SALOMON BROTHERS WORLDWIDE INCOME FUND INC
DEF 14A, 1998-11-19
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<PAGE>
                           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 Rule 14a-11(c) or Rule 14a-12

                  SALOMON BROTHERS WORLDWIDE INCOME FUND INC
   ------------------------------------------------------------------------
               (Name of Registrant as Specified In Its Charter)


   ------------------------------------------------------------------------
   (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
    Section 22(a)(2) of Schedule 16A

/ / 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:

    (2) Aggregate number of securities to which transaction applies:

    (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):

    (4) Proposed maximum aggregate value of transaction:

    (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 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:


<PAGE>
                   SALOMON BROTHERS WORLDWIDE INCOME FUND INC

                 7 WORLD TRADE CENTER  NEW YORK, NEW YORK 10048
 
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
                                                               November 13, 1998
 
To the Stockholders:
 
     The Annual Meeting of Stockholders (the "Meeting") of Salomon Brothers
Worldwide Income Fund Inc (the "Fund") will be held at 7 World Trade Center, New
York, New York in the Downtown Conference Center, on December 17, 1998, at 10:00
a.m. New York time, for the purposes of considering and voting upon:
 
          1. The election of directors (Proposal 1);
 
          2a. The ratification of the selection of PricewaterhouseCoopers LLP as
     the independent accountants of the Fund for the fiscal year ended
     October 31, 1998 (Proposal 2a);
 
          2b. The ratification of the selection of PricewaterhouseCoopers LLP as
     the independent accountants of the Fund for the fiscal year ending
     October 31, 1999 (Proposal 2b); and
 
          3. Any other business that may properly come before the Meeting.
 
     The close of business on November 10, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting.
 
                                         By Order of the Board of Directors,

                                         Christina T. Sydor
                                         Secretary
 
        TO AVOID UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO
   INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY, DATE AND SIGN IT AND
   RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, NO MATTER HOW LARGE OR HOW
   SMALL YOUR HOLDINGS MAY BE.

<PAGE>
                      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
        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. ..........................  John Doe
                                                    c/o John Doe, Treasurer
          (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
 
          CUSTODIAL OR ESTATE ACCOUNTS
          ----------------------------------------
          (1) John B. Smith, Cust. ...............  John B. Smith
                                                    f/b/o John B. Smith, Jr.
                                                    UGMA
          (2) John B. Smith ......................  John B. Smith, Jr., Executor

<PAGE>
                                SALOMON BROTHERS

                           WORLDWIDE INCOME FUND INC

                 7 WORLD TRADE CENTER, NEW YORK, NEW YORK 10048

                            ------------------------
 
                                PROXY STATEMENT
 
     This proxy statement is furnished in connection with a solicitation by the
Board of Directors of Salomon Brothers Worldwide Income Fund Inc (the "Fund") of
proxies to be used at the Annual Meeting of Stockholders of the Fund to be held
at 7 World Trade Center, New York, New York in the Downtown Conference Center,
on December 17, 1998 at 10:00 a.m., New York time (and at any adjournment or
adjournments thereof) for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders (the "Meeting"). This proxy statement and the
accompanying form of proxy are first being mailed to stockholders on or about
November 13, 1998. Stockholders who execute proxies retain the right to revoke
them in person at the Meeting or by written notice received by the Secretary of
the Fund at any time before they are voted. Unrevoked proxies will be voted in
accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the election of directors and FOR proposals 2(a) and
2(b). The close of business on November 10, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. Each stockholder is entitled to one vote for each full share and an
appropriate fraction of a vote for each fractional share held. On the record
date there were 12,673,199 shares of the Fund's Common Stock outstanding.
 
     In accordance with the Fund's By-Laws, a quorum is constituted by the
presence in person or by proxy of the holders of record of a majority of the
outstanding shares of the Fund's Common Stock entitled to vote at 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 a date not more than 120 days after the original record date to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies which
they are entitled to vote FOR or AGAINST any such proposal in their discretion.
A stockholder vote may be taken on one or more of the proposals in this proxy
statement prior to any such adjournment if sufficient votes have been received
for approval.
 
     Salomon Brothers Asset Management Inc ("SBAM"), whose principal business
address is 7 World Trade Center, New York, New York 10048, is the Fund's
investment adviser and administrator. SBAM is a wholly-owned subsidiary of
Salomon Smith Barney Holdings Inc.
 
                       PROPOSAL 1: ELECTION OF DIRECTORS
 
     In accordance with the Fund's Charter, the Fund's Board of Directors is
divided into three classes: Class I, Class II and Class III. At the Meeting,
stockholders will be asked to elect one Class II Director and one Class I
Director, to hold office until the year 2000 and year 2002 Annual Meeting of
Stockholders, respectively, or thereafter when their respective successors are
duly elected and qualified. The terms of office of the other Class II Director
and the Class III Director expire at the 2000 and year 2001 Annual Meetings of
Stockholders, respectively, or thereafter in each case when their respective
successors are duly elected and qualified. The effect of these staggered terms
is to limit the ability of other entities or persons to acquire control of the
Fund by delaying the replacement of a majority of the Board of Directors.

<PAGE>

     The persons named in the accompanying form of proxy intend to vote at the
Meeting (unless directed not to vote) FOR the election of the nominees named
below. Each of the nominees currently is a member of the Board of Directors of
the Fund and has previously been elected as a director by the Fund's
stockholders, except Heath B. McLendon. Each nominee has indicated that he will
serve if elected, but if any nominee should be unable to serve, the proxy will
be voted for any other person determined by the persons named in the proxy in
accordance with their judgment. Michael S. Hyland and Thomas W. Brock, both
directors during the fiscal year ended October 31, 1998, resigned as Directors
on November 28, 1997 and March 31, 1998, respectively. Mr. Hyland resigned as
President of the Fund on November 28, 1997 as well. The Fund represents that
neither Mr. Hyland nor Mr. Brock resigned as a result of any disagreement with
management in connection with the management of the Fund's affairs.
 
     The following table provides information concerning each nominee for
election as a director:
 
<TABLE>
<CAPTION>
                                                                 COMMON STOCK
                                                              BENEFICIALLY OWNED,
                                                                  DIRECTLY OR
                                                                INDIRECTLY, ON
                                                               OCTOBER 31, 1998
NOMINEES AND PRINCIPAL OCCUPATIONS DURING    DIRECTOR         -------------------
           THE PAST FIVE YEARS                SINCE     AGE        SHARES(A)
- ------------------------------------------   --------   ---   -------------------
<S>                                          <C>        <C>   <C>
NOMINEE TO SERVE UNTIL THE YEAR 2000
ANNUAL MEETING OF STOCKHOLDERS
CLASS II DIRECTOR

Heath B. McLendon*, President; Managing       1998      65            220
     Director, Salomon Smith Barney Inc.,
     President and Director, Mutual
     Management Corp. and Travelers
     Investment Adviser, Inc.; Chairman of
     Smith Barney Strategy Advisors Inc.
     Prior to July 1993, Senior Executive
     Vice President of Shearson Lehman
     Brothers Inc. and Vice Chairman of
     Shearson Asset Management.

NOMINEE TO SERVE UNTIL THE YEAR 2002
ANNUAL MEETING OF STOCKHOLDERS
CLASS I DIRECTORS

Jeswald W. Salacuse, Member of the Audit      1993      61            200
     Committee, Henry J. Braker
     Professor of Commercial Law, and
     formerly Dean, The Fletcher School
     of Law & Diplomacy, Tufts University.
</TABLE>
 
     The following table provides information concerning the remaining directors
of the Fund:
 
<TABLE>
<CAPTION>
                                                                 COMMON STOCK
                                                              BENEFICIALLY OWNED,
                                                                  DIRECTLY OR
                                                                INDIRECTLY, ON
                                                               OCTOBER 31, 1998
DIRECTORS AND PRINCIPAL OCCUPATIONS DURING   DIRECTOR         -------------------
           THE PAST FIVE YEARS                SINCE     AGE        SHARES(A)
- ------------------------------------------   --------   ---   -------------------
<S>                                          <C>        <C>   <C>
DIRECTOR SERVING UNTIL THE YEAR 2000
ANNUAL MEETING OF STOCKHOLDERS
CLASS II DIRECTOR

Charles F. Barber, Member of Audit            1993      81           1,000
     Committee; Consultant; formerly
     Chairman of the Board, ASARCO
     Incorporated.

DIRECTOR SERVING UNTIL THE YEAR 2001
ANNUAL MEETING OF STOCKHOLDERS
CLASS III DIRECTORS

Daniel P. Cronin, Member of Audit             1993      52           1,000
     Committee; Vice President and General
     Counsel, Pfizer International Inc.;
     Senior Assistant General Counsel,
     Pfizer, Inc.

Dr. Riordan Roett, Member of Audit            1995      61             0
     Committee; Professor and Director,
     Latin American Studies Program, Paul
     H. Nitze School of Advanced In-
     ternational Studies, Johns Hopkins
     University.(B)
</TABLE>
 
 
                                              (Footnotes continued on next page)
 
                                       2
<PAGE>

- ------------------
     * "Interested person," as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").

      (A) The holdings of no director represented more than 1% of the
outstanding shares of the Fund. Each director has sole voting and investment
power with respect to the listed shares.

      (B) Dr. Roett also served as a director of the fund from February 1994
through June 1994.

     Each of the nominees and directors also serve as directors of certain other
U.S.-registered investment companies, as described below. Mr. McLendon also
serves as a director for nine other investment companies advised by SBAM, six
investment companies advised by Value Advisors LLC ("Value Advisors") and SBAM,
forty-two investment companies managed and/or administered by Mutual Management
Corp., six investment companies advised by Travelers Investment Management
Company and seven investment companies managed by Travelers Asset Management
International Corporation. Mr. Barber also serves as a director of fifteen other
investment companies advised by SBAM and its affiliates, six other investment
companies advised by SBAM and Value Advisors, two other investment companies
advised by Advantage Advisors, Inc. and two other investment companies advised
by CIBC Wood Gundy Securities Corp. ("CIBC"). Mr. Cronin also serves as a
director of six other investment companies advised by SBAM. Dr. Roett also
serves as a director of three other investment companies advised by SBAM and six
other investment companies advised by SBAM and Value Advisors. Mr. Salacuse is a
director of three other investment companies advised by SBAM and four other
investment company advised by Value Advisors and Op Cap Advisors and two other
investment companies advised by CIBC.
 
     At October 31, 1998, directors and officers of the Fund, as a group, owned
beneficially less than 1% of the outstanding shares of the Fund. No person owned
of record, or to the knowledge of management, owned beneficially more than 5% of
the Fund's outstanding shares at that date, except that Cede & Co., a nominee
for participants in Depository Trust Company, held of record 11,534,200 shares,
equal to approximately 91% of the outstanding shares of the Fund.
 
     The executive officers of the Fund are chosen each year at the first
meeting of the Board of Directors of the Fund following the Annual Meeting of
Stockholders, to hold office until the meeting of the Board following the next
Annual Meeting of Stockholders and until their successors are chosen and
qualified. In addition to Mr. McLendan, the present executive officers of the
Fund are:
 
<TABLE>
<CAPTION>
                                                               OFFICER
           NAME                        OFFICE                  SINCE          AGE
- ---------------------------  ---------------------------       -------        ----
<S>                          <C>                               <C>            <C>
Peter J. Wilby               Executive Vice President           1993           38
Thomas K. Flanagan           Executive Vice President           1994           43
James E. Craige              Executive Vice President           1996           30
Beth A. Semmel               Executive Vice President           1996           37
Maureen O'Callaghan          Executive Vice President           1996           33
Lewis E. Daidone             Executive Vice President           1998           40
                               and Treasurer
Christina T. Sydor           Secretary                          1998           46
</TABLE>
 
     Mr. Wilby has also been a Managing Director of SBAM and Salomon Smith
Barney Inc ("Salomon Smith Barney") since January 1996. Prior to January 1996,
he was a Director of SBAM and Salomon Smith Barney. Mr. Flanagan has also been a
Director of SBAM and Salomon Smith Barney since July 1991. Mr. Craige has also
been a Director of SBAM and Salomon Smith Barney since January 1998 and a Vice
President of SBAM and Salomon Smith Barney from May 1992 to December 1997.
Ms. Semmel has also been a Director of SBAM

                                       3
<PAGE>

and Salomon Smith Barney since January 1996. From May 1993 to January 1996 she
was a Vice President of SBAM and Salomon Smith Barney. From January 1989 to May
1993, Ms. Semmel was a Vice President at Morgan Stanley Asset Management. Ms.
O'Callaghan has also been a Vice President with SBAM and Salomon Smith Barney
since October 1988. Mr. Daidone and Ms. Sydor serve as Managing Directors of
Salomon Smith Barney. Mr. Daidone is Director and Senior Vice President of
Mutual Management Corp. and Travelers Investment Adviser, Inc. and Ms. Sydor is
General Counsel of Mutual Management Corp.
 
     The Fund's Audit Committee is composed of Messrs. Barber, Cronin, Roett and
Salacuse. The principal functions of the Audit Committee are: (i) to recommend
to the Board the appointment of the Fund's independent accountants; (ii) to
review with the independent accountants the scope and anticipated cost of their
audit; and (iii) to receive and consider a report from the independent
accountants concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. This Committee met
once during the fiscal year ended October 31, 1998. The Fund has no nominating
or compensation committees.
 
     During the fiscal year ended October 31, 1998, the Board of Directors met
four times. Each director attended at least 75% of the aggregate number of
meetings of the Board and the committee for which he was eligible.
 
     Under the federal securities laws, the Fund is required to provide to
stockholders in connection with the Meeting information regarding compensation
paid to the directors by the Fund, as well as by the various other investment
companies advised by SBAM. The following table provides information concerning
the compensation paid to each director during the fiscal year ended October 31,
1998. Each of the directors listed below are members of the Audit Committee of
the Fund and audit and other committees of certain other investment companies
advised by SBAM, and, accordingly, the amounts provided in the table include
compensation for service on such committees. Please note that the Fund does not
provide any pension or retirement benefits to directors. In addition, no
remuneration was paid during the fiscal year ended October 31, 1998 by the Fund
to Mr. McLendon, who is an "interested person," as defined under the 1940 Act.
 
<TABLE>
<CAPTION>
                                                  AGGREGATE       TOTAL COMPENSATION
                                                  COMPENSATION    FROM OTHER FUNDS
NAME OF DIRECTORS                                 FROM THE FUND   ADVISED BY SBAM      TOTAL COMPENSATION
- ------------------------------------------------  -------------   ------------------   ------------------
                                                                   DIRECTORSHIPS(A)     DIRECTORSHIPS(A)
<S>                                               <C>             <C>                  <C>
Charles F. Barber...............................     $ 7,900           $214,777(21)*        $222,677(22)*
Daniel P. Cronin................................     $ 7,200           $ 47,665 (6)         $ 54,865 (7)
Dr. Riordan Roett...............................     $ 7,900           $ 74,498 (9)         $ 82,398(10)
Jeswald W. Salacuse.............................     $ 7,900           $ 54,698 (7)         $ 62,598 (8)
</TABLE>
 
- ------------------
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
 
* Includes $11,000 in deferred compensation from six investment companies
  advised by an affiliate of SBAM.
 
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) of
the 1940 Act in combination require the Fund's directors and officers, persons
who own more than 10% of the Fund's Common Stock, SBAM, and SBAM's directors and
officers, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange, Inc. The
Fund believes that all relevant persons have complied with applicable filing
requirements.
 
                                       4
<PAGE>

REQUIRED VOTE
 
     Directors are elected by a plurality of the votes cast by the holders of
shares of the Fund's Common Stock present in person or represented by proxy at a
meeting with a quorum present. For purposes of the election of directors,
abstentions and broker non-votes will not be considered votes cast, and do not
affect the plurality vote required for directors.
 
     THE DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED PERSONS,"
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" EACH OF THE NOMINEES FOR
DIRECTOR.
 
PROPOSAL 2(A) RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS FOR THE
              FISCAL YEAR ENDED OCTOBER 31, 1998

         2(B) RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS FOR THE
              FISCAL YEAR ENDING OCTOBER 31, 1999
 
     At meetings of the Board of Directors held on January 21, 1998 and November
3, 1998, the Board of Directors of the Fund selected PricewaterhouseCoopers LLP
as the Fund's independent accountants for the fiscal year ending October 31,
1998 and for the fiscal year ending October 31, 1999 respectively. The Fund has
been advised by PricewaterhouseCoopers LLP that at October 31, 1998 neither that
firm nor any of its partners had any direct or material indirect financial
interest in the Fund. A representative of PricewaterhouseCoopers LLP will be
present at the Meeting to answer questions concerning the audit of the Fund's
financial statements and will have an opportunity to make a statement if he
chooses to do so.
 
REQUIRED VOTE
 
     Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's
independent accountants for the fiscal year ended October 31, 1998 and for the
fiscal year ending October 31, 1999 requires the affirmative vote of the holders
of a majority of the shares of the Fund's Common Stock present in person or
represented by proxy at a meeting with a quorum present. For purposes of these
proposals, abstentions and broker non-votes will not be considered to be votes
cast for the foregoing purpose.
 
     THE DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED PERSONS,"
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998
AND FOR THE FISCAL YEAR ENDING OCTOBER 31, 1999.
 
                   PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS
 
     All proposals by stockholders of the Fund which are intended to be
presented at the Fund's next Annual Meeting of Stockholders to be held in 2000
must be received by the Fund for inclusion in the Fund's proxy statement and
proxy relating to that meeting no later than July 16, 1999. Any stockholder who
desires to bring a proposal at the Fund's 2000 Annual Meeting of Stockholders
without including such proposal in the Fund's proxy statement must deliver
written notice thereof to the Secretary of the Fund (addressed to Salomon
Brothers Worldwide Income Fund Inc, 7 World Trade Center, New York, New York
10048) during the thirty-day period from September 18, 1999 to October 18, 1999.
 
                               OTHER INFORMATION
 
     The Fund's Annual Report containing financial statements for the fiscal
year ended October 31, 1998 will be available, free of charge, by writing to the
Fund c/o Salomon Brothers Asset Management Inc at the address listed on the
front cover of this Proxy Statement, or by calling toll-free 1-888-777-0102.
 
 
                                       5
<PAGE>

                         EXPENSES OF PROXY SOLICITATION
 
     The costs of preparing, assembling and mailing material in connection with
this solicitation of proxies will be borne by the Fund. Proxies may also be
solicited personally by officers of the Fund and by regular employees of SBAM,
or its affiliates, or other representatives of the Fund or by telephone or
telegraph, in addition to the use of mails. Brokerage houses, banks and other
fiduciaries may be requested to forward proxy solicitation material to their
principals to obtain authorization for the execution of proxies, and they will
be reimbursed by the Fund for such out-of-pocket expenses.
 
                                 OTHER BUSINESS
 
     The Board of Directors of the Fund does not know of any other matter which
may come before the Meeting. If any other matter properly comes before the
Meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter.
 
November 13, 1998
 
                                       6

<PAGE>
                  SALOMON BROTHERS WORLDWIDE INCOME FUND INC

                  PROXY SOLICITED ON BEHALF OF THE DIRECTORS

          The undersigned hereby appoints Heath B. McLendon, Lewis E. Daidone
and Robert A. Vegliante, and each of them, attorneys and proxies for the
undersigned, with full power of substitution and revocation to represent the
undersigned and to vote on behalf of the undersigned all shares of Salomon
Brothers Worldwide Income Fund Inc (the "Fund") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Fund to be held at
7 World Trade Center, New York, New York in the Downtown Conference Center, on
Thursday, December 17, 1998 at 10:00 a.m., and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement 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.

This proxy, if properly executed, will be voted in the manner directed by the
stockholder. If no direction is made, this proxy will be voted FOR the election
of the nominees as directors and FOR proposal 2a and FOR proposal 2b.

Please refer to the Proxy Statement for a discussion of the Proposals.

                         (continued on reverse side)

<PAGE>

               Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------

A     | X |    Please mark your votes as in this example.

1.   ELECTION OF DIRECTORS

     FOR ALL Nominees listed at right                WITHHOLD authority to
           (except as marked to                      vote for all nominees
            the contrary below)                         listed at right

                |   |                                        |   |

     (INSTRUCTION: To withhold the authority to vote for any individual
     nominee(s) write the name of the nominee(s) on the line below.)


     ----------------------------------

     Nominees:    Heath B. McLendon

                  Jeswald W. Salacuse


2a.  The ratification of the selection of PricewaterhouseCoopers LLP as the
     independent accountants of the Fund for the fiscal year ending
     October 31, 1998.

                        FOR            AGAINST        ABSTAIN

                       |   |            |   |          |   |


2b.  The ratification of the selection of PricewaterhouseCoopers LLP as the
     independent accountants of the Fund for the fiscal year ending
     October 31, 1999.

                        FOR            AGAINST        ABSTAIN

                       |   |            |   |          |   |


3.   Any other business that may properly come before the meeting.


4.   I will be attending the meeting.


Please Complete, Sign and Date hereon and Mail in Accompanying Postpaid
Envelope.

                   I will be attending the meeting.   |   |


SIGNATURE____________________ DATE_____ SIGNATURE____________________ DATE_____ 

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.



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