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)
Robert Nelson
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[X] No longer applicable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.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------------------
TO BE HELD ON FEBRUARY 28, 1997
-----------------------------
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 388 Greenwich Street, New
York, New York, 26th Floor, on February 28, 1997 at 2:00 P.M. (New York Time)
for the following purposes:
1. To elect three directors, each to hold office for the term indicated and
until his successor shall have been elected and qualified;
2. To consider and act upon the ratification of the selection of KPMG Peat
Marwick LLP as independent auditors of the Fund; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The stock transfer books will not be closed, but in lieu thereof, the Board
of Directors has fixed the close of business on January 13, 1997 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 24, 1997
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.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
-----------------------------
PROXY STATEMENT
-----------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 28, 1997
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, 26th Floor, New York, New York 10013, on February 28, 1997
at 2:00 P.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; Smith Barney Mutual Funds Management Inc.
("SBMFM" 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, 1996 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 24, 1997. The Fund will provide
additional copies of the annual report to any shareholder upon request by
calling the Fund at 1-800-224-7523.
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 bro-
ker "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 which 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 13, 1997 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. At the close of business
on January 13, 1997, the Fund had outstanding 69,858,000 shares of Common Stock,
par value $.001 per share, the only authorized class of stock, of which
68,134,955 (or 97.53%) were held in accounts, but not beneficially owned by Cede
& Co., P.O. Box 20, Bowling Green Station, New York, New York 10004. At the
close of business on January 13, 1997, no other person (including any "group" as
that 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.
As of the Record Date, to the knowledge of the Fund, no shares of Smith
Barney or its ultimate parent corporation, Travelers Group Inc. ("Travelers"),
were held by Board members who are not interested persons of the Fund (as that
term is used in the Investment Company Act of 1940, as amended (the "1940
Act")).
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 move 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 con-
2
sidered: 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 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 II have terms expiring at the Meeting; each Class II
director currently serving on the Board has been nominated by the Board of
Directors for re-election at the Meeting to serve until the 2000 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
II 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. 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" as defined in the 1940 Act are indicated by an asterisk(*).
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 13, 1997
---- ---------------------------- ----------------
John P. Toolan Retired; Director of ten None
Director since 1993(II) investment companies
associated with Smith Barney;
Director of John Hancock
Funds. Formerly Director and
Chairman of the Smith Barney
Trust Company, Director of
Smith Barney Inc. and the
Manager. Prior to 1992, Senior
Executive Vice President,
Director and Member of the
Executive Committee of Smith
Barney; 66.
3
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 13, 1997
---- ---------------------------- ----------------
Persons Nominated for Election as Directors (cont'd)
Heath B. McLendon * Managing Director of Smith 134
Director since 1993(II) Barney; Director of forty-two (Less than 1%)
investment companies
associated with Smith Barney;
Chairman of the Board of Smith
Barney Strategy Advisers Inc.;
and President of SBMFM. Prior
to July 1993, Senior Executive
Vice President of Shearson
Lehman Brothers Inc.; Vice
Chairman of Shearson Asset
Management; 63.
Roderick C. Rasmussen Investment Counselor; Director 100
Director since 1993(II) of ten investment companies (Less than 1%)
associated with Smith Barney.
Formerly Vice President of
Dresdner and Company Inc.
(investment counselors); 70.
The remainder of the Board constitutes the Class III and Class I directors (as
indicated by the Number III or I), none of whom will stand for election at the
Meeting, as their terms will expire in 1998 and 1999, 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 13, 1997
---- ---------------------------- ----------------
Jessica Bibliowicz* Executive Vice President of None
Director since 1995(III) Smith Barney; Chairman of the
Board of SBMFM; Director of
twelve investment companies
associated with Smith Barney;
President of forty-two
investment companies
associated with Smith Barney.
Prior to January 1994,
Director of Sales and
Marketing for Prudential
Mutual Funds; 37.
Donald R. Foley Retired; Director of ten 1,117
Director since 1993(III) investment companies (Less than 1%)
associated with Smith Barney.
Formerly Vice President of
Edwin Bird Wilson,
Incorporated (advertising);
74.
Paul Hardin Interim President of 865(a)
Director since 1994(III) University of Alabama at (Less than 1%)
Birmingham; Professor of Law
at the University of North
Carolina at Chapel Hill;
Director of twelve investment
companies associated with
Smith Barney and a Director of
The Summit Bancorporation.
Formerly, Chancellor of the
University of North Carolina
at Chapel Hill; 65.
(a) Represents shares owned by members of this director's family.
4
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned as of
Name Other Directorships, and Age January 13, 1997
---- ---------------------------- ----------------
Directors Continuing in Office (cont'd)
Joseph H. Fleiss Retired; Director of ten None
Director since 1993(I) investment companies
associated with Smith Barney.
Formerly, Senior Vice
President of Citibank, Manager
of Citibank's Bond Investment
Portfolio and Money Desk, and
a Director of Citicorp
Securities Co., Inc.; 79.
Francis P. Martin Practicing physician; Director None
Director since 1993(I) of ten investment companies
associated with Smith Barney.
Formerly President of the
Nassau Physicians' Fund, Inc.;
72.
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 other 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 1996, 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.
Six meetings of the Board of Directors of the Fund were held during the
last fiscal year, all of which were regular meetings. The audit committee held
one meeting 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 $11,533 were paid to such directors by the Fund for
the fiscal year ended September 30, 1996. Fees for 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
5
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.
The following table shows the compensation paid by the Fund to each
incumbent director during the Fund's last fiscal year.
COMPENSATION TABLE
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
- -------------- --------- ------------- ----------------- ------------
Jessica Bibliowicz* $ 0 $0 $ 0 12
Joseph H. Fleiss 1,336+ 0 55,200 10
Donald R. Foley 1,436+ 0 57,800 10
Paul Hardin 1,436 0 72,300 12
Francis P. Martin 1,436+ 0 58,000 10
Heath B. McLendon* 0 0 0 42
Roderick C. Rasmussen 1,436 0 58,000 10
John P. Toolan 1,436+ 0 58,000 10
- ----------
* Designates an "interested director".
+ Pursuant to the Fund's deferred compensation plan, the indicated Directors
have elected to defer the following payment of some or all of their
compensation: Joseph H. Fleiss: $418, Donald R. Foley: $418, Francis P.
Martin: $1,436, and John P. Toolan: $1,436.
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:
Offices and Positions Period Principal Occupations During
Name Held with Fund Offices Held Past Five Years and Age
- ---- -------------- ------------ -----------------------
Jessica Bibliowicz President 1995 to date (see table of
directors above)
Lewis E. Daidone Senior Vice President 1993 to date Managing Director of
and Treasurer Smith Barney; Senior
Vice President and
Treasurer of the
other investment
companies associated
with Smith Barney;
Director and Senior
Vice President of
the Manager; 39.
6
Offices and Positions Period Principal Occupations During
Name Held with Fund Offices Held Past Five Years and Age
- ---- -------------- ------------ -----------------------
John C. Bianchi Vice President 1993 to date Managing Director of
Smith Barney and
investment officer
of other investment
companies associated
with Smith Barney;
41.
Christina T. Sydor Secretary 1993 to date Managing Director of
Smith Barney;
Secretary of the
other investment
companies associated
with Smith Barney;
Secretary and
General Counsel of
the Manager; 45.
Thomas M. Controller and 1993 to date Director of Smith
Reynolds Assistant Secretary Barney and
Controller and
Assistant Secretary
of certain other
investment companies
associated with
Smith Barney; 37.
The Board of Directors, including all of the independent Board members,
recommends that you vote "FOR" the election of nominees to the Board.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG") have been selected as the independent
auditors to audit the accounts of the Fund for and during the fiscal year ending
September 30, 1997 by a majority of the independent directors by a vote cast in
person subject to ratification by the stockholders at the Meeting (the entire
Board concurred in the selection). KPMG also serves as the independent auditors
for the Manager, other investment companies associated with Smith Barney and for
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 of a majority of shares present and voting at the
Meeting is required to ratify the selection of KPMG. The Board of Directors,
including all of the independent Board members, recommends that the stockholders
vote "FOR" the ratification of the selection of independent auditors.
7
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998 Annual Meeting
of the Stockholders of the Fund must be received by September 15, 1997 to be
included in the proxy statement and the form of proxy relating to that meeting
as the Fund expects that the 1998 Annual Meeting will be held in late February
of 1998.
OTHER MATTERS
The management 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 24, 1997
8
HIGH INCOME OPPORTUNITY FUND INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of High Income Opportunity Fund Inc.
(the "Fund"), a Maryland
corporation, hereby appoints Heath B. McLendon, Christina T. Sydor and
Robert M. Nelson 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 High Income Opportunity Fund
Inc. to be held at the offices of the Fund, 388
Greenwich Street, New York, New York on February 28, 1997 at 2:00 p.m.,
and any adjournment or adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice of
Meeting and Proxy Statement dated January 13, 1997 and hereby instructs
said attorneys and proxies to vote said shares as indicated herein.
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.
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
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 ELECTION OF
NOMINEES AS DIRECTORS AND PROPOSAL 2.
Please refer to the Proxy Statement for a discussion of the Proposals.
1. ELECTION OF DIRECTORS FOR WITHHELD
Nominees: H.B. McLendon,
R. C. Rasmussen, J. Toolan
___________________________________________________________________________
For both nominees except as noted above
2.To ratify the selection of KPMG Peat Marwick LLP as FOR AGAINST ABSTAIN
independent auditors for the Fund.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
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.
Signature: _________________________________________ Date:
Signature: Date: