Schedule 14A Information
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/X/ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Salomon Brothers Series Funds Inc
(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 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it is determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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 statements
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Salomon Brothers New York Municipal Bond Fund
7 World Trade Center, New York, New York 10048
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
March __, 1997
To the Stockholders:
Notice is hereby given that a Special Meeting (the "Meeting") of
Stockholders of Salomon Brothers New York Municipal Bond Fund (the "Fund"), a
series of Salomon Brothers Series Funds Inc, will be held at 7 World Trade
Center, 2nd Floor Auditorium, New York, New York on April 29, ,1997 at 4
p.m., New York time, for the following purposes:
(1) To consider and act upon a proposal to liquidate the Salomon Brothers
New York Municipal Bond Fund; and
(2) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The close of business on March 10, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote
at the Meeting or any adjournment thereof.
By Order of the Board of Directors,
JENNIFER G. MUZZEY
Secretary
TO AVOID UNNECESSARY EXPENSE OR FURTHER SOLICITATION, WE URGE YOU to
indicate voting instructions on the enclosed proxy, date and sign it
promptly in the envelope provided, no matter how large or small your
holdings may be.
<PAGE>
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in
the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
Registration Valid Signature
------------ ---------------
Corporate Accounts
- ------------------
(1) ABC Corp. . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp. . . . . . . . . . . . John Doe c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan . John Doe, Trustee
Trust Accounts
- --------------
(1) ABC Trust . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee . . . . . Jane B. Doe u/t/d 12/28/78
Custodial or Estate Accounts
- ----------------------------
(1) John B. Smith, Cust. . . . . . John B. Smith f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith . . . . . . . . . John B. Smith, Jr., Executor
<PAGE>
Salomon Brothers New York Municipal Bond Fund
7 World Trade Center, New York, New York 10048
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Salomon Brothers Series Funds Inc (the "Company")
of proxies to be used at a special meeting (the "Meeting") of stockholders of
Salomon Brothers New York Municipal Bond Fund (the "Fund") to be held at 7
World Trade Center, New York, New York, on April 29, 1997 at 4 p.m., New York
time (and at any adjournment or adjournments thereof). This proxy statement
and the accompanying form of proxy are first being mailed to stockholders on
or about March __, 1997. Stockholders who execute proxies retain the right to
revoke them in person at the Meeting or by written notice received by the
Secretary of the Company at any time before they are voted. Unrevoked proxies
will be voted in accordance with the specifications thereon and, unless
specified to the contrary, will be voted FOR Proposal 1. The close of
business on March 10, 1997 has been fixed as the record date (the "Record
Date") for the determination of stockholders entitled to notice of and to
vote at the Meeting. Each stockholder is entitled to one vote for each full
share and an appropriate fraction of a vote for each fractional share held.
For purposes of the proposal to be considered at the Meeting, all classes of
shares will vote as a single class. On March 10, 1997, there were
shares of the Fund's Capital Stock issued and outstanding.
In accordance with the Company's Charter and By-Laws, a quorum is
constituted by the presence in person or by proxy of the holders of record of
one-third of the outstanding shares of Capital Stock of the Fund entitled to
vote at the Meeting (without regard to class). In the event that a quorum is
not present at the Meeting, or in the event that a quorum is present but
sufficient votes to approve any of the proposals are not received, the
persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require
the affirmative vote of a majority of those shares represented at the Meeting
in person or by proxy. The persons named as proxies will vote those proxies
which they are entitled to vote FOR or AGAINST any such proposal to adjourn
to another date in their discretion. A stockholder vote may be taken on one
or more proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received for approval. Abstentions and Broker Non-
Votes do not count as votes cast with respect to any proposal. With respect
to a proposal requiring the affirmative vote of a majority of the outstanding
shares of Capital Stock, abstentions and Broker Non-Votes are effectively
votes against such proposal. Broker Non-Votes are shares held in the name of
a broker or nominee for which an executed proxy is received by the Fund, but
are not voted on the proposal because voting instructions have not been
received from the beneficial owners or persons entitled to vote and the
broker or nominee does not have discretionary voting power.
<PAGE>
Salomon Brothers Asset Management Inc ("SBAM"), whose principal business
address is 7 World Trade Center, New York, New York 10048, is the Fund's
investment manager. Investors Bank & Trust Company ("IBT"), located at 89
South Street, Boston, Massachusetts 02111, is the Fund's administrator.
Proposal 1: Approval of the Liquidation of the Salomon Brothers
New York Municipal Bond Fund
On behalf of the Fund, the Company's manager and principal underwriter,
SBAM and Salomon Brothers Inc ("SBI"), have engaged in various marketing
efforts to increase the size of the Fund in order to make it a desirable
investment vehicle for stockholders and a sound business proposition for SBAM
and SBI. Generally, as the asset size of a fund grows, the fund benefits from
the economies of scale involved with spreading the fund's fixed expenses for,
among other things, transfer agency services, custodian services and
accounting services over a greater amount of assets. Without growth of
assets, such expenses can diminish significantly or eradicate a fund's
investment return. The following table sets forth the net assets and net
asset value per share of each class of the Fund's shares as of ,
1997:
<TABLE>
<CAPTION>
Net Assets Net Asset Value per Share
---------- -------------------------
<S> <C> <C>
Class A
B
C
O
</TABLE>
At this level, the Fund's actual operating expenses would have a significant
adverse affect on the Fund's performance. For example, for the year ended
December 31, 1996, the ratio of the Fund's total expenses to average net
assets, with and without SBAM's waivers and expense reimbursements referred
to below, and the total return (taking into account SBAM's waivers and
reimbursements) was as follows:
<PAGE>
<TABLE>
<CAPTION>
Expense Ratio Expense Ratio Total
without reimbursement with reimbursement Return
--------------------- ------------------ ------
<S> <C> <C> <C>
Class A 1.89% .75% 3.0%
B 2.64% 1.50% 2.3%
C 2.64% 1.50% 2.3%
O 1.65% .50% 3.4%
</TABLE>
In an effort to avoid the impact of such expense ratios on investors,
which would have significantly reduced total returns, SBAM has waived its
management fees attributable to the Fund and voluntarily has borne many of
the Fund's expenses.
SBAM's and SBI's efforts to market the Fund have not produced
satisfactory results in the form of growth of assets. For example, in
February of 1995, in an effort to attract more investment dollars to the Fund
and facilitate distribution of the Fund's shares by offering the investing
public different purchasing options for shares of the Fund, a multiple
pricing system was implemented. Since adoption of the multiple pricing
system, however, the Fund's net assets have not grown appreciably. SBAM
believes that this is due to several factors, including the relatively small
size of assets when the multiple pricing system was adopted, making the Fund
more difficult to market than its competitors, relatively low interest rates
for fixed income securities and the multiplicity of similar products
available in the marketplace.
Accordingly, the Board of Directors of the Company met on February 26,
1997 to consider the future of the Fund. At the meeting, SBAM advised the
Board that it is not likely that it can cause the Fund to increase its assets
meaningfully and achieve greater economies of scale and lower expense ratios
in the foreseeable future. The Board considered several alternatives,
including continuing the Fund without the management subsidies referred to
above. The Board concluded that the alternatives considered did not appear
likely to result in increased sales of Fund shares sufficient to cause the
Fund to achieve a size that would justify its continuation. Therefore, the
Board determined it would be in the best interest of the Company and the Fund
and its stockholders to eliminate the Fund as a separate series of the
Company, subject to stockholder approval.
If stockholders of the Fund approve the proposal to liquidate the Fund
but do not redeem their shares, such stockholders will receive their ratable
share of the net distributable assets of the Fund upon liquidation of the
Fund. Such liquidation is expected to be effected on or about April 30, 1997,
assuming stockholder approval of the proposal to close the Fund, in
accordance with a Plan of Liquidation and Dissolution, a copy of which is
attached hereto as Exhibit A. The Board of Directors approved the Plan at a
meeting duly held on , 1997.
In lieu of receiving their share of the Fund's distributable assets,
stockholders may wish to consider exchanging their shares for those of other
<PAGE>
funds in the Salomon Brothers Investment Series also seeking high current
income, namely:
The Cash Management Fund seeks as high a level of current income as is
consistent with liquidity and stability of principal. The Fund invests in
high-quality, short-term U.S. Dollar denominated money market instruments and
seeks to maintain a stable net asset value of a $1.00 a share.
The New York Municipal Money Market Fund seeks as high a level of current
income exempt from federal, New York State and New York City personal income
taxes as is consistent with liquidity and the stability of principal. The
Fund invests primarily in high quality, short-term municipal obligations
issued by or on behalf of the State of New York or by its instrumentalities
or subdivisions thereof, the interest on which is exempt from federal, New
York State and New York City personal income taxes. The Fund seeks to
maintain a stable net asset value of $1.00 per share.
The National Intermediate Municipal Fund seeks a high level of current income
which is exempt from regular federal income taxes. The Fund seeks to achieve
its objective by investing primarily in a portfolio of municipal obligations.
The Fund will not invest in municipal obligations that are rated below
investment grade at the time of purchase. The Fund intends to emphasize
investments in municipal obligations with intermediate maturities and expects
to maintain a dollar-weighted average portfolio maturity of three to ten
years.
Stockholders may exchange all or part of their shares of the Fund for
the same class of shares of the funds listed above or any of the other funds
of the Salomon Brothers Investment Series at the applicable net asset value
per share without the imposition of any front-end or contingent deferred
sales charge at the time of the exchange.
Summary of Plan of Liquidation and Dissolution
Effective date of the Plan and cessation of the Fund's activities as a
separate series of an investment company. The Plan will become effective on
the date of its adoption and approval (the "Effective Date") by the holders
of a majority of all the votes cast, whether in person or by proxy, at the
Meeting. Following this approval, in accordance with Sections 1, 2, 3 and 5
of the Plan, the Company will: (i) cease to invest the Fund's assets in
accordance with its investment objective and will, as soon as reasonable and
practicable after the Effective Date, complete the sale of the portfolio
securities it holds in order to convert the Fund's assets to cash; (ii) not
engage in any business activity in respect of the Fund except for the purpose
of winding up its business and affairs, preserving the value of its assets
and distributing assets to shareholders after the payment to (or reservation
of assets and payment to) all creditors of the Company in respect of the
Fund; and (iii) dissolve the Fund in accordance with the Plan.
<PAGE>
Closing of books and restriction of transfer of shares. The interests of
stockholders in the assets of the Fund shall be fixed on the basis of their
holdings on the Effective Date. On such date, in connection with Section 4 of
the Plan, the books of the Company regarding the Fund will be closed.
Liquidating Distribution. In accordance with Section 7 of the Plan, as
soon as practicable after the Effective Date, and in any event within 60 days
thereafter, the Company will mail the following to each shareholder of record
on the Effective Date who has not redeemed his shares: (i) a liquidating
distribution equal to the stockholder's proportionate interest in the
remaining assets of the Fund; and (ii) information concerning the sources of
the liquidating distribution.
Expenses of liquidation and dissolution. All of the expenses incurred by
the Company in carrying out the Plan will be borne by SBAM.
Continued operation of the Fund. The Plan provides that the Company's
Board of Directors, and subject to the direction of the Board of Directors,
the officers, shall have the authority to authorize such variations from, or
amendments to, the provisions of the Plan as may be necessary or appropriate
to effect the dissolution, complete liquidation and termination of the
existence of the Fund in accordance with the purposes to be accomplished by
the Plan.
General Tax Consequences
The following is only a general summary of the United States federal
income tax consequences of the Plan. Investors should consult with their own
tax advisers for advice regarding the application of current United States
federal income tax law in their particular situation and with respect to
state, local and other tax consequences of the Plan.
Any portion of the liquidating distribution paid under the Plan out of
tax-exempt interest income, net investment income or net capital gains will
be taxed under the Internal Revenue Code of 1986, as amended (the "Code"), in
the same manner as any other distribution of the Fund. Accordingly, such
amounts will be treated, respectively, as tax-exempt income, ordinary income,
or capital gains if designated as a capital gains distribution. The balance
of any amount received upon liquidation will be treated for Federal income
tax purposes as payment for the shareholder's shares. Thus, a shareholder who
is a United States resident or citizen will be taxed only to the extent the
fair market value of the balance of the distribution exceeds his basis in
such shares. If the amount received is less than his basis, the stockholder
will recognize a loss. Such gain or loss will be a capital gain or capital
loss to the stockholder if his shares are held as capital assets.
Capital gains are taxable at a maximum rate of 28 percent. The
deductibility of capital losses is subject to limitations.
Under certain provisions of the Code, some stockholders may be subject
to a 31% withholding tax on the liquidating distribution ("backup
<PAGE>
withholding"). Generally, stockholders subject to backup withholding will be
those for whom a taxpayer identification number is not on file with the
Company or who, to the Company's knowledge, have furnished an incorrect
number.
Further information to stockholders concerning the sources of the
distribution proceeds will be forwarded to stockholders with the liquidating
distribution.
Required Vote
Approval of the liquidation of the Fund will require the affirmative
vote of a majority of all the votes cast, whether in person or by proxy, at a
meeting at which a quorum is present.
Status of the Fund if the Proposal is not Approved
In the event stockholders do not approve the Plan, the Fund will
continue to operate as a separate series of the Company in accordance with
its stated investment objective and policies. The Board of Directors
presently intends to re-submit the Plan or another plan of liquidation and
dissolution to stockholders for future consideration if they do not approve
the Plan at the Meeting.
Principal Stockholders
As of March 10, 1997, no Officer or Director of the Fund owned any
shares of the Fund. Certain Officers of the Fund own shares of Salomon Inc,
the parent company of the Manager. Such Officers own, in the aggregate, less
than 1% of the outstanding shares of Salomon Inc. Set forth below is a list
of all stockholders of the Fund which, to the Fund's knowledge, were the
beneficial owners of five percent or more of the shares of the Fund's Capital
Stock outstanding on March 10, 1997:
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned Percentage
As of of
Name and Address March 10, 1997 Shares Outstanding
- --------------------------- ------------------ ------------------
<S> <C> <C>
</TABLE>
<PAGE>
Proposals to be submitted by Stockholders
The Fund does not generally hold an Annual Meeting of Stockholders.
Stockholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent stockholders' meeting should send their written proposals to
the Secretary of the Company at the address set forth on the cover of the
proxy statement.
Expenses of Proxy Solicitation
The costs of preparing, assembling and mailing material in connection
with this solicitation of proxies will be borne by SBAM. Proxies may also be
solicited personally by officers of the Company and by regular employees of
SBAM or its affiliates, or other representatives of the Fund or by telephone
or telegraph, in addition to the use of the mails. Brokerage houses, banks
and other fiduciaries may be requested to forward proxy solicitation
materials to their principals to obtain authorization for the execution of
proxies, and they will be reimbursed by SBAM for such out-of-pocket expenses.
Other Information
The annual report for the Salomon Brothers Investment Series containing
the Fund's financial statements for the fiscal year ended December 31, 1996
is available free of charge, by writing to the Fund c/o Salomon Brothers
Asset Management Inc at the address on the front cover or by calling 1-800-
SALOMON.
Other Business
The Board of Directors of the Fund does not know of any other matter
which may come before the Meeting.
March , 1997
<PAGE>
EXHIBIT A
SALOMON BROTHERS NEW YORK MUNICIPAL BOND FUND
PLAN OF LIQUIDATION AND DISSOLUTION
The following Plan of Liquidation and Dissolution (the "Plan") of
Salomon Brothers New York Municipal Bond Fund (the "Fund"), a series of
Salomon Brothers Series Funds Inc (the "Company"), which has operated since
1993 as a separate series of the Company, an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), is intended to accomplish the complete liquidation and
dissolution of the Fund in conformity with the provisions of the Company's
Charter, as amended.
WHEREAS, the Company's Board of Directors has deemed that in its
judgment it is advisable and in the best interests of the Company and the
Fund and its stockholders to liquidate and dissolve the Fund and at a meeting
of the Board of Directors on ______ __, 19__ has considered and adopted this
Plan as the method of liquidating and dissolving the Fund and has directed
that this Plan be submitted to the Fund's stockholders for approval;
NOW, THEREFORE, the liquidation and dissolution of the Fund shall be
carried out in the manner hereinafter set forth:
1. Effective Date of Plan. The Plan shall be and become effective only
upon the adoption and approval of the Plan at a meeting of stockholders
called for the purpose of voting upon the Plan, by the affirmative vote of a
majority of all the votes cast, whether in person or by proxy. The date of
such adoption and approval of the Plan by stockholders is hereinafter called
the "Effective Date."
2. Dissolution. As promptly as practicable, consistent with the
provisions of the Plan, the Fund shall be dissolved.
3. Cessation of Business. After the Effective Date, the Company shall
cease operation of the Fund as a separate series of the Company and shall not
engage in any business activities on behalf of the Fund except for the
winding up of the Fund's business and affairs, preserving the value of the
Fund's assets and distributing the Fund's assets to stockholders in
accordance with the provisions of the Plan after the payment to (or
reservation of assets for payment to) all creditors of the Company in respect
of the Fund.
4. Restriction of Transfer and Redemption of Shares. The interests of
stockholders in the assets of the Fund shall be fixed on the basis of their
stockholdings at the close of business on the Effective Date. On the
Effective Date, the books of the Fund shall be closed.
5. Liquidation of Assets. As soon as is reasonable and practicable
after the Effective Date, and in any event within one week thereafter, all
portfolio securities of the Fund shall be converted to cash or cash
equivalents.
<PAGE>
6. Payments of Debts. As soon as practicable after the Effective Date,
and in any event within one week thereafter, the Company shall determine, and
_______________________________________ shall pay, the amount of all known or
reasonably ascertainable liabilities of the Fund incurred or expected to be
incurred prior to the date of the liquidating distribution provided for in
Section 7 below.
7. Liquidating Distribution. As soon as practicable after the
Effective Date, and in any event within 60 days thereafter, the Company will
mail the following to each stockholder of the Fund of record on the Effective
Date who has not redeemed his shares: (i) a liquidating distribution equal to
the stockholder's proportionate interest in the remaining assets of the Fund;
and (ii) information concerning the sources of the liquidating distribution.
8. Expenses of the Liquidation and Dissolution. All of the expenses
incurred by the Company in carrying out this Plan will be borne by Salomon
Brothers Asset Management Inc.
9. Power of Board of Directors. The Company's Board of Directors and,
subject to the direction of the Board of Directors, the officers, shall have
authority to do or authorize any or all acts and things as provided for in
the Plan and any and all such further acts and things as they may consider
necessary or desirable to carry out the purposes of the Plan, including,
without limitation, the execution and filing of all certificates, documents,
information returns, tax returns, forms, and other papers which may be
necessary or appropriate to implement the Plan or which may be required by
the provisions of the 1940 Act or the Securities Act of 1933, as amended.
The death, resignation or other disability of any Director or any
officer of the Company shall not impair the authority of the surviving or
remaining Directors or officers to exercise any of the powers provided for in
the Plan.
10. Amendment of Plan. The Board shall have the authority to authorize
such variations from or amendments of the provisions of the Plan (other than
the terms of the liquidating distribution) as may be necessary or appropriate
to effect the dissolution, complete liquidation and termination of existence
of the Fund, and the distribution of assets to shareholders in accordance
with the purposes to be accomplished by the Plan.
Dated: , 1997
SALOMON BROTHERS SERIES FUNDS INC
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Lawrence H. Kaplan, Alan M. Mandel,
Jennifer G. Muzzey, Robert J. Leonard and Noel B. Daugherty, and each of
them, attorneys and proxies for the undersigned, with full power of
substitution and revocation to represent the undersigned and to vote on
behalf of the undersigned all shares of the Salomon Brothers New York
Municipal Bond Fund (the "Fund") which the undersigned is entitled to vote at
a Special Meeting of Stockholders of the Fund to be held at Seven World Trade
Center, New York, New York on April 29, 1997, and at any adjournment thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement and hereby instructs said attorneys and proxies
to vote said shares as indicated hereon. In their discretion the proxies are
authorized to vote upon such other business as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting in
person or by substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.
Please Mark, Sign, and Return this Proxy Promptly
Using the Enclosed Envelope.
Date_______________________________________, 1997
NOTE: Please sign exactly as your name appears on
this Proxy. If joint owners, EITHER may sign this
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature(s), Title(s), if applicable
<PAGE>
This proxy, if properly executed, will be voted in the manner directed by the
stockholder.
If no direction is made to the contrary, the proxy will be voted FOR proposal
1.
Please refer to the Proxy Statement for a discussion of the Proposals.
Please Sign and Date on Reverse Side and Mail in Accompanying Postpaid
Envelope.
Please vote by filling in the appropriate boxes below, as shown, using blue
or black ink or dark pencil. Do not use red ink. /__/
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
PROPOSAL 1
1. Approval of the Liquidation of the
Salomon Brothers New York Municipal Bond
Fund. /__/ /__/ /__/
2. Any other business that may properly
come before the meeting. /__/ /__/ /__/
I will be attending the meeting. /__/
