SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.   )

Filed by the Registrantx                            Filed by a Party other than the Registrant¨

Check the appropriate box:

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)

Payment of Filing Fee (Check the appropriate box):

PACHOLDER HIGH YIELD FUND, INC.

245270 Park Avenue

New York, New York 1016710017

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held on April 22, 200925, 2012

March 3, 2009February 29, 2012

To the Shareholders:

The Annual Meeting of the shareholders of Pacholder High Yield Fund, Inc. (the “Fund”) will be held on April 22, 2009,25, 2012, at 11:10:00 a.m., Eastern Time, at 245270 Park Avenue, New York, New York 10167.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 approve a new investment advisory agreement between the Fund and J.P. Morgan Investment Management Inc. to take effect on May 1, 2009 (Proposal 2);

3. To approve the amendment of one of the Fund’s investment restrictions to permit the Fund to write covered call options and purchase call options to close out open covered call options (Proposal 3);

4. 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 23, 200915, 2012 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:

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 22, 2009.25, 2012.

This proxy statement is available at the website listed on your proxy card.

By Order of the Board of Directors,

By Order of the Board of Directors,

Jessica K. Ditullio

Secretary

Frank J. Nasta

Secretary

PACHOLDER HIGH YIELD FUND, INC.

245270 Park Avenue

New York, New York 10017

PROXY STATEMENT

Annual Meeting of Shareholders to be held on April 22, 200925, 2012

This proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Pacholder High Yield Fund, Inc. (the “Fund”) for use at the annual meeting of shareholders to be held on April 22, 200925, 2012 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, for Proposal 2 and Proposal 3, 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 3, 2009.February 29, 2012.

The Board has fixed the close of business on February 23, 200915, 2012 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 12,950,90512,969,950 shares of Common Stock and 17201,720 shares of Series W Auction Rate Cumulative Stock (“ARPS” or “Preferred Stock”). To the Fund’s 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, 2008,2011, the directors and officers of the Fund as a group owned beneficially 8,305.4132,180 shares of the Common Stock of the Fund.

Holders of the Fund’s 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 Fund’s ARPS will vote separately from holders of the Common Stock to elect two additional directors. As described herein under the section entitled “Proposal 2: Approval of Investment Advisory Agreement” and “Proposal 3: Amendment of Investment Restriction on Covered Calls,” holders of Common Stock and ARPS will vote together as a single class and, in addition, holders of ARPS will vote separately as to Proposal 3. 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 Fund’s charter with respect to the item of business. Each full share of the Fund’s Common Stock or ARPS is entitled to one vote and each fractional share of the Fund’s 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 New York Stock Exchange (“NYSE”) and the NYSE Alternext US,Amex, 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 firm’s 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 and the NYSE Amex 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 Fund’s 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

BackgroundBackground.

The Board, based on the recommendation of the NominatingGovernance 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 JPMorganJ.P. Morgan Funds, as defined below. Each of the Nominees was elected at the shareholder meeting held on April 27, 2011. 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 Fergus Reid, III, William J. Armstrong, John F. Finn, Dr. Matthew Goldstein, Robert J. Higgins, Peter C. Marshall, Marilyn McCoy, William G. Morton, Jr., Dr. Robert A. Oden, Jr., Frederick W. Ruebeck, James J. Schonbachler, Frankie D. Hughes, and Leonard M. Spalding, Jr. None of the Nominees have served as directors of the Fund. The Nominees are also trustees of the JPMorganJ.P. Morgan Funds, a mutual fund complex consisting of 138154 registered investment companies advised by J.P. Morgan Investment Management Inc. (“JPMIM” or the “Adviser”), the Fund’s investment adviser or its affiliates. JPMIM is a wholly owned subsidiary of JPMorgan Chase & Co., a leading global financial services firm with assets of $2.2$2.3 trillion and operations in more than 60 countries.

The Fund is currently overseen by a Board of six members. At a meeting held on January 15, 2009, the current Board, based upon the recommendation of the Nominating Committee, increased the number of directors of the Fund from six to thirteen, with such increase to take effect immediately after the Annual Meeting. The increase in the number of directors and the nomination of the thirteen Nominees is one of the last of a series of initiatives that are designed to, among other things, further integrate administration of the Fund with the JPMorgan Funds following the July 1, 2004 merger of Bank One Corporation into JPMorgan Chase & Co., the

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acquisition by JPMorgan Investment Advisors Inc. in 2005 of Pacholder Associates, Inc.’s 51% ownership interest in Pacholder & Company, LLC (“P&C”), the predecessor investment adviser to the Fund, and the merger of P&C into JPMIM in 2006. Since July 1, 2004, JPMIM and its affiliates have actively taken steps to integrate the fund operations acquired through these transactions to the greatest extent possible in order to take advantage of operational and administrative efficiencies that are expected to be achieved by such integration. One way to achieve such efficiencies is the election of a single Board for the Fund and the other U.S. registered investment companies advised by JPMIM and its affiliates (the “JPMorgan Funds Board”). This includes the election of the JPMorgan Funds Board for the Fund and certain other registered investment companies overseen by the current Board.

The current Board of the Fund (the “Alternative Products Board”) was elected at the shareholder meeting held onOn April 11, 2008 and resulted in the creation of a single Board for the Fund and other registered investment companies overseen by the Alternative Products Board. At the time the Alternative Products Board was elected, it was anticipated that the Alternative Products Board would oversee additional closed end and alternative strategy funds advised by JPMIM as they were formed and brought to market. Due to current economic conditions, it is unlikely that new funds of these types will be introduced on the schedule originally anticipated by JPMIM. In addition, it is anticipated that the number of Funds overseen by the Alternative Products Board will decrease as a result of the mergers discussed below. This anticipated decrease led Alternative Products Board to question whether a separate Board for JPMIM’s alternative products remained viable from an economic and administrative standpoint. In considering this question, JPMIM and the Alternative Products Board took into account the desire to provide fair compensation to the Alternative Products Board members for their services, incidental expenses incurred by the funds and the administrative burden and costs associated with maintaining multiple boards. The Alternative Products Board also serves as the Board for: (1) the J.P. Morgan Series Trust II, a registered investment company which consists of five funds whose shares are sold to insurance company separate accounts to fund variable insurance products (“Series Trust II”); and (2) JPMorgan Institutional Trust, a registered investment company which consists of five funds¹ whose shares are sold to institutional investors in private placement transactions. On November 18, 2008, the Series Trust II announced that its Board of Trustees had approved, subject to shareholder approval, the merger of each of the Series Trust II funds into compatible series of JPMorgan Insurance Trust. The JPMorgan Insurance Trust is overseen by the JPMorgan Funds Board. In addition, JPMorgan Institutional Trust has filed a proxy to elect the Nominees as the Board of Trustees for JPMorgan Institutional Trust. If these initiatives are approved by the shareholders of Series Trust II and JPMorgan Institutional Trust, respectively, the JPMorgan Funds Board will effectively serve as the Board of the Funds that currently comprise Series Trust II and will also serve as the Board of JPMorgan Institutional Trust.

Ms. Ballenger, the Chairman of the Alternative Products Board27, 2011, Mr. Ruebeck and Mr. WilliamsonSchonbachler were elected by ARPS shareholders voting as a separate class on April 11, 2008.class. The proposal contemplates that Mr. Ruebeck and Mr. Schonbachler, the chairman and a member, respectively, of the Fixed Income InvestmentsInvestment Sub-Committee described below, would serve as candidates for election by holders of the ARPS.ARPS voting as a separate class at the 2012 annual meeting of shareholders.

Additional information concerning

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Nomination Process.

The Board’s Governance Committee functions as the board restructuring proposalNominating Committee and Compensation Committee with respect to the Fund. At the November 8-10, 2011 Board meeting, the Governance Committee and Board evaluated each Nominee both individually and in the broader context of the Board’s overall effectiveness. Based on the Governance Committee’s recommendation, the Board 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 Nominees is set forth below.

Description of the Board Restructuring Proposal.At the December 10-11, 2008 and January 15, 2009 meetings of the Board, JPMIM and JPMorgan Funds Management, Inc. (“JPMFM”), the Fund’s administrator, presented a proposal (the “Proposal”) to restructure the Fund’s Board soin concluding that the JPMorgan Funds Board would

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each Nominee should serve as the Boarda Director of Directors of the Fund. The Board for the Fund and, the JPMorgan Funds would consist of thirteen members, including allwith respect to Mr. Ruebeck and Mr. Schonbachler, their nomination to stand for election by holders of the thirteen existing membersARPS voting as a separate class.

Qualifications of the JPMorgan Funds Board.Nominees.

Fergus Reid serves as the Chairman of the JPMorgan Funds BoardThe Governance Committee and the Proposal contemplatesBoard considered the commitment that if electedeach Nominee has demonstrated in serving on the Board including the significant time each Nominee 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 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 has made to the Board in terms of experience, leadership, independence and the ability to work well with other Board members.

With respect to each Nominee, the Governance Committee and the Board noted the additional experience that each of the Fund, he would serveNominees has gained with respect to registered investments companies as Chairmana result of their service on the Fund’s Board as well. The JPMorgan Funds Board members serve as trustees for the following registered investment companies: (1) JPMorgan Trust I, a registered investment company which consists of 78 funds; (2) JPMorgan Trust II, a registered investment company which consists of 41 funds; (3) J.P. Morgan Mutual Fund Group, Inc., a registered investment company which consists of the JPMorgan Short Term Bond Fund II; (4)Funds Board. The J.P. Morgan Fleming Mutual Fund Group, a registered investment company which consists of the JPMorgan Mid Cap Value Fund; (5) J.P. Morgan Mutual Fund Investment Trust, a registered investment company which consists of the JPMorgan Growth Advantage Fund; (6) JPMorgan Insurance Trust, a registered investment company which consists of 11 funds; (7) Undiscovered Managers Funds, a registered investment company, which consists of four funds, and (8) UM Investment Trust, a registered investment company, which consists of the Undiscovered Managers Multi-Strategy Fund.

The JPMorgan Funds overseen by JPMorgan Fundsthe 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 (6)(7) specialty funds including market neutral funds, long/short funds and funds that invest in real estate securities. Members ofsecurities and commodity-related securities and derivatives. The Governance Committee and the Board also considered the experience that each Nominee had with respect to reviewing agreements with the Fund’s portfolio management team also serve onservice providers in connection with their broader service to the portfolio management team of several of the JPMorganJ.P. Morgan Funds including the JPMorgan High Yield Bond Fund,Fund’s investment adviser, custodian, fund accountant, and securities lending agent.

The Governance Committee and the JPMorgan Tax Aware High Income Fund,Board also considered the experience and JPMorgan Strategic Income Opportunities Fund. With respect tocontribution of each Nominee in the JPMorgan High Yield Bond Fund,context of the portfolio management team is the same as the portfolio management team that oversees the Fund.Board’s leadership and committee structure. The JPMorgan Funds Board has severalfive committees including anthe Investments Committee, athe Audit and Valuation Committee, the Compliance Committee, the Governance Committee, and a Governancethe Preferred Shares Committee. The Investments Committee has three sub-committees including an Equity Investment Sub-Committee, a Money Market and Alternative InvestmentsInvestment 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 JPMorganJ.P. Morgan Funds Board to effectively evaluate information for the 138154 Funds in the complex in a focused, disciplined manner.

In 2004, JPMorgan Chase & Co. merged with Bank One Corporation to form JPMorgan Chase & Co. Since July 1, 2004, JPMIM and its affiliates have actively taken steps to integrate the fund operations acquired through these transactions to the greatest extent possible. The Fixed Income Sub-Committee is responsiblecurrent Nominees were originally nominated as directors for fixed income funds including funds that use high yield strategies suchthe Fund in anticipation of the Fund’s 2009 annual shareholder meeting. As indicated in the 2009 proxy, the election of a single Board for the Fund and the J.P. Morgan Funds was designed to create operational efficiencies for the Fund and recognized the experience of the Nominees in serving on Boards of registered investment companies. The Governance Committee also considered the operational efficiencies achieved by having a single

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Board for the Fund and the other registered investment companies overseen by the Adviser and its affiliates as well as the Fund.extensive experience of certain nominees in serving on Boards for registered investment companies advised by subsidiaries or affiliates of Bank One Corporation and/or JPMorgan Chase & Co. (known as “heritage J.P. Morgan Funds” or “heritage One Group Mutual Funds”).

In reaching its conclusion that each Nominee should serve as a Director of the Fund and, with respect to Mr. Fred 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 the Nominees:

William J. Armstrong.  Mr. Armstrong has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 1987. Mr. Armstrong is currently a member of the Audit and Valuation Committee and is the Fund’s Audit Committee Financial Expert. He also served as Chairman of the Audit and Valuation Committee until February 2012. In connection with his duties to the Audit and Valuation Committee, Mr. Armstrong has participated in the appointment of the Fund’s independent accountants, the oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund, and acting as a liaison between the Fund’s independent registered public accounting firm and the full Board. Mr. Armstrong also serves on the Money Market and Alternative Investment Sub-Committee.

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. Mr. Finn also serves on the Audit and Valuation Committee. As a member of the Audit and Valuation Committee, Mr. Finn has participated in the appointment of the Fund’s independent accountants, the oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund, and acting as a liaison between the Fund’s independent registered public accounting firm and the full Board. Mr. Finn also serves on the Equity Investment Sub-Committee.

Dr. Matthew Goldstein.  Dr. Goldstein has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 2003. Dr. Goldstein 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 Trustees/Directors, periodic review of the compensation payable to the Trustees/Directors, review and evaluation of the functioning of the Board and its committees, oversight of any ongoing litigation affecting the Fund or J.P. Morgan Funds, the Adviser or the non-interested Trustees, oversight of regulatory issues or deficiencies affecting the Fund or J.P. Morgan Funds, oversight of the risk management processes of the Fund and J.P. Morgan Funds, and oversight and review of matters with respect to service providers to the Fund and J.P. Morgan Funds. Dr. Goldstein also serves as the Chairman of the Money Market and Alternative 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. Mr. Higgins serves on the Audit and Valuation Committee. As a member of the Audit and Valuation Committee, Mr. Higgins has participated in the appointment of the Fund’s independent accountants, the oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund, and acting as a liaison

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between the Fund’s independent registered public accounting firm and the full Board. Mr. Higgins also serves as Chairman of the Equity 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 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 Trustees/Directors, periodic review of the compensation payable to the Trustees/Directors, review and evaluation of the functioning of the Board and its committees, oversight of any ongoing litigation affecting the Fund or J.P. Morgan Funds, the Adviser or the non-interested Trustees/Directors, oversight of regulatory issues or deficiencies affecting the Fund or J.P. Morgan Funds, oversight of the risk management processes of the Fund and J.P. Morgan Funds, and oversight and review of matters with respect to service providers to the Fund and J.P. Morgan Funds. Mr. Marshall also serves as a member of the Money Market and Alternative 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 the Fund’s and the J.P. Morgan 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 J.P. Morgan Funds 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 Trustees/Directors, periodic review of the compensation payable to the Trustees/Directors, review and evaluation of the functioning of the Board and its committees, oversight of any ongoing litigation affecting the Fund or J.P. Morgan Funds, the Adviser or the non-interested Trustees/Directors, oversight of regulatory issues or deficiencies affecting the Fund or J.P. Morgan Funds, oversight of the risk management processes of the Fund and J.P. Morgan Funds, and oversight and review of matters with respect to service providers to the Fund and J.P. Morgan Funds. 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. Currently, the Fixed Income Investment Sub-Committee is responsible for 3837 fixed income funds including allthe Fund. Dr. Oden is also a member of the other registered investment companies managed by membersCompliance Committee. As a member of the Compliance Committee, he has participated in the oversight of the Fund’s portfolio management team. The Fixed Income Sub-Committeeand the J.P. Morgan Funds’ compliance with legal and regulatory and contractual requirements and compliance policies and procedures.

Fergus Reid III.  Mr. Reid is Chairman of the Board of the Fund. Mr. Reid has also has access to information about other JPMorgan Funds that are not managed byserved as the portfolio management team that utilize high yield strategies.

In addition toChairman of the Investments Committee, the JPMorganJ.P. Morgan Funds Board also has a Governance Committee, a Compliance Committeesince 2005 and an Audit Committee. This Committee structure allowswas Chairman of the JPMorganheritage J.P. Morgan Funds Board, to effectively manage its workload and evaluateserving as a large volumemember of information forsuch Board since 1987. Mr. Reid is the funds for which it is responsible.

Nominating Committee and Board Consideration of Proposal. Subsequent to the Board meeting on December 10, 2008, the Nominating Committee received from JPMIM and JPMFM additional information concerning the Proposal which included: (1) a descriptionChairman of the proposed changes to the size and composition of

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the Board; (2) a description of the collateral changes that are expected to flow from the Proposal including changes in committee structures and compensation and in service providers; (3) a discussion of how the Proposal would benefit the Fund and its shareholders; (4) information concerning the experience and qualifications of each member of the JPMorgan Funds Board; and (5) a discussion of how the Proposal would affect the Fund’s Operating Expenses noting that the Proposal would decrease gross Operating Expenses (exclusive of advisory fees which are based on performance and dividends paid on ARPS) because the trustee/director compensation would be allocated to all Funds overseen by JPMorgan Funds Board and both the number and asset base of the JPMorgan Funds is significantly higher resulting in a lower allocation of director compensation to the Fund. In addition, members of the Fund’s Nominating Committee met with membersGovernance Committee. As Chairman of the Governance Committee, he has participated in the selection and nomination of persons for election or appointment as Trustees/Directors, periodic review of the JPMorgan Funds on January 8, 2009compensation payable to the Trustees/Directors, review and received additional information concerningevaluation of the JPMorgan Fundsfunctioning of the Board its committee structure, and its ability to provide services comparable to those provided by the Alternative Products Board. With respect to Fund expenses, JPMFM and JPMIM previously agreed and continue to agree that: (1) JPMFM would not propose an increase in the 10 basis point fee payable under the Fund’s administrative services contract for four years (i.e., through December 31, 2012); and (2) JPMFM and JPMIM would agree to cap director compensation expenses and legal fees payable bycommittees, oversight of any ongoing litigation affecting the Fund for four years (i.e., through December 31, 2012) ator J.P. Morgan Funds, the amountAdviser or the non-interested Trustees/Directors, oversight of such compensation and fees for 2007 (exclusive of extraordinary director compensation and legal fees attributable toregulatory issues or deficiencies affecting the 2008 Board consolidation whereby the Alternative Products Board was elected). The agreed-upon cap does not apply to director compensation expenses for special meetingsFund or to legal fees incurred with respect to matters not in the ordinary courseJ.P. Morgan Funds, oversight of the Fund’s business.

The Nominating Committee met on January 13, 2009 to review and consider the Proposal and the additional information that had been provided by JPMIM and JPMFM and to determine whether implementation of the Proposal would be in the best interestrisk management processes of the Fund and its shareholders. The Nominating Committee considered, among other things, the anticipated benefitsJ.P. Morgan Funds, and oversight and review of the Proposalmatters with respect to service providers to the Fund and J.P. Morgan Funds.

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Frederick W. Ruebeck.  Mr. Ruebeck has served on the J.P. Morgan Funds Board since 2005 and was a member of the One Group Mutual Funds Board since 1994. Mr. Ruebeck is the Chairman of the Fixed Income Investment Sub-Committee. Currently, the Fixed Income Investment Sub-Committee is responsible for 37 fixed income funds including the Fund. 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 Fund’s independent accountants, the oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its shareholders including (1) administrativeoversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and operational efficiencies created by havingobjectivity of the Fund’s independent audit and the financial statements of the Fund, and all other JPMorganacting as a liaison between the Fund’s independent registered public accounting firm and the full Board. Mr. Ruebeck also serves on the Preferred Shares Committee.

James J. Schonbachler.  Mr. Schonbachler has served on the J.P. Morgan Funds overseen by boards composedBoard since 2005 and was a member of the same individuals; and (2) the experienceheritage J.P. Morgan Funds Board since 2001. Mr. Schonbachler is a member of the JPMorganFixed Income Investment Sub-Committee. Currently, the Fixed Income Investment Sub-Committee is responsible for 37 fixed income funds including the Fund. Mr. Schonbachler also serves on the Audit and Valuation Committee and was appointed as Chairman of the Audit and Valuation Committee effective February 16, 2012. In connection with his duties to the Audit and Valuation Committee, Mr. Schonbachler has participated in the appointment of the Fund’s independent accountants, the oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund, and acting as a liaison between the Fund’s independent registered public accounting firm and the full Board. Mr. Schonbachler also serves on the Preferred Shares Committee.

Frankie D. Hughes.  Ms. Hughes has served on the J.P. Morgan Funds Board memberssince 2008. Ms. Hughes is a member of the Fixed Income Investment Sub-Committee. Currently, the Fixed Income Investment Sub-Committee is responsible for 37 fixed income funds including experiencethe Fund. 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 Fund and the J.P. Morgan Funds’ compliance with legal and regulatory and contractual requirements and compliance policies and procedures.

Leonard M. Spalding, Jr.  Mr. Spalding has served on the J.P. Morgan Funds Board since 2005 and was a member of the heritage J.P. Morgan Funds Board since 1998. Mr. Spalding is the Chairman of the Investments Committee. Mr. Spalding is also a member of the Compliance Committee. As a member of the Compliance Committee, he has participated in the oversight of the Fund’s and the JPMorganJ.P. Morgan Funds’ common service providers such as JPMIM, JPMFM,compliance with legal and JPMorgan Chase Bank, N.A., the Fund’sregulatory and the JPMorgan Funds’ custodian, fund accountant,contractual requirements and with respect to the Fundcompliance policies and certain JPMorgan Funds, securities lending agent. The Board also considered the ability of the JPMorgan Funds Board to devote sufficient attention to the Fund and provide services comparable to those provided by the Alternative Products Board noting that the JPMorgan Funds Board committee structure and the experience and qualification of its board members would allow the JPMorgan Funds Board to effectively oversee the Fund.procedures.

The Nominating Committee met again on January 15, 2009. At the meeting, the Nominating Committee considered the information provided by JPMIM and JPMFM, the experience and qualifications of the Nominees, and the benefits to shareholders of the Proposal. Based on its review, the Nominating Committee determined that the Proposal was in the best interest of the Fund and its shareholders. Accordingly, the Nominating Committee approved the Proposal and recommended that the full Board take the actions necessary to implement the Proposal. At its meeting on January 15, 2009, the Board reviewed the recommendation of the Nominating Committee. After consideration of the benefits to the Fund and its shareholders, the Board adopted the resolutions necessary to implement the Proposal including resolutions to: (1) increase the number of directors of the Fund from six to thirteen effective immediately after the Annual Meeting; and (2) nominate the Nominees for election at the Annual Meeting.

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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 245270 Park Avenue, New York, New York 10167.10017. The Governance Committee has concluded that each Nominee designated as non-interested would qualify as an “independent” director for purposes of NYSE Amex Company Guide 805A.

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The following tables set forth information concerning the Nominees.

6

(1946)

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8

8

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Fund Shares Owned by Directors/Nominees

The following table sets forth, for each Nominee, the dollar range of equity shares beneficially owned in the Fund as of February 23, 2009.December 31, 2011. 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 person’s immediate family sharing the same household; provided, however, that the presumption of such beneficial ownership may be rebutted. Each Nominee’s individual beneficial shareholdings of the Fund constitute less than 1% of the outstanding shares of the Fund.

Board Leadership Structure and Oversight.

Mr. Reid, an independent director, serves as Chairman of the Board. Patricia Maleski serves as President of the Fund. Ms. Maleski is not a director. The Chairman’s role is separated from that of the President to allow the Board to function independently from the Adviser in the exercise of the Board’s fiduciary duty to the Fund and its shareholders. In this respect, Mr. Reid’s experience as Chairman of the J.P. Morgan Funds Board as well as his independence from the Adviser and its affiliates allows him to carry out his leadership duties as Chairman with objectivity.

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In addition, the Board has adopted a committee structure that allows it to effectively perform its oversight function for the 154 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, Nominatingthe 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 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 receives periodic reporting from the Chief Risk Officer of J.P. Morgan Asset Management¹ (“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 JPMAM’s 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 Board also receives a report from the Audit and Valuation Committee at each of its quarterly meetings. The Audit and Valuation Committee is responsible for oversight of the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies, assisting the Board in its oversight of the valuation of the Fund’s securities by the Adviser, overseeing the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund, and acting as a liaison between the Fund’s independent registered public accounting firm and the full Board. The Compliance Committee is responsible for oversight of the Fund’s compliance with legal, regulatory and contractual requirements and compliance with policy and procedures. 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. This Committee structure allows the Board to efficiently evaluate a large amount of material and effectively fulfill its oversight function.

Additional Information About Committees and Board Meetings

The Board has an audit committeeAudit and Valuation Committee is composed entirely of directors who are not “interested persons” of the Fund, the Fund’s 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 Jerry B. Lewis, Cheryl M. Ballenger, Kenneth Whipple, Jr.Messrs. Schonbachler (Chairman), John F. Williamson,Armstrong, Finn, Higgins, and John Rettberg.Ruebeck. The purposes of the Audit and Valuation Committee are to: (i) appoint and determine compensation of the Fund’s independent accountants; (ii) evaluate the independence of the Fund’s independent accountants; (iii) oversee the performance of the Fund’s audit, accounting and financial reporting policies, practices and internal controls and valuation policies; (iv) approve non-audit services, as required by the

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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 Fund’s securities by the Adviser; (vi) oversee the quality and objectivity of the Fund’s independent audit and the financial statements of the Fund; (vii) act as a liaison between the Fund’s independent registered public accounting firm and the full Board; and (vii) perform specific responsibilities as required by NYSE Amex rules. The Audit and Valuation Committee operates pursuant to a written charter, which was most recently amended on May 24, 2004 and reviewed on December 11, 2008. The Audit Committee is responsible for conferring with the Fund’s independent accountants, reviewing the scope and procedures of the year-end audit, reviewing annual and semi-annual financial statements and recommending the

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selection of the Fund’s independent accountants. In addition, the Audit Committee may address questions arising with respect to the valuation of certain securities in the Fund’s portfolio. Jerry B. Lewis, ChairmanFebruary 16, 2012. A copy of the Audit Committee, has been designatedand Valuation Charter is attached as an audit committee financial expert. Mr. Lewis is an independent director of the Fund.Appendix 1. The report of the Audit Committee, as approved on February 24, 2009,21, 2012, is attached to this proxy statement as Appendix 1.2.

The Board has a nominating committeeGovernance Committee is composed entirely of directors who are not “interested persons” of the Fund, the Fund’s investment adviser or its affiliates as that term is defined in the 1940 Act (the “Nominating Committee”).Act. The Governance Committee functions as the Nominating Committee and Compensation Committee with respect to the Fund for purposes of Sections 804 and 805 of the NYSE Amex Company Guide. The members of the NominatingGovernance Committee are Jerry B. Lewis, Cheryl M. Ballenger, Kenneth Whipple, Jr.Messrs. Reid (Chairman), John F. Williamson,Goldstein, Marshall and John Rettberg.Morton. The NominatingGovernance Committee operates pursuant to a written charter (the “Nominating“Governance Committee Charter”), which was last amended on December 12, 2006February 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 reviewed on December 11, 2008. The Nominating Committee is responsible for identifying, evaluating and recommending for nomination candidatesof persons for election or appointment as directorsDirectors; (ii) periodic review of the Fund. The Nominatingcompensation 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 Fund’s independent registered public accounting firm). When evaluating a person as a potential nominee to serve as an Independent Director, the Governance Committee may consider, candidates submitted by current directors,among other factors, (i) whether or not the Fund’s investment adviserperson is “independent” and whether the person is otherwise qualified under applicable laws and regulations to serve as a Director; (ii) whether or its affiliates, shareholdersnot 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 person’s 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 appropriate sources.sources that the Governance Committee deems appropriate. Shareholders can submit recommendations in writing to the attention of the Nominating CommitteeSecretary of the Fund at 245270 Park Avenue, New York, New York 10167. A candidate should have certain characteristics, such as a very high level of integrity, appropriate experience, and a commitment to fulfill the fiduciary duties inherent in board membership.10017.

The NominatingGovernance 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. The NominatingAlthough the Board does not have a specific policy with respect to diversity, the Governance Committee also will consider the extent to which potential candidates possess sufficiently diverse skill sets and diversity characteristics that would contribute to the Board’s overall effectiveness. A detailed descriptionThe Governance Committee periodically reviews the role of the criteria usedGovernance 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) and Ms. Hughes and Messrs. Oden and Spalding. The primary purposes of the Compliance Committee are to (i) oversee the Fund’s compliance with

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legal and regulatory and contractual requirements and the Fund’s compliance policies and procedures; and (ii) consider the appointment, compensation and removal of the Fund’s Chief Compliance Officer.

Each member of the Board, except Mr. Reid, serves on the Investments Committee and Mr. Spalding acts as Chairperson. 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. Hughes. 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 provided by the Nominating Committee as well asAdviser. The primary purpose of the information requiredFixed Income Investment Sub-committee is to be(i) assist the Board in its oversight of the investment management services provided by shareholders submitting candidatesthe 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 considerationthe 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 set forth inimpractical to convene a meeting of the Nominatingfull Board. The Fixed Income Investment Sub-committee receives reports concerning investment management topics, concerns or exceptions with respect to the Funds that the sub-committee is assigned to oversee, and works to facilitate the understanding by the Investments Committee Charter.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 Cheryl M. BallengerMessrs. Ruebeck and John F. Williamson.Schonbachler. The Preferred Shares Committee 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.

The current Board was electedre-elected on April 11, 2008. From April 11, 2008 through the end of27, 2011. For the fiscal year ended December 31, 2008,2011, the Board met sixeight times. The Audit and Valuation Committee held fivefour meetings during 2008.2011. The NominatingFixed Income Investment Sub-Committee met five times during 2011. The Governance Committee met oncefour times during 2008.2011. The Preferred Shares Committee met once in 2008.2011. The Compliance Committee met four times during 2011. The Board does not have a formal policy regarding director attendance at the Fund’s annual meetings. Each TrusteeDirector 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 Fund’s 20082011 annual meeting of shareholders.

It is contemplated that, if elected, the new directors will appoint the members of the Audit Committee, Nominating Committee and Preferred Shares Committee. It is also anticipated that William Armstrong will be presented to the Fund’s Board to be designated as an audit committee financial expert. Mr. Armstrong has been designated as an audit committee financial expert of the JPMorgan Funds.

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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.

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Compensation of Directors and Officers

For the fiscal year ended December 31, 2008,2011, the Fund paid each director who is not an employee of the Fund’s investment adviser or any corporate affiliate of the adviser as follows:

The officers of the Fund receive no direct remuneration from the Fund. The Fund’s officers are compensated by advisory affiliates of JPMorgan Chase & Co. for services rendered to the Fund.

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The following table sets forth the information concerning the compensation paid by the Fund to the Nominees during the fiscal year ended December 31, 2008.

The Funds of the J.P. Morgan Funds Complex which includes the Fund (collectively, the “J.P. Morgan Funds”) overseen by the Directors pay each Director an annual fee of $275,000 and reimburse each Director for expenses incurred in connection with service as a Director. In addition, the Funds pay the Chairman $225,000, the Vice Chairman $75,000, and from December 1, 2011 through February 2012, 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. The J.P. Morgan Funds bear expenses related to administrative and staffing services provided to the Chairman, in lieu of establishing an office of the Chairman, in the amount of $6,000 per month.

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 Fund’s Administrator for a portion of the fees associated with the Office of the Fund’s CCO. The Fund’s other officers are compensated by affiliates of JPMorgan Chase & Co. for services rendered to the Fund.

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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 245270 Park Avenue, New York, New York 10167,10017, 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 Fund’s 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

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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. However, under certain circumstances, management may recommend, or the Board itself may determine, that the Board transition should be postponed or terminated, and in that case the meeting will be postponed in order for further actions to be taken.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES LISTED ABOVE.

PROPOSAL 2: APPROVAL OF NEW ADVISORY AGREEMENT

Background

Pacholder & Company, LLC and the Fund entered into an Investment Advisory Agreement dated as of March 1, 2005 (the “2005 Contract”) which was approved by shareholders on February 22, 2005. Effective as of the close of business on December 31, 2006, P&C was merged into JPMIM and, as a result, P&C’s rights and obligations under the 2005 Contract were transferred to and assumed by JPMIM. Effective January 1, 2007, JPMIM and the Fund entered into the current investment advisory agreement (the “Current Advisory Agreement”), which has the same terms as the 2005 Contract except for changes necessary to reflect JPMIM’s assumption of P&C’s rights and obligations.

Under the Current Advisory Agreement, JPMIM is entitled to receive an annual investment advisory fee (the “Performance Fee”), computed and paid monthly after the end of each calendar month, at a rate that increases or decreases from a “fulcrum fee” of 0.90% of the Fund’s average net assets. The increase or decrease is calculated by comparing the total return investment performance of the Fund (net of all fees and expenses, including the advisory fee) for the prior 12-month period (the “Fund Return”) to the percentage change in the Credit Suisse First Boston (CSFB) High Yield Index, Developed Countries Only (the “Index”) for the same period (the “Index Return”). The fee rate is 0.90% if the Fund Return equals the Index Return. The fee rate increases or decreases from the 0.90% “fulcrum fee” by 10% of the difference between the Fund Return and the Index Return, up to the maximum fee rate of 1.40% or down to the minimum fee rate of 0.40%.

The fee so determined after each month is reduced by advisory fees previously paid by the Fund to JPMIM in respect of the 12-month period, net of any refunds of advisory fee from JPMIM to the Fund in respect of the period. If the prior payments by the Fund exceed the amount of the advisory fee payable after any month end, the Adviser is obligated to refund the excess to the Fund as soon as practicable. These provisions referencing amounts previously paid or refunded are referred to below as the “Recalculation Provision.”

Under the Current Advisory Agreement, the calculation of the fulcrum fee is complex because of the Recalculation Provision. For any given month, the compensation due to JPMIM or refund owed to the Fund by JPMIM is subject to change for a period of twelve months after the end of that month. In order to simplify the performance fee calculation and fix the amount payable to JPMIM at the conclusion of each month, thereby providing certainty of the fee accrued for each period, the New Advisory Agreement does not contain the Recalculation Provision. Elimination of the Recalculation Provision will affect the advisory fee payable to JPMIM in different ways depending upon the Fund’s performance relative to the Index Return. During periods where the Fund Return relative to the Index Return (whether higher, lower or equal) does not change significantly month to month, the advisory fee under the New Advisory Agreement without the Recalculation

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Provision would differ only slightly, if at all, from the fee that would have been payable under the Current Advisory Agreement. In periods when the Fund Return improves relative to the Index Return, the advisory fee under the New Advisory Agreement would be lower than the fee payable under the Current Advisory Agreement. In periods when the Fund Return declines relative to the Index Return, the advisory fee under the New Advisory Agreement would be higher than the fee payable under the Current Advisory Agreement. Under the New Advisory Agreement, the monthly advisory fee rate would be between 0.40% and 1.40%. Under the Current Advisory Agreement, the advisory fee rate may be lower than 0.40% or higher than 1.40% due to the Recalculation Provision. The fee payable under the New Advisory Agreement will not be higher than the fee payable under the Current Advisory Agreement unless the Fund Return increases relative to Index Return and subsequently decreases relative to the Index Return.

For the fiscal year ended December 31, 2008, the investment advisory fee paid by the Fund was $48,158, or 0.03% of average weekly net assets. If the advisory fee under the New Advisory Agreement had been in effect during the fiscal year ended December 31, 2008, the investment advisory fee paid by the Fund would have been $720,489 or 0.40% of average weekly net assets.The difference of $672,331 or 0.37% of average weekly net assets is due to the fact that, during 2008, the Fund Return decreased relative to the Index Return. Because of the Recalculation Provision, this lower rate was applied back to the previous 12 month period, and JPMIM was required to return to the Fund amounts previously paid to it in respect of the earlier period, resulting in a lower effective advisory fee rate earned by JPMIM.

Prospectively, if the Fund’s performance relative to the index in 2009 remains at a level that results in an advisory fee at the lowest rate of 0.40%, the Recalculation Provision will not affect the fee calculation under the Current Advisory Agreement, because the lowest rate was in effect during the entire 12 month period. For this reason, the advisory fee that would be payable under the New Advisory Agreement and the Current Advisory Agreement would be the same during a period of continued underperformance.

On the other hand, if the Fund Return relative to the Index Return were to improve in 2009 such that the investment advisory fee rate increased from the minimum rate, then the advisory fee payable under the New Advisory Agreement would be less than the fee payable under the Current Advisory Agreement because the Recalculation Provision would require the Fund to pay JPMIM fees at the higher rate for the 12 month period. For example, if the advisory fee rate, after having been consistently at 0.40% for a year or longer, were to increase from 0.40% to 0.65% for each month of a given year, and the Fund’s net assets were $100,000,000, then the total fee payable under the New Advisory Agreement would be $650,000, whereas the total fee payable under the Current Advisory Agreement would be $879,000.

If the Fund Return relative to the Index Return were to decline after a period in which it had increased, then the advisory fee payable under the New Advisory Agreement would be higher than the fee payable under the Current Advisory Agreement. Once again, this is a result of the elimination of the Recalculation Provision from the New Advisory Agreement. For example, if the advisory fee rate, after increasing to 0.65% for a year, were to decrease again to 0.40% for each month of the following year, and the Fund’s net assets were $100,000,000, then the total fee payable under the New Advisory Agreement would be $400,000, whereas the total fee payable under the Current Advisory Agreement would be $171,000.

The examples above are for illustrative purposes only and are not meant to predict future performance or net assets of the Fund.

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The monthly fee rate payable under the New Advisory Agreement would be calculated by reference to the 12-month rolling period of performance. In addition, as required by Securities and Exchange Commission precedent, JPMIM’s compensation under the New Advisory Agreement would be based solely on results obtained after the New Advisory Agreement takes effect. In this respect, the New Advisory Agreement provides that during the first 12-months of the New Advisory Agreement, the Fund will accrue the fee at the actual monthly rate but pay JPMIM only the minimum amount payable under the contract (0.40%). At the conclusion of the first 12-month period, JPMIM would receive an additional fee, if any, based upon the performance for the 12-month period reduced by the amount of payments previously made to JPMIM. Following the initial 12-month period, the fee payable to JPMIM will be calculated by reference to the 12-month rolling period of performance preceding the payment date.

In addition to the change to the performance fee calculation, the New Advisory Agreement contemplates that the agreement will be governed by New York law instead of Ohio law. This change would conform the governing law provision to that in the advisory agreements for most other registered investment companies advised by JPMIM and is not expected to have any effect on the quality or scope of services provided to the Fund by JPMIM.

The Current and New Advisory Agreements

Except for differences in the effective and renewal dates, governing law, and the Performance Fee calculation described above, the Current and New Advisory Agreements are substantially identical. A form of the New Advisory Agreement is attached to this proxy statement as Exhibit B.

Pursuant to both agreements, JPMIM, subject to the supervision of the Fund’s Board of Directors and in accordance with the Fund’s investment objective, policies and restrictions, identifies securities suitable for investment by the Fund, makes investment decisions, and places purchase and sale orders. Both agreements provide that JPMIM will obtain and evaluate such information and advice relating to the economy, securities markets and specific securities as it considers necessary or useful to make investment decisions on behalf of the Fund, and will manage continuously the assets of the Fund in a manner consistent with its investment objective and policies.

Under both agreements, JPMIM bears the cost of rendering the investment management and supervisory services to be performed by it under the agreement, pays the compensation of the officers and employees of the Fund who are employees of JPMIM or any corporate affiliate of JPMIM, if any, and provides such office space, facilities and equipment and maintains such records as required by applicable law or as JPMIM reasonably requires in the management of the assets of the Fund.

Under both agreements expenses not expressly assumed by JPMIM are paid by the Fund. The expenses borne by the Fund include, but are not limited to, the following: investment advisory fees; fees and expenses of any registrar, administrator, fund accountant, custodian, stock transfer and dividend disbursing agent; brokerage commissions; taxes; expenses of registration of the Fund and its shares under federal and state securities laws; all expenses of shareholders’ and directors’ meetings and of preparing, printing and mailing prospectuses, proxy statements and reports to shareholders; directors’ fees and expenses; expenses incident to any dividend reinvestment program; charges and expenses of any outside service used for pricing of the Fund’s portfolio securities; fees and expenses of legal counsel and independent accountants; membership dues of industry associations; interest on borrowings; fees and expenses incident to the listing of the Fund’s shares on any stock

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exchange; insurance premiums; and extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification relating thereto).

Under both the Current Advisory Agreement and New Advisory Agreement, the investment advisory fee is payable monthly. In addition, the New Advisory Agreement provides that JPMIM will receive the minimum fee (0.40%) during the 12-month period following the effective date of the New Advisory Agreement, at which time any balance due based on the Fund’s investment performance during that period will be paid by the Fund to JPMIM.

Each agreement provides that in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations thereunder, JPMIM is not liable to the Fund or its shareholders for any act or omission by JPMIM or for any losses sustained by the Fund or its shareholders. Neither agreement restricts JPMIM from acting as investment manager or adviser to others, including entities that may have investment objectives similar or identical to those of the Fund.

The initial term of the New Advisory Agreement expires on August 31, 2010. Both the Current Advisory Agreement and the New Advisory Agreement are renewable annually after their initial term by the Board of Directors of the Fund, or by vote of the holders of “a majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund, and by the vote of a majority of the directors of the Fund who are not parties to the agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval.

The Current and New Advisory Agreements terminate automatically in the event of an “assignment” (as defined in the 1940 Act) and may be terminated without penalty at any time by majority vote of the entire Board of Directors of the Fund, or by vote of the holders of “a majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund, on 30 days’ written notice to JPMIM, or by JPMIM on 180 days’ written notice to the Fund.

Consideration by the Board of Directors

On December 10, 2008, the Board of Directors held a meeting called for the purpose of considering the New Advisory Agreement, among other matters. At the meeting, the Directors reviewed and considered performance and expense information for the Fund, as well as information about JPMIM (the “Adviser”). On December 11, 2008, the Directors, including a majority of the Directors who are not “interested persons” (as defined in the Investment Company Act of 1940) of any party to the Advisory Agreement or any of their affiliates, approved the New Advisory Agreement subject to shareholder approval.

In preparation for the December meeting, the Directors requested and evaluated comprehensive materials from JPMIM, including performance and expense information compiled by Lipper Inc. (“Lipper”), an independent provider of investment company data. Prior to voting, the Directors reviewed the proposed approval of the New Advisory Agreement with representatives of the Adviser and with counsel to the Fund and received a memorandum from independent counsel to the Directors discussing the legal standards applicable to their consideration of the proposed approval. The Directors also discussed the proposed approval in a private session with independent counsel at which no representatives of the Adviser were present.

The Directors determined that the overall arrangement between the Fund and the Adviser, as provided in the New Advisory Agreement, was fair and reasonable in light of the services performed, expenses incurred

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and such other matters as the Directors considered relevant in the exercise of their business judgment and that approval of the New Advisory Agreement was in the best interests of the Fund and its shareholders. On this basis, the Directors unanimously approved the New Advisory Agreement subject to shareholder approval. In reaching their determination with respect to approval of the New Advisory Agreement, the Directors considered all factors they believed relevant, including the following: (1) the nature and quality of services provided and to be provided; (2) the investment performance of the Fund; (3) the advisory fees and total expenses; (4) costs of services and the estimated profitability of the Adviser; (5) possible economies of scale; and (6) fall out benefits.

In their deliberations, each Director may have attributed different weights to the various factors, and no factor alone was considered determinative. The matters discussed below were considered and discussed by the Directors in reaching their conclusions:

Nature, Extent and Quality of Services Provided by the Adviser

The Directors received and considered information regarding the nature, extent and quality of the services provided to the Fund under the New Advisory Agreement including information concerning the qualification and experience of the portfolio management team. The Directors noted that the management and oversight services provided by JPMIM were viewed as being of high quality and that the Board had a reasonable expectation that the services, and personnel providing them, will continue with no significant change. The Directors also considered JPMorgan’s commitment of resources to the fund management business, and the dedication of resources to addressing issues arising from the current market turmoil. The Directors also considered JPMorgan’s continued investments in the business in 2008 and the expected investments in 2009, including the development of technology and infrastructure.

The Directors also considered the benefits to the Fund of being part of the larger JPMorgan fund complex. They noted that JPMIM had provided information about the adviser and its affiliates and the financial strength of the organization. The Directors also considered shareholder expectations that JPMIM would be managing the Fund.

Based on these considerations and other factors, the Directors concluded that the Adviser’s has the requisite expertise and experience and sufficient financial resources, to perform its obligations under the New Advisory Agreement.

Fund Performance

The Directors received and considered relative performance and expense information for the Fund in a report prepared by Lipper. The Directors considered the total return performance information, which included the Fund’s ranking within a performance universe made up of funds with the same Lipper investment classification and objective (the “Universe Group”) for the one-, three-, five- and ten- year periods reflected in the materials. The Directors also considered the Fund’s performance in comparison to the performance results of a group (the “Peer Group”) of funds. The Directors reviewed a description of Lipper’s methodology for selecting closed end funds in the Fund’s Peer Group and Universe Group. The Directors noted that the Fund’s performance had declined such that 1 year performance was in the 4th quintile, but 3, 5 and 10 year performance remained in the 1st quintile and that short term performance appeared to be improving.

Based on the foregoing, the Directors concluded that within the overall context of their deliberations about the Fund, performance of the Fund was sufficient for approval of the New Advisory Agreement, taking into account the improving performance of the Fund and the Fund’s excellent long-term performance record.

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Advisory Fees and Total Expenses

With respect to advisory fee and total expenses, the Board considered that actual advisory fees are in the 1st quintile and total expenses are in the 3rd quintile. The Board also found that the Performance Fee was effective to align the Adviser’s interests with the interests of Fund shareholders, and to provide a level of compensation tied to investment performance.

The Board noted that the investment advisory fee schedule for the Fund does not contain breakpoints. The Board found that based on the size of the Fund, breakpoints were not yet warranted for the Fund. The Board considered that, although the Adviser manages other high yield accounts, the Adviser does not manage other funds or accounts in the same style as the Fund. The Board also noted that the Fund’s fee rate is higher than the Adviser’s published fee schedule for high yield assets by virtue of the performance based fee; but, at the lowest fee rate, the Fund’s fee is approximately the same as the published fee schedule. The Directors also considered that management had agreed that the administration fee and certain expenses will not increase prior to December 31, 2012 and that management continues to invest significantly in the business.

The Board considered the new advisory fee and the effect of the elimination of the Recalculation Provision under various scenarios. The Board also considered the benefits to the Fund of simplifying the performance fee calculation and providing certainty of the fee accrued on a monthly basis, and weighed these benefits against the possible scenarios wherein the retention of the Recalculation Provision would result in the Fund paying a lower advisory fee.

Based on the foregoing, the Directors concluded that after giving effect to expense caps and within the context of their deliberations about the Fund’s advisory arrangement, the proposed advisory fee of the Fund was reasonable.

Cost of Services and Estimated Profitability

At the request of the Directors, the Adviser provided information regarding the estimated profitability to the Adviser in providing services to the Fund. The Board considered that the data represents the Adviser’s determination of its revenues from the contractual services provided to the Fund, less expenses of providing such services. The Board considered pre-tax profitability for advisory services and administrative services separately and on a combined basis, and for advisory services, profitability also was considered without the inclusion of the amortization expense of the integration of funds managed by Bank One Corporation affiliates with funds managed by JPMorgan Chase & Co. affiliates.

The Board concluded that the Adviser’s estimated profitability in respect of the New Advisory Agreement was reasonable.

Possible Economies of Scale

The Directors also considered possible economies of scale. The Directors noted management’s agreement to not increase administration fees and certain expenses prior to December 31, 2012. The Directors also considered management’s investment in the business and that certain fees are negotiated on a complex-wide basis, permitting the Fund to share in the scale of the organization.

In light of all of the foregoing and under the circumstances, the Board concluded that there was an acceptable sharing of any economies of scale at the present time.

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Fall-Out Benefits

The Directors also considered fall-out benefits to the Adviser and its affiliates including management’s profits on fees from administration, custody and fund accounting, and securities lending arrangements with the Fund. The Board concluded, in light of all of the foregoing, and under the circumstances, fallout benefits were acceptable at the present time.

After consideration of the New Advisory Agreement, the Board of Directors, including all of the directors who are not “interested persons” (as defined in the 1940 Act) of the Fund or the Adviser, determined that the New Advisory Agreement is in the best interest of the Fund’s shareholders and voted to approve the New Advisory Agreement and to submit the New Advisory Agreement for approval by shareholders of the Fund.

Principal Executive Officer and Directors of JPMIM

The following is a list of JPMIM’s principal executive officer and directors. JPMIM’s principal address is 245 Park Avenue, New York, New York 10167.

Other Similar Funds Managed by JPMIM

The following table contains certain information regarding funds for which JPMIM provides investment advisory services and that may have similar investment objectives and policies as the Fund.

Required Vote

Approval of Proposal 2 requires the affirmative vote of “a majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund. Under the 1940 Act, the vote of “a majority of the outstanding securities” means the vote (i) of 67% or more of the shares present at the meeting, if the holders of more than 50% of the shares are present or represented by proxy, or (ii) of more than 50% of the shares, whichever is less. For this

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purpose, the holders of the ARPS and the Common Stock will vote together as a single class. Abstentions and broker non-votes (i.e., shares held in the name of a broker or nominee for which an executed proxy is received, but which have not been voted because the broker or nominee does not have discretionary voting power and voting instructions have not been received from the beneficial owner) will not be considered votes cast and, for purposes of clause (i) above, will have the same effect as votes cast against the proposal. With respect to the Fund’s Common Stock, broker-dealer firms will not be permitted to grant voting authority without shareholder instructions with respect to Proposal 2.

If shareholders of the Fund approve the New Advisory Agreement, it will become effective on May 1, 2009. If shareholders of the Fund do not approve the New Advisory Agreement, the Current Advisory Agreement will remain in effect until terminated in accordance with its terms and the Board of Directors will consider whether to pursue alternative action.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE NEW ADVISORY AGREEMENT

PROPOSAL 3: AMENDMENT OF INVESTMENT RESTRICTION ON COVERED CALLS

The Fund has an investment restriction prohibiting the Fund from writing or purchasing call options. This restriction is designated as a fundamental policy, which means that it may only be changed with the approval of a “majority of the outstanding voting securities” of the Fund as defined in the 1940 Act. The Board is proposing that shareholders approve the amendment of the restriction to permit the Fund to utilize the strategy of selling covered calls, using listed options contracts on the Fund’s holdings in shares of companies for which there are also listed options, and to “close out” an option position by purchasing identical options in the open market.

The current investment restriction provides as follows:

The Fund may not make short sales of securities or purchase securities or evidences of interests therein on margin (except it may make covered short sales of securities and obtain short-term credit necessary for the clearance of transactions) or write or purchase put or call options (except to the extent that a purchase of a stand-by commitment may be considered the purchase of a put).

If the proposed amendment is approved by shareholders, the investment restriction would be amended to read as follows (new text is underscored):

The Fund may not make short sales of securities or purchase securities or evidences of interests therein on margin (except it may make covered short sales of securities and obtain short-term credit necessary for the clearance of transactions) or write or purchase put or call options (except to the extent that a purchase of a stand-by commitment may be considered the purchase of a putand except it may write covered call options using listed call options on shares that it holds or has the right to acquire and it may purchase call options to close an open covered call position).

From time to time, primarily as the result of bankruptcy reorganizations, the Fund receives shares of companies for which there also are listed options. In these situations, the Fund’s investment adviser, JPMIM, would like the ability to utilize the strategy of selling covered calls, using listed options contracts on the Fund’s holdings in such shares.

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Selling covered calls involves selling call options. A call options gives the buyer the option to purchase the shares underlying the call option at a fixed price, referred to as the exercise price, until a fixed date on which the option expires. Selling a “covered” call means that the seller of the call option owns the shares underlying the option. The Fund would receive the price paid for a call option (known as an option premium) in cash at the time of the sale of the option. The purchaser would have the right to exercise the call option at any time prior to the expiration of the option to purchase the shares underlying the option for the fixed exercise price per share. If the purchaser would elect to exercise the call option, the purchaser would deliver the exercise price for the purchase of the underlying shares to the Fund in cash and the Fund would deliver the shares on which the option is exercised to the purchaser. If the option would expire unexercised, the Fund would keep the cash for the option premium and the underlying shares. The Fund also could “close out” the option position by purchasing an identical option in the open market.

Although selling covered calls has the ability of limiting the upside potential of the underlying shares to the sum of the option premium and the exercise price, selling covered calls would provide the Fund with income or share price appreciation in the form of the option premium. The strategy also provides some benefit to the Fund if the value of the underlying shares declines because the Fund would receive the option premium to offset a portion of the downside risk of owning the shares.

Required Vote

Approval of Proposal 3 will require (i) the vote of a majority of the outstanding voting securities of the Fund and (ii) the affirmative vote of the holders of a majority of the outstanding ARPS voting as a separate class. A “vote of a majority of the outstanding voting securities” of the Fund means the vote: (a) of 67% or more of the voting securities present at the Annual Meeting, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy; or (b) of more than 50% of the outstanding voting securities of the Fund, whichever is the less. For purposes of clause (i) above, the holders of the Common Stock and ARPS will vote together as a single class. Abstentions and broker non-votes will not be considered votes cast and for purposes of clauses (ii) and (a) above, will have the same effect as votes cast against the proposal. With respect to a Fund’s Common Stock, broker-dealer firms will not be permitted to grant voting authority without shareholder instructions with respect to Proposal 3. However, ARPS held in “street name” may be voted under certain conditions by broker-dealer firms with respect to Proposal 3, and counted for purposes of establishing a quorum if no instructions are received one business day before the Annual Meeting, or, if adjourned, one business day before the day to which the Annual Meeting is adjourned. These conditions include (i) at least 30% of the ARPS outstanding have voted on Proposal 3, (ii) less than 10% of the ARPS outstanding have voted against Proposal 3 and (iii) holders of Common Stock have voted to approve Proposals 3. In such instances, the broker-dealer firm will vote the ARPS on Proposal 3 in the same proportion as the votes cast by all holders of ARPS who have voted on Proposal 3.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE AMENDMENT TO THE INVESTMENT RESTRICTION ON COVERED CALLS.

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.

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INFORMATION CONCERNING THE ADVISER, THE ADMINISTRATOR, CUSTODIAN, FUND

ACCOUNTANT AND SECURITIES LENDING AGENT

J.P. Morgan Investment Management Inc., 245270 Park Avenue, New York, NY 1016710017 serves as the Fund’s investment adviser. JPMorgan Funds Management, Inc., 1111 Polaris Parkway, Columbus, OH 43240 serves as the Fund’s administrator. JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, NY 1016710017 serves as the Fund’s 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 10017-2070. The Fund paid $162,103$166,173 during the fiscal year ended December 31, 20082011 to JPMorgan Funds Management, Inc. for administrative services. The Fund paid JPMorgan Chase Bank, N.A. $42,890 and $786$76,285 for custody and fund accounting services, respectively and $6,328 for securities lending agency services for the fiscal year ended December 31, 2008. JPMorgan Funds Management, Inc. and JPMorgan Chase Bank, N.A. will continue to provide to2011. The Fund did not participate in securities lending for the Fund such services following approval of the New Advisory Agreement.fiscal year ended December 31, 2011.

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, 2009.2012. PwC will also prepare the Fund’s federal and state income tax returns and provide certain permitted non-audit services. PwC, in accordance with Independence StandardsPublic Company Accounting Oversight Board Standard No. 1,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 Fund’s investment adviser

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and entities that control, are controlled by or are under common control with the adviser is compatible with maintaining PwC’s independence and has discussed PwC’s 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 Fund’s independent auditors for the fiscal years ended December 31, 20072010 and 2008.2011.

Audit Fees

The aggregate fees billed by PwC for professional services rendered for the audit of the Fund’s annual financial statements and the review of the financial statements included in the Fund’s reports to shareholders, for the fiscal years ended December 31, 20072010 and 20082011 were $61,400$70,000 and $56,500,$70,000, 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 Fund’s financial statements for the fiscal years ended December 31, 20072010 and 20082011 were $9,000$20,900 and $9,000,$20,800, respectively. Audit-related fees include amounts for attestation services for semi-annual financial statements and reviewexaminations performed pursuant to Rule 17f-2 under the Investment Company Act of internal controls.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, 20072010 and 20082011 were $4,500$9,400 and $4,500,$13,250, respectively. Tax fees include amounts for tax compliance, tax planning and tax advice.

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All Other Fees

There were no fees billed by PwC by 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, 20072010 and 2008.2011.

The aggregate non-audit fees billed by PwC for professional services rendered to the Fund, the Fund’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser for the fiscal years ended December 31, 20072010 and December 31, 20082011 were $19,860,662$32 million and $24,787,715,$28.5 million, respectively. Such fees were for auditattest services and attest servicesagreed-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 Fund’s Audit and Valuation Committee has considered whether the auditsprovision of third party entities; and tax fees. All non-audit services discussed abovethat were rendered to the Fund’s 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 PwC’s independence.

Pursuant to the Fund’s 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 PwC’s engagement for non-audit services with the Fund’s 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

16

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 which consideredmay be appointed as the Committee’s delegate for the purposes of considering whether theseto approve such services. The Audit and Valuation Committee’s responsibilities to pre-approve services were compatible with maintaining PwC’s independence.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. In addition, Computershare Fund Services (“Computershare”) may make solicitations on behalf of the Board by telephone or other means at a cost of approximately $20,804 plus the expense of any solicitation. By contract with JPMIM, Computershare, among other things, will be: (i) required to maintain the confidentiality of all shareholder information; (ii) prohibited from selling or otherwise disclosing to any third party shareholder information; and (iii) required to comply with applicable state telemarketing laws. The costs of the Annual Meeting, including the costs of preparing, assembling, mailing and transmitting proxy materials and of 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.

As the meeting date approaches, shareholders of the Fund may receive a call from a representative Computershare if the Fund has not yet received their vote. Authorization to permit Computershare to execute proxies may be obtained by telephonic or electronically transmitted instructions from Fund shareholders. Proxies that are obtained telephonically will be recorded in accordance with the procedures set forth below. Management of the Fund believes that these procedures are reasonably designed to ensure that the identity of the shareholder casting the vote is accurately determined and that the voting instructions of the shareholder are accurately determined. In all cases where a telephonic proxy is solicited, the Computershare representative is required to get information from the shareholder to verify his or her identity and authority to vote (if the person giving the proxy is authorized to act on behalf of an entity, such as a corporation), the number of shares owned and to confirm that the shareholder has received this Proxy Statement in the mail.

If the shareholder information solicited agrees with the information provided to Computershare by the Fund, the Computershare representative has the responsibility to explain the process, read the proposals listed on the proxy card, and ask for the shareholder’s instructions on each proposal. The Computershare representative, although permitted to answer questions about the process, is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Proxy Statement. Computershare will record the shareholder’s instructions on the card. Within 72 hours, Computershare will send the shareholder a letter to confirm the shareholder’s vote and asking the shareholder to call Computershare immediately if the shareholder’s instructions are not correctly reflected in the confirmation.

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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, and any person who owns more than 10% of the Fund’s outstanding securities 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, except for late Forms 3 and 4 relating to the Fund’s most recently concluded fiscal year ended on December 31, 2008.2011 as set forth on Exhibit B.

SHAREHOLDER PROPOSALS

To be considered for presentation at the Fund’s 20102013 annual meeting of shareholders, a shareholder proposal submitted pursuant to Rule 14a-8 under the Exchange Act must be received at the Fund’s principal office c/o the Secretary of the Fund no later than the close of business November 1, 2009.2012. Written notice of a shareholder proposal submitted outside of the processes of Rule 14a-8 must be delivered to the Fund’s principal office c/o the Secretary of the Fund no later than the close of business on January 28, 2010December 1, 2012 and no earlier than on December 28, 2009.November 1, 2012. In order to be included in the Fund’s 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 Fund’s Annual Report for the fiscal year ended December 31, 20082011 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., 245270 Park Avenue, New York, New York 10167.10017, 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., 245270 Park Avenue, New York, New York 1016710017, Attention Frank Nasta, Secretary.

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Appendix 1

J.P. MORGAN FUNDS

AUDITAND VALUATION COMMITTEE CHARTER

(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.

REPORTING

The Committee Chairperson shall report to the Boards of Trustees on the results of the Committee’s reviews and make such recommendations as the Committee has approved. The Committee will keep minutes of its meetings

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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 Fund’s 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.

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.

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RESPONSIBILITIES

The Committee shall have the following responsibilities:

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Periodically, as the Committee deems appropriate, the Committee shall:

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.

ANNUAL REVIEW

The Committee shall review and reassess the adequacy of this Charter at least once per year.

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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 24, 200921, 2012 to review the Fund’s audited financial statements for the fiscal year ended December 31, 2008.2011. The Audit Committee operates pursuant to a charter last amended May 24, 2004 and reviewed by the Audit Committee on December 11, 2008,February 16, 2012, that sets forth the roles of the Fund’s management, independent auditors, the Board of Directors and the Audit Committee in the Fund’s financial reporting process. Pursuant to the charter, the Fund’s management is responsible for the preparation, presentation and integrity of the Fund’s 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 Fund’s annual audit with the Fund’s 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 Fund’s 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 Committee’s 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 Committee’s considerations and discussions referred to above do not guarantee that the audit of the Fund’s 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 Fund’s Annual Report for the year ended December 31, 2008.2011.

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 121(A) of the listing standards of the NYSE Alternext US.Amex.

Submitted by the Audit Committee of the Fund’s Board of Directors.

As approvedApproved on February 24, 200921, 2012

Appendix 3

JPMORGAN FUNDS

GOVERNANCE COMMITTEE CHARTER

(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:

1

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):

2

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 person’s 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 counsel’s 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 Trust’s Secretary, at 270 Park Avenue, New York, New York 10017 in the first instance. The Trust’s 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.

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.

3

EXHIBIT A

PRINCIPAL SHAREHOLDERS OF THE FUNDFUND†

As of February 23, 2009,15, 2012, the following persons were the owners of more than 5% of the outstanding shares of the following classclasses 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:

A-1

EXHIBIT B

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of the 1st day of May, 2009, by and between Pacholder High Yield Fund, Inc., a Maryland corporation (hereinafter called the “Fund”), and J.P. Morgan Investment Management Inc., a Delaware Corporation (hereinafter called “JPMIM” or the “Adviser”).

WHEREAS, the Fund is engaged in business as a diversified, closed-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the “1940 Act”);

WHEREAS, JPMIM is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and engages in the business of acting as investment adviser;

NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter contained, the Fund and the Adviser agree as follows:

1.Duties and Responsibilities of Adviser.SECTION 16(a) BENEFICIAL OWNER REPORTING COMPLIANCE

A.Investment Advisory Services. The Fund hereby retains the Adviser to act as investment manager of the Fund and, subject to the supervision of the Fund’s Board of Directors, to supervise the investment activities of the Fund as hereinafter set forth giving due consideration to the policies of the Fund as expressed in the Fund’s Registration Statement on Form N-2 under the 1940 Act and under the Securities Act of 1933, as amended, as well as to the factors affecting the status of the Fund as a “regulated investment company” under the Internal Revenue Code of 1986, as amended. Without limiting the generality of the foregoing, the Adviser:

(i) shall obtain and evaluate such information and advice relating to the economy, securities markets and securities as it deems necessary or useful to discharge its duties hereunder;

(ii) shall continuously manage the assets of the Fund in a manner consistent with the investment objectives and policies of the Fund;

(iii) shall determine the securities to be purchased, sold or otherwise disposed of by the Fund and the timing of such purchases, sales and dispositions; and

(iv) shall take such further action, including the placing of purchase and sale orders on behalf of the Fund, as the Adviser shall deem necessary or appropriate. The Adviser shall also furnish to or place at the disposal of the Fund such of the information, evaluations, analyses and opinions formulated or obtained by the Adviser in the discharge of its duties as the Fund may, from time to time, reasonably request.

B. Reports to Fund. The Adviser shall furnish to or place at the disposal of the Fund such information, reports, evaluations, analyses and opinions relatedLate Forms Relating to the Fund’s investments and investment activities, and the Adviser’s investment outlook and strategy as the Fund may, at any time or from time to time, reasonably request or as the Adviser may deem helpful to the Fund.Most Recently Concluded Fiscal Year

C. Fund Personnel. The Adviser agrees to permit individuals who are officers or employees of the Adviser to serve (if duly elected or appointed) as officers, directors, members of any committee of directors, members of any advisory board, or members of any other committee of the Fund, without remuneration from or other cost to the Fund.

B-1

2. Allocation of Expenses.

A. Expenses Paid by Adviser. The Adviser shall bear the cost of rendering the investment management and supervisory services to be performed by it under this Agreement, and shall, at its own expense, pay the compensation of the officers and employees of the Fund who are employees of the Adviser or any corporate affiliate of the Adviser, if any, and provide such office space, facilities and equipment and maintain such records as required by applicable law or as the Advisor shall reasonably require in the management of the assets of the Fund. The Adviser shall also bear the cost of telephone service, heat, light, power and other utilities provided to the Fund.

B. Expenses Paid by Fund. The Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including without limitation: the charges and expenses of any registrar, any fund administrator, any fund accountant, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and other property, and any stock transfer or dividend agent or agents appointed by the Fund; brokers’ commissions and other transaction expenses chargeable to the Fund in connection with portfolio transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of certificates representing shares of the Fund; all costs and expenses in connection with the registration and maintenance of registration of the Fund and its shares with the Securities and Exchange Commission and various states and other jurisdictions (including filing fees and legal fees and disbursements of counsel and the costs and expenses of preparation, printing (including typesetting) and distributing a prospectus for such purposes); all expenses of shareholders’ and directors’ meetings and of preparing, printing and mailing proxy statements and reports to shareholders; fees of directors or members of any advisory board or committee who are not employees of the Adviser or any corporate affiliate of the Adviser; travel expenses of directors; all expenses incident to the payment of any dividend reinvestment program; charges and expenses of any outside service used for pricing of the Fund’s portfolio securities; charges and expenses of legal counsel, including counsel to the directors of the Fund who are not “interested persons” (as defined in the 1940 Act) of the Fund or the Adviser, and of independent accountants, in connection with any matter relating to the Fund; membership dues of industry associations; interest payable on Fund borrowings; fees and expenses incident to the listing of the Fund’s shares on any stock exchange; postage; insurance premiums on property or personnel (including officers and directors) of the Fund which inure to its benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); fees and expenses of counsel, accountants and investment bankers; and all other charges and costs of the Fund’s operation unless otherwise explicitly provided herein.

3. Compensation.

A. Fulcrum Fee. As full compensation for the services provided, facilities furnished and expenses paid by the Adviser under this Agreement, the Fund agrees to pay the Adviser an annual investment advisory fee, which increases and decreases proportionately based on the investment performance of the Fund in relation to the investment record of the Credit Suisse First Boston High Yield Index, Developed Countries Only (the “Index”). The advisory fee shall be computed and paid monthly as soon as practicable after the end of each calendar month, as follows:

(i) If the Fund’s investment performance for the 12 months immediately preceding the end of the month is equivalent to the investment record of the Index for the same 12-month period, then the advisory fee shall be computed at the annual rate of 0.90% of the Fund’s average net assets. The rate at which the

B-2

advisory fee is computed shall be increased or decreased from the 0.90% fulcrum fee by 10% of the amount by which the investment performance of the Fund exceeds or is less than the investment record of the Index, up to a maximum of 1.40% and down to a minimum of 0.40%. For purposes of calculating the amount of the advisory fee, the Fund’s average net assets shall be determined by taking the average of all determinations of such net assets during the applicable 12-month period and the Fund’s net assets shall mean the total assets of the Fund minus accrued liabilities of the Fund other than the principal amount of any outstanding senior securities representing indebtedness (within the meaning of Section 18 of the 1940 Act). The investment performance of the Fund and the investment record of the Index shall be determined in accordance with the Advisers Act and the rules and regulations promulgated thereunder.

(ii) The compensation due to the Adviser after the end of each month shall be equal to 1/12^th of the amount of the annual advisory fee calculated as provided in sub-paragraph (i) above.

(iii) Notwithstanding the foregoing, during the 12-month period immediately following the date on which this Agreement takes effect, the Fund shall pay the Adviser the minimum fee payable under the Agreement and any balance due based on the Fund’s investment performance during the period shall be paid to the Adviser upon completion of such period.

B. Proration. If the Adviser shall serve for less than the whole of any month, the investment advisory fee shall be prorated on the basis of the 12-month period immediately preceding the date of termination of this Agreement.

4. Brokerage. Subject to the approval of the Board of Directors of the Fund, the Adviser, in carrying out its duties under Section 1. A., may cause the Fund to pay a broker-dealer which furnishes brokerage and research services within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a higher commission than that which might be charged by another broker-dealer, if such commission is deemed reasonable in relation to the brokerage and research services provided by the broker-dealer, viewed in terms of either that particular transaction or the overall responsibilities of the Adviser with respect to the accounts as to which it exercises investment discretion (as such term is defined under Section 3(a)(35) of the Exchange Act).

5. Adviser’s Use of the Services of Others. The Adviser may (at its cost except as contemplated by Sections 2 and 4 of this Agreement) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Adviser or the Fund with such statistical and other factual information, such advice regarding economic factors and trends, such advice as to occasional transactions in specific securities or such other information, advice or assistance as the Adviser may deem necessary, appropriate or convenient for the discharge of its obligations hereunder or otherwise helpful to the Fund, or in the discharge of the Adviser’s overall responsibilities with respect to the other accounts which it serves as investment adviser.

6. Ownership of Records. All records required to be maintained and preserved by the Fund pursuant to the provisions of rules or regulations of the Securities and Exchange Commission under Section 31(a) of the 1940 Act and maintained and preserved by the Adviser on behalf of the Fund are the property of the Fund and will be surrendered by the Adviser promptly on request by the Fund.

7. Limitation of Liability of Adviser. The Adviser will use its best efforts in the supervision and management of the investment activities of the Fund, but in the absence of willful misfeasance, bad faith, gross

B-3

negligence or reckless disregard of its obligations hereunder the Adviser shall not be liable to the Fund or any of its shareholders for any error of judgment or mistake of law or for any act or omission by the Adviser or for any losses sustained by the Fund or its shareholders.

8. Services to Other Clients. Subject to Section 12 of this Agreement, nothing contained in this Agreement shall prevent the Adviser or any affiliated person of the Adviser from acting as investment adviser or manager for any other person, firm or corporation and shall not in any way bind or restrict the Adviser or any such affiliated person from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom they may be acting. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business whether of a similar or dissimilar nature.

9. Use of Adviser’s Name. The Fund may include the name “Pacholder” or any other name derived from the name “Pacholder” only for so long as this Agreement or any extension, renewal or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of the Adviser as investment adviser. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Fund will (by corporate action, if necessary) cease to use any name derived from the name “Pacholder”, any name similar thereto or any other name indicating that it is advised by or otherwise connected with the Adviser, or with any organization which shall have succeeded to the Adviser’s business as investment adviser.

10. Term of Agreement. This Agreement shall become effective as of the date first written above and, unless sooner terminated as provided herein shall continue in effect until August 31, 2010. Thereafter, if not terminated, this Agreement shall continue in effect for successive periods of 12 months each ending on August 31st of each year, provided such continuance is specifically approved at least annually by the vote of holders of “a majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund or by the Board of Directors of the Fund, and, in either event, by the vote of a majority of the directors of the Fund who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, (a) the Fund may, at any time and without the payment of any penalty, terminate this Agreement upon 30 days’ written notice to the Adviser, either by majority vote of the directors of the Fund or by the vote of the holders of a majority of the outstanding voting securities of the Fund; (b) this Agreement shall immediately terminate in the event of its assignment (to the extent required by the 1940 Act and the rules thereunder) unless such automatic termination shall be prevented by an exemptive order of the Securities and Exchange Commission; and (c) the Adviser may terminate this Agreement without payment of penalty on 180 days’ written notice to the Fund. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed post-paid, to the other party at the principal office of such party.

11. Amendment. This Agreement may be amended subject to the provisions of Section 15 of the 1940 Act, as modified by or interpreted by any applicable order or orders of the Securities and Exchange Commission (“Commission”) or any rules or regulations adopted by, or interpretive releases of, the Commission, by the parties without the vote or consent of the shareholders of the Fund to supply any omission, to cure, correct or supplement any ambiguous, defective or inconsistent provision hereof, or if they deem it necessary to conform this Agreement to the requirements of applicable federal laws or regulations, but neither the Fund nor the Adviser shall be liable for failing to do so.

B-4

12. Allocation of Services. The Adviser reserves the right to manage other investment accounts, including those with investment objectives similar to the Fund. Securities considered as investments for the Fund may also be appropriate for other investment accounts managed by the Adviser. Subject to applicable laws and regulations, the Adviser will attempt to allocate equitably portfolio transactions among the portfolios of its other investment accounts whenever decisions are made to purchase or sell securities by the Fund and one or more of such other accounts simultaneously. In making such allocations, the main factors to be considered by the Adviser will be the respective investment objectives of the Fund and such other accounts, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment by the Fund and such other accounts, the size of investment commitments generally held by the Fund and such accounts, and the opinions of the persons responsible for recommending investments to the Fund and such other accounts.

13. Governing Law. This Agreement shall be construed in accordance with the laws of the State of New York and the applicable provisions of the 1940 Act and the Advisers Act. To the extent the applicable law of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act or the Advisers Act, the latter shall control.

B-5

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written.

B-6

EVERY SHAREHOLDER’S VOTE IS IMPORTANT

Please detach at perforation before mailing.

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 Kristin RiggersMatthew 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 22, 2009,25, 2012, and at any adjournments thereof.

Receipt of the Notice of Annual Meeting of Shareholders dated February 29, 2012 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.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.

EVERY SHAREHOLDER’S 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 22, 2009.25, 2012.

The Proxy Statement and Annual Report for this meeting are available at:https://www.proxy-direct.com/jpm19862phy23274

Please detach at perforation before mailing.

The Board of Directors recommends a voteFOR the listed nominees.

PLEASE MARK VOTES AS IN THIS EXAMPLE:    ¢n

PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.

JPM_19862_021109_APHY_23274_011212_A

EVERY SHAREHOLDER’S VOTE IS IMPORTANT

Please detach at perforation before mailing.

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 Kristin RiggersMatthew 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 22, 2009,25, 2012, and at any adjournments thereof.

Receipt of the Notice of Annual Meeting of Shareholders dated February 29, 2012 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.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE ENCLOSED ENVELOPE PROVIDED.

EVERY SHAREHOLDER’S 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 22, 2009.25, 2012.

The Proxy Statement and Annual Report for this meeting are available at:https://www.proxy-direct.com/jpm19862phy23274

Please detach at perforation before mailing.

The Board of Directors recommends a voteFOR the listed nominees.

PLEASE MARK VOTES AS IN THIS EXAMPLE:    ¢n

PLEASE BE SURE TO SIGN AND DATE THIS PROXY AND RETURN USING THE  ENCLOSED ENVELOPE PROVIDED.

JPM_19862_021109_BPHY_23274_011212_B