Salomon Brothers Inflation Management Fund Inc. Settles with Karpus Management; Fund to Conduct Tender Offers

Business Wire, Feb 13, 2006

NEW YORK -- Salomon Brothers Inflation Management Fund Inc. (NYSE: IMF) (the "Fund"), a closed-end investment company, today announced that the Fund has entered into an agreement with Karpus Management, Inc. (d/b/a/ Karpus Investment Management).

Under the terms of the settlement, Karpus has agreed to: support the Board of Director's recommendation that Fund shareholders vote to approve a new management agreement (the "Management Agreement") between the Fund and Salomon Brothers Asset Management Inc. at a special meeting of shareholders to be held on April 3, 2006; cease its proxy contest seeking the election of two directors nominated by Karpus to serve as directors of the Fund; and support the Board of Director's recommendation that shareholders vote to approve the election of the two directors nominated by the Board of Directors.

Further to the agreement and subject to the approval of shareholders of the Fund prior to April 29, 2006 of the Management Agreement and the satisfaction of certain other conditions set forth in the settlement agreement, the Fund has agreed to commence a tender offer prior to June 30, 2006 for up to 10% of the then outstanding common shares of the Fund at a price equal to at least 98% of the Fund's net asset value per share on the date the tender offer expires. In addition, if the Fund's common shares have traded on the New York Stock Exchange at an average discount from net asset value of 5% or more as of the last trading day in each week during the last 12-weeks of the previous calendar quarter, the Fund will commence a tender for up to 5% of the then outstanding common shares of the Fund by the end of the fourth calendar quarter of 2006 and in the second and fourth calendar quarters of 2007 and the second calendar quarter of 2008. Although the Board of Directors of the Fund has committed to commence these tenders under the circumstances described, the Fund will not make such tenders if certain market conditions exist that would make it detrimental to the Fund and its shareholders to commence the tenders.

The tender offers would provide the Fund's shareholders with an alternative source of liquidity at a price close to net asset value. The Fund believes that conducting the tender offer at a price equal to at least 98% of net asset value would accommodate the interests of shareholders who seek an opportunity to dispose of their shares as well as shareholders who desire to remain shareholders of the Fund.

The summary of the settlement reached by Karpus and the Fund included in this press release is qualified in its entirety by reference to the full text of the settlement agreement reached between Karpus and the Fund, which will be filed by the Fund with the U.S. Securities and Exchange Commission ("SEC") and will be available for free on the SEC's website, http://www.sec.gov. Karpus and the Fund have agreed not to make any additional public statements relating to the settlements.

The tender offers will be made, and the shareholders of the Fund will be notified, in accordance with the Securities Exchange Act of 1934, as amended, the Investment Company Act of 1940, as amended, and other applicable rules and regulations. The tender offers described in this announcement have not yet commenced. This announcement is not an offer to purchase or a solicitation of an offer to sell shares of the Fund. The tender offers will be made only by an Offer to Purchase for Cash and the related Letters of Transmittal. As soon as each tender offer commences, the Fund will file a tender offer statement with the SEC. SHAREHOLDERS OF THE FUND SHOULD READ THESE DOCUMENTS, WHEN AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Documents filed with the SEC will be available to investors for free at the SEC's website (www.sec.gov).

In connection with the proposal to approve a Management Agreement for the Fund, the Fund has filed a preliminary proxy statement and will file a definitive proxy statement with the SEC. INVESTORS AND SHAREHOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and shareholders may obtain a free copy of the preliminary and definitive proxy statements (when available) and other documents filed by the Fund at the SEC's web site at http://www.sec.gov.

The Fund and its Directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with any proposal to approve the Management Agreement. Information concerning the interests of the Fund's participants in the solicitation is set forth in the Fund's shareholder reports on Form N-CSR previously filed with the SEC and in the proxy statement relating to a proposal to approve the Management Agreement when it becomes available.

Note: On December 1, 2005, Citigroup Inc. ("Citigroup") sold substantially all of its worldwide asset management business, Citigroup Asset Management ("CAM"), to Legg Mason, Inc. ("Legg Mason"). As part of this transaction, the investment adviser for the fund(s) referenced herein became a wholly owned subsidiary of Legg Mason.