SMITH BARNEY SHEARSON GLOBAL OPPORTUNITIES FUND
Two World Trade Center
New York, New York 10048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April 29, 1994
To the Shareholders of
Smith Barney Shearson Global Opportunities Fund:
Notice is hereby given that a Special Meeting of Shareholders of Smith
Barney Shearson Global Opportunities Fund (the "Fund"), a Massachusetts
business trust, will be held at the offices of the Fund, Two World Trade
Center, 100th floor, New York, New York 10048, at 3:00 p.m., on April 29, 1994
for the following purposes:
1. To approve or disapprove a new investment advisory agreement between the
Fund and Smith, Barney Advisers, Inc. ("SBA"), containing substantially the
same terms and conditions as the Fund's current investment advisory agreement
(Proposal 1).
2. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The Board of Trustees of the Fund has fixed the close of business on
March 16, 1994 as the record date for the determination of shareholders of the
Fund entitled to notice of and to vote at the Special Meeting.
By Order of the Board of Trustees
Francis J. McNamara, III
Secretary
March 18, 1994
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN
THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF THE PROXY CARD ARE SET FORTH ON THE
INSIDE COVER OF THIS NOTICE. IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration.
For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp ABC Corp.
(2) ABC Corp John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.UGMA John B. Smith
(2) Estate of John B. Smith John B. Smith, Jr.,
Executor
SMITH BARNEY SHEARSON GLOBAL OPPORTUNITIES FUND
Two World Trade Center
New York, New York 10048
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April 29, 1994
PROXY STATEMENT
This Proxy Statement is being furnished in
connection with the solicitation of proxies by the
Board of Trustees (the "Board") of Smith Barney
Shearson Global Opportunities Fund, for use at a
Special Meeting of Shareholders of the Fund to be held
at 3:00 p.m. on April 29, 1994, at the offices of the
Fund, Two World Trade Center, 100th floor, New York,
New York 10048, and at any adjournments thereof
(collectively, the "Special Meeting"). A Notice of
Special Meeting of Shareholders and a proxy card
accompany this Proxy Statement. Proxy solicitations
will be made primarily by mail, but proxy
solicitations may also be made by telephone, telegraph
or personal interviews conducted by: officers and
employees of the Fund; Smith Barney Shearson Inc.
("Smith Barney Shearson"), the distributor of the
shares of the Fund; The Shareholder Services Group,
Inc. ("TSSG"), a subsidiary of First Data Corporation,
the transfer agent of the Fund; and/or The Boston
Company Advisors, Inc. ("Boston Advisors"), the
administrator of the Fund. The costs of proxy
solicitation and expenses incurred in connection with
the preparation of this Proxy Statement and its
enclosures will be paid by Smith Barney Shearson.
Smith Barney Shearson will also reimburse brokerage
firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund
shares.
The Fund currently issues four classes of
shares, but for purposes of the matters to be
considered at the Special Meeting, all shares will be
voted as a single class. Each share is entitled to
one vote and any fractional share is entitled to a
fractional vote. If the enclosed proxy is properly
executed and returned in time to be voted at the
Special Meeting, the shares of beneficial interest
("Shares") represented by the proxy will be voted in
accordance with the instructions marked thereon.
Unless instructions to the contrary are marked on the
proxy, it will be voted FOR the matters listed in the
accompanying Notice of Special Meeting of
Shareholders. Any shareholder who has given a proxy
has the right to revoke it at any time prior to its
exercise either by attending the Special Meeting and
voting his or her Shares in person, or by submitting a
letter of revocation or later-dated proxy to the Fund
at the above address prior to the date of the Special
Meeting. For purposes of determining the presence of
a quorum for transacting business at the Special
Meeting, abstentions and broker "non-votes" (i.e.,
proxies from brokers or nominees indicating that such
persons have not received instructions from the
beneficial owner or other persons entitled to vote
Shares on a particular matter with respect to which
the brokers or nominees do not have discretionary
power) will be treated as Shares that are present but
which have not been voted. For this reason,
abstention and broker "non-votes" will have the effect
of a "no" vote for purposes of obtaining the requisite
approval of the proposal.
In the event that a quorum is not present at the
Special Meeting, or in the event that a quorum is
present but sufficient votes to approve any of the
proposals are not received, the persons named as
proxies on the enclosed proxy card may propose one or
more adjournments of the Special Meeting to permit
further solicitation of proxies. In determining
whether to adjourn the Special Meeting, the following
factors may be considered: the nature of the proposal
that is the subject of the Special Meeting, the
percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any
further solicitation and the information to be
provided to shareholders with respect to the reasons
for the solicitation. Any adjournment will require
the affirmative vote of a majority of those Shares
represented at the Special Meeting in person or by
proxy. A shareholder vote may be taken on one or more
of the proposals in this Proxy Statement prior to any
such adjournment if sufficient votes have been
received for approval. Under the Trust's First
Amended and Restated Master Trust Agreement dated
November 5, 1992, as amended (the "Master Trust
Agreement"), a quorum of shareholders is constituted
by the presence in person or by proxy of the holders
of a majority of the outstanding Shares of the Fund
entitled to vote at the Special Meeting.
The Board has fixed the close of business on
March 16, 1994 as the record date (the "Record Date")
for the determination of shareholders of the Fund
entitled to notice of and to vote at the Special
Meeting. At the close of business on the Record Date,
there were 4,308,150.039 Shares of the Fund
outstanding. As of the Record Date, to the knowledge
of the Fund and its Board, no single shareholder or
"group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934), except as set forth
in the table below, beneficially owned more than 5% of
the outstanding Shares of the Fund. As of the Record
Date, the officers and Board members of the Fund
beneficially owned less than 1% of the Shares of the
Fund.
Amount and (Percentage)
Name and Address of Shares Beneficially Owned
Citibank NA Cust Smith Barney 505,894.914 (11.7%)
Shearson 401K Savings Plan
Shearson Account
Attn: Nancy Kronenberg
111 Wall Street FISD/20th Floor
New York, New York 10043
Bost & Co. 499,148.267 (11.5%)
c/o Boston Safe Deposit & Trust
Attn: Mary Nolan
Account Specialist
One Cabot Road
Medford, MA 02155-5160
As of the Record Date, no shares of SBA or its
parent corporation, The Travelers Inc. ("Travelers"),
were held by Board members.
In order that your Shares may be represented at
the Special Meeting, you are requested to:
- - indicate your instructions on the enclosed proxy
card;
- - date and sign the proxy card;
- - mail the proxy card promptly in the enclosed
envelope, which requires no postage if mailed in the
United States; and
- - allow sufficient time for the proxy card to be
received on or before 2:30 p.m., April 29, 1994.
As a business trust formed under the laws of the
Commonwealth of Massachusetts, the Fund is not
required to hold annual shareholder meetings but may
hold special meetings as required or deemed desirable.
As indicated above, the Special Meeting is being
called to consider a new investment advisory contract
for the Fund.
The Board recommends an affirmative vote on
Proposal 1.
PROPOSAL 1
TO APPROVE OR DISAPPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN SMITH, BARNEY ADVISERS,
INC. AND THE FUND, CONTAINING SUBSTANTIALLY THE SAME
TERMS AND CONDITIONS AS THE FUND'S CURRENT INVESTMENT
ADVISORY AGREEMENT.
SUMMARY OF PROPOSAL
For the reasons and based on an extensive
analysis of factors described below, the Trustees of
the Fund have determined, subject to approval by
shareholders, to enter into a new investment advisory
agreement (the "New Agreement") between the Fund and
SBA, a subsidiary of Smith Barney Shearson, which in
turn is a wholly owned subsidiary of Travelers. The
Fund currently is advised by Lehman Brothers Global
Asset Management, Ltd. ("LBGAM") under an agreement
(the "Current Agreement") that will terminate on March
21, 1994, pursuant to notice duly given by the Board
of Trustees of the Fund. The New Agreement contains
substantially the same terms and conditions, including
the same advisory fee, found in the Current Agreement.
The New Agreement will commence on March 21, 1994 and,
if approved by shareholders, will continue initially
for a two-year period and continue automatically for
successive annual periods thereafter; provided such
continuance is approved at least annually by (a) a
majority of the Board who are not interested persons
of the Fund (as the term is used in the Investment
Company Act of 1940, as amended (the "1940 Act")) and
(b) a majority of the full Board of Trustees or a
majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act.
THE CURRENT ADVISER
The Fund is presently advised by LBGAM, an
adviser registered under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"). LBGAM is
located at Two Broadgate, London, EC2M 7HA, United
Kingdom. LBGAM renders investment advice to
institutional clients (including other investment
companies) with total assets under management, as of
December 31, 1993, in excess of $8.1 billion. The
Current Agreement dated May 7, 1984 haslast approved
by shareholders on July 28, 1992. During the fiscal
year ended April 30, 1993 the Fund paid LBGAM $489,017
in investment advisory fees.
THE PROPOSED ADVISER
SBA was established in 1968 and is a part of
Smith Barney Shearson Capital Management, which has
been in the investment advisory business for 48 years.
SBA and its wholly owned subsidiaries render
investment management advice to investment companies
and institutional clients with aggregate assets under
management as of February 28, 1994 in excess of $9.1
billion. The names of the investment companies for
which SBA provides services, the amounts of their net
assets as of December 31, 1993 and the annual rate of
SBA's fees for its services to those companies are set
forth on Exhibit A to the Proxy Statement. An audited
balance sheet of SBA as of December 31, 1992 is set
forth as Exhibit B to this Proxy Statement. In
addition, an unaudited balance sheet of SBA as of
December 31, 1993, is set forth as Exhibit C to this
Proxy Statement. SBA has represented that since
December 31, 1993, there has been no material adverse
change in its financial condition.
The name, position with SBA and principal
occupation of each executive officer and director of
SBA are set forth in the following table. The
business address of SBA and each officer and director
is 1345 Avenue of the Americas, New York, New York
10105.
Name Position with SBA Principal Occupation
Stephen J. Treadway Director; President,
Executive Vice President
Chief Executive Officer and Director of Smith
Barney Shearson
Lewis E. Daidone Director; Senior Vice Managing
Director of
President Smith Barney Shearson
Michael J. Day Treasurer Director and Executive
Vice President of Smith
Barney Shearson
George A. Saks Director Executive Vice
President,
Secretary and General
Counsel of Smith Barney
Shearson
Bruce D. Sargent Director Director and Executive
Vice President of Smith
Barney Shearson
Christina T. Sydor Secretary Managing Director
of
Smith Barney Shearson
EVALUATION BY THE BOARD AND REASONS FOR THE PROPOSAL
On January 20, 1994, the Trustees of the Fund
met in person at a meeting called for the purpose of
considering, among other things, the New Agreement
with SBA. They also considered, at that time,
continuation of the Fund's Current Agreement with
LBGAM and various other possible alternatives. The
Board reviewed materials furnished by Smith Barney
Shearson and SBA and information regarding LBGAM. The
written material described, among other matters, SBA
and LBGAM and their affiliates, senior personnel,
portfolio managers, analysts, economists and others,
their methods of operation, investment philosophies,
performance records and financial conditions.
Representatives of LBGAM and SBA met separately with
the Board to discuss in depth the written materials
and to respond to questions from the Board and its
independent counsel. The Board reviewed and
considered LBGAM's investment performance on behalf of
the Fund and also considered the past investment
performance of SBA in managing portfolios of
international equity securities with objectives and
policies similar to those of the Fund.
The Board of Trustees of the Fund determined to
terminate the agreement with LBGAM and to enter into
the New Agreement, subject to the approval of
shareholders. In so doing, a variety of factors were
evaluated. The Board determined that management of
the Fund could be enhanced by a closer relationship
between the Trust's officers, distributor and its
investment adviser. Mr. Heath B. McLendon is the
Trust's Chief Executive Officer and, although he
previously worked closely with LBGAM, he now has a
close association with SBA and is involved directly in
the management of the Smith Barney Shearson-
distributed mutual funds. It was noted that LBGAM and
its affiliates are currently advising and sponsoring a
series of mutual funds that are being offered, and
will continue to be offered, to retail and other
investors through its own distribution network. The
availability of these LBGAM-advised funds could be
confusing to investors in the Fund and other mutual
funds sponsored by Smith Barney Shearson.
The Board reviewed the past performance records
of LBGAM and SBA over relevant periods of time as well
as the background and experience of the various
officers and managers employed by those companies.
The Board compared their past performance and
evaluated those records against various indices and
industry standards, and found that SBA's performance
with comparable funds had been superior to that of
LBGAM.
The Board recognized that, currently, most
Shares of the Fund are now sold under an arrangement
pursuant to which the Fund's distributor, Smith Barney
Shearson, advances the cost of distribution and seeks
to recover that cost through a combination of
contingent deferred sales charges and distribution
fees paid under a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act. Smith
Barney Shearson informed the Trustees that this method
of distribution, while preferred by investors, was
expensive to the distributor on a current basis and a
distributor would rarely agree to offer its services
under these circumstances to a fund to which it or its
affiliates did not serve as investment adviser. Prior
to July 30, 1993, Shearson Lehman Brothers Inc.,
served as the Fund's distributor and its affiliate,
LBGAM, served as the Fund's investment adviser. As of
that date, however, the retail brokerage and
investment advisory businesses (other than LBGAM) of
Shearson Lehman Brothers Inc. were transferred to
Smith Barney Shearson (known at the time as "Smith
Barney, Harris Upham & Co., Inc.") and Smith Barney
Shearson was selected by the Trustees to serve as the
Fund's distributor. Smith Barney Shearson is not
affiliated with LBGAM.
In addition, the Board considered whether SBA,
when serving as the Fund's investment adviser, could
facilitate the Fund's integration with other
components of the Smith Barney Shearson group of funds
and would enhance the support and services received by
the Fund's shareholders. The Board considered the
ability of Smith Barney Shearson to arrange
opportunities for Smith Barney Shearson Financial
Consultants to meet SBA portfolio mangers in person,
by telephone and otherwise, to become familiar with
the management style, philosophy and investment
outlook of the Fund's investment adviser.
After carefully evaluating the foregoing
materials and factors, and after meeting in executive
session with independent counsel, the Trustees of the
Fund who were not interested persons of the Fund
approved, subject to shareholder approval, the New
Agreement with SBA containing substantially identical
terms and conditions to the Current Agreement. The
Board then reconvened and also approved the New
Agreement and recommended its approval by the Fund's
shareholders.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the
Fund are made by the Fund's investment adviser,
subject to the overall review of the Board. Although
investment decisions for the Fund are made
independently from those of the other accounts managed
by the adviser, investments of the type the Fund may
make also may be made by those other accounts. When
the Fund and one or more other accounts managed by the
adviser are prepared to invest in, or desire to
dispose of, the same security, available investments
or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to
each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the
size of the position obtained or disposed of by the
Fund.
Transactions on U.S. stock exchanges and many
foreign stock exchanges involve the payment of
negotiated brokerage commissions. On exchanges where
commissions are negotiated, the cost of transactions
may vary among different brokers. No stated
commission is generally applicable to securities
traded in U.S. over-the-counter markets, but the
prices of those securities include undisclosed
commissions or mark-ups. The cost of securities
purchased from underwriters includes an underwriting
commission or concession and the prices at which
securities are repurchased from and sold to dealers
include a dealer's mark-up or mark-down.
In selecting brokers or dealers to execute
portfolio transactions on behalf of the Fund, the
adviser seeks the best overall terms available. In
assessing the best overall terms available for any
transaction, the adviser will consider the factors it
deems relevant, including 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 addition, the adviser is authorized, in
selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms
available, to consider the brokerage and research
services (as those terms are defined in Section 28(e)
of the Securities and Exchange Act of 1934) provided
to the Fund and/or other accounts over which the
adviser or its affiliates exercises investment
discretion. The fees under the Fund's investment
advisory agreement are not reduced by reason of the
Fund's or the adviser's receiving brokerage and
research services. Research and investment services
are those which brokerage houses customarily provide
to institutional investors and include statistical and
economic data and research reports on particular
issues and industries. These services are used by the
adviser in connection with all of its investment
activities, and some of the services obtained in
connection with the execution of transactions for the
Fund may be used in managing other investment
accounts. Conversely, brokers furnishing these
services may be selected for the execution of
transactions for these other accounts, whose aggregate
assets may exceed those of the Fund, and the services
furnished by the brokers may be used by the adviser in
providing investment management for the Fund. The
Board of Trustees periodically will review the
commissions paid by the Fund to determine if the
commissions paid over representative periods of time
were reasonable in relation to the benefits inuring to
the Fund. Over-the-counter purchases and sales by the
Fund are transacted directly with principal market
makers except in those cases in which better prices
and executions may be obtained elsewhere.
To the extent consistent with applicable
provisions of the 1940 Act and the rules and
exemptions adopted by the Securities and Exchange
Commission (the "SEC") under the 1940 Act, subject to
the approval of the Board, transactions for the Fund
may be executed through Smith Barney Shearson and
other affiliated broker-dealers if, in the judgment of
the Fund's investment adviser, the use of an
affiliated broker-dealer is likely to result in price
and execution at least as favorable as those of other
qualified broker-dealers. Under rules adopted by the
SEC, Smith Barney Shearson may not directly execute
transactions for the Fund on the floor of any national
securities exchange unless: (a) the Board of Trustees
has expressly authorized Smith Barney Shearson to
effect such transactions; and (b) Smith Barney
Shearson annually advises the Fund of the aggregate
compensation it earned on such transactions.
The Fund will not purchase any security,
including U.S. government securities, during the
existence of any underwriting or selling group
relating to the security of which Smith Barney
Shearson is a member, except to the extent permitted
by the SEC.
During the fiscal year ended April 30, 1993, the
Fund paid $256,577 in brokerage commissions, of which
$17,766 (representing 6.90% of the total of all
brokerage commissions paid) was paid to Smith Barney
Shearson (or its predecessor, Shearson Lehman Brothers
Inc.). Such commissions were paid with respect to
10.50% of the total dollar value of all transactions
involving the payment of brokerage commissions
effected during the year.
THE PROPOSED AGREEMENT
A copy of the form of New Agreement is set forth
as Exhibit D to this Proxy Statement. Under its
terms, SBA, subject to the supervision and approval of
the Board would manage the Fund's investments in
accordance with the investment objectives and policies
stated in the Fund's Prospectus and Statement of
Additional Information. As adviser, SBA would be
responsible for making investment decisions, supplying
investment research and portfolio management services
and placing orders to purchase and sell securities on
behalf of the Fund. SBA would receive a fee that is
computed daily and paid monthly at the annual rate of
.80% of the value of the Fund's average daily net
assets which is identical to the fee provided in the
Current Agreement. With the exception of the identity
of the investment adviser and the commencement and
termination dates, the provisions of the New Agreement
and the Current Agreement are virtually identical.
Under the terms of the New Agreement, SBA will
bear all expenses in connection with its performance.
Other expenses incurred in the operation of the Fund
will continue to be borne by the Fund, including:
taxes, interest, brokerage fees and commissions, if
any; distribution and shareholder service fees; fees
of the Board members who are not officers, directors,
shareholders or employees of Smith Barney Shearson, or
any of its affiliates; SEC fees and state blue sky
qualification fees; charges of custodian and transfer
and dividend disbursing agents; certain insurance
premiums; outside auditing and legal expenses; costs
of investor services (including allocable telephone
and personnel expenses); costs of preparation and
printing of prospectuses and statements of additional
information for regulatory purposes and for
distribution to shareholders; costs of preparation and
printing of shareholders' reports; costs incurred in
connection with meetings of the shareholders of the
Fund and of the officers of the Trust or Board and any
extraordinary expenses.
If in any fiscal year the aggregate expenses of
the Fund (including fees pursuant to the New Agreement
(and the Fund's administration agreements) but
excluding distribution and shareholder service fees,
interest, taxes, brokerage and, if permitted by state
securities commissions, extraordinary expenses) exceed
the expense limitation of any state having
jurisdiction over the Fund, SBA will reduce its
advisory fee to the Fund for the excess expense to the
extent required by state law in the same proportion as
its advisory fee bears to the Fund's aggregate fees
for investment advice and administration. This
expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
The New Agreement provides that in the absence
of willful misfeasance, bad faith, gross negligence or
reckless disregard for its obligations thereunder, SBA
shall not be liable for any act or omission in the
course of or in connection with the rendering of its
services thereunder.
REQUIRED VOTE
Approval of the New Agreement requires the
affirmative vote of a "majority of the outstanding
voting securities" of the Fund. The term "majority of
the outstanding voting securities" of the Fund, as
defined in the 1940 Act, means the affirmative vote of
the lesser of: (a) 67% of the voting securities of the
Fund present at the Special Meeting if more than 50%
of the outstanding Shares are present in person or by
proxy at the Special Meeting; and (b) more than 50% of
the outstanding voting securities of the Fund.
If the New Agreement is not approved by the
shareholders of the Fund, SBA will serve as investment
adviser to the Fund for a period of time pending
approval of such agreement or a different investment
advisory agreement or other definitive action by the
shareholders, provided that the compensation received
by SBA during that period is not greater than the
amount that would have been received under the Fund's
agreement with LBGAM.
Proxies solicited by the Board at the Special
Meeting will not be voted for approval of the New
Agreement, or any other matter to be voted on by the
shareholders unless: (a) (i) in the judgment of the
Board there has been no material adverse change in the
financial condition of SBA between the date of the
uncertified balance sheet and the most recently
completed quarter and (ii) the Fund shall have
received a certificate of the Chairman, President or a
Senior Vice President of SBA, dated the day on which
such vote is to be taken, that, to the knowledge of
that officer, since the date of the most recently
completed quarter there has been no material adverse
change in the financial condition of SBA unless such
material adverse change has been disclosed to
shareholders in additional proxy solicitation
materials; or (b) the Fund shall have mailed to all
shareholders of record a certified balance sheet of
SBA and given the shareholders an opportunity to
revoke any proxies previously furnished.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund is not generally required to hold
annual or special meetings of the shareholders.
Shareholders wishing to submit proposals for inclusion
in a proxy statement for a subsequent shareholders'
meeting should send their written proposals to the
Secretary of the Fund, c/o The Boston Company
Advisors, Inc., Exchange Place, Boston, MA 02109.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Fund's
outstanding voting securities (as defined in the 1940
Act) may require the calling of a meeting of the
Fund's shareholders for the purpose of voting on the
removal of any Board Member. Meetings of the Fund's
shareholders for any other purpose will also be called
by the Board when requested in writing by shareholders
holding at least 10% of the Shares then outstanding
or, if the Board Members shall fail to call or give
notice of any meeting of shareholders for a period of
30 days after such application, shareholders holding
at least 10% of the Shares then outstanding may call
and give notice of such meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other
business at the Special Meeting other than as
described in this Proxy Statement, nor is the Board
aware that any shareholder intends to do so. If,
however, any other matters are properly brought before
the Special Meeting, the persons named in the
accompanying proxy card will vote thereon in
accordance with their judgment.
March 18, 1994
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING
ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN
THE PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE
PAID ENVELOPE.
Exhibit A
Names of Investment Companies Serviced by SBA
Fund
Net Assets as
of
12/31/93
Annual Rate of Fee
Expressed as a
Percentage of Average
Daily Net Assets
Smith Barney Equity
Funds, Inc.
$ 91,460,000
.60% up to $500
million; .
55% of the next
$500 million and
.50% thereafter
Smith Barney Funds,
Inc.:
Income and
Growth
Portfolio
644,887,000
.60% up to $500
million; .55% of the
next $500 million and
.50% thereafter
Capital
Appreciation
Portfolio
175,817,000
.90%
Utility
Portfolio
120,980,000
.60% up to $500
million; .
55% of the next $500
million
and .50% thereafter
Short-Term U.S.
Treasury
Securities
Portfolio
205,758,000
.45%
U.S. Government
Securities
Portfolio
502,334,000
.50% up to $200
million and
.40% thereafter
Monthly Payment
Government
Portfolio
58,108,000
.50% up to $200
million and
.40% thereafter
Income Return
Account
Portfolio
60,279,000
.50% up to $200
million and
.40% thereafter
Smith Barney
Variable Account
Funds:
Income and
Growth Portfolio
30,637,848
.60%
U.S.
Government/High
Quality
Securities
Portfolio
5,449,538
.45%
Reserve Account
Portfolio
2,615,332
.45%
Smith Barney World
Funds, Inc.:
Global
Government Bond
Portfolio
112,758,000
.75%
International
Equity Portfolio
513,914,000
.85%
EXHIBIT B
SMITH, BARNEY ADVISERS, INC.
(a wholly-owned subsidiary of Smith Barney Inc.)
BALANCE SHEET
December 31, 1992
Assets
Liabilities and
Stockholder's
Equity
Cash
$ 100,337
Note Payable
$
560,000
Management
fees
receivable
879,694
Due to
affiliate, net
1,732,445
Furniture,
fixtures
and
equipment,
Deferred tax
liability
9,733,607
net of
accumulated
depreciation
and
amortization
38,232
Stockholder's
equity:
Common
shares
$1 par
value
authorized
and
issued,
100 shares
100
Investment
advisory
contracts,
net of
accumulated
amortization
26,176,635
Additional
paid-in
capital
15,169,035
Other assets
289
Retained
earnings
*
15,169,135
$27,195,187
$27,195,187
Notes:
(1) Organization-Smith, Barney Advisers, Inc.
("SBA"), a registered investment adviser, acts
pursuant to management agreements as investment
manager to the following investment companies: Smith
Barney Equity Funds, Inc. ("SBEF"), Smith Barney
Funds, Inc. ("SBF"), Smith Barney Variable Account
Funds ("SBVAF"), Smith Barney World Funds, Inc.
("SBWF"), Worldwide Securities Limited ("WSL") and
Worldwide Special Fund N.V. ("WSF"). SBA provides
each company with personnel, investment advice, office
space and administrative services at fees based on the
net assets of each fund. Fees from SBVAF, which
commenced operations July 1989, were partially waived
through December 31, 1992.
(2) Related Party Transactions-Smith Barney, Harris
Upham & Co. Incorporated ("SBHU"), another subsidiary
of Smith Barney Inc. ("SBI"), provides SBA with
investment information and recommendations, executive
and administrative services (e.g. accounting, legal,
personnel, facilities, mail and other support
services) and order processing support on a basis
mutually agreed upon. Receivables from or payables to
SBHU are non-interest bearing. Substantially all cash
collected by SBA relating to management fees is
remitted to SBI in the form of intercompany dividends.
(3) Income Taxes- In February 1992, the Financial
Accounting Standards Board issued Statement of
Financial Accounting Standards No. 109, Accounting for
Income Taxes. Statement 109 requires a change from
the deferred method of accounting for income taxes of
APB Opinion 11 to the asset and liability method of
accounting for income taxes. Under the asset and
liability method of Statement 109, deferred tax assets
and liabilities are recognized for the future tax
consequences attributable to differences between the
financial statement carrying amounts of existing
assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are
expected to be recovered or settled.
The Company adopted Statement 109 on January 1, 1992.
The adoption of this Statement resulted in an increase
to the balance of Investment Advisory Contracts and
the establishment of a corresponding Deferred Tax
Liability of $9,733,607.
SBA is included in the consolidated federal, state,
and local tax returns filed by SBI. Income taxes
payable to SBI of approximately $2,303,000 are
included in the net balance of Due to Affiliate at
December 31, 1992.
(4) Investment Advisory Contracts- The balance of
Investment Advisory Contracts represents the
unamortized cost assigned to those contracts in
connection with the acquisition of SBI's parent by
Commercial Credit Group, Inc. in December 1988. The
combined successor firm subsequently changed its name
to Primerica Corporation. In addition, this balance
also includes the cost of the Investment Advisory
Contracts of WSL and WSF which were purchased by SBA
during 1992. The final installment payment of
approximately $500,000 due as a result of this
purchase is payable on December 31, 1996 and is
subject to adjustment contingent upon certain
conditions as set forth in the purchase agreement.
The cost of the Investment Advisory Contracts is being
amortized over thirty years on a straight-line basis.
See Note 3.
(5) Stockholder's Equity- In connection with the
acquisition of SBI by Primerica Corporation on June
19, 1987 and the subsequent acquisition of Primerica
Corporation by Commercial Credit Group, Inc. in
December 1988, SBA was recapitalized and its retained
earnings on both dates were transferred to additional
paid-in capital.
During 1992, the Company paid dividends to SBI which
were in excess of current and accumulated earnings.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Smith, Barney Advisers, Inc.:
We have audited the accompanying balance sheet
of Smith, Barney Advisers, Inc. (a wholly-owned
subsidiary of Smith Banrey Inc.) as of December 31,
1992. This financial statement is the responsibility
of the Company's management. Our responsibility is to
express an opinion on this financial statement based
on our audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
balance sheet is free of material misstatement. An
audit of a balance sheet includes examining, on a test
basis, evidence supporting the amounts and disclosures
in the balance sheet. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audit of the
balance sheet provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to
above presents fairly, in all material respects, the
financial position of Smith, Barney Advisers, Inc . as
of December 31, 1992 in conformity with generally
accepted accounting principles.
As discussed in Note 3 to the balance sheet, the
Company changed its method of accounting for income
taxes in 1992 to adopt the provisions of the Financial
Accounting Standards Board's Statement of Financial
Accounting Standards No. 109, Accounting for Income
Taxes.
KPMG Peat Marwick
New York, New York
March 31, 1993
EXHIBIT C
SMITH, BARNEY ADVISERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
December 31, 1993
(Unaudited)
Assets Liabilities and
Stockholder's Equity
Cash
$
537,335
Note payable
$69,749,90
0
Furniture and
fixtures, net
Payable to
Parent
9,511,098
of accumulated
depreciation
Other
liabilities
662,527
and
amortization
24,547
Investment
advisory
contracts,
Stockholder's
equity:
net of
accumulated
amortization
93,578,582
Common
stock
($1 par
Investment in
non-marketables
1,130,748
value)
10
0
Receivable from
affiliates
2,061,284
Additional
paid-in
capital
16,791,3
89
Other assets
3,470,162
Retained
earnings
4,087,64
4
20,879,133
$100,802,6
58
$100,802,6
58
Notes:
(1) Organization - Smith, Barney Advisers, Inc.
("SBA"), a wholly-owned subsidiary of Smith Barney
Shearson Holdings Inc. ("Parent") (formerly Smith
Barney Holdings, Inc.), is a registered investment
adviser and acts pursuant to management agreements as
investment manager to forty investment company
portfolios. SBA provides each company with personnel,
investment advice, office space and administrative
services at fees based on the net assets of each fund.
The consolidated statement of financial condition
includes the accounts of Smith Barney Shearson
Strategy Advisers Inc. ("SBSSA") (a wholly-owned
subsidiary of SBA) and its wholly-owned subsidiary.
Significant intercompany balances have been eliminated
in consolidation.
(2) Shearson Acquisition - On July 31, 1993, Smith
Barney, Harris Upham & Co. Incorporated ("SBHU"),
together with certain of its affiliates (including
SBA) and The Travelers Inc. (formerly Primerica
Corporation), acquired the domestic retail brokerage
and asset management businesses ("Shearson") of
Shearson Lehman Brothers Holdings Inc. and its
subsidiaries, a subsidiary of American Express
Company. Shearson was combined with the operations of
SBHU and its affiliates, and SBHU was renamed Smith
Barney Shearson Inc. ("SBS"). The asset management
businesses acquired by SBA included SBSSA (and its
wholly-owned subsidiary), as well as the contracts to
manage sixteen of Shearson's investment company
management contracts.
(3) Related Party Transactions - SBS provides SBA
with executive and administrative services (e.g.
accounting, legal, personnel, facilities, mail and
other support services) and order processing support
on a basis mutually agreed upon. Receivable from
affiliates are non-interest bearing. In 1993, SBA
transferred a deferred tax liability, resulting from
the adoption of Statement of Financial Accounting
Standard No. 109 on January 1, 1992, to the Parent
pursuant to a tax sharing agreement. The resulting
Payable to Parent is non-interest bearing.
Substantially all cash collected by SBA relating to
management fees is remitted to the Parent in the form
of intercompany dividends.
(4) Income Taxes - Under an income tax allocation
arrangement with the Parent and The Travelers Inc.,
SBA's Federal, state and local income taxes are
provided on a separate return basis without regard to
timing items, and are subject to the utilization of
tax attributes in The Travelers Inc. consolidated
income tax provision. Under a tax sharing agreement,
SBA remits taxes to the Parent.
(5) Investment Advisory Contracts - Investment
advisory contracts include $68,296,775 of value
ascribed to the acquired Shearson investment company
portfolios purchased by SBA (see note 2). The cost of
these contracts is being amortized over twenty years
on a straight-line basis.
In addition, the balance also incudes the amortized
cost assigned to certain investment advisory contracts
in connection with the acquisition of the Parent by
Commercial Credit Group, Inc. in December 1988. The
combined successor firm subsequently changed its name
to Primerica Corporation (now The Travelers Inc.).
The cost of these contracts is being amortized over
thirty years on a straight-line basis.
(6) Note Payable - At December 31, 1993 note payable
represents a demand note payable to Parent at a rate
of LIBOR plus .75%. The note was issued for the
financing of investment advisory contracts purchased
by SBA on July 31, 1993 (see note 2).
EXHIBIT D
ADVISORY AGREEMENT
SMITH BARNEY SHEARSON GLOBAL OPPORTUNITIES FUND
[March 21, 1994]
Smith, Barney Advisers, Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Smith Barney Shearson Global Opportunities Fund
(the "Fund"), a trust organized under the laws of the
Commonwealth of Massachusetts, confirms its agreement
with Smith, Barney Advisers, Inc. (the "Adviser"), 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 investment objective(s),
policies and limitations specified in its Master Trust
Agreement, as amended from time to time (the "Master
Trust Agreement"), in the prospectus (the
"Prospectus") and the statement of additional
information (the "Statement") filed with the
Securities and Exchange Commission as part of the
Fund'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
Trustees of the Fund (the "Board"). Copies of the
Prospectus, the Statement and the Master Trust
Agreement have been or will be submitted to the
Adviser. The Fund agrees to provide copies of all
amendments to the Prospectus, the Statement and the
Master Trust Agreement to the Adviser on an on-going
basis. The Fund desires to employ and hereby appoints
the Adviser to act as the investment adviser to the
Fund. 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 Fund, the Adviser will:
(a) manage the Fund's holdings in accordance with the
Fund's investment objective(s) and policies as stated
in the Master Trust Agreement, the Prospectus and the
Statement; (b) make investment decisions for the Fund;
(c) place purchase and sale orders for portfolio
transactions for the Fund; and (d) employ professional
portfolio managers and securities analysts who provide
research services to the Fund. In providing those
services, the Adviser will conduct a continual program
of investment, evaluation and, if appropriate, sale
and reinvestment of the Fund's assets.
3. Brokerage
In selecting brokers or dealers to execute
transactions on behalf of the Fund, 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 Fund and/or other accounts over which
the Adviser or its affiliates exercise investment
discretion.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of
developments materially affecting the Fund's holdings,
and will, on its own initiative, furnish the Fund 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 Fund 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 Fund
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 Fund will pay the
Adviser on the first business day of each month a fee
for the previous month at the annual rate of .80 of
1.00% of the Fund'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 Fund'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 Fund 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 Fund's legal existence and shareholder
relations.
8. Reduction of Fee
If in any fiscal year the aggregate expenses of
the Fund (including fees pursuant to this Agreement
and the Fund's administration agreements, but
excluding interest, taxes, brokerage and extraordinary
expenses) exceed the expense limitation of any state
having jurisdiction over the Fund, the Adviser will
reduce its fee to the Fund by the proportion of such
excess expense equal to the proportion that its fee
thereunder bears to the aggregate of fees paid by the
Fund 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 Fund 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 Fund has no objection to
the Adviser's so acting, provided that whenever the
Fund 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 Fund
recognizes that in some cases this procedure may
adversely affect the size of the position obtainable
for the Fund. In addition, the Fund 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
March 21, 1994, (the "Effective Date") and shall
continue for an initial two-year term and shall
continue thereafter so long as such continuance is
specifically approved at least annually by (i) the
Board of the Fund or (ii) a vote of a "majority" (as
that term is defined in the Investment Fund Act of
1940, as amended (the "1940 Act")) of the Fund's
outstanding voting securities, provided that in either
event the continuance is also approved by a majority
of the Board 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 Fund or by vote of
holders of a majority of the Fund'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).
11. Representation by the Fund
The Fund represents that a copy of the Master
Trust Agreement is on file with the Secretary of The
Commonwealth of Massachusetts.
12. Limitation of Liability
The Fund and the Adviser agree that the
obligations of the Fund under this Agreement shall not
be binding upon any of the members of the Board,
shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Fund,
individually, but are binding only upon the assets and
property of the Fund, as provided in the Master Trust
Agreement. The execution and delivery of this
Agreement have been authorized by the Board and a
majority of the holders of the Fund's outstanding
voting securities, and signed by an authorized officer
of the Fund, acting as such, and neither such
authorization by such members of the Board and
shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of
them individually or to impose any liability on any of
them personally, but shall bind only the assets and
property of the Fund as provided in the Master Trust
Agreement.
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 SHEARSON GLOBAL
OPPORTUNITIES FUND
By:_________________________
Name:
Title:
Accepted:
SMITH, BARNEY ADVISERS, INC.
By:__________________________________
Name:
Title:
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Please indicate your vote by an "X" in the appropriate
box below.
This proxy, if properly executed, will be voted in the
manner directed by the undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSAL.
Please refer to the Proxy Statement for a discussion
of the Proposal.
1. To approve a new investment advisory agreement
between FOR * AGAINST *
ABSTAIN *
Smith Barney Shearson Global Opportunies Fund
and Smith, Barney Advisers, Inc. ("SBA"), containing
substantially the same terms and conditions as the
Fund's current investment advisory agreement
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
SMITH BARNEY SHEARSON GLOBAL OPPORTUNITIES FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of Smith Barney
Shearson Global Opportunities Fund ("the Fund"), a
Massachusetts business trust, hereby appoints Heath B.
McLendon, Richard P. Roelofs, Francis J. McNamara, III
and Lee D. Augsburger attorney and proxies for the
undersigned with full powers of substitution and
revocation, to represent the undersigned and to vote
on behalf of the undersigned all shares of the Fund
that the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held
at the offices of the Fund, Two World Trade Center,
New York, New York, on April 29, 1994 at 3:00 p.m. and
any adjournment or adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice
of Special Meeting and Proxy Statement dated March 18,
1994 and hereby instructs said attorney and proxies to
vote said shares as indicated hereon. In their
discretion, the proxies are authorized to vote upon
such other business as may properly come before the
Special Meeting. A majority of the proxies present
and acting at the Special Meeting in person or by
substitute (or, if only one shall be so present, then
that one,) shall have and may exercise all the power
and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE
NOTE: Please sign exactly as your name
appears on this
Proxy. If joint owners, EITHER may sign
this Proxy.
When signing as attorney, executor,
administrator,
trustee, guardian or corporate officer,
please give your
full title.
DATE:
_________________________________________
_______________________________________________
_______________________________________________
Signature(s) (Title(s), if
applicable)
shared\domestic\clients\shearson\funds\sgof\proxy4.doc
shared\domestic\clients\shearson\funds\sgof\proxy4.doc
shared\domestic\client\shearson\funds\sgof\prxycrd.doc
