SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [XXX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ XXX] 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 EQUITY FUNDS
(Name of Registrant as Specified In Its Charter)
ROBERT VEGLIANTE
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[XXX ] No Fee Required
[ ] 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
SMITH BARNEY EQUITY FUNDS
388 Greenwich Street, New York, New York 10013
______________________
NOTICE OF MEETING OF SHAREHOLDERS OF
SMITH BARNEY STRATEGIC INVESTORS FUND
To Be Held On February 14, 1997
______________________
To the Shareholders:
A meeting of Shareholders of the Smith Barney Strategic Investors Fund
(the "Fund"), a series of Smith Barney Equity Funds (the "Trust") will be held
on February 14, 1997 at 3:00 p.m. at 388 Greenwich Street, New York, New York,
22nd Floor, for the following purposes:
(1) To approve or disapprove changes to certain investment policies of
the Fund; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on December 23, 1996
will be entitled to vote at the meeting.
Please mark, date and sign the enclosed proxy and return it in the
prepaid envelope enclosed for your convenience to insure that your shares are
represented. The prompt return of your proxy will save the expense of further
mailings. If you attend the meeting you can revoke your proxy and vote your
shares in person if you wish.
By Order of the Trustees
Christina T. Sydor
Secretary
New York, New York
December [ ], 1996
_____________________
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE
URGED TO MARK, DATE, SIGN AND RETURN THE PROXY IN THE ENCLOSED PREPAID
ENVELOPE.
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 a name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing the
proxy 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
Custodian 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
PROXY STATEMENT
SMITH BARNEY EQUITY FUNDS on behalf of
Smith Barney Strategic Investors Fund
388 Greenwich Street
New York, New York 10013
(800) 224-7523
SPECIAL MEETING OF SHAREHOLDERS
February 14, 1997
This proxy statement is furnished in connection with the solicitation by
the Board of Trustees (the "Trustees") of Smith Barney Equity Funds (the
"Trust") on behalf of its series, Smith Barney Strategic Investors Fund (the
"Fund") of proxies to be voted at a Special Meeting of shareholders, and all
adjournments thereof (the "Meeting") of the Fund, to be held at the offices of
the Trust, 388 Greenwich Street, New York, New York 10013 on the 22nd Floor,
Friday, February 14, 1997, at 3:00 p.m. The approximate mailing date of this
proxy statement and accompanying form of proxy is December [ ], 1996.
The primary purpose of the Meeting is to permit the Fund's shareholders
to consider changes to certain investment policies of the Fund, as further
discussed in this proxy statement. While the policies under consideration
here are not ones for which the Investment Company Act of 1940, as amended,
(the "1940 Act") would require shareholder approval if proposed to be changed,
the Trustees believe that the proposal involves modifications of sufficient
interest and importance to shareholders that they have determined to seek
approval by shareholders prior to implementation of the proposal. The
Trustees have fixed the close of business on December 23, 1996, as the record
date (the "Record Date") for the determination of holders of shares of the
Fund entitled to vote at the Meeting (the "Shares"). Shareholders of the Fund
(the "Shareholders") on the Record Date will be entitled to one vote per share
with respect to each proposal submitted to the Shareholders of the Fund, with
no Share having cumulative voting rights.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT (AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT)
TO A SHAREHOLDER OF THE FUND UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO THE TRUST BY CALLING (800) 224-7523 OR BY WRITING TO THE TRUST AT
388 GREENWICH STREET, NEW YORK, NEW YORK 10013.
There are no persons who, to the knowledge of the Trust, owned
beneficially more than 5% of the Fund's outstanding Shares as of the Record
Date. As of the Record Date, the officers and Trustees of the Trust
beneficially owned less than 1% of the outstanding Shares of the Fund.
Voting
With respect to Proposal 1, the proposed changes to the Fund's
investment policies will be implemented if they receive a "vote of a majority
of the outstanding voting securities", which is defined under the 1940 Act as
the lesser of (i) 67% or more of the voting securities of the Fund entitled to
vote thereon present in person or by proxy at the Meeting, if the holders of
more than 50% of the outstanding voting securities entitled to vote thereon
are present in person or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund entitled to vote thereon. If an
insufficient number of votes are received approving the proposal, the Fund's
current investment policies will continue to be applied by management.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE FOR APPROVAL OF THE
CHANGES TO CERTAIN OF THE FUND'S INVESTMENT POLICIES.
All Shares of the Fund affected by a proposal will vote together as a
single class on such proposal. All properly executed proxies received prior
to the Meeting will be voted at the Meeting in accordance with the
instructions marked thereon. Only those who were Shareholders as of the close
of business on the Record Date are considered "shareholders of record" and are
entitled to notice of and to vote at the Meeting. Each Share is entitled to
one vote for the proposal and any fractional share is entitled to a
proportionate fractional vote. On the Record Date the Fund had [
] shares of voting securities.
Proxies received prior to the Meeting on which no vote is indicated will
be voted "for" the proposal. For purposes of determining the presence of a
quorum for transacting business at the Meeting, abstentions and broker "non-
votes" (that is, 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. The Shares represented by a
proxy that represents a broker non-vote or an abstention will have the same
effect as Shares voted "against" the proposal. A majority of the outstanding
Shares entitled to vote on the proposal must be present in person or by proxy
to have a quorum to conduct business at the Meeting.
Shareholders who execute proxies may revoke them at any time before they
are voted by filing with the Trust a written notice of revocation, by
delivering a duly executed proxy bearing a later date or by attending the
Meeting and voting in person.
In the event a quorum in not present at the Meeting or in the event a
quorum is present at the Meeting but sufficient votes to approve the proposal
are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered: the nature of the proposal that is the subject of the Meeting,
the percentage of votes actually cast, the nature of any further solicitation
and the information to be provided to shareholders.
PROPOSAL 1
TO APPROVE CHANGES TO CERTAIN OF
THE FUND'S INVESTMENT POLICIES
Introduction
The investment objective of the Fund is high total return consisting of
capital appreciation and current income. Smith Barney Strategy Advisers Inc.
("Strategy Advisers"), the Fund's investment adviser, seeks to achieve this
objective by investing the Fund's assets in a combination of equity, fixed-
income, money market securities and gold securities. The percentages of the
Fund's assets invested in each of these four types of securities are adjusted
from time to time in order to conform to the asset allocation most recently
determined by Smith Barney's Investment Policy Group (the "IPG"). On December
13, 1996, the Trustees approved changes to the investment policies of the Fund
whereby the Fund would seek to achieve its objective by investing in equity
and fixed-income securities of issuers who demonstrate a positive awareness of
their impact on the society within which they operate. In addition to
instituting this social awareness overlay to the investment process, the Fund
would no longer modify the percentages of its assets invested in various types
of securities in response to determinations made by the IPG, but would instead
maintain, under normal conditions, between 65% and 85% of its assets invested
in equity securities and between 15% and 35% invested in fixed-income
securities. The Trustees determined that adding a social awareness investment
approach and modifying the method of allocating the Fund's assets (which
should result in a greater percentage being invested in equity securities)
will better position the Fund to benefit from current market conditions and
long-term total return opportunities and will permit the Fund to be marketed
to a wider investor population, potentially attracting new assets. The
Trustees unanimously approved these changes and directed that they be
submitted to the shareholders of the Fund for approval at a Meeting of
Shareholders. If approved by the shareholders, these changes would become
effective as soon as practical after the meeting and the name of the Fund
would be changed to the "Concert Social Awareness Fund".
Factors Considered By the Trustees
In approving the proposed changes, the Trustees considered a number of
factors. First, the Trustees considered management's belief that there is a
direct correlation between companies that demonstrate an acute awareness of
their impact on the society within which they operate and companies which
offer an attractive long-term investment potential. Management believes that
addressing social issues in a positive manner translates into sound business
judgment. For example, by ensuring that a product or service does not
negatively impact the environment, a company can avoid costly litigation and
clean-up costs; by maintaining positive standards for the workplace and a
diverse employee population, a company can better ensure access to quality
management talent and improve productivity; or by becoming more involved in
the community, a company's consumer franchise can be enhanced. These are all
factors by which a company can gain a significant competitive advantage over
the long term.
Next, the Trustees considered a presentation by management that
illustrated that over the last few years, the financial markets have reacted
to a secular decline in inflation that provided atypical investment returns
for all asset classes. With the dramatic change in inflation already
accomplished, the future trend line investment returns on various asset
classes should revert to a more traditional pattern and in that environment,
equities should provide better long-term total return opportunities than
fixed-income securities or cash. Management also suggested that increasing
the allocation of the Fund's assets in equities and placing the strategic
allocation among asset classes in the hands of the actual portfolio managers
would enable Strategy Advisers to be more proactive and to react more quickly
to changing market conditions. Management also noted that moving to a target
of 75% equities and 25% fixed-income securities within a +/- 10% range will
not represent a dramatic change from the historic allocation which has
averaged 60% equities, 30% fixed-income and 10% cash. The Fund will continue
to be permitted to invest a portion of its assets in cash or money market
securities, but the Fund would hold cash and money market securities as a
temporary defensive measure, not as a specific allocation class. Management
advised that reducing the amount of the Fund's assets invested in cash and
subsequently allowing more of the Fund's assets to be fully invested should
provide better long term opportunities.
The Trustees were informed that, but for the additional overlay of a
social awareness criteria, the Fund's proven investment disciplines will
remain the same and the Fund will be managed by the same portfolio managers.
The equity portion of the Fund's assets will continue to consist primarily of
common stocks of established companies traded on exchanges or over-the-counter
that represent an opportunity for total return on a long-term basis. Strategy
Advisers will continue to select companies that are believed to be undervalued
based on relevant indicators such as price/earnings ratios, forecast growth,
as well as balance sheet, profitability and risk analysis. Equity investments
will continue to be made without regard to the size of companies and generally
will be made in a broad spectrum of industries. The Fund would continue to
invest primarily in common stocks, preferred stocks, securities convertible
into or exchangeable for common stocks and warrants. In addition, the Fund
would use futures contracts and options on futures contracts in order to hedge
against market and interest rate fluctuations. The fixed-income portion of
the Fund's assets would continue to be composed primarily of investment grade
corporate bonds, debentures and notes, asset-backed securities and US
government securities. Again, as with the selection of equity securities, the
Fund will utilize a social awareness criteria in determining which issuers of
fixed-income securities are eligible for investment.
The Trustees further considered a submission by Strategy Advisers
illustrating its long history of successfully managing assets implementing the
same investment discipline while incorporating social awareness criteria.
Robert Brady, portfolio manager of the Fund responsible for equity investments
has been managing investments utilizing a social awareness criteria for more
than ten years and currently manages $380 million of equity investments
applying such social awareness criteria. Ellen Cammer will continue to manage
the Fund's investments in fixed-income securities based on traditional
investment criteria and, if the proposal is approved, will apply the social
awareness criteria to issuers of fixed-income securities. The Fund will also
invest in direct US government debt obligations since it is management's
experience that these investments satisfy the social awareness criteria and
are acceptable to most social awareness investors.
Additional Information Regarding The Social Awareness Criteria
Strategy Advisers believes that top quality management teams who
successfully balance their companies' business interests with their social
influences can gain a significant competitive advantage over the long term.
The Fund will hold securities issued by companies which, in the opinion of
Strategy Advisers, meet the Fund's investment policies and do not violate the
Fund's social awareness criteria. The primary social emphasis will be to
establish investments in companies that make a positive contribution to
society through their products and services or through the way that they do
business. These include companies known for fostering fair and progressive
relations with their employees, companies taking an active role in promoting
worthwhile causes or known to be good community citizens, companies committed
to upholding human rights in their domestic and international operations and
companies promoting positive alternatives to unsafe, polluting or wasteful
business activities or products. In addition, Strategy Advisers has
identified specific areas of social and financial concern and, thus, will not
purchase securities of any company that Strategy Advisers has reason to
believe is engaged at the time of investment in any of the following:
tobacco production;
manufacture of unsafe products;
engaging in irresponsible advertising or marketing practices;
engaging in activities that cause substantial environmental damage;
production of weapons;
ownership or design of nuclear facilities.
This criteria is based on a belief that a company will benefit from its
social awareness and should enable a company to better position itself in
developing business opportunities while avoiding liabilities that may be
incurred when a product or service is determined to have a negative social
impact. Management beleives that these companies should be better prepared to
respond to external demands and ensure that over the longer term they will be
viable to provide a positive return to both investors and society as a whole.
Strategy Advisers will continue to apply the investment criteria
described above and, in addition, will analyze the company's social impact,
eliminating those securities that fail either test. Strategy Advisers will
use its best efforts and will direct special research sources using both
primary and secondary research to assess a company's social impact and
performance. This analysis will be based on present activities by the company
and will not preclude securities solely because of past activities. Strategy
Advisers will monitor the social progress or deterioration of each company in
which the Fund invests and in the event a company is no longer in compliance
with the Fund's social criteria, the Fund will sell the securities as soon as
is prudent. The social awareness criteria used by the Fund will be monitored
by the Trustees and Strategy Advisers may, upon approval of the Trustees,
modify the criteria used to rate the social performance of an issuer without
shareholder approval.
While the application of the Fund's social awareness criteria may
preclude some securities with strong earnings and growth potential, Strategy
Advisers believes that there are sufficient investment opportunities among
those companies that satisfy the social awareness criteria to meet the Fund's
investment objectives. In fact, as of December 31, 1996, well over 50% of the
1000 largest publicly traded companies met the proposed social criteria.
The Trustees unanimously recommend that you vote "FOR" the proposed
investment policy changes.
SHAREHOLDER PROPOSALS
The Trust is not generally required to hold annual or special
shareholders' meetings. 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 Trust at the address set
forth on the cover of this Proxy Statement. Shareholder proposals for
inclusion in the Trust's proxy statement for any subsequent meeting must be
received by the Trust a reasonable period of time prior to any such meeting.
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 shareholders for the purpose of voting on the removal of any Trustee.
Meetings of shareholders for any other purpose also shall be called by the
Trustees when requested in writing by shareholders holding at least 10% of the
shares of the Fund then outstanding or, if the Trustees shall fail to call or
give notice of any meeting of shareholders for a period of 30 days after such
request, 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 Trustees do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If, however, any
other matters are properly brought before the Meeting, the persons named in
the accompanying proxy card will vote thereon in accordance with their
judgment.
By Order of the Board of Trustees
Christina T. Sydor
Secretary
December [ ], 1996
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY.
7
FORM OF PROXY CARD
SMITH BARNEY STRATEGIC INVESTORS FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS -- FEBRUARY 14, 1997
The undersigned hereby appoints Heath B. McLendon, Christina T. Sydor and
Robert A. Vegliante, and each of them separately, proxies with the power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated below, at the Special Meeting of Shareholders of the Fund indicated
above, a series of Smith Barney Equity Funds, on February 14, 1997 at 3:00
p.m. Eastern time, and at any adjournment thereof, all of the shares of the
Fund which the undersigned would be entitled to vote if personally present. IF
THIS PROXY IS SIGNED AND RETURNED WITH NO CHOICES INDICATED, THE SHARES WILL
BE VOTED FOR PROPOSAL 1.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS ON THIS PROXY CARD. All joint
owners should sign. When signing as
executor, administrator, attorney,
trustee or guardian or as custodian
for a minor, please give full title as
such. If a corporation, please sign in
full corporate name and indicate the
signer's office. If a partner, sign in
the partnership name.
___________________________________
Signature
__________________________________
Signature (if held jointly)
___________________________________
Date
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES. THE TRUSTEES RECOMMEND
VOTING "FOR" THE PROPOSAL. TO VOTE, FILL IN BOX COMPLETELY
For Against Abstain FOR AGAINST ABSTAIN
1. Proposal to approve changes to certain of the Fund's
investment policies. / / / / / /
2. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
