NEW YORK, NY — (MARKET WIRE) — 04/21/05 — Prospect Energy Corporation (NASDAQ: PSEC),(“Prospect” or “Company”) announced today that its Board of Directors hasapproved a dividend of $0.15 per share to holders of record on June 10,payable on June 30, 2005, representing an increase of $0.025 from the priorquarter’s dividend of $0.125 per share and the third consecutive quarterlyincrease.
The Company also announced that William E. Vastardis, in addition to hiscurrent role as the Company’s Chief Compliance Officer, will be retained toserve as Chief Financial Officer. The current CFO, Mr. Eugene S. Stark,has accepted a more senior position at an investment management firmmanaging substantially more assets than Prospect, effective April 29, 2005.
Mr. Vastardis is Co-CEO of EOS Compliance Services LLC and President of EOSFund Services LLC (collectively, “EOS”). Mr. Vastardis will execute theCFO functions with the support of his team of 14 professionals at EOS. Mr.Vastardis and the EOS companies perform various fund administrationservices for registered investment companies, registered investmentadvisors and other institutions with total assets in excess of $23billion. Prospect selected Mr. Vastardis and EOS based on EOS’ reputationand based on Prospect’s very positive experience with Mr. Vastardis in therole of Chief Compliance Officer, a position he has held since January 4,2005.
“I never thought when I accepted the position as CFO at Prospect Energy afew months ago that I would receive an unsolicited offer I just couldn’trefuse,” said Mr. Stark. “I have been very happy as a member of theProspect team. I have only positive views of the management, portfolio,and business strategy of Prospect Energy, and I wish John, Grier, Bill, andthe rest of the team continued success. I look forward to continuing myrelationship with Prospect Energy as a friend and long-term shareholder ofthe Company.”
“We never like to lose someone of Gene Stark’s caliber and integrity, butwe understand his desire to step up from a CFO role to a broader role at asignificantly larger investment firm and we want the best for him,” saidJohn F. Barry III, Chairman and CEO of Prospect Energy. “We wish Gene as afriend every success in his next role, and expect that we will continue tocall upon him from time to time for his advice and counsel, which we value.We are also pleased to deepen our relationship with Bill Vastardis and theteam at EOS and to further benefit from the expertise and resources EOSbrings to us. We believe that expanding the relationship between Prospectand EOS serves the best interest of our company and our shareholders byproviding to us high quality financial and compliance management on acost-effective basis. EOS has a staff of 14 people, each of whom makeavailable to us specialized expertise that gives us a strong resource baseand tight controls to ensure timely compliance with Sarbanes-Oxleyrequirements in the coming year, while the investment team focuses oninvesting the Company’s capital.”
William E. Vastardis, in addition to the roles of Co-Chief ExecutiveOfficer of EOS Compliance Services LLC, President of EOS Fund Services LLC,and Chief Compliance Officer of Prospect Energy Corporation is also theChief Compliance Officer of Prospect Capital Management, LLC, the Company’sinvestment adviser. He will also serve as Chief Financial Officer ofProspect Administration, LLC, effective April 30, 2005. The Company andProspect Administration will each contract with EOS Fund Services LLC forMr. Vastardis’ services as Chief Financial Officer, as well as for otherfinancially-related services that may be provided by EOS Fund Services LLC.The Company believes that expanding its relationships with EOS will helpthe company effect cost savings and efficiencies. Mr. Vastardis willcontinue to perform his other duties for EOS Compliance Services LLC andEOS Fund Services LLC.
Mr. Vastardis (age 49) is a founder and President of EOS Fund Services LLCand Co-Chief Executive Officer of EOS Compliance Services LLC. Mr.Vastardis has over 26 years of experience in fund oversight andadministration. Mr. Vastardis founded EOS Fund Services LLC in 2003 and EOSCompliance Services LLC in June 2004. The EOS group of companies performschief compliance officer and fund administration services for variousregistered mutual funds, registered investment advisers and otherinstitutions with total assets in excess of $23 billion. Prior to foundingEOS Fund Services LLC, Mr. Vastardis managed a third-party fundadministration firm, AMT Capital Services Inc., which was acquired byInvestors Bank & Trust Company in 1998. Mr. Vastardis continued in the roleof Managing Director at the renamed Investors Capital Services until hedeparted to found EOS Fund Services LLC. Prior to starting AMT Capital, Mr.Vastardis spent 14 years at The Vanguard Group, where he most recentlyserved as Vice President in charge of the $10 billion Private Label Groupthat handled the administration of over 45 outside funds. Mr. Vastardis isa graduate of Villanova University.
Mr. Vastardis was retained as Chief Financial Officer pursuant to anagreement between the Company and EOS Fund Services LLC. For Mr. Vastardis’services as Chief Financial Officer, he will be compensated at the monthlyrate of $18,750, payable to EOS Fund Services LLC. In addition, ProspectAdministration, LLC will compensate EOS Fund Services LLC at a monthly rateof $2,083. Mr. Vastardis’ appointment is not pursuant to any understandingor arrangement between him and any other person, and there are no familyrelationships between Mr. Vastardis and any other director or executiveofficer of the Company. In addition, Mr. Vastardis has never had anydirect or indirect material interests in any transactions to which theCompany has been a party.
About Prospect Energy Corporation
Prospect Energy Corporation (www.prospectenergy.com) is a closed-endinvestment company that lends to and invests in energy-related businessesand assets. Prospect Energy’s investment objective is to generate bothcurrent income and long-term capital appreciation through debt and equityinvestments. Since completing its initial public offering in July 2004, thecompany has invested in Gas Solutions, an East Texas gas gathering andprocessing business; Unity Virginia Holdings, a Virginia coal miningoperator; Natural Gas Systems, a Texas oil and gas production company;Stryker Energy II, LLC, an Appalachian oil and gas production company basedin Cleveland, Ohio; and Whymore Coal Company, a Kentucky coal miningoperator.
Prospect Energy has elected to be treated as a business development companyunder the Investment Company Act of 1940 (“1940 Act”). Accordingly, we arerequired to comply with a series of regulatory requirements under the 1940Act as well as applicable NASDAQ, state, and federal rules and regulations.In addition, we have elected to be treated as a regulated investmentcompany under the Internal Revenue Code of 1986 (“Code”). The Codespecifies certain quarterly asset diversification and annual source ofincome requirements. To the extent we remain in compliance with theapplicable provisions of the Code, we will not be required to paycorporate-level taxes on any income that we earn. To the extent we do notqualify as elected, corporate-level taxes may be imposed upon our netincome.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements involve risks and uncertainties, including, but not limited to,statements as to our future operating results; our business prospects andthe prospects of our portfolio companies; the impact of investments that weexpect to make; the dependence of our future success on the general economyand its impact on the industries in which we invest; the ability of ourportfolio companies to achieve their objectives; our expected financingsand investments; the adequacy of our cash resources and working capital;and the timing of cash flows, if any, from the operations of our portfoliocompanies.
We may use words such as “anticipates,” “believes,” “expects,” “intends,””will,” “should,” “may,” “hope” and similar expressions to identifyforward-looking statements. Such statements are based on currentlyavailable operating, financial and competitive information and are subjectto various risks and uncertainties that could cause actual results todiffer materially from our historical experience and our presentexpectations. Undue reliance should not be placed on suchforward-looking statements as such statements speak only as of the date onwhich they are made. We do not undertake to update ourforward-looking statements unless required by law.
Contact:Please send investment proposals to:Prospect Energy CorporationJohn Barryjbarry@prospectstreet.com(212) 448-0702Grier Eliasekgrier@prospectstreet.com(212) 448-0702