SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
. . . . . . . . . . .SMITH BARNEY SHEARSON INCOME FUNDS . . . . . . . .
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to
Exchange Act Rule 0-11:1
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1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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SMITH BARNEY SHEARSON GLOBAL BOND FUND,
A SUBTRUST OF SMITH BARNEY SHEARSON INCOME FUNDS
Two World Trade Center
New York, New York 10048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on [March 21,] 1994
To the Shareholders of
Smith Barney Shearson Global Bond Fund:
Notice is hereby given that a Special Meeting of Shareholders of
Smith Barney Shearson Global Bond Fund (the "Fund"), a mutual fund
organized as a subtrust of Smith Barney Shearson Income Funds (the
"Trust"), will be held at the offices of the Fund, Two World Trade
Center, 100th floor, New York, New York 10048, at [2:30] p.m., on
[March 21,] 1994, for the following purposes:
1. To approve or disapprove a new investment advisory
agreement between the Trust, on behalf of the Fund, and Smith Barney
Global Capital Management, Inc. ("SBGCM"), 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 Trust has fixed the close of
business on [February ___, 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
February __, 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
i/t/d 12/28/78
Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.
UGMA
John B. Smith, Jr.
(2) John B. Smith
John B. Smith, Jr.,
Executor
SMITH BARNEY SHEARSON GLOBAL BOND FUND,
A SUBTRUST OF SMITH BARNEY SHEARSON INCOME FUNDS
Two World Trade Center
New York, New York 10048
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on [March 21,] 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 Income Funds with respect to
the Smith Barney Shearson Global Bond Fund ("Fund"), for use at
a Special Meeting of Shareholders of the Fund to be held at
[2:30] p.m. on [March 21,] 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 Trust; 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 Trust currently issues three classes of shares in
respect of the Fund, 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 a 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 by Amendment No. 1 dated July 30,
1993 ("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 [February __,
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 [____________] 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.
Name and Address
Amount and (Percentage)
of Shares Beneficially Owned
[TO BE PROVIDED]
As of [___, 1994,] no shares of SBGCM or its parent
corporation, The Travelers Inc., were held by Board members,
except as set forth in the table below.
Name and Address
Amount and (Percentage)
of Shares Beneficially Owned
[TO BE PROVIDED]
In order that your Shares may be represented at the Special
Meeting, you are requested to:
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indicate your instructions on the enclosed
proxy card;
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date and sign the proxy card;
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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 1:30 p.m., [March
21], 1994.
As a business trust formed under the laws of the
Commonwealth of Massachusetts, the Trust 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 GLOBAL CAPITAL MANAGEMENT, INC. AND THE TRUST, ON
BEHALF OF 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 Trust have
determined, subject to approval by the shareholders of the Fund,
to enter into a new investment advisory agreement (the "New
Agreement") between the Fund and SBGCM, a subsidiary of Smith
Barney Shearson. 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 Trust. The New Agreement contains substantially the same
terms and conditions, including the same advisory fee, found in
the Current Agreement. If approved by shareholders of the Fund,
the New Agreement would commence on [March 21,] 1994 and would
continue initially for a two year period and would continue
automatically for successive annual periods thereafter; provided
such continuance is approved at least annually by (i) a majority
of the Board who are not interested persons of the Trust (as the
term is used in the Investment Company Act of 1940, as amended
(the "1940 Act")) and (ii) 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 PROPOSED ADVISER
As of April 29, 1988, SBGCM commenced managing portfolios
of clients in the international securities markets, particularly
in the fixed income area. Prior to April 29, 1988,
international bond portfolio management services were conducted
through Smith Barney, Harris Upham International, Inc., a London
based brokerage affiliate. In particular, SBGCM offers three
broad types of international bond portfolio management: global;
non-base currency (e.g., non-dollar, non-Franc, etc.); and
international dollar (i.e., Eurodollar and "Yankee") bonds.
As of June 17, 1991, pursuant to sub-investment advisory
agreement with Smith, Barney Advisers, Inc., SBGCM commenced
managing a portfolio of Smith Barney World Funds, Inc., an open-
end management investment company registered under the 1940 Act
which had aggregate assets as of [March 30, 1993] in excess of
[$426,790,000.] Under this sub-investment advisory agreement,
SBGCM provides portfolio advice and assistance with respect to
the selection, acquisition, holding and disposal of securities.
Pursuant to the agreement, SBGCM receives an annual sub-
investment advisory fee of: .45% of the fund's net assets up to
$20 million; .40% of the next $10 million; 30% of the next $20
million; and .20% of the fund's net assets in excess of $50
million.
An audited balance sheet of SBGCM as of [December 31,
1992] is set forth as Exhibit A to this Proxy Statement. In
addition, an unaudited balance sheet of SBGCM as of [December
31, 1993,] is set forth as Exhibit B to this Proxy Statement.
SBGCM has represented that since [December 31, 1992], there has
been no material adverse change in its financial condition.
The name, position with SBGCM and principal occupation of
each executive officer and director of SBGCM are set forth in
the following table. The business address of SBGCM and each
officer and director is 10 Piccadilly, London, United Kingdom.
Name Position with SBGCM Principal Occupation
Jill B. Jordan Director Director,
SBGCM
Bruce D. Sargent President; Chairman and Director
Director and Executive
Vice President of Smith Barney
J. Paul Horne Director Director,
SBGCM;
International Economist,
Smith Barney
Gabriel J. Irwin Director; Senior Vice President;
Director, Senior Vice
Compliance Director President,
Compliance
Director, SBGCM
Robert Druskin Director
Jeffrey B. Lane Director
A. George Saks Director; Secretary Executive Vice
President, Secretary and General Counsel,
Smith Barney
J. Simon Wells Director; Senior Vice President
Director and Senior Vice
President, SBGCM
EVALUATION BY THE BOARD AND REASONS FOR THE PROPOSAL
On January 20, 1994, the Trustees of the Trust met in
person at a meeting called for the purpose of considering, among
other things, the New Agreement with SBGCM. They also
considered, at that time, continuation of the Fund's Current
Agreement with LBGAM and various other possible alternatives.
In advance of the meeting, the Board reviewed materials
furnished by Smith Barney Shearson and SBGCM as well as by
LBGAM. Additional materials were presented at the meeting and
were described in detail and reviewed carefully by the Board.
The written material described each of SBGCM and LBGAM and their
affiliates, senior personnel, portfolio managers, analysts,
economists and others, methods of operation, investment
philosophies, performance records and financial conditions.
Representatives of LBGAM and SBGCM 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 the past investment performance of SBGCM in
managing portfolios of global bonds with objectives and policies
similar to those of the Fund. The Board was informed that LBGAM
would waive 50% of its advisory fee under the Current Agreement
for a period of two years and that SBGCM would waive 50% of the
advisory fee provided in the New Agreement (which is identical
to the fee provided in the Current Agreement). The Board was
also advised that SBGCM would continue this fee waiver until
such time as the Board and SBGCM mutually agree otherwise.
The Board of Trustees of the Trust determined to terminate
the Fund's agreement with LBGAM and to enter into the New
Agreement with SBGCM, subject to the approval of shareholders.
In so doing, a variety or factors were evaluated. It was
asserted that management of the Fund could be enhanced by a
close relationship between the Fund's officers and its
investment adviser. Mr. Heath B. McLendon is the Fund's Chief
Executive Officer, and, although he previously worked closely
with LBGAM, he now has a close association with SBGCM 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 series of
mutual funds that are being offered, and will continue to be
offered, to retail and other investors through its own
distribution network, and that 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 SBGCM 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. The Board was satisfied that both LBGAM
and SBGCM could provide high quality advisory and management
services to the Fund.
The Board recognized that, currently, most Shares of the
Fund are 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 SBGCM, if
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 SBGCM 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 Trust who were not interested
persons of the Trust approved, subject to shareholder approval,
the New Agreement with SBGCM 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.
THE PROPOSED AGREEMENT
A copy of the form of New Agreement is set forth as
Appendix A to this Proxy Statement. Under its terms, SBGCM,
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, SBGCM 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. SBGCM would receive a fee that is computed daily and paid
monthly at the annual rate of .60% of the value of the Fund's
average daily net assets. However, SBGCM has agreed to waive
50% of its investment advisory fees until such time as the Board
and SBGCM mutually agree otherwise. 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 with LBGAM are virtually identical.
Under the terms of the New Agreement, SBGCM would bear all
expenses in connection with its performance. Other expenses
incurred in the operation of a Fund would 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 agreement) 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, SBGCM 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, SBGCM 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: (1) 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 (2) more than 50% of the outstanding voting
securities of the Fund.
If the New Agreement is not approved by the shareholders
of the Fund, SBGCM 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 SBGCM 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 for the Special Meeting
will not be voted for approval of the New Agreement, or any
other matter to be voted on by shareholders unless: (a) (i) in
the judgment of the Board there has been no material adverse
change in the financial condition of SBGCM 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, the President or a Senior Vice President of SBGCM,
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 SBGCM 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 SBGCM 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.
February __, 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.
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
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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 Prospectus/Proxy Statement for a discussion of the
Proposal.
1. To approve or disapprove a new investment advisory
FOR * AGAINST * ABSTAIN *
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
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
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SMITH BARNEY SHEARSON GLOBAL BOND FUND PROXY SOLICITED BY
THE BOARD OF TRUSTEES
The undersigned holder of shares of Smith Barney Shearson Global
Bond Fund ("the Fund"), a series of Smith Barney Shearson Income
Funds, 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 [March 21,] 1994 at [2:00] p.m. and any adjournment or
adjournments thereof. The undersigned hereby acknowledges
receipt for the Notice of Special Meeting and Proxy Statement
dated [February __, 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 property 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 and 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)
APPENDIX A
ADVISORY AGREEMENT
SMITH BARNEY SHEARSON INCOME FUNDS
(Smith Barney Shearson Global Bond Fund)
[March 21, 1994]
Smith Barney Global Capital Management, Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Smith Barney Shearson Income Funds (the "Fund"), a trust organized
under the laws of the Commonwealth of Massachusetts, confirms its
agreement between Smith Barney Shearson Global Bond Fund and Smith
Barney Global Capital Management, Inc. (the "Adviser"), as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital, relating to its Smith
Barney Shearson Global Bond Fund, 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 .60 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
INCOME FUNDS
By:___________________________________
Name:
Title:
Accepted:
SMITH BARNEY GLOBAL CAPITAL MANAGEMENT, INC.
By:__________________________________
Name:
Title:
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