SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 1998
Prospect Street High Income Portfolio Inc.
(Exact name of registrant as specified in its charter)
Maryland 811-5557
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
60 State Street, Boston, Massachusetts 02109
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Address of principal executive offices
Registrant's telephone number, including area code: (617) 742-3800
N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On April 1, 1998, PROSPECT STREET HIGH INCOME PORTFOLIO INC., a
Maryland investment company (the "Company"), effected a one-for-three reverse
stock split of its outstanding shares of Common Stock (the "reverse stock
split"), effective as of the close of business on such date. As of the close of
business on April 1, 1998, and after giving effect to the reverse stock split,
the Company had 19,682,941 shares of Common Stock outstanding. Trading of the
Company's Common Stock to reflect the reverse stock split on the New York
Exchange commenced April 2, 1998. The reverse stock split was approved by the
Company's stockholders at an annual meeting of stockholders held on March 11,
1998.
Further background information relating to the reverse stock split is
contained in the Company's proxy statement provided to the Company's
stockholders in connection with the annual meeting of stockholders held on March
11, 1998.
In addition to the reverse stock split, the stockholders of the Company
approved various other proposals at the Company's annual meeting including (i)
an Amendment to the Company's Articles of Amendment and Restatement authorizing
the issuance of a new class of preferred stock that would be issuable from time
to time by the Board of Directors in one or more series; (ii) an Amendment of
the Company's fundamental investment restriction relating to borrowing and the
issuance of senior securities; and (iii) a change of the Company's investment
policy restricting the purchase of illiquid securities from a fundamental
restriction to a non-fundamental restriction. The Articles of Amendment were
duly filed on April 1, 1998 with the State of Maryland. However, items (i) and
(ii) above will not be implemented until redemption of the currently outstanding
taxable auction rate preferred stock (TARPs). Item (iii) will become effective
upon such redemption.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(C) Exhibits
99(a) Articles of Amendment filed with the State of
Maryland on April 1, 1998 to the Articles Of
Amendment and Restatement Of Prospect Street High
Income Portfolio, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROSPECT STREET HIGH INCOME
PORTFOLIO INC.
Dated: April 2, 1998 By: /s/ Karen J. Thelen
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Name:
Title:
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EXHIBIT 99(a)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
PROSPECT STREET HIGH INCOME PORTFOLIO INC.
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PROSPECT STREET HIGH INCOME PORTFOLIO INC., a corporation
organized and existing under the laws of the State of Maryland (the
"Corporation"), hereby certifies as follows:
FIRST: That the following resolutions were duly adopted by the
Board of Directors of the Corporation, setting forth a proposed amendment to
Articles of Amendment and Restatement (the "Charter") of the Corporation.
Article IV is amended by deleting in its entirety Article IV
Section (A) and inserting in lieu thereof the following Sections (A) and (B):
(A) CAPITAL STOCK
1. Class and Amount Authorized
The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is one hundred one
million one thousand (101,001,000) shares, of which one hundred million
(100,000,000) shares shall be Common Stock, $.03 par value per share,
one thousand (1000) shares shall be Taxable Auction Rate Preferred
Stock, no par value per share, liquidation preference $100,000 per
share (the "TARPS Stock") and one million (1,000,000) shares shall be
Preferred Stock, $1.00 par value per share (the "Preferred Stock").
Each three (3) shares of the Corporation's Common Stock issued and
outstanding on the effective date of this amendment shall be and hereby
are changed without further action into one (1) fully paid and
nonassessable shares of the Corporation's Common Stock, provided that
no fractional shares shall be issued pursuant to such change.
2. No Preemptive Rights
No holder of any shares of any class of stock or any other
securities of the Corporation, whether now or hereafter authorized,
shall have any preemptive right to subscribe for or purchase any shares
of any class of stock or any other securities of the Corporation other
than such, if any, as the Board of Directors, in its sole discretion,
may determine and at such price or prices and upon such
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other terms as the Board of Directors, in its sole discretion, may fix;
and any shares of any class of stock or other securities which the
Board of Directors may determine to offer for subscription may, as the
Board of Directors in its sole discretion shall determine, be offered
to holders of any class, series or type of stock or other securities at
the time outstanding to the exclusion of the holders of any or all
other classes, series or types of stock or other securities at the time
outstanding.
(B) PREFERRED STOCK
Preferred Stock may be issued in one or more series. The Board
of Directors may authorize the issuance of the Preferred Stock in such
series without stockholder approval and may fix from time to time
before issuance the number of shares to be included in any series and
the designation, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications,
terms or conditions of redemption and other terms of all shares of such
series. The authority of the Board of Directors with respect to each
series includes, without limiting the foregoing, the authority to
determine any or all of the following:
1. The number of shares of any series and the
designation to distinguish shares of such series from shares
of all other series;
2. The voting powers, if any, and whether such voting
powers are full or limited and whether other classes or series
have the right to vote on specific matters as to which voting
powers are granted to such series and whether voting is by
class;
3. The redemption provisions, if any, applicable to
such series, including the time or times and the prices;
4. The dividends (which may be cumulative or
non-cumulative) to be paid on such series, including the rate
or rates (or the procedures by which the rate or rates are to
be determined), the conditions and the times and whether
payable in preference to, or in such relation to, the
dividends payable on any other class or classes or series of
stock;
5. The rights of such series upon the dissolution
(voluntary or involuntary) of, or upon any distribution of the
assets of, the Corporation;
6. The provisions, if any, pursuant to which the
shares of such series are convertible into, or exchangeable
for, shares of any other class or classes or of any other
series of the same or any other class or classes of stock of
the Corporation or any other security of the Corporation and
the price or prices of the rates of exchange, and any
adjustments thereto;
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7. The provisions, if any, of a sinking fund or
purchase fund to be applied to the redemption or purchase of
shares of such series;
8. The provisions, if any, relating to the conditions
and restrictions upon the creation of indebtedness of the
Corporation, upon the issuance of any additional stock
(including additional shares of such series or of any other
series) and upon the payment of dividends or the making of
other distributions on, and the purchase, redemption or other
acquisition by the Corporation of any outstanding stock of the
Corporation; and
9. Any other relative, participating, optional or
other special rights and qualifications, limitations or
restrictions thereof;
all as shall be determined by the Board of Directors and stated in said
resolution or resolutions establishing or amending the characteristics
of such class or series of preferred stock. Except where otherwise set
forth in the resolution or resolutions adopted by the Board of
Directors providing for the classification of any series of Preferred
Stock, the number of shares comprising such series may be increased or
decreased (but not below the number of shares then outstanding) from
time to time by like action of the Board of Directors.
Preferred Stock of any series not issued or which has been
redeemed, converted, exchanged, purchased or otherwise acquired by the
Corporation shall constitute authorized but unissued Preferred Stock.
Article IV Section (B) is amended by deleting in its entirety
the existing Section (B), renumbering the Section and all references
thereto as Section (C) and substituting therefor the following:
(C) COMMON STOCK
The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption with respect to the Common Stock are as follows:
1. Ranking.
The Common Stock shall rank junior to the Preferred Stock and
the TARPS Stock with respect to payment of all dividends (other than
dividends in Common Stock) and distributions on liquidation or
dissolution and shall have such other qualifications, limitations and
restrictions as provided in this Charter.
2. Dividends.
After all accumulated and unpaid dividends upon all
outstanding shares of the Preferred Stock and TARPS Stock for all past
Dividend Periods (as defined below) have been or are contemporaneously
paid in full (or declared and sufficient Deposit Securities (as defined
below) have been set apart for their payment), then and not otherwise,
and subject to any other applicable provisions
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of the Charter, to the extent there are funds legally available
therefor, dividends or other distributions may be declared upon and
paid to the holders of shares of the Common Stock, to the exclusion of
the holders of shares of the Preferred Stock and TARPS Stock.
3. Liquidation Rights.
In the event of the dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the holders of the Preferred
Stock and the TARPS Stock as provided for in this Charter, the holders
of shares of the Common Stock shall be entitled, to the exclusion of
the holders of shares of the Preferred Stock and TARPS Stock, to share
ratably in all remaining assets of the Corporation.
4. Voting Rights.
Each holder of Common Stock shall be entitled to one vote for
each such whole share (and a proportionate vote for each such
fractional share) on each matter on which the holders of shares of the
Common Stock shall be entitled to vote. Except as otherwise provided in
this Charter, the holders of shares of the Common Stock and the holders
of shares of Preferred Stock and TARPS Stock shall vote as a single
class on all matters submitted to the stockholders.
5. Redemption.
The Corporation may redeem or repurchase shares of Common
Stock to the extent now or hereafter permitted by the laws of the State
of Maryland, the Investment Company Act of 1940 (the "1940 Act") and by
the Charter.
Article IV Section (C) is hereby amended by renumbering such
Section and all references thereto as Section (D) and by changing each
reference to "Preferred Stock" therein to "TARPS Stock." Article V and
Article VI are likewise amended by changing each reference to
"Preferred Stock" therein to "TARPS Stock."
Article IV is amended by adding new Sections (E) and (F) as
follows:
(E) CONFLICT BETWEEN TERMS OF TARPS STOCK AND
PREFERRED STOCK
Notwithstanding any other provision of this Charter which,
absent this Section (E), would limit the right of the Corporation or
the Board of Directors to create, classify or issue the Preferred Stock
or to grant rights, powers and preferences of any nature which might be
equal in any respect to the TARPS Stock, the Board of Directors as
specified in Section (A) and Section (B) may classify such stock and
grant any rights or preferences equal to the TARPS Stock, to the extent
permitted by the 1940 Act, as amended from time to time.
The creation, classification and issuance of Preferred Stock
at a time when the TARPS Stock is outstanding shall not be deemed to be
a default under
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subsection (D)(5)(b) or to cause the holders of the TARPS Stock to have
a right to elect a majority of the Board of Directors under subsection
(D)(6)(b) if, upon issuance, the net proceeds from the sale of such
Preferred Stock (or such portion thereof needed to redeem the TARPS
Stock) are deposited with the Paying Agent in accordance with Article
IV Section (D)(5)(c)(vii), notice of Optional Redemption pursuant to
subsection (D)(5)(a) has been delivered prior thereto or is sent
promptly thereafter and such proceeds are used to redeem the TARPS
Stock. The redemption price of all TARPS Stock redeemed with such
proceeds shall be the price set forth in subsection (D)(5)(a).
Any classification of the Preferred Stock may provide for
rights, powers, privileges and preferences inconsistent with the terms
of the TARPs Stock even if such rights, powers, preferences or
privileges are subordinated to the rights of the TARPS Stock so long as
any of the TARPS Stock is deemed outstanding.
(F) ELIMINATION OF TARPS STOCK
At such time as all outstanding TARPS Stock has been redeemed
or Deposit Securities constituting immediately available funds
sufficient to redeem all of the TARPS Stock have been deposited with
the Paying Agent as required by Article IV Section (D)(5)(c)(vii), the
Board of Directors may adopt a resolution declaring that the
Corporation shall no longer be authorized to issue the TARPS Stock.
Upon adoption of such resolution, subsection (D), (E) and (F) of
Article IV and all other references to the TARPS Stock shall
automatically be deleted from the Charter and the Board of Directors is
hereby authorized to restate the Charter deleting all of such
provisions. Any former holders of TARPS Stock who have not then
submitted their TARPS Stock for redemption shall have only the right to
receive payment for their stock deposited with the Paying Agent in
accordance with the terms formerly set forth in Section (D) (without
interest).
At such time as the TARPS Stock is eliminated, the following additional
amendments shall automatically take effect:
1. Article V Section (A) of the Fund's Charter of the
Corporation as heretofore amended shall be amended by deleting the same
and substituting in lieu thereof the following:
(A) All corporate power and authority of the Corporation
(except as otherwise provided by statute, by this Charter, or by the
Corporation's By-Laws) shall be vested in and exercised by the Board of
Directors. Except as may be required by other provisions of this
Charter, the number of Directors constituting the Board of Directors
shall be not less than three (3), nor more than fifteen (15) with the
exact number to be fixed pursuant to the By-Laws, provided that the
numbers of Directors shall at no time be less than the minimum number
required under the Maryland General Corporation law or, as long as any
shares of the Preferred Stock are outstanding, the 1940 Act, as amended
from time to time.
2. Article VI Sections (A) and (B) of the Charter of the
Corporation as hereinbefore amended shall be amended by deleting the
same and substituting
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in lieu thereof only the following Section (A) and renumbering Section
(C) and all references thereto as Section (B):
(A) The Corporation reserves the right from time to time to
amend, alter, change or repeal any provision contained in this Charter,
now or hereafter authorized by law, including any amendment that alters
the contract rights, as expressly set forth in this Charter, of any
outstanding stock. Any amendment to this Charter shall be adopted at
either a regular or special meeting of the stockholders pursuant to the
affirmative vote of a majority of all the outstanding shares of the
Corporation's capital stock, which shall vote as a single class, except
as otherwise provided in this Charter. The Common Stock and the
Preferred Stock shall vote as separate classes to the extent otherwise
required under Maryland law or the 1940 Act, as amended from time to
time.
SECOND: That the Amendment to the Charter of the Corporation
effected by this Certificate was duly advised by the Board of Directors of the
Corporation and approved by at least a majority of the outstanding stockholders
as required by law in accordance with the provisions of the General Corporation
Law of the State of Maryland.
THIRD: (a) The total number of shares of all classes of stock
of the corporation heretofore authorized, and the number and par value of the
shares of each class were as follows:
Total authorized stock--one hundred million, one thousand
(100,001,000) shares, having an aggregate par value of
$1,000,000, divided into the following classes:
1. one hundred million (100,000,000) shares of
common stock, $.01 par value per share;
2. one thousand (1,000) shares of taxable
auction rate preferred stock, no par value
per share.
(b) The total number of shares of all classes of stock of the
Corporation as increased by these Articles of Amendment, and the number and par
value of the shares of each class, are as follows:
The total number of shares of stock which the Corporation
shall have authority to issue is one hundred one million one
thousand (101,001,000) shares, having an aggregate par value
of two million dollars ($2,000,000), divided into the
following shares:
1. one hundred million (100,000,000) shares of
common stock, $.01 par value per share;
2. one thousand (1,000) shares of taxable
auction rate preferred stock, no par value
per share; and
3. one million (1,000,000) shares of preferred
stock, $1.00 par value per share.
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(c) The aggregate par value of all shares of all classes of
stock of the Corporation heretofore authorized was $1,000,000. The aggregate par
value of all shares of all classes of stock as increased by this amendment is
$2,000,000. This amendment has the effect of increasing the aggregate par value
of all shares of all classes of stock of the Corporation by $1,000,000.
(d) The shares have been divided into classes as indicated
above. A description of each class is reflected in Article IV of the
Corporation's Articles of Amendment and Restatement as previously amended and as
amended by these Articles of Amendment.
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IN WITNESS WHEREOF, Prospect Street High Income Portfolio Inc.
has caused this Certificate of Amendment to be signed by Richard E. Omohundro,
Jr., its President, who hereby acknowledges under penalties of perjury that the
facts herein stated are true and that this Certificate of Amendment is his act
and deed, and attested by Karen J. Thelen, its Secretary, this 30th day of
March, 1998.
PROSPECT STREET HIGH INCOME PORTFOLIO INC.
By:/s/ Richard E. Omohundro, Jr.
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Name: Richard E. Omohundro, Jr.
Title: President
Attest:
/s/ Karen J. Thelen
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Name: Karen J. Thelen
Title: Secretary
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