REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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[
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]
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Pre-Effective Amendment No.
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1
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[
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X
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]
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Post-Effective Amendment No.
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[ |
]
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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[
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]
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Amendment No.
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1
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[
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X
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]
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John Hedrick, President and Principal Executive Officer
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Series Portfolios Trust
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615 East Michigan Street
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Milwaukee, WI 53202
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Goodwin Procter LLP
901 New York Avenue, NW
Washington, DC 20001
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Class
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A
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(not available for purchase)
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Class
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C
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(not available for purchase)
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Class
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I
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WEISX
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Class
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K
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WEIKX
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1
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10
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11
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22
|
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22
|
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24
|
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24
|
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30
|
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32
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36
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36
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36
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38
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86
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Shareholder Fees
(fees paid directly from your investment)
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Class A
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Class C
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Class I
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Class K
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Maximum Sales Charge (Load) Imposed on Purchases (
as
a percentage of offering price
)
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5.50%
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None
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None
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None
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Maximum Deferred Sales Charge (Load) (
as a percentage
of the lesser of original purchase price or redemption
proceeds)
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1.00%
(1)
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1.00%
(2)
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None
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None
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Redemption Fee
(as a percentage of amount redeemed
within 90 days of purchase)
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1.00%
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1.00%
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1.00%
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1.00%
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the
value of your investment)
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Class A
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Class C
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Class I
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Class K
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Management Fees
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1.60%
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1.60%
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1.60%
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1.60%
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Distribution (12b-1) Fees
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0.25%
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0.75%
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None
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None
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Other Expenses
(3)
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||||
Dividends and Interest on Short Positions
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1.00%
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1.00%
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1.00%
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1.00%
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Shareholder Servicing Fees
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0.10%
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0.25%
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0.10%
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None
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All other expenses
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0.60%
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0.60%
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0.60%
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0.60%
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Total Other Expenses
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1.70%
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1.85%
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1.70%
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1.60%
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Acquired Fund Fees and Expenses
(3), (4)
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0.08%
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0.08%
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0.08%
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0.08%
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Total Annual Fund Operating Expenses
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3.63%
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4.28%
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3.38%
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3.28%
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Less Fee Waiver and/or Expense Reimbursement
(5)
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(0.05)%
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(0.05)%
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(0.05)%
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(0.05)%
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Net Operating Expenses After Fee Waiver and/or Expense
Reimbursement
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3.58%
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4.23%
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3.33%
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3.23%
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(1) A 1.00% contingent deferred sales charge (“CDSC”) is generally imposed on Class A purchases of $1 million or more that are redeemed within 18 months after purchase.
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(2) A 1.00% CDSC will be imposed on Class C shares redeemed within 12 months of purchase.
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(3) Other Expenses and Acquired Fund Fees and Expenses are estimated for the current fiscal year.
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(4)
Acquired Fund Fees and Expenses for the Fund’s current fiscal year are the indirect costs of investing in other investment companies. The total annual fund operating expenses in this fee table will not correlate to the expense ratio in the Fund’s financial highlights (when available) which only reflect the direct operating expenses incurred by the Fund.
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(5)
Weiss Multi-Strategy Advisers LLC (the “Adviser”) has agreed to limit the amount of the Fund’s total annual fund operating expenses, exclusive of any taxes, acquired fund fees and expenses, interest on borrowing, short selling expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization, indirect expenses, swap fees and expenses, or other extraordinary expenses not incurred in the ordinary course of the Fund's business to 2.50%, 3.15%, 2.25%, and 2.15% of the average daily net assets of the Fund’s Class A, Class C, Class I, and Class K shares, respectively. To the extent that the Adviser waives its management fee and/or reimburses the Fund for other ordinary operating expenses, it may seek the recoupment of a portion or all of such amounts at any time within three fiscal years after the fiscal year in which such amounts were waived or reimbursed, subject to the expense limitation in place at the time such amounts were waived or reimbursed. The expense limitation and/or fee waiver agreement is in effect through February 28, 2017, and may be terminated only with the approval of the Board of Trustees.
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Portfolio Managers
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Position with the Adviser
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Length of Service to the Fund
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||
Jordi Visser
Charles S. Crow IV
Edward Olanow
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President and Chief Investment Officer
Quantitative Analyst
Vice President
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Since inception in 2015
Since inception in 2015
Since inception in 2015
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Minimum Initial
Investment
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Minimum
Subsequent
Investment
|
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Class A
(not available for purchase)
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$5,000
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$1,000
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Class C
(not available for purchase)
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$5,000
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$1,000
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Class I
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$250,000
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$1,000
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Class K
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$2,000,000
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$1,000
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Minimum Initial
Investment
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Minimum
Subsequent
Investment
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Class A
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$5,000
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$1,000
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Class C
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$5,000
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$1,000
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Class I
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$250,000
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$1,000
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Class K
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$2,000,000
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$1,000
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Investment Amount
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Front-end Sales Charge
as a % of
Offering Price
(1)
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Sales Charge as a % of
Net Amount Invested
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Dealer Reallowance as a
% of Offering Price
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Less than $50,000
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5.50%
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5.82%
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5.50%
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$50,000 to $99,999
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4.75%
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4.99%
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4.75%
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$100,000 to $249,999
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3.75%
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3.90%
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3.75%
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$250,000 to $499,999
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3.00%
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3.09%
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3.00%
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$500,000 to $1,000,000
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2.00%
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2.04%
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2.00%
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$1,000,000 or more
(2)
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0.00%
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0.00%
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0.00%
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(1)
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The offering price includes the front-end sales charge. The sales charge you pay may differ slightly from the amount set forth above because of rounding that occurs in the calculation used to determine your sales charge.
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(2)
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Class A shares that are purchased at NAV in amounts of $1,000,000 or more may be assessed a 1.00% CDSC, if they are redeemed within 18 months from the date of purchase. For purposes of calculating the CDSC, the start of the 18-month holding period is the first day of the month in which the purchase was made. The CDSC may be waived in certain circumstances.
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·
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Current and retired employees, directors/trustees and officers of:
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o
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The Trust;
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o
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The Adviser and its affiliates; and
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o
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Family members (spouse, domestic partner, parents, grandparents, children, grandchildren and siblings (including step and in-law)) of any of the above.
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·
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Any trust, pension, profit sharing or other benefit plan for current employees, directors/trustees and officers of the Adviser and its affiliates.
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·
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Current employees of:
|
o
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The Transfer Agent;
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o
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Broker-dealers who act as selling agents for the Fund/Trust; and
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o
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Family members (spouse, domestic partner, parents, grandparents, children, grandchildren and siblings (including step and in-law)) of any of the above.
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·
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Qualified registered investment advisers who buy through a broker-dealer or service agent who has entered into an agreement with the Distributor that allows for load-waived Class A shares purchases.
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For regular mail delivery:
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For an overnight delivery:
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Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
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Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202-5207
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·
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in the event of the total disability (as evidenced by a determination by the Social Security Administration) of the shareholder (including a registered joint owner) occurring after the purchase of the shares being redeemed;
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·
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in the event
of the death of the shareholder (including a registered joint owner);
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·
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for redemptions made pursuant to a systematic withdrawal plan, including any IRA systematic withdrawal based on the shareholder’s life expectancy including, but not limited to, substantially equal periodic payments described in Code Section 72(t)(2)(iv) prior to age 59 1/2; and
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·
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in the event of the total disability (as evidenced by a determination by the Social Security Administration) of the shareholder (including a registered joint owner) occurring after the purchase of the shares being redeemed;
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·
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in the event
of the death of the shareholder (including a registered joint owner);
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·
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for redemptions made pursuant to a systematic withdrawal plan, including any IRA systematic withdrawal based on the shareholder’s life expectancy including, but not limited to, substantially equal periodic payments described in Code Section 72(t)(2)(iv) prior to age 59 1/2; and
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·
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for redemptions to satisfy required minimum distributions after age 70 1/2 from an IRA account (with the maximum amount subject to this waiver being based only upon the shareholder’s Fund’s IRA accounts).
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·
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Institutional investors including banks, savings institutions, credit unions and other financial institutions, pension, profit sharing and employee benefit plans and trusts, insurance companies, investment companies, investment advisers, broker-dealers and financial advisers acting for their own accounts or for the accounts of their clients; and
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·
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Full-time employees, agents, employees of agents, retirees and directors (trustees), and members of their families (
i.e.
, parent, child, spouse, domestic partner, sibling, set or adopted relationships, grandparent, grandchild and UTMA accounts naming qualifying persons) of the Adviser and its affiliated companies.
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§
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the
name
of the Fund
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§
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the
dollar amount
of shares to be purchased
|
§
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account
application
form or investment
stub
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§
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check payable to
The Weiss Alternative Balanced Risk Fund
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·
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Complete and sign the account application;
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·
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To open an account, write a check payable to: “Weiss Alternative Balanced Risk Fund”
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·
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Send your account application and check to one of the addresses listed below;
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·
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For subsequent investments, detach the stub that is attached to the account statement you will receive after each transaction and mail it with a check made payable to the Fund in the envelope provided with your statement or to one of the addresses noted below. Write your account number on the check. If you do not have the stub from your account statement, include your name, address and account number on a separate piece of paper.
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For regular mail delivery:
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For an overnight delivery:
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Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
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Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202-5207
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Instruct your bank to send the wire to:
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U.S. Bank N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA #075000022
Credit: U.S. Bancorp Fund Services, LLC
Account #112-952-137
Further Credit: The Weiss Alternative Balanced Risk Fund
(Shareholder Name, Shareholder Account #)
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·
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Provide your name and account number;
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·
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Specify the number of shares or dollar amount to be redeemed and the Fund name or number;
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·
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Sign the redemption request (the signature must be exactly the same as the one on your account application). Make sure that all parties that are required by the account registration sign the request, and any applicable signature guarantees are on the request; and
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·
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Send your request to the appropriate address as given under “Purchasing by Mail”.
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·
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For all redemption requests in excess of $50,000;
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·
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If a change of address request has been received by the transfer agent within the last 30 calendar days;
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·
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When requesting a change in ownership on your account; and
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·
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When redemption proceeds are payable or sent to any person, address or bank account not on record.
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POLICY | WHAT DO THE WEISS ENTITIES DO WITH YOUR PERSONAL DATA? | ||
WHO IS PROVIDING THIS NOTICE?
|
This notice is provided by Weiss Multi-Strategy Advisers LLC (“WMSA”), GWA, LLC (its parent), Weiss Special Operations LLC (WMSA’s back office), Weiss Multi-Strategy Funds LLC, its affiliated broker-dealer and the private investment funds and mutual funds managed by WMSA including but not limited to Weiss Multi-Strategy Partners LLC, Weiss Multi- Strategy Partners (Cayman) Ltd., Weiss Multi-Strategy Partners II LLC, Weiss Multi-Strategy Partners II (Cayman) Ltd., Weiss Insurance Partners (Cayman) Ltd., Weiss Alpha Balanced Risk Fund LLC and Weiss Alpha Balanced Risk Fund (Cayman) Ltd., and Weiss Alternative Balanced Risk Fund (Collectively, for purposes of this Privacy Policy, “The Weiss Entities”)
.
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||
WHY?
|
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
|
||
WHAT?
|
The type of personal information the Weiss Entities may collect and share depends on the products or services you have with us. This information can include:
Name, address and any other information disclosed to us in a Subscription Agreement
§
Social security number
§
Account balances & transaction history
§
Investment experience
§
Wire transfer instructions
When you are no longer our customer, we continue to share your information as described in this notice.
|
||
HOW?
|
All financial companies need to share customers’ personal information in the normal course to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Weiss Entities share information; and whether you can limit this sharing.
|
||
Reasons we can share your personal information
|
Do the Weiss Entities share
information for this
purpose?
|
Can you limit this sharing?
|
|
F
o
r
o
ur
e
v
er
y
day
b
us
in
e
s
s
p
urpo
s
es
- such as to process your transactions, maintain your account(s), administer, and operate the fund of which you are a limited partner or shareholder, or respond to court orders and legal investigations. This includes providing this information to third-party service providers contracted by the Weiss Entities.
|
Yes
|
No
|
|
F
o
r
o
ur
m
a
r
k
e
t
ing
p
u
rp
o
s
es
- to offer our products and services to you
|
Yes
|
No
|
|
F
o
r
o
ur
a
ffiliates
- so that they can market the products and services of Weiss Multi-Strategy Advisers LLC
|
Yes
|
No
|
|
F
o
r
o
ur
a
ffiliates'
e
v
er
y
day
b
u
s
ine
s
s
p
urpo
s
es
- information about your transactions and account balances
|
Yes
|
No
|
|
F
o
r
o
ur
a
f
filiates'
to market their products and services to you
|
No
|
We don’t share information for
these purposes
|
|
F
o
r
o
ur
a
f
filiates'
e
v
er
y
day
b
us
i
ne
s
s
p
u
rp
o
s
e
s
- information about your creditworthiness
|
No
|
We don’t share information for
these purposes
|
|
For joint marketing with non-affiliated financial companies
|
No
|
We don’t share information for
these purposes
|
|
For non-affiliates to market to you
|
No
|
We don’t share information
for these purposes
|
Questions?
|
Call Weiss’ Investor Relations Department at (212) 415-4500
|
Class
|
A
|
(not available for purchase)
|
Class
|
C
|
(not available for purchase)
|
Class
|
I
|
WEISX
|
Class
|
K
|
WEIKX
|
2
|
|
2
|
|
24
|
|
26
|
|
26
|
|
28
|
|
33
|
|
33
|
|
33
|
|
36
|
|
37
|
|
38
|
|
38
|
|
39
|
|
41
|
|
44
|
|
45
|
|
46
|
|
47
|
1.
|
Lend money or other assets except to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority. For purposes of this fundamental investment restriction, the entry into repurchase agreements, lending securities and acquiring of debt securities shall not constitute loans by the Fund.
|
2.
|
Borrow money, except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority.
|
3.
|
Issue senior securities except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority.
|
4.
|
Concentrate its investments in a particular industry, as concentration is defined under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time, except that the Fund may invest without limitation in: (i) securities issued or guaranteed by the U.S. government, its agencies or instrumentalities; (ii) tax-exempt obligations of state or municipal governments and their political subdivisions; (iii) securities of other investment companies; and (iv) repurchase agreements.
|
5.
|
Purchase or sell real estate, except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority.
|
6.
|
Buy or sell commodities or commodity (futures) contracts, except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority.
|
7.
|
Purchase the securities of any issuer if, as a result, the Fund would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as each may be amended from time to time, except to the extent that the Fund may be permitted to do so by the 1940 Act, and the rules and regulations promulgated thereunder, as each may be amended from time to time, exemptive order, SEC release, no-action letter or similar relief or interpretations.
|
8.
|
Engage in the business of underwriting the securities of other issuers except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority, and except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act in connection with the purchase and sale of portfolio securities.
|
Name and Year of
Birth
|
Positions
with
the Trust
|
Term of Office
and Length of
Time Served
|
Principal Occupations
During Past Five Years
|
Number of
Portfolios
in Fund Complex
(2)
Overseen
by
Trustees
|
Other
Directorships
Held During
Past Five
Years
|
|
Independent Trustees of the Trust
(1)
|
||||||
Koji Felton
(born 1961)
|
Trustee
|
Indefinite Term;
Since September 2015.
|
Counsel, Kohlberg Kravis Roberts & Co. L.P. (2013-2015); Counsel, Dechert LLP (2011-2013); Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. (1998-2011).
|
1
|
None.
|
|
Debra McGinty-Poteet
(born 1956)
|
Trustee
|
Indefinite Term;
Since September 2015.
|
Retired.
|
1
|
Independent Trustee, First Western Funds Trust (May 2015– Present)
Inside Trustee, Brandes Investment Trust, Chair and President (2000-2012); Director, Inside Trustee, Brandes Funds LTD (2002-2012).
|
|
Daniel B. Willey
(born 1955)
|
Trustee
|
Indefinite Term;
Since September 2015.
|
Compliance Officer, United Nations Joint Staff Pension Fund (since 2009)
|
1
|
None
|
Name and Year of
Birth
|
Positions
with
the Trust
|
Term of Office
and Length of
Time Served
|
Principal Occupations
During Past Five Years
|
Number of
Portfolios
in Fund Complex
(2)
Overseen
by
Trustees
|
Other
Directorships
Held During
Past Five
Years
|
Interested Trustee
|
||||||
Dana L. Armour
(born 1968)
|
Chair,
Trustee
|
Indefinite Term;
Since September 2015.
|
Executive Vice President, U.S. Bancorp Fund Services, LLC, since 2013; Senior Vice President (2010 - 2013 ).
|
1
|
None
|
|
Officers of the Trust
|
||||||
John J. Hedrick
(born 1977)
|
President and
Chief
Executive
Officer
|
Indefinite Term; Since
September 2015
|
Vice President, U.S. Bancorp Fund Services, LLC, since 2011; Assistant Vice President (2007 – 2011).
|
Not
Applicable.
|
Not
Applicable.
|
|
Jacob L. Ferch
(born 1984)
|
Treasurer
and Chief
Financial
Officer
|
Indefinite Term;
Since September 2015 .
|
Assistant Vice President, U.S. Bancorp Fund Services, LLC, since 2013; Compliance officer, 2010-2013.
|
Not
Applicable.
|
Not
Applicable.
|
|
Michael R. McVoy
(born 1957)
|
Chief
Compliance
Officer and
Anti-Money
Laundering
Officer
|
Indefinite Term;
Since September 2015.
|
Executive Vice President, U.S. Bancorp Fund Services, LLC, since 2005.
|
Not
Applicable.
|
Not
Applicable.
|
|
Alia M. Vasquez
(born 1980)
|
Secretary
|
Indefinite Term; Since
September, 2015
|
Vice President, U.S. Bancorp Fund Services, LLC, since 2015, Assistant Vice President 2010-2015.
|
Not
Applicable.
|
Not
Applicable.
|
(1)
|
The Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
|
(2)
|
The term “Fund Complex” applies to the Fund, the sole, initial series of the Trust.
|
Name of Person/ Position
|
Aggregate
Compensation From the
Fund
(1)
|
Pension or
Retirement
Benefits Accrued
as Part of Fund
Expenses
|
Estimated Annual
Benefits Upon
Retirement
|
Total Compensation
from Fund and Fund
Complex
(2)
Paid to
Trustees
|
Dana Armour,
Interested Trustee
|
None
|
None
|
None
|
None
|
Koji Felton,
Independent Trustee
|
$19,000
|
None
|
None
|
$19,000
|
Debra McGinty Poteet,
Independent Trustee
|
$19,000
|
None
|
None
|
$19,000
|
Daniel Willey,
Independent Trustee
|
$19,000
|
None
|
None
|
$19,000
|
(1)
|
Trustees’ fees and expenses will be allocated among the Fund and any other future series comprising the Trust.
|
(2)
|
The
term “Fund Complex” applies to the Fund, the sole, initial series of the Trust.
|
Category of Account
|
Total Number of Accounts Managed
|
Total Assets in Accounts Managed
(in millions)
|
Number of Accounts for which Advisory Fee is Based on Performance
|
Assets in Accounts for which Advisory Fee is Based on Performance
|
Other Registered Investment Companies
|
None
|
$0
|
None
|
$0
|
Other Pooled Investment Vehicles
|
1
|
$24.0
|
None
|
$0
|
Other Accounts
|
1
|
$111.1
|
None
|
$0
|
Appendix B |
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
COVERAGE |
8
|
|
1. |
ROUTINE/MISCELLANEOUS
|
9
|
Adjourn Meeting
|
9
|
|
Amend Quorum Requirements
|
9
|
|
Amend Minor Bylaws
|
9
|
|
Change Company Name
|
9
|
|
Change Date, Time, or Location of Annual Meeting
|
9
|
|
Other Business
|
9
|
|
AUDIT-RELATED
|
9
|
|
Auditor Indemnification and Limitation of Liability
|
9
|
|
Auditor Ratification
|
10
|
|
Shareholder Proposals Limiting Non-Audit Services
|
10
|
|
Shareholder Proposals on Audit Firm Rotation
|
10
|
|
2. |
BOARD OF DIRECTORS
|
11
|
VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS
|
11
|
|
1. Accountability
|
11
|
|
2. Responsiveness
|
14
|
|
3. Composition
|
15
|
|
4. Independence
|
15
|
|
2015 ISS U.S. Categorization of Directors
|
16
|
|
OTHER BOARD-RELATED PROPOSALS
|
18
|
|
Age/Term Limits
|
18
|
|
Board Size
|
18
|
|
Classification/Declassification of the Board
|
18
|
|
CEO Succession Planning
|
18
|
|
Cumulative Voting
|
18
|
|
Director and Officer Indemnification and Liability Protection
|
19
|
|
Establish/Amend Nominee Qualifications
|
19
|
|
Establish Other Board Committee Proposals
|
20
|
|
Filling Vacancies/Removal of Directors
|
20
|
|
Independent Chair (Separate Chair/CEO)
|
20
|
|
Majority of Independent Directors/Establishment of Independent Committees
|
21
|
|
Majority Vote Standard for the Election of Directors
|
21
|
|
Proxy Access
|
21
|
|
Require More Nominees than Open Seats
|
21
|
|
Shareholder Engagement Policy (Shareholder Advisory Committee)
|
22
|
|
Proxy Contests—Voting for Director Nominees in Contested Elections
|
22
|
|
Vote-No Campaigns
|
22
|
|
3. |
SHAREHOLDER RIGHTS & DEFENSES
|
23
|
Advance Notice Requirements for Shareholder Proposals/Nominations
|
23
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 2 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
Amend Bylaws without Shareholder Consent
|
23
|
|
Control Share Acquisition Provisions
|
23
|
|
Control Share Cash-Out Provisions
|
23
|
|
Disgorgement Provisions
|
23
|
|
Fair Price Provisions
|
24
|
|
Freeze-Out Provisions
|
24
|
|
Greenmail
|
24
|
|
Litigation Rights (including Exclusive Venue and Fee-Shifting Bylaw Provisions)
|
24
|
|
Net Operating Loss (NOL) Protective Amendments
|
25
|
|
POISON PILLS (SHAREHOLDER RIGHTS PLANS)
|
25
|
|
Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy
|
25
|
|
Management Proposals to Ratify a Poison Pill
|
25
|
|
Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)
|
26
|
|
Proxy Voting Disclosure, Confidentiality, and Tabulation
|
26
|
|
Reimbursing Proxy Solicitation Expenses
|
26
|
|
Reincorporation Proposals
|
27
|
|
Shareholder Ability to Act by Written Consent
|
27
|
|
Shareholder Ability to Call Special Meetings
|
27
|
|
Stakeholder Provisions
|
28
|
|
State Antitakeover Statutes
|
28
|
|
Supermajority Vote Requirements
|
28
|
|
4 . |
CAPITAL/RESTRUCTURING
|
29
|
CAPITAL
|
29
|
|
Adjustments to Par Value of Common Stock
|
29
|
|
Common Stock Authorization
|
29
|
|
Dual Class Structure
|
29
|
|
Issue Stock for Use with Rights Plan
|
30
|
|
Preemptive Rights
|
30
|
|
Preferred Stock Authorization
|
30
|
|
Recapitalization Plans
|
30
|
|
Reverse Stock Splits
|
30
|
|
Share Repurchase Programs
|
31
|
|
Stock Distributions: Splits and Dividends
|
31
|
|
Tracking Stock
|
31
|
|
RESTRUCTURING
|
31
|
|
Appraisal Rights
|
31
|
|
Asset Purchases
|
31
|
|
Asset Sales
|
32
|
|
Bundled Proposals
|
32
|
|
Conversion of Securities
|
32
|
|
Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans
|
32
|
|
Formation of Holding Company
|
32
|
|
Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)
|
33
|
|
Joint Ventures
|
33
|
|
Liquidations
|
33
|
|
Mergers and Acquisitions
|
34
|
|
Private Placements/Warrants/Convertible Debentures
|
34
|
|
Reorganization/Restructuring Plan (Bankruptcy)
|
35
|
|
Special Purpose Acquisition Corporations (SPACs)
|
36
|
|
Spin-offs
|
36
|
|
Value Maximization Shareholder Proposals
|
36
|
|
5. |
COMPENSATION
|
37
|
EXECUTIVE PAY EVALUATION
|
37
|
|
Advisory Votes on Executive Compensation—Management Proposals (Management Say-on-Pay)
|
37
|
|
Pay-for-Performance Evaluation
|
38
|
|
Problematic Pay Practices
|
39
|
|
Compensation Committee Communications and Responsiveness
|
40
|
|
Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")
|
40
|
|
Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale
|
40
|
|
EQUITY-BASED AND OTHER INCENTIVE PLANS
|
41
|
|
Plan Cost
|
42
|
|
Shareholder Value Transfer (SVT)
|
42
|
|
Grant Practices
|
42
|
|
Three-Year Burn Rate
|
42
|
|
2015 Burn Rate Benchmarks
|
43
|
|
Egregious Factors
|
44
|
|
Liberal Change in Control Definition
|
44
|
|
Repricing Provisions
|
45
|
|
Problematic Pay Practices or Significant Pay-for-Performance Disconnect
|
45
|
|
Specific Treatment of Certain Award Types in Equity Plan Evaluations
|
45
|
|
Dividend Equivalent Rights
|
45
|
|
Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)
|
45
|
|
OTHER COMPENSATION PLANS
|
46
|
|
401(k) Employee Benefit Plans
|
46
|
|
Employee Stock Ownership Plans (ESOPs)
|
46
|
|
Employee Stock Purchase Plans—Qualified Plans
|
46
|
|
Employee Stock Purchase Plans—Non-Qualified Plans
|
46
|
|
Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation Proposals)
|
47
|
|
Option Exchange Programs/Repricing Options
|
47
|
|
Stock Plans in Lieu of Cash
|
48
|
|
Transfer Stock Option (TSO) Programs
|
48
|
|
DIRECTOR COMPENSATION
|
49
|
|
Equity Plans for Non-Employee Directors
|
49
|
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 4 of 69 |
Non-Employee Director Retirement Plans
|
49
|
|
SHAREHOLDER PROPOSALS ON COMPENSATION
|
49
|
|
Adopt Anti-Hedging/Pledging/Speculative Investments Policy
|
49
|
|
Bonus Banking/Bonus Banking “Plus”
|
49
|
|
Compensation Consultants—Disclosure of Board or Company’s Utilization
|
50
|
|
Disclosure/Setting Levels or Types of Compensation for Executives and Directors
|
50
|
|
Golden Coffins/Executive Death Benefits
|
50
|
|
Hold Equity Past Retirement or for a Significant Period of Time
|
50
|
|
Non-Deductible Compensation
|
51
|
|
Pay Disparity
|
51
|
|
Pay for Performance/Performance-Based Awards
|
52
|
|
Pay for Superior Performance
|
52
|
|
Pre-Arranged Trading Plans (10b5-1 Plans)
|
52
|
|
Prohibit CEOs from Serving on Compensation Committees
|
53
|
|
Recoupment of Incentive or Stock Compensation in Specified Circumstances
|
53
|
|
Severance Agreements for Executives/Golden Parachutes
|
53
|
|
Share Buyback Holding Periods
|
54
|
|
Supplemental Executive Retirement Plans (SERPs)
|
54
|
|
Tax Gross-Up Proposals
|
54
|
|
Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity54
|
||
6 . |
SOCIAL/ENVIRONMENTAL ISSUES
|
55
|
GLOBAL APPROACH
|
55
|
|
ANIMAL WELFARE
|
55
|
|
Animal Welfare Policies
|
55
|
|
Animal Testing
|
55
|
|
Animal Slaughter
|
55
|
|
CONSUMER ISSUES
|
56
|
|
Genetically Modified Ingredients
|
56
|
|
Reports on Potentially Controversial Business/Financial Practices
|
56
|
|
Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation
|
56
|
|
Product Safety and Toxic/Hazardous Materials
|
57
|
|
Tobacco-Related Proposals
|
57
|
|
CLIMATE CHANGE
|
58
|
|
Climate Change/Greenhouse Gas (GHG) Emissions
|
58
|
|
Energy Efficiency
|
58
|
|
Renewable Energy
|
58
|
|
DIVERSITY
|
59
|
|
Board Diversity
|
59
|
|
Equality of Opportunity
|
59
|
|
Gender Identity, Sexual Orientation, and Domestic Partner Benefits
|
59
|
|
ENVIRONMENT AND SUSTAINABILITY
|
60
|
|
Facility and Workplace Safety
|
60
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 5 of 69 |
General Environmental Proposals and Community Impact Assessments
|
60
|
|
Hydraulic Fracturing
|
60
|
|
Operations in Protected Areas
|
60
|
|
Recycling
|
61
|
|
Sustainability Reporting
|
61
|
|
Water Issues
|
61
|
|
GENERAL CORPORATE ISSUES
|
61
|
|
Charitable Contributions
|
61
|
|
Data Security, Privacy, and Internet Issues
|
61
|
|
Environmental, Social, and Governance (ESG) Compensation-Related Proposals
|
62
|
|
HUMAN RIGHTS, LABOR ISSUES, AND INTERNATIONAL OPERATIONS
|
62
|
|
Human Rights Proposals
|
62
|
|
Operations in High Risk Markets
|
63
|
|
Outsourcing/Offshoring
|
63
|
|
Weapons and Military Sales
|
63
|
|
POLITICAL ACTIVITIES
|
63
|
|
Lobbying
|
63
|
|
Political Contributions
|
64
|
|
Political Ties
|
64
|
|
7. |
MUTUAL FUND PROXIES
|
65
|
Election of Directors
|
65
|
|
Converting Closed-end Fund to Open-end Fund
|
65
|
|
Proxy Contests
|
65
|
|
Investment Advisory Agreements
|
65
|
|
Approving New Classes or Series of Shares
|
65
|
|
Preferred Stock Proposals
|
65
|
|
1940 Act Policies
|
66
|
|
Changing a Fundamental Restriction to a Nonfundamental Restriction
|
66
|
|
Change Fundamental Investment Objective to Nonfundamental
|
66
|
|
Name Change Proposals
|
66
|
|
Change in Fund's Subclassification
|
66
|
|
Business Development Companies—Authorization to Sell Shares of Common Stock at a Price below Net Asset Value
|
66
|
|
Disposition of Assets/Termination/Liquidation
|
67
|
|
Changes to the Charter Document
|
67
|
|
Changing the Domicile of a Fund
|
67
|
|
Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval
|
67
|
|
Distribution Agreements
|
68
|
|
Master-Feeder Structure
|
68
|
|
Mergers
|
68
|
|
SHAREHOLDER PROPOSALS FOR MUTUAL FUNDS
|
68
|
|
Establish Director Ownership Requirement
|
68
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 6 of 69 |
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 7 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
U.S.
Domestic
Issuers
--
which
have
a
majority
of
shareholders
in
the
U.S.
and
meet
other
criteria,
as
determined
by
the
SEC,
and
are
subject
to
the
same
disclosure
and
listing
standards
as
U.S.
incorporated
companies
–
are
generally
covered
under
standard
U.S.
policy
guidelines.
|
|
›
|
Foreign
Private
Issuers
(FPIs)
–
which
do
not
meet
the
Domestic
Issuer
criteria
and
are
exempt
from
most
disclosure
requirements
(e.g.,
they
do
not
file
10-K
or
DEF14A
reports)
and
listing
standards
(e.g.,
for
required
levels
of
board
and
committee
independence)
–
are
covered
under
a
combination
of
policy
guidelines:
|
|
›
|
FPI
Guidelines,
which
apply
certain
minimum
independence
and
disclosure
standards
in
the
evaluation
of
key
proxy
ballot
items,
such
as
the
election
of
directors
and
approval
of
financial
reports,
and
|
›
|
For
other
issues,
guidelines
for
the
market
that
is
responsible
for,
or
most
relevant
to,
the
item
on
the
ballot.
|
|
General Recommendation : Vote against (or withhold from) non-independent director nominees at companies which fail to meet the following criteria: a majority independent board; audit, compensation, and nominating committees, each composed entirely of independent directors. |
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 8 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
1
|
1. ROUTINE/MISCELLANEOUS
|
Adjourn Meeting
|
|
|
General Recommendation
:
Generally vote against proposals to provide management with the authority to adjourn an annual or special meeting absent compelling reasons to support the proposal.
|
Vote for proposals that relate specifically to soliciting votes for a merger or transaction if supporting that merger or transaction. Vote against proposals if the wording is too vague or if the proposal includes "other business."
|
|
Amend Quorum Requirements
|
|
|
General Recommendation
:
Vote against proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal.
|
Amend Minor Bylaws
|
|
|
General Recommendation
:
Vote for bylaw or charter changes that are of a housekeeping nature (updates or corrections).
|
Change Company Name
|
|
|
General Recommendation
:
Vote for proposals to change the corporate name unless there is compelling evidence that the change would adversely impact shareholder value.
|
Change Date, Time, or Location of Annual Meeting
|
|
|
General Recommendation
:
Vote for management proposals to change the date, time, or location of the annual meeting unless the proposed change is unreasonable.
|
Vote against shareholder proposals to change the date, time, or location of the annual meeting unless the current scheduling or location is unreasonable.
|
|
Other Business
|
|
|
General Recommendation
:
Vote against proposals to approve other business when it appears as voting item.
|
Audit-Related
|
|
Auditor Indemnification and Limitation of Liability
|
|
|
General Recommendation
:
Vote case-by-case on the issue of auditor indemnification and limitation of liability. Factors to be assessed include, but are not limited to:
|
›
The
terms
of
the
auditor
agreement--the
degree
to
which
these
agreements
impact
shareholders'
rights;
›
The
motivation
and
rationale
for
establishing
the
agreements;
›
The
quality
of
the
company’s
disclosure;
and
›
The
company’s
historical
practices
in
the
audit
area.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 9 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General Recommendation : Vote for proposals to ratify auditors unless any of the following apply: |
|
›
|
There
is
reason
to
believe
that
the
independent
auditor
has
rendered
an
opinion
that
is
neither
accurate
nor
indicative
of
the
company’s
financial
position;
|
|
›
|
Poor
accounting
practices
are
identified
that
rise
to
a
serious
level
of
concern,
such
as:
fraud;
misapplication
of
GAAP;
and
material
weaknesses
identified
in
Section
404
disclosures;
or
|
|
General Recommendation : Vote case-by-case on shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services. |
|
General Recommendation : Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into account: |
|
›
|
Whether
the
company
has
a
periodic
renewal
process
where
the
auditor
is
evaluated
for
both
audit
quality
and
competitive
price.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 10 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
2.
|
BOARD OF DIRECTORS:
|
1. |
Accountability
:
Boards
should
be
sufficiently
accountable to shareholders, including through transparency of the company's governance practices and regular board elections, by the
provision of sufficient information for shareholders to be able to assess directors and board
composition, and through the ability of shareholders to remove directors.
|
2. |
Responsiveness
:
Directors
should
respond
to
investor
input,
such
as
that
expressed
through
significant
opposition
to
management
proposals,
significant
support
for
shareholder
proposals
(whether
binding
or
non-binding),
and
tender
offers
where
a
majority
of
shares
are
tendered.
|
3. |
Composition
:
Companies
should
ensure
that
directors
add
value
to
the
board
through
their
specific
skills
and
expertise and by having sufficient time and commitment to serve effectively. Boards should be of a size
appropriate to accommodate diversity, expertise, and independence, while ensuring active and collaborative
participation by all members.
|
4. |
Independence
:
Boards
should
be
sufficiently
independent
from
management
(and
significant
shareholders)
so
as
to
ensure
that
they
are
able
and
motivated
to
effectively
supervise
management's
performance
for
the
benefit of all shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of shareholder capital, and in setting and monitoring executive compensation programs that
strategy. The chair of the board should ideally be an independent director, and all boards should have an independent leadership position or a similar role in order to help provide appropriate
counterbalance to executive management, as well as having sufficiently independent committees that focus on key governance concerns such as audit, compensation, and nomination of directors.
|
|
General Recommendation : Generally vote for director nominees, except under the following circumstances: |
1.
|
Accountability
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 11 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
1.1.
|
The board is classified, and a continuing director responsible for a problematic governance issue at the board/committee level that would warrant a withhold/against vote recommendation is not up for election. All appropriate nominees (except new) may be held accountable.
|
1.2.
|
The
board
lacks
accountability
and
oversight,
coupled
with
sustained
poor
performance
relative
to
peers.
Sustained
poor
performance
is
measured
by
one-
and
three-year
total
shareholder
returns
in
the
bottom
half
of
a company’s four-digit GICS industry group (Russell 3000 companies only). Take into consideration the company’s five-year total shareholder return and operational metrics. Problematic provisions include but are not limited to:
|
|
›
|
Either
a
plurality
vote
standard
in
uncontested
director
elections
or
a
majority
vote
standard
with
no
plurality
carve-out
for
contested
elections;
|
1.3.
|
The company’s poison pill has a “dead
-
hand” or “modified dead
-
hand” feature. Vote against or withhold from nominees every year until this feature is removed;
|
1.4.
|
The board adopts a poison pill with a term of more than 12 months (“long
-
term pill”), or renews any existing pill, including any “short
-
term” pill (12 months or less), without shareholder approval. A commitment or policy that puts a newly adopted pill to a binding shareholder vote may potentially offset an adverse vote recommendation. Review such companies with classified boards every year, and such companies with annually elected boards at least once every three years, and vote against or withhold votes from all nominees if the company still maintains a non-shareholder-approved poison pill; or
|
1.6.
|
The board adopts a poison pill with a term of 12 months or less (“short-term pill”) without shareholder approval, taking into account the following factors:
|
|
›
|
The
date
of
the
pill‘s
adoption
relative
to
the
date
of
the
next
meeting
of
shareholders—i.e.
whether
the
company
had
time
to
put
the
pill
on
the
ballot
for
shareholder
ratification
given
the
circumstances;
|
› | The issuer’s rationale; | ||
› | The issuer’s governance structure and practices; and | ||
› | The issuer’s track record of accountability to shareholders. |
1.7.
|
The
non-audit
fees
paid
to
the
auditor
are
excessive
(see
discussion
under
“
Auditor
Ratification
”);
|
1.8.
|
The company receives an adverse opinion on the company’s financial statements from its auditor; or
|
1.9.
|
There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 12 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
1.10.
|
Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth, chronological sequence, and duration, as well as the company’s efforts at remediation or corrective actions
,
in determining whether withhold/against votes are warranted.
|
1.11.
|
There
is
a
significant
misalignment
between
CEO
pay
and
company
performance
(
pay
for
performance
);
|
1.12.
|
The
company
maintains
significant
problematic
pay
practices
;
|
1.13.
|
The
board
exhibits
a
significant
level
of
poor
communication
and
responsiveness
to
shareholders;
|
1.14.
|
The
company
fails
to
submit
one-time
transfers
of
stock
options
to
a
shareholder
vote;
or
|
1.15.
|
The
company
fails
to
fulfill
the
terms
of
a
burn
rate
commitment
made
to
shareholders.
|
1.16.
|
The company’s previous say-on-pay received the support of less than 70 percent of votes cast, taking into account:
|
|
›
|
Disclosure
of
engagement
efforts
with
major
institutional
investors
regarding
the
issues
that
contributed
to
the
low
level
of
support;
|
|
›
|
Whether
the
support
level
was
less
than 50
percent,
which
would
warrant
the
highest
degree
of
responsiveness.
|
1.17.
|
Generally vote against or withhold from directors individually, committee members, or the entire board (except new nominees, who should be considered case-by-case) if the board amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes shareholders' rights or that could adversely impact shareholders, considering the following factors, as applicable:
|
|
›
|
The
level
of
impairment
of
shareholders'
rights
caused
by
the
board's
unilateral
amendment
to
the
bylaws/charter;
|
|
›
|
The
board's
track
record
with
regard
to
unilateral
board
action
on
bylaw/charter
amendments
or
other
entrenchment
provisions;
|
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|
|
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|
|
›
|
The
timing
of
the
board's
amendment
to
the
bylaws/charter
in
connection
with
a
significant
business
development;
|
|
›
|
Other
factors,
as
deemed
appropriate,
that
may
be
relevant
to
determine
the
impact
of
the
amendment
on
shareholders.
|
1.18.
|
Material
failures
of
governance,
stewardship,
risk
oversight
3
,
or
fiduciary
responsibilities
at
the
company;
|
1.19.
|
Failure to replace management as appropriate; or
|
1.20.
|
Egregious actions related to a director’s service on other boards that raise substantial doubt about his or her ability to effectively oversee management and serve the best interests of shareholders at any company.
|
2.
|
Responsiveness
|
2.1.
|
The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in the previous year. Factors that will be considered are:
|
|
›
|
The
continuation
of
the
underlying
issue
as
a
voting
item
on
the
ballot
(as
either
shareholder
or
management
proposals);
and
|
2.2.
|
The board failed to act on takeover offers where the majority of shares are tendered;
|
2.3.
|
At the previous board election, any director received more than 50 percent withhold/against votes of the shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote;
|
2.4.
|
The board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the majority of votes cast at the most recent shareholder meeting at which shareholders voted on the say-on-pay frequency; or
|
2.5.
|
The board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received a plurality, but not a majority, of the votes cast at the most recent shareholder meeting at which shareholders voted on the say-on-pay frequency, taking into account:
|
|
›
|
The
board's
rationale
for
selecting
a
frequency
that
is
different
from
the
frequency
that
received
a
plurality;
|
|
›
|
ISS'
analysis
of
whether
there
are
compensation
concerns
or
a
history
of
problematic
compensation
practices;
and
|
3.
|
Composition
|
3.1 |
Generally
vote
against
or
withhold
from
directors
(except
new
nominees,
who
should
be
considered
case-by-
case
4
)
who
attend
less
than
75
percent
of
the
aggregate
of
their
board
and
committee
meetings
for
the period for which they served, unless an acceptable reason for absences is disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the following
|
3.2.
|
If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold from the director(s) in question.
|
3.3.
|
Sit on more than six public company boards; or
|
3.4.
|
Are
CEOs
of
public
companies
who
sit
on
the
boards
of
more
than
two
public
companies
besides
their
own—
withhold
only
at
their
outside
boards
5
.
|
4.
|
Independence
|
2.1.
|
The inside or affiliated outside director serves on any of the three key committees: audit, compensation, or nominating;
|
2.2.
|
The company lacks an audit, compensation, or nominating committee so that the full board functions as that committee;
|
2.3.
|
The company lacks a formal nominating committee, even if the board attests that the independent directors fulfill the functions of such a committee; or
|
2.4.
|
Independent directors make up less than a majority of the directors.
|
1.
|
Inside Director (I)
|
1.1.
|
Current employee or current officer
[1]
of the company or one of its affiliates
[2]
.
|
1.2.
|
Beneficial owner of more than 50 percent of the company's voting power (this may be aggregated if voting power is distributed among more than one member of a group).
|
1.3.
|
Director named in the Summary Compensation Table (excluding former interim officers).
|
2.
|
Affiliated Outside Director (AO)
|
2.2.
|
Former
CEO
of
the
company.
[3],[4]
|
2.3.
|
Former CEO of an acquired company within the past five years
[4]
.
|
2.4.
|
Former
interim
officer
if
the
service
was
longer
than
18
months.
If
the
service
was
between
12
and
18
months
an
assessment
of
the
interim
officer’s
employment
agreement
will
be
made
.
[5]
|
2.5.
|
Former officer
[1]
of the company, an affiliate
[2]
or an acquired firm within the past five years.
|
2.6.
|
Officer
[1]
of a former parent or predecessor firm at the time the company was sold or split off from the parent/predecessor within the past five years.
|
2.7.
|
Officer
[1]
,
former officer, or general or limited partner of a joint venture or partnership with the company.
|
2.8.
|
Immediate family member
[6]
of a current or former officer
[1]
of the company or its affiliates
[2]
within the last five years.
|
2.9.
|
Immediate family member
[6]
of a current employee of company or its affiliates
[2]
where additional
|
2.10.
|
Currently provides (or an immediate family member
[6]
provides) professional services
[7]
to the company, to an affiliate
[2]
of the company or an individual officer of the company or one of its affiliates in excess of $10,000 per year.
|
2.11.
|
Is (or an immediate family member
[6]
is) a partner in, or a controlling shareholder or an employee of, an
|
2.12.
|
Has (or an immediate family member
[6]
has) any material transactional relationship
[8]
with the company or its affiliates
[2]
(excluding investments in the company through a private placement).
|
2.13.
|
Is (or an immediate family member
[6]
is) a partner in, or a controlling shareholder or an executive officer of, an organization which has any material transactional relationship
[8]
with the company or its affiliates
[2]
(excluding investments in the company through a private placement).
|
2.14.
|
Is (or an immediate family member
[6]
is) a trustee, director, or employee of a charitable or non-profit organization that receives material grants or endowments
[8]
from the company or its affiliates
[2]
.
|
2.15.
|
Party to a voting agreement
[9]
to vote in line with management on proposals being brought to shareholder vote.
|
2.16.
|
Has (or an immediate family member
[6]
has) an interlocking relationship as defined by the SEC involving members of the board of directors or its Compensation Committee
[10]
.
|
2.17.
|
Founder
[11]
of the company but not currently an employee.
|
2.18.
|
Any material
[12]
relationship with the company.
|
3.
|
Independent Outside Director (IO)
|
3.1.
|
No
material
[12]
connection
to
the
company
other
than
a
board
seat.
|
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|
|
© 2015 ISS | Institutional Shareholder Services | 17 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General Recommendation : Vote against management and shareholder proposals to limit the tenure of outside directors through mandatory retirement ages. |
Vote against management proposals to limit the tenure of outside directors through term limits. However, scrutinize boards where the average tenure of all directors exceeds 15 years for independence from management and for sufficient turnover to ensure that new perspectives are being added to the board. |
|
General
Recommendation
:
Vote
for
proposals
seeking
to
fix
the
board
size
or
designate
a
range
for
the
board
size.
|
|
General
Recommendation
:
Vote
against
proposals
to
classify
(stagger)
the
board.
Vote
for
proposals
to
repeal
classified
boards
and
to
elect
all
directors
annually.
|
|
General Recommendation : Generally vote for proposals seeking disclosure on a CEO succession planning policy, considering, at a minimum, the following factors: |
|
General Recommendation : Generally vote against management proposals to eliminate cumulate voting, and for shareholder proposals to restore or provide for cumulative voting, unless: |
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|
|
© 2015 ISS | Institutional Shareholder Services | 18 of 69 |
›
|
The
company
has
adopted
a
majority
vote
standard,
with
a
carve-out
for
plurality
voting
in
situations
where
there
are
more
nominees
than
seats,
and
a
director
resignation
policy
to
address
failed
elections.
|
|
General Recommendation : Vote case-by-case on proposals on director and officer indemnification and liability protection. |
›
|
Expand
coverage
beyond
just
legal
expenses
to
liability
for
acts
that
are
more
serious
violations
of
fiduciary
obligation
than
mere
carelessness.
|
›
|
Expand
the
scope
of
indemnification
to
provide
for
mandatory
indemnification
of
company
officials
in
connection
with
acts
that
previously
the
company
was
permitted
to
provide
indemnification
for,
at
the
discretion
of
the
company's
board
(
i.e.
,
"permissive
indemnification"),
but
that
previously
the
company
was
not
required
to
indemnify.
|
›
|
If
the
director
was
found
to
have
acted
in
good
faith
and
in
a
manner
that
s/he
reasonably
believed
was
in
the
best
interests
of
the
company;
and
|
|
General Recommendation : Vote case-by case on proposals that establish or amend director qualifications. Votes should be based on the reasonableness of the criteria and the degree to which they may preclude dissident nominees from joining the board. |
|
›
|
The
company’s
board
committee
structure,
existing
subject
matter
expertise,
and
board
nomination
provisions
relative
to
that
of
its
peers;
|
|
›
|
The
company’s
existing
board
and
management
oversight
mechanisms
regarding
the
issue
for
which
board
oversight
is
sought;
|
|
›
|
The
company’s
disclosure
and
performance
relating
to
the
issue
for
which
board
oversight
is
sought
and
any
significant
related
controversies;
and
|
|
General Recommendation:
Generally vote against shareholder proposals to establish a new board committee, as
such proposals seek a specific oversight mechanism/structure that potentially limits a company’s flexibility to
determine an appropriate oversight mechanism for itself. However, the following factors will be considered:
|
|
›
|
Existing
oversight
mechanisms
(including
current
committee
structure)
regarding
the
issue
for
which
board
oversight
is
sought;
|
|
General
Recommendation
:
Vote
against
proposals
that
provide
that
directors
may
be
removed
only
for
cause.
Vote
for
proposals
to
restore
shareholders’
ability
to
remove
directors
with
or
without
cause.
|
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|
|
© 2015 ISS | Institutional Shareholder Services | 20 of 69 |
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2015 U.S. Summary Proxy Voting Guidelines
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|
General Recommendation: Vote for shareholder proposals asking that a majority or more of directors be independent unless the board composition already meets the proposed threshold by ISS’ definition of independent outsider. (See Categorization of Directors .) |
|
General Recommendation : Generally vote for management proposals to adopt a majority of votes cast standard for directors in uncontested elections. Vote against if no carve-out for a plurality vote standard in contested elections is included. |
|
General Recommendation : Generally vote for management and shareholder proposals for proxy access with the following provisions: |
|
›
|
Ownership
duration:
maximum
requirement
not
longer
than
three
(3)
years
of
continuous
ownership
for
each
member
of
the
nominating
group;
|
|
General Recommendation : Vote against shareholder proposals that would require a company to nominate more candidates than the number of open board seats. |
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|
|
© 2015 ISS | Institutional Shareholder Services | 21 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation:
Generally
vote
for
shareholder
proposals
requesting
that
the
board
establish
an internal mechanism/process, which may include a committee, in order to improve communications
between directors and shareholders, unless the company has the following features, as appropriate
|
|
›
|
Established
a
communication
structure
that
goes
beyond
the
exchange
requirements
to
facilitate
the
exchange
of
information
between
shareholders
and
members
of
the
board;
|
|
›
|
Company
has
not
ignored
majority-supported
shareholder
proposals
or
a
majority
withhold
vote
on
a
director
nominee;
and
|
|
›
|
The
company
has
an
independent
chairman
or
a
lead
director,
according
to
ISS’
definition.
This
individual
must
be
made
available
for
periodic
consultation
and
direct
communication
with
major
shareholders.
|
|
General Recommendation : Vote case-by-case on the election of directors in contested elections, considering the following factors: |
|
General Recommendation : In cases where companies are targeted in connection with public “vote - no” campaigns, evaluate director nominees under the existing governance policies for voting on director nominees in uncontested elections. Take into consideration the arguments submitted by shareholders and other publicly available information. |
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|
|
© 2015 ISS | Institutional Shareholder Services | 22 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
case-by-case
on
advance
notice
proposals,
giving
support
to
those
proposals which allow shareholders to submit proposals/nominations as close to the meeting date as
reasonably
possible
and
within
the
broadest
window
possible,
recognizing
the
need
to
allow
sufficient
notice
for
company,
regulatory,
and
shareholder
review
|
|
General
Recommendation
:
Vote
against
proposals
giving
the
board
exclusive
authority
to
amend
the
bylaws.
Vote
for
proposals
giving
the
board
the
ability
to
amend
the
bylaws
in
addition
to
shareholders.
|
|
General Recommendation : Vote for proposals to opt out of control share acquisition statutes unless doing so would enable the completion of a takeover that would be detrimental to shareholders. |
|
General Recommendation : Vote for proposals to opt out of control share cash-out statutes. |
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|
|
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|
2015 U.S. Summary Proxy Voting Guidelines
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|
General Recommendation : Vote for proposals to opt out of state disgorgement provisions. |
|
General Recommendation: Vote case-by-case on proposals to adopt fair price provisions (provisions that stipulate that an acquirer must pay the same price to acquire all shares as it paid to acquire the control shares), evaluating factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price provision, and the mechanism for determining the fair price. |
|
General
Recommendation:
Vote
for
proposals
to
opt
out
of
state
freeze-out
provisions.
Freeze-out
provisions
force
an
investor
who
surpasses
a
certain
ownership
threshold
in
a
company
to
wait
a
specified period of time before gaining control of the company
|
|
General
Recommendation
:
Vote
for
proposals
to
adopt
anti-greenmail
charter
or
bylaw
amendments
or
otherwise
restrict
a
company’s
ability
to
make
greenmail
payments.
|
|
General
Recommendation:
Vote
case-by-case
on
bylaws
which
impact
shareholders'
litigation
rights,
taking
into
account
factors
such
as:
|
|
›
|
Disclosure
of
past
harm
from
shareholder
lawsuits
in
which
plaintiffs
were
unsuccessful
or
shareholder
lawsuits
outside
the
jurisdiction
of
incorporation;
|
|
›
|
The
breadth
of
application
of
the
bylaw,
including
the
types
of
lawsuits
to
which
it
would
apply
and
the
definition
of
key
terms;
and
|
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|
|
© 2015 ISS | Institutional Shareholder Services | 24 of 69 |
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2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation:
Vote
against
proposals
to
adopt
a
protective
amendment
for
the
stated
purpose
of
protecting
a
company's
net
operating
losses
(NOL)
if
the
effective
term
of
the
protective
amendment
would
exceed
the
shorter
of
three
years
and
the
exhaustion
of
the
NOL.
|
|
›
|
The
ownership
threshold
(NOL
protective
amendments
generally
prohibit
stock
ownership
transfers
that
would
result
in
a
new
5-percent
holder
or
increase
the
stock
ownership
percentage
of
an
existing
5-percent
holder);
|
|
›
|
Shareholder
protection
mechanisms
(sunset
provision
or
commitment
to
cause
expiration
of
the
protective
amendment
upon
exhaustion
or
expiration
of
the
NOL);
|
|
›
|
The
company's
existing
governance
structure
including:
board
independence,
existing
takeover
defenses,
track
record
of
responsiveness
to
shareholders,
and
any
other
problematic
governance
concerns;
and
|
|
General
Recommendation:
Vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it unless the company has: (1) A shareholder approved poison pill in place; or (2) The company has adopted a policy concerning the adoption of a pill in the future specifying that the board will only adopt a shareholder rights plan if either:
|
|
General
Recommendation:
Vote
case-by-case
on
management
proposals
on
poison
pill
ratification,
focusing
on
the
features
of
the
shareholder
rights
plan.
Rights
plans
should
contain
the
following
attributes:
|
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|
|
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2015 U.S. Summary Proxy Voting Guidelines
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|
›
|
Shareholder
redemption
feature
(qualifying
offer
clause);
if
the
board
refuses
to
redeem
the
pill
90
days
after
a
qualifying
offer
is
announced,
10
percent
of
the
shares
may
call
a
special meeting
or
seek
a
written
consent
to
vote
on
rescinding
the
pill.
|
|
General
Recommendation:
Vote
against
proposals
to
adopt
a
poison
pill
for
the
stated
purpose
of
protecting
a
company's
net
operating
losses
(NOL)
if
the
term
of
the
pill
would
exceed
the
shorter
of
three
years
and
the
exhaustion
of
the
NOL.
|
|
›
|
Shareholder
protection
mechanisms
(sunset
provision,
or
commitment
to
cause
expiration
of
the
pill
upon
exhaustion
or
expiration
of
NOLs);
|
|
›
|
The
company's
existing
governance
structure
including:
board
independence,
existing
takeover
defenses,
track
record
of
responsiveness
to
shareholders,
and
any
other
problematic
governance
concerns;
and
|
|
General
Recommendation:
Vote case-by-case on proposals regarding proxy voting mechanics, taking into consideration whether implementation of the proposal is likely to enhance or protect shareholder rights. Specific issues covered under the policy include, but are not limited to, confidential voting of individual proxies and ballots, confidentiality of running vote tallies, and the treatment of abstentions and/or broker non-votes in the company's vote-counting methodology.
|
|
›
|
While
a
variety
of
factors
may
be
considered
in
each
analysis,
the
guiding
principles
are:
transparency,
consistency,
and
fairness
in
the
proxy
voting
process.
The
factors
considered,
as
applicable
to
the
proposal,
may
include:
|
|
›
|
The
company's
stated
confidential
voting
policy
(or
other
relevant
policies)
and
whether
it
ensures
a
"level
playing
field"
by
providing
shareholder
proponents
with
equal
access
to
vote
information
prior
to
the
annual
meeting;
|
|
›
|
The
company's
vote
standard
for
management
and
shareholder
proposals
and
whether
it
ensures
consistency
and
fairness
in
the
proxy
voting
process
and
maintains
the
integrity
of
vote
results;
|
|
›
|
Whether
the
company's
disclosure
regarding
its
vote
counting
method
and
other
relevant
voting
policies
with
respect
to
management
and
shareholder
proposals
are
consistent
and
clear;
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
reimburse
proxy
solicitation
expenses.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
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2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation:
Management
or
shareholder
proposals
to
change
a
company's
state
of
incorporation
should
be
evaluated
case-by-case,
giving
consideration
to
both
financial
and
corporate
governance
concerns
including
the
following:
|
|
General
Recommendation:
Generally
vote
against
management
and
shareholder
proposals
to
restrict
or
prohibit
shareholders'
ability
to
act
by
written
consent.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 27 of 69 |
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2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
against
management
or
shareholder
proposals
to
restrict
or
prohibit
shareholders’
ability
to
call
special
meetings.
|
|
General
Recommendation:
Vote
against
proposals
that
ask
the
board
to
consider
non-shareholder
constituencies
or
other
non-financial
effects
when
evaluating
a
merger
or
business
combination
.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
opt
in
or
out
of
state
takeover
statutes
(including
fair
price
provisions,
stakeholder
laws,
poison
pill
endorsements,
severance
pay
and
labor
contract
provisions,
and
anti-
greenmail
provisions).
|
|
General
Recommendation:
Vote
against
proposals
to
require
a
supermajority
shareholder
vote.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 28 of 69 |
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|
General
Recommendation:
Vote
for
management
proposals
to
reduce
the
par
value
of
common
stock
unless
the
action
is
being
taken
to
facilitate
an
anti-takeover
device
or
some
other
negative
corporate
governance
action.
|
|
General
Recommendation:
Vote
for
proposals
to
increase
the
number
of
authorized
common
shares
where
the
primary
purpose
of
the
increase
is
to
issue
shares
in
connection
with
a
transaction
on
the
same
ballot
that
warrants
support.
|
|
›
|
Disclosure
in
the
proxy
statement
of
specific
and
severe
risks
to
shareholders
of
not
approving
the
request;
and
|
|
›
|
The
dilutive
impact
of
the
request
as
determined
by
an
allowable
increase
calculated
by
ISS
(typically
100
percent
of
existing
authorized
shares)
that
reflects
the
company's
need
for
shares
and
total
shareholder
returns.
|
|
General
Recommendation:
Generally
vote
against
proposals
to
create
a
new
class
of
common
stock
unless:
|
|
›
|
The
company's
auditor
has
concluded
that
there
is
substantial
doubt
about
the
company's
ability
to
continue
as
a
going
concern;
or
|
|
›
|
The
new
class
is
intended
for
financing
purposes
with
minimal
or
no
dilution
to
current
shareholders
in
both
the
short
term
and
long
term;
and
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
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|
General
Recommendation:
Vote
against
proposals
that
increase
authorized
common
stock
for
the
explicit
purpose
of
implementing
a
non-shareholder-
approved
shareholder
rights
plan
(poison
pill).
|
|
General
Recommendation:
Vote
case-by-case
on
shareholder
proposals
that
seek
preemptive
rights,
taking
into
consideration:
|
|
General
Recommendation:
Vote
for
proposals
to
increase
the
number
of
authorized
preferred
shares
where
the
primary
purpose
of
the
increase
is
to
issue
shares
in connection
with
a
transaction
on
the
same
ballot
that
warrants
support.
|
|
General
Recommendation:
Vote case-by-case on recapitalizations (reclassifications of securities), taking into account the following:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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|
General
Recommendation:
Vote
for
management
proposals
to
implement
a
reverse
stock
split
when
the
number
of
authorized
shares
will
be
proportionately
reduced.
|
|
›
|
The
effective
increase
in
authorized
shares
is
equal
to
or
less
than
the
allowable
increase
calculated
in
accordance
with
ISS'
Common
Stock
Authorization
policy.
|
|
General
Recommendation:
Vote
for
management
proposals
to
institute
open-market
share
repurchase
plans
in
which
all
shareholders
may
participate
on
equal
terms.
|
|
General
Recommendation:
Vote
for
management
proposals
to
increase
the
common
share
authorization
for
a
stock
split
or
share
dividend,
provided
that
the
increase
in
authorized
shares
equal
to
or
less
than
the
allowable
increase
calculated
in
accordance
with
ISS'
Common
Stock
Authorization
policy.
|
|
General
Recommendation:
Vote
case-by-case
on
the
creation
of
tracking
stock,
weighing
the
strategic
value
of
the
transaction
against
such
factors
as:
|
|
General
Recommendation
:
Vote
for
proposals
to
restore
or
provide
shareholders
with
rights
of
appraisal.
|
|
General
Recommendation
:
Vote
case-by-case
on
asset
purchase
proposals,
considering
the
following
factors:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
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|
General
Recommendation:
Vote
case-by-case
on
asset
sales,
considering
the
following
factors:
|
|
General
Recommendation:
Vote case-by-case on bundled or “conditional” proxy proposals. In the case of items that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when the joint effect of the conditioned items is not in shareholders’ best interests, vote against the proposals. If the combined effect is positive, support such proposals.
|
|
General
Recommendation:
Vote case-by-case on proposals regarding conversion of securities. When evaluating these proposals the investor should review the dilution to existing shareholders, the conversion price relative to market value, financial issues, control issues, termination penalties, and conflicts of interest.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
increase
common
and/or
preferred
shares
and
to
issue
shares
as
part
of
a
debt
restructuring
plan,
after
evaluating:
|
|
›
|
Terms
of
the
offer
-
discount/premium
in
purchase
price
to
investor,
including
any
fairness
opinion;
termination
penalties;
exit
strategy;
|
|
›
|
Financial
issues
-
company's
financial
situation;
degree
of
need
for
capital;
use
of
proceeds;
effect
of
the
financing
on
the
company's
cost
of
capital;
|
|
›
|
Control
issues
-
change
in
management;
change
in
control,
guaranteed
board
and
committee
seats;
standstill
provisions;
voting
agreements;
veto
power
over
certain
corporate
actions;
and
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
regarding
the
formation
of
a
holding
company,
taking
into consideration the following:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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|
General
Recommendation:
Vote
case-by-case
on
going
private
transactions,
taking
into
account
the
following:
|
|
›
|
Whether
the
company
has
attained
benefits
from
being
publicly-traded
(examination
of
trading
volume,
liquidity,
and
market
research
of
the
stock);
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
form
joint
ventures,
taking
into
account
the
following:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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|
General
Recommendation:
Vote
case-by-case
on
liquidations,
taking
into
account
the
following:
|
|
General
Recommendation:
Vote
case-by-case
on
mergers
and
acquisitions.
Review
and
evaluate
the
merits
and
drawbacks
of
the
proposed
transaction,
balancing
various
and
sometimes
countervailing
factors
including:
|
› |
Valuation
-
Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is placed on the offer premium, market reaction and strategic rationale
|
› | Market reaction - How has the market responded to the proposed deal? A negative market reaction should cause closer scrutiny of a deal |
› | Strategic rationale - Does the deal make sense strategically? From where is the value derived? Cost and revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management should also have a favorable track record of successful integration of historical acquisitions. |
› | Negotiations and process - Were the terms of the transaction negotiated at arm's-length? Was the process fair and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation "wins" can also signify the deal makers' competency. The comprehensiveness of the sales process ( e.g. , full auction, partial auction, no auction) can also affect shareholder value. |
› | Conflicts of interest - Are insiders benefiting from the transaction disproportionately and inappropriately as compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the company may be more likely to vote to approve a merger than if they did not hold these interests. Consider whether these interests may have influenced these directors and officers to support or recommend the merger. The CIC figure presented in the "ISS Transaction Summary" section of this report is an aggregate figure that can in certain cases be a misleading indicator of the true value transfer from shareholders to insiders. Where such figure appears to be excessive, analyze the underlying assumptions to determine whether a potential conflict exists |
› | Governance - Will the combined company have a better or worse governance profile than the current governance profiles of the respective parties to the transaction? If the governance profile is to change for the worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration in governance |
|
General
Recommendation:
Vote
case-by-case
on
proposals
regarding
private
placements,
warrants,
and
convertible
debentures
taking
into
consideration:
|
|
›
|
Terms
of
the
offer
(discount/premium
in
purchase
price
to
investor,
including
any
fairness
opinion,
conversion
features,
termination
penalties,
exit
strategy):
|
|
›
|
The
terms
of
the
offer
should
be
weighed
against
the
alternatives
of
the
company
and
in
light
of
company's
financial
condition.
Ideally,
the
conversion
price
for
convertible
debt
and
the
exercise
price
for
warrants
should be at a premium to the then prevailing stock price at the time of private placement.
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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|
›
|
Were
the
terms
of
the
transaction
negotiated
at
arm's
length?
Are
managerial
incentives
aligned
with
shareholder
interests?
|
|
›
|
The
market's
response
to
the
proposed
deal.
A
negative
market
reaction
is
a
cause
for
concern.
Market
reaction
may
be
addressed
by
analyzing
the
one
day
impact
on
the
unaffected
stock
price.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
common
shareholders
on
bankruptcy
plans
of
reorganization,
considering
the
following
factors
including,
but
not
limited
to:
|
|
›
|
Whether
shareholders
are
adequately
represented
in
the
reorganization
process
(particularly
through
the
existence
of
an
Official
Equity
Committee);
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
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|
General
Recommendation:
Vote
case-by-case
on
SPAC
mergers
and
acquisitions
taking
into
account
the
following:
|
› | Valuation— Is the value being paid by the SPAC reasonable? SPACs generally lack an independent fairness opinion and the financials on the target may be limited. Compare the conversion price with the intrinsic value of the target company provided in the fairness opinion. Also, evaluate the proportionate value of the combined entity attributable to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally, a private company discount may be applied to the target, if it is a private entity |
› | Market reaction— How has the market responded to the proposed deal? A negative market reaction may be a cause for concern. Market reaction may be addressed by analyzing the one-day impact on the unaffected stock price |
› | Deal timing— A main driver for most transactions is that the SPAC charter typically requires the deal to be complete within 18 to 24 months, or the SPAC is to be liquidated. Evaluate the valuation, market reaction, and potential conflicts of interest for deals that are announced close to the liquidation date |
› | Negotiations and process— What was the process undertaken to identify potential target companies within specified industry or location specified in charter? Consider the background of the sponsors |
› | Conflicts of interest— How are sponsors benefiting from the transaction compared to IPO shareholders? Potential conflicts could arise if a fairness opinion is issued by the insiders to qualify the deal rather than a third party or if management is encouraged to pay a higher price for the target because of an 80% rule (the charter requires that the fair market value of the target is at least equal to 80% of net assets of the SPAC). Also, there may be sense of urgency by the management team of the SPAC to close the deal since its charter typically requires a transaction to be completed within the 18-24 month timeframe |
› | Voting agreements— Are the sponsors entering into enter into any voting agreements/ tender offers with shareholders who are likely to vote against the proposed merger or exercise conversion rights |
› | Governance— What is the impact of having the SPAC CEO or founder on key committees following the proposed merger |
|
General
Recommendation:
Vote
case-by-case
on
spin-offs,
considering:
|
|
General
Recommendation:
Vote
case-by-case
on
shareholder
proposals
seeking
to
maximize
shareholder
value
by:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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5.1.
|
Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This principle encompasses overall executive pay practices, which must be designed to attract, retain, and appropriately motivate the key employees who drive shareholder value creation over the long term. It will take into consideration, among other factors, the link between pay and performance; the mix between fixed and variable pay; performance goals; and equity-based plan costs;
|
5.2.
|
Avoid arrangements that risk “pay for failure”: This principle addresses the appropriateness of long or indefinite contracts, excessive severance packages, and guaranteed compensation;
|
5.3.
|
Maintain an independent and effective compensation committee: This principle promotes oversight of executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for compensation decision-making (
e.g.
,
including access to independent expertise and advice when needed);
|
5.4.
|
Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices fully and fairly;
|
5.5.
|
Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in ensuring that compensation to outside directors does not compromise their independence and ability to make appropriate judgments in overseeing managers’ pay and performance. At the market level, it may incorporate a variety of generally accepted best practices.
|
|
General
Recommendation:
Vote
case-by-case
on
ballot
items
related
to
executive
pay
and
practices,
as
well
as
certain
aspects
of
outside
director
compensation.
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
There
is
no
MSOP
on
the
ballot,
and
an
against
vote
on
an
MSOP
is
warranted
due
to
pay
for
performance
misalignment,
problematic
pay
practices,
or
the
lack
of
adequate
responsiveness
on
compensation
issues
raised
previously,
or
a
combination
thereof;
|
|
›
|
The
board
fails
to
respond
adequately
to
a
previous
MSOP
proposal
that
received
less
than
70
percent
support
of
votes
cast;
|
|
›
|
The
company
has
recently
practiced
or
approved
problematic
pay
practices,
including
option
repricing
or
option
backdating;
or
|
1.
|
Peer
Group
9
Alignment:
|
|
›
The
degree
of
alignment
between
the
company's
annualized
TSR
rank
and
the
CEO's
annualized
total
pay
rank
within
a
peer
group,
each
measured
over
a
three-year
period.
|
2.
|
Absolute
Alignment
10
–
the
absolute
alignment
between
the
trend
in
CEO
pay
and
company
TSR
over
the
prior
five
fiscal
years
–
i.e.,
the
difference
between
the
trend
in
annual
pay
changes
and
the
trend
in
annualized
TSR
during
the
period.
|
|
›
|
Actual
results
of
financial/operational
metrics,
such
as
growth
in
revenue,
profit,
cash
flow,
etc.,
both
absolute
and
relative
to
peers;
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
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|
›
|
Special
circumstances
related
to,
for
example,
a
new
CEO
in
the
prior
FY
or
anomalous
equity
grant
practices
(e.g.,
bi-annual
awards);
|
|
›
|
Repricing
or
replacing
of
underwater
stock
options/SARS
without
prior
shareholder
approval
(including
cash
buyouts
and
voluntary
surrender
of
underwater
options);
|
|
›
|
CIC
severance
payments
without
involuntary
job
loss
or
substantial
diminution
of
duties
("single"
or
"modified
single"
triggers);
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
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|
|
›
|
Corrective
actions
taken
by
the
board
or
compensation
committee,
such
as
canceling
or
re-pricing
backdated
options,
the
recouping
of
option
gains
on
backdated
grants;
and
|
|
›
|
Adoption
of
a
grant
policy
that
prohibits
backdating,
and
creates
a
fixed
grant
schedule
or
window
period
for
equity
grants
in
the
future.
|
|
›
|
Failure
to
adequately
respond
to
the
company's
previous
say-on-pay
proposal
that
received
the
support
of
less
than
70
percent
of
votes
cast,
taking
into
account:
|
|
›
|
Disclosure
of
engagement
efforts
with
major
institutional
investors
regarding
the
issues
that
contributed
to
the
low
level
of
support;
|
|
›
|
Whether
the
support
level
was
less
than
50
percent,
which
would
warrant
the
highest
degree
of
responsiveness.
|
|
General
Recommendation
:
Vote
for
annual
advisory
votes
on
compensation,
which
provide
the
most
consistent
and
clear
communication
channel
for
shareholder
concerns
about
companies' executive
pay
programs.
|
|
General
Recommendation:
Vote for annual advisory votes on compensation, which provide the most consistent and clear communication channel for shareholder concerns about companies' executive pay programs.
|
|
›
Recent
amendments
that
incorporate
any
problematic
features
(such
as
those
above)
or
recent
actions
(such
as
extraordinary
equity
grants)
that
may make
packages
so
attractive
as
to
influence
merger
agreements
that
may
not
be
in
the
best
interests
of
shareholders;
or
|
|
›
|
The
company's
assertion
that
a
proposed
transaction
is
conditioned
on
shareholder
approval
of
the
golden
parachute
advisory
vote.
|
|
General
Recommendation:
Vote
case-by-case
on
certain
equity-based
compensation
plans
12
depending
on
a
combination of certain plan features and equity grant practices, where positive factors may counterbalance negative
factors, and vice versa, as evaluated using an "equity plan scorecard" (EPSC) approach with three pillars:
|
|
›
|
Plan
Cost:
The
total
estimated
cost
of
the
company’s
equity
plans
relative
to
industry/market
cap
peers,
measured
by
the
company's
estimated
Shareholder
Value
Transfer
(SVT)
in
relation
to
peers
and
considering
both:
|
|
›
|
SVT
based
on
new
shares
requested
plus
shares
remaining
for
future
grants,
plus
outstanding
unvested/unexercised
grants;
and
|
|
›
|
The
estimated
duration
of
the
plan
(based
on
the
sum
of
shares
remaining
available
and
the
new
shares
requested,
divided
by
the
average
annual
shares
granted
in
the
prior
three
years);
|
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|
|
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|
›
|
The
plan
would
permit
repricing
or
cash
buyout
of
underwater
options
without
shareholder
approval
(either
by
expressly
permitting
it
–
for
NYSE
and
Nasdaq
listed
companies
--
or
by
not
prohibiting
it
when
the
company
has
a
history
of
repricing
–
for
non-listed
companies);
|
|
›
|
The
plan
is
a
vehicle
for
problematic
pay
practices
or
a
significant
pay-for-performance
disconnect
under
certain
circumstances;
or
|
|
General
Recommendation:
Generally
vote
against
equity
plans
if
the
cost
is
unreasonable.
For
non-employee
director
plans,
vote
for
the
plan
if
certain
factors
are
met
(see
Director
Compensation
section).
|
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S&P500
|
|||||
GICS
|
Description
|
Mean
|
Standard Deviation
|
Industry Benchmark*
|
|
10
|
Energy
|
1.19%
|
0.56%
|
2.00%
|
*
|
15
|
Materials
|
1.25%
|
0.71%
|
2.00%
|
*
|
20
|
Industrials
|
1.44%
|
0.69%
|
2.13%
|
|
25
|
Consumer Discretionary
|
1.66%
|
0.84%
|
2.50%
|
|
30
|
Consumer Staples
|
1.42%
|
0.69%
|
2.11%
|
|
35
|
Health Care
|
1.99%
|
0.83%
|
2.82%
|
|
40
|
Financials
|
1.79%
|
1.46%
|
3.25%
|
|
45
|
Information Technology
|
3.24%
|
1.49%
|
4.73%
|
|
50
|
Telecommunication Services
|
0.95%
|
0.33%
|
2.00%
|
*
|
55
|
Utilities
|
0.82%
|
0.38%
|
2.00%
|
*
|
GICS
|
Russell 3000 (excluding the S&P500)
Description Mean
|
Standard Deviation
|
Industry Benchmark*
|
|
1010
|
Energy
|
2.55%
|
2.48%
|
5.03%
|
1510
|
Materials
|
1.60%
|
1.31%
|
2.91%
|
2010
|
Capital Goods
|
1.93%
|
1.22%
|
3.15%
|
2020
|
Commercial & Professional Services
|
2.86%
|
1.70%
|
4.56%
|
2030
|
Transportation
|
1.84%
|
2.07%
|
3.91%
|
2510
|
Automobiles & Components
|
2.02%
|
1.35%
|
3.37%
|
2520
|
Consumer Durables & Apparel
|
2.32%
|
1.57%
|
3.89%
|
2530
|
Consumer Services
|
2.58%
|
1.63%
|
4.21%
|
2540
|
Media
|
2.65%
|
2.52%
|
5.17%
|
2550
|
Retailing
|
2.65%
|
1.81%
|
4.46%
|
3010, 3020, 3030
|
Consumer Staples
|
1.73%
|
1.42%
|
3.15%
|
3510
|
Health Care Equipment & Services
|
3.28%
|
1.85%
|
5.13%
|
3520
|
Pharmaceuticals & Biotechnology
|
3.78%
|
2.21%
|
5.99%
|
4010
|
Banks
|
1.67%
|
1.67%
|
3.34%
|
4020
|
Diversified Financials
|
4.56%
|
4.43%
|
8.99%
|
4030
|
Insurance
|
2.04%
|
1.80%
|
3.84%
|
4040
|
Real Estate
|
1.40%
|
1.31%
|
2.71%
|
4510
|
Software & Services
|
4.97%
|
2.91%
|
7.88%
|
4520
|
Technology Hardware & Equipment
|
3.65%
|
2.20%
|
5.85%
|
4530
|
Semiconductor Equipment
|
4.75%
|
2.15%
|
6.90%
|
5010
|
Telecommunication Services
|
3.03%
|
1.51%
|
4.54%
|
5510
|
Utilities
|
0.84%
|
0.54%
|
2.00%
|
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Non-Russell 3000
|
||||
GICS
|
Description
|
Mean
|
Standard
Deviation
|
Industry
Benchmark*
|
1010
|
Energy
|
2.51%
|
3.72%
|
6.23%
|
1510
|
Materials
|
3.09%
|
3.89%
|
6.98%
|
2010
|
Capital Goods
|
3.54%
|
3.96%
|
7.50%
|
2020
|
Commercial & Professional Services
|
3.88%
|
3.64%
|
7.52%
|
2030
|
Transportation
|
1.73%
|
2.14%
|
3.87%
|
2510
|
Automobiles & Components
|
2.19%
|
2.02%
|
4.21%
|
2520
|
Consumer Durables & Apparel
|
2.83%
|
3.05%
|
5.88%
|
2530
|
Consumer Services
|
2.71%
|
3.00%
|
5.71%
|
2540
|
Media
|
2.70%
|
2.49%
|
5.19%
|
2550
|
Retailing
|
3.79%
|
2.72%
|
6.51%
|
3010, 3020, 3030
|
Consumer Staples
|
2.36%
|
2.96%
|
5.32%
|
3510
|
Health Care Equipment & Services
|
4.56%
|
3.91%
|
8.47%
|
3520
|
Pharmaceuticals & Biotechnology
|
4.86%
|
3.86%
|
8.72%
|
4010
|
Banks
|
1.20%
|
1.80%
|
3.00%
|
4020
|
Diversified Financials
|
2.28%
|
4.11%
|
6.39%
|
4030
|
Insurance
|
1.06%
|
1.68%
|
2.74%
|
4040
|
Real Estate
|
0.93%
|
1.44%
|
2.37%
|
4510
|
Software & Services
|
4.62%
|
3.70%
|
8.32%
|
4520
|
Technology Hardware & Equipment
|
4.07%
|
3.91%
|
7.98%
|
4530
|
Semiconductor Equipment
|
4.44%
|
4.26%
|
8.70%
|
5010
|
Telecommunication Services
|
3.67%
|
3.66%
|
7.33%
|
5510
|
Utilities
|
1.81%
|
2.21%
|
4.02%
|
Stock Price Volatility
|
Multiplier
|
54.6% and higher
|
1 full-value award will count as 1.5 option shares
|
36.1% or higher and less than 54.6%
|
1 full-value award will count as 2.0 option shares
|
24.9% or higher and less than 36.1%
|
1 full-value award will count as 2.5 option shares
|
16.5% or higher and less than 24.9%
|
1 full-value award will count as 3.0 option shares
|
7.9% or higher and less than 16.5%
|
1 full-value award will count as 3.5 option shares
|
Less than 7.9%
|
1 full-value award will count as 4.0 option shares
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
Cancel
outstanding
options
or
SARs
in
exchange
for
options
or
SARs
with
an
exercise
price
that
is
less
than
the
exercise
price
of
the
original
options
or
SARs.
|
|
›
|
The
proportion
of
equity
awards
granted
in
the
last
three
fiscal
years
concentrated
at
the
named
executive
officer
level.
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation
:
Vote
for
proposals
to
implement
a
401(k)
savings
plan
for
employees.
|
|
General
Recommendation:
Vote
for
proposals
to
implement
an
ESOP
or
increase
authorized
shares
for
existing
ESOPs,
unless
the
number
of
shares
allocated
to
the
ESOP
is
excessive
(more
than
five
percent
of
outstanding
shares).
|
|
General
Recommendation:
Vote
case-by-case
on
qualified
employee
stock
purchase
plans.
Vote
for
employee
stock
purchase
plans
where
all
of
the
following
apply:
|
|
General
Recommendation:
Vote
case-by-case
on
nonqualified
employee
stock
purchase
plans.
Vote
for
nonqualified
employee
stock
purchase
plans
with
all
the
following
features:
|
|
›
|
Broad-based
participation
(
i.e.
,
all
employees
of
the
company
with
the
exclusion
of
individuals
with
5
percent
or
more
of
beneficial
ownership
of
the
company);
|
|
›
|
Company
matching
contribution
up
to
25
percent
of
employee’s
contribution,
which
is
effectively
a
discount
of
20
percent
from
market
value;
|
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2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Generally
vote
for
proposals
to
approve
or
amend
executive
incentive
plans
if
the
proposal:
|
|
›
|
Adds
performance
goals
to
existing
compensation
plans
to
comply
with
the
provisions
of
Section
162(m)
unless
they
are
clearly
inappropriate;
or
|
|
›
|
Covers
cash
or
cash
and
stock
plans
that
are
submitted
to
shareholders
for
the
purpose
of
exempting
compensation
from
taxes
under
the
provisions
of
Section
162(m)
if
no
increase
in
shares
is
requested.
|
|
›
|
T
he
compensation
committee
does
not
fully
consist
of
independent
outsiders, per
ISS’
Categorization
of
Directors
;
or
|
› |
|
›
|
A
company
is
presenting
the
plan
to
shareholders
for
Section
162(m)
favorable
tax
treatment
for
the
first
time
after
the
company’s
initial
public
offering
(IPO).
Perform
a full
standard
as
applicable.
|
|
General
Recommendation:
Vote
case-by-case
on
management
proposals
seeking
approval
to
exchange/reprice
options
taking
into
consideration:
|
|
›
|
Historic
trading
patterns--the
stock
price
should
not
be
so
volatile
that
the
options
are
likely
to
be
back
“in-the-
money”
over
the
near
term;
|
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|
|
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|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
case-by-case
on
plans
that
provide
participants
with
the
option
of
taking
all
or
a
portion
of
their
cash
compensation
in
the
form
of
stock.
|
|
General
Recommendation:
One-time
Transfers:
Vote
against
or
withhold
from
compensation
committee
members
if
they
fail
to
submit
one-time
transfers
to
shareholders
for
approval.
|
|
›
|
Stock
options
are
purchased
by
third-party
financial
institutions
at
a
discount
to
their
fair
value
using
option
pricing
models
such
as
Black-Scholes
or
a
Binomial
Option
Valuation
or
other
appropriate
financial
models;
|
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|
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|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
case-by-case
on
compensation
plans
for
non-employee
directors,
based
on
the
cost
of
the
plans
against
the
company’s
benchmark.
|
|
›
|
If
the
mix
is
heavier
on
the
equity
component,
the
vesting
schedule
or
deferral
period
should
be
more
stringent,
with
the
lesser
of
five
years
or
the
term
of
directorship.
|
|
›
|
Detailed
disclosure
provided
on
cash
and
equity
compensation
delivered
to
each
non-employee
director
for
the
most
recent
fiscal
year
in
a
table.
The
column
headers
for
the
table
may
include
the
following:
name
of
each
non-
employee
director,
annual
retainer,
board
meeting
fees,
committee
retainer,
committee-meeting
fees,
and
equity
grants.
|
|
General
Recommendation
:
Vote
against
retirement
plans
for
non-employee
directors.
Vote
for
shareholder
proposals
to
eliminate
retirement
plans
for
non-employee
directors.
|
|
General
Recommendation:
Generally vote for proposals seeking a policy that prohibits named executive officers from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock in a margin account, or pledging stock as collateral for a loan. However, the company’s existing policies regarding responsible use of company stock will be considered.
|
|
General
Recommendation:
Vote case-by-case on proposals seeking deferral of a portion of annual bonus pay, with ultimate payout linked to sustained results for the performance metrics on which the bonus was earned (whether for the named executive officers or a wider group of employees), taking into account the following factors:
|
|
›
|
Whether
the
company
has
a
holding
period
or
stock
ownership
requirements
in
place,
such
as
a
meaningful
retention
ratio
(at
least
50
percent
for
full
tenure);
and
|
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|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation
:
G
enerally
vote
for
shareholder
proposals
seeking
disclosure
regarding
the
Company,
Board,
or
Compensation
Committee’s
use
of
compensation
consultants,
such
as
company
name,
business
relationship(s),
and
fees
paid.
|
|
General
Recommendation
:
Generally vote for shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders' needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company.
|
|
General
Recommendation
:
Generally vote for proposals calling companies to adopt a policy of obtaining shareholder approval for any future agreements and corporate policies that could oblige the company to make
payments or awards following the death of a senior executive in the form of unearned salary or bonuses, accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or
awards made in lieu of compensation. This would not apply to any benefit programs or equity plan proposals that the broad-based employee population is eligible.
|
|
General
Recommendation
:
Vote
case-by-case
on
shareholder
proposals
asking
companies
to
adopt
policies
requiring
senior
executive
officers
to
retain
all
or
a
significant
portion
of
the
shares
acquired
through
compensation
plans,
either:
|
|
›
|
for
a
substantial
period
following
the
lapse
of
all
other
vesting
requirements
for
the
award
(“lock-up
period”),
with
ratable
release
of
a
portion
of
the
shares
annually
during
the
lock-up
period.
|
|
›
|
Whether
the
company
has
any
holding
period,
retention
ratio,
or
officer
ownership
requirements
in
place.
These
should
consist
of:
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
Actual
officer
stock
ownership
and
the
degree
to
which
it
meets
or
exceeds
the
proponent’s
suggested
holding
period/retention
ratio
or
the
company’s
own
stock
ownership
or
retention
requirements;
|
|
›
|
Whether
the
company
has
any
holding
period,
retention
ratio,
or
officer
ownership
requirements
in
place.
These
should
consist
of:
|
|
›
|
Actual
officer
stock
ownership
and
the
degree
to
which
it
meets
or
exceeds
the
proponent’s
suggested
holding
period/retention
ratio
or
the
company’s
own
stock
ownership
or
retention
requirements.
|
|
General
Recommendation
:
Generally
vote
for
proposals
seeking
disclosure
of
the
extent
to
which
the
company
paid
non-deductible
compensation
to
senior
executives
due
to
Internal
Revenue
Code
Section
162(m),
while
considering
the
company’s
existing
disclosure
practices.
|
|
General
Recommendation
:
Vote
case-by-case
on
proposals
calling
for
an
analysis
of
the
pay
disparity
between
corporate
executives
and
other
non-executive
employees
.
The
following
factors
will
be
considered:
|
|
›
|
The
company’s
current
level
of
disclosure
of
its
executive
compensation
setting
process,
including
how
the
company
considers
pay
disparity;
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation
:
Vote case-by-case on shareholder proposals requesting that a significant amount of future long-term incentive compensation awarded to senior executives shall be performance-based and requesting that the board adopt and disclose challenging performance metrics to shareholders, based on the following analytical steps:
|
|
›
|
First,
vote
for
shareholder
proposals
advocating
the
use
of
performance-based
equity
awards,
such
as
performance
contingent
options
or
restricted
stock,
indexed
options
or
premium-priced
options,
unless
the
proposal
is
overly
restrictive
or
if
the
company
has
demonstrated
that
it
is
using
a
“substantial”
portion
of
performance-based
awards
for
its
top
executives.
Standard
stock
options
and
performance-accelerated
awards
do
not
meet
the
criteria
to
be
considered
as
performance-based
awards.
Further,
premium-priced
options
should
have
a
premium
of
at
least
25
percent
and
higher
to
be
considered
performance-based
awards.
|
› |
Second, assess the rigor of the company’s performance-based equity program. If the bar set for the performance- based program is too low based on the company’s historical or peer group comparison, generally vote for the
proposal. Furthermore, if target performance results in an above target payout, vote for the shareholder proposal due to program’s poor design. If the company does not disclose the performance metric of the performance-
based equity program, vote for the shareholder proposal regardless of the outcome of the first step to the test.
|
|
General
Recommendation
:
Vote case-by-case on shareholder proposals that request the board establish a pay-for- superior performance standard in the company's executive compensation plan for senior executives. These proposals generally include the following principles:
|
|
›
|
Set
compensation
targets
for
the
plan’s
annual
and
long-term
incentive
pay
components
at
or
below
the
peer
group
median;
|
|
›
|
Deliver
a
majority
of
the
plan’s
target
long-term
compensation
through
performance-vested,
not
simply
time-
vested,
equity
awards;
|
|
›
|
Provide
the
strategic
rationale
and
relative
weightings
of
the
financial
and
non-financial
performance
metrics
or
criteria
used
in
the
annual
and
performance-vested
long-term
incentive
components
of
the
plan;
|
|
›
|
Establish
performance
targets
for
each
plan
financial
metric
relative
to
the
performance
of
the
company’s
peer
companies;
|
|
›
|
Limit
payment
under
the
annual
and
performance-vested
long-term
incentive
components
of
the
plan
to
when
the
company’s
performance
on
its
selected
financial
performance
metrics
exceeds
peer
group
median
performance.
|
|
›
|
If
the
annual
and
long-term
equity
incentive
programs
are
performance
driven,
are
the
performance
criteria
and
hurdle
rates
disclosed
to
shareholders
or
are
they
benchmarked
against
a
disclosed
peer
group?
|
|
General
Recommendation
:
Generally
vote
for
shareholder
proposals
calling
for
certain
principles
regarding
the
use
of
prearranged
trading
plans
(10b5-1
plans)
for
executives.
These
principles
include:
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2015 U.S. Summary Proxy Voting Guidelines
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|
›
|
Amendment
or
early
termination
of
a
10b5-1
Plan
is
allowed
only
under
extraordinary
circumstances,
as
determined
by
the
board;
|
|
›
|
Trades
under
a
10b5-1
Plan
must
be
handled
by
a
broker
who
does
not
handle
other
securities
transactions
for
the
executive.
|
|
General
Recommendation
:
Generally vote against proposals seeking a policy to prohibit any outside CEO from serving on a company’s compensation committee, unless the company has demonstrated problematic pay practices that raise concerns about the performance and composition of the committee:
|
|
General
Recommendation
:
Vote case-by-case on proposals to recoup incentive cash or stock compensation made to senior executives if it is later determined that the figures upon which incentive compensation is earned turn out to have been in error, or if the senior executive has breached company policy or has engaged in misconduct that
may be significantly detrimental to the company's financial position or reputation, or if the senior executive failed to manage or monitor risks that subsequently led to significant financial or reputational harm to the company. Many companies have adopted policies that permit recoupment in cases where an executive's fraud, misconduct, or
negligence significantly contributed to a restatement of financial results that led to the awarding of unearned incentive compensation. However, such policies may be narrow given that not all misconduct or negligence may result in significant financial restatements. Misconduct, negligence or lack of sufficient oversight by senior
executives may lead to significant financial loss or reputational damage that may have long-lasting impact.
|
|
›
|
The
rigor
of
the
recoupment
policy
focusing
on
how
and
under
what
circumstances
the
company
may
recoup
incentive
or
stock
compensation;
|
|
General
Recommendation
:
Vote for shareholder proposals requiring that golden parachutes or executive severance agreements be submitted for shareholder ratification, unless the proposal requires shareholder approval
prior
to entering into employment contracts.
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The
amount
should
not
exceed
three
times
base
amount
(defined
as
the
average
annual
taxable
W-2
compensation
during
the
five
years
prior
to
the
year
in
which
the
change
of
control
occurs);
|
|
›
|
Change-in-control
payments
should
be
double-triggered,
i.e.
,
(1)
after
a
change
in
control
has
taken
place,
and
(2)
termination
of
the
executive
as
a
result
of
the
change
in
control.
Change
in
control
is
defined
as
a
change
in
the
company
ownership
structure.
|
|
General
Recommendation
:
Generally
vote
against
shareholder
proposals
prohibiting
executives
from
selling
shares
of
company
stock
during
periods
in
which
the
company
has
announced
that
it
may
or
will
be
repurchasing
shares
of
its
stock.
Vote for
the
proposal
when
there
is
a
pattern
of
abuse
by
executives
exercising
options
or
selling
shares
during
periods
of
share
buybacks.
|
|
General
Recommendation
:
Generally vote for shareholder proposals requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote unless the company’s executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans
.
|
|
General
Recommendation
:
Generally vote for proposals calling for companies to adopt a policy of not providing tax gross-up payments to executives, except in situations where gross-ups are provided pursuant to a plan, policy, or arrangement applicable to management employees of the company, such as a relocation or expatriate tax equalization policy.
|
|
General
Recommendation
:
Vote
case-by-case
on
shareholder
proposals
seeking
a
policy
requiring
termination
of
employment
prior
to
severance
payment
and/or
eliminating
accelerated
vesting
of
unvested
equity.
|
|
›
|
The
company's
current
treatment
of
equity
in
change-of-control
situations
(i.e.
is
it
double
triggered,
does
it
allow
for
the
assumption
of
equity
by
acquiring
company,
the
treatment
of
performance
shares,
etc.);
|
|
›
|
Current
employment
agreements,
including
potential
poor
pay
practices
such
as
gross-ups
embedded
in
those
agreements.
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© 2015 ISS | Institutional Shareholder Services | 54 of 69 |
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|
General
Recommendation
:
Generally
vote
case-by-case,
taking
into
consideration
whether
implementation
of
the
proposal
is
likely
to
enhance
or
protect
shareholder
value,
and
in
addition
the
following
will
also
be
considered:
|
|
›
|
If
the
issues
presented
in
the
proposal
are
more
appropriately
or
effectively
dealt
with
through
legislation
or
government
regulation;
|
|
›
|
If
the
company
has
already
responded
in
an
appropriate
and
sufficient
manner
to
the
issue(s)
raised
in
the
proposal;
|
|
›
|
The
company's
approach
compared
with
any
industry
standard
practices
for
addressing
the
issue(s)
raised
by
the
proposal;
|
|
›
|
If
the
proposal
requests
increased
disclosure
or
greater
transparency,
whether
or
not
reasonable
and
sufficient
information
is
currently
available
to
shareholders
from
the
company
or
from
other
publicly
available
sources;
and
|
|
›
|
If
the
proposal
requests
increased
disclosure
or
greater
transparency,
whether
or
not
implementation
would
reveal
proprietary
or
confidential
information
that
could
place
the
company
at
a
competitive
disadvantage.
|
|
General
Recommendation
:
Generally
vote
for
proposals
seeking
a
report
on
a
company’s
animal
welfare
standards,
unless:
|
|
General
Recommendation
:
Generally
vote
against
proposals
to
phase
out
the
use
of
animals
in
product
testing,
unless:
|
|
›
|
The
company
is
conducting
animal
testing
when
suitable
alternatives
are
commonly
accepted
and
used
by
industry
peers;
or
|
|
General
Recommendation
:
Generally vote against proposals requesting the implementation of Controlled Atmosphere Killing (CAK) methods at company and/or supplier operations unless such methods are required by legislation or generally accepted as the industry standard.
|
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2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation
:
Generally vote against proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products. The labeling of products with GE ingredients is best left to the appropriate regulatory authorities.
|
|
›
|
The
quality
of
the
company’s
disclosure
on
GE
product
labeling,
related
voluntary
initiatives,
and
how
this
disclosure
compares
with
industry
peer
disclosure;
and
|
|
General
Recommendation
:
Vote
case-by-case
on
requests
for
reports
on
a
company’s
potentially
controversial
business
or
financial
practices
or
products,
taking
into
account:
|
|
General
Recommendation
:
Generally vote against proposals requesting that companies implement specific price restraints on pharmaceutical products unless the company fails to adhere to legislative guidelines or industry norms in its product pricing practices
|
|
2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation
:
Generally
vote
for
proposals
requesting
that
a
company
report
on
its
policies,
initiatives/procedures,
and
oversight
mechanisms
related
to
toxic/hazardous
materials
or
product
safety
in
its
supply
chain,
unless:
|
|
›
|
The
company
already
discloses
similar
information
through
existing
reports
such
as
a
supplier
code
of
conduct
and/or
a
sustainability
report;
|
|
›
|
The
company
has
formally
committed
to
the
implementation
of
a
toxic/hazardous
materials
and/or
product
safety
and
supply
chain
reporting
and
monitoring
program
based
on
industry
norms
or
similar
standards
within
a
specified
time
frame;
and
|
|
›
|
The
company’s
current
level
of
disclosure
regarding
its
product
safety
policies,
initiatives
and
oversight
mechanisms;
|
|
General
Recommendation
:
Vote
case-by-case
on
resolutions
regarding
the
advertisement
of
tobacco
products,
considering:
|
|
›
|
Whether
the
company
entered
into
the
Master
Settlement
Agreement,
which
restricts
marketing
of
tobacco
to
youth;
and
|
|
›
|
The
degree
that
voluntary
restrictions
beyond
those
mandated
by
law
might
hurt
the
company’s
competitiveness;
and
|
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2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation
:
Generally
vote
for
resolutions
requesting
that
a
company
disclose
information
on
the
impact
of
climate
change
on
its
operations
and
investments,
considering:
|
|
›
|
Whether
the
company
already
provides
current,
publicly-available
information
on
the
impacts
that
climate
change
may
have
on
the
company
as
well
as
associated
company
policies
and
procedures
to
address
related
risks
and/or
opportunities;
|
|
›
|
There
are
no
significant
controversies,
fines,
penalties,
or
litigation
associated
with
the
company’s
environmental
performance.
|
|
›
|
The
company
already
discloses
current,
publicly-available
information
on
the
impacts
that
GHG
emissions
may
have
on
the
company
as
well
as
associated
company
policies
and
procedures
to
address
related
risks
and/or
opportunities;
|
|
›
|
Whether
the
company
has
been
the
subject
of
recent,
significant
violations,
fines,
litigation,
or
controversy
related
to
GHG
emissions.
|
|
General
Recommendation
:
Generally
vote
for
proposals
requesting
that
a
company
report
on
its
energy
efficiency
policies,
unless:
|
|
›
|
The
company
complies
with
applicable
energy
efficiency
regulations
and
laws,
and
discloses
its
participation
in
energy
efficiency
policies
and
programs,
including
disclosure
of
benchmark
data,
targets,
and
performance
measures;
or
|
|
2015 U.S. Summary Proxy Voting Guidelines
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|
General
Recommendation
:
Generally
vote
for
requests
for
reports
on
the
feasibility
of
developing
renewable
energy
resources
unless
the
report
would
be
duplicative
of
existing
disclosure
or
irrelevant
to
the
company’s
line
of
business.
|
|
General
Recommendation
:
Generally
vote
for
requests
for
reports
on
a
company's
efforts
to
diversify
the
board,
unless:
|
|
›
|
The
gender
and
racial
minority
representation
of
the
company’s
board
is
reasonably
inclusive
in
relation
to
companies
of
similar
size
and
business;
and
|
|
›
|
The
board
already
reports
on
its
nominating
procedures
and
gender
and
racial
minority
initiatives
on
the
board
and
within
the
company.
|
|
›
|
The
degree
of
existing
gender
and
racial
minority
diversity
on
the
company’s
board
and
among
its
executive
officers;
|
|
General
Recommendation
:
Generally vote for proposals requesting a company disclose its diversity policies or initiatives, or proposals requesting disclosure of a company’s comprehensive workforce diversity data, including requests for EEO-1 data, unless:
|
|
General
Recommendation
:
Generally vote for proposals seeking to amend a company’s EEO statement or diversity policies to prohibit discrimination based on sexual orientation and/or gender identity, unless the change would be unduly burdensome.
|
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© 2015 ISS | Institutional Shareholder Services | 59 of 69 |
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General
Recommendation
:
Vote
case-by-case
on
requests
for
workplace
safety
reports,
including
reports
on
accident
risk
reduction
efforts,
taking
into
account:
|
|
›
|
The
company’s
current
level
of
disclosure
of
its
workplace
health
and
safety
performance
data,
health
and
safety
management
policies,
initiatives,
and
oversight
mechanisms;
|
|
›
|
The
nature
of
the
company’s
business,
specifically
regarding
company
and
employee
exposure
to
health
and
safety
risks;
|
|
›
|
The
company’s
current
level
of
disclosure
regarding
its
security
and
safety
policies,
procedures,
and
compliance
monitoring;
and
|
|
›
|
The
existence
of
recent,
significant
violations,
fines,
or
controversy
regarding
the
safety
and
security
of
the
company’s
operations
and/or
facilities.
|
|
General
Recommendation
:
Vote
case-by-case
on
requests
for
reports
on
policies
and/or
the
potential
(community)
social
and/or
environmental
impact
of
company
operations,
considering:
|
|
›
|
The
impact
of
regulatory
non-compliance,
litigation,
remediation,
or
reputational
loss
that
may
be
associated
with
failure
to
manage
the
company’s
operations
in
question,
including
the
management
of
relevant
community
and
stakeholder
relations;
|
|
General
Recommendation
:
Generally vote for proposals requesting greater disclosure of a company's (natural gas) hydraulic fracturing operations, including measures the company has taken to manage and mitigate the potential community and environmental impacts of those operations, considering:
|
|
General
Recommendation
:
Generally
vote
for
requests
for
reports
on
potential
environmental
damage
as
a
result
of
company operations in protected regions, unless:
|
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›
|
The
company’s
disclosure
of
its
operations
and
environmental
policies
in
these
regions
is
comparable
to
industry
peers.
|
|
General
Recommendation
:
Vote
case-by-case
on
proposals
to
report
on
an
existing
recycling
program,
or
adopt
a
new
recycling
program,
taking
into
account:
|
|
General
Recommendation
:
Generally
vote
for
proposals
requesting
that
a
company
report
on
its
policies,
initiatives,
and
oversight
mechanisms
related
to
social,
economic,
and
environmental
sustainability,
unless:
|
|
›
|
The
company
already
discloses
similar
information
through
existing
reports
or
policies
such
as
an
environment,
health,
and
safety
(EHS)
report;
a
comprehensive
code
of
corporate
conduct;
and/or
a
diversity
report;
or
|
|
›
|
The
company
has
formally
committed
to
the
implementation
of
a
reporting
program
based
on
Global
Reporting
Initiative
(GRI)
guidelines
or
a
similar
standard
within
a
specified
time
frame.
|
|
General
Recommendation
:
Vote case-by-case on proposals requesting a company report on, or adopt a new policy on, water-related risks and concerns, taking into account
|
|
›
|
Whether
or
not
the
company's
existing
water-related
policies
and
practices
are
consistent
with
relevant
internationally
recognized
standards
and
national/local
regulations;
|
|
›
|
Recent,
significant
company
controversies,
fines,
or
litigation
regarding
water
use
by
the
company
and
its
suppliers.
|
|
General
Recommendation:
Vote against proposals restricting a company from making charitable contributions. Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which, and if, contributions are in the best interests of the company.
|
|
General
Recommendation:
ote
case-by-case
on
proposals
requesting
the
disclosure
or
implementation
of
data
security,
privacy,
or
information
access
and
management
policies
and
procedures,
considering:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
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|
›
|
The
level
of
disclosure
of
company
policies
and
procedures
relating
to
data
security,
privacy,
freedom
of
speech,
information
access
and
management,
and
Internet
censorship;
|
|
›
|
Engagement
in
dialogue
with
governments
or
relevant
groups
with
respect
to
data
security,
privacy,
or
the
free
flow
of
information
on
the
Internet;
|
|
›
|
The
scope
of
business
involvement
and
of
investment
in
countries
whose
governments
censor
or
monitor
the
Internet
and
other
telecommunications;
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
link,
or
report
on
linking,
executive
compensation
to
sustainability
(environmental
and
social)
criteria,
considering:
|
|
›
|
Whether
the
company
has
significant
and/or
persistent
controversies
or
regulatory
violations
regarding
social
and/or
environmental
issues;
|
|
›
|
Whether
the
company
has
management
systems
and
oversight
mechanisms
in
place
regarding
its
social
and
environmental
performance;
|
|
›
|
The
degree
to
which
industry
peers
have
incorporated
similar
non-financial
performance
criteria
in
their
executive
compensation
practices;
and
|
|
General
Recommendation:
Generally
vote
for
proposals
requesting
a
report
on
company
or
company
supplier
labor
and/or
human
rights
standards
and
policies
unless
such
information
is
already
publicly
disclosed.
|
|
›
|
Scope
and
nature
of
business
conducted
in
markets
known
to
have
higher
risk
of
workplace
labor/human
rights
abuse;
|
|
›
|
Recent,
significant
company
controversies,
fines,
or
litigation
regarding
human
rights
at
the
company
or
its
suppliers;
|
|
›
|
The
degree
to
which
existing
relevant
policies
and
practices
are
disclosed,
including
information
on
the
implementation
of
these
policies
and
any
related
oversight
mechanisms;
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 62 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
The
company’s
industry
and
whether
the
company
or
its
suppliers
operate
in
countries
or
areas
where
there
is
a
history
of
human
rights
concerns;
|
|
›
|
Recent,
significant
controversies,
fines,
or
litigation
regarding
human
rights
involving
the
company
or
its
suppliers,
and
whether
the
company
has
taken
remedial
steps;
and
|
|
General
Recommendation:
Vote case-by-case on requests for a report on a company’s potential financial and reputational risks associated with operations in “high-risk” markets, such as a terrorism-sponsoring state or politically/socially unstable region, taking into account:
|
|
›
|
The
nature,
purpose,
and
scope
of
the
operations
and
business
involved
that
could
be
affected
by
social
or
political
disruption;
|
|
›
|
Whether
the
company
has
been
recently
involved
in
recent,
significant
controversies,
fines
or
litigation
related
to
its
operations
in
"high-risk"
markets.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
calling
for
companies
to
report
on
the
risks
associated
with
outsourcing/plant
closures,
considering:
|
|
›
|
The
company’s
current
level
of
disclosure
of
relevant
information
on
outsourcing
and
plant
closure
procedures;
and
|
|
General
Recommendation:
Vote
against
reports
on
foreign
military
sales
or
offsets.
Such
disclosures
may
involve
sensitive
and
confidential
information.
Moreover,
companies
must
comply
with
government
controls
and
reporting
on
foreign
military
sales.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
requesting
information
on
a
company’s
lobbying
(including
direct,
indirect,
and
grassroots
lobbying)
activities,
policies,
or
procedures,
considering:
|
|
›
|
The
company’s
disclosure
regarding
trade
associations
or
other
groups
that
it
supports,
or
is
a
member
of,
that
engage
in
lobbying
activities;
and
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Generally
vote
for
proposals
requesting
greater
disclosure
of
a
company's
political
contributions
and
trade
association
spending
policies
and
activities,
considering:
|
|
›
|
The
company's
policies,
and
management
and
board
oversight
related
to
its
direct
political
contributions
and
payments
to
trade
associations
or
other
groups
that
may
be
used
for
political
purposes;
|
|
›
|
The
company's
disclosure
regarding
its
support
of,
and
participation
in,
trade
associations
or
other
groups
that
may
make
political
contributions;
and
|
|
›
|
Recent
significant
controversies,
fines,
or
litigation
related
to
the
company's
political
contributions
or
political
activities.
|
|
General
Recommendation:
Generally
vote
against
proposals
asking
a
company
to
affirm
political
nonpartisanship
in
the
workplace,
so
long
as:
|
|
›
|
There
are
no
recent,
significant
controversies,
fines,
or
litigation
regarding
the
company’s
political
contributions
or
trade
association
spending;
and
|
|
›
|
The
company
has
procedures
in
place
to
ensure
that
employee
contributions
to
company-sponsored
political
action
committees
(PACs)
are
strictly
voluntary
and
prohibit
coercion.
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote case-by-case on the election of directors and trustees, following the same guidelines for uncontested directors for public company shareholder meetings. However, mutual fund boards do not usually have compensation committees, so do not withhold for the lack of this committee.
|
|
General
Recommendation:
Vote
case-by-case
on
conversion
proposals,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
case-by-case
on
proxy
contests,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
case-by-case
on
investment
advisory
agreements,
considering
the
following
factors:
|
|
General
Recommendation
:
Vote
for
the
establishment
of
new
classes
or
series
of
shares.
|
|
General
Recommendation:
Vote
case-by-case
on
the
authorization
for
or
increase
in
preferred
shares,
considering
the
following
factors
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 65 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
case-by-case
on
policies
under
the
Investment
Advisor
Act
of
1940,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
change
a
fundamental
restriction
to
a
non-
fundamental
restriction,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
against
proposals
to
change
a
fund’s
fundamental
investment
objective
to
non-
fundamental.
|
|
General
Recommendation:
Vote
case-by-case
on
name
change
proposals,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
case-by-case
on
changes
in
a
fund's
sub-classification,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
for
proposals
authorizing
the
board
to
issue
shares
below
Net
Asset
Value
(NAV)
if:
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
›
|
The
proposal
to
allow
share
issuances
below
NAV
has
an
expiration
date
no
more
than
one
year
from
the
date
shareholders
approve
the
underlying
proposal,
as
required
under
the
Investment
Company
Act
of
1940;
|
|
›
|
The
sale
is
deemed
to
be
in
the
best
interests
of
shareholders
by
(1)
a
majority
of
the
company's
independent
directors
and
(2)
a
majority
of
the
company's
directors
who
have
no
financial
interest
in
the
issuance;
and
|
|
›
|
Providing
disclosure
that
its
past
share
issuances
were
priced
at
levels
that
resulted
in
only
small
or
moderate
discounts
to
NAV
and
economic
dilution
to
existing
non-participating
shareholders.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
dispose
of
assets,
to
terminate
or
liquidate,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
case-by-case
on
changes
to
the
charter
document,
considering
the
following
factors:
|
|
›
|
Removal
of
shareholder
approval
requirement
to
amend
the
fund's
management
contract,
allowing
the
contract
to
be
modified
by
the
investment
manager
and
the
trust
management,
as
permitted
by
the
1940
Act;
|
|
›
|
Allow
the
trustees
to
impose
other
fees
in
addition
to
sales
charges
on
investment
in
a
fund,
such
as
deferred
sales
charges
and
redemption
fees
that
may
be
imposed
upon
redemption
of
a
fund's
shares;
|
|
General
Recommendation:
Vote
case-by-case
on
re-incorporations,
considering
the
following
factors:
|
|
General
Recommendation:
Vote
against
proposals
authorizing
the
board
to
hire
or
terminate
subadvisers
without
shareholder
approval
if
the
investment
adviser
currently
employs
only
one
subadviser.
|
|
2015 U.S. Summary Proxy Voting Guidelines
|
|
General
Recommendation:
Vote
case-by-case
on
distribution
agreement
proposals,
considering
the
following
factors:
|
|
General
Recommendation
:
Vote
for
the
establishment
of
a
master-feeder
structure.
|
|
General
Recommendation:
Vote
case-by-case
on
merger
proposals,
considering
the
following
factors:
|
|
General
Recommendation:
Generally
vote
against
shareholder
proposals
that
mandate
a
specific
minimum
amount
of
stock
that
directors
must
own
in
order
to
qualify
as
a
director
or
to
remain
on
the
board.
|
|
General
Recommendation:
Vote
case-by-case
on
shareholder
proposals
to
reimburse
proxy
solicitation
expenses.
When
supporting
the
dissidents,
vote
for
the
reimbursement
of
the
proxy
solicitation
expenses.
|
|
General
Recommendation:
Vote
case-by-case
on
proposals
to
terminate
the
investment
advisor,
considering
the
following
factors:
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 68 of 69 |
|
2015 U.S. Summary Proxy Voting Guidelines
|
Enabling the financial community to manage governance risk for the benefit of shareholders |
|
|
© 2015 ISS | Institutional Shareholder Services | 69 of 69 |
(a)
|
(i)
|
Certificate of Trust –
incorporated herein by reference to Registrant’s Registration Statement on Form N-1A filed on August 7, 2015.
|
(ii)
|
Agreement and Declaration of Trust –
incorporated herein by reference to Registrant’s Registration Statement on Form N-1A filed on August 7, 2015.
|
|
(b)
|
Bylaws –
incorporated herein by reference to Registrant’s Registration Statement on Form N-1A filed on August 7, 2015.
|
|
(c)
|
Instruments Defining Rights of Security Holders –
incorporated by reference to the Declaration of Trust and Bylaws.
|
|
(d)
|
Investment Advisory Agreement between the Trust, on behalf of the Weiss Alternative Balanced Risk Fund, and Weiss Multi-Strategy Advisers LLC –
filed herewith.
|
|
(e)
|
Distribution Agreement between the Trust, on behalf of the Weiss Alternative Balanced Risk Fund, and Quasar Distributors, LLC –
filed herewith.
|
|
(f)
|
Bonus or Profit Sharing Contracts –
not applicable.
|
|
(g)
|
Custodian Agreement between the Trust and U.S. Bank, National Association –
filed herewith.
|
|
(h)
|
(i)
|
Fund Administration Servicing Agreement between the Trust and U.S. Bancorp Fund Services, LLC –
filed herewith.
|
(ii)
|
Fund Accounting Servicing Agreement between the Trust and U.S. Bancorp Fund Services, LLC –
filed herewith.
|
|
(iii)
|
Transfer Agent Agreement between the Trust and U.S. Bancorp Fund Services, LLC –
filed herewith.
|
|
(iv)
|
Shareholder Servicing Plan adopted by the Trust, on behalf of the Weiss Alternative Balanced Risk Fund –
filed herewith.
|
|
(v)
|
Power of Attorney (all Trustees) dated September 15, 2015 –
filed herewith.
|
|
(vi)
|
Operating Expenses Limitation Agreement dated September 15, 2015 –
filed herewith.
|
|
(i)
|
Opinion and Consent of Counsel by Goodwin Procter LLP for the Weiss Alternative Balanced Risk Fund –
to be filed by amendment.
|
|
(j)
|
Consent of Independent Registered Public Accounting Firm by Cohen Fund Audit Services –
to be filed by amendment.
|
|
(k)
|
Omitted Financial Statements –
not applicable.
|
|
(l)
|
Initial Capital Agreements –
to be filed by amendment.
|
|
(m)
|
Rule 12b-1 Plan by the Trust on behalf of the Weiss Alternative Balanced Risk Fund –
filed herewith.
|
|
(n)
|
Rule 18f-3 Plan by the Trust on behalf of the Weiss Alternative Balanced Risk Fund –
filed herewith.
|
(o)
|
Reserved
|
|
(p)
|
(i)
|
Code of Ethics for the Trust –
filed herewith.
|
(ii)
|
Code of Ethics for Weiss Multi-Strategy Advisers LLC –
To be filed by amendment
|
|
(iii)
|
Code of Ethics for the Distributor, Quasar Distributors, LLC –
filed herewith.
|
Academy Funds Trust
|
Jacob Funds, Inc.
|
Advisors Series Trust
|
Jensen Portfolio, Inc.
|
Aegis Funds
|
Kirr Marbach Partners Funds, Inc.
|
Allied Asset Advisors Funds
|
LKCM Funds
|
Alpha Architect ETF Trust
|
LoCorr Investment Trust
|
Alpine Equity Trust
|
Lord Asset Management Trust
|
Alpine Income Trust
|
MainGate Trust
|
Alpine Series Trust
|
Managed Portfolio Series
|
Angel Oak Funds Trust
|
Matrix Advisors Value Fund, Inc.
|
Appleton Funds
|
Merger Fund
|
Barrett Opportunity Fund, Inc.
|
Monetta Trust
|
Bridge Builder Trust
|
Nicholas Family of Funds, Inc.
|
Bridges Investment Fund, Inc.
|
Oaktree Funds
|
Brookfield Investment Funds
|
Permanent Portfolio Family of Funds, Inc.
|
Brown Advisory Funds
|
Perritt Funds, Inc.
|
Buffalo Funds
|
PRIMECAP Odyssey Funds
|
CG Funds Trust
|
Professionally Managed Portfolios
|
Compass EMP Funds Trust
|
Prospector Funds, Inc.
|
DoubleLine Funds Trust
|
Provident Mutual Funds, Inc.
|
ETF Series Solutions
|
Purisima Funds
|
Evermore Funds Trust
|
Rainier Investment Management Mutual Funds
|
FactorShares Trust
|
RBC Funds Trust
|
First American Funds, Inc.
|
Stone Ridge Trust
|
FundX Investment Trust
|
Stone Ridge Trust II
|
Glenmede Fund, Inc.
|
Stone Ridge Trust III
|
Glenmede Portfolios
|
Thompson IM Funds, Inc.
|
Greenspring Fund, Inc.
|
Trust for Professional Managers
|
Guinness Atkinson Funds
|
Trust for Advised Portfolios
|
Harding Loevner Funds, Inc.
|
USA Mutuals
|
Hennessy Funds Trust
|
Wall Street Fund, Inc.
|
Hotchkis & Wiley Funds
|
Westchester Capital Funds
|
Intrepid Capital Management Funds Trust
|
Wisconsin Capital Funds, Inc.
|
IronBridge Funds, Inc.
|
YCG Funds
|
Records Relating to:
|
Are located at:
|
Registrant’s Fund Administrator, Fund Accountant and
Transfer Agent
|
U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3
rd
Floor
Milwaukee, WI 53202
|
Registrant’s Custodian
|
U.S. Bank, National Association
1555 N. River Center Drive, Suite 302
Milwaukee, Wisconsin 53212
|
Registrant’s Distributor
|
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, WI 53202
|
Registrant’s Investment Adviser
|
Weiss Multi-Strategy Advisers LLC
320 Park Avenue, 20th Floor
New York, New York 10022
|
Series Portfolios Trust
|
||
By:
/s/ John J. Hedrick*
|
||
John J. Hedrick
|
||
President
|
Signature
|
Title
|
/s/ Daniel B. Willey*
|
Trustee
|
Daniel B. Willey
|
|
/s/ Debra McGinty-Poteet *
|
Trustee
|
Debra McGinty-Poteet
|
|
/s/ Koji Felton *
|
Trustee
|
Koji Felton
|
|
/s/ Dana L. Armour*
|
Trustee
|
Dana L. Armour
|
|
/s/ John J. Hedrick*
|
President and Principal Executive Officer
|
John J. Hedrick
|
|
/s/ Jacob I. Ferch*
|
Treasurer and Principal Financial Officer
|
Jacob I. Ferch
|
|
*By: /s/ John J. Hedrick
|
November 5, 2015
|
John J. Hedrick
Attorney-In Fact pursuant to Power of Attorney
|
Exhibit
Number
|
Description
|
|
EX-99 (d)
|
Investment Advisory Agreement
|
|
EX-99 (e)
|
Distribution Agreement
|
|
EX-99 (g)
|
Custodian Agreement
|
|
EX-99 (h)(i)
|
Fund Administration Servicing Agreement
|
|
EX-99 (h)(ii)
|
Fund Accounting Servicing Agreement
|
|
EX-99 (h)(iii)
|
Transfer Agent Agreement
|
|
EX-99 (h)(iv)
|
Shareholder Servicing Plan
|
|
EX-99 (h)(v)
|
Power of Attorney
|
|
EX-99 (h)(vi)
|
Operating Expenses Limitation Agreement
|
|
EX-99 (m)
|
Rule 12b-1 Plan
|
|
EX-99 (n)
|
Rule 18f-3 Plan
|
|
EX-99 (p)(i)
|
Code of Ethics for the Trust
|
|
EX-99 (p)(iii)
|
Code of Ethics for the Distributor
|
SERIES PORTFOLIOS TRUST
on behalf of the series listed on Schedule A
|
WEISS MULTI-STRATEGY ADVISERS LLC
|
|
By:
/s/John J. Hedrick
|
By:
/s/Pierce Archer
|
|
Name: John J. Hedrick
|
Name: Pierce Archer
|
|
Title: President
|
Title: Senior Vice President
|
Series of Series Portfolios Trust
|
Annual Fee Rate as a Percentage of Average Daily Net Assets
|
Effective Date of Initial Investment Advisory Agreement
|
Weiss Alternative Balanced Risk Fund
|
1.60%
|
November 3, 2015
|
A.
|
The Distributor shall sell Shares on a best efforts basis as agent for the Trust upon the terms and at the current offering price (plus sales charge, if any) described in the Prospectus. As used in this Agreement, the term “
Prospectus
” shall mean the current prospectus, including the statement of additional information, as both may be amended or supplemented, relating to the Fund and included in the currently effective registration statement (the “
Registration Statement
”) of the Trust filed under the Securities Act of 1933, as amended (the “
1933 Act
”) and the 1940 Act. The Trust shall in all cases receive the net asset value per Share on all sales. If a sales charge is in effect, the Distributor shall remit the sales charge (or portion thereof) to broker-dealers who have sold Shares, as described in Section 2(G), below.
|
B.
|
During the continuous public offering of Shares, the Distributor will hold itself available to receive orders, satisfactory to the Distributor, for the purchase of Shares and will accept such orders on behalf of the Trust. Such purchase orders shall be deemed effective at the time and in the manner set forth in the Prospectus.
|
C.
|
The Distributor, with the operational assistance of the Trust’s transfer agent, shall make Shares available for sale and redemption through the National Securities Clearing Corporation’s Fund/SERV System.
|
D.
|
The Distributor acknowledges that it is not authorized to provide any information or make any representations other than as contained in the Prospectus and any sales literature specifically approved by the Trust.
|
E.
|
The Distributor shall cooperate with the Trust or its agent in the development of all proposed advertisements and sales literature (“
Communications with the Public
”) relating to the Fund. The Distributor shall review all proposed Communications with the Public for compliance with applicable laws and regulations, and shall file with appropriate regulators those Communications with the Public it believes are in compliance with such laws and regulations. The Distributor shall furnish to the Trust any comments provided by regulators with respect to such materials and to use its best efforts to obtain the approval of the regulators to such materials.
|
F.
|
The Distributor, at its sole discretion, may repurchase Shares offered for sale by shareholders of the Fund. Repurchase of Shares by the Distributor shall be at the price determined in accordance with, and in the manner set forth in, the Prospectus. At the end of each business day, the Distributor shall notify the Trust and its transfer agent, by any appropriate means, of the orders for repurchase of Shares received by the Distributor since the last notification, the amount to be paid for such Shares and the identity of the shareholders offering Shares for repurchase. The Trust reserves the right to suspend such repurchase right upon written notice to the Distributor. The Distributor shall also act as agent for the Trust to receive and transmit promptly to the Trust’s transfer agent, shareholder requests for redemption of Shares.
|
G.
|
The Distributor may, in its discretion, enter into agreements with such qualified broker-dealers as it may select, in order that such broker-dealers also may sell Shares of the Fund. The form of any dealer agreement shall be approved by the Trust. To the extent there is a sales charge in effect, the Distributor shall pay the applicable sales charge (or portion thereof), or allow a discount, to the selling broker-dealer, as described in the Prospectus.
|
H.
|
The Distributor shall devote its best efforts to effect sales of Shares of the Fund but shall not be obligated to sell any certain number of Shares.
|
I.
|
The Distributor shall prepare reports for the Board regarding its activities under this Agreement as from time to time shall be reasonably requested by the Board, including reports regarding the use of any 12b-1 payments received by the Distributor.
|
J.
|
The Distributor shall advise the Trust promptly in writing of the initiation of any proceedings against it by the SEC or its staff, FINRA or any state regulatory authority.
|
K.
|
The Distributor shall monitor amounts paid under Rule 12b-1 plans and pursuant to sales loads to ensure compliance with applicable FINRA rules.
|
A.
|
The Trust hereby represents and warrants to the Distributor, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
i.
|
it is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
ii.
|
this Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
|
iii.
|
it is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted;
|
iv.
|
there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement;
|
v.
|
all Shares to be sold by it, including those offered under this Agreement, are validly authorized and, when issued in accordance with the description in the Prospectus, will be fully paid and nonassessable;
|
vi.
|
the Registration Statement, and Prospectus included therein, have been prepared in conformity with the requirements of the 1933 Act and the 1940 Act and the rules and regulations thereunder; and
|
vii.
|
the Registration Statement (at the time of its effectiveness) and any advertisements and sales literature prepared by the Trust or its agent (excluding statements relating to the Distributor and the services it provides that are based upon written information furnished by the Distributor expressly for inclusion therein) shall not contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that all statements or information furnished to the Distributor pursuant to this Agreement shall be true and correct in all material respects.
|
B.
|
The Trust, or its agent, shall take or cause to be taken, all necessary action to register Shares of the Fund under the 1933 Act, qualify such shares for sale in such states as the Trust and the Distributor shall approve, and maintain an effective Registration Statement for such Shares in order to permit the sale of Shares as herein contemplated. The Trust authorizes the Distributor to use the Prospectus, in the form furnished to the Distributor from time to time, in connection with the sale of Shares.
|
C.
|
The Trust shall advise the Distributor promptly in writing:
|
i.
|
of any material correspondence or other communication by the Securities and Exchange Commission (the “
SEC
”) or its staff relating to the Fund, including requests by the SEC for amendments to the Registration Statement or Prospectus;
|
ii.
|
in the event of the issuance by the SEC of any stop-order suspending the effectiveness of the Registration Statement then in effect or the initiation of any proceeding for that purpose;
|
iii.
|
of the happening of any event which makes untrue any statement of a material fact made in the Prospectus or which requires the making of a change in such Prospectus in order to make the statements therein not misleading;
|
iv.
|
of all actions taken by the SEC with respect to any amendments to any Registration Statement or Prospectus, which may from time to time be filed with the SEC; and
|
v.
|
in the event that it determines to suspend the sale of Shares at any time in response to conditions in the securities markets or otherwise, or in the event that it determines to suspend the redemption of Shares at any time as permitted by the 1940 Act or the rules of the SEC, including any and all applicable interpretations of such by the staff of the SEC.
|
D.
|
The Trust shall notify the Distributor in writing of the states in which the Shares may be sold and shall notify the Distributor in writing of any changes to such information.
|
E.
|
The Trust shall file from time to time such amendments to its Registration Statement and Prospectus as may be necessary in order that its Registration Statement and Prospectus will not contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
|
F.
|
The Trust shall fully cooperate in the efforts of the Distributor to sell and arrange for the sale of Shares and shall make available to the Distributor a statement of each computation of net asset value. In addition, the Trust shall keep the Distributor fully informed of its affairs and shall provide to the Distributor, from time to time, copies of all information, financial statements and other papers that the Distributor may reasonably request for use in connection with the distribution of Shares, including without limitation, certified copies of any financial statements prepared for the Trust by its independent public accountants and such reasonable number of copies of the Prospectus and annual and interim reports to shareholders as the Distributor may request. The Trust shall forward a copy of any SEC filings, including the Registration Statement, to the Distributor within one business day of any such filings. The Trust and the Advisor represent that they will not use or authorize the use of any Communications with the Public unless and until such materials have been approved and authorized for use by the Distributor. Nothing in this Agreement shall require the sharing or provision of materials protected by privilege or limitation of disclosure, including any applicable attorney-client privilege or trade secret materials.
|
G.
|
The Trust has reviewed and is familiar with the provisions of FINRA Rule 2830(k) prohibiting directed brokerage. In addition, the Trust shall not enter into any agreement (whether orally or in writing) under which the Trust directs or is expected to direct its brokerage transactions (or any commission, markup or other payment from such transactions) to a broker or dealer for the promotion or sale of Fund Shares or the shares of any other investment company. In the event the Trust fails to comply with the provisions of FINRA Rule 2830(k), the Trust shall promptly notify the Distributor.
|
A.
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
B.
|
This Agreement has been duly authorized, executed and delivered by the Distributor in accordance with all requisite action and constitutes a valid and legally binding obligation of the Distributor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
|
C.
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement;
|
D.
|
It is registered as a broker-dealer under the 1934 Act and is a member in good standing of FINRA;
|
E.
|
It: (i) has adopted an anti-money laundering compliance program (“
AML Program
”) that satisfies the requirements of all applicable laws and regulations; (ii) undertakes to carry out its AML Program to the best of its ability; (iii) will promptly notify the Trust and the Advisor if an inspection by the appropriate regulatory authorities of its AML Program identifies any material deficiency; and (vi) will promptly remedy any material deficiency of which it learns; and
|
F.
|
In connection with all matters relating to this Agreement, it will comply with the requirements of the 1933 Act, the 1934 Act, the 1940 Act, the regulations of FINRA and all other applicable federal or state laws and regulations.
|
A.
|
The Distributor shall use its best judgment and reasonable efforts in rendering services to the Trust under this Agreement but shall be under no duty to take any action except as specifically set forth herein or as may be specifically agreed to by the Distributor in writing. The Distributor shall not be liable to the Trust or any of the Trust’s shareholders for any error of judgment or mistake of law, for any loss arising out of any investment, or for any action or inaction of the Distributor in the absence of bad faith or willful misfeasance in the performance of the Distributor’s duties or obligations under this Agreement or by reason of the Distributor’s reckless disregard of its duties and obligations under this Agreement
|
B.
|
The Distributor shall not be liable for any action taken or failure to act in good faith reliance upon:
|
|
i. |
the advice of the Trust or of counsel, who may be counsel to the Trust or counsel to the Distributor;
|
|
ii. |
any oral instruction which it receives and which it reasonably believes in good faith was transmitted by the person or persons authorized by the Board to give such oral instruction (the Distributor shall have no duty or obligation to make any inquiry or effort of certification of such oral instruction);
|
|
iii. |
any written instruction or certified copy of any resolution of the Board, and the Distributor may rely upon the genuineness of any such document or copy thereof reasonably believed in good faith by the Distributor to have been validly executed; or
|
iv. |
any signature, instruction, request, letter of transmittal, certificate, opinion of counsel, statement, instrument, report, notice, consent, order, or other document reasonably believed in good faith by the Distributor to be genuine and to have been signed or presented by the Trust or other proper party or parties; and the Distributor shall not be under any duty or obligation to inquire into the validity or invalidity or authority or lack thereof of any statement, oral or written instruction, resolution, signature, request, letter of transmittal, certificate, opinion of counsel, instrument, report, notice, consent, order, or any other document or instrument which the Distributor reasonably believes in good faith to be genuine.
|
C.
|
The Distributor shall not be responsible or liable for any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdowns, flood or catastrophe, epidemic, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply.
|
A.
|
The Trust shall bear all costs and expenses in connection with the registration of its Shares with the SEC and its related compliance with state securities laws, as well as all costs and expenses in connection with the offering of the Shares and communications with shareholders, including but not limited to: (i) fees and disbursements of its counsel and independent public accountants; (ii) costs and expenses of the preparation, filing, printing and mailing of Registration Statements and Prospectuses, as well as related advertising and sales literature; (iii) costs and expenses of the preparation, printing and mailing of annual and interim reports, proxy materials and other communications to shareholders; and (iv) fees required in connection with the offer and sale of Shares in such jurisdictions as shall be selected by the Trust pursuant to Section 3(D) hereof.
|
B.
|
The Distributor shall bear the expenses of registration or qualification of the Distributor as a dealer or broker under federal or state laws and the expenses of continuing such registration or qualification. The Distributor does not assume responsibility for any expenses not expressly assumed hereunder.
|
A.
|
The Trust shall indemnify, defend and hold the Distributor and each of its managers, officers, employees, representatives and any person who controls the Distributor within the meaning of Section 15 of the 1933 Act (collectively, the “
Distributor Indemnitees
”), free and harmless from and against any and all claims, demands, losses, expenses and liabilities of any and every nature (including reasonable attorneys’ fees) (collectively, “
Losses
”) that the Distributor Indemnitees may sustain or incur or that may be asserted against a Distributor Indemnitee by any person (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any Prospectus, or in any annual or interim report to shareholders, or in any advertisements or sales literature prepared by the Trust or its agent, or (ii) arising out of or based upon any omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) based upon the Trust’s refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement;
provided however that
the Trust’s obligation to indemnify the Distributor Indemnitees shall not be deemed to cover any Losses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, Prospectus, annual or interim report, or any advertisement or sales literature in reliance upon and in conformity with written information relating to the Distributor and furnished to the Trust or its counsel by the Distributor for the purpose of, and used in, the preparation thereof. The Trust’s agreement to indemnify the Distributor Indemnitees is expressly conditioned upon the Trust being notified of such action or claim of loss brought against the Distributor Indemnitees within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Distributor Indemnitees, unless the failure to give notice does not prejudice the Trust;
provided that
the failure so to notify the Trust of any such action shall not relieve the Trust from any liability which the Trust may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of the Trust’s indemnity agreement contained in this Section 8(A).
|
B.
|
The Trust shall be entitled to participate at its own expense in the defense, or if it so elects, to assume the defense of any suit brought to enforce any such Losses, but if the Trust elects to assume the defense, such defense shall be conducted by counsel chosen by the Trust and approved by the Distributor, which approval shall not be unreasonably withheld. In the event the Trust elects to assume the defense of any such suit and retain such counsel, the Distributor Indemnitees in such suit shall bear the fees and expenses of any additional counsel retained by them. If the Trust does not elect to assume the defense of any such suit, or in case the Distributor does not, in the exercise of reasonable judgment, approve of counsel chosen by the Trust, or if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both the Trust and the Distributor Indemnitees, the Trust will reimburse the Distributor Indemnitees for the reasonable fees and expenses of any counsel retained by them. The Trust’s indemnification agreement contained in Sections 8(A) and 8(B) herein shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Distributor Indemnitees and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of the Distributor Indemnitees and their successors. The Trust shall promptly notify the Distributor of the commencement of any litigation or proceedings against the Trust or any of its officers or trustees in connection with the offer and sale of any of the Shares.
|
C.
|
The Trust shall advance attorneys’ fees and other expenses incurred by any Distributor Indemnitee in defending any claim, demand, action or suit which is the subject of a claim for indemnification pursuant to this Section 8 to the maximum extent permissible under applicable law.
|
D.
|
The Distributor shall indemnify, defend and hold the Trust and each of its trustees, officers, employees, representatives and any person who controls the Trust within the meaning of Section 15 of the 1933 Act (collectively, the “
Trust Indemnitees
”), free and harmless from and against any and all Losses that the Trust Indemnitees may sustain or incur or that may be asserted against a Trust Indemnitee by any person (i) arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement or any Prospectus, or in any annual or interim report to shareholders, or in any advertisements or sales literature prepared by the Distributor, or (ii) arising out of or based upon any omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statement not misleading, or (iii) based upon the Distributor’s refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement;
provided however that
with respect to clauses (i) and (ii), above, the Distributor’s obligation to indemnify the Trust Indemnitees shall only be deemed to cover Losses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, Prospectus, annual or interim report, or any advertisement or sales literature in reliance upon and in conformity with written information relating to the Distributor and furnished to the Trust or its counsel by the Distributor for the purpose of, and used in, the preparation thereof. The Distributor’s agreement to indemnify the Trust Indemnitees is expressly conditioned upon the Distributor being notified of any action or claim of loss brought against the Trust Indemnitees within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Trust Indemnitees, unless the failure to give notice does not prejudice the Distributor;
provided that
the failure so to notify the Distributor of any such action shall not relieve the Distributor from any liability which the Distributor may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, otherwise than on account of the Distributor’s indemnity agreement contained in this Section 8(D).
|
E.
|
The Distributor shall be entitled to participate at its own expense in the defense, or if it so elects, to assume the defense of any suit brought to enforce any such Losses, but if the Distributor elects to assume the defense, such defense shall be conducted by counsel chosen by the Distributor and approved by the Trust, which approval shall not be unreasonably withheld. In the event the Distributor elects to assume the defense of any such suit and retain such counsel, the Trust Indemnitees in such suit shall bear the fees and expenses of any additional counsel retained by them. If the Distributor does not elect to assume the defense of any such suit, or in case the Trust does not, in the exercise of reasonable judgment, approve of counsel chosen by the Distributor, or if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both the Trust Indemnitees and the Distributor, the Distributor will reimburse the Trust Indemnitees for the reasonable fees and expenses of any counsel retained by them. The Distributor’s indemnification agreement contained in Sections 8(D) and 8(E) herein shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Trust Indemnitees and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of the Trust Indemnitees and their successors. The Distributor shall promptly notify the Trust of the commencement of any litigation or proceedings against the Distributor or any of its officers or directors in connection with the offer and sale of any of the Shares.
|
F.
|
The Distributor shall advance attorneys’ fees and other expenses incurred by any Trust Indemnitee in defending any claim, demand, action or suit which is the subject of a claim for indemnification pursuant to this Section 8 to the maximum extent permissible under applicable law.
|
G.
|
No party to this Agreement shall be liable to the other parties for consequential, special or punitive damages under any provision of this Agreement.
|
H.
|
No person shall be obligated to provide indemnification under this Section 8 if such indemnification would be impermissible under the 1940 Act, the 1933 Act, the 1934 Act or the rules of FINRA;
provided however that
, in such event indemnification shall be provided under this Section 8 to the maximum extent so permissible.
|
A.
|
This Agreement shall become effective with respect to each Fund listed on
Exhibit A
hereof as of the date hereof and, with respect to each Fund not in existence on that date, on the date an amendment to
Exhibit A
to this Agreement relating to that Fund is executed. Unless sooner terminated as provided herein, this Agreement shall continue in effect for two years from the date hereof. Thereafter, if not terminated, this Agreement shall continue in effect automatically as to each Fund for successive one-year periods, provided such continuance is specifically approved at least annually by: (i) the Trust’s Board, or (ii) the vote of a “majority of the outstanding voting securities” of a Fund, and
provided that
in either event, the continuance is also approved by a majority of the Trust’s Board who are not “interested persons” of any party to this Agreement, by a vote cast in person at a meeting called for the purpose of voting on such approval.
|
B.
|
Notwithstanding the foregoing, this Agreement may be terminated, without the payment of any penalty, with respect to a particular Fund: (i) through a failure to renew this Agreement at the end of a term, (ii) upon mutual consent of the parties, or (iii) upon not less than 60 days’ written notice, by either the Trust upon the vote of a majority of the members of its Board who are not “interested persons” of the Trust and have no direct or indirect financial interest in the operation of this Agreement, or by vote of a “majority of the outstanding voting securities” of a Fund, or by the Distributor. The terms of this Agreement shall not be waived, altered, modified, amended or supplemented in any manner whatsoever except by a written instrument signed by the Distributor and the Trust. If required under the 1940 Act, any such amendment must be approved by the Trust’s Board, including a majority of the Trust’s Board who are not “interested persons” of any party to this Agreement, by a vote cast in person at a meeting for the purpose of voting on such amendment. In the event that such amendment affects the Advisor, the written instrument shall also be signed by the Advisor. This Agreement will automatically terminate in the event of its “assignment.”
|
C.
|
As used in this Section, the terms “majority of the outstanding voting securities,” “interested person,” and “assignment” shall have the same meaning as such terms have in the 1940 Act.
|
D.
|
Sections 8 and 9 shall survive termination of this Agreement.
|
A.
|
all monthly fees through the life of the Agreement, including the repayment of any negotiated discounts;
|
B.
|
all fees associated with converting services to successor service provider;
|
C.
|
all fees associated with any record retention and/or tax reporting obligations that may not be eliminated due to the conversion to a successor service provider;
|
D.
|
all out-of-pocket costs associated with A-C above.
|
By: | By: |
Name: John J. Hedrick | Name: James R. Schoenike |
Title: President | Title: President |
§
|
$_____
per fund
|
§
|
$___ per communication piece for the first 10 pages (minutes if audio or video); $___per page (minute if audio or video) thereafter.
|
§
|
$___ FINRA filing fee per communication piece for the first 10 pages (minutes if audio or video); $___ per page (minute if audio or video) thereafter. FINRA filing fee subject to change. (FINRA filing fee may not apply to all communication pieces.)
|
§
|
$___ for the first 10 pages (minutes if audio or video); $___ per page (minute if audio or video) thereafter, 24 hour initial turnaround.
|
§
|
$___ FINRA filing
fee per communication piece for the first 10 pages (minutes if audio or video); $___ per page (minute if audio or video) thereafter. FINRA filing fee subject to change.
(FINRA filing fee may not apply to all communication pieces.)
|
§
|
$___ per year per registered representative
|
§
|
Quasar sponsors the following licenses: Series 6, 7, 24, 26, 27, 63, 66
|
§
|
$___ per FINRA designated branch location
|
§
|
All associated FINRA and state fees for registered representatives, including license and renewal fees
|
§
|
Design - $___ per fact sheet, includes first production
|
§
|
Production - $___ per fact sheet per each production period
|
§
|
All printing costs are out-of-pocket expenses in addition to the design and production fees
|
§
|
Web sites, third-party data provider costs, brochures, and other sales support materials – Project priced via Quasar proposal
|
§
|
Typesetting, printing and distribution of prospectuses and shareholder reports
|
§
|
Production, printing, distribution, and placement of advertising, sales literature, and materials
|
§
|
Engagement of designers, free-lance writers, and public relations firms
|
§
|
Postage, overnight delivery charges
|
§
|
FINRA registration fees/other costs to fulfill regulatory requirements
|
§
|
Record retention (Including RR email correspondence if applicable)
|
§
|
Travel, lodging, and meals
|
(a)
|
A copy of the Trust’s declaration of trust, certified by the Secretary;
|
(b)
|
A copy of the Trust’s bylaws, certified by the Secretary;
|
(c)
|
A copy of the resolution of the Board of Trustees of the Trust appointing the Custodian, certified by the Secretary;
|
(d)
|
A copy of the current prospectuses of each Fund (the “Prospectus”);
|
(e)
|
A certification of the Chairman or the President and the Secretary of the Trust setting forth the names and signatures of the current Officers of the Trust and other Authorized Persons; and
|
(f)
|
An executed authorization required by the Shareholder Communications Act of 1985, attached hereto as
Exhibit C
.
|
(a)
|
In its discretion, the Custodian may appoint one or more Sub-Custodians to establish and maintain arrangements with (i) Eligible Securities Depositories or (ii) Eligible Foreign Custodians who are members of the Sub-Custodian’s network to hold Securities and cash of the Fund and to carry out such other provisions of this Agreement as it may determine; provided, however, that the appointment of any such agents and maintenance of any Securities and cash of the Fund shall be at the Custodian's expense and shall not relieve the Custodian of any of its obligations or liabilities under this Agreement. The Custodian shall be liable for the actions of any Sub-Custodians (regardless of whether assets are maintained in the custody of a Sub-Custodian, a member of its network or an Eligible Securities Depository) appointed by it as if such actions had been done by the Custodian. If, after the initial appointment of Sub-Custodians by the Board of Trustees in connection with this Agreement, the Custodian wishes to appoint other Sub-Custodians to hold property of the Fund, it will so notify the Trust and make the necessary determinations as to any such new Sub-Custodian's eligibility under Rule 17f-5 under the 1940 Act.
|
(b)
|
In performing its delegated responsibilities as foreign custody manager to place or maintain the Fund’s assets with a Sub-Custodian, the Custodian will determine that the Fund’s assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Fund’s assets will be held by that Sub-Custodian, after considering all factors relevant to safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).
|
(c)
|
The agreement between the Custodian and each Sub-Custodian acting hereunder shall contain the required provisions set forth in Rule 17f-5(c)(2) under the 1940 Act.
|
(d)
|
At the end of each calendar quarter, the Custodian shall provide written reports notifying the Board of Trustees of the withdrawal or placement of the Securities and cash of the Fund with a Sub-Custodian and of any material changes in the Fund’s arrangements. Such reports shall include an analysis of the custody risks associated with maintaining assets with any Eligible Securities Depositories. The Custodian shall promptly take such steps as may be required to withdraw assets of the Fund from any Sub-Custodian arrangement that has ceased to meet the requirements of Rule 17f-5 or Rule 17f-7 under the 1940 Act, as applicable.
|
(e)
|
With respect to its responsibilities under this Section 3.3, the Custodian hereby warrants to the Trust that it agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of property of the Fund; provided, however, with respect to custody of any Loans, the Custodian’s responsibility shall be limited to the exercise of reasonable care by the Custodian in the physical custody of any such documents delivered to it, and any related instrument, security, credit agreement, assignment agreement and/or other agreements or documents, if any, that may be delivered to it. The Custodian further warrants that the Fund's assets will be subject to reasonable care if maintained with a Sub-Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation: (i) the Sub-Custodian's practices, procedures, and internal controls for certificated securities (if applicable), its method of keeping custodial records, and its security and data protection practices; (ii) whether the Sub-Custodian has the requisite financial strength to provide reasonable care for Fund assets; (iii) the Sub-Custodian's general reputation and standing and, in the case of a Securities Depository, the Securities Depository's operating history and number of participants; and (iv) whether the Fund will have jurisdiction over and be able to enforce judgments against the Sub-Custodian, such as by virtue of the existence of any offices of the Sub-Custodian in the United States or the Sub-Custodian's consent to service of process in the United States.
|
(f)
|
The Custodian shall establish a system or ensure that its Sub-Custodian has established a system to monitor on a continuing basis (i) the appropriateness of maintaining the Fund’s assets with a Sub-Custodian or Eligible Foreign Custodians who are members of a Sub-Custodian’s network; (ii) the performance of the contract governing the Fund’s arrangements with such Sub-Custodian or Eligible Foreign Custodian’s members of a Sub-Custodian’s network; and (iii) the custody risks of maintaining assets with an Eligible Securities Depository. The Custodian must promptly notify the Fund or its investment adviser of any material change in these risks.
|
(g)
|
The Custodian shall use commercially reasonable efforts to collect all income and other payments with respect to Foreign Securities to which the Fund shall be entitled and shall credit such income, as collected, to the Trust. In the event that extraordinary measures are required to collect such income, the Trust and Custodian shall consult as to the measures and as to the compensation and expenses of the Custodian relating to such measures.
|
(a)
|
The Trust shall deliver, or cause to be delivered, to the Custodian all of the Fund's Securities, cash and other investment assets, including (i) all payments of income, payments of principal and capital distributions received by the Fund with respect to such Securities, cash or other assets owned by the Fund at any time during the period of this Agreement, and (ii) all cash received by the Fund for the issuance of Shares. With respect to Loans, the Loan Documents and other underlying loan documents may be delivered to the Custodian at the address identified below in Section 15.08. With respect to assets other than Loans, such assets shall be delivered to the Custodian, and at the address identified below in Section 15.08. Except to the extent otherwise expressly provided herein, delivery of Securities to the Custodian shall be in Street Name or other good delivery form. The Custodian shall not be responsible for such Securities, cash or other assets until actually delivered to, and received by it.
|
(a)
|
The Custodian, on an on-going basis, shall deposit in a Securities Depository or Book-Entry System all Securities eligible for deposit therein and shall make use of such Securities Depository or Book-Entry System to the extent possible and practical in connection with its performance hereunder, including, without limitation, in connection with settlements of purchases and sales of Securities, loans of Securities, and deliveries and returns of collateral consisting of Securities.
|
(b)
|
Securities (other than Loans) of the Fund kept in a Book-Entry System or Securities Depository shall be kept in an account (“Depository Account”) of the Custodian in such Book-Entry System or Securities Depository which includes only assets held by the Custodian as a fiduciary, custodian or otherwise for customers.
|
(c)
|
The records of the Custodian with respect to Securities of the Fund maintained in a Book-Entry System or Securities Depository shall, by book-entry, identify such Securities (other than Loans) as belonging to the Fund.
|
(d)
|
If Securities purchased by the Fund are to be held in a Book-Entry System or Securities Depository, the Custodian shall pay for such Securities upon (i) receipt of advice from the Book-Entry System or Securities Depository that such Securities have been transferred to the Depository Account, and (ii) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Fund. If Securities sold by the Fund are held in a Book-Entry System or Securities Depository, the Custodian shall transfer such Securities upon (i) receipt of advice from the Book-Entry System or Securities Depository that payment for such Securities has been transferred to the Depository Account, and (ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Fund.
|
(e)
|
The Custodian shall provide the Trust with copies of any report (obtained by the Custodian from a Book-Entry System or Securities Depository in which Securities of the Fund are kept) on the internal accounting controls and procedures for safeguarding Securities deposited in such Book-Entry System or Securities Depository.
|
(f)
|
Notwithstanding anything to the contrary in this Agreement, the Custodian shall be liable to the Trust for any loss or damage to the Fund resulting from (i) the use of a Book-Entry System or Securities Depository by reason of any negligence or willful misconduct on the part of the Custodian or any Sub-Custodian, or (ii) failure of the Custodian or any Sub-Custodian to enforce effectively such rights as it may have against a Book-Entry System or Securities Depository. At its election, the Trust shall be subrogated to the rights of the Custodian with respect to any claim against a Book-Entry System or Securities Depository or any other person from any loss or damage to the Fund arising from the use of such Book-Entry System or Securities Depository, if and to the extent that the Fund has not been made whole for any such loss or damage.
|
(g)
|
With respect to its responsibilities under this Section 3.05 and pursuant to Rule 17f-4 under the 1940 Act, the Custodian hereby warrants to the Trust that it agrees to (i) exercise due care in accordance with reasonable commercial standards in discharging its duty as a securities intermediary to obtain and thereafter maintain such assets, (ii) provide, promptly upon request by the Trust, such reports as are available concerning the Custodian’s internal accounting controls and financial strength, and (iii) require any Sub-Custodian to exercise due care in accordance with reasonable commercial standards in discharging its duty as a securities intermediary to obtain and thereafter maintain assets corresponding to the security entitlements of its entitlement holders.
|
(a)
|
For the purchase of Securities for the Fund but only in accordance with Section 4.01 of this Agreement and only (i) in the case of Securities (other than options on Securities, futures contracts and options on futures contracts), against the delivery to the Custodian (or any Sub-Custodian) of such Securities registered as provided in Section 3.09 below or in proper form for transfer, or if the purchase of such Securities is effected through a Book-Entry System or Securities Depository, in accordance with the conditions set forth in Section 3.05 above; (ii) in the case of options on Securities, against delivery to the Custodian (or any Sub-Custodian) of such receipts as are required by the customs prevailing among dealers in such options; (iii) in the case of futures contracts and options on futures contracts, against delivery to the Custodian (or any Sub-Custodian) of evidence of title thereto in favor of the Fund or any nominee referred to in Section 3.09 below; and (iv) in the case of repurchase or reverse repurchase agreements entered into between the Trust and a bank which is a member of the Federal Reserve System or between the Trust and a primary dealer in U.S. Government securities, against delivery of the purchased Securities either in certificate form or through an entry crediting the Custodian's account at a Book-Entry System or Securities Depository with such Securities;
|
(b)
|
In connection with the conversion, exchange or surrender, as set forth in Section 3.07(f) below, of Securities owned by the Fund;
|
(c)
|
For the payment of any dividends or capital gain distributions declared by the Fund;
|
(d)
|
In payment of the redemption price of Shares as provided in Section 5.01 below;
|
(e)
|
For the payment of any expense or liability incurred by the Fund, including, but not limited to, the following payments for the account of the Fund: interest; taxes; administration, investment advisory, accounting, auditing, transfer agent, custodian, trustee and legal fees; and other operating expenses of the Fund; in all cases, whether or not such expenses are to be in whole or in part capitalized or treated as deferred expenses;
|
(f)
|
For transfer in accordance with the provisions of any agreement among the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a member of FINRA, relating to compliance with rules of the Options Clearing Corporation and of any registered national securities exchange (or of any similar organization or organizations) regarding escrow or other arrangements in connection with transactions by the Fund;
|
(g)
|
For transfer in accordance with the provisions of any agreement among the Trust, the Custodian and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any contract market (or any similar organization or organizations) regarding account deposits in connection with transactions by the Fund;
|
(h)
|
For the funding of any uncertificated time deposit or other interest-bearing account with any banking institution (including the Custodian), which deposit or account has a term of one year or less; and
|
(i)
|
For any other proper purpose, but only upon receipt of Proper Instructions, specifying the amount and purpose of such payment, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such payment is to be made.
|
(a)
|
Upon the sale of Securities for the account of the Fund but only against receipt of payment therefor in cash, by certified or cashiers check or bank credit;
|
(b)
|
In the case of a sale effected through a Book-Entry System or Securities Depository, in accordance with the provisions of Section 3.05 above;
|
(c)
|
To an offeror’s depository agent in connection with tender or other similar offers for Securities of the Fund; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;
|
(d)
|
To the issuer thereof or its agent (i) for transfer into the name of the Fund, the Custodian or any Sub-Custodian, or any nominee or nominees of any of the foregoing, or (ii) for exchange for a different number of certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new Securities are to be delivered to the Custodian;
|
(e)
|
To the broker selling the Securities, for examination in accordance with the “street delivery” custom;
|
(f)
|
For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the issuer of such Securities, or pursuant to provisions for conversion contained in such Securities, or pursuant to any deposit agreement, including surrender or receipt of underlying Securities in connection with the issuance or cancellation of depository receipts; provided that, in any such case, the new Securities and cash, if any, are to be delivered to the Custodian;
|
(g)
|
Upon receipt of payment therefor pursuant to any repurchase or reverse repurchase agreement entered into by the Fund;
|
(h)
|
In the case of warrants, rights or similar Securities, upon the exercise thereof, provided that, in any such case, the new Securities and cash, if any, are to be delivered to the Custodian;
|
(i)
|
For delivery in connection with any loans of Securities of the Fund, but only against receipt of such collateral as the Trust shall have specified to the Custodian in Proper Instructions;
|
(j)
|
For delivery as security in connection with any borrowings by the Fund requiring a pledge of assets by the Trust, but only against receipt by the Custodian of the amounts borrowed;
|
(k)
|
Pursuant to any authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Trust;
|
(l)
|
For delivery in accordance with the provisions of any agreement among the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a member of FINRA, relating to compliance with the rules of the Options Clearing Corporation and of any registered national securities exchange (or of any similar organization or organizations) regarding escrow or other arrangements in connection with transactions by the Fund;
|
(m)
|
For delivery in accordance with the provisions of any agreement among the Trust, the Custodian and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any contract market (or any similar organization or organizations) regarding account deposits in connection with transactions by the Fund;
|
(n)
|
For any other proper corporate purpose, but only upon receipt of Proper Instructions, specifying the Securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such Securities shall be made; or
|
(o)
|
To brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Custodian’s own negligence or willful misconduct.
|
(a)
|
Subject to Section 9.04 below, collect on a timely basis all income and other payments to which the Fund is entitled either by law or pursuant to custom in the securities business;
|
(b)
|
Present for payment and, subject to Section 9.04 below, collect on a timely basis the amount payable upon all Securities which may mature or be called, redeemed, or retired, or otherwise become payable;
|
(c)
|
Endorse for collection, in the name of the Fund, checks, drafts and other negotiable instruments;
|
(d)
|
Surrender interim receipts or Securities in temporary form for Securities in definitive form;
|
(e)
|
Execute, as custodian, any necessary declarations or certificates of ownership under the federal income tax laws or the laws or regulations of any other taxing authority now or hereafter in effect, and prepare and submit reports to the IRS and the Trust at such time, in such manner and containing such information as is prescribed by the IRS;
|
(f)
|
Hold for the Fund, either directly or, with respect to Securities held therein, through a Book-Entry System or Securities Depository, all rights and similar Securities issued with respect to Securities of the Fund; and
|
(g)
|
In general, and except as otherwise directed in Proper Instructions, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with Securities and other assets of the Fund.
|
(a)
|
The Custodian shall maintain complete and accurate records with respect to Securities, cash or other property held for the Fund, including (i) journals or other records of original entry containing an itemized daily record in detail of all receipts and deliveries of Securities and all receipts and disbursements of cash; (ii) ledgers (or other records) reflecting (A) Securities in transfer, (B) Securities in physical possession, (C) monies and Securities borrowed and monies and Securities loaned (together with a record of the collateral therefor and substitutions of such collateral), (D) dividends and interest received, and (E) dividends receivable and interest receivable; (iii) canceled checks and bank records related thereto; and (iv) all records relating to its activities and obligations under this Agreement. The Custodian shall keep such other books and records of the Fund as the Trust shall reasonably request, or as may be required by the 1940 Act, including, but not limited to, Section 31 of the 1940 Act and Rule 31a-2 promulgated thereunder.
|
(b)
|
All such books and records maintained by the Custodian shall (i) be maintained in a form acceptable to the Trust and in compliance with the rules and regulations of the SEC, (ii) be the property of the Trust and at all times during the regular business hours of the Custodian be made available upon request for inspection by duly authorized officers, employees or agents of the Trust and employees or agents of the SEC, and (iii) if required to be maintained by Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in Rules 31a-1 and 31a-2 under the 1940 Act.
|
(a)
|
Promptly upon each purchase of Securities (other than Loans) for the Fund, Written Instructions shall be delivered to the Custodian, specifying (i) the name of the issuer or writer of such Securities, and the title or other description thereof, (ii) the number of shares, principal amount (and accrued interest, if any) or other units purchased, (iii) the date of purchase and settlement, (iv) the purchase price per unit, (v) the total amount payable upon such purchase, and (vi) the name of the person to whom such amount is payable. The Custodian shall upon receipt of such Securities purchased by the Fund pay out of the moneys held for the account of the Fund the total amount specified in such Written Instructions to the person named therein. The Custodian shall not be under any obligation to pay out moneys to cover the cost of a purchase of Securities for the Fund, if in the Fund Custody Account there is insufficient cash available to the Fund for which such purchase was made.
|
(b)
|
(i) In connection with its acquisition of a Loan or other delivery of a Security constituting a Loan, the Trust shall deliver or cause to be delivered to the Custodian a properly completed Trade Confirmation containing such information in respect of such Loan as the Custodian may reasonably require in order to enable the Custodian to perform its duties hereunder in respect of such Loan on which the Custodian may conclusively rely without further inquiry or investigation, in such form and format as the Custodian reasonably may require, and may, but is not required, deliver to the Custodian the Loan Documents for all Loans, including the Loan Checklist.
|
|
(ii)
|
Notwithstanding anything herein to the contrary, delivery of Loans acquired by the Trust (or, if applicable, Subsidiary thereof) which constitute Noteless Loans or Participations or which are otherwise not evidenced by a “security” or “instrument” as defined in Section 8-102 and Section 9-102(a)(47) of the UCC, respectively, shall be made by delivery to the Custodian of (i) in the case of a Noteless Loan, a copy of the loan register with respect to such Noteless Loan evidencing registration of such Loan on the books and records of the applicable obligor or bank agent to the name of the Fund or, if applicable, a Subsidiary (or, in either case, its nominee) or a copy (which may be a facsimile copy) of an assignment agreement in favor of the Trust (or the applicable Subsidiary) as assignee, and (ii) in the case of a Participation, a copy of the related participation agreement. Any duty on the part of the Custodian with respect to the custody of such Loans shall be limited to the exercise of reasonable care by the Custodian in the physical custody of any such documents delivered to it, and any
related instrument, security, credit agreement, assignment agreement and/or other agreements or documents, if any
(collectively, “
Financing Documents
”), that may be delivered to it. Nothing herein shall require the Custodian to credit to the Securities Account or to treat as a financial asset (within the meaning of Section 8-102(a)(9) of the UCC) any such Loan or other asset in the nature of a general intangible (as defined in Section 9-102(a)(42) of the UCC) or to “maintain” a sufficient quantity thereof.
|
(iii)
|
The Custodian may assume the genuineness of any such Financing Document it may receive and the genuineness and due authority of any signatures appearing thereon, and shall be entitled to assume that each such Financing Document it may receive is what it purports to be.
If an original
“security” or “instrument” as defined in Section 8-102 and Section 9-102(a)(47) of the UCC, respectively,
is or shall be or become available with respect to any Loan to be held by the Custodian under this Agreement, it shall be the sole responsibility of the Trust (or Fund) to make or cause delivery thereof to the Custodian, and the Custodian shall not be under any obligation at any time to determine whether any such original security or instrument
has been or is required to be issued or made available in respect of any Loan or to compel or cause delivery thereof to the Custodian.
|
(iv)
|
Contemporaneously with the acquisition of any Loan, the
Trust
may (i) cause the Loan Documents evidencing such Loan to be delivered to the Custodian; (ii) if requested by the Custodian, provide to the Custodian an amortization schedule of principal payments and a schedule of the interest payable date(s) identifying the amount and due dates of all scheduled principal and interest payments for such Loan and (iii) a properly completed Trade Confirmation containing such information in respect of such Loan as the Custodian may reasonably require in order to enable the Custodian to perform its duties hereunder in respect of such Loan on which the Custodian may conclusively rely without further inquiry or investigation, in such form and format as the Custodian reasonably may require; (iv) take all actions reasonably necessary for the
Fund
to acquire good title to such Loan; and (v) take all actions as may be reasonably necessary (including appropriate payment notices and instructions to bank agents or other applicable paying agents) to cause (A) all payments in respect of the Loan to be made to the Custodian and (B) all notices, solicitations and other communications in respect of such Loan to be directed to the Trust. The Custodian shall have no liability for any delay or failure on the part of the
Trust
to provide necessary information to the Custodian, or for any inaccuracy therein or incompleteness thereof, or for any delay or failure on the part of the
Trust
to give such effective payment instruction to bank agents and other paying agents, in respect of the Loans. With respect to each such Loan, the Custodian shall be entitled to rely on any information and notices it may receive from time to time from the related bank agent, obligor or similar party with respect to the related Loan Asset, and shall be entitled to update its records (as it may deem necessary or appropriate), or from the Trust or Fund, on the basis of such information or notices received, without any obligation on its part independently to verify, investigate or recalculate such information.
|
(a)
|
in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a member of FINRA (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of the Options Clearing Corporation and of any registered national securities exchange (or the Commodity Futures Trading Commission or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Fund;
|
(b)
|
for purposes of segregating cash or Securities in connection with securities options purchased or written by the Fund or in connection with financial futures contracts (or options thereon) purchased or sold by the Fund;
|
(c)
|
which constitute collateral for loans of Securities made by the Fund;
|
(d)
|
for purposes of compliance by the Fund with requirements under the 1940 Act for the maintenance of segregated accounts by registered investment companies in connection with reverse repurchase agreements and when-issued, delayed delivery and firm commitment transactions; and
|
(e)
|
for other proper corporate purposes, but only upon receipt of Proper Instructions, setting forth the purpose or purposes of such segregated account and declaring such purposes to be proper corporate purposes.
|
(a)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
(b)
|
This Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
(c)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
(a)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
(b)
|
It is a U.S. Bank as defined in section (a)(7) of Rule 17f-5.
|
(c)
|
This Agreement has been duly authorized, executed and delivered by the Custodian in accordance with all requisite action and constitutes a valid and legally binding obligation of the Custodian, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
(d)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
(a)
|
Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.
|
(b)
|
The indemnity provisions of this Article shall indefinitely survive the termination and/or assignment of this Agreement.
|
(c)
|
In order that the indemnification provisions contained in this Article X shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification and will keep the indemnitor advised with respect to all developments concerning such claim. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this Article X. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor’s prior written consent. Upon request, the indemnitee shall provide reasonable assistance (at the indemnitors cost) to the indemnitor so that indemnitor may defend such claim.
|
SERIES PORTFOLIOS TRUST | U.S. BANK NATIONAL ASSOCIATION |
By: /s/ John J. Hedrick ______________ | By: /s/ Michael L. Ceccato ___________ |
|
|
Name: John J. Hedrick | Name: Michael L. Ceccato |
Title: President | Title: Vice President |
Authorized Persons
|
Specimen Signatures
|
|
______ YES
|
U.S. Bank is authorized to provide the Trust’s name, address and security position to requesting companies whose stock is owned by the Trust.
|
______ NO
|
U.S. Bank is NOT authorized to provide the Trust’s name, address and security position to requesting companies whose stock is owned by the Trust.
|
Name of Series | Date Added |
Weiss Alternative Balanced Risk Fund | on or after September 15, 2015 |
§
|
$__ – Book entry DTC transaction, Federal Reserve transaction, principal paydown
|
§
|
$__ – Repurchase agreement, reverse repurchase agreement, time deposit/CD or other non-depository transaction
|
§
|
$__ – Option/SWAPS/future contract written, exercised or expired
|
§
|
$__ – Mutual fund trade, Fed wire, margin variation Fed wire
|
§
|
$__ – Physical security transaction
|
§
|
$__ – Check disbursement (waived if U.S. Bancorp is Administrator)
|
§
|
Additional fees apply for global servicing.
|
§
|
Sub Advised Funds - $500 per custody account per year
|
§
|
$150.00 – Segregated account per year
|
§
|
No charge for the initial conversion free receipt.
|
§
|
Overdrafts – charged to the account at prime interest rate plus 2 unless a line of credit is in place.
|
§
|
1-25 foreign securities: $__
|
§
|
26-50 foreign securities: $__
|
§
|
Over 50 foreign securities: $__
|
§
|
Euroclear – Eurobonds only. Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge.
|
§
|
For all other markets specified above, surcharges may apply if a security is held outside of the local market.
|
§
|
Charges incurred by U.S. Bank, N.A. directly or through sub-custodians for local taxes, stamp duties or other local duties and assessments, stock exchange fees, foreign exchange transactions, postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees, proxy services and other shareholder communications or other expenses which are unique to a country in which the client or its clients is investing will be passed along as incurred.
|
§
|
A surcharge may be added to certain out-of-pocket expenses listed herein to cover handling, servicing and other administrative costs associated with the activities giving rise to such expenses. Also, certain expenses are charged at a predetermined flat rate.
|
§
|
SWIFT reporting and message fees.
|
1.
|
Appointment of USBFS as Administrator
|
2.
|
Services and Duties of USBFS
|
A.
|
General Fund Management:
|
(1)
|
Act as liaison among Fund service providers.
|
(2)
|
Supply:
|
a.
|
Corporate secretarial services.
|
b.
|
Office facilities (which may be in USBFS’, or an affiliate’s, own offices).
|
c.
|
Non-investment-related statistical and research data as needed.
|
(3)
|
Coordinate the Trust’s board of trustees’ (the “Board of Trustees” or the “Trustees”) communications, such as:
|
a.
|
Prepare meeting agendas and resolutions, with the assistance of Fund counsel.
|
b.
|
Prepare reports for the Board of Trustees based on financial and administrative data.
|
c.
|
Evaluate independent auditor.
|
d.
|
Secure and monitor fidelity bond and director and officer liability coverage, and make the necessary Securities and Exchange Commission (the “SEC”) filings relating thereto.
|
e.
|
Prepare minutes of meetings of the Board of Trustees and Fund shareholders.
|
f.
|
Recommend dividend declarations to the Board of Trustees and prepare and distribute to appropriate parties notices announcing declaration of dividends and other distributions to shareholders.
|
g.
|
Provide personnel to serve as officers of the Trust if so elected by the Board of Trustees. Attend Board of Trustees meetings and present materials for Trustees’ review at such meetings.
|
h.
|
Board of Trustees questionnaires.
|
(4)
|
Audits:
|
a.
|
Prepare appropriate schedules and assist independent auditors.
|
b.
|
Provide information to the SEC and facilitate audit process.
|
c.
|
Provide office facilities.
|
(5)
|
Assist in overall operations of the Fund.
|
(6)
|
Pay Fund expenses upon written authorization from the Trust.
|
(7)
|
Keep the Trust’s governing documents, including its charter, bylaws and minute books.
|
(8)
|
Monitor arrangements under shareholder services or similar plan.
|
(9)
|
Prepare plans, procedures, policies and amendments thereto as reasonably requested by the Trust.
|
B.
|
Compliance:
|
(1)
|
Regulatory Compliance:
|
a.
|
Monitor compliance with the 1940 Act requirements, including:
|
|
(i)
|
Asset diversification tests.
|
|
(ii)
|
Total return and SEC yield calculations.
|
|
(iii)
|
Maintenance of books and records under Rule 31a-3.
|
|
(iv)
|
Code of ethics requirements under Rule 17j-1 for the disinterested Trustees.
|
b.
|
Monitor Fund's compliance with the policies and investment limitations as set forth in its prospectus (the “Prospectus”) and statement of additional information (the “SAI”).
|
c.
|
Perform its duties hereunder in compliance with all applicable laws and regulations and provide any sub-certifications reasonably requested by the Trust in connection with any certification required of the Trust pursuant to the Sarbanes-Oxley Act of 2002 (the “SOX Act”) or any rules or regulations promulgated by the SEC thereunder, provided the same shall not be deemed to change USBFS’ standard of care as set forth herein.
|
d.
|
Monitor applicable regulatory and operational service issues, and update Board of Trustees periodically.
|
(2)
|
Blue Sky Compliance:
|
a.
|
Prepare and file with the appropriate state securities authorities any and all required compliance filings relating to the qualification of the securities of the Fund so as to enable the Fund to make a continuous offering of its shares in all states.
|
b.
|
Monitor status and maintain registrations in each state.
|
c.
|
Provide updates regarding material developments in state securities regulation.
|
(3)
|
SEC Registration and Reporting:
|
a.
|
Assist Fund counsel in annual update of the Prospectus and SAI and in preparation of proxy statements as needed.
|
b.
|
Prepare and file annual and semiannual shareholder reports, Form N-SAR, Form N-CSR, and Form N-Q filings and Rule 24f-2 notices. As requested by the Trust, prepare and file Form N-PX filings.
|
c.
|
Coordinate the printing, filing and mailing of Prospectuses, SAI’s and shareholder reports, and amendments and supplements thereto.
|
d.
|
File fidelity bond under Rule 17g-1.
|
e.
|
Monitor sales of Fund shares and ensure that such shares are properly registered or qualified, as applicable, with the SEC and the appropriate state authorities.
|
(4)
|
IRS Compliance:
|
a.
|
Monitor the Trust’s status as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), including without limitation, review of the following:
|
|
(i)
|
Asset diversification requirements.
|
|
(ii)
|
Qualifying income requirements.
|
|
(iii)
|
Distribution requirements.
|
b.
|
Calculate required distributions (including excise tax distributions).
|
C.
|
Financial Reporting:
|
(1)
|
Provide financial data required by the Prospectus and SAI.
|
(2)
|
Prepare financial reports for officers, shareholders, tax authorities, performance reporting companies, the Board of Trustees, the SEC, and independent accountants.
|
(3)
|
Supervise the Fund’s custodian and fund accountants in the maintenance of the Fund’s general ledger and in the preparation of the Fund’s financial statements, including oversight of expense accruals and payments, the determination of net asset value and the declaration and payment of dividends and other distributions to shareholders.
|
(4)
|
Compute the yield, total return, expense ratio and portfolio turnover rate of the Fund.
|
(5)
|
Monitor the expense accruals and notify the Trust’s management of any proposed adjustments.
|
(6)
|
Prepare quarterly financial statements, which include, without limitation, the following items:
|
a.
|
Schedule of Investments.
|
b.
|
Statement of Assets and Liabilities.
|
c.
|
Statement of Operations.
|
d.
|
Statement of Changes in Net Assets.
|
e.
|
Cash Statement.
|
f.
|
Schedule of Capital Gains and Losses.
|
(7)
|
Prepare quarterly broker security transaction summaries.
|
D.
|
Tax Reporting:
|
(1)
|
Prepare for the review of the independent accountants and/or Fund management the federal and state tax returns including
without limitation, Form 1120 RIC and applicable state returns including any necessary schedules. USBFS will prepare annual Fund federal and state income tax return filings as authorized by and based on the instructions received by Fund management and/or its independent accountant
file on a timely basis appropriate federal and state tax returns including, without limitation, Forms 1120/8613, with any necessary schedules.
|
(2)
|
Provide the Fund’s management and independent accountant with tax reporting information pertaining to the Fund and available to USBFS as required in a timely manner.
|
(3)
|
Prepare Fund financial statement tax footnote disclosures for the review and approval of Fund management and/or its independent accountant.
|
(4)
|
Prepare and file on behalf of Fund management Form 1099
MISC Forms for payments to disinterested Trustees and other qualifying service providers.
|
(5)
|
Monitor wash sale losses.
|
(6)
|
Calculate Qualified Dividend Income (“QDI”) for qualifying Fund shareholders.
|
3.
|
License of Data; Warranty; Termination of Rights
|
|
A
.
|
USBFS has entered into an agreement with MSCI index data services (“MSCI”), Standard & Poor Financial Services LLC (“S&P”), and FactSet Research Systems Inc. (“FACTSET”) which obligates USBFS to include a list of required provisions in this Agreement attached hereto as
Exhibit A
. The index data services being provided to the Trust by USBFS pursuant hereto (collectively, the “Data”) are being licensed, not sold, to the Trust. The provisions in
Exhibit A
shall not have any affect upon the standard of care and liability USBFS has set forth in Section 6 of this Agreement.
|
|
B.
|
The Trust agrees to indemnify and hold harmless USBFS, its information providers, and any other third party involved in or related to the making or compiling of the Data, their affiliates and subsidiaries and their respective directors, officers, employees and agents from and against any claims, losses, damages, liabilities, costs and expenses, including reasonable attorneys’ fees and costs, as incurred, arising in and any manner out of the Trust’s or any third party’s use of, or inability to use, the Data or any breach by the Trust of any provision contained in this Agreement. The immediately preceding sentence shall not have any effect upon the standard of care and liability of USBFS as set forth in Section 6 of this Agreement.
|
4.
|
Compensation
|
5.
|
Representations and Warranties
|
|
A.
|
The Trust hereby represents and warrants to USBFS, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
|
B.
|
USBFS hereby represents and warrants to the Trust, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by USBFS in accordance with all requisite action and constitutes a valid and legally binding obligation of USBFS, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
A.
|
USBFS shall exercise reasonable care in the performance of its duties under this Agreement. USBFS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS’ control, except a loss arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys’ fees) that USBFS may sustain or incur or that may be asserted against USBFS by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust, except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term “USBFS” shall include USBFS’ directors, officers and employees.
|
B.
|
In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification
and will keep the indemnitor advised with respect to all developments concerning such claim
. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor’s prior written consent.
Upon request, the indemnitee shall provide reasonable assistance (at the indemnitor’s cost) to the indemnitor so that indemnitor may defend such claim.
|
C.
|
The indemnity and defense provisions set forth in this Section 5 shall indefinitely survive the termination and/or assignment of this Agreement.
|
D.
|
If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.
|
E.
|
The obligations assumed by a particular Fund hereunder shall be limited in all cases to such Fund and to the assets of that Fund only.
|
F.
|
In conjunction with the tax services provided to each Fund by USBFS hereunder, USBFS shall not be
deemed to act as an income tax return preparer for any purpose including as such term is defined under Section 7701(a)(36) of the IRC, or any successor thereof. Any information provided by USBFS to a Fund for income tax reporting purposes with respect to any item of income, gain, loss, or credit will be performed solely in USBFS’ administrative capacity. USBFS shall not be required to determine, and shall not take any position with respect to whether, the reasonable belief standard described in Section 6694 of the IRC has been satisfied with respect to any income tax item. Each Fund, and any appointees thereof, shall have the right to inspect the transaction summaries produced and aggregated by USBFS, and any supporting documents thereto, in connection with the tax reporting services provided to each Fund by USBFS. USBFS shall not be liable for the provision or omission of any tax advice with respect to any information provided by USBFS to a Fund. The tax information provided by USBFS shall be pertinent to the data and information made available to us, and is neither derived from nor construed as tax advice.
|
SERIES PORTFOLIOS TRUST
|
U.S. BANCORP FUND SERVICES, LLC
|
By:
/s/ John J. Hedrick
|
By:
/s/ Michael L. Ceccato
|
Name: John J. Hedrick
|
Name: Michael L. Ceccato
|
Title: President | Title: Senior Vice President |
·
|
The Trust shall represent that it will use the Data solely for internal purposes and will not redistribute the Data in any form or manner to any third party.
|
·
|
The Trust shall represent that it will not use or permit anyone else to use the Data in connection with creating, managing, advising, writing, trading, marketing or promoting any securities or financial instruments or products, including, but not limited to, funds, synthetic or derivative securities (e.g., options, warrants, swaps, and futures), whether listed on an exchange or traded over the counter or on a private-placement basis or otherwise or to create any indices (custom or otherwise).
|
·
|
The Trust shall represent that it will treat the Data as proprietary to MSCI, S&P and FACTSET. Further, the Trust shall acknowledge that MSCI, S&P and FACTSET are the sole and exclusive owners of the Data and all trade secrets, copyrights, trademarks and other intellectual property rights in or to the Data.
|
·
|
The Trust shall represent that it will not (i) copy any component of the Data, (ii) alter, modify or adapt any component of the Data, including, but not limited to, translating, decompiling, disassembling, reverse engineering or creating derivative works, or (iii) make any component of the Data available to any other person or organization (including, without limitation, the Trust’s present and future parents, subsidiaries or affiliates) directly or indirectly, for any of the foregoing or for any other use, including, without limitation, by loan, rental, service bureau, external time sharing or similar arrangement.
|
·
|
The Trust shall be obligated to reproduce on all permitted copies of the Data all copyright, proprietary rights and restrictive legends appearing on the Data.
|
·
|
The Trust shall acknowledge that it assumes the entire risk of using the Data and shall agree to hold MSCI or S&P or FACTSET harmless from any claims that may arise in connection with any use of the Data by the Trust.
|
·
|
The Trust shall acknowledge that MSCI or S&P or FACTSET may, in its sole and absolute discretion and at any time, terminate USBFS’ right to receive and/or use the Data.
|
·
|
The Trust shall acknowledge that MSCI, S&P and FACTSET are third party beneficiaries of the Customer Agreement between S&P, MSCI, FACTSET and USBFS, entitled to enforce all provisions of such agreement relating to the Data.
|
Name of Series | Date Added | |
Weiss Alternative Balanced Risk Fund | on or after September 15, 2015 |
§
|
Additional fee of $__ for each additional class and/or for a Controlled Foreign Corporation (CFC)
|
§
|
Additional fee of $__ per manager/sub-advisor per fund
|
§
|
Additional fee of $__ for portfolios with more than 400 securities
|
§
|
Advisor Information Source – On-line access to portfolio management and compliance information.
|
§
|
Daily Performance Reporting – Daily pre and post-tax fund and/or sub-advisor performance reporting.
|
§
|
USBFS Legal Administration (e.g., registration statement update)
|
§
|
$__ - Domestic Equities, Options, ADRs, Foreign Equities
|
§
|
$__ - Domestic Corporates, Convertibles, Governments, Agencies, Futures, Options on Futures, Forwards, Currency Rates, Mortgage Backed
|
§
|
$__ - CMOs, Municipal Bonds, Money Market Instruments, Foreign Corporates, Convertibles, Governments, Agencies, Asset Backed, High Yield
|
§
|
$__ - Interest Rate Swaps, Foreign Currency Swaps, Total Return Swaps, Total Return Bullet Swaps
|
§
|
$__ - Bank Loans
|
§
|
$__ - Swaptions
|
§
|
$__ - Credit Default Swaps
|
§
|
$__ per Month Manual Security Pricing (>25per day)
|
§
|
$__ per security on the First 100 Securities
|
§
|
$__ per security on the Balance of Securities
|
§
|
$__ per Foreign Equity Security per Month
|
§
|
$__ per Domestic Equity Security per Month
|
§
|
$__ per CMOs, Asset Backed, Mortgage Backed Security per Month
|
§
|
$__ for the first fund (subject to Board approval)
|
§
|
$__ for each additional fund (subject to change based on Board review and approval)
|
§
|
$__ per sub-advisor per fund
|
§
|
$__ per security per month for fund administrative
|
§
|
Subsequent new fund launch – $__ per project
|
§
|
Subsequent new share class launch – $__ per project
|
§
|
Multi-managed funds – as negotiated based upon specific requirements
|
§
|
Proxy – as negotiated based upon specific requirements
|
§
|
Base fee – $__ per fund per year
|
§
|
Setup – $__ per fund group
|
§
|
$__ set up fee per fund complex
|
§
|
$__ per fund per month
|
§
|
$__ per fund per report – first class
|
§
|
$__ per additional class report
|
§
|
Fees are dependent upon portfolio makeup, services required, and benchmark requirements.
|
Weiss Multi-Strategy Advisers LLC
|
|
By:
/s/ Pierce Archer
|
Printed Name: Pierce Archer |
Title:
Senior Vice President
|
Date: 11/03/2015 |
1.
|
Appointment of USBFS as Fund Accountant
|
2.
|
Services and Duties of USBFS
|
A.
|
Portfolio Accounting Services:
|
(1)
|
Maintain portfolio records on a trade date+1 basis using security trade information communicated from the Fund’s investment adviser.
|
(2)
|
For each valuation date (with “valuation date” meaning the time at which a Fund’s net asset value is determined), obtain prices from a pricing source approved by the board of trustees of the Trust (the “Board of Trustees”) and apply those prices to the portfolio positions. For those securities where market quotations are not readily available, the Board of Trustees shall approve, in good faith, procedures for determining the fair value for such securities.
|
(3)
|
Identify interest and dividend accrual balances as of each valuation date and calculate gross earnings on investments for each accounting period.
|
(4)
|
Determine gain/loss on security sales and identify them as short-term or long-term; account for periodic distributions of gains or losses to shareholders and maintain undistributed gain or loss balances as of each valuation date.
|
(5)
|
On a daily basis, reconcile cash of the Fund with the Fund’s custodian.
|
(6)
|
As necessary, reconcile holdings and positions of the Fund with the Fund’s custodian.
|
(7)
|
Transmit a copy of the portfolio valuation to the Fund’s investment adviser daily.
|
(8)
|
Review the impact of current day’s activity on a per share basis, and review changes in market value.
|
B.
|
Expense Accrual and Payment Services:
|
(1)
|
For each valuation date, calculate the expense accrual amounts as directed by the Trust as to methodology, rate or dollar amount.
|
(2)
|
Process and record payments for Fund expenses upon receipt of written authorization from the Trust.
|
(3)
|
Account for Fund expenditures and maintain expense accrual balances at the level of accounting detail, as agreed upon by USBFS and the Trust.
|
(4)
|
Provide expense accrual and payment reporting.
|
C.
|
Fund Valuation and Financial Reporting Services:
|
(1)
|
Account for Fund share purchases, sales, exchanges, transfers, dividend reinvestments, and other Fund share activity as reported by the Fund’s transfer agent on a timely basis.
|
(2)
|
Apply equalization accounting as directed by the Trust.
|
(3)
|
Determine net investment income (earnings) for the Fund as of each valuation date. Account for periodic distributions of earnings to shareholders and maintain undistributed net investment income balances as of each valuation date.
|
(4)
|
Maintain a general ledger and other accounts, books, and financial records for the Fund in the form as agreed upon.
|
(5)
|
Determine the net asset value of the Fund according to the accounting policies and procedures set forth in the Fund's current prospectus.
|
(6)
|
Calculate per share net asset value, per share net earnings, and other per share amounts reflective of Fund operations at such time as required by the nature and characteristics of the Fund.
|
(7)
|
Communicate to the Trust, at an agreed upon time, the per share net asset value for each valuation date.
|
(8)
|
Report the per share net asset value for each valuation date to NASDAQ and as agreed with the Trust.
|
(9)
|
Prepare monthly reports that document the adequacy of accounting detail to support month-end ledger balances.
|
(10)
|
Prepare monthly security transactions listings.
|
D.
|
Tax Accounting Services:
|
(1)
|
Maintain accounting records for the investment portfolio of the Fund to support the tax reporting required for “regulated investment companies” under the Internal Revenue Code of 1986, as amended (the “Code”).
|
(2)
|
Maintain tax lot detail for the Fund’s investment portfolio.
|
(3)
|
Calculate taxable gain/loss on security sales using the tax lot relief method designated by the Trust.
|
(4)
|
Provide the necessary financial information to calculate the taxable components of income and capital gains distributions to support tax reporting to the shareholders.
|
E.
|
Compliance Control Services:
|
(1)
|
Support reporting to regulatory bodies and support financial statement preparation by providing accounting information as reasonably requested by the Trust and making the Fund's accounting records available to the Trust, the Securities and Exchange Commission (the “SEC”), and the independent accountants.
|
(2)
|
Maintain accounting records according to the 1940 Act and regulations provided thereunder.
|
(3)
|
Perform its duties hereunder in compliance with all applicable laws and regulations and provide any sub-certifications reasonably requested by the Trust in connection with any certification required of the Trust pursuant to the Sarbanes-Oxley Act of 2002 (the “SOX Act”) or any rules or regulations promulgated by the SEC thereunder, provided the same shall not be deemed to change USBFS’ standard of care as set forth herein.
|
(4)
|
Cooperate with the Trust’s independent accountants and take all reasonable action in the performance of its obligations under this Agreement to ensure that the necessary information is made available to such accountants for the expression of their opinion on the Fund’s financial statements without any qualification as to the scope of their examination.
|
3.
|
License of Data; Warranty; Termination of Rights
|
A.
|
The valuation information and evaluations being provided to the Trust by USBFS pursuant hereto (collectively, the “Data”) are being licensed, not sold, to the Trust. The Trust has a limited license to use the Data only for purposes necessary to valuing the Trust’s assets and reporting to regulatory bodies (the “License”). The Trust does not have any license nor right to use the Data for purposes beyond the intentions of this Agreement including, but not limited to, resale to other users or use to create any type of historical database. The License is non-transferable and not sub-licensable. The Trust’s right to use the Data cannot be passed to or shared with any other entity.
|
B.
|
THE TRUST HEREBY ACCEPTS THE DATA AS IS, WHERE IS, WITH NO WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR ANY OTHER MATTER.
|
C.
|
USBFS may use different suppliers to provide Data to the Trust if USBFS’ suppliers terminate any agreement to provide Data to USBFS. Also, USBFS may stop supplying some or all Data to the Trust if USBFS reasonably believes that the Trust is using the Data in violation of the License, or breaching its duties of confidentiality provided for hereunder, or if any of USBFS’ suppliers demand that the Data be withheld from the Trust. USBFS will provide notice to the Trust of any termination of provision of Data as soon as reasonably possible.
|
4.
|
Pricing of Securities
|
A.
|
For each valuation date, USBFS shall obtain prices from a pricing source recommended by USBFS and approved by the Board of Trustees and apply those prices to the portfolio positions of the Fund. For those securities where market quotations are not readily available, the Board of Trustees shall approve, in good faith, procedures for determining the fair value for such securities.
|
B.
|
In the event that the Trust at any time receives Data containing evaluations, rather than market quotations, for certain securities or certain other data related to such securities, the following provisions will apply: (i) evaluated securities are typically complicated financial instruments. There are many methodologies (including computer-based analytical modeling and individual security evaluations) available to generate approximations of the market value of such securities, and there is significant professional disagreement about which method is best. No evaluation method, including those used by USBFS and its suppliers, may consistently generate approximations that correspond to actual “traded” prices of the securities; (ii) methodologies used to provide the pricing portion of certain Data may rely on evaluations; however, the Trust acknowledges that there may be errors or defects in the software, databases, or methodologies generating the evaluations that may cause resultant evaluations to be inappropriate for use in certain applications; and (iii) the Trust assumes all responsibility for edit checking, external verification of evaluations, and ultimately the appropriateness of using Data containing evaluations, regardless of any efforts made by USBFS and its suppliers in this respect.
|
5.
|
Changes in Accounting Procedures
|
6.
|
Changes in Equipment, Systems, Etc.
|
7.
|
Compensation
|
8.
|
Representations and Warranties
|
A.
|
The Trust hereby represents and warrants to USBFS, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
B.
|
USBFS hereby represents and warrants to the Trust, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by USBFS in accordance with all requisite action and constitutes a valid and legally binding obligation of USBFS, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.
|
9.
|
Standard of Care; Indemnification; Limitation of Liability
|
A.
|
USBFS shall exercise reasonable care in the performance of its duties under this Agreement. Neither USBFS nor its suppliers shall be liable for any error of judgment or mistake of law or for any loss suffered by the Trust or any third party in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS’ control, except a loss arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS and its suppliers from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys’ fees) that USBFS or its suppliers may sustain or incur or that may be asserted against USBFS or its suppliers by any person arising out of or related to (X) any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust, or (Y) the Data, or any information, service, report, analysis or publication derived therefrom, except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term “USBFS” shall include USBFS’ directors, officers and employees.
|
B.
|
In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification
and will keep the indemnitor advised with respect to all developments concerning such claim
. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor’s prior written consent.
Upon request, the indemnitee shall provide reasonable assistance (at the indemnitor’s cost) to the indemnitor so that indemnitor may defend such claim.
|
C.
|
The indemnity and defense provisions set forth in this Section 9 shall indefinitely survive the termination and/or assignment of this Agreement.
|
D.
|
If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.
|
E.
|
The obligations assumed by a particular Fund hereunder shall be limited in all cases to such Fund and to the assets of that Fund only.
|
10.
|
Proprietary and Confidential Information
|
A.
|
USBFS agrees on behalf of itself and its directors, officers, and employees to treat confidentially and as proprietary information of the Trust, all records and other information relative to the Trust and prior, present, or potential shareholders of the Trust (and clients of said shareholders), and not to use such records and information for any purpose other than the performance of its responsibilities and duties hereunder, except (i) after prior notification to and approval in writing by the Trust, which approval shall not be unreasonably withheld and may not be withheld where USBFS may be exposed to civil or criminal contempt proceedings for failure to comply, (ii) when requested to divulge such information by duly constituted authorities, or (iii) when so requested by the Trust. Records and other information which have become known to the public through no wrongful act of USBFS or any of its employees, agents or representatives, and information that was already in the possession of USBFS prior to receipt thereof from the Trust or its agent, shall not be subject to this paragraph.
|
B.
|
The Trust, on behalf of itself and its trustees, officers, and employees, will maintain the confidential and proprietary nature of the Data and agrees to protect it using the same efforts, but in no case less than reasonable efforts, that it uses to protect its own proprietary and confidential information.
|
11.
|
Records
|
12.
|
Compliance with Laws
|
13.
|
Term of Agreement; Amendment
|
14.
|
Duties in the Event of Termination
|
15.
|
Assignment
|
16.
|
Governing Law
|
SERIES PORTFOLIOS TRUST
|
U.S. BANCORP FUND SERVICES, LLC
|
By:
/s/ John J. Hedrick
|
By:
/s/ Michael L. Ceccato
|
Name: John J. Hedrick
|
Name: Michael L. Ceccato
|
Title: President
|
Title: Senior Vice President
|
Name of Series
|
Date Added
|
|
Weiss Alternative Balanced Risk Fund
|
on or after September 15, 2015
|
§
|
Additional fee of $__ for each additional class and/or for a Controlled Foreign Corporation (CFC)
|
§
|
Additional fee of $__ per manager/sub-advisor per fund
|
§
|
Additional fee of $__ for portfolios with more than 400 securities
|
§
|
Advisor Information Source – On-line access to portfolio management and compliance information.
|
§
|
Daily Performance Reporting – Daily pre and post-tax fund and/or sub-advisor performance reporting.
|
§
|
USBFS Legal Administration (e.g., registration statement update)
|
§
|
$__ - Domestic Equities, Options, ADRs, Foreign Equities
|
§
|
$__ - Domestic Corporates, Convertibles, Governments, Agencies, Futures, Options on Futures, Forwards, Currency Rates, Mortgage Backed
|
§
|
$__ - CMOs, Municipal Bonds, Money Market Instruments, Foreign Corporates, Convertibles, Governments, Agencies, Asset Backed, High Yield
|
§
|
$__ - Interest Rate Swaps, Foreign Currency Swaps, Total Return Swaps, Total Return Bullet Swaps
|
§
|
$__ - Bank Loans
|
§
|
$__ - Swaptions
|
§
|
$__ - Credit Default Swaps
|
§
|
$__ per Month Manual Security Pricing (>25per day)
|
§
|
$__ per security on the First 100 Securities
|
§
|
$__ per security on the Balance of Securities
|
§
|
$__ per Foreign Equity Security per Month
|
§
|
$__ per Domestic Equity Security per Month
|
§
|
$__ per CMOs, Asset Backed, Mortgage Backed Security per Month
|
§
|
$__ for the first fund (subject to Board approval)
|
§
|
$__ for each additional fund (subject to change based on Board review and approval)
|
§
|
$__ per sub-advisor per fund
|
§
|
$1 per security per month for fund administrative
|
Weiss Multi-Strategy Advisers LLC
|
|
By:
/s/ Pierce Archer
|
Printed Name:
Pierce Archer
|
Title:
Senior Vice President
|
Date:
11/06/2015
|
1.
|
Appointment of USBFS as Transfer Agent
|
2.
|
Services and Duties of USBFS
|
A.
|
Receive and process all orders for the purchase, exchange, transfer and/or redemption of shares in accordance with Rule 22c-1 under the 1940 Act, other applicable regulations, and as specified in the Fund’s prospectus (the “Prospectus”).
|
B.
|
Process purchase and redemption orders with prompt delivery, where appropriate, of payment and supporting documentation to the shareholder based on the instruction provided or the Trust’s custodian, and record the appropriate number of shares being held in the appropriate shareholder account.
|
C.
|
Process redemption requests received in good order and, where relevant, deliver appropriate documentation to the Trust's custodian.
|
D.
|
Pay proceeds upon receipt from the Trust's custodian, where relevant, in accordance with the instructions of redeeming shareholders.
|
E.
|
Process transfers of shares in accordance with the shareholder's instructions, after receipt of appropriate documentation from the shareholder as specified in the Prospectus.
|
F.
|
Prepare and transmit payments, or apply reinvestments for dividends and distributions declared by the Trust with respect to the Fund, after deducting any amount required to be withheld by any applicable laws, rules and regulations and in accordance with shareholder instructions.
|
G.
|
Serve as the Fund’s agent in connection with systematic plans including but not limited to systematic investment plans, and systematic withdrawal plans and systematic exchange plans.
|
H.
|
Make changes to shareholder records, including, but not limited to, address and plan changes (e.g., systematic investment and withdrawal and dividend reinvestment).
|
I.
|
Handle load and multi-class processing, including rights of accumulation and purchases by letters of intent in accordance with the Fund prospectus.
|
J.
|
Record the issuance of shares of the Fund and maintain, pursuant to Rule 17Ad-10(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), a record of the total number of shares of the Fund which are authorized, issued and outstanding.
|
K.
|
Prepare ad-hoc reports as necessary at prevailing rates.
|
L.
|
Mail shareholder reports and Prospectuses to current shareholders.
|
M.
|
Prepare and file U.S. Treasury Department Forms 1099 and other appropriate information returns required with respect to dividends and distributions for all shareholders.
|
N.
|
Provide shareholder account information upon request and prepare and mail confirmations and statements of account to shareholders for all purchases, redemptions and other confirmable transactions as agreed upon with the Trust.
|
O.
|
Mail and/or obtain shareholders’ certifications under penalties of perjury and pay on a timely basis to the appropriate federal or state authorities any taxes to be withheld on dividends and distributions paid by the Trust, all as required by applicable federal tax laws and regulations.
|
P.
|
Answer correspondence from shareholders, securities brokers and others relating to USBFS’ duties hereunder within required time period established by applicable regulation.
|
Q.
|
Reimburse the Fund each month for all material losses resulting from “as of” processing errors for which USBFS is responsible in accordance with the “as of” processing guidelines set forth on
Exhibit A
hereto.
|
R.
|
Calculate average assets held in shareholder accounts for purposes of paying 12b-1 and/or shareholder servicing fees as directed by the Fund.
|
S.
|
Provide service and support to financial intermediaries including but not limited to trade placements, settlements and corrections.
|
T.
|
Provide personnel to respond to telephone inquiries from shareholders and prospective shareholders,
|
U.
|
Perform its duties hereunder in compliance with all applicable laws and regulations and provide any sub-certifications reasonably requested by the Trust in connection with any certification required of the Trust pursuant to the Sarbanes-Oxley Act of 2002 (the “SOX Act”) or any rules or regulations promulgated by the SEC thereunder, provided the same shall not be deemed to change USBFS’ standard of care as set forth herein.
|
3.
|
Additional Services to be Provided by USBFS
|
4.
|
Lost Shareholder Due Diligence Searches and Servicing
|
5.
|
Anti-Money Laundering and Red Flag Identity Theft Prevention Programs
|
(a)
|
Prompt written notification of any transaction or combination of transactions that USBFS believes, based on the Procedures, evidence money laundering or identity theft activities in connection with the Trust or any shareholder of the Fund;
|
(b)
|
Prompt written notification of any customer(s) that USBFS reasonably believes, based upon the Procedures, to be engaged in money laundering or identity theft activities, provided that the Trust agrees not to communicate this information to the customer;
|
(c)
|
Any reports received by USBFS from any government agency or applicable industry self-regulatory organization pertaining to USBFS’s anti-money laundering monitoring or the Red Flag Identity Theft Prevention Program on behalf of the Trust;
|
(d)
|
Prompt written notification of any action taken in response to anti-money laundering violations or identity theft activity as described in (a), (b) or (c); and
|
(e)
|
Certified annual and quarterly reports of its monitoring and customer identification activities on behalf of the Trust.
|
6.
|
Compensation
|
7.
|
Representations and Warranties
|
A.
|
The Trust hereby represents and warrants to USBFS, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement; and
|
|
(4)
|
A registration statement under the 1940 Act and the Securities Act of 1933, as amended, will be made effective prior to the effective date of this Agreement and will remain effective during the term of this Agreement, and appropriate state securities law filings will be made prior to the effective date of this Agreement and will continue to be made during the term of this Agreement as necessary to enable the Trust to make a continuous public offering of its shares.
|
B.
|
USBFS hereby represents and warrants to the Trust, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
|
|
(1)
|
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
|
|
(2)
|
This Agreement has been duly authorized, executed and delivered by USBFS in accordance with all requisite action and constitutes a valid and legally binding obligation of USBFS, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
|
|
(3)
|
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its charter, bylaws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement; and
|
|
(4)
|
It is a registered transfer agent under the Exchange Act.
|
8.
|
Standard of Care; Indemnification; Limitation of Liability
|
A.
|
USBFS shall exercise reasonable care in the performance of its duties under this Agreement. USBFS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS’ control, except a loss arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that USBFS may sustain or incur or that may be asserted against USBFS by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust (the “Board of Trustees”), except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS’ refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term “USBFS” shall include USBFS’ directors, officers and employees.
|
B.
|
In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification and will keep the indemnitor advised with respect to all developments concerning such claim. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor’s prior written consent. Upon request, the indemnitee shall provide reasonable assistance (at the indemnitor’s cost) to the indemnitor so that indemnitor may defend such claim.
|
C.
|
The indemnity and defense provisions set forth in this Section 8 shall indefinitely survive the termination and/or assignment of this Agreement.
|
D.
|
If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.
|
E.
|
The obligations assumed by a particular Fund hereunder shall be limited in all cases to such Fund and to the assets of that Fund only.
|
9.
|
Data Necessary to Perform Services
|
10.
|
Proprietary and Confidential Information
|
11.
|
Records
|
12.
|
Compliance with Laws
|
13.
|
Term of Agreement; Amendment
|
14.
|
Duties in the Event of Termination
|
15.
|
Assignment
|
16.
|
Governing Law
|
17.
|
No Agency Relationship
|
18.
|
Services Not Exclusive
|
19.
|
Invalidity
|
20.
|
Notices
|
21.
|
Rights and Obligations of Each Fund
|
22.
|
Multiple Originals
|
SERIES PORTFOLIOS TRUST | U.S. BANCORP FUND SERVICES, LLC |
By: /s/John J. Hedrick ________________ | By: /s/Michael L. Ceccato ____________ |
Name: John J. Hedrick | Name: Michael L. Ceccato |
Title: President | Title: Senior Vice President |
A.
|
“
MARS System
TM
” means the system made available through Sales Focus Solutions, a subsidiary of Phoenix American Incorporated, known as “MARS
TM
” which allows for analysis of sales data from the transfer agent or intermediaries which provides detail for omnibus account trades, identifies or reports suspicious trading activity and manages compliance related activities and reporting.
|
B.
|
“
Data Warehouse Services
” means the services which are made available to consenting end-users (“User,” as defined below) whereby certain Electronic Reports (as defined below) may be searched, viewed, downloaded and printed.
|
C.
|
“
User(s)
” means the person(s) to whom Electronic Reports are made available.
|
D.
|
“
Electronic Reports
” means an Electronic Report created with investor transaction data housed by DST (the Transfer Agent’s record keeping system) and may include but not be limited to: 22c-2 Compliance Reports, Omnibus Account Reconciliation, Sales Reporting, Platform Reporting and Campaign Management and Tracking.
|
|
The Trust shall:
|
|
A.
|
Assume exclusive responsibility for the consequences of any instructions it may give to USBFS, for the Trust’s or End Users’ failure to properly access the Electronic Reports in the manner prescribed by USBFS, and for the Trust’s failure to supply accurate information to USBFS.
|
|
B.
|
Comply and instruct Users to comply with all the User enrollment instructions and authorization procedures.
|
|
A.
|
The Trust acknowledges and agrees that by virtue of subscribing to
MARS
TM
and Data Warehouse Services through USBFS, it shall not obtain any rights in or to any of the
software, templates, screen and file formats, interface protocols, formats and development tools and instructions, hardware, processes, trade secrets, instruction manuals, enrollment authorization, authentication and other business processes, proprietary information or distribution and communication networks used to provide MARS
TM
and Data Warehouse Services owned by Sales Focus Solutions and licensed to USBFS.
Any interfaces and software provided to the Trust in order to provide connectivity to
MARS
TM
and Data Warehouse through USBFS shall be used by the Trust and Users only for the period during which this is in effect and only in accordance with the terms of this
Exhibit B
and shall not be used by the Trust to provide connectivity to or through any other system or person without USBFS’ prior written approval. The Trust shall not copy, decompile or reverse engineer any software or programs provided to the Trust hereunder. The Trust also agrees not to take any action which would mask, delete or otherwise alter any on-screen disclaimers and copyright, trademark and service mark notifications, or any “point and click” features relating to User acknowledgment and acceptance of such disclaimers and notifications.
|
|
B.
|
The MARS
TM
or DATA WAREHOUSE Services site may contain certain intellectual property, including, but not limited to, rights in copyrighted works, trademarks and trade dress that is the property of the Trust. The Trust retains all rights in such intellectual property that may reside on the MARS
TM
or Data Warehouse Services site, not including any intellectual property provided by or otherwise obtained from USBFS. To the extent the intellectual property of the Trust is cached to expedite communication, the Trust grants to USBFS a limited, non-exclusive, non-transferable license to such intellectual property for a period of time no longer than that reasonably necessary for the communication. To the extent that the intellectual property of the Trust is duplicated within the MARS
TM
or Data Warehouse Services site to replicate the “look and feel,” “trade dress” or other aspect of the appearance or functionality of the Fund’s web site(s), the Trust grants to USBFS a limited, non-exclusive, non-transferable license to such intellectual property for the period during which this is in effect. This license is limited to the intellectual property needed to replicate the appearance of the Fund’s web site(s) and does not extend to any other intellectual property owned by the Trust. The Trust warrants that it has sufficient right, title and interest in and to its web site(s) and its intellectual property to enter into these obligations, and that to its knowledge, the license hereby granted to USBFS does not and will not infringe on any U.S. patent, copyright or other proprietary right of a third party.
|
|
C.
|
Each party agrees that the nonbreaching party would not have an adequate remedy at law in the event of the other party’s breach or threatened breach of its obligations under this Section of this
Exhibit B
and that the nonbreaching party would suffer irreparable injury and damage as a result of any such breach. Accordingly, in the event either party breaches or threatens to breach the obligations set forth in this Section 7 of this
Exhibit B
, in addition to and not in lieu of any legal or other remedies a party may pursue hereunder or under applicable law, each party hereby consents to the granting of equitable relief (including the issuance of a temporary restraining order, preliminary injunction or permanent injunction) against it by a court of competent jurisdiction, without the necessity of proving actual damages or posting any bond or other security therefor, prohibiting any such breach or threatened breach. In any proceeding upon a motion for such equitable relief, a party’s ability to answer in damages shall not be interposed as a defense to the granting of such equitable relief. The provisions of this Section 7 relating to equitable relief shall survive termination of the provision of services set forth in this Exhibit B.
|
A.
|
USBFS CANNOT AND DOES NOT GUARANTEE AVAILABILITY OF MARS
TM
AND DATA WAREHOUSE SERVICES. Accordingly, USBFS’ sole liability to the Trust or any third party (including Users) for any claims, notwithstanding the form of such claims (e.g., contract, negligence, or otherwise), arising out of the delay of or interruption in MARS
TM
or Data Warehouse Services to be provided by USBFS hereunder shall be to use its best reasonable efforts to commence or resume MARS
TM
or Data Warehouse Services as promptly as is reasonably possible.
|
B.
|
USBFS shall, at its sole cost and expense, defend, indemnify, and hold harmless the Trust and it’s trustees, officers and employees from and against any and all claims, demands, losses, expenses, damages or liabilities of any and every nature, including reasonable attorneys’ fees, arising out of or relating to (a) any infringement, or claim of infringement, of any United States patent, trademark, copyright, trade secret, or other proprietary rights based on the use or potential use of MARS
TM
or Data Warehouse Services and (b) the provision of the Trust Files (as defined below) or Confidential Information (as defined below) to a person other than a person to whom such information may be properly disclosed hereunder.
|
C.
|
If an injunction is issued against the Trust’s and Users’ use of MARS
TM
or Data Warehouse Services by reason of infringement of a patent, copyright, trademark, or other proprietary rights of a third party, USBFS shall, at its own option and expense, either (i) procure for the Trust and Users the right to continue to use MARS
TM
or Data Warehouse Services on substantially the same terms and conditions as specified hereunder, or (ii) after notification to the Trust, replace or modify MARS
TM
or Data Warehouse Services so that they become non-infringing, provided that, in the Trust’s judgment, such replacement or modification does not materially and adversely affect the performance of MARS
TM
or Data Warehouse Services or significantly lessen their utility to the Trust and Users. If in the Trust’s judgment, such replacement or modification does materially adversely affect the performance of MARS
TM
or DATA Warehouse Services or significantly lessen their utility to the Trust and Users, the Trust may terminate all rights and responsibilities under this immediately on written notice to USBFS.
|
D.
|
Because the ability of USBFS to deliver MARS
TM
and Data Warehouse Services is dependent upon the Internet and equipment, software, systems, data and services provided by various telecommunications carriers, equipment manufacturers, firewall providers and encryption system developers and other vendors and third parties, including Sales Focus Solutions, USBFS shall not be liable for delays or failures to perform its obligations hereunder to the extent such delays or failures are attributable to circumstances beyond its reasonable control which interfere with the delivery of MARS
TM
and Data Warehouse Services by means of the Internet or any of the equipment, software and services which support the Internet provided by such third parties.
|
E.
|
The Trust and Users are responsible for verifying the accuracy and receipt of all data or information made available via MARS
TM
and Data Warehouse Services. The Trust is responsible for advising Users of their responsibilities to promptly notify USBFS of any errors or inaccuracies relating to data or other information made available via MARS
TM
and Data Warehouse Services with respect to the Trust’s shareholders.
|
F.
|
USBFS shall not be responsible for the accuracy of input material from Users and the Trust’s record-keeping systems maintained by third parties nor the resultant output derived from inaccurate input. The accuracy of input and output shall be judged as received at USBFS’ data center as determined by the records maintained by USBFS.
|
A.
|
USBFS and its agents will provide reasonable security provisions to ensure that unauthorized third parties do not have access to the Trust’s data bases, files, and other information provided by the Trust to USBFS for use with MARS
TM
and Data Warehouse Services, (collectively, the “Trust Files”). USBFS’s security provisions with respect to MARS
TM
and Data Warehouse Services and the Trust Files will be no less protected than USBFS’s security provisions with respect to its own proprietary information. USBFS agrees that any and all Trust Files maintained by USBFS for the Trust hereunder shall be available for inspection by the Trust’s regulatory authorities during regular business hours, upon reasonable prior written notice to USBFS, and will be maintained and retained in accordance with applicable requirements of the 1940 Act. In addition, USBFS will not use, or permit the use of, names of Users for the purpose of soliciting any business, product, or service whatsoever except where the communication is necessary and appropriate for USBFS’ delivery of MARS
TM
and Data Warehouse Services.
|
B.
|
USBFS shall treat as confidential and not disclose or otherwise make available any of the Trust’s lists, information, trade secrets, processes, proprietary data, information or documentation (collectively, the “Confidential Information”), in any form, to any person other than agents, employees or consultants of USBFS. USBFS will instruct its agents, employees and consultants who have access to the Confidential Information to keep such information confidential by using the same care and discretion that USBFS uses with respect to its own confidential property and trade secrets. Upon termination of the rights and responsibilities described in this for any reason and upon the Trust’s request, USBFS shall return to the Trust, or destroy and certify that it has destroyed, any and all copies of the Confidential Information which are in its possession.
|
|
C.
|
Notwithstanding the above, USBFS will not have an obligation of confidentiality under this Section with regard to information that (1) was known to it prior to disclosure hereunder, (2) is or becomes publicly available other than as a result of a breach hereof, (3) is disclosed to it by a third party not subject to a duty of confidentiality, or (4) is required to be disclosed under law or by order of court or governmental agency.
|
Name of Series | Date Added |
Weiss Alternative Balanced Risk Fund | on or after September 1, 2015 |
Annual Service Charges to the Fund* | ||
■ | Base Fee for 1st CUSIP | $___ per year |
■ | Additional CUSIP Fee | $___ per year |
■ | NSCC Level 3 Accounts | $___ per open account |
■ | No-Load Fund Accounts | $___ per open account |
■ | Load Fund Accounts | $___ per open account |
■ | Closed Accounts | $___ per closed account |
■
|
Telephone Calls
|
■
|
Voice Response Calls
|
■
|
Manual Shareholder Transaction & Correspondence
|
■
|
Omnibus Account Transaction
|
■
|
Daily Valuation/Manual 401k Trade
|
■
|
Report Source - Client on-line access to fund and investor data. Includes set up and 2 user Ids.
|
■
|
NSCC System Interface
|
■
|
Short-Term Trader Reporting - Software application used to track and/or assess transaction fees that are determined to be short-term trades.
|
■
|
Excessive Trader - Software application that monitors the number of trades (exchanges, redemptions) that meet fund family criteria for excessive trading and automatically prevents trades in excess of the fund family parameters.
|
■
|
12b-1 Aging - Aging shareholder account share lots in order to monitor and begin assessing 12b-1 fees after a certain share lot age.
|
■
|
CUSIP Setup beyond the initial CUSIP - $___ per CUSIP
|
■
|
Expedited CUSIP Setup - $___ per CUSIP (Less than 35 days)
|
§
|
FAN Web Premium (Fund Groups over 50,000 open accounts)
|
−
|
Implementation - $___ per fund group – includes up to 25 hours of technical/BSA support
|
−
|
Annual Base Fee - $___ per year
|
§
|
FAN Web Select (Fund Groups under 50,000 open accounts)
|
−
|
Implementation - $___ per fund group – includes up to 10 hours of technical/BSA support
|
−
|
Annual Base Fee - $___ per year
|
§
|
FAN Web Direct (API) – Quoted Separately
|
§
|
Customization - $___ per hour – (subject to change at prevailing rates of vendor)
|
§
|
Activity (Session) Fees:
|
−
|
Inquiry - $___ per event
|
−
|
Account Maintenance - $___ per event
|
−
|
Transaction – Financial transactions, reorder statements, etc. - $___ per event
|
−
|
New Account Setup - $___ per event (Not available with FAN Web Select)
|
§
|
Strong Authentication:
|
−
|
$___ per month per active FAN Web ID (Any ID that has had activity within the 180-day period prior to the billing cycle)
|
§
|
FAN Web Premium (Fund Groups over 50,000 open accounts)
|
§
|
Implementation – - $___ per fund group – includes up to 90 hours of technical/BSA support
|
§
|
Annual Base Fee - $___ per year
|
§
|
FAN Web Select (Fund Groups under 50,000 open accounts)
|
−
|
Implementation – $___ per fund group – includes up to 45 hours of technical/BSA support
|
−
|
Annual Base Fee - $___ per year
|
§
|
Customization - $___ per hour - (subject to change at prevailing rates of vendor)
|
§
|
Activity (Session) Fees:
|
§
|
Strong Authentication:
|
−
|
$___ per month per active FAN Web ID (Any ID that has had activity within the 180-day period prior to the billing cycle)
|
§
|
Base Fee Per Management Company – file generation and delivery - $___ per year
|
§
|
Per Record Charge
|
−
|
Rep/Branch/ID - $___
|
−
|
Dealer - $___
|
§
|
Price Files - $___ per record or $___ per user per month, whichever is less
|
§
|
Inquiry Only
|
−
|
Inquiry - $___ per event
|
−
|
Per broker ID - $___ per month per ID
|
§
|
Transaction Processing
|
-
|
$___ per Email
|
§
|
BDS – Statement Storage & Retrieval
|
§
|
Report and Data File Storage & Retrieval
|
§
|
Ad Hoc per PowerSelect File Development
|
§
|
Internet VPN
– Infrastructure to allow for application accessibility to host systems and file transfers
|
§
|
Physical Network
– Infrastructure to allow for application accessibility to host systems and file transfers
|
§
|
TA2000 3270 Emulation (Mainframe Green Screen)
– Account inquiry and ability to perform financial transactions or account maintenance depending upon user access.
|
§
|
TA2000 Desktop (Graphic User Interface to the TA2000 Mainframe)
– Account inquiry and ability to perform financial transactions or account maintenance depending upon user access provisioning.
|
§
|
TA2000 SmartDesk (Web Application to TA2000 Mainframe)
– Account inquiry only.
|
§
|
Automated Work Distributor (AWD)
– Image and workflow application.
|
§
|
Same Day Cash Management (SDCM)
– Fund level transaction and cash reporting.
|
§
|
PowerSelect
– SQL database used for ad hoc reporting from the shareholder recordkeeping system.
|
§
|
$___ per hour
|
§
|
Charges incurred for customized services based upon fund family requirements including but not limited to:
|
§
|
On-site at USBFS - $___ per day
|
§
|
At Client Location - $___ per day plus travel and out-of-pocket expenses if required
|
§
|
$___ per direct open account per year
|
§
|
$___ setup per fund group
|
§
|
$___ per month administration
|
§
|
$___ per received email correspondence
|
§
|
$___ per fund group per month
|
§
|
Account Management/Database Administration
|
§
|
Inbound Teleservicing Only
|
§
|
Lead Source Reporting
|
§
|
Closed Loop Reporting
|
§
|
$___ per monthly report
|
§
|
$___ per qualified plan account or Coverdell ESA account (Cap at $___ per SSN)
|
§
|
$___ per transfer to successor trustee
|
§
|
$___ per participant distribution (Excluding SWPs)
|
§
|
$___ per refund of excess contribution
|
§
|
$___ per reconversion/re-characterization
|
§
|
$___ per outgoing wire transfer or overnight delivery
|
§
|
$___ per telephone exchange
|
§
|
$___ per return check or ACH or stop payment
|
§
|
$___ per research request per account (This fee applies to requests for statements older than the prior year)
|
§
|
$___ setup per fund group
|
§
|
$___ per certificate transaction
|
§
|
Implementation (one time charge) & Recurring Charges (monthly)
|
§
|
Training
|
§
|
Real Time Data Feeds
|
Series of Series Portfolios Trust
|
Maximum Shareholder Servicing Fee
|
|
Weiss Alternative Balanced Risk Fund
|
||
Class A Shares
|
0.10% of average daily net assets
|
|
Class C Shares
|
0.10% of average daily net assets
|
|
Class I Shares
|
0.10% of average daily net assets
|
SERIES PORTFOLIOS TRUST
|
WEISS MULTI-STRATEGY ADVISERS LLC
|
By:
/s/John J. Hedrick
|
By:
/s/Pierce Archer
|
Print Name: John J. Hedrick
|
Print Name: Pierce Archer
|
Title: President, Principal
|
Title: Senior Vice President
|
Executive Officer |
Fund and Share Class
|
Operating Expense Limit
|
Weiss Alternative Balanced Risk Fund
|
|
Class A
|
2.50%
|
Class C
|
3.15%
|
Class I
|
2.25%
|
Class K
|
2.15%
|
2.
|
RULE 12B-1 AGREEMENTS
|
Series of Series Portfolios Trust
|
12b-1 Fee
|
|
Weiss Alternative Balanced Risk Fund
|
||
Class A
|
0.25% of average daily net assets
|
|
Class C
|
0.75% of average daily net assets
|
|
Series of Series Portfolios Trust
|
12b-1 Fee
|
|
Weiss Alternative Balanced Risk Fund
|
||
Class A Shares
|
0.25% of average daily net assets
|
|
Class C Shares
|
0.75% of average daily net assets
|
1.
|
Front-end sales charges or CDSCs;
|
2.
|
Rule 12b-1 plan distribution fees and shareholder servicing fees, if applicable to a particular Class;
|
3.
|
Transfer agency and other recordkeeping costs to the extent allocated to a particular Class;
|
4.
|
SEC and blue sky registration fees incurred separately by a particular Class;
|
5.
|
Litigation or other legal expenses relating solely to a particular Class;
|
6.
|
Printing and postage expenses related to the preparation and distribution of Class specific materials such as shareholder reports, prospectuses and proxies to shareholders of a particular Class;
|
7.
|
Expenses of administrative personnel and services as required to support the shareholders of a particular Class;
|
8.
|
Audit or accounting fees or expenses relating solely to a particular Class;
|
9.
|
Trustee fees and expenses incurred as a result of issues relating solely to a particular Class; and
|
10.
|
Any other expenses, excluding advisory or custodial fees or other expenses related to the management of a Fund’s assets, subsequently identified that should be properly allocated to a particular Class, which shall be approved by the Trust’s Board of Trustees (the “Board”) and a majority of the trustees of the Board who are not interested trustees (each, a “Disinterested Trustee”).
|
Fund
|
Maximum
Initial
Sales
Charge
|
Contingent
Deferred
Sales
Charge
|
Maximum
Annual
Rule 12b-1
Distribution
Fee
|
Maximum
Annual
Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Weiss Alternative Balanced Risk Fund
|
5.50%
|
1.00%
(1)
|
0.25%
|
0.10%
|
Yes
|
None
|
1.00% / 90 days
|
(1) A 1.00% contingent deferred sales charge is generally imposed on Class A purchases of $1 million or more that are redeemed within 18 months after purchase.
|
Fund
|
Maximum
Initial
Sales
Charge
|
Contingent
Deferred
Sales
Charge
|
Maximum
Annual
Rule 12b-1
Distribution
Fee
|
Maximum
Annual
Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Weiss Alternative Balanced Risk Fund
|
None
|
1.00%
(1)
|
0.75%
|
0.25%
|
None
|
None
|
1.00% / 90 days
|
(1) A 1.00% CDSC will be imposed on Class C shares redeemed within 12 months of purchase.
|
Fund
|
Maximum
Initial
Sales
Charge
|
Contingent
Deferred
Sales
Charge
|
Maximum
Annual
Rule 12b-1
Distribution
Fee
|
Maximum
Annual
Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Weiss Alternative Balanced Risk Fund
|
None
|
None
|
None
|
0.10%
|
None
|
None
|
1.00% / 90 days
|
(1) A 1.00% CDSC will be imposed on Class C shares redeemed within 12 months of purchase.
|
Fund
|
Maximum
Initial
Sales
Charge
|
Contingent
Deferred
Sales
Charge
|
Maximum
Annual
Rule 12b-1
Distribution
Fee
|
Maximum
Annual
Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Weiss Alternative Balanced Risk Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
1.00% / 90 days
|
(1) A 1.00% CDSC will be imposed on Class C shares redeemed within 12 months of purchase.
|
1.
|
BACKGROUND
|
2.
|
KEY DEFINITIONS
|
(i)
|
any director, officer, general partner or key investment personnel of the Trust or of an investment adviser to the Trust;
|
(ii)
|
any supervised person of an investment adviser to the Trust who has access to nonpublic information regarding the portfolio holdings of any series of the Trust (a “Fund”), or who is involved in making securities recommendations for a Fund; and
|
(iii)
|
any director, officer, or general partner of a principal underwriter who has knowledge of the investment activities of a series of the Trust. The Fund Compliance Officer (defined below) will notify an employee if that person fits the above definition and maintain a list of all Access Persons (see Appendix 2)
|
a)
|
employ any device, scheme or artifice to defraud a Fund;
|
b)
|
make any untrue statement of a material fact to a Fund or omit to state a material fact necessary in order to make the statements made to a Fund, in light of the circumstances under which they are made, not misleading;
|
c)
|
to engage in any act, practice or course of business that operates or would operate as a fraud or deceit on a Fund; or
|
d)
|
to engage in any manipulative practice with respect to a Fund.
|
a)
|
INITIAL HOLDINGS REPORT. Within ten days of becoming an Access Person (and the information must be current as of no more than 45 days prior to becoming an Access Person), each Access Person must report the following information:
|
1.
|
The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Covered Security and/or Reportable Fund in which the Access Person had any direct or indirect beneficial ownership when the person became an Access Person;
|
2.
|
The name of any broker, dealer or bank with whom the Access Person maintained an account in which any securities were held for the direct or indirect benefit of the Access Person; and
|
3.
|
The date the report is submitted by the Access Person.
|
b)
|
QUARTERLY TRANSACTION REPORTS. Within thirty days of the end of each calendar quarter, each Access Person must report the following information:
|
1.
|
With respect to any transaction during the quarter in a Covered Security and/or Reportable Fund in which the Access Person had any direct or indirect beneficial ownership:
|
i.
|
The date of the transaction, the title, and as applicable, the exchange ticker symbol or CUSIP, the interest rate and maturity date, the number of shares and the principal amount of each Covered Security and/or Reportable Fund involved;
|
ii.
|
The nature of the transaction (i.e., purchase, sale);
|
iii.
|
The price of the Covered Security and/or Reportable Fund at which the transaction was effected;
|
iv.
|
The name of the broker, dealer or bank with or through which the transaction was effected; and
|
v.
|
The date that the report is submitted by the Access Person.
|
2.
|
With respect to any account established by the Access Person in which any securities were held during the quarter for the direct or indirect benefit of the Access Person:
|
i.
|
The name of the broker, dealer or bank with whom the Access Person established the account;
|
ii.
|
The date the account was established; and
|
iii.
|
The date that the report is submitted by the Access Person.
|
c)
|
ANNUAL HOLDINGS REPORTS. Each year, the Access Person must report the following information (and the information must be current as of no more than 45 days prior to the date of the report):
|
1.
|
The date of the transaction, the title, and as applicable, the exchange ticker symbol or CUSIP, the interest rate and maturity date, the number of shares and the principal amount of each Covered Security and/or Reportable Fund involved;
|
2.
|
The name of any broker, dealer or bank with whom the Access Person maintains an account in which any securities were held for the direct or indirect benefit of the Access Person; and
|
3.
|
The date the report is submitted by the Access Person.
|
6.
|
EXCEPTIONS TO REPORTING REQUIREMENTS
|
a.
|
PRINCIPAL UNDERWRITER. An Access Person of a Fund’s principal underwriter is not required to make any Reports under Section 5 above if the principal underwriter:
|
1.
|
is not an affiliated person of the Trust or any investment adviser to a Fund.
|
2.
|
has no officer, director or general partner who serves as an officer, director or general partner of the Trust or of any investment adviser to a Fund.
|
b.
|
INDEPENDENT TRUSTEE. A trustee of the Trust who is not an “interested person” of the Trust within the meaning of Section 2(a)(19) of the Investment Company Act (an “Independent Trustee”) is not required to:
|
1.
|
file an INITIAL HOLDINGS REPORT or ANNUAL HOLDINGS REPORT; and
|
2.
|
file a QUARTERLY TRANSACTION REPORT, unless the Independent Trustee knew, or, in the ordinary course of fulfilling his or her official duties as a trustee, should have known that during a 15 day period immediately before or after his or her transaction in a Covered Security, that a Fund purchased or sold the Covered Security, or a Fund or its investment adviser considered purchasing or selling the Covered Security.
|
7.
|
ADMINISTRATION OF THE CODE OF ETHICS - REPORTING VIOLATIONS AND CERTIFYING COMPLIANCE
|
a.
|
Each Fund Organization must use reasonable diligence and institute policies and procedures reasonably necessary to prevent its Access Persons from violating this Code of Ethics;
|
b.
|
Each Fund Compliance Officer shall circulate the Code of Ethics and receive an acknowledgement from each Access Person that the Code of Ethics has been read and understood;
|
c.
|
Each Fund Compliance Officer shall compare all Reports with completed and contemplated portfolio transactions of a Fund to determine whether a possible violation of the Code of Ethics and/or other applicable trading policies and procedures may have occurred.
|
d.
|
On an annual basis, each Fund Compliance Officer shall prepare a written report describing any issues arising under the Code of Ethics or procedures, including information about any material violations of the Code of Ethics or its underlying procedures and any sanctions imposed due to such violations and submit the information to the Compliance Officer for review by the Board; and
|
e.
|
On an annual basis, each Fund Organization shall certify to the Board of Trustees that it has adopted procedures reasonably necessary to prevent its Access Persons from violating the Code of Ethics.
|
8.
|
COMPLIANCE WITH OTHER SECURITIES LAWS
|
9.
|
PROHIBITED TRADING PRACTICES
|
a.
|
No Access Person may purchase or sell directly or indirectly, any security in which he or she has, or by reason of such transactions acquires, any direct or indirect beneficial ownership if such security to his or her actual knowledge at the time of such purchase or sale:
|
i.
|
is being considered for purchase or sale by a Fund;
|
ii.
|
is in the process of being purchased or sold by a Fund (except that an access person may participate in a bunched transaction with the Fund if the price terms are the same in accordance with trading policies and procedures adopted by the Fund Organization); or
|
iii.
|
is or has been held by a Fund within the most recent 15 day period.
|
b.
|
Investment Personnel of a Fund or its investment adviser must obtain approval from the Fund or the Fund’s investment adviser before directly or indirectly acquiring beneficial ownership in any securities in an IPO or Limited Offering.
|
c.
|
No Access Person may trade ahead of a Fund - a practice known as “frontrunning.”
|
10.
|
SANCTIONS
|
11.
|
RECORD RETENTION
|
·
|
A copy of each Trust Code of Ethics that is in effect, or at any time within the past five years was in effect, must be maintained in an easily accessible place;
|
·
|
A record of any violation of the Trust’s Code of Ethics, and of any action taken as a result of the violation, must be maintained in an easily accessible place for at least five years;
|
·
|
A copy of each report made by an Access Person, as required by the Trust’s Code of Ethics, must be maintained for at least five years, the first two years in an easily accessible place;
|
·
|
A record of all persons, currently or within the past five years, who are or were required to make reports under the Trust’s Code of Ethics, or who are or were responsible for reviewing these reports, must be maintained in an easily accessible place;
|
·
|
A copy of each report required by section 7(d) and section 7(e) of the Trust’s Code of Ethics must be maintained for at least five years, the first two years in an easily accessible place; and
|
·
|
A record of any decision, and the reasons supporting the decision, to approve the acquisition by investment personnel of the securities described in section 9(b) of the Trust’s Code of Ethics, for at least five years after the end of the year in which the approval is granted.
|
Name
|
Title
|
Acknowledgement
Of Receipt of
Code of Ethics
|
Is this person also an
investment
Personnel
|
|
Name and Type of Covered Security and/or Reportable Fund
|
Ticker Symbol or CUSIP
|
Number of Shares or Principal Amount
|
|
Name of Institution and Account Holder’s Name(i.e., you, spouse, child)
|
Account
Number
|
Have you requested duplicate statements?
|
|
Name and Title of Covered Security and/or Reportable Fund
|
Ticker Symbol or CUSIP
|
Broker
|
Number of
Shares or Interest Rate, Maturity Date & Principal Amount
|
Nature of Transaction
(i.e., buy, sale)
|
Purchase
Price
|
Date of Transaction
|
|
Name of Institution and Account Holder’s Name
(i.e., you, spouse, child)
|
Account
Number
|
Have you requested duplicate statements?
|
|
|
1.
|
TRANSACTIONS
|
Name and Type of Covered Security and/or Reportable Fund
|
Ticker Symbol or CUSIP
|
Number of Shares or Principal Amount
|
|
2.
|
BROKERAGE ACCOUNTS OPENED DURING QUARTER
|
Name of Institution and Account Holder’s Name(i.e., you, spouse, child)
|
Account
Number
|
Have you requested duplicate statements?
|
Code of Ethics for Access Persons
|
I.
|
Definitions
|
A.
|
“Access Person” means any director, officer or employee of the Underwriter who in the ordinary course of his or her business makes, participates in or obtains non-public information regarding the purchase or sale of securities for a Fund, or the portfolio holdings of a fund, or whose functions or duties as part of the ordinary course of his or her business relate to the making of any recommendation to a Fund regarding the purchase or sale of securities.
|
B.
|
“Act” means the Investment Company Act of 1940, as amended.
|
C.
|
“Beneficial ownership” shall be interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, except that the determination of direct or indirect beneficial ownership shall apply to all securities which an Access Person has or acquires. As a general matter, “beneficial ownership” will be attributed to an Access Person in all instances where the person (i) possesses the ability to purchase or sell the security (or the ability to direct the disposition of the security); (ii) possesses the voting power (including the power to vote or to direct the voting) over such security; or (iii) receives any benefits substantially equivalent to those of ownership.
|
·
|
securities held in the person’s own name;
|
·
|
securities held with another in joint tenancy, as tenants in common, or in other joint ownership arrangements;
|
·
|
securities held by a bank or broker as a nominee or custodian on such person’s behalf or pledged as collateral for a loan;
|
·
|
securities held by members of the person’s immediate family sharing the same household (“immediate family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships);
|
1 |
·
|
securities held by a relative not residing in the person’s home if the person is a custodian, guardian, or otherwise has controlling influence over the purchase, sale, or voting of such securities;
|
·
|
securities held by a trust for which the person serves as a trustee and in which the person has a pecuniary interest (including pecuniary interests by virtue of performance fees and by virtue of holdings by the person’s immediate family);
|
·
|
securities held by a trust in which the person is a beneficiary and has or shares the power to make purchase or sale decisions;
|
·
|
securities held by a general partnership or limited partnership in which the person is a general partner; and
|
·
|
securities owned by a corporation which is directly or indirectly controlled by, or under common control with, such person.
|
D.
|
“Compliance Officer” means the person designated from time to time by the Underwriter to receive and review reports in accordance with Section VI below.
|
E.
|
“Control” shall have the same meaning as that set forth in Section 2(a)(9) of the Act. As a general matter, “control” means the power to exercise a controlling influence. The “power to exercise a controlling influence” is intended to include situations where there is less than absolute and complete domination and includes not only the active exercise of power, but also the latent existence of power. Anyone who beneficially owns, either directly or through one or more controlled entities, more than 25% of the voting securities of an entity shall be presumed to control such entity.
|
F.
|
“Fund” means an investment fund registered under the Act that has retained Quasar Distributors, LLC as its principal underwriter.
|
G.
|
“Purchase or sale of a security” includes, among other things, the writing of an option to purchase or sell a security.
|
H.
|
“Restricted List” means a list of securities that from time to time are not to be acquired by Access Persons and which list will be maintained by the Underwriter.
|
I.
|
“Covered Security” shall have the meaning set forth in Section 2(a)(36) of the Act and shall include: common stocks, preferred stocks, and debt securities; options on and warrants to purchase common stocks, preferred stocks or debt securities; and shares of closed-end investment companies and Related Securities. “Related Securities” are instruments and securities that are related to, but not the same as, a security. For example, a Related Security may be convertible into a security, or give its holder the right to purchase the security. The term “Security” also includes private investments, including oil and gas ventures, real estate syndicates and other investments which are not publicly traded. It shall not include shares of registered open-end investment companies; direct obligations of the Government of the United States; bankers’ acceptances, bank certificates of deposit, commercial paper, repurchase agreements, and such other money market instruments as designated by the Underwriter’s Board of Directors.
|
J.
|
“Underwriter” means Quasar Distributors, LLC.
|
II.
|
General Fiduciary Principles
|
A.
|
to at all times place the interests of Fund shareholders ahead of personal interests;
|
B.
|
to conduct all personal securities transactions consistent with this Code of Ethics and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility;
|
2 |
C.
|
to not take inappropriate advantage of their positions; and
|
D.
|
to comply with all applicable federal and state securities laws.
|
III.
|
Exempted Transactions
|
A.
|
Purchases or sales of securities which are not eligible for purchase or sale by any Fund;
|
B.
|
Purchases or sales which are non-volitional on the part of either the Access Person or a Fund;
|
C.
|
Purchases which are part of an automatic dividend reinvestment plan;
|
D.
|
Purchases effected upon the exercise of rights issued by an issuer
pro
rata
to all holders of a class of its securities, to the extent such rights were acquired from such issuer and sales of such rights so acquired;
|
E.
|
Purchases or sales which receive the prior approval of the President of the Underwriter, after consultation with the Compliance Officer, because they are only remotely harmful to the Underwriter or a Fund; they would be very unlikely to affect a highly institutional market; or they clearly are not related economically to the securities to be purchased, sold or held by a Fund.
|
IV.
|
Prohibited Activities and Conduct
|
A.
|
No Access Person shall purchase or sell any securities which were purchased or sold by the Fund within seven (7) days of the purchase or sale of the security by the Fund.
|
B.
|
No Access Person shall sell any security which was originally purchased within the previous sixty (60) days.
|
C.
|
No Access Person shall acquire any securities in an initial public offering or limited offering
|
D.
|
No Access Person shall acquire securities pursuant to a private placement without prior approval from the Underwriter’s President after consultation with the Compliance Officer. In determining whether approval should be granted, the following should be considered:
|
·
|
whether the investment opportunity should be reserved for a Fund and its shareholders; and
|
·
|
whether the opportunity is being offered to an individual by virtue of his/her position with the Underwriter.
|
E.
|
No Access Person shall profit from the purchase and sale, or sale and purchase, of the same, or equivalent, securities within sixty (60) calendar days unless the security is purchased and sold by a Fund within sixty (60) calendar days and the Access Person complies with Section IV(B). For purposes of applying the 60-day period, securities will be subject to this 60-day short-term trading ban only if the actual lot was purchased and sold, or sold and purchased, within such period. Any profits realized on such short-term trades must be disgorged by the Access Person; provided, however, that the Underwriter’s Board of Managers may make exceptions to this prohibition on a case-by-case basis in situations where no abuse is involved, and the equities strongly support an exception.
|
F.
|
No Access Person shall receive any gift or other thing of more than de minimis value from any person or entity that does business with or on behalf of the Underwriter. Such prohibition shall not apply to seasonal gifts made generally available to all employees at the Underwriter’s business office or to meals and/or entertainment provided in the ordinary course of business and consistent in cost with the Underwriter’s standards for employee expenditures.
|
3 |
G.
|
No Access Person shall serve on the board of directors of publicly traded companies, unless the access person receives prior authorization from the Underwriter’s Board of Managers based upon a determination that the board service would be consistent with the interests of the Underwriter. In the event the board service is authorized, Access Persons serving as directors must be isolated from those making investment decisions by a “Chinese wall.”
|
H.
|
No Access Person shall employ any device, scheme or artifice to defraud the Fund.
|
I.
|
No Access Person shall make any untrue statement of a material fact to the Fund or omit to state a material fact necessary in order to make the statements made to the Fund, in light of the circumstances under which they are made, not misleading.
|
J.
|
No Access Person shall engage in any act, practice or course of business that operates or would operate as a fraud or deceit on the Fund.
|
K.
|
No Access Person shall engage in any manipulative practice with respect to the Fund.
|
V.
|
Policy on Security Ownership
|
VI.
|
Access Person Reporting
|
A.
|
All securities transactions in which an Access Person has a direct or indirect beneficial ownership interest will be monitored by the Compliance Officer. The Compliance Officer’s compliance with this Code of Ethics shall be monitored by the Underwriter’s President.
|
B.
|
Every Access Person shall, at least on a quarterly basis, report to the Compliance Officer the information described in Section VI(C) of this Code of Ethics with respect to the transactions and accounts in which such Access Person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership; provided, however, that an Access Person shall not be required to make a report with respect to transactions effected for any account over which such person does not have any direct or indirect influence or control.
|
C.
|
Quarterly Transaction Reports. Every report required to be made by Sections VI(B) and VI(C) of this Code of Ethics shall be made not later than thirty (30) days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information:
|
|
Reports containing personal securities transacations;
|
·
|
The date of the transaction, the title an type of the security, and as applicable, the exchange ticker symbol or CUSIP number, the interest rate and maturity date, the number of shares, and the principal amount of each security involved;
|
·
|
The nature of the transaction (
i.e.
, purchase, sale or any other type of acquisition or disposition);
|
·
|
The price at which the transaction was effected;
|
·
|
The name of the broker, dealer or bank with or through whom the transaction was effected; and
|
4 |
·
|
The date that the report is submitted by the Access Person.
|
Reports by Access Persons having zero transactions
|
·
|
Individual transaction information reporting obligations may be met by forwarding a duplicate confirmation to the Compliance Officer.
|
·
|
The report shall also contain the following information with respect to any account established by an Access Person or other beneficial account during the quarter:
|
a)
|
The name of the broker, dealer or bank with whom the Access Person established the account;
|
b)
|
The date the account was established; and
|
c)
|
The date that the report is submitted by the Access Person
.
|
D.
|
Initial Holdings and Annual Reports. In addition to the reporting requirements of Sections VI(B), and VI(C), every Access Person shall also disclose to the Compliance Officer all beneficial securities holdings within ten calendar days after becoming an Access Person (and the information must be current as of no more than forty-five (45) days prior to becoming an Access Person) and thereafter on an annual basis (for Annual Reports the information must be current as of a date no more than forty-five (45) days prior to the date of the Report). Such disclosures shall be made on the form attached hereto as
Appendix 3
. Each such Access Person also shall sign an acknowledgment, attached hereto as
Appendix 4
, to affirm that they have received and reviewed this Code of Ethics and any amendments hereto.
|
E.
|
Any report filed pursuant to this Section VI may contain a statement that the report shall not be construed as an admission by the person making such report that he has any direct or indirect beneficial ownership in the security to which the report relates.
|
F.
|
In addition to the reporting requirements of Sections VI(B), VI(C) and VI(D), every Access Person shall direct his or her brokers to supply to the Compliance Officer, on a timely basis, duplicate copies of all beneficial securities transactions and copies of periodic statements for all securities accounts in which such Access Person has a beneficial ownership interest. Attached hereto as
Appendix 2
is a form of letter that may be used to request such documents from the respective broker, dealer, or bank. It is the responsibility of the Access Person to make sure that his or her broker does in fact send to the Compliance Officer the duplicate confirmations and the duplicate statements. The attached forms, confirmations and statements will be maintained in strictest confidence in the files of the Compliance Officer.
|
G.
|
Every Access Person subject to the Code shall report any violations of the Code to the firm’s Chief Compliance Officer or a designee.
|
H.
|
All information supplied under these procedures, including transaction and holdings reports (initial, quarterly and annual reports), will be reviewed by the Compliance Officer for compliance with these policies and procedures. The Compliance Officer will review all account statements and reports within 30 days after receipt. Such review shall:
|
|
Address whether Access Persons followed internal procedures, such as pre-clearance;
|
|
Compare Access Person transactions to any restrictions in effect at the time of the trade, including securities on the Restricted List; and
|
|
Periodically analyze the Access Person’s overall trading for patterns that may indicate abuse.
|
VII.
|
Advance Clearance
|
A.
|
Advance clearance is required for all securities transactions in which an Access Person has or as a result of such transaction will have a beneficial ownership interest, excluding (i) transactions exempt under Sections III(B) and III(C), provided the Access Person is not advised of the transactions in advance and does not participate in the decision-making related thereto or transactions exempt under Sections III(D). A form provided for advance clearance is attached hereto as
Appendix 5
.
|
5 |
B.
|
Advance clearance requests should be submitted in writing in duplicate to the Compliance Officer who may approve or disapprove such transactions on the grounds of compliance with this Code of Ethics or otherwise. Approval shall only be given when the compliance officer or designee giving it has determined that the intended transaction does not fall within any of the prohibitions in this Code of Ethics. One copy of the advance clearance request will be returned to the Access Person showing approval or disapproval and one copy will be retained by the Compliance Officer.
|
C.
|
The authorization provided by the Compliance Officer is effective until the earlier of (i) its revocation, (ii) the close of business on the third trading day after the authorization is granted (for example, if authorization is provided on a Monday, it is effective until the close of business on Thursday), or (iii) the Access Person learns that the information in the advance clearance request is not accurate. If the order for the securities transaction is not placed within that period, a new advance authorization must be obtained before the transaction is placed. If the transaction is placed but has not been executed within three trading days after the day the authorization is granted (as, for example, in the case of a limit order), no new authorization is necessary unless the person placing the original order amends it in any way.
|
VIII.
|
Insider Trading
|
IX.
|
Compliance with the Code of Ethics
|
A.
|
The Compliance Officer shall identify each Access Person and notify them of their reporting obligations under the Code. The Compliance Officer shall maintain a list of all Access Persons of the Underwriter in substantially the form set forth in
Appendix 6
.
|
B.
|
All Access Persons shall certify annually in the form attached hereto as
Appendix 7
that:
|
·
|
They have read and understand this Code of Ethics and any amendments hereto and recognize that they are subject thereto; and
|
·
|
They have complied with the requirements of this Code of Ethics and any amendments and disclosed or reported all personal securities transactions and accounts required to be disclosed or reported pursuant thereto.
|
C.
|
The Underwriter’s compliance officer, President, or other designee shall prepare a quarterly report to the Fund’s Board of Directors, and an annual report to the Underwriter’s Board of Managers, which shall:
|
·
|
Summarize existing procedures concerning personal investing and any changes in the procedures made during the past quarter (year);
|
·
|
Identify any violations requiring significant remedial action during the past quarter (year); and
|
·
|
Identify any recommended changes in existing restrictions or procedures based upon the Underwriter’s experience under this Code of Ethics, evolving industry practices or developments in laws or regulations; and
|
·
|
Identify any exceptions to the Code of Ethics that were granted during the past quarter (year).
|
6 |
X.
|
Recordkeeping Requirements
|
·
|
This Code of Ethics;
|
·
|
Records of each Code violation and of any action taken as a result of the violation;
|
·
|
Copies of each Access Person report;
|
·
|
Record of all Access Persons subject to the Code; and
|
·
|
Copies of annual compliance reports.
|
XI.
|
Sanctions
|
XII.
|
Other Procedures
|
7 |
ACCESS PERSON TRANSACTION RECORD for | (Name) | |
FOR CALENDAR QUARTER ENDED | (Date) |
Check if applicable:
|
( )
|
I had no reportable transactions during the quarter.
|
|
( )
|
All transactions required to be reported have been provided to the Compliance Officer through duplicate confirmations and statements.
|
Date |
Secuity
Name
|
Ticker Symbol or
CUSIP Number
|
Nature of
Transaction
|
Price
|
Broker
Name
|
o | I did not open any securities account with any broker, dealer or bank during the quarter; or |
o | I opened a securities account with a broker, dealer or bank during the quarter as indicated below. |
o | There have been no securities accounts in which I have no direct or indirect beneficial interest with any broker, dealer or bank open during the quarter. |
Date Account
Was Established
|
Broker, Dealer or Bank
Name
|
Date:
|
X: | (Access Person's Signature) |
Compliance Officer Use Only
REVIEWED:
|
|||
(Date) |
(Signature)
|
FOLLOW-UP ACTION (if any) (attach additional sheet if required) | ||
9 |
10 |
(7)
|
For each account, if not previously provided to the Compliance Officer, attach the most recent account statement listing securities in that account. If you have a beneficial interest in securities that are not listed in an attached account statement, list them below:
|
Title/Name of Security | Number of Shares | Value/Principal Amount | Broker-dealer or bank |
Access Person's Signature
|
|||
Dated: |
Print Name
|
11 |
|
1.
|
In accordance with Section VI of the Code of Ethics, I will report all required securities transactions and securities accounts in which I have a beneficial interest.
|
|
2.
|
I will comply with the Code of Ethics in all other respects.
|
Access Person's Signature
|
|||
Dated: |
Print Name
|
12 |
Access Person Signature: | |||
Date: |
Approved:
¨
No:
¨
Compliance Officer Signature:
|
|
||
Date: |
13 |
Name | Status |
Date Added
|
|||
14 |
|
1.
|
I have read and I understand the Code of Ethics and any amendments and I recognize that I am subject thereto for the periods that they are in effect.
|
|
2.
|
I have read and I understand any amendments to the Code of Ethics and any amendments.
|
|
3.
|
In accordance with Section VI of the Code of Ethics, I have reported all securities transactions and securities accounts in which I have a beneficial interest, except to the extent disclosed on the attached schedule if applicable and any amendments.
|
|
4.
|
I have complied with the Code of Ethics and any amendments in place during the year.
|
Access Person's Signature
|
|||
Dated: |
Print Name
|
15 |