UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X] Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-12
SMITH BARNEY SECTOR SERIES INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
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SMITH BARNEY SECTOR SERIES INC.:
SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATIONS FUND
125 BROAD STREET, NEW YORK, NEW YORK 10004
February , 2003
DEAR STOCKHOLDER:
A Special Meeting of stockholders (the "Special Meeting") of Smith Barney
Global Media & Telecommunications Fund (the "Fund"), a separate series of Smith
Barney Sector Series Inc. (the "Company"), will be held at The Citigroup
Center, 153 East 53/rd/ Street, New York, New York, 14th Floor, on April 2,
2003, at 10 a.m.
At the Special Meeting, you will be asked to approve a plan to liquidate the
Fund. The Board of Directors has determined that a complete liquidation of the
Fund is advisable and in the best interests of the Fund and its stockholders.
We are preparing to liquidate the Fund because of its relatively small size and
its limited prospects for growth of assets. The Board's reasons for
recommending this course are described more fully in the enclosed proxy
statement, which you should consider carefully. The Board of Directors
recommends you to approve the Plan of Liquidation adopted by the Board. As a
stockholder, you cast one vote for each share you own.
Holders of record of shares of the Fund at the close of business on February
3, 2003 are entitled to vote at the Special Meeting and at any adjournments
thereof.
If the stockholders approve the recommendation to liquidate the Fund, the
Fund will send you the proceeds of the liquidation of your account. Once you
receive your proceeds, you may pursue any investment option you wish.
Your vote is important. PLEASE TAKE A MOMENT TO SIGN AND RETURN YOUR PROXY
CARD(S) IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. If you prefer, you can
fax the proxy card (both sides) to (800) ________ __or vote by telephone by
calling (800) __________ using the xx-digit control number located on your
proxy card or vote through the Internet by going to www.[website].com using the
xx-digit control number on your proxy card. The Fund may also solicit proxies
from shareholders by letter, telephone and/or telegraph. Voting by fax,
telephone or through the Internet will reduce the time and costs associated
with the proxy solicitation. When the Fund records proxies by telephone or
through the Internet, it will use procedures designed to (i) authenticate
shareholders' identities, (ii) allow shareholders to authorize the voting of
their shares in accordance with their instructions and (iii) confirm that their
instructions have been properly recorded. For more information please call
1-800-451-2010.
Thank you for your participation in the Special Meeting.
Sincerely,
/S/ R. JAY GERKEN
Chairman
SMITH BARNEY SECTOR SERIES INC.:
SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATIONS FUND
125 BROAD STREET, NEW YORK, NEW YORK 10004
QUESTIONS & ANSWERS
These Questions & Answers are intended to briefly summarize for you the
information contained in the attached Proxy Statement. For more detailed
information about the proposal to be voted on and instructions on how you can
vote, please refer to the Proxy Statement and accompanying materials. No matter
how many shares you own, your timely vote is very important! Thank you in
advance for your vote.
WHEN AND WHERE IS THE SPECIAL MEETING?
A Special Meeting of stockholders will be held at The Citigroup Center, 153
East 53rd Street, New York, New York, 14th Floor, on April 2, 2003 at 10:00 a.m.
WHY IS THE LIQUIDATION BEING PROPOSED?
The Board of Directors believes that it would be in the best interest of
Fund stockholders to approve the liquidation of the Fund. Accordingly, the
Board of Directors has recommended liquidating the Fund's assets and
distributing the proceeds to Fund stockholders and then terminating the Fund
under state law. The reasons for the recommendation include, among other
reasons, the low level of the Fund's assets and the distributor's belief that
significant net new sales are not likely, as well as the fact that the expenses
of operating the Fund remain very high as a result of the Fund's low asset
levels.
HOW WILL APPROVAL OF THIS PROPOSAL AFFECT ME?
If the proposal to liquidate the Fund is approved, the Fund's assets will be
liquidated and the proceeds will be distributed to Fund stockholders.
Stockholders should carefully read and consider the discussion of the proposal
in the Proxy Statement.
IF THE FUND LIQUIDATES, WHAT WILL BE THE FEDERAL INCOME TAX CONSEQUENCES FOR ME?
In connection with the liquidation of the Fund, the Fund will make a
liquidating distribution. The liquidating distribution that you receive will be
in exchange for your shares and will generally be taxable as a capital gain to
the extent that the distribution exceeds your basis in your shares, or capital
loss to the extent your basis in your shares exceeds the distribution. The
capital gain or loss (if any) that you realize in the liquidating distribution
will be recognized by you in your taxable year in which the distribution is
received. Any such capital gain or loss will be a long-term capital gain or
loss if you have owned your shares for more than one year and will be a
short-term capital gain or loss if you have owned your shares for one year or
less. You are urged to consult you own tax advisor regarding the tax
consequences to you, in your particular circumstances, of the receipt of the
liquidating distribution.
MAY I REDEEM MY SHARES PRIOR TO THE LIQUIDATION?
Yes. You may redeem all or any portion of your shares at any time through
the date shareholder approval of the Plan of Liquidation is obtained, which is
expected to occur on or about April 2, 2003.
WILL MY VOTE MAKE A DIFFERENCE AND HOW CAN I VOTE?
Yes. Your vote is needed to ensure that the proposal can be acted upon. Your
immediate response will help save on delays of any further solicitations for a
shareholder vote. We encourage you to participate in the governance of the Fund.
You can vote by completing and signing the enclosed proxy card(s) and
mailing it in the enclosed postage-paid envelope. Stockholders will be able to
vote their shares by touchtone telephone or by Internet by following the
instructions on the proxy card accompanying this Proxy Statement. To vote via
the Internet or by telephone, please access the website or call the toll-free
number listed on your proxy card or noted in the enclosed voting instruction.
To vote via the Internet or by telephone you will need the "control number"
that appears on your proxy card. Stockholders can also vote in person at the
meeting.
HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
After careful consideration, the Board of Directors unanimously recommends
that you vote "FOR" the proposed liquidation of the Fund.
HOW DO I CONTACT YOU?
If you have any questions, call the Fund toll free at 1-800-451-2010.
SMITH BARNEY SECTOR SERIES INC.
SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATIONS FUND
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
February , 2003
TO THE STOCKHOLDERS OF SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATION FUND:
A Special Meeting of Stockholders of Smith Barney Global Media &
Telecommunication Fund (the "Fund"), a separate series of Smith Barney Sector
Series Inc. (the "Company"), will be held at The Citigroup Center, 153 East
53rd Street, New York, New York, 14th Floor, on April 2, 2003, at 10 a.m., for
the purpose of considering and voting upon:
1. The approval of a Plan of Liquidation (Proposal 1); and
2. Any other business that may properly come before the meeting or any
adjournment(s) or postponement(s) thereof.
The Board of Directors recommends that you vote in favor of Proposal 1.
The close of business on February 3, 2003 has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at,
the Special Meeting of Stockholders or any adjournment(s) or postponement(s)
thereof. You are invited to attend the Special Meeting, but if you cannot do
so, please complete and sign the enclosed proxy, and return it in the
accompanying envelope as promptly as possible. You may also vote via telephone,
fax or the Internet. Any Stockholder attending the Special Meeting may vote in
person even though a proxy has already been returned. You may change your vote
even though a proxy has been returned by written notice to the Fund by
submitting a subsequent proxy using the mail, telephone, fax or the Internet or
by voting in person at the Special Meeting. Your vote is important no matter
how many shares you own.
If you have any questions about the proposals to be voted on, or need help
completing the proxy card or otherwise voting, please call 1-800-451-2010.
By Order of the Board of Directors,
CHRISTINA T. SYDOR
Secretary
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense involved in validating your vote if you fail
to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration on the
proxy card.
3. Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp.............................. ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp.............................. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer..... John Doe
(4) ABC Corp. Profit Sharing Plan......... John Doe, Trustee
Trust Accounts
(1) ABC Trust............................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee a/t/d 12/28/78... Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA......... John B. Smith
(2) John B. Smith......................... John B. Smith, Jr., Executor
SMITH BARNEY SECTOR SERIES INC.:
SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATIONS FUND
125 BROAD STREET, NEW YORK, NEW YORK 10004
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 2, 2003
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Smith Barney Sector
Series Inc. (the "Company") for use at a special meeting of stockholders of
Smith Barney Global Media & Telecommunications Fund (the "Fund"), a separate
series of the Company and at any adjournment(s) thereof (the "Meeting"). The
Meeting will be held at The Citigroup Center, 153 East 53rd Street, New York,
New York, 14th Floor, on April 2, 2003, at 10 a.m. for the purposes set forth
in the accompanying Notice of Special Meeting of Stockholders. This proxy
statement and the accompanying proxy card are first being mailed to
stockholders on or about February 13, 2003.
Stockholders who execute proxies retain the right to revoke them in person
at the Meeting or by written notice received by the Secretary of the Company at
any time before they are voted. Unrevoked proxies will be voted in accordance
with the specifications thereon and, unless specified to the contrary, will be
voted FOR the proposal set forth below (the "Proposal"). The close of business
on February 3, 2003 has been fixed as the record date (the "Record Date") for
the determination of stockholders entitled to notice of, and to vote at, the
Meeting. Each stockholder is entitled to one vote for each full share (a
"Share") of common stock of the Fund and an appropriate fraction of a vote for
each fractional Share held of record on the Record Date, with no Shares having
cumulative voting rights. The number of Shares of the Fund issued and
outstanding as of the Record Date is .
A quorum is constituted by the presence in person or by proxy of the holders
of record of a majority of the outstanding Shares of the Fund entitled to vote
at the Meeting. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present but sufficient votes to approve or reject
the Proposal in this proxy statement are not received, the persons named as
proxies may propose one or more adjournments of the Meeting to a date not more
than 120 days after the Record Date to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
Shares present at the Meeting in person or by proxy. The persons named as
proxies will vote those proxies, which they are entitled to vote FOR or AGAINST
any such proposal at their discretion.
The principal executive office of the Company is located at 125 Broad
Street, New York, New York 10004.
Smith Barney Fund Management LLC ("SBFM"), whose principal business address
is 399 Park Avenue, New York, New York 10022, serves as investment manager to
the Fund. SBFM is a wholly-owned subsidiary of Citigroup Inc. Citigroup Asset
Management Ltd. ("CAM"), whose principal business address is Citigroup Centre,
Canada Square, Canary Wharf, London, E14 5LB, serves as investment subadviser
to the Fund. CAM is a wholly-owned subsidiary of Citigroup Inc.
1
PROPOSAL 1:
APPROVAL OF THE PLAN OF LIQUIDATION
BACKGROUND
The Fund commenced operations on August 14, 2000. The Fund seeks long-term
capital appreciation by investing at least 80% of the value of its net assets,
plus any borrowings for investment purposes, in securities of companies
principally engaged in the development, production, sale and distribution of
goods or services used in the broadcast and media industries, as well as
companies engaged in design, development, manufacture, distribution, or sale of
communications services and equipment and companies that are involved in
supplying equipment or services to such companies. The media and
telecommunications sector includes, without limitation, advertising companies;
companies that own, operate, or broadcast free or pay television, radio, or
cable stations, theaters or film studios; television and movie programming,
broadcasting and Internet access. SBFM receives a monthly management fee at an
annual rate of 0.80%. From time to time SBFM or its affiliates have waived fees
payable to them in whole or in part. Any such waiver will reduce the expense of
the Fund, and accordingly, have a favorable impact on its performance.
REASONS FOR THE PROPOSAL
Notwithstanding the marketing of the Fund's Shares, growth in the Fund's
assets has been slow. During the period from commencement of operations through
December 31, 2002, assets of the Fund reached a level of only approximately
$4.5 million. Marketing efforts, including the waiver of fees by Fund service
providers and the assumption of Fund expenses by SBFM, did not significantly
increase the size of the Fund.
Sales of the Fund's Shares have not been sufficient to allow the Fund to
reach a size adequate, in the judgment of the Board, to spread expenses over a
sufficient asset base to realize a satisfactory return to stockholders. Since
the inception of the Fund, SBFM has waived all or a portion of its fees and
assumed a significant portion of the expenses of the Fund. In the absence of
such waiver and assumption, the Fund's return to stockholders would have been
significantly lower.
The officers of the Fund investigated what, if any, additional steps or
alternative courses would best serve the interest of stockholders. The Fund
sought to determine whether mergers or transfers of assets would be possible,
and if it would produce desirable results for stockholders. After reviewing
current market conditions, the relatively small size of the Fund and the time
required to effect a transaction, management of the Fund believed that the
expense of a merger with or transfers of assets to another mutual fund are
greater than the benefits stockholders of the Fund could expect to realize from
such a transaction, even if a fund with a comparable investment focus that
would be willing to engage in such transaction could be identified.
At a meeting held on January 29, 2003, the Board considered various
alternatives for the Fund, including (i) increasing the size of the Fund
through special marketing efforts, (ii) merging the Fund with another
investment company with similar focus, and (iii) liquidating the Fund. The
Board believed that further marketing efforts would not be successful in
increasing the Fund's size sufficiently to permit the Fund to assume the
payment of all its expenses. The merger of the Fund with a similar investment
company was not considered a viable option.
2
The Board also reviewed the Fund's expenses that had been assumed by SBFM
during the life of the Fund, the efforts and expenses of the Distributor to
distribute shares of the Fund, and the effect of the operating expenses on the
historic and anticipated returns to stockholders. The Board of Directors
considered that SBFM had not been able to collect or retain any significant
fees during the life of the Fund, that there would be no prospect that this
would change in the near future. Because the Fund has not been able to achieve
greater total assets, the operating expense ratio for the Fund's shares has
remained relatively high. SBFM has waived all of its investment advisory fees
and administration fees for the fiscal year ended October 31, 2002. In
addition, SBFM reimbursed the Fund for expenses of $68,944. After these fee
waivers and reimbursement arrangements, the operating expense ratio for the
fiscal year ended October 31, 2002 was 1.50% for Class A shares, 2.25% for
Class B shares and 2.25% for Class L shares. There were no Class Y shares
outstanding during the last fiscal year. Without such fee waivers and
reimbursements by SBFM, the operating expense ratio would have been 3.61% for
Class A shares, 4.43% for Class B shares and 4.37% for Class L shares.
The Board of Directors concluded that an increase in Fund expenses
attributable to the likely discontinuance of the fee waiver and assumption of
expenses in the future, especially when added to the expenses of the Fund
presently paid directly by the Fund, would significantly reduce the Fund's
returns. Moreover, the presence of larger funds with similar objectives better
able to operate on an efficient basis and provide higher returns to
stockholders, make it unlikely that the Fund could achieve a significant
increase in asset size and achieve economies of scale. The Board of Directors
therefore concluded that it would be in the best interest of the stockholders
of the Fund to liquidate the Fund promptly. Accordingly, at the January 29th
meeting of the Board of Directors of the Company, the Directors approved the
liquidation and termination of the Fund.
SUMMARY OF PLAN OF LIQUIDATION
The Board of Directors has approved the Plan of Liquidation (the "Plan")
attached as Exhibit A, which is summarized below:
1. Adoption of the Plan and Termination of Business Operations. The
effective date of the Plan (the "Effective Date") shall be the date on which
the Plan is adopted by stockholders. The Fund will cease to conduct business
as soon as reasonably practicable following the Effective Date.
2. Liquidation and Distribution of Assets. As soon as practicable after
the Effective Date, depending on market conditions and consistent with the
terms of the Plan, SBFM shall have the authority to engage in such
transactions as may be appropriate for the Fund's liquidation and
termination. The Fund shall set aside a reserve for any liabilities,
including contingent liabilities, that it may incur.
3. Distribution to Stockholders. As soon as practicable after the
Effective Date, the Fund shall liquidate and distribute pro rata on the date
of liquidation to its stockholders of record on the Effective Date all of
its remaining assets of the Fund in complete cancellation and redemption of
all outstanding shares of the Fund.
4. Amendment or Abandonment of the Plan. The Board is authorized to
modify or amend the Plan at any time without stockholder approval if it
determines that such action would be in the best interests of the Fund and
stockholders. However, any amendment which the Board determines would be
materially and adversely prejudicial to the interest of stockholders will be
submitted to the stockholders for approval. In addition, the Board may
abandon the Plan without approval at any time if it determines this to be in
the best interests of the Fund and stockholders.
5. Expenses. The expenses incurred in carrying out the terms of the
Plan shall be borne by SBFM or its affiliates.
3
FEDERAL INCOME TAX CONSEQUENCES
The following summary provides general information with regard to the
federal income tax consequences to stockholders on receipt of the Liquidation
Distribution from the Company pursuant to the provisions of the Plan. However,
the Company has not sought a ruling from the Internal Revenue Service (the
"Service") with respect to the liquidation of the Fund. The statements below
are, therefore, not binding upon the Service, and there can be no assurance
that the Service will concur with this summary or that the tax consequences to
any stockholder upon receipt of the Liquidation Distribution will be as set
forth below.
The information below is only a summary of some of the federal tax
consequences generally affecting the Company and its individual U.S.
stockholders resulting from the liquidation of the Fund. This summary does not
address the particular federal income tax consequences applicable to
stockholders other than U.S. individuals nor does it address state or local tax
consequences. The tax consequences discussed herein may affect stockholders
differently depending on their particular tax situations unrelated to the
Liquidation Distribution, and accordingly, this summary is not a substitute for
careful tax planning on an individual basis. Stockholders are encouraged to
consult their personal tax advisers concerning their particular tax situations
and the impact thereon on receiving the Liquidation Distribution. The receipt
of the Liquidation Distribution may result in tax consequences that are
unanticipated by stockholders. This summary is based on the tax laws and
regulations in effect on the date of this Proxy Statement, all of which are
subject to change by legislative or administrative action, possibly with
retroactive effect.
For federal income tax purposes, a stockholder's receipt of the Liquidation
Distribution will be a taxable event and will be treated as a sale of the
stockholder's shares of the Fund in exchange for the Liquidation Distribution.
Each stockholder will recognize a gain or loss in an amount equal to the
difference between the Liquidation Distribution he or she receives from the
Company and the adjusted tax basis in his or her shares. If the shares are held
as a capital asset, the gain or loss will generally be characterized as a
capital gain or loss. If the shares have been held for more than one year, any
such capital gain will constitute a long-term capital gain taxable to
individual stockholders at a maximum rate of 20%, and any loss will constitute
a long-term capital loss. If at the time of receiving the Liquidation
Distribution, the stockholder has held the shares for not more than one year,
any such capital gain or loss will generally be a short-term capital gain or
loss. If, however, the stockholder has held the shares for six months or less
and has received long-term capital gains distributions with respect to the
shares, any loss realized will be a long-term capital loss to the extent of
such long-term capital gains distributions.
If a stockholder has failed to furnish a correct taxpayer identification
number or has failed to certify that he or she has provided a correct taxpayer
identification number and that he or she is not subject to "backup
withholding," the stockholder may be subject to a 30% backup withholding tax
with respect to the Liquidation Distribution. An individual's taxpayer
identification number is his or her social security number. The backup
withholding tax is not an additional tax and may be credited against a
taxpayer's federal income tax liability.
Stockholders will be notified of their respective shares of ordinary and
capital gains dividends for the Fund's final fiscal year in normal
tax-reporting fashion.
APPRAISAL RIGHTS
Stockholders will not be entitled to appraisal rights under Maryland law in
connection with the Plan.
4
REDEMPTION OR EXCHANGE OF SHARES
The Fund has been closed to purchases of new Shares, except for dividend
reinvestment purchases. Of course, you may still redeem all or any portion of
your Shares at any time through the date Stockholder approval of the Plan of
Liquidation is obtained, which is expected to occur on or about April 2, 2003.
You are also eligible to exchange your shares for, or apply the proceeds you
receive upon redemption of your shares or liquidation of the Fund towards, the
purchase of corresponding Classes of shares of any Smith Barney open-end
investment company (mutual fund) without the imposition of a sales charge. This
privilege is available for a limited period expiring 30 days after the
liquidation of the Fund. If you wish to exercise this privilege before receipt
of your liquidation distribution, please call the Fund at 1-800-451-2010 or the
Smith Barney Shareholder Services Group at 1-800-451-2010. If you wish to
exercise this privilege after receipt of your liquidation distribution, please
call the Smith Barney Shareholder Services Group at 1-800-451-2010.
REQUIRED VOTE
Approval of Proposal 1 requires the affirmative vote of a majority of the
Fund's outstanding shares of common stock as of the Record Date. The Board
recommends that the stockholders vote FOR the proposed liquidation of the Fund
pursuant to the provisions of the Plan of Liquidation. The effect of
abstentions and Broker Non-Votes, as defined below, is the same as a vote cast
against the Proposal. However, abstentions and Broker Non-Votes will be
recorded as present at the Meeting for the determination of a quorum. "Broker
Non-Votes" are shares held in the name of a broker or nominee for whom an
executed proxy is received by the Fund, but are not voted on the Proposal
because voting instructions have not been received from the beneficial owners
or persons entitled to vote and the broker or nominee does not have
discretionary voting power.
If the stockholders do not approve the proposal, the Fund will continue to
exist as a registered investment company and operate in accordance with its
stated objective and policies. The Board would then meet to consider what, if
any, steps to take in the best interests of stockholders.
ADDITIONAL INFORMATION
INVESTMENT MANAGER, PRINCIPAL UNDERWRITER AND ADMINISTRATOR
The Fund's investment manager is SBFM, located at 399 Park Avenue, New York,
New York. Salomon Smith Barney Inc. serves as the distributor of the Fund. Its
principal address is 388 Greenwich Street, New York, New York 10013.
BENEFICIAL OWNERSHIP
Exhibit B contains information about the beneficial ownership by
stockholders of 5% or more of the Fund's outstanding shares, as of the Record
Date. On that date, the Directors and officers of the Company, individually and
as a group, owned beneficially less than 1% of the Fund's outstanding shares.
STOCKHOLDER PROPOSALS
The Fund is not required, and does not intend, to hold regularly scheduled
annual meetings of stockholders. Stockholders wishing to submit proposals for
consideration for inclusion in a proxy statement for a subsequent
5
stockholder meeting should send their written proposal to the Secretary of the
Fund at 300 First Stamford Place, Fourth Floor, Stamford, Connecticut 06902, in
order that they are received within a reasonable time before any such meeting.
ANNUAL AND SEMI-ANNUAL REPORTS TO STOCKHOLDERS
The Fund will furnish, without charge, a copy of the Fund's most recent
annual or semi-annual report to a stockholder of the Fund upon request. Any
such request should be directed to the Fund's transfer agent, Citicorp Trust
Bank, fsb. at 1-800-451-2010. The transfer agent's principal address is 125
Broad Street, New York, New York 10004.
OTHER BUSINESS
The Board of Directors does not know of any other matter which may come
before the Meeting. If, however, any other matters properly come before the
Meeting, it is the intention of the persons named in the accompanying proxy
card to vote thereon in accordance with their judgment.
EXPENSES OF PROXY SOLICITATION
The costs of preparing, assembling and mailing material in connection with
this solicitation of proxies will be borne by SBFM or one of its affiliates.
Proxies may also be solicited personally by officers of the Fund and by regular
employees of SBFM or their respective affiliates, or other representatives or
agents of the Fund, in addition to the use of mails. Brokerage houses, banks
and other fiduciaries may be requested to forward proxy solicitation material
to their principals to obtain authorization for the execution of proxies, and
they will be reimbursed by SBFM or one of its affiliates for out-of-pocket
expenses incurred in this connection.
February , 2003
6
EXHIBIT A
PLAN OF LIQUIDATION OF
GLOBAL MEDIA & TELECOMMUNICATIONS FUND
OF
SMITH BARNEY SECTOR SERIES INC.
Smith Barney Sector Series Inc., a Maryland corporation (the "Company"),
shall proceed to a complete liquidation of the Smith Barney Global Media &
Telecommunications Fund (the "Fund"), a series of the Company, according to the
procedures set forth in this Plan of Liquidation (the "Plan"). The Plan has
been approved by the Board of Directors of the Company (the "Board") as being
advisable and in the best interests of the Fund and its stockholders. The Board
has directed that this Plan be submitted to the holders of the outstanding
voting shares of the Fund (the "Stockholders"), voting in the aggregate without
regard to class, for their adoption or rejection at a special meeting of the
Stockholders of the Fund and has authorized the distribution of a Proxy
Statement in connection with the solicitation of proxies for that meeting (the
"Proxy Statement"). Upon Stockholder approval of the Plan, the Fund shall be
completely liquidated and terminated in accordance with the requirements of the
Maryland General Corporation Law (the "MGCL"), the Company's Articles of
Incorporation and the Internal Revenue Code of 1986, as amended (the "Code"),
as follows:
1. Adoption of Plan. The effective date of the Plan (the "Effective
Date") shall be the date on which the Plan is approved by the Stockholders.
2. Liquidation and Distribution of Assets. As soon as practicable after
the Effective Date depending on market conditions and consistent with the
terms of this Plan, the Fund and the Fund's investment adviser, Smith Barney
Fund Management LLC ("SBFM"), shall have the authority to engage in such
transactions as may be appropriate for the Fund's liquidation and
termination, including, without limitation, the consummation of the
transactions described in the Proxy Statement.
3. Provisions for Liabilities. The Fund shall pay or discharge or set
aside a reserve fund for, or otherwise provide for the payment or discharge
of, any liabilities and obligations of the Fund, including, without
limitation, contingent liabilities, all from Fund assets.
4. Distribution to Stockholders. As soon as practicable after the
Effective Date, the Fund shall liquidate and distribute pro rata on the date
of its liquidation (the "Liquidation Date") to the Stockholders of record on
the Effective Date all of the remaining assets of the Fund in complete
cancellation and redemption of all the outstanding shares of the Fund,
except for cash, bank deposits or cash equivalents in an estimated amount
necessary to (i) discharge any unpaid liabilities and obligations of the
Fund on the Fund's books on the Liquidation Date, including, but not limited
to, income dividends and capital gains distributions, if any, payable
through the Liquidation Date, and (ii) pay such contingent liabilities as
the Board shall reasonably deem to exist against the assets of the Fund on
the Fund's books.
Each Stockholder not holding stock certificates of the Fund will receive a
Liquidating Distribution equal to the Stockholder's proportionate interest in
the net assets of the Fund. Each Stockholder holding stock certificates of the
Fund will receive a confirmation showing such Stockholder's proportionate
interest in the net assets of the Fund with an advice that such Stockholder
will be paid in cash upon return of the stock certificate. All Stockholders
will receive information concerning the sources of the Liquidation Distribution.
A-1
5. Articles of Amendment. Subject to Stockholder approval, following
the complete liquidation of the Fund and pursuant to the MGCL, the Company
shall file Articles of Amendment (the "Articles") with the Maryland State
Department of Assessments and Taxation canceling the outstanding shares of
the Fund.
6. Amendment or Abandonment of Plan. The Board may modify or amend this
Plan at any time without Stockholder approval if it determines that such
action would be advisable and in the best interests of the Fund and the
Stockholders. If any amendment or modification appears necessary and in the
judgment of the Board will materially and adversely affect the interests of
the Stockholders, such an amendment or modification will be submitted to the
Stockholders for approval. In addition, the Board may abandon this Plan
without Stockholder approval at any time prior to the liquidation of the
Fund if it determines that abandonment would be advisable and in the best
interests of the Fund and the Stockholders.
7. Powers of Board and Officers. The Board and the officers of the
Company are authorized to approve such changes to the terms of any of the
transactions referred to herein, to interpret any of the provisions of this
Plan, and to make, execute and deliver such other agreements, conveyances,
assignments, transfers, certificates and other documents and take such other
action as the Board and the officers of the Company deem necessary or
desirable in order to carry out the provisions of this Plan and effect the
complete liquidation and termination of the Fund in accordance with the Code
and the MGCL, including, without limitation, withdrawing any state
registrations of the Fund and/or its shares, withdrawing any qualification
to conduct business in any state in which the Company is so qualified solely
with respect to the Fund and the preparation and filing of any tax returns.
8. Termination of Business Operations. As soon as practicable upon
approval of this Plan by the Stockholders, the Fund shall cease to conduct
business except as shall be necessary in connection with the effectuation of
its liquidation and termination.
9. IRS Form. Within 30 days of the Liquidation Date, the Fund will file
with the Internal Revenue Service a completed Form 966 (Corporate
Dissolution or Liquidation).
10. Expenses. The expenses of carrying out the terms of this Plan shall
be borne by SBFM, whether or not the liquidation contemplated by this Plan
is effected.
Dated: January 29, 2003
A-2
EXHIBIT B
PRINCIPAL HOLDERS OF VOTING SECURITIES
As of February 3, 2003, the following stockholders were known to the Company
to own beneficially 5% or more of the Shares of the Fund:
PERCENTAGE OF
------------------
SHARES OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED FUND SHARES
------------------------------------ ------ -----------
B-1
SMITH BARNEY SECTOR SERIES INC.
SMITH BARNEY GLOBAL MEDIA & TELECOMMUNICATIONS FUND
SPECIAL MEETING OF STOCKHOLDERS -- _______________, 2003.
This Proxy is Solicited on Behalf of the Directors
The undersigned holder of shares of the Smith Barney Global Media &
Telecommunications Fund (the "Fund"), a separate series of Smith Barney Sector
Series Inc. (the "Company"), hereby appoints R. Jay Gerken, Lewis E. Daidone,
Christina T. Sydor, and Michael Kocur, proxies with full powers of substitution
and revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of the Fund that the undersigned is entitled to vote at
the Special Meeting of Stockholders of the Fund to be held at The Citigroup
Center, 153 East 53rd Street, New York, New York, 14th Floor, on April 2, 2003,
at 10a.m. and at any adjournments or postponements thereof. The undersigned
hereby acknowledges receipt of the enclosed Notice of Special Meeting and Proxy
Statement and hereby instructs said attorneys and proxies to vote said shares as
indicated herein. In their discretion, the proxies are authorized to vote on
such other business as may properly come before the Special Meeting. A majority
of the proxies present and acting at the Special Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
Vote via Facsimile: 1-888-796-9932
Vote via the Internet: https://vote.proxy-direct.com
Vote via Telephone: 1-800-597-7836
Control Number: 999 9999 9999 999
Please indicate your vote by an "X" in the appropriate box on the reverse side.
This proxy, if properly executed, will be voted in the manner directed by the
stockholder. If no direction is made, this proxy will be voted FOR Proposal 1.
Please refer to the Proxy Statement for a discussion of the Proposal.
Please Sign, Date and Return the Proxy Promptly
Using the Enclosed Envelope.
Dated:_________________________________, 2003
- -----------------------------------------------
- -----------------------------------------------
Signature(s), Title(s), if applicable
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
- -----------------------------------------------
- -----------------------------------------------
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 1.
|X| Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE A FINE POINT PEN. THIS PROXY, IF PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR APPROVAL OF THE PROPOSAL.
1. The approval of the Plan of Liquidation of the Fund, as adopted by the
Board of Directors.
[_] FOR [_] AGAINST [_] ABSTAIN
NOTE YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE