Securities Act File No. 333-25499
Investment Company Act File No. 811-5928
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940
/X/
(Check appropriate box or boxes)
/ / Pre-Effective Amendment No.
/X/ Post-Effective Amendment No. 1
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
(Exact Name of Registrant as Specified in Charter)
388 Greenwich Street
New York, New York
10013
Address of Principal Executive Offices
(Zip Code)
Registrant's Telephone Number, including Area Code: (212)
816-6474
Christina T. Sydor
Mutual Management Corp.
388 Greenwich Street
22nd Floor
New York, New York 10013
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as
possible after this
Post-Effective Amendment becomes effective.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to Rule 485(b)
on ____, 1998 pursuant to Rule 485(b)
60 days after filing pursuant to Rule 485(a)
on _______ pursuant to Rule 485(a)
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and
documents
Front Cover
Contents Page
Cross -Reference Sheet
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
PURSUANT TO RULE 495(a) Under the Securities Act of 1933, as
amended
Part A
Item No.
Prospectus Heading
1. Cover Page
Cover Page
2. Synopsis
Fee Table
3. Condensed Financial
Information
Financial Highlights Information
4. General Description
of Registrant
Cover Page; Investment Objectives
and Policies; Yield Information;
Additional Information
5. Management of the
Fund
Management of the Fund;
Fee Table;
Distributor
6. Capital Stock and
Other Securities
Dividends, Automatic Reinvestment
and Taxes; Additional Information
7. Purchase of
Securities Being
Offered
Purchase of Shares; Valuation of
Shares
8. Redemption or
Repurchase
Redemption of Shares
9. Pending Legal
Proceedings
Not Applicable
Part B
Item No.
Statement of
Additional Information
10. Cover Page
Cover Page
11. Table of Contents
Table of Contents
12. General Information
and History
Management Agreement, Plan of
Distribution and Other Services;
See Prospectus Cover Page, and
Additional Information
13. Investment Objectives
and Policies Investment Objectives
14. Management of the
Fund Management Agreement, Plan of
Distribution and Other Services;
See Prospectus Management of the
Fund
15. Control Persons and Principal Holders of
Securities Management Agreement, Plan of
Distribution and Other Services;
See Prospectus Management of the
Fund
16. Investment Advisory
and Other Services Management Agreement Plan of
Distribution and Other Services;
Custodian, Transfer Agent and
Dividend Disbursing Agent; See
Prospectus Management of the
Fund and Distributor;
Additional Information"
17. Brokerage Allocation
and Other Practices Investment Objectives; Management
Agreement, Plan Of Distribution
and Other Services.
18. Capital Stock and
Other Securities See Prospectus Purchase of
Shares, Redemption of Shares,
Dividends, Automatic Reinvestment
and Taxes
19. Purchase, Redemption
and Pricing of Securities Being
Offered Determination of Net Asset Value.
See Prospectus Purchase of
Shares, Redemption of Shares,
Valuation of Shares
20. Tax Status
See Prospectus Dividends,
Automatic Reinvestment and Taxes"
21. Underwriters See Prospectus Purchase of Shares
22. Calculation of
Performance Data Yield Information; See Prospectus
Yield Information
23. Financial Statements
Financial Statements
PART A
PROSPECTUS
Except as modified below, the Prospectus dated June 23, 1997
for Smith Barney
Disciplined Small Cap Fund, Inc. filed as part of Pre-
Effective Amendment No.
1 to the Fund's Registration Statement on Form N-1A, filed
on June 17, 1997,
is incorporated by reference.
<PAGE>
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.(THE "FUND")
SUPPLEMENT DATED JANUARY 30, 1998 TO PROSPECTUS
DATED JUNE 23, 1997.
The following information supplements, and to the extent
inconsistent
therewith supersedes, the information set forth in the
Prospectus of the Fund
dated June 23, 1997 (the "Prospectus").
NAME CHANGE. Effective January 30, 1998, the name of the
Fund has been
changed to Smith Barney Small Cap Blend Fund, Inc. No
change in the
management style of the Fund is occurring. The new name
reflects the current
active investment strategy, which is designed to produce
investment results
that reflect a blend of investment styles sometimes referred
to as "growth"
and "value" styles.
THE FUND'S EXPENSES. The following expense table lists the
costs and expenses
an investor
will incur either directly or indirectly as a shareholder of
the Fund, based
on the maximum sales
charge or maximum CDSC that may be incurred at the time of
purchase or
redemption and
the Fund's operating expenses for the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on
purchases (as a percentage of offering price)
Maximum Redemption Fee or CDSC (as a 5.00%* None None
None
percentage of original cost or redemption
proceeds, whichever is lower) None 5.00% 1.00% None
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Management fees 0.75% 0.75% 0.75% 0.75%
12b-1 Fees** 0.25 1.00 1.00 --
Other Expenses 0.21 0.24 0.25 0.36
Total Portfolio Operating Expenses 1.21% 1.99% 2.00%
1.11%
</TABLE>
*Purchases of Class A shares of $500,000 or more will be
made at net asset
value with no
sales charge, but will be subject to a CDSC of 1.00% on
redemptions made
within 12 months
of purchase.
** Upon conversion of Class B shares to Class A shares, such
shares will no
longer be
subject to a distribution fee. Class C shares do not have a
conversion feature
and, therefore,
are subject to an ongoing distribution fee. As a result,
long-term
shareholders of Class C
shares may pay more than the economic equivalent of the
maximum front-end
sales charge
permitted by the National Association of Securities Dealers,
Inc.
[The last paragraph on page 7 and the first paragraph on
page 8 of the
Prospectus continue to apply]
Example
The following example is intended to assist an investor
in understanding
the various costs that an investor in the Fund will bear
directly or
indirectly. The example assumes payment by the Fund of
operating expenses at
the levels set forth in the table above. See "Purchase of
Shares," "
Redemption of Shares" and "Management of the Fund" in the
Prospectus.
1 Year 3 Years 5 Years 10 Years*
An investor would pay the following expenses on
a $1,000 investment, assuming (1) 5.00% annual
return and (2) redemption at the end of each
period:
Class A $62 $86 $113 $189
Class B 70 92 117 212
Class C 30 63 108 233
Class Y 11 35 61 135
An investor would pay the following expenses on
the same investment, assuming the same
annual return and no redemption:
Class A $62 $86 $113 $189
Class B 20 62 107 212
Class C 20 63 108 233
Class Y 11 35 61 135
* Ten-year figures assume conversion of Class B shares to
Class A shares at
the end of the eighth year following the date of purchase.
[The last paragraph on page 8 of the Prospectus continues to
apply.]
FINANCIAL HIGHLIGHTS
The following information since inception until
December 31, 1996 has
been audited by KPMG Peat Marwick LLP, independent auditors,
whose report
thereon appears in the Fund's annual report dated December
31, l996. The
information for the fiscal year ended December 31, l997 is
unaudited. For
Class A shares the figures set out below include the
operating history of the
Fund as a closed-end fund prior to June 23, l997. Closed-
end funds are not
subject to the same legal requirements as open-end funds,
especially with
respect to liquidity requirements. The total returns noted
for each year may
have been different if the Fund had been an open-end fund
from inception. The
information set out below should be read in conjunction with
the financial
statements and related notes that also appear in the Fund's
Annual Report to
Shareholders, which is incorporated by reference into the
Statement of
Additional Information.
<PAGE>
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of capital stock outstanding
throughout each year:
<TABLE>
<CAPTION>
Class A Shares(1) 1997(2)
1996 1995 1994 1993 1992 1991
1990(3)
============================================================
============================================================
==========
<S> <C>
<C> <C> <C> <C> <C> <C>
<C>
Net Asset Value, Beginning of Year $12.30 $12.15
$11.78 $12.50 $11.49 $10.34 $9.32 $11.12
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Income (Loss) From Operations:
Net investment income 0.04
0.05 0.11 0.05 0.01 0.05 0.13
0.37
Net realized and unrealized gain (loss) 3.36*
2.14 2.31 (0.63) 1.01 1.15 1.82
(1.80)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Total Income (Loss) From Operations 3.40
2.19 2.42 (0.58) 1.02 1.20 1.95
(1.43)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Less Distributions From:
Net investment income (0.03)
(0.04) (0.11) (0.05) (0.01) (0.05) (0.14)
(0.37)
Net realized gains (1.99)
(2.00) (1.94) (0.09) -- -- (0.79)
- --
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Total Distributions (2.02)
(2.04) (2.05) (0.14) (0.01) (0.05) (0.93)
(0.37)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Net Asset Value, End of Year $13.68
$12.30 $12.15 $11.78 $12.50 $11.49 $10.34
$9.32
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Total Return 28.25%
20.56% 18.90% (4.36)% 8.90% 11.71% 22.69%
(12.66)%++
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Net Assets, End of Year (millions) $46
$53 $53 $52 $55 $50 $45
$41
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Ratios to Average Net Assets:
Expenses 1.21%
1.21% 1.22% 1.22% 1.24% 1.36% 1.28%
1.32%+
Net investment income 0.24
0.43 0.84 0.43 0.08 0.45 1.26
3.90+
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Portfolio Turnover Rate 140%
151% 177% 45% 87% 46% 47%
27%
- ------------------------------------------------------------
- ------------------------------------------------------------
- ----------
Average commissions per share paid
on equity transactions(4) $0.05
$0.05 $0.05 -- -- -- --
- --
============================================================
============================================================
==========
</TABLE>
(1) The Fund operated as a closed-end investment company
until June 23, 1997.
As of that date all existing shares were converted to
Class A shares. Closed-end
funds are not subject to the same legal requirements as
open-end funds,
especially with respect to liquidity requirements. The
total returns noted for
each year may have been different if the Fund had been
an open-end fund from
inception. The Fund's total returns while it was a
closed-end fund are based on
net asset value.
(2) Unaudited.
(3) For the period from January 23, 1990 (inception date) to
December 31,
1990.
(4) As of September 1995, the SEC instituted new guidelines
requiring the
disclosure of average commissions per share.
* Amount includes approximately $0.13 per share
attributable to a redemption
fee in effect through December 31, 1996.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
<PAGE>
- ------------------------------------------------------------
- --------------------
Financial Highlights (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of capital stock outstanding
throughout each year:
<TABLE>
<CAPTION>
Class B
Class C Class Y
Shares
Shares Shares
------- --
- ------ ---------
1997(1)
1997(2) 1997(3)
============================================================
====================
<S> <C>
<C> <C>
Net Asset Value, Beginning of Year $13.34
$13.24 $13.87
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (loss) (0.01)
(0.01) 0.01
Net realized and unrealized gain (loss) 2.18
2.27 (0.21)
- ------------------------------------------------------------
- --------------------
Total Income From Operations 2.17
2.26 (0.20)
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income --
- -- (0.04)
Net realized gains (1.99)
(1.99) --
- ------------------------------------------------------------
- --------------------
Total Distributions (1.99)
(1.99) (0.04)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Year $13.52
$13.51 $13.63
- ------------------------------------------------------------
- --------------------
Total Return++ 16.73%
17.53% (1.42)%
- ------------------------------------------------------------
- --------------------
Net Assets, End of Year (000s) $12,685
$2,974 $104,503
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets+:
Expenses 1.99%
2.00% 1.11%
Net investment income (loss) (0.26)
(0.26) 0.58
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 140%
140% 140%
- ------------------------------------------------------------
- --------------------
Average commissions per share paid
on equity transactions $0.05
$0.05 $0.05
============================================================
====================
</TABLE>
(1) For the period from June 25, 1997 (inception date) to
December 31, 1997.
(2) For the period from June 24, 1997 (inception date) to
December 31, 1997.
(3) For the period from October 17, 1997 (inception date) to
December 31,
1997.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
- ------------------------------------------------------------
- --------------------
Tax Information (unaudited)
- ------------------------------------------------------------
- --------------------
The amount of long-term capital gains paid by the Fund
for the fiscal year
ended December 31, 1997 was $3,570,903.
9.56% of ordinary income distribution is designated as
qualifying for the
dividends received deduction available to corporate
shareholders.
PART B
STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information dated June 23, 1997,
filed with Pre-
Effective Amendment No. 1 to the Fund's Registration
Statement on Form N-1A,
is incorporated herein by reference.
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
Supplement dated January 30, 1998
to Statement of Additional Information dated June 23, 1997
Effective January 30, 1998, the name of the Fund has been
changed to Smith
Barney Small Cap Blend Fund, Inc.
The following information supplements the information
set forth in the
Statement of Additional Information in the Section entitled
"Investment
Objective and Management Policies." The following paragraph
is added at the
end of the subsection entitled "Investment Restrictions."
The Fund has adopted a nonfundamental investment policy
prohibiting it
from investing in other registered open-end management
investment companies
and registered unit investment trusts in reliance upon the
provisions of
subparagraphs (G) or (F) of Section 12(d)(1) of the 1940
Act. The foregoing
investment policy does not restrict the Fund from (i)
acquiring securities of
other registered investment companies in connection with a
merger,
consolidation, reorganization, or acquisition of assets, or
(ii) purchasing
the securities of registered closed-end investment
companies, to the extent
permissible under Section 12(d)(1)(G) of the 1940 Act.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
COMMON STOCKS --99.5%
Autos & Transportation -- 4.8%
7,800 Airborne Freight Corp.
$ 484,575
19,900 Avondale Industries, Inc.*
590,781
15,600 Continental Airlines, Inc., Class B
Shares*+ 750,750
4,800 Cummins Engine Co., Inc.+
283,500
9,300 GATX Corp.
674,831
5,700 Intermet Corp.
99,750
16,600 Lear Corp.*
788,500
27,610 MascoTech, Inc.
507,333
16,800 Mesaba Holdings, Inc.*
436,800
14,900 Motive Power Industries, Inc.
346,425
21,000 Navistar International Corp.*
521,062
21,600 Overseas Shipholding Group, Inc.
471,150
18,500 Swift Transportation Co., Inc.*
598,937
13,200 The Timken Co.
453,750
20,000 US Freightways Corp.
650,000
- ------------------------------------------------------------
- --------------------
7,658,144
- ------------------------------------------------------------
- --------------------
Consumer Discretionary -- 19.8%
13,300 A.H. Belo Corp.
746,462
25,260 AccuStaff, Inc.*
580,980
14,000 Advanced Lighting Technologies, Inc.*
266,000
12,700 Alberto Culver Co., Class A Shares
342,900
10,300 Apollo Group, Inc., Class A Shares*
486,675
24,850 Arbor Drugs, Inc.
459,725
26,640 Borders Group, Inc.*
834,165
12,200 The Buckle, Inc.*
417,850
13,300 Caribiner International, Inc.*+
591,850
10,100 Chancellor Media Corp.*
753,712
13,200 CoachUSA, Inc.*
442,200
19,900 CompUSA, Inc.*
616,900
8,090 Computer Learning Centers, Inc.*+
495,512
6,640 Consolidated Graphics, Inc.*
309,590
33,388 Consolidated Products, Inc.*
546,720
16,900 Consolidated Stores Corp.*
742,543
10,600 CORT Business Service Corp.*
422,012
14,500 Data Processing Resources Corp.*
369,750
10,700 Ethan Allen Interiors, Inc.
412,618
25,650 Family Dollar Stores, Inc.
751,865
31,630 Foodmaker, Inc.*
476,426
8,000 Fred Meyer, Inc.*+
291,000
21,300 Furniture Brands International, Inc.*
436,650
23,200 General Nutrition Cos., Inc., Class A
Shares* 788,800
4,700 Herman Miller, Inc.
256,443
14,000 Holophane Corp.*
346,500
3,900 HON Industries, Inc.
230,100
19,485 HSN, Inc.*
1,003,477
12,900 Jones Apparel Group, Inc.*
554,700
19,900 Kellwood Co.
597,000
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Consumer Discretionary -- 19.8% (continued)
10,900 Mail-Well, Inc.*
$ 441,450
18,200 Maytag Corp.
679,087
5,900 McClatchy Newspapers, Inc., Class A
Shares 160,406
10,720 The Men's Wearhouse, Inc.*
372,520
14,500 Meredith Corp.
517,468
26,110 Merrill Corp.
607,057
27,700 Mohawk Industries, Inc.*
607,668
12,100 National Service Industries, Inc.
599,706
17,600 Ogden Corp.
496,100
15,300 Papa John's International, Inc.*+
533,587
11,000 Payless ShoeSource. Inc.*
738,375
19,800 Performance Food Group Co.*
470,250
15,200 Proffitt's, Inc.*
432,250
19,792 Promus Hotel Corp.*
831,264
7,800 Quality Food Centers, Inc.*
522,600
36,160 Rio Hotel & Casino Inc.*
759,360
9,250 Robert Hall International, Inc.*
370,000
18,100 Ross Stores, Inc.
658,387
10,400 St. John's Knits, Inc.
416,000
11,900 StaffMark, Inc.*
376,337
7,100 Starbucks Corp.*
272,462
13,200 Stewart Enterprises, Inc., Class A Shares
615,450
35,340 Stride Rite Corp.
424,080
18,530 U.S. Industries, Inc.
558,216
48,700 U.S. Office Products Co.*
955,757
18,500 Unifi, Inc.
752,718
21,600 Valassis Communications, Inc.*
799,200
16,500 VWR Scientific Products Corp.*
466,125
16,600 West TeleServices Corp.*
199,200
27,235 Wolverine World Wide, Inc.
616,191
- ------------------------------------------------------------
- --------------------
31,820,396
- ------------------------------------------------------------
- --------------------
Consumer Staples -- 2.9%
10,900 Canandaigua Brands, Inc., Class A Shares*
603,587
12,010 Dean Foods Co.
714,595
14,000 The Earthgrains Co.
658,000
14,500 International Multifoods Corp.
410,531
18,600 Interstate Bakeries Corp.+
695,175
16,800 Lance, Inc.
442,050
15,500 Smithfield Foods, Inc.*
511,500
10,600 Suiza Foods Corp.*
631,362
- ------------------------------------------------------------
- --------------------
4,666,800
- ------------------------------------------------------------
- --------------------
Finance -- 16.4%
23,810 A.G. Edwards, Inc.
946,466
8,100 ALBANK Financial Corp.
416,663
10,100 American Bankers Insurance Group, Inc.
463,968
11,800 Associated Bank Corp.
650,475
8,700 Astoria Financial Corp.
485,025
13,200 Bay View Capital Corp.+
478,500
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Finance -- 16.4% (continued)
10,400 Brenton Banks, Inc.
$ 416,000
5,100 CCB Financial Corp.
548,250
4,975 Charter One Financial, Inc.
314,066
10,700 Chartwell Re Corp.
361,125
14,000 City National Corp.
517,125
2,100 CMAC Investment Corp.
126,787
11,900 Community First Bancshares, Inc.
633,675
5,600 Compass Bancshares, Inc.
245,000
23,140 Dime Bancorp, Inc.
699,985
12,200 Enhance Financial Services Group, Inc.
725,900
13,400 Everest Reinsurance Holdings, Inc.
552,750
6,200 Executive Risk, Inc.
432,837
10,600 Financial Security Assurance Holdings,
Ltd.+ 511,450
12,900 The FINOVA Group, Inc.
640,968
13,200 First American Corp.
656,700
1,300 First Empire State Corp.
604,500
4,700 First Virginia Banks, Inc.
242,931
13,300 FIRSTPLUS Financial Group, Inc.*+
510,387
7,600 GBC Bancorp
484,500
14,900 Golden State Bancorp, Inc.*
556,887
18,000 HCC Insurance Holdings, Inc.
382,500
31,520 Hibernia Corp., Class A Shares
592,970
10,550 Liberty Financial Companies, Inc.
398,262
6,700 Life Re Corp.
436,756
15,800 Mercantile Bankshares Corp.
618,175
13,200 Mercury General Corp.
729,300
11,966 Mutual Risk Managment, Ltd.
358,232
18,500 North Fork Bancorp, Inc.
620,906
10,400 ONBANCorp, Inc.
733,200
16,600 Orion Capital Corp.
770,862
14,700 Peoples Heritage Financial Group, Inc.
676,200
7,000 Popular, Inc.
346,500
32,200 Republic Bancorp., Inc.
688,275
14,800 Selective Insurance Group, Inc.
399,600
12,600 Silicon Valley Bancshares*
708,750
26,260 Sovereign Bancorp., Inc.
544,895
9,700 T. Rowe Price Associates, Inc.
609,887
16,900 Trans Financial, Inc.
656,987
23,300 20th Century Industries
605,800
8,100 USBANCORP, Inc.
591,300
10,200 Vesta Insurance Group, Inc.
605,625
5,000 West America Bancorp
511,250
9,300 Wilmington Trust Corp.
580,087
- ------------------------------------------------------------
- --------------------
26,389,239
- ------------------------------------------------------------
- --------------------
Health Care -- 8.6%
4,700 AmeriSource Health Corp., Class A Shares*
273,775
4,950 Bergen Brunswig Corp., Class A Shares+
208,518
35,750 Beverly Enterprises, Inc.*+
464,750
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Health Care -- 8.6% (continued)
12,700 Bindley Wetern Industries, Inc.
$ 392,112
17,900 Biogen, Inc.*
651,112
23,100 Biomet, Inc.
591,937
45,100 Columbia Laboratories, Inc.*+
715,962
17,200 Cooper Companies, Inc.*
703,050
41,100 Creative BioMolecules, Inc.*
303,112
20,900 DePuy, Inc.
600,875
7,600 Dionex Corp.*
381,900
17,800 Dura Pharmaceuticals, Inc.*
816,575
15,500 FPA Medical Management, Inc.*+
288,687
69,280 Gensia Sicor Inc.*
402,690
12,200 Health Care & Retirement Corp.*
491,050
3,100 Health Care COMPARE Corp.*
158,487
6,225 Health Managment Associates, Inc.*
157,181
9,900 Lincare Holdings, Inc.*+
564,300
10,700 MiniMed, Inc.*
415,962
3,966 Paragon Health Network, Inc.*
77,584
23,700 PhyMatrix Corp.*
373,275
11,000 Quintiles Transnational Corp.*+
420,750
19,944 Quorum Health Group, Inc.*
521,037
7,800 Sofamor Danek Group, Inc.*
507,487
9,200 St. Jude Medical, Inc.+
280,600
12,500 Sybron International Corp.*
586,718
15,400 Theragenics Corp.*
554,400
21,933 Total Renal Care Holdings, Inc., Class A
Shares* 603,157
9,900 Trigon Healthcare, Inc.*
258,637
25,100 Watson Pharmaceuticals, Inc.*
814,181
3,600 Wellpoint Health Networks, Inc., Class A
Shares* 152,100
- ------------------------------------------------------------
- --------------------
13,731,961
- ------------------------------------------------------------
- --------------------
Materials & Processing -- 13.3%
21,200 AK Steel Holding Corp.
374,975
15,800 Alumax, Inc.*
537,200
10,400 AptarGroup, Inc.
577,200
14,700 Arden Realty Group, Inc.
452,025
20,600 Avalon Properties, Inc.
637,312
10,600 Bay Apartment Communities, Inc.
413,400
43,790 Bethlehem Steel Corp.*
377,688
13,700 BMC Industries, Inc.
220,912
13,300 Boise Cascade Corp.
402,325
12,900 Bowater, Inc.
573,243
23,810 Coeur D'Alene Mines Corp.
214,290
11,500 Cousins Properties, Inc.
337,093
15,300 Dexter Corp.
660,768
15,400 Ecolab, Inc.
853,737
12,700 Equity Residential Properties Trust
642,143
14,500 Felcor Suite Hotels, Inc.
514,750
15,500 First Industrial Realty Trust, Inc.
559,937
14,700 Glenborough Realty Trust, Inc.
435,487
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Materials & Processing -- 13.3% (continued)
7,300 H.B. Fuller Co.
$ 361,350
10,700 Health Care Property Investors, Inc.
404,593
32,000 Hexel Corp.*
798,000
35,430 International Specialty Products, Inc.
529,235
25,300 Liberty Property Trust
722,631
7,100 Lone Star Industries, Inc.
377,187
41,560 LTV Corp.
405,210
17,800 Lyondell Petrochemical Co.
471,700
16,200 Mack-Cali Realty Corp.
664,200
5,269 Meditrust Cos.
192,977
12,700 Mid-America Apartment Communities, Inc.
362,743
25,800 Nationwide Health Properties, Inc.
657,900
4,700 Olin Corp.
220,312
10,400 OM Group, Inc.
380,900
16,000 Pope & Talbot, Inc.
241,000
30,700 Prime Retail, Inc.
435,556
15,830 Reckson Associates Realty Corp.
401,686
14,900 Regency Realty Corp.
412,543
10,400 Sealed Air Corp.*+
642,200
29,810 Security Capital Pacific Trust+
722,892
7,000 Southdown, Inc.
413,000
10,400 Spieker Properties, Inc.
445,900
23,200 Steel Dynamics, Inc.*
371,200
10,700 USG Corp.*
524,300
8,000 USX-U.S. Steel Group, Inc.
250,000
9,300 Vulcan Materials Co.*
949,762
5,000 Witco Corp.
204,062
- ------------------------------------------------------------
- --------------------
21,347,524
- ------------------------------------------------------------
- --------------------
Oil Integrated - Domestic -- 1.0%
12,700 Murphy Oil Corp.
688,181
6,700 Sun Company, Inc.
281,818
20,100 Valero Energy Corp.
631,893
- ------------------------------------------------------------
- --------------------
1,601,892
- ------------------------------------------------------------
- --------------------
Other Energy -- 4.2%
9,400 Atwood Oceanics, Inc.*
445,325
9,100 BJ Services Co.*
654,631
7,800 Cliffs Drilling Co.*
389,025
21,600 Cross Timbers Oil Co.
538,650
44,400 EEX Corporation
402,375
10,400 Forcenergy, Inc.
272,350
22,400 Nabors Industries, Inc.*
704,200
15,300 Noble Affiliates Inc.
539,325
22,600 Oryx Energy Co.*
576,300
12,100 Pool Energy Services Co.*
269,225
19,900 Seagull Energy Corp.*
410,437
20,590 Swift Energy Co.*
433,676
5,600 Tidewater, Inc.+
308,700
20,600 Veritas DGC, Inc.*
813,700
- ------------------------------------------------------------
- --------------------
6,757,919
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Producer Durables -- 5.5%
9,220 Aeroquip-Vickers, Inc.
$ 452,356
19,600 AGCO Corp.
573,300
300 American Power Conversion Corp.*
7,087
15,300 The B.F. Goodrich Co.
633,993
10,400 Crane Co.
451,100
11,700 Danaher Corp.
738,562
5,900 Flowserve Corp.
164,831
13,300 Gencorp., Inc.
332,500
11,900 Jacobs Engineering Group, Inc.*
301,962
9,300 Kennametal, Inc.
481,856
18,897 Lennar Corp.
407,466
19,900 Mark IV Industries, Inc.
435,312
7,000 Precision Castparts Corp.
422,187
14,300 Robbins & Meyers, Inc.
566,637
7,600 Thiokol Corp.
617,500
14,700 Thomas & Betts Corp.
694,575
17,400 U.S. Home Corp.*
682,950
18,600 Watts Industries, Inc., Class A Shares
526,612
12,900 ZERO Corp.
382,162
- ------------------------------------------------------------
- --------------------
8,872,948
- ------------------------------------------------------------
- --------------------
Technology -- 13.2%
7,600 Advanced Energy Industries, Inc.*
113,525
12,900 Advent Software, Inc.*
369,262
6,100 Aspect Development, Inc.*+
317,200
6,700 Asyst Technologies, Inc.*
145,725
12,700 Avid Technology, Inc.*
339,725
13,400 AVX Corp.
247,062
16,200 Brightpoint, Inc.*+
224,775
15,500 Burr-Brown Corp.*
497,937
31,900 C-Cube Microsystems, Inc.*
520,368
11,900 CellStar Corp.*+
236,512
300 CFM Technologies, Inc.*
4,612
14,000 Ciber, Inc.*
812,000
5,000 Citrix Systems, Inc.*
380,000
14,900 Cognex Corp.*
406,025
9,900 Cohu, Inc.
303,187
19,020 Comdisco, Inc.
635,981
12,900 Computer Horizons Corp.*
580,500
10,600 Comverse Technology, Inc.*
413,400
7,100 Credence Systems Corp.*
210,337
9,900 Davox Corp.*
322,987
19,100 Digital Microwave Corp.*
276,950
28,900 Edify Corp.*
541,875
16,000 Electronics for Imaging, Inc.*
266,000
16,600 Eltron International, Inc.*
502,150
16,200 FORE Systems, Inc.*
247,050
26,400 Gerber Scientific, Inc.
524,700
14,700 Harbinger Corp.*
413,437
23,100 Helix Technology Corp.
450,450
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Technology -- 13.2% (continued)
16,900 Industri-Matematik International Corp.*
$ 498,550
21,200 Iomega Corp.*+
263,675
18,700 Keane, Inc.*
759,687
14,500 Kemet Corp.*
280,937
7,500 KLA-Tencor Corp.*+
289,687
11,880 Legato Systems, Inc.*
522,720
9,900 Micrel, Inc.*
277,200
12,100 Park Electrochemical Corp.
343,337
10,700 Policy Management Systems Corp.*
744,318
9,100 Project Software & Development, Inc.*
213,850
22,300 Quantum Corp.*+
447,393
10,200 REMEC, Inc.*
229,500
5,100 Sanmina Corp.*
345,525
7,100 Sapient Corp.*
434,875
12,900 SCI Systems, Inc.*+
561,956
14,000 SMART Modular Technologies, Inc.*
322,000
9,700 SpeedFam International, Inc.*
257,050
7,000 Sterling Commerce, Inc.*
269,062
12,200 Storage Technology Corp., Class A
Shares*+ 755,637
25,700 SunGard Data Systems, Inc.*
796,700
15,400 Systems & Computer Tech Corp.*
764,225
13,300 Tech Data Corp.*+
517,037
7,300 Tekelec*
222,650
10,600 Unitrode Corp.*
227,900
25,750 VLSI Technology, Inc.*
608,343
- ------------------------------------------------------------
- --------------------
21,257,546
- ------------------------------------------------------------
- --------------------
Utilities -- 9.8%
20,600 Boston Edison Co.
780,225
20,600 Calenergy Co., Inc.*
592,250
43,000 Calpine Corp.
639,625
18,000 Century Telephone Enterprises, Inc.
896,625
9,000 CILCORP, Inc.
439,875
15,800 CoreComm, Inc.*
159,975
27,310 DPL, Inc.
785,162
16,900 DQE, Inc.
593,612
54,000 El Paso Electric Co.*
394,875
5,000 EXCEL Communications, Inc.*+
72,500
15,300 IGC Communications, Inc.*+
416,925
22,500 Illinova Corp.
606,093
8,300 Intermedia Communications, Inc.*+
504,225
5,600 IPALCO Enterprises, Inc.
234,850
41,981 LCI International, Inc.*+
1,290,915
18,100 MAPCO, Inc.
837,125
19,900 MCN Energy Group, Inc.
803,462
13,400 MDU Resources Group, Inc.
423,775
16,900 National Fuel Gas Co.
822,818
2,100 New Century Energies, Inc.
100,668
15,200 NIPSCO Industries, Inc.
751,450
400 Northeast Utilities*
4,725
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
December 31, 1997
- ------------------------------------------------------------
- --------------------
SHARES SECURITY
VALUE
============================================================
====================
Utilities -- 9.8% (continued)
22,600 Pinnacle West Capital Corp.
$ 957,675
10,300 SCANA Corp.
308,356
13,400 Sierra Pacific Resources
502,500
5,600 Southern New England Telecommunications
Corp.+ 281,750
28,410 TECO Energy, Inc.
799,031
4,700 Telephone & Data Systems, Inc.
218,843
19,500 Washington Gas Light Co.
603,281
- ------------------------------------------------------------
- --------------------
15,823,191
- ------------------------------------------------------------
- --------------------
TOTAL COMMON STOCKS
(Cost-- $150,340,370)
159,927,560
============================================================
====================
WARRANT -- 0.0%
Finance -- 0.0%
446 Security Capital Group, Inc., Expires
9/18/98*
(Cost-- $2,920)
2,341
============================================================
====================
FACE
AMOUNT SECURITY
VALUE
============================================================
====================
U.S. TREASURY BILLS -- 0.5%
$805,000 U.S. Treasury Bills due 1/22/98
(Cost-- $802,572)
802,572
============================================================
====================
REPURCHASE AGREEMENT -- 0.0%
17,000 Goldman, Sachs & Co., 6.348% due 1/2/98;
Proceeds at maturity -- $17,006; (Fully
collateralized
by U.S. Treasury Notes, 5.625% due
12/31/99;
Market value-- $17,347) (Cost-- $17,000)
17,000
============================================================
====================
TOTAL INVESTMENTS -- 100%
(Cost-- $151,162,862**)
$160,749,473
============================================================
====================
* Non-income producing security.
+ A portion of the security is on loan.
** Aggregate cost for Federal income tax purposes is
substantially the same.
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Statement of Assets and Liabilities (unaudited)
December 31, 1997
- ------------------------------------------------------------
- --------------------
ASSETS:
Investments, at value (Cost -- $151,162,862)
$160,749,473
Cash and cash equivalents (Note 7)
13,339,377
Receivable for securities sold
7,771,300
Receivable for Fund shares sold
3,201,311
Dividends and interest receivable
133,815
Other assets
243,384
- ------------------------------------------------------------
- --------------------
Total Assets
185,438,660
- ------------------------------------------------------------
- --------------------
LIABILITIES:
Payable for securities loaned (Note 7)
13,339,253
Payable for securities purchased
5,365,260
Income dividend payable
392,566
Investment advisory fees payable
79,872
Payable for Fund shares purchased
26,323
Investment administrative fees payable
12,678
Distribution fees payable
5,996
Accrued expenses
18,788
- ------------------------------------------------------------
- --------------------
Total Liabilities
19,240,736
- ------------------------------------------------------------
- --------------------
Total Net Assets
$166,197,924
============================================================
====================
NET ASSETS:
Par value of capital shares
$12,191
Capital paid in excess of par value
154,252,136
Overdistributed net investment income
(237,242)
Accumulated net realized gain on security transactions
and futures contracts
2,584,228
Net unrealized appreciation of investments
9,586,611
- ------------------------------------------------------------
- --------------------
Total Net Assets
$166,197,924
============================================================
====================
Shares Outstanding:
Class A
3,366,437
- ------------------------------------------------------------
- --------------------
Class B
938,611
- ------------------------------------------------------------
- --------------------
Class C
220,182
- ------------------------------------------------------------
- --------------------
Class Y
7,665,867
- ------------------------------------------------------------
- --------------------
Net Asset Value:
Class A (and redemption price)
$13.68
- ------------------------------------------------------------
- --------------------
Class B *
$13.52
- ------------------------------------------------------------
- --------------------
Class C **
$13.51
- ------------------------------------------------------------
- --------------------
Class Y (and redemption price)
$13.63
- ------------------------------------------------------------
- --------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 5.26% of net asset value per share)
$14.40
============================================================
====================
* Redemption price is NAV of Class B shares reduced by a
5.00% CDSC if
shares are redeemed within one year from initial purchase
(See Note 2).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if
shares are redeemed within the first year purchase.
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Statement of Operations (unaudited) For the Year
Ended December 31, 1997
- ------------------------------------------------------------
- --------------------
INVESTMENT INCOME:
Dividends
$ 766,809
Interest
197,117
- ------------------------------------------------------------
- --------------------
Total Investment Income
963,926
- ------------------------------------------------------------
- --------------------
EXPENSES:
Investment advisory fees (Note 2)
439,687
Administration fees (Note 2)
102,195
Distribution fees
93,843
Shareholder and system servicing fees
45,194
Custody
39,961
Audit and legal
26,983
Shareholder communications
24,933
Directors' fees
4,986
Registration
3,489
Other
9,723
- ------------------------------------------------------------
- --------------------
Total Expenses
790,994
- ------------------------------------------------------------
- --------------------
Net Investment Income
172,932
- ------------------------------------------------------------
- --------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 5):
Realized Gain From:
Security transactions (excluding short-term securities)
9,366,122
Futures contracts
224,698
- ------------------------------------------------------------
- --------------------
Net Realized Gain
9,590,820
- ------------------------------------------------------------
- --------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of the year
4,397,795
End of year
9,586,611
- ------------------------------------------------------------
- --------------------
Increase in Net Unrealized Appreciation
5,188,816
- ------------------------------------------------------------
- --------------------
Net Gain on Investments and Futures Contracts
14,779,636
- ------------------------------------------------------------
- --------------------
Increase in Net Assets From Operations
$14,952,568
============================================================
====================
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets (unaudited) For the
Year Ended December 31,
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
1997 1996
============================================================
=========================================
<S>
<C> <C>
OPERATIONS:
Net investment income
$ 172,932 $ 235,743
Net realized gain
9,590,820 8,411,575
Increase in net unrealized appreciation
5,188,816 789,945
- ------------------------------------------------------------
- -----------------------------------------
Increase in Net Assets From Operations
14,952,568 9,437,263
- ------------------------------------------------------------
- -----------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
(430,451) (193,543)
Net realized gains
(7,640,963) (8,604,302)
- ------------------------------------------------------------
- -----------------------------------------
Decrease in Net Assets From
Distributions to Shareholders
(8,071,414) (8,797,845)
- ------------------------------------------------------------
- -----------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
127,943,629 --
Net asset value of shares issued for reinvestment of
dividends 2,945,999 --
Cost of shares reacquired
(24,484,001) (274,104)+
- ------------------------------------------------------------
- -----------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions
106,405,627 (274,104)
- ------------------------------------------------------------
- -----------------------------------------
Increase in Net Assets
113,286,781 365,314
NET ASSETS:
Beginning of year
52,911,143 52,545,829
- ------------------------------------------------------------
- -----------------------------------------
End of year*
$166,197,924 $52,911,143
============================================================
=========================================
* Includes undistributed (overdistributed) net investment
income of: $(237,242) $20,277
============================================================
=========================================
</TABLE>
+ Represents repurchase of 24,000 shares during the Fund's
buyback period
which ended December 31, 1996.
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- --------------------
1. Significant Accounting Policies
The Smith Barney Small Cap Blend Fund, Inc. ("Fund"),
formerly known as the
Smith Barney Disciplined Small Cap Fund, Inc., a Maryland
corporation, is
registered under the Investment Company Act of 1940, as
amended. On June 23,
1997, the Fund became a diversified, open-end management
investment company.
Prior to that date the Fund was a non-diversified, closed-
end management
investment company and its shares were traded on the
American Stock Exchange.
The significant accounting policies consistently followed by
the Fund are: (a)
security transactions are accounted for on trade date; (b)
securities traded on
a national securities exchange or on the Nasdaq National
Market System are
valued at closing prices on such exchange or market;
securities for which no
sales prices are reported are valued at the mean between the
most recently
quoted bid and ask prices; (c) securities maturing within 60
days or less are
valued at cost plus accreted discount, or minus amortized
premium, which
approximates value; (d) dividend income is recorded on the
ex-dividend date and
interest income is recorded on the accrual basis; (e)
dividends and
distributions to shareholders are recorded on the ex-
dividend date; (f) gains or
losses on the sale of securities are calculated by using the
specific
identification method; (g) direct expenses are charged to
each class; management
fees and general fund expenses are allocated on the basis of
relative net
assets; (h) the Fund intends to comply with the applicable
provisions of the
Internal Revenue Code of 1986, as amended, pertaining to
regulated investment
companies and to make distributions of taxable income
sufficient to relieve it
from substantially all Federal income and excise taxes; (i)
the character of
income and gains distributed are determined in accordance
with income tax
regulations which may differ from generally accepted
accounting principles; and
(j) estimates and assumptions are required to be made
regarding assets, lia
bilities and changes in net assets resulting from operations
when financial
statements are prepared. Changes in the economic
environment, financial markets
and any other parameters used in determining these estimates
could cause actual
results to differ.
2. Management Agreement and
Transactions with
Affiliated Persons
Travelers Investment Management Company ("TIMCO"), a
subsidiary of Salomon Smith
Barney Holdings Inc. ("SSBH"), acts as investment manager to
the Fund. The Fund
pays TIMCO a fee calculated at the annual rate of 0.65% of
the Fund's average
daily net assets. Prior to June 23, 1997, the investment
management fee paid was
0.75%. This fee is calculated daily and paid monthly.
Mutual Management Corp. ("MMC"), formerly known as Smith
Barney Mutual Funds
Management Inc., another subsidiary of SSBH, acts as the
Fund's administrator.
As compensation for its services, the Fund also pays MMC a
fee calculated at the
annual rate of 0.10% of the Fund's average daily net assets.
Prior to June 23,
1997, the Fund paid an administration fee of 0.25%. This fee
is calculated daily
and paid monthly.
For the year ended December 31, 1997, Smith Barney Inc.
("SB"), also a
subsidiary of SSBH, was paid brokerage commissions of $9,374
and sales charges
of approximately $173,000 on sales of the Fund's Class A
shares.
There is a contingent deferred sales charge ("CDSC") of
5.00% on Class B shares,
which applies if redemption occurs within one year from
initial purchase and
declines thereafter by 1.00% per year until no CDSC is
incurred. Class C shares
have a 1.00% CDSC, which applies if redemption occurs
<PAGE>
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
within the first year of purchase. In addition, Class A
shares also have a 1.00%
CDSC, which applies if redemption occurs within the first
year of purchase. This
CDSC only applies to those purchases of Class A shares
which, when combined with
current holdings of Class A shares, equal or exceed $500,000
in the aggregate.
These purchases do not incur an initial sales charge. For
the year ended
December 31, 1997, CDSCs paid to SB were:
Class A Class B
============================================================
====================
CDSCs
$328,000 $1,000
============================================================
====================
In addition, shareholders who held shares at the time of
conversion to open-end
status on June 23, 1997, were subject to a 2.00% redemption
fee until the end
of 1997. For the year ended December 31, 1997, redemption
fees paid to the Fund
were approximately $452,851 for Class A shares.
Pursuant to a Distribution Plan, which became effective on
June 23, 1997, the
Fund pays a service fee with respect to its Class A, B and C
shares calculated
at the annual rate of 0.25% of the average daily net assets
of each respective
class. In addition, the Fund also pays a distribution fee
with respect to Class
B and C shares calculated at the annual rate of 0.75% of the
average daily net
assets of each class. For the year ended December 31, 1997,
total Distribution
Plan fees were as follows:
Class A
Class B Class C
============================================================
====================
Distribution Plan Fees $64,196
$24,677 $4,970
============================================================
====================
All officers and two directors of the Fund are employees of
SB.
3. Investments
For the year ended December 31, 1997, the aggregate cost of
purchases and
proceeds from sales of investments (including maturities,
but excluding
short-term securities) were as follows:
============================================================
====================
Purchases
$182,593,599
- ------------------------------------------------------------
- --------------------
Sales
90,018,028
============================================================
====================
At December 31, 1997, aggregate gross unrealized
appreciation and depreciation
of investments for Federal income tax purposes were
substantially as follows:
============================================================
====================
Gross unrealized appreciation
$13,135,253
Gross unrealized depreciation
(3,548,642)
- ------------------------------------------------------------
- --------------------
Net unrealized appreciation
$ 9,586,611
============================================================
====================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of)
U.S. government
securities from banks and securities dealers subject to
agreements to resell the
securities to the sellers at a future date (generally, the
next business day) at
an agreed-upon higher repurchase price. The Fund requires
daily maintenance of
the market value of the collateral in amounts at least equal
to the repurchase
price.
5. Futures Contracts
Initial margin deposits made upon entering into futures
contracts are recognized
as assets. Securities equal to the initial margin amount are
segregated by the
custodian in the name of the broker. Additional securities
are also segregated
up to the current market value of the futures contract.
During the period the
futures contract is open, changes in the value of the
contract are recognized as
unrealized gains or losses by "marking to market" on a daily
basis to reflect
the market value of the contract at the end of each day's
trading. Variation
margin payments are received or made and recognized as
assets due from or
liabilities due to the broker, depending upon whether
unrealized gains or losses
are incurred. When the contract is closed, the Fund records
a realized gain or
loss equal to the difference between the proceeds from (or
cost of) the closing
transaction and the Fund's basis in the contract. The Fund
enters into such
contracts to hedge a portion of its portfolio.
<PAGE>
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
The Fund bears the market risk that arises from changes in
the value of the
financial instruments and securities indices (futures
contracts).
At December 31, 1997, the Fund had no open futures
contracts.
6. Option Contracts
Premiums paid when put or call options are purchased by the
Fund, represent
investments, which are marked-to-market daily. When a
purchased option expires,
the Fund will realize a loss in the amount of the premium
paid. When the Fund
enters into a closing sales transaction, the Fund will
realize a gain or loss
depending on whether the proceeds from the closing sales
transaction are greater
or less than the premium paid for the option. When the Fund
exercises a put
option, it will realize a gain or loss from the sale of the
underlying security
and the proceeds from such sale will be decreased by the
premium originally
paid. When the Fund exercises a call option, the cost of the
security which the
Fund purchases upon exercise will be increased by the
premium originally paid.
At December 31, 1997, the Fund had no open purchased call or
put option
contracts.
7. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the
custodian may lend
securities owned by the Fund to brokers, dealers and other
financial
organizations, and receives a lenders fee. Fees earned by
the Fund on securities
lending are recorded in interest income. Loans of securities
by the Fund are
collateralized by cash, U.S. government securities or high
quality money market
instruments that are maintained at all times in an amount at
least equal to the
current market value of the securities loaned, plus a margin
which may
vary between 2% and 5% depending on the type of securities
loaned. The custodian
establishes and maintains the collateral in a segregated
account. The Fund maintains
exposure for the risk of any losses in the investment of
amounts received as collateral.
At December 31, 1997, the Fund loaned common stocks having a
value of
$12,965,539 and received cash collateral of $13,339,253 for
the loan.
8. Capital Shares
At December 31, 1997, the Fund had 400 million shares of
capital stock
authorized with a par value of $0.001 per share. The Fund
has the ability to
issue multiple classes of shares. Each share of a class
represents an identical
interest in the Fund and has the same rights, except that
each class bears
certain expenses specifically related to the distribution of
its shares.
As of December 31, 1997, total paid-in capital amounted to
the following for
each class:
Amount
============================================================
====================
Class A
$35,975,755
- ------------------------------------------------------------
- --------------------
Class B
13,319,627
- ------------------------------------------------------------
- --------------------
Class C
3,008,981
- ------------------------------------------------------------
- --------------------
Class Y
101,959,964
============================================================
====================
<PAGE>
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Transactions in shares of each class were as follows:
Year Ended
December 31, 1997
-------------
- --------------------
Shares
Amount
============================================================
====================
Class A*
Shares sold 674,438
$9,600,636
Shares issued on reinvestment 158,633
2,101,518
Shares redeemed (net of redemption fee) (1,767,584)
(23,585,099)
- ------------------------------------------------------------
- --------------------
Net Decrease (934,513)
$(11,882,945)
============================================================
====================
Class B**
Shares sold 908,111
$12,937,997
Shares issued on reinvestment 57,663
755,966
Shares redeemed (27,163)
(374,336)
- ------------------------------------------------------------
- --------------------
Net Increase 938,611
$13,319,627
============================================================
====================
Class C+
Shares sold 241,885
$3,361,719
Shares issued on reinvestment 6,752
88,515
Shares redeemed (28,455)
(441,253)
- ------------------------------------------------------------
- --------------------
Net Increase 220,182
$3,008,981
============================================================
====================
Class Y++
Shares sold 7,672,217
$102,043,277
Shares issued on reinvestment --
- --
Shares redeemed (6,350)
(83,313)
- ------------------------------------------------------------
- --------------------
Net Increase 7,665,867
$101,959,964
============================================================
====================
* For the period from June 23, 1997 (date of conversion to
open-end fund) to December 31, 1997.
** For the period from June 25, 1997 (inception date) to
December 31, 1997.
+ For the period from June 24, 1997 (inception date) to
December 31, 1997.
++ For the period from October 17, 1997 (inception date) to
December 31,
1997.
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
PART C
OTHER INFORMATION
Item 24.
Financial Statements and Exhibits
(a) Financial Statements
Location In:
Part A
Part B
Unaudited
Financial
Statements
Statement of Assets and
Liabilities
_
*
Statement of Changes in
Net Assets
_
*
Statement of Operations
_
*
Notes to Financial
Statements
_
*
Supplementary Information
_
*
* Unaudited financial statements for the period ended
December 31, 1997.
All other statements and schedules are omitted because they
are not applicable
or the required information will be shown in the financial
statements or notes
thereto.
(b) Exhibits:
All references are to Pre-Effective No. 1 to the
Registrant's registration
statement on Form N-1A as filed with the SEC on June 17,
1997 ("Pre-Effective
Amendment No. 1"). (File Nos. 333-25499 and 811-5928)
1. Amended and Restated Articles of Incorporation dated June
16, 1997 are
incorporated by reference to Pre-Effective Amendment No. 1
2. Registrant's By-Laws are incorporated by reference to Pre-
Effective
Amendment No. 1
3. Not applicable
Not applicable
4. Registrant's form of Stock Certificate for Class Z is
incorporated by
reference to Pre-Effective Amendment No. 1
5. Investment Advisory Agreement dated June 23, 1997,
between the Registrant
on behalf of Smith Barney Disciplined Small Cap Fund, Inc.,
and Travelers
Investment Management Company is incorporated by reference
to Pre-Effective
Amendment No. 1.
6. Form of Distribution Agreement between the Registrant on
behalf of Smith
Barney Disciplined Small Cap Fund, Inc., and Smith Barney
Inc., is
incorporated by reference to Pre-Effective Amendment No.
1.
7. Not applicable
Not applicable
8. Form of Custodian Services Agreement between the
Registrant on behalf of
Smith Barney Disciplined Small Cap Fund Inc., and PNC Bank,
National
Association is incorporated by reference to Pre-Effective
Amendment No. 1.
9. (a) Form of Transfer Agency Agreement between the
Registrant on behalf of
Smith Barney Disciplined Small Cap Fund, Inc., and First
Data Investor
Services Group, Inc. is incorporated by reference to Pre-
Effective Amendment
No. 1.
(b) Amended Administration Agreement dated June 23, 1997,
between the
Registrant and Mutual Management Corp. (f/k/a Smith Barney
Mutual Funds
Management Inc.,) is incorporated by reference to Pre-
Effective Amendment No.
1.
10. Opinion of Sullivan and Cromwell dated June 13, 1997 is
incorporated by
reference to Pre-Effective Amendment No. 1.
11.
Consent of Independent Accountants is filed herewith
12. Inapplicable
Inapplicable
13. Not applicable
Not applicable
14. Not applicable
Not applicable
15. Services and Distribution plan pursuant to Rule 12b-1
is incorporated by
reference to Pre-Effective Amendment No. 1.
16. Performance Data is incorporated by reference to the
Fund's Registration
Statement on Form N-1A filed on April 21, 1997
17. Financial Data Schedule is filed herewith
18. Form of Rule 18f-3 Plan of the Registrant is
incorporated by reference to
the Pre-Effective Amendment No. 1.
Item 25. Persons Controlled by or Under Common Control with
Registrant
The Registrant is not controlled directly or indirectly by
any person.
Information regarding the Registrant's institutional manager
is set forth
under the caption "Management of the Fund" in the Prospectus
included in Part
A of this Registration Statement on Form N-1A.
Item 26. Number of Holders of Securities
Number of Record Holders as of January 20, 1998
Title of Class
Common Stock par value
$.001 per share Class A 1880 Class B 1457
Class C 347
Class Y 5
Item 27. Indemnification
Reference is made to Article IX of Registrant's Articles of
Incorporation for
a complete statement of its terms.
Item 28. Business and other Connections of the Investment
Adviser.
Travelers Investment Management Company ("TIMCO") (the
"Adviser") serves as
the investment adviser for the Fund pursuant to a written
agreement dated June
23, 1997 (the "Advisory Agreement"). TIMCO was incorporated
on August 31,
1967 under the laws of the State of Connecticut. TIMCO is a
wholly owned
subsidiary of Salomon Smith Barney Holdings Inc.
("Holdings") which in turn is
a wholly owned subsidiary of Travelers Group Inc. TIMCO is
registered as an
investment adviser under the Investment Advisers Act of 1940
(the "Advisers
Act") since 1971 and has, through its predecessors, been in
the investment
counseling business since 1967. The list required by this
Item 28 of officers
and directors of TIMCO together with information as to any
other business,
profession, vocation or employment of a substantial nature
engaged in by such
officers and directors during the past two fiscal years, is
incorporated by
reference to Schedules A and D of FORM ADV filed by SBA
pursuant to the
Advisers Act (SEC File No. 801-07212).
Item 29. Principal Underwriters
Smith Barney Inc. ("Smith Barney") currently acts as
distributor for
Consulting Group Capital Markets Funds; Global Horizons
Investment Series
(Cayman Islands); Greenwich Street California Municipal Fund
Inc.; Greenwich
Street Municipal Fund Inc. ; Greenwich Street Series Fund;
High Income
Opportunity Fund Inc.; The Italy Fund Inc.; Managed High
Income Portfolio
Inc.; Managed Municipals Portfolio II Inc.; Managed
Municipals Portfolio Inc.;
Municipal High Income Fund Inc.; Puerto Rico Daily Liquidity
Fund Inc.; Smith
Barney Adjustable Rate Government Income Fund; Smith Barney
Aggressive Growth
Fund Inc.; Smith Barney Appreciation Fund Inc.; Smith Barney
Arizona
Municipals Fund Inc.; Smith Barney California Municipals
Fund Inc.; Smith
Barney Concert Series Inc.; Smith Barney Disciplined Small
Cap Fund, Inc.;
Smith Barney Equity Funds; Smith Barney Fundamental Value
Fund Inc.; Smith
Barney Funds, Inc.; Smith Barney Income Funds; Smith Barney
Income Trust;
Smith Barney Institutional Cash Management Fund, Inc.; Smith
Barney
Intermediate Municipal Fund, Inc.; Smith Barney Investment
Funds Inc.; Smith
Barney Investment Trust; Smith Barney Large Capitalization
Growth Fund; Smith
Barney Managed Governments Fund Inc.; Smith Barney Managed
Municipals Fund
Inc.; Smith Barney Massachusetts Municipals Fund; Smith
Barney Money Funds,
Inc.; Smith Barney Muni Funds; Smith Barney Municipal Fund,
Inc.; Smith Barney
Municipal Money Market Fund, Inc.; Smith Barney Natural
Resources Fund Inc.;
Smith Barney New Jersey Municipals Fund Inc.; Smith Barney
Oregon Municipals
Fund Inc.; Smith Barney Principal Return Fund; Smith Barney
Telecommunications
Trust; Smith Barney Variable Account Funds; Smith Barney
World Funds, Inc.;
Smith Barney Worldwide Special Fund; N.V. (Netherlands
Antilles) Travelers
Series Fund Inc.; The USA High Yield Fund; N.V. Worldwide
Securities Limited
(Bermuda); Zenix Income Fund Inc. and various series of unit
investment
trusts. Smith Barney is a wholly owned subsidiary of
Holdings. On June 1,
1994, Smith Barney changed its name from Smith Barney
Shearson Inc. to its
current name. The information required by this Item 29 with
respect to each
director, officer and partner of Smith Barney is
incorporated by reference to
Schedule A of Form BD filed
by Smith Barney pursuant to the Securities Exchange Act of
1934 (SEC File No.
8-8177)
Item 30. Location of Accounts and Records
All accounts, books and other documents of Registrant are
maintained at the
offices of:
(1) TIMCO
One Tower Square
Hartford, Connecticut 06183
(Records relating to its function as Registrant's
investment
adviser)
(2) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, Pennsylvania 19103
(Records relating to its function as Registrant's
custodian)
(3) First Data Investor Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
(Records relating to its function as Registrant's
transfer agent)
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes to furnish to each
person to whom a
Prospectus of any series of the Registrant is delivered a
copy of the
Registrant's latest annual report, upon request and without
charge.
485 (b) Certification
The Registrant hereby certifies that it meets all
requirements for
effectiveness pursuant to Rule 485(b) under the Securities
Act of 1933, as
amended.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, and
the Investment Company Act of 1940, as amended, the
Registrant, Smith Barney
Disciplined Small Cap Fund, Inc., has duly caused this Post-
Effective
Amendment No. 1 to the Registration Statement to be signed
on its behalf by
the undersigned, thereunto duly authorized, in the City of
New York, State of
New York on the 30th day of January, 1998.
SMITH BARNEY DISCIPLINED SMALL CAP FUND, INC.
By: /s/ Heath B. McLendon
Heath B. McLendon
President
As required by the Securities Act of 1933, as amended,
this Registration
Statement has been signed by the following persons in the
capacities and on
the dates indicated.
Signature Title
Date
/s/Heath B. McLendon President, Chairman of the Board
and
01/30/98
Heath B. McLendon Chief Executive Officer
/s/Lewis E. Daidone Senior Vice President and
Treasurer
01/30/98
Lewis E. Daidone Chief Financial and
Accounting Officer
/s/ Bruce D. Sargent* Director
01/30/98
Bruce D. Sargent
/s/ Donald R. Foley* Director
01/30/98
Donald R. Foley
/s/ Paul Hardin* Director
01/30/98
Paul Hardin
/s/ Roderick C. Rasmussen* Director
01/30/98
Roderick C. Rasmussen
/s/ John P. Toolan* Director
01/30/98
John P. Toolan
*By : /s/ Heath B. McLendon
Heath B. McLendon
Attorney-in-Fact, pursuant to Power of Attorney
previously filed.
EXHIBITS
Exhibit No.
1. KPMG's Consent
2. Financial Data Schedule
3. Cover Letter to SEC
Independent Auditors' Consent
To the Shareholders and Board of Directors
of Smith Barney Small Cap Blend Fund, Inc.:
(formerly known as Smith Barney Disciplined
Small Cap Fund, Inc.)
We consent to the reference to our Firm under the heading "Financial
Highlights" in the Supplement dated January 30, 1998 to the Prospectus dated
June 23, 1997.
KPMG Peat Marwick LLP
New York, New York
January 30, 1998
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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