SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
Smith Barney Equity Funds
Smith Barney Funds, Inc.
Smith Barney Income Funds
Smith Barney Money Funds, Inc.
Smith Barney Muni Funds,
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Variable Funds
Smith Barney Small Cap Blend Fund, Inc.
(Name of Registrants as Specified In Its Charter)
MARC A. SCHUMAN
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
Dear Fellow Shareholder:
As an investor in the Smith Barney Mutual Fund family, you are cordially
invited to attend a special shareholder meeting(s) to be held at the time and
place specified in the attached Notice of Special Meeting. Shareholder
meetings are held by mutual fund companies periodically as issues arise
requiring shareholder approval. These meetings are being held to elect Board
Members due to attrition in the number of Board Members of the relevant Funds.
Enclosed for your review is a joint proxy statement that describes the
proposal that will be submitted to shareholders at the meeting. Because many
of our shareholders own shares of more than one Smith Barney Mutual Fund, a
joint proxy statement is being sent to you to reduce the preparation,
printing, handling and postage expenses that would be incurred if we sent out
separate proxy statements for each Fund.
Proposal One asks that you elect the Board of Directors or Trustees of each
Fund. The pages following Proposal One provide a brief description of each
nominee's background and current status, if any, with Smith Barney Mutual
Funds.
The Board of each Fund recommends that you vote "FOR" the election of each
of the nominees to the Board.
YOUR VOTE IS IMPORTANT!
We ask that you review the attached proxy statement carefully. If you do not
plan to attend the meeting, we ask that you complete, sign, date and return
the proxy card as soon as possible in the enclosed postage-paid envelope.
Thank you in advance for your attention and vote with regard to this important
proposal.
Sincerely,
Heath B. McLendon
Chairman
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Variable Account Funds
Smith Barney Money Funds, Inc.
Smith Barney Equity Funds
Smith Barney Income Funds
Smith Barney Muni Funds
Smith Barney Funds, Inc.
388 Greenwich Street
New York, New York 10013
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
----------------------
To Be Held on April 19 and May 12, 1999
----------------------
<PAGE>
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders of each of the
registered investment companies listed above (each a "Fund," and collectively,
the "Funds"), will be held on the dates and at the times and location
specified below (the "Special Meetings").
For the following Funds, the Special Meeting will be held in Conference Room
22B at 388 Greenwich Street, New York, New York on April 19, 1999 at the
following times:
<TABLE>
<S> <C>
Smith Barney Equity Funds......................................... 9:00 a.m.
Smith Barney Income Funds......................................... 9:30 a.m.
Smith Barney Muni Funds........................................... 10:00 a.m.
Smith Barney Variable Account Funds............................... 10:30 a.m.
</TABLE>
For the following Funds, the Special Meeting will be held in Conference Room
22B at 388 Greenwich Street, New York, New York on May 12, 1999 at the
following times:
<TABLE>
<S> <C>
Smith Barney Funds, Inc........................................... 9:00 a.m.
Smith Barney Money Funds, Inc..................................... 9:30 a.m.
Smith Barney Municipal Money Market Fund, Inc..................... 10:00 a.m.
Smith Barney Small Cap Blend Fund, Inc............................ 10:30 a.m.
</TABLE>
The Special Meetings are being held for the following purposes:
1. To elect Directors or Trustees of each Fund (Proposal 1).
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on February 24, 1999 has been fixed as the record date
for the determination of shareholders of each Fund entitled to notice of and
to vote at the Fund's Special Meeting and any adjournment thereof.
By Order of the Board of Directors or
Trustees,
Christina T. Sydor, Secretary
February 26, 1999
----------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED
TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD(S) IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH ON THE
FOLLOWING PAGE. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
2
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund(s) involved in validating your
vote if you fail to sign your proxy card(s) properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card(s).
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on
the proxy card(s).
3. All Other Accounts: The capacity of the individual signing the proxy
card(s) should be indicated unless it is reflected in the form of
registration. For example:
<TABLE>
<CAPTION>
Registration Valid Signature
------------ ---------------
<C> <S> <C>
Corporate Accounts
(1) ABC Corp............................................ ABC Corp.
(2) ABC Corp............................................ John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer............................. John Doe
(4) ABC Corp. Profit Sharing Plan....................... John Doe, Trustee
Trust Accounts
(1) ABC Trust........................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78...................................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA....................... John B. Smith
(2) Estate of John B. Smith............................. John B. Smith Jr.,
Executor
</TABLE>
3
<PAGE>
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Variable Account Funds
Smith Barney Money Funds, Inc.
Smith Barney Equity Funds
Smith Barney Income Funds
Smith Barney Funds, Inc.
Smith Barney Muni Funds
388 Greenwich Street
New York, New York 10013
SPECIAL MEETINGS OF SHAREHOLDERS
----------------------
To Be Held on April 19 and May 12, 1999
----------------------
<PAGE>
JOINT PROXY STATEMENT
INTRODUCTION
This document is a joint proxy statement for the registered investment
companies listed above (each a "Fund" and, collectively, the "Funds*"). This
joint proxy statement is being furnished to the shareholders of the Funds in
connection with the solicitation of proxies by each respective Fund's Board of
Directors or Trustees (each a "Board" and, collectively, the "Boards") to be
used at a special meetings of shareholders to be held on the dates specified
in the Notice of Special Meetings of Shareholders accompanying this joint
proxy statement or any adjournment or adjournments thereof (the "Meeting").
This joint proxy statement and accompanying proxy card(s) will first be mailed
to shareholders on or about March 3, 1999. Proxy solicitations will be made
primarily by mail, but proxy solicitations also may be made by telephone,
telegraph or personal interviews conducted by officers and employees of the
Funds; Salomon Smith Barney Inc. ("Salomon Smith Barney") and PFS
Distributors, Inc., dealers of shares of the Funds; SSBC Fund Management Inc.
("SSBC" or the "Manager") (formerly known as Mutual Management Corp.), the
investment adviser of each Fund except Smith Barney Small Cap Blend Fund, Inc.
(for which the investment adviser is Travelers Investment Management Company)
and/or First Data Investor Services Group, Inc. ("First Data"), transfer agent
of each Fund. Such representatives and employees will not receive additional
compensation for solicitation activities. Salomon Smith Barney has retained
the services of First Data to assist in the solicitation of proxies. The
aggregate cost of solicitation of the shareholders of all of the Funds is
expected to be approximately $4.3 million. The costs of the proxy solicitation
and expenses incurred in connection with the preparation of this joint proxy
statement and its enclosures will be borne by the Funds, with the Funds' cost
being allocated based in part on a Fund's assets and in part on its number of
shareholders. The Funds also will reimburse expenses of forwarding
solicitation materials to beneficial owners of shares of the Funds.
If the Funds record votes by telephone, they will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that their instructions have been properly recorded. Proxies voted by
telephone may be revoked at any time before they are voted in the same manner
that proxies voted by mail may be revoked.
Each share is entitled to one vote and any fractional share is entitled to a
fractional vote. If the enclosed proxy is properly executed and returned in
time to be voted at the Meeting, the shares represented thereby will be voted
in accordance with the instructions marked thereon. Unless instructions to the
contrary are marked thereon, a properly executed proxy will be voted FOR the
election of the
- -----------
* Some Funds are entities composed of one or more separate series funds, each
of which is referred to herein as a "Series".
2
<PAGE>
nominees for Directors or Trustees ("Board Members"). Abstentions will be
counted as present for purposes of determining a quorum, but will not be
counted as voting. Broker non-votes (i.e., proxies received from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote the shares on a particular
matter with respect to which the broker or nominees do not have discretionary
power) will be treated the same as abstentions. Any shareholder who has given
a proxy has the right to revoke it at any time prior to its exercise either by
attending the Meeting and voting his or her shares in person or by submitting
a letter of revocation or a later-dated proxy to the appropriate Fund at the
above address prior to the date of the Meeting.
In the event that a quorum is not present at the Meeting the persons named
as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the proposals
that are the subject of the Meeting, the percentage of votes actually cast,
the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect
to the reasons for the solicitation. Any adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. When voting on a proposed adjournment, the persons named
as proxies will vote for the proposed adjournment all shares that they are
entitled to vote with respect to each item, unless directed to vote "Against"
the item, in which case such shares will be voted against the proposed
adjournment with respect to that item.
There is only one proposal in this proxy statement, and the Funds do not
anticipate that any other proposals will be presented. However, should
additional proposals be properly presented, a shareholder vote may be taken on
one or more proposals prior to any adjournment if sufficient votes have been
received for approval.
Under the master trust agreement, charter or by-laws, as applicable, of each
Fund (other than Smith Barney Muni Funds and Smith Barney Small Cap Blend
Fund, Inc.) a quorum is constituted by the presence in person or by proxy of
the holders of a majority of the outstanding shares of a Fund entitled to vote
at the Meeting. Under the by-laws of Smith Barney Muni Funds and Smith Barney
Small Cap Blend Fund, Inc., a quorum is constituted by the presence in person
or by proxy of the holders of one-third of the outstanding shares of that Fund
entitled to vote at the Meeting.
The Boards of the respective Funds have fixed the close of business on
February 24, 1999 as the record date (the "Record Date") for the determination
of shareholders of the Funds entitled to notice of and to vote at the Meeting.
At the
3
<PAGE>
close of business on January 21, 1999, the following number of shares of each
Fund were issued and outstanding:
<TABLE>
<CAPTION>
Fund Shares
- ---- ------------------
<S> <C>
Smith Barney Equity Funds.................................... 48,404,895.443
Smith Barney Funds, Inc...................................... 121,304,621.866
Smith Barney Income Funds.................................... 961,124,261.088
Smith Barney Money Funds, Inc................................ 50,055,603,523.300
Smith Barney Muni Funds...................................... 3,655,373,414.584
Smith Barney Municipal Money Market Fund, Inc................ 7,342,738,314.930
Smith Barney Small Cap Blend Fund, Inc....................... 21,027,921.918
Smith Barney Variable Account Funds.......................... 1,082,162.923
</TABLE>
As of January 21, 1999, to the best knowledge of the Boards and the Funds,
no single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934) owned beneficially or of record more than 5%
of the outstanding shares of any Fund, or any Series of a Fund, except as set
forth in Annex I hereto. As of January 21, the officers and Board Members of
each Fund beneficially owned less than 1% of the shares of each Fund. John
Toolan owned 185,665.72 shares representing 1.084% of the Florida Portfolio,
which is a Series of Smith Barney Muni Funds.
This joint proxy statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate proxy statement for each Fund and, because some shareholders own
shares of more than one Fund, to avoid burdening shareholders with more than
one proxy statement.
Although the same persons are nominated for election to all of the Boards of
the respective Funds, each Fund will hold its own Meeting to elect directors
or trustees and shareholders of each Fund will vote separately. Shareholders
of each Fund will vote together as a single class of shareholders on Proposal
1 if the Fund has multiple Series outstanding. Separate proxy cards are
enclosed for each Fund in respect of which a single investor may be a
shareholder. Thus, if a nominee is elected by shareholders of one Fund and not
by shareholders of other Funds, the proposal will be implemented for one Fund
but not the other. It is therefore important that shareholders of more than
one Fund complete, date and sign each enclosed proxy card.
For Proposal 1, except in the case of Smith Barney Variable Account Funds,
the election of each nominee requires the affirmative vote of a plurality of
the votes cast at the Meeting in person or by proxy (a "Plurality Vote"). For
Smith Barney Variable Account Funds, the election of each nominee requires the
affirmative vote of a majority of shares voted on Proposal 1 (a "Majority
Vote"). Because abstentions and broker non-votes are not treated as shares
voted, abstentions and broker non-votes have no impact on Proposal 1.
With respect to Smith Barney Variable Account Funds (the "Insurance Funds"),
all of the outstanding shares are sold exclusively to, and held of record
4
<PAGE>
by, certain insurance company separate accounts (the "Insurance Cos."), for
the benefit of owners of contracts providing for participation in the accounts
("Contract Owners"). With respect to the Meeting, Contract Owners have the
right to instruct the Insurance Cos. how to vote shares attributable to the
value of their contracts allocated to the Insurance Funds, through the
accounts, on any matter affecting the Insurance Funds. 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
an Insurance Fund determined by multiplying the total number of shares of such
Insurance Fund outstanding by a fraction, the numerator of which is the number
of units held by such Contract Owner in such Insurance Fund and the
denominator of which is the total number of units of the Insurance Fund
outstanding on its Record Date. Units reflect the Contract Owner's ownership
in the accounts, while shares reflect the Insurance Cos.' ownership in the
Insurance Funds. 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.
PROPOSAL 1:
TO ELECT DIRECTORS OR TRUSTEES OF EACH FUND
The first proposal to be considered at the Meeting is the election of Board
Members of the Funds. Certain of the nominees are currently serving as a
director or trustee of the Board to which he or she is nominated and each of
the nominees other than Jane Dasher currently serves as a Board Member of more
than one fund that is part of the Smith Barney Mutual Fund family. Each
nominee has consented to serve as a Board member if elected at the Meeting. If
a designated Nominee declines or otherwise becomes unavailable for election,
however, the proxy confers discretionary power on the persons named therein to
vote in favor of a substitute nominee or nominees.
Over the past few years, a significant amount of attrition occurred in the
size of each Board due to the death of certain Board Members and the election
by certain Board Members of emeritus status under each Fund's emeritus
program. Therefore, the Board Members considered the appropriateness of
increasing the size of each Board to previous levels. At a meeting held on
December 4, 1998, the Board Members of each Fund unanimously approved the
election of each nominee based on the recommendation of the Board Members who
are not "interested persons" (as defined in the Investment Company Act of
1940) of the Funds ("Independent Board Members").
5
<PAGE>
If elected, the Board Members will hold office without limit in time,
subject to the emeritus program* of the Funds, and except that any Board
Member may resign, and any Board Member may be removed at any meeting of
shareholders called for that purpose by at least a majority of the votes
entitled to be cast for the election of Board Members. In case a vacancy shall
exist for any reason, the remaining Board members may fill the vacancy by
appointing another Board member. If at any time less than a majority of the
Board members holding office have been elected by shareholders, the Board
members then in office will call a shareholders meeting for the purpose of
electing Board members.
Each Board has an Audit Committee consisting of all the Independent Board
Members. The Audit Committee reviews the scope and results of a Fund's annual
audit with the Fund's independent accountants and recommends the engagement of
accountants. With respect to the selection and nomination of candidates to
serve as Independent Board Members from time to time, the then-current
Independent Board Members act as a Nominating Committee, and in their
discretion, may coordinate with Board Members who are "interested persons" in
the selection and election of Fund officers and may consider nominees
recommended by shareholders to serve as directors or trustees. Exhibit A
hereto sets forth certain information regarding compensation paid to each of
the Board members and the number of Board Meetings and Audit and Nominating
Committee Meetings each Fund has held in the calendar year ended December 31,
1998. The executive officers of each Fund are set forth in Exhibits B and C
hereto. Each officer of a Fund will serve at the discretion of the Board.
- -----------
* Each Fund has adopted an Emeritus Program for independent Board members,
pursuant to which each Fund's Board and the management of that Fund can
continue to benefit from the experience of long-time Board members who have
resigned form the board. Pursuant to this Program, new board members may
elect to provide services as an emeritus director at age 72 and, pursuant to
resolutions adopted by certain Funds, must elect such status, including the
nominees if elected, at age 80. Service as an emeritus director is limited
to 10 years. Each emeritus director agrees to be available for consultation
with the Board and management of the Fund and may attend Board meetings.
6
<PAGE>
Set forth in the following tables are the nominees for election as Board
Member of each Fund, together with certain other information. "Interested
persons" of a Fund, as defined under the Investment Company Act of 1940, by
virtue of their positions as officer of a Fund, or an officer or director of
SSBC or TIMCO, or one of their affiliates, are marked by an asterisk. Other
directorships include directorships, general partnerships or trusteeships of
companies that are required to report to the Securities and Exchange
Commission (the "SEC"), other than registered investment companies. For
purposes of this Proxy Statement, the address of each Board Member is P.O. Box
5128, Westborough, MA, 01581-5128.
NOMINEES FOR ELECTION TO THE BOARDS OF
Smith Barney Funds, Inc.
Smith Barney Equity Funds
Smith Barney Income Funds
Smith Barney Money Funds, Inc.
Smith Barney Muni Funds
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Variable Account Funds
<TABLE>
<CAPTION>
Name, Age, Principal Occupation and Other
Directorships During the Past Five Years
-----------------------------------------
<C> <S>
Lee Abraham, age 71
Retired; formerly Chairman and Chief Executive
Officer of Associated Merchandising Corporation, a
major retail merchandising and sourcing
organization; Director of Galey & Lord, an apparel
manufacturer, Liz Claiborne, a specialty retailer,
R.G. Barry Corp., a footwear manufacturer and
Signet Group plc, a specialty retailer.
Allan J. Bloostein, age 69
President of Allan J. Bloostein Associates, a
consulting firm; Retired Vice Chairman and Director
of The May Department Stores Company; Director of
CVS Corporation, a drugstore chain, and Taubman
Centers Inc., a real estate development company.
Jane F. Dasher, age 49
Investment Officer, Korsant Partners, 283 Greenwich
Avenue, Greenwich, Connecticut 06830; Prior to 1997
Independent Financial Consultant from 1975 to 1987
held various positions with Philips Morris
Companies, Inc. including Director of Financial
Services, Treasurers Department.
Donald R. Foley, age 76
Retired; Former Vice President of Edwin Bird Wilson,
Inc., an advertising agency.
Richard E. Hanson, Jr., age 57
Head of School, New Atlanta Jewish Community High
School, since September 1996; formerly Headmaster,
The Peck School, Morristown, New Jersey; prior to
July 1, 1994, Headmaster, Lawrence Country Day
School--Woodmere Academy, Woodmere, New York.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation and Other
Directorships During the Past Five Years
- -----------------------------------------
<S> <C>
Paul Hardin, age 67
Professor of Law at University of North Carolina at
Chapel Hill; a Director of The Summit
Bancorporation; Former Chancellor of the University
of North Carolina at Chapel Hill.
*Heath B. McLendon, age 65
Managing Director of Salomon Smith Barney; President
and Director of SSBC Fund Management Inc. and
Travelers Investment Adviser, Inc.
Roderick C. Rasmussen, age 72
Investment Counselor; Former Vice President of
Dresdner and Company Inc., investment counselors
John P. Toolan, age 68
Retired; Former Director and Chairman of Smith
Barney Trust Company, Director of Smith Barney
Holdings Inc., and various subsidiaries; Senior
Executive Vice President, Director and Member of
the Executive Committee of Smith Barney; Director
of John Hancock Funds.
</TABLE>
BOARD MEMBER SINCE
<TABLE>
<CAPTION>
Smith Barney Smith Barney Smith Barney
Smith Barney Municipal Small Cap Variable
Smith Barney Money Funds, Smith Barney Money Market Blend Fund, Account
Funds, Inc. Inc. Muni Funds Fund, Inc. Inc. Funds
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Foley......... 1987 1974 1985 1975 1989 1987
Paul Hardin............. 1994 1994 1994 1994 1994 1994
Roderick Rasmussen...... 1981 1982 1985 1982 1989 1987
John P. Toolan.......... 1992 1982 1985 1982 1989 1987
Heath B. McLendon....... 1995 1995 1995 1995 1995 1995
</TABLE>
<TABLE>
<CAPTION>
Smith Barney
Equity Smith Barney
Funds Income Funds
------------ ------------
<S> <C> <C>
Lee Abraham........................................... 1993 1993
Allen J. Bloostein.................................... 1986 1985
Richard E. Hanson..................................... 1986 1985
Heath B. McLendon..................................... 1986 1985
</TABLE>
REQUIRED VOTE
Election of each nominee as a Board Member must be approved by a Majority
Vote for the Variable Account Funds, and by a Plurality Vote for all other
Funds.
THE BOARD OF EACH FUND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES TO THE BOARD.
ADDITIONAL INFORMATION
The name and address of each Fund's investment adviser(s) and principal
underwriter are set forth in Exhibit C hereto.
8
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
The Funds do not hold regular shareholders meetings. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the Fund at the address set forth on the cover of this joint proxy statement.
Proposals must be received at a reasonable time prior to the date of a meeting
of shareholders to be considered for inclusion in the materials for a Fund's
meeting. Timely submission of a proposal does not, however, necessarily mean
that such proposal will be included.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% (25% in the case of some Funds) of each
Fund's outstanding voting securities (as defined in the Investment Company Act
of 1940) may require the calling of a meeting of shareholders for the purpose
of voting on the removal of any Board member of the Fund. Meetings of
shareholders for any other purpose also shall be called by the Board members
when requested in writing by shareholders holding at least 10% (25% in the
case of some Funds) of the shares then outstanding or, if the Board members
shall fail to call or give notice of any meeting of shareholders for a period
of 30 days after such application, shareholders holding at least 10% of the
shares then outstanding may call and give notice of such meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Funds do not intend to present any other business at the Meeting, nor
are they aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy card(s) will vote thereon in accordance with their
judgment.
February 26, 1999
A FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY,
TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO A FUND
BY CALLING (800) 451-2010 OR BY WRITING TO A FUND, 388 GREENWICH STREET, NEW
YORK, NEW YORK 10013.
----------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN EACH PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PAID ENVELOPE.
9
<PAGE>
EXHIBIT A
Board Member Compensation,
Board and Committee Meetings,
Board Members/Nominees
<TABLE>
<CAPTION>
Amounts Paid During Calendar
Year Ended December 31, 1998
From Fund to Board Member
Roderick
Fund Donald Foley* Paul Hardin Rasmussen John Toolan*
---- ------------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Smith Barney Equity Funds... N/A N/A N/A N/A
Smith Barney Income Funds... N/A N/A N/A N/A
Smith Barney Funds, Inc..... $ 3116.86 $ 2,716.86 $ 3116.86 $ 2,816.96
Smith Barney Money
Funds, Inc................ 33,332.76 32,932.84 33,332.84 33,032.84
Smith Barney Muni Funds..... 8,693.86 7,693.81 8,693.81 7,793.81
Smith Barney Municipal Money
Market Fund, Inc.......... 5,577.82 5,377.85 5,577.85 5,477.85
Smith Barney Small Cap Blend
Fund Inc.................. 847.10 647.09 847.09 747.09
Smith Barney Variable
Account Funds............. 1,912.64 1,512.63 1,912.63 1,612.63
---------- ---------- ---------- ----------
Total Compensation**........ $57,100.00 $53,700.00 $57,100.00 $54,700.00
========== ========== ========== ==========
</TABLE>
- -----------
* Pursuant to the Funds' deferred compensation plan, the indicated Board
Members have elected to defer the payment of the following amounts of
their compensation from the following Funds:
<TABLE>
<CAPTION>
Deferred from the Fund
------------------------
Fund Donald Foley John Toolan
---- ------------ -----------
<S> <C> <C>
Smith Barney Funds, Inc............................. $ 608.43 $ 2,816.96
Smith Barney Money Funds, Inc....................... $15,666.38 $33,032.84
Smith Barney Muni Funds............................. $ 1,796.93 $ 7,793.81
Smith Barney Municipal Money Market Fund, Inc....... $ 2,438.91 $ 5,477.85
Smith Barney Small Cap Blend Fund Inc............... $ 73.55 $ 747.09
Smith Barney Variable Account Funds................. $ 6.32 $ 1,612.63
</TABLE>
Mr. Foley and Mr. Toolan deferred the following amounts of their total
compensation from the Smith Barney Mutual Fund Complex: Donald Foley:
$21,000, and John Toolan: $54,700.
** Reflects amounts paid to each Board Member for the calendar year ended
1998 and includes compensation from other open-end and/or closed-end
investment companies within the Smith Barney Mutual Fund Complex that are
not included in this Proxy.
A-1
<PAGE>
<TABLE>
<CAPTION>
Number of Number of
Number of Audit Nominating
Board Committee Committee
Meetings Held Meetings Held Meetings Held
during Year During Year During Year
Ended Ended Ended
Allan Richard Heath December 31, December 31, December 31,
Bloostein Lee Abraham Hanson McLendon 1998 1998 1998
---------- ----------- ---------- -------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$11,080.00 $11,040.00 $11,080.00 0 7 1 1
36,770.00 36,710.00 36,870.00 0 12 2 1
N/A N/A N/A 0 7 1 1
N/A N/A N/A 0 7 1 1
N/A N/A N/A 0 8 1 1
N/A N/A N/A 0 7 1 1
N/A N/A N/A 0 7 1 1
N/A N/A N/A 0 7 1 1
---------- ---------- ---------- --- --- --- ---
$90,500.00 $47,750.00 $47,950.00 0 -- -- --
========== ========== ========== === === === ===
</TABLE>
A-2
<PAGE>
EXHIBIT B
Executive Officers of the Funds
<TABLE>
<CAPTION>
Name of Executive Principal Occupation And
Officer (Age) Business Experience For Past 5 Years
----------------- ------------------------------------
<C> <S>
Joseph Benevento (30) Vice President of Salomon Smith Barney.
Sandip A. Bhagat (38) President of Travelers Investment Management Company
("TIMCO"); prior to 1995, Senior Portfolio Manager for
TIMCO.
John C. Bianchi (43) Managing Director of Salomon Smith Barney.
Robert Brady (59) Managing Director of Salomon Smith Barney.
Ellen S. Cammer (44) Managing Director of Salomon Smith Barney.
Peter M. Coffey (54) Managing Director of Salomon Smith Barney.
James Conroy (47) Managing Director of Salomon Smith Barney.
Lewis E. Daidone (41) Managing Director of Salomon Smith Barney; Director
and Senior Vice President of SSBC Fund Management Inc.
("SSBC") and Travelers Investment Adviser, Inc.
("TIA"); Senior Vice President and Treasurer of Smith
Barney Mutual Funds.
Joseph P. Deane (51) Managing Director of Salomon Smith Barney.
R. Jay Gerken (47) Managing Director of Salomon Smith Barney.
Charles P. Graves (36) Managing Director of Salomon Smith Barney.
Martin R. Hanley (33) Vice President of Salomon Smith Barney.
Simon Hildreth (44) Managing Director of Salomon Smith Barney; prior to
1994, Director of Mercury Asset Management.
Neil Mack (35) Director of Salomon Smith Barney.
Heath B. McLendon (65) Managing Director of Salomon Smith Barney; Director of
59 investment companies associated with Salomon Smith
Barney; President and Director of SSBC and TIA.
Robert E. Swab (43) Director of Salomon Smith Barney.
Christina T. Sydor Managing Director of Salomon Smith Barney; General
(48) Counsel and Secretary of SSBC and TIA and Secretary of
Smith Barney Mutual Funds.
Phyllis M. Zahorodny Managing Director of Salomon Smith Barney.
(41)
</TABLE>
B-1
<PAGE>
EXHIBIT C
NAMES AND ADDRESSES OF INVESTMENT ADVISERS, DISTRIBUTORS, ADMINISTRATORS AND
OFFICERS
Unless otherwise indicated in this Exhibit C, the following information applies
to all Funds:
INVESTMENT ADVISER AND EXECUTIVE OFFICERS*:
ADMINISTRATOR:
Heath B. McLendon, Chairman of the Board,
SSBC Fund Management President and Chief Executive Officer
Inc. 388 Greenwich
Street New York, NY Lewis E. Daidone, Senior Vice President and
10013 Treasurer
DISTRIBUTOR: Christina T. Sydor, Secretary
Irving P. David and/or Paul Brook, Controller
CFBDS, Inc. 21 Milk
Street, 5th Floor
Boston, MA 02109-5408
<TABLE>
<CAPTION>
Investment Advisers,
Fund Distributors and Administrators Executive Officers*
---- ------------------------------- -------------------
<S> <C> <C>
Smith Barney Equity Robert J. Brady, CFA, Vice President
Funds and Investment Officer
Ellen S. Cammer, Investment Officer,
R. Jay Gerken, Vice President and
Investment Officer
Smith Barney Income Investment Sub-Advisors for John C. Bianchi, Vice President and
Funds certain Series: Diversified Investment Officer
Strategic Income Fund: James Conroy, Vice President and
Global Capital Management, Investment Officer
10 Piccadilly, London WIV 9LA, Peter Coffey, Vice President and
United Kingdom Investment Officer
Premium Total Return Fund: Joseph Deane, Vice President and
Boston Partners Investment officer
100 Drakes Landing Road Charles P. Graves, Vice President
Greenbrae, CA 94904 and
Investment Officer
Martin Hanley, Investment Officer
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
Investment Advisers,
Fund Distributors and Administrators Executive Officers*
---- ------------------------------- -------------------
<S> <C> <C>
Neil Mack, Investment Officer
Simon Hildreth, Investment Officer
Harry Rosenbluth, Investment Officer
Robert E. Swab, Vice President and
Investment Officer
Phyllis M. Zahorodny, Vice President
and Investment Officer
Smith Barney Municipal Joseph Deane, Vice President and
Money Market Fund, Inc. Investment Officer
Joseph Benevento, Vice President and
Investment Officer
Smith Barney Small Cap Travelers Investment Management Sandip A. Bhagat, Vice President and
Blend Fund, Inc. Company Investment Officer
One Tower Square Hartford, CT
06183-2030
Smith Barney Funds, Inc. Ellen Sonsino, Vice President and
Investment Officer
James Conroy, Vice President and
Investment Officer
Smith Barney Money Phyllis M. Zahorodny, Vice President
Funds, Inc. and Investment Officer
Martin R. Hanley, Vice President and
Investment Officer
Smith Barney Muni Funds Peter M. Coffey, Vice President and
Investment Officer
Joseph Deane, Vice President and
Investment Officer
Joseph Benevento, Vice President and
Investment Officer
Smith Barney Variable Ellen Sonsino, Vice President and
Account Funds Investment Officer
James Conroy, Vice President and
Investment Officer
</TABLE>
- ------
* Please refer to Exhibit B for a description of each officer's background.
C-2
<PAGE>
ANNEX I
<TABLE>
<CAPTION>
Name and Amount of Percent
Address of Beneficial of Fund
Fund Beneficial Owner Ownership (or Series*)
---- ---------------- ---------- ------------
<C> <S> <C> <C>
Smith Barney Equity Funds
Smith Barney Large Cap Smith Barney 5,041,006,415 17.15%
Blend Fund--Class Y Concert Allocation
Series Inc.
Growth Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
44D
Lester, PA 19113-1552
Smith Barney Large Cap Smith Barney 1,950,174,154 6.63%
Blend Fund--Class Y Concert Allocation
Series Inc.
High Growth Portfolio
PNC Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Large Cap Smith Barney 1,576,510,564 5.36%
Blend Fund--Class Y Concert Allocation
Series Inc.
Balanced Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Funds, Inc.
Large Cap Value
Fund--Class Y Smith Barney 4,503,130,643 6.29%
Concert Allocation
Series Inc.
Growth Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Large Cap Value State Street Bank &
Fund--Class Z Trust Cust 10,248,676,090 14.32%
The Travelers Group 401k
Savings Plan
Attn: Rick Vest
225 Franklin Street
Boston, MA 02101
Short-Term High Grade Samuel Earl Upchurch,
Bond Fund--Class A Jr. 1,652,433,250 5.86%
Regions Financial Group
P.O. Box 10247
Birmingham, AL 35202-
0247
Short-Term High Grade
Bond Fund--Class Y Smith Barney 5,928,003,703 21.02%
Concert Allocation
Series Inc.
Balanced Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
</TABLE>
I-1
<PAGE>
ANNEX I
<TABLE>
<CAPTION>
Name and Amount of Percent
Address of Beneficial of Fund
Fund Beneficial Owner Ownership (or Series*)
---- ---------------- ---------- ------------
<C> <S> <C> <C>
Short-Term High Grade
Bond Fund--Class Y Smith Barney 1,710,365,549 6.07%
Concert Allocation
Series Inc.
Income Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Short-Term High Grade
Bond Fund--Class Y Smith Barney 1,525,710,921 5.41%
Concert Allocation
Series Inc.
Conservative Portfolio
PNC Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Short-Term High Grade
Bond Fund--Class Y Smith Barney 1,423,560,428 5.05%
Concert Allocation
Series Inc.
Select Balanced
Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Income Funds
Smith Barney Convertible Smith Barney 3,452,941,735 35.37%
Fund--Class Y Concert Allocation
Series Inc.
Balanced Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Convertible Smith Barney 905,635,710 9.28%
Fund--Class Y Concert Allocation
Series Inc.
Conservative Portfolio
PNC Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Convertible Smith Barney 831,050,972 8.51%
Fund--Class Y Concert Allocation
Series Inc.
Select Balanced
Portfolio PNC Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Muni Funds
Limited Term
Portfolio--Class Y Robert E. Kelly and 3,782,991,202 6.77%
Maria N. Kelly Ten in
Com
6918 75th Street SW
Tacoma, WA 98498-6332
</TABLE>
I-2
<PAGE>
ANNEX I
<TABLE>
<CAPTION>
Name and Amount of Percent
Address of Beneficial of Fund
Fund Beneficial Owner Ownership (or Series*)
---- ---------------- ---------- ------------
<C> <S> <C> <C>
Pennsylvania
Portfolio--Class A Vernon F. Alibert and 268,004,367 6.27%
Dolores V. Alibert
JTWROS
1420 Conchester Hwy
Boothwyn, PA 19061-2103
Smith Barney Small Cap
Blend Fund, Inc.--Class Y Smith Barney 10,571,039.129 50.27%
Concert Allocation
Series Inc.
High Growth Portfolio
PNC Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Small Cap
Blend Fund, Inc.--Class Y Smith Barney 3,326,014.923 15.82%
Concert Allocation
Series Inc.
Growth Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Small Cap
Blend Fund, Inc.--Class Y Smith Barney 1,098,127.251 5.22%
Concert Allocation
Series Inc.
Select High Growth
Portfolio PNC
Bank, N.A.
Attn: Beverly Timson
200 Stevens Drive Suite
440
Lester, PA 19113-1522
Smith Barney Variable Account
Funds
Income and Growth Portfolio Nationwide Life 981,122.973 100.00%
Insurance Company
PO Box 182029
Columbus OH 43218-2029
Reserve Account Portfolio Nationwide Life 7,663.854 100.00%
Insurance Company
PO Box 182029
Columbus OH 43218-2029
U.S. Government/High Quality
Securities Portfolio Nationwide Life 93,376.096 100.00%
Insurance Company
PO Box 182029
Columbus OH 43218-2029
</TABLE>
*Some Funds are composed of one or more separate series, each of which is
referred to herein as a "Series". This table provides information concerning
beneficial owners of at least 5% of a Fund's total outstanding shares of all
Series, or of any Series. The percentage shown in this column reflects the
percentage ownership by Series owned, if applicable.
I-3
FORM OF PROXY CARD
SERIES NAME AND FUND NAME PRINTS HERE PROXY SOLICITED BY
MEETING DATE: AND TIMES PRINTS HERE THE BOARD OF DIRECTORS
The undersigned holder of shares of the Fund referenced above
hereby appoints Heath B. McLendon, Christina Sydor, Gordon Swartz
and Marc Schuman, attorneys with full powers of substitution and
revocation, to represent the undersigned and to vote on behalf of
the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at the offices of the Fund, 388 Greenwich Street,
New York, New York at the date and time indicated above and at
any adjournments thereof. The undersigned hereby acknowledges
receipt of the enclosed Notice of Special Meeting and Proxy
Statement and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. In their discretion, the
proxies are authorized to vote on such other business as may
properly come before the Special Meeting. A majority of the
proxies present and acting at the Special Meeting in person or by
substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of the power and authority of
said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
Date: _______________________________ 1999
PLEASE SIGN IN BOX BELOW
Please sign exactly as your name appears on
this Proxy. If joint owners, EITHER may sign
this Proxy. When signing as Attorney,
executor, administrator trustee, guardian or
corporate officer, please give your full title:
______________________________________
Signature(s) Titles(s), if applicable
NOTE YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSES
SIDE
Please vote by filling in the appropriate box below
1. To elect Directors of Trustees of the Fund.
FOR ALL FOR ALL WITHHOLD
EXCEPT ALL
AS MARKED
BELOW
/ / / / / /
(1) Lee Abraham, (2) Allan J. Bloostein, (3) Jane F. Dasher,
(4) Donald R. Foley, (5) Richard E. Hanson, Jr., (6) Paul
Hardin, (7) Heath B. McLendon, (8) Roderick C. Rasmussen and
(9) John P. Toolan
To withhold authority to vote for any individual nominee,
print that nominee's Name on the line below.
- -----------------------------------------------------------------
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
U:\legal\boards\sbf\1999\misc\proxycard
