY FUNDS, INC.
DISTRIBUTION AGREEMENT
October 8, 1998
CFBDS, Inc.
21 Milk Street
Boston, MA 02109
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the above-named investment company (the "Fund")
has agreed that you shall be, for the period of this Agreement, the non-
exclusive principal underwriter and distributor of shares of the Fund and
each Series of the Fund set forth on Exhibit A hereto, as such Exhibit
may be revised from time to time (each, including any shares of the Fund
not designated by series, a "Series"). For purposes of this Agreement,
the term "Shares" shall mean shares of the each Series, or one or more
Series, as the context may require.
1. Services as Principal Underwriter and Distributor
1.1 You will act as agent for the distribution of Shares
covered by, and in accordance with, the registration statement,
prospectus and statement of additional information then in effect under
the Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended (the "1940 Act"), and will
transmit or cause to be transmitted promptly any orders received by you
or those with whom you have sales or servicing agreements for purchase or
redemption of Shares to the Transfer and Dividend Disbursing Agent for
the Fund of which the Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit orders for
the sale of Shares. It is contemplated that you will enter into sales or
servicing agreements with registered securities dealers and banks and
into servicing agreements with financial institutions and other industry
professionals, such as investment advisers, accountants and estate
planning firms. In entering into such agreements, you will act only on
your own behalf as principal underwriter and distributor. You will not
be responsible for making any distribution plan or service fee payments
pursuant to any plans the Fund may adopt or agreements it may enter into.
1.3 You shall act as principal underwriter and distributor
of Shares in compliance with all applicable laws, rules, and regulations,
including, without limitation, all rules and regulations made or adopted
from time to time by the Securities and Exchange Commission (the "SEC")
pursuant to the 1933 Act or the 1940 Act or by any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted for
any reason, including, without limitation, market, economic or political
conditions, the Fund's officers may decline to accept any orders for, or
make any sales of, any Shares until such time as those officers deem it
advisable to accept such orders and to make such sales and the Fund shall
advise you promptly of such determination.
2. Duties of the Fund
2.1 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the 1933 Act, and all
expenses in connection with maintaining facilities for the issue and
transfer of Shares and for supplying information, prices and other data
to be furnished by the Fund hereunder, and all expenses in connection
with the preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and for
distribution to shareholders; provided however, that nothing contained
herein shall be deemed to require the Fund to pay any of the costs of
advertising or marketing the sale of Shares.
2.2 The Fund agrees to execute any and all documents and to
furnish any and all information and otherwise to take any other actions
that may be reasonably necessary in the discretion of the Fund's officers
in connection with the qualification of Shares for sale in such states
and other U.S. jurisdictions as the Fund may approve and designate to you
from time to time, and the Fund agrees to pay all expenses that may be
incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a securities broker or
dealer under state or Federal laws and, except as otherwise specifically
provided in this Agreement, all other expenses incurred by you in
connection with the sale of Shares as contemplated in this Agreement.
2.3 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information reports with respect
to the Fund or any relevant Series and the Shares as you may reasonably
request, all of which shall be signed by one or more of the Fund's duly
authorized officers; and the Fund warrants that the statements contained
in any such reports, when so signed by the Fund's officers, shall be true
and correct. The Fund also shall furnish you upon request with (a) the
reports of annual audits of the financial statements of the Fund for each
Series made by independent certified public accountants retained by the
Fund for such purpose; (b) semi-annual unaudited financial statements
pertaining to each Series; (c) quarterly earnings statements prepared by
the Fund; (d) a monthly itemized list of the securities in each Series'
portfolio; (e) monthly balance sheets as soon as practicable after the
end of each month; (f) the current net asset value and offering price
per share for each Series on each day such net asset value is computed
and (g) from time to time such additional information regarding the
financial condition of each Series of the Fund as you may reasonably
request.
3. Representations and Warranties
The Fund represents to you that all registration statements,
prospectuses and statements of additional information filed by the Fund
with the SEC under the 1933 Act and the 1940 Act with respect to the
Shares have been prepared in conformity with the requirements of said
Acts and the rules and regulations of the SEC thereunder. As used in
this Agreement, the terms "registration statement", "prospectus" and
"statement of additional information" shall mean any registration
statement, prospectus and statement of additional information filed by
the Fund with the SEC and any amendments and supplements thereto filed by
the Fund with the SEC. The Fund represents and warrants to you that any
registration statement, prospectus and statement of additional
information, when such registration statement becomes effective and as
such prospectus and statement of additional information are amended or
supplemented, will include at the time of such effectiveness, amendment
or supplement all statements required to be contained therein in
conformance with the 1933 Act, the 1940 Act and the rules and regulations
of the SEC; that all statements of material fact contained in any
registration statement, prospectus or statement of additional information
will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus
or statement of additional information when such registration statement
becomes effective will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading to a purchaser of the
Fund's Shares. The Fund may, but shall not be obligated to, propose from
time to time such amendment or amendments to any registration statement
and such supplement or supplements to any prospectus or statement of
additional information as, in the light of future developments, may, in
the opinion of the Fund, be necessary or advisable. If the Fund shall
not propose such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this Agreement or
decline to make offers of the Fund's Shares until such amendments are
made. The Fund shall not file any amendment to any registration
statement or supplement to any prospectus or statement of additional
information without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this Agreement shall in any
way limit the Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement
of additional information, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and unconditional.
4. Indemnification
4.1 The Fund authorizes you to use any prospectus or
statement of additional information furnished by the Fund from time to
time, in connection with the sale of Shares. The Fund agrees to
indemnify, defend and hold you, your several officers and directors, and
any person who controls you within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any such counsel fees
incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the 1933 Act or under
common law or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in
any registration statement, any prospectus or any statement of additional
information or arising out of or based upon any omission, or alleged
omission, to state a material fact required to be stated in any
registration statement, any prospectus or any statement of additional
information or necessary to make the statements in any of them not
misleading; provided, however, that the Fund's agreement to indemnify
you, your officers or directors, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or expenses
arising out of any statements or representations made by you or your
representatives or agents other than such statements and representations
as are contained in any prospectus or statement of additional information
and in such financial and other statements as are furnished to you
pursuant to paragraph 2.3 of this Agreement; and further provided that
the Fund's agreement to indemnify you and the Fund's representations and
warranties herein before set forth in paragraph 3 of this Agreement shall
not be deemed to cover any liability to the Fund or its shareholders to
which you would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of your duties, or by
reason of your reckless disregard of your obligations and duties under
this Agreement. The Fund's agreement to indemnify you, your officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person, such
notification to be given by letter or by telegram addressed to the Fund
at its principal office in New York, New York and sent to the Fund by the
person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. The failure
so to notify the Fund of any such action shall not relieve the Fund from
any liability that the Fund may have to the person against whom such
action is brought by reason of any such untrue, or alleged untrue,
statement or omission, or alleged omission, otherwise than on account of
the Fund's indemnity agreement contained in this paragraph 4.1. The Fund
will be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, such defense shall be
conducted by counsel of good standing chosen by the Fund. In the event
the Fund elects to assume the defense of any such suit and retains
counsel of good standing, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of
them; but if the Fund does not elect to assume the defense of any such
suit, the Fund will reimburse you, your officers and directors, or the
controlling person or persons named as defendant or defendants in such
suit, for the fees and expenses of any counsel retained by you or them.
The Fund's indemnification agreement contained in this paragraph 4.1 and
the Fund's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of you, your officers and directors, or any
controlling person, and shall survive the delivery of any of the Fund's
Shares. This agreement of indemnity will inure exclusively to your
benefit, to the benefit of your several officers and directors, and their
respective estates, and to the benefit of the controlling persons and
their successors. The Fund agrees to notify you promptly of the
commencement of any litigation or proceedings against the Fund or any of
its officers or Board members in connection with the issuance and sale of
any of the Fund's Shares.
4.2 You agree to indemnify, defend and hold the Fund, its
several officers and Board members, and any person who controls the Fund
within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the costs of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith)
that the Fund, its officers or Board members or any such controlling
person may incur under the 1933 Act, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the
Fund, its officers or Board members, or such controlling person resulting
from such claims or demands shall arise out of or be based upon (a) any
unauthorized sales literature, advertisements, information, statements or
representations or (b) any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing by you to the
Fund and used in the answers to any of the items of the registration
statement or in the corresponding statements made in the prospectus or
statement of additional information, or shall arise out of or be based
upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to the Fund
and required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the Fund, its
officers or Board members, and any such controlling person, as aforesaid,
is expressly conditioned upon your being notified of any action brought
against the Fund, its officers or Board members, or any such controlling
person, such notification to be given by letter or telegram addressed to
you at your principal office in Boston, Massachusetts and sent to you by
the person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. You shall
have the right to control the defense of such action, with counsel of
your own choosing, satisfactory to the Fund, if such action is based
solely upon such alleged misstatement or omission on your part or with
the Fund's consent, and in any event the Fund, its officers or Board
members or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such
action with counsel of its own choosing reasonably acceptable to you but
shall not have the right to settle any such action without your consent,
which will not be unreasonably withheld. The failure to so notify you of
any such action shall not relieve you from any liability that you may
have to the Fund, its officers or Board members, or to such controlling
person by reason of any such untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of your
indemnity agreement contained in this paragraph 4.2. You agree to notify
the Fund promptly of the commencement of any litigation or proceedings
against you or any of your officers or directors in connection with the
issuance and sale of any of the Fund's Shares.
5. Effectiveness of Registration
No Shares shall be offered by either you or the Fund under any of
the provisions of this Agreement and no orders for the purchase or sale
of such Shares under this Agreement shall be accepted by the Fund if and
so long as the effectiveness of the registration statement then in effect
or any necessary amendments thereto shall be suspended under any of the
provisions of the 1933 Act, or if and so long as a current prospectus as
required by Section 5(b) (2) of the 1933 Act is not on file with the SEC;
provided, however, that nothing contained in this paragraph 5 shall in
any way restrict or have an application to or bearing upon the Fund's
obligation to repurchase its Shares from any shareholder in accordance
with the provisions of the Fund's prospectus, statement of additional
information or charter documents, as amended from time to time.
6. Offering Price
Shares of any class of any Series of the Fund offered for sale by
you shall be offered for sale at a price per share (the "offering
price") equal to (a) their net asset value (determined in the manner set
forth in the Fund's charter documents and the then-current prospectus and
statement of additional information) plus (b) a sales charge, if
applicable, which shall be the percentage of the offering price of such
Shares as set forth in the Fund's then-current prospectus relating to
such Series. In addition to or in lieu of any sales charge applicable at
the time of sale, Shares of any class of any Series of the Fund offered
for sale by you may be subject to a contingent deferred sales charge as
set forth in the Fund's then-current prospectus and statement of
additional information. You shall be entitled to receive any sales
charge levied at the time of sale in respect of the Shares without
remitting any portion to the Fund. Any payments to a broker or dealer
through whom you sell Shares shall be governed by a separate agreement
between you and such broker or dealer and the Fund's then-current
prospectus and statement of additional information
7. Notice to You
The Fund agrees to advise you immediately in writing:
(a) of any request by the SEC for
amendments to the registration statement,
prospectus or statement of additional
information then in effect or for additional
information;
(b) in the event of the issuance by the
SEC of any stop order suspending the
effectiveness of the registration statement,
prospectus or statement of additional
information then in effect or the initiation
of any proceeding for that purpose;
(c) of the happening of any event that
makes untrue any statement of a material fact
made in the registration statement, prospectus
or statement of additional information then in
effect or that requires the making of a change
in such registration statement, prospectus or
statement of additional
information in order to make the statements
therein not misleading; and
(d) of all actions of the SEC with
respect to any amendment to the registration
statement, or any supplement to the prospectus
or statement of additional information which
may from time to time be filed with the SEC.
8. Term of the Agreement
This Agreement shall become effective on the date hereof, shall
have an initial term of one year from the date hereof, and shall continue
for successive annual periods thereafter so long as such continuance is
specifically approved at least annually by (a) the Fund's Board or (b) by
a vote of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board members of the
Fund who are not interested persons (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 30 days' notice by the Fund's Board or by vote of
holders of a majority of the relevant Series outstanding voting
securities, or on 90 days' notice by you. This Agreement will also
terminate automatically, as to the relevant Series, in the event of its
assignment (as defined in the 1940 Act and the rules and regulations
thereunder).
9. Arbitration
Any claim, controversy, dispute or deadlock arising under
this Agreement (collectively, a "Dispute") shall be settled by
arbitration administered under the rules of the American Arbitration
Association ("AAA") in New York, New York. Any arbitration and award
of the arbitrators, or a majority of them, shall be final and the
judgment upon the award rendered may be entered in any state or federal
court having jurisdiction. No punitive damages are to be awarded.
10. Miscellaneous
So long as you act as a principal underwriter and distributor of
Shares, you shall not perform any services for any entity other than
investment companies advised or administered by Citigroup Inc. or its
subsidiaries. The Fund recognizes that the persons employed by you to
assist in the performance of your duties under this Agreement may not
devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict your or any of your
affiliates right to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature. This
Agreement and the terms and conditions set forth herein shall be governed
by, and construed in accordance with, the laws of the State of New York.
11. Limitation of Liability (Massachusetts business trusts only)
The Fund and you agree that the obligations of the Fund under this
Agreement shall not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future,
of the Fund, individually, but are binding only upon the assets and
property of the Fund, as provided in the Master Trust Agreement. The
execution and delivery of this Agreement have been authorized by the
Trustees and signed by an authorized officer of the Fund, acting as such,
and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Fund as provided in its Master
Trust Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us
the enclosed copy, whereupon this Agreement will become binding on you.
Very truly yours,
SMITH BARNEY MONEY FUNDS, INC.
By: _____________________
Authorized Officer
Accepted:
CFBDS, INC.
By: __________________________
Authorized Officer
U:\legal\general\forms\dist12b1\SBMoneyFund
EXHIBIT A
Smith Barney Money Funds, Inc.
Cash Portfolio
Government Portfolio
Retirement Portfolio
Page: 3
7
FORM OF
AMENDED AND RESTATED
SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
This Amended and Restated Shareholder Services and Distribution Plan
(the "Plan") is adopted in accordance with Rule 12b-1 (the "Rule")
under the Investment Company Act of 1940, as amended (the "1940 Act"),
by [Name of Fund], a [business trust organized under the laws of the
Commonwealth of Massachusetts (the "Trust") on behalf of its sub-trust]
/ [a corporation organized under the laws of the State of Maryland (the
"Fund")], subject to the following terms and conditions:
Section 1. Annual Fee.
(a) Service Fee for Class A shares. The [Trust/Fund] will pay to
Salomon Smith Barney Inc., a corporation organized under the
laws of the State of Delaware ("Salomon Smith Barney"), a
service fee under the Plan at an annual rate of [ %] of the
average daily net assets of the Fund attributable to the Class
A shares sold and not redeemed (the "Class A Service Fee").
(b) Service Fee for Class L shares. The [Trust/Fund] will pay to
Salomon Smith Barney a service fee under the plan at the annual
rate of [ %] of the average daily net assets of the Fund
attributable to the Class L shares sold and not redeemed (the
"Class L Service Fee").
(c) Payment of Fees. The Service Fees will be calculated daily and
paid monthly by the [Trust/Fund] with respect to the foregoing
classes of the Fund's shares (each a "Class" and together, the
"Classes") at the annual rates indicated above.
Section 2. Expenses Covered by the Plan.
With respect to expenses incurred by each Class, its respective
Service Fee may be used by Salomon Smith Barney for: (a) costs of
printing and distributing the [Trust's/Fund's] prospectuses, statements
of additional information and reports to prospective investors in the
[Trust/Fund]; (b) costs involved in preparing, printing and
distributing sales literature pertaining to the [Trust/Fund]; (c) an
allocation of overhead and other branch office distribution-related
expenses of Salomon Smith Barney; (d) payments made to, and expenses
of, Salomon Smith Barney's financial consultants and other persons who
provide support services to [Trust/Fund] shareholders in connection
with the distribution of the [Trust's/Fund's] shares, including but not
limited to, office space and equipment, telephone facilities, answering
routine inquires regarding the [Trust/Fund] and its operation,
processing shareholder transactions, forwarding and collecting proxy
material, changing dividend payment elections and providing any other
shareholder services not otherwise provided by the [Trust's/Fund's]
transfer agent; and (e) the Service Fees are intended to be used by
Salomon Smith Barney primarily to pay its financial consultants for
servicing shareholder accounts, including a continuing fee to each such
financial consultant, which fee shall begin to accrue immediately after
the sale of such shares.
Section 3. Approval by Shareholders
The Plan will not take effect, and no fees will be payable in
accordance with Section 1 of
the Plan, with respect to a Class until the Plan has been approved by a
vote of at least a majority
of the outstanding voting securities of the Class. The Plan will be
deemed to have been approved
with respect to a Class so long as a majority of the outstanding voting
securities of the Class votes
for the approval of the Plan, notwithstanding that: (a) the Plan has
not been approved by a majority of the outstanding voting securities of
any other Class, or (b) the Plan has not been
approved by a majority of the outstanding voting securities of the
[Trust/Fund].
Section 4. Approval by [Trustees/Directors.]
Neither the Plan nor any related agreements will take effect until
approved by a majority vote of both (a) the Board of
[Trustees/Directors] and (b) those [Trustees/Directors] who are not
interested persons of the [Trust/Fund] and who have no direct or
indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified [Trustees/Directors]"), cast
in person at a meeting called for the purpose of voting on the Plan and
the related agreements.
Section 5. Continuance of the Plan.
The Plan will continue in effect with respect to each Class until [
, 1999] and thereafter for successive twelve-month periods with respect
to each Class; provided, however, that such continuance is specifically
approved at least annually by the [Trustees/Directors] of the
[Trust/Fund] and by a majority of the Qualified [Trustees/Directors].
Section 6. Termination.
The Plan may be terminated at any time with respect to a Class (i) by
the [Trust/Fund] without the payment of any penalty, by the vote of a
majority of the outstanding voting securities of such Class or (ii) by
a majority vote of the Qualified [Trustees/Directors]. The Plan may
remain in effect with respect to a particular Class even if the Plan
has been terminated in accordance with this Section 6 with respect to
any other Class.
Section 7. Amendments.
The Plan may not be amended with respect to any Class so as to
increase materially the amounts of the fees described in Section 1
above, unless the amendment is approved by a vote of holders of at
least a majority of the outstanding voting securities of that Class. No
material amendment to the Plan may be made unless approved by the
[Trust's/Fund's] Board of [Trustees/Directors] in the manner described
in Section 4 above.
Section 8. Selection of Certain [Trustees/Directors].
While the Plan is in effect, the selection and nomination of the
[Trust's/Fund's] [Trustees/Directors] who are not interested persons of
the [Trust/Fund] will be committed to the discretion of the
[Trustees/Directors] then in office who are not interested persons of
the [Trust/Fund].
Section 9. Written Reports
In each year during which the Plan remains in effect, any person
authorized to direct the disposition of monies paid or payable by the
Fund pursuant to the Plan or any related agreement will prepare and
furnish to the [Trust's/Fund's] Board of [Trustees/Directors] and the
Board will review, at least quarterly, written reports complying with
the requirements of the Rule, which set out the amounts expended under
the Plan and the purposes for which those expenditures were made.
Section 10. Preservation of Materials.
The [Trust/Fund] will preserve copies of the Plan, any agreement
relating to the Plan and any report made pursuant to Section 9 above,
for a period of not less than six years (the first two years in an
easily accessible place) from the date of the Plan, agreement or
report.
Section 11. Meanings of Certain Terms.
As used in the Plan, the terms "interested person" and "majority of
the outstanding voting securities" will be deemed to have the same
meaning that those terms have under the rules and regulations under the
1940 Act, subject to any exemption that may be granted to the
[Trust/Fund] under the 1940 Act, by the Securities and Exchange
Commission.
Section 12. Limitation of Liability. (Massachusetts business trusts
only)
The obligations of the Trust under this Agreement shall not be
binding upon any of the Trustees, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the Trust,
individually, but are binding only upon the assets and property of the
Trust, as provided in the Master Trust Agreement. The execution of
this Plan has been authorized by the Trustees and signed by an
authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution by such officer shall
be deemed to have been made by any of them individually or to impose
any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Master Trust Agreement.
IN WITNESS WHEREOF, the Fund has executed the Plan as of July _____,
1998.
[NAME OF TRUST/FUND] On behalf of
By:
____________________________________
Heath B. McLendon
Chairman of the Board
g:\legal\general\forms\agreemts\dist12b1\12b1Plan
Rule 18f-3 (d) Multiple Class Plan for Smith Barney Mutual Funds
Introduction
This plan (the "Plan") is adopted pursuant to Rule 18f-3 (d) of the
Investment Company Act of 1940, as amended (the "1940 Act"). The purpose of
the Plan is to restate the existing arrangements previously approved by the
Boards of Directors and Trustees of certain of the open-end investment
companies set forth on Schedule A (the "Funds" and each a "Fund") under the
Funds' existing order of exemption (Investment Company Act Release Nos. 20042
(January 28, 1994) (notice) and 20090 (February 23, 1994)). Share
pursuant to a system (the "Multiple Class System") in which each class
of shares (a "Class") of a Fund represents a pro rata interest in the same
portfolio of investments of the Fund and differs only to the extent
outlined below.
I. Distribution Arrangements and Service Fees
One or more Classes of shares of the Funds are offered for purchase by
investors with the following sales load structure. In addition, pursuant
to Rule 12b-1 under the 1940 Act (the "Rule"), the Funds have each adopted
a plan (the "Services and Distribution Plan") under which shares of the
Classes are subject to the
services and distribution fees described below.
1. Class A Shares
Class A shares are offered with a front-end sales load and under the
Services and Distribution Plan are subject to a service fee of up to 0.25%
of average daily net assets. In addition, the Funds are permitted to
assess a contingent deferred sales charge ("CDSC") on certain redemptions
of Class A shares sold pursuant to a complete waiver of front-end sales
loads applicable to large purchases, if the shares are redeemed within one
year of the date of purchase. This waiver applies to sales of Class A shares
s equal to or exceeds $500,000 although this amount may be changed in the
future.
2. Class B Shares
Class B shares are offered without a front-end sales load,
but are subject to a five-year declining CDSC and under the Services and
Distribution Plan are subject to a service fee at an annual rate of up to
0.25% of average daily net assets and a distribution fee at an annual rate
of up to 0.75% of average daily net assets.
3. Class D Shares
Class D shares are offered without a front-end sales load, CDSC, service
fee or distribution fee.
4. Class L Shares
Class L shares are offered with a front-end load, are subject to a one-year
CDSC and under the Services and Distribution Plan are subject to a service
fee at an annual rate of up to 0.25% of average daily net assets and a
distribution fee at an annual rate of up to 0.75% of average daily net
assets. Unlike Class B shares, Class L shares do not have the conversion
feature as discussed below and accordingly, these shares are subject to a
distribution fee for an indefinite period of time. The Funds reserve the
right to impose these fees at such higher rates as may be determined.
5. Class I Shares
Class I shares are offered without a front-end sales load, but are subject
under the Services and Distribution Plan to a service fee at an annual
rate of up to 0.25% of average daily net assets.
6. Class O Shares
Class O shares are offered without a front-end load, but are subject to a
one-year CDSC and under the Services and Distribution Plan are subject to
a service fee at an annual rate of up to 0.25% of average daily net assets
and a distribution fee at an annual rate of up to 0.50% of average daily
net assets. Unlike Class B
shares, Class O shares do not have the conversion feature as discussed
below and accordingly, these shares are subject to a distribution fee for
an indefinite period of time. The Funds reserve the right to impose these
fees at such higher rates as may be determined.
Effective June 28, 1999, Class O shares will be offered with a
front-end load and will continue to be subject to a one year CDSC, a
service fee at an annual rate of up to 0.25% of average daily net assets
and a distribution fee at an annual rate of up to 0.50% of average daily
net assets.
7. Class Y Shares
Class Y shares are offered without imposition of either a sales charge or a
service or distribution fee for investments where the amount of purchase is
equal to or exceeds a specific amount as specified in each Fund's prospectus.
8. Class Z Shares
Class Z shares are offered without imposition of either a sales charge or a
service or distribution fee for purchase (i) by employee benefit and
retirement plans of Salomon Smith Barney Inc. ("Salomon Smith Barney") and
its affiliates, (ii) by certain unit investment trusts sponsored by Salomon
Smith Barney and its affiliates, and (iii) although not currently
authorized by the governing boards of the Funds, when and if authorized,
(x) by employees of Salomon Smith Barney and its affiliates and (y) by direct
es of any investment company listed on Schedule A and, for each of (x) and
(y), their
spouses and minor children.
9. Additional Classes of Shares
The Boards of Directors and Trustees of the Funds have the authority to
create additional classes, or change existing Classes, from time to time,
in accordance with Rule 18f-3 of the 1940 Act.
II. Expense Allocations
Under the Multiple Class System, all expenses incurred by a Fund are
allocated among the various Classes of shares based on the net assets of
the Fund attributable to each Class, except that each Class's net asset
value and expenses reflect the expenses associated with that Class under
the Fund's Services and
Distribution Plan, including any costs associated with obtaining
shareholder approval of the Services and Distribution Plan (or an
amendment thereto) and any expenses specific to that Class. Such expenses
are limited to the following:
(i) transfer agency fees as identified by the transfer agent as
being attributable to a specific Class;
(ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and
proxies to current shareholders;
(iii) Blue Sky registration fees incurred by a Class of shares;
(iv) Securities and Exchange Commission registration fees
incurred by a Class of shares;
(v) the expense of administrative personnel and services as
required to support the shareholders of a specific Class;
(vi) litigation or other legal expenses relating solely to one
Class of shares; and
(vii) fees of members of the governing boards of the funds
incurred as a result of issues relating to one Class of shares.
Pursuant to the Multiple Class System, expenses of a Fund allocated to a
particular Class of shares of that Fund are borne on a pro rata basis by
each outstanding share of that Class.
III. Conversion Rights of Class B Shares
All Class B shares of each Fund will automatically convert to Class A
shares after a certain holding period, expected to be, in most cases,
approximately eight years but may be shorter. Upon the expiration of the
holding period, Class B shares (except those purchases through the
reinvestment of dividends and other
distributions paid in respect of Class B shares) will automatically convert
to Class A shares of the Fund at the relative net asset value of each of
the Classes, and will, as a result, thereafter be subject to the lower fee
under the Services and Distribution Plan. For purposes of calculating the
holding period required for conversion, newly created Class B shares issued
after the date of implementation of the Multiple Class
System are deemed to have been issued on (i) the date on which the
issuance of the Class B shares occurred or (ii) for Class B shares obtained
through an exchange, or a series of exchanges, the date on which the
issuance of the original Class B shares occurred.
Shares purchased through the reinvestment of dividends and other
distributions paid in respect of Class B shares are also Class B shares.
However, for purposes of conversion to Class A, all Class B shares in a
shareholder's Fund account that were purchased through the reinvestment of
dividends and other distributions paid in respect of Class B shares (and
that have not converted to Class A shares as provided in the following
sentence) are considered to be held in a separate sub-account. Each time
any Class
in the shareholder's Fund account (other than those in the sub-account
referred to in the preceding
sentence) convert to Class A, a pro rata portion of the Class B shares
then in the sub-account also converts to Class A. The portion is
determined by the ratio that the shareholder's Class B shares converting
to Class A bears to the shareholder's total Class B shares not acquired
through dividends and distributions.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling of the Internal Revenue Service that
payment of different dividends on Class A and Class B shares does not
result in the Fund's dividends or distributions constituting "preferential
dividends" under the Internal Revenue
Code of 1986, as amended (the "Code"), and the continuing availability of
an opinion of counsel to the effect that the conversion of shares does not
constitute a taxable event under the Code. The conversion of Class B shares
to Class A shares may be suspended if this opinion is no longer available,
In the event that conversion of Class B shares does not occur, Class B
shares would continue to be subject to the distribution fee and any
incrementally higher transfer agency costs attending the Class B shares
IV. Exchange Privileges
Shareholders of a Fund may exchange their shares at net asset value for
shares of the same Class in certain other of the Smith Barney Mutual Funds
as set forth in the prospectus for such Fund. Funds only permit exchanges
into shares of money market funds having a plan under the Rule if, as
permitted by paragraph (b) (5) of Rule 11a-3 under the 1940 Act, either
(i) the time period during which the shares of the money market funds are
held is included in the calculations of the CDSC or (ii) the time period i
f the CDSC is reduced by the amount of any payments made under a plan
adopted pursuant to the
Rule by the money market funds with respects to those shares. Currently,
the Funds include the time period during which shares of the money market
fund are held in the CDSC period. The exchange privileges applicable to
all Classes of shares must comply with Rule 11a-3 under the 1940 Act.
Smith Barney Sponsored Investment Companies
Operating under Rule 18f-3 - Schedule A
(as of October 31, 1998)
Smith Barney Adjustable Rate Government Income Fund
Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc.
Smith Barney Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund
Smith Barney Concert Allocation Series Inc.
Conservative Portfolio
Balanced Portfolio
Global Portfolio
Growth Portfolio
Income Portfolio
High Growth Portfolio
Smith Barney Equity Funds -
Concert Social Awareness Fund
Smith Barney Large Cap Blend Fund
Smith Barney Fundamental Value Fund Inc.
Smith Barney Funds, Inc. -
Large Cap Value Fund
Short-Term High Grade Bond Fund
U.S. Government Securities Fund
Smith Barney Income Funds -
Smith Barney Balanced Fund
Smith Barney Convertible Fund
Smith Barney Diversified Strategic Income Fund
Smith Barney Exchange Reserve Fund
Smith Barney High Income Fund
Smith Barney Municipal High Income Fund
Smith Barney Premium Total Return Fund
Smith Barney Total Return Bond Fund
Smith Barney Investment Trust -
Smith Barney Intermediate Maturity California Municipals Fund
Smith Barney Intermediate Maturity New York Municipals Fund
Smith Barney Large Capitalization Growth Fund
Smith Barney S&P 500 Index Fund
Smith Barney Mid Cap Blend Fund
Smith Barney Investment Funds Inc. -
Concert Peachtree Growth Fund
Smith Barney Contrarian Fund
Smith Barney Government Securities Fund
Smith Barney Hansberger Global Small Cap Value Fund
Smith Barney Hansberger Global Value Fund
Smith Barney Investment Grade Bond Fund
Smith Barney Special Equities Fund
Smith Barney Institutional Cash Management Fund, Inc.
Cash Portfolio
Government Portfolio
Municipal Portfolio
Smith Barney Managed Governments Fund Inc.
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Money Funds, Inc. -
Cash Portfolio
Government Portfolio
Retirement Portfolio
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Muni Funds -
California Money Market Portfolio
Florida Portfolio
Georgia Portfolio
Limited Term Portfolio
National Portfolio
New York Portfolio
New York Money Market
Pennsylvania Portfolio
Smith Barney Natural Resources Fund Inc.
Smith Barney New Jersey Municipals Fund Inc.
Smith Barney Oregon Municipals Fund
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Telecommunications Trust -
Smith Barney Telecommunications Income Fund
Smith Barney World Funds, Inc. -
International Equity Portfolio
International Balanced Portfolio
European Portfolio
Pacific Portfolio
Global Government Bond Portfolio
Emerging Markets Portfolio
