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
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):
[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:
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TRAVELERS SERIES FUND INC.
GT GLOBAL STRATEGIC INCOME PORTFOLIO
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1998
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TO THE SHAREHOLDERS:
A special meeting of shareholders (the "Meeting") of the GT Global Strategic
Income Portfolio (the "Portfolio") of the Travelers Series Fund Inc. (the
"Fund") will be held on May 20, 1998 at 2:00 p.m. local time at 388 Greenwich
Street, 22nd Floor, New York, New York, for the following purposes:
(1) To approve a new Sub-Advisory Agreement with Chancellor LGT Asset
Management, Inc.; and
(2) 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 March 17, 1998 are
entitled to vote at the Meeting and any adjournments. If you attend the Meeting,
you may vote your shares in person. If you do not expect to attend the 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.
Heath B. McLendon
CHAIRMAN OF THE BOARD OF DIRECTORS
March 31, 1998
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THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT TO A SHAREHOLDER OF THE PORTFOLIO UPON REQUEST. ANY SUCH REQUEST SHOULD
BE MADE BY CALLING (800) 842-8573 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
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
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TRAVELERS SERIES FUND INC.
GT GLOBAL STRATEGIC INCOME PORTFOLIO
388 GREENWICH STREET, NEW YORK, NEW YORK 10013
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1998
The accompanying proxy is solicited by the Board of Directors of Travelers
Series Fund Inc. (the "Fund") on behalf of the GT Global Strategic Income
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 May 20, 1998 (the "Meeting").
The proposals to be presented at the Meeting are as follows:
(1) To approve a new Sub-Advisory Agreement with Chancellor LGT Asset
Management, Inc.; and
(2) To transact such other business as may properly come before the Meeting
or any adjournments thereof.
The Board has fixed the close of business on March 17, 1998, 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 the proposal submitted to the Shareholders of the Portfolio, with no Share
having cumulative voting rights.
There are no persons who, to the knowledge of the Fund, owned beneficially
more than 5% of the Portfolio's outstanding Shares as of March 17, 1998. 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 the Record Date will be
entitled to one vote per share on all business of the Meeting. The Portfolio had
2,450,296.138 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 April 3, 1998.
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). The 1940 Act defines a "majority of the
outstanding voting securities" of the 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 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.
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 purchase 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
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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. In addition, Travelers Insurance will vote the
shares for which it has voting rights in the same proportion as the votes for
which they have received proper instructions.
Proxies received prior to the Meeting on which no vote is indicated will be
voted "for" the proposal. 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. 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 Proposal 1 of the
Notice that will be presented for consideration at the Meeting. If any other
matters are properly presented, it is the intention of the persons named on the
enclosed proxy to vote proxies in accordance with their best judgment. In the
event a quorum is present at the Meeting but sufficient votes to approve the
proposal are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies provided
they determine that such an adjournment and additional solicitation is
reasonable and in the interest of shareholders based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of votes then cast, the percentage of negative votes then cast, the nature of
the proposed solicitation activities and the nature of the reasons for such
further solicitation.
PROPOSAL 1
APPROVAL OF NEW 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.
Chancellor LGT Asset Management, Inc. ("Chancellor LGT") has served as
sub-advisor to the Portfolio from June 2, 1994 pursuant to a sub-advisory
agreement (the "Current Agreement") executed on June 2, 1994. On June 10, 1997,
the Board of Directors of the Fund, including a majority of the directors who
are not interested persons of the Portfolio, TIA or Chancellor LGT (the
"Independent Directors"), voted to continue the Current Agreement for an
additional year until June 1998. The current agreement was approved by the
initial Shareholder of the Portfolio on June 2, 1994.
On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"), the indirect
parent organization of Chancellor LGT, entered into an agreement (the "Purchase
Agreement") with AMVESCAP PLC ("AMVESCAP"), pursuant to which AMVESCAP will
acquire LGT's Asset Management Division, which includes Chancellor LGT, GT
Global, Inc. ("GT Global") and certain other affiliates. It is necessary to
obtain shareholder approval of the New Agreement because of the technical
requirements of the 1940 Act that apply to the Purchase (the "Purchase"), which
is more fully described below under "Purchase of Chancellor LGT's Asset
Management Division by AMVESCAP." Because the Purchase will result in a transfer
of more than 25% of the outstanding voting shares of Chancellor LGT, an
"assignment" of the
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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 Purchase is not expected to cause any change
in the operation of Chancellor LGT's business. In addition, the Purchase has no
affect on the current management agreement between the Fund and TIA with respect
to the Portfolio.
At a meeting held on March 11, 1998, 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 Purchase 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 form of the new Sub-Advisory Agreement attached
hereto as Annex A.
If the conditions to the Purchase are not met or waived or if the Purchase
Agreement between LGT and AMVESCAP is terminated, the Purchase will not be
consummated, and the Current Agreement will remain in effect. If the New
Agreement is approved, and the Purchase 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 Purchase is
consummated, the Board will determine what action to take, in any event subject
to the approval of shareholders of the Portfolio.
PURCHASE OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP.
On January 30, 1998, LGT and LGT Holding (International) AG, Zurich
(collectively the "Sellers") entered into an agreement with AMVESCAP and AMD
Acquisition Corp. (the "Buyer"), pursuant to which the Buyer will purchase the
global asset management business of the Sellers by acquiring the shares of, and
equity interests in, the subsidiaries of the Sellers that conduct such business
(the "Transferred Companies"). Under the agreement, the Buyer shall pay the
Sellers $1.3 billion, which shall be (i) reduced (or increased) to the extent
that the closing tangible net worth of the Transferred Companies at closing is
less than (or greater than) zero, (ii) reduced to the extent that annualized
asset management fees (without giving effect to market and currency
fluctuations) of the Transferred Companies at closing, in respect of which
client consents have been obtained, are less than 92.5% of base investment
management fees and (iii) adjusted in respect of certain transaction-related
fees and expenses (including, among other things, mutual fund shareholder and
other client consent costs). Thus, failure by shareholders of the Transferred
Companies to approve the Purchase Agreement may result in the Buyer paying, and
the Seller receiving, a lower amount for the sale of the Transferred Companies.
The closing is expected to occur on or about May 29, 1998 (the "Closing
Date") subject to the satisfaction or waiver of certain conditions that include,
among other things: (i) the annualized asset management fees (without giving
effect to market and currency fluctuations) being at least 60% of base
investment management fees; (ii) approval of the Purchase by AMVESCAP
shareholders; (iii) certain governmental approvals and other third party
consents having been received; (iv) representations and warranties made by the
parties being true and correct in all material respects at the closing; and (v)
no party being subject to any order prohibiting the consummation of the
Purchase.
The Purchase Agreement may be terminated at any time prior to the Closing
Date (i) by the mutual consent of the Buyer and LGT; (ii) by written notice by
any party after September 30, 1998; (iii) by the Sellers if, by a specified
date, AMVESCAP's shareholders have not approved the transaction; or (iv) under
the other circumstances set forth in the Purchase Agreement.
INFORMATION CONCERNING CHANCELLOR LGT AND AIM.
If this Proposal is approved by shareholders, Chancellor LGT will continue
to serve as the sub-adviser to the Portfolio. Chancellor LGT currently provides
investment subadvisory services to the Portfolio. Chancellor LGT and its
worldwide asset management affiliates have provided investment management
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and/or administrative services to institutional, corporate and individual
clients around the world since 1969. As of December 31, 1997, Chancellor LGT and
its worldwide affiliates managed approximately $54 billion in assets. In the
United States, as of December 31, 1997, Chancellor LGT managed or administered
approximately $8 billion of assets of several other registered investment
companies in addition to the Portfolio. In addition to the investment resources
of its San Francisco and New York offices, Chancellor LGT draws upon the
expertise, personnel, data and systems of other investment offices of LGT's
Asset Management Division in Frankfurt, Hong Kong, London, Singapore, Sydney,
Tokyo and Toronto. In managing the Funds, Chancellor LGT generally employs a
team approach, taking advantage of its investment resources around the world in
seeking the Portfolio's investment objective. The U.S. offices of Chancellor LGT
are located at 50 California Street, 27th Floor, San Francisco, CA 94111 and
1166 Avenue of the Americas, New York, NY 10036.
Chancellor LGT has advised the Portfolio that the Purchase is not expected
to have a material effect on the operations of the Portfolio or on its
shareholders as a result of the Purchase. No material change in investment
philosophy, policies or strategies are currently envisioned. The Purchase
Agreement does not, by its terms, contemplate any changes, other than changes in
the ordinary course of business, in the management or operation of relating to
the Portfolio, the personnel managing the Portfolio or other services provided
to and business activities of the Portfolio. The Purchase also is not expected
to result in material changes in the business, corporate structure or
composition of the senior management or personnel of Chancellor LGT. Based on
the foregoing, Chancellor LGT does not anticipate that the Purchase will cause a
reduction in the quality of services provided to the Portfolio, or have any
adverse effect on Chancellor LGT'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 Purchase Agreement, AMVESCAP 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 Sub-Adviser 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 Purchase. 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 Sub-Adviser
receives or is entitled to receive any compensation directly or indirectly from
the investment company or its security holders (other than fees for bona fide
investment advisory 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 Purchase.
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 Sub-Adviser are not "interested
persons" (as defined in the 1940 Act) of the new or the old investment adviser
or Sub-Adviser. 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 Chancellor LGT will continue after the Purchase 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.
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The Board, including the Independent Directors, approved the proposed New
Agreement among the Fund on behalf of the Portfolio, the Manager and Chancellor
LGT on March 11, 1998, 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 Chancellor
LGT, 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 Chancellor LGT by the Portfolio would have been identical to those paid
under the Current Agreement.
The Board met on March 11, 1998, at which meeting the Directors, including
the Independent Directors, concluded that if the Purchase 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 Independent 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 Purchase.
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 Chancellor LGT 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 Purchase Agreement and the
possible effects of the Purchase upon Chancellor LGT 's organization and upon
the ability of Chancellor LGT to provide advisory services to the Portfolio. The
Board considered the skills and capabilities of Chancellor LGT and
representations that no material change was planned in the current management of
the Portfolio by Chancellor LGT. In this regard, the Board was informed of the
resources of AMVESCAP to be made available to Chancellor LGT, after giving
effect to the Purchase, to secure for the Portfolio quality investment research,
investment advice and other client services. The Board considered the financial
resources of AMVESCAP and also considered the reputation, expertise and
resources of AMVESCAP and its affiliates in domestic and international financial
markets. The Board considered the continued employment of members of senior
management of Chancellor LGT pursuant to employment and retention agreements and
the incentives provided to such members and other key employees of Chancellor
LGT 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.
Based upon its review, the Board of Directors concluded that the New
Agreement is in the best interests of the Portfolio and its shareholders. The
Board of Directors also concluded that as a consequence of the Purchase, the
operations of Chancellor LGT 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.
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.
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Under the Agreements, Chancellor LGT furnishes investment information and
advice and makes recommendations with respect to the purchase and sale of
investments based upon the Portfolio's investment policies. Chancellor LGT has
sole responsibility for the investment decisions of the Portfolio, subject to
the supervision, direction and approval 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 Chancellor LGT
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 Chancellor LGT in the
Portfolio's most recently completed fiscal year was $94,324.22.
The Portfolio paid no commissions on portfolio transactions to affiliated
brokers of the Fund.
The Agreements may be terminated at any time without penalty, on 60 days
written notice by (i) the Directors, (ii) the holders of a majority of the
Portfolio's outstanding voting securities, or (iii) the Sub-Adviser. Each
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 Chancellor LGT, cast in person at a meeting called for the purpose of
voting on such approval.
Annex B indicates the net assets and the advisory fee rate of each
investment company advised or subadvised by Chancellor LGT that has an
investment objective similar to that of the Portfolio.
RECOMMENDATION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE FOR THE APPROVAL
OF THE NEW SUB-ADVISORY AGREEMENT.
GENERAL INFORMATION
EXECUTIVE OFFICERS OF THE SUB-ADVISER
Information regarding the executive officers of the Sub-Adviser is set forth
in Annex C.
PROXY SOLICITATION
The Portfolio has engaged the services of Shareholder Communications
Corporation ("SCC") to assist in the solicitation of proxies for the Meeting.
The cost of soliciting proxies will be borne in by Chancellor LGT. 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
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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.
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
March 31, 1998
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ANNEX A
FORM OF SUBADVISORY AGREEMENT
TRAVELERS SERIES FUND INC.
(GT GLOBAL STRATEGIC INCOME PORTFOLIO)
May , 1998
Chancellor LGT Asset Management, Inc.
50 California Street
San Francisco, CA 94111
THIS AGREEMENT is made this day of , 1998, by and between
Travelers Series Fund Inc. (the "Company"), a corporation organized under the
laws of the State of Maryland, on behalf of the GT Global Strategic Income
Portfolio (the "Portfolio"), Travelers Investment Adviser, Inc. ("TIA" or the
"Manager") and Chancellor LGT Asset 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 June 2, 1994, 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; and
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;
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 Prospectus
and the Statement have been or will be submitted to the Sub-Adviser. The Company
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the Statement to the Sub-Adviser 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 of Additional Information as previously furnished to the Sub-Adviser.
The Company employs the Manager as the manager to the Portfolio pursuant to the
Transfer and Assumption
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of Management Agreement dated September 3, 1996 (the "Management Agreement"),
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 of the
Company 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 upon, and the Sub-Adviser agrees to review the Portfolio and discuss the
management of it with the Manager and the Board of Directors of the Company.
(ii) Unless the Manager gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser 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 Investment Company Act of
1940, as amended (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 Sub-Adviser 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
Investment Advisers Act of 1940.
(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
In selecting brokers or dealers (including, if permitted by applicable law,
Smith Barney Inc. or any other broker or dealer affiliated with the Manager or
the Sub-Adviser) to execute transactions on behalf of the Portfolio, the
Sub-Adviser will seek the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth of the
market in the security, the price of the security, the financial condition and
A-2
<PAGE>
execution capability of the broker or dealer and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which the Sub-Adviser or its affiliates exercise
investment discretion. Nothing in this paragraph shall be deemed to prohibit the
Sub-Adviser from paying an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of an exchange,
broker, or dealer would have charged for effecting that transaction, if the
Sub-Adviser determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker, or dealer, viewed in terms of either that
particular transaction or its overall responsibilities with respect to the
Portfolio and/or other accounts over which the Sub-Adviser or its affiliates
exercise investment discretion.
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 (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by the Portfolio or
the Company) 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 sub-advisory 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. REDUCTION OF FEE
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to the Management Agreement and any other investment advisory or
administration agreement, but excluding interest, taxes, brokerage and
extraordinary expenses) exceed the expense limitation of any state having
jurisdiction over the Portfolio, the Sub-Adviser shall reduce its fee by the
proportion of such excess expense equal to the proportion that its fee hereunder
bears to the aggregate of fees paid by the Portfolio for management services in
that year, to the extent required by state law. A fee reduction pursuant to this
paragraph 7, if
A-3
<PAGE>
any, shall be estimated, reconciled and paid on a monthly basis. The Company
confirms that, as of the date of this Agreement, no such expense limitation is
applicable to the Portfolio.
8. 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
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by 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 Sub-Adviser's reckless disregard of its obligations and duties
under this Agreement.
9. TERM OF AGREEMENT
This Agreement shall become effective May , 1998 (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 (as defined in the 1940 Act and the rules thereunder).
10. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Company understands that the Sub-Adviser now acts, will continue to act
and may act in the future as investment 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, provided 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 businesses or to render services of whatever
kind or nature.
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.
If the Sub-Adviser is organized as a partnership the Sub-Adviser agrees to
notify the Manager and the Company of any changes in the Sub-Adviser's general
partners within a reasonable time after such change.
A-4
<PAGE>
12. USE OF NAME
The Company may use the name "GT Capital Management, Inc.", "GT Capital
Management", "GT Capital", "GT", "GT Global" or "GT Global Financial Services,
Inc." 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 name 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 "GT Global Strategic Income 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.
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.
<TABLE>
<CAPTION>
<S> <C>
Attest: TRAVELERS SERIES FUND INC.
- -------------------------------------------- By: -----------------------------------------
Attest: TRAVELERS INVESTMENT ADVISER, INC.
- -------------------------------------------- By: -----------------------------------------
Attest: CHANCELLOR LGT ASSET MANAGEMENT, INC.
- --------------------------------------------
</TABLE>
A-5
<PAGE>
ANNEX B
FUNDS FOR WHICH CHANCELLOR LGT SERVES AS
INVESTMENT ADVISER OR SUB-ADVISER THAT HAVE AN INVESTMENT OBJECTIVE
SIMILAR TO THAT OF THE PORTFOLIO
<TABLE>
<CAPTION>
TOTAL NET ASSETS
FOR THE MOST
RECENTLY
ANNUAL RATE COMPLETED FISCAL
NAME OF COMPANY AND FUND (BASED ON AVERAGE DAILY NET ASSETS) YEAR
- --------------------------------------------------- -------------------------------------- --------------------
<S> <C> <C>
GT Global Variable Strategic Income Fund........... 0.75% $28,496,692
GT Global Variable Global Government Income Fund... 0.75% $8,251,027
GT Global Government Income Fund................... .725% on the first $500 million; $282,109,478
.70% on the next $1 billion;
.675% on the next $1 billion;
and .65% on amounts thereafter
GT Global High Income Fund......................... .25% administration fees and its $365,792,411
pro rata portion of the investment
management and administration
fees paid by its Portfolio
GT Global Strategic Income Fund.................... .725% on the first $500 million; $420,623,795
.70% on the next $1 billion;
.675% on the next $1 billion;
and .65% on amounts thereafter
</TABLE>
B-1
<PAGE>
ANNEX C
PRINCIPAL EXECUTIVE OFFICER AND DIRECTORS OF CHANCELLOR LGT
Set forth below is certain information regarding the principal executive
officer and each director of Chancellor LGT.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH
CHANCELLOR LGT AND ADDRESS PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE FOR PAST FIVE YEARS(1)
- ---------------------------------------- ------------------------------------------------------------------------
<S> <C>
Paul J. Loach, 46 Chairman of the Board of Directors of Chancellor LGT since August 1997;
Chairman of the Board of Directors Director and Managing Director of LGT Asset Management PLC (London)
1166 Avenue of the Americas since October 1994; Group Manager and Director of Framlington Group from
New York, NY 10036 May 1988 to October 1994.
Prince Philipp von und zu Liechtenstein, Director of Chancellor LGT since November 1996; Vice Chairman of
51 Supervisory Board of LGT Bank in Liechtenstein (Deutschland) GmbH
Director (Frankfurt) since 1992; Chairman of the Board of Directors and CEO of
Herrengasse 12, P.O. Box 85 Liechtenstein Global Trust (Vaduz) since 1990; Vice Chairman of the
FL-9490 Vaduz, Liechtenstein Board of Directors of LGT Bank in Liechtenstein since 1981.
John G. Greenwood, 51 Chief Economist and Director of Chancellor LGT since November 1997;
Director Chief Economist of Chancellor LGT from February 1994 to October 1996;
50 California Street, 27th Floor Chief Economist of LGT Asset Management, Limited (Hong Kong) from
San Francisco, CA 94111 September 1974 to January 1994.
Nina Lesavoy, 40 Director and Head of North American Institutional Distribution for
Director and Head of North Chancellor LGT since November 1996; Director and Head of Client Service
American Institutional Distribution and Sales for Chancellor LGT from March 1990 to October 1996.
1166 Avenue of the Americas
New York, NY 10036
Donald H. Young, 59 Director and Head of the Structured Products Group for Chancellor LGT
Director since November 1996; Director and Head of Global Asset Allocation for
1166 Avenue of the Americas Chancellor LGT from October 1988 to October 1996.
New York, NY 10036
Ken W. Chancey, 52 Senior Vice President--Mutual Fund Accounting, Chancellor LGT since
Senior Vice President 1997; Vice President--Mutual Fund Accounting, Chancellor LGT from 1992
Mutual Fund Accounting to 1997; Vice President, Putnam Fiduciary Trust Company from 1989 to
50 California Street, 27th Floor 1992.
San Francisco, CA 94111
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH
CHANCELLOR LGT AND ADDRESS PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE FOR PAST FIVE YEARS(1)
- ---------------------------------------- ------------------------------------------------------------------------
<S> <C>
Helge K. Lee, 51 Chief Legal and Compliance Officer--North America for Chancellor LGT
Chief Legal and Compliance since October 1997; Executive Vice President of the Asset Management
Officer and Secretary Division of Liechtenstein Global Trust since October 1996; Senior Vice
50 California Street, 27th Floor President, General Counsel and Secretary of Chancellor LGT, GT Global,
San Francisco, CA 94111 Inc., GT Investor Services, Inc. and G.T. Insurance Agency from February
1996 to October 1996; Vice President, General Counsel and Secretary of
LGT Asset Management, Inc., Chancellor LGT, GT Global, Inc., GT Investor
Services, Inc. and G.T. Insurance Agency from May 1994 to February 1996;
Senior Vice President, General Counsel and Secretary of
Strong/Corneliuson Management, Inc. and Secretary of each of the Strong
Funds from October 1991 through May 1994.
Margaret A. Riley, 34 Director of Chancellor LGT Venture Partners, Inc. since October 1997;
Chief Financial Officer Managing Director and Chief Financial Officer of Chancellor LGT since
1166 Avenue of the Americas October 1997; Managing Director and Controller of Chancellor LGT from
New York, NY 10036 November 1996 to October 1997; Managing Director of Finance for
Chancellor LGT from March 1989 to October 1996.
</TABLE>
- ------------------------
(1) On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor
Capital") merged with LGT Asset Management, Inc. (San Francisco), and the
resulting entity was renamed Chancellor LGT Asset Management, Inc. Prior to
October 31, 1996, Ms. Lesavoy, Ms. Riley and Mr. Young held positions only
with Chancellor Capital.
C-2
ANNEX D
FORM OF PROXY CARD
GT GLOBAL STRATEGIC INCOME PORTFOLIO
A SERIES OF TRAVELERS SERIES FUND INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS -- MAY 20, 1998
The undersigned hereby appoints Heath B. McLendon, Christina T. Sydor and
Michael Kocur, 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 Portfolio
indicated above, a series of Travelers Series Fund Inc., on May 20, 1998 at 2
p.m. Eastern time, and at any adjournment thereof, all of the shares of the
Portfolio 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 APPROVAL OF THE PROPOSAL. This proxy will serve as the voting
instruction form by which the undersigned owner of a variable annuity or
variable life insurance contract (each, a "Contract") instructs the voting of
the Portfolio shares attributable to his or her Contract.
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
THE DIRECTORS RECOMMEND VOTING "FOR" THE PROPOSAL. TO VOTE, FILL IN BOX
COMPLETELY
For Against Abstain
1. Proposal to approve a new Investment
Sub-Advisory Agreement for the Portfolio.
2. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
