Proxy Statement Pursuant to Section
14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [ ]
Filed by a party other than the
Registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12
Smith Barney Series Fund
(Name of Registrant as Specified in
its Charter)
Caren Cunningham
Name of Person Filing Proxy Statement
Payment of Filing Fee (Check
appropriate box):
[X] $125 per Exchange Act Rules 0-
11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(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 the transaction
applies:
(2) Aggregate number of
securities to which transactions
applies:
(3) Per unit price or other
underlying value of transaction
computed pursuant to Exchange Act Rule
0-11:1
(4) Proposed maximum aggregate
value of transaction:
[ ] 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:
(2) Form, schedule or
registration statement no.:
(3) Filing party:
(4) Date filed:
1 Set forth the amount on which the
filing fee is calculated and state how
it was determined.
September 23, 1996
Dear Shareholder:
The enclosed proxy statement relates to a
meeting of the shareholders of the of Emerging Growth
Portfolio (the "Portfolio") of Smith Barney Series Fund
(the "Trust"). VK/AC Holding, Inc., the corporate parent
of the Portfolio's investment adviser, has entered into a
merger agreement with Morgan Stanley Group Inc. ("Morgan
Stanley") and certain of Morgan Stanley's affiliates.
Pursuant to
the merger agreement, the Portfolio's investment adviser
will become an indirect subsidiary of Morgan Stanley. The
Portfolio's current investment adviser will continue to
provide the Portfolio with investment advisory and
management
services following the merger. The primary purpose of the
Meeting is to permit the Portfolio's shareholders to
consider a new investment advisory agreement, to take
effect following the merger, as required by the federal
securities laws. The new investment advisory agreement
between the Portfolio and its investment adviser will be
substantially identical to the Portfolio's current
investment advisory agreement, except for the dates of
execution, effectiveness and termination.
Your vote is important and your participation
in the governance of the Portfolio does make a difference.
The proposal has been unanimously approved by
the
Trustees of the Trust, who recommend you vote "FOR" the
proposal. Your immediate response will help save on the
costs of additional solicitations. We look forward to
your participation.
PLEASE SIGN AND RETURN YOUR PROXY CARD IN
THE EN[HD]
CLOSED POSTAGE-PAID ENVELOPE.
Sincerely,
Heath B. McLendon
Chairman of the Board
SBS
SMITH BARNEY SERIES
FUND
on behalf of its
Emerging Growth Portfolio
388 Greenwich Street
New York, New York 10013
Telephone 800-224-7523
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS
To Be Held October 25, 1996
A Special Meeting of Shareholders (the "Meeting") of
the Emerging Growth Portfolio (the "Portfolio"), a
separate series of Smith Barney Series Fund (the "Trust"),
will be held at the offices of the Trust, 388 Greenwich
Street, 27th Floor, New York, New York 10013 on October
25, 1996 at 10:00 a.m. for the following purposes:
1. With respect to the Trust on behalf of the Portfolio,
to
approve or disapprove a new investment advisory agreement
(the "New Advisory Agree[HD] ment"); and
2. To transact such other business as may properly come
before the
Meeting or any adjournments thereof.
Shareholders of record of the Portfolio at the close
of business on September 6, 1996 are entitled to notice of
and to vote at this Meeting or any adjournment thereof.
By Order of the Board of Trustees
Christina T. Sydor
Secretary
September 23, 1996
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY
OF ITS MOST RECENT ANNUAL REPORT (AND THE MOST RECENT
SEMIANNUAL REPORT SUCCEEDING THE ANNUAL REPORT) TO A
SHAREHOLDER OF THE PORTFOLIO UPON REQUEST. ANY SUCH
REQUEST SHOULD BE MADE BY CALLING (800) 224-7523 OR BY
WRITING TO THE TRUST AT 388 GREENWICH STREET, NEW YORK,
NEW YORK 10013.
SHAREHOLDERS OF THE PORTFOLIO ARE INVITED TO
ATTEND THE MEETING IN PERSON. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD AND SIGN SUCH
PROXY CARD, AND RE[HD] TURN IT IN THE ENVELOPE PROVIDED,
WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, WE ASK THAT YOU MAIL YOUR PROXY
PROMPTLY.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU
CAST YOUR VOTE FOR APPROVAL OF THE NEW ADVISORY AGREEMENT.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
PROXY STATEMENT
SMITH BARNEY SERIES FUND
on behalf of its
Emerging Growth Portfolio
388 Greenwich Street
New York, New York 10013
Telephone (800) 224-7523
SPECIAL MEETING OF SHAREHOLDERS
October 25, 1996
This proxy statement is furnished in connection
with the solicitation by the Board of Trustees (the
"Trustees" or the "Board") of the Smith Barney Series Fund
(the "Trust") on behalf of one of its series, Emerging
Growth Portfolio (the "Portfo[HD] lio"), of proxies to be
voted at a Special Meeting of Shareholders, and all
adjournments thereof (the "Meeting") of the Portfolio, to
be held at the offices
of the Trust, 388 Greenwich Street, New York, New York
10013 on the 27th floor, Friday, October 25, 1996, at
10:00 a.m. The approximate mailing date of this proxy
statement and accompanying form of proxy is September 23,
1996.
The primary purpose of the Meeting is to permit
the Portfolio's shareholders to consider a New Advisory
Agreement (defined below) to take effect following the
consummation of the transactions contemplated by an
Agreement and Plan of
Merger, dated as of June 21, 1996 (the "Merger
Agreement"), among Morgan Stanley Group Inc. ("Morgan
Stanley"), MSAM Holdings II, Inc., MSAM Acquisition Inc.
and VK/AC Holding, Inc. ("VKAC Holding"), the indirect
parent corporation of the Portfolio's investment adviser.
Pursuant to the Merger Agreement, the Portfolio's
investment adviser will become an indirect subsidiary of
Morgan Stanley. The shareholder vote on the New Advisory
Agreement is required
under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a result of Morgan Stanley's contemplated
acquisition of the investment adviser. The Portfolio's New
Advisory Agreement is substantially identical to the
Portfolio's Current Advisory Agreement (defined below),
except for the dates of execution, effectiveness and
termination.
Participating in the Meeting are holders of shares of
beneficial interest, par value $0.001 per share (the
"Shares"), of the Portfolio.
The Board has fixed the close of business on September 6,
1996, as the record
date (the "Record Date") for the determination of holders
of Shares of the Portfolio entitled to vote at the
Meeting. Shareholders of the Portfolio on the Record Date
will be entitled to one vote per Share with respect to
each proposal submitted to the shareholders of the
Portfolio, with no Share having cumulative voting rights.
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF THE
MOST RECENT ANNUAL REPORT (AND THE MOST RECENT SEMIANNUAL
REPORT SUCCEEDING THE ANNUAL REPORT) TO A SHAREHOLDER OF
THE PORTFOLIO UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO THE TRUST BY CALLING (800) 224-7523 OR BY
WRITING TO THE TRUST, 388 GREENWICH STREET, NEW YORK, NEW
YORK 10013.
At the close of business on September 6, 1996, there
were issued and outstanding 1,219,338.947 Shares of the
Portfolio. As of the Record Date, to the knowledge of
the Portfolio and the Board, no single shareholder or
"group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934) beneficially owned more
than 5% of the outstanding shares of the Portfolio. As of
the Record Date, the officers and Board Members of the
Trust beneficially owned less than 1% of the outstanding
shares of the Portfolio.
Voting
The voting requirement for passage of a particular
proposal depends on the nature of the particular proposal.
With respect to Proposal 1, a "vote of a majority of the
outstanding voting securities" is required, which is
defined under the 1940 Act as the lesser of (i) 67% or
more of the voting securities of the Portfolio entitled to
vote thereon present in person or by proxy at the Meeting,
if the holders of more than 50% of the outstanding voting
securities entitled to vote thereon are present in person
or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Portfolio entitled to
vote thereon.
THE BOARD RECOMMENDS THAT YOU CAST YOUR VOTE
FOR APPROVAL OF THE NEW ADVISORY AGREEMENT.
All Shares of the Portfolio affected by a proposal
will vote together as a single class on such proposal. All
properly executed proxies received prior to the Meeting
will be voted at the Meeting in accordance with the
instructions marked thereon.
All of the outstanding shares of the Portfolio are sold
exclusively to, and held
of record by, certain separate accounts (the "Insurance
Cos."), for the benefit of owners of the accounts
("Contract Owners"). With respect to the Meeting, Contract
Owners have the right to instruct the Insurance Cos. how
to vote shares of
the Portfolio attributable to the value of their contract
allocated to the Portfolio, through the accounts, on any
matter affecting the Portfolio. Each share
is entitled to one vote, and any fractional share is
entitled to a fractional vote.
Each Contract Owner has the right to direct the votes of
that number of shares of the Portfolio determined by
multiplying the total number of shares of the Portfolio
outstanding
by a fraction, the numerator of which is the number of
units held by such Contract Owner in the Portfolio and the
denominator of which is the total number of units of the
Portfolio outstanding on the Record Date. Units reflect
the
Contract Owner's ownership in the accounts, while shares
reflect the Insurance Cos.' ownership in the Portfolio.
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 the
Insurance Cos. in the same ratio
as those shares for which proper instructions were
received from other Contract Owners. In addition, the
Insurance Cos. will vote the shares for which they have
voting rights in the same proportion as the votes for
which they have received proper instructions.
Shareholders who execute proxies may revoke them
at any time before they are voted by filing with the Trust
a written notice of revocation, by delivering a duly
executed proxy bearing a later date or by attending the
Meeting and voting in person.
The Trust knows of no business other than that
mentioned in Proposal 1 of the Notice that will be
presented for consideration at the Meeting. If any other
matters are properly presented, it is the intention of the
persons named on the enclosed proxy to vote proxies in
accordance with their best judgment. In the event a
quorum is present at the Meeting but sufficient votes to
approve the proposal are not received, the persons named
as proxies may propose one or more adjournments of the
Meeting to permit further solicitation of proxies provided
they determine that
such an adjournment and additional solicitation is
reasonable and in the interest of shareholders based on a
consideration of all relevant factors, including the
nature of the relevant proposal, the percentage of votes
then cast, the percentage of negative votes then cast, the
nature of the proposed solicitation activities and the
nature of the reasons for such further solicitation.
PROPOSAL 1: APPROVAL OF NEW ADVISORY AGREEMENT
The Adviser
Van Kampen American Capital Asset Management, Inc.
(the "Adviser") acts as investment adviser for the
Portfolio. The Adviser has acted as investment adviser for
the Portfolio since the Portfolio commenced its investment
operations. The Adviser currently is a wholly-owned
subsidiary of Van Kampen American Capital, Inc. ("VKAC"),
which is a whollyowned subsidiary of VKAC Holding,
which in turn is controlled, through the ownership of a
substantial majority of its common stock, by The Clayton &
Dubilier Private Equity Fund IV Limited Partnership ("C&D
L.P."), a Connecticut limited partnership. C&D L.P. is
managed by Clayton, Dubilier & Rice, Inc., a New York
based private
investment
firm. The general partner of C&D L.P. is Clayton &
Dubilier Associates IV
Limited Partnership ("C&D Associates L.P."). The general
partners of C&D Associates L.P. are Joseph L. Rice, III,
B. Charles Ames, William A. Barbe, Alberto Cribiore,
Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe and
Andrall E. Pearson, each of whom is a principal of
Clayton, Dubilier & Rice, Inc. In addition, certain
officers, directors and employees of VKAC own, in the
aggregate, approximately 6% of the common stock of VKAC
Holding and have the
right to acquire, upon the exercise of options (whether or
not vested), approxi[HL] mately an additional 12% of the
common stock of VKAC Holding. Currently, and after giving
effect to the exercise of such options, no officer or
trustee of the Trust owns or would own 5% or more of the
common stock of VKAC Holding. The addresses of VKAC
Holding, VKAC and the Adviser are One Parkview Plaza,
Oakbrook Terrace, Illinois 60181 and 2800 Post Oak Blvd.,
Houston, Texas 77056.
Prior to December 1994, the Adviser provided
investment advisory services under the name "American
Capital Asset Management, Inc."
Information Concerning Morgan Stanley
Morgan Stanley and various of its directly or
indirectly owned subsidiaries, including Morgan Stanley &
Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and
Morgan Stanley International, are engaged in a wide range
of financial services. Their principal businesses include
securities underwriting, distribution and trading; merger,
acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and
research services; asset management; trading of futures,
options, foreign exchange, commodities and swaps
(involving foreign exchange, commodities,
indices and interest rates); real estate advice, financing
and investing; and global custody, securities clearance
services and securities lending. Morgan Stanley Asset
Management Inc. ("MSAM") also is a wholly-owned subsidiary
of Morgan
Stanley. As of June 30, 1996, MSAM, together with its
affiliated investment advisory companies, had
approximately $103.5 billion of assets under management
and fiduciary advice.
The Acquisition
Pursuant to the Merger Agreement, MSAM Acquisition
Inc. will be merged with and into VKAC Holding and VKAC
Holding will be the surviving corporation
(the "Acquisition"). (MSAM Acquisition Inc. is a wholly
owned subsidiary of MSAM Holdings II Inc., which in turn
is a wholly-owned subsidiary of Morgan Stanley.) Following
the Acquisition, VKAC Holding and the Adviser will be
indirect subsidiaries of Morgan Stanley.
The Adviser anticipates that the consummation of the
Acquisition will occur by the end of November 1996,
provided that a number of conditions set forth in the
Merger Agreement are met or waived. The conditions
require, among other things, that as of the closing the
shareholders of certain investment companies (including
the Portfolio) and investors in certain accounts advised
by the
Adviser or its affiliates, which investment companies and
accounts have aggregate assets in excess of a specified
minimum amount, have approved new investment advisory
agree[HL] ments or consented to the assignment of existing
investment advisory agreements. At the closing, MSAM
Acquisition Inc. will pay approximately $740 million
(based on VKAC's long-term debt outstanding as of July 31,
1996) in cash to the stockholders of VKAC Holding
(excluding certain management stockholders), and
to persons owning options to purchase stock of VKAC
Holding, subject to certain purchase price adjustments set
forth in the Merger Agreement. As of July 31, 1996, VKAC
had longterm debt outstanding of approximately $410
million. To the extent that pre-tax income of VKAC prior
to the closing of the Acquisition permits the repayment of
its long-term debt, the purchase price for the equity
interests in VKAC Holding will be increased by the amount
of long-term debt repaid. The
purchase price also is subject to certain adjustments
based,
among other things, on assets under management of VKAC and
its subsidiaries at the time of closing. The Adviser also
contemplates that, as part of the Acquisition, certain
officers
and directors of VKAC Holding and its affiliates will
contribute to MSAM Holdings, II, Inc. their existing
shares of common stock of VKAC Holding in exchange for
approximately $25 million of shares of preferred stock of
MSAM Holdings II, Inc. which, in turn, will be
exchangeable into common stock, par value $1.00 per share,
of Morgan Stanley at specified times over a four year
period. Such shares of preferred stock will represent, in
the aggregate, 5% of the combined voting power in MSAM
Holdings II, Inc., the remainder of which will be
indirectly owned by Morgan Stanley.
VKAC Holding will engage in certain preparatory
transactions prior to the Acquisition, including the
distribution to stockholders of VKAC Holding of (i) all of
VKAC Holding's investment in McCarthy, Crisanti & Maffei,
Inc., a whollyowned subsidiary engaged in the business of
distributing research and financial information, (ii) all
of VKAC Holding's investment in Hansberger Global
Inves[HL] tors, Inc., a company in which VKAC Holding made
a minority
investment in
May 1996, and (iii) certain related cash amounts.
There is no financing condition to the closing of the
Acquisition. VKAC has been advised by Morgan Stanley that
as of August 30, 1996, no determination has been made
whether any additional indebtedness will be incurred by
Morgan Stanley and its affiliates or VKAC and its
affiliates in connection with the Acquisition. In
addition, the disposition of VKAC's outstanding long-term
indebtedness (including its bank loans and senior notes)
in connection with the Acquisition has not yet been
determined.
The operating revenue of VKAC and its subsidiaries for the
fiscal year
ended December 31, 1995, less expenses for the same
period, was more than adequate to service VKAC's
outstanding debt. VKAC prepaid $80 million of its long-
term debt in 1995, and has continued to make debt
prepayments during 1996. VKAC Holding
and VKAC believe, based on the earnings experience of VKAC
and its subsidiaries, that after the Acquisition the
operating revenue of VKAC and its subsidiaries should be
more than sufficient to service their debt and that VKAC
and its subsidiaries should be able to conduct their
respective operations as now conducted and as proposed to
be conducted.
The Merger Agreement does not contemplate any
changes,
other than changes in the ordinary course of business, in
the management or operation of the Adviser relating to the
Portfolio, the personnel managing the Portfolio or other
services or business activities of the Portfolio. The
Acquisition is not expected to result in material changes
in the business, corporate structure or composition of the
senior management or personnel of the Adviser, or in the
manner in which the Adviser renders services to the
Portfolio. Morgan Stanley has agreed in the Merger
Agreement that, for a period of two years from the date of
the Acquisition, it will cause the Adviser to provide
compensation and employee benefits which are
substantially comparable in the aggregate to those
presently provided. The Adviser does not anticipate that
the Acquisition or any ancillary transactions will cause a
reduction in the quality of services now provided to the
Portfolio, or have any adverse effect on the Adviser's
ability to fulfill its obligations under the New Advisory
Agreement or operate its business in a manner consistent
with past business practices.
Certain officers of the Adviser previously
entered into employment agreements with VKAC Holding which
expire from between 1997 and 2000. Certain officers of
the Adviser also previously entered into retention
agreements with VKAC
Holding which will remain in place for two years
following the consummation of the Acquisition. The Merger
Agreement contemplates that Morgan Stanley will, and will
cause VKAC Holding to, honor such employment and
retention agreements. The employment agreements and
retention agreements are intended to assure that
the services of the officers are available to the Adviser
(and thus to the
Portfolio) for a remaining term of two to four years. As
described above, certain officers and employees of VKAC
and the Adviser are expected to contribute their existing
shares of common stock of VKAC Holding to MSAM Holdings
II, Inc. in
exchange for approximately $25 million of preferred stock
in MSAM Holdings II, Inc. which, in turn, will be
exchangeable into common stock, par value $1.00 per
share, of Morgan Stanley at specified times over a four
year period. Such shares of preferred stock will
represent, in the aggregate, 5% of the combined voting
power in MSAM Holdings II, Inc.
The Advisory Agreement
Consummation of the Acquisition may constitute
an "assignment" (as defined in the 1940 Act) of the
investment advisory agreement currently in effect between
the Trust on behalf of the Portfolio and the Adviser (the
"Current Advisory Agree[HD] ment"). As required by the
1940 Act, the Current Advisory Agreement provides for its
automatic termination in the event of an assignment. See
"The Current Advisory Agreement" below.
In anticipation of the Acquisition and in order
for the Adviser to continue to serve as investment adviser
to the Portfolio after consummation of the Acquisition, a
new investment advisory agreement (the "New Advisory
Agreement") between
the Trust on behalf of the Portfolio and the Adviser must
be approved (i) by a majority of the Trustees of the Trust
who are not parties to the New Advisory Agreement or
interested persons of any such party ("Disinterested
Trustees") and (ii) by the holders of a majority of the
outstanding voting securities (within the meaning of the
1940 Act) of the Portfolio. See "The New Advisory
Agreement" below.
The following summary of the Current Advisory
Agreement and the New
Advisory Agreement set forth herein is qualified by
reference to Annex A.
The Current Advisory Agreement. The Current Advisory
Agreement for the
Trust on behalf of the Portfolio, dated December 20, 1994,
was last approved by a majority of the Trustees, including
a majority of the Disinterested Trustees, voting in person
at a meeting called for that purpose on July 17, 1996, to
continue the Current Advisory Agreement for a period of
one year. The Current Advisory Agreement was last approved
by Shareholders of the Portfolio at a meeting held on
December 20, 1994 relating to the acquisition of the
Adviser's corporate parent by The Van Kampen Merritt
Companies, Inc.
The Current Advisory Agreement provides that the
Adviser will manage the Portfolio's holdings in accordance
with the Portfolio's investment objective and policies,
make investment decisions for the Portfolio, place
purchase and sale orders
for portfolio transactions for the Portfolio and employ
professional portfolio manag[HD] ers and security analysts
who provide research services to the Portfolio.
The Current Advisory Agreement provides that the
Adviser shall not be liable for any error of judgment or
law, or for any loss suffered by the Portfolio in
connection with the matters to which the Current Advisory
Agreement relates except, a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties under the Current
Advisory Agreement.
The Adviser receives an annual advisory fee equal to
0.75 of 1.00% of the Portfolio's average net assets, which
are calculated on a daily basis. The advisory fee is
payable for each calendar month as soon as practicable
after the end of that
month. For the last fiscal year, the Portfolio paid the
Adviser $108,035, $16,260 of which was waived, for services
provided to the Portfolio pursuant to the Current Advisory
Agreement.
Annex B contains a schedule of brokerage commissions paid
by the Portfolio on portfolio transactions during the past
fiscal year, including such commissions paid by the
Portfolio to affiliated brokers.
The Adviser's activities are subject to the review and
supervision of the Board to which the Adviser renders
periodic reports with respect to the Portfolio's investment
activities. The Current Advisory Agreement may be
terminated without penalty,
upon 60 days' written notice, by the Board or by vote of
the holders of a majority of the Portfolio shares, or upon
90 day written notice by the Adviser. The Current Advisory
Agreement will automatically terminate in the event of its
assignment.
Annex C indicates the size of each investment company
advised or sub-advised
by the Adviser, that has a similar objective with that of
the Portfolio and the advisory fee rate.
The Portfolio pays all other expenses incurred in its
operation including, but not limited to, direct charges
relating to the purchase and sale of its portfolio
securities, interest charges, fees and expenses of outside
legal counsel and independent auditors, taxes and
governmental fees, costs of share certificates and any
other expenses (including clerical expenses) of issuance,
sale or repurchase of its
Shares, expenses in connection with its dividend
reinvestment plan, membership fees in trade associations,
expenses of registering and qualifying its Shares for sale
under federal and state securities laws, expenses of
printing and distribution, expenses of filing reports and
other documents filed with governmental agencies, expenses
of annual and special meetings of the trustees and
shareholders, fees and disburse[HD] ments of the transfer
agents, custodians and sub-custodians, expenses of
disbursing dividends and distributions, fees, expenses and
out-of-pocket costs of the trustees who are not affiliated
with the Adviser, insurance premiums, indemnification and
other expenses not expressly provided for in the Current
Advisory Agreement, and any extraordinary expenses of a
nonrecurring nature.
The New Advisory Agreement. The Board approved a proposed
New Advisory
Agreement between the Trust on behalf of the Portfolio and
the Adviser on July 17, 1996, the form of which is attached
hereto as Annex B. The form of the proposed New Advisory
Agreement is substantially identical to the Current
Advisory Agree[HD] ment between the Trust on behalf of the
Portfolio and the Adviser, except for the dates of
execution, effectiveness and termination.
The investment advisory fee as a percentage of net
assets payable by the Portfolio will be the same under the
New Advisory Agreement as under the Current Advisory
Agreement. If the investment advisory fee under the New
Advisory Agreement had been in effect for the Portfolio's
most recently completed fiscal
year, advisory fees paid to the Adviser by the Portfolio
would have been the same as those paid under the Current
Advisory Agreement.
The Board met on July 17, 1996, at which meeting the
Trustees, including the Disinterested Trustees, concluded
that if the Acquisition occurs, entry by the Portfolio into
a New Advisory Agreement would be in the best interest of
the Portfolio and the shareholders of the Portfolio. The
Board, including the
Disinter[HD] ested Trustees, unanimously approved the New
Advisory Agreement for the Portfolio and recommended such
agreement for approval by the shareholders of
the Portfolio. The New Advisory Agreement would take effect
as to the
Portfolio upon
the later to occur of (i) the obtaining of Shareholder
approval or (ii) the closing of the Acquisition. The New
Advisory Agreement will continue in effect for an initial
two year term and thereafter for successive annual periods
as long as such continuance is approved in accordance with
the 1940 Act.
In evaluating the New Advisory Agreement, the Board
took into account that the Portfolio's Current Advisory
Agreement and its New Advisory Agreement, includ[HL] ing
the terms relating to the services to be provided
thereunder by the Adviser and the fees and expenses payable
by the Portfolio, are substantially identical except for
the dates of execution, effectiveness and termination. The
Trustees also considered other possible benefits to the
Adviser and Morgan Stanley that may result from the
Acquisition, including the continued use, to the extent
permitted by law, of Morgan Stanley & Co. and its
affiliates for brokerage services.
The Board also considered the terms of the Merger
Agreement and the possible effects of the Acquisition upon
VKAC's and the Adviser's organization and upon
the ability of the Adviser to provide advisory services to
the Portfolio. The Board considered the skills and
capabilities of the Adviser and the representations of
Morgan Stanley that no material change was planned in the
current management or facilities of the Adviser. In this
regard, the Board was informed of the resources of Morgan
Stanley to be made available to VKAC and the Adviser, after
giving effect to the Acquisition, to secure for the
Portfolio quality investment research, invest[HL] ment
advice and other client service. The Board considered the
financial resources
of Morgan Stanley and Morgan Stanley's representation to
the Board that it will provide sufficient capital to
support the operations of the Adviser. The Board also
considered the reputation, expertise and resources of
Morgan Stanley and its affiliates in domestic and
international financial
markets. The Board considered the continued employment of
members of senior management of the Adviser and
VKAC pursuant to employment and retention agreements and
the incentives
provided to such members and other key employees of the
Adviser and VKAC, to
be important to help to assure continuity of the personnel
primarily responsible for maintaining the quality of
investment advisory and other services for the Portfolio.
The Board also considered the effects on the Portfolio
of the Adviser becoming an affiliated person of Morgan
Stanley. Following the Acquisition, the 1940 Act will
prohibit or impose certain conditions on the ability of the
Portfolio to engage in certain transactions with Morgan
Stanley and its affiliates. For example, absent exemptive
relief, the Portfolio will be prohibited from purchasing
securities from Morgan Stanley & Co., a wholly-owned broker
dealer subsidiary of Morgan
Stanley, in transactions in which Morgan Stanley & Co. acts
as a principal, and the Portfolio will have to satisfy
certain conditions in order to engage in securities
transactions in which Morgan Stanley & Co. acts as a broker
or to purchase
securities in an underwritten offering in which Morgan
Stanley & Co. is acting as an underwriter. In this
connection, management of the Adviser represented to the
Board that they do not believe these prohibitions or
conditions will have a material effect on the management or
performance of the Portfolio.
The Board was advised that Section 15(f) of the 1940
Act is applicable to the Acquisition. Section 15(f) of the
1940 Act permits, in the context of a change
in control of an investment adviser to a registered
investment company, the receipt by such investment adviser,
or any of its affiliated persons, of an amount or benefit
in connection with such sale, as long as two conditions are
satisfied. First, an "unfair burden" must not be imposed on
the investment company for which the investment
adviser acts in such capacity as a result of the sale of
such interest, or any express or implied terms, conditions
or understandings applicable thereto. The term "unfair
burden," as defined in the 1940 Act, includes any
arrangement during the two-year period after the
transaction whereby the investment adviser (or predecessor
or successor adviser) or any "interested person," as
defined in the 1940 Act, of any such adviser, receives or
is entitled to receive any compensation, directly or
indirectly, from the investment company or its security
holders (other than fees for bona fide investment advisory
and other services), or from any person in connection with
the purchase or sale of securities or other property to,
from or on behalf of the investment company (other than
ordinary fees for bona fide principal underwriting
services).
Management of the Portfolio is aware of no circumstances
arising from the
Acquisition, preparatory transactions to the Acquisition or
any potential
financing that might result in the imposition of an
"unfair burden" on the Portfolio. Moreover, Morgan Stanley
has agreed in the Merger Agreement that, upon consummation
of the Acquisition, it will take no action which would have
the effect, directly or indirectly, of violating any of the
provisions of Section 15(f) of the 1940 Act in respect of
the Acquisition. In this regard the Merger Agreement
provides that Morgan Stanley will use its reasonable best
efforts to assure that
(i) no "unfair burden" will be imposed on the Portfolio as
a result of the transactions contemplated by the Merger
Agreement and (ii) except as provided in the Merger
Agreement, that the investment advisory fees paid by the
Portfolio will not be increased for a period of two years
from the closing of the Acquisition and
that, during such period, advisory fee waivers shall not be
permitted to expire
except in accordance with their terms. The Adviser may
permit a voluntary fee waiver
unilaterally adopted by it to expire at any time and no
assurance can be given that voluntary waivers will not be
permitted to expire during the two year period. During the
two year period following the Acquisition, the Adviser does
not intend to change its policies with respect to the
circumstances under which voluntary fee waivers may be
permitted to expire. Following the Acquisition, to the
extent permitted
by applicable law, VKAC anticipates that the Portfolio
will continue to use Morgan Stanley & Co. and its
affiliates for brokerage services.
The second condition of Section 15(f) is that during
the three-year period immediately following a transaction
to which Section 15(f) is applicable, at least 75% of the
subject investment company's board of trustees must not be
"interested persons" (as defined in the 1940 Act) of such
investment company's investment adviser or predecessor
adviser. The current composition of the Board would be in
compliance with such condition subsequent to the
Acquisition.
After consideration of the above factors, and such
other factors and information that the Trustees deemed
relevant, the Trustees, including the Disinterested
Trustees, unanimously approved the New Advisory Agreement
and voted to recommend its approval to the shareholders of
the Portfolio.
In the event that shareholders of the Portfolio
do not approve the New Advisory Agreement and the
Acquisition is consummated, the Board would seek to obtain
for
the Portfolio interim investment advisory services at the
lesser of cost or the current fee rate either from the
Adviser or from another advisory organization. Thereafter,
the Board would either negotiate a new investment advisory
agreement with an
advisory organization selected by the Board or make
appropriate arrangements, in either event subject to
approval of the shareholders of the Portfolio. In the event
the Acquisition is not consummated, the Adviser would
continue to serve as investment adviser of the Portfolio
pursuant to the terms of the Current Advisory Agreement.
Shareholder Approval
To become effective, the New Advisory Agreement
must be approved by a vote of a majority of the outstanding
voting securities of the Portfolio. The "vote of a majority
of the outstanding voting securities" is defined under the
1940 Act as the lesser of the vote of (i) 67% or more of
the Shares of the Portfolio entitled to vote thereon
present at the Meeting if the holders of more than 50% of
such outstanding Shares are present in person or
represented by proxy; or (ii) more than 50% of such
outstanding Shares of the Portfolio entitled to vote
thereon. The New Advisory Agreement was unanimously
approved by the Board after consideration of all
factors which they determined to be relevant to their
deliberations, including those discussed above. The Board
also unanimously determined to submit the New Advisory
Agreement for consideration by the Shareholders of the
Portfolio. THE BOARD OF TRUSTEES OF THE PORTFOLIO
RECOMMENDS A VOTE
"FOR" APPROVAL OF THE NEW ADVISORY AGREEMENT.
OTHER INFORMATION
Directors and Officers of the Adviser
The following table sets forth certain
information concerning the principal executive officers and
directors of the Adviser. The address of each of the
following persons is noted below.
Name and Address
Principal Occupation
Don G. Powell 2800 Post Oak Blvd.
Houston, TX 77056 President, Chief Executive Officer and
a Director of VKAC Holding and VKAC and Chairman, Chief
Executive Officer and a Director of Van Kampen American
Capital Distributors, Inc. ("Distributors"), the Adviser,
Van Kampen American Capital Management, Inc., Van Kampen
American Capital Investment Advisory Corp. (the "VK
Adviser"), and Van Kampen American Capital Advisors, Inc.
Chairman, President and a Director of Van Kampen American
Capital Exchange Corporation, American Capital Contractual
Services, Inc. and American Capital Shareholders
Corporation. Chairman and a Director of ACCESS Investor
Services, Inc. ("ACCESS"), Van Kampen Merritt Equity
Advisors Corp., McCarthy, Crisanti & Maffei, Inc., and Van
Kampen American Capital Trust Company, Chairman, President
and a Director of Van Kampen American
Capital Services, Inc. Director, Trustee or Managing
General Partner of other open-end investment companies and
closedend investment companies advised by the Adviser.
Prior to July 1996, Chairman and Director of VSM Inc. and
VSJ Inc. Prior to July 1996, President, Chief Executive
Officer and a Trustee/Director of certain open-end
investment companies and closed-end investment companies
advised by the Adviser and the VK Adviser.[WW]
Dennis J. McDonnell One Parkway Plaza
Oakbrook Terrace, IL 60181 President, Chief Operating
Officer and a Director of the Adviser, the VK Adviser, and
Van Kampen
American Capital Management, Inc. Executive Vice President
and a Director of VKAC Holding and
VKAC. President and Director of Van Kampen Merritt Equity
Advisors Corp. Director of Van Kampen Merritt Equity
Holding Corp. and McCarthy, Crisanti
& Maffei, S.A. Chief Executive Officer and Director of
McCarthy, Crisanti & Maffei, Inc. Chairman and a Director
of MCM Asia Pacific Company, Limited. President and a
Trustee/Director of open-end investment companies and
closedend investment companies advised by the Adviser and
the VK Adviser. Prior to July 1996, President, Chief
Operating Officer and Director of VSM Inc. and VCJ Inc.
Ronald A. Nyberg One Parkview Plaza
Oakbrook Terrace, IL 60181 Executive Vice President,
General Counsel and Secretary of VKAC and VKAC Holding.
Executive
Vice President, General Counsel and a Director of
Distributors, the Adviser, the VK Adviser, Van Kampen
American Capital Management, Inc., Van Kampen Merritt
Equity Advisors Corp. and Van
Kampen Merritt Equity Holdings Corp. Executive Vice
President, General Counsel and Assistant Secretary of Van
Kampen American Capital Advisers, Inc., American Capital
Contractual Services, Inc., Van Kampen American Capital
Exchange Corporation, ACCESS, Van Kampen American Capital
Services, Inc. and American Capital Shareholders
Corporation. Executive Vice President, General Counsel,
Assistant Secretary and Director of Van Kampen American
Capital Trust Company. General Counsel of McCarthy,
Crisanti & Maffei, Inc. Vice President of open-end
investment companies and closed-end investment companies
advised by the Adviser. Vice President and Secretary of
open-end investment companies and closed-end investment
companies advised by the VK Adviser. Director of ICI
Mutual Insurance Co. a provider of insurance to members of
the Investment Company Institute. Prior to July 1996,
Executive Vice President and General Counsel of VSM Inc.,
and Executive Vice President, General Counsel and Director
of VCJ Inc.
William R. Rybak One Parkview Plaza
Oakbrook Terrace, IL 60181 Executive Vice President and
Chief Financial Officer of VKAC Holding and VKAC since
February 1993,
and Treasurer of VKAC Holding through December
1993. Executive Vice President, Chief Financial Officer
and
a Director of Distributors, the Adviser, the VK Adviser
and Van Kampen American Capital Management, Inc. Executive
Vice President, Chief Financial Officer, Treasurer and
Director of Van Kampen Merritt Equity Advisers Corp.
Executive Vice President and Chief Financial Officer of
Van Kampen American Capital Advisors, Inc., Van Kampen
American Capital Exchange Corporation, Van
Kampen American Capital Trust Company, ACCESS
and American Capital Contractual Services, Inc. Executive
Vice President, Chief Financial Officer and Treasurer of
American Capital Shareholders Corporation, Van Kampen
American Capital Services, Inc. and Van Kampen Merritt
Equity Holdings Corp. Chief Financial Officer and
Treasurer of McCarthy, Crisanti & Maffei, Inc. Chairman of
the Board of Hinsdale Financial Corp., a savings and loan
holding company. Prior to July 1996, Executive Vice
President, Chief Financial Officer and a Director of VCJ
Inc., and Executive Vice President and Chief Financial
Officers of VSM Inc.
Peter W. Hegel One Parkview Plaza
Oakbrook Terrace, IL 60181 Executive Vice President of
the Adviser, the VK Adviser and Van Kampen American
Capital Advisors,
Inc. Director of McCarthy, Crisanti & Maffei, Inc. and
Van Kampen American Capital Management, Inc.
Vice President of certain open-end investment companies
and closed-end investment companies advised by the Adviser
and the VK Adviser. Prior to July 1996, Director of VSM
Inc.
Robert C. Peck, Jr. 2800 Post Oak Blvd.
Houston, TX 77056 Executive Vice President and Director
of the Adviser. Executive Vice President of the VK
Adviser. Vice
President of certain open-end investment companies and
certain closedend investment companies advised by the
Adviser and the VK Adviser.
Alan T. Sachtleben 2800 Post Oak Blvd.
Houston, TX 77056 Executive Vice President and Director
of the Adviser. Executive Vice President of the VK
Adviser. Vice
President of each certain open-end investment companies
and certain closed-end investment companies advised by the
Adviser and the VK Adviser.
None of the Trustees of the Trust are officers of the
Adviser. The only officer of the Trust who serves as an
officer of the Adviser is Mr. Alan T. Sachtleben who is a
Vice President of the Trust.
EXPENSES
VKAC Holding will bear the expense of preparing, printing
and mailing the
enclosed form of proxy, the accompanying Notice and this
Proxy Statement.
In order to obtain the necessary quorum at the
Meeting, additional solicitation may be made by mail,
telephone, telegraph or personal interview by
representatives
of the Trust, the Adviser or VKAC, or by First Data
Investor Services Group, Inc., a solicitation firm located
in Boston, Massachusetts that has been engaged to assist
in proxy solicitations at an estimated cost of
approximately $2,500.
SHAREHOLDER PROPOSALS
As a general matter, the Portfolio does not hold
regular annual meetings of shareholders. Any Shareholder
who wishes to submit proposals for consideration
at a meeting of the Portfolio should send such proposal to
the Portfolio at 388 Greenwich Street, New York, New York
10013. To be considered for presentation at a
shareholders' meeting, rules promulgated by the SEC
require that, among other things, a shareholder's proposal
must be received at the offices of the
Portfolio a reasonable time before a solicitation is made.
Timely submission of a proposal does not necessarily mean
that such proposal will be included.
GENERAL
Management of the Portfolio does not intend to
present and does not have reason to believe that others
will present any other items of business at the Meeting.
However, if other matters are properly presented to the
Meeting for a vote,
the proxies will be voted upon such matters in accordance
with the judgment
of the persons acting under the proxies.
A list of shareholders of the Portfolio entitled
to be present and vote at the Meeting will be available at
the offices of the Portfolio, 388 Greenwich Street, New
York, New York 10013, for inspection by any shareholder
during regular business hours for ten days prior to the
date of the Meeting.
Failure of a quorum to be present at the Meeting for the
Portfolio may necessitate adjournment and may subject the
Portfolio to additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE
REQUESTED
TO FILL IN, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
Christina T. Sydor
Secretary
September 23, 1996
ANNEX A
ADVISORY AGREEMENT
SMITH BARNEY SERIES FUND
(Emerging Growth Portfolio)
November , 1996
Van Kampen American Capital Asset Management,
Inc.
2800 Post Oak Boulevard
Houston, TX 77056
Dear Sirs:
Smith Barney Series Fund (the "Company"), a trust
organized under the laws of the Commonwealth of
Massachusetts, confirms its agreement with Van Kampen
American Capital Asset Management, Inc. (the "Adviser"),
as follows:
1. Investment Description; Appointment
The Company desires to employ its capital 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,
as amended from time to time (the "Master Trust
Agreement"), in the prospectus (the "Prospec[HD] tus") 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 Adviser. The Company
agrees to provide copies of all amendments to the
Prospectus, the Statement and the Master Trust Agreement
to the Adviser on an on-going basis. The Company
desires to employ and hereby appoints the Adviser to act
as the investment adviser to the Emerging Growth Portfolio
(the "Portfolio"). The Adviser accepts the appointment and
agrees to furnish the services for the compensation set
forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board
of the Company, the Adviser will: (a) manage the Company'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 for the Portfolio; (c) maintain a
trading desk and place purchase and sale orders for
portfolio
transactions for the Portfolio; and (d) employ
professional portfolio managers and securities analysts
who provide research services to the Portfolio. In
providing those services, the Adviser will conduct a
continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Portfolio's
assets.
3. Brokerage
In selecting brokers or dealers to execute
transactions on behalf of the
Portfolio, the Adviser will seek the best overall terms
available. In assessing the best overall terms available
for any transaction, the 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
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 Adviser
or its affiliates exercise investment discretion.
4. Information Provided to the Company
The Adviser will keep the Company informed of
developments materially
affecting the Portfolio's holdings, and will, on its own
initiative, furnish the Company from time to time with
whatever information the Adviser believes is appropriate
for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in
rendering the services listed in paragraphs 2 and 3 above.
The Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Company
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
Adviser against any liability to the Company or to its
shareholders of the Portfolio to which the 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 Adviser's reckless
disregard of its obligations and duties under this
Agreement.
6. Compensation
In consideration of the services rendered
pursuant to this Agreement, the Company will pay the
Adviser on the first business day of each month a fee for
the previous month at the annual rate of 0.75 of 1.00% of
the Portfolio's average daily net assets. 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 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.
7. Expenses
The Adviser will bear all expenses in connection
with the performance of its services under this Agreement.
The Company will bear certain other expenses to be
incurred in its operation, including, but not limited to,
investment 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.
8. Reduction of Fee
If in any fiscal year the aggregate expenses of
the Portfolio (including fees pursuant to this Agreement
and the Portfolio's administration agreements, but
excluding interest, taxes, brokerage and extraordinary
expenses) exceed the expense limitation of any state
having jurisdiction over the Portfolio, the Adviser will
reduce its fee to the Portfolio 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 8, if any, will be
estimated, reconciled and paid on a monthly basis.
9. Services to Other Companies or Accounts
The Company understands that the 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 Adviser's so acting,
provided that whenever the Portfolio and one or more other
investment companies advised by the 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 Portfolio
recognizes that in some cases this procedure may adversely
affect the size of the position obtainable for the
Portfolio. In addition, the Portfolio under[HL] stands
that the persons employed by the Adviser to assist in the
performance of the 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 Adviser or any affiliate of the Adviser to
engage in and devote time and attention to other
businesses or to render services of whatever kind or
nature.
10. Term of Agreement
This Agreement shall become effective as of the date
set forth above (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 continu[HD] ance 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 Adviser. This Agreement
will also terminate automatically in the event of its
assignment (as defined in the 1940 Act and the rules
thereunder).
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.
12. Limitation of Liability
The Company and the 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 Company, as provided in the Master Trust
Agreement. 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
authoriza[HD] tion 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 Company 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 SERIES FUND
By:
Name:
Title:
Accepted:
VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
By:
Name:
Title:
ANNEX B
BROKERAGE BY FUND
Fund Name Total Commissions Aggregate Amount of
Commissions Paid to Affiliated Brokers % of Aggregate
Commissions Paid to Affiliated Brokers For Fiscal Year
Ended 12/31/95
Smith Barney Series Fund #
Emerging Growth Portfolio $34,596 $1,039 3.00%
ANNEX C
The following table indicates the size of
each investment company having an investment objective
similar to that of the Portfolio advised or sub-advised by
the Adviser and the advisory fee rate.
Name
Net Assets on August 12, 1996
Annual Management Fee as Percent of Average Net Assets
Aggregate Amount of Sub-Adviser's Fee for Last Fiscal
Year (In
Millions)
Van Kampen American Capital
Emerging Growth Fund $2,261.0 (1)[WW]
Common Sense Trust
Common Sense Emerging Growth Fund 72.5 (2)[WW]
Van Kampen American Capital Life Investment Trust
Emerging Growth Fund 5.3 (4)[WW]
WRL Series Fund, Inc. Van Kampen American Capital
Emerging Growth Portfolio 392.6 (5)
WNL Series Trust
Van Kampen American Capital
Emerging Growth Portfolio 1.1 (3)
(1) 0.575% on the first $350 million;
0.525% on the next $350 million; 0.475% on the next $350
million; and 0.425% on the excess over $1.05 billion.
(2) 0.65% on the first $1 billion; 0.60%
on the next $1 billion; 0.55% on the next
$1 billion; 0.50% on the next $1 billion; and 0.45% on
the excess over $4 billion.
(3) 0.50% on the Fund's average net
assets. (4) 0.70% of the Fund's average
daily net
assets.
(5) 50% of the fees received by the
investment adviser to the Portfolio less 50% of the
amount of any excess expenses paid by the investment
adviser on behalf of
the Portfolio.
[WW]
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
.........................................................
.........................................................
................................................
SMITH BARNEY SERIES FUND - Emerging Growth Portfolio
This Proxy is Solicited on Behalf of the Trustees of
Smith Barney Series Fund
The undersigned holder of shares of the Emerging Growth
Portfolio (the "Portfolio"), a subtrust of Smith Barney
Series Fund, a Massachusetts business trust, hereby
appoints Heath B. McLendon, Christina, T. Sydor and Caren
Cunningham attorneys 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 Portfolio that the undersigned is
entitled to vote at the Special Meeting of Shareholders
of the Portfolio to be held at the offices of the
Portfolio, 388 Greenwich Street, New York, New York,
10013 on Friday, October 25, 1996 at 10:00 A.M., and any
adjournment or adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special
Meeting and Proxy Statement dated September 23, 1996 and
hereby instructs said attorneys and proxies to vote said
shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business
as may properly come before the Special Meeting. A
majority or 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 authority of said proxies hereunder. The
undersigned hereby revokes any 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 fill
title.
DATE: __________________________________________
________________________________________________
________________________________________________
(Signature(s), Title(s), if applicable)
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 herein 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. APPROVAL OF A NEW ADVISORY AGREEMENT FOR
FOR AGAINST ABSTAIN
THE EMERGING GROWTH PORTFOLIO
Please sign on the reverse side. XXX
