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:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-
12
Smith Barney Municipal Fund, Inc.
(Name of Registrant as Specified in its Charter)
Marc Schuman
Name of Person Filing Proxy Statement
Payment of Filing Fee (Check appropriate box):
[X] No longer applicable
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] 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 the
transaction applies:
(2) Aggregate number of securities to which transactions
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement 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:
1. Set forth the amount on which the filing fee is calculated and
state how it was determined.
SMITH BARNEY MUNICIPAL FUND, INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------
To Be Held on April 24, 1998
To the Stockholders of Smith Barney Municipal Fund, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of SMITH
BARNEY MUNICIPAL FUND, INC. (the "Fund") will be held at the Fund's offices at
388 Greenwich Street, New York, New York, 22nd Floor, on April 24, 1998 at 9:30
A.M. (New York Time) for the following purposes:
1. To elect three Class II directors of the Fund;
2. To consider and act upon the ratification of the selection of KPMG
Peat Marwick LLP as independent auditors of the Fund for the fiscal year ended
December 31, 1998; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 9, 1998
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting and any adjournments thereof.
By Order of the Board of Directors
Christina T. Sydor
Secretary
New York, New York
March 24, 1998
-----------------
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN PERSON OR BY
PROXY; IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE PROVIDED FOR YOUR
CONVENIENCE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
SMITH BARNEY MUNICIPAL FUND, INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(800) 451-2010
-----------------
PROXY STATEMENT
-----------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1998
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Smith Barney Municipal Fund, Inc. (the
"Fund") of proxies to be voted at the Annual Meeting of Stockholders (the
"Meeting") of the Fund, to be held at the Fund's principal executive offices at
388 Greenwich Street, 22nd Floor, New York, New York 10013, on April 24, 1998 at
9:30 A.M. (New York Time), and at any adjournments thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders.
The cost of soliciting proxies will be borne by the Fund. Proxy
solicitations will be made mainly by mail. In addition, certain officers,
directors and employees of the Fund; Smith Barney Inc. ("Smith Barney"); Mutual
Management Corp. ("MMC" or the "Manager") (formerly known as Smith Barney Mutual
Funds Management Inc.), the Fund's investment manager, which is an affiliate of
Smith Barney; and/or First Data Investor Services Group, Inc. ("First Data"),
the Fund's transfer agent, may solicit proxies in person or by telephone,
telegraph, or mail. Smith Barney and MMC are each located at 388 Greenwich
Street, New York, New York 10013; First Data is located at 53 State Street,
Boston, Massachusetts 02109.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended December 31, 1997, has previously been furnished to all
shareholders of the Fund. This proxy statement and form of proxy are first being
mailed to shareholders on or about March 24, 1998. The Fund will provide
additional copies of the annual report to any shareholder upon request by
calling the Fund at 1-800-451-2010.
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, shares
represented by the proxies will be voted "FOR" all the proposals. For purposes
of determining the presence of a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (i.e. proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote
<PAGE>
shares on a particular matter with respect to which the brokers or nominees do
not have discretionary power) will be treated as shares that are present but
which have not been voted. Because both proposals require a proportion of votes
cast for their approval, abstentions and broker "non-votes" may influence
whether a quorum is present but will have no impact on the requisite approval of
a proposal. Proposal 1 requires for approval the affirmative vote of a plurality
of the votes cast at the Meeting with a quorum present, in person or by proxy by
the shareholders of the Fund voting on the matter. Proposal 2 requires for
approval the affirmative vote of a majority of the votes cast at the Meeting
with a quorum present, in person or by proxy by the shareholders of the Fund
voting on the matter. Any proxy may be revoked at any time prior to the exercise
thereof by submitting another proxy bearing a later date or by giving written
notice to the Secretary of the Fund at the Fund's address indicated above or by
voting in person at the Meeting.
The Board knows of no business other than that specifically mentioned in
the Notice of Meeting that will be presented for consideration at the Meeting.
If any other matters are properly presented, it is the intention of the persons
named in the enclosed proxy to vote in accordance with their best judgment.
The Board of Directors of the Fund has fixed the close of business on
March 9, 1998 as the record date (the "Record Date") for the determination of
stockholders of the Fund entitled to notice of and to vote at the Meeting or any
adjournment thereof. Stockholders of the Fund as of the Record Date will be
entitled to one vote on each matter for each share held and a fractional vote
with respect to fractional shares, with no cumulative voting rights. As of the
Record Date, the Fund had outstanding 4,021,161.791 shares of Common Stock, par
value $.001 per share, the only authorized class of stock, of which 3,923,868
shares (97.58%) were held but not beneficially owned by, CEDE & CO., P.O. Box
20, Bowling Green Station, New York, NY 10004. As of the Record Date, no other
person (including any "group" as that term is used in Section 13(d) of the
Exchange Act of 1934), to the knowledge of the Board of Directors of the Fund,
owned beneficially more than 5% of the outstanding shares of the Fund. As of the
Record Date, the officers and Board members of the Fund as a group beneficially
owned less than 1% of the outstanding shares of the Fund.
In the event that sufficient votes in favor of the proposals set forth in
the Notice of Meeting and this Proxy Statement are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies with
respect to any such proposals. In determining whether to adjourn the Meeting,
the following factors may be considered: the nature of the proposals that are
the subject of the Meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any such adjournment will require the
affirmative vote of a majority of the shares present at the Meeting. The persons
named as proxies will vote in favor of such adjournment those shares which they
are entitled to vote and which have voted in favor of such proposals.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Fund is classified into three classes. The
directors serving in Class II have terms expiring at the Meeting; the Class II
directors currently serving on the Board have been nominated by the Board of
Directors for re-election at the Meeting to serve for a term of three years
(until the year 2001 Annual Meeting of Stockholders) or until their successors
have been duly elected and qualified.
The Board of Directors of the Fund knows of no reason why any of the
Class II nominees listed below will be unable to serve, but in the event of any
such unavailability, the proxies received will be voted for such substitute
nominees as the Board of Directors may recommend.
Certain information concerning the nominees is set forth below. For any
nominee or director indicated as owning shares of the Fund, such ownership
constituted less than 1% of the outstanding shares of the Record Date. All of
the nominees are currently directors of the Fund. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years.
Persons Nominated for Election as Directors
Principal Occupations Number of Shares
During Past Five Years, Owned as of
Name Other Directorships, and Age March 9, 1998
---- ---------------------------- ----------------
CLASS II DIRECTORS
Roderick C. Rasmussen Investment Counselor; Director of ten 106
Director since 1992 investment companies associated with
Smith Barney. Formerly, Vice President
of Dresdner and Company Inc. (investment
counselors); 71.
John P. Toolan Retired; Director of ten investment None
Director since 1992 companies associated with Smith Barney;
Director of John Hancock Funds.
Formerly, Director and Chairman of the
Smith Barney Trust Company, Director of
Smith Barney and the Manager. Prior to
1992, Senior Executive Vice President,
Director and Member of the Executive
Committee of Smith Barney; 67.
Paul Hardin Professor of Law at the University of None
Director since 1994 North Carolina at Chapel Hill; Director
of twelve investment companies
associated with Smith Barney and a
Director of The Summit Bancorporation.
Formerly, Chancellor of the University
of North Carolina at Chapel Hill; 66.
The remainder of the Board constitutes the Class I and Class III
directors, none of whom will stand for election at the Meeting, as their terms
will expire in the years 2000 and 1999, respectively. Directors affiliated with
the Manager and considered an "interested person" of the Fund, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") are indicated by an
asterisk(*).
3
<PAGE>
Directors Continuing in Office
Principal Occupations Number of Shares
During Past Five Years, Owned as of
Name Other Directorships, and Age March 9, 1998
---- ---------------------------- ----------------
CLASS I DIRECTORS
Heath B. McLendon* Managing Director of Smith Barney; 247(a)
Director since 1995 Director of forty-two investment
companies associated with Smith Barney;
Chairman of the Board of Smith Barney
Strategy Advisers Inc. and President of
MMC and Travelers Investment Adviser,
Inc. ("TIA"). Prior to July 1993, Senior
Executive Vice President of Shearson
Lehman Brothers Inc.; Vice Chairman of
Shearson Asset Management; 64.
CLASS III DIRECTORS
Donald R. Foley Retired; Director of ten investment 4678
Director since 1992 companies associated with Smith Barney.
Formerly Vice President of Edwin Bird
Wilson, Incorporated (advertising); 75.
(a) Includes shares owned by members of this director's family
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) of
the 1940 Act require the Fund's officers and directors, and persons who
beneficially own more than ten percent of a registered class of the Fund's
equity securities, and certain entities to file reports of ownership with the
Securities and Exchange Commission, the American Stock Exchange and the Fund.
Based solely upon its review of the copies of such forms received by it, the
Fund believes that, during fiscal year 1997, all filing requirements applicable
to such persons were complied with.
The Fund has no compensation or nominating committee of the Board of
Directors, or any committee performing similar functions. The Fund has an audit
committee composed of all the directors who are not interested persons of the
Fund or the Manager (the "independent directors") which is charged with
recommending a firm of independent auditors to the Fund and reviewing accounting
matters with the auditors.
Five meetings of the Board of Directors of the Fund were held during the
last fiscal year, four of which were regular meetings. The audit committee held
two meetings during the same period. In the last fiscal year, no director
attended less than 75% of these meetings of the Board that were held.
Only the independent directors receive remuneration from the Fund for
acting as a director. Aggregate fees and expenses (including reimbursement for
travel and out-of-pocket expenses) of $12,912 were paid to such directors by the
Fund during the fiscal year ended on December 31, 1997. Fees for the independent
directors, who are directors of a group of funds sponsored by Smith Barney, are
set at $42,000 per annum and are allocated based on relative net assets of each
fund in the group. In addition, these directors receive $100 per fund or
portfolio for each Board meeting
4
<PAGE>
attended plus travel and out-of-pocket expenses incurred in connection with
Board meetings. The Board meeting fees and the out-of-pocket expenses are borne
equally by each individual fund or portfolio in the group. None of the officers
of the Fund received any compensation from the Fund for such period. Officers
and interested directors of the Fund are compensated by the Manager or by Smith
Barney.
The following table shows the compensation paid by the Fund to each
person who was a director or director emeritus during the Fund's last fiscal
year:
COMPENSATION TABLE
<TABLE>
<CAPTION>
Number of
Aggregate Pension or Retirement Funds for Which
Compensation Benefits Accrued as part Total Compensation Person Served
Name of Person from Fund of Fund Expenses from Fund Complex Within Fund Complex
-------------- --------- ---------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Joseph H. Fleiss+++ 556 0 54,900 10
Donald R. Foley+ 556 0 55,400 10
Paul Hardin 556 0 73,000 12
Francis P. Martin+ 456 0 53,000 10
Heath B. McLendon* 0 0 0 42
Roderick C. Rasmussen 556 0 55,400 10
John P. Toolan+ 556 0 55,400 10
C. Richard Youngdahl++ 228 0 26,100 10
</TABLE>
* Designates a director who is an "interested person" of the Fund.
+ Pursuant to a deferred compensation plan, the indicated persons have elected
to defer the following amounts of their compensation from the Fund: Joseph
H. Fleiss: $28, Donald R. Foley: $28, Francis P. Martin: $456 and John P.
Toolan: $556, and the following amounts of their total compensation from the
Fund Complex: Joseph H. Fleiss: $21,000, Donald R. Foley: $21,000, Francis
P. Martin: $53,000 and John P. Toolan: $55,400.
++ Effective January 1, 1997, Mr. Youngdahl, and effective January 1, 1998, Mr.
Fleiss, became Directors Emeritus. Upon attainment of age 72 the Fund's
current directors may elect to change to emeritus status. Any directors
elected or appointed to the Board of Directors in the future will be
required to change to emeritus status upon attainment of age 80. Directors
Emeritus are entitled to serve in emeritus status for a maximum of 10 years
during which time they are paid 50% of the annual retainer fee and meeting
fees otherwise applicable to the Fund's directors, together with reasonable
out-of-pocket expenses for each meeting attended.
The following is a list of the current executive officers of the Fund,
all of whom have been elected by the directors to serve until their respective
successors are elected:
<TABLE>
<CAPTION>
Offices and Positions Period Principal Occupations During
Name Held with Fund Offices Held Past Five Years and Age
- ---- -------------- ------------ -----------------------
<S> <C> <C> <C>
Heath B. McLendon Chief Executive 1995 to date (see table of directors above)
Officer, Chairman
of the Board and
President
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Offices and Positions Period Principal Occupations During
Name Held with Fund Offices Held Past Five Years and Age
- ---- -------------- ------------ -----------------------
<S> <C> <C> <C>
Lewis E. Daidone Senior Vice 1992 to date Managing Director of Smith
President and Barney; Senior Vice President
Treasurer and Treasurer of forty-two
investment companies
associated with Smith Barney;
Director and Senior Vice
President of MMC and TIA; 40.
Peter M. Coffey Vice President 1992 to date Managing Director of Smith
Barney; Vice President of the
Manager and certain other
investment companies
associated with Smith Barney; 53.
Christina T. Sydor Secretary 1992 to date Managing Director of Smith
Barney; Secretary of forty-two
investment companies
associated with Smith Barney;
Secretary and General Counsel
of MMC and TIA; 47.
Thomas W. Reynolds Controller and 1992 to date Director of Smith Barney;
Assistant Controller and Assistant
Secretary Secretary of certain other
investment companies
associated with Smith Barney;
38.
</TABLE>
The Board of Directors, including all of the independent directors,
recommends that you vote "FOR" the election of all nominees to the Board.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG") has been selected as the independent
auditors to audit the accounts of the Fund for and during the fiscal year ending
December 31, 1998 by a majority of the independent directors, which is subject
to ratification by the stockholders at the Meeting. The entire Board concurred
in the selection of KPMG. KPMG also serves as the independent auditors for the
Manager, other investment companies associated with Smith Barney and for
Travelers Group, Inc. ("Travelers"), the ultimate parent company of Smith Barney
and the Manager. KPMG has no direct or material indirect financial interest in
the Fund, the Manager, Travelers or any other investment company sponsored by
Smith Barney or its affiliates.
If the Fund receives a written request from any stockholder at least five
days prior to the Meeting stating that the stockholder will be present in person
at the Meeting and desires to ask questions of the auditors concerning the
Fund's financial statements, the Fund will arrange to have a representative of
KPMG present at the Meeting who will respond to appropriate questions and have
an opportunity to make a statement.
6
<PAGE>
The affirmative vote of a majority of votes cast at the Meeting is
required to ratify the selection of KPMG. The Board of Directors, including all
of the independent directors, recommends that the stockholders vote "FOR" the
ratification of the selection of independent auditors.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1999 Annual Meeting
of the Stockholders of the Fund must be received by December 15, 1998 to be
included in the proxy statement and the form of proxy relating to that meeting,
as the Fund expects that the 1999 Annual Meeting will be held in late April of
1999.
OTHER MATTERS
The Manager knows of no other matters which are to be brought before the
Meeting. However, if any other matters not now known or determined properly come
before the Meeting, it is the intention of the persons named in the enclosed
form of proxy to vote such proxy in accordance with their judgment on such
matters.
All proxies received will be voted in favor of all the proposals, unless
otherwise directed therein.
By Order of the Board of Directors,
Christina T. Sydor
Secretary
March 24, 1998
FORM OF PROXY
SMITH BARNEY MUNICIPAL FUND, INC.
388 Greenwich Street
New York, New York 10013
This Proxy is Solicited on Behalf of the Board of Directors of the
Fund
The undersigned hereby appoints HEATH B. McLENDON, CHRISTINA T.
SYDOR
and MARC A. SCHUMAN, and each of them acting in the absence of the
other, as
Proxies, each with the power to appoint a substitute, and hereby
authorizes each of
them to represent and to vote, as designated herein, all shares of
common stock of
Smith Barney Municipal Fund, Inc. held of record by the
undersigned on
March 9, 1998 at a Meeting of Stockholders to be held on April 24,
1998 or any
adjournment thereof.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
SEE REVERSE SIDE
X Please vote as in this example
This proxy when properly executed will be voted in the manner
directed by the undersigned stockholder. If no direction is made,
this proxy will be voted for each nominee for director and for
each proposal.
The Board of Directors recommends a vote "FOR" the following
proposals:
1. ELECTION OF CLASS II DIRECTORS FOR WITHHELD
Nominees: Roderick C. Rasmussen,
John P. Toolan and Paul Hardin
_______________________________
For all nominees except as noted above
2. PROPOSAL TO RATIFY THE FOR AGAINST ABSTAIN
SELECTION OF KPMG PEAT
MARWICK LLP AS THE INDE-
PENDENT AUDITORS OF THE
FUND FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1998.
3. IN THEIR DISCRETION, THE PROXIES
ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
Please sign exactly as name appears to the left. When shares are
held by
joint tenants, both should sign or if one signs, that
stockholder's vote binds
both stockholders. When signing as attorney, executor,
administrator,
agent, trustee or guardian, please give full title as such. If a
corporation,
please sign in full corporate name by President or other
authorized officer.
If a partnership, please sign in partnership name by authorized
person.
Signature: ____________________________ Date: ________________
Signature: ____________________________ Date: ________________
