# Pacholder High Yield Fund, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ab0f4fa4a85704ec1 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text January 18, 2013 Frank J. Nasta Pacholder High Yield Fund, Inc. 270 Park Avenue New York, NY 10017 Re: Pacholder High Yield Fund, Inc. (“Fund”) Incoming Letter dated November 19, 2012 Dear Mr. Nasta: The proposal would require that certain information be included in the annual and quarterly reports of the Fund. There appears to be some basis for your view that the Fund may exclude the proposal under rule 14a-8(f) under the Securities Exchange Act of 1934 (the “Exchange Act”). We note that the proponent appears to have failed to supply, within 14 calendar days of receipt of the Fund’s request: (1) documentary support sufficiently evidencing that he satisfied the minimum ownership requirement for the one-year period required by rule 14a-8(b) under the Exchange Act; and (2) a written statement that the proponent intends to hold the requisite amount of the Fund’s securities through the date of the shareholder meeting as required by rule 14a-8(b) under the Exchange Act. Accordingly, we will not recommend enforcement action to the Commission if the Fund omits the proposal from its proxy materials in reliance on rules 14a-8(b) and 14a-8(f) under the Exchange Act. Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-6773. Sincerely, Kieran G. Brown Senior Counsel Office of Disclosure and Review Attachment cc: Gil Marchand DIVISION OF INVESTMENT MANAGEMENT INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240. 14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent or the proponent's representative. The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary- procedure. The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the merits of an ihvestment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly a discretionary determination not to recommend or take Commission enforcement action, does not preclude a proponent, or any shareholder of an investment company, from rights he or she may have against the investment company in court, should pursuing the management omit the proposal from the investment company's proxy material. any Pacbo ldcr High Yicld Fu nd, Inc. 270 Park Avenue New York, NY 10017 November 19. 2012 Via Elcctronic Mail (IMshareholderproposa ls@sec.gov) U.S. Securities and Exchange Conunission Division of Investment Management Office of Disclosure and Review 100 F Street, N.E. Washington, D.C. 20549·8626 Re: Pacholder High Yield Fund. Inc.- Stockholder Proposal Submitted bv Gil Marchand Ladies and Gentlemen: The Pacholder High Yield Fund, Inc., a closed-end investment company listed on the NYSE MKT (the "Fund"), is filing this letter under Rule 14a-8(j) of the Securities Exchange Act of 1934, as amended (the "Exchange Ace) to notify the Securities and Exchange Comm ission (the "Commission'") of the Fund's intention to exclude a stockholder proposal from the proxy materials for the Fund's 2013 annual meet ing of stockholders. Mr. Gil Marchand (the "Proponent") submitted a stockholder proposal on March 30, 2012 (the '·Proposal"). A copy of the Proponent's letter and Proposal is attached hereto as Exhibit A The Fund respectfull y requests that the Commission's Division of Investment Managcment staff (the "StafT') not recommend that enforcement action be taken by the Commission against the Fund if the Fund excludes the Proposal from its 2013 proxy materials for the reasons set forth be low. The Fund intends to file its definitive proxy materials for its 20 13 annual meeting on or about March I, 2013. This letter and its exhibits are being subm itted via e-mail to IMshareholderproposals@sec.gov. A copy of this letter and its exhibits will also be sent to the Proponent. I. BAC KGRO UND On March 30, 2012, the Fund recei ved a letter from the Proponent that included the Proposal. The letter stated that the Proponent was "a qualified shareholder under Rule 14a-8 of the Act" but did not include any further information about the Proponent, such as a written statement that the Proponent intends to continue to hold the securities through the date of the shareho lder's meeting Or proof of ownership. The Fund has eonfinned that the Proponent is not a shareholder of record . On April 11, 20 12, in accordance with Rul e 14a-8(f), the Fund sent a letter (the " Response Letter") via Federal Express to the Proponent I notifyi ng him that he did not comp ly with the eligibility and procedural requirements of Rule 14a-8. The Response Letter set forth the eligibility and procedural requirements, included a copy of Rule 14a-8 and also stated that the Proponent had 14 calendar days from receipt to provide the req uisite information. A copy of the Response Letter is attached hereto as Exhibit B. As o f the date of submission of thi s letter, the Fund has not received any further correspondence from the Proponent. II. BASIS FOR EXCLUS ION Rule 14a·8(f)(I) a nd Rule 14a-8(b)(2) - The Proposa l May Be Excluded Pursuant to Rule 14n-8(f)( I) Becnuse the Proponent Did Not Provide the Required Proof of Eligibility and a Written Statement that the Proponent Intends to Continue to Hold the Securities Through the Date of the Shareholder 's Meeting. Rul e 14a-8(b)(2) provides that in submitting a proposal, if a shareholder is not a registered holder of the securities, he or she must provide proof of beneficial ownership of the securities to the co mpany in one of two ways. The shareho lder can either: (i) submit a written statement fro m the "record" holder of the securities veri fying that, at the time the proposal was submitted, the shareholder continuously held the securities for at least one year; or (ii) submi t a copy ofa fil ed Schedule l3D, Schedule 13G, Fonn 3, Fonn 4, Fonn 5, or amendments to those documents or updated fomls, filed with the Commi ssion reflecting ownership of securities for the one year period as of the date of the statement. In addition, the shareholder is requi red to include hi s or her own written Slatement that he or she intends to continue to ho ld the securities through the date of the shareholder's meetin g. The Proponent's letter stated that he was a "qualified shareholder under Rule 14a-8 of the Act", but did not include proof of beneficial ownership nor did it include a statement that the Proponent intends to continue to hold the securities through the date of the shareholder's meeting. Under Rul e 14a-8(f)(I), a company may exclude a shareholder proposal if the proponent is not the record owner and fails to provide appropri ate proo f of eligibility in accordance with the eligibility requirements of Rule 14a-8(b)(2), prov ided that the company timely notifies the proponent of the deficiency and the proponent fails to correct the deficiency within the required time period. The Staff has previously pennitted the exclusion of shareholder proposals pursuant to Rule 14a-8(1) w hen the proponent has fai led to provide sufficient documentary support of eli gibility under Rule 14a-8(b)(2).' The Fund sent the Response Letter, which notified the Proponent of the various procedural defects, to the Proponent within the required time period.) The Proponent did not I The Proponent did not inc lude any COlltact infonnatioo in his !cU"f. The Fund mailed the Response Leuer to the fCturn address listed on the envelope in which the Proponent's letter was sent. l See, e.g .. Guggenheim Enhanced Equity Strategy Fund (pub. HVHil. Mar. 21 , 20(2) (pennining exclusion whcre "thc proponent failed to supply documentary support sufficiently evidencing thal. he satisfied the minimum ownership requirement for the one·yeaT period required by rule 14a-8(b)"); Walgreen Co. (pub. 8\·ail. Oct. I, 2012) (pcnniuing exclusion where the "the propon"nt appcar!i to have failed 10 supply, within 14 days of receipt of Walgreen's request. documentary support sufficiently evidencing that he satis fied the minimum ownership requirement for the one·yellr period required by rule 14a·8(b)"). Included in Exhibit B is a delivery confirmation from Federal Express. respond to the Response Letter within the 14 calendar response deadline, as required by Rule 14a-8(f)(1). Any further verification the Proponent might now submit would be untime ly under the Commission's rules. Therefore, the Proposal is excludable pursuant to Rule 14a-8(f) because the Proponent did not remedy the eli gibility deficiency on a timely basis after notification by the Fund. III . CONCLUSION Based on the foregoing analysis, the Fund hereby respectfully requests that the Staff confirm that it will not recommend enforcement action be taken by the Commission against the Fund if the Fund excludes the Proposal from its 2013 proxy materials. We would be happy to provide any additional information and answer any questions that the Staff may have regarding this submission. If we can be of any further assistance in the matter, please do not hesitate to contact me at 212-684-0894 or via e-mail atfrank.j.nasta@jpmorgan.com. Please acknowledge receipt of this letter by return e-mail. Thank you for your attention to this matter. Very truly yours, ~r~ Frank J. Nasta, Secretary cc: Gil Marchand Exhibit A i • ~ c} ~ ;+- .J v r c p I " -n - '\ 0­ Ci~ r ? ,"~ f ,?­­ :>, 5r ­ ~ -,::c , '" I! ",,x ", ~-. 'p , "" - " ,-,'" " ~ ~ , f ;...) > - ~ , ~ ;'l '"", f-1 I Mr. Frank Na sta Secretary. Pacholder High yield Fund Inc. 270 Pa rk Ave. New York. NY 10017 Re : Shareholder Proposal Dear Mr. Nasta, I am a qualified shareho lder under Rule 14a-8 of the Act. I would like included in the 2013 proxy of the closed end fu nd listed above, the following proposal : The Company describe in its quarterly and annual reports a) downgrades and upgrades during the most recent report period b) realized gains and losses of more than 10% during the most rece nt report period c) defa ults experienced in the most recent reporting period d) any recoveries experienced during the most recent reporting period e) any cumulative hold ings in a borrower that is more than 3% of net asset s. the current marks on the security or securities of each borrower over 3% of net assets as of the end of the reporting period and a very brief description of the manager's view of the borrower or borrowers. 11 dS/ Re~r~ GQ archand Exhibit B P:u.'holdc r High Yield Fund, ln c. 270 Park A venue New York, NY 10017 April 11, 2012 Vila Overn igh l Mail Attn: Gil Marchand Kni ghts of Columbus I Co lumbus Plaza New Haven, CT 06510-3326 Re: Shareholder Report Proposal - Pacholdcr Hi gh Yield Fund. Inc. (the "Fund") Dear Mr. Marchand: I am writing in responsc to your lettcr we received on Friday, March 30, 2012 in wh ich you request we include a proposal in the Fund ' s 2013 proxy statement to require certain information in the Fund's shareholder reports. We appreciate your proposal and have carefully considered it. However. after reviewing the information co ntained in the current reports against the information requested in yo ur proposal, we kindl y ask that you consider withdrawing the proposa l in light of the robust disclosure already contained in the Fund's repons and elsewhere. which we believe addresses much of you r proposal (as we detail further below). If, aCier considering this letter, YOll would like to continue with yOllr proposal, we ask that you resllbmit your proposal to comply with a number of securities law procedural requirements described below. The Securities and Exchange Commission (SEC) requires that registered management investment companies, such as the Fund. make available 10 shareholders and/or file with the SEC certain reports, and that the COnlent of these reports contain certain infonnation. The infonnation contained in the Fund 's reports is designed to comply with these care fully constructed SEC requiremen ts, which, for semi-annual and annual reports, require the inclusion of: • • • • Financial statements; A lisl of portfolio ho ldings; A chart depicti ng the portfolio holdings by a reasonably identifiable category (e.g., industry sector); and Financial highlights. including certain per share operating performance data. For quarterly reporting, the SEC requires that the Fund file ~_-t?TFrank J. Nasta. Secretary I hercby withdraw the shareholder report proposal for Pacholdcr High Yield Fund, Inc. Date: _ _ __ _ __ Gil Marchand Regulations 14A, 14C, a nd 14N (I)roxy Rules) Rule 1 4.'1-~ Rule 14a-8 , 5728 Shurcho lde r !'roposals.· llu~ section addresses when a com pany m ust illClutle a !o.h an:holOcr's proposal in its pro:o;y statement and identify the proposal in il~ form of proll:)' when the cornp:my holds :In annUlll or ~pecilll meeting of shareholdcr1i. In summary. in order 10 ha\'e your sh;m:holder propo!IIIl iocludt:d (1(\ a compuny's pro'\;)' card. and inclu,k:d along wi th nny supporting statement in its proxy stllte­ ment, )'ou mn"" he ellgihle and follow certain pmcedure.~. Under B fe\\,' spoc:inc drcumSl.:mccs. the C(mlpotny i, rermiU"d UJ exclude your I'TOpOsal. Out only after submrUrng Il' re:t.~'n.~ 10 the COlllnlL~sion . We structured this section in a quc.qkm-{lnd-answer fomUlI !l0 that II LS easier to undC'r1iland. The references to "you" ;Lre to a shareholder ....."C ~ ing 10 ~ubmi t lhe proposal. (a) Q uestion I : W h:1I is >I Pro IMJSaI? A !J\:lrehold",- propos:lI is YOILr recommendation or rcqu ircmcOlt hat the f;OI'np;:my and/or illl boon! of diT1l(.1(>I"li take action, ..... hith you intend \0 present at a mccling uftl-.e eomJlll n y'~ sh.:m:holdellO, Your proposal should stnle (l.~ e lenr ly as possihle lhe COUl'llC of actiOn Ih:1t yo u be lieve the t'Olnpany should fnllow. If your Jlffil'ns:t..I is placed o n the COTllP:U1Y'~ proxy can!. the CU1ll pnny m llst liiso provitle in lhe form of lm);\y mellllS for siJ;lreh"ldcn; to ~pcdry by boxes M cho ice bt'lwee:n aPl"rlIvnl or disa l}('fOvUI, or nbsteminn. Unle.~s N hcrwisc indicu!OO. (he word "proposal" I~~ w.ed in (hi s ..:celion refers boIh !O your propot-al. (md 10 your corn.:~I'(){ldi ng st3temcnl in support of your propos;1l (if any). (h) Qu(';;tloll 2: Who is eli~i hl e 10 s u b mi t II p r o posa l, Imd Imw do I dCllluIIsln tl r 10 lite l'omprillY IIUlt t lim eligi ble? (I) In order tn be eligible to submi t a proposal, ylMI must have tounli nuollsly hel d :lt leas! S2,uno ill Inmet value, nr 1%. of the compa ny's scc urilie.~ entitled 10 be \ntf,.'{] on the proposal 01.1 the meeting for al leasl one year by the dale you submit tile proposal. You must continue to hold I~ ~u(ilies through the date of the mccting, (2) If you an: the registered holtler of your securi ties. wh ich means that your name :Ippear5 in lhe company's rt."\.ouros as a shar\:hoIdcr, lhe company ea n verify your eitgibi lity on ils own. :Illhough you will Slill run'e to provide the COtnp;llly wit h a written statement that you inlend \0 contmue 10 hold the sccurilic.~ Ihrough Ihe dale of lhe meeling o f shmoolders. Huwever. if tile many shareholders yOIl are not a regislered holder, the eOmp.1rly likely does nO! know Ihal you are a shareholder. or how many sh3res you own. In Ihis case. allhe. Ijn~ yoo suhmit your proposal. you must pnwe )'our eligihilily to the etlrnl'any in one of 1.....0 wa)~: (i)'Ibt: lir1it way b to ~ubmil 10 the company a wrillen ~Iatemcnt from the "1'1Xord" holder of )'our "I.'Curitie.~ (usulllly a hroter Of bantl ven fying that, at the tllne you SUhlllitted your proposal. )CM1 emmnu()LJsly held the securilies for allea.q onc year. Ynu mUM also incluUe your OIN" written Malemem Ihal you rntend 10 conlinue 10 huld lilt., secUrilLe.~ through the dme of the meeting nf sh:u'eholdcl'~: or ( ii) TIle second way 10 prove oINllCrsh ip nppl iCti only if you have nJcd a Schedu le 130, Schedule IlG. Form 3, Fonn 4 and/or Fonn 5. or amend lm:n ls 10 thulIC doc ume nls or updated fonns. renr:cli ng yOLir ownersh ip of the sh;!fCS as of or be fu~ lhe dale CII\ whieh the onc-ycar +1'..HL'Clivc ScptClnocr 20, WI I , Rule 141.-8 WlL' 3nICndild by n::vi~i l!lI poILrngraph (1){111 as p:m of the amendments f:lCilila1inll !ih:utbuJller dircns of !be DudtJ_F.....,k /1.,\ ,."'"rina \0 """'""hol~ approVAl of e~eru\i\"l.' ~nsaclO·9178, (HUU.lmN No, 26 1, 10- 14-11) Rule 14a-8 Regulations 14A, H e, and J4N (Proxy Rules) 5729 eligibility period beghL~. If you h.'IYe: filed one. of these documents with tiM! SEC. you may dem· Onstnlle ynur eligibility by subrnilling 10 the company: (A) A copy of the scbc:dule aod/or form. and any sui>scQuent amendme nts reporting I!. ch~nge in your ownership level; (8) Your wrillell SlalCfI)cm lhm you L'Oflti lllJO\J.miued for a regut:U'ly scheduled annual meeting. The pmp0i'i:I! must be n:eeived at the company's princip,'!1 ellecolive offices not Ie.~s lhan 120 calenpI,-'" i1 ; UNIltf' I/> PI,mgnw" (iX /0); A ~(l!l1pa ny mny c\c!ude a sha rehold~r prop()sal thai would an mlvi.""lry \'OIe or seck future lldyi .­ miued to the cnrnl,any by allOl.hcr proponcnlthal will be incl uded in the ooll1p;\n y'~ pru~y malerials for the s.:J.rnc meeting: (12 ) R~:mbmi.uiOl'S; If the ~I deals with subst.1ntially the samc subjC(:1 nUUlcr as another pmposltl (lr prupos:tls that hUll or have been previously included ill lhe COlllpany's proxy ntllteriu.ioclude it fmlll it5 prollY m3tcriil.l~ for any meeting held within 3 calendar )'cars of Ihe 1n.(1 lime it was induOcd if the propn calendar ye ars: (ii) l..ess than 6% of the yote on its Iw;t submission 10 ~hareholdcrs if I'roposctl twice preyiously within the pn.:ceding S calendar yean: Of ·Effocl; ve September 20.2011 . I(ule 1.la-8 was arllendcd hy revi.ing p:ln.grnph (i)(M) as pat! or lho: ulIlcndmcnts f:M:ilil:uillll shllrcholder di,eclor n"rninaLI(>n~. Sec SI;C Release Nos. 31·92.~9: 34-tiSJ4J: IC· 29?K8: September ".2011. See also SEC Rcle:\.'\C No,;. .13-9136: 34-621fl4: [C-29384 (Aull. 25. 2(10): SEC' Release NO'. 3)-9 [49: 34-6.303t: lC·29-t.s6 (M 0( lho: Dodd- r'1"1U\t Ac! "'t:U'n, 10 llhareholder lIpproval of execuli,'e "'''''l'''llSaIion ~nd ",Iokn pnrochutc eOlnp;!1UaIi •.., atrMgcmcnlll. Sec SEC Rde""" NO&. 3.\-91111: 1-1..(>3168; bnu:ory 25. 201 t. ("","j",~.(' IAUf': ,\prH 4. 2011 . For other rompU= dale!' ",[mcd CO lhi~ relc~. '" SEC Iklcasc N". )3'11111. ( n LII.t.Y.TIN No. 261 , 10. [4- ( 1) Rule 14:1-8 Reguhttions 14A, J4C, a nd 14N (proxy Rules) 5732 (iii) Le!>.~ th:ln 10% of the vote nn ils III~I ~ lIbl1l i~sion to shareholders if proposed three limes or more previously lVithin the preceding 5 !;nlendur y~rs; :Uld ( 13) Spt!cific A//Imlllf of l)jfid~lIds: If the proposal relates 10 slX-'Cifi e amounts of cas/lor stnd dIvide nds. (jl Q Ul'!Sl io n 10: \"h;It pfiloCed u rt'S mus l thl' comp.my follow if It intends 10 exdool' my p ro lJOSaI? (I) If the compan y mteoos 10 exclude II proposnl from tl~ proxy lllatCfillL~, it must file itll rcason.~ wi th the Cnmmission no Imer than 80 ealendoJr days before it fill'S it ~ definitive proxy slIltcmenl and form o f pro"y wlIh Inc COlllmi~sion. 11te company mu.~t ~inlUl lancousl y provide )"ou wi th II copy of iL~ submission. The Commis..\ion s(aff rna)" permit the ~'OIlljXUly 10 mili il$ IiUbmi.'lS1on lata thall 80 day~ before the company files ilS definiti' e proxy statement and foml o f proxy. if the company dcmOllslr,ilCS good cause for mis.'1ing lhe deadline. (2) The conlp~ ny must file siJo. pilper ooPlc.~ of the follo wing: (il 1ltc proposal: (ij) An expl;mll tio n of why the cOIl1p:tny bclieve~ th:1I it may excl ude the ptopOS.:ll, whi ch should, if pos..~ible. refcr to the mo~t rece nt uppli cllble authority. soch Il~ prior Divillion letters is.~llcd unOcr tbe rule:; .illd (iii) A supponing OIli nion of cotm seJ when such rca....>IlS are ba.~ on matten. or stilte or foreign law. ( k) Queslion I J: May I s ubmit III)' 0\0"0 s t:d e ment to the COl11l11is.'iiOiI reslK)udillj! to the t'olllfla IlY's ar"l:u llle nt.~·! Yes, you lIIay submit a response. but it is ont r1.ion IZ: Ir Ihe com pan), includes my s hare holder Jlroposal io i t.~ proxy mate rial'!. what information lIhout me ,IIlL'> ' iI incl ude alo ng with Ihe pro lM.s;\I itwlr! ( I ) The company '~ P'Uxy slutemcut mus t include your nllme and a(k1res.~. as well M the number or the c(lll1p:m y's voting scc urit il!!i [hat you hold. j·loW\:ve r. itL"te:ld of providing tlt'll inf'nlllation. Ihe comp;LJiy m"y instead include It .~tatcmentthat il ", ill provide the infonnat ion to .~ hllT1.'holdcrs promptly up",n receiving an oral Of writt en requeSl. cn The company is nOi l"C..«pon..ible for the contcnL~ of your proposal Of supporting SI.:llemCni. (m) Q ueslion 13. W hal ca n J dn if the COlllllao Y ind n des in illl Il roxy slatement rt'asons why il hel il'n's s hnreh"Jdf.'n> s hould nut \'o le In f,I\'