FILE NO. 2-
69938
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 24
To The
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
(Exact name of Registrant as specified
in the Declaration of Trust)
388 Greenwich Street, New York, New York l0013
(Address of principal executive offices)
(212) 816-6474
(Registrant's telephone number)
Christina T. Sydor
388 Greenwich Street, New York, New York l0013 (22nd
Floor)
(Name and address of agent for service)
To amend Parts A, B and C
Rule 24f-2(a)(l) Declaration:
Registrant previously registered an indefinite number of
its
shares pursuant to Rule 24f-2 of the Investment Company
Act of
1940, and Registrant filed its Rule 24f-2 Notice on May 26,
1994
for its most recent fiscal year ended March 31, 1995.
It is proposed that this Post-Effective Amendment will
become
effective July 28, 1995 pursuant to paragraph (b) of Rule
485.
Total number of pages:
CROSS REFERENCE SHEET
(as required by Rule 495(a))
Part A of
Form N-1A Location in Part A
l. Cover Page cover page
2. Synopsis "Fee Table"
3. Condensed Financial Information. "Financial
Highlights"
"Performance"
4. General Description of Registrant "Shares of the
Fund"
cover page
"Investment
Objective
and Policies"
"Risk
and
Portfolio
Management"
5. Management of the Fund "Investment
Management
and
Distribution
of
Shares"
"Purchase
of
Shares"
"Financial
Highlights"
6. Capital Stock and Other Securities "Shares of the
Fund"
"Redemption
of
Shares"
cover page
"Dividends,
Automatic
Reinvestment
and
Taxes"
7. Purchase of Securities Being
Offered "Purchase of
Shares"
"Investment
Management
and
Distribution
of Shares"
"Determination of
Net
Asset Value"
"Exchange
Privileges"
8. Redemption or Repurchase "Redemption of
Shares"
"Minimum
Account
Size"
9. Pending Legal Proceedings not applicable
Part B of Statement of
Additional
Form N-1A Information Caption
10. Cover page cover page
11. Table of Contents "Table of
Contents"
12. General Information and History not applicable
13. Investment Objectives and Policies
"Repurchase
Agreements"
"Puts"
See
Prospectus-
"Investment
Objective
and
Policies"
14. Management of the Fund "Directors
and
Officers"
15. Control Persons and Principal
Holders of Securities "Directors and
Officers"
See
Prospectus -
"Shares of the
Fund"
16. Investment Advisory and
Other Services "Directors and
Officers"
"Management
Agreement, Plan
of
Distribution and
Other
Services"
"Custodian"
"Independent
Auditors"
See Prospectus -
"Investment
Management
and
Distribution of
Shares"
"Fee Table"
17. Brokerage Allocation See Prospectus
- -
"Investment
Management
and
Distribution of
Shares"
18. Capital Stock and Other Securities See
Prospectus -
"Shares of the
Fund"
"Voting Rights"
19. Purchase, Redemption and Pricing
of Securities Being Offered See
Prospectus -
"Purchase
of Shares"
See
Prospectus -
"Determination of
Net Asset
Value"
"Determination of
Net
Asset Value
and Amortized
Cost
Valuation"
"Financial
Statements"
20. Tax Status See
Prospectus -
"Dividends,
Automatic
Reinvestment and
Taxes"
Part B of Statement of
Additional
Form N-1A Information Caption
21. Underwriters See
Prospectus -
"Investment
Management
and
Distribution of
Shares"
22. Calculation of Performance Data
"Computation of
Yield"
23. Financial Statements
"Financial
Statements"
Part C of
Form N-1A
Information required to be included in Part C is set forth
under
the appropriate item, so numbered in Part C of this
Post-
Effective Amendment.
PROSPECTUS
SMITH BARNEY
Municipal
Money
Market
Fund, Inc.
JULY 28, 1995
Prospectus
begins on page one
{LOGO} Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Prospectus
July 28, 1995
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388 Greenwich Street
New York, New York 10013
(212) 723-9218
Smith Barney Municipal Money Market Fund, Inc. (the
"Fund")
seeks to
provide its shareholders with income exempt from Federal
income
tax from a
portfolio of high quality short-term municipal
obligations
selected for
liquidity and stability of principal.
Shares of the Fund are not insured or guaranteed by the
U.S.
Government.
There is no assurance that the Fund will be able to
maintain a
stable net asset
value of $1.00 per share.
This Prospectus sets forth concisely certain
information
about the Fund,
including service fees and expenses, that prospective
investors
will find
helpful in making an investment decision. Investors
are
encouraged to read this
Prospectus carefully and retain it for future reference.
Additional information about the Fund is contained
in a
Statement of
Additional Information dated July 28, 1995, as
amended or
supplemented from time
to time, that is available upon request and without
charge by
calling or writing
the Fund at the telephone number or address set forth above
or by
contacting a
Smith Barney Financial Consultant. The Statement of
Additional
Information has
been filed with the Securities and Exchange Commission
(the
"SEC") and is
incorporated by reference into this Prospectus in its
entirety.
SMITH BARNEY INC.
Distributor
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Investment Manager
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE
SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS
THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED
UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
1
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
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Table of Contents
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Fee
Table
3
- ------------------------------------------------------------
- -----
- ---------------
Financial
Highlights
4
- ------------------------------------------------------------
- -----
- ---------------
Investment Objective and
Policies
5
- ------------------------------------------------------------
- -----
- ---------------
Risk and Portfolio
Management
8
- ------------------------------------------------------------
- -----
- ---------------
Valuation of
Shares
10
- ------------------------------------------------------------
- -----
- ---------------
Dividends, Automatic Reinvestment and
Taxes
10
- ------------------------------------------------------------
- -----
- ---------------
Purchase of
Shares
11
- ------------------------------------------------------------
- -----
- ---------------
Redemption of
Shares
12
- ------------------------------------------------------------
- -----
- ---------------
Exchange
Privilege
15
- ------------------------------------------------------------
- -----
- ---------------
Minimum Account
Size
18
- ------------------------------------------------------------
- -----
- ---------------
Yield
Information
19
- ------------------------------------------------------------
- -----
- ---------------
Management of the
Fund
19
- ------------------------------------------------------------
- -----
- ---------------
Distributor
20
- ------------------------------------------------------------
- -----
- ---------------
Additional
Information
21
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- -----
- ---------------
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No person has been authorized to give any information
or to
make any
representations in connection with this offering other than
those
contained in
this Prospectus and, if given or made, such other
information and
representations must not be relied upon as having been
authorized
by the Fund or
the Distributor. This Prospectus does not constitute an
offer by
the Fund or the
Distributor to sell or a solicitation of an offer to buy
any of
the securities
offered hereby in any jurisdiction to any person to whom
it is
unlawful to make
such offer or solicitation in such jurisdiction.
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2
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Fee Table
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The following expense table lists the costs and
expenses
that an investor
will incur either directly or indirectly as a shareholder of
the
Fund based,
unless otherwise noted, on its operating expenses for its
most
recent fiscal
year:
Class A Shares Class C
Shares
Class Y Shares
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===============
Shareholder Transaction Expenses
Sales Charge Imposed on Purchases None
None
None
Deferred Sales Charge None**
None*
None
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===============
Annual Fund Operating Expenses
(as a percentage of average net
assets)+
Management Fees 0.46%
0.46%
0.46%
12b-1 Fees 0.10
0.10
- --
Other Expenses*** 0.05
0.05
0.05
- ------------------------------------------------------------
- -----
- ---------------
Total Fund Operating Expenses 0.61%
0.61%
0.51%
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===============
* Class C shares are not available for purchase. They
represent
previously
issued "Class B" shares and may only be redeemed or
exchanged
out of the
Fund. If redeemed, they may be subject to a
contingent
deferred sales charge
("CDSC"). See "Redemption of Shares -- Contingent
Deferred
Sales Charge."
** Class A shares acquired as part of an exchange
privilege
transaction, which
were originally acquired in one of the other funds of
the
Smith Barney
Mutual Funds at net asset value subject to a CDSC,
remain
subject to the
original fund's CDSC while held in the Fund.
*** For Class Y shares, "Other Expenses" have been
estimated
based on expenses
incurred by Class A shares because there were no
Class Y
shares outstanding
for the fiscal year ended March 31, 1995.
+ The Manager agreed to waive a part of its management
fees for
the year ended
March 31, 1995. If the Manager had not waived its fees
the
ratio of expenses
to average net assets would have been .63%.
EXAMPLE
The following example is intended to assist an
investor in
understanding
the various costs that an investor in the Fund will bear
directly
or indirectly.
The example assumes payment by the Fund of operating
expenses at
the levels set
forth in the table above. See "Purchase of Shares,"
"Redemption
of Shares,"
"Management of the Fund" and "Distributor."
You would pay the following expenses on a $1,000
investment,
assuming (1)
5.00% annual return and (2) redemption at the end of each
time
period:
1 Year 3 Years 5
Years
10 Years
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===============
Class A $ 6 $20
$34
$76
Class C 16 20
34
76
Class Y 5 16
29
64
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3
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Fee Table (continued)
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The example is included to provide a means for the
investor
to compare
expense levels of funds with different fee structures
over
varying investment
periods. To facilitate such comparison, all funds are
required to
utilize a
5.00% annual return assumption. This assumption is
unrelated to
the Fund's prior
performance and is not a projection of future performance.
This
example should
not be considered a representation of past or future
expenses.
Actual expenses
may be greater or less than those shown.
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Financial Highlights
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===============
The following schedule has been audited in conjunction
with
the annual
audits of the financial statements of Smith Barney
Municipal
Money Market Fund,
Inc. (formerly Smith Barney Tax Free Money Fund, Inc.) by
KPMG
Peat Marwick LLP,
independent auditors. The 1995 financial statements and
the
independent
auditors' report thereon appear in the March 31, 1995
Annual
Report to
Shareholders.
For each Class A and Class C share outstanding throughout
each
year:
<TABLE>
<CAPTION>
Years Ended March 31,
- ------------------------------------------------------------
- -----
- ----------------------------------------------------------
1995(1) 1994(1) 1993
1992
1991 1990 1989 1988 1987 1986
- ------------------------------------------------------------
- -----
- ----------------------------------------------------------
<S> <C> <C> <C>
<C>
<C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $1.00 $1.00 $1.00
$1.00
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------
- -----
- ----------------------------------------------------------
Net investment income(2) 0.027 0.019 0.022
0.037
0.052 0.057 0.051 0.043 0.038 0.048
Dividends from net
investment income (0.027) (0.019) (0.022)
(0.037)
(0.052) (0.057) (0.051) (0.043) (0.038) (0.048)
- ------------------------------
Net Asset Value,
End of Year $1.00 $1.00 $1.00
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00
$1.00
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===
Total Return 2.71% 1.89% 2.25%
3.73% 5.33% 5.89% 5.23% 4.40% 3.90%
4.91%
- --------------------------------------------
Net Assets, End of Year
(in millions) $4,652 $1,291 $1,251
$1,355
$1,373 $1,252 $992 $1,162 $1,046 $857
Ratios to Average
Net Assets:
Net investment
income 3.01% 1.87% 2.22%
3.66%
5.18% 5.70% 5.08% 4.30% 3.82% 4.83%
Expenses(2) 0.61 0.64 0.62
0.53
0.52 0.53 0.53 0.48 0.53 0.56
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</TABLE>
(1) There are no material differences in expenses for the
two
classes of shares
that currently exist. Therefore, the information
provided is
representative
of each class of share outstanding during the period.
(2) The Manager has waived a part of its fees for the year
ended
March 31, 1995.
If such fees were not waived, the per share decrease
of net
investment
income would have been $0.0002 and the ratio of
expenses to
average net
assets would have been 0.63%.
As of March 31, 1995, no Class Y shares had been sold
and,
accordingly, no
comparable financial information is available at this time
for
that Class.
4
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Investment Objective and Policies
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The Fund's objective is to provide income exempt
from
Federal income tax
from a portfolio of high quality short-term municipal
obligations
selected for
liquidity and stability of principal. The Fund will pursue
its
objective by
investing in a diversified portfolio of municipal
obligations,
the interest on
which is exempt from Federal income tax in the opinion of
counsel
for the
various issuers.
Opinions relating to the validity of municipal
obligations
and to the
exemption of interest thereon from Federal income tax
are
rendered by bond
counsel to the respective issuers at the time of
issuance.
Neither the Fund nor
its investment manager will review the proceedings
relating to
the issuance of
municipal obligations or the bases for such opinions.
All of the Fund's investments will be in securities
that at
the time of
investment have or are deemed to have remaining maturities
of 13
months or less
and the dollar-weighted average maturity of the Fund's
portfolio
will be 90 days
or less. Except for temporary defensive purposes, at least
80% of
the Fund's
assets will be invested in municipal obligations that
produce
income that is
exempt from Federal income tax (other than the
alternative
minimum tax). In each
of the Fund's prior fiscal years, 100% of its income has
been
exempt from
Federal income tax and the Fund's shares have had a stable
$1.00
price.
The Fund's investments will be limited to obligations
that
the Board of
Directors delegates present minimal credit risks and that
(i) are
secured by the
full faith and credit of the United States or (ii) are
"Eligible
Securities," as
defined by the Investment Company Act of 1940 (the "Act"),
at the
time of
acquisition by the Fund. The term "Eligible Securities"
includes
securities
rated by the "Requisite NRSROs" in one of the two highest
short-
term rating
categories, securities of issuers that have received such
ratings
with respect
to other short-term debt securities and comparable
unrated
securities.
"Requisite NRSROs" means any nationally recognized
statistical
rating
organizations ("NRSROs") that have issued ratings with
respect to
a security or
class of debt obligations of an issuer. Currently, there are
six
NRSROs:Standard
& Poor's Corporation, Moody's Investors Service, Inc.,
Fitch
Investors Services,
Inc., Duff and Phelps Inc., IBCA Limited and its affiliate,
IBCA,
Inc. and
Thomson BankWatch. The Fund may also invest in unrated
securities
if they are of
comparable quality as determined by the Manager in
accordance
with criteria
established by the Fund's Board of Directors.
Municipal obligations, which are issued by
states,
municipalities and their
agencies, fall into two major categories -- notes and bonds.
The
two principal
5
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Investment Objective and Policies (continued)
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classifications of municipal obligations are "general
obligation"
and "revenue."
General obligations are secured by a municipal issuer's
pledge of
its full
faith, credit, and taxing power for the payment of principal
and
interest.
Revenue obligations are payable only from the revenues
derived
from a particular
facility or class of facilities or, in some cases, from
the
proceeds of a
special excise tax or other specific revenue source.
Although
industrial
development bonds ("IDBs") are issued by municipal
authorities,
they are
generally secured by the revenues derived from payments of
the
industrial user.
The payment of the principal and interest on IDBs is
dependent
solely on the
ability of the user of the facilities financed by the
bonds to
meet its
financial obligations and the pledge, if any, of real
and
personal property so
financed as security for such payment.
Among the types of obligations in which the Fund
invests are
"puts," such
as floating or variable rate instruments subject to
demand
features ("demand
instruments"); tax-exempt commercial paper; and notes such
as Tax
Anticipation
Notes, Revenue Anticipation Notes, Tax and Revenue
Anticipation
Notes and Bond
Anticipation Notes. Demand instruments usually have an
indicated
maturity of
more than 13 months but contain a demand feature (a "put")
that
entitles the
holder to receive the principal amount of the underlying
security
and may be
exercised either (a) at any time on no more than 30 days'
notice;
or (b) at
specified intervals not exceeding one year and upon no more
than
30 days'
notice. Demand instruments are generally supported by
letters of
credit that are
issued by both domestic and foreign banks. A variable
rate
instrument provides
for adjustment of its interest rate on set dates and upon
such
adjustment can
reasonably be expected to have a market value that
approximates
its par value; a
floating rate instrument provides for adjustment of its
interest
rate whenever a
specified interest rate (e.g., the prime rate) changes and
at any
time can
reasonably be expected to have a market value that
approximates
its par value.
The Fund may invest up to 10% of its assets in
participation
interests in
floating or variable rate municipal obligations (such as
private
activity bonds)
owned by banks. Participation interests carry a demand
feature
permitting the
Fund to tender them back to the bank. Each
participation is
backed by an
irrevocable letter of credit or guarantee of a bank that
the
investment manager,
acting under the supervision of the Board of Directors,
has
determined meets the
prescribed quality standards for the Fund.
The Fund may invest without limit in private activity
bonds.
Interest
income on certain types of private activity bonds issued
after
August 7, 1986,
to finance non-governmental activities is a specific
tax
preference item for
purposes of the Federal individual and corporate
alternative
minimum taxes.
Individual and corporate
6
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Investment Objective and Policies (continued)
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shareholders may be subject to a Federal alternative minimum
tax
to the extent
the Fund's dividends are derived from interest on these
bonds.
These private
activity bonds are included in the term "municipal
obligations"
for purposes of
determining compliance with the 80% test described
above.
Dividends derived from
interest income on all municipal obligations are a
component of
the "current
earnings" adjustment item for purposes of the Federal
corporate
alternative
minimum tax.
The Fund may invest up to 20% of the value of its
assets in
tender option
bonds. A tender option bond is a municipal obligation
(generally
held pursuant
to a custodial arrangement) having a relatively long
maturity and
bearing
interest at a fixed rate substantially higher than
prevailing
short-term tax
exempt rates, that has been coupled with the agreement of a
third
party, such as
a bank, broker-dealer or other financial institution,
pursuant to
which such
institution grants the security holders the option, at
periodic
intervals, to
tender their securities to the institution and receive the
face
value thereof.
As consideration for providing the option, the
financial
institution receives
periodic fees equal to the difference between the
municipal
obligation's fixed
coupon rate and the rate, as determined by a
remarketing or
similar agent at or
near the commencement of such period, that would cause
the
securities, coupled
with the tender option, to trade at par on the date of
such
determination. Thus,
after payment of this fee, the security holder effectively
holds
a demand
obligation that bears interest at the prevailing short-term
tax-
exempt rate. The
investment manager, on behalf of the Fund, will consider
on an
ongoing basis the
creditworthiness of the issuers of the underlying
municipal
obligation, of any
custodian and the third-party provider of the tender
option. In
certain
instances and for certain tender option bonds, the option
may be
terminable in
the event of a default in payment of principal or interest
on the
underlying
municipal obligations and for other reasons. The Fund will
not
invest more than
10% of the value of its net assets in illiquid securities,
which
would include
tender option bonds for which the required notice to
exercise the
tender feature
is more than seven days if there is no secondary market
available
for these
obligations.
The Fund may not purchase or otherwise acquire
any
securities that are
subject to legal or contractual restrictions on
resale or
purchase illiquid
securities for which there is no readily available
market or
engage in any
repurchase transactions that do not mature within seven days
if,
as a result,
more than 10% of its total assets would be invested in all
such
securities.
The Fund cannot change its investment objective
and
fundamental policies
without the vote of a "majority of the outstanding
voting
securities" as defined
in the Act. (See "Voting Rights" in the Statement of
Additional
Information).
7
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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Risk and Portfolio Management (Coninued)
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There can be no assurance that the Fund will achieve
its
investment
objective. The ability of the Fund to achieve its
investment
objective is
dependent on a number of factors, including the skills of
the
investment manager
in purchasing municipal obligations whose issuers have
the
continuing ability to
meet their obligations for the payment of interest and
principal
when due. The
ability to achieve a high level of income is dependent on
the
yields of the
securities in the portfolio. Yields on municipal obligations
are
the product of
a variety of factors, including the general conditions of
the
money market and
of the municipal bond and municipal note markets, the size
of a
particular
offering, the maturity of the obligation and its
rating.
Municipal obligations
with longer maturities tend to produce higher yields and
are
generally subject
to potentially greater price fluctuations than obligations
with
shorter
maturities.
When-Issued Purchase Commitments. New issues of
municipal
obligations are
often offered on a "when- issued" basis, i.e., delivery
and
payment normally
take place 15 to 45 days after the purchase date. The
payment
obligation and the
interest rate to be received on the securities are fixed at
the
time the buyer
enters into the commitment, although no interest accrues
with
respect to a
"when-issued" security prior to its stated delivery date.
The
Fund will only
make commitments to purchase such securities with the
intention
of actually
acquiring the securities, but the Fund may sell these
securities
before the
settlement date if it is deemed advisable as a
matter of
investment strategy. A
segregated account of the Fund consisting of cash or liquid
debt
securities with
a market value at least equal to the amount of the Fund's
"when-
issued"
commitments will be maintained with PNC Bank,
National
Association (the
"Custodian") and monitored on a daily basis so that the
market
value of the
account will equal or exceed the amount of such
commitments by
the Fund.
Securities purchased on a "when-issued" basis and
the
securities held in
the Fund's portfolio are subject to changes in market value
based
not only upon
the public's perception of the creditworthiness of the
issuer but
also changes
in the level of interest rates, and this will generally
result in
both changing
in value in the same way, i.e., both appreciating when
interest
rates decline
and depreciating when interest rates rise. Therefore, if in
order
to achieve
higher interest income the Fund remains substantially
fully
invested at the same
time that it has purchased securities on a "when- issued"
basis,
there will be a
greater possibility that the market value of the Fund's
assets
will vary from
$1.00 per share. (See "Valuation of Shares.") And there will
be a
greater
potential for the realization of capital gains, which are
not
exempt from
Federal income taxes.
Stand-By Commitments. The Fund may acquire
"stand-by
commitments" with
8
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
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===============
Investment Objective and Policies (continued)
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===============
respect to municipal obligations held in its portfolio.
Under a
stand-by
commitment a dealer agrees to purchase, at the Fund's
option,
specified
municipal obligations at a specified price. The Fund
intends to
enter into
stand-by commitments only with dealers, banks and broker-
dealers
which, in the
opinion of the investment manager, present minimal credit
risks.
In evaluating
the creditworthiness of the issuer of a stand-by
commitment, the
investment
manager will review periodically the issuer's
assets,
liabilities, contingent
claims and other relevant financial information. The Fund
will
acquire stand-by
commitments solely to facilitate portfolio liquidity and
does not
intend to
exercise its rights thereunder for trading purposes.
Other Factors to be Considered. The Fund anticipates
being
as fully
invested as practicable in tax exempt securities. The Fund
may
invest in taxable
investments due to market conditions or pending
investment of
proceeds from
sales of shares or proceeds from the sale of portfolio
securities
or in
anticipation of redemptions. However, the Fund generally
expects
to invest the
proceeds received from the sale of shares in
municipal
obligations as soon as
reasonably possible, which is generally within one day.
At no
time will more
than 20% of the Fund's net assets be invested in
taxable
investments except when
the Manager has determined that market conditions warrant
the
Fund adopting a
temporary defensive investment posture. To the extent the
Fund's
assets are
invested for temporary defensive purposes, such assets will
not
be invested in a
manner designed to achieve the Fund's investment objective.
The Fund may 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, the Fund may
realize a
gain or loss. From
the commencement of operations, the Fund has not realized
any
significant gain
or loss during any fiscal year.
From time to time, proposals have been introduced
before
Congress for the
purpose of restricting or eliminating the Federal income
tax
exemption for
interest on municipal obligations and similar proposals
may be
introduced in the
future. If one of these proposals were enacted, the
availability
of tax exempt
obligations for investment by the Fund and the value of
the
Fund's portfolio
would be affected. The directors would then reevaluate the
Fund's
investment
objective and policies.
9
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Valuation of Shares
============================================================
=====
===============
The net asset value per share is determined as of the
close
of regular
trading 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. The 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.
The Fund employs the "amortized cost method" of valuing
portfolio
securities and
intends to use its best efforts to continue to
maintain a
constant net asset
value of $1.00 per share.
============================================================
=====
===============
Dividends, Automatic Reinvestment and Taxes
============================================================
=====
===============
The Fund declares a dividend of substantially all of
its net
investment
income on each day the NYSE is open. Net investment
income
consists of interest
accrued and discount earned and is less premium amortized
and
expenses accrued
(the discount or premium on portfolio investments is fixed
at the
time of
purchase). Unless the shareholder has elected to receive
monthly
distributions
of income, such dividends will automatically be
reinvested in
Fund shares of the
same Class at net asset value. If a shareholder
redeems an
account in full
between payment dates, all dividends accrued up to and
including
the date of
liquidation will be paid with the proceeds from the
redemption of
shares. The
per share dividends on Class A and Class C shares of the
Fund may
be less than
the per share dividends on Class Y shares principally as a
result
of the service
fee applicable to Class A and Class C shares. Long-term
capital
gains, if any,
will be in the same amount for each Class and will be
distributed
annually.
The Fund believes it met the requirements of Subchapter
M of
the Internal
Revenue Code during its last fiscal year and intends to
comply in
the future;
thus, no Federal income taxes will ordinarily be paid by
the
Fund. Distributions
by the Fund of interest income from tax exempt obligations
are
not taxable to
shareholders and will not be includable in their gross
income for
Federal income
tax purposes. Realized gains and losses are reflected in
the
Fund's net assets
and are not included in net investment income. Capital
gain
distributions, if
any, whether paid in cash or invested in shares of the Fund,
will
be taxable to
shareholders. All of the Fund's dividends paid during the
past
fiscal years have
been exempt-interest dividends excludable from gross income
for
Federal income
tax purposes.
Distributions by the Fund that are exempt for Federal
income
tax purposes
will not necessarily result in exemption under income
tax or
other tax laws of
any state or local taxing authority. Generally, only
interest
earned on
obligations issued by
10
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Dividends, Automatic Reinvestment and Taxes (continued)
============================================================
=====
===============
the state or municipality in which the investor resides
will be
exempt from
state and local taxes; however, the laws of the several
states
and local taxing
authorities vary with respect to the taxation of exempt-
interest
income, and
each shareholder should consult a tax advisor in that
regard. The
Fund will make
available annually to its shareholders information
concerning the
percentage of
interest income the Fund received during the calendar year
from
municipal
obligations on a state-by-state basis.
Under the Code, interest on indebtedness
incurred or
continued to purchase
or carry shares of the Fund will not be deductible to the
extent
that the Fund's
distributions are exempt from Federal income tax. In
addition,
any loss realized
upon the redemption of shares held less than six months
will be
disallowed to
the extent of any exempt-interest dividends received by
the
shareholder during
such period. However, this holding period may be shortened
by the
Treasury
Department to a period of not less than the greater of 31
days or
the period
between regular dividend distributions. Further, persons who
may
be "substantial
users" (or "related persons" of substantial users) of
facilities
financed by
industrial development bonds should consult their tax
advisors
before purchasing
Fund shares.
The Tax Reform Act of 1986 provides that interest on
certain
municipal
obligations (i.e., certain private activity bonds) issued
after
August 7, 1986
will be treated as a preference item for purposes of both
the
corporate and
individual alternative minimum tax. Under Treasury
regulations,
that portion of
the Fund's exempt-interest dividend to be treated as a
preference
item for
shareholders will be based on the proportionate share of
the
interest received
by the Fund from the specified private activity
bonds.
Shareholders should
consult their tax advisors concerning the effect of the
Tax
Reform Act on an
investment in the Fund.
============================================================
=====
===============
Purchase of Shares
============================================================
=====
===============
Purchases of Fund shares must be made through a
brokerage
account
maintained with Smith Barney Inc. ("Smith Barney"), with a
broker
that clears
securities transactions through Smith Barney on a fully
disclosed
basis (an
"Introducing Broker") or with an Investment Dealer in the
Selling
Group. No
maintenance fee will be charged by the Fund in connection
with a
brokerage
account through which an investor purchases or holds shares.
Investors in Class A may open an account by
making an
initial investment of
at least $1,000 for each Fund account. Investors in Class Y
may
open an account
by making an initial investment of at
11
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Purchase of Shares (continued)
============================================================
=====
===============
least $5,000,000. Subsequent investments of at least $50
may be
made for either
Class. There are no minimum investment requirements in
Class A
for employees of
Travelers Group Inc. ("Travelers") and its
subsidiaries,
including Smith Barney,
and Directors of the Fund, and their spouses and children.
The
Fund reserves the
right to waive or change minimums, to decline any
order to
purchase its shares
and to suspend the offering of shares from time to time.
Share
certificates are
issued only upon a shareholder's written request to the
Fund's
transfer agent,
The Shareholder Services Group, Inc. ("TSSG"), a
subsidiary of
First Data
Corporation.
Class A and Class Y shares of the Fund are available
for
purchase directly
by investors. Class C shares represent shares previously
issued
as "Class B"
shares and are not available for purchase directly by
investors;
they may only
be redeemed or exchanged out of the Fund.
The 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 when Smith Barney, an Introducing
Broker
or an
Investment Dealer in the Selling Group 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, or are placed
by an
investor with
sufficient Federal funds or cash balance in the
investor's
brokerage account
with Smith Barney, the Introducing Broker or an Investment
Dealer
in the Selling
Group, the order becomes effective on the day of
receipt if
received prior to
the close of regular trading on the NYSE, on any day the
Fund
calculates its net
asset value. See "Valuation of Shares." Purchase orders
received
after the close
of regular trading on the NYSE on any business day are
effective
as of the time
the net asset value is next determined. When orders for
the
purchase of Fund
shares are paid for other than in Federal funds, Smith
Barney,
the Introducing
Broker or an Investment Dealer in the Selling Group,
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 Smith
Barney, the Introducing Broker or an Investment Dealer in
the
Selling Group.
Shares purchased begin to accrue income dividends on the
next
business day
following the day that the purchase order becomes effective.
============================================================
=====
===============
Redemption of Shares
============================================================
=====
===============
Shareholders may redeem their shares without charge on
any
day the Fund
calculates its net asset value. See "Valuation of
Shares."
Redemption requests
received in proper form before the close of regular
trading on
the NYSE are
priced
12
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Redemption of Shares
============================================================
=====
===============
at the net asset value as next determined on that day.
Redemption
requests received after the close of regular trading on the
NYSE,
are priced at
the net asset value as next determined.
The Fund normally transmits redemption proceeds for
credit
to the
shareholder's account at Smith Barney, the Introducing
Broker or
an Investment
Dealer in the Selling Group at no charge on the business
day
following receipt
of a redemption request but, in any event, payment will be
made
no later than
the third business day after a redemption request is
made.
Generally, if the
redemption proceeds are remitted to a Smith Barney
brokerage
account, these
funds will not be invested for the shareholder's benefit
without
specific
instruction and 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.
Shareholders who purchase securities through Smith
Barney,
an Introducing
Broker or an Investment Dealer in the Selling Group 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 Smith Barney, the
Introducing
Broker or an
Investment Dealer in the Selling Group. 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
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 Smith
Barney, the Introducing Broker or an Investment Dealer in
the
Selling Group 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 Smith Barney
Financial
Consultant.
Redemption requests must be made through Smith Barney
or an
Introducing
Broker. A shareholder desiring to redeem shares
represented by
certificates also
must present the certificates to Smith Barney, the
Introducing
Broker or an
13
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Redemption of Shares (continued)
============================================================
=====
===============
Investment Dealer in the Selling Group 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 the
Fund's
transfer agent
in proper form.
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 TSSG together with the redemption
request.
Any signature
appearing on a redemption request, 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.
TSSG 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 TSSG receives all required
documents in
proper form.
CONTINGENT DEFERRED SALES CHARGE
Class A and Class C 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 C 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 Smith Barney. The CDSC will be assessed based
on an
amount equal to
the net asset value at the time of redemption.
Accordingly, no
CDSC will be
imposed on increases in net asset 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 reinvestment 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 C 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 such shares being
redeemed
will be
considered to represent, as applicable, capital
appreciation or
dividend and
capital gain distribution reinvestments in such other
14
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Redemption of Shares [continued]
============================================================
=====
===============
funds. For Federal income tax purposes, the amount of the
CDSC
will reduce the
gain or increase the loss, as the case may be, on the
amount
realized on
redemption.
The CDSC on Class A and Class C 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)
involuntary redemptions; and (d) redemptions of shares
in
connection with a
combination of the 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
Smith Barney in
the case of shareholders who are also Smith Barney clients
or by
TSSG in the
case of all other shareholders) of the shareholder's
status or
holdings, as the
case may be.
============================================================
=====
===============
Exchange Privilege
============================================================
=====
===============
Except as otherwise noted below, shares of each Class
may be
exchanged for
shares of the same Class in the following funds 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 C shares are
subject to
minimum
investment requirements and all shares are subject to
other
requirements of the
fund into which exchanges are made and a sales
charge
differential may apply.
Fund Name
- ------------------------------------------------------------
- -----
- ---------------
Growth Funds
Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc.
Smith Barney Fundamental Value Fund Inc.
Smith Barney Growth Opportunity Fund
Smith Barney Managed Growth Fund
Smith Barney Special Equities Fund
Smith Barney Telecommunications Trust Growth Fund
Growth and Income Funds
Smith Barney Convertible Fund
Smith Barney Funds, Inc. -- Income and Growth Portfolio
Smith Barney Growth and Income Fund
15
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Exchange Privilege
============================================================
=====
===============
Smith Barney Premium Total Return Fund
Smith Barney Strategic Investors Fund
Smith Barney Utilities Fund
Taxable Fixed-Income Funds
Smith Barney Adjustable Rate Government Income Fund
Smith Barney Diversified Strategic Income Fund
Smith Barney Funds, Inc. -- Income Return Account
Portfolio
* Smith Barney Funds, Inc. -- Short-Term U.S.
Treasury
Securities Portfolio
Smith Barney Funds, Inc. -- U.S. Government
Securities
Portfolio
Smith Barney Government Securities Fund
Smith Barney High Income Fund
Smith Barney Investment Grade Bond Fund
Smith Barney Managed Governments Fund Inc.
Tax-Exempt Funds
Smith Barney Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund Inc.
Smith Barney Intermediate Maturity California Municipals
Fund
Smith Barney Intermediate Maturity New York Municipals
Fund
Smith Barney Limited Maturity Municipals Fund
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Muni Funds -- Florida Portfolio
Smith Barney Muni Funds -- Florida Limited Term
Portfolio
Smith Barney Muni
Funds -- Georgia Portfolio Smith Barney Muni Funds --
Limited
Term Portfolio
Smith Barney Muni Funds -- National Portfolio Smith
Barney
Muni Funds -- New
York Portfolio Smith Barney Muni Funds -- Ohio
Portfolio
Smith Barney Muni
Funds -- Pennsylvania Portfolio Smith Barney New
Jersey
Municipals Fund Inc.
Smith Barney Oregon Municipals Fund Smith Barney Tax-
Exempt
Income Fund
International Funds
Smith Barney Precious Metals and Minerals Fund Inc.
Smith Barney World Funds, Inc. -- Emerging
Markets
Portfolio
Smith Barney World Funds, Inc. -- European Portfolio
Smith Barney World Funds, Inc. -- Global Government
Bond
Portfolio
16
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Exchange Privilege
============================================================
=====
===============
Smith Barney World Funds, Inc. -- International
Balanced
Portfolio
Smith Barney World Funds, Inc. -- International
Equity
Portfolio
Smith Barney World Funds, Inc. -- Pacific Portfolio
Money Market Funds
Smith Barney Money Funds, Inc. -- Cash Portfolio
Smith Barney Money Funds, Inc. -- Government Portfolio
** Smith Barney Money Funds, Inc. -- Retirement Portfolio
* Smith Barney Muni Funds -- California Money Market
Portfolio
* Smith Barney Muni Funds -- New York Money Market
Portfolio
- ----------
*Available for exchange with Class A and Class Y shares
of the
Fund.
**Available for exchange with Class A shares of the Fund.
Class A Exchanges. Class A shares of the Fund
will be
subject to the
appropriate "sales charge differential" upon the exchange of
such
shares for
Class A shares of another fund of the Smith Barney Mutual
Funds
sold with a
sales charge. The "sales charge differential" is limited
to a
percentage rate no
greater than the excess of the sales charge rate
applicable to
purchases of
shares of the mutual fund being acquired in the exchange
over the
sales charge
rate(s) actually paid on the mutual fund shares
relinquished in
the exchange and
on any predecessor of those shares. For purposes of the
exchange
privilege,
shares obtained through automatic reinvestment of dividends
and
capital gains
distributions are treated as having paid the same sales
charges
applicable to
the shares on which the dividends or distributions were
paid;
however, if no
sales charge was imposed upon the initial purchase of the
shares,
any shares
obtained through automatic reinvestment will be subject
to a
sales charge
differential upon exchange.
Class C Exchanges. Class C shares of the Fund
may be
exchanged out of the
Fund. Upon such exchange, the new Class C shares will be
deemed
to have been
purchased on the same date as the Class C shares of the
original
fund that had
been purchased.
Class Y Exchanges. Class Y shareholders of the 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.
Although the
exchange privilege is an important benefit, excessive
exchange
transactions can
be detrimental to the Fund's performance and its
shareholders.
The investment
17
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Exchange Privilege (continued)
============================================================
=====
===============
manager may determine that a pattern of frequent
exchanges is
excessive and
contrary to the best interests of the Fund's other
shareholders.
In this event,
the investment manager will notify Smith Barney that 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 Fund
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.
Exchanges will be processed at the net asset value
next
determined, plus
any applicable sales charge differential. 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.
A capital gain
or loss for tax purposes will be realized upon the
exchange,
depending upon the
cost or other basis of shares redeemed. 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
Fund
reserves the right
to modify or discontinue exchange privileges upon 60 days'
prior
notice to
shareholders.
============================================================
=====
===============
Minimum Account Size
============================================================
=====
===============
The Fund reserves the right to redeem involuntarily
any
shareholder's
account if the aggregate net asset value of the shares
held in
the account is
less than $500, in which event the shareholder will receive
prior
written notice
and will be permitted 60 days to bring the account up to
the
minimum to avoid
involuntary redemption. Any applicable CDSC will be deducted
from
the proceeds
of this redemption. (If a shareholder has more than one
account
in the Fund,
each account must satisfy the minimum account size.)
18
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Yield Information
============================================================
=====
===============
From time to time the Fund advertises the yield,
effective
yield and tax
equivalent yield of its Class A, Class C and Class Y
shares.
These yield figures
are based on historical earnings and are not intended to
indicate
future
performance. The yield of each Class refers to the net
investment
income
generated by an investment in the Class over a specific
seven-day
period,
expressed as an annual percentage rate. The effective
yield is
calculated
similarly but, when annualized, the income earned by
an
investment in 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. The tax
equivalent yield also is calculated similarly to the
yield,
except that a stated
income tax rate is used to demonstrate the taxable
yield
necessary to produce an
after-tax yield equivalent to the tax-exempt yield of the
Class.
============================================================
=====
===============
Management of the Fund
============================================================
=====
===============
Smith Barney Mutual Funds Management Inc. ("SBMFM" or
the
"Manager")
manages the day to day operations of the Fund pursuant
to a
Management
Agreement. (All of the Fund's business and affairs are
the
responsibility of and
are managed under the direction of the Board of Directors
of the
Fund and all
powers of the Fund may be exercised by or under the
authority of
the Board,
except as conferred on or reserved to the
shareholders by
applicable law or the
Fund's charter or bylaws.) SBMFM was incorporated in 1978
under
the laws of the
State of New York. SBMFM is controlled by Smith Barney
Holdings
Inc., the parent
company of Smith Barney. Smith Barney Holdings Inc. is a
wholly-
owned subsidiary
of Travelers, a financial services holding company
engaged,
through its
subsidiaries, principally in four business segments:
Investment
Services,
Consumer Finance Services, Life Insurance Services and
Property &
Casualty
Insurance Services. SBMFM, Smith Barney Holdings Inc. and
Smith
Barney are each
located at 388 Greenwich Street, New York, New York 10013.
SBMFM
renders
investment advice to investment companies that had
aggregate
assets under
management as of June 30, 1995 of approximately $60 billion.
Pursuant to the Management Agreement, the Manager
offers the
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 the Fund. It also furnishes the Fund with
bookkeeping,
accounting and
administrative services, office space and equipment, and
the
services of the
officers and employees of the Fund. It provides a
variety of
administrative and
shareholder services directly or at its expense
through
securities firms. For
the last fiscal year, the actual
19
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Management of the Fund (continued)
============================================================
=====
===============
management fee was 0.48% of the Portfolio's net assets due
to a
fee waiver and
the total expenses were 0.61%. The Fund's new
management
agreement, which was
approved by its shareholders on September 16, 1994, provides
for
daily
compensation of the Manager at the annual rate of 0.50% on
the
first $2.5
billion of the Fund's net assets, 0.475% of the next $2.5
billion
and 0.45% on
net assets in excess of $5 billion. The Manager has agreed
that
to the extent
that in any fiscal year the aggregate expenses of the
Fund,
exclusive of taxes,
brokerage, interest and extraordinary expenses such as
litigation
costs, exceed
0.70% of the average daily net assets for that fiscal year
of the
Fund, the
Manager will reduce its fee or reimburse the Fund to the
extent
of such excess.
The 0.70% voluntary expense limitation shall be in effect
until
it is terminated
by notice to shareholders and by supplement to the then
current
prospectus.
SBMFM, in effecting purchases and sales of
portfolio
securities for the
account of the Fund, implements the Fund's policy of seeking
the
best execution
of orders. The Fund's portfolio transactions have for the
most
part been
principal transactions directly with the major underwriters
for,
and dealers in,
tax exempt money market instruments. No brokerage
commissions are
paid on such
transactions, but the price paid to underwriters or dealers
will
normally
include an underwriter's spread or dealer's markup. The
primary
consideration in
the allocation of transactions is prompt execution of
orders in
an effective
manner at the most favorable price. Under certain
circumstances,
transactions
will be effected with remarketing agents who receive fees
from
the issuers for
services rendered. No principal transactions are handled by
Smith
Barney.
Smith Barney also serves as investment manager
and
distributor of The
Inefficient-Market Fund, Inc., a closed-end investment
company.
Another
affiliate of Smith Barney acts as investment manager of
numerous
other
investment companies. Smith Barney also advises profit-
sharing
and pension
accounts. Smith Barney and its affiliates may in the future
act
as investment
advisers for other accounts. The term "Smith Barney" in the
title
of the Fund
has been adopted by permission of Smith Barney and is
subject to
the right of
Smith Barney to elect that the Fund stop using the term in
any
form or
combination of its name.
============================================================
=====
===============
Distributor
============================================================
=====
===============
Smith Barney serves as Principal Underwriter of
shares of
the Fund for
which it receives no compensation and conducts a
continuous
offering pursuant to
a "best efforts" arrangement requiring it to take and pay
for
only such
securities as may be
20
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Distributor (continued)
============================================================
=====
===============
sold to the public. Under a plan of distribution pursuant to
Rule
12b-1 (the
"Plan") under the Act, a service fee is paid by each Class A
and
Class C to
Smith Barney at an annual rate of 0.10% of the Class'
average
daily net assets.
The fee is used by Smith Barney to pay its financial
consultants
for servicing
shareholder accounts for as long as a shareholder
remains a
holder of the Class.
The service fee is credited at a rate of 0.10% of the
average
balance of Class
shares held in the accounts of the customers of
financial
consultants. The
service fee is also spent by Smith Barney 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
the
Fund's shareholders
and (3) the pro rata share of branch office fixed
expenses
(including branch
overhead allocations).
Shareholder servicing expenses incurred by Smith
Barney but
not reimbursed
by a Class in any year will not be a continuing
liability
of the Class
in subsequent years.
============================================================
=====
================
Additional Information
============================================================
=====
===============
The Fund, an open-end, diversified investment company,
was
incorporated
under Maryland law on April 1, 1980. Class A, Class C and
Class Y
shares
represent interests in the assets of the Fund and have
identical
voting,
dividend, liquidation and other rights on the same terms
and
conditions except
that expenses related to the distribution of each Class of
shares
are borne
solely by each Class and each Class of shares has
exclusive
voting rights with
respect to provisions of the Fund's Rule 12b-1 distribution
plan
which pertain
to a particular Class. Fund shares do not have cumulative
voting
rights; are
fully paid when issued; have no preemptive,
subscription or
conversion rights;
and are redeemable and subject to redemption as set forth
under
"Redemption of
Shares" and "Minimum Account Size." As described under
"Voting
Rights" in the
Statement of Additional Information, the Fund ordinarily
will not
hold
shareholder meetings; however, shareholders have the
right to
call a meeting
upon a vote of 10% of the Fund's outstanding shares for
the
purpose of voting to
remove directors and the Fund will assist shareholders in
calling
such a meeting
as required by the Act.
PNC Bank, National Association, located at 17th and
Chestnut
Streets,
Philadelphia, Pennsylvania 19103, serves as custodian of
the
Fund's investments.
TSSG, located at Exchange Place, Boston,
Massachusetts
02109, serves as the
Fund's transfer agent
21
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
============================================================
=====
===============
Additional Information (continued)
============================================================
=====
===============
The Fund sends its shareholders a semi-annual report
and an
audited annual
report, which include listings of the investment securities
held
by the Fund at
the end of the period covered. In an effort to reduce the
Fund's
printing and
mailing costs, the Fund plans to consolidate the mailing of
its
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. In addition, the Fund also
plans to
consolidate the mailing
of its Prospectus so that a shareholder having multiple
accounts
will receive a
single Prospectus annually. Shareholders who do not want
this
consolidation to
apply to their account should contact their Smith
Barney
Financial Consultant or
the Fund's transfer agent.
22
#
<PAGE>
SMITH BARNEY
- ------------
A Member
of
Travelers Group [LOGO]
Smith Barney
Municipal Money
Market Fund, Inc.
388
Greenwich Street
New
York,
New York 10013
FD 2310 7/95
PART B
July 28, 1995
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
388 Greenwich Street
New York, New York 10013
STATEMENT OF ADDITIONAL INFORMATION
Smith Barney Municipal Money Market Fund, Inc.
seeks to provide its shareholders
with income exempt from Federal income tax
from a portfolio of high quality
short-term municipal obligations selected
for liquidity and stability of principal
This Statement of Additional Information is not a
Prospectus. It is intended to provide more detailed
information about Smith Barney Municipal Money Market Fund,
Inc. (the "Fund") as well as matters already discussed in
the Prospectus and therefore should be read in conjunction
with the July 28, 1995 Prospectus, which may be obtained
from the Fund or a Smith Barney Financial Consultant.
TABLE OF CONTENTS
Page
Directors and Officers 2
Investment Restrictions 4
Computation of Yield 4
Valuation of Shares and
Amortized Cost Valuation 5
Management Agreement, Plan of Distribution
and Other Services 6
Repurchase Agreements 6
"Puts" 7
Voting Rights 7
Custodian, Transfer and Dividend Disbursing Agent 7
Independent Auditors 7
Financial Statements 8
Ratings of Municipal Notes and Bonds 8
DIRECTORS AND OFFICERS
*JESSICA BIBLIOWICZ, Director and President
Executive Vice President of Smith Barney Inc. ("Smith
Barney"),
President of forty investment companies associated with
Smith
Barney and Director of twelve investment companies
associated
with Smith Barney; prior to January, 1994, Director of Sales
and
Marketing of Prudential Mutual Funds; prior to September,
1991,
Assistant Portfolio Manager for Shearson Lehman Brothers;
35.
RALPH D. CREASMAN, Director
Retired, 4 Moss Hammock Lane, The Landings, Skidaway
Island,
Savannah, Georgia 31411. Director of ten investment
companies
associated with Smith Barney Inc. ("Smith Barney") (see
below).
Formerly Chairman, President and Chief Executive
Officer of
Lionel D. Edie & Co., Inc. (investment counselors),
Chairman of
Edie International S.A. and President and Director of Edie
Ready
Assets Trust, Fundamerica of Japan, Edie Special Growth Fund
and
Edie Capital Fund; 73.
JOSEPH H. FLEISS, Director
Retired, 3849 Torrey Pines Blvd., Sarasota, Florida
34238.
Director of ten investment companies associated with
Smith
Barney. Formerly, Senior Vice President of Citibank,
Manager of
Citibank's Bond Investment Portfolio and Money Management
Desk,
and a Director of Citicorp Securities Co., Inc; 77.
DONALD R. FOLEY, Director
Retired, 3668 Freshwater Drive, Jupiter, Florida
33458.
Director of ten investment companies associated with
Smith
Barney. Formerly Vice President of Edwin Bird
Wilson,
Incorporated (advertising); 77.
PAUL HARDIN, Director
Professor at the University of North Carolina at Chapel
Hill,
University of North Carolina, 60134 Davie Street, Chapel
Hill,
North Carolina 27514; Director of twelve investment
companies
associated with Smith Barney; and a Director of The
Summit
Bancorporation; 63.
FRANCIS P. MARTIN, Director
Practicing physician, 2000 North Village Avenue,
Rockville
Centre, New York 11570. Director of ten investment
companies
associated with Smith Barney. Formerly President of the
Nassau
Physicians' Fund, Inc.; 70.
*HEATH B. MCLENDON, Chairman of the Board and Chief
Executive
Officer
Managing Director of Smith Barney; Director of
forty-one
investment companies associated with Smith Barney;
President of
Smith Barney Mutual Funds Management Inc. ("SBMFM" or
the
"Manager"); Chairman of Smith Barney Strategy Advisers
Inc.;
prior to July 1993, Senior Executive Vice President of
Shearson
Lehman Brothers, Inc. and Vice Chairman of Shearson
Asset
Management; 61
RODERICK C. RASMUSSEN, Director
Investment Counselor, 81 Mountain Road, Verona New Jersey
07044.
Director of ten investment companies associated with
Smith
Barney. Formerly Vice President of Dresdner and Company
Inc.
(investment counselors); 68.
JOHN P. TOOLAN, Director
Retired, 13 Chadwell Place, Morristown, New Jersey
07960.
Director of ten investment companies associated with
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 Smith Barney; 64.
*Designates an "interested person" as defined in the
Investment
Company Act of l940 whose business address is 388
Greenwich
Street, New York, New York l00l3. Such person is not
separately
compensated for services as a Fund officer or director.
C. RICHARD YOUNGDAHL, Director
Retired, 339 River Drive, Tequesta, Florida 33469.
Director of
ten investment companies associated with Smith Barney.
Formerly
Chairman of the Board of Pensions Lutheran Church in
America,
Chairman of the Board and Chief Executive Officer of
Aubrey G.
Lanston & Co. (dealers in U.S. Government securities)
and
President of the Association of Primary Dealers in
U.S.
Government Securities; 79.
*LEWIS E. DAIDONE, Senior Vice President and Treasurer
Managing Director of Smith Barney, Senior Vice President
and
Treasurer of forty-one investment companies associated with
Smith
Barney, and Director and Senior Vice President of the
Manager;
37.
*PETER M. COFFEY, Vice President
Managing Director of Smith Barney and Vice President of
Smith
Barney Muni Funds, Smith Barney Intermediate Municipal Fund,
Inc.
and the Manager; 50.
*KAREN MAHONEY-MALCOMSON, Vice President
Director of Smith Barney in the Greenwich Street
Advisors
Division and Vice President of Smith Barney Muni Funds; 37.
*LAWRENCE MCDERMOTT, Vice President
Managing Director of Smith Barney in the Greenwich
Street
Advisors Division and Vice President of eight
investment
companies associated with Smith Barney; 47.
*IRVING DAVID, Controller and Assistant Secretary
Vice President of Smith Barney and the Manager, Controller
of two
investment companies associated with Smith Barney.
Prior to
March 1994, Assistant Treasurer of First Investment
Management
Company; 34.
*CHRISTINA T. SYDOR, Secretary
Managing Director of Smith Barney and Secretary of
forty-one
investment companies associated with Smith Barney, and of
the
Manager and Smith Barney Mutual Funds Management Inc.; 44.
On July 5, 1995 directors and officers owned in the
aggregate
less than 1% of the outstanding shares of the Fund.
*Designates an "interested person" as defined in the
Investment
Company Act of l940 whose business address is 388
Greenwich
Street, New York, New York l0013. Such person is not
separately
compensated for services as a Fund officer or director.
The following table shows the compensation paid by the
Fund to
each director during the Fund's last fiscal year. None of
the
officers of the Fund received any compensation from the Fund
for
such period. Officers and interested directors of the Fund
are
compensated by Smith Barney.
<TABLE>
COMPENSATION TABLE
<C>
<C> Total
<C>
Pension or
Compensation
Number of
<C> Retirement from
Fund
Funds for
Aggregate Benefits Accrued and
Fund
Which Director
<S> Compensation as part of
Complex Serves Within
Name of Person from Fund Fund Expenses
Paid
to Directors Fund Complex
Jessica Bibliowicz*$ 0 $0 $ 0 12
Ralph D. Creasman3,900.00 0 51,500.00 10
Joseph H. Fleiss3,800.00 0 50,900.00 10
Donald R. Foley3,900.00 0 51,500.00 10
Paul Hardin**2,000.00 0 27,800.00 12
Francis P. Martin3,900.00 0 51,500.00 10
Heath B. McLendon* 0 0
0
41
Roderick C. Rasmussen 3,900.00 0
51,500.00
10
John P. Toolan3,900.00 0 51,500.00 10
C. Richard Youngdahl3,900.00 0 51,500.00 10
</TABLE>
*Designates an "interested director".
**Reflects the compensation paid to Dr. Hardin and the
number
of funds within the Fund Complex for which Dr. Hardin serves
as a
director as of the date of this Statement of
Additional
Information. For the year ended December 31, 1994, Mr.
Hardin
served as a director of 25 funds within the Fund Complex and
was
paid $96,400.
INVESTMENT RESTRICTIONS
In addition to the investment objective set forth in
the
Prospectus under "Investment Objective and Policies," the
Fund
has adopted the following investment restrictions which
also
cannot be changed without the vote of a "majority of
the
outstanding voting securities." (See "Voting Rights" in
this
Statement of Additional Information.) The Fund may not:
(1)
purchase the securities of any issuer (except states,
territories
and possessions of the United States, the United
States
Government and its agencies and instrumentalities or
securities
which are backed by the full faith and credit of the
United
States) if as a result more than 5% of its total assets
would be
invested in the securities of such issuer, except that up to
25%
of the Fund's total assets may be invested without regard to
such
limitation (as used in this Prospectus, the entity that has
the
ultimate responsibility for the payment of interest and
principal
on a security will be deemed to be its issuer); (2) borrow
money
except for temporary or emergency purposes and not for
investment
purposes, and then in an amount not exceeding 10% of the
value of
its total assets at the time of borrowing and no investments
will
be made while borrowings exceed 5% of total assets; (3)
pledge,
mortgage or hypothecate its assets except that, to
secure
borrowings permitted by subparagraph (2) above, it may
pledge
assets having a market value at the time of pledge not
exceeding
10% of the value of its total assets; (4) underwrite any
issue of
securities except in connection with the purchase of
securities
for its portfolio of municipal obligations; (5) purchase or
sell
real estate but it may invest in municipal securities
secured by
real estate or interests therein; (6) purchase or
sell
commodities or commodity contracts or oil, gas, or other
mineral
exploration or development programs; (7) make loans,
except by
engaging in repurchase transactions; and (8) make short
sales of
securities or purchase any securities on margin, except for
such
short-term credits as are necessary for the clearance
of
transactions.
COMPUTATION OF YIELD
The Fund's yield for the seven-day period ended March 31,
1995
was 3.49% (the effective yield was 3.55%) with an average
dollar-
weighted portfolio maturity of 33 days. No Class Y shares
were
outstanding during the period ended March 31, 1995. To
compute
current yield the Fund divides the net change,
exclusive of
capital changes, in the value of a hypothetical pre-
existing
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. Effective yield is computed by determining
the
net change, exclusive of capital changes, in the value
of a
hypothetical pre-existing account having a balance of one
share
at the beginning of the period and dividing such net
change by
the value of the account at the beginning of the base
period to
obtain the base period return, and then compounding the
base
period return by adding 1, raising the sum to a power
equal to
365/7, and subtracting 1 from the result. The Fund also
quotes
the average dollar-weighted portfolio maturity for
the
corresponding seven-day period. In addition, the Fund may
publish
a tax-equivalent yield based on federal tax rates
that
demonstrates the taxable yield necessary to produce an
after-tax
yield equivalent to the Fund's yield. The tax-equivalent
yield
does not include any element of non-tax-exempt income.
Although principal is not insured, it is not expected that
the
net asset value of the Fund's shares will fluctuate because
the
Fund uses the amortized cost method of valuation.
(See
"Valuation of Shares" in the Prospectus and below.) The
investor
should remember that yield is a function of the type,
quality and
maturity of the instruments in the portfolio, and the
Fund's
operating expenses. While current yield information
may be
useful, investors should realize that current yield
will
fluctuate, it 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 Prospectus states that net asset value will be
determined on
any day the New York Stock Exchange ("NYSE") is open and
that the
net asset value may be determined on any day that the
settlement
of securities otherwise occurs. The NYSE is closed on
the
following holidays: New Year's Day, Washington's Birthday,
Good
Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving
Day and Christmas Day.
The Fund uses the "amortized cost method" for valuing
portfolio
securities pursuant to Rule 2a-7 under the Act (the "Rule").
The
amortized cost method of valuation of the Fund's
portfolio
securities (including any securities held in the separate
account
maintained for "when-issued" securities -- See "Risk
and
Portfolio Management" in the Prospectus) involves
valuing a
security at its cost at the time of purchase and
thereafter
assuming a constant amortization to maturity of any
discount or
premium, regardless of the impact of fluctuating interest
rates
on the market value of the instrument. 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 yield to investors in
the
Fund may differ somewhat from that obtained in a similar
company
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 Fund 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 Fund's
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, investing in securities that
have
or are deemed to have remaining maturities of only 13
months or
less and investing in only United States dollar-
denominated
instruments determined by the Board of Directors to be of
high
quality with minimal credit risks and which are
Eligible
Securities as defined below, 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.
An Eligible Security is defined in the Rule to mean a
security
which: (a) has a remaining maturity of 397 days or less;
(b)(i)
is rated in the two highest short-term rating categories by
any
two "nationally-recognized statistical rating
organizations"
("NRSROs") that have issued a short-term rating with
respect to
the security or class of debt obligations of the issuer, or
(ii)
if only one NRSRO has issued a short-term rating with
respect to
the security, then by that NRSRO; (c) was a long-term
security at
the time of issuance whose issuer has outstanding a short-
term
debt obligation which is comparable in priority and security
and
has a rating as specified in clause (b) above; or (d)
if no
rating is assigned by any NRSRO as provided in clauses (b)
and
(c) above, the unrated security is determined by the
Trustees to
be of comparable quality to any such rated security.
MANAGEMENT AGREEMENT, PLAN OF DISTRIBUTION
AND OTHER SERVICES
A new Management Agreement with the Manager was
approved by
shareholders on September 16, 1994 and became
effective on
November 7, 1994. The Management Agreement provides that
the
Fund's management fee be calculated as follows: 0.50% of
the
first $2.5 billion of average daily net assets; 0.475% of
the
next $2.5 billion of average daily net assets; and
0.45% on
average daily net assets over $5 billion.
For the fiscal years 1993, 1994 and 1995, the management
fees
were $6,282,895, $6,203,961 and $11,805,456 respectively,
and
there were no expense limitation reimbursements (see page
11 of
the Prospectus).
The Management Agreement further provides that all other
expenses
not specifically assumed by the Manager are borne by the
Fund.
Expenses payable by the Fund include, but are not limited
to,
charges of custodians (including sums as custodian and sums
for
keeping books and for rendering other services to the
Fund),
transfer agents and registrars, expenses of
registering or
qualifying shares for sale (including the printing of the
Fund's
registration statements and prospectuses), out-of-pocket
expenses
of directors and fees of directors who are not
"interested
persons" as defined in the Investment Company Act of
l940,
association membership dues, charges of auditors and
legal
counsel, expenses of preparing, printing and distributing
all
proxy material, reports and notices to shareholders,
insurance
expense, costs of performing portfolio valuations,
interest,
taxes, fees and commissions of every kind, expenses of
issue,
repurchase or redemption of shares, and all other costs
incident
to the Fund's corporate existence. No sales or
promotion
expenses are incurred by the Fund, but expenses
incurred in
complying with laws regulating the issue or sale of the
Fund's
shares, which are paid by the Fund, are not deemed
sales or
promotion expenses.
The Management Agreement will continue in effect if
specifically
approved annually by a majority of the directors of the Fund
who
are not parties to such contract or "interested persons" of
any
such party. The 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 Fund's outstanding shares as defined in the Act.
The Management 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 obligation or duties. The Agreement permits the
Manager to
render services to others and to engage in other activities.
Plan of Distribution
The Fund has adopted a plan of distribution pursuant to Rule
12b-
1 (the "Plan") under the Act under which a service fee is
paid by
Class A and Class C of the Fund to Smith Barney at an annual
rate
of 0.10% of the class' average daily net assets. The fee is
used
by Smith Barney to pay its financial consultants for
servicing
shareholder accounts for as long as a shareholder
remains a
holder of the class. The service fee is credited at a
rate of
0.10% of the average balance of class shares held in the
accounts
of the customers of financial consultants. Shareholder
service
expenses incurred by Smith Barney but not reimbursed by a
class
in any year will not be a continuing liability of the
class in
subsequent years.
REPURCHASE AGREEMENTS
Though the Fund has never entered into a repurchase
agreement, it
may do so in the future. These agreements involve
purchase of
debt securities of the U.S. Treasury, a Federal
agency or
instrumentality, or a federally-created corporation or
other
securities described under "Investment Objective and
Policies" in
the Prospectus. At the same time the Fund purchases the
security,
it resells it to the seller (a member bank of the Federal
Reserve
System, including the Fund's custodian, or a
"registered"
securities dealer) and is obligated to redeliver the
security to
the seller on an agreed-upon date in the future. The resale
price
is greater than the purchase price and reflects an agreed-
upon
market yield 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 sum 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. Interest earned from repurchase agreements
will be
taxable to shareholders.
"PUTS"
Among the types of securities that the Fund may purchase
are
municipal obligations having put features. A "put" is a
right to
sell a specified underlying security or securities
within a
specified period of time and at a specified exercise price
that
may be sold, transferred or assigned only with the
underlying
security or securities. The types of puts that the Fund
may
purchase include "demand features" (see page 4 in the
Prospectus)
and "standby commitments." A "standby commitment" entitles
the
holder to achieve same day settlement and to receive an
exercise
price equal to the amortized cost of the underlying security
plus
accrued interest, if any, at the time of exercise.
Although it
is permissible for the Fund to purchase securities with
standby
commitments, as a practical matter, it is unlikely that the
Fund
would have the need or the opportunity to do so because such
puts
are not commonly available.
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 Fund. At such a meeting, a director may be
removed 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.
As used in this 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 Fund (or the
affected
class) or (b) 67% or more of such shares present at a
meeting if
more than 50% of the outstanding shares of the Fund (or
the
affected class) are represented at the meeting in person
or by
proxy.
As of July 5, 1995, Stephen D. Baer owned 424,881.16
(87.8%)
Class C shares of the Fund.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
All portfolio securities and cash owned by the Fund are
held in
the custody of PNC Bank, National Association, 17th and
Chestnut
Streets, Philadelphia, Pennsylvania 19103. The
Shareholder
Services Group, Inc., Exchange Place, Boston,
Massachusetts
02109, serves as the Fund's dividend disbursing and
transfer
agent.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York
10154,
have been selected as independent auditors for the Fund for
its
fiscal year ending March 31, 1996 to report on the
financial
statements of the Fund and to perform required reviews of
certain
filings with the Commission.
FINANCIAL STATEMENTS
The following financial information is hereby
incorporated by
reference to the indicated pages of the Fund's 1995 Annual
Report
to Shareholders, a copy of which is furnished with this
Statement
of Additional Information:
Page(s)
Schedule of Investments at March 31, 1995
3-29
Statement of Assets and Liabilities at March 31, 1995
(including specimen computation of net asset value,
offering and redemption price per share)
31
Statement of Operations for the year ended
March 31, 1995
32
Statements of Changes in Net Assets for the years ended
March 31, 1995 and 1994
33
Notes to Financial Statements
34-36
Financial Highlights
37
Independent Auditors' Report
38
RATINGS OF MUNICIPAL NOTES AND BONDS
Description of Ratings of State and Local Government
Municipal N
otes
Notes are assigned distinct rating symbols in recognition of
the
differences between short-term credit risk and long-term
risk.
Factors affecting the liquidity of the borrower and short-
term
cyclical elements are critical in short-term ratings, while
other
factors of major importance in bond risk, long-term
secular
trends for example, may be less important over the short
run.
Moody's Investors Service, Inc.:
Moody's ratings for state and municipal short-term
obligations
will be designated Moody's Investment Grade ("MIG"). A
short-
term rating may also be assigned on an issue having a
demand
feature - a variable rate demand obligation. Such ratings
will
be designated as VMIG. Short-term ratings on issues with
demand
features are differentiated by the use of the VMIG
symbol to
reflect such characteristics as payment upon periodic
demand
rather than fixed maturity dates and payment relying on
external
liquidity. Additionally, investors should be alert to the
fact
that the source of payment may be limited to the
external
liquidity with no or limited legal recourse to the issuer in
the
event the demand is not met.
MIG l/VMIG 1 -- This designation denotes best quality.
There is
present strong protection by established cash flows,
superior
liquidity support or demonstrated broad-based access to
the
market for refinancing.
MIG 2/VMIG 2 -- This designation denotes high quality.
Margins
of protection are ample although not so large as in the
preceding
group.
Standard & Poor's Corporation:
SP-1+ -- This rating indicates a very strong or strong
capacity
to pay principal and interest and the possession of
overwhelming
safety characteristics.
Description of Two Highest Municipal Bond 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 edge." 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 which make the long-term risks appear somewhat
larger
than in Aaa securities.
Standard & Poor's Corporation ("S&P"):
AAA -- Debt rated 'AAA' has the highest rating assigned by
S&P.
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.
Description of Highest Commercial Paper Ratings
Moody's Investors Service, Inc.:
Prime-l -- Issuers rated Prime-l (or related
supporting
institutions) have a superior capacity for repayment of
short-
term promissory obligations. Prime-l repayment capacity
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 moderate reliance on debt and ample asset protection;
broad
margins in earnings coverage of fixed financial charges and
high
internal cash generation; and well established access to a
range
of financial markets and assured sources of alternate
liquidity.
Standard & Poor's Corporation:
A-l -- This designation indicates that the degree of
safety
regarding timely payment is either overwhelming or very
strong.
Those issues determined to possess overwhelming
safety
characteristics are denoted with a plus (+) sign
designation.
* * *
After purchase by the Fund, a security may cease to be
rated or
its rating may be reduced below the minimum required for
purchase
by the Fund. Neither event will require a sale of such
security
by the Fund; however, the Manager will consider such
event in
determining whether the Fund should continue to hold
the
security. To the extent that a rating may change as a
result of
changes in rating services or their rating systems, the Fund
will
attempt to use comparable ratings as standards for
investments in
accordance with the investment policies contained in
the
Prospectus.
PART C Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
Financial Highlights
Included in Part B:
The Funds' Annual Reports for the fiscal year ended
March
31, 1995 and the Reports o fIndependent Accountants
dated
May 8, 1995 are incorporated by reference to the Rule
N-30D
filing, Accession #: 0000091155-95-00138, made on June
16,
1995.
(b) Exhibits
(1) (a) Articles of Amendment dated March
31,
1981 are incorporated by reference to Exhibit
1(a)
to Post-Effective Amendment No. 14.
(b) Articles of Amendment and
Restatement of
Articles of Incorporation dated October 28,
1980
are incorporated by reference to Exhibit
1(b) to
Post-Effective Amendment No. 14.
(c) Articles of Amendment dated July 22,
1991
are incorporated by reference to Exhibit
1(c) to
Post-Effective No. 15.
(d) Articles of Amendment dated November 10, 1992.
(e) Articles Supplementary dated December 8, 1992.
(2) Bylaws of the Trust are incorporated by
reference to
Exhibit 2 to Post-Effective Amendment No. 11
to
Registration Statement No. 2-69938.
(3) Not applicable.
(4) Not applicable.
(5) Management Agreement between Registrant and
Mutual
Management Corp.
(6) Underwriting Agreement between Registrant and
Smith
Barney, Harris Upham & Co. Incorporated is
incorporated
by reference to Exhibit 6 to Post-Effective
Amendment
No. 12.
(7) Not applicable.
(8) Custodian Agreement between Registrant and
Provident
National Bank is incorporated by reference to
Exhibit 8
to Post-Effective Amendment No. 5.
(9) Transfer Agency Agreement between Registrant
and
Provident Financial Processing Corp. is
incorporated by
reference to Exhibit 9 to Post-Effective Amendment
No.
14.
(10) Not Applicable.
(11) (i) Auditors' Report (see the Annual
Report
to Shareholders which is incorporated by
reference
in the Statement of Additional Information).
(ii) Auditors' Consent
(12) Not applicable.
(13)Subscription Agreement between Registrant
and
National Securities & Research Corporation
is
incorporated by reference to Exhibit 13 to
Post-
Effective Amendment No. 14.
(14) Not applicable.
(15)Plan of Distribution pursuant to Rule 12b-
1 of
Registrant.
(16)Schedule of Computation of Performance
Quotations is
incorporated by reference to Exhibit 16 to
Post-
Effective Amendment No. 10.
Item 25. Persons Controlled by or under Common Control
with
Registrant
(None)
Item 26. Number of Holders of Securities as of July 5, 1995
Class A securities 5,251,642,650.480
Class C securities 483,777.350
Class Y securities 5,252,126,427.830
Item 27. Indemnification
Reference is made to ARTICLE Eighth of
Registrant's
Articles of Incorporation for a complete statement of
its
terms. Subparagraph (c) of Article EIGHTH
provides:
"Notwithstanding the foregoing provisions, no
officer or
director of the Corporation shall be indemnified
for or
insured against any liability to the Corporation or
its
shareholders to which he would otherwise be
subject by
reason of wilful 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 Mutual Management
Corp.
(Registrant's Manager) and affiliated
investment
companies.
Item 28. Business and other Connections of Investment
Adviser
See the material under the caption "Management"
included
in Part A (Prospectus) of this Registration Statement
and
the material appearing under the caption
"Management
Agreements" included in Part B (Statement of
Additional
Information) of this Registration Statement.
Information as to the Directors and Officers of
Smith
Barney Mutual Funds Management Inc. is included in
its
Form ADV (File No. 801-8314), filed with the
Commission,
which is incorporated herein by reference thereto.
Item 29. Principal Underwriters
(a) Smith Barney Inc., currently acts as
underwriter for
Smith Barney Money Funds, Inc.; Smith Barney Municipal
Money
Market Fund, Inc.; Smith Barney Muni Funds; Smith
Barney
Funds, Inc.; Smith Barney Variable Account Funds;
Smith
Barney/Travelers Series Fund Inc.; Smith Barney World
Funds,
Inc.; Smith Barney Institutional Cash Management Fund,
Inc.;
Smith Barney Investment Funds, Inc.; Smith Barney
Adjustable
Rate Government Income Fund; Smith Barney Equity
Funds;
Smith Barney Income Funds; Smith Barney
Massachusetts
Municipals Fund; Smith Barney Arizona Municipals Fund
Inc.;
Smith Barney Principal Return Fund; Municipal High
Income
Fund Inc.; Consulting Group Capital Markets Funds;
Smith
Barney Series Fund; Smith Barney Income Trust; Smith
Barney
Aggressive Growth Fund Inc.; Smith Barney Appreciation
Fund
Inc.; Smith Barney California Municipals Fund Inc.;
Smith
Barney Fundamental Value Fund Inc.; Smith Barney
Managed
Governments Fund Inc.; Smith Barney Managed Municipals
Fund
Inc.; Smith Barney New York Municipals Fund Inc.;
Smith
Barney New Jersey Municipals Fund Inc; Smith Barney
Precious
Metals and Minerals Fund Inc.; Smith
Barney
Telecommunications Trust; Smith Barney Florida
Municipal
Fund; USA High Yield Fund N.V.; Smith Barney
International
Funds (Luxemburg); Smith Barney Worldwide Securities
Limited
(Bermuda); Smith Barney Worldwide Special Fund
N.V.
(Netherlands, Antilles); Smith Barney Investment Funds
Ltd.
(Cayman Islands).
Smith Barney, the distributor of Registrant's shares,
is a
wholly owned subsidiary of TravelersGroup.
(b) The information required by this Item 29 with
respect
to each director and officer of Smith Barney
Shearson is
incorporated by reference to Schedule A of Form BD
filed
by Smith Barney Shearson pursuant to the
Securities
Exchange Act of 1934 (SEC File No. 8-8177)
(c) Not applicable.
Item 30. Location of Accounts and Records
PNC Bank, National Association, 17th and Chestnut
Streets,
Philadelphia, Pennsylvania 19103, and The
Shareholder
Services Group, Inc., Exchange Place,
Boston,
Massachusetts 02108, will maintain the custodian and
the
shareholders servicing agent records,
respectively
required by Section 31(a).
All other records required by Section 31(a) are
maintained
at the offices of the Registrant at 1345 Avenue of
the
Americas, New York, New York 10105 (and preserved for
the
periods specified by Rule 31a-2).
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
EXHIBIT INDEX
Exhibit No. Exhibit Page
No.
11 (ii) Auditors' Consent
Independent Auditors' Consent
To the Shareholders and Directors of the
Smith Barney Municipal Money Market Fund, Inc.:
We consent to the use of our report dated May 8, 1995, with
respect to the Smith Barney Municipal Money Market Fund,
Inc. incorporated herein by reference and to the references
to our Firm under the headings "Financial Highlights" in
the Prospectus and "Independent Auditors" in the Statement
of Additional Information.
KPMG PEAT MARWICK LLP
July 26, 1995
New York, New York
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-START> APRIL 1, 1994
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