Registration No. 2-71469
811-3158
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 27 X
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 X
Amendment No. 30 X
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(Exact name of Registrant as Specified in Charter)
388 Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 720-9218
Christina T. Sydor
Secretary
Smith Barney Fundamental Value Fund Inc.
388 Greenwich Street
New York, New York 10013
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment
becomes effective.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to Rule 485(b)
on pursuant to Rule 485(b)
60 days after filing pursuant to Rule 485(a)
on pursuant to Rule 485(a)
The Registrant has previously filed a declaration of indefinite
registration of its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended. Registrant's Rule 24f-2 Notice for the
fiscal year ended September 30, 1994 was filed on or about November 30,
1994.
The registrant, Smith Barney Fundamental Value Fund Inc., a Maryland
corporation, is the sucessor to Smith Barney Fundamental Value Fund Inc.,
a Washington corporation, pursuant to Rule 414 of the Securities Act of 1933
(the "Act"), has, effective with post-effective amendment number 25 to this
registration statement, adopted this registration statement for all purposes
under the Act and the Securities Exchange Act of 1934.
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
Part A (Prospectus for Smith Barney Fundamental Value Fund Inc.) and
Part B (Statement of Additional Information for Smith Barney Fundamental
Value Fund Inc.) are incorporated by reference to Post-Effective Amendment
No 24, as filed with the Securities and Exchange Commission ("SEC") on
January 31, 1995.
Part A
Item No.
Prospectus Caption
1. Cover Page
Cover Page
2. Synopsis
Prospectus Summary
3. Financial Highlights
Financial Highlights
4. General Description of
Registrant
Cover Page; Prospectus Summary;
Investment Objective and
Management Policies; Additional
Information
5. Management of the Fund
5A. Management's Discussion of
Fund Performance
Management of the Fund;
Distributor; Additional
Information; Annual Report
Not Applicable
6. Capital Stock and Other
Securities
Investment Objective and
Management Policies; Dividends,
Distributions and Taxes;
Additional Information ; Supplement to Prospectus dated
May 26, 1995
7. Purchase of Securities Being
Offered
Valuation of Shares; Purchase of
Shares; Exchange Privilege;
Redemption of Shares; Minimum
Account Size; Distributor;
Additional Information
8 Redemption or Repurchase
Purchase of Shares; Redemption of
Shares; Exchange Privilege
9. Pending Legal Proceedings
Not Applicable
Part B
Item No.
Statement of
Additional Information Caption
10. Cover Page
Cover page
11. Table of Contents
Table of Contents
12. General Information and
History
Distributor; Additional
Information ; Supplement to Statement of Additional Information
dated May 26, 1995
13. Investment Objectives and
Policies
Investment Objective and
Management Policies
14. Management of the Fund
Management of the Fund;
Distributor
15. Control Persons and Principal
Holders
of Securities
Management of the Fund
16. Investment Advisory and Other
Services
Management of the Fund;
Distributor
17. Brokerage Allocation and
Other Services
Investment Objective and
Management Policies; Distributor
18. Capital Stock and Other
Securities
Investment Objective and
Management Policies; Purchase of
Shares; Redemption of Shares;
Taxes
19. Purchase, Redemption and
Pricing
of Securities Being
Offered
Purchase of Shares; Redemption of
Shares; Valuation of Shares;
Distributor; Exchange Privilege
20. Tax Status
Taxes
21. Underwriters
Distributor
22. Calculation of Performance
Data
Performance Data
23. Financial Statements
Financial Statements
SMITH BARNEY
FUNDAMENTAL VALUE FUND, INC.
Supplement to the Prospectus
dated May 26, 1995
The following information updates the information found under
"Additional Information" in the prospectus of Smith Barney Fundamental
Value Fund, Inc. (the "Fund") dated February 1, 1995.
The Fund is a corporation, incorporated under the laws of the State
of Maryland on May 13, 1994, and is registered with the SEC as a
diversified, open-end management investment company.
SMITH BARNEY
FUNDAMENTAL VALUE FUND, INC.
Supplement to the Statement of Additional Information
dated May 26, 1995
The following information updates the information found under
"Additional Information" in the Statement of Additional Information of
Smith Barney Fundamental Value Fund, Inc. (the "Fund") dated
February 1, 1995.
On May 26, 1995, pursuant to a plan of reorganization and liquidation
approved by both the Board of Directors and a two-thirds majority of the
Fund's shareholders, the Fund's assets and liabilities were transferred to
a corporation incorporated under the laws of the State of Maryland on May
13, 1994.
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights
Included in Part B:
The Registrant's Annual Report for the fiscal year ended
September 30, 1994 and the Report of Independent Accountants is
incorporated by reference to the Definitive 30b-2 filed on
December 5,1994.
Included in Part C:
Consent of Independent Accountants
(b) Exhibits
All references are to the Registrant's registration statement
on Form N-1A as filed with the Securities and Exchange
Commission ("SEC"), File Nos. 2-71469 and 811-3158 (the
"Registration Statement").
(1) (a) Registrant's Articles of Incorporation dated May 13,
1994 are filed herein.
(1) (b) Articles of Amendment to be filed by amendment.
(2) Registrant's By-Laws are filed herein.
(3) Inapplicable.
(4)(a) Registrant's form of stock certificate relating to
Class A shares is filed herein.
(4)(b) Registrant's form of stock certificate relating to
Class B shares is filed herein.
(4)(c) Registrant's form of stock certificate relating to
Class C shares is filed herein.
(4)(d) Registrant's form of stock certificate relating to
Class Y shares is filed herein.
(5) Form of Investment Advisory Agreement with Smith Barney
Mutual Funds Management Inc. is filed herein.
(6) Form of Distribution Agreement between the Registrant and
Smith Barney Inc. is filed herein.
(7) Inapplicable.
(8) Custodian Agreement with PNC Bank, National Association to
is filed herein.
(9)(a) Form of Transfer Agency Agreement with Boston Safe
Deposit and Trust Company is incorporated by reference to Post-
Effective Amendment No. 4 to the Registration Statement filed
with the SEC.
(9)(b) Consent to Assignment dated March 28, 1989 between
the Registrant and The Shareholder Services Group Inc. is
incorporated by reference to Post-Effective Amendment No. 18.
(9)(c) Form of Consent to Assignment between the Registrant
and The Shareholders Services Group, Inc. is filed herein.
(9)(d) Form of Administration Agreement between the Fund and
Smith Barney Mutual Funds Management Inc. is filed herein.
(10) Opinion of Counsel filed herein.
(11) Consent of Independent Accountants is filed herein.
(12) Inapplicable.
(13) Inapplicable.
(14) Prototype Self-Employed Retirement Plan is incorporated by
reference to Post-Effective Amendment No. 10 to the
Registration Statement as filed with the SEC ("Post-Effective
Amendment No. 10").
(15) Services and Distribution Plan between the Registrant and
Smith Barney Inc. is filed herein.
(16) Performance Data is incorporated by reference to Post-
Effective Amendment No. 11.
All references are to the Registrant's Registration Statement
on Form N-1A and amendments thereto as filed with the
Securities and Exchange Commission ("SEC"), File
Nos. 2-71469 and 811-3158 (the "Registration Statement").
Item 25. Persons Controlled by or Under Common Control
with Registrant
Not applicable.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders as of
March 31, 1994
Common Stock par value $.001 per share
Class A Shares 34,362
Class B Shares 46,539
Class C Shares 905
Class Y Shares 0
The above infomation reflects recordholders of the Washington
corporation. The Registrant, a Maryland corporation, at completion of the
transfer from the Washington corporation, issued shares to the exact
recordholders of the Washington corporation. Accordingly, the above
recordholder information accurately reflects that of the Registrant.
Item 27. Indemnification
The response to this item is incorporated by reference to
Post-Effective Amendment No. 5 to the Registration Statement as
filed with the SEC ("Post-Effective Amendment No. 5").
Item 28(a). Business and Other Connections of Investment
Adviser
Investment Adviser - - Smith Barney Mutual Funds Management
Inc.
Smith Barney Mutual Funds Management Inc. ("SBMFM"), formerly
known as Smith, Barney Advisers, Inc.,) was incorporated in
December 1968 under the laws of the State of Delaware. SBMFM is
a wholly owned subsidiary of Smith Barney Holdings Inc.
(formerly known as Smith Barney Shearson Holdings Inc.), which
in turn is a wholly owned subsidiary of The Travelers Inc.
(formerly known as Primerica Corporation) ("Travelers"). SBMFM
is registered as an investment adviser under the Investment
Advisers Act of 1940 (the "Advisers Act").
The list required by this Item 28 of officers and directors of
SBMFM together with information as to any other business,
profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of
FORM ADV filed by SBA pursuant to the Advisers Act (SEC File
No. 801-8314).
Smith Barney Asset Management, Inc., ("SBAM") through its
predecessors, has been in the investment counseling business
since 1940 and is a division of SBMFM. SBMFM was incorporated
in 1968 under the laws of the state of Delaware. SBMFM is a
wholly owned subsidiary of Smith Barney Holdings Inc. (formerly
known as Smith Barney Shearson Holdings Inc.), which is in turn
a wholly owned subsidiary of The Travelers Inc. (formerly know
as Primerica Corporation) ("Travelers").
The list required by this Item 28 of officers and directors of
SBMFM, together with information as to any other business,
profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the past two
fiscal years, is incorporated by reference to Schedules A and D
of FORM ADV filed by SBMFM pursuant to the Advisers Act (SEC
File No. 801-8314).
Prior to the close of business on July 30, 1993 (the
"Closing"), Shearson Asset Management, a member of the Asset
Management Group of Shearson Lehman Brothers Inc. ("Shearson
Lehman Brothers"), served as the Registrant's investment
adviser. On the Closing, Travelers and Smith Barney Inc.
(formerly known as Smith Barney Shearson Inc.) acquired the
domestic retail brokerage and asset management business of
Shearson Lehman Brothers which included the business of the
Registrant's prior investment adviser. Shearson Lehman
Brothers was a wholly owned subsidiary of Shearson Lehman
Brothers Holdings Inc. ("Shearson Holdings"). All of the
issued and outstanding common stock of Shearson Holdings
(representing 92% of the voting stock) was held by American
Express Company. Information as to any past business vocation
or employment of a substantial nature engaged in by officers
and directors of Shearson Asset Management can be located in
Schedules A and D of FORM ADV filed by Shearson Lehman Brothers
on behalf of Shearson Asset Management prior to July 30, 1993.
(SEC FILE NO. 801-3701)
11/4/94
Item 29. Principal Underwriters
Smith Barney Inc. ("Smith Barney") currently acts as
distributor for Smith Barney Managed Municipals Fund Inc.,
Smith Barney New York Municipals Fund Inc., Smith Barney
California Municipals Fund Inc., Smith Barney Massachusetts
Municipals Fund, Smith Barney Oregon Muncipals Fund, Smith
Barney Aggressive Growth Fund Inc., Smith Barney Appreciation
Fund Inc., Smith Barney Principal Return Fund, Smith Barney
Managed Governments Fund Inc., Smith Barney Income Funds, Smith
Barney Equity Funds, Smith Barney Investment Funds Inc., Smith
Barney Precious Metals and Minerals Fund Inc., Smith Barney
Telecommunications Trust, Smith Barney Arizona Municipals Fund
Inc., Smith Barney New Jersey Municipals Fund Inc., The USA
High Yield Fund N.V., Smith Barney Fundamental Value Fund Inc.,
Smith Barney Series Fund, Consulting Group Capital Markets Funds,
Smith Barney Income Trust, Smith Barney Adjustable Rate
Government Income Fund, Smith Barney Florida Municipals Fund,
Smith Barney Funds, Inc., Smith Barney Muni Funds, Smith Barney
World Funds, Inc., Smith Barney Money Funds, Inc., Smith Barney
Tax Free Money Fund, Inc., Smith Barney Variable Account Funds,
Smith Barney U.S. Dollar Reserve Fund (Cayman), Worldwide
Special Fund, N.V., Worldwide Securities Limited, (Bermuda),
Smith Barney International Fund (Luxembourg) and various
series of unit investment trusts.
Smith Barney is a wholly owned subsidiary of Smith Barney
Holdings Inc. (formerly known as Smith Barney Holdings Inc.),
which in turn is a wholly owned subsidiary of The Travelers
Inc. (formerly known as Primerica Corporation) ("Travelers").
On June 1, 1994, Smith Barney changed its name from Smith
Barney Shearson Inc. to its current name. The information
required by this Item 29 with respect to each director, officer
and partner 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. 812-8510).
Item 30. Location of Accounts and Records
(1) With respect to the Registrant, its Distributor,
Investment Adviser and Administrator:
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
(2) With respect to the Registrant's Custodian:
PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, Pennsylvania
(3) With respect to the Registrant's Transfer Agent:
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question of
removal of a director or directors of Registrant when requested
in writing to do so by the holders of at least 10% of
Registrant's outstanding shares. Registrant undertakes further
to assist shareholders in communicating with other shareholders
in accordance with the requirements of Section 16(c) of the
Investment Company Act of 1940.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that
it meets all the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of New York and State of
New York, on the 25th day of May 1995.
SMITH BARNEY
FUNDAMENTAL VALUE FUND INC.
Registrant
By: /s/ Heath B. McLendon
Name: Heath B. McLendon
Title: Chairman of the Board
________________________________________________________________________
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature: Title: Date:
/s/Heath B. McLendon Chairman of the Board 5/25/95
Heath B. McLendon (Chief Executive Officer)
/s/Lewis E. Daidone* Senior Vice President 5/25/95
Lewis E. Daidone and Treasurer
(Chief Financial and
Accounting Officer)
/s/Lloyd J. Andrews* Director 5/25/95
Lloyd J. Andrews
/s/Robert M. Frayn* Director 5/25/95
Robert M. Frayn
/s/Leon P. Gardner* Director 5/25/95
Leon P. Gardner
/s/Howard J. Johnson* Director 5/25/95
Howard J. Johnson
/s/David E. Maryatt* Director 5/25/95
David E. Maryatt
________________________ Director
Frederick O. Paulsell
/s/Julie W. Weston* Director 5/25/95
Julie W. Weston
/s/Jerry A. Viscione* Director 5/25/95
Jerry A. Viscione
* Signed by Heath B. McLendon, their duly authorized attorney-in-fact,
pursuant to powers of attorney dated January 31 and March 2, 1995 contained
in the Registrant's Post-Effective Amendments 24 and 25, respectively, which
powers of attorney are incorporated by reference thereto.
By: /s/Heath B. McLendon
Name: Heath B. McLendon
EXHIBIT 1(a)
ARTICLES OF INCORPORATION
OF
SMITH BARNEY SHEARSON FUNDAMENTAL VALUE FUND INC.
ARTICLE I
The undersigned, Kelley Abbott Howes, whose post office address is
One Exchange Place, Boston, Massachusetts 02109, being over eighteen years
of age and acting as incorporator, hereby forms a Corporation under the
Maryland General Corporation Law.
ARTICLE II
The name of the corporation (hereinafter called the "Corporation") is
Smith Barney Shearson Fundamental Value Fund Inc.
ARTICLE III
PURPOSES
The purpose or purposes for which the Corporation is formed and the
business or objects to be transacted, carried and promoted by it, are as
follows:
Section 3.1. To engage in the business of holding, investing,
reinvesting, or otherwise placing the funds of the Corporation in
securities; to acquire through purchase, exchange, subscription, or
otherwise, to own, hold and possess for investment, resale, or otherwise,
and to dispose of and to exercise all rights, powers, and privileges with
reference to such business or incident to ownership, use and enjoyment of
such funds or of securities, including, but without limitation, the right,
power and privilege to own, vote, hold, purchase, sell, negotiate, assign,
exchange, transfer, or otherwise deal with, loan, dispose of, use,
exercise, or enjoy any rights, title, interest, powers or privileges under
or with reference to any securities owned or held, including the payment of
any assessments, subscriptions and other sums of money the Corporation may
deem expedient for the protection of its interest as owner or holder of
such securities, and to invest or utilize the proceeds, interest,
dividends, or other returns therefor in such manner as is consistent with
the purposes, business, or objects of the Corporation; and to borrow money
or property or otherwise incur indebtedness and to mortgage, pledge or
hypothecate its assets.
Section 3.2. To issue and sell its shares in such amounts, on such
terms and conditions, for such purposes and for such consideration now or
hereafter permitted by the laws of Maryland, by these Articles of
Incorporation and by the Investment Company Act of 1940, as amended (the
"1940 Act") as its Board of Directors may determine; provided, however,
that the consideration per share to be received by the Corporation upon the
sale of any shares of its capital stock shall not be less than the net
asset value per share of stock outstanding at the time as of which the
computation of such net asset value shall be made.
Section 3.3. To acquire, through redemption, purchase, exchange, or
otherwise, hold, dispose of, transfer, reissue or cancel its own shares in
any manner and to the extent now or hereafter permitted by the laws of
Maryland by these Articles of Incorporation and by the 1940 Act, without
the vote or consent of the holders of any class of stock of the
Corporation.
Section 3.4. To have one or more offices within or without the State
of Maryland, to carry on all or any of its operations, and to conduct its
business, so far as permitted by law, in any and all states, territories,
dependencies and colonies of the United States, its possessions, and in the
District of Columbia and in foreign countries.
Section 3.5. To carry out all or any of the foregoing objects and
purposes as principal or agent, and alone or with associates or, to the
extent now or hereafter permitted by the laws of Maryland, as a member of,
or as the owner or holder of any stock of, or shares of interest in, any
person; and in connection therewith to make or enter into such deeds or
contracts with any persons, governments or subdivisions thereof, and to do
such acts and things and to exercise such powers, as a natural person
lawfully could.
Section 3.6. To any and all such further acts and things and to
exercise any and all such further powers as may be necessary, incidental,
relative, conducive, appropriate or desirable for the accomplishment,
carrying out or attainment of all or any of the foregoing purposes or
objects.
Section 3.7. The foregoing objects and purposes shall, except as
otherwise expressly provided, be in no way limited or restricted by
reference to, or inference from the terms of any other clause of this or
any other Article of these Articles of Incorporation, and shall each be
regarded as independent, and construed as powers as well as objects and
purposes, and the enumeration of specific purposes, objects and powers
shall not be construed to limit or restrict in any manner the meaning of
general terms or the general powers of the Corporation now or hereafter
conferred by the laws of the State of Maryland, nor shall the expression of
one thing be deemed to exclude another, though it be of like nature, not
expressed; provided, however, that the Corporation shall not have power to
carry on within the State of Maryland any business whatsoever the carrying
on of which would preclude it from being classified as an ordinary business
corporation under the laws of said State; nor shall it carry on any
business, or exercise any powers, in any other state, territory, district
or country except to the extent that the same may lawfully be carried on or
exercised under the laws thereof.
ARTICLE IV
ADDRESS IN MARYLAND
The post office address of the place at which the principal office of
the Corporation in the State of Maryland will be located is c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202.
The Corporation's resident agent in Maryland is The Corporation Trust
Incorporated, whose post office address is 32 South Street, Baltimore,
Maryland 21202. Said resident agent is a corporation of the State of
Maryland.
ARTICLE V
CAPITAL STOCK
Section 5.1 Authorized Common Shares: The total number of shares of
capital stock of all classes, which the Corporation shall have the
authority to issue is one billion (1,000,000,000) shares, of the par value
of one-tenth of one cent ($.001) per share (the "Shares"), and of the
aggregate par value of one million dollars ($1,000,000); of which one
hundred fifty million shares shall be classified initially as follows:
twenty-five million (25,000,000) Class A Common Shares; seventy-five
million (75,000,000) Class B Common Shares; twenty-five million
(25,000,000) Class C Common Shares; and twenty-five million (25,000,000)
Class D Common Shares.
The Board of Directors shall have the power to classify or reclassify
any unissued stock; whether now or hereafter authorized, by setting or
changing the preferences, conversion or other, rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms and
conditions of redemption of such stock.
Subject to the foregoing authority of the Board of Directors to
classify and reclassify unissued stock, shares repurchased, redeemed or
otherwise acquired by the Corporation shall continue to belong to the same
class to which they belonged at the time of their purchase, redemption or
other reacquisition.
Section 5.2 Stock Preference Voting Rights, Etc.: Unless provided
otherwise by the Board of Directors pursuant to the authority of the Board
of Directors to classify and reclassify unissued stock pursuant to Section
5.1, the stock of the Corporation shall have the following relative
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption:
(a) The income of the Corporation and those expenses and liabilities that
are not attributable to any particular class of Shares shall be allocated
among the classes in accordance with their relative net asset values or as
otherwise determined by the Board of Directors, but, in any event, in a
manner consistent with the provisions of the Order, as defined in
subparagraph (c) below. The liabilities and expenses attributable to each
of the classes shall be determined separately from those of each other and,
accordingly, the net asset values, the dividends and distributions payable
to holders, and the amounts distributable in the event of liquidation of
the Corporation to holders of Shares of the Corporation's stock may vary
from class to class.
(b) Except for the differences set forth in subparagraph (a) above and
certain other differences set forth in this Article V or elsewhere in the
charter of the Corporation, the classes shall have the same preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption.
(c) Dividends and distributions on Shares of a particular class may be
declared and paid with such frequency, in such form and in such amount as
the Board of Directors may from time to time determine. Such dividends and
distributions may vary among the classes to reflect differing allocations
of the liabilities and expenses of the classes and any resultant
differences among the net asset values per Share of the classes to such
extent and for such purposes as the Board of Directors may deem
appropriate. Dividends may be declared pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Board of
Directors may determine, after providing for the pertinent expenses and
liabilities. The allocation of investment income, capital gains, expenses
and liabilities of the Corporation among the classes shall be determined
conclusively by the Board of Directors in a manner that is consistent with
an order dated July 7, 1992 (Investment Company Act Release No. 18832), as
amended January 19, 1993 (Investment Company Act Release No. 19216), and
January 28, 1994 (Investment Company Act of 1940, Release No 20042), issued
by the Securities and Exchange Commission in connection with the
application for exemption filed by Smith Barney Shearson Appreciation Fund
Inc. (formerly Shearson Lehman Brothers Appreciation Fund Inc.), et al. and
any future amendment to such order or any rule or interpretation under the
1940 Act that modifies or supersedes such order (the "Order").
(d) The proceeds of the redemption of a Share (including a fractional
Share) of any class of stock shall be reduced by the amount of any
contingent deferred sales charge payable on such redemption pursuant to the
terms of issuance of such Share.
(e) All dividends and distributions on Shares of a particular class shall
be distributed pro rata to the holders of that class in proportion to the
number of Shares of that class held by such holders at the date and time of
record established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program or
procedure, the Board of Directors may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's
purchase order and/or payment have not been received by the time or times
established by the Board of Directors under such program or procedure.
The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends designated
in whole or in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the Corporation to qualify
as a regulated investment company under the Internal Revenue Code of 1986,
as amended, or any successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability of the Corporation for
Federal income tax in respect of that year. However, nothing in the
foregoing shall require or limit the authority of the Board of Directors to
make distributions greater than or less than the amount necessary to
qualify as a regulated investment company and to avoid liability of the
Corporation for Federal Income tax in respect of a particular year.
Dividends and distributions may be paid in cash, property or Shares, or a
combination thereof, as determined by the Board of Directors or pursuant to
any program that the Board of Directors may have in effect at the time.
Any such dividend or distribution paid in Shares will be paid at the
current net asset value thereof as defined in subsection 5.2(j).
(f) Liquidation. In the event of the liquidation of the Corporation, the
net assets of the Corporation shall be distributed among the classes based
on their relative net asset values or in such other manner as may be
determined by the Board of Directors consistent with the Order. The assets
so distributable to the Shareholders of any particular class shall be
distributed among such Shareholders in proportion to the number of Shares
of that class held by them and recorded on the books of the Corporation.
The liquidation of any particular class in which there are Shares then
outstanding may be authorized by vote of a majority of the Board of
Directors then in office, subject to the approval of a majority of the
outstanding securities of that class, as defined in the 1940 Act and the
Maryland General Corporation Law.
(g) Voting. On each matter submitted to a vote of the Shareholders, each
holder of a Share shall be entitled to one vote for each Share standing in
his name on the books of the Corporation, irrespective of the class
thereof, and all Shares of all classes shall vote as a single class
("Single Class Voting"); provided, however, that (i) as to any matter with
respect to which a separate vote of any class is required by the 1940 Act
or by the Maryland General Corporation Law, such requirement as to a
separate vote by that class shall apply in lieu of Single Class Voting as
described above; (ii) in the event that the separate vote requirements
referred to in (i) above apply with respect to one or more classes, then,
subject to (iii) below, the Shares of all other classes shall vote as a
single class; and (iii) as to any matter which does not affect the interest
of a particular class, only the holders of Shares of the one or more
affected classes shall be entitled to vote.
(h) Conversion of Class B Common Stock.
(i) Each share of Class B Common Stock, other than shares
described in Section 5.2 (h)(ii), shall be converted automatically, and
without any action or choice on the part of the holder thereof, into shares
of the Class A Common Stock on the later of (A) September 30, 1994 (or such
later date determined by the Board of Directors of the Corporation to be
the date as of which the Corporation's transfer agent has in place the
systems necessary to calculate the timing of the conversions described
herein or (B) the date that is the first Corporation business day in the
month following the month in which the ^ eighth ^ anniversary date of the
date of issuance of the share falls (the "Conversion Date"). For the
purpose of calculating the holding period required for conversion, the date
of issuance of a share of Class B Common Stock shall mean (A) in the case
of a share of Class B Common Stock obtained by the holder thereof through a
subscription to the Corporation, the date of the issuance of such share of
Class B Common Stock, or (B) in the case of a share of Class B Common Stock
obtained by the holder thereof through an exchange, or through a series of
exchanges, from another investment company or class or series thereof
registered under the Investment Company Act of 1940 pursuant to an exchange
privilege granted by the Corporation, other than for shares of such capital
stock purchased through the automatic reinvestment of a dividend or
distribution with respect to such capital stock, the date of issuance of
the share of Class B Common Stock of the eligible investment company to
which the holder originally subscribed. For this purpose an "eligible
investment company" shall be an investment company designated for the
foregoing purpose in the Corporation's prospectus, as such prospectus may
be amended from time to time. For purposes of Section 5.2(h)(i) and (ii),
if so determined by the Board of Directors of the Corporation, shares of
Class B Common Stock issued in a reorganization with another registered
investment company or class or series thereof shall be treated as if they
were shares issued in an exchange or series of exchanges pursuant to an
exchange privilege granted by the Corporation.
(ii) Each share of Class B Common Stock (A) purchased through
the automatic reinvestment of a dividend or distribution with respect to
the Class B Common Stock or (B) issued pursuant to an exchange privilege
granted by the Corporation in an exchange or series of exchanges for shares
originally purchased through the automatic reinvestment of a dividend or
distribution with respect to shares of capital stock of an eligible
investment company shall be segregated in a separate sub-account on the
stock records of the Corporation for each of the holders of record thereof.
On any Conversion Date, a number of the shares held in the sub-account of
the holder of the share or shares being converted, calculated in accordance
with the next following sentence, shall be converted automatically, and
without any action or choice on the part of the holder, into shares of the
Class A Common Stock. The number of shares in the holder's sub-account so
converted shall bear the same ratio to the total number of shares
maintained in the sub-account on the Conversion Date (immediately prior to
conversion) as the number of shares of the holder converted on the
Conversion Date pursuant to Section 5.2(h)(i) hereof bears to the total
number of shares on the Conversion Date (immediately prior to conversion)
of the Class B Common Stock of the holder after subtracting the shares then
maintained in the holder's sub-account.
(iii) The number of shares of the Class A Common Stock into
which a share of the Class B Common Stock is converted pursuant to Section
5.2(h)(i) and (ii) hereof shall equal the number (including for this
purpose fractions of a share) obtained by dividing the net asset value per
share of the Class B Common Stock for purposes of sales and redemptions
thereof on the Conversion Date by the net asset value per share of the
Class A Common Stock for purposes of sales and redemptions thereof on the
Conversion Date.
(iv) On the Conversion Date, the shares of the Class B Common
Stock converted into shares of the Class A Common Stock will cease to
accrue dividends and will no longer be deemed outstanding and the rights of
the holders thereof (except the right to receive the number of shares of
Class A Common Stock into which the shares of Class B Common Stock have
been converted and declared but unpaid dividends to the Conversion Date)
will cease. Certificates representing shares of the Class A Common Stock
resulting from the conversion need not be issued until certificates
representing shares of the Class B Common Stock converted, if issued, have
been received by the Corporation or its agent duly endorsed for transfer.
(v) The automatic conversion of the Class B Common Stock into
Class A Common Stock as set forth in Section 5.2(h)(i) and (ii) shall be
subject to the continuing availability of a ruling of the Internal Revenue
Service that payment of different dividends on Class A and Class B shares
does not result in such dividends or distributions constituting
preferential dividends under the Internal Revenue Code of 1986, as amended.
Additionally, such automatic conversion shall be suspended at any time that
the Board of Directors determines (A) that there is not available a
reasonably satisfactory opinion of counsel to the effect that the
conversion of the Class B Common Stock does not constitute a taxable event
under federal income tax law, or (B) any other condition to conversion set
forth in the Corporation's prospectus, as such prospectus may be amended
from time to time, is not satisfied.
(vi) The automatic conversion of the Class B Common Stock into
Class A Common Stock as set forth in Section 5.2(h)(i) and (ii) may also be
suspended by action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to comply
with, or satisfy the requirements of the 1940 Act or the Order relating to
voting by the holders of the Class B Common Stock on any plan with respect
to the Class A Common Stock proposed under Rule 12b-1 of the 1940 Act, and
in connection with, or in lieu of, any such suspension, the Board of
Directors may provide holders of the Class B Common Stock with alternative
conversion or exchange rights into other classes of stock of the
Corporation in a manner consistent with the law, rule, regulation or order
giving rise to the possible suspension of the conversion right.
(i) Redemption by Shareholder. Each holder of Shares of a particular
class shall have the right at such times as may be permitted by the
Corporation to require the Corporation to redeem all or any part of his
Shares of that class at a redemption price per share equal to the net asset
value per Share of that class next determined (in accordance with
subsection (j) of this Section 5.2) after the Shares are properly tendered
for redemption, less such contingent deferred sales charge or other charge
as is determined by the Board of Directors and described in the
Corporation's registration statement under the Securities Act of 1933.
Payment of the proceeds of redemption shall be in cash unless the Board of
Directors determines, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable.
In the event of such a determination, the Corporation may make payment
wholly or partly in securities or other assets of the Corporation at the
value of such securities or assets used in such determination of net asset
value. Notwithstanding the foregoing, the Corporation may postpone payment
of the redemption price and may suspend the right of the holders of Shares
of any class to require the Corporation to redeem Shares of that class
during any period or at any time when and to the extent permissible under
the 1940 Act.
(j) Net Asset Value per Share. The net asset value per Share of any
class shall be the quotient obtained by dividing the value of the net
assets of that class (being the value of the assets attributable to that
class less the liabilities attributable to that class) by the total number
of Shares of that class outstanding.
(k) Equality. All Shares of each particular class shall represent an
equal proportionate interest in the assets attributable to that class
(subject to the liabilities attributable to that class), and each Share of
any particular class shall be equal to each other Share of that class. To
the extent permitted by the laws of Maryland, the Board of Directors may
from time to time divide or combine the Shares of any particular class into
a greater or lesser number of Shares of that class without thereby changing
the proportionate beneficial interest in the assets attributable to that
Class or in any way affecting the rights of Shares of any other class.
(l) Conversion or Exchange Rights. Subject to compliance with the
requirements of the 1940 Act, the Board of Directors shall have the
authority to provide that holders of Shares of any class shall have the
right to convert or exchange said Shares into Shares of one or more other
classes of Shares in accordance with such requirements and procedures as
may be established by the Board of Directors.
(m) Redemption by the Corporation. The Board of Directors may cause the
Corporation to redeem at current net asset value the Shares of any class
from a Shareholder whose Shares of the Corporation of all classes have an
aggregate current net asset value of less than five hundred dollars ($500),
or such greater or lesser amount (the "Minimum Amount") as may be
determined by the Board from time to time and reflected in the
Corporation's prospectus. No such redemption shall be effected unless the
Corporation has given the Shareholder at least thirty (30) days' notice of
its intention to redeem the Shares and an opportunity to purchase a
sufficient number of additional Shares to bring the aggregate current net
asset value of his Shares to five hundred dollars ($500), or such greater
or lesser Minimum Amount. Upon redemption of Shares pursuant to this
Section, the Corporation shall promptly cause payment of the full
redemption price to be made to the holder of Shares so redeemed.
ARTICLE VI
ISSUANCE OF STOCK
Section 6.1. Issuance of New Stock; No Preemptive Rights. The
Board of Directors is authorized to issue and sell or cause to be issued
and sold from time to time (without the necessity of offering the same or
any part thereof to existing shareholders) all or any portion or portions
of the entire authorized but unissued Shares of the Corporation for cash or
for any other lawful consideration or considerations and on or for any
terms, conditions, or prices consistent with the provisions of law and of
the Articles of Incorporation at the time in force; ^ provided, however,
that in no event shall Shares of the Corporation having a par value be
issued or sold for a consideration or considerations less in amount or
value than the par value of ^ such Shares. No holder of any shares of any
class of the Corporation shall be entitled as of right to any preemptive
right or to any other right to subscribe for, purchase, or otherwise
acquire any shares of any class which the Corporation proposes to issue
except such rights, if any, as the Board of Directors, in its discretion,
may determine from time to time.
Section 6.2. Fractional Shares. The Corporation may issue and sell
fractions of Shares having pro rata all the rights of full Shares,
including, without limitation, the right to vote and to receive dividends,
and wherever the words "Share" or "Shares" are used in these Articles or in
the Bylaws they shall be deemed to include fractions of Shares, where the
context does not clearly indicate that only full Shares are intended.
ARTICLE VII
DIRECTORS
The number of directors constituting the Board of Directors shall be
eight, to initially, until the first Annual Meeting or until their
successors are duly chosen and qualified, consist of the following: Lloyd
J. Andrews, Robert Frayn, Leon Gardner, Howard J. Johnson, David Maryatt,
Heath B. McLendon, Jerry Viscione and Julie Weston, which number may be
changed in accordance with the Bylaws of the Corporation but shall never be
less than three.
ARTICLE VIII
MISCELLANEOUS
Section 8.1: Voting. Notwithstanding any provision of law
requiring a greater proportion than a majority of the votes of all classes
(or of any class entitled to vote thereon as a separate class) to take or
authorize any action, the Corporation is hereby authorized to take such
action upon the concurrence of a majority of the aggregate number of Shares
entitled to vote thereon (or of a majority of the aggregate number of
Shares of a class entitled to vote thereon as a separate class). The right
to cumulative votes in the election of directors is expressly prohibited.
Section 8.2: Quorum. The presence in person or by proxy of the
holders of one-third of the shares of stock of the Corporation entitled to
vote (without regard to class) shall constitute a quorum at any meeting of
the stockholders, except with respect to any matter which, under applicable
statutes or regulatory requirements, requires approval by a separate vote
of one or more classes of stock, in which case the presence in person or by
proxy of the holders of one-third of the shares of stock of each class
required to vote as a class on the matter shall constitute a quorum,
without regard to whether there is a quorum for other matters.
Section 8.3: Amendment of ByLaws. Except as may otherwise be
provided in the Bylaws, the Board of Directors of the Corporation is
expressly authorized to make, alter, amend and repeal Bylaws or to adopt
new Bylaws of the Corporation, without any action on the part of the
Shareholders; but the Bylaws made by the Board of Directors and the power
so conferred may be altered or repealed by the Shareholders.
Section 8.4: Limitation of Director and Officer Liability. To
the fullest extent permitted by the Maryland General Corporation Law, as
amended from time to time, no director or officer of the Corporation shall
be personally liable to the Corporation or its stockholders for money
damages, except to the extent such exemption from liability or limitation
thereof is not permitted by the 1940 Act. No amendment to these Articles
of Incorporation or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers under this
provision with respect to any act or omission which occurred prior to such
amendment or repeal.
Section 8.4: Limitation of Directors and Officer Liability.
(a) To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland General
Corporation Law, other applicable laws and these Articles, no director or
officer of the Corporation shall have any liability to the Corporation or
its stockholders for damages. This limitation on liability applies to
events occurring at the time a person serves as a director or officer of
the Corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.
(b) The Corporation shall indemnify and advance expenses
to its currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General
Corporation Law, other applicable laws and these Articles. The Corporation
shall indemnify and advance expenses to its officers to the same extent as
its directors and to such further extent as is consistent with law. The
Board of Directors may, through a bylaw, resolution or agreement, make
further provisions for indemnification of directors, officers, employees
and agents to the fullest extent permitted by the Maryland General
Corporation law.
(c) No provision of this Section 8.4 shall be effective
to protect or purport to protect any director or officer of the Corporation
against any liability to the Corporation or its stockholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduit of his office.
(d) References to the Maryland General Corporation law
in this Section 8.4 are to the law as from time to time amended. No
amendment to the charter of the Corporation shall affect any rights of any
person under this Section 8.4 based on any event, omission or proceeding
prior to such amendment.
Section 8.5: Amendment. The Corporation reserves the right from
time to time to make any amendment of these Articles of Incorporation, now
or hereafter authorized by law, including any amendment which alters
contract rights, as expressly set forth in these Articles of Incorporation,
of any outstanding Share.
__________
The term "these Articles of Incorporation" as used herein and in the
By-Laws of the Corporation shall be deemed to mean these Articles of
Incorporation as from time to time, supplemented, amended, and restated.
IN WITNESS WHEREOF, I have signed these ARTICLES OF
INCORPORATION on
this 13th day of May, 1994 and have acknowledged such Articles to be my
act.
_/s/ Kelley Abbott Howes_
Kelley Abbott Howes
shared/global/fundamen/corpdocs/art7l
- - PAGE 10-
EXHIBIT (2)
BY-LAWS
OF
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
A MARYLAND CORPORATION
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings. If a meeting of the stockholders of
Smith Barney Fundamental Value Fund Inc. (the "Corporation") is required by
the Investment Company Act of 1940, as amended, to elect the directors,
then there shall be submitted to the stockholders at such meeting the
question of the election of directors, and a meeting called for that
purpose shall be designated the annual meeting of stockholders for that
year. In other years in which no action by stockholders is required for
the aforesaid election of directors, no annual meeting need be held.
SECTION 2. Special Meetings. Special meetings of the stockholders
for any purpose or purposes, unless otherwise prescribed by statute or by
the Corporation's Articles of Incorporation ("Articles"), may be held at
any place within the United States, and may be called at any time by the
Board of Directors, the Chairman of the Board or the President, and shall
be called by the Chairman of the Board, the President or the Secretary at
the request in writing of a majority of the Board of Directors or by the
Secretary at the request in writing of stockholders entitled to cast at
least ten (10) percent of the votes entitled to be cast at the meeting. A
written request shall state the purpose or purposes of the proposed
meeting. Unless requested by stockholders entitled to cast a majority of
all the votes entitled to be cast at the meeting, a special meeting need
not be called to consider any matter which is substantially the same as a
matter voted on at any special meeting of the stockholders held during the
preceding twelve (12) months.
SECTION 3. Notice of Meetings. Written or printed notice of the
purpose or purposes and of the time and place of every meeting of the
stockholders shall be given by the Secretary of the Corporation to each
stockholder of record entitled to vote at the meeting, by placing the
notice in the mail at least ten (10) days, but not more than ninety (90)
days, prior to the date designated for the meeting addressed to each
stockholder at his address appearing on the books of the Corporation or
supplied by the stockholder to the Corporation for the purpose of notice.
The notice of any meeting of stockholders may be accompanied by a form of
proxy approved by the Board of Directors in favor of such actions or
persons as the Board of Directors may select. Notice of any meeting of
stockholders shall be deemed waived by any stockholder who attends the
meeting in person or by proxy, or who before or after the meeting submits a
signed waiver of notice that is filed with the records of the meeting.
SECTION 4. Quorum. The presence in person or by proxy of
stockholders of the Corporation entitled to cast one-third of the votes
entitled to be cast shall constitute a quorum at each meeting of the
stockholders. In the absence of a quorum, the stockholders present in
person or by proxy at the meeting, by majority vote and without notice
other than by announcement at the meeting, may adjourn the meeting from
time to time as provided in Section 5 of this Article I until a quorum
shall attend. The stockholders present at any duly organized meeting may
continue to do business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum. The absence from any
meeting in person or by proxy of holders of the number of shares of stock
of the Corporation in excess of one-third that may be required by the laws
of the State of Maryland, the Investment Company Act of 1940, or other
applicable statutes, the Corporation's Articles or these By-Laws, for
action upon any given matter shall not prevent action at the meeting on any
other matter or matters that may properly come before the meeting, so long
as there are present, in person or by proxy, holders of the number of
shares of stock of the Corporation required for action upon the other
matter or matters.
SECTION 5. Adjournment. Any meeting of the stockholders may be
adjourned from time to time, without notice other than by announcement at
the meeting at which the adjournment is taken. At any adjourned meeting at
which a quorum shall be present any action may be taken that could have
been taken at the meeting originally called. A meeting of the stockholders
may not be adjourned to a date more than one-hundred-twenty (120) days
after the original record date.
SECTION 6. Organization. At every meeting of the stockholders, the
Chairman of the Board, or in his absence or inability to act, the
President, or in his absence or inability to act, a Vice President, or in
the absence or inability to act of the Chairman of the Board, the President
and all the Vice Presidents, a chairman chosen by the stockholders, shall
act as chairman of the meeting. The Secretary, or in his absence or
inability to act, a person appointed by the chairman of the meeting, shall
act as secretary of the meeting and keep the minutes of the meeting.
SECTION 7. Order of Business. The order of business at all meetings
of the stockholders shall be as determined by the chairman of the meeting.
SECTION 8. Voting; Proxies. Except as otherwise provided by statute
or the Corporation's Articles, each holder of record of shares of stock of
the Corporation having voting power shall be entitled at each meeting of
the stockholders to one (1) vote for every share of stock standing in his
name on the records of the Corporation as of the record date determined
pursuant to Section 9 of this Article I. A plurality of all the votes cast
at a meeting of stockholders duly called and at which a quorum is present
shall be sufficient to elect a director. Each share of stock may be voted
for as many individuals as there are directors to be elected and for whose
election the share is entitled to be voted. A majority of the votes cast
at a meeting of stockholders, duly called and at which a quorum is present,
shall be sufficient to take or authorize action upon any other matter which
may properly come before the meeting, unless more than a majority of votes
cast is required by statute or by the Corporation's Articles.
Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act for him by a proxy signed by the
stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of
the stockholder executing it, except in those cases in which the proxy
states that it is irrevocable and in which an irrevocable proxy is
permitted by law.
SECTION 9. Fixing of Record Date for Determining Stockholders
Entitled to Vote at Meeting. The Board of Directors may set a record date
for the purpose of determining stockholders entitled to vote at any meeting
of the stockholders. The record date for a particular meeting shall be not
more than ninety (90) nor fewer than ten (10) days before the date of the
meeting. All persons who were holders of record of shares as of the record
date of a meeting, and no others, shall be entitled to vote at such meeting
and any adjournment thereof.
SECTION 10. Inspectors. The Board of Directors may, in advance of
any meeting of stockholders, appoint one (1) or more inspectors to act at
the meeting or at any adjournment of the meeting. If the inspectors shall
not be so appointed or if any of them shall fail to appear or act, the
chairman of the meeting may appoint inspectors. Each inspector, before
entering upon the discharge of his duties, shall take and sign an oath to
execute faithfully the duties of inspector at the meeting with strict
impartiality and according to the best of his ability. The inspectors
shall determine the number of shares outstanding and the voting power of
each share, the number of shares represented at the meeting, the existence
of a quorum and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do those acts as are proper
to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting or any stockholder entitled to vote
at the meeting, the inspectors shall make a report in writing of any
challenge, request or matter determined by them and shall execute a
certificate of any fact found by them. No director or candidate for the
office of director shall act inspector of an election of directors.
Inspectors need not be stockholders of the Corporation.
SECTION 11. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute or the Corporation's Articles, any action
required to be taken at any annual or special meeting of stockholders, or
any action that may be taken at any annual or special meeting of
stockholders, may be taken without a meeting, without prior notice and
without a vote, if a unanimous written consent that sets forth the action
and is signed by each stockholder entitled to vote on the matter and a
written waiver of any right to dissent signed by each stockholder entitled
to notice of the meeting but not entitled to vote and are filed with the
records of meetings of the Corporation's stockholders.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers. Except as otherwise provided in the
Corporation's Articles, the business and affairs of the Corporation shall
be managed under the direction of the Board of Directors. All powers of
the Corporation may be exercised by or under authority of the Board of
Directors except as otherwise be provided by law, by the Corporation's
Articles or by these By-Laws.
SECTION 2. Number of Directors. The number of initial directors
shall be eight. The number of directors shall be changed from time to time
by resolution of the Board of Directors adopted by a majority of the entire
board of directors; provided, however, that the number of directors shall
in no event be fewer than three (3) nor more than fifteen (15), except that
the number of directors may be fewer than three (3) to the extent permitted
by applicable law. Any vacancy created by an increase in directors may be
filled in accordance with Section 7 of this Article II. No reduction in
the number of directors shall have the effect of removing any director from
office prior to the expiration of his term unless the director is
specifically removed pursuant to Section 6 of this Article II at the time
of the decrease. A director need not be a stockholder of the Corporation,
a citizen of the United States or a resident of the State of Maryland.
SECTION 3. Election and Term of Directors. The first Board of
Directors shall consist of the directors named in the Corporation's
Articles and shall hold office until the first meeting of stockholders or
until their successors have been elected and qualified. Thereafter,
directors who are elected at a meeting of stockholders, and directors who
are elected in the interim to fill vacancies and newly created
directorships, shall hold office until their successors have been elected
and qualified.
SECTION 4. Directors Emeritus. An individual who has served on the
Board of Directors for a minimum of five (5) years and who retires
voluntarily or who will not stand for re-election because of age may be
designated by the Board of Directors as a Director Emeritus.
An individual designated as a Director Emeritus may, upon his or her
request, be permitted to attend meetings of the Board of Directors and to
receive all materials sent to active Board members. A Director Emeritus
shall not have voting rights at Board Meetings and shall not be under a
duty to manage or direct the business and affairs of the Corporation. A
Director Emeritus shall not be deemed to stand in a fiduciary relation to
the Corporation, and shall not be responsible to discharge the duties of a
Director or to exercise that diligence, care or skill which a Director
would ordinarily be required to exercise under applicable law.
A stipend, the amount to be determined by the Board of Directors from
time to time, which shall not exceed the basis upon which active Board
members are compensated, shall be paid to each Director Emeritus. A
Director Emeritus shall be indemnified to the full extent that an Officer
or Director of this Corporation may be indemnified under Article V of these
By-Laws.
SECTION 5. Resignation. A director of the Corporation may resign at
any time by giving written notice of his resignation to the Board of
Directors or the Chairman of the Board or to the President or the Secretary
of the Corporation. Any resignation shall take effect at the time
specified in it or, should the time when it is to become effective not be
specified in it, immediately upon its receipt. Acceptance of a resignation
shall not be necessary to make it effective unless that resignation states
otherwise.
SECTION 6. Removal of Directors. At a meeting of stockholders
called expressly for that purposes, any director or the entire Board of
Directors of the Corporation may be removed by the stockholders with or
without cause by a vote of a majority of the votes entitled to be cast for
the election of directors.
SECTION 7. Vacancies. Subject to the provisions of the Investment
Company Act of 1940, any vacancies in the Board of Directors, whether
arising from death, resignation, removal or any other cause except an
increase in the number of directors, shall be filled by a vote of the
majority of the Board of Directors then in office even through the majority
is less than a quorum, provided that no vacancy or vacancies shall be
filled by action of the remaining directors if, after the filling of the
vacancy or vacancies, fewer than two-thirds of the directors then holding
office shall have been elected by the stockholders of the Corporation. A
majority of the entire Board then in office may fill a vacancy that results
from an increase in the number of directors. In the event that at any time
a vacancy exists in any office of a director that may not be filled by the
remaining directors, a meeting of the stockholders shall be held as
promptly as possible and in any event within sixty (60) days, for the
purpose of filling the vacancy or vacancies. Any director elected or
appointed to fill a vacancy shall hold office only until the next annual
meeting of stockholders of the Corporation and until a successor has been
chosen and qualified or until his earlier resignation or removal.
SECTION 8. Place of Meetings. Meetings of the Board may be held at
any place that the Board of Directors may from time to time determine or
that is specified in the notice of the meeting.
SECTION 9. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at the time and place determined by
the Board of Directors.
SECTION 10. Special Meetings. Special meetings of the Board of
Directors may be called by two (2) or more directors of the Corporation or
by the Chairman of the Board of the President.
SECTION 11. Notice of Special Meetings. Notice of each special
meeting of the Board of Directors shall be given by the Secretary as
hereinafter provided. Each notice shall state the time and place of the
meeting and shall be delivered to each director, either personally or by
telephone or other standard form of telecommunication, at least twenty-four
(24) hours before the time at which the meeting is to be held, or by first-
class mail, postage prepaid, addressed to the director at his residence or
usual place of business, and mailed at least three (3) days before the day
on which the meeting is to be held.
SECTION 12. Waiver of Notice of Meetings. Notice of any special
meeting need not be given to any director who shall, either before or after
the meeting, sign a written waiver of notice that is filed with the records
of the meeting or who shall attend the meeting.
SECTION 13. Quorum and Writing. A majority of the number of
Directors fixed by Section 2 of this Article II shall constitute a quorum
for the transaction of business at any Meeting of the Board of Directors,
and except as otherwise expressly required by statute, the Corporation's
Articles, these By-Laws, the Investment Company Act of 1940, or any other
applicable statute, the act of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the Board. If
there are only two or three directors, not less than two directors may
constitute a quorum. If there is only one director that one director will
constitute a quorum. In the absence of a quorum at any meeting of the
Board, a majority of the directors present may adjourn the meeting to
another time and place until a quorum shall be present. Notice of the time
and place of any adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place
were announced at the meeting at which the adjournment was taken, to the
other directors. At any adjourned meeting at which a quorum is present,
any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 14. Organization. The Board of Directors may designate a
Chairman of the Board, who shall preside at each meeting of the Board. In
the absence or inability of the Chairman of the Board to act, the
President, or, in his absence or inability to act, another director chosen
by a majority of the directors present, shall act as chairman of the
meeting and preside at the meeting. The Secretary (or, in his absence or
inability to act, any person appointed by the chairman) shall act as
secretary of the meeting and keep the minutes of the meeting.
SECTION 15. Committees. The Board of Directors may designate from
among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution or these By-Laws,
shall have and may exercise all the authority of the Board of Directors,
except that no such committee shall have the authority to: (1) declare
dividends or distributions; (2) issue stock unless the Board of Directors
has given general authority for the issuance of stock by establishing a
general formula or method; (3) recommend to stockholders any action which
requires stockholder approval; (4) fill vacancies on the Board of Directors
or any committee thereof; (5) amend these By-Laws; (6) fix compensation of
any director for serving on the Board of Directors or on any committee; (7)
approve a plan of merger, consolidation or exchange of shares not requiring
stockholder approval; (8) appoint other committees of the Board of
Directors or the members thereof; or (9) amend the Corporation's Articles.
Any committee or committees shall have the name or names determined from
time to time by resolution adopted by the Board of Directors. Each
committee shall consist of two (2) or more directors and shall keep regular
minutes of its meetings and provide those minutes to the Board of Directors
when required. The members of a committee present at any meeting, whether
or not they constitute a quorum, may appoint a director to act in the place
of an absent member, but may not act to fill a vacancy on that committee.
SECTION 16. Written Consent of Directors in Lieu of a Meeting.
Subject to the provisions of the Investment Company Act of 1940, any action
required or permitted to be taken at any meeting of a majority of the Board
of Directors or of any committee of the Board may be taken without a
meeting if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes or the proceedings of the Board or committee.
SECTION 17. Telephone Conference. Members of the Board of Directors
or any committee of the Board may participate in any Board of committee
meeting by means of a conference telephone or similar communications
equipment by means of which all person participating in the meeting can
hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
SECTION 18. Compensation. Each director shall be entitled to receive
compensation, if any, as may from time to time be fixed by the Board of
Directors, including a fee for each meeting of the Board or any committee
thereof, regular or special, that he attends. Directors may also be
reimbursed by the Corporation for all reasonable expenses incurred in
traveling to and from the place a Board or committee meeting is held.
ARTICLE III
OFFICERS, AGENTS AND EMPLOYEES
SECTION 1. Number and Qualifications. The officers of the
Corporation shall be a Chairman of the Board, a President, any number or no
Vice Presidents (the number thereof to be determined by the Board of
Directors), a Secretary and a Treasurer, each of whom shall be elected by
the Board of Directors. Any two (2) or more offices may be held by the
same person, except the offices of President and Vice President, but no
officer shall execute, acknowledge or verify any instrument in more than
one (1) capacity. The Board of Directors may from time to time elect, or
delegate to the Chairman of the Board or the President the power to
appoint, such additional officers or assistant officers (including one or
more Assistant Vice Presidents, one or more Assistant Treasurers and one or
more Assistant Secretaries) and such agents as may be necessary or
desirable for the business of the Corporation. Such other officers and
agents shall have such duties and shall hold their offices for such terms
as may be prescribed by the Board or by the appointing authority.
SECTION 2. Resignations. Any officer of the Corporation may resign
at any time by giving written notice of his resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary. Any
resignation shall take effect at the time specified therein or, if the time
when it shall become effective is not specified therein, immediately upon
its receipt. The acceptance of a resignation shall not be necessary to
make it effective unless otherwise stated in the resignation.
SECTION 3. Removal of Officer, Agent or Employee. Any officer,
agent or employee of the Corporation may be removed by the Board of
Directors with or without cause whenever in its judgment the best interest
of the Corporation will be served thereby, and the Board may delegate the
power of removal as to agents and employees not elected or appointed by the
Board of Directors. Removal shall be without prejudice to the person's
contract rights, if any, but the appointment of any person as an officer,
agent or employee of the Corporation shall not of itself create contract
rights.
SECTION 4. Vacancies. A vacancy is any office, whether arising from
death, resignation, removal or any other cause, may be filled for the
unexpired portion of the term of the office that shall be vacant, in the
manner prescribed in these By-Laws for the regular election or appointment
to the office.
SECTION 5. Compensation. The compensation of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer with respect to other officers under his control.
SECTION 6. Bonds or Other Security. If required by the Board, any
officer, agent or employee of the Corporation shall give a bond or other
security for the faithful performance of his duties, in an amount and with
any surety or sureties as the Board may require.
SECTION 7. Chairman of the Board. The Chairman of the Board shall
be the Chief Executive Officer of the Corporation and shall preside at all
meetings of the stockholders and of the Board of Directors. Subject to the
control of the Board of Directors, the Chairman of the Board shall have
general charge of the business and affairs of the Corporation, and may
employ and discharge employees and agents of the Corporation, except those
elected or appointed by the Board, and he may delegate these powers.
SECTION 8. President. In the absence or inability of the Chairman
of the Board to act, the President shall preside at meetings of the
stockholders and the Board of Directors. In addition, the President shall
have the powers and perform the duties that the Board or the Chairman of
the Board may from time to time prescribe.
SECTION 9. Vice President. Each Vice President shall have the
powers and perform the duties that the Board of Directors, the Chairman of
the Board or the President may from time to time prescribe.
SECTION 10. Treasurer. The Treasurer shall be the Chief Financial
Officer and Chief Accounting Officer of the Corporation. Subject to the
provisions of any contract that may be entered into with any custodian
pursuant to authority granted by the Board of Directors, the Treasurer
shall have charge of all receipts and disbursements of the Corporation and
shall have or provide for the custody of the Corporation's funds and
securities; he shall have full authority to receive and give receipts for
all money due and payable to the Corporation, and to endorse checks,
drafts, and warrants, in its name and on its behalf and to give full
discharge for the same; he shall deposit all funds of the Corporation,
except those that may be required for current use, in such banks or other
places of deposit as the Board of Directors may from time to time
designate; and, in general, he shall perform all duties incident to the
office of Treasurer and such other duties as may from time to time be
assigned to him by the Board of Directors, the Chairman of the Board or the
President.
SECTION 11. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Directors, the
committees of the Board and the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and affix and attest the seal to all
other documents to be executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly
kept and filed; and
(e) in general, perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him
by the Board of Directors, the Chairman of the Board or the President.
SECTION 12. Delegation of Duties. In case of the absence of any
officer of the Corporation, or for any other reason that the Board of
Directors may deem sufficient, the Board may confer for the time being the
powers or duties, or any of them, of such officer upon any other officer or
upon any director.
ARTICLE IV
STOCK
SECTION 1. Stock Certificates. Each holder of stock of the
Corporation shall be entitled upon specific written request to such person
as may be designated by the Corporation to have a certificate or
certificates, in a form approved by the Board, representing the number of
shares of stock of the Corporation owned by him; provided, however, that
certificates for fractional shares will not be delivered in any case. The
certificates representing shares of stock shall be signed by or in the name
of the Corporation by the Chairman of the Board, the President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer and sealed with the seal of the Corporation. Any or
all of the signatures or the seal on the certificates may be facsimiles.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent or registrar before the certificates is
issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar was still in office at the date of
issue.
SECTION 2. Books of Account and Stock Ledger. There shall be kept
at the principal executive office of the Corporation correct and complete
books and records of account of all the business and transactions of the
Corporation. There shall be made available upon request of a stockholder
who owns at least 5% of the outstanding stock of any class of stock of the
Corporation, in accordance with Maryland law, a record containing a list of
the Corporation's stockholders and the number of shares held by each of
them.
SECTION 3. Transfer of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by
the registered holder of the shares, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary
or with a transfer agent or transfer clerk, and on surrender of the
certificate or certificates, if issued, for the shares properly endorsed or
accompanied by a duly executed stock transfer power and the payment of all
taxes thereon. Except as otherwise provided by law, the Corporation shall
be entitled to recognize the exclusive right of a person in whose name any
share or shares stand on the record of stockholders as the owner of the
share or shares for all purposes, including, without limitation, the rights
to receive dividends or other distributions and to vote as the owner, and
the Corporation shall not be bound to recognize any equitable or legal
claim to or interest in any such share or shares on the part of any other
person.
SECTION 4. Regulations. The Board of Directors may make any
additional rules and regulations, not inconsistent with these By-Laws and
the Articles, as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of stock of the Corporation. The
Board may appoint, or authorize any officer or officers to appoint, one or
more transfer agents or one more transfer clerks and one or more registrars
and may require all certificates for shares of stock to bear the signature
or signatures of any of them.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of
any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of its loss, wrongful taking or
destruction. The Corporation shall issue a new certificate of stock in the
place of any certificate issued by it that has been alleged to have been
lost stolen or destroyed or that shall have been wrongfully taken if the
owner (or his legal representative): (1) so requests before the
Corporation has notice that the certificate has been acquired by a bonafide
purchaser; (2) gives to the Corporation a bond in a sum, limited or
unlimited, and in a form and with any surety or sureties, as the Board in
its absolute discretion shall determine, to indemnify the Corporation
against any claim that may be made against it on account of the alleged
loss or destruction of any such certificate, or issuance of new
certificate; (3) and satisfies any other reasonable requirements imposed by
the Board of Directors. Anything herein to the contrary notwithstanding,
the Board of Directors, in its absolute discretion, may refuse to issue any
such new certificate, except to the extent required to do so under the laws
of the State of Maryland.
SECTION 6. Fixing of Record Date for Dividends, Distributions, etc..
The Board may fix, in advance, a date not more than ninety (90) days
preceding the date fixed for the payment of any dividend or the making of
any distribution or the allotment of rights to subscribe for securities of
the Corporation, or for the delivery of evidences of rights or evidences of
interests arising out of any change, conversion or exchange of common stock
or other securities, as the record date for the determination of the
stockholders entitled to receive any such dividend, distribution,
allotment, rights or interests, and in such case only the stockholders of
record at the time so fixed shall be entitled to receive such dividend,
distribution, allotment, rights or interests.
SECTION 7. Information to Stockholders and Others. Any stockholder
of the Corporation or his agent may inspect and copy during the
Corporation's usual business hours the Corporation's By-Laws, minutes of
the proceedings of its stockholders, annual statements of its affairs and
voting trust agreements on file at its principal office.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification of Directors and Officers. Any person
who was or is a party or is threatened to be made a party in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is a current or former director or officer of the Corporation, or is
or was serving while a director or officer of the Corporation at the
request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another foreign or domestic corporation,
partnership, joint venture, trust, enterprise or employee benefit plan,
shall be indemnified by the Corporation against judgments, penalties,
fines, settlements and reasonable expenses (including attorneys' fees)
actually incurred by such person in connection with such action, suit or
proceeding to the full extent permissible or otherwise not prohibited under
the Maryland General Corporation Law, the Securities Act of 1933, and the
Investment Company Act of 1940, as those statutes are now or hereafter in
force, except that such indemnity shall not protect any such person against
any liability to the Corporation or any stockholder thereof to which such
person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct").
SECTION 2. Advances. Any current or former director or officer of
the Corporation claiming indemnification within the scope of this Article V
shall be entitled to advances from the Corporation for payment of all
expenses reasonably incurred by him in connection with proceedings to which
he is a party in the manner and to the fullest extent permissible or
otherwise not prohibited under the Maryland General Corporation Law, the
Securities Act of 1933 and the Investment Company Act of 1940, as those
statutes are now or hereafter in force; provided, however, that the person
seeking indemnification shall provide to the Corporation a written
affirmation of his good faith belief that the standard of conduct necessary
for indemnification by the Corporation has been met and a written
undertaking to repay any such advance, if it should ultimately be
determined that the standard of conduct has not been met, and provided
further that at least one of the following additional conditions is met:
(a) the person seeking indemnification shall provide security in form and
amount acceptable to the Corporation for his undertaking; (b) the
Corporation is insured against losses arising by reason of the advance; or
(c) a majority of a quorum of directors of the Corporation who are neither
"interested persons" as defined in Section 2(a)(19) of the Investment
Company Act of 1940 nor parties to the proceeding ("disinterested non-party
directors"), or independent legal counsel, in a written opinion, shall
determine, based on a review of facts readily available to the Corporation
at the time the advance is proposed to be made, that there is reason to
believe that the person seeking indemnification will ultimately be found to
be entitled to indemnification.
SECTION 3. Procedure. At the request of any current or former
director or officer, or any employee or agent whom the Corporation proposes
to indemnify, the Board of Directors shall determine, or cause to be
determined, in a manner consistent with the Maryland General Corporation
Law, the Securities Act of 1933, and the Investment Company Act of 1940, as
those statutes are now or hereafter in force, whether the standards
required by this Article V have been met; provided, however, that
indemnification shall be made only following: (a) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the person to be indemnified was not liable by reason of disabling conduct
or (b) in the absence of such a decision, a reasonable determination, based
upon a review of the facts, that the person to be indemnified was not
liable by reason of disabling conduct, by (i) the vote of a majority of a
quorum of disinterested non-party directors or (ii) an independent legal
counsel in a written opinion.
SECTION 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or directors of the Corporation may be
indemnified, and reasonable expenses may be advanced to such employees or
agents, in accordance with the procedures set forth in this Article V to
the extent permissible under Maryland General Corporation Law, the
Securities Act of 1933 and the Investment Company Act of 1940, as those
statutes are now or hereafter in force, and to such further extent,
consistent with the foregoing, as may be provided by action of the Board of
Directors or by contract.
SECTION 5. Other Rights. The indemnification provided by this
Article V shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking such indemnification
may be entitled under any insurance or other agreement, vote of
stockholders or disinterested directors or otherwise, both as to action by
a director or officer of the Corporation in his official capacity and as to
action by such person in another capacity while holding such office or
position, and shall continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 6. Insurance. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or who, while a
director, officer, employee or agent of the Corporation, is or was serving
at the request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another corporation, partnership, joint
venture, trust, enterprise or employee benefit plan, against any liability
asserted against and incurred by him any such capacity, or arising out of
his status as such.
SECTION 7. Severability. If any part or portion of this Article V
shall be found unenforceable or invalid in any respect. The remainder of
this Article shall not be affected thereby.
ARTICLE VI
SEAL
The seal of the Corporation shall be circular in form and shall bear
the name of the Corporation, the year of its incorporation, the words
"Corporate Seal" and "Maryland" and any emblem or device approved by the
Board of Directors. The seal may be used by causing it or a facsimile to
be impressed or affixed or in any other manner reproduced, or by placing
the word "(seal)" adjacent to the signature of the authorized officer of
the Corporation
ARTICLE VII
FISCAL YEAR
SECTION 1. Fiscal Year. The Corporation's fiscal year shall be
fixed by the Board of Directors.
SECTION 2. Accountant.
(a) The Corporation shall employ an independent public accountant
or a firm of independent accountants as its Accountant to examine the
accounts of the Corporation and to sign and certify financial statements
filed by the Corporation. The Accountant's certificates and reports shall
be addressed both to the Board of Directors and to the stockholders. The
employment of the Accountant shall be conditioned upon the right of the
Corporation to terminate the employment forthwith without any penalty by
vote of a majority of the outstanding voting securities, as defined in the
Investment Company Act of 1940, at any stockholders' meeting called for
that purpose.
(b) A majority of the members of the Board of Directors who are not
"interested persons" (as such term is defined in the Investment Company Act
of 1940) of the Corporation shall select the Accountant at any meeting held
within 30 days before or after the beginning of the fiscal year of the
Corporation or before the annual stockholders' meeting if such meeting is
held in that year. Such selection shall be submitted for ratification or
rejection at the next succeeding annual stockholders' meeting when such
meeting is held. If such meeting shall reject such selection, the
Accountant shall be selected by majority vote of the Corporation's
outstanding voting securities, either at the meeting at which the rejection
occurred or at a subsequent meeting of stockholders called for that
purpose.
(c) Any vacancy occurring between annual meetings, due to the
resignation of the Accountant, may be filled by the vote of a majority of
the members of the Board of Directors who are not "interested persons" (as
such term is defined in the Investment Company Act of 1940).
ARTICLE VIII
CUSTODY OF SECURITIES
SECTION 1. Employment of a Custodian. The Corporation shall place
and at all times maintain in the custody of a Custodian (including any sub-
custodian for the Custodian) all funds, securities and similar investments
owned by the Corporation. The Custodian (and any sub-custodian) shall be
an institution conforming to the requirements of Section 17(f) of the
Investment Company Act of 1940 and the rules of the United States
Securities Exchange Commission thereunder. The Custodian shall be
appointed from time to time by the Board of Directors, which shall fix its
remuneration.
SECTION 2. Termination of Custodian Agreement. Upon termination of
the Custodian Agreement or inability of the Custodian to continue to serve,
the Board of Directors shall promptly appoint a successor Custodian, but in
the event that no successor Custodian can be found who has the required
qualifications and is willing to serve, the Board of Directors shall call
as promptly as possible a special meeting of the stockholders to determine
whether the Corporation shall function without a Custodian or shall be
liquidated. If so directed by vote of the holders of a majority of the
outstanding shares of stock entitled to vote of the Corporation, the
Custodian shall deliver and pay over all property of the Corporation held
by it as specified in such vote.
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed by the affirmative vote of a
majority of the Board of Directors at any regular or special meeting of the
Board of Directors, subject to the requirements of the Investment Company
Act of 1940.
SHARED/SHEARSN2/FUNDAMEN/CORPDOCS/BYLAWS95
- -4-
EXHIBIT (4)(a)
SPECIMEN
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(A MARYLAND CORPORATION)
CLASS A SHARES
(SHARES OF COMMON STOCK)
ACCOUNT NO.
THIS CERTIFIES THAT CUSIP
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES
(PAR VALUE $ .001 PER SHARE)
of SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
CLASS A SHARES
Shares established and designated under the Articles of Incorporation of
SMITH BARNEY FUNDAMENTAL VALUE FUND INC., a Maryland corporation (the
"Fund"), dated May 13, 1994, as amended from time to time (the "Articles").
The terms of the Articles, a copy of which is on file with the Departments
of Assessments and Taxation of the State of Maryland, are hereby
incorporated by reference as fully as if set forth herein in their
entirety. The shares have the rights and preferences set forth in the
Articles, and the Fund will furnish to the holder of this certificate upon
written request and without charge a statement of such relative rights and
preferences. This certificate is issued by the Directors of SMITH BARNEY
FUNDAMENTAL VALUE FUND INC. not individually but as Directors under the
Articles, and represents shares of the Fund and does not bind any of the
Directors, Stockholders, Officers, Employees or Agents of the Fund
personally but only the assets and property Agreement, the shares
represented by this certificate are transferable upon the books of the Fund
by the registered holder hereof in person or his duly authorized attorney
upon surrender of this certificate.
WITNESS the facsimile signature of the Fund's duly authorized
officer.
Dated:
________________________
___________________________
Christina Sydor Jessica M. Bibliowicz
Secretary President
EXHIBIT (4)(b)
SPECIMEN
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(A MARYLAND CORPORATION)
CLASS B SHARES
(SHARES OF COMMON STOCK)
ACCOUNT NO.
THIS CERTIFIES THAT CUSIP
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES
(PAR VALUE $ .001 PER SHARE)
of SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
CLASS B SHARES
Shares established and designated under the Articles of Incorporation of
SMITH BARNEY FUNDAMENTAL VALUE FUND INC., a Maryland corporation (the
"Fund"), dated May 13, 1994, as amended from time to time (the "Articles").
The terms of the Articles, a copy of which is on file with the Departments
of Assessments and Taxation of the State of Maryland, are hereby
incorporated by reference as fully as if set forth herein in their
entirety. The shares have the rights and preferences set forth in the
Articles, and the Fund will furnish to the holder of this certificate upon
written request and without charge a statement of such relative rights and
preferences. This certificate is issued by the Directors of SMITH BARNEY
FUNDAMENTAL VALUE FUND INC. not individually but as Directors under the
Articles, and represents shares of the Fund and does not bind any of the
Directors, Stockholders, Officers, Employees or Agents of the Fund
personally but only the assets and property Agreement, the shares
represented by this certificate are transferable upon the books of the Fund
by the registered holder hereof in person or his duly authorized attorney
upon surrender of this certificate.
WITNESS the facsimile signature of the Fund's duly authorized
officer.
Dated:
________________________
___________________________
Christina Sydor Jessica M. Bibliowicz
Secretary President
EXHIBIT (4)(c)
SPECIMEN
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(A MARYLAND CORPORATION)
CLASS C SHARES
(SHARES OF COMMON STOCK)
ACCOUNT NO.
THIS CERTIFIES THAT CUSIP
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES
(PAR VALUE $ .001 PER SHARE)
of SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
CLASS C SHARES
Shares established and designated under the Articles of Incorporation of
SMITH BARNEY FUNDAMENTAL VALUE FUND INC., a Maryland corporation (the
"Fund"), dated May 13, 1994, as amended from time to time (the "Articles").
The terms of the Articles, a copy of which is on file with the Departments
of Assessments and Taxation of the State of Maryland, are hereby
incorporated by reference as fully as if set forth herein in their
entirety. The shares have the rights and preferences set forth in the
Articles, and the Fund will furnish to the holder of this certificate upon
written request and without charge a statement of such relative rights and
preferences. This certificate is issued by the Directors of SMITH BARNEY
FUNDAMENTAL VALUE FUND INC. not individually but as Directors under the
Articles, and represents shares of the Fund and does not bind any of the
Directors, Stockholders, Officers, Employees or Agents of the Fund
personally but only the assets and property Agreement, the shares
represented by this certificate are transferable upon the books of the Fund
by the registered holder hereof in person or his duly authorized attorney
upon surrender of this certificate.
WITNESS the facsimile signature of the Fund's duly authorized
officer.
Dated:
________________________
___________________________
Christina Sydor Jessica M. Bibliowicz
Secretary President
EXHIBIT (4)(d)
SPECIMEN
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(A MARYLAND CORPORATION)
CLASS Y SHARES
(SHARES OF COMMON STOCK)
ACCOUNT NO.
THIS CERTIFIES THAT CUSIP
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES
(PAR VALUE $ .001 PER SHARE)
of SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
CLASS Y SHARES
Shares established and designated under the Articles of Incorporation of
SMITH BARNEY FUNDAMENTAL VALUE FUND INC., a Maryland corporation (the
"Fund"), dated May 13, 1994, as amended from time to time (the "Articles").
The terms of the Articles, a copy of which is on file with the Departments
of Assessments and Taxation of the State of Maryland, are hereby
incorporated by reference as fully as if set forth herein in their
entirety. The shares have the rights and preferences set forth in the
Articles, and the Fund will furnish to the holder of this certificate upon
written request and without charge a statement of such relative rights and
preferences. This certificate is issued by the Directors of SMITH BARNEY
FUNDAMENTAL VALUE FUND INC. not individually but as Directors under the
Articles, and represents shares of the Fund and does not bind any of the
Directors, Stockholders, Officers, Employees or Agents of the Fund
personally but only the assets and property Agreement, the shares
represented by this certificate are transferable upon the books of the Fund
by the registered holder hereof in person or his duly authorized attorney
upon surrender of this certificate.
WITNESS the facsimile signature of the Fund's duly authorized
officer.
Dated:
________________________
___________________________
Christina Sydor Jessica M. Bibliowicz
Secretary President
EXHIBIT (5)
SMITH BARNEY SHEARSON FUNDAMENTAL VALUE FUND INC.
May 25,1995
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, NY 10013
Dear Sirs:
Smith Barney Fundamental Value Fund Inc. (the "Company"), a
corporation organized under the laws of the State of Maryland, confirms its
agreement with Smith Barney Mutual Funds Management Inc. (the "Adviser"),
as follows:
1. Investment Description; Appointment
The Company desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the
investment objective(s), policies and limitations specified in its Articles
of Incorporation, as amended from time to time (the "Charter"), in the
prospectus (the "Prospectus") and statement of additional information (the
"Statement") filed with the Securities and Exchange Commission as part of
the Company's Registration Statement on Form N-1A, as amended from time to
time, and in the manner and to the extent as may from time to time be
approved by the Board of Directors of the Company ("Board"). Copies of the
Prospectus, the Statement and the Charter have been submitted to the
Adviser. The Company agrees to provide copies of all amendments to the
Prospectus, the Statement and the Charter to the Adviser on an on-going
basis. The Company desires to employ and hereby appoints the Adviser to
act as the investment adviser to the Company. The Adviser accepts the
appointment and agrees to furnish the services for the compensation set
forth below.
2. Services as Investment Adviser
Subject to the supervision, direction and approval of the Board
of the Company, the Adviser will (a) manage the Company's holdings in
accordance with the Company's investment objective(s) and policies as
stated in the Charter, the Prospectus and the Statement; (b) make
investment decisions for the Company; (c) place purchase and sale orders
for portfolio transactions for the Company; and (d) employ professional
portfolio managers and securities analysts who provide research services to
the Company. In providing those services, the Adviser will conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Company's assets.
3. Brokerage
In selecting brokers or dealers to execute transactions on
behalf of the Company, the Adviser will seek the best overall terms
available. In assessing the best overall terms available for any
transaction, the Adviser will consider factors it deems relevant,
including, but not limited to, the breadth of the market in the security,
the price of the security, the financial condition and execution capability
of the broker or dealer and the reasonableness of the commission, if any,
for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in evaluating
the best overall terms available, the Adviser is authorized to consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934), provided to the Company
and/or other accounts over which the Adviser or its affiliates exercise
investment discretion.
4. Information Provided to the Company
The Adviser will keep the Company informed of developments
materially affecting the Company's holdings, and will, on its own
initiative, furnish the Company from time to time with whatever information
the Adviser believes is appropriate for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2 and 3 above. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Company in connection with the matters to which this Agreement
relates, provided that nothing in this Agreement shall be deemed to protect
or purport to protect the Adviser against any liability to the Company or
to its shareholders to which the Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement.
6. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Company will pay the Adviser on the first business day of
each month a fee for the previous month at the annual rate of 0.55% of the
Company's average daily net assets. The fee for the period from the
Effective Date (defined below) of the Agreement to the end of the month
during which the Effective Date occurs shall be prorated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such
part of that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date
of termination of this Agreement. For the purpose of determining fees
payable to the Adviser, the value of the Company's net assets shall be
computed at the times and in the manner specified in the Prospectus and/or
the Statement.
7. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Company will bear
certain other expenses to be incurred in its operation, including, but not
limited to, investment advisory and administration fees; fees for necessary
professional and brokerage services; fees for any pricing service; the
costs of regulatory compliance; and costs associated with maintaining the
Company's legal existence and shareholder relations.
8. Reduction of Fee
If in any fiscal year the aggregate expenses of the Company
(including fees pursuant to this Agreement and the Company's administration
agreement, but excluding interest, taxes, brokerage and extraordinary
expenses) exceed the expense limitation of any state having jurisdiction
over the Company, the Adviser will reduce its fee to the Company by the
proportion of such excess expense equal to the proportion that its fee
hereunder bears to the aggregate of fees paid by the Company for investment
advice and administration in that year, to the extent required by state
law. A fee reduction pursuant to this paragraph 8, if any, will be
estimated, reconciled and paid on a monthly basis.
9. Services to Other Companies or Accounts
The Company understands that the Adviser now acts, will
continue to act and may act in the future as investment adviser to
fiduciary and other managed accounts, and as investment adviser to other
investment companies, and the Company has no objection to the Adviser's so
acting, provided that whenever the Company and one or more other investment
companies advised by the Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company. The
Company recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Company. In addition, the
Company understands that the persons employed by the Adviser to assist in
the performance of the Adviser's duties under this Agreement will not
devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of the Adviser or
any affiliate of the Adviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
10. Term of Agreement
This Agreement shall become effective as of the effective date
of the transfer of all of the business and assets and the assignment of all
the liabilities and obligations of Smith Barney Fundamental Value Fund
Inc., a Washington corporation (the "Fund"), in exchange for distribution
of Class A, Class B, Class C and Class Y shares of the Company to the
Fund's shareholders (the "Effective Date") and shall continue for an
initial two-year term. Thereafter, this Agreement shall continue for
successive annual periods so long as such continuance is specifically
approved at least annually by (i) the Board of the Company or (ii) a vote
of a "majority" (as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act")) of the Company's outstanding voting
securities, provided that in either event the continuance is also approved
by a majority of the Board who are not "interested persons" (as defined in
the 1940 Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement
is terminable, without penalty, on 60 days' written notice by the Board of
the Company or by vote of holders of a majority of the Company's shares, or
upon 90 days' written notice by the Adviser. This Agreement will also
terminate automatically in the event of its assignment (as defined in the
1940 Act and the rules thereunder).
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
SMITH BARNEY FUNDAMENTAL VALUE
FUND INC.
By: ______________________________
Name: Heath B. McLendon
Title: Chairman
Accepted:
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
By: __________________________
Name: Jessica M. Bibliowicz
Title: President
EXHIBIT (6)
DISTRIBUTION AGREEMENT
May 1, 1995
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, Smith Barney Fundamental Value Fund
Inc. (the "Fund") a corporation organized under the laws of the State of
Maryland has agreed that Smith Barney Inc. ("Smith Barney") shall be, for
the period of this Agreement, the distributor of shares of the Fund (the
"Shares").
1. Services as Distributor
1.1 Smith Barney will act as agent for the distribution of
Shares covered by the registration statement, including the prospectus and
statement of additional information, then in effect under the Securities
Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act").
1.2 Smith Barney agrees to use its best efforts to solicit
orders for the sale of Shares and will undertake such advertising and
promotion as it believes is reasonable in connection with such
solicitation.
1.3 All activities by Smith Barney as distributor of the
Shares shall comply with all applicable laws, rules, and regulations,
including, without limitation, all rules and regulations made or adopted by
the Securities and Exchange Commission (the "SEC") or by any securities
association registered under the Securities Exchange Act of 1934.
1.4 Smith Barney will provide one or more persons during
normal business hours to respond to telephone questions concerning the
Fund.
1.5 Smith Barney will transmit any orders received by it for
purchase or redemption of Shares to The Shareholder Services Group, Inc.
("TSSG"), the Fund's transfer and dividend agent, or any successor to TSSG
of which the Fund has notified Smith Barney in writing.
1.6 Whenever in their judgment such action is warranted for
any reason, including, without limitation, market, economic or political
conditions, the Fund's officers may decline to accept any orders for, or
make any sales of, the Shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
1.7 Smith Barney will act only on its own behalf as principal
should it choose to enter into selling agreements with selected dealers or
others.
1.8 The Fund will pay to Smith Barney an annual fee in
connection with the offering and sale of the Shares under this Agreement.
The annual fee paid to Smith Barney, will be calculated daily and paid
monthly by the Fund at an annual rate set forth in the Services and
Distribution Plan (the "Plan") based on the average daily net assets of the
Fund; provided that payment shall be made in any month only to the extent
that such payment shall not exceed the sales charge limitations established
by the National Association of Securities Dealers, Inc.
The annual fee paid to Smith Barney under this Section 1.8 may
be used by Smith Barney to cover any expenses primarily intended to result
in the sale of Shares, including , but not limited to, the following:
(a) cost of payments made to Smith Barney Financial
Consultants and other employees of Smith Barney or other broker-dealers
that engage in the distribution of the Shares;
(b) payments made to, and expenses of, persons who provide
support services in connection with the distribution of the Shares,
including, but not limited to, office space and equipment, telephone
facilities, answering routine inquiries regarding the Fund, processing
shareholder transactions and providing any other shareholder services;
(c) costs relating to the formulation and implementation of
marketing and promotional activities, including, but not limited to, direct
mail promotions and television, radio, newspaper, magazine and other mass
media advertising;
(d) costs of printing and distributing prospectuses and
reports of the Fund to prospective shareholders of the Fund;
(e) costs involved in preparing, printing and distributing
sales literature pertaining to the Fund; and
(f) costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional activities
that the Fund may, from time to time, deem advisable;
except that distribution expenses shall not include any expenditures in
connection with services which Smith Barney, any of its affiliates, or any
other person have agreed to bear without reimbursement.
1.9 Smith Barney shall prepare and deliver reports to the Treasurer
of the Fund and to the administrator or sub-administrator of the Fund on a
regular, at least quarterly, basis, showing the distribution expenses
incurred pursuant to this Agreement and the Plan and the purposes therefor,
as well as any supplemental reports as the Directors, from time to time,
may reasonably request.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions
that may be reasonably necessary in connection with the qualification of
the Shares for sale in those states that Smith Barney may designate.
2.2 The Fund shall furnish from time to time for use in
connection with the sale of the Shares, such information reports with
respect to the Fund and its Shares as Smith Barney may reasonably request,
all of which shall be signed by one or more of the Fund's duly authorized
officers; and the Fund warrants that the statements contained in any such
reports, when so signed by the Fund's officers, shall be true and correct.
The Fund shall also furnish Smith Barney upon request with (a) annual
audits of the Fund's books and accounts made by independent certified
public accountants regularly retained by the Fund; (b) semi-annual
unaudited financial statements pertaining to the Fund; (c) quarterly
earnings statements prepared by the Fund; (d) a monthly itemized list of
the securities in the Fund's portfolio; (e) monthly balance sheets as soon
as practicable after the end of each month; and (f) from time to time such
additional information regarding the Fund's financial condition as Smith
Barney may reasonably request.
3. Representations and Warranties
The Fund represents to Smith Barney that all registration statements,
prospectuses and statements of additional information filed by the Fund
with the SEC under the 1933 Act and the 1940 Act with respect to the Shares
have been carefully prepared in conformity with the requirements of the
1933 Act, the 1940 Act and the rules and regulations of the SEC thereunder.
As used in this Agreement, the terms "registration statement," "prospectus"
and "statement of additional information" shall mean any registration
statement, prospectus and statement of additional information filed by the
Fund with the SEC and any amendments and supplements thereto which at any
time shall have been filed with the SEC. The Fund represents and warrants
to Smith Barney that any registration statement, prospectus and statement
of additional information, when such registration statement becomes
effective, will include all statements required to be contained therein in
conformance with the 1933 Act, the 1940 Act and the rules and regulations
of the SEC; that all statements of fact contained in any registration
statement, prospectus or statement of additional information will be true
and correct when such registration statement becomes effective; and that
neither any registration statement nor any prospectus or statement of
additional information when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares. The Fund
may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement
or supplements to any prospectus or statement of additional information as,
in the light of future developments, may, in the opinion of the Fund's
counsel, be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from Smith Barney to do
so, Smith Barney may, at its option, terminate this Agreement. The Fund
shall not file any amendment to any registration statement or supplement to
any prospectus or statement of additional information without giving Smith
Barney reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Fund's right
to file at any time such amendments to any registration statement and/or
supplements to any prospectus or statement of additional information, of
whatever character, as the Fund may deem advisable, such right being in all
respects absolute and unconditional.
4. Indemnification
4.1 The Fund authorizes Smith Barney and dealers to use any
prospectus or statement of additional information furnished by the Fund
from time to time, in connection with the sale of the Shares. The Fund
agrees to indemnify, defend and hold Smith Barney, its several officers and
directors, and any person who controls Smith Barney within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which Smith Barney, its
officers and directors, or any such controlling person, may incur under the
1933 Act, the 1940 Act or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of a material
fact contained in any registration statement, any prospectus or any
statement of additional information or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be
stated in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any thereof
not misleading; provided, however, that the Fund's agreement to indemnify
Smith Barney, its officers or directors, and any such controlling person
shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any statements or representations made by Smith Barney or
its representatives or agents other than such statements and
representations as are contained in any prospectus or statement of
additional information and in such financial and other statements as are
furnished to Smith Barney pursuant to paragraph 2.2 of this Agreement; and
further provided that the Fund's agreement to indemnify Smith Barney and
the Fund's representations and warranties hereinbefore set forth in
paragraph 3 of this Agreement shall not be deemed to cover any liability to
the Fund or its shareholders to which Smith Barney would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of Smith Barney's reckless
disregard of its obligations and duties under this Agreement. The Fund's
agreement to indemnify Smith Barney, its officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned upon the
Fund's being notified of any action brought against Smith Barney, its
officers or directors, or any such controlling person, such notification to
be given by letter or by telegram addressed to the Fund at its principal
office in New York, New York and sent to the Fund by the person against
whom such action is brought, within ten days after the summons or other
first legal process shall have been served. The failure so to notify the
Fund of any such action shall not relieve the Fund from any liability that
the Fund may have to the person against whom such action is brought by
reason of any such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's indemnity
agreement contained in this paragraph 4.1. The Fund will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of
good standing chosen by the Fund and approved by Smith Barney. In the
event the Fund elects to assume the defense of any such suit and retains
counsel of good standing approved by Smith Barney, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but if the Fund does not elect to assume
the defense of any such suit, or if Smith Barney does not approve of
counsel chosen by the Fund, the Fund will reimburse Smith Barney, its
officers and directors, or the controlling person or persons named as
defendant or defendants in such suit, for the fees and expenses of any
counsel retained by Smith Barney or them. The Fund's indemnification
agreement contained in this paragraph 4.1 and the Fund's representations
and warranties in this Agreement shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of Smith
Barney, its officers and directors, or any controlling person, and shall
survive the delivery of any of the Fund's Shares. This agreement of
indemnity will inure exclusively to Smith Barney's benefit, to the benefit
of its several officers and directors, and their respective estates, and to
the benefit of the controlling persons and their successors. The Fund
agrees to notify Smith Barney promptly of the commencement of any
litigation or proceedings against the Fund or any of its officers or
Directors in connection with the issuance and sale of any of the Fund's
Shares.
4.2 Smith Barney agrees to indemnify, defend and hold the
Fund, its several officers and Directors, and any person who controls the
Fund within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the costs of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) that the
Fund, its officers or Directors or any such controlling person may incur
under the 1933 Act, the 1940 Act or under common law or otherwise, but only
to the extent that such liability or expense incurred by the Fund, its
officers or Directors, or such controlling person resulting from such
claims or demands shall arise out of or be based upon any untrue, or
alleged untrue, statement of a material fact contained in information
furnished in writing by Smith Barney to the Fund and used in the answers to
any of the items of the registration statement or in the corresponding
statements made in the prospectus or statement of additional information,
or shall arise out of or be based upon any omission, or alleged omission,
to state a material fact in connection with such information furnished in
writing by Smith Barney to the Fund and required to be stated in such
answers or necessary to make such information not misleading. Smith
Barney's agreement to indemnify the Fund, its officers or Directors, and
any such controlling person, as aforesaid, is expressly conditioned upon
Smith Barney being notified of any action brought against the Fund, its
officers or Directors, or any such controlling person, such notification to
be given by letter or telegram addressed to Smith Barney at its principal
office in New York, New York and sent to Smith Barney by the person against
whom such action is brought, within ten days after the summons or other
first legal process shall have been served. Smith Barney shall have the
right to control the defense of such action, with counsel of its own
choosing, satisfactory to the Fund, if such action is based solely upon
such alleged misstatement or omission on Smith Barney's part, and in any
other event the Fund, its officers or Directors or such controlling person
shall each have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify Smith Barney of
any such action shall not relieve Smith Barney from any liability that
Smith Barney may have to the Fund, its officers or Directors, or to such
controlling person by reason of any such untrue, or alleged untrue,
statement or omission, or alleged omission, otherwise than on account of
Smith Barney's indemnity agreement contained in this paragraph 4.2. Smith
Barney agrees to notify the Fund promptly of the commencement of any
litigation or proceedings against Smith Barney or any of its officers or
directors in connection with the issuance and sale of any of the Fund's
Shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall wish
to do so, to assume the defense thereof with counsel satisfactory to such
indemnified party. If the indemnifying party opts to assume the defense of
such action, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than (a)
reasonable costs of investigation or the furnishing of documents or
witnesses and (b) all reasonable fees and expenses of separate counsel to
such indemnified party if (i) the indemnifying party and the indemnified
party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of
the indemnifying party and the indemnified party by the same counsel would
be inappropriate due to actual or potential differing interests between
them in the conduct of the defense of such action.
5. Effectiveness of Registration
None of the Shares shall be offered by either Smith Barney or the
Fund under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares under this Agreement shall be accepted by
the Fund if and so long as the effectiveness of the registration statement
then in effect or any necessary amendments thereto shall be suspended under
any of the provision of the 1933 Act or if and so long as a current
prospectus as required by Section 5(b) (2) of the 1933 Act is not on file
with the SEC; provided, that nothing contained in this paragraph 5 shall in
any way restrict or have an application to or bearing upon the Fund's
obligation to repurchase its Shares from any shareholder in accordance with
the provisions of the Fund's prospectus, statement of additional
information or Corrected Restated Articles of Incorporation dated September
21, 1992, as amended from time to time.
6. Notice to Smith Barney
The Fund agrees to advise Smith Barney immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect
or for additional information;
(b) In the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement, prospectus or
statement of additional information then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement, prospectus or
statement of additional information then in effect or that requires the
making of a change in such registration statement, prospectus or statement
of additional information in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendment to any
registration statement, prospectus or statement of additional information
which may from time to time be filed with the SEC.
7. Term of the Agreement
This Agreement shall become effective as of the effective date of the
transfer of all of the business and assets and the assignment of all the
liabilities and obligations of Smith Barney Shearson Fundamental Value Fund
Inc., a Washington corporation (the "Fund"), in exchange for distribution
of Class A, Class B, Class C and Class Y shares of the Company to the
Fund's shareholders, and continues for successive annual periods thereafter
so long as such continuance is specifically approved at least annually by
(a) the Fund's Board of Directors or (b) by a vote of a majority (as
defined in the 1940 Act) of the outstanding Shares, provided that in either
event the continuance is also approved by a majority of the Directors of
the Fund who are not "interested persons" (as defined in the 1940 Act) of
any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days' notice by the Fund's Board of Directors, by
vote of the holders of a majority of the Shares, or on 90 days' notice by
Smith Barney. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
8. Miscellaneous
The Fund recognizes that directors, officers and employees of Smith
Barney may from time to time serve as directors, trustees, officers and
employees of corporations and business trust (including other investment
companies) and that such other corporations and trusts may include the name
"Smith Barney" as part of their name, and that Smith Barney or its
affiliates may enter into distribution or other agreements with such other
corporations and trusts. If Smith Barney ceases to act as the distributor
of the Shares, the Fund agrees that, at Smith Barney's request, the Fund's
license to use the words "Smith Barney" will terminate and that the Fund
will take all necessary action to change the name of the Fund to a name not
including the words "Smith Barney."
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance
of this Agreement by signing and returning to us the enclosed copy of this
Agreement.
Very truly yours,
SMITH BARNEY FUNDAMENTAL
VALUE FUND INC.
By: __________________________
Name: Heath B. McLendon
Title: Chairman
Accepted:
SMITH BARNEY INC.
By: __________________________
Authorized Officer
EXHIBIT (8)
CUSTODIAN SERVICES AGREEMENT
This Agreement is made as of May 16, 1995 by and
between SMITH BARNEY
FUNDAMENTAL VALUE FUND INC., a Maryland corporation (the
"Fund") and PNC
BANK, NATIONAL ASSOCIATION, a national banking association
("PNC Bank").
The Fund is registered as an open-end investment
company under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Fund wishes to retain PNC Bank to provide custodian
services and PNC
Bank wishes to furnish such services, either directly or
through an affiliate
or affiliates, as more fully described herein.
In consideration of the premises and mutual covenants herein
contained,
the parties agree as follows:
1. Definitions.
(a) "Authorized Person". The term
"Authorized
Person" shall mean any officer of the Fund and any other
person, who is duly authorized
by the Fund's Governing Board, to give Oral and Written
Instructions on behalf of the
Fund. Such persons are listed in the Certificate attached
hereto as the Authorized Persons
Appendix, as such Appendix may be amended in writing by the
Fund's Governing Board
from time to time.
(b) "Book-Entry System". The term "Book-
Entry System"
means Federal Reserve Treasury book-entry system for United
States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry
system maintained by an exchange registered with the SEC
under the 1934 Act.
(c) "CFTC". The term "CFTC" shall mean the
Commodities
Futures Trading Commission.
(d) "Governing Board". The term "Governing
Board"
shall mean the Fund's Board of Directors if the Fund is a
corporation or the Fund's Board of Trustees if the Fund is a
trust, or, where duly
authorized, a competent committee thereof.
(e) "Oral Instructions". The term "Oral
Instructions"
shall mean oral instructions received by PNC Bank from an
Authorized Person or from a person reasonably believed by
PNC Bank to be an
Authorized Person.
(f) "SEC". The term "SEC" shall mean the
Securities
and Exchange Commission.
(g) "Securities and Commodities Laws". The
term
"Securities and Commodities Laws" shall mean the "1933 Act"
which shall mean the
Securities Act of 1933, the "1934 Act" which shall mean the
Securities Exchange Act of
1934, the 1940 Act, and the "CEA" which shall mean the
Commodities Exchange Act, as
amended.
(h) "Shares". The term "Shares" shall mean the shares
of stock of any series or
class of the Fund, or, where appropriate, units of
beneficial interest in a trust where the
Fund is organized as a Trust.
(i) "Property". The term "Property" shall
mean:
(i) any and all securities
and other
investment items which the Fund may from time to time
deposit, or cause to be deposited, with PNC Bank or which
PNC Bank may from time to
time hold for the Fund;
(ii) all income in respect of any
of such securities or
other investment items;
(iii) all proceeds of the sale of any
of such securities or
investment items; and
(iv) all proceeds of the sale of
securities issued
by the Fund, which are received by PNC Bank
from time to time, from or on behalf of the
Fund.
(j) "Written Instructions". The term
"Written
Instructions" shall mean written instructions signed by one
Authorized Person and
received by PNC Bank. The instructions may be delivered by
hand, mail, tested telegram,
cable, telex or
facsimile sending device.
2. Appointment. The Fund hereby appoints PNC Bank to
provide custodian
services to the Fund, and PNC Bank accepts such appointment
and
agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where
applicable, will provide PNC Bank with the following:
(a) certified or authenticated copies of the
resolutions of the Fund's
Governing Board, approving the
appointment of PNC Bank or its affiliates to provide
services;
(b) a copy of the Fund's most recent effective
registration statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the Fund's
distribution agreement or
agreements;
(e) a copy of the Fund's administration
agreements if PNC Bank is not
providing the Fund with such services;
(f) copies of any shareholder servicing
agreements made in respect of the
Fund; and
(g) certified or authenticated copies of any and
all amendments or
supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
PNC Bank undertakes
to comply with all applicable requirements of the Securities
and Commodities Laws and
any laws, rules and regulations
of governmental authorities having jurisdiction with respect
to all duties to be performed
by PNC Bank hereunder. Except as specifically set forth
herein, PNC Bank assumes no
responsibility for such compliance by the Fund.
5. Instructions. Unless otherwise provided in this
Agreement, PNC Bank shall
act only upon Oral and Written Instructions. PNC Bank shall
be entitled to rely upon any
Oral and Written Instructions it receives from an Authorized
Person (or from a person
reasonably believed by PNC Bank to be an Authorized Person)
pursuant to this
Agreement. PNC Bank may assume that any Oral or Written
Instructions received
hereunder are not in any way inconsistent with the
provisions of organizational documents
or this Agreement or of any vote, resolution or proceeding
of the Fund's Governing Board
or of the Fund's shareholders.
The Fund agrees to forward to PNC Bank Written Instructions
confirming Oral Instructions so that PNC Bank receives the
Written Instructions by the
close of business on the same day that such Oral
Instructions are received. The fact that
such confirming Written Instructions are not received by PNC
Bank shall in no way
invalidate the transactions or enforceability of the
transactions authorized by the Oral
Instructions.
The Fund further agrees that PNC Bank shall incur no
liability to the Fund in
acting upon Oral or Written Instructions provided such
instructions reasonably appear to
have been received from an Authorized Person.
6. Right to Receive Advice.
(a) Advice of the Fund. If PNC Bank is in doubt
as to any action it should
or should not take, PNC Bank may request directions or
advice, including Oral or Written
Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in
doubt as to any questions
of law pertaining to any action it should or should not
take, PNC Bank may request advice
at its own cost from such counsel of its own choosing (who
may be counsel for the Fund,
the Fund's advisor or PNC Bank, at the option of PNC Bank).
(c) Conflicting Advice. In the event of a
conflict between directions,
advice or Oral or Written Instructions PNC Bank receives
from the Fund, and the advice it
receives from counsel,
PNC Bank shall be entitled to rely upon and follow the
advice of counsel. (d) Protection
of PNC Bank. PNC Bank shall be protected
in any action it takes or does not take in reliance upon
directions, advice or Oral or Written Instructions it
receives from the Fund or from
counsel and which PNC Bank believes, in good faith, to be
consistent with those
directions, advice or Oral or Written Instructions.
Nothing in this paragraph shall be construed so as to
impose an
obligation upon PNC Bank (i) to seek such directions, advice
or Oral or Written
Instructions, or (ii) to act in accordance with such
directions, advice or Oral or Written
Instructions unless, under the terms of other provisions of
this Agreement, the same is a
condition of PNC Bank's
properly taking or not taking such action.
7. Records. The books and records pertaining to the
Fund which are in the
possession of PNC Bank, shall be the property of the Fund.
Such books and records shall
be prepared and maintained as required by the 1940 Act and
other applicable securities
laws, rules and regulations. The Fund, or the Fund's
Authorized Persons, shall have
access to such books and records at all time during PNC
Bank's normal business hours.
Upon the reasonable request of the Fund, copies of any such
books and records shall be
provided by PNC Bank to the Fund or to an Authorized Person
of the Fund, at the Fund's
expense.
8. Confidentiality. PNC Bank agrees to keep
confidential all records of the
Fund
(a) "Authorized Person". The term
"Authorized
Person" shall mean any officer of the Fund and any other
person, who is duly authorized
by the Fund's Governing Board, to give Oral and Written
Instructions on behalf of the
Fund. Such persons are listed in the Certificate attached
hereto as the Authorized Persons
Appendix, as such Appendix may be amended in writing by the
Fund's Governing Board
from time to time.
(b) "Book-Entry System". The term "Book-
Entry System"
means Federal Reserve Treasury book-entry system for United
States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry
disclosing such information.
9. Cooperation with Accountants. PNC Bank shall
cooperate with the Fund's
independent public accountants and shall take all reasonable
action in the performance of
its obligations under this Agreement to ensure that the
necessary information is made
available to such accountants for the expression of their
opinion, as required by the Fund.
10. Disaster Recovery. PNC Bank shall enter into and
shall maintain in effect
with appropriate parties one or more agreements making
reasonable provision for
emergency use of electronic data processing equipment to the
extent appropriate
equipment is available. In the event of equipment failures,
PNC Bank shall, at no
additional expense to the Fund, take reasonable steps to
minimize service interruptions but
shall have no liability with respect thereto.
11. Compensation. As compensation for custody
services rendered by PNC Bank
during the term of this Agreement, the Fund will pay to PNC
Bank a fee or fees as may be
agreed to in writing from time to time by the Fund and PNC
Bank.
12. Indemnification. The Fund agrees to indemnify and hold
harmless PNC Bank and its nominees from all taxes, charges,
expenses, assessment, claims
and liabilities (including, without limitation, liabilities
arising under the Securities and
Commodities Laws and any state and foreign securities and
blue sky laws, and
amendments thereto, and expenses, including (without
limitation) attorneys' fees and
disbursements, arising directly or indirectly from any
action which PNC Bank takes or
does not take (i) at the request or on the direction of or
in reliance on the advice of the
Fund or (ii) upon Oral or Written Instructions. Neither PNC
Bank, nor any of its
nominees, shall be indemnified against any liability to the
Fund or to its shareholders (or
any expenses incident to such liability) arising out of PNC
Bank's own willful misfeasance,
bad faith, negligence or reckless disregard of its duties
and obligations under this
Agreement.
13. Responsibility of PNC Bank. PNC Bank shall be
under no duty to take any
action on behalf of the Fund except as specifically set
forth herein or as may be specifically
agreed to by PNC Bank, in writing. PNC Bank shall be
obligated to exercise care and
diligence in the performance of its duties hereunder, to act
in good faith and to use its best
effort, within reasonable limits, in performing services
provided for under this Agreement.
PNC Bank shall be responsible for its own negligent failure
to perform its duties under this
Agreement. Notwithstanding the foregoing, PNC Bank shall not
be responsible for losses
beyond its control, provided that PNC Bank has acted in
accordance with the standard of
care set forth above; and provided further that PNC Bank
shall only be responsible for that
portion of losses or damages suffered by the Fund that are
attributable to the negligence of
PNC Bank.
Without limiting the generality of the foregoing or of
any other provision of this
Agreement, PNC Bank, in connection with its duties under
this Agreement, shall not be under any duty or obligation to
inquire into and shall not be
liable for (a) the validity or invalidity or authority or
lack thereof of any Oral or Written
Instruction, notice or other instrument which conforms to
the applicable requirements of
this Agreement, and which PNC Bank reasonably believes to be
genuine; or (b) delays or
errors or loss of data occurring by reason of circumstances
beyond PNC Bank's control,
including acts of civil or military authority, national
emergencies, labor difficulties, fire,
flood or catastrophe, acts of God, insurrection, war, riots
or failure of the mails,
transportation, communication or power supply.
Notwithstanding anything in this Agreement to the
contrary, PNC Bank shall have
no liability to the Fund for any consequential, special or
indirect losses or damages which
the Fund may incur or suffer by or as a consequence of PNC
Bank's performance of the
services provided hereunder, whether or not the likelihood
of such losses or damages was
known by PNC Bank.
14. Description of Services.
(a) Delivery of the Property. The Fund will
deliver or arrange for delivery
to PNC Bank, all the property owned by the
Fund, including cash received as a result of the
distribution of its Shares, during the period
that is set forth in this Agreement.
PNC Bank will not be responsible for such property until
actual receipt.
(b) Receipt and Disbursement of Money. PNC Bank,
acting upon Written
Instructions, shall open and maintain separate account(s) in
the Fund's name using all cash
received from or for the account of the Fund, subject to the
terms of this Agreement. In
addition, upon Written Instructions, PNC Bank shall open
separate custodial accounts for
each separate series, class or portfolio of the Fund and
shall hold in such account(s) all
cash received from or for the accounts of the Fund
specifically designated to each separate
series, class or portfolio. PNC Bank shall make cash
payments from or for the account of
the Fund only for:
(i) purchases of securities in the name of the
Fund or PNC Bank or PNC Bank's nominee as
provided in sub-paragraph j and for which PNC Bank has
received a copy of the broker's
or dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund
delivered to PNC Bank;
(iii) payment of, subject to Written
Instructions,
interest, taxes, administration, accounting,
distribution, advisory, management fees or similar expenses
which are to be borne by the
Fund;
(iv) payment to, subject to receipt
of Written
Instructions, the Fund's transfer agent, as agent for the
shareholders, an amount equal to
the amount of dividends and distributions stated in the
Written Instructions to be
distributed in cash by the transfer agent to shareholders,
or, in lieu of paying the Fund's
transfer agent, PNC Bank may arrange for the direct payment
of cash dividends and
distributions to shareholders in accordance with procedures
mutually agreed upon from
time to time by and among the Fund, PNC Bank and the Fund's
transfer agent;
(v) payments, upon receipt of Written
Instructions, in connection with the
conversion, exchange or surrender of securities owned or
subscribed to by the Fund and
held by or delivered to PNC Bank;
(vi) payments of the amounts of
dividends
received
with respect to securities sold short;
payments made to a sub-custodian pursuant to provisions in
sub-paragraph c of this
Paragraph; and
(viii) payments, upon Written Instructions
made for
other proper Fund purposes. PNC Bank is
hereby authorized to endorse and collect all checks, drafts
or other orders for the payment
of money received as custodian for the account of the Fund.
(c) Receipt of Securities.
(i) PNC Bank shall hold all securities received
by it for the account of the Fund in a
separate account that physically segregates such securities
from those of any other
persons, firms or corporations, except for securities held
in a
Book-Entry System. All such securities shall be held or
disposed of only upon Written
Instructions of the Fund pursuant to the terms of this
Agreement. PNC Bank shall have
no power or authority to assign, hypothecate, pledge or
otherwise dispose of any such
securities or investment, except upon the express terms of
this Agreement and upon
Written Instructions, accompanied by a certified resolution
of the Fund's Governing
Board, authorizing the transaction. In no case may any
member of the Fund's Governing
Board, or any officer, employee or agent of the Fund
withdraw any securities. At PNC
Bank's own expense and for its own convenience, PNC Bank may
enter into sub-custodian
agreements with other banks or trust companies to perform
duties described in this sub-
paragraph c. Such bank or trust company shall have an
aggregate capital, surplus and
undivided profits, according to its last published report,
of at least one million dollars
($1,000,000), if it is a subsidiary or affiliate of PNC
Bank, or at least twenty million
dollars ($20,000,000) if such bank or trust company is not a
subsidiary or affiliate of
PNC Bank. In addition, such bank or trust company must
agree to comply with the
relevant provisions of the 1940 Act and other applicable
rules and regulations. PNC Bank
shall remain responsible for the performance of all of its
duties as described
in this Agreement and shall hold the Fund harmless from PNC
Bank's own (or any sub-
custodian chosen by PNC Bank under the terms of this sub-
paragraph c) acts or
omissions, under the standards of care provided for herein.
(d) Transactions Requiring Instructions. Upon receipt of
Oral or Written Instructions and not otherwise, PNC Bank,
directly or through the use of the Book-Entry System, shall:
(i) deliver any securities held for
the Fund against the
receipt of payment for the sale of
such securities;
(ii) execute and deliver to such
persons as may be
designated in such Oral or Written
Instructions, proxies, consents, authorizations, and any
other instruments whereby the
authority of the Fund as owner of
any securities may be exercised;
(iii) deliver any securities to the issuer
thereof,
or its agent, when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case,
the cash or other consideration is to be delivered to PNC
Bank;
(iv) deliver any securities held for
the Fund against receipt of
other securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any
corporation, or the exercise of any
conversion privilege;
(v) deliver any securities held for
the Fund to any
protective committee, reorganization
committee or other person in connection with
the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of
any corporation, and receive and hold under the terms of
this Agreement such certificates
of deposit, interim receipts or other instruments or
documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets
of the Fund and take such other steps as
shall be stated in said Oral or Written
Instructions to be for the purpose of effectuating a duly
authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;
(vii) release securities belonging to the Fund to
any bank or trust company for the purpose of a
pledge or hypothecation to secure any loan
incurred by the Fund; provided, however, that
securities shall be released only upon payment to PNC Bank
of the monies borrowed,
except that in cases where additional collateral is required
to secure a borrowing already
made subject to proper prior authorization, further
securities may be released for that
purpose; and repay such loan upon redelivery to it of the
securities pledged or
hypothecated therefor
and upon surrender of the note or notes evidencing the loan;
(viii) release and deliver securities
owned by the
Fund in connection with any repurchase
agreement entered into on behalf of the Fund,
but only on receipt of payment therefor; and pay out moneys
of the Fund in connection
with such repurchase agreements, but only upon the delivery
of the securities;
(ix) release and deliver or
exchange securities
owned by the Fund in connection with any
conversion of such securities, pursuant to their terms, into
other securities;
(x) release and deliver
securities owned
by the
Fund for the purpose of redeeming in kind
shares of the Fund upon delivery thereof to
PNC Bank; and
(xi) release and deliver or
exchange securities
owned by the Fund for other corporate
purposes. PNC Bank must also receive a certified resolution
describing the nature of the
corporate purpose and the name and address of the person(s)
to whom delivery shall be
made when such action is pursuant to subparagraph d above.
(e) Use of Book-Entry System. The Fund shall deliver
to PNC Bank certified
resolutions of the Fund's Governing Board approving,
authorizing and instructing PNC
Bank on a continuous and on-going basis, to deposit in the
Book-Entry System all
securities belonging to the Fund eligible for deposit
therein and to utilize the Book-Entry
System to the extent possible in connection with settlements
of purchases and sales of
securities by the Fund, and deliveries and returns of
securities loaned, subject to
repurchase agreements or used as collateral in connection
with borrowings. PNC Bank
shall continue to perform such duties until it receives
Written or Oral Instructions
authorizing contrary actions(s).
To administer the Book-Entry System properly, the following
provisions shall apply:
(i) With respect to
securities of the Fund
which
are maintained in the Book-Entry system,
established pursuant to this sub-paragraph e hereof, the
records of PNC Bank shall
identify by Book-Entry or otherwise those securities
belonging to the Fund. PNC Bank
shall furnish the Fund a detailed statement of the Property
held for the Fund under this
Agreement at least monthly and from time to time and upon
written request.
(ii) Securities and any cash of the
Fund
deposited
in the Book-Entry System will at all times be
segregated from any assets and cash
controlled by PNC Bank in other than a fiduciary or
custodian capacity but may be
commingled with other assets held in such capacities. PNC
Bank and its sub-custodian, if
any, will pay out money only upon receipt of securities and
will deliver securities only
upon the receipt of money.
(iii) All books and records maintained by PNC Bank
which relate to the Fund's participation in
the Book-Entry System will at all times during PNC Bank's
regular business hours be open
to the inspection of the Fund's duly authorized employees or
agents, and the Fund will be
furnished with all information in respect of the services
rendered to it as it may require.
(iv) PNC Bank will provide the Fund with copies of
any report obtained by PNC Bank on the system
of internal accounting control of the
Book-Entry System promptly after receipt of such a report by
PNC Bank. PNC Bank will
also
provide the Fund with such reports on its own system of
internal control as the Fund may
reasonably request from time to time.
(f) Registration of Securities. All Securities
held for the Fund which are
issued or issuable only in bearer form, except such
securities held in the Book-Entry
System, shall be held by PNC Bank in bearer form; all other
securities held for the Fund
may be registered in the name of the Fund; PNC Bank; the
Book-Entry System; a sub-
custodian; or any duly appointed nominee(s) of the Fund, PNC
Bank, Book-Entry system
or
sub-custodian. The Fund reserves the right to instruct PNC
Bank as to the method of
registration and safekeeping of the securities of the Fund.
The Fund agrees to furnish to
PNC Bank appropriate instruments to enable PNC Bank to hold
or deliver in proper form
for transfer, or to register its registered nominee or in
the name of the Book-Entry System,
any securities which it may hold for the account of the Fund
and which may from time to
time be registered in the name of the Fund. PNC Bank shall
hold all such securities which
are not held in the Book-Entry System in a separate account
for the Fund in the name of
the Fund physically segregated at all times from those of
any other person or persons.
(g) Voting and Other Action. Neither PNC Bank nor its
nominee shall vote any
of the securities held pursuant to this Agreement by or for
the account of the Fund, except
in accordance with Written Instructions. PNC Bank, directly
or through the use
of the Book-Entry System, shall execute in blank and
promptly deliver all notice, proxies,
and proxy soliciting materials to the registered holder of
such securities. If the registered
holder is not the Fund then Written or Oral Instructions
must designate the person(s) who
owns such securities.
(h) Transactions Not Requiring Instructions. In the
absence of contrary Written Instructions, PNC Bank is
authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account
of
the Fund, all income, dividends,
distributions, coupons, option premiums, other payments and
similar items, included or to
be included in the Property, and, in addition, promptly
advise the Fund of such receipt and
credit such income, as collected, to
the Fund's custodian account;
(B) endorse and deposit for collection,
in
the name of the Fund, checks, drafts, or
other orders for the payment of money;
(C) receive and hold for the account of
the
Fund all securities received as a
distribution on the Fund's portfolio
securities as a result of a stock
dividend, share split-up or
reorganization, recapitalization,
readjustment or other rearrangement or
distribution of rights or similar
securities issued with respect to any
portfolio securities belonging to the
Fund held by PNC Bank hereunder;
(D) present for payment and collect the
amount payable upon all securities which
may mature or be called, redeemed, or retired, or otherwise
become payable on the date
such securities become payable; and
(E) take any action which may be
necessary
and proper in connection with the
collection and receipt of such income and
other payments and the endorsement for collection of checks,
drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PNC Bank is authorized to deliver
or
cause to be delivered Property against
payment or other consideration or written receipt therefor
in the following cases:
(1) for examination by a broker or
dealer selling for the account of
the Fund in accordance with street
delivery custom;
(2) for the exchange of interim
receipts or
temporary securities for
definitive securities; and
(3) for transfer of securities
into the name of the
Fund or PNC Bank or
nominee of either, or for exchange
of securities for a different number of bonds,certificates,
or other evidence, representing
the same aggregate face amount or number of units bearing
the same interest
rate, maturity date and call provisions, if any; provided
that,
in any such case, the new securities are to be delivered to
PNC Bank.
(B) Unless and until PNC Bank receives
Oral
or Written Instructions to the contrary,
PNC Bank shall:
(1) pay all income items held
by it which call for
payment upon
presentation and hold the cash
received by it upon such payment for
the account of the Fund;
(2) collect interest and cash
dividends received,
with notice to the Fund,
to the Fund's account;
(3) hold for the account of the
Fund all stock
dividends, rights and similar
securities issued with respect to
any securities held by PNC Bank; and
(4) execute as agent on behalf
of
the Fund all necessary ownership
certificates required by the
Internal Revenue Code or the Income
Tax Regulations of the United States
Treasury Department or under the
laws of any State now or hereafter
in effect, inserting the Fund's
name, on such certificate as the
owner of the securities covered
thereby, to the extent it may
lawfully do so.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written
or Oral
Instructions establish and maintain segregated
account(s) on its records for and on behalf of the Fund.
Such account(s) may be used to
transfer cash and securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance by
the
Fund with the procedures required by a
securities or option exchange, providing such procedures
comply with the
1940 Act and any releases of the SEC relating to
the maintenance of segregated accounts by
registered investment companies; and
(B) Upon receipt of Written
Instructions, for
other proper corporate purposes.
(ii) PNC Bank may enter into separate custodial
agreements with various futures commission
merchants ("FCMs") that the Fund uses ("FCM Agreement").
Pursuant to an
FCM Agreement, the Fund's margin deposits in any
transactions involving futures
contracts and options on futures contracts will be held by
PNC Bank in accounts ("FCM
Account") subject to the disposition by the FCM involved in
such contracts and in
accordance with the customer contract between FCM and the
Fund ("FCM Contract"),
SEC rules and the rules of the applicable commodities
exchange. Such FCM Agreements
shall only be entered into upon receipt of Written
Instructions from the Fund which state
that:
(A) a customer agreement between the
FCM and
the Fund has been entered into; and
(B) the Fund is in compliance with all
the
rules and regulations of the CFTC.
Transfers of initial margin shall be made into a FCM Account
only upon
Written Instructions; transfers of premium and variation
margin may be made
into a FCM Account pursuant to Oral Instructions.
Transfers of funds from a FCM Account to
the FCM for which PNC Bank holds such an
account may only occur upon certification by the FCM to PNC
Bank that pursuant to the
FCM Agreement and the FCM Contract, all conditions precedent
to its right to give PNC
Bank such instructions have been satisfied.
(iii) PNC Bank shall arrange for the
establishment
of IRA custodian accounts for such share-
holders holding Shares through IRA accounts, in accordance
with the Fund's
prospectuses, the Internal Revenue Code (including
regulations), and with such other
procedures as are mutually agreed upon from time to time by
and among the Fund, PNC
Bank and the Fund's transfer agent.
(j) Purchases of Securities. PNC Bank shall settle
purchased securities upon
receipt of Oral or Written Instructions
from the Fund or its investment advisor(s) that specify:
(i) the name of the issuer and the
title of the
securities, including CUSIP number if
applicable;
(ii) the number of shares or the
principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and
settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon
such
purchase;
and
(vi) the name of the person from whom or
the broker
through whom the purchase was made. PNC Bank
shall upon receipt of securities purchased by or for the
Fund pay out of
the moneys held for the account of the Fund the total amount
payable to the person from
whom or the broker through whom the purchase was made,
provided that the same
conforms to the total amount
payable as set forth in such Oral or Written
Instructions.
(k) Sales of Securities. PNC Bank shall settle sold
securities upon receipt of Oral
or Written Instructions from the
Fund that specify:
(i) the name of the issuer and the
title of the
security, including CUSIP number if
applicable;
(ii) the number of shares or principal
amount sold,
and accrued interest, if any;
(iii) the date of trade, settlement and
sale;
(iv) the sale price per unit;
(v) the total amount payable to
the Fund upon
such
sale;
(vi) the name of the broker through whom
or the
person to whom the sale was made; and
(vii) the location to which the security
must be
delivered and delivery deadline, if any. PNC
Bank shall deliver the securities upon receipt of the total
amount payable
to the Fund upon such sale, provided that the total amount
payable is the same as was set
forth in the Oral or Written Instructions. Subject to the
foregoing, PNC Bank may accept
payment in such form as shall be satisfactory to it, and may
deliver securities and arrange
for payment in accordance with the customs prevailing among
dealers in securities.
(l) Reports.
(i) PNC Bank shall furnish the
Fund the
following
reports:
(A) such periodic and
special reports as
the Fund may reasonably request;
(B) a monthly statement
summarizing all
transactions and entries for the account
of the Fund, listing the portfolio securities belonging to
the Fund with
the adjusted average cost of each issue and the market value
at the end of such month, and
stating the cash account of the Fund including disbursement;
(C) the reports to be furnished to the Fund
pursuant to Rule 17f-4; and
(D) such other information as may be agreed
upon from time to time
between the Fund
and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund
any proxy statement, proxy material, notice of
a call or conversion or similar communication received by it
as custodian
of the Property. PNC Bank shall be under no other obligation
to inform the Fund as to
such actions or events.
(m) Collections. All collections of monies or other
property, in respect, or which are to become part of the
Property (but not the safekeeping
thereof upon receipt by PNC Bank) shall be at the sole risk
of the Fund. If payment is not
received by PNC Bank within a reasonable time after proper
demands have been made,
PNC Bank shall notify the Fund in writing, including copies
of all demand letters, any
written responses, memoranda of all oral responses and
telephonic demands thereto, and
await instructions from the Fund. PNC Bank shall not be
obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PNC Bank shall also
notify the Fund as soon as reasonably practicable whenever
income due on securities is not
collected in due course.
15. Duration and Termination. This Agreement shall
continue
until terminated by the Fund or by PNC Bank on sixty (60)
days' prior written notice to
the other party. In the event this Agreement is terminated
(pending appointment of a
successor to PNC Bank or vote of the shareholders of the
Fund to dissolve or to function
without a custodian of its cash, securities or other
property), PNC Bank shall not deliver
cash, securities or other property of the Fund to the Fund.
It may deliver them to a bank
or trust company of PNC Bank's choice, having an aggregate
capital, surplus and
undivided profits, as shown by its last published report, of
not less than twenty million
dollars ($20,000,000), as a custodian for the Fund to be
held under terms similar to those
of this Agreement. PNC Bank shall not be required to make
any such delivery or payment
until full payment shall have been made to PNC Bank of all
of its fees, compensation,
costs and expenses. PNC Bank shall have a security interest
in and shall have a right of
setoff against Property in the Fund's possession as security
for the payment of such fees,
compensation, costs and expenses.
16. Notices. All notices and other communications,
including
Written Instructions, shall be in writing or by confirming
telegram, cable, telex or facsimile sending device. Notice
shall be addressed (a) if to PNC
Bank at PNC Bank's address: Airport Business Center,
International Court 2, 200 Stevens
Drive, Lester, Pennsylvania 19113, marked for the attention
of the Custodian Services
Department (or its successor) (b) if to the Fund, at the
address of the Fund; or (c) if to
neither of the foregoing, at such other address as shall
have been notified to the sender of
any such notice or other communication. If notice is sent
by confirming telegram, cable,
telex or facsimile sending device, it shall be deemed to
have been given immediately. If
notice is sent by first-class mail, it shall be deemed to
have been given five days after it has
been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the
day it is delivered.
17. Amendments. This Agreement, or any term
hereof, may be changed or waived
only by a written amendment, signed by the party against
whom enforcement of such
change or waiver is sought.
18. Delegation. PNC Bank may assign its rights and
delegate
its duties hereunder to any wholly-owned direct or indirect
subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i)
PNC Bank gives the Fund
thirty (30) days prior written notice; (ii) the delegate
agrees with PNC Bank to comply
with all relevant provisions of the 1940 Act; and (iii) PNC
Bank and such delegate
promptly provide such information as the Fund may request,
and respond to such
questions as the Fund may ask, relative to the assignment,
including (without limitation)
the capabilities of the delegate.
19. Counterparts. This Agreement may be executed
in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall
constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are
necessary to effectuate the
purposes hereof.
21. Miscellaneous. This Agreement embodies the entire
agreement and
understanding between the parties and supersedes all prior
agreements and understandings
relating to the subject matter hereof, provided that the
parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties and/or Oral
Instructions. The captions in this Agreement are included
for convenience of reference
only and in no way define or delimit any of the provisions
hereof or otherwise affect their
construction or effect.
This Agreement shall be deemed to be a contract made in
Pennsylvania and
governed by Pennsylvania law, without regard to principles
of conflicts of law. If any
provision of this Agreement shall be held or made invalid by
a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby. This
Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be
executed by their officers designated below on the day and
year first above written.
PNC BANK, NATIONAL ASSOCIATION By:
Title:
SMITH BARNEY FUNDAMENTAL
VALUE FUND INC.
By:
Title:
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
EXHIBIT (9)(c)
May 1, 1995
Smith Barney Fundamental Value Fund Inc.
388 Greenwich Street
New York, NY 10013
Gentlemen:
This letter acknowledges the consent of The Shareholder Services
Group Inc. ("TSSG") to the assignment of the Transfer Agency and Registrar
Agreement dated September 14, 1993 between TSSG and Smith Barney
Fundamental Value Fund Inc., a Washington corporation (the "Fund"), as
amended (the "Agreement") to Smith Barney Fundamental Value Fund, a
Maryland corporation (the "Maryland Corp."). This acknowledgment will be
effective upon the consummation of the proposed reorganization of the Fund
in the State of Maryland (the "Proposed Transaction"). We understand that,
effective upon the completion of the Proposed Transaction, the Maryland
Corp. will assume all of the Fund's rights and obligations under the
Agreement accruing after that date and that the Fund will no longer be
liable under the Agreement or responsible for any acts or omissions of the
Maryland Corp. occurring after that time.
Sincerely,
The Shareholder Services Group Inc.
By:____________________________
Michael McCarthy
Senior Vice President
General Manager
EXHIBIT (9)(d)
ADMINISTRATION AGREEMENT
May 1, 1995
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Smith Barney Fundamental Value Fund (the "Fund"), a corporation
organized under the laws of the State of Maryland, confirms its agreement
with Smith Barney Mutual Funds Management, Inc. ("SBMFM") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Articles of Incorporation dated May 13, 1994
as amended from time to time (the "Articles"), in its Prospectus and
Statement of Additional Information as from time to time in effect and in
such manner and to such extent as may from time to time be approved by the
Board of Directors of the Fund (the "Board"). Copies of the Fund's
Prospectus, Statement of Additional Information and Articles have been or
will be submitted to SBMFM. Davis Skaggs Investment Management, a division
of SBMFM (the "Adviser") serves as the Fund's investment adviser; and the
Fund desires to employ and hereby appoints SBMFM to act as its
administrator. SBMFM accepts this appointment and agrees to furnish the
services to the Fund for the compensation set forth below. SBMFM is hereby
authorized to retain third parties and is hereby authorized to delegate
some or all of its duties and obligations hereunder to such persons
provided that such persons shall remain under the general supervision of
SBMFM.
2. Services as Administrator
Subject to the supervision and direction of the Board, SBMFM
will: (a) oversee all aspects of the Fund's operations except those
performed by the Adviser under the investment advisory agreement; (b)
supply the Fund with office facilities (which may be SBMFM's own offices),
statistical and research data, data processing services, clerical,
accounting and bookkeeping services, including, but not limited to, the
calculation of (i) the net asset value of shares of the Fund, (ii)
applicable contingent deferred sales charges and similar fees and charges
and (iii) distribution fees, internal auditing and legal services, internal
executive and administrative services, and stationary and office supplies;
and (c) prepare reports to shareholders of the Fund, tax returns and
reports to and filings with the Securities and Exchange Commission (the
"SEC") and state blue sky authorities.
3. Compensation
In consideration of services rendered pursuant to this
Agreement, the Fund will pay SBMFM on the first business day of each month
a fee for the previous month at an annual rate of .20 of 1.00% of the
Fund's average daily net assets. The fee for the period from the date the
Fund's initial registration statement is declared effective by the SEC to
the end of the month during which the initial registration statement is
declared effective shall be prorated according to the proportion that such
period bears to the full monthly period. Upon any termination of this
Agreement before the end of any month, the fee for such part of a month
shall be prorated according to the proportion which such period bears to
the full monthly period and shall be payable upon the date of termination
of this Agreement. For the purpose of determining fees payable to SBMFM,
the value of the Fund's net assets shall be computed at the times and in
the manner specified in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect.
4. Expenses
SBMFM will bear all expenses in connection with the performance
of its services under this Agreement. The Fund will bear certain other
expenses to be incurred in its operation, including: taxes, interest,
brokerage fees and commissions, if any; fees of the members of the Board of
the Fund who are not officers, directors or employees of Smith Barney Inc.
or its affiliates or any person who is an affiliate of any person to whom
duties may be delegated hereunder; SEC fees and state blue sky
qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Fund's and Board members' proportionate share of
insurance premiums, professional association dues and/or assessments;
outside auditing and legal expenses; costs of maintaining the Fund's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the officers or Board and any
extraordinary expenses. In addition, the Fund will pay all distribution
fees pursuant to a Distribution Plan adopted under Rule 12b-1 of the
Investment Company Act of 1940, as amended (the "1940 Act").
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund
(including fees pursuant to this Agreement and the Fund's investment
advisory agreement (s), but excluding distribution fees, interest, taxes,
brokerage and, if permitted by state securities commissions, extraordinary
expenses) exceed the expense limitations of any state having jurisdiction
over the Fund, SBMFM will reimburse the Fund for that excess expense to the
extent required by state law in the same proportion as its respective fees
bear to the combined fees for investment advice and administration. The
expense reimbursement obligation of SBMFM will be limited to the amount of
its fees hereunder. Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
6. Standard of Care
SBMFM shall exercise its best judgment in rendering the
services listed in paragraph 2 above, and SBMFM shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect SBMFM
against liability to the Fund or to its shareholders to which SBMFM would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of
SBMFM's reckless disregard of its obligations and duties under this
Agreement.
7. Term of Agreement
This Agreement shall continue automatically for successive
annual periods, provided such continuance is specifically approved at least
annually by the Board.
8. Service to Other Companies or Accounts
The Fund understands that SBMFM now acts, will continue to act
and may act in the future as administrator to one or more other investment
companies, and the Fund has no objection to SBMFM so acting. In addition,
the Fund understands that the persons employed by SBMFM or its affiliates
to assist in the performance of its duties hereunder will not devote their
full time to such service and nothing contained herein shall be deemed to
limit or restrict the right of SBMFM or its affiliates to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
9. Indemnification
The Fund agrees to indemnify SBMFM and its officers, directors,
employees, affiliates, controlling persons, agents (including persons to
whom responsibilities are delegated hereunder) ("indemnitees") against any
loss, claim, expense or cost of any kind (including reasonable attorney's
fees) resulting or arising in connection with this Agreement or from the
performance or failure to perform any act hereunder, provided that no such
indemnification shall be available if the indemnitee violated the standard
of care in paragraph 6 above. This indemnification shall be limited by the
1940 Act, and relevant state law. Each indemnitee shall be entitled to
advancement of its expenses in accordance with the requirements of the 1940
Act and the rules, regulations and interpretations thereof as in effect
from time to time.
10. Limitation of Liability
The Fund and SBMFM agree that the obligations of the Fund under
this Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only upon the
assets and property of the Fund, as provided in the Articles and Bylaws.
The execution and delivery of this Agreement has been duly authorized by
the Fund and SBMFM, and signed by an authorized officer of each, acting as
such. Neither the authorization by the Board members of the Fund, nor the
execution and delivery by the officer of the Fund shall be deemed to have
been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Fund as
provided in the Articles and Bylaws.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by singing and returning to us the enclosed
copy hereof.
Very truly yours,
Smith Barney Fundamental
Value Fund Inc.
By: ________________________
Heath B. McLendon
Title: Chairman of the Board
Accepted:
Smith Barney Mutual Funds Management Inc.
By: ____________________
Christina Sydor
Title: Secretary
EXHIBIT (10)
<PAGE>1
[LETTERHEAD OF WILLKIE FARR & GALLAGHER]
May 25, 1995
Smith Barney
Fundamental Value Fund Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
We have acted as counsel to Smith Barney Fundamental Value Fund
Inc., a Maryland corporation (the "Fund"), in connection with the transfer of
all of the assets of Smith Barney Fundamental Value Fund Inc., a Washington
corporation (the "Company"), to the Fund and the assumption by the Fund of
all
of the liabilities and obligations of the Company, and the issuance of shares
of the Fund's Class A Common Shares, Class B Common Shares and Class C Common
Shares, each $.001 par value per share (the "Shares"), pursuant to the
Agreement and Plan of Reorganization and Liquidation dated as of May 20, 1994
(the "Agreement") between the Fund and the Company. The Company will
reincorporate in Maryland pursuant to the Agreement and the Fund will be the
successor issuer of the Company pursuant to Rule 414 of the Securities Act of
1933, as amended.
We have examined the Fund's Charter and Bylaws, Post-Effective
Amendment No. 27 to the Company's Registration Statement on Form N-1A
(Securities Act File No. 2-71469 and Investment Company Act File No.
811-3158)
substantially in the form in which it is to become effective (the
"Registration Statement") and the Agreement.
We have also examined and relied upon such corporate records of the
Fund and other documents and certificates with respect to factual matters as
we have deemed necessary to render the opinion expressed herein.
<PAGE>2
We have assumed, without independent verification, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with originals of all documents submitted to us as copies. As
to matters of Maryland law, we have relied solely on the opinion of Venable,
Baetjer and Howard, LLP with respect to the matters addressed therein, which
is satisfactory to us in form and scope, a copy of which is annexed hereto.
Based on such examination, we are of the opinion and so advise you
that:
1. The Fund is validly existing as a corporation in good standing
under the laws of the State of Maryland.
2. Assuming the number of Shares of Common Stock of each of the classes
to be issued by the Fund and distributed to stockholders of the
Company pursuant to the Agreement does not exceed the number of
authorized and unissued shares of the respective classes of the Fund
on the issuance date, the Shares to be issued in accordance with the
terms of the Agreement, when so issued, will constitute validly and
legally issued shares, fully paid and nonassessable, under the laws
of the State of Maryland.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
This opinion is furnished by us as counsel to the Fund, is solely
for the benefit of the Fund and its governing board in connection with the
above described transfer of assets and may not be relied upon for any other
purpose or by any other person.
Very truly yours,
WILLKIE FARR & GALLAGHER
86160160
<PAGE>1
[LETTERHEAD OF VENABLE, BAETJER AND HOWARD, LLP]
May 25, 1995
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Re: Smith Barney Fundamental Value Fund Inc.
Ladies and Gentlemen:
We have acted as special Maryland counsel to Smith Barney
Fundamental Value Fund Inc., a Maryland corporation (the "Fund"), in
connection with the transfer of all of the assets of Smith Barney Fundamental
Value Fund Inc., a Washington corporation (the "Company"), to the Fund and the
assumption by the Fund of all of the liabilities and obligations of the
Company, and the issuance of shares of the Fund's Class A Common Shares, Class
B Common Shares and Class C Common Shares, each $.001 par value per share (the
"Shares"), pursuant to the Agreement and Plan of Reorganization and
Liquidation dated as of May 20, 1994 (the "Agreement") between the Fund and
the Company. The Company will reincorporate in Maryland pursuant to the
Agreement and the Fund will be the successor issuer of the Company pursuant to
Rule 414 of the Securities Act of 1933, as amended.
We have examined the Fund's Charter and Bylaws, Post-Effective
Amendment No. 27 to the Company's Registration Statement on Form N-1A
(Securities Act File No. 2-71469 and Investment Company Act File No. 811-3158)
substantially in the form in which it is to become effective (the
"Registration Statement") and the Agreement. We have further examined and
relied upon a certificate of the Maryland State Department of Assessments and
Taxation to the effect that the Fund is duly incorporated and existing under
the laws of the State of Maryland and is in
<PAGE>2
good standing and duly authorized to transact business in the State of
Maryland.
We have also examined and relied upon such corporate records of the
Fund and other documents and certificates with respect to factual matters as
we have deemed necessary to render the opinion expressed herein. We have
assumed, without independent verification, the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion and so advise you
that:
1. The Fund is validly existing as a corporation in good standing
under the laws of the State of Maryland.
2. Assuming the number of Shares of Common Stock of each of the classes
to be issued by the Fund and distributed to stockholders of the
Company pursuant to the Agreement does not exceed the number of
authorized and unissued shares of the respective classes of the Fund
on the issuance date, the Shares to be issued in accordance with the
terms of the Agreement, when so issued, will constitute validly and
legally issued shares, fully paid and nonassessable, under the laws
of the State of Maryland.
This letter expresses our opinion as to the Maryland General
Corporation Law governing matters such as the authorization and issuance of
stock. It does not extend to the securities or "Blue Sky" laws of Maryland,
to federal securities laws or to other laws.
You may rely upon our foregoing opinion in rendering your opinion to
the Fund. We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
VENABLE, BAETJER AND HOWARD, LLP
EXHIBIT (11)
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 27 to the Registration Statement No. 2-71469 of
Smith Barney Fundamental Value Fund Inc. of our report dated October
28, 1994, appearing in the annual report to shareholders for the year
ended September 30, 1994, and to the reference to us under the heading
"Financial Highlights" in the Prospectus, which is incorporated by
reference in such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 25, 1995
EXHIBIT (15)
SERVICES AND DISTRIBUTION PLAN
Smith Barney Fundamental Value Fund Inc.
This Services and Distribution Plan (the "Plan") is adopted in
accordance with Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "1940 Act"), by Smith Barney Fundamental Value Fund
Inc., a corporation organized under the laws of the State of Maryland (the
"Fund"), subject to the following terms and conditions:
Section 1. Annual Fee.
(a) Service Fee for Class A shares. The Fund will pay to the
distributor of its shares, Smith Barney Inc., a corporation organized under
the laws of the State of Delaware ("Distributor"), a service fee under the
Plan at the annual rate of 0.25% of the average daily net assets of the
Fund attributable to the Class A shares (the "Class A Service Fee").
(b) Service Fee for Class B shares. The Fund will pay to the
Distributor a service fee under the Plan at the annual rate of 0.25% of the
average daily net assets of the Fund attributable to the Class B shares
(the "Class B Service Fee").
(c) Service Fee for Class C shares. The Fund will pay to the
Distributor a service fee under the Plan at the annual rate of 0.25% of the
average daily net assets of the Fund attributable to the Class C shares
(the "Class C Service Fee," and collectively with the Class A Service Fee
and the Class B Service Fee, the "Service Fees").
(d) Distribution Fee for Class B shares. In addition to the Class B
Service Fee, the Fund will pay the Distributor a distribution fee under the
Plan at the annual rate of 0.75% of the average daily net assets of the
Fund attributable to the Class B shares (the "Class B Distribution Fee").
(e) Distribution Fee for Class C shares. In addition to the Class C
Service Fee, the Fund will pay the Distributor a distribution fee under the
Plan at the annual rate of 0.75% of the average daily net assets of the
Fund attributable to the Class C shares (the "Class C Distribution Fee,"
and collectively with the Class B Distribution Fee, the "Distribution
Fees").
(f) Payment of Fees. The Service Fees and Distribution Fees will be
calculated daily and paid monthly by the Fund with respect to the foregoing
classes of the Fund's shares (each a "Class" and together the "Classes") at
the annual rates indicated above.
Section 2. Expenses Covered by the Plan.
With respect to expenses incurred by each Class, its respective
Service Fees and/or Distribution Fees may be used for: (a) costs of
printing and distributing the Fund's prospectus, statement of additional
information and reports to prospective investors in the Fund; (b) costs
involved in preparing, printing and distributing sales literature
pertaining to the Fund; (c) an allocation of overhead and other branch
office distribution-related expenses of the Distributor; (d) payments made
to, and expenses of, Smith Barney Financial Consultants and other persons
who provide support services in connection with the distribution of the
Fund's shares, including but not limited to, office space and equipment,
telephone facilities, answering routine inquires regarding the Fund,
processing shareholder transactions and providing any other shareholder
services not otherwise provided by the Fund's transfer agent; and (e)
accruals for interest on the amount of the foregoing expenses that exceed
the Distribution Fee and, in the case of Class B shares, the contingent
deferred sales charge received by the Distributor; provided, however, that
the Distribution Fees may be used by the Distributor only to cover expenses
primarily intended to result in the sale of the Fund's Class B and C
shares, including without limitation, payments to Distributor's Financial
Consultants at the time of the sale of Class B and C shares. In addition,
Service Fees are intented to be used by the Distributor primarily to pay
its Financial Consultants for servicing shareholder accounts, including a
continuing fee to each such Financial Consultant, which fee shall begin to
accrue immediately after the sale of such shares.
Section 3. Approval of Shareholders.
The Plan will not take effect, and no fees will be payable in
accordance with Section 1 of the Plan, with respect to a Class until the
Plan has been approved by a vote of at least a majority of the outstanding
voting securities of the Class. The Plan will be deemed to have been
approved with respect to a Class so long as a majority of the outstanding
voting securities of the Class votes for the approval of the Plan,
notwithstanding that: (a) the Plan has not been approved by a majority of
the outstanding voting securities of any other Class, or (b) the Plan has
not been approved by a majority of the outstanding voting securities of the
Fund.
Section 4. Approval of Directors.
Neither the Plan nor any related agreements will take effect until
approved by a majority of both (a) the full Board of Directors of the Fund
and (b) those Directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to it (the "Qualified Directors"), cast
in person at a meeting called for the purpose of voting on the Plan and the
related agreements.
Section 5. Continuance of the Plan.
The Plan will continue in effect with respect to each Class until May
1, 1996, and thereafter for successive twelve-month periods with respect to
each Class; provided, however, that such continuance is specifically
approved at least annually by the Directors of the Fund and by a majority
of the Qualified Directors.
Section 6. Termination.
The Plan may be terminated at any time with respect to a Class (i) by
the Fund without the payment of any penalty, by the vote of a majority of
the outstanding voting securities of such Class or (ii) by a vote of the
Qualified Directors. The Plan may remain in effect with respect to a
particular Class even if the Plan has been terminated in accordance with
this Section 6 with respect to any other Class.
Section 7. Amendments.
The Plan may not be amended with respect to any Class so as to
increase materially the amounts of the fees described in Section 1 above,
unless the amendment is approved by a vote of the holders of at least a
majority of the outstanding voting securities of that Class. No material
amendment to the Plan may be made unless approved by the Fund's Board of
Directors in the manner described in Section 4 above.
Section 8. Selection of Certain Directors.
While the Plan is in effect, the selection and nomination of the
Fund's Qualified Directors will be committed to the discretion of the
Qualified Directors then in office.
Section 9. Written Reports
In each year during which the Plan remains in effect, a person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to the Plan or any related agreement will prepare and furnish to
the Fund's Board of Directors and the Board will review, at least
quarterly, written reports, complying with the requirements of the Rule,
which sets out the amounts expended under the Plan and the purposes for
which those expenditures were made.
Section 10. Preservation of Materials.
The Fund will preserve copies of the Plan, any agreement relating to
the Plan and any report made pursuant to Section 9 above, for a period of
not less than six years (the first two years in an easily accessible place)
from the date of the Plan, agreement or report.
Section 11. Meanings of Certain Terms.
As used in the Plan, the terms "interested person" and "majority of
the outstanding voting securities" will be deemed to have the same meaning
that those terms have under the 1940 Act by the Securities and Exchange
Commission.
Approved by the Board Directors as of June 28, 1994.
