SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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PACHOLDER HIGH YIELD FUND, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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PACHOLDER HIGH YIELD FUND, INC.
270 Park Avenue
New York, New York 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To be held on April 24, 2013
March 1, 2013
To the Shareholders:
The Annual Meeting of the shareholders of Pacholder High Yield Fund, Inc. (the Fund) will be held on April 24, 2013, at
10:00 a.m., Eastern Time, at 270 Park Avenue, New York, New York. Please contact JPMorgan Funds Services at 1 (877) 217-9502 if you have any questions relating to attending the Annual Meeting in person. The Annual Meeting will be held for the
following purposes:
1. To elect a Board of thirteen Directors to serve until the next annual
meeting and until their successors are elected and qualified (Proposal 1);
2. To consider and act
upon such other business as may properly come before the meeting and any adjournments thereof.
The close of business on
February 13, 2013 has been fixed as the record date for the determination of shareholders entitled to receive notice of and to vote at the meeting.
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. IN ADDITION TO VOTING BY MAIL, YOU MAY ALSO VOTE EITHER BY TELEPHONE OR VIA THE INTERNET, AS FOLLOWS:
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To vote by Telephone:
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To vote by Internet:
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(1) Read the Proxy Statement and have your proxy card at hand.
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(1) Read the Proxy Statement and have your proxy card at hand.
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(2) Call the toll-free number that appears on your proxy card.
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(2) Go to the website that appears on your proxy card.
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(3) Enter the control number set forth on the proxy card and follow the simple
instructions.
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(3) Enter the control number set forth on the proxy card and follow the simple
instructions.
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We encourage you to vote by telephone or via the Internet using the control number that appears on
your enclosed proxy card.
Whichever method you choose, please read the enclosed Proxy Statement carefully before you
vote.
Important Notice regarding the availability of Proxy Materials for the Shareholder Meeting to be held on April 24, 2013.
This proxy statement is available at the website listed on your proxy card.
By Order of the Board of Directors,
Frank J. Nasta
Secretary
PACHOLDER HIGH YIELD FUND, INC.
270 Park Avenue
New York, New York 10017
PROXY STATEMENT
Annual Meeting of Shareholders to be held on April 24, 2013
This
proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors (the Board) of the Pacholder High Yield Fund, Inc. (the Fund) for use at the annual meeting of shareholders to be
held on April 24, 2013 at 10:00 a.m. Eastern Time, at 270 Park Avenue, New York, New York (the Annual Meeting) 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 each nominee for director, and for or against any other matters acted upon at the
meeting in the discretion of the persons named as proxies.
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. This proxy statement and the related proxy card will be mailed to shareholders
on or about March 1, 2013.
The Board has fixed the close of business on February 13, 2013 as the record date for
the determination of shareholders entitled to notice of and to vote at the Annual Meeting and any adjournments thereof. As of the record date, the Fund had outstanding 12,987,327 shares of Common Stock and 1,720 shares of Series W Auction Rate
Cumulative Stock (ARPS). To the Funds knowledge, no person owned beneficially 5% or more of the outstanding shares of the Fund as of the record date, except as provided on Exhibit A. As of December 31, 2012, the directors and
officers of the Fund as a group did not beneficially own any shares of the Common Stock of the Fund.
Holders of the
Funds outstanding shares of Common Stock and ARPS will vote together as a single class to elect eleven directors. As described herein under the section entitled Proposal 1: Election of Directors, holders of the Funds ARPS
will vote separately from holders of the Common Stock to elect two additional directors. As to any other business that may properly come before the meeting, holders of the Common Stock and ARPS may vote together as a single class or separately,
depending on the requirements of the Investment Company Act of 1940, as amended (the 1940 Act), the Maryland General Corporation Law and the Funds charter with respect to the item of business. Each full share of the Funds
Common Stock or ARPS is entitled to one vote and each fractional share of the Funds Common Stock or ARPS is entitled to a proportionate share of one vote.
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. 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 shareholders present at the meeting in person or by proxy. The votes of shareholders indicating a vote against a proposal in their proxies will be cast against adjournment or
postponement in respect of that proposal.
The Fund expects that broker-dealer firms holding shares of the Fund 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
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on each proposal at the meeting. The Fund understands that, under the rules of the NYSE MKT, such broker-dealers may grant authority to the proxies designated by the Fund to vote on the election
of directors for the Fund if no instructions have been received prior to the date specified in the broker-dealer firms request for voting instructions. Broker-dealer firms may, subject to certain conditions, exercise discretion over ARPS held
in their names for which no instructions are received by voting such shares in the same proportion as they have voted ARPS for which they have received instructions. Although the rules of the NYSE MKT have been amended to eliminate discretionary
voting by brokers in uncontested director elections, the amendment contains an exception for investment companies registered under the 1940 Act, such as the Fund.
In tallying shareholder votes, abstentions, withhold authority votes and broker non-votes (i.e., shares held by brokers or nominees as to which instructions have not been received from the
beneficial owners or the persons entitled to vote and either (i) the broker or nominee does not have discretionary voting power or (ii) the broker or nominee returns the proxy card but expressly declines to vote on a particular matter)
will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum for the transaction of business. Under applicable law, abstentions, withhold authority votes and broker non-votes do not constitute
votes for or against a matter and will be disregarded in determining votes cast on a proposal. Accordingly, abstentions and broker non-votes effectively will be a vote against any adjournment.
To obtain the Funds most recent annual report, including financial statements free of charge, or copies of any subsequent
shareholder report, please make the request in writing to Pacholder High Yield Fund, Inc., 270 Park Avenue, New York, New York 10017 Attention: Matthew Plastina, Assistant Treasurer or by calling 1-888-294-8217.
Requested shareholder reports
will be sent by first class mail within three business days of the receipt of the request. You can also obtain the most recently available annual report for the Fund by visiting www.pacholder.com.
PROPOSAL 1: ELECTION OF DIRECTORS
Background.
The Board, based on the recommendation of the Governance
Committee, has nominated for election as directors of the Fund the individuals (each, a Nominee and collectively, the Nominees) who currently serve as directors of the Fund and trustees of the J.P. Morgan Funds, as defined
below. Each Nominee would hold office until the next annual meeting of shareholders and until his or her successor is elected and qualified. The Nominees are John F. Finn, Dr. Matthew Goldstein, Robert J. Higgins, Frankie D. Hughes, Peter C.
Marshall, Mary E. Martinez, Marilyn McCoy, Mitchell M. Merin, William G. Morton, Jr., Dr. Robert A. Oden, Jr., Marian U. Pardo, Frederick W. Ruebeck and James J. Schonbachler. Each of the Nominees, other than Ms. Martinez, Mr. Merin and Ms. Pardo,
was elected at the shareholder meeting held on April 25, 2012. Effective December 31, 2012, William J. Armstrong, Fergus A. Reid III and Leonard Spalding retired from the Board. In order to fill the vacancies created by Messrs. Armstrong, Reid
and Spalding, the Governance Committee and Board appointed Mary E. Martinez and Mitchell M. Merin to serve as Directors effective January 1, 2013 and Marian U. Pardo to serve as Director effective February 1, 2013. The Nominees are also trustees of
the J.P. Morgan Funds, a mutual fund complex consisting of 171 registered investment companies advised by J.P. Morgan Investment Management Inc. (JPMIM or the Adviser), the Funds investment adviser, or its affiliates.
JPMIM is a wholly owned subsidiary of JPMorgan Chase & Co., a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries.
On April 25, 2012, Mr. Ruebeck and Mr. Schonbachler were elected by ARPS shareholders voting as a separate class. The proposal contemplates that Mr. Ruebeck and Mr. Schonbachler, the chairman and a
member,
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respectively, of the Fixed Income Investment Sub-Committee, and a member and the chairman, respectively, of the Audit and Valuation Committee, would serve as candidates for election by holders of
the ARPS voting as a separate class at the 2013 annual meeting of shareholders.
Nomination Process.
The Boards Governance Committee functions as the Nominating Committee and Compensation Committee with respect to the Fund. At the
November 13-15, 2012 Board meeting, the Governance Committee and Board evaluated each Nominee. Based on the Governance Committees recommendation, the Board appointed Ms. Martinez, Mr. Merin and Ms. Pardo to fill the vacancies created by
Messrs. Armstrong, Reid and Spalding and nominated each of the Nominees to stand for election at the annual meeting of shareholders. The following is a description of the factors considered by the Governance Committee and the Board in concluding
that each Nominee should serve as a Director of the Fund and, with respect to Mr. Ruebeck and Mr. Schonbachler, their nomination to stand for election by holders of the ARPS voting as a separate class.
Qualifications of Nominees.
As noted above, Ms. Martinez, Mr. Merin, and Ms. Pardo were appointed to the Board to fill vacancies created by the retirement of William J. Armstrong, Fergus A. Reid III and Leonard
Spalding. In concluding that Ms. Martinez, Mr. Merin, and Ms. Pardo should serve as Directors, the Governance Committee and Board evaluated Ms. Martinez, Mr. Merin, and Ms. Pardo both individually and in the context of their anticipated
contribution to the Boards overall effectiveness. The Governance Committee and the Board considered that Ms. Martinez, Mr. Merin and Ms. Pardo each has significant and relevant experience and knowledge concerning registered
investment companies and asset management. The Governance Committee and the Board also considered the strong leadership skills, commitment, and integrity that Ms. Martinez, Mr. Merin and Ms. Pardo each possesses as well as their
ability to work effectively and collaboratively with other members of the Board. In reaching its conclusion that Ms. Martinez, Mr. Merin, and Ms. Pardo should serve as Directors, the Board also considered the following additional
specific qualifications:
Mary E. Martinez.
The Governance Committee and the Board considered the breadth
and depth of Ms. Martinezs experience as a senior financial services executive with 25 years of experience in asset management, wealth management and private banking services. The Governance Committee and the Board noted
Ms. Martinezs qualifications with respect to registered investment companies and asset management products as a result of serving as president to other registered investment companies and as a chief operating officer of an asset
management firm with responsibility for product development, management, infrastructure and operating oversight. The Governance Committee and the Board also considered Ms. Martinezs potential contribution to the effectiveness of the Board
given her experience with respect to: (1) diversified product offerings including fundamental, quantitative, traditional and alternative asset classes; (2) asset and portfolio management analytics; (3) risk management and governance;
and (4) regulatory and financial reporting.
Mitchell M. Merin.
The Governance Committee and the Board
noted that Mr. Merin has been in the securities and asset management business for over 25 years and has served as both a board member and president of other registered investment companies. The Governance Committee and the Board also considered
that Mr. Merin has held leadership positions within the investment company industry including serving as a member of the Executive Committee of the Board of Governors of the Investment Company Institute and the Chair of the Fixed Income
Securities and Investment Company Committees of NASDR. The Governance Committee and the Board also considered Mr. Merins potential contribution to the effectiveness of the Board given his experience with respect to: (1) taxable fixed
income products and derivatives; (2) investment oversight; and (3) board governance of registered investment companies and other public companies.
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Marian U. Pardo.
The Governance Committee and the Board noted that
Ms. Pardo has been in the financial services industry since 1968, with experience in banking, lending, and investment management and served as a portfolio manager for equity funds across the capitalization spectrum including, prior to 2002,
small cap US equity funds advised by JPMIM. The Governance Committee and the Board also considered Ms. Pardos potential contribution to the effectiveness of the Board given her experience with respect to: (1) portfolio management,
(2) the J.P. Morgan Funds investment advisory business, and (3) banking and investment management.
With
respect to the Nominees who were members of the Board prior to December 31, 2012, the Governance Committee and Board evaluated each Nominee both individually and in the broader context of the Boards overall effectiveness. The following is
a description of the factors considered by the Governance Committee and the Board in concluding that each Nominee should serve as a Director of the Fund:
The Governance Committee and the Board considered the commitment that each Nominee has demonstrated in serving on the Board including the significant time each Nominee who was a member of the Board prior
to December 31, 2012 has devoted to preparing for meetings and the active engagement and participation of each Nominee at Board meetings. The Governance Committee and the Board also considered the character of each Nominee who was a member
of the Board prior to December 31, 2012 noting that each Nominee is committed to executing his or her duties as a director with diligence, honesty and integrity. The Governance Committee and the Board also considered the contributions that
each Nominee who was a member of the Board prior to December 31, 2012 has made to the Board in terms of experience, leadership, independence and the ability to work well with other Board members.
The Governance Committee and the Board noted the additional experience that each of the Nominees who was a member of the Board prior to
December 31, 2012 has gained with respect to registered investment companies as a result of his or her service on the J.P. Morgan Funds Board. The J.P. Morgan Funds overseen by the J.P. Morgan Funds Board represent almost every asset class
including (1) fixed income funds including traditional bond funds, municipal bond funds, high yield funds, government funds, and emerging market debt funds, (2) money market funds, (3) international, emerging market and country/region
funds, (4) equity funds including small, mid and large capitalization funds and value and growth funds, (5) index funds, (6) funds of funds, including target date funds, and (7) specialty funds including market neutral funds,
long/short funds and funds that invest in real estate securities and commodity-related securities and derivatives. The Governance Committee and the Board also considered the experience that each Nominee who was a member of the Board prior to
December 31, 2012 had with respect to reviewing agreements with the Funds service providers in connection with their broader service to the J.P. Morgan Funds including the Funds investment adviser, custodian, fund accountant, and
securities lending agent.
The Governance Committee and the Board also considered the experience and contribution of each
Nominee who was a member of the Board prior to December 31, 2012 in the context of the Boards leadership and committee structure. The Board has five committees including the Investments Committee, the Audit and Valuation Committee, the
Compliance Committee, the Governance Committee, and the Preferred Shares Committee. The Investments Committee has three sub-committees including an Equity Investment Sub-Committee, a Money Market and Alternative Products Investment Sub-Committee,
and a Fixed Income Investment Sub-Committee. Different members of the Investments Committee serve on the sub-committee with respect to each asset type thereby allowing the J.P. Morgan Funds Board to effectively evaluate information for the 171 Funds
in the complex in a focused, disciplined manner.
The Governance Committee also considered the operational efficiencies
achieved by having a single Board for the Fund and the other registered investment companies overseen by the Adviser and its affiliates as well as
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the extensive experience of certain nominees in serving on Boards for registered investment companies advised by subsidiaries or affiliates of JPMorgan Chase & Co. and/or Bank One
Corporation (known as heritage J.P. Morgan Funds or heritage One Group Mutual Funds).
In
reaching its conclusion that each Nominee who was a member of the Board prior to December 31, 2012 should serve as a Director of the Fund and, with respect to Mr. Ruebeck and Mr. Schonbachler, their nomination to stand for election by
holders of the ARPS voting as a separate class, the Board also considered the following additional specific qualifications, contributions and experience of each of such Nominees:
John F. Finn.
Mr. Finn has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage One Group
Mutual Funds Board since 1998. Until February 12, 2013, Mr. Finn served on the Audit and Valuation Committee. As a member of the Audit and Valuation Committee, Mr. Finn has participated in the appointment of the Funds
independent accountants, the oversight of the performance of the Funds audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the
Funds securities by the Adviser, overseeing the quality and objectivity of the Funds independent audit and the financial statements of the Fund, and acting as a liaison between the Funds independent registered public accounting
firm and the full Board. Mr. Finn also serves as a member of the Equity Investments Sub-Committee and the Governance Committee.
Dr. Matthew Goldstein.
Dr. Goldstein has served as the Chairman of the Board since January 2013 and on the J.P. Morgan Funds Board since 2005. Dr. Goldstein was a member of the
heritage J.P. Morgan Funds Board since 2003. Dr. Goldstein serves as the Chairman of the Governance Committee. As a member of the Governance Committee, he has participated in the selection and nomination of persons for election or appointment
as Directors, periodic review of the compensation payable to the Directors, review and evaluation of the functioning of the Board and its committees, oversight of any ongoing litigation affecting the Fund, the Adviser or the non-interested
Directors, oversight of regulatory issues or deficiencies affecting the Fund, oversight of the Funds risk management processes and oversight and review of matters with respect to service providers to the Fund. Dr. Goldstein previously
served as the Chairman of the Money Market and Alternative Products Investment Sub-Committee.
Robert J.
Higgins.
Mr. Higgins has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 2002. Until February 6, 2013, Mr. Higgins served on the Audit and Valuation Committee.
As a member of the Audit and Valuation Committee, Mr. Higgins has participated in the appointment of the Funds independent accountants, the oversight of the performance of the Funds audit, accounting and financial reporting
policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Funds securities by the Adviser, overseeing the quality and objectivity of the Funds independent audit and the
financial statements of the Fund and acting as a liaison between the Funds independent registered public accounting firm and the full Board. Mr. Higgins also serves as Chairman of the Equity Investment Sub-Committee and is a member of the
Compliance Committee.
Frankie D. Hughes.
Ms. Hughes has served on the Board since 2008. Until
February 6, 2013, Ms. Hughes was a member of the Fixed Income Investment Sub-Committee. Ms. Hughes is also a member of the Compliance Committee. As a member of the Compliance Committee, she has participated in the oversight of the
Funds compliance with legal and regulatory and contractual requirements and compliance policies and procedures. Ms. Hughes is also a member of the Money Market and Alternative Products Investment Sub-Committee.
Peter C. Marshall.
Mr. Marshall has served on the J.P. Morgan Funds Board since 2005 and is currently Vice Chairman.
Mr. Marshall was also the Chairman of the heritage One Group Mutual Funds Board, serving as a member
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of such Board since 1985. Mr. Marshall was also an Audit Committee Financial Expert for the heritage One Group Mutual Funds. Mr. Marshall serves as a member of the Governance Committee.
As a member of the Governance Committee, he has participated in the selection and nomination of persons for election or appointment as Directors, periodic review of the compensation payable to the Directors, review and evaluation of the functioning
of the Board and its committees, oversight of any ongoing litigation affecting the Fund, the Adviser or the non-interested Directors, oversight of regulatory issues or deficiencies affecting the Fund, oversight of the Funds risk management
processes and oversight and review of matters with respect to service providers to the Fund. Mr. Marshall also serves as a member of the Money Market and Alternative Products Investment Sub-Committee.
Marilyn McCoy.
Ms. McCoy has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage One
Group Mutual Funds Board since 1999. Ms. McCoy is the Chairman of the Compliance Committee. As a member of the Compliance Committee, she has participated in the oversight of Funds compliance with legal and regulatory and contractual
requirements and compliance policies and procedures. Ms. McCoy also serves as a member of the Equity Investment Sub-Committee.
William G. Morton, Jr.
Mr. Morton has served on the Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 2003. Mr. Morton also serves as a member of the
Governance Committee. As a member of the Governance Committee, he has participated in the selection and nomination of persons for election or appointment as Directors, periodic review of the compensation payable to the Directors, review and
evaluation of the functioning of the Board and its committees, oversight of any ongoing litigation affecting the Fund, the Adviser or the non-interested Directors, oversight of regulatory issues or deficiencies affecting the Fund, oversight of the
Funds risk management processes and oversight and review of matters with respect to service providers to the Fund. Mr. Morton also serves on the Equity Investment Sub-Committee.
Dr. Robert A. Oden Jr.
Dr. Oden has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage
One Group Mutual Funds Board since 1997. Dr. Oden is a member of the Fixed Income Investment Sub-Committee. Dr. Oden was also a member of the Compliance Committee. As a member of the Compliance Committee, he has participated in the
oversight of the Funds compliance with legal and regulatory and contractual requirements and compliance policies and procedures. Dr. Oden is also a member of the Governance Committee.
Frederick W. Ruebeck.
Mr. Ruebeck has served on the Board since 2005 and was a member of the heritage One Group Mutual
Funds Board since 1994. Mr. Ruebeck is the Chairman of the Fixed Income Investment Sub-Committee. Mr. Ruebeck also serves on the Audit and Valuation Committee. As a member of the Audit and Valuation Committee, Mr. Ruebeck has
participated in the appointment of the Funds independent accountants, the oversight of the performance of the Funds audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the
Board in its oversight of the valuation of the Funds securities by the Adviser, overseeing the quality and objectivity of the Funds independent audit and the financial statements of the Fund, and acting as a liaison between the
Funds independent registered public accounting firm and the full Board.
James J. Schonbachler.
Mr.
Schonbachler has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 2001. Mr. Schonbachler is a member of the Fixed Income Investment Sub-Committee. Mr. Schonbachler serves as
Chairman of the Audit and Valuation Committee. In connection with his duties to the Audit and Valuation Committee, Mr. Schonbachler has participated in the appointment of the Funds independent accountants, the oversight of the performance
of the Funds audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Funds securities by the Adviser, overseeing the quality
and objectivity of the Funds independent audit and the financial statements, and acting as a liaison between the Funds independent registered public accounting firm and the full Board.
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Additional Information concerning the Nominees.
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 may recommend. There are no family relationships among the Nominees. The address for each of the Nominees is 270 Park Avenue, New York, New York 10017. The Governance Committee
has concluded that each Nominee designated as non-interested would qualify as an independent director for purposes of NYSE MKT Company Guide 803A.
The following table sets forth information concerning the Nominees.
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Name and Year of Birth
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Positions held
with the
Fund,
Term of Office,
and Length of
Time Served
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Principal Occupation(s)
During Past 5 Years
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Number of
Portfolios in
Fund Complex
4
Overseen by
Nominee
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Other
Directorships
Held by Nominee
During the Past 5 Years
5
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Non-Interested Nominees
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John F. Finn
(1947)
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Director since
April 22, 2009
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Chairman (1985-present), President and Chief Executive Officer, Gardner, Inc. (supply chain management company serving industrial and consumer markets) (1974-present).
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171
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Director, Cardinal Health, Inc. (CAH) (1994-present); Director, Greif, Inc. (GEF) (industrial package products and services) (2007-present).
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Dr. Matthew Goldstein
(1941)
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Chairman since
2013;
Director since
April 22, 2009
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Chancellor, City University of New York (1999-present); President, Adelphi University (New York) (1998-1999).
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171
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Director, Bronx-Lebanon Hospital Center; Director, United Way of New York City (2002-present): Trustee, Museum of Jewish Heritage (2011-present).
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Robert J. Higgins
(1945)
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Director since
April 22, 2009
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Retired; Director of Administration of the State of Rhode Island (2003-2004);
President Consumer Banking and Investment Services, Fleet Boston Financial (1971-2001).
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171
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None.
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Peter C. Marshall
(1942)
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Director since
April 22, 2009
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Self-employed business consultant (2002-Present)
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171
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Director, Center for Communication, Hearing and Deafness (1990-present).
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Mary E. Martinez
(1960)
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Director since
January 1, 2013
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Associate, Special Properties, a Christies International Real Estate Affiliate (2010-
Present); Managing Director, Bank of America (Asset Management) (2007-2008); Chief Operating Officer, U.S.
Trust Asset Management; U.S. Trust Company (asset management) (2003-2007); President, Excelsior Funds
(registered investment companies) (2004-2005).
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171
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|
|
Member, New York City Center Advisory Council (oversees public performing arts facilities) (2006-Present)
|
7
|
|
|
|
|
|
|
|
|
|
|
Name and Year of Birth
|
|
Positions held
with the
Fund,
Term of Office,
and Length of
Time Served
|
|
Principal Occupation(s)
During Past 5 Years
|
|
Number of
Portfolios in
Fund Complex
4
Overseen by
Nominee
|
|
|
Other
Directorships
Held by Nominee
During the Past 5 Years
5
|
Marilyn McCoy
1
(1948)
|
|
Director since
April 22, 2009
|
|
Vice President of Administration and Planning, Northwestern University
(1985-present).
|
|
|
171
|
|
|
Trustee, Carleton College (2003-present).
|
|
|
|
|
|
Mitchell M. Merin
(1953)
|
|
Director since
January 1, 2013
|
|
Retired; President and Chief Operating Officer, Morgan Stanley Investment
Management, Member Morgan Stanley & Co. Management Committee (registered investment adviser) (1998-2005).
|
|
|
171
|
|
|
Director, Sun Life Financial
(SLF) (2007 to Present)
(financial services
and
insurance); Trustee, Trinity
College, Hartford, CT
(2002-2010)
|
|
|
|
|
|
William G. Morton, Jr.
(1937)
|
|
Director since
April 22, 2009
|
|
Retired; Chairman Emeritus (2001-2002), and Chairman and Chief Executive Officer, Boston Stock Exchange (1985-2001).
|
|
|
171
|
|
|
Director, Radio Shack Corp. (1987-2008); Trustee, Stratton Mountain School (2001-present).
|
|
|
|
|
|
Dr. Robert A. Oden, Jr.
(1946)
|
|
Director since
April 22, 2009
|
|
Retired; President, Carleton College (2002-2010); President, Kenyon College (1995-2002)
|
|
|
171
|
|
|
Trustee, American University in Cairo (1999-present); Chairman, Dartmouth-Hitchcock Medical
Center (2013-present), Trustee, Dartmouth-Hitchcock Medical
Center (2011-present); Trustee, American Schools of Oriental Research (2011-present); Trustee, Carleton College (2002-2010).
|
|
|
|
|
|
Marian U. Pardo
2
(1946)
|
|
Director since
February 1, 2013
|
|
Managing Director and Founder, Virtual Capital Management LLC (Investment Consulting) (2007-present); Managing Director, Credit Suisse Asset Management (portfolio manager)
(2003-2006)
|
|
|
171
|
|
|
Member, Board of Governors, Columbus Citizens Foundation (not-for-profit supporting philanthropic and cultural
programs) (2006-Present)
|
|
|
|
|
|
Frederick W. Ruebeck
(1939)
|
|
Director since
April 22, 2009
|
|
Consultant (2000-present);
Advisor, JP Greene & Associates, LLC (broker-dealer) (2000-2009); Chief Investment Officer, Wabash College (2004-present); Director of Investments,
Eli Lilly and Company (pharmaceuticals) (1988-1999).
|
|
|
171
|
|
|
Trustee, Wabash College (1988-present); Chairman, Indianapolis Symphony Orchestra Foundation (1994-present).
|
8
|
|
|
|
|
|
|
|
|
|
|
Name and Year of Birth
|
|
Positions held
with the
Fund,
Term of Office,
and Length of
Time Served
|
|
Principal Occupation(s)
During Past 5 Years
|
|
Number of
Portfolios in
Fund Complex
4
Overseen by
Nominee
|
|
|
Other
Directorships
Held by Nominee
During the Past 5 Years
5
|
James J. Schonbachler
(1943)
|
|
Director since
April 22, 2009
|
|
Retired; Managing Director of Bankers Trust Company (financial services) (1968-1998).
|
|
|
171
|
|
|
None
|
|
|
|
|
|
Interested Nominees Not Affiliated With The Adviser
|
|
|
|
|
|
|
|
|
|
|
Frankie D. Hughes
3
(1952)
|
|
Director since
April 22, 2009
|
|
President and Chief Investment Officer, Hughes Capital Management, Inc. (fixed income asset management) (1993-present).
|
|
|
171
|
|
|
Trustee, The Victory Portfolios (2000-2008)
|
(1)
|
Ms. McCoy has served as Vice President of Administration and Planning for Northwestern University since 1985. William M. Daley was the Head of Corporate
Responsibility for JPMorgan Chase & Co. prior to January 2011 and served as a member of the Board of Trustees of Northwestern University from 2005 through 2010. JPMIM, the Funds investment adviser, is a wholly-owned subsidiary of
JPMorgan Chase & Co. Three other members of the Board of Trustees of Northwestern University are executive officers of registered investment advisers (not affiliated with JPMorgan) that are under common control with subadvisers to
certain J.P. Morgan Funds.
|
(2)
|
In connection with prior employment with JPMorgan Chase, Ms. Pardo was the recipient of non-qualified pension plan payments from JPMorgan Chase in the amount of
approximately $2,055 per month, which she irrevocably waived effective January 1, 2013, and deferred compensation payments from JPMorgan Chase in the amount of approximately $7,294 per year, which ended in January 2013. In addition,
Ms. Pardo receives payments from a fully funded qualified plan, which is not an obligation of JPMorgan Chase.
|
(3)
|
Ms. Hughes is treated as an interested person based on the portfolio holdings of clients of Hughes Capital Management, Inc.
|
(4)
|
A Fund Complex means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment and investor
services or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. The J.P. Morgan Funds Complex includes eleven registered
investment companies (171 funds), including J.P. Morgan Mutual Fund Group (JPMMFG) which liquidated effective November 29, 2012 and is in the process of winding up its affairs.
|
(5)
|
Includes companies with a class of securities registered under the Securities Exchange Act of 1934, as amended (Exchange Act), or subject to the
requirements of Section 15(d) of the Exchange Act, other than the Fund.
|
Fund Shares Owned by Nominees
The following table sets forth, for each Nominee, the dollar range of equity shares beneficially owned in the Fund as of December 31,
2012. The information as to beneficial ownership is based on statements furnished to the Fund by each Nominee. Beneficial ownership means having directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, a
direct or indirect pecuniary interest in shares of the Fund, and includes shares of the Fund held by members of the persons immediate family sharing the same household; provided, however, that the presumption of such beneficial ownership may
be rebutted. Each Nominees individual beneficial shareholdings of the Fund constitute less than 1% of the outstanding shares of the Fund.
|
|
|
|
|
Name of Nominee
|
|
Dollar Range of Fund Shares
Beneficially Owned
1
|
|
Aggregated Dollar Range of
Equity Securities in All
Registered
Investment
Companies Overseen by
Nominee in Family of
Investment Companies
2,3
|
Non-Interested Nominees
|
|
|
|
|
John F. Finn
|
|
None
|
|
Over $100,000
|
Dr. Matthew Goldstein
|
|
None
|
|
Over $100,000
|
9
|
|
|
|
|
Name of Nominee
|
|
Dollar Range of Fund Shares
Beneficially Owned
1
|
|
Aggregated Dollar Range of
Equity Securities in All
Registered
Investment
Companies Overseen by
Nominee in Family of
Investment Companies
2,3
|
Robert J. Higgins
|
|
None
|
|
Over $100,000
|
Mary E. Martinez*
|
|
None
|
|
None
|
Marilyn McCoy
|
|
None
|
|
Over $100,000
|
Mitchell E. Merin*
|
|
None
|
|
None
|
Peter C. Marshall
|
|
None
|
|
Over $100,000
|
William G. Morton, Jr.
|
|
None
|
|
Over $100,000
|
Robert A. Oden, Jr.
|
|
None
|
|
Over $100,000
|
Marian U. Pardo**
|
|
None
|
|
$50,001-$100,000
(4)
|
Frederick W. Ruebeck
|
|
None
|
|
Over $100,000
|
James J. Schonbachler
|
|
None
|
|
Over $100,000
|
|
|
|
Interested Nominees Not Affiliated With The Adviser
|
|
|
|
|
Frankie D. Hughes***
|
|
None
|
|
Over $100,000
|
(1)
|
The Fund does not offer any pension or retirement plan benefits to its directors or officers.
|
(2)
|
Family of Investment Companies includes the J.P. Morgan Funds, comprised of 171 funds.
|
(3)
|
For Ms. McCoy and Messrs. Finn, Higgins, Marshall, Oden and Ruebeck, these amounts include deferred compensation balances, as of December 31, 2012, through
participation in the J.P. Morgan Funds Deferred Compensation Plan for Eligible Directors.
|
(4)
|
Over $100,000 as of February 5, 2013.
|
*
|
Ms. Martinez and Mr. Merin became members of the Board effective January 1, 2013.
|
**
|
Ms. Pardo became a member of the Board effective February 1, 2013.
|
***
|
Ms. Hughes is treated as an interested person based on the portfolio holdings of clients of Hughes Capital Management, Inc.
|
Board Leadership Structure and Oversight.
The Board has structured itself in a manner that allows it to effectively perform its oversight function. The Chairman of the Board is an independent Director, which allows him to carry out his leadership
duties as Chairman with objectivity.
In addition, the Board has adopted a committee structure that allows it to effectively
perform its oversight function for the 171 Funds in the J.P. Morgan Funds complex. As described under Qualifications of Nominees and Additional Information About Committees and Board Meetings, the Board has five
committees: the Investments Committee, the Audit and Valuation Committee, the Compliance Committee, the Governance Committee, and the Preferred Shares Committee. The Investments Committee has three sub-committees: an Equity Investment Sub-Committee,
a Money Market and Alternative Products Investment Sub-Committee, and a Fixed Income Investment Sub-Committee. The Board has determined that the leadership and committee structure is appropriate for the Fund and allows the Board to effectively
and efficiently evaluate issues that impact the J.P. Morgan Funds as a whole as well as issues that are unique to the Fund.
The Board and the Committees take an active role in risk oversight including the risks associated with registered investment companies including investment risk, compliance and valuation. The
Governance Committee oversees and reports to the Board on the risk management processes for the Fund. In addition, in connection with its oversight, the Board receives regular reporting from the Chief Compliance Officer (CCO), the Adviser, the
Administrator, and the internal audit department of JPMorgan Chase & Co. The Board also
10
receives periodic reporting from the Chief Risk Officer of J.P. Morgan Asset Management
1
(JPMAM) including reporting concerning operational controls that are designed to address market risk,
credit risk, and liquidity risk among others. The Board also receives regular reporting from personnel responsible for JPMAMs business resiliency and disaster recovery.
In addition, the Board and its Committees work on an ongoing basis in fulfilling the oversight function. At each quarterly meeting,
the Board receives a report from the Fixed Income Investment Sub-Committee which, in turn, meets with representatives of the Adviser as well as an independent consultant to review and evaluate the ongoing performance of the Fund. The Audit and
Valuation Committee is responsible for oversight of the performance of the Funds audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation
of the Funds securities by the Adviser, overseeing the quality and objectivity of the Funds independent audit and the financial statements of the Fund, and acting as a liaison between the Funds independent registered public
accounting firm and the full Board. The Compliance Committee is responsible for oversight of the Funds compliance with legal, regulatory and contractual requirements and compliance with policy and procedures. The Governance Committee
is responsible for, among other things, oversight of matters relating to the Funds corporate governance obligations and risk management processes, Fund service providers and litigation. The Preferred Shares Committee allows the Fund to quickly
respond to issues unique to the ARPS, particularly issues associated with maintaining the asset coverage requirements applicable to the ARPS. At each quarterly meeting, each of the Governance Committee, the Audit and Valuation Committee and the
Compliance Committee report their committee proceedings to the full Board. This Committee structure allows the Board to efficiently evaluate a large amount of material and effectively fulfill its oversight function. Annually, the Board considers the
efficiency of this committee structure.
Additional Information About Committees and Board Meetings
The Audit and Valuation Committee is composed entirely of directors who are not interested persons of the Fund, the
Funds investment adviser or its affiliates as that term is defined in the 1940 Act (the Audit Committee). The current members of the Audit Committee are Messrs. Schonbachler (Chairman), Merin and Ruebeck and Ms. Martinez. The
purposes of the Audit and Valuation Committee are to: (i) appoint and determine compensation of the Funds independent accountants; (ii) evaluate the independence of the Funds independent accountants; (iii) oversee the
performance of the Funds audit, accounting and financial reporting policies, practices and internal controls and valuation policies; (iv) approve non-audit services, as required by the statutes and regulations administered by the SEC,
including the 1940 Act and the Sarbanes-Oxley Act of 2002; (v) assist the Board in its oversight of the valuation of the Funds securities by the Adviser, as well as any sub-adviser; (vi) oversee the quality and objectivity of the
Funds independent audit and the financial statements of the Fund; (vii) act as a liaison between the Funds independent registered public accounting firm and the full Board; and (vii) perform specific responsibilities as
required by NYSE MKT rules.
The Audit and Valuation Committee operates pursuant to a written charter, which was most recently
amended on February 16, 2012. A copy of the Audit and Valuation Charter is attached as Appendix 1. The report of the Audit Committee, as approved on February 21, 2013, is attached to this proxy statement as Appendix 2.
The Governance Committee is composed entirely of directors who are not interested persons of the Fund, the Funds
investment adviser or its affiliates as that term is defined in the 1940 Act. The Governance Committee functions as the Nominating Committee and Compensation Committee with respect to the Fund for purposes of
1
|
J .P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are
not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.
|
11
Sections 804 and 805 of the NYSE MKT Company Guide. The members of the Governance Committee are Messrs. Goldstein (Chairman), Finn, Marshall, Morton and Oden. The Governance Committee operates
pursuant to a written charter (the Governance Committee Charter), which was last amended on February 16, 2012. A copy of the Governance Committee Charter is attached as Appendix 3. The duties of the Governance Committee include, but
are not limited to, (i) selection and nomination of persons for election or appointment as Directors; (ii) periodic review of the compensation payable to the non-interested Directors; (iii) establishment of non-interested Director
expense policies; (iv) periodic review and evaluation of the functioning of the Board and its committees; (v) selection of independent legal counsel to the non-interested Directors and legal counsel to the Fund; (vi) oversight of
ongoing litigation affecting the Fund, the Adviser or the non-interested Directors; (vii) oversight of regulatory issues or deficiencies affecting the Fund (except financial matters considered by the Audit Committee); (viii) oversight of
the risk management processes for the Fund; and (ix) oversight and review of matters with respect to service providers to the Fund (except the Funds independent registered public accounting firm).
When evaluating a person as a potential nominee to serve as an Independent Director, the Governance Committee may consider, among other
factors, (i) whether or not the person is independent and whether the person is otherwise qualified under applicable laws and regulations to serve as a Director; (ii) whether or not the person is willing to serve, and willing
and able to commit the time necessary for the performance of the duties of an Independent Director; (iii) the contribution that the person can make to the Board and the Fund, with consideration being given to the persons business
experience, education and such other factors as the Committee may consider relevant; (iv) the character and integrity of the person; (v) the desirable personality traits, including independence, leadership and the ability to work with the
other members of the Board; and (vi) to the extent consistent with the 1940 Act, such recommendations from management as are deemed appropriate.
The process of identifying nominees involves the consideration of candidates recommended by one or more of the following: current Independent Directors, officers, shareholders and other sources that the
Governance Committee deems appropriate. Shareholders can submit recommendations in writing to the attention of the Secretary of the Fund at 270 Park Avenue, New York, New York 10017.
The Governance Committee will consider and evaluate candidates submitted by shareholders on the basis of the same criteria as those used
to consider and evaluate candidates submitted from other sources. Although the Board does not have a specific policy with respect to diversity, the Governance Committee will consider the extent to which potential candidates possess sufficiently
diverse skill sets and diversity characteristics that would contribute to the Boards overall effectiveness. The Governance Committee periodically reviews the role of the Governance Committee and the charter and makes recommendations to
the non-interested Directors with respect thereto.
The members of the Compliance Committee are Ms. McCoy
(Chairman), Ms. Hughes, Ms. Pardo and Mr. Higgins. The primary purposes of the Compliance Committee are to (i) oversee the Funds compliance with legal and regulatory and contractual requirements and the Funds
compliance policies and procedures; and (ii) consider the appointment, compensation and removal of the Funds Chief Compliance Officer.
Each member of the Board, except Dr. Goldstein, serves on the Investments Committee. The Investments Committee has three sub-committees divided by asset type and different members of the Investments
Committee serve on the sub-committee with respect to each asset type. The Fixed Income Investment Sub-Committee is responsible for the Fund. The Fixed Income Investment Sub-Committee members are Messrs. Ruebeck (Chair), Oden and Schonbachler and
Ms. Martinez. The function of the Investments Committee and the Fixed Income Investment Sub-Committee is to assist the Board in the oversight of the investment management services
12
provided by the Adviser. The primary purpose of the Fixed Income Investment Sub-committee is to (i) assist the Board in its oversight of the investment management services provided by the
Adviser to the Fund; and (ii) review and make recommendations to the Investments Committee and/or the Board, concerning the approval of proposed new or continued advisory services for the Fund. The full Board may delegate to the Investments
Committee from time to time the authority to make Board level decisions on an interim basis when it is impractical to convene a meeting of the full Board. The Fixed Income Investment Sub-committee receives reports concerning investment management
topics, concerns or exceptions with respect to the Fund that the sub-committee is assigned to oversee, and works to facilitate the understanding by the Investments Committee and the Board of particular issues related to investment management of Fund
reviewed by the sub-committee.
The Board has a Preferred Shares Committee. The members of the Preferred Shares Committee are
Messrs. Ruebeck and Schonbachler. The Preferred Shares Committee, among other things, reviews proposals for the Fund to redeem ARPS in the event that the officers of the Fund determine from time to time that the Fund will not be able to sustain
compliance with the Asset Coverage Tests.
For the fiscal year ended December 31, 2012, the Board met six times. The
Audit and Valuation Committee held four meetings during 2012. The Fixed Income Investment Sub-Committee met five times during 2012. The Governance Committee met four times during 2012. The Preferred Shares Committee met once in 2012. The Compliance
Committee met four times during 2012. The Board does not have a formal policy regarding director attendance at the Funds annual meetings. Each Nominee that was on the Board prior to December 31, 2012 attended at least 75% of the aggregate
of the total number of meetings of the Board and Committee on which he or she serves. There were no directors in attendance at the Funds 2012 annual meeting of shareholders.
Officers of the Fund
The officers of the Fund are elected by and hold
office at the discretion of the Board. The following table sets forth information concerning each executive officer of the Fund as well as the Chief Compliance Officer and the Secretary.
|
|
|
|
|
|
|
Name, Address and Year of Birth
|
|
Position(s) Held
with the Fund
|
|
Term of Office and
Length of Time Served
|
|
Principal Occupation(s)
During Past 5
Years
|
Patricia A. Maleski
270 Park Avenue
New York, NY 10017
1960
|
|
President
Previously, Vice President, Chief Administrative Officer and Treasurer
|
|
Position held since September 1, 2010
Positions held from May 2007, May 2008, and September 2008, respectively, until September 1, 2010
|
|
Managing Director, J.P. Morgan Investment Management Inc. and Chief Administrative Officer, J.P. Morgan Funds and Institutional Pooled Vehicles since 2010; previously, Treasurer and
Principal Financial Officer of the J.P. Morgan Funds from 2008 to 2010; previously, Head of Funds Administration and Board Liaison, J.P. Morgan Funds prior to 2010. Ms. Maleski has been with JPMorgan Chase & Co. since
2001.
|
|
|
|
|
Joy C. Dowd
270 Park Avenue
New York, NY 10017
1972
|
|
Treasurer
Previously, Assistant Treasurer
|
|
Position held since September 1, 2010
Position held from 2009 to September 1, 2010
|
|
Assistant Treasurer from 2009 to 2010; Executive Director, JPMorgan Funds Management, Inc. from February 2011; Vice President, JPMorgan Funds Management, Inc. from December 2008 to
February 2011; prior to joining JPMorgan Chase, Ms. Dowd worked in MetLifes investments audit group from 2005 through 2008.
|
13
|
|
|
|
|
|
|
Name, Address and Year of Birth
|
|
Position(s) Held
with the Fund
|
|
Term of Office and
Length of Time Served
|
|
Principal Occupation(s)
During Past 5
Years
|
Frank J. Nasta
270 Park Avenue
New York, NY 10017
1964
|
|
Secretary
|
|
Position held since April 2009
|
|
Managing Director and Associate General Counsel, JPMorgan Chase since 2008; Previously, Director, Managing Director, General Counsel and Corporate Secretary, J&W Seligman &
Co., Incorporated; Secretary of each of the investment companies of the Seligman Group of Funds and Seligman Data Corp.; Director and Corporate Secretary, Seligman Advisors, Inc. and Seligman Services, Inc.
|
|
|
|
|
Stephen M. Ungerman
270 Park Avenue
New York, NY 10017
1953
|
|
Chief Compliance Officer
|
|
Position held since June 2008
|
|
Managing Director, JPMorgan Chase & Co.; Mr. Ungerman has been with JPMorgan Chase & Co. since 2000.
|
Compensation of Directors and Officers
For the fiscal year ended December 31, 2012, the Fund paid each director who is not an employee of the Adviser or any corporate affiliate of the Adviser as follows:
Director Compensation
Prior to January 1, 2013, the Funds of the J.P. Morgan Funds Complex overseen by the Directors paid each Director an annual fee of
$275,000 and reimbursed each Director for expenses incurred in connection with service as a Director. Beginning January 1, 2013, the Funds of the J.P. Morgan Funds Complex overseen by the Directors pay each Director an annual fee of $315,000
and reimburse each Director for expenses incurred in connection with service as a Director. In addition, the Funds of the J.P. Morgan Funds Complex overseen by the Directors pay the Chairman $225,000, the Vice Chairman $75,000, and from
December 1, 2011 through February 29, 2012, paid the assistant to the Audit and Valuation Committee Chairman $6,250. The Chairman and Vice Chairman receive no additional compensation for service as committee or sub-committee chairmen.
Committee chairs and sub-committee chairs who are not already receiving an additional fee are each paid $50,000. The Directors may hold various other directorships unrelated to the J.P. Morgan Funds Complex. For the year ended December 31,
2012, the J.P. Morgan Funds bore expenses related to administrative and staffing services provided to the former Chairman, in lieu of establishing an office of the former Chairman, in the amount of $6,000 per month.
Director aggregate compensation paid by the Fund and the J.P. Morgan Funds Complex for the calendar year ended December 31, 2012, is
set forth below:
|
|
|
|
|
|
|
|
|
Name of Director
|
|
Pacholder Fund
|
|
|
Total Compensation Paid from
the Fund Complex
(1)
|
|
Independent Directors
|
|
|
|
|
|
|
|
|
John F. Finn
|
|
$
|
68
|
|
|
$
|
275,000
|
(4)
|
Dr. Matthew Goldstein
|
|
|
80
|
|
|
|
325,000
|
|
Robert J. Higgins
|
|
|
80
|
|
|
|
325,000
|
(5)
|
Peter C. Marshall
|
|
|
87
|
|
|
|
350,000
|
|
Mary E. Martinez
(2)
|
|
|
0
|
^
|
|
|
45,833
|
(2)
|
Marilyn McCoy
|
|
|
80
|
|
|
|
325,000
|
|
14
|
|
|
|
|
|
|
|
|
Name of Director
|
|
Pacholder Fund
|
|
|
Total Compensation Paid from
the Fund Complex
(1)
|
|
Mitchell M. Merin
(2)
|
|
$
|
0
|
^
|
|
$
|
45,833
|
(2)
|
William G. Morton, Jr.
|
|
|
68
|
|
|
|
275,000
|
|
Dr. Robert A. Oden, Jr.
|
|
|
68
|
|
|
|
275,000
|
(6)
|
Marian U. Pardo
(3)
|
|
|
0
|
^
|
|
|
45,833
|
(3)
|
Frederick W. Ruebeck
|
|
|
80
|
|
|
|
325,000
|
(7)
|
James J. Schonbachler
|
|
|
79
|
|
|
|
320,833
|
(8)
|
|
|
|
Interested Director Not Affiliated With The Adviser
|
|
|
|
|
|
|
|
|
Frankie D. Hughes
|
|
|
68
|
|
|
|
275,000
|
|
^
|
Amount rounds to less than $1.
|
(1)
|
A Fund Complex means two or more registered investment companies that (i) hold themselves out to investors as related companies for purposes of investment and
investor services or (ii) have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. The J.P. Morgan Funds Complex for which the
Board of Directors currently serves includes eleven registered investment companies (171 Funds), including JPMMFG which liquidated effective November 29, 2012 and is in the process of winding up its affairs.
|
(2)
|
Ms. Martinez and Mr. Merin became members of the Board of Directors effective January 1, 2013. Compensation includes amounts paid prior to becoming a Director
for attendance at Board meeting and service as a Director nominee.
|
(3)
|
Ms. Pardo became a member of the Board of Directors effective February 1, 2013. Compensation includes amounts paid prior to becoming a Director for attendance at
Board meeting and as a Director nominee.
|
(4)
|
Includes $275,000 of Deferred Compensation.
|
(5)
|
Includes $325,000 of Deferred Compensation.
|
(6)
|
Includes $27,500 of Deferred Compensation.
|
(7)
|
Includes $130,000 of Deferred Compensation.
|
(8)
|
Includes $64,167 of Deferred Compensation.
|
The officers of the Fund receive no direct remuneration from the Fund except, the Fund, along with the other J.P. Morgan Funds, make reimbursement payments, on a pro-rata basis, to the Funds
Administrator for a portion of the fees associated with the Office of the Funds CCO. The Funds other officers are compensated by affiliates of JPMorgan Chase & Co. for services rendered to the Fund.
Procedures for Communications to the Board
The Board has adopted a process for shareholders to send communications to the Board. To communicate with the Board or an individual director, a shareholder must send written communications to 270 Park
Avenue, New York, New York 10017, addressed to the Board of Directors of Pacholder High Yield Fund, Inc., Attention: Frank Nasta, Secretary or the individual director. All shareholder communications received in accordance with this process will
be forwarded to the Board or the individual director.
Required Vote
Under the Funds charter, the holders of the outstanding shares of ARPS, voting as a separate class, are entitled to elect two
directors and the holders of the outstanding shares of Common Stock and ARPS, voting together as a single class, are entitled to elect the remaining directors of the Fund. The Board has nominated Mr. Ruebeck and Mr. Schonbachler for
election by holders of the ARPS and the remainder of the Nominees for election by the holders of the Common Stock and ARPS. The directors will be elected by a plurality of the votes cast at the meeting, provided that a quorum is present. Votes to
withhold authority will not be considered votes cast for this purpose. It is expected that proxies for the election of directors will be voted at the meeting.
15
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES LISTED
ABOVE.
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 accompanying proxy,
or their substitutes, will vote such proxy in accordance with their best judgment on such matters.
INFORMATION CONCERNING
THE ADVISER, THE ADMINISTRATOR, CUSTODIAN, FUND
ACCOUNTANT AND SECURITIES LENDING AGENT
J.P. Morgan Investment Management Inc., 270 Park Avenue, New York, NY 10017 serves as the Funds investment adviser. JPMorgan Funds
Management, Inc., 460 Polaris Parkway, Westerville, OH 43082 serves as the Funds administrator. JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, NY 10017 serves as the Funds custodian, fund accountant, and securities lending agent.
J.P. Morgan Funds Management, Inc., JPMorgan Chase Bank, N.A. and J.P. Morgan Investment Management Inc. are indirect wholly owned subsidiaries of JPMorgan Chase & Co., 270 Park Avenue, New York, NY 10017. The Fund paid $149,748
during the fiscal year ended December 31, 2012 to JPMorgan Funds Management, Inc. for administrative services. The Fund paid JPMorgan Chase Bank, N.A. $64,149 for custody and fund accounting services for the fiscal year ended December 31,
2012. The Fund did not participate in securities lending for the fiscal year ended December 31, 2012.
INFORMATION
CONCERNING THE INDEPENDENT AUDITORS
The Board has selected PricewaterhouseCoopers LLP (PwC) as the
independent auditors for the Fund for the fiscal year ending December 31, 2013. PwC will also prepare the Funds federal and state income tax returns and provide certain permitted non-audit services. PwC, in accordance with Public Company
Accounting Oversight Board Rule 3526, has confirmed to the Audit and Valuation Committee that they are independent auditors with respect to the Fund. The Audit and Valuation Committee has considered whether the provision by PwC to the Fund of
non-audit services to the Fund or of professional services to the Funds investment adviser and entities that control, are controlled by or are under common control with the adviser is compatible with maintaining PwCs independence and has
discussed PwCs independence with them. Representatives of PwC are not expected to be present at the Annual Meeting but have been given the opportunity to make a statement if they so desire and will be available should any matter arise
requiring their presence. PwC served as the Funds independent auditors for the fiscal years ended December 31, 2011 and 2012.
Audit Fees
The
aggregate fees billed by PwC for professional services rendered for the audit of the Funds annual financial statements for the fiscal years ended December 31, 2011 and 2012 were $70,000 and $89,500, respectively.
Audit-Related Fees
The
aggregate fees billed by PwC for professional services rendered reasonably related to the performance of the audit or review of the Funds financial statements for the fiscal years ended December 31, 2011 and 2012
16
were $30,800 and $25,600, respectively. Audit-related fees include amounts for attestation services for semi-annual financial statements and examinations performed pursuant to Rule 17f-2 under
the Investment Company Act of 1940.
Tax Fees
The aggregate fees billed by PwC for professional services rendered for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2011 and 2012 were $13,250 and $15,900,
respectively. Tax fees include amounts for tax compliance, tax planning and tax advice.
All Other Fees
There were no fees billed by PwC for professional services rendered for services other than audit and audit-related services, and tax
compliance, tax advice and tax planning for the fiscal years ended December 31, 2011 and 2012.
The aggregate non-audit
fees billed by PwC for professional services rendered to the Fund, the Funds investment adviser, and any entity controlling, controlled by, or under common control with the adviser for the fiscal years ended December 31, 2011 and
December 31, 2012 were $33.6 million and $31.6 million, respectively. Such fees were for attest services and agreed-upon procedures not required by statute or regulation, which address accounting, reporting and control matters. Such fees also
included tax return compliance, tax advice regarding routine business transactions primarily related to private equity activities and other tax services. The Funds Audit and Valuation Committee has considered whether the provision of non-audit
services that were rendered to the Funds investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Fund that were not pre-approved is compatible
with maintaining PwCs independence.
Pursuant to the Funds Audit and Valuation Committee Charter and written
policies and procedures for the pre-approval of audit and non-audit services (the Pre-approval Policy), the Audit and Valuation Committee has pre-approved all audit and non-audit services performed by PwC for the Fund. In addition, the
Audit and Valuation Committee pre-approves PwCs engagement for non-audit services with the Funds investment adviser and any service affiliate, if the engagement relates directly to the operations and financial reporting of the Fund. The
Pre-approval Policy lists a number of audit and non-audit services that have been approved by the Audit and Valuation Committee, or which are not subject to pre-approval under applicable regulations (the Pre-approval List). The Audit and
Valuation Committee annually reviews and pre-approves the services that may be provided by PwC without obtaining additional specific pre-approval of the individual services. All other audit and non-audit services not on the Pre-approval List must be
specifically pre-approved by the Audit and Valuation Committee. One or more members of the Audit and Valuation Committee may be appointed as the Committees delegate for the purposes of considering whether to approve such services. The Audit
and Valuation Committees responsibilities to pre-approve services performed by the independent public registered accounting firm are not delegated to management
SOLICITATION OF PROXIES
In addition to solicitation by mail,
solicitations on behalf of the Board of Directors may be made by 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 the Annual Meeting, including the costs of preparing, assembling, mailing and transmitting proxy materials and of
17
soliciting proxies on behalf of the Board, 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 solicitation materials to beneficial owners.
SECTION 16(a) BENEFICIAL OWNER REPORTING
COMPLIANCE
Based upon a review of copies of the forms received by the Fund, all directors and officers of the Fund, any
person who owns more than 10% of the Funds outstanding securities and certain required officers of the Adviser have filed on a timely basis with the SEC the reports of beneficial ownership of Fund shares required by Section 16(a) of the
Exchange Act for the Funds most recently concluded fiscal year ended on December 31, 2012, except that Mr. James Shanahan had one late Form 4 filing relating to three transactions.
SHAREHOLDER PROPOSALS
To be considered for presentation at the Funds 2014 annual meeting of shareholders, a shareholder proposal submitted pursuant to Rule 14a-8 under the Exchange Act must be received at the Funds
principal office c/o the Secretary of the Fund no later than the close of business November 1, 2013. Written notice of a shareholder proposal submitted outside of the processes of Rule 14a-8 must be delivered to the Funds principal office
c/o the Secretary of the Fund no later than the close of business on December 1, 2013 and no earlier than on November 1, 2013. In order to be included in the Funds proxy statement and form of proxy, a shareholder proposal must comply
with all applicable legal requirements. Timely submission of a proposal does not guarantee that such proposal will be included.
SHAREHOLDER REPORTS
The Funds Annual Report for the fiscal year ended December 31, 2012 may be obtained without charge by calling the Fund toll free at 1-888-294-8217 or by writing to Pacholder High Yield Fund,
Inc., 270 Park Avenue, New York, New York 10017, Attention Matthew Plastina, Assistant Treasurer.
To reduce expenses and conserve natural resources, a single copy of the proxy will be sent to individual shareholders who share a residential
address, provided they have the same last name or the Fund reasonably believes they are members of the same family. If you would like to receive a separate copy of the proxy without charge, please call the Fund toll free at 1-888-294-8217 or write
the Fund at: Pacholder High Yield Fund, Inc., 270 Park Avenue, New York, New York 10017, Attention Frank Nasta, Secretary.
18
Appendix 1
J.P. M
ORGAN
F
UNDS
A
UDIT
AND
V
ALUATION
C
OMMITTEE
C
HARTER
(As Amended February 2012)
ORGANIZATION AND MEMBERSHIP
There shall be a committee of the Boards of Trustees* (the Boards) of the J.P. Morgan Funds, including the Pacholder High Yield Fund, Inc., (the Funds) to be known as the Audit and
Valuation Committee (the Committee). The Committee shall be composed of Trustees who: (1) are not interested persons as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the 1940
Act); (2) do not accept, directly or indirectly, any compensation from the Funds or its affiliates except compensation for services as a member of the Boards or Committees of the Boards; and (3) are independent as defined in the NYSE
Amex Company Guide 803A and satisfy the requirements of NYSE Amex Company Guide 803B(2). Each member shall be free of any relationship that would interfere with their exercise of independent judgment as a Committee member. Each member of the
Committee must be financially literate that is; be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement.
The Chairman of the Boards shall determine the number of Committee members, which shall be at least three members, and shall nominate the members of the
Committee, and shall appoint the Chairperson of the Committee, subject to the approval of the full Boards. The Chairperson of the Committee shall set the agenda for, and preside at, each meeting of the Committee and shall engage in such other
activities on behalf of the Committee as shall be determined from time to time by the Committee or as is consistent with current practice.
VALUATION
There Committee shall be
charged with assisting the Boards in their oversight of the valuation of Funds securities by the Adviser to the Funds (in the context of this Charter, the term Adviser may include any sub-Adviser), and such other duties as shall be determined
by the Chairman of the Boards, subject to the approval of the full Boards. The Committee hereby delegates authority to any member of the Committee to respond to inquires on valuation matters and participate in fair valuation determinations that
occur between meetings of the Committee and such valuation decisions shall be reported to and ratified by the Committee at a subsequent meeting.
The Committee shall consult with and report to the Audit Committee and the Chairman of the Boards. The Boards or the Audit Committee may establish subcommittees of the Audit Committee as they determine
appropriate.
MEETINGS
The
Committee shall meet periodically, but at least twice per year, either on its own or in conjunction with meetings of the Boards of the Funds, and from time to time as necessary. Meetings of the Committee may be held in person, by video conference or
by conference telephone. Where appropriate, the Committee may take action by unanimous written consent in lieu of a meeting.
*
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The term Board of Trustees also refers to Board of Directors and the term Trustee also refers to Director.
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1
REPORTING
The Committee Chairperson shall report to the Boards of Trustees on the results of the Committees reviews and make such recommendations as the Committee has approved. The Committee will keep minutes
of its meetings and will make such minutes available to the full Boards of Trustees for review. Members of the Committee who make valuation decisions between Committee meetings shall report such decisions to the full Committee at a subsequent
meeting following any valuation consultation.
PURPOSES
The primary purposes of the Committee are (1) appointment, retention, compensation, and oversight of the Funds independent accountants; (2) oversight of the performance of the Funds
audit, accounting and financial reporting policies, practices and internal controls; (3) approval of non-audit services, as required by the statutes and regulations administered by the Securities and Exchange Commission (the
Commission), including the 1940 Act and the Sarbanes-Oxley Act of 2002 (the Sarbanes Act); and (4) oversight of compliance with the requirements of Regulation S-K and the NYSE Amex applicable to the Pacholder High Yield
Fund, Inc.
Audit
The
Committee will oversee the quality and objectivity of the Funds independent audit and the financial statements of the Funds, act as a liaison between the Boards of Trustees and the Funds independent accountants and periodically report to
the Boards of Trustees. In performing its duties, the Committee shall have unrestricted access to each Funds independent accountants and executive and financial management of the Funds, and such other resources as it may deem appropriate. The
independent accountant shall report directly to the Committee.
The existence and activities of the Committee shall not relieve management of
any responsibilities to maintain appropriate systems for accounting, internal control and internal audit, nor the Funds independent accountants of their responsibilities under applicable professional and legal standards.
Valuation
The Boards have adopted
certain valuation procedures and have delegated to the Adviser the responsibility for the day-to-day operational aspects of the valuation process. In those instances where the valuation procedures require the action of the Boards, any member of the
Committee shall act in lieu of the full Boards with respect to those instances where it may be impracticable or impossible to hold meetings of the entire Boards. Any such interim actions taken by a Committee member with respect to valuation shall be
submitted to the full Boards for ratification at the next scheduled meeting of the full Boards.
The Committee shall consult with independent
counsel to the Trustees so that they may be apprised of regulatory developments affecting valuation issues.
FINANCIAL EXPERTS
The Committee shall recommend to the Board that the Board designate one or more Committee members as Audit Committee Financial
Experts (ACFE). Such person(s) shall also be presumed to be financially sophisticated as required by NYSE Amex Company Guide 803B(2). In recommending that a person be designated an ACFE, the Committee shall consider the
factors prescribed by Section 407 of the Sarbanes Act, relevant regulations of the Commission, and such other factors as the Committee deems relevant.
2
A Committee member designated as ACFE shall not be subject to a different or higher degree of individual
responsibility, care or obligation than other members of the Committee. The designation of one or more Committee members as ACFE shall not alter or decrease the duties and obligations of members of the Committee not so designated.
RESPONSIBILITIES
The Committee shall
have the following responsibilities:
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Approve the appointment and compensation of the Funds independent accountants.
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Evaluate the independence of the independent accountants, taking into consideration, among other things, whether the independent accountants provide
any consulting, audit and other services to the manager, the administrator, the distributor, or their affiliates, and receive the independent accountants specific representations as to their independence. In connection with the evaluation of
their independence, the independent accounting firm shall make a written report to the Committee, in such detail as the Committee may require, regarding all services the firm has provided or proposes to provide to the Funds Adviser,
administrator, distributor, or their affiliates. It is a responsibility of the Committee to engage actively in a dialogue with the independent accountants with respect to any disclosed relationship or service that may impact the objectivity and
independence of the accountants and to take, or recommend that the full Board take, appropriate action to oversee independence of auditors.
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Review the arrangements for and scope of the annual audit of the Funds.
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Review the Funds financial statements contained in the annual and other periodic reports to shareholders with Fund management and the independent
accountants, and determine whether the independent accountants are satisfied with the disclosure and content of the annual financial statements. In addition, the Committee should obtain representations from Fund management as to its assessment of
the adequacy of accounting policies and procedures.
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Review the final drafts of the Pacholder High Yield Fund, Inc.s annual financial statements, discuss with management and the independent
accountants and decide whether to recommend that the financial statements be included in such Funds annual report.
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Prepare an audit committee report as required by Item 306 of Regulation S-K to be included in the proxy statements relating to the election of
directors with respect to the Pacholder High Yield Fund, Inc.
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Meet with independent counsel for the Independent Trustees and Fund Counsel in order to be informed on legal issues having the possibility of impacting
the financial reporting process. This would include items of industry-wide importance and internal issues such as litigation.
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Review the form of opinion the independent accountants propose to render to the Board and shareholders.
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Meet periodically with the independent accountants in executive session.
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Receive reports regarding the state of financial and audit compliance and audit compliance procedures.
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Receive reports of the Adviser regarding the state of the Funds internal controls and, in the presence of the independent accountants, discuss
these reports with management.
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The Chairman and at least one other Committee member shall participate in reviews of the financial statements for the Funds prior to distribution to
shareholders and shall report to the Committee on such reviews.
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Oversee the implementation of the Funds valuation policies by the Adviser and recommend and approve changes in the Funds valuation policies
from time to time; and
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3
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To review and act on such other matters as referred to the Committee by the Governance Committee or the Boards.
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Periodically, as the Committee deems appropriate, the Committee shall:
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Consider the effect of any changes in accounting principles or practices proposed by management or the independent accountants.
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Consider and pre-approve any non-audit services to be provided by the independent accountants to the Funds or to the Funds Adviser or
Service Affiliates (if the service provided by the independent accountant to that Service Affiliate relates directly to the operations and financial reporting of the Funds) and the fees to be charged for such non-audit services. For
purposes of this Audit Committee Charter, Service Affiliates include any entity controlling, controlled by, or under common control with the Funds Adviser that provides ongoing services to the Funds.
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Review the scope of any internal audits to be performed that impact the operations and financial reporting of the Funds and any related findings of the
internal auditors.
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Review, as necessary, the impact of any material valuation events on the Funds financial statements.
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Undertake such other investigations and consider such other matters of a financial nature including comments by the Securities and Exchange Commission
or any other regulators (of the Adviser or the Funds) as the Committee deems appropriate.
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Review with the Adviser any comments or criticisms from the Commission or any other regulators related to the financial statements of the Funds as
brought to the attention of the Committee and establish procedures, to the extent necessary, for monitoring the resolution of such issues.
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Maintain procedures (a summary of which is attached hereto as Exhibit A) for the confidential, anonymous submission by employees and officers of the
Funds, their affiliates, or any other provider of accounting related services of concerns or complaints regarding any accounting, internal audit controls or audit matter and the retention of records related to the retention and treatment of such
concerns in accordance with the requirements of the Sarbanes Act and to address reports from attorneys or auditors of possible violation of federal or state law or fiduciary duty.
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Establish procedures (a copy of which is attached hereto as Exhibit B) for the receipt, retention, and treatment of complaints received by the
Pacholder High Yield Fund, Inc., its investment Adviser, administrator, or any other provider of accounting services related to the Fund, internal accounting controls, or auditing matters.
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RELIANCE ON SERVICE PROVIDERS
The
Adviser shall inform the Committee of matters requiring Committee oversight as required in this Charter. The Committee may rely on management and other service providers to supply information reasonably necessary for the Committee to carry out its
responsibilities. The Chairman of the Committee shall be responsible for assuring that each item that is a responsibility of the Committee shall be placed on the agenda of the Committee for at least one meeting during each year.
INDEPENDENT COUNSEL OR ADVISERS
The
Committee is authorized to engage independent counsel or other Advisers to assist it in carrying out its responsibilities. The costs of engaging independent counsel or other Advisers will be borne by the Funds.
4
ANNUAL REVIEW
The Committee shall review and reassess the adequacy of this Charter at least once per year.
AMENDMENTS
The Board may amend this
Charter by a vote, including a vote of a majority of the Independent Trustees.
LIMITS ON COMMITTEE RESPONSIBILITY
The Committee is not responsible for either the preparation of the financial statements or the auditing of the financial statements. Management of the
Funds has the responsibility for preparing the financial statements and implementing internal controls, and disclosure controls and procedures, and the independent accountants have the responsibility for auditing the financial statements. The
independent accountants also will consider the internal control over financial reporting for the purpose of determining the nature, timing and extent of their audit procedures; any material weaknesses or significant deficiencies identified during
the audit will be communicated to the Committee. The review of the financial statements by the Committee is not of the same scope or quality as the audit performed by the independent auditors.
The responsibilities of the Committee do not include reviews of the valuation and calculation of the net asset value of any of the Funds, as this
responsibility is central to the oversight role of the Boards as a whole. In addition, subject to the general oversight responsibility of the Boards, day-to-day responsibility for valuation decisions on behalf of the Funds has been delegated to the
Advisor. Accordingly, neither the Committee nor its individual members are in any way responsible for the day-to-day operational aspects of the valuation process.
5
Appendix 2
PACHOLDER HIGH YIELD FUND, INC.
(the Fund)
AUDIT AND VALUATION COMMITTEE REPORT
The Audit and Valuation Committee (the Audit Committee) of the Board of Directors of the Fund met on February 21, 2013 to review the Funds audited financial statements for the
fiscal year ended December 31, 2012. The Audit Committee operates pursuant to a charter last amended February 16, 2012, that sets forth the roles of the Funds management, independent auditors, the Board of Directors and the Audit
Committee in the Funds financial reporting process. Pursuant to the charter, the Funds management is responsible for the preparation, presentation and integrity of the Funds financial statements, internal controls, and for the
procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent auditors for the Fund are responsible for planning and carrying out proper audits and reviews. The role of the Audit Committee is
to assist the Board of Directors in its oversight of the financial reporting process by, among other things, reviewing the scope and results of the Funds annual audit with the Funds independent auditors and recommending the initial and
ongoing engagement of such auditors.
In performing its oversight function, the Audit Committee has reviewed and discussed the
audited financial statements with the Funds management and its independent auditors, PricewaterhouseCoopers LLP. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing
Standards No. 61 and has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standards Board Standard No. 1. The Audit Committee also has discussed the independence of
PricewaterhouseCoopers LLP with PricewaterhouseCoopers LLP.
Members of the Audit Committee rely without independent
verification on the information provided and the representations made to them by management and PricewaterhouseCoopers LLP. Accordingly, the Audit Committees oversight does not provide an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles and policies or appropriate internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit
Committees considerations and discussions referred to above do not guarantee that the audit of the Funds financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements
are presented in accordance with generally accepted accounting principles or that PricewaterhouseCoopers LLP is in fact independent.
Based upon this review and related discussions, and subject to the limitations on the role and responsibilities of the Audit Committee set forth above and in the charter, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in the Funds Annual Report for the year ended December 31, 2012.
This report has been approved by all of the members of the Audit Committee (whose names are listed below), each of whom has been determined to be independent pursuant to Section 803A the NYSE MKT
Company Guide.
Submitted by the Audit Committee of the Funds Board of Directors.
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/s/ James Schonbachler
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/s/ Mitchell Merin
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/s/ Mary Martinez
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James Schonbachler
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Mitchell Merin
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Mary Martinez
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/s/ Fred Ruebeck
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Fred Ruebeck
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As Approved on February 21, 2013
Appendix 3
JPM
ORGAN
F
UNDS
G
OVERNANCE
C
OMMITTEE
C
HARTER
(As Amended February 2012)
ORGANIZATION
There shall be a committee
of the Boards of Trustees* (the Boards) of the JPMorgan Funds, including the Pacholder High Yield Fund, Inc., (the Funds) to be known as the Governance Committee (the Committee). With respect to the Pacholder High
Yield Fund, Inc., the Governance Committee shall function as the Nominating Committee and Compensation Committee for purposes of Sections 804 and 805 of the NYSE Amex Company Guide. The Committee shall be composed solely of Trustees who are not
interested persons of the Funds as defined by the Investment Company Act of 1940, as amended, and who are independent as defined in the NYSE Amex Company Guide 803A and satisfy the requirements of NYSE Amex Company Guide 803B(2)
(Independent Trustees). The Chairman of the Boards shall determine the number of Committee members, shall nominate the members of the Committee and shall appoint the Chairperson of the Committee, subject to the approval of the full
Boards. The Chairperson of the Committee shall set the agenda for, and preside at, each meeting of the Committee and shall engage in such other activities on behalf of the Committee as shall be determined from time to time by the Committee.
MEETINGS
The Committee may
meet either on its own or in conjunction with meetings of the Boards. Meetings of the Committee may be held in person, by video conference or by conference telephone. Where appropriate, the Committee may take action by unanimous written consent in
lieu of a meeting.
RESPONSIBILITIES
The duties of the Committee are:
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to select and nominate persons for election or appointment as Trustees including Independent Trustees and Trustees who are interested persons of the
Funds (i) as additions to the Boards, (ii) to fill vacancies which, from time to time, may occur in the Boards, (iii) for election by the Funds shareholders at meetings called for the election of Trustees, including the
Pacholder High Yield Fund, Inc.s annual meeting, and (iv) for election by holders of preferred shares of the Pacholder High Yield Fund, Inc. voting as a separate class;
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to review from time to time the compensation payable to the Trustees and to make recommendations to the Boards with respect thereto;
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to establish Trustee expense policies;
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to review and evaluate from time to time the functioning of the Boards and the various committees of the Boards and to make recommendations to the
Boards with respect thereto;
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to consider and recommend the appointment or removal of the Funds Senior Officer;
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to consider and approve the compensation of the Funds Senior Officer;
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to approve the retention and compensation of consultants, experts or staff as may be reasonably necessary to assist the Senior Officer in the
performance of his or her duties;
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*
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The term Board of Trustees also refers to Board of Directors and the term Trustee also refers to Director.
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1
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to receive compliance reports from the Funds Senior Officer at regular meetings of the Committee and, as necessary, between meetings of the
Boards;
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to select independent legal counsel to the Independent Trustees and recommend the retention of such counsel to the Independent Trustees;
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to select legal counsel to the Funds and recommend the retention of such counsel to the Board of Trustees and to provide ongoing monitoring of
counsels fees;
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to consult with independent counsel for the Independent Trustees so that the Committee may be apprised of regulatory developments affecting governance
issues;
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to oversee and report to the Boards on the risk management processes for the Funds;
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to oversee on going civil litigation affecting the Funds, the Adviser or the Board of Trustees;
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to oversee regulatory issues or deficiencies affecting the Funds (except with respect to financial matters considered by the Audit Committee);
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to establish and revise, as appropriate, a Trustee Investment Policy concerning Trustee investments in the Funds;
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to oversee and review matters with respect to service providers to the Funds (except with respect to auditors);
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to review from time to time shareholder correspondence to the Boards; and
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to select and recommend continuing education and industry seminars; and
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to review and act upon such other matters as are referred to the Committee by the Boards.
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NOMINATION OF TRUSTEES
After a
determination by the Committee that a person should be nominated as an additional Trustee, or as soon as practical after a vacancy occurs or it appears that a vacancy is about to occur for a Trustee position on any of the Boards, the Committee shall
nominate a person for appointment by a majority of the members of the Boards to add to the Boards or to fill the vacancy. Prior to a meeting of the shareholders of the Funds called for the purpose of electing Trustees, the Committee shall nominate
one or more persons for election as Trustees at such meeting.
Evaluation by the Committee of a person as potential nominee to serve as a
Trustee should include (but need not be limited to):
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upon advice of independent legal counsel to the Boards, whether or not a person being considered for nomination as an Independent Trustee is
independent and whether the person is otherwise qualified under applicable laws and regulations to serve as a Trustee of the Funds;
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whether or not the person is willing to serve, and willing and able to commit the time necessary for the performance of the duties of an Independent
Trustee;
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the contribution which the person can make to the Boards and the Funds, with consideration being given to the persons business experience,
education and such other factors as the Committee may consider relevant;
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the character and integrity of the person;
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desirable personality traits of the individual including independence, leadership and the ability to work with the other members of the Boards; and
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2
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consistent with the Investment Company Act of 1940, as amended (the 1940 Act), the Committee may consider recommendations from management
in its evaluation process as it deems appropriate.
|
The Committee shall review nominees recommended to the Board by
shareholders and shall evaluate such nominees in the same manner as it evaluates nominees identified by the Committee.
As long as any Class
of any Fund is subject to any provision of the 1940 Act and/or any rule or regulation adopted thereunder that requires that the selection and nomination of the Independent Trustees of a Fund be limited solely to the discretion of the Independent
Trustees, the Committee shall comply with such requirements.
In seeking out potential nominees and in nominating persons to serve as
Independent Trustees of the Funds, the Committee shall not discriminate against any person based on his or her race, religion, national origin, sex, physical disability and other factors not relevant to the persons ability to serve as an
Independent Trustee.
REVIEW OF COMPENSATION
At least annually, the Committee shall review and recommend the amount of compensation payable to the Independent Trustees and other Trustees who are not employees of any adviser or principal underwriter
of any Fund and report its findings and recommendation to the Boards. Compensation shall be based on the responsibilities and duties of the Independent Trustees and such other Trustees and the time required to perform these duties. The Committee
shall also make recommendations to the Boards regarding matters related to compensation, including deferred compensation plans, expense reimbursement policies and policies for the Independent Trustees and such other Trustees, and shall monitor any
and all such policies and deferred compensation plans.
EVALUATION FACTOR
The Committee shall consider, be responsible for and implement any periodic self-evaluation process of the Boards and all committees of the Boards.
SELECTION OF COUNSEL
The Committee
shall consider and oversee the selection of independent legal counsel to the Independent Trustees in accordance with Rule 0-1(a)(6) under the 1940 Act and shall recommend such counsel to the Independent Trustees. In making such selection the
Committee will examine and monitor such legal counsels client relationships in order to ascertain continued independence.
SHAREHOLDER COMMUNICATIONS
The
Committee will review shareholder correspondence to the Boards. Shareholders wishing to send communications to any of the Boards or specific members of such Boards will be directed to submit communications only in written form. All such shareholder
communications should clearly identify the specific Boards or specific Board members to which each communication is directed and should be sent to the attention of the Trusts Secretary, at 270 Park Avenue, New York, New York 10017 in the first
instance. The Trusts Secretary will maintain a copy of any such communication and promptly forward each such communication to the Committee no less frequently than monthly. The Committee will periodically review such communications and
determine how to respond. Other Trustees will receive, no less frequently than quarterly, a summary of all shareholders communications received during the prior quarter, which summary shall specifically identify the substance of all such
communications.
3
REVIEW OF COMMITTEE AND CHARTER
The Committee shall periodically review the role of the Committee and this Charter and make recommendations to the Independent Trustees with respect thereto.
MAINTENANCE OF CHARTER
Each Fund shall
maintain and preserve in an easily accessible place a copy of the Committee Charter established for the Fund and any modification to the Charter.
4
EXHIBIT A
PRINCIPAL SHAREHOLDERS OF THE FUND
As of February 13, 2013,
the following persons were the owners of more than 5% of the outstanding shares of the following classes of shares of the Fund. Shareholders indicated with an (*) below hold greater than 25% of the class of shares indicated and therefore may be
deemed to be controlling persons of the Fund:
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Title of Class
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Name of Beneficial Ownership
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Amount and Nature of
Beneficial
Ownership
|
|
Percent of Class
|
|
Auction Rate Preferred Shares
|
|
Citigroup Global Markets Inc.
Citigroup Financial Products Inc.
Citigroup Global Markets Holdings
Inc.
Citigroup Inc. (collectively, Citigroup)*
|
|
939 shares as of
December 31,
2009
1
Broker Dealer and Parent Company or Control
Person
|
|
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54.6
|
%
1
|
|
|
|
|
Auction Rate Preferred Shares
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|
Morgan Stanley
Morgan Stanley & Co. Incorporated (collectively, Morgan Stanley)*
|
|
483 Shares as of
December 31,
2009
2
Broker Dealer and Parent Company or Control
Person
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|
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28.1
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%
2
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|
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Common Stock
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|
First Trust Portfolios L.P.
First Trust Advisors L.P.
The Charger Corporation
(collectively, First Trust)
|
|
644,345 shares as of
December 31, 2011
3
Broker Dealer, Investment Adviser and Parent Company or Control Person
|
|
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5.0
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%
3
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|
Ownership information for those persons who own 5% or more of a class of our outstanding shares is based upon Schedule 13 filings made with the Securities and Exchange
Commission.
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(1)
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The following information is based on a Schedule 13G filed by Citigroup on February 3, 2010. The address of Citigroup is 388 Greenwich Street, New York, NY 10013
except for Citigroup Inc. for which the address is 399 Park Avenue, New York, NY 10043.
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(2)
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The following information is based on a Schedule 13G filed by Morgan Stanley on February 12, 2010. The address of Morgan Stanley is 1585 Broadway, New York, NY
10036.
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(3)
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The following information is based on a Schedule 13G filed by First Trust on January 20, 2012. The address of First Trust is 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187.
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EVERY SHAREHOLDERS VOTE IS IMPORTANT
|
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|
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|
EASY VOTING OPTIONS:
|
|
|
|
|
|
|
|
VOTE ON THE INTERNET
Log on to:
www.proxy-direct.com
or scan the QR code
Follow the on-screen instructions
available
24 hours
|
|
|
|
|
|
|
|
VOTE BY PHONE
Call 1-800-337-3503
Follow the recorded instructions
available
24 hours
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|
VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope
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|
|
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VOTE IN PERSON
Attend Shareholder Meeting
270 Park Avenue, 11
th
Floor
New York, NY 10017
on April 24, 2013
|
Please detach at perforation before mailing.
|
|
|
|
|
PROXY
|
|
PACHOLDER HIGH YIELD FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 24, 2013
|
|
PROXY
|
Common Stock, $.01 Par Value
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby
appoints James E. Gibson, Wendy S. Setnicka, Joy C. Dowd and Matthew J. Plastina, and each of them, as proxies with power of substitution, and hereby authorizes each of them to represent and to vote as designated on the reverse side, 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 April 24, 2013, and at any adjournments thereof.
Receipt of the Notice of Annual Meeting of Shareholders dated March 1, 2013 and the accompanying Proxy Statement, which describes the matters to
be considered and voted on, is hereby acknowledged. 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 THE PROPOSAL. In
their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and any adjournments thereof.
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VOTE VIA THE INTERNET: www.proxy-direct.com
|
VOTE VIA THE TELEPHONE: 1-800-337-3503
|
999 9999 9999 999
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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.
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Signature
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Signature (if held jointly)
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Date
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PHY_24305_012413_A
|
PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.
EVERY SHAREHOLDERS VOTE IS IMPORTANT
Important Notice Regarding the Availability of Proxy Materials
for the Pacholder High Yield Fund, Inc. Shareholder Meeting to Be Held on April 24, 2013.
The Proxy Statement and Annual Report for this meeting are available at:
https://www.proxy-direct.com/phy-24305
Please detach at perforation before mailing.
The Board of Directors recommends a vote
FOR
the listed nominees.
PLEASE MARK
VOTES AS IN THIS EXAMPLE:
¢
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1.
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Election of Directors:
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FOR
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WITHHOLD
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FOR ALL EXCEPT
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01. John F. Finn
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02. Dr. Matthew Goldstein
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03. Robert J. Higgins
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¨
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¨
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¨
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04. Frankie D. Hughes
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05. Peter C. Marshall
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06. Mary E. Martinez
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07. Marilyn McCoy
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08. Mitchell M. Merin
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09. William G. Morton, Jr.
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10. Dr. Robert A. Oden, Jr.
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11. Marian U. Pardo
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To withhold your vote for any nominee(s), mark the For All Except box and write the nominees number on the
line provided below.
|
|
|
|
|
|
|
PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.
PHY_24305_012413_A
EVERY SHAREHOLDERS VOTE IS IMPORTANT
|
|
|
|
|
|
|
EASY VOTING OPTIONS:
|
|
|
|
|
|
|
|
VOTE ON THE INTERNET
Log on to:
www.proxy-direct.com
or scan the QR code
Follow the on-screen instructions
available
24 hours
|
|
|
|
|
|
|
|
VOTE BY PHONE
Call 1-800-337-3503
Follow the recorded instructions
available
24 hours
|
|
|
|
|
|
|
|
VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope
|
|
|
|
|
|
|
|
VOTE IN PERSON
Attend Shareholder Meeting
270 Park Avenue, 11
th
Floor
New York, NY 10017
on April 24, 2013
|
Please detach at perforation before mailing.
|
|
|
|
|
PROXY
|
|
PACHOLDER HIGH YIELD FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 24, 2013
|
|
PROXY
|
Series W Auction Rate Cumulative Preferred Stock, $.01 Par Value
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints James E. Gibson, Wendy S. Setnicka, Joy C. Dowd and Matthew J. Plastina, and each of them, as proxies with power of substitution, and hereby authorizes each of them to
represent and to vote as designated on the reverse side, all the shares of Series W Auction Rate 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 April 24, 2013, and at any adjournments thereof.
Receipt of the Notice of Annual Meeting of
Shareholders dated March 1, 2013 and the accompanying Proxy Statement, which describes the matters to be considered and voted on, is hereby acknowledged. 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 THE PROPOSAL. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and any adjournments
thereof.
|
|
|
|
|
VOTE VIA THE INTERNET: www.proxy-direct.com
|
VOTE VIA THE TELEPHONE: 1-800-337-3503
|
999 9999 9999 999
|
|
|
|
|
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.
|
|
|
Signature
|
|
|
Signature (if held jointly)
|
|
|
Date
|
|
|
|
PHY_24305_012413_B
|
PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.
EVERY SHAREHOLDERS VOTE IS IMPORTANT
Important Notice Regarding the Availability of Proxy Materials
for the Pacholder High Yield Fund, Inc. Shareholder Meeting to Be Held on April 24, 2013.
The Proxy Statement and Annual Report for this meeting are available at:
https://www.proxy-direct.com/phy-24305
Please detach at perforation before mailing.
The Board of Directors recommends a vote
FOR
the listed nominees.
PLEASE MARK
VOTES AS IN THIS EXAMPLE:
¢
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
Election of Directors:
|
|
|
|
|
|
FOR
|
|
WITHHOLD
|
|
FOR ALL
EXCEPT
|
|
|
01. John F. Finn
|
|
02. Dr. Matthew Goldstein
|
|
03. Robert J. Higgins
|
|
¨
|
|
¨
|
|
¨
|
|
|
04. Frankie D. Hughes
|
|
05. Peter C. Marshall
|
|
06. Mary E. Martinez
|
|
|
|
|
|
|
|
|
07. Marilyn McCoy
|
|
08. Mitchell M. Merin
|
|
09. William G. Morton, Jr.
|
|
|
|
|
|
|
|
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10. Dr. Robert A. Oden, Jr.
|
|
11. Marian U. Pardo
|
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12. Frederick W. Ruebeck
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13. James J. Schonbachler
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|
|
To withhold your vote for any nominee(s), mark the For All Except box and write the nominees number on the
line provided below.
|
|
|
|
|
|
|
PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.
PHY_24305_012413_B
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