SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
INTERMEDIATE MUNI 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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 was determined):
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(4) Proposed maximum aggregate value of transaction:
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(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 the registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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INTERMEDIATE MUNI FUND, INC.
125 Broad Street
New York, New York 10004
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2005
--------------------
To the Stockholders of Intermediate Muni Fund, Inc.:
The Annual Meeting of Stockholders of Intermediate Muni Fund, Inc. (the
"Fund") will be held at Citigroup Center, 153 East 53rd Street, 14th Floor, New
York, New York, on May 24, 2005 at 3:30 P.M. (Eastern Time) for the following
purposes:
1. To elect three Class II directors, each to hold office for the term
indicated and until his or her successor shall have been elected and qualified;
2. To elect three Class III directors, each to hold office for the term
indicated and until his or her successor shall have been elected and qualified;
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 18, 2005
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
Robert I. Frenkel
Secretary
New York, New York
May 3, 2005
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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.
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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 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. (by John Doe, Treasurer)
(2) ABC Corp. .......................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe,
Treasurer ........................ John Doe
(4) ABC Corp. Profit Sharing Plan ...... John Doe, Trustee
Trust Accounts
--------------
(1) ABC Trust .......................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee,
u/t/d 12/28/78 ................... Jane B. Doe
Custodial or Estate Accounts
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA .... John B. Smith
(2) John B. Smith ...................... John B. Smith, Executor
INTERMEDIATE MUNI FUND, INC.
125 Broad Street
New York, New York 10004
--------------------
PROXY STATEMENT
--------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2005
--------------------
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Intermediate Muni 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 Citigroup Center, 153 East 53rd
Street, 14th Floor, Conference Center, New York, New York 10022, on May 24, 2005
at 3:30 p.m. (Eastern Time), and at any adjournments thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders (the
"Notice").
The cost of soliciting proxies will be borne by the Fund. Proxy
solicitations will be made mainly by mail. Solicitation costs are expected to be
approximately $18,000. In addition, certain officers, directors and employees of
the Fund; Smith Barney Fund Management, LLC ("SBFM" or the "Manager"), the
Fund's investment manager; Citigroup Global Markets Inc. ("CGM"), an affiliate
of SBFM; and/or PFPC Inc. ("PFPC"), the Fund's transfer agent, may solicit
proxies in person or by telephone, telegraph, or mail. CGM is located at 388
Greenwich Street, New York, NY 10013; SBFM is located at 399 Park Avenue, New
York, New York 10022; and PFPC is located at P.O. Box 8030, Boston,
Massachusetts 02266. In addition, the Fund will reimburse brokerage firms or
other record holders for their expenses in forwarding solicitation material to
beneficial owners of shares of the Fund.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended December 31, 2004, has previously been furnished to all
stockholders of the Fund. This proxy statement and form of proxy are first being
mailed to stockholders on or about May 5, 2005. The Fund will provide, without
charge, additional copies of the annual report to any stockholder upon request
by calling the Fund at 1-800-331-1710.
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" 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
1
not received instructions from the beneficial owner or other persons entitled to
vote 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 the requisite approval of the proposals is
measured by a portion of the votes actually cast, abstentions and broker
"non-votes" will have no impact on the approval of a proposal. Proposals 1 and 2
each requires for approval the affirmative vote of a plurality of the votes cast
at the Meeting with a quorum present. Any proxy may be revoked at any time prior
to the exercise thereof by submitting another proxy bearing a later date, 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 to 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 to the extent
permissible under applicable law.
The Board of Directors of the Fund has fixed the close of business on
March 18, 2005 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 on that 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. The fund has one class
of Common Stock which has a par value of $.001 per share. At the Record Date,
the Fund had outstanding 14,032,784.389 shares of Common Stock. The Fund has one
series of Preferred Stock outstanding, Municipal Auction Rate Cumulative
Preferred Series M, with a $25,000 per share liquidation preference. As of the
Record Date, there were 2,000 shares of Preferred Stock outstanding. The shares
of Common Stock and the shares of Preferred Stock are referred to collectively
as the "Shares."
At the Record Date 13,765,396 shares, or 98% of the Fund's outstanding
shares, were held in accounts, but not beneficially owned, by CEDE & CO., as
nominee for The Depository Trust Company, 55 Water Street, 25th Floor, New York,
NY 10041. At the Record Date, no single shareholder or "group" (as that term is
used in Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act")),
to the knowledge of the Board or the Fund, owned beneficially 5% or more of the
outstanding shares of the Fund. As of the Record Date, the officers and Board
members of the Fund in the aggregate beneficially owned less than 1% of the
outstanding shares of the Fund.
In the event that a quorum is not present, or if sufficient votes in favor
of the proposals set forth in the Notice and this Proxy Statement are not
received by the time scheduled for the Meeting, the persons named as proxies may
move for one or more adjournments of the Meeting to permit further solicitation
of proxies with respect to such proposal. 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
2
actually cast, the nature of any further solicitation and the information to be
provided to stockholders 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.
As of the record date, to the knowledge of the Fund, no securities issued
by CGM's ultimate parent corporation, Citigroup Inc. ("Citigroup"), were held by
directors who are not "interested persons" as that term is used in the
Investment Company Act of 1940, as amended (the "1940 Act").
PROPOSALS NO. 1 AND NO. 2
ELECTION OF CLASS II AND CLASS III DIRECTORS
In accordance with the Fund's Charter, the Board of Directors of the Fund
is currently classified into three classes. Under normal circumstances, the
directors in each class are elected for a three-year period, and each class is
elected in a year different from the others. Moreover, under the terms of the
Fund's Charter, the holders of Preferred Stock are entitled as a class, to the
exclusion of the holders of the Common Stock, to elect two directors of the Fund
(the "Preferred Share Directors"). Jane F. Dasher and Paul Hardin have been
designated as Preferred Share Directors. All other directors are elected by the
holders of Common Stock and Preferred Stock voting together as a single class.
Notwithstanding the foregoing, both Class II and Class III Directors will
be elected at this year's Annual Meeting. The proxy statement submitted to
shareholders in connection with the Annual Meeting of Shareholders in 2004
sought the election of Class II Directors and, while the information submitted
to shareholders regarding the election of Class II Directors was accurate and
correctly described the required vote, the proxy cards did not contain correct
voting instructions. As a result, the Board determined, based on the advice of
counsel, that the election in 2004 should be held again. The Board also
determined, based on the advice of counsel, that no effect should be given to
the election and that, as a result, the then-incumbent directors in Class II
continued to hold office. In order to resume the regular cycle of elections,
Class II directors are proposed for election for a two-year period, while Class
III Directors are proposed for election for the regular three-year term.
The directors serving in Class II, who are the same nominees as those
nominees put up for election at the 2004 Annual Meeting, have been nominated by
the Board of Directors for re-election at the Meeting to serve for a term of two
years (until the 2007 Annual Meeting of Stockholders) or until their successors
have been duly elected and qualified.
The directors serving in Class III have terms expiring at the Meeting; the
Class III directors currently serving on the board have been nominated by the
Board of
3
Directors for re-election at the Meeting to serve for a term of three years
(until the 2008 Annual Meeting of Stockholders) or until their successors have
been duly elected and qualified.
At the Meeting the holders of the Fund's Preferred Stock are being asked
to vote for Mr. Hardin (a Class II Director) and Ms. Dasher (a Class III
Director) as Directors of the Fund. The remaining Class II Directors and Class
III Directors are elected by holders of the Common Stock and Preferred Stock
voting together as a single class. The affirmative vote of a plurality of the
votes of the Common Stock and Preferred Stock cast at the Meeting at which a
quorum is present is sufficient to elect each nominee except Mr. Hardin and Ms.
Dasher, for whom the affirmative vote of a plurality of the votes of the
Preferred Stock voting as a class is required. It is the intention of the
persons named in the enclosed proxy to vote in favor of the election of the
persons listed below as nominees.
The Board knows of no reason why any of the Class II or Class III 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 may recommend.
Certain information concerning the nominees is set forth below. All of the
nominees for Class II and Class III currently serve as Directors of the Fund.
Any director affiliated with the Manager or otherwise considered an "interested
person" of the Fund, as defined in the 1940 Act, is indicated by an asterisk
(*). Information as to beneficial ownership is based upon information furnished
to the Fund by the Directors.
4
Persons Nominated for Election as Directors
Number of
Term of Portfolios
Position Office and Principal Overseen By Other
Held Length of Occupation(s) Nominee Directorships
Name, Address and with Time During Past (including Held by
Year of Birth Fund Served Five Years the Fund) Director
------------------------ -------- ---------- ------------- ----------- -------------
CLASS II DIRECTORS
NON-INTERESTED DIRECTORS:
Paul Hardin Director Since Professor of Law and 34 None
12083 Morehead 1994 Chancellor Emeritus at
Chapel Hill, NC the University of
27514-8426 North Carolina
Birth Year: 1931
Roderick C. Rasmussen Director Since Investment Counselor 27 None
9 Cadence Court 1993
Morristown, NJ 07960
Birth Year: 1926
John P. Toolan Director Since Retired 27 John
7202 Southeast 1993 Hancock
Golf Ridge Way Funds
Hobe Sound, Fl 33455
Birth Year: 1930
CLASS III DIRECTORS
NON-INTERESTED DIRECTORS:
Lee Abraham Director Since 1999 Retired; Former 27 Signet Group
13732 LeHavre Dr. Director of Galey PLC (specialty
Frenchman's Creek & Lord (fabrics), retail jeweler)
Palm Beach Gardens, FL Liz Claiborne (apparel),
33410 R.G. Barry Corp.
Birth Year: 1927 (footwear)
Jane F. Dasher Director Since 1999 Controller of PBK 27 None
Korsant Partners Holdings Inc., a
283 Greenwich Avenue family investment
3rd Fl company
Greenwich, CT 06830
Birth Year: 1949
Donald R. Foley Director Since 1993 Retired 19 None
3668 Freshwater Drive
Jupiter, FL33477
Birth Year: 1922
The Class I directors make up the remainder of the Board. None of the Class I
Directors will stand for election at the Meeting as their terms are not due to
expire until 2006.
5
Number of
Term of Portfolios
Position Office and Principal Overseen By Other
Held Length of Occupation(s) Nominee Directorships
Name, Address and with Time During Past (including Held by
Year of Birth Fund Served Five Years the Fund) Director
------------------------ -------- ---------- ------------- ----------- -------------
CLASS I DIRECTORS
NON-INTERESTED DIRECTOR:
Richard E. Hanson, Jr. Director Since Retired; Former Head of 27 None
2751 Vermont Route 140 1999 the New Atlanta Jewish
Poultney, VT 05760 Community High School
Birth Year: 1941 (from 1996 to 2000)
INTERESTED DIRECTOR:
R. Jay Gerken* Director/ Since Managing Director of 221 None
Citigroup Asset Chairman, 2002 CGM; Chairman,
Management ("CAM") President President and Chief
399 Park Avenue and Chief Executive Officer of
New York, NY 10022 Executive Smith Barney Fund
Birth Year: 1951 Officer Management LLC
("SBFM"), Travelers
Investment Advisor,
Inc. ("TIA") and Citi
Fund Management Inc.
("CFM"); President and
Chief Executive Officer
of certain mutual funds
associated with Citigroup;
Formerly, Portfolio
Manager of Smith
Barney Allocation
Series Inc. (from 1996-
2001) and Smith Barney
Growth and Income
Fund (from 1996-2000)
----------
* Designates a Director who is affiliated with the Manager and considered an
"interested person" of the Fund as defined under the 1940 Act.
Allan J. Bloostein, formerly a Class I Director, retired from the Board as
of December 31, 2004, and has become a Director Emeritus.
6
Beneficial Ownership Report
Aggregate Dollar Range* of Equity
Dollar Range* of Equity Securities in All Funds Overseen by
Name of Director Securities in the Fund(1) Director and Advised by SBFM(1)
---------------------- ------------------------- -----------------------------------
NON-INTERESTED DIRECTORS
Lee Abraham A E
Jane F. Dasher B E
Donald R. Foley D E
Paul Hardin A E
Richard E. Hanson B C
Roderick C. Rasmussen B C
John P. Toolan A E
INTERESTED DIRECTOR
R. Jay Gerken C E
----------
(*) The dollar ranges are as follows: "A" = None; "B" = $1-$10,000; "C" =
$10,001-$50,000; "D" = $50,001-$100,000; "E" = over $100,000.
(1) This information has been furnished by each director as of December 31,
2004. "Beneficial ownership" is determined in accordance with Rule
16a-1(a)(2) promulgated under the 1934 Act.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act and Section 30(h) of the 1940 Act in
combination require the Fund's directors and officers, and persons who own more
than 10% of the Fund's common stock as well as SBFM and certain of its
affiliated persons, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC") and the American Stock Exchange
("AMEX"). Such persons are required by SEC regulations to furnish the Fund with
copies of all such filings. Based solely upon its review of the copies of such
forms received by it and certain other information received by it, the Fund
believes that, for the fiscal year ended December 31, 2004, all filing
requirements applicable to such persons were met.
Committees of the Board of Directors
The Fund has a separately designated standing Corporate Governance and
Nominating Committee ("Nominating Committee"). The Fund has a separately
designated standing Audit Committee ("Audit Committee") established in
accordance with Section 3(a)(58)(A) of the 1934 Act. Both committees are
comprised solely of members who are independent as defined in the AMEX's listing
standards and are not "interested persons" of the Fund as defined in the 1940
Act. The members of the Audit Committee are Ms. Dasher and Messrs. Abraham and
Toolan. The Board of Directors of the Fund has determined that all members of
the Fund's Audit Committee are financially literate. The members of the
Nominating Committee are Messrs. Abraham, Foley and Hanson.
The principal functions of the Audit Committee are to (a) assist the Board
of Directors in its oversight of (i) the integrity of the Fund's financial
statements, (ii) the Fund's compliance with legal and regulatory requirements,
(iii) the qualifications and independence of the Fund's independent registered
public accounting firm and (iv) the performance of the Fund's internal audit
function and
7
independent registered public accounting firm; (b) approve, and recommend to the
Independent Board Members (as such term is defined in the Audit Committee
Charter) for their ratification, the selection, appointment, retention or
termination of the Fund's independent registered public accounting firm, as well
as approving the compensation thereof; (c) approve all audit and permissible
non-audit services provided to the Fund and certain other persons by such
independent registered public accounting firm; and (d) prepares the report
required to be prepared by the committee pursuant to SEC rules for inclusion in
the Fund's annual proxy statement. The Fund adopted an Amended and Restated
Audit Committee Charter at a meeting held on March 10, 2004, a copy of which is
attached hereto as Exhibit A.
The Fund has an Investment Committee responsible for reviewing the
investment performance of the Fund. The members of this committee are directors
who are not "interested persons" of the Fund as defined under the 1940 Act (the
"independent directors"). The members of the Investment Committee are Messrs.
Hardin, Rasmussen and Toolan.
The Fund also has a pricing committee composed of the Chairman of the
Board and one independent director which is charged with determining fair value
prices for securities when required. During the Fund's most recent fiscal year,
the pricing committee met once.
Seven meetings of the Board were held between January 1, 2004 and December
31, 2004, five of which were regular meetings. Three Nominating Committee
meetings, two Audit Committee meetings and two Investment Committee meetings
were held during the fiscal year ended December 31, 2004. No Director attended
less than 75% of the Board meetings and the committee meetings of which he or
she is a member. The Fund does not have a formal policy regarding attendance by
Directors at annual meetings but may consider a policy in the future.
The Nominating Committee will accept nominees recommended by a stockholder
as it deems appropriate. At the present time there are no vacancies on the
Board. Stockholders who wish to recommend a nominee should send recommendations
to the Fund's Secretary that include all information relating to such person
that is required to be disclosed in solicitations of proxies for the election of
Directors. A recommendation must be accompanied by a written consent of the
individual to stand for election if nominated by the Board of Directors and to
serve if elected by the stockholders. The Fund adopted a Nominating Committee
Charter at a meeting held on March 10, 2004, a copy of which is attached to this
Proxy Statement as Exhibit B.
The Nominating Committee identifies potential nominees through its network
of contacts. The Nominating Committee meets to discuss and consider such
candidates' qualifications and then chooses a candidate by majority vote. The
Nominating Committee does not have specific, minimum qualifications for nominees
and has not established specific qualities or skills that it regards as
necessary for one or more of the Fund's directors to possess (other than any
qualities or skills that may be required
8
by applicable law, regulation or listing standard). However, as set forth in the
Nominating Committee Charter, in evaluating a person as a potential nominee to
serve as a director of the Fund, the Nominating Committee may consider the
following factors, among any others it may deem relevant:
o whether or not the person is an "interested person" as defined in
the 1940 Act and whether the person is otherwise qualified under
applicable laws and regulations to serve as a director of the Fund;
o whether or not the person has any relationships that might impair
his or her independence, such as any business, financial or family
relationships with Fund management, the investment manager of the
Fund, Fund service providers or their affiliates;
o whether or not the person serves on boards of, or is otherwise
affiliated with, competing financial service organizations or their
related mutual fund complexes;
o whether or not the person is willing to serve, and willing and able
to commit the time necessary for the performance of the duties of a
director of the Fund;
o the contribution which the person can make to the Board and the Fund
(or, if the person has previously served as a director of the Fund,
the contribution which the person made to the Board during his or
her previous term of service), with consideration being given to the
person's business and professional experience, education and such
other factors as the Committee may consider relevant;
o the character and integrity of the person; and
o whether or not the selection and nomination of the person would be
consistent with the requirements of the Fund's retirement policies.
9
COMPENSATION
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 $13,299 were paid to such directors by the
Fund during the calendar year ended December 31, 2004. Fees for the Independent
Directors, who also serve as board members of certain other funds sponsored by
or affiliated with CGM, are currently set at $60,000 per annum plus a per
meeting fee of $2,500 with respect to in-person meetings and $100 for each
telephone meeting. The fees are allocated among the funds for which the
directors serve based on the average net assets of such funds. 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 CGM.
The following table shows the compensation paid by the Fund to each person
who was a Director during the Fund's fiscal year ended December 31, 2004:
Compensation Table
Aggregate
Compensation
from Fund
Aggregate and Fund
Compensation Complex Number of
from Fund Paid to Directors Portfolios for
for the Fiscal for the Calendar Which Director
Year Ended Year Ended Serves within
Name of Person 12/31/04 12/31/04 Fund Complex
-------------- --------------- ----------------- ---------------
Lee Abraham $200 $ 87,600 27
Allan J. Bloostein** 425 133,400 None
Jane F. Dasher 537 85,100 27
Donald R. Foley* 200 52,550 19
Richard E. Hanson, Jr. 425 79,400 27
Paul Hardin 425 133,800 34
R. Jay Gerken+ 0 0 221
Roderick C. Rasmussen* 330 49,400 27
John P. Toolan 437 82,400 27
----------
+ Designates a director who is an "interested person" of the Fund as defined
under the 1940 Act.
* Pursuant to the Fund's deferred compensation plan, the indicated Directors
have elected to defer the following amounts of their compensation from the
Fund: Donald R. Foley: $238 and Roderick C. Rasmussen: $95, and the
following amounts of their total compensation from the Fund Complex:
Donald R. Foley: $13,350 and Roderick C. Rasmussen: $30,000.
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, unless elected as a director prior to the adoption
of the emeritus program. 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. During the Fund's last fiscal year, total
compensation paid by the Fund to Directors Emeritus totalled $425.
** Mr. Bloostein became a Director Emeritus as of December 31, 2004.
10
Current Officers
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:
Name, Address and Position(s) Length of Principal Occupation(s) During
Year of Birth Held with Fund Time Served Past Five Years
--------------------- ------------------- ------------- ------------------------------
R. Jay Gerken Chief Executive Officer, 2002 to (see table of directors above)
CAM Chairman of the Board date
399 Park Avenue and President
New York, NY 10022
Birth Year: 1951
Andrew B. Shoup Senior Vice President 2003 to Director of CAM; Chief Administrative
CAM and Chief Administrative date Officer of mutual funds associated with
125 Broad Street Officer Citigroup; Head of International Funds
10th Floor Administration of CAM from 2001
New York, NY 10004 to 2003; Director of Global Funds
Birth Year: 1956 Administration of CAM from 2000 to 2001;
Head of U.S. Citibank Funds
Administration of CAM from 1998 to 2000.
Peter M. Coffey Vice President 1992 to Managing Director of CGM.
CAM and Investment date
399 Park Avenue Officer
4th Floor
New York, NY10022
Birth Year: 1944
Robert I. Frenkel Secretary and 2003 to Managing Director and General Counsel,
CAM Chief Legal date Global Mutual Funds for CAM and its
300 First Stanford Place Officer predecessor (since 1994); Secretary and
4th Floor Chief Legal Officer of mutual funds
Stamford, CT 06902 associated with Citigroup.
Birth Year: 1954
Robert J. Brault Chief Financial Since Director of CGM; Chief Financial
CAM Officer and Treasurer 2004 Officer and Treasurer of certain mutual
125 Broad Street funds associated with Citigroup;
11th Floor Director of Internal Control for CAM
New York, NY 10004 U.S. Mutual Fund Administration (from
Birth Year: 1965 2002 to 2004); Director of Project
Management & Information Systems for CAM
U.S. Mutual Fund dministration (from 2000
to 2002);Vice President, of Mutual Fund
Administration at Investors Capital
Services (from 1999 to 2000)
Kaprel Ozsolak Controller 2002 to Vice President of CGM; Controller
CAM date of certain funds associated with
11th Floor Citigroup.
125 Broad Street
New York, NY10004
Birth Year: 1965
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF NOMINEES TO THE BOARD.
11
Audit Committee Report
The purposes of the Fund's Audit Committee include assisting the Board of
Directors in its oversight of the Fund's financial reporting process and
internal controls, the Fund's financial statements and the selection of the
Fund's independent registered public accounting firm. Management, however, is
responsible for the preparation, presentation and integrity of the Fund's
financial statements, and the independent registered public accounting firm is
responsible for planning and carrying out proper audits and reviews.
In connection with the audited financial statements as of and for the year
ended December 31, 2004 included in the Fund's Annual Report for the year ended
December 31, 2004 (the "Annual Report"), at a meeting held on February 24, 2005,
the Audit Committee considered and discussed the audited financial statements
with management and the independent registered public accounting firm, and
discussed the audit of such financial statements with the independent registered
public accounting firm.
In addition, the Audit Committee discussed with the independent registered
public accounting firm the quality, and not just the acceptability under
generally accepted accounting principles, of the accounting principles applied
by the Fund, and such other matters brought to the attention of the Audit
Committee by the independent registered public accounting firm required by
Statement of Auditing Standards No. 61, as currently in effect. The Audit
Committee also received from the independent registered public accounting firm
the written statement required by Independence Standards Board Statement No. 1,
as currently in effect, delineating relationships between the independent
registered public accounting firm and the Fund and discussed the impact that any
such relationships may have on the objectivity and independence of the
independent registered public accounting firm.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including auditor independence. Moreover, the Audit
Committee relies on and makes no independent verification of the facts presented
to it or representations made by management or the independent registered public
accounting firm. Accordingly, the Audit Committee's oversight does not provide
an independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures, designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not provide any assurance
that the audit of the Fund's financial statements has been carried out in
accordance with generally accepted accounting standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that the Fund's registered public accounting firm is in fact
"independent."
12
Based on its consideration of the audited financial statements and the
discussions referred to above with management and the independent registered
public accounting firm and subject to the limitations on the responsibilities
and role of the Audit Committee set forth in the Charter and those discussed
above, the Committee recommended to the Board of Directors that the audited
financial statements be included in the Fund's Annual Report.
Respectfully submitted,
Jane F. Dasher
Lee Abraham
John P. Toolan
February 24, 2005
Disclosure of Independent Registered Public Accounting Firm Fees
Audit Fees. Fees for the annual audit of the Fund's financial statements
by KPMG LLP ("KPMG") the Fund's independent registered public accounting firm,
for the fiscal years ended December 31, 2003 and December 31, 2004 were $15,000
and $17,000, respectively.
Audit-Related Fees. KPMG did not receive any fees for services related to
the audit of the Fund's financial statements for the fiscal years ended December
31, 2003 and December 31, 2004.
Tax Fees. Fees for services rendered by KPMG for tax compliance for the
fiscal years ended December 31, 2003 and December 31, 2004 were $2,100 and
$2,300, respectively. These amounts represent aggregate fees paid for tax
compliance, tax advice and tax planning services, which include the filing and
amendment of federal, state and local income tax returns, timely tax
qualification review and tax distribution and analysis planning rendered by KPMG
to the Fund.
All Other Fees. Fees billed to the Fund by KPMG during the years ended
December 31, 2003 and December 31, 2004 were $12,500 and $10,000, respectively.
These amounts represent fees billed for agreed upon procedures performed to
certify the Fund's compliance with rating agency requirements and restrictions.
Pre-Approval Policies and Procedures. The Audit Committee Charter requires
that the Audit Committee shall approve (a) all audit and permissible non-audit
services to be provided to the Fund and (b) all permissible non-audit services
to be provided by the Fund's independent registered public accounting firm to
the Manager and any service providers controlling, controlled by or under common
control with the Manager that provide ongoing services to the Fund ( "Covered
Service Providers") if the engagement relates directly to the operations and
financial reporting of the Fund. The Audit Committee may implement policies and
procedures by which such services are approved other than by the full Committee.
13
The Audit Committee may not approve non-audit services that the Committee
believes may impair the independence of the independent registered public
accounting firm. As of March 10, 2004, the date of the approval of the Audit
Committee Charter, permissible non-audit services included any professional
services (including tax services), that are not prohibited services as described
below, provided to the Fund by the independent registered public accounting
firm, other than those provided to the Fund in connection with an audit or a
review of the financial statements of the Fund. Permissible non-audit services
may not include: (i) bookkeeping or other services related to the accounting
records or financial statements of the Fund; (ii) financial information systems
design and implementation; (iii) appraisal or valuation services, fairness
opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal
audit outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services; (viii)
legal services and expert services unrelated to the audit; and (ix) any other
service the Public Company Accounting Oversight Board determines, by regulation,
is impermissible.
Pre-approval by the Audit Committee of any permissible non-audit services
is not required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, the Manager and any Covered Service
Provider constitutes not more than 5% of the total amount of revenues paid to
the independent registered public accounting firm during the fiscal year in
which the permissible non-audit services are provided to (a) the Fund, (b) the
Manager and (c) any Covered Service Provider during the fiscal year in which the
services are provided that would not have to be approved by the Committee; (ii)
the permissible non-audit services were not recognized by the Fund at the time
of the engagement to be non-audit services; and (iii) such services are promptly
brought to the attention of the Audit Committee and approved by the Committee
(or its delegate(s)) prior to the completion of the audit.
There were no services rendered by KPMG to the Fund for which the
pre-approval requirement was waived.
Aggregate Non-Audit Fees. The aggregate non-audit fees billed by KPMG for
non-audit services rendered to the Fund, the Manager and Covered Service
Providers for the fiscal years ended December 31, 2003 and December 31, 2004
were $0 and $75,000, respectively.
The Fund's Audit Committee has considered whether the provision of
non-audit services that were rendered by KPMG to the Manager and Covered Service
Providers which were not pre-approved (not requiring pre-approval) is compatible
with maintaining KPMG's independence. All services provided by KPMG to the Fund,
the Manager or Covered Service Providers which were required to be pre-approved
were pre-approved as required.
14
SUBMISSION OF STOCKHOLDER PROPOSALS
AND OTHER STOCKHOLDER COMMUNICATIONS
Stockholder proposals intended to be presented at the 2006 Annual Meeting
of the stockholders of the Fund must be received by November 30, 2005 to be
included in the proxy statement and the form of proxy relating to that meeting,
as the Fund expects that the 2006 Annual Meeting will be held in April 2006. The
shareholder proposal must be delivered by written notice to the Secretary of the
Fund (addressed to Intermediate Muni Fund, Inc., 300 First Stamford Place, 4th
floor, Stamford, CT 06092). The submission by a stockholder of a proposal for
inclusion in the proxy statement does not guarantee that it will be included.
Stockholder proposals are subject to certain regulations under the federal
securities laws.
The persons named as proxies for the 2006 Annual Meeting of stockholders
will have discretionary authority to vote on any matter presented by a
stockholder for action at that meeting unless the Fund receives notice of the
matter by February 28, 2006, in which case these persons will not have
discretionary voting authority except as provided in the Securities and Exchange
Commission's rules governing stockholder proposals.
The Fund's Audit Committee established guidelines and procedures regarding
the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters (collectively, "Accounting
Matters"). Persons with complaints or concerns regarding Accounting Matters may
submit their complaints to the Citigroup Chief Compliance Officer ("CCO").
Persons who are uncomfortable submitting complaints to the CCO, including
complaints involving the CCO, may submit complaints directly to the Fund's Audit
Committee Chair (together with the CCO, "Complaint Officers"). Complaints may be
submitted on an anonymous basis.
The CCO may be contacted at:
Citigroup Asset Management
Compliance Department
399 Park Avenue, 4th Floor
New York, New York 10022
Complaints may also be submitted by telephone at 800-742-5274. Complaints
submitted through this number will be received by the CCO.
The Fund's Audit Committee Chair may be contacted at:
Intermediate Muni Fund, Inc.
Audit Committee Chair
c/o Jane Dasher
P.O. Box 7441 Greenwich, CT 06836-7441
15
A stockholder who wishes to send any other communications to the Board
should also deliver such communications to the Secretary of the Fund at 300
First Stamford Place, 4th Floor, Stamford, CT 06902. The Secretary is
responsible for determining, in consultation with other officers of the Fund,
counsel, and other advisers as appropriate, which stockholder communications
will be relayed to the Board.
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.
By Order of the Board of Directors,
Robert I. Frenkel
Secretary
May 3, 2005
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE AND SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
16
Exhibit A
AUDIT COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MARCH 10, 2004
Establishment and Purpose
This document serves as the Charter for the Audit Committee (the
"Committee") of the Board of each registered investment company (the "Fund")
advised by Smith Barney Fund Management or Salomon Brothers Asset Management or
one of their affiliates (each, an "Adviser") listed on Appendix A hereto (each
such Charter being a separate Charter). The primary purposes of the Committee
are to (a) assist Board oversight of (i) the integrity of the Fund's financial
statements, (ii) the Fund's compliance with legal and regulatory requirements,
(iii) the qualifications and independence of the Fund's independent auditors and
(iv) the performance of the Fund's internal audit function and independent
auditors; (b) approve, and recommend to the Independent Board Members (as such
term is defined below) for their ratification, the selection, appointment,
retention or termination of the Fund's independent auditors, as well as
approving the compensation thereof; (c) approve all audit and permissible
non-audit services provided to the Fund and certain other persons by the Fund's
independent auditors; and (d) for each closed-end Fund, prepare the report
required to be prepared by the Committee pursuant to the rules of the Securities
and Exchange Commission for inclusion in the Fund's annual Proxy Statement.
Duties and Responsibilities
The Fund's independent auditors are accountable to the Committee.
The Committee shall:
1. Bear direct responsibility for the appointment, compensation,
retention and oversight of the Fund's independent auditors, or of
any other public accounting firm engaged for the purpose of
performing other audit, review or attest services for the Fund.
2. Confirm with any independent auditor retained to provide audit
services that the independent auditor has ensured the appropriate
rotation of the lead audit partner pursuant to applicable
regulations.
A-1
3. Approve (a) all audit and permissible non-audit services1 to be
provided to the Fund and (b) all permissible non-audit services to
be provided by the Fund's independent auditors to the Adviser and
any Covered Service Providers if the engagement relates directly to
the operations and financial reporting of the Fund. The Committee
may implement policies and procedures by which such services are
approved other than by the full Committee.
4. Discuss with the independent auditors any disclosed relationships or
services that may diminish the objectivity and independence of the
independent auditors and, if so determined by the Committee,
recommend that the Board take appropriate action to ensure the
independence of the independent auditors.
5. Review, in consultation with the independent auditors, the proposed
scope of the Fund's audit each year, including the audit procedures
to be utilized in the review of the Fund's financial statements.
6. Inquire of the Adviser and the independent auditors as to
significant tax and accounting policies elected by the Fund
(including matters affecting qualification under Subchapter M of the
Internal Revenue Code).
7. Review with the independent auditors any problems or difficulties
the auditors may have encountered during the conduct of the audit
and management's response, including a discussion with the
independent auditors of the matters required to be discussed by
Statement on Auditing Standards No. 61, 89, 90 or any subsequent
Statement, relating to the conduct of the audit.
----------
(1) The Committee shall not approve non-audit services that the Committee
believes may impair the independence of the auditors. As of the date of
the approval of this Audit Committee Charter, permissible non-audit
services include any professional services (including tax services), that
are not prohibited services as described below, provided to the Fund by
the independent auditors, other than those provided to the Fund in
connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements
of the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services;
(viii) legal services and expert services unrelated to the audit; and (ix)
any other service the Public Company Accounting Oversight Board
determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit services is not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, the Adviser and any service
providers controlling, controlled by or under common control with the
Adviser that provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount of revenues
paid to the independent auditors during the fiscal year in which the
permissible non-audit services are provided by (a) the Fund, (b) the
Adviser and (c) any entity controlling, controlled by or under common
control with the Adviser that provides ongoing services to the Fund during
the fiscal year in which the services are provided that would have to be
approved by the Committee; (ii) the permissible non-audit services were
not recognized by the Fund at the time of the engagement to be non-audit
services; and (iii) such services are promptly brought to the attention of
the Committee and approved by the Committee (or its delegate(s)) prior to
the completion of the audit.
A-2
8. Review, in consultation, as appropriate, with the independent
auditors and significant Fund service providers, matters relating to
internal controls over financial reporting and disclosure controls
and procedures of the Fund and of the Fund's significant service
providers.
9. Request, receive and/or review from the independent auditors such
other materials as deemed necessary or advisable by the Committee in
the exercise of its duties under this Charter; such materials may
include, without limitation, any other material written
communications bearing on the Fund's financial statements, or
internal or disclosure controls, between the independent auditors
and the Fund, the Adviser or other Fund service providers, such as
any management letter or schedule of unadjusted differences, and any
comment or "deficiency" letter (to the extent such letters relate to
financial reporting) received from a regulatory or self-regulatory
organization addressed to the Fund or the Adviser that relates to
services rendered to the Fund.
10. For each closed-end Fund, establish procedures regarding the
receipt, retention and treatment of complaints that the Fund may
receive regarding Fund accounting, internal accounting controls or
auditing matters, including procedures for the confidential or
anonymous submission by Fund officers, employees, stockholders or
service providers of concerns regarding questionable accounting or
auditing matters related to the Fund.
11. For each closed-end Fund, obtain and review a report by the Fund's
independent auditors describing (i) the auditing firm's internal
quality-control procedures; (ii) any material issues raised by the
most recent internal quality-control review, or peer review, of the
auditing firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the
auditing firm, and any steps taken to deal with any such issues; and
(iii) (to assess the auditor's independence) all relationships
between the independent auditor and the Fund.
12. For each closed-end Fund, discuss policies with respect to risk
assessment and risk management.
13. For each closed-end Fund, review hiring policies for employees or
former employees of the Fund's independent auditors.
14. For each closed-end Fund, discuss with management and the Fund's
independent auditors the Fund's audited and discuss with management
the Fund's unaudited financial statements, including any narrative
discussion by management concerning the Fund's financial condition
and investment performance and, if appropriate, recommend the
publication of the Fund's annual audited financial statements in the
Fund's annual report in advance of the printing and publication of
the annual report.
A-3
15. For each closed-end Fund, discuss the Fund's earnings press
releases, as well as financial information and earnings guidance
provided to analysts and rating agencies;
16. For each closed-end Fund, review and evaluate annually the
performance of the Committee and the adequacy of this Charter and
recommend any proposed changes to the Charter to the Board for
approval.
The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain, as it deems
necessary to carry out its duties, special counsel and other experts or
consultants at the expense of the Fund. The Fund shall provide appropriate
funding, as determined by the Committee, for the Committee to carry out its
duties and its responsibilities, including (a) for compensation to be paid to,
or services to be provided by, the Fund's independent auditors or other public
accounting firm providing audit, review or attest services for the Fund, (b) for
payment of compensation to any outside legal, accounting or other advisors,
counsel or consultants employed by the Committee and (c) for the ordinary
administrative expenses of the Committee. In performing its duties, the
Committee shall consult as it deems appropriate with the members of the Board,
officers and employees of the Fund, the Adviser, the Fund's sub-adviser(s), if
any, the Fund's counsel, counsel to the Independent Board Members and the Fund's
other service providers.
Composition
The Committee shall be composed of each Board member who has been
determined not to be an "interested person," as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended ("1940 Act"), of the
Fund (the "Independent Board Members"), or such lesser number as the Board of
the Fund may specifically determine and reflect in the Board's minutes, each of
whom shall be financially literate and at least one of whom shall have
accounting or related financial management expertise as determined by the Fund's
Board in its business judgment. Each member of the Committee must also meet the
independence and experience requirements as set forth in the New York Stock
Exchange's Listed Company Manual or as set forth in the American Stock
Exchange's listing standards, as applicable, and the independence requirements
applicable to investment companies set forth in the Securities Exchange Act of
1934. The Committee shall elect a Chairperson, who shall preside over Committee
meetings. The Chairperson shall serve for a term of three years, which term may
be renewed from time to time.
A-4
Meetings
The Committee shall meet on a regular basis, but not less frequently than
twice a year. Special meetings may also be held upon reasonable notice to the
members of the Committee. An agenda shall be established for each meeting. The
Committee may request any officer or employee of the Fund, the Fund's counsel,
counsel to the Independent Board Members, the Adviser, the Fund's independent
auditors or other interested persons to attend a meeting of the Committee or to
meet with any members of, or consultants to, the Committee. The Committee will
meet periodically with the Fund's independent auditors outside the presence of
the Fund's and the Adviser's officers and employees. The Committee will also
meet periodically with the fund's management outside the presence of the Fund's
independent auditors. Meetings of the Committee may be held in person, by
telephone or by other appropriate means.
One-third of the Committee's members, but not fewer than two members,
shall constitute a quorum. At any meeting of the Committee, the decision of a
majority of the members present and voting shall be determinative as to any
matter submitted to a vote.
Reporting
The Chairperson shall report regularly to the Board on the result of the
Committee's deliberations and make such recommendations as deemed appropriate.
Limits on Role of Committee
The function of the Committee is oversight. The Fund's management is
responsible for (i) the preparation, presentation and integrity of the Fund's
financial statements, (ii) the maintenance of appropriate accounting and
financial reporting principles and policies and (iii) the maintenance of
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The independent auditors are
responsible for planning and carrying out proper audits and reviews. In
fulfilling their responsibilities hereunder, it is recognized that members of
the Committee are not employees of the Fund. As such, it is not the duty or
responsibility of the Committee or its members to conduct "field work" or other
types of auditing or accounting reviews or procedures or to set auditor
independence standards. Each member of the Committee shall be entitled to rely
on (i) the integrity of those persons and organizations within and outside the
Fund from which it receives information and (ii) the accuracy of the financial
and other information provided to the Committee by such persons and
organizations absent actual knowledge to the contrary (which shall be promptly
reported to the Fund's Board) and (iii) statements made by the officers and
employees of the Fund, the Adviser or other third parties as to any information
technology, internal audit and other non-audit services provided by the
independent auditors to the Fund. The designation of a person as an "audit
committee financial expert," within the meaning of
A-5
the rules adopted and implemented under Section 407 of the Sarbanes-Oxley Act of
2002, shall not impose any greater responsibility or liability on that person
than the responsibility and liability imposed on such person as a member of the
Committee, nor does it decrease the duties and obligations of other Committee
members or the Board.
In carrying out its responsibilities, the Committee's policies and
procedures shall be adapted, as appropriate, in order to best react to a
changing environment.
Amendments
This Charter may be amended by a vote of a majority of the Board members.
A-6
Appendix A
Smith Barney Equity Funds
Smith Barney Social Awareness Fund
Smith Barney Muni Funds
California Money Market Portfolio
Florida Portfolio
Georgia Portfolio
Limited Term Portfolio
National Portfolio
Massachusetts Money Market Portfolio
New York Money Market Portfolio
New York Portfolio
Pennsylvania Portfolio
Smith Barney Municipal Money Market Fund, Inc.
High Income Opportunity Fund Inc.*
Smith Barney Funds, Inc.
Large Cap Value Fund
U.S. Government Securities Fund
Short-Term Investment Grade Bond Fund
Smith Barney Income Funds
Smith Barney Dividend and Income Fund
SB Convertible Fund
Smith Barney Diversified Strategic Income Fund
Smith Barney Exchange Reserve Fund
Smith Barney High Income Fund
Smith Barney Municipal High Income Fund
SB Capital and Income Fund
Smith Barney Total Return Bond Fund
Smith Barney Small Cap Core Fund, Inc.
Intermediate Muni Fund, Inc.*
Smith Barney Money Funds, Inc.
Cash Portfolio
Government Portfolio
* Closed-end Funds. The duties and responsibilities of paragraphs 10, 11,
12, and 13 and any other provision applicable exclusively to closed-end
funds apply to this fund only.
A-7
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Exhibit B
CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE CHARTER
Purpose of Committee
The purpose of the Corporate Governance and Nominating Committee (the
"Committees") of the Board of Directors (the "Boards") of the Smith Barney
Investment Companies listed on Appendix A of Exhibit A (the "Funds") is to
oversee the board governance practices of the Funds, to identify and recommend
individuals to the Board for nomination as members of the Board and their
committees (including these Committees) and to establish the agenda for meetings
of the Independent Directors. The Board of the Fund shall establish a Committee.
The Committees shall report to the Board on their activities when appropriate.
Committee Membership
The Committees shall consist solely of two or more members of the Board,
(a) none of whom is an "interested person" of the Fund or their investment
adviser as defined in the Investment Company Act of 1940 (the "Act") or has a
direct or indirect financial interest in the operation of any Fund's plan under
Rule 12b-1 under the Act or in any agreements related to a plan (any such
person, an "Independent Director"), and (b) each of whom the Board has
determined has no material relationship with the Fund and is otherwise
"independent" under the rules of the American Stock Exchange, Inc.
The initial members of the Committees shall be appointed by the Board,
including a majority of the Independent Directors. Candidates to fill subsequent
vacancies in the Committees shall be nominated by the Committees as set forth
below and appointed by the Board. Members shall serve at the pleasure of the
Board and for such term or terms as the Board may determine.
Committee Structure and Operations
Each Committee shall designate one member as its chairperson. In the event
of a tie vote on any issue, the chairperson's vote shall decide the issue. Each
Committee shall meet in person or telephonically as appropriate for the conduct
of its business at times and places determined by the Committee chairperson. In
addition, actions may be taken by unanimous written consent when deemed
necessary or desirable by the Committee.
B-1
Committee Duties and Responsibilities
The following are the duties and responsibilities of the Committees:
1. To monitor developments in corporate governance of the registered
investment company with a view to advising the Board on their
policies, programs and procedures designed to assure compliance with
legislative, regulatory and self-regulatory requirements applicable
to investment company board governance.
2. To make recommendations to the Board from time to time as to changes
that the Committees believe to be desirable to the size of the Board
or any committee thereof.
3. To identify individuals believed to be qualified to become
Independent Directors of the Funds, and to recommend to the Board
the nominees to stand for election as directors at meetings of
stockholders. In the case of a vacancy to be filled in the office of
a director (including a vacancy created by an increase in the size
of a Board), each Committee shall recommend to the Board an
individual to fill such vacancy either through appointment by the
Board or through election by stockholders. In nominating candidates,
each Committee shall take into consideration such factors as it
deems appropriate. The Committees may consider candidates proposed
by management but is not required to do so.
In evaluating a person as a potential nominee to serve as a Director
of the Fund, the Committee should consider among other factors it
may deem relevant:
o whether or not the person is an "interested person" as defined
in the 1940 Act and whether the person is otherwise qualified
under applicable laws and regulations to serve as a Director
of the Fund;
o whether or not the person has any relationships that might
impair his or her independence, such as any business,
financial or family relationships with Fund management, the
investment manager of the Fund, other Fund service providers
or their affiliates;
o whether or not the person serves on boards of, or is otherwise
affiliated with, competing financial service organizations or
their related mutual fund complexes;
o whether or not the person is willing to serve, and willing and
able to commit the time necessary for the performance of the
duties of a Director of the Fund;
B-2
o the contribution which the person can make to the Board and
the Fund (or, if the person has previously served as a
Director of the Fund, the contribution which the person made
to the Board during his or her previous term of service), with
consideration being given to the person's business and
professional experience, education and such other factors as
the Committee may consider relevant;
o the character and integrity of the person; and
o whether or not the selection and nomination of the person
would be consistent with the requirements of the Fund's
retirement policies.
o While the Committee is solely responsible for the selection
and nomination of Directors. It may consider nominees
recommended by Fund stockholders but is not required to do so.
Stockholders who wish to recommend a nominee should send
nominations to the Secretary of the Fund that include all
information relating to such person that is required to be
disclosed in solicitations of proxies for the election of
Directors. The recommendation must be accompanied by a written
consent of the individual to stand for election if nominated
by the Board of Directors and to serve if elected by the
stockholders.
4. To develop and recommend to the Board standards to be applied in
making determinations as to the absence of material relationships
between the Company and a director.
5. To identify Board members qualified to fill vacancies on any
committee of a Board (including the Committee) and to recommend that
the Board appoint the identified member or members to the respective
committee. In nominating a candidate for committee membership, the
Committee shall take into consideration the factors set forth in the
charter of that committee, if any, as well as any other factors it
deems appropriate, including without limitation the consistency of
the candidate's experience with the goals of the committee and the
interplay of the candidate's experience with the experience of other
committee members.
6. Establish agendas for the executive sessions of the Independent
Directors and coordinate with management on agendas for regular
meetings of the Board.
7. Prepare and issue the evaluation required under "Performance
Evaluation" below.
8. Review on a periodic basis director fees and compensation.
9. Any other duties or responsibilities expressly delegated to the
Committees by the Board from time to time relating to the nomination
of Board and committee members and to corporate governance matters.
B-3
Delegation to Subcommittee
A Committee may, in its discretion, delegate all or a portion of its
duties and responsibilities to a subcommittee of the Committee or a committee of
the Board.
Performance Evaluation
The Committees shall produce and provide to the Board an annual
performance evaluation of the Committee, which evaluation shall compare the
performance of the Committee with the requirements of this charter. The
performance evaluation shall also recommend to the Board any improvements to the
Committee charter or to Board governance practices deemed necessary or desirable
by the Committees. The performance evaluation by the Committees shall be
conducted in such manner as the Committees deem appropriate. The report to the
Board may take the form of an oral report by the chairperson of the Committees
or any other member designated by the Committees to make this report.
Resources and Authority of the Committees
The Committees shall have the resources and authority appropriate to
discharge the duties and responsibilities specified in this Charter, including
the authority to select, retain, terminate, and approve the fees and other
retention terms of special counsel or other experts or consultants, such as
search firms used to identify director candidates, as it deems appropriate,
without seeking approval of the Board or management. While it is expected that,
in the normal course of business the Committees would consult with the other
Independent Directors in connection with any such retention, the Committees are
not required to do so.
B-4
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3210
Please mark
|X| votes as in
this example.
The Board of Directors recommends a vote "FOR" the following proposal. This
proxy, when properly executed, will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR each nominee for director.
1. ELECTION OF DIRECTORS
Class II Nominees: (01) Roderick C. Rasmussen, (02) John P. Toolan
Class III Nominees: (03) Lee Abraham, (04) Donald R. Foley
FOR WITHHOLD
ALL |_| |_| FROM ALL
NOMINEES NOMINEES
---------------------------------------
|_| For all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as your 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: ______
COMMON STOCK PROXY COMMON STOCK
INTERMEDIATE MUNI FUND, INC.
125 Broad Street
New York, New York 10004
This Proxy is Solicited on Behalf of the Board of Directors of the Fund
The undersigned hereby appoints R. JAY GERKEN, ROBERT I. FRENKEL, and TODD LEBO,
and each of them acting in the absence of the other, as Proxies, each with the
power to appoint a substitute, and hereby authorizes them to represent and to
vote, as designated herein, all the shares of Common Stock of Intermediate Muni
Fund, Inc. held of record by the undersigned on March 18, 2005 at a Meeting of
Stockholders to be held on May 24, 2005 or any adjournment thereof.
------------ -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
------------ -----------
3210
Please mark
|X| votes as in
this example.
The Board of Directors recommends a vote "FOR" the following proposal. This
proxy, when properly executed, will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR the nominees for director.
1. ELECTION OF DIRECTORS
Class III Nominees: (01) Lee Abraham, (02) Jane Dasher, (03) Donald R. Foley
Class II Nominees: (04) Paul Hardin, (05) Roderick C. Rasmussen, (06) John P.
Toolan
FOR WITHHOLD
ALL |_| |_| FROM ALL
NOMINEES NOMINEES
---------------------------------------
|_| For all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as your 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: ______
PREFERRED STOCK PROXY PREFERRED STOCK
INTERMEDIATE MUNI FUND, INC.
125 Broad Street
New York, New York 10004
This Proxy is Solicited on Behalf of the Board of Directors of the Fund
The undersigned hereby appoints R. JAY GERKEN, ROBERT I. FRENKEL, and TODD LEBO,
and each of them acting in the absence of the other, as Proxies, each with the
power to appoint a substitute, and hereby authorizes them to represent and to
vote, as designated herein, all the shares of Preferred Stock of Intermediate
Muni Fund, Inc. held of record by the undersigned on March 18, 2005 at a Meeting
of Stockholders to be held on May 24, 2005 or any adjournment thereof.
------------ -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
------------ -----------