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:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
ZENIX INCOME FUND INC.
(Name of Registrant as Specified In Its Charter)
Lauren L. Giudice
(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(j)(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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 0-11:1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
ZENIX INCOME FUND INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
-----------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 11, 1994
-----------------------------------------------------
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Zenix
Income Fund Inc. (the "Fund"), will be held at Two World Trade Center, 100th
Floor, New York, New York on August 11, 1994, commencing at 10:00 a.m.
The Annual Meeting is being held for the purposes of:
1. electing six (6) Directors of the Fund (Proposal 1);
2. ratifying the selection of Coopers & Lybrand as the independent
accountants for the Fund for the current fiscal year of the Fund (Proposal 2);
and
3. transacting such other business as may properly come before the Annual
Meeting and any adjournments thereof.
The close of business on May 13, 1994 has been fixed as the record date
for
the determination of shareholders of the Fund entitled to notice of and to
vote
at the Annual Meeting and any adjournments thereof.
By Order of the Directors,
CHRISTINA T. SYDOR
Secretary
June 15, 1994
New York, New York
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS FOR
THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH BELOW. IT IS IMPORTANT THAT
PROXIES BE RETURNED PROMPTLY.
<PAGE>
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.
<TABLE>
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:
<CAPTION>
REGISTRATION VALID SIGNATURE
------------ ---------------
<S> <C>
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
</TABLE>
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 11, 1994
---------------------------------------------
ZENIX INCOME FUND INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
---------------------------------------------
PROXY STATEMENT
INTRODUCTION
This proxy statement is being furnished in connection with the
solicitation
of proxies by the Board of Directors of Zenix Income Fund Inc. (the "Fund")
for
use at the Annual Meeting of Shareholders of the Fund, to be held on August
11,
1994, or any adjournment or adjournments thereof (collectively, the
"Meeting").
The Meeting will be held at Two World Trade Center, 100th Floor, New York, New
York, at 10:00 a.m. This proxy statement and accompanying proxy card are first
being mailed on or about June 15, 1994. Proxy solicitations will be made
primarily by mail, but proxy solicitations also may be made by telephone,
telegraph or personal interviews conducted by officers and employees of the
Fund; the Greenwich Street Advisors Division of Mutual Management Corp. (the
"Adviser"), the adviser for the Fund; The Boston Company Advisors, Inc., the
sub-administrator for the Fund ("Boston Advisors"); and/or The Shareholder
Services Group, Inc. ("TSSG"), a subsidiary of First Data Corporation, the
transfer agent for the Fund. The total costs of proxy solicitation are
expected
to be approximately $6,000, and all costs and expenses incurred in connection
with the preparation of this proxy statement and its enclosures will be paid
by
the Fund. The Fund will also reimburse brokerage firms and others for their
expenses in forwarding solicitation material to the beneficial owners of Fund
shares. The Annual Report of the Fund, including audited financial statements
for the fiscal year ended March 31, 1994, has been or is being furnished to
all
shareholders of the Fund.
If an enclosed proxy is properly executed and returned in time to be
voted
at the Meeting, the shares represented thereby will be voted in accordance
with
the instructions marked thereon. Unless instructions to the contrary are
marked
thereon, a proxy will be voted FOR each of the nominees for director and FOR
the
other matters listed in the accompanying Notice of Annual Meeting of
Shareholders. 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
1
<PAGE>
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. Approval of Proposal 1 requires the affirmative vote of a
majority of the class of shares voted entitled to vote for each nominee, and
approval of Proposal 2 requires the affirmative vote of a majority of the
shares
voted. Because abstentions and broker non-votes are not treated as shares
voted,
abstentions and broker non-votes would have no impact on such Proposals. Any
shareholder who has given a proxy has the right to revoke it at any time prior
to its exercise either by attending the 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 Meeting.
In the event that a quorum is not present at a 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 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 proposals that are the subject of the 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 Meeting in person or by proxy. A shareholder vote may be
taken on any one of the proposals in this proxy statement prior to any
adjournment if sufficient votes have been received for approval. Under the
By-laws of the Fund, as applicable, a quorum is constituted by the presence in
person or by proxy of the holders of a majority of the outstanding shares
entitled to vote on the particular matter at the Meeting.
The Board has fixed the close of business on May 13, 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 Meeting. The Fund has two classes of
capital stock: common stock which has a par value of $.01 per share (the
"Common
Stock"), and cumulative preferred stock, which has a par value of $.01 per
share
(the "Preferred Stock"). At the close of business on the Record Date there
were
13,024,867.786 shares of Common Stock outstanding and 30,000,000 shares of
Preferred Stock outstanding (Common Stock and Preferred Stock together
referred
to as "Shares"). Each shareholder is entitled to one vote for each Share held
and a proportionate fraction of a vote for any fractional Share held.
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 (the "Exchange Act")), except as set forth
below, beneficially owned more than 5% of the outstanding Shares of the Fund.
As
of the Record Date, Cede & Co., a nominee partnership of the Depository
2
<PAGE>
Trust Company, held 11,565 Shares, or 85.785% of the Fund's Shares. Of the
Shares held by Cede & Co., Smith Barney Inc. ("Smith Barney") did not hold of
record any Shares. As of the Record Date, the officers and Board Members of
the
Fund as a group beneficially owned less than 1% of the Shares of the Fund.
In order that a shareholder's Shares may be represented at the Meeting,
shareholders are required to allow sufficient time for their proxies to be
received on or before 10:00 a.m. on August 11, 1994.
<TABLE>
The following table shows certain information about the executive
officers
of the Fund, other than Heath B. McLendon, for whom comparable information is
provided in the discussion of Proposal 1 below. Each officer of the Fund
serves
at the discretion of the Board.
<CAPTION>
AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF
COMMON STOCK
BENEFICIALLY PRINCIPAL
OCCUPATION
OFFICE OWNED* AS OF DURING THE
PAST FIVE
NAME (AGE) AND ADDRESS HELD THE RECORD DATE YEARS
- ---------------------- ------ --------------- --------------
- ------
<S> <C> <C> <C>
Stephen J. Treadway (46) President None Executive Vice
1345 Avenue of the Americas President and
New York, NY 10105 Director of
Smith
Barney;
Director
and President
of
Mutual
Management
Corp., and
Smith,
Barney
Advisers,
Inc.; and
Trustee
of Corporate
Realty Income
Trust I
Richard P. Roelofs (40) Executive None Managing
Director
Two World Trade Center Vice of Smith Barney
New York, NY 10048 President and President
of
Smith Barney
Investment
Strategy
Advisors
Inc.; prior to
July 1993,
Senior
Vice President
of
Shearson Lehman
Brothers Inc.
("Shearson
Lehman
Brothers") and
Vice President
of
Shearson Lehman
Investment
Strategy
Advisors
Inc.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF
COMMON STOCK
BENEFICIALLY PRINCIPAL
OCCUPATION
OFFICE OWNED* AS OF DURING THE
PAST FIVE
NAME (AGE) AND ADDRESS HELD THE RECORD DATE YEARS
- ---------------------- ------ --------------- ------------
- --------
<S> <C> <C> <C>
Lewis E. Daidone (37) Chief None Managing
Director
1345 Avenue of the Americas Financial of Smith
Barney
New York, NY 10105 and and Greenwich
Accounting Street
Advisors;
Officer and Director and
Treasurer Senior Vice
President of
Mutual
Management
Corp. and
Smith
Barney
Advisors;
prior to
January
1990 Senior
Vice
President and
Chief
Financial
Officer of
Cortland
Financial
Group,
Inc.
Christina T. Sydor (43) Secretary None Managing
Director
1345 Avenue of the Americas of Smith
Barney
New York, NY 10105 and Secretary
of
Mutual
Management
Corp. and
Smith
Barney
Advisors
John C. Bianchi (38) Vice None Managing
Director
Two World Trade Center President of Greenwich
New York, New York 10048 and Street
Advisors
Investment and Senior
Vice
Officer President of
Smith Barney;
prior to
July,
1993,
Managing
Director of
Shearson
Lehman
Advisors
<FN>
- ---------------
* For this purpose "beneficial ownership" is defined under Section 13(d) of
the
Exchange Act. The information as to beneficial ownership is based solely
upon
information furnished to the Fund by the officers.
</TABLE>
PROPOSAL 1: TO ELECT SIX (6) DIRECTORS OF THE FUND
The first proposal to be considered at the Meeting is the election of six
(6) Directors of the Fund.
Under the terms of the Fund's Charter, the holders of Preferred Stock are
entitled as a class, to the exclusion of the holders of Common Stock, to elect
two Directors of the Fund. Charles F. Barber and Robert A. Frankel have been
nominated by the Fund's Board of Directors for election by the holders of
Preferred Stock as Preferred Directors ("Preferred Directors"). The Fund's
Charter further provides that the holders of Common Stock are entitled as a
class, to the exclusion of holders of Preferred Stock, to elect two Directors
of
the Fund. Martin Brody and Dwight B. Crane have been nominated by the Fund's
4
<PAGE>
Board of Directors for election by holders of Common Stock as Common Directors
("Common Directors"). The Fund's Charter provides that the remaining nominees,
Heath B. McLendon and Allen J. Bloostein, shall be elected by the holders of
shares of Common Stock and Preferred Stock voting together as a single class
as
Common Directors and Preferred Directors.
Each nominee has consented to serve as a Director if elected at the
Meeting. If a designated nominee declines or otherwise becomes unavailable for
election, however, the proxy confers discretionary power on the persons named
therein to vote in favor of a substitute nominee or nominees.
Section 16(a) of the Exchange Act requires the Fund's officers and
Directors, and persons who beneficially own more than ten percent of a
registered class of the Fund's equity securities, to file reports of ownership
with the Securities and Exchange Commission (the "SEC"), the New York Stock
Exchange and the Fund. Based solely upon its review of the copies of such
forms
received by it and written representations from such persons, the Fund
believes
that, during fiscal year 1993, all filing requirements applicable to such
persons were complied with.
Each Director who is not an "interested person" of the Fund (an
"Independent Board Member") receives a fee of $5,000 per annum plus $500 per
meeting attended, and reimbursement for travel and out-of-pocket expenses. The
aggregate remuneration paid to Directors by the Fund for the fiscal year ended
March 31, 1994 amounted to $27,457 (including reimbursement for travel and
out-of-pocket expenses). The Board of Directors held five meetings during the
fiscal year ended March 31, 1994, four of which were regular meetings.
The Board has an Audit Committee consisting of all Independent Board
Members. The Audit Committee reviews the scope and results of the Fund's
annual
audit with the Fund's independent accountants and recommends the engagement of
accountants. The Audit Committee met twice during the fiscal year ended March
31, 1994. Each incumbent Director attended at least 75% of the meetings of the
Board and committees of which he is a member that were held during the period
they were in office in the last fiscal year.
Each of the nominees for Director of the Fund currently serves as a
Director of the Fund. If elected, each Director will hold office until the
next
Annual Meeting of Shareholders or until his successor shall have been elected
and qualified. Any Director may resign and any Director may be removed at any
meeting of shareholders called for that purpose by a vote of a majority of the
votes entitled to be cast for election of Directors. In case a vacancy shall
exist for any reason, the remaining Directors may fill the vacancy by
appointing
another Director. If at any time less than a majority of the Directors holding
office have been elected by shareholders, the Directors then in office will
call
a shareholder's meeting for the purpose of electing Directors.
5
<PAGE>
<TABLE>
Set forth in the following table are the existing Directors and nominees
for election to the Board of Directors of the Fund, together with certain
other
information:
<CAPTION>
AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF PRINCIPAL
COMMON STOCK OCCUPATION
BENEFICIALLY AND OTHER
BOARD MEMBER OWNED**
DIRECTORSHIPS***
OF FUND AS OF THE DURING THE
NAME (AGE) AND ADDRESS SINCE RECORD DATE PAST FIVE
YEARS
---------------------- ------------ -------------- -------------
- --
<S> <C> <C> <C>
Charles Barber (75) 1989 1,989.24 Consultant; formerly
Chairman of
66 Glenwood Drive (.02%) the Board, ASARCO
Incorporated
Greenwich, CT 06830
Allan J. Bloostein (63) 1992 None Consultant; formerly
Vice
27 West 67th Street, Chairman of the Board
of May
Apt. 5FW Department Stores
Company;
New York, NY 10023 Director of Crystal
Brands,
Inc., Melville Corp.,
R.G. Barry
Corp. and Hechinger
Co.
Martin Brody (71) 1988 72,184.43 Vice Chairman of the
Board of
Three ADP Boulevard (.55%) Directors of
Restaurant
Roseland, NJ 07068 Associates Corp.;
Director of
Jaclyn, Inc., an
apparel
manufacturer
Dwight B. Crane (55) 1988 None Professor, Graduate
School of
Harvard Business School Business
Administration, Harvard
Soldiers Field Road University; Director
of Peer
Boston, MA 02163 Review Analysis, Inc.
Robert A. Frankel (67) 1994 None Consultant; formerly
Corporate
102 Grand Street Vice President of the
Reader's
Croton-on-Hudson, N.Y. Digest.
10520
Heath B. McLendon* (60) 1988 11,876.00 Executive Vice
President of
Two World Trade Center (.09%) Smith Barney;
Chairman of the
New York, NY 10048 Board of Smith Barney
Strategy
Advisers Inc.; prior
to July
1993, Senior
Executive Vice
President of Shearson
Lehman
Brothers and Vice
Chairman of
Shearson Asset
Management;
Director of PanAgora
Asset
Management, Inc. and
PanAgora
Asset Management
Limited,
investment advisory
affiliates
of Shearson Lehman
Brothers
All directors and 86,049.67
officers as a group (.66%)
(11 persons including
the foregoing)
<FN>
- ---------------
* "Interested person" of the Fund, as defined in the Investment Company Act
of
1940 (the "1940 Act"), by virtue of his position as an officer or director
of the Adviser or one of its affiliates.
** For this purpose "beneficial ownership" is defined under Section 13(d) of
the Exchange Act. The information as to beneficial ownership is based
solely
upon information furnished to the Fund by the nominees/directors.
*** Directorships, general partnerships or trusteeships of companies that are
required to report to the SEC, other than open-end registered investment
companies.
</TABLE>
6
<PAGE>
REQUIRED VOTE
Election of the listed nominees for Director will require the affirmative
vote of (a) the holders of a majority of the shares of Preferred Stock
represented in person or by proxy at the Meeting, in the case of the two
Preferred Directors; (b) the holders of a majority of the shares of Common
Stock
represented in person or by proxy at the Meeting, in the case of the two
Common
Directors; (c) the holders of a majority of Shares represented in person or by
proxy at the Meeting voting to gather as a single class, in the case of the
remaining Directors.
THE BOARD OF THE FUND, INCLUDING ALL THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF NOMINEES TO
THE
BOARD.
PROPOSAL 2: TO RATIFY THE SELECTION OF COOPERS & LYBRAND AS THE INDEPENDENT
ACCOUNTANTS FOR THE FUND FOR THE CURRENT FISCAL YEAR
The second proposal to be considered at the Meeting is the ratification
of
the selection of Coopers & Lybrand as the independent public accountants for
the
Fund.
Coopers & Lybrand, One Post Office Square, Boston, Massachusetts 02109,
has
served as independent accountants for the Fund for the fiscal year ended March
31, 1994, and has been selected to serve in this capacity for the Fund's
current
fiscal year by at least a majority of the Independent Board Members. Coopers &
Lybrand has informed the Fund that it has no direct or indirect financial
interest in the Fund, Smith Barney, or any of their affiliates.
Representatives
of Coopers & Lybrand are expected to be present at the Meeting and will be
given
the opportunity to make a statement if they so desire and will respond to
appropriate questions.
REQUIRED VOTE
Ratification of the selection of Coopers & Lybrand as independent
accountants for the Fund requires the affirmative vote of the holders of a
majority of the votes cast at the Meeting in person or by proxy.
THE BOARD OF THE FUND, INCLUDING ALL OF THE INDEPENDENT BOARD
MEMBERS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF COOPERS & LYBRAND.
ADDITIONAL INFORMATION
INVESTMENT ADVISER
The Adviser, located at Two World Trade Center, New York, New York 10048,
has served as the investment adviser to the Fund since July 30, 1993 pursuant
to
an investment advisory agreement dated July 30, 1993 (the
7
<PAGE>
"Advisory Agreement"). The Adviser (through its predecessors) has been in the
investment counseling business since 1934 and is a division of Mutual
Management
Corp. ("MMC") which was incorporated in 1978. The Adviser renders investment
advice to investment companies that had assets under management as of April
30,
1994 in excess of $42.6 billion. MMC is a wholly owned subsidiary of Smith
Barney which in turn is a wholly owned subsidiary of the Travelers Inc.
("Travelers"). The principal executive offices of Smith Barney and Travelers
are
1345 Avenue of the Americas, New York, New York 10105, and 65 East 55th
Street,
New York, New York 10022, respectively.
Prior to July 30, 1993, Shearson Lehman Advisors, a member of the
investment management group of the SLB Asset Management Division of Shearson
Lehman Brothers, served as investment adviser to the Fund. As of the close of
business on July 30, 1993, Travelers (which at the time was known as Primerica
Corporation) and Smith Barney, Harris Upham & Co. Incorporated completed the
acquisition of substantially all of the domestic retail brokerage and asset
management businesses of Shearson Lehman Brothers, and Smith Barney, Harris
Upham & Co. Incorporated was renamed Smith Barney Shearson Inc. On June 1,
1994,
Smith Barney Shearson Inc. was renamed Smith Barney Inc. As of the close of
business on July 30, 1993, the Adviser succeeded Shearson Lehman Advisors as
the
Fund's investment adviser. The new investment advisory agreement with the
Adviser contains terms and conditions substantially similar to the investment
advisory agreement with the predecessor investment adviser and provides for
payment of fees at the same rate as was paid to such predecessor investment
adviser.
As of the Record Date, the Directors and/or executive officers of the
Fund
beneficially owned (or were deemed to beneficially own pursuant to the rules
of
the SEC) less than 1% of the shares of common stock of Travelers. The name,
principal occupation and address of each director and principal executive
officer of the Adviser are set forth in Exhibit A hereto. An audited balance
sheet for MMC as of December 31, 1993 is set forth as Exhibit B hereto.
THE ADVISORY AGREEMENT
The Advisory Agreement was most recently approved by the Fund's Board of
Directors, including a majority of the Independent Board Members on April 7,
1993, and by the Fund's shareholders on June 9, 1993. Under the terms of the
Agreement, the Adviser is required, subject to the supervision and approval of
the Board of the Fund, to manage the Fund's investments in accordance with the
investment objectives and policies as stated in the Fund's Prospectus. The
Adviser is responsible for making investment decisions, supplying investment
research and Fund management services and placing orders to purchase and sell
securities on behalf of the Fund.
In consideration of services rendered by the Adviser pursuant to the
Advisory Agreement, the Fund pays a monthly fee at the annual rate of .50% of
8
<PAGE>
the Fund's average monthly net assets. Pursuant to the Advisory Agreement and
its previous investment advisory agreement, the Fund paid a total of $723,502
in
advisory fees for the fiscal year ended March 31, 1994.
The Adviser bears all expenses in connection with the performance of its
services under the Advisory Agreement. Other expenses incurred in the
operation
of the Fund are borne by the Fund, including taxes, interest, brokerage fees
and
commissions, if any; fees of the Board Members who are not officers,
directors,
shareholders or employees of the Adviser, the Fund's administrator or sub-
administrator and their 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; cost of investor
services (including allocable telephone and personnel expenses); costs of
preparation and printing of shareholders' reports; costs incurred in
connection
with meetings of the Board and of the shareholders of the Fund; listing fees;
and any extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to the Advisory Agreement (and the administration agreement) but
excluding interest, taxes, brokerage and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation of any
state
having jurisdiction over the Fund, the Adviser will reduce its advisory fees
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. Proportionate reductions would also be made by the
Fund's administrator. This expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
The Advisory Agreement provides that in the absence of willful
misfeasance,
bad faith, gross negligence or reckless disregard of its obligations
thereunder,
the Adviser shall not be liable for any act or omission in the course of, or
in
connection with, the rendering of its services thereunder.
Pursuant to its terms, the Advisory Agreement will remain in effect for
an
initial two-year term and will continue in effect for successive periods if
and
so long as such continuance is specifically approved annually by (a) the
Fund's
Board or (b) a "majority vote" of the Fund's shareholders, as that term is
defined in the 1940 Act (a "Majority Vote"), provided that in either event,
the
continuance also is approved by a majority of the Independent Board Members by
vote cast in person at a meeting called for the purpose of voting on approval.
The Advisory Agreement is terminable, without penalty, on 60 days' written
notice by the Board of the Fund or by a Majority Vote of the Fund's
shareholders, or on 90 days' written notice by the Adviser. The Advisory
Agreement will terminate automatically in the event of its assignment (as
defined in the Investment Company Act of 1940, as amended).
9
<PAGE>
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by the
Adviser,
subject to the overall review of the Fund's 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 on which
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. U.S. government securities are generally purchased from
underwriters or dealers, although certain newly-issued U.S. government
securities may be purchased directly from the United States Treasury or from
the
issuing agency or instrumentality.
In selecting brokers or dealers to execute Fund 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
Exchange Act) provided to the Fund and/or other accounts over which the
Adviser
or its affiliates exercise investment discretion. The fees under an 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
10
<PAGE>
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. During the last fiscal year of the Fund,
neither the Fund nor its Adviser, pursuant to any agreement or understanding
with a broker or otherwise through an internal allocation procedure, directed
the Fund's brokerage transactions to a broker or brokers because of research
services provided. The Board of the Fund 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 SEC under the 1940 Act, subject to the
approval of the Board of the Fund, transactions for the Fund may be executed
through Smith Barney and other affiliated broker-dealers if, in the judgment
of
the 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.
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 is a member, except to the extent
permitted by the SEC.
For the fiscal year ended March 31, 1994, the Fund did not incur any
brokerage commissions.
11
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders wishing to submit proposals for inclusion in a proxy
statement
for the 1995 annual meeting of shareholders must submit their proposals for
inclusion in the proxy materials relating to the next annual meeting in
writing
to the Secretary of the Fund, c/o Smith Barney Inc., 1345 Avenue of the
Americas, New York, New York 10105, no later than February 15, 1995.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders entitled to cast at least 25% of all votes entitled to be
cast
at a meeting may require the calling of a meeting of shareholders for the
purpose of voting on the removal of any Board Member of the Fund. Meetings of
shareholders for any other purpose also shall be called by the President or
Secretary of the Fund when requested in writing by shareholders entitled to
cast
at least 25% of all votes entitled to be cast at a meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Fund does not intend to present any other business at the Meeting,
nor
is it 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(s) will vote thereon in accordance with their
judgment.
June 15, 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.
12
<PAGE>
<TABLE>
EXHIBIT LIST
<S> <C>
EXHIBIT A Name, Position with, Principal Occupation and Address
of each Director and Principal Executive Officer of
the Adviser.
EXHIBIT B Audited balance sheet of MMC.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT
A
NAME, OCCUPATION AND ADDRESS OF
EXECUTIVE OFFICERS OF
GREENWICH STREET ADVISORS
The name, position with Greenwich Street Advisors and principal
occupation
of each executive officer and director of Greenwich Street Advisors are set
forth in the following table. The business address of each such person is Two
World Trade Center, New York, New York 10048.
<CAPTION>
POSITION WITH GREENWICH
NAME STREET ADVISORS PRINCIPAL OCCUPATION
- ---- ----------------------- --------------------
<S> <C> <C>
Thomas B. Stiles II Chairman and Chief Executive Vice
Executive Officer President of Smith
Barney
John C. Bianchi Managing Director Same
Robert Brady Managing Director Same
Ellen S. Cammer Managing Director Same
James Conroy Managing Director Same
Joseph P. Deane Managing Director Same
Kenneth Egan Managing Director Same
Jay Gerken Managing Director Same
Jack Levande Managing Director Same
Lawrence T. McDermott Managing Director Same
Ronald Perry Managing Director Same
Kevin Reed Managing Director Same
Phyllis M. Zahorodny Managing Director Same
George Novello Managing Director Same
</TABLE>
A-1
<PAGE>
EXHIBIT
B
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Mutual Management Corp.:
We have audited the accompanying consolidated statement of financial
condition of Mutual Management Corp. (a wholly-owned subsidiary of Smith
Barney
Holdings Inc.) and its Subsidiary as of December 31, 1993. This consolidated
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this consolidated 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 consolidated statement of financial
condition is free of material misstatement. An audit of a consolidated
statement
of financial condition includes examining, on a test basis, evidence
supporting
the amounts and disclosures in the consolidated statement of financial
condition. 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
consolidated
statement of financial condition provides a reasonable basis for our opinion.
In our opinion, the consolidated statement of financial condition
referred
to above presents fairly, in all material respects, the financial position of
Mutual Management Corp. and its Subsidiary as of December 31, 1993 in
conformity
with generally accepted accounting principles.
KPMG Peat Marwick
New York, New York
March 14, 1994
B-1
<PAGE>
<TABLE>
MUTUAL MANAGEMENT CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
<S> <C> <C>
ASSETS
Cash................................. $ 238
Management fees receivable........... 13,428,876
Investments in affiliated mutual
funds, at market................... 1,074,258
Furniture and fixtures, net of
accumulated depreciation and
amortization, of $142,035.......... 193,356
Investment advisory contracts, net of
accumulated amortization, of
$26,185,930........................ 476,513,330
Receivable from affiliate............ 208,595
Other assets......................... 24,513,330
------------
$515,932,636
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Note Payable to Parent............... $412,389,100
Payable to Parent and affiliate...... 37,487,039
Stockholder's equity:
Common stock ($1 par value)........ $ 500
Additional paid-in capital......... 49,053,121
Retained earnings.................. 16,836,177
Cumulative translation
adjustment...................... 166,699
-----------
$66,056,497
------------
$515,932,636
============
</TABLE>
NOTES:
(1) Organization -- Mutual Management Corp. ("MMC"), 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 sixty-eight investment
company portfolios and as administrator of The Inefficient-Market Fund,
Inc.
MMC 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 Asset Management Corp., a wholly-owned subsidiary of MMC.
Significant intercompany balances have been eliminated in consolidation.
B-2
<PAGE>
(2) Shearson Acquisition -- On July 31, 1993, Smith Barney, Harris Upham & Co.
Incorporated ("SBHU"), together with certain of its affiliates (including
MMC) 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 acquisition included the contracts to manage fifty-one of Shearson's
investment company portfolios.
(3) Related Party Transactions -- SBS provides MMC 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 and payable to affiliate are non-
interest bearing. Investments in affiliated mutual funds represent shares
of
Smith Barney Money Funds, Inc., Smith Barney Muni Funds and Smith Barney
Tax
Free Money Fund, Inc. Such investments are carried at market value. In
1993,
MMC 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 MMC
relating to management fees is remitted to the Parent in the form of
dividends.
(4) Income Taxes -- Under an income tax allocation arrangement with the Parent
and The Travelers Inc., MMC's federal, state and local income taxes are
provided for on a separate return basis without regard to timing
differences, and are subject to the utilization of tax attributes in The
Travelers Inc. consolidated income tax provision. Under the tax sharing
agreement, MMC remits taxes to the Parent.
(5) Investment Advisory Contracts -- Investment advisory contracts include
$387,015,720 of value ascribed to the acquired Shearson investment company
portfolios purchased by MMC (see note 2). The cost of these contracts is
being amortized over twenty years on a straight-line basis.
In addition, the balance also includes 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 to Parent represents a
demand note at a rate of LIBOR plus .75%. The note was issued for the
financing of investment advisory contracts (purchased on July 31, 1993
B-3
<PAGE>
(see note 2) and certain deferred expenses originally paid by SBS relating
to closed end funds sponsored by MMC.
On November 1, 1993 MMC paid the third and final installment of a
promissory
note to SBS relating to the transferral of the investment advisory
contract
for the Vantage Money Market Funds from SBS in October, 1990.
(7) Stockholder's Equity -- Common shares authorized consist of 5,000 shares
of
Class A (non-voting) and 5,000 shares of Class B (voting). At December 31,
1993, 449 Class A shares and 51 Class B shares were issued and
outstanding.
In connection with the acquisition of Smith Barney Inc. by Primerica
Corporation on June 19, 1987 and the subsequent acquisition of Primerica
Corporation by Commercial Credit Group, Inc. in December 1988, MMC was
recapitalized and its retained earnings on both dates were transferred to
additional paid-in capital.
B-4
VOTE THIS VOTING INSTRUCTION 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 ELECTION OF NOMINEES AS
DIRECTORS AND PROPOSAL 2.
Please refer to the Proxy Statement for a discussion of the Proposals.
1. ELECTION OF DIRECTORS FOR all nominees listed
WITHHOLD AUTHORITY
(except as marked to the
to vote for all nominees
Charles F. Barber, Robert A. Frankel, contrary below)
Allan J. Bloostein and Heath B. McLendon
(Instruction: To withhold authority for any nominee, write his name on the
line provided below.)
___________________________________________________________________________
2. To ratify the selection of Coopers & Lybrand as FOR
AGAINST ABSTAIN
independent accountants for the Fund
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .
ZENIX INCOME FUND INC. PROXY
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Preferred Stock of Zenix Income
Fund Inc. (the "Fund"), a Maryland corporation, hereby appoints Heath
B. McLendon, Richard P. Roelofs, Christina T. Sydor and Lee D.
Augsburger attorneys 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 Preferred Stock of
the Fund that the undersigned is entitled to vote at the Annual
Meeting of Shareholders of Zenix Income Fund Inc. to be held at the
offices of the Fund, Two World Trade Center, New York, New York on
August 11, 1994 at 10:00 a.m., and any adjournment or adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement dated June 15, 1994 and hereby
instructs said attorneys and proxies to vote said shares as indicated
herein. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Meeting. A
majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of 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)
VOTE THIS VOTING INSTRUCTION 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 ELECTION OF NOMINEES AS
DIRECTORS AND PROPOSAL 2.
Please refer to the Proxy Statement for a discussion of the Proposals.
1. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD
AUTHORITY
(except as marked to the to
vote for all nominees
Martin Brody, Dwight B. Crane, contrary below)
Allan J. Bloostein and Heath B. McLendon
(Instruction: To withhold authority for any nominee, write his name on the
line provided below.)
___________________________________________________________________________
2. To ratify the selection of Coopers & Lybrand as FOR
AGAINST ABSTAIN
independent accountants for the Fund
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .
ZENIX INCOME FUND INC. PROXY SOLICITED BY THE
BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of Zenix Income Fund
Inc. (the "Fund"), a Maryland corporation, hereby appoints Heath B.
McLendon, Richard P. Roelofs, Christina T. Sydor and Lee D.
Augsburger attorneys 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 Common Stock of the
Fund that the undersigned is entitled to vote at the Annual Meeting
of Shareholders of Zenix Income Fund Inc. to be held at the offices
of the Fund, Two World Trade Center, New York, New York on August 11,
1994 at 10:00 a.m., and any adjournment or adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
Proxy Statement dated June 15, 1994 and hereby instructs said
attorneys and proxies to vote said shares as indicated herein. In
their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting. A majority of the
proxies present and acting at the Meeting in person or by substitute
(or, if only one shall be so present, then that one) shall have and
may exercise all of 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)
g:\shared\domestic\clients\shearson\funds\zif\proxcrd.doc
