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
Municipal High Income 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[X] No longer applicable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.
MUNICIPAL HIGH INCOME FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------
TO BE HELD ON FEBRUARY 11, 1998
--------------------------
To the Shareholders of Municipal High Income Fund Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
Municipal High Income Fund Inc. (the "Fund") will be held at the offices of the
Fund at 388 Greenwich Street, 22nd Floor, New York, New York at 9:00 a.m. on
February 11, 1998 for the following purposes:
1. To elect two (2) Class II Directors of the Fund;
2. To ratify the selection of KPMG Peat Marwick LLP as the independent
auditors of the Fund for the fiscal year ending October 31, 1998;
3. To consider and vote upon such other matters as may come before said
meeting or any adjournment thereof.
The close of business on December 17, 1997 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting and any adjournment thereof.
By Order of the Board of Directors
Christina T. Sydor
Secretary
January 5, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE FUND.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE
COVER.
- --------------------------------------------------------------------------------
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
- ------------ ---------------
Corporate Accounts
(1) ABC Corp................................. ABC Corp.
(2) ABC Corp................................. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer................. John Doe
(4) ABC Corp. Profit Sharing Plan............ John Doe, Trustee
Trust Accounts
(1) ABC Trust................................ Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78.......................... Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA........... John B. Smith
(2) Estate of John B. Smith.................. John B. Smith, Executor
MUNICIPAL HIGH INCOME FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(800) 451-2010
--------------------------
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 11, 1998
--------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Municipal High Income Fund
Inc. (the "Fund") to be voted at the Annual Meeting of Shareholders (the
"Meeting") of the Fund to be held at the Fund's executive offices at 388
Greenwich Street, 22nd floor, New York, New York 10013, on February 11, 1998,
and at any adjournments thereof, for the purpose set forth in the accompanying
Notice of Annual Meeting of Shareholders.
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 Inc. ("Smith Barney"), an
affiliate of the Fund's adviser; 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 the Fund's adviser, Smith Barney
Mutual Funds Management Inc. ("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 October 31, 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 8, 1998. The Fund will provide
additional copies of the annual report to any shareholder upon request by
calling the Fund at 1-800-451-2010.
If the enclosed Proxy is properly executed and returned in time to be
voted at the Meeting, the shares of capital stock of the Fund ("Shares")
represented thereby will be voted in accordance with the instructions marked
thereon. Unless instructions to the contrary are marked thereon, a proxy will be
voted FOR the matters listed in the accompanying Notice of Annual Meeting of
Shareholders. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes" (that
is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated as shares that are present but
which have not been voted. Approval of Proposal 1 requires the affirmative
vote of a plurality of the votes cast at the Meeting with a quorum present.
Approval of Proposal 2 requires the affirmative vote of a majority of the votes
cast at the Meeting with a quorum present. Because abstentions and broker
non-votes are not treated as shares voted, abstentions and broker non-votes
would have no impact on such Proposals. Any shareholder who has given a proxy
has the right to revoke it at any time prior to its exercise either by attending
the Meeting and voting his or her shares in person or by submitting a letter of
revocation or a later-dated proxy to the Fund at the above address prior to the
date of 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 permit further solicitations of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered:the nature of the proposals that are the subject of the Meeting; the
percentage of votes actually cast; the percentage of negative votes actually
cast; the nature of any further solicitation and the information to be provided
to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of the Shares
represented at the Meeting in person or by proxy. A shareholder vote may be
taken on one of the proposals in this Proxy Statement prior to such adjournment
if sufficient votes have been received and it is otherwise appropriate. Under
the Fund's By-laws, a quorum is constituted by the presence in person or by
proxy of the holders of a majority of the outstanding Shares entitled to vote at
the Meeting.
The 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 has fixed the close of business on
December 17, 1997 as the record date (the "Record Date") for the determination
of shareholders of the Fund entitled to notice of and to vote at the Meeting or
any adjournment thereof. Shareholders of the Fund on the Record 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 December 17, 1997, the Fund had outstanding 19,919,714 Shares of
common stock, par value $.001 per share, the only authorized class of stock, of
which 17,311,285 Shares, representing 86.905% of Shares outstanding, were held
but not beneficially owned by CEDE & Co., c/o Depository Trust Company, Box 20,
Bowling Green Station, New York, New York 10004-9998. At the close of business
on December 17, 1997, no other person (including any "group" as that term is
used in Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange
Act")) to the knowledge of the Board of Directors 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 as a group beneficially
owned less than 1% of the outstanding Shares of the Fund.
2
In order that a shareholder's Shares may be represented at the Meeting,
shareholders are required to allow sufficient time for their proxies to be
received on or before 9:00 a.m. on February 11, 1998.
PROPOSAL 1:
TO ELECT TWO (2) CLASS II DIRECTORS OF THE FUND
The Board is divided into three classes. The directors serving in Class II
have terms expiring at the Annual Meeting; each Class II Director currently
serving on the Board has been nominated by the Board for re-election at the
Meeting to serve for a term of three years (until the annual meeting in 2001)
or until his successor has been duly elected and qualified.
Each nominee has consented to serve as a director if elected at the
Meeting. If a designated nominee declines or otherwise becomes unavailable for
election, however, the proxy confers discretionary power on the persons named
therein to vote in favor of a substitute nominee or nominees.
Certain information concerning the nominees is set forth below. All the
individuals listed are currently directors of the Fund.
Number (and Per-
centage) of the
Fund's Shares
Name, Age, Principal Occupation and Served as Beneficially
Other Business Experience During the a Director Owned As Of
Past Five Years Since Class+ December 17, 1997*
- ------------------------------------ ---------- ------ -----------------
PERSONS NOMINATED FOR ELECTION AS DIRECTORS
Robert A. Frankel, age 70 1994 II 233.0087
Managing Partner of Robert A. (less than 1%)
Frankel Management Consultants;
formerly Corporate Vice President of
The Readers Digest Association Inc.
Heath B. McLendon,** age 64 1992 II 12,470.6128 (a)
Managing Director of Smith Barney (less than 1%)
Inc., Chairman of Smith Barney
Strategy Advisers Inc. and President
and Director of SBMFM and Travelers
Investment Advisers, Inc. ("TIA");
prior to July 1993, Senior Executive
Vice President of Shearson Lehman
Brothers Inc., Vice Chairman of
Shearson Lehman Asset Management.
+ Number (I,II,III) indicates whether the director is in Class I, II or III.
Class II directors will be elected to serve for a three-year term as of
the Meeting. Class III directors will continue to serve until the 1999
annual meeting. Class I directors will continue to serve until the year
2000 annual meeting.
* For this purpose, "beneficial ownership" is defined under Section 13(d) of
the Exchange Act. This information as to beneficial ownership is based
upon information furnished to the Fund by Directors.
** Interested person of the Portfolio as defined in the Investment Company
Act of 1940.
(a) Represents shares owned by members of this director's family.
3
Number (and Per-
centage) of the
Fund's Shares
Name, Age, Principal Occupation and Served as Beneficially
Other Business Experience During the a Director Owned As Of
Past Five Years Since Class+ December 17, 1997*
- ------------------------------------ ---------- ------ -----------------
DIRECTORS CONTINUING IN OFFICE
Allan J. Bloostein, age 68 1992 I 549.3859
President of Allan J. Bloostein (less than 1%)
Associates, a consulting firm;
retired Vice Chairman and Director
of May Department Stores; Director
of CVS Corporation and Taubman
Centers Inc.
Martin Brody, age 76
Consultant, HMK Associates, retired 1992 I 115.8726
Vice Chairman of the Board of (less than 1%)
Directors of Restaurant Associates
Corp., Director of Jaclyn, Inc.
Dwight B. Crane, age 59 1992 III 648.5125
Professor, Harvard Business School (less than 1%)
William R. Hutchinson, age 54 1995 III 0
Vice President Financial Operations
AMOCO Corporation, Director of
Associated Bank and Director of
Associated Banc-Corp
+ Number (I,II,III) indicates whether the director is in Class I, II or III.
Class II directors will be elected to serve for a three-year term as of
the Meeting. Class III directors will continue to serve until the 1999
annual meeting. Class I directors will continue to serve until the year
2000 annual meeting.
* For this purpose, "beneficial ownership" is defined under Section 13(d) of
the Exchange Act. This information as to beneficial ownership is based
upon information furnished to the Fund by directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Fund's officers and
directors and persons who beneficially own more than ten percent of the Fund's
Common Stock, to file reports of ownership with the Securities and Exchange
Commission, the New York Stock Exchange, Inc. and the Fund. Based solely upon
its review of the copies of such forms received by it and representations from
such persons the Fund believes that during its fiscal year ended October 31,
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 directors who are not interested persons of the Fund (the
"independent directors") which is charged with recommending a firm of
independent auditors to the Fund and reviewing the accounting matters with the
auditors.
During the Fund's last fiscal year, four in-person meetings of the Board
of Directors of the Fund were held, all of which were regular meetings. No
director
4
attended less than 75% of these meetings of the Board that were held in the last
fiscal year.
Only the independent directors receive remuneration from the Fund for
acting as a director. Aggregate fees (including all out-of-pocket expenses) of
$42,957 were paid to such directors by the Fund during the fiscal year ended on
October 31, 1997. Fees for independent directors are set at $5,000 per annum
plus $500 per Board meeting attended and $100 per telephone conference call.
Officers of the Fund are compensated by Smith Barney.
The following table shows the compensation paid by the Fund to each
director, during the Fund's last fiscal year.
Total
Pension or Number of
Retirement Total Funds for
Aggregate Benefits Accrued Compensation Which Director
Compensation as part of from Fund and Serves within
Name of Person from Fund Fund Expenses Fund Complex Fund Complex
- -------------- ------------ ---------------- ------------- -------------
Charles F. Barber #$ $4,625 $0 $ 38,700 6
Martin Brody 7,000 0 124,286 19
Dwight B.Crane 7,000 0 140,375 22
Allan J. Bloostein 7,000 0 83,150 8
Robert A.Frankel 7,000 0 66,100 8
William R. Hutchinson 6,500 0 38,600 6
Heath B. McLendon* 0 0 0 41
- ----------
* Designates an "interested director."
# Pursuant to the Fund's deferred compensation plan, Mr. Barber elected,
effective January 2, 1996, to defer the payment of all the compensation
due to him from the Fund.
$ Upon attainment of age 80, directors are required to change to
emeritus status. 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
directors, together with reasonable out-of-pocket expenses for each
meeting attended. Effective February 26, 1997, Mr. Barber became a
Director Emeritus.
The names of the principal officers of the Fund are listed in the table
below together with certain additional information. Each of the officers of the
Fund will hold such office until a successor is voted upon by the Board of
Directors.
Principal Occupations
Position and other Affiliations during
Name and Age (Year First Elected) the Past Five Years
------------ -------------------- -----------------------------
Heath B. McLendon, 64 President (1997), (See Table of Directors above)
Chief Executive Officer
and Chairman of the
Board (1992)
Lewis E. Daidone, 40 Senior Vice President Managing Director of Smith
and Treasurer (1994) Barney Inc.; Chief Financial
Officer and Senior Vice
President of SBMFM and TIA.
5
Principal Occupations
Position and other Affiliations during
Name and Age (Year First Elected) the Past Five Years
------------ -------------------- -----------------------------
Lawrence T. McDermott, 48 Vice President and Managing Director of SBMFM;
Investment Officer prior to July 1993, Managing
(1989) Director of Shearson Lehman
Advisors.
Christina T. Sydor, age 46 Secretary (1994) Managing Director of Smith
Barney Inc.; General Counsel
and Secretary of SBMFM and
TIA.
The principal business address of Mr. McLendon, Mr. Daidone, Mr. McDermott
and Ms. Sydor is 388 Greenwich Street, New York, New York 10013.
Election of the listed nominees for Director will require the affirmative
vote of the plurality of votes cast.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF NOMINEES TO THE BOARD.
PROPOSAL 2
RATIFICATION OF SELECTION OF KPMG PEAT MARWICK LLP
AS THE INDEPENDENT AUDITORS FOR THE FUND FOR THE FISCAL
YEAR ENDED OCTOBER 31, 1998
KPMG Peat Marwick LLP ("KPMG") has been selected as the independent
auditors to audit the accounts of the Fund for the fiscal year ending October
31, 1998.
On November 19, 1997, based upon the recommendation of the Audit Committee
of the Board, and in accordance with Section 32 of the Investment Company Act of
1940 and the rules thereunder, the Board voted to appoint KPMG as the Fund's
independent auditors for the fiscal year ended October 31, 1998. KPMG also
serves as the independent auditors for SBMFM, other investment companies
associated with Smith Barney and for Travelers Group Inc. ("Travelers"), the
ultimate parent corporation of Smith Barney. KPMG has no direct or material
indirect financial interest in the Fund, SBMFM, Travelers or any other
investment company sponsored by Smith Barney or its affiliates.
If the Fund receives a written request from any shareholder at least five
days prior to the Meeting stating that the shareholders 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 representatives
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 votes cast at the Meeting is
required to ratify the selection of KPMG.
6
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE SELECTION OF
INDEPENDENT AUDITORS.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other business at the Meeting,
nor is it aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named as proxies in
the accompanying form of proxy will vote thereon in accordance with their
judgment.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders entitled to cast at least 25% of all votes entitled to be
cast at a meeting may require the calling of a meeting of shareholders for the
purpose of voting on the removal of any Director of the Fund. Meetings of
shareholders for any other purpose also shall be called by the Chairman of the
Board, the President or the Secretary of the Portfolio when requested in writing
by shareholders entitled to cast at least 25% of all votes entitled to be cast
at the Meeting.
SUBMISSION OF SHAREHOLDERS' PROPOSALS
All proposals by shareholders of the Fund that are intended to be
presented at the Fund's next Annual Meeting of Shareholders to be held in 1998
must be received by the Fund for consideration for inclusion in the Fund's proxy
statement and proxy relating to that meeting no later than October 15, 1998.
January 5, 1998
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.
7
PROXY
MUNICIPAL HIGH INCOME 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 December 17, 1997 at a Meeting of Shareholders to be held on
February 11, 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: Robert A. Frankel and
Heath B. McLendon
_______________________________
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 OCTOBER 31, 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 President
or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
Signature: ____________________________ Date: ________________
Signature: ____________________________ Date: ________________