FILE NO. 2-69938
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 27
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 Articles of Incorporation)
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 27, 1997 for its most recent fiscal year ended March
31, 1997.
It is proposed that this Post-Effective Amendment will become effective July
29, 1997 pursuant to paragraph (b) of Rule 485.
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 and Other Practices 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 JULY 29, 1997
Smith Barney Municipal Money Market Fund, Inc.
388 Greenwich Street
New York, New York 10013
800-451-2010
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 $1.00 PER SHARE.
This Prospectus sets forth concisely certain information about the Fund,
including service fees and expenses, that prospective investors will find
helpful in making an investment decision. Investors are encouraged to read this
Prospectus carefully and retain it for future reference.
Additional information about the Fund is contained in a Statement of
Additional Information dated July 29, 1997, as amended or supplemented from time
to time, that is available upon request and without charge by calling or writing
the Fund at the telephone number or address set forth above or by contacting a
Smith Barney Financial Consultant. The Statement of Additional Information has
been filed with the Securities and Exchange Commission (the "SEC") and is
incorporated by reference into this Prospectus in its entirety.
SMITH BARNEY INC.
Distributor
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Investment Manager
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
1
<PG$PCN>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
FEE TABLE 3
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 6
- -------------------------------------------------------------------------------
RISK AND PORTFOLIO MANAGEMENT 9
- -------------------------------------------------------------------------------
VALUATION OF SHARES 11
- -------------------------------------------------------------------------------
DIVIDENDS, AUTOMATIC REINVESTMENT AND TAXES 11
- -------------------------------------------------------------------------------
PURCHASE OF SHARES 13
- -------------------------------------------------------------------------------
REDEMPTION OF SHARES 15
- -------------------------------------------------------------------------------
EXCHANGE PRIVILEGE 19
- -------------------------------------------------------------------------------
MINIMUM ACCOUNT SIZE 22
- -------------------------------------------------------------------------------
YIELD INFORMATION 22
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND 23
- -------------------------------------------------------------------------------
DISTRIBUTOR 25
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION 25
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
2
<PG$PCN>
FEE TABLE
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 on
its operating expenses for its most recent fiscal year:
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS C SHARES* CLASS Y SHARES
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Charge Imposed on Purchases None None None
Deferred Sales Charge None** None* None
- ------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees 0.47% 0.47% 0.47%
12b-1 Fees 0.10 0.10 --
Other Expenses 0.10 0.10 0.10
- ------------------------------------------------------------------------------------
Total Fund Operating Expenses 0.67% 0.67% 0.57%
- ------------------------------------------------------------------------------------
</TABLE>
* 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.
Class A shares of the Fund purchased through the Smith Barney AssetOne
Program will be subject to an annual asset-based fee, payable quarterly. The fee
will vary to a maximum of 1.50%, depending on the amount of assets held through
the Program. For more information, please call your Smith Barney Financial
Consultant.
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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $7 $21 $37 $ 83
Class C 7 21 37 83
Class Y 6 18 32 71
- ---------------------------------------------------------------------------------
</TABLE>
3
<PG$PCN>
FEE TABLE (CONTINUED)
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.
FINANCIAL HIGHLIGHTS
The following information has been audited by KPMG Peat Marwick LLP,
independent auditors, whose report for the five years ended March 31, 1997
thereon appears in the Fund's annual report dated March 31, 1997. The
information set out below should be read in conjunction with the financial
statements and related notes that also appear in the Fund's Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information.
FOR A SHARE OF EACH CLASS OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
CLASS A SHARES 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
<CAPTION>
<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(1) 0.029 0.033 0.027 0.019 0.022 0.037 0.052 0.057 0.051 0.043
Dividends from net
investment income (0.029) (0.033) (0.027) (0.019) (0.022) (0.037) (0.052) (0.057) (0.051) (0.043)
- ------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------
TOTAL RETURN 2.94% 3.34% 2.71% 1.89% 2.25% 3.73% 5.33% 5.89% 5.23% 4.40%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR
(IN MILLIONS) $5,562 $5,395 $4,651 $1,286 $1,251 $1,355 $1,373 $1,252 $992 $1,162
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE
NET ASSETS:
Expenses(1) 0.67% 0.63% 0.61% 0.64% 0.62% 0.53% 0.52% 0.53% 0.53% 0.48%
Net investment
income 2.90 3.28 3.01 1.87 2.22 3.66 5.18 5.70 5.08 4.30
- ------------------------------------------------------------------------------------
</TABLE>
(1) The manager has waived a part of its fees for the years ended March 31, 1996
and March 31, 1995. If such fees were not waived, the per share effect on
net investment income and expense ratios would have been as follows:
<TABLE>
<CAPTION>
PER SHARE DECREASES EXPENSE RATIOS
OF NET INVESTMENT INCOME WITHOUT FEE WAIVERS
------------------------ --------------------
<S> <C> <C> <C> <C>
1996 1995 1996 1995
------- ------- ----- -----
<CAPTION>
<S> <C> <C> <C> <C>
Class A $0.0001 $0.0002 0.64% 0.63%
</TABLE>
4
<PG$PCN>
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OF EACH CLASS OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
CLASS C SHARES 1997 1996 1995(2) 1994(3)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------
Net investment income(1) 0.029 0.033 0.027 0.019
Dividends from net investment
income (0.029) (0.033) (0.027) (0.019)
- ----------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------
TOTAL RETURN 2.94% 3.34% 2.71% 1.89%++
- ----------------------------------------------------------------------------
NET ASSETS, END OF YEAR (IN
MILLIONS) $0.02 $0.04 $1.0 $5.0
- ----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 0.67% 0.60% 0.61% 0.64%+
Net investment income 2.89 3.43 3.01 1.87+
- ----------------------------------------------------------------------------
</TABLE>
(1) The manager has waived a part of its fees for the years ended March 31,1996
and March 31, 1995. If such fees were not waived, the per share effect on
net investment income and expense ratios would have been as follows:
<TABLE>
<CAPTION>
PER SHARE DECREASES EXPENSE RATIOS
OF NET INVESTMENT INCOME WITHOUT FEE WAIVERS
------------------------ --------------------
<S> <C> <C> <C> <C>
1996 1995 1996 1995
------- ------- ----- -----
<CAPTION>
<S> <C> <C> <C> <C>
Class C 0.0001 0.0002 0.62 0.63
</TABLE>
(2) On November 7, 1994, the former Class B shares were renamed Class C shares.
(3) For the period from May 25, 1993 (inception date) to March 31, 1994.
++ Total return is not annualized, as it may be representative of the total
return for the year.
+ Annualized.
<TABLE>
<CAPTION>
CLASS Y SHARES 1997 1996(4)
<S> <C> <C>
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00
- ------------------------------------------------------------------------------------
Net investment income 0.030 0.004
Dividends from net investment
income (0.030) (0.004)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00
- ------------------------------------------------------------------------------------
TOTAL RETURN 3.04% 0.39%++
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (IN
MILLIONS) $5.0 $18.0
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.57% 0.55%+
Net investment income 3.00 2.81+
- ------------------------------------------------------------------------------------
</TABLE>
(4) For the period from February 12, 1996 (inception date) to March 31, 1996.
++ Total return is not annualized, as it may be representative of the total
return for the year.
+ Annualized.
5
<PG$PCN>
INVESTMENT OBJECTIVE AND POLICIES
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
Smith Barney Mutual Funds Management Inc. (the "Manager") will review the
proceedings relating to the issuance of municipal obligations or the bases for
such opinions.
The two principal 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. Please
see the Statement of Additional Information for a more detailed discussion about
the different types of municipal obligations.
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 $1.00 price.
The Fund's investments will be limited to obligations that the Board of
Directors determines present minimal credit risks and that (i) are secured by
the full faith and credit of the United States or (ii) are "Eligible
Securities," as defined by the Investment Company Act of 1940, as amended, (the
"1940 Act"), at the time of acquisition by the Fund. The term "Eligible
Securities" includes securities rated by the "Requisite NRSROs" in one of the
two highest short-term rating categories, securities of issuers that have
received such ratings with respect to other short-term debt securities and
comparable unrated securities. "Requisite NRSROs" means any nationally
recognized statistical rating organizations ("NRSROs") that have issued ratings
with respect to a security or class of debt obligations of an issuer. Currently,
there
6
<PG$PCN>
INVESTMENT OBJECTIVE AND POLICIES (CONTINUED)
are six NRSROs: Standard & Poor's Ratings Group, 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
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 without limit in private activity bonds. Interest
income on certain types of private activity bonds issued after August 7, 1986,
7
<PG$PCN>
INVESTMENT OBJECTIVE AND POLICIES (CONTINUED)
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 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 one or more of
the three principal types of derivative product structures described below.
Derivative products are typically structured by a bank, broker-dealer or other
financial institution. A derivative product generally consists of a trust or
partnership through which the Fund holds an interest in one or more underlying
bonds coupled with a conditional right to sell ("put") the Fund's interest in
the underlying bonds at par plus accrued interest to a financial institution (a
"Liquidity Provider"). Typically, a derivative product is structured as a trust
or partnership which provides for pass-through tax-exempt income. There are
currently three principal types of derivative structures: (1) "Tender Option
Bonds", which are instruments which grant the holder thereof the right to put an
underlying bond at par plus accrued interest at specified intervals to a
Liquidity Provider; (2) "Swap Products", in which the trust or partnership swaps
the payments due on an underlying bond with a swap counterparty who agrees to
pay a floating municipal money market interest rate; and (3) "Partnerships",
which allocate to the partners income, expenses, capital gains and losses in
accordance with a governing partnership agreement.
Investments in derivative products raise certain tax, legal, regulatory and
accounting issues which may not be presented by investments in other municipal
bonds. There is some risk that certain issues could be resolved in a manner
which could adversely impact the performance of the Fund. For example, the
tax-exempt treatment of the interest paid to holders of derivative products is
premised on the legal conclusion that the holders of such derivative products
have an ownership interest in the underlying bonds. While the Fund receives an
opinion of legal counsel to the effect that the income from each derivative
product is tax-exempt to the same extent as the underlying bond, the Internal
Revenue Service (the "IRS") has not issued a ruling on this subject. Were the
IRS to issue an adverse ruling, there is a risk that the interest paid on such
derivative products would be deemed taxable.
8
<PG$PCN>
INVESTMENT OBJECTIVE AND POLICIES (CONTINUED)
The Fund intends to limit the risk of derivative products by purchasing
only those derivative products that are consistent with the Fund's investment
objective and policies. The Fund will not use such instruments to leverage
securities. Hence, derivative products' contributions to the overall market risk
characteristics of a Fund will not materially alter its risk profile and will be
fully representative of the Fund's maturity guidelines.
The Fund will not invest more than 10% of the value of its assets in
illiquid securities, which, under certain circumstances, will include derivative
products.
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 1940 Act. (See "Voting Rights" in the Statement of Additional
Information.)
RISK AND PORTFOLIO MANAGEMENT
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
9
<PG$PCN>
RISK AND PORTFOLIO MANAGEMENT (CONTINUED)
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, debt securities
of any grade or equity securities having a value equal to or greater than the
Fund's purchase commitments, provided such securities have been determined by
the Manager to be liquid and unencumbered, and are marked to market daily,
pursuant to guidelines established by the Board of Directors, 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
$1.00 per share. (See "Valuation of Shares.") And there will be a greater
potential for the realization of capital gains, which are not exempt from
Federal income taxes.
Stand-By Commitments. The Fund may acquire "stand-by commitments" with
respect to municipal obligations held in its portfolio. Under a stand-by
commitment a dealer agrees to purchase, at the Fund's option, specified
municipal obligations at a specified price. The Fund intends to enter into
stand-by commitments only with dealers, banks and broker-dealers which, in the
opinion of the investment manager, present minimal credit risks. In evaluating
the creditworthiness of the issuer of a stand-by commitment, the investment
manager will review periodically the issuer's assets, liabilities, contingent
claims and other relevant financial information. Because the Fund invests in
securities backed by banks and other financial institutions, change in the
credit quality of these institutions could cause losses to the Fund and effect
its share price. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes.
Other Factors to be Considered. The Fund anticipates being as fully
invested as practicable in tax exempt securities. The Fund may invest in taxable
investments due to market conditions or pending investment of
10
<PG$PCN>
RISK AND PORTFOLIO MANAGEMENT (CONTINUED)
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.
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 includes
11
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DIVIDENDS, AUTOMATIC REINVESTMENT AND TAXES (CONTINUED)
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 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
12
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DIVIDENDS, AUTOMATIC REINVESTMENT AND TAXES (CONTINUED)
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 of 1986
on an investment in the Fund.
PURCHASE OF SHARES
Purchases of Fund shares may 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. Smith Barney and
other broker/dealers may charge their customers an annual account maintenance
fee in connection with a brokerage account through which an investor purchases
or holds shares. Accounts held directly at First Data are not subject to a
maintenance fee.
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 least $5,000,000. Subsequent investments
of at least $50 may be made for either Class. For shareholders purchasing shares
of the Fund through the Systematic Investment Plan on a monthly basis, the
minimum initial investment requirement for Class A shares and the subsequent
investment requirement for all Classes is $25. For shareholders purchasing
shares of the Fund through the Systematic Investment Plan on a quarterly basis,
the minimum initial investment requirement for Class A shares and the subsequent
investment requirement for all Classes is $50. There are no minimum investment
requirements in Class A for employees of Travelers Group Inc. ("Travelers") and
its subsidiaries, including Smith Barney, and Directors or Trustees of any of
the Smith Barney Mutual Funds, 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. Shares purchased
will be held in the shareholder's account by the
13
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PURCHASE OF SHARES (CONTINUED)
Fund's transfer agent, First Data Investor Services Group, Inc. ("First Data").
Share certificates are issued only upon a shareholder's written request to First
Data.
Class A and Class Y shares of the Fund are available for purchase directly
by investors. Class C shares are not available for purchase directly by
investors; they may only be redeemed or exchanged out of the Fund.
For investors who maintain a brokerage account with Smith Barney, Smith
Barney has advised the Fund that depending on the type of securities account,
its clients' free credit balances (i.e., immediately available funds) may be
invested automatically in full shares of the Fund either on a daily or weekly
basis. In addition to this "sweep" service, shareholders who open a Smith Barney
FMA(R)PLUS(SM) account, which is a full service investment account, will also be
able to take advantage of, among other things: a free Individual Retirement
Account ("IRA"), free dividend reinvestment, unlimited checking, 100 free ATM
withdrawals each year and online computer access to account information. Smith
Barney clients should contact their Financial Consultant for more complete
information. A complete record of Fund dividends, purchases and redemptions will
be included on such shareholders' regular Smith Barney statements.
The minimum initial investment requirement in the Fund for an account
established under the Uniform Gift to Minors Act is $250 and the subsequent
investment requirement is $50.
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 the Fund, Smith Barney or an Introducing Broker
receives, or converts the purchase amount into, Federal funds (i.e., monies of
member banks within the Federal Reserve System held on deposit at a Federal
Reserve Bank). When orders for the purchase of Fund shares are paid for in
Federal funds, or are placed by an investor with sufficient Federal funds or
cash balance in the investor's brokerage account with Smith Barney or the
Introducing Broker, 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 or the Introducing Broker, acting on behalf of the investor, will
complete the conversion into, or itself advance, Federal funds, and the order
will become effective on the day following its receipt by the Fund, Smith Barney
or the Introducing Broker.
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PURCHASE OF SHARES (CONTINUED)
Shares purchased directly through First Data begin to accrue income dividends on
the day that the purchase order becomes effective. All other shares purchased
begin to accrue income dividends on the next business day following the day that
the purchase order becomes effective.
SYSTEMATIC INVESTMENT PLAN
Upon completion of certain automated systems, shareholders may make
additions to their accounts at any time by purchasing shares through a service
known as the Systematic Investment Plan. Under the Systematic Investment Plan,
Smith Barney or First Data is authorized through preauthorized transfers of at
least $25 on a monthly basis or at least $50 on a quarterly basis to charge the
regular bank account or other financial institution indicated by the shareholder
on a monthly or quarterly basis to provide systematic additions to the
shareholder's Fund account. A shareholder who has insufficient funds to complete
the transfer will be charged a fee of up to $25 by Smith Barney or First Data.
Additional information is available from the Fund or a Smith Barney Financial
Consultant.
LETTER OF INTENT
Class Y Shares. A Letter of Intent provides an opportunity for investors
to meet the minimum investment requirement for Class Y shares by aggregating
investments over a six-month period. Such investors must make an initial minimum
purchase of $1,000,000 in Class Y shares of the Fund and agree to purchase a
total of $5,000,000 of Class Y shares of the same Fund within six months from
the date of the Letter. If a total investment of $5,000,000 is not made within
the six-month period, all Class Y shares purchased to date will be transferred
to Class A shares, where they will be subject to all fees (including a service
fee of 0.10%) and expenses applicable to the Fund's Class A shares, which may
include a CDSC of 1.00%. Please contact a Smith Barney Financial Consultant or
First Data for further information.
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 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.
15
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REDEMPTION OF SHARES (CONTINUED)
The Fund normally transmits redemption proceeds 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,
except on days on which the New York Stock Exchange is closed and settlement of
securities does not otherwise occur, or as permitted under the 1940 Act in
extraordinary circumstances. Generally, if the redemption proceeds are remitted
to a 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 or an Introducing
Broker 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 or
the Introducing Broker. 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 or the Introducing Broker 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, an Introducing
Broker or the securities dealer through whom the shares are purchased. A
shareholder desiring to redeem shares represented by certificates also must
present the certificates to Smith Barney, the Introducing Broker or First Data
endorsed for transfer (or accompanied by an endorsed stock power), signed
exactly as the shares are registered. Redemption requests involving shares
16
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REDEMPTION OF SHARES (CONTINUED)
represented by certificates will not be deemed received until the certificates
are received by First Data 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 First Data together with the redemption request. Any
signature appearing on a share certificate, stock power or written redemption
request in excess of $2,000 must be guaranteed by an eligible guarantor
institution such as a domestic bank, savings and loan institution, domestic
credit union, member bank of the Federal Reserve System or member firm of a
national securities exchange. Written redemption requests of $2,000 or less do
not require the signature guarantee unless more than one such redemption request
is made in any 10-day period. Redemption proceeds will be mailed to an
investor's address of record. First Data may require additional supporting
documents for redemptions made by corporations, executors, administrators,
trustees or guardians. A redemption request will not be deemed properly received
until First Data receives all required documents in proper form.
TELEPHONE REDEMPTION AND EXCHANGE PROGRAM
Shareholders who do not have a Smith Barney brokerage account may be
eligible to redeem and exchange Fund shares by telephone. To determine if a
shareholder is entitled to participate in this program, he or she should contact
First Data at 1-800-451-2010. Once eligibility is confirmed, the shareholder
must complete and return a Telephone/Wire Authorization Form, along with a
signature guarantee, that will be provided by First Data upon request.
(Alternatively, an investor may authorize telephone redemptions on the new
account application with the applicant's signature guarantee when making his/her
initial investment in the Fund.)
Redemptions. Redemption requests of up to $10,000 of any class or classes
of the Fund's shares, may be made by eligible shareholders by calling First Data
at 1-800-451-2010. Such requests may be made between 9:00 a.m. and 5:00 p.m.
(New York City time) on any day the NYSE is open. Redemptions of shares (i) by
retirement plans or (ii) for which certificates have been issued are not
permitted under this program.
A shareholder will have the option of having the redemption proceeds mailed
to his/her address of record or wired to a bank account predesignated by the
shareholder. Generally, redemption proceeds will be
17
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REDEMPTION OF SHARES (CONTINUED)
mailed or wired, as the case may be, on the next business day following the
redemption request. In order to use the wire procedures, the bank receiving the
proceeds must be a member of the Federal Reserve System or have a correspondent
relationship with a member bank. The Fund reserves the right to charge
shareholders a nominal fee for each wire redemption. Such charges, if any, will
be assessed against the shareholder's account from which shares were redeemed.
In order to change the bank account designated to receive redemption proceeds, a
shareholder must complete a new Telephone/Wire Authorization Form and, for the
protection of the shareholder's assets, will be required to provide a signature
guarantee and certain other documentation.
Exchanges. Eligible shareholders may make exchanges by telephone if the
account registration of the shares of the fund being acquired is identical to
the registration of the shares of the fund exchanged. Such exchange requests may
be made by calling First Data at 1-800-451-2010 between 9:00 a.m. and 5:00 p.m.
(New York City time) on any day on which the NYSE is open. See "Exchange
Privilege" for more information.
Additional Information Regarding Telephone Redemption and Exchange
Program. Neither the Fund nor its agents will be liable for following
instructions communicated by telephone that are reasonably believed to be
genuine. The Fund and its agents will employ procedures designed to verify the
identity of the caller and legitimacy of instructions (for example, a
shareholder's name and account number will be required and phone calls may be
recorded). The Fund reserves the right to suspend, modify or discontinue the
telephone redemption and exchange program or to impose a charge for this service
at any time following at least seven (7) days prior notice to shareholders.
CONTINGENT DEFERRED SALES CHARGE
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 distribution.
18
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REDEMPTION OF SHARES (CONTINUED)
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 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 Fund 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 First Data 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 may apply.
19
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EXCHANGE PRIVILEGE (CONTINUED)
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 Large Capitalization Growth Fund
Smith Barney Managed Growth Fund
Smith Barney Natural Resources Fund Inc.
Smith Barney Disciplined Small Cap Fund, Inc.
Smith Barney Special Equities Fund
Growth and Income Funds
Concert Social Awareness Fund
Smith Barney Convertible Fund
Smith Barney Funds, Inc. -- Equity Income Portfolio
Smith Barney Growth and Income Fund
Smith Barney Premium Total Return 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. -- 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 Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Muni Funds -- Florida 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 -- Pennsylvania Portfolio
20
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EXCHANGE PRIVILEGE (CONTINUED)
Smith Barney New Jersey Municipals Fund Inc.
Smith Barney Oregon Municipals Fund
Smith Barney Tax-Exempt Income Fund
International Funds
Smith Barney World Funds, Inc. -- Emerging Markets Portfolio
Smith Barney World Funds, Inc. -- European Portfolio
Smith Barney World Funds, Inc. -- Global Government Bond Portfolio
Smith Barney World Funds, Inc. -- International Balanced Portfolio
Smith Barney World Funds, Inc. -- International Equity Portfolio
Smith Barney World Funds, Inc. -- Pacific Portfolio
Smith Barney Concert Allocation Series Inc.
Smith Barney Concert Allocation Series Inc. -- Balanced Portfolio
Smith Barney Concert Allocation Series Inc. -- Conservative Portfolio
Smith Barney Concert Allocation Series Inc. -- Growth Portfolio
Smith Barney Concert Allocation Series Inc. -- High Growth Portfolio
Smith Barney Concert Allocation Series Inc. -- Income 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 upon the exchange of such shares for Class A shares of
another fund of the Smith Barney Mutual Funds sold with a sales charge.
Class 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.
21
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EXCHANGE PRIVILEGE (CONTINUED)
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
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 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.
Certain shareholders may be able to exchange shares by telephone. See
"Redemption of Shares -- Telephone Redemption and Exchange Program." Exchanges
will be processed at the net asset value next determined plus any applicable
sales charge. Redemption procedures discussed above are also applicable for
exchanging shares, and exchanges will be made upon receipt of all supporting
documents in proper form. If the account registration of the shares of the fund
being acquired is identical to the registration of the shares of the fund
exchanged, no signature guarantee is required. 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 $500, in which event the shareholder will receive prior written notice
and will be permitted 60 days to bring the account up to the minimum to avoid
involuntary liquidation. Any applicable CDSC will be deducted from the proceeds
of this liquidation. (If a shareholder has more than one account in the Fund,
each account must satisfy the minimum account size.)
22
<PG$PCN>
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
BOARD OF DIRECTORS
Overall responsibility for management and supervision of the Fund rests
with the Fund's Board of Directors. The Directors approve all significant
agreements between the Fund and the companies that furnish services to the Fund,
including agreements with the Fund's distributor, investment manager, custodian
and transfer agent. The day-to-day operations of the Fund are delegated to the
Fund's investment manager. The Statement of Additional Information contains
background information regarding each Director and executive officer of the
Fund.
MANAGER
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 1968 under the laws of the
State of Delaware. SBMFM is controlled by Smith Barney Holdings Inc.,
("Holdings") the parent company of Smith Barney. Holdings is a wholly-owned
subsidiary of Travelers, a financial services holding company engaged, through
its subsidiaries, principally in four business segments: Investment Services,
Consumer
23
<PG$PCN>
MANAGEMENT OF THE FUND (CONTINUED)
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 March
31, 1997 of approximately $83 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 management fee was 0.47% of the Fund's average
net assets and the total expenses were 0.67%, 0.67% and 0.57% of average net
assets for Class A, Class C and Class Y shares, respectively. The Fund's
management agreement 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 the net assets in excess of $5 billion.
The Manager has agreed that to the extent that in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest and extraordinary
expenses such as litigation costs, exceed 0.70% of the average daily net assets
for that fiscal year of the Fund, the Manager will reduce its fee or reimburse
the Fund to the extent of such excess. The 0.70% voluntary expense limitation
shall be in effect until it is terminated by notice to shareholders and by
supplement to the then current prospectus.
SBMFM, in effecting purchases and sales of portfolio securities for the
account of the Fund, implements the Fund's policy of seeking the best execution
of orders. The Fund's portfolio transactions have for the most part been
principal transactions directly with the major underwriters for, and dealers in,
tax exempt money market instruments. No brokerage commissions are paid on such
transactions, but the price paid to underwriters or dealers will normally
include an underwriter's spread or dealer's markup. The primary consideration in
the allocation of transactions is prompt execution of orders in an effective
manner at the most favorable price. Under certain circumstances, transactions
will be effected with remarketing agents who receive fees from the issuers for
services rendered. No principal transactions are handled by Smith Barney.
The term "Smith Barney" in the title of the Fund has been adopted by
permission of Smith Barney and is subject to the right of Smith Barney to
24
<PG$PCN>
MANAGEMENT OF THE FUND (CONTINUED)
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 sold to the public. Under a plan of distribution pursuant
to Rule 12b-1 (the "Plan") under the 1940 Act, a service fee is paid by each of
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.
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.
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
25
<PG$PCN>
ADDITIONAL INFORMATION (CONTINUED)
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 1940 Act.
PNC Bank, National Association, located at 17th and Chestnut Streets,
Philadelphia, Pennsylvania 19103, serves as custodian of the Fund's investments.
First Data, located at Exchange Place, Boston, Massachusetts 02109, serves
as the Fund's transfer agent.
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.
26
PART B
July 29, 1997
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 29, 1997 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 5
Valuation of Shares and
Amortized Cost Valuation 5
Additional Tax Information 6
Management Agreement, Plan of Distribution
and Other Services 7
Repurchase Agreements 8
"Puts" 8
Voting Rights 9
Custodian, Transfer and Dividend Disbursing Agent 9
Independent Auditors 9
Financial Statements 10
Ratings of Municipal Notes and Bonds 11
DIRECTORS AND OFFICERS
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; 79.
DONALD R. FOLEY, Director
Retired, 3668 Freshwater Drive, Jupiter, Florida 33477. Director of
ten investment companies associated with Smith Barney. Formerly Vice
President of Edwin Bird Wilson, Incorporated (advertising); 74.
PAUL HARDIN, Director
Interim President of University of Alabama at Birmingham; Professor of
Law at University of North Carolina at Chapel Hill, 103 S. Building,
Chapel Hill, North Carolina 27599; Director of twelve investment
companies associated with Smith Barney; and a Director of The Summit
Bancorporation; Formerly, Chancellor of the University of North
Carolina at Chapel Hill, University of North Carolina; 65.
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.; 72.
*HEATH B. McLENDON, Chairman of the Board and Chief Executive Officer
Managing Director of Smith Barney ; Chairman of forty-one investment
companies associated with Smith Barney; President of Smith Barney
Mutual Funds Management Inc. ("SBMFM" or the "Manager") and Travelers
Investment Advisor, Inc. ("TIA"); Chairman of the Board of Smith
Barney Strategy Advisors Inc.; prior to July 1993, Senior Executive
Vice President of Shearson Lehman Brothers; Vice Chairman of Shearson
Asset Management; 63.
RODERICK C. RASMUSSEN, Director
Investment Counselor, 9 Cadence Ct., Morristown, New Jersey 07960.
Director of ten investment companies associated with Smith Barney.
Formerly Vice President of Dresdner and Company Inc. (investment
counselors); 71.
JOHN P. TOOLAN, Director
Retired, 13 Chadwell Place, Morristown, New Jersey 07960. Director of
ten investment companies associated with Smith Barney; Director of
John Hancock Funds. Formerly, Director and Chairman of the Smith
Barney Trust Company, Director of Smith Barney and the Manager and
Senior Executive Vice President, Director and Member of the Executive
Committee of Smith Barney; 66.
C. RICHARD YOUNGDAHL, Director Emeritus
Retired, 339 River Drive, Tequesta, Florida 33469. Director of ten
investment companies associated with Smith Barney and a member of the
Board of Directors of D. W. Rich & Company, Inc. Formerly Chairman
of the Board of Pensions of the 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; 81.
*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, Chief Financial Officer and Senior Vice President of the
Manager and TIA; 39.
*PETER COFFEY, Vice President
Managing Director of Smith Barney and Vice President of three
investment companies associated with Smith Barney and the Manager; 54.
*JOSEPH BENEVENTO, Vice President
Director of Smith Barney in the Greenwich Street Advisors Division and
Vice President of Smith Barney Muni Funds; 29.
*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; 49.
*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 Data Investment Management Company;
36.
*CHRISTINA T. SYDOR, Secretary
Managing Director of Smith Barney and Secretary of forty-one
investment companies associated with Smith Barney; Secretary and
General Counsel of the Manager and TIA; 46.
On July 3, 1997, Directors and officers owned in the aggregate less
than 1% of the outstanding securities of the Fund.
___________________
*Designates "interested persons" as defined in the Investment Company
Act of 1940 whose business address is 388 Greenwich Street, New York,
New York 10013. Such persons are not separately compensated for
their services as Fund officers or Directors.
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.
COMPENSATION TABLE
Total
Pension or Compensation Number of
Retirement from Fund Funds for
Aggregate Benefits Accrued and Fund Which Director
Compensation as part of Complex Serves Within
Name of Person from Fund Fund Expenses Paid to Directors Fund Complex
Joseph H. Fleiss $5,740 0 $58,600 10
Donald R. Foley 5,740 58,60 10
Paul Hardin 5,740 0 74,150 12
Francis P. Martin 5,740 0 58,600 10
Heath B. McLendon* 0 0 0 41
Roderick C. Rasmussen 5,740 0 58,600 10
John P. Toolan 5,740 0 58,600 10
C. Richard Youngdahl** 4,477 0 45,300 10
* Designates an "interested director".
** Effective January 1, 1997, Mr. Youngdahl elected to become Director
Emeritus.
+ Pursuant to the Fund's deferred compensation plan, the indicated
Directors have elected to defer the following payment of some or all
of their compensation: Joseph H. Fleiss - $2,520; Donald R. Foley -
$2,520; Francis P. Martin $5,740; and John P. Toolan - $5,740.
Upon attainment of age 72 the Fund's current Directors may elect to
change to emeritus status. Any directors elected or appointed to the
Board in the future will be required to change to emeritus status upon
attainment of age 80. Directors Emeritus are entilted to serve in
emeritus status for a maximum of 10 years during which time they are
paid 50% of the annual retainer fee and meeting fees otherwise
applicable to the Fund's Directors, together with reasonable out-of-
pocket expenses for each meeting attended. During the Fund's last
fiscal year aggregate compensation paid by the Fund to Directors
achieving emeritus status totaled $633.
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, 1997 for
Class A shares was 2.86% (the effective yield was 2.90%), for Class C
shares 2.86% (the effective yield was 2.90%) and for Class Y shares
was 2.96% (the effective yield was 3.00%) with an average dollar-
weighted portfolio maturity of 48 days. 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, Martin Luther King 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.
ADDITIONAL TAX INFORMATION
Capital gain distributions, if any, are taxable to shareholders, and
are declared and paid at least annually. At March 31, 1997 the
unused capital loss carryovers of the Fund was approximately
$1,361,000
For Federal income tax purposes theses amounts are available to be
applied against future securities gains, if any, realized. The
carryovers expire as follows:
March 31,
2000 2001 2002 2003 2004
(in thousands)
$97 $1,086 $37 $72 $69
Generally, interest on municipal obligations is exempt from Federal
income tax. However, interest on municipal obligations that are
considered to be industrial development bonds (as defined in the
Internal Revenue Code (the "Code"), will not be exempt from Federal
income tax to any shareholder who is considered to be a "substantial
user" of any facility financed by the proceeds of such obligations (or
a
"related person" to such "substantial user" as defined in the Code).
In addition, interest on municipal obligations may subject certain
investors' Social Security benefits to Federal income taxation.
Section 86 of the Internal Revenue Code provides that the amount of
Social
Security benefits includable in gross income for a taxable year is the
lesser of (a) one-half of the Social Security benefits or (b) one-half
of the amount by which the sum of "modified adjusted gross income"
plus
one-half of the Social Security benefits exceeds a "base amount." The
base amount is $25,000 for unmarried taxpayers, $32,000 for married
taxpayers filling a joint return and zero for married taxpayers not
living apart who file separate returns. Modified adjusted gross
income is adjusted gross income determined without regard to certain
otherwise allowable deductions and exclusions from gross income, plus
tax-exempt interest on municipal obligations. To the extent that
Social Security
benefits are included in gross income they will be treated as any
other item of gross income and therefore may be taxable. Tax-exempt
interest is included in modified adjusted gross income solely for the
purpose of determining what portion, if any, of Social Security
benefits will be included in gross income; no tax-exempt interest,
including that received from the Fund, will be subject to Federal
income tax for most
investors.
Additionally, the Tax Reform Act of 1986 (the "Tax Reform Act")
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 Portfolio's exempt-interest dividend which is to be treated as a
preference item for shareholders will be based on the proportionate
share of the interest received by the Portfolio from the specified
private activity bonds. In addition, the Tax Reform Act provides
generally that tax preference items for corporations for 1987-1989
will include one-half the amount by which adjusted net book income
(which would include tax-exempt interest) of the taxpayer exceeds the
alternative minimum taxable income of the taxpayer before any amount
is added to alternative minimum taxable income because of this
preference.
A similar provision based on adjusted earnings and profits would apply
after 1989. Investors should consult their tax advisors before
investing in shares of the Fund.
From time to time, proceedings have been introduced before Congress
for the purpose of restricting or eliminating the Federal income tax
exemption for interest on municipal obligations. It may be expected
that similar proposals may be introduced in the future. If such
proposals were to be enacted, the ability of the Fund to pay "exempt
interest" dividends could be adversely affected and the Fund would
then
need to reevaluate its investment objectives and policies and consider
changes in its structure.
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 1995, 1996 and 1997, the management fees were
$11,805,456, $24,738,969 and $26,073,153, respectively, and there were
no expense limitation reimbursements (see "Management of the Fund" in
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.
For the fiscal year ended March 31, 1997, the table below represents
the fees which have been accrued and/or paid to Smith Barney under
the Plans of Distribution pursuant to Rule 12b-1 for the Fund's
Portfolios. The distribution expenses for 1997 included compensation
of Financial Consultants and printing costs of prospectuses and
marketing materials.
Class A Class C Class Y Total
$5,356,355 $134 N/A $5,356,489
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 "Risk and Portfolio Management" 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 3, 1997, Vision Communications Svcs Inc. 31 Floyds Run,
Bohemia, NY 11716-2155 owned 4,549.150 (55.81%) and Cliff Palefsky,
119 Third Avenue, San Francisco, CA 94118-1418 owned of record or
beneficially, 3,535 (43.38%) of the outstanding Class C shares of the
Fund. Charles P. Ryan and Cecily B. Ryan, 122 Oxford Blvd., Garden
City, NY 11530-2716 owned of record or beneficially 3,225,925.500
(47.59%) of the outstanding Class Y shares of the Fund; Kevin T. Ryan
c/o Charan Industries, 370 Old Country Rd., Garden City, NY 11530-
1702 owned of record or beneficially 3,044,728.660 (44.92%) of the
outstanding Class Y shares of the Fund; and Victoria A. Diaz c/o Paul
Diaz, 4041 Powder Mill Rd.., Suite 410, Calverton, MD 20705-3127
owned of record or beneficially 508,178.30 (7.49%) of the outstanding
Class Y 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. First Data Investor 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 the Fund's independent auditors to examine and report
on the Fund's financial statements and highlights for the fiscal year
ending March 31, 1998.
FINANCIAL STATEMENTS
The following financial information is hereby incorporated by
reference to the indicated pages of the Fund's 1997 Annual Report to
Shareholders, a copy of which is furnished with this Statement of
Additional Information:
Page(s)
Schedule of Investments at March 31, 1997 4-29
Statement of Assets and Liabilities at March 31, 1997
(including specimen computation of net asset value,
offering and redemption price per share) 32
Statement of Operations for the year ended
March 31, 1997 33
Statements of Changes in Net Assets for the years ended
March 31, 1997 and 1996 34
Notes to Financial Statements 35-37
Financial Highlights 38-39
Independent Auditors' Report 40
RATINGS OF MUNICIPAL NOTES AND BONDS
Description of Ratings of State and Local Government Municipal Notes
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 Fund's Annual Report for the fiscal year ended March 31, 1997 and
the Report of Independent Auditors dated May 14, 1997 are incorporated
by reference to the Rule N-30D filing, Accession #: 0000091155-97-269,
made on June 4, 1997.
(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 Amendment No. 15.
(d) Articles of Amendment dated November 10, 1992 are
incorporated by reference to Exhibit 1(d) to Post-Effective
Amendment No. 20
(e) Articles Supplementary dated December 8, 1992 are
incorporated by refence to Exhibit 1(e) to Post-Effective
Amendment No. 20.
(f) Articles of Amendment dated October 14, 1994 are incorporated by reference
to Exhibit 1(f) to Post-Effective Amendment No. 26
(g) Articles of Amendment dated November 4, 1994 are incorporated by reference
to Exhibit 1(g) to Post-Effective Amendment No. 26
(h) Articles Supplementary dated November 7, 1994 are incorporated by
reference
to Exhibit 1(h) to Post-Effective Amendment No. 26
(I) Articles Supplementary dated November 7, 1994 are incorporated by
reference
to Exhibit 1(i) to Post-Effective Amendment No. 26
(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) (a) Management Agreement between Registrant and Mutual Management
Corp.is incorporated by reference to Exhibit (5) to Post-
Effective Amendment No. to the Registration Statement.
(b) Transfer and Assumption of Management Agreement is incorporated
by reference to Exhibit 5(b) to Post-Effective Amendment No. 26.
(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 First Data
Investor Services Group Inc. is incorporated by reference to Exhibit 9 to
Post-Effective Amendment No. 26.
(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 (filed herewith)
(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 is
incorporated by reference to Exhibit 15 to Post-Effecitve Amendment
No. 23.
(16) Schedule of Computation of Performance Quotations is incorporated
by reference to Exhibit 16 to Post-Effective Amendment No. 10.
(17) Financial Data Schedule (filed herewith)
(18) Plan 3 pursuant to Rule 18f-3 is incorporated by reference to
Exhibit 18 to Post-Effective Amendment No. 25.
Item 25. Persons Controlled by or under Common Control with Registrant
(None)
Item 26. Number of Holders of Securities as of July 3, 1997
Class A securities 132,278
Class C securities 7
Class Y securities 4
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
Smith Barney Mutual Funds Management Inc. (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. ("Smith Barney") also acts as principal
underwriter for Consulting Group Capital Markets Funds;
Global Horizons Investment Series (Cayman Islands);
Greenwich Street California Municipal Fund Inc.;
Greenwich Street Municipal Fund Inc.;
High Income Opportunity Fund Inc.; The Italy Fund Inc.;
Managed High Income Portfolio Inc.;
Managed Municipals Portfolio II Inc.; Managed Municipals Portfolio Inc.;
Municipal High Income Fund Inc.; Puerto Rico Daily Liquidity Fund Inc.;
Smith Barney Adjustable Rate Government Income Fund;
Smith Barney Aggressive Growth Fund Inc.;
Smith Barney Appreciation Fund Inc.;
Smith Barney Arizona Municipals Fund Inc.;
Smith Barney California Municipals Fund Inc.;
Smith Barney Concert Allocation Series Inc.;
Smith Barney Disciplined Small Cap Fund, Inc.;
Smith Barney Equity Funds; Smith Barney Fundamental Value Fund Inc.;
Smith Barney Funds, Inc.; Smith Barney Income Funds;
Smith Barney Income Trust;
Smith Barney Institutional Cash Management Fund, Inc.;
Smith Barney Intermediate Municipal Fund, Inc.;
Smith Barney Investment Funds Inc.;
Smith Barney Investment Trust; Smith Barney Managed Governments Fund Inc.;
Smith Barney Managed Municipals Fund Inc.;
Smith Barney Massachusetts Municipals Fund;
Smith Barney Money Funds, Inc.; Smith Barney Muni Funds;
Smith Barney Municipal Fund, Inc.;
Smith Barney Municipal Money Market Fund, Inc.;
Smith Barney Natural Resources Fund Inc.;
Smith Barney New Jersey Municipals Fund Inc.;
Smith Barney Oregon Municipals Fund Inc.;
Smith Barney Principal Return Fund; Smith Barney Series Fund;
Smith Barney Telecommunications Trust; Smith Barney Variable Account Funds;
Smith Barney World Funds, Inc.;
Worldwide Special Fund N.V. (Netherlands Antilles);
Travelers Series Fund Inc.; The USA High Yield Fund N.V.;
Worldwide Securities Limited (Bermuda); Zenix Income Fund Inc.
and various series of unit investment trusts.
(b) The information required by this Item 29 with respect to each
director and officer of Smith Barney is incorporated by reference to
Schedule A of Form BD filed by Smith Barney 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 First Data Investor Services
Group, Inc., Exchange Place, Boston, Massachusetts 02109-2873, will
maintain the custodian and the shareholders servicing agent records,
respectively required by Section 31(a) of the Investment Company Act
of 1940, as amended (the "1940 Act").
All other records required by Section 31(a) are maintained at the
offices of the Registrant at 388 Greenwich Street, New York, New York
10013 (and preserved for the periods specified by Rule 31a-2 of the
1940 Act).
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable
(c) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest report to shareholders,
upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it
meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned, and where applicable,
the true and lawful attorney-in-fact, thereto duly authorized,
in the City of New York, and State of New York on the 24th day of July 1997.
SMITH BARNEY MUNICIPAL MONEY MARKET FUND, INC.
BY/s/ Heath B. McLendon
Heath B. McLendon
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
Signatures Title Date
/s/ Heath B. McLendon Chairman of the Board July 24, 1997
(Heath B. McLendon) and Chief Executive Officer
Joseph H. Fleiss* Director July 24, 1997
(Joseph H. Fleiss)
Donald R. Foley* Director July 24, 1997
(Donald R. Foley)
Paul Hardin* Director July 24, 1997
(Paul Hardin)
Francis P. Martin* Director July 24, 1997
(Francis P. Martin)
Roderick C. Rasmussen* Director July 24, 1997
(Roderick C. Rasmussen)
John P. Toolan* Director July 24, 1997
(John P. Toolan)
/s/ Lewis E. Daidone Treasurer and Principal July 24, 1997
(Lewis E. Daidone) Financial Officer
*By: /s/ Christina T. Sydor July 24, 1997
Christina T. Sydor
Pursuant to Power of Attorney
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
11 (ii) Auditors' Consent
(17) Financial Data Schedule
Independent Auditors' Consent
To the Shareholders and Board of Directors of
the Smith Barney Municipal Money Market Fund, Inc.:
We consent to the use of our report dated May 14, 1997, 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
New York, New York
July 24, 1997
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