SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by 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 Sec. 240.14a-11(c) or Sec. 240.14a-12
MUNICIPAL HIGH INCOME FUND INC.
(Name of Registrant as Specified In Its Charter)
Laurie E. Buckley
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(1), or 14a-6(j)(2).
[ ] $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 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 0-11:1
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4) Proposed maximum aggregate value of transaction:
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1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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:
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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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MANAGED HIGH INCOME PORTFOLIO INC. TWO WORLD TRADE CENTER, 100TH FLOOR
NEW YORK, NEW YORK 10048
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 2, 1994
To the Shareholders of MANAGED HIGH INCOME PORTFOLIO INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Man-
aged High Income Portfolio Inc. (the "Fund") will be held at the offices of
the Fund, Two World Trade Center, 100th Floor, New York, New York at 1:00 p.m.
on June 2, 1994 for the following purposes:
1. To elect seven (7) Directors of the Fund (PROPOSAL 1).
2. To ratify the selection of Coopers & Lybrand as the independent accountants
of the Fund for the fiscal year ended February 28, 1995 (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 April 4, 1994, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote
at the meeting and any adjournments thereof.
By order of the Board of Directors, FRANCIS J. MCNAMARA, III Secretary
May 2, 1994
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.
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 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 a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy should
be indicated unless it is reflected in the form of registration. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID
SIGNATURE
<S> <C>
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 Jane B. Doe
u/t/d 12/28/78
CUSTODIAN OR ESTATE ACCOUNTS
(3) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(4) Estate of John B. Smith John B. Smith,
Jr., Executor
</TABLE>
MANAGED HIGH INCOME PORTFOLIO INC. TWO WORLD TRADE CENTER, 100TH FLOOR
NEW YORK, NEW YORK 10048
ANNUAL MEETING OF SHAREHOLDERS JUNE 2, 1994
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Managed High Income Portfolio Inc. (the
"Fund") for use at the Annual Meeting of Shareholders of the Fund to be held
at 1:00 p.m. on June 2, 1994, at the offices of the Fund, Two World Trade
Center, 100th Floor, New York, New York and at any adjournments thereof (the
"Meeting"). A Notice of Meeting of Shareholders and a proxy card accompany
this Proxy Statement. In addition to solicitations of proxies by mail,
officers of the Fund and officers and regular employees of The Boston Company
Advisors, Inc. ("Boston Advisors"), the Fund's administrator, The Shareholder
Services Group, Inc., a subsidiary of First Data Corporation, the Fund's
transfer agent, or other representatives of the Fund may also solicit proxies
by telephone, telegraph or in person. The costs of solicitation and the
expenses incurred in connection with preparing the Proxy Statement and its
enclosures are anticipated to be $6,000, and such expenses and costs will be
paid by the Fund. The Fund will reimburse brokerage firms and others for their
expenses in forwarding solicitation materials to the beneficial owners of
shares. The Annual Report of the Fund, which includes audited financial
statements for the fiscal period ended February 28, 1994, has previously been
furnished to all shareholders of the Fund. This proxy statement is first being
mailed to shareholders on or about May 2, 1994.
If the enclosed Proxy is properly executed and returned in time to be voted at
the Meeting, the shares of Common 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. For this reason abstentions and broker
"non-votes" will have the effect of a "no" vote for purposes of obtaining the
requisite approval of each proposal.
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 solicitation 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 or more of the proposals in this Proxy Statement prior to such
adjournment if sufficient votes have been received and it is otherwise
appropriate. Any such adjournment will require the affirmative vote of a
majority of those Shares represented at the Meeting in person or by proxy. If
a quorum is present, the persons named as proxies will vote those proxies
which they are entitled to vote FOR any such proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST any such
proposal against any such adjournment. 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 April 4, 1994, has been fixed as 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 $0.001
per share. On April 4, 1994, there were 41,978,224 Shares outstanding. Each
shareholder is entitled to one vote for each full Share and a proportionate
fraction of a vote for each fractional Share held.
As of April 4, 1994, Cede & Co., a nominee partnership of Depository
Trust Company, held 41,054,029 or 97.79% of the Shares outstanding. Of the
Shares included in the Shares held by Cede & Co., Smith Barney Shearson Inc.,
located c/o ADP Proxy Services, 51 Mercedes Way, Edgewood, New York 11717,
held 38,141,780 or 90.8% of the Shares.
As of April 4, 1994, the Fund's officers and Directors beneficially
owned less than 1% of the outstanding Shares.
Proposal 1 requires for approval the affirmative vote of a plurality of
the votes cast at the Meeting in person or by proxy by the shareholders of the
Fund voting on the matter. Proposal 2 requires for approval the affirmative
vote of a majority of the votes cast at the meeting in person or by proxy by
the shareholders of the Fund voting on the matter.
PROPOSAL 1: ELECTION OF DIRECTORS.
At the Meeting, the seven current Directors of the Fund are to be
elected by the Funds' shareholders. Class I Directors of the Fund, as noted in
the accompanying table, will be elected for an initial term of one (1) year,
to expire on the date of the Fund's next annual meeting of shareholders. Class
II Directors of the Fund will be elected for an initial term of two (2) years
to expire as of the date of the annual meeting of shareholders to be held in
1996. Class III Directors of the Fund will be elected for an initial term of
three (3) years to expire as of the date of the annual meeting of shareholders
to be held in 1997. At each subsequent annual meeting, Directors of the Class
whose term of office is then expiring (or if any such Director declines to
stand for reelection, the Director chosen to succeed the Director whose term
is expiring) will be proposed for election for a term expiring at the time of
the third succeeding annual meeting, or when their respective successors are
elected and qualified. It is the intention of the Fund to maintain the
apportionment of Directors among the Classes on as equal a basis as possible.
In no case will a decrease in the number of Directors shorten the term of any
incumbent Director.
Each of the nominees currently serves as a Director of the Fund and has
indicated that he will serve if elected, but if any nominee should be unable
to serve, the proxy confers discretionary power on the persons named therein
to vote in favor of a substitute nominee or nominees.
Set forth below are the nominees for election to the Fund's Board of
Directors, together with certain other information:
<TABLE>
<CAPTION>
NUMBER (AND PERCENTAGE) OF FUND SHARES
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER SERVED AS A BENEFICIALLY OWNED**
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS DIRECTOR SINCE CLASS AS OF APRIL 4, 1994
<S> <C> <C> <C>
JAMES J. CRISONA,+ age 86 1993 II None
Retired; formerly an attorney in private practice; prior to
1976, a Justice of the Supreme Court of the State of New York.
PAOLO M. CUCCHI,+ age 53 1993 I None Dean of College of
Liberal Arts at Drew University.
ALESSANDRO C. DI MONTEZEMOLO,+ age 75 1993 III None Retired; former
Chairman of the Board of Marsh &
McLennan, Inc.; a Director of OffitBank.
ANDREA FARACE, age 38 1993 II 520.7176 Executive Vice
President and Senior Managing Director, '21' (less than 1%)
International Holdings, Inc.; from April 1991 to March 1993, President,
'21' International Holdings, Inc.; from May
1990 to April 1991, Executive, C.I.R. S.p.A.; from October 1989
to May 1990, Managing Director, Shearson Lehman
Hutton Holdings, Inc.; prior to October 1989, Senior Vice President,
Shearson Lehman Hutton Holdings, Inc.
DR. PAUL HARDIN,+ age 62 1993 I None Chancellor of the
University of North Carolina at Chapel Hill;
a Director of The Summit Bancorporation.
HEATH B. MCLENDON,*+ age 60 1993 III 545.6135 Executive Vice
President of Smith Barney Shearson Inc. ("Smith (less than 1%)
Barney Shearson"); Chairman of Smith Barney Shearson Strategy Advisers Inc.
Prior to July 1993, Senior Executive Vice
President of Shearson Lehman Brothers Inc. ("Shearson Lehman Brothers");
Vice Chairman of Shearson Asset Management.
GEORGE M. PAVIA,+ age 66 1993 I None Senior Partner, Pavia
& Harcourt, Attorneys.
<FN>
* Interested person of the Fund as defined in the 1940 Act.
** For this purpose "beneficial ownership" is defined under Section 13(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"). The
information as to beneficial ownership is based upon information furnished
to the Fund by the Directors.
+ Director, Trustee or General Partner of other registered investment
companies for which Smith Barney Shearson
is principal underwriter.
</TABLE>
Section 16(a) of the Exchange Act requires the Fund's officers and
directors, and persons who beneficially own more than ten percent of
the Fund's Common Stock, 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 written representations from certain of such
persons, the Fund believes that during its fiscal year
ended February 28, 1994, all filing requirements applicable to such
persons were complied with.
The principal officers of the Fund are listed in the table below,
with the exception of Mr. McLendon. Mr. McLendon was first elected
Chairman in 1993. This table also shows certain additional information.
Each officer of Fund will hold such office until a successor
has been elected by the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS POSITION AND OTHER AFFILIATIONS
NAME (YEAR FIRST ELECTED) DURING THE PAST FIVE YEARS
<S> <C> <C>
Steven J. Treadway, age 46 President (1993) Executive Vice President
and Director
of Smith Barney Shearson; Director and
President of Mutual Management Corp. and Smith, Barney Advisers, Inc.
and Trustee of Corporate Realty Income Trust I.
Richard P. Roelofs, age 40 Executive Vice Managing Director of
Smith Barney President (1993)
Shearson and Senior Vice President of
Smith Barney Shearson Strategy Advisers, Inc. Prior to July 1993,
Senior Vice President of Shearson Lehman Brothers and
Vice President of Shearson Lehman Investment Strategy Advisors Inc.
John C. Bianchi, age 38 Vice President and Managing Director
of Greenwich Street
Investment Officer (1993) Advisors. Prior to July 1993, Managing
Director of Shearson Lehman
Advisors. Vincent Nave, age 48 Treasurer (1993) Senior Vice
President of Boston Advisors
and Boston Safe Deposit and Trust
Company.
Francis J. McNamara, III, age 38 Secretary (1993) Senior Vice
President and General Counsel of Boston
Advisors.
</TABLE>
The Fund pays each Director who is not a director, officer or employee
of the Fund's investment adviser or administrator, a fee of
$5,000 per year plus $500 per regular meeting attended, together with th
pocket expenses relating to attendance at meetings. The aggregate
remuneration paid by the Fund to such Directors during
the fiscal year ended February 28, 1994 amounted to $47,155.
During the fiscal period ended February 28, 1994, the Directors of
the Fund met five times. Each Director attended at
least 75% of the meetings held during the period they were in office.
The Fund's Audit Committee is comprised of those
Directors who are not "interested persons" of the Fund as defined
in the 1940 Act. The Audit Committee is responsible for
recommending the selection of the Fund's independent accountants
and reviewing all audit as well as nonaudit accounting
services performed for the Fund. During the fiscal period ended
February 28, 1994, the Audit Committee met once. All of the
members of the Audit Committee attended the meeting.
REQUIRED VOTE
Election of each of the listed nominees for Director requires
the affirmative vote of a plurality of the votes cast
at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE ELECTION OF NOMINEES TO THE BOARD.
PROPOSAL 2: RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS.
Coopers & Lybrand, One Post Office Square, Boston, Massachusetts 02109,
have served as independent accountants for
the Fund since its commencement of operations on March 26, 1993
and have been selected by the vote of a majority of those
Directors who are not "interested persons" of the Fund to serve
as independent accountants for the Fund's fiscal year
ending February 28, 1995. Coopers & Lybrand has informed the Fund
that it has no direct or indirect material financial
interest in the Fund, Greenwich Street Advisors Division of
Mutual Management Corporation, the Fund's investment adviser
("Greenwich Street Advisors") or Boston Advisors.
Representatives of Coopers & Lybrand are not expected to be
present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be
available by telephone should any matter arise requiring
their presence.
REQUIRED VOTE
Ratification of the selection of Coopers & Lybrand as independent
accountants requires the affirmative vote of a
plurality of the votes cast at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE "NON-INTERESTED"
DIRECTORS, RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS.
ADDITIONAL INFORMATION
THE INVESTMENT ADVISER
Greenwich Street Advisors, located at 388 Greenwich Street, New York,
New York, has served as investment adviser to
the Fund since July 31, 1993. Greenwich Street Advisors renders
investment advice to clients with total assets under
management of $42.9 billion as of March 31, 1994.
Greenwich Street Advisors is a division of Mutual Management Corp.
which is controlled by Smith Barney Shearson
Holdings Inc., which is in turn a wholly owned subsidiary of
The Travelers Inc. (formerly, Primerica Corporation)
("Travelers"). Travelers is located at 65 East 55th Street, New York, NY 10022.
Prior to July 31, 1993, Shearson Lehman Advisors, a member of
the investment management group of the SLB Asset
Management Division of Shearson Lehman Brothers Inc., served as
investment adviser to the Fund. As of the close of business
on July 30, 1993, Travelers (which at the time was known as Primerica
Corporation) and Smith Barney, Harris Upham & Co.
Incorporated completed the acquisition of substantially all of
the domestic retail brokerage and asset management
businesses of Shearson Lehman Brothers Inc. and Smith Barney,
Harris Upham & Co. Incorporated was renamed Smith Barney
Shearson Inc. As of the close of business on
July 30, 1993, Greenwich Street Advisors succeeded Shearson Lehman Advisors as
the Fund's investment adviser. The new investment advisory
agreement with the Adviser contains terms and conditions
substantially similar to the investment advisory agreement with
the predecessor investment adviser and provides for payment
of fees at the same rate as was paid to such predecessor investment adviser.
The name, position with Greenwich Street Advisors, and
principal occupation of each executive officer and director of
Greenwich Street Advisors is set forth in the following table:
<TABLE>
<CAPTION>
POSITION WITH
GREENWICH PRINCIPAL
NAME STREET ADVISORS OCCUPATION
<S> <C> <C>
Thomas B. Stiles II Chairman and Chief Executive Vice President
Executive Officer of Smith Barney
Shearson
John C. Bianchi Managing Director Same
Robert Brady Managing Director Same
Ellen S. Cammer Managing Director Same
James Conroy Managing Director Same
Joseph P. Deane Managing Director Same
Kenneth Egan Managing Director Same
Jay Gerken Managing Director Same
Jack Levande Managing Director Same
Lawrence T. McDermott Managing Director Same
Ronald Perry Managing Director Same
Kevin Reed Managing Director Same
Phyllis M. Zahorodny Managing Director Same
George Novello Managing Director Same
</TABLE>
An audited consolidated statement of financial condition
of Mutual Management Corp. as of December 31, 1993 is set
forth as Exhibit A to this Proxy Statement.
THE ADVISORY AGREEMENT
Greenwich Street Advisors currently serves as investment adviser
to the Fund pursuant to an Investment Advisory
Agreement (the "Agreement") dated July 31, 1993, the terms of
which were approved by the members of the Board of Directors
on June 9, 1993. Under the terms of the Agreement, Greenwich Street
Advisors has general responsibility for the investment
and management of the Fund's assets, subject to the supervision,
direction and approval of the Board of the Fund, and
subject to and in accordance with the Fund's investment
objective, policies and restrictions as stated in the Fund's
prospectus, Articles of Incorporation and in the manner and to
the extent as may from time to time be approved by the
Directors of the Fund. In discharging its responsibility, Greenwich
Street Advisors has the authority to make investment
decisions for the Fund, to select and place purchase and sale
orders for portfolio transactions for the Fund and to employ
professional portfolio managers and securities analysts who
provide research services to the Fund.
For services rendered to the Fund, the Fund pays the Adviser
a fee computed and paid monthly, at the annual rate of
0.90% of the Fund's average daily net assets. For the fiscal
period ended February 28, 1994, the Fund paid advisory fees to
Greenwich Street Advisors amounting to $4,217,562.
The Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties thereunder, Greenwich Street Advisors
is not liable for any error of judgment or mistake of
law or for any loss suffered by the Fund.
Pursuant to its terms, the Agreement will remain in effect until
July 29, 1995, and from year to year thereafter if
approved annually (i) by the Directors of the Fund or by the
holders of a majority of the Fund's outstanding voting
securities and (ii) by a majority of the Directors who are not
parties to the Agreement or "interested persons" (as defined
in the 1940 Act) of any such party. The Agreement terminates on
its assignment and may be terminated without penalty on 60
days' written notice by the Fund's Board of Directors or by the
vote of the shareholders of the Fund, or upon 90 days'
written notice by the Adviser.
THE ADMINISTRATION AGREEMENT
Boston Advisors was organized in 1978 and is a wholly owned
subsidiary of The Boston Company, Inc. ("TBC"). Both
Boston Advisors and TBC are located at One Boston Place, Boston,
Massachusetts 02108. TBC is a wholly owned subsidiary of
Mellon Bank Corporation ("Mellon").
Boston Advisors currently serves as administrator of the Fund
pursuant to an administration agreement (the
"Administration Agreement") dated February 17, 1993, which
was last approved by the Directors, including a majority of the
Directors who are not "interested persons" of the Fund, at a meeting
held on February 17, 1993.
Under the Administration Agreement, Boston Advisors provides
assistance in all aspects of the Fund's administration
including accounting and bookkeeping services and preparation of
certain reports and filings, and furnishes to Greenwich
Street Advisors statistical and other research data. Boston
Advisors does not make recommendations with regard to the se-
lection of the Fund's investments.
For the services rendered to the Fund, the Fund pays Boston Advisors
a fee computed and paid monthly at an annual
rate of 0.20% of the value of the Fund's average monthly net
assets. For the fiscal year ended February 28, 1994, the Fund
paid administration fees to Boston Advisors amounting to $937,236.
The Administration Agreement provides that in the absence of
willful misfeasance, bad faith, gross negligence or
reckless disregard for its obligations and duties thereunder,
Boston Advisors is not liable for any error of judgment or
mistake of law or for any loss suffered by the Fund.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by
Greenwich Street Advisors, subject to the overall
review of the Fund's Board of Directors.
Portfolio securities transactions for the Fund are placed
on behalf of the Fund by
Greenwich Street Advisors.
Brokerage commissions for transactions on United States and
some foreign stock exchanges involve payment of
negotiated brokerage commissions, which may vary among different
brokers. No stated commission generally applies to
securities traded in the over-the-counter markets, but the price of
those securities includes an undisclosed commission or
mark-up. The cost of securities purchased from underwriters includes
an underwriter's commission or concession, and the
prices at which securities are purchased from and sold to dealers
include a dealer's mark-up or mark-down.
In selecting brokers or dealers to execute portfolio transactions
on behalf of the Fund, Greenwich Street Advisors
seeks the best overall terms available. The Agreement with the Fund
provides that, in assessing the best overall terms
available for any transaction, Greenwich Street Advisors must
consider the factors it deems relevant, including the breadth
of the market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In
addition, the Agreement authorizes Greenwich Street Advisors,
in selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available,
to consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Exchange Act)
provided to the Fund and/or other accounts over which Greenwich
Street Advisors or an affiliate exercises investment discretion.
Greenwich Street Advisor's fee under the Advisory
Agreement is not reduced by reason of its receiving such brokerage
and research services.
The Fund's Board of Directors periodically reviews the commissions
paid by the Fund to determine if the commissions
paid over representative periods of time were reasonable in relation
to the benefits inuring to the Fund. For the fiscal
period ended February 28, 1994, the Fund paid $40,281 in brokerage fees,
of which $0, or 0%, was paid to Smith Barney
Shearson. For the same period, 0% of the Fund's transactions
involving the payment of commissions were effected through
Smith Barney Shearson.
OTHER MATTERS TO COME BEFORE THE MEETING
The Directors do not intend to present any other business at
the Meeting, nor are they aware that any shareholder
intends to do so. If, however, any other matters are
properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with
their judgment.
SHAREHOLDER'S REQUEST FOR SPECIAL MEETING
Shareholders entitled to cast at least 25% of all votes entitled
to be cast at a meeting may require the calling of a
meeting of shareholders for the purpose of voting on the removal
of any Board Member of the Fund. Meetings of shareholders
for any other purpose also shall be called by the Chairman of the
Board, the President or the Secretary of the Fund when
requested in writing by shareholders entitled to cast at
least 25% of all votes entitled to be cast at the Meeting.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals by shareholders of the Fund which are intended
to be presented at the Fund's next Annual Meeting of
Shareholders to be held in 1995 must be received by the Fund
for consideration for inclusion in the Fund's proxy statement
and proxy relating to that meeting no later than December 31, 1994.
May 2, 1994
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED
TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS SOON
AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
EXHIBIT A
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of MUTUAL MANAGEMENT CORP.:
We have audited the accompanying consolidated statement of financial
condition of Mutual Management Corp. (a wholly-
owned subsidiary of Smith Barney Shearson Holdings Inc.) and its
Subsidiary as of December 31, 1993. This consolidated
statement of financial condition is the responsibility of the Company's
management. Our responsibility is to express an
opinion on this consolidated statement of financial condition based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the consolidated statement of financial condition is
free of material misstatement. An audit of a consolidated statement of
financial condition includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
consolidated statement of financial condition. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall consolidated statement of financial condition presentation.
We believe that our audit of the consolidated statement
of financial condition provides a reasonable basis for our opinion.
In our opinion, the consolidated statement of financial condition
referred to above presents fairly, in all material
respects, the financial position of Mutual Management Corp. and its
Subsidiary as of December 31, 1993 in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK
New York, New York March 14, 1994
MUTUAL MANAGEMENT CORP. AND SUBSIDIARY CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
DECEMBER 31, 1993
<TABLE>
<S> <C> <C>
ASSETS
Cash
$ 238
Management fees receivable
13,428,876
Investments in affiliated mutual funds, at market
1,074,258
Furniture and fixtures, net of accumulated depreciation and amortization,
of $142,035
193,356
Investment advisory contracts, net of accumulated amortization, of
$25,422,012
476,513,983
Receivable from affiliate
208,595
Other assets
24,513,330
$515,932,636
LIABILITIES AND STOCKHOLDER'S EQUITY
Note payable to Parent
$412,389,100
Payable to Parent and affiliate
37,487,039
Stockholder's equity:
Common stock ($1 par value)
500
Additional paid-in capital 49,053,121
Retained earnings 16,836,177
Cumulative translation adjustment
166,699
66,056,497
$515,932,636
</TABLE>
See Notes to Consolidated Statement of Financial Condition.
MUTUAL MANAGEMENT CORP. AND SUBSIDIARY NOTES TO CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
(1) Organization -- Mutual Management Corp. ("MMC"), a wholly-owned
subsidiary of Smith Barney Shearson Holdings Inc. ("Parent") (formerly Smith
Barney Holdings, Inc.), is a registered investment adviser and acts pursuant
to management agreements as investment manager to sixty-eight investment
company portfolios and as administrator of The Inefficient-Market Fund, Inc.
MMC provides each company with personnel, investment advice, office space and
administrative services at fees based on the net assets of each fund. The
consolidated statement of financial condition includes the accounts of Smith
Barney Asset Management Corp., a wholly-owned subsidiary of MMC. Significant
intercompany balances have been eliminated in consolidation.
(2) Shearson Acquisition -- On July 31, 1993, Smith Barney, Harris Upham
& Co. Incorporated ("SBHU"), together with certain of its affiliates
(including MMC) and The Travelers Inc. (formerly Primerica Corporation)
acquired the domestic retail brokerage and asset management businesses
("Shearson") of Shearson Lehman Brothers Holdings Inc. and its subsidiaries, a
subsidiary of American Express Company. Shearson was combined with the
operations of SBHU and its affiliates, and SBHU was renamed Smith Barney
Shearson Inc. ("SBS"). The acquisition included the contracts to manage fifty-
four of Shearson's investment company portfolios.
(3) Related Party Transactions -- SBS provides MMC with executive and
administrative services (e.g. accounting, legal, personnel, facilities, mail
and other support services) and other processing support on a basis mutually
agreed upon. Receivable from and payable to affiliate are noninterest bearing.
Investments in affiliated mutual funds represent shares of Smith Barney Money
Funds, Inc., Smith Barney Muni Funds and Smith Barney Tax Free Money Fund,
Inc. Such investments are carried at market value. In 1993, MMC transferred a
deferred tax liability, resulting from the adoption of Statement of Financial
Accounting Standard No. 109 on January 1, 1992, to the Parent pursuant to a
tax sharing agreement. The resulting payable to Parent is non-interest
bearing. Substantially all cash collected by MMC relating to management fees
is remitted to the Parent in the form of dividends.
(4) Income Taxes -- Under an income tax allocation arrangement with the
Parent and The Travelers Inc., MMC's federal, state and local income taxes are
provided for on a separate return basis without regard to timing differences,
and are subject to the utilization of tax attributes in The Travelers Inc.
consolidated income tax provision. Under the tax sharing agreement, MMC remits
taxes to the Parent.
(5) Investment Advisory Contracts -- Investment advisory contracts in-
clude $387,015,720 of value ascribed to the acquired Shearson investment
company advisory contracts purchased by MMC (see note 2). The cost of these
contracts is being amortized over twenty years on a straight-line basis.
In addition, the balance also includes the amortized cost assigned to
certain investment advisory contracts in connection with the acquisition of
the Parent by Commercial Credit Group, Inc. in December 1988. The combined
successor firm subsequently changed its name to Primerica Corporation (now The
Travelers Inc.). The cost of these contracts is being amortized over thirty
years on a straight-line basis.
(Continued)
(6) Note Payable -- At December 31, 1993 note payable to Parent rep-
resents a demand note at a rate of LIBOR plus .75%. The note was issued for
the financing of investment advisory contracts (purchased on July 31, 1993)
(see note 2) and certain deferred expenses originally paid by SBS relating to
closed end funds sponsored by MMC.
On November 1, 1993 MMC paid the third and final installment of a
promissory note to SBS relating to the transferral of the investment advisory
contract for the Vantage Money Market Funds from SBS in October, 1990.
(7) Stockholder's Equity -- Common shares authorized consist of 5,000
shares of Class A (non-voting) and 5,000 shares of Class B (voting). At
December 31, 1993, 449 Class A shares and 51 Class B shares were issued and
outstanding. In connection with the acquisition of Smith Barney Inc. by
Primerica Corporation on June 19, 1987 and the subsequent acquisition of
Primerica Corporation by Commercial Credit Group, Inc. in December 1988, MMC
was recapitalized and its retained earnings on both dates were transferred to
additional paid-in capital.
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
Please indicate your vote by an "X" in the appropriate box below.
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 PROPOSALS 1 and 2. Please refer to the
Prospectus/Proxy Statement for a discussion of the Proposals.
1. To elect James J. Crisona, Paulo M. Cucchi, * FOR all
nominees listed * WITHHOLD
Alessandro C. di Montezemolo, Andrea Farace, (except as
marked to AUTHORITY
Paul Hardin, Heath B. McLendon and George the contrary
below) to vote for all
M. Pavia as Directors of the Fund. nominees)
(Instuctions: To withhold authority to vote for any nominee for
Director, write the appropriate name on the line provided below:)
2. To ratify the selection of Coopers & Lybrand as the FOR *
AGAINST * ABSTAIN *
independent accountants of the Fund for the fiscal year
ending February 28, 1995.
VOTE THIS VOTING INSTRUCTION CARD TODAY!
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(Please Detach at Perforation Before Mailing)
MANAGED HIGH INCOME PORTFOLIO INC. - PROXY SOLICITED BY THE BOARD OF
DIRECTORS
Annual Meeting on June 2, 1994
The undersigned holder of shares of Managed High Income Portfolio
Inc. (the "Fund"), a Maryland corporation, hereby appoints Heath B.
McLendon and Francis J. McNamara, III as attorneys and proxies for
the undersigned, with full powers of substitution and revocation, to
represent the undersigned and to vote on behalf of the undersigned
all shares of the Fund that the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Fund (the "Meeting") to be
held at the offices of the Fund, Two World Trade Center, 100th Floor,
New York, New York on the date indicated above, and any adjournment
or adjournments thereof. The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting and Proxy Statement dated May 2, 1994
and hereby instructs said attorneys and proxies to vote said shares
as indicated hereon. In their discretion, the proxies are authorized
to vote upon such other business as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting
in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority
of said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If
joint owners, EITHER may sign this Proxy. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer,
please give your full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
SHARED\GLOBAL\FUNDAMEN\PROXY\1-94CARD.DOC
