The Salomon Brothers Fund Inc Announces Proposal to Convert to Open-End Fund and Settlement of Proxy Contest

Business Wire, Nov 15, 2005

NEW YORK -- The Salomon Brothers Fund Inc (NYSE: SBF) (the "Fund") announced today that its Board of Directors has unanimously approved a proposal to convert the Fund from a closed-end investment company to an open-end investment company, subject to stockholder approval. The proposal to open-end the Fund is also conditioned on stockholder approval of a new Management Agreement between the Fund and its current investment adviser, Salomon Brothers Asset Management Inc ("SBAM"), at a special meeting of stockholders currently scheduled to be held later today. The special meeting is expected to be adjourned to November 29, 2005 to give stockholders the opportunity to consider this new development. The new Management Agreement would take effect upon the closing of the sale by Citigroup Inc. of its asset management business, which includes SBAM, to Legg Mason, Inc. This transaction is expected to close on December 1, 2005.

The Board is proposing the Fund's conversion to an open-end fund in light of stockholder sentiments expressed during the proxy solicitation for approval of the new Management Agreement. The Board of Directors of the Fund has determined that converting to an open-end fund would accomplish the goal of allowing all stockholders an opportunity to obtain near net asset value for their shares in a manner that is most consistent with the interests of all stockholders of the Fund.

R. Jay Gerken, Chairman and President of the Fund said, "The open-end structure was the best option among several we considered in seeking to be responsive to stockholders of The Salomon Brothers Fund. While the closed-end fund structure offers many benefits, we believe that the particular investment objective and strategies of this specific fund may also be pursued in an open-end format."

The Fund is also announcing that Elliott Associates, L.P. and Elliott International, L.P. (collectively, "Elliott") and the Fund have entered into a settlement agreement pursuant to which Elliott has agreed to terminate its opposition to the approval of the Fund's new Management Agreement, and support the Board's recommendation that stockholders vote to approve the new Management Agreement. Stockholders who executed blue cards can assure their votes will be counted by executing and returning a WHITE proxy card or by calling 1-888-293-6728.

Terms of New Open-End Fund. As an open-end fund, the Fund's shares would be redeemable at net asset value. During the first year after converting to an open-end fund, redemptions would be subject to a 0.75% redemption fee of the aggregate net asset value of the stockholder's shares being redeemed. This fee would be paid to the Fund to cover, among other things, administrative, trading and other costs relating to redemption, which costs would otherwise be borne by the Fund's remaining stockholders. If conversion to an open-end fund is approved by stockholders, the Fund would delist its shares from the New York Stock Exchange and begin continuously offering its shares to the public, initially as part of the Salomon Brothers fund family, following the effective date of a registration statement to be filed with the U.S. Securities and Exchange Commission ("SEC"). Shares acquired while the Fund operated as a closed-end fund would be converted into shares that would not be subject to any distribution-related fees.

Requirements for Conversion. Conversion to an open-end fund is subject to approval by the affirmative vote of the holders of at least two-thirds of the Fund's outstanding shares and conditioned upon stockholder approval of the new Management Agreement. If the new Management Agreement is approved, stockholders of the Fund will be asked to vote on a proposal to convert to an open-end fund, and certain related proposals, at a special meeting of stockholders expected to be held in the first quarter of 2006. No record or meeting date has yet been set for these votes.

Settlement of Proxy Contest. Under the settlement agreement between the Fund and Elliott, Elliott has agreed to support the Board's recommendation that stockholders vote to approve the new Management Agreement. Elliott will also cease soliciting proxies from stockholders for the Special Meeting relating to the new Management Agreement and will not vote any proxies it previously received. Elliott has also agreed to support the Board's proposal to open-end the Fund.

In addition, Elliott has agreed not to sell or transfer the rights to vote its shares of the Fund prior to the record date for the stockholder meeting at which conversion of the Fund to an open-end fund will be considered. Elliott has also entered into a separate settlement agreement with SBAM containing certain agreements with respect to other closed-end funds and Elliott's agreement to support stockholder approval of the new Management Agreement.

The summary of the settlements reached by Elliott, the Fund and SBAM included in this press release is qualified in its entirety by reference to the full text of the settlement agreements reached by Elliott, the Fund and SBAM, which will be filed by the Fund with the SEC and will be available for free on the SEC's website, http://www.sec.gov. Elliott, the Fund and SBAM have agreed not to make any additional public statements relating to the settlements.