CORPORATE HIGH YIELD FUND INC, DEF 14A, 1997-07-24

CORPORATE HIGH YIELD FUND INC
DEF 14A, 1997-07-24

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<PAGE>

As filed with the Securities and Exchange Commission on July 24, 1997

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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 |_| Confidential, for Use of the Commission
|X| Definitive proxy statement Only (as permitted by Rule 14a-6(e)(2))
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

Corporate High Yield Fund, Inc.
P.O. Box 9011
Princeton, New Jersey 08543-9011
- -------------------------------------------------------------------------------
(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| $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.

|_| $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 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 0-11:1

- -------------------------------------------------------------------------------
(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.:

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(3) Filing party:

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(4) Date filed:

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Notes:

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1 Set forth the amount on which the filing fee is calculated and state how it
was determined.

<PAGE>

CORPORATE HIGH YIELD FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

------------------------

NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS

------------------------

SEPTEMBER 11, 1997

TO THE STOCKHOLDERS OF CORPORATE HIGH YIELD FUND, INC.:

Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
'Meeting') of Corporate High Yield Fund, Inc. (the 'Fund') will be held at the
offices of Merrill Lynch Asset Management, L.P. ('MLAM'), 800 Scudders Mill
Road, Plainsboro, New Jersey 08536, on Thursday, September 11, 1997 at 9:00 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 July 15, 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 August 28, 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 III
Secretary

Plainsboro, New Jersey
Dated: July 24, 1997

<PAGE>

PROXY STATEMENT

------------------------

CORPORATE HIGH YIELD FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

------------------------

1997 ANNUAL MEETING OF STOCKHOLDERS

------------------------

SEPTEMBER 11, 1997

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Corporate High Yield Fund, 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 08536, on Thursday, September 11, 1997 at 9:00 A.M. The approximate
mailing date of this Proxy Statement is July 28, 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.

The Board of Directors has fixed the close of business on July 15, 1997 as
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 July 15, 1997, the Fund had outstanding
22,828,609 shares of common stock, par value $.10 per share ('Common Stock'). To
the knowledge of the Fund, as of July 15, 1997, no person is the beneficial
owner of more than five percent of the outstanding shares of Common Stock.

Approval of Items 1 and 2 below will require the affirmative vote of the
holders of a majority of the Fund's stockholders, voting in person or by proxy,
at a meeting in which a quorum is present and duly constituted. 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.

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 six (6)
persons designated as directors to be elected by holders of Common Stock. The
Board of Directors of the Fund knows of no reason why

<PAGE>

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 is set forth as follows:

<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
OF THE FUND
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS DIRECTOR OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE JULY 15, 1997
- ---------------------------------------- ---- ---------------------------------------- -------- -------------
<S> <C> <C> <C> <C>
Joe Grills(1)(2) ....................... 62 Member of the Committee of Investment of 1994 0
183 Soundview Lane Employee Benefit Assets of the
New Canaan, Connecticut 06840 Financial Executives Institute
('CIEBA') since 1986; member of
CIEBA's Executive Committee since 1988
and its Chairman from 1991 to 1992;
Assistant Treasurer of International
Business Machines Incorporated ('IBM')
and Chief Investment Officer of IBM
Retirement Funds from 1986 until 1993;
Member of the Investment Advisory
Committee of the State of New York
Common Retirement Fund; Member of the
Investment Advisory Committee of the
Howard Hughes Medical Institute;
Director, Duke Management Company and
LaSalle Street Fund since 1995;
Director, Kimco Realty Corporation
since January 1997.

Walter Mintz(1)(2) ..................... 68 Special Limited Partner of Cumberland 1993 0
1114 Avenue of the Americas Associates (investment partnership)
New York, New York 10036 since 1982.

Robert S. Salomon, Jr.(1)(2) ........... 60 Principal of STI Management (investment 1996 0
106 Dolphin Cove Quay adviser); Chairman and CEO of Salomon

Stamford, Connecticut 06902 Brothers Asset Management from 1992 to
1995; Chairman of Salomon Brothers
equity mutual funds from 1992 to 1995;
Director of Stock Research and U.S.
Equity Strategist at Salomon Brothers
from 1975 to 1991; Director, Common
Fund and the Norwalk Community
Technical College Foundation.

Melvin R. Seiden(1)(2) ................. 66 Director of Silbanc Properties, Ltd. 1993 0
780 Third Avenue (real estate, investment and consulting)
Suite 2502 since 1987; Chairman and President of
New York, New York 10017 Seiden & de Cuevas, Inc. (private
investment firm) from 1964 to 1987.
</TABLE>

2
<PAGE>

Arthur Zeikel(1)(3) .................... 65 President of Fund Asset Management, L.P. 1993 0
P.O. Box 9011 ('FAM') (which term as used hereunder
Princeton, New Jersey 08543-9011 includes its corporate predecessors)
since 1977; President of MLAM (which
term as used hereunder 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.
('MLFD') 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 or MLAM acts as
investment adviser. See 'Merrill Lynch Investment Company Directorships'

below.

(2) Member of Audit Committee of the Board of Directors.

(3) Interested person, as defined in the Investment Company Act of 1940, as
amended (the 'Investment Company Act'), of the Fund.

Committees and Board of Directors' Meetings. The Board of Directors has a
standing Audit Committee, which consists of the Directors who are not
'interested persons' of the Fund within the meaning of 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 May 31, 1997, the Board of Directors held six
meetings and the Audit Committee held four meetings. Each of the Directors then
in office attended at least 75% of the total number of meetings of the Board of
Directors. Each member of the Audit Committee then in office attended at least
75% of 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 ('NYSE').
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 all of

<PAGE>

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.

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 as a result of the position 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 investment adviser, pays all
compensation of 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 the investment adviser a fee of $2,000 per year plus $500 per
regular 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 a fee of $2,000 per year plus $500 per meeting attended,
together with such Director's out-of-pocket expenses relating to attendance at
such meetings. These fees and expenses aggregated $47,941 for the fiscal year
ended May 31, 1997.

The following table sets forth for the fiscal year ended May 31, 1997,
compensation paid by the Fund to the non-affiliated Directors and, for the
calendar year ending December 31, 1996, the aggregate compensation paid by all
investment companies advised by FAM and its affiliate, MLAM ('FAM/MLAM Advised
Funds'), to the non-affiliated 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 TRUSTEES
- ---------------------------------------- ------------ ------------------------ ------------------------------
<S> <C> <C> <C>
Joe Grills(1)........................... $8,000 None $164,000
Walter Mintz(1)......................... $8,000 None $164,000
Robert S. Salomon, Jr.(1)............... $8,000 None $187,167
Melvin R. Seiden(1)..................... $8,000 None $164,000
Stephen B. Swensrud(1).................. $8,000 None $154,250
</TABLE>

- ------------------

(1) The Directors serve on the boards of FAM/MLAM Advised Funds as follows: Mr.
Grills (19 registered investment companies consisting of 48 portfolios); Mr.
Mintz (18 registered investment companies consisting of 38 portfolios); Mr.
Salomon (18 registered investment companies consisting of 38 portfolios);
Mr. Seiden (18 registered investment companies consisting of 38 portfolios)
and Mr. Swensrud (20 registered investment companies consisting of 49
portfolios).

<PAGE>

Officers of the Fund. The Board of Directors has elected eight 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 MLFD since 1977.
Terry K. Glenn ................................................................ Executive Vice 56 1993
Executive Vice President of FAM and MLAM since 1983; Executive Vice President President
and Director of Princeton Services since 1993; President of MLFD since 1986
and Director thereof since 1991; President of Princeton Administrators, L.P.
since 1988.
Joseph T. Monagle, Jr. ........................................................ Senior Vice 48 1997
Senior Vice President of FAM and MLAM since 1990; Senior Vice President of President
Princeton Services since 1993.
Vincent T. Lathbury, III ...................................................... Vice President 56 1993
Vice President of MLAM since 1982; Portfolio Manager of FAM and MLAM since
1982.
Elizabeth Phillips ............................................................ Vice President 47 1993
Vice President of MLAM since 1990; Vice President, Debt Rating Department,
Standard & Poor's Corporation from 1985 to 1990.
Donald C. Burke ............................................................... Vice President 37 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; Treasurer of MLFD
since 1984 and Vice President since 1981.
Patrick D. Sweeney III ........................................................ Secretary 43 1997
Vice President of MLAM since 1990.
</TABLE>

Stock Ownership. At July 15, 1997, the Directors and officers of the Fund
as a group (13 persons) owned an aggregate of less than 1/4 of 1% of the Common
Stock of the Fund outstanding at such date. At such date, Mr. Zeikel, a Director
of the Fund, and the officers of the Fund owned an aggregate of less than 1% of
the outstanding shares of common stock of ML&Co.

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 D&T 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.

<PAGE>

D&T also acts as independent auditors for ML&Co. and all of its
subsidiaries and for substantially all of the 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 ML&Co. and
the other entities described above 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 the Fund 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 for the Fund.

Broker-dealer firms, including Merrill Lynch, Pierce, Fenner & Smith
('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 NYSE, 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 stockholders 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 the 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 have no effect
on the vote on Item 1 or Item 2.

<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 May 31, 1997 to any stockholder upon request. Such requests
should be directed to Corporate High Yield Fund, Inc., P.O. Box 9011, Princeton,
New Jersey 08543-9011, Attention: Patrick D. Sweeney III, 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 September 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 March 26, 1998.

By Order of the Board of Directors

PATRICK D. SWEENEY III
Secretary

Dated: July 24, 1997

<PAGE>

CORPORATE HIGH YIELD FUND, 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 Ira P.
Shapiro 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 Corporate High Yield Fund, Inc. (the "Fund") held of
record by the undersigned on July 15, 1997 at the annual meeting of stockholders
of the Fund to be held on September 11, 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>

<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 / /
<CAPTION>
<S> <C> <C> <C>
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list
below.)
Joe Grills, Walter Mintz, Robert S. Salomon, Jr., Melvin R. Seiden,
Stephen B. Swensrud, Arthur Zeikel FOR / / AGAINST / / ABSTAIN / /

2. Proposal to ratify the selection of Deloitte & Touche LLP as the
independent auditors of the Fund to serve for the current fiscal
year.

3. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

<CAPTION>
<S> <C>
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 persons.

Dated: ______________________________________, 1997

X _________________________________________________
Signature

X _________________________________________________
Signature, if held jointly
</TABLE>

Please mark boxes / / or /X/ in blue or black ink. Sign, Date and Return
the Proxy Card Promptly Using the Enclosed Envelope.