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)
GORDON E. SWARTZ
(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:
TRAVELERS SERIES FUND INC.
TBC MANAGED INCOME PORTFOLIO
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------
TO BE HELD ON NOVEMBER 24, 1998
----------------------
To the Shareholders:
A special meeting of shareholders of the TBC Managed Income Portfolio (the
"Portfolio") of Travelers Series Fund Inc. (the "Fund") will be held on
November 24, 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 Management Agreement between the Fund on behalf of
the Portfolio and Travelers Asset Management International Corporation;
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 September 30, 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 that 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 Directors of the Fund, who recommend you vote "FOR" the proposal, have
unanimously approved the proposal. YOUR IMMEDIATE RESPONSE WILL HELP SAVE ON
THE COSTS OF ADDITIONAL SOLICITATIONS. We look forward to your participation.
PLEASE SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
Heath B. McLendon
Chairman of the Board of Directors
October 22, 1998
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THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT AND SEMI-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 MANAGEMENT AGREEMENT.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
<PAGE>
TRAVELERS SERIES FUND INC.
TBC MANAGED INCOME PORTFOLIO
388 GREENWICH STREET, NEW YORK, NEW YORK 10013
----------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 24, 1998
----------------------
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Travelers
Series Fund Inc. (the "Fund") on behalf of the TBC Managed Income Portfolio
(the "Portfolio"), in connection with the special meeting of shareholders of
the Fund (the "Meeting") to be held at the offices of the Fund, 388 Greenwich
Street, New York, New York at 2:00 p.m. local time on November 24, 1998 (the
"Meeting").
The proposals to be presented at the Meeting are as follows:
(1) To approve a new Management Agreement between the Fund on behalf of
the Portfolio and Travelers Asset Management International Corporation
("TAMIC"); 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 September 30, 1998, as the
record date (the "Record Date") for the determination of holders of shares of
Common Stock of the Portfolio entitled to vote at the Meeting (the "Shares").
There are no persons who, to the knowledge of the Fund, owned beneficially
more than 5% of the Portfolio's outstanding Shares as of September 30, 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 and any fractional shares are entitled to a
fractional vote on all business of the Meeting. No Shares have cumulative
voting rights. The Portfolio had 4,351,562.11 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 October
22, 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
<PAGE>
Management Agreement (the "Proposal"). 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 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 Shares 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.
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 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
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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
APPROVAL OF NEW MANAGEMENT AGREEMENT
INTRODUCTION
The Board of Directors recommends that the shareholders of the Portfolio
approve a new Management Agreement (the "New Management Agreement") between
Travelers Asset Management International Corporation ("TAMIC") and the Fund on
behalf of the Portfolio. The Portfolio is currently managed by Travelers
Investment Adviser, Inc. ("TIA"), an affiliate of TAMIC, and is subadvised by
The Boston Company Asset Management, Inc. ("TBC Asset Management"). If the New
Management Agreement is approved, TAMIC will replace both TIA and TBC Asset
Management, and will provide the same services to the Portfolio that are
currently being provided by each of them. The New Management Agreement is
similar in all material respects to the current management agreement (the
"Current Management Agreement") in effect between TIA and the Fund, except for
the identity of the manager, references to the subadviser and the Subadvisory
Agreement (as defined below), and the dates of execution and effectiveness. A
copy of the New Management Agreement is set forth as Annex A. If the New
Management Agreement is not approved, the Current Management Agreement will
continue in effect.
The Fund was organized as a Maryland corporation on February 22, 1994 and
is an open-end management company with thirteen investment portfolios whose
shares are offered only to insurance company separate accounts which fund
certain variable annuity and variable life insurance contracts. TIA has served
as the Portfolio's investment manager since September 3, 1996 pursuant to a
Transfer and Assumption Agreement between TIA and Mutual Management Corp., an
Affiliate of TIA and the Portfolio's original investment manager. TBC Asset
Management has served as subadviser to the Portfolio since its inception on
June 2, 1994 pursuant to a subadvisory agreement (the "Subadvisory
Agreement"). The Current Management Agreement and the Subadvisory Agreement
were each approved by the initial shareholder of the Portfolio on June 2, 1994.
At a Board Meeting held on June 10, 1998, Fund management informed the Board
that it recently had reviewed the thirteen investment portfolios available
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through the Fund and determined that several of the fixed income alternatives
are substantially similar with respect to their volatility and risk profile.
Management also indicated that because the Portfolio had grown to only $45
million in assets since it commenced operations in 1994, it was considering
whether a slightly modified investment approach would make the Portfolio more
attractive to investors in existing variable annuity products as well as those
under development. Management further informed the Board that TAMIC's
investment approach, which is to manage assets by investing in higher rated
investment grade securities with shorter durations and maturities than those
held in the Portfolio currently, might be an appropriate one. At the same
meeting, two representatives from TAMIC addressed the Board and gave an
overview of TAMIC, including its investment philosophy, performance record and
portfolio management expertise.
IDENTICAL TERMS OF THE AGREEMENTS
The proposed New Management Agreement and the Current Management Agreement
(hereinafter jointly referred to as the "Agreements") are identical except for
the name of the manager, references to the subadviser and the Subadvisory
Agreement, and the dates of execution and effectiveness. Under the Agreements,
the Manager furnishes investment information and advice and makes
recommendations with respect to the purchase and sale of investments based
upon the Portfolio's investment policies. The Manager has responsibility for
the investment decisions of the Portfolio, subject to the supervision,
direction and approval of the Board of Directors.
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,
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 the Fund shall pay a monthly fee to the Manager
computed at an annual rate of 0.65% of the Portfolio's average daily net
assets. The aggregate management fee paid by the Portfolio during the Fund's
most recently completed fiscal year was $176,499.51. Of that fee, the
aggregate sub-advisory fee paid by TIA to the Subadviser, computed at an
annual rate of 0.30% of the Portfolio's average net assets was $81,461.24.
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
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outstanding voting securities, as defined by the 1940 Act, or (iii) the
Manager. The Agreements 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 or of the Manager, cast in person at a meeting called for
the purpose of voting on such approval.
INFORMATION ABOUT TAMIC
TAMIC is a wholly owned subsidiary of the Plaza Corporation, and an indirect
subsidiary of Citigroup Inc. Its principal office is located at One Tower
Square - 10PB, Hartford, CT 06183-2030. TAMIC serves as investment adviser to
a number of registered investment companies, insurance company general
accounts, insurance company separate accounts, pension plans and other
institutional accounts. TAMIC's investment management services focus primarily
on investment grade fixed income securities. Annex B indicates the net assets
and the advisory fee rate of each investment company advised or sub-advised by
TAMIC that has an investment objective similar to that of the Portfolio. For
those investment companies, TAMIC has not waived, reduced, or agreed to
reduce its compensation under any applicable contract. Information regarding
the directors and executive officers of TAMIC is set forth in Annex C.
THE BOARD'S CONSIDERATION
At a meeting held on September 9, 1998 management made a formal proposal to
the Board and recommended that TAMIC be hired to provide investment management
services to the Portfolio. Management explained that after careful analysis it
had determined that utilizing TAMIC's modified investment approach for the
Portfolio, with a slightly lower volatility and risk profile, would benefit
existing and future investors, would better complement the other twelve
investment alternatives available through the Fund, and would actually add an
alternative that is not currently available. TAMIC made a second presentation
to the Board, and answered Board members' questions.
In considering whether to approve the New Management Agreement with TAMIC
and to recommend approval to shareholders, the Board considered various
matters and materials supplied by management and TAMIC, including an analysis
of similar funds and accounts that are currently managed by TAMIC. The Board
also considered the skills and capabilities of TAMIC including its investment
philosophy, performance expectations and methods of operation. In particular,
the Board considered the financial resources of TAMIC and the reputation and
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expertise of TAMIC and its affiliates in domestic and international financial
markets. The Board further considered that the fee paid to TAMIC pursuant to
the New Management Agreement will be the same fee currently paid to TIA, which
includes the fee paid to TBC Asset Management, and will not in any manner
increase the fees or expenses otherwise incurred by the Portfolio's
shareholders.
In comparing the investment performance of the TAMIC advised funds and the
Portfolio, the Board was advised that the Portfolio generally had higher gross
returns over relevant periods than the TAMIC advised funds. TAMIC explained,
however, that the difference in performance resulted from TAMIC limiting its
investments to higher rated securities with shorter durations and maturities as
contrasted with the Portfolio investments in maturities with longer durations.
The Board also considered that for the most recent three year period ended
August 31, 1998 the funds advised by TAMIC had almost the same gross returns as
the performance for the Portfolio without the potential for higher volatility.
The Board further considered management's view that for those Portfolio
shareholders who are willing to assume higher risk with the hopes of higher
returns, there are other fixed income portfolios within the Fund with which
shareholders can exchange their Portfolio shares on a tax deferred basis.
Finally, the Board considered the fact that Travelers Insurance will include
the Portfolio (once it has been repositioned) in at least one new variable
annuity product, which will increase the assets of the Portfolio and
potentially lower overall expenses.
Based upon the Board's review and evaluations of the materials presented and
its consideration of all factors deemed relevant, the Board of Directors
concluded that the New Management Agreement is reasonable, fair and in the best
interests of the Portfolio and its shareholders. Accordingly, the Directors
present at the meeting, including a majority of the Directors who are not
parties to the New Management Agreement or "interested persons" of any such
parties within the meaning of the 1940 Act, unanimously approved the New
Management Agreement and voted to recommend its approval to the Portfolio's
shareholders. At the same meeting, the Board also approved management's
recommendation that the existing Subadvisory Agreement with TBC Asset
Management be terminated. The termination of the Subadvisory Agreement is
expected to become effective at the same time that TAMIC assumes its new role,
assuming that the required shareholder approval is received. The termination of
the Subadvisory Agreement does not require shareholder approval. Also, upon
effectiveness of the New Management Agreement, the Board approved changing the
name of the Portfolio to "Travelers Managed Income Portfolio."
RECOMMENDATION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE APPROVAL OF THE NEW AGREEMENT.
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GENERAL INFORMATION
PROXY SOLICITATION
The Portfolio has engaged the services of Management Information Services to
assist in the solicitation of proxies for the Meeting. The cost of soliciting
proxies will be borne by Travelers Insurance. The Portfolio expects to solicit
proxies principally by mail, but the Portfolio or Management Information
Services 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 shareholder 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
October 22, 1998
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ANNEX A
FORM OF MANAGEMENT AGREEMENT
TRAVELERS SERIES FUND INC.
(TRAVELERS MANAGED INCOME PORTFOLIO)
November , 1998
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORP.
One Tower Square--10PB
Hartford, CT 06183
Dear Sirs:
Travelers Series Fund Inc. (the "Company"), a corporation organized under
the laws of the State of Maryland, on behalf of the Travelers Managed Income
Portfolio (the "Portfolio"), confirms its agreement with Travelers Asset
Management International Corp. (the "Manager"), 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 on February 23, 1994 as amended
from time to time, and in the manner and to the extent as may from time to
time be approved by the Board of Directors of the Company (the "Board").
Copies of the Prospectus and the Statement have been or will be submitted to
the Manager. The Company agrees promptly to provide copies of all amendments
to the Prospectus and the Statement to the Manager on an on-going basis. The
Company desires to employ and hereby appoints the Manager to act as manager of
the Portfolio. The Manager accepts the appointment and agrees to furnish the
services for the compensation set forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision, direction and approval of the Board of the
Company, the Manager shall (a) maintain compliance procedures for the
Portfolio that it reasonably believes are adequate to ensure the Portfolio's
compliance with (i) the Investment Company Act of 1940, as amended (the "1940
Act") and the rules and regulations promulgated thereunder and (ii) the
Portfolio's investment objective(s), policies and restrictions as stated in
the Prospectus and the Statement;
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(b) make investment decisions for the Portfolio; (c) place purchase and sale
orders for portfolio transactions on behalf of the Portfolio; (d) employ
professional portfolio managers and securities analysts who provide research
services to the Portfolio; and (e) administer the Portfolio's corporate
affairs and, in connection therewith, furnish the Portfolio with office
facilities and with clerical, bookkeeping and recordkeeping services at such
office facilities. In providing those services, the Manager will conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Portfolio's assets.
3. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable law,
Salomon Smith Barney Inc.) to execute transactions on behalf of the Portfolio,
the Manager will seek the best overall terms available. In assessing the best
overall terms available for any transaction, the Manager will consider factors
it deems relevant, including, but not limited to, the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission,
if any, for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in evaluating the
best overall terms available, the Manager 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 Manager or its affiliates exercise investment
discretion. Nothing in this paragraph shall be deemed to prohibit the Manager
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 Manager
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 Manager or its affiliates exercise
investment discretion.
4. INFORMATION PROVIDED TO THE COMPANY
The Manager shall keep the Company informed of developments materially
affecting the Portfolio, and shall, on its own initiative, furnish the Company
from time to time with whatever information the Manager believes is
appropriate for this purpose.
5. STANDARD OF CARE
The Manager shall exercise its best judgment and shall act in good faith in
rendering the services listed in paragraphs 2 and 3 above. The Manager shall
not
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be liable for any error of judgment or mistake of law or for any loss suffered
by the Company in connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to protect or purport
to protect the Manager against any liability to the Company or the
shareholders of the Portfolio to which the Manager 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 Manager's reckless disregard
of its obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay the Manager an annual fee calculated at the rate of 0.65%
of the Portfolio's average daily net assets; the fee is calculated daily and
paid monthly. 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 Manager, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified in the
Prospectus and/or the Statement.
7. EXPENSES
The Manager 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 shall bear certain other expenses to be incurred in
its operation, including, but not limited to investment advisory, any sub-
advisory and any administration fees; fees for necessary professional and
brokerage services; 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 Manager hereunder on behalf of the Portfolio are borne by the
Company.
8. REDUCTION OF FEE
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement and the Portfolio's administration agreements,
if any, but excluding interest, taxes, brokerage and extraordinary expenses)
exceed the expense limitation of any state having jurisdiction over the
Portfolio, the Manager
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shall reduce its fee to the Portfolio 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 investment management, advice and administration in
that year, to the extent required by state law. A fee reduction pursuant to
this paragraph 8, if 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.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Company understands that the Manager 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, and the Company has no objection to the Manager's so acting,
provided that whenever the Portfolio and one or more other investment
companies or accounts managed or advised by the Manager 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 Portfolio recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for the
Portfolio. In addition, the Portfolio understands that the persons employed by
the Manager to assist in the performance of the Manager'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 Manager or any affiliate of the Manager to engage in and devote time and
attention to other businesses or to render services of whatever kind or
nature.
10. TERM OF AGREEMENT
This Agreement shall become effective November , 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 Manager. This Agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
11. REPRESENTATION BY THE COMPANY
The Company represents that a copy of the Articles of Incorporation is on
file with the Secretary of the State of Maryland.
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If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Agreement by signing and returning the enclosed copy
of this Agreement.
Very truly yours,
Travelers Series Fund Inc.
By:__________________________________
Name:
Title:
Accepted:
Travelers Asset Management International Corp.
By:__________________________________
Name:
Title:
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<PAGE>
ANNEX B
FUNDS FOR WHICH TAMIC SERVES AS INVESTMENT ADVISER OR SUB-ADVISER THAT HAVE AN
INVESTMENT OBJECTIVE SIMILAR TO THAT OF THE PORTFOLIO
<TABLE>
<CAPTION>
ANNUAL RATE OF
INVESTMENT ADVISER'S TOTAL NET ASSETS
COMPENSATION ADVISORY FOR THE MOST
(BASED ON AVERAGE FEES PAID RECENTLY COMPLETED
NAME OF COMPANY AND FUND DAILY NET ASSETS) TO TAMIC FISCAL YEAR
------------------------ -------------------- --------- ------------------
<S> <C> <C> <C>
Travelers Quality Bond
Account for Variable
Annuities................. 0.3233% $529,458 $159,031,299
Travelers Series Trust
Travelers Quality Bond
Portfolio................. 0.3233% 20,799 9,468,150
American Odyssey Funds, Inc.
Intermediate-Term Bond
Fund...................... 0.25% 493,298 108,595,634
</TABLE>
B-1
<PAGE>
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<PAGE>
ANNEX C
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF TAMIC
Set forth below is certain information regarding the principal executive
officer and each director of TAMIC.
<TABLE>
<CAPTION>
NAME, POSITION(S)
WITH PRINCIPAL OCCUPATIONS AND BUSINESS
TAMIC AND ADDRESS EXPERIENCE FOR PAST FIVE YEARS
----------------- ----------------------------------
<C> <S>
Marc P. Weill........ Chairman of the Board of Travelers Asset Management
388 Greenwich Street International Corp. ("TAMIC"); Senior Vice President
New York, NY 10013 of The Travelers Insurance Group, Inc. ("TIG"); Chief
Investment Officer and Senior Vice President of
Travelers Group Inc.
David A. Tyson....... Director, President and Chief Investment Officer of
One Tower Square TAMIC; Vice President of TIG
Hartford, CT 06183
John R. Britt........ Director and Secretary of TAMIC; Counsel of TIG
One Tower Square
Hartfor, CT 06183
Joseph E. Rueli, Jr.. Director, Senior Vice President and Chief Financial
One Tower Square Officer of TAMIC; Vice President of TIG
Hartford, CT 06183
Forrest D. Voss...... Director and Senior Vice President of TAMIC; Vice
388 Greenwich Street President of TIG
New York, NY 10013
William H. White..... Treasurer of TAMIC; Vice President and Treasurer of TIG
One Tower Square
Hartford, CT 06183
</TABLE>
C-1
ANNEX D
FORM OF PROXY CARD
TBC MANAGED INCOME PORTFOLIO
A SERIES OF TRAVELERS SERIES FUND INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS - NOVEMBER 24, 1998
The undersigned holders of shares of the TBC Managed Income Portfolio (the
"Portfolio"), a series of Travelers Series Fund Inc., a Maryland corporation,
hereby appoints Heath B. McLendon, Christina, T. Sydor, and Gordon E. Swartz,
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 on
November 24, 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.
SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD OF
DIRECTORS RECOMMEND VOTING "FOR" THE PROPOSAL. TO VOTE, FILL IN BOX
COMPLETELY.
FOR AGAINST ABSTAIN
1. Proposal to approve a new
Management Agreement for the TBC Managed
Income Portfolio. / / / / / /
2. IN THE DISCRETION OF SUCH PROXIES, UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
Mark here for address change and note and left / /
PLEASE SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
NOTE: Please sign exactly as
your name appears on this
Proxy. If joint owners, EITHER
may sign this Proxy. When signing as
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
______________________, 1998
Date
