<PAGE>
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
[_] Confidential, for use of the
[_] Preliminary information statement Commission only (as permitted by
Rule 14c-5(d)(2))
[X] Definitive information statement
NORTH AMERICAN FUNDS
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 (set forth the amount on which the
filing fee is calculated and state how it was determined): _______________
(4) Proposed maximum aggregate value of transaction: ________________________
(5) Total fee paid: _________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] 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>
January 28, 1998
Dear Shareholders:
Enclosed is an Information Statement regarding Salomon Brothers Asset
Management Inc (SBAM), the subadviser to the North American U.S. Government
Securities Fund, the North American National Municipal Bond Fund and the North
American Strategic Income Fund. The statement details the recent merger of
SBAM's ultimate parent with Smith Barney Holdings, Inc., a wholly-owned
subsidiary of Travelers Group Inc.
This merger resulted in the review of the existing SBAM subadvisory agreement
and the Salomon Brothers Asset Management Limited (SBAM Ltd.) subadvisory
consulting agreement. The North American Funds Board of Trustees has approved
new agreements with SBAM and SBAM Ltd. on substantially identical terms and
with the same fees as the old agreements.
As always, please direct any inquiries to Shareholder Services at 1-800-872-
8037.
Sincerely,
Bradford K. Gallagher
Chairman
<PAGE>
NORTH AMERICAN FUNDS
U.S. GOVERNMENT SECURITIES FUND
NATIONAL MUNICIPAL BOND FUND
STRATEGIC INCOME FUND
INFORMATION STATEMENT
Salomon Brothers Asset Management Inc ("SBAM") is the subadviser to the U.S.
Government Securities Fund, the Strategic Income Fund and the National
Municipal Bond Fund (the "Portfolios") of the North American Funds (the
"Fund"). Additionally, SBAM has entered into a subadvisory consulting
agreement with Salomon Brothers Asset Management Limited ("SBAM Ltd.") with
respect to the Strategic Income Fund. On November 28, 1997, Salomon Inc
("Salomon"), the ultimate parent company of SBAM and SBAM Ltd., merged with
and into Smith Barney Holdings Inc., a wholly-owned subsidiary of Travelers
Group Inc. ("Travelers"), to form a new company called Salomon Smith Barney
Holdings Inc. (the "Transaction"). Upon consummation of the Transaction,
Travelers became the ultimate parent of SBAM and SBAM Ltd.
Travelers is a diversified financial services company engaged in investment
services, asset management, consumer finance and life and property casualty
insurance services.
Under an order the Fund has received from the Securities and Exchange
Commission, the Fund is permitted to appoint a subadviser pursuant to a
subadvisory agreement with the Fund's adviser, CypressTree Asset Management
Corporation, Inc. ("CAM"), that has not been approved by shareholders. The
Trustees of the Fund must approve such subadvisory agreements, and the Fund
must provide notice to shareholders within 60 days of such hiring of a new
subadviser or the implementation of any material change in a subadvisory
contract. This Information Statement is being supplied to shareholders to
fulfill the notice condition, and is being mailed on or about January 28,
1998.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Under certain interpretations, the Transaction might be deemed to create an
"assignment," as defined in the Investment Company Act of 1940, as amended
(the "1940 Act"), of both the subadvisory agreements with SBAM and the
subadvisory consulting agreement between SBAM and SBAM Ltd., resulting in the
termination of the agreements. Therefore, on November 24, 1997 the Board of
Trustees approved new agreements which became effective on November 28, 1997
and which are identical, except for the date of execution, to the prior
agreements approved by the Fund's Board of Trustees on June 27, 1997 and by
the shareholders of the respective Portfolios on September 24, 1997.
1
<PAGE>
NEW SUBADVISORY AGREEMENT BETWEEN CAM AND SBAM WITH RESPECT TO THE U.S.
GOVERNMENT SECURITIES FUND
Prior to November 28, 1997, SBAM served as the subadviser to the U.S.
Government Securities Fund pursuant to a subadvisory agreement between CAM and
SBAM dated October 1, 1997 (the "Old U.S. Government Securities Fund
Agreement"). (Prior to October 1, 1997, SBAM served as subadviser to this
Portfolio pursuant to a subadvisory agreement between the Fund's former
adviser and SBAM.) On November 24, 1997 the Board of Trustees approved a
subadvisory agreement between CAM and SBAM pursuant to which SBAM continues to
serve as the subadviser to this Portfolio following the Transaction (the "New
U.S. Government Securities Fund Agreement"). The New U.S. Government
Securities Fund Agreement, which is dated November 28, 1997, contains
identical terms and conditions, including identical subadvisory fee levels, as
the Old U.S. Government Securities Fund Agreement.
Under the terms of the New U.S. Government Securities Fund Agreement, SBAM
continues to manage the investment and reinvestment of the assets of the U.S.
Government Securities Fund, subject to the supervision of CAM and the Fund's
Board of Trustees. SBAM formulates and executes an investment program for the
Portfolio consistent with the Portfolio's investment objectives and policies
as outlined in the Fund's Prospectus. SBAM, at its expense, furnishes
necessary investment and management facilities for conducting the investment
activities of the Portfolio, and pays the salaries of its personnel.
Subadvisory Fee Rates
As compensation for its services, SBAM receives a fee from CAM calculated as
an annual percentage of the current value of the net assets of the U.S.
Government Securities Fund. The fee, which is accrued daily and payable
monthly in arrears, is calculated for each day by multiplying the fraction of
one over the number of calendar days in the year by the annual percentage
prescribed for the Portfolio, and multiplying this product by the value of the
net assets of the Portfolio at the close of business on the previous business
day of the Trust.
Under both the Old and New U.S. Government Securities Fund Agreements, SBAM
receives a fee from CAM at an annual rate of .225% of the first $200 million
of the Portfolio's average daily net assets, .150% of the Portfolio's average
daily net assets between $200 million and $500 million and .100% of the
Portfolio's average daily net assets in excess of $500 million.
Subadvisory Fees Paid
For the fiscal year ended October 31, 1997, CAM and the Fund's former
adviser paid $260,027 in subadvisory fees to SBAM for management of the U.S.
Government Securities Fund. SBAM would have received this same amount had the
New U.S. Government Securities Fund Agreement been in effect during such year.
THESE FEES ARE PAID BY THE ADVISER AND ARE NOT ADDITIONAL CHARGES TO THE
PORTFOLIO.
2
<PAGE>
Other Investment Companies Advised by SBAM
SBAM manages three other funds with investment objectives similar to the
U.S. Government Securities Fund, as follows:
<TABLE>
<CAPTION>
ANNUAL ADVISORY/ NET ASSETS
FUND INVESTMENT OBJECTIVE SUBADVISORY FEE RATE (9/30/97)
---- -------------------- -------------------- ------------
<C> <S> <C> <C>
Salomon Seeks a high Advisory fee $ 13,084,920
Brothers U.S. level of of .60% of
Government current income average daily
Income Fund net assets
New England Provide a high Subadvisory $ 17,773,533
Zenith Fund: level of fee of .225%
Salomon current income on the first
Brothers U.S. consistent $200 million
Government with of net assets;
Series preservation .15% on the
(Advised by of capital and next $300
TNE Advisers, maintenance of million of net
Inc., liquidity assets; and
subadvised by .10% on all
SBAM) assets over
$500 million
NASL Series Seeks a high Subadvisory $227,997,438
Trust: U.S. level of fee of .225%
Government current income on the first
Securities consistent $200 million
Trust with of net assets;
(Advised by preservation .15% on the
NASL of capital and next $300
Financial maintenance of million of net
Services, liquidity assets; and
Inc., .10% on all
subadvised by assets over
SBAM) $500 million
</TABLE>
Shareholder and Board Approval of the Old U.S. Government Securities Fund
Agreement
The Old U.S. Government Securities Fund Agreement was initially approved by
the Fund's Board of Trustees on June 27, 1997 and by the shareholders of the
U.S. Government Securities Fund on September 24, 1997.
Board Considerations
At a meeting held on November 24, 1997 the Fund's Board of Trustees approved
the New U.S. Government Securities Fund Agreement.
The Board of Trustees believes that the agreement will enable the Portfolio
to continue to obtain high quality services at costs which it deems
appropriate and reasonable. In connection with its review, the Board of
Trustees considered materials furnished by SBAM, including information
regarding the personnel, operations and financial condition of SBAM and
Travelers.
The Board focused primarily on the nature and quality of the services
provided by SBAM to the Portfolio, and the fact that the terms and conditions
of the Old U.S. Government Securities Fund Agreement and the New U.S.
Government Securities Fund Agreement, including the terms relating to the
services to be performed and to
3
<PAGE>
expenses and fees, are substantially identical. In connection with these
considerations, the Board of Trustees also considered possible alternatives to
approval of the New U.S. Government Securities Fund Agreement.
Based upon its review of the above factors, the Board of Trustees concluded
that the New U.S. Government Securities Agreement is in the best interests of
the Portfolio and its shareholders.
NEW SUBADVISORY AGREEMENT BETWEEN CAM AND SBAM WITH RESPECT TO THE NATIONAL
MUNICIPAL BOND FUND
Prior to November 28 1997, SBAM served as the subadviser to the National
Municipal Bond Fund pursuant to a subadvisory agreement between CAM and SBAM
dated October 1, 1997 (the "Old National Municipal Bond Fund Agreement").
(Prior to October 1, 1997, SBAM served as subadviser to this Portfolio
pursuant to a subadvisory agreement between the Fund's former adviser and
SBAM.) On November 24, 1997, the Board approved a subadvisory agreement
between CAM and SBAM, pursuant to which SBAM continues to serve as the
subadviser to this Portfolio following the Transaction (the "New National
Municipal Bond Fund Agreement"). The New National Municipal Bond Fund
Agreement, which is dated November 28, 1997, contains identical terms and
conditions, including identical subadvisory fee levels, as the Old National
Municipal Bond Fund Agreement.
Under the terms of the New National Municipal Bond Fund Agreement, SBAM
continues to manage the investment and reinvestment of the assets of the
National Municipal Bond Fund, subject to the supervision of CAM and the Fund's
Board of Trustees. SBAM formulates and executes an investment program for the
Portfolio consistent with the Portfolio's investment objectives and policies
as outlined in the Fund's Prospectus. SBAM, at its expense, furnishes
necessary investment and management facilities for conducting the investment
activities of the Portfolio, and pays the salaries of its personnel.
Subadvisory Fee Rates
Under both the Old and New National Municipal Bond Fund Agreements, SBAM
receives a fee from CAM at an annual rate of .250% of the Portfolio's average
daily net assets. For a description of how the fee is calculated, see the U.S.
Government Securities Fund section of this Information Statement.
Subadvisory Fees Paid
For the fiscal year ended October 31, 1997, CAM and the Fund's former
adviser paid $50,586 in subadvisory fees to SBAM for management of the
National Municipal Bond Fund. SBAM would have received this same amount had
the New National Municipal Bond Fund Agreement been in effect during such
year. THESE FEES ARE PAID BY THE ADVISER AND ARE NOT ADDITIONAL CHARGES TO THE
PORTFOLIO.
4
<PAGE>
Other Investment Companies Advised by SBAM
SBAM manages one other fund with an investment objective similar to the
National Municipal Bond Fund, as follows:
<TABLE>
<CAPTION>
ANNUAL NET ASSETS
FUND INVESTMENT OBJECTIVE ADVISORY FEE RATE (9/30/97)
---- -------------------- ----------------- -----------
<S> <C> <C> <C>
Salomon Brothers Achieve a high level .50% of average daily $13,767,023
National Intermediate of current income net assets
Municipal Fund which is exempt from
regular federal
income taxes
</TABLE>
Shareholder and Board Approval of the Old National Municipal Bond Fund
Agreement
The Old National Municipal Bond Fund Agreement was initially approved by the
Fund's Board of Trustees on June 27, 1997 and by the shareholders of the
National Municipal Bond Fund on September 24, 1997.
Board Considerations
At a meeting held on November 24, 1997, the Fund's Board of Trustees
approved the New National Municipal Bond Agreement.
The Board believes that the agreement will enable the Portfolio to continue
to obtain high quality services at costs which it deems appropriate and
reasonable and which are substantially identical to the existing agreement. In
connection with its review, the Board of Trustees considered materials
furnished by SBAM, including information regarding the personnel, operations
and financial condition of SBAM and Travelers.
In reviewing the New National Municipal Bond Fund Agreement, the Board of
Trustees placed emphasis on the continuity provided by maintaining the same
investment subadviser for the Portfolio following the Transaction. The Board
of Trustees also considered the overall experience and reputation of SBAM, as
well as the cost and profitability to SBAM of acting as subadviser to the
Portfolio. In connection with these considerations, the Board of Trustees was
provided with information regarding fees payable by similar investment
companies, as well as services provided to such companies and their
performance records, and information regarding SBAM's management of another
investment company with objectives and policies similar to the Portfolio.
Based upon its review of the above factors, the Board of Trustees concluded
that the New National Municipal Bond Fund Agreement is in the best interests
of the Portfolio and its shareholders.
5
<PAGE>
NEW SUBADVISORY AGREEMENT BETWEEN CAM AND SBAM WITH RESPECT TO THE STRATEGIC
INCOME FUND
Prior to November 28, 1997, SBAM served as the subadviser to the Strategic
Income Fund pursuant to a subadvisory agreement between CAM and SBAM dated
October 1, 1997 (the "Old Strategic Income Fund Agreement"). (Prior to October
1, 1997, SBAM served as subadviser to this Portfolio pursuant to a subadvisory
agreement between the Fund's former adviser and SBAM.) On November 24, 1997,
the Board of Trustees approved a subadvisory agreement between CAM and SBAM
pursuant to which SBAM continues to serve as the subadviser to this Portfolio
following the Transaction (the "New Strategic Income Fund Agreement"). The New
Strategic Income Fund Agreement, which is dated November 28, 1997, contains
identical terms and conditions, including identical subadvisory fee levels, as
the Old Strategic Income Fund Agreement.
Under the terms of the New Strategic Income Fund Agreement, SBAM continues
to manage the investment and reinvestment of the assets of the Strategic
Income Fund, subject to the supervision of CAM and the Fund's Board of
Trustees. SBAM formulates and executes an investment program for the Portfolio
consistent with the Portfolio's investment objectives and policies as outlined
in the Fund's Prospectus. SBAM, at its expense, furnishes necessary investment
and management facilities for conducting the investment activities of the
Portfolio, and pays the salaries of its personnel.
Subadvisory Fee Rates
Under both the Old and New Strategic Income Fund Agreements, SBAM receives a
fee from CAM at an annual rate of .350% of the first $50 million of the
Portfolio's average daily net assets, .300% of the Portfolio's average daily
net assets between $50 million and $200 million, .250% of the Portfolio's
average daily net assets between $200 million and $500 million and .200% of
the Portfolio's average daily net assets in excess of $500 million. For a
description of how the fee is calculated, see the U.S. Government Securities
Fund section of this Information Statement.
Subadvisory Fees Paid
For the fiscal year ended October 31, 1997, CAM and the Fund's former
adviser paid $192,079 in subadvisory fees to SBAM for management of the
Strategic Income Fund. A portion of this amount was paid by SBAM to SBAM Ltd.,
as described below. SBAM would have received this same amount had the New
Strategic Income Fund Agreement been in effect during such year. THESE FEES
ARE PAID BY THE ADVISER AND ARE NOT ADDITIONAL CHARGES TO THE PORTFOLIO.
6
<PAGE>
Other Investment Companies Advised by SBAM
SBAM manages four other funds with investment objectives similar to the
Strategic Income Fund, as follows:
<TABLE>
<CAPTION>
ANNUAL ADVISORY/ NET ASSETS
FUND INVESTMENT OBJECTIVE SUBADVISORY FEE RATE (9/30/97)
- ---- -------------------- -------------------- ------------
<S> <C> <C> <C>
Salomon Brothers Seeks a high level of Advisory fee of .75% of average $ 77,633,704
Strategic Current income daily net assets
Bond Fund
New England Zenith Seeks a high level of total Subadvisory fee of .35% on the first $ 64,493,077
Fund: Salomon Brothers return consistent with the $50 million of net assets; .35% of the next
Strategic Bond preservation of capital $150 million; .30% on the next $300
Opportunities Series million; and .25% over $500 million
(Advised by TNE
Advisers, Inc.,
subadvised by SBAM)
JNL Series Trust: Obtain a high level of current Subadvisory fee of .375% on $ 32,170,924
Salomon Brothers/JNL income the first $50 million of net assets; .35% on the
Global Bond Series next $100 million of net assets;
(Advised by Jackson .30% of the next $350 million of net
National Financial assets; and .25% on all assets over $500 million
Services, Inc.,
subadvised by SBAM)
NASL Series Trust Seeks a high level of total return Subadvisory fee of .35% on the first $50 million $331,559,951
Strategic consistent with preservation of capital of net assets; .30% on the next $150 million of
Bond Trust (Advised by net assets; .25% on the next $300 million of net
NASL Financial assets; and .20% on all assets over $500 million
Services, Inc.,
subadvised by SBAM)
</TABLE>
Shareholder and Board Approval of the Old Strategic Income Fund Agreement
The Old Strategic Income Agreement was initially approved by the Fund's
Board of Trustees on June 27, 1997 and by the shareholders of the Strategic
Income Fund on September 24, 1997.
Board Considerations
At a meeting held on November 24, 1997, the Fund's Board of Trustees,
approved the New Strategic Income Fund Agreement.
The Board of Trustees believes that the agreement will enable the Portfolio
to obtain high quality services at costs which it deems appropriate and
reasonable. In connection with its review, the Board of Trustees considered
materials furnished by SBAM, including information regarding the personnel,
operations and financial condition of SBAM and Travelers.
Based upon its review of the above factors, the Board of Trustees concluded
that the New Strategic Income Fund Agreement is in the best interests of the
Portfolio and its shareholders.
7
<PAGE>
NEW SUBADVISORY CONSULTING AGREEMENT BETWEEN SBAM AND SBAM LTD. WITH RESPECT
TO THE STRATEGIC INCOME FUND
In connection with SBAM's service as subadviser to the Strategic Income
Fund, SBAM's London-based affiliate, SBAM Ltd., provides certain subadvisory
consulting services to SBAM with regard to currency transactions and
investments in non-dollar denominated debt securities ("Foreign Securities")
for the benefit of the Strategic Income Fund. These services were provided,
prior to November 28, 1997, pursuant to a subadvisory consulting agreement
between SBAM and SBAM Ltd. dated October 1, 1997 (the "Old Consulting
Agreement"). On November 28, 1997, a consulting agreement (the "New Consulting
Agreement") substantially identical to the Old Consulting Agreement was signed
by SBAM and SBAM Ltd.
Under the terms of the New Consulting Agreement, SBAM Ltd. continues to
provide advisory services to SBAM relating to currency transactions and
investments in Foreign Securities for the Portfolio. The New Consulting
Agreement contains identical terms and conditions, including identical fee
levels, as the Old Consulting Agreement, and SBAM Ltd. is compensated by SBAM
at no additional expense to the Strategic Income Fund.
Subadvisory Fee Rates
As full compensation for all services provided by SBAM Ltd. under both the
Old and New Consulting Agreements, SBAM pays SBAM Ltd. a portion of its
subadvisory fee equal to the fee payable under SBAM's subadvisory agreement
with respect to the Portfolio multiplied by the percentage of the Strategic
Income Fund's assets that SBAM Ltd. has been delegated to manage, divided by
the current value of the net assets of the Portfolio.
Subadvisory Fees Paid
For the fiscal year ended October 31, 1997, SBAM paid $48,020 to SBAM Ltd.
under the Old Consulting Agreement (and a predecessor subadvisory consulting
agreement between SBAM and SBAM Ltd. in effect prior to October 1, 1997) for
subadvisory consulting services rendered in connection with the Strategic
Income Fund. SBAM Ltd. would have received this same amount had the New
Consulting Agreement been in effect during such year.
Shareholder and Board Approval of the Old Consulting Agreement
The Old Consulting Agreement was initially approved by the Fund's Board of
Trustees on June 27, 1997 and by the shareholders of the Strategic Income Fund
on September 24, 1997.
8
<PAGE>
Board Considerations
At a meeting held on November 24, 1997, the Fund's Board of Trustees
approved the New Consulting Agreement.
The Board of Trustees believes that the New Consulting Agreement will enable
the Portfolio to obtain high-quality services at costs which it deems
appropriate and reasonable. In connection with its review of the New
Consulting Agreement, the Board of Trustees reviewed materials furnished by
SBAM Ltd., including information regarding the personnel, operations and
financial condition of SBAM Ltd.
Based upon its review of the above factors, the Board of Trustees concluded
that the New Consulting Agreement is in the best interests of the Portfolio
and its shareholders.
DURATION AND TERMINATION OF ALL AGREEMENTS
The new agreements discussed in this Information Statement all have initial
terms of two years, and thereafter will continue in effect for successive
annual periods provided such continuance is approved at least annually by (i)
a majority of the Trustees not parties to the agreements, and who are not
"interested persons"(as defined in the 1940 Act) of any such party and (ii) a
majority of the Board of Trustees as a whole or the holders of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the Fund.
All agreements will terminate automatically in the event of their
"assignment," as defined in the 1940 Act.
GENERAL INFORMATION CONCERNING CAM AND THE ADVISORY AGREEMENT
CAM acts as the Fund's adviser pursuant to its advisory agreement with the
Fund dated October 1, 1997 (the "Advisory Agreement"). The Advisory Agreement
was approved by the Fund's Board of Trustees on June 27, 1997 and by
shareholders of the Fund on September 24, 1997. Prior to October 1, 1997, NASL
Financial Services, Inc. was both investment adviser and distributor to the
Fund.
CAM is a wholly-owned subsidiary of CypressTree Investments, Inc., an
affiliate of Cypress Holding Company Inc., which is controlled by its
management and Berkshire Partners IV, L.P. CypressTree Funds Distributors,
Inc. ("CFD"), also a wholly-owned subsidiary of CypressTree Investments, Inc.,
is the Fund's distributor. The address of both CAM and CFD is 286 Congress
Street, Boston, Massachusetts 02210.
Under the Advisory Agreement, CAM oversees the administration of all aspects
of the business and affairs of the Fund; monitors the subadvisers for the
compliance with the investment objectives and related policies of the
Portfolios; reviews
9
<PAGE>
performance of the subadvisers; and periodically reports to the Fund's Board
of Trustees. For the fiscal year ended October 31, 1997, the Fund paid total
advisory fees to CAM and the former adviser of $6,327,793, of which the
contributions of the Portfolios discussed in this Information Statement were
as follows:
<TABLE>
<S> <C>
U.S. Government Securities Fund $567,391
National Municipal Bond Fund $109,842
Strategic Income Fund $561,512
</TABLE>
GENERAL INFORMATION CONCERNING SBAM AND SBAM LTD.
INFORMATION CONCERNING SBAM
SBAM, organized in 1987, is registered as an investment adviser pursuant to
the Investment Advisers Act of 1940 (the "Advisers Act"). As of December 31,
1997, SBAM and its worldwide investment advisory affiliates managed
approximately $26 billion of assets, of which SBAM managed approximately $20
billion. SBAM is a wholly owned subsidiary of Salomon Brothers Holding Company
Inc. ("SBHC"), which in turn is a wholly-owned subsidiary of Salomon Smith
Barney Holdings, Inc. ("SSBH"). The principal business address of SBAM and
SBHC is 7 World Trade Center, New York, New York 10048. SSBH is a wholly-owned
subsidiary of Travelers. The principal business address of Travelers and SSBH
is 388 Greenwich Street, New York, New York 10013.
The names, titles and principal occupations of the principal executive
officers and directors of SBAM are set forth in the following table.
<TABLE>
<CAPTION>
TITLE AND
NAME PRINCIPAL OCCUPATION
---- ------------------------------------------------------------
<C> <S>
Thomas W. Brock Chairman, Chief Executive Officer and Managing Director of
SBAM and Managing Director and Member of the Management
Board of Salomon Brothers Inc.
Michael S. Hyland President, Managing Director and Member of the Board of SBAM
and Managing Director of Salomon Brothers Inc.
Rodney B. Berens Managing Director and Member of the Board of SBAM and
Managing Director and Member of the Management Board of
Salomon Brothers Inc.
Vilas V. Gadkari Managing Director and Member of the Board of SBAM and
Managing Director of Salomon Brothers Inc.
Zachary Snow Secretary of SBAM and Managing Director and Counsel of
Salomon Brothers Inc.
</TABLE>
The business address of each person listed above other than Mr. Gadkari is 7
World Trade Center, New York, New York 10048, and the business address of Mr.
Gadkari is Victoria Plaza, 111 Buckingham Palace Road, London, England SW1W
OSB.
INFORMATION CONCERNING SBAM LTD.
SBAM Ltd. is a company organized under the laws of England. SBAM Ltd.
provides certain advisory services to SBAM relating to currency transactions
and investments in non-dollar denominated debt securities for the benefit of
the Strategic Income Fund. SBAM Ltd. is a wholly-owned subsidiary of Salomon
Brothers Europe
10
<PAGE>
Ltd., which in turn is a wholly-owned subsidiary of Salomon (International)
Finanz AG, which in turn is a wholly-owned subsidiary of SBHC, which is a
wholly-owned subsidiary of SSBH, and therefore is an affiliate of SBAM. SBAM
Ltd. is a member of the Investment Management Regulatory Organization Ltd. in
the United Kingdom and is registered as an investment adviser pursuant to the
Advisers Act. The principal business address of SBAM Ltd. and Salomon Brothers
Europe Ltd. is Victoria Plaza, 111 Buckingham Palace Road, London SW1W OSB,
England, and the principal business address of Salomon (International) Finanz
AG is Schipfe 2, 8001 Zurich, Switzerland.
The names, titles and principal occupations of the principal executive
officers and directors of SBAM Ltd. are set forth in the following table. The
business address of each person listed below except for Messrs. Hyland and
Brock is Victoria Plaza, 111 Buckingham Palace Road, London SW1W OSB, England.
The business address of Messrs. Hyland and Brock is 7 World Trade Center, New
York, New York 10048.
<TABLE>
<CAPTION>
TITLE AND
NAME PRINCIPAL OCCUPATION
---- ---------------------------------------------------------
<C> <S>
Director/Chairman of SBAM Ltd. and Managing Director of
Michael S. Hyland Salomon Brothers Inc.
Thomas W. Brock Director of SBAM Ltd. and Managing Director and Member of
the Management Board of Salomon Brothers Inc.
Vilas V. Gadkari Chief Investment Officer and Director of SBAM Ltd. and
Managing Director of Salomon Brothers Inc.
</TABLE>
Brokerage Transactions
Pursuant to the agreements, SBAM and SBAM Ltd. (hereafter collectively
referred to as the "Subadvisers") are responsible for placing all orders for
the purchase and sale of portfolio securities of the Portfolios. The
Subadvisers have no formula for the distribution of the Portfolios' brokerage
business, and place orders for the purchase and sale of securities with the
primary objective of obtaining the most favorable overall results for the
Portfolios.
In selecting brokers or dealers through whom to effect transactions, the
Subadvisers give consideration to a number of factors, including price, dealer
spread or commission (if any), the reliability, integrity and financial
condition of the broker-dealer, size of the transaction and difficulty of
execution. In selecting brokers and dealers, the Subadvisers also give
consideration to the value and quality of any research, statistical, quotation
or valuation services provided by the broker or dealer. In placing a purchase
or sale order, the Subadvisers may use a broker whose commission in effecting
the transaction is higher than that of some other broker if the Subadvisers
determine in good faith that the amount of the higher commission is reasonable
in relation to the value of the brokerage and research services provided by
such broker, viewed in terms of either the particular transaction or the
Subadvisers' overall responsibilities with respect to the Portfolios and other
accounts managed by the Subadvisers.
11
<PAGE>
To the extent research services are used by the Subadvisers in rendering
investment advice to the Portfolios, such services would tend to reduce the
Subadvisers expenses. However, the Subadvisers do not believe that an exact
dollar value can be assigned to these services. Research services received by
the Subadvisers from brokers or dealers executing transactions for the
Portfolios will also be available for the benefit of other portfolios managed
by the Subadvisers.
For the year ended October 31, 1997, the Fund as a whole paid brokerage
commissions of $1,102,121, although no commissions were paid in connection
with the Strategic Income, U.S. Government Securities or National Municipal
Bond Fund Portfolios.
Salomon Brothers Inc. is an affiliated broker of the Portfolios due to
SBAM's position as subadviser to the Portfolios and due to the position of
SBAM Ltd. as subadviser to the Strategic Bond portfolio. For the fiscal year
ended October 31, 1997, no brokerage commissions were paid to Salomon Brothers
Inc. by the Portfolios.
Other Matters
The Fund will furnish, without charge, a copy of the Fund's annual report
for the fiscal year ended October 31, 1997 to a shareholder upon request. To
obtain a report, please contact the Fund by calling (800) 872-8037 or by
writing to P.O. Box 8505, Boston, Massachusetts 02266.
The cost of the preparation, printing and distribution of this Information
Statement is an expense of CAM, for which expense CAM expects to receive
reimbursement from Travelers.
The Fund is not required to hold annual meetings of shareholders, and
therefore it cannot be determine when the next meeting of shareholders will be
held. Shareholder proposals to be presented at any future meeting of
shareholders of the Fund must be received by the Fund a reasonable time before
the Fund's solicitation of proxies for that meeting in order for such
proposals to be considered for inclusion in the proxy materials related to
that meeting.
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