SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PACHOLDER HIGH YIELD FUND, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PACHOLDER HIGH YIELD FUND, INC.
8044 Montgomery Road, Suite 480
Cincinnati, OH 45236
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2000
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NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
Pacholder High Yield Fund, Inc. (the "Fund") will be held on Tuesday, May 16,
2000, at 11 o'clock a.m., Eastern Time, at Four Points Hotel, 8020 Montgomery
Road, Cincinnati, Ohio, for the following purposes:
1. To elect a Board of four Directors to serve until the next annual
meeting and until their successors are elected and qualified;
2. To ratify or reject the selection of the firm of Deloitte & Touche LLP
as the Fund's independent accountants for the fiscal year ending December 31,
2000; and
3. To consider and act upon such other business as may properly come before
the meeting and any adjournments thereof.
James P. Shanahan, Jr.
Secretary
Shareholders of record as of the close of business on April 11, 2000 are
entitled to notice of and to vote at the meeting.
April 14, 2000
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WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. YOUR
PROMPT RETURN OF THE PROXY WILL HELP ENSURE A QUORUM AT THE MEETING
AND AVOID THE EXPENSE TO THE FUND OF FURTHER SOLICITATION.
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<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
8044 MONTGOMERY ROAD, SUITE 480
CINCINNATI, OH 45236
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 16, 2000
This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Pacholder High Yield Fund,
Inc. (the "Fund") for use at the annual meeting of shareholders to be held on
May 16, 2000, and at any adjournments thereof. If the enclosed proxy is executed
properly and returned in time to be voted at the meeting, the shares represented
will be voted according to the instructions contained therein. Executed proxies
that are unmarked will be voted for the election of all nominees for director
and in favor of all other proposals. A proxy may be revoked at any time prior to
its exercise by filing with the Secretary of the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later date, or by
attending the meeting and voting in person.
The Fund's Annual Report, including audited financial statements for the
fiscal year ended December 31, 1999, has been previously mailed to shareholders.
This proxy statement and the related proxy card will be first mailed to
shareholders on or about April 17, 2000.
The Board of Directors has fixed the close of business on April 11, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof. As of the record date,
the Fund had outstanding 9,504,994 shares of Common Stock, par value $.01 per
share, and 3,500,000 shares of Cumulative Preferred Stock, par value $.01 per
share, comprised of 1,650,000 Series C shares, 800,000 Series D shares, and
1,050,000 Series E shares (collectively, the "Preferred Stock"). Each
outstanding share of the Fund's Common and Preferred Stock is entitled to one
vote. As of the record date, Cede & Co., nominee for The Depository Trust
Company, 55 Water Street, New York, NY 10046, held of record (and not
beneficially) 95.3% of the Fund's outstanding Common Stock. According to
information available to the Fund, as of the record date, no person owned
beneficially 5% or more of the outstanding Common Stock of the Fund, and
Principal Life Insurance Company, 711 High Street, Des Moines, IA 50392, owned
of record all of the Fund's outstanding Preferred Stock. On the record date, the
directors and officers of the Fund as a group owned beneficially 1.1% of the
Fund's outstanding Common Stock.
The presence in person or by proxy of the holders entitled to cast a
majority of all the votes entitled to be cast at the meeting will constitute a
quorum for the transaction of business at the annual meeting. Broker non-votes,
abstentions and withhold-authority votes all count for the purpose of
determining a quorum. If a quorum is present at the meeting but sufficient votes
in favor of one or more proposals are not received, the persons named as proxies
may propose one or more adjournments of the meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of the shares present at the meeting or represented by proxy. The
persons named as proxies will vote in favor of such adjournment if they
determine that adjournment and additional solicitation is reasonable and in the
interests of shareholders of the Fund.
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PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors has nominated the four persons listed below for
election as directors, each to hold office until the next annual meeting of
shareholders and until his successor is elected and qualified. Each of the
nominees is currently serving as a director of the Fund and was elected at the
annual meeting of shareholders held on November 16, 1999.
Each nominee has consented to being named in this proxy statement and has
agreed to serve as a director of the Fund if elected; however, should any
nominee become unable or unwilling to accept nomination or election, the persons
named in the proxy will exercise their voting power in favor of such other
person or persons as the Board of Directors of the Fund may recommend. There are
no family relationships among the nominees.
Under the Fund's charter, the holders of the outstanding shares of Common
Stock, voting as a separate class, are entitled to elect two directors; the
holders of the outstanding shares of Preferred Stock, voting as a separate
class, are entitled to elect two directors; and the holders of the outstanding
shares of Common Stock and Preferred Stock, voting together as a single class,
are entitled to elect the remaining directors of the Fund. The Board of
Directors has nominated Messrs. Grant and Morgan for election by holders of the
Common Stock and Messrs. Williamson and Woodard for election by the holders of
the Preferred Stock. The directors will be elected by a plurality of the votes
cast at the meeting, provided that a quorum is present. Withhold-authority votes
will not be considered votes cast for this purpose.
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YEAR SHARES
FIRST BENEFICIALLY
ELECTED PRINCIPAL OWNED AS
POSITION WITH AS A OCCUPATION DURING OF
NAME AGE THE FUND DIRECTOR PAST FIVE YEARS 3/31/00(1)
- ---- --- -------- -------- --------------- ----------
William J. 45 Chairman of 1988 President, 45,945(2)
Morgan* the Board, Secretary and
Treasurer and Director, Pacholder
Director Associates, Inc.
Director, ICO, Inc.
(oil field
services); and
Smith-Corona
Corporation (office
equipment
manufacturer).
Daniel A. Grant 55 Director 1992 President, Utility 2,259
Management Services
(business
consulting).
John F. 61 Director 1991 Chairman and 5,600
Williamson President,
Williamson
Associates, Inc.
(investment
adviser) (since
January 1997); and
Executive Vice
President and Chief
Financial Officer,
Asset Allocation
Concepts, Inc.
(investment
adviser) (1995-
1996). Director,
ICO, Inc. (oil
field services).
George D. 53 Director 1995 Closely Held 10,900
Woodard Business
Specialist, Henry &
Horne, P.L.C.
(certified public
accountants)
(since March 2000
and 1996-1999);
Realtor with A.S.K.
Realty (August
1999-February 2000);
Principal, George D.
Woodard, CPA
(1995-1996); and
Vice President,
Rider Kenley &
Associates (certified
public accountants)
(1994-1995).
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* Mr. Morgan is considered an "interested person" of the Fund (as defined in
the Investment Company Act of 1940) because of his affiliation with the
Fund's investment adviser, which is an affiliate of Pacholder Associates,
Inc.
(1) Each nominee owns less than 1% of the outstanding Common Stock.
(2) Includes 14,221 shares owned by a family company of which Mr. Morgan is an
officer, director and minority shareholder.
THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF THE NOMINEES LISTED ABOVE.
3
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Mr. Morgan is a manager of Pacholder & Company, LLC, the Fund's investment
adviser (the "Adviser"), and an officer, director and shareholder of Pacholder
Associates, Inc., a member of the Adviser and affiliate of the Fund's
administrator.
Directors and officers of the Fund, who are employed by the Adviser or a
corporate affiliate of the Adviser, serve without compensation from the Fund.
The Fund pays each director who is not an employee of the Adviser or any
corporate affiliate of the Adviser an annual fee of $10,000 plus $1,500 or
$1,000 for each meeting of the Board of Directors attended in person or by
telephone, respectively, and reimburses directors for travel and other
out-of-pocket expenses incurred by them in connection with attending in-person
meetings. The following table sets forth the information concerning the
compensation paid by the Fund to directors during the fiscal year ended December
31, 1999.
TOTAL COMPENSATION
NAME OF DIRECTOR FROM THE FUND (1)
---------------- -----------------
William J. Morgan*................ None
Daniel A. Grant................... $18,000
John F. Williamson................ $18,000
George D. Woodard................. $18,000
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(1) The Fund does not offer any pension or retirement plan benefits to its
directors. The Fund is not part of a fund complex.
* Mr. Morgan is considered an "interested person" of the Fund (as defined in
the Investment Company Act of 1940) because of his affiliation with the
Fund's investment adviser, which is an affiliate of Pacholder Associates,
Inc.
The Board of Directors has an Audit Committee, which is responsible for
conferring with the Fund's independent accountants, reviewing the scope and
procedures of the year-end audit, reviewing annual financial statements and
recommending the selection of the Fund's independent accountants. In addition,
the Audit Committee may address questions arising with respect to the valuation
of certain securities in the Fund's portfolio. The members of the Audit
Committee are Daniel A. Grant, John F. Williamson and George D. Woodard. The
Board of Directors does not have a Nominating Committee.
During the fiscal year ended December 31, 1999, the Board of Directors met
six times. No director attended fewer than 75% of the board meetings. The Audit
Committee held two meetings during 1999 at which all committee members were in
attendance.
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Information regarding the Fund's other officers is set forth below. The
address of each is 8044 Montgomery Road, Suite 480, Cincinnati, OH 45236.
YEAR SHARES
FIRST BENEFICIALLY
ELECTED PRINCIPAL OWNED AS
POSITION WITH AS AN OCCUPATION DURING OF
NAME AGE THE FUND OFFICER PAST FIVE YEARS 3/31/00(1)
- ---- --- -------- ------- --------------- ----------
James P. 39 Secretary 1988 Executive Vice 24,000
Shanahan, Jr. President and
General Counsel,
Pacholder
Associates, Inc.
Anthony L. 34 President and 1994 Executive Vice 6,422
Longi, Jr. Assistant President,
Treasurer Pacholder
Associates, Inc.
James E. Gibson 35 Senior Vice 1995 Executive Vice 7,846
President President,
Pacholder
Associates, Inc.
Mark H. Prenger 29 Assistant 1995 Senior Vice 1,435
Treasurer President,
Pacholder
Associates, Inc.
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(1) Each person owns less than 1% of the outstanding Common Stock.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
Based on information submitted to the Fund, all directors and officers of
the Fund filed on a timely basis with the Securities and Exchange Commission the
reports of beneficial ownership of Fund shares required by Section 16(a) of the
Securities Exchange Act of 1934.
PROPOSAL 2: RATIFICATION OF SELECTION OF THE FUND'S
INDEPENDENT ACCOUNTANTS
Shareholders are requested to ratify the selection by the Board of
Directors, including all of the directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund, of the firm of Deloitte & Touche LLP as
the Fund's independent accountants for the fiscal year ending December 31, 2000.
In addition to the normal audit services, Deloitte & Touche LLP provides
services in connection with the preparation and review of federal and state tax
returns for the Fund. Deloitte & Touche LLP has served as the Fund's independent
accountants since 1988 and has advised the Fund that it has no material direct
or indirect financial interest in the Fund or its affiliates. The Fund's Audit
Committee recommended that Deloitte & Touche LLP be selected as the Fund's
independent accountants for the current fiscal year. The employment is
conditioned on the right of the Fund to terminate the employment forthwith
without any penalty. A representative of Deloitte & Touche LLP is not expected
to attend the annual meeting of shareholders.
Ratification of the selection of the firm of Deloitte & Touche LLP
requires the affirmative vote of a majority of all the votes cast at the
meeting. Abstentions and broker non-votes will not be considered votes cast for
this purpose.
The Board of Directors recommends that shareholders vote FOR ratification
of the selection of Deloitte & Touche LLP. If the selection of Deloitte & Touche
LLP is not ratified by shareholders, the firm will not serve as the Fund's
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independent accountants for the fiscal year ending December 31, 2000, and the
Board of Directors will be required to select new independent accountants.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
Pacholder & Company, LLC (the "Adviser") serves as the Fund's investment
adviser. The Adviser is an affiliate of Pacholder Associates, Inc., an
investment advisory firm. The principal business address of the Adviser is 8044
Montgomery Road, Suite 480, Cincinnati, OH 45236. The Adviser makes and
implements investment decisions and supervises all aspects of the Fund's
operations. It also provides a continuous investment program for the Fund,
including investment research and management with respect to all securities and
investments of the Fund.
ADMINISTRATIVE AND ACCOUNTING SERVICES
Kenwood Administrative Management, Inc. (the "Administrator"), 8044
Montgomery Road, Suite 480, Cincinnati, OH 45236, an affiliate of Pacholder
Associates, Inc., serves as administrator of the Fund. The Administrator
monitors the Fund's compliance with various regulatory requirements, coordinates
and monitors the activities of the Fund's other service providers, handles
various public and shareholder relations matters, and assists in the preparation
of financial and other reports.
Pacholder Associates, Inc., an affiliate of the Adviser, is responsible
for (i) accounting relating the Fund and its investment transactions, (ii)
determining the net asset value per share of the Fund, (iii) maintaining the
Fund's books of account, and (iv) monitoring, in conjunction with the Fund's
custodian, all corporate actions, including dividends and distributions and
stock splits, in respect of securities held in the Fund's portfolio.
SOLICITATION OF PROXIES
In addition to solicitation by mail, solicitations on behalf of the Board
of Directors may be made by personal interview, telegram and telephone. Certain
officers and regular agents of the Fund, who will receive no additional
compensation for their services, may use their efforts, by telephone or
otherwise, to request the return of proxies. The costs of preparing, assembling,
mailing and transmitting proxy materials and of soliciting proxies on behalf of
the Board of Directors will be borne by the Fund. The Fund will reimburse, upon
request, broker-dealers and other custodians, nominees and fiduciaries for their
reasonable expenses of sending proxy soliciting material to beneficial owners.
OTHER BUSINESS
The management of the Fund knows of no other business that may come before
the annual meeting. If any additional matters are properly presented at the
meeting, the persons named in the enclosed proxy, or their substitutes, will
vote such proxy in accordance with their best judgment on such matters.
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SHAREHOLDER PROPOSALS
If a shareholder wishes to present a proposal for inclusion in the proxy
statement for the next annual meeting of shareholders, the proposal must be
submitted in writing and received by the Secretary of the Fund within a
reasonable time before the Fund begins to print and mail its proxy materials.
ANNUAL REPORT
The Fund's Annual Report for the fiscal year ended December 31, 1999 may
be obtained without charge by writing to Pacholder High Yield Fund, Inc., 8044
Montgomery Road, Suite 480, Cincinnati, OH 45236, or by calling the Fund toll
free at 1-800-637-7549.
7
<PAGE>
APPENDIX A
PACHOLDER HIGH YIELD FUND, INC.
COMMON STOCK, $.01 PAR VALUE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William J. Morgan, Anthony L. Longi, Jr. and
James P. Shanahan, Jr., and each of them, as proxies with power of substitution,
and hereby authorizes each of them to represent and to vote as designated below
on this card, all the shares of Common Stock, par value $.01 per share, of
Pacholder High Yield Fund, Inc. which the undersigned is entitled to vote at the
annual meeting of shareholders to be held on May 16, 2000 and at any
adjournments thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is given, this proxy will be
voted "FOR" all proposals. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the meeting.
|X| PLEASE MARK VOTES AS IN THIS EXAMPLE
PLEASE BE SURE TO SIGN AND DATE THIS PROXY
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
PACHOLDER HIGH YIELD FUND, INC. 2000 ANNUAL MEETING
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS: 1-WILLIAM J. MORGAN 2-DANIEL A. GRANT /_/ FOR all nominees /_/ WITHHOLD AUTHORITY
listed to the left (except to vote for all nominees
as specified below). listed to the left
(Instructions: To withhold authority to vote for any indicated nominee, Box
write the number(s) of the nominee(s) in the box provided to the right). [---------------------------------]
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent /_/ FOR /_/ AGAINST /_/ ABSTAIN
accountants for the fiscal year ending December 31, 2000.
Check appropriate box
Indicate changes below: Date _________________ RECORD DATE SHARES
Address Change? /_/ Name Change? /_/
Box
[---------------------------------]
Signature(s) In Box
Please sign exactly as your name
appears on this proxy. An executor,
administrator, trustee or guardian
should sign as such. If more than one
trustee, all should sign. ALL JOINT
OWNERS MUST SIGN. If a corporation,
please provide the full name of the
corporation and the name of the
authorized officer signing on its
behalf.
</TABLE>
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PACHOLDER HIGH YIELD FUND, INC.
SERIES C, SERIES D AND SERIES E
CUMULATIVE PREFERRED STOCK, $.01 PAR VALUE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William J. Morgan, Anthony L. Longi, Jr. and
James P. Shanahan, Jr., and each of them, as proxies with power of substitution,
and hereby authorizes each of them to represent and to vote as designated below,
all the shares of Series C, Series D and Series E Cumulative Preferred Stock,
par value $.01 per share, of Pacholder High Yield Fund, Inc. which the
undersigned is entitled to vote at the annual meeting of shareholders to be held
on May 16, 2000 and at any adjournments thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is given, this proxy will be
voted "FOR" all proposals. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the meeting.
|X| PLEASE MARK VOTES AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1.) Election of Directors. With For All 2.) To ratify the selection of Deloitte For Against Abstain
For hold Except & Touche LLP as the Fund's independent |_| |_| |_|
|_| |_| |_| accountants for the fiscal year ending
December 31, 2000.
</TABLE>
John F. Williamson
George D. Woodard
Instruction: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through the nominee's name. Your shares
will be voted for the remaining nominee.
<PAGE>
Signature Page to Proxy with respect to the Annual Meeting of Shareholders
on May 16, 2000 of PACHOLDER HIGH YIELD FUND, INC.
PRINCIPAL LIFE INSURANCE COMPANY, as holder of Cumulative
Preferred Stock, Series C, Series D and Series E.
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By: ______________________________
Name:
Title:
PRINCIPAL LIFE INSURANCE COMPANY, ON BEHALF OF ONE OR
MORE SEPARATE ACCOUNTS, as holder of Cumulative
Preferred Stock, Series C.
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By: ______________________________
Name:
Title:
Dated: ______________________
