SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [XXX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ XXX] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
TRAVELERS SERIES FUND INC.
(Name of Registrant as Specified In Its Charter)
MICHAEL KOCUR
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[XXX ] 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:
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio
388 Greenwich Street, New York, New York 10013
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On February 7, 1997
TO THE SHAREHOLDERS:
A special meeting of shareholders (the "Meeting") of the AIM
Capital Appreciation Portfolio (the "Portfolio") of the Travelers Series
Fund Inc. (the "Fund") will be held on Friday, February 7, 1997 at 2:00
p.m. local time at 388 Greenwich Street, New York, New York, for the
following purposes:
(1) To approve a new Sub-Advisory Agreement with A I M Capital
Management, Inc.;
(2) To eliminate the fundamental investment policy restricting
investments in other investment companies and to amend a related
fundamental investment policy; and
(3) To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Shareholders of record at the close of business on December 6,
1996 are entitled to vote at the special meeting and any adjournments.
If you attend the special meeting, you may vote your shares in person.
If you do not expect to attend the special meeting, please fill in,
date, sign and return the proxy in the enclosed envelope which requires
no postage if mailed in the United States.
Your vote is important and your participation in the
governance of the Portfolio does make a difference.
The proposals have been unanimously approved by the Directors of the
Fund, who recommend you vote "FOR" the proposals. 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.
December 26, 1996
Heath B. McClendon
Chairman of the Board of Directors
THE FUND 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 FUND 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,DATE AND
SIGN THE PROXY CARD, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK THAT YOU MAIL YOUR PROXY PROMPTLY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU CAST YOUR VOTE:
- - FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
- - FOR ELIMINATING THE FUNDAMENTAL INVESTMENT POLICY RESTRICTING
INVESTMENTS IN OTHER INVESTMENT COMPANIES AND AMENDING A RELATED
FUNDAMENTAL INVESTMENT POLICY.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio
388 Greenwich Street, New York, New York 10013
PROXY STATEMENT
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On February 7, 1997
The accompanying proxy is solicited by the Board of Directors
of Travelers Series Fund Inc. (the "Fund") on behalf of the AIM Capital
Appreciation Portfolio (the "Portfolio"), in connection with the special
meeting of shareholders of the Fund to be held at the offices of
Travelers Investment Adviser, Inc. ("TIA" or the "Manager"), 388
Greenwich Street, New York, New York at 2:00 p.m. local time on February
7, 1997 (the "Meeting"). A shareholder can revoke the proxy prior to its
use by appearing at the Meeting and voting in person, by giving written
notice of such revocation to the Secretary of the Fund, or by returning
a subsequently dated proxy.
The proposals to be presented at the Meeting are as follows:
(1) To approve a new Sub-Advisory Agreement with A I M Capital
Management, Inc.; and
(2) To eliminate the fundamental policy restricting investments in
other investment companies and to
amend a related fundamental investment policy.
The Board has fixed the close of business on December 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 (the
"Shares"). 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 FUND 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 DIRECTED TO THE FUND BY CALLING (800) 224-7523 OR BY WRITING
TO THE FUND, 388 GREENWICH STREET, NEW YORK, NEW YORK 10013.
There are no persons who, to the knowledge of the Fund, owned
beneficially more than 5% of the Portfolio's outstanding Shares as of
December 6, 1996. As of the Record Date, the officers and Directors of
the Fund beneficially owned less than 1% of the outstanding shares of
the Portfolio.
Voting
Shareholders of record at the close of business on December 6,
1996 (the "Record Date") will be entitled to one vote per share on all
business of the Special Meeting. The Portfolio had
shares of its Common Stock outstanding on the Record Date. It is
expected that this proxy statement and the accompanying proxy will be
first sent to shareholders on or about December 26, 1996.
The favorable vote of the holders of a "majority of the
outstanding voting securities" of the Portfolio, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") is required
to approve the Portfolio's new Sub-Advisory Agreement (Proposal 1), and
to approve the elimination of the Portfolio's fundamental investment
policy restricting investments in other investment companies and to
amend a related fundamental investment policy (Proposal 2). The 1940 Act
defines a "majority of the outstanding voting securities" of a Portfolio
to mean the lesser of (a) the vote of holders of 67% or more of the
shares of Common Stock of the Portfolio present in person or by proxy at
the Special Meeting, if the holders of more than 50% of the outstanding
voting shares of the Portfolio are present in person or by proxy, or (b)
the vote of the holders of more than 50% of the outstanding Common Stock
of the Portfolio.
FOR APPROVAL OF THE NEW SUBADVISORY AGREEMENT AND FOR THE ELIMINATION
OF THE FUNDAMENTAL POLICY RESTRICTING INVESTMENTS IN OTHER INVESTMENT
COMPANIES AND AMENDING A RELATED FUNDAMENTAL INVESTMENT POLICY.
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. Only owners of variable
annuity contracts issued by The Travelers Insurance Company and its
subsidiary, Travelers Life and Annuity Company (collectively "Travelers
Insurance"), that were invested in the Portfolio as of the close of
business on the Record Date are considered "shareholders of record" and
are entitled to notice of and to vote at the Meeting. Each share of
stock is entitled to one vote for each proposal.
Travelers Insurance is the sole legal shareholder of the
Portfolio, since the Portfolio technically offers its shares only for
purchases by Travelers Insurance's separate accounts on behalf of its
variable contracts. Nevertheless, with respect to the meeting, Travelers
Insurance will solicit and accept timely voting instructions from its
contract owners who own units in a Travelers Insurance separate account
that correspond to shares in the Portfolio and vote them in accordance
with such instructions. Travelers Insurance will vote all Portfolio
shares related to the variable contracts for which it has not received
timely voting instructions in the same proportion as the shares for
which it has received timely instructions.
Proxies received prior to the Meeting on which no vote is
indicated will be voted "for" the proposal. For purposes of determining
the presence of a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions
from the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not
have discretionary power) will be treated as shares that are present but
which have not been voted. The Shares represented by a proxy that
represents a broker non-vote or an abstention will have the same effect
as Shares voted "against" the proposal. 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.
Shareholders who execute proxies may revoke them at any time
before they are voted by filing with the Fund 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 Fund knows of no business other than that mentioned in
Proposals 1and 2 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 SUB-ADVISORY AGREEMENT
Introduction
Shareholders are being asked to approve a new Sub-Advisory
Agreement (the "New Agreement") that has no material changes in its
terms and conditions, no changes in fees, and no material changes in the
way the Portfolio is managed, advised or operated.
A I M Capital Management, Inc. ("AIM") has served as sub-
advisor to the Portfolio from October 10, 1995 pursuant to a sub-
advisory agreement (the "Current Agreement") executed on October
10,1995. On June 4, 1996, the Board of Directors of the Fund, including
a majority of the directors who are not interested persons of the
Portfolio, TIA or AIM (the "Independent Directors"), voted to continue
the Current Agreement for an additional year until June 1997. The
current agreement was last approved by Shareholders of the Portfolio at
a meeting held on October 10, 1995.
It is necessary to obtain shareholder approval of the New
Agreement because of the technical requirements of the 1940 Act that
apply to the merger (the "Merger") described below under "Merger of AIM
Management and INVESCO." Because the Merger will result in a transfer of
more than 25% of the outstanding voting shares of A I M Management Group
Inc. ("AIM Management"), the indirect parent of AIM, an "assignment" of
the Current Agreement will occur under the 1940 Act. The Current
Agreement provides that it will terminate automatically upon its
assignment, as required by the 1940 Act. As discussed below, the Merger
will not cause any change in the operation of AIM's business. The Merger
has no affect on the current management agreement between the Fund and
TIA with respect to the Portfolio.
At a meeting held on December 3, 1996, the Board of Directors
of the Fund, including a majority of the Independent Directors,
approved, subject to shareholder approval, the New Agreement. A copy of
a form of the New Agreement is attached hereto as Annex A. In approving
the New Agreement, the Board of Directors took into account the terms of
the Merger and the fact that the provisions of the Current Agreement and
the New Agreement are substantially identical. A description of such
agreements is provided below under "Terms of the Sub-Advisory
Agreements." Such description is only a summary and is qualified by
reference to the attached Annex A.
If the conditions to the Merger are not met or waived or if
the Merger Agreement between AIM Management and INVESCO is terminated,
the Merger will not be consummated, and the Current Agreement will
remain in effect. If the New Agreement is approved, and the Merger is
thereafter consummated, the New Agreement will be executed and become
effective on the Closing Date, as defined below. In the event that the
New Agreement is not approved and the Merger is consummated,the Board
will determine what action to take, in any event subject to the approval
of shareholders of the Portfolio.
Merger of AIM Management and INVESCO
On November 4, 1996, AIM Management (the parent of AIM)
entered into a merger agreement (the "Merger Agreement") with INVESCO
plc ("INVESCO"). The Merger Agreement provides for the merger of AIM
Management into INVESCO Group Services, Inc. ("IGS"), a wholly-owned
U.S. subsidiary of INVESCO, or into another wholly-owned U.S. subsidiary
of INVESCO (in either case, "INVESCO Sub").
INVESCO is an English holding company whose shares are
publicly traded on the London Stock Exchange. American Depository
Receipts evidencing such shares are traded on the New York Stock
Exchange. INVESCO and its subsidiaries are an independent investment
management group with a major presence in the institutional investment
management and retail mutual fund businesses in the United States,
Europe and the Pacific. INVESCO's North American subsidiaries manage
individualized investment portfolios of equity, fixed income and real
estate securities for institutional clients through five business units.
Each unit utilizes a particular investment style in managing assets, and
most of these units also serve as advisor or sub-advisor to one or more
of INVESCO's U.S. mutual funds. INVESCO's European region serves both
institutional and individual investors through six major business units
with facilities in the United Kingdom, the Channel Islands, Luxembourg
and France. INVESCO has also established relationships with substantial
financial organizations in Italy, the Netherlands, Spain and Portugal.
INVESCO's Pacific region manages assets of clients based in Asia and
Australia on a local, regional or global basis. It also manages
investments in the region for INVESCO clients based outside the region.
At September 30, 1996, INVESCO's assets under management were in excess
of $90 billion.
Following the Merger, INVESCO will be renamed AMVESCO, plc
("AMVESCO"). AMVESCO will consist of two major complementary businesses,
one comprising principally its United States institutional and
international businesses, and the other comprising principally its
United States retail mutual fund and defined contribution plan
businesses. Each of these businesses will be directed by a separate
management committee. Charles Brady, the Chairman of INVESCO, will head
the management committee for AMVESCO's U.S. institutional and
international businesses. Robert H. Graham, President and Chief
Operating Officer of AIM Management, will become President and Chief
Executive Officer of AIM Management's successor and will head the
management committee directing AMVESCO's United States retail
businesses. Charles T. Bauer, currently Chairman and Chief Executive
Officer of AIM Management, will become Vice Chairman of AMVESCO and
Chairman of AIM Management's successor. AIM Management and INVESCO
believe that their businesses are highly complementary and that the
expected benefits resulting from the Merger include broader product
range, expanded distribution capability, increased globalization,
greater capacity in defined contribution plans, and increased financial
strength and independence.
AIM has advised the Portfolio that the Merger is not
expected to have a material effect on the operations of the Portfolio or
on its shareholders as a result of the Merger. No material change in
investment philosophy, policies or strategies are currently envisioned.
Following the Merger, AIM will continue to be an indirect wholly owned
subsidiary of the successor to AIM Management. The Merger Agreement does
not, by its terms, contemplate any changes, other than changes in the
ordinary course of business, in the management or operation of AIM
relating to the Portfolio, the personnel managing the Portfolio or other
services provided to and business activities of the Portfolio. The
Merger also is not expected to result in material changes in the
business, corporate structure or composition of the senior management or
personnel of AIM. Based on the foregoing, AIM does not anticipate that
the Merger will cause a reduction in the quality of services provided to
the Portfolio, or have any adverse effect on AIM's ability to fulfill
its respective obligations under the New Agreement, or to operate its
businesses in a manner consistent with its current practices.
Under the Merger Agreement, each of INVESCO and INVESCO Sub
has covenanted and agreed that it will comply, and use all reasonable
efforts to cause compliance on behalf of its affiliates, with the
provisions of Section 15(f) of the 1940 Act. Section 15(f) provides, in
pertinent part, that an investment adviser or subadviser and its
affiliates may receive any amount of benefit in connection with a sale
of securities of, or a sale of any other interest in, such investment
adviser that results in an "assignment" of an investment advisory
contract as long as two conditions are met. First, no "unfair burden"
may be imposed on the investment company as a result of the Merger. 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 investment adviser) or
any interested person of any such adviser or subadviser 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 or 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 fees for bona
fide principal underwriting services). No such compensation arrangements
are contemplated in connection with the Merger.
The second condition is that, for a period of three years
after the transaction occurs, at least 75% of the members of the board
of directors of the investment company advised by such adviser or
subadviser are not "interested persons" (as defined in the 1940 Act) of
the new or the old investment adviser or subadviser. The Board meets
this 75% requirement.
Board of Directors Evaluation
The Board of Directors of the Fund, including a majority of
the Independent Directors, has determined that by approving the New
Agreement on behalf of the Portfolio, the Portfolio can best assure
itself that the services currently provided by AIM will continue after
the Merger without interruption or change. The Board of Directors has
determined that, as with the Current Agreement, the New Agreement will
enable the Portfolio to continue to obtain services of high quality at a
cost deemed appropriate, reasonable and in the best interest of the
Portfolio and its shareholders.
The Board, including the independent Directors approved the
proposed New Agreement among the Fund on behalf of the Portfolio, the
Manager and AIM on December 3, 1996, the form of which is attached
hereto as Annex A. The form of the proposed New Agreement is
substantially identical to the Current Agreement among the Fund on
behalf of the Portfolio, the Manager and AIM, except for the dates of
execution, effectiveness and termination.
The investment subadvisory fee as a percentage of net assets
payable by the Portfolio will be the same under the New Agreement as
under the Current Agreement. If the investment subadvisory fee under the
New Agreement had been in effect for the Portfolio's most recently
completed fiscal year, advisory fees paid to AIM by the Portfolio would
have been identical to those paid under the Current Agreement.
The Board met on December 3, 1996, at which meeting the
Directors, including the Disinterested Directors, concluded that if the
Acquisition occurs, entry by the Fund into a New Agreement would be in
the best interest of the Portfolio and the shareholders of the
Portfolio. The Board, including the Disinterested Directors, unanimously
approved the New Agreement for the Portfolio and recommended such
agreement for approval by the shareholders of the Portfolio at the
Meeting. The New 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 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 Agreement, the Board took into account
that the Portfolio's Current Agreement and its New Agreement, including
the terms relating to the services to be provided thereunder by AIM and
the fees and expenses payable by the Portfolio, are substantially
identical except for the dates of execution, effectiveness and
termination.
The Board also considered the terms of the Merger
Agreement and the possible effects of the Acquisition upon AIM
Management and AIM's organization and upon the ability of AIM to provide
advisory services to the Portfolio. The Board considered the skills and
capabilities of AIM and representations that no material change was
planned in the current management or facilities of AIM. In this regard,
the Board was informed of the resources of INVESCO to be made available
to AIM Management and AIM, after giving effect to the Merger, to secure
for the Portfolio quality investment research, investment advice and
other client services. The Board considered the financial resources of
INVESCO and also considered the reputation, expertise and resources of
INVESCO and its affiliates in domestic and international financial
markets. The Board considered the continued employment of members of
senior management of AIM and AIM Management pursuant to employment and
retention agreements and the incentives provided to such members and
other key employees of AIM to be important to help to assure continuity
of the personnel primarily responsible for maintaining the quality of
investment subadvisory and other services for the Portfolio.
In evaluating the New Agreement, the Board of Directors
considered that there are no differences between the terms and
conditions of the Portfolio's Current Agreement and the New Agreement,
including the terms relating to the services to be provided by AIM and
the fees and expenses payable by the Portfolio, except for the dates of
execution, effectiveness and termination. The Board of Directors also
considered the terms of the Merger, including the possible effects of
the Merger upon AIM and upon the ability of AIM to provide advisory
services to the Portfolio.
Based upon its review, the Board of Directors concluded
that the New Agreement is in the best interest of the Portfolio and its
shareholders. The Board of Directors also concluded that as a
consequence of the Merger, the operations of AIM and its ability to
provide services to the Portfolio would not be diminished. Accordingly,
after considering the factors they deemed relevant, the Board of
Directors, including a majority of the Independent Directors,
unanimously approved the New Agreement to take effect upon receipt of
shareholder approval and voted to recommend its approval to the
shareholders of the Portfolio.
Additional Terms of the Merger Agreement
AIM Management will merge into INVESCO Sub for consideration
valued at November 4, 1996 at approximately $1.6 billion, plus the
amount of AIM Management net income from September 1, 1996 through the
date on which the Merger is consummated (the "Closing Date"), minus
dividends paid during such period and subject to adjustments for certain
balance sheet items and transaction expenses. The consideration will
include 290 million new Ordinary Shares (including Ordinary Shares
issuable in respect of vested and unvested AIM Management options) of
INVESCO valued at November 4, 1996 at approximately $1.1 billion. The
balance of the consideration will be paid in cash.
The directors of AIM Management's successor will be Charles T.
Bauer, Robert H. Graham, Gary T. Crum and Michael J. Cemo, all of whom
are currently officers and directors of AIM. Although Charles T. Bauer
will remain Chairman of AIM Management's successor, Robert H. Graham
will become President and Chief Executive Officers of such successor.
Mr. Graham currently serves as AIM Management's President and Chief
Operating Officer.
Upon consummation of the Merger, the AIM Management
shareholders will own approximately 45% of INVESCO's total outstanding
capital stock on a fully diluted basis. INVESCO's shareholders approved
the Merger at a meeting on November 27, 1996, and on December 4, 1996
approved changing INVESCO's name upon consummation of the Merger. The
name of AIM will not change.
The closing is presently expected to occur on February 28,
1997, subject to the satisfaction of conditions to closing that include,
among other things: (a) INVESCO having consummated one or more
financings and having received net proceeds of not less than $500
million; (b) the respective aggregate annualized asset management fees
of INVESCO and AIM Management (based on assets under management,
excluding the effects of market movements) in respect of which consents
to the Merger have been obtained being equal to or greater than 87.5% of
all such fees at October 31, 1996; (c) INVESCO and AIM Management having
received certain consents from regulators, lenders and/or other third
parties; (d) AIM Management not having received from the holder or
holders of more than 2% of the outstanding AIM Management shares notices
that they intend to exercise dissenters' rights; (e) a Voting Agreement,
Standstill Agreement, Transfer Restriction Agreements, Transfer
Administration Agreement, the Registration Rights Agreement,
Indemnification Agreement and employment agreements with certain AIM
Management employees having been executed and delivered; (f) AIM
Management having received an opinion from its U.S. counsel that the
Merger will be treated as a tax-free reorganization; and (g) a
shareholder resolution to appoint to INVESCO's Board of Directors six
AIM Management designees and a Board resolution to appoint the seventh
AIM Management designee having been passed and not revoked.
The Merger Agreement may be terminated at any time prior to
the Closing Date (a) by written agreement of INVESCO and AIM Management,
(b) by written notice by AIM Management or INVESCO to the other after
June 1, 1997 or (c) under other circumstances set forth in the Merger
Agreement. In certain circumstances occurring on or before September 30,
1997, a termination fee will be payable by the party in respect of which
such circumstances have occurred.
In connection with the Merger, the following agreements, each
to be effective upon the closing of the Merger, have been or will be
executed:
Employment Agreements. Following the Merger, the current
officers of AIM Management will be the officers of the successor to
AIM Management and the directors of the successor to AIM Management
will be four of the current directors of AIM Management. Senior
management and key employees of AIM Management have entered into
employment agreements which will commence when the Merger is
consummated and will continue for initial terms ranging from
one year to four years. All of the employment agreements contain
covenants not to compete extending for at least one year after
termination of employment. Approximately thirty current employees of
AIM Management have entered into such employment agreements with
INVESCO.
Voting Agreement. Certain AIM Management shareholders and
their spouses, the current directors of INVESCO and proposed
directors of INVESCO have agreed to vote as directors and as
shareholders to ensure that: (a) the INVESCO Board will have fifteen
members, consisting of four executive directors and three non-executive
directors designated by INVESCO's current senior management,
four executive directors and three non-executive directors designated
by AIM Management's current senior management and a Chairman; (b) the
initial Chairman will be Charles W. Brady (INVESCO's current
Chairman) and the initial Vice Chairman will be Charles T. Bauer
(AIM Management's current Chairman); (c) the parties will vote at any
INVESCO shareholder meeting on resolutions (other than those
in respect of the election of directors) supported by two-thirds
of the Board in the same proportion as votes are cast by unaffiliated
shareholders. The Voting Agreement will terminate on the earlier of the
fourth anniversary of the Closing Date and the date on which a
resolution proposed by an INVESCO-designated Board member is
approved by the INVESCO Board despite being voted against by each AIM
Manage[HD] ment- designated Board member present at such Board meeting.
Standstill Agreement and Transfer Restriction Agreements.
Certain AIM Management shareholders and their spouses and certain
other significant shareholders of INVESCO have agreed under certain
circumstances for a maximum of five years not to engage in a
number of specified activities that might result in a change of the
ownership or control positions of INVESCO existing as of the
Closing Date. AIM Management shareholders and INVESCO's current
chairman will be restricted in their ability to transfer their
shares of INVESCO for a period of up to five years.
Terms of the Sub-Advisory Agreements
Although the Current Agreement has not terminated and the New
Agreement has not become effective, such Agreements (collectively, the
"Agreements") are described below as if they were both in effect.
Under the Agreements, AIM furnishes investment information and
advice and makes recommendations with respect to the purchase and sale
of investments based upon the Portfolio's investment policies. AIM has
sole responsibility for the investment decisions of the Portfolio,
subject to the control of the Board of Directors and TIA.
The Agreements provide that all of the ordinary business
expenses incurred in the operations of the Portfolio shall be paid by
the Portfolio. These expenses include (but are not limited to) advisory
fees, sub-advisory fees (other than sub-advisory fees paid pursuant to
the Agreements), and administration fees, fees for necessary
professional and brokerage services, costs relating to local
administration of securities, fees for any pricing service, the costs of
regulatory compliance, and pro rata costs associated with maintaining
the Fund's legal existence and shareholder relations.
The Agreements provide that TIA shall pay a monthly fee to AIM
computed at an annual rate of 0.375% of the Portfolio's average daily
net assets. The aggregate sub-advisory fee paid by TIA to AIM in the
Portfolio's most recently completed fiscal year was $503,898.40.
Annex B contains a schedule of brokerage commissions paid by
the Portfolio on portfolio transactions during the past fiscal year,
including such commissions paid by the Fund to affiliated brokers, Smith
Barney Inc. and Robinson Humphrey, Inc.
The Agreements may be terminated without penalty by (i) the
Portfolio, (ii) the action of the shareholders of the Portfolio, (iii)
the Board of Directors of the Fund, or (iv) AIM on 60 days' written
notice. Each Advisory Agreement will terminate automatically in the
event of any assignment, as defined by the 1940 Act. The Agreements
continue from year to year so long as their continuance is specifically
approved at least annually either (i) by the Board of Directors of the
Fund or (ii) by the vote of a majority of the Portfolio's outstanding
voting securities, as defined by the 1940 Act, provided that in either
event the continuance is also approved by the vote of a majority of the
directors of the Fund who are not interested persons of the Fund, of TIA
or of AIM, cast in person at a meeting called for the purpose of voting
on such approval.
Annex C indicates the net assets and the advisory fee rate of
each investment company advised or subadvised by AIM that has an
investment objective similar to that of the Portfolio.
Information Concerning AIM
AIM serves as the sub-advisor to the Portfolio. AIM was
organized in 1986 and, together with its affiliates, advises 42
investment company portfolios . As of , 1996, the total assets
advised or managed by AIM and its affiliates were approximately $ . AIM
is a wholly owned subsidiary of A I M Advisors, Inc. ("AIM Advisors"),
which is a wholly owned subsidiary of AIM Management. The address of AIM
is 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173.
Recommendation of Directors
The Board of Directors of the Fund recommends that you vote
FOR the approval of the New Sub-Advisory Agreement.
PROPOSAL 2
ELIMINATION OF THE FUNDAMENTAL INVESTMENT POLICY RESTRICTING INVESTMENTS
IN OTHER INVESTMENT COMPANIES AND AMENDMENT OF A RELATED FUNDAMENTAL
INVESTMENT POLICY
Section 12 of the 1940 Act generally prohibits the Portfolio
from (i) owning more than 3% of the total outstanding voting stock of
any other investment company; (ii) investing more than 5% of its total
assets in the securities of any one other investment company; and (iii)
investing more than 10% of its total assets (in the aggregate) in the
securities of other investment companies.
The Board of Directors may authorize AIM and the Portfolio to
seek exemptive relief from the Securities and Exchange Commission
("SEC") to permit the Portfolio to purchase securities of other
investment companies in excess of the limitations imposed by Section 12
of the 1940 Act (exemptive orders granted with respect to the Portfolio
are referred to herein collectively as the "Exemptive Orders"). The
investment companies in which the Portfolio may invest pursuant to the
Exemptive Orders are referred to herein collectively as the "Exemptive
Order Funds."
The Portfolio and AIM may seek Exemptive Orders because they
believe that the Portfolio can effectively invest in certain other types
of securities through pooled investment vehicles such as the Exemptive
Order Funds. By pooling their investments in such securities, the
Portfolio may have the ability to invest in a wider range of issuers,
industries and markets, thereby seeking to decrease volatility and risk
while at the same time providing greater liquidity than the Portfolio
would have available to it investing in such securities by itself.
Pooling investments may also allow the Portfolio to increase the
efficiency of portfolio management by permitting the Portfolio's
portfolio manager to concentrate on those investments that comprise the
bulk of the Portfolio's assets and not spend a disproportionate amount
of time on specialized areas. The Portfolio may seek Exemptive Orders to
permit, among other things, investments by the Portfolio for cash
management purposes in money market funds advised by AIM Advisors, or
investments in a separate small capitalization or initial public
offering fund.
If the proposed elimination of the Portfolio's restrictions on
investments in other investment companies are approved, the Portfolio
may invest in securities of an Exemptive Order Fund only to the extent
consistent with the Portfolio's investment objectives and policies as
set forth from time to time in its prospectus.
In connection with obtaining Exemptive Orders, AIM may agree
to waive fees applicable either to the Portfolio or the Exemptive Order
Funds (to the extent that the assets of the Portfolio are invested in
Exemptive Order Funds) in order to assure that the Portfolio will not be
subject to subadvisory fees at both the Portfolio and Exemptive Order
Fund levels. Other expenses incurred by the Exemptive Order Funds (such
as audit and custodial fees) will be borne by AIM, and thus indirectly
by the Portfolio. AIM believes that these indirect expenses will be
offset by the benefits to the Portfolio of pooling its investments.
The Portfolio currently has fundamental investment
restrictions that prohibit it from purchasing securities issued by other
investment companies. In order to take full advantage of the exemptive
relief that may be granted by the Securities and Exchange Commission and
to invest in shares of the Exemptive Order Funds in excess of the
percentage limitations imposed by Section 12, the Portfolio is seeking
shareholder approval to eliminate this investment restriction.
The Portfolio currently has the following additional
fundamental investment restriction that may prohibit it from taking full
advantage of the Exemptive Orders:
the Portfolio is prohibited from making investments
for the purpose of exercising control over or management of any
company. The 1940 Act deems a person to have presumptive control
over another person if it beneficially owns more than 25% of the
other person's voting securities. From time to time, the Portfolio may
want to own more than 25% of the voting securities in one or
more Exemptive Order Funds.
Additional information regarding the Portfolio's fundamental
investment restrictions may be obtained without cost by telephoning TIA
at 1-800-224-7523 and requesting a copy of the Portfolio's Statement of
Additional Information.
In order to take full advantage of the Exemptive Orders, the
Portfolio seeks shareholder approval to amend such restriction by adding
the following exception to the restriction:
, except to the extent that the Portfolio may purchase
securities of other investment companies.
The elimination of the fundamental investment policy
restricting investments in other investment companies and the amendment
to the related fundamental investment policy would become effective
immediately upon approval by shareholders. These changes are not related
to the Merger described in Proposal 1. Shareholders are being asked to
consider such amendments at this time because the Portfolio does not
regularly hold shareholder meetings. AIM believes that submitting this
proposal together with Proposal 1 may reduce the expenses incurred by
the Portfolio in connection with soliciting approval of this proposal
because the Portfolio will not be required to hold a separate meeting.
Recommendation of Directors
The Board of Directors of the Fund recommends that you vote
FOR the proposal to eliminate the fundamental investment policy
restricting investments in other investment companies and to amend the
related fundamental investment policy.
GENERAL INFORMATION
Executive Officers of the Sub-Adviser
Information regarding the executive officers of the Sub-Adviser is set
forth in Annex D.
Proxy Solicitation
The Portfolio has engaged the services of Shareholder
Communications Corporation ("SCC") to assist in the solicitation of
proxies for the Special Meeting. The cost of soliciting proxies will be
borne in part by AIM, and in part by the Portfolio. It is estimated that
the cost of SCC's services will be approximately $8,000. The Portfolio
expects to solicit proxies principally by mail, but the Portfolio or SCC
may also solicit proxies by telephone or personal interview. The
Portfolio may also pay persons holding stock in their names, or those of
their nominees, for their expenses in sending proxies and proxy
materials to beneficial owners or principals.
SHAREHOLDER PROPOSALS
As a general matter, the Portfolio does not hold regular
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 the address set forth on the first page of
this Proxy Statement. To be considered for presentation at a
shareholders' meeting, proposals must be received a reasonable time
before a solicitation is made.
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 person acting under the
proxies.
A list of shareholders of the Portfolio entitled to be present
and vote at the Meeting will be available at the offices of the
Portfolio, 388 Greenwich Street, New York, New York 10013, for
inspection by any shareholder during regular business hours for ten days
prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting for the
Portfolio may necessitate adjournment and may subject the Portfolio to
additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN
AND RETURN THE ENCLOSED PROXY PROMPTLY, NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
CHRISTINA T. SYDOR
Secretary
December 26, 1996
ANNEX A
FORM OF SUB-ADVISORY AGREEMENT
TRAVELERS SERIES FUND INC.
(AIM Capital Appreciation Portfolio)
THIS AGREEMENT is made this day of , 19 , by and between
Travelers Series Fund Inc. (the "Company"), a corporation organized
under the laws of the State of Maryland, on behalf of the AIM Capital
Appreciation Portfolio (the "Portfolio"), Travelers Investment Adviser,
Inc. ("TIA" or the "Manager") and A I M Capital Management, Inc. (the
"Sub-Adviser").
WHEREAS, the Company, Smith Barney Mutual Funds Management
Inc. ("SBMFM") and the Sub-Adviser entered into a Subadvisory Agreement
on October 10, 1995, under which the Sub-Adviser served as the sub-
investment adviser for the Portfolio;
WHEREAS, the Sub-Adviser consented to the assignment of
SBMFM's interests, rights, responsibilities and obligations in and under
the Subadvisory Agreement to TIA pursuant to a Transfer and Assumption
of Subadvisory Agreement dated as of September 3, 1996 and TIA currently
serves as the investment manager for the Portfolio;
WHEREAS, the Company represents that it is registered under
the Investment Company Act of 1940, as amended (the "1940 Act") as an
open-end, diversified management investment company, consisting of
multiple series of investment portfolios;
WHEREAS, the Manager represents that it is registered under
the Investment Advisers Act of 1940, as amended (the "Advisers Act") as
an investment adviser and engages in the business of acting as an
investment adviser;
WHEREAS, the Sub-Adviser represents that it is registered
under the Advisers Act as an investment adviser and engages in the
business of acting as an investment adviser;
WHEREAS, the Company represents that its charter authorizes
the Board of Directors of the Company to classify or reclassify
authorized but unissued shares of the Company, and as of the date of
this Agreement the Company's Board of Directors has authorized the
issuance of series of shares representing interests in investment
portfolios;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt
whereof is hereby acknowledged, the parties hereto agree as follows:
1. Investment Description; Appointment
The Company desires to employ its capital relating to the
Portfolio by investing and reinvesting in investments of the kind and in
accordance with the investment objective(s), policies and limitations
specified 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 or supplemented from time to time, and in the
manner and to the extent as may from time to time be approved by the
Board of Directors of the Company (the "Board"). Copies of the
Registration Statement, Prospectus and the Statement have been or will
be provided to the Sub-Adviser. The Company agrees promptly to provide
copies of all amendments and supplements to the current Registration
Statement, Prospectus and the Statement to the Sub-Adviser on or before
the effective date thereof on an on-going basis. Until the Company
delivers any such amendment or supplement to the Sub-Adviser, the Sub-
Adviser shall be fully protected in relying on the Prospectus and
Statement as previously furnished to the Sub-Adviser. The Company
employs the Manager as the manager to the Portfolio pursuant to the
Transfer and Assumption of Management Agreement dated September 3, 1996,
and the Company and the Manager desire to employ and hereby appoint the
Sub-Adviser to act as the sub-investment adviser to the Portfolio. The
Sub-Adviser accepts the appointment and agrees to furnish the services
for the compensation set forth below.
2. Services as Sub-Adviser
Subject to the supervision, direction and approval of the
Board and the Manager, the Sub-Adviser shall conduct a continual program
of investment, evaluation and, if appropriate in the view of the Sub-
Adviser, sale and reinvestment of the Portfolio's assets. The Sub-
Adviser is authorized, in its sole discretion and without prior
consultation with the Manager, to: (a) manage the Portfolio's assets in
accordance with the Portfolio's investment objective(s) and policies as
stated in the Prospectus and the Statement; (b) make investment
decisions for the Portfolio; (c) place purchase and sale orders for
portfolio transactions on behalf of the Portfolio; and (d) employ
professional portfolio managers and securities analysts who provide
research services to the Portfolio.
In addition, (i) the Sub-Adviser shall furnish the Manager
daily information concerning portfolio transactions and quarterly and
annual reports concerning transactions and performance of the Portfolio
in such form as may be mutually agreed by the manager and the Sub-
Adviser, and the SubAdviser agrees to review the Portfolio and discuss
the management thereof with the manager and the Board.
(ii) Unless the Manager gives the Sub-Adviser written
instructions to the contrary, the SubAdviser shall use its good faith
judgment in a manner which it reasonably believes best serves the
interests of the Portfolio's shareholders to vote or abstain from voting
all proxies solicited by or with respect to the issuers of securities in
which assets of the Portfolio may be invested.
(iii) The Sub-Adviser shall maintain and preserve such records
related to the Portfolio's transactions as required under the 1940 Act.
The Manager shall maintain and preserve all books and other records not
related to the Portfolio's transactions as required under the 1940 Act.
The SubAdviser shall timely furnish to the Manager all information
relating to the Sub-Adviser's services hereunder reasonably requested by
the Manager to keep and preserve the books and records of the Portfolio.
The Sub-Adviser agrees that all records which it maintains for the
Portfolio are the property of the Company and the Sub-Adviser will
surrender promptly to the Company copies of any of such records.
(iv) The Sub-Adviser shall maintain compliance procedures for
the Portfolio that it reasonably believes are adequate to ensure the
Portfolio's compliance with (A) the 1940 Act and the rules and
regulations promulgated thereunder and (B) the Portfolio's investment
objective(s) and policies as stated in the Prospectus and Statement. The
Sub-Adviser shall maintain compliance procedures that it reasonably
believes are adequate to ensure its compliance with the Advisers Act.
(v) The Sub-Adviser has adopted a written code of ethics that
it reasonably believes complies with the requirements of Rule 17j-1
under the 1940 Act, which it will provide to the Company. The Sub-
Adviser has policies and procedures regarding the detection and
prevention and the misuse of material, nonpublic information by the Sub-
Adviser and its employees as required by the Insider Trading and
Securities Fraud Enforcement Act of 1988.
3. Brokerage
The Sub-Adviser is responsible for decisions to buy and sell
securities for the Portfolio, brokerdealer selection, and negotiation of
brokerage commission rates. The Sub-Adviser's primary consideration in
effecting a security transaction will be executed at the most favorable
price. In selecting a broker-dealer to execute each particular
transaction, the Sub-Adviser will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer, the size of and difficulty in executing
the order; and the value of the expected contribution of the broker-
dealer to the investment performance of the portfolio on a continuing
basis. Accordingly, the price to the Portfolio in any transaction may be
less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as the Board may
from time to time determine, the Sub-Adviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement
or otherwise solely by reason of its having caused the Portfolio to pay
a broker or dealer that provides brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) to the Sub-Adviser an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction of the Sub-
Adviser's overall responsibilities with respect to the Portfolio, and to
the other clients of the SubAdviser as to which the Sub-Adviser
exercises investment discretion. The Sub-Adviser is further authorized
to allocate the orders placed by it on behalf of the Portfolio to such
brokers and dealers who also provide research or statistical material,
or other services to the Portfolio or to the Sub-Adviser. Such
allocation shall be in such amounts and proportions as the Sub-Adviser
shall determine and the Sub-Adviser will report on said allocations
regularly to the Board indicating the brokers to whom such allocations
have been made and the basis therefor.
4. Information Provided to the Company and the Manager
The Sub-Adviser shall keep the Company and the Manager
informed of developments materially affecting the Portfolio's holdings,
and shall, on its own initiative, furnish the Company and the Manager
from time to time with whatever information the Sub-Adviser believes is
appropriate for this purpose.
5. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Manager will pay the Sub-Adviser an annual fee calculated
at the rate of 0.375% of the Portfolio's average daily net assets; the
fee is calculated daily and paid monthly. The Sub-Adviser shall have no
right to obtain compensation directly from the Company for services
provided hereunder and agrees to look solely to the Manager for payment
of fees due. The fee for the period from the Effective Date (defined
below) of the Agreement to the end of the month during which the
Effective Date occurs shall be prorated according to the proportion that
such period bears to the full monthly period. Upon any termination of
this Agreement before the end of a month, the fee for such part of that
month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees
payable to the Sub-Adviser, the value of the Portfolio's net assets
shall be computed at the times and in the manner specified in the
Prospectus and/or the Statement.
6. Expenses
The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement.
The Portfolio will bear certain other expenses to be incurred in its
operation, including, but not limited to, investment advisory fees, sub-
advisory fees (other than subadvisory fees paid pursuant to this
Agreement) and administration fees; fees for necessary professional and
brokerage services; costs relating to local administration of
securities; fees for any pricing service; the costs of regulatory
compliance; and pro rata costs associated with maintaining the Company's
legal existence and shareholder relations. All other expenses not
specifically assumed by the Sub-Adviser hereunder or by the Manager
under the Management Agreement are borne by the Portfolio or the
Company.
7. Standard of Care
The Sub-Adviser shall exercise its best judgment and shall act
in good faith in rendering the services listed in paragraphs 2 and 3
above. The Sub-Adviser, its officers, directors and employees shall not
be liable for any error of judgment or mistake of law or for any loss
suffered by the Portfolio, any shareholder of the Portfolio or the
Manager in connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to protect or
purport to protect the Sub-Adviser against any liability to the Manager,
the Company or to the shareholders of the Portfolio to which the Sub-
Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties
or by reason of the SubAdviser's reckless disregard of its obligations
and duties under this Agreement.
8. Term of Agreement
This Agreement shall become effective , 1997 (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 as required by the 1940 Act. 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 (as defined in the 1940
Act and the rules thereunder) of the outstanding voting securities of
the Portfolio, or upon 60 days' written notice, by the Sub-Adviser. This
Agreement will also terminate automatically in the event of its
assignment (the term "assignment" having the meaning defined in Section
2(a)(4) of the 1940 Act and the rules thereunder).
9. Services to Other Companies or Accounts
The Company understands that the Sub-Adviser now acts, will
continue to act and may act in the future as investment manager or
adviser to fiduciary and other managed accounts, and as investment
manager or adviser to other investment companies, including any offshore
entities, or accounts, and the Company has no objection to the Sub-
Adviser's so acting, providing that whenever the Portfolio and one or
more other investment companies or accounts managed or advised by the
Sub-Adviser have available funds for investment, investments suitable
and appropriate for each will be allocated in accordance with a formula
believed to be equitable to each company and account. The Company
recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the
Company understands that the persons employed by the Sub-Adviser to
assist in the performance of the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the
right of the Sub-Adviser or any affiliate of the Sub-Adviser to engage
in and devote time and attention to other business or to render services
of whatever kind of nature.
10. Notices
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other parties at
such address as such other parties may designate for the receipt of such
notice. Until further notice to the other parties, it is agreed that the
address of each party is as follows:
(a) To the Company:
Travelers Series Funds Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
(b) To the Manager:
Travelers Investment Adviser, Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
(c) To the Sub-Adviser:
A I M Capital Management, Inc.
President
11 Greenway Plaza, Suite 1919
Houston, TX 77046
cc General Counsel
11. Representations
The Company represents that a copy of the Articles of
Incorporation is on file with the Secretary of the State of Maryland.
Each of the parties hereto represents that the Agreement has
been duly authorized, executed and delivered by all required corporate
action.
12. Use of Name
The Company may use the names "AIM Capital Management, Inc.", "AIM
Capital Management", "AIM Capital", "AIM Capital Appreciation
Portfolio", or "AIM" only for so long as this Agreement or any
extension, renewal, or amendment hereof remains in effect. At such times
as this Agreement shall no longer be in effect, the Company shall cease
to use such a names or any other name indicating that it is advised by
or otherwise connected with the Sub-Adviser and shall promptly change
its name accordingly. The Company acknowledges that it has adopted the
name "AIM Capital Appreciation Portfolio" through permission of the Sub-
Adviser, and agrees that the Sub-Adviser reserves to itself and any
successor to its business the right to grant the non-exclusive right to
use the aforementioned names or any similar names to any other
corporation or entity, including but not limited to any investment
company of which the Sub-Adviser or any subsidiary or affiliate thereof
or any successor to the business of any thereof shall be the investment
adviser.
13. Severability
If any provision of this Agreement is found to be
unenforceable, then this Agreement shall be deemed to be amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent. The remainder of this Agreement
shall not be affected by such modification.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in
triplicate by their respective officers on the day and year first
written above.
TRAVELERS SERIES FUND INC.
Attest: /s/
By:
TRAVELERS INVESTMENT ADVISER, INC.
Attest: /s/
By:
A I M CAPITAL MANAGEMENT INC.
Attest: /s/
By:
ANNEX B
BROKERAGE FOR THE FISCAL YEAR ENDED 10/31/95
Aggregate
% of
Amount of
Aggregate
Commissio
ns
Commissio
ns
Paid to
Paid to
Total
Affiliate
d
Affiliate
d
Fund Name
Commissio
ns
Brokers(1
)(2)
Brokers
Travelers Series Fund Inc. AIM Capital
Appreciation Portfolio
$144,912
$525
.36
__________
(1) Smith Barney Inc.
(2) Robinson Humphrey, Inc
ANNEX C
FUNDS FOR WHICH AIM SERVES AS INVESTMENT ADVISER OR SUB-ADVISER
THAT HAS AN INVESTMENT OBJECTIVE SIMILAR TO THAT OF THE PORTFOLIO
Name of Fund
Annual Rate
(based on
Average daily
net assets)
Total Net
Assets for
the Most
Recently
Completed
Fiscal Year
Aggregate
Net Fees
Paid to
AIM for
the Most
Recently
Completed
Fiscal
Year
Waivers
for the
Most
Recently
Completed
Fiscal
Year
AIM Aggressive
Growth
0.80% of the
first $150
million.
0.625% of the
excess over
$150 million
$2,750,563,94
3
$16,492,56
4
0
AIM Capital
Development
0.75% of the
first $350
million.
0.625% of the
excess over
$350 million
$273,687,609
$280,248
$144,946
AIM Constellation
1.00% of the
first $30
million.
0.75% over $30
million up to
$150 million.
0.625% of the
excess over
$150 million
$11,548,540,9
62
$57,614,41
2
$1,869,383
AIM Variable
Insurance
Capital Appreciation
0.65% of the
first $250
million
0.60% of the
excess over
$250 million
$212,152,423
$882,870
0
ANNEX D
EXECUTIVE OFFICERS OF AIM
Executive Officers of the AIM
Set forth below is certain information regarding the executive officers
of the AIM.
Name
Age
Position
Business Experience During
Past Five Years
Charles T. Bauer
77
Director and Chairman
Director, Chairman and
Chief Executive Officer,
AIM Management Group
Inc.("AIM Management") ;
Chairman of the Board of
Directors, AIM Advisors,
Inc.,("AIM") AIM Capital
Management, Inc.("AIM
Capital"), AIM
Distributors, Inc.("AIM
Distributors"), AIM Fund
Services, Inc.("AIM
Services"), AIM
Institutional Fund
Services, Inc.("AIM
Institutional"), and Fund
Management Company.("Fund
Management");
Director/Trustee of the AIM
Funds.
Gary T. Crum
49
Director and President
Director and Senior Vice
President, AIM Management
and AIM Advisors; Director,
AIM Distributors.
Robert H. Graham
50
Director and Senior
Vice President
Director, President and
Chief Operating Officer of
AIM Management; Director
and President of AIM
Advisors; Director and
Senior Vice President of
AIM Capital Management, AIM
Distributors, AIM Services,
AIM Institutional and Fund
Management
.Director/Trustee of the
AIM Funds
Scott G. Lucas
37
Director and Senior
Vice President
Vice President of AIM
Management and AIM.
Name
Age
Position
Business Experience During
Past Five Years
Jonathan C.
Schoolar
35
Director and Senior
Vice President
Vice President, AIM
William H. Kleh
51
Director and Senior
Vice President
Director and Senior Vice
President, AIM; Director,
Fund Management, Senior
Vice President, AIM
Management, Vice President,
AIM Distributors.
John J. Arthur
52
Vice President and
Treasurer
Senior Vice President and
Treasurer, AIM; Vice
Preident and Treasurer of
AIM Management, AIM
Distributors, AIM Services,
AIM Institutional and Fund
Management
Melville B. Cox
53
Vice President and
Chief Compliance
Officer
Vice President and Chief
Compliance Officer, AIM;
AIM Distributors, AIM
Services, AIM Institutional
and Fund Management.
Formerly, Vice President,
Charles Schwab & Co., Inc.;
Assistant Secretary,
Charles Schwab Family of
Funds and Schwab
Investments; Chief
Complaince Officer, Charles
Schwab Investment
Management, Inc.; and Vice
President, Integrated
Resources Life Insurance
Co. and Capital Life
Insurance Co.
Robert G. Alley
47
Senior Vice President
Vice President, AIM.
Formerly, Senior Fixed
Income Money Manager,
Waddell and Reed, Inc.
Stuart W. Coco
41
Senior Vice President
Vice President, AIM
Karen Dunn
Kelley
36
Senior Vice President
Vice President, AIM
Ronald P. Stein
37
Senior Vice President
Vice President, AIM.
Formerly, Head of Equity
Trading, Bass Brothers
ANNEX E
FORM OF PROXY CARD
AIM CAPITAL APPRECIATION PORTFOLIO
A SERIES OF TRAVLERS SERIES FUND INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS -- FEBRUARY 7, 1997
The undersigned hereby appoints Heath B. McLendon, Christina T. Sydor
and Nancy W. LeDonne, and each of them separately, proxies with the
power of substitution to each, and hereby authorizes them to represent
and to vote, as designated below, at the Special Meeting of Shareholders
of the Fund indicated above, a series of Travelers Series Fund Inc., on
February 7, 1997 at 2 p.m. Eastern time, and at any adjournment thereof,
all of the shares of the Fund which the undersigned would be entitled to
vote if personally present. IF THIS PROXY IS SIGNED AND RETURNED WITH NO
CHOICES INDICATED, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES NAMED ON THIS PROXY AND FOR APPROVAL OF THE OTHER PROPOSALS.
NOTE: PLEASE SIGN EXACTLY AS
YOUR NAME APPEARS ON THIS PROXY
CARD. All joint owners should
sign. When signing as executor,
administrator, attorney, trustee
or guardian or as custodian for
a minor, please give full title
as such. If a corporation,
please sign in full corporate
name and indicate the signer's
office. If a partner, sign in
the partnership name.
________________________________
___ Signature
__________________________________
Signature (if held jointly)
________________________________
___ Date
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" ALL PROPOSALS. TO VOTE, FILL IN BOX COMPLETELY
For Against Abstain FOR AGAINST ABSTAIN
1. Proposal to approve a new Investment Sub-
Advisory Agreement for the Fund. / / / / / /
2. Proposal to eliminate fundamental investment
policy restricting investments in other
investment companies and to amend certain related
fundamental investment policies. / / / / / /
3. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
