SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
SMITH BARNEY SHEARSON SERIES FUND, ON BEHALF OF
. . . . . . . . . DIVERSIFIED STRATEGIC INCOME PORTFOLIO . . . . . . . . . .
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to
Exchange Act Rule 0-11:1
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1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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DIVERSIFIED STRATEGIC INCOME PORTFOLIO
A SUBTRUST OF SMITH BARNEY SHEARSON SERIES FUND
Two World Trade Center
New York, New York 10048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on March [21], 1994
To the Shareholders of
Diversified Strategic Income Portfolio:
Notice is hereby given that a Special Meeting of Shareholders of
Diversified Strategic Income Portfolio (the "Fund"), an investment
series organized as a subtrust of Smith Barney Shearson Series Fund
(the "Trust"), will be held at the offices of the Fund, Two World
Trade Center, 100th floor, New York, New York 10048, at [2:00 p.m.],
on [March 21,] 1994, for the following purposes:
1. To approve or disapprove a new sub-investment advisory
agreement between the Trust, on behalf of the Fund, and Smith Barney
Global Capital Management, Inc. ("SBGCM"), containing substantially
the same terms and conditions as the Fund's current sub-investment
advisory agreement (Proposal 1).
2. To transact such other business as may properly come
before the Special Meeting or any adjournment thereof.
The Board of Trustees of the Trust has fixed the close of
business on [March ___, 1994] as the record date for the
determination of shareholders of the Fund entitled to notice of and
to vote at the Special Meeting.
By Order of the Board of
Trustees
Francis J. McNamara, III
Secretary
[March __, 1994]
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
CARD IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN
THE UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF THE
PROXY CARD ARE SET FORTH ON THE INSIDE COVER OF THIS NOTICE. IT IS
IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
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:
Registration Valid Signature
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
i/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, Jr.
(2) John B. Smith
John B. Smith, Jr.,
Executor
DIVERSIFIED STRATEGIC INCOME PORTFOLIO,
A SUBTRUST OF SMITH BARNEY SHEARSON SERIES FUND
Two World Trade Center
New York, New York 10048
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on March [21], 1994
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation
of proxies by
the Board of Trustees (the "Board") of Smith Barney Shearson Series
Fund with respect to the
Diversified Strategic Income Portfolio, for use at a Special Meeting
of Shareholders of the Fund
to be held at [2:00 p.m.] on [March 21,] 1994, at the offices
of the Fund, Two World Trade
Center, 100th floor, New York, New York 10048, and at
any adjournments thereof (collectively,
the "Special Meeting"). A Notice of Special Meeting of
Shareholders and a proxy card accompany
this Proxy Statement. Proxy solicitations will be made
primarily by mail, but proxy
solicitations may also be made by telephone,
telegraph or personal interviews conducted by:
officers and employees of the Fund; Smith Barney Shearson Inc.
("Smith Barney Shearson"), the
distributor of the shares of the Fund;
The Shareholder Services Group, Inc. ("TSSG"), a
subsidiary of First Data Corporation, the transfer
agent of the Fund; and/or The Boston Company
Advisors, Inc. ("Boston Advisors"), the administrator of the Fund.
The costs of proxy
solicitation and expenses incurred in connection
with the preparation of this Proxy Statement
and its enclosures will be paid by Smith Barney Shearson.
Smith Barney Shearson will also
reimburse brokerage firms and others for their expenses
in forwarding solicitation material to
the beneficial owners of Fund shares.
The Trust currently issues one class of shares of
beneficial interest (the "Shares") in
respect of the Fund at par value of $.001 per Share.
If the enclosed proxy is properly executed
and returned in time to be voted at the Special Meeting,
the Shares represented by the proxy
will be voted in accordance with the instructions marked thereon.
Unless instructions to the
contrary are marked on the proxy, it will be voted
FOR the matters listed in the accompanying
Notice of Special Meeting of Shareholders.
Any shareholder who has given a proxy has the right
to revoke it at any time prior to its exercise
either by attending the Special Meeting and
voting his or her Shares in person, or by submitting a
letter of revocation or a later-dated
proxy to the Fund at the above address prior to the
date of the Special Meeting. For purposes
of determining the presence of a quorum for
transacting business at the Special Meeting,
abstentions and broker "non-votes" (i.e.,
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, abstention and broker "non-votes" will
have the effect of a "no" vote for
purposes of obtaining the requisite approval of each proposal.
In the event that a quorum is not present at the Special
Meeting, or in the event that a
quorum is present but sufficient votes to approve any of the
proposals are not received, the
persons named as proxies on the enclosed proxy card
may propose one or more adjournments of the
Special Meeting to permit further solicitation of proxies.
In determining whether to adjourn
the Special Meeting, the following factors may be considered:
the nature of the proposal that
is the subject of the Special Meeting, 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 adjournment will
require the affirmative vote of a majority of these Shares
represented at the Special Meeting in
person or by proxy. A shareholder vote may be taken on one or
more of the proposals in this
Proxy Statement prior to any such adjournment if sufficient
votes have been received for
approval. Under the Trust's First Amended and Restated Master
Trust Agreement dated November 5,
1992, as amended ("Master Trust Agreement"), a quorum of
shareholders is constituted by the
presence in person or by proxy of the holders of a
majority of the outstanding Shares of the
Fund entitled to vote at the Special Meeting.
The Board has fixed the close of business on [March __, 1994]
as the record date (the
"Record Date") for the determination of shareholders of the
Fund entitled to notice of and to
vote at the Special Meeting. At the close of business on the Record Date,
there were
____________ Shares of the Fund outstanding. At the Record Date,
to the knowledge of the Fund
and the Board, no single shareholder or "group"
(as that term is used in Section 13(d) of the
Securities Exchange Act of 1934), except as set forth in the table
below, beneficially owned
more than 5% of the outstanding Shares of the Fund.
As of the Record Date, the officers and
Board Members beneficially owned less than 1% of the
Shares of the Fund. At [___, 1994], no
shares of SBGCM or its parent corporation, The Travelers Inc.,
were held by Board Members.
Name and Address
Amount and (Percentage)
of Shares Beneficially Owned
TO BE PROVIDED
All of the outstanding Shares are held of record by IDS Life
Insurance Company ("IDS Life")
for the benefit of owners of annuity contracts
("Contract Owners") issued by IDS Life. IDS
Life's address is IDS Tower 10, Minneapolis,
Minnesota 55440-0010. Each Share is entitled to
one vote, and any fractional Share is entitled
to a fractional vote. IDS Life will vote the
Shares as directed by the Contract Owners who
have allocated purchase payments to annuity
contract sub-accounts investing in the Fund.
Each Contract Owner has the right to direct the
votes of that number of Shares of the Fund
determined by multiplying the total number of the
Fund's outstanding Shares by a fraction,
the numerator of which is the number of units held by
such Contract Owner in the Fund on [____, 1994] and
the denominator of which is the total number
of units of the Fund outstanding on [_____, 1994].
Units reflect client ownership in the
separate account, while Shares reflect ownership in the Fund.
The value of units is based on
the net asset value of the underlying portfolio
adjusted for separate account fees. If proper
instructions are not received from a Contract Owner,
the Shares with respect to which the
Contract Owner has the right to direct votes will
be voted by IDS Life in the same ratio as
those Shares for which proper instructions were
received from other Contract Owners. In
addition, IDS Life will vote the Shares for which
it has voting rights in the same proportion as
the votes for which it has received proper instructions.
In order that your Shares may be represented at the Special Meeting,
you are requested to:
- indicate your instructions on the enclosed proxy card;
- date and sign the proxy card;
- mail the proxy card promptly in the enclosed envelope,
which requires no postage if
mailed in the United States; and
- allow sufficient time for the proxy card to be received
on or before 1:30 p.m., [March
21, 1994.]
As a business trust formed under the laws of the
Commonwealth of Massachusetts, the Trust
is not required to hold annual shareholder
meetings but may hold special meetings as required or
deemed desirable. As indicated above, the
Special Meeting is being called to consider a new
sub-investment advisory contract for the Fund.
The Board recommends an affirmative vote on Proposal 1.
PROPOSAL 1
TO APPROVE OR DISAPPROVE A NEW SUB-INVESTMENT ADVISORY
AGREEMENT BETWEEN SMITH BARNEY
GLOBAL CAPITAL MANAGEMENT, INC. AND THE TRUST
ON BEHALF OF FUND, CONTAINING SUBSTANTIALLY THE
SAME TERMS AND CONDITIONS AS THE FUND'S
CURRENT SUB-INVESTMENT ADVISORY AGREEMENT.
SUMMARY OF PROPOSAL
For the reasons and based on an extensive
analysis of factors described below, the Trustees
of the Trust unanimously determined,
subject to approval by the shareholders of the Fund, to
enter into a new sub-investment advisory agreement
(the "New Agreement") between the Fund and
SBGCM, a subsidiary of Smith Barney Shearson.
Lehman Brothers Global Asset Management, Ltd.
("LBGAM") is currently the Fund's sub-investment
adviser under an agreement (the "Current
Agreement") that will terminate on March 21, 1994,
pursuant to notice duly given by the Board of
Trustees of the Trust.
The New Agreement contains substantially the same terms and conditions,
including the same sub-investment advisory fee,
found in the Current Agreement. If approved by
shareholders of the Fund, the New Agreement would
commence on [March 21, 1994] and would
continue initially for a two year period and
would continue automatically for successive annual
periods thereafter; provided such continuance is
approved at least annually by: (a) a majority
of the Board who are not interested persons of the
Trust (as the term is used in the Investment
Company Act of 1940, as amended (the "1940 Act"))
and (b) a majority of the full Board of
Trustees or a majority of the outstanding
voting securities of the Fund, as defined in the 1940
Act.
THE PROPOSED ADVISER
As of April 29, 1988, SBGCM commenced managing
portfolios of clients in the international
securities markets, particularly in the fixed income area.
Prior to April 29, 1988,
international bond portfolio management
services were conducted through Smith Barney, Harris
Upham International, Inc., a London based
brokerage affiliate. In particular, SBGCM offers
three broad types of international bond portfolio
management: global; non-base currency (e.g.,
non-dollar, non-Franc, etc.); and international
dollar (i.e., Eurodollar and "Yankee") bonds.
As of June 17, 1991, pursuant to a sub-investment
advisory agreement with Smith, Barney
Advisers, Inc., SBGCM commenced managing a
portfolio of Smith Barney World Funds, Inc., an open-
end management investment company registered under the 1940 Act
which had aggregate assets as of
[March 30, 1993] in excess of [$426,790,000.]
Under this sub-investment advisory agreement,
SBGCM provides portfolio advice and assistance with
respect to the selection, acquisition,
holding and disposal of securities.
As sub-investment adviser, SBGCM receives an annual fee of:
.45% of the fund's net assets up to $20 million;
.40% of the next $10 million; 30% of the next
$20 million; and .20% of the fund's net assets in excess of $50 million.
An audited balance sheet of SBGCM as of
[December 31, 1992] is set forth as Exhibit A to
this Proxy Statement. In addition, an unaudited
balance sheet of SBGCM as of [December 31,
1993], is set forth as Exhibit B to this Proxy Statement.
SBGCM has represented that since
[December 31, 1993] there has been no material
adverse change in its financial condition.
The name, position with SBGCM and principal
occupation of each executive officer and
director of SBGCM are set forth in the following table.
The business address of SBGCM and each
officer and director is 10 Piccadilly, London, United Kingdom.
Name Position with SBGCM Principal Occupation
Jill B. Jordan Director Director, SBGCM
Bruce D. Sargent President; Chairman and Director
Director and Executive Vice President,
Smith Barney Shearson
J. Paul Horne Director Director, SBGCM;
International Economist, Smith Barney
Shearson
Gabriel J. Irwin Director; Senior Vice President,
Director, Senior Vice President,
Compliance Director Compliance Director, SBGCM
Robert Druskin Director Director, Vice Chairman and
Chief Administrative Officer of
Smith Barney Shearson
Jeffrey B. Lane Director Director and Vice Chairman
of Smith Barney Shearson
A. George Saks Director; Secretary Executive Vice President,
Secretary and General Counsel,
Smith Barney Shearson
J. Simon Wells Director; Senior Vice President Director and Senior Vice
President, SBGCM
EVALUATION BY THE BOARD AND REASONS FOR THE PROPOSAL
On January 19, 1994, the Trustees of the Trust met in person at a
meeting called for the
purpose of considering, among other things,
the New Agreement with SBGCM. It also considered,
at that time, continuation of the Fund's Current
Agreement with LBGAM and various other possible
alternatives. In advance of the meeting, the Board reviewed
materials furnished by Smith Barney
Shearson and SBGCM. Additional materials were
presented at the meeting and were described in
detail and reviewed carefully by the Board.
The written material described each of SBGCM and
LBGAM and their affiliates, senior personnel,
portfolio managers, analysts, economists and
others, their methods of operation,
investment philosophies, performance records and financial
conditions. Representatives of LBGAM and
SBGCM met separately with the Board to discuss in
depth the written materials and to respond to
questions from the Board and its independent
counsel. The Board reviewed and considered
LBGAM's investment performance on behalf of the Fund
and the past investment performance of
SBGCM in managing portfolios of global bonds with
objectives and policies similar to those of the Fund.
The Board of Trustees of the Trust determined
to terminate the Fund's agreement with LBGAM
and to enter into the New Agreement with SBGCM,
subject to the approval of shareholders. In so
doing, a variety or factors were evaluated.
It was asserted that management of the Fund
requires a close relationship between the Fund's
officers and its sub-investment adviser. To
realize its investment objective, the Fund
utilizes a complex asset allocation strategy that is
highly dependent upon the coordination of
the various portfolio components. As economic factors
fluctuate, the proportion of the Fund's
portfolio invested in each of these sectors changes and
frequently requires immediate adjustment.
At the time of the Fund's inception, LBGAM was an
integrated part of Shearson Lehman Brothers Inc.'s
asset management structure and Mr. Heath B.
McLendon, the Fund's Chief Executive Officer,
worked closely with LBGAM. However, Mr. McLendon
no longer is associated with LBGAM.
Rather, he now has a close association with SBGCM and is
involved directly in the management of the
Smith Barney Shearson-distributed mutual funds. It
was also noted that LBGAM and its
affiliates are currently advising and sponsoring a series of
mutual funds that are being offered, and will
continue to be offered, to retail and other
investors through it own distribution network,
and that the availability of these LBGAM-advised
funds could be confusing to investors in the Fund
and other mutual funds sponsored by Smith
Barney Shearson.
The Board reviewed the past performance records
of LBGAM and SBGCM over relevant periods of
time as well as the background and experience of
the various officers and managers employed by
those companies. The Board compared their past
performance and evaluated those records against
various indices and industry standards.
The Board was satisfied that both LBGAM and SBGCM could
provide high quality advisory and management services to the Fund.
The Board recognized that, currently, most Shares
of the Fund are sold under an arrangement
pursuant to which the Fund's distributor,
Smith Barney Shearson, advances the cost of
distribution and seeks to recover that cost
through a combination of contingent deferred sales
charges and distribution fees paid under a
plan of distribution adopted pursuant to Rule 12b-1
under the 1940 Act. Smith Barney Shearson informed
the Trustees that this method of
distribution, while preferred by investors,
was expensive to the distributor on a current basis
and a distributor would rarely agree to offer
its services under these circumstances to a fund
to which it or its affiliates did not serve
as investment adviser. Prior to July 30, 1993,
Shearson Lehman Brothers Inc., served as the
Fund's distributor and its affiliate, LBGAM, served
as the Fund's investment adviser.
As of that date, however, the retail brokerage and investment
advisory businesses (other than LBGAM) of
Shearson Lehman Brothers Inc. were transferred to
Smith Barney Shearson (known at the time as
"Smith Barney, Harris Upham & Co., Inc.") and Smith
Barney Shearson was selected by the Trustees to
serve as the Fund's distributor. Smith Barney
Shearson is not affiliated with LBGAM.
Finally, the Board considered whether SBGCM,
if serving as the Fund's sub-investment
adviser, could facilitate the Fund's integration
with other components of the Smith Barney
Shearson group of funds and would enhance
the support and services received by the Fund's
shareholders. The Board considered the ability
of Smith Barney Shearson to arrange
opportunities for Smith Barney Shearson
Financial Consultants to meet SBGCM portfolio mangers in
person, by telephone and otherwise to become
familiar with the management style, philosophy and
investment outlook of the Fund's sub-investment adviser.
After carefully evaluating the foregoing materials and factors,
and after meeting in
executive session with independent counsel,
the Trustees of the Trust who were not interested
persons of the Trust approved, subject to shareholder
approval, the New Agreement with SBGCM
containing substantially identical terms and
conditions to the Current Agreement. The Board
then reconvened and approved the New Agreement and
recommended its approval by the Fund's
shareholders.
THE PROPOSED AGREEMENT
A copy of the form of New Agreement is set forth as
Exhibit C to this Proxy Statement.
Under its terms, SBGCM, subject to the
supervision and approval of the Fund's foreign investment
adviser and Board, would manage the Fund's
foreign investments in accordance with the investment
objectives and policies stated in the Fund's
Prospectus and Statement of Additional Information.
As sub-investment adviser, SBGCM would be
responsible for making investment decisions concerning
foreign assets, supplying investment research
and portfolio management services and placing
orders to purchase and sell foreign assets on
behalf of the Fund. SBGCM would receive a fee
that is computed daily and paid monthly at
the annual rate of .15% of the value of the Fund's
average daily net assets. With the
exception of the identity of the sub-investment adviser and
the commencement and termination dates,
the provisions of the New Agreement and the Current
Agreement with LBGAM are virtually identical.
Under the terms of the New Agreement,
SBGCM would bear all expenses in connection with its
performance. Other expenses incurred in
the operation of the Fund would be borne by the Fund,
including: taxes, interest, brokerage fees and
commission, if any; distribution and shareholder
service fees; fees of the Board members who are
not officers, directors, shareholders or
employees of Smith Barney Shearson, or any of
its affiliates; SEC fees and state blue sky
qualification fees; charges of custodian
and transfer and dividend disbursing agents; certain
insurance premiums; outside auditing and
legal expenses; cost of investor services (including
allocable telephone and personnel expenses);
costs of preparation and printing of prospectuses
and statements of additional information for
regulatory purposes and for distribution to
shareholders; costs of preparation and
printing of shareholders' reports; costs incurred in
connection with meetings of the shareholders
of the Fund and of the officers of the Fund or
Board and any extraordinary expenses.
If, in any fiscal year, the aggregate expenses
of the Fund (including fees pursuant to the
New Agreement (and the Fund's administration
agreement) but excluding distribution and
shareholder service fees, interest, taxes,
brokerage and, if permitted by state securities
commissions, extraordinary expenses)
exceed the expense limitation of any state having
jurisdiction over the Fund, SBGCM will
reduce its fee to the Fund for the excess expense to the
extent required by state law in the same
proportion as its fee bears to the Fund's aggregate
fees for investment advice and administration.
This expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
The New Agreement provides that in the absence of
willful misfeasance, bad faith, gross
negligence or reckless disregard for its
obligations thereunder, SBGCM shall not be liable for
any act or omission in the course of or
in connection with the rendering of its services
thereunder.
REQUIRED VOTE
Approval of the New Agreement requires the
affirmative vote of a "majority of the
outstanding voting securities" of the Fund.
The term "majority of the outstanding voting
securities" of the Fund, as defined in the
1940 Act, means the affirmative vote of the lesser
of: (a) 67% of the voting securities of
the Fund present at the Special Meeting if more than
50% of the outstanding Shares are
present in person or by proxy at
the Special Meeting; and (b)
more than 50% of the outstanding
voting securities of the Fund.
If the New Agreement is not approved by
the shareholders of the Fund, SBGCM will serve as
sub-investment adviser to the Fund
for a period of time pending approval of such agreement or a
different sub-investment advisory agreement
or other definitive action by the shareholders,
provided that the compensation received
by SBGCM during that period is not greater than the
amount that would have been received
under the Fund's agreement with LBGAM.
Proxies solicited by the Board for the Special
Meeting will not be voted for approval of
the New Agreement, or any other matter to be
voted on by the shareholders, unless: (a) (i) in
the judgment of the Board there has been
no material adverse change in the financial condition
of SBGCM between the date of the uncertified
balance sheet and the most recently completed
quarter and (ii) the Fund shall have
received a certificate of the Chairman, President or a
Senior Vice President of SBGCM,
dated the day on which such vote is to be taken, that, to the
knowledge of that officer, since the
date of the most recently completed quarter there has been
no material adverse change in the
financial condition of SBGCM unless such material adverse
change has been disclosed to shareholders
in additional proxy solicitation materials; or (b) the
Fund shall have mailed to all
shareholders of record a certified balance sheet of SBGCM and
given the shareholders an opportunity
to revoke any proxies previously furnished.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund is not generally required to hold
annual or special meetings of the shareholders.
Shareholders wishing to submit proposals
for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their
written proposals to the Secretary of the Fund, c/o The
Boston Company Advisors, Inc., Exchange Place, Boston, MA 02109.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the
Fund's outstanding voting securities (as defined
in the 1940 Act) may require the calling of a
meeting of the Fund's shareholders for the
purpose of voting on the removal of any
Board Member. Meetings of the Fund's shareholders for
any other purpose will also be called by
the Board when requested in writing by shareholders
holding at least 10% of the shares
then outstanding or, if the Board Members shall fail to call
or give notice of any meeting of shareholders
for a period of 30 days after such application,
shareholders holding at least 10% of the
shares then outstanding may call and give notice of
such meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any
other business at the Special Meeting other than
as described in this Proxy Statement, nor is
the Board aware that any shareholder intends to do
so. If, however, any other matters are
properly brought before the Special Meeting, the persons
named in the accompanying proxy card
will vote thereon in accordance with their judgment.
[March __, 1994]
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE
MEETING ARE THEREFORE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE PROXY AS SOON AS POSSIBLE IN
THE ENCLOSED POSTAGE PAID ENVELOPE.
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the
manner directed by the undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
Please refer to the Proxy Statement for a discussion of the Proposal.
1. To approve or disapprove a new investment advisory FOR * AGAINST *
ABSTAIN *
agreement between Smith Barney Shearson Series Fund,
on behalf of its Diversified Strategic
Income Portfolio, and Smith Barney Global Capital
Management, Inc., containing substantially the
same terms and conditions as the Portfolio's current
investment advisory agreement
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
DIVERSIFIED STRATEGIC INCOME PORTFOLIO PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Diversified
Strategic Income Portfolio ("the Fund"), of
Smith Barney Shearson Series Fund, a Massachusetts
business trust, hereby appoints Heath B.
McLendon, Richard P. Roelofs, Francis J. McNamara, III
and Lee D. Augsburger attorney and
proxies for the undersigned with full powers of
substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned
all shares of the Fund that the
undersigned is entitled to vote at the Special
Meeting of Shareholders of the Fund to be held at
the offices of the Fund, Two World Trade Center,
New York, New York, on [March 21, 1994] at
[2:00 p.m.] and any adjournment or adjournments thereof.
The undersigned hereby acknowledges
receipt for the Notice of Special Meeting and
Proxy Statement dated [March __, 1994] and hereby
instructs said attorney and proxies to vote
said shares as indicated hereon. In their
discretion, the proxies are authorized to vote
upon such other business as may property come
before the Special Meeting.
A majority of the proxies present and acting at the Special Meeting
in person or by substitute (or, if only one shall be so
present, then that one,) shall have and
may exercise all the power and authority of
said proxies hereunder. The undersigned hereby
revokes and proxy previously given.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign this Proxy.
When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your
full title.
DATE: _________________________________________
_______________________________________________
_______________________________________________
Signature(s) (Title(s), if applicable)
shared\domestic\clients\shearson\funds\ssf\proxy1.doc
shared\domestic\clients\shearson\funds\ssf\prxycrd1.doc
SUB-INVESTMENT ADVISORY AGREEMENT
SMITH BARNEY SHEARSON SERIES FUND
(Smith Barney Shearson Diversified Strategic Income Portfolio)
__________________, 1993
Lehman Brothers Global Asset Management Limited
Two Broadgate
London EC2M 7HA
United Kingdom
Dear Sirs:
Smith Barney Shearson Series Fund (the "Company"), a trust organized
under the laws of the Commonwealth of Massachusetts and the Greenwich Street
Advisors Division of Mutual Management Corp. (the "Adviser"), each confirms
its agreement with Lehman Brothers Global Asset Management Limited (the "Sub-
Adviser"), as follows:
1. Investment Description; Appointment
The Company desires to employ its capital relating to its Diversified
Strategic Income Portfolio (the "Portfolio") by investing and reinvesting in
investments of the kind and in accordance with the investment objective(s),
policies and limitations specified in its Master Trust Agreement dated, as
amended from time to time (the "Master Trust Agreement"), in the prospectus
(the "Prospectus") and the statement of additional information (the
"Statement") filed with the Securities and Exchange Commission as part of the
Company's Registration Statement on Form N-1A, as amended from time to time,
and in the manner and to the extent as may from time to time be approved by
the Board of Trustees of the Company (the "Board"). Copies of the Prospectus,
the Statement and the Master Trust Agreement have been or will be submitted to
the Sub-Adviser. The Company agrees to provide copies of all amendments to
the Prospectus, the Statement and the Master Trust Agreement to the Sub-
Adviser on an on-going basis. The Company employs the Adviser as the
investment adviser to the Portfolio, and the Company and the Adviser desire to
employ and hereby appoint the Sub-Adviser to act as the sub-investment Sub-
Adviser to the Portfolio. The Sub-Adviser accepts the appointment and agrees
to furnish the services for the compensation set forth below.
2. Services as Sub-Investment Adviser
Subject to the supervision, direction and approval of the Board of the
Company and the Adviser, the Sub-Adviser will (a) manage the Portfolio's
holdings in accordance with the Portfolio's investment objective(s) and
policies as stated in the Master Trust Agreement, the Prospectus and the
Statement; (b) make investment decisions concerning foreign assets for the
Portfolio; (c) place purchase and sale orders for portfolio transactions for
foreign assets on behalf of the Portfolio; and (d) employ professional
portfolio managers and securities analysts who provide research services to
the Portfolio. In providing those services, the Sub-Adviser will conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Portfolio's foreign assets.
3. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Portfolio, the Sub-Adviser will seek the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-
Adviser will consider factors it deems relevant, including, but not limited
to, the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and on
a continuing basis. In selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, the Sub-
Adviser is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of
1934), provided to the Portfolio and/or other accounts over which the Sub-
Adviser or its affiliates exercise investment discretion.
4. Information Provided to the Company
The Sub-Adviser will keep the Company informed of developments
materially affecting the Portfolio, and will, on its own initiative, furnish
the Company from time to time with whatever information the Sub-Adviser
believes is appropriate for this purpose.
5. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Adviser will pay the Sub-Adviser on the first business day of each month a
fee for the previous month at the annual rate of .15 of 1.00% of the
Portfolio's average daily net assets. The Sub-Adviser shall have no right to
obtain compensation directly from the Company for services provided hereunder
and agrees to look solely to the Adviser for payment of fees due. The fee for
the period from the Effective Date (defined below) of the Agreement to the end
of the month during which the Effective Date occurs shall be prorated
according to the proportion that such period bears to the full monthly period.
Upon any termination of this Agreement before the end of a month, the fee for
such part of that month shall be prorated according to the proportion that
such period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement. For the purpose of determining fees
payable to the Sub-Adviser, the value of the Portfolio's net assets shall be
computed at the times and in the manner specified in the Prospectus and/or the
Statement.
6. Expenses
The Sub-Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Portfolio will bear
certain other expenses to be incurred in its operation, including, but not
limited to, investment advisory, sub-advisory and administration fees; fees
for necessary professional and brokerage services; fees for any pricing
service; the costs of regulatory compliance; and costs associated with
maintaining the Company's legal existence and shareholder relations.
7. Reduction of Fee
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement and the Portfolio's investment advisory
agreement, but excluding interest, taxes, brokerage and extraordinary
expenses) exceed the expense limitation of any state having jurisdiction over
the Portfolio, the Sub-Adviser will reduce its fee by the proportion of such
excess expense equal to the proportion that its fee thereunder bears to the
aggregate of fees paid by the Portfolio for investment advice and
administration in that year, to the extent required by state law. A fee
reduction pursuant to this paragraph 7, if any, will be estimated, reconciled
and paid on a monthly basis.
8. Standard of Care
The Sub-Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2 and 3 above. The Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Portfolio and the Adviser in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the
Adviser, the Company or to the shareholders of the Portfolio to which the Sub-
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason
of the Sub-Adviser's reckless disregard of its obligations and duties under
this Agreement.
9. Term of Agreement
This Agreement shall become effective as of the "Closing Date" as that
term is defined in that certain Asset Purchase Agreement executed among Smith
Barney, Harris Upham & Co. Incorporated, Primerica Corporation and Shearson
Lehman Brothers Inc., dated March 12, 1993 (the "Effective Date") and shall
continue for an initial two-year term and shall continue thereafter so long as
such continuance is specifically approved at least annually by (i) the Board
of the Company or (ii) a vote of a "majority" (as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the
Portfolio's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board who are not
"interested persons" (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable, without penalty, on 60
days' written notice, by the Board of the Company or by vote of holders of a
majority of the Portfolio's shares, or upon 90 days' written notice, by the
Sub-Adviser. This Agreement will also terminate automatically in the event of
its assignment (as defined in the 1940 Act and the rules thereunder).
10. Services to Other Companies or Accounts
The Company understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment adviser to fiduciary and other
managed accounts, and as investment adviser to other investment companies, and
the Company has no objection to the Sub-Adviser's so acting, provided that
whenever the Portfolio and one or more other investment companies advised by
the Sub-Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed
to be equitable to each company. The Company recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for
the Portfolio. In addition, the Company understands that the persons employed
by the Sub-Adviser to assist in the performance of the Sub-Adviser's duties
under this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict the
right of the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
11. Representation by the Company
The Company represents that a copy of the Master Trust Agreement is on
file with the Secretary of The Commonwealth of Massachusetts and with the
Boston City Clerk.
12. Limitation of Liability
The Company and the Sub-Adviser agree that the obligations of the
Company under this Agreement shall not be binding upon any of the members of
the Board, shareholders, nominees, officers, employees or agents, whether
past, present or future, of the Company, individually, but are binding only
upon the assets and property of the Portfolio and not upon the assets and
property of any other portfolio of the Company. The execution and delivery of
this Agreement have been authorized by the Board and a majority of the holders
of the Portfolio's outstanding voting securities, and signed by an authorized
officer of the Company, acting as such, and neither such authorization by such
members of the Board and shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Portfolio as provided in the Master Trust Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
SMITH BARNEY SHEARSON SERIES FUND
By:__________________________________________
THE GREENWICH STREET ADVISORS
DIVISION OF MUTUAL MANAGEMENT CORP.
By:___________________________________________
Accepted:
LEHMAN BROTHERS GLOBAL
ASSET MANAGEMENT LIMITED
By:______________________________
4
shared/domestic/clients/shearson/funds/ssf/subadvis.doc
