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
Municipal High Income Fund Inc.
(Name of Registrant as Specified in its Charter)
William J. Renahan
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[X] No longer applicable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.
MUNICIPAL HIGH INCOME FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-------------------------------
TO BE HELD ON FEBRUARY 23, 2000
-------------------------------
To the Shareholders of Municipal High Income Fund Inc.:
Notice is hereby given that the Annual Meeting of Shareholders
of
Municipal High Income Fund Inc. (the "Fund") will be held at the
offices of the
Fund at 388 Greenwich Street, 26th Floor, New York, New York at 9:15
a.m. on
February 23, 2000 for the following purposes:
1. To elect two (2) Class I Directors of the Fund (PROPOSAL
1);
2. To ratify the selection of KPMG LLP as the independent
auditors of the
Fund for the fiscal year ending October 31, 2000 (PROPOSAL 2);
3. To consider and vote upon such other matters as may come
before said
meeting or any adjournment thereof.
The close of business on January 7, 2000 has been fixed as the
record date
for the determination of shareholders entitled to notice of and to
vote at the
meeting and any adjournment thereof.
By Order of the Board of
Directors
Christina T. Sydor
January 24, 2000 Secretary
- --------------------------------------------------------------------
- ------------
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN
THE FUND.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU
PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE
WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES.
INSTRUCTIONS
FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE
COVER.
- --------------------------------------------------------------------
- ------------
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance
to you and may avoid the time and expense to the Fund involved in
validating
your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it
appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of
the party
signing should conform exactly to the name shown in the
registration
on the proxy card.
3. All Other Accounts: The capacity of the individual
signing the proxy
card should be indicated unless it is reflected in the
form of
registration. For example:
Registration Valid
Signature
- ----------- -------
- -------
Corporate Accounts
(1) ABC Corp. ........................................ ABC Corp.
(2) ABC Corp. ........................................ John Doe,
Treasurer
(3) ABC Corp.
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
Custodian 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
<PAGE>
MUNICIPAL HIGH INCOME FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
1-800-331-1710
------------------------------
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 23, 2000
------------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of
proxies by the Board of Directors (the "Board") of Municipal High
Income Fund
Inc. (the "Fund") for use at the Annual Meeting of Shareholders (the
"Meeting")
of the Fund to be held on February 23, 2000 at the Fund's executive
offices at
388 Greenwich Street, 26th Floor, New York, New York and at any
adjournments
thereof. A Notice of Meeting of Shareholders (the "Notice") and a
proxy card
accompany this Proxy Statement.
Proxy solicitations will be made primarily by mail, but proxy
solicitations also may be made by telephone or personal interview
conducted by
officers of the Fund and officers and regular employees of SSB Citi
Fund
Management LLC ("SSB Citi" or the "Manager") (successor to SSBC Fund
Management
Inc.), the Fund's investment adviser and administrator, Salomon
Smith Barney
Inc. ("Salomon Smith Barney"), which currently makes a market in the
Fund's
shares, and PFPC Global Fund Services, the Fund's transfer agent.
The cost of
solicitations and the expense incurred in connection with preparing
the Proxy
Statement and its enclosures will be paid by the Fund. The Fund will
also
reimburse brokerage firms and others for their expenses in
forwarding
solicitation materials to the beneficial owners of shares.
The Annual Report of the Fund, including audited financial
statements for
the fiscal year ended October 31, 1999, has previously been
furnished to all
shareholders. This Proxy Statement is first being mailed to
shareholders on or
about January 24, 2000. The Fund will provide additional copies of
the annual
report to any shareholder upon request by calling the Fund at 1-800-
331-1710.
If the enclosed Proxy is properly executed and returned in
time to be
voted at the Meeting, the shares of capital stock of the Fund
("Shares")
represented thereby will be voted in accordance with the
instructions marked
thereon. Unless instructions to the contrary are marked thereon, a
proxy will be
voted FOR the matters listed in the accompanying Notice of Annual
Meeting of
Shareholders. For purposes of determining the presence of a quorum
for
transacting business at the Meeting, abstentions and broker "non-
votes" (that
is, proxies from brokers or nominees indicating that such persons
have 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. Approval of Proposal 1 requires the
affirmative vote
of a plurality of the votes cast at the Meeting with a quorum
present. Approval
of Proposal 2 requires the affirmative vote of a majority of the
votes cast at
the Meeting with a quorum present. Because
1
<PAGE>
both proposals require a proportion of votes cast for their
approval,
abstensions and broker non-votes may influence whether a quorum is
present, but
will have no impact on the requisite approval of such Proposals. Any
shareholder
who has given a proxy has the right to revoke it at any time prior
to its
exercise either by attending the Meeting and voting his or her
shares in person
or by submitting a letter of revocation or a later-dated proxy to
the Fund at
the above address prior to the date of the Meeting.
In the event that a quorum is not present at the Meeting, or
in the event
that a quorum is present but sufficient votes to approve any of the
proposals
are not received, the persons named as proxies may propose one or
more
adjournments of the Meeting to permit further solicitations of
proxies. 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
adjournment will require the affirmative vote of a majority of the
Shares
represented at the Meeting in person or by proxy. A shareholder vote
may be
taken on one of the proposals in this Proxy Statement prior to such
adjournment
if sufficient votes have been received and it is otherwise
appropriate. Under
the Fund's By-laws, a quorum is constituted by the presence in
person or by
proxy of the holders of a majority of the outstanding Shares
entitled to vote at
the Meeting.
The close of business on January 7, 2000 has been fixed as the
record date
(the "Record Date") for the determination of shareholders entitled
to notice of
and to vote at the Meeting and all adjournments thereof.
The Fund has one class of common stock which has a par value
of $.001 per
Share. As of the Record Date, there were 20,455,082.735 Shares
outstanding. Each
shareholder is entitled to one vote for each Share held and a
proportionate
fraction of a vote for any fractional Share held.
As of the Record Date, to the knowledge of the Fund and the
Board, no
single shareholder or "group" (as that term is used in Section 13(d)
of the
Securities and Exchange Act of 1934 (the "Exchange Act"))
beneficially owned
more than 5% of the outstanding Shares of the Fund. As of the Record
Date, Cede
& Co., as nominee of The Depository Trust Company, was the record
holder of
18,262,318.118 Shares, or 89.28% of the Fund's outstanding Shares.
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 order that a shareholder's Shares may be represented at the
Meeting,
shareholders are required to allow sufficient time for their proxies
to be
received on or before 9:00 a.m. on February 23, 2000.
2
<PAGE>
PROPOSAL 1:
TO ELECT TWO (2) CLASS I DIRECTORS OF THE FUND
The Board of Directors of the Fund is divided into three
classes. The
Directors serving in Class I have terms expiring at the Meeting;
each Class I
Director currently serving on the Board has been nominated by the
Board of
Directors for reelection at the Meeting to serve for a term of three
years
(until the annual meeting in 2003) or until their successors have
been duly
elected and qualified.
Each nominee has consented to serve as a Director if elected
at the
Meeting. If a designated nominee declines or otherwise becomes
unavailable for
election, however, the proxy confers discretionary power on the
persons named
therein to vote in favor of a substitute nominee or nominees.
Certain information concerning the nominees is set forth
below. All the
individuals listed are currently serving as Directors of the Fund.
"Beneficial
ownership" is defined under Section 13(d) of the Securities Exchange
Act of 1934
(the "Exchange Act"). Information as to beneficial ownership is
based upon
information furnished to the Fund by Directors.
<TABLE>
<CAPTION>
Number (and Per-
centage) of the
Fund's Shares
Name, Age, Principal Occupation and Served as
Beneficially
Other Business Experience During the a Director
Owned As Of
Past Five Years Since
Class+ December 31, 1999
- ------------------------------------ ---------- ----
- -- -----------------
<S> <C>
<C> <C>
PERSONS NOMINATED FOR ELECTION AS DIRECTORS
Allan J. Bloostein, age 70
President of Allan J. Bloostein Associates, a 1992 I
625.000
consulting firm; retired Vice Chairman and
(less than 1%)
Director of May Department Stores; Director
of CVS Corporation and Taubman Centers Inc.
Martin Brody, age 78 1988 I
131.849
Consultant, HMK Associates, retired Vice
(less than 1%)
Chairman of the Board of Directors of Restau-
rant Associates Corp., Director of Jaclyn, Inc.
</TABLE>
- ----------
+ Number (I,II,III) indicates whether the director is in Class
I, II or III.
Class I directors will be elected to serve for a three-year
term at the
Meeting. Class II directors will continue to serve until the
2001 annual
meeting. Class III directors will continue to serve until the
2002 annual
meeting.
3
<PAGE>
<TABLE>
<CAPTION>
Number (and Per-
centage) of the
Fund's Shares
Name, Age, Principal Occupation and Served as
Beneficially
Other Business Experience During the a Director
Owned As Of
Past Five Years Since
Class+ December 31, 1999
- ------------------------------------ ---------- ----
- -- -----------------
<S> <C> <C>
<C>
DIRECTORS CONTINUING IN OFFICE
Robert A. Frankel, age 72 1994 II
265.123
Managing Partner of Robert A. Frankel Man-
(less than 1%)
agement Consultants; formerly Corporate Vice
President of The Readers Digest Association
Inc.
Heath B. McLendon,* age 66 1988 II
14,609.000(a)
Managing Director of Salomon Smith Barney,
(less than 1%)
President and Director of SSB Citi and Travel-
ers Investment Advisers, Inc. ("TIA"); Direc-
tor of 64 investment companies associated
with Citigroup, Inc.
Dwight B. Crane, age 62 1988 III
737.895
Professor, Harvard Business School;
(less than 1%)
Director, Peer Review Analysts
William R. Hutchinson, age 57 1995 III
106.876
Group Vice President, Mergers & Acquisitions
(less than 1%)
BP Amoco p.l.c. since January 1, 1999; for-
merly Vice President-Financial Operations
AMOCO Corporation; Director of Associated
Bank and Director of Associated Banc-Corp
</TABLE>
- ----------
+ Number (I,II,III) indicates whether the director is in Class
I, II or III.
Class I directors will be elected to serve for a three-year
term at the
Meeting. Class II directors will continue to serve until the
2001 annual
meeting. Class III directors will continue to serve until the
2002 annual
meeting.
* Designates a Director who is an "interested person" of the
Fund as defined
under the Investment Company Act of 1940.
(a) Represents shares owned by members of this director's family.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Fund's officers
and
directors, and any persons who beneficially own more than ten
percent of the
Fund's outstanding shares, to file reports of ownership with the
Securities and
Exchange Commission, the New York Stock Exchange, Inc. and the Fund.
Based
solely upon its review of the copies of such forms received by it
and
representations from certain such persons, the Fund believes that
during its
fiscal year ended October 31, 1999, all filing requirements
applicable to such
persons were complied with.
4
<PAGE>
The Fund has no compensation or nominating committee of the
Board, or any
committee performing similar functions. The Fund has an audit
committee composed
of directors who are not "interested persons" of the Fund as defined
under the
Investment Company Act of 1940 (the "1940 Act") (the "Independent
Directors"),
which is charged with selecting a firm of independent auditors to
the Fund and
reviewing the Fund's accounting matters with the auditors.
During the Fund's last fiscal year, six meetings of the Board
were held;
in addition, two audit committee meetings were held. No director
attended less
than 75% of the meetings of the Board and audit committee meetings
held in the
last fiscal year.
Only the Independent Directors receive remuneration from the
Fund for
acting as a Director. Aggregate expenses (including reimbursement
for travel and
out-of-pocket expenses) of $3,513.98 were paid to such Directors by
the Fund
during the fiscal year ended October 31, 1999. Fees for the
Independent
Directors are currently set at $5,000 per annum plus $500 per in-
person Board
meeting and $100 per telephone conference call. Officers of the Fund
are
compensated by Salomon Smith Barney.
The following table shows the compensation paid by the Fund to
each person
who was a Director during the Fund's last fiscal year:
<TABLE>
<CAPTION>
Total Total
Aggregate Pension or
Compensation Number of
Compensation Retirement
from Fund and Funds for
from Fund Benefits Accrued
Fund Complex Which Director
for the fiscal year as part of for
the year ended Serves within
Name of Person ended 10/31/99 Fund Expenses
12/31/98 Fund Complex
- -------------- -------------- -------------
- -------- ------------
<S> <C> <C>
<C> <C>
Martin Brody $7,000 0
$132,500 20
Dwight B. Crane 7,000 0
139,975 23
Allan J. Bloostein 7,000 0
90,500 19
Robert A. Frankel 7,500 0
72,250 9
William R. Hutchinson 7,500 0
42,450 7
Heath B. McLendon* 0 0
0 64
</TABLE>
- ----------
* Designates a Director who is an "interested person" of the
Fund as defined
under the 1940 Act.
Upon attainment of age 80, Fund Directors are required to
change to
emeritus status. 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 Fund
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 $3,250.
The names of the principal officers of the Fund are listed in
the table
below together with certain additional information. Each of the
officers of the
Fund will hold such office until a successor is voted upon by the
Board of
Directors.
5
<PAGE>
Principal
Occupations
Position and other
Affiliations
Name and Age (Year First Elected) During The Past
Five Years
- ------------------ --------------------- ------------------
- ------------
Heath B. McLendon, Chief Executive Offi- (see Table of
Directors above)
Age 66 cer, Chairman of the
Board and President
(1992)
Lewis E. Daidone, Senior Vice President Managing Director
of Salomon
Age 42 and Treasurer (1994) Smith Barney Inc.;
Senior Vice
President and
Treasurer or
Executive Vice
President and
Treasurer of 59
investment
companies
associated with
Salomon Smith
Barney; Director
and Senior Vice
President of
SSB Citi and TIA.
Peter Coffey, Vice President and Managing Director
of Salomon
Age 55 Investment Officer Smith Barney Inc.;
Vice
(1999) President of SSB
Citi and
certain other
investment
companies
associated with
Salomon Smith
Barney.
Christina T. Sydor, Secretary (1994) Managing Director
of Salomon
Age 48 Smith Barney Inc.;
Secretary
or Executive Vice
President
and General
Counsel of 59
investment
companies
associated with
Salomon Smith
Barney; General
Counsel and
Secretary of SSB
Citi and TIA.
The principal business address of Mr. McLendon is 7 World
Trade Center,
New York, New York 10048 and of Mr. Coffey, Mr. Daidone and Ms.
Sydor is 388
Greenwich Street, New York, New York 10013.
The election of each Director will require a plurality of the
votes cast.
THE BOARD OF DIRECTORS, INCLUDING ALL THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE ELECTION OF ALL NOMINEES TO THE BOARD.
PROPOSAL 2:
RATIFICATION OF THE SELECTION OF KPMG LLP AS THE
INDEPENDENT AUDITORS FOR THE FUND
FOR THE FISCAL YEAR ENDING OCTOBER 31, 2000
The second proposal to be considered at the Meeting is the
ratification of
KPMG LLP ("KPMG") as the independent auditors for the Fund for the
fiscal year
ending October 31, 2000.
On November 17, 1999, based upon the recommendation of the
Audit Committee
of the Fund's Board of Directors, and in accordance with Section 32
of the 1940
Act and the rules thereunder, the Board and the Independent
Directors selected
6
<PAGE>
KPMG as the Fund's independent auditors for the fiscal year ending
October 31,
2000. KPMG also serves as independent auditors for Salomon Smith
Barney, other
investment companies associated with Salomon Smith Barney, and for
Citigroup
Inc. ("Citigroup"), as of December 31, 1999. Citigroup is the
ultimate parent
company of both SSB Citi and Salomon Smith Barney. KPMG has no
direct or
material indirect financial interest in the Fund, Citigroup or any
other
investment company sponsored by Salomon Smith Barney or its
affiliates.
If the Fund receives a written request from any shareholder at
least five
days prior to the Meeting stating that the shareholder 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
representatives of
KPMG present at the Meeting who will respond to appropriate
questions and have
an opportunity to make a statement.
The affirmative vote of a majority of votes cast is required
to ratify the
selection of KPMG as independent auditors.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE SELECTION OF
INDEPENDENT
AUDITORS.
DEADLINE FOR SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2001
Annual Meeting
of Shareholders of the Fund must be received by September 22, 2000
to be
included in the proxy statement and the form of proxy relating to
that meeting,
as the Fund expects that the 2001 Annual Meeting will be held in
February of
2001. The submission by a shareholder of a proposal for inclusion in
the proxy
statement does not guarantee that it will be included. Shareholder
proposals are
subject to certain regulations under the federal securities laws.
The persons named as proxies for the 2001 Annual Meeting of
Shareholders
will have discretionary authority to vote on any matter presented by
a
shareholder for action at that meeting unless the Fund receives
notice of the
matter by December 12, 2000, in which case these persons will not
have
discretionary voting authority except as provided in the Securities
and Exchange
Commission's rules governing shareholder proposals.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other business at the
Meeting,
nor is the Fund aware of any shareholder proposals. If, however, any
other
matters are properly brought before the Meeting, the persons named
as proxies in
the accompanying form of proxy will vote thereon in accordance with
their
judgment, to the extent permissible under applicable law.
January 24, 2000
7
<PAGE>
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS 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.
8
PROXY
MUNICIPAL HIGH INCOME 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 WILLIAM J. RENAHAN, 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
Municipal High Income Fund Inc. held of record by the undersigned on
January
7, 2000 at a Meeting of Shareholders to be held on February 23, 2000
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, if properly executed, will be voted in the manner
directed by the undersigned shareholder.
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 DIRECTORS FOR WITHHELD
Nominees: Allan J. Bloostein and
Martin Brody
_______________________________
For both nominees except as noted above
2. PROPOSAL TO RATIFY THE FOR AGAINST ABSTAIN
SELECTION OF KPMG LLP
AS THE INDEPENDENT
AUDITORS OF THE
FUND FOR THE FISCAL YEAR
ENDING OCTOBER 31, 2000.
3. 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 name appears to the left. When shares are
held by
joint tenants, both should sign or if one signs, that shareholder's
vote binds
both shareholders. When signing as attorney, executor,
administrator,
agent, trustee or guardian, 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: ________________
