GREENWICH STREET INCOME FUND INC, N-2, 1994-03-30

GREENWICH STREET INCOME FUND INC
N-2, 1994-03-30

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<PAGE>1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
_________________________________
FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1993 /X/
Pre-Effective Amendment No.
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No.
___________________

Greenwich Street Income Fund Inc.
(a Maryland Corporation)
(Exact Name of Registrant as Specified in Charter)

1345 Avenue of the Americas
New York, New York 10105
(Address of Principal Executive Offices)

(212) 720-9150
(Registrant's Telephone Number, including Area Code)

Heath B. McLendon, Chairman of the Board
Greenwich Street Income Fund Inc.
Two World Trade Center
100th Floor
New York, New York 10048
(Name and Address of Agent for Service)
______________________
Copies to:
Burton M. Leibert, Esq.
Jon S. Rand, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
______________

Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this
Registration Statement.

If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act
of 1933, other than securities offered in connection with a dividend
reinvestment plan, check the following box /X/.
_________________

<PAGE>2

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>

Proposed Maximum
Title of Securities Being Amount Being Proposed Maximum Offering Price Aggregate Offering Price Amount of
Registered Registered (1) Per Unit (2) (2) Registration Fee

Common Stock ($.001 par 5,520,000 $12.50 $69,000,000 $23,793.10
value)

</TABLE>

Registrant amends this Registration Statement on such date as may be
necessary to delay its effective date until Registrant files a further amendment
that specifically states that this Registration Statement will thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the Registration Statement becomes effective on such date as
the Securities and Exchange Commission, acting pursuant to Section 8(a) of the
Securities Act of 1933, as amended, may determine.

____________________

(1) Includes 720,000 shares which may be offered by the Underwriter pursuant
to an option to cover over-allotments.

(2) Estimated solely for the purpose of calculating the registration fee.

<PAGE>3

GREENWICH STREET INCOME FUND INC.

Form N-2
Cross Reference Sheet

<TABLE>

Part A Item Caption Prospectus Caption
No.

1. Outside Front Cover ........................ Outside Front Cover of Prospectus
2. Inside Front and Outside Back Cover Page ... Inside Front and Outside Back Cover Page of
Prospectus

3. Fee Table and Synopsis ..................... Prospectus Summary: Fund Expenses
4. Financial Highlights ....................... Not Applicable

5. Plan of Distribution ....................... Cover Page; Purchase of Shares

6. Selling Shareholders ....................... Not Applicable
7. Use of Proceeds ............................ Use of Proceeds; Investment Objectives and
Policies

8. General Description of the Registrant ...... The Fund; Investment Objectives and Policies;
Risk Factors and Special Considerations;
Investment Practices
9. Management ................................. Management of the Fund; Description of Shares;
Custodian and Transfer Agent

10. Capital Stock, Long-Term Debt, and Other Taxation; Dividend Reinvestment Plan;
Securities................................. Description of Shares

11. Defaults and Arrears on Senior Securities .. Not Applicable
12. Legal Proceedings .......................... Not Applicable

13. Table of Contents of the Statement of Additional Information Further Information

Part B Item Statement of Additional
No. Information Caption

14. Cover Page ................................. Cover Page

15. Table of Contents .......................... Cover Page
16. General Information and History ............ Not Applicable

17. Investment Objective and Policies .......... Investment Objectives and Policies; Investment
Restrictions
18. Management ................................. Management of the Fund; Officers and Directors

19. Control Persons and Principal Holders of Securities Not Applicable

20. Investment Advisory and Other Services ..... Management of the Fund
21. Brokerage Allocation and Other Practices ... Portfolio Transactions

22. Tax Status ................................. Taxation
23. Financial Statements ....................... Statement of Assets and Liabilities

</TABLE>

<PAGE>4

Part C
Item No.

Information required to be included in Part C is set forth, under the
appropriate item so numbered, in Part C of this Registration Statement.

<PAGE>5

4,800,000 Shares
Greenwich Street Income Fund Inc.

Prospectus , 1994

Greenwich Street Income Fund Inc. (the "Fund") is a newly organized,
diversified, closed-end management investment company. The Fund seeks income as
a primary investment objective with capital appreciation as a secondary
objective. The Fund will attempt to achieve its investment objectives by
allocating and reallocating its assets among the following market segments
("Segments"): high-yielding, high risk corporate bonds, debentures, notes and
preferred stock (the "High Yield Segment"); convertible securities and
combinations of nonconvertible fixed-income securities and warrants or call
options that together resemble convertible securities (the "Convertible
Segment"); and income producing equity securities, including dividend paying
common stocks (the "Equity Income Segment"). High-yield securities purchased by
the Fund will generally be rated in the lower rating categories of nationally
recognized securities rating organizations, as low as C by Moody's Investors
Service, Inc. ("Moody's") or CCC by Standard & Poor's Rating Group ("S&P"), or
in non-rated fixed income securities that the Fund's investment manager,
Greenwich Street Advisors (the "Investment Manager"), a division of Mutual
Management Corp., determines to be of comparable quality. The Fund will not
purchase high-yield securities rated lower than B by both Moody's and S&P, if,
immediately after purchase, more than 10% of the Fund's total assets are
invested in such securities. The Fund may invest in securities rated higher
than Ba by Moody's and BB by S&P without limitation when the difference in
yields between quality classifications is relatively narrow.

Investments in high-yield, lower grade securities, also called "junk
bonds", are subject to special risks, including a greater risk of loss of
principal and non-payment of interest. There is no assurance that the Fund will
achieve its investment objectives. The shares of closed-end investment
companies have in the past frequently traded at discounts from their net asset
values or initial offering prices. Investors should carefully assess the risks
associated with an investment in the Fund. See "Investment Objectives and
Policies" and "Risk Factors and Special Considerations." The address of the
Fund is 1345 Avenue of the Americas, New York, New York 10105 and its telephone
number is (212) 720-9150.
(Continued on page 3)
<TABLE>

Price to Sales Proceeds to
Public Load(1)(2) Fund(3)
<S> <C> <C> <C>

Per Share $12.50 $0.00 $12.50

Total(4) $60,000,000 $0.00 $60,000,000

</TABLE>

(Footnotes on page 3)
Smith Barney Shearson Inc.
Distributor
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<PAGE>6

(Continued from page 1)

This Prospectus sets forth concisely the information about the Fund
that a prospective investor ought to know before investing and should be
retained for future reference. A Statement of Additional Information dated ,
1994 containing additional information about the Fund has been filed with
the Securities and Exchange Commission and is hereby incorporated by reference
in its entirety into this Prospectus. A copy of the Statement of Additional
Information, the table of contents of which appears on page 37 of this
Prospectus, may be obtained without charge by calling (212) 720-9150.

Prior to this offering there has been no market for the Fund's common
stock (the "Common Stock"). The Fund has made application to list the Common
Stock on the New York Stock Exchange (the "NYSE"). However, during an initial
period that is not expected to exceed 30 days from the date of this Prospectus,
the Common Stock will not be listed on any securities exchange. During this
period, Smith Barney Shearson Inc. does not intend to make a market in the
Common Stock. Consequently, it is anticipated that an investment in the Fund
will be illiquid during this period. See "Purchase of Shares."

Shares of Common Stock will be offered through Smith Barney Shearson
Inc. ("Smith Barney Shearson") and certain of its affiliates. There are no sale
loads or underwriting discounts on purchases of shares of Common Stock. Smith
Barney Shearson will compensate from its own assets the broker-dealers
participating in the offering. The minimum purchase during the offering
described in this Prospectus is 400 shares of Common Stock and a minimum of 50
shares of Common Stock for Individual Retirement Accounts and Self-Employed
Retirement Plans. See "Purchase of Shares."
_____________________

(Footnotes from page 1)

(1) The Fund's shares of common stock will be sold during the offering without
any sales load. Smith Barney Shearson Inc. will compensate sales personnel
out of its own funds.
(2) The Fund and the Investment Manager have agreed to indemnify Smith Barney
Shearson Inc. against certain liabilities under the Securities Act of 1933,
as amended.
(3) Before deducting organizational and offering expenses payable by the Fund,
estimated to be approximately $ , which includes up to $____________
to be paid to the Underwriter in partial reimbursement of its expenses.
(4) The Fund has granted Smith Barney Shearson Inc. an option to purchase up to
an additional 720,000 shares of common stock to cover over-allotments. If
the option is exercised in full, the Total Price to Public, Sales Load and
Proceeds to the Fund will be $69,000,000, $0.00 and $69,000,000,
respectively. See "Purchase of Shares."

<PAGE>7

IN CONNECTION WITH THE OFFERING, SMITH BARNEY SHEARSON MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NYSE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

Until , 1994, all dealers effecting transactions in the
registered securities, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.

<PAGE>8

Table of Contents

Prospectus Summary 7

Fund Expenses 11

The Fund 12

Use of Proceeds 12

Investment Objectives and Policies 13

Risk Factors and Special Considerations 15

Investment Practices 19

Taxation 25

Management of the Fund 28

Dividends and Distributions 30

Dividend Reinvestment Plan 30

Description of Shares 33

Purchase of Shares 34

Custodian and Transfer Agent 36

Legal Opinions 36

Experts 36

Further Information 36

Ratings (Appendix A) 38

<PAGE>9

Prospectus Summary

The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus. Cross references in this
summary are to headings in the body of the Prospectus.

The Fund Greenwich Street Income Fund Inc. (the "Fund") is a newly organized,
diversified, closed-end management investment company. See "The Fund."

Investment Objectives The primary investment objective of the Fund is income.
Capital appreciation is a secondary objective. See "Investment Objectives and
Policies."

Investments The Fund will seek to achieve its investment objectives by
allocating and reallocating its assets among the following Segments: the High
Yield Segment, consisting of high-yielding corporate debt obligations and
preferred stock; the Convertible Segment, consisting of convertible securities
and a combination of nonconvertible fixed income securities and warrants or call
options that together resemble convertible securities; and the Equity Income
Segment, consisting of income producing equity securities including dividend
paying common stocks. Although the Fund may invest in securities of any
maturity, under current market conditions the Fund intends that the High Yield
Segment will have an average remaining maturity of between 5 and 10 years.
There is no minimum or maximum percentage of the Fund's assets that must be
allocated to any Segment; under current market conditions, the Investment
Manager expects to allocate approximately 50% of its assets to the High Yield
Segment and 25% of its assets to each of the Convertible and Equity Income
Segments.

High-yield securities purchased by the Fund generally will be rated in
the lower rating categories of nationally recognized security rating
organizations, as low as C by Moody's or CCC by S&P, or in non-rated securities
that the Investment Manager, deems of comparable quality. However, the Fund
will not purchase high-yield securities rated lower than B by both Moody's and
S&P if more than 10% of its total assets are invested in such securities
immediately after such purchase. The issuers of the debt and equity securities
in which the Fund may invest may be domestic companies or non-U.S. companies or
governments. The Fund may invest up to 10% of its assets in the securities of
foreign issuers that are denominated in currencies other than the U.S. dollar,
may invest without limitation in securities of foreign issuers that are
denominated in U.S. dollars and may invest up to 5% of its assets in securities
of issuers in

<PAGE>10

emerging markets or developing countries. There are certain additional risks
associated with investments in securities of non-U.S. issuers. There can be no
assurance that the Fund's investment objectives will be achieved. See
"Investment Objectives and Policies."

Purchase of Shares Shares of Common Stock may be purchased through Smith Barney
Shearson. See "Purchase of Shares."

The Offering The Fund's Common Stock will be offered at a price of $12.50
during the Offering. Application has been made to list the Common Stock on the
New York Stock Exchange ("NYSE") for trading under the symbol " ". Trading in
the Common Stock on the NYSE is not anticipated to begin, however, until a date
within 30 days after the date of this Prospectus.

Smith Barney Shearson does not intend to make a market in the Common
Stock during the period in which the Common Stock is not traded on the NYSE. As
a result, during that period, an investment in the Common Stock should be
considered illiquid. Smith Barney Shearson intends to make a market in the
Common Stock after trading in the Common Stock has commenced on the NYSE. Smith
Barney Shearson, however, is not obligated to conduct market-making activities
and any such activities may be discontinued at any time without notice, at the
sole discretion of Smith Barney Shearson. No assurance can be given as to the
liquidity of, or the trading market for, the Common Stock as a result of any
market-making activities undertaken by Smith Barney Shearson. See "Purchase of
Shares."

No Sales Charges The Common Stock will be sold during the Offering subject to
no sales load, but Smith Barney Shearson will compensate sales personnel out of
its own funds. See "Purchase of Shares."

Minimum Purchase The minimum purchase during the Offering is 400 shares of
common stock and a minimum 50 shares of common stock for Individual Retirement
Accounts and Self-Employed Retirement Plans. See "Purchase of Shares."

Investment Manager Greenwich Street Advisors, a division of Mutual Management
Corp., serves as the Fund's investment manager. The Investment Manager provides
investment advisory and management services to investment companies affiliated
with Smith Barney Shearson. Smith Barney Shearson is a wholly owned subsidiary
of Smith Barney Shearson Holdings Inc., which is in turn a wholly owned
subsidiary of The Travelers Inc. ("Travelers"). Subject to the supervision and
direction of the Fund's Board of Directors, the Investment Manager allocates and

<PAGE>11

reallocates assets among the Segments, manages the securities held by the Fund
in accordance with the Fund's stated investment objectives and policies, makes
investment decisions for the Fund, places orders to purchase and sell securities
on behalf of the Fund and employs professional portfolio managers. Mutual
Management Corp. provides certain administration services to the Fund, including
overseeing the Fund's operations and its relations with other service providers
and providing executive and other officers to the Fund. The Fund pays the
Investment Manager a fee ("Management Fee") for services provided to the Fund
that is computed weekly and paid monthly at the annual rate of 1.10% of the
value of the Fund's average weekly net assets. This Management Fee is higher
than the rates for similar services paid by other recently organized, publicly
offered, closed-end, management investment companies that have investment
objectives and policies similar to those of the Fund. The Fund will bear other
expenses and costs in connection with its operation in addition to the costs of
investment management services. See "Management of the Fund."

Sub-Administrator The Boston Company Advisors, Inc. ("Boston Advisors") serves
as the Fund's sub-administrator pursuant to an agreement with Mutual Management
Corp. Boston Advisors is a wholly owned subsidiary of The Boston Company, Inc.
("TBC"), a financial services holding company, which is a wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"). See "Management of the Fund."

Custodian Boston Safe Deposit and Trust Company ("Boston Safe") serves as the
Fund's custodian. See "Custodian and Transfer Agent."

Transfer Agent The Shareholders Services Group, Inc. ("TSSG") serves as the
Fund's transfer agent, dividend-paying agent and registrar. See "Custodian and
Transfer Agent."

Dividends and Distributions The Fund expects to pay monthly dividends of net
investment income (income other than net realized capital gains) and to
distribute net realized capital gains, if any, annually. All dividends or
distributions with respect to shares of Common Stock will be reinvested
automatically in additional shares through participation in the Fund's Dividend
Reinvestment Plan, unless a shareholder elects to receive cash. See "Dividends
and Distributions" and "Dividend Reinvestment Plan."

Initial dividends to holders of Common Stock are expected to be
declared approximately 60 days, and paid

<PAGE>12

approximately 90 days, from the completion of the Offering. See "Dividends and
Distributions."

Risk Factors and Special Considerations The Fund is a closed-end investment
company with no history of operations that is designed primarily for long-term
investors and not as a trading vehicle. The net asset value of the Common Stock
will change with changes in the value of the securities held by the Fund.
Because the Fund will invest primarily in fixed-income securities, the net asset
value of the Common Stock can be expected to change as levels of interest rates
fluctuate. The value of the fixed-income securities held by the Fund, and thus
the Fund's net asset value, may also be affected by other economic, market and
credit factors. See "Risk Factors and Special Considerations."

The Fund will invest in lower-rated securities and non-rated
securities of comparable quality. Generally, these securities offer a higher
return potential than higher-rated securities but involve greater volatility of
price and risk of loss of income and principal including the possibility of
default or bankruptcy of the issuers of such securities. Lower-rated and
comparable non-rated securities will likely have large uncertainties or major
risk exposures to adverse conditions and are predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. Securities rated lower than B by
both Moody's and S&P, including bonds rated as low as C by Moody's or CCC by
S&P, can be regarded as having extremely poor prospects of ever attaining any
real investment standing and may be in default with payment of interest and/or
repayment of principal in arrears, although the Fund does not anticipate
investments in securities that, at the time of purchase, are in default.
Accordingly, it is possible that these types of factors could, in certain
instances, reduce the value of securities held by the Fund, with a commensurate
effect on the value of the Fund's shares. See "Investment Objectives and
Policies" and "Risk Factors and Special Considerations."

Certain of the instruments held by the Fund, and certain investment
techniques that the Fund may employ, might expose the Fund to special risks.
The instruments exposing the Fund to special risks include lower-rated and non-
rated securities, convertible and synthetic convertible securities, foreign
securities, non-publicly traded and illiquid securities and securities of
issuers in developing countries and unseasoned issuers. The Fund's use of
investment techniques such as financial futures and options transactions,
securities transactions on a when-issued or delayed delivery basis, repurchase
agreements, reverse repurchase agreements and lending

<PAGE>13

portfolio securities may pose special risks to the Fund. See "Risk Factors and
Special Considerations" and "Investment Practices."

The Fund's Articles of Incorporation include provisions that could
have the effect of limiting the ability of other entities or persons to acquire
control of the Fund and of depriving shareholders of an opportunity to sell
their shares of Common Stock at a premium over prevailing market prices. See
"Description of Shares."

The shares of closed-end investment companies, when listed for trading
on a securities exchange, often, although not always, trade at a discount from
their net asset value. The Common Stock, when traded on the NYSE, may likewise
trade at a discount from net asset value. In addition, the trading price of the
Common Stock when listed may be less than the public offering price per share of
Common Stock applicable to the Offering. The Fund's market price risk may be
greater for investors who intend to sell their shares of Common Stock within a
relatively short period after completion of the Offering. See "Risk Factors and
Special Considerations" and "Purchase of Shares."

Fund Expenses

The following tables are intended to assist investors in understanding the
various costs and expenses directly or indirectly associated with investing in
the Fund.

Stockholder Transaction Expenses

Sales Load (as a percentage of offering price) None
Dividend Reinvestment Plan Fees and Cash
Purchase Plan Fees None

Annual Expenses

(as a percentage of net assets attributable
to common stock)
Management Fees 1.10%
Other Expenses 0.15%

TOTAL ANNUAL FUND OPERATING EXPENSES 1.25%

"Management Fees" as shown above, is for the initial fiscal year of the Fund.
See "Use of Proceeds" and "Management of the Fund" for additional information.
"Other Expenses", as shown above, is

<PAGE>14

based upon estimated amounts of expenses for the initial fiscal year.

Example

An investor would pay the following expenses on a $1,000 investment in
the Fund, assuming a 5% annual return:

One Year Three Years Five Years Ten Years

$ $ $ $

The above example should not be considered a representation of past or
future expenses or performance, and the Fund's actual expenses may be more or
less than those shown. For a more complete description of these costs and
expenses, see "Management of the Fund."

The Fund

Greenwich Street Income Fund Inc. is a newly organized, diversified,
closed-end management investment company. The Fund was incorporated under the
laws of the State of Maryland on March 30, 1994 and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund has no
operating history. The Fund's principal office is located at 1345 Avenue of the
Americas, New York, New York 10105 and its telephone number is (212) 720-9150.

Use of Proceeds

The net proceeds of the Offering will be $60,000,000 (or approximately
$69,000,000 assuming the Underwriter exercises the over-allotment option in
full) after deducting organizational and offering expenses of the Fund,
estimated to be approximately $ .

The net proceeds of the Offering will be invested in accordance with
the Fund's investment objectives and management policies as soon as practicable
after completion of the Offering. The Fund anticipates being able to be fully
invested within six months after completion of the Offering. Pending such
investment, the proceeds may be invested in high quality, short-term, money
market securities.

<PAGE>15

Investment Objectives and Policies

Set out below is a general description of the investment objectives
and principal investment policies of the Fund. No assurance can be given that
the Fund will be able to achieve its investment objectives. See also
"Investment Objectives and Policies" and "Investment Restrictions" in the
Statement of Additional Information.

GENERAL

The Fund's primary investment objective is income with capital
appreciation as a secondary objective. The Fund will seek to achieve its
investment objectives by allocating and reallocating its assets among the High
Yield Segment, the Convertible Segment and the Equity Income Segment. Under
current market conditions, it is anticipated that the Fund's initial allocation
of its assets will be 50% to the High Yield Segment and 25% to each of the
Convertible Segment and the Equity Income Segment. However, this allocation may
be modified by the Investment Manager at any time based on its evaluation of the
comparative investment prospects of the Segments.

The allocation and reallocation of the Fund's assets will be
undertaken by the Investment Manager on the basis of its analysis of economic
and market conditions and the relative risks and opportunities of each Segment.
In general, the particular types of income producing securities selected for
investment by the Fund at any given time will be those that, in the view of the
Investment Manager, promise significant income growth potential with the
prospect of a reduced tendency of downward price movement. The Fund typically
would not invest in securities if the Investment Manager has determined that the
income potential is not sufficient to justify the risks associated with the
securities. At any given time, the Fund may be entirely or only partially
invested in a particular Segment. Under normal conditions, at least 65% of the
Fund's assets will be invested in income producing securities.

High Yield Segment. The High Yield Segment will consist of high-
yielding, high risk corporate debt obligations and preferred stock. High-
yielding securities purchased by the Fund generally will be rated in the lower
rating categories of nationally recognized security rating organizations, as low
as C by Moody's or CCC by S&P, or in unrated securities that the Investment
Manager deems of comparable quality. However, the Fund will not purchase
securities rated lower than B by both Moody's and S&P if more than 10% of its
total assets would be invested in those securities immediately after such
purchase.

<PAGE>16

The Fund may invest in securities rated higher than Ba by Moody's and BB by S&P
without limitation when the difference in yields between quality classifications
is considered by the Fund's Investment Manager to be relatively narrow.
Although the Fund may invest in securities of any maturity, under current market
conditions the Fund intends that the High Yield Segment will have an average
remaining maturity of between 5 and 10 years. The Investment Manager may adjust
the Fund's average maturity when, based on interest rate trends and other market
conditions, it deems it appropriate to do so.

Convertible Segment. With respect to the Convertible Segment, the
Fund will invest in convertible securities and in combinations of nonconvertible
fixed income securities and warrants or call options that together resemble
convertible securities ("synthetic convertible securities"). The Fund is not
required to sell securities, and may retain on a temporary basis securities
received, upon conversion of convertible securities or upon exercise of warrants
or call options that are components of synthetic convertible securities to
permit their orderly disposition, to establish long-term holding periods for tax
purposes or for other reasons.

Equity Income Segment. With respect to the Equity Income Segment, the
Fund will invest in income producing equity securities, including dividend-
paying common stocks. The Investment Manager has developed quantitative
investment criteria against which prospective investments will be evaluated and
will make buy and sell decisions based on those criteria. Those criteria
establish parameters for suitable investments and deal with such matters as
market capitalization, credit quality, dividend growth, historic earnings,
current yield and industry concentration. The criteria, which may be changed by
the Investment Manager in light of its experience in managing the Equity Income
Segment or in response to changing market or economic conditions, are designed
to identify companies with consistent dividend paying histories, relatively high
levels of dividends, the capacity to raise dividends in the future and the
potential for capital appreciation. Consistent with the data used in developing
and maintaining the quantitative investment criteria, the Fund expects to invest
primarily in domestic and foreign companies of varying sizes, generally with
capitalizations exceeding $250 million in a wide range of industries.

Other Investment Practices. In addition, the Fund may lend its
portfolio securities and purchase or sell securities on a when-issued or
delayed-delivery basis. The Fund does not currently intend to leverage its
investments although it reserves

<PAGE>17

the right to do so. The Fund may hedge against possible declines in the value
of its investments by entering into interest rate futures contracts and related
options, swaps and other financial instruments.

The Fund may invest up to 10% of its assets in the securities of
foreign issuers that are denominated in currencies other than the U.S. dollar
and may invest without limitation in securities of foreign issuers that are
denominated in U.S. dollars. In order to mitigate the effects of uncertainty in
future currency exchange rates affecting the Fund's non-dollar investments, the
Fund may, in very limited circumstances, engage in various currency related
hedging transactions, currency exchange transactions and currency futures
contracts and related options and purchase options on foreign currencies.
Additional information regarding these currency related transactions, which, in
each case the Fund does not anticipate will involve more than 5% of the Fund's
net assets in the foreseeable future, is included in the Statement of Additional
Information.

Additional information concerning the Fund's investment policies,
restrictions and techniques is included in the Statement of Additional
Information.

Risk Factors and Special Considerations

There is no assurance that the Fund will achieve its investment
objectives. Investments in lower-rated securities are subject to special risks,
including a greater risk of loss of principal and non-payment of interest.
Investments in convertible securities are also subject to special risks
including interest rate risk. An additional risk is the prospect that any
allocation among the three Segments may not maximize the Fund's opportunity to
earn income or capital appreciation. An investor should carefully consider the
following factors before purchasing shares of Common Stock:

LOWER-RATED AND NON-RATED SECURITIES

Generally, lower-rated securities offer a higher return potential than
higher-rated securities but involve greater volatility of price and greater risk
of loss of income and principal, including the possibility of default or
bankruptcy of the issuers of such securities. Lower-rated securities and
comparable non-rated securities will likely have large uncertainties or major
risk exposure to adverse conditions and are predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. The occurrence of adverse

<PAGE>18

conditions and uncertainties would likely reduce the value of securities held by
the Fund, with a commensurate effect on the value of the Fund's shares.

The markets in which lower-rated securities or comparable non-rated
securities are traded generally are more limited than those in which higher-
rated securities are traded. The existence of limited markets for these
securities may restrict the availability of securities for the Fund to purchase
and also may restrict the ability of the Fund to obtain accurate market
quotations for purposes of valuing securities and calculating net asset value or
to sell securities at their fair value.

While the market values of lower-rated securities and comparable non-
rated securities tend to react less to fluctuations in interest rate levels than
do those of higher-rated securities, the market values of certain of these
securities also tend to be more sensitive to individual corporate developments
and changes in economic conditions than higher-rated securities. In addition,
lower-rated securities and comparable non-rated securities generally present a
higher degree of credit risk. Issuers of lower-rated securities and comparable
non-rated securities are often highly leveraged and may not have more
traditional methods of financing available to them so that their ability to
service their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. The risk of loss due to
default by such issuers is significantly greater because lower-rated securities
and comparable non-rated securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness. The Fund may incur
additional expenses to the extent that it is required to seek recovery upon a
default in the payment of principal or interest on its portfolio holdings.

Fixed-income securities, including lower-rated securities and
comparable non-rated securities, frequently have call and buy-back features that
permit their issuers to call or repurchase the securities from their holders,
such as the Fund. If an issuer exercises these rights during periods of
declining interest rates, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return to the Fund.

Up to 10% of the Fund's assets may be invested in securities rated
lower than B by both Moody's and S&P. Securities which are rated Ba by Moody's
or BB by S&P have speculative characteristics with respect to capacity to pay
interest and repay principal. Securities that are rated B

<PAGE>19

generally lack characteristics of the desirable investment and assurance of
interest and principal payments over any long period of time may be small.
Securities that are rated C or CCC or below are of poor standing. Those issues
may be in default or present elements of danger with respect to principal or
interest. A general description of Moody's and S&P's ratings of corporate bonds
is set forth in Appendix A to this Prospectus.

In general, the ratings of nationally recognized statistical rating
organizations represent the opinions of these agencies as to the quality of
securities that they rate. These ratings, however, are relative and subjective,
and are not absolute standards of quality and do not evaluate the market value
risk of the securities. It is possible that an agency might not change its
rating of a particular issue to reflect subsequent events. These ratings will
be used by the Fund as initial criteria for the selection of portfolio
securities, but the Fund also will rely upon the independent advice of the
Investment Manager to evaluate potential investments.

In light of these risks, the Investment Manager will take various
factors into consideration in evaluating the creditworthiness of an issue,
whether rated or non-rated. These factors may include, among others, the
issuer's financial resources, its sensitivity to economic conditions and trends,
the operating history of and the community support for the facility financed by
the issue, the ability of the issuer's management and regulatory matters.

CONVERTIBLE SECURITIES AND SYNTHETIC CONVERTIBLE SECURITIES

Convertible securities are fixed-income securities that may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have general characteristics similar to
both fixed-income and equity securities. Although to a lesser extent than with
fixed-income securities generally, the market value of convertible securities
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stocks and, therefore, also will react to
variations in the general market for equity securities. A unique feature of
convertible securities is that as the market price of the underlying common
stock declines, convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value declines to the same extent as the
underlying common stock. When the market

<PAGE>20

price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.

As fixed-income securities, convertible securities are investments
that provide for a stable stream of income with generally higher yields than
common stocks. Of course, like all fixed-income securities, there can be no
assurance of current income because the issuers of the convertible securities
may default on their obligations. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to benefit
from increases in the market price of the underlying common stock. However,
there can be no assurance of capital appreciation because securities prices
fluctuate.

Convertible securities generally are subordinated to other similar but
nonconvertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.

Unlike a convertible security which is a single security, a synthetic
convertible security is typically comprised of two distinct securities that
together resemble convertible securities in certain respects. Synthetic
convertible securities are created by combining non-convertible bonds or
preferred stocks with warrants or stock call options. The options that will
form elements of synthetic convertible securities will be listed on a securities
exchange or on the National Association of Securities Dealers Automated
Quotations System. The two components of a synthetic convertible security,
which will be issued with respect to the same entity, generally are not offered
as a unit, and may be purchased and sold by the Fund at different times.
Synthetic convertible securities differ from convertible securities in certain
respects, including that each component of a synthetic convertible security has
a separate market value and responds differently to market fluctuations.
Investing in synthetic convertible securities involves the risks normally
involved in holding the securities comprising the synthetic

<PAGE>21

convertible security. In the recent past, various types of synthetic
convertible securities have emerged combining equity options with common stock
where the component features are not separately tradable, including PERCS
(Preferred Equity Redeemable Preferred Stock), ELKS (Equity Linked Securities)
and DECS (Debt Exchangeable into Common Stock).

Investment Practices

In connection with the investment objectives and policies described
above, the Fund may, but is not required to, utilize various investment
techniques to earn income, facilitate portfolio management and mitigate risk.
These investment techniques utilize interest rate and currency futures
contracts, put and call options on such futures contracts, currency exchange
transactions, illiquid securities, securities of unseasoned issuers and
securities of foreign governments and corporations including those of developing
countries. These techniques are generally accepted by modern portfolio managers
and are regularly utilized by many investment companies and other institutional
investors. These investment practices entail risks. Although the Investment
Manager believes that these investment techniques may assist the Fund in
achieving its investment objectives, no assurance can be given that the use of a
particular technique will be successful or that the Fund will achieve its
objectives. Any or all of the investment techniques available to the Investment
Manager described below may be used at any time and there is no particular
strategy that dictates the use of one technique rather than another, since the
use of any investment technique is a function of numerous variables including
market conditions.

<PAGE>22

meet daily variation margin requirements on its futures contracts or options on
futures contracts at a time when it may be disadvantageous to do so. There may
be an imperfect correlation between the Fund's portfolio holdings and futures
contracts or options on futures contracts entered into by the Fund, which may
prevent the Fund from achieving the intended hedge or expose the Fund to risk of
loss. Further, the Fund's use of futures contracts and options on futures
contracts to reduce risk involves cost and will be subject to the Investment
Manager's ability to predict correctly changes in interest rate relationships or
other factors. No assurance can be given that the Investment Manager's judgment
in this respect will be correct.

Foreign Securities. There are certain risks involved in investing in
securities of companies and governments of foreign nations which are in addition
to the usual risks inherent in domestic investments. These risks include those
resulting from devaluation of currencies, future adverse political and economic
developments, expropriation and the possible imposition of currency exchange
blockages or other foreign governmental laws or restrictions, the relative lack
of public information concerning issuers and the lack of uniform accounting,
auditing and financial reporting standards or of other regulatory practices and
requirements comparable to those applicable to domestic companies. The net
asset value of the Fund may be adversely affected by fluctuations in value of
one or more foreign currencies relative to the U.S. dollar, although the Fund
will not invest more than 10% of its assets in securities denominated in
currencies other than the U.S. dollar.

Securities of Developing Countries. A developing country or emerging
market generally is considered to be a country or market that is in the initial
stages of its industrialization cycle. Investing in the equity and fixed-income
markets of developing countries involves exposure to economic structures that
are generally less diverse and mature, and to political systems that can be
expected to have less stability, than those of developed countries. Historical
experience indicates that the markets of developing countries have been more
volatile and have provided higher returns than the markets of the more mature
economies of developed countries.

Money Market Instruments. Under normal market conditions, the Fund
will seek to minimize the percentage of its assets held in money market
instruments and will hold no more than 10% in such instruments. When the
Investment Manager believes that market conditions warrant, however, the Fund
may adopt a temporary defensive posture in any or all of the Segments

<PAGE>23

and may hold its assets in cash and invest in short-term instruments without
limitation. Short-term instruments in which the Fund may invest include:
securities issued or guaranteed by the U.S. Government, its agencies,
authorities or instrumentalities ("U.S. government securities"); bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances of domestic or foreign banks, domestic savings and loan associations
and similar institutions); commercial paper rated no lower than A-2 by S&P or
Prime-2 by Moody's or the equivalent from another major rating service or, if
unrated, of an issuer having an outstanding, unsecured debt issue then rated
within the three highest rating categories; and repurchase agreements as
described below.

U.S. Government Securities. Among the money market instruments in
which the Fund may invest are U.S. government securities. The U.S. government
securities in which the Fund may invest include: direct obligations of the U.S.
Treasury (such as Treasury Bills, Treasury Notes and Treasury Bonds), and U.S.
government securities, including securities that are supported by the full faith
and credit of the United States (such as certificates issued by the Government
National Mortgage Association); securities that are supported by the right of
the issuer to borrow from the United States Treasury (such as securities of
Federal Home Loan Banks); and securities that are supported only by the credit
of the instrumentality (such as bonds issued by Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation). Treasury Bills
have maturities of less than one year, Treasury Notes have maturities of one to
ten years and Treasury Bonds generally have maturities of greater than ten years
at the date of issuance.

Covered Option Writing. The Fund may write put and call options on
securities. The Fund realizes fees (referred to as "premiums") for granting the
rights evidenced by the options. A put option embodies the right of its
purchaser to compel the writer of the option to purchase from the option holder
an underlying security at a specified price at any time during the option
period. In contrast, a call option embodies the right of its purchaser to
compel the writer of the option to sell to the option holder an underlying
security at a specified price at any time during the option period. Thus, the
purchaser of a put option written by the Fund has the right to compel the Fund
to purchase from it the underlying security at the agreed-upon price for a
specified time period, while the purchaser of a call option written by the Fund
has the right to purchase from the Fund the underlying security owned by the
Fund at the agreed-upon price for a specified time period.

<PAGE>24

Upon the exercise of a put option written by the Fund, the Fund may
suffer a loss equal to the difference between the price at which the Fund is
required to purchase the underlying security plus the premium received for
writing the option and its market value at the time of the option exercise.
Upon the exercise of a call option written by the Fund, the Fund may suffer a
loss equal to the difference between the security's market value at the time of
the option exercise less the premium received for writing the option and the
Fund's acquisition cost of the security.

The Fund will write only covered options. Accordingly, whenever the
Fund writes a call option, it will continue to own or have the present right to
acquire the underlying security for as long as it remains obligated as the
writer of the option. To support its obligation to purchase the underlying
security if a put option is exercised, the Fund will either (1) deposit with
Boston Safe, the Fund's custodian, in a segregated account cash, U.S. government
securities or other high grade debt obligations having a value at least equal to
the exercise price of the underlying securities or (2) continue to own an
equivalent number of puts of the same "series" (that is, puts on the same
underlying security having the same exercise prices and expiration dates as
those written by the Fund) or an equivalent number of puts of the same "class"
(that is, puts on the same underlying security) with exercise prices greater
than those that it has written (or, if the exercise prices of the puts that it
holds are less than the exercise prices of those that it has written, it will
deposit the difference with Boston Safe in a segregated account).

The Fund may engage in a closing purchase transaction to realize a
profit, to prevent an underlying security from being called or put or, in the
case of a call option, to unfreeze an underlying security (thereby permitting
its sale or the writing of a new option on the security prior to the outstanding
option's expiration). To effect a closing purchase transaction, the Fund would
purchase prior to the holder's exercise of an option that the Fund has written,
an option of the same series as that on which the Fund desires to terminate its
obligation. The obligation of the Fund under an option that it has written
would be terminated by a closing purchase transaction, but the Fund would not be
deemed to own an option as the result of the transaction. There can be no
assurance that the Fund will be able to effect closing purchase transactions,
however, the Fund ordinarily will write options only if a secondary market for
the options exists on a domestic securities exchange or in the over-the-counter
market.

<PAGE>25

The staff of the SEC considers most over-the-counter options to be
illiquid. The ability to terminate options positions established in the over-
the-counter market may be more limited than in the case of exchange-traded
options and may also involve the risk that securities dealers participating in
such transactions would fail to meet their obligations to the Fund.

Repurchase Agreements. The Fund may engage in repurchase agreement
transactions with certain member banks of the Federal Reserve System and with
certain dealers on the Federal Reserve Bank of New York's list of reporting
dealers. Under the terms of a typical repurchase agreement, the Fund would
acquire an underlying debt obligation for a relatively short period (usually not
more than one week) subject to an obligation of the seller to repurchase, and
the Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Fund's holding period. The value of the underlying securities will
be at least equal at all times to the total amount of the repurchase obligation,
including interest. Repurchase agreements could involve certain risks in the
event of default or insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities,
the risk of a possible decline in the value of the underlying securities during
the period in which the Fund seeks to assert its rights to them, the risk of
incurring expenses associated with asserting those rights and the risk of losing
all or part of the income from the agreement. The Investment Manager, acting
under the supervision of the Fund's Board of Directors, reviews on an ongoing
basis the value of the collateral and the creditworthiness of those banks and
dealers with which the Fund may enter into repurchase agreements to evaluate
potential risks.

Reverse Repurchase Agreements. In order to generate additional
income, the Fund may engage in reverse repurchase agreement transactions with
banks, broker-dealers and other financial intermediaries. Reverse repurchase
agreements are the same as repurchase agreements except that, in this instance,
the Fund would assume the role of seller/borrower in the transaction. The Fund
will maintain segregated accounts with Boston Safe consisting of U.S. government
securities, cash or money market instruments that at all time are in an amount
equal to their obligations under reverse repurchase agreements. The Fund will
invest the proceeds in other money market instruments or repurchase agreements
maturing not later than the expiration of the reverse repurchase agreement.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by

<PAGE>26

the Fund may decline below the repurchase price of the securities.

Lending Securities. The Fund is authorized to lend securities it
holds to brokers, dealers and other financial organizations, but it will not
lend securities to any affiliate of the Investment Manager, including Smith
Barney Shearson, unless the Fund applies for and receives specific authority to
do so from the SEC.

Short Sales Against the Box. The Fund may make short sales of
securities in order to reduce market exposure and/or to increase its income if,
at all times when a short position is open, the Fund owns an equal or greater
amount of such securities or owns preferred stock, debt or warrants convertible
or exchangeable into an equal or greater number of the shares of the securities
sold short. Short sales of this kind are referred to as short sales "against
the box."

Non-Publicly Traded and Illiquid Securities. The Fund may invest up
to 20% of its assets in illiquid securities. The sale of securities that are
not publicly traded is typically restricted under the federal securities laws.
As a result, the Fund may be forced to sell these securities at less than fair
market value or may not be able to sell them when the Investment Manager
believes it desirable to do so. The Fund's investments in illiquid securities
are subject to the risk that should the Fund desire to sell any of these
securities when a buyer is not available at a price that the Fund deems
representative of its value, the value of the Fund's net assets could be
adversely affected.

Securities of Unseasoned Issuers. Securities in which the Fund may
invest may have limited marketability and, therefore, may be subject to wide
fluctuations in market value.

<PAGE>27

In addition, the issuers of certain securities may lack a significant operating
history and be dependent on products or services without an established market
share.

Taxation

The following discussion, together with information included in the
Fund's Statement of Additional Information, except as otherwise indicated, is
based on the advice of Willkie Farr & Gallagher, and reflects applicable tax
laws as of the date of this Prospectus.

TAXATION OF THE FUND

The Fund intends to qualify each year and elect to be treated as a
regulated investment company for federal income tax purposes. In order to so
qualify, the Fund must satisfy certain tests regarding the nature of its income
and assets. If the Fund qualifies as a regulated investment company and
distributes to its stockholders at least 90% of its net investment income, then
the Fund will not be subject to federal income tax on the income so distributed
However, the Fund would be subject to corporate income tax on any undistributed
income. In addition, the Fund will be subject to a nondeductible 4% excise tax
on the amount by which the income it distributes in any calendar year is less
than a required amount.

The Fund may acquire securities at a market discount. Market discount
is generally equal to (other than in the case of an obligation issued with
original issue discount) the excess of the redemption price of the obligation at
maturity over its purchase price. Accrued market discount is treated as
interest income, rather than a capital gain, when ultimately recognized by the
purchaser.

Foreign Taxes. Dividends and interest on foreign securities held by
the Fund may be subject to income, withholding or other taxes imposed by foreign
countries and U.S. possessions that would reduce the yield on the Fund's
securities. Tax conventions between certain countries and the United States may
reduce or eliminate these taxes, however, and foreign countries generally do not
impose taxes on capital gains in respect of investments by foreign investors.
The Fund does not expect to be eligible to pass through any such taxes to the
Fund's stockholders. As a result, any such taxes imposed on the Fund would not
be creditable by the Fund's stockholders.

TAXATION OF STOCKHOLDERS

<PAGE>28

Distributions. In general, all distributions to stockholders
attributable to the Fund's net investment income will be taxable as ordinary
income whether paid in cash or reinvested in additional shares of Common Stock
pursuant to the Dividend Reinvestment Plan.

Although the Fund does not expect to realize significant net capital
gains, to the extent the Fund does realize net capital gains, it intends to
distribute such gains at least annually and designate them as capital gain
dividends. Capital gain dividends are taxable as long-term capital gains,
whether paid in cash or reinvested in additional shares of Common Stock,
regardless of how long the shares have been held. The Fund may elect to retain
its net capital gain and pay corporate income tax thereon. In such event, the
Fund would most likely make an election which would require each stockholder of
record on the last day of the Fund's taxable year to include in income for tax
purposes his proportionate share of the Fund's undistributed net capital gain.
If such an election is made, each stockholder would be entitled to credit his
proportionate share of the tax paid by the Fund against his federal income tax
liabilities and to claim refunds to the extent that the credit exceeds such
liabilities. In addition, the stockholder would be entitled to increase the
basis of his shares for federal income tax purposes by an amount equal to 65% of
his proportionate share of the undistributed net capital gain.

Stockholders receiving distributions in the form of additional shares
purchased by the Plan Agent pursuant to the Dividend Reinvestment Plan will be
treated for federal income tax purposes as receiving the amount of cash received
by the Plan Agent on their behalf. In general, the basis of such shares will
equal the price paid by the Plan Agent for such shares, including brokerage
commissions.

Sales of Shares. In general, if a share of Common Stock is sold, the
seller will recognize gain or loss equal to the difference between the amount
realized on the sale and the seller's adjusted basis in the share. However, any
loss recognized by a stockholder within six months of purchasing the shares will
be treated as a long-term capital loss to the extent of any capital gain
dividends received by the stockholder and the stockholder's share of
undistributed net capital gain. In addition, any loss realized on a sale of
shares of Common Stock will be disallowed to the extent the shares disposed of
are replaced within a 61-day period beginning 30 days before and ending 30 days
after the disposition of the shares. In such a case, the basis of the shares
acquired will be adjusted to reflect the disallowed loss. Any gain or loss
realized upon a

<PAGE>29

sale of shares by a stockholder who is not a dealer in securities will be
treated as capital gain or loss.

Backup Withholding. The Fund may be required to withhold federal
income tax at the rate of 31% of any payments made to a stockholder if the
stockholder has not provided a correct taxpayer identification number and
certain required certifications to the Fund, or if the Secretary of the Treasury
notifies the Fund that the number provided by a stockholder is not correct or
that the stockholder has not reported all interest and dividend income required
to be shown on the stockholder's federal income tax return.

The foregoing discussion is a summary of certain of the current
federal income tax laws regarding the Fund and investors in the shares of Common
Stock and does not deal with all of the federal income tax consequences
applicable to the Fund, or to all categories of investors, some of which may be
subject to special rules. Prospective investors should consult their own tax
advisors regarding the federal, state, local, foreign and other tax consequences
to them of investments in the Fund.

Management of the Fund

BOARD OF DIRECTORS

The business and affairs of the Fund, including the general
supervision of the duties performed by the Investment Manager under the
Investment Management Agreement, are the responsibility of the Fund's Board of
Directors.

INVESTMENT MANAGER

Greenwich Street Advisors, a division of Mutual Management Corp.,
serves as the Fund's investment manager. The Investment Manager provides
investment advisory and management services to investment companies affiliated
with Smith Barney Shearson. Mutual Management Corp. was incorporated in 1978
and currently manages investment companies, with total assets of approximately
$___ billion at March 31, 1994. Mutual Management Corp. is controlled by Smith
Barney Shearson Holdings Inc., the parent company of Smith Barney Shearson.
Smith Barney Shearson Holdings Inc. is a direct wholly-owned subsidiary of The
Travelers. Greenwich Street Advisors is located at 388 Greenwich Street, New
York, New York 10013. Mutual Management Corp. is located at 1345 Avenue of the
Americas, New York, New York 10105.

Subject to the supervision and direction of the Fund's Board of
Directors, the Investment Manager allocates and

<PAGE>30

reallocates assets among the Segments, manages the securities held by the Fund
in accordance with the Fund's stated investment objectives and policies, makes
investment decisions for the Fund, places orders to purchase and sell securities
on behalf of the Fund and employs managers and securities analysts who provide
research services to the Fund. Mutual Management Corp. provides certain
administration services to the Fund, including overseeing the Fund's non-
investment operations and its relationship with other service providers and
providing executive and other officers to the Fund. The Fund pays the
Investment Manager a Management Fee for the services provided to the Fund that
is computed weekly and paid monthly at the annual rate of 1.10% of the value of
the Fund's average weekly net assets which is higher than the rates for similar
services paid by other recently organized publicly offered, closed-end,
management investment companies that have investment objectives and policies
similar to those of the Fund.

Mr. John C. Bianchi, Mr. Jack Levande and Mr. Jay Gerken, each a
Managing Director of the Investment Manager, are the persons primarily
responsible for the day to day management of the High Yield Segment, the
Convertible Segment and the Equity Income Segment, respectively. Mr. Gerken is
also responsible for determining the proportion of the Fund's assets to be
devoted to each Segment.

Mr. Bianchi has more than thirteen years of investment advisory
experience. He joined the predecessor of Greenwich Street Advisors in 1985.
Prior thereto, Mr. Bianchi was employed as a Senior Investment Analyst at
Metropolitan Life Insurance Company, where he worked in all sectors of the bond
market, specializing in high grade and high yield corporate bonds and notes.
Mr. Bianchi holds a B.A. from Seton Hall University and an M.B.A. in Finance
from Fairleigh Dickenson University. Mr. Bianchi acts as a portfolio manager
for Smith Barney Shearson High Income Fund, Smith Barney Shearson High Income
Opportunity Fund Inc. and Zenix Income Fund.

Mr. Levande has more than 7 years of investment advisory experience.
He joined the predecessor of Greenwich Street Advisors in 1987. Prior thereto,
Mr. Levande was employed as a product manager at E.F. Hutton & Co., where he
specialized in convertible securities. Mr. Levande holds a B.A. from Adelphi
University and an M.B.A. in finance and investment from New York University.
Mr. Levande acts as a portfolio manager for the Fund, Smith Barney Shearson
Utilities Fund and Smith Barney Shearson Convertible Fund.

<PAGE>31

Mr. Gerken has more than 15 years of investment advisory experience.
He joined the predecessor of Greenwich Street Advisors in 1988. Prior thereto,
Mr. Gerken was employed as a portfolio manager at Prudential Equity Associates,
Inc. Mr. Gerken holds a B.A. from Brown University and an M.B.A. from Harvard
University. Mr. Gerken also serves as portfolio manager for Smith Barney
Shearson Growth and Income Fund.

SUB-ADMINISTRATOR

Boston Advisors, located at One Boston Place, Boston, Massachusetts
02108, serves as the Fund's sub-administrator pursuant to an agreement with
Mutual Management Corp. Boston Advisors is a wholly owned subsidiary of TBC,
which is in turn a wholly owned subsidiary of Mellon. Boston Advisors provides
investment management, investment advisory and/or administrative services to
investment companies that had aggregate assets under management as of November
18, 1993, in excess of $90 billion.

Boston Advisors generally assists Mutual Management Corp. and it has
primary responsibility for statistical, accounting, bookkeeping and internal
auditing aspects of the Fund's administration and operation. For its services
to the Fund, the Investment Manager pays Boston Advisors a fee from its
Management Fee. Boston Advisors bears all expenses in connection with the
performance of its services.

EXPENSES

The organizational expenses will be payable from the proceeds of the
offering and charged to capital at the time of the issuance of the shares of
Common Stock.

CONTROL PERSONS

As of the date of this Prospectus, Smith Barney Shearson was the
record and beneficial owner of all of the outstanding shares of the Fund's
Common Stock and thus was deemed to "control" the Fund as that term is defined
in the 1940 Act. The shares held by Smith Barney Shearson are intended to
enable the Fund to meet the initial capitalization requirement imposed under the
1940 Act. Smith Barney Shearson has undertaken that the shares were purchased
for investment purposes only and that they will be sold only pursuant to a
registration statement under the 1933 Act, as amended (the "1933 Act") or an
applicable exemption from the registration requirements of the 1933 Act.

Dividends and Distributions

<PAGE>32

The Fund expects to pay monthly dividends of net investment income
(income other than net realized gains) to the holders of the Common Stock.
Under the Fund's current policy, which may be changed at any time by the Board
of Directors, the Fund's monthly dividends will be made at a level that reflects
the past and projected performance of the Fund, which policy over time will
result in the distribution of all net investment income of the Fund. Initial
dividends to holders of Common Stock are expected to be declared approximately
60 days, and paid approximately 90 days, from the completion of the Offering.
Net income of the Fund consists of all interest income accrued on the Fund's
assets less all expenses of the Fund. Expenses of the Fund are accrued each
day. Net realized capital gains, if any, will be distributed to the
stockholders at least once a year.

Dividend Reinvestment Plan

Under the Fund's Dividend Reinvestment Plan (the "Plan"), a
stockholder whose shares of Common Stock are registered in his own name will
have all distributions from the Fund reinvested automatically by TSSG as agent
under the Plan, unless the stockholder elects to receive cash. Distributions
with respect to shares registered in the name of a broker-dealer or other
nominee (that is, in "street name") will be reinvested by the broker or nominee
in additional shares under the plan, unless the service is not provided by the
broker or nominee or the stockholder elects to receive distributions in cash.
Investors who own Common Stock registered in street name should consult their
broker-dealers for details regarding reinvestment. All distributions to Fund
stockholders who do not participate in the Plan will be paid by check mailed
directly to the record holder by or under the direction of TSSG as dividend-
paying agent.

If the Fund declares a dividend or capital gains distribution payable
either in shares of Common Stock or in cash, stockholders who are not Plan
participants will receive cash, and Plan participants will receive the
equivalent amount in shares of Common Stock. When the market price of the
Common Stock is equal to or exceeds the net asset value per share of the Common
Stock on the Valuation Date (as defined below), Plan participants will be issued
shares of Common Stock valued at the net asset value most recently determined as
described in the Statement of Additional Information under "Net Asset Value" or,
if net asset value is less than 95% of the then current market price of the
Common Stock, then at 95% of the market value. The Valuation Date is the
dividend or capital gains distribution payment date or, if that date is not a
NYSE trading day, the immediately preceding trading day.

<PAGE>33

If the market price of the Common Stock is less than the net asset
value of the Common Stock, or if the Fund declares a dividend or capital gains
distribution payable only in cash, a broker-dealer not affiliated with Smith
Barney Shearson, as purchasing agent for Plan participants (the "Purchasing
Agent"), will buy Common Stock in the open market, on the NYSE or elsewhere, for
the participants' accounts. If, following the commencement of the purchases and
before the Purchasing Agent has completed its purchases, the market price
exceeds the net asset value of the Common Stock, the average per share purchase
price paid by the Purchasing Agent may exceed the net asset value of the Common
Stock, resulting in the acquisition of fewer shares than if the dividend or
capital gains distribution had been paid in Common Stock issued by the Fund at
net asset value. Additionally, if the market price equals or exceeds the net
asset value of shares before the Purchasing Agent has completed its purchases,
the Purchasing Agent is permitted to cease purchasing shares and the Fund may
issue the remaining shares at a price equal to the greater of (1) net asset
value or (2) a price no less than 95% of the then current market price. In a
case where the Purchasing Agent has terminated open market purchases and the
Fund has issued the remaining shares, the number of shares received by the
participant in respect of the cash dividend or distribution will be based on the
weighted average of prices paid for shares purchased in the open market and the
price at which the Fund issues the remaining shares. TSSG will apply all cash
received as a dividend or capital gains distribution to purchase Common Stock on
the open market as soon as practicable after the payment date of the dividend or
capital gains distribution, but in no event later than 30 days after that date,
except when necessary to comply with applicable provisions of the federal
securities laws.

TSSG will maintain all stockholder accounts in the Plan and will
furnish written confirmations of all transactions in each account, including
information needed by a stockholder for personal and tax records. The automatic
reinvestment of dividends and capital gains will not relieve Plan participants
of any income tax that may be payable on the dividends or capital gains
distributions. Common Stock in the account of each Plan participant will be
held by TSSG on behalf of the Plan participant, and each stockholder's proxy
will include those shares purchased pursuant to the Plan.

Plan participants are subject to no charge for reinvesting dividends
and capital gains distributions. TSSG fees for handling the reinvestment of
dividends and capital gains distributions will be paid by the Fund. No
brokerage charges apply with respect to shares of Common Stock issued directly
by

<PAGE>34

the Fund as a result of dividends or capital gains distributions payable either
in Common Stock or in cash. Each Plan participant will, however, bear a
proportionate share of brokerage commissions incurred with respect to open
market purchases made in connection with the reinvestment of dividends or
capital gains distributions.

Experience under the Plan may indicate that changes to it are
desirable. The Fund reserves the right to amend or terminate the Plan as
applied to any dividend or capital gains distribution paid subsequent to written
notice of the change sent to participants at least 30 days before the record
date for the dividend or capital gains distribution. The Plan also may be
amended or terminated by TSSG, with the Fund's prior written consent, on at
least 30 days' written notice to Plan participants. All correspondence
concerning the Plan should be directed to TSSG, Exchange Place, Boston,
Massachusetts 02109.

Description of Shares

The Fund was incorporated under the laws of the State of Maryland on
March 30, 1994 by the Articles of Incorporation (the "Articles of
Incorporation"). The Articles of Incorporation authorize issuance of the Common
Stock. The Articles of Incorporation provide that the Fund shall continue
without limitation of time.

COMMON STOCK

The Fund is authorized to issue up to 500,000,000 shares of Common
Stock, par value $.001 per share. All shares of Common Stock have equal
non-cumulative voting rights and equal rights with respect to dividends, assets
and liquidation. Shares of Common Stock will be fully paid and non-assessable
when issued and have no preemptive, conversion or exchange rights.

ANTI-TAKEOVER PROVISIONS IN THE ARTICLES OF INCORPORATION

<PAGE>35

classes. At the annual meeting of stockholders, in each year thereafter, the
term of one class will expire and each Director elected to the class will hold
office for a term of three years. The classification of the Board of Directors
in this manner could delay for an additional year the replacement of a majority
of the Board of Directors. A Director may be removed from office only by vote
of the holders of at least 75% of the shares of Common Stock entitled to be
voted on the matter. In addition, the Articles of Incorporation require the
affirmative vote of at least 75% of the Board of Directors and stockholders to
authorize certain Fund transactions not in the ordinary course of business
(including a merger) unless certain conditions are met which would have the
result of reducing the number of Directors and stockholders necessary to approve
such a transaction. See "Repurchase of Shares and Conversion to Open-End Fund"
in the Statement of Additional Information.

The Board of Directors has determined that the 75% voting requirements
described above, which are greater than the minimum requirements under Maryland
law or the 1940 Act, are in the best interests of stockholders generally.
Reference should be made to the Articles of Incorporation on file with the SEC
for the full text of these provisions.

CONVERSION TO OPEN-END FUND

The Fund's Articles of Incorporation require the favorable vote of the
holders of at least two-thirds of the shares of Common Stock then entitled to be
voted on the matter to authorize the conversion of the Fund from a closed-end to
an open-end investment company as defined in the 1940 Act, unless two-thirds of
certain members of the Board of Directors approve such a conversion. In the
latter case, the affirmative vote of a majority of the shares outstanding and
entitled to vote on the matter will be required to approve an amendment to the
Fund's Articles of Incorporation providing for the conversion of the Fund to an
open-end investment company. A detailed description of the Fund's ability to
convert to open-end status is discussed in the Statement of Additional
Information.

Purchase of Shares

GENERAL

The Fund's Common Stock will be made available during the Offering
through Smith Barney Shearson and certain of its affiliates, including The
Robinson-Humphrey Company, Inc. as underwriters. The public offering price for
the Common Stock during the Offering is $12.50 per share, and the minimum
purchase

<PAGE>36

during the Offering is 400 shares of Common Stock ($5,000). The minimum
purchase during the Offering for Investment Retirement Accounts and
Self-Employed Retirement Plans is 50 shares of Common Stock ($625). The Common
Stock will be sold during the Offering subject to no sales loads or underwriting
discounts, but Smith Barney Shearson Financial Consultants will receive
compensation from Smith Barney Shearson in connection with sales of Common Stock
during the Offering.

No market has existed for the Common Stock prior to the Offering.
Application has been made to list the Common Stock on the NYSE for trading under
the symbol " ". Trading in the Common Stock on the NYSE will not begin,
however, until a date within 30 days after the date of this Prospectus. Smith
Barney Shearson does not intend to make a market in the Common Stock during the
period in which the Common Stock is not traded on the NYSE. As a result, during
this period, an investment in the Common Stock should be considered illiquid.

In order to meet the requirements for listing of shares of Common
Stock on the NYSE, Smith Barney Shearson will undertake to sell lots of 100 or
more shares to a minimum of 2,000 beneficial owners in the United States.
During the period in which Smith Barney Shearson will be soliciting indications
of interest with respect to the Common Stock, the Fund and Smith Barney Shearson
will evaluate the market for the Common Stock as well as the market for the
Fund's contemplated investments. If changes in existing market and other
conditions make it impractical or inadvisable to proceed with the Offering, the
Offering will not be made.

Smith Barney Shearson intends to make a market in the Common Stock
after trading in the Common Stock has commenced on the NYSE. Smith Barney
Shearson, however, is not obligated to conduct market-making activities and any
such activities may be discontinued at any time without notice, at the sole
discretion of Smith Barney Shearson. No assurance can be given as to the
liquidity of, or the trading market for, the Common Stock as a result of any
market-making activities undertaken by Smith Barney Shearson. This Prospectus
is to be used by Smith Barney Shearson in connection with the Offering and with
offers and sales of the Common Stock in market-making transactions in the over-
the-counter market at negotiated prices related to prevailing market prices at
the time of the sale.

Smith Barney Shearson may take certain actions to discourage
short-term trading of Common Stock during a period of time following the
effectiveness of the listing of the Common Stock for trading on the NYSE.
During any such period, for

<PAGE>37

example, physical delivery of certificates representing Common Stock may be
required to transfer ownership of Common Stock.

UNDERWRITING

Under an underwriting agreement dated as of __________, 1994 (the
"Underwriting Agreement") between the Fund and Smith Barney Shearson, Smith
Barney Shearson and certain of its affiliates, including The Robinson-Humphrey
Company, Inc., will serve as the underwriters of the Common Stock. Compensation
received by Smith Barney Shearson Financial Consultants in connection with the
sale of Common Stock during the Offering will be from Smith Barney Shearson's
own assets and not from the Fund's assets. The Fund will not compensate any
other broker in connection with the Offering.

Smith Barney Shearson has agreed, subject to the terms and conditions
of the Underwriting Agreement, to purchase from the Fund, and the Fund has
agreed to sell to Smith Barney Shearson shares of Common Stock (the
"Firm Shares"). The Fund also has granted Smith Barney Shearson an option,
exercisable for 60 days after the date of this Prospectus, to purchase up to
___ additional shares of Common Stock to cover over-allotments, if any, at a
price equal to the public offering price for the Common Stock during the
Offering. The Underwriting Agreement provides that, if any of the Firm Shares
are purchased by Smith Barney Shearson, all must be so purchased, and that the
obligations of Smith Barney Shearson under the Underwriting Agreement are
subject to various conditions. Under the terms of the Underwriting Agreement,
the Fund and the Investment Manager have agreed to indemnify Smith Barney
Shearson against certain liabilities, including certain liabilities under the
1933 Act. The Fund has agreed to pay the Underwriter up to $____________ as
partial reimbursement of expenses incurred in connection with the Offering.

Custodian and Transfer Agent

Boston Safe, One Boston Place, Boston, Massachusetts 02109 acts as
custodian of the Fund's investments. TSSG, located at Exchange Place, Boston,
Massachusetts 02109 serves as agent in connection with the Plan and serves as
the Fund's transfer agent, dividend-paying agent and registrar.

Legal Opinions

Certain legal matters in connection with the Common Stock offered
hereby will be passed upon for the Fund and for the Underwriters by Willkie Farr
& Gallagher, New York, New York.

<PAGE>38

Venable, Baetjer and Howard, Baltimore, Maryland, special local counsel to the
Fund, will pass on the legality of the shares of Common Stock.

Experts

The audited statement of assets and liabilities incorporated into this
Prospectus from the Statement of Additional Information has been so included in
reliance on the report of Coopers & Lybrand, One Post Office Square, Boston,
Massachusetts 02109, independent auditors, given on the authority of said firm
as experts in auditing and accounting.

Further Information

The Prospectus and the Statement of Additional Information do not
contain all of the information set forth in the Registration Statement that the
Fund has filed with the SEC. The complete Registration Statement may be
obtained from the SEC upon payment of the fee prescribed by its Rules and
Regulations.

The table of contents of the Statement of Additional Information is as
follows:
Page

Investment Objectives and Policies..................... B-
Investment Restrictions................................ B-
Net Asset Value........................................ B-
Taxation............................................... B-
Portfolio Transactions................................. B-
Conversion to Open-End Fund............................ B-
Independent Auditors' Report........................... B-
Statement of Assets and Liabilities.................... B-

No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, the
information or representations must not be relied upon as having been authorized
by the Fund, the Fund's investment manager or Smith Barney Shearson. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of an
offer to buy the shares of Common Stock by anyone in any jurisdiction in which
the offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder will, under any circumstances, create any
implication that there has been no change in the affairs of the Fund since the
date of this

<PAGE>39

Prospectus. If any material change occurs while this Prospectus is required by
law to be delivered, however, this Prospectus will be supplemented or amended
accordingly.

<PAGE>40

APPENDIX A

DESCRIPTION OF RATINGS

DESCRIPTION OF MOODY'S CORPORATE BOND RATINGS:

Aaa - Bonds that are rated Aaa are judged to be of the best quality,
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments with respect to these bonds are protected by a
large or by an exceptionally stable margin, and principal is secure. Although
the various protective elements applicable to these bonds are likely to change,
those changes are mostly unlikely to impair the fundamentally strong position of
these bonds.

Aa - Bonds that are rated Aa are judged to be of high quality by all
standards and together with the Aaa group comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or other elements may be
present that make the long-term risks appear somewhat larger than in Aaa
securities.

A - Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest with respect to these bonds are
considered adequate, but elements may be present that suggest a susceptibility
to impairment sometime in the future.

Baa - Bonds rated Baa are considered to be medium grade obligations,
that is, they are neither highly protected nor poorly secured. Interest payment
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. These bonds lack outstanding investment characteristics and may
have speculative characteristics as well.

Ba - Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds that are rated B generally lack characteristics of desirable
investments. Assurance of interest

<PAGE>41

and principal payments or of maintenance of other terms of the contract over any
long period of time may be small.

Caa - Bonds that are rated Caa are of poor standing. These issues may
be in default or present elements of danger may exist with respect to principal
or interest.

Ca - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked short-comings.

C - Bonds that are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2 and 3 in each generic
rating classification from Aa through B. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic rating category.

DESCRIPTION OF S&P CORPORATE BOND RATINGS:

AAA - Bonds rated AAA have the highest rating assigned by S&P to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.

A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.

BB, B and CCC - Bonds rated BB and B are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB represents a lower
degree of speculation than

<PAGE>42

B and CCC the highest degree of speculation. While such bonds will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

C - The rating C is reserved for income bonds on which no interest is
being paid.

D - Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.

S&P's letter ratings may be modified by the addition of a plus or a
minus sign, which is used to show relative standing within the major rating
categories, except in the AAA-Prime Grade category.

<PAGE>43

SMITH BARNEY SHEARSON INC.

Greenwich Street Income
Fund Inc.

Common Stock

1345 Avenue of the Americas
New York, New York 10105

_________, 1994

<PAGE>44

GREENWICH STREET INCOME FUND INC.

STATEMENT OF ADDITIONAL INFORMATION

Greenwich Street Income Fund Inc. (the "Fund") is a newly organized,
diversified, closed-end management investment company whose primary investment
objective is income and whose secondary objective is capital appreciation. This
Statement of Additional Information is not a prospectus, but should be read in
conjunction with the Prospectus for the Fund dated ____________, 1994 (the
"Prospectus"). This Statement of Additional Information does not include all
information that a prospective investor should consider before purchasing the
Fund's shares of common stock, and investors should obtain and read the
Prospectus prior to purchasing shares. A copy of the Prospectus may be obtained
without charge, by calling (212) 720-9150. This Statement of Additional
Information incorporates by reference the entire Prospectus and capitalized
terms used but not defined in this Statement of Additional Information have the
meaning accorded to them in the Prospectus.

TABLE OF CONTENTS
Page

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . B-3
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . B-12
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
CONVERSION TO OPEN-END FUND . . . . . . . . . . . . . . . . . . . . . . . . B-24
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . B-28
STATEMENT OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . . . . . . B-29

The Prospectus and this Statement of Additional Information omit
certain of the information contained in the registration statement filed with
the Securities and Exchange Commission, Washington, D.C. (the "SEC"). These
items may be obtained from the SEC upon payment of the fee prescribed, or
inspected at the SEC's office at no charge.

This Statement of Additional Information is dated ____________, 1994

<PAGE>45

INVESTMENT OBJECTIVES AND POLICIES

The Fund's primary investment objective is income and its secondary
objective is capital appreciation. The Fund's investment objective and its
fundamental investment policies (see "Investment Restrictions") can be changed
only with the approval of a majority of the Fund's outstanding voting securities
(defined in the 1940 Act as the lesser of (1) 67% or more of the shares present
at a meeting of the Fund, if the holders of more than 50% of the outstanding
shares of the Fund are present or represented by proxy or (2) more than 50% of
the outstanding shares of the Fund). See "Investment Objective and Policies" in
the Prospectus. Special considerations associated with the Fund's investments
are described below:

Corporate Securities. The Fund may invest in corporate fixed-income
securities of both domestic and foreign issuers, such as bonds, debentures,
notes, equipment lease certificates, equipment trust certificates and preferred
stock. Certain of the corporate fixed-income securities in which the Fund may
invest may involve equity characteristics. The Fund may, for example, invest in
warrants for the acquisition of stock of the same or of a different issuer or in
corporate fixed-income securities that have conversion or exchange rights
permitting the holder to convert or exchange the securities at a stated price
within a specified period of time into a specified number of shares of common
stock. In addition, the Fund may invest in participations that are based on
revenues, sales or profits of an issuer or in common stock offered as a unit
with corporate fixed-income securities.

Money Market Instruments. Pending investment of the proceeds of the
Offering and when Greenwich Street Advisors, the Fund's investment manager (the
"Investment Manager"), a division of Mutual Management Corp., believes that
circumstances warrant a temporary defensive posture, the Fund may invest without
limitation in short-term money market instruments. The Fund may also invest in
money market instruments to help defray operating expenses, to serve as
collateral in connection with certain investment techniques (see "Investment
Practices" below) and to hold as a reserve pending the payment of dividends to
investors. To the extent the Fund invests in short-term money market
instruments, it may not be pursuing its investment objectives.

Money market instruments that the Fund may acquire will be securities
rated in the two highest short-term rating categories by Moody's Investors
Service ("Moody's") or Standard & Poor's Ratings Group ("S&P") or the equivalent
from another major rating service or comparable unrated securities. Money
market

<PAGE>46

instruments in which the Fund typically expects to invest include: U.S.
government securities; bank obligations (including certificates of deposit, time
deposits and bankers' acceptances of U.S. or foreign banks); commercial paper;
and repurchase agreements.

Zero Coupon, Pay-In-Kind and Delayed Interest Securities. The Fund
may invest in zero coupon, pay-in-kind and delayed interest securities as well
as custodial receipts or certificates underwritten by securities dealers or
banks that evidence ownership of future interest payments, principal payments or
both on certain U.S. government securities. Zero coupon securities pay no cash
income to their holders until they mature and are issued at substantial
discounts from their value at maturity. When held to maturity, their entire
return comes from the difference between their purchase price and their maturity
value. Pay-in-kind securities pay interest through the issuance to the holders
of additional securities, and delayed interest securities are securities which
do not pay interest for a specified period. Because interest on zero coupon,
pay-in-kind and delayed interest securities is not paid on a current basis, the
values of securities of this type are subject to greater fluctuations than are
the values of securities that distribute income regularly and may be more
speculative than such securities. Accordingly, the values of these securities
may be highly volatile as interest rates rise or fall. In addition, the Fund's
investments in zero coupon, pay-in-kind and delayed interest securities will
result in special tax consequences. Although zero coupon securities do not make
interest payments, for tax purposes a portion of the difference between a zero
coupon security's maturity value and its purchase price is taxable income of the
Fund each year.

Custodial receipts evidencing specific coupon or principal payments
have the same general attributes as zero coupon U.S. government securities but
are not considered to be U.S. government securities. Although under the terms
of a custodial receipt the Fund is typically authorized to assert its rights
directly against the issuer of the underlying obligation, the Fund may be
required to assert through the custodian bank such rights as may exist against
the underlying issuer. Thus, in the event the underlying issuer fails to pay
principal and/or interest when due, the Fund may be subject to delays, expenses
and risks that are greater than those that would have been involved if the Fund
had purchased a direct obligation of the issuer. In addition, in the event that
the trust or custodial account in which the underlying security has been
deposited is determined to be an association taxable as a corporation, instead

<PAGE>47

of a non-taxable entity, the yield on the underlying security would be reduced
in respect of any taxes paid.

Investment Practices

The Fund may employ, among others, the investment techniques described
below:

Futures Contracts and Options on Futures Contracts. The Fund may
enter into interest rate and currency futures contracts and may purchase and
sell put and call options on such futures contracts. The Fund will enter into
such transactions for hedging purposes or for other appropriate risk-management
purposes permitted under the rules and regulations of the Commodity Futures
Trading Commission (the "CFTC") and the SEC. An interest rate futures contract
is a standardized contract for the future delivery of a specified security (such
as a U.S. Treasury Bond or U.S. Treasury Note) or its equivalent at a future
date at a price set at the time of the contract. A currency futures contract is
a standardized contract for the future delivery of a specified amount of
currency at a future date at a price set at the time of the contract. The Fund
may only enter into futures contracts traded on regulated commodity exchanges.

The Fund may either accept or make delivery of cash or the underlying
instrument specified at the expiration of a futures contract or, prior to
expiration, enter into a closing transaction involving the purchase or sale of
an offsetting contract. Closing transactions with respect to futures contracts
are effected on the exchange on which the contract was entered into (or a linked
exchange).

The Fund may purchase and write put and call options on futures
contracts in order to hedge all or a portion of its investments and may enter
into closing purchase transactions with respect to options written by the Fund
in order to terminate existing positions. There is no guarantee that such
closing transactions can be effected at any particular time or at all. In
addition, daily limits on price fluctuations on exchanges on which the Fund
conducts its futures and options transactions may prevent the prompt liquidation
of positions at the optimal time, thus subjecting the Fund to the potential of
greater losses.

An option on a futures contract, as contrasted with the direct
investment in such a contract, gives the purchaser of the option the right, in
return for the premium paid, to assume a position in a futures contract at a
specified exercise price at any time on or before the expiration date of the
option. Upon

<PAGE>48

exercise of an option, the delivery of the futures position by the writer of the
option to the holder of the option will be accomplished by delivery of the
accumulated balance in the writer's futures margin account, which represents the
amount by which the market price of the futures contract exceeds, in the case of
a call, or is less than, in the case of a put, the exercise price of the option
on the futures contract. The potential loss related to the purchase of an
option on a futures contract is limited to the premium paid for the option (plus
transaction costs). With respect to options purchased by the Fund, there are no
daily cash payments made by the Fund to reflect changes in the value of the
underlying contract; however, the value of the option does change daily and that
change would be reflected in the net asset value of the Fund.

While the Fund may enter into futures contracts and options on futures
contracts for bona fide hedging and other appropriate risk management purposes,
the use of futures contracts and options on futures contracts might result in a
poorer overall performance for the Fund than if it had not engaged in any such
transactions. If, for example, the Fund had insufficient cash, it may have to
sell a portion of its underlying portfolio of securities in order to meet daily
variation margin requirements on its futures contracts or options on futures
contracts at a time when it may be disadvantageous to do so. There may be an
imperfect correlation between the Fund's portfolio holdings and futures
contracts or options on futures contracts entered into by the Fund, which may
prevent the Fund from achieving the intended hedge or expose the Fund to risk of
loss. Further, the Fund's use of futures contracts and options on futures
contracts to reduce risk involves cost and will be subject to the Investment
Manager's ability to predict correctly changes in interest rate relationships or
other factors. No assurance can be given that the Investment Manager's
judgement in this respect will be correct.

Foreign Securities. There are certain risks involved in investing in
securities of companies and governments of foreign nations which are in addition
to the usual risk inherent in domestic investments. These risks include those
resulting from devaluation of currencies, future adverse political and economic
developments and the possible imposition of currency exchange blockages or other
foreign governmental laws or restrictions, the relative lack of public
information concerning issuers and the lack of uniform accounting, auditing and
financial reporting standards or of other regulatory practices and requirements
comparable to those applicable to domestic companies. Moreover, securities of
many foreign issuers and their markets may be less liquid and their prices more
volatile

<PAGE>49

than those of securities of comparable domestic issuers. In addition, with
respect to certain foreign countries, there is the possibility of expropriation,
nationalization, confiscatory taxation and limitations on the use or removal of
funds or other assets of the Fund, including the withholding of dividends.
Foreign securities may be subject to foreign government taxes that could reduce
the yield on such securities. Because the Fund will invest in securities
denominated or quoted in currencies other than the U.S. dollar, changes in
foreign currency exchange rates may adversely affect the value of portfolio
securities and the appreciation or depreciation of investments. Investments in
foreign securities also may result in higher expenses due to the cost of
converting foreign currency to U.S. dollars, the payment of fixed brokerage
commission on foreign exchanges, the expense of maintaining securities with
foreign custodians and the imposition of transfer taxes or transaction charges
associated with foreign exchanges.

Currency Exchange Transactions. In order to protect against
uncertainty in the level of future exchange rates, the Fund may engage in
currency exchange transactions and purchase exchange-traded put and call options
on foreign currencies. The Fund will conduct its currency exchange transactions
either on a spot (i.e., cash) basis at the rate prevailing in the currency
exchange market or through entering into forward contracts to purchase or sell
currencies.

A forward currency contract involves an obligation to purchase or sell
a specific currency for an agreed-upon price at an agreed-upon date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties. These contracts are entered into in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. Although these contracts are intended to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time they tend
to limit any potential gain that might result should the value of the currency
increase.

The Fund's dealings in forward currency exchange transactions will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is the purchase or sale of forward currency
contracts with respect to specific receivables or payable to the Fund generally
arising in connection with the purchase or sale of its securities. Position
hedging, generally, is the sale of forward currency contracts with respect to
portfolio security positions denominated or quoted in the currency. The Fund
will not position hedge with respect to a particular currency to an extent
greater than the

<PAGE>50

aggregate market value at any time of the security or securities held in its
portfolio denominated or quoted in or currently convertible (such as through
exercise of an option or consummation of a forward currency contract) in that
particular currency. If the Fund enters into a transaction hedging or position
hedging transaction, it will cover the transaction through one or more of the
following methods: (a) ownership of the underlying currency or an option to
purchase such currency; (b) ownership of an option to enter into an offsetting
forward currency contract; (c) entering into a forward contract to purchase
currency being sold or to sell currency being purchased, provided that such
covering contract is itself covered by any one of these methods unless the
covering contract closes out the first contract; or (d) depositing into a
segregated account with the custodian or a sub-custodian of the Fund cash or
readily marketable securities in an amount equal to the value of the Fund's
total assets committed to the consummation of the forward currency contract and
not otherwise covered. In the case of transaction hedging, any securities
placed in the account must be liquid debt securities. In any case, if the value
of the securities placed in the segregated account declines, additional cash or
securities will be placed in the account so that the value of the account will
equal the above amount. Hedging transactions may be made from any foreign
currency into dollars or into other appropriate currencies.

At or before the maturity of a forward contract, the Fund either may
sell a portfolio security and make delivery of the currency, or retain the
security and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is obligated to deliver
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund, at the time of execution of the offsetting transaction,
will incur a gain or loss to the extent that movement has occurred in forward
contract prices. Should forward prices decline during the period between the
Fund's entering into a forward contract for the sale of a currency and the date
that it enters into an offsetting contract for the purchase of the currency, the
Fund will realize a gain to the extent that the price of the currency that it
has agreed to sell exceeds the price of the currency that it has agreed to
purchase. Should forward prices increase, the Fund will suffer a loss to the
extent that the price of the currency that it has agreed to purchase exceeds the
price of the currency that it has agreed to sell.

The cost to the Fund of engaging in currency transactions varies with
the factors such as the currency

<PAGE>51

involved, the length of the contract period and the market conditions then
prevailing. Because transactions in currency exchange are usually conducted on
a principal basis, no fees or commissions are involved. The use of forward
currency contracts does not eliminate fluctuations in the underlying prices of
the securities, but it does establish a rate of exchange that can be achieved in
the future. In addition, although forward currency contracts limit the risk of
loss due to a decline in the value of the hedged currency, at the same time,
they limit any potential gain that might result should the value of the currency
increase.

Although the foreign currency market may not necessarily be more
volatile than the market in other commodities, the foreign currency market
offers less protection against defaults in the forward trading of currencies
than is available when trading in currencies occurs on an exchange. Because a
forward currency contract is not guaranteed by an exchange or clearing-house,
default on the contract would deprive the Fund of unrealized profits or force
the Fund to cover its commitments for the purchase or resale, if any, at the
current market price. In addition, if a devaluation is generally anticipated,
the Fund may not be able to contract to sell the currency at a price above the
anticipated devaluation level.

Options on Foreign Currencies. The Fund may purchase put options on a
foreign currency in which securities held by the Fund are denominated to protect
against a decline in the value of the currency in relation to the currency in
which the exercise price is denominated. The Fund may purchase a call option on
a foreign currency to hedge against an adverse exchange rate of the currency in
which a security that it anticipates purchasing is denominated in relation to
the currency in which the exercise price is denominated. Put options convey the
right to sell the underlying currency at a price which is anticipated to be
higher than the spot price of the currency at the time the option expires. Call
options convey the right to buy the underlying currency at a price which is
expected to be lower than the spot price of the currency at the time that the
option expires.

The Fund may use foreign currency options under the same circumstances
that it could use forward currency exchange transactions. A decline in the
dollar value of a foreign currency in which the Fund's securities are
denominated, for example, will reduce the dollar value of the securities, even
if their value in the foreign currency remains constant. In order to protect
against such diminution in the value of securities that it holds, the Fund may
purchase put options on the foreign currency. If the value of the currency does
decline, the Fund will have the right to sell the currency for a fixed amount in

<PAGE>52

dollars and will thereby offset, in whole or in part, the adverse effect on its
securities that otherwise would have resulted. Conversely, if a rise in the
dollar value of a currency in which securities to be acquired are denominated is
projected, thereby potentially increasing the cost of the securities, the Fund
may purchase call options on the particular currency. The purchase of these
options could offset, at least partially, the effects of the adverse movements
in exchange rates. The benefit to the Fund derived from purchase of foreign
currency options, like the benefit derived from other types of options, will be
reduced by the amount of the premium and related transaction costs. In
addition, if currency rates do not move in the direction or to the extent
anticipated, the Fund could sustain losses on transactions in foreign currency
options that would require it to forego a portion of all or the benefits of
advantageous changes in the rates. Options on foreign currencies purchased by
the Fund may be traded on domestic and foreign exchanges or traded over-the-
counter.

When-Issued and Delayed Delivery Securities. The Fund may purchase
securities on a when-issued basis, or may purchase or sell securities for
delayed delivery. In when-issued or delayed delivery transactions, delivery of
the securities occurs beyond normal settlement periods, but no payment or
delivery will be made by the Fund prior to the actual delivery or payment by the
other party to the transaction. The Fund will not accrue income with respect to
a when-issued or delayed delivery security prior to its stated delivery date.
The Fund will establish with the Custodian a segregated account consisting of
cash, U.S. government securities or other liquid high grade debt obligations, in
an amount equal to the amount of the Fund's when-issued and delayed delivery
purchase commitments. Placing securities rather than cash in the segregated
account may have a leveraging effect on the Fund's net asset value per share;
that is, to the extent that the Fund remains substantially fully invested in
securities at the same time that it has committed to purchase securities on a
when-issued or delayed delivery basis, greater fluctuations in its net asset
value per share may occur than if it had set aside cash to satisfy its purchase
commitments. Securities purchased on a when-issued or delayed delivery basis
may expose the Fund to risk because the securities may experience fluctuations
in value prior to their delivery. Purchasing securities on a when-issued or
delayed delivery basis can involve the additional risk that the yield available
in the market when the delivery takes place may be higher than that obtained in
the transaction itself.

Lending Securities. The Fund is authorized to lend securities it
holds to brokers, dealers and other financial

<PAGE>53

organizations, but it will not lend securities to any affiliate of the
Investment Manager, including Smith Barney Shearson Inc. ("Smith Barney
Shearson"), unless the Fund applies for and receives specific authority to do so
from the SEC. Loans of the Fund's securities, if and when made, may not exceed
20% of the Fund's assets taken at value. The Fund's loans of securities will be
collateralized by cash, letters of credit or U.S. government securities that
will be maintained at all times in a segregated account with Boston Safe Deposit
and Trust Company ("Boston Safe"), the Fund's custodian, in an amount equal to
the current market value of the loaned securities. From time to time, the Fund
may pay a part of the interest earned from the investment of collateral received
for securities loaned to the borrower and/or a third party that is unaffiliated
with the Fund and that is acting as a "finder."

By lending its securities, the Fund can increase its income by
continuing to receive interest on the loaned securities, by investing the cash
collateral in short-term instruments or by obtaining yield in the form of
interest paid by the borrower when U.S. government securities are used as
collateral. The portfolio will adhere to the following conditions whenever it
lends its securities: (1) the Fund must receive at least 100% cash collateral
or equivalent securities from the borrower, which amount of collateral will be
maintained by daily marking to market; (2) the borrower must increase the
collateral whenever the market value of the securities loaned rises above the
level of the collateral; (3) the Fund must be able to terminate the loan at any
time; (4) the Fund must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions on the loaned securities, and any
increase in market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) voting rights on the loaned securities may
pass to the borrower, except that, if a material event adversely affecting the
investment in the loaned securities occurs, the Fund's Board of Directors must
terminate the loan and regain the Fund's right to vote the securities.

<PAGE>54

with the broker-dealer to obtain a portion of the interest earned by the broker
on the investment of short sale proceeds. The Fund will segregate the
securities against which short sales against the box have been made in a special
account with its custodian. Not more than 10% of the Fund's net assets (taken
at current value) may be held as collateral for such sales at any one time.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 12 below have been
adopted by the Fund as fundamental policies. Under the 1940 Act, a fundamental
policy may not be changed without the vote of a majority of the outstanding
voting securities of the Fund, as defined above.

The investment policies adopted by the Fund prohibit the Fund from:

1. Purchasing the securities of any issuer (other than U.S.
government securities) if as a result more than 5% of the value of the Fund's
total assets would be invested in the securities of the issuer, except that up
to 25% of the value of the Fund's total assets may be invested without regard to
this 5% limitation.

2. Purchasing more than 10% of the voting securities of any one
issuer (other than U.S. government securities), except that up to 25% of the
value of the Fund's total assets may be invested without regard to this 10%
limitation.

3. Purchasing securities on margin, except that the Fund may obtain
any short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of initial
or variation margin in connection with futures contracts or related options will
not be deemed to be a purchase of securities on margin.

4. Making short sales of securities, except that the Fund may engage
in short sales "against the box."

5. Borrowing money, except that (a) the Fund may borrow from banks
for temporary or emergency (not leveraging) purposes in an amount not exceeding
10% of the value of the Fund's total assets (including the amount borrowed)
valued at market less liabilities (not including the amount borrowed) at the
time the borrowing is made and (b) the Fund may enter into reverse repurchase
agreements and forward roll transactions. Whenever borrowings described in (a)
exceed 5% of the value of

<PAGE>55

the Fund's total assets, the Fund will not make any additional investments.

6. Pledging, hypothecating, mortgaging or otherwise encumbering the
Fund's assets except to secure permitted borrowings and as margin for futures
transactions.

7. Underwriting the securities of other issuers, except insofar as
the Fund may be deemed an underwriter in the course of disposing of portfolio
securities.

8. Purchasing real estate or interests in real estate, except that
the Fund may (a) purchase and sell securities that are secured by real estate or
interests in real estate, (b) purchase securities issued by companies that
invest or deal in real estate and (c) hold or sell real estate received in
connection with securities it holds.

9. Investing in commodities, except that the Fund may invest in
futures contracts, forward transactions, options and related contracts.

10. Making loans to others, except through the purchase of qualified
debt obligations, the entry into repurchase agreements and loans of portfolio
securities consistent with the Fund's investment objectives and policies.

11. Purchasing any securities which would cause more than 25% of the
value of the Fund's total assets at the time of purchase to be invested in the
securities of issuers conducting their principal business activities in the same
industry; provided that there shall be no limit on the purchase of U.S.
government securities.

NET ASSET VALUE

The net asset value of the common stock ("Common Stock") will be
calculated as of the close of regular trading on the New York Stock Exchange
("NYSE"), currently 4:00 p.m., New York time, on each day on which the NYSE is
open for trading. The Fund reserves the right to cause its net asset value to
be calculated on a less frequent basis as determined by the Fund's Board of
Directors. For purposes of determining net asset value, futures contracts and
options on futures contracts will be valued 15 minutes after the close of
regular trading on the NYSE.

Net asset value per share of Common Stock is calculated by dividing
the value of the Fund's total assets less liabilities

<PAGE>56

by the number of shares. In general, the Fund's investments will be valued at
market value, or in the absence of market value, at fair value as determined by
or under the direction of the Fund's Board of Directors. Fund securities which
are traded primarily on foreign exchanges are generally valued at the preceding
closing values of such securities on their respective exchanges, except that
when an occurrence subsequent to the time a value was so established is likely
to have changed such value, then the fair market value of those securities will
be determined by consideration of other factors by or under the direction of the
Board of Directors or delegates. A security that is traded primarily on an
exchange is valued at the last sale price on that exchange or, if there were no
sales during the day, at the current quoted bid price. Over-the-counter
securities are valued on the basis of the bid price at the close of business on
each day. Investments in U.S. government securities (other than short-term
securities) are valued at the average of the quoted bid and asked prices in the
over-the-counter market. Short-term investments that mature in 60 days or less
are valued on the basis of amortized cost (which involves valuing an investment
at its cost and, thereafter, assuming a constant amortization to maturity of any
discount or premium, regardless of the effect of fluctuating interest rates on
the market value of the investment) when the Board of Directors has determined
that amortized cost represents fair value.

The valuation of the Fund's assets is made by the Investment Manager
after consultation with an independent pricing service (the "Service") approved
by the Fund's Board of Directors. When, in the judgement of the Service, quoted
bid prices for investments are readily available and are representative of the
bid side of the market, these investments are priced by the Service at the mean
between the quoted bid prices and asked prices. Investments for which, in the
judgement of the Service, no readily obtainable market quotation is available,
are priced by the Service at its determination at fair value, based on methods
that include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indication as to values from dealers; and
general market conditions. The Service may use electronic data processing
techniques and/or matrix systems to determine valuations. The Investment
Manager reviews the Service's price information and, unless the Investment
Manager has information which leads it to use a different valuation, it will
generally use the Service's prices in establishing net asset value. The
procedures of the Service are reviewed periodically by the officers of the Fund
under the general supervision and responsibility of the Board of Directors,
which may replace the Service at any time it determines it to be in the best
interests of the Fund to do so.

<PAGE>57

TAXATION

The following discussion, except as otherwise indicated, is based on
the advice of Willkie Farr & Gallagher, and reflects applicable tax laws as of
the date of this Statement of Additional Information.

Taxation of the Fund

The Fund intends to qualify each year and elect to be treated as a
regulated investment company for federal income tax purposes. In order to so
qualify, the Fund must, among other things: (1) derive at least 90% of its
gross income from dividends, interest, payments with respect to loans of
securities and gains from the sale or other disposition of securities or certain
other related income; (2) generally derive less than 30% of its gross income
from gains from the sale or other disposition of securities and certain other
investments held for less than three months (the "short-short rule"); and (3)
diversify its holdings so that at the end of each fiscal quarter (a) at least
50% of the value of the Fund's assets is represented by cash or cash items, U.S.
government securities, securities of other regulated investment companies, and
other securities which, with respect to any one issuer, do not represent more
than 5% of the value of the Fund's assets nor more than 10% of the voting
securities of such issuer, and (b) not more than 25% of the value of the Fund's
assets is invested in the securities of any one issuer (other than U.S.
government securities or the securities of other regulated investment
companies), or two or more issuers which the taxpayer controls and which are
determined to be engaged in the same or similar trades or businesses or related
trades or businesses.

If the Fund qualifies as a regulated investment company and
distributes to its stockholders at least 90% of its net investment income, then
the Fund will not be subject to federal income tax on the income so distributed
However, the Fund would be subject to corporate income tax on any undistributed
income. In addition, the Fund will be subject to a nondeductible 4% excise tax
on the amount by which the income it distributes in any calendar year is less
than a required amount. For purposes of the excise tax, the required
distribution for any calendar year equals the sum of: (1) 98% of the Fund's
ordinary income for such calendar year; (2) 98% of the excess of capital gains
over capital losses for the one-year period ending on October 31 (or another
date if elected by the Fund) of that year; and (3) 100% of the undistributed
ordinary income and gains from prior years. For purposes of the excise tax, any
ordinary income or capital

<PAGE>58

gains retained by, and taxed in the hands of, the Fund will be treated as having
been distributed.

The Fund may elect to retain all or a portion of its net capital gain,
as described under "Taxation of Stockholders--Distributions" below.

Any capital losses resulting from the disposition of securities can
only be used to offset capital gains and cannot be used to reduce the Fund's
ordinary income. Such capital losses may be carried forward by the Fund for
eight years.

The Fund may acquire securities which do not pay interest currently in
an amount equal to their effective interest rate, such as zero coupon, pay-in-
kind, or delayed interest securities. As the holder of such a security, the
Fund is required to include in taxable income the portion of the excess of the
stated value of the security at maturity, plus any interest that is not paid
currently, over its issue price ("original issue discount") that accrues on the
security for the taxable year, even if the Fund receives no payment on the
security during the year. Because the Fund must distribute annually
substantially all of its investment company taxable income, including any
original issue discount, in order to qualify as a RIC and to avoid imposition of
the 4% excise tax, the Fund may be required in a particular year to distribute
dividends in an amount that is greater than the total amount of cash the Fund
actually receives as distributions on the securities it owns. Those
distributions will be made from the Fund's cash assets or from the proceeds of
sales of portfolio securities, if necessary. The Fund may realize capital gains
or losses from those sales, which would increase or decrease the Fund's
investment company taxable income or net capital gain. In addition, any such
gains may be realized on the disposition of securities held for less than three
months. Because of the short-short rule, any such gains would reduce the Fund's
ability to sell other securities, or certain options, futures or forward
contracts, held for less than three months that it might wish to sell in the
ordinary course of its portfolio management.

The Fund may also acquire securities at a market discount. Market
discount is generally equal to (other than in the case of an obligation issued
with original issue discount) the excess of the redemption price of the
obligation at maturity over its purchase price. Accrued market discount is
treated as interest income, rather than as capital gain, when ultimately
recognized by the purchaser.

<PAGE>59

If the Fund owns shares in a foreign corporation that constitutes a
"passive foreign investment company" for federal income tax purposes, and the
Fund does not elect to treat the foreign corporation as a "qualified electing
fund" within the meaning of the Internal Revenue Code of 1986 (the "Code"), the
Fund may be subject to United States federal income taxation on a portion of any
"excess distribution" it receives from the foreign corporation or any gain it
derives from the disposition of such shares, even if such income is distributed
as a taxable dividend by the Fund to its stockholders. The Fund may also be
subject to additional tax in the nature of an interest charge with respect to
deferred taxes arising from such distributions or gains. Any tax paid by the
Fund as a result of its ownership of shares in a "passive foreign investment
company" will not give rise to any deduction or credit to the Fund or any
stockholders. A "passive foreign investment company" means any foreign
corporation if, for any taxable year during which its stock was held by the
Fund, either (i) it derives at least 75% of its gross income from "passive
income" (including, but not limited to, interest, dividends, royalties, rents
and annuities), or (ii) at least 50% of the value (or adjusted tax basis, if
elected) of its assets produce "passive income" or are held for the production
of "passive income." If the Fund owns shares in a "passive foreign investment
company" and the Fund does elect to treat the foreign corporation as a
"qualified electing fund" under the Code, the Fund may be required to include in
its income each year a portion of the ordinary income and net capital gain of
the foreign corporation, even if this income is not distributed to the Fund.
Any such income would be subject to the 90% excise tax distribution requirements
described above.

Proposed regulations have been issued which may allow the Fund to make
an election to mark to market its shares of "passive foreign investment
companies" ("PFIC") stock in lieu of being subject to U.S. federal income tax.
At the end of each taxable year to which the election applies, the Fund would
report as ordinary income the amount by which the fair market value of

<PAGE>60

the PFIC's stock exceeds the Fund's adjusted basis in these shares. No mark-to-
market losses may be recognized. The effect of the election would be to treat
excess distributions and gain on dispositions as ordinary income which is not
subject to a fund level tax when distributed to shareholders as a dividend.

Legislation currently pending before the U.S. Congress could require a
mark-to-market regime similar to the proposed regulations. It is impossible to
predict if or when the legislation will become law and, if so enacted, what form
it will ultimately take.

Hedging and Option Income Strategies and Foreign Currencies. The use
of hedging and option income strategies, such as writing (selling) and
purchasing options and futures contracts and entering into forward contracts,
involves complex rules that will determine for income tax purposes the character
and timing of recognition of the income received in connection therewith by the
Fund. Income from the disposition of options and futures (other than those on
foreign currencies) will be subject to the short-short rule if they are held for
less than three months. Income from the disposition of foreign currencies, and
options, futures and forward contracts on foreign currencies, that are not
directly related to the Fund's principal business of investing in securities (or
options and futures with respect to securities) also will be subject to the
short-short rule if they are held for less than three months.

Gains or losses attributable to fluctuations in exchange rates that
occur between the time the Fund accrues receivables or liabilities denominated
in a foreign currency and the time the Fund actually collects such receivables
or pays such liabilities generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of foreign currency or debt securities
denominated in foreign currency and on disposition of certain futures, forward
contracts and options, gains or losses attributable to fluctuations in the value
of foreign currency between the date of acquisition of the currency, security,
or contract and the date of disposition also are treated as ordinary gain or
loss. These gains or losses may increase or decrease the amount of the Fund's
investment company taxable income to be distributed to its stockholders as
ordinary income, rather than the amount distributed as capital gain.

The hedging transactions undertaken by the Fund may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by the Fund. In addition, losses or
deductions realized by the Fund on positions that are part of a straddle may be

<PAGE>61

deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Fund are
not entirely clear. The Fund may make one or more of the elections available
under the Code which are applicable to straddles. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains, losses
or deductions from the affected straddle positions will be determined under
rules that vary according to the election(s) made. The rules applicable under
certain elections operate to accelerate the recognition of gains and to defer
losses or deductions from the affected straddle positions. Because application
of the straddle rules may affect the character and timing of gains, losses or
deductions from the affected straddle positions, the amount which must be
distributed to stockholders, and taxed to stockholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a fund that did not engage in such hedging transactions.

If the Fund satisfies certain requirements, any increase in value on a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Fund satisfies the
short-short rule. Thus, only the net gain (if any) from the designated hedge
will be included in gross income for purposes of that rule. The Fund will
consider whether it should seek to qualify for this treatment for its hedging
transactions. To the extent the Fund does not qualify for this treatment, it
may be forced to defer the closing out of certain options and futures contracts
beyond the time when it otherwise would be advantageous to do so in order for
the Fund to qualify and continue to qualify for treatment as a RIC.

The Fund's taxable income will in most cases be determined on the
basis of reports made to the Fund by the issuers of the securities in which the
Fund invests. The tax treatment of certain securities in which the Fund may
invest is not free from doubt and it is possible that an Internal Revenue
Service examination of the issuers of such securities or of the Fund could
result in adjustments to the income of the Fund.

Taxation of Stockholders

Distributions. In general, all distributions to stockholders
attributable to the Fund's net investment income will be taxable as ordinary
income whether paid in cash or

<PAGE>62

reinvested in additional shares of Common Stock pursuant to the Dividend
Reinvestment Plan.

Stockholders receiving distributions in the form of additional shares
of Common Stock purchased by the Plan Agent pursuant to the Dividend
Reinvestment Plan will be treated for federal income tax purposes as receiving
the amount of cash received by the Plan Agent on their behalf. In general, the
basis of such shares of Common Stock will equal the price paid by the Plan Agent
for such shares, including brokerage commissions.

Dividends distributed by the Fund will not generally be eligible for
the dividends received deduction in the hands of corporate stockholders, except
to the extent that the Fund's taxable income consists of dividends received from
domestic corporations.

Dividends and other distributions by the Fund are generally taxable to
the stockholders at the time the dividend or distribution is made. Any
dividends declared by the Fund in October, November or December and made payable
to stockholders of record in such a month would be taxable to stockholders as of
December 31, provided that the dividend is paid in the following January.

If a stockholder purchases shares of Common Stock at a cost that
reflects an anticipated dividend or capital gains distribution, such dividend
will be taxable even though it

<PAGE>63

represents economically in whole or in part a return of the purchase price.
Investors should consider the tax implications of buying Shares shortly prior to
a dividend or capital gains distribution.

The Fund will, within 60 days after the close of its taxable year,
send written notices to stockholders regarding the tax status of all
distributions made during the year.

Sales of Shares. In general, if a share of Common Stock is sold, the
seller will recognize gain or loss equal to the difference between the amount
realized on the sale and the seller's adjusted basis in the share. However, any
loss recognized by a stockholder within six months of purchasing the shares will
be treated as a long-term capital loss to the extent of any capital gain
dividends received by the stockholder and the stockholder's share of
undistributed net capital gain. In addition, any loss realized on a sale of
shares of Common Stock will be disallowed to the extent the shares disposed of
are replaced (including a purchase under the Dividend Reinvestment Plan) within
a 61-day period beginning 30 days before and ending 30 days after the
disposition of the shares. In such a case, the basis of the shares acquired
will be adjusted to reflect the disallowed loss. Any gain or loss realized upon
a sale of shares by a stockholder who is not a dealer in securities will be
treated as capital gain or loss.

Backup Withholding. The Fund may be required to withhold federal
income tax at the rate of 31% of any payments made to a stockholder if the
stockholder has not provided a correct taxpayer identification number and
certain required certification to the Fund, or if the Secretary of the Treasury
notifies the Fund that the number provided by a stockholder is not correct or
that the stockholder has not reported all interest and dividend income required
to be shown on the stockholder's federal income tax return.

The foregoing discussion is a summary of certain of the current
federal income tax laws regarding the Fund and investors in the shares of Common
Stock, and does not deal with all of the federal income tax consequences
applicable to the Fund, or to all categories of investors, some of which may be
subject to special rules. Prospective investors should consult their own tax
advisors regarding the federal, state, local, foreign and other tax consequences
to them of investments in the Fund.

<PAGE>64

OFFICERS AND DIRECTORS

The Officers and Directors of the Fund and their principal occupation,
for at least the last five years are set forth below, with those Directors who
are "interested persons" of the Fund (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) indicated by asterisk.

<TABLE>

Positions Held Principal Occupations During Past Five
Name and Address with the Fund Years

*-Heath B. McLendon Chairman of the Board of Directors, Senior Executive Vice President of
Two World Trade Center Chief Executive Officer and Director Smith Barney Shearson; Vice Chairman
New York, NY 10048 of the Board of the Smith Barney
Shearson Asset Management Division of
Smith, Barney Advisers, Inc. and a
Director of PanAgora Asset Management
Limited, investment advisory
affiliates of Smith Barney Shearson.

*-Stephen J. Treadway President and Director Executive Vice President of Smith
1345 Ave. of the Americas Barney Shearson; Chairman of the
New York, NY 10105 Board, President and Chief Executive
Officer of Mutual Management Corp.,
and Smith, Barney Advisers, Inc.,
investment advisory affiliates of
Smith Barney Shearson.

</TABLE>

* "Interested person" of the Fund as defined in the 1940 Act.
- - Director, trustee and/or general partner of other investment companies
registered under the 1940 Act of which Smith Barney Shearson or one or more
of its affiliates is an affiliated person.

<PAGE>65

No officer, director or employee of Smith Barney Shearson or any
parent or subsidiary receives any compensation from the Fund for serving as an
officer or Director of the Fund. The Fund pays each Director who is not an
officer, director or employee of Smith Barney Shearson or any of its affiliates
a fee of $ per annum plus $ per meeting attended and reimburses
travel and out-of-pocket expenses.

PORTFOLIO TRANSACTIONS

General

The Fund's debt securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly issued debt securities
ordinarily are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from which the
Investment Manager determines that the best price or execution will be obtained
Usually no brokerage commissions, as such, are paid by the Fund for purchases
and sales undertaken through principal transactions, although the price paid
usually includes an undisclosed compensation to the dealer acting as agent. The
prices paid to underwriters of newly issued securities typically include a
concession paid by the issuer to the underwriter, and purchasers of after-market
securities from dealers ordinarily are executed at a price between the bid and
asked price.

Transactions on stock exchanges involve the payment of negotiated
brokerage commissions. Transactions on behalf of the Fund are allocated to
various dealers by the Investment Manager in its best judgment. The primary
consideration is prompt and effective execution of orders at the most favorable
price. Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Investment Manager to
supplement its own research and analysis with the views and information of other
securities firms. The Fund may utilize Smith Barney Shearson or a Smith Barney
Shearson-affiliated broker in connection with a purchase or sale of securities
when the Investment Manager believes that the broker's charge for the
transactions does not exceed usual and customary levels. The same standard
applies to the use of Smith Barney Shearson as a commodities broker in
connection with entering into options and futures contracts.

Research services furnished by broker-dealers through which the Fund
effects securities transactions may be used by the Investment Manager in
managing other investment funds and, conversely, research services furnished to
the Investment Manager

<PAGE>66

by broker-dealers in connection with other funds the Investment Manager advises
may be used by the Investment Manager in advising the Fund. Although it is not
possible to place a dollar value on these services, the Investment Manager is of
the view that the receipt of the services should not reduce the overall costs of
its research services.

Investment decisions for the Fund are made independently from those of
other investment companies managed by the Investment Manager. If those
investment companies are prepared to invest in, or desire to dispose of,
investments at the same time as the Fund, however, available investments or
opportunities for sales will be allocated equitably to each client of the
Investment Manager. In some cases, this procedure may adversely affect the size
of the position obtained for or disposed of by the Fund or the price paid or
received by the Fund.

The Fund's Board of Directors will review periodically the commissions
paid by the Fund to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits inuring to the Fund.

Turnover

The Fund cannot accurately predict its turnover rate, but anticipates
that its annual turnover rate will not exceed
[ ]%. The Fund's turnover rate is calculated by dividing the lesser of the
Fund's sales or purchases of securities during a year (excluding any security
the maturity of which at the time of acquisition is one year or less) by the
average monthly value of the Fund's securities for the year. Higher turnover
rates can result in corresponding increases in the Fund's transaction costs.
The Fund will not consider turnover rate a limiting factor in making investment
decisions consistent with its investment objectives and policies.

CONVERSION TO OPEN-END FUND

The Fund's Articles of Incorporation require the favorable vote of the
holders of at least two-thirds of the shares of Common Stock then entitled to be
voted to authorize the conversion of the Fund from a closed-end to an open-end
investment company as defined in the 1940 Act, unless two-thirds of the
Continuing Directors (as defined below) approve such a conversion. In the
latter case, the affirmative vote of a majority of the shares outstanding will
be required to approve

<PAGE>67

the amendment to the Fund's Articles of Incorporation providing for the
conversion of the Fund.

Anti-Takeover Provisions

The Fund's Articles of Incorporation include provisions that could
have the effect of limiting the ability of other entities or persons to acquire
control of the Fund or to change the composition of its Board of Directors and
could have the effect of depriving shareholders of an opportunity to sell their
shares of Common Stock at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control of the Fund.
Commencing with the first annual meeting of stockholders, the Board of Directors
will be divided into three classes. At the annual meeting of stockholders in
each year thereafter, the term of one class will expire and each Director
elected to the class will hold office for a term of three years. The
classification of the Board of Directors in this manner could delay for an
additional year the replacement of a majority of the Board. The Articles of
Incorporation provide that the maximum number of Directors that may constitute
the Fund's entire board is 12. A Director may be removed from office for cause
(but not without cause), or the maximum number of Directors increased, only by
vote of the holders of at least 75% of the shares of Common Stock entitled to be
voted on the matter.

The affirmative votes of at least 75% of the Directors and the holders
of at least 75% of the shares of the Fund are required to authorize any of the
following transactions (referred to individually as a "Business Combination"):
(1) a merger, consolidation or share exchange of the Fund with or into any other
person (referred to individually as a "Reorganization Transaction"); (2) the
issuance or transfer by the Fund (in one or a series of transactions in any 12-
month period) of any securities of the Fund to any other person or entity for
cash, securities or other property (or combination thereof) having an aggregate
fair market value of $1,000,000 or more, excluding sales of securities of the
Fund in connection with a public offering, issuances of securities of the Fund
pursuant to a dividend reinvestment plan adopted by the Fund and issuances of
securities of the Fund upon the exercise of any stock subscription rights
distributed by the Fund; (3) a sale, lease, exchange, mortgage, pledge, transfer
or other disposition by the Fund (in one or a series of transactions in any 12-
month period) to or with any person of any assets of the Fund having an
aggregate fair market value of $1,000,000 or more, except for transactions in
securities effected by the Fund in the ordinary course of its business (each
such sale, lease, exchange, mortgage, pledge, transfer or other disposition
being referred to

<PAGE>68

individually as a "Transfer Transaction"). The same affirmative votes are
required with respect to: any proposal as to the voluntary liquidation or
dissolution of the Fund or any amendment to the Fund's Articles of Incorporation
to terminate its existence (referred to individually as a "Termination
Transaction"); and any stockholder proposal as to specific investment decisions
made or to be made with respect to the Fund's assets.

A 75% stockholder vote will not be required with respect to a Business
Combination if the transaction is approved by a vote of at least 75% of the
Continuing Directors (as defined below) or if certain conditions regarding the
consideration paid by the person entering into, or proposing to enter into, a
Business Combination with the Fund and various other requirements are satisfied
In such case, a majority of the votes entitled to be cast by stockholders of the
Fund will be required to approve the transaction if it is a Reorganization
Transaction or a Transfer Transaction that involves substantially all of the
Fund's assets and no stockholder vote will be required to approve the
transaction if it is any other Business Combination. In addition, a 75%
stockholder vote will not be required with respect to a Termination Transaction
if it is approved by a vote of at least 75% of the Continuing Directors, in
which case a majority of the votes entitled to be cast by stockholders of the
Fund will be required to approve the transaction.

The voting provisions described above could have the effect of
depriving stockholders of the Fund of an opportunity to sell their Common Stock
at a premium over prevailing market prices by discouraging a third party from
seeking to obtain control of the Fund in a tender offer or similar transaction.
In the view of the Fund's Board of Directors, however, these provisions offer
several possible advantages, including: (1) requiring persons seeking control of
the Fund to negotiate with its management regarding the price to be paid for the
amount of Common Stock required to obtain control; (2) promoting continuity and
stability; and (3) enhancing the Fund's ability to pursue long-term strategies
that are consistent with its investment objective and management policies. The
Board of Directors has determined that the voting requirements described above,
which are generally greater than the minimum requirements under Maryland law and
the 1940 Act, are in the best interests of stockholders generally.

A "Continuing Director," as used in the discussion above, is any
member of the Fund's Board of Directors (1) who is not a person or affiliate of
a person who enters or proposes to enter into a Business Combination with the
Fund (such a person or

<PAGE>69

affiliate being referred to individually as an "Interested Party") and (2) who
has been a member of the Board of Directors for a period of at least 12 months
(or since the commencement of the Fund's operations, if less than 12 months), or
is a successor of a Continuing Director who is unaffiliated with an Interested
Party and is recommended to succeed a Continuing Director by a majority of the
Continuing Directors then members of the Board of Directors.

<PAGE>70

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND DIRECTORS OF
Greenwich Street Income Fund Inc.:

We have audited the accompanying statement of assets and liabilities
of Greenwich Street Income Fund Inc. (the "Fund") as of ____________, 1994.
This financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets and liabilities is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of assets and
liabilities. Our procedures included confirmation of cash held by the custodian
as of ____________, 1994. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit of the statement of assets and liabilities provides a reasonable basis for
our opinion.

In our opinion, the statement of assets and liabilities referred to
above presents fairly, in all material respects, the financial position of
Greenwich Street Income Fund Inc. as of ____________, 1994 in conformity with
generally accepted accounting principles.

Coopers & Lybrand
[Boston, Massachusetts]

____________, 1994

<PAGE>71

GREENWICH STREET INCOME FUND INC.

STATEMENT OF ASSETS AND LIABILITIES
____________, 1994

ASSETS

Cash $100,000

Total Assets 100,000

LIABILITIES

Accrued offering expenses (Note 2) -

NET ASSETS, applicable to 8,000 shares of common stock
issued and outstanding 100,000

NET ASSET VALUE per share ($100,000 divided by 8,000 shares of
common stock outstanding) $12.50

The accompanying notes are an integral part of this Statement.

NOTES TO STATEMENTS OF ASSETS AND LIABILITIES

(1) Greenwich Street Income Fund Inc. (the "Fund") was organized on
____________, 1994 under the laws of the State of Maryland and is
registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company. The Fund has had no
operations other than organizational matters and the issuance and sale of
8,000 shares of common stock on ____________, 1994 to Smith Barney Shearson
Inc., the Fund's distributor.

(2) Costs relating to the public offering of the Fund's shares of common stock
will be payable from the proceeds of the offering and charged to capital at
the time of the issuance of the shares.

<PAGE>72

SMITH BARNEY HIGH INCOME OPPORTUNITY FUND INC.

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits.

(a) Financial Statements

(i) Report of Independent Accountants (contained in
Statement of Additional Information)

(ii) Statement of Assets and Liabilities as of ,
1994 (contained in Statement of Assets and Liabilities)

(b) Exhibits:

Exhibit
Number Description

(1) -- Articles of Incorporation
(2) -- By-Laws
(3) -- Not Applicable
(4) -- Specimen Certificate of Common Stock*
(5) -- Copy of Fund's Dividend Reinvestment Plan*
(6) -- Not Applicable
(7) -- Form of Investment Management Agreement
between the Fund and the Investment Manager*
(8)(a) -- Form of Underwriting Agreement*
(b) -- Form of Smith Barney Shearson Master
Agreement among Underwriters*
(9) -- Form of Custodian Agreement between the Fund
and Boston Safe Deposit and Trust Company*
(10) -- Not Applicable
(11) -- Form of Transfer Agency and Service Agreement
between the Fund and The Shareholders Services
Group, Inc.*
(12) -- Opinion and consent of Willkie Farr &
Gallagher, counsel to the Fund*
(13) -- Not Applicable
(14) -- Consent of Coopers & Lybrand, independent
accountants for the Fund*
(15) -- Not Applicable
(16) -- Form of Subscription Agreement*
(17) -- Not Applicable

_______________________________
* To be filed by Amendment.

<PAGE>73

Item 25. Marketing Arrangements.

Reference is made to the Underwriting Agreement to be filed by
Amendment as Exhibit 8(a) to this Registration Statement.

Item 26. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated expenses to be
incurred in connection with the offering described in this Registration
Statement:

Securities and Exchange Commission registration fees $ *
New York Stock Exchange listing fee . . . . . . . . . . . . . . . . *
NASD registration fee . . . . . . . . . . . . . . . . . . . . . . . *
Blue Sky fees and expenses (including fees of counsel) . . . . . . *
Printing (other than stock certificates) . . . . . . . . . . . . . *
Engraving and printing stock certificates . . . . . . . . . . . . . *
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . *
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . *
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *

* To be provided by Amendment

Item 27. Persons Controlled by or Under Common Control with Registrant.

Prior to the effectiveness of this Registration Statement, the
Registrant will sell 8,000 of its shares of common stock to Smith Barney
Shearson Inc. Smith Barney Shearson Inc. is controlled by Smith Barney Holdings
Inc. Smith Barney Holdings Inc. is a direct wholly-owned subsidiary of
Primerica Corporation.

Item 28. Number of Holders of Securities.

(1) (2)
Number of Record Holders
Title of Class at , 1994

Shares of Common Stock, 1
$.001 Par Value

Item 29. Indemnification.

Sections 2-418 of the General Corporation Law of the State of
Maryland, Article VI of the Fund's By-Laws and the Investment Advisory Agreement
to be filed by Amendment as Exhibit 7 provide for indemnification.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be provided to directors, officers and controlling
persons of the Fund, pursuant to the foregoing provisions or otherwise, the Fund
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a director, officer or controlling person of

<PAGE>74

the Fund in connection with any successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Fund will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

Reference is made to Section ______ of the Underwriting
Agreement, a form of which is to be filed by Amendment as Exhibit 8(a), for
provisions relating to the indemnification of the agent.

Item 30. Business and Other Connections of Investment Manager.

[To Come]

Item 31. Location of Accounts and Records.

All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940, as amended and the rules
promulgated thereunder are maintained at the office of the Greenwich Street
Advisors, the Fund's investment manager (the "Investment Manager") at 1345
Avenue of the Americas, New York, New York 10105.

Item 32. Management Services.

Not applicable.

Item 33. Undertakings.

(1) Registrant undertakes to suspend offering of the shares of
Common Stock covered hereby until it amends its Prospectus contained herein if
(1) subsequent to the effective date of this Registration Statement, its net
asset value per share of Common Stock declines more than 10 percent from its net
asset value per share of Common Stock as of the effective date of this
Registration Statement, or (2) its net asset value per share of Common Stock
increases to an amount greater than its net proceeds as stated in the Prospectus
contained herein.

(2) Not applicable.

(3) Not applicable.

(4)(a) Registrant undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
Registration Statement:

(1) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;

(2) to reflect in the prospectus any facts or events after
the effective date of this Registration Statement (or the most

<PAGE>75

recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement; and

(3) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement.

(4)(b) Registrant undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each subsequent
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of those securities
at that time shall be deemed to be the initial bona fide offering thereof.

(4)(c) Registrant undertakes to remove from registration by
means of post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.

(5) Not applicable.

(6) Registrant undertakes to send by first class mail or other
means designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, any Statement of Additional Information.

<PAGE>76

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant GREENWICH STREET INCOME FUND INC.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State of
New York, on the 30th day of March, 1994.

GREENWICH STREET INCOME FUND INC.

By: /s/ Heath B. McLendon
Heath B. McLendon

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following in the capacities
and on the date indicated.

Signatures Title Date

/s/ Heath B. McLendon Chairman of the Board March 30, 1994
Heath B. McLendon of Directors, Chief
Executive Officer and
President

/s/ Stephen J. Treadway Director, Chief Financial March 30, 1994
Stephen J. Treadway Officer, Treasurer and
Secretary

<PAGE>77

GREENWICH STREET INCOME FUND INC.

EXHIBIT INDEX

Exhibit No. Description of Exhibit Page No.

(1) Articles of Incorporation
(2) By-Laws

<PAGE>1

ARTICLES OF INCORPORATION

GREENWICH STREET INCOME FUND INC.

ARTICLE I

THE UNDERSIGNED, Gerald W. Wheeler, whose post office address is 153
East 53rd Street, New York, New York 10022, being at least eighteen (18) years
of age, hereby forms a corporation under and by virtue of the Maryland General
Corporation Law.

ARTICLE II

NAME

The name of the Corporation is Greenwich Street Income Fund Inc.
(the "Corporation").

ARTICLE III

PURPOSES AND POWERS

The purposes for which the Corporation is formed are to act as an
investment company under the federal Investment Company Act of 1940, as
amended (the "1940 Act"), and to exercise and enjoy all of the general powers,
rights and privileges granted to, or conferred upon, corporations by the
Maryland General Corporation Law now or hereafter in force.

ARTICLE IV

PRINCIPAL OFFICE AND RESIDENT AGENT

The post office address of the principal office of the Corporation
in the State of Maryland is c/o The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. The name of the resident agent of the
Corporation in the State of Maryland is The Corporation Trust Incorporated, a
corporation of the State of Maryland, and the post office address of the
resident agent is 32 South Street, Baltimore, Maryland 21202.

<PAGE>2

ARTICLE V

CAPITAL STOCK

(1) The total number of shares of capital stock of all classes
which the Corporation shall have authority to issue is Five Hundred Million
(500,000,000) shares, all of which shall have a par value of one-tenth of one
cent ($.001) per share and of the aggregate par value of Five Hundred Thousand
Dollars ($500,000).

(2) (a) The Board of Directors of the Corporation is authorized to
classify or to reclassify, from time to time, any unissued shares of stock of
the Corporation, whether now or hereafter authorized, by setting, changing or
eliminating the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of or rights to require redemption of the stock.

(b) Without limiting the generality of the foregoing, the
dividends and distributions or other payments with respect to the stock of the
Corporation, and with respect to each class that hereafter may be created,
shall be in such amount as may be declared from time to time by the Board of
Directors, and such dividends and distributions may vary from class to class
to such extent and for such purposes as the Board of Directors may deem
appropriate, including, but not limited to, the purpose of complying with
requirements of regulatory or legislative authorities.

(c) Until such time as the Board of Directors shall provide
otherwise pursuant to the authority granted in this Section (2) of this
Article V all the authorized shares of the Corporation are designated as
Common Stock. Shares of the Common Stock and the holders thereof, and shares
of any class and the holders thereof, shall be subject to the following
provisions, provided, however, that if no shares of any class other than
Common Stock are outstanding, the shares of the Common Stock and the holders
thereof shall nevertheless be subject to the following provisions except to
the extent that such provisions are by their terms applicable only when shares
of two or more classes are outstanding.

(3) The net asset value of each share of the Corporation's capital
stock issued, sold or purchased at net asset value shall be the current net
asset value per share as determined in accordance with procedures adopted from
time to time by the Board of Directors which comply with the 1940 Act.

<PAGE>3

(4) Shares of each class of stock shall be entitled to such
dividends or distributions, in stock or in cash or both, as may be declared
from time to time by the Board of Directors, acting in its sole discretion,
with respect to such class.

(5) In the event of the liquidation or dissolution of the
Corporation, the holders of the Common Stock of the Corporation's stock shall
be entitled to receive all the assets of the Corporation not attributable to
other classes of stock through any preference. The assets so distributable to
the stockholders shall be distributed among such stockholders in proportion to
the number of shares of that class held by them and recorded on the books of
the Corporation.

(6) Unless otherwise expressly provided in these Articles of
Incorporation, including any Articles Supplementary creating any class of
capital stock, on each matter submitted to a vote of stockholders, each holder
of a share of capital stock of the Corporation shall be entitled to one vote
for each share standing in such holder's name on the books of the Corporation,
irrespective of the class thereof, and all shares of all classes of capital
stock shall vote together as a single class; provided, however, that as to any
matter with respect to which a separate vote of any class is required by the
1940 Act or any rules, regulations or orders issued thereunder, or the
Maryland General Corporation Law, such requirement as to a separate vote by
that class shall apply in lieu of a vote of all classes voting together as a
single class as described above.

(7) The Corporation shall be entitled to purchase shares of its
capital stock, to the extent that the Corporation may lawfully effect such
purchase under the laws of the State of Maryland, upon such terms and
conditions and for such consideration as the Board of Directors shall deem
advisable.

(8) All shares purchased by the Corporation shall constitute
authorized but unissued shares and the number of the authorized shares of
stock of the Corporation shall not be reduced by the number of any shares
purchased by it. Unless and until their classification is changed in
accordance with section (2) of this Article V, all shares of capital stock so
purchased shall continue to belong to the same class to which they belonged at
the time of their purchase.

(9) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in fractional
denominations shall be shares of capital stock having proportionately to the
respective fractions represented thereby all the rights of whole shares,
including

<PAGE>4

without limitation, the right to vote, the right to receive dividends and
distributions, and the right to participate upon liquidation of the
Corporation, but excluding the right to receive a stock certificate
representing fractional shares.

(10) All persons who shall acquire capital stock or other
securities of the Corporation shall acquire the same subject to the provisions
of these Articles of Incorporation and the By-Laws of the Corporation, as each
may be amended from time to time.

ARTICLE VI

PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE CORPORATION
AND OF THE DIRECTORS AND STOCKHOLDERS

(1) The number of directors of the Corporation shall initially be
two (2), which number may be increased or decreased by or pursuant to the
By-Laws of the Corporation but shall never be less than two (2), unless the
Corporation has three (3) or more stockholders during which time the number of
directors shall never be less than three (3). Pursuant to the By-Laws of the
Corporation, the maximum number of directors that may constitute the
Corporation's Board of Directors is twelve (12). The maximum number of
directors may be increased only by action taken by the holders of at least
seventy-five percent (75%) of the shares of capital stock then entitled to
vote to increase the maximum number of directors. The names of the persons
who shall act as directors until the initial annual meeting and until their
successors are duly elected and qualify are:

Stephen J. Treadway
Heath B. McLendon

Beginning with the initial annual meeting of stockholders held after
the initial public offering of the shares of the Corporation (the "Initial
Annual Meeting"), the directors shall be divided into three classes,
designated Class I, Class II and Class III. Each class shall consist, as
nearly as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors. At the Initial Annual Meeting,
Class I directors shall be elected for a one-year term, Class II directors for
a two-year term and Class III directors for a three-year term. At each annual
meeting of stockholders beginning with the annual meeting next succeeding the
Initial Annual Meeting, successors to the class of directors whose term
expires at that annual meeting shall be elected for a

<PAGE>5

three-year term. A director elected at an annual meeting shall hold office
until the annual meeting for the year in which his term expires and until his
successor shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from office. If
the number of directors is changed, any increase or decrease shall be
apportioned among the classes, as of the annual meeting of stockholders next
succeeding any such change, so as to maintain a number of directors in each
class as nearly equal as possible. In no case shall a decrease in the number
of directors shorten the term of any incumbent director. Any vacancy on the
Board of Directors that results from an increase in the number of directors
may be filled by a majority of the entire Board of Directors then in office,
provided that a quorum is present, and any other vacancy occurring in the
Board of Directors may be filled by a majority of the directors then in
office, whether or not sufficient to constitute a quorum, or by a sole
remaining director; provided, however, that if the stockholders of any class
of the Corporation's capital stock are entitled separately to elect one or
more directors, a majority of the remaining directors elected by that class or
the sole remaining director elected by that class may fill any vacancy among
the number of directors elected by that class. A director elected by the
Board of Directors to fill any vacancy in the Board of Directors shall serve
until the next annual meeting of stockholders and until his successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. At any annual meeting of
stockholders, any director elected to fill any vacancy in the Board of
Directors that has arisen since the preceding annual meeting of stockholders
(whether or not any such vacancy has been filled by election of a new director
by the Board of Directors) shall hold office for a term which coincides with
the remaining term of the class to which such directorship was previously
assigned, if such vacancy arose other than by an increase in the number of
directors, and until his successor shall be elected and shall qualify. In the
event such vacancy arose due to an increase in the number of directors, any
director so elected to fill such vacancy at an annual meeting shall hold
office for a term which coincides with that of the class to which such
directorship has been apportioned as heretofore provided, and until his
successor shall be elected and shall qualify. A director may be removed for
cause only, and not without cause, and only by action taken by the holders of
at least seventy-five percent (75%) of the shares of capital stock then
entitled to vote in an election of such director.

(2) The Board of Directors of the Corporation is hereby empowered
to authorize the issuance from time to time of

<PAGE>6

shares of capital stock of any class, whether now or hereafter authorized, any
securities convertible into shares of its capital stock of any class or
classes, whether now or hereafter authorized, for such consideration as the
Board of Directors may deem advisable, subject to such limitations as may be
set forth in these Articles of Incorporation or in the By-Laws of the
Corporation or in the Maryland General Corporation Law or the 1940 Act.

(3) Each person who at any time is or was a director or officer of
the Corporation shall be indemnified by the Corporation to the fullest extent
permitted by the Maryland General Corporation Law as it may be amended or
interpreted from time to time, including the advancing of expenses, subject to
any limitations imposed by the 1940 Act and the Rules and Regulations
promulgated thereunder. Furthermore, to the fullest extent permitted by
Maryland law, as it may be amended or interpreted from time to time, subject
to the limitations imposed by the 1940 Act and the Rules and Regulations
promulgated thereunder, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders. No amendment of the
Charter of the Corporation or repeal of any of its provisions shall limit or
eliminate any of the benefits provided to any person who at any time is or was
a director or officer of the Corporation under this Section in respect of any
act or omission that occurred prior to such amendment or repeal.

(4) The Board of Directors of the Corporation shall have the
exclusive authority to make, alter or repeal from time to time any of the
By-Laws of the Corporation except any particular By-Law which is specified as
not subject to alteration or repeal by the Board of Directors, subject to the
requirements of the 1940 Act and the Rules and Regulations promulgated
thereunder.

ARTICLE VII

DENIAL OF PREEMPTIVE RIGHTS

No stockholder of the Corporation shall by reason of his holding
shares of capital stock have any preemptive or preferential right to purchase
or subscribe to any shares of capital stock of the Corporation, now or
hereafter authorized, or any notes, debentures, bonds or other securities
convertible into shares of capital stock, now or hereafter to be authorized,
whether or not the issuance of any such shares of capital stock, or notes,
debentures, bonds or other securities would adversely affect the dividend or
voting rights of such stockholder; and the Board of Directors may issue shares
of any class of capital stock

<PAGE>7

of the Corporation, or any notes, debentures, bonds, or other securities
convertible into shares of any class of capital stock of the Corporation,
either, whole or in part, to existing stockholders.

ARTICLE VIII

CERTAIN VOTES OF STOCKHOLDERS

(1) Except as otherwise provided in Section (2) of this Article
VIII, Section (1) of Article VI, the first paragraph of Article XII and the
second sentence of Article XIII and notwithstanding any provision of the
General Laws of the State of Maryland requiring action to be taken or
authorized by the affirmative vote of the holders of a designated proportion
greater than a majority of the votes of all classes of capital stock of the
Corporation (or of any class entitled to vote thereon as a separate class),
such action shall be valid and effective if taken or authorized by the
affirmative vote of the holders of a majority of the aggregate number of
shares of capital stock of the Corporation outstanding and entitled to vote
thereon (or a majority of the aggregate number of shares of a class entitled
to vote thereon or a separate class).

(2) (a) Except as otherwise provided in paragraph (b) of this
Section (2) of this Article VIII, the affirmative votes of at least
seventy-five percent (75%) of the directors of the Corporation and at least
seventy-five percent (75%) of the shares of the capital stock of the
Corporation outstanding and entitled to vote thereupon shall be necessary to
authorize any of the following actions:

(1) The merger or consolidation or share exchange of the
Corporation with or into any other person or company (including, without
limitation, a partnership, corporation, joint venture, business trust,
common law trust or any other business organization);

(2) the issuance or transfer by the Corporation (in one or a
series of transactions in any 12-month period) of any securities of the
Corporation to any other person or entity for cash, securities or other
property (or combination thereof) having an aggregate fair market value
of $1,000,000 or more, excluding (i) sales of any securities of the
Corporation in connection with a public offering thereof, (ii) issuances
of securities of the Corporation pursuant to a dividend reinvestment plan
adopted by the Corporation and (iii) issuances of securities of the

<PAGE>8

Corporation upon the exercise of any stock subscription rights
distributed by the Corporation;

(3) a sale, lease, exchange, mortgage, pledge, transfer or
other disposition by the Corporation (in one or a series of transactions
in any 12-month period) to or with any person of any assets of the
Corporation having an aggregate fair market value of $1,000,000 or more,
except for transactions in securities effected by the Corporation in the
ordinary course of its business;

(4) any proposal as to the voluntary liquidation or
dissolution of the Corporation or any amendment to the Corporation's
Articles of Incorporation to terminate its existence;

(5) any shareholder proposal as to specific investment
decisions made or to be made with respect to the Corporation's assets.

(b) The seventy-five percent (75%) shareholder vote will not
be required with respect to any action listed in paragraph (a) of this Section
(2) of this Article VIII if such action is approved by a vote of at least
seventy-five percent (75%) of the continuing directors ("Continuing
Directors") (a Continuing Director shall mean any member of the Board who is
not a person or affiliate of a person who enters or proposes to enter into a
transaction with the Corporation pursuant to Section 2(a) of Article VIII of
these Articles of Incorporation and has been a member of the Board for a
period of at least twelve months -- or since the commencement of the
Corporation's operations, if less than twelve months -- or is a successor to a
Continuing Director who is unaffiliated with a person who enters or proposes
to enter into a transaction with the Corporation pursuant to Section 2(a) of
Article VIII of these Articles of Incorporation and is recommended to succeed
a Continuing Director by a majority of the Continuing Directors then members
of the Board) or if certain conditions regarding the consideration paid by the
person entering into, or proposing to enter into, any action listed in
paragraph (a) of this Section (2) of this Article VIII with the Corporation
are satisfied and various other requirements as determined by the Board of
Directors are met. If the foregoing requirements listed in this paragraph (b)
are satisfied, less than seventy-five percent (75%) of the shares of the
capital stock of the Corporation outstanding and entitled to vote thereupon
required in Section 2(a) of this Article VIII shall be necessary to authorize
any of the following actions:

<PAGE>9

(1) affirmative vote of only a majority of the shares of
capital stock of the Corporation outstanding and entitled to vote
thereupon shall be necessary to authorize any action that involves
substantially all of the Corporation's assets listed in paragraphs (a)
(1) and (a) (3) of this Section (2) of this Article VIII;

(2) affirmative vote of only a majority of the shares of
capital stock of the Corporation outstanding and entitled to vote thereon
shall be necessary to authorize the actions listed in paragraph (a) (4)
of this Section (2) of this Article VIII;

(3) no shareholder vote will be required to approve any of the
other actions listed in Section (2)(a) of this Article VIII.

ARTICLE IX

DETERMINATION BINDING

Any determination made in good faith, so far as accounting matters
are involved, in accordance with accepted accounting practice by or pursuant
to the authority of the direction of the Board of Directors, as to the amount
of assets, obligations or liabilities of the Corporation, as to the amount of
net income of the Corporation from dividends and interest for any period or
amounts at any time legally available for the payment of dividends, as to the
amount of any reserves or charges set up and the propriety thereof, as to the
time of or purpose for creating reserves or as to the use, alteration or
cancellation of any reserves or charges (whether or not any obligation or
liability for which such reserves or charges shall have been created, shall
have been paid or discharged or shall be then or thereafter required to be
paid or discharged), as to the price of any security owned by the Corporation
or as to any other matters relating to the issuance, sale, redemption or other
acquisition or disposition of securities or shares of capital stock of the
Corporation, and any reasonable determination made in good faith by the Board
of Directors shall be final and conclusive, and shall be binding upon the
Corporation and all holders of its capital stock, past, present and future,
and shares of the capital stock of the Corporation are issued and sold on the
condition and understanding, evidenced by the purchase of shares of capital
stock or acceptance of share certificates, that any and all such
determinations shall be binding as aforesaid. No provision of these Articles
of Incorporation shall be effective to (a) require a waiver of

<PAGE>10

compliance with any provision of the Securities Act of 1933, as amended, or
the 1940 Act, or of any valid rule, regulation or order of the Securities and
Exchange Commission thereunder or (b) protect or purport to protect any
director or officer of the Corporation against any liability to the
Corporation or its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.

ARTICLE X

PRIVATE PROPERTY OF STOCKHOLDERS

The private property of stockholders shall not be subject to the
payment of corporate debts to any extent whatsoever.

ARTICLE XI

PERPETUAL EXISTENCE

The duration of the Corporation shall be perpetual.

ARTICLE XII

CONVERSION TO OPEN-END COMPANY

Notwithstanding any other provisions of these Articles of
Incorporation or the By-Laws of the Corporation, a favorable vote of the
holders of at least sixty-six and two-thirds percent (66 2/3%) of the shares
of capital stock of the Corporation entitled to be voted on the matter shall
be required to approve, adopt or authorize an amendment to these Articles of
Incorporation that makes the Common Stock or any other class of capital stock
a "redeemable security" as that term is defined in the 1940 Act unless
sixty-six and two-thirds percent (66 2/3%) of the Continuing Directors
entitled to vote on the matter approve of such action. In such a case, the
affirmative vote of a majority of shares of capital stock of the Corporation
entitled to be voted on the matter shall be required to approve, adopt or
authorize the foregoing amendment to these Articles of Incorporation.

The Corporation shall notify the holders of all capital securities
of the approval, in accordance with the preceding paragraph of this Article
XII, of any amendment to these Articles

<PAGE>11

of Incorporation that makes the Common Stock a "redeemable security" (as that
term is defined in the 1940 Act) no later than thirty (30) days prior to the
date of filing of such amendment with the Department of Assessments and
Taxation (or any successor agency) of the State of Maryland; such amendment
may not be so filed, however, until the later of (a) ninety (90) days
following the date of approval of such amendment by the holders of capital
securities in accordance with the preceding paragraph of this Article XII and
(b) the next January 1 or July 1, whichever is sooner, following the date of
such approval by holders of capital securities.

ARTICLE XIII

AMENDMENT

The Corporation reserves the right to amend, alter, change or repeal
from time to time any provision contained in the Charter, including any
amendments which alter the contract rights of any class of outstanding capital
stock as set forth in the Charter in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation. Notwithstanding any other provisions of these Articles
of Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that a lesser percentage may be specified by law, these Articles of
Incorporation or the By-Laws of the Corporation), the amendment or repeal of
Section (1), Section (3), or Section (4) of Article VI, Section (1) of Article
VIII, Article X, Article XI, Article XII or this Article XIII of these
Articles of Incorporation shall require the affirmative vote of the holders of
at least seventy-five percent (75%) of the shares then entitled to be voted on
the matter.

IN WITNESS WHEREOF, the undersigned incorporator of Greenwich Street
Income Fund Inc. hereby executes the foregoing Articles of Incorporation and
acknowledges the same to be his act.

Dated the 29th day of March, 1994.

/s/ GERALD W. WHEELER
Gerald W. Wheeler

<PAGE>1

BY-LAWS

GREENWICH STREET INCOME FUND INC.

ARTICLE I

Offices

Section 1. Principal Office. The principal office of the
Corporation shall be in the City of Baltimore, State of Maryland.

Section 2. Principal Executive Office. The principal executive
offices of the Corporation shall be at 1345 Avenue of the Americas, New York,
New York 10105.

Section 3. Other Offices. The Corporation may have such other
offices in such places as the Board of Directors may from time to time
determine.

ARTICLE II

Meeting of Stockholders

Section 1. Annual Meeting. An annual meeting of the stockholders
of the Corporation for the election of directors and for the transaction of
such other business as may properly be brought before the meeting shall be
held in September of each year as shall be designated annually by the Board of
Directors.

Section 2. Special Meetings. Special meetings of the stockholders,
unless otherwise provided by law or by the Articles of Incorporation, may be
called for any purpose or purposes by a majority of the Board of Directors,
the President, or on the written request of the holders of at least 25% of the
outstanding capital stock of the Corporation entitled to vote at such meeting.

Section 3. Place of Meetings. Annual and special meetings of the
stockholders shall be held at such place within the United States as the Board
of Directors may from time to time determine.

Section 4. Notice of Meetings; Waiver of Notice. Notice of the
place, date and time of the holding of each annual and special meeting of the
stockholders and the purpose or purposes of each special meeting shall be
given personally or by mail, not less than ten nor more than ninety days
before the date

<PAGE>2

of such meeting, to each stockholder entitled to vote at such meeting and to
each other stockholder entitled to notice of the meeting. Notice by mail
shall be deemed to be duly given when deposited in the United States mail
addressed to the stockholder at his address as it appears on the records of
the Corporation, with postage thereon prepaid.

Notice of any meeting of stockholders shall be deemed waived by any
stockholder who shall attend such meeting in person or by proxy, or who shall,
either before or after the meeting, submit a signed waiver of notice which is
filed with the records of the meeting. When a meeting is adjourned to another
time and place, unless the Board of Directors, after the adjournment, shall
fix a new record date for an adjourned meeting, or the adjournment is for more
than one hundred and twenty days after the original record date, notice of
such adjourned meeting need not be given if the time and place to which the
meeting shall be adjourned were announced at the meeting at which the
adjournment is taken.

Section 5. Quorum and Adjourned Meetings. At all meetings of the
stockholders, the holders of a majority of the shares of stock of the
Corporation entitled to vote at the meeting, present in person or by proxy,
shall constitute a quorum for the transaction of any business, except as
otherwise provided by statute or by the Articles of Incorporation. In the
absence of a quorum no business may be transacted, except that the holders of
a majority of the shares of stock present in person or by proxy and entitled
to vote may adjourn the meeting from time to time to a date not more than 120
days after the original record date, without notice other than announcement
thereat except as otherwise required by these By-Laws, until the holders of
the requisite amount of shares of stock shall be so present. At any such
adjourned meeting at which a quorum may be present any business may be
transacted which might have been transacted at the meeting as originally
called. The absence from any meeting, in person or by proxy, of holders of
the number of shares of stock of the Corporation in excess of a majority
thereof which may be required by the laws of the State of Maryland, the
Investment Company Act of 1940, as amended, or other applicable statute, the
Articles of Incorporation, or these By-Laws, for action upon any given matter
shall not prevent action at such meeting upon any other matter or matters
which may properly come before the meeting, if there shall be present thereat,
in person or by proxy, holders of the number of shares of stock of the
Corporation required for action in respect of such other matter or matters.

<PAGE>3

Section 6. Organization. At each meeting of the stockholders, the
Chairman of the Board (if one has been designated by the Board), or in the
Chairman of the Board's absence or inability to act, the President, or in the
absence or inability of the Chairman of the Board and the President, a Vice
President, shall act as chairman of the meeting. The Secretary, or in the
Secretary's absence or inability to act, any person appointed by the chairman
of the meeting, shall act as secretary of the meeting and keep the minutes
thereof.

Section 7. Order of Business. The order of business at all
meetings of the stockholders shall be as determined by the chairman of the
meeting.

Section 8. Voting. Except as otherwise provided by statute or the
Articles of Incorporation, each holder of record of shares of stock of the
Corporation having voting power shall be entitled at each meeting of the
stockholders to one vote for every share of such stock standing in such
stockholder's name on the record of stockholders of the Corporation as of the
record date determined pursuant to Section 9 of this Article or if such record
date shall not have been so fixed, then at the later of (i) the close of
business on the day on which notice of the meeting is mailed or (ii) the
thirtieth day before the meeting.

Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act for him by a proxy signed by such
stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof, unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
stockholder executing it, except in those cases where such proxy states that
it is irrevocable and where an irrevocable proxy is permitted by law. Except
as otherwise provided by statute, the Articles of Incorporation or these
By-Laws, any corporate action to be taken by vote of the stockholders shall be
authorized by a majority of the total votes cast at a meeting of stockholders
by the holders of shares present in person or represented by proxy and
entitled to vote on such action. A plurality of all the votes cast at a
meeting of stockholders duly called and at which a quorum is present shall be
sufficient to elect a director. Each share of stock may be voted for as many
individuals as there are directors to be elected and for whose election the
share is entitled to be voted.

If a vote shall be taken on any question other than the election of
directors, which shall be by written ballot, then unless required by statute
or these By-Laws, or determined by the chairman of the meeting to be
advisable, any such vote need not

<PAGE>4

be by ballot. On a vote by ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and shall state
the number of shares voted.

Section 9. Fixing of Record Date. The Board of Directors may set a
record date for the purpose of determining stockholders entitled to vote at
any meeting of the stockholders. The record date, which may not be prior to
the close of business on the day the record date is fixed, shall be not more
than ninety nor less than ten days before the date of the meeting of the
stockholders. All persons who were holders of record of shares at such time,
and not others, shall be entitled to vote at such meeting and any adjournment
thereof.

Section 10. Inspectors. The Board may, in advance of any meeting
of stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If the inspectors shall not be so appointed or if any of
them shall fail to appear or act, the chairman of the meeting may, and on the
request of any stockholder entitled to vote thereat shall, appoint inspectors.
Each inspector, before entering upon the discharge of his duties, shall take
and sign an oath to execute faithfully the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the voting
powers of each, the number of shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising
in connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the
chairman of the meeting or any stockholder entitled to vote thereat, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them.
No director or candidate for the office of director shall act as inspector of
an election of directors. Inspectors need not be stockholders.

Section 11. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute or the Articles of Incorporation, any action
required to be taken at any annual or special meeting of stockholders, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without
a vote, if the following are filed with the records of stockholders meetings:
(i) a unanimous written consent which sets forth the action and is signed by
each stockholder entitled to vote on the

<PAGE>5

matter and (ii) a written waiver of any right to dissent signed by each
stockholder entitled to notice of the meeting but not entitled to vote
thereat.

ARTICLE III

Board of Directors

Section 1. General Powers. Except as otherwise provided in the
Articles of Incorporation, the business and affairs of the Corporation shall
be managed under the direction of the Board of Directors. All powers of the
Corporation may be exercised by or under authority of the Board of Directors
except as conferred on or reserved to the stockholders by law or by the
Articles of Incorporation or these By-Laws.

Section 2. Number of Directors. Except as otherwise provided in
the Articles of Incorporation, the number of directors shall be fixed from
time to time by resolution of the Board of Directors adopted by a majority of
the Directors then in office; provided, however, that the number of directors
shall in no event be less than two nor more than twelve. Any vacancy created
by an increase in Directors may be filled in accordance with Section 6 of this
Article III. No reduction in the number of directors shall have the effect of
removing any director from office prior to the expiration of his term unless
such Director is specifically removed pursuant to Section 5 of this Article
III at the time of such decrease. Directors need not be stockholders.

Section 3. Election and Term of Directors. Each class of Directors
as to which vacancies exist shall be elected by written ballot at the annual
meeting of stockholders, or a special meeting held for that purpose unless
otherwise provided by statute or the Articles of Incorporation. The term of
office of each director shall be from the time of his election and
qualification until the expiration of the term of his class or until the
annual election of directors next succeeding his election and until his
successor shall have been elected and shall have qualified, or until his
death, or until he shall have resigned, or have been removed as hereinafter
provided in these By-Laws, or as otherwise provided by statute or the Articles
of Incorporation.

Section 4. Resignation. A director of the Corporation may resign
at any time by giving written notice of his resignation to the Board or the
Chairman of the Board or the President or the Secretary. Any such resignation
shall take effect at the time specified therein or, if the time when it

<PAGE>6

shall become effective shall not be specified therein, immediately upon its
receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

Section 5. Removal of Directors. Any director of the Corporation
may be removed for cause (but not without cause) by the stockholders by a vote
of seventy-five percent (75%) of the votes entitled to be cast for the
election of directors.

Section 6. Vacancies. Subject to the provisions of the Investment
Company Act of 1940, as amended, any vacancies in the Board, whether arising
from death, resignation, removal, an increase in the number of directors or
any other cause, shall be filled by a vote of the Board of Directors in
accordance with the Articles of Incorporation.

Section 7. Place of Meetings. Meetings of the Board may be held at
such place as the Board may from time to time determine or as shall be
specified in the notice of such meeting.

Section 8. Regular Meeting. Regular meetings of the Board may be
held without notice at such time and place as may be determined by the Board
of Directors.

Section 9. Special Meetings. Special meetings of the Board may be
called by two or more directors of the Corporation or by the Chairman of the
Board or the President.

Section 10. Telephone Meetings. Members of the Board of Directors
or of any committee thereof may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Subject to
the provisions of the Investment Company Act of 1940, as amended,
participation in a meeting by these means constitutes presence in person at
the meeting.

Section 11. Annual Meeting. The annual meeting of each newly
elected Board of Directors (including a Board of Directors to which only one
class of Directors has been newly elected) shall be held as soon as
practicable after the meeting of stockholders at which directors were elected.
No notice of such annual meeting shall be necessary if held immediately after
the adjournment, and at the site, of the meeting of stockholders. If not so
held, notice shall be given as hereinafter provided for special meetings of
the Board of Directors.

Section 12. Notice of Special Meetings. Notice of

<PAGE>7

each special meeting of the Board shall be given by the Secretary as
hereinafter provided, in which notice shall be stated the time and place of
the meeting. Notice of each such meeting shall be delivered to each director,
either personally or by telephone or any standard form of telecommunication,
at least twenty-four hours before the time at which such meeting is to be
held, or mailed by first-class mail, postage prepaid, addressed to him at his
residence or usual place of business, at least three days before the day on
which such meeting is to be held.

Section 13. Waiver of Notice of Meetings. Notice of any special
meeting need not be given to any director who shall, either before or after
the meeting, sign a written waiver of notice which is filed with the records
of the meeting or who shall attend such meeting. Except as otherwise
specifically required by these By-Laws, a notice or waiver of notice of any
meeting need not state the purpose of such meeting.

Section 14. Quorum and Voting. One-third, but not less than two,
of the members of the entire Board shall be present in person at any meeting
of the Board in order to constitute a quorum for the transaction of business
at such meeting, and except as otherwise expressly required by statute, the
Articles of Incorporation, these By-Laws, the Investment Company Act of 1940,
as amended, or other applicable statute, the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board; provided, however, that the approval of any contract with an
investment adviser or principal underwriter, as such terms are defined in the
Investment Company Act of 1940, as amended, which the Corporation enters into
or any renewal or amendment thereof, the approval of the fidelity bond
required by the Investment Company Act of 1940, as amended, and the selection
of the Corporation's independent public accountants shall each require the
affirmative vote of a majority of the directors who are not interested
persons, as defined in the Investment Company Act of 1940, as amended, of the
Corporation. In the absence of a quorum at any meeting of the Board, a
majority of the directors present thereat may adjourn such meeting to another
time and place until a quorum shall be present thereat. Notice of the time
and place of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and, unless such time and
place were announced at the meeting at which the adjournment was taken, to the
other directors. At any adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally called.

<PAGE>8

Section 15. Organization. The Board may, by resolution adopted by
a majority of the entire Board, designate a Chairman of the Board, who shall
preside at each meeting of the Board. In the absence or inability of the
Chairman of the Board to preside at a meeting, the president or, in his
absence or inability to act, another director chosen by a majority of the
directors present, shall act as chairman of the meeting and preside thereat.
The Secretary (or, in his absence or inability to act, any person appointed by
the Chairman) shall act as secretary of the meeting and keep the minutes
thereof.

Section 16. Written Consent of Directors in Lieu of a Meeting.
Subject to the provisions of the Investment Company Act of 1940, as amended,
any action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting if all
members of the Board or committee, as the case may be, consent thereto in
writing, and the writings or writing are filed with the minutes of the
proceedings of the Board or committee.

Section 17. Compensation. Directors may receive compensation for
services to the Corporation in their capacities as directors or otherwise in
such manner and in such amounts as may be fixed from time to time by the
Board.

Section 18. Investment Policies. It shall be the duty of the Board
of Directors to ensure that the purchase, sale, retention and disposal of
portfolio securities and the other investment practices of the Corporation are
at all times consistent with the investment policies and restrictions with
respect to securities investments and otherwise of the Corporation, as recited
in the Prospectus included in the registration statement of the Corporation
relating to the initial public offering of shares of its capital stock, as
filed with the Securities and Exchange Commission (or as such investment
policies and restrictions may be modified by the Board of Directors or, if
required, by majority vote of the stockholders of the Corporation in
accordance with the Investment Company Act of 1940, as amended) and as
required by the Investment Company Act of 1940, as amended. The Board,
however, may delegate the duty of management of the assets and the
administration of its day to day operations to one or more individuals or
corporate management companies and/or investment advisers pursuant to a
written contract or contracts which have obtained the requisite approvals,
including the requisite approvals of renewals thereof, of the Board of
Directors and/or the stockholders of the Corporation in accordance with the
provisions of the Investment Company Act of 1940, as amended.

<PAGE>9

Section 19. Asset Value. The Board of Directors shall determine
the times and method of calculation of the net asset value per share of the
Fund subject to conditions with the requirements of the Investment Company Act
of 1940, as amended.

Section 20. Certain Members of Board of Directors. For purposes of
Article VIII and Article XII of the Corporation's Articles of Incorporation,
certain members of the Board of Directors (a "Continuing Director") shall mean
any member of the Board who is not a person or affiliate of a person who
enters or proposes to enter into a transaction with the Corporation pursuant
to Section 2(a) of Article VIII of the Articles of Incorporation and has been
a member of the Board for a period of at least twelve months (or since the
commencement of the Corporation's operations, if less than twelve months), or
is a successor to a Continuing Director who is unaffiliated with a person who
enters or proposes to enter into a transaction with the Corporation pursuant
to Section 2(a) of Article VIII of the Articles of Incorporation and is

recommended to succeed a Continuing Director by a majority of the Continuing
Directors then members of the Board.

ARTICLE IV

Committees

Section 1. Committees of the Board. The Board of Directors may
from time to time, by resolution adopted by a majority of the whole Board,
designate one or more committees of the Board, each such committee to consist
of two or more directors and to have such powers and duties as the Board of
Directors may, by resolution, prescribe.

Section 2. General. One-third, but not less than two, of the
members of any committee shall be present in person at any meeting of such
committee in order to constitute a quorum for the transaction of business at
such meeting, and the act of a majority present shall be the act of such
committee. The Board may designate a chairman of any committee and such
chairman or any two members of any committee may fix the time and place of its
meetings unless the Board shall otherwise provide. In the absence or
disqualification of any member of any committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member. The Board shall have the power at any time to change the
membership of any committee, to fill all

<PAGE>10

vacancies, to designate alternate members to replace any absent or
disqualified member, or to dissolve any such committee. Nothing herein shall
be deemed to prevent the Board from appointing one or more committees
consisting in whole or in part of persons who are not directors of the
Corporation; provided, however, that no such committee shall have or may
exercise any authority or power of the Board in the management of the business
or affairs of the Corporation.

ARTICLE V

Officers, Agents and Employees

Section 1. Number of Qualifications. The officers of the
Corporation shall be a President, who shall be a director of the Corporation,
a Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may elect or appoint one or more Vice
Presidents and may also appoint such other officers, agents and employees as
it may deem necessary or proper. Any two or more offices may be held by the
same person, except the offices of President and Vice President, but no
officer shall execute, acknowledge or verify any instrument as an officer in
more than one capacity. Such officers shall be elected by the Board of
Directors each year at its first meeting held after the annual meeting of
stockholders, each to hold office until the meeting of the stockholders and
until his successor shall have been duly elected and shall have qualified, or
until his death, or until he shall have resigned, or have been removed, as
hereinafter provided in these By-Laws. The Board may from time to time elect,
or delegate to the President the power to appoint, such officers (including
one or more Assistant Vice Presidents, one or more Assistant Treasurers and
one or more Assistant Secretaries) and such agents, as may be necessary or
desirable for the business of the Corporation. Such officers and agents shall
have such duties and shall hold their offices for such terms as may be
prescribed by the Board or by the appointing authority.

Section 2. Resignations. Any officer of the Corporation may resign
at any time by giving written notice of resignation to the Board, the Chairman
of the Board, President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt; and,
unless otherwise specified therein, the acceptance of such resignation shall
be necessary to make it effective.

Section 3. Removal of Officer, Agent or Employee. Any

<PAGE>11

officer, agent or employee of the Corporation may be removed by the Board of
Directors with or without cause at any time, and the Board may delegate such
power of removal as to agents and employees not elected or appointed by the
Board of Directors. Such removal shall be without prejudice to such person's
contract rights, if any, but the appointment of any person as an officer,
agent or employee of the Corporation shall not of itself create contract
rights.

Section 4. Vacancies. A vacancy in any office, either arising from
death, resignation, removal or any other cause, may be filled for the
unexpired portion of the term of the office which shall be vacant, in the
manner prescribed in these By-Laws for the regular election or appointment to
such office.

Section 5. Compensation. The compensation of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer in respect of other officers under his control.

Section 6. Bonds or Other Security. If required by the Board, any
officer, agent or employee of the Corporation shall give a bond or other
security for the faithful performance of his duties, in such amount and with
such surety or sureties as the Board may require.

Section 7. President. The President shall be the chief executive
officer of the Corporation. In the absence of the Chairman of the Board (or
if there be none), he shall preside at all meetings of the stockholders and of
the Board of Directors. He shall have, subject to the control of the Board of
Directors, general charge of the business and affairs of the Corporation. He
may employ and discharge employees and agents of the Corporation, except such
as shall be appointed by the Board, and he may delegate these powers.

Section 8. Vice President. Each Vice President shall have such
powers and perform such duties as the Board of Directors or the President may
from time to time prescribe.

Section 9. Treasurer. The Treasurer shall:

(a) have charge and custody of and be responsible for, all the
funds and securities of the Corporation, except those which the Corporation
has placed in the custody of a bank or trust company or member of a national
securities exchange (as that term is defined in the Securities Exchange Act of
1934, as amended) pursuant to a written agreement designating such bank or
trust company or member of a national securities exchange as a

<PAGE>12

custodian or sub-custodian of the property of the Corporation;

(b) keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation;

(d) receive, and give receipts for, moneys due and payable, to
the Corporation from any source whatsoever;

(e) disburse the funds of the Corporation and supervise the
investment of its funds as ordered or authorized by the Board, taking proper
vouchers therefor; and

(f) in general, perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the Board or the President.

Section 10. Secretary. The Secretary shall:

(a) keep or cause to be kept in one or more books provided for
the purpose, the minutes of all meetings of the Board, the committees of the
Board and the stockholders;

(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;

(c) be custodian of the records and the seal of the
Corporation and affix and attest the seal to all stock certificates of the
Corporation (unless the seal of the Corporation on such certificates shall be
a facsimile, as hereinafter provided) and affix and attest the seal to all
other documents to be executed on behalf of the Corporation under its seal;

(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and

(e) in general, perform all the duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Board or the President.

Section 11. Delegation of Duties. In case of the absence of any
officer of the Corporation, or for any other reason that the Board may deem
sufficient, the Board may confer for the time being the powers or duties, or
any of them, of such

<PAGE>13

officer upon any other officer or upon any director.

ARTICLE VI

Indemnification

Each officer and director of the Corporation shall be indemnified by
the Corporation to the full extent permitted under the General Laws of the
State of Maryland, including the advancing of expenses, except that such
indemnity shall not protect any such person against any liability to the
Corporation or any stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Absent a court determination that an officer or director seeking
indemnification was not liable on the merits or guilty of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office, the decision by the Corporation to indemnify such
person must be based upon the reasonable determination of independent legal
counsel or nonparty independent directors, after review of the facts, that
such officer or director is not guilty of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of his office.

The Corporation may purchase insurance on behalf of an officer or
director protecting such person to the full extent permitted under the General
Laws of the State of Maryland, from liability arising from his activities as
officer or director of the Corporation. The Corporation, however, may not
purchase insurance on behalf of any officer or director of the Corporation
that protects or purports to protect such person from liability to the
Corporation or to its stockholders to which such officer or director would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.

The Corporation may indemnify or purchase insurance to the extent
provided in this Article VI on behalf of an employee or agent who is not an
officer or director of the Corporation.

The indemnification and other rights provided by this Article shall
continue as to a person who has ceased to be a director or officer and shall
enure to the benefit of the heirs, executors and administrators of such
person.

<PAGE>14

ARTICLE VII

Capital Stock

Section 1. Stock Certificates. Each holder of stock of the
Corporation shall be entitled upon request to have a certificate or
certificates, in such form as shall be approved by the Board, representing the
number of shares of the Corporation owned by him, provided, however, that
certificates for fractional shares will not be delivered in any case. The
certificates representing shares of stock shall be signed by or in the name of
the Corporation by the President or a Vice President and by the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer and sealed
with the seal of the Corporation. Any or all of the signatures or the seal on
the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate shall be issued, it may be issued by the Corporation
with the same effect as if such officer, transfer agent or registrar were
still in office at the date of issue.

Section 2. Books of Accounts and Record of Stockholders. There
shall be kept at the principal executive office of the Corporation correct and
complete books and records of account of all the business and transactions of
the Corporation. There shall be made available upon request of any
stockholder, in accordance with Maryland law, a record containing the number
of shares of stock issued during a specified period not to exceed twelve
months and the consideration received by the Corporation for each such share.

Section 3. Transfers of Shares. Transfers of shares of stock of
the Corporation shall be made on the stock records of the Corporation only by
the registered holder thereof, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a
transfer agent or transfer clerk, and on surrender of the certificate or
certificates, if issued, for such Shares properly endorsed or accompanied by a
duly executed stock transfer power and the payment of all taxes thereon.
Except as otherwise provided by law, the Corporation shall be entitled to
recognize the exclusive rights of a person in whose name any share or shares
stand on the record of stockholders as the owner of such share or shares for
all purposes, including, without limitation, the rights to receive dividends
or other distributions, and to vote as such owner, and the Corporation shall
not be bound to recognize any equitable or legal claim to or interest in any
such share or shares on the part of any other person.

<PAGE>15

Section 4. Regulations. The Board may make such additional rules
and regulations, not inconsistent with these By-Laws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation. It may appoint, or authorize any officer or
officers to appoint, one or more transfer agents or one or more transfer
clerks and one or more registrars and may require all certificates for shares
of stock to bear the signature or signatures of any of them.

Section 5. Lost, Destroyed or Mutilated Certificates. The holder
of any certificates representing shares of stock of the Corporation shall
immediately notify the Corporation of any loss, destruction or mutilation of
such certificate, and the Corporation may issue a new certificate of stock in
the place of any certificate theretofore issued by it which the owner thereof
shall allege to have been lost or destroyed or which shall have been
mutilated, and the Board may, in its discretion, require such owner or his
legal representatives to give to the Corporation a bond in such sum, limited
or unlimited, and in such form and with such surety or sureties, as the Board
in its absolute discretion shall determine, to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss
or destruction of any such certificate, or issuance of a new certificate.
Anything herein to the contrary notwithstanding, the Board, in its absolute
discretion, may refuse to issue any such new certificate, except pursuant to
legal proceedings under the laws of the State of Maryland.

Section 6. Fixing of a Record Date for Dividends and
Distributions. The Board may fix, in advance, a date not more than ninety
days preceding the date fixed for the payment of any dividend or the making of
any distribution. Once the Board of Directors fixes a record date as the
record date for the determination of the stockholders entitled to receive any
such dividend or distribution, in such case only the stockholders of record at
the time so fixed shall be entitled to receive such dividend or distribution.

Section 7. Information to Stockholders and Others. Any stockholder
of the Corporation or his agent may inspect and copy during usual business
hours the Corporation's By-Laws, minutes of the proceedings of its
stockholders, annual statements of its affairs, and voting trust agreements on
file at its principal office.

<PAGE>16

ARTICLE VIII

Seal

The seal of the Corporation shall be circular in form and shall
bear, in addition to any other emblem or device approved by the Board of
Directors, the name of the Corporation, the year of its incorporation and the
words "Corporate Seal" and "Maryland." Said seal may be used by causing it or
a facsimile thereof to be impressed or affixed or in any other manner
reproduced.

ARTICLE IX

Fiscal Year

Unless otherwise determined by the Board, the fiscal year of the
Corporation shall end on the 30th of September.

ARTICLE X

Depositories and Custodians

Section 1. Depositories. The funds of the Corporation shall be
deposited with such banks or other depositories as the Board of Directors of
the Corporation may from time to time determine.

Section 2. Custodians. All securities and other investments shall
be deposited in the safe keeping of such banks or other companies as the Board
of Directors of the Corporation may from time to time determine. Every
arrangement entered into with any bank or other company for the safe keeping
of the securities and investments of the Corporation shall contain provisions
complying with the Investment Company Act of 1940, as amended, and the general
rules and regulations thereunder.

ARTICLE XI

Execution of Instruments

Section 1. Checks, Notes, Drafts, etc. Checks, notes, drafts,
acceptances, bills of exchange and other orders or obligations for the payment
of money shall be signed by such officer or officers or person or persons as
the Board of Directors by resolution shall from time to time designate.

<PAGE>17

Section 2. Sale or Transfer of Securities. Stock certificates,
bonds or other securities at any time owned by the Corporation may be held on
behalf of the Corporation or sold, transferred or otherwise disposed of
subject to any limits imposed by these By-Laws and pursuant to authorization
by the Board and, when so authorized to be held on behalf of the Corporation
or sold, transferred or otherwise disposed of, may be transferred from the
name of the Corporation by the signature of the President or a Vice President
or the Treasurer or pursuant to any procedure approved by the Board of
Directors, subject to applicable law.

ARTICLE XII

Independent Public Accountants

The firm of independent public accountants which shall sign or
certify the financial statements of the Corporation which are filed with the
Securities and Exchange Commission shall be selected annually by the Board of
Directors and ratified by the stockholders in accordance with the provisions
of the Investment Company Act of 1940, as amended.

ARTICLE XIII

Annual Statement

The books of account of the Corporation shall be examined by an
independent firm of public accountants at the close of each annual period of
the Corporation and at such other times as may be directed by the Board. A
report to the stockholders based upon each such examination shall be mailed to
each stockholder of the Corporation of record on such date with respect to
each report as may be determined by the Board, at his address as the same
appears on the books of the Corporation. Such annual statement shall also be
available at the annual meeting of stockholders and be placed on file at the
Corporation's principal office in the State of Maryland. Each such report
shall show the assets and liabilities of the Corporation as of the close of
the annual or quarterly period covered by the report and the Securities in
which the funds of the Corporation were then invested. Such report shall also
show the Corporation's income and expenses for the period from the end of the
Corporation's preceding fiscal year to the close of the annual or quarterly
period covered by the report and any other information required by the
Investment Company Act of 1940, as amended, and shall set forth such other
matters as the Board or

<PAGE>18

such firm of independent public accountants shall determine.

ARTICLE XIV

Amendments

The Board of Directors, by affirmative vote of a majority thereof,
shall have the exclusive right to amend, alter or repeal these By-Laws at any
regular or special meeting of the Board of Directors, except any particular
By-Law which is specified as not subject to alteration or repeal by the Board
of Directors, subject to the requirements of the Investment Company Act of
1940, as amended.

<PAGE>19

ARTICLE XIII

AMENDMENT

IN WITNESS WHEREOF, the undersigned incorporator of Greenwich Street
Income Fund Inc. hereby executes the foregoing Articles of Incorporation and
acknowledges the same to be his act.

Dated the 29th day of March, 1994.

/s/Gerald W. Wheeler
Gerald W. Wheeler