As filed with Securities and Exchange Commission on February 14, 2000
Securities Act Registration No. 333-92955
Investment Company Act No. 811-06290
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.2
Post-Effective Amendment No.___
__________________
Smith Barney World Funds, Inc.
(a Maryland Corporation)
(Exact Name of Registrant as Specified in Charter)
388 Greenwich Street
New York, New York 10013
(Address of Principal Executive Offices)
(212) 816-6474
(Registrant's Telephone Number, including Area Code)
Christina T. Sydor, Secretary
Smith Barney World Funds, Inc.
388 Greenwich Street
New York, New York 10013
(Name and Address of Agent for Service)
_____________________
Copies to:
John E. Baumgardner, Jr., Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
_______________
Approximate Date of Proposed Public Offering:
As soon as possible after the effective date of this Registration Statement.
Registrant hereby proposes that this amendment be declared effective on
February 14, 2000.
TITLE OF SECURITIES BEING REGISTERED:
Shares of Beneficial Interest ($.001 par value) of the
Smith Barney World Funds, Inc.
___________________
The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment Company
Act of 1940, as amended; accordingly, no fee is payable herewith because of
reliance upon Section 24(f).
PART A
INFORMATION REQUIRED IN THE PROXY STATEMENT/PROSPECTUS
<PAGE>
A SPECIAL NOTICE TO SHAREHOLDERS OF
SMITH BARNEY WORLD FUNDS, INC.--INTERNATIONAL BALANCED PORTFOLIO
Your Vote is Important
Dear Shareholder:
The Board of Directors of Smith Barney World Funds, Inc. has recently
reviewed and unanimously endorsed a proposal for a reorganization of the
International Balanced Portfolio (the "Balanced Portfolio") of Smith Barney
World Funds, Inc. which it judges to be in the best interests of Balanced
Portfolio's shareholders.
Under the terms of the proposal, the International Equity Portfolio of Smith
Barney World Funds, Inc. ("Equity Portfolio") will acquire all of the assets
and liabilities of the Balanced Portfolio, and you will become a shareholder
of the Equity Portfolio. You will receive shares of the Equity Portfolio with
an aggregate value equivalent to the aggregate net asset value of your
investment in the Balanced Portfolio at the time of the transaction.
Here are some facts about the merger and the Equity Portfolio that will be
useful to you as you vote for this transaction:
. There will be no cost to you to become a shareholder of the Equity
Portfolio.
. In the opinion of counsel, this transaction will be free from federal income
taxes to you, the Balanced Portfolio and the Equity Portfolio.
. You will be able to redeem your shares of the Equity Portfolio for cash
without any redemption fees or required holding period.
. Shares of the Equity Portfolio are priced on each day the fund is open for
business and you may redeem all or a part of your shares at the then-current
net asset value per share.
. As a shareholder of the Equity Portfolio, you will have the ability to
exchange your shares of the fund for shares of the same class of other funds
within that fund complex.
. The same portfolio managers who currently manage the Balanced Portfolio also
manage the Equity Portfolio.
. Lower operating expenses are anticipated for Balanced Portfolio
shareholders.
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS: YOUR VOTE IS IMPORTANT
To consider this transaction, we have called a Special Meeting of
Shareholders to be held on April 7, 2000. We strongly urge your participation
by asking you to review, complete and return your proxy promptly.
Detailed information about the proposed transaction is described in the
enclosed proxy statement. On behalf of the Board of Directors, I thank you for
your participation as a shareholder and urge you to please exercise your right
to vote by completing, dating and signing the enclosed proxy card. A self-
addressed, postage-paid envelope has been enclosed for your convenience.
If you have any questions regarding the proposed transaction, please feel
free to call your Salomon Smith Barney Financial Consultant who will be
pleased to assist you.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED PROMPTLY.
Sincerely,
Heath B. McLendon
Chairman of the Board
February 21, 2000
<PAGE>
SMITH BARNEY WORLD FUNDS, INC.--INTERNATIONAL BALANCED PORTFOLIO
388 Greenwich Street
New York, New York 10013
----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April 7, 2000
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the International Balanced Portfolio ("Acquired Fund") of Smith
Barney World Funds, Inc. (the "Company") will be held at 7 World Trade Center,
New York, New York on April 7, 2000, commencing at 10:00 a.m. for the
following purposes:
1. To approve or disapprove the Company's Plan of Reorganization dated
as of February 11, 2000 providing for (i) the acquisition of all of the
assets and liabilities of the Acquired Fund by Smith Barney World Funds,
Inc.--International Equity Portfolio ("Acquiring Fund"), (ii) the
amendment of the Company's Charter reclassifying all shares of the
Acquired Fund as shares of the Acquiring Fund, and (iii) the
accomplishment of the reclassification by the issuance of shares of the
Acquiring Fund to shareholders of the Acquired Fund.
2. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
February 8, 2000 as the record date for the determination of shareholders
of the Acquired Fund entitled to notice of and to vote at the Meeting and
any adjournment or adjournments thereof.
Your vote is important regardless of the size of your holdings in the
Acquired Fund. Whether or not you plan to attend the meeting, we ask that you
please complete and sign the enclosed proxy card and return it promptly in the
enclosed envelope that needs no postage if mailed in the continental United
States. Instructions for the proper execution of proxies are set forth on the
inside cover.
By Order of the Board of
Directors
Christina T. Sydor, Esq.
Secretary
February 21, 2000
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF
FURTHER SOLICITATION.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy
card.
3. All Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example:
<TABLE>
<CAPTION>
Registration Valid Signatures
------------ ----------------
<S> <C>
Corporate Accounts
(1)ABC Corp. ................................... ABC Corp.
(2)ABC Corp. ................................... John Doe, Treasurer
(3)ABC Corp. c/o John Doe, Treasurer............ John Doe
(4)ABC Corp. Profit Sharing Plan................ John Doe, Trustee
Trust Accounts
(1)ABC Trust.................................... Jane B. Doe, Trustee
(2)Jane B. Doe, Trustee u/t/d 12/28/78.......... Jane B. Doe
Custodian or Estate Accounts
(1)John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA.......................................... John B. Smith
(2)Estate of John B. Smith...................... John B. Smith, Jr., Executor
</TABLE>
<PAGE>
PROSPECTUS/PROXY STATEMENT DATED FEBRUARY 21, 2000
Acquisition of the Assets of
INTERNATIONAL BALANCED PORTFOLIO
a separate investment portfolio of
SMITH BARNEY WORLD FUNDS, INC.
388 Greenwich Street
New York, New York 10013
(800) 451-2010
By and in Exchange for Shares of
INTERNATIONAL EQUITY PORTFOLIO
a separate investment portfolio of
SMITH BARNEY WORLD FUNDS, INC.
388 Greenwich Street
New York, New York 10013
(800) 451-2010
This Prospectus/Proxy Statement is being furnished to shareholders of the
International Balanced Portfolio (the "Acquired Fund") of Smith Barney World
Funds, Inc. (the "Company") in connection with a proposed plan of
reorganization to be submitted to shareholders of the Acquired Fund for
consideration at a Special Meeting of Shareholders to be held on April 7, 2000
at 10:00 a.m. (the "Meeting"), at the offices of Salomon Smith Barney Inc.
("Salomon Smith Barney") located at 7 World Trade Center, New York, New York
10048, or any adjournment or adjournments thereof.
The plan of reorganization provides for all of the assets of the Acquired
Fund to be acquired by the International Equity Portfolio (the "Acquiring
Fund") of the Company in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of liabilities of the Acquired Fund
(hereinafter referred to as the "Reorganization"). (The Acquiring Fund and the
Acquired Fund are sometimes referred to hereinafter as the "Funds" and
individually as a "Fund"). The Reorganization will be accomplished pursuant to
an amendment to the Company's Charter that will reclassify shares of the
Acquired Fund into shares of the Acquiring Fund. As a result of the
Reorganization, each shareholder of the Acquired Fund will receive that number
of shares of the Acquiring Fund having an aggregate value equal to the
aggregate net asset value of such shareholder's shares of the Acquired Fund
immediately prior to the Reorganization. Holders of Class A shares of the
Acquired Fund will receive Class A shares of the Acquiring Fund, and no sales
charge will be imposed on the Class A shares of the Acquiring Fund received by
the Acquired Fund Class A shareholders. Holders of Class B or Class L shares
of the Acquired Fund will receive Class B or Class L shares, respectively, of
the Acquiring Fund. No contingent deferred sales charge ("CDSC") will be
imposed on Class B or Class L shares, nor those Class A shares otherwise
subject to a CDSC, of the Acquiring Fund upon consummation of the
Reorganization.
<PAGE>
However, any CDSC which is applicable to a shareholder's investment will
continue to apply, and in calculating the applicable CDSC payable upon the
subsequent redemption of Class B or Class L shares of the Acquiring Fund, the
period during which an Acquired Fund shareholder held Class B or Class L
shares of the Acquired Fund will be counted. This transaction is structured to
be tax-free for federal income tax purposes to shareholders and to both the
Acquiring Fund and the Acquired Fund.
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.
The Acquiring Fund is a separate diversified investment portfolio of the
Company, an open-end, management investment company, whose investment
objective is to seek total return on its assets from growth of capital and
income. The Acquiring Fund invests primarily in equity securities of foreign
companies, including exchange traded and over-the-counter common stocks and
preferred shares, debt securities convertible into equity securities, warrants
and rights relating to equity securities. The Acquired Fund is another
separate investment portfolio of the Company, but the Acquired Fund is non-
diversified. The Acquired Fund's investment objective is to provide a
competitive total return on its assets from growth of capital and income
through a portfolio invested primarily in securities of established non-U.S.
issuers. The Acquired Fund invests primarily in equity and debt securities of
foreign issuers, including common stocks and preferred shares, debt securities
convertible into equity securities, depository receipts and warrants and
rights relating to equity securities. Debt securities in which the Fund
invests consist primarily of foreign government obligations, but may include
corporate bonds.
SSB Citi Fund Management LLC, 388 Greenwich Street, New York, New York 10013
(the "Manager"), serves as investment manager to both the Acquiring Fund and
the Acquired Fund. The Manager is a wholly owned subsidiary of Salomon Smith
Barney Holdings, Inc. which, in turn, is a wholly owned subsidiary of
Citigroup Inc.
The investment policies of the Acquiring Fund are generally similar to those
of the Acquired Fund. Certain differences in the investment policies of the
Acquiring Fund and the Acquired Fund, however, are described under "Investment
Objectives and Policies" in this Prospectus/Proxy Statement.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Acquiring Fund that
a prospective investor should know before investing. Certain relevant
documents listed below, which have been filed with the Securities and Exchange
Commission ("SEC"), are incorporated in whole or in part by reference. A
Statement of Additional Information dated February 21, 2000, relating to this
Prospectus/Proxy
2
<PAGE>
Statement and the Reorganization, has been filed with the SEC and is
incorporated by reference into this Prospectus/Proxy Statement. A copy of such
Statement of Additional Information is available upon request and without
charge by writing to the Acquiring Fund at the address listed on the cover
page of this Prospectus/Proxy Statement or by contacting a Salomon Smith
Barney Financial Consultant. The Statement of Additional Information is not a
Prospectus and should be read in conjunction with the Prospectus.
1. The Prospectus of Smith Barney World Funds, Inc.--International Equity
Portfolio dated February 28, 1999 is incorporated in its entirety by reference
and a copy accompanies this Proxy Statement/Prospectus.
2. The Prospectus of Smith Barney World Funds, Inc.--International Balanced
Portfolio dated February 28, 1999 is incorporated in its entirety by reference
and a copy accompanies this Proxy Statement/Prospectus.
3. The Annual Report of Smith Barney World Funds, Inc.--International Equity
Portfolio dated October 31, 1999, is incorporated in its entirety by reference
and a copy accompanies this Proxy Statement/Prospectus.
Also accompanying this Prospectus/Proxy Statement as Exhibit A is a copy of
the Plan of Reorganization (the "Plan") for the proposed transaction. The
Reorganization will be accomplished pursuant to an amendment to the Company's
Charter reclassifying shares of the Acquired Fund as shares of the Acquiring
Fund, substantially in the form set forth as Annex I to the Plan. Any term not
defined herein shall have the meaning assigned to it in the accompanying
prospectus of the Acquiring Fund.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ADDITIONAL MATERIALS.................................................... 4
FEE TABLES.............................................................. 5
SUMMARY................................................................. 8
PRINCIPAL RISK FACTORS.................................................. 13
INFORMATION ABOUT THE REORGANIZATION.................................... 14
INFORMATION ABOUT THE ACQUIRING FUND.................................... 20
INFORMATION ABOUT THE ACQUIRED FUND..................................... 20
VOTING INFORMATION...................................................... 21
OTHER BUSINESS.......................................................... 22
EXHIBIT A: PLAN OF REORGANIZATION
AND ANNEX I........................................................... A-1
</TABLE>
ADDITIONAL MATERIALS
The following additional materials, which have been incorporated by
reference into the Statement of Additional Information dated February 21, 2000
relating to this Prospectus/Proxy Statement and the Reorganization, will be
sent (without charge) to all shareholders requesting a copy of such Statement
of Additional Information.
1. Statement of Additional Information of Smith Barney World Funds, Inc.--
International Equity Portfolio dated February 28, 1999, as supplemented
December 15, 1999 and February 21, 2000.
2. Annual Report of Smith Barney World Funds, Inc.--International Balanced
Portfolio for the fiscal year ended October 31, 1999.
4
<PAGE>
FEE TABLES
Following are tables showing the current costs and expenses of the Acquired
Fund and the Acquiring Fund and the pro forma costs and expenses expected to
be incurred by the Acquiring Fund after giving effect to the Reorganization,
each based on the maximum sales charge or maximum CDSC that may be incurred at
the time of purchase or redemption. Shareholders of the Acquired Fund will
experience a decrease in expenses with respect to Class A, Class B, and Class
L shares following the Reorganization.
CLASS A SHARES
<TABLE>
<CAPTION>
Acquired Acquiring
Fund Fund Pro Forma
-------- --------- ---------
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum sales charge imposed on purchases
(as a percentage of offering price).......... 5.00% 5.00%* 5.00%
Maximum CDSC (as a percentage of
original cost or redemption proceeds,
whichever is lower).......................... None** None** None**
Annual Operating Expenses:
(as a percentage of average net assets)
Management fees................................ 0.85% 0.85% 0.85%
12b-1 fees..................................... 0.25% 0.25% 0.25%
Other expenses***.............................. 1.11% 0.18% 0.18%
---- ---- ----
Total Operating Expenses....................... 2.21% 1.28% 1.28%
==== ==== ====
</TABLE>
- -----------
* The sales charge imposed on purchases will be waived with regard to the
Acquiring Fund's exchange of its shares for the Acquired Fund's assets;
you will not pay any sales charge in connection with your receipt of the
Acquiring Fund's Class A shares pursuant to the Reorganization.
** You may buy Class A shares in amounts of $500,000 or more at net asset
value (without an initial sales charge), but if you redeem those shares
within 12 months of their purchase, you will pay a deferred sales charge
of 1.00%. However, if you receive Class A shares pursuant to the
Reorganization, you may redeem those shares at any time and you will not
have to pay any deferred sales charge unless your 12-month holding period
commencing with your purchase of Class A shares of the Acquired Fund has
not yet expired.
*** "Other expenses" for shares of the Acquired Fund and the Class A shares of
the Acquiring Fund are based on expenses for the fiscal year ended
October 31, 1999.
5
<PAGE>
CLASS B SHARES
<TABLE>
<CAPTION>
Acquired Acquiring
Fund Fund Pro Forma
-------- --------- ---------
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum sales charge imposed on purchases (as a
percentage of offering price)................ None None None
Maximum CDSC (as a percentage of
original cost or redemption proceeds,
whichever is lower).......................... 5.00%* 5.00%* 5.00%*
Annual Operating Expenses:
(as a percentage of average net assets)
Management fees................................ 0.85% 0.85% 0.85%
12b-1 fees..................................... 1.00% 1.00% 1.00%
Other expenses**............................... 1.18% 0.23% 0.23%
---- ---- ----
Total Operating Expenses....................... 3.03% 2.08% 2.08%
==== ==== ====
</TABLE>
- -----------
* If you receive Class B shares pursuant to the Reorganization, you may
redeem those shares at any time and you will not have to pay any deferred
sales charge. However, if you have held Class B shares of the Acquired
Fund for less than 6 years, you will be subject to the applicable deferred
sales charge.
** "Other expenses" for Class B shares of the Acquired Fund and the Acquiring
Fund are based on expenses for the fiscal year ended October 31, 1999.
CLASS L SHARES*
<TABLE>
<CAPTION>
Acquired Acquiring
Fund Fund Pro Forma
-------- --------- ---------
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum sales charge imposed on purchases (as
a percentage of offering price)............. 1.00% 1.00% 1.00%
Maximum CDSC (as a percentage of
original cost or redemption proceeds,
whichever is lower)......................... 1.00%** 1.00%** 1.00%**
Annual Operating Expenses:
(as a percentage of average net assets)
Management fees............................... 0.85% 0.85% 0.85%
12b-1 fees.................................... 1.00% 1.00% 1.00%
Other expenses***............................. 1.35% 0.22% 0.22%
---- ---- ----
Total Operating Expenses...................... 3.20% 2.07% 2.07%
==== ==== ====
</TABLE>
- -----------
* Class L shares do not have a conversion feature and, therefore, are
subject to an ongoing distribution fee. As a result, long-term
shareholders of Class L
6
<PAGE>
shares may pay more than the economic equivalent of the maximum front-end
sales charge permitted by the National Association of Securities Dealers,
Inc.
** If you receive Class L shares pursuant to the Reorganization, you may
redeem those shares at any time and you will not have to pay any deferred
sales charge. However, if you have held Class L shares of the Acquired Fund
for less than one year, you will be subject to the deferred
sales charge.
*** "Other expenses" for Class L shares of the Acquired Fund and the Acquiring
Fund are based on expenses for the fiscal year ended October 31, 1999.
Example
This example helps you compare the costs of investing in the Acquiring Fund
with the costs of investing in the Acquired Fund. Your actual costs may be
higher or lower. The example assumes:
. You invest $10,000 in each Fund for the period shown.
. You redeem all of your shares at the end of each period.
. Your investment has a 5% return each year.
. You reinvest all distributions and dividends without a sales charge.
. The Funds' operating expenses remain the same.
Number of years you own your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years*
------ ------- ------- ---------
<S> <C> <C> <C> <C>
Class A
Acquired Fund................................. $713 $1,157 $1,625 $2,917
Acquiring Fund................................ 624 886 1,167 1,968
Class B
Acquired Fund................................. $806 $1,236 $1,691 $3,161
Acquiring Fund................................ 711 952 1,219 2,209
Class L
Acquired Fund................................. $520 $1,076 $1,757 $3,568
Acquiring Fund................................ 408 742 1,202 2,476
</TABLE>
- ----------
* 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.
Shareholders of the Acquired Fund will experience a decrease in costs with
respect to Class A, Class B, and Class L shares following the Reorganization.
This example should not be considered representations of past or future
expenses and actual expenses may be greater or less than those shown.
7
<PAGE>
SUMMARY
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement, the Plan
of Reorganization, a copy of which is attached to this Prospectus/Proxy
Statement as Exhibit A and the Company's Charter amendment attached as Annex I
to the Plan of Reorganization, the accompanying Prospectus of the Acquiring
Fund dated February 28, 1999, the Prospectus of the Acquired Fund dated
February 28, 1999 and the Statement of Additional Information of the Smith
Barney World Funds, Inc. dated February 21, 2000, which is available upon
request.
Proposed Reorganization. The Plan provides for the acquisition of all of the
assets and the assumption of the liabilities of the Acquired Fund by the
Acquiring Fund and the issuance of shares of the Acquiring Fund to
shareholders of the Acquired Fund. (The foregoing proposed transaction is
referred to in this Prospectus/Proxy Statement as the "Reorganization.") The
Reorganization will be accomplished pursuant to an amendment to the Charter of
the Company that will reclassify shares of the Acquired Fund as shares of the
Acquiring Fund, substantially in the form set forth as Annex I to the Plan of
Reorganization (Exhibit A). As a result of the Reorganization, each
shareholder of the Acquired Fund will become the owner of that number of full
and fractional shares of the Acquiring Fund having an aggregate value equal to
the aggregate net asset value of the shareholder's shares of the Acquired Fund
as of the close of business on the date that the Acquired Fund's assets are
exchanged for shares of the Acquiring Fund. (Shareholders of Class A, Class B
or Class L shares of the Acquired Fund will receive Class A, Class B or Class
L shares, respectively, of the Acquiring Fund). See "Information About the
Reorganization--Plan of Reorganization."
For the reasons set forth below under "Reasons for the Reorganization," the
Board of Directors of the Company, including the Directors of the Company who
are not "interested persons" (the "Independent Directors"), as that term is
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
have concluded that the Reorganization would be in the best interests of the
shareholders of the Acquired Fund and that the interests of the Acquired
Fund's existing shareholders will not be diluted as a result of the
transaction contemplated by the Reorganization and therefore has submitted the
Plan for approval by the Acquired Fund's shareholders. The Board of Directors
of the Company has reached similar conclusions with respect to the Acquiring
Fund and has also approved the Reorganization in respect of the Acquiring
Fund.
Approval of the Reorganization will require the affirmative vote of a
majority of the outstanding shares of the Acquired Fund. For purposes of
voting with respect to the Reorganization, the Class A, Class B and Class L
shares of the Acquired Fund will vote together as a single class. See "Voting
Information."
8
<PAGE>
Tax Consequences. Prior to completion of the Reorganization, the Funds will
have received an opinion of counsel that, based on customary representations
and assumptions, no gain or loss will be recognized by the Acquired Fund or
its shareholders for federal income tax purposes as a result of the
Reorganization. The holding period and aggregate tax basis of the Acquiring
Fund shares received by an Acquired Fund shareholder will be the same as the
holding period and aggregate tax basis of the shares of the Acquired Fund
previously held by such shareholder. In addition, the holding period and tax
basis of the assets of the Acquired Fund in the hands of the Acquiring Fund as
a result of the Reorganization will be the same as in the hands of the
Acquired Fund immediately prior to the Reorganization.
Investment Objectives and Policies. The Acquiring Fund and the Acquired Fund
have generally similar investment objectives, policies and restrictions. The
Acquiring Fund is a diversified portfolio whose investment objective is total
return on its assets from growth of capital and income. It invests primarily
in equity securities of foreign companies, including exchange traded and over-
the-counter common stocks and preferred shares, debt securities convertible
into equity securities, warrants and rights relating to equity securities. The
Acquired Fund is a non-diversified portfolio whose investment objective is to
provide a competitive total return on its assets from growth of capital and
income through a portfolio invested primarily in securities of established
non-U.S. issuers. It invests primarily in equity and debt securities of
foreign issuers, including common stocks and preferred shares, debt securities
convertible into equity securities, depository receipts and warrants and
rights relating to equity securities. Debt securities in which the Fund
invests consist primarily of foreign government obligations, but may include
corporate bonds. For a discussion of the differences between the investment
policies of the Acquiring Fund and the Acquired Fund, see "Comparison of
Investment Objectives and Policies."
Comparison of Investment Objectives and Policies. Despite the similar
investment objectives, there are some differences between the investment
policies that the two Funds pursue to fulfill their investment objectives. The
primary differences between the Funds' investment policies relate to the fact
that the Acquiring Fund invests primarily in equity securities of foreign
companies, while the Acquired Fund also invests in the debt securities of
foreign issuers, consisting primarily of foreign government obligations, but
also including corporate bonds. The manager of the Acquired Fund selects
investments for either their capital appreciation or income potential,
attempting to achieve a balance between equity and debt securities so that
neither normally comprises more than 70%, or less than 30% of its assets. The
manager may vary its allocation, depending on the manager's assessment of
current economic and market conditions.
The final material difference between the investment policies of the Funds
stems from the fact that the Acquired Fund is a non-diversified investment
company and the Acquiring Fund is a diversified investment company. In order
to
9
<PAGE>
be classified as a diversified investment company, the Acquiring Fund may not,
with respect to 75% of its assets, invest more than 5% of its total assets in
the securities of one issuer (except U.S. Government securities) or own more
than 10% of the outstanding voting securities of any one issuer. As a non-
diversified fund, the Acquired Fund is not subject to these restrictions.
However, both Funds intend to conduct their operations so as to qualify as a
"regulated investment company" for purposes of the Internal Revenue Code of
1986, as amended (the "Code"), which will relieve the Funds of any liability
for federal income tax to the extent their earnings are distributed to
shareholders. To qualify as a regulated investment company, both Funds will,
among other things, limit their investments so that, at the close of each
quarter of their taxable year (1) not more than 25% of the market value of
each Fund's total assets will be invested in the securities of a single issuer
and (2) with respect to 50% of the market value of its total assets, not more
than 5% of the market value of each Fund's total assets will be invested in
the securities of a single issuer.
The manager of both Funds believes that there are no differences between the
investment policies of the Funds and no differences in the 1940 Act
regulations applicable to both Funds that would require the sale of any
securities of the Acquired Fund because of the Reorganization. However, if
such a sale were required, the manager would pay all costs associated with
such sale.
Purchase and Redemption Procedures. The purchase and redemption procedures
available to shareholders of the Acquiring Fund are identical to those of the
Acquired Fund. Purchase of shares of the Acquiring Fund and the Acquired Fund
may be made through a Salomon Smith Barney, Inc. ("Salomon Smith Barney")
Financial Consultant or a broker that clears securities transactions through
Salomon Smith Barney on a fully disclosed basis (a "Dealer Representative").
Class A shares of both the Acquiring Fund and the Acquired Fund are sold
subject to a maximum initial sales charge of 5.00% of the public offering
price. Class A shares of either Fund may be purchased at a reduced sales
charge or at net asset value, determined by aggregating the dollar amount of a
new purchase and the total asset value of all Class A shares of Funds offered
by Salomon Smith Barney held by such person that are exchangeable with Class A
shares of either Fund and applying the (reduced) sales charge applicable to
such aggregate. Purchases of Class A shares of both Funds, which when combined
with current holdings of Class A shares offered with a sales charge equal or
exceed $500,000 in the aggregate, will be made at net asset value, with no
sales charge, but will be subject to a CDSC of 1.00% on redemptions made
within 12 months. Class B shares of both Funds may be purchased without an
initial sales charge but are subject to a CDSC of 5.00% payable upon certain
redemptions. The charge is reduced over time and there is no CDSC after six
years.
10
<PAGE>
Class L shares of both Funds are sold with an initial sales charge of 1.00%
and are subject to a CDSC if shares are redeemed within one year of purchase.
Class L shares are also subject to higher ongoing expenses than Class A
shares.
Class A shares of both the Acquiring and the Acquired Fund may be redeemed
at their respective net asset values per share next determined without charge,
except as set forth in the preceding paragraph. Class B shares of both Funds
may be redeemed at their net asset value per share, subject to a maximum CDSC
of 5.00% of the lower of original cost or redemption proceeds, declining by
0.50% the first year after purchase and by 1.00% each year thereafter to zero.
Class L shares of both Funds may be redeemed at their net asset value per
share, subject to a CDSC of 1.00% if such shares are redeemed during the first
12 months following their purchase. Shares of both Funds held by Salomon Smith
Barney as custodian must be redeemed by submitting a written request to a
Salomon Smith Barney Financial Consultant. All other shares may be redeemed
through a Salomon Smith Barney Financial Consultant, Dealer Representative or
by forwarding a written request for redemption to Smith Barney World Funds,
Inc./[name of fund] (please specify class); c/o PFPC Global Fund Services,
P.O. Box 9699, Providence, RI 02940-9699. See "Redeeming Shares" in the
accompanying Prospectus of the Acquiring Fund.
Distribution Arrangements. To compensate Salomon Smith Barney for the
service it provides and for the expenses it bears, both the Acquiring Fund and
the Acquired Fund have adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act (the "12b-1 Plan"). Under the 12b-1 Plan, each Fund pays
Salomon Smith Barney a service fee, accrued daily and paid monthly, calculated
at the annual rate of 0.25% of the value of the Fund's average daily net
assets attributable to the Class A shares. The service fee is primarily used
to pay Salomon Smith Barney Financial Consultants for servicing shareholder
accounts. In addition, each Fund pays Salomon Smith Barney a distribution fee
accrued daily and paid monthly calculated at the annual rate of 1.00% of the
Fund's average daily net assets with respect to Class B shares and Class L
shares. The distribution fee is used to cover expenses primarily intended to
result in the sale of those shares. These expenses include: advertising
expenses; the cost of printing and mailing prospectuses to potential
investors; payments to and expenses of Salomon Smith Barney Financial
Consultants and other persons who provide support services in connection with
the distribution of shares; interest and/or carrying charges; and indirect and
overhead costs of Salomon Smith Barney associated with the sale of fund
shares, including lease, utility, communications and sales promotion expenses.
For each of the Class B and Class L shares of the Funds, the distribution fee
is calculated at the annual rate of 0.75% of the value of the average net
assets attributable to the shares of the respective Class.
Payments under each 12b-1 Plan are not tied exclusively to the distribution
and shareholder services expenses actually incurred by Salomon Smith Barney
and
11
<PAGE>
the payments may exceed distribution expenses actually incurred. The Board of
Directors will evaluate the appropriateness of each 12b-1 Plan and its payment
terms on a continuing basis and in so doing will consider all relevant
factors, including expenses borne by Salomon Smith Barney, amounts received
under the 12b-1 Plan and proceeds of the deferred sales charges.
Exchange Privileges. The exchange privileges available to shareholders of
the Acquiring Fund are identical to those available to shareholders of the
Acquired Fund. Shareholders of both the Acquired Fund and the Acquiring Fund
may exchange at net asset value all or a portion of their shares for shares of
the same class in certain other funds of the Smith Barney Mutual Funds. Any
exchange will be a taxable event for which a shareholder may have to recognize
a gain or a loss under federal income tax provisions. No initial sales charge
is imposed on the shares being acquired in an exchange, and no CDSC is imposed
on the shares being disposed of in the exchange. A sales charge differential,
however, may apply to exchanges of Class A shares with other Smith Barney
Mutual Funds. For purposes of computing the CDSC that may be payable upon a
disposition, the Class B and Class L shares and those Class A shares that are
subject to a CDSC acquired in the exchange will be deemed to have been
purchased on the same date as the Class B, Class L and Class A shares that
were exchanged therefor. Class B shares and Class A shares subject to a CDSC
(shares purchased in an amount greater than $500,000 and not subject to an
initial sales charge) of the Funds that are exchanged for Class B and Class A
shares, respectively, of other Smith Barney Mutual Funds imposing a higher
CDSC will be subject to the higher applicable CDSC. See "Exchanging Shares" in
the accompanying Prospectus of the Acquiring Fund.
Dividends. The Acquiring Fund generally makes capital gain distributions and
pays dividends, if any, once a year, typically in December. The Acquiring Fund
may pay additional distributions and dividends at other times if necessary for
it to avoid a federal tax. The Acquired Fund generally declares and pays
dividends quarterly and makes capital gain distributions, if any, once a year,
typically in December. The Acquired Fund may pay additional distributions and
dividends at other times if necessary for it to avoid a federal tax. With
respect to both Funds, unless a shareholder otherwise instructs, dividends and
capital gains distributions will be reinvested automatically in additional
shares of the same class at net asset value, subject to no sales charge or
CDSC. The distribution option currently in effect for a shareholder of the
Acquired Fund will remain in effect after the Reorganization. After the
Reorganization, however, the former Acquired Fund shareholders may change
their distribution option at any time by contacting a Salomon Smith Barney
Financial Consultant. See "Dividends, Distributions and Taxes" in the
accompanying Prospectus of the Acquiring Fund.
Shareholder Voting Rights. The Company is registered with the SEC as an
open-end management investment company. The Acquiring Fund and the Acquired
Fund are both separate series of the Company, a Maryland corporation having a
12
<PAGE>
Board of Directors. Shareholders of both funds have comparable voting rights.
The Company does not hold a meeting of shareholders annually, and there is
normally no meeting of shareholders held for the purpose of electing Directors
unless and until such time as less than a majority of the Directors holding
office have been elected by shareholders. At that time, the Directors of the
Company then in office will call a shareholders' meeting for the election of
Directors.
Shareholders of the Acquired Fund may redeem their shares at net asset value
(subject to any applicable CDSC) prior to the date of the Reorganization. For
purposes of voting with respect to the Reorganization, the Class A, Class B
and Class L shares of the Acquired Fund will vote together as a single class.
PRINCIPAL RISK FACTORS
Due to the similarities of investment objectives and policies of the
Acquiring Fund and the Acquired Fund, the investment risks are substantially
similar. Such risks are generally those typically associated with investing in
foreign securities. The following is a summary of the principal risk factors
associated with investing in shares of the Acquiring Fund and a comparison
with those applicable to the Acquired Fund. This summary is qualified in its
entirety by the accompanying Prospectus of the Acquiring Fund.
Investors could lose money on their investment in the Acquiring Fund, or the
Acquiring Fund may not perform as well as other investments, if:
. Foreign securities prices decline
. Adverse governmental action or political, economic or market instability
affects a foreign country or region.
. The currency in which a security is priced declines in value relative to
the U.S. dollar
. The manager's judgment about the attractiveness, value or potential
appreciation of a particular security proves to be incorrect.
Many foreign countries in which the Acquiring Fund invests have markets that
are less liquid and more volatile than markets in the U.S. In some foreign
countries, less information is available about foreign issuers and markets
because of less rigorous accounting and regulatory standards than in the U.S.
Currency fluctuations could erase investment gains or add to investment
losses. The risk of investing in foreign securities is greater in the case of
emerging markets.
In Europe, Economic and Monetary Union ("EMU") and the introduction of a
single currency began on January 1, 1999. There are significant political and
economic risks associated with EMU, which may increase the volatility of the
Acquiring Fund's European investments and present valuation problems.
13
<PAGE>
Currency Transactions. The Acquiring Fund may enter into transactions to buy
or sell currencies at a future date, which may be a few days or a number of
months. The Fund may enter into these forward currency contracts to:
. Settle transactions in securities quoted in foreign currencies
. Attempt to protect against the economic impact of adverse changes in the
value of the U.S. dollar.
The Fund may not fully benefit from or may lose money on forward currency
transactions if changes in currency rates do not occur as anticipated or do
not correspond accurately to changes in the value of the Fund's holdings.
In comparing these risks with the risks of the Acquired Fund, the risks are
almost identical. The one material difference is that investors in the
Acquired Fund are also subject to the risks of investing in debt securities,
including the possibility that debt securities may lose value because of an
increase in market interest rates, a decline in an issuer's credit rating or
financial condition or a default.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The following summary of the Plan is qualified in
its entirety by reference to the Plan (Exhibit A hereto). The Plan provides
that the Acquiring Fund will acquire all of the assets of the Acquired Fund in
exchange for Class A, Class B and Class L shares of the Acquiring Fund and the
assumption by the Acquiring Fund of liabilities of the Acquired Fund on April
14, 2000 or such later date as may be agreed upon by the parties (the "Closing
Date").
Prior to the Closing Date, the Acquired Fund will endeavor to discharge all
of its known liabilities and obligations. The number of full and fractional
shares of Class A, B and L shares to be issued to the Acquired Fund
shareholders will be determined on the basis of the Acquiring Fund's Class A,
B and L shares' and the Acquired Fund's Class A, B and L shares' relative net
asset values. The net asset value per share of each class will be determined by
dividing assets, less liabilities, by the total number of such outstanding
shares. The Reorganization will be accomplished pursuant to an amendment to
the Charter of the Company that will reclassify shares of the Acquired Fund as
shares of the Acquiring Fund, substantially in the form set forth as Annex I
to the Plan of Reorganization (Exhibit A).
The Acquired Fund and the Acquiring Fund will utilize the procedures set
forth in their respective Prospectuses to determine the value of their
respective portfolio securities and to determine the aggregate value of each
Fund's portfolio. The methods of valuation will also be consistent with the
requirements of Rule 22c-1 under the 1940 Act and the interpretations of such
rule by the SEC's Division of Investment Management.
14
<PAGE>
Prior to the Closing Date, dividends on the Acquired Fund's shares,
consisting of substantially all of the Acquired Fund's undistributed taxable
net investment income and undistributed taxable capital gains will be declared
as of the first business day prior to the Closing Date (the term Closing Date
shall have the meaning assigned to it in the Plan), to the shareholders of
record as of the close of business on the second day prior to the Closing
Date, payable on the first day prior to the Closing Date, with proceeds being
paid to the Fund's Dividend Paying Agent which shall pay such proceeds in cash
or immediately invest the proceeds for the account of the shareholders of
record in accordance with the Acquired Fund's current Prospectus, on the date
that the dividend is paid, in additional shares at the net asset value per
share of the applicable class next determined following the time of the
cash payment to the Dividend
Agent.
On the Closing Date or as soon thereafter as conveniently practicable, the
Acquired Fund will liquidate and distribute pro rata to shareholders of record
as of the close of business on the Closing Date the full and fractional shares
of the Acquiring Fund received by the Acquired Fund. Such liquidation and
distribution will be accomplished by the establishment of accounts in the
names of the Acquired Fund's shareholders on the share records of the
Acquiring Fund's transfer agent. Each account will represent the respective
pro rata number of full and fractional shares of the Acquiring Fund due to
each of the Acquired Fund's shareholders.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan. The Plan may be abandoned at any time prior to the Closing
Date upon the vote of a majority of the Board of Directors of the Company. In
addition, at any time prior to or after approval of the Plan, the Company may
amend any provisions of the Plan upon authorization of the Company's Board of
Directors, with or without shareholder approval.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of the Acquired Fund. If the Reorganization is not approved
by shareholders of the Acquired Fund, the Board of Directors of the Company
will consider courses of action available to it, including re-submitting the
Reorganization proposal to shareholders.
Description of the Acquiring Fund's Shares. Pursuant to the Reorganization
and in accordance with the Plan, each shareholder of Class A, Class B and
Class L shares of the Acquired Fund will become a shareholder of Class A,
Class B and Class L shares, respectively, of the Acquiring Fund. Each share of
the Acquiring Fund represents a proportional interest in the Acquiring Fund's
investment portfolio. The Class A shares and the Class L shares of the
Acquiring Fund are normally purchased subject to a 5.00% and 1.00% initial
sales charge, respectively. However, no sales charge will be paid on shares
received pursuant to this
15
<PAGE>
Reorganization. Also, no fee will be charged upon redemption of shares of the
Acquiring Fund received pursuant to this Reorganization. For a complete
description of the Acquiring Fund's shares, please see "Choosing a class of
shares to buy"; "Comparing the fund's classes"; "Sales charges"; "More about
deferred sales charges"; "Buying shares"; "Exchanging shares"; "Redeeming
shares"; and "Other things to know about share transactions," in the Acquiring
Fund's Prospectus which was mailed herewith.
Reasons for the Reorganization. The Board of Directors of the Company has
determined that it is in the best interest of the Funds' shareholders to
combine the Acquired Fund with the Acquiring Fund. The Funds have generally
similar investment objectives and policies and have the same investment
adviser, distributor, transfer agent and Board of Directors. In reaching this
conclusion, the Board considered a number of factors as described below.
Among the factors considered by the Board of Directors is the fact that the
Acquired Fund does not have sufficient assets to justify maintaining this fund
as a separate investment portfolio (i.e. this fund has never exceeded $20.6
million in assets). The Acquired Fund, which has been in existence for
approximately five years, has not grown and in light of the history of the
fund, there is no foreseeable potential for future growth. The manager
subsidized this fund by absorbing expenses, including waiving the management
fee, in several years since the inception of the fund. Without these
subsidies, the Acquired Fund would have had a substantially higher expense
ratio and substantially lower performance.
The Board of Directors also considered that the Reorganization would permit
the shareholders of the Acquired Fund to pursue substantially the same
investment goals in a larger fund. A larger fund should enhance the ability of
the manager to effect portfolio transactions on more favorable terms and give
the manager greater flexibility and the ability to select a larger number of
portfolio securities for the Acquiring Fund, with the attendant benefit of
increased diversification. In addition, the larger aggregate asset base would
result in lower overall expense ratios for the Acquired Fund's shareholders
through the spreading of both fixed and variable costs of operations over a
larger asset base. As a general rule, economies of scale can be expected to be
realized with respect to fixed expenses, such as costs of printing and fees
for professional services, although expenses that are based on the value of
assets or the number of shareholder accounts, such as custody fees, would be
largely unaffected by the Reorganization.
Both the Acquired Fund and the Acquiring Fund are managed by the same
investment adviser and have the same portfolio managers, i.e., the individuals
primarily responsible for each Fund's day-to-day investment decisions. In
particular, the Board was presented with information to the effect that, with
two different funds, Salomon Smith Barney was confronted with operational and
shareholder services issues, including (i) dilution of the firm's money
management
16
<PAGE>
and research expertise due to the splitting of attention between the two
highly similar funds; and (ii) investor confusion associated with offering
similar funds. The Board also considered that no sales charges would be
imposed in effecting the Reorganization and the advantages of eliminating
duplication inherent in marketing two funds with similar investment
objectives.
Information regarding operating expenses of the Acquired Fund and the
Acquiring Fund reflecting expenses for the fiscal year ended October 31, 1999,
is included under the caption "Fee Tables" in this Prospectus/Proxy Statement.
Based upon these levels of expenses, assuming the same level of assets of the
combined fund after the Reorganization as on April 14, 2000, it is estimated
that Class A, Class B and Class L shareholders of the Acquired Fund should
experience a 0.93%, 0.95% and 1.13% decrease, respectively, in total operating
expenses, resulting from a decrease in other operating expenses.
The Board of Directors also considered liquidation of the Acquired Fund. If
the Acquired Fund were to liquidate, the shareholders would receive the net
asset value of their holdings in cash pursuant to the liquidation and would
recognize any gain or loss then built into their shares. Pursuant to the
Reorganization, the shareholders of the Acquired Fund will receive an amount
of Class A, Class B, or Class L shares of the Acquiring Fund equal to the net
asset value of their holdings in the Acquired Fund in a tax free
reorganization. Thus, shareholders may defer the recognition of gain or loss
on the disposition of their Acquired Fund shares pursuant to the
Reorganization. However, if the shareholder desired cash and a recognition for
tax purposes of the gain or loss built in such shareholder's shares, the
shareholder would have the right to redeem those shares in the Acquiring Fund
at the shares' net asset value for cash and with no redemption fee charged.
Thus, by pursuing the Reorganization, rather than a liquidation of the
Acquired Fund, shareholders have the option of achieving the same result as a
liquidation or they may defer tax consequences. In addition, because a
liquidation would require all of the Acquired Fund's investments to be sold,
there would be lower transaction costs involved in the Reorganization.
The Board also considered, among other things, the terms and conditions of
the Reorganization and the comparative investment performance of the Funds. In
addition, the Board was advised that the Reorganization would be effected as a
tax-free reorganization.
In light of the foregoing, the Board of Directors of the Smith Barney World
Funds, Inc. including the Independent Directors, has determined that it is in
the best interests of the Acquired Fund and its shareholders to combine with
the Acquiring Fund. The Board of Directors has also determined that a
combination of the Acquired Fund and the Acquiring Fund would not result in a
dilution of the interests of the Acquired Fund's shareholders and that the
Reorganization would be effected as a tax-free reorganization. Accordingly,
the Board of Directors,
17
<PAGE>
including a majority of the Independent Directors, has determined that the
Reorganization is in the best interests of the Acquiring Fund's shareholders
and that the interests of the Acquiring Fund's shareholders would not be
diluted as a result of the Reorganization.
Federal Income Tax Consequences. The exchange of assets for shares of the
Acquiring Fund is intended to qualify for federal income tax purposes as a
tax-free reorganization under Section 368(a) of the Code. As a condition to
the closing of the Reorganization, the Acquiring Fund and the Acquired Fund
will receive an opinion from Sullivan & Cromwell, counsel to the Company, to
the effect that, on the basis of customary representations and assumptions,
and the existing provisions of the Code, U.S. Treasury regulations issued
thereunder, current administrative rules, pronouncements and court decisions,
for federal income tax purposes, upon consummation of the Reorganization:
(1) the transfer of all or substantially all of the Acquired Fund's
assets in exchange for the Acquiring Fund's shares and the assumption by
the Acquiring Fund of scheduled liabilities of the Acquired Fund will
constitute a "reorganization" within the meaning of Section 368(a) of the
Code, and the Acquiring Fund and the Acquired Fund will each be a "party
to a reorganization" within the meaning of Section 368(b) of the Code;
(2) no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for the Acquiring
Fund's shares and the assumption of scheduled liabilities of the Acquired
Fund;
(3) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange
for the Acquiring Fund's shares and the assumption of scheduled
liabilities of the Acquired Fund or upon the distribution (whether actual
or constructive) of the Acquiring Fund's shares to the Acquired Fund's
shareholders;
(4) no gain or loss will be recognized by shareholders of the Acquired
Fund upon the exchange of their shares of the Acquired Fund for shares of
the Acquiring Fund;
(5) the aggregate tax basis for shares of the Acquiring Fund received by
each shareholder of the Acquired Fund pursuant to the Reorganization will
be the same as the aggregate tax basis of shares of the Acquired Fund
surrendered therefor, and the holding period of shares of the Acquiring
Fund to be received by each shareholder of the Acquired Fund will include
the period during which shares of the Acquired Fund exchanged therefor
were held by such shareholder (provided shares of the Acquired Fund were
held as capital assets on the date of the Reorganization); and
(6) the tax basis to the Acquiring Fund of the Acquired Fund's assets
acquired by the Acquiring Fund will be the same as the tax basis of such
assets
18
<PAGE>
to the Acquired Fund immediately prior to the Reorganization, and the
holding period of the assets of the Acquired Fund in the hands of the
Acquiring Fund will include the period during which those assets were held
by the Acquired Fund.
Shareholders of the Acquired Fund should consult their tax advisors
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. Since the foregoing discussion only relates to the
federal income tax consequences of the Reorganization, shareholders of the
Acquired Fund should also consult their tax advisors as to state and local tax
consequences, if any, of the Reorganization.
Capitalization. The following table shows the capitalization of the
Acquiring Fund and the Acquired Fund as of February 8, 2000, the Record Date,
and on a pro forma basis as of that date, giving effect to the proposed
acquisition of assets at net asset value.
<TABLE>
<CAPTION>
Acquiring Acquired Pro-Forma for
Fund Fund Reorganization
(Unaudited) (Unaudited) (Unaudited)
-------------- -------------
(In thousands, except per share values)
<S> <C> <C> <C>
Class A Shares
Net assets................ $ 650,944 $ 8,784 $ 659,728
Net asset value per share. 32.85 15.46 32.85
Shares outstanding........ 24,244 568 20,083
Class B Shares
Net assets................ $ 266,967 $ 3,266 $ 270,210
Net asset value per share. 32.25 15.49 32.25
Shares outstanding........ 8,291 209 8,379
Class L Shares
Net assets................ $ 219,095 $ 2,487 $ 221,582
Net asset value per share. 31.75 15.42 31.75
Shares outstanding........ 7,360 161 6,979
Class Y Shares
Net assets................ $ 442,917 $ 0 $ 442,917
Net asset value per share. 32.93 0 32.93
Shares outstanding........ 13,450 0 13,450
Class Z Shares
Net assets................ $ 187,840 $ 0 $ 187,840
Net asset value per share. 32.90 0 32.90
Shares outstanding........ 5,719 0 5,719
</TABLE>
As of the Record Date, the officers and Directors of the Acquired Fund
beneficially owned as a group less than 1% of the outstanding shares of each
class of the Acquired Fund. To the best knowledge of the Directors of the
Acquired Fund, as of the Record Date, no shareholder or "group" (as that term
is used in Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange
Act")),
19
<PAGE>
except as set forth in the table below, owned beneficially or of record more
than 5% of the outstanding shares of a class of the Acquired Fund. As of the
Record Date, the officers and Directors of the Acquiring Fund beneficially
owned as a group less than 1% of the outstanding shares of each class of the
Acquiring Fund. To the best knowledge of the Directors of the Acquiring Fund,
as of the Record Date, no shareholder or "group" (as that term is used in
Section 13(d) of the Exchange Act) owned beneficially or of record more than
5% of the outstanding shares of a class of the Acquiring Fund. As of February
8, 2000, the net asset value of the Acquired Fund equaled less than 1% of the
Acquiring Fund's net asset value; thus, pursuant to item 14(a)(2) of Form N-
14, proforma financial statements, including the Capitalization Table, have
not been prepared.
<TABLE>
<CAPTION>
Percentage of
Class Owned
of Record
or Beneficially
--------------------------
Upon
Consummation
Fund As of the of the
Name and Address and Class Record Date Reorganization
- ---------------- ------------- ----------- --------------
<S> <C> <C> <C>
Daniel H. and Margaret L. Becker Acquired Fund *
Charitable Remainder Unitrust Class A 5.8390
Attn: An Faluto Jr. TTEE
1111 Boardman Canfied Rd.
Youngstown, OH 44512-4062
</TABLE>
- -----------
* Less than 1.00%
INFORMATION ABOUT THE ACQUIRING FUND
The Prospectus and Annual Report of the Acquiring Fund have been delivered
with this prospectus/proxy statement and are incorporated herein by reference.
Information regarding Fund Goal and Strategies, Investment Objective, Risks,
Performance and Expenses, Fee Table, More on the Fund's Investments,
Management and Financial Highlights Information of the Acquiring Fund may be
found under such headings in the prospectus of the Acquiring Fund. For
information regarding Management's Discussion of Fund Performance of the
Acquiring Fund, please refer to the Acquiring Fund's annual report that
accompanies this prospectus/proxy statement.
INFORMATION ABOUT THE ACQUIRED FUND
Information about the Acquired Fund is incorporated herein by reference from
the current prospectus of the Acquired Fund. The Acquired Fund's prospectus,
dated February 28, 1999, is available upon request (without charge) by calling
or writing the Acquired Fund at the telephone number or address listed on the
cover page of this prospectus/proxy statement. Copies of the Acquired Fund's
20
<PAGE>
shareholder reports, prospectus and statement of additional information can be
reviewed and copied at the Commission's Public Reference Room in Washington,
D.C. In addition, information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the Acquired Fund are available on the EDGAR Database on the
Commission's Internet site at http://www.sec.gov. Copies of this information
may be obtained for a duplicating fee by electronic request at the following
E-mail address: [email protected], or by writing the Commission's Public
Reference Section, Washington, D.C. 20549-0102.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Directors of the Company to be used at
a Special Meeting of Shareholders of the Acquired Fund to be held at 10:00
a.m. on April 7, 2000 at 7 World Trade Center, New York, NY 10048 and at any
adjournment or adjournments thereof. This Prospectus/Proxy Statement, along
with a Notice of the Meeting and a proxy card, is first being mailed to
shareholders of the Acquired Fund on or about February 21, 2000. Only
shareholders of record as of the close of business on the Record Date will be
entitled to notice of, and to vote at, the Meeting or any adjournment thereof.
The holders of one-third of the shares of the Acquired Fund outstanding at the
close of business on the Record Date present in person or represented by proxy
will constitute a quorum for the Meeting. For purposes of determining a quorum
for transacting business at the Meeting, abstentions and broker "non-votes"
(that is, proxies from brokers or nominees indicating that such persons have
not received instructions from the beneficial owner or other persons entitled
to vote shares on a particular matter with respect to which the brokers or
nominees do not have discretionary power) will be treated as shares that are
present but which have not been voted. For this reason, abstentions and broker
non-votes will have the effect of a "no" vote for purposes of obtaining
approval of the Plan. If the enclosed form of proxy is properly executed and
returned in time to be voted at the Meeting, the proxies named therein will
vote the shares represented by the proxy in accordance with the instructions
marked thereon. Unmarked proxies will be voted FOR approval of the proposed
Reorganization and FOR approval of any matters deemed appropriate. A proxy may
be revoked at any time on or before the Meeting by written notice to the
Secretary of the Acquired Fund, Christina T. Sydor, Esq., 388 Greenwich
Street, New York, New York, 10013. Unless revoked, all valid proxies will be
voted in accordance with the specifications thereon or, in the absence of such
specifications, FOR approval of the Plan and the Reorganization contemplated
thereby.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of the Acquired Fund. Shareholders of the Acquired Fund are
entitled to one vote for each share. Fractional shares are entitled to
proportional voting rights.
21
<PAGE>
Proxy solicitations will be made primarily by mail, but proxy solicitations
also may be made by telephone or personal interviews conducted by officers and
employees of Salomon Smith Barney and its affiliates and/or by PFPC Global
Fund Services the Acquiring Fund's sub-transfer agent. If the Acquired Fund
records votes by telephone, it will use procedures designed to authenticate
shareholders' identities to allow shareholders to authorize the voting of
their shares in accordance with their instructions, and to confirm that their
instructions have been properly recorded. Although a shareholder's vote may be
taken by telephone, each shareholder will receive a copy of this
Prospectus/Proxy Statement and may vote by mail using the enclosed proxy card.
The aggregate cost of solicitation of the shareholders of the Acquired Fund is
expected to be approximately $8,500. Expenses of the Reorganization, including
the costs of proxy solicitation and the preparation of enclosures to the
Prospectus/Proxy Statement, reimbursement of expenses of forwarding
solicitation material to beneficial owners of shares of the Acquired Fund and
expenses incurred in connection with the preparation of this Prospectus/Proxy
Statement will be borne by the Acquiring Fund.
In the event that a quorum necessary for a shareholders meeting is not
present or sufficient votes to approve the Reorganization are not received by
April 7, 2000, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered: the percentage of votes actually cast, the percentage of negative
votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any such adjournment will require an affirmative vote by the
holders of a majority of the shares present in person or by proxy and entitled
to vote at the Meeting. The persons named as proxies will vote upon a decision
to adjourn the Meeting.
The votes of the shareholders of the Acquiring Fund are not being solicited
by this Prospectus/Proxy Statement.
OTHER BUSINESS
The Directors of the Smith Barney World Funds, Inc. do not intend to present
any other business at the Meeting. If, however, any other matters are properly
brought before the Meeting, the persons named in the accompanying form of
proxy will vote thereon in accordance with their judgment.
The Board of Directors of the Smith Barney World Funds, Inc., including the
Independent Directors, unanimously recommends approval of the Plan, and any
unmarked proxies without instructions to the contrary will be voted in favor
of the Plan.
22
<PAGE>
EXHIBIT A
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the "Plan") is dated as of this 11th day of
February, 2000, and has been adopted by the Board of Directors of Smith Barney
World Funds, Inc. (the "Company") to provide for the reorganization of its
International Balanced Portfolio (the "Acquired Fund") into its International
Equity Portfolio (the "Acquiring Fund").
A. BACKGROUND
The Acquired Fund and the Acquiring Fund (individually, a Fund and
collectively, the "Funds") are separate investment portfolios of the Company.
The Company is organized as a Maryland corporation and is an open-end
management investment company registered with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Board of Directors of the Company has determined that it
is in the best interests of the Acquired Fund and its shareholders to be
reorganized through the transfer of all of the Acquired Fund's assets and
liabilities to the Acquiring Fund upon the terms set forth in this Plan (the
"Reorganization").
B. THE REORGANIZATION
1. Prior to the Closing Date (as defined below in Section 6 of this Article
B), the Company will execute and file Articles of Amendment to the Company's
Charter with the Maryland State Department of Assessments and Taxation in
substantially the form attached hereto as Annex I, which Articles of Amendment
will, effective as of the Closing Date: (a) reclassify all of the Company's
issued and outstanding shares of Common Stock of the Acquired Fund as shares
of Common Stock of the comparable class of equal aggregate value of the
Acquiring Fund; and (b) reclassify all of the authorized and unissued Common
Stock of the Acquired Fund as authorized and unissued Common Stock of the
Acquiring Fund.
2. At the Closing Date, all property of every description, and all
interests, rights, privileges and powers of the Acquired Fund, subject to all
liabilities of the Acquired Fund, whether accrued, absolute, contingent or
otherwise (such assets subject to such liabilities are herein referred to as
the "Assets") will be transferred and conveyed by the Acquired Fund to the
Acquiring Fund and will be assumed by the Acquiring Fund, such that at and
after the Closing Date, the Assets of the Acquired Fund will become and be the
Assets of the Acquiring Fund. In exchange for the transfer of the Assets of
the Acquired Fund and in order to accomplish the reclassification of shares as
described above in Section 1 of this Article B, the Acquiring Fund will
contemporaneously issue to shareholders of the Acquired Fund full and
fractional shares of the Acquiring Fund (as contemplated by Section
A-1
<PAGE>
4 of this Article B) having an aggregate net asset value equal to the value of
the Assets of the Acquired Fund. For purposes of effecting such exchange, the
value of the Assets of the Acquired Fund and the net asset value of the shares
of the Acquiring Fund shall be determined as of the close of regular trading
on the New York Stock Exchange on April 14, 2000 or at such other time as may
be determined by the Board of Directors or an authorized officer of the
Company. Such values shall be computed in the manner set forth in the
applicable Fund's then current prospectus under the Securities Act of 1933, as
amended. At and after the Closing Date, all debts, liabilities, obligations
and duties of the Acquired Fund will attach to the Acquiring Fund as aforesaid
and may thenceforth be enforced against the Acquiring Fund to the same extent
as if the same had been incurred by the Acquiring Fund.
3. Prior to the Closing Date, dividends on the Acquired Fund's shares,
consisting of substantially all of the Acquired Fund's undistributed taxable
net investment income and undistributed taxable capital gains will be declared
as of the first business day prior to the Closing Date (the term Closing Date
shall have the meaning assigned to it in the Plan), to the shareholders of
record as of the close of business on the second day prior to the Closing
Date, payable on the first day prior to the Closing Date, with proceeds being
paid to the Fund's Dividend Paying Agent, which shall pay such proceeds in cash
or immediately invest the proceeds for the account of the shareholders of
record in accordance with the Acquired Fund's current Prospectus, on the date
that the dividend is paid, in additional shares at the net asset value per
share of the applicable class next determined following the time of the
cash payment to the Dividend Agent.
4. At the Closing Date, the Company will liquidate the Acquired Fund and
issue full and fractional shares of the Acquiring Fund to the Acquired Fund's
shareholders, such that the shares of the Acquiring Fund that are distributed
to a shareholder of the Acquired Fund will have an aggregate net asset value
equal to the aggregate net asset value of the shares of the Acquired Fund held
by such shareholder immediately prior to the Closing Date. In addition, each
shareholder of the Acquired Fund will have the right to receive any unpaid
dividends or other distributions that were declared before the Closing Date
with respect to the shares of the Acquired Fund held by such shareholder
immediately prior to the Closing Date.
A-2
<PAGE>
5. The stock transfer books of the Company with respect to the Acquired Fund
will be permanently closed as of the close of business on the day immediately
preceding the Closing Date. Redemption requests received thereafter by the
Company with respect to the Acquired Fund will be deemed to be redemption
requests for shares of the Acquiring Fund issued pursuant to this Plan. If any
shares of the Acquired Fund are represented by a share certificate, the
certificate must be surrendered to the Company's transfer agent for
cancellation before the Acquiring Fund shares issuable to the shareholder
pursuant to this Plan will be redeemed.
6. The Closing Date for purposes of this Plan shall be the close of business
on April 14, 2000, or at such other time as may be determined by the Board of
Directors or an authorized officer of the Company.
C. ACTIONS BY SHAREHOLDERS OF THE ACQUIRED FUND
Prior to the Closing Date and as a condition thereto, the Board of Directors
of the Company will call, and the Company will hold, a meeting of the
shareholders of the Acquired Fund to consider and vote upon:
1. Approval of this Plan and the implementing charter amendment
reclassifying shares of the Acquired Fund into shares of the Acquiring
Fund and the transactions contemplated hereby.
2. Such other matters as may be determined by the Board of Directors of
the Company.
D. CONDITIONS OF THE REORGANIZATION
Consummation of this Plan will be subject to:
1. The approval of the matters referred to in Article C of this Plan by
the shareholders of the Acquired Fund in the manner required by law and
otherwise deemed necessary or advisable by the Board of Directors of the
Company; and
2. The following additional conditions:
(a) The Company will have received opinions of Sullivan & Cromwell
based upon customary representations and assumptions and to the
effect that:
(i) the shares of the Acquiring Fund issued pursuant to this
Plan will, when issued in accordance with the provisions hereof,
be validly issued, fully paid and non-assessable; and
(ii) for federal income tax purposes: (A) the acquisition of
the assets and assumption of the liabilities of the Acquired
Fund by the Acquiring Fund in return for shares of the Acquiring
Fund followed
A-3
<PAGE>
by the distribution of such shares to the shareholders of the
Acquired Fund will constitute a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code (the "Code")
and the Acquiring Fund and the Acquired Fund will each be "a
party to the reorganization" within the meaning of Section
368(b) of the Code; (B) no gain or loss will be recognized by
the Acquired Fund upon the transfer of its assets and
liabilities to the Acquiring Fund; (C) no gain or loss will be
recognized by the Acquiring Fund upon the receipt of the assets
of the Acquired Fund in exchange for shares of the Acquiring
Fund and the assumption by the Acquiring Fund of the liabilities
of the Acquired Fund; (D) no gain or loss will be recognized by
the shareholders of the Acquired Fund upon the receipt of the
shares of the Acquiring Fund in exchange for their shares of the
Acquired Fund; (E) the tax basis of the shares of the Acquiring
Fund received by the shareholders of the Acquired Fund will be
the same as the tax basis of the shares of the Acquired Fund
exchanged therefor; (F) the tax basis of the assets of the
Acquired Fund in the hands of the Acquiring Fund will be the
same as the tax basis of such assets in the hands of the
Acquired Fund immediately prior to the transfer; (G) the holding
period of the shares of the Acquiring Fund received by the
shareholders of the Acquired Fund will include the holding
period of the shares of the Acquired Fund exchanged therefor,
provided that at the time of the exchange the shares of the
Acquired Fund were held as capital assets; and (H) the holding
period of the Acquiring Fund for the assets of the Acquired Fund
transferred to it will include the period during which such
assets were held by the Acquired Fund.
(b) All necessary approvals, registrations and exemptions required
under federal and state laws will have been obtained.
E. MISCELLANEOUS
1. This Plan and the transactions contemplated hereby will be governed and
construed in accordance with the laws of the State of Maryland.
2. This Plan and the transactions contemplated hereby may be abandoned at
any time for any reason prior to the Closing Date upon the vote of a majority
of the Board of Directors of the Company.
3. At any time prior to or (to the fullest extent permitted by law) after
approval of this Plan by the shareholders of the Acquired Fund, the Company
may, upon authorization by the Board of Directors and with or without the
approval of shareholders of the Acquired Fund, amend any of the provisions of
this Plan.
A-4
<PAGE>
4. The expenses incurred in connection with the Reorganization will be borne
by the Acquiring Fund.
5. The Company, by consent of its Board of Directors, or an officer
authorized by such Board of Directors, may waive any condition to the
obligations of the Acquired Fund or the Acquiring Fund hereunder if, in its or
such officer's judgment, such waiver will not have a material adverse effect
on the interests of the shareholders of the Acquired Fund or the shareholders
of the Acquiring Fund.
A-5
<PAGE>
ANNEX I
SMITH BARNEY WORLD FUNDS, INC.
ARTICLES OF AMENDMENT
SMITH BARNEY WORLD FUNDS, INC., a Maryland corporation, having its principal
office in the City of Baltimore, Maryland (the "Company"), certifies to the
State Department of Assessments and Taxation that:
FIRST: The Charter of the Company is amended by (i) reclassifying all of the
shares of the Company's International Balanced Portfolio as shares of the
Company's International Equity Portfolio, and (ii) increasing the aggregate
number of authorized shares of the International Equity Portfolio by
125,000,000 shares.
SECOND: Upon effectiveness of these Articles of Amendment:
(a) All of the assets and liabilities belonging to the Company's
International Balanced Portfolio and attributable to its Class A, B, and L
shares, respectively, shall be conveyed, transferred and delivered to the
Company's International Equity Portfolio, and shall thereupon become and
be assets and liabilities belonging to the International Equity Portfolio
and attributable to its Class A, B, and L shares, respectively.
(b) Each of the issued and outstanding shares (and fractions thereof) of
the Company's International Balanced Portfolio and its Class A, B, and L
shares, respectively, will automatically, and without the need of any
further act or deed, be reclassified and changed to full and fractional
issued and outstanding shares of the Company's International Equity
Portfolio and of its Class A, B and L, shares, respectively, of equal
aggregate net asset value, in such number of such International Equity
Portfolio Class A, B, and L shares as shall be determined by multiplying
one (1) times the number obtained by dividing the net asset value of a
Class A, B, or L share, respectively, of the International Balanced
Portfolio by the net asset value of a Class A, B, or L share,
respectively, of the International Equity Portfolio, all determined as of
the close of regular trading on the New York Stock Exchange on the
effective date of these Articles of Amendment.
(c) Each unissued Class A, B, L, Y or Z share (or fraction thereof),
respectively, of the Company's International Balanced Portfolio will
automatically, and without the need for any further act or deed, be
reclassified and changed to such number of unissued Class A, B, L, Y or Z
shares (or fractions thereof), respectively, of the Company's
International Equity Fund as shall result, as of the effective time of
these Articles of Amendment and as a result hereof, in the total number of
unissued shares of the Company's International Equity Portfolio being
increased by 125,000,000 shares less the
A-6
<PAGE>
number of issued and outstanding shares of the Company's International
Equity Portfolio resulting from paragraph (b) of this Article SECOND.
(d) Open accounts on the share records of the Company's International
Equity Portfolio owned by each former holder of its International Balanced
Portfolio shares shall be established representing the appropriate number
of the International Equity Portfolio shares, of the appropriate class,
deemed to be owned by each such stockholder as a result of the
reclassification.
THIRD: This amendment does not increase the authorized capital stock of the
Company or the aggregate par value thereof. This amendment reclassifies and
changes the 125,000,000 authorized shares of the International Balanced
Portfolio to 125,000,000 additional authorized shares of the International
Equity Portfolio but does not amend the description of any class of stock as
set forth in the Charter. As a result of this amendment, the International
Equity Portfolio series of the Company has five classes of shares, which are
designated Class A, Class B, Class L, Class Y and Class Z, each consisting,
until further changed, of the lesser of (x) 375,000,000 shares or (y) the
number of shares that could be issued by issuing all of the shares of Common
Stock of the International Equity Portfolio series less the total number of
shares of all classes of Common Stock of the International Equity Portfolio
series then issued and outstanding. The shares of the International Equity
Portfolio series and of each class within such series shall have all of the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of
redemption of such series and such class as set forth in the Charter of the
Corporation.
FOURTH: Outstanding stock certificates representing issued and outstanding
Class A, B, or L shares, respectively, of the International Balanced Portfolio
of the Company immediately prior to these Articles of Amendment becoming
effective shall, upon these Articles becoming effective, be deemed to
represent the appropriate number of issued and outstanding shares of the same
respective class of the Company's International Equity Portfolio, calculated
as set forth in Article SECOND of these Articles. Stock certificates
representing shares of the International Equity Portfolio resulting from the
aforesaid change and reclassification need not be issued until stock
certificates representing the shares of the International Balanced Portfolio
so changed and reclassified, if issued, have been received by the Company or
its agent duly endorsed for transfer.
FIFTH: This amendment has been duly authorized and advised by the Board of
Directors of the Company and approved by the stockholders of the Company
entitled to vote thereon.
SIXTH: These Articles of Amendment shall be effective as of , 2000.
A-7
<PAGE>
IN WITNESS WHEREOF, SMITH BARNEY WORLD FUNDS, INC. has caused these Articles
of Amendment to be signed in its name and on its behalf by its , and
witnessed by its [Assistant] Secretary, as of the day of , 2000.
WITNESS: SMITH BARNEY WORLD FUNDS, INC.
By: _____________________________ By: _____________________________
Name Name:
[Assistant] Secretary Office:
THE UNDERSIGNED, , of Smith Barney World Funds, Inc.,
who executed on behalf of the Company the foregoing Articles of Amendment of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of said Company the foregoing Articles of Amendment to be the corporate
act of said Company and hereby certifies that to the best of his knowledge,
information and belief the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects under
the penalties of perjury.
---------------------------------------------------
Name:
Office:
A-8
PART B
The Fund's Statement of Additional Information is incorporated by reference to
Pre-Effective Amendment No. 1 to the Fund's Registration Statement on
Form N-14 filed On February 11, 2000.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Reference is made to Article IX of Registrant's Articles of Incorporation
for a complete
statement of its terms.
Registrant is a named assured on a joint insured bond pursuant to Rule 17g-1
of the Investment
Company Act of 1940, as amended. Other assureds include SSB Citi Fund
Management LLC (Registrant's
Adviser) and affiliated investment companies.
ITEM 16. EXHIBITS
Unless otherwise noted, all references are to the Registrant's Registration
Statement
on Form N-1A (the "Registration Statement") as filed with the SEC on
March 26, 1991 (File Nos. 33-
39564 and 811-06290).
(1) (a) Articles of Incorporation (1)
(1) (b) Articles Supplementary to Articles of Incorporation for
International Equity Portfolio (2)
(1) (c) Articles of Amendment to the Articles of Incorporation
for the Fund dated November 10, 1992 (3)
(1) (d) Articles Supplementary to Articles of Incorporation for
the Fund dated December 8, 1992 (3)
(1) (e) Articles Supplementary to Articles of Incorporation for
Pacific Portfolio and European Portfolio(10)
(1) (f) Articles Supplementary to Articles of Incorporation for
International Balanced Portfolio (11)
(1) (g) Form of Articles Supplementary to Articles of
Incorporation for Emerging Markets Portfolio(12)
(1) (h) Articles of Amendment to the Articles of Incorporation
for the Fund dated June 4, 1991(13)
(1) (i) Articles Supplementary to Articles of Incorporation for
the Fund dated July 13, 1994 (13)
(1) (j) Articles of Amendment to Articles of Incorporation for
the Fund dated November 3, 1994(13)
(1) (k) Articles of Amendment to Articles of Incorporation for
the Fund dated November 3, 1994(13)
(1) (l) Articles Supplementary to Articles of Incorporation for
the Fund dated November 3, 1994(13)
(1) (m) Articles Supplementary to Articles of Incorporation for
Emerging Markets Portfolio dated November 10, 1994(13)
(1) (n) Articles of Amendment for the Fund dated June 4, 1998 (18)
(2) (a) Bylaws (4)
(3) Not applicable.
(4) Form of Plan of Reorganization is filed herewith.
(5) Not applicable.
(6) (a) Form of Management Agreement for Global Government Bond Portfolio (16)
(6) (b) Form of Management Agreement for International Equity Portfolio (16)
(6) (c) Form of Management Agreement for Pacific Portfolio (16)
(6) (d) Form of Management Agreement for European Portfolio (16)
(6) (e) Form of Management Agreement for International Balanced Portfolio (16)
(6) (f) Form of Management Agreement for Emerging Markets Portfolio (16)
(6) (g) Form of Subadvisory Agreements(16)
(7) (a) Form of Distribution Agreement (16)
(7) (b) Selling Group Agreement (18)
(7) (c) Form of Distribution Agreement (17)
(8) Not applicable.
(9) Form of Custodian Agreement (15)
(10) (a) Form of Amended Plan of Distribution Pursuant to Rule 12b-1 (18)
(10) (b) Plan of Distribution Pursuant to Rule 12b-1for Global Government
Bond Portfolio (16)
(10) (c) Plan of Distribution Pursuant to Rule 12b-1for International Equit
y Portfolio (16)
(10) (d) Plan of Distribution Pursuant to Rule 12b-1 for Pacific Portfolio (16)
(10) (e) Plan of Distribution Pursuant to Rule 12b-1 for European Portfolio (16)
(10) (f) Plan of Distribution Pursuant to Rule 12b-1 for International
Balanced Portfolio (16)
(10) (g) Plan of Distribution Pursuant to Rule 12b-1 for Emerging Markets
Portfolio(16)
(10) (h) Rule 18f-3 Plan (18)
(11) Form of Opinion and Consent of Sullivan & Cromwell (19).
(12) Form of Tax Opinion and Consent of Sullivan & Cromwell filed herewith.
(13) (a) Form of Transfer Agency Agreement (16)
(14) (a) Consent of Independent Auditors (19)
(14) (b) Form of Opinion and Consent of Venable, Baetjer
and Howard, LLP, as to matters of Maryland law (19)
(15) Not applicable.
(16) Not Applicable.
(17) (a) Prospectus of the Registrant, dated February 28, 1999 (18)
(17) (b) Annual Report to Shareholders of the Registrant, dated October 31,
1999, is
incorporated by reference to Form N-30D, as filed on January 6, 2000 with the
Commission.
(17) (c) Semi-Annual Report to Shareholders of the Registrant, dated
April 30, 1999, is
incorporated by reference to Form N-30D, as filed on July 20, 1999, with the
Commission.
(17) (d) Form of Proxy Card (19).
Footnotes:
(1) Incorporated by reference to to the Fund's Registration
Statement on Form N-1A filed on March 26, 1991.
(2) Incorporated by reference to Post-Effective Amendment
No. 2 to the Fund's Registration Statement on Form N-1A filed
on September 24, 1991.
(3) Incorporated by reference to Post-Effective Amendment
No. 6 to the Fund's Registration Statement on Form N-1A filed
on December 21, 1992.
(4) Incorporated by reference to Pre-Effective Amendment
No. 1 to the Fund's Registration Statement on Form N-1A filed
on May 27, 1991.
(5) Intentionally left blank.
(6) Incorporated by reference to Pre-Effective Amendment
No. 2 to the Fund's Registration Statement on Form N-1A filed
on June 14, 1991.
(7) Intentionally left blank.
(8) Incorporated by reference to Post-Effective Amendment
No. 3 to the Fund's Registration Statement on Form N-1A filed
on January 17, 1992.
(9) Incorporated by reference to Post-Effective Amendment
No. 8 to the Fund's Registration Statement on Form N-1A filed
on November 5, 1993.
(10) Incorporated by reference to Post-Effective Amendment
No. 9 to the Fund's Registration Statement on Form N-1A filed
on January 4, 1994.
(11) Incorporated by reference to Post-Effective Amendment
No. 12 to the Fund's Registration Statement on Form N-1A filed
on July 27, 1994.
(12) Incorporated by reference to Post-Effective Amendment
No. 14 to the Fund's Registration Statement on Form N-1A filed
on October 31, 1994.
(13) Incorporated by reference to Post-Effective Amendment
No. 15 to the Fund's Registration Statement on Form N-1A filed
on February 28, 1995.
(14) Incorporated by reference to Post-Effective Amendment
No. 17 to the Fund's Registration Statement on Form N-1A filed
on February 28, 1996.
(15) Incorporated by reference to Post-Effective Amendment
No. 18 to the Fund's Registration Statement on Form N-1A filed
on December 27, 1996.
(16) Incorporated by reference to Post-Effective Amendment
No. 19 to the Fund's Registration Statement on Form N-1A filed
on February 21, 1997.
(17) Incorporated by reference to Post-Effective Amendment
No. 22 to the Fund's Registration Statement on Form N-1A filed
on December 29, 1998.
(18) Incorporated by reference to Post-Effective Amendment
No. 23 to the Fund's Registration Statement on Form N-1A filed
On February 25, 1999.
(19) Incorporated by reference to Pre-Effective Amendment
No. 1 to the Fund's Registration Statement on Form N-14 filed
On February 11, 2000.
ITEM 17. UNDERTAKINGS
(1)The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is
a part of this registration statement by any person or party who is deemed
to be
an underwriter within the meaning of Rule 145(c) of the Securities Act [17 CFR
230.145c], the reoffering prospectus will contain the information called for by
the applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2)The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall
be deemed
to be the initial bonafide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Registration Statement on Form N-14 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 14th day of February, 2000.
SMITH BARNEY WORLD FUNDS, INC. - INTERNATIONAL PORTFOLIO
By: /s/Heath B. McLendon
Heath B. McLendon
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this 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, 2/14/00
Heath B. McLendon Chief Executive Officer,
and President
/s/Lewis E. Daidone Senior Vice President 2/14/00
Lewis E. Daidone and Treasurer
***/s/Victor K. Atkins
Victor K. Atkins Director 2/14/00
***/s/Abraham E. Cohen
Abraham E. Cohen Director 2/14/00
***/s/Robert A. Frankel
Robert A. Frankel Director 2/14/00
**/s/Michael Gellert
Michael Gellert Director 2/14/00
***/s/Rainer Greeven
Rainer Greeven Director 2/14/00
*/s/Susan M. Heilbron
Susan M. Heilbron Director 2/14/00
***/s/Maurits E. Edersheim
Maurits E. Edersheim Advisory Director 2/14/00
* By: /s/ Christina Sydor
Christina Sydor
Pursuant to a Power of Attorney dated December 3, 1991
** By: /s/ Christina Sydor
Christina Sydor
Pursuant to Power of Attorney dated July 30, 1999
***
By: /s/ Christina Sydor
Christina Sydor
Pursuant to Power of Attorney Dated September 12, 1991
EXHIBIT INDEX
(4) Form of Plan of Reorganization (included as Exhibit A to the Registrant's
Prospectus/Proxy Statement contianed in Part A of this Registration Statement).
(12) Form of Tax Opinion and Consent of Sullivan & Cromwell.
Cover
February 14, 2000
International Balanced Portfolio,
Smith Barney World Funds, Inc.,
388 Greenwich Street,
New York, New York 10013.
International Equity Portfolio,
Smith Barney World Funds, Inc.,
388 Greenwich Street,
New York, New York 10013.
Ladies and Gentlemen:
We have acted as counsel to Smith Barney World
Funds, Inc., a Maryland corporation (the "Fund"),
in connection with the Plan of Reorganization (the
"Agreement"), included as Exhibit A to the Fund's
Registration Statement on Form N-14, between the
International Balanced Portfolio ("Target") and the
International Equity Portfolio ("Acquiror"), each a series
of the Fund, and we render this opinion to you pursuant to
Section D2(a)(ii) of the Agreement. Capitalized terms not
defined herein have the meanings specified in the Agreement.
International Balanced Portfolio
International Equity Portfolio -2-
For purposes of the opinion set forth below, we
have relied, with your consent, upon the accuracy and
completeness of (i) the statements and representations
contained in the Agreement and in the Prospectus/Proxy
Statement to be distributed to the shareholders of Target in
connection with the Reorganization and (ii) the statements
and representations contained in the letter of
representation from the Fund to us dated the date hereof.
With your consent, we have not attempted to verify
independently the accuracy of any information in these
documents and have assumed that the statements (including
the facts underlying statements phrased as "expectations" or
"anticipations") and representations contained therein will
be true on the Closing Date. In addition, in connection
with this opinion, we have assumed, with your consent, that
the Reorganization will be effected in accordance with the
Agreement.
On the basis of the foregoing, and our
consideration of such other matters as we have considered
necessary, we advise you that, in our opinion, for U.S.
federal income tax purposes:
International Balanced Portfolio
International Equity Portfolio -3-
1. The Reorganization will constitute a
reorganization within the meaning of Section 368(a) of the
Code, and each of Target and Acquiror will be a "party to
the reorganization" within the meaning of Section 368(b) of
the Code.
2. Acquiror will not recognize gain or loss upon
the receipt of Target assets in exchange solely for Acquiror
shares and the assumption of all stated Target liabilities.
3. Target will not recognize gain or loss upon
the transfer of Target assets in exchange solely for
Acquiror shares and the assumption of all stated Target
liabilities.
4. Target shareholders will not recognize gain or
loss upon the exchange, pursuant to the Reorganization, of
their Target shares solely for Acquiror shares.
5. The basis of Acquiror shares to be received by
Target shareholders pursuant to the Reorganization will be
the same as the basis of Target shares surrendered in
exchange therefor.
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6. The basis of Target assets to be acquired by
Acquiror will be the same as the basis of such assets to
Target immediately prior to the Reorganization.
7. The holding period of Acquiror shares to be
received by Target shareholders will include the holding
period of Target shares surrendered in exchange therefor
(provided that Target shares are capital assets in the hands
of such shareholders on the Closing Date).
8. The holding period of Target assets to be
acquired by Acquiror will include Target's holding period
therefor.
We express no opinion as to the effect of the
Reorganization on Acquiror, Target or Target shareholders in
respect of any asset as to which unrealized gain or loss is
required to be recognized for U.S. federal income tax
purposes at the end of each year under a mark-to-market
system of accounting.
The tax consequences described above may not apply
to Target shareholders that acquired shares upon the
exercise of employee stock options or otherwise as
compensation, that hold their shares as part of a "straddle"
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or "conversion transaction" or that are insurance companies,
securities dealers, financial institutions or foreign
persons.
Very truly yours,
/s/ Sullivan & Cromwell
Sullivan & Cromwell
