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
High Income Opportunity Fund Inc.
(Name of Registrant as Specified in its Charter)
Marc Schuman
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[X] No longer applicable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.
<PAGE>
HIGH INCOME OPPORTUNITY FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------
TO BE HELD ON FEBRUARY 27, 1998
----------------------------------
To the Stockholders of High Income Opportunity Fund Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of HIGH
INCOME OPPORTUNITY FUND INC. (the "Fund") will be held at the Fund's offices
at 388 Greenwich Street, New York, New York, 22nd Floor, on February 27, 1998
at 9:00 A.M. (New York Time) for the following purposes:
1. To elect two Class III directors of the Fund;
2. To consider and act upon the ratification of the selection of KPMG Peat
Marwick LLP as independent auditors of the Fund for the fiscal year
ended September 30, 1998; and
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 January 12, 1998
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
Christina T. Sydor
Secretary
New York, New York
January 23, 1998
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.
<PAGE>
HIGH INCOME OPPORTUNITY FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(800) 451-2010
----------------------------------
PROXY STATEMENT
----------------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 27, 1998
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of the High Income Opportunity 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 Fund's principal executive offices at
388 Greenwich Street, 22nd Floor, New York, New York 10013, on February 27,
1998 at 9:00 A.M. (New York Time), and at any adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
The cost of soliciting proxies will be borne by the Fund. Proxy
solicitations will be made mainly by mail. In addition, certain officers,
directors and employees of the Fund; Mutual Management Corp. ("MMC" or the
"Manager"), the Fund's investment manager; Smith Barney Inc. ("Smith Barney"),
an affiliate of SBMFM; and/or First Data Investor Services Group, Inc. ("First
Data"), the Fund's transfer agent, may solicit proxies in person or by
telephone, telegraph, or mail. Smith Barney and SBMFM are each located at 388
Greenwich Street, New York, New York 10013; First Data is located at 53 State
Street, Boston, Massachusetts 02109.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended September 30, 1997, has previously been furnished to all
shareholders of the Fund. This proxy statement and form of proxy are first
being mailed to shareholders on or about January 23, 1998. The Fund will
provide additional copies of the annual report to any shareholder upon request
by calling the Fund at (800) 451-2010.
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" all the proposals. For purposes
of determining the presence of a quorum for transacting business at the
Meeting, abstentions and
1
<PAGE>
broker "non-votes" (i.e. 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 no impact on the requisite
approval of a proposal. Proposal 1 requires for approval the affirmative vote
of a plurality of the votes cast at the Meeting with a quorum present, 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 with a quorum present, in person or by proxy by the
shareholders of the Fund voting on the matter. Any proxy may be revoked at any
time prior to the exercise thereof by submitting another proxy bearing a later
date or 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 of Meeting that will 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.
The Board of Directors of the Fund has fixed the close of business on
January 12, 1998 as the record date ("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. As of the
Record Date, the Fund had outstanding 71,616,565.375 shares of Common Stock,
par value $.001 per share, the only authorized class of stock, of which
70,039,993.906 (or 97.78%) were held, but not beneficially owned, by Cede &
Co., P.O. Box 20, Bowling Green Station, New York, New York 10004. As of the
Record Date, no other person (including any "group" as the term is used in
Section 13(d) of the Exchange Act of 1934) to the knowledge of the Board of
Directors of the Fund, owned beneficially more than 5% of the outstanding
shares of the Fund. As of the Record Date, the officers and Board members of
the Fund beneficially owned less than 1% of the outstanding shares of the
Fund.
In the event that sufficient votes in favor of the proposals set forth in
the Notice of Meeting and this Proxy Statement are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of proxies
with respect to any such proposals. 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
2
<PAGE>
provided to shareholders 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.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Fund is classified into three classes. 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 Directors for re-election at the Meeting to serve until the 2001 Annual
Meeting of Stockholders or until their successors have been duly elected and
qualified.
The Board of Directors of the Fund knows of no reason why any of the 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 of Directors may recommend.
Certain information concerning the nominees is set forth below. For any
nominee or director as indicated owning shares of the Fund, such ownership
constituted less than 1% of the outstanding shares as of the Record Date. All
of the nominees are currently directors of the Fund and have served in such
capacity since the Fund commenced operations. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Directors affiliated with the Manager and considered an
"interested person" of the Fund as defined in the Investment Company Act of
1940, as amended (the "1940 Act") are indicated by an asterisk(*).
PERSONS NOMINATED FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
DURING PAST FIVE YEARS, NUMBER OF
OTHER DIRECTORSHIPS, AND SHARES AS OF
NAME AGE JANUARY 12, 1998
---- ------------------------ ----------------
<C> <S> <C>
Donald R. Foley Retired; Director of ten 7,921.8920(a)
Director since 1993(III) investment companies asso-
ciated with Smith Barney.
Formerly Vice President of
Edwin Bird Wilson, Incorpo-
rated (advertising); 75.
Paul Hardin Professor of Law at the 956.2057(a)
Director since 1994(III) University of North Caro-
lina at Chapel Hill; Direc-
tor of twelve investment
companies
</TABLE>
(a) Includes shares owned by members of this director's family.
3
<PAGE>
PERSONS NOMINATED FOR ELECTION AS DIRECTORS (CONT'D)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
DURING PAST FIVE YEARS, NUMBER OF SHARES
OTHER DIRECTORSHIPS, AND AS OF JANUARY
NAME AGE 12, 1998
---- ------------------------ ----------------
<C> <S> <C>
associated with Smith Bar-
ney and a Director of The
Summit Bancorporation. For-
merly, Chancellor of the
University of North Caro-
lina at Chapel Hill; 66.
The remainder of the Board constitutes Class II directors, none of whom will
stand for election at the Meeting, as their terms will expire in the year 2000.
DIRECTORS CONTINUING IN OFFICE
<CAPTION>
PRINCIPAL OCCUPATIONS
DURING PAST FIVE YEARS, NUMBER OF SHARES
OTHER DIRECTORSHIPS, AND AS OF JANUARY
NAME AGE 12, 1998
---- ------------------------ ----------------
<C> <S> <C>
John P. Toolan Retired; Director of ten None
Director since 1993 investment companies asso-
ciated with Smith Barney;
Director of John Hancock
Funds. Formerly Director
and Chairman of the Smith
Barney Trust Company, Di-
rector of Smith Barney Inc.
and the Manager. Prior to
1992, Senior Executive Vice
President, Director and
Member of the Executive
Committee of Smith Barney;
67.
Heath B. McLendon* Managing Director of Smith 150.5565
Director since 1993 Barney; Director of forty-
two investment companies
associated with Smith Bar-
ney; Chairman of the Board
of Smith Barney Strategy
Advisers Inc. and President
of SBMFM and Travelers In-
vestment Adviser, Inc.
("TIA"). Prior to July
1993, Senior Executive Vice
President of Shearson Leh-
man Brothers Inc.; Vice
Chairman of Shearson Asset
Management; 64.
Roderick C. Rasmussen Investment Counselor; Di- 109.6652
Director since 1993 rector of ten investment
companies associated with
Smith Barney. Formerly Vice
President of Dresdner and
Company Inc. (investment
counselors); 71.
</TABLE>
4
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(f) of
the 1940 Act each requires the Fund's officers and directors, persons who
beneficially own more than ten percent of a registered class of the Fund's
equity securities, and certain entities to file reports of ownership with the
Securities and Exchange Commission, the New York Stock Exchange and the Fund.
Based solely upon its review of the copies of such forms received by it, the
Fund believes that, during fiscal year 1997, all filing requirements
applicable to such persons were complied with.
The Fund has no compensation or nominating committee of the Board of
Directors, or any committee performing similar functions. The Fund has an
audit committee composed of all the directors who are not interested persons
of the Fund or the Manager (the "independent directors"), which is charged with
recommending a firm of independent auditors to the Fund and reviewing
accounting matters with the auditors.
Seven meetings of the Board of Directors of the Fund were held during the
last fiscal year, five of which were regular meetings. The audit committee
held four meetings during the same period. In the last fiscal year no director
attended less than 75% of these meetings of the Board that were held.
Only the independent directors receive remuneration from the Fund for acting
as a director. Aggregate fees (including reimbursement for travel and out-of-
pocket expenses) of $21,187 were paid to such directors by the Fund for the
fiscal year ended September 30, 1997. Fees for the independent directors, who
are directors of a group of funds sponsored by Smith Barney, are set at
$42,000 per annum and are allocated based on relative net assets of each fund
in the group. In addition, these Directors receive $100 per fund or portfolio
for each Board meeting attended plus travel and out-of-pocket expenses
incurred in connection with Board meetings. The Board meeting fees and the
out-of-pocket expenses are borne equally by each individual fund or portfolio
in the group. 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 the Manager or by Smith Barney.
5
<PAGE>
The following table shows the compensation paid by the Fund to each director
during the Fund's last fiscal year and by the Smith Barney Mutual Fund complex
during the calendar year ended December 31, 1997.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION NUMBER OF
RETIREMENT FROM FUND FUNDS FOR
AGGREGATE BENEFITS ACCRUED AND FUND WHICH DIRECTOR
COMPENSATION AS PART OF COMPLEX SERVES WITHIN
NAME OF PERSON FROM FUND FUND EXPENSES PAID TO DIRECTORS FUND COMPLEX
- -------------- ------------ ---------------- ----------------- --------------
<S> <C> <C> <C> <C>
Joseph H. Fleiss+++ $ 986 $ 0 $33,900 10
Donald R. Foley+ 986 0 34,400 10
Paul Hardin 1,372 0 73,000 12
Heath B. McLendon* 0 0 0 41
Roderick C. Rasmussen 1,372 0 55,400 10
John P. Toolan+ 1,372 0 55,400 10
C. Richard Youngdahl++ 835 0 26,100 10
</TABLE>
- -----------
* Designates a director who is an "interested person".
+ Pursuant to the Fund's deferred compensation plan, the indicated persons
have elected to defer the following payment of some or all of their
compensation: Joseph H. Fleiss: $493, Donald R. Foley: $493, and John P.
Toolan; $1,372.
++ Effective January 1, 1997, Mr. Youngdahl, and effective
January 1, 1998, Mr. Fleiss, became Directors Emeritus. 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. 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.
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:
<TABLE>
<CAPTION>
OFFICES AND POSITIONS PERIOD PRINCIPAL OCCUPATIONS DURING
NAME HELD WITH FUND OFFICES HELD PAST FIVE YEARS AND AGE
- ---- --------------------- ------------ ----------------------------
<S> <C> <C> <C>
Heath B. Chairman, Chief 1995 to (see table of di-
McLendon Executive date rectors above)
Officer and
President
Lewis E. Senior Vice 1993 to Managing Director
Daidone President and date of Smith Barney;
Treasurer Senior Vice Presi-
dent and Treasurer
of forty-two in-
vestment companies
associated with
Smith Barney; Di-
rector and Senior
Vice President of
SBMFM and TIA; 40.
John C. Vice President 1993 to Managing Director
Bianchi date of Smith Barney and
investment officer
of other investment
companies associ-
ated with Smith
Barney; 42.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
OFFICES AND POSITIONS PERIOD PRINCIPAL OCCUPATIONS DURING
NAME HELD WITH FUND OFFICES HELD PAST FIVE YEARS AND AGE
- ---- --------------------- ------------ ----------------------------
<S> <C> <C> <C>
Christina T. Secretary 1993 to Managing Director
Sydor date of Smith Barney;
Secretary of forty-
two investment com-
panies associated
with Smith Barney;
Secretary and Gen-
eral Counsel of
SBMFM and TIA; 46.
Thomas M. Controller and 1993 to Director of Smith
Reynolds Assistant date Barney and Control-
Secretary ler and Assistant
Secretary of cer-
tain other invest-
ment companies as-
sociated with Smith
Barney; 38.
</TABLE>
The Board of Directors, including all of the independent directors,
recommends that you vote "FOR" the election of all nominees to the Board.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG") has been selected as the independent auditors
to audit the accounts of the Fund for and during the fiscal year ending
September 30, 1998 by a majority of the independent directors, which is
subject to ratification by the stockholders at the Meeting. The entire Board
concurred in the selection of KPMG. KPMG also serves as the independent
auditors for the Manager, other investment companies associated with Smith
Barney and for Travelers Group Inc. ("Travelers"). KPMG has no direct or
material indirect financial interest in the Fund, the Manager, Travelers or
any other investment company sponsored by Smith Barney or its affiliates.
If the Fund receives a written request from any stockholder at least five
days prior to the Meeting stating that the stockholder 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 a
representative of KPMG present at the Meeting who will respond to appropriate
questions and have an opportunity to make a statement.
The affirmative vote a majority of votes cast at the Meeting is required to
ratify the selection of KPMG.
The Board of Directors, including all of the independent directors,
recommends that the stockholders vote "FOR" the ratification of the selection
of independent auditors.
7
<PAGE>
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1999 Annual Meeting of
the Stockholders of the Fund must be received by September 14, 1998 to be
included in the proxy statement and the form of proxy relating to that meeting
as the Fund expects that the 1999 Annual Meeting will be held in late February
of 1999.
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.
All proxies received will be voted in favor of all the proposals, unless
otherwise directed therein.
By Order of the Board of Directors
Christina T. Sydor
Secretary
January 23, 1998
8
PROXY
HIGH INCOME OPPORTUNITY 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 MARC A. SCHUMAN, 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 12, 1998 at a Meeting of Shareholders to be held
on February 27, 1998 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: Donald Foley and Paul
Hardin
_______________________________
For both nominees except as noted above
2. PROPOSAL TO RATIFY THE FOR AGAINST ABSTAIN
SELECTION OF KPMG PEAT
MARWICK LLP AS THE INDE-
PENDENT AUDITORS OF THE
FUND FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 1998.
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 Presidentor other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
Signature: ____________________________ Date: ________________
Signature: ____________________________ Date: ________________
