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[X] No longer applicable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.
125 Broad Street
New York, New York 10004
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------
To be Held on April 29, 2004
-----------------
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 Citigroup Center, 153 East 53rd Street, 14th Floor
Conference Center, New York, New York, on April 29, 2004 at 3:30 p.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 March 19, 2004 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
Robert I. Frenkel
Secretary
New York, New York
March 29, 2004
-----------------
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.
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 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. (by John Doe, Treasurer)
(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
Custodial or Estate Accounts
(1) John B. Smith, Cust., f/b/o John B. Smith, Jr.
UGMA.......................................... John B. Smith
(2) John B. Smith................................. John B. Smith, Jr., Executor
HIGH INCOME OPPORTUNITY FUND INC.
125 Broad Street
New York, New York 10004
-----------------
PROXY STATEMENT
-----------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 2004
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 Citigroup Center, 153 East 53rd
Street, 14th Floor Conference Center, New York, New York 10022, on April 29,
2004 at 3:30 p.m. (Eastern 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. Solicitation costs
are expected to be approximately $90,000. Proxy solicitations will be made
mainly by mail. In addition, certain officers, directors and employees of the
Fund; Smith Barney Fund Management LLC ("SBFM" or the "Manager"), the Fund's
investment manager; Citigroup Global Markets Inc. ("CGM"), an affiliate of
SBFM; and/or PFPC Inc. ("PFPC"), the Fund's transfer agent, may solicit proxies
in person or by telephone, telegraph, or mail. CGM is located at 388 Greenwich
Street, New York, NY 10013; SBFM is located at 399 Park Avenue New York, NY
10022; PFPC is located at P.O. Box 8030, Boston, Massachusetts 02266. In
addition, the Fund will reimburse brokerage firms or other record holders for
their expenses in forwarding solicitation material to beneficial owners of
shares of the Fund.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended September 30, 2003, 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 April 1, 2004. 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
March 19, 2004 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 73,927,179.249 shares of Common Stock, par value
$.001 per share, the only authorized class of stock, of which 72,919,119 or
98.6% 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) (the "1934 Act") 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
2
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 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.
As of the Record Date to the knowledge of the Fund, no securities issued by
CGM's ultimate parent corporation, Citigroup, Inc. ("Citigroup") were held by
directors 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").
PROPOSAL NO. 1
ELECTION OF DIRECTORS
In accordance with the Fund's Charter, 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 2007 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 1940 Act is indicated by an asterisk(*).
Information as to beneficial ownership is based upon information furnished to
the Fund by Directors.
3
Persons Nominated for Election as Directors
Number of
Term of Portfolios
Office and in Fund Other
Position(s) Length of Principal Complex Directorships
Held with Time Occupation(s) During Overseen Held by
Name, Address and Age Fund Served Past Five Years by Director Director
--------------------- ----------- ---------- -------------------- ----------- -------------
CLASS III DIRECTORS
NON-INTERESTED DIRECTORS:
Jane F. Dasher Director Since Controller of PBK 27 None
Korsant Partners 1999 Holdings Inc., a
283 Greenwich Avenue family investment
3rd Floor company
Greenwich, CT 06830
Age 54
Donald R. Foley Director Since Retired 19 None
3668 Freshwater Drive 1993
Jupiter, FL 33477
Age 81
Paul Hardin Director Since Professor of Law & 34 None
12083 Morehead 1994 Chancellor Emeritus
Chapel Hill, NC 27514-8426 at the University of
Age 72 North Carolina
4
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 2005 and 2006, respectively.
Directors Continuing in Office
Number of
Term of Portfolios
Office and in Fund Other
Position(s) Length of Principal Complex Directorships
Held with Time Occupations During Overseen Held by
Name, Address and Age Fund Served Past Five Years by Director Director
--------------------- ----------- ---------- ------------------ ----------- -------------
CLASS I DIRECTORS
NON-INTERESTED DIRECTORS:
Lee Abraham Director Since Retired; Former 27 Signet
13732 LeHavre Drive 1999 Director of Galey & Group PLC
Frenchman's Creek Lord (fabrics), Liz (specialty
Palm Beach Gardens, FL 33410 Claiborne (apparel), retail
Age 76 R.G. Barry Corp. jeweler)
(footwear)
Allan J. Bloostein Director Since President of Allan 34 Taubman
27 West 67th Street, Apt. 5FW 1999 Bloostein Centers Inc.
New York, NY 10023 Associates, a (real estate
Age 74 consulting firm. investment
trust)
Richard E. Hanson, Jr. Director Since Retired; Former 27 None
2751 Vermont Route 140 1999 Head of the New
Poultney, VT 05764 Atlanta Jewish
Age 62 Community High
School
5
Number of
Term of Portfolios
Office and in Fund Other
Position(s) Length of Principal Complex Directorships
Held with Time Occupations During Overseen Held by
Name, Address and Age Fund Served Past Five Years by Director Director
--------------------- ----------- ---------- ------------------ ----------- -------------
CLASS II DIRECTORS
INTERESTED DIRECTOR:
R. Jay Gerken, CFA* Chairman, Since Managing Director of 221 None
Citigroup Asset Management President 2002 CGM; Chairman,
("CAM") and Chief President and Chief
399 Park Avenue Executive Executive Officer of
New York, NY 10022 Officer Smith Barney Fund
Age 53 Management LLC
("SBFM"), Travelers
Investment Advisor,
Inc. ("TIA") and Citi
Fund Management
Inc. ("CFM");
President and Chief
Executive Officer of
certain mutual funds
associated with
Citigroup Inc.
("Citigroup");
Formerly, Portfolio
Manager of Smith
Barney Allocation
Series Inc. (from
1996-2001) and
Smith Barney Growth
and Income Fund
(from 1996-2000)
NON-INTERESTED DIRECTORS:
Roderick C. Rasmussen Director Since Investment 27 None
9 Cadence Court 1993 Counselor
Morristown, NJ 07960
Age 77
John P. Toolan Director Since Retired 27 John
7202 Southeast Golf 1993 Hancock
Ridge Way Funds
Hobe Sound, FL 33455
Age 73
- --------
* Designates a Director who is affiliated with the Manager and considered an
"interested person" of the Fund as defined under the 1940 Act.
6
Beneficial Ownership Report
Aggregate Dollar Range*(1)
Dollar Range*(1) of Equity Securities in all
of Equity Funds Overseen by
Securities in Director and Advised
Name of Director the Fund by SBFM
---------------- ---------------- ---------------------------
NON-INTERESTED DIRECTORS
Lee Abraham B B
Allan J. Bloostein C E
Jane F. Dasher B E
Donald R. Foley E E
Richard E. Hanson B B
Dr. Paul Hardin D E
Roderick Rasmussen B C
John P. Toolan E E
INTERESTED DIRECTOR
R. Jay Gerken B E
- --------
(*) The dollar ranges are as follows: "A" = None; "B" = $1-$10,000; "C" =
$10,001-$50,000; "D" = $50,001-$100,000; "E" = over $100,000.
(1) This information has been furnished by each director as of December 31,
2003. "Beneficial Ownership" is determined in accordance with Rule
16a-1(a)(2) promulgated under the 1934 Act.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act and Section 30(h) of the 1940 Act in
combination require the Fund's directors and officers and persons who own more
than 10% of the Fund's common stock, as well as SBFM and certain of its
affiliated persons, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC") and the New York Stock Exchange,
Inc. ("NYSE"). Such persons are required by SEC regulations to furnish the Fund
with copies of all such filings. Based solely upon its review of the copies of
such filings received by it and certain other information received by it, the
Fund believes that, for the fiscal year ended September 30, 2003, all filing
requirements applicable to such persons were met.
Committees of the Board of Directors
The Fund has a separately designated standing Corporate Governance and
Nominating committee ("Nominating Committee"). The Fund has a separately
designated standing Audit Committee ("Audit Committee") established in
accordance with Section 3(a)(58)(A) of 1934 Act. Both committees are comprised
solely of members who are independent as defined in the NYSE's listing
standards. The members of the Audit Committee are Ms. Dasher and Messrs.
Abraham and Toolan. The members of the Nominating Committee are Messrs.
Abraham, Foley and Hanson.
The principal functions of the Audit Committee are to (a) assist the Board
of Directors in its oversight of (i) the integrity of the Fund's financial
statements, (ii) the Fund's compliance with legal and regulatory requirements,
(iii) the qualifications and independence of the Fund's independent auditors
and (iv) the
7
performance of the Fund's internal audit function and independent auditors;
(b) approve, and recommend to the Independent Board Members (as such term is
defined in the Audit Committee Charter) for their ratification, the selection,
appointment, retention or termination of the Fund's independent auditors, as
well as approving the compensation thereof; (c) approve all audit and
permissible non-audit services provided to the Fund and certain other persons
by such independent auditors; and (d) prepares the report required to be
prepared by the committee pursuant to SEC rules for inclusion in the Fund's
annual proxy statement. The Fund adopted an Amended and Restated Audit
Committee Charter at a meeting held on March 10, 2004, a copy of which is
attached hereto as Exhibit A.
The Fund has an Investment Committee responsible for reviewing the
investment performance of the Fund. The members of this committee are directors
who are not "interested persons" of the Fund as defined under the 1940 Act (the
"independent directors"). The members of the Investment Committee are Messrs.
Hardin, Bloostein, Toolan, and Rasmussen.
The Fund also has a pricing committee composed of the Chairman of the Board
and one independent trustee which is charged with determining fair value prices
for securities when required.
Eleven meetings of the Board were held between October 1, 2002 and September
30, 2003, five of which were regular meetings. Three Governance and Nominating
Committee meetings were held, two Audit Committee meetings were held and two
Investment Committee meetings were held during the fiscal year ended September
30, 2003. No Director attended less than 75% of the Board meetings, and the
committee meetings of which he or she is a member. The fund does not have a
formal policy regarding attendance by Directors at annual meetings but may
consider a policy in the future. At the 2003 Annual Meeting one Board member
attended.
The Nominating Committee ("Committee") will accept nominees recommended by a
stockholder as it deems appropriate. At the present time there are no vacancies
on the Board. Stockholders who wish to recommend a nominee should send
recommendations to the Fund's Secretary that include all information relating
to such person that is required to be disclosed in solicitations of proxies for
the election of Directors. A recommendation must be accompanied by a written
consent of the individual to stand for election if nominated by the Board of
Directors and to serve if elected by the stockholders. The Fund adopted a
Committee Charter (the "Charter") at a meeting held on March 10, 2004, a copy
of which is attached to this Proxy Statement as Exhibit B.
The Committee identifies potential nominees through its network of contacts.
The Committee meets to discuss and consider such candidates' qualifications and
then chooses a candidate by majority vote. The Committee does not have
specific, minimum qualifications for nominees and has not established specific
qualities or skills that it regards as necessary for one or more of the Fund's
directors to possess
8
(other than any qualities or skills that may be required by applicable law,
regulation or listing standard). However, as set forth in the Committee
Charter, in evaluating a person as a potential nominee to serve as a Director
of the Fund, the Committee may consider the following factors, among any others
it may deem relevant:
. whether or not the person is an "interested person" as defined in the
1940 Act and whether the person is otherwise qualified under applicable
laws and regulations to serve as a Director of the Fund;
. whether or not the person has any relationships that might impair his or
her independence, such as any business, financial or family
relationships with Fund management, the investment manager of the Fund,
Fund service providers or their affiliates;
. whether or not the person serves on boards of, or is otherwise
affiliated with, competing financial service organizations or their
related mutual fund complexes;
. whether or not the person is willing to serve, and willing and able to
commit the time necessary for the performance of the duties of a
Director of the Fund;
. the contribution which the person can make to the Board and the Fund
(or, if the person has previously served as a Director of the Fund, the
contribution which the person made to the Board during his or her
previous term of service), with consideration being given to the
person's business and professional experience, education and such other
factors as the Committee may consider relevant;
. the character and integrity of the person; and
. whether or not the selection and nomination of the person would be
consistent with the requirements of the Fund's retirement policies.
9
COMPENSATION
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 $13,299.20 were paid to such directors by the
Fund during the calendar year ended December 31, 2002. Fees for the Independent
Directors, who also serve as board members of certain other funds sponsored by
or affiliated with CGM, 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 CGM.
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, 2003 and
calendar year ended December 31, 2003.
Compensation Table
Aggregate
Compensation
Aggregate from Fund and
Compensation Fund Complex Number of
from Fund Paid to Directors Portfolios for
for the Fiscal for the Calendar Which Director
Year Ended Year Ended Serves Within
Name of Person 9/30/03 12/31/03 Fund Complex
-------------- -------------- ----------------- --------------
Lee Abraham $ 662 $ 76,300 27
Allan J. Bloostein $ 762 $ 76,100 34
Jane F. Dasher $1,062 $ 80,150 27
Donald R. Foley* $ 539 $ 53,700 19
R. Jay Gerken+ $ 0 $ 0 221
Richard E. Hanson, Jr. $ 762 $ 76,600 27
Paul Hardin $ 562 $126,600 34
Roderick C. Rasmussen* $ 560 $ 46,100 27
John P. Toolan* $ 662 $ 77,050 27
Joseph Fleiss**
- --------
+ 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: $37, Roderick C. Rasmussen: $202, and the following
amounts of their total compensation from the Fund Complex: Roderick C.
Rasmussen: $30,000.
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, unless elected as a director prior to the adoption of the emeritus
program. 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 $10,500.
** Mr. Fleiss died on April 4, 2003.
10
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:
Term of
Office
and
Length Principal Occupation(s)
Position(s) Held of Time During Past
Name, Address and Age with Fund Served Five Years
- --------------------- ---------------- ------- -----------------------
R. Jay Gerken Chief 2002 to (see table of directors
CAM Executive date above)
399 Park Avenue Officer,
New York, NY 10022 Chairman of
Age 53 the Board and
President
Andrew B. Shoup Senior 2003 to Director of CAM; Chief
CAM Vice President date Administrative Officer of
125 Broad Street and Chief mutual funds associated
10th Floor Administrative with Citigroup; Head of
New York, NY 10004 Officer International Funds
Age 47 Administration of CAM
from 2001 to 2003; Director
of Global Funds
Administration of CAM
from 2000 to 2001; Head of
U.S. Citibank Funds
Administration of CAM
from 1998 to 2000.
Richard L. Peteka Chief Financial 2002 to Director of CGM; Chief
CAM Officer and date Financial Officer and
125 Broad Street Treasurer Treasurer of certain mutual
11th Floor funds affiliated with
New York, NY 10004 Citigroup; Director and
Age 42 Head of Internal Control for
Citigroup Asset
Management U.S. Mutual
Fund Administration from
1999-2002; Vice President,
Head of Mutual Fund
Administration and
Treasurer at Oppenheimer
Capital from 1996-1999.
Beth A. Semmel Vice President 2002 to Managing Director of CGM
CAM and Investment date
399 Park Avenue Officer
4th Floor
New York, NY 10022
Age 42
11
Term of
Office*
and
Position(s) Length Principal Occupation(s)
Held with of Time During Past
Name, Address and Age Fund Served Five Years
--------------------- ----------- ------- -----------------------
Peter J. Wilby, CFA Vice 2002 Managing Director and
CAM President to date Chief Investment Officer of
399 Park Avenue and CGM
4th Floor Investment
New York, NY 10022 Officer
Age 44
Kaprel Ozsoiak Controller 2002 Vice President
CAM to date of CGM; Controller of
125 Broad Street certain funds associated
11th Floor with Citigroup.
New York, NY 10004
Age 38
Robert I. Frenkel Secretary 2003 Managing Director and
CAM and Chief to date General Counsel, Global
4th Floor Legal Mutual Funds for CAM and
300 First Stamford Place Officer Vice President and Division
Stamford, CT 06902 Counsel of its predecessor
Age 49 (since 1994); Secretary of
CFM; Secretary and Chief
Legal Officer of mutual funds
associated with Citigroup.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF NOMINEES TO THE BOARD.
Audit Committee Report
The purposes of the Fund's Audit Committee include assisting the Board of
Directors in 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 auditors. Management, however, is responsible for the
preparation, presentation and integrity of the Fund's financial statements, and
the independent auditors 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, 2003 included in the Fund's Annual Report for the year
ended September 30, 2003 (the "Annual Report"), at a meeting held on November
19, 2003, the Audit Committee considered and discussed the audited financial
statements with management and the independent auditors, and discussed the
audit of such financial statements with the independent auditors.
12
In addition, the Audit Committee discussed with the independent auditors 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
auditors required by Statement of Auditing Standards No. 61, as currently in
effect. The Audit Committee also received from the independent auditors the
written statement required by Independence Standards Board Statement No. 1, as
currently in effect, delineating relationships between the independent auditors
and the Fund and discussed the impact that any such relationships may have on
the objectivity and independence of the independent auditors.
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 Audit
Committee relies on and makes no independent verification of the facts
presented to it or representations made by management or the independent
auditors. 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."
Based on its consideration of the audited financial statements and the
discussions referred to above with management and the independent auditors 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,
Jane F. Dasher
Lee Abraham
John P. Toolan
November 19, 2003
Disclosure of Auditor Fees
Audit Fees. Audit fees paid by Fund to KPMG LLP ("KPMG") in connection with
KPMG's audit of the Fund's annual financial statements for the year ended
September 30, 2003 totaled $29,500.
13
Financial Information Systems Design and Implementation Fees. Neither the
Fund nor its investment adviser, SBFM, nor other entities under common control
engaged KPMG to provide advice to the Fund regarding financial information
systems design or implementation during the year ended September 30, 2003.
All other Fees. Fees billed to the Fund by KPMG during the year ended
September 30, 2003 for all other non-audit services rendered to the Fund
totaled approximately $2,800 (such fees related to tax services provided to the
Fund). There were no other non-audit fees billed to SBFM or any entity
controlling, controlled by, or under common control with SBFM that provides
services to the Fund during the year ended September 30, 2003. The Fund's Audit
Committee, has selected KPMG as independent auditors for the fiscal year ending
September 30, 2004 and the Fund's Board of Directors have ratified that
selection.
SUBMISSION OF STOCKHOLDER PROPOSALS
AND OTHER STOCKHOLDER COMMUNICATIONS
Stockholder proposals intended to be presented at the 2005 Annual Meeting of
the stockholders of the Fund must be received by September 22, 2004 to be
included in the proxy statement and the form of proxy relating to that meeting,
as the Fund expects that the 2005 Annual Meeting will be held in February 2005.
The shareholder proposal must be delivered by written notice to the Secretary
of the Fund (addressed to High Income Opportunity Fund Inc., 300 First Stamford
Place, 4th Floor, Stamford, CT 06902). 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 2005 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 24, 2004, in which case these persons will not have
discretionary voting authority except as provided in the SEC's rules governing
stockholder proposals.
The Fund's Audit Committee has established guidelines and procedures
regarding the receipt, retention and treatment of complaints regarding
accounting, internal accounting controls or auditing matters (collectively,
"Accounting Matters"). Persons with complaints or concerns regarding Accounting
Matters may submit their complaints to the Citigroup Chief Compliance Officer
("CCO"). Persons who are uncomfortable submitting complaints to the CCO,
including complaints involving the CCO, may submit complaints directly to the
Fund's Audit Committee Chair (together with the CCO, "Complaint Officers").
Complaints may be submitted on an anonymous basis.
14
The CCO may be contacted at:
Citigroup Asset Management
Compliance Department
399 Park Avenue, 4th Floor
New York, New York 10022
Complaints may also be submitted by telephone at 800-742-5274. Complaints
submitted through this number will be received by the CCO.
The Fund's Audit Committee Chair may be contacted at:
High Income Opportunity Fund Inc.
Audit Committee Chair
c/o Jane Dasher
P.O. Box 7441
Greenwich, CT 06836-7441
A stockholder who wishes to send any other communications to the Board
should also deliver such communications to the Secretary of the Fund at 300
First Stamford Place, 4th Floor, Stamford, CT 06902. The Secretary is
responsible for determining, in consultation with other officers of the Fund,
counsel, and other advisers as appropriate, which stockholder communications
will be relayed to the Board.
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,
Robert I. Frenkel
Secretary
March 29, 2004
15
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS 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.
16
Exhibit A
AUDIT COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MARCH 10, 2004
Establishment and Purpose
This document serves as the Charter for the Audit Committee (the
"Committee") of the Board of each registered investment company (the "Fund")
advised by Smith Barney Fund Management or Salomon Brothers Asset Management or
one of their affiliates (each, an "Adviser") listed on Appendix A hereto (each
such Charter being a separate Charter). The primary purposes of the Committee
are to (a) assist Board oversight of (i) the integrity of the Fund's financial
statements, (ii) the Fund's compliance with legal and regulatory requirements,
(iii) the qualifications and independence of the Fund's independent auditors
and (iv) the performance of the Fund's internal audit function and independent
auditors; (b) approve, and recommend to the Independent Board Members (as such
term is defined below) for their ratification, the selection, appointment,
retention or termination of the Fund's independent auditors, as well as
approving the compensation thereof; (c) approve all audit and permissible
non-audit services provided to the Fund and certain other persons by the Fund's
independent auditors; and (d) for each closed-end Fund, prepare the report
required to be prepared by the Committee pursuant to the rules of the
Securities and Exchange Commission for inclusion in the Fund's annual Proxy
Statement.
Duties and Responsibilities
The Fund's independent auditors are accountable to the Committee.
The Committee shall:
1. Bear direct responsibility for the appointment, compensation, retention
and oversight of the Fund's independent auditors, or of any other public
accounting firm engaged for the purpose of performing other audit,
review or attest services for the Fund.
2. Confirm with any independent auditor retained to provide audit services
that the independent auditor has ensured the appropriate rotation of the
lead audit partner pursuant to applicable regulations.
A-1
3. Approve (a) all audit and permissible non-audit services/1/ to be
provided to the Fund and (b) all permissible non-audit services to be
provided by the Fund's independent auditors to the Adviser and any
Covered Service Providers if the engagement relates directly to the
operations and financial reporting of the Fund. The Committee may
implement policies and procedures by which such services are approved
other than by the full Committee.
4. Discuss with the independent auditors any disclosed relationships or
services that may diminish the objectivity and independence of the
independent auditors and, if so determined by the Committee, recommend
that the Board take appropriate action to ensure the independence of the
independent auditors.
5. Review, in consultation with the independent auditors, the proposed
scope of the Fund's audit each year, including the audit procedures to
be utilized in the review of the Fund's financial statements.
6. Inquire of the Adviser and the independent auditors as to significant
tax and accounting policies elected by the Fund (including matters
affecting qualification under Subchapter M of the Internal Revenue Code).
- --------
/1/ The Committee shall not approve non-audit services that the Committee
believes may impair the independence of the auditors. As of the date of
the approval of this Audit Committee Charter, permissible non-audit
services include any professional services (including tax services), that
are not prohibited services as described below, provided to the Fund by
the independent auditors, other than those provided to the Fund in
connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements
of the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services;
(viii) legal services and expert services unrelated to the audit; and
(ix) any other service the Public Company Accounting Oversight Board
determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit services in not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, the Adviser and any service
providers controlling, controlled by or under common control with the
Adviser that provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount of revenues
paid to the independent auditors during the fiscal year in which the
permissible non-audit services are provided by (a) the Fund, (b) the Adviser
and (c) any entity controlling, controlled by or under common control with
the Adviser that provides ongoing services to the Fund during the fiscal
year in which the services are provided that would have to be approved by
the Committee; (ii) the permissible non-audit services were not recognized
by the Fund at the time of the engagement to be non-audit services; and
(iii) such services are promptly brought to the attention of the Committee
and approved by the Committee (or its delegate(s)) prior to the completion
of the audit.
A-2
7. Review with the independent auditors any problems or difficulties the
auditors may have encountered during the conduct of the audit and
management's response, including a discussion with the independent
auditors of the matters required to be discussed by Statement on
Auditing Standards No. 61, 89, 90 or any subsequent Statement, relating
to the conduct of the audit.
8. Review, in consultation, as appropriate, with the independent auditors
and significant Fund service providers, matters relating to internal
controls over financial reporting and disclosure controls and procedures
of the Fund and of the Fund's significant service providers.
9. Request, receive and/or review from the independent auditors such other
materials as deemed necessary or advisable by the Committee in the
exercise of its duties under this Charter; such materials may include,
without limitation, any other material written communications bearing on
the Fund's financial statements, or internal or disclosure controls,
between the independent auditors and the Fund, the Adviser or other Fund
service providers, such as any management letter or schedule of
unadjusted differences, and any comment or "deficiency" letter (to the
extent such letters relate to financial reporting) received from a
regulatory or self-regulatory organization addressed to the Fund or the
Adviser that relates to services rendered to the Fund.
10. For each closed-end Fund, establish procedures regarding the receipt,
retention and treatment of complaints that the Fund may receive
regarding Fund accounting, internal accounting controls or auditing
matters, including procedures for the confidential or anonymous
submission by Fund officers, employees, stockholders or service
providers of concerns regarding questionable accounting or auditing
matters related to the Fund.
11. For each closed-end Fund, obtain and review a report by the Fund's
independent auditors describing (i) the auditing firm's internal
quality- control procedures; (ii) any material issues raised by the most
recent internal quality-control review, or peer review, of the auditing
firm, or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the auditing firm, and any steps taken
to deal with any such issues; and (iii) (to assess the auditor's
independence) all relationships between the independent auditor and the
Fund.
12. For each closed-end Fund, discuss policies with respect to risk
assessment and risk management.
13. For each closed-end Fund, review hiring policies for employees or former
employees of the Fund's independent auditors.
A-3
14. For each closed-end Fund, discuss with management and the Fund's
independent auditors the Fund's audited and discuss with management the
Fund's unaudited financial statements, including any narrative
discussion by management concerning the Fund's financial condition and
investment performance and, if appropriate, recommend the publication of
the Fund's annual audited financial statements in the Fund's annual
report in advance of the printing and publication of the annual report.
15. For each closed-end Fund, discuss the Fund's earnings press releases, as
well as financial information and earnings guidance provided to analysts
and rating agencies;
16. For each closed-end Fund, review and evaluate annually the performance
of the Committee and the adequacy of this Charter and recommend any
proposed changes to the Charter to the Board for approval.
The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain, as it deems
necessary to carry out its duties, special counsel and other experts or
consultants at the expense of the Fund. The Fund shall provide appropriate
funding, as determined by the Committee, for the Committee to carry out its
duties and its responsibilities, including (a) for compensation to be paid to,
or services to be provided by, the Fund's independent auditors or other public
accounting firm providing audit, review or attest services for the Fund, (b)
for payment of compensation to any outside legal, accounting or other advisors,
counsel or consultants employed by the Committee and (c) for the ordinary
administrative expenses of the Committee. In performing its duties, the
Committee shall consult as it deems appropriate with the members of the Board,
officers and employees of the Fund, the Adviser, the Fund's sub-adviser(s), if
any, the Fund's counsel, counsel to the Independent Board Members and the
Fund's other service providers.
Composition
The Committee shall be composed of each Board member who has been determined
not to be an "interested person," as that term is defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended ("1940 Act"), of the Fund
(the "Independent Board Members"), or such lesser number as the Board of the
Fund may specifically determine and reflect in the Board's minutes, each of
whom shall be financially literate and at least one of whom shall have
accounting or related financial management expertise as determined by the
Fund's Board in its business judgment. Each member of the Committee must also
meet the independence and experience requirements as set forth in Section
303.01(B) of the New York Stock Exchange's Listed Company Manual or as set
forth in Section 121(a) of the American Stock Exchange's listing standards, as
applicable, and the
A-4
independence requirements applicable to investment companies set forth in Rule
10A-3 under the Securities Exchange Act of 1934. The Committee shall elect a
Chairperson, who shall preside over Committee meetings. The Chairperson shall
serve for a term of three years, which term may be renewed from time to time.
Meetings
The Committee shall meet on a regular basis, but not less frequently than
twice a year. Special meetings may also be held upon reasonable notice to the
members of the Committee. An agenda shall be established for each meeting. The
Committee may request any officer or employee of the Fund, the Fund's counsel,
counsel to the Independent Board Members, the Adviser, the Fund's independent
auditors or other interested persons to attend a meeting of the Committee or to
meet with any members of, or consultants to, the Committee. The Committee will
meet periodically with the Fund's independent auditors outside the presence of
the Fund's and the Adviser's officers and employees. The Committee will also
meet periodically with the fund's management outside the presence of the Fund's
independent auditors. Meetings of the Committee may be held in person, by
telephone or by other appropriate means.
One-third of the Committee's members, but not fewer than two members, shall
constitute a quorum. At any meeting of the Committee, the decision of a
majority of the members present and voting shall be determinative as to any
matter submitted to a vote.
Reporting
The Chairperson shall report regularly to the Board on the result of the
Committee's deliberations and make such recommendations as deemed appropriate.
Limits on Role of Committee
The function of the Committee is oversight. The Fund's management is
responsible for (i) the preparation, presentation and integrity of the Fund's
financial statements, (ii) the maintenance of appropriate accounting and
financial reporting principles and policies and (iii) the maintenance of
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The independent auditors are
responsible for planning and carrying out proper audits and reviews. In
fulfilling their responsibilities hereunder, it is recognized that members of
the Committee are not employees of the Fund. As such, it is not the duty or
responsibility of the Committee or its members to conduct "field work" or other
types of auditing or accounting reviews or procedures or to set auditor
independence standards. Each member of the Committee shall be
A-5
entitled to rely on (i) the integrity of those persons and organizations within
and outside the Fund from which it receives information and (ii) the accuracy
of the financial and other information provided to the Committee by such
persons and organizations absent actual knowledge to the contrary (which shall
be promptly reported to the Fund's Board) and (iii) statements made by the
officers and employees of the Fund, the Adviser or other third parties as to
any information technology, internal audit and other non-audit services
provided by the independent auditors to the Fund. The designation of a person
as an "audit committee financial expert," within the meaning of the rules
adopted and implemented under Section 407 of the Sarbanes-Oxley Act of 2002,
shall not impose any greater responsibility or liability on that person than
the responsibility and liability imposed on such person as a member of the
Committee, nor does it decrease the duties and obligations of other Committee
members or the Board.
In carrying out its responsibilities, the Committee's policies and
procedures shall be adapted, as appropriate, in order to best react to a
changing environment.
Amendments
This Charter may be amended by a vote of a majority of the Board members.
A-6
Appendix A
Smith Barney Equity Funds
Smith Barney Social Awareness Fund
Smith Barney Muni Funds
California Money Market Portfolio
Florida Portfolio
Georgia Portfolio
Limited Term Portfolio
National Portfolio
Massachusetts Money Market Portfolio
New York Money Market Portfolio
New York Portfolio
Pennsylvania Portfolio
Smith Barney Municipal Money Market Fund, Inc.
High Income Opportunity Fund Inc.*
Smith Barney Funds, Inc.
Large Cap Value Fund
U.S. Government Securities Fund
Short-Term Investment Grade Bond Fund
Smith Barney Income Funds
Smith Barney Dividend and Income Fund
SB Convertible Fund
Smith Barney Diversified Strategic Income Fund
Smith Barney Exchange Reserve Fund
Smith Barney High Income Fund
Smith Barney Municipal High Income Fund
SB Capital and Income Fund
Smith Barney Total Return Bond Fund
Smith Barney Small Cap Core Fund, Inc.
Intermediate Muni Fund, Inc.*
Smith Barney Money Funds, Inc.
Cash Portfolio
Government Portfolio
* Closed-end Funds. The duties and responsibilities of paragraphs 10, 11, 12,
and 13 and any other provision applicable exclusively to closed-end funds
apply to these funds only.
Exhibit B
CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE CHARTER
Purpose of Committee
The purpose of the Corporate Governance and Nominating Committees (the
"Committees") of the Boards of Directors (the "Boards") of the Smith Barney
Investment Companies listed on Appendix A of Exhibit A (the "Funds") is to
oversee the board governance practices of the Funds, to identify and recommend
individuals to the Boards for nomination as members of the Boards and their
committees (including these Committees) and to establish the agenda for
meetings of the Independent Directors. Each Board of each Fund shall establish
a Committee. The Committees shall report to the Boards on their activities when
appropriate.
Committee Membership
The Committees shall consist solely of two or more members of each Board,
(a) none of whom is an "interested person" of the Funds or their investment
adviser as defined in the Investment Company Act of 1940 (the "Act") or has a
direct or indirect financial interest in the operation of any Fund's plan under
Rule 12b-1 under the Act or in any agreements related to a plan (any such
person, an "Independent Director"), and (b) each of whom the Boards have
determined has no material relationship with the Funds and is otherwise
"independent" under the rules of the New York Stock Exchange, Inc.
The initial members of the Committees shall be appointed by the Boards,
including a majority of the Independent Directors. Candidates to fill
subsequent vacancies in the Committees shall be nominated by the Committees as
set forth below and appointed by the Boards. Members shall serve at the
pleasure of the Boards and for such term or terms as the Boards may determine.
Committee Structure and Operations
Each Committee shall designate one member as its chairperson. In the event
of a tie vote on any issue, the chairperson's vote shall decide the issue. Each
Committee shall meet in person or telephonically as appropriate for the conduct
of its business at times and places determined by the Committee chairperson. In
addition, actions may be taken by unanimous written consent when deemed
necessary or desirable by the Committee.
Committee Duties and Responsibilities
The following are the duties and responsibilities of the Committees:
1. To monitor developments in corporate governance of registered investment
companies with a view to advising the Boards on their
B-1
policies, programs and procedures designed to assure compliance with
legislative, regulatory and self-regulatory requirements applicable to
investment company board governance.
2. To make recommendations to the Boards from time to time as to changes
that the Committees believe to be desirable to the size of the Boards or
any committee thereof.
3. To identify individuals believed to be qualified to become Independent
Directors of the Funds, and to recommend to the Boards the nominees to
stand for election as directors at meetings of stockholders. In the case
of a vacancy to be filled in the office of a director (including a
vacancy created by an increase in the size of a Board), each Committee
shall recommend to the Board an individual to fill such vacancy either
through appointment by the Board or through election by stockholders. In
nominating candidates, each Committee shall take into consideration such
factors as it deems appropriate. The Committees may consider candidates
proposed by management but is not required to do so.
In evaluating a person as a potential nominee to serve as a Director of
the Fund, the Committee should consider among other factors it may deem
relevant:
. whether or not the person is an "interested person" as defined in the
1940 Act and whether the person is otherwise qualified under
applicable laws and regulations to serve as a Director of the Fund;
. whether or not the person has any relationships that might impair his
or her independence, such as any business, financial or family
relationships with Fund management, the investment manager of the
Fund, other Fund service providers or their affiliates;
. whether or not the person serves on boards of, or is otherwise
affiliated with, competing financial service organizations or their
related mutual fund complexes;
. whether or not the person is willing to serve, and willing and able to
commit the time necessary for the performance of the duties of a
Director of the Fund;
. the contribution which the person can make to the Board and the Fund
(or, if the person has previously served as a Director of the Fund,
the contribution which the person made to the Board during his or her
previous term of service), with consideration being given to the
person's business and professional experience, education and such
other factors as the Committee may consider relevant;
. the character and integrity of the person; and
B-2
. whether or not the selection and nomination of the person would be
consistent with the requirements of the Fund's retirement policies.
. While the Committee is solely responsible for the selection and
nomination of Directors. It may consider nominees recommended by Fund
stockholders but is not required to do so. Stockholders who wish to
recommend a nominee should send nominations to the Secretary of the
Fund that include all information relating to such person that is
required to be disclosed in solicitations of proxies for the election
of Directors. The recommendation must be accompanied by a written
consent of the individual to stand for election if nominated by the
Board of Directors and to serve if elected by the stockholders.
4. To develop and recommend to the Boards standards to be applied in making
determinations as to the absence of material relationships between the
Company and a director.
5. To identify Board members qualified to fill vacancies on any committee
of a Board (including the Committee) and to recommend that the Boards
appoint the identified member or members to the respective committee. In
nominating a candidate for committee membership, the Committee shall
take into consideration the factors set forth in the charter of that
committee, if any, as well as any other factors it deems appropriate,
including without limitation the consistency of the candidate's
experience with the goals of the committee and the interplay of the
candidate's experience with the experience of other committee members.
6. Establish agendas for the executive sessions of the Independent
Directors and coordinate with management on agendas for regular meetings
of the Board.
7. Prepare and issue the evaluation required under "Performance Evaluation"
below.
8. Review on a periodic basis director fees and compensation.
9. Any other duties or responsibilities expressly delegated to the
Committees by the Boards from time to time relating to the nomination of
Board and committee members and to corporate governance matters.
Delegation to Subcommittee
A Committee may, in its discretion, delegate all or a portion of its duties
and responsibilities to a subcommittee of the Committee or a committee of the
Board.
Performance Evaluation
The Committees shall produce and provide to the Boards an annual performance
evaluation of the Committee, which evaluation shall compare the performance of
the Committee with the requirements of this charter. The
B-3
performance evaluation shall also recommend to the Boards any improvements to
the Committee charter or to Board governance practices deemed necessary or
desirable by the Committees. The performance evaluation by the Committees shall
be conducted in such manner as the Committees deem appropriate. The report to
the Boards may take the form of an oral report by the chairperson of the
Committees or any other member designated by the Committees to make this report.
Resources and Authority of the Committees
The Committees shall have the resources and authority appropriate to
discharge the duties and responsibilities specified in this Charter, including
the authority to select, retain, terminate, and approve the fees and other
retention terms of special counsel or other experts or consultants, such as
search firms used to identify director candidates, as it deems appropriate,
without seeking approval of the Boards or management. While it is expected
that, in the normal course of business the Committees would consult with the
other Independent Directors in connection with any such retention, the
Committees are not required to do so.
B-4
FORM OF PROXY
HIGH INCOME OPPORTUNITY FUND INC.
125 Broad Street
New York, New York 10004
This Proxy is Solicited on Behalf of the Board of Directors of the Fund
The undersigned hereby appoints R. JAY GERKEN, ROBERT I. FRENKEL, 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
March 19, 2004 at a Meeting of Stockholders to be held on April 29, 2004 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: ______________