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:
[X] Preliminary proxy statement
[ ] 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 , 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 ENCLOSED 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 1-800-224-7523
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 "Portfo[HD]
lio"), 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 Agreement"); 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
, 1996
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST
RECENT ANNUAL REPORT (AND THE MOST RECENT SEMI-ANNUAL 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 RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVE[HD] NIENCE 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 AP[HD]
PROVAL 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 "Portfolio"), 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 , 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 SEMI-ANNUAL 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 Shares of the
Portfolio. The persons who, to the knowledge of the Trust, owned
beneficially more than 5% of the Portfolio's
outstanding Shares as of September 6, 1996 are set forth at Annex A hereto.
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. #CONFIRM#
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.
Proxies received prior to the Meeting on which no vote is indicated
will be voted "for" the proposal.
Abstentions do not constitute votes "for" the proposal and are treated as
votes "against" the proposal. Broker
non-votes (i.e., proxies from brokers or nominees indicating that such
persons have not received instructions
from the beneficial owner or other person entitled to vote shares on
a particular matter with respect to which
the broker or nominees do not have discretionary power) do not constitute
votes "for" or "against" a proposal
and are disregarded in determining the "votes cast" when the voting
requirement for the proposal is based on
achieving a percentage of the voting securities entitled to vote present
in person or by proxy at the Meeting.
Broker non-votes do not constitute votes "for" and are treated as
votes "against" when the voting requirement
for the proposal is based on achieving a percentage of the outstanding
voting securities entitled to vote. A
majority of the outstanding Shares entitled to vote on the proposal must
be present in person or by proxy to
have a quorum to conduct business at the Meeting. Abstentions and
broker non-votes will be deemed present
for quorum purposes.
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 wholly-owned 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), approximately 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"). 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 October 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 agreements 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 long-
term 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 and its affiliates.
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 wholly-owned subsidiary engaged in the business
of distributing research and
financial information, (ii) all of VKAC Holding's investment in
Hansberger Global Investors, 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 consumma[HL]
tion 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 Agreement"). 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 C.
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
managers 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 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
Advisor $ for services provided
to the Portfolio pursuant to the Current Advisory Agreement.
Annex C 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 D 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 disbursements 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 Agreement 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 Disinterested
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, including 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,
investment 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 affiliate 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 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 closed-end 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 closed-end
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 closed-end 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 Investors Services Group, a solicitation firm located in
Boston, Massachusetts that has been engaged to
assist in proxy solicitations at an estimated cost of approximately $ .
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 such Fund 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
, 1996
ANNEX A
List of 5% Beneficial Owners as of ,
1996
Name and Address of Holder
Fund Amount of Ownership
Percentage Ownership
%
ANNEX B
ADVISORY AGREEMENT
SMITH BARNEY SERIES FUND
(Emerging Growth Portfolio)
October , 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 "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 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 understands 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 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 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
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 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 C
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 12/31/96
Smith Barney Series Fund # Emerging Growth Portfolio
(1) Smith Barney Inc.
(2) Robinson Humphrey, Inc.
ANNEX D
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) $5,810,837[WW]
Common Sense Trust
Common Sense Emerging Growth Fund 72.5 (2) 2,169 #[WW]
Van Kampen American Capital Life Investment Trust
Emerging Growth Portfolio $5.3 (4) (15,060)#[WW]
WRL Series Fund, Inc. Van Kampen American Capital
Emerging Growth Portfolio 392.6 (5) 1,838,573
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.
[WW]
(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.
* This fund has not yet completed a full year of operations.
N/A Not applicable
# This amount is net of either a voluntary advisory fee waiver
or expense reduction.
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 - This Proxy is Solicited on
Emerging Growth Portfolio 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 __, 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
