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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1999 |
SCHEDULE 14A |
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 (as permitted by Rule 14a-6(e)(2)) |
[X] Definitive Proxy Statement |
[ ] Definitive Additional Materials |
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
Corporate High Yield Fund
II, 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) (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 |
(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 |
Notes: |
1 | Set forth the amount on which the filing fee is calculated and state how it was determined. |
|
CORPORATE HIGH YIELD FUND II, INC. |
P.O. Box 9011 |
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS |
December 15, 1999 |
TO THE STOCKHOLDERS OF CORPORATE HIGH YIELD FUND II, INC.: |
Notice is hereby given that the Annual Meeting of Stockholders (the Meeting) of Corporate High Yield Fund II, Inc. (the Fund) will be held at the offices of Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road, Plainsboro, New Jersey 08536, on Wednesday, December 15, 1999 at 8:15 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 October 20, 1999 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 December 1, 1999, 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 |
WILLIAM E. ZITELLI
|
Plainsboro, New Jersey |
|
PROXY STATEMENT |
CORPORATE HIGH YIELD FUND II, INC. |
P.O. Box 9011 |
1999 ANNUAL MEETING OF STOCKHOLDERS |
December 15, 1999 |
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 II, Inc., a Maryland corporation (the Fund), to be voted at the 1999 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 Wednesday, December 15, 1999 at 8:15 a.m. The approximate mailing date of this Proxy Statement is November 2, 1999. |
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 Funds 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 Funds address indicated above or by voting in person at the Meeting. |
The Board of Directors has fixed the close of business on October 20, 1999, 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 9,287,994 shares of common stock, par value $.10 per share (Common Stock). To the knowledge of the Fund, as of the Record Date, no person was the beneficial owner of more than five percent of the 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. |
|
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 seven (7) 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 is set forth as follows: |
Name and Address
of Nominee
|
Age
|
Principal
Occupation During Past Five Years and Public Directorships (1) |
Director Since |
Shares of Common Stock of the Fund Beneficially Owned at the Record Date |
||||
---|---|---|---|---|---|---|---|---|
Terry K. Glenn(1)* |
59
|
Executive Vice President of MLAM |
1999
|
-0-
|
||||
PO
Box 9011 Princeton, New Jersey 08543-9011 |
and Fund Asset Management, L.P. (FAM) (which terms as used herein include their corporate predecessors) since 1983; Executive Vice President and Director of Princeton Services, Inc. (Princeton Services) since 1993; President of Princeton Funds Distributor, Inc. (PFD) since 1986 and Director thereof since 1991; President of Princeton Administrators, L.P. since 1988. | |||||||
Joe Grills(1)(2) |
64
|
Member
of the Committee of |
1994
|
-0-
|
||||
PO Box 98 Rapidan, Virginia 22733 |
Investment
of Employee Benefit Assets of the Financial Executives Institute (CIEBA)
since 1986; Member of CIEBAs Executive Committee since 1988 and its
Chairman from 1991 to 1992; Assistant Treasurer of International Business
Machines Corporation (IBM) and Chief Investment Officer of IBM
Retirement Funds from 1986 to 1993; Member of the Investment Advisory Committees
of the State of New York Common Retirement Fund and the Howard |
2 |
Name and Address
of Nominee
|
Age
|
Principal
Occupation During Past Five Years and Public Directorships (1) |
Director Since |
Shares of Common Stock of the Fund Beneficially Owned at the Record Date |
||||
---|---|---|---|---|---|---|---|---|
Joe Grills, contd | Hughes Medical Institute
since 1997; Director, Duke Management Company since 1992 and Vice Chairman
thereof since 1998; Director, LaSalle Street Fund since 1995; Director,
Hotchkis and Wiley Mutual Funds since 1996; Director, Kimco Realty Corporation
since 1997; Member of the Investment Advisory Committee of the Virginia
Retirement System since 1998; Director, Montpelier Foundation since 1998. |
|||||||
Walter Mintz(1)(2) |
70
|
Special Limited Partner of |
1993
|
-0-
|
||||
1114
Avenue of the Americas New York, New York 10036 |
Cumberland
Associates (investment partnership) since 1982. |
|||||||
Robert S. Salomon, Jr.(1)(2) |
62
|
Principal of STI Management |
1996
|
-0-
|
||||
106
Dolphin Cove Quay Stamford, Connecticut 06902 |
(investment adviser)
since 1994; Chairman and CEO of Salomon Brothers Asset Management Inc from
1992 to 1995; Monthly columnist with Forbes Magazine since 1992;
Chairman of Salomon Brothers Equity Mutual Funds from 1992 to 1995; Director
of Stock Research and U.S. Equity Strategist at Salomon Brothers Inc from
1975 to 1991; Trustee, The Common Fund since 1980. |
|||||||
Melvin R. Seiden(1)(2) |
69
|
Director of Silbanc Properties, Ltd. |
1993
|
-0-
|
||||
780 Third Avenue Suite 2502 New York, New York 10017 |
(real estate, investment
and consulting) since 1987; Chairman and President of Seiden & de Cuevas,
Inc. (private investment firm) from 1964 to 1987. |
3 |
Name and Address
of Nominee
|
Age
|
Principal
Occupation During Past Five Years and Public Directorships (1) |
Director Since |
Shares of Common Stock of the Fund Beneficially Owned at the Record Date |
||||
---|---|---|---|---|---|---|---|---|
Stephen B. Swensrud(1)(2) |
66
|
Chairman of Fernwood Advisors |
1993
|
-0-
|
||||
24
Federal Street, Suite 400 Boston, Massachusetts 02110 |
(investment adviser) since 1996; Principal of Fernwood
Associates (financial consultant) since 1975; Chairman, Department of
Manufacturing, RPP Corporation since 1999; Director, Department of Telecommunications,
International Mobile Communications, Inc. since 1999. |
|||||||
Arthur Zeikel(1)* |
67
|
Chairman
of FAM and MLAM from |
1993
|
-0-
|
||||
300
Woodland Avenue Westfield, New Jersey 07090 |
1997 to 1999; President of FAM and MLAM from 1977 to 1997; Chairman of Princeton Services from 1997 to 1999 and Director thereof since 1993; President of Princeton Services from 1993 to 1997; Executive Vice President of Merrill Lynch & Co., Inc.(ML & Co.) from 1990 to 1999. |
(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. |
(2) | Member of the Audit Committee of the Board of Directors. |
* | 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 Funds 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 ending August 31, 1999, the Board of Directors held four meetings and the Audit Committee held four meetings. Each of the Directors then in office attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and, if a member, of the total number of meetings of the Audit Committee held during the period for which he served. |
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 Funds officers and directors and persons who own more than ten percent of a registered class of the Funds equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (the 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. |
4 |
Based solely on the Funds 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 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 Funds investment adviser, have complied with all filing requirements applicable to them with respect to transactions during the Funds most recent fiscal year. |
Interested Persons. The Fund considers Mr. Zeikel and Mr. Glenn to be interested persons of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act due to the positions each holds or has held with FAM and its affiliates and/or due to their ownership of securities issued by ML & Co. Mr. Glenn is the President of the Fund. |
Compensation of Directors. FAM, the Funds 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 FAM (each a non-interested Director) a fee of $2,000 per year plus $500 per regular meeting attended, together with such Directors 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 plus $500 per meeting attended, together with such Directors out-of-pocket expenses relating to attendance at such meetings. These fees and expenses aggregated $40,702 for the fiscal year ended August 31, 1999. |
The following table sets forth for the fiscal year ended August 31, 1999 compensation paid by the Fund to the non-interested Directors and, for the calendar year ended December 31, 1998, the aggregate compensation paid by all investment companies advised by FAM and its affiliate, MLAM (FAM/MLAM Advised Funds), to the non-interested Directors. |
Name of Director
|
Compensation From Fund |
Pension or Retirement Benefits Accrued As Part of Fund Expenses |
Aggregate Compensation from Fund and Other FAM/MLAM Advised Funds Paid To Directors |
||||
---|---|---|---|---|---|---|---|
Joe Grills(1) |
$8,000
|
None
|
$198,333
|
||||
Walter Mintz(1) |
$8,000
|
None
|
$178,583
|
||||
Robert S. Salomon, Jr.(1) |
$8,000
|
None
|
$178,583
|
||||
Melvin R. Seiden(1) |
$8,000
|
None
|
$178,583
|
||||
Stephen B. Swensrud(1) |
$8,000
|
None
|
$195,583
|
(1) |
The Directors serve on the boards of FAM/MLAM Advised Funds as follows: Mr. Grills (24 registered investment companies consisting of 56 portfolios); Mr. Mintz (22 registered investment companies consisting of 43 portfolios); Mr. Salomon (22 registered investment companies consisting of 43 portfolios); Mr. Seiden (22 registered investment companies consisting of 43 portfolios); Mr. Swensrud (25 registered investment companies consisting of 58 portfolios).
|
5 |
Officers of the Fund. The Board of Directors has elected six officers of the Fund. The following sets forth information concerning each of these officers: |
Name and Principal Occupation
|
Office
|
Age
|
Officer Since |
|||
---|---|---|---|---|---|---|
Terry K. Glenn |
President
|
59
|
1993*
|
|||
Executive Vice President of FAM
and MLAM since 1983; Executive Vice President and Director of Princeton
Services since 1993; President of Princeton Funds Distributor, Inc. (PFD)
since 1986 and Director thereof since 1991; President of Princeton Administrators,
L.P. since 1988. |
||||||
Joseph T. Monagle, Jr. | Senior Vice |
51
|
1997
|
|||
Senior Vice President of FAM and
MLAM since 1990; Department Head of the Global Fixed Income Division of
FAM and MLAM since 1997; Senior Vice President of Princeton Services since
1993. |
President | |||||
Vincent T. Lathbury, III | Senior Vice |
59
|
1993
|
|||
First Vice President of MLAM since
1997; Vice President of MLAM from 1982 to 1997; Portfolio Manager of FAM
and MLAM since 1982. |
President | |||||
Donald C. Burke | Vice President |
39
|
1993
|
|||
Senior Vice President and Treasurer
of MLAM and FAM since 1999; Senior Vice President and Treasurer of Princeton
Services since 1999; Vice President of PFD since 1999; First Vice President
of MLAM from 1997 to 1999; Vice President of MLAM from 1990 to 1997; Director
of Taxation of MLAM since 1990. |
and Treasurer |
1999
|
||||
Elizabeth M. Phillips | Vice President |
49
|
1993
|
|||
Vice President of MLAM since 1987;
Portfolio Manager of FAM and MLAM since 1993. |
||||||
William E. Zitelli | Secretary |
31
|
1999
|
|||
Attorney associated with MLAM since 1998; attorney associated with Pepper Hamilton LLP from 1997 to 1998; attorney associated with Reboul, MacMurray, Hewitt, Maynard & Kristol from 1994 to 1997. |
* | Mr. Glenn was elected President of the Fund in 1999. Prior to that he served as Executive Vice President of the Fund. |
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, a Director of the Fund, Mr. Glenn, a Director and an officer 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. |
6 |
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) 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. |
D&T also acts as independent auditors for ML & Co. and all of its subsidiaries and for most of other investment companies for which FAM and 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. |
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. The Fund has retained D.F. King & Co., Inc. to assist in the solicitation of proxies at a cost to the Fund of approximately $3,500, plus out-of-pocket expenses. |
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 the independent auditors. |
With respect to Item 1, Election of Directors, approval will require a plurality of the votes cast by the Funds stockholders, in person or by proxy, at a meeting at which a quorum is present and duly constituted. |
With respect to Item 2, Ratification of the Selection of Independent Auditors, approval will require the affirmative vote of a majority of the votes cast by the Funds stockholders, present and in person or by proxy and entitled to vote, at a meeting at which a quorum is present and duly constituted. |
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 |
7 |
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 firms 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 that are returned but that 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 the Fund that, except as limited by agreement or applicable law, it intends to vote shares held in its name for which no instructions have been received in the same proportion as the votes received from the beneficial owners of those shares for which instructions have been received, whether or not held in nominee name. 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. |
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 August 31, 1999 to any stockholder upon request. Such requests should be directed to Corporate High Yield Fund II, Inc., PO Box 9011, Princeton, New Jersey 08543-9011, Attention: William E. Zitelli, Secretary, or to 1-800-456-4587 ext. 123. |
Stockholder Proposals |
If a stockholder intends to present a proposal at the 2000 Annual Meeting of Stockholders of the Fund, and desires to have the proposal included in the Funds proxy statement and form of proxy for that meeting, the stockholder must deliver the proposal to the offices of the Fund by June 30, 2000. |
By Order of the Board of Directors |
WILLIAM E. ZITELLI
|
Dated: October 29, 1999 |
8 |
CORPORATE HIGH YIELD FUND II, INC. |
PO Box 9011 |
PROXY |
This proxy is solicited on behalf of the Board of Directors |
The undersigned hereby appoints Terry K. Glenn, Donald C. Burke and William E. Zitelli as proxies, each with the power to appoint his substitute, and hereby authorizes each of them to represent and to vote, as designated on the reverse hereof, all the shares of Common Stock of Corporate High Yield Fund II, Inc. (the Fund) held of record by the undersigned on October 20, 1999 at the Annual Meeting of Stockholders of the Fund to be held on December 15, 1999 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. |
By signing and dating the reverse side of this card, you authorize the proxies to vote each proposal as marked, or if not marked, to vote FOR each proposal, and to use their discretion to vote for any other matter as may properly come before the meeting or any adjournment thereof. If you do not intend to personally attend the meeting, please complete and return this card at once in the enclosed envelope. |
(Continued and to be signed on the reverse side) |
|
Please mark boxes: [ ] or [X] in blue or black ink. |
||||
1. ELECTION OF DIRECTORS | FOR all nominees listed below (except as marked to the contrary below)[ ] |
WITHHOLD AUTHORITY to vote for all nominees listed below [ ] |
(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominees name in the
list below.) |
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: _______________________________, 1999 |
X ________________________________________ |
Signature
|
X ________________________________________ |
Signature, if held jointly
|
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope. |
|