If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule
13d-1(f) or Rule 13d-1(g), check the following box. [x]
* The remainder of this cover page shall be filled out for a reporting
person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 2 of 8 Pages
|
1
|
NAME OF REPORTING PERSON
Saba Capital Management, L.P.
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
OO (see Item 3)
|
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
-0-
|
8
|
SHARED VOTING POWER
7,528,629[1]
|
9
|
SOLE DISPOSITIVE POWER
-0-
|
10
|
SHARED DISPOSITIVE POWER
7,528,629
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,528,629
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%
|
14
|
TYPE OF REPORTING PERSON
PN; IA
|
|
|
|
|
|
The percentages used herein are calculated based upon 85,156,216
shares of common stock outstanding as of 10/31/2019, as disclosed in the company’s N-CSR filed 12/30/2019.
____________________________________
[1]
A portion of the shares are held by Saba Closed-End Funds ETF, which will vote its shares pursuant
to its Statement of Additional Information.
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 3 of 8 Pages
|
1
|
NAME OF REPORTING PERSON
Boaz R. Weinstein
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
OO (see Item 3)
|
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
United States
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
-0-
|
8
|
SHARED VOTING POWER
7,528,629[2]
|
9
|
SOLE DISPOSITIVE POWER
-0-
|
10
|
SHARED DISPOSITIVE POWER
7,528,629
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,528,629
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%
|
14
|
TYPE OF REPORTING PERSON
IN
|
|
|
|
|
|
The percentages used herein are calculated based upon 85,156,216
shares of common stock outstanding as of 10/31/2019, as disclosed in the company’s N-CSR filed 12/30/2019.
____________________________________
[2]
A portion of the shares are held by Saba Closed-End Funds ETF, which will vote its shares pursuant
to its Statement of Additional Information.
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 4 of 8 Pages
|
1
|
NAME OF REPORTING PERSON
Saba Capital Management GP, LLC
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
OO (see Item 3)
|
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
-0-
|
8
|
SHARED VOTING POWER
7,528,629[3]
|
9
|
SOLE DISPOSITIVE POWER
-0-
|
10
|
SHARED DISPOSITIVE POWER
7,528,629
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,528,629
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%
|
14
|
TYPE OF REPORTING PERSON
OO
|
|
|
|
|
|
The percentages used herein are calculated based upon 85,156,216
shares of common stock outstanding as of 10/31/2019, as disclosed in the company’s N-CSR filed 12/30/2019.
____________________________________
[3]
A portion of the shares are held by Saba Closed-End Funds ETF, which will vote its shares pursuant
to its Statement of Additional Information.
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 5 of 8 Pages
|
Item 1.
|
SECURITY AND ISSUER
|
|
|
|
This Amendment No. 8 amends
and supplements the statement on Schedule 13D filed with the SEC on March 14, 2019 (the “Original Schedule
13D”), as amended by Amendment No. 1 to the Original Schedule 13D filed with the SEC on April 18, 2019
(“Amendment No. 1”), Amendment No. 2 filed with the SEC on July 29, 2019 (“Amendment No.
2”), Amendment No. 3 filed with the SEC on December 27, 2019 (“Amendment No. 3”), Amendment No.
4 filed with the SEC on January 10, 2020 (“Amendment No. 4”), Amendment No. 5 filed with the SEC on
January 21, 2020 (“Amendment No. 5”), Amendment No. 6 filed with the SEC on February 18, 2020
(“Amendment No. 6”) and Amendment No. 7 filed with the SEC on March 20, 2020 (“Amendment No.
7”, and together with this Amendment No. 8, the Original Schedule 13D, Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, Amendment No. 5 and Amendment No. 6, the “Schedule 13D”), with respect
to the Common Shares of Western Asset High Income Fund II Inc. This Amendment No. 8 amends Items 3, 4, 5, 6 and 7 as set
forth below.
|
|
|
Item 3.
|
SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
|
|
|
|
Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:
|
|
|
|
Funds for the purchase of the Common Shares were derived from the subscription proceeds from investors and the capital appreciation thereon and margin account borrowings made in the ordinary course of business. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account, which may exist from time to time. Since other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Common Shares reported herein. A total of approximately $48,860,631 was paid to acquire the Common Shares reported herein.
|
Item 4.
|
PURPOSE OF TRANSACTION
|
|
|
|
Item 4 of the Schedule 13D is hereby amended and supplemented as follows:
|
|
|
|
On June 22, 2020, Saba Capital Management, L.P. (“Saba Capital”)
entered into a standstill agreement (the “Standstill Agreement”) with the Issuer, Legg Mason Partners Fund Advisor,
LLC (“Legg Mason”) and Western Asset Management Company, LLC (together with Saba Capital, Legg Mason and the Issuer,
the “Standstill Parties”) whereby the Standstill Parties agreed, among other things, and subject to certain conditions,
that the Issuer will conduct a tender offer (the “Tender Offer”) to purchase for cash 35% of its outstanding Common
Shares at a price equal to 99.5% of the Fund’s net asset value per share with such Tender Offer to be completed not prior
to November 13, 2020.
|
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 6 of 8 Pages
|
|
Saba Capital also agreed to
abide by certain customary standstill provisions, such provisions to last until the date that is the earlier of (a) the day following
the date on which the Issuer’s 2021 annual meeting of shareholders is held; (b) such date that the Fund determines not to
conduct the Tender Offer and (c) the date that is 60 days prior to the last date that a shareholder proposal pursuant to Rule
14a-8 under the Exchange Act or trustee nomination is permitted to be submitted to the Issuer for the Issuer’s 2022 annual
meeting of shareholders.
In addition, Saba Capital has agreed to cause
all Common Shares beneficially owned by it to be present for quorum purposes at any annual or special meeting of shareholders of
the Issuer and to be voted consistent with the recommendation of the Issuer’s board of directors, subject to certain conditions
based upon the completion of the Tender Offer.
The foregoing summary of the Standstill Agreement
is qualified in its entirety by reference to the full text of the Standstill Agreement, the form of which is attached hereto as
Exhibit 3 to this Schedule 13D and incorporated by reference herein.
|
Item 5.
|
INTEREST IN SECURITIES OF THE ISSUER
|
|
|
|
Items 5 of the Schedule 13D are hereby amended and restated as follows:
|
|
|
(a)
|
See rows (11) and (13) of the cover pages to this Schedule 13D/A for the aggregate number of Common Shares and percentages of the Common Shares beneficially owned by each of the Reporting Persons. The percentages used herein are calculated based upon 85,156,216 shares of common stock outstanding as of 10/31/2019, as disclosed in the company’s N-CSR filed 12/30/2019.
|
|
|
(b)
|
See rows (7) through (10) of the cover pages to this Schedule 13D for the number of Common Shares as to which each Reporting Person has the sole or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition.
|
|
|
(c)
|
There
were no transactions in the Common Shares effected in the sixty days prior to the filing of the Schedule 13D by the Reporting
Persons.
|
|
|
(d)
|
The funds and accounts advised by Saba Capital have the right to
receive the dividends from and proceeds of sales from the Common Shares.
|
|
|
(e)
|
Not applicable.
|
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 7 of 8 Pages
|
Item 6.
|
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
|
|
|
|
Item 6 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
|
|
|
|
As described further in Item 4 hereto, Saba Capital is party to the Standstill Agreement, which is attached as Exhibit 3 to this Amendment No. 8 and is incorporated by reference herein.
|
Item 7.
|
EXHIBITS
|
|
|
|
Item 7 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
|
|
|
Exhibit
|
Description
|
|
|
Exhibit
3:
|
Form of Standstill Agreement, dated as of June 22, 2020.
|
|
|
CUSIP No. 95766J102
|
SCHEDULE 13D/A
|
Page 8 of 8 Pages
|
SIGNATURES
After reasonable inquiry and to the best
of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: June 23, 2020
|
SABA CAPITAL Management,
L.P.
/s/ Michael D'Angelo
|
|
Name: Michael D'Angelo
Title: Chief Compliance Officer
|
|
|
|
|
|
SABA CAPITAL Management
GP, LLC
/s/ Michael D'Angelo
|
|
Name: Michael D'Angelo
Title: Authorized Signatory
|
|
|
|
|
|
BOAZ R. WEINSTEIN
/s/ Michael D'Angelo
|
|
Name: Michael D'Angelo
|
|
Title: Attorney-in-fact*
|
|
|
* Pursuant to a power of attorney dated as of November 16, 2015, which is incorporated herein by reference to Exhibit 2 to the Schedule 13G filed by the Reporting Persons on December 28, 2015, accession number: 0001062993-15-006823
|
Exhibit 3
STANDSTILL AGREEMENT
This Agreement is entered into as
of June 22, 2020 (this “Agreement” (including the exhibits hereto), by and among Saba Capital Management, L.P.
(“Saba”), Western Asset High Income Fund II Inc. (the “Fund”), Legg Mason Partners Fund Advisor,
LLC (the “Adviser”) and Western Asset Management Company, LLC (the “Sub-Adviser,” together
with Saba, the Fund and the Adviser, the “Parties” and individually a “Party”).
WHEREAS, the Fund is a closed-end
management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS, the Adviser serves
as the Fund’s adviser pursuant to a management agreement between the Fund and the Adviser;
WHEREAS, the Sub-Adviser
serves as the Fund’s sub-adviser pursuant to a subadvisory agreement between the Adviser and the Sub-Adviser; and
WHEREAS, as of the close
of business on June 19, 2020, Saba may be deemed to be the beneficial owner (as such term is used in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) of, in the aggregate, 7,528,629 shares of common stock
of the Fund, $0.001 par value (“Common Shares”), which includes Common Shares held by one or more private funds
and accounts managed by Saba (the “Saba Private Funds”) and an open- end management investment company registered
under the 1940 Act (the “ETF”) for which Saba serves as a sub-adviser. For the avoidance of doubt, the ETF is
not a party to, is not restricted by and is not governed by, the terms of this Agreement.
NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto hereby agree as follows:
Section 1. Tender Offer by the
Fund
1.1
On the basis of the representations, warranties and agreements set forth herein and subject
to performance by Saba of its covenants and other obligations hereunder and the other conditions set forth herein:
(a)
The Fund shall conduct a tender offer to purchase for cash 35% (the “Maximum Amount”)
of its outstanding Common Shares (the “Tender Offer”). The Tender Offer shall include the following terms: (i)
all shareholders shall have the opportunity to tender some or all of their Common Shares at a price equal to 99.5% of the Fund’s
net asset value per share (“NAV”) as determined as of the close of the regular trading session of the New York
Stock Exchange (the “NYSE”) on the next trading day after the expiration date of the Tender Offer or, if the
Tender Offer is extended, on the next trading day after the day to which the Tender Offer is extended, (ii) the Fund shall purchase
Common Shares tendered and not withdrawn on a prorated basis up to the Maximum Amount if greater than the Maximum
Amount of Common Shares
are properly tendered and not properly withdrawn, (iii) the consideration to be paid by the Fund for Common Shares purchased under
the Tender Offer shall consist solely of cash and (iv) if less than the Maximum Amount of Common Shares have been properly tendered
and not withdrawn, then the Fund shall only be obligated to purchase such amount of Common Shares actually tendered. Notwithstanding
anything contained in this Agreement to the contrary, in no event shall (i) the Tender Offer commence prior to the date each proposal
applicable to the Fund and the Adviser or the Sub-Adviser and its affiliates, as applicable and as set out in the Fund’s
joint proxy statement dated April 16, 2020, is approved by the vote of a majority of the outstanding voting securities of the
Fund as defined in the 1940 Act (the “Change of Control Approvals”); and (ii) the Fund pay for any Common Shares
tendered in the Tender Offer prior to November 13, 2020, nor shall the Tender Offer expire before such date. The Fund will pay
for any Common Shares tendered in the Tender Offer prior to December 1, 2020.
(b)
The Tender Offer shall not provide for preferential treatment for any shareholders of the
Fund.
(c)
The Tender Offer shall require odd lot tenders to be subject to the same proration terms as
tenders of 100 shares or more.
(d)
Although the Fund has committed to conduct the Tender Offer under the circumstances set forth
above, the Fund will not commence the Tender Offer or accept tenders of the Fund’s Common Shares during any period when (i)
such transactions, if consummated, would: (A) result in the delisting of the Fund’s shares from the NYSE or (B) impair the
Fund’s status as a regulated investment company under the Internal Revenue Code of 1986, as amended (which would make the
Fund a taxable entity, causing the Fund’s income to be taxed at the fund level in addition to the taxation of shareholders
who receive distributions from the Fund); or (ii) there is any (A) legal or regulatory action or proceeding instituted or threatened
challenging such transaction, (B) suspension of or limitation on prices for trading securities generally on the NYSE or other national
securities exchange(s), including the Nasdaq Stock Market and the NYSE MKT LLC or
(C) declaration of a banking moratorium by federal or state authorities or any suspension of payment by banks in the United States
or New York State. In the event of a delay pursuant to any of clauses (i) or (ii) above, the Fund will provide prompt written notice
to Saba together with a detailed analysis of the reason for such delay and reasonable support for such determination. In the event
of a delay pursuant to either of clauses (i) or (ii) above, the Fund will commence the Tender Offer as soon as practicable and
not later than 20 days after the termination of such delaying event.
(e)
Other than in connection with regularly scheduled distributions under a dividend reinvestment
plan, the Fund shall not issue any Common Shares or any securities exchangeable or convertible into Common Shares prior to the
payment of the Tender Offer proceeds.
1.2 Saba
agrees to tender, or cause to be tendered, all of the Common Shares of which Saba or its Affiliates or a Saba Entity is the
beneficial owner (as such term is used in Rule 13d-3 under the Exchange Act) in the Tender Offer, including, but not limited
to, all of the Common Shares then owned by Saba and the Saba Private Funds and excluding the ETF.
-
2 -
Section 2. Additional
Agreements
2.1
Saba covenants and agrees that during the period from the date of this Agreement through the
date that is the earlier of (a) the date one day after the completion of the Fund’s 2021 annual meeting of shareholders,
(b) such date that the Fund determines not to conduct the Tender Offer pursuant to Section 1.1(d) (which date shall not include
a determination to delay the Tender Offer pursuant to the last sentence of Section 1.1(d) and provided that the Board of
the Fund shall provide, within one (1) calendar day, written notice to Saba of any such determination not to conduct or delay the
Tender Offer), and (c) the date that is 60 days prior to the last date that a shareholder proposal pursuant to Rule 14a-8 under
the Exchange Act or director nomination is permitted to be submitted to the Fund for the Fund’s 2022 annual meeting of shareholders
(the “Effective Period”), it will not, and will cause its respective principals, directors, general partners,
members, officers, employees, agents (acting on Saba’s behalf), affiliated persons (as defined in the 1940 Act and which,
for the avoidance of doubt, shall exclude the ETF but shall include (without limitation) any account or other pooled investment
vehicle now or in the future managed, advised or sub-advised by Saba or its affiliated persons) and representatives under Saba’s
control (all such persons, collectively, the “Saba Entities”), and any other persons controlled by or under
common control with Saba, Saba Capital Management GP, LLC or Boaz R. Weinstein (which shall not include the ETF) (such other persons,
“Affiliates”), not to, directly or indirectly, alone or in concert with others (including, by directing, requesting
or suggesting that any other person take any of the actions set forth below), unless specifically permitted in writing in advance
by the Fund and the Adviser, take any of the actions with respect to the Fund as set forth below:
(a)
effect, seek, offer, engage in, propose (whether publicly or otherwise and whether or not
subject to conditions) or cause, participate in or act to, or assist any other person to effect, seek, engage in, offer or propose
(whether publicly or otherwise) or cause, participate in or act to (other than as specifically contemplated by this Agreement):
(i)
any “solicitation” of “proxies” or become a “participant”
in any such “solicitation” as such terms are defined in Regulation 14A under the Exchange Act, including any otherwise
exempt solicitation pursuant to clause (iv) of Rule 14a-1(l)(2) and including any otherwise exempt solicitation pursuant to Rule
14a-2(b), in each case, with respect to securities of the Fund (including, without limitation, any solicitation of consents to
act by written consent or call a special meeting of shareholders);
(ii)
knowingly encourage or advise any other person or knowingly assist or act to assist any person
in so encouraging or advising any person with respect to the giving or withholding of any proxy, consent or other authority to
vote (other than such encouragement or advice that is consistent with the Fund management’s recommendation with respect to
the Fund in connection with such matter or encouragement or advice solely amongst Saba and its Affiliates and the Saba Entities)
with respect to the Fund;
(iii)
any (i) tender or exchange offer for securities of the Fund (aside from the Tender Offer contemplated
by Section 1 or any other tender offer
-3
-
offered by the Fund to all shareholders), or
any merger, consolidation, business combination or acquisition or disposition of assets of the Fund, or (ii) recapitalization,
restructuring, open-ending, liquidation, dissolution or other similar extraordinary transaction with respect to the Fund (it being
understood that the foregoing shall not restrict any person (including Saba and its Affiliates) from tendering Common Shares, receiving
payment for Common Shares or otherwise participating in any such transaction on the same basis as other shareholders of the Fund
or from participating in any such transaction that has been approved by the Fund Board, subject to the terms of this Agreement);
(iv)
engage, directly or indirectly, in any short sale that derives substantially all of its value
from a decline in the market price of the Fund (for the avoidance of doubt, Saba and its Affiliates may short sell broad based
indices);
(b)
form, join or in any way participate in any “group” (within the meaning of Section
13(d)(3) of the Exchange Act and Rule 13d-5(b)(1) thereunder) (other than a group that consists solely of members of Saba and its
Affiliates and the Saba Entities) with respect to the securities of the Fund or in connection with seeking the election or removal
of any director of the Fund;
(c)
deposit any securities of the Fund in any voting trust or subject any securities of the Fund
to any arrangement or agreement with respect to the voting of the securities of the Fund, including, without limitation, lend any
securities of the Fund to any person or entity for the purpose of allowing such person or entity to vote such securities in connection
with any shareholder vote or consent of the Fund or to sell such securities, other than any such voting trust, arrangement or agreement
solely among the members of Saba and its Affiliates and the Saba Entities;
(d)
seek, alone or in concert with others, (i) election or appointment to, or representation on,
the Board of the Fund, or nominate or propose the nomination of, or recommend the nomination of, any candidate to the Board of
the Fund, or (ii) the removal or resignation of any member of the Board of the Fund, or knowingly encourage any such actions in
clause (i) or (ii) specifically with regard to the Fund;
(e)
make any proposal for consideration by shareholders at any annual or special meeting of shareholders
of the Fund (pursuant to Rule 14a-8 under the Exchange Act or otherwise), or take any action (other than in accordance with this
Section 2.1 and Section 2.2) with respect to any shareholder proposal or written consent submitted prior to the date
of this Agreement or during the Effective Period;
(f)
make a request for a shareholder list or other books and records of the Fund under Maryland
or New York law or any other statutory or regulatory provision;
(g)
seek to control or influence the Adviser, the Sub-Adviser, the Board of the Fund or policies
of the Fund;
(h)
institute, solicit, knowingly assist or join any litigation, arbitration or other proceeding
against or involving the Fund or any of the current or former
-4
-
directors or officers (including derivative actions)
of the Fund; provided, however, that for the avoidance of doubt the foregoing shall not prevent Saba from (A) bringing litigation
to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf
of, the Fund against Saba, or (C) responding to or complying with a validly issued legal process;
(i)
make any public statement or public proposal with respect to (i) any change in the number
or term of directors or the filling of any vacancies on the Board of the Fund, (ii) any change in the capitalization, share purchase
program, dividend policy or distribution policy of the Fund, (iii) any other material change in the Fund’s management, business
or corporate structure with respect to the Fund, or (iv) any waiver, amendment or modification to the charter or bylaws of the
Fund;
(j)
enter into any discussions, negotiations, arrangements or understandings with any person with
respect to any of the foregoing, or advise, knowingly assist or knowingly encourage others to take any action with respect to any
of the foregoing; or
(k)
publicly request (x) that the Fund, the Board of the Fund or any of their respective representatives
amend or waive any provision of this Section 2.1 (including this sentence) or (y) the Board of the Fund to specifically
invite Saba or any of its Affiliates to take any of the actions prohibited by this Section 2.1.
Nothing herein shall be deemed
to prohibit Saba and its Affiliates from communicating privately with the directors, officers, and advisors of the Fund (including
the Adviser or Sub-Adviser) so long as such private communications would not be reasonably determined to trigger public disclosure
obligations for any Party. In addition, the covenants set forth in this Section 2.1 shall not be deemed to prevent the voting of
any Common Shares held by the ETF proportionately in accordance with the method prescribed in the second clause of Section 12(d)(1)(E)(iii)(aa)
of the 1940 Act (“Mirror Voting”) in accordance with the proxy voting policy of the ETF.
2.2
Saba covenants and agrees that during the Effective Period, it will, and will cause its Affiliates
and the Saba Entities (except, for the avoidance of doubt, the ETF) to:
(a)
appear by proxy or otherwise at any annual or special meeting of shareholders of the Fund,
including for the avoidance of doubt the special meeting of shareholders related to the Change of Control Approvals, and cause
all shares it and the Saba Entities beneficially own as of the record date for such meeting to be counted as present thereat for
purposes of a quorum; and
(b)
except for any action that would be in contravention of this Agreement, vote or cause to be
voted at any annual or special meeting of shareholders of the Fund, including for the avoidance of doubt the special meeting of
shareholders related to the Change of Control Approvals, all of the shares it and the Saba Entities beneficially own as of the
record date for such meeting (except, for the avoidance of doubt, for the ETF) (i) in favor of any proposal with respect to which
the Fund Board recommends a vote in favor of
-
5 -
such proposal (including
in favor of election of the Fund Board’s nominees for election as director and in favor of the Change of Control Approvals)
and (ii) against any proposal with respect to which the Fund Board recommends a vote against such proposal or any proposal made
in opposition to, or in competition or inconsistent with, the recommendation of the Fund Board (including regarding the election
of the Fund’s Board’s nominees or a shareholder proposal submitted to the Fund pursuant to Rule 14a-8 of the Exchange
Act or otherwise). For the avoidance of doubt, if Saba lends any Common Shares to any third
party, Saba shall recall any such stock loan in advance of the record date for any vote of or consent by the shareholders of the
Fund so that Saba shall have full voting rights with respect to all such loaned shares (except for the ETF).
2.3
[Reserved]
2.4
Upon the written request of the Fund, which shall be no more frequently than once each fiscal
year of the Fund, Saba will notify the Fund in writing of the number of Common Shares beneficially owned by it and its Affiliates
and the Saba Entities. Saba shall take all actions practical to prevent its present and future general partners, members, directors,
officers and Affiliates, and any Saba Entity, from engaging in conduct otherwise prohibited by this Agreement.
2.5
Saba represents and warrants as follows:
(a)
It has the power and authority to execute, deliver and carry out the terms and provisions
of this Agreement and to consummate the transactions contemplated hereby.
(b)
This Agreement has been duly and validly authorized, executed and delivered by it and is enforceable
against Saba in accordance with its terms.
(c)
The execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby will not contravene any provision of law applicable to it.
(d)
Saba beneficially owns, directly or indirectly, and has the power to vote all the Common Shares
as described in the recitals to this Agreement (except for shares of the Saba ETF, which shall be subject to Mirror Voting in accordance
with the proxy voting policies presently in place at the ETF), and its ownership of Common Shares has at all times complied with
applicable provisions of the 1940 Act.
(e)
As of the date hereof, neither Saba nor any of its Affiliates is a party to any derivative
securities, including without limitation any swap or hedging transactions or other derivative agreement, or any securities lending
or short sale arrangements, of any nature with respect to the Common Shares.
2.6
The Fund, the Adviser and the Sub-Adviser each represent and warrant as follows:
(a)
It has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement
and to consummate the transactions contemplated hereby.
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(b)
This Agreement has been duly and validly authorized, executed and delivered by it and is enforceable
against it in accordance with its terms.
(c)
The execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby will not contravene any provision of law applicable to it.
2.7
The Adviser covenants and agrees that, following the certification by the Fund’s inspector
of election of the approval of each of the Change of Control Approvals by the vote of a majority of the outstanding voting securities
of the Fund (as defined in the 1940 Act), the Adviser or its affiliate will promptly pay to Saba or its Affiliates, in reimbursement
of its proxy solicitation costs for the proxy contest for the Fund, cash in the amount of $100,000 by wire in accordance with separate
written instructions to be provided by Saba.
Section 3. Public Announcement
3.1
No later than one business day following the date of this Agreement, the Fund shall issue
one press release substantially in the form attached as Exhibit A (the “Fund Press Release”), Saba shall
issue one press release substantially in the form attached as Exhibit B (the “Saba Press Release” and,
together with the Fund Press Release, the “Press Releases”), and no party shall make any public statement inconsistent
with the Press Releases during the Effective Period in connection with the announcement of this Agreement. No party shall issue
additional press releases in connection with this Agreement or the actions contemplated hereby without the prior written consent
of the other party except as provided below. Nothing in this Agreement shall prevent (a) any Party from taking any action required
by any governmental or regulatory authority (except to the extent such requirement arose by discretionary acts by any Party), including
without limitation any statements, filings, notices or announcements made in the context of an issuer tender offer conducted under
Section 13(e)(1) of, or pursuant to Schedule TO under, the Exchange Act, (b) any Party from making any factual statement that is
required in any compelled testimony or production of information, either by legal process, by subpoena or as part of a response
to a request for information from any governmental authority with jurisdiction over such Party or as otherwise legally required
and (c) subject to Section 5.1 of this Agreement, any Party from communicating privately with their respective investors, prospective
investors and governance boards regarding the terms of this Agreement.
3.2
Saba shall promptly prepare and file an amendment to their applicable Schedule 13D filed with
the U.S. Securities and Exchange Commission (“SEC”) for the Fund reporting the entry into this Agreement (which
will not contain any statement inconsistent with the Press Releases and the Item 4 disclosure set forth therein will be in a form
materially consistent with the draft previously provided to the Fund). Saba shall also file a copy of this Agreement or a summary
thereof as an exhibit to the Schedule 13D amendment.
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3.3
Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and agree
that the Fund may not effect a merger, reorganization with another registered investment company for which the Adviser or the Sub-Adviser
or their affiliates (or with any other funds that are managed or advised by a successor adviser or sub-adviser) serves as investment
adviser (whether or not the Fund is the surviving company) nor issue additional shares at any time before the payment of the Tender
Offer proceeds. The Parties acknowledge and agree that the Fund may merge or reorganize with another registered investment company
for which the Adviser or the Sub-Adviser or their affiliates (or with any other funds that are managed or advised by a successor
adviser or sub-adviser) serves as investment adviser (whether or not the Fund is the surviving company) at any time after the payment
of the Tender Offer proceeds. The Fund will ensure that the company surviving any such merger or reorganization with the Fund effects
it in a manner that preserves the benefits of this Agreement.
Section 4. Termination
4.1
Notwithstanding anything herein to the contrary, if the Fund fails to complete the Tender
Offer and distribute the proceeds in cash to the participating shareholders before December 1, 2020 this Agreement shall terminate
and be of no further force or effect.
4.2
Otherwise, this Agreement shall remain in full force and effect until the earlier of:
(a)
the end of the Effective Period;
(b)
such other date as may be established by mutual written agreement of the Fund, the Adviser,
the Sub-Adviser and Saba; and
(c)
upon ten (10) business days’ prior written notice by Saba or one of its Affiliates following
any such material breach of this Agreement by the Fund if such breach has not been cured within such notice period, provided that
Saba is not in material breach of this Agreement at the time such notice is given.
4.3
Section 6 will survive the termination of this Agreement. No termination pursuant to
Section 4.1 relieves any Party from liability for any breach of this Agreement prior to such termination.
Section 5. No Disparagement
5.1 The
Fund, the Adviser, the Sub-Adviser and Saba shall each refrain from making, and shall cause their respective affiliates and its
and their respective principals, directors, members, general partners, officers, agents, advisors, and employees not to make or
cause to be made any statement or announcement, including in any document or report filed with or furnished to the SEC or through
the press, media, analysts or other persons, that constitutes an ad hominem attack on, or otherwise, whether true or false,
disparages,
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defames, slanders, impugns or is reasonably likely
to damage the reputation of, (a) in the case of such statements or announcements by Saba: the Fund or any of its affiliates, subsidiaries
or advisers (including the Adviser and the Sub-Adviser), or any of its or their respective current or former officers, directors
or employees (including, without limitation, any statements or announcements regarding the Fund’s strategy, operations, performance,
products or services), and (b) in the case of statements or announcements by the Fund, the Adviser or the Sub-Adviser: Saba and
its Affiliates, subsidiaries or advisors, or any of its or their respective principals, directors, members, general partners, officers,
or employees or any person who has served in any such capacity with respect to Saba and Saba’s advisors.
Section 6. Miscellaneous
6.1
Specific Performance. Each Party hereto hereby acknowledges and agrees that irreparable
harm will occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the Parties will be entitled to seek specific performance hereunder,
including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof in any state or federal court in the State of New York, in addition
to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond
with respect to any such remedy are hereby waived. All rights and remedies under this Agreement are cumulative, not exclusive,
and will be in addition to all rights and remedies available to any Party at law or in equity.
6.2
Jurisdiction; Venue; Waiver of Jury Trial. The Parties hereto hereby irrevocably and
unconditionally consent to and submit to the jurisdiction of the state or federal courts in the State of New York for any actions,
suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Parties irrevocably
and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement,
or the transactions contemplated hereby, in the state or federal courts in the State of New York, and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum. Each of the Parties waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement.
6.3
Entire Agreement. This Agreement contains the entire understanding of the Parties with
respect to the subject matter hereof and may be amended only by an agreement in writing executed by the Parties hereto. This Agreement
supersedes all previous negotiations, representations and discussions by the Parties hereto concerning the subject matter hereof,
and integrates the whole of all of their agreements and understanding concerning same. No prior oral representations or undertakings
concerning the subject matter hereof will operate to amend, supersede, or replace any of the terms or conditions set forth in this
Agreement, nor will they be relied upon.
6.4
Section Headings. Descriptive headings are for convenience only and will not control
or affect the meaning or construction of any provision of this Agreement.
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6.5
Notice. All notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto will be validly given, made or served, if in writing and sent by email,
with a copy by personal delivery, certified mail, return receipt requested, or by overnight courier service to:
If to the Fund, to:
Western Asset High Income Fund II Inc.
620 Eighth Avenue, 49th Floor
New York, New York 10018
Attention: Robert I. Frenkel Secretary and Chief Legal Officer
Email: RIFrenkel@leggmason.com
with a copy to (which
copy shall not constitute notice):
Simpson Thacher & Bartlett LLP 900 G Street,
N.W.
Washington, D.C. 20001
Attention: David W. Blass and Ryan P. Brizek
Emails: David.Blass@stblaw.com
Ryan.Brizek@stblaw.com
If to the Adviser, to:
Legg Mason Partners Fund Advisor, LLC
620 Eighth Avenue, 49th Floor
New York, New York 10018
Attention: Thomas C. Mandia Secretary
Email: TCMandia@leggmason.com
If to the Sub-Adviser,
to:
Western Asset Management Company, LLC
385 E. Colorado Boulevard
Pasadena, California 91101
Attention: Charles A. Ruys de Perez General Counsel and Secretary
Email: Tony.Ruysdeperez@westernasset.com
If to Saba, to:
Saba Capital Management, L.P.
405 Lexington Avenue, 58th Floor New York, NY 10174
Attention: Michael D’Angelo
Email: Michael. D’Angelo@sabacapital.com
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6.6
Severability. Any provision of this Agreement that is invalid or unenforceable in any jurisdiction
will, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining provisions of this Agreement or affecting the validity or enforceability of any provisions of this
Agreement in any other jurisdiction. In addition, the Parties agree to use their reasonable
commercial efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any such term,
provision, covenant or restriction that is held invalid, void or unenforceable by a court of competent jurisdiction.
6.7
Expenses. Except as set forth in Section 2.7, all attorneys’ fees, costs and expenses
incurred in connection with this Agreement and all matters related hereto will be paid by the party incurring such fees, costs
or expenses.
6.8
Governing Law. This Agreement will be governed by and construed and enforced in accordance
with the laws of the State of New York, without regard to the conflict of law principles thereof.
6.9
Binding Effect; No Assignment. This Agreement will be binding upon and inure to the benefit
of and be enforceable by the successors and assigns of the Parties hereto. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the Parties hereto and those categories of persons specifically enumerated herein,
or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.
No Party to this Agreement may, directly or indirectly, assign its rights or delegate its obligations hereunder (whether voluntarily,
involuntarily, or by operation of law) without the prior written consent of the other Parties. Any such attempted assignment will
be null and void.
6.10
Amendments; Waivers. No provision of this Agreement may be amended other than by an instrument
in writing signed by the Parties hereto, and no provision hereof may be waived other than by an instrument in writing signed by
the Party against whom enforcement is sought.
6.11
Receipt of Adequate Information; No Reliance; Representation by Counsel. Each party acknowledges
that it has received adequate information to enter into this Agreement, that is has not relied on any promise, representation or
warranty, express or implied not contained in this Agreement and that it has been represented by counsel in connection with this
Agreement. Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of
the terms of this Agreement against such party by reason of the foregoing shall have no application and is expressly waived. The
provisions of the Agreement shall be interpreted in a reasonable manner to effect the intent of the parties.
6.12 Counterparts;
Electronic Execution. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. Delivery of an executed signature page of this Agreement by email
or other electronic means shall be effective as delivery of a manually executed counterparty hereof.
[Signature Pages Follow]
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In Witness Whereof, the Parties
hereto have executed this Agreement as of the date first above written.
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Western Asset High Income Fund II Inc.
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Legg Mason Partners Fund Advisor, LLC
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Western Asset Management Company, LLC
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Saba Capital Management, L.P.
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EXHIBIT
A
FUND
PRESS RELEASE
WESTERN
ASSET HIGH
INCOME FUND
II INC.
ANNOUNCES PLAN
FOR TENDER OFFER
NEW YORK – (BUSINESS
WIRE) – June [•], 2020. Western Asset High Income Fund II Inc. (NYSE: HIX) announced today that the Fund’s
Board of Directors has authorized (subject to certain conditions) a cash tender offer for up to 35% of the Fund’s outstanding
shares of common stock (the “Shares”) at a price per Share equal to 99.5% of the Fund’s net asset value per Share
as of the business day immediately following the expiration date of the tender offer. The commencement of the tender offer will
be announced at a later date. The tender offer will not expire prior to November 13, 2020, or such later date as determined by
the Fund’s board of directors. The Fund will repurchase Shares tendered and accepted in the tender offer in exchange for
cash. In the event the tender offer is oversubscribed, Shares will be repurchased on a pro rata basis.
The commencement of the tender
offer is pursuant to an agreement between the Fund and Saba Capital Management, L.P. (“Saba”) and certain associated
parties (the “Settlement Agreement”). During the effective period of the agreement, Saba has agreed to (1) be bound
by the terms of the Settlement Agreement, including certain standstill covenants, and (2) vote its Shares on all proposals submitted
to shareholders in accordance with the recommendation of the Fund’s board of directors. The Fund has been advised that Saba
will file a copy of the Settlement Agreement with the U.S. Securities and Exchange Commission (“SEC”) as an exhibit
to its Schedule 13D.
The Fund has not commenced
the tender offer described in this release. This announcement is not a recommendation, an offer to purchase or a solicitation of
an offer to sell shares of the Fund and the above statements are not intended to constitute an offer to participate in any tender
offer. Information about the tender offer, including its commencement, will be provided by future public announcements. Shareholders
will be notified in accordance with the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company
Act of 1940, as amended, either by publication or mailing or both. The tender offer will be made only by an offer to purchase,
a related letter of transmittal, and other documents to be filed with the SEC. Shareholders of the Fund should read the offer to
purchase and tender offer statement and related exhibits when those documents are filed and become available, as they will contain
important information about the tender offer. These and other filed documents will be available to investors for free both at the
website of the SEC and from the Fund. There can be no assurance that any Share repurchases will reduce or eliminate the discount
of the Fund’s market price per Share to the Fund’s net asset value per Share.
Western Asset High Income Fund
II Inc., a non-diversified, closed-end management investment company, is managed by Legg Mason Partners Fund Advisor, LLC, a wholly-owned
subsidiary of Legg Mason, Inc. and is sub-advised by Western Asset Management Company, an affiliate of the investment manager.
This press release may contain
statements regarding plans and expectations for the future that constitute forward-looking statements within the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on each Fund’s current plans and expectations, and
are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking
statements.
Additional information
concerning such risks and uncertainties are contained in each Fund’s filings with the SEC.
For more information about the
Fund, please call Investor Relations: 1-888-777-0102, or consult each Fund’s web site at www.lmcef.com. The information contained
on each Fund’s web site is not part of this press release. Hard copies of each Fund’s complete audited financial statements
are available free of charge upon request.
Media Contact: Fund Investor Services-1-888-777-0102
EXHIBIT
B
Saba Press Release
SABA CAPITAL REACHES AGREEMENT WITH WESTERN
ASSET HIGH INCOME FUND II INC. TO TENDER 35% OF ITS SHARES
WESTERN
ASSET HIGH INCOME
FUND II INC. TO
COMMENCE TENDER OFFER
NEW YORK, NY – [ _ ]
– SABA CAPITAL MANAGEMENT, L.P. AND CERTAIN ASSOCIATED PARTIES (COLLECTIVELY “SABA”) TODAY ISSUED THE FOLLOWING
STATEMENT REGARDING AN AGREEMENT WITH WESTERN ASSET HIGH INCOME FUND II INC. (TICKER: HIX) (THE “FUND”).
“WE ARE PLEASED
TO HAVE REACHED THIS AGREEMENT WITH THE BOARD, WHICH IS THE RESULT OF ONGOING CONSTRUCTIVE ENGAGEMENT. WE BELIEVE THE AGREEMENT
WILL BENEFIT ALL SHAREHOLDERS BY PROVIDING THEM THE OPPORTUNITY TO TENDER THEIR SHARES AT A PRICE CLOSE TO THE FUND’S NET
ASSET VALUE.”
UNDER
THE TERMS OF THE AGREEMENT WESTERN ASSET HIGH INCOME FUND II INC., THE FUND WILL COMMENCE A CASH TENDER OFFER FOR UP TO 35% OF
THE FUND’S OUTSTANDING SHARES OF COMMON STOCK AT A PRICE PER SHARE EQUAL TO 99.5% OF THE FUND’S NET ASSET VALUE (“NAV”)
PER SHARE. THE TENDER OFFER WILL NOT EXPIRE PRIOR TO NOVEMBER 13, 2020, OR SUCH LATER DATE AS DETERMINED BY THE FUND’S BOARD
OF DIRECTORS. THE FUND WILL REPURCHASE SHARES TENDERED AND ACCEPTED IN THE TENDER OFFER IN EXCHANGE FOR CASH. IN ADDITION, SABA
HAS AGREED TO CERTAIN STANDSTILL COVENANTS.
ABOUT SABA CAPITAL
SABA CAPITAL MANAGEMENT, L.P.
IS AN INVESTMENT ADVISER BASED IN NEW YORK. LAUNCHED IN 2009, SABA CURRENTLY MANAGES ASSETS ACROSS THREE CORE STRATEGIES: CREDIT
RELATIVE VALUE, TAIL HEDGE, AND CLOSED-END FUNDS.
MEDIA
GASTHALTER & CO.
JONATHAN GASTHALTER/AMANDA KLEIN
212-257-4170