Registration No. 33-37750
811-6219
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 6 X
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 X
Amendment No. 6 X
SMITH BARNEY SHEARSON WORLDWIDE PRIME ASSETS FUND
(formerly Shearson Lehman Brothers Worldwide Prime Assets Fund)
(Exact name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code
(212) 720-9218
Francis J. McNamara, III
Secretary
Smith Barney Shearson Worldwide Prime Assets Fund
One Boston Place
Boston, Massachusetts 02108
(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:
_____ immediately upon filing pursuant to Rule 485(b)
on ____________ pursuant to Rule 485(b)
_____ 60 days after filing pursuant to Rule 485(a)
X on April 1, 1994 pursuant to Rule 485(a)
______________________________________________________________________________
______
The Registrant has previously filed a declaration of indefinite registration
of its shares pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. Registrant's Rule 24f-2 Notice for the fiscal year ended
November 30, 1993 will be filed no later than January 31, 1994.
SMITH BARNEY SHEARSON WORLDWIDE PRIME ASSETS FUND
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
Part A
Item No.
Prospectus Caption
1. Cover Page
Cover Page
2. Synopsis
Prospectus Summary
3. Condensed Financial
Information
Financial Highlights; The
Fund's Performance
4. General Description of
Registrant
Cover Page; Prospectus Summary;
Variable Pricing System;
Investment Objective and
Management Policies; Distributor;
Additional Information
5. Management of the Fund
Management of the Fund;
Distributor; Additional
Information; Annual Report
6. Capital Stock and Other
Securities
Variable Pricing System;
Dividends, Distributions, and
Taxes; Additional Information
7. Purchase of Securities Being
Offered
Variable Pricing System;
Purchase of Shares; Valuation of
Shares; Redemption of Shares;
Exchange Privilege: Additional
Information
8 Redemption or Repurchase
Variable Pricing System; Purchase
of Shares; Redemption of
Shares
9. Legal Proceedings
Not Applicable
Part B
Item No.
Statement of
Additional Information Caption
10. Cover Page
Cover page
11. Table of Contents
Contents
12. General Information and
History
Distributor
13. Investment Objectives and
Policies
Investment Objective and
Management Policies
14. Management of the Fund
Management of the Fund;
Distributor
15. Control Persons and Principal
Holders
of Securities
Management of the Fund
16. Investment Advisory and Other
Services
Management of the Fund;
Distributor; Custodian
and Transfer Agent
17. Brokerage Allocation
Investment Objective and
Management Policies
18. Capital Stock and Other
Securities
Purchase of Shares; Taxes
19. Purchase, Redemption and
Pricing
of Securities Offered
Purchase of Shares; Redemption of
Shares; Valuation of Shares;
Exchange Privilege
20. Tax Status
Taxes
21. Underwriters
Distributor
22. Calculation of Performance
Data
Performance Data
23. Financial Statements
Financial Statements
<PAGE>
APRIL 1, 1994
SMITH BARNEY SHEARSON
WORLDWIDE
PRIME ASSETS
FUND
PROSPECTUS BEGINS
ON PAGE ONE.
[LOGO]
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- ---------------------------------------------------------------------------
PROSPECTUS April 1, 1994
Two World Trade Center
New York, New York 10048
(212) 720-9218
Smith Barney Shearson Worldwide Prime Assets Fund (the "Fund") is a
non-diversified, open-end management investment company that seeks to maximize
current income consistent with protection of principal and relative stability
of
net asset value per share by investing in a managed portfolio of high-quality
debt securities that may be denominated in U.S. dollars or selected foreign
currencies and have remaining maturities of not more than three years and an
average weighted maturity of not more than 18 months. The Fund will at all
times
maintain at least 30% of its net assets in U.S. dollar-denominated securities
and, under normal circumstances, at least 20% of its net assets in securities
denominated in the currencies of countries participating in the European
Monetary System (the "EMS") or denominated in European Currency Units
("ECUs").
(CONTINUED ON PAGE
2)
This Prospectus sets forth concisely certain information about the Fund,
including distribution and service fees and expenses, which prospective
investors will find helpful in making an investment decision. Investors are
encouraged to read this Prospectus carefully and retain it for future
reference.
Additional information about the Fund is contained in a Statement of
Additional Information dated April 1, 1994, as amended or supplemented from
time
to time, which is available upon request and without charge by calling or
writing the Fund at the telephone number or address set forth above or by
contacting your Smith Barney Shearson Financial Consultant. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission (the "SEC") and is incorporated by reference into this Prospectus
in
its entirety.
SMITH BARNEY SHEARSON INC.
Distributor
PANAGORA ASSET MANAGEMENT LIMITED
Investment Adviser
THE BOSTON COMPANY ADVISORS, INC.
Administrator
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A
CRIMINAL OFFENSE.
1
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
(CONTINUED FROM PAGE 1)
ALTHOUGH IT WILL INVEST SIGNIFICANTLY IN MONEY MARKET INSTRUMENTS, THE FUND
IS
NOT A MONEY MARKET FUND AND, THEREFORE, ITS INVESTMENT PORTFOLIO CAN BE
EXPECTED
TO EXPERIENCE GREATER VOLATILITY THAN THAT OF A MONEY MARKET FUND AND ITS NET
ASSET VALUE PER SHARE WILL FLUCTUATE DEPENDING ON A COMBINATION OF FACTORS
SUCH
AS THE VALUE OF THE CURRENCIES IN WHICH THE FUND'S PORTFOLIO SECURITIES ARE
DENOMINATED IN RELATION TO THE U.S. DOLLAR, CURRENT MARKET INTEREST RATES AND
THE CREDITWORTHINESS OF THE ISSUERS IN WHOSE SECURITIES THE FUND INVESTS.
2
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- ---------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY 4
-------------------------------------------------------------
FINANCIAL HIGHLIGHTS 11
-------------------------------------------------------------
VARIABLE PRICING SYSTEM 13
-------------------------------------------------------------
THE FUND'S PERFORMANCE 14
-------------------------------------------------------------
MANAGEMENT OF THE FUND 16
-------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 17
-------------------------------------------------------------
PURCHASE OF SHARES 32
-------------------------------------------------------------
REDEMPTION OF SHARES 36
-------------------------------------------------------------
VALUATION OF SHARES 40
-------------------------------------------------------------
EXCHANGE PRIVILEGE 42
-------------------------------------------------------------
DISTRIBUTOR 48
-------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES 49
-------------------------------------------------------------
ADDITIONAL INFORMATION 51
-------------------------------------------------------------
</TABLE>
3
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- ---------------------------------------------------------------------------
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY DETAILED INFORMATION
APPEARING ELSEWHERE IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL
INFORMATION. CROSS REFERENCES IN THIS SUMMARY ARE TO HEADINGS IN THE
PROSPECTUS.
SEE "TABLE OF CONTENTS."
BENEFITS TO INVESTORS THE FUND OFFERS INVESTORS SEVERAL IMPORTANT BENEFITS:
- - A professionally managed portfolio consisting primarily of high-quality,
short-term debt securities providing investment variation otherwise beyond
the means of many individual investors.
- - Ownership of a selected portfolio of debt securities.
- - Investment liquidity at current net asset value, through convenient
purchase
and redemption procedures.
- - A convenient way to invest without the administrative and recordkeeping
burdens normally associated with the direct ownership of securities.
- - Different methods for purchasing shares that allow investment flexibility
and
a wider range of investment alternatives.
- - Automatic dividend reinvestment feature, plus exchange privilege within the
same class of shares of most other funds in the Smith Barney Shearson Group
of Funds.
INVESTMENT OBJECTIVE The Fund is an open-end, non-diversified, management
investment company that seeks to maximize current income consistent with
protection of principal and relative stability of net asset value per share by
investing in a managed portfolio of high-quality debt securities that may be
denominated in U.S. dollars or selected foreign currencies and have remaining
maturities of not more than three years. See "Investment Objective and
Management Policies."
VARIABLE PRICING SYSTEM The Fund offers two classes of shares ("Classes"):
Class
A shares, which are available for direct purchases and Class B shares, which
are
available only through exchanges. Class A shares are offered without a sales
charge. Class B shares are not offered to the general public for direct
purchases but may be acquired through exchanges with Class B shares of other
funds in the Smith Barney Shearson Group of Funds and may be acquired directly
by participants in the Smith Barney
4
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
Shearson 401(k) Program (the "401(k) Program"). Shares of both Classes are
offered subject to a distribution fee of .90% of the value of average daily
net
assets of the respective Class. The offering of multiple Classes of shares
facilitates exchange privileges for investors choosing to own Class A or Class
B
shares of other funds in the Smith Barney Shearson Group of Funds. See
"Variable
Pricing System."
CLASS A SHARES These shares are offered at net asset value per share. The Fund
pays an annual distribution fee of .90% of the value of average daily net
assets
of this Class. See "Purchase of Shares."
CLASS B SHARES These shares may be acquired only through exchanges with Class
B
shares of other funds in the Smith Barney Shearson Group of Funds and are
subject to the highest contingent deferred sales charge ("CDSC"), if any, of
the
shares from which the exchange or any preceding exchange was made, except that
participants in the 401(k) Program may purchase Class B shares directly at net
asset value. Class B shares purchased directly and not subsequently exchanged
are not subject to any CDSC. The Fund pays an annual distribution fee of .90%
of
the value of average daily net assets of this Class. See "Purchase of Shares."
CLASS B CONVERSION FEATURE Class B shares will convert automatically to Class
A
shares, based on relative net asset value, eight years after the date of
original purchase. The first of these conversions will commence on or about
September 30, 1994. See "Variable Pricing System -- Class B Shares."
401(K) PROGRAM Investors may be eligible to participate in the 401(k) Program,
which is generally designed to assist employers or plan sponsors in the
creation
and operation of retirement plans under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), as well as other types of participant
directed, tax-qualified employee benefit plans (collectively, "Participating
Plans"). Either Class A or Class B shares may be available as investment
alternatives for Participating Plans. Class B shares purchased directly by
Participating Plans and not subsequently exchanged are not subject to any
CDSC.
See "Purchase of Shares -- Smith Barney Shearson 401(k) Program."
PURCHASE OF SHARES Class A shares may be purchased through the Fund's
distributor, Smith Barney Shearson Inc. ("Smith Barney Shearson"), or a broker
that clears securities transactions through Smith Barney Shearson on
5
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
a fully disclosed basis (an "Introducing Broker"). Direct purchases by certain
retirement plans may be made through the Fund's transfer agent, The
Shareholder
Services Group, Inc. ("TSSG"). See "Purchase of Shares."
INVESTMENT MINIMUMS Investors are subject to a minimum initial investment
requirement of $2,500 and a minimum subsequent investment requirement of
$1,000.
However, for Individual Retirement Accounts ("IRAs") and Self-Employed
Retirement Plans, the minimum initial investment requirement is $250 and the
minimum subsequent investment requirement is $100 and for certain qualified
retirement plans, the minimum initial and subsequent investment requirements
are
both $25. See "Purchase of Shares."
SYSTEMATIC INVESTMENT PLAN The Fund offers shareholders a Systematic
Investment
Plan under which they may authorize the automatic placement of a purchase
order
each month or quarter for Fund shares in an amount not less than $100. See
"Purchase of Shares."
REDEMPTION OF SHARES Shares may be redeemed on each day the New York Stock
Exchange, Inc. ("NYSE") is open for business. Class A shares are redeemable at
net asset value and Class B shares are redeemable at net asset value less any
applicable CDSC. See "Redemption of Shares."
MANAGEMENT OF THE FUND PanAgora Asset Management Limited ("PanAgora U.K."),
serves as the Fund's investment adviser. Fifty percent of the outstanding
voting
stock of PanAgora U.K. is owned by Nippon Life Insurance Company and fifty
percent is owned by Lehman Brothers Inc. ("Lehman Brothers").
The Boston Company Advisors, Inc. ("Boston Advisors") serves as the Fund's
administrator. Boston Advisors is a wholly owned subsidiary of The Boston
Company, Inc. ("TBC"), a financial services holding company which in turn is a
wholly owned subsidiary of Mellon Bank Corporation ("Mellon"). See "Management
of the Fund."
EXCHANGE PRIVILEGE Shares of a Class may be exchanged for shares of the same
Class of certain other funds in the Smith Barney Shearson Group of Funds.
Certain exchanges may be subject to a sales charge differential. See "Exchange
Privilege."
6
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
VALUATION OF SHARES Net asset value of each Class is quoted daily in the
financial section of most newspapers and is also available from your Smith
Barney Shearson Financial Consultant. See "Valuation of Shares."
DIVIDENDS AND DISTRIBUTIONS Dividends are declared daily and paid monthly from
net investment income. Distributions of net realized capital gains are paid
annually. See "Dividends, Distributions and Taxes."
REINVESTMENT OF DIVIDENDS Dividends and distributions paid on shares of a
Class
will be reinvested automatically, unless otherwise specified by an investor,
in
additional shares of the same Class at current net asset value. Shares
acquired
by dividend and distribution reinvestment will not be subject to any sales
charge or CDSC. Class B shares acquired through dividend and distribution
reinvestment will become eligible for conversion to Class A shares on a pro
rata
basis. See "Dividends, Distributions and Taxes" and "Variable Pricing System."
RISK FACTORS AND SPECIAL CONSIDERATIONS There is no assurance that the Fund
will
achieve its investment objective. Because a substantial portion of the Fund's
assets may be held in securities denominated in foreign currencies, the Fund
will bear the risk that such currencies may lose value in relation to the U.S.
dollar. The Fund may, from time to time, use investment techniques and
strategies that entail certain risks, such as entering into futures contracts
and options on futures contracts, entering into options on foreign currencies,
entering into forward currency contracts, lending portfolio securities and
entering into repurchase agreements. In addition, certain of the Fund's
policies, such as its investing in foreign securities, its operating as a
non-diversified company within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), and its concentrating its investments in
the
banking industry, involve special considerations. See "Investment Objective
and
Management Policies."
THE FUND'S EXPENSES The following expense table lists the costs and expenses
an
investor will incur either directly or indirectly as a shareholder
7
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
of the Fund, based on the maximum applicable CDSC that may be incurred at the
time of redemption and an estimate of the Fund's current operating expenses:
<TABLE>
<CAPTION>
CLASS CLASS
A B
<S> <C> <C>
-------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum CDSC*
(as a percentage of redemption proceeds) -- 5.00%
-------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees (net of waivers) 0.37% 0.37%
12b-1 fees 0.90% 0.90%
Other expenses** (net of fee waivers) 0.48% 0.72%
-------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 1.75% 1.99%
-------------------------------------------------------------------------
<FN>
*Except under the 401(k) Program, Class B shares may be acquired only
through exchanges and are subject to the highest CDSC, if any, of the
shares from which the exchange or any preceding exchange was made.
Class B shares purchased and not subsequently exchanged by
Participating Plans in the 401(k) Program are not subject to a CDSC.
Participating Plans acquiring Class B shares through an exchange may be
subject to a 3% CDSC upon certain redemptions.
**All expenses are based on data for the Fund's fiscal year ended
November 30, 1993.
</TABLE>
The CDSC set forth in the above table is the maximum CDSC imposed by any of
the funds participating in the Smith Barney Shearson Group of Funds exchange
program. Investors may pay actual charges of less than 5% depending on the
CDSC
of the shares with which the exchange was made, the length of time the shares
are held and whether the shares were purchased through the 401(k) Program. See
"Purchase of Shares" and "Redemption of Shares." Management fees payable by
the
Fund include investment advisory fees computed daily and payable monthly to
PanAgora U.K. at the annual rate of .45% of the Fund's average daily net
assets,
and administration fees computed daily and payable monthly to Boston Advisors
at
the annual rate of .20% of the Fund's average daily net assets. The fees and
expenses shown above reflect a voluntary agreement currently in effect between
PanAgora U.K. and Boston Advisors to waive certain management fees. If this
agreement were not in effect, total operating expenses would be 2.03% for
Class
A shares and 2.27% for Class B shares. The nature of the services for which
the
Fund pays management fees is described under
8
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
"Management of the Fund." Smith Barney Shearson receives with respect to each
of
Class A and Class B shares an annual 12b-1 distribution fee of .90% of the
value
of average daily net assets of the respective Classes, of which .65% is used
by
Smith Barney Shearson to cover expenses that are primarily intended to result
in, or that are primarily attributable to, the sale of shares, and of which
.25%
is used by Smith Barney Shearson to provide compensation for ongoing servicing
and/or maintenance of shareholder accounts. "Other expenses" in the above
table
include fees for shareholder services, custodial fees, legal and accounting
fees, printing costs and registration fees. PanAgora U.K., and Boston Advisors
voluntarily waived a portion of their investment advisory and administration
fees in an aggregate amount equal to .07% and .28% of the value of average
daily
net assets of the Fund's Class A shares for the fiscal year ended November 30,
1992 and for the fiscal year ended November 30, 1993, respectively. This had
the
effect of lowering the Fund's total operating expenses and increasing returns
available to investors. If PanAgora U.K., Boston Advisors, Boston Safe and
TSSG
had not elected to waive these fees, the total operating expenses of the
Fund's
Class A shares for the fiscal year ended November 30, 1992 and for the fiscal
year ended November 30, 1993 would have been 1.87% and 2.03%, respectively, of
average daily net assets of the Class A shares.
EXAMPLE
The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to
a hypothetical $1,000 investment in the Fund assuming a 5% annual return. THE
EXAMPLE ASSUMES PAYMENT BY THE FUND OF OPERATING EXPENSES AT THE LEVELS SET
FORTH IN THE TABLE ABOVE. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION
OF PAST OR FUTURE EXPENSES AND ACTUAL
9
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PROSPECTUS SUMMARY (CONTINUED)
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. MOREOVER, WHILE THIS EXAMPLE
ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY
RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10
YEARS*
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------
- ---
Class A shares $18 $ 55 $ 95
$206
Class B shares:
Assumes complete redemption at end
of each time period** $70 $112 $157
$282
Assumes no redemption $20 $ 62 $107
$232
-----------------------------------------------------------------------------
- ---
<FN>
*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.
**Assumes deduction at the time of redemption of 5.00% which is the maximum
CDSC
imposed by any of the funds participating in the Smith Barney Shearson
Group
of Funds exchange program. Investors may be subject to a lower CDSC.
</TABLE>
10
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
THE FOLLOWING INFORMATION HAS BEEN AUDITED BY COOPERS & LYBRAND, INDEPENDENT
ACCOUNTANTS, WHOSE REPORT THEREON APPEARS IN THE FUND'S ANNUAL REPORT DATED
NOVEMBER 30, 1993. THIS INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND RELATED NOTES THAT ALSO APPEAR IN THE FUND'S ANNUAL
REPORT, WHICH IS INCORPORATED BY REFERENCE INTO THE STATEMENT OF ADDITIONAL
INFORMATION.
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
YEAR YEAR
YEAR
ENDED ENDED
ENDED
11/30/93# 11/30/92
11/30/91*
<S> <C> <C>
<C>
Net Asset Value, beginning of period $ 1.81 $ 1.94 $
2.00
- ------------------------------------------------------------------------------
- -------
Income from investment operations:
Net investment income*** 0.05 0.10
0.13
Net realized and unrealized loss on securities (0.06) (0.14)
(0.06)
- ------------------------------------------------------------------------------
- -------
Total from investment operations (0.01) (0.04)
0.07
Less distributions:
Dividends from net investment income -- (0.09)
(0.13)
Distributions in excess of realized gains (0.00)+++
Distributions from capital (0.07)
Net Asset Value, end of period $ 1.73 $ 1.81 $
1.94
- ------------------------------------------------------------------------------
- -------
Total return++ (0.78)% (2.03)%
3.43%
- ------------------------------------------------------------------------------
- -------
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $81,639 $224,845
$658,607
Ratio of expenses to average net assets+ 1.75% 1.80%
1.74%**
Ratio of net investment income to average net
assets 2.63% 4.89
7.34%**
- ------------------------------------------------------------------------------
- -------
<FN>
*The Fund commenced operations on January 14, 1991. Those shares outstanding
prior to
November 6, 1992, were designated as Class A shares.
**Annualized.
***Net investment income before waiver of fees and expenses by investment
adviser
and/or subinvestment adviser and administrator for the years ended November
30, 1993
were $0.04, $0.10, $0.13.
+Annualized operating expense ratios before waiver of fees by investment
adviser,
sub-investment adviser and administrator, and/or transfer agent, custodian
and
distributor for the years ended November 30, 1993, 1992, and 1991, were
2.03%, 1.87%
and 1.82%, respectively.
++Total return represents aggregate total return for the periods indicated
and does
not reflect any applicable sales charges.
+++This amount represents less than $.01.
#The per share amounts have been calculated using the monthly average shares
method,
which more appropriately presents per share data for the year since use of
the
undistributed method did not accord with the results of operations.
</TABLE>
11
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
YEAR
ENDED
11/30/93**
<S> <C>
Net Asset Value, beginning of period $ 1.80
- ------------------------------------------------------------
Income from investment operations:
Net investment income** 0.02
Net realized and unrealized loss on securities (0.05)
- ------------------------------------------------------------
Total from investment operations (0.03)
Less distributions:
Distributions in excess of realized gains (0.00)+++
Distributions from capital (0.04)
- ------------------------------------------------------------
Net Asset Value, end of period $ 1.73
- ------------------------------------------------------------
Total return++ (1.60)%
- ------------------------------------------------------------
Ratios to average net assets/supplemental data:
Net assets, end of year $ 1.73
Ratio of expenses to average net assets+ 1.99%
Ratio of net investment income to average net
assets 2.38%
- ------------------------------------------------------------
<FN>
*The Fund commenced selling Class B shares on November 6,
1992. On November 30, 1992 there was one Class B share
outstanding; however, no income or expenses were allocated
to this share for the period ended November 30, 1992.
**Net investment income before waiver of fees and expenses
by investment adviser, and/or sub-investment adviser and
administrator for the fiscal year ended November 30, 1993
was $0.01.
+Annualized operating expense ratios before waiver of fees
by investment adviser, sub-investment adviser and
administrator was 2.27% for the year ended November 30,
1993.
++Total return represents aggregate total return for the
period indicated and does not reflect any applicable
sales charges.
+++This amount represents less than $0.01.
+++The per share amounts have been calculated using the
monthly average share method, which more appropriately
presents the per share data for the year since use of the
undistributed method did not accord with the results of
operations.
</TABLE>
12
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
VARIABLE PRICING SYSTEM
The Fund offers individual investors two methods of purchasing shares, thus
enabling investors to choose the Class of shares that best suits their needs,
given the amount of purchase and intended length of investment.
CLASS A SHARES. Class A shares are sold at net asset value per share and are
subject to an annual distribution fee of .90% of the value of the Fund's
average
daily net assets attributable to the Class. The distribution fee paid with
respect to Class A shares is used by Smith Barney Shearson to compensate its
Financial Consultants for ongoing services provided to shareholders and
compensates Smith Barney Shearson for expenses incurred in selling the shares,
including expenses such as sales commissions, Smith Barney Shearson's branch
office overhead expenses and marketing costs associated with Class A shares
such
as preparation of sales literature, advertising and printing and distributing
prospectuses, statements of additional information and other materials to
prospective investors in Class A shares. See "Purchase of Shares."
CLASS B SHARES. Except for purchases made through the 401(k) Program, Class
B
shares may be acquired only through exchanges with Class B shares of other
funds
in the Smith Barney Shearson Group of Funds and are subject to the highest
CDSC,
if any, of the shares from which the exchange was made. Class B shares
purchased
directly by Participating Plans and not subsequently exchanged are not subject
to any CDSC. Class B shares are subject to an annual distribution fee of .90%
of
the value of the Fund's average daily net assets attributable to the Class
which
is used for the same purposes as the distribution fee applicable to Class A
shares. See "Class A Shares" above. See also "Purchase of Shares," "Redemption
of Shares" and "Exchange Privilege." A Financial Consultant may receive
different levels of compensation for selling different Classes of shares.
Class
B shares are subject to a higher transfer agency fee than Class A shares
which,
in turn, will cause Class B shares to have a higher expense ratio and pay
lower
dividends than Class A shares.
Eight years after the date of purchase, Class B shares will convert
automatically to Class A shares, based on the relative net asset value of
shares
of each Class. In addition, a certain portion of Class B shares that have been
acquired through the reinvestment of dividends and distributions ("Class B
Dividend Shares") will be converted at that time. That portion will be a
percentage of the total number of Class B Dividend Shares owned by
13
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
VARIABLE PRICING SYSTEM (CONTINUED)
the shareholder, which percentage is equal to the ratio of the total number of
Class B shares owned by the shareholder converting at the time to the total
number of Class B shares (other than Class B Dividend Shares) owned by the
shareholder. The first of these conversions will commence on or about
September
30, 1994. The conversion of Class B shares into Class A shares is subject to
the
continuing availability of an opinion of counsel to the effect that such
conversions will not constitute taxable events for Federal income tax
purposes.
- --------------------------------------------------------------------
THE FUND'S PERFORMANCE
TOTAL RETURN
From time to time, the Fund may advertise the "average annual total return"
over various periods of time for each Class. Total return figures show the
average percentage change in the value of an investment in the Class from the
beginning date of the measuring period to the end of the measuring period.
These
figures reflect changes in the price of the Class' shares and assume that any
income dividends and/or capital gains distributions made by the Fund with
respect to the Class during the period were reinvested in shares of the same
Class. Class B total return figures include any applicable CDSC. These figures
also take into account the distribution fees, if any, payable with respect to
the Classes.
Total return figures will be given for the recent one-, five- and ten-year
periods, or for the life of a Class to the extent it has not been in existence
for any such periods, and may be given for other periods as well (such as from
commencement of the Fund's operations, or on a year-by-year basis). When
considering average annual total return figures for periods longer than one
year, investors should note that the total return for any one year in the
period
might have been greater or less than the average for the entire period.
"Aggregate total return" figures may be used for various periods, representing
the cumulative change in value of an investment in a Class for the specific
period (again reflecting changes in share prices and assuming reinvestment of
dividends and distributions). Aggregate total return for Class B shares may be
calculated either with or without the effect of a maximum applicable CDSC of
5%
and may be shown by means of
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
THE FUND'S PERFORMANCE (CONTINUED)
schedules, charts or graphs, and may indicate subtotals of the various
components of total return (that is, the change in value of initial
investment,
income dividends and capital gains distributions). Because of the possibility
that a CDSC may be imposed on Class B shares, the performance for each Class
will differ.
YIELD
From time to time, the Fund may advertise the 30-day "yield." The yield of
the
Fund refers to the income generated by an investment in the Fund over the 30-
day
period identified in the advertisement, and is computed by dividing the net
investment income per share earned by the Fund during the period by the public
offering price on the last day of the period. This income is "annualized" by
assuming that the amount of income is generated each month over a one-year
period and is compounded semi-annually. The annualized income is then shown as
a
percentage of the net asset value.
In reports or other communications to shareholders or in advertising
material,
performance of the Classes may be compared with that of other mutual funds or
classes of shares of the funds as listed in the rankings prepared by Lipper
Analytical Services, Inc. or similar independent services that monitor the
performance of mutual funds, or other industry or financial publications such
as
BARRON'S, BUSINESS WEEK, CDA INVESTMENT TECHNOLOGIES, INC., FORBES, FORTUNE,
INSTITUTIONAL INVESTOR, INVESTORS DAILY, KIPLINGER'S PERSONAL FINANCE, MONEY,
MORNINGSTAR MUTUAL FUND VALUES, THE NEW YORK TIMES, THE WALL STREET JOURNAL
and
USA TODAY. It is important to note that yield and total return figures are
based
on historical earnings and are not intended to indicate future performance. To
the extent any advertisement or sales literature of the Fund describes the
expenses or performance of a Class, it will also disclose such information for
the other Class. The Statement of Additional Information contains a
description
of the methods used to determine performance. Performance figures may be
obtained from your Smith Barney Shearson Financial Consultant.
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SMITH BARNEY SHEARSON
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- --------------------------------------------------------------------
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
Overall responsibility for management and supervision of the Fund rests with
the Fund's Board of Trustees. The Trustees approve all significant agreements
between the Fund and the companies that furnish services to the Fund,
including
agreements with the Fund's distributor, investment adviser, administrator,
custodian and transfer agent. The day-to-day operations of the Fund are
delegated to PanAgora U.K. and Boston Advisors. The Statement of Additional
Information contains general background information regarding each Trustee and
executive officer of the Fund.
INVESTMENT ADVISER--PANAGORA U.K.
PanAgora U.K., located at 3 Finsbury Avenue, London EC2M 2PA, serves as the
Fund's investment adviser. Fifty percent of the outstanding voting stock of
PanAgora U.K. is owned by Nippon Life Insurance Company and fifty percent is
owned by Lehman Brothers, which is a wholly owned subsidiary of Lehman
Brothers
Holding Inc. ("Lehman Holdings"). American Express Company ("American
Express")
owns 100% of Lehman Holdings' issued and outstanding common stock, which
represents approximately 92% of Lehman Holdings' issued and outstanding voting
stock. The remainder of Lehman Holdings' voting stock is owned by Nippon Life
Insurance Company. PanAgora U.K. was formed in 1989 and is an investment
adviser
registered under the Investment Advisers Act of 1940. PanAgora U.K. offers
multi-currency equity, fixed-income and currency investment products and
provides global asset allocation services to clients and had aggregate assets
under management, as of December 31, 1993, in excess of $ billion.
Subject to the supervision and direction of the Fund's Board of Trustees,
PanAgora U.K. manages the Fund's portfolio in accordance with the Fund's
stated
investment objective and policies, makes investment decisions for the Fund,
places orders to purchase and sell securities and employs professional
portfolio
managers and securities analysts who provide research services to the Fund.
For
the fiscal year ended November 30, 1993, the Fund paid PanAgora U.K.
investment
advisory fees in an amount equal to .26% of the value of the average daily net
assets of the Fund. PanAgora U.K. waived investment advisory fees in an amount
equal to .19% of the value of the Fund's average daily net assets.
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- -------------------------------------------------------------
MANAGEMENT OF THE FUND (CONTINUED)
PORTFOLIO MANAGEMENT
Alan J. Brown, Chief Investment Officer of PanAgora U.K., prior to April
1989,
Managing Director of Posthorn Global Asset Management Ltd., London, England,
has
served as Vice President and Investment Officer of the Fund since it commenced
operations on January 14, 1991 and manages the day-to-day operations of the
Fund, including making all investment decisions.
Mr. Brown's management discussion and analysis of the Fund's performance
during the fiscal year ended November 30, 1993 (including a line graph
comparing
the Fund's performance to the Index) is included in the Fund's Annual Report
to
shareholders dated November 30, 1993. The Fund's Annual Report may be obtained
upon request without charge from your Smith Barney Shearson Financial
Consultant
or by writing or calling the Fund at the address or phone number listed on
page
one of this Prospectus.
ADMINISTRATOR--BOSTON ADVISORS
Boston Advisors, located at One Boston Place, Boston, Massachusetts 02108,
serves as the Fund's administrator. Boston Advisors provides investment
management, investment advisory and/or administrative services to investment
companies that had aggregate assets under management as of December 31, 1993,
in
excess of $ billion.
Boston Advisors calculates the net asset value of the Fund's shares and
generally manages all aspects of the Fund's administration and operation. For
the fiscal year ended November 30, 1993, the Fund paid administration fees to
Boston Advisors in an amount equal to .11% of the value of the average daily
net
assets of the Fund. Boston Advisors waived administration fees in an amount
equal to .09% of the Fund's average daily net assets.
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The investment objective of the Fund is to maximize current income
consistent
with protection of principal and relative stability of net asset value per
share. The Fund's investment objective may be changed only with the approval
of
a majority of the Fund's outstanding voting securities. There
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
can be no assurance that the Fund's investment objective will be achieved, or,
in particular, that the Fund will be able to maintain relative stability of
net
asset value per share.
In investing the assets of the Fund, PanAgora U.K. seeks to identify and
invest in a managed portfolio of high-quality debt securities that may be
denominated in U.S. dollars or selected foreign currencies and have remaining
maturities of not more than three years and an average weighted maturity of
not
more than 18 months. The Fund will at all times maintain at least 30% of its
net
assets in U.S. dollar-denominated securities and under normal circumstances,
at
least 20% of its net assets in securities denominated in the currencies of the
countries participating in the EMS or denominated in ECUs. Under normal
circumstances, the Fund will invest at least 65% of its assets in securities
of
issuers domiciled in at least three different countries, one of which will be
the United States.
In pursuing the Fund's investment objective, PanAgora U.K. will seek to
minimize credit risk and fluctuations in net asset value per share by limiting
the Fund's securities investments to short-term, high quality debt
instruments.
The Fund will be actively managed by PanAgora U.K. in accordance with a
multi-market investment strategy contemplating investments denominated in a
number of currencies and investments in different types of debt securities.
The
Fund's exposure to each currency will be adjusted based on PanAgora U.K.'s
perception of the most favorable markets and issuers. The percentage of assets
invested in securities of issuers located in a particular country or
denominated
in a particular currency will vary in accordance with PanAgora U.K.'s
assessment
of the relative yield of such securities and the relationship of a country's
currency to the U.S. dollar. The Fund will not invest more than 15% of its
total
assets in debt securities denominated in a single currency other than the U.S.
dollar.
Fundamental economic strength, credit quality and interest rate trends will
be
the principal factors considered by PanAgora U.K. in determining whether to
increase or decrease the emphasis placed upon a particular type of security or
industry sector within the Fund's investment portfolio. Foreign short-term
interest rates are often higher than U.S. short-term rates because prevailing
economic conditions and central bank policies in foreign countries differ from
those in the United States. Historically, U.S. short-term interest
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
rates have been near the middle of the range of short-term interest rates
available worldwide. Occasionally, however, U.S. short-term interest rates are
at the high end of global short-term interest rates.
The Fund will generally invest in debt securities denominated in the
currencies of countries whose governments are considered by PanAgora U.K. to
be
stable; the Fund will invest in securities issued by a government of a country
considered unstable or underdeveloped only when PanAgora U.K. believes that
the
risk of a decline in the country's currency can be substantially hedged.
Currencies, other than the U.S. dollar, in which the Fund's securities will be
denominated include, among others, the Australian dollar, Austrian schilling,
Belgian franc, British pound sterling, Canadian dollar, Danish krone, Dutch
guilder, French franc, German mark, Irish punt, Italian lira, Japanese yen,
New
Zealand dollar, Spanish peseta, Swedish krona and Swiss franc. The Fund will
not
invest in debt securities denominated in the currencies of countries located
in
Eastern Europe. An issuer of debt securities purchased by the Fund may be
domiciled in a country other than the country in whose currency the instrument
is denominated.
Under normal circumstances, the Fund will maintain at least 20% of its net
assets in securities denominated in the currencies of countries participating
in
the EMS or denominated in ECUs. The EMS represents the commitments of certain
member states of the European Union (the "EU"), an organization engaged in
cooperative economic activities, to manage the exchange rates of their
currencies jointly with the goal of promoting the harmonization and
integration
of the economies of the member states through exchange-rate stability.
The ECU is a "basket" consisting of specified amounts of the currencies of
certain of the EU states. The specific amounts of currencies comprising the
ECU
may be adjusted by the EU's Council of Ministers to reflect changes in
relative
values of the underlying currencies. PanAgora U.K. believes that the
adjustments
will not adversely affect holders of ECU-denominated obligations or the
marketability of such securities. European governments and, in particular,
supranational organizations issue ECU-denominated obligations.
PanAgora U.K. will seek to minimize the market risk of the Fund's
investments
in securities by limiting those investments to debt securities of
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
high quality, including: (a) debt securities issued or guaranteed by the
United
States government, its agencies or instrumentalities ("U.S. government
securities"); (b) obligations issued or guaranteed by a foreign government or
any of its political subdivisions, authorities, agencies, or
instrumentalities,
or by supranational entities, all of which are rated AA by Standard & Poor's
Corporation ("S&P") or Aa by Moody's Investors Service, Inc. ("Moody's")
("High
Quality Ratings") or, if unrated, determined by PanAgora U.K. to be of
equivalent quality; (c) obligations issued or guaranteed by supranational
organizations and corporate debt securities rated AA by S&P or Aa by Moody's
or,
if unrated, determined by PanAgora U.K. to be of equivalent quality; (d)
certificates of deposit and bankers' acceptances issued or guaranteed by, or
time deposits maintained at, banks (including foreign branches of domestic
banks
or domestic or foreign branches of foreign banks) having total assets of more
than $1 billion and determined by PanAgora U.K. to be of high quality; and (e)
commercial paper rated A-1 by S&P, Prime-1 by Moody's, Fitch-1 by Fitch
Investors Service, Inc., or Duff-1 by Duff & Phelps Inc. or, if not rated,
issued by domestic or foreign companies having outstanding debt securities
rated
AA by S&P or Aa by Moody's and determined by PanAgora U.K. to be of high
quality.
Supranational organizations in whose debt securities the Fund may invest
include the World Bank, which was chartered to finance development projects in
developing member countries; the EU; the European Coal and Steel Community,
which is an economic union of various European nations' steel and coal
industries; and the Asian Development Bank, which is an international
development bank established to lend funds, promote investment and provide
technical assistance to member nations in the Asian and Pacific regions.
The Fund will not invest in illiquid securities if immediately after such
investment more than 10% of the value of the Fund's total net assets (taken at
market value) would be invested in such securities. For this purpose, illiquid
securities include (a) securities for which no readily available market exists
(because, for example, the securities are subject to legal or contractual
restrictions on resale, trading in the securities is suspended or, in the case
of unlisted securities, market makers do not exist or will not entertain bids
or
offers for the securities), (b) options purchased by the Fund over-the-counter
and the cover for options written by the Fund over-the-counter,
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
(c) repurchase agreements not maturing within seven days and (d) time deposits
with maturities in excess of seven days. See "Investment Objective and
Management Policies -- Investment Techniques and Strategies."
The Fund is classified as a "non-diversified" investment company under the
1940 Act, which means that the Fund is not limited by the 1940 Act in the
proportion of its assets that it may invest in the securities of a single
issuer. The Fund intends, however, to conduct its operations so as to qualify
as
a "regulated investment company" for purposes of the Code. See "Dividends,
Distributions and Taxes -- Taxes." In order to qualify as a regulated
investment
company for Federal income tax purposes, the Fund will limit its investments
so
that, at the close of each quarter of the taxable year, (a) not more than 25%
of
the market value of the Fund's total assets is invested in the securities
(other
than U.S. government securities) of a single issuer and (b) at least 50% of
the
market value of the Fund's total assets is represented by (i) cash and cash
items, (ii) U.S. government securities and (iii) other securities limited in
respect of any one issuer to an amount not greater in value than 5% of the
market value of the Fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer. The Fund being so qualified and
its meeting certain distribution requirements will relieve the Fund of any
liability for Federal income tax to the extent its earnings are distributed to
shareholders.
Under normal market conditions, and as a matter of fundamental policy, the
Fund will "concentrate" at least 25% of its assets in debt instruments issued
by
domestic and foreign companies engaged in the banking industry, including bank
holding companies. These investments may include certificates of deposit, time
deposits, bankers' acceptances and obligations issued by bank holding
companies,
as well as repurchase agreements entered into with banks (as distinct from
non-bank dealers) in accordance with the policies set forth under "Investment
Objective and Management Policies -- Investment Techniques and Strategies --
Repurchase Agreements" below. During periods when PanAgora U.K. determines
that
market conditions warrant adoption of a temporary defensive position, the Fund
may invest less than 25% of its total assets in the banking industry; during
such times, the Fund's assets will be invested in accordance with the Fund's
other investment policies. PanAgora U.K. may determine that the adoption of a
temporary defensive position with respect to issuers in the banking industry
21
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
is appropriate on the basis of such factors as political, economic, market or
regulatory developments adversely affecting that industry as compared to the
industries of other issuers of securities available for investment by the
Fund.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Investing in the Fund involves special considerations and risks, such as
those
described below:
INTEREST RATE RISK. The Fund's portfolio will be affected by general changes
in interest rates which will result in increases or decreases in the market
value of the obligations held by the Fund. The market value of the obligations
in the Fund's portfolio can be expected to vary inversely to changes in
prevailing interest rates. Investors should recognize that, in periods of
declining interest rates, the Fund's yield will tend to be somewhat higher
than
prevailing market rates, and in periods of rising interest rates, the Fund's
yield will tend to be somewhat lower. Also, when interest rates are falling,
the
inflow of net new money to the Fund from the continuous sale of its shares
will
likely be invested in portfolio instruments producing lower yields than the
balance of its portfolio, thereby reducing the Fund's current yield. In
periods
of rising interest rates, the opposite result can be expected to occur. To the
extent that U.S. interest rates are higher than foreign interest rates, the
Fund's yield may not be higher than that of a money market fund.
INVESTMENT IN FOREIGN SECURITIES. Investing in securities issued by foreign
governments and companies involves considerations and potential risks not
typically associated with investing in obligations issued by the United States
government and domestic corporations. Less information may be available about
foreign companies than about domestic companies, and foreign companies
generally
are not subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to
those
applicable to domestic companies. The values of foreign investments are
affected
by changes in currency rates or exchange control regulations, restrictions or
prohibitions on the repatriation of foreign currencies, application of foreign
tax laws, including withholding taxes, changes in governmental administration
or
economic or monetary policy (in the United States or abroad) or changed
circumstances in dealings between nations. Costs are incurred in connection
with
conversions between various
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
currencies. In addition, foreign brokerage commissions are generally higher
than
in the United States, and foreign securities markets may be less liquid, more
volatile and less subject to governmental supervision than in the United
States.
Investments in foreign countries could be affected by other factors not
present
in the United States, including expropriation, confiscatory taxation, lack of
uniform accounting and auditing standards and potential difficulties in
enforcing contractual obligations and could be subject to extended settlement
periods.
INVESTMENT IN EMS CURRENCY-DENOMINATED AND ECU-DENOMINATED SECURITIES. In
normally investing at least 20% of its net assets in securities denominated in
EMS currencies or in ECUs, the Fund will be subject to the risks associated
with
focusing investments in a particular region such as Western Europe. The
economies and markets of a region, for example, tend to be interrelated and
may
be adversely affected by political, economic and other events in a similar
manner.
CURRENCY EXCHANGE RATES. The Fund's share value may change significantly
when
the currencies, other than the U.S. dollar, in which its portfolio investments
are denominated strengthen or weaken against the U.S. dollar. Currency
exchange
rates generally are determined by the forces of supply and demand in the
foreign
exchange markets and the relative merits of investments in different countries
as seen from an international perspective. Currency exchange rates can also be
affected unpredictably by intervention by United States or foreign governments
or central banks or by currency controls or political developments in the
United
States or abroad.
NON-DIVERSIFICATION. The Fund, as a non-diversified investment company, may
invest in a smaller number of individual issuers than a diversified investment
company. Thus, an investment in the Fund may, due to changes in the financial
condition or in the market's assessment of those issuers, present greater risk
to an investor than an investment in a diversified investment company.
INDUSTRY CONCENTRATION. To the extent the Fund's investments are
concentrated
in the banking industry, the Fund will have correspondingly greater exposure
to
the risk factors that are characteristic of such investments. Sustained
increases in interest rates can adversely affect the availability and cost of
capital funds for a bank's lending activities, and a deterioration in general
economic conditions could increase the exposure to credit losses. In
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
addition, the value of, and the investment return on, the Fund's shares will
be
affected by economic or regulatory developments in or related to the banking
industry. The banking industry is also subject to the effects of the
concentration of loan portfolios in leveraged transactions and in particular
businesses, such as real estate, lesser-developed nation debt and competition
within the banking industry as well as with other types of financial
institutions. As discussed above, however, the Fund seeks to minimize its
exposure to such risks by investing only in debt securities that are
determined
to be of high quality.
FUTURES CONTRACTS, OPTIONS AND FORWARD CURRENCY CONTRACTS. In entering into
futures contracts, in purchasing and writing put and call options on foreign
currencies, and in entering into foreign currency contracts, as described
below
under "Investment Objective and Management Policies -- Investment Techniques
and
Strategies -- Future Contracts and Options on Futures Contracts," "-- Options
on
Foreign Currencies," and "-- Forward Currency Contracts," the Fund will be
subject to a number of risks and special considerations. Many of the
securities
held by the Fund will be denominated in currencies for which no, or only a
highly illiquid, futures or option market exists. Moreover, the market for
forward currency contracts may be limited with respect to certain currencies.
These factors will restrict the Fund's ability to hedge against the risk of
devaluation of currencies in which the Fund holds a substantial quantity of
securities and are unrelated to the qualitative rating that may be assigned to
any particular security. Where available, the successful use of futures
contracts, options on futures contracts, options on foreign currencies and
forward currency contracts as hedging techniques draws upon PanAgora U.K.'s
special skills and experience with respect to such instruments and usually
depends on PanAgora U.K.'s ability to forecast interest rate and currency
exchange rate movements correctly. Should interest or exchange rates move in
an
unexpected manner, the Fund may not achieve the anticipated benefits of
futures
contracts, options or forward currency contracts or may realize losses and
thus
be in a worse position than if those strategies had not been used. Unlike many
exchange-traded futures contracts and options on futures contracts, options on
currencies and forward currency contracts are subject to no daily price
fluctuation limits so that adverse market movements could continue with
respect
to those instruments to an unlimited extent over a period of time. In
24
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
addition, the correlation between movements in the prices of such instruments
and movements in the price of the securities and currencies hedged or used for
cover will not be perfect.
The Fund's ability to dispose of its positions in futures contracts, options
and forward currency contracts will depend on the availability of active
markets
in such instruments. Markets in options and futures with respect to a number
of
fixed-income securities and currencies are relatively new and still
developing.
PanAgora U.K. cannot predict the amount of trading interest that may exist in
various types of futures contracts, options and forward currency contracts.
Futures and options may be closed out only on the exchange on which the
contract
was entered into (or a linked exchange). Forward foreign currency contracts
may
be closed out only by the parties entering into an offsetting contract.
Therefore, no assurance can be given that the Fund will be able to utilize
these
instruments effectively for the purposes set forth above. Furthermore,
although
the Fund anticipates that its options and futures transactions will not
prevent
the Fund from qualifying as a "regulated investment company" for Federal
income
tax purposes, the Fund's ability to engage in options and futures transactions
may be limited by this tax consideration. See "Dividends, Distributions and
Taxes --Taxes." In writing options, the Fund will be subject to the risk of
loss
resulting from the difference between the premium received for the option and
the price of the futures contract or foreign currency underlying the option
that
the Fund must purchase or deliver upon exercise of the option.
LENDING PORTFOLIO SECURITIES. The risks associated with lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in the recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially. Loans will be made to firms deemed by PanAgora U.K. to be of good
standing and will not be made unless, in the judgment of PanAgora U.K., the
consideration to be earned from such loans would justify the risk. See
"Investment Objective and Management Policies -- Investment Techniques and
Strategies -- Lending Portfolio Securities."
REPURCHASE AGREEMENTS. The Fund bears a risk of loss in the event that the
other party to a repurchase agreement defaults on its obligations and the Fund
is delayed or prevented from exercising its rights to dispose of the
underlying
securities, including the risk of a possible decline in the value of
25
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SMITH BARNEY SHEARSON
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- -------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
the underlying securities during the period in which the Fund seeks to assert
its rights to them, the risk of incurring expenses associated with asserting
those rights and the risk of losing all or a part of the income from the
agreement.
WHEN-ISSUED SECURITIES. Securities purchased on a when-issued basis may
expose
the Fund to risk because the securities may experience fluctuations in value
prior to their actual delivery. The Fund will not accrue income with respect
to
a when-issued security prior to its stated delivery date. Purchasing
securities
on a when-issued basis can involve the additional risk that the yield
available
in the market when the delivery takes place actually may be higher than that
obtained in the transaction itself.
INVESTMENT TECHNIQUES AND STRATEGIES
The Fund is authorized to engage in any one or more of the specialized
investment techniques and strategies described below:
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Fund may enter into
futures contracts for the sale or purchase, for a set price on a future date,
of
fixed-income securities or foreign currencies which otherwise meet the Fund's
investment policies, to the extent permitted under rules and interpretations
of
the Commodity Futures Trading Commission (the "CFTC"), and may purchase and
write put and call options on futures contracts. A "sale" of a futures
contract
on debt securities or foreign currency entails the incurrence of a contractual
obligation to deliver the securities or foreign currencies called for by the
contract at a specified price on a specified date. A "purchase" of a futures
contract entails the incurrence of a contractual obligation to acquire the
securities or foreign currencies called for by the contract at a specified
price
on a specified date. Options on futures contracts to be written or purchased
by
the Fund will be traded on domestic and foreign exchanges, to the extent
permitted under rules and interpretations of the CFTC.
The investment techniques will be used only to hedge against anticipated
future changes in interest or exchange rates which otherwise might either
adversely affect the value of the Fund's portfolio securities or adversely
affect the prices of securities which the Fund intends to purchase at a later
26
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
date. See the Fund's Statement of Additional Information for further
discussion
of the use, risks and costs of futures contracts and options on futures
contracts.
The Fund will not (a) enter into any futures contracts or options on futures
contracts if immediately thereafter, the aggregate initial margin deposits on
all of the Fund's outstanding futures contracts and premiums paid on
outstanding
options on futures contracts, to establish such positions that are not
bonafide
hedging positions (as defined by the CFTC), would exceed 5% of the market
value
of the total assets of the Fund or (b) enter into any futures contracts or
options on futures contracts if the aggregate of the market value of the
Fund's
outstanding futures contracts and the market value of the currencies and
futures
contracts subject to outstanding options written by the Fund would exceed 50%
of
the market value of the total assets of the Fund. Each short position in a
futures or options contract entered into by the Fund will be covered by the
Fund's ownership of the underlying commodity or, in the case of a currency,
securities denominated in the currency. The Fund will not use leverage when it
enters into long futures or options contracts and for each such long position
the Fund will deposit cash or cash equivalents, such as U.S. government
securities or high-grade debt obligations, having a value equal to the
underlying commodity value of the contract, as collateral with its custodian,
or
with a designated sub-custodian, in a segregated account to be marked-to-
market
daily.
OPTIONS ON FOREIGN CURRENCIES. The Fund may purchase and write put and call
options on foreign currencies for the purpose of hedging against declines in
the
U.S. dollar value of foreign currency-denominated portfolio securities and
against increases in the U.S. dollar cost of such securities to be acquired.
As
in the case of other kinds of options, however, the writing of an option on a
foreign currency constitutes only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on a foreign currency may constitute an effective hedge
against fluctuations in exchange rates although, in the event of rate
movements
adverse to the Fund's position, it may forfeit the entire amount of the
premium
plus related transaction costs. Options on foreign currencies to be written or
purchased by the Fund are traded on domestic exchanges. The Fund may not
purchase or sell over-the-counter options on foreign currencies. No specific
percentage limitation will
27
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
apply to the Fund's investments in options on foreign currencies. See the
Fund's
Statement of Additional Information for further discussion of the use, risks
and
costs of options on foreign currencies.
FORWARD CURRENCY CONTRACTS. Forward currency contracts are agreements to
exchange one currency for another -- for example, to exchange a certain amount
of U.S. dollars for a certain amount of Japanese yen -- at a future date. The
date (which may be any agreed upon fixed number of days in the future), the
amount of currency to be exchanged and the price at which the exchange will
take
place will be negotiated and fixed for the term of the contract when the Fund
enters into the contract. Forward currency contracts are (a) traded in an
interbank market conducted directly between currency traders (typically,
commercial banks or other financial institutions) and their customers, (b)
generally have no deposit requirements and (c) are consummated without payment
of any commissions. The Fund, however, may enter into forward currency
contracts
containing either or both deposit requirements and commissions. In order to
assure that the Fund's forward currency contracts are not used to achieve
investment leverage, the Fund will segregate cash or readily marketable
securities in an amount at all times equal to or exceeding the Fund's
commitment
with respect to these contracts.
Upon maturity of a forward currency contract, the Fund may (a) pay for and
receive the underlying currency, (b) negotiate with the dealer to roll over
the
contract into a new forward currency contract with a new future settlement
date
or (c) negotiate with the dealer to terminate the forward contract by entering
into an offset with the currency trader whereby the Fund pays or receives the
difference between the exchange rate fixed in the contract and the then-
current
exchange rate. The Fund also may be able to negotiate such an offset prior to
maturity of the original forward contract. There can be no assurance that new
forward contracts or offsets will always be available to the Fund.
The Fund will use investment techniques involving forward currency contracts
only to hedge against anticipated future changes in interest or exchange rates
which otherwise might either adversely affect the value of the Fund's
portfolio
securities or the price of securities which the Fund intends to purchase at a
later date. In hedging specific portfolio positions, the Fund may enter into a
forward contract with respect to either the currency in
28
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
which the positions are denominated or another currency deemed appropriate by
PanAgora U.K. The amount that the Fund may invest in forward currency
contracts
is limited to the amount of the Fund's aggregate investments in foreign
currencies. See the Fund's Statement of Additional Information for further
discussion of the use, risks and costs of forward currency contracts.
LENDING PORTFOLIO SECURITIES. To generate income, the Fund may lend
portfolio
securities to brokers, dealers and other financial organizations. These loans,
if and when made, may not exceed 20% of the Fund's assets taken at value. The
Fund's loans of securities will be collateralized by cash, letters of credit
or
U.S. government securities. The cash or instruments collateralizing the Fund's
loans of securities will be maintained at all times in a segregated account
with
Boston Safe, or with a designated sub-custodian, in an amount at least equal
to
the current market value of the loaned securities.
REPURCHASE AGREEMENTS. The Fund may engage in repurchase agreement
transactions only with respect to instruments in which the Fund is authorized
to
invest. While there is no limitation on the amount of the Fund's assets that
may
be invested in repurchase agreements terminable in less than seven days,
repurchase agreements maturing in more than seven days -- together with other
illiquid securities -- will not exceed 10% of the Fund's total net assets. The
Fund may engage in repurchase agreement transactions with certain member banks
which are the issuers of instruments acceptable for purchase by the Fund and
with certain dealers on the Federal Reserve Bank of New York's list of
reporting
dealers. Under the terms of a typical repurchase agreement, the Fund acquires
an
underlying debt obligation for a relatively short period (usually not more
than
seven days) subject to an obligation of the seller to repurchase, and the Fund
to resell, the obligation at an agreed-upon price and time, thereby
determining
the yield during the Fund's holding period. This arrangement results in a
fixed
rate of return that is not subject to market fluctuations during the Fund's
holding period. The value of the securities will be monitored on an ongoing
basis by PanAgora U.K. or Boston Advisors to ensure that the value is at least
equal at all times to the total amount of the repurchase obligation, including
interest. PanAgora U.K. or Boston Advisors also monitors on an
29
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
ongoing basis the collateral and creditworthiness of those banks and dealers
with which the Fund enters into repurchase agreements to evaluate potential
risks.
WHEN-ISSUED SECURITIES. The Fund may purchase securities on a when-issued
basis, in which case payment for the securities typically occurs within 30 to
45
days after the purchase. The Fund will not enter into a when-issued securities
transaction for the purpose of leverage, but may sell the right to acquire a
when-issued security prior to its acquisition if PanAgora U.K. deems it
advantageous to do so. The payment obligation and the interest rate that will
be
received in when-issued securities transactions are fixed at the time the
buyer
enters into the commitment. Because of fluctuations in the value of securities
purchased on a when-issued basis, the yields obtained on the securities may be
higher or lower than the yields available in the market on the dates when the
investments are actually delivered to the buyers. When-issued securities may
include securities purchased on a "when, as and if issued" basis under which
the
issuance of the security depends on the occurrence of a subsequent event, such
as approval of a merger, corporate reorganization or debt restructuring. The
Fund will establish with Boston Safe, or with a designated sub-custodian, a
segregated account consisting of cash, U.S. government securities or other
liquid high-grade debt obligations in an amount equal to the amount of its
when-issued securities purchase commitments.
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment restrictions that may
not
be changed without approval of a majority of the Fund's outstanding voting
securities. Included among those fundamental restrictions are the following:
1. The Fund will invest no more than 25% of the value of its total assets in
securities of issuers in any one industry other than the banking
industry,
except that this limitation is not applicable to the Fund's investments
in
U.S. government securities. For purposes of this restriction, the Fund
will
treat securities issued by a foreign government or a supranational
organization and the agencies and instrumentalities of that foreign
government or supranational organization to be securities issued by
issuers
in a single industry.
30
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
2. The Fund will not borrow money, except that the Fund may borrow from
banks
for temporary or emergency (not leveraging) purposes, including the
meeting
of redemption requests that might otherwise require the untimely
disposition of securities, in an amount not to exceed 15% (or 5%, in the
event that such borrowing is made for purposes other than the meeting of
redemption requests) of the value of the Fund's total assets (including
the
amount borrowed) valued at market less liabilities (not including the
amount borrowed) at the time the borrowing is made. Whenever the Fund's
borrowings exceed 5% of the value of its total assets, the Fund will not
make any additional investments.
3. The Fund will not pledge, hypothecate, mortgage or otherwise encumber its
assets, except to secure permitted borrowings.
4. The Fund will not lend any funds or other assets, except through
purchasing
obligations, lending portfolio securities and entering into repurchase
agreements, in each case consistent with the Fund's investment objective
and policies.
Certain other investment restrictions adopted by the Fund are described in
the
Statement of Additional Information.
PORTFOLIO TRANSACTIONS AND TURNOVER
The Fund's Board of Trustees has determined that, to the extent consistent
with applicable provisions of the 1940 Act and rules and exemptions adopted by
the SEC under the 1940 Act, transactions for the Fund may be executed through
Smith Barney Shearson or a Smith Barney Shearson affiliated broker if, in the
judgment of PanAgora U.K., the use of an affiliated broker-dealer is likely to
result in price and execution at least as favorable to the Fund as those
obtainable through other qualified broker-dealers, and if, in the transaction,
the affiliated broker-dealer charges the Fund a fair and reasonable rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.
The Fund may engage in active short-term trading to benefit from yield
disparities among different issues of securities, to seek short-term profits
during periods of fluctuating interest rates or for other reasons. See
"Investment Objective and Management Policies -- Risk Factors and Special
31
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
Considerations -- Futures Contracts, Options and Forward Currency Contracts"
and
"Dividends, Distributions and Taxes -- Taxes" for tax considerations
associated
with active short-term trading. Such trading will increase the Fund's rate of
portfolio turnover, certain transaction expenses and the incidence of short-
term
capital gain taxable as ordinary income. The Fund cannot accurately predict
its
portfolio turnover rate, but anticipates that its annual portfolio turnover
rate
will not exceed 150%. An annual portfolio turnover rate of 150% would occur,
for
example, when all of the long-term securities in the Fund's portfolio are
replaced one-and-a-half times during a period of one year. The Fund will not
consider portfolio turnover rate a limiting factor in making investment
decisions consistent with its investment objective and management policies.
- --------------------------------------------------------------------
PURCHASE OF SHARES
Purchases of Fund shares must be made through a brokerage account maintained
with Smith Barney Shearson or with an Introducing Broker, except that
investors
purchasing shares of the Fund through a qualified retirement plan may do so
directly through the Fund's transfer agent. When purchasing shares of the Fund
through the 401(k) Program, investors must specify whether the purchase is for
Class A or Class B shares. No maintenance fee will be charged in connection
with
a brokerage account through which an investor purchases or holds shares.
Purchases are effected at the net asset value per share next determined after
a
purchase order is received by Smith Barney Shearson or an Introducing Broker
(the "trade date"). Payment is generally due to Smith Barney Shearson or an
Introducing Broker on the fifth business day after the trade date (the
"settlement date"). Investors who make payment prior to the settlement date
may
permit the payment to be held in their brokerage accounts or may designate a
temporary investment (such as a money market fund in the Smith Barney Shearson
Group of Funds) for the payment until the settlement date. The Fund reserves
the
right to reject any purchase order and to suspend the offering of shares for a
period of time.
Purchase orders received by Smith Barney Shearson or an Introducing Broker
prior to the close of regular trading on the NYSE, currently 4:00 p.m., New
York
time, on any day that the Fund calculates its net assets
32
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PURCHASE OF SHARES (CONTINUED)
value, are priced according to the net asset value determined on that day.
Purchase orders received after the close of regular trading on the NYSE are
priced as of the time the net asset value per share is next determined. See
"Valuation of Shares."
SYSTEMATIC INVESTMENT PLAN. The Fund offers shareholders a Systematic
Investment Plan under which shareholders may authorize Smith Barney Shearson
or
an Introducing Broker to place a purchase order each month or quarter for Fund
shares in an amount not less than $100. The purchase price is paid
automatically
from cash held in the shareholder's Smith Barney Shearson brokerage account or
through the automatic redemption of the shareholder's shares of a Smith Barney
Shearson money market fund. For further information regarding the Systematic
Investment Plan, shareholders should contact their Smith Barney Shearson
Financial Consultants.
MINIMUM INVESTMENT. The minimum initial investment in the Fund is $2,500 and
the minimum subsequent investment is $1,000, except that for purchases through
(a) IRAs and Self-Employed Retirement Plans, the minimum initial and
subsequent
investment in the Fund are $250 and $100, respectively, (b) retirement plans
qualified under Section 403(b)(7) or Section 401(a) of the Code, the minimum
initial and subsequent investment in the Fund are both $25 and (c) purchases
through the Fund's Systematic Investment Plan, the minimum initial and
subsequent investment are each $100. No minimum investment requirements are
imposed on employees of Travelers, Inc. ("Travelers") and its subsidiaries,
including Smith Barney Shearson. The Fund reserves the right at any time to
vary
the initial and subsequent investment minimums. Certificates for Fund shares
are
issued upon a written request to the Fund's transfer agent, TSSG, a subsidiary
of First Data Corporation.
CLASS A SHARES
The public offering price for Class A shares is the per share net asset
value
of that Class. No initial sales charge or CDSC is imposed on Class A shares.
Class A shares are offered for sale directly to the general public as well as
to
Participating Plans, as described below.
33
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PURCHASE OF SHARES (CONTINUED)
CLASS B SHARES
Class B shares may be acquired only through exchanges with Class B shares of
other funds in the Smith Barney Shearson Group of Funds and are subject to the
highest CDSC, if any, of the shares from which the exchange or any preceding
exchange was made, except that Participating Plans may purchase Class B shares
directly at net asset value. Class B shares purchased directly and not
subsequently exchanged are not subject to a CDSC. See "Redemption of Shares --
Contingent Deferred Sales Charge -- Class B Shares" and "Exchange Privilege".
SMITH BARNEY SHEARSON 401(K) PROGRAM
Investors may be eligible to participate in the 401(k) Program, which is
generally designed to assist employers or plan sponsors in the creation and
operation of retirement plans under Section 401(a) of the Code. To the extent
applicable, the same terms and conditions are offered to all Participating
Plans
which include both 401(k) plans and other types of participant directed,
tax-qualified employee benefit plans.
Under the 401(k) Program, a Participating Plan can invest in Class A and
Class
B shares. Both Classes of shares acquired through the 401(k) Program are
subject
to the same distribution fee as shares acquired by other investors. Class A
shares acquired by Participating Plans are not subject to any CDSC while Class
B
shares may become subject to a CDSC upon certain redemptions.
It is anticipated that Participating Plans will purchase shares of the Fund
as
part of a multi-fund investment program. Once a Participating Plan has made an
initial investment in shares of the Fund or other funds in the Smith Barney
Shearson Group of Funds, all of its subsequent investments in the Fund must be
made in the same Class of shares. Participating Plans will be eligible to
acquire shares of the Fund so long as they acquire the same Class of shares of
the Fund as shares acquired of other funds in the Plan's multi-fund investment
program.
If the Participating Plan's initial purchase is only in shares of the Fund,
the availability of Class A and Class B shares of the Fund will be determined
by
the criteria set forth below.
34
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PURCHASE OF SHARES (CONTINUED)
CLASS A SHARES. Class A shares are offered without a sales charge or CDSC to
any Participating Plan that: (a) purchases $750,000 or more of Class A shares
of
the Fund or one or more funds in the Smith Barney Shearson Group of Funds that
offer one or more Classes sold subject to either an initial sales charge or
CDSC; (b) has 250 or more employees eligible to participate in the
Participating
Plan at the time of initial investment in the Fund; or (c) currently holds
Class
A shares in the Fund that were received as a result of an exchange of Class B
shares as described below.
CLASS B SHARES. Class B shares are offered to Participating Plans that: (a)
purchase less than $250,000 of Class B shares of the Fund or one or more funds
in the Smith Barney Shearson Group of Funds that offer one or more Classes
sold
subject to either an initial sales charge or CDSC; and (b) have less than 100
employees eligible to participate in the Participating Plan at the time of
initial investment in the Fund. Class B shares of the Fund may be acquired
directly or through an exchange by Participating Plans at net asset value per
share without the imposition of a CDSC. However, if a shareholder exchanges
Class B shares of the Fund with Class B shares of another fund in the Smith
Barney Shearson Group of Funds, the shares acquired through the exchange may
be
subject to a CDSC of 3% of redemption proceeds, if redeemed within eight years
of the date the Participating Plan first purchased Class B shares. No CDSC is
imposed to the extent that the net asset value of the Class B shares redeemed
does not exceed (a) the current net asset value of Class B shares purchased
through reinvestment of dividends or capital gains distributions, plus (b) the
current net asset value of Class B shares purchased more than eight years
prior
to the redemption, plus (c) increases in the net asset value of the
shareholder's Class B shares above the purchase payments made during the
preceding eight years. The CDSC applicable to a Participating Plan depends on
the number of years since the Participating Plan first became a holder of
Class
B shares, unlike the CDSC applicable to other Class B shareholders, which
depends on the number of years since those shareholders made the purchase
payment from which the amount is being redeemed. See "Redemption of Shares --
Contingent Deferred Sales Charge -- Class B Shares."
The CDSC will be waived on redemptions of Class B shares in connection with
lump-sum or other distributions made by a Participating Plan as a result of:
(a)
the retirement of an employee in the Participating Plan; (b) the
35
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
PURCHASE OF SHARES (CONTINUED)
termination of employment of an employee in the Participating Plan; (c) the
death or disability of an employee in the Participating Plan; (d) the
attainment
of age 59 1/2 by an employee in the Participating Plan; (e) hardship of an
employee in the Participating Plan to the extent permitted under Section
401(k)
of the Code; or (f) redemptions of Class B shares in connection with a loan
made
by the Participating Plan to an employee.
Eight years after the date a Participating Plan acquired its first Class B
share, it will be offered the opportunity to exchange all of its Class B
shares
for Class A shares of the Fund. Such Plans will be notified of the pending
exchange in writing approximately 90 days before the eighth anniversary of the
purchase date and, unless the exchange has been rejected in writing, the
exchange will occur on or about the eighth anniversary date. Once the exchange
has occurred, a Participating Plan will not be eligible to acquire additional
Class B shares of the Fund but instead may acquire Class A shares of the Fund.
If the Participating Plan elects not to exchange all of its Class B shares at
that time, each Class B share held by the Participating Plan will have the
same
conversion feature as Class B shares held by other investors. See "Variable
Pricing System -- Class B Shares."
Participating Plans wishing to acquire shares of the Fund through the 401(k)
Program must purchase shares from the Fund's transfer agent. For further
information regarding the 401(k) Program, investors should contact their Smith
Barney Shearson Financial Consultants.
- --------------------------------------------------------------------
REDEMPTION OF SHARES
Shareholders may redeem their shares on any day on which the Fund calculates
its net asset value. See "Valuation of Shares." Redemption requests received
in
proper form prior to the close of regular trading on the NYSE will be effected
at the net asset value per share determined on that day. Redemption requests
received after the close of regular trading on the NYSE will be effected at
the
net asset value as next determined. If a shareholder holds shares in more than
one Class, any request for redemption must specify the Class being redeemed.
In
the event of a failure to specify which Class, or if the investor owns fewer
shares of the Class than specified, the
36
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
REDEMPTION OF SHARES (CONTINUED)
redemption request will be delayed until the Fund's transfer agent receives
further instructions from Smith Barney Shearson, or if the shareholder's
account
is not with Smith Barney Shearson, from the shareholder directly.
The Fund normally transmits redemption proceeds for credit to the
shareholder's account at Smith Barney Shearson or an Introducing Broker at no
charge (other than any applicable CDSC) within seven days after receipt of a
redemption request. Generally, these funds will not be invested for the
shareholder's benefit without specific instruction and Smith Barney Shearson
will benefit from the use of temporarily uninvested funds. A shareholder who
pays for Fund shares by personal check will be credited with the proceeds of a
redemption of those shares only after the purchase check has been collected,
which may take up to 10 days or more. Shareholders who anticipate the need for
more immediate access to their investment should purchase shares with Federal
funds, a bank wire or by a certified or cashier's check.
A Fund account that is reduced by a shareholder to a value of $500 or less
may
be subject to redemption by the Fund, but only after the shareholder has been
given at least 30 days in which to increase the account balance to more than
$500.
Shares may be redeemed in one of the following ways:
REDEMPTIONS THROUGH SMITH BARNEY SHEARSON
Redemption requests may be made through Smith Barney Shearson or an
Introducing Broker. A shareholder desiring to redeem shares represented by
share
certificates also must present the certificates to Smith Barney Shearson or an
Introducing Broker endorsed for transfer (or accompanied by a stock power),
endorsed exactly as the shares are registered. Redemption requests involving
shares represented by certificates will not be deemed to have been submitted
until the certificates are received by the Fund's transfer agent in proper
form.
REDEMPTION BY MAIL
Shares may be redeemed by submitting a written request for redemption to:
37
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SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
REDEMPTION OF SHARES (CONTINUED)
Smith Barney Shearson Worldwide Prime Assets Fund
Class A or B (please specify)
c/o The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, Massachusetts 02205-9134
A written redemption request to TSSG or your Smith Barney Shearson Financial
Consultant must (a) state the Class and number or dollar amount of shares to
be
redeemed, (b) identify the shareholder's account number and (c) be signed by
each registered owner exactly as the shares are registered. If the shares to
be
redeemed were issued in certificate form, the certificates must be endorsed
for
transfer (or be accompanied by an endorsed stock power) and must be submitted
to
TSSG together with the redemption request. Any signature appearing on a
redemption request, share certificate or stock power must be guaranteed by a
domestic bank, savings and loan institution, domestic credit union, member
bank
of the Federal Reserve System or member firm of a national securities
exchange.
TSSG may require additional supporting documents for redemptions made by
corporations, executors, administrators, trustees or guardians. A redemption
request will not be deemed properly received until TSSG receives all required
documents in proper form.
AUTOMATIC CASH WITHDRAWAL PLAN
The Fund offers shareholders an automatic cash withdrawal plan under which
shareholders who own shares of the Fund with a value of at least $10,000 may
elect to receive periodic cash payments of at least $50 monthly. Retirement
plan
accounts are eligible for the automatic cash withdrawal plan only where the
shareholder is eligible to receive qualified distributions and has an account
value of at least $5,000. Any applicable CDSC will be waived on amounts
withdrawn by a shareholder that do not exceed 2% per month of the value of the
shareholder's shares subject to the CDSC at the time the withdrawal plan
commences. For further information regarding the automatic cash withdrawal
plan,
shareholders should contact their Smith Barney Shearson Financial Consultants.
38
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
REDEMPTION OF SHARES (CONTINUED)
CONTINGENT DEFERRED SALES CHARGE -- CLASS B SHARES
Class B shares acquired only upon an exchange with another fund in the Smith
Barney Shearson Group of Funds are subject upon redemption to the highest CDSC
(if any) of the shares from which the exchange or any preceding exchange was
made. Under the 401(k) Program, except in the case of redemptions of shares
purchased directly or indirectly and not subsequently exchanged by
Participating
Plans, a CDSC payable to Smith Barney Shearson is imposed on the redemption of
Class B shares that causes the current value of a shareholder's account to
fall
below the dollar amount of all payments by the shareholder for the Class B
shares (or any predecessor of those shares) that were exchanged for Class B
shares of the Fund ("purchase payments") during the preceding five years. No
charge is imposed to the extent the net asset value of the Class B shares
redeemed does not exceed (a) the current net asset value of Class B shares
purchased through reinvestment of dividends or capital gains distributions,
plus
(b) the current net asset value of Class B shares purchased more than five
years
prior to the redemption, plus (c) increases in the net asset value of the
shareholder's Class B shares above the purchase payments made during the
preceding five years.
In circumstances in which the CDSC is imposed, the amount of the charge will
depend on: (a) the CDSC schedule applicable to the shares of the fund that
were
exchanged for the shares being redeemed; and (b) the number of years since the
shareholder made the purchase payment from which the amount is being redeemed.
A
redemption of shares acquired in exchange for shares that had been the subject
of two or more exchanges among funds with differing CDSC schedules will be
subject to the highest applicable CDSC schedule. See "Exchange Privilege."
Solely for purposes of determining the number of years since a purchase
payment,
all purchase payments during a month will be aggregated and deemed to have
been
made on the last day of the preceding Smith Barney Shearson statement month.
The
purchase payment from which a redemption is made is assumed to be the earliest
purchase payment from which a full redemption has not already been effected.
Class B shares will automatically convert to Class A shares eight years
after
the date they were purchased. For this purpose, the date of purchase of Class
B
shares of the Fund refers to the purchase date of the shares given in
39
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- ---------------------------------------------------------------------------
REDEMPTION OF SHARES (CONTINUED)
exchange for the Class B shares of the Fund. The first of these conversions
will
commence on or about September 30, 1994. See "Variable Pricing System -- Class
B
Shares."
WAIVERS OF CDSC. The CDSC will be waived on: (a) exchanges (see "Exchange
Privilege"); (b) automatic cash withdrawals in amounts equal to or less than
2%
per month of the value of the shareholder's shares at the time the withdrawal
plan commences (see above); (c) redemptions of shares following the death or
disability of the shareholder; (d) in connection with certain post-retirement
distributions and withdrawals from retirement plans or IRAs; (e) involuntary
redemptions; (f) redemption proceeds from other funds in the Smith Barney
Shearson Group of Funds that are reinvested within 30 days of the redemption;
(g) redemptions of shares in connection with a combination of any investment
company with the Fund by merger, acquisition of assets or otherwise; and (h)
certain redemptions of shares of the Fund in connection with lump-sum or other
distributions made by a Participating Plan. See "Purchase of Shares -- Smith
Barney Shearson 401(k) Program."
- --------------------------------------------------------------------
VALUATION OF SHARES
Each Class' net asset value per share is calculated on each day, Monday
through Friday, except days on which the NYSE is closed. The NYSE currently is
scheduled to be closed on New Year's Day, Presidents' Day, Good Friday,
Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas, and on the
preceding Friday or subsequent Monday when one of these holidays falls on a
Saturday or Sunday, respectively.
The net asset value per share of a given Class is determined as of the close
of regular trading on the NYSE and is computed by dividing the value of the
Fund's net assets attributable to that Class by the total number of shares of
that Class outstanding. Generally, the Fund's investments are valued at market
value or, in the absence of a market value with respect to any securities, at
fair value as determined by or under the direction of the Fund's Board of
Trustees. Portfolio securities that are traded primarily on foreign exchanges
generally are valued at the preceding closing values of the securities on
their
respective exchanges, except that when an occurrence subsequent to the time a
value was so established is likely to have changed
40
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
VALUATION OF SHARES (CONTINUED)
that value, then the fair market value of those securities will be determined
by
consideration of other factors by or under the direction of the Fund's Board
of
Trustees or its delegates. A security that is traded primarily on a domestic
or
foreign exchange is valued at the last sale price on that exchange or, if
there
were no sales during the day, at the current quoted bid price. Debt securities
(other than U.S. government securities and short-term obligations) are valued
by
Boston Advisors after consultation with independent pricing services approved
by
the Fund's Board of Trustees. Investments in U.S. government securities (other
than short-term securities) are valued at the average of the quoted bid and
asked prices in the over-the-counter market. Short-term investments that
mature
in 60 days or less are valued at amortized cost whenever the Fund's Board of
Trustees determines that amortized cost reflects fair value of those
investments. An option that is written by the Fund generally is valued at the
last sale price or, in the absence of the last sale price, the last offer
price.
An option that is purchased by the Fund generally is valued at the last sale
price or, in the absence of the last sale price, the last bid price. The value
of a futures contract equals the unrealized gain or loss on the contract that
is
determined by marking the contract to the current settlement price for a like
contract on the valuation date of the futures contract. A settlement price may
not be used if the market makes a limit move with respect to a particular
futures contract or if the securities underlying the futures contract
experience
significant price fluctuations after the determination of the settlement
price.
When a settlement price cannot be used, futures contracts will be valued at
their fair market value as determined by or under the direction of the Fund's
Board of Trustees. For purposes of calculating the Fund's net asset value per
share, assets and liabilities initially expressed in foreign currency values
will be converted into U.S. dollar values based on a formula prescribed by the
Fund or, if the information required by the formula is unavailable, as
determined in good faith by the Fund's Board of Trustees. In carrying out the
Board's valuation policies, Boston Advisors, as administrator, may consult
with
an independent pricing service retained by the Fund. Further information
regarding the Fund's valuation policies is contained in the Statement of
Additional Information.
41
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- --------------------------------------------------------------------
EXCHANGE PRIVILEGE
Shares of each Class may be exchanged for shares of the same class in the
following funds in the Smith Barney Shearson Group of Funds, to the extent
shares are offered for sale in the shareholder's state of residence:
<TABLE>
<CAPTION>
EXCHANGEABLE
WITH SHARES
OF THE
FOLLOWING
CLASSES: FUND NAME AND INVESTMENT OBJECTIVE:
<S> <C>
---------------------------------------------------------------------------
MUNICIPAL BOND FUNDS
A* SMITH BARNEY SHEARSON LIMITED MATURITY MUNICIPALS FUND, an
intermediate-term municipal bond fund investing in
investment
grade obligations.
A*, B* SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC., an
intermediate- and long-term municipal bond fund.
A*, B* SMITH BARNEY SHEARSON TAX-EXEMPT INCOME FUND, an
intermediate-
and long-term municipal securities bond fund investing in
medium- and lower-rated securities.
A*, B* SMITH BARNEY SHEARSON ARIZONA MUNICIPALS FUND INC., an
intermediate- and long-term municipal bond fund designed for
Arizona investors.
A* SMITH BARNEY SHEARSON INTERMEDIATE MATURITY CALIFORNIA
MUNICIPALS FUND, an intermediate-term municipal bond fund
designed for California investors.
A*, B* SMITH BARNEY SHEARSON CALIFORNIA MUNICIPALS FUND INC., an
intermediate- and long-term municipal bond fund designed for
California investors.
A*, B* SMITH BARNEY SHEARSON FLORIDA MUNICIPALS FUND, an
intermediate- and long-term municipal bond fund designed for
Florida investors.
A*, B* SMITH BARNEY SHEARSON MASSACHUSETTS MUNICIPALS FUND, an
intermediate- and long-term municipal bond fund designed for
Massachusetts investors.
</TABLE>
42
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
<TABLE>
<CAPTION>
EXCHANGEABLE
WITH SHARES
OF THE
FOLLOWING
CLASSES: FUND NAME AND INVESTMENT OBJECTIVE:
---------------------------------------------------------------------------
<S> <C>
A*, B* SMITH BARNEY SHEARSON NEW JERSEY MUNICIPALS FUND INC., an
intermediate- and long-term municipal bond fund designed for
New Jersey investors.
A* SMITH BARNEY SHEARSON INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND, an intermediate-term bond fund designed for
New York investors.
A*, B* SMITH BARNEY SHEARSON NEW YORK MUNICIPALS FUND INC., an
intermediate- and long-term municipal bond fund designed for
New York investors.
INCOME FUNDS
A*, B* SMITH BARNEY SHEARSON ADJUSTABLE RATE GOVERNMENT INCOME
FUND,
seeks high current income while limiting the degree of
fluctuation in net asset value resulting from movement in
interest rates.
A*, B* SMITH BARNEY SHEARSON SHORT-TERM WORLD INCOME FUND, invests
in
high quality, short-term debt securities denominated in U.S.
dollars as well as a range of foreign currencies.
A* SMITH BARNEY SHEARSON LIMITED MATURITY TREASURY FUND,
invests
exclusively in securities issued by the United States
Treasury
and other United States government securities.
A*, B* SMITH BARNEY SHEARSON DIVERSIFIED STRATEGIC INCOME FUND,
seeks
high current income primarily by allocating and reallocating
its assets among various types of fixed-income securities.
A*, B* SMITH BARNEY SHEARSON MANAGED GOVERNMENTS FUND INC., invests
in obligations issued or guaranteed by the United States
government and its agencies and instrumentalities with
emphasis on mortgage-backed government securities.
</TABLE>
43
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
<TABLE>
<CAPTION>
EXCHANGEABLE
WITH SHARES
OF THE
FOLLOWING
CLASSES: FUND NAME AND INVESTMENT OBJECTIVE:
---------------------------------------------------------------------------
<S> <C>
A*, B* SMITH BARNEY SHEARSON GOVERNMENT SECURITIES FUND, seeks a
high
current return by investing in U.S. government securities.
A*, B* SMITH BARNEY SHEARSON INVESTMENT GRADE BOND FUND, seeks
maximum current income consistent with prudent investment
management and preservation of capital by investing in
corporate bonds.
A*, B* SMITH BARNEY SHEARSON HIGH INCOME FUND, seeks high current
income by investing in high-yielding corporate bonds,
debentures and notes.
A*, B* SMITH BARNEY SHEARSON GLOBAL BOND FUND, seeks current income
and capital appreciation by investing in bonds, debentures
and
notes of foreign and domestic issuers.
GROWTH AND INCOME FUNDS
A*, B* SMITH BARNEY SHEARSON CONVERTIBLE FUND, seeks current income
and capital appreciation by investing in convertible
securities.
A*, B* SMITH BARNEY SHEARSON UTILITIES FUND, seeks total return by
investing in equity and debt securities of utilities
companies.
A*, B* SMITH BARNEY SHEARSON STRATEGIC INVESTORS FUND, seeks high
total return consisting of current income and capital
appreciation by investing in a combination of equity, fixed-
income and money market securities.
A*, B* SMITH BARNEY SHEARSON PREMIUM TOTAL RETURN FUND, seeks total
return by investing in dividend-paying common stocks.
A*, B* SMITH BARNEY SHEARSON GROWTH AND INCOME FUND, seeks income
and
long-term capital growth by investing in income-producing
equity securities.
</TABLE>
44
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
<TABLE>
<CAPTION>
EXCHANGEABLE
WITH SHARES
OF THE
FOLLOWING
CLASSES: FUND NAME AND INVESTMENT OBJECTIVE:
---------------------------------------------------------------------------
<S> <C>
GROWTH FUNDS
A*, B* SMITH BARNEY SHEARSON APPRECIATION FUND INC., seeks long-
term
appreciation of capital.
A*, B* SMITH BARNEY SHEARSON FUNDAMENTAL VALUE FUND INC., seeks
long-term capital growth with current income as a secondary
objective.
A*, B* SMITH BARNEY SHEARSON SECTOR ANALYSIS FUND, seeks capital
appreciation by following a sector strategy.
A*, B* SMITH BARNEY SHEARSON TELECOMMUNICATIONS GROWTH FUND, seeks
capital appreciation, with income as a secondary
consideration.
A*, B* SMITH BARNEY SHEARSON AGGRESSIVE GROWTH FUND INC., seeks
above-average capital growth.
A*, B* SMITH BARNEY SHEARSON SPECIAL EQUITIES FUND, seeks long-term
capital appreciation by investing in equity securities
primarily of emerging growth companies.
A*, B* SMITH BARNEY SHEARSON GLOBAL OPPORTUNITIES FUND, seeks
long-term capital growth by investing principally in the
common stocks of foreign and domestic issuers.
A*, B* SMITH BARNEY SHEARSON EUROPEAN FUND, seeks long-term capital
appreciation by investing primarily in securities of issuers
based in European countries.
A*, B* SMITH BARNEY SHEARSON PRECIOUS METALS AND MINERALS FUND
INC.,
seeks long-term capital appreciation by investing primarily
in
precious metal- and mineral-related companies and gold
bullion.
</TABLE>
45
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
<TABLE>
<CAPTION>
EXCHANGEABLE
WITH SHARES
OF THE
FOLLOWING
CLASSES: FUND NAME AND INVESTMENT OBJECTIVE:
---------------------------------------------------------------------------
<S> <C>
MONEY MARKET FUNDS
** SMITH BARNEY SHEARSON MONEY MARKET FUND, invests in a
diversified portfolio of high quality money market
instruments.
*** SMITH BARNEY SHEARSON DAILY DIVIDEND FUND INC., invests in a
diversified portfolio of high quality money market
instruments.
*** SMITH BARNEY SHEARSON GOVERNMENT AND AGENCIES FUND INC.,
invests in short-term United States government and agency
securities.
*** SMITH BARNEY SHEARSON MUNICIPAL MONEY MARKET FUND INC.,
invests in short-term high quality municipal obligations.
*** SMITH BARNEY SHEARSON CALIFORNIA MUNICIPAL MONEY MARKET
FUND,
invests in short-term, high quality California municipal
obligations.
*** SMITH BARNEY SHEARSON NEW YORK MUNICIPAL MONEY MARKET FUND,
invests in short-term, high quality New York municipal
obligations.
---------------------------------------------------------------------------
<FN>
*Shares of this fund are subject to a sales charge or CDSC.
**Shares of this money market fund may be exchanged for Class B shares of
the
Fund.
***Shares of this money market fund may be exchanged for Class A shares of
the
Fund.
</TABLE>
TAX EFFECT. The exchange of shares of one fund for shares of another fund is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder. Therefore, an exchanging shareholder may realize
a
taxable gain or loss in connection with an exchange.
CLASS A EXCHANGES. Shareholders of the Fund who wish to exchange all or a
portion of their Class A shares in the Fund for Class A shares in other funds
of
the Smith Barney Shearson Group of Funds listed above may do so subject to the
payment of an appropriate "sales charge differential" upon the exchange. The
"sales charge differential" is limited to a percentage rate no
46
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
greater than the excess of the sales charge rate applicable to purchases of
shares of the mutual fund being acquired in the exchange over the sales charge
rate(s) actually paid on the mutual fund shares relinquished in the exchange
and
on any predecessor of those shares. For purposes of the exchange privilege,
shares obtained through automatic reinvestment of dividends, as described
below,
are treated as having paid the same sales charges applicable to the shares on
which the dividends were paid. However, except in the case of the 401(k)
program, if no sales charge was imposed upon the initial purchase of the
shares
(as in the case of Class A shares of the Fund), any shares obtained through
automatic reinvestment will be subject to a sales charge differential upon
exchange.
Class A shareholders of the funds in the Smith Barney Shearson Group of
Funds
who wish to exchange all or a portion of their shares for Class A shares of
the
Fund may do so without imposition of any sales charge or exchange fee and will
be subject to the distribution fee applicable to Class A shares of the Fund
upon
the exchange.
CLASS B EXCHANGES. Class B shareholders of the Fund who wish to exchange all
or a portion of their Class B shares for Class B shares in any of the funds
identified above may do so without imposition of an exchange fee. In the event
Class B shareholders of the Fund wish to exchange all or a portion of their
shares for Class B shares in any of these funds imposing a higher CDSC than
that
imposed by the Fund, the exchanged Class B shares will be subject to the
higher
applicable CDSC. Upon an exchange, the new Class B shares will be deemed to
have
been purchased on the same date as the Class B shares of the Fund (or any
predecessor of those shares) that have been exchanged.
ADDITIONAL INFORMATION REGARDING THE EXCHANGE PRIVILEGE. Shareholders
exercising the exchange privilege with any of the other funds in the Smith
Barney Shearson Group of Funds should review the prospectus of that fund
carefully prior to making an exchange. Smith Barney Shearson reserves the
right
to reject any exchange request. The exchange privilege may be modified or
terminated at any time after written notice to shareholders. Although the
exchange privilege is an important benefit, excessive exchange transactions
can
be detrimental to the Fund's performance and its shareholders. The Fund's
investment adviser may determine that a pattern of frequent exchanges is
excessive and contrary to the best interests of the Fund's other
47
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
EXCHANGE PRIVILEGE (CONTINUED)
shareholders. In this event, the Fund's investment adviser will notify Smith
Barney Shearson, and Smith Barney Shearson may, at its discretion, decide to
limit additional purchases and/or exchanges by the shareholder. Upon such a
determination, Smith Barney Shearson will provide notice in writing or by
telephone to the shareholder at least 15 days prior to suspending the exchange
privilege and during the 15-day period the shareholder will be required to (a)
redeem his or her shares in the Fund or (b) remain invested in the Fund or
exchange into any of the funds in the Smith Barney Shearson Group of Funds
ordinarily available, which position the shareholder would expect to maintain
for a significant period of time. All relevant factors will be considered in
determining what constitutes an abusive pattern of exchanges. For further
information regarding the exchange privilege or to obtain the current
prospectuses for members of the Smith Barney Shearson Group of Funds,
investors
should contact their Smith Barney Shearson Financial Consultants.
- --------------------------------------------------------------------
DISTRIBUTOR
Smith Barney Shearson is located at 388 Greenwich Street, New York, New York
10013 and serves as distributor of the Fund's shares. Smith Barney Shearson is
paid an annual distribution fee with respect to Class A and Class B shares at
the rate of .90% of the value of the average daily net assets attributable to
the respective Class. The fee is authorized pursuant to a services and
distribution plan (the "Plan") adopted by the Fund pursuant to Rule 12b-1
under
the 1940 Act. Under the Plan, a portion of the fee, calculated at the annual
rate of .65% of the value of the average daily net assets of each Class, is
used
by Smith Barney Shearson to cover expenses that are primarily intended to
result
in, or that are primarily attributable to, the sale of the shares of the Class
("Selling Expenses"), and the remaining portion of the fee, calculated at the
annual rate of .25% of the value of the average daily net assets of each
Class,
is used by Smith Barney Shearson to provide compensation for ongoing servicing
and/or maintenance of shareholder accounts with the Fund ("Servicing Costs").
Selling Expenses include: costs of printing and distributing the Fund's
Prospectus, Statement of Additional Information and sales literature to
prospective investors; an allocation of overhead and other of Smith Barney
Shearson's branch office distribution-related expenses; payments to, and
expenses of, persons who
48
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
DISTRIBUTOR (CONTINUED)
provide support services in connection with the distribution of shares of the
Fund; and payments to Smith Barney Shearson Financial Consultants who have
sold
shares of the Fund. Servicing Costs include payments made to persons,
including
Smith Barney Shearson Financial Consultants, who respond to inquiries of
shareholders of the Fund regarding their ownership of shares or their accounts
with the Fund or who provide other similar services not otherwise required to
be
provided by the Fund's administrator or transfer agent. The payments to Smith
Barney Shearson Financial Consultants for selling shares of a Class include a
commission paid at the time of sale and a continuing fee for servicing
shareholder accounts for as long as a shareholder remains a holder of that
Class, which is credited at the rate of .25% of the value of the average daily
net assets of the Class that remain invested in the Fund. Smith Barney
Shearson
Financial Consultants may receive different levels of compensation for selling
one Class over another.
Payments under the Plan are not tied exclusively to the distribution
expenses
actually incurred by Smith Barney Shearson and the payments may exceed
distribution expenses actually incurred. The Fund's Board of Trustees will
evaluate the appropriateness of the Plan and its payment terms on a continuing
basis and in so doing will consider all relevant factors, including expenses
borne by Smith Barney Shearson, amounts received under the Plan and proceeds
of
any CDSC.
- --------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund's policy is to declare daily and distribute monthly substantially
all
of its net investment income (that is, its income other than its net realized
capital gains) and declare and distribute its net realized gains, if any, once
a
year, normally at the end of the year in which earned or at the beginning of
the
next year. Unless the shareholder instructs the Fund to pay dividends and
capital gains distributions on shares of any Class in cash and to credit the
shareholder's account at Smith Barney Shearson, dividends and capital gains
distributions will be reinvested automatically in additional shares of the
Class
at net asset value, subject to no sales charge or CDSC. The Fund is
49
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
subject to a 4% nondeductible excise tax measured with respect to certain
undistributed amounts of net investment income and capital gains. The Fund
expects to declare and pay dividends of its net investment income and
distributions of its net capital gains more frequently, if necessary, to avoid
the application of this tax.
TAXES
The Fund has qualified and intends to qualify each year as a regulated
investment company under the Code. To qualify as a regulated investment
company
for Federal income tax purposes, the Fund will limit its income and
investments
so that (a) less than 30% of its gross income is derived from the sale or
disposition of stocks, securities and certain financial instruments (including
certain options, futures contracts and forward contracts) that were held for
less than three months and (b) at the close of each quarter of the taxable
year
(i) not more than 25% of the market value of the Fund's total assets is
invested
in the securities (other than U.S. government securities) of a single issuer
or
of two or more issuers controlled by the Fund that are engaged in the same or
similar trades or businesses or in related trades or businesses and (ii) at
least 50% of the market value of the Fund's total assets is represented by (1)
cash and cash items, (2) U.S. government securities and (3) other securities
limited in respect of any one issuer to an amount not greater in value than 5%
of the market value of the Fund's total assets and to not more than 10% of the
outstanding voting securities of the issuer. The requirements for
qualification
may cause the Fund to restrict the degree to which it sells or otherwise
disposes of stocks, securities and certain financial instruments held for less
than three months. See "Investment Objective and Management Policies --
Portfolio Transactions and Turnover" and "-- Risk Factors and Special
Considerations -- Futures Contracts, Options and Forward Currency Contracts."
If
the Fund qualifies as a regulated investment company and meets certain
distribution requirements, the Fund will not be subject to Federal income tax
on
its net investment income and net realized capital gains that it distributes
to
its shareholders.
Dividends paid by the Fund out of net investment income and distributions of
net realized short-term capital gains will be taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares.
Distributions of net realized long-term capital gains will
50
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
be taxable to shareholders as long-term capital gain, regardless of how long
shareholders have held their Fund shares and whether such distributions are
received in cash or reinvested in additional Fund shares. Furthermore, as a
general rule, a shareholder's gain or loss on a sale or redemption of Fund
shares will be a long-term capital gain or loss if the shareholder has held
the
shares for more than one year and will be a short-term capital gain or loss if
the shareholder has held the shares for one year or less. The per share
dividends and distributions on Class A shares will be higher than the per
share
dividends and distributions on Class B shares as a result of lower transfer
agency fees applicable to the Class A shares. See "Variable Pricing System."
Because the Fund will invest primarily in debt securities, dividends paid by
the
Fund generally will not qualify for the Federal dividends-received deduction
for
corporate shareholders; distributions by the Fund of net realized capital
gains
will not qualify for the Federal dividends-received deduction for corporate
shareholders.
Income received by the Fund from sources within foreign countries may be
subject to withholding and other foreign taxes. The payment of such taxes will
reduce the amount of dividends and distributions paid to the Fund's
shareholders.
Statements as to the tax status of each shareholder's dividends and
distributions are mailed annually. Each shareholder also will receive, if
appropriate, various written notices after the close of the Fund's prior
taxable
year with respect to certain dividends and distributions which were received
from the Fund during the Fund's prior taxable year.
Shareholders are urged to consult their tax advisors regarding the
application
of Federal, state and local tax laws to their specific situation before
investing in the Fund.
- --------------------------------------------------------------------
ADDITIONAL INFORMATION
The Fund was organized on November 15, 1990 under the laws of the
Commonwealth
of Massachusetts and is a business entity commonly known as a "Massachusetts
business trust." On July 30, 1993 the Fund changed its
51
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
name from Shearson Lehman Brothers Worldwide Prime Assets Fund to its current
name. The Fund offers shares of beneficial interest, par value $.001 per
share,
for sale to the public.
Each Class represents an identical interest in the Fund's investment
portfolio. As a result, the Classes have the same rights, privileges and
preferences, except with respect to: (a) the designation of each Class; (b)
the
effect of the respective sales charges, if any, for each Class; (c) the
distribution and/or service fees borne by each Class; (d) the expenses
allocable
exclusively to each Class; (e) voting rights on matters exclusively affecting
a
single Class; (f) the exchange privileges of each Class; and (g) the
conversion
feature of the Class B shares. The Fund's Board of Trustees does not
anticipate
that there will be any conflicts among the interests of the holders of the
different Classes. The Trustees, on an ongoing basis will consider whether
such
conflict exists and, if so, take appropriate action.
The Fund does not hold annual shareholder meetings. There normally will be
no
meeting of shareholders for the purpose of electing Trustees unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders. The Trustees will call a meeting for any purpose upon
written request of shareholders holding at least 10% of the Fund's outstanding
shares. Shareholders of record owning no less than two-thirds of the
outstanding
shares of the Fund may remove a Trustee through a declaration in writing or by
vote cast in person or by proxy at a meeting called for that purpose. In
addition, shareholders who meet certain criteria will be assisted by the Fund
in
communicating with other shareholders in seeking the holding of such a
meeting.
When matters are submitted for shareholder vote, shareholders of each Class
will
have one vote for each full share owned and a proportionate, fractional vote
for
any fractional share held of that Class. Generally, shares of the Fund will be
voted on a Fund-wide basis except on matters affecting only the interests of
one
or more of the Classes.
Massachusetts law provides that shareholders of the Fund can, under certain
circumstances, be held personally liable for the obligations of the Fund. The
Fund has been structured, and will be operated in such a way, so as to ensure
as
much as possible, that shareholders will not be liable for
52
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
- -------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
obligations of the Fund. A more complete discussion of potential liability of
shareholders of the Fund under Massachusetts law is contained in the Statement
of Additional Information.
Boston Safe, a wholly owned subsidiary of TBC, is located at One Boston
Place,
Boston, Massachusetts 02108, and serves as custodian of the Fund's
investments.
TSSG is located at Exchange Place, Boston, Massachusetts 02109 and serves as
the Fund's transfer agent.
The Fund sends to each of its shareholders a semi-annual report and an
audited
annual report, which include a list of the investment securities held by the
Fund at the end of the period covered. In an effort to reduce the Fund's
printing and mailing costs, the Fund plans to consolidate the mailing of its
semi-annual and annual reports by household. This consolidation means that a
household having multiple accounts with the identical address of record will
receive a single copy of each report. In addition, the Fund also plans to
consolidate the mailing of its Prospectus so that a shareholder having
multiple
accounts (that is individual, IRA and/or Self-Employed Retirement Plan
account)
will receive a single Prospectus annually. Any shareholder who does not want
this consolidation to apply to his or her account should contact his or her
Smith Barney Shearson Financial Consultants or TSSG. Shareholders may direct
inquiries regarding the Fund to their Smith Barney Shearson Financial
Consultants.
-------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE STATEMENT
OF
ADDITIONAL INFORMATION AND/OR THE OFFICIAL SALES LITERATURE IN CONNECTION WITH
THE OFFERING OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO
ANY PERSON TO WHOM, SUCH OFFER MAY NOT LAWFULLY BE MADE.
53
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
TRUSTEES
Paul R. Ades
Herbert Barg
Allan R. Johnson
Heath B. McLendon
Kenneth Miller
John F. White
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD AND
INVESTMENT OFFICER
Stephen J. Treadway
PRESIDENT
Richard P. Roelofs
EXECUTIVE VICE PRESIDENT
Alan J. Brown
VICE PRESIDENT AND
INVESTMENT OFFICER
Paul F. Duncombe
VICE PRESIDENT AND
INVESTMENT OFFICER
Vincent Nave
TREASURER
Francis J. McNamara, III
SECRETARY
DISTRIBUTOR
Smith Barney Shearson Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
PanAgora Asset Management
Limited
3 Finsbury Avenue
London, England EC2M 2PA
ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit and Trust
Company
One Boston Place
Boston, Massachusetts 02108
54
<PAGE>
SMITH BARNEY SHEARSON
WORLDWIDE
PRIME ASSETS
FUND
Two World Trade Center
New York, New York 10048
Fund 139
FD0244 A4
Smith Barney Shearson
WORLDWIDE PRIME ASSETS FUND
Two World Trade Center
New York, New York 10048
(212) 720-9218
STATEMENT OF ADDITIONAL INFORMATION APRIL 1,
1994
This Statement of Additional Information expands upon and supplements the
information contained in the current Prospectus of Smith Barney Shearson
Worldwide Prime Assets Fund (the "Fund"), dated April 1, 1994, as amended
or supplemented from time to time, and should be read in conjunction with
the Prospectus. The Prospectus may be obtained from your Smith Barney
Shearson Financial Consultant or by writing or calling the Fund at the ad-
dress or telephone number listed above. This Statement of Additional In-
formation, although not in itself a prospectus, is incorporated by refer-
ence into the Prospectus in its entirety.
CONTENTS
For ease of reference, the same section headings are used in both the Pro-
spectus and this Statement of Additional Information except where shown
below:
<TABLE>
<CAPTION>
<S> <C>
Management of the Fund 1
Investment Objective and Management Policies 5
Purchase of Shares 15
Redemption of Shares 15
Distributor 16
Valuation of Shares 17
Exchange Privilege 17
Performance Data (See in the Prospectus "The Fund's Performance") 18
Taxes (See in the Prospectus "Dividends, Distributions and Taxes") 20
Custodian and Transfer Agent 22
Financial Statements 22
Appendix: Description of S&P and Moody's Ratings A-1
</TABLE>
MANAGEMENT OF THE FUND
The executive officers of the Fund are employees of certain of the organi-
zations that provide services to the Fund. These organizations are the
following:
<TABLE>
<CAPTION>
NAME SERVICE
<S> <C>
Smith Barney Shearson Inc.
("Smith Barney Shearson") Distributor
PanAgora Asset Management Limited
("PanAgora U.K.") Investment Adviser
The Boston Company Advisors, Inc.
("Boston Advisors") Administrator
Boston Safe Deposit and Trust Company
("Boston Safe") Custodian
The Shareholder Services Group, Inc.
("TSSG") Transfer Agent
</TABLE>
These organizations and the functions they perform for the Fund are dis-
cussed in the Prospectus and in this Statement of Additional Information.
TRUSTEES AND EXECUTIVE OFFICERS OF THE FUND
The Trustees and the executive officers of the Fund, together with infor-
mation as to their principal business occupations during the past five
years, are set forth below. Each Trustee who is an "interested person" of
the Fund, as defined in the Investment Company Act of 1940, as amended
(the "1940 Act"), is indicated by an asterisk.
Paul R. Ades, Trustee. Partner in the law firm of Murov & Ades. His ad-
dress is 272 South Wellwood Avenue, P.O. Box 504, Lindenhurst, New York
11757.
Herbert Barg, Trustee. Private Investor. His address is 273 Montgomery Av-
enue, Bala Cynwyd, Pennsylvania 19004.
Allan R. Johnson, Trustee. Retired, former Chairman, Retail Division of
BATUS, Inc., and Chairman and Chief Executive Officer of Saks Fifth Ave-
nue, Inc. His address is 2 Sutton Place South, New York, New York 10022.
*Heath B. McLendon, Chairman of the Board and Investment Officer. Execu-
tive Vice President of Smith Barney Shearson; Chairman of Smith Barney
Shearson Strategy Advisers Inc.; prior to July 1993, Senior Executive Vice
President of Shearson Lehman Brothers Inc. ("Shearson Lehman Brothers");
Vice Chairman of Shearson Asset Management, a member of Asset Management
Group of Shearson Lehman Brothers; a Director of PanAgora Asset Manage-
ment, Inc. and PanAgora U.K. His address is Two World Trade Center, New
York, New York 10048.
Ken Miller, Trustee. President of Young Stuff Apparel Group, Inc. His ad-
dress is 1407 Broadway, 6th Floor, New York, New York 10018.
John F. White, Trustee. President Emeritus of The Cooper Union for the Ad-
vancement of Science and Art; Special Assistant to the President of the
Aspen Institute. His address is 97 Sunset Drive, Sarasota, Florida 34236.
Stephen J. Treadway, President. Executive Vice President and Director of
Smith Barney Shearson; Director and President of Mutual Management Corp.
and Smith, Barney Advisers, Inc. and Trustee of Corporate Realty Income
Trust I. His address is 1345 Avenue of the Americas, New York, New York
10105.
Richard P. Roelofs, Executive Vice President. Managing Director of Smith
Barney Shearson and President of Smith Barney Shearson Strategy Advisers
Inc.; prior to July 1993, Senior Vice President of Shearson Lehman Broth-
ers; Vice President of Shearson Lehman Investment Strategy Advisors Inc.,
an investment advisory affiliate of Shearson Lehman Brothers. His address
is Two World Trade Center, New York, New York 10048.
Alan J. Brown, Vice President and Investment Officer. Chief Investment Of-
ficer of PanAgora U.K.; prior to April 1989, Managing Director of Posthorn
Global Asset Management Ltd., London, England. His address is 3 Finsbury
Avenue, London, England EC2M 2PA.
Paul F. Duncombe, Vice President and Investment Officer. Senior Investment
Manager of PanAgora U.K.; prior to May 1989, Investment Manager of
Posthorn Global Asset Management Ltd., London, England. His address is 3
Finsbury Avenue, London, England EC2M 2PA.
Vincent Nave, Treasurer. Senior Vice President of Boston Advisors and Bos-
ton Safe. His address is One Boston Place, Boston, Massachusetts 02108.
Francis J. McNamara, III, Secretary. Senior Vice President and General
Counsel of Boston Advisors; prior to June 1989, Vice President and General
Counsel of Boston Advisors. His address is One Boston Place, Boston, Mas-
sachusetts 02108.
Each Trustee also serves as a trustee, general partner and/or director of
certain other mutual funds for which Smith Barney Shearson serves as dis-
tributor. As of January 3, 1994, the Trustees and officers of the Fund, as
a group, owned less than 1% of the outstanding shares of beneficial inter-
est of the Fund.
No director, officer or employee of Smith Barney Shearson, PanAgora U.K.
or Boston Advisors or any of their affiliates receives any compensation
from the Fund for serving as an officer or Trustee of the Fund. The Fund
pays each Trustee who is not a director, officer or employee of Smith Bar-
ney Shearson, PanAgora U.K. or Boston Advisors or any of their affiliates
a fee of $2,000 per annum plus $500 per meeting attended and reimburses
them for travel and out-of-pocket expenses. For the fiscal year ended No-
vember 30, 1993, such fees and expenses totalled $ .
INVESTMENT ADVISER -- PANAGORA U.K.
ADMINISTRATOR -- BOSTON ADVISORS
PanAgora U.K. serves as investment adviser to the Fund pursuant to a writ-
ten agreement (the "Advisory Agreement") dated January 28, 1991, which was
most recently approved by the Fund's Board of Trustees, including a major-
ity of the Trustees who are not "interested persons" of the Fund or PanAg-
ora U.K. or Smith Barney Shearson, on July 15, 1993. Fifty percent of the
outstanding voting stock of PanAgora U.K. is owned by Nippon Life Insur-
ance Company and fifty percent is owned by Lehman Brothers Inc. PanAgora
U.K. bears all expenses in connection with the performance of its ser-
vices. PanAgora U.K. is an investment adviser registered under the Invest-
ment Advisers Act of 1940, as amended. As compensation for PanAgora U.K.'s
services rendered to the Fund, the Fund pays a fee computed daily and pay-
able monthly at the annual rate of .45% of the value of the Fund's average
daily net assets. For the fiscal period ended November 30, 1991 and for
the fiscal years ended November 30, 1992 and 1993, the Fund incurred
$2,415,879, $1,988,473 and $601,334, respectively, in investment advisory
fees. PanAgora U.K. voluntarily waived investment advisory fees for the
same periods in the amount of $163,358, $163,857 and $253,897, respec-
tively.
Boston Advisors serves as administrator to the Fund pursuant to a written
agreement (the "Administration Agreement") dated May 21, 1993, which was
most recently approved by the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the Fund or Boston Advi-
sors, on July 15, 1993. Prior to May 21, 1993, Boston Advisors acted in
the capacity as the Fund's sub-investment adviser and administrator. Bos-
ton Advisors is a wholly owned subsidiary of The Boston Company, Inc.
("TBC"), a financial services holding company, which is in turn a wholly
owned subsidiary of Mellon Bank Corporation ("Mellon").
Certain services provided to the Fund by Boston Advisors pursuant to the
Administration Agreement are described in the Prospectus under "Management
of the Fund." In addition to those services, Boston Advisors pays the sal-
aries of all officers and employees who are employed by both it and the
Fund, maintains office facilities for the Fund, furnishes the Fund with
statistical and research data, clerical help and accounting, data process-
ing, bookkeeping, internal auditing and legal services and certain other
services required by the Fund, prepares reports for the Fund's sharehold-
ers and prepares tax returns, reports to and filings with the Securities
and Exchange Commission (the "SEC"), and state blue sky authorities. Bos-
ton Advisors bears all expenses in connection with the performance of its
services.
As compensation for Boston Advisors' services rendered to the Fund, the
Fund pays a fee computed daily and payable monthly at the annual rate of
.20% of the value of the Fund's average daily net assets. For the fiscal
period ended November 30, 1991 and for the fiscal year ended November 30,
1992, the Fund incurred $1,074,058 and $883,766, respectively, in sub-
investment advisory and administration fees. Boston Advisors voluntarily
waived sub-investment advisory and administration fees for the same peri-
ods in the amount of $72,627 and $73,215, respectively. For the fiscal
year ended November 30, 1993, the Fund incurred $267,259 in administration
fees. Boston Advisors voluntarily waived administration fees for the same
period in the amount of $113,585.
The Fund bears expenses incurred in its operations, including taxes, in-
terest, brokerage fees and commissions, if any; fees of Trustees who are
not officers, directors, shareholders or employees of Smith Barney Shear-
son, PanAgora U.K. or Boston Advisors; SEC fees and state blue sky quali-
fication fees; charges of custodians; transfer and dividend disbursing
agents' fees; certain insurance premiums; outside auditing and legal ex-
penses; investor services (including allocated telephone and personnel ex-
penses), and costs of preparation and printing of prospectuses for regula-
tory purposes and for distribution to existing shareholders; costs of
shareholders' reports and corporate meetings; and any extraordinary ex-
penses.
PanAgora U.K. and Boston Advisors have each agreed that if in any fiscal
year the aggregate expenses of the Fund (including fees payable pursuant
to the Advisory Agreement and the Administration Agreement, but excluding
interest, taxes, brokerage, distribution fees paid pursuant to the Fund's
plan of distribution and, if permitted by the relevant state securities
commission, extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Fund, PanAgora U.K. and Boston Advisors
will, to the extent required by state law, reduce their management fees by
the amount of such excess expenses, such amount to be allocated between
them in the proportion that their respective fees bear to the aggregate of
the fees paid the Fund. Such fee reduction, if any, will be estimated and
reconciled on a monthly basis. The most restrictive state expense limita-
tion applicable to the Fund would require PanAgora U.K. and Boston Advi-
sors to reduce their fees in any year that such expenses exceed 2.5% of
the first $30 million of average daily net assets, 2% of the next $70 mil-
lion of average daily net assets and 1.5% of the remaining average daily
net assets. No fee reduction was required for the fiscal period ended No-
vember 30, 1991 and for the fiscal years ended November 30, 1992 and 1993.
COUNSEL AND AUDITORS
Willkie Farr & Gallagher serves as counsel to the Fund. The Trustees who
are not interested persons of the Fund have selected Stroock & Stroock &
Lavan to serve as their counsel.
Coopers & Lybrand, independent accountants, One Post Office Square, Bos-
ton, Massachusetts 02109, serve as auditors of the Fund and render an
opinion on the Fund's financial statements annually.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The Prospectus discusses the Fund's investment objective and the policies
it employs to achieve its objective. Supplemental information is set out
below concerning the types of securities and other instruments in which
the Fund may invest, the investment policies and strategies the Fund may
utilize and certain risks attendant to those investments, policies and
strategies.
UNITED STATES GOVERNMENT SECURITIES
United States government securities include debt obligations of varying
maturities issued or guaranteed by the United States government, its agen-
cies or instumentalities ("U.S. government securities"). Direct obliga-
tions of the United States Treasury include a variety of securities that
differ in their interest rates, maturities and dates of issuance.
U.S. government securities include not only direct obligations of the
United States Treasury, but also include securities issued or guaranteed
by the Federal Housing Administration, Federal Financing Bank, Export-
Import Bank of the United States, Small Business Administration, Govern-
ment National Mortgage Association, General Services Administration, Fed-
eral Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal Na-
tional Mortgage Association, Maritime Administration, Tennessee Valley
Authority, Resolution Trust Corporation, District of Columbia Armory
Board, Student Loan Marketing Association and various institutions that
previously were or currently are part of the Farm Credit System (which has
been undergoing a reorganization since 1987). Because the United States
government is not obligated by law to provide support to an instrumental-
ity that it sponsors, the Fund will invest in obligations issued by such
an instrumentality only if PanAgora U.K. determines that the credit risk
with respect to the instrumentality does not make its securities unsuit-
able for investment by the Fund.
FUTURES CONTRACTS
The Fund may enter into contracts for the purchase or sale for future de-
livery of fixed-income securities or foreign currencies that otherwise
meet the Fund's investment policies, to the extent permitted by the Com-
modity Futures Trading Commission (the "CFTC"). U.S. futures contracts
have been designed by exchanges that have been designated "contract mar-
kets" by the CFTC, and must be executed through a futures commission mer-
chant, or brokerage firm, which is a member of the relevant contract mar-
ket. Futures contracts trade on a number of contract markets, and, through
their clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange. The Fund will
enter into futures contracts that are based on debt securities backed by
the full faith and credit of the United States government, such as Trea-
sury notes, Government National Mortgage Association modified pass-through
mortgage-backed securities and three-month U.S. Treasury Bills. The Fund
may also enter into futures contracts that are based on non-U.S. govern-
ment bonds.
An interest rate futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a spe-
cific interest rate-sensitive financial instrument at a specified price,
date, time and place. A foreign currency futures contract provides for the
future sale by one party and the purchase by the other party of a certain
amount of a specified foreign currency at a specified price, date, time
and place.
The Fund may not enter into futures transactions if the sum of the amount
of initial margin deposits on its existing futures contracts and premiums
paid for unexpired options on futures contracts, to establish such posi-
tions that are not bona fide hedging positions (as defined by the CFTC),
would exceed 5% of the fair market value of the Fund's total assets, after
taking into account unrealized profits and unrealized losses on commodity
contracts it has entered into. The Fund will not use leverage when it en-
ters into long futures or options contracts and for each such long posi-
tion the Fund will deposit as collateral with its custodian in a segre-
gated account, cash or cash equivalents, such as U.S. government securi-
ties or high-grade debt obligations, having a value equal to the
underlying commodity value of the contract.
The purpose of entering into a futures contract is to protect the Fund
from fluctuations in value of its portfolio securities without its neces-
sarily buying or selling the securities. Of course, because the value of
portfolio securities will far exceed the value of the futures contracts
sold by the Fund, an increase in the value of the futures contracts could
only mitigate, but not totally offset, the decline in the value of the
Fund's assets. No consideration is paid or received by the Fund upon en-
tering into a futures contract. Upon entering into a futures contract, the
Fund will be required to deposit in a segregated account with its custo-
dian an amount of cash or cash equivalents, such as U.S. government secu-
rities or high-grade debt obligations, equal to approximately 1% to 10% of
the contract amount (this amount is subject to change by the exchange on
which the contract is traded and brokers may charge a higher amount). This
amount is known as "initial margin" and is in the nature of a performance
bond or good faith deposit on the contract that is returned to the Fund
upon termination of the futures contract, assuming that all contractual
obligations have been satisfied. The broker will have access to amounts in
the margin account if the Fund fails to meet its contractual obligations.
Subsequent payments to and from the broker, known as "variation margin,"
will be made daily as the price of the currency or securities underlying
the futures contract fluctuates, making the long and short positions in
the futures contract more or less valuable, a process known as "marking-
to-market." At any time prior to the expiration of a futures contract, the
Fund may elect to close the position by taking an opposite position, which
will operate to terminate the Fund's existing position in the contract.
The use of futures contracts as a hedging device involves several risks.
Successful use of futures contracts is subject to the ability of PanAgora
U.K. to predict correctly movements in the price of the securities or cur-
rencies underlying the particular hedge. These predictions and, thus, the
use of futures contracts, involve skills and techniques that are different
from those involved in the management of the portfolio securities being
hedged. In addition, there can be no assurance that there will be a corre-
lation between movements in the price of the underlying securities or cur-
rencies and movements in the price of the securities that are the subject
of the hedge. A decision concerning whether, when and how to hedge in-
volves the exercise of skill and judgment and even a well-conceived hedge
may be unsuccessful to some degree because of unexpected market behavior
or trends in interest rates or currency values.
Positions in futures contracts and options on futures contracts may be
closed out only on the exchange on which they were entered into (or
through a linked exchange). No secondary market for such contracts exists.
Although the Fund intends to enter into futures contracts only if there is
an active market for such contracts, there is no assurance that an active
market will exist for the contracts at any particular time. Most futures
exchanges limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached
in a particular contract, no trades may be made on that day at a price be-
yond that limit. It is possible that prices for futures contracts could
move to the daily limit for several consecutive trading days with little
or no trading, thereby preventing prompt liquidation of futures positions
and subjecting the Fund to substantial losses. In that case, and in the
event of adverse price movements, the Fund would be required to make daily
cash payments of variation margin. In such circumstances, an increase in
the value of the portion of the Fund's securities being hedged, if any,
may partially or completely offset losses on the futures contract. How-
ever, as described above, there is no assurance that the price of the se-
curities being hedged will, in fact, correlate with the price movements in
a futures contract and thus provide an offset to losses on the futures
contract.
If the Fund has hedged against the possibility of an event adversely af-
fecting the value of securities held in its portfolio and that event does
not occur, the Fund will lose part or all of the benefit of the increased
value of securities that it has hedged because it will have offsetting
losses in its futures positions. Losses incurred in hedging transactions
and the costs of these transactions will affect the Fund's performance. In
addition, in such situations, if the Fund had insufficient cash, it might
have to sell securities to meet daily variation margin requirements at a
time when it would be disadvantageous to do so. These sales of securities
could, but will not necessarily, be at increased prices that reflect the
change in interest rates or currency values.
OPTIONS ON FUTURES CONTRACTS
The Fund may purchase and write put and call options on interest rate and
foreign currency contracts that are traded on a domestic exchange or board
of trade or a foreign exchange, to the extent permitted by the CFTC, as a
hedge against changes in interest rates and market conditions, and may
enter into closing transactions with respect to such options to terminate
existing positions. No assurance can be given that such closing transac-
tions can be effected.
An option on an interest rate or foreign currency futures contract, as
contrasted with the direct investment in such a contract, gives the pur-
chaser the right, in return for the premium paid, to assume a position in
an interest rate or foreign currency contract at a specified exercise
price at any time prior to the expiration date of the option. Upon exer-
cise of an option, the delivery of the futures position by the writer of
the option to the holder of the option will be accompanied by delivery of
the accumulated balance in the writer's futures margin account, which rep-
resents the amount by which the market price of the futures contract ex-
ceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract. The potential loss
related to the purchase of an option on futures contracts is limited to
the premium paid for the option (plus transaction costs). Because the
value of the option is fixed at the point of sale, there are no daily cash
payments to reflect changes in the value of the underlying contract; how-
ever, the value of the option does change daily and that change would be
reflected in the net asset value of the Fund.
Options on futures contracts involve several risks. The ability to estab-
lish and close out positions on such options will be subject to the exist-
ence of a liquid market. In addition, the purchase of put or call options
will be based upon predictions as to anticipated trends in interest rates
and securities markets and in currency values by PanAgora U.K., which
could prove to be incorrect. Even if PanAgora U.K.'s expectations are cor-
rect, an imperfect correlation may exist between the change in the value
of the options and of the portfolio securities hedged.
OPTIONS ON FOREIGN CURRENCIES
The Fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that in which futures contracts on foreign
currencies, or forward contracts, will be utilized. A decline in the dol-
lar value of a foreign currency in which securities are denominated, for
example, will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect
against diminutions in the value of its portfolio securities, the Fund may
purchase put options on the foreign currency. If the value of the currency
does decline, the Fund will have the right to sell such currency for a
fixed amount in dollars and will thereby offset, in whole or in part, the
adverse effect on its portfolio that otherwise would have resulted. Con-
versely, when an increase in the dollar value of a currency in which secu-
rities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Fund may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of
the adverse movements in exchange rates. As in the case of other types of
options, however, the benefit to the Fund deriving from purchases of for-
eign currency options will be reduced by the amount of the premium and re-
lated transaction costs. In addition, when currency exchange rates do not
move in the direction or to the extent anticipated, the Fund could sustain
losses on transactions in foreign currency options that would require it
to forego a portion or all of the benefits of advantageous changes in such
rates.
The Fund may write options on foreign currencies for the types of hedging
purposes described above. For example, when the Fund anticipates a decline
in the dollar value of foreign currency-denominated securities due to ad-
verse fluctuations in exchange rates, it could, instead of purchasing a
put option, write a call option on the relevant currency. If the expected
decline occurs, the option will most likely not be exercised, and the dim-
inution in the value of portfolio securities will be offset by the amount
of the premium received.
Similarly, instead of purchasing a call option to hedge against an antici-
pated increase in the dollar cost of securities to be acquired, the Fund
could write a put option on the relevant currency which, if rates move in
the manner projected, will expire unexercised and allow the Fund to hedge
such increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, and
only if rates move in the expected direction. If this does not occur, the
option may be exercised and the Fund would be required to purchase or sell
the underlying currency at a loss that may not be offset by the amount of
the premium. Through the writing of options on foreign currencies, the
Fund also may be required to forego all or a portion of the benefits that
might otherwise have been obtained from favorable movements in exchange
rates.
The Fund may write covered call options on foreign currencies. A call op-
tion written on a foreign currency by the Fund is "covered" if the Fund
owns the underlying foreign currency covered by the call or has an abso-
lute and immediate right to acquire that foreign currency without addi-
tional cash consideration (or for additional cash consideration held in a
segregated account by Boston Safe, or by a designated sub-custodian) upon
conversion or exchange of other foreign currency held in its portfolio. A
call option also is covered if the Fund has a call on the same foreign
currency and in the same principal amount as the call written when the ex-
ercise price of the call held (a) is equal to or less than the exercise
price of the call written or (b) is greater than the exercise price of the
call written if the difference is maintained by the Fund in cash, U.S.
government securities and other high-grade liquid debt securities in a
segregated account with Boston Safe or with a designated sub-custodian.
The Fund may write call options on foreign currencies that are not covered
for cross-hedging purposes. A call option on a foreign currency written
for these purposes would be designed to provide a hedge against a decline,
due to an adverse change in exchange rates, in the U.S. dollar value of a
security, denominated in the currency underlying the option, that the Fund
owns or has the right to acquire. In such circumstances, the Fund will
collateralize the option by maintaining in a segregated account with Bos-
ton Safe, or with a designated sub-custodian, cash or U.S. government se-
curities in an amount not less than the value of the underlying foreign
currency in U.S. dollars marked-to-market daily. To the extent a segre-
gated account consisting of cash or U.S. government securities is main-
tained by the Fund to collateralize the writing of call options on foreign
currencies, the Fund will limit the collateralization to 50% of the Fund's
net assets.
FORWARD CURRENCY CONTRACTS
As noted in the Prospectus, if the Fund enters into a position-hedging
transaction, cash or liquid high-grade debt securities will be placed in a
segregated account in an amount equal to the value of the Fund's total as-
sets committed to the consummation of the forward currency contract. If
the value of the securities placed in the segregated account declines, ad-
ditional cash or securities will be placed in the account so that the
value of the account will equal the amount of the Fund's commitment with
respect to the contract. Hedging transactions may be made from any foreign
currency into U.S. dollars or into other appropriate currencies.
At or before the maturity of a forward currency contract, the Fund may ei-
ther sell a portfolio security and make delivery of the currency, or re-
tain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract pursuant to which the Fund will
obtain, on the same maturity date, the same amount of the currency that it
is obligated to deliver. If the Fund retains the portfolio security and
engages in an offsetting transaction, the Fund, at the time of execution
of the offsetting transaction, will incur a gain or a loss to the extent
movement has occurred in forward currency contract prices. Should forward
prices decline during the period between the Fund's entering into a for-
ward currency contract for the sale of a currency and the date it enters
into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed
to sell exceeds the price of the currency it has agreed to purchase.
Should forward prices increase, the Fund will suffer a loss to the extent
the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with fac-
tors such as the currency involved, the length of the contract period and
the market conditions then prevailing. Because transactions in currency
exchange contracts are usually conducted on a principal basis, no fees or
commissions are involved. The use of forward currency contracts does not
eliminate fluctuations in the underlying prices of the securities, but it
does establish a rate of exchange that can be achieved in the future. In
addition, although forward currency contracts limit the risk of loss due
to a decline in the value of the hedged currency, at the same time, they
limit any potential gain that might result should the value of the cur-
rency increase.
If a devaluation is generally anticipated, the Fund may not be able to
contract to sell the currency at a price above the devaluation level it
anticipates. The Fund will not enter into a currency transaction if, as a
result, it will fail to qualify as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), for a given
year.
ADDITIONAL RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CURRENCY CON-
TRACTS AND OPTIONS ON FOREIGN CURRENCIES
Certain futures contracts, options on foreign currencies and forward cur-
rency contracts are not traded on contract markets regulated by the CFTC,
and forward currency contracts are not regulated by the SEC. Instead, for-
ward currency contracts are traded through financial institutions acting
as market-makers. In the forward currency market there are no daily price
fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Moreover, a trader of for-
ward currency contracts could lose amounts substantially in excess of its
initial investments, due to the collateral requirements associated with
such positions.
Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the SEC, as are other securities traded on such
exchanges. As a result, many of the protections provided to traders on or-
ganized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a na-
tional securities exchange are cleared and guaranteed by the Options
Clearing Corporation (the "OCC"), thereby reducing the risk of counter-
party default. Further, a liquid secondary market in options traded on a
national securities exchange may exist, potentially permitting the Fund to
liquidate open positions at a profit prior to their exercise or expira-
tion, or to limit losses in the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options, how-
ever, are subject to the risks of the availability of a liquid secondary
market described above, as well as the risks regarding adverse market
movements, margining of options written, the nature of the foreign cur-
rency market, possible intervention by governmental authorities and the
effects of other political and economic events. In addition, exercise and
settlement of such options must be made exclusively through the OCC, which
has established banking relationships in applicable foreign countries for
this purpose. As a result, the OCC may, if it determines that foreign gov-
ernmental restrictions or taxes would prevent the orderly settlement of
foreign currency option exercises, or would result in undue burdens on the
OCC or its clearing member, impose special procedures on exercise and set-
tlement, such as technical changes in the mechanics of delivery of cur-
rency, the fixing of dollar settlement prices or prohibitions on exercise.
Futures contracts, options on futures contracts, forward currency con-
tracts and options on foreign currencies may be traded on foreign ex-
changes, to the extent permitted by the CFTC. These transactions are sub-
ject to the risk of governmental actions affecting trading in, or the
prices of, foreign currencies or securities. The value of such positions
also could be adversely affected by (a) other complex foreign political
and economic factors, (b) lesser availability than in the United States of
data on which to make trading decisions, (c) delays in the Fund's ability
to act upon economic events occurring in foreign markets during non-
business hours in the United States and the United Kingdom, (d) the impo-
sition of different exercise and settlement terms and procedures and mar-
gin requirements than in the United States and (e) lesser trading volume.
LENDING PORTFOLIO SECURITIES
The Fund may lend securities to brokers, dealers and other financial orga-
nizations. These loans, if and when made, may not exceed 20% of the value
of the Fund's total assets. The Fund will not lend securities to Smith
Barney Shearson or its affiliates unless the Fund has applied for and re-
ceived specific authority to do so from the SEC. The Fund's loans of secu-
rities will be collateralized by cash, letters of credit or U.S. govern-
ment securities. The cash or instruments collateralizing the Fund's loans
of securities will be maintained at all times in a segregated account with
Boston Safe, or a designated sub-custodian, in an amount at least equal to
the current market value of the loaned securities. From time to time, the
Fund may pay a part of the interest earned from the investment of collat-
eral received for securities loaned to: (i) the borrower; and/or (ii) a
third party that is unaffiliated with the Fund and is acting as a
"finder."
By lending its securities, the Fund can increase its income by continuing
to receive interest on the loaned securities as well as by either invest-
ing the cash collateral in short-term instruments or obtaining yield in
the form of interest paid by the borrower when U.S. government securities
are used as collateral. The Fund will comply with the following conditions
whenever it loans securities: (a) the Fund must receive at least 100% cash
collateral or equivalent securities from the borrower; (b) the borrower
must increase the collateral whenever the market value of the securities
loaned rises above the level of the collateral; (c) the Fund must be able
to terminate the loan at any time; (d) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other distri-
butions on the loaned securities, and any increase in market value; (e)
the Fund may pay only reasonable custodian fees in connection with the
loan; and (f) voting rights on the loaned securities may pass to the bor-
rower except that, if a material event adversely affecting the investment
in the loaned securities occurs, the Fund's Board of Trustees must termi-
nate the loan and regain the right to vote the securities.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with certain mem-
ber banks which are the issuers of instruments acceptable for purchase by
the Fund and with certain dealers on the Federal Reserve Bank of New
York's list of reporting dealers. Repurchase agreements are contracts
under which the buyer of a security simultaneously commits to resell the
security to the seller at an agreed-upon price and date. Under each repur-
chase agreement, the selling institution is required to maintain the value
of the securities subject to the repurchase agreement at not less than
their repurchase price. Repurchase agreements involve certain risks in the
event of default or insolvency of the other party, including possible de-
lays or restrictions upon the Fund's ability to dispose of the underlying
securities. PanAgora U.K. or Boston Advisors, acting under the supervision
of the Fund's Board of Trustees, reviews, on an ongoing basis to evaluate
potential risks, the value of the collateral and the creditworthiness of
those banks and dealers with which the Fund enters into repurchase agree-
ments.
WHEN-ISSUED SECURITIES
When the Fund agrees to purchase when-issued securities, Boston Safe, or a
designated sub-custodian, will set aside cash, U.S. government securities
or high-grade debt obligations equal to the amount of the commitment in a
segregated account. Normally, Boston Safe or the designated sub-custodian
will set aside securities held by the Fund to satisfy a purchase commit-
ment, and in such case, the Fund may be required subsequently to place ad-
ditional assets in the segregated account to ensure that the value of the
account remains equal to the amount of the Fund's commitment. The Fund's
net assets may be expected to fluctuate to a greater degree when it sets
aside securities held by the Fund to cover its purchase commitments than
when it sets aside cash. When the Fund engages in when-issued securities
transactions, it relies on the other party to consummate the trade. Fail-
ure of the seller to do so may result in the Fund's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.
INVESTMENT RESTRICTIONS
The investment restrictions numbered 1 through 13 below have been adopted
by the Fund as fundamental policies. Under the 1940 Act, a fundamental
policy may not be changed without the vote of a majority of the outstand-
ing voting securities of the Fund, as defined in the 1940 Act. Majority is
defined in the 1940 Act as the lesser of (a) 67% or more of the shares
present at a Fund meeting, if the holders of more than 50% of the out-
standing shares of the Fund are present or represented by proxy, or (b)
more than 50% of the outstanding shares of the Fund. Investment restric-
tions numbered 14 through 16 may be changed by a vote of a majority of the
Fund's Board of Trustees at any time.
Under the investment policies adopted by the Fund, the Fund will not:
1. Invest more than 25% of the value of its total assets in securi-
ties of issuers in any one industry, other than the banking industry,
except that this limitation is not applicable to the Fund's invest-
ments in U.S. government securities. For purposes of this restriction,
the Fund will treat securities issued by a foreign government or a su-
pranational organization and the agencies and instrumentalities of
that foreign government or supranational organization to be securities
issued by issuers in a single industry.
2. Borrow money, except that the Fund may borrow from banks for tem-
porary or emergency (not leveraging) purposes, including the meeting
of redemption requests that might otherwise require the untimely dis-
position of securities, in an amount not to exceed 15% (or 5%, in the
event that such borrowing is made for purposes other than the meeting
of redemption requests) of the value of the Fund's total assets (in-
cluding the amount borrowed) valued at market less liabilities (not
including the amount borrowed) at the time the borrowing is made.
Whenever the Fund's borrowings exceed 5% of the value of its total as-
sets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets, ex-
cept to secure permitted borrowings.
4. Lend any funds or other assets, except through purchasing obliga-
tions, lending portfolio securities and entering into repurchase
agreements consistent with the Fund's investment objective and poli-
cies.
5. Purchase securities on margin, except that the Fund may obtain any
short-term credits necessary for the clearance of purchases and sales
of securities.
6. Make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of
such securities or securities convertible into or exchangeable for,
without payment of any further consideration, securities of the same
issue as, and equal in amount to, the securities sold short ("short
sales against the box"), and unless not more than 10% of the Fund's
net assets (taken at market value) is held as collateral for such
sales at any one time (it is the Fund's present intention to make such
sales only for the purpose of deferring realization of gain or loss
for Federal income tax purposes).
7. Purchase or sell real estate or real estate limited partnership in-
terests, except that it may purchase and sell securities of companies
that deal in real estate or interests therein.
8. Purchase or sell commodities or commodity contracts (except curren-
cies, futures contracts on currencies, securities indices and fixed-
income securities and related options, spot and forward foreign cur-
rency contracts and other similar contracts).
9. Invest in oil, gas or other mineral leases or exploration or de-
velopment programs.
10. Act as an underwriter of securities, except that the Fund may ac-
quire securities under circumstances in which, if the securities were
sold, the Fund might be deemed to be an underwriter for purposes of
the Securities Act of 1933, as amended.
11. Purchase any security if as a result (unless the security is ac-
quired pursuant to a plan of reorganization or an offer of exchange)
the Fund would own any securities of an open-end investment company or
more than 3% of the total outstanding voting stock of any closed-end
investment company or more than 5% of the value of the Fund's total
assets would be invested in securities of any one or more closed-end
investment companies.
12. Participate on a joint or joint-and-several basis in any securi-
ties trading account.
13. Make investments for the purpose of exercising control of manage-
ment.
14. Purchase more than 10% of the voting securities of any one is-
suer.
15. Purchase any security if as a result the Fund would then have
more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for
fewer than three years.
16. Purchase or retain securities of any company if, to the knowledge
of the Fund, any of the Fund's officers or Trustees or any officer or
director of PanAgora U.K. individually owns more than 1/2 of 1% of the
outstanding securities of the company and together they own benefi-
cially more than 5% of the securities.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of shares of the Fund in certain
states. Should the Fund determine that a commitment is no longer in the
best interests of the Fund and its shareholders, the Fund will revoke the
commitment by terminating the sale of shares of the Fund in the state in-
volved. The percentage limitations contained in the restrictions listed
above apply at the time of purchases of securities.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by PanAgora
U.K., subject to the overall review of the Fund's Board of Trustees. Al-
though investment decisions for the Fund are made independently from those
of the other accounts managed by PanAgora U.K., investments of the type
the Fund may make also may be made by those other accounts. When the Fund
and one or more other accounts managed by PanAgora U.K. are prepared to
invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner
believed by PanAgora U.K. to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Fund
or the size of the position obtained or disposed of by the Fund.
Transactions on domestic stock exchanges and some foreign stock exchanges
involve the payment of negotiated brokerage commissions. On exchanges on
which commissions are negotiated, the cost of transactions may vary among
different brokers. On most foreign exchanges, commissions are generally
fixed. No stated commission is generally applicable to securities traded
in domestic over-the-counter markets, but the prices of those securities
include undisclosed commissions or markups. Over-the-counter purchases and
sales by the Fund are transacted directly with principal market makers ex-
cept in those cases in which better prices and executions may be obtained
elsewhere. The cost of securities purchased from underwriters includes an
underwriting commission or concession, and the prices at which securities
are purchased from and sold to dealers include a dealer's mark-up or mark-
down. U.S. government securities are generally purchased from underwriters
or dealers, although certain newly issued U.S. government securities may
be purchased directly from the United States Treasury or from the issuing
agency or instrumentality.
In selecting brokers or dealers to execute securities transactions on be-
half of the Fund, PanAgora U.K. seeks the best overall terms available. In
assessing the best overall terms available for any transaction, PanAgora
U.K. will consider the factors it deems relevant, including the breadth of
the market in the security, the price of the security, the financial con-
dition and execution capability of the broker or dealer and the reason-
ableness of the commission, if any, for the specific transaction and on a
continuing basis. In addition, the Advisory Agreement authorizes PanAgora
U.K., in selecting brokers or dealers to execute a particular transaction,
and in evaluating the best overall terms available, to consider the bro-
kerage and research services (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934) provided to the Fund and/or other
accounts over which PanAgora U.K. or its affiliates exercise investment
discretion. The fees under the Advisory Agreement are not reduced by rea-
son of PanAgora U.K. receiving brokerage and research services. The Fund's
Board of Trustees periodically will review the commissions paid by the
Fund to determine if the commissions paid over representative periods of
time were reasonable in relation to the benefits inuring to the Fund. For
the fiscal period ended November 30, 1991 and the fiscal years ended No-
vember 30, 1992 and 1993, the Fund did not pay any brokerage commissions.
To the extent consistent with applicable provisions of the 1940 Act and
the rules and exemptions adopted by the SEC under the 1940 Act, the Fund's
Board of Trustees has determined that transactions for the Fund may be ex-
ecuted through Smith Barney Shearson and other affiliated broker-dealers
if, in the judgment of PanAgora U.K., the use of an affiliated broker-
dealer is likely to result in price and execution at least as favorable as
those of other qualified broker-dealers, and if, in the transaction, the
affiliated broker-dealer charges the Fund a fair and reasonable rate con-
sistent with that charged to comparable unaffiliated customers in similar
transactions. In addition, under rules recently adopted by the SEC, Smith
Barney Shearson may directly execute such transactions for the Fund on the
floor of any national securities exchange, provided: (i) the Board of
Trustees has expressly authorized Smith Barney Shearson to effect such
transactions; and (ii) Smith Barney Shearson annually advises the Fund of
the aggregate compensation it earned on such transactions.
The Fund will not purchase any security, including U.S. government securi-
ties, during the existence of any underwriting or selling group relating
to the security of which Smith Barney Shearson is a member, except to the
extent permitted under rules, interpretations or exemptions of the SEC.
PURCHASE OF SHARES
DETERMINATION OF PUBLIC OFFERING PRICE
Shares of the Fund are offered to the public on a continuous basis. The
public offering price per Class A share of the Fund is equal to the net
asset value per share at the time of purchase. Class B shares are offered
for exchange with Class B shares of other funds in the Smith Barney Shear-
son Group of Funds and for purchase by participants in the Smith Barney
Shearson 401(k) Program directly at net asset value. Class B shares may be
subject to the contingent deferred sales charge ("CDSC"), if any, of the
shares with which the exchange is made.
REDEMPTION OF SHARES
The right of redemption of shares of the Fund may be suspended or the date
of payment postponed (a) for any period during which the New York Stock
Exchange, Inc. is closed (other than for customary weekend and holiday
closings), (b) when trading in the markets the Fund normally utilizes is
restricted, or an emergency, as defined by the rules and regulations of
the SEC, exists making disposal of the Fund's investments or determination
of net asset value not reasonably practicable or (c) for such other peri-
ods as the SEC by order may permit for the protection of the Fund's share-
holders.
DISTRIBUTIONS IN KIND
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make a re-
demption payment wholly in cash, the Fund may pay, in accordance with
rules adopted by the SEC, any portion of a redemption in excess of the
lesser of $250,000 or 1% of the Fund's net assets by a distribution in
kind of portfolio securities in lieu of cash. Portfolio securities issued
in a distribution in kind will be readily marketable, although sharehold-
ers receiving distributions in kind may incur brokerage commissions when
subsequently disposing of those securities.
AUTOMATIC CASH WITHDRAWAL PLAN
An automatic cash withdrawal plan (the "Withdrawal Plan") is available to
shareholders who own shares of the Fund with a value of at least $10,000
($5,000 for retirement plan accounts) and who wish to receive specific
amounts of cash periodically. Withdrawals of at least $50 monthly may be
made under the Withdrawal Plan by redeeming as many shares of the Fund as
may be necessary to cover the stipulated withdrawal payment. Any applica-
ble CDSC will not be waived on amounts withdrawn by shareholders that ex-
ceed 2% per month of the value of a shareholder's shares at the time the
Withdrawal Plan commences. To the extent withdrawals exceed dividends,
distributions and appreciation of a shareholder's investment in the Fund,
there will be a reduction in the value of the shareholder's investment and
continued withdrawal payments will reduce the shareholder's investment and
may ultimately exhaust it. Withdrawal payments should not be considered as
income from investment in the Fund. Furthermore, as it generally would not
be advantageous to a shareholder to make additional investments in the
Fund at the same time he or she is participating in the Withdrawal Plan,
purchases by such shareholders in amounts of less than $5,000 will not or-
dinarily be permitted.
Shareholders who wish to participate in the Withdrawal Plan and who hold
their shares in certificate form must deposit their share certificates
with TSSG as agent for Withdrawal Plan members. All dividends and distri-
butions on shares in the Withdrawal Plan are reinvested automatically at
net asset value in additional shares of the Fund. All applications for
participation in the Withdrawal Plan must be reviewed by TSSG as With-
drawal Plan agent no later than the eighth day of the month to be eligible
for participation beginning with that month's withdrawal. The Withdrawal
Plan will not be carried over on exchanges between funds or classes of the
Fund ("Classes"). A new Withdrawal Plan application is required to estab-
lish the Withdrawal Plan in the new fund or Class. For additional informa-
tion regarding the Withdrawal Plan, shareholders should contact their
Smith Barney Shearson Financial Consultants.
DISTRIBUTOR
Smith Barney Shearson serves as the Fund's distributor on a best efforts
basis pursuant to a written agreement (the "Distribution Agreement"),
dated July 30, 1993, which was first approved by the Fund's Board of
Trustees on April 7, 1993.
Smith Barney Shearson forwards investors' funds for the purchase of shares
five business days after placement of purchase orders (the "settlement
date"). When payment is made by the investor before the settlement date,
unless otherwise directed by the investor, the funds will be held as a
free credit balance in the investor's brokerage account, and Smith Barney
Shearson may benefit from the temporary use of the funds. The investor may
designate another use for the funds prior to settlement date, such as in-
vestment in a money market fund (other than the Smith Barney Shearson
Money Market Fund) in the Smith Barney Shearson Group of Funds. If the in-
vestor instructs Smith Barney Shearson to invest the funds in a money mar-
ket fund in the Smith Barney Shearson Group of Funds, the amount of the
investment will be included as part of the average daily net assets of
both the Fund and the money market fund and affiliates of Smith Barney
Shearson that serve the funds in an investment advisory capacity will ben-
efit from receiving fees from both such investment companies for managing
these assets computed on the basis of their average daily net assets. The
Fund's Board of Trustees has been advised of the benefits to Smith Barney
Shearson resulting from five-day settlement procedures and will take such
benefits into consideration when reviewing the Advisory and Distribution
Agreements for continuance.
DISTRIBUTION ARRANGEMENTS
To compensate Smith Barney Shearson for the services it provides and for
the expenses it bears under the Distribution Agreement, the Fund has
adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the
1940 Act. Under the Plan, the Fund pays Smith Barney Shearson an annual
distribution fee of .90% of the value of the Fund's average daily net as-
sets attributable to Class A shares and Class B shares. The distribution
fee is accrued daily and paid monthly with respect to each Class. For the
fiscal period ended November 30, 1991 and for the fiscal years ended No-
vember 30, 1992 and 1993, the Fund incurred distribution expenses under
the Plan totalling $4,840,034, $3,976,966 and $1,202,614, respectively.
Under its terms, the Plan continues from year to year, provided such con-
tinuance is approved annually by vote of the Fund's Board of Trustees, in-
cluding a majority of the Trustees who are not interested persons of the
Fund and who have no direct or indirect financial interest in the opera-
tion of the Plan or any agreement related to the Plan (the "Independent
Trustees"). The Plan may not be amended to increase the amount of the dis-
tribution fee without shareholder approval, and all material amendments of
the Plan also must be approved by the Trustees in the manner described
above. The Plan may be terminated with respect to a Class at any time,
without penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of the Class (as
defined in the 1940 Act). Pursuant to the Plan, Smith Barney Shearson will
provide the Fund's Board of Trustees with periodic reports of amounts ex-
pended under the Plan and the purpose for which such expenditures were
made.
VALUATION OF SHARES
As noted in the Prospectus, the Fund will not calculate its net asset
value on certain holidays. On those days, securities held by the Fund may
nevertheless be actively traded, and the value of the Fund's shares could
be significantly affected. Because of the differences in Class-specific
expenses, the per share net asset value of each Class will differ.
The Fund may invest in foreign securities and, as a result, the calcula-
tion of the Fund's net asset value may not take place contemporaneously
with the determination of the prices of certain of the portfolio securi-
ties used in the calculation. A security that is listed or traded on more
than one exchange is valued for purposes of calculating the Fund's net
asset value at the quotation on the exchange determined to be the primary
market for the security. All assets and liabilities initially expressed in
foreign currency values will be converted into U.S. dollar values at the
mean between the bid and offered quotations of the currencies against U.S.
dollars as last quoted by any recognized dealer. If the bid and offered
quotations are not available, the rate of exchange will be determined in
good faith by the Fund's Board of Trustees. In carrying out the Board's
valuation policies, Boston Advisors, as administrator, may consult with an
independent pricing service (the "Pricing Service") retained by the Fund.
Debt securities of U.S. issuers (other than U.S. government securities and
short-term investments) are valued by Boston Advisors after consultation
with the Pricing Service. When, in the judgment of the Pricing Service,
quoted bid prices for investments are readily available and are represen-
tative of the bid side of the market, these investments are valued at the
mean between the quoted bid prices and asked prices. Investments for
which, in the judgment of the Pricing Service, no readily obtainable mar-
ket quotations are available, are carried at fair value as determined by
the Pricing Service. The procedures of the Pricing Service are reviewed
periodically by the officers of the Fund under the general supervision and
responsibility of the Board of Trustees.
EXCHANGE PRIVILEGE
Class A and Class B shares of the Fund may be exchanged for shares of the
respective Class of many of the funds in the Smith Barney Shearson Group
of Funds, as indicated in the Prospectus, to the extent such shares are
offered for sale in the shareholder's state of residence.
Except as noted below, shareholders of any fund in the Smith Barney Shear-
son Group of Funds may exchange all or a portion of their shares for
shares of the same Class of other funds in the Smith Barney Shearson Group
of Funds, as listed in the Prospectus, on the basis of relative net asset
value per share at the time of exchange as follows:
A. Class A shares of any fund purchased with a sales charge may be
exchanged for Class A shares of any of the other funds, and the sales
charge differential, if any, will be applied. Class A shares of any
fund may be exchanged without a sales charge for shares of the funds
that are offered without a sales charge. Class A shares of any fund
purchased without a sales charge may be exchanged for shares sold with
a sales charge, and the appropriate sales charge differential will be
applied.
B. Class A shares of any fund acquired by a previous exchange of
shares purchased with a sales charge may be exchanged for Class A
shares of any of the other funds, and the sales charge differential,
if any, will be applied.
C. Class B shares of any fund may be exchanged without a sales
charge. Class B shares of the Fund exchanged for Class B shares of an-
other fund will be subject to the higher applicable CDSC and, for pur-
poses of calculating CDSC rates and conversion periods, will be deemed
to have been held since the date the shares being exchanged (or any
predecessor of those shares) were purchased.
Dealers other than Smith Barney Shearson must notify TSSG of the inves-
tor's prior ownership of Class A shares of Smith Barney Shearson High In-
come Fund and the account number in order to accomplish an exchange of the
shares of High Income Fund under paragraph B above.
The exchange privilege enables shareholders to acquire shares of the same
class in a fund with different investment objectives when they believe
that a shift between funds is an appropriate investment decision. This
privilege is available to shareholders residing in any state in which the
fund shares being acquired may legally be sold. Prior to any exchange, the
shareholder should obtain and review a copy of the current prospectus of
each fund into which an exchange is being considered. Prospectuses may be
obtained from your Smith Barney Shearson Financial Consultant.
Upon receipt of proper instructions and all necessary supporting docu-
ments, shares submitted for exchange are redeemed at the then-current net
asset value and, subject to any applicable CDSC, the proceeds immediately
invested, at a price as described above, in shares of the fund being ac-
quired. Smith Barney Shearson reserves the right to reject any exchange
request. The exchange privilege may be modified or terminated at any time
after notice to shareholders.
PERFORMANCE DATA
From time to time, the Fund may quote the yield or total return of the
Classes in advertisements or in reports and other communications to share-
holders. To the extent any advertisement or sales literature of the Fund
describes the expenses or performance of a Class, it will also disclose
such information for the other Class.
YIELD
The 30-day yield figure of each Class described in the Prospectus is cal-
culated according to a formula prescribed by the SEC. The formula can be
expressed as follows:
YIELD =2 [ ( a-bcd +1)6 -1]
Where: a =dividends and interest earned during the period.
b =expenses accrued for the period (net of reimbursement).
c =the average daily number of shares outstanding during the pe-
riod that were entitled to receive dividends.
d =the maximum offering price per share on the last day of the
period.
For the purpose of determining the interest earned (variable "a" in the
formula) on debt obligations purchased by the Fund at a discount or pre-
mium, the formula generally calls for amortization of the discount or pre-
mium; the amortization schedule will be adjusted monthly to reflect
changes in the market values of the debt obligations.
Class A's yield for the 30-day period ended November 30, 1993 was 4.24%.
If PanAgora U.K., Boston Advisors, Boston Safe and Smith Barney Shearson
(or its predecessor) had not partially waived investment advisory, admin-
istration, custody and distribution fees, the yield for the same period
would have been 3.96%.
At November 30, 1993, there was one outstanding Class B share in exist-
ence, and therefore no relevant performance data is presented for that
class.
Investors should recognize that in periods of declining interest rates,
yield will tend to be somewhat higher than prevailing market rates, and in
periods of rising interest rates yield will tend to be somewhat lower. In
addition, when interest rates are falling, the inflow of net new money to
the Fund from the continuous sale of its shares will likely be invested in
portfolio instruments producing lower yields than the balance of its port-
folio of securities, thereby reducing the current yield of the Classes. In
periods of rising interest rates, the opposite result can be expected to
occur.
AVERAGE ANNUAL TOTAL RETURN
The "average annual total return" of a Class, as described in the Prospec-
tus, is computed according to a formula prescribed by the SEC. The formula
can be expressed as follows:
P(1+T)n = ERV
Where: P =a hypothetical initial payment of $1,000.
T =average annual total return.
n =number of years.
ERV =Ending Redeemable Value of a hypothetical $1,000 investment
made at the beginning of a 1-, 5- or 10-year period at the
end of the 1-, 5- or 10-year period (or fractional portion
thereof), assuming reinvestment of all dividends and dis-
tributions.
Class A's average annual total returns were as follows for the periods in-
dicated: (.78)% for the one-year period beginning December 1, 1992 through
November 30, 1993; and .19% per annum during the period from the Fund's
commencement of operations on January 14, 1991 through November 30, 1993.
Had the investment advisory, administration, custody, and distribution
fees not been partially waived, the Class A's average annual total returns
for the same periods would have been (1.35)% and (.01)%, respectively.
AGGREGATE TOTAL RETURN
The "aggregate total return" of a Class, as described in the Prospectus
represents the cumulative change in the value of an investment in the
Class for the specified period and is computed by the following formula:
ERV-P P
Where: P =a hypothetical initial payment of $10,000.
ERV =Ending Redeemable Value of a hypothetical $10,000 invest-
ment made at the beginning of a 1-, 5- or 10-year period at
the end of the 1-, 5- or 10-year period (or fractional por-
tion thereof), assuming reinvestment of all dividends and
distributions.
Class A's aggregate total returns were as follows for the periods indi-
cated: (.78)% for the one-year period beginning December 1, 1992 through
November 30, 1993; and .54% for the period from the Fund's commencement of
operations on January 14, 1991 through November 30, 1993.
Class B's aggregate total returns were as follows for the periods indi-
cated: $(1.60) for the one-year period beginning December 1, 1992 through
November 30, 1993; and (1.60)% for the period beginning November 6, 1992
through November 30, 1993.
A Class' aggregate total return figures calculated in accordance with the
above formula assume that the maximum applicable CDSC has been deducted
from the investment at the time of redemption. If the maximum applicable
CDSC had not been deducted at the time of redemption, Class B's aggregate
total returns would have been (1.60)% and (1.60)%, respectively, for the
same periods. Had the investment advisory, administration, custody, and
distribution fees not been partially waived, the Class A's aggregate total
return would have been (1.35)% and (.04)%, respectively, for the same pe-
riods and Class B's aggregate total return would have been (2.17)% and
(2.17)%, respectively, for the same periods.
A Class' performance will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio, the Fund's operating
expenses and the expenses exclusively attributable to a Class. Conse-
quently, any given performance quotation should not be considered repre-
sentative of a Class' performance for any specified period in the future.
Because performance will vary, it may not provide a basis for comparing an
investment in a Class with certain bank deposits or other investments that
pay a fixed yield for a stated period of time. Investors comparing the
performance of a Class with that of other mutual funds or classes of mu-
tual funds should give consideration to the quality and maturity of the
portfolio securities of the funds or classes.
It is important to note that the total return figures set forth above are
based on historical earnings and are not intended to indicate future per-
formance.
TAXES
Set forth below is a summary of certain income tax considerations gener-
ally affecting the Fund and its shareholders. The summary is not intended
as a substitute for individual tax planning, and shareholders are urged to
consult their tax advisors with specific reference to their own specific
tax situations.
The Fund has qualified and intends to qualify each year as a "regulated
investment company" under the Code. Provided that the Fund (a) is a regu-
lated investment company and (b) distributes to its shareholders at least
90% of its net investment income (including for this purpose its net real-
ized short-term capital gains), the Fund will not be liable for Federal
income taxes to the extent its net investment income and its net realized
long-term and short-term capital gains, if any, are distributed to its
shareholders.
The Fund's transactions in foreign currencies, forward currency contracts,
options and futures contracts (including options and futures on foreign
currencies) will be subject to special provisions of the Code that, among
other things, may affect the character of gains and losses realized by the
Fund (that is, may affect whether gains or losses are ordinary or capi-
tal), accelerate recognition of income to the Fund and defer Fund losses.
These rules could therefore affect the character, amount and timing of
distributions to shareholders of the Fund. These provisions also (a) will
require the Fund to mark to market certain types of the positions in its
portfolio (that is, treat them as if they were closed out) and (b) may
cause the Fund to recognize income without receiving cash with which to
make distributions in amounts necessary to satisfy the distribution re-
quirements for avoiding income and excise taxes described above and in the
Prospectus. The Fund will monitor its transactions, will make the appro-
priate tax elections and will make the appropriate entries in its books
and records when it acquires any foreign currency, forward currency con-
tract, option, futures contract or hedged investment in order to mitigate
the effect of these rules and prevent disqualification of the Fund as a
regulated investment company.
As a general rule, a shareholder's gain or loss on a sale or redemption of
Fund shares will be a long-term capital gain or loss if the shareholder
has held the shares for more than one year. The gain or loss will be a
short-term capital gain or loss if the shareholder has held the shares for
one year or less.
The Fund's net realized long-term capital gains will be distributed as de-
scribed in the Fund's Prospectus. The distributions ("capital gain divi-
dends"), if any, will be taxable to a shareholder as long-term capital
gains, regardless of how long the shareholder has held Fund shares, and
will be designated as capital gain dividends in a written notice mailed by
the Fund to the shareholder after the close of the Fund's prior taxable
year. If a shareholder receives a capital gain dividend with respect to
any share, and if the share has been held by the shareholder for six
months or less, then any loss on the sale or exchange of the share, to the
extent of the capital gain dividend, will be treated as a long-term capi-
tal loss.
Investors considering buying Fund shares on or just prior to the record
date for a taxable dividend or capital gain distribution should be aware
that the amount of the forthcoming dividend or distribution payment will
be a taxable dividend or distribution payment.
If a shareholder fails to furnish a correct taxpayer identification num-
ber, fails to report fully dividend or interest income, or fails to cer-
tify that he or she has provided a correct taxpayer identification number
and that he or she is not subject to "backup withholding," then the share-
holder may be subject to a 31% "backup withholding" tax with respect to
(a) taxable dividends and distributions from the Fund and (b) the proceeds
of any redemptions of Fund shares. An individual's taxpayer identification
number is his or her social security number. The backup withholding tax is
not an additional tax and may be credited against a taxpayer's regular
Federal income tax liability.
CUSTODIAN AND TRANSFER AGENT
Boston Safe, a wholly owned subsidiary of TBC, is located at One Boston
Place, Boston, Massachusetts 02108, and serves as the custodian of the
Fund. Under its agreement with the Fund, Boston Safe holds the Fund's
portfolio securities and keeps all necessary accounts and records. For its
services, Boston Safe receives a monthly fee based upon the month-end mar-
ket value of securities held in custody and also receives securities
transaction charges. Boston Safe is authorized to establish separate ac-
counts for foreign securities owned by the Fund to be held with foreign
branches of other domestic banks as well as with certain foreign banks and
securities depositories. The assets of the Fund are held under bank custo-
dianship in compliance with the 1940 Act.
TSSG is located at Exchange Place, Boston, Massachusetts 02109, and serves
as the Fund's transfer agent. Under its agreement with the Fund, TSSG
maintains the shareholder account records for the Fund, handles certain
communications between shareholders and the Fund and distributes dividends
and distributions payable by the Fund. For these services, TSSG receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month and is reimbursed for out-of-
pocket expenses.
FINANCIAL STATEMENTS
The Fund's Annual Report for the fiscal year ended November 30, 1993 is
incorporated herein by reference in its entirety.
APPENDIX
DESCRIPTION OF S&P AND MOODY'S RATINGS
Description of corporate bond ratings of Standard & Poor's Corporation
("S&P"):
AAA
Bonds rated AAA have the highest rating assigned by S&P to a debt obliga-
tion. Capacity to pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay prin-
cipal and differ from the highest rated issues only in small degree.
The AA rating may be modified by the addition of a plus or minus sign to
show relative standing within the major rating categories.
DESCRIPTION OF CORPORATE BOND RATINGS OF MOODY'S INVESTORS SERVICE, INC.
("MOODY'S"):
AAA
Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an excep-
tionally stable margin and principal is secure. While the various protec-
tive elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
AA
Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because mar-
gins of protection may not be as large as in Aaa securities or fluctua-
tions of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
Moody's applies the numerical modifiers 1, 2 and 3 to the Aa generic rat-
ing classification. The modifier 1 indicates that the security ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in
the lower end of its generic rating category.
DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS:
Commercial paper rated A-1 by S&P indicates that the degree of safety re-
garding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted
A-1+. Capacity for timely payment on commercial paper rated A-2 is strong,
but the relative degree of safety is not as high as for issues designated
A-1.
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS:
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) are
considered to have a superior capacity for repayment of short-term promis-
sory obligations. Issuers rated Prime-2 (or related supporting institu-
tions) are considered to have a strong capacity for repayment of short-
term promissory obligations. This will normally be evidenced by many of
the characteristics of issuers rated Prime-1 but to a lesser degree. Earn-
ings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is main-
tained.
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
Two World Trade Center
New York, New York 10048 Fund 139
Smith Barney Shearson
WORLDWIDE PRIME
ASSETS FUND
STATEMENT OF
ADDITIONAL INFORMATION
APRIL 1, 1994
Smith Barney Shearson
SMITH BARNEY SHEARSON WORLDWIDE PRIME ASSETS FUND
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A
Financial Highlights
Included in Part B
The Registrant's Annual Report for the fiscal year ended November 30, 1993
and the Report
of Independent Accountants dated January 7, 1994 are incorporated by reference
to the Definitive 30b2 filed on January 27, 1994 as Accession #0000053798-94-
000038.
Included in Part C:
Consent of Independent Accountants
(b) Exhibits
All references are to the Registrant's registration statement on Form N-1A as
filed with the Securities and Exchange Commission on November 30, 1990, File
Nos. 33-37750 and 811-6219 (the "Registration Statement").
(1) Registrant's Amended and Restated Master Trust Agreement dated
November 5, 1992 and Amendment No. 1 to the Master Trust Agreement dated July
30, 1993 is filed herein.
(2) Registrant's By-Laws are incorporated by reference to the Registration
Statement.
(3) Not Applicable.
(4) Registrant's form of stock certificate for Class A and Class B shares is
incorporated by reference to Post-Effective Amendment No. 4.
(5) Investment Advisory Agreement between the Registrant and PanAgora Asset
Management Limited ("PanAgora U.K.") is incorporated by reference to Post-
Effective Amendment No. 1 to the Registration Statement filed on July 31, 1991
("Post-Effective Amendment No.1).
(6) Distribution Agreement between the Registrant and Smith Barney
Shearson Inc. ("Smith Barney Shearson") is filed herein.
(7) Not Applicable.
(8) Custody Agreement between the Registrant and Boston Safe Deposit and
Trust Company ("Boston Safe") is incorporated by reference to Post-Effective
Amendment No. 1.
(9)(a) Administration Agreement between the Registrant and The Boston
Advisors, Inc. dated May 21, 1993 is filed herein.
(b) Transfer Agency Agreement between the Registrant and The
Shareholder Services Group, Inc. dated August 2, 1993 is filed herein.
(10) Not Applicable.
(11) Consent of Independent Accountants is filed herein.
(12) Not Applicable.
(13) Purchase Agreement between the Registrant and Shearson Lehman Brothers
Inc. is incorporated by reference to Pre-Effective Amendment No. 1.
(14) Not Applicable.
(15) Amended and Restated Services and Distribution Plan pursuant to
Rule 12b-1 between the Registrant and Smith Barney Shearson is filed
herein.
(16) Performance Data is incorporated by reference to Post-Effective
Amendment No. 1.
Item 25. Persons Controlled by or Under Common Control with Registrant
None
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders by Class as of December 31, 1993
Beneficial Interest Class A- 4,383
par value $.001 per Class B- 1
share
Item 27. Indemnification
The response to this item is incorporated by reference to Pre-Effective
Amendment No. 2.
Item 28(a). Business and Other Connections of Investment Adviser
Investment Adviser - - PanAgora Asset Management Limited
PanAgora Asset Management Limited ("PanAgora Management") is the product of a
joint venture between Lehman Brothers Inc., which is a wholly owned subsidiary
of Lehman Brothers Holdings Inc. ("Lehman Holdings"), all of the common stock
(which represents 92% of the voting stock of Lehman Holdings) of which is held
by American Express Company. The remaining voting stock of Lehman Holdings is
held by Nippon Life Insurance Company. PanAgora Management is an investment
adviser registered under the Investment Advisers Act of 1940 (the "Advisers
Act") and offers multi-currency equity, fixed income and currency investment
products, and provides global asset allocation services to institutional
clients.
The list required by this Item 28 of officers and directors of PanAgora
Management, 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 years, is incorporated by reference to Schedules
A and D FORM ADV filed by PanAgora Management pursuant to the Advisers Act
(SEC File No. 801-35200).
8/23/93
Item 29. Principal Underwriters
Smith Barney Shearson Inc. ("Smith Barney Shearson") currently acts as
distributor for Smith Barney Shearson Managed Municipals Fund Inc., Smith
Barney Shearson New York Municipals Fund Inc., Smith Barney Shearson
California Municipals Fund Inc., Smith Barney Shearson Massachusetts
Municipals Fund, Smith Barney Shearson Global Opportunities Fund, Smith Barney
Shearson Aggressive Growth Fund Inc., Smith Barney Shearson Appreciation Fund
Inc., Smith Barney Shearson Small Capitalization Fund, Smith Barney Shearson
Worldwide Prime Assets Fund, Smith Barney Shearson Short-Term World Income
Fund, Smith Barney Shearson Principal Return Fund, Smith Barney Shearson
Municipal Money Market Fund Inc., Smith Barney Shearson Daily Dividend Fund
Inc., Smith Barney Shearson Government and Agencies Fund Inc., Smith Barney
Shearson Managed Governments Fund Inc., Smith Barney Shearson New York
Municipal Money Market Fund, Smith Barney Shearson California Municipal Money
Market Fund, Smith Barney Shearson Income Funds, Smith Barney Shearson Equity
Funds, Smith Barney Shearson Investment Funds Inc., Smith Barney Shearson
Precious Metals and Minerals Fund Inc., Smith Barney Shearson
Telecommunications Trust, Smith Barney Shearson Arizona Municipals Fund Inc.,
Smith Barney Shearson New Jersey Municipals Fund Inc., The USA High Yield Fund
N.V., Garzarelli Sector Analysis Portfolio N.V., The Advisors Fund L.P., Smith
Barney Shearson Fundamental Value Fund Inc., Smith Barney Shearson Series
Fund, The Trust for TRAK Investments, Smith Barney Shearson Income Trust,
Smith Barney Shearson FMA R Trust, Smith Barney Shearson Adjustable Rate
Government Income Fund, Smith Barney Shearson Florida Municipals Fund, Smith
Barney Funds, Inc., Smith Barney Equity Funds, Inc., Smith Barney Muni Funds,
Smith Barney World Funds, Inc., Smith Barney Money Funds, Inc., Smith Barney
Tax Free Money Fund, Inc., Smith Barney Variable Account Funds, Smith Barney
U.S. Dollar Reserve Fund (Cayman), Worldwide Special Fund, N.V., Worldwide
Securities Limited, (Bermuda), and various series of unit investment trusts.
Smith Barney Shearson is a wholly owned subsidiary of Smith Barney
Shearson Holdings Inc., which in turn is a wholly owned subsidiary of The
Travelers Inc. The information required by this Item 29 with respect to each
director, officer and partner of Smith Barney Shearson is incorporated by
reference to Schedule A of FORM BD filed by Smith Barney Shearson pursuant to
the Securities Exchange Act of 1934 (SEC File No. 812-8510).
1/27/94
Item 30. Location of Accounts and Records
(1) Smith Barney Shearson
Worldwide Prime Assets Fund
Two World Trade Center
New York, New York 10048
(2) PanAgora Management Limited
Three Finsbury Avenue
London, England EC2M 2PA
(3) The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
(4) Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
(5) The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Response to this item is incorporated by reference to Post-
Effective Amendment No. 4.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant, SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND, has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, State of New York on
the
24th day of January, 1994.
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
By: /s/ Heath B.
McLendon*
Heath B. McLendon, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Heath B. McLendon* Chairman of the Board 1/24/94
Heath B. McLendon (Chief Executive Officer)
/s/ Vincent Nave* Treasurer (Chief Financial
1/24/94
Vincent Nave and Accounting Officer)
/s/ Paul R. Ades* Trustee
1/24/94
Paul R. Ades
/s/ Herbert Barg* Trustee
1/24/94
Herbert Barg
/s/ Allan R. Johnson* Trustee
1/24/94
Allan R. Johnson
/s/ Ken Miller* Trustee
1/24/94
Ken Miller
/s/ John White* Trustee
1/24/94
John F. White
* Signed by Lee D. Augsburger, their
duly authorized attorney-in-fact, pursuant
power of attorney dated January 27, 1993.
/s/ Lee D. Augsburger
Lee D. Augsburger
g/domestic/general/signpage
EXHIBIT 1
SHEARSON LEHMAN BROTHERS WORLDWIDE PRIME ASSETS FUND
FIRST AMENDED AND RESTATED
MASTER TRUST AGREEMENT
NOVEMBER 5 1992
SHEARSON LEHMAN BROTHERS WORLDWIDE PRIME ASSETS FUND
FIRST AMENDED AND RESTATED
MASTER TRUST AGREEMENT
Page
ARTICLE I. NAME AND DEFINITIONS 1
Section 1.1 Name 1
Section 1.2 Definitions 1
a) "Trust" 2
b) "Class" 2
c) "Trustees" 2
d) "Shares" 2
e) "Series" 2
f) "Shareholder" 2
g) "1940 Act" 2
h) "Commission" 2
i) "Declaration of Trust" 2
j) "By-Laws" 2
ARTICLE II. PURPOSE OF TRUST 2
ARTICLE III. THE TRUSTEES 3
Section 3.1 Number, Designation, Election, Term, etc 3
a) Trustees 3
b) Number 3
c) Election and Term 3
d) Resignation and Retirement 3
e) Removal 3
f) Vacancies 4
g) Effect of Death, Resignation, etc 4
h) No Accounting 4
i) Retirement Policy 4
j) Trustees Emeritus 5
Page
Section 3.2 Powers of Trustees 5
a) Investments 6
b) Disposition of Assets 6
c) Ownership Powers 6
d) Subscription 7
e) Form of Holding 7
f) Reorganization, etc 7
g) Voting Trusts, etc 7
h) Compromise 7
i) Partnerships, etc 7
j) Borrowing and Security 7
k) Guarantees, etc 8
l) Insurance 8
m) Pensions, etc 8
Section 3.3 Certain Contracts 8
a) Advisory 9
b) Administration 9
c) Distribution 9
d) Custodian and Depository 9
e) Transfer and Dividend Disbursing Agency 9
f) Shareholder Servicing 10
g) Accounting 10
Section 3.4 Payment of Trust Expenses and
Compensation of Trustees 11
Section 3.5 Ownership of Assets of the Trust 11
ARTICLE IV. SHARES 11
Section 4.1 Description of Shares 11
Section 4.2 Establishment and Designation of
Sub-Trusts 13
a) Assets Belonging to Sub-Trusts 14
b) Liabilities Belonging to Sub-Trusts 14
c) Dividends 15
d) Liquidation 16
e) Voting 16
f) Redemption by Shareholder 16
Page
g) Redemption by Trust 17
h) Net Asset Value 17
i) Transfer 18
j) Equality 18
k) Fractions 18
l) Conversion Rights 19
m) Class Differences 19
Section 4.3 Ownership of Shares 19
Section 4.4 Investments in the Trust 19
Section 4.5 No Pre-emptive Rights 19
Section 4.6 Status of Shares and Limitation of
Personal Liability 20
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 20
Section 5.1 Voting Powers 20
Section 5.2 Meetings 21
Section 5.3 Record Dates 21
Section 5.4 Quorum and Required Vote 22
Section 5.5 Action by Written Consent 22
Section 5.6 Inspection of Records 22
Section 5.7 Additional Provisions 22
Section 5.8 Shareholder Communications 22
ARTICLE VI. LIMITATION OF LIABILITY; INDEMNIFICATION 23
Section 6.1 Trustees, Shareholders, etc.
Not Personally Liable; Notice 23
Section 6.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety 24
Section 6.3 Indemnification of Shareholders 24
Page
Section 6.4 Indemnification of Trustees, Officers, etc 25
Section 6.5 Compromise Payment 26
Section 6.6 Indemnification Not Exclusive, etc 26
Section 6.7 Liability of Third Persons Dealing with
Trustees 27
ARTICLE VII. MISCELLANEOUS 27
Section 7.1 Duration and Termination of Trust 27
Section 7.2 Reorganization 27
Section 7.3 Amendments 28
Section 7.4 Filing of Copies; References; Headings 28
Section 7.5 Applicable Law 29
SHEARSON LEHMAN BROTHERS WORLDWIDE PRIME ASSETS FUND
FIRST AMENDED AND RESTATED
MASTER TRUST AGREEMENT
FIRST AMENDED AND RESTATED MASTER TRUST AGREEMENT made at Boston,
Massachusetts as of this 5th day of November, 1992, by the Trustees hereunder,
and by the holders of shares of beneficial interest to be issued hereunder as
hereinafter provided.
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an investment
company; and
WHEREAS this Trust is authorized to issue its shares of beneficial interest in
separate series, each separate series to be a Sub-Trust hereunder, and to
issue classes of Shares of any Sub-Trust or divide Shares of any Sub-Trust
into two or more classes, all in accordance with the provisions hereinafter
set forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust or Sub-Trusts created
hereunder as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. This Trust shall be known as "Shearson Lehman Brothers
Worldwide Prime Assets Fund" and the Trustees shall conduct the business of
the Trust under that name or any other name or names as they may from time to
time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided: (a) The "Trust" refers to the
Massachusetts business trust established by this Trust Agreement, as amended
from time to time, inclusive of each and every Sub-Trust established
hereunder;
(b) "Class" refers to any class of Shares of any Series or Sub-Trust
established and designated under or in accordance with the provisions of
Article IV;
(c) "Trustees" refers to the Trustees of the Trust and of each Sub-Trust
hereunder named herein or elected in accordance with Article III;
(d) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust and each Sub-Trust of the Trust and/or any
class of any Sub-Trust (as the context may require) shall be divided from time
to time;
(e) "Series" refers to Series of Shares established and designated under
or in accordance with the provisions of Article IV, each of which Series shall
be a Sub-Trust of the Trust;
(f) "Shareholder" means a record owner of Shares;
(g) The "l940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(h) The term "Commission" shall have the meaning given it in the 1940
Act;
(i) "Declaration of Trust" shall mean this First Amended and Restated
Master Trust Agreement, as amended or restated from time to time; and
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company and to offer
Shareholders of the Trust and each Sub-Trust of the Trust one or more
investment programs primarily in securities and debt instruments.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, etc.
(a) Trustees. The Trustees hereof and of each Sub-Trust hereunder are
Paul R. Ades, Herbert Barg, Allan Johnson, Ken Miller and John F. White,
Thomas A. Belshe, Heath B. McLendon, William J. Nutt.
(b) Number. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease (to not less than two)
the number of Trustees to a number other than the number theretofore
determined. No decrease in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of his term, but the
number of Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 3.1.
(c) Election and Term. The Trustees shall be elected by the
Shareholders of the Trust at the first meeting of Shareholders following the
initial public offering of shares of the Trust. Each Trustee, whether named
above or hereafter becoming a Trustee, shall serve as a Trustee of the Trust
and of each Sub-Trust hereunder during the lifetime of this Trust and until
its termination as hereinafter provided except as such Trustee sooner dies,
resigns or is removed. Subject to Section 16(a) of the 1940 Act, the Trustees
may elect their own successors and may, pursuant to Section 3.1(f) hereof,
appoint Trustees to fill vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or
retire as a Trustee, by written instrument signed by him and delivered to the
other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument and shall be effective as to the Trust and each
Sub-Trust hereunder.
(e) Removal. Any Trustee may be removed with or without cause at any
time: (i) by written instrument, signed by at least two-thirds of the number
of Trustees prior to such removal, specifying the date upon which such removal
shall become effective; or (ii) by vote of Shareholders holding not less than
two-thirds of the Shares then outstanding, cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than two-thirds of the Shares then outstanding
and filed with the Trust's Custodian. Any such removal shall be effective as
to the Trust and each Sub-Trust hereunder.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
reason, including without limitation the death, resignation, retirement,
removal or incapacity of any of the Trustees, or resulting from an increase in
the number of Trustees by the other Trustees may (but so long as there are at
least two remaining Trustees, need not unless required by the 1949 Act) be
filled by a majority of the remaining Trustees, subject to the provisions of
Section 16(a) of the 1940 Act, through the appointment in writing of such
other person as such remaining Trustees in their discretion shall determine
and such appointment shall be effective upon the written acceptance of the
person named therein to serve as a Trustee and agreement by such person to be
bound by the provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy to occur by reason of retirement,
resignation, or increase in number of Trustees to be effective at a later date
shall become effective only at or after the effective date of said retirement,
resignation, or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted such appointment and shall have agreed in
writing to be bound by this Declaration of Trust and the appointment is
effective, the Trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one of them, shall
not operate to annul or terminate the Trust or any Sub-Trust hereunder or to
revoke or terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
(h) No Account in . Except to the extent required by the 1940 Act or
under circumstances which would justify his removal for cause, no person
ceasing to be a Trustee as a result of his death, resignation, retirement,
removal or incapacity (nor the estate of any such person) shall be required to
make an accounting to the Shareholders or remaining Trustees upon such
cessation.
(i) Retirement Policy. Except for those individuals who (a) were
Trustees as of [specify effective date] or
(b) were members of the Board of Directors or Trustees of an investment
company having an investment adviser or principal underwriter under common
control with the Trust's investment adviser or principal underwriter
immediately prior to such investment company's combination with the Trust by
merger, acquisition of assets or similar transaction, and of which Trustees
may continue to be nominated as Trustees and to serve as Trustees if elected
or appointed in accordance with Section 3.1(c) of this Article III, an
individual who has reached the age of seventy-two (72) years may not be
elected, re-elected, or appointed to serve as a Trustee.
(j) Trustees Emeritus. An individual who has served as a Trustee for a
minimum of five years (5) and who retires voluntarily or who may not stand for
re-election because of age may be designated by the remaining Trustees as a
Trustee Emeritus.
An individual designated as a Trustee Emeritus may, upon his or her request,
be permitted to attend meetings of the Trustees and to receive all materials
sent to active Trustees. A Trustee Emeritus shall not have voting rights at
meetings of the Trustees and shall not be under a duty to manage or direct the
business and affairs of the Trust. A Trustee Emeritus shall not be deemed to
stand in a fiduciary relation to the Trust, and shall not be responsible to
disCharge the duties of a Trustee or to exercise that diligence, care or skill
which a Trustee would ordinarily be required to exercise under applicable
laws; provided, however, that a Trustee Emeritus may be held liable to the
Trust for any action amounting to bad faith, willful misconduct or gross
negligence, disclosure of any confidential information of the Trust or
appropriation of any opportunity of the Trust.
A stipend, the amount to be determined by the Trustees from time to time,
which shall not exceed the basis upon which active Board Members are
compensated, shall be paid to each Trustee Emeritus. A Trustee Emeritus shall
be indemnified to the full extent that an Off icer or Trustee of the Trust may
be indemnified under any provision of this Declaration of Trust or the By-
Laws.
Section 3.2 Powers of Trustees. Subject to the provisions of this Declaration
of Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility
and the purpose of the Trust. Without limiting the foregoing, the Trustees
may adopt By-Laws not inconsistent with this Declaration of Trust providing
for the conduct of the business and affairs of the Trust and may amend and
repeal them to the extent that such By-Laws do not reserve that right to the
Shareholders; they may from time to time in accordance with the provisions of
Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust to operate as a
separate and distinct investment medium and with separately defined investment
objectives and policies and distinct investment purpose; they may from time to
time in accordance with the provisions of Section 4.1 hereof establish classes
of Shares of any Series or Sub-Trust or divide the Shares of any Series or
Sub-Trust into classes; they may as they consider appropriate elect and remove
officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a
Trustee, and may provide for the compensation of all of the foregoing; they
may appoint from their own number, and terminate, any one or more committees
consisting of two or more Trustees, including without implied limitation an
executive committee, which may, when the Trustees are not in session and
subject to the 1940 Act, exercise some or all of the power and authority of
the Trustees as the Trustees may determine; in accordance with Section 3.3
they may employ one or more Advisers, Administrators, Depositories and
Custodians and may authorize any Depository or Custodian to employ
subcustodians or agents and to deposit all or any part of such assets in a
system or systems for the central handling of securities and debt instruments,
retain transfer, dividend, accounting or Shareholder servicing agents or any
of the foregoing, provide for the distribution of Shares by the Trust through
one or more distributors, principal underwriters or otherwise, set record
dates or times for the determination of Shareholders or various of them with
respect to various matters; they may compensate or provide for the
compensation of the Trustees, officers, advisers, administrators, custodians,
other agents, consultants and employees of the Trust or the Trustees on such
terms as they deem appropriate; and in general they may delegate to any
officer of the Trust, to any committee of the Trustees and to any employee,
adviser, administrator, distributor, depository, custodian, transfer and
dividend disbursing agent, or any other agent or consultant of the Trust such
authority, powers, functions and duties as they consider desirable or
appropriate for the conduct of the business and affairs of the Trust,
including without implied limitation the power and authority to act in the
name of the Trust and of the Trustees, to sign documents and to act as
attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority
for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) Investments. To invest and reinvest cash and other property, and to hold
cash or other property uninvested without in any event being bound or limited
by any present or future law or custom in regard to investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets of the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities, debt instruments or
property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person
or persons such power and discretion with relation to securities, debt
instruments or property as the Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities or debt instruments;
(e) Form of Holding. To hold any security, debt instrument or property in a
form not indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust or of any Sub-
Trust or in the name of a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer, any
security or debt instrument of which is or was held in the Trust; to consent
to any contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect to any
security or debt instrument held in the Trust;
(g) Voting Trusts, etc. To join with other holders of any securities or debt
instruments in acting through a committee, depositary, voting trustee or
otherwise, and in that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims in favor
of or against the Trust or any Sub-Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and pledge the
assets of the Trust or any part thereof to secure obligations arising in
connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of or all such
obligations;
(l) Insurance. To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments,' and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, investment advisers,
managers, administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person
in any such capacity, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trust and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees on
behalf of the Trust or any Sub-Trust may be taken by a majority of the
Trustees present at a meeting of Trustees (a quorum, consisting of at least a
majority of the Trustees then in office, being present), within or without
Massachusetts, including any meeting held by means of a conference telephone
or other communications equipment by means of which all persons participating
in the meeting can hear each other at the same time and participation by such
means shall constitute presence in person at a meeting, or by written consents
of a majority of the Trustees then in office (or such larger or different
number as may be required by the 1940 Act or other applicable law). Section
3.3 Certain Contracts. Subject to compliance with the provisions of the 1940
Act, but notwithstanding any limitations of present and future law or custom
in regard to delegation of powers by trustees generally, the Trustees may, at
any time and from time to time and without limiting the generality of their
powers and authority otherwise set forth herein, enter into one or more
contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other types of organizations, or
individuals ("Contracting Party"), to provide for the performance and
assumption of some or all of the following services, duties and
responsibilities to, for or on behalf of the Trust and/or any Sub-Trust,
and/Or the Trustees, and to provide for the performance and assumption of such
other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees and in
conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Sub-Trust of the
Trust (as that phrase is defined in subsection (a) of Section 4.2), to manage
suCh investments and assets, make investment decisions with respect thereto,
and to place purchase and sale orders for portfolio transactions relating to
such investments and assets;
(b) Administration. Subject to the general supervision of the Trustees and
in conformity with any policies of the Trustees with respect to the operations
of the Trust and each Sub-Trust (including each class thereof), to supervise
all or any part of the operations of the Trust and each Sub-Trust, and to
provide all or any part of the administrative and clerical personnel, office
space and office equipment and services appropriate for the efficient
administration and operations of the Trust and each Sub-Trust;
(c) Distribution To distribute the Shares of the Trust and each Sub-Trust
(including any classes thereof), to be principal underwriter of such Shares,
and/or to act as agent of the Trust and each Sub-Trust in the sale of Shares
and the acceptance or rejection of orders for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to maintain
custody of the property of the Trust and each Sub-Trust and accounting records
in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of the
ownership of outstanding Shares, the issuance and redemption and the transfer
thereof, and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) Shareholder Servicing. To provide service with respect to the
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) Accounting. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or
in addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from
entering into sub-contractual arrangements relative to any of the matters
referred to in Sections 3.3(a) through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager, adviser,
principal underwriter or distributor or agent of or for any Contracting Party,
or of or for any parent or affiliate of any Contracting Party or that the
Contracting Party or any parent or affiliate thereof is a Shareholder or has
an interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the rendering of
any similar services to one or more other corporations, trusts, associations,
partnerships, limited partnerships or other organizations, or have other
business or interests, shall not affect the validity of any contract for the
performance and assumption of services, duties and responsibilities to, for or
of the Trust or any Sub-Trust and/or the Trustees or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or Create any liability or accountability to the Trust, any Sub-Trust or
its Shareholders, provided that in the case of any relationship or interest
referred to in the preceding clause (i) on the part of any Trustee or officer
of the Trust either (x) the material facts as to such relationship or interest
have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
by a majority of such Trustees not having any such relationship or interest
(even though such unrelated or disinterested Trustees are less than a quorum
of all of the Trustees), (y) the material facts as to such relationship or
interest and as to the contract have been disclosed to or are known by the
Shareholders entitled to vote thereon and the contract involved is
specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is
authorized, approved or ratified by the Trustees or by the Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly
out of income, and to charge or allocate the same to, between or among such
one or more of the Sub-Trusts and/or one or more classes of Shares thereof
that may be established and designated pursuant to Article IV, as the Trustees
deem fair, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the Trust, any Sub-Trust and/or any class of Shares
thereof, or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser,
administrator, distributor, principal underwriter, auditor, counsel,
depository, custodian, transfer agent, dividend disbursing agent, accounting
agent, Shareholder servicing agent, and such other agents, consultants, and
independent contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur. Without limiting the generality of any
other provision hereof, the Trustee shall be entitled to reasonable
compensation from the Trust for their services as Trustees and may fix the
amount of such compensation.
Section 3.5 Ownership of Assets of the Trust. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
Section 4.1 Description of Shares. The beneficial interest in the Trust shall
be divided into Shares, all with $.001 par value, but the Trustees shall have
the authority from time to time to issue Shares in one or more Series (each of
which Series of Shares shall represent the beneficial interest in a separate
and distinct Sub-Trust of the Trust, including without limitation each Sub-
Trust specifically established and designated in Section 4.2), as they deem
necessary or desirable. For all purposes under this Declaration of Trust or
otherwise, including, without implied limitation, (i) with respect to the
rights of creditors and (ii) for purposes of interpreting the relevant rights
of each Sub-Trust and the Shareholders of each Sub-Trust, each Sub-Trust
established hereunder shall be deemed to be a separate trust. The Trustees
shall have exclusive power without the requirement of Shareholder approval to
establish and designate such separate and distinct Sub-Trusts, and to fix and
determine the relative rights and preferences as between the shares of the
separate Sub-Trusts as to right of redemption and the price, terms and manner
of redemption, special and relative rights as to dividends and other
distributions and on Iiquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the several Sub-Trusts shall
have separate voting rights or no voting rights.
In addition, the Trustees shall have exclusive power, without the requirement
of Shareholder approval, to issue classes of Shares of any Sub-Trust or divide
the Shares of any Sub-Trust into classes, each class having such different
dividend, liquidation, voting and other rights as the Trustees may determine,
and may establish and designate the specific classes of Shares of each Sub-
Trust The fact that a Sub-Trust shall have initially been established and
designated without any specific establishment or designation of classes (i.e.,
that all Shares of such Sub-Trust are initially of a single class), or that a
Sub-Trust shall have more than one established and designated class, shall not
limit the authority of the Trustees to establish and designate separate
classes, or one or more further classes, of said Sub-Trust without approval of
the holders of the initial class thereof, or previously established and
designated class or classes thereof, provided that the establishment and
designation of such further separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes (within the meaning of section 77 of the Massachusetts
General Laws Chapter 156B).
The number of authorized Shares and the number of Shares of each Sub-Trust or
class thereof that may be issued is unlimited, and the Trustees may issue
Shares of any Sub-Trust or class thereof for such consideration and on such
terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders.
All Shares when so issued on the terms determined by the Trustees shall be
fully paid and non-assessable (but may be subject to mandatory contribution
back to the Trust as provided in subsection (h) of Section 4.2). The Trustees
may classify or reclassify any unissued Shares or any Shares previously issued
and reacquired of any Sub-Trust or class thereof into one or more Sub-Trusts
or Classes thereof that may be established and designated from time to time.
The Trustees may hold as treasury Shares, reissue for such consideration and
on such terms as they may determine, or cancel, at their discretion from time
to time, any Shares of any Sub-Trust or class thereof reacquired by the Trust
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to in
Section 5.3
The establishment and designation of any Sub-Trust or of any class of Shares
of any Sub-Trust in addition to those established and designated in Section
4.2 shall be effective (i) upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation of
the relative rights and preferences of the Shares of such Sub-Trust or class,
(ii) upon the execution of an instrument in writing by an officer of the Trust
pursuant to the vote of a majority of the Trustees, or (iii) as otherwise
provided in either such instrument. At any time that there are no Shares
outstanding of any particular Sub-Trust or class previously established and
designated, the Trustees may by an instrument executed by a majority of their
number (or by an instrument executed by an officer of the Trust pursuant to
the vote of a majority of the Trustees) abolish that Sub-Trust or class and
the establishment and designation thereof. Each instrument establishing and
designating any Sub-Trust shall have the status of an amendment to this
Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of
Shares of any Sub-Trust (including any classes thereof) of the Trust to the
same extent as if such person were not a Trustee, officer or other agent of
the Trust; and the Trust may issue and sell or cause to be issued and sold and
may purchase Shares of any Sub-Trust (including any classes thereof) from any
such person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares
of such Sub-Trust (including any classes thereof) generally.
Section 4.2 Establishment and Designation of Sub-Trusts. Without limiting the
authority of the Trustees set forth in Section 4.1 to establish and designate
any further Sub-Trusts and classes, the Trustees hereby establish and
designate the following Sub-Trusts and classes thereof: "Shearson Lehman
Brothers Worldwide Prime Assets Fund" each of which shall consist of a Class
A, B, C, and D. The Shares of such Sub-Trusts and classes thereof and any
Shares of any further Sub-Trusts or classes that may from time to time be
established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Sub-Trust or class at the
time of establishing and designating the same) have the following relative
rights and preferences:
(a) Assets Belonging to Sub-Trusts. All consideration received by the Trust
for the issue or sale of Shares of a particular Sub-Trust or any classes
thereof, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Sub-Trust or class thereof and shall
irrevocably belong to that Sub-Trust (and be allocable to any classes thereof)
for all purposes, and shall be so recorded upon the books of account of the
Trust. Such consideration, assets, income, earnings, profits, anal proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of
such proceeds, in whatever form the same may be, together with any General
Ite::s allocated to that Sub-Trust as provided in the following sentence, are
herein referred to as "assets belonging to" that Sub-Trust (and allocable to
any classes thereof). In the event that there are any assets, income,
earnings, profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Sub-Trust (collectively
"General Items"), the Trustees shall allocate such General Items to and among
any one or more of the Sub-Trusts established and designated from time to time
in such manner and on such basis as they, in their sole discretion, deem fair
and equitable; and any General Items so allocated to a particular Sub-Trust
shall belong to that Sub-Trust (and be allocable to any classes thereof).
Each such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Sub-Trusts (including any classes thereof) for all
purposes.
(b) Liabilities Belonging to Sub-Trusts. The assets belonging to each
particular Sub-Trust shall be charged with the liabilities in respect of that
Sub-Trust and all expenses, costs, charges and reserves attributable to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging to any particular
Sub-Trust shall be allocated and charged by the Trustees to and among any one
or more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair
and equitable. In addition, the liabilities in respect of a particular class
of Shares of a particular Sub-Trust and all expenses, costs, charges and
reserves belonging to that class of Shares, and any general liabilities,
expenses, costs, charges or reserves of that particular Sub-Trust which are
not readily identifiable as belonging to any particular class of Shares of
that Sub-Trust shall be allocated and charged by the Trustees to and among any
one or more of the classes of Shares of that Sub-Trust established and
designated from time to time in such manner and on such basis as the Trustees
in their sole discretion deem fair and equitable. The liabilities, expenses,
costs, charges and reserves allocated and so charged to a Sub-Trust or class
thereof are herein referred to as "liabilities belonging to" that Sub-Trust or
class thereof. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders, creditors and any other persons dealing with the Trust or any
Sub-Trust (including any classes thereof) for all purposes. Any creditor of
any Sub-Trust may look only to the assets of that Sub-Trust to satisfy such
creditor's debt.
The Trustees shall have full discretion, to the extent not inconsistent with
the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(c) Dividends. Dividends and distributions on Shares of a particular Sub-
Trust or any class thereof may be paid with such frequency as the Trustees may
determine, which may be daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Sub-Trust or class, from such of
the income and capital gains, accrued or realized, from the assets belonging
to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and
allocable to that class, as the Trustees may determine, after providing for
actual and accrued liabilities belonging to that Sub-Trust or class. All
dividends and distributions on Shares of a particular Sub-Trust or class
thereof shall be distributed pro rata to the holders of Shares of that Sub-
Trust or class in proportion to the number of Shares of that Sub-Trust or
class held by such holders at the date and time of record established for the
payment of such dividends or distributions, except that in connection with any
dividend or distribution program or procedure the Trustees may determine that
no dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Trustees under such program or procedure. Such
dividends and distributions may be made in cash or Shares of that Sub-Trust or
class or a combination thereof as determined by the Trustees or pursuant to
any program that the Trustees may have in effect at the time for the election
by each Shareholder of the mode of the making of such dividend or distribution
to that Shareholder. Any such dividend or distribution paid in Shares will be
paid at the net asset value thereof as determined in accordance with
subsection (h) of Section 4.2.
(d) Liquidation. In the event of the liquidation or dissolution of the Trust,
the Shareholders of each Sub-Trust or any class thereof that has been
established and designated shall be entitled to reCeive, when and as declared
by the Trustees, the excess of the assets belonging to that Sub-Trust, or in
the case of a class, belonging to that Sub-Trust and allocable to that class,
over the liabilities belonging to that Sub-Trust or class. The assets so
distributable to the Shareholders of any particular Sub-Trust or class thereof
shall be distributed among such Shareholders in proportion to the number of
Shares of that Sub-Trust or class thereof held by them and recorded on the
books of the Trust. The liquidation of any particular Sub-Trust or class
thereof may be authcrized by vote of a majority of the Trustees then in office
subject to the approval of a majority of the outstanding voting Shares of that
Sub-Trust, as defined in the l940 Act.
(e) Voting. On each matter submitted to a vote of the Shareholders, each
holder of a Share of each Sub-Trust or class thereof shall be entitled to one
vote for each whole Share and to a proportionate fractional vote for each
fractional Share standing in his name on the books of the Trust. The Trustees
shall cause each matter required or permitted to be voted upon at a meeting or
by written consent of Shareholders to be submitted to a vote of all Sub-Trusts
and classes thereof entitled to vote thereon (irrespective of class), unless
the 1940 Act or other applicable laws or regulations require that the actions
of the Shareholders be taken by a separate vote of one or more Sub-Trusts or
classes thereof, or the Trustees determine that any matter to be submitted to
a vote of Shareholders affects only the rights or interests of one or more
(but not all) Sub-Trusts or classes thereof, in which case only the
Shareholders of the Sub-Trust or Sub-Trusts or class or classes so affected
shall be entitled to vote thereon.
(f) Redemption by Shareholder. Each holder of Shares of a particular Sub-
Trust or any class thereof shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each week, to require
the Trust to redeem all or any part of his Shares of that Sub-Trust or class
thereof at a redemption price equal to the net asset value per Share of that
Sub-Trust or class thereof next determined in accordance with subsection (h)
of this Section 4.2 after the Shares are properly tendered for redemption.
Payment of the redemption price shall be in cash; provided, however, that if
the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in securities or other assets
belonging to the Sub-Trust of which the Shares being redeemed are part at the
value of such securities or assets used in such determination of net asset
value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Sub-Trust or class thereof to require the Trust to redeem Shares of that Sub-
Trust during any period or at any time when and to the extent permissible
under the 1940 Act.
(g) Redemption by Trust. Each Share of each Sub-Trust or class thereof that
has been established and designated is subject to redemption by the Trust at
the redemption price which would be applicable if such Share was then being
redeemed by the Shareholder pursuant to subsection (f) of this Section 4.2:
(a) at any time, if the Trustees determine in their sole discretion that
failure to so redeem may have materially adverse conseq dences to the holders
of the Shares of the Trust or any Sub-Trust thereof or class thereof, or (b)
upon such other conditions as may from time to time be determined by the
Trustees and set forth in the then current Prospectus of the Trust with
respect to maintenance of Shareholder accounts of a minimum a:nount. Upon
such redemption the holders of the Shares so redee:~ed shall have no further
right with respect thereto other than to receive payment of such redemption
price.
(h) Net Asset Value. The net asset value per Share of any Sub-Trust shall be
(i) in the case of a Sub-Trust whose Shares are not divided into classes, the
quotient obtained by dividing the value of the net assets of that Sub-Trust
(being the value of the assets belonging to that Sub-Trust less the
liabilities belonging to that Sub-Trust) by the total number of Shares of that
Sub-Trust outstanding, and (ii) in the case of a class of Shares of a Sub-
Trust whose Shares are divided into classes, the quotient obtained by dividing
the value of the net assets of that Sub-Trust allocable to such class (being
the value of the assets belonging to that Sub-Trust allocable to such class
less the liabilities belonging to such class) by the total number of Shares of
such class outstanding; all determined in accordance with the methods and
procedures, including without limitation those with respect to rounding,
established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount and in connection therewith
may adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Sub-Trust as dividends payable in
additional Shares of that Sub-Trust at the designated constant dollar amount
and for the handling of any losses attributable to that Sub-Trust. Such
procedures may provide that in the event of any loss each Shareholder shall be
deemed to have contributed to the capital of the Trust attributable to that
Sub-Trust his pro rata portion of the total number of Shares required to be
cancel led in order to permit the net asset value per Share of that Sub-Trust
to be maintained, after reflecting such loss, at the designated constant
dollar amount. Each Shareholder of the Trust shall be deemed to have agreed,
by his investment in any Sub-Trust with respect to which the Trustees shall
have adopted any such procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
(i) Transfer. All Shares of each particular Sub-Trust or class thereof shall
be transferable, but transfers of Shares of a particular Sub-Trust or class
thereof will be recorded on the Share transfer records of the Trust applicable
to that Sub-Trust or class only at such times as Shareholders shall have the
right to require the Trust to redeem Shares of that Sub-Trust or class and at
such other times as may be permitted by the Trustees.
(j) Equality. Except as provided herein or in the instrument designating and
establishing any class of Shares or any Sub-Trust, all Shares of each
particular Sub-Trust or class thereof shall represent an equal proportionate
interest in the assets belonging to that Sub-Trust, or in the case of a class,
belonging to that Sub-Trust and allocable to that class, subject to the
liabilities belonging to that Sub-Trust or class, and each Share of any
particular Sub-Trust or class shall be equal to each other Share of that Sub-
Trust or class; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section 4.2 that may
exist with respect to dividends and distributions on Shares of the same S ~b-
Trust or class. The Trustees may from time to time divide or combine the
Shares of any particular Sub-Trust or class into a greater or lesser number of
Shares of that Sub-Trust or class without thereby changing the proportionate
beneficial interest in the assets belonging to that Sub-Trust or class or in
any way affecting the rights of Shares of any other Sub-Trust or class.
(k) Fractions. Any fractional Share of any Sub-Trust or class, if any such
fractional Share is outstanding, shall carry proportionately all the rights
and obligations of a whole Share of that Sub-Trust Or class, including rights
and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(l) Conversion Rights. Subject to compliance with the requirements of the
1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Sub-Trust or class thereof shall have the right to convert said
Shares into Shares of one or more other Sub-Trust or class thereof in
accordance with such requirements and procedures as may be established by the
Trustees.
(m) Class Differences. The relative rights and preferences of the classes of
any Sub-Trust may differ in such other respeCts as the Trustees may determine
to be appropriate in their sole discretion, provided that such differences are
set forth in the instrument establishing and designating such classes and
executed by a majority of the Trustees (or by an instrument executed by an
officer of the Trust pursuant to a vote of a majority of the Trustees).
Section 4.3 Ownership of Shares. The ownership of Shares shall be recorded on
the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Sub-Trust and each
class thereof that has been established and designated. No certificates
certifying the ownership of Shares need be issued except as the Trustees may
otherwise determine from time to time. The Trustees may make such rules as
they consider appropriate for the issuance of Shares certificates, the use of
facsimile signatures, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any transfer or similar agent, as
the case may be, shall be conclusive as to who are the Shareholders and as to
the number of Shares of each Sub-Trust and class thereof held from time to
time by each such Shareholder.
Section 4 4 Investments in the Trust. The Trustees may accept investments in
the Trust and each Sub-Trust thereof from such persons and on such terms and
for such consideration, not inconsistent with the provisions of the 1940 Act,
as they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other person
to accept orders for the purchase of Shares that conform to such authorized
terms and to reject any purchase orders for Shares whether or not conforming
to such authorized terms.
Section 4.5 No Pre-emptive Rights. Shareholders shall have no pre-emptive or
other right to subscribe to any additional Shares or other securities issued
by the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in
this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the Trust or any Sub-Trust thereof
nor entitle the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the Trustees,
but only to the rights of said decedent under this Trust. Ownership of Shares
shall not entitle the Shareholder to any title in or to the whole or any part
of the Trust property or right to call for a partition or division of the same
or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholder, nor except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers. The Shareholders shall have power to vote only (i)
for the election or removal of Trustees as provided in Section 3.1, (ii) with
respect to any contract with a Contracting Party as provided in Section 3.3 as
to which Shareholder approval is required by the 1940 Act, (iii) with respect
to any termination or reorganization of the Trust or any Sub-Trust to the
extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in
Section 7.3, (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class
action on behalf of the Trust or any Sub-Trust thereof or the Shareholders
(provided, however, that a shareholder of a particular Sub-Trust shall not be
entitled to a derivative or class action on behalf of any other Sub-Trust (or
shareholder of any other Sub-Trust) of the Trust) and (vi) with respect to
such additional matters relating to the Trust as may be required by the 1940
Act, this Declaration of Trust, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any state, or as the Trustees
may consider necessary or desirable. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons shall be valid
if executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 Meetings. Meetings of Shareholders may be called by the Trustees
from time to time for the purpose of taking action upon any matter requiring
the vote or authority of the Shareholders as herein provided or upon any other
matter deemed by the Trustees to be necessary or desirable. Written notice of
any meeting of Shareholders shall be given or caused to be given by the
Trustees by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder at the Shareholder's address as it appears on the records of the
Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the
Trust when requested to do so in writing by Shareholders holding not less than
10% of the Shares then outstanding. If the Trustees fail to call or give
notice of any meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least l0% of the Shares then
outstanding requesting a meeting be called for any other purpose requiring
action by the Shareholders as provided herein or in the By-Laws, then
Shareholders holding at least 10% of the Shares then outstanding may call and
give notice of such meeting, and thereupon the meeting shall be held in the
manner provided for herein in case of call thereof by the Trustees
Section 5.3 Record Dates. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date and time not
more than 60 days prior to the date of any meeting of Shareholders or other
action as the date and time of record for the determination of Shareholders
entitled to vote at such meeting or any adjournment thereof or to be treated
as Shareholders of record for purposes of such other action, and any
shareholder who was a Shareholder at the date and time so fixed shall be
entitled to vote at such meeting or any adjournment thereof or to be treated
as a Shareholder of record for purposes of such other action, even though he
has since that date and time disposed of his Shares, and no Shareholder
becoming such after that date and time shall be so entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action.
Section 5.4 Quorum and Rehired Vote. A majority of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
majority df the Shares voted, at a meeting of which a quorum is present shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is required or permitted by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or the By-Laws.
Section 5.5 Action by Written Consent. Subject to the provisions of the 1940
Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes
as a vote taken at a meeting o- Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be open to
inspection by Shareholders to the same extent as is permitted stockholders of
a Massachusetts business corporation under the Massachusetts Business
Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further provisions
for Shareholders' votes and meeting and related matters not inconsistent with
the provisions hereof.
Section 5.8 Shareholder Communications. Whenever ten or more Shareholders of
record who have been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or least 1% of the outstanding Shares, whichever is
less, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a Shareholder meeting and accompanied by a form of communication
and request which they wish to transmit, the Trustees shall within five
business days after receipt of such application either (i) afford to such
applicants access to a list of the names and addresses of all Shareholders as
recorded on the books of the Trust or
(ii) inform such applicants as to the approximate number of Shareholders of
record, and the approximate cost of mailing to them the proposed communication
and form of request.
If the Trustees elect to follow the course specified in item (ii) above, the
Trustees, upon the written request of such applications, accompanied by a
tender of the material to be mailed and of the reasonable expense of mailing,
shall, with reasonable promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books unless within five business
days after such tender the Trustees shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact
or omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the
basis of such opinion. The Trustees shall thereafter comply with the
requirements of the 1940 Act.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice. All
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees nor any of the Trust's
officers, employees or agents, whether past, present or future, nor any other
Sub-Trust shall be personally liable therefor. Every note, bond, contract,
instrument, certificate or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust, any Sub-Trust or the Trustees
or any of them in connection with the Trust shall be conclusively deemed to
have been executed or done only by or for the Trust (or the Sub-Trust) or the
Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee or of
such officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or
made by or on behalf of the Trust or by them as Trustees or Trustee or as
officers or officer and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust, or the
particular Sub-Trust in question, as the case may be, but the omission thereof
shall not operate to bind any Trustees or Trustee or officers or officer or
Shareholders or Shareholder individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder shall
be binding upon everyone interested. A Trustee shall be liable for his own
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or
accounting agent of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee; (b) the Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for
failing to follow such advice; and (c) in discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the books
of account of the Trust and upon written reports made to the Trustees by any
officer appointed by them, any independent public accountant, and (with
respect to the subject matter of the contract involved) any officer, partner
or responsible employee of a Contracting Party appointed by the Trustees
pursuant to Section 3.3. The Trustees as such shall not be required to give
any bond or surety or any other security for the performance of their duties.
Section 6.3 Indemnification of Shareholders. In case any Shareholder (or
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to
be personally liable for any obligation or liability of the Trust solely by
reason of being or having been a Shareholder and not because of such
Shareholder's acts or omissions or for some other reason, said Sub-Trust (upon
proper and timely request by the Shareholder) shall assume the defense against
such charge and satisfy any judgment thereon, and the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets of said Sub-
Trust estate to be held harmless from and indemnified against all loss and
expense arising from such liability.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in which the Trust
has any interest as a shareholder, creditor or otherwise [hereinafter referred
to as a "Covered Person"]) against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition
o- any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may
be or may have been involved as a party or otherwise or with which such person
may be or may have been threatened, while in office or thereafter, by reason
of being or having been such a Trustee or officer, director or trustee, except
with respect to any matter as to which it has been determined that such
Covered Person (i) did not act in good faith in the reasonable belief that
such Covered Person's action was in or not opposed to the best interests of
the Trust or (ii) had acted with wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office (either and both of the conduct described in (i) and
(ii) being referred to hereafter as "Disabling Conduct"). A determination
that the Covered Person is entitled to indemnification may be made by (i) a
final decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based upon
a review of the facts, that the indemnitee was not liable by reason of
Disabling Conduct by (a) a vote of a majority of a quorum of Trustees who are
neither "interested persons" of the Trust as defined in section 2(a)(19) of
the 1940 Act nor parties to the proceeding, or (b) an independent legal
counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be
said from time to time by the Sub-Trust in question in advance or the final
disposition of any such action, suit or proceeding, provided that the Covered
Person shall have undertaken to repay the amounts so paid to the Sub-Trust in
question if it is ultimately determined that indemnification of such expenses
is not authorized under this Article VI and (i) the Covered Person shall have
provided security for such undertaking, (ii) the Trust shall be insured
against losses arising by reason of any lawful advances, or (iii) a majority
of a quorum of the disinterested Trustees who are not a party to the
proceeding, or an independent legal counsel in a written opinion, shall have
determined, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Covered Person
ultimately will be found entitled to indemnification.
Section 6.5 Compromise Payment. As to any matter disposed of by a compromise
payment by any such Covered Person referred to in Section 6.4, pursuant to a
consent decree or otherwise, no such indemnif ication either for said payment
or for any other expenses shall be provided unless such indemnification shall
be approved (a) by a majority of the disinterested Trustees who are not a
party to the proceeding or (b) by an independent legal counsel in a written
opinion. Approval by the Trustees pursuant to clause (a) or by independent
legal counsel pursuant to clause (b) shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with
any of such clauses as indemnif ication if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good
faith in the reasonable belief that such Covered Person's action was in or not
opposed to the best interests of the Trust or to have been liable to the Trust
or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
Section 6.6 Indemnification Not Exclusive, etc. The right of indemnification
provided by this Article VI shall not be exclusive of or affect any other
rights to which any such Covered Person may be entitled. As used in this
Article VI, "Covered Person" shall include such person's heirs, executors and
administrators, an "interested Covered Person" is one against whom the action,
suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened. Nothing contained in this article shall affect any rights to
indemnif ication to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance
on behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. Unless terminated as provided
herein, the Trust shall continue without limitation of time and, without
limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust or class thereof shall operate to
terminate the Trust. The Trust may be terminated at any time by a majority of
the Trustees then in office subject to a favorable vote of a majority of the
outstanding voting securities, as defined in the 1940 Act, Shares of each Sub-
Trust voting separately by Sub-Trust.
Upon termination, after paying or otherwise providing for all charges, taxes,
expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with
the provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey, merge and transfer
the assets of the Trust, or the assets belonging to any one or more Sub-
Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held
as assets belonging to another Sub-Trust, in exchange for cash, shares or
other securities (including, in the case of a transfer to another Sub-Trust of
the Trust, Shares of such other Sub-Trust or any class thereof) with such
transfer being made subject to, or with the assumption by the transferee of,
the liabilities belonging to each Sub-Trust the assets of which are so
transferred; provided, however, that no assets belonging to any particular
Sub-Trust shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of that Sub-Trust. Following such transfer, the Trustees
shall distribute such cash, shares or other securities (taking into account
the differences among the classes of Shares thereof, if any, and giving due
effect to the assets and liabilities belonging to and any other differences
among the various Sub-Trusts the assets belonging to which have so been
transferred) among the Shareholders of the Sub-Trust the assets belonging to
which have been so transferred; and if all of the assets or the Trust have
been so transferred, the Trust shall be terminated.
Section 7.3 Amendments. All rights granted to the Shar eholders under this
Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or
Trustee or repeal the prohibition of assessment upon the Shareholders without
the express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act,
by an instrument in writing signed by a majority of the then Trustees (or by
an officer of the Trust pursuant to the vote of a majority of such Trustees).
Any amendment to this Declaration of Trust that adversely affects the rights
of Shareholders may be adopted at any time by an instrument in writing signed
by a majority of the then Trustees (or by an officer of the Trust pursuant to
the vote of a majority of such Trustees) when authorized to do so by the vote
in accordance with subsection (e) of Section 4.2 of Shareholders holding a
majority of the Shares entitled to vote. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument containing the
terms of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate
(which may be a part of such instrument) executed by a Trustee or officer of
the Trust to the effect that such amendment has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. The original or a copy of
this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to
time be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether
or not any such amendments have been made, as to the identities of the
Trustees and officers, and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or
of any such amendments. In this instrument and in any such amendment,
references to this instrument, and all expressions like "herein", "hereof" and
"hereunder" shall be deemed to refer to this instrument as a whole as the same
may be amended or affected by any such amendments. The masculine gender shall
include the feminine and neuter genders. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Section 7.5 Applicable Law. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to be governed
by and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be
amended from time to time, to which reference is made with the intention that
matters not specifically covered herein or as to which an ambiguity may exist
shall be resolved as if the Trust were a business corporation organized in
Massachusetts, but the reference to said Business Corporation Law is not
intended to give the Trust, the Trustees, the Shareholders or any other person
any right, power, authority or responsibility available only to or in
connection with an entity organized in corporate form. The Trust shall be of
the type referred to in Section 1 of Chapter l82 of the Massachusetts General
Laws and of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust. IN WITNESS WHEREOF, the
undersigned have hereunto set their hands and seals in the City of New York,
New York for themselves and their assigns, as of the day and year first above
written.
/s/ Paul R. Ades
Paul R. Ades
/s/ Herbert Barg
Herbert Barg
/s/ Allan Johnson
Allan Johnson
/s/ Ken Miller
Ken Miller
/s/ John F. White
John F. White
/s/ Thomas A. Belshe
Thomas A. Belshe
/s/ Heath B. McLendon
Heath B. McLendon
/s/ William J. Nutt
William J. Nutt
July 30, 1993
Office of the Secretary of the Commonwealth
Corporate Division
John W. McCormack Building
Room 1711
One Ashburton Place
Boston, Massachusetts 02108
RE: Shearson Lehman Brothers Worldwide Prime Assets Fund
Dear Sir/Madam:
Please find enclosed:
(1) Amendment No. 1 to the First Amended and Restated Master Trust Agreement
of Shearson Lehman Brothers Worldwide Prime Assets Fund which changes the name
of the Trust from its current name to "Smith Barney Shearson Worldwide Prime
Assets Fund;" and
(2) The filing fee of $100.00 made payable to the Commonwealth of
Massachusetts.
Kindly show receipt of the foregoing by stamping the enclosed copies to this
letter and the Amendment and returning one copy of each to the messenger.
Thank you for your assistance in this matter.
Sincerely,
Paula J. Gilligan
Senior Legal Product Manager
July 30, 1993
Office of City Clerk
City of Boston
Boston, Massachusetts 02201
RE: Shearson Lehman Brothers Worldwide Prime Assets Fund
Dear Sir/Madam:
Please find enclosed for filing a copy of Amendment No. 1 to the First Amended
and Restated Master Trust Agreement of Shearson Lehman Brothers Worldwide
Prime Assets Fund which changes the name of the Trust from its current name to
"Smith Barney Shearson Worldwide Prime Assets Fund" and the fiing fee of
$30.00 payable to the City of Boston.
Kindly show receipt of the foregoing by stamping the enclosed copies to this
letter and the Amendment and returning one copy of each to the messenger.
Sincerely,
Paula J. Gilligan
Senior Legal Product Manager
SHEARSON LEHMAN BROTHERS WORLDWIDE PRIME ASSETS FUND
AMENDMENT NO. 1 TO THE FIRST AMENDED AND RESTATED MASTER TRUST AGREEMENT
(Change of Name of the Fund )
The undersigned, Assistant Secretary of Shearson Lehman Brothers Worldwide
Prime Assets Fund (the "Fund"), does hereby certify that pursuant to Article
I, Section 1.1 and Article VII, Section 7.3 of the First Amended and Restated
Master Trust Agreement dated November 5, 1992 ("Master Trust Agreement"),
which amended and restated the Master Trust Agreement of the Fund dated
November 15, 1990, the following votes were duly adopted by the Board of
Trustees at a Special Meeting of the Board held on April 7, 1993:
VOTED: That the name of the Fund previously established and
designated pursuant to the Fund's Master Trust Agreement be
modified and amended as set forth below:
Current Name: Name as Amended:
Shearson Lehman Brothers Smith Barney Shearson
Worldwide Prime Assets Fund Worldwide Prime Assets Fund
; and further
VOTED: That the appropriate officers of the Fund be, and each hereby is,
authorized to execute and file any notices required to be filed reflecting the
foregoing changes; to execute amendments to the Fund's Master Trust Agreement
and By-Laws reflecting the foregoing change; and to execute and file all
requisite certificates, documents and instruments and to take such other
actions required to cause said amendment to become effective and to pay all
requisite fees and expenses incident thereto.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 30th day of
July, 1993.
/s/ Lee D. Augsburger
Lee D. Augsburger
Assistant Secretary
EXHIBIT 6
DISTRIBUTION AGREEMENT
SMITH BARNEY SHEARSON WORLDWIDE PRIME ASSETS
FUND
July 30, 1993
Smith Barney Shearson Inc.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Smith Barney Shearson Worldwide Prime Assets Fund
a business trust, organized under the laws of the Commonwealth of
Massachusetts has agreed that Smith Barney Shearson Inc.("SBS") shall be, for
the period of this Agreement, the distributor of shares (the "Shares") of the
Fund.
1. Services as Distributor
1.1 SBS will act as agent for the distribution of Shares covered
by the registration statement, prospectus and statement of additional
information then in effect under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act").
1.2 SBS agrees to use its best efforts to solicit orders for the
sale of Shares and will undertake such advertising and promotion as it
believes is reasonable in connection with such solicitation.
1.3 All activities by SBS as distributor of the Shares shall
comply with all applicable laws, rules, and regulations, including, without
limitation, all rules and regulations made or adopted by the Securities and
Exchange Commission (the "SEC") or by any securities association registered
under the Securities Exchange Act of 1934.
1.4 SBS will provide one or more persons during normal business
hours to respond to telephone questions concerning the Fund.
1.5 SBS will transmit any orders received by it for purchase or
redemption of Shares to The Shareholder Services Group, Inc. ("TSSG"), the
Fund's transfer and dividend agent, or any successor to TSSG of which the Fund
has notified SBS in writing.
1.6 Whenever in their judgment such action is warranted for any
reason, including, without limitation, market, economic or political
conditions, the Fund's officers may decline to accept any orders for, or make
any sales of, the Shares until such time as those officers deem it advisable
to accept such orders and to make such sales.
1.7 SBS will act only on its own behalf as principal should it
choose to enter into selling agreements with selected dealers or others.
1.8 The Fund will pay to SBS an annual fee in connection with the
offering and sale of the Shares under this Agreement. The annual fee paid to
SBS, will be calculated daily and paid monthly by the Fund at an annual rate
set forth in the Services and Distribution Plan (the "Plan") based on the
average daily net assets of the Fund ; provided that payment shall be made in
any month only to the extent that such payment shall not exceed the sales
charge limitations established by the National Association of Securities
Dealers, Inc.
The annual fee paid to SBS under this Section 1.8 maybe used by SBS to
cover any expenses primarily intended to result in the sale of Shares,
including, but not limited to, the following:
(a) cost of payments made to SBS Financial Consultants and other
employees of SBS or other broker-dealers that engage in the distribution of
the Fund's Shares;
(b) payments made to, and expenses of, persons who provide
support services in connection with the distribution of the Fund's Shares,
including, but not limited to, office space and equipment, telephone
facilities, answering routine inquiries regarding the Fund, processing
shareholder transactions and providing any other shareholder services;
(c) costs relating to the formulation and implementation of
marketing and promotional activities, including, but not limited to, direct
mail promotions and television, radio, newspaper, magazine and other mass
media advertising;
(d) costs of printing and distributing prospectuses and reports
of the Fund to prospective shareholders of the Fund;
(e) costs involved in preparing, printing and distributing sales
literature pertaining to the Fund; and
(f) costs involved in obtaining whatever information, analyses
and reports with respect to marketing and promotional activities that the Fund
may, from time to time, deem advisable;
except that distribution expenses shall not include any expenditures in
connection with services which SBS, any of its affiliates, or any other person
have agreed to bear without reimbursement.
1.9 SBS shall prepare and deliver reports to the Treasurer of the Fund
and to the sub-investment advisor and/or administrator of the Fund on a
regular, at least quarterly, basis, showing the distribution expenses incurred
pursuant to this Agreement and the Plan and the purposes therefor, as well as
any supplemental reports as the Trustees, from time to time, may reasonably
request.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions
that may be reasonably necessary in connection with the qualification of the
Shares for sale in those states that SBS may designate.
2.2 The Fund shall furnish from time to time for use in
connection with the sale of the Shares, such information reports with respect
to the Fund and its Shares as SBS may reasonably request, all of which shall
be signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such reports, when so signed by
the Fund's officers, shall be true and correct. The Fund shall also furnish
SBS upon request with (a) annual audits of the Fund's books and accounts made
by independent certified public accountants regularly retained by the Fund;
(b) semi-annual unaudited financial statements pertaining to the Fund; (c)
quarterly earnings statements prepared by the Fund; (d) a monthly itemized
list of the securities in the Fund's portfolio; (e) monthly balance sheets as
soon as practicable after the end of each month; and (f) from time to time
such additional information regarding the Fund's financial condition as SBS
may reasonably request.
3. Representations and Warranties
The Fund represents to SBS that all registration statements,
prospectuses and statements of additional information filed by the Fund with
the SEC under the 1933 Act and the 1940 Act with respect to the Shares have
been carefully prepared in conformity with the requirements of the 1933 Act,
the 1940 Act and the rules and regulations of the SEC thereunder. As used in
this Agreement, the terms "registration statement", "prospectus" and
"statement of additional information" shall mean any registration statement,
prospectus and statement of additional information filed by the Fund with the
SEC and any amendments and supplements thereto which at any time shall have
been field with the SEC. The Fund represents and warrants to SBS that any
registration statement, prospectus and statement of additional information,
when such registration statement becomes effective, will include all
statements required to be contained therein in conformance with the 1933 Act,
the 1940 Act and the rules and regulations of the SEC; that all statements of
fact contained in any registration statement, prospectus or statement of
additional information will be true and correct when such registration
statement becomes effective; and that neither any registration statement nor
any prospectus or statement of additional information when such registration
statement becomes effective will include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Fund's Shares. The Fund may, but shall not be obligated to, propose from time
to time such amendment or amendments to any registration statement and such
supplement or supplements to any prospectus or statement of additional
information as, in the light of future developments, may, in the opinion of
the Fund's counsel, be necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from SBS to do so, SBS
may, at its option, terminate this Agreement. The Fund shall not file any
amendment to any registration statement or supplement to any prospectus or
statement of additional information without giving SBS reasonable notice
thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to any prospectus
or statement of additional information, of whatever character, as the Fund may
deem advisable, such right being in all respects absolute and unconditional.
4. Indemnification
4.1 The Fund authorizes SBS and dealers to use any prospectus or
statement of additional information furnished by the Fund from time to time,
in connection with the sale of the Shares. The Fund agrees to indemnify,
defend and hold SBS, its several officers and directors, and any person who
controls SBS within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
demands or liabilities and any such counsel fees incurred in connection
therewith) which SBS, its officers and directors, or any such controlling
person, may incur under the 1933 Act or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement, any prospectus or any
statement of additional information or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated
in any registration statement, any prospectus or any statement of additional
information or necessary to make the statements in any thereof not misleading;
provided, however, that the Fund's agreement to indemnify SBS, its officers or
directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any statements or
representations made by SBS or its representatives or agents other than such
statements and representations as are contained in any prospectus or statement
of additional information and in such financial and other statements as are
furnished to SBS pursuant to paragraph 2.2 of this Agreement; and further
provided that the Fund's agreement to indemnify SBS and the Fund's
representations and warranties herein before set forth in paragraph 3 of this
Agreement shall not be deemed to cover any liability to the Fund or its
shareholders to which SBS would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or by reason of SBS's reckless disregard of its obligations and duties under
this Agreement. The Fund's agreement to indemnify SBS, its officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon the Fund's being notified of any action brought against SBS,
its officers or directors, or any such controlling person, such notification
to be given by letter or by telegram addressed to the Fund at its principal
office in New York, New York and sent to the Fund by the person against whom
such action is brought, within ten days after the summons or other first legal
process shall have been served. The failure so to notify the Fund of any such
action shall not relieve the Fund from any liability that the Fund may have to
the person against whom such action is brought by reason of any such untrue,
or alleged untrue, statement or omission, or alleged omission, otherwise than
on account of the Fund's indemnity agreement contained in this paragraph 4.1.
The Fund will be entitled to assume the defense of any suit brought to enforce
any such claim, demand or liability, but, in such case, such defense shall be
conducted by counsel of good standing chosen by the Fund and approved by SBS.
In the event the Fund elects to assume the defense of any such suit and
retains counsel of good standing approved by SBS, the defendant or defendants
in such suit shall bear the fees and expenses of any additional counsel
retained by any of them; but if the Fund does not elect to assume the defense
of any such suit, or if SBS does not approve of counsel chosen by the Fund,
the Fund will reimburse SBS, its officers and directors, or the controlling
person or persons named as defendant or defendants in such suit, for the fees
and expenses of any counsel retained by SBS or them. The Fund's
indemnification agreement contained in this paragraph 4.1 and the Fund's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
SBS, its officers and directors, or any controlling person, and shall survive
the delivery of any of the Fund's Shares. This agreement of indemnity will
inure exclusively to SBS's benefit, to the benefit of its several officers and
directors, and their respective estates, and to the benefit of the controlling
persons and their successors. The Fund agrees to notify SBS promptly of the
commencement of any litigation or proceedings against the Fund or any of its
officers or trustees in connection with the issuance and sale of any of the
Fund's Shares.
4.2 SBS agrees to indemnify, defend and hold the Fund, its
several officers and Trustees, and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) that the Fund, its officers or Trustees
or any such controlling person may incur under the 1933 Act, or under common
law or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its officers or Trustees, or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in
information furnished in writing by SBS to the Fund and used in the answers to
any of the items of the registration statement or in the corresponding
statements made in the prospectus or statement of additional information, or
shall arise out of or be based upon any omission, or alleged omission, to
state a material fact in connection with such information furnished in writing
by SBS to the Fund and required to be stated in such answers or necessary to
make such information not misleading. SBS's agreement to indemnify the Fund,
its officers or Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon SBS being notified of any action brought against
the Fund, its officers or Trustees, or any such controlling person, such
notification to be given by letter or telegram addressed to SBS at its
principal office in New York, New York and sent to SBS by the person against
whom such action is brought, within ten days after the summons or other first
legal process shall have been served. SBS shall have the right to control the
defense of such action, with counsel of its own choosing, satisfactory to the
Fund, if such action is based solely upon such alleged misstatement or
omission on SBS's part, and in any other event the Fund, its officers or
Trustees or such controlling person shall each have the right to participate
in the defense or preparation of the defense of any such action. The failure
to so notify SBS of any such action shall not relieve SBS from any liability
that SBS may have to the Fund, its officers or Trustees, or to such
controlling person by reason of any such untrue, or alleged untrue, statement
or omission, or alleged omission, otherwise than on account of SBS's indemnity
agreement contained in this paragraph 4.2. SBS agrees to notify the Fund
promptly of the commencement of any litigation or proceedings against SBS or
any of its officers or directors in connection with the issuance and sale of
any of the Fund's Shares.
4.3 In case any action shall be brought against any indemnified
party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish to do so, to assume the
defense thereof with counsel satisfactory to such indemnified party. If the
indemnifying party opts to assume the defense of such action, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and expenses
of separate counsel to such indemnified party if (i) the indemnifying party
and the indemnified party shall have agreed to the retention of such counsel
or (ii) the indemnified party shall have concluded reasonably that
representation of the indemnifying party and the indemnified party by the same
counsel would be inappropriate due to actual or potential differing interests
between them in the conduct of the defense of such action.
5. Effectiveness of Registration
None of the Fund's Shares shall be offered by either SBS or the Fund
under any of the provisions of this Agreement and no orders for the purchase
or sale of the Shares under this Agreement shall be accepted by the Fund if
and so long as the effectiveness of the registration statement then in effect
or any necessary amendments thereto shall be suspended under any of the
provision of the 1933 Act or if and so long as a current prospectus as
required by Section 5(b) (2) of the 1933 Act is not on file with the SEC;
provided, that nothing contained in this paragraph 5 shall in any way restrict
or have an application to or bearing upon the Fund's obligation to repurchase
its Shares from any shareholder in accordance with the provisions of the
Fund's prospectus, statement of additional information or the Amended and
Restated Master Trust Agreement dated November 5, 1992, as amended from time
to time.
6. Notice to SBS
The Fund agrees to advise SBS immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect or
for additional information;
(b) In the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement, prospectus or
statement of additional information then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
or a material fact made in the registration statement, prospectus or statement
of additional information then in effect or that requires the making of a
change in such registration statement, prospectus or statement of additional
information in order to make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to
any registration statement, prospectus or statement of additional information
which may from time to time be filed with the SEC.
7. Term of the Agreement
This Agreement shall become effective as of the "Closing Date" as that
term is defined in that certain Asset Purchase Agreement executed among SBS,
Primerica Corporation and Shearson Lehman Brothers Inc., dated March 12, 1993
and continues for successive annual periods thereafter so long as such
continuance is specifically approved at least annually by (a) the Fund's Board
of Trustees or (b) by a vote of a majority (as defined in the 1940 Act) of the
Fund's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Trustees of the Fund who are
not interested persons (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable, without penalty, on 60
days' notice by the Fund's Board of Trustees, by vote of the holders of a
majority of the Fund's Shares, or on 90 days' notice by SBS. This Agreement
will also terminate automatically in the event of its assignment (as defined
in the 1940 Act).
8. Miscellaneous
The Fund recognizes that directors, officers and employees of SBS may
from time to time serve as directors, trustees, officers and employees of
corporations and business trusts (including other investment companies) and
that such other corporations and trusts may include the name "Smith Barney
Shearson" as part of their name, and that SBS or its affiliates may enter into
distribution or other agreements with such other corporations and trusts. If
SBS ceases to act as the distributor of the Shares, the Fund agrees that, at
SBS's request, the Fund's license to use the word ""Smith Barney Shearson""
will terminate and that the Fund will take all necessary action to change the
name of the Fund to a name not including the words "Smith Barney Shearson."
9. Limitation of Liability
The Fund and SBS agree that the obligations of the Fund under this
Agreement shall not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of
the Fund, individually, but are binding only upon the assets and property of
the Fund, as provided in the Master Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees and signed by
an authorized officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Fund as provided in its Master Trust Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance
of this Agreement by signing and returning to us the enclosed copy of this
Agreement.
Very truly yours,
SMITH BARNEY SHEARSON WORLDWIDE
PRIME ASSETS FUND
By: /s/ Heath B. McLendon
Title: Chairman of the Board
Accepted:
SMITH BARNEY SHEARSON INC.
By: /s/ Christine T. Sydor
Authorized Officer
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8
EXHIBIT 9(A)
Shearson Lehman Brothers Worldwide Prime Assets Fund
ADMINISTRATION AGREEMENT
May 21, 1993
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
Dear Sirs:
Shearson Lehman Brothers Worldwide Prime Assets Fund, a business trust
organized under the laws of the Commonwealth of Massachusetts, confirms its
agreement with The Boston Company Advisors, Inc. ("Boston Advisors") as
follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in
its Amended and Restated Master Trust Agreement (the "Master Trust
Agreement"), as amended from time to time, in its Prospectus and Statement of
Additional Information as from time to time in effect, and in such manner and
to the extent as may from time to time be approved by the Board of Trustees of
the Fund. Copies of the Fund's Prospectus, Statement of Additional
Information and the Master Trust Agreement have been submitted to Boston
Advisors. The Fund employs PanAgora Asset Management Limited (the "Adviser")
as its investment adviser and desires to employ and hereby appoints Boston
Advisors as its administrator. Boston Advisors accepts this appointment and
agrees to furnish services for the compensation set forth below.
2. Services as Administrator
Subject to the supervision and direction of the Board of Trustees of the
Fund, Boston Advisors will (a) assist in supervising all aspects of the Fund's
operations except those performed by the Fund's Adviser under its investment
advisory agreement; (b) assist in the execution of cash management decisions
made by the Fund's Adviser(s) pursuant to instructions from Fund's Adviser(s);
(c) furnish such statistical or other factual information, advice regarding
economic factors and trends and advice as to occasional transactions in
specific securities (but without generally furnishing advice or making
recommendations regarding the purchase or sale of securities) as may be
requested by the Fund's Adviser(s) in connection with the selection of cash
equivalent investments as may be requested from time to time by the Fund's
Adviser(s); (d) supply the Fund with office facilities (which may be Boston
Advisors' own offices) statistical and research data, data processing
services, clerical, accounting and bookkeeping services, including but not
limited to, the calculation of net asset value of shares of the Fund, internal
auditing and legal services, internal executive and administrative services,
and stationary and office supplies; and (e) prepare reports to the
shareholders of the Fund, tax returns and reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities.
3. Compensation
In consideration of services rendered pursuant to this Agreement, the
Fund will pay Boston Advisors on the first business day of each month a fee
for the previous month at an annual rate of .20% of the Fund's average daily
net assets. Upon any termination of this Agreement before the end of any
month, the fee for such part of the month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to Boston Advisors, the value of the Fund's net
assets shall be computed at the times and in the manner specified in the
Prospectus and Statement of Additional Information as from time to time in
effect.
4. Expenses
Boston Advisors will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will bear certain
other expenses to be incurred in its operation, including: taxes, interest,
brokerage fees and commissions, if any; fees of Trustees of the Fund who are
not officers, directors, or employees of the Adviser or Boston Advisors;
Securities and Exchange Commission fees and state Blue Sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; certain
insurance premiums; outside auditing and legal expenses, costs of maintenance
of corporate existence; costs attributable to investor services, including
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statement of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings, and meetings of the officers or Board of Trustees of the
Fund; and any extraordinary expenses.
5. Reimbursement to the Fund
If in any fiscal year, the aggregate expenses of the Fund (including
fees pursuant to this Agreement and the Fund's investment advisory agreement,
but excluding interest, taxes, brokerage and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitations of any
state having jurisdiction over the Fund, Boston Advisors will reimburse the
Fund for that excess expense to the extent required by state law in the same
proportion as its respective fees bear to the combined fees for investment
advice and administration. The expense reimbursement obligation of Boston
Advisors will be limited to the amount of fees hereunder. Such expense
reimbursement, if any, will be estimated, reconciled and paid on a monthly
basis.
6. Standard of Care
Boston Advisors shall exercise its best judgment in rendering the
services listed in paragraph 2 above. Boston Advisors shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates provided that
nothing in this Agreement shall be deemed to protect or purport to protect
Boston Advisors against liability to the Fund or to its shareholders to which
Boston Advisors would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
by reason of Boston Advisors' reckless disregard of its obligations and duties
under this Agreement.
7. Term of Agreement
This Agreement shall continue automatically (unless terminated as
provided herein) for successive annual periods provided that such continuance
is specifically approved at least annually by the Board of Trustees of the
Fund including a majority of the Board of Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940, as amended) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting such approval. This Agreement is terminable, without
penalty, on 60 days' written notice, by the Board of Trustees of the Fund or
by vote of holders of a majority of the Fund's shares, or upon 90 days'
written notice, by Boston Advisors.
8. Service to Other Companies or Accounts
The Fund understands that Boston Advisors now acts, will continue to act
and may act in the future as administrator to one or more other investment
companies, and the Fund has no objection to Boston Advisors' so acting. The
Fund understands that the persons employed by Boston Advisors to assist in the
performance of Boston Advisors' duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict the right of Boston Advisors or any affiliate of Boston Advisors to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
9. Filing of Trust Agreement
The Trust represents that a copy of its Amended and Restated Master
Trust Agreement, dated November 5, 1992, together with all amendments thereto,
is on file with the Secretary of the Commonwealth of Massachusetts and with
the Boston City Clerk.
10. Limitation of Liability
This Fund and Boston Advisors agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present
or future, of the Fund individually, but are binding only upon the assets and
property of the Fund, as provided in the Master Trust Agreement. The
execution and delivery of this Agreement have been authorized by the Trustees
and the sole shareholder of the Fund, and signed by an authorized officer of
the Fund, acting as such, and neither such authorization by such Trustees and
shareholder nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the assets and property of the Fund as
provided in the Master Trust Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning to us the enclosed
copy hereof.
Very truly yours,
Shearson Lehman Brothers
Worldwide Prime Assets Fund
By: /s/ Heath B. McLendon
Title: Chairman of the Board
Accepted:
The Boston Company Advisors, Inc.
By: /s/ Alan Greene
Title: Executive Vice President
g\shared\domestic\clients\shearson\funds\linc\admnagmt
Exhibit 9 (b)
TRANSFER AGENCY AND REGISTRAR AGREEMENT
AGREEMENT, dated as of August 2, 1993, between Smith Barney Shearson
Worldwide Prime Assets Fund (the "Fund"), a business trust organized under the
laws of Massachusetts and having its principal place of business at Two World
Trade Center, New York, New York 10048 and THE SHAREHOLDER SERVICES GROUP,
INC. (MA) (the "Transfer Agent"), a Massachusetts corporation with principal
offices at One Exchange Place, 53 State Street, Boston, Massachusetts 02109.
W I T N E S S E T H
That for and in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, Partnership Agreement, or similar
organizational document as the case may be, of the Fund as the same may be
amended from time to time.
(b) "Authorized Person" shall be deemed to include any person,
whether or not such person is an officer or employee of the Fund, duly
authorized to give Oral Instructions or Written Instructions on behalf of the
Fund as indicated in a certificate furnished to the Transfer Agent pursuant to
Section 4(c) hereof as may be received by the Transfer Agent from time to
time.
(c) "Board of Directors" shall mean the Board of Directors, Board
of Trustees or, if the Fund is a limited partnership, the General Partner(s)
of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time deposit, or
cause to be deposited or held under the name or account of such a custodian
pursuant to a Custodian Agreement.
(f) "Fund" shall mean the entity executing this Agreement, and if
it is a series fund, as such term is used in the 1940 Act, such term shall
mean each series of the Fund hereafter created, except that appropriate
documentation with respect to each series must be presented to the Transfer
Agent before this Agreement shall become effective with respect to each such
series.
(g) "1940 Act" shall mean the Investment Company Act of 1940.
(h) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by the Transfer Agent from a person
reasonably believed by the Transfer Agent to be an Authorized Person;
(i) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information, including any supplements
thereto if any, which has become effective under the Securities Act of 1933
and the 1940 Act.
(j) "Shares" refers collectively to such shares of capital stock,
beneficial interest or limited partnership interests, as the case may be, of
the Fund as may be issued from time to time and, if the Fund is a closed-end
or a series fund, as such terms are used in the 1940 Act any other classes or
series of stock, shares of beneficial interest or limited partnership
interests that may be issued from time to time.
(k) "Shareholder" shall mean a holder of shares of capital stock,
beneficial interest or any other class or series, and also refers to partners
of limited partnerships.
(l) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by the Transfer Agent to be an
Authorized Person and actually received by the Transfer Agent. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a manually executed
original or other process.
2. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent, registrar and dividend
disbursing agent for Shares of the Fund and as shareholder servicing agent for
the Fund. The Transfer Agent accepts such appointments and agrees to perform
the duties hereinafter set forth.
3. Compensation.
(a) The Fund will compensate or cause the Transfer Agent to be
compensated for the performance of its obligations hereunder in accordance
with the fees set forth in the written schedule of fees annexed hereto as
Schedule A and incorporated herein. The Transfer Agent will transmit an
invoice to the Fund as soon as practicable after the end of each calendar
month which will be detailed in accordance with Schedule A, and the Fund will
pay to the Transfer Agent the amount of such invoice within thirty (30) days
after the Fund's receipt of the invoice.
In addition, the Fund agrees to pay, and will be billed
separately for, reasonable out-of-pocket expenses incurred by the Transfer
Agent in the performance of its duties hereunder. Out-of-pocket expenses shall
include, but shall not be limited to, the items specified in the written
schedule of out-of-pocket charges annexed hereto as Schedule B and
incorporated herein. Unspecified out-of-pocket expenses shall be limited to
those out-of-pocket expenses reasonably incurred by the Transfer Agent in the
performance of its obligations hereunder. Reimbursement by the Fund for
expenses incurred by the Transfer Agent in any month shall be made as soon as
practicable but no later than 15 days after the receipt of an itemized bill
from the Transfer Agent.
(b) Any compensation agreed to hereunder may be adjusted from
time to time by attaching to Schedule A, a revised fee schedule executed and
dated by the parties hereto.
4. Documents. In connection with the appointment of the Transfer Agent
the Fund shall deliver or caused to be delivered to the Transfer Agent the
following documents on or before the date this Agreement goes into effect, but
in any case within a reasonable period of time for the Transfer Agent to
prepare to perform its duties hereunder:
(a) If applicable, specimens of the certificates for Shares of
the Fund;
(b) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the Fund;
(c) A signature card bearing the signatures of any officer of the
Fund or other Authorized Person who will sign Written Instructions or is
authorized to give Oral Instructions.
(d) A certified copy of the Articles of Incorporation, as
amended;
(e) A certified copy of the By-laws of the Fund, as amended;
(f) A copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement;
(g) A certified list of Shareholders of the Fund with the name,
address and taxpayer identification number of each Shareholder, and the number
of Shares of the Fund held by each, certificate numbers and denominations (if
any certificates have been issued), lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefore, and the
number of Shares redeemed by the Fund; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares and the status of such Shares under the Securities Act
of 1933, as amended.
5. Further Documentation. The Fund will also furnish the Transfer
Agent with copies of the following documents promptly after the same shall
become available:
(a) each resolution of the Board of Directors authorizing the
issuance of Shares;
(b) any registration statements filed on behalf of the Fund and
all pre-effective and post-effective amendments thereto filed with the
Commission;
(c) a certified copy of each amendment to the Articles of
Incorporation or the By-laws of the Fund;
(d) certified copies of each resolution of the Board of Directors
or other authorization designating Authorized Persons; and
(e) such other certificates, documents or opinions as the
Transfer Agent may reasonably request in connection with the performance of
its duties hereunder.
6. Representations of the Fund. The Fund represents to the Transfer
Agent that all outstanding Shares are validly issued, fully paid and
non-assessable. When Shares are hereafter issued in accordance with the terms
of the Fund's Articles of Incorporation and its Prospectus, such Shares shall
be validly issued, fully paid and non-assessable.
7. Distributions Payable in Shares. In the event that the Board of
Directors of the Fund shall declare a distribution payable in Shares, the Fund
shall deliver or cause to be delivered to the Transfer Agent written notice of
such declaration signed on behalf of the Fund by an officer thereof, upon
which the Transfer Agent shall be entitled to rely for all purposes,
certifying (i) the identity of the Shares involved, (ii) the number of Shares
involved, and (iii) that all appropriate action has been taken.
8. Duties of the Transfer Agent. The Transfer Agent shall be
responsible for administering and/or performing those functions typically
performed by a transfer agent; for acting as service agent in connection with
dividend and distribution functions; and for performing shareholder account
and administrative agent functions in connection with the issuance, transfer
and redemption or repurchase (including coordination with the Custodian) of
Shares in accordance with the terms of the Prospectus and applicable law. The
operating standards and procedures to be followed shall be determined from
time to time by agreement between the Fund and the Transfer Agent and shall
initially be as described in Schedule C attached hereto. In addition, the
Fund shall deliver to the Transfer Agent all notices issued by the Fund with
respect to the Shares in accordance with and pursuant to the Articles of
Incorporation or By-laws of the Fund or as required by law and shall perform
such other specific duties as are set forth in the Articles of Incorporation
including the giving of notice of any special or annual meetings of
shareholders and any other notices required thereby.
9. Record Keeping and Other Information. The Transfer Agent shall
create and maintain all records required of it pursuant to its duties
hereunder and as set forth in Schedule C in accordance with all applicable
laws, rules and regulations, including records required by Section 31(a) of
the 1940 Act. All records shall be available during regular business hours
for inspection and use by the Fund. Where applicable, such records shall be
maintained by the Transfer Agent for the periods and in the places required by
Rule 31a-2 under the 1940 Act.
Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as
may be necessary for the Fund to evaluate the quality of the services
performed by the Transfer Agent pursuant hereto.
10. Other Duties. In addition to the duties set forth in Schedule C,
the Transfer Agent shall perform such other duties and functions, and shall be
paid such amounts therefor, as may from time to time be agreed upon in writing
between the Fund and the Transfer Agent. The compensation for such other
duties and functions shall be reflected in a written amendment to Schedule A
or B and the duties and functions shall be reflected in an amendment to
Schedule C, both dated and signed by authorized persons of the parties hereto.
11. Reliance by Transfer Agent; Instructions
(a) The Transfer Agent will have no liability when acting upon
Written or Oral Instructions believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice
of any change of authority of any person until receipt of a Written
Instruction thereof from the Fund pursuant to Section 4(c). The Transfer
Agent will also have no liability when processing Share certificates which it
reasonably believes to bear the proper manual or facsimile signatures of the
officers of the Fund and the proper countersignature of the Transfer Agent.
(b) At any time, the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions and may seek advice from legal
counsel for the Fund, or its own legal counsel, with respect to any matter
arising in connection with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with the opinion of counsel for the
Fund or for the Transfer Agent. Written Instructions requested by the
Transfer Agent will be provided by the Fund within a reasonable period of
time. In addition, the Transfer Agent, its officers, agents or employees,
shall accept Oral Instructions or Written Instructions given to them by any
person representing or acting on behalf of the Fund only if said
representative is an Authorized Person. The Fund agrees that all Oral
Instructions shall be followed within one business day by confirming Written
Instructions, and that the Fund's failure to so confirm shall not impair in
any respect the Transfer Agent's right to rely on Oral Instructions. The
Transfer Agent shall have no duty or obligation to inquire into, nor shall the
Transfer Agent be responsible for, the legality of any act done by it upon the
request or direction of a person reasonably believed by the Transfer Agent to
be an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to inquire
into, and shall not be liable for: (i) the legality of the issuance or sale
of any Shares or the sufficiency of the amount to be received therefor; (ii)
the legality of the redemption of any Shares, or the propriety of the amount
to be paid therefor; (iii) the legality of the declaration of any dividend by
the Board of Directors, or the legality of the issuance of any Shares in
payment of any dividend; or (iv) the legality of any recapitalization or
readjustment of the Shares.
12. Acts of God, etc. The Transfer Agent will not be liable or
responsible for delays or errors by acts of God or by reason of circumstances
beyond its control, including acts of civil or military authority, national
emergencies, labor difficulties, mechanical breakdown, insurrection, war,
riots, or failure or unavailability of transportation, communication or power
supply, fire, flood or other catastrophe.
13. Duty of Care and Indemnification. Each party hereto (the
"Indemnifying Party') will indemnify the other party (the "Indemnified Party")
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses of any sort or kind (including reasonable counsel fees
and expenses) resulting from any claim, demand, action or suit or other
proceeding (a "Claim") unless such Claim has resulted from a negligent failure
to act or omission to act or bad faith of the Indemnified Party in the
performance of its duties hereunder. In addition, the Fund will indemnify the
Transfer Agent against and hold it harmless from any Claim, damages,
liabilities or expenses (including reasonable counsel fees) that is a result
of: (i) any action taken in accordance with Written or Oral Instructions, or
any other instructions, or share certificates reasonably believed by the
Transfer Agent to be genuine and to be signed, countersigned or executed, or
orally communicated by an Authorized Person; (ii) any action taken in
accordance with written or oral advice reasonably believed by the Transfer
Agent to have been given by counsel for the Fund or its own counsel; or (iii)
any action taken as a result of any error or omission in any record (including
but not limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) delivered, or caused to be delivered by the Fund to the
Transfer Agent in connection with this Agreement.
In any case in which the Indemnifying Party may be asked to indemnify or
hold the Indemnified Party harmless, the Indemnifying Party shall be advised
of all pertinent facts concerning the situation in question. The Indemnified
Party will notify the Indemnifying Party promptly after identifying any
situation which it believes presents or appears likely to present a claim for
indemnification against the Indemnifying Party although the failure to do so
shall not prevent recovery by the Indemnified Party. The Indemnifying Party
shall have the option to defend the Indemnified Party against any Claim which
may be the subject of this indemnification, and, in the event that the
Indemnifying Party so elects, such defense shall be conducted by counsel
chosen by the Indemnifying Party and satisfactory to the Indemnified Party,
and thereupon the Indemnifying Party shall take over complete defense of the
Claim and the Indemnified Party shall sustain no further legal or other
expenses in respect of such Claim. The Indemnified Party will not confess any
Claim or make any compromise in any case in which the Indemnifying Party will
be asked to provide indemnification, except with the Indemnifying Party's
prior written consent. The obligations of the parties hereto under this
Section shall survive the termination of this Agreement.
14. Consequential Damages. In no event and under no circumstances
shall either party under this Agreement be liable to the other party for
indirect loss of profits, reputation or business or any other special damages
under any provision of this Agreement or for any act or failure to act
hereunder.
15. Term and Termination.
(a) This Agreement shall be effective on the date first written
above and shall continue until _____________, and thereafter shall
automatically continue for successive annual periods ending on the anniversary
of the date first written above, provided that it may be terminated by either
party upon written notice given at least 60 days prior to termination.
(b) In the event a termination notice is given by the Fund, it
shall be accompanied by a resolution of the Board of Directors, certified by
the Secretary of the Fund, designating a successor transfer agent or transfer
agents. Upon such termination and at the expense of the Fund, the Transfer
Agent will deliver to such successor a certified list of shareholders of the
Fund (with names and addresses), and all other relevant books, records,
correspondence and other Fund records or data in the possession of the
Transfer Agent, and the Transfer Agent will cooperate with the Fund and any
successor transfer agent or agents in the substitution process.
16. Confidentiality. Both parties hereto agree that any non public
information obtained hereunder concerning the other party is confidential and
may not be disclosed to any other person without the consent of the other
party, except as may be required by applicable law or at the request of the
Commission or other governmental agency. The parties further agree that a
breach of this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, without bond or other
security, to an injunction or injunctions to prevent breaches of this
provision.
17. Amendment. This Agreement may only be amended or modified by a
written instrument executed by both parties.
18. Subcontracting. The Fund agrees that the Transfer Agent may, in
its discretion, subcontract for certain of the services described under this
Agreement or the Schedules hereto; provided that the appointment of any such
Transfer Agent shall not relieve the Transfer Agent of its responsibilities
hereunder.
19. Miscellaneous.
(a) Notices. Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Fund or the Transfer
Agent, shall be sufficiently given if addressed to that party and received by
it at its office set forth below or at such other place as it may from time to
time designate in writing.
To the Fund:
______________________________
______________________________
______________________________
Attention: __________________
To the Transfer Agent:
The Shareholder Services Group
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to TSSG Counsel
(b) Successors. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns,
provided, however, that this Agreement shall not be assigned to any person
other than a person controlling, controlled by or under common control with
the assignor without the written consent of the other party, which consent
shall not be unreasonably withheld.
(c) Governing Law. This Agreement shall be governed exclusively
by the laws of the State of New York without reference to the choice of law
provisions thereof. Each party hereto hereby agrees that (i) the Supreme
Court of New York sitting in New York County shall have exclusive jurisdiction
over any and all disputes arising hereunder; (ii) hereby consents to the
personal jurisdiction of such court over the parties hereto, hereby waiving
any defense of lack of personal jurisdiction; and (iii) appoints the person to
whom notices hereunder are to be sent as agent for service of process.
(d) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
(e) Captions. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) Use of Transfer Agent's Name. The Fund shall not use the
name of the Transfer Agent in any Prospectus, Statement of Additional
Information, shareholders' report, sales literature or other material relating
to the Fund in a manner not approved prior thereto in writing; provided, that
the Transfer Agent need only receive notice of all reasonable uses of its name
which merely refer in accurate terms to its appointment hereunder or which are
required by any government agency or applicable law or rule. Notwithstanding
the foregoing, any reference to the Transfer Agent shall include a statement
to the effect that it is a wholly owned subsidiary of First Data Corporation.
(g) Use of Fund's Name. The Transfer Agent shall not use the
name of the Fund or material relating to the Fund on any documents or forms
for other than internal use in a manner not approved prior thereto in writing;
provided, that the Fund need only receive notice of all reasonable uses of its
name which merely refer in accurate terms to the appointment of the Transfer
Agent or which are required by any government agency or applicable law or
rule.
(h) Independent Contractors. The parties agree that they are
independent contractors and not partners or co-venturers.
(i) Entire Agreement; Severability. This Agreement and the
Schedules attached hereto constitute the entire agreement of the parties
hereto relating to the matters covered hereby and supersede any previous
agreements. If any provision is held to be illegal, unenforceable or invalid
for any reason, the remaining provisions shall not be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers, as of the day and
year first above written.
SMITH BARNEY SHEARSON THE SHAREHOLDER SERVICES
WORLDWIDE PRIME ASSETS FUND GROUP, INC.
By:/s/ Richard P. Roelofs By:/s/ Michael G.
McCarthy
Title:President Title:Vice
President
A-1
Transfer Agent Fee
Schedule A
Class A shares
The Fund shall pay the Transfer Agent an annualized fee of $11.00 per
shareholder account that is open during any monthly period. Such fee shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of
the annualized fee for all accounts that are open during such a month.
The Fund shall pay the Transfer Agent an additional fee of $.125 per closed
account per month applicable to those shareholder accounts which close in a
given month and remain closed through the following month-end billing cycle.
Such fee shall be billed by the Transfer Agent monthly in arrears.
Class B shares
The Fund shall pay the Transfer Agent an annualized fee of $12.50 per
shareholder account that is open during any monthly period. Such fee shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of
the annualized fee for all accounts that are open during such a month.
The Fund shall pay the Transfer Agent an additional fee of $.125 per closed
account per month applicable to those shareholder accounts which close in a
given month and remain closed through the following month-end billing cycle.
Such fee shall be billed by the Transfer Agent monthly in arrears.
Class C shares
The Fund shall pay the Transfer Agent an annualized fee of $8.50 per
shareholder account that is open during any monthly period. Such fee shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of
the annualized fee for all accounts that are open during such a month.
The Fund shall pay the Transfer Agent an additional fee of $.125 per closed
account per month applicable to those shareholder accounts which close in a
given month and remain closed through the following month-end billing cycle.
Such fee shall be billed by the Transfer Agent monthly in arrears.
Class D shares
The Fund shall pay the Transfer Agent an annualized fee of $9.50 per
shareholder account that is open during any monthly period. Such fee shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of
the annualized fee for all accounts that are open during such a month.
The Fund shall pay the Transfer Agent an additional fee of $.125 per closed
account per month applicable to those shareholder accounts which close in a
given month and remain closed through the following month-end billing cycle.
Such fee shall be billed by the Transfer Agent monthly in arrears.
B-1
Schedule B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable out-
of-pocket expenses, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and
stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first
class)
direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including
all lease, maintenance and line costs
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and
any
expenses incurred in connection with such terminals and
lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Record retention, retrieval and destruction costs, including,
but not
limited to exit fees harged by third party record keeping
vendors
- Third party audit reviews
- Insurance
- Such other miscellaneous expenses reasonably incurred by the
Transfer
Agent in performing its duties and responsibilities under
this
Agreement.
The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with the Transfer Agent. In addition,
the Fund will promptly reimburse the Transfer Agent for any other unscheduled
expenses incurred by the Transfer Agent whenever the Fund and the Transfer
Agent mutually agree that such expenses are not otherwise properly borne by
the Transfer Agent as part of its duties and obligations under the Agreement.
C-1
Schedule C
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent or its agent
shall maintain a record of the number of Shares held by each holder of record
which shall include name, address, taxpayer identification and which shall
indicate whether such Shares are held in certificates or uncertificated form.
2. Shareholder Services. The Transfer Agent or its agent will
investigate all inquiries from shareholders of the Fund relating to
Shareholder accounts and will respond to all communications from Shareholders
and others relating to its duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between the Transfer Agent and
the Fund. The Transfer Agent shall provide the Fund with reports concerning
shareholder inquires and the responses thereto by the Transfer Agent, in such
form and at such times as are agreed to by the Fund and the Transfer Agent.
3. Share Certificates.
(a) At the expense of the Fund, it shall supply the Transfer
Agent or its agent with an adequate supply of blank share certificates to meet
the Transfer Agent or its agent's requirements therefor. Such Share
certificates shall be properly signed by facsimile. The Fund agrees that,
notwithstanding the death, resignation, or removal of any officer of the Fund
whose signature appears on such certificates, the Transfer Agent or its agent
may continue to countersign certificates which bear such signatures until
otherwise directed by Written Instructions.
(b) The Transfer Agent or its agent shall issue replacement Share
certificates in lieu of certificates which have been lost, stolen or
destroyed, upon receipt by the Transfer Agent or its agent of properly
executed affidavits and lost certificate bonds, in form satisfactory to the
Transfer Agent or its agent, with the Fund and the Transfer Agent or its agent
as obligees under the bond.
(c) The Transfer Agent or its agent shall also maintain a record
of each certificate issued, the number of Shares represented thereby and the
holder of record. With respect to Shares held in open accounts or
uncertificated form, i.e., no certificate being issued with respect thereto,
the Transfer Agent or its agent shall maintain comparable records of the
record holders thereof, including their names, addresses and taxpayer
identification. The Transfer Agent or its agent shall further maintain a stop
transfer record on lost and/or replaced certificates.
C-2
4. Mailing Communications to Shareholders; Proxy Materials. The
Transfer Agent or its agent will address and mail to Shareholders of the Fund,
all reports to Shareholders, dividend and distribution notices and proxy
material for the Fund's meetings of Shareholders. In connection with meetings
of Shareholders, the Transfer Agent or its Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials, process and
tabulate returned proxy cards, report on proxies voted prior to meetings, act
as inspector of election at meetings and certify Shares voted at meetings.
5. Sales of Shares
(a) Suspension of Sale of Shares. The Transfer Agent or its
agent shall not be required to issue any Shares of the Fund where it has
received a Written Instruction from the Fund or official notice from any
appropriate authority that the sale of the Shares of the Fund has been
suspended or discontinued. The existence of such Written Instructions or such
official notice shall be conclusive evidence of the right of the Transfer
Agent or its agent to rely on such Written Instructions or official notice.
(b) Returned Checks. In the event that any check or other order
for the payment of money is returned unpaid for any reason, the Transfer Agent
or its agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares issued as a
result of such check or order; and (iii) take such actions as the Transfer
Agent may from time to time deem appropriate.
6. Transfer and Repurchase
(a) Requirements for Transfer or Repurchase of Shares. The
Transfer Agent or its agent shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in
the Fund's Prospectus.
The Transfer Agent or its agent will transfer or repurchase Shares
upon receipt of Oral or Written Instructions or otherwise pursuant to the
Prospectus and Share certificates, if any, properly endorsed for transfer or
redemption, accompanied by such documents as the Transfer Agent or its agent
reasonably may deem necessary.
The Transfer Agent or its agent reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the endorsement on
the instructions is valid and genuine. The Transfer Agent or its agent also
reserves the right to refuse to transfer or repurchase Shares until it is
satisfied that the requested transfer or repurchase is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers
or repurchases which the Transfer Agent or its agent, in its good judgement,
deems improper or unauthorized, or until it is reasonably satisfied that there
is no basis to any claims adverse to such transfer or repurchase.
C-3
(b) Notice to Custodian and Fund. When Shares are redeemed, the
Transfer Agent or its agent shall, upon receipt of the instructions and
documents in proper form, deliver to the Custodian and the Fund or its
designee a notification setting forth the number of Shares to be repurchased.
Such repurchased shares shall be reflected on appropriate accounts maintained
by the Transfer Agent or its agent reflecting outstanding Shares of the Fund
and Shares attributed to individual accounts.
(c) Payment of Repurchase Proceeds. The Transfer Agent or its
agent shall, upon receipt of the moneys paid to it by the Custodian for the
repurchase of Shares, pay such moneys as are received from the Custodian, all
in accordance with the procedures described in the written instruction
received by the Transfer Agent or its agent from the Fund.
The Transfer Agent or its agent shall not process or effect any
repurchase with respect to Shares of the Fund after receipt by the Transfer
Agent or its agent of notification of the suspension of the determination of
the net asset value of the Fund.
7. Dividends
(a) Notice to Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Directors of the
Fund with respect to Shares of the Fund, the Fund shall furnish or cause to be
furnished to the Transfer Agent or its agent a copy of a resolution of the
Fund's Board of Directors certified by the Secretary of the Fund setting forth
the date of the declaration of such dividend or distribution, the ex-dividend
date, the date of payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per Share to the
shareholders of record as of that date, the total amount payable to the
Transfer Agent or its agent on the payment date and whether such dividend or
distribution is to be paid in Shares of such class at net asset value.
On or before the payment date specified in such resolution of the
Board of Directors, the Custodian of the Fund will pay to the Transfer Agent
sufficient cash to make payment to the shareholders of record as of such
payment date.
(b) Insufficient Funds for Payments. If the Transfer Agent or
its agent does not receive sufficient cash from the Custodian to make total
dividend and/or distribution payments to all shareholders of the Fund as of
the record date, the Transfer Agent or its agent will, upon notifying the
Fund, withhold payment to all Shareholders of record as of the record date
until sufficient cash is provided to the Transfer Agent or its agent.
C-4
Exhibit 1 to Schedule C
Summary of Services
The services to be performed by the Transfer Agent or its agent shall be
as follows:
A. DAILY RECORDS
Maintain daily the following information with respect to each
Shareholder account as received:
o Name and Address (Zip Code)
o Class of Shares
o Taxpayer Identification Number
o Balance of Shares held by Agent
o Beneficial owner code: i.e., male, female, joint tenant,
etc.
o Dividend code (reinvestment)
o Number of Shares held in certificate form
B. OTHER DAILY ACTIVITY
o Answer written inquiries relating to Shareholder accounts
(matters relating to portfolio management, distribution of Shares and other
management policy questions will be referred to the Fund).
o Process additional payments into established Shareholder
accounts in accordance with Written Instruction from the Agent.
o Upon receipt of proper instructions and all required
documentation, process requests for repurchase of Shares.
o Identify redemption requests made with respect to accounts
in which Shares have been purchased within an agreed-upon period of time for
determining whether good funds have been collected with respect to such
purchase and process as agreed by the Agent in accordance with written
instructions set forth by the Fund.
o Examine and process all transfers of Shares, ensuring that
all transfer requirements and legal documents have been supplied.
C-5
o Issue and mail replacement checks.
o Open new accounts and maintain records of exchanges between
accounts
C. DIVIDEND ACTIVITY
o Calculate and process Share dividends and distributions as
instructed by the Fund.
o Compute, prepare and mail all necessary reports to
Shareholders or various authorities as requested by the Fund. Report to the
Fund reinvestment plan share purchases and determination of the reinvestment
price.
D. MEETINGS OF SHAREHOLDERS
o Cause to be mailed proxy and related material for all
meetings of Shareholders. Tabulate returned proxies (proxies must be
adaptable to mechanical equipment of the Agent or its agents) and supply daily
reports when sufficient proxies have been received.
o Prepare and submit to the Fund an Affidavit of Mailing.
o At the time of the meeting, furnish a certified list of
Shareholders, hard copy, microfilm or microfiche and, if requested by the
Fund, Inspection of Election.
E. PERIODIC ACTIVITIES
o Cause to be mailed reports, Prospectuses, and any other enclosures
requested by the Fund (material must be adaptable to mechanical equipment of
Agent or its agents).
o Receive all notices issued by the Fund with respect to the
Preferred Shares in accordance with and pursuant to the Articles of
Incorporation and the Indenture and perform such other specific duties as are
set forth in the Articles of Incorporation including a giving of notice of a
special meeting and notice of redemption in the circumstances and otherwise in
accordance with all relevant provisions of the Articles of Incorporation.
MASTER/TEMPLVAR -17-
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Smith Barney Shearson Worldwide Prime Assets Fund:
We hereby consent to the following with respect to Post-Effective
Amendment
No. 6 to the Registration Statement on Form N-1A (File No. 33-37750) under the
Securities
Act of 1933, as amended, of Smith Barney Shearson Worldwide Prime Assets Fund:
1. The incorporation by reference of our report dated January 7,
1994
accompanying the Annual Report for the fiscal year ended
November 30,
1993 of Smith Barney Shearson Worldwide Prime Assets Fund, in
the
Statement of Additional Information.
2. The reference to our firm under the heading "Financial
Highlights" in the
Prospectus.
3. The reference to our firm under the heading "Counsel and
Auditors" in
the Statement of Additional Information.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
SERVICES AND DISTRIBUTION PLAN
Smith Barney Shearson Worldwide Prime Assets Fund
This Services and Distribution Plan dated July 30, 1993 (the "Plan"), is
adopted in accordance with Rule 12b-1 (the "Rule") under the Investment
Company Act of 1940, as amended (the "1940 Act"), by Smith Barney Shearson
Worldwide Prime Assets Fund, a business trust organized under the laws of the
Commonwealth of Massachusetts (the "Fund"), subject to the following terms and
conditions:
Section 1. Annual Fee.
(a) Class A Distribution Fee. The Fund will pay to the distributor
of its shares, Smith Barney Shearson Inc., a corporation organized under the
laws of the State of Delaware ("Distributor"), a distribution fee under the
Plan at the annual rate of .90% of the average daily net assets of the Fund
attributable to the Class A shares (the "Class A Distribution Fee").
(b) Distribution Fee for Class B shares. The Fund will pay to
the Distributor a distribution fee under the Plan at the annual rate of .90%
of the average daily net assets of the Fund attributable to the Class B shares
(the "Class B Distribution Fee").
(c) Payment of Fees. The Distribution Fee will be calculated daily and
paid monthly by the Fund with respect to the foregoing classes of the Fund's
shares (each a "Class" and together the "Classes") at the annual rate
indicated above.
Section 2. Expenses Covered by the Plan.
With respect to expenses incurred by each Class, its respective
Distribution Fee may be used for: (a) costs of printing and distributing the
Fund's prospectus, statement of additional information and reports to
prospective investors in the Fund; (b) costs involved in preparing, printing
and distributing sales literature pertaining to the Fund; (c) an allocation of
overhead and other branch office distribution-related expenses of the
Distributor; (d) payments made to, and expenses of, Smith Barney Shearson
Financial Consultants and other persons who provide support services in
connection with the distribution of the Fund's shares, including but not
limited to, office space and equipment, telephone facilities, answering
routine inquires regarding the Fund, processing shareholder transactions and
providing any other shareholder services not otherwise provided by the Fund's
transfer agent; and (e) accruals for interest on the amount of the foregoing
expenses that exceed the Distribution Fee and, in the case of Class B shares,
the contingent deferred sales charge received by the Distributor; provided,
however, that the Distribution Fees may be used by the Distributor only to
cover expenses primarily intended to result in the sale of the Fund's Class B,
including without limitation, payments to Distributor's financial consultants
at the time of the sale of Class B. In addition, Service Fees are intended to
be used by the Distributor primarily to pay its financial consultants for
servicing shareholder accounts, including a continuing fee to each such
financial consultant, which fee shall begin to accrue immediately after the
sale of such shares.
Section 3. Approval of Shareholders.
The Plan will not take effect, and no fees will be payable in accordance
with Section 1 of the Plan, with respect to a Class until the Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of the Class. The Plan will be deemed to have been approved with respect to a
Class so long as a majority of the outstanding voting securities of the Class
votes for the approval of the Plan, notwithstanding that: (a) the Plan has
not been approved by a majority of the outstanding voting securities of any
other Class, or (b) the Plan has not been approved by a majority of the
outstanding voting securities of the Fund.
Section 4. Approval of Trustees.
Neither the Plan nor any related agreements will take effect until
approved by a majority of both (a) the full Board of Trustees of the Fund and
(b) those Trustees who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified Trustees"), cast in person at a
meeting called for the purpose of voting on the Plan and the related
agreements.
Section 5. Continuance of the Plan.
The Plan will continue in effect with respect to each Class until July
31, 1994, and thereafter for successive twelve-month periods with respect to
each Class; provided, however, that such continuance is specifically approved
at least annually by the Trustees of the Fund and by a majority of the
Qualified Trustees.
Section 6. Termination.
The Plan may be terminated at any time with respect to a Class (i) by
the Fund without the payment of any penalty, by the vote of a majority of the
outstanding voting securities of such Class or (ii) by a vote of the Qualified
Trustees. The Plan may remain in effect with respect to a particular Class
even if the Plan has been terminated in accordance with this Section 6 with
respect to any other Class.
Section 7. Amendments.
The Plan may not be amended with respect to any Class so as to increase
materially the amounts of the fees described in Section 1 above, unless the
amendment is approved by a vote of the holders of at least a majority of the
outstanding voting securities of that Class. No material amendment to the
Plan may be made unless approved by the Fund's Board of Trustees in the manner
described in Section 4 above.
Section 8. Selection of Certain Trustees.
While the Plan is in effect, the selection and nomination of the Fund's
Trustees who are not interested persons of the Fund will be committed to the
discretion of the Trustees then in office who are not interested persons of
the Fund.
Section 9. Written Reports.
In each year during which the Plan remains in effect, a person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to the Plan or any related agreement will prepare and furnish to the
Fund's Board of Trustees and the Board will review, at least quarterly,
written reports, complying with the requirements of the Rule, which sets out
the amounts expended under the Plan and the purposes for which those
expenditures were made.
Section 10. Preservation of Materials.
The Fund will preserve copies of the Plan, any agreement relating to the
Plan and any report made pursuant to Section 9 above, for a period of not less
than six years (the first two years in an easily accessible place) from the
date of the Plan, agreement or report.
Section 11. Meanings of Certain Terms.
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act by the Securities and Exchange Commission.
Section 12. Limitation of Liability.
It is expressly agreed that the obligations of the Fund hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the Fund,
individually, but are binding only upon the assets and property of the Fund,
as provided in the Master Trust Agreement of the Fund. The execution and
delivery of this Plan has been authorized by the Trustees and by shareholders
of the Fund holding at least a majority of the outstanding voting securities
and signed by an authorized officer of the Fund, acting as such, and neither
such authorization by such Trustees and shareholders nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Fund as provided in its Master Trust
Agreement.
IN WITNESS WHEREOF, the Fund executed the Plan as of July 30, 1993.
SMITH BARNEY SHEARSON
WORLDWIDE PRIME ASSETS FUND
By:/s/ Heath B. McLendon
Heath B. McLendon
Chairman of the Board
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