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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

-xKATHLEEN FITZGERALD, individually and on behalf f:all others similarly situated, 3 cv 4 3 0 5

Plaintiff, : CLASS ACTION: COMPLAINT

- against -: Jury Trial Demanded

CITIGROUP INC., SALOMON SMITH BARNEY INC.,SMITH BARNEY ASSET MANAGEMENT, smrru

- 0WVflBARNEY FUND MANAGEMENT LLC, and - n — •,)

•CIT.IGROUP GLOBAL MARKETS INC. `—`••

Defendants.

PlaintaKathleen Fitzgerald ("Fitzgerald"), individually and On behalf of all

others similarly situated, as and for her Class Action Complaint, alleges the following uport' -„r

,

personal knowledge as to herself and her own acts and, as to other matters, which are particlqrly

•within Defendants' knowledge and lie within their control, .upon information and belief

Plaintiff s infortnation and belief is based upon an investigation of counsel which included,

among other things, a review of documents filed by Salomon Smith Barney Inc., and its parent

company Defendant Citigroup Inc., and its proprietary mutual funds that comprise the "Smith

Barney Mutual Fund Family" (the "Smith Barney Funds" or "Funds") with the Securities and

Exchange Commission ("SEC"), various news reports and articles, and other publicly available

infonnation.

INTRODUCTION

1. This is a securities class action brought on behalf of all individuals and

entities who invested 5100,000 or more of Class B shares in one or more Smith Bartley Funds

485471v106(12/03 15:10

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during the period June 6, 1998 through the present (the "Class Period"), where such

investment(s) could have otherwise qualified for the $100,000 "breakpoint" load reduction

associated with investments in Smith Barney Fund Class A shares (the "Class"))

2. Smith Barney sponsors over 60 proprietary, or in-house, mutual funds

under the umbrella Smith Barney Funds (the "Funds"). The Funds, sold to the investing public

through Smith Barney's nationwide network of retail brokers, or financial advisers, are

segmented by investment strategies and differing investment objectives such as capital

preservation, current income or growth opportunities. The Funds collectively hold tens of

billions of dollars.

3. Pursuant to Rule 18f-3, promulgated by the SEC in 1995 under the

Investment Company Act 011940 (the "ICA"), mutual funds were authorized to offer multiple

share classes of the same underlying portfolio of investments. The majority of Smith Barney

Funds offer investors the option of investing in different share classes, including Class A, B, L

and Y. Generally, a minimum initial investment of 81,000 is required for investments in A, B

and L Class shares. The share classes differ primarily based upon their the commission, or sales

charge structure as well as ongoing yearly distribution fees.2

4. Class A shares charge a front-end load, or sales charge. Class B shares

that have no front-end load, but charge a back-end load if the investor sells his or her shares

within six years, and Class L shares that have no front-end load, hut charge a smaller back-end

load if the investor sells his or her shares within one year.

The Smith Barney Funds are listed in Exhibit I hereto.2 Y shares, which carry no front or back-end load, are available for purchase by persons investing at least $15

million in Smith f3arney Funds and are, therefore, not comparable with A, B or L shares.

2 t485471v106112/03 15:10 -

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5. The annual distribution fees charged investors in Classes B and L shares

are considerably larger than the fees paid by Class A shares.

6. Smith Barney's Class B shares are an inferior investment choice because,

for investors willing to invest $100,000 or more in Smith Barney Funds, investments in Class B

shares will, on a percentage basis, pay more sales charges and ongoing annual fees to Smith

Barney than if the investor had selected Class A and/or L. Investors with $100,000 or more to

invest will always pay less in sales charges and ongoing distribution fees by investing in A

shares than they will investing in B shares because such investors pay a reduced up front load

due to the size of their investment. Under these circumstances, A shares are always a superior

investment choice to Class 11, regardless of anticipated holding period.

7. Despite the fact that Class B is never a sound investment choice for

investors that could have qualified for the $100,000 breakpoint reduction had they invested in

Class A shares, the majority of money invested in the Smith Barney Funds goes into Class B

shares.

8. Smith Barney fails to disclose to Class members that investing in Class B

shares never makes economic sense but instead results in the payment of unnecessary and

excessive fees to Defendants.

9. In marketing and selling Class B mutual fund shares to plaintiff and

others, Defendants violated the federal securities laws and engaged in a course of business which

operated as a fraud and deceit on mutual fund investors throughout the country.

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JURISDICTION AND VENUE

10. Plaintiff bring this action pursuant to Sections 11, 12(a)(2) and 15 of the

Securities Act, 15 U.S.C. §§ 77k, 771(a)(2) and 77o and Section 10(b) of the Exchange Act, 15

U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5.

11. This Court has jurisdiction over the subject matter of this action pursuant

to Section 22 of the Securities Act, 15 U.S.C. § 77v and Section 27 of the Exchange Act, 15

U.S.C. § 78aa, and 28 U.S.C. §§ 1331 and 1337.

12. Venue is proper in this judicial district pursuant to Section 22 of the

Securities Act, Section 27 of the Exchange Act and 28 U.S.C. § 1391. Many of the wrongful

acts alleged herein, including the creation of the fraudulent practice alleged herein and the

dissemination of materially false and misleading information, occurred in this district. Further,

Defendants maintain their principal place of business in this district.

13. In connection with the conduct complained of herein, Defendants, directly

or indirectly, used the means and instrumentalities of interstate commerce, including the U.S.

mails and the facilities of a national securities market.

THE PARTIES

14. Plaintiff Kathleen Fitzgerald is an individual residing in Great Neck, New

York. During the Class Period, Fitzgerald invested over $400,000 class "B" shares in three

mutual funds sponsored by Smith Barney, and suffered losses as a result of the securities law

violations alleged herein.

15. Defendant Salomon Smith Barney Inc. ("Smith Barney") is a leading

provider of comprehensive financial planning and advisory services to investors, institutions,

corporations and private businesses, governtnents and foundations. Smith Barney and its

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affiliates are the sponsors of over 60 mutual funds that comprise the Smith Barney Fund 'Family.

The Funds arc sold to the investing public primarily through affiliates of Smith Barney and their

network of Smith Barney Financial Consultants. With more than 300 research analysts around

the globe and nearly 12,400 financial consultants in some 500 offices, Smith Barney offers

investment services, including asset allocation, private investments and lending services, hedge

funds, cash and portfolio management, as well as retirement, education and estate planning. A

wholly owned subsidiary of'Defendant Citigroup Inc., Smith Barney currently serves more than

7.5 million client accounts, representing nearly $900 billion in client assets. Smith Bartley and

Defendant Citigroup maintain headquarters at 399 Park Avenue, New York, New York 10022.

16. The Funds are managed by Defendants Smith Barney Fund Management

TLC or Smith Barney Asset Management, both subsidiaries of Citigroup Global Markets Inc.,

which is a subsidiary of Citigroup Inc. As of March 31, 2003, Citigroup Asset Management

manages $462.23 billion in assets, of which $194.5 billion is managed by Smith Barney Asset

Management. Defendants Smith Barney Fund Ivlanagemcnt LLC, Smith Barney Asset

Management and Citigroup Global Markets Inc. maintain their principal executive offices at 399

Park Avenue, New York, NY.

17. Defendants herein will be referred to collectively as "Smith Barney" or

Defendants.

18. During the Class Period, Defendants controlled the contents of annual

reports, prospectuses, and registration statements of the Funds. Defendants knew that Class .

members would pay more in sales charges than if they would have invested in A or L Class

shares but failed to disclose this critical fact in such publicly filed documents. Defendants also

knew that, tbr Class members, B shares would not be the appropriate investment vehicle, as

5485471v106/12/0:3 15:10

1101101111111.1111.110111111.1.1.i.mr, .

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compared to class A or L shares, and, therefore, its the representations being made in fund

prospectuses that "[flhe performance of the fund's other classes may be greater or less than the

Class B shares' performance" was IltIse and misleading. Defendants are responsible for the

accuracy of the Funds' annual reports and prospectuses/registration statements as well as the

sales practices of its financial advisers.

19. It is appropriate to treat Defendants as a group for pleading purposes of

the federal securities laws and the Federal Rules of Civil Procedure and to presume that the

materially false and misleading statements and fraudulent scheme alleged herein was made

possible through the collective actions of Defendants. Defendants were involved in the

preparation, drafting, review and dissemination of the false and misleading statements alleged

herein as well as the scheme by which Plaintiff ami the Class were charged excessive sales

charges for the investments in B shares and knew or recklessly disregarded that such false

statements were being issued, and approved or ratified these statements in violation of the federal

securities laws.

SUBSTANTIVE ALLEGATIONS

The Smith Barney Fund Family

20. Smith Barney is the sponsor of over 60 proprietary open and closed-end

mutual funds known as the Smith Barney Funds. Collectively, the Funds hold tens of billions of

investor dollars. Shares in the Funds are marketed to individual investors throughout the United

States primarily through Defendants' nationwide network of brokers, or financial advisers,

21. The assets and operations of the Smith Barney Funds are managed and

administered by Defendant Smith Barney Asset Management.

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22. The Funds are all controlled by the same officers and directors and/or

trustees.

23. Thc Funds, which invest in stocks, bonds, and other classes of assets and

offer a wide range of investment strategies, arc marketed to the public as a "family of mutual

funds."

24. The Funds are marketed to investors in the same manner and through the

use of prospectuses that are virtually identical with respect to the tnisstatements and omissions

alleged herein.

25. The Funds are operated pursuant to a common set ofpolicies and

practices, including rules regarding the purchase and redemption of mutual fund shares.

26. All the multi-class Funds utilize the same general load and fee structure,

although there are minor variations as to specific amounts of fees and loads charged by certain

funds.

27. All of the Funds engage in the same deceptive practices regarding the

marketing of Class B shares that give rise to this action.

Mutual Fund Class Structure Fees and Expenses

28. The majority of the Funds, and many other mutual fund families, are

offered in different share classes, designated as A, B, and more recently L (sometimes called "C"

shares) and other share classes. The share classes for a given fund represent claims on the same

underlying portfolio of investments, hut differ in their expense structures.

29. Expenses for the share classes are differentiated with respect to the

amount and timing of one-time sales charges, referred to as "loads," and annual fees for asset

management, ntarketing, sales ("distribution"), and other services.

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. LIMINEMEIMM.

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30. For Class A shares in equity funds, Smith Barney typically charges what is

referred to as a "front-end load" in the amount of 4. 5% for investments of less than $25,000,

which is paid at the time of the initial investment. In addition, Class A shares are charged an

annual distribution fee of 0.25% as well as other fees and expenses. The front-end load is

reduced incrementally for investments of $25,000 or more. The incremental discounts are known

as "breakpoints." For example, an investment of $25,000 to $49,999 qualifies for the first

breakpoint and the front-end load is reduced from 4.5% to 4%. The front-end load for Class A

shares is eliminated altogether for investments of $1 million and over.

31. As set forth in the prospectuses for the Funds, an investor can also qualify

for breakpoints based on (1) the combined purchases of Class A shares in Funds, (2) under

rights of accumulation, (3) when the investor enters into a Letter of intent and (4) under a

number of other different scenarios relating to retirement planning.

32. Smith Barney offers Class B shares with no initial sales charge, but the

Class 13 shares are subject to a contingent deferred sales charge (CDSC), also known as a back-

end load, ranging from 4.5% percent in the first year the shares are held to 1% percent in the fifth

year. There is no CDSC for Class 13 Shares held more than five years. The Class 13 shares

convert to Class A shares after 8 years.

33. Smith Barney offers Class L shares with no initial sales charge, but the

Class L shares are subject to a contingent deferred sales charge of 1% if the shares are sold

within one year of purchase. Class L shares do not convert to Class A shares at any time.

34. In addition to the CDSC, Smith Barney states that it normally charges

shareholders of equity fund Class 13 an annual distribution fee of .75%, which is .5% more than

Class A shares, as well as the same other fees and expenses charged to Class A funds.

8485471v1

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35. A.s noted, share classes for a given fund represent claims on the same

underlying portfolio of investments, but differ in their expense structures. In order to determine

whether Class A, 13, or L shares are more or less expensive for a particular investment strategy or

investment amount, one must examine the fees and expenses associated with each share class

during the period of time the investor may hold the investment. This analysis must also take into

account the possibility of redemption at various tirnes and the anticipated asset appreciation. As

Smith Barney knows, such an analysis is beyond the ability of the vast majority of mutual fund

investors.

36. With respect to the relative performance of share classes, investments in

Smith Barney's bond funds perform in essentially the same way as the equity fund investments.

Class B remains an inferior and illogical investment.

37. Defendants promote, offer, and sell Class B shares to individuals and

entities investing in Smith Barney .funds, even though defendants know that Class members will

pay more fees and earn less profits than if they had chosen Class A and/or Class L shares.

Defendants knowingly fail tO inform investors of these critical facts.

38. Srnith Barney states in its fund prospectuses that "Classes A, B, L and Y.

Each class has different sales charges and expenses, allowing you to choose the class that best

meets your needs." This statement is misleading because implies that each share class represents

a legitimate investment that might be the superior choice for certain types of investors.

39. Similarly, the Smith Barney Fund prospectuses highlight that, with

investments in B shares, the entire investment amount is invested with out a deduction of an

upfront load and use this as a basis to state that this "may help offset the higher expenses of

Class B and Class L shares, but only if the fund performs well." However, for Class members,

9485471v100/12/03 15:10

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their investments in B shares would not "offset" the higher expenses and distribution fees paid as

owners of B shares.

40. Defendants failed to disclose facts necessary to allow investors to

understand that selecting Class B with respect to an investment of $100,000 or more would result

in payment of unnecessary fees.

41. Through the dissemination of its fund prospectuses and its acceptance of

billions of dollars in Class B investments, Smith Barney impliedly communicates to Class

members that investments in Class B shares are sometimes a rational, superior investment

choice. In truth, however, Smith Barney presents investors with a false and deceptive choice.

Regardless of whether a Class member is pursuing a short-term, medium-term, or long-term

investnient strategy, Class B shares represent an inferior investment choice. No rational Class

member would invest in Class B shares of Smith Bamey's funds if Defendants disclosed that

such an investment would always be inferior to an investment in Class A shares. In offering and

accepting such investments, Smith Barney collects excessive fees by preying on investors who

do not understand the complicated class share structure.

42. Nowhere in its fund prospectuses (or anywhere else) does Smith Barney

disclose the fact that investors who invest $100,000 or more in Class B shares of Smith Barney's

funds will always do worse than ilthey had invested in Class A shares. This critical fact is

material and should have been disclosed in order to make the information Smith Barney provided

not misleading.

43. Smith Barney fully understands the facts discussed above. The majority

of the dollars invested in the Smith Barney Funds during the Class Period are placed in Class B

shares. These shares are more profitable for Smith Barney than Class A and Class L shares, but

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more expensive for Class members. Defendants understand that if they disclosed the truth, their

sales of Class B shares, and the millions of dollars in excess fees defendants receive from Class

members, would disappear,

CLASS ACTION ALLEGATIONS

44, Plaintiff brings this action as a class action pursuant to Rules 23(a) and

23(b)(3) of the Federal Rules of Civil Procedure on behal f of all individuals and entities who

purchased $100,000 or more of Class 13 shares in one or more Smith Barney funds ("the

Subclass") during the period June 12, 1998 through the present (the "Class Period") where such

purchase(s) would have otherwise qualified for the $100,000 "breakpoint" load reduction

associated with the purchase of Class A shares.

45. The members of the Class are so numerous that joinder of all members is

impracticable. As of March 2003, the number of purchasers of Smith Barney B Shares is in

excess of 100,000 thousand and the number of such investors that are members of the Class is in

the thousands or tens of thousands.

46. Plaintiff's claims are typical of the claims of all members of the Class.

Members of the Class have sustained damages arising out of Defendants' wrongful conduct as

alleged herein.

47. Plaintiff will fairly and adequately protect the interests of the Class.

Plaintiff has retained counsel who is competent and experienced in class action and securities

litigation. Plaintiff has no interests that are contrary to or in conflict with those of the other

members of the Class.

48. A class action is superior to other available methods for the fair and

efficient adjudication of this controversy. The Class is numerous and geographically dispersed,

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and because the damages suffered by individual Class members may be relatively small, the

expense and burden of individual litigations make it virtually impossible for the members of the

Class to redress the wrongs done to them on an individual basis. There will be no difficulty in

the management of this action as a class action.

49. Common questions of law and fact exist as to all members of the Class

and predominate over any questions solely affecting individual members. These questions

include, but are not limited to, the following:

(a) Whether Defendants engaged in deceptive conduct as alleged

herein that violated the federal securities laws;

(b) Whether Defendants' SEC filings and other public

statements disseminated during the Class Period misrepresented and/or

omitted material facts;

(c) Whether Defendants acted knowingly or recklessly in issuing

materially false and misleading statements;

(d) Whether Class members purchase of B shares resulted in the

payment of excessive sales charges;

(e) Whether defendants had a duty to disclose material information

concerning the choice of share classes; and

(e) Whether the members of the Class have sustained damages and, if

so, the proper measure of such damages.

SCIENTER ALLEGATIONS

50. Defendants acted with scienter in that they devised a scheme to sell B

shares to Class members, which they knew would result in the payment of sales charges in

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excess of those for its other share classes and that the investing public would be easily mislead

by its complex pricing scheme, which also involved the dissemination of materially false and

misleading fund prospectuses to the investing public. As set forth above in detail, Defendants

participated in the fraudulent scheme alleged herein to increase their sales charge revenue and

ongoing receipt of distribution fees and were in a position to do so by virtue of their superior

knowledge and control over the contents of the prospectuses and other selling documents utilized

in deceiving Plaintiff and the Class into purchasing B shares, which Defendants knew was an

inferior investment as compared to A or L Class shares in Funds.

COUNT 1

Against All Defendants For Violations of Section 12 of the Securities Act of 1933

51. Plaintiff repeats and realleges the allegations set forth above as if fully set

forth herein.

52. Each Defendant was a seller, offeror, and/or solicitor of Class B mutual

fund shares to the Plaintiff Class during the Class Period within the meaning of § 12 of the

federal Securities Act of 1933, 15 U.S.C. § 771.

53. The Prospectuses used in connection with the sale of Fund B shares

contained materially false and misleading statements and omitted to state material facts

necessary in order to make the statements, in light of the circumstances under which they were

made, not misleading.

54. Defendants did not make a reasonable investigation or possess reasonable

grounds for the belief that the statements contained in the Prospectuses were true, without

omissions of any material facts and were not misleading.

1348547h'I06/12/01 1510

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55. Plaintiff, individually and representatively, hereby elect to rescind the

purchase ofB shares and tender to Smith Barney those securities that members of the Class

continue to own, in return for the consideration paid for those securities together with interest

thereon,

56. Members of the Class who have sold their Fund shares are entitled to

rescissory damages.

57. The action was brought within one year after the discovery of

Defendants' fraudulent scheme and the untrue statements and omissions in the Fund

Prospectuses and within three years after the 13 shares were offered to the public.

58. Defendants had a duty to disclose, but failed to disclose, the material

information set forth above concerning the superiority of Class A and/or Class L shares, as

compared to Class B shares, and the financial conflicts of interest of Smith Barney brokers in

promoting Class 13 shares. This information was clearly material to the investment decisions of

the members of the Plaintiff Class.

59. In connection with the offer and sale of securities, by the use of means or

instruments of transportation or communication in interstate commerce or of the mails,

Defendants made written communications which omitted to state material facts necessary to

make the statements made not misleading, in violation of § 12(a)(2) of the federal Securities Act

of 1933, 15 U.S.C. § 771(a)(2).

60. Smith Barney and/or Citigroup is the parent company of the other

defendants and is therefore a controlling person liable for the § 12 violations of the other

defendants pursuant to 15 U.S.C. § 770.

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61. Defendants are therefore liable to plaintiff and other members of the

Plaintiff Class under 15 U.S.C. §771 for such damages as may be determined by the Court, plus

pre judgment interest.

COUNT II

Against All Defendants For Violations of Section 11 of the Securities Act of 1933

62. Plaintiff repeats and realleges the allegations set forth above as if fully set

forth herein.

63. The registration statements of Smith Barney's mutual funds omitted to

state material facts necessary to make the statements therein not misleading. Defendants had a

duty to disclose these omitted facts.

64. Smith Barney and its affiliates acted as the underwriter with respect to the

securities purchased by the Plaintiff Class.

65. Plaintiff was unaware of the above-referenced material omissions.

Plaintiff and the other members of the Plaintiff Class have been damaged as a result of

defendant's misconduct.

66. Defendants are therefore liable to Plaintiff and other members of the

Plaintiff Class under § 11 of the federal Securities Act of 1933, 15 U.S.C. § 77k, for such

damages as may be determined by the Court, plus pre judgment interest.

67. At the time she purchased Fund shares, plaintiff and the other members of

the Class were without knowledge of the facts concerning the wrongful conduct alleged herein

and could not have reasonably discovered those facts prior to the end of the Class Period. Less

than one year has elapsed from the time that plaintiff discovered or reasonably could have

discovered the facts upon which this complaint is based to the time that plaintiff filed this

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Complaint. Less than three years have elapsed from the time that the shares upon which this

claim is brought were bona fide offered to the public to the time plaintiffs filed this Complaint.

68. Smith Barney and/or Citigroup and its affiliates control the distribution of

the Funds and are, therefore, controlling persons liable for the § 11 violations of Defendants

pursuant to 15 U.S.C. § 770.

COUNT III

Against All Defendants For Violations of Section 10(b) ofthe Securities Act of 1934 and SEC Rule 10b-5(a)

69. Plaintiff repeats and realleges the allegations set forth above as if fully set

forth herein.

70. In connection with the offer and sale of securities, Defendants

individually and in concert, directly and indirectly, by the use of means or instrumentalities of

interstate commerce and/or the mails, engaged and participated in a continuous course of conduct

to purposely misrepresent to Class Members that B shares represented a rationale investment

choice as compared to the purchase of A or L Class shares, which operated as a fraud and deceit

upon the Class during the Class Period in violation of § 10(b) of the Securities and Exchange Act

of 1934, 15 U.S.C. 78j, and Rule 10b-5(a) of the SEC Regulations promulgated under that Act.

71. In connection with the offer and sale of securities, defendants intentionally

and/or recklessly omitted to state material facts necessary to make the statements made to

plaintiff not misleading, in violation of § 10(b) of the Securities and Exchange Act of 1934, 15

U.S.C. 78j, and Rule 10b-5(b) of the SEC Regulations promulgated under that Act.

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72. Plaintiff and the other members of the Class were unaware of Defendants'

misconduct and the materially false and misleading statements in the prospectuses issued in

connection with the Funds.

73. Plaintiff and the other m emb er s of the Class have been damaged as a

result of Defendants' misconduct.

74. Smith Barney and/or Citigroup are controlling persons of the other

defendants and are therefore liable for the § 10(b) and Rule 10b-5 violations of the other

defendants pursuant to 15 U.S.C. § 78t.

75. Defendants are therefore liable to plaintiff and the other members of the

Class for such damages as may be determined by the Court, plus pre judgment interest.

WHEREFORE, Plaintiff, on behalf of herself and the other members of the Class,

respectfully request that the Court enter judgment as follows:

A. Declaring this action to be a proper class action maintainable pursuant to

Rule 23 of the Federal Rules of Civil Procedure;

B. Awarding Plaintiff and the Class compensatory and/or rescissory

compensatory damages as a result of the wrongdoing complained of herein;

C. Awarding Plaintiff and the Class the costs and expenses incurred in this

litigation, including reasonable attorney's and expert's fees; and

D. Granting Plaintiff and the Class such other and further relief as the Court

deems just and proper.

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DEMAND FOR JURY TRIAL

Plaintiff demands a trial by jury of all issues so triable.

Dated: June 11, 2003 GOODK / B • 0 • '/SUP A;:i• LP

By: /Jb 1. Bernstein (JB-0763)Christopher J. Keller (CK-2347)100 Park AvenueNew York, New York 10017-5563Tel: (212) 907-0700Fax: (212) 818-0477

DEUTSCH & LIPNERSeth E. Lipner (SL-3115)1325 Franklin AveGarden City, New York 11530(516) 294-0102

Attorneys for Plaintiff

18485471v106/05/03 16:30

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CERTIFICATION

1, -Kathleen Fitzgerald, hereby certify as follows:

1. I did not purchase Smith Barney mutual fund shares at the direction of counsel or in order

to participate in any private action under the federal securities laws;

2. I reviewed a complaint. prepared against Smith Barney alleging violations of the securities

laws and 1 an willing to serve as a lead plaintiff in this matter, including providing testimony at

deposition and trial, if necessary;

3. I purchased shares of the Smith Barney proprietary mutual funds as set forth below:

DATE FUND SHARES AMOUNT

7/20/00 Smith Barney I ligh Income Fund 13,034.411 $125,000

7/20/00 Smith Barney Aggressive Growth Fund138.471 $13,772.30

7/20/00 Smith Barney Strategic Income Fund 37,826.685 $275,000

4. I have rrot sought to serve as a lead plaintiff in any class action under the federal securities

laws during the last three years.

5. I will not accept payment for serving as a lead plaintiff beyond my pro rata share of any

recovery, except such reasonable costs and expenses (including losi wages) as ordered or approved

by the Court.

1 declare that the tbregoing is true and correct to the best of my knowledge,

information and belief, under the penalty of perjury.

• ,"

A } •• •

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-Dated: June , 2003 kc F4,113

Kathleen FitzgeraldKenwood Gardens160 Middle Neck RoadGreat Neck, New York 11021

Au /Alt Air,y AWAAIAAU A' WAY,.•

ernnn•t .toFund Prospectuses and Reports

Each prospectus contains more information about the Fund, including risks, charges and expenses.Please read it carefully before you invest or send money.

Fund NameAstable Rate Income Fund (Smith Barney Shares)Aggressive Growth Fund -Allocation Series Balanced PortfolioAllocation Series Conservative PortfolioAllocation Series Global PortfolioAllocation Series Growth PortfolioAllocation Series High Growth PortfolioAllocation Series Income PortfolioAppreciation FundArizona Municipals FundBalanced Fund California Municipals FundCapital and Income Fund (Smith Barney Shares) -Classic Values FundConvertible Fund (Smith Barney Shares)Diversified Large Cap Growth FundDiversified Strategic Income FundFinancial Services Fund •Florida PortfolioFundamental Value FundGeorgia PortfolioGlobal Government Bond Portfolio Government Securities FundGroup Spectrum Fund Growth & Income Fund (Smith Barney Shares)Hansberger Global Value FundHealth Sciences FundHigh Income FundIntermediate Maturity California Municipals Fund --- --Intermediate Maturity New York Municipals Fund International All Cap Growth PortfolioInternational Large Cap Fund Investment Grade Bond Fund Large Cap Core Fund -Large Capitalization Growth Fund --Large Cap Value Fund • 'Limited Term PortfolioManaged Governments FundManaged Municipals FundMassachusetts Municipals Fund Mid Cap Core FundMunicipal High Income FundNational Portfolio New Jersey Municipals FundNew York Portfolio Oregon Municipals FundPennsylvania PortfolioPremier Selections: All Cap Growth FundPremier Selections: Global Growth FundPremier Selections: Large Cap FundShort-Term Investment Grade Bond Fund •Small Cap Core FundSmall Cap Growth FundSmall Cap Growth Opportunities Fund

6/12/03http://srnithbarneymutualfunds.conillitinlif all reports.html