Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/X/ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Salomon Brothers Fund Inc
(Name of Registrant as Specified In Its charter)
Payment of Filing Fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it is determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statements
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
The Salomon Brothers Fund Inc
7 World Trade Center New York, New York 10048
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 6, 1997
To the Stockholders:
The Annual Meeting of Stockholders of The Salomon Brothers Fund Inc (the
"Fund") will be held at 7 World Trade Center, 2nd Floor Auditorium, New York,
New York, on Tuesday, April 29, 1997, at 1:00 p.m., for the purposes of
considering and voting upon the following:
1. The election of directors (Proposal 1);
2. Approval of an Amendment to the Investment Management
Agreement to Increase the Base Fee Component of the
Management Fee (Proposal 2);
3. Approval of Amended and Restated Articles of Incorporation
(Proposal 3);
4. The ratification of the selection of Price Waterhouse LLP
as the independent accountants of the fund for the fiscal
year ending December 31, 1997 (Proposal 4); and
5. Any other business that may properly come before the
meeting.
The close of business on February 26, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting.
By Order of the Board of Directors,
Jennifer G. Muzzey
Secretary
<PAGE>
TO AVOID UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU
to indicate voting instructions on the enclosed proxy, date and sign it and
return it promptly in the envelope provided, no matter how large or how small
your holdings may be.
<PAGE>
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form
of registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. . . . . . . . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp. . . . . . . . . . . . . . . . . . John Doe
c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan . . . . . . . John Doe, Trustee
Trust Accounts
(1) ABC Trust . . . . . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee . . . . . . . . . . . . Jane B. Doe
u/t/d/ 12/28/78
Custodial or Estate Accounts
(1) John B. Smith, Cust. . . . . . . . . . . . John B. Smith
f/b/o/ John B. Smith, Jr. UGMA
(2) John B. Smith . . . . . . . . . . . . . . . John B. Smith, Jr.,
Executor
<PAGE>
The Salomon Brothers Fund Inc
7 World Trade Center New York, New York 10048
_______________________
PROXY STATEMENT
This proxy statement is furnished in connection with a
solicitation by the Board of Directors of The Salomon Brothers Fund Inc (the
"Fund") of proxies to be used at the Annual Meeting of Stockholders of the Fund
to be held at 7 World Trade Center, 2nd Floor, New York, New York, on
Tuesday, April 29, 1997 at 1:00 p.m. (and at any adjournment or adjournments
thereof) for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders (the "Meeting"). This proxy statement and the
accompanying form of proxy are first being mailed to stockholders on or about
March 6, 1997. Stockholders who execute proxies retain the right to revoke them
in person at the Annual Meeting or by written notice received by the Secretary
of the Fund at any time before they are voted. Unrevoked proxies will be voted
in accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the election of directors and FOR proposals 2, 3
and 4. The close of business on February 26, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. Each stockholder is entitled to one vote for each full share and
an appropriate fraction of a vote for each fractional share held. On February
26, 1997, there were __________ shares of Common Stock outstanding.
In accordance with the Fund's By-Laws, a quorum is constituted by
the presence in person or by proxy of the holders of record of a majority of
the outstanding shares of the Fund's Common Stock entitled to vote at the
Meeting. In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to a date not more than 120 days after the
original record date to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. The persons named as proxies
will vote those proxies which they are entitled to vote FOR or AGAINST any such
proposal in their discretion. A stockholder vote may be taken on one or more of
the proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received for approval. Abstentions and Broker Non-
Votes (reflected by signed but unvoted proxies), as defined below, do not count
as votes cast with respect to any proposal. With respect to a proposal
requiring the affirmative vote of a majority of the outstanding shares of
Capital Stock, the effect of abstentions and Broker Non-Votes is the same as a
vote against such proposal. "Broker Non-Votes" are shares held in the name of
a broker or nominee for which an executed proxy is received by the Fund, but
are not voted on the proposal because voting instructions have not been
received from the beneficial owners or persons entitled to vote and the broker
or nominee does not have discretionary voting power.
Salomon Brothers Asset Management Inc ("SBAM"), whose principal
business address is 7 World Trade Center, New York, New York 10048, is the
Fund's investment adviser and administrator.
<PAGE>
Proposal 1: Election of Directors
At the meeting ten directors are to be elected to hold office
until the next Annual Meeting and until their successors are elected and
qualified. Unless authority is withheld, it is the intention of the persons
named in the proxy to vote the proxy FOR the election of the nominees named
below. Each nominee has indicated that he will serve if elected, but if any
nominee should be unable to serve, the proxy will be voted for any other person
determined by the persons named in the proxy in accordance with their judgment.
Each nominee has previously been elected a director by stockholders of the
Fund.
<PAGE>
The following table provides information concerning each nominee for
election as a director:
<TABLE>
<CAPTION>
Common Stock
Beneficially
Owned, Directly
or Indirectly, on
December 31, 1996
Director ---------------------
Nominees and Principal Occupations During the Past Five Years Since Age Shares<F2>
------------------------------------------------------------------ -------- ---- ---------------------
<S> <C> <C> <C>
Charles F. Barber, Member of Audit Committee; Consultant; formerly 1982 80 10,335
Chairman of the Board, ASARCO Incorporated.
Andrew L. Breech, Member of the Proxy Committee; President, Dealer 1991 44 2,814
Operating Control Service, Inc.
Thomas W. Brock<F1>, Managing Director, Chairman and Chief 1995 49 57,990
Executive Officer, Salomon Brothers Asset Management Inc; Managing
Director and Member of the Management Board of Salomon Brothers
Inc; Director, SBAM Limited; Director, Chairman and Chief and
Chief Executive Officer, SBAM Asia Pacific Limited and Director,
SBAM Japan Limited.
Carol L. Colman, Member of Audit Committee; President, Colman 1992 51 3,862
Consulting Co., Inc.
William R. Dill, Member of Nominating Committee; President, Boston 1985 66 2,048
Architectural Center; formerly President, Anna Maria College;
Consultant.
Michael S. Hyland<F1>, Chairman and President; President and 1992 51 1,681
Managing Director, Salomon Brothers Asset Management Inc and
Managing Director, Salomon Brothers Inc; Chairman, SBAM Limited;
Director, SBAM Japan Limited and Chairman, SBAM Ireland Limited.
Clifford M. Kirtland, Jr., Member of the Proxy Committee; formerly, 1987 73 969
Member of Nominating Committee; Director, Oxford Industries, Inc.,
Shaw Industries, Inc. and Graphic Industries, Inc.; formerly
Chairman and President, Cox Communications.
Robert W. Lawless, Member of the Proxy Committee; President and 1991 60 1,800
Chief Executive Officer, University of Tulsa, formerly President
and Chief Executive Officer, Texas Tech University and Texas Tech
University Health Sciences Center.
Louis P. Mattis, Member of Nominating Committee; Consultant; 1991 55 1,180
formerly Chairman and President, Sterling Winthrop Inc.; formerly
Executive Vice President of Richardson-Vicks, Inc.
Thomas F. Schlafly, Member of Audit and Nominating Committees; Of 1986 48 3,000
Counsel to Peper, Martin, Jensen, Maichel & Hetlage (attorneys);
President, The Saint Louis Brewery, Inc.
______________________
<FN>
<F1> "Interested person," as defined in the Investment Company Act of 1940,
as amended (the "1940 Act").
<F2> The holdings of no nominee represented more than 1% of the outstanding
shares of the Fund's Common Stock as of December 31, 1996. Each nominee
has sole voting and investment power with respect to the listed shares.
</TABLE>
<PAGE>
Responsibilities of the Board of Directors
The Board of Directors is responsible for ensuring that the Fund
is managed in the best interests of its stockholders. The Directors oversee the
Fund's business by, among other things, meeting with the Fund's management and
evaluating the performance of the Fund's service providers including SBAM, the
custodian, the transfer agent and the sub-administrator. As part of this
process, the Directors consult with the Fund's independent auditors and with
their own separate independent counsel.
The Board of Directors has four regularly scheduled meetings each
year and additional meetings are scheduled as needed. In addition, the Board
has an audit committee, proxy committee and nominating committee, which meet
periodically during the year and whose responsibilities are described below.
The Directors regularly review the Fund's financial statements,
performance and market price as well as the quality of the services being
provided to the Fund. As part of this process, the Directors review the Fund's
fees and expenses to determine if they are reasonable and competitive in light
of the services being received and while also ensuring that the Fund continues
to have access to high quality services in the future. Based on these reviews,
the Directors periodically make suggestions to the Fund's management and
monitor to ensure that responsive action is taken. The Directors also monitor
potential conflicts of interest among the Fund, SBAM and its affiliates and
other funds and clients managed by SBAM to ensure that the Fund is managed in a
manner which is in the best interests of the Fund's stockholders.
Each of the directors serves as a director of certain other U.S.-
registered investment companies, as described below. Messrs. Hyland and Barber
serve as directors for thirteen other investment companies advised by SBAM. Mr.
Barber also serves as a director for two investment companies advised by
Advantage Advisers, Inc. Mr. Brock serves as a director for five other
investment companies advised by SBAM. Messrs. Breech, Dill, Kirtland, Lawless,
Mattis and Schlafly serve as directors of two other investment companies
advised by SBAM. Ms. Colman serves as a director of four other investment
companies advised by SBAM.
At December 31, 1996, directors and officers of the Fund as a
group owned beneficially less than 1% of the outstanding shares of the Fund's
Common Stock. To the knowledge of management, no person owned of record or
owned beneficially more than 5% of the Fund's shares of Common Stock
outstanding at that date, except that Cede & Co., a nominee for participants
in Depository Trust Company, held of record shares, equal to approximately
% of the outstanding shares of the Fund.
Section 16(a) of the Securities Exchange Act of 1934 and Section
30(f) of the 1940 Act in combination require the Fund's directors and officers,
persons who own more than ten percent of the Fund's Common Stock, SBAM, and
SBAM's directors and officers, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange, Inc. The Fund believes that all relevant persons have complied with
applicable filing requirements.
The Fund's executive officers are chosen each year at the first
meeting of the Board of Directors of the Fund following the Annual Meeting of
<PAGE>
Stockholders, to hold office until the meeting of the Board following the next
Annual Meeting of Stockholders and until their successors are chosen and
qualified. In addition to Mr. Hyland, the current executive officers of the
Fund are:
<TABLE>
<CAPTION>
Common Stock
Beneficially
owned, Directly
Officer or Indirectly,
Name Office Age Since on December 31, 1997
------ ------- ---- ------- --------------------
<S> <C> <C> <C> <C>
Richard E. Dahlberg Executive Vice President 58 1995 Shares<F1>
Allan R. White, III Executive Vice President 37 1992
Lawrence H. Kaplan Executive Vice President and 40 1995
General Counsel
Martin L. Roberts Vice President 60 1971
Michael A. Kagan Vice President 36 1996
Jennifer G. Muzzey Secretary 37 1997
Alan M. Mandel Treasurer 39 1995
<FN>
<F1> As of the this date, the executive officers of the Fund owned
individually and in the aggregate, less than 1% of the outstanding
shares of the Fund. Each executive officer has sole voting and
investment power with respect to the listed shares. Executive
officers and directors, as a group owned, as of this date, __________
shares, representing less the 1% of the outstanding shares of the Fund.
</TABLE>
Mr. Dahlberg has also been a Managing Director of SBAM and
Salomon Brothers Inc ("SBI") since January 1996, and Director of SBAM and SBI
since July 1995. Prior to July 1995, Mr. Dahlberg was a Senior
Vice President and Senior Portfolio Manager with Massachusetts Financial
Services ("MFS") where he managed the MFS Total Return Fund from 1985-1995. Mr.
White has also been a Managing Director of SBAM and SBI since January 1996.
From September 1992 to January 1996, Mr. White was a Director of SBAM and SBI,
and a Vice President of SBAM and SBI from May 1989 to September 1992. Mr.
Roberts has also been a Vice President of SBAM and SBI since May 1990. Mr.
Kagan has also been a Director of SBAM and SBI since January 1997. From
December 1994 to January 1997, he was a Vice President of SBAM and SBI. Mr.
Kagan also served as an analyst at Zweig Advisors from March 1993 to October
1994, as a Managing Director at Bentley Capital from June 1992 to January 1993
and an analyst and fund manager at Fidelity Investments for four years prior to
June 1992. Mr. Kaplan has been a Vice President and Chief Counsel of SBAM and a
Vice President of SBI since May 1995. Prior to May 1995, he was Senior Vice
President, Director and General Counsel of Kidder Peabody Asset Management,
Inc. and a Senior Vice President of Kidder, Peabody & Co. Incorporated. Mr.
Mandel has also been a Vice President of SBAM and SBI since January 1995. From
October 1991 through December 1994, he was Chief Financial Officer of Hyperion
Capital Management Inc. Ms. Muzzey has also been an employee of SBAM since
June 1994 and was an Assistant Vice President of SunAmerica Asset Management
Corporation prior to June 1994.
<PAGE>
The Fund's Audit Committee is composed of Ms. Colman and Messrs.
Barber and Schlafly. The principal functions of the Audit Committee are: (i) to
recommend to the Board the appointment of the Fund's independent accountants,
(ii) to review with the independent accountants the scope and anticipated cost
of their audit and (iii) to receive and consider a report from the independent
accountants concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. This Committee
did not meet during the fiscal year ended December 31, 1996.
The Fund's Nominating Committee, whose principal function is to
recommend nominees for election as directors of the Fund, is composed of
Messrs. Dill, Mattis and Schlafly. This Committee held one meeting in the year
ended December 31, 1996. The Nominating Committee will accept nominations for
the office of director made by the stockholders in a written request addressed
to the Secretary of the Fund which includes stockholders biographical data and
sets forth the qualifications of the proposed nominee.
The Fund's Proxy Committee, composed of Messrs. Breech, Lawless
and Kirtland, establishes and monitors the Fund's policy on voting proxies of
companies whose securities are held in the Fund's portfolio and determines the
manner in which proxies for the Fund's securities are voted. Such committee
held one meeting during the year ended December 31, 1996.
During the fiscal year ended December 31, 1996, the Board of
Directors met four times. Each director attended at least 75% of the aggregate
number of meetings of the Board and the committee for which he/she was eligible.
Under the federal securities laws, the Fund is required to
provide to stockholders in connection with the Annual Meeting information
regarding compensation paid to the directors by the Fund, as well as by the
various other investment companies advised by SBAM. The following table
provides information concerning the compensation paid to each director during
the twelve-month period ended December 31, 1996. Certain of the directors
listed below are members of the Audit Committee of the Fund and other
committees of certain other investment companies advised by SBAM, and,
accordingly, the amounts provided in the table include compensation for service
on such committees. Please note that the Fund does not provide any pension or
retirement benefits to directors. In addition, the Fund paid no remuneration
during the fiscal year ended December 31, 1996 to Messrs. Brock and Hyland
who, as employees of SBAM, are "interested persons" as defined in the 1940 Act.
<PAGE>
<TABLE>
<CAPTION>
Aggregate Total Compensation
Compensation from Other Funds
Name of Directors from the Fund Advised by SBAM Total Compensation
----------------- ------------------ ---------------------- ----------------------
Directorships<F1> Directorships<F1>
<S> <C> <C> <C>
Charles F. Barber . . . . . . . . . $ 11,250 $100,150 ( ) $111,400 ( )
Andrew L. Breech . . . . . . . . . $ 11,250 $ 15,500 ( ) $ 26,750 ( )
Carol L. Colman . . . . . . . . . . $ 11,250 $ 24,750 ( ) $ 36,000 ( )
William R. Dill . . . . . . . . . . $ 11,250 $ 15,500 ( ) $ 26,750 ( )
Clifford M. Kirtland, Jr. . . . . . $ 9,750 $ 12,500 ( ) $ 22,250 ( )
Robert W. Lawless . . . . . . . . . $ 10,500 $ 14,000 ( ) $ 24,250 ( )
Louis P. Mattis . . . . . . . . . . $ 11,250 $ 15,500 ( ) $ 26,750 ( )
Thomas F. Schlafly . . . . . . . . $ 11,250 $ 15,500 ( ) $ 26,750 ( )
______________________
<FN>
<F1> The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
</TABLE>
Required Vote
Directors are elected by a plurality of the votes cast by the
holders of shares of the Fund's Common Stock present in person or represented
by proxy at the Meeting with a quorum present. For purposes of the election of
directors, abstentions and broker non-votes will not be considered votes cast,
and do not affect the plurality vote required for directors.
MANAGEMENT UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" EACH OF THE NOMINEES FOR DIRECTOR.
Proposal 2: Approval of an Amendment to the Investment
Management Agreement to Increase the Base Fee
Component of the Management Fee
At a meeting held on January 28, 1997, the Board of Directors,
including all of the directors who are not "interested persons" of the Fund, as
defined in the 1940 Act, (the "Non-Interested Directors"), unanimously approved
an amendment to the Investment Management Agreement (the "Management
Agreement") with SBAM to increase the base fee component of the Fund's
management fee, subject to approval by the Fund's stockholders. The directors
unanimously recommend that the stockholders approve the amendment to the
Management Agreement. The Management Agreement as amended, marked to show
changes from the existing Management Agreement, is attached hereto as Exhibit
A. Except for the amendment set forth in this proposal, the terms of the
amended Management Contract are identical to the current terms.
In 1994, upon unanimous recommendation of the Fund's Board of
Directors, the Fund's stockholders approved a change in the structure of the
management fee payable by the Fund to SBAM to a performance-based fee
arrangement. Under this arrangement, the Fund pays SBAM a quarterly fee (the
"Base Fee") subject to increase or decrease (the "Performance Adjustment")
<PAGE>
depending on the extent, if any, to which the investment performance of the
Fund exceeds or is exceeded by the investment record of the S&P 500 Composite
Stock Price Index (the "S&P 500 Index") over a rolling one-year period
(i.e., four consecutive calendar quarters).
As more fully described below under the caption "Comparison of
the Current Management Fee with the Proposed Fee," the amendment described in
this proposal would increase the Base Fee by .15% at each existing breakpoint
level. The amendment would not change the terms of the Performance Adjustment.
Reasons for the Proposed Increase in the Base Fee Component and Factors
Considered by the Board of Directors
1. Reasons for the Proposed Change
SBAM has informed the Board of Directors that its goal has been
to strive for a high level of portfolio performance while maintaining the Base
Fee and total Fund expenses at levels that are generally no higher than the
median management fees and total expenses of the Fund's peer groups. In that
connection, as discussed in further detail below, according to information
provided by Lipper Analytical Services, Inc. ("Lipper"), the Fund's performance
over the past several years has been among the best while the Fund's Base Fee
and total expense ratio remains among the lowest as compared in each case with
investment companies judged by Lipper to be comparable to the Fund.<F1>
The Board believes that, under these circumstances, an increase
in the Base Fee is necessary and appropriate in order to ensure that SBAM is
able to remain competitive in attracting and retaining personnel. The Board
recognizes that the continuing success of the Fund is in large part dependent
on the quality of SBAM's personnel. In addition, the Board believes
that over the past several years SBAM has made a significant and ongoing
commitment of resources to the Fund. As a result of its efforts to attract and
retain highly trained and capable personnel, SBAM has continued to add
portfolio managers, securities analysts, traders and legal and other
administrative support staff to the teams supporting the Fund, many of whom
have relatively senior experience levels. The Board believes that the addition
of these individuals has benefitted the Fund in many respects, including
increasing both the coverage of the industries in which the Fund may invest and
portfolio management expertise generally, contributing to the Fund's highly
positive performance record. In addition, SBAM has added new technology and
systems for portfolio accounting and analysis and monitoring of the Fund's
holdings, as well as for securities valuation and risk management analysis.
In reaching its decision, the Board considered the fact that
Lipper ranked the Fund first among the six closed-end growth and income funds
tracked by Lipper for the one-, three- and five-year periods ended December 31,
1996 based on fund aggregate total returns. The Fund's aggregate total return
performance during the periods was 28.4%, 69.4% and 96.6% according to Lipper.
The Fund also ranked in the top 11% of all open- and closed-end growth and
income funds for the one and three year periods ended December 31, 1996 (which
include 528 and 335 funds, respectively) according to Lipper.<F2>
The Fund's share price performance also has been strong.
Share price returns for the year ended December 31, 1996 were 37.76%, compared
<PAGE>
to a 23.0% return for the S&P 500 Index. The Fund's share price performance
ranked first among the six closed-end growth and income funds tracked by Lipper
for the one and five year periods ended December 31, 1996. In addition,
Morningstar, another well-known fund ranking organization, recently upgraded
the Fund to a four star rating, its second highest, in the growth and income
category.<F3>
The information provided by Lipper also indicates that the Fund's
Base Fee and total expense ratio as of December 31, 1996 remain among the
lowest as compared to the contractual management fee rates and expense ratios
of the funds in its comparison groups (most of which do not have a performance
based fee arrangement), notwithstanding the 1994 restructuring of the management
fee. Moreover, even with the higher Base Fee and total expense ratio that are
proposed, the information supplied by Lipper indicates that on a pro forma
basis the Base Fee and total expense ratio as of December 31, 1996 would fall
below the median management fee rates and expense ratios of the funds in the
comparison groups.
The Board also considered comparisons of the Fund's effective
management fee rate (taking into consideration the Performance Adjustment).
The Fund's effective management fee rate as of December 31, 1996 (after a
year in which the Fund significantly outperformed the S&P 500 Index while
the Lipper Growth & Income Fund Index of 583 funds underperformed the S&P
500 Index) still fell below the median management fee rates of its peer
comparison groups. On a pro forma basis taking into account the increase set
forth in this proposal, the Fund's effective management fee would fall slightly
below or, with respect to one comparison group, slightly above the median
management fee rates of the funds in the comparison groups.
[FN]
<F1> Lipper is a nationally recognized organization that reports an open-end
closed-end fund total return performance. Lipper selects comparison
groups based on the following parameters: (1) fund type, (2) similarity
of investment objective, (3) load structure, (4) asset level
comparability, (5) expense components or structure and (6) primary
channel of distribution. The Fund was included in three comparison
groups -- the first consisting of the Fund and five closed- end
investment companies, the second consisting of the Fund and fourteen
open-end investment companies and, with respect to comparing the Fund's
total expenses, a third "expense universe" consisting of the Fund and
the five other closed-end funds in the first comparison group and all
open-end growth and income funds, as classified by Lipper, with average
net assets ranging between $500 million and $2.5 billion.
<F2> Lipper calculates fund rankings based on total returns. Total returns
are calculated based on changes in net asset value and assume the
reinvestment of dividends and distributions at the then-current net
asset value. Ranking results change monthly.
<F3> Morningstar ratings reflect risk-adjusted performance, are subject to
change monthly and are calculated from the subject fund's three-, five-
and ten-year average annual total returns in excess of the return on 90-
day Treasury bills. Average annual total returns include changes in
share price and reinvestment of dividends and distributions. Ten
percent of the funds in an investment category receive five stars and
22.5% receive four stars.
<PAGE>
2. Deliberations by the Board of Directors
A proposal for an increased management fee was presented by SBAM
to the Fund's Board of Directors at a meeting held on October 15, 1996. At this
meeting, SBAM presented the reasons discussed above to the Board as the basis
of its request for an increase in the management fee. On January 27, 1997, the
Non-Interested Directors met separately with their legal counsel and on
January 28, 1997, the entire Board of Directors convened. Information prepared
specifically for the purpose of assisting the Non-Interested Directors in
their evaluation of the proposed amendment included the analysis prepared
by Lipper of the comparative performance, management fee and expenses of the
Fund with the funds chosen by Lipper as comparable to the Fund, as discussed
above.
The Fund's legal counsel advised the Board of Directors on the
nature of the matters to be considered and the standards to be used by the
Board in approving the proposed fee. The Board, in consultation with its
legal counsel, extensively considered the reasons and factors discussed above,
particularly the fact that while the Fund's performance has been among the
best as compared with its peers, the current fees and expenses of the Fund at
existing asset levels are generally below those of comparative funds, and the
proposed fees and expenses would continue to be competitive with comparable
funds. Moreover, the Board evaluated the nature, quality and extent of services
furnished by SBAM and possible economies of scale, focusing especially on the
ongoing commitment of resources, as described above. SBAM's profitability with
respect to the Fund and the financial resources of SBAM were also considered.
The Board also considered the fact that in 1994 the Board and the Fund's
stockholders approved the introduction of a performance-based fee arrangement
which the Board expected to result in an increase in the management fee.
In light of the reasons discussed above however, the Board believes that the
increase set forth in this proposal is fair and reasonable and in the best
interests of the Fund's stockholders.
Comparison of the Current Management Fee with the Proposed Fee
1. The Current Fee
The Fund pays SBAM a quarterly fee subject to an increase or
decrease depending on the extent, if any, to which the investment performance
of the Fund exceeds or is exceeded by the investment record of the S&P 500
Index over a rolling one year period (i.e., four consecutive calendar
quarters).
(a) Calculation of the Base Fee
The Base Fee is based on the following annual rates:
Average Daily Net Assets Annual Fee Rate
First $350 million .500%
Next $150 million .400%
Next $250 million .375%
Next $250 million .350%
Over $1 billion .300%
<PAGE>
The Base Fee is accrued daily and paid quarterly.
(b) Calculation of the Performance Adjustment
For each percentage point by which the investment performance of
the Fund exceeds or is exceeded by the investment record of the S&P 500, the
Base Fee is adjusted upward or downward by .01% (annualized) with a maximum
annual adjustment of +/-.10%. The performance adjustments are accrued by the
Fund monthly and are paid quarterly, based on a rolling one-year period.
At the end of each calendar quarter, for each percentage point by
which the investment performance of the Fund exceeds or is exceeded by the
investment record of the S&P 500 Index over the one year period ending on the
last day of the calendar quarter for which the adjustment is being calculated,
the Base Fee is adjusted upward or downward by the product of (i) 1/4 of .01%
multiplied by (ii) the average daily net assets of the Fund for the one year
period preceding the end of the calendar quarter. If the amount by which the
Fund outperforms or underperforms the S&P 500 Index is not a whole percentage
point, a pro rata adjustment shall be made. However, there will be no
performance adjustment unless the investment performance of the Fund exceeds or
is exceeded by the investment record of the S&P 500 Index by at least one
percentage point. The maximum quarterly adjustment is 1/4 of .10%, which would
occur if the Fund's performance exceeds or is exceeded by the S&P 500 Index by
ten or more percentage points.
The investment performance of the Fund, for a period of one year,
shall mean the sum of: (i) the change in the Fund's net asset value per share
during such period; (ii) the value of cash distributions per share accumulated
to the end of such period; and (iii) the value of capital gains taxes per share
(if any) paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period, expressed as a percentage of its net
asset value per share at the beginning of such period. For this purpose, the
value of distributions per share of realized capital gains and of dividends per
share paid from investment income shall be treated as reinvested in shares of
the Fund at the net asset value per share in effect at the close of business on
the record date for the payment of such distributions and dividends, after
giving effect to such distributions and dividends. In addition, while the Fund
does not anticipate paying any taxes, the value of any capital gains taxes per
share paid or payable on undistributed realized long-term capital gains shall
be treated as reinvested in shares of the Fund at the net asset value per share
in effect at the close of business on the date on which provision is made for
such taxes, after giving effect to such taxes. However, notwithstanding the
foregoing, the investment performance of the Fund shall not include, and there
shall be excluded from the change in the net asset value per share for such
period and the value of the Fund's cash distributions per share accumulated to
the end of such period shall be adjusted for, any increase or decrease in the
investment performance of the Fund resulting from the issuance, sale or
repurchase of any shares of the Fund's capital stock or any other securities of
the Fund.
The investment record of the S&P 500 Index, for a period of one
year, shall mean the sum of: (i) the change in the level of the index during
such period; and (ii) the value, computed consistently with the index, of cash
distributions made by companies whose securities comprise the index accumulated
to the end of such period, expressed as a percentage of the index level at the
beginning of such period. For this purpose, cash distributions on the
securities which comprise the index shall be treated as reinvested in the index
<PAGE>
at least as frequently as the end of each calendar quarter following the
payment of the dividend.
2. The Proposed Fee Increase
The table below reflects the proposed fee amendment to the
management fee. As indicated in the table, it is proposed that the fee be
amended by increasing the Base Fee by .15% at each breakpoint level.
Average Daily Net Assets Annual Fee Rate
First $350 million .650%
Next $150 million .550%
Next $250 million .525%
Next $250 million .500%
Over $1 billion .450%
3. Effective Date of the Proposed Fee Structure
If approved by the Fund's stockholders, the amendment to the
Management Agreement will become effective on the first day of the month
following the date of stockholder approval, and the Management Agreement as
amended will remain in force until April 30, 1998, subject to continuance in
accordance with the provisions discussed below. If the amendment to the
Management Agreement is not approved by the stockholders, the Management
Agreement will continue in effect in accordance with its current terms. The
Fund's Board of Directors, including all of the Non-Interested Directors, has
unanimously approved the continuance of the Management Agreement until April
30, 1998, as amended and according to its current terms.
Fees Paid
For the fiscal year ended December 31, 1996, the management fee
paid to SBAM by the Fund was $5,894,684, comprised of a Base Fee of $5,367,764
and a Performance Adjustment of $526,920. If the proposed fee increase had
been in effect for this period, the Fund would have paid SBAM a management fee
of $7,980,441, comprised of a Base Fee of $7,453,521 and a Performance
Adjustment of $526,920. This represents a 35% increase of $2,085,757 from the
fee actually paid under the Management Agreement for such period.
Current and Pro Forma Fees and Expenses
The following expense table and example sets forth the unaudited
fees and expenses incurred by the Fund for its fiscal year ended December 31,
1996 and also sets forth pro forma fees and expenses of the Fund, assuming that
the proposed management fee had been in effect during this period.
Current and
Pro Forma
Stockholder Transaction
Expenses
Sales Charge
(as a
percentage
<PAGE>
of offering
price) . . None
Dividend
Reinvestment
and Cash
Purchase
Plan Fees . None
Current Pro Forma
Annual Expenses
(as a
percentage of
net assets
attributable
to common
shares)
Management Fees . . . .42% .57%
Interest Payments
on Borrowed
Funds . . . None None
Other Expenses . .09% .09%
Total Annual
Expenses .51% .66%
Example
The following table demonstrates the projected dollar amount of
total cumulative expenses that would be incurred over various periods with
respect to a hypothetical investment in the Fund. The example assumes payment
by the Fund of operating expenses at the levels set forth in the preceding
table and is also based upon the following assumptions:
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
Current Proposed
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
$5 $16 $29 $64 $7 $21 $37 $82
The purpose of the foregoing table and example to assist
investors in understanding the various costs and expenses that an investor in
the Fund would bear either directly or indirectly under the current and
proposed management fee. The payment of such costs and expenses will reduce
the investment return on an annual basis. Except where noted, the information
in the foregoing table does not reflect any fee waivers or reimbursement
arrangements that may be in effect.
The example should not be considered as representative of past or
future expenses and actual expenses for the Fund may be higher or lower than
the amounts shown in the fee tables. Moreover, while the example assumes a 5%
annual return, the Fund's performance will vary and may result in a return
greater or less than 5%.
<PAGE>
Services Provided by SBAM
Under the terms of the Management Agreement, SBAM manages the
operations of the Fund subject to the supervision of the Fund's Board of
Directors. SBAM manages the Fund's investment portfolio, directs purchases and
sales of the Fund's portfolio securities and reports on these matters to the
Fund's officers and directors. SBAM also furnishes office space and certain
other facilities required for conducting the business of the Fund and pays the
compensation of the Fund's officers, employees and directors affiliated with
SBAM.
In addition, SBAM is responsible for performing the
administrative and management services necessary for the Fund's operation and
providing the office space, facilities, equipment and personnel necessary
therefor. Among these services are: (i) Securities and Exchange Commission
compliance, including recordkeeping, reporting requirements and proxies; (ii)
supervision of Fund operations, including coordination of functions of the
transfer agent, custodian, accountants, counsel and other parties performing
services or operational functions for the Fund; (iii) administrative and
clerical services, including accounting services and maintenance of books and
records; and (iv) services to the Fund's stockholders, including responding to
stockholder inquiries and maintaining a flow of information to stockholders.
SBAM, however, has subcontracted to the Bank of New York ("BONY") certain
accounting functions to be performed for the Fund. For its services, SBAM pays
BONY a fee at an annual rate of approximately .01% of the Fund's average daily
net assets.
The Management Agreement was last approved by the Board on
January 28, 1997. The shareholders of the Fund approved an amendment to the
Management Agreement on April 21, 1994 to restructure the management fee.
The Management Agreement requires annual approval by the vote of
a majority of Non-Interested Directors cast in person at a meeting called for
the purpose of voting on such approval, and either by a vote of the Board of
Directors or a majority of the outstanding voting securities of the Fund. The
Management Agreement may be terminated, without any penalty, on 60 days'
written notice to SBAM by the Fund's Board of Directors or by vote of the
holders of a majority of the Fund's outstanding voting securities, or on 60
days' written notice to the Fund by SBAM and will automatically terminate in
the event of its assignment, as defined in the 1940 Act.
Brokerage Transactions with Salomon Brothers Inc
During the fiscal year ended December 31, 1996, the Fund paid
$1,654,893 in brokerage commissions to Salomon Brothers Inc ("SBI"), an
"affiliated broker-dealer," as defined in the 1940 Act. Commissions paid to
SBI in 1996 represented 9% of the total brokerage commissions paid by the Fund
and SBI executed less than [1]% of the aggregate dollar amount of Fund
transactions.
Information about SBAM
The table below provides certain information regarding other
registered investment companies advised by SBAM with similar investment
objectives to that of the Fund.
<PAGE>
<TABLE>
<CAPTION>
Management Fee
(as a Percentage of Aggregate Net
Average Net Assets as of
Name of Fund Assets) December 31, 1996
------------ ------------------- -----------------
<S> <C> <C>
Salomon Brothers Investors
Fund Inc ("Investors") . . First $350 million .500%<F4> $540,657,826
Next $150 million .400%
Next $250 million .375%
Next $250 million .350%
Over $400 million .300%
Plus, the Performance
Adjustment
Salomon Brothers
Capital Fund Inc . . . . First $100 million 1.00% $136,635,370
Next $100 million .75%
Next $100 million .625%
Over $400 million .50%
Salomon Brothers
Opportunity Fund Inc. . . 1.00% $158,810,429
The names and principal occupations of each executive officer and
director of SBAM are set forth in the following table. Unless otherwise
stated, the business address of each officer and director of SBAM is Seven
World Trade Center, New York, New York 10048.
<FN>
<F4> Stockholders of Investors are being asked to approve the same
increase in the Base Fee component as described herein.
</TABLE>
Position with SBAM and
Name Principal Occupation
Thomas W. Brock Chairman, Chief Executive Officer and
(Director of the Fund) Managing Director of SBAM and Managing
Director and Member of the Management
Board of SBI
Michael S. Hyland President, Managing Director and Member
(Chairman and President of the of Board of Directors of SBAM and
Fund) Managing Director of SBI
Rodney B. Berens Managing Director and Member of Board of
Directors of SBAM and Managing Director
and Member of the Management Board of SBI
Vilas Gadkari Managing Director of Member of Board of
Victoria Plaza, 111 Buckingham Directors of SBAM and Managing Director
Palace Road of SBI
London, England SW1W OSB
<PAGE>
Richard J. Carbone Treasurer of SBAM and Managing Director
of SBI
Zachary Snow Secretary of SBAM and Managing Director
and Counsel of SBI
SBAM is an indirect wholly-owned subsidiary of Salomon Brothers
Holding Company Inc ("SBHC"), which is in turn wholly-owned by Salomon Inc
("SI"), a public reporting company. SBHC and SI are located at Seven World
Trade Center, New York, New York 10048.
The following table lists the officers of the Fund, in addition
to Mr. Hyland, who are also officers or employees of SBAM.
Name Position with the Fund Position with SBAM
Richard E. Dahlberg Executive Vice President Managing Director
Allan R. White, III Executive Vice President Managing Director
Lawrence H. Kaplan Executive Vice President Vice President and Chief
and General Counsel Counsel
Michael A. Kagan Vice President Director
Martin L. Roberts Vice President Vice President
Alan M. Mandel Treasurer Vice President
Jennifer G. Muzzey Secretary Employee
Noel B. Daugherty Assistant Secretary Employee
Janet S. Tolchin Assistant Treasurer Investment Accounting
Manager
Reji Paul Assistant Treasurer Investment Accounting
Manager
Required Vote
Approval of the amendment to the Management Agreement will
require the affirmative vote of more than 50% of the Fund's outstanding shares
of Common Stock. For this purpose, abstentions and "broker non-votes" will
have the same effect as votes cast against the proposal.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENT
TO INCREASE THE BASE FEE COMPONENT OF THE MANAGEMENT FEE.
Proposal 3: Approval of Amended and Restated Articles
of Incorporation of the Fund
At a meeting held on January 28, 1997, the Board of Directors,
including all of the Non-Interested Directors, unanimously adopted Amended and
Restated Articles of Incorporation of the Fund (the "Proposed Charter"). As
discussed below, the Fund's current Articles of Incorporation (the "Current
Charter"), originally adopted in 1977, contain certain provisions which are
duplicative of provisions of the Maryland General Corporation Law and are not
required to be included. The Proposed Charter eliminates this duplication and
modernizes the language to current industry standards. Importantly, the Board
believes that these changes will result in no reduction in the protection
afforded to stockholders and do not modify or eliminate any of the Fund's
investment policies. The Proposed Charter, marked to show the proposed changes,
is attached hereto as Exhibit B. The differences between the Proposed Charter
<PAGE>
and the Current Charter are discussed below.
First, the Board proposes to eliminate from Article EIGHTH the
section which permits the Fund to enter into contracts or transact business
with directors (or entities with whom the director is associated). In
addition, this section of the Current Charter provides that the Fund can enter
into contracts, including a management contract, with Lehman Brothers.<F5>
The Fund proposes to eliminate these provisions of the Current Charter because
Maryland law permits such relationships without requiring such provisions to be
explicitly stated in the Charter and, therefore, the Board is of the view that
these provisions are unnecessary.
Second, the Current Charter also provides that the Fund's name
is granted through permission of Lehman Brothers. As the Fund is no longer
advised by LEMCO or affiliated with Lehman Brothers, the Board recommends that
this section of the Current Charter containing stale references to LEMCO and
Lehman Brothers be removed.
Required Vote
The affirmative vote of the holders of two-thirds of the
outstanding shares of the Fund's Common Stock entitled to vote is required for
approval of the amendment to the Fund's Charter. Accordingly, abstentions and
"broker non-votes" will have the same effect as votes against the amendment.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE ADOPTION OF THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION.
Proposal 4: Ratification of Selection of Independent Accountants
The Board of Directors of the Fund has selected Price Waterhouse
LLP as the Fund's independent accountants for the current fiscal year ending
December 31, 1997. The appointment of independent accountants is approved
annually by the Board of Directors and is subsequently submitted to the
stockholders for ratification. The Fund has been advised by Price Waterhouse
LLP that at December 31, 1996 neither that firm nor any of its partners had any
direct or material indirect financial interest in the Fund. A representative of
Price Waterhouse LLP will be at the Meeting to answer questions concerning the
audit of the Fund's financial statements and will have an opportunity to make a
statement if he chooses to do so.
THE DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS," UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE SELECTION OF INDEPENDENT ACCOUNTANTS.
Required Vote
Ratification of the selection of Price Waterhouse LLP as the
Fund's independent accountants requires the affirmative vote of the holders of
a majority of the shares of the Fund's Common Stock present in person or
represented by proxy at the Meeting with a quorum present. For purposes of this
proposal, abstentions and broker non-votes will not be considered to be votes
cast.
<PAGE>
Proposals to be Submitted by Stockholders
All proposals by stockholders of the Fund which are intended to
be presented at the Fund's next Annual Meeting of Stockholders to be held in
1998 must be received by the Fund for inclusion in the Fund's proxy statement
and proxy relating to that meeting no later than November 5, 1997.
Expenses of Proxy Solicitation
The costs of preparing, assembling and mailing material in
connection with this solicitation of proxies will be borne by [ ].
Proxies may also be solicited personally by officers of the Fund and by regular
employees of SBAM, or its affiliates, or other representatives of the Fund or
by telephone or telegraph, in addition to the use of mails. Brokerage houses,
banks and other fiduciaries may be requested to forward proxy solicitation
material to their principals to obtain authorization for the execution of
proxies, and they will be reimbursed by the Fund for such out-of-pocket
expenses.
In addition, the Fund has retained D.F. King & Co., Inc., a proxy
solicitation firm, to assist in the solicitation of the proxy vote. It is
anticipated that D.F. King & Co., Inc. will be paid approximately $[ ] for
such solicitation services.
Other Information
The Fund's annual report containing financial statements for the
fiscal year ended December 31, 1996 is available, free of charge, by writing to
the Fund c/o Salomon Brothers Asset Management Inc at the address listed on the
front cover, or by calling 1-800-SALOMON.
Other Business
The Board of Directors of the Fund does not know of any other
matter which may come before the Meeting. If any other matter properly comes
before the Meeting, it is the intention of the persons named in the proxy to
vote the proxies in accordance with their judgment on that matter.
March 6, 1997
____________________
<F5> On May 1, 1990, SBAM purchased substantially all of the assets of Lehman
Management Co., Inc. ("LEMCO"), the previous investment adviser to the
Fund, and the Fund's name changed from The Lehman Corporation to The
Salomon Brothers Fund Inc.
<PAGE>
EXHIBIT A
MANAGEMENT AGREEMENT
THE SALOMON BROTHERS FUND INC
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
MANAGEMENT AGREEMENT as of the ___ day of ______, 1997 between THE
SALOMON BROTHERS FUND INC, a Maryland corporation (hereinafter called the
"Corporation"), and SALOMON BROTHERS ASSET MANAGEMENT INC, a Delaware
corporation (hereinafter called "SBAM").
1. The Corporation hereby employs SBAM and SBAM hereby accepts
the employment by the Corporation for the period and on the terms and
conditions hereinafter set forth in this management agreement entered into by
the Corporation with SBAM pursuant to the powers granted to the Corporation
in its Articles of Incorporation.
2. Subject to the Board of Directors of the Corporation, SBAM
shall manage the investment operations of the Corporation, and shall provide
management and other services specified in this agreement and especially
shall make purchases and sales of portfolio securities on behalf of the
Corporation in accordance with the best judgment of SBAM and within the
investment objectives and restrictions set forth in the Corporation's
Articles of Incorporation, By-Laws and Registration Statement, the Investment
Company Act of 1940, as amended, the provisions of the Internal Revenue Code
with respect to regulated investment companies, and when requested by such
Board of Directors, supply the reasons and considerations that prompted
SBAM's decisions.
3. SBAM shall at its expense provide the Corporation with office
facilities, including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Corporation. Other than as
herein specifically indicated, SBAM shall not be responsible for any expenses
of the Corporation. Specifically SBAM shall not be responsible, except to
the extent of the reasonable compensation of employees of the Corporation
whose services may be involved, for the Corporation's legal and auditing
expenses; fees and expenses of its Board of Directors, Executive or special
committees; taxes and governmental fees and any membership dues; fees of
custodian, transfer agent and registrar, if any; expense of preparing share
certificates and other expenses of issue, sale; underwriting, distribution or
repurchase of the Corporation's shares; expenses of registering or qualifying
securities for sale, expense of preparing and distributing reports, notices
and dividends to shareholders; cost of stockholders' and other meetings; or
fees in connection with the listing of its shares on any stock exchange.
Should SBAM determine that services which would ordinarily be rendered by the
employees of the Corporation at its office can be better rendered by some
other agency, SBAM shall bear the costs of employing that agency.
4. It is understood that SBAM shall from time to time employ or
associate with itself such persons as it believes to be particularly fitted
to assist it in the execution of this agreement, the compensation of such
persons to be paid by SBAM. No obligation may be incurred on behalf of the
Corporation in any such respect. During the continuance of this agreement,
<PAGE>
SBAM shall provide persons satisfactory to the Board of Directors of the
Corporation to serve as officers and employees of the Corporation. These may
be a chairman of the board, chairman of the executive committee, president,
one or more vice-presidents, a secretary, a treasurer, and such additional
officers and employees as may reasonably be necessary for the conduct of the
Corporation's business and SBAM agrees to pay the compensation of all such
persons.
5. In consideration of the foregoing, the Corporation will pay
SBAM quarterly, promptly after the last day of each March, June, September
and December, a fee consisting of a base fee as computed below (the "Base
Fee") plus a performance adjustment.
The Base Fee is as follows:
Fee Base (Average Daily Net Assets) Quarterly Fee Rate
First $350 million . . . . . . . . . . . . . .500%
Next $150 million . . . . . . . . . . . . . . .400%
Next $250 million . . . . . . . . . . . . . . .375%
Next $250 million . . . . . . . . . . . . . . .350%
Over $1 billion . . . . . . . . . . . . . . . .300%
The Base Fee shall be calculated using the daily net assets
averaged over the most recent calendar quarter. For each percentage point by
which the investment performance of the Corporation exceeds or is exceeded by
the investment record of the S&P 500 Index of Composite Stocks (the "S&P 500
Index") over the one year period ending on the last day of each calendar
quarter (except as described in the next paragraph), the Base Fee will be
adjusted upward or downward by the product of (i) 1/4 of .01% multiplied by
(ii) the Corporation's average daily net assets for the one year period
ending on the last day of the calendar quarter. If the amount by which the
Corporation outperforms or underperforms the S&P 500 Index is not a whole
percentage point, a pro rata adjustment shall be made. However, there will
be no performance adjustment unless the investment performance of the
Corporation exceeds or is exceeded by the investment record of the S&P 500
Index by at least one percentage point over the same period. The maximum
quarterly adjustment is 1/4 of .1%, which would occur if the Corporation's
performance exceeds or is exceeded by the S&P 500 Index by ten or more
percentage points.
No performance adjustment will be paid until the end of the
first quarter in which this agreement has been in effect for one year (the
"First Adjustment Date"). The advisory fee payable during this period will
be the Base Fee calculated as described above, subject to an adjustment for
the one year period ending on that date. On the First Adjustment Date, for
each percentage point by which the investment performance of the Fund exceeds
or is exceeded by the investment record of the S&P 500 Index over the one
year period ending on that date, the Base Fee will be adjusted upward or
downward by the product of (i) .01% multiplied by (ii) the average daily net
assets of the Fund for the one year period ending on the First Adjustment
Data. If the amount by which the Corporation outperforms or underperforms
the S&P 500 Index is not a whole percentage point, a pro rata adjustment
shall be made. Thereafter, performance adjustments will be made quarterly
based on a rolling one year period (i.e., the most recent four quarters). If
<PAGE>
the new fee arrangement becomes effective on a date which is not the
beginning of a calendar quarter, the management fee will be prorated with the
Fund paying SBAM the current management fee for the number of days in the
quarter prior to effectiveness of the new fee arrangement and the new Base
Fee for the number of days in the quarter following such effectiveness.
The investment performance of the Corporation, for a period
of one year, shall mean the sum of (i) the change in the Corporation's net
asset value per share during such period, (ii) the value of cash
distributions per share accumulated to the end of such period and (iii) the
value of capital gains taxes per share paid or payable on undistributed
realized long-term capital gains accumulated to the end of such period;
expressed as a percentage of the Corporation's net asset value per share at
the beginning of such period. For this purpose, the value of distributions
per share of realized capital gains, of dividends per share paid from
investment income and of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains shall be treated as reinvested
in shares of the Corporation at the net asset value per share in effect at
the close of business on the record date for the payment of such
distributions and dividends and the date on which provision is made for such
taxes, after giving effect to such distributions, dividends and taxes.
However, notwithstanding the foregoing, the investment performance of the
Corporation shall not include, and there shall be excluded from the change in
the net asset value per share for such period, and the value of the
Corporation's cash distributions per share accumulated to the end of such
period shall be adjusted for, any increase or decrease in the investment
performance of the Corporation resulting from the issuance, sale or
repurchase of any shares of the capital stock or any other securities of the
Corporation.
The investment record of the S&P 500 Index, for a period of
one year, shall mean the sum of (i) the change in the level of the index
during such period and (ii) the value, computed consistently with the index,
of cash distributions made by companies whose securities comprise the index
accumulated to the end of such period; expressed as a percentage of the index
level at the beginning of such period. For this purpose, cash distributions
on the securities which comprise the index shall be treated as reinvested in
the index at least as frequently as the end of each calendar quarter
following the payment of the dividend.
Upon termination of this agreement before the end of any
quarter, compensation for the period from the end of the last quarter ending
prior to such termination to the date of termination shall be prorated and
shall be payable promptly after the date of termination.
6. Upon the expiration or sooner termination of this
agreement and/or in the event of a breach of this agreement by the
Corporation, the Corporation covenants that it will at the request of SBAM to
be evidenced by written notice to the Corporation, forthwith change its
corporate name so as to eliminate all reference to "Salomon Brothers" and
will not thereafter transact any business in a corporate name using the words
"Salomon Brothers" in any form or combination whatsoever, or otherwise use
the words "Salomon Brothers" or any other reference to "Salomon Brothers" and
for the purpose of requiring such discontinuance the judgment of SBAM (or, if
SBAM shall no longer be in existence, Salomon Inc) as to whether this
agreement has been breached by the Corporation shall be final and conclusive.
The exercise of its right to require such discontinuance of use of name shall
<PAGE>
not deprive SBAM, or any affiliate thereof which has "Salomon Brothers" in
its name, of, but shall be in addition to, any other rights or remedies to
which it may be entitled in law or equity by reason of any such breach of
this agreement by the Corporation; nor shall the omission of SBAM to request
such discontinuance in any case in which it shall be so deemed a waiver of
its right to require such discontinuance at any time thereafter, for the same
or any subsequent breach. It is agreed that the damage to SBAM, or any
affiliate thereof which has "Salomon Brothers" in its name, through any
failure of the Corporation after demand to discontinue the use of the name of
"Salomon Brothers" would be irreparable and impossible of ascertainment in
terms of money, and the Corporation consents that in any such case an
injunction may issue against it restraining it from the further use of such
name.
7. The Board of Directors of the Corporation may
include officers and/or directors of SBAM, Salomon Brothers Inc, Salomon Inc
or any of their affiliates and its officers may be, in whole or in part,
officers and/or directors of SBAM, Salomon Brothers Inc, Salomon Inc or any
of their affiliates. SBAM, Salomon Brothers Inc, Salomon Inc or any of their
affiliates may, nevertheless, deal freely with the Corporation as bankers or
otherwise, and no contract or transaction shall be invalidated or in any wise
affected by those facts, even though the vote of director or directors or the
action of the officer or officers who are officers or directors of SBAM,
Salomon Brothers Inc, Salomon Inc or any of their affiliates shall have been
necessary to obligate the Corporation in such contract or transaction; and
neither SBAM nor Salomon Brothers Inc nor Salomon Inc nor any of their
affiliates nor any officer or director thereof shall be liable to the
Corporation or to any stockholder or creditor thereof or to any other person
by reason of such contract or transaction or for any loss resulting therefrom
or for any profit derived therefrom, provided that such contract or
transaction shall, at the time at which it was entered into, have been a
reasonable one to have been entered into and shall have been on terms that at
that time were fair. Nothing contained in this Article 7, however, shall
validate, authorize or apply to any act prohibited by the Investment Company
Act of 1940, as amended, or shall protect any director or officer of the
Corporation or any officer or director of SBAM, Salomon Brothers Inc, Salomon
Inc or any of their affiliates against any liability to the Corporation or to
its security holders to which he would otherwise be subject by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office or under this agreement.
8. This agreement, unless sooner terminated as provided
in this agreement, shall remain in effect for twelve months from the date
hereof and thereafter shall continue automatically for a period of one year
so long as such continuance is specifically approved annually by the Board of
Directors of the Corporation or by vote of a majority of the outstanding
voting securities of the Corporation and, in either case, by the vote of a
majority of directors who are not parties to this agreement or interested
persons of any such party cast in person at a meeting called for the purpose
of voting on such approval; provided, however, that this agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Directors of the Corporation or by vote of a majority of the outstanding
voting securities of the Corporation on sixty days' written notice to SBAM or
by SBAM on sixty days' written notice to the Corporation.
<PAGE>
9. The services of SBAM to the Corporation hereunder
are not to be deemed exclusive, and SBAM shall continue to be free to act as
investment adviser to others.
10. This agreement may be amended by mutual consent, but
this agreement as amended must be approved by the Board of Directors of the
Corporation (by vote including a majority of directors who are not parties to
such agreement or interested persons of any such party), or by vote of a
majority of the outstanding voting securities of the Corporation given at any
meeting of the stockholders, the notice of which shall have stated the
proposed amendment to be one of the objects of the meeting, and otherwise as
may be required by the Investment Company Act of 1940, as amended, provided
that the compensation payable to SBAM pursuant to Article 5 hereof may not be
increased except by a vote of a majority of the outstanding voting securities
of the Corporation.
11. This agreement shall bind and inure to the benefit
of any corporation or association with which or into which the Corporation
shall be consolidated or merged or any corporation or association acquiring
substantially all of the assets of the Corporation.
12. This agreement shall terminate automatically in the
event of its assignment.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the day and year first above written.
Very truly yours,
THE SALOMON BROTHERS FUND
INC
By:___________________________
ACCEPTED:
SALOMON BROTHERS ASSET MANAGEMENT INC
By:__________________________________
<PAGE>
EXHIBIT B
THE SALOMON BROTHERS FUND INC
ARTICLES OF AMENDMENT AND RESTATEMENT
THE SALOMON BROTHERS FUND INC, a Maryland corporation, having its
principal office in Baltimore City, Maryland (which is hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended and
restated in its entirety to read as follows:
THE SALOMON BROTHERS FUND INC
RESTATED ARTICLES OF INCORPORATION
THIS IS TO CERTIFY:
I, the undersigned, W. L. Williams, whose post-office address is
One South William Street, New York, New York 10004, being at least eighteen
years of age, do hereby act as an incorporator, under and by virtue of the
General Laws of the State of Maryland authorizing the formation of
corporations and, with the intention of forming a corporation, DO HEREBY
CERTIFY AS FOLLOWS:
FIRST: The name of the corporation is THE SALOMON BROTHERS FUND
INC.
SECOND: The post-office address of the principal office of the
corporation in the State of Maryland is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The name of the
resident agent of the corporation in the State of Maryland is The Corporation
Trust Incorporated, a corporation of the State of Maryland, and the post-
office address of the resident agent is 32 South Street, Baltimore, Maryland
21202.
<PAGE>
THIRD: The nature of the business or objects or purposes to be
transacted, promoted or carried on by the corporation are as follows:
To underwrite, purchase, acquire, hold, pledge, hypothecate,
exchange, sell, contract to sell, deal in and dispose of, alone or in
syndicates or otherwise in conjunction with others, stocks, bonds and other
evidences of indebtedness and obligations of any corporation, association,
partnership, syndicate, entity, person or governmental, municipal or public
authority, domestic or foreign, and evidences of any interest in respect of
any such stocks, bonds and other evidences of indebtedness and obligations;
to issue in exchange therefor its own stocks, bonds or other obligations;
and, while the owner or holder of any such, to exercise all the rights,
powers and privileges of ownership in respect thereof; and, to the extent now
or hereafter permitted by law, to aid by loan, subsidy, guaranty or otherwise
those issuing, creating or responsible for any such stocks, bonds or other
evidences of indebtedness or obligations or evidences of any interest in
respect thereof.
To purchase acquire, hold, mortgage, pledge, hypothecate, exchange,
sell, deal in and dispose of, alone or in syndicates or otherwise in
conjunction with others, commodities and other personal property and real
property of every kind, character and description whatsoever and wheresoever
situated, and any interest therein.
To engage in any mercantile, manufacturing or trading business of
any kind or character whatsoever, within or without the State of Maryland,
and to do all things incidental to any such business; to cause to be formed,
merged or reorganized or liquidated, and to promote, take charge of and aid
in any way permitted by law the formation, merger, reorganization or
liquidation of, any corporation, association or entity in the United States
or abroad.
<PAGE>
To enter into any lawful arrangements for sharing profits, union of
interest, reciprocal concession or cooperation, with any corporation,
association, partnership, syndicate, entity, person or governmental,
municipal or public authority, domestic or foreign, in the carrying on of any
business which the corporation is authorized to carry on or any business or
transaction deemed necessary, convenient or incidental to carrying out any of
the purposes of the corporation.
To act in any and all parts of the world in any capacity whatsoever
as financial, commercial or business agent or representative, general or
special, for domestic and foreign corporations, associations, partnerships,
syndicates, entities, persons, governments, municipalities and other public
bodies.
To make, enter into and carry out any arrangements with any
domestic or foreign governmental, municipal or public authority or with any
corporation, association, partnership, syndicate, entity or person, domestic
or foreign, to obtain therefrom or otherwise to acquire by purchase, lease,
assignment or otherwise any powers, rights, privileges, immunities,
franchises, guaranties, grants and concessions; to acquire, hold, own,
exercise, exploit, dispose of and realize upon the same, and to undertake and
prosecute any business dependent thereon; and to promote, cause to be formed
and aid in any way any corporation, association, partnership, syndicate or
entity for any such purposes.
To acquire, hold, use, sell, assign, lease and grant licenses or
sub-licenses in respect of, pledge or otherwise dispose of, letters patent of
the United States or any foreign country, patent rights, licenses,
privileges, inventions, improvements, processes, copyrights, trademarks and
trade names relating to or useful in connection with any business of the
corporation.
<PAGE>
To enter into, make, perform and carry out or cancel and rescind
contracts for any lawful purposes pertaining to its business with any person,
entity, syndicate, partnership, association, corporation or governmental,
municipal or public authority, domestic or foreign.
To acquire all or any part of the good will, rights, property and
business of any person, entity, partnership, association or corporation
heretofore or hereafter engaged in any business similar to any business which
the corporation has power to conduct, to pay for the same in cash or in
stock, bonds or other obligations of the corporation or otherwise, to hold,
utilize and in any manner dispose of the whole or any part of the rights and
property so acquired, and to assume in connection therewith any liabilities
of any such person, entity, partnership, association or corporation and
conduct in any lawful manner the whole or any part of the business thus
acquired.
To make any guaranty respecting stocks, dividends, securities,
indebtedness, interest, contracts or other obligations so far as the same may
be permitted to be done by a corporation organized under the laws of the
State of Maryland.
To borrow or raise moneys for any of the purposes of the
corporation and from time to time, without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment thereof
and of the interest thereon by mortgage on, or pledge, conveyance or
assignment in trust of, the whole or any part of the assets of the
corporation, real, personal or mixed, including contract rights, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise
<PAGE>
dispose of such securities or other obligations of the corporation for its
corporate purposes.
To loan its uninvested funds and/or surplus from time to time to
such extent as the corporation may deem advisable in call and/or in time
loans, upon such security, if any, as the Board of Directors may determine.
To purchase, hold, sell, transfer, reissue or cancel the shares of
its own capital stock or any securities or other obligations of the
corporation in the manner and to the extent now or hereafter permitted by the
laws of the State of Maryland; provided that the corporation shall not use
its funds or other assets for the purchase of its own shares of stock when
such use would cause any impairment of the capital of the corporation, and
provided further that shares of its own capital stock belonging to the
corporation shall not be voted directly or indirectly.
In general, to carry on any business not contrary to the laws of
the State of Maryland and to have and exercise all of the powers conferred by
the laws of the State of Maryland upon corporations formed thereunder; and to
do any and all of the acts and things herein set forth to the same extent as
natural persons could do, and in any part of the world, as principal, factor,
agent, contractor, trustee or otherwise, either alone or in company with any
person, entity, syndicate, partnership, association or corporation; to
establish and maintain offices and agencies within, and anywhere outside of,
the State of Maryland; and to exercise all or any of its corporate powers and
rights in the State of Maryland and in any and all other states, territories,
districts, colonies, possessions or dependencies of the United States of
America and in any foreign countries.
To do everything necessary, proper, advisable or convenient for the
accomplishment of any of the purposes or the attainment of any of the objects
<PAGE>
or the furtherance of any of the powers herein set forth and to do every
other act and thing incidental thereto or connected therewith, provided the
same be not forbidden by the laws of the State of Maryland.
The foregoing clauses shall be construed as powers as well as
objects and purposes, and the matters expressed in each clause shall, except
if otherwise expressly provided, be in no wise limited by reference to or
inference from the terms of any other clause, but shall be regarded as
independent objects, purposes and powers; and the enumeration of specific
objects, purposes and powers shall not be construed to limit or restrict in
any manner the meaning of general terms or the general powers of the
corporation; nor shall the expression of one thing be deemed to exclude
another not expressed, although it be of like nature.
The corporation shall be authorized to exercise and enjoy all of
the powers, rights and privileges granted to, or conferred upon, corporations
of this character by the General Laws of the State of Maryland now or
hereafter in force, and the enumeration of the foregoing powers shall not be
deemed to exclude any powers, rights or privileges so granted or conferred.
FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is one hundred million (100,000,000), all of
which are to be of the par value of One Dollar ($1.00) per share and of one
class.
No holder of stock of the corporation shall be entitled as such, as
a matter of right, to subscribe for or receive any part of any new or
additional issue of stock of the corporation of any class, whether now or
hereafter authorized and whether issued for money or for a consideration
other than money or by way of dividend, or of any issue of securities
convertible into stock.
<PAGE>
FIFTH: The number of directors of the corporation shall be
twenty-one (21) which number may be increased or decreased from time to time
pursuant to the by-laws of the corporation, but shall never be less than
three (3). The names of the directors who shall act until the first annual
meeting or until their successors are duly elected and qualify are: Henry R.
Breck, Robert H. Buckles, John S. Bugas, Charles F. Fogarty, James W.
Glanville, F. Warren Hellman, James M. Hester, C. Charles Hetzel, George H.
Heyman, Jr., Ian K. MacGregor, John M. Martin, Alexander N. McFarlane, Alvin
W. Pearson, Peter G. Peterson, John W. Reavis, Adelaide M. Schlafly, William
T. Seawell, Lewis P. Seiler, F. Ritter Shumway, Gerald H. Trautman and Frazar
B. Wilde.
SIXTH: The corporation is to have perpetual existence.
SEVENTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatsoever.
EIGHTH: All corporate powers of the corporation shall be exercised
by or under the authority of the Board of Directors except as otherwise
provided by law. If the by-laws of the corporation so provide, the Board of
Directors may, by resolution or resolutions, passed by a majority of the
whole Board, designate one or more committees, each committee to consist of
two or more of the directors of the corporation, which, to the extent
provided in said resolution or resolutions or in the by-laws of the
corporation, and except as otherwise provided by law, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation, and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it.
The stockholders and the directors may hold their meetings and have
an office or offices outside of the State of Maryland if the by-laws so
<PAGE>
provide.
None of the directors need be a stockholder of the corporation or a
resident of the State of Maryland.
Subject to any limitations herein or that may be imposed by the
stockholders, the Board of Directors may make by-laws and from time to time
may alter, amend or repeal any by-laws, but any by-laws made by the Board of
Directors or the stockholders may be altered, amended or repealed by the
stockholders at any annual meeting or at any special meeting, provided that
notice of such proposed alteration, amendment or repeal is included in the
notice of such special meeting.
The Board of Directors shall have power from time to time to fix
the amount to be reserved by the corporation over and above its capital stock
paid in and to fix and determine and to vary the amount of the working
capital of the corporation, and to direct and determine the use and
disposition of the working capital and of any surplus or net profits over and
above the capital stock paid in.
The Board of Directors of the corporation is hereby empowered to
authorize the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into shares of
its stock of any class or classes, whether now or hereafter authorized.
The Board of Directors may from time to time establish,
reestablish, amend, alter or repeal and may put into effect and carry out
such a plan or plans as may from time to time be approved by it for the
distribution among or sale to the officers and employees of the corporation,
or any of them, in addition to their regular salaries or wages, of any moneys
or other property of the corporation, or of any shares of stock of the
corporation, of any class, in consideration for or in recognition of the
<PAGE>
services rendered by such officers and employees.
The Board of Directors may from time to time create and issue
whether or not in connection with the issue and sale of any shares of stock
or other securities of the corporation, rights or options entitling the
holders thereof to purchase from the corporation any shares of its capital
stock of any class or classes, such rights or options to be evidenced by or
in such instrument or instruments as shall be approved by the Board of
Directors. The terms upon which, the time or times, which may be limited or
unlimited in duration, at or within which, and the price or prices at which
any such shares may be purchased from the corporation upon the exercise of
any such rights or options shall be such as shall be fixed and stated in a
resolution or resolutions adopted by the Board of Directors providing for the
creation and issue of such rights or options, and, in every case, set forth
or incorporated by reference in the instrument or instruments evidencing such
rights or options.
The Board of Directors from time to time shall determine whether
and to what extent and at what times and places and under what conditions and
regulations the accounts and books of the corporation, or any of them, shall
be open to the inspection of the stockholders, and no stockholder shall have
any right to inspect any account, book or document of the corporation except
as conferred by statute or as authorized by resolution of the Board of
Directors.
Any contract, transaction or act of the corporation or of the Board
of Directors which shall be ratified by the holders of a majority of the
stock entitled to vote at any annual meeting or at any special meeting called
for that purpose, shall be as valid and binding as though ratified by every
<PAGE>
stockholder of the corporation; provided, however, that any failure to submit
any such contract, transaction or act to the stockholders for approval or
ratification or any failure of the stockholders to approve or ratify such
contract, transaction or act when submitted, shall not be deemed in any way
to invalidate the same or to deprive the corporation, its directors or
officers of their right to proceed with such contract, transaction or action.
NINTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in these articles in the manner now or
hereafter prescribed by statute, including any amendment which alters the
contract rights, as expressly set forth in these articles, of any outstanding
stock; and all rights herein conferred upon the stockholders are granted
subject to this reservation.
TENTH: Notwithstanding any provision of law requiring a greater
proportion than a majority of the votes of all classes or of any class of
stock entitled to be cast, to take or authorize any action, the corporation
may take or authorize such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon; except that the
vote of two-thirds of the outstanding shares of each class of stock entitled
to be cast shall be necessary to authorize any of the following actions: (i)
a merger or consolidation of the corporation (in which the corporation is
not the surviving corporation) with (a) an open-end investment company or (b)
a closed-end investment company unless such closed-end investment company's
Articles of Incorporation require a two-thirds or greater vote of each class
of such company's stock entitled to be cast to approve the types of
transactions covered by clauses (i) through (iv) of this exception to Article
Tenth of these Articles; (ii) the dissolution of the corporation; (iii) the
<PAGE>
sale of all or substantially all of the assets of the corporation to any
person (as such term is defined in the Investment Company Act of 1940); or
(iv) any amendment to these Articles which makes any class of the
corporation's stock a redeemable security (as such term is defined in the
Investment Company Act of 1940) or reduces the two-thirds vote required to
authorize the actions listed in this paragraph.
ELEVENTH: The Corporation shall indemnify (a) its directors and
officers, whether serving the Corporation or at its request any other entity,
to the fullest extent required or permitted by the laws of the State of
Maryland now or hereafter in force and the Investment Company Act of 1940,
including the advance of expenses under the procedures required, and to the
fullest extent permitted, by law and (b) other employees and agents to such
extent as shall be authorized by the Board of Directors or provided by the
Corporation's by-laws or by contract and permitted by law. The foregoing
rights of indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of Directors may
take such action as is necessary to carry out these indemnification
provisions and is expressly empowered to adopt, approve and amend from time
to time such by-laws, resolutions or contracts implementing such provisions
or such further indemnification arrangements as may be permitted by law. No
amendment of these Articles or repeal of any of its provisions shall limit or
eliminate the right to indemnification provided hereunder with respect to
acts or omissions occurring prior to such amendment or repeal.
TWELFTH: To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no director or officer of the
Corporation shall be personally liable to the Corporation or its stockholders
for money damages, except to the extent such exemption from liability or
<PAGE>
limitation thereof is not permitted by the Investment Company Act of 1940.
No amendment of these Articles or repeal of any of its provisions shall limit
or eliminate the benefits provided to directors and officers under this
provision with respect to any act or omission which occurred prior to such
amendment or repeal.
SECOND: These provisions here and above are all the provisions of
the Charter of the Corporation currently in effect.
THIRD: The foregoing amendment and restatement to the Charter of
the Corporation has been advised by the Board of Directors and approved by
the stockholders of the Corporation.
FOURTH: The foregoing amendment and restatement to the Charter of
the Corporation will become effective at ______ on _____________ __, 1997.
FIFTH: The current address of the principal office of the
Corporation in the State of Maryland is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. Name and address
of the Corporation's current resident agent are The Corporation Trust
Incorporated, 32 South Street Baltimore, Maryland 21202. The number of
Directors of the Corporation is ten and the names of the Directors currently
in office are Charles F. Barber, Andrew L. Breech, Thomas W. Brock, Carol
L. Colman, William R. Dill, Michael S. Hyland, Clifford M. Kirtland, Jr.,
Robert W. Lawless, Louis P. Mattis and Thomas F. Schlafly.
IN WITNESS WHEREOF, SALOMON BROTHERS FUND INC has caused these
present to be signed in its name and on its behalf by its President and
witnessed by its Secretary on ___________ __, 1997.
SALOMON BROTHERS FUND INC
By:_________________________
Name:
Title:
Witness:
Secretary
By:__________________________________
Name:
Title:
<PAGE>
THE UNDERSIGNED, President of SALOMON BROTHERS FUND INC, who
executed on behalf of the Corporation the foregoing Articles of Amendment and
Restatement of which this certificate is made a part, hereby acknowledges in
the name and on behalf of said Corporation the foregoing Articles of
Amendment and Restatement to be the corporate act of said Corporation and
hereby certifies that to the best of his knowledge, information, and belief
the matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
By:_________________________
Name:
Title:
<PAGE>
THE SALOMON BROTHERS FUND INC
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Lawrence H. Kaplan, Alan M. Mandel and
Jennifer G. Muzzey, and each of them, attorneys and proxies for the
undersigned, with full power of substitution and revocation to represent the
undersigned and to vote on behalf of the undersigned all shares of the The
Salomon Brothers Fund Inc (the "Fund") which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Fund to be held at Seven
World Trade Center, New York, New York on April 29, 1997, and at any
adjournment thereof. The undersigned hereby acknowledges receipt of the
Notice of Meeting and accompanying Proxy Statement and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion the proxies are authorized to vote upon such other business as may
properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
Please Mark, Sign, and Return this Proxy Promptly
Using the Enclosed Envelope.
Date_______________________________________, 1997
NOTE: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your full
title.
--------------------------------------
Signature(s), Title(s), if applicable
<PAGE>
This proxy, if properly executed, will be voted in the manner directed by the
stockholder.
If no direction is made to the contrary, the proxy will be voted FOR the
election of nominees as directors and FOR proposals 2, 3 and 4.
Please refer to the Proxy Statement for a discussion of the Proposals.
Please Sign and Date on Reverse Side and Mail in Accompanying Postpaid
Envelope.
Please vote by filling in the appropriate boxes below, as shown, using blue
or black ink or dark pencil. Do not use red ink. /_/
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE
ELECTION OF DIRECTORS AND FOR
PROPOSALS 2, 3 AND 4
1. The election of FOR all WITHHOLD *EXCEPTIONS
directors. nominees AUTHORITY to
listed vote for all
below nominees /_/
listed below
/_/ /_/
Nominees: Charles F. Barber, Andrew L. Breech, Thomas W. Brock, Carol L.
Colman, William R. Dill, Michael S. Hyland, Clifford M. Kirtland, Jr.,
Robert W. Lawless, Louis P. Mattis, Thomas F. Schlafly
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below.)
*Exceptions_________________________________________________________________
FOR AGAINST ABSTAIN
2. Approval of Amendment /_/ /_/ /_/
to Management Contract
to Increase the Base
Fee Component of the
Management Fee.
3. Approval of Amended and /_/ /_/ /_/
Restated Articles of
Incorporation.
<PAGE>
4. The ratification of the /_/ /_/ /_/
selection of Price
Waterhouse LLP as the
independent accountants
of the fund for the
fiscal year ending
December 31, 1997.
5. Any other business that /_/ /_/ /_/
may properly come
before the meeting.
I will be attending the meeting. /_/
