<PAGE>
As filed with the Securities and Exchange Commission on June 6, 1997
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 / / Confidential, for Use of
the Commission Only
/x/ Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SENIOR HIGH INCOME PORTFOLIO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SENIOR HIGH INCOME PORTFOLIO, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
------------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
JULY 21, 1997
------------------
TO THE STOCKHOLDERS OF SENIOR HIGH INCOME PORTFOLIO, INC.:
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
'Meeting') of Senior High Income Portfolio, Inc. (the 'Fund') will be held at
the offices of Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road,
Plainsboro, New Jersey, on Monday, July 21, 1997 at 9:30 A.M. for the following
purposes:
(1) To elect a Board of Directors to serve for the ensuing year;
(2) To consider and act upon a proposal to ratify the selection of
Deloitte & Touche LLP to serve as independent auditors of the Fund for its
current fiscal year; and
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 23, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting or any adjournment thereof.
A complete list of the stockholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any stockholder of the
Fund for any purpose germane to the Meeting during ordinary business hours from
and after July 7, 1997 at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey. You are cordially invited to attend the Meeting.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO
COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED FOR THIS PURPOSE. The enclosed proxy is being solicited on
behalf of the Board of Directors of the Fund.
By Order of the Board of Directors
PATRICK D. SWEENEY
Secretary
Plainsboro, New Jersey
Dated: June 6, 1997
<PAGE>
PROXY STATEMENT
------------------------
SENIOR HIGH INCOME PORTFOLIO, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
------------------------
1997 ANNUAL MEETING OF STOCKHOLDERS
JULY 21, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Senior High Income Portfolio,
Inc., a Maryland corporation (the 'Fund'), to be voted at the 1997 Annual
Meeting of Stockholders of the Fund (the 'Meeting'), to be held at the offices
of Merrill Lynch Asset Management, L.P. ('MLAM'), 800 Scudders Mill Road,
Plainsboro, New Jersey, on Monday, July 21, 1997 at 9:30 A.M. The approximate
mailing date of this Proxy Statement is June 6, 1997.
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, proxies
will be voted for the election of the Board of Directors to serve for the
ensuing year and for the ratification of the selection of independent auditors
to serve for the Fund's current fiscal year. Any proxy may be revoked at any
time prior to the exercise thereof 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 of Directors has fixed the close of business on May 23, 1997 as
the record date (the 'Record Date') for the determination of stockholders
entitled to notice of and to vote at the Meeting and at any adjournment thereof.
Stockholders on the Record Date will be entitled to one vote for each share
held, with no shares having cumulative voting rights. As of the Record Date, the
Fund had outstanding 51,958,231 shares of common stock, par value $.10 per share
('Common Stock'). To the knowledge of the Fund, as of the Record Date, no person
is the beneficial owner of more than five percent of its outstanding shares of
Common Stock.
The Board of Directors of the Fund knows of no business other than that
mentioned in Items 1 and 2 of the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
<PAGE>
ITEM 1. ELECTION OF DIRECTORS
At the Meeting, the Board of Directors will be elected to serve until the
next Annual Meeting of Stockholders and until their successors are elected and
qualified. It is intended that all properly executed proxies will be voted
(unless such authority has been withheld in the proxy) in favor of the persons
designated as Directors to be elected by holders of Common Stock.
The Board of Directors of the Fund knows of no reason why any of these
nominees will be unable to serve, but in the event of any such unavailability,
the proxies received will be voted for such substitute nominee or nominees as
the Board of Directors may recommend.
Certain information concerning the nominees, including their designated
classes, is set forth as follows:
<TABLE>
<CAPTION>
SHARES
OF COMMON STOCK
OF THE FUND
BENEFICIALLY
PRINCIPAL OCCUPATIONS DURING PAST DIRECTOR OWNED AT
NAME AND ADDRESS AGE FIVE YEARS AND PUBLIC DIRECTORSHIP(1) SINCE THE RECORD DATE
- --------------------------------------- ---- --------------------------------------- -------- ---------------
<S> <C> <C> <C> <C>
Ronald W. Forbes(1)(2) ................ 56 Professor of Finance, School of 1993 345.9529
1400 Washington Avenue Business, State University of New York
Albany, New York 12222 at Albany, since 1989.
Cynthia A. Montgomery(1)(2) ........... 44 Professor, Harvard Business School 1993 0
Harvard Business School since 1989; Associate Professor, J.L.
Soldiers Field Road Kellogg Graduate School of Management,
Boston, Massachusetts 02163 Northwestern University from 1985 to
1989; Assistant Professor, Graduate
School of Business Administration, The
University of Michigan from 1979 to
1985; Director, UNUM Corporation since
1990 and Director of Newell Co. since
1995.
Charles C. Reilly(1)(2) ............... 65 Self-employed financial consultant 1993 16,184.9878
9 Hampton Harbor Road since 1990; President and Chief
Hampton Bays, New York 11946 Investment Officer of Verus Capital,
Inc. from 1979 to 1990; Senior Vice
President of Arnhold and S.
Bleichroeder, Inc. from 1973 to 1990;
Adjunct Professor, Columbia University
Graduate School of Business from 1990
to 1991; Adjunct Professor, Wharton
School, The University of Pennsylvania
from 1989 to 1990; Partner, Small
Cities Cable Television since 1986.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES
OF COMMON STOCK
OF THE FUND
BENEFICIALLY
PRINCIPAL OCCUPATIONS DURING PAST DIRECTOR OWNED AT
NAME AND ADDRESS AGE FIVE YEARS AND PUBLIC DIRECTORSHIP(1) SINCE THE RECORD DATE
- --------------------------------------- ---- --------------------------------------- -------- ---------------
<S> <C> <C> <C> <C>
Kevin A. Ryan(1)(2) ................... 64 Founder and current Director of The 1993 882.8065
127 Commonwealth Avenue Boston University Center for the
Chestnut Hill, Advancement of Ethics and Character;
Massachusetts 02167 Professor of Education at Boston
University since 1982; formerly taught
on the faculties of The University of
Chicago, Stanford University and Ohio
State University.
Richard R. West(1)(2) ................. 59 Professor of Finance since 1984, and 1993 28,008
Box 604 Dean from 1984 to 1993, and currently
Genoa, Nevada 89411 Dean Emeritus of New York University
Leonard N. Stern School Business
Administration; Director of Bowne &
Co., Inc. (financial printers),
Vornado, Inc. (real estate holding
company) and Alexander's Inc. (real
estate company).
Arthur Zeikel(1)* ..................... 65 President of Fund Asset Management, 1993 0
P.O. Box 9011 L.P. ('FAM') (which term as used herein
Princeton, New Jersey includes its corporate predecessors)
08543-9011 since 1977; President of MLAM (which
term as used herein includes its
corporate predecessors) since 1977;
President and Director of Princeton
Services, Inc. ('Princeton Services')
since 1993; Executive Vice President of
Merrill Lynch & Co., Inc. ('ML & Co.')
since 1990; Director of Merrill Lynch
Funds Distributor, Inc. (the
'Distributor') since 1977.
</TABLE>
- ------------------
(1) Each of the nominees is a director, trustee or member of an advisory board
of certain other investment companies for which FAM, MLAM or their
affiliates act as investment adviser. See 'Compensation of Directors' below.
(2) Member of Audit Committee of the Board of Directors.
* Interested person, as defined in the Investment Company Act of 1940, as
amended, of the Fund.
3
<PAGE>
Committee and Board of Directors Meetings. The Board of Directors has a
standing Audit Committee, which consists of Directors who are not 'interested
persons' of the Fund within the meaning of the Investment Company Act of 1940,
as amended (the 'Investment Company Act'). The principal purpose of the Audit
Committee is to review the scope of the annual audit conducted by the Fund's
independent auditors and the evaluation by such auditors of the accounting
procedures followed by the Fund. The non-interested Directors have retained
independent legal counsel to assist them in connection with these duties. The
Board of Directors does not have a nominating committee.
During the fiscal year ended February 28, 1997, the Board of Directors held
six meetings and the Audit Committee held four meetings. All of the Directors
attended at least 75% of the total number of meetings of the Board of Directors
and, if a member, the total number of meetings of the Audit Committee held
during such period.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the 'Exchange
Act'), requires the Fund's officers, directors and persons who own more than ten
percent of a registered class of the Fund's equity securities, to file reports
of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission ('SEC') and the New York Stock Exchange. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Fund with copies of all Forms 3, 4 and 5 they file.
Based solely on the Fund's review of the copies of such forms, and
amendments thereto, furnished to it during or with respect to its most recent
fiscal year, and written representations from certain reporting persons that
they were not required to file Form 5 with respect to the most recent fiscal
year, the Fund believes that, except as noted below, all of its officers,
directors, greater than ten percent beneficial owners and other persons subject
to Section 16 of the Exchange Act because of the requirements of Section 30 of
the Investment Company Act, i.e., any advisory board member, investment adviser
or affiliated person of the Fund's investment adviser, have complied with all
filing requirements applicable to them with respect to transactions during the
Fund's most recent fiscal year. However, Mr. West inadvertently failed to file a
timely report to disclose a purchase of shares during the Fund's fiscal year
ended February 29, 1996 and Mr. Forbes inadvertently failed to file a timely
report to disclose reinvestment of Fund dividends during the Fund's fiscal year
ended February 28, 1997. Both transactions were accurately reflected in
subsequent filings.
Interested Persons. The Fund considers Mr. Zeikel to be an 'interested
person' of the Fund within the meaning of Section 2(a)(19) of the Investment
Company Act because of the positions he holds with FAM and its affiliates. Mr.
Zeikel is the President of the Fund and the President of FAM and MLAM.
Compensation of Directors. FAM, the Fund's investment adviser, pays all
compensation to all officers of the Fund and all Directors of the Fund who are
affiliated with ML & Co. or its subsidiaries. The Fund pays each Director not
affiliated with FAM a fee of $2,000 per year plus $400 per meeting attended,
together with such Director's actual out-of-pocket expenses relating to
attendance at meetings. The Fund also pays each member of its Audit Committee,
which consists of all of the non-interested Directors, a fee of $2,000 per year,
together with such Director's out-of-pocket expenses relating to attendance at
meetings. The Chairman of the Audit Committee receives an additional annual fee
of $1,000. These fees and expenses aggregated $22,591 for the fiscal year ended
February 28, 1997.
The following table sets forth for the fiscal year ended February 28, 1997
compensation paid by the Fund to the non-interested Directors and, for the
calendar year ended December 31, 1996, the aggregate compensation
4
<PAGE>
paid by all investment companies advised by FAM, MLAM or their affiliates
('FAM/MLAM Advised Funds'), to the non-interested Directors.
<TABLE>
<CAPTION>
PENSION OR RETIREMENT AGGREGATE COMPENSATION FROM
COMPENSATION BENEFITS ACCRUED AS PART FUND AND FAM/MLAM
NAME OF DIRECTOR FROM FUND OF FUND EXPENSES ADVISED FUNDS PAID TO DIRECTORS
- -------------------------------------- ------------ ------------------------ -------------------------------
<S> <C> <C> <C>
Ronald W. Forbes(1)................... $4,600 None $ 142,500
Cynthia A. Montgomery(1).............. $4,600 None $ 142,500
Charles C. Reilly(1).................. $5,600 None $ 293,833
Kevin A. Ryan(1)...................... $4,600 None $ 142,500
Richard R. West(1).................... $4,600 None $ 269,833
</TABLE>
- ------------------
(1) The Directors serve on the Boards of other FAM/MLAM Advised Funds as
follows: Mr. Forbes (25 registered investment companies consisting of 38
portfolios); Ms. Montgomery (25 registered investment companies consisting
of 38 portfolios); Mr. Reilly (43 registered investment companies consisting
of 56 portfolios); Mr. Ryan (25 registered investment companies consisting
of 38 portfolios); and Mr. West (52 registered investment companies
consisting of 65 portfolios).
Officers of the Fund. The Board of Directors has elected seven officers of
the Fund. The following sets forth information concerning each of these
officers:
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
- ---------------------------------------------------------------------- ------------------------ --- -------
<S> <C> <C> <C>
Arthur Zeikel ........................................................ President 65 1993
President of FAM since 1977; President of MLAM since 1977; President
and Director of Princeton Services since 1993; Executive Vice
President of ML&Co. since 1990; Director of the Distributor since
1977.
Terry K. Glenn ....................................................... Executive Vice President 56 1993
Executive Vice President of FAM and MLAM since 1983; Executive Vice
President and Director of Princeton Services since 1993; President
of the Distributor since 1986 and Director thereof since 1991;
President of Princeton Administrators, L.P. since 1988.
Joseph T. Monagle, Jr. .............................................. Senior Vice President 48 1996
Senior Vice President of FAM and MLAM since 1990; Senior Vice
President of Princeton Services since 1993.
R. Douglas Henderson ................................................. Vice President 39 1993
Vice President of MLAM and FAM since 1989.
Donald C. Burke ...................................................... Vice President 36 1993
Vice President and Director of Taxation of MLAM since 1990.
Gerald M. Richard .................................................... Treasurer 48 1993
Senior Vice President and Treasurer of FAM and MLAM since 1984;
Senior Vice President and Treasurer of Princeton Services since
1993; Vice President of the Distributor since 1981; Treasurer since
1984.
Patrick D. Sweeney ................................................... Secretary 43 1993
Vice President of MLAM since 1990.
</TABLE>
Stock Ownership. At the Record Date, the Directors and officers of the
Fund as a group (12 persons) owned an aggregate of less than 1% of the Common
Stock of the Fund outstanding at such date. At such date, Mr. Zeikel, an officer
and a Director of the Fund, and the other officers of the Fund owned an
aggregate of less than 1% of the outstanding shares of common stock of ML & Co.
5
<PAGE>
ITEM 2. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected the firm of Deloitte &
Touche LLP ('D&T'), independent auditors, to examine the financial statements of
the Fund for the current fiscal year. The Fund knows of no direct or indirect
financial interest of such firm in the Fund. Such appointment is subject to
ratification or rejection by the stockholders of the Fund. Unless a contrary
specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of such auditors.
D&T also acts as independent auditors for ML & Co. and all of its
subsidiaries and for most other investment companies for which FAM or MLAM acts
as investment adviser. The fees received by D&T from these other entities are
substantially greater, in the aggregate, than the total fees received by it from
the Fund. The Board of Directors of the Fund considered the fact that D&T has
been retained as the independent auditors for such other entities in its
evaluation of the independence of D&T with respect to the Fund.
Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to make a statement if they so desire and to respond to
questions from stockholders.
ADDITIONAL INFORMATION
The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund. The
Fund will reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the shares of
the Fund. The Fund may also hire proxy solicitors at the expense of the Fund.
In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of each class of the Fund's securities entitled to vote at the
Meeting, present in person or by proxy), supplementary solicitation may be made
by mail, telephone, telegraph or personal interview by officers of the Fund. It
is anticipated that the cost of such supplementary solicitation, if any, will be
nominal.
All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meeting in accordance with
the directions on the proxies. If no direction is indicated, the shares will be
voted 'FOR' the Director nominees and 'FOR' the ratification of D&T as
independent auditors.
Broker-dealer firms, including Merrill Lynch, Pierce, Fenner & Smith,
Incorporated ('MLPF&S'), holding Fund shares in 'street name' for the benefit of
their customers and clients will request the instructions of such customers and
clients on how to vote their shares on each Item before the Meeting. The Fund
understands that, under the rules of the New York Stock Exchange, such
broker-dealer firms may, without instructions from their customers and clients,
grant authority to the proxies designated to vote on the election of Directors
(Item 1) and ratification of the selection of independent auditors (Item 2) if
no instructions have been received prior to the date specified in the
broker-dealer firm's request for voting instructions. Accordingly, the Fund will
include shares held of record by broker-dealers as to which such authority has
been granted in its tabulation of the total number of votes present for purposes
of determining whether the necessary quorum of shareholders exists. Proxies
which are returned but which are marked 'abstain' or on which a broker-dealer
has declined to vote on any proposal ('broker non-votes') will be counted as
present for purposes of a quorum. MLPF&S has advised that it intends to exercise
discretion over shares held in its name for which no instructions are received
by voting such shares in the same proportion as it has voted shares for which it
has received instructions. Abstentions and broker non-votes will not be counted
as votes cast. Abstentions and broker non-votes, therefore, will not have an
effect on the vote on Item 1 or Item 2.
6
<PAGE>
ADDRESS OF INVESTMENT ADVISER
The principal office of FAM is located at 800 Scudders Mill Road,
Plainsboro, New Jersey 08536.
ANNUAL REPORT DELIVERY
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR THE
FISCAL YEAR ENDED FEBRUARY 28, 1997 TO ANY STOCKHOLDER UPON REQUEST. Such
requests should be directed to Senior High Income Portfolio, Inc., P.O. Box
9011, Princeton, New Jersey 08543-9011, Attention: Patrick D. Sweeney,
Secretary, or to 1-800-456-4587 ext. 123.
STOCKHOLDER PROPOSALS
If a stockholder intends to present a proposal at the 1998 Annual Meeting
of Stockholders of the Fund, which is anticipated to be held in July 1998, and
desires to have the proposal included in the Fund's proxy statement and form of
proxy for that meeting, the stockholder must deliver the proposal to the offices
of the Fund by February 6, 1998.
By Order of the Board of Directors
PATRICK D. SWEENEY
Secretary
Dated: June 6, 1997
7
<PAGE>
SENIOR HIGH INCOME PORTFOLIO, INC.
P.O. Box 9011
PRINCETON, NEW JERSEY 08543-9011
P R O X Y
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and
Patrick D. Sweeney as proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse hereof, all the common stock of Senior High Income Portfolio, Inc. (the
"Fund") held of record by the undersigned on May 23, 1997 at the annual meeting
of the stockholders of the Fund to be held on July 21, 1997 or any adjournment
thereof.
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 PROPOSALS 1 AND 2.
(Continued and to be signed on the reverse side)
<PAGE>
Please mark boxes /x/ or /x/ in blue or black ink.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
RONALD W. FORBES, CYNTHIA A. MONTGOMERY, CHARLES C. REILLY, KEVIN A. RYAN,
RICHARD R. WEST, ARTHUR ZEIKEL
2. Proposal to ratify the selection of Deloitte & Touche LLP as the independent
auditors of the Fund to serve for the current fiscal year.
FOR / / AGAINST / / ABSTAIN / /
3. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney or as
executor, administrator, 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.
Dated: , 1997
------------------------
X
-----------------------------------
Signature
X
-----------------------------------
Signature, if held jointly
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
2
