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)
Gordon Swartz
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[X] No longer applicable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.
HIGH INCOME OPPORTUNITY FUND INC.
Seven World Trade Center
New York, New York 10048
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------
To be Held on February 21, 2001
----------------------
To the Stockholders of High Income Opportunity Fund Inc.:
The Annual Meeting of Stockholders of High Income Opportunity Fund Inc. (the
"Fund") will be held at the Fund's offices at Seven World Trade Center, New
York, New York, Downtown Conference Center, Mezzanine Level, on February 21,
2001 at 9:30 A.M. (New York Time) for the following purposes:
1. To elect three Class III directors, each to hold office for the term
indicated and until his or her successor shall have been elected and
qualified;
2. 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 3, 2001 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 22, 2001
----------------------
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.
HIGH INCOME OPPORTUNITY FUND INC.
Seven World Trade Center,
New York, New York 10048
----------------------
PROXY STATEMENT
----------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 21, 2001
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
Seven World Trade Center, Downtown Conference Center, Mezzanine Level, New
York, New York 10048, on February 21, 2001 at 9:30 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 "Notice").
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; Salomon Smith Barney Inc. ("Salomon Smith
Barney"), which makes a market in the Fund's shares; SSB Citi Fund Management
LLC ("SSB Citi" or the "Manager"), the Fund's investment manager; and/or PFPC
Global Fund Services (PFPC), the Fund's transfer agent, may solicit proxies in
person or by telephone, telegraph, or mail. Salomon Smith Barney and SSB Citi
are each located at Seven World Trade Center, New York, New York 10048; PFPC
is located at P.O. Box 8030, Boston, Massachusetts 02266.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended September 30, 2000, has previously been furnished to all
stockholders of the Fund. This proxy statement and form of proxy are first
being mailed to stockholders on or about January 22, 2001. The Fund will
provide, without charge, additional copies of the Annual Report to any
stockholder upon request by calling the Fund at 1-800-331-1710.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein. Unless instructions to the contrary are marked, shares
represented by the proxies will be voted "FOR" all the proposals. For purposes
of determining the presence of a quorum for transacting business at the
Meeting, abstentions and
broker "non-votes" (i.e. proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which
the brokers or nominees do not have discretionary power) will be treated as
shares that are present but which have not been voted. Because the requisite
approval of the proposal is measured by a portion of the votes actually cast,
abstentions and broker "non-votes" will have no impact on the approval of a
proposal. Proposal 1 requires for approval the affirmative vote of a majority
of the votes cast at the Meeting with a quorum present. Any proxy may be
revoked at any time prior to the exercise thereof by submitting another proxy
bearing a later date, by giving written notice to the Secretary of the Fund at
the Fund's address indicated above, or by voting in person at the Meeting.
The Board knows of no business other than that specifically mentioned in the
Notice to be presented for consideration at the Meeting. If any other matters
are properly presented, it is the intention of the persons named in the
enclosed proxy to vote in accordance with their best judgment to the extent
permissible under applicable law.
The Board of Directors of the Fund has fixed the close of business on
January 3, 2001 as the record date (the "Record Date") for the determination
of stockholders of the Fund entitled to notice of and to vote at the Meeting
or any adjournment thereof. Stockholders of the Fund on that date will be
entitled to one vote on each matter for each share held, and a fractional vote
with respect to fractional shares, with no cumulative voting rights. At the
Record Date, the Fund had outstanding 69,227,244.009 shares of Common Stock,
par value $.001 per share, the only authorized class of stock, of which
67,882,606.000 or 98.06% were held in accounts, but not beneficially owned, by
CEDE & Co., as nominee for The Depository Trust Company, Box 20, Bowling Green
Station, New York, New York 10004-9998. At the Record Date, no single
shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934) to the knowledge of the Board or 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 in the aggregate
beneficially owned less than 1% of the outstanding shares of the Fund.
In the event that a quorum is not present, or if sufficient votes in favor
of the proposal set forth in the Notice and this Proxy Statement are not
received by the time scheduled for the Meeting, the persons named as proxies
may move for one or more adjournments of the Meeting to permit further
solicitation of proxies with respect to such proposal. In determining whether
to adjourn the Meeting, the following factors may be considered: the nature of
the proposal that is 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
provided to stockholders with respect to the reasons for the solicitation. Any
such adjournment will require the affirmative vote of a majority of the shares
present at the Meeting. The persons named as proxies will vote in favor of
such adjournment those shares which they are entitled to vote and which have
voted in favor of such proposal.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Fund is currently 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
for a term of three years (until the 2004 Annual Meeting of Stockholders) or
until their successors have been duly elected and qualified. The affirmative
vote of a majority of the votes cast at the Meeting at which a quorum is
present is sufficient to elect each nominee. It is the intention of the
persons named in the enclosed proxy to vote in favor of the election of the
persons listed below as nominees.
The Board knows of no reason why any of the Class III nominees listed below
will be unable to serve, but in the event of any such unavailability, the
proxies received will be voted for such substitute nominees as the Board may
recommend.
Certain information concerning the nominees is set forth below. All of the
nominees for Class III currently serve as Directors of the Fund. Any director
affiliated with the Manager or otherwise considered an "interested person" of
the Fund, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act") is indicated by an asterisk(*). Information as to beneficial
ownership is based upon information furnished to the Fund by Directors.
Persons Nominated for Election as Directors
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 3, 2001
---- ---------------------------- ------------------
CLASS III DIRECTORS
Jane F. Dasher Investment Officer of Korsant 600.000
Director since 1999 Partners, a family investment (less than 1%)
company; Director/Trustee of 12
investment companies associated with
Citigroup, Inc. ("Citigroup"). Prior
to 1997, an independent Financial
Consultant; age 51.
Donald R. Foley Retired; Director/Trustee of 12 11,984.228**
Director since 1993 investment companies associated with (less than 1%)
Citigroup. Formerly Vice President
of Edwin Bird Wilson, Incorporated
(advertising); 78.
3
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 3, 2001
---- ---------------------------- ------------------
Paul Hardin Professor of Law at the University 3,847.600**
Director since 1994 of North Carolina at Chapel Hill; (less than 1%)
Director/Trustee of 14 investment
companies associated with
Citigroup; Director of The Summit
Bancorporation. Formerly,
Chancellor of the University of
North Carolina at Chapel Hill; 69.
The remainder of the Board currently constitutes the Class I and the Class
II directors, none of whom will stand for election at the Meeting, as their
terms are not due to expire until the year 2002 and 2003, respectively.
Directors Continuing in Office
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 3, 2001
---- ---------------------------- ------------------
CLASS I DIRECTORS
Lee Abraham Retired; Director/Trustee of 12 None
Director since 1999 investment companies associated
with Citigroup. Director of R.G.
Barry Corp., a footwear
manufacturer and Signet Group plc,
a specialty retailer and
eNote.com, Inc., a computer
hardware company. Formerly
Chairman and Chief Executive
Officer of Associated
Merchandising Corporation, a major
retail merchandising and sourcing
organization and formerly Director
of Galey & Lord and Liz Claiborne;
age 73.
Allan J. Bloostein President of Allan J. Bloostein None
Director since 1999 Associates, a consulting firm;
Director/Trustee of 19 investment
companies associated with
Citigroup; Director of CVS
Corporation, a drugstore chain,
and Taubman Centers Inc., a real
estate development company.
Retired Vice Chairman and Director
of The May Department Stores
Company; age 71.
Richard E. Hanson, Jr. Retired; Formerly Head of The New None
Director since 1999 Atlanta Jewish Community High
School, Atlanta, Georgia;
Director/Trustee of 12 investment
companies associated with
Citigroup. Formerly Headmaster,
The Peck School, Morristown, New
Jersey; age 59.
CLASS II DIRECTORS
Heath B. McLendon* Managing Director of Salomon Smith 204.535
Director since 1993 Barney; Chairman, Co-Chairman, (less than 1%)
President and/or Trustee/Director
of 77 investment companies
associated with Citigroup;
Director and President of SSB Citi
and Travelers Investment Adviser,
Inc. ("TIA"); 67.
Roderick C. Rasmussen Investment Counselor; 148.983
Director since 1993 Director/Trustee of 12 investment (less than 1%)
companies associated with
Citigroup. Formerly Vice President
of Dresdner and Company Inc.
(investment counselors); 74.
4
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 3, 2001
---- ---------------------------- ------------------
John P. Toolan Retired; Director/Trustee of 12 None
Director since 1993 investment companies associated with
Citigroup; Trustee of John Hancock
Funds. Formerly Director and
Chairman of the Smith Barney Trust
Company, Director of Smith Barney
Holdings Inc. and various
subsidiaries, formerly Senior
Executive Vice President, Director
and Member of the Executive
Committee of Smith Barney; 70.
- -----------
* Designates a Director who is affiliated with the Manager and considered an
"interested person" of the Fund as defined under the 1940 Act.
** Represents shares owned by this Director and members of his family.
Beneficial Ownership Report
Section 16(a) of the Securities Exchange Act of 1934 requires the Fund's
officers and directors, and persons who beneficially own more than ten percent
of a registered class of the Fund's equity securities, to file reports of
ownership with the Securities and Exchange Commission, the New York Stock
Exchange (the "NYSE") and the Fund. Based solely upon its review of the copies
of such forms received by it and representations from such persons, the Fund
believes that, during fiscal year 2000, all filing requirements applicable to
such persons were satisfied.
Committees of the Board of Directors
The Fund has no compensation committee of the Board of Directors or any
committee performing similar functions. The fund has an administrative and
governance committee composed of Lee Abraham, Donald R. Foley, Richard E.
Hanson, Jr. and Paul Hardin which acts as a nominating committee of the Board
of Directors. The Fund has an audit and investment performance committee
comprised solely of members who are independent as defined in the NYSE's
Listed Company Manual. The audit committee is charged with recommending a firm
of independent auditors to the Board of Directors and reviewing the Fund's
accounting matters as set forth in the committee's charter, which is attached
hereto as Appendix A. The directors of these respective committees are not
"interested persons" of the Fund as defined under the 1940 Act (the
"independent directors").
Six meetings of the Board were held between October 1, 1999 and September
30, 2000, four of which were regular meetings. Four administrative and
governance committee meetings were held. Two Audit Committee meetings were
also held. There were no nominating committee meetings held. Allan Bloostein
attended less than 75% of these meetings.
Only the independent directors receive remuneration from the Fund for acting
as a director. Aggregate fees and expenses (including reimbursement for travel
and out-of-pocket expenses) of $13,469 were paid to such directors by the Fund
during
5
the calendar year ended December 31, 1999. Fees for the independent directors,
who also serve as board members of certain other funds sponsored by or
affiliated with Salomon Smith Barney, are currently set at $60,000 per annum
plus a per meeting fee of $2,500 with respect to in-person meetings and $100
for each telephone meeting. 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 Salomon Smith Barney.
COMPENSATION
The following table shows the compensation paid by the Fund to each person
who was a Director during the Fund's fiscal year ended September 30, 2000 and
calendar year ended December 31, 1999.
Compensation Table
Aggregate Compensation from
Compensation Fund and Fund Total
from Fund Pension or Complex Number of
for the Retirement Paid to Directors Funds for
Fiscal Year Benefits Accrued for the Calendar Which Director
Ended as part of Year Ended Serves Within
Name of Person 9/30/00 Fund Expenses 12/31/99 Fund Complex
-------------- ------------ ---------------- ----------------- --------------
Lee Abraham $542 0 $71,133 12
Allan J. Bloostein 362 0 112,483 19
Jane F. Dasher 651 0 65,733 12
Donald R. Foley* 651 0 71,300 12
Richard E. Hanson, Jr. 651 0 68,233 12
Paul Hardin 651 0 90,450 14
Heath B. McLendon+ 0 0 0 77
Roderick C. Rasmussen* 760 0 71,200 12
John P. Toolan* 651 0 69,100 12
- -----------
+Designates a Director who is an "interested person" of the Fund as defined
under the 1940 Act.
* Pursuant to the Fund's deferred compensation plan, the indicated Directors
have elected to defer the following amounts of their compensation from the
Fund: Donald R. Foley: $157, Roderick C. Rasmussen: $250 and John P. Toolan:
$651, and the following amounts of their total compensation from the Fund
Complex: Donald R. Foley: $21,600; John P. Toolan: $69,100.
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. During the Fund's last fiscal year, total compensation paid by the
Fund to Directors Emeritus totalled $230.
Audit Committee Report
The purposes of the Fund's Audit Committee are set forth in the Charter
included as Appendix A. The purposes include assisting the Board of Directors
in
6
its oversight of the Fund's financial reporting process and internal controls,
the Fund's financial statements and the selection of the Fund's independent
accountants. Management, however, is responsible for the preparation,
presentation and integrity of the Fund's financial statements, and the
independent accountants are responsible for planning and carrying out proper
audits and reviews.
In connection with the audited financial statements as of and for the year
ended September 30, 2000 included in the Fund's Annual Report for the year
ended September 30, 2000 (the "Annual Report"), at a meeting held on November
20, 2000, the Audit Committee considered and discussed the audited financial
statements with management and the independent accountants, and discussed the
audit of such financial statements with the independent accountants.
In addition, the Audit Committee discussed with the independent accountants
the quality, and not just the acceptability under generally accepted
accounting principles, of the accounting principles applied by the Fund, and
such other matters brought to the attention of the Audit Committee by the
independent accountants required by Statement of Auditing Standards No. 61, as
currently in effect. The Audit Committee also received from the independent
accountants the written statement required by Independence Standards Board
Statement No. 1, as currently in effect, delineating relationships between the
independent accountants and the Fund and discussed the impact that any such
relationships may have on the objectivity and independence of the independent
accountants.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing including auditor independence. Moreover, the Committee
relies on and makes no independent verification of the facts presented to it
or representations made by management or the independent accountants.
Accordingly, the Audit Committee's oversight does not provide an independent
basis to determine that management has maintained appropriate accounting and
financial reporting principles or appropriate internal controls and
procedures, designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not provide any assurance
that the audit of the Fund's financial statements has been carried out in
accordance with generally accepted accounting standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that the Fund's auditors are in fact "independent."
The Audit Committee also met on December 17, 1999 (to consider and discuss
the financial statements as of and for the year ended September 30, 1999 with
management and the independent accountants) and on December 15, 2000 (to
discuss with the independent accountants the scope and plan for the audit of
the financial statements as of and for the year ended September 30, 2000).
7
Based on its consideration of the audited financial statements and the
discussions referred to above with management and the independent accountants
and subject to the limitations on the responsibilities and role of the Audit
Committee set forth in the Charter and those discussed above, the Committee
recommended to the Board of Directors that the audited financial statements be
included in the Fund's Annual Report.
Respectfully submitted,
Allan J. Bloostein Roderick C. Rasmussen
Jane J. Dasher John P. Toolan
Current Officers
The following is a list of the current executive officers of the Fund, all
of whom have been elected by the directors to serve until their respective
successors are elected:
Principal Occupations
Offices and Positions Period During Past Five Years
Name Held with Fund Offices Held and Age
---- --------------------- ------------ ----------------------
Heath B. McLendon Chairman of the 1995 to date (see table of directors
Board, President and above)
Chief Executive
Officer
Lewis E. Daidone Senior Vice President 1993 to date Managing Director of
and Treasurer Salomon Smith Barney;
Senior Vice President or
Executive Vice President
and Treasurer of 83
investment companies
associated with
Citigroup; Director and
Senior Vice President of
the Manager and TIA; 43.
John C. Bianchi Vice President 1993 to date Managing Director of
Salomon Smith Barney and
investment officer of
six investment companies
associated with
Citigroup; 45.
Christina T. Sydor Secretary 1993 to date Managing Director of
Salomon Smith Barney;
Secretary of 60
investment companies
associated with
Citigroup; Secretary and
General Counsel of the
Manager and TIA; 49.
Paul Brook Controller 1998 to date Director of Salomon
Smith Barney; Controller
or Assistant Treasurer
of 42 investment
companies associated
with Citigroup since
1998; Prior to 1998,
Managing Director of AMT
Capital Services Inc.;
Prior to 1997, Partner
with Ernst & Young LLP;
47
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF NOMINEES TO THE BOARD.
8
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2002 Annual Meeting of
the stockholders of the Fund must be received by September 24, 2001 to be
included in the proxy statement and the form of proxy relating to that
meeting, as the Fund expects that the 2002 Annual Meeting will be held in
February 2002. The submission by a stockholder of a proposal for inclusion in
the proxy statement does not guarantee that it will be included. Stockholder
proposals are subject to certain regulations under the federal securities
laws.
The persons named as proxies for the 2002 Annual Meeting of stockholders
will have discretionary authority to vote on any matter presented by a
stockholder for action at that meeting unless the Fund receives notice of the
matter by December 7, 2001, in which case these persons will not have
discretionary voting authority except as provided in the Securities and
Exchange Commission's rules governing stockholder proposals.
OTHER MATTERS
The Manager knows of no other matters which are to be brought before the
Meeting. However, if any other matters not now known or determined properly
come before the Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote such proxy in accordance with their judgment on
such matters.
By Order of the Board of Directors,
Christina T. Sydor
Secretary
January 22, 2001
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE AND SIGN, DATE
AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
9
APPENDIX A
HIGH INCOME OPPORTUNITY FUND INC.
AUDIT COMMITTEE CHARTER
I. Composition of the Audit Committee: The Audit Committee shall be comprised
of at least three directors, each of whom shall have no relationship to
the Company that may interfere with the exercise of their independence
from management and the Company and shall otherwise satisfy the applicable
membership requirements under the rules of the New York Stock Exchange,
Inc. as such requirements are interpreted by the Board of Directors in its
business judgment.
II. Purposes of the Audit Committee: The purposes of the Audit Committee are
to assist the Board of Directors:
1. in its oversight of the Company's accounting and financial reporting
principles and policies and audit controls and procedures;
2. in its oversight of the Company's financial statements and the
independent audit thereof;
3. in selecting (or nominating the outside auditors to be proposed for
shareholder approval in any proxy statement), evaluating and, where
deemed appropriate, replacing the outside auditors; and
4. in evaluating the independence of the outside auditors.
The function of the Audit Committee is oversight. The management of
the Company is responsible for the preparation, presentation and
integrity of the Company's financial statements. Management and the
internal auditing department are responsible for maintaining
appropriate accounting and financial reporting principles and
policies and internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and
regulations. The outside auditors are responsible for planning and
carrying out a proper audit in accordance with Generally Accepted
Auditing Standards. In fulfilling their responsibilities hereunder,
it is recognized that members of the Audit Committee are not full-
time employees of the Company and are not, and do not represent
themselves to be, accountants or auditors by profession or experts in
the fields of accounting or auditing. As such, it is not the duty or
responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or
procedures, and each member of the Audit Committee shall be entitled
A-1
to rely on (i) the integrity of those persons and organizations
within and outside the Company that it receives information from and
(ii) the accuracy of the financial and other information provided to
the Audit Committee by such persons and organizations absent actual
knowledge to the contrary (which shall be promptly reported to the
Board of Directors).
The outside auditors for the Company are ultimately accountable to
the Board of Directors (as assisted by the Audit Committee). The
Board of Directors, with the assistance of the Audit Committee, has
the ultimate authority and responsibility to select, evaluate and,
where appropriate, replace the outside auditors (or to nominate the
outside auditors to be proposed for shareholder approval in the proxy
statement).
The outside auditors shall submit to the Audit Committee annually a
formal written statement delineating all relationships between the
outside auditors and the Company ("Statement as to Independence")
which, in the auditor's professional judgement may be reasonably
thought to bear on independence, addressing at least the matters set
forth in Independence Standards Board No. 1.
III. Meetings of the Audit Committee: The Audit Committee shall meet at least
annually with the outside auditors to discuss the annual audited financial
statements and results of their audit. The Audit Committee may request any
officer or employee of the Company or the Company's outside counsel or
outside auditors to attend a meeting of the Audit Committee or to meet
with any members of, or consultants to, the Audit Committee.
IV. Duties and Powers of the Audit Committee: To carry out its purposes, the
Audit Committee shall have the following duties and powers:
1. to provide advice to the Board of Directors in selecting, evaluating
or replacing outside auditors;
2. to review the fees charged by the outside auditors for audit and non-
audit services;
3. to ensure that the outside auditors prepare and deliver annually a
Statement as to Independence (it being understood that the outside
auditors are responsible for the accuracy and completeness of this
Statement), to discuss with the outside auditors any relationships or
services disclosed in this Statement that may impact the objectivity
and independence of the Company's outside auditors and to recommend
that the Board of Directors take appropriate action in response to
this Statement to satisfy itself of the outside auditors'
independence;
A-2
4. to instruct the auditors that the outside auditors are ultimately
accountable to the Board of Directors and Audit Committee;
5. to advise management and the outside auditors that they are
expected to provide to the Audit Committee a timely analysis of
significant financial reporting issues and practices;
6. to consider any reports or communications (and management's
responses thereto) submitted to the Audit Committee by the
outside auditors required by or referred to in SAS 61 (as
codified by AU Section 380), as may be modified or supplemented,
including reports and communications related to:
. deficiencies noted in the audit in the design or operation
of internal controls;
. consideration of fraud in a financial statement audit;
. detection of illegal acts;
. the outside auditors' responsibility under generally
accepted auditing standards;
. significant accounting policies;
. management judgments and accounting estimates;
. adjustments arising from the audit;
. the responsibility of the outside auditors for other
information in documents containing audited financial
statements;
. disagreements with management;
. consultation by management with other accountants;
. major issues discussed with management prior to retention of
the outside auditors;
. difficulties encountered with management in performing the
audit;
. the outside auditors' judgments about the quality of the
entity's accounting principles; and
. reviews of interim financial information conducted by the
outside auditors; (not applicable) and
A-3
7. with respect to reporting and recommendations, to discuss with
the Company's General Counsel any significant legal matters may
have a material effect on the financial statements, the Company's
compliance policies, including material notices to or inquiries
received from governmental agencies;
8. to prepare any report, including any recommendation of the Audit
Committee, required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy
statement;
9. to review this Charter at least annually and recommend any
changes to the full Board of Directors; and
10. to report its activities to the full Board of Directors on a
regular basis and to make such recommendations with respect to
the above and other matters as the Audit Committee may deem
necessary or appropriate.
V. Resources and Authority of the Audit Committee: The Audit Committee shall
have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage outside auditors for
special audits, reviews and other procedures and to retain special counsel
and other experts or consultants.
A-4
PROXY
HIGH INCOME OPPORTUNITY FUND INC.
Seven World Trade Center
New York, New York 10048
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 GORDON E. SWARTZ, and each of them acting in the
absence of the other, as Proxies, each with the power to appoint a
substitute, and hereby authorizes them to represent and to vote, as designated
herein, all the shares of common stock of High Income Opportunity Fund Inc.
held of record by the undersigned on January 3, 2001 at a Meeting of
Stockholders to be held on February 21, 2001 or any adjournment thereof.
[SEE REVERSE SIDE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE
SIDE]
[ X ] Please mark
votes as in
this example.
The Board of Directors recommends a vote "FOR" the following
proposal. This proxy, when properly executed, will be voted in the
manner directed herein by the undersigned stockholder. If no
direction is made, this proxy will be voted FOR each nominee for
director.
1. ELECTION OF DIRECTORS
Class III Nominees: (01) Jane F. Dasher, (02) Donald R. Foley,
(03) Paul Hardin
FOR WITHHELD
[ ] [ ]
[ ]
For all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
[ ]
PLEASE MARK, SIGN DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as name appears to the left. When shares
are held by joint tenants, both should sign, or if one signs, that
stockholder's vote binds both stockholders. When signing as attorney,
executor, administrator, agent, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Signature: ____________________________ Date: ______________
Signature: ____________________________ Date: ______________
g:/legal/funds/#HIO/2001/secdocs/proxy2001