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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 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:
TRAVELERS SERIES FUND INC.
GT Global Strategic Income Portfolio
388 Greenwich Street, New York, New York 10013
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On May 20, 1998
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 proposal have been unanimously approved by the Directors of
the Fund, who recommend you vote "FOR" the proposal. Your
immediate response will help save on the costs of additional
solicitations. We look forward to your participation.
PLEASE SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
March ___, 1998
Heath B. McLendon
Chairman of the Board of Directors
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) 224-7523
OR BY WRITING TO THE FUND AT 388 GREENWICH STREET, NEW YORK, NEW
YORK 10013.
SHAREHOLDERS OF THE PORTFOLIO ARE INVITED TO ATTEND THE
MEETING IN PERSON. IF YOU DO NOT EXPECT TO ATTEND THE MEETING,
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY
CARD, DATE AND SIGN THE PROXY CARD, AND RETURN IT IN THE ENVELOPE
PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK THAT YOU MAIL YOUR PROXY PROMPTLY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU CAST YOUR VOTE:
- - FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
TRAVELERS SERIES FUND INC.
GT Global Strategic Income Portfolio
388 Greenwich Street, New York, New York 10013
PROXY STATEMENT
NOTICE OF 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"). A
shareholder can revoke the proxy prior to its use by appearing at
the Meeting and voting in person, by giving written notice of such
revocation to the Secretary of the Fund, or by returning a
subsequently dated proxy. If you expect to attend the Meeting in
person, please notify the Portfolio by calling 1-800-224-
7523.
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 __, 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 a Portfolio to mean the lesser of (a) the
vote of holders of 67% or more of the shares of Common Stock of
the Portfolio present in person or by proxy at the 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 purchases by Travelers Insurance's separate accounts on behalf
of its variable contracts. Nevertheless, with respect to the
meeting, Travelers Insurance will solicit and accept timely voting
instructions from its contract owners who own units in a Travelers
Insurance separate account that correspond to shares in the
Portfolio and vote them in accordance with such instructions.
Travelers Insurance will vote all Portfolio shares related to the
variable contracts for which it has not received timely voting
instructions in the same proportion as the shares for which it has
received timely instructions. 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 last approved by Shareholders of the Portfolio at a
meeting held 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 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 Liechtenstein Global Trust,
AG and AMVESCAP PLC 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 all of the issued and outstanding
shares of LGT Holding Luxembourg SA, LGT (UK Holdings) PLC and LGT
Bank in Liechtenstein Ltd. (Cayman) and equity interests in LGT
Verwaltungs GmbH (together with their respective subsidiaries, 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 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 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 Frankfort, 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.
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. The Board of Directors also considered the terms of
the Purchase, including the possible effects of the Purchase upon
Chancellor LGT and upon the ability of Chancellor LGT to provide
advisory services to the Portfolio.
Based upon its review, the Board of Directors
concluded that the New Agreement is in the best interest of the
Portfolio and its shareholders. The Board of Directors also
concluded that as a consequence of the 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.
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 control of the Board of Directors and TIA.
The Agreements provide that all of the ordinary business
expenses incurred in the operations of the Portfolio shall be paid
by the Portfolio. These expenses include (but are not limited to)
advisory fees, sub-advisory fees (other than sub-advisory fees
paid pursuant to the Agreements), and administration fees, fees
for necessary professional and brokerage services, costs relating
to local administration of securities, fees for any pricing
service, the costs of regulatory compliance, and pro rata costs
associated with maintaining the Fund's legal existence and
shareholder relations.
The Agreements provide that TIA shall pay a monthly fee
to 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
Annex B contains a schedule of brokerage commissions
paid by the Portfolio on portfolio transactions during the past
fiscal year, including such commissions paid by the Fund to
affiliated brokers, Smith Barney Inc. and Robinson Humphrey, Inc.
The Agreements may be terminated without penalty by (i)
the Portfolio, (ii) the action of the shareholders of the
Portfolio, (iii) the Board of Directors of the Fund, or (iv)
Chancellor LGT on 60 days' written notice. 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 C 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 D.
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
presentation at a shareholders' meeting, proposals must be
received a reasonable time before a solicitation is made.
GENERAL
Management of the Portfolio does not intend to present
and does not have reason to believe that others will present any
other items of business at the Meeting. However, if other matters
are properly presented to the Meeting for a vote, the proxies will
be voted upon such matters in accordance with the judgment of the
person acting under the proxies.
A list of shareholders of the Portfolio entitled to be
present and vote at the Meeting will be available at the offices
of the Portfolio, 388 Greenwich Street, New York, New York 10013,
for inspection by any shareholder during regular business hours
for ten days prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting for the
Portfolio may necessitate adjournment and may subject the
Portfolio to additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN,
SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY, NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
CHRISTINA T. SYDOR
Secretary
March ___, 1998
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;
WHEREAS, the Sub-Adviser represents that it is
registered under the Advisers Act as an investment adviser and
engages in the business of acting as an investment adviser;
WHEREAS, the Company represents that its charter
authorizes the Board of Directors of the Company to classify or
reclassify authorized but unissued shares of the Company, and as
of the date of this Agreement the Company's Board of Directors has
authorized the issuance of series of shares representing interests
in investment portfolios;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree
as follows:
1. Investment Description; Appointment
The Company desires to employ its capital relating to the
Portfolio by investing and reinvesting in investments of the kind
and in accordance with the investment objective(s), policies and
limitations specified in the prospectus (the "Prospectus") and the
statement of additional information (the "Statement") filed with
the Securities and Exchange Commission as part of the Company's
Registration Statement on Form N-1A, as amended or supplemented
from time to time, and in the manner and to the extent as may from
time to time be approved by the Board of Directors of the Company
(the "Board"). Copies of the 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 a Transfer and Assumption 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 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 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.
12. Use of Name
The Company may use the name "G.T. Capital Management,
Inc.", "G.T. Capital Management", "G.T. Capital", "G.T.", "G.T.
Global" or "G.T. 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 "G.T. 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.
TRAVELERS SERIES FUND INC.
Attest: /s/
By:
TRAVELERS INVESTMENT ADVISER,
INC.
Attest: /s/
By:
CHANCELLOR LGT ASSET MANAGEMENT
INC.
Attest: /s/
ANNEX B
BROKERAGE FOR THE FISCAL YEAR ENDED 10/31/97
<TABLE>
<CAPTION>
Aggregate % of
Amount of Aggregate
Commissions Commissions
Paid to Paid to
Total Affiliated Affiliated
Fund Name Commissions Brokers(1)(2) Brokers
<S> <C> <C> <C>
GT Global Strategic Income Portfolio 0 0 0
</TABLE>
__________
(1) Smith Barney Inc.
(2) Robinson Humphrey, Inc.
ANNEX C
FUNDS FOR WHICH CHANCELLOR LGT SERVES AS INVESTMENT ADVISER OR
SUB-ADVISER THAT HAS AN INVESTMENT OBJECTIVE SIMILAR TO THAT OF
THE PORTFOLIO
<TABLE>
<CAPTION>
Name of Company and Fund Annual Rate Total Net Assets
(Based on Average Daily for the Most
Net Assets) Recently
Completed Fiscal
Year
<S> <C> <C>
GT Global Variable 0.75% $28,496,692
Strategic Income Fund
GT Global Variable 0.75% $8,251,027
Global Government Income
Fund
GT Global Government .725% on the first $500 million; $282,109,478
Income Fund .70% on the next $1 billion;
.675% on the next $1 billion; and
.65% on amounts thereafter
GT Global High Income .25% administration fees and its $365,792,411
Fund pro rata portion of the
investment management and
administration fees paid by its
Portfolio
GT Global Strategic .725% on the first $500 million; $420,623,795
Income Fund .70% on the next $1 billion;
.70% on the next $1 billion;
.675% on the next $1 billion; and
.65% on amounts thereafter
</TABLE>
ANNEX D
EXECUTIVE OFFICERS OF CHANCELLOR LGT
Set forth below is certain information regarding the executive
officers of Chancellor LGT.
<TABLE>
<CAPTION>
Name, Position(s) with Principal Occupations and Business
Chancellor LGT and Address Experience for Past Five Years _______
<S> <C>
Paul J. Loach, 46 Chairman of the Board of Directors of;
Chairman of the Board of Chancellor LGT since August 1997;
Directors Chancellor LGT since August 1997
1166 Avenue of the Americas Director and Managing Director of LGT
New York, NY 10036 Asset Management PLC (London) since
October 1994; Group Manager and Director
of Framlington Group from May 1988 to
October 1994.
Prince Philipp von und zu Director of Chancellor LGT since
Liechtenstein, 51 November 1996; Vice Chairman of
Director Supervisory Board of LGT Bank in
Herrengasse 12, P.O. Box 85 Liechtenstein (Deutschland ) GmbH
FL-9490 Vaduz, Liechtenstein (Frankfurt) since 1992; Chairman of the
Board of Directors and CEO of
Liechtenstein Global Trust (Vaduz) since
1990; Vice Chairman of the Board of
Directors of LGT Bank in Liechtenstein
since 1981.
John G. Greenwood, 51 Chief Economist and Director of
Director Chancellor LGT since November 1997;
50 California Street, 27th Chancellor LGT since November 1997;
Floor Chief Economist of Chancellor LGT from
San Francisco, CA 94111 February 1994 to October 1996; Chief
Economist of LGT Asset Management,
Limited (Hong Kong) from September 1974
to January 1994.
Nina Lesavoy, 40 Director and Head of North American
Director and Head of North Institutional Distribution for
American Institutional Chancellor LGT since November 1996;
Distribution Director and Head of Client Service and
1166 Avenue of the Americas Sales for Chancellor LGT from March 1990
New York, NY 10036 to October 1996.
Donald H. Young, 59 Director and Head of the Structured
Director Products Group for Chancellor LGT since
1166 Avenue of the Americas Products Group for Chancellor LGT since
New York, NY 10036 November 1996; Director and Head of
Global Asset Allocation for Chancellor
LGT from October 1988 to October 1996.
Ken W. Chancey, 52 Products Group for Chancellor LGT since
Senior Vice President Senior Vice President - Mutual Fund
Mutual Fund Accounting Senior Vice President - Mutual Fund
50 California Street, 27th Accounting, Chancellor LGT since 1997;
Floor Vice President - Mutual Fund Accounting,
San Francisco, CA 94111 Chancellor LGT from 1992 to 1997; Vice
President, Putnam Fiduciary Trust
Company from 1989 to 1992.
Helge K. Lee, 51 Chief Legal and Compliance Officer -
Chief Legal and Compliance North America for Chancellor LGT since
Officer and Secretary October 1997; Executive Vice President
50 California Street, 27th of the Asset Management Division of
Floor Liechtenstein Global Trust since October
San Francisco, CA 94111 1996; Senior Vice President, General
Counsel and Secretary of Chancellor LGT,
GT Global, 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
Chief Financial Officer Partners, Inc. since October 1997;
1166 Avenue of the Americas Managing Director and Chief Financial
New York, NY 10036 Officer of Chancellor LGT since October
1997; Managing Director and Controller
of Chancellor LGT from November 1996 to
October 1997; Managing Director of
Finance for Chancellor LGT from March
1989 to October 1996.
</TABLE>
ANNEX E
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
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" THE PROPOSAL. TO VOTE, FILL IN BOX
COMPLETELY
For Against Abstain FOR AGAINST ABSTAIN
1. Proposal to approve a new Investment Sub-
Advisory Agreement for the Fund. / / / / / /
2. IN THE DISCRETION OF SUCH PROXIES, UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
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.
