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SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box:

(Name of Registrant(s) as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Legg Mason Partners Institutional Trust

Legg Mason Partners Income Trust

Legg Mason Partners Money Market Trust

Legg Mason Partners Premium Money Market Trust

Legg Mason Partners Variable Income Trust

Master Portfolio Trust

Western Asset Funds, Inc.

620 Eighth Avenue, 49th Floor

New York, NY 10018

[    ], 2019

Dear Shareholder:

A special meeting of your mutual fund(s) (each a “Fund” and together, the “Funds”), each a series of an above-listed trust or corporation, will be held at the offices of Legg Mason at 620 Eighth Avenue, 49th Floor, New York, New York, on Tuesday, December 3, 2019 at 10:00 a.m. (Eastern time), for the purposes of:

Shareholders are being asked to elect Board Members of their Funds, which comprise substantially all of the mutual funds within the Legg Mason fund complex that are advised by Western Asset Management Company, LLC (“Western Asset”). Currently, the Funds are overseen by two different Boards. The Boards recommend that shareholders elect all of the nominees, which will result in a single group of Board members (the “Unified Board”), principally comprised of members of both existing Boards, overseeing substantially all of the Western Asset-advised mutual funds in the Legg Mason fund complex. As described in the enclosed joint proxy statement, the anticipated benefits that this unification of the Boards may promote include more efficient and effective communication among the Board members that oversee Western Asset-advised mutual funds within the fund complex, enhanced governance capabilities, efficiency in operations and potential long-term cost savings.

The Board responsible for your Fund recommends that you vote “FOR” Proposal 1 with respect to your Fund. However, before you vote, please read the full text of the joint proxy statement for an explanation of the proposal.

Your vote on this matter is important. Even if you plan to attend and vote in person at the meeting, please promptly follow the enclosed instructions to submit voting instructions by telephone or over the Internet. Alternatively, you may submit voting instructions by signing and dating each proxy card and returning it in the accompanying postage-paid return envelope.

If you have any questions about the proposal to be voted on, please call Computershare Fund Services at 1-866-300-0742.

Sincerely,

Robert I. Frenkel

Secretary

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Legg Mason Partners Institutional Trust

Legg Mason Partners Income Trust

Legg Mason Partners Money Market Trust

Legg Mason Partners Premium Money Market Trust

Legg Mason Partners Variable Income Trust

Master Portfolio Trust

Western Asset Funds, Inc.

620 Eighth Avenue, 49th Floor

New York, NY 10018

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Be Held December 3, 2019

A joint special meeting of the shareholders of the Funds identified below (the “Meeting”) will be held at the offices of Legg Mason at 620 Eighth Avenue, 49th Floor, New York, New York, on Tuesday, December 3, 2019 at 10:00 a.m. (Eastern time), for the following purposes, as more fully described in the accompanying Joint Proxy Statement:

Your Board recommends that you vote “FOR” Proposal 1.

Shareholders of record at the close of business on September 13, 2019 (the “Record Date”) are entitled to vote at the Meeting and at any adjournments or postponements thereof.

If you own shares in more than one Fund as of the Record Date, you may receive more than one proxy card. Please be certain to sign, date and return each proxy card you receive.

By order of the Boards of Directors/Trustees,

Robert I. Frenkel

Secretary

[    ], 2019

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Legg Mason Partners Institutional Trust

Legg Mason Partners Income Trust

Legg Mason Partners Money Market Trust

Legg Mason Partners Premium Money Market Trust

Legg Mason Partners Variable Income Trust

Master Portfolio Trust

Western Asset Funds, Inc.

620 Eighth Avenue, 49th Floor

New York, NY 10018

JOINT PROXY STATEMENT

This Joint Proxy Statement is furnished in connection with the solicitation by the Board of Directors or Trustees (each, a “Board” and each Director or Trustee, a “Board Member”) of each of the mutual funds listed in the accompanying Notice of Joint Special Meeting of Shareholders (each a “Fund” and together, the “Funds”), each a series of an above-listed trust (each, a “Trust”) or corporation (the “Corporation”), of proxies to be voted at a joint special meeting of shareholders of each such Fund to be held at the offices of Legg Mason at 620 Eighth Avenue, 49th Floor, New York, New York, on Tuesday, December 3, 2019 at 10:00 a.m. (Eastern time) (for each Fund, a “Meeting”), and at any and all adjournments or postponements thereof. The Meeting will be held for the purposes set forth in the accompanying Notice of Special Meeting of Shareholders.

The Board of each Fund has determined that the use of this Joint Proxy Statement for such Fund’s Meeting is in the best interests of the Fund and its shareholders in light of the related matters being considered and voted on by the shareholders of each of the Funds. This Joint Proxy Statement and the accompanying materials are being mailed by the Boards on or about [ ], 2019.

Each Fund is organized as either a series of a Maryland statutory trust or a series of a Maryland corporation. The Trusts and Corporation are registered investment companies. A list of each Trust, the Corporation, and the series of each Trust and the Corporation, is set forth in Appendix A.

Shareholders of record at the close of business on September 13, 2019 (the “Record Date”) are entitled to vote at the Meeting. Shareholders of certain Funds are entitled to one vote for each share of the Fund(s) held on the Record Date. Shareholders of other Funds are entitled to one vote for each dollar of net asset value represented by the shareholder’s shares of the Fund(s) on the Record Date. Holders of interests in Funds in Master Portfolio Trust, which are underlying master funds in a master/feeder arrangement, are entitled to vote in the proportion that their beneficial

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interests in the Fund bear to the total beneficial interests in that Fund. If you own shares of a Fund that is a feeder fund investing in a Fund in Master Portfolio Trust, as explained below, your vote on a proposal for your Fund will also serve as your authorization for the Fund to vote in the same manner on any corresponding proposal applicable to the underlying Fund in which it invests. The manner in which shareholders of each Fund are entitled to vote is shown in Appendix B.

The number of shares of each Fund outstanding at the close of business on the Record Date and the net assets of each Fund as of that date are shown in Appendix B.

The Fund of which you are a shareholder is named on the proxy card included with this Joint Proxy Statement. If you own shares in more than one Fund as of the Record Date, you may receive more than one proxy card. Even if you plan to attend the Meeting, please sign, date and return EACH proxy card you receive, or if you provide voting instructions by telephone or over the Internet, please vote on the proposal with respect to EACH Fund you own. If you vote by telephone or over the Internet, you will be asked to enter a unique code that has been assigned to you, which is printed on your proxy card(s). This code is designed to confirm your identity, provide access into the voting sites and confirm that your instructions are properly recorded.

All properly executed proxies received prior to a Fund’s Meeting will be voted at that Meeting. On the matters coming before the Meeting as to which a shareholder has specified a choice on that shareholder’s proxy, the shares will be voted accordingly. If a proxy is properly executed and returned and no choice is specified with respect to Proposal 1, the shares will be voted “FOR” all of the nominees. Shareholders who execute proxies or provide voting instructions by telephone or the Internet may revoke them with respect to the proposal at any time before a vote is taken on the proposal by filing with the applicable Fund a written notice of revocation (addressed to the Secretary of the Fund at the principal executive offices of the Fund at the address above), by delivering a duly executed proxy bearing a later date or by attending the Meeting and voting in person, in all cases prior to the exercise of the authority granted in the proxy card. Merely attending the Meeting, however, will not revoke any previously executed proxy. If you hold shares through a Service Agent (as defined below) or if you are the holder of a variable annuity contract or variable life insurance policy through a participating insurance company (as discussed below), please consult your Service Agent or your participating insurance company regarding your ability to revoke voting instructions after such instructions have been provided.

Photographic identification and satisfactory proof of ownership of shares of a Fund, such as your voting instruction card, will be required for admission to the Meeting.

Annual reports are sent to shareholders of record of each Fund following the Fund’s fiscal year end. Each Fund’s fiscal year end is set forth on Appendix H. Each Fund will furnish, without charge, a copy of its annual report and most recent semi-annual report succeeding the annual report, if any, to a shareholder upon request. Such requests should be directed to the Fund at Legg Mason Funds, P.O. Box 9699, Providence, RI 02940-9699 or by calling toll free at 1-877-721-1926. Copies of annual and semi-annual reports of each Fund are also available on the EDGAR Database on the Securities and Exchange Commission’s Internet site at www.sec.gov.

Please note that only one annual or semi-annual report or Joint Proxy Statement may be delivered to two or more shareholders of a Fund who share an address, unless the Fund has received instructions to the contrary. To request a separate copy of an annual report or the Joint Proxy Statement, or for instructions as to how to request a separate copy of these documents or as to how to request a single copy if multiple copies of these documents are received, shareholders should contact the applicable Fund at the address and phone number set forth above.

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VOTE REQUIRED AND MANNER OF VOTING PROXIES

A quorum of shareholders with respect to a Trust or the Corporation is required to take action at the Meeting with respect to such Trust or the Corporation. For each Trust, the quorum requirement for Proposal 1 is the presence, in person or by proxy, of at least 30% of the voting power of the Trust taken as a whole as of the Record Date. Total voting power of the Trust taken as a whole is determined, not by the number of shares outstanding, but by net asset value of all of the outstanding shares (including fractional shares) of the Trust as of the Record Date. Each share (or fractional share) of a Trust outstanding as of the Record Date is entitled to a number of votes equal to the net asset value of that share (or fractional share) as of the Record Date. This is referred to as “dollar-weighted” voting. For the Corporation, the quorum requirement for Proposal 1 is the presence, in person or by proxy, of at least 30% of the outstanding shares of the Corporation taken as a whole on the Record Date. Each share of Corporation outstanding as of the Record Date is entitled to one vote (with fractional votes for fractional shares outstanding as of the Record Date). The quorum requirement of each Trust and the Corporation and for each Fund is set forth in Appendix B.

Votes cast by proxy or in person at the Meeting will be tabulated by the inspectors of election appointed for that Meeting. The inspectors of election, who are employees of Computershare, the proxy solicitor engaged by Legg Mason Partners Fund Advisor, LLC (“LMPFA” or the “Manager”), the Funds’ investment manager, on behalf of the Funds, will determine whether or not a quorum is present at the Meeting. The inspectors of election will treat abstentions and “broker non-votes” (i.e., shares held by brokers or nominees, typically in “street name,” as to which proxies have been returned but (a) instructions have not been received from the beneficial owners or persons entitled to vote and (b) the broker or nominee does not have discretionary voting power on a particular matter) as present for purposes of determining a quorum.

Broker-dealer firms holding shares of a Fund in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares on the proposal. A signed proxy card or other authorization by a beneficial owner of Fund shares that does not specify how the beneficial owner’s shares should be voted on Proposal 1 may be deemed an instruction to vote such shares in favor of all of the nominees.

If you hold shares of a Fund through a bank or other financial institution or intermediary (a “Service Agent”) that has entered into a service agreement with the Fund or a distributor of the Fund, the Service Agent may be the record holder of your shares. At the Meeting, a Service Agent will vote shares for which it receives instructions from its customers in accordance with those instructions. A signed proxy card or other authorization by a shareholder that does not specify how the shareholder’s shares should be voted on the proposal may be deemed to authorize a service provider to vote such shares in favor of the nominees. Depending on its policies, applicable law or contractual or other restrictions, a Service Agent may be permitted to vote shares with respect to which it has not received specific voting instructions from its customers. In those cases, the Service Agent may, but may not be required to, vote such shares in the same proportion as those shares for which the Service Agent has received voting instructions. This practice is commonly referred to as “echo voting.”

Shares of certain Funds are offered to variable annuity and variable life insurance separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies (the “Variable Annuity Funds”). Shares of the Variable Annuity Funds are held by the variable annuity contracts and variable life insurance products offered by the separate accounts of participating life insurance companies. However, in accordance with current law and

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interpretations thereof, participating insurance companies will vote shares held in the separate accounts in a manner consistent with voting instructions timely received from the holders of variable annuity contracts and variable life insurance policies. A signed proxy card or other authorization by a holder that does not specify how the holder’s shares should be voted on the proposal may be deemed an instruction to vote such shares in favor of all of the nominees. Those persons who have a voting interest at the close of business on the Record Date will be entitled to submit instructions to their participating insurance company. Each participating insurance company will vote Variable Annuity Fund shares held in separate accounts for which no timely instructions are received from the holders of variable annuity contracts and variable life insurance policies, as well as shares it owns, in the same proportion as those shares for which such insurance company receives voting instructions. For purposes of this Joint Proxy Statement, the term “shareholder” (when used to refer to the beneficial holder of ownership interests in a Fund) shall also be deemed to include holders of Variable Annuity Fund shares through variable annuity contracts and variable life insurance policies.

If you beneficially own shares that are held in “street name” through a broker-dealer or that are held of record by a Service Agent, or if you hold Variable Annuity Fund shares through a variable annuity contract or a variable life insurance policy, and if you do not give specific voting instructions for your shares, they may not be voted at all or, as described above, they may be voted in a manner that you may not intend. Therefore, you are strongly encouraged to give your broker-dealer, Service Agent or participating insurance company specific instructions as to how you want your shares to be voted.

Certain Funds are feeder funds that invest in securities through underlying master funds that are Funds in Master Portfolio Trust. When a shareholder of a feeder Fund votes on a proposal, that vote will also constitute instructions for the feeder Fund to vote in the same manner on the corresponding proposal for the master Fund in which it invests. Accordingly, for each proposal brought before the Meeting, each feeder Fund will vote its interests in its master Fund in accordance with the voting instructions received from its shareholders and will vote interests in the master Fund for which no timely instructions are received in the same proportion as the interests for which it receives voting instructions (this is referred to as “proportional voting”). Because of this use of proportional voting with respect to a master Fund, a small number of shareholders could determine how a feeder Fund votes with respect to a master Fund, if other shareholders fail to vote.¹ For purposes of this Joint Proxy Statement, the term “shareholder” shall be deemed to include holders of beneficial interests in a master Fund, even though beneficial interests in the master Fund technically are not divided into shares.

Proposal 1:

¹ Master Funds other than Tax Free Reserves Portfolio have investors that are non-US funds sponsored by Legg Mason. The Funds understand that these non-US funds will vote their interests in each master Fund in the same proportion as the vote of all other holders of interests in that master Fund. This may have the effect of further magnifying the impact of the votes of feeder Fund shareholders who do in fact vote.

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THE PROPOSAL TO ELECT BOARD MEMBERS

The purpose of the proposal is to elect Board Members of each Trust or Corporation named in the tables below.

Currently, two different Boards (each an “Existing Board” and together, the “Existing Boards”) oversee the Funds, which comprise substantially all of the mutual funds within the Legg Mason fund complex that are advised by Western Asset Management Company, LLC (“Western Asset”).¹ The Boards recommend that shareholders elect all of the nominees, which will result in a single group of Board members (the “Unified Board”), principally comprised of members of both Existing Boards, overseeing substantially all of the Western Asset-advised mutual funds in the Legg Mason fund complex.

It is intended that the enclosed proxy card will be voted for all nominees (each, a “Nominee”) for the Unified Board unless a proxy contains specific instructions to the contrary. The Nominees’ term of office is expected to commence on or about January 1, 2020 or promptly after the election of the Nominees if the Meeting is adjourned or postponed to a date after January 1, 2020.

Funds to Elect Board Members of the Unified Board

¹ Western Asset Management Company, LLC (formerly known as Western Asset Management Company) (“Western Asset”), is a subadviser to LMPFA with respect to the Funds. Western Asset Management Company Limited (“Western Asset London”), Western Asset Management Company Ltd (“Western Asset Japan”) and Western Asset Management Company Pte. Ltd. (“Western Asset Singapore” and, collectively with Western Asset, Western Asset London and Western Asset Japan, the “subadvisers”), also serve as subadvisers to certain of the Funds, as shown on Appendix B. References to Western Asset in this proxy statement also includes the other subadvisers, as applicable.

² The Existing Boards, numbered 1 through 2 for purposes of this proposal and the relevant Appendices, are the Boards that currently oversee the Funds. The members of each Existing Board and the Funds overseen by each Existing Board are identified in Appendix C.

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¹ The Existing Boards, numbered 1 through 2 for purposes of this proposal and the relevant Appendices, are the Boards that currently oversee the Funds. The members of each Existing Board and the Funds overseen by each Existing Board are identified in Appendix C.

² Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

Reasons for Realignment and Board Unification

The Existing Boards believe that realigning the membership on the Boards into the Unified Board may provide benefits to the Funds. This is the result of discussions and meetings among the members of the Existing Boards and with management, during which the Existing Boards considered a number of practices for governance of the Funds. Among other things, the Existing Boards concluded that the establishment of the Unified Board, as opposed to continuing to have the two separate Existing Boards oversee the Funds, can be expected to: (1) promote efficient and effective communications among the Board Members with oversight responsibility for substantially all of the Western Asset-advised mutual funds within the Legg Mason fund complex; (2) promote enhanced governance capabilities, including by promoting consistency of policies and procedures across the Funds and the effectiveness of board oversight of the Funds, their management and other service providers, by affording an increased range of experience among Board Members, and by providing the Unified Board with greater flexibility than either Existing Board has to fill future Board vacancies, resulting from Board Member retirements or otherwise, without the time and expense of calling a shareholder meeting (to the extent permitted by applicable law, as described below); (3) promote a more efficient use of resources by management, which may enhance management’s productivity with respect to the Funds; and

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(4) improve the long-term prospects for attracting and retaining qualified individuals to serve as Board Members. Each Existing Board determined that the Funds it oversees are likely to benefit from the particular skill sets and other attributes of the Nominees who currently serve as members of other Western Asset-advised funds, who are knowledgeable of the role performed by board members of a registered investment company and are familiar with the specific entities and individuals responsible for managing the day-to-day operations of the Funds. Realigning the Existing Boards into the Unified Board is expected to reduce some Fund expenses over the long term, such as costs associated with holding Board and committee meetings. In addition, the Board realignment is expected to benefit Legg Mason management, whose reduced administrative burden and costs should allow management to devote more time and resources to providing services to the Funds and to high level strategic planning.

Upon the election of all ten Nominees, the Unified Board will have greater flexibility than either Existing Board has to fill future board vacancies, resulting from Board Member retirements or otherwise, occurring in between shareholder meetings without the time and expense associated with calling a shareholder meeting (to the extent permitted by applicable law), while also promoting the Unified Board’s ability to provide continuity as Board Member retirements occur over the years. In general, under the Investment Company Act of 1940, as amended (the “1940 Act”), a mutual fund must call a shareholder meeting to elect Board Members if at any time less than a majority of its board members were elected by shareholders. Moreover, a mutual fund board is permitted to fill any vacancy, for example those resulting from retirements, without calling a shareholder meeting if immediately after filing the vacancy at least two-thirds of the board members then holding office have been elected by shareholders. It has been over ten years since shareholders were last asked to elect Board Members of either Existing Board. Since that time, some Board Members have retired and others have been appointed by the remaining Board Members without calling a shareholder meeting, as permitted by applicable law. Neither Existing Board has a sufficient number of shareholder-elected Board Members to carry out the recommended Board unification initiative without shareholder approval. After the election of all ten Nominees at the Meeting, the Unified Board will have greater flexibility to fill future board vacancies than either Existing Board has at present.

In the absence of calling a shareholder meeting at this time to elect Board Members, under applicable law, the Corporation would not be able to maintain its current Board size without holding a shareholder meeting if any shareholder-elected Board Member were to retire or otherwise leave office. Moreover, the Corporation would be required by law to hold a shareholder meeting to elect Board Members if at any time two more shareholder-elected Board Members were to retire or otherwise leave office, assuming the membership of Existing Board 1 otherwise remained constant. As a result, in the absence of holding the Meeting at this time to elect the Unified Board, Existing Board 1 could find it necessary to call a meeting of shareholders to elect Board Members for reasons other than recommending Board unification.

Each Nominee has consented to serve on the Board to which he or she has been nominated if elected by shareholders. If, however, before the election, any Nominee refuses or is unable to serve, proxies may be voted for a replacement Nominee, if any, designated by the current Board Members.

The Nominees’ terms of office are expected to commence on or about January 1, 2020. Each Board Member will be elected to hold office until his or her successor is elected and qualifies or until his or her earlier death, resignation, retirement or removal.

The nominations of the Nominees listed below have been approved by each Existing Board and its Governance and Nominating Committee. Information about the Nominees for the Unified

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Board is set forth in the sections below. Each Board has determined that the number of its Board Members shall be fixed at the number of Board Members elected at the Meeting, subject to any further changes in Board size permitted by applicable law. Board Members of each Existing Board have had the opportunity to meet with their counterparts on the other board.

Current Board Members and Nominees

The current Board Members and Nominees for the Unified Board, their years of birth, their principal occupations during the past five years (their titles may have varied during that period), the number of Funds in the Fund complex he or she expects to oversee on or about January 1, 2020, following the formation of the Unified Board, subject to shareholder approval and scheduled retirements, and other board memberships they hold are set forth below. The address of each current Board Member and Nominee is c/o Jane E. Trust, Legg Mason, 100 International Drive, 11^th Floor, Baltimore, MD 21202. Each Nominee was recommended for nomination by the Existing Boards of the Funds.

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Qualifications of Current Board Members and Nominees

Each Existing Board believes that each of its current Board Member’s and each Nominee’s experience, qualifications, attributes or skills on an individual basis and in combination with those of its other current Board Members and the Nominees lead to the conclusion that the Board possesses the requisite skills and attributes. Each Existing Board believes that the Nominees’ and its current Board Members’ abilities to review, critically evaluate, question and discuss information provided to them, to interact effectively with the Manager, the subadvisers, other service providers, counsel and independent auditors, and to exercise effective business judgment in the performance of their duties, support this conclusion. The Existing Boards have considered the following experience, qualifications, attributes and/or skills, among others, of the Nominees in reaching its conclusion with respect to the Nominees and its current Board Members: his or her character and integrity; such person’s length of service as a board member of certain Funds; such person’s willingness to serve and willingness and ability to commit the time necessary to perform the duties of a Board Member; as to each Nominee other than Mr. Olson and Ms. Trust, his or her status as not being an “interested person” (as defined in the 1940 Act) of the Funds (each an “Independent Board Member”). In addition, the following specific experience, qualifications, attributes and/or skills apply as to the Nominees: Mr. Abeles, business, accounting and finance expertise and experience as a chief financial officer, board member and/or executive officer of various businesses and other organizations; Ms. Dasher, experience as a chief financial officer of a private investment company; Ms. DeFrantz, business expertise and experience as a president, board member and/or executive officer of various businesses and non-profit and other organizations; Ms. Kerley, investment consulting experience and background and mutual fund board experience; Mr. Poladian, business, finance and accounting expertise and experience as a board member of various businesses and/or as a partner of a multi-national accounting firm; Mr. Siart, business and finance expertise and experience as a president, chairperson, chief executive officer and/or board member of various businesses and non-profit and other organizations; Ms. Studenmund, business and finance expertise and experience as a president, board member and/or chief operating officer of various businesses; Mr. Olson, business and legal expertise and experience as a partner of a law firm and/or board member of various businesses and non-profit and other organizations; Mr. Taylor, business and finance expertise and experience as a

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chief financial officer, president and/or board member of various businesses and non-profit organizations; and Ms. Trust, investment management and risk oversight experience as an executive and portfolio manager and leadership roles within Legg Mason and affiliated entities. In addition, Existing Board 2 believes that the following specific experience, qualifications, attributes and/or skills apply as to its other current Board Members of Existing Board 2: Mr. Berv, experience as a chief executive officer and board member of various businesses and organizations and organizational consulting experience; Mr. Finn, investment management experience as an executive, consultant and portfolio manager; Mr. Gross, accounting background and experience as an officer and board member of various organizations; Ms. Heilbron, legal background, business and consulting experience; and Dr. Pettit, economic and finance background and academic management experience. References to the qualifications, attributes and skills of Nominees are pursuant to requirements of the SEC, do not constitute holding out of an Existing Board, the Unified Board or any Nominee as having any special expertise or experience, and shall not impose any greater responsibility or liability on any such person or on an Existing Board or the Unified Board by reason thereof.

General Information Regarding the Boards

Compensation: Information relating to compensation paid to the Nominees and current Board Members who serve on the Existing Boards for the Most Recent Year⁵ is set forth in Appendix C.

Equity Securities Owned by the Current Board Members and Nominees: Information relating to the amount of equity securities of the Funds and other funds in the Fund Complex owned by the current Board Members and the Nominees as of August 16, 2019 is set forth in Appendix D.

Attendance of Board Members at Annual Meeting: No Trust or Corporation has a policy with regard to attendance of Board Members at annual meetings. No annual meeting for any Trust or Corporation was held during the Most Recent Year.

Board Meetings: During the Most Recent Year Existing Board 1 met 6 times and Existing Board 2 met 5 times. Each incumbent Nominee and current Board Member attended more than 75% of the aggregate number of meetings of each Board and of each committee of each Board on which he or she served.

Board Leadership Structure, Oversight and Standing Committees of the Existing Boards: Information relating to the various standing committees of the Existing Boards is set forth in Appendix E.

Each Existing Board has determined that its leadership structure is appropriate given the business and nature of the Funds. In connection with its determination, each Existing Board considered that its Chairperson is an Independent Board Member. Each Chairperson can play an important role in setting the agenda of each Existing Board and also serves as a key point person for dealings between management and the other Independent Board Members. The Independent Board Members of each Existing Board believe that their Chairperson’s independence facilitates meaningful dialogue between management and the Independent Board Members. The Existing Boards also considered that the chairpersons of each Existing Board’s standing committees are Independent Board Members, which yields similar benefits with respect to the functions and activities of the various Existing Board standing committees (e.g., each standing committee’s

⁵ The term “Most Recent Year,” when used in Joint Proxy Statement and the relevant Appendices, refers to the calendar year ended December 31, 2018, which coincides with the last fiscal year of certain of the Funds, as shown in Appendix H.

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chairperson works with LMPFA and other service providers to set agendas for the meetings of the applicable Existing Board standing committees). As noted above, through the standing committees, the Independent Board Members consider and address important matters involving the Funds, including those presenting conflicts or potential conflicts of interest for management. The Independent Board Members also regularly meet outside the presence of management and are advised by independent legal counsel. The Existing Boards have determined that their standing committees help ensure that the Funds have effective and independent governance and oversight. Each Existing Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Board Members from management, including the subadviser. Each Existing Board reviews its structure on an annual basis.

As an integral part of their responsibility for oversight of each Fund in the interests of shareholders, each Existing Board oversees risk management of the Funds’ investment programs and business affairs. The function of the Existing Boards with respect to risk management is one of oversight, not active involvement in, or coordination of, day-to-day risk management activities for the Funds. The Existing Boards have emphasized to the Manager and subadviser the importance of maintaining vigorous risk management. The Existing Boards exercise oversight of the risk management process primarily through the standing committees of the Existing Boards, and through oversight by the Existing Boards.

The Funds face a number of risks, such as investment risk, counterparty risk, valuation risk, reputational risk, risk of operational failure or lack of business continuity, and legal, compliance and regulatory risk. Risk management seeks to identify and address risks, i.e., events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance or reputation of the Funds. Under the overall supervision of the Existing Boards or the applicable standing committees, the Funds, the Manager, the subadviser, and the affiliates of the Manager and the subadviser, or other service providers to the Funds, employ a variety of processes, procedures and controls to identify various of those possible events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur.

Different processes, procedures and controls are employed with respect to different types of risks. Various personnel, including the Funds’ and the Manager’s Chief Compliance Officer (“CCO”) and the Manager’s chief risk officer, as well as various personnel of the subadviser and other service providers such as the Funds’ independent accountants, report to the standing committees and/or to the Existing Boards with respect to various aspects of risk management, as well as events and circumstances that have arisen and responses thereto. These reports and other similar reports received by the Board Members as to risk management matters are typically summaries of the relevant information. The Board Members recognize that not all risks that may affect the Funds can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it is necessary for the Funds to bear certain risks (such as investment-related risks) to achieve their goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness.

Because most of the Funds’ operations are carried out by various service providers, each Existing Board’s oversight of the risk management processes of those service providers, including processes to address cybersecurity and other operational issues, is inherently limited.

Officers of the Funds

The officers of each Fund, their ages and their principal occupations during the past five years (their titles may have varied during that period) are set forth in Appendix G.

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Shareholder Approval

The election of Nominees to the Unified Board must be approved by a plurality of the votes cast in person or by proxy at the Meeting at which a quorum exists. The votes of each Fund in the same Trust or Corporation will be counted together with respect to the election of the Nominees to the Unified Board and the shareholders of each Fund will vote together as a single class with the shareholders of all other Funds that are series of the same Trust or Corporation.

Your Board recommends that you vote “FOR” the election of each of the Nominees to the Unified Board.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board Members, including a majority of the Independent Board Members, of each Fund have selected Pricewaterhouse Coopers LLP (“PwC”) as the independent registered public accounting firm for the Funds. No representatives of PwC will be present at the Meeting.

Appendix H sets forth for each Fund, for each of the applicable Fund’s two most recent fiscal years, the fees billed by the Fund’s independent registered public accounting firm for all audit and non-audit services provided directly to the Fund and each Fund’s fiscal year end month and day. The fee information in Appendix H is presented under the following captions:

(a) Audit Fees—fees related to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

(b) Audit-Related Fees—fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under “Audit Fees,” including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews not required by regulators.

(c) Tax Fees—fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis reviews.

(d) All Other Fees—fees for products and services provided to the Fund other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees.”

Existing Board 1’s Audit Committee pre-approves, to the extent contemplated by applicable regulations, audit and non-audit services rendered to the Fund by the auditors and non-audit services rendered to the Manager and certain of its affiliates by the independent registered public accounting firms, and review the fees charged by the independent registered public accounting firms for such services; provided, however, that the Existing Board 1’s Audit Committee may implement policies and procedures pursuant to which services are pre-approved other than by the full Existing Board 1’s Audit Committee, subject to the requirement that the full Existing Board 1’s Audit Committee be notified at its next meeting of each such service. Existing Board 1’s Audit Committee has delegated to its chairperson the authority, on behalf of Existing Board 1’s Audit Committee, to pre-approve audit and non-audit services rendered to the Funds and non-audit services rendered to the Manager and their affiliates by the independent registered public accounting firms; provided that any such pre-approval is reported to Existing Board 1’s Audit Committee not later than its next meeting.

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The charter of Existing Board 2’s Audit Committee requires that the Audit Committee shall approve (a) all audit and permissible non-audit services to be provided to each Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the investment adviser and any service providers controlling, controlled by or under common control with the investment adviser that provide ongoing services to the Fund (“Covered Service Providers”) if the engagement relates directly to the operations and financial reporting of the Fund. The Audit Committee may implement policies and procedures by which such services are approved other than by the full Committee.

Existing Board 2’s Audit Committee may not approve non-audit services that the Committee believes may impair the independence of the independent registered public accounting firms. Permissible non-audit services include any professional services (including tax services) that are not prohibited services as described below provided to the Fund by the independent registered public accounting firms, other than those provided to a Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include (a) bookkeeping or other services related to the accounting records or financial statements of the Fund; (b) financial information systems design and implementation; (c) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (d) actuarial services; (e) internal audit outsourcing services; (f) management functions or human resources; (g) broker or dealer, investment adviser or investment banking services; (h) legal services and expert services unrelated to the audit; and (i) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval by Existing Board 2’s Audit Committee of any permissible non-audit services is not required so long as: (a) the aggregate amount of all such permissible non-audit services provided to a Fund, LMPFA and any Covered Service Provider constitutes not more than 5% of the total amount of revenues paid to the independent registered public accounting firm during the fiscal year in which the permissible non-audit services are provided to (i) the Fund, (ii) the Manager and (iii) any Covered Service Provider during the fiscal year in which services are provided that would not have to be approved by the Committee; (b) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (c) such services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee (or its delegate(s)) prior to completion of the audit.

For each Fund’s two most recent fiscal years, there were no services rendered by PwC to the Funds for which the pre-approval requirement was waived.

Non-audit fees billed for services rendered to the Funds and the Manager or any entity controlling, controlled by or under common control with the Manager that provides ongoing services to the Funds during the last two fiscal years is presented in Appendix H under the caption “Aggregate Non-Audit Fees for Services Provided to Each Fund and its Affiliated Service Providers Pre-Approved by the Audit Committee.”

Each Audit Committee has considered whether the provision of non-audit services that were rendered by PwC to the Manager and Covered Service Providers that were not pre-approved (not requiring pre-approval) is compatible with maintaining such auditor’s independence. All services provided by PwC to each Fund, its Manager or Covered Service Providers that were required to be pre-approved were pre-approved as required.

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ADDITIONAL INFORMATION

5% Share Ownership

As of August 30, 2019, the persons listed in Appendix I owned of record the amounts indicated of the shares of the class of Funds indicated in Appendix I.

Submission of Shareholder Proposals

The Funds do not hold annual meetings of shareholders. A shareholder proposal intended to be presented at a future special meeting of shareholders of a Fund must be received at the offices of the Fund, 820 Eighth Avenue, New York, NY 10018, at a reasonable time before the Fund begins to print and mail its proxy materials. Timely submission of a proposal does not guarantee that such proposal will be included in a proxy statement.

Shareholder Communications

Shareholders who want to communicate with the Board or any individual Board Member should write their Fund to the attention of Robert I. Frenkel, Secretary, 100 First Stamford Place, Stamford, CT 06902. The letter should indicate that you are a Fund shareholder. If the communication is intended for a specific Board Member and so indicates, it will be sent only to that Board Member. If a communication does not indicate a specific Board Member, it will be sent to the chair of the governance and nominating committee and the outside counsel to the Independent Board Members for further distribution as deemed appropriate by such persons.

Additionally, shareholders with complaints or concerns regarding accounting matters may address letters to the Fund’s Chief Compliance Officer (“CCO”). Shareholders who are uncomfortable submitting complaints to the CCO may address letters directly to the Chair of the Audit Committee of the Board that oversees the Fund. Such letters may be submitted on an anonymous basis.

Expense of Proxy Solicitation

The cost of preparing, printing and mailing the enclosed proxy, accompanying notice and this Joint Proxy Statement and costs in connection with the solicitation of proxies will be borne by the Funds subject to any applicable expense limitations, under which management would bear the costs. It is expected that such costs and expenses will be allocated among the Funds on the basis of their respective net assets, except when direct costs can reasonably be attributed to one or more particular Funds. Each Fund’s portion of the foregoing expenses is subject to any contractual cap or voluntary agreement to waive fees and/or reimburse expenses that may otherwise apply to that Fund. Solicitation may be made by letter or telephone by officers or employees of the Manager, or by dealers and their representatives. 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. The Funds will reimburse brokerage firms, custodians, banks and fiduciaries for their expenses in forwarding this Joint Proxy Statement and proxy materials to the beneficial owners of each Fund’s shares. In addition, the Funds and Legg Mason have retained Computershare, a proxy solicitation firm, to assist in the solicitation of proxies. It is anticipated that Computershare will be paid approximately $[    ] for such solicitation services (including reimbursements of out-of-pocket expenses), to be borne by the Funds. Computershare may solicit proxies personally and by telephone.

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Fiscal Year

The fiscal year end of each Fund is as set forth in Appendix H.

Information Concerning the Manager, Subadvisers, Distributor and Administrator

LMPFA, 620 Eighth Avenue, New York, New York 10018, is the Funds’ investment manager and administrator.

Western Asset Management Company, LLC (formerly known as Western Asset Management Company) (“Western Asset”), is a subadviser to LMPFA with respect to the Funds. Western Asset Management Company Limited (“Western Asset London”), Western Asset Management Company Ltd (“Western Asset Japan”) and Western Asset Management Company Pte. Ltd. (“Western Asset Singapore” and, collectively with Western Asset, Western Asset London and Western Asset Japan, the “subadvisers”), also serve as subadvisers to certain of the Funds. Western Asset has offices at 385 East Colorado Boulevard, Pasadena, California 91101 and 620 Eighth Avenue, New York, New York 10018. Western Asset London has offices at 10 Exchange Square, Primrose Street, London EC2A 2EN. Western Asset Japan has offices at 36F Shin-Marunouchi Building, 5-1 Marunouchi 1-Chome Chiyoda-Ku, Tokyo 100-6536, Japan. Western Asset Singapore has offices at 1 George Street #23-01, Singapore 049145. Each Fund’s subadviser(s) is listed in Appendix B.

Legg Mason Investor Services, LLC (“LMIS”), 100 International Drive, Baltimore, Maryland 20202, is the distributor to all of the Funds except Government Portfolio, Liquid Reserves Portfolio, Tax Free Reserves Portfolio, U.S. Treasury Obligations Portfolio and U.S. Treasury Reserves Portfolio.

General

Management does not intend to present and does not have reason to believe that any other items of business will be presented at the Meeting. However, if other matters are properly presented to the Meeting for a vote, the proxies will be voted by the persons acting under the proxies upon such matters in accordance with their judgment of the best interests of the Fund.

Failure of a quorum to be present at the Meeting with respect to any Trust or the Corporation may result in one or more adjournments of the Meeting. The Meeting may, by action of the chair of the Meeting and without any action by shareholders, be adjourned from time to time without notice (other than announcement at the Meeting at which the adjournment is taken) with respect to one or more matters to be considered at the Meeting to a designated date, time and place, whether or not a quorum is present with respect to such matter. If the chair of the Meeting determines to submit to shareholders a proposal to adjourn the Meeting, whether or not a quorum is present, approval by the shareholders requires the vote of holders of a majority of the votes cast on the question and, if approved, the adjournment shall take place without further notice (other than announcement at the Meeting at which the adjournment is taken). If the question of adjournment is put to a shareholder vote, the persons named as proxies intend to vote in favor of adjournment those proxies that they are entitled to vote in accordance with the Board Members’ recommendation on Proposal 1. They intend to vote against adjournment those proxies required to be voted contrary to the Board Members’ recommendation on Proposal 1. Unless a proxy is otherwise limited in this regard, any shares present and entitled to vote at a meeting, including shares that are represented by broker non-votes, may, at the discretion of the proxies named

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therein, be voted in favor of such an adjournment. Adjournments of the Meeting may be proposed for a reasonable period or periods to permit further solicitation of proxies.

Please vote promptly by signing and dating each enclosed proxy card and returning it in the accompanying postage-paid return envelope OR by following the enclosed instructions to similarly providing voting instructions by telephone or over the Internet.

Robert I. Frenkel

Secretary

[    ], 2019

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Appendix A

Corporation, Trusts and Series

¹ Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

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Appendix B

Fund Information

The following table lists, with respect to each Fund, the name of the Fund’s subadviser(s), the total number of shares outstanding and the net assets of the Fund on the Record Date. The table also indicates, under “Manner of Voting,” whether a shareholder of a Fund is entitled to one vote for each share of that Fund held on the record date, or whether a shareholder of the Fund is entitled to vote based on the dollar value of shares held by the shareholder on the Record Date, so called “dollar-weighted” voting.

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¹ Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

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Appendix C

Compensation of the Current Board Members and Nominees

Existing Board 1

Existing Board 1 currently oversees the following Funds:

Information for the Most Recent Year* regarding compensation paid to the Board Members of Existing Board 1 by the Funds and all funds in the Legg Mason fund complex is set forth below. The Independent Board Members of Existing Board 1 receive an annual retainer plus fees for attending each regularly scheduled meeting and special Board meeting he or she attends in person or by telephone. The Independent Board Members of Existing Board 1 are also reimbursed for all out-of-pocket expenses relating to attendance at such meetings. Those Independent Board Members who serve in leadership positions of Existing Board 1, as well as each committee member, receive additional compensation. All such fees paid to the Independent Board Members of Existing Board 1 are aggregate fees for serving on the combined Board of Directors/Trustees of the Corporation, Western Asset Investment Grade Income Fund, Inc. and Western Asset Premier Bond Fund and such fees are allocated according to each such investment company’s average annual net assets. Existing Board 1 reviews the level of Board Member compensation periodically and Board Member compensation may change from time to time. Mr. Olson, an “interested person” (as defined in the 1940 Act) of the Corporation, receives from Western Asset an annual retainer plus fees for attending each regularly scheduled meeting and special Board meeting he attends in person or by telephone. Ms. Jane E. Trust, an “interested person,” as defined in the 1940 Act, of the Funds does not receive compensation from the Funds, but may be reimbursed for all out-of-pocket expenses relating to attendance at such meetings.

* The term “Most Recent Year,” when used in this Appendix C, refers to the calendar year ended December 31, 2018, which coincides with the last fiscal year of certain of the Funds, as shown in Appendix H. The disclosure of compensation paid to Board Members by all Funds for the Most Recent Year rather than, in certain instances, a Fund’s most recent fiscal year, is provided for ease of presentation and comprehension. The compensation structure for Board Members of all Funds, generally a yearly fee plus fees per meeting attended, has not been altered since the periods covered, but compensation of Board Members varies from period to period depending on the number of meetings attended. The Funds whose fiscal years do not coincide with the calendar year do not believe that the compensation of any of their Board Members would be materially greater if disclosed for the most recent fiscal years, after taking into account the number of meetings held in each period.

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Compensation Table ($)

¹ Information for the Most Recent Year.

² In addition to overseeing the seven funds of the Corporation, each Director also serves as a Director of Western Asset Investment Grade Income Fund, Inc. and a Trustee of Western Asset Premier Bond Fund (closed-end investment companies), which are considered part of the same Fund complex as the Corporation.

None of the Funds currently provides any pension or retirement benefits to Board Members of Existing Board 1 or officers.

Beginning March 1, 2019, Mr. Taylor was retained to provide services to the Independent Trustees of Existing Board 1 with respect to their oversight of Western Asset Funds, Inc. His compensation for these services, paid by Western Asset Funds, Inc., was set at an annual rate of $110,000. Mr. Taylor also serves (since March 1, 2019) as a Director and Trustee of Western Asset Investment Grade Income Fund Inc. (“PAI”) and Western Asset Premier Bond Fund (“WEA”), which are part of the Legg Mason fund complex. Mr. Taylor’s aggregate compensation for his Director/Trustee service to PAI and WEA during calendar year 2019 is expected to be less than $10,000.

As of August 16, 2019, all Board Members of Existing Board 1 and officers as a group owned less than 1% of the outstanding shares of each Fund.

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Existing Board 2

Existing Board 2 currently oversees the following Funds:

¹ Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

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Information for the Most Recent Year regarding compensation paid to the Board Members of Existing Board 2 by the Funds is set forth below. The Independent Board Members of Existing Board 2 receive an annual retainer plus fees for attending each regularly scheduled meeting and special Board meeting he or she attends in person or by telephone. The Independent Board Members of Existing Board 2 are also reimbursed for all out-of-pocket expenses relating to attendance at such meetings. Those Independent Board Members who serve in leadership positions of Existing Board 2, as well as each committee member, receive additional compensation. All such fees paid to the Independent Board Members of Existing Board 2 are aggregate fees for serving on the combined Board of Trustees of the Trusts listed above and such fees are allocated according to each such investment company’s average annual net assets. Existing Board 2 reviews the level of Board Member compensation periodically and Board Member compensation may change from time to time. Ms. Jane E. Trust, an “interested person,” as defined in the 1940 Act, of the Funds does not receive compensation from the Funds, but may be reimbursed for all out-of-pocket expenses relating to attendance at such meetings.

The terms of office of Elliott J. Berv, Mark T. Finn, Stephen R. Gross, Susan M. Heilbron, and R. Richardson Pettit, current members of Existing Board 2, will not continue with respect to the Funds once the Unified Board takes office on or about January 1, 2020. Messrs. Berv, Finn and Pettit are retiring from service as Board Members of Legg Mason funds. Mr. Pettit is retiring upon reaching the current retirement age of Existing Board 2. Messrs. Berv and Finn will be retiring one year before the current retirement age of Existing Board 2. Each of Messrs. Berv and Finn will receive payments from the Funds overseen by Existing Board 2 equal to the amount of Board Member compensation he would have received had he continued to be a member of Existing Board 2 in 2020, of approximately $296,000 and $316,000, respectively. Each Fund overseen by Existing Board 2 will pay a proportionate share (based on asset size) of these amounts. Legg Mason or its affiliates will reimburse the Funds for these payments, which may include waivers of management fees payable by the Funds to LMPFA. As of February 6, 2019, Ms. Heilbron and Mr. Gross serve as Trustees to certain other funds within the Legg Mason fund complex that are not overseen by either Existing Board.

Compensation Table ($)

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¹ Information for the Most Recent Year.

² Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

None of the Funds currently provides any pension or retirement benefits to Board Members of Existing Board 2 or officers.

As of August 16, 2019, all Board Members of Existing Board 2 and officers as a group owned less than 1% of the outstanding shares of each Fund.

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Appendix D

Equity Securities Owned

The following table shows the amount of equity securities owned by the current Board Members and Nominees in the Funds that they oversee or are nominated to oversee as of August 16, 2019.

¹ Prior to September 27, 2019, the Western Asset Mortgage Backed Securities Fund.

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None of the current independent Board Members or independent Nominees or their family members had any interest in the Manager, subadvisers, LMIS, or any person directly or indirectly controlling, controlled by, or under common control with the Manager, subadvisers or LMIS as of August 16, 2019.

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Appendix E

Standing Committees of the Existing Boards

The business and affairs of each Trust or Corporation are managed by or under the direction of its Board.

Audit Committee. Each Existing Board has a standing Audit Committee comprising all of its Board Members who are Independent Board Members and who are “independent,” as defined in the New York Stock Exchange listing standards. The Audit Committee members of Existing Board 1 are: Robert Abeles, Jr., Anita L. DeFrantz, Avedick B. Poladian, William E. B. Siart, and Jaynie Miller Studenmund. The Audit Committee members of Existing Board 2 are: Elliott J. Berv,¹ Jane F. Dasher, Mark T. Finn,¹ Stephen R. Gross,¹ Susan M. Heilbron,¹ Susan B. Kerley, and R. Richardson Pettit.¹ The primary purposes of each Board’s Audit Committee are to assist the Board in fulfilling its responsibility for oversight of the integrity of the accounting, auditing and financial reporting practices of the Trust or Corporation, the qualifications and independence of the Trust’s or Corporation’s independent registered public accounting firm, and the Trust’s or Corporation’s compliance with legal and regulatory requirements. The Audit Committee reviews the scope of the Trust’s or Corporation’s audit, accounting and financial reporting policies and practices and internal controls. The Audit Committee approves, and recommends to the Independent Board Members for their ratification, the selection, appointment, retention or termination of the Trust’s or Corporation’s independent registered public accounting firms. The Audit Committee also approves all audit and permissible non-audit services provided by the Trust’s or Corporation’s independent registered public accounting firms to the Manager and any affiliated service providers if the engagement relates directly to a Trust’s or the Corporation’s operations and financial reporting of the Trust or Corporation. During the Most Recent Year, each Audit Committee met the following number of times:

Governance and Nominating Committee. Each Existing Board has a standing Governance and Nominating Committee comprising all of its Board Members who are Independent Board Members. The Governance and Nominating Committee members of Existing Board 1 are: Robert Abeles, Jr., Anita L. DeFrantz, Avedick B. Poladian, William E. B. Siart, and Jaynie Miller Studenmund. The Governance and Nominating Committee members of Existing Board 2 are: Elliott J. Berv,¹ Jane F. Dasher, Mark T. Finn,¹ Stephen R. Gross,¹ Susan M. Heilbron,¹ Susan B. Kerley, and R. Richardson Pettit¹. Each Governance and Nominating Committee is responsible for, among other things, recommending candidates to fill vacancies on the Board. Each Governance and Nominating Committee met the following number of times in the Most Recent Year:

¹ Current Board Member of Existing Board 2 whose term of office as a Trustee of the Trusts will not continue once the Unified Board takes office on or about January 1, 2020. Messrs. Berv, Finn and Pettit are retiring from service as Board Members of Legg Mason funds. As of February 6, 2019, Ms. Heilbron and Mr. Gross serve as Trustees to certain other funds within the Legg Mason fund complex that are not overseen by either Existing Board.

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The Governance and Nominating Committee of Board 1 must consider nominees recommended by a shareholder, as may the Governance and Nominating Committee of Board 2. Appendix F provides a full description of Board 1’s Nominating Committees process. Shareholders who wish to recommend a nominee should send recommendations to a Trust’s or the Corporation’s Secretary that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board Members as described in the Governance and Nominating Committee charter for each Trust or Corporation found in Appendix F. A recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders. A copy of the Governance and Nominating Committee charter for each Trust or Corporation is included in Appendix F. The Governance and Nominating Committees’ charters are not currently made available on the Funds’ websites.

Each Governance and Nominating Committee also identifies potential nominees through its network of contacts and may also engage, if it deems appropriate, a professional search firm. The Committee meets to discuss and consider such candidates’ qualifications and then chooses a candidate by majority vote. Existing Board 1’s Governance and Nominating Committee requires that a nominee have a college degree or equivalent business experience whereas Existing Board 2’s Governance and Nominating Committee does not have specific, minimum qualifications for nominees. None of the Governance and Nominating Committees has established specific qualities or skills that it regards as necessary for one or more of the Board Members to possess (other than any qualities or skills that may be required by applicable law, regulation or listing standard). However, in evaluating a person as a potential nominee to serve as a Board Member, the Governance and Nominating Committee of Board 1 may consider the following factors, among any others it may deem relevant:

In evaluating a person as a potential nominee to serve as a Board Member, the Governance and Nominating Committee of Board 2 may consider the following factors, among any others it may deem relevant:

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The Existing Boards have additional standing committees, as follows:

Existing Board 1

Existing Board 1 has an Executive and Contracts Committee that is charged with reviewing and considering various contractual arrangements between the Corporation and its affiliated persons. The Executive and Contracts Committee members are: Robert Abeles, Jr., Anita L. DeFrantz, Avedick B. Poladian, William E. B. Siart, and Jaynie Miller Studenmund. During the Most Recent Year, the Executive and Contracts Committee met 2 times.

Existing Board 2

Existing Board 2 has an Investment and Performance Committee that is charged with reviewing investment performance and assisting the Board in fulfilling its responsibility for the review and negotiation of the Funds’ investment management and subadvisory arrangements. The members of the Investment and Performance Committee are: Elliott J. Berv,² Jane F. Dasher, Mark T. Finn,² Stephen R. Gross,² Susan M. Heilbron,² Susan B. Kerley, and R. Richardson Pettit². During the Most Recent Year, the Investment and Performance Committee met 4 times.

Committee Structure of Unified Board

The Existing Boards expect that, if the Nominees are elected, the Unified Board will establish the following four standing committees, comprising some or all of the Independent Board Members, with similar functions and responsibilities that are currently assigned to each corresponding committee of the Existing Boards (except as noted): an audit committee, a governance and nominating committee, an executive and contracts committee and an investment and performance committee. The Existing Boards expect that the investment and performance committee of the Unified Board would be charged with reviewing the investment performance of the Funds, while the Executive and Contracts Committee would be charged with reviewing and considering various contractual arrangements between the Funds and their affiliated persons. The Unified Board could choose to adopt a different committee structure or to modify its committee structure, or any other aspect of its governance structure, at any time.

² Current Board Member of Existing Board 2 whose term of office as a Trustee of the Trusts will not continue once the Unified Board takes office on or about January 1, 2020. Messrs. Berv, Finn and Pettit are retiring from service as Board Members of Legg Mason funds. As of February 6, 2019, Ms. Heilbron and Mr. Gross serve as Trustees to certain other funds within the Legg Mason fund complex that are not overseen by either Existing Board.

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Appendix F

Governance and Nominating Committee Charter

(Existing Board 1)

WESTERN ASSET INVESTMENT GRADE INCOME FUND, INC.

WESTERN ASSET FUNDS, INC.

WESTERN ASSET PREMIER BOND FUND

GOVERNANCE AND NOMINATING COMMITTEE CHARTER

As of March 29, 2018

Purposes and Organization

The purpose of the Governance and Nominating Committee of the respective Boards of Directors/Trustees (each a “Board”) of Western Asset Investment Grade Income Fund, Inc., Western Asset Funds, Inc., and Western Asset Premier Bond Fund (each a “Fund”) is to review matters pertaining to the composition, committees, compensation, and operations of the Boards. Members of the Committee may not be “interested persons” of a Fund, as such term is defined in the Investment Company Act of 1940, as amended (“Interested Persons”). This Charter applies separately to each Fund and its Governance and Nominating Committee, and shall be interpreted accordingly. The Committee shall have the following duties and powers:

The Committee shall have the resources and authority appropriate to discharge its responsibilities.

The Committee shall meet on a regular basis and be empowered to hold special meetings, as circumstances require. Any action of the Committee shall be taken by the affirmative vote of a majority of the members. Any action of the Committee with respect to Western Asset Income Fund or Western Asset Funds, Inc. may be taken without a meeting if all members of the Committee consent thereto in writing. Any action of the Committee with respect to Western Asset Premier Bond Fund may be taken without a meeting if at least a majority of the members of the Committee consent thereto in writing.

Qualifications for Director/Trustee Nominees

The Committee requires that Director/Trustee candidates have a college degree or equivalent business experience. The Committee may take into account a wide variety of factors in considering Director/Trustee candidates, including (but not limited to): (i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities on the

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Board, (ii) relevant industry and related experience, (iii) educational background, (iv) financial expertise, (v) an assessment of the candidate’s ability, judgment and expertise and (v) overall diversity of the Board’s composition.

Identification of Nominees

In identifying potential nominees for the Board, the Committee may consider candidates recommended by one or more of the following sources: (i) a Fund’s current Directors/Trustees, (ii) a Fund’s officers, (iii) a Fund’s investment adviser(s), (iv) a Fund’s shareholders (see below) and (v) any other source the Committee deems to be appropriate. The Committee may, but is not required to, retain a third party search firm at the expense of the Funds to identify potential candidates.

Consideration of Candidates Recommended By Shareholders

The Committee will consider and evaluate nominee candidates properly submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. Appendix A to this Charter, as it may be amended from time to time by the Committee, sets forth procedures that must be followed by shareholders to properly submit a nominee candidate to the Committee (recommendations not properly submitted in accordance with Appendix A will not be considered by the Committee).

Appendix A

Procedures for Shareholders to Submit Nominee Candidates

(As of March 29, 2018)

A Fund shareholder must follow the following procedures in order to properly submit a nominee recommendation for the Committee’s consideration.

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(Existing Board 2)

Revised February, 2011

Revised November 2017

Fixed Income Board

Governance and Nominating Committee Charter

Establishment and Purpose

This document serves as the Charter for the Governance and Nominating Committee (the “Committee”) of the Board of each registered investment company (the “Trust”) listed in Appendix A hereto and each series thereof (each, a “Fund”). The primary purposes of the Committee are to

Duties and Responsibilities

The Committee shall:

Nominating

Governance

The Committee may also carry out any other duties or responsibilities delegated to the Committee by the Board from time to time.

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain, as it deems necessary to carry out its duties, special counsel and other experts or consultants at the expense of the Fund. The Fund shall provide appropriate funding, as determined by the Committee, for the Committee to carry out its duties and its responsibilities, including (a) for payment of compensation to any outside legal, accounting or other advisors, counsel or consultants employed by the Committee and (b) for the ordinary administrative expenses of the Committee. In performing its duties, the Committee shall

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consult as it deems appropriate with the members of the Board, officers and employees of the Fund, the Fund’s investment manager, the Fund’s sub-adviser(s), if any, the Fund’s counsel, counsel to the Independent Trustees and the Fund’s other service providers.

Evaluation of Potential Nominees

In evaluating a person as a potential nominee to serve as a Trustee of the Trust, the Committee should consider among other factors it may deem relevant:

While the Committee is solely responsible for the selection and nomination of Trustees, the Committee may consider nominees recommended by Fund shareholders as it deems appropriate. Shareholders who wish to recommend a nominee should send nominations to the Secretary of the Trust that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Trustees. The recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the stockholders.

After a determination by the Committee that a person should be selected and nominated as a Trustee of the Trust, the Committee shall present its recommendation to the full Board for its consideration.

Composition

The Committee shall be composed solely of such number of Trustees who have been determined not to be “interested persons,” as that term is defined in Section 2(a)(19) of the 1940 Act, of the Trust (“Independent Trustees”) as the Board of the Trust may specifically determine and reflect in the Board’s minutes. The Committee shall elect a Chairperson, who shall preside over Committee meetings. The Chairperson shall serve for a term of three years, which term may be renewed.

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Meetings

The Committee shall meet on a regular basis, but not less frequently than twice a year. Special meetings may also be held upon reasonable notice to the members of the Committee. An agenda shall be established for each meeting. Meetings of the Committee may be held in person, by telephone or by other appropriate means. The Committee may take action by unanimous written consent in lieu of a meeting.

One-third of the Committee’s members, but not fewer than two members, shall constitute a quorum. At any meeting of the Committee, the decision of a majority of the members present and voting shall be determinative as to any matter submitted to a vote.

Reporting

The Chairperson shall report regularly to the Board on the results of the Committee’s deliberations and make such recommendations as deemed appropriate.

Amendments

This Charter may be amended by a vote of the majority of the Trustees.

Appendix A

Legg Mason Partners Income Trust

Legg Mason Partners Variable Income Trust

Legg Mason Partners Money Market Trust

Legg Mason Partners Premium Money Market Trust

Legg Mason Partners Institutional Trust

Master Portfolio Trust

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Appendix G

Officers of the Funds

The officers of each Fund, their ages and their principal occupations during the past five years (their titles may have varied during that period) are shown in the tables below. The address of each officer is 100 International Drive, Baltimore, MD 21202, unless otherwise indicated. Officers receive no compensation from the Funds, although they may be reimbursed for reasonable travel expenses for attending meetings of the Boards. Each officer is an “interested person” of the Trust or Corporation of which the Fund is a part, as defined in the 1940 Act, by virtue of that individual’s position with Legg Mason or its affiliates described in the table below.

Officers Common to All Funds

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¹ If an officer has held offices for different Funds for different periods of time, the earliest applicable date is shown. Each officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

² Ms. Trust also currently serves as a trustee on Existing Board 2.

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Appendix H

Audit Fees, Audit-Related Fees, Non-Audit Fees, Tax Fees and All Other Fees

to Independent Registered Public Accountants

Audit Fees, Audit-Related Fees and Non-Audit Fees

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Tax Fees and All Other Fees

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