Filed with the Securities and Exchange Commission on November 5, 2015

1933 Act Registration File No.  333-206240
1940 Act File No. 811- 23084
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM N-1A
 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[
 
]
Pre-Effective Amendment No.
1
 
[
  X
]
Post-Effective Amendment No.
      [  
]
 
and/or
 
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[
 
]
Amendment No.
1
 
[
 X
]
 
(Check appropriate box or boxes.)

SERIES PORTFOLIOS TRUST
(Exact Name of Registrant as Specified in Charter)
 
615 East Michigan Street
Milwaukee, WI 53202
(Address of Principal Executive Offices, including Zip Code)
 
Registrant’s Telephone Number, including Area Code:  (414) 765-6620
 
John Hedrick,  President and Principal Executive Officer
Series Portfolios Trust
615 East Michigan Street
Milwaukee, WI 53202
(Name and Address of Agent for Service)
 
Copy to:
Marco Adelfio
Goodwin Procter LLP
901 New York Avenue, NW
Washington, DC 20001
 
 

Approximate Date of Proposed Public Offering:  As soon as practicable after the effective date of this registration statement.
 

It is proposed that this filing will become effective:
 
 Immediately upon filing pursuant to paragraph (b)
 On (date) pursuant to paragraph (b)
 60 days after filing pursuant to paragraph (a)(1)
 On (date) pursuant to paragraph (a)(1)
 75 days after filing pursuant to paragraph (a)(2)
 On (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
 
 This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Explanatory Note: The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that the registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
 
 
 

 
 
Subject to Completion—Dated November 5, 2015
 
The information in this Prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

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PROSPECTUS
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[  ], 2015


Weiss Alternative Balanced Risk Fund

Class
A
(not available for purchase)
Class
C
(not available for purchase)
Class
I
  WEISX
Class
K
WEIKX
 
 
 

 
These securities have not been approved or disapproved by the Securities and Exchange Commission (“SEC”) nor has the SEC passed upon the accuracy or adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.




TABLE OF CONTENTS

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SUMMARY SECTION
 

Investment Objectives

The primary investment objective of Weiss Alternative Balanced Risk Fund (the “Fund”) is to seek to provide total return with moderate volatility and reduced correlation to the overall performance of bond and equity markets. A secondary objective of the Fund is to seek to limit capital losses during periods when bond and equity markets decline.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest, in the future, at least $50,000 in the Fund. More information about these and other discounts is available in the section entitled “Choosing a Share Class: Class A Shares,” on page 23 of this Prospectus.

Shareholder Fees
(fees paid directly from your investment)
Class A
Class C
Class I
 
Class K
Maximum Sales Charge (Load) Imposed on Purchases ( as
a percentage of offering price )
5.50%
 
None
None
None
Maximum Deferred Sales Charge (Load) ( as a percentage
of the lesser of original purchase price or redemption
proceeds)
1.00% (1)
1.00% (2)
None
None
Redemption Fee (as a percentage of amount redeemed
within 90 days of purchase)
1.00%
1.00%
1.00%
1.00%


Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the
value of your investment)
Class A
Class C
Class I
 
 
Class K
Management Fees
1.60%
1.60%
1.60%
1.60%
Distribution (12b-1) Fees
0.25%
0.75%
None
None
Other Expenses (3)
       
Dividends and Interest on Short Positions
1.00%
1.00%
1.00%
1.00%
Shareholder Servicing Fees
0.10%
0.25%
0.10%
None
All other expenses
0.60%
0.60%
0.60%
0.60%
Total Other Expenses
1.70%
1.85%
1.70%
1.60%
Acquired Fund Fees and Expenses (3), (4)
0.08%
0.08%
0.08%
0.08%
Total Annual Fund Operating Expenses
3.63%
4.28%
3.38%
3.28%
Less Fee Waiver and/or Expense Reimbursement (5)
(0.05)%
(0.05)%
(0.05)%
(0.05)%
Net Operating Expenses After Fee Waiver and/or Expense
Reimbursement
3.58%
4.23%
3.33%
3.23%
 
(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.
 
(2)        A 1.00% CDSC will be imposed on Class C shares redeemed within 12 months of purchase.
 
(3)        Other Expenses and Acquired Fund Fees and Expenses are estimated for the current fiscal year.
 
(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.
 
(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.
 
 
 
Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The fee waiver/expense reimbursement arrangement discussed in the table above is reflected only in the first year of the periods shown in the Example. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
 
1 Year
3 Years
Class A
$991
$1,596
Class C
$525
$1,293
Class I
$336
$1,034
Class K
$326
$1,005

You would pay the following expenses if you did not redeem your shares:

 
1 Year
3 Years
Class A
$891
$1,596
Class C
$425
$1,293
Class I
$336
$1,034
Class K
$326
$1,005

Portfolio Turnover

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio).  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account.  These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance.  No portfolio turnover rate is provided for the Fund because the Fund has not completed its first fiscal period as of the date of this Prospectus.

Principal Investment Strategies

The Fund utilizes an actively managed balanced risk allocation strategy that seeks to provide exposure to (1) a “long-only” portfolio of equity securities (the “equity component”), (2) a “long-only” portfolio of debt securities (i.e. the “bond component”), and (3) a diversified, multi-strategy “long/short” portfolio that will include equity securities, debt securities, and/or derivatives (the “long/short component”). The Fund’s equity and bond components consist only of securities purchased with the objective of seeking an increase in the underlying prices of such securities. Initially, the equity component will be primarily implemented through investment in one or more exchange-traded funds (“ETFs”). The portion of the Fund’s overall portfolio comprised of debt securities will, under normal market conditions, have a weighted average maturity that exceeds 9 years and will consist primarily of investment-grade debt securities with an average credit rating in excess of “A” by Standard & Poor’s, or an equivalent quality rating from another Nationally Recognized Statistical Rating Organization. The Fund may also invest in below-investment grade debt securities (also referred to as high yield debt securities or “junk” bonds).
 
 
 
The Fund’s “long/short” component consists of a combination of “long” securities purchased with the objective of seeking an increase in the underlying prices of such securities and “short” securities sold with the objective of seeking to profit from a decrease in the underlying prices of such securities (e.g., a security is borrowed from a lender and sold in the marketplace for one price with the expectation that it can later be re-purchased at a lower price before it is returned to the lender).
 
The Fund’s long/short component employs a number of distinct investment strategies in an effort to achieve its desired performance.  The strategies in the Fund’s long/short component may be characterized by sector focus, geographic definition, quantitative method, event orientation or some other dominant characteristic.  The strategies employed and the allocation among them will vary over time.  The common attribute of most of these strategies is a long/short investment approach whereby various securities or instruments are held long and others are sold short.  Furthermore, in order to take advantage of certain opportunities in the securities markets, the Fund may engage in active and frequent trading with respect to the long/short component. The active trading of this component may result in an overall portfolio turnover rate that exceeds 100%. The long/short component seeks to produce returns on an absolute basis (i.e., with a future expectation of long term positive returns independent of economic or market cycles) with reduced downside risk over the long term.  The Adviser, therefore, applies moderate leverage (i.e., borrowed capital to increase investment exposure) to the long/short component in an effort to enhance absolute returns. To the extent the Adviser utilizes leverage, it covers its exposure in accordance with SEC requirements and guidelines by designating on its books or maintaining in a separate account, cash, liquid securities and/or other permissible assets .
 
The Adviser seeks to structure the Fund’s portfolio on a “risk-weighted” basis, using an investment process that seeks to equally weight each of the three components based on the Adviser’s assessment of their contribution to overall portfolio risk, rather than investing in securities based on the expected returns of each of the three individual components.  This “risk-weighted” approach to investing utilizes the historical price return and volatility (among other proprietary measures) of each component in order to estimate the underlying component’s risk.  This methodology is generally expected to result in larger allocations to low risk asset classes (such as government bonds) than to higher risk asset classes (such as small to mid-capitalization equities).  Due to the Adviser’s intention to seek to equally weight each individual component according to its risk (as measured by its price return and volatility), the Fund’s investment allocation to the equity component, the bond component, and the long/short component can fluctuate widely. Furthermore, the long/short component of the Fund is subject to a constraint on its maximum weight as determined by the Adviser. Because past performance and volatility are unlikely to accurately predict future performance and volatility, allocations to the individual component weights (i.e. the equity, bond and long/short components) may not achieve the expected performance and volatility results.
 
In seeking to achieve the Fund’s investment objectives, the Adviser has broad and flexible investment discretion.  Accordingly, the Fund’s investments may at any time include long or short positions in U.S. or non-U.S. equities; debt securities, including corporate debt, bonds (including inflation-indexed bonds), notes or other debentures, U.S. Government and foreign government securities, and high yield or junk bonds;  derivative instruments, including swaps, interest rate swaps, options or index options (e.g., calls and puts may be purchased or written), futures contracts, and forward contracts;  depositary receipts, including American Depositary Receipts (“ADRs”); and other investment companies, including ETFs.  The Fund may use derivative instruments to create investment leverage; as a substitute for securities, interest rates, currencies and commodities; for tax purposes; and to hedge against market movements. The Fund may invest in securities of companies of any market capitalization. In connection with its trading, the Fund may employ short-selling techniques and may utilize leverage.
 
 
 
Principal Risks

As with all mutual funds, a shareholder is subject to the risk that his or her investment could lose money.   The principal risk factors affecting shareholders’ investments in the Fund are set forth below.
 
Allocation Risk.   The Fund uses asset and risk allocation strategies in pursuit of its investment objectives. Although the Fund will pursue its objectives by allocating investment risks (measured by price return and volatility expectations ) across asset classes that may react differently to various environments, there is no guarantee that it will be successful. The Fund may be unsuccessful in allocating risk effectively. The portfolio managers may not correctly estimate expected returns, volatility and correlations of various asset classes, causing the Fund’s risk allocation methodology to fail to meet the Fund’s investment objectives.  

Debt securities risks.

Credit risk: The risk that an issuer or counterparty will fail to pay its obligations to the Fund when they are due.  As a result, the Fund’s income might be reduced, the value of the Fund’s investment might fall, and/or the Fund could lose the entire amount of its investment. Changes in the financial condition of an issuer or counterparty, changes in specific economic, social or political conditions that affect a particular type of security or other instrument or an issuer, and changes in economic, social or political conditions generally can increase the risk of default by an issuer or counterparty, which can affect a security’s or other instrument’s credit quality or value and an issuer’s or counterparty’s ability to pay interest and principal when due. The values of securities also may decline for a number of other reasons that relate directly to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods and services, as well as the historical and prospective earnings of the issuer and the value of its assets.

Extension risk:   The risk that if interest rates rise, repayments of principal on certain debt securities, including, but not limited to, floating rate loans and mortgage-related securities, may occur at a slower rate than expected and the expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally have a greater potential for loss when prevailing interest rates rise, which could cause their values to fall sharply.

Interest rate risk: The risk that debt instruments will change in value because of changes in interest rates. The value of an instrument with a longer duration (whether positive or negative) will be more sensitive to changes in interest rates than a similar instrument with a shorter duration. Bonds and other debt instruments typically have a positive duration.  The value of a debt instrument with positive duration will generally decline if interest rates increase. Certain other investments, such as inverse floaters and certain derivative instruments, may have a negative duration.  The value of instruments with a negative duration will generally decline if interest rates decrease. Inverse floaters, interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments.
 
Depositary receipts risk. Depositary receipts in which the Fund may invest are receipts listed on U.S. exchanges that are issued by banks or trust companies that entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares. Investments in depositary receipts may be less liquid than the underlying shares in their primary trading market.
 
 
 
Derivatives risk. The risk that an investment in derivatives will not perform as anticipated by the Adviser, cannot be closed out at a favorable time or price, or will increase the Fund’s volatility; that derivatives may create investment leverage; that, when a derivative is used as a substitute for or alternative to a direct cash investment, the transaction may not provide a return that corresponds precisely with that of the cash investment; or that, when used for hedging purposes, derivatives will not provide the anticipated protection, causing the Fund to lose money on both the derivatives transaction and the exposure the Fund sought to hedge. Derivatives are also subject to counterparty risk.

Counterparty risk.   The risk that the Fund will be subject to credit risk with respect to the counterparties to derivative contracts and other instruments entered into directly by the Fund. Subject to certain limitations for U.S. federal income tax purposes, the Fund is not subject to any limit with respect to the number of transactions it can enter into with a single counterparty.  To the extent that the Fund enters into multiple transactions with a single or a small set of counterparties, it will be subject to increased counterparty risk.
 
Futures and Forwards Risk.  The Fund’s use of futures and forwards contracts involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) leverage risk; (ii) correlation risk; and (iii) liquidity risk. Because futures and forwards contracts require only a small initial investment in the form of a deposit or margin, they involve a high degree of leverage. Accordingly, the fluctuation of the value of futures or forwards in relation to the underlying assets upon which they are based is magnified. There may be imperfect correlation, or even no correlation, between price movements of a futures or forwards contract and price movements of investments for which futures or forwards are used as a substitute, or which futures or forwards contracts are intended to hedge. While futures and forwards contracts are generally liquid instruments, under certain market conditions they may become illiquid. As a result, the Fund may be unable to close out its futures contracts at a time which is advantageous. The successful use of futures depends upon a variety of factors, particularly the ability of the Adviser to predict movements of the underlying securities markets, which requires different skills than predicting changes in the prices of individual securities. There can be no assurance that any particular futures strategy adopted will succeed.
 
Swap Risk.  The Fund may enter into derivatives called equity swaps. Risks associated with swap agreements include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contract’s terms and the possible lack of liquidity with respect to the swap agreements. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The swaps market is subject to extensive government regulation. It is possible that developments in the swaps market, including new and additional government regulation, could result in higher Fund costs and expenses and could adversely affect the Fund’s ability, among other things, to terminate existing swap agreements or to realize amounts to be received under such agreements.

Interest Rate Swap Risk.   The Fund may enter into derivatives called interest rate swaps. Risks associated with interest rate swaps include changes in market conditions that may affect the value of the contract or the cash flows, and the possible inability of the counterparty to fulfill its obligations under the agreement. Certain interest rate swap arrangements also may involve the risk that they do not fully offset adverse changes in interest rates. Interest rate swaps may in some cases be illiquid and may be difficult to trade or value, especially in the event of market disruptions. Under certain market conditions, the investment performance of the Fund may be less favorable than it would have been if the Fund had not used the swap agreement.
 
Options Risk.   Options transactions involve special risks that may make it difficult or impossible to close a position when the Fund desires. These risks include possible imperfect correlation between the price movements of the option and the underlying security; the potential lack of a liquid secondary market at any particular time; and possible price fluctuation limits. In addition, the option activities of the Fund may affect its portfolio turnover rate and the amount of brokerage commissions paid by the Fund.
 
 
 
Equity issuer risk. The risk that the market price of common stocks and other equity securities may go up or down, sometimes rapidly or unpredictably, including due to factors affecting equity securities markets generally, particular industries represented in those markets, or the issuer itself.
 
Focused investment risk. A fund that invests a substantial portion of its assets in a particular market, country, region, group of countries, asset class or sector generally is subject to greater risk than a fund that invests in a more diverse investment portfolio. In addition, the value of a fund that has focused investments is more susceptible to any single economic, market, political or regulatory occurrence affecting, for example, that particular market, region or sector.
 
Foreign investing risk. Generally, foreign securities are issued by companies organized outside the U.S. or by foreign governments or international organizations, are traded primarily in markets outside the U.S., and are denominated in a foreign currency. Foreign investing risk includes the risk that the Fund’s investments will be affected by political, regulatory, and economic risks not present in domestic investments.  If the Fund buys securities denominated in a foreign currency, there are special risks such as changes in currency exchange rates and the risk that a foreign government could regulate or restrict foreign exchange transactions.  To the extent that investments are made in a limited number of countries, events in those countries will have a more significant impact on the Fund.

Emerging market country risk. The risk that investing in emerging markets will be subject to greater political and economic instability, greater volatility in currency exchange rates, less developed securities markets, possible trade barriers, currency transfer restrictions, a more limited number of potential buyers, an emerging market country’s dependence on revenue from particular commodities or international aid, less governmental supervision and regulation, unavailability of currency hedging techniques, differences in auditing and financial reporting standards, and less developed legal systems than in many more developed countries.

Foreign currency risk. The risk that fluctuations in exchange rates may adversely affect the value of the Fund’s investments denominated in foreign currencies.
 
High yield debt securities (“junk” bond) risk. Below investment-grade debt securities (also referred to as high yield debt securities or “junk” bonds) involve greater risk of default or price changes due to changes in the credit quality of the issuer. The value of high yield debt securities can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market, or economic developments.
 
Inflation-indexed bond risk. The risk that such bonds will change in value in response to actual or anticipated changes in inflation rates, in a manner unanticipated by the Fund’s portfolio management team or investors generally. Inflation-indexed bonds are subject to debt securities risks.

 
 
Large shareholder risk.   The risk that certain account holders may from time to time own or control a significant percentage of the Fund’s shares. The Fund is subject to the risk that a redemption by those shareholders of all or a portion of their Fund shares will adversely affect the Fund’s performance if it is forced to sell portfolio securities or invest cash when the Adviser would not otherwise choose to do so. Redemptions of a large number of shares may affect the liquidity of the Fund’s portfolio, increase the Fund’s transaction costs, and accelerate the realization of taxable income and/or gains to shareholders.
 
Leveraging risk. The risk that certain investments by the Fund involving leverage may have the effect of increasing the volatility of the Fund’s portfolio, and the risk of loss in excess of invested capital.

Limited operating history risk. The risk that a newly formed fund has a limited operating history to evaluate and may not attract sufficient assets to achieve or maximize investment and operational efficiencies.
 
Market capitalization risk. The Fund may invest in securities of any market capitalization.
 
Large capitalization risk. Larger, more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes. Larger companies also may not be able to attain the high growth rates of successful smaller companies.
 
Medium and small capitalization risk. Investing in medium and small capitalization companies may involve special risks because those companies may have narrower product lines, more limited financial resources, fewer experienced managers, dependence on a few key employees, and a more limited trading market for their stocks, as compared with larger companies. Securities of medium and smaller capitalization issuers may be subject to greater price volatility and may decline more significantly in market downturns than securities of larger companies. Smaller and medium capitalization issuers may also require substantial additional capital to support their operations, to finance expansion or to maintain their competitive position; and may have substantial borrowings or may otherwise have a weak financial condition, and may be susceptible to bankruptcy. Transaction costs for these investments are often higher than those of larger capitalization companies. There is typically less publicly available information about medium and small capitalization companies.

Market risk. The risk that the market will perform poorly or that the returns from the securities in which the Fund invests will underperform returns from the general securities markets or other types of investments. Securities markets may, in response to governmental actions or intervention, economic or market developments, or other external factors, experience periods of high volatility and reduced liquidity.  During those periods, the Fund may experience high levels of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so and, potentially, at unfavorable prices.  Certain securities may be difficult to value during such periods.  These risks may be heightened for debt securities due to the current historically low interest rate environment.
 
Other investment company and ETF risk. The risk that an investment company, including any ETFs, in which the Fund invests will not achieve its investment objective or execute its investment strategies effectively or that significant purchase or redemption activity by shareholders of such an investment company might negatively affect the value of the investment company’s shares. The Fund must pay its pro rata portion of an investment company’s fees and expenses.

Portfolio management risk. The risk that an investment strategy may fail to produce the intended results or that the securities held by the Fund will underperform other comparable funds because of the portfolio managers’ choice of investments.

 
 
Portfolio turnover risk.   A high portfolio turnover rate (100% or more) has the potential to result in the realization and distribution to shareholders of higher capital gains, which may subject you to a higher tax liability.  High portfolio turnover also necessarily results in greater transaction costs which may reduce Fund performance.

Prepayment risk. The risk that the issuer of a debt security, including floating rate loans and mortgage-related securities, repays all or a portion of the principal prior to the security's maturity. In times of declining interest rates, there is a greater likelihood that the Fund’s higher yielding securities will be pre-paid with the Fund being unable to re-invest the proceeds in an investment with as great a yield. Prepayments can therefore result in lower yields to shareholders of the Fund. Interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments.

Short position risk. The Fund may borrow an instrument from a broker or other institution and sell it to establish a short position in the instrument. The Fund may also enter into a derivative transaction in order to establish a short position with respect to a reference asset. The Fund may make a profit or incur a loss depending upon whether the market price of the instrument decreases or increases between the date the Fund established the short position and the date on which the Fund must replace the borrowed instrument or otherwise close out the transaction. An increase in the value of an instrument with respect to which the Fund has established a short position will result in a loss to the Fund, and there can be no assurance that the Fund will be able to close out the position at any particular time or at an acceptable price. The loss to the Fund from a short position is potentially unlimited.
 
Sovereign debt obligations risk . Investments in countries’ government debt obligations involve special risks. Certain countries have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt, balance of payments and trade difficulties and extreme poverty and unemployment. The issuer or governmental authority that controls the repayment of a country’s debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt.

U.S. Government securities risk. The risk that debt securities issued or guaranteed by certain U.S. Government agencies, instrumentalities, and sponsored enterprises are not supported by the full faith and credit of the U.S. Government, and so investments in their securities or obligations issued by them involve credit risk greater than investments in other types of U.S. Government securities.

Performance Information

Performance information for the Fund is not included because the Fund had not commenced operations prior to the date of this Prospectus.  Performance information will be available once the Fund has at least one calendar year of performance.

Investment Adviser

Weiss Multi-Strategy Advisers LLC is the Adviser to the Fund.

Portfolio Managers

The Fund’s investment decisions are made by the following portfolio managers:

Portfolio Managers
 
Position with the Adviser
 
Length of Service to the Fund
Jordi Visser
Charles S. Crow IV
Edward Olanow
 
President and Chief Investment Officer
Quantitative Analyst
Vice President
 
Since inception in 2015
Since inception in 2015
Since inception in 2015
 
 

Purchase and Sale of Fund Shares

You may purchase or redeem shares by mail (Weiss Alternative Balanced Risk Fund,  c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, WI 53201-0701), by telephone at 866-530-2690, or by wire transfer.  Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly.  Class A and Class C shares are not currently available for purchase.

 
Minimum Initial
Investment
Minimum
Subsequent
Investment
Class A (not available for purchase)
$5,000
$1,000
Class C (not available for purchase)
$5,000
$1,000
Class I
$250,000
$1,000
Class K
$2,000,000
$1,000

Tax Information

The Fund’s distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account, in which case such distributions may be taxable at a later date.

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services.  These payments may create conflicts of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
 
 
 
INVESTMENT OBJECTIVES AND POLICIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS
 

INVESMENT OBJECTIVES, STRATEGY AND POLICIES

The Fund’s primary investment objective is to seek to provide total return with moderate volatility and reduced correlation to the overall performance of bond and equity markets. A secondary objective of the Fund is to seek to limit capital losses during periods when bond and equity markets decline. The Fund’s investment objectives may be changed without the approval of the Fund’s shareholders, upon 60 days’ written notice to shareholders.
 
The Fund utilizes an actively managed balanced risk allocation strategy that combines (1) a “long-only” equity component, (2) a “long-only” bond component, and (3) a “long/short component.”  The Adviser seeks to structure the Fund’s portfolio on a risk-weighted basis, using an investment process that seeks to equally weight each of the three components based on the Adviser’s assessment of their contribution to overall portfolio risk, subject to a constraint on the maximum weight as determined by the Adviser on the long/short component and certain other regulatory and operational constraints, rather than on the expected returns of the components.
 
The Fund’s long/short component strives to limit capital losses.  The strategy seeks returns that are derived from either company (investment) specific judgments or relative value relationships, rather than the overall direction of the markets.  The long/short component seeks to constrain the exposure to the market at large.  There can be no assurance that the long/short component will achieve its objectives.
 
As noted above, the Fund employs a multi-strategy approach in the pursuit of its objectives.  The long/short component employs a number of distinct investment strategies in an effort to achieve its desired performance. These strategies may be characterized by sector focus, geographic definition, quantitative method, event orientation or some other dominant characteristic.  The strategies employed and the allocation among them will vary over time.  The common attribute of most of these strategies is a long/short investment approach whereby various securities or instruments are held long and others are sold short.  The Adviser’s investment personnel are organized by investment strategy, and each investment strategy in the long/short component is managed by a team composed of investment professionals dedicated to that strategy. Specific investment selections for a strategy are made by members of the strategy team.  The Adviser’s investment committee determines allocations of capital to each investment strategy in the long/short component.
 
The diversification among investment strategies in the long/short component, the expertise of the investment teams, and the constraints on market exposure are intended to seek to produce returns on an absolute basis with reduced downside risk over the long term.  The Adviser applies moderate leverage, as permitted by the Investment Company Act of 1940, as amended (the “1940 Act”), to the long/short component in order to exploit the long/short relationship and seek to enhance returns. To the extent the Adviser utilizes leverage, it complies with SEC guidelines, including, as necessary, by designating on its books or maintaining in a separate account, cash, liquid securities and other permissible assets. As prescribed by SEC guidelines, the value of such assets will be at least equal to each Fund’s exposure and will be marked to market daily (i.e., the market value of the assets must equal the current value of the obligation).  Permissible liquid assets will be added to the segregated account if the total value of the account falls below the current value of the obligations incurred.
 
In seeking to achieve the Fund’s investment objectives, the Adviser has broad and flexible investment discretion.  Accordingly, the Fund’s investments may at any time include long or short positions in U.S. or non-U.S. equities; debt securities, including corporate debt, bonds (including inflation-indexed bonds), notes or other debentures, U.S. Government and foreign government securities, and high yield or junk bonds; derivative instruments, including swaps, interest rate swaps, options or index options (purchased or written), futures contracts, and forward contracts; depositary receipts, including ADRs ; and other investment companies, including ETFs.  The Fund may use derivative instruments to create investment leverage; as a substitute for securities, interest rates, currencies and commodities; for tax purposes; and to hedge against market movements. The Fund may invest in securities of companies of any market capitalization.   In connection with its trading, the Fund may employ short-selling techniques and may utilize leverage.
 

Temporary Investments. In order to respond to adverse market, economic, political or other conditions, the Fund may assume a temporary defensive position that is inconsistent with its investment objectives and principal investment strategies and invest, without limitation, in cash or cash equivalents.

RISK FACTORS

As with all mutual funds, there is the risk that you could lose all or a portion of your investment in a Fund.  There is no assurance that the Fund will achieve its investment objective, and an investment in the Fund is not by itself a complete or balanced investment program. The following provides additional information regarding the principal risks that could affect the value of your investment:
 
Allocation Risk.   The Fund uses asset and risk allocation strategies in pursuit of its investment objective. Although the Fund will pursue its objective by allocating investment risks (measured by price return and volatility expectations ) across asset classes that may react differently to various environments, there is no guarantee that it will be successful. The Fund may be unsuccessful in allocating risk effectively. The portfolio managers may not correctly estimate expected returns, volatility and correlations of various asset classes, causing the Fund’s risk allocation methodology to fail to meet the Fund’s investment objective.  

Debt securities risks. Debt securities are subject to various risks including, among others, credit risk and interest rate risk. These risks can affect a security’s price volatility to varying degrees, depending upon the nature of the instrument.

Credit risk: refers to the risk that an issuer or counterparty will fail to pay its obligations to the Fund when they are due. Financial strength and solvency of an issuer are the primary factors influencing credit risk. Changes in the financial condition of an issuer or counterparty, changes in specific economic, social or political conditions that affect a particular type of security, other instrument or an issuer, and changes in economic, social or political conditions generally can increase the risk of default by an issuer or counterparty, which can affect a security’s or other instrument’s credit quality or value and an issuer’s or counterparty’s ability to pay interest and principal when due. The values of lower-quality debt securities (commonly known as junk bonds), including floating rate loans, tend to be particularly sensitive to these changes. The values of securities also may decline for a number of other reasons that relate directly to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods and services, as well as the historical and prospective earnings of the issuer and the value of its assets. In addition, lack of or inadequacy of collateral or credit enhancements for a debt security may affect its credit risk. Credit risk of a security may change over time, and securities which are rated by ratings agencies may be subject to downgrade, which may have an indirect impact on the market price of securities. Ratings are only opinions of the agencies issuing them as to the likelihood of re-payment. They are not guarantees as to quality and they do not reflect market risk. If an issuer or counterparty fails to pay interest or otherwise fails to meet its obligations to the Fund, the Fund’s income might be reduced and the value of the investment might fall, and if an issuer or counterparty fails to pay principal, the value of the investment might fall and the Fund could lose the amount of its investment.

Extension risk: refers to the risk that if interest rates rise, repayments of principal on certain debt securities, including, but not limited to, floating rate loans and mortgage-related securities, may occur at a slower rate than expected and the expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally have a greater potential for loss when prevailing interest rates rise, which could cause their values to fall sharply.
 
 

Interest rate risk: refers to the risk that the values of debt instruments held by the Fund will change in response to changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the debt securities market, reduced liquidity for certain Fund investments and an increase in Fund redemptions. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. In general, the value of a fixed-income instrument with positive duration will generally decline if interest rates increase, whereas the value of an instrument with negative duration will generally decline if interest rates decrease. The value of an instrument with a longer duration (whether positive or negative) will be more sensitive to increases in interest rates than a similar instrument with a shorter duration. Duration is a measure of the expected life of a bond that is used to determine the sensitivity of an instrument’s price to changes in interest rates. For example, the price of a bond fund with an average duration of three years generally would be expected to fall approximately 3% if interest rates rose by one percentage point. Inverse floaters, interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments. Adjustable rate instruments also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other things).
 
Depositary Receipts Risk. Depositary receipts involve risks similar to those associated with investments in foreign securities and certain additional risks. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares. The issuers of certain depositary receipts are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities. Investment in depositary receipts may be less liquid than the underlying shares in their primary trading market. When the Fund invests in a depositary receipt as a substitute for or alternative to an investment directly in the underlying shares, the Fund is exposed to the risk that the depositary receipt may not provide a return that corresponds precisely with that of the underlying investment.
 
Derivatives risk (including forward contracts, futures, options and swaps). The Fund’s use of derivatives may involve risks different from, or greater than, the risks associated with investing in more traditional investments, such as stocks and bonds. Derivatives can be highly complex and may perform in ways unanticipated by the Adviser.

The Fund’s use of derivatives involves the risk that the other party to the derivative contract will fail to make required payments or otherwise to comply with the terms of the contract. Derivatives transactions can create investment leverage and may be highly volatile, and the Fund could lose more than the amount it invests. Derivatives may be difficult to value and highly illiquid, and the Fund may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Use of derivatives may affect the amount, the timing and the character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.
 
The Fund may use derivatives to create investment leverage, and the Fund’s use of derivatives may otherwise cause its portfolio to be leveraged. Leverage increases the Fund’s portfolio losses when the value of its investments declines. Since many derivatives involve leverage, adverse changes in the value or level of the underlying asset, rate, or index may result in a loss substantially greater than the amount invested in the derivative itself. Some derivatives have the potential for unlimited loss, regardless of the size of the initial investment.
 
 

When the Fund enters into a derivatives transaction as a substitute for or alternative to a direct cash investment, that Fund is exposed to the risk that the derivative transaction may not provide a return that corresponds precisely with that of the underlying investment. When the Fund uses a derivative for hedging purposes, it is possible that the derivative will not in fact provide the anticipated protection, and the Fund could lose money on both the derivative transaction and the exposure the Fund sought to hedge. Because most derivatives involve contractual arrangements with a counterparty, no assurance can be given that a particular type of derivative contract can be completed or terminated when desired by the Adviser. While hedging strategies involving derivatives can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other Fund investments. Certain derivatives may create a risk of loss greater than the amount invested.

Counterparty risk.   The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter instruments) and other instruments entered into directly by the Fund. If a counterparty becomes bankrupt or insolvent or otherwise fails to perform its obligations to the Fund due to financial difficulties, the Fund may experience significant losses or delays in obtaining any recovery (including recovery of any collateral the counterparty has provided to the Fund in respect of the counterparty’s obligations to the Fund or that the Fund has provided to the counterparty) in a dissolution, assignment for the benefit of creditors, liquidation, winding-up, bankruptcy, or other analogous proceeding. In addition, in the event of the bankruptcy or insolvency of a counterparty to a derivative transaction, the derivative transaction would typically be terminated at its fair market value. If the Fund is owed this fair market value in the termination of the derivative transaction and its claim is unsecured, the Fund will likely be treated as a general creditor of such counterparty, and may not have any claim with respect to any underlying security or asset. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances. Counterparty risk with respect to certain exchange-traded and over-the-counter derivatives may be further complicated by U.S. financial reform legislation. Subject to certain limitations for U.S. federal income tax purposes, the Fund is not subject to any limit with respect to the number or the value of transactions they can enter into with a single counterparty.
 
Futures and Forwards Risk.   The Fund’s use of futures and forward contracts involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) leverage risk; (ii) correlation or tracking risk; and (iii) liquidity risk. Because futures require only a small initial investment in the form of a deposit or margin, they involve a high degree of leverage. Accordingly, the fluctuation of the value of futures in relation to the underlying assets upon which they are based is magnified. Thus, the Fund may experience losses that exceed losses experienced by funds that do not use futures contracts. There may be imperfect correlation, or even no correlation, between price movements of a futures or forwards contract and price movements of investments for which futures or forwards are used as a substitute, or which futures or forwards are intended to hedge. Lack of correlation (or tracking) may be due to factors unrelated to the value of the investments being hedged, such as speculative or other pressures on the markets in which these instruments are traded. Consequently, the effectiveness of futures or forwards contract as a security substitute or as a hedging vehicle will depend, in part, on the degree of correlation between price movements in the futures or forwards and price movements in underlying securities. While futures and forwards contracts are generally liquid instruments, under certain market conditions they may become illiquid. Futures exchanges may impose daily or intra-day price change limits and/or limit the volume of trading. Additionally, government regulation may further reduce liquidity through similar trading restrictions. As a result, the Fund may be unable to close out its futures or forwards contracts at a time which is advantageous. The successful use of futures and forwards depends upon a variety of factors, particularly the ability of the Adviser to predict movements of the underlying securities markets, which requires different skills than predicting changes in the prices of individual securities. There can be no assurance that any particular futures or forwards strategy adopted will succeed.
 
 

Swap Risk.   Risks associated with swap agreements include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contract’s terms and the possible lack of liquidity with respect to the swap agreements. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The swaps market is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

Interest Rate Swap Risk.   Interest rate swaps are financial instruments that involve the exchange of one type of interest rate for another type of interest rate cash flow on specified dates in the future. Like a traditional investment in a debt security, the Fund could lose money by investing in an interest rate swap if interest rates change adversely. For example, if the Fund enters into a swap where it agrees to exchange a floating rate of interest for a fixed rate of interest, the Fund may have to pay more money than it receives. Interest rate swaps entered into in which payments are not netted may entail greater risk than a swap entered into a net basis. There is a risk that adverse price movements in an instrument can result in a loss substantially greater than the Fund’s initial investment in that instrument (in some cases, the potential loss is unlimited). If there is a default by the other party to such a transaction, the Fund will have contractual remedies pursuant to the agreements related to the transaction. However, there is a risk that the counterparty will not perform its obligations, which could leave the Fund worse off than if it had not entered into the position. These instruments are subject to high levels of volatility, in some cases due to the high levels of leverage the Fund may achieve with them.
 
Options Risk.   Options transactions involve special risks that may make it difficult or impossible to close a position when the Fund desires. A Fund that purchases options, which are a type of derivative, is subject to the risk that gains, if any, realized on the position, will be less than the amount paid as premiums to the writer of the option. A Fund that writes options receives a premium that may be small relative to the loss realized in the event of adverse changes in the value of the underlying instruments. A Fund that writes covered call options gives up the opportunity to profit from any price increase in the underlying security above the option exercise price while the option is in effect. Options may be more volatile than the underlying instruments. There may at times be an imperfect correlation between the movement in values of options and their underlying securities and there may at times not be a liquid secondary market for certain options. In addition, the option activities of the Fund may affect its portfolio turnover rate and the amount of brokerage commissions paid by the Fund.
 
Equity issuer risk. The market prices of common stocks and other equity securities may go up or down, sometimes rapidly or unpredictably. The values of equity securities may decline due to general market conditions that are not necessarily related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates, or adverse investor sentiment generally. They also may decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. In addition, the values of equity securities may decline for a number of reasons that may relate directly to the issuer, such as management performance, financial leverage, non-compliance with regulatory requirements, and reduced demand for the issuer’s goods or services. Equity securities generally have greater price volatility than bonds and other debt securities, although under certain market conditions various debt investments may have comparable or greater price volatility. The values of equity securities paying dividends at high rates may be more sensitive to change in interest rates than are other equity securities.
 
 

Focused investment risk. A fund that invests a substantial portion of its assets in a particular market, country, region, group of countries, asset class or sector generally is subject to greater risk than a fund that invests in a more diverse investment portfolio. In addition, the value of a fund that has focused investments is more susceptible to any single economic, market, political or regulatory occurrence affecting, for example, that particular market, industry, region or sector. This is because, for example, issuers in a particular market, region or sector often react similarly to specific economic, market, regulatory, or political developments.
 
To the extent the Fund invests in the securities of a limited number of issuers, it is particularly exposed to adverse developments affecting those issuers, and a decline in the market value of a particular security held by the Fund may affect the Fund’s performance more than if the Fund invested in the securities of a larger number of issuers.  In addition, the limited number of issuers in which the Fund invests may provide the Fund exposure to substantially the same market, country, region, group of countries, asset class or sector, which may increase the risk of loss as a result of focusing the Fund’s investments, as discussed above.
 
Foreign investing risk.   Generally, foreign securities are issued by companies organized outside the U.S. or by foreign governments or international organizations, are traded primarily in markets outside the U.S., and are denominated in a foreign currency.   Investments in foreign securities or in issuers with significant exposure to foreign markets may involve greater risks than investments in domestic securities because the Fund’s performance may depend on factors other than the performance of a particular company. To the extent that investments are made in a limited number of countries, events in those countries will have a more significant impact on the Fund.
 
As compared to U.S. companies, foreign issuers generally disclose less financial and other information publicly and are subject to less stringent and less uniform accounting, auditing, and financial reporting standards. In addition, there may be limited information generally regarding factors affecting a particular foreign market, issuer, or security.
 
Foreign countries typically impose less thorough regulations on brokers, dealers, stock exchanges, corporate insiders and listed companies than does the United States and foreign securities markets may be less liquid and more volatile than domestic markets. Investment in foreign securities involves higher costs than investment in U.S. securities, including higher transaction and custody costs as well as the imposition of additional taxes by foreign governments. In addition, security trading and custody practices abroad may offer less protection to investors such as the Funds. Political, social or financial instability, civil unrest and acts of terrorism are other potential risks that could adversely affect an investment in a foreign security or in foreign markets or issuers generally. Settlement of transactions in some foreign markets may be delayed or may be less frequent than in the United States which could affect the liquidity of the Fund’s portfolio.
 
Because foreign securities generally are denominated and pay dividends or interest in foreign currencies, and the Fund may hold various foreign currencies from time to time, the value of the Fund’s assets, as measured in U.S. dollars, can be affected unfavorably by changes in exchange rates or by unfavorable currency regulations imposed by foreign governments.

Emerging market country risk.   Investing in emerging market countries involves substantial risk due to limited information; higher brokerage costs; different accounting, auditing and financial reporting standards; less developed legal systems and thinner trading markets as compared to those in developed countries; currency blockages or transfer restrictions; an emerging market country’s dependence on revenue from particular commodities or international aid; and expropriation, nationalization or other adverse political or economic developments.

Political and economic structures in many emerging market countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Some of these countries may have in the past failed to recognize private property rights and have at times nationalized or expropriated the assets of private companies.
 
 

The securities markets of emerging market countries may be substantially smaller, less developed, less liquid and more volatile than the major securities markets in the U.S. and other developed nations. The limited size of many securities markets in emerging market countries and limited trading volume in issuers compared to the volume in U.S. securities or securities of issuers in other developed countries could cause prices to be erratic for reasons other than factors that affect the quality of the securities. In addition, emerging market countries’ exchanges and broker-dealers may generally be subject to less regulation than their counterparts in developed countries. Brokerage commissions and dealer mark-ups, custodial expenses and other transaction costs are generally higher in emerging market countries than in developed countries. As a result, funds that invest in emerging market countries have operating expenses that are higher than funds investing in other securities markets.

Emerging market countries may have different clearance and settlement procedures than in the U.S., and in certain markets there may be times when settlements fail to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Further, satisfactory custodial services for investment securities may not be available in some emerging market countries, which may result in the Fund incurring additional costs and delays in transporting and custodying such securities outside such countries. Delays in settlement or other problems could result in periods when assets of the Fund are uninvested and no return is earned thereon. The inability of the Fund to make intended security purchases due to settlement problems or the risk of intermediary counterparty failures could cause the Fund to miss attractive investment opportunities. The inability to dispose of a portfolio security due to settlement problems could result either in losses to the Fund due to subsequent declines in the value of such portfolio security or, if the Fund has entered into a contract to sell the security, could result in possible liability to the purchaser.

Some emerging market countries have a greater degree of economic, political and social instability than the U.S. and other developed countries. Such social, political and economic instability could disrupt the financial markets in which the Fund invests and adversely affect the value of its investment portfolio.

Currencies of emerging market countries have sometimes experienced devaluations relative to the U.S. dollar, and major devaluations have historically occurred in certain countries. A devaluation of the currency in which portfolio securities are denominated will negatively impact the value of those securities. Emerging market countries have and may in the future impose capital controls, foreign currency controls and repatriation controls.  In addition, some currency hedging techniques may be unavailable in emerging market countries, and the currencies of emerging market countries may experience greater volatility in exchange rates as compared to those of developed countries.

Foreign currency risk.   Currency risk is the risk that fluctuations in exchange rates may adversely affect the value of the Fund’s investments. Currency risk includes both the risk that currencies in which the Fund’s investments are traded and/or in which the Fund receives income, or currencies in which the Fund has taken an active investment position, will decline in value relative to other currencies. In the case of hedging positions, currency risk includes the risk that the currency the Fund is seeking exposure to will decline in value relative to the foreign currency being hedged. Currency exchange rates fluctuate significantly for many reasons, including changes in supply and demand in the currency exchange markets, actual or perceived changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks, or supranational agencies such as the International Monetary Fund, and currency controls or other political and economic developments in the U.S. or abroad.
 
 

The Fund may use derivatives to acquire positions in currencies the values to which the Fund is exposed through its investments. This presents the risk that the Fund could lose money on its exposure to a particular currency and also lose money on the derivative. The Fund also may take overweighted or underweighted currency positions and/or hedge the currency exposure of the securities in which it has invested. As a result, the Fund’s currency exposure may differ (in some cases significantly) from the currency exposure of its investments and/or its benchmarks.

High yield debt securities (“junk” bond) risk. Below investment grade-debt securities (also referred to as high yield debt securities or “junk” bonds) involve greater risk of default or price changes due to changes in the credit quality of the issuer. The value of high yield debt securities can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market, or economic developments.

Inflation-indexed bond risk. The risk that such bonds will change in value in response to actual or anticipated changes in inflation rates, in a manner unanticipated by the Fund’s portfolio management team or investors generally. Inflation-indexed bonds are subject to debt securities risks, described above.

Large shareholder risk. Certain account holders may from time to time own or control a significant percentage of the Fund’s shares. The Fund is subject to the risk that a redemption by large shareholders of all or a portion of their Fund shares or a purchase of Fund shares in large amounts and/or on a frequent basis will adversely affect the Fund’s performance if it is forced to sell portfolio securities or invest cash when the Adviser would not otherwise choose to do so. This risk will be particularly pronounced if one shareholder owns a substantial portion of the Fund. Redemptions of a large number of shares may affect the liquidity of the Fund’s portfolio, increase the Fund’s transaction costs and/or lead to the liquidation of the Fund. Such transactions also potentially limit the use of any capital loss carryforwards and certain other losses to offset future realized capital gains (if any).

Leveraging risk. Certain transactions and the use of some derivatives, can result in leverage. In addition, the Fund may achieve investment leverage by borrowing money. Leverage generally has the effect of increasing the amounts of loss or gain the Fund might realize, and creates the likelihood of greater volatility of the value of the Fund’s investments. In transactions involving leverage, a relatively small market movement or change in other underlying indicator can lead to significantly larger losses to the Fund. There is risk of loss in excess of invested capital.
 
The types of derivative instruments the Fund may use to obtain leverage will require the Fund to make payments to its counterparties from time to time and may adversely affect the Fund’s ability to manage the portion of the Fund invested in debt securities. It may also require the Fund to liquidate its debt instrument holdings at disadvantageous times and prices.
 
Limited operating history risk. The Fund is newly formed and has no operating history for investors to evaluate. As such, the Fund may not attract sufficient assets to achieve or maximize investment and operational efficiencies and remain viable. If the Fund fails to achieve sufficient scale, it may be liquidated.
 
Market capitalization risk. Stocks fall into three broad market capitalization categories — large, medium and small. The Fund that invests substantially in one of these categories carries the risk that due to current market conditions that category may be out of favor with investors.
 
 

Large capitalization risk. If valuations of large capitalization companies appear to be greatly out of proportion to the valuations of small or medium capitalization companies, investors may migrate to the stocks of small and medium-sized companies. Larger, more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes. Larger companies also may not be able to attain the high growth rates of successful smaller companies.
 
Medium and small capitalization risk. Investing in medium and small capitalization companies may involve special risks because those companies may have narrower product lines, more limited financial resources, fewer experienced managers, dependence on a few key employees, and a more limited trading market for their stocks, as compared with larger companies. In addition, securities of these companies are subject to the risk that, during certain periods, the liquidity of particular issuers or industries will shrink or disappear with little forewarning as a result of adverse economic or market conditions, or adverse investor perceptions, whether or not accurate. Securities of medium and smaller capitalization issuers may therefore be subject to greater price volatility and may decline more significantly in market downturns than securities of larger companies. Smaller and medium capitalization issuers may also require substantial additional capital to support their operations, to finance expansion or to maintain their competitive position; and may have substantial borrowings or may otherwise have a weak financial condition, and may be susceptible to bankruptcy. Transaction costs for these investments are often higher than those of larger capitalization companies. There is typically less publicly available information about medium and small capitalization companies.

Market risk. The Fund may invest in securities of any market capitalization. Various market risks can affect the price or liquidity of an issuer’s securities in which the Fund may invest. Returns from the securities in which the Fund invests may underperform returns from the various general securities markets or different asset classes. Different types of securities tend to go through cycles of outperformance and underperformance in comparison to the general securities markets. Adverse events occurring with respect to an issuer’s performance or financial position can depress the value of the issuer’s securities. The liquidity in a market for a particular security will affect its value and may be affected by factors relating to the issuer, as well as the depth of the market for that security. Other market risks that can affect value include a market’s current attitudes about types of securities, market reactions to political or economic events, including litigation, and tax and regulatory effects (including lack of adequate regulations for a market or particular type of instrument).

Markets may, in response to governmental actions or intervention, economic or market developments, or other external factors, experience periods of high volatility and reduced liquidity.  During those periods, the Funds may experience high levels of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and at potentially unfavorable prices.  Securities may be difficult to value during such periods. These risks may be heightened for debt securities due to the current historically low interest rate environment.

The United States and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. For example, in recent periods, governmental financial regulators, including the U.S. Federal Reserve, have taken steps to maintain historically low interest rates, such as by purchasing bonds.  Steps by those regulators, including, for example, steps to curtail or taper such activities, could have a material adverse effect on prices for the Fund’s portfolio of investments and on the management of the Funds. The withdrawal of support, failure of efforts in response to a financial crisis, or investor perception that those efforts are not succeeding could negatively affect financial markets generally as well as the values and liquidity of certain securities.  Federal, state, and other governments, their regulatory agencies, or self regulatory organizations may take actions that affect the regulation of the securities in which the Fund invests or the issuers of such securities in ways that are unforeseeable. Legislation or regulation also may change the way in which the Funds or the Adviser are regulated. Such legislation, regulation, or other government action could limit or preclude the Fund’s ability to achieve its investment objective and affect the Fund’s performance.

Political, social or financial instability, civil unrest and acts of terrorism are other potential risks that could adversely affect an investment in a security or in markets or issuers generally. In addition, political developments in foreign countries or the United States may at times subject such countries to sanctions from the U.S. government, foreign governments and/or international institutions that could negatively affect the Fund’s investments in issuers located in, doing business in or with assets in such countries.
 
 

The Fund may continue to accept new subscriptions and to make additional investments in instruments in accordance with the Fund’s principal investment strategies to strive to meet the Fund’s investment objectives under all types of market conditions, including unfavorable market conditions.

Other investment company and ETF risk. Investments in open-end and closed-end investment companies, and other pooled investment vehicles, including any ETFs, involve substantially the same risks as investing directly in the instruments held by these entities. However, the total return from such investments will be reduced by the operating expenses and fees of the investment company or ETF. The Fund must pay its pro rata portion of an investment company’s or ETF’s fees and expenses, which may include performance fees that could be substantial (such as certain non-registered investment companies that may charge up to 20% or more of the gains on the Fund’s investments). An investment company or ETF may not achieve its investment objective or execute its investment strategy effectively, which may adversely affect the Fund’s performance. Shares of a closed-end investment company or ETF may expose the Fund to risks associated with leverage and may trade at a premium or discount to the NAV of the closed-end fund’s or the ETF’s portfolio securities depending on a variety of factors, including market supply and demand.

Portfolio management risk. Portfolio management risk is the risk that an investment strategy may fail to produce the intended results. There can be no assurance that the Fund will achieve its investment objective. The Adviser’s judgments about the attractiveness, value and potential appreciation of particular asset classes, sectors, securities, or other investments may prove to be incorrect and may not anticipate actual market movements or the impact of economic conditions generally. No matter how well a portfolio manager evaluates market conditions, the investments a portfolio manager chooses may fail to produce the intended result, and you could lose money on your investment in the Fund.

Portfolio turnover risk.   The Fund may sell securities without regard to the length of time they have been held to take advantage of new investment opportunities, when the Adviser believes either the securities no longer meet its investment criteria or for other reasons.  The Fund’s portfolio turnover rate may vary from year to year.  A high portfolio turnover rate (100% or more) increases a Fund’s transaction costs (including brokerage commissions and dealer costs), which would adversely impact a Fund’s performance.  Higher portfolio turnover may result in the realization of more short-term capital gains than if a Fund had lower portfolio turnover.

Prepayment risk. Many types of debt securities, including floating rate loans and mortgage-related securities, may reflect an interest in periodic payments made by borrowers. Although debt securities and other obligations typically mature after a specified period of time, borrowers may pay them off sooner. When a prepayment happens, all or a portion of the obligation will be prepaid. A borrower is more likely to prepay an obligation which bears a relatively high rate of interest. This means that in times of declining interest rates, there is a greater likelihood that the Fund’s higher yielding securities will be pre-paid and the Fund will probably be unable to re-invest those proceeds in an investment with as great a yield, causing the Fund’s yield to decline. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those investments at a premium, accelerated prepayments on those investments could cause the Fund to lose a portion of its principal investment and result in lower yields to shareholders. The increased likelihood of prepayment when interest rates decline also limits market price appreciation, especially certain loans and mortgage-backed securities. The effect of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility. Interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments.
 
Securities or sector selection risk. The risk that the securities held by the Fund will underperform securities held in other funds investing in similar asset classes or comparable benchmarks because of a portfolio manager’s choice of securities or sectors for investment. To the extent the Fund focuses or concentrates its investments in a particular sector or related sectors, the Fund will be more susceptible to events or factors affecting companies in that sector or related sectors. For example, the values of securities of companies in the same or related sectors may be negatively affected by the common characteristics they share, the common business risks to which they are subject, common regulatory burdens, or regulatory changes that affect them similarly.  Such characteristics, risks, burdens or changes include, but are not limited to, changes in governmental regulation, inflation or deflation, rising or falling interest rates, competition from new entrants, and other economic, market, political or other developments specific to that sector or related sectors.

Short position risk. The Fund may borrow an instrument from a broker or other institution and sell it to establish a short position in the instrument. The Fund may also enter into a derivative transaction in order to establish a short position with respect to a reference asset. The Fund may make a profit or incur a loss depending upon whether the market price of the instrument decreases or increases between the date the Fund established the short position and the date on which the Fund must replace the borrowed instrument or otherwise close out the transaction. An increase in the value of an instrument with respect to which the Fund has established a short position will result in a loss to the Fund, and there can be no assurance that the Fund will be able to close out the position at any particular time or at an acceptable price. The loss to the Fund from a short position is potentially unlimited.
 
Sovereign debt obligations risk . Investments in countries’ government debt obligations involve special risks. Certain countries have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt, balance of payments and trade difficulties and extreme poverty and unemployment. The issuer or governmental authority that controls the repayment of a country’s debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A debtor’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation and, in the case of a government debtor, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the government debtor’s policy towards the International Monetary Fund and the political constraints to which a government debtor may be subject. Government debtors may default on their debt and also may be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such disbursements may be conditioned on a debtor’s implementation of economic reforms and/or economic performance and the timely service of such debtor’s obligations.
 
Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties’ commitments to lend funds to the government debtor, which may further impair such debtor’s ability or willingness to service its debts on a timely basis. Holders of government debt, including the Fund, may be requested to participate in the rescheduling of such debt and to extend further loans to government debtors.
 
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As a result of the foregoing, a government obligor may default on its obligations. If such an event occurs, the Fund may have limited (or no) legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of foreign government debt securities to obtain recourse may be subject to the political climate in the relevant country. In addition, no assurance can be given that the holders of more senior  securities, such as commercial bank debt, will not contest payments to the holders of other foreign government debt securities in the event of default under their commercial bank loan agreements. There is no bankruptcy proceeding by which sovereign debt on which governmental entities have defaulted may be collected in whole or in part.
 
Government obligors in emerging market countries are among the world’s largest debtors to commercial banks, other governments, international financial organizations and other financial institutions. The issuers of the government debt securities in which the Fund may invest have in the past experienced substantial difficulties in servicing their external debt obligations, which led to defaults on certain obligations and the restructuring of certain indebtedness. Restructuring arrangements have included, among other things, reducing and rescheduling interest and principal payments by negotiating new or amended credit agreements, and obtaining new credit to finance interest payments. Holders of certain foreign government debt securities may be requested to participate in the restructuring of such obligations and to extend further loans to their issuers. There can be no assurance that the foreign government debt securities in which the Fund may invest will not be subject to similar restructuring arrangements or to requests for new credit, which may adversely affect the Fund’s holdings. Furthermore, certain participants in the secondary market for such debt may be directly involved in negotiating the terms of these arrangements and may therefore have access to information not available to other market participants.
Continuing uncertainty as to the status of the Euro and the European Monetary Union (“EMU”) has created significant volatility in currency and financial markets generally. Any partial or complete dissolution of the EMU could have significant adverse effects on currency and financial markets, and on the values of the Fund’s portfolio investments.

U.S. Government securities risk. Some U.S. Government securities, such as Treasury bills, notes, and bonds and mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Mae), are supported by the full faith and credit of the United States; others are supported by the right of the issuer to borrow from the U.S. Treasury; others are supported by the discretionary authority of the U.S. Government to purchase the agency’s obligations; still others are supported only by the credit of the issuing agency, instrumentality, or enterprise. Although U.S. Government-sponsored enterprises may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury, their obligations are not supported by the full faith and credit of the U.S. Government, and so investments in their securities or obligations issued by them involve greater risk than investments in other types of U.S. Government securities. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight and/or other consequences that could adversely affect the credit quality, availability or investment character of securities issued or guaranteed by these entities.

The events surrounding the U.S. federal government debt ceiling and any resulting agreement could adversely affect the Fund’s ability to achieve its investment objectives.  On August 5, 2011, S&P lowered its long-term sovereign credit rating on the U.S.  The downgrade by S&P and other future downgrades could increase volatility in both stock and bond markets, result in higher interest rates and lower Treasury prices and increase the costs of all kinds of debt.  These events and similar events in other areas of the world could have significant adverse effects on the economy generally and could result in significant adverse impacts on issuers of securities held by the Fund and the Fund itself.  The Adviser cannot predict the effects of these or similar events in the future on the U.S. economy and securities markets or on the Fund’s portfolio.  The Adviser may not timely anticipate or manage existing, new or additional risks, contingencies or developments.
 
 
PORTFOLIO HOLDINGS DISCLOSURE

A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund’s Statement of Additional Information. Currently, disclosure of the Fund’s holdings is required to be made quarterly within 60 days of the end of each fiscal quarter in the Annual Report and Semi-Annual Report to Fund shareholders and in the quarterly holdings report on Form N-Q. The Annual and Semi-Annual Reports will be available by contacting the Fund c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 or calling 866-530-2690 and on the SEC’s website at www.sec.gov. In addition, the Fund will make its top ten portfolio holdings information publicly available by posting the information on the Fund’s website www. gweiss.com/Solutions/Mutual-Funds/ within fifteen business days of each quarter end.

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Weiss Multi-Strategy Advisers LLC, located at   320 Park Avenue, New York, NY, has been a registered investment adviser since March 2010. The Adviser acts as a discretionary investment adviser to a number of private investment funds organized by the Adviser, as well as to a number of managed accounts owned by institutional investors over which it exercises sole investment discretion. The Adviser is majority-owned by GWA, LLC, a Connecticut limited liability company. GWA, LLC, in turn, is majority-owned by Weiss Family Interests LLC, which is majority-owned by various Weiss family trusts. A substantial number of the Adviser’s employees also own minority interests in GWA, LLC. As the investment adviser to the Fund, the Adviser oversees the provision of all management, administration, investment advisory and general services for the Fund.

Pursuant to the Investment Advisory Agreement, the Adviser is entitled to receive a fee at an annual rate of 1.60% of the average daily net assets of the Fund. This agreement will continue in effect until February 28, 2017, with successive renewal terms of one year unless terminated by the Board of Trustees prior to any such renewal.
 
In addition, the Adviser has contractually agreed to reduce its management fees and/or absorb expenses of the Fund until at least February 28, 2017 to ensure that total annual fund operating expenses after fee waiver and/or expense reimbursement (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) will not exceed 2.50%, 3.15%, 2.25%, and 2.15% of the daily average net assets of the Fund’s Class A, Class C, Class I, and Class K shares, respectively, subject to possible recoupment from the Fund in future years on a rolling three year basis ( i.e. within the three years after the fees have been waived or reimbursed) within the expense limitation in place at the time such amounts were waived or reimbursed.
 
A discussion describing the Board’s initial approval of the Investment Advisory Agreement between the Adviser and the Trust will be available in the Fund’s Semi-Annual Report to shareholders dated April 30, 2016.
 
PORTFOLIO MANAGERS

Jordi Visser joined the Adviser in 2005. Prior to that, he was the founding managing partner of Anchor Point Asset Management, a global macro fund, where he was responsible for the investment process, investment decisions and risk management. A former managing director at Morgan Stanley, Mr. Visser traded various global equity derivative books for nine years after spending two initial years as a controller. He opened the Morgan Stanley Office in Sao Paulo, Brazil, and managed the derivative sales and trading effort there during the 1997-98 emerging market crisis. Upon his return to New York in 1999, he managed a multi-billion dollar notional index option portfolio and was a member of the Equity Division Risk Committee. He is a magna cum laude graduate of Manhattan College and a board member of the School of Business at Manhattan College.

 
 
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Charles S. Crow IV, Quantitative Analyst, joined the Adviser in 2013. Prior to joining Weiss, he was a Vice President in Sales & Trading at Morgan Stanley where he primarily focused on fundamental factors, quantitative portfolio construction and long/short investment strategies. Prior to joining Morgan Stanley in 2007, Mr. Crow designed and implemented an automated market-making system utilizing statistical arbitrage theory at ArtIsoft, Inc. in  Princeton, NJ. In addition, he has authored and co-authored numerous professional publications within the quantitative space, as well as academic articles in the Operations Research Journal (INFORMS) and the Johns Hopkins Undergraduate Research Journal. He received his MS degree in Operations Research from Columbia University and BS degree in Computer Science from Johns Hopkins University.
Edward Olanow, Vice President, joined the Adviser in 2005. Currently, he is a member of the portfolio management team for the Weiss Alpha Balanced Risk Fund. Prior to that, he worked as a member of the Macro strategy team for nine years and was responsible for fundamental and quantitative research, as well as algorithmic trade management. Prior to joining the Adviser, Mr. Olanow spent two years at Anchor Point Asset Management as a quantitative analyst. Mr. Olanow began his investment career as a research analyst with Citibank Global Asset Management. He holds a BA in Economics from Emory University.

The Statement of Additional Information provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of shares in the Fund.
 
ADDITIONAL PAYMENTS TO DEALERS

The Adviser, out of its own resources, and without additional cost to the Fund or its shareholders, may provide additional cash payments or non-cash compensation to financial intermediaries who sell shares of the Fund, including affiliates of the Adviser. Such payments and compensation are in addition to any service fees paid by the Fund. These additional cash payments are generally made to financial intermediaries that provide shareholder servicing, marketing support and/or access to sales meetings, sales representatives and management representatives of the financial intermediaries. Cash compensation may also be paid to financial intermediaries for inclusion of the Fund on a sales list, including a preferred or select sales list, in other sales programs or as an expense reimbursement in cases where the financial intermediaries provide shareholder services to the Fund’s shareholders. The Adviser may also pay cash compensation in the form of finder’s fees that vary depending on the dollar amount of the shares sold.
 
 
 
 
 
SHAREHOLDER INFORMATION

HOW TO PURCHASE SHARES OF THE FUND

Minimum Investment

To purchase shares of the Fund, you must make at least the minimum initial investment (or subsequent investment) as shown in the table below. Class A and Class C shares are not currently available for purchase.

 
Minimum Initial
Investment
Minimum
Subsequent
Investment
Class A
$5,000
$1,000
Class C
$5,000
$1,000
Class I
$250,000
$1,000
Class K
$2,000,000
$1,000

Except with respect to the Class K shares, minimum initial and subsequent purchase amounts may be reduced or waived by the Adviser for specific investors or types of investors, including, without limitation, employee benefit plan investors, retirement plan investors, investors who invest in the Fund through an asset-based fee program made available through a financial intermediary, customers of investment advisers, brokers, consultants and other intermediaries that recommend the Fund, employees of the Adviser and its affiliates and their family members, investment advisory clients of the Adviser, and current or former Trustees of the Trust and their family members.  Certain financial intermediaries also may have investment minimums, which may differ from the Fund's minimums, and may be waived at the intermediaries' discretion. If your investment is aggregated into an omnibus account established by an investment adviser, broker, consultant or other financial intermediary, the account minimums apply to the omnibus account, not to your individual investment.
 
 
Choosing a Share Class

This Prospectus describes four classes of shares offered by the Fund: Class A, Class C, Class I and Class K.  The Fund offers these classes of shares so that you can choose the class that best suits your investment needs.  The main differences between each class are sales charges, ongoing fees and minimum investment amounts.  Each class of shares of the Fund represents an interest in the Fund’s portfolio of investments.  There is no investment minimum on reinvested distributions and the Fund may change investment minimums at any time.  
 
 
When deciding which class of shares to purchase, you should consider your investment goals, present and future amounts you may invest in the Fund, and the length of time you intend to hold your shares.  To help you make a determination as to which class of shares to buy, please refer back to the examples of the Fund’s expenses over time in the “Fees and Expenses of the Fund” section in this Prospectus.  You also may wish to consult with your financial adviser for advice with regard to which share class would be most appropriate for you.

Class A Shares . Class A shares of the Fund are not yet available for purchase. Class A shares of the Fund are retail shares that require that you pay a sales charge when you invest in the Fund unless you qualify for a reduction or waiver of the sales charge.  Class A shares are also subject to Rule 12b-1 fees (or distribution fees) of 0.25% of average daily net assets and shareholder servicing fees of 0.10% of the average daily net assets, which is assessed against the shares of the Fund.
 
When available, if you purchase Class A shares of the Fund you will pay the offering price which is the NAV next determined after your order is received by either the Fund’s transfer agent or a financial intermediary, plus a front-end sales charge (shown in percentages below) depending on the amount of your investment.  Since sales charges are reduced for Class A share purchases above certain dollar amounts, known as “breakpoint thresholds,” the offering price is lower for these purchases.  The dollar amount of the sales charge is the difference between the offering price of the shares purchased (based on the applicable sales charge in the table below) and the NAV of those shares.  Because of rounding in the calculation of the offering price, the actual sales charge you pay may be more or less than that calculated using the percentages shown below.


Investment Amount
Front-end Sales Charge
as a % of
Offering Price (1)
Sales Charge as a % of
Net Amount Invested
Dealer Reallowance as a
% of Offering Price
Less than $50,000
5.50%
5.82%
5.50%
$50,000 to $99,999
4.75%
4.99%
4.75%
$100,000 to $249,999
3.75%
3.90%
3.75%
$250,000 to $499,999
3.00%
3.09%
3.00%
$500,000 to $1,000,000
2.00%
2.04%
2.00%
$1,000,000 or more (2)
0.00%
0.00%
0.00%

(1)
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.
(2)
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.
 

The Distributor will receive all front-end sales charges paid for the purchase of Class A shares of the Fund when such purchases are made without a dealer of record.

Class A Sales Charge Reductions and Waivers. You may be able to reduce the sales charge on Class A shares of the Fund based on the type of transaction, the combined market value of your accounts or intended investment, and for certain groups or classes of shareholders.  If you believe you are eligible for any of the following reductions or waivers, it is up to you to inform the Fund or financial intermediary that you may be eligible for a reduction and to provide appropriate proof of eligibility.

Reinvested Distributions:   You pay no sales charges on Class A shares you buy with reinvested distributions from Class A distributions from the Fund.

Letter of Intent (“LOI”):   By signing an LOI prior to purchase, you pay a lower sales charge now in exchange for promising to invest an amount within the next 13 months sufficient to meet one of the above breakpoint thresholds.  Your individual purchases will be made at the applicable sales charge based on the amount you plan to invest over the 13-month period. Reinvested distributions do not count as purchases made during this period.  Any shares purchased within 90 days of the date you sign the LOI may be used as credit toward completion, but the reduced sales charge will only apply to new purchases made on or after that date.  The Fund will hold in escrow shares equal to approximately 5% of the amount of shares you indicate in the LOI.  If you do not invest the amount specified in the LOI before the expiration date, the Transfer Agent will redeem a sufficient amount of escrowed shares to pay the difference between the reduced sales load you paid and the sales load you would have paid based on the total amount actually invested in Class A shares as of the expiration date.  Otherwise, the Transfer Agent will release the escrowed shares when you have invested the agreed amount.

Rights of Accumulation (“ROA”):   You may combine the value at the current offering price of Class A shares of the Fund with a new purchase of Class A shares of the Fund to reduce the sales charge on the new purchase.  The sales charge for the new shares will be figured at the rate in the table above that applies to the combined value of your currently owned shares and the amount of the new investment.  ROA allows you to combine the value of your account with the value of other eligible accounts for purposes of meeting the breakpoint thresholds above.

 
 
You may aggregate your eligible accounts with the eligible accounts of members of your immediate family to obtain a breakpoint discount.  The types of eligible accounts that may be aggregated to obtain the breakpoint discounts described above include individual accounts, joint accounts and certain IRAs.

For the purpose of obtaining a breakpoint discount, members of your “immediate family” include your spouse, child, stepchild, parent, sibling, grandchild and grandparent, in each case including in-law and adoptive relationships.  In addition, a fiduciary can count all shares purchased for a trust, estate or other fiduciary account (including one or more employee benefit plans of the same employer) that has multiple accounts.  Eligible accounts include those registered in the name of your financial intermediary through which you own shares in the Fund.

Certain groups or classes of shareholders: If you fall into any of the following categories, you can buy Class A shares at NAV without a sales charge:
·  
Current and retired employees, directors/trustees and officers of:
o  
The Trust;
o  
The Adviser and its affiliates; and
o  
Family members (spouse, domestic partner, parents, grandparents, children, grandchildren and siblings (including step and in-law)) of any of the above.
·  
Any trust, pension, profit sharing or other benefit plan for current employees, directors/trustees and officers of the Adviser and its affiliates.
·  
Current employees of:
o  
The Transfer Agent;
o  
Broker-dealers who act as selling agents for the Fund/Trust; and
o  
Family members (spouse, domestic partner, parents, grandparents, children, grandchildren and siblings (including step and in-law)) of any of the above.
·  
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.
Information regarding the Fund’s sales charges, breakpoint thresholds and waivers is not separately available on the Fund’s website because the Fund’s Prospectus, in which this information is disclosed, is available on the website.
 
Converting to Class I.   You may be able to convert Class A shares to Class I shares at any time if you are eligible to purchase Class I shares.  To request a conversion, please contact the Fund’s transfer agent at 866-530-2690 or mail your request to:

For regular mail delivery:
For an overnight delivery:
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202-5207

Class C Shares . Class C shares of the Fund are not yet available for purchase. When available, you can buy Class C shares at the offering price, which is the NAV without an up-front sales charge. Class C shares are subject to annual Rule 12b-1 distribution fee of 0.75% and shareholder servicing fees of 0.25% (discussed below in the section entitled “Distributions (12b-1) and Shareholder Servicing Fees”). The Rule 12b-1 distribution fee compensates your financial intermediary for providing distribution services and the shareholding service fee compensates your financial intermediary for providing ongoing service to you. The Distributor pays your financial intermediary a 1.00% up-front sales commission, which includes an advance of the first year’s service and distribution fees. The Distributor retains the service and distribution fees in the first year to reimburse itself for paying your financial intermediary a 1.00% up-front sales commission and retains the service and distribution fees on accounts with no authorized dealer of record.

If you redeem your Class C shares within 12 months of purchase, you will pay a CDSC of 1.00% based on the lesser of original cost or current market value. For example, if you purchased $10,000 worth of shares, which due to market fluctuation have appreciated to $15,000, the CDSC will be assessed on your $10,000 purchase. If that same $10,000 purchase has depreciated to $5,000, the CDSC will be assessed on the $5,000 value. For purposes of calculating the CDSC, the start of the 12-month holding period is the first day of the month in which the purchase was made. The Fund will use the “first in, first out” (“FIFO”) method to determine the holding period; this means that if you bought shares on different days, the shares purchased first will be redeemed first for the purpose of calculating the CDSC.

CDSC Waivers for Class C Shares . The CDSC for Class C shares will be waived:

·
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;
·
in the event   of the death of the shareholder (including a registered joint owner);
·
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
 
If you redeem your Class C shares within 12 months of purchase, you will pay a CDSC of 1.00% based on the lesser of original cost or current market value. For example, if you purchased $10,000 worth of shares, which due to market fluctuation have appreciated to $15,000, the CDSC will be assessed on your $10,000 purchase. If that same $10,000 purchase has depreciated to $5,000, the CDSC will be assessed on the $5,000 value. For purposes of calculating the CDSC, the start of the 12-month holding period is the first day of the month in which the purchase was made. The Fund will use the “first in, first out” (“FIFO”) method to determine the holding period; this means that if you bought shares on different days, the shares purchased first will be redeemed first for the purpose of calculating the CDSC.

CDSC Waivers for Class C Shares . The CDSC for Class C shares will be waived:

·
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;
·
in the event   of the death of the shareholder (including a registered joint owner);
·
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
 
· 
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).
 
More information regarding the Fund’s sales charges and waivers is available in the SAI and free of charge on the Fund’s website: www.gweiss.com/Solutions/Mutual-Funds/
Class I Shares. Class I shares do not carry a sales charge.  Class I shares are available for purchase at the NAV per share next determined after your order is received   by either the Fund’s transfer agent or a financial intermediary.  Class I shares are subject to a shareholder servicing fee of 0.10% of the average daily net assets of the Fund and have an investment minimum of $250,000.

The following persons will be eligible to invest in Class I shares:
·  
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
·  
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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Class K Shares. Class K shares do not have any sales charge, 12b-1 fees or shareholder servicing fees. Class K shares are available for purchase at the NAV next determined after your order is received by either the Fund’s transfer agent of a financial intermediary, and are subject to a $2 million investment minimum.

Good Order Purchase Requests

When making a purchase request, make sure your request is in good order.  “Good order” means your request includes:

§
the name of the Fund
§
the dollar amount of shares to be purchased
§
account application form or investment stub
§
check payable to The Weiss Alternative Balanced Risk Fund

All purchases by check must be in U.S. dollars and drawn on U.S. banks.  The Fund will not accept payment in cash or money orders. Also, to prevent check fraud, the Fund will not accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase of shares.  The Fund is unable to accept post-dated checks or any conditional order or payment.

If your check is returned for any reason, the transfer agent will assess a $25 fee against your account.  You will also be responsible for any losses suffered by the Fund as a result.

Shares of the Fund have not been registered for sale outside of the United States. The Fund generally does not sell shares to investors residing outside the United States, even if they are United States citizens or lawful permanent residents, except to investors with United States military APO or FPO addresses.
 
 
Purchase by Mail

For direct investments through the Fund’s transfer agent, you should:
 
·  
Complete and sign the account application;
·  
To open an account, write a check payable to: “Weiss Alternative Balanced Risk Fund”
·  
Send your account application and check to one of the addresses listed below;
·  
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.

For regular mail delivery:
For an overnight delivery:
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202-5207

The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agent. Therefore, deposit in the mail or with such services, or receipt at U.S. Bancorp Fund Services, LLC post office box, of purchase orders or redemption requests does not constitute receipt by the transfer agent of the Fund.

Purchase by Wire

If you are making your first investment in the Fund, before you wire funds, please contact the transfer agent by phone to make arrangements with a representative to submit your completed account application via mail, overnight delivery or facsimile. Upon receipt of your completed account application, an account will be established for you and a service representative will contact you within 24 hours to provide you with an account number. Once your account has been established, you may instruct your bank to initiate the wire using the instructions provided below.

For either initial or subsequent investments, prior to sending the wire, please call the transfer agent at 866-530-2690 to advise of your wire to ensure proper credit upon receipt. Your bank must include the name of the Fund, your name and account number so that your wire can be correctly applied.

Instruct your bank to send the wire to:
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 #)

Your bank may impose a fee for investments by wire. You will receive the NAV for the day that your wired funds have been received by the transfer agent. Wired funds must be received prior to the close of the New York Stock Exchange (“NYSE”), generally 4:00 p.m., Eastern time, to be eligible for same day pricing. Wires received after the close of the NYSE will be considered received by the next business day. The Fund and the transfer agent are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system or from incomplete wiring instructions. If you have questions about how to invest by wire, you may call the Fund at 866-530-2690.
 
 
Purchase by Telephone

If you did not decline telephone transactions on your account application, if you included a voided check, and your account has been open for 15 calendar days, you may purchase additional shares in the amount of $1,000 or more from your bank account upon request by telephoning the Funds toll free at 866-530-2690. Telephone orders will be accepted via electronic funds transfer from your pre-designated bank account through the Automated Clearing House (“ACH”) network. You must have banking information established on your account prior to making a purchase. Only bank accounts held at domestic institutions that are ACH members may be used for telephone transactions. If your order is received prior to the close of the NYSE, generally 4:00 p.m. Eastern time, shares will be purchased at the NAV next calculated. For security reasons, requests by telephone are recorded.

Automatic Investment Plan

If you intend to use an Automatic Investment Plan (“AIP”), you may open your account with the initial minimum investment required for that class.  Once your account has been opened, you may purchase shares of the Fund through the AIP in amounts of at least $100.  If you chose this option, funds will be automatically transferred from your bank account monthly.  To be eligible for this plan, your bank must be a domestic institution that is an ACH member.  The Fund may modify or terminate the AIP at any time.  The first AIP purchase will take place no earlier than 15 days after the transfer agent has received your request.  If your bank rejects your payment, the transfer agent will charge a $25 fee to your account.  To begin participating in the AIP, please complete the Automatic Investment Plan section on the account application.  Any request to change or terminate your AIP should be submitted to the transfer agent five days prior to effective date.

 
 

Purchases Placed with Financial Intermediaries

You may buy and sell shares of the Fund through certain financial intermediaries. Your order will be priced at a Fund’s NAV next computed after it is received by a financial intermediary. A financial intermediary may hold your shares in an omnibus account in the financial intermediary’s name and the financial intermediary may maintain your individual ownership records. If your investment is aggregated into an omnibus account established by an investment adviser, broker or other intermediary, the account minimums apply to the omnibus account, not to your individual investment. Your financial intermediary may impose investment minimum requirements that are different from those set forth in this Prospectus.  The Fund may pay the financial intermediary for maintaining individual ownership records as well as providing other shareholder services. Financial intermediaries may charge fees for the services they provide to you in connection with processing your transaction order or maintaining your account with them. Financial intermediaries are responsible for placing your order correctly and promptly with the Fund, forwarding payment promptly, as well as ensuring that you receive copies of the Fund’s Prospectus. The Fund will be deemed to have received a purchase or redemption order when a financial intermediary, or its authorized designee, receives the order. If you transmit your order with these financial intermediaries before the close of regular trading (generally, 4:00 p.m., Eastern time) on a day that the NYSE is open for business, your order will be priced at a Fund’s NAV next computed after it is received by the financial intermediary. Investors should check with their financial intermediary to determine if it is subject to these arrangements.

HOW TO REDEEM SHARES OF THE FUND

Redeeming Shares

If you redeem through a financial intermediary, the financial intermediary may charge you a transaction fee. If you purchased your shares by check, you may not receive your redemption proceeds until your check has cleared, which may take up to 15 calendar days. Redemptions will be processed only on a day during which the NYSE is open for business. You may receive the proceeds of redemption by check, wire or via electronic funds transfer through the ACH network. Please note that certain fees may apply depending on the timing or manner in which you redeem shares. Requests to redeem shares are processed at the NAV next calculated after we or your financial intermediary receives your request in good order.
 
Shareholders who have an IRA or other retirement plan must indicate on their redemption request whether or not to withhold federal income tax. Redemption requests failing to indicate an election not to have tax withheld will generally be subject to a 10% withholding tax.

Redeem by Mail

To redeem by mail, please:

·  
Provide your name and account number;
·  
Specify the number of shares or dollar amount to be redeemed and the Fund name or number;
·  
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
·  
Send your request to the appropriate address as given under “Purchasing by Mail”.

 
 

Redeem by Telephone

Unless you declined the option on your account application, you may redeem your shares of the Fund by telephone. In order to arrange for the telephone redemption option after your account has been established, or to change the bank account or address designated to which redemption proceeds are sent, you must send the Fund’s transfer agent a written request. The request must be signed by each shareholder of the account. The transfer agent may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source. To redeem by telephone, call the transfer agent at 866-530-2690 between the hours of 9:00 a.m. and 8:00 p.m. Eastern time on a day the NYSE is open for business. Shares of the Funds will be sold in your account at the NAV determined on the day your order is placed prior to market close (generally, 4:00 p.m., Eastern time); any redemption requests made after market close will receive the Fund’s next calculated NAV price.

Before executing an instruction received by telephone, the transfer agent will use reasonable procedures to confirm that the telephone instructions are genuine. The telephone call may be recorded and the caller may be asked to verify certain personal identification information. If the Fund or its agents follow these procedures, they cannot be held liable for any loss, expense or cost arising out of any telephone redemption request that is reasonably believed to be genuine. This includes fraudulent or unauthorized requests. The Fund may change, modify or terminate these privileges at any time upon at least 60 days’ written notice to shareholders. Once a telephone transaction has been placed, it cannot be canceled or modified. If you have a retirement account, you may not redeem shares by telephone. If an account has more than one owner or authorized person, the Fund will accept telephone instructions from any one owner or authorized person. During periods of high market activity, you may encounter higher than usual wait times. Please allow sufficient time to ensure that you will be able to complete your telephone transaction prior to market close. Neither the Fund nor its transfer agent will be held liable if you are unable to place your trade due to high call volume.

Systematic Withdrawal Program

The Fund offers a systematic withdrawal plan (the “SWP”) whereby shareholders or their representatives may request a redemption in a specific dollar amount be sent to them each month, calendar quarter or annually.  Investors may choose to have a check sent to the address of record, or proceeds may be sent to a pre-designated bank account via the ACH network.  To start this program, your account must have Fund shares with a value of at least the minimum initial investment required for that class and the minimum payment amount is $100.  This program may be terminated or modified by the Fund at any time.  Any request to change or terminate your SWP should be communicated in writing or by telephone to the transfer agent no later than five days before the next scheduled withdrawal.  A withdrawal under the SWP involves redemption of Fund shares, and may result in a gain or loss for federal income tax purposes.  In addition, if the amount withdrawn exceeds the amounts credited to your account, the account ultimately may be depleted.  To establish the SWP, complete the SWP section of the Account Application.  Please call 866-530-2690 for additional information regarding the SWP.
 
Through a Financial Intermediary

You may redeem the Fund’s shares through your financial intermediary. Redemptions made through a financial intermediary may be subject to procedures established by that institution. Your financial intermediary is responsible for sending your order to the Fund and for crediting your account with the proceeds. For redemption through financial intermediaries, orders will be processed at the NAV next effective after receipt of the order by the financial intermediary. Please keep in mind that your financial intermediary may charge additional fees for its services. Investors should check with their financial intermediaries to determine if they are subject to these arrangements.

 
 

ACCOUNT AND TRANSACTION POLICIES

Redemption Fee

The Fund will assess a 1.00% fee on the redemption of Fund shares held for 90 days or less. The Fund uses the “first in first out” (“FIFO”) method to determine the holding period; this means that if you purchase shares on different days, the shares you held longest will be redeemed first for purposes of determining whether the short-term trading fee applies. The redemption fee is deducted from your proceeds and is retained by the Fund for the benefit of its long-term shareholders. This fee does not apply to (1) shares purchased through reinvested dividends or capital gains; (2) Fund redemptions under the Fund’s SWP; (3) the redemption of shares previously purchased under an AIP; (4) the involuntary redemption of low balance accounts; or (5) sales of Fund shares made in connection with non-discretionary portfolio rebalancing associated with certain asset-allocation programs managed by fee based investment advisers, certain wrap accounts, and retirement plans. The Fund’s redemption fee will also be waived on sales of Fund shares made in connection with non-discretionary portfolio rebalancing associated with certain wrap accounts and certain retirement plans. The Fund reserves the right to change the terms and amount of this fee upon at least 60 days’ notice to shareholders.
 
Although the Fund has the goal of applying this redemption fee to most redemptions of shares held for less than 90 calendar days, the Fund may not always be able to track short-term trading effected through financial intermediaries in non-disclosed or omnibus accounts. While the Fund has entered into information sharing agreements with such financial intermediaries as described under “Tools to Combat Frequent Transactions” which contractually require such financial intermediaries to provide a Fund with information relating to its customers investing in a Fund through non-disclosed or omnibus accounts, the Fund cannot guarantee the accuracy of the information provided to it from financial intermediaries and may not always be able to track short-term trading effected through these financial intermediaries. In addition, because the Fund is required to rely on information provided by the financial intermediary as to the applicable redemption fee, the Fund cannot ensure that the financial intermediary is always imposing such fee on the underlying shareholder in accordance with the Fund’s policies.
 
Tools to Combat Frequent Transactions

The Fund is intended for long-term investors. Short-term “market-timers” who engage in frequent transactions and redemptions may disrupt the Fund’s investment program and create additional transaction costs that are borne by all shareholders. The Board has adopted a policy regarding excessive trading. The Fund discourages excessive, short-term trading and other abusive trading practices that may disrupt portfolio management strategies and harm performance. The Fund takes steps to reduce the frequency and effect of these activities in the Fund. These steps may include, among other things, monitoring trading activity, imposing redemption fees, if necessary, or using fair value pricing when appropriate, under procedures as adopted by the Board, when the Adviser determines current market prices are not readily available. As approved by the Board, these techniques may change from time to time as determined by the Fund in its sole discretion.

In an effort to discourage abusive trading practices and minimize harm to the Fund and its shareholders, the Fund reserves the right, in its sole discretion, to reject any purchase order, in whole or in part, for any reason (including, without limitation, purchases by persons whose trading activity in the Fund’s shares is believed by the Adviser to be harmful to the Fund) and without prior notice. A Fund may decide to restrict purchase and sale activity in its shares based on various factors, including whether frequent purchase and sale activity will disrupt portfolio management strategies and adversely affect the Fund’s performance. Although these efforts are designed to discourage abusive trading practices, these tools cannot eliminate the possibility that such activity will occur. The Fund seeks to exercise its judgment in implementing these tools to the best of its ability in a manner that it believes is consistent with shareholder interests. Except as noted in the Prospectus, the Fund applies all restrictions uniformly in all applicable cases.

 
 
 
Due to the complexity and subjectivity involved in identifying abusive trading activity and the volume of shareholder transactions the Fund handles, there can be no assurance that the Fund’s efforts will identify all trades or trading practices that may be considered abusive. In particular, since the Fund receives purchase and sale orders through financial intermediaries that use group or omnibus accounts, the Fund cannot always detect frequent trading. However, the Fund will work with financial intermediaries as necessary to discourage shareholders from engaging in abusive trading practices and to impose restrictions on excessive trades. In this regard, the Fund has entered into information sharing agreements with financial intermediaries pursuant to which these intermediaries are required to provide to the Fund, at its request, certain information relating to its customers investing in the Fund through non-disclosed or omnibus accounts. The Fund will use this information to attempt to identify abusive trading practices. Financial intermediaries are contractually required to follow any instructions from the Fund to restrict or prohibit future purchases from shareholders that are found to have engaged in abusive trading in violation of the Fund’s policies. However, the Fund cannot guarantee the accuracy of the information provided to them from financial intermediaries and cannot ensure that they will always be able to detect abusive trading practices that occur through non-disclosed and omnibus accounts. As a consequence, the Fund’s ability to monitor and discourage abusive trading practices in omnibus accounts may be limited.
 
Proceeds
 
Proceeds will generally be sent no later than seven calendar days after the Fund receives your redemption request. If elected on your account application, you may have the proceeds of the redemption request sent by check to your address of record, by wire to a pre-determined bank, or by electronic funds transfer via the ACH network to the bank account designated by you on your account application. The minimum wire amount is $1,000 and there is a $15 fee for each wire transfer. When proceeds are sent via the ACH network, the funds are usually available in your bank account in two to three business days.
 
Check Clearance
 
The proceeds from a redemption request may be delayed up to 15 calendar days from the date of the receipt of a purchase check until the check clears. If the check does not clear, you will be responsible for any losses suffered by the Fund as well as a $25 service charge imposed by the transfer agent. This delay can be avoided by purchasing shares by wire.
 
 
Suspension of Redemptions

The Fund may temporarily suspend the right of redemption or postpone payments under certain emergency circumstances or when the SEC orders a suspension.

Signature Guarantees

The transfer agent may require a signature guarantee for certain redemption requests. A signature guarantee assures that your signature is genuine and protects you from unauthorized account redemptions. A signature guarantee of each owner, from either a Medallion program member or a non-Medallion program member, is required in the following situations:

·  
For all redemption requests in excess of $50,000;
·  
If a change of address request has been received by the transfer agent within the last 30 calendar days;
·  
When requesting a change in ownership on your account; and
·  
When redemption proceeds are payable or sent to any person, address or bank account not on record.

 
 
Non-financial transactions including establishing or modifying certain services on an account may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source.
 
In addition to the situations described above, the Fund and/or the transfer agent may require a signature guarantee in other instances based on the circumstances relative to the particular situation. Signature guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program and the Securities Transfer Agents Medallion Program (“STAMP”). A notary public is not an acceptable signature guarantor.

Customer Identification Program

Please note that, in compliance with the USA PATRIOT Act of 2001, the transfer agent will verify certain information on your account application as part of the Fund’s Anti-Money Laundering Program. As requested on the account application, you should supply your full name, date of birth, social security number and permanent street address. Mailing addresses containing only a P.O. Box will not be accepted. If you do not supply the necessary information, the transfer agent may not be able to open your account. Please contact the transfer agent at 866-530-2690 if you need additional assistance when completing your account application. If the transfer agent is unable to verify your identity or that of another person authorized to act on your behalf, or if it believes it has identified potentially criminal activity, the Fund reserves the right to temporarily limit additional share purchases, close your account or take any other action it deems reasonable or required by law. The Fund also reserves the right to close the account within five business days if clarifying information/documentation is not received.

No Certificates

The Fund does not issue share certificates.
   
Right to Reject Purchases

The Fund reserves the right to reject any purchase in whole or in part. The Fund may cease taking purchase orders at any time when the Adviser believes it is in the best interest of the current shareholders. The purpose of such action is to limit increased Fund expenses incurred when certain investors buy and sell shares of the Fund for the short-term when the markets are highly volatile.

Redemption In-Kind

The Fund reserves the right to pay redemption proceeds to you in whole or in part by a distribution of securities from the Fund’s portfolio (a “redemption in-kind”). It is not expected that the Fund would do so except during unusual market conditions. If the Fund pays your redemption proceeds by a distribution of securities, you could incur brokerage or other charges in converting the securities to cash and will bear any market risks associated with such securities until they are converted into cash. A redemption in-kind is treated as a taxable transaction and a sale of the redeemed shares, generally resulting in capital gain or loss to you, subject to certain loss limitation rules.

Small Accounts

To reduce expenses, the Fund may redeem an account if the total value of the account falls below $5,000 due to redemptions. An investor will be given 30 days’ prior written notice of this redemption. During that period, an investor may purchase additional shares to avoid the redemption.

 
 
 
Householding

In an effort to decrease costs, the Fund will reduce the number of duplicate Prospectuses and annual and semi-annual reports that you receive by sending only one copy of each to those addresses shown by two or more accounts. Please call the transfer agent toll free at 866-530-2690 to request individual copies of these documents. The Fund will begin sending individual copies 30 calendar days after receiving your request. This policy does not apply to account statements.
 
Unclaimed Property

Mutual fund accounts may be transferred to an investor’s state of residence if no activity occurs within the account during the “inactivity period” specified in the applicable state’s abandoned property laws.

PRICING FUND SHARES

Net Asset Value

Shares of a Fund are sold at its NAV, plus and applicable sales charge. The NAV is determined by dividing the value of the Fund’s securities, cash and other assets, minus all liabilities, by the number of shares outstanding (assets – liabilities / number of shares = NAV). The NAV takes into account the expenses and fees of the Fund, including management, administration and other fees, which are accrued daily. The Fund’s share price is calculated as of the close of regular trading (generally, 4:00 p.m. Eastern time) on each day that the NYSE is open for business.

All shareholder transaction orders received in good order (as described above under “How to Purchase Shares of the Fund”) by the transfer agent, or an authorized financial intermediary by the close of the NYSE, generally 4:00 p.m. Eastern time, will be processed at the applicable price on that day. Transaction orders received after the close of the NYSE will receive the applicable price on the next business day. The Fund’s NAV, however, may be calculated earlier if trading on the NYSE is restricted or as permitted by the SEC. The Fund does not determine the NAV of its shares on any day when the NYSE is not open for trading, such as weekends and certain national holidays as disclosed in the SAI (even if there is sufficient trading in its portfolio securities on such days to materially affect the NAV). In certain cases, fair value determinations may be made as described below under procedures as adopted by the Board.
 
Fair Value Pricing

Occasionally, reliable market quotations are not readily available or there may be events affecting the value of foreign securities or other securities held by the Fund that occur when regular trading on foreign exchanges is closed, but before trading on the NYSE is closed. Fair value determinations are then made in good faith in accordance with procedures adopted by the Board. Generally, the fair value of a portfolio security or other asset shall be the amount that the owner of the security or asset might reasonably expect to receive upon its current sale.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Fund would compare the new market quotation to the fair value price to evaluate the effectiveness of its fair valuation procedures. If any significant discrepancies are found, the Fund may adjust its fair valuation procedures.

 
 
 
DISTRIBUTION (12b-1) FEES

The Trust has adopted a Rule 12b-1 distribution plan (the “Rule 12b-1 Plan”) under which the Fund is authorized to pay to the Distributor or such other entities as approved by the Board, as compensation for the distribution-related services provided by such entities, an aggregate fee equal to 0.25% of the average daily net assets of the Class A shares and 0.75% of the average daily net assets of the Class C shares of the Fund.  The Distributor may pay any or all amounts received under the Rule 12b-1 Plan to other persons, including the Adviser, for any distribution service or activity designed to retain Fund shareholders. Because the Fund pays distribution fees on an ongoing basis, your investment cost over time may be higher than paying other types of sales charges.

SHAREHOLDER SERVICING FEES

The Trust has also adopted a shareholder servicing plan (the “Shareholder Servicing Plan”) under which, the Adviser is authorized to engage financial institutions, securities dealers and other industry professionals to provide personal shareholder services relating to the servicing and maintenance of shareholder accounts not otherwise provided to the Fund. Payments made pursuant to the Shareholder Servicing Plan shall not exceed 0.10% of the average daily net asset value of the Fund’s Class A and Class I shares and 0.25 % of the average daily net assets of the Class C shares.
 
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION

For federal income tax purposes, all dividends and distributions of net realized short-term capital gains you receive from the Fund are taxable as ordinary income or as qualified dividend income, whether reinvested in additional shares or received in cash, unless you are exempt from taxation or entitled to a tax deferral.  Distributions of net realized long-term capital gains you receive from the Fund, whether reinvested in additional shares or received in cash, are taxable as a capital gain.  The capital gain holding period is determined by the length of time the Fund has held the security and not the length of time you have held shares in the Fund.  The Fund expects that, because of its investment objective, its distributions will consist primarily of long- and short-term capital gains (rather than dividend income).  You will be informed annually as to the amount and nature of all dividends and capital gains paid during the prior year.  Such capital gains and dividends may also be subject to state or local taxes.  If you are not required to pay taxes on your income, you are generally not required to pay federal income taxes on the amounts distributed to you.
 
 
The Fund may be subject to foreign taxes and withholding on dividends and interest earned with respect to securities of foreign corporations. Based on the principal investment strategies of the Fund, it is not expected that the Fund will be eligible to pass through to shareholders any credits or deductions with respect to such foreign taxes.

The Fund intends to pay dividends from net investment income annually and to distribute all net realized capital gains at least annually.  In addition, the Fund may make additional distributions if necessary to avoid imposition of a 4% excise tax or other tax on undistributed income and gains.  However, no assurances can be given that distributions will be sufficient to eliminate all taxes.  Please note, however, that the objective of the Fund is growth of capital, not the production of distributions.  You should measure the success of your investment by the value of your investment at any given time and not by the distributions you receive.

 
 

When a dividend or capital gain is distributed, the Fund's NAV decreases by the amount of the payment.  If you purchase shares shortly before a distribution, you will be subject to income taxes on the distribution, even though the value of your investment (plus cash received, if any) remains the same.  All dividends and capital gains distributions will automatically be reinvested in additional Fund shares at the then prevailing NAV unless you specifically request that either dividends or capital gains or both be paid in cash.  If you elect to receive distributions and dividends by check and the post office cannot deliver the check, or if the check remains uncashed for six months, the Fund reserves the right to reinvest the distribution check in your Fund account at the then current NAV per share and to reinvest all subsequent distributions in shares of the Fund.
 
The election to receive dividends or reinvest them may be changed by writing to the Fund at:
 
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
 
You may also change your distribution election by telephoning the Fund at 866-530-2690.
 
In order to allow sufficient processing time for a change in distribution elections, any change must be received at least 5 days prior to the record date for the distribution.
 
By law, the Fund must withhold a percentage of your taxable distribution and redemption proceeds if you do not provide your correct social security or taxpayer identification number and certify that you are not subject to backup withholding, or if the IRS instructs the Fund to do so.
 
Federal law requires that mutual fund companies report their shareholders' cost basis, gain/loss and holding period to the IRS on the shareholders' Consolidated Form 1099s when “covered” shares of the mutual funds are sold.  Covered shares are any fund and/or dividend reinvestment plan shares acquired on or after January 1, 2012.
 
The Fund has chosen “first-in, first-out” (“FIFO”) as its standing (default) tax lot identification method for all shareholders, which means this is the method the Fund will use to determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing NAVs, and the entire position is not sold at one time.  You may choose a method other than the Fund’s standing method at the time of your purchase or upon sale of covered shares.  The cost basis method a shareholder elects may not be changed with respect to a redemption of shares after the settlement date of the redemption.  Fund shareholders should consult with their tax advisors to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how the new cost basis reporting rules may apply to them.
 
 
The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. You also may be subject to state and local tax on Fund distributions and sales of Fund shares. Consult your personal tax advisor about the potential tax consequences of an investment in Fund shares under all applicable tax laws. For more information, please see the section entitled “Federal Income Taxes” in the SAI.
 
 


FINANCIAL HIGHLIGHTS

No financial highlights are presented because the Fund had not commenced investment operations prior to the date of this Prospectus.
 
 
 
PRIVACY NOTICE
 
ATTACHMENT L:  PRIVACY NOTICE
 
 
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”) .
 
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
 
 
 

Page 2
 
 
What we do
 
How do the Weiss Entities protect my personal information?
We maintain physical, electronic, and procedural safeguards that comply with applicable law to protect your non-public personal financial information. These measures include computer safeguards and secured files and buildings.
 
 
How do the Weiss Entities collect my personal information?
We collect your personal information, for example, when you:
  §   Give us your contact information
  §   Purchase an interest in the fund
  §   Make a wire transfer
  §   Show us your government issued identification
 
 
 
Why can't I limit all sharing?
Federal law gives you the right to limit only our sharing with respect to:
  §   sharing  information  about  your  creditworthiness  with  affiliates  for  their everyday business purposes
  §   sharing information with affiliates so that they can market their products to you
  §   sharing with non-affiliates to market to you
State laws and individual companies may give you additional rights to limit sharing.
 
Definitions
 
 
 
Affiliates
Companies related by common ownership or control. They can be financial and nonfinancial companies.
 
  §   Our affiliates include companies with the Weiss Multi-Strategy name such as Weiss Multi-Strategy Funds LLC, our affiliated broker-dealer as well as GWA, LLC and Weiss Special Operations LLC.
 
 
Non-affiliates
 
Companies not related by common ownership or control. They can be financial and nonfinancial companies.
 
  §   The  Weiss  Entities  do  not  share  personal  financial  information  with  non- affiliates for the purpose of their marketing efforts
 
 
Joint Marketing
 
A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
 
  §   The Weiss Entities do not engage in joint marketing agreements
 
Other important information
Advisory services are provided by Weiss Multi-Strategy Advisers LLC is a SEC registered investment adviser. Private funds are distributed through an affiliated broker-dealer, Weiss Multi-Strategy Funds LLC, member FINRA/SIPC.

 
 

INVESTMENT ADVISER:
Weiss Multi-Strategy Advisers LLC
320 Park Avenue, 20 th Floor
New York, New York 10022

PRINCIPAL UNDERWRITER:
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202

CUSTODIAN:
U.S. Bank, N.A.
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212

ADMINISTRATOR, TRANSFER AGENT,
AND DIVIDEND PAYING AGENT:
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin  53202

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:
Cohen Fund Audit Services
1350 Euclid Ave., Suite 800
Cleveland, OH 44115

LEGAL COUNSEL
Goodwin Procter LLP
901 New York Avenue, NW
Washington, DC 20001
 
 
 

 
ADDITIONAL INFORMATION
 
The Statement of Additional Information (SAI) contains additional information about the Fund and is incorporated by reference into this Prospectus.  Additional information about the Fund’s investments will be in the Fund’s annual/semi-annual reports to shareholders (once available).  As of the date of this Prospectus, annual and semi-annual reports for the Fund are not available because the Fund had not commenced operations.  Once available, in the Fund’s annual report you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year.
 
You may obtain a free copy of these documents by calling, or writing the Fund as shown below, or on the Fund’s website at 
www.gweiss.com/Solutions/Mutual-Funds/
  You also may call the toll free number given below to request other information about the Fund and to make shareholder inquiries.
 
You may review and copy the SAI and other information about the Fund by visiting the SEC’s Public Reference Room, 100 F Street, Washington, D.C. (202) 551-8090 or by visiting the Commission’s Internet site at http://www.sec.gov.  Copies of this information also may be obtained, upon payment of a duplicating fee by electronic request at publicinfo@sec.gov or by writing to the Public Reference Section of the Commission, Washington, D.C. 20549-1520.
 
 
Investment Company Act File No. 811 -23084
 
 
 
 
Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
866-530-2690 (toll free)
http:// www.gweiss.com/Solutions/Mutual-Funds/
 
 
 
 
 
 
[insert logo]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROSPECTUS
[    ], 2015
 

 
 

 
 
Subject to Completion—Dated November 5,  2015
 
The information in this Statement of Additional Information is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This Statement of Additional Information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
 
STATEMENT OF ADDITIONAL INFORMATION



[                    ], 2015

WEISS ALTERNATIVE BALANCED RISK FUND

Class
A
(not available for purchase)
Class
C
(not available for purchase)
Class
I
  WEISX
Class
K
WEIKX
 
 




Weiss Alternative Balanced Risk Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201
866-530-2690



This Statement of Additional Information (“SAI”) is not a prospectus, but should be read in conjunction with the Prospectus of the Weiss Alternative Balanced Risk Fund (the “Fund”), a series of the Series Portfolios Trust (the “Trust”), dated December 1, 2015.
 
You may obtain the Prospectus without charge by contacting U.S. Bancorp Fund Services, LLC at the address or telephone number listed above or by visiting the Fund’s website at www.gweiss.com/Solutions/Mutual-Funds/
 
Investors in the Fund will be informed of the Fund’s progress through periodic reports.  Financial statements certified by an independent registered public accounting firm will be submitted to shareholders at least annually.  Since the Fund had not commenced operations prior to the date of this SAI, no financial statements are available.
 
Once available, copies of the Annual Report to shareholders may be obtained, without charge, upon request by contacting U.S. Bancorp Fund Services, LLC at the address or telephone number listed above.
 
 
 
 

 
 
 
   
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B-1

 
 
THE TRUST

The Trust is a Delaware statutory trust organized on July 27, 2015, and is registered with the Securities and Exchange Commission (“SEC”) as an open-end management investment company.  The Trust’s Declaration of Trust (the “Declaration of Trust”) permits the Trust’s Board of Trustees (the “Board”) to issue an unlimited number of full and fractional shares of beneficial interest, without par value, which may be issued in any number of series.  The Board may from time to time issue other series, the assets and liabilities of which will be separate and distinct from any other series.  This SAI relates only to the Fund.
 
The Declaration of Trust also provides for indemnification and reimbursement of expenses out of the Fund’s assets for any shareholder held personally liable for obligations of the Fund or the Trust.  The Declaration of Trust provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Fund or the Trust and satisfy any judgment thereon.  All such rights are limited to the assets of the Fund.  The Declaration of Trust further provides that the Trust may maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of the Trust, its shareholders, trustees, officers, employees and agents to cover possible tort and other liabilities.  However, the activities of the Trust as an investment company would not likely give rise to liabilities in excess of the Trust’s total assets.  Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance exists and the Fund itself is unable to meet its obligations.

The Fund’s Prospectus and this SAI are a part of the Trust’s Registration Statement filed with the SEC. Copies of the Trust’s complete Registration Statement may be obtained from the SEC upon payment of the prescribed fee or may be accessed free of charge at the SEC’s website at www.sec.gov.

The Fund, a series of the Trust, is a diversified fund. The Fund does not hold itself out as related to any other series of the Trust for purposes of investment and investor services, nor does it share the same investment adviser with any other series of the Trust.
 
INVESTMENT POLICIES AND RISKS

The following information supplements the discussion of the Fund’s principal investment strategies as set forth in its Prospectus. The Fund may invest in the following types of investments, each of which is subject to certain risks, as discussed below.

Equity Securities

Equity securities in which the Fund invests include common stocks, preferred stocks and securities convertible into common stocks, such as convertible bonds, warrants, rights and options. The value of equity securities varies in response to many factors, including the activities and financial condition of individual companies, the business market in which individual companies compete and general market and economic conditions. Equity securities fluctuate in value, often based on factors unrelated to the value of the issuer of the securities, and such fluctuations can be significant.

Common Stock

Common stock represents an equity (ownership) interest in a company, and usually possesses voting rights and earns dividends. Dividends on common stock are not fixed but are declared at the discretion of the issuer. Common stock generally represents the riskiest investment in a company. In addition, common stock generally has the greatest appreciation and depreciation potential because increases and decreases in earnings are usually reflected in a company’s stock price.
 
 
 
Preferred Stock

Preferred stocks are securities that have characteristics of both common stocks and corporate bonds. Preferred stocks may receive dividends but payment is not guaranteed as with a bond. These securities may be undervalued because of a lack of analyst coverage resulting in a high dividend yield or yield to maturity.  The risks of preferred stocks include a lack of voting rights and the Fund’s investment adviser, Weiss Multi-Strategy Advisers LLC (the “Adviser”), may incorrectly analyze the security, resulting in a loss to the Fund.  Furthermore, preferred stock dividends are not guaranteed and management can elect to forego the preferred dividend, resulting in a loss to the Fund.  Preferred stock may also be convertible into the common stock of the issuer. In general, preferred stocks generally pay a dividend at a specified rate and have preference over common stock in the payment of dividends and in liquidation.  The Fund may invest in preferred stock with any or no credit rating. Preferred stock is a class of stock having a preference over common stock as to the payment of dividends and the recovery of investment should a company be liquidated, although preferred stock is usually junior to the debt securities of the issuer. Preferred stock market value may change based on changes in interest rates.

Convertible Securities

The Fund may invest in convertible securities with no minimum credit rating. Convertible securities include fixed income securities that may be exchanged or converted into a predetermined number of shares of the issuer’s underlying common stock at the option of the holder during a specified period. Convertible securities may take the form of convertible preferred stock, convertible bonds or debentures, units consisting of “usable” bonds and warrants or a combination of the features of several of these securities. Convertible securities are senior to common stocks in an issuer’s capital structure, but are usually subordinated to similar non-convertible securities. While providing a fixed-income stream (generally higher in yield than the income derivable from common stock but lower than that afforded by a similar nonconvertible security), a convertible security also gives an investor the opportunity, through its conversion feature, to participate in the capital appreciation of the issuing company depending upon a market price advance in the convertible security’s underlying common stock.

Warrants

The Fund may invest in warrants. Warrants are options to purchase common stock at a specific price (usually at a premium above the market value of the optioned common stock at issuance) valid for a specific period of time. Warrants may have a life ranging from less than one year to twenty years, or they may be perpetual. However, most warrants have expiration dates after which they are worthless. In addition, a warrant is worthless if the market price of the common stock does not exceed the warrant’s exercise price during the life of the warrant. Warrants have no voting rights, pay no dividends, and have no rights with respect to the assets of the corporation issuing them. The percentage increase or decrease in the market price of the warrant may tend to be greater than the percentage increase or decrease in the market price of the optioned common stock.
 
Depositary Receipts
 
The Fund may invest in sponsored and unsponsored American Depositary Receipts (“ADRs”), which are receipts issued by an American bank or trust company evidencing ownership of underlying securities issued by a foreign issuer. ADRs, in registered form, are designed for use in U.S. securities markets. Unsponsored ADRs may be created without the participation of the foreign issuer. Holders of unsponsored ADRs generally bear all the costs of the ADR facility, whereas foreign issuers typically bear certain costs in a sponsored ADR. The bank or trust company depositary of an unsponsored ADR may be under no obligation to distribute shareholder communications received from the foreign issuer or to pass through voting rights.  Many of the risks described below regarding foreign securities apply to investments in ADRs.

Foreign Securities

General.   The Fund may invest in foreign securities as well as exchange traded funds (“ETFs”) and other investment companies that hold a portfolio of foreign securities.  Investing in securities of foreign companies and countries involves certain considerations and risks that are not typically associated with investing in U.S. government securities and securities of domestic companies.  There may be less publicly available information about a foreign issuer than a domestic one, and foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements comparable to those applicable to U.S. companies.  There may also be less government supervision and regulation of foreign securities exchanges, brokers and listed companies than exists in the United States.  Interest and dividends paid by foreign issuers may be subject to withholding and other foreign taxes, which may decrease the net return on such investments as compared to dividends and interest paid to the Fund by domestic companies or the U.S. government.  There may be the possibility of expropriations, seizure or nationalization of foreign deposits, confiscatory taxation, political, economic or social instability or diplomatic developments that could affect assets of the Fund held in foreign countries.  Finally, the establishment of exchange controls or other foreign governmental laws or restrictions could adversely affect the payment of obligations.
 
 

To the extent the Fund’s currency exchange transactions do not fully protect the Fund against adverse changes in currency exchange rates, decreases in the value of currencies of the foreign countries in which the Fund will invest relative to the U.S. dollar will result in a corresponding decrease in the U.S. dollar value of the Fund’s assets denominated in those currencies (and possibly a corresponding increase in the amount of securities required to be liquidated to meet distribution requirements).  Conversely, increases in the value of currencies of the foreign countries in which the Fund invests relative to the U.S. dollar will result in a corresponding increase in the U.S. dollar value of the Fund’s assets (and possibly a corresponding decrease in the amount of securities to be liquidated).

Emerging Markets Securities

Investing in emerging market securities imposes risks different from, or greater than, risks of investing in foreign developed countries.  These risks include: smaller market capitalization of securities markets, which may suffer periods of relative illiquidity; significant price volatility; restrictions on foreign investment; possible repatriation of investment income and capital. In addition, foreign investors may be required to register the proceeds of sales; future economic or political crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization, or creation of government monopolies. The currencies of emerging market countries may experience significant declines against the U.S. dollar, and devaluation may occur subsequent to investments in these currencies by the Fund.  Inflation and rapid fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets of certain emerging market countries.

Additional risks of emerging markets securities may include: greater social, economic and political uncertainty and instability; more substantial governmental involvement in the economy; less governmental supervision and regulation; unavailability of currency hedging techniques; companies that are newly organized and small; differences in auditing and financial reporting standards, which may result in unavailability of material information about issuers; and less developed legal systems. In addition, emerging securities markets may have different clearance and settlement procedures, which may be unable to keep pace with the volume of securities transactions or otherwise make it difficult to engage in such transactions. Settlement problems may cause the Fund to miss attractive investment opportunities, hold a portion of its assets in cash pending investment, or be delayed in disposing of a portfolio security. Such a delay could result in possible liability to a purchaser of the security.
 
Investment Companies
 
The Fund may invest in investment companies such as open-end funds (mutual funds), closed-end funds, and ETFs.  The Investment Company Act of 1940, as amended (the “1940 Act”) provides that the Fund may not: (1) purchase more than 3% of another investment company’s outstanding shares; (2) invest more than 5% of its assets in any such investment company (the “5% Limit”), and (3) invest more than 10% of its assets in investment companies overall (the “10% Limit”), unless: (i) the underlying investment company and/or the Fund has received an order for exemptive relief from such limitations from the SEC; and (ii) the underlying investment company and the Fund take appropriate steps to comply with any conditions in such order. In addition, Section 12(d)(1)(F) of the 1940 Act provides that the provisions of paragraph 12(d)(1) shall not apply to securities purchased or otherwise acquired by the Fund if (i) immediately after such purchase or acquisition not more than 3% of the total outstanding stock of such registered investment company is owned by the Fund and all affiliated persons of the Fund; and (ii) the Fund has not, and is not proposing to offer or sell any security issued by it through a principal underwriter or otherwise at a public or offering price which includes a sales load of more than 1.50%, except as permitted by Rule 12d1-3, described below. An investment company that issues shares to the Fund pursuant to paragraph 12(d)(1)(F) shall not be required to redeem its shares in an amount exceeding 1% of such investment company’s total outstanding shares in any period of less than thirty days. The Fund (or the Adviser acting on behalf of the Fund) must comply with the following voting restrictions:  when the Fund exercises voting rights, by proxy or otherwise, with respect to investment companies owned by the Fund, the Fund will either seek instruction from the Fund’s shareholders with regard to the voting of all proxies and vote in accordance with such instructions, or vote the shares held by the Fund in the same proportion as the vote of all other holders of such security.
 
 

Further, the Fund may rely on Rule 12d1-3, which allows unaffiliated mutual funds to exceed the 5% Limit and the 10% Limit, provided the aggregate sales loads any investor pays (i.e., the combined distribution expenses of both the acquiring fund and the acquired funds) does not exceed the limits on sales loads established by the Financial Industry Regulatory Authority (“FINRA”) for funds of funds.

The Fund and any “affiliated persons,” as defined by the 1940 Act may purchase in the aggregate only up to 3% of the total outstanding securities of any other investment company.  Accordingly, when affiliated persons hold shares of any of the investment companies, the Fund’s ability to invest fully in shares of those funds is restricted, and the Adviser must then, in some instances, select alternative investments that would not have been its first preference.  The 1940 Act also provides that an investment company whose shares are purchased by the Fund will be obligated to redeem shares held by the Fund only in an amount up to 1% of the investment company’s outstanding securities during any period of less than 30 days. Shares held by the Fund in excess of 1% of an investment company’s outstanding securities therefore, will be considered not readily marketable securities, which, together with other such securities, may not exceed 15% of the Fund’s total assets.

Under certain circumstances an investment company may determine to make payment of a redemption by the Fund wholly or partly by a distribution in kind of securities from its portfolio, in lieu of cash, in conformity with the rules of the SEC. In such cases, the Fund may hold securities distributed by an investment company until the Adviser determines that it is appropriate to dispose of such securities.

Investment decisions by the investment advisers of the other investment companies are made independently of the Fund and its Adviser. Therefore, the investment adviser of one investment company may be purchasing shares of the same issuer whose shares are being sold by the investment adviser of another such fund. The result would be an indirect expense to the Fund without accomplishing any investment purpose.  Because other investment companies employ an investment adviser, such investments by the Fund may cause shareholders to bear duplicate fees.

Closed-End Investment Companies. The Fund may invest its assets in “closed-end” investment companies (or “closed-end funds”), subject to the investment restrictions set forth above. Shares of closed-end funds are typically offered to the public in a one-time initial public offering by a group of underwriters who retain a spread or underwriting commission of between 4% or 6% of the initial public offering price. Such securities are then listed for trading on the New York Stock Exchange,  the National Association of Securities Dealers Automated Quotation System (commonly known as “NASDAQ”) and, in some cases, may be traded in other over-the-counter markets. Because the shares of closed-end funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as the Fund), investors seek to buy and sell shares of closed-end funds in the secondary market.

The Fund generally will purchase shares of closed-end funds only in the secondary market. The Fund will incur normal brokerage costs on such purchases similar to the expenses the Fund would incur for the purchase of securities of any other type of issuer in the secondary market. The Fund may, however, also purchase securities of a closed-end fund in an initial public offering when, in the opinion of the Adviser, based on a consideration of the nature of the closed-end fund’s proposed investments, the prevailing market conditions and the level of demand for such securities, they represent an attractive opportunity for growth of capital. The initial offering price typically will include a dealer spread, which may be higher than the applicable brokerage cost if the Fund purchased such securities in the secondary market.
 
 

The shares of many closed-end funds, after their initial public offering, frequently trade at a price per share that is less than the net asset value per share, the difference representing the “market discount” of such shares. This market discount may be due in part to the investment objective of long-term appreciation, which is sought by many closed-end funds, as well as to the fact that the shares of closed-end funds are not redeemable by the holder upon demand to the issuer at the next determined net asset value but rather are subject to the principles of supply and demand in the secondary market. A relative lack of secondary market purchasers of closed-end fund shares also may contribute to such shares trading at a discount to their net asset value.

The Fund may invest in shares of closed-end funds that are trading at a discount to net asset value or at a premium to net asset value. There can be no assurance that the market discount on shares of any closed-end fund purchased by the Fund will ever decrease. In fact, it is possible that this market discount may increase and the Fund may suffer realized or unrealized capital losses due to further decline in the market price of the securities of such closed-end funds, thereby adversely affecting the net asset value of the Fund’s shares. Similarly, there can be no assurance that any shares of a closed-end fund purchased by the Fund at a premium will continue to trade at a premium or that the premium will not decrease subsequent to a purchase of such shares by the Fund.

Closed-end funds may issue senior securities (including preferred stock and debt obligations) for the purpose of leveraging the closed-end fund’s common shares in an attempt to enhance the current return to such closed-end fund’s common shareholders. The Fund’s investment in the common shares of closed-end funds that are financially leveraged may create an opportunity for greater total return on its investment, but at the same time may be expected to exhibit more volatility in market price and net asset value than an investment in shares of investment companies without a leveraged capital structure.

Exchange Traded Funds. ETFs are funds that track their related index and have the flexibility of trading like a security. They are managed by professionals and provide the investor with diversification, cost and tax efficiency, liquidity, marginability, are useful for hedging, have the ability to go long and short, and some provide quarterly dividends. ETFs generally have two markets. The primary market is where institutions swap “creation units” in block-multiples of shares, typically 25,000 or 50,000 for in-kind securities and cash in the form of dividends. The secondary market is where individual investors can trade as little as a single share during trading hours on the exchange. This is different from open-ended mutual funds that are traded after hours once the net asset value (“NAV”) is calculated. ETFs share many similar risks with open-end and closed-end funds.

There is a risk that an ETF in which the Fund invests may terminate due to extraordinary events that may cause any of the service providers to the ETF, such as the trustee or sponsor, to close or otherwise fail to perform their obligations to the ETF. Also, because the ETFs in which the Fund intends to principally invest may be granted licenses by agreement to use the indices as a basis for determining their compositions and/or otherwise to use certain trade names, the ETFs may terminate if such license agreements are terminated.  In addition, an ETF may terminate if its entire net asset value falls below a certain amount.  Although the Fund believes that, in the event of the termination of an underlying ETF, it will be able to invest instead in shares of an alternate ETF tracking the same market index or another market index with the same general market, there is no guarantee that shares of an alternate ETF would be available for investment at that time.  To the extent the Fund invests in a sector product, the Fund is subject to the risks associated with that sector.
 
Real Estate Investment Trusts
 
The Fund may invest in securities of real estate investment trusts (“REITs”). REITs are publicly traded corporations or trusts that specialize in acquiring, holding and managing residential, commercial or industrial real estate. A REIT is not taxed at the entity level on income distributed to its shareholders or unitholders if it distributes to shareholders or unitholders at least 95% of its taxable income for each taxable year and complies with regulatory requirements relating to its organization, ownership, assets and income.
 
 

REITs generally can be classified as “Equity REITs”, “Mortgage REITs” and “Hybrid REITs.” An Equity REIT invests the majority of its assets directly in real property and derives its income primarily from rents and from capital gains on real estate appreciation, which are realized through property sales. A Mortgage REIT invests the majority of its assets in real estate mortgage loans and services its income primarily from interest payments. A Hybrid REIT combines the characteristics of an Equity REIT and a Mortgage REIT. Although the Fund can invest in all three kinds of REITs, its emphasis is expected to be on investments in Equity REITs.

Investments in the real estate industry involve particular risks. The real estate industry has been subject to substantial fluctuations and declines on a local, regional and national basis in the past and may continue to be in the future. Real property values and income from real property continue to be in the future. Real property values and income from real property may decline due to general and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses, changes in zoning laws, casualty or condemnation losses, regulatory limitations on rents, changes in neighborhoods and in demographics, increases in market interest rates, or other factors. Factors such as these may adversely affect companies that own and operate real estate directly, companies that lend to such companies, and companies that service the real estate industry.

Investments in REITs also involve risks. Equity REITs will be affected by changes in the values of and income from the properties they own, while Mortgage REITs may be affected by the credit quality of the mortgage loans they hold. In addition, REITs are dependent on specialized management skills and on their ability to generate cash flow for operating purposes and to make distributions to shareholders or unitholders REITs may have limited diversification and are subject to risks associated with obtaining financing for real property, as well as to the risk of self-liquidation. REITs also can be adversely affected by their failure to qualify for tax-free pass-through treatment of their income under the Internal Revenue Code of 1986, as amended, or their failure to maintain an exemption from registration under the 1940 Act. By investing in REITs indirectly through the Fund, a shareholder bears not only a proportionate share of the expenses of the Fund, but also may indirectly bear similar expenses of some of the REITs in which it invests.
 
Master Limited Partnerships
 
The Fund may invest in master limited partnership interests (“MLPs”).  MLPs are limited partnerships, the interests in which (known as “units”) are traded on public exchanges, just like corporate stock.  MLPs are limited partnerships that provide an investor with a direct interest in a group of assets (generally, oil and gas properties).  Master limited partnership units typically trade publicly, like stock, and thus may provide the investor more liquidity than ordinary limited partnerships.  Master limited partnerships are also called publicly traded partnerships and public limited partnerships.  A limited partnership has one or more general partners (they may be individuals, corporations, partnerships or another entity) which manage the partnership, and limited partners, which provide capital to the partnership but have no role in its management.  When an investor buys units in an MLP, he or she becomes a limited partner.  MLPs are formed in several ways. A non-traded partnership may decide to go public.  Several non-traded partnerships may “roll up” into a single MLP.  A corporation may spin off a group of assets or part of its business into an MLP of which it is the general partner, either to realize what it believes to be the assets’ full value or as an alternative to issuing debt.  A corporation may fully convert to an MLP, although since 1986 the tax consequences have made this an unappealing; or, a newly formed company may operate as an MLP from its inception.

There are different types of risks to investing in MLPs, including regulatory risks and interest rate risks.  Currently most partnerships enjoy pass through taxation of their income to partners, which avoids double taxation of earnings. If the government were to change MLP business tax structure, unitholders would not be able to enjoy the relatively high yields in the sector for long.  In addition, MLPs that charge government-regulated fees for transportation of oil and gas products through their pipelines are subject to unfavorable changes in government-approved rates and fees, which would affect an MLP’s revenue stream negatively.  MLPs also carry some interest rate risks.  During increases in interest rates, MLPs may not produce desirable returns to shareholders.
 
 
B-7 

 
 
Derivatives
 
The Fund may use derivative instruments to create investment leverage; as a substitute for securities, interest rates, currencies and commodities; for tax purposes; and to hedge against market movements. The information below contains general additional information about derivatives.

Cover for Futures Contracts.   Transactions involving futures contracts expose the Fund to an obligation to another party.  The Fund will not enter into any such transactions unless it owns either: (1) an offsetting (“covered”) position in other futures contracts; or (2) cash and liquid assets with a value, marked-to-market daily, sufficient to cover its potential obligations to the extent not covered as provided in (1) above.  The Fund will comply with SEC guidelines regarding cover for these instruments and will, if the guidelines so require, designate on its books or maintain in a separate account cash, liquid securities, or other permissible assets, in the prescribed amount as determined daily.  The Fund may enter into agreements with broker-dealers, which require the broker-dealers to accept physical settlement for certain futures contracts.  If this occurs, the Fund would treat the futures contract as being cash-settled for purposes of determining the Fund’s coverage requirements.

Regulation as a Commodity Pool Operator.   The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” with respect to the Fund under the Commodity Exchange Act (“CEA”) pursuant to the U.S. Commodity Futures Trading Commission (“CFTC”) Regulation 4.5. The Fund currently expects to operate in a manner that would permit the Adviser to continue to claim the exclusion under Rule 4.5, which may adversely affect the Adviser’s ability to manage the Fund under certain market conditions and may adversely affect the Fund’s total return. In the event the Adviser becomes unable to rely on the exclusion under Rule 4.5 and is required to register with the CFTC as a commodity pool operator with respect to the Fund, the Fund’s expenses may increase and the Fund may be adversely affected. The Fund may be limited in its ability to use futures and options on futures and to engage in certain swaps transactions during any period where its investment adviser is not registered as a commodity pool operator or commodity trading advisor. Such limitations are not expected to affect the normal operations of the Fund.
 
Options on Futures Contracts.  The Fund may purchase and sell options on the same types of futures in which it may invest. Options on futures are similar to options on underlying instruments except that options on futures give the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put), rather than to purchase or sell the futures contract, at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by the delivery of the accumulated balance in the writer’s futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid

Options on Securities.   The Fund may purchase and write ( i.e., sell) put and call options. Such options may relate to particular securities or stock indices, and may or may not be listed on a domestic or foreign securities exchange and may or may not be issued by the Options Clearing Corporation. Options trading is a highly specialized activity that entails greater than ordinary investment risk. Options may be more volatile than the underlying instruments, and therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves.

A call option for a particular security gives the purchaser of the option the right to buy, and the writer (seller) the obligation to sell, the underlying security at the stated exercise price at any time prior to the expiration of the option, regardless of the market price of the security. The premium paid to the writer is in consideration for undertaking the obligation under the option contract. A put option for a particular security gives the purchaser the right to sell the security at the stated exercise price at any time prior to the expiration date of the option, regardless of the market price of the security.
 
 

Stock index options are put options and call options on various stock indices. In most respects, they are identical to listed options on common stocks. The primary difference between stock options and index options occurs when index options are exercised. In the case of stock options, the underlying security, common stock, is delivered. However, upon the exercise of an index option, settlement does not occur by delivery of the securities comprising the index. The option holder who exercises the index option receives an amount of cash if the closing level of the stock index upon which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. This amount of cash is equal to the difference between the closing price of the stock index and the exercise price of the option expressed in dollars times a specified multiple. A stock index fluctuates with changes in the market value of the stocks included in the index. For example, some stock index options are based on a broad market index, such as the Standard & Poor’s 500 ® Index or the Value Line Composite Index or a narrower market index, such as the Standard & Poor’s 100 ® . Indices may also be based on an industry or market segment, such as the NYSE Arca Oil and Gas Index or the Computer and Business Equipment Index. Options on stock indices are currently traded on the Chicago Board Options Exchange, the New York Stock Exchange, and the Philadelphia Stock Exchange.

The Fund’s obligation to sell an instrument subject to a call option written by it, or to purchase an instrument subject to a put option written by it, may be terminated prior to the expiration date of the option by the Fund’s execution of a closing purchase transaction, which is effected by purchasing on an exchange an option of the same series ( i.e. , same underlying instrument, exercise price and expiration date) as the option previously written. A closing purchase transaction will ordinarily be effected to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The cost of such a liquidation purchase plus transactions costs may be greater than the premium received upon the original option, in which event the Fund will have incurred a loss in the transaction. There is no assurance that a liquid secondary market will exist for any particular option. An option writer unable to effect a closing purchase transaction will not be able to sell the underlying instrument or liquidate the assets held in a segregated account, as described below, until the option expires or the optioned instrument is delivered upon exercise. In such circumstances, the writer will be subject to the risk of market decline or appreciation in the instrument during such period.

If an option purchased by the Fund expires unexercised, the Fund realizes a loss equal to the premium paid. If the Fund enters into a closing sale transaction on an option purchased by it, the Fund will realize a gain if the premium received by the Fund on the closing transaction is more than the premium paid to purchase the option or a loss if it is less. If an option written by the Fund expires on the stipulated expiration date or if the Fund enters into a closing purchase transaction, it will realize a gain (or loss if the cost of a closing purchase transaction exceeds the net premium received when the option is sold). If an option written by the Fund is exercised, the proceeds of the sale will be increased by the net premium originally received and the Fund will realize a gain or loss.

Certain Risks Regarding Options.   There are several risks associated with transactions in options. For example, there are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. In addition, a liquid secondary market for particular options, whether traded over-the-counter or on an exchange, may be absent for reasons which include the following: there may be insufficient trading interest in certain options; restrictions may be imposed by an exchange on opening transactions or closing transactions or both; trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities or currencies; unusual or unforeseen circumstances may interrupt normal operations on an exchange; the facilities of an exchange or the Options Clearing Corporation may not at all times be adequate to handle current trading value; or one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options that had been issued by the Options Clearing Corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.

Successful use by the Fund of options on stock indices will be subject to the ability of the Adviser to correctly predict movements in the directions of the stock market. This requires different skills and techniques than predicting changes in the prices of individual securities. In addition, the Fund’s ability to effectively hedge all or a portion of the securities in its portfolio, in anticipation of or during a market decline, through transactions in put options on stock indices, depends on the degree to which price movements in the underlying index correlate with the price movements of the securities held by the Fund.  Inasmuch as the Fund’s securities will not duplicate the components of an index, the correlation will not be perfect. Consequently, the Fund bears the risk that the prices of its securities being hedged will not move in the same amount as the prices of its put options on the stock indices. It is also possible that there may be a negative correlation between the index and the Fund’s securities that would result in a loss on both such securities and the options on stock indices acquired by the Fund.
 
 

The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying markets that cannot be reflected in the options markets. The purchase of options is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions.  The purchase of stock index options involves the risk that the premium and transaction costs paid by the Fund in purchasing an option will be lost as a result of unanticipated movements in prices of the securities comprising the stock index on which the option is based.

There is no assurance that a liquid secondary market on an options exchange will exist for any particular option, or at any particular time, and for some options no secondary market on an exchange or elsewhere may exist. If the Fund is unable to close out a call option on securities that it has written before the option is exercised, the Fund may be required to purchase the optioned securities in order to satisfy its obligation under the option to deliver such securities. If the Fund was unable to effect a closing sale transaction with respect to options on securities that it has purchased, it would have to exercise the option in order to realize any profit and would incur transaction costs upon the purchase and sale of the underlying securities.

Cover for Options Positions. Transactions using options (other than options that the Fund has purchased) expose the Fund to an obligation to another party. The Fund will not enter into any such transactions unless it owns either (i) an offsetting (“covered”) position in securities or other options or (ii) cash or liquid securities with a value sufficient at all times to cover its potential obligations not covered as provided in (i) above. The Fund will comply with SEC guidelines regarding cover for these instruments and, if the guidelines so require, set aside cash or liquid securities in a segregated account with the custodian in the prescribed amount. Under current SEC guidelines, the Fund will segregate assets to cover transactions in which the Fund writes or sells options.

Assets used as cover or held in a segregated account cannot be sold while the position in the corresponding option is open unless they are replaced with similar assets. As a result, the commitment of a large portion of the Fund’s assets to cover or segregated accounts could impede portfolio management or the Fund’s ability to meet redemption requests or other current obligations.

Dealer Options. The Fund may engage in transactions involving dealer options as well as exchange-traded options. Certain additional risks are specific to dealer options. While the Fund might look to a clearing corporation to exercise exchange-traded options, if the Fund were to purchase a dealer option it would need to rely on the dealer from which it purchased the option to perform if the option were exercised. Failure by the dealer to do so would result in the loss of the premium paid by the Fund as well as loss of the expected benefit of the transaction.

Exchange-traded options generally have a continuous liquid market while dealer options may not. Consequently, the Fund may generally be able to realize the value of a dealer option it has purchased only by exercising or reselling the option to the dealer who issued it. Similarly, when the Fund writes a dealer option, the Fund may generally be able to close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer to whom the Fund originally wrote the option. While the Fund will seek to enter into dealer options only with dealers who will agree to and which are expected to be capable of entering into closing transactions with the Fund, there can be no assurance that the Fund will at any time be able to liquidate a dealer option at a favorable price at any time prior to expiration. Unless the Fund, as a covered dealer call option writer, is able to effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) used as cover until the option expires or is exercised. In the event of insolvency of the other party, the Fund may be unable to liquidate a dealer option. With respect to options written by the Fund, the inability to enter into a closing transaction may result in material losses to the Fund. For example, because the Fund must maintain a secured position with respect to any call option on a security it writes, the Fund may not sell the assets that it has segregated to secure the position while it is obligated under the option. This requirement may impair the Fund’s ability to sell portfolio securities at a time when such sale might be advantageous.
 
 

The staff of the SEC has taken the position that purchased dealer options are illiquid securities.  The Fund may treat the cover used for written dealer options as liquid if the dealer agrees that the Fund may repurchase the dealer option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the dealer option would be considered illiquid only to the extent the maximum purchase price under the formula exceeds the intrinsic value of the option. Accordingly, the Fund will treat dealer options as subject to the Fund’s limitation on illiquid securities. If the SEC changes its position on the liquidity of dealer options, the Fund will change its treatment of such instruments accordingly.
 
Spread Transactions.   The Fund may purchase covered spread options from securities dealers. These covered spread options are not presently exchange-listed or exchange-traded. The purchase of a spread option gives the Fund the right to put securities that it owns at a fixed dollar spread or fixed yield spread in relationship to another security that the Fund does not own, but which is used as a benchmark. The risk to the Fund, in addition to the risks of dealer options described above, is the cost of the premium paid as well as any transaction costs. The purchase of spread options will be used to protect the Fund against adverse changes in prevailing credit quality spreads, i.e., the yield spread between high quality and lower quality securities. This protection is provided only during the life of the spread options.

Futures Contracts. A futures contract provides for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument (e.g., units of a stock index) for a specified price, date, time and place designated at the time the contract is made. Brokerage fees are paid when a futures contract is bought or sold and margin deposits must be maintained. Entering into a contract to buy is commonly referred to as buying or purchasing a contract or holding a long position. Entering into a contract to sell is commonly referred to as selling a contract or holding a short position. Unlike when the Fund purchases or sells a security, no price would be paid or received by the Fund upon the purchase or sale of a futures contract. Upon entering into a futures contract, and to maintain the Fund’s open positions in futures contracts, the Fund would be required to deposit with its custodian or futures broker in a segregated account in the name of the futures broker an amount of cash, U.S. government securities, suitable money market instruments, or other liquid securities, known as “initial margin.” The margin required for a particular futures contract is set by the exchange on which the contract is traded, and may be significantly modified from time to time by the exchange during the term of the contract. Futures contracts are customarily purchased and sold on margins that may range upward from less than 5% of the value of the contract being traded.

If the price of an open futures contract changes (by increase in underlying instrument or index in the case of a sale or by decrease in the case of a purchase) so that the loss on the futures contract reaches a point at which the margin on deposit does not satisfy margin requirements, the broker will require an increase in the margin. However, if the value of a position increases because of favorable price changes in the futures contract so that the margin deposit exceeds the required margin, the broker will pay the excess to the Fund. These subsequent payments, called “variation margin,” to and from the futures broker, are made on a daily basis as the price of the underlying assets fluctuate making the long and short positions in the futures contract more or less valuable, a process known as “marking to the market.” The Fund expects to earn interest income on any margin deposits. Although certain futures contracts, by their terms, require actual future delivery of and payment for the underlying instruments, in practice most futures contracts are usually closed out before the delivery date. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical underlying instrument or index and the same delivery date. If the offsetting purchase price is less than the original sale price, the Fund realizes a gain; if it is more, the Fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that the Fund will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If the Fund is not able to enter into an offsetting transaction, the Fund will continue to be required to maintain the margin deposits on the futures contract.
 
 

Because the Fund will designate on its books or maintain in a separate account liquid assets to satisfy its purchase commitments in the manner described, the Fund’s liquidity and the ability of the Adviser to manage them may be affected in the event the Fund’s forward commitments, commitments to purchase when-issued securities and delayed settlements ever exceeded 15% of the value of its net assets.

Futures trading is speculative and futures prices are highly volatile. Price movements for futures contracts, for example, which may fluctuate substantially during a short period of time, are influenced by numerous factors that affect the securities markets, including: changing supply and demand relationships; government programs and policies; national and international political and economic events and changes in interest rates. Also, the success of many futures trading strategies that use “technical” factors in identifying price moves depends upon the occurrence in the future of price movements. Technical systems will not be profitable and may in fact produce losses if there are no market moves of the kind the system seeks to follow. Any factor that would make it more difficult to execute the trades identified, such as a reduction of liquidity, also would reduce profitability.

Futures trading is highly leveraged. The low margin deposits normally required in trading futures interests permit an extremely high degree of leverage. Accordingly, a relatively small price movement in a futures interest may result in an immediate and substantial loss to the investor. Like other leveraged investments, futures trading may result in losses in excess of the amount invested.

Futures contracts may be illiquid. Most U.S. futures exchanges impose daily limits regulating the maximum amount above or below the previous day’s settlement price which a futures contract price may fluctuate during a single day. During a single trading day no trades may be executed at prices beyond the daily limit. Once the price of a particular futures contract has increased or decreased to the limit point, it may be difficult, costly or impossible to liquidate a position. Futures prices in particular contracts have occasionally moved the daily limit for several consecutive days with little or no trading. If this occurs, the Fund might be prevented from promptly liquidating unfavorable positions which could result in substantial losses. Those losses could significantly exceed the margin initially committed to the trades involved. In addition, even if prices have not moved the daily limit, or if there are no limits for the contracts traded by the Fund, the Fund may not be able to execute trades at favorable prices if little trading in the contracts is taking place. It is also possible that an exchange or the U.S. Commodity Futures Trading Commission (“CFTC”) may suspend trading in a particular contract, order immediate settlement of a contract or order that trading to the liquidation of open positions only. The CFTC and U.S. exchanges may also impose speculative position limits which, if applicable to the Fund’s trading in futures contracts, could require liquidation of positions that could negatively impact profitability. Futures trading involves counterparty risk. Futures brokers must maintain the Fund’s assets (other than assets used to trade foreign futures or options on foreign markets) in a segregated account. If a futures broker goes bankrupt, the Fund could lose money as it may only be able to recover a pro-rata share of the property available for distribution to all of the broker’s customers. In addition, even if a futures broker adequately segregates the Fund’s assets, the Fund may still be subject to risk of loss of funds on deposit should another customer of the futures broker fail to satisfy deficiencies in such other customer’s account. In addition, trading may occur on foreign exchanges and other non-U.S. markets. Neither existing CFTC regulations nor regulations of any other U.S. governmental agency apply to transactions on foreign markets. The Fund, should it trade futures contracts, is at risk for fluctuations in the exchange rate between the currencies in which it trades and U.S. dollars. It also is possible that exchange controls could be imposed in the future. There is no restriction on how much of the Fund’s trading might be on foreign markets. In addition, if the Fund chooses to exchange a cash, forward or spot market position outside of regular trading hours for a comparable futures position, such transactions are subject to counterparty creditworthiness risk.
 
 

Swap Agreements.   The Fund may enter into interest rate, index and currency exchange rate swap agreements in an attempt to obtain a particular desired return at a lower cost to the Fund than if it had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index. The “notional amount” of the swap agreement is only a fictive basis on which to calculate the obligations the parties to a swap agreement have agreed to exchange. The Fund’s obligations (or rights) under a swap agreement will generally be equal only to the amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the “net amount”). The Fund’s obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of cash, U.S. government securities, or other liquid securities, to avoid leveraging of the Fund’s portfolio.

Whether the Fund’s use of swap agreements enhance the Fund’s total return will depend on the Adviser’s ability correctly to predict whether certain types of investments are likely to produce greater returns than other investments. Because they are two-party contracts and may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Fund’s Adviser will cause the Fund to enter into swap agreements only with counterparties that would be eligible for consideration as repurchase agreement counterparties under the Fund’s repurchase agreement guidelines. The swap market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

Certain swap agreements are exempt from most provisions of the CEA and, therefore, are not regulated as futures or commodity option transactions under the CEA, pursuant to regulations of the CFTC. To qualify for this exemption, a swap agreement must be entered into by “eligible participants,” which include the following, provided the participants’ total assets exceed established levels: a bank or trust company, savings association or credit union, insurance company, investment company subject to regulation under the 1940 Act, commodity pool, corporation, partnership, proprietorship, organization, trust or other entity, employee benefit plan, governmental entity, broker-dealer, futures commission merchant, natural person, or regulated foreign person. To be eligible, natural persons and most other entities must have total assets exceeding $10 million; commodity pools and employees benefit plans must have assets exceeding $5 million. In addition, an eligible swap transaction must meet three conditions. First, the swap agreement may not be part of a fungible class of agreements that are standardized as to their material economic terms. Second, the creditworthiness of parties with actual or potential obligations under the swap agreement must be a material consideration in entering into or determining the terms of the swap agreement, including pricing, cost or credit enhancement terms. Third, swap agreements may not be entered into and traded on or through a multilateral transaction execution facility.

Certain Investment Techniques and Derivatives Risks.   When the Fund uses investment techniques such as margin, leverage and short sales, and forms of financial derivatives, such as options and futures, an investment in the Fund may be more volatile than investments in other mutual funds. Although the intention is to use such investment techniques and derivatives to minimize risk to the Fund, there is the possibility that improper implementation of such techniques and derivative strategies or unusual market conditions could result in significant losses to the Fund.  Derivatives are used to limit risk in the Fund or to enhance investment return and have a return tied to a formula based upon an interest rate, index, price of a security, or other measurement. Derivatives involve special risks, including: (1) the risk that interest rates, securities prices and currency markets will not move in the direction that a portfolio manager anticipates; (2) imperfect correlation between the price of derivative instruments and movements in the prices of the securities, interest rates or currencies being hedged; (3) the fact that skills needed to use these strategies are different than those needed to select portfolio securities; (4) the possible absence of a liquid secondary market for any particular instrument and possible exchange imposed price fluctuation limits, either of which may make it difficult or impossible to close out a position when desired; (5) the risk that adverse price movements in an instrument can result in a loss substantially greater than the Fund’s initial investment in that instrument (in some cases, the potential loss in unlimited); (6) particularly in the case of privately-negotiated instruments, the risk that the counterparty will not perform its obligations, or that penalties could be incurred for positions held less than the required minimum holding period, which could leave the Fund worse off than if it had not entered into the position; and (7) the inability to close out certain hedged positions to avoid adverse tax consequences. In addition, the use of derivatives for non-hedging purposes (that is, to seek to increase total return) is considered a speculative practice and may present an even greater risk of loss than when used for hedging purposes.
 
 
Fixed Income/Debt/Bond Securities
 
Yields on fixed income securities are dependent on a variety of factors, including the general conditions of the money market and other fixed income securities markets, the size of a particular offering, the maturity of the obligation and the rating of the issue. An investment in the Fund will be subjected to risk even if all fixed income securities in the Fund’s portfolio are paid in full at maturity. All fixed income securities, including U.S. Government securities, can change in value when there is a change in interest rates or the issuer’s actual or perceived creditworthiness or ability to meet its obligations.

There is normally an inverse relationship between the market value of securities sensitive to prevailing interest rates and actual changes in interest rates. In other words, an increase in interest rates produces a decrease in market value. The longer the remaining maturity (and duration) of a security, the greater will be the effect of interest rate changes on the market value of that security. Changes in the ability of an issuer to make payments of interest and principal and in the markets’ perception of an issuer’s creditworthiness will also affect the market value of the debt securities of that issuer. Obligations of issuers of fixed income securities (including municipal securities) are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the Federal Bankruptcy Reform Act of 1978. In addition, the obligations of municipal issuers may become subject to laws enacted in the future by Congress, state legislatures, or referenda extending the time for payment of principal and/or interest, or imposing other constraints upon enforcement of such obligations or upon the ability of municipalities to levy taxes. Changes in the ability of an issuer to make payments of interest and principal and in the market’s perception of an issuer’s creditworthiness will also affect the market value of the debt securities of that issuer. The possibility exists, therefore, that, the ability of any issuer to pay, when due, the principal of and interest on its debt securities may become impaired.

The corporate debt securities in which the Fund may invest include corporate bonds and notes and short-term investments such as commercial paper and variable rate demand notes. Commercial paper (short-term promissory notes) is issued by companies to finance their or their affiliate’s current obligations and is frequently unsecured. Variable and floating rate demand notes are unsecured obligations redeemable upon not more than 30 days’ notice. These obligations include master demand notes that permit investment of fluctuating amounts at varying rates of interest pursuant to a direct arrangement with the issuer of the instrument. The issuer of these obligations often has the right, after a given period, to prepay the outstanding principal amount of the obligations upon a specified number of days’ notice. These obligations generally are not traded, nor generally is there an established secondary market for these obligations. To the extent a demand note does not have a 7-day or shorter demand feature and there is no readily available market for the obligation, it is treated as an illiquid security.

The Fund may invest in debt securities, including non-investment grade debt securities.  The following describes some of the risks associated with fixed income debt securities:

Interest Rate Risk.   Debt securities have varying levels of sensitivity to changes in interest rates. In general, the price of a debt security can fall when interest rates rise and can rise when interest rates fall. Securities with longer maturities and mortgage securities can be more sensitive to interest rate changes although they usually offer higher yields to compensate investors for the greater risks. The longer the maturity of the security, the greater the impact a change in interest rates could have on the security’s price. In addition, short-term and long-term interest rates do not necessarily move in the same amount or the same direction. Short-term securities tend to react to changes in short-term interest rates and long-term securities tend to react to changes in long-term interest rates.

Credit Risk.   Fixed income securities of issuers with lower credit quality have speculative characteristics and changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of those issuers to make principal or interest payments, as compared to issuers of more highly rated securities of issuers with higher credit quality.
 
 

Extension Risk.   The Fund is subject to the risk that an issuer will exercise its right to pay principal on an obligation held by the Fund (such as mortgage-backed securities) later than expected. This may happen when there is a rise in interest rates. These events may lengthen the duration (i.e. interest rate sensitivity) and potentially reduce the value of these securities.

Prepayment Risk.   Certain types of debt securities, such as mortgage-backed securities, have yield and maturity characteristics corresponding to underlying assets. Unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain mortgage-backed securities may include both interest and a partial payment of principal. Besides the scheduled repayment of principal, payments of principal may result from the voluntary prepayment, refinancing, or foreclosure of the underlying mortgage loans.

Securities subject to prepayment are less effective than other types of securities as a means of “locking in” attractive long-term interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. As a result, these securities may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest rates. Prepayments may also significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely, during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the volatility of the Fund.

At times, some of the mortgage-backed securities in which the Fund may invest will have higher than market interest rates and therefore will be purchased at a premium above their par value. Prepayments may cause losses in securities purchased at a premium, as unscheduled prepayments, which are made at par, will cause the Fund to experience a loss equal to any unamortized premium.
 
Certificates of Deposit and Bankers’ Acceptances
 
The Fund may invest in certificates of deposit and bankers’ acceptances, which are considered to be short-term money market instruments.

Certificates of deposit are receipts issued by a depositary institution in exchange for the deposit of funds. The issuer agrees to pay the amount deposited plus interest to the bearer of the receipt on the date specified on the certificate. The certificate usually can be traded in the secondary market prior to maturity. Bankers’ acceptances typically arise from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then “accepted” by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an earning asset or it may be sold in the secondary market at the going rate of discount for a specific maturity. Although maturities for acceptances can be as long as 270 days, most acceptances have maturities of six months or less.
 
Commercial Paper
 
The Fund may purchase commercial paper. Commercial paper consists of short-term (usually from 1 to 270 days) unsecured promissory notes issued by corporations in order to finance their current operations.  It may be secured by letters of credit, a surety bond or other forms of collateral.  Commercial paper is usually repaid at maturity by the issuer from the proceeds of the issuance of new commercial paper.  As a result, investment in commercial paper is subject to the risk the issuer cannot issue enough new commercial paper to satisfy its outstanding commercial paper, also known as rollover risk.  Commercial paper may become illiquid or may suffer from reduced liquidity in certain circumstances.  Like all fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates.  If interest rates rise, commercial paper prices will decline.  The short-term nature of a commercial paper investment makes it less susceptible to interest rate risk than many other fixed income securities because interest rate risk typically increases as maturity lengths increase.  Commercial paper tends to yield smaller returns than longer-term corporate debt because securities with shorter maturities typically have lower effective yields than those with longer maturities.  As with all fixed income securities, there is a chance that the issuer will default on its commercial paper obligation.
 
 
Time Deposits and Variable Rate Notes
 
The Fund may invest in fixed time deposits, whether or not subject to withdrawal penalties.

The commercial paper obligations, which the Fund may buy are unsecured and may include variable rate notes. The nature and terms of a variable rate note (i.e., a “Master Note”) permit the Fund to invest fluctuating amounts at varying rates of interest pursuant to a direct arrangement between the Fund as Lender, and the issuer, as borrower. It permits daily changes in the amounts borrowed. The Fund has the right at any time to increase, up to the full amount stated in the note agreement, or to decrease the amount outstanding under the note. The issuer may prepay at any time and without penalty any part of or the full amount of the note. The note may or may not be backed by one or more bank letters of credit. Because these notes are direct lending arrangements between the Fund and the issuer, it is not generally contemplated that they will be traded; moreover, there is currently no secondary market for them. Except as specifically provided in the Prospectus, there is no limitation on the type of issuer from whom these notes may be purchased; however, in connection with such purchase and on an ongoing basis, the Fund’s Adviser will consider the earning power, cash flow and other liquidity ratios of the issuer, and its ability to pay principal and interest on demand, including a situation in which all holders of such notes made demand simultaneously. Variable rate notes are subject to the Fund’s investment restriction on illiquid securities unless such notes can be put back to the issuer on demand within seven days.
 
Insured Bank Obligations
 
The Fund may invest in insured bank obligations. The Federal Deposit Insurance Corporation (“FDIC”) insures the deposits of federally insured banks and savings and loan associations (collectively referred to as “banks”) up to $250,000. The Fund may purchase bank obligations that are fully insured as to principal by the FDIC. Currently, to remain fully insured as to principal, these investments must be limited to $250,000 per bank; if the principal amount and accrued interest together exceed $250,000, the excess principal and accrued interest will not be insured.  Insured bank obligations may have limited marketability.
 
High Yield Securities
 
The Fund may invest in high yield securities. High yield, high risk bonds are securities that are generally rated below investment grade by the primary rating agencies (BB+ or lower by S&P and Ba1 or lower by Moody’s). Other terms used to describe such securities include “lower rated bonds,” “non-investment grade bonds,” “below investment grade bonds,” and “junk bonds.” These securities are considered to be high-risk investments. The risks include the following:
 
Greater Risk of Loss.   These securities are regarded as predominately speculative. There is a greater risk that issuers of lower rated securities will default than issuers of higher rated securities. Issuers of lower rated securities generally are less creditworthy and may be highly indebted, financially distressed, or bankrupt. These issuers are more vulnerable to real or perceived economic changes, political changes or adverse industry developments. In addition, high yield securities are frequently subordinated to the prior payment of senior indebtedness. If an issuer fails to pay principal or interest, the Fund would experience a decrease in income and a decline in the market value of its investments.
 
 

Sensitivity to Interest Rate and Economic Changes.   The income and market value of lower-rated securities may fluctuate more than higher rated securities. Although non-investment grade securities tend to be less sensitive to interest rate changes than investment grade securities, non-investment grade securities are more sensitive to short-term corporate, economic and market developments. During periods of economic uncertainty and change, the market price of the investments in lower-rated securities may be volatile. The default rate for high yield bonds tends to be cyclical, with defaults rising in periods of economic downturn.

Valuation Difficulties.   It is often more difficult to value lower rated securities than higher rated securities. If an issuer’s financial condition deteriorates, accurate financial and business information may be limited or unavailable. In addition, the lower rated investments may be thinly traded and there may be no established secondary market. Because of the lack of market pricing and current information for investments in lower rated securities, valuation of such investments is much more dependent on judgment than is the case with higher rated securities.

Liquidity.   There may be no established secondary or public market for investments in lower rated securities. Such securities are frequently traded in markets that may be relatively less liquid than the market for higher rated securities. In addition, relatively few institutional purchasers may hold a major portion of an issue of lower-rated securities at times. As a result, the Fund may be required to sell investments at substantial losses or retain them indefinitely when an issuer’s financial condition is deteriorating.

Credit Quality.   Credit quality of non-investment grade securities can change suddenly and unexpectedly, and even recently-issued credit ratings may not fully reflect the actual risks posed by a particular high-yield security.

New Legislation.   Future legislation may have a possible negative impact on the market for high yield, high risk investments. As an example, in the late 1980’s, legislation required federally-insured savings and loan associations to divest their investments in high yield, high risk bonds. New legislation, if enacted, could have a material negative effect on the Fund’s investments in lower rated securities.  High yield, high risk investments may include the following:

Straight fixed-income debt securities.   These include bonds and other debt obligations that bear a fixed or variable rate of interest payable at regular intervals and have a fixed or resettable maturity date. The particular terms of such securities vary and may include features such as call provisions and sinking funds.

Zero-coupon debt securities. These bear no interest obligation but are issued at a discount from their value at maturity. When held to maturity, their entire return equals the difference between their issue price and their maturity value.

Zero-fixed-coupon debt securities. These are zero-coupon debt securities that convert on a specified date to interest-bearing debt securities.

Pay-in-kind bonds. These are bonds which allow the issuer, at its option, to make current interest payments on the bonds either in cash or in additional bonds.  These bonds are typically sold without registration under the Securities Act of 1933, as amended (“1933 Act”), usually to a relatively small number of institutional investors.

Loan Participations and Assignments. These are participations in, or assignments of all or a portion of loans to corporations or to governments, including governments of less developed countries (“LDCs”).

Securities issued in connection with Reorganizations and Corporate Restructurings.   In connection with reorganizing or restructuring of an issuer, an issuer may issue common stock or other securities to holders of its debt securities.  The Fund may hold such common stock and other securities even if it does not invest in such securities.
 
 
 
Municipal Government Obligations
 
In general, municipal obligations are debt obligations issued by or on behalf of states, territories and possessions of the United States (including the District of Columbia) and their political subdivisions, agencies and instrumentalities.  Municipal obligations generally include debt obligations issued to obtain funds for various public purposes.  Certain types of municipal obligations are issued in whole or in part to obtain funding for privately operated facilities or projects.  Municipal obligations include general obligation bonds, revenue bonds, industrial development bonds, notes and municipal lease obligations.  Municipal obligations also include additional obligations, the interest on which is exempt from federal income tax that may become available in the future as long as the Board of the Fund determines that an investment in any such type of obligation is consistent with the Fund’s investment objectives.  Municipal obligations may be fully or partially backed by local government, the credit of a private issuer, current or anticipated revenues from a specific project or specific assets or domestic or foreign entities providing credit support such as letters of credit, guarantees or insurance.

Bonds and Notes.   General obligation bonds are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of interest and principal.  Revenue bonds are payable only from the revenues derived from a project or facility or from the proceeds of a specified revenue source.  Industrial development bonds are generally revenue bonds secured by payments from and the credit of private users.  Municipal notes are issued to meet the short-term funding requirements of state, regional and local governments.  Municipal notes include tax anticipation notes, bond anticipation notes, revenue anticipation notes, tax and revenue anticipation notes, construction loan notes, short-term discount notes, tax-exempt commercial paper, demand notes and similar instruments.

Municipal Lease Obligations.   Municipal lease obligations may take the form of a lease, an installment purchase or a conditional sales contract.  They are issued by state and local governments and authorities to acquire land, equipment and facilities, such as vehicles, telecommunications and computer equipment and other capital assets.  The Fund may invest in investment companies that purchase these lease obligations directly, or it may purchase participation interests in such lease obligations.  States have different requirements for issuing municipal debt and issuing municipal leases.  Municipal leases are generally subject to greater risks than general obligation or revenue bonds because they usually contain a “non-appropriation” clause, which provides that the issuer is not obligated to make payments on the obligation in future years unless funds have been appropriated for this purpose each year.  Such non-appropriation clauses are required to avoid the municipal lease obligations from being treated as debt for state debt restriction purposes.  Accordingly, such obligations are subject to “non-appropriation” risk.  Municipal leases may be secured by the underlying capital asset and it may be difficult to dispose of any such asset in the event of non-appropriation or other default.
 
United States Government Obligations
 
These consist of various types of marketable securities issued by the United States Treasury, i.e., bills, notes and bonds. Such securities are direct obligations of the United States government and differ mainly in the length of their maturity. Treasury bills, the most frequently issued marketable government security, have a maturity of up to one year and are issued on a discount basis. The Fund may also invest in Treasury Inflation-Protected Securities (“TIPS”).  TIPS are special types of treasury bonds that were created in order to offer bond investors protection from inflation.  The values of the TIPS are automatically adjusted to the inflation rate as measured by the Consumer Price Index (“CPI”).  If the CPI goes up by half a percent, the value of the bond (the TIPS) would also go up by half a percent.  If the CPI falls, the value of the bond does not fall because the government guarantees that the original investment will stay the same. TIPS decline in value when real interest rates rise.  However, in certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, TIPS may experience greater losses than other fixed income securities with similar duration.
 
United States Government Agency
 
These consist of debt securities issued by agencies and instrumentalities of the United States government, including the various types of instruments currently outstanding or which may be offered in the future. Agencies include, among others, the Federal Housing Administration, Government National Mortgage Association (“GNMA”), Farmer’s Home Administration, Export-Import Bank of the United States, Maritime Administration, and General Services Administration. Instrumentalities include, for example, each of the Federal Home Loan Banks, the National Bank for Cooperatives, the Federal Home Loan Mortgage Corporation (“FHLMC”), the Farm Credit Banks, the Federal National Mortgage Association (“FNMA”), and the United States Postal Service. These securities are either: (i) backed by the full faith and credit of the United States government (e.g., United States Treasury Bills); (ii) guaranteed by the United States Treasury (e.g., GNMA mortgage-backed securities); (iii) supported by the issuing agency’s or instrumentality’s right to borrow from the United States Treasury (e.g., FNMA Discount Notes); or (iv) supported only by the issuing agency’s or instrumentality’s own credit (e.g., Tennessee Valley Association).  On September 7, 2008, the U.S. Treasury Department and the Federal Housing Finance Authority (the “FHFA”) announced that FNMA and FHLMC had been placed into conservatorship, a statutory process designed to stabilize a troubled institution with the objective of returning the entity to normal business operations. The U.S. Treasury Department and the FHFA at the same time established a secured lending facility and a Secured Stock Purchase Agreement with both FNMA and FHLMC to ensure that each entity had the ability to fulfill its financial obligations.  The FHFA announced that it does not anticipate any disruption in pattern of payments or ongoing business operations of FNMA and FHLMC.
 
 

Government-related guarantors (i.e. not backed by the full faith and credit of the United States Government) include FNMA and FHLMC. FNMA is a government-sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases conventional (i.e., not insured or guaranteed by any government agency) residential mortgages from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the United States Government. FHLMC was created by Congress in 1970 for the purpose of increasing the availability of mortgage credit for residential housing. It is a government-sponsored corporation formerly owned by the twelve Federal Home Loan Banks and now owned entirely by private stockholders. FHLMC issues Participation Certificates (“PC’s”), which represent interests in conventional mortgages from FHLMC’s national portfolio. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but PCs are not backed by the full faith and credit of the United States Government. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Pools created by such nongovernmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government or agency guarantees of payments in the former pools. However, timely payment of interest and principal of these pools may be supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers.
 
Mortgage Pass-Through Securities
 
Interests in pools of mortgage pass-through securities differ from other forms of debt securities (which normally provide periodic payments of interest in fixed amounts and the payment of principal in a lump sum at maturity or on specified call dates). Instead, mortgage pass-through securities provide monthly payments consisting of both interest and principal payments. In effect, these payments are a “pass-through” of the monthly payments made by the individual borrowers on the underlying residential mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Unscheduled payments of principal may be made if the underlying mortgage loans are repaid or refinanced or the underlying properties are foreclosed, thereby shortening the securities’ weighted average life. Some mortgage pass-through securities (such as securities guaranteed by GNMA) are described as “modified pass-through securities.” These securities entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of certain fees, on the scheduled payment dates regardless of whether the mortgagor actually makes the payment.
 
 

The principal governmental guarantor of mortgage pass-through securities is GNMA. GNMA is authorized to guarantee, with the full faith and credit of the U.S. Treasury, the timely payment of principal and interest on securities issued by lending institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of mortgage loans. These mortgage loans are either insured by the Federal Housing Administration or guaranteed by the Veterans Administration. A “pool” or group of such mortgage loans is assembled and after being approved by GNMA, is offered to investors through securities dealers.

Government-related guarantors of mortgage pass-through securities (i.e., not backed by the full faith and credit of the U.S. Treasury) include FNMA and FHLMC.  FNMA is a government-sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases conventional (i.e., not insured or guaranteed by any government agency) residential mortgages from a list of approved sellers/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Mortgage pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the U.S. Treasury.

FHLMC was created by Congress in 1970 for the purpose of increasing the availability of mortgage credit for residential housing. It is a U.S. government-sponsored corporation formerly owned by the twelve Federal Home Loan Banks and now owned entirely by private stockholders. FHLMC issues Participation Certificates (“PCs”), which represent interests in conventional mortgages from FHLMC’s national portfolio. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but PCs are not backed by the full faith and credit of the U.S. Treasury.

Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage pass-through securities. The Fund does not purchase interests in pools created by such non-governmental issuers.

Resets. The interest rates paid on the Adjustable Rate Mortgage Securities (“ARMs”) in which the Fund may invest generally are readjusted or reset at intervals of one year or less to an increment over some predetermined interest rate index. There are two main categories of indices: those based on U.S. Treasury securities and those derived from a calculated measure, such as a cost of funds index or a moving average of mortgage rates. Commonly utilized indices include the one-year and five-year constant maturity Treasury Note rates, the three-month Treasury Bill rate, the 180-day Treasury Bill rate, rates on longer-term Treasury securities, the National Median Cost of Funds, the one-month or three-month London Interbank Offered Rate (LIBOR), the prime rate of a specific bank, or commercial paper rates. Some indices, such as the one-year constant maturity Treasury Note rate, closely mirror changes in market interest rate levels. Others tend to lag changes in market rate levels and tend to be somewhat less volatile.

Caps and Floors.   The underlying mortgages which collateralize the ARMs in which the Fund invests will frequently have caps and floors which limit the maximum amount by which the loan rate to the residential borrower may change up or down: (1) per reset or adjustment interval, and (2) over the life of the loan. Some residential mortgage loans restrict periodic adjustments by limiting changes in the borrower’s monthly principal and interest payments rather than limiting interest rate changes. These payment caps may result in negative amortization. The value of mortgage securities in which the Fund invests may be affected if market interest rates rise or fall faster and farther than the allowable caps or floors on the underlying residential mortgage loans. Additionally, even though the interest rates on the underlying residential mortgages are adjustable, amortization and prepayments may occur, thereby causing the effective maturities of the mortgage securities in which the Fund invests to be shorter than the maturities stated in the underlying mortgages.
 
 
Illiquid and Restricted Securities
 
The Fund may invest up to 15% of its net assets in illiquid securities. Illiquid securities include securities subject to contractual or legal restrictions on resale (e.g., because they have not been registered under the Securities Act of 1933, as amended (the “Securities Act”)) and securities that are otherwise not readily marketable (e.g., because trading in the security is suspended or because market makers do not exist or will not entertain bids or offers). Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. Foreign securities that are freely tradable in their principal markets are not considered to be illiquid.

Restricted and other illiquid securities may be subject to the potential for delays on resale and uncertainty in valuation. The Fund might be unable to dispose of illiquid securities promptly or at reasonable prices and might thereby experience difficulty in satisfying redemption requests from shareholders. The Fund might have to register restricted securities in order to dispose of them, resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

A large institutional market exists for certain securities that are not registered under the Securities Act, including foreign securities. The fact that there are contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of such investments. Rule 144A under the Securities Act allows such a broader institutional trading market for securities otherwise subject to restrictions on resale to the general public. Rule 144A establishes a “safe harbor” from the registration requirements of the Securities Act for resale of certain securities to qualified institutional buyers. Rule 144A has produced enhanced liquidity for many restricted securities, and market liquidity for such securities may continue to expand as a result of this regulation and the consequent existence of the PORTAL system, which is an automated system for the trading, clearance and settlement of unregistered securities of domestic and foreign issuers sponsored by the Financial Industry Regulatory Authority, Inc.

Under guidelines adopted by the Trust’s Board, the Adviser of the Fund may determine that particular Rule 144A securities, and commercial paper issued in reliance on the private placement exemption from registration afforded by Section 4(a)(2) of the Securities Act, are liquid even though they are not registered. A determination of whether such a security is liquid or not is a question of fact. In making this determination, the Adviser will consider, as it deems appropriate under the circumstances and among other factors: (1) the frequency of trades and quotes for the security; (2) the number of dealers that purchase or sell the security; (3) the number of dealers that have undertaken to make a market in the security; (4) the number of potential purchasers; and (5) the nature of the security and how trading is effected (e.g., the time needed to sell the security, how bids are solicited and the mechanics of transfer).

Rule 144A securities and Section 4(a)(2) commercial paper that have been deemed liquid as described above will continue to be monitored by the Fund’s Adviser to determine if the security is no longer liquid as the result of changed conditions. Investing in Rule 144A securities or Section 4(a)(2) commercial paper could have the effect of increasing the amount of the Fund’s assets invested in illiquid securities if institutional buyers are unwilling to purchase such securities.
 
Repurchase Agreements
 
The Fund may enter into repurchase agreements. In a repurchase agreement, an investor (such as the Fund) purchases a security (known as the “underlying security”) from a securities dealer or bank. Any such dealer or bank must be deemed creditworthy by the Adviser. At that time, the bank or securities dealer agrees to repurchase the underlying security at a mutually agreed upon price on a designated future date. The repurchase price may be higher than the purchase price, the difference being income to the Fund, or the purchase and repurchase prices may be the same, with interest at an agreed upon rate due to the Fund on repurchase. In either case, the income to the Fund generally will be unrelated to the interest rate on the underlying securities. Repurchase agreements must be “fully collateralized,” in that the market value of the underlying securities (including accrued interest) must at all times be equal to or greater than the repurchase price. Therefore, a repurchase agreement can be considered a loan collateralized by the underlying securities.
 
 

Repurchase agreements are generally for a short period of time, often less than a week, and will generally be used by the Fund to invest excess cash or as part of a temporary defensive strategy. Repurchase agreements that do not provide for payment within seven days will be treated as illiquid securities. In the event of a bankruptcy or other default by the seller of a repurchase agreement, the Fund could experience both delays in liquidating the underlying security and losses. These losses could result from: (a) possible decline in the value of the underlying security while the Fund is seeking to enforce its rights under the repurchase agreement; (b) possible reduced levels of income or lack of access to income during this period; and (c) expenses of enforcing its rights.
 
When-Issued, Forward Commitments and Delayed Settlements
 
The Fund may purchase and sell securities on a when-issued, forward commitment or delayed settlement basis. In this event, the custodian will segregate liquid assets equal to the amount of the commitment in a separate account. Normally, the custodian will set aside portfolio securities to satisfy a purchase commitment. In such a case, the Fund may be required subsequently to segregate additional assets in order to assure that the value of the account remains equal to the amount of the Fund’s commitment. It may be expected that the Fund’s net assets will fluctuate to a greater degree when it sets aside portfolio securities to cover such purchase commitments than when it sets aside cash.
 
The Fund does not intend to engage in these transactions for speculative purposes but only in furtherance of its investment objectives. Because the Fund will segregate liquid assets to satisfy its purchase commitments in the manner described, the Fund’s liquidity and the ability of the Fund’s Adviser to manage them may be affected in the event the Fund’s forward commitments, commitments to purchase when-issued securities and delayed settlements ever exceeded 15% of the value of its net assets.

The Fund will purchase securities on a when-issued, forward commitment or delayed settlement basis only with the intention of completing the transaction. If deemed advisable as a matter of investment strategy, however, the Fund may dispose of or renegotiate a commitment after it is entered into, and may sell securities it has committed to purchase before those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize a taxable capital gain or loss. When the Fund engages in when-issued, forward commitment and delayed settlement transactions, it relies on the other party to consummate the trade. Failure of such party to do so may result in the Fund incurring a loss or missing an opportunity to obtain a price credited to be advantageous.

The market value of the securities underlying a when-issued purchase, forward commitment to purchase securities, or a delayed settlement and any subsequent fluctuations in their market value is taken into account when determining the market value of the Fund starting on the day the Fund agrees to purchase the securities. The Fund does not earn interest on the securities it has committed to purchase until it has paid for and delivered on the settlement date.

Lending Portfolio Securities

For the purpose of achieving income, the Fund may lend its portfolio securities, provided (1) the loan is secured continuously by collateral consisting of U.S. Government securities or cash or cash equivalents (cash, U.S. Government securities, negotiable certificates of deposit, bankers’ acceptances or letters of credit) maintained on a daily mark-to-market basis in an amount at least equal to the current market value of the securities loaned, (2) the Fund may at any time call the loan and obtain the return of securities loaned, (3) the Fund will receive any interest or dividends received on the loaned securities, and (4) the aggregate value of the securities loaned will not at any time exceed one-third of the total assets of the Fund.
 
Short Sales
 
The Fund may sell securities short. A short sale is a transaction in which the Fund sells a security it does not own or have the right to acquire (or that it owns but does not wish to deliver) in anticipation that the market price of that security will decline.
 
 

When the Fund makes a short sale, the broker-dealer through which the short sale is made must borrow the security sold short and deliver it to the party purchasing the security. The Fund is required to make a margin deposit in connection with such short sales; the Fund may have to pay a fee to borrow particular securities and will often be obligated to pay over any dividends and accrued interest on borrowed securities.

If the price of the security sold short increases between the time of the short sale and the time the Fund covers its short position, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged.

To the extent the Fund sells securities short, it will provide collateral to the broker-dealer and (except in the case of short sales “against the box”) will maintain additional asset coverage in the form of cash, U.S. government securities or other liquid securities with its custodian in a segregated account in an amount at least equal to the difference between the current market value of the securities sold short and any amounts required to be deposited as collateral with the selling broker (not including the proceeds of the short sale).  A short sale is “against the box” to the extent the Fund contemporaneously owns, or has the right to obtain at no added cost, securities identical to those sold short.

Cybersecurity Risk   

With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events. Cyber attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Cyber incidents affecting the Fund or its service providers have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund’s ability to calculate its NAV, impediments to trading, the inability of fund shareholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. Similar adverse consequences could result from cyber incidents affecting issuers of securities in which a fund invests, counterparties with which the Fund engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers, insurance companies and other financial institutions (including financial intermediaries and service providers for fund shareholders) and other parties. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the Fund’s service providers have established business continuity plans in the event of, and risk management systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cyber security plans and systems put in place by its service providers or any other third parties whose operations may affect the Funds or their shareholders. The Fund and its shareholders could be negatively impacted as a result.
 
Large Shareholder Risk. Certain account holders may from time to time own or control a significant percentage of the Fund’s shares. The Fund is subject to the risk that a redemption by large shareholders of all or a portion of their Fund shares or a purchase of Fund shares in large amounts and/or on a frequent basis will adversely affect the Fund’s performance if it is forced to sell portfolio securities or invest cash when the Adviser would not otherwise choose to do so. This risk will be particularly pronounced if one shareholder owns a substantial portion of the Fund. Redemptions of a large number of shares may affect the liquidity of the Fund’s portfolio, increase the Fund’s transaction costs and/or lead to the liquidation of the Fund. Such transactions also potentially limit the use of any capital loss carryforwards and certain other losses to offset future realized capital gains (if any).
 
 
Temporary Defensive Positions

In order to respond to adverse market, economic, political or other conditions, the Fund may assume a temporary defensive position that is inconsistent with its investment objectives and principal investment strategies and invest, without limitation, in cash or prime quality cash equivalents.
 
INVESTMENT RESTRICTIONS
 
The Trust (on behalf of the Fund) has adopted the following restrictions as fundamental policies, which may not be changed without the affirmative vote of the holders of a “majority” of the outstanding voting securities of the Fund. Under the 1940 Act, the “vote of the holders of a majority of the outstanding voting securities” means the vote of the holders of the lesser of (i) 67% or more of the shares of the Fund present at a meeting at which the holders of more than 50% of the Fund’s outstanding shares are present or represented by proxy or (ii) more than 50% of the outstanding shares of the Fund.

As a matter of fundamental policy, the Fund may not:

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.

Except with respect to borrowing and liquidity, if a percentage or rating restriction on investment or use of assets set forth herein or in the Prospectus is adhered to at the time a transaction is effected, later changes in the percentage or rating resulting from any cause other than actions by the Fund will not be considered a violation of the Fund’s investment restrictions. If the value of the Fund’s holdings of illiquid securities at any time exceeds the percentage limitation applicable due to subsequent fluctuations in value or other reasons, the Board will consider what actions are appropriate to maintain adequate liquidity.
 
With respect to repurchase agreements, the Fund invests in repurchase agreements that are fully collateralized by securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or by corporate or sovereign bonds.  For purposes of the Fund's fundamental investment policy with respect to concentration, the Fund does not consider such repurchase agreements to constitute an industry or group of industries because the Fund chooses to look through such securities to the underlying collateral, which is itself excepted from the Fund's concentration policy.

The following descriptions of the 1940 Act may assist investors in understanding the above policies and restrictions.
 
Lending. The 1940 Act does not prohibit a fund from making loans (including lending its securities); however, SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets (including lending its securities), except through the purchase of debt obligations or the use of repurchase agreements. In addition, collateral arrangements with respect to options, forward currency and futures transactions and other derivative instruments (as applicable), as well as delays in the settlement of securities transactions, will not be considered loans.
 
Borrowing. The 1940 Act permits a fund to borrow money in amounts of up to one-third of the fund’s total assets from banks for any purpose, and to borrow up to 5% of the fund’s total assets from banks or other lenders for temporary purposes. (A fund’s total assets include the amounts being borrowed.) To limit the risks attendant to borrowing, the 1940 Act requires a fund to maintain at all times “asset coverage” of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value of a fund’s total assets (including amounts borrowed), minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Borrowing money to increase portfolio holdings is known as “leveraging.” Certain trading practices and investments, such as reverse repurchase agreements, may be considered to be borrowings or involve leverage and thus are subject to the 1940 Act restrictions. In accordance with SEC staff guidance and interpretations, when a fund engages in such transactions, the fund instead of maintaining asset coverage of at least 300%, may segregate or earmark liquid assets, or enter into an offsetting position, in an amount at least equal to the fund’s exposure, on a mark-to-market basis, to the transaction (as calculated pursuant to requirements of the SEC). The fundamental restriction in (2) above will be interpreted to permit the Fund to engage in trading practices and investments that may be considered to be borrowing or to involve leverage to the extent permitted by the 1940 Act and to permit the Fund to segregate or earmark liquid assets or enter into offsetting positions in accordance with the 1940 Act. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings under the policy. Practices and investments that may involve leverage but are not considered to be borrowings are not subject to the policy.
 
Concentration. The SEC staff has defined concentration as investing 25% or more of a fund’s total assets in any particular industry or group of industries, with certain exceptions such as with respect to investments in obligations issued or guaranteed by the U.S. government or its agencies and instrumentalities, or tax-exempt obligations of state or municipal governments and their political subdivisions.   For purposes of the Fund’s concentration policy, the Fund may classify and re-classify companies in a particular industry and define and re-define industries in any reasonable manner, consistent with SEC and SEC staff guidance.
 
 
Diversification. Under the 1940 Act and the rules, regulations and interpretations thereunder, an investment company is a “diversified company” if, as to 75% of its total assets, it does not purchase securities of any issuer (other than obligations of, or guaranteed by, the U.S. government or its agencies, or instrumentalities or securities of other investment companies) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, or more than 10% of the issuer’s voting securities would be held by the investment company.  For purposes of the Fund’s diversification policy, the identification of the issuer of a security may be determined in any reasonable manner, consistent with SEC guidance.
 
Underwriting. The 1940 Act does not prohibit a fund from engaging in the underwriting business or from underwriting the securities of other issuers; in fact, in the case of diversified funds, the 1940 Act permits a fund to have underwriting commitments of up to 25% of its assets under certain circumstances. Those circumstances currently are that the amount of the fund’s underwriting commitments, when added to the value of the fund’s investments in issuers where the fund owns more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap.
 
PORTFOLIO TURNOVER
 
The frequency of the Fund’s portfolio transactions (the portfolio turnover rate) will vary from year to year depending on many factors. The Fund expects its annual portfolio turnover rate to exceed 100%. Higher portfolio turnover rates may result in increased brokerage costs to the Fund and a possible increase in short-term capital gains or losses. The Fund’s annual portfolio turnover rate will be included in the “Financial Highlights” section of the Fund’s Prospectus following the commencement of Fund operations.
 
PORTFOLIO HOLDINGS INFORMATION

The Trust, on behalf of the Fund, has adopted a portfolio holdings disclosure policy that governs the timing and circumstances of disclosure of portfolio holdings of the Fund. The Adviser has also adopted a policy with respect to disclosure of Fund’s portfolio holdings (the “Adviser’s Policy”). Information about the Fund’s portfolio holdings will not be distributed to any third party except in accordance with the portfolio holdings policies and the Adviser’s Policy (the “Disclosure Policies”). The Adviser and the Board considered the circumstances under which the Fund’s portfolio holdings may be disclosed under the Disclosure Policies and the actual and potential material conflicts that could arise in such circumstances between the interests of the Fund’s shareholders and the interests of the Adviser, distributor or any other affiliated person of the Fund. After due consideration, the Adviser and the Board determined that the Fund has a legitimate business purpose for disclosing portfolio holdings to persons described in the Disclosure Policies, including mutual fund rating or statistical agencies, or persons performing similar functions, and internal parties involved in the investment process, administration or custody of the Fund. Pursuant to the Disclosure Policies, the Trust’s Chief Compliance Officer (“CCO”), is authorized to consider and authorize dissemination of portfolio holdings information to additional third parties, after considering the best interests of the Fund shareholders and potential conflicts of interest in making such disclosures.
 
The Board exercises continuing oversight of the disclosure of the Fund’s portfolio holdings by (1) overseeing the implementation and enforcement of the Disclosure Policies, Codes of Ethics and other relevant policies of the Fund and its service providers by the Trust’s CCO, (2) by considering reports and recommendations by the Trust’s CCO concerning any material compliance matters (as defined in Rule 38a-1 under the 1940 Act), and (3) by considering the approval of any amendment to the Disclosure Policies. The Board reserves the right to amend the Disclosure Policies at any time without prior notice to shareholders in its sole discretion.

Disclosure of the Fund’s complete holdings is required to be made quarterly within 60 days of the end of each period covered by the Annual Report and Semi-Annual Report to Fund shareholders and in the quarterly holdings report on Form N-Q. These reports are available, free of charge, on the EDGAR database on the SEC’s website at www.sec.gov. The Fund may disclose its top ten portfolio holdings, among other information, on its website at www.gweiss.com/Solutions/Mutual-Funds/ within 15 days after each quarter’s end. Portfolio holdings information posted on the Fund’s website may be separately provided to any person, commencing on the day after it is first published on the Fund’s website. In addition, the Fund may provide its complete portfolio holdings at the same time that it is filed with the SEC.
 
 

In the event of a conflict between the interests of the Fund and the interests of the Adviser or an affiliated person of the Adviser, the CCO of the Adviser, in consultation with the Trust’s CCO, shall make a determination in the best interests of the Fund, and shall report such determination to the Board at the end of the quarter in which such determination was made. Any employee of the Adviser who suspects a breach of this obligation must report the matter immediately to the Adviser’s CCO or to his or her supervisor.

In addition, material non-public holdings information may be provided without lag as part of the normal investment activities of the Fund to each of the following entities, which, by explicit agreement or by virtue of their respective duties to the Fund, are required to maintain the confidentiality of the information disclosed, including a duty not to trade on non-public information:  the fund administrator, fund accountant, custodian, transfer agent, auditors, counsel to the Fund or the Board, broker-dealers (in connection with the purchase or sale of securities or requests for price quotations or bids on one or more securities) and regulatory authorities. Portfolio holdings information not publicly available with the SEC or through the Fund’s website may only be provided to additional third parties, including mutual fund ratings or statistical agencies, in accordance with the Disclosure Policies, when the Fund has a legitimate business purpose and the third party recipient is subject to a confidentiality agreement that includes a duty not to trade on non-public information.

In no event shall the Adviser, its affiliates or employees, the Fund, or any other party receive any direct or indirect compensation in connection with the disclosure of information about the Fund’s portfolio holdings.

There can be no assurance that the Disclosure Policies will protect the Fund from potential misuse of portfolio holdings information by individuals or entities to which it is disclosed.

From time to time, the Adviser may make additional disclosure of the Fund’s portfolio holdings on the Fund’s website. Shareholders can access the Fund’s website at www.gweiss.com/Solutions/Mutual-Funds/ for additional information about the Fund, including, without limitation, the periodic disclosure of its portfolio holdings.
 
 

TRUSTEES AND EXECUTIVE OFFICERS

The Board oversees the management and operations of the Trust. The Board, in turn, elects the officers of the Trust, who are responsible for the day-to-day operations of the Trust and its separate series. The current Trustees and executive officers of the Trust, their year of birth, positions with the Trust, terms of office with the Trust and length of time served, principal occupations during the past five years and other directorships are set forth in the table below. Unless noted otherwise, the principle business address of each Trustee is c/o U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202.

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.

Additional Information Concerning the Board of Trustees

The Role of the Board

The Board oversees the management and operations of the Trust. Like all mutual funds, the day-to-day management and operation of the Trust is the responsibility of the various service providers to the Trust, such as the Adviser, the Distributor, the Administrator, the Custodian, and the Transfer Agent, each of whom are discussed in greater detail in this SAI. The Board has appointed various senior employees of the Administrator as officers of the Trust, with responsibility to monitor and report to the Board on the Trust’s operations. In conducting this oversight, the Board receives regular reports from these officers and the service providers. For example, the Treasurer reports as to financial reporting matters and the President reports as to matters relating to the Trust’s operations. In addition, the Adviser provides regular reports on the investment strategy and performance of the Fund. The Board has appointed a CCO who administers the Trust’s compliance program and regularly reports to the Board as to compliance matters. These reports are provided as part of formal “Board Meetings” which are typically held quarterly, in person, and involve the Board’s review of recent operations. In addition, various members of the Board also meet with management in less formal settings, between formal “Board Meetings,” to discuss various topics. In all cases, however, the role of the Board and of any individual Trustee is one of oversight and not of management of the day-to-day affairs of the Trust and its oversight role does not make the Board a guarantor of the Trust’s investments, operations or activities.
 
 

Board Structure, Leadership

The Board has structured itself in a manner that it believes allows it to perform its oversight function effectively. It has established three standing committees, a Nominating Committee, an Audit Committee, and a Qualified Legal Compliance Committee, which are discussed in greater detail below under “Trust Committees”. The Board is comprised of one Interested Trustee and three Independent Trustees, which are Trustees that are not affiliated with the Adviser, the principal underwriter, or their affiliates. The Nominating Committee, Audit Committee and Qualified Legal Compliance Committee are comprised entirely of Independent Trustees. The Chair of the Board is an Interested Trustee. The Board has determined not to combine the Chair position and the principal executive officer position and has appointed a Vice President of the Administrator as the President of the Trust. The Board reviews its structure and the structure of its committees annually. The Board has determined that the structure of the Interested Chair, the composition of the Board, and the function and composition of its various committees are appropriate means to address any potential conflicts of interest that may arise.

Board Oversight of Risk Management

As part of its oversight function, the Board receives and reviews various risk management reports and discusses these matters with appropriate management and other personnel. Because risk management is a broad concept comprised of many elements ( e.g., investment risk, issuer and counterparty risk, compliance risk, operational risks, business continuity risks, etc.), the oversight of different types of risks is handled in different ways. For example, the Audit Committee meets with the Treasurer and the Trust’s independent registered public accounting firm to discuss, among other things, the internal control structure of the Trust’s financial reporting function. The Board meets regularly with the Chief Compliance Officer to discuss compliance and operational risks and how they are managed. The Board also receives reports from the Adviser as to investment risks of the Fund. In addition to these reports, from time to time the Board receives reports from the Administrator and the Adviser as to enterprise risk management.

Information about Each Trustee’s Qualification, Experience, Attributes or Skills

The Board believes that each of the Trustees has the qualifications, experience, attributes and skills (“Trustee Attributes”) appropriate to their continued service as Trustees of the Trust in light of the Trust’s business and structure. The Board annually conducts a “self-assessment” wherein the effectiveness of the Board and individual Trustees is reviewed.

In addition to the information provided in the chart above, below is certain additional information concerning each particular Trustee and his/her Trustee Attributes. The information is not all-inclusive. Many Trustee Attributes involve intangible elements, such as intelligence, integrity, work ethic, the ability to work together, the ability to communicate effectively, the ability to exercise judgment, to ask incisive questions, and commitment to shareholder interests.

Koji Felton. Mr. Felton has served as a Trustee since 2015 and has substantial experience with the mutual fund industry and familiarity with federal securities laws and regulations. Mr. Felton’s prior experience includes serving as Director and Counsel for KKR Credit Advisors LLC, the asset manager arm of Kohlberg Kravis Roberts & Co. L.P. (2013 to 2015). Prior thereto, Mr. Felton served as counsel in the Financial Services Group at Dechert LLP from (2011 to 2013), as well as in various capacities, and ultimately as Senior Vice President and Deputy General Counsel for mutual funds, at Charles Schwab & Co., Inc. (1998 – 2011). Mr. Felton also worked as a staff attorney and served as the Enforcement Branch Chief for the San Francisco District Office of the U.S. Securities and Exchange Commission (1992-1998). Mr. Felton began his career as a litigation associate specializing in securities and banking litigation at Shearman & Sterling (1986-1992).
 
 

Debra McGinty-Poteet.   Ms. McGinty-Poteet has served as a Trustee since 2015 and has significant mutual fund industry experience, including her current and prior experience on mutual fund boards. Ms. McGinty-Poteet currently also serves an Independent Trustee for First Western Funds Trust. Prior to becoming a Trustee of the Trust, Ms. McGinty-Poteet served as the President and Interested Trustee for Brandes Investment Trust where she also oversaw the proprietary and sub-advisory mutual fund business for Brandes Investment Advisors (1999 – 2015). Ms. McGinty-Poteet previously served as Chief Operating Officer of North American Trust Company (1997 – 1998); Global Managing Director of Mutual Funds at Bank of America (1992 – 1996); and in various capacities, and ultimately as Global Head of Mutual Funds, at Security Pacific Bank (1982 – 1992).

Daniel Willey. Mr. Willey has served as a Trustee since 2015 and has significant work history and experience in the investment management industry. As a chief compliance officer, Mr. Willey has valuable experience in an oversight role and in working with regulatory compliance matters. Mr. Willey currently serves as the Chief Compliance Officer of the United Nations Joint Staff Pension Fund (since 2009). Prior to his current role, Mr. Willey served as the Chief Operating and Chief Compliance Officer of Barrett Associates, Inc. (investment adviser and affiliate of Legg Masson (2007 – 2009); President and Chief Executive Officer of TIMCO, Citigroup Asset Management (2004 – 2006); Head Equity Trader of TIMCO (1994 – 2004); Vice President, Shawmut National Bank (2992 – 1994); Investment Officer, State of Connecticut (1990 – 1992); Vice President, Bank of New England (Connecticut Bank & Trust) (1981 – 1990); Registered Representative, Tucker Anthony and R.L. Day, Inc. (1979 – 1981); and Assistant Analyst, The Travelers Insurance Company (1977 – 1979).

Dana Armour. Ms. Armour has served as a Trustee since 2015 and has experience, knowledge, and understanding of the mutual fund industry. Ms. Armour currently serves as an Executive Vice President of U.S. Bancorp Fund Services, LLC (since 2013), where she oversees the Relationship Management group and Fund Accounting department. Ms. Armour has served in various capacities since joining U.S. Bancorp Fund Services in 1992, and has extensive experience in 1940 Act, SEC, and IRS compliance, financial statement preparation. In addition, Ms. Armour has extensive experience in the oversight of regulatory examinations and providing support and assistance to mutual fund clients implementing new regulatory requirements.

Trust Committees

The Trust has three standing committees: the Nominating Committee and the Audit Committee, which also serves as the Qualified Legal Compliance Committee (“QLCC”).

The Nominating Committee, comprised of all the Independent Trustees, is responsible for seeking and reviewing candidates for consideration as nominees for Trustees and meets only as necessary. The Nominating Committee will consider nominees nominated by shareholders. Recommendations by shareholders for consideration by the Nominating Committee should be sent to the President of the Trust in writing together with the appropriate biographical information concerning each such proposed Nominee, and such recommendation must comply with the notice provisions set forth in the Trust By-Laws. In general, to comply with such procedures, such nominations, together with all required biographical information, must be delivered to and received by the President of the Trust at the principal executive offices of the Trust no less than 120 days and no more than 150 days prior to the shareholder meeting at which any such nominee would be voted on. The Nominating Committee has not held any meetings as of the date of this SAI.

The Audit Committee is comprised of all of the Independent Trustees. The Audit Committee generally meets on a quarterly basis with respect to the various series of the Trust, and may meet more frequently. The function of the Audit Committee, with respect to each series of the Trust, is to review the scope and results of the audit of such series’ financial statements and any matters bearing on the audit or the financial statements, and to ensure the integrity of the series’ pricing and financial reporting. The Audit Committee has not held any meetings as of the date of this SAI.

The function of the QLCC is to receive reports from an attorney retained by the Trust of evidence of a material violation by the Trust or by any officer, director, employee or agent of the Trust.
 
 

The Board has delegated day-to-day valuation issues to a Valuation Committee that is comprised of certain officers of the Trust and is overseen by the Trustees. The function of the Valuation Committee is to value securities held by any series of the Trust for which current and reliable market quotations are not readily available. Such securities are valued at their respective fair values as determined in good faith by the Valuation Committee, and the actions of the Valuation Committee are subsequently reviewed and ratified by the Board. The Valuation Committee meets as needed. The Valuation Committee has not held any meetings with respect to the Fund as of the date of this SAI.

Trustee Ownership of Fund Shares and Other Interests

No Trustee beneficially owned shares of the Fund as of the calendar year ended December 31, 2014, which is prior to the inception date of the Fund.

Compensation

Independent Trustees each will receive an annual retainer of $15,000 allocated among each of the various portfolios comprising the Trust. In addition, the Independent Trustees will receive $1,000 per meeting attended in-person and $500 for telephonic meetings. Independent Trustees will receive additional fees from applicable portfolios for any special meetings at rates assessed by the Trustees depending on the length of the meeting and whether in-person attendance is required. Independent Trustees will also be reimbursed for expenses in connection with each Board meeting attended. These reimbursements will be allocated among applicable portfolios of the Trust. The Trust has no pension or retirement plan. No other entity affiliated with the Trust pays any compensation to the Trustees. Set forth below is the estimated compensation to be received by the following Independent Trustees from the Fund for the fiscal year ended October 31, 2016.

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.
 
 
Codes of Ethics

The Trust, the Adviser and the principal underwriter have each adopted Codes of Ethics under Rule 17j-1 of the 1940 Act. These Codes permit, subject to certain conditions, personnel of the Adviser and Distributor to invest in securities that may be purchased or held by the Fund.
 
 
 
PROXY VOTING POLICIES AND PROCEDURES
 
The Board has adopted Proxy Voting Policies and Procedures (“Proxy Policies”) on behalf of the Trust which delegate the responsibility for voting proxies to the Adviser, subject to the Board’s continuing oversight. The Proxy Policies require that the Adviser vote proxies received in a manner consistent with the best interests of the Fund and tis shareholders. The Proxy Policies also require the Adviser to present to the Board, at least annually, the Adviser’s Proxy Policies and a record of each proxy voted by the Adviser on behalf of the Fund, including a report on the resolution of all proxies identified by the Adviser as involving a conflict of interest.

The Adviser has adopted Proxy Policies, which may be amended from time to time. In voting proxies, the Adviser is guided by fiduciary principles. All proxies are to be voted solely in the best interests of the beneficial owners of the securities. The Adviser’s Policy is attached as Appendix A.

The Trust is required to file a Form N-PX, with the Fund’s complete proxy voting record for the 12 months ended June 30, no later than August 31 of each year. Form N-PX for the Fund will be available without charge, upon request, by calling toll-free 866-530-2690 and on the SEC’s website at www.sec.gov.

CONTROL PERSONS, PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP

A principal shareholder is any person who owns of record or beneficially owns 5% or more of the outstanding shares of the Fund. A control person is any person who owns beneficially or through controlled companies more than 25% of the voting securities of the Fund or acknowledges the existence of control.

Since the Fund had not commenced operations prior to the date of this SAI, there are no principal shareholders or control persons of the Fund as of the date of this SAI and the Trustees and officers of the Trust as a group did not own more than 1% of the outstanding shares of the Fund.
 
THE FUND’S INVESTMENT ADVISER
 
As stated in the Prospectus, investment advisory services are provided to the Fund by the Adviser, Weiss Multi-Strategy Advisers LLC, pursuant to an Investment Advisory Agreement (the “Advisory Agreement”). The Adviser is majority-owned by GWA, LLC, a Connecticut limited liability company. GWA, LLC, in turn, is majority-owned by Weiss Family Interests LLC, which is majority-owned by various Weiss family trusts. A substantial number of the Adviser’s employees also own minority interests in GWA, LLC. As the investment adviser to the Fund, the Adviser oversees the provision of all management, administration, investment advisory and general services for the Fund.

As compensation, the Fund will pay the Adviser a monthly management fee (accrued daily) based upon the average daily net assets of the Fund at the annual rate of 1.60%.

The Advisory Agreement continues in effect for an initial two year period, and from year to year thereafter only if such continuance is specifically approved at least annually by the Board or by vote of a majority of the Fund’s outstanding voting securities and by a majority of the Independent Trustees, who are not parties to the Advisory Agreement or interested persons of any such party, in each case cast in person at a meeting called for the purpose of voting on the Advisory Agreement. The Advisory Agreement is terminable without penalty by the Trust on behalf of the Fund on not more than 60 days’, nor less than 30 days’, written notice to the Adviser when authorized either by a majority vote of the Fund’s shareholders or by a vote of a majority of the Trustees, or by the Adviser on not more than 60 days’, nor less than 30 days’, written notice to the Trust, and will automatically terminate in the event of its “assignment” (as defined in the 1940 Act). The Advisory Agreement provides that the Adviser shall not be liable under such agreement for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of portfolio transactions for the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties thereunder.
 
 

In addition, the Adviser has contractually agreed to reduce its management fees and/or absorb expenses of each the Fund until at least February 28, 2017, to ensure that total annual fund operating expenses after fee waiver and/or expense reimbursement (exclusive of any taxes, 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) will not exceed 2.50%, 3.15%, 2.25%, and 2.15% of the daily average net assets of the Fund’s Class A, Class C, Class I, and Class K shares, respectively, subject to possible recoupment from the Fund in future years on a rolling three year basis (i.e. within the three years after the fees and/or expenses have been waived or reimbursed) not to exceed the expense limitation in place at the time such amounts were waived or reimbursed

Portfolio Managers.
Jordi Visser, Charles S. Crow IV, and Edward Olanow serve as portfolio managers for the Fund, and are each primarily responsible for the day-to-day management of the Fund. The following table provides information regarding other accounts managed by the portfolio managers, as a group, as of September 30, 2015.

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


Compensation.
Each portfolio manager receives a fixed salary and discretionary bonus for his service as portfolio manager. In addition, Mr. Visser holds an equity interest in the holding company that owns the Adviser. The aforementioned discretionary bonuses are determined by the Adviser in its sole discretion which takes into account such things as Adviser profitability, product profitability and overall employee contributions to the Adviser in the relevant fiscal years. Although Fund performance is not a direct factor in the determination of discretionary bonuses, Fund performance affects the Adviser’s overall profitability, and therefore, indirectly, any such determination.

Conflicts of Interest.
In addition to investing capital for the Fund and Weiss Alpha Balanced Risk Fund LLC (“WABR LLC”), a privately offered hedge fund, the Adviser currently invests capital for Weiss Multi-Strategy Partners LLC and Weiss Multi-Strategy Partners II LLC, each a Delaware limited liability company, and Weiss Insurance Partners (Cayman) Ltd, a Cayman Islands exempted company (together, the “Other Weiss Funds”). Additionally, the Adviser's investment personnel also trade for the Adviser's affiliates, GWA and OGI Associates LLC (collectively referred to as “Inside Capital”) and certain accounts managed for unaffiliated clients (the “Managed Accounts”). The Adviser generally expects to conduct the trading of the Fund in a similar manner as WABR LLC, and generally expects to conduct the trading of the alpha portfolio in a similar manner to the trading done for the Other Weiss Funds, Inside Capital and the Managed Accounts. However, Inside Capital also may be invested in unseasoned “incubator strategies” that may or may not mature into strategies suitable for inclusion in the Fund and certain ancillary strategies that the Adviser does not believe appropriate for trading in the Fund due to their risk profile. The inflows and outflows of capital will also differ in each portfolio. The performance of the Inside Capital, the Other Weiss Funds, the Managed Accounts, WABR LLC and the Fund may not be similar due to the above factors and due to the fact that the respective portfolios may use different amounts of leverage. The Adviser also manages two accounts for charitable organizations founded by George Weiss that have a different investment strategy and portfolio manager than that of the Fund (the “Charitable Accounts”). From time to time, the Charitable Accounts and the “incubator strategies” used by Inside Capital may be invested, or have offsetting positions, in one or more securities in which the Fund is invested.
 
 

The Adviser may give advice or take action with respect to its other clients that differs from the advice given or action taken with respect to the Fund, and the Adviser's obligation to determine suitability for each of its clients may result in seemingly contradictory advice with respect to a single security. For example, the Adviser may purchase a particular security for the Fund at a time when the Adviser is selling or establishing a short position in that same security on behalf of another client. Alternatively, the Adviser may take a short position in a security on behalf of the Fund while maintaining a long position in that same security on behalf of another client. Similarly, the Fund may purchase a security in its long-only portfolio at the same time it is selling or establishing a short position in the same security in the alpha portfolio.

The Adviser, its affiliates and/or one or more of their respective officers, directors, managing members, principals and related parties (collectively, the “Investment Adviser Related Parties”) currently provide investment advice to various other investment vehicles or client accounts (collectively, the “Other Client Accounts”) and conduct investment activities for their own accounts (the “Investment Adviser Accounts” and, together with the Other Client Accounts, the “Other Accounts”). As noted above, the Adviser may give advice or take action with respect to the Other Accounts that differs from the advice given or action taken with respect to the Fund. The Adviser may have an incentive to favor certain Investment Adviser Accounts or Other Client Accounts over the Fund because of proprietary investments in such Investment Adviser Accounts and Other Client Accounts. Because the Adviser may allocate investment opportunities between the Investment Adviser Accounts and the Fund and Other Client Accounts, the Investment Adviser Related Parties may compete with the Fund and Other Client Accounts for limited capacity opportunities. In addition, the Fund has a different fee structure than many of the Adviser’s other clients, and as such the Adviser may have a conflict of interest in allocating investment opportunities among the Fund and such other clients. The Fund’s fee structure may also create an incentive for the Adviser to moderate Fund returns in higher return environments, as there is the potential for the Adviser's operations to be less profitable in such environments.

Employees of the Adviser or its affiliates are permitted to engage in personal investment activities that may involve a conflict of interest with the investment activities of the Fund. The Adviser's compliance procedures require all employees to request permission from the Adviser's compliance officer for personal trades, subject to certain exceptions. The Adviser may change its policies or procedures with respect to such personal investment activities at any time.

The Adviser will use its best efforts in connection with the purposes and objectives of the Fund and will devote so much of its time and effort to the Fund as may, in its judgment, be necessary to accomplish the purposes of the Fund. The Adviser and its members, directors, officers and employees may conduct any other business, including any business with respect to investments, regardless of whether such business is in competition with the Fund. The Fund will not have any right to participate in any manner or have any interest in any such business engaged in by the Adviser or their members, directors, officers, employees or affiliates.

When it is determined that it would be appropriate for the Fund and one or more other investment accounts managed by the Adviser or its affiliates to participate in an investment opportunity, the Adviser will seek to execute orders for all of the participating investment accounts, including the Fund, on an equitable basis, taking into account such factors as the relative amounts of capital available for new investments and the investment programs and portfolio positions of the Fund and the affiliated entities for which participation is appropriate. Orders may be combined for all such accounts. If an order on behalf of more than one account cannot be fully executed under such accounts, or if an order is not filled at the same price, the order may be allocated on an average price basis. If an order on behalf of more than one account cannot be fully executed under prevailing market conditions, securities may be allocated among the different accounts on a basis that the Adviser or its affiliates consider equitable. Situations may occur where the Fund could be disadvantaged because of the investment activities conducted by the Adviser or its affiliates for other investment accounts.
 
 

In addition, if the Adviser determines that it is appropriate for the Fund to buy or sell a security, and for another fund or account to sell or buy that same security, the Adviser may, in accordance with Rule 17a-7 of the 1940 Act, and the Trust’s policies and procedures adopted thereunder, arrange a “cross” trade between the Fund and such other fund or account, if the trade price is no less advantageous for both parties than an open market transaction would be. Transactions among the Fund and other managed accounts may also take place from time to time as necessary to rebalance various portfolio positions. Notwithstanding the foregoing, the Fund will not engage in cross trades in violation of ERISA, to the extent applicable.

The allocations of capital (equity and borrowed) to the Fund, Inside Capital, the Managed Accounts and the Other Weiss Funds affect the allocation of trades among these pools of money and depends on the judgment of the Adviser. This may be an inherent conflict of interest in that the decision of the Adviser to reduce the leverage of the Fund or increase the leverage of the Inside Capital or the Other Weiss Funds will have the effect of increasing the allocation of specific investments to the Inside Capital or the Other Weiss Funds and away from the Fund.

As of the date of this SAI, the Portfolio Manager does not beneficially own any shares of the Fund as the Fund had not commenced operations prior to the date of this SAI.

 
SERVICE PROVIDERS
 
Administrator, Transfer Agent and Fund Accountant

Pursuant to an administration agreement (the “Administration Agreement”), U.S. Bancorp Fund Services, LLC (“USBFS”), 615 East Michigan Street, Milwaukee, Wisconsin 53202, acts as the Administrator to the Fund. USBFS provides certain services to the Fund including, among other responsibilities, coordinating the negotiation of contracts and fees with, and the monitoring of performance and billing of, the Fund’s independent contractors and agents; preparation for signature by an officer of the Trust of all documents required to be filed for compliance by the Trust and the Fund with applicable laws and regulations, excluding those of the securities laws of various states; arranging for the computation of performance data, including NAV and yield; responding to shareholder inquiries; and arranging for the maintenance of books and records of the Fund, and providing, at its own expense, office facilities, equipment and personnel necessary to carry out its duties. In this capacity, USBFS does not have any responsibility or authority for the management of the Fund, the determination of investment policy, or for any matter pertaining to the distribution of the Fund’s shares.

Pursuant to the Administration Agreement, as compensation for its services, USBFS receives from the Fund, a fee based on the Fund’s current average daily net assets, subject to a minimum annual fee.  USBFS also is entitled to certain out-of-pocket expenses. USBFS also acts as fund accountant, transfer agent and dividend disbursing agent under separate agreements.

Custodian

U.S. Bank National Association, is the custodian of the assets of the Fund (the “Custodian”) pursuant to a custody agreement between the Custodian and the Trust, whereby the Custodian provides for fees on a transactional basis plus out-of-pocket expenses. The Custodian’s address is 1555 N. River Center Drive, Suite 302, Milwaukee, Wisconsin 53212. The Custodian does not participate in decisions relating to the purchase and sale of securities by the Fund. USBFS, the Custodian, and the Fund’s principal underwriter are affiliated entities under the common control of U.S. Bancorp. The Custodian and its affiliates may participate in revenue sharing arrangements with the service providers of mutual funds in which the Fund may invest.
 
 

Independent Registered Public Accounting Firm and Legal Counsel

Cohen Fund Audit Services, Ltd., 1350 Euclid Avenue, Suite 800, Cleveland, OH, is the independent registered public accounting firm for the Fund.

Goodwin Procter LLP, 901 New York Avenue, NW Washington, DC 20001, serves as legal counsel to the Trust.
 
EXECUTION OF PORTFOLIO TRANSACTIONS
 
The Adviser is authorized to determine the broker or dealer to be used for each securities transaction for the Fund.  The Fund will not use an affiliated broker-dealer to execute trades on its behalf. In selecting brokers or dealers to execute transactions, the Adviser need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost.  It is not the Adviser’s practice to negotiate “execution only” commission rates, thus the Fund may be deemed to be paying for research, brokerage or other services provided by the broker which are included in the commission rate.

Section 28(e) of the Securities Exchange Act of 1934, as amended, is a “safe harbor” that permits an investment manager to use commissions or “soft dollars” to obtain research and brokerage services that provide lawful and appropriate assistance in the investment decision-making process.  The Adviser will limit the use of “soft dollars” to obtain research and brokerage services to services which constitute research and brokerage within the meaning of Section 28(e).  Research services within Section 28(e) may include, but are not limited to, research reports (including market research); certain financial newsletters and trade journals; software providing analysis of securities portfolios; corporate governance research and rating services; attendance at certain seminars and conferences; discussions with research analysts; meetings with corporate executives; consultants’ advice on portfolio strategy; data services (including services providing market data, company financial data and economic data); advice from brokers on order execution; and certain proxy services.   Brokerage services within Section 28(e) may include, but are not limited to, services related to the execution, clearing and settlement of securities transactions and functions incidental thereto (i.e., connectivity services between an investment manager and a broker-dealer and other relevant parties such as custodians); trading software operated by a broker-dealer to route orders; software that provides trade analytics and trading strategies; software used to transmit orders; clearance and settlement in connection with a trade; electronic communication of allocation instructions; routing settlement instructions; post trade matching of trade information; and services required by the SEC or a self-regulatory organization such as comparison services, electronic confirms or trade affirmations.

In some instances, the Adviser may receive a product or service that may be used only partially for functions within Section 28(e) (e.g., an order management system, trade analytical software or proxy services).  In such instances, the Adviser will make a good faith effort to determine the relative proportion of the product or service used to assist the Adviser in carrying out its investment decision-making or trade execution responsibilities and the relative proportion used for administrative or other purposes outside Section 28(e).  The proportion of the product or service attributable to assisting the Adviser in carrying out its investment decision-making or trade execution responsibilities will be paid through brokerage commissions generated by client transactions and the proportion attributable to administrative or other purposes outside Section 28(e) will be paid for by the Adviser from its own resources.

Research and brokerage services obtained by the use of commissions arising from the Fund’s portfolio transactions may be used by the Adviser in its other investment activities and thus, the Fund may not necessarily, in any particular instance, be the direct or indirect beneficiary of the research or brokerage services provided.
Although the Adviser will make a good faith determination that the amount of commissions paid is reasonable in light of the products or services provided by a broker, commission rates are generally negotiable and thus, selecting brokers on the basis of considerations that are not limited to the applicable commission rates may result in higher transaction costs than would otherwise be obtainable.  The receipt of such products or services and the determination of the appropriate allocation in the case of “mixed use” products or services create a potential conflict of interest between the Adviser and its clients.  In addition, the amount of commissions generated by a particular strategy may impact the compensation payable by the Adviser to the members of the investment team responsible for the strategy, which may provide an incentive for such members to cause the strategy to generate higher commissions.
 
 

In selecting brokers and negotiating commission rates, the Adviser may take into account the financial stability and reputation of brokerage firms, and the research, brokerage or other services provided by such brokers.  The Adviser may place transactions with a broker or dealer that (i) provides the Adviser (or an affiliate) with the opportunity to participate in capital introduction events sponsored by the broker-dealer, (ii) refers investors to the Fund or other products advised by the Adviser (or an affiliate), and/or (iii) provides other consulting services to the Adviser, if otherwise consistent with seeking best execution; provided the Adviser is not selecting the broker-dealer in recognition of the opportunity to participate in such capital introduction events or the referral of investors, or the receipt of consulting services.

When appropriate, the Adviser may, but is not required to, aggregate client orders to achieve more efficient execution or to provide for equitable treatment among accounts.  Clients participating in aggregated trades will be allocated securities based on the average price achieved for such trades.

Consistent with its fiduciary duties, the Adviser’s policy is to take the utmost care in making and implementing investment decisions for the Fund.  In the event that a trade error is made on behalf of the Fund, the Investment Adviser will, when appropriate, attempt to break or otherwise correct the trade as promptly as practicable.  However, to the extent an error cannot be corrected, the Fund will, to the maximum extent permitted under applicable law, generally bear all expenses and losses (or gains) arising in connection with such trade errors.  The Investment Adviser and its affiliates, principals and employees will be indemnified by the Fund against all expenses and losses arising in connection with trade errors caused by such persons, provided that any such person will not be indemnified against any loss arising in connection with trade errors caused by gross negligence, willful malfeasance, bad faith, fraud or, to the extent applicable, violation of its fiduciary responsibilities under ERISA.
The Fund will maintain accounts at UBS Securities LLC, Citigroup Global Markets Inc., Deutsche Bank AG, Morgan Stanley & Co. Incorporated and Goldman Sachs & Co., through which the Fund may settle and clear trades, borrow securities and maintain custody of its securities.
 
The Fund has not paid aggregate brokerage commissions as it has not commenced operations as of the date of this SAI.

CAPITAL STOCK

Shares issued by the Fund have no preemptive, conversion, or subscription rights. Shares issued and sold by the Fund are deemed to be validly issued, fully paid and non-assessable by the Trust. Shareholders have equal and exclusive rights as to dividends and distributions as declared by the Fund and to the net assets of the Fund upon liquidation or dissolution. The Fund, as a separate series of the Trust, votes separately on matters affecting only the Fund ( e.g. , approval of the Advisory Agreement); all series of the Trust vote as a single class on matters affecting all series jointly or the Trust as a whole ( e.g ., election or removal of Trustees). Voting rights are not cumulative, so that the holders of more than 50% of the shares voting in any election of Trustees can, if they so choose, elect all of the Trustees. While the Trust is not required and does not intend to hold annual meetings of shareholders, such meetings may be called by the Board in its discretion, or upon demand by the holders of 10% or more of the outstanding shares of the Trust, for the purpose of electing or removing Trustees.

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value of shares of the Fund will be determined once daily as of the close of public trading on the New York Stock Exchange (“NYSE”) (normally, 4:00 p.m. Eastern time) on each day that the NYSE is open for trading. It is expected that the NYSE will be closed on Saturdays and Sundays and on New Year’s Day, Martin Luther King Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas. The Fund does not expect to determine the net asset value of shares on any day when the NYSE is not open for trading even if there is sufficient trading in its portfolio securities on such days to materially affect the net asset value per share.
 
 
In valuing the Fund’s assets for calculating net asset value, readily marketable portfolio securities listed on a national securities exchange are valued at the last sale price on the business day as of which such value is being determined. If there has been no sale on such exchange on such day, the security is valued at the mean between the bid and asked prices on such day. Securities primarily traded in the Nasdaq National Market System (“NASDAQ”) for which market quotations are readily available shall be valued using the Nasdaq Official Closing Price (“NOCP”). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Readily marketable securities traded only in the over-the market and not on NASDAQ are valued at the most recent trade price. All other assets of the Fund are valued in such manner as the Board in good faith deems appropriate to reflect their fair value.

Trading in foreign securities markets is normally completed well before the close of the NYSE. In addition, foreign securities trading may not take place on all days on which the NYSE is open for trading, and may occur in certain foreign markets on days on which the Fund’s net asset value is not calculated. Events affecting the values of portfolio securities that occur between the time their prices are determined and the close of the NYSE will not be reflected in the calculation of net asset value unless the Board deems that the particular event would affect net asset value, in which case an adjustment will be made in such manner as the Board in good faith deems appropriate to determine fair market value. Assets or liabilities expressed in foreign currencies are translated, in determining net asset value, into U.S. dollars based on the spot exchange rates, or at such other rates as the Adviser, pursuant to fair value procedures adopted by the Board, may determine to be appropriate.
 
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
 
The information provided below supplements the information contained in the Prospectuses regarding the purchase and redemption of the Fund’s shares.

How to Buy Shares

In addition to purchasing shares directly from the Fund, you may purchase shares through certain financial intermediaries and their agents that have made arrangements with the Fund and are authorized to buy and sell shares of the Fund (collectively, “Financial Intermediaries”). Investors should contact their Financial Intermediaries directly for appropriate instructions, as well as information pertaining to accounts and any service or transaction fees that may be charged. If you transmit your order to these Financial Intermediaries before the close of regular trading (generally, 4:00 p.m., Eastern time) on a day that the NYSE is open for business, your order will be priced at the Fund’s NAV, plus any applicable sales charge, next computed after it is received by the Financial Intermediaries. Investors should check with their Financial Intermediaries to determine if it participates in these arrangements.

The public offering price of the Fund’s shares is the NAV, plus and applicable sales charge. Shares are purchased at the public offering price next determined after the transfer agent receives your order in proper form, as discussed in the Fund’s Prospectus. In order to receive that day’s public offering price, the transfer agent must receive your order in proper form before the close of regular trading on the NYSE, generally, 4:00 p.m., Eastern time.

The Trust reserves the right in its sole discretion (i) to suspend the continued offering of the Fund’s shares, (ii) to reject purchase orders in whole or in part when in the judgment of the Adviser or the distributor such rejection is in the best interest of the Fund, and (iii) to reduce or waive the minimum for initial and subsequent investments for certain fiduciary accounts or under circumstances where certain economies can be achieved in sales of the Fund’s shares.
 
 

In addition to cash purchases, the Fund’s shares may be purchased by tendering payment in-kind in the form of shares of stock, bonds or other securities. Any securities used to buy the Fund’s shares must be readily marketable; their acquisition consistent with the Fund’s objective and otherwise acceptable to the Adviser and the Board.

Automatic Investment Plan

The Fund provides an Automatic Investment Plan (“AIP”) for the convenience of investors who wish to purchase shares of the Fund on a regular basis. All record keeping and custodial costs of the AIP are paid by the Fund. The market value of the Fund’s shares is subject to fluctuation. Prior to participating in the AIP the investor should keep in mind that this plan does not assure a profit nor protect against depreciation in declining markets.

How to Sell Shares and Delivery of Redemption Proceeds

You can sell your Fund shares any day the NYSE is open for regular trading, either directly to the Fund or through your Financial Intermediary.

Payments to shareholders for shares of the Fund redeemed directly from the Fund will be made as promptly as possible, but no later than seven days after receipt by the Fund’s transfer agent of the written request in proper form, with the appropriate documentation as stated in the Prospectus, except that the Fund may suspend the right of redemption or postpone the date of payment during any period when (a) trading on the NYSE is restricted as determined by the SEC or the NYSE is closed for other than weekends and holidays; (b) an emergency exists as determined by the SEC making disposal of portfolio securities or valuation of net assets of the Fund not reasonably practicable; or (c) for such other period as the SEC may permit for the protection of the Fund’s shareholders. Under unusual circumstances, the Fund may suspend redemptions, or postpone payment for more than seven days, but only as authorized by SEC rules.

The value of shares on redemption or repurchase may be more or less than the investor’s cost, depending upon the market value of the Fund’s portfolio securities at the time of redemption or repurchase.

Telephone Redemptions

Shareholders with telephone transaction privileges established on their account may redeem Fund shares by telephone. Upon receipt of any instructions or inquiries by telephone from the shareholder, the Fund or its authorized agents may carry out the instructions and/or to respond to the inquiry consistent with the shareholder’s previously established account service options. For joint accounts, instructions or inquiries from either party will be carried out without prior notice to the other account owners. In acting upon telephone instructions, the Fund and its agents use procedures that are reasonably designed to ensure that such instructions are genuine. These include recording all telephone calls, requiring pertinent information about the account and sending written confirmation of each transaction to the registered owner.

The transfer agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. If the transfer agent fails to employ reasonable procedures, the Fund and the transfer agent may be liable for any losses due to unauthorized or fraudulent instructions. If these procedures are followed, however, that to the extent permitted by applicable law, neither the Fund nor its agents will be liable for any loss, liability, cost or expense arising out of any redemption request, including any fraudulent or unauthorized request. For additional information, contact the transfer agent.

Redemptions In-Kind

The Trust has filed an election under Rule 18f-1 of the 1940 Act committing to pay in cash all redemptions by a shareholder of record up to amounts specified by the rule (in excess of the lesser of (1) $250,000 or (2) 1% of the Fund’s assets). The Fund has reserved the right to pay the redemption price of its shares in excess of the amounts specified by the rule, either totally or partially, by a distribution in-kind of portfolio securities (instead of cash). The securities so distributed would be valued at the same amount as that assigned to them in calculating the NAV for the shares being sold. If a shareholder receives a distribution in-kind, the shareholder could incur brokerage or other charges in converting the securities to cash and will bear any market risks associated with such securities until they are converted into cash. A redemption in-kind is treated as a taxable transaction and a sale of the redeemed shares, generally resulting in capital gain or loss to you, subject to certain loss limitation rules.
 
 

The Fund does not intend to hold any significant percentage of its portfolio in illiquid securities, although the Fund, like virtually all mutual funds, may from time to time hold a small percentage of securities that are illiquid. In the unlikely event the Fund were to elect to make an in-kind redemption, the Fund expects that it would follow the normal protocol of making such distribution by way of a pro rata distribution based on its entire portfolio. If the Fund held illiquid securities, such distribution may contain a pro rata portion of such illiquid securities or the Fund may determine, based on a materiality assessment, not to include illiquid securities in the in-kind redemption. The Fund does not anticipate that it would ever selectively distribute a greater than pro rata portion of any illiquid securities to satisfy a redemption request. If such securities are included in the distribution, shareholders may not be able to liquidate such securities and may be required to hold such securities indefinitely. Shareholders’ ability to liquidate such securities distributed in-kind may be restricted by resale limitations or substantial restrictions on transfer imposed by the issuers of the securities or by law. Shareholders may only be able to liquidate such securities distributed in-kind at a substantial discount from their value, and there may be higher brokerage costs associated with any subsequent disposition of these securities by the recipient.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Dividends of net investment income and distributions of net capital gains from the sale of securities are generally made annually, as described in the Prospectus. Also, the Fund typically distributes any undistributed net investment income on or about December 31 of each year. Any net capital gains realized through the period ended October 31 of each year will also typically be distributed by December 31 of each year.

All distributions generally reduce the NAV of the Fund’s shares by the amount of the distribution. If you purchase shares prior to a distribution, the distribution will be taxable to you even though economically it may represent a return on your investment.

Each distribution by the Fund is accompanied by a brief explanation of the form and character of the distribution. In January of each year, the Fund will issue to each shareholder a statement of the federal income tax status of all distributions that relate to the previous year. You are responsible for the payment of taxes with respect to your investment in the Fund.

Tax Information

Each series of the Trust is treated as a separate entity for federal income tax purposes. The Fund has elected to qualify and intends to continue to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), provided it complies with all applicable requirements regarding the source of its income, diversification of its assets and timing and amount of distributions. The Fund’s policy is to distribute to its shareholders all of its investment company taxable income and any net realized capital gains for each fiscal year in a manner that complies with the distribution requirements applicable to regulated investment companies under the Code, so that the Fund will not  be subject to any federal income or excise taxes. However, the Fund can give no assurances that its distributions will be sufficient to eliminate all taxes. The Fund is not required to consider tax consequences in making or disposing of investments. In order to avoid the non-deductible excise tax, the Fund must also distribute (or be deemed to have distributed) by December 31 of each calendar year (1) at least 98% of its ordinary income for such year, (2) at least 98.2% of the excess of its realized capital gains over its realized capital losses for the 12-month period ending on November 31 during such year and (3) any amounts from the prior calendar year that were not distributed and on which the Fund paid no federal income tax. If the Fund fails to qualify as a regulated investment company under Subchapter M, it will be taxed as a regular corporation.
 
 

In order to qualify as a regulated investment company, the Fund must, among other things, derive at least 90% of its gross income each year from dividends, interest, payments with respect to loans of stock and securities, gains from the sale or other disposition of stock or securities or foreign currency gains related to investments in stock or securities, or other income (generally including gains from options, futures or forward contracts) derived with respect to the business of investing in stock, securities or currency, and net income derived from an interest in a qualified publicly traded partnership. The Fund must also satisfy the following two asset diversification tests. At the end of each quarter of each taxable year, (i) at least 50% of the value of the Fund’s total assets must be represented by cash and cash items (including receivables), U.S. Government securities, the securities of other regulated investment companies, and other securities, with such other securities being limited in respect of any one issuer to an amount not greater than 5% of the value of the Fund’s total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets may be invested in the securities of any one issuer (other than U.S. Government securities or the securities of other regulated investment companies), the securities of any two or more issuers (other than the securities of other regulated investment companies) that the Fund controls (by owning 20% or more of their outstanding voting stock) and that are determined to be engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships. The Fund must also distribute each taxable year sufficient dividends to its shareholders to claim a dividends paid deduction equal to at least the sum of 90% of the Fund’s investment company taxable income (which generally includes dividends, interest, and the excess of net short-term capital gain over net long-term capital loss) and 90% of the Fund’s net tax-exempt interest, if any.

The Fund’s ordinary income generally consists of interest and dividend income, less expenses. Net realized capital gains for a fiscal period are computed by taking into account any capital loss carry-forward of the Fund.

Distributions of net investment income and net short-term capital gains are taxable to shareholders as ordinary income. For individual shareholders, a portion of the distributions paid by the Fund may be qualified dividends currently eligible for federal income taxation at long-term capital gain rates to the extent the Fund reports the amount distributed as a qualifying dividend and certain holding period requirements are met. In the case of corporate shareholders, a portion of the distributions may qualify for the inter-corporate dividends-received deduction to the extent the Fund reports the amount distributed as a qualifying dividend and certain holding period requirements are met. The aggregate amount so reported to either individual or corporate shareholders cannot, however, exceed the aggregate amount of qualifying dividends received by the Fund for its taxable year. In view of the Fund’s investment policy, it is expected that dividends from domestic corporations will be part of the fund’s gross income and that, accordingly, part of the distributions by the Fund may be eligible for treatment as qualified dividend income by individual shareholders, or for the dividends-received deduction for corporate shareholders under federal tax law. However, the portion of the Fund’s gross income attributable to qualifying dividends is largely dependent on the Fund’s investment activities for a particular year and therefore cannot be predicted with any certainty. The deduction may be reduced or eliminated if the Fund shares held by an individual investor are held for less than 61 days, or Fund shares held by a corporate investor are treated as debt-financed or are held for less than 46 days. Distributions will be taxable to you even if the share price of the Fund has declined.

The sale or exchange of Fund shares is a taxable transaction for federal income tax purposes. You will generally recognize a gain or loss on such transactions equal to the difference, if any, between the amount of your net sales proceeds and your adjusted tax basis in the Fund shares. Such gain or loss will be capital gain or loss if you held your Fund shares as capital assets. Any capital gain or loss will be treated as long-term capital gain or loss if you held the Fund shares for more than one year at the time of the sale or exchange. Any capital loss arising from the sale or exchange of shares held for six months or less, however, will be treated as long-term capital loss to the extent of the amount of net long-term capital gain distributions with regard to these shares.

The Fund may be subject to foreign taxes and withholding on dividends and interest earned with respect to securities of foreign corporations. Based on the principal investment strategies of the Fund, it is not expected that the Fund will be eligible to pass through to shareholders any credits or deductions with respect to such foreign taxes.
 
 

Under the Code, the Fund will be required to report to the Internal Revenue Service (“IRS”) all distributions of ordinary income and capital gains as well as gross proceeds from the redemption or exchange of Fund shares, except in the case of exempt shareholders, which includes most corporations. Pursuant to the backup withholding provisions of the Code, distributions of any taxable income and capital gains and proceeds from the redemption of Fund shares may be subject to withholding of federal income tax at the rate of 28% in the case of non-exempt shareholders who fail to furnish the Fund with their taxpayer identification numbers and with required certifications regarding their status under the federal income tax law or if the IRS notifies the Fund that such backup withholding is required. If the withholding provisions are applicable, any such distributions and proceeds, whether taken in cash or reinvested in additional shares, will be reduced by the amounts required to be withheld. Corporate and other exempt shareholders should provide the Fund with their taxpayer identification numbers or certify their exempt status in order to avoid possible erroneous application of backup withholding. Backup withholding is not an additional tax and any amounts withheld may be credited against a shareholder’s ultimate federal tax liability if proper documentation is provided. The Fund reserves the right to refuse to open an account for any person failing to provide a certified taxpayer identification number.

In addition to the federal income tax, certain individuals, trusts and estates may be subject to a Medicare tax of 3.8%. The Medicare tax is imposed on the lesser of: (i) the taxpayer’s investment income, net of deductions properly allocable to such income, or (ii) the amount by which the taxpayer’s modified adjusted gross income exceeds certain thresholds ($250,000 for married individuals filing jointly, $200,000 for unmarried individuals, $125,000 for married individuals filing separately, and the threshold for the 39.6% federal income tax bracket ($12,300 in 2015) in the case of trusts and estates). The Fund’s distributions are includable in a shareholder’s investment income for purposed of this Medicare tax. In addition, any capital gain realized by a shareholder upon a sale or redemption of Fund shares is includable in such shareholder’s investment income for purposes of this Medicare tax.

Distributions and the transactions referred to in the preceding paragraphs may be subject to state and local income taxes, and the tax treatment thereof may differ from the federal income tax treatment.

The foregoing discussion of U.S. federal income tax law relates solely to the application of that law to U.S. citizens or residents and U.S. domestic corporations, partnerships, trusts and estates. Each shareholder who is not a U.S. person should consider the U.S. and foreign tax consequences of ownership of shares of the Fund, including the possibility that such a shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a lower rate under an applicable income tax treaty) on amounts constituting ordinary income.

The Foreign Account Tax Compliance Act (“FATCA”)

A 30% withholding tax on the Fund’s distributions, including capital gains distributions, and on gross proceeds from the sale or other disposition of shares of the Fund generally applies if paid to a foreign entity unless: (i) if the foreign entity is a “foreign financial institution,” it undertakes certain due diligence, reporting, withholding and certification obligations, (ii) if the foreign entity is not a “foreign financial institution,” it identifies certain of its U.S. investors or (iii) the foreign entity is otherwise excepted under FATCA. Withholding under FATCA is required: (i) with respect to certain distributions from your Fund beginning on July 1, 2014; and (ii) with respect to certain capital gains distributions and gross proceeds from a sale or disposition of Fund shares that occur on or after January 1, 2017. If withholding is required under FATCA on a payment related to your shares, investors that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate of withholding) on such payment generally will be required to seek a refund or credit from the IRS to obtain the benefits of such exemption or reduction. The Fund will not pay any additional amounts in respect to amounts withheld under FATCA. You should consult your tax adviser regarding the effect of FATCA based on your individual circumstances.

In addition, the foregoing discussion of tax law is based on existing provisions of the Code, existing and proposed regulations thereunder, and current administrative rulings and court decisions, all of which are subject to change. Any such changes could affect the validity of this discussion. The Internal Revenue Service could assert a position contrary to those stated here. The discussion also represents only a general summary of tax law and practice currently applicable to the Fund and certain shareholders therein, and, as such, is subject to change. In particular, the consequences of an investment in shares of the Fund under the laws of any state, local or foreign taxing jurisdictions are not discussed herein. Each prospective investor should consult his or her own tax adviser to determine the application of the tax law and practice in his or her own particular circumstances. Paul Hastings LLP is not delivering the Fund a tax opinion with respect to any matter and no rulings are being sought from the Internal Revenue Service.
 
 

The advice herein was prepared for the Fund. Any person reviewing this discussion should seek advice based on such person’s particular circumstances from an independent tax adviser.

THE FUND’S PRINCIPAL UNDERWRITER AND DISTRIBUTOR

Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (“Quasar”), serves as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. Pursuant to a distribution agreement between the Fund and Quasar (the “Distribution Agreement”), Quasar acts as the Fund’s principal underwriter and distributor and provides certain administrative services and promotes and arranges for the sale of the Fund’s shares. Quasar is a registered broker-dealer under the Securities Exchange Act of 1934, as amended, and is a member of FINRA.

The Distribution Agreement between the Fund and Quasar will continue in effect only if such continuance is specifically approved at least annually by the Board or by vote of a majority of the Fund’s outstanding voting securities and, in either case, by a majority of the Independent Trustees. The Distribution Agreement is terminable without penalty by the Trust on behalf of the Fund on a 60-day written notice when authorized either by a majority vote of the Fund’s shareholders or by vote of a majority of the Board, including a majority of the Independent Trustees, or by Quasar upon a 60-day written notice, and will automatically terminate in the event of its “assignment” (as defined in the 1940 Act).

Distribution Plan

The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act under which the Fund pays the Distributor an amount which is accrued daily and paid quarterly, at an annual rate of up to 0.25% of the average daily net assets of the Class A shares, and 0.75% of the Class C shares of the Fund. Amounts paid under the Plan are paid to the Distributor to reimburse it for costs of the services it provides and the expenses it bears in the distribution of the Fund’s shares, including overhead and telephone expenses; printing and distribution of prospectuses and reports used in connection with the offering of the Fund’s shares to prospective investors; and preparation, printing and distribution of sales literature and advertising materials. Such fee is paid to the Distributor each year only to the extent of such costs and expenses of the Distributor under the Plan actually incurred in that year.

Under the Plan, the Trustees will be furnished quarterly with information detailing the amount of expenses paid under the Plan and the purposes for which payments were made. The Plan may be terminated at any time by vote of a majority of the Trustees of the Trust who are not interested persons. Continuation of the Plan is considered by such Trustees no less frequently than annually. With the exception of the Distributor and the Adviser, in their capacities as the Fund’s principal underwriter and distribution coordinator, respectively, no interested person has or had a direct or indirect financial interest in the Plan or any related agreement.

While there is no assurance that the expenditures of the Fund’s assets to finance distribution of shares will have the anticipated results, the Board believes there is a reasonable likelihood that one or more of such benefits will result, and because the Board is in a position to monitor the distribution expenses, it is able to determine the benefit of such expenditures in deciding whether to continue the Plan.

In addition, pursuant to a Shareholder Service Plan (the “Shareholder Servicing Plan”) adopted by the Trust on behalf of the Fund, the Adviser is authorized to engage financial institutions, securities dealers and other industry professionals (“Shareholder Servicing Agent”) to provide personal shareholder services relating to the servicing and maintenance of shareholder accounts not otherwise provided to the Fund. Payments made pursuant to the Shareholder Servicing Plan shall not exceed 0.10% of the average daily net asset value of the Fund’s Class A, Class C, and Class I shares.
 
 
Payments made under the Shareholder Servicing Plan shall be used to compensate Shareholder Servicing Agents for providing general shareholder liaison services, including, but not limited to: (i) answering inquiries from shareholders regarding account status and history, the manner in which purchases and redemptions of the Fund shares may be effected, and other matters pertaining to the Fund; (ii) assisting shareholders in designating and changing dividend options, account designations and addresses; (iii) arranging for wiring of funds and transmitting and receiving funds in connection with orders to purchase or redeem Fund shares; (iv) verifying and guaranteeing shareholder signatures in connection with orders to purchase or redeem Fund shares; (v) providing such other similar services related to the maintenance of shareholder accounts; and (vi) providing necessary personnel and facilities to conduct the activities described above.

As of the date of this SAI, the Plan has not yet been implemented.

MARKETING AND SUPPORT PAYMENTS

The Adviser, out of its own resources and without additional cost to the Fund or its shareholders, may provide additional cash payments or other compensation to certain Financial Intermediaries who sell shares of the Fund. The Adviser does not currently intend to make such payments, but reserves the right to initiate payments in the future without notice to shareholders. These payments may be divided into categories as follows:

Support Payments

Payments may be made by the Adviser to certain Financial Intermediaries in connection with the eligibility of the Fund to be offered in certain programs and/or in connection with meetings between the Fund’s representatives and Financial Intermediaries and their sales representatives. Such meetings may be held for various purposes, including providing education and training about the Fund and other general financial topics to assist Financial Intermediaries’ sales representatives in making informed recommendations to, and decisions on behalf of, their clients.

Entertainment, Conferences and Events

The Adviser also may pay cas or non-cash compensation to sales representatives of Financial Intermediaries in the form of (1) occasional gifts; (2) occasional meals, tickets or other entertainments; and/or (3) sponsorship support for the Financial Intermediaries’ client seminars and cooperative advertising. In addition, the Adviser pays for exhibit space or sponsorships at regional or national events of Financial Intermediaries.

The prospect of receiving, or the receipt of additional payments or other compensation as described above by Financial Intermediaries may provide such Financial Intermediaries and/or their salespersons with an incentive to favor sales of shares of the Fund, and other mutual funds whose affiliates make similar compensation available, over sale of shares of mutual funds (or non-mutual fund investments) not making such payments. You may wish to take such payment arrangements into account when considering and evaluating any recommendations relating to Fund shares.

As of the date of this SAI, the Adviser does not have agreements with any firms to pay such support payments. Future support payments may be structured in three ways:  (1) as a percentage of net sales; (2) as a percentage of net assets; and/or (3) a flat fee.
 
 
FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

[TO COME]
 
 
 
 
 
 
APPENDIX A
 

Weiss Multi-Strategy Partners LLC
 
PROXY VOTING AND CLASS ACTION POLICY AND PROCEDURES
 
Policies and Procedures
 
Proxy voting is an important right of shareholders and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised.  When the Adviser has discretion to vote the proxies of its clients, it will vote those proxies in the best interest of its clients and in accordance with these policies and procedures.
 
1.      Procedures regarding proxies received by the Adviser are as follows:
 
a.     Keep a record of each proxy received;
 
b.    Determine which accounts managed by the Adviser hold the security to which the proxy relates;
 
c.     Except in the case of Germany the Adviser will vote in accordance with an independent third party recommendation unless an Investment Teams requests otherwise; and
 
d.    The Adviser will retain a third party to assist it in coordinating and voting proxies with respect to client securities.  The Adviser will vote proxies in accordance with the independent third party recommendations and the Head of Operations or Delegate will monitor the third party to assure that all proxies are being properly voted and appropriate records are being retained.
 
e.     For Germany, Custodians will be placing a share-blocking flag on the ballot when applicable.  Therfore, a ‘Do Not Vote’ will be placed on The Advisers ballots per The Advisers share-blocking voting strategy.
 
f.     The Adviser has the ability to override the share-blocking and vote the ballot, however, the shares must be put on the Firm’s Restricted List for ‘NO TRADING’ between the vote cutoff date and the de-registration date set by the issuers.  This will ensure the liquidity of the shares.
 
2.      Voting Guidelines
 
a.    Generally, the Adviser will vote in accordance with the recommendations provided by an independent third party proxy recommendation service, except in situations where the Adviser's investment professionals determine that voting otherwise would be in the best interests of the Adviser's clients. Any proxies that are voted against the recommendation of the proxy recommendation service will be reviewed by the Adviser's Proxy Review Committee, which includes the General Counsel, Chief Compliance Officer, and Head of Operations and Delegates. In determining whether a proposal is in the best interests of clients, the Proxy Review Committee may take into account the factors which include the following, among others:
 
·         whether the proposal was recommended by management and the Adviser's opinion of management
 
·         whether the proposal acts to entrench existing management; and
 
·         whether the proposal fairly compensates management for past and future performance.
 
3.      Conflicts of Interest
 
a.     The Adviser may occasionally be subject to conflicts of interest in the voting of proxies, and will follow the third party service recommendation in that circumstance. Except as otherwise agreed with a Managed Account, the Adviser will apply the foregoing proxy voting policies and procedures to votes relating to positions held by the Managed Accounts.
 
4.   Disclosure
 
a.    Clients may contact the Chief Compliance Officer, via mail in order to obtain information on how the Adviser voted such client’s proxies, and to request a copy of these policies and procedures.  If a client requests this information, the Chief Compliance Officer  or Delegate will prepare a written response to the client that lists, with respect to each voted proxy about which the client has inquired, (a) the name of the issuer; (b) the proposal voted upon, and (c) how the Adviser voted the client’s proxy.
 
b.     The Proxy Review Committee ensures that (a) relevant disclosure is provided to clients, and (b) necessary policies and procedures are maintained and implemented.
 
5.      Recordkeeping
 
a.    The Head of Operations or Delegate will maintain files relating to the Adviser’s proxy voting procedures in an easily accessible place.  Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record, with records for the most recent two years kept in the offices of the Adviser.  Records of the following will be included in the files:
 
·         Copies of this proxy voting policy and procedures, and any amendments thereto.
 
·         A copy of each proxy statement that the Adviser receives, provided however that the Adviser may rely on obtaining a copy of proxy statements from the SEC’s EDGAR system for those proxy statements that are so available.
 
·         A record of each vote that the Adviser casts.
 
·         A copy of any document the Adviser created that was material to making a decision how to vote proxies, or that memorializes that decision.
 
·         A copy of each written client request for information on how the Adviser voted such client’s proxies, and a copy of any written response to any (written or oral) client request for information on how the Adviser voted its proxies
 
 
 
  Appendix B  
 
 
United States
 
Summary Proxy Voting Guidelines
 
 
2015 Benchmark Policy Recommendations
 
 
Effective for Meetings on or after February 1, 2015
 
Published December 22, 2014
 
Updated March 4, 2015
 
 
 
 
www.issgovernance.com
© 2015 ISS | Institutional Shareholder Services
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
TABLE OF CONTENTS
     
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  
 
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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
     
 
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services    3 of 69
 
 
 

 
 
 
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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  
 
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2015 U.S. Summary Proxy Voting Guidelines
 
     
 
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
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
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  
 
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Reimburse Shareholder for Expenses Incurred
68
 
Terminate the Investment Advisor
68
     
 
 
 
 
 
 
 
 
 
 
 
 
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
 
COVERAGE
 
The U.S. research team provides proxy analyses and voting recommendations for common shareholder meetings of publicly traded U.S. companies that are held in our institutional investor clients' portfolios, including all S&P 1500 and Russell 3000 companies. This generally includes corporate actions for common equity holders, such as written consents and bankruptcies. ISS’ U.S. coverage includes investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment trusts) , limited partnerships (“LPs”), master limited partnerships (“MLPs”), limited liability companies (“LLCs”), and business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is subject to change based on client need and industry trends.

The U.S. research team also produces, for subscribing clients, research and recommendations for fixed income meetings, and meetings of certain preferred securities, including Auction Rate Preferred Securities (“ARPS”) and Variable Rate Municipal Term Preferred securities (“VMTPs”).

Foreign-incorporated companies

Like the SEC, ISS distinguishes two types of companies that list but are not incorporated in the U.S.:

 
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.
 
In all cases – including with respect to other companies with cross-market features that may lead to ballot items related to multiple markets -- items that are on the ballot solely due to the requirements of another market (listing, incorporation, or national code) may be evaluated under the policy of the relevant market, regardless of the “assigned” market coverage.

Foreign Private Issuers in Tax Havens

A number of FPIs incorporate in “tax haven” markets, such as Bermuda, the Bahamas, Cayman Islands, and Marshall Islands. These companies may list in the U.S. and or other markets such as Hong Kong or Singapore, in which cases ISS assigns a primary coverage market and applies the appropriate policy.
 
 
  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.
   
Where the design and disclosure levels of equity compensation plans are comparable to those seen at U.S. companies,
U.S. compensation policy will be used to evaluate the compensation plan proposals. Otherwise, they, and all other voting items, will be evaluated using the relevant ISS regional or market proxy voting guidelines.
 
 
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
 
Vote against or withhold from members of an audit committee in situations where 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.
 
Auditor Ratification
 
  General   Recommendation :   Vote for proposals to ratify auditors unless any of the following apply:
 
       An   auditor   has   a   financial   interest   in   or   association   with   the   company,   and   is   therefore   not   independent;
 
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
       Fees   for   non-audit   services   (“Other”   fees)   are   excessive.
 
Non-audit fees are excessive if:
 
       Non-audit   (“other”)   fees   >   audit   fees   +   audit-related   fees   +   tax   compliance/preparation   fees
 
Tax compliance and preparation include the preparation of original and amended tax returns and refund claims, and tax payment planning. All other services in the tax category, such as tax advice, planning, or consulting, should be added to “Other” fees. If the breakout of tax fees cannot be determined, add all tax fees to “Other” fees.
 
In circumstances where "Other" fees include fees related to significant one-time capital structure events (such as initial public offerings, bankruptcy emergence, and spin-offs) and the company makes public disclosure of the amount and nature of those fees that are an exception to the standard "non-audit fee" category, then such fees may be excluded from the non-audit fees considered in determining the ratio of non-audit to audit/audit-related fees/tax compliance and preparation for purposes of determining whether non-audit fees are excessive.
 
Shareholder Proposals Limiting Non-Audit Services
 
General   Recommendation :   Vote case-by-case on shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services.
 
Shareholder Proposals on Audit Firm Rotation
 
General   Recommendation :   Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into account:
   
       The   tenure   of   the   audit   firm;
       The   length   of   rotation   specified   in   the   proposal;
       Any   significant   audit-related   issues   at   the   company;
       The   number   of   Audit   Committee   meetings   held   each   year;
       The   number   of   financial   experts   serving   on   the   committee;   and
 
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:
 
Voting on Director Nominees in Uncontested Elections
 
Four fundamental principles apply when determining votes on director nominees:
 
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
 
Vote   against 1   or   withhold   from   the   entire   board   of   directors   (except   new   nominees 2 ,   who   should   be   considered   case-   by-case)   for   the   following:
 
Problematic Takeover Defenses
 
Classified Board Structure:
 
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1   In   general,   companies with   a   plurality vote   standard   use “Withhold” as the contrary vote   option in director   elections; companies
 
with a majority vote standard use “Against”. However, it will vary by company and the proxy must be checked to determine the valid contrary vote option for the particular company.
2   A “new   nominee” is   any current   nominee who   has   not   already   been elected   by   shareholders   and   who   joined the   board   after the
problematic action in question transpired. If ISS cannot determine whether the nominee joined the board before or after the problematic action transpired, the nominee will be considered a “new nominee” if he or she joined the board within the 12 months prior to the upcoming shareholder meeting.
 
 
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.
 
Director Performance Evaluation:
 
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:
       A   classified   board   structure;
       A   supermajority   vote   requirement;
 
Either   a   plurality   vote   standard   in   uncontested   director   elections   or   a   majority   vote   standard   with   no   plurality   carve-out   for   contested   elections;
       The   inability   of   shareholders   to   call   special   meetings;
       The   inability   of   shareholders   to   act   by   written   consent;
       A   dual-class   capital   structure;   and/or
       A   non–shareholder-approved   poison   pill.
 
Poison Pills:

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
                1.5.   The board makes a material adverse change to an existing poison pill without shareholder approval.
 
Vote case-by-case on all nominees if:
 
 
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.  
      

Problematic Audit-Related Practices
 

Generally vote against or withhold from the members of the Audit Committee if:
 

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
 
Vote case-by-case on members of the Audit Committee and potentially the full board if:
 
 
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.
 

Problematic Compensation Practices/Pay for Performance Misalignment
 

In the absence of an Advisory Vote on Executive Compensation ballot item or in egregious situations, vote against or withhold from the members of the Compensation Committee and potentially the full board if:
 

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.
 
Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and the Management Say-on-Pay proposal if:
 
1.16.  
The company’s previous say-on-pay received the support of less than 70 percent of votes cast, taking into account:
       The   company's   response,   including:
 
Disclosure   of   engagement   efforts   with   major   institutional   investors   regarding   the   issues   that   contributed   to   the   low   level   of   support;
      Specific   actions   taken   to   address   the   issues   that   contributed   to   the   low   level   of   support;
     Other   recent   compensation   actions   taken   by   the   company;
      Whether   the   issues   raised   are   recurring   or   isolated;
      The   company's   ownership   structure;   and
 
Whether   the   support   level   was   less   than 50   percent,   which   would   warrant   the   highest   degree   of   responsiveness.
 
Unilateral Bylaw/Charter Amendments
 
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   board's   rationale   for   adopting   the   bylaw/charter   amendment   without   shareholder   ratification;
       Disclosure   by   the   company   of   any   significant   engagement   with   shareholders   regarding   the   amendment;
 
 
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;
                        ›       The   company's   ownership   structure;
                              The   company's   existing   governance   provisions;
                              Whether   the   amendment   was   made   prior   to   or   in   connection   with   the   company's   initial   public   offering;
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   13 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
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.
 
Governance Failures
 
Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or the entire board, due to:
 
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
 
Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:
 
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:
 
       Disclosed   outreach   efforts   by   the   board   to   shareholders   in   the   wake   of   the   vote;
       Rationale   provided   in   the   proxy   statement   for   the   level   of   implementation;
       The   subject   matter   of   the   proposal;
       The   level   of   support   for   and   opposition   to   the   resolution   in   past   meetings;
       Actions   taken   by   the   board   in   response   to   the   majority   vote   and   its   engagement   with   shareholders;
 
The   continuation   of   the   underlying   issue   as   a   voting   item   on   the   ballot   (as   either   shareholder   or   management   proposals);   and
       Other   factors   as   appropriate.
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;
                      ›        The   company's   ownership   structure   and   vote   results;
 
ISS'   analysis   of   whether   there   are   compensation   concerns   or   a   history   of   problematic   compensation   practices;   and
                      ›        The   previous   year's   support   level   on   the   company's   say-on-pay   proposal.
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3   Examples   of   failure of   risk oversight include,   but are not limited   to: bribery;   large   or   serial   fines   or sanctions   from   regulatory   bodies; significant   adverse   legal   judgments   or   settlements;   hedging   of   company   stock;   or   significant   pledging   of   company   stock.
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   14 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
3.  
Composition
 
Attendance at Board and Committee Meetings:
 
                 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
   
       Medical   issues/illness;
       Family   emergencies;   and
       Missing   only   one   meeting   (when   the   total   of   all   meetings   is   three   or   fewer).
 

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.
 
Overboarded Directors:
 
Vote against or withhold from individual directors who:
 

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
 
Vote against or withhold from Inside Directors and Affiliated Outside Directors (per the Categorization   of   Directors ) when:
 
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.

 

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4   For new   nominees   only, schedule   conflicts   due   to commitments   made   prior to   their   appointment to the   board   are   considered   if   disclosed   in   the   proxy or   another   SEC   filing.
5   Although all   of a CEO’s subsidiary   boards will be counted as   separate boards, ISS   will not   recommend a withhold vote   from the   CEO of a parent company board or any of the controlled (>50 percent ownership) subsidiaries of that parent, but may do so at subsidiaries that are less than 50 percent controlled and boards outside the parent/subsidiary relationships.
 
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   15 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
2015 ISS U.S. Categorization of 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)
 
Board   Attestation
                2.1 .   Board attestation that an outside director is not independent. Former   CEO/Interim   Officer
 
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]
 
Non-CEO   Executives
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.
 
Family   Members
 
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
 
factors raise concern (which may include, but are not limited to, the following: a director related to numerous employees; the company or its affiliates employ relatives of numerous board members; or a non-Section 16 officer in a key strategic role).
 
Transactional,   Professional,   Financial,   and   Charitable   Relationships
 
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
 
organization which 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.
 
2.12.  
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] .
 
Other   Relationships
 
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)
 
 
 
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2015 U.S. Summary Proxy Voting Guidelines
 
3.1.  
No   material [12]   connection   to   the   company   other   than   a   board   seat.
 
 
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
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2015 U.S. Summary Proxy Voting Guidelines
 
Footnotes:
 
[1] The definition of officer will generally follow that of a “Section 16 officer” (officers subject to Section 16 of the Securities and Exchange Act of 1934) and includes the chief executive, operating, financial, legal, technology, and accounting officers of a company (including the president, treasurer, secretary, controller, or any vice president in charge of a principal business unit, division, or policy function). Current interim officers are included in this category. For private companies, the equivalent positions are applicable. A non-employee director serving as an officer due to statutory requirements (e.g. corporate  secretary) will be classified as an Affiliated Outsider under 2.18: “Any material relationship with the company.” However, if the company provides explicit disclosure that the director is not receiving additional compensation in excess of $10,000 per year for serving in that capacity, then the director will be classified as an Independent Outsider.
 
[2]   “Affiliate” includes a subsidiary, sibling company, or parent company. ISS uses 50 percent control ownership by the parent company as the standard for applying its affiliate designation.
 
[3]   Includes any former CEO of the company   prior   to   the   company’s initial public   offering (IPO).
 
[4]   When   there   is   a   former CEO of   a special   purpose   acquisition   company (SPAC)   serving   on   the   board   of   an   acquired   company,   ISS   will   generally   classify   such directors   as   independent   unless   determined   otherwise   taking   into   account   the   following   factors:   the applicable listing   standards   determination of such director’s independence;   any operating   ties   to the firm;   and the   existence   of   any   other   conflicting   relationships   or   related   party   transactions.
 
[5]   ISS   will   look   at   the   terms   of   the   interim   officer’s   employment   contract   to determine   if   it contains severance pay,   long-term   health   and   pension   benefits,   or   other   such   standard provisions typically contained   in   contracts   of   permanent,   non-temporary   CEOs.   ISS   will   also   consider if   a   formal   search   process   was   under way   for   a full-time   officer at   the   time.
 
[6]   “Immediate family member”   follows the   SEC’s definition of   such and covers   spouses,   parents,   children, step-parents, step-   children,   siblings, in-laws, and   any   person   (other than   a   tenant or   employee) sharing the   household of   any   director, nominee   for   director,   executive   officer,   or   significant   shareholder   of   the   company.
 
[7]   Professional   services   can   be   characterized as   advisory   in   nature, generally   involve   access   to   sensitive   company   information   or   to   strategic   decision-making,   and   typically   have   a   commission-   or   fee-based   payment   structure.   Professional   services   generally   include, but   are   not   limited   to   the   following:   investment   banking/financial   advisory   services;   commercial   banking   (beyond   deposit   services);   investment   services;   insurance   services;   accounting/audit   services;   consulting   services;   marketing   services;   legal   services;   property   management   services;   realtor   services;   lobbying   services;   executive   search   services;   and   IT   consulting   services.   The   following would   generally   be   considered   transactional   relationships   and   not   professional services:   deposit services;   IT tech   support services;   educational   services;   and   construction   services.   The   case   of   participation   in   a   banking   syndicate   by   a non-lead bank should   be   considered   a transactional   (and   hence   subject to   the   associated   materiality   test) rather   than   a professional   relationship. “Of Counsel”   relationships are   only   considered   immaterial   if   the individual does   not   receive   any   form   of   compensation   (in   excess   of   $10,000   per   year)   from,   or   is   a   retired   partner   of,   the   firm providing   the   professional   service.   The   case   of   a company   providing   a professional   service   to   one   of   its   directors or to   an   entity with   which   one   of   its   directors   is   affiliated,   will   be   considered   a   transactional rather   than   a   professional   relationship.   Insurance   services   and   marketing   services   are   assumed   to   be   professional   services unless   the company   explains   why   such   services   are not   advisory.
 
[8]   A   material   transactional relationship,   including grants to   non-profit   organizations,   exists   if   the   company   makes   annual   payments   to,   or   receives   annual   payments   from,   another entity   exceeding   the   greater   of   $200,000   or   5   percent   of   the   recipient’s gross revenues, in   the   case of a company   which follows   NASDAQ listing standards; or the   greater of $1,000,000 or   2   percent of the recipient’s gross revenues, in   the case of a company which follows NYSE listing   standards.   In   the case of   a   company   which   follows   neither   of   the   preceding   standards,   ISS   will   apply   the   NASDAQ-based   materiality   test.   (The   recipient   is   the   party   receiving   the   financial   proceeds   from   the   transaction).
 
[9]   Dissident   directors   who   are   parties   to   a   voting   agreement   pursuant   to   a   settlement   arrangement,   will   generally   be   classified   as   independent   unless   determined   otherwise   taking   into   account   the   following   factors:   the   terms   of   the   agreement;   the   duration   of   the standstill   provision   in   the   agreement;   the limitations   and requirements   of   actions   that   are   agreed upon;   if   the   dissident   director   nominee(s) is   subject   to the standstill; and if   there   any   conflicting relationships   or related party transactions.
 
[10]   Interlocks   include: executive   officers   serving   as directors   on   each   other’s   compensation   or similar committees   (or,   in   the
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
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absence of such a committee, on the board); or executive officers sitting on each other’s boards and at least one serves on the other’s compensation or similar committees (or, in the absence of such a committee, on the board).

[11]   The   operating   involvement   of   the   founder   with   the   company   will   be   considered.   Little   to   no   operating   involvement   ever   may   cause   ISS   to deem   the   founder   as   an   independent outsider.
 
[12]   For   purposes of ISS’s   director   independence classification, “material”   will be   defined   as a   standard   of relationship   (financial, personal or otherwise)   that a reasonable person might conclude could   potentially influence one’s objectivity in   the   boardroom   in   a manner that would   have a meaningful   impact on   an   individual's   ability   to satisfy requisite   fiduciary   standards   on   behalf   of   shareholders.
 
Other Board-Related Proposals
 
Age/Term Limits
 
 
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.
 
         Board Size
 
General   Recommendation :   Vote   for   proposals   seeking   to   fix   the   board   size   or   designate   a   range   for   the   board   size.
        
         Vote against proposals that give management the ability to alter the size of the board outside of a specified range without shareholder approval.
 
Classification/Declassification of the Board
 
General   Recommendation :   Vote   against   proposals   to   classify   (stagger)   the   board.   Vote   for   proposals   to   repeal   classified   boards   and   to   elect   all   directors   annually.
 
CEO Succession Planning
 
 
General   Recommendation :   Generally vote for proposals seeking disclosure on a CEO succession planning policy, considering, at a minimum, the following factors:
         ›        The   reasonableness/scope   of   the   request;   and
                The   company’s   existing   disclosure   on   its   current   CEO   succession   planning   process .
 
Cumulative Voting
 
 
General   Recommendation :   Generally   vote   against   management   proposals   to   eliminate   cumulate   voting,   and   for   shareholder   proposals   to   restore   or   provide   for   cumulative   voting,   unless:
   
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   18 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       The   company   has   proxy   access 6 ,   thereby   allowing   shareholders   to   nominate   directors   to   the   company’s   ballot;   and
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.
 

Vote for proposals for cumulative voting at controlled companies (insider voting power > 50%).
 
Director and Officer Indemnification and Liability Protection
 
 
General   Recommendation :   Vote   case-by-case   on   proposals   on   director   and   officer   indemnification   and   liability   protection.
 
Vote against proposals that would:
 
   Eliminate   entirely   directors'   and   officers'   liability   for   monetary   damages   for   violating   the   duty   of   care.
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.
 
Vote for only those proposals providing such expanded coverage in cases when a director’s or officer’s legal defense was unsuccessful if both of the following apply:

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
       If   only   the   director’s   legal   expenses   would   be   covered.
 
Establish/Amend Nominee Qualifications
 
 
 
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.
 
Vote case-by-case on shareholder resolutions seeking a director nominee who possesses a particular subject matter expertise, considering:
 

 
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
       The   scope   and   structure   of   the   proposal.
 

----------------------
6   A   proxy   access   right   that   meets   the   recommended   guidelines .
   
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   19 of 69
 
 
 

 
 
 
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Establish Other Board Committee Proposals
 
 
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;
       Level   of   disclosure   regarding   the   issue   for   which   board   oversight   is   sought;
       Company   performance   related   to   the   issue   for   which   board   oversight   is   sought;
       Board   committee   structure   compared   to   that   of   other   companies   in   its   industry   sector;   and
       The   scope   and   structure   of   the   proposal.
 
Filling Vacancies/Removal of Directors
 
 
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.
 
Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.
 
Vote for proposals that permit shareholders to elect directors to fill board vacancies.
 
Independent Chair (Separate Chair/CEO)
 
General   Recommendation :   Generally   vote   for   shareholder   proposals   requiring   that   the   chairman’s   position   be   filled   by   an   independent   director,   taking   into   consideration   the   following:
 

       The   scope   of   the   proposal;
       The   company's   current   board   leadership   structure;
       The   company's   governance   structure   and   practices;
       Company   performance;   and
       Any   other   relevant   factors   that   may   be   applicable.
 

Regarding the scope of the proposal, consider whether the proposal is precatory or binding and whether the proposal is seeking an immediate change in the chairman role or the policy can be implemented at the next CEO transition.
 
Under the review of the company's board leadership structure, ISS may support the proposal under the following scenarios absent a compelling rationale: the presence of an executive or non-independent chair in addition to the CEO; a recent recombination of the role of CEO and chair; and/or departure from a structure with an independent chair. ISS will also consider any recent transitions in board leadership and the effect such transitions may have on independent board leadership as well as the designation of a lead director role.
 
When considering the governance structure, ISS will consider the overall independence of the board, the independence of key committees, the establishment of governance guidelines, board tenure and its relationship to CEO tenure, and any other factors that may be relevant. Any concerns about a company's governance structure will weigh in favor of support for the proposal.
 
The review of the company's governance practices may include, but is not limited to poor compensation practices, material failures of governance and risk oversight, related-party transactions or other issues putting director independence at risk, corporate or management scandals, and actions by management or the board with potential or realized negative impact on shareholders. Any such practices may suggest a need for more independent oversight at the company thus warranting support of the proposal.
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   20 of 69
 
 
 

 
 
 
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ISS' performance assessment will generally consider one-, three, and five-year TSR compared to the company's peers and the market as a whole. While poor performance will weigh in favor of the adoption of an independent chair policy, strong performance over the long-term will be considered a mitigating factor when determining whether the proposed leadership change warrants support.
 

Majority of Independent Directors/Establishment of Independent Committees
 
 
 
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 .)
 
             Vote for shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors unless they currently meet that standard.
 

  Majority Vote Standard for the Election 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.
 
Generally vote for precatory and binding shareholder resolutions requesting that the board change the company’s bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve-out for a plurality vote standard when there are more nominees than board seats.
 
Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.
 
Proxy Access
 
General   Recommendation :   Generally   vote   for   management   and   shareholder   proposals   for   proxy   access   with   the   following   provisions:
 
       Ownership   threshold:   maximum   requirement   not   more   than   three   percent   (3%)   of   the   voting   power;
 
Ownership   duration:   maximum   requirement   not   longer   than   three   (3)   years   of   continuous   ownership   for   each   member   of   the   nominating   group;
       Aggregation:   minimal   or   no   limits   on   the   number   of   shareholders   permitted   to   form   a   nominating   group;
       Cap:   cap   on   nominees   of   generally   twenty-five   percent   (25%)   of   the   board.
 

Review for reasonableness any other restrictions on the right of proxy access. Generally vote against proposals that are more restrictive than these guidelines.
 
Require More Nominees than Open Seats
 
 
General   Recommendation :   Vote   against   shareholder   proposals   that   would   require   a   company   to   nominate   more   candidates   than   the   number   of   open   board   seats.
   
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   21 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 

Shareholder Engagement Policy (Shareholder Advisory Committee)
 
 
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;
       Effectively   disclosed   information   with   respect   to   this   structure   to   its   shareholders;
 
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.
 

Proxy Contests—Voting for Director Nominees in Contested Elections
 
 
General   Recommendation :   Vote   case-by-case   on   the   election   of   directors   in   contested   elections,   considering   the   following   factors:

       Long-term   financial   performance   of   the   target   company relative   to   its   industry;
       Management’s   track   record;
 
       Background   to   the   proxy   contest;
       Nominee   qualifications   and   any   compensatory   arrangements;
       Strategic   plan   of   dissident   slate   and   quality   of   critique   against   management;
       Likelihood   that   the   proposed   goals   and   objectives   can   be   achieved   (both   slates);
       Stock   ownership   positions.
 

When the addition of shareholder nominees to the management card (“proxy access nominees”) results in a number of nominees on the management card which exceeds the number of seats available for election, vote case-by-case considering the same factors listed above.
 

Vote-No Campaigns
 
 
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.
   
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   22 of 69
 
 
 

 
 
 
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3.   SHAREHOLDER RIGHTS & DEFENSES
 
Advance Notice Requirements for Shareholder Proposals/Nominations
 
 
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  
 
To be reasonable, the company’s deadline for shareholder notice of a proposal/ nominations must not be more than 60 days prior to the meeting, with a submittal window of at least 30 days prior to the deadline. The submittal window is the period under which a shareholder must file his proposal/nominations prior to the deadline.
 

In general, support additional efforts by companies to ensure full disclosure in regard to a proponent’s economic and voting position in the company so long as the informational requirements are reasonable and aimed at providing shareholders with the necessary information to review such proposals.
 
Amend Bylaws without Shareholder Consent
 
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.
 
Control Share Acquisition Provisions
 
Control share acquisition statutes function by denying shares their voting rights when they contribute to ownership in excess of certain thresholds. Voting rights for those shares exceeding ownership limits may only be restored by approval of either a majority or supermajority of disinterested shares. Thus, control share acquisition statutes effectively require a hostile bidder to put its offer to a shareholder vote or risk voting disenfranchisement if the bidder continues buying up a large block of shares.
 

 
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.
 
Vote against proposals to amend the charter to include control share acquisition provisions. Vote for proposals to restore voting rights to the control shares.
 
Control Share Cash-Out Provisions
 
Control share cash-out statutes give dissident shareholders the right to "cash-out" of their position in a company at the expense of the shareholder who has taken a control position. In other words, when an investor crosses a preset threshold level, remaining shareholders are given the right to sell their shares to the acquirer, who must buy them at the highest acquiring price.
 

 
General   Recommendation :   Vote   for   proposals   to   opt   out   of   control   share   cash-out   statutes.
 
 
Disgorgement Provisions
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   23 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Disgorgement provisions require an acquirer or potential acquirer of more than a certain percentage of a company's stock to disgorge, or pay back, to the company any profits realized from the sale of that company's stock purchased 24 months before achieving control status. All sales of company stock by the acquirer occurring within a certain period of time (between 18 months and 24 months) prior to the investor's gaining control status are subject to these recapture- of-profits provisions.
 
 
General   Recommendation :   Vote   for   proposals   to   opt   out   of   state   disgorgement   provisions.
 
        Fair Price 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.
 
         Generally vote against fair price provisions with shareholder vote requirements greater than a majority of disinterested shares.

         Freeze-Out Provisions
 
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
 
        Greenmail
 
Greenmail payments are targeted share repurchases by management of company stock from individuals or groups seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium over the market value of its shares, the practice discriminates against all other shareholders
 
General   Recommendation :   Vote   for   proposals   to   adopt   anti-greenmail   charter   or   bylaw   amendments   or   otherwise   restrict   a   company’s   ability   to   make   greenmail   payments.
 
Vote case-by-case on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

Litigation Rights (including Exclusive Venue and Fee-Shifting Bylaw Provisions)

Bylaw provisions impacting shareholders' ability to bring suit against the company may include exclusive venue provisions, which provide that the state of incorporation shall be the sole venue for certain types of litigation, and fee- shifting provisions that require a shareholder who sues a company unsuccessfully to pay all litigation expenses of the defendant corporation.
 
General   Recommendation:   Vote   case-by-case   on   bylaws   which   impact   shareholders'   litigation   rights,   taking   into   account   factors   such   as:

            ›        The   company's   stated   rationale   for   adopting   such   a   provision;
 
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
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   24 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
     Governance   features   such   as   shareholders'   ability   to   repeal   the   provision   at   a   later   date   (including   the   vote   standard   applied   when   shareholders   attempt   to   amend   the   bylaws)   and   their   ability   to   hold   directors   accountable   through   annual   director   elections  
      and   a   majority   vote standard   in   uncontested   elections.
 
Generally vote against bylaws that mandate fee-shifting whenever plaintiffs are not completely successful on the merits (i.e., in cases where the plaintiffs are partially successful).
 

Unilateral   adoption   by   the   board   of   bylaw   provisions   which   affect   shareholders'   litigation   rights   will   be   evaluated   under   ISS'   policy   on   Unilateral   Bylaw/Charter   Amendments .
 
Net Operating Loss (NOL) Protective Amendments
 
 
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.
 
 
Vote case-by-case, considering the following factors, for management proposals to adopt an NOL protective amendment that would remain in effect for the shorter of three years (or less) 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);
       The   value   of   the   NOLs;
 
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
       Any   other   factors   that   may   be   applicable.
 

Poison Pills (Shareholder Rights Plans)

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy
 
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:
         ›        Shareholders   have   approved   the   adoption   of   the   plan;   or
         ›       The board, in its exercise of its fiduciary responsibilities, determines that it is in the best interest of shareholders under the circumstances to adopt a pill without the delay in adoption that would result from seeking stockholder approval ( i.e. , the “fiduciary    out” provision). A poison pill adopted under this fiduciary out will be put to a shareholder ratification vote within 12 months of adoption or expire. If the pill is not approved by a majority of the votes cast on this issue, the plan will immediately terminate te.
 
If the shareholder proposal calls for a time period of less than 12 months for shareholder ratification after adoption, vote for the proposal, but add the caveat that a vote within 12 months would be considered sufficient implementation.
 

Management Proposals to Ratify a Poison Pill
 
 
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:
   
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   25 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       No   lower   than   a   20%   trigger,   flip-in   or   flip-over;
       A   term   of   no   more   than   three   years;
       No   dead-hand,   slow-hand,   no-hand   or   similar   feature   that   limits   the   ability   of   a   future   board   to   redeem   the   pill;
 
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.
 

In addition, the rationale for adopting the pill should be thoroughly explained by the company. In examining the request for the pill, take into consideration the company’s existing governance structure, including: board independence, existing takeover defenses, and any problematic governance concerns.
 

Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)
 
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.
 
 
            Vote case-by-case on management proposals for poison pill ratification, considering the following factors, if the term of the pill would be the shorter of three years (or less) and the exhaustion of the NOL:
 

       The   ownership   threshold   to   transfer   (NOL   pills   generally   have   a   trigger   slightly   below   5   percent);
       The   value   of   the   NOLs;
 
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
       Any   other   factors   that   may   be   applicable.

 
Proxy Voting Disclosure, Confidentiality, and Tabulation
 
 
      
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   scope   and   structure   of   the   proposal;
 
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;
       Any   recent   controversies   or   concerns   related   to   the   company's   proxy   voting   mechanics;
       Any   unintended   consequences   resulting   from   implementation   of   the   proposal;   and
       Any   other   factors   that   may   be   relevant.
 

Reimbursing Proxy Solicitation Expenses
 
 
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  
 
© 2015 ISS | Institutional Shareholder Services   26 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
When voting in conjunction with support of a dissident slate, vote for the reimbursement of all appropriate proxy solicitation expenses associated with the election.
 
Generally vote for shareholder proposals calling for the reimbursement of reasonable costs incurred in connection with nominating one or more candidates in a contested election where the following apply:
 

       The   election   of   fewer   than   50%   of   the   directors   to   be   elected   is   contested   in   the   election;
       One   or   more   of   the   dissident’s   candidates   is   elected;
       Shareholders   are   not   permitted   to   cumulate   their   votes   for   directors;   and
       The   election   occurred,   and   the   expenses   were   incurred,   after   the   adoption   of   this   bylaw.
 

Reincorporation Proposals
 
 
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:
 
       Reasons   for   reincorporation;
       Comparison   of   company's   governance   practices   and   provisions   prior   to   and   following   the   reincorporation;   and
       Comparison   of   corporation   laws   of   original   state   and   destination   state.
 
Vote for reincorporation when the economic factors outweigh any neutral or negative governance changes.
 
Shareholder Ability to Act by Written Consent
 
General   Recommendation:   Generally   vote   against   management   and   shareholder   proposals   to   restrict   or   prohibit   shareholders'   ability   to   act   by   written   consent.
   
Generally vote for management and shareholder proposals that provide shareholders with the ability to act by written consent, taking into account the following factors:
 
       Shareholders'   current   right   to   act   by   written   consent;
       The   consent   threshold;
       The   inclusion   of   exclusionary   or   prohibitive   language;
       Investor   ownership   structure;   and
       Shareholder   support   of,   and   management's   response   to,   previous   shareholder   proposals.
 

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the following governance and antitakeover provisions:
 

       An   unfettered 7   right   for   shareholders   to   call   special   meetings   at   a   10   percent   threshold;
       A   majority   vote   standard   in   uncontested   director   elections;
       No   non-shareholder-approved   pill;   and
       An   annually   elected   board.
 

Shareholder Ability to Call Special Meetings
 
----------------------
7   "Unfettered"   means no   restrictions   on   agenda   items,   no   restrictions   on   the number   of   shareholders   who   can   group   together   to
reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after the last annual meeting and no greater than 90 prior to the next annual meeting.
 
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   27 of 69
   
 
 

 
 
 
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.
   

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special meetings taking into account the following factors:
 

›       Shareholders’   current   right   to   call   special meetings;
›       Minimum   ownership   threshold   necessary   to   call   special   meetings   (10%   preferred);
›       The   inclusion   of   exclusionary   or   prohibitive   language;
›        Investor   ownership   structure; and
 
›       Shareholder   support   of,   and   management’s   response   to,   previous   shareholder   proposals.

Stakeholder Provisions
 
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 .
   
State Antitakeover Statutes
 
 
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).

Supermajority Vote Requirements
 
 
General   Recommendation:   Vote   against   proposals   to   require   a   supermajority   shareholder   vote.

Vote for management or shareholder proposals to reduce supermajority vote requirements. However, for companies with shareholder(s) who have significant ownership levels, vote case-by-case, taking into account:
 

›        Ownership   structure;
›        Quorum   requirements;   and
›        Vote   requirements.

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   28 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
4.  
CAPITAL/RESTRUCTURING
 
Capital
 
Adjustments to Par Value of Common Stock
 
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.
   
Vote for management proposals to eliminate par value.

Common Stock Authorization
 
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.
 
Vote against proposals at companies with more than one class of common stock to increase the number of authorized shares of the class of common stock that has superior voting rights.
 

Vote against proposals to increase the number of authorized common shares if a vote for a reverse stock split on the same ballot is warranted despite the fact that the authorized shares would not be reduced proportionally.
 

Vote case-by-case on all other proposals to increase the number of shares of common stock authorized for issuance. Take into account company-specific factors that include, at a minimum, the following:
 

       Past   Board   Performance :
       The   company's   use   of   authorized   shares   during   the   last   three   years

       The   Current   Request:
       Disclosure   in   the   proxy   statement   of   the   specific   purposes   of   the   proposed   increase;
 
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.

Dual Class Structure
 
General   Recommendation:   Generally   vote   against   proposals   to   create   a   new   class   of   common   stock   unless:
   
       The   company   discloses   a   compelling   rationale   for   the   dual-class   capital   structure,   such   as:
 
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   of   shares   will   be   transitory;
 
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
       The   new   class   is   not   designed   to   preserve   or   increase   the   voting   power   of   an   insider   or   significant   shareholder.

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   29 of 69
   

 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Issue Stock for Use with Rights Plan
 
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).
   
Preemptive Rights
 
General   Recommendation:   Vote   case-by-case   on   shareholder   proposals   that   seek   preemptive   rights,   taking   into   consideration:
 
       The   size   of   the   company;
       The   shareholder   base;   and
       The   liquidity   of   the   stock.

 
Preferred Stock Authorization
 
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.

Vote against proposals at companies with more than one class or series of preferred stock to increase the number of authorized shares of the class or series of preferred stock that has superior voting rights.
 

Vote case-by-case on all other proposals to increase the number of shares of preferred stock authorized for issuance. Take into account company-specific factors that include, at a minimum, the following:
 

       Past   Board   Performance:
       The   company's   use   of   authorized   preferred   shares   during   the   last   three   years;

       The   Current   Request:
       Disclosure   in   the   proxy   statement   of   the   specific   purposes   for   the   proposed   increase;
       Disclosure   in   the   proxy   statement   of   specific   and   severe   risks   to   shareholders   of   not   approving   the   request;
In   cases   where   the   company   has   existing   authorized   preferred   stock,   the   dilutive   impact   of   the   request   as   determined   by   an   allowable   increase   calculated   by   ISS   (typically   100   percent   of   existing   authorized   shares)   t hat   reflects   the   company's   need   for  
shares   and   total   shareholder   returns;   and
       Whether   the   shares   requested   are   blank   check   preferred   shares   that   can   be   used   for   antitakeover   purposes.

Recapitalization Plans
 
General   Recommendation:   Vote case-by-case on recapitalizations (reclassifications of securities), taking into account the following:
   
       More   simplified   capital   structure;
       Enhanced   liquidity;
       Fairness   of   conversion   terms;
       Impact   on   voting   power   and   dividends;
       Reasons   for   the   reclassification;
       Conflicts   of   interest;   and
       Other   alternatives   considered.
 
Reverse Stock Splits
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   30  of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
General   Recommendation:   Vote   for   management   proposals   to   implement   a   reverse   stock   split   when   the   number   of   authorized   shares   will   be   proportionately   reduced.
 
         Vote against proposals when there is not a proportionate reduction of authorized shares, unless:
 
       A   stock   exchange   has   provided   notice   to   the   company   of   a   potential   delisting;   or
 
The   effective   increase   in   authorized   shares   is   equal   to   or   less   than   the   allowable   increase   calculated   in   accordance   with   ISS'   Common   Stock   Authorization   policy.
 
Share Repurchase Programs
 
General   Recommendation:   Vote   for   management   proposals   to   institute   open-market   share   repurchase   plans   in   which   all   shareholders   may   participate   on   equal   terms.
 
            Stock Distributions: Splits and Dividends
 
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.

Tracking Stock
 
General   Recommendation:   Vote   case-by-case   on   the   creation   of   tracking   stock,   weighing   the   strategic   value   of   the   transaction   against   such   factors   as:

       Adverse   governance   changes;
       Excessive   increases   in   authorized   capital   stock;
       Unfair   method   of   distribution;
       Diminution   of   voting   rights;
       Adverse   conversion   features;
       Negative   impact   on   stock   option   plans;   and
       Alternatives   such   as   spin-off.
 
Restructuring
 
Appraisal Rights
 
 
General   Recommendation :   Vote   for   proposals   to   restore   or   provide   shareholders   with   rights   of   appraisal.
 
Asset Purchases
 
 
General   Recommendation :   Vote   case-by-case   on   asset   purchase   proposals,   considering   the   following   factors:
   
       Purchase   price;
       Fairness   opinion;
       Financial   and   strategic   benefits;
       How   the   deal   was   negotiated;
       Conflicts   of   interest;
       Other   alternatives   for   the   business;
       Non-completion   risk.

 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   31  of 69
   
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Asset Sales
 
 
General   Recommendation:   Vote   case-by-case   on   asset   sales,   considering   the   following   factors:

       Impact   on   the   balance   sheet/working   capital;
       Potential   elimination   of   diseconomies;
       Anticipated   financial   and   operating   benefits;
       Anticipated   use   of   funds;
       Value   received   for   the   asset;
       Fairness   opinion;
       How   the   deal   was   negotiated;
       Conflicts   of   interest.
 
 
Bundled Proposals
 
 
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.

Conversion of Securities
 
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.
 
Vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.
 
Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans
 
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:
 
       Dilution   to   existing   shareholders'   positions;
 
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;
       Management's   efforts   to   pursue   other   alternatives;
 
Control   issues   -   change   in   management;   change   in   control,   guaranteed   board   and   committee   seats;   standstill   provisions;   voting   agreements;   veto   power   over   certain   corporate   actions;   and
       Conflict   of   interest   -   arm's   length   transaction,   managerial   incentives.
 
Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.
 
Formation of Holding Company
 
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  
 
© 2015 ISS | Institutional Shareholder Services   32  of 69
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       The   reasons   for   the   change;
       Any   financial   or   tax   benefits;
       Regulatory   benefits;
       Increases   in   capital   structure;   and
       Changes   to   the   articles   of   incorporation   or   bylaws   of   the   company.
 

Absent compelling financial reasons to recommend for the transaction, vote against the formation of a holding company if the transaction would include either of the following:
 

       Increases   in   common   or   preferred   stock   in   excess   of   the   allowable   maximum   (see   discussion   under   “Capital”);   or
       Adverse   changes   in   shareholder   rights.
 

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)
 
General   Recommendation:   Vote   case-by-case   on   going   private   transactions,   taking   into   account   the   following:

       Offer   price/premium;
       Fairness   opinion;
       How   the   deal   was   negotiated;
       Conflicts   of   interest;
       Other   alternatives/offers   considered;   and
       Non-completion   risk.

Vote case-by-case on going dark transactions, determining whether the transaction enhances shareholder value by taking into consideration:

 
Whether   the   company   has   attained   benefits   from   being   publicly-traded   (examination   of   trading   volume,   liquidity,   and   market   research   of   the   stock);
       Balanced   interests   of   continuing   vs.   cashed-out   shareholders,   taking   into   account   the   following:
       Are   all   shareholders   able   to   participate   in   the   transaction?
       Will   there   be   a   liquid   market   for   remaining   shareholders   following   the   transaction?
       Does   the   company   have   strong   corporate   governance?
       Will   insiders   reap   the   gains   of   control   following   the   proposed   transaction?
       Does   the   state   of   incorporation   have   laws   requiring   continued   reporting   that   may   benefit   shareholders?

Joint Ventures
 
General   Recommendation:   Vote   case-by-case   on   proposals   to   form   joint   ventures,   taking   into   account   the   following:
 
       Percentage   of   assets/business   contributed;
       Percentage   ownership;
       Financial   and   strategic   benefits;
       Governance   structure;
       Conflicts   of   interest;
       Other   alternatives;   and
       Non-completion   risk.
 
Liquidations

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   33  of 69
   
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
General   Recommendation:   Vote   case-by-case   on   liquidations,   taking   into   account   the   following:
 
       Management’s   efforts   to   pursue   other   alternatives;
       Appraisal   value   of   assets;   and
       The   compensation   plan   for   executives   managing   the   liquidation.
 
Vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.
 
Mergers and Acquisitions
 
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
   
Private Placements/Warrants/Convertible Debentures
 
 
General   Recommendation:   Vote   case-by-case   on   proposals   regarding   private   placements,   warrants,   and   convertible   debentures   taking   into   consideration:
   
Dilution   to   existing   shareholders'   position:   The   amount   and timing   of   shareholder   ownership   dilution   should   be   weighed   against   the   needs   and   proposed   shareholder   benefits   of   the   capital   infusion.   Although   newly   issued   common   stock,   absent   preemptive   rights,   is   typically   dilutive   to   existing   shareholders,  
share   price   appreciation   is   often   the   necessary   e vent   to   trigger   the   exercise   of   "out   of   the   money"   warrants   and   convertible   debt.   In   these   instances   from   a   value   standpoint,   the   negative   impact   of   dilution   is   mitigated   by   the   increase   in   the   company's   stock  
price   that   must   occur   to   trigger   the   dilutive   event.
 
 
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  
 
© 2015 ISS | Institutional Shareholder Services   34 of 69
   
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 

When   evaluating   the   magnitude   of   a   private   placement   discount   or   premium,   consider   factors   that   influence   the   discount   or   premium,   such   as,   liquidity,   due   diligence   costs,   control   and   monitoring  
costs,   capital   scarcity,   information   asymmetry   and   anticipation   of   future   performance.
 

       Financial   issues:
       The   company's   financial   condition;
       Degree   of   need   for   capital;
       Use   of   proceeds;
       Effect   of   the   financing   on   the   company's   cost   of   capital;
       Current   and   proposed   cash   burn   rate;
       Going   concern   viability   and   the   state   of   the   capital   and   credit   markets.

Management's   efforts   to   pursue   alternatives   and   whether   the   company   engaged   in   a   process   to   evaluate   alternatives:   A   fair,   unconstrained   process   helps   to   ensure   the   best   price   for   shareholders.   Financing   alternatives   can   include   joint   ventures,  
partnership,   merger   or   sale   of   part   or   all   of   the   company.
 

       Control   issues:
       Change   in   management;
       Change   in   control;
       Guaranteed   board   and   committee   seats;
       Standstill   provisions;
       Voting   agreements;
       Veto   power   over   certain   corporate   actions;   and
       Minority   versus   majority   ownership   and   corresponding   minority   discount   or   majority   control   premium
 

       Conflicts   of   interest:
       Conflicts   of   interest   should   be   viewed   from   the   perspective   of   the   company   and   the   investor.
 
Were   the   terms   of   the   transaction   negotiated   at   arm's   length?   Are   managerial   incentives   aligned   with   shareholder   interests?
 

       Market   reaction:
 
 
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.


Vote for the private placement, or for the issuance of warrants and/or convertible debentures in a private placement, if it is expected that the company will file for bankruptcy if the transaction is not approved.
 

Reorganization/Restructuring Plan (Bankruptcy)
 
 
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:
   
       Estimated   value   and   financial   prospects   of   the   reorganized   company;
       Percentage   ownership   of   current   shareholders   in   the   reorganized   company;
 
Whether   shareholders   are   adequately   represented   in   the   reorganization   process   (particularly   through   the   existence   of   an   Official   Equity   Committee);
       The   cause(s)   of   the   bankruptcy   filing,   and   the   extent   to   which   the   plan   of   reorganization   addresses   the   cause(s);
       Existence   of   a   superior   alternative   to   the   plan   of   reorganization;   and
       Governance   of   the   reorganized   company.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   35 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Special Purpose Acquisition Corporations (SPACs)
 
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

Spin-offs
 
General   Recommendation: Vote   case-by-case   on   spin-offs,   considering:
 
       Tax   and   regulatory   advantages;
       Planned   use   of   the   sale   proceeds;
       Valuation   of   spinoff;
       Fairness   opinion;
       Benefits   to   the   parent   company;
       Conflicts   of   interest;
       Managerial   incentives;
       Corporate   governance   changes;
       Changes   in   the   capital   structure.
 
 
Value Maximization Shareholder Proposals
 
General   Recommendation:   Vote   case-by-case   on   shareholder   proposals   seeking   to   maximize   shareholder   value   by:
 
       Hiring   a   financial   advisor   to   explore   strategic   alternatives;
       Selling   the   company;   or
       Liquidating   the   company   and   distributing   the   proceeds   to   shareholders.
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
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2015 U.S. Summary Proxy Voting Guidelines
 
These proposals should be evaluated based on the following factors:
 
       Prolonged   poor   performance   with   no   turnaround   in   sight;
       Signs   of   entrenched   board   and   management   (such   as   the   adoption   of   takeover   defenses);
       Strategic   plan   in   place   for   improving   value;
       Likelihood   of   receiving   reasonable   value   in   a   sale   or   dissolution;   and
       The   company   actively   exploring   its   strategic   options,   including   retaining   a   financial   advisor.

 
5.  
COMPENSATION
 
Executive Pay Evaluation
 
Underlying all evaluations are five global principles that most investors expect corporations to adhere to in designing and administering executive and director compensation programs:
 
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.
 
Advisory Votes on Executive Compensation—Management Proposals (Management Say-on- Pay)
 
General   Recommendation:   Vote   case-by-case   on   ballot   items   related   to   executive   pay   and   practices,   as   well   as   certain   aspects   of   outside   director   compensation.
 
Vote against Advisory Votes on Executive Compensation (Management Say-on-Pay—MSOP) if:
 
       There   is   a   significant   misalignment   between   CEO   pay   and   company   performance   ( pay   for   performance );
       The   company   maintains   significant   problematic   pay   practices ;
       The   board   exhibits   a   significant   level   of   poor   communication   and   responsiveness   to   shareholders.
 
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2015 U.S. Summary Proxy Voting Guidelines
 
Vote against or withhold from the members of the Compensation Committee and potentially the full board if:
 
 
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
   ›        The   situation   is   egregious.
 
Primary Evaluation Factors for Executive Pay
 
Pay-for-Performance Evaluation
 
ISS   annually   conducts   a   pay-for-performance   analysis   to   identify   strong   or   satisfactory   alignment   between   pay   and   performance   over   a   sustained   period.   With   respect   to   companies   in   the   Russell   3000   or   Russell   3000E   Indices 8 ,   this   analysis   considers   the   following:
 

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.
       › The   multiple   of   the   CEO's   total   pay   relative   to   the   peer   group   median.
 
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.
 
If   the   above   analysis   demonstrates   significant   unsatisfactory   long-term   pay-for-performance   alignment   or,   in   the   case   of   companies   outside   the   Russell   indices,   misaligned   pay   and   performance   are   otherwise   suggested,   our   analysis   may   include   any   of   the   following   qualitative   factors, as   relevant   to   evaluating   how   various   pay   elements   may   work   to   encourage   or   to   undermine   long-term   value   creation   and   alignment   with   shareholder   interests:
 
       The   ratio   of   performance-   to   time-based   equity   awards;
       The   overall   ratio   of   performance-based   compensation;
       The   completeness   of   disclosure   and   rigor   of   performance   goals;
       The   company's   peer   group   benchmarking   practices;
 
Actual   results   of   financial/operational   metrics,   such   as   growth   in   revenue,   profit,   cash   flow,   etc.,   both   absolute   and   relative   to   peers;
 
----------------------
8   The   Russell   3000E   Index   includes   approximately   4,000   of   the   largest   U.S.   equity   securities.
9   The   revised   peer   group   is   generally   comprised   of   14-24   companies   that   are   selected   using   market   cap,   revenue   (or   assets   for   certain   financial   firms),   GICS   industry   group,   and   company's   selected   peers'   GICS industry   group,   with   size   constraints,   via   a   process
designed to select peers that are comparable to the subject company in terms of revenue/assets and industry, and also within a market cap bucket that is reflective of the company's. For Oil, Gas & Consumable Fuels companies, market cap is the only size determinant.
10   Only   Russell   3000   Index   companies   are   subject   to   the   Absolute Alignment   analysis.
 
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2015 U.S. Summary Proxy Voting Guidelines
 
 
 
Special   circumstances   related   to,   for   example,   a   new   CEO   in   the   prior   FY   or   anomalous   equity   grant   practices   (e.g.,   bi-annual   awards);
       Realizable   pay 11   compared   to   grant   pay;   and
       Any   other   factors   deemed   relevant.
 
Problematic Pay Practices

The focus is on executive compensation practices that contravene the global pay principles, including:

       Problematic   practices   related   to   non-performance-based   compensation   elements;
       Incentives   that   may   motivate   excessive   risk-taking;   and
       Options   Backdating.

Problematic Pay Practices related to Non-Performance-Based Compensation Elements

Pay elements that are not directly based on performance are generally evaluated case-by-case considering the context of a company's overall pay program and demonstrated pay-for-performance philosophy. Please refer to ISS' Compensation FAQ document for detail on specific pay practices that have been identified as potentially problematic and may lead to negative recommendations if they are deemed to be inappropriate or unjustified relative to executive pay best practices.  The list below highlights the problematic practices that carry significant weight in this overall consideration and may result in adverse vote recommendations:

 
Repricing   or   replacing   of   underwater   stock   options/SARS   without   prior   shareholder   approval   (including   cash   buyouts   and   voluntary   surrender   of   underwater   options);
       Excessive   perquisites   or   tax   gross-ups,   including   any   gross-up   related   to   a   secular   trust   or   restricted   stock   vesting;
       New   or   extended   agreements   that   provide   for:
       CIC   payments   exceeding   3   times   base   salary   and   average/target/most   recent   bonus;
 
CIC   severance   payments   without   involuntary   job   loss   or   substantial   diminution   of   duties   ("single"   or   "modified   single"   triggers);
            ›       CIC   payments   with   excise   tax   gross-ups   (including   "modified"   gross-ups).
 
Incentives that may Motivate Excessive Risk-Taking

       Multi-year   guaranteed   bonuses;
       A   single   or   common   performance   metric   used   for   short-   and   long-term   plans;
       Lucrative   severance   packages;
       High   pay   opportunities   relative   to   industry   peers;
       Disproportionate   supplemental   pensions;   or
       Mega   annual   equity   grants   that   provide   unlimited   upside   with   no   downside   risk.
 
Factors that potentially mitigate the impact of risky incentives include rigorous claw-back provisions and robust stock ownership/holding guidelines.
 

Options Backdating

 
----------------------
11   ISS   research   reports   include   realizable   pay   for   S&P1500   companies.

 
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2015 U.S. Summary Proxy Voting Guidelines
 
The following factors should be examined case-by-case to allow for distinctions to be made between “sloppy” plan administration versus deliberate action or fraud:
 
       Reason   and   motive   for   the   options   backdating   issue,   such   as   inadvertent   vs.   deliberate   grant   date   changes;
       Duration   of   options   backdating;
       Size   of   restatement   due   to   options   backdating;
 
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.
 
Compensation Committee Communications and Responsiveness
 
Consider the following factors case-by-case when evaluating ballot items related to executive pay on the b oard’s   responsiveness   to   investor   input   and   engagement   on   compensation   issues:
 
       Failure   to   respond   to   majority-supported   shareholder   proposals   on   executive   pay   topics;   or
 
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:
       The   company's   response,   including:
 
 
Disclosure   of   engagement   efforts   with   major   institutional   investors   regarding   the   issues   that   contributed   to   the   low   level   of   support;
       Specific   actions   taken   to   address   the   issues   that   contributed   to   the   low   level   of   support;
       Other   recent   compensation   actions   taken   by   the   company;
       Whether   the   issues   raised   are   recurring   or   isolated;
       The   company's   ownership   structure;   and
 
Whether   the   support   level   was   less   than   50   percent,   which   would   warrant   the   highest   degree   of   responsiveness.
 

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")
 
 
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.
   
Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale
 
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.
   
Features that may result in an “against” recommendation include one or more of the following, depending on the number, magnitude, and/or timing of issue(s):
 
       Single-   or   modified-single-trigger   cash   severance;
       Single-trigger   acceleration   of   unvested   equity   awards;
       Excessive   cash   severance   (>3x   base   salary   and   bonus);
       Excise   tax   gross-ups   triggered   and   payable   (as   opposed   to a   provision   to   provide   excise   tax   gross-ups);
       Excessive   golden   parachute   payments   (on   an   absolute   basis   or   as   a   percentage   of   transaction   equity   value);   or
 
  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
 
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2015 U.S. Summary Proxy Voting Guidelines
 
 
The   company's   assertion   that   a   proposed   transaction   is   conditioned   on   shareholder   approval   of   the   golden   parachute   advisory   vote.
 
Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis. However, the presence of multiple legacy problematic features will also be closely scrutinized.
 
In cases where the golden parachute vote is incorporated into a company's advisory vote on compensation (management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which may give higher weight to that component of the overall evaluation.
 
Equity-Based and Other Incentive Plans
 
 
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
       SVT   based   only   on   new   shares   requested   plus   shares   remaining   for   future   grants.
 
       Plan   Features:
       Automatic   single-triggered   award   vesting   upon   a   change   in   control   (CIC);
       Discretionary   vesting   authority;
       Liberal   share   recycling   on   various   award   types;
       Lack   of   minimum   vesting   period   for   grants   made   under   the   plan.
 
       Grant   Practices:
       The   company’s   three   year   burn   rate   relative   to   its   industry/market   cap   peers;
       Vesting   requirements   in   most   recent   CEO   equity   grants   (3-year   look-back);
 
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);
       The   proportion   of   the   CEO's   most   recent   equity   grants/awards   subject   to   performance   conditions;
       Whether   the   company   maintains   a   claw-back   policy;
       Whether   the   company   has   established   post   exercise/vesting   share-holding   requirements.
 

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall, in shareholders' interests, or if any of the following egregious factors apply:
 
       Awards   may   vest   in   connection   with   a   liberal   change-of-control   definition;
 
----------------------
12   Proposals   evaluated   under   the   EPSC   policy   generally include   those   to   approve   or amend   (1) stock   option   plans   for   employees
 
and/or employees and directors, (2) restricted stock plans for employees and/or employees and directors, and (3) omnibus stock incentive plans for employees and/or employees and directors.
 
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2015 U.S. Summary Proxy Voting Guidelines
 
 
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
       Any   other   plan   features   are   determined   to   have   a   significant   negative   impact   on   shareholder   interests.
 

Plan Cost
 
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).
   
 
Shareholder Value Transfer (SVT)
 
The cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which is measured using a binomial option pricing model that assesses the amount of shareholders’ equity flowing out of the company to employees and directors. SVT is expressed as both a dollar amount and as a percentage of market value, and includes the new shares proposed, shares available under existing plans, and shares granted but unexercised (using two measures, in the case of plans subject to the Equity Plan Scorecard evaluation, as noted above). All award types are valued. For omnibus plans, unless limitations are placed on the most expensive types of awards (for example, full value awards), the assumption is made that all awards to be granted will be the most expensive types. See discussion of specific types of awards.
 
Except for proposals subject to Equity Plan Scorecard evaluation, Shareholder Value Transfer is reasonable if it falls below a company-specific benchmark.  The benchmark is determined as follows: The top quartile performers in each industry group (using the Global Industry Classification Standard: GICS) are identified. Benchmark SVT levels for each industry are established based on these top performers’ historic SVT. Regression analyses are run on each industry group to identify the variables most strongly correlated to SVT. The benchmark industry SVT level is then adjusted upwards or downwards for the specific company by plugging the company-specific performance measures, size and
cash   compensation   into   the   industry   cap   equations   to   arrive   at   the   company’s benchmark. 13
 
Grant Practices
 

Three-Year Burn Rate
 

Burn   rate   benchmarks   (utilized   in   Equity   Plan   Scorecard   evaluations) are   calculated   as   the   greater   of:   (1)   the   mean   ( μ )   plus   one   standard   deviation   ( σ )   of   the   company's   GICS   group   segmented   by S&P   500,   Russell   3000   index   (less   the   S&P500)   and   non-Russell   3000   index;   and   (2)   two   percent   of   weighted   common   shares   outstanding. In   addition,   year-   over-year   burn-rate   benchmark   changes   will   be   limited   to   a   maximum   of   two   (2)   percentage   points   plus   or   minus   the   prior   year's   burn-rate   benchmark.

 
 

----------------------
13   For   plans   evaluated   under   the   Equity   Plan Scorecard   policy,   the   company's   SVT benchmark   is   considered   along   with   other   factors.
 
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2015 U.S. Summary Proxy Voting Guidelines
 
2015 Burn Rate Benchmarks
 
 
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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2015 U.S. Summary Proxy Voting Guidelines
 

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%
 
 
*The benchmark is generally the Mean + Standard Deviation, subject to minimum benchmark of 2%. In addition, y ear-over-year   burn rate   benchmark changes   are limited to   a   maximum   of   two   (2) percentage   points   plus   or minus   the prior   year's   burn   rate   benchmark.
 
A premium (multiplier) is applied on full value awards for the past three fiscal years. The guideline for applying the premium is as follows:
 
 
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
 
Egregious Factors
 
Liberal Change in Control Definition
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
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2015 U.S. Summary Proxy Voting Guidelines
 
 
Generally vote against equity plans if the plan has a liberal definition of change in control and the equity awards could vest upon such liberal definition of change-in-control, even though an actual change in control may not occur.
Examples of such a definition include, but are not limited to, announcement or commencement of a tender offer, provisions for acceleration upon a “potential” takeover, shareholder approval of a merger or other transactions, or similar language.
 

Repricing Provisions
 

Vote against plans that expressly permit the repricing or exchange of underwater stock options/stock appreciate rights (SARs) without prior shareholder approval. "Repricing" includes the ability to do any of the following:
 

       Amend   the   terms   of   outstanding   options   or   SARs   to   reduce   the   exercise   price   of   such   outstanding   options   or   SARs;
 
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.
 
Also, vote against or withhold from members of the Compensation Committee who approved and/or implemented a repricing or an option/SAR exchange program, by buying out underwater options/SARs for stock, cash or other consideration or canceling underwater options/SARs and regranting options/SARs with a lower exercise price, without prior shareholder approval, even if such repricings are allowed in their equity plan.
 
Vote against plans if the company has a history of repricing without shareholder approval, and the applicable listing standards would not preclude them from doing so.
 
Problematic Pay Practices or Significant Pay-for-Performance Disconnect
 
If   the   equity   plan   on   the   ballot   is   a   vehicle   for   problematic   pay   practices ,   vote   against   the   plan.
 
If a significant portion of the CEO’s misaligned pay is attributed to non-performance-based equity awards, and there is an equity plan on the ballot with the CEO as one of the participants, ISS may recommend a vote against the equity plan. Considerations in voting against the equity plan may include, but are not limited to:
 
       Magnitude   of   pay   misalignment;
       Contribution   of   non–performance-based   equity   grants   to   overall   pay;   and
 
The   proportion   of   equity   awards   granted   in   the   last   three   fiscal   years   concentrated   at   the   named   executive   officer   level.
 
 
Specific Treatment of Certain Award Types in Equity Plan Evaluations
 
Dividend Equivalent Rights
 
Options that have Dividend Equivalent Rights (DERs) associated with them will have a higher calculated award value than those without DERs under the binomial model, based on the value of these dividend streams. The higher value  will be applied to new shares, shares available under existing plans, and shares awarded but not exercised per the plan specifications. DERS transfer more shareholder equity to employees and non-employee directors and this cost should be captured.
 
Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   45 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
For Real Estate Investment Trusts (REITS), include the common shares issuable upon conversion of outstanding Operating Partnership (OP) units in the share count for the purposes of determining: (1) market capitalization in the Shareholder Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate analysis.
 
Other Compensation Plans
 
401(k) Employee Benefit Plans
 
General   Recommendation :   Vote   for   proposals   to   implement   a   401(k)   savings   plan   for   employees.
 
 
Employee Stock Ownership Plans (ESOPs)
 
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).
   
Employee Stock Purchase Plans—Qualified Plans
 
General   Recommendation:   Vote   case-by-case   on   qualified   employee   stock   purchase   plans.   Vote   for   employee   stock   purchase   plans   where   all   of   the   following   apply:
   
       Purchase   price   is   at   least   85   percent   of   fair   market   value;
       Offering   period   is   27   months   or   less;   and
       The   number   of   shares   allocated   to   the   plan   is 10   percent   or   less   of   the   outstanding   shares.   Vote   against   qualified   employee   stock   purchase   plans   where   any   of   the   following   apply:
       Purchase   price   is   less   than   85   percent   of   fair   market   value;   or
       Offering   period   is   greater   than   27   months;   or
       The   number   of   shares   allocated   to   the   plan   is   more   than   ten   percent   of   the   outstanding   shares.
 

Employee Stock Purchase Plans—Non-Qualified Plans
 
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);
       Limits   on   employee   contribution,   which   may   be   a   fixed   dollar   amount   or   expressed   as   a   percent   of   base   salary;
 
Company   matching   contribution   up   to   25   percent   of   employee’s   contribution,   which   is   effectively   a   discount   of   20   percent   from   market   value;
       No   discount   on   the   stock   price   on   the   date   of   purchase   since   there   is   a   company   matching   contribution.
 
Vote against nonqualified employee stock purchase plans when any of the plan features do not meet the above criteria. If the company matching contribution exceeds 25 percent of employee’s contribution, evaluate the cost of the plan against its allowable cap.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   46 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation Proposals)
 
General   Recommendation:   Generally   vote   for   proposals   to   approve   or   amend   executive   incentive   plans   if   the   proposal:

       Is   only   to   address   administrative   features;
       Places   a   cap   on   the   annual   grants   any   one   participant   may   receive   to   comply   with   the   provisions   of   Section   162(m);
 
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.

Vote against such proposals if:

 
T he   compensation   committee   does   not   fully   consist   of   independent   outsiders, per   ISS’   Categorization   of   Directors ;   or
       The   plan   or   proposal   contains   excessive   problematic   provisions.   Vote   case-by-case   on   such   proposals   if:
 
   
 
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.
 

Option Exchange Programs/Repricing Options
 
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;
       Rationale   for   the   re-pricing--was   the   stock   price   decline   beyond   management's   control?
       Is   this   a   value-for-value   exchange?
       Are   surrendered   stock   options   added   back   to   the   plan   reserve?
       Option   vesting--does   the   new   option   vest   immediately   or   is   there   a   black-out   period?
       Term   of   the   option--the   term   should   remain   the   same   as   that   of   the   replaced   option;
       Exercise   price--should   be   set   at   fair   market   or   a   premium   to   market;
       Participants--executive   officers   and   directors   should   be   excluded.
 

If the surrendered options are added back to the equity plans for re-issuance, then also take into consideration the company’s total cost of equity plans and its three-year average burn rate.
 

In addition to the above considerations, evaluate the intent, rationale, and timing of the repricing proposal. The proposal should clearly articulate why the board is choosing to conduct an exchange program at this point in time. Repricing underwater options after a recent precipitous drop in the company’s stock price demonstrates poor timing. Repricing after a recent decline in stock price triggers additional scrutiny and a potential against vote on the proposal. At a minimum, the decline should not have happened within the past year. Also, consider the terms of the surrendered options, such as the grant date, exercise price and vesting schedule. Grant dates of surrendered options should be far enough back (two to three years) so as not to suggest that repricings are being done to take advantage of short-term downward price movements. Similarly, the exercise price of surrendered options should be above the 52-week high for the stock price.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   47 of 69
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Vote for shareholder proposals to put option repricings to a shareholder vote.
 
Stock Plans in Lieu of Cash
 
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.
   
Vote for non-employee director-only equity plans that provide a dollar-for-dollar cash-for-stock exchange.
 
Vote case-by-case on plans which do not provide a dollar-for-dollar cash for stock exchange. In cases where the exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be considered using the binomial option pricing model. In an effort to capture the total cost of total compensation, ISS will not make any adjustments to carve out the in-lieu-of cash compensation.
 
Transfer Stock Option (TSO) Programs
 
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.
   
Vote case-by-case on one-time transfers. Vote for if:
 
       Executive   officers   and   non-employee   directors   are   excluded   from   participating;
 
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;
       There   is   a   two-year   minimum   holding   period   for   sale   proceeds   (cash   or   stock)   for   all   participants.
 
Additionally, management should provide a clear explanation of why options are being transferred to a third-party institution and whether the events leading up to a decline in stock price were beyond management's control. A review of the company's historic stock price volatility should indicate if the options are likely to be back “in-the-money” over the near term.
 
Ongoing TSO program: Vote against equity plan proposals if the details of ongoing TSO programs are not provided to shareholders. Since TSOs will be one of the award types under a stock plan, the ongoing TSO program, structure and mechanics must be disclosed to shareholders. The specific criteria to be considered in evaluating these proposals include, but not limited, to the following:
 
       Eligibility;
       Vesting;
       Bid-price;
       Term   of   options;
       Cost   of   the   program   and   impact   of   the   TSOs   on   company’s   total   option   expense
       Option   repricing   policy.
 
Amendments to existing plans that allow for introduction of transferability of stock options should make clear that only options granted post-amendment shall be transferable.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   48 of 69
   
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
Director Compensation
 
Equity Plans for Non-Employee Directors
 
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.
   
On occasion, director stock plans that set aside a relatively small number of shares when combined with employee or executive stock compensation plans will exceed benchmark. Vote for the plan if ALL of the following qualitative factors in the board’s compensation are met and disclosed in the proxy statement:
 
       Director   stock   ownership   guidelines   with   a   minimum   of   three   times   the   annual   cash   retainer.
       Vesting   schedule   or   mandatory   holding/deferral   period:
       A   minimum   vesting   of   three   years   for   stock   options   or   restricted   stock;   or
       Deferred   stock   payable   at   the   end   of   a   three-year   deferral   period.
       Mix   between   cash   and   equity:
       A   balanced   mix   of   cash   and   equity,   for   example   40%   cash/60%   equity   or   50%   cash/50%   equity;   or
 
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.
       No   retirement/benefits   and   perquisites   provided   to   non-employee   directors;   and
 
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.
 
Non-Employee Director Retirement Plans
 
General   Recommendation :   Vote   against   retirement   plans   for   non-employee   directors.   Vote   for   shareholder   proposals   to   eliminate   retirement   plans   for   non-employee   directors.
 
Shareholder Proposals on Compensation
 
Adopt Anti-Hedging/Pledging/Speculative Investments Policy
 
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.
   
Bonus Banking/Bonus Banking “Plus”
 
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:
       The   company’s   past   practices   regarding   equity   and   cash   compensation;
 
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
       Whether   the   company   has   a   rigorous   claw-back   policy   in   place.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   49 of 69
 
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Compensation Consultants—Disclosure of Board or Company’s Utilization
 
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.
   
Disclosure/Setting Levels or Types of Compensation for Executives and Directors
 
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.
   
Vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.
 
Vote against shareholder proposals seeking to eliminate stock options or any other equity grants to employees or directors.
 
Vote against shareholder proposals requiring director fees be paid in stock only.
 
Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in order to qualify as a director or to remain on the board.
 
Vote case-by-case on all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long-term corporate outlook.
 
Golden Coffins/Executive Death Benefits
 
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.
   
Hold Equity Past Retirement or for a Significant Period of Time
 
 
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:
   
       while   employed   and/or   for   two   years   following   the   termination   of   their   employment   ;   or
 
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.
 
The following factors will be taken into account:
 
 
Whether   the   company   has   any   holding   period,   retention   ratio,   or   officer   ownership   requirements   in   place.   These   should   consist   of:
       Rigorous   stock   ownership   guidelines;
       A   holding   period   requirement   coupled   with   a   significant   long-term   ownership   requirement;   or
       A   meaningful   retention   ratio;
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   50 of 69
   
 
 

 
 
 
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;
       Post-termination   holding   requirement   policies   or   any   policies   aimed   at   mitigating   risk   taking   by   senior   executives;
       Problematic   pay   practices,   current   and   past,   which   may   promote   a   short-term   versus   a   long-term   focus.
 

A rigorous stock ownership guideline should be at least 10x base salary for the CEO, with the multiple declining for other executives. A meaningful retention ratio should constitute at least 50 percent of the stock received from equity awards (on a net proceeds basis) held on a long-term basis, such as the executive’s tenure with the company or even a few years past the executive’s termination with the company.
 

Vote case-by-case on shareholder proposals asking companies to adopt policies requiring Named Executive Officers to retain 75% of the shares acquired through compensation plans while employed and/or for two years following the termination of their employment, and to report to shareholders regarding this policy. The following factors will be taken into account:
 

 
Whether   the   company   has   any   holding   period,   retention   ratio,   or   officer   ownership   requirements   in   place.   These   should   consist   of:
       Rigorous   stock   ownership   guidelines,   or
       A   holding   period   requirement   coupled   with   a   significant   long-term   ownership   requirement,   or
       A   meaningful   retention   ratio,
 
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.
       Problematic   pay   practices,   current   and   past,   which   may   promote   a   short-term   versus   a   long-term   focus.
 

A rigorous stock ownership guideline should be at least 10x base salary for the CEO, with the multiple declining for other executives. A meaningful retention ratio should constitute at least 50 percent of the stock received from equity awards (on a net proceeds basis) held on a long-term basis, such as the executive’s tenure with the company or even a few years past the executive’s termination with the company.
 
Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in order to qualify as a director or to remain on the board. While ISS favors stock ownership on the part of directors, the company should determine the appropriate ownership requirement.
 
Non-Deductible Compensation
 
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.
   
Pay Disparity
 
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;
       If   any   problematic   pay   practices   or   pay-for-performance   concerns   have   been   identified   at   the   company;   and
       The   level   of   shareholder   support   for   the   company's   pay   programs.
 
Generally vote against proposals calling for the company to use the pay disparity analysis or pay ratio in a specific way to set or limit executive pay.

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   51 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Pay for Performance/Performance-Based Awards
 
 
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.
   
In general, vote for the shareholder proposal if the company does not meet both of the above two steps.
 
Pay for Superior Performance
 
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.
 
Consider the following factors in evaluating this proposal:
 
       What   aspects   of   the   company’s   annual   and   long-term   equity   incentive   programs   are   performance   driven?
 
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?
       Can   shareholders   assess   the   correlation   between   pay   and   performance   based   on   the   current   disclosure?
       What   type   of   industry   and   stage   of   business   cycle   does   the   company   belong   to?

 
Pre-Arranged Trading Plans (10b5-1 Plans)
 
 
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:
   
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   52 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       Adoption,   amendment,   or   termination   of   a   10b5-1   Plan   must   be   disclosed   within   two   business   days   in   a   Form   8-K;
 
Amendment   or   early   termination   of   a   10b5-1   Plan   is   allowed   only   under   extraordinary   circumstances,   as   determined   by   the   board;
       Ninety   days   must   elapse   between   adoption   or   amendment   of   a   10b5-1   Plan   and   initial   trading   under   the   plan;
       Reports   on   Form   4   must   identify   transactions   made   pursuant   to   a   10b5-1   Plan;
       An   executive   may   not   trade   in   company   stock   outside   the   10b5-1   Plan.
 
Trades   under   a   10b5-1   Plan   must   be   handled   by   a   broker   who   does   not   handle   other   securities   transactions   for   the   executive.

Prohibit CEOs from Serving on Compensation Committees
 
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:
   
Recoupment of Incentive or Stock Compensation in Specified Circumstances
 
 
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.
   
In considering whether to support such shareholder proposals, ISS will take into consideration the following factors:
 
       If   the   company   has   adopted   a   formal   recoupment   policy;
 
 
The   rigor   of   the   recoupment   policy   focusing   on   how   and   under   what   circumstances   the   company   may   recoup   incentive   or   stock   compensation;
       Whether   the   company   has   chronic   restatement   history   or   material   financial   problems;
       Whether   the   company’s   policy   substantially   addresses   the   concerns   raised   by   the   proponent;
       Disclosure   of   recoupment   of   incentive   or   stock   compensation   from   senior   executives   or   lack   thereof;   or
       Any   other   relevant   factors.
 
Severance Agreements for Executives/Golden Parachutes
 
 
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.
 
Vote case-by-case on proposals to ratify or cancel golden parachutes. An acceptable parachute should include, but is not limited to, the following:
 
       The   triggering   mechanism   should   be   beyond   the   control   of   management;
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   53 of 69
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
 
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.
 

Share Buyback Holding Periods
 
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.
 
Supplemental Executive Retirement Plans (SERPs)
 
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 .
   
Tax Gross-Up Proposals
 
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.
   
Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity
 
 
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 following factors will be considered:
 
 
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.
 
Generally vote for proposals seeking a policy that prohibits acceleration of the vesting of equity awards to senior executives in the event of a change in control (except for pro rata vesting considering the time elapsed and attainment of any related performance goals between the award date and the change in control).
 
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   54 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
6.  
SOCIAL/ENVIRONMENTAL ISSUES
 
Global Approach
 
Issues covered under the policy include a wide range of topics, including consumer and product safety, environment and energy, labor standards and human rights, workplace and board diversity, and corporate political issues. While a variety of factors goes into each analysis, the overall principle guiding all vote recommendations focuses on how the proposal may enhance or protect shareholder value in either the short or long term.
 
 
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;
       Whether   the   proposal's   request   is   unduly   burdensome   (scope   or   timeframe)   or   overly   prescriptive;
 
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.

 
Animal Welfare
 
Animal Welfare Policies
 
 
General   Recommendation : Generally   vote   for   proposals   seeking   a   report   on   a   company’s   animal   welfare   standards,   unless:
   
       The   company   has   already   published   a   set   of   animal   welfare   standards and   monitors   compliance;
       The   company’s   standards   are   comparable   to   industry   peers;   and
       There   are   no   recent,   significant   fines   or   litigation   related   to   the   company’s   treatment   of   animals.
 
Animal Testing
 
 
General   Recommendation : Generally   vote   against   proposals   to   phase   out   the   use   of   animals   in   product   testing,   unless:
   
       The   company   is   conducting   animal   testing   programs   that   are   unnecessary   or   not   required   by   regulation;
 
The   company   is   conducting   animal   testing   when   suitable   alternatives   are   commonly   accepted   and   used   by   industry   peers;   or
       There   are   recent,   significant   fines   or   litigation   related   to   the   company’s   treatment   of   animals.
 
Animal Slaughter
 
 
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.
   
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   55 of 69
   
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
Vote case-by-case on proposals requesting a report on the feasibility of implementing CAK methods at company and/or supplier operations considering the availability of existing research conducted by the company or industry groups on this topic and any fines or litigation related to current animal processing procedures at the company.
 

Consumer Issues
 
Genetically Modified Ingredients
 
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.
   
 
Vote case-by-case on proposals asking for a report on the feasibility of labeling products containing GE ingredients, taking into account:
 
       The   potential   impact   of   such   labeling   on   the   company's   business;
 
The   quality   of   the   company’s   disclosure   on   GE   product   labeling,   related   voluntary   initiatives,   and   how   this   disclosure   compares   with   industry   peer   disclosure;   and
       Company’s   current   disclosure   on   the   feasibility   of   GE   product   labeling.
 

Generally vote against proposals seeking a report on the social, health, and environmental effects of genetically modified organisms (GMOs). Studies of this sort are better undertaken by regulators and the scientific community.
 

Generally vote against proposals to eliminate GE ingredients from the company's products, or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company’s products. Such decisions are more appropriately made by management with consideration of current regulations.
 

Reports on Potentially Controversial Business/Financial Practices
 
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:
 
   
       Whether   the   company   has   adequately   disclosed   mechanisms   in   place   to   prevent   abuses;
       Whether   the   company   has   adequately   disclosed   the   financial   risks   of   the   products/practices   in   question;
       Whether   the   company   has   been   subject   to   violations   of   related   laws   or   serious   controversies;   and
       Peer   companies’   policies/practices   in   this   area.
 

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation
 
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
   
Vote case-by-case on proposals requesting that a company report on its product pricing or access to medicine policies, considering:
 

       The   nature   of   the   company’s   business   and   the   potential   for   reputational   and   market   risk   exposure;
       Existing   disclosure   of   relevant   policies;
       Deviation   from   established   industry   norms;
       Relevant   company   initiatives   to   provide   research   and/or   products   to   disadvantaged   consumers;
       Whether   the   proposal   focuses   on   specific   products   or   geographic   regions;   and
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   56 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
       The   potential   burden   and   scope   of   the   requested   report.
 
Generally vote for proposals requesting that a company report on the financial and legal impact of its prescription drug reimportation policies unless such information is already publicly disclosed.
 
Generally vote against proposals requesting that companies adopt specific policies to encourage or constrain prescription drug reimportation. Such matters are more appropriately the province of legislative activity and may place the company at a competitive disadvantage relative to its peers.
 
Product Safety and Toxic/Hazardous Materials
 
 
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   has   not   been   recently   involved   in   relevant   significant   controversies,   fines,   or   litigation.
 
Vote case-by-case on resolutions requesting that companies develop a feasibility assessment to phase-out of certain toxic/hazardous materials, or evaluate and disclose the potential financial and legal risks associated with utilizing certain materials, considering:
 
 
The   company’s   current   level   of   disclosure   regarding   its   product   safety   policies,   initiatives   and   oversight   mechanisms;
       Current   regulations   in   the   markets   in   which   the   company   operates; and
       Recent   significant   controversies,   litigation,   or   fines   stemming   from   toxic/hazardous   materials   at   the   company.   Generally   vote   against   resolutions   requiring   that   a   company   reformulate   its   products.
 
Tobacco-Related Proposals
 
General   Recommendation : Vote   case-by-case   on   resolutions   regarding   the   advertisement   of   tobacco   products,   considering:
 
       Recent   related   fines,   controversies,   or   significant   litigation;
       Whether   the   company   complies   with   relevant   laws   and   regulations   on   the   marketing   of   tobacco;
       Whether   the   company’s   advertising   restrictions   deviate   from   those   of   industry   peers;
 
Whether   the   company   entered   into   the   Master   Settlement   Agreement,   which   restricts   marketing   of   tobacco   to   youth;   and
       Whether   restrictions   on   marketing   to   youth   extend   to   foreign   countries.   Vote   case-by-case   on   proposals   regarding   second-hand   smoke,   considering;
       Whether   the   company   complies   with   all   laws   and   regulations;
 
The   degree   that   voluntary   restrictions   beyond   those   mandated   by   law   might   hurt   the   company’s   competitiveness;   and
       The   risk   of   any   health-related   liabilities.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   57 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Generally vote against resolutions to cease production of tobacco-related products, to avoid selling products to tobacco companies, to spin-off tobacco-related businesses, or prohibit investment in tobacco equities. Such business decisions are better left to company management or portfolio managers.
 
Generally vote against proposals regarding tobacco product warnings. Such decisions are better left to public health authorities.
 
Climate Change
 
Climate Change/Greenhouse Gas (GHG) Emissions
 
 
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;
       The   company’s   level   of   disclosure   is   at   least   comparable   to   that   of   industry   peers;   and
 
There   are   no   significant   controversies,   fines,   penalties,   or   litigation   associated   with   the   company’s   environmental   performance.
 
Generally vote for proposals requesting a report on greenhouse gas (GHG) emissions from company operations and/or products and operations, unless:
 
 
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;
       The   company's   level   of   disclosure   is   comparable   to   that   of   industry   peers;   and
       There   are   no   significant,   controversies ,   fines,   penalties,   or   litigation   associated   with   the   company's   GHG   emissions.
 
Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations, taking into account:
 
       Whether   the   company   provides   disclosure   of   year-over-year   GHG   emissions   performance   data;
       Whether   company   disclosure   lags   behind   industry   peers;
       The   company's   actual   GHG   emissions   performance;
       The   company's   current   GHG   emission   policies,   oversight   mechanisms,   and   related   initiatives;   and
 
Whether   the   company   has   been   the   subject   of   recent,   significant   violations,   fines,   litigation,   or   controversy   related   to   GHG   emissions.
 
Energy Efficiency
 
 
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
       The   proponent   requests   adoption   of   specific   energy   efficiency   goals   within   specific   timelines.
 
Renewable Energy
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   58 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
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.
 
Generally vote against proposals requesting that the company invest in renewable energy resources. Such decisions are best left to management’s evaluation of the feasibility and financial impact that such programs may have on the company.
 
Diversity
 
Board Diversity  
 
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.
 
Vote case-by-case   on   proposals   asking   a   company   to   increase   the   gender   and   racial   minority   representation   on   its   board,   taking   into   account:
 
 
The   degree   of   existing   gender   and   racial   minority   diversity   on   the   company’s   board   and   among   its   executive   officers;
       The   level   of   gender   and   racial   minority   representation   that   exists at   the   company’s   industry   peers;
       The   company’s   established   process   for   addressing   gender   and   racial   minority   board representation;
       Whether   the   proposal   includes   an   overly   prescriptive   request   to   amend   nominating   committee   charter   language;
       The   independence   of   the   company’s   nominating   committee;
       Whether   the   company   uses   an   outside   search   firm   to   identify   potential   director   nominees;   and
       Whether   the   company   has   had   recent   controversies,   fines,   or   litigation   regarding   equal   employment   practices.
 
Equality of Opportunity
 
 
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:
 
       The   company   publicly   discloses   equal   opportunity   policies   and   initiatives   in   a   comprehensive   manner;
       The   company   already   publicly   discloses   comprehensive   workforce   diversity   data;   and
       The   company   has   no   recent   significant   EEO-related   violations   or   litigation.
 
Generally vote against proposals seeking information on the diversity efforts of suppliers and service providers. Such requests may pose a significant burden on the company.
 
Gender Identity, Sexual Orientation, and Domestic Partner Benefits
 
 
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.
   
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   59 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
Generally vote against proposals to extend company benefits to, or eliminate benefits from domestic partners. Decisions regarding benefits should be left to the discretion of the company.
 
Environment and Sustainability
 
Facility and Workplace Safety
 
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;
       Recent   significant   controversies,   fines,   or   violations   related   to   workplace   health   and   safety;   and
       The   company's   workplace   health   and   safety   performance   relative   to   industry   peers.
 
Vote case-by-case on resolutions requesting that a company report on safety and/or security risks associated with its operations and/or facilities, considering:
 
       The   company’s   compliance   with   applicable   regulations   and   guidelines;
 
 
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 Environmental Proposals and Community Impact Assessments
 
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:
   
       Current   disclosure   of   applicable   policies   and   risk   assessment   report(s)   and   risk   management   procedures;
 
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;
       The   nature,   purpose,   and   scope   of   the   company’s   operations   in   the   specific   region(s);
       The   degree   to   which   company   policies   and   procedures   are   consistent   with   industry   norms;   and
       The   scope   of   the   resolution.
 

Hydraulic Fracturing
 
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:
       The   company's   current   level   of   disclosure   of   relevant   policies   and   oversight   mechanisms;
       The   company's   current   level   of   such   disclosure   relative   to   its   industry   peers;
       Potential   relevant   local,   state,   or   national   regulatory   developments;   and
       Controversies,   fines,   or   litigation   related   to   the   company's   hydraulic   fracturing   operations.
 
Operations in Protected Areas
 
 
General   Recommendation : Generally   vote   for   requests   for   reports   on   potential   environmental   damage   as   a   result   of company operations in protected regions, unless:
   
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   60 of 69
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       Operations   in   the   specified   regions   are   not   permitted   by   current   laws   or   regulations;
       The   company   does   not   currently   have   operations   or   plans   to   develop   operations   in   these   protected   regions;   or
 
The   company’s   disclosure   of   its   operations   and   environmental   policies   in   these   regions   is   comparable   to   industry   peers.
 
Recycling
 
General   Recommendation Vote   case-by-case   on   proposals   to   report   on   an   existing   recycling   program,   or   adopt   a   new   recycling   program,   taking   into   account:
   
       The   nature   of   the   company’s   business;
       The   current   level   of   disclosure   of   the   company's   existing   related   programs;
       The   timetable   and   methods   of   program   implementation   prescribed   by   the   proposal;
       The   company’s   ability   to   address   the   issues   raised   in   the   proposal;   and
       How   the   company's   recycling   programs   compare   to   similar   programs   of   its   industry   peers.
 
Sustainability Reporting
 
 
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.
 
Water Issues
 
 
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;
       The   potential   financial   impact   or   risk   to   the   company   associated   with   water-related   concerns   or   issues;   and
 
Recent,   significant   company   controversies,   fines,   or   litigation   regarding   water   use   by   the   company   and   its   suppliers.
 
General Corporate Issues
 
Charitable Contributions
 
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.

Data Security, Privacy, and Internet Issues
 
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  
 
© 2015 ISS | Institutional Shareholder Services   61 of 69
   
 
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
 
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;
       Applicable   market-specific   laws   or   regulations   that   may   be   imposed   on   the   company;   and
       Controversies,   fines,   or   litigation   related   to   data   security,   privacy,   freedom   of   speech,   or   Internet   censorship.
 
Environmental, Social, and Governance (ESG) Compensation-Related Proposals
 
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
 
       The   company's   current   level   of   disclosure   regarding   its   environmental   and   social   performance.
 

Human Rights, Labor Issues, and International Operations
 
Human Rights Proposals
 
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.
   
Vote case-by-case on proposals to implement company or company supplier labor and/or human rights standards and policies, considering:
 
       The   degree   to   which   existing   relevant   policies   and   practices   are   disclosed;
       Whether   or   not   existing   relevant   policies   are   consistent   with   internationally   recognized   standards;
       Whether   company   facilities   and   those   of   its   suppliers   are   monitored   and   how;
       Company   participation   in   fair   labor   organizations   or   other   internationally   recognized   human   rights   initiatives;
 
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   scope   of   the   request;   and
       Deviation   from   industry   sector   peer   company   standards   and   practices.
 

Vote case-by-case on proposals requesting that a company conduct an assessment of the human rights risks in its operations or in its supply chain, or report on its human rights risk assessment process, considering:
 
 
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
       Whether   the   proposal   is   unduly   burdensome   or   overly   prescriptive.
 
Operations in High Risk Markets
 
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;
       Current   disclosure   of   applicable   risk   assessment(s)   and   risk   management   procedures;
       Compliance   with   U.S.   sanctions   and   laws;
       Consideration   of   other   international   policies,   standards,   and   laws;   and
 
Whether   the   company   has   been   recently   involved   in   recent,   significant   controversies,   fines   or   litigation   related   to   its   operations   in   "high-risk"   markets.
 
Outsourcing/Offshoring
 
General   Recommendation: Vote   case-by-case   on   proposals   calling   for   companies   to   report   on   the   risks   associated   with   outsourcing/plant   closures,   considering:
   
       Controversies   surrounding   operations   in   the   relevant   market(s);
       The   value   of   the   requested   report   to   shareholders;
 
The   company’s   current   level   of   disclosure   of   relevant   information   on   outsourcing   and   plant   closure   procedures;   and
       The   company’s   existing   human   rights   standards   relative   to   industry   peers.
 

Weapons and Military Sales
 
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.
   
Generally vote against proposals asking a company to cease production or report on the risks associated with the use of depleted uranium munitions or nuclear weapons components and delivery systems, including disengaging from current and proposed contracts. Such contracts are monitored by government agencies, serve multiple military and non-military uses, and withdrawal from these contracts could have a negative impact on the company’s business.
 
Political Activities
 
Lobbying
 
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   current   disclosure   of   relevant   lobbying   policies,   and   management   and   board   oversight;
 
The   company’s   disclosure   regarding   trade   associations   or   other   groups   that   it   supports,   or   is   a   member   of,   that   engage   in   lobbying   activities;   and

 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   63 of 69
   
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
       Recent   significant   controversies,   fines,   or   litigation   regarding   the   company’s   lobbying-related   activities.
 
Political Contributions
 
General   Recommendation: Generally   vote   for   proposals   requesting   greater   disclosure   of   a   company's   political   contributions   and   trade   association   spending   policies   and   activities,   considering:
 
General   Recommendation :  

 
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.
 
Vote against proposals barring a company from making political contributions. Businesses are affected by legislation at the federal, state, and local level; barring political contributions can put the company at a competitive disadvantage.
 
Vote against proposals to publish in newspapers and other media a company's political contributions. Such publications could present significant cost to the company without providing commensurate value to shareholders.
 
Political Ties
 
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.
 
Vote against proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or investment bankers that have prior government service and whether such service had a bearing on the business of the company. Such a list would be burdensome to prepare without providing any meaningful information to shareholders.
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   64 of 69
   
 
 

 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
7.  
MUTUAL FUND PROXIES
 
Election of Directors
 
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.
   
Converting Closed-end Fund to Open-end Fund
 
General   Recommendation: Vote   case-by-case   on   conversion   proposals,   considering   the   following   factors:
 
       Past   performance   as   a   closed-end   fund;
       Market   in   which   the   fund   invests;
       Measures   taken   by   the   board   to   address   the   discount;   and
       Past   shareholder   activism,   board   activity,   and   votes   on   related   proposals.

Proxy Contests
 
General   Recommendation: Vote   case-by-case   on   proxy   contests,   considering   the   following   factors:
   
       Past   performance   relative   to   its   peers;
       Market   in   which   fund   invests;
       Measures   taken   by   the   board   to   address   the   issues;
       Past   shareholder   activism,   board   activity,   and   votes   on   related   proposals;
       Strategy   of   the   incumbents   versus   the   dissidents;
       Independence   of   directors;
       Experience   and   skills   of   director   candidates;
       Governance   profile   of   the   company;
       Evidence   of   management   entrenchment.
 
Investment Advisory Agreements
 
General   Recommendation: Vote   case-by-case   on   investment   advisory   agreements,   considering   the   following   factors:
   
       Proposed   and   current   fee   schedules;
       Fund   category/investment   objective;
       Performance   benchmarks;
       Share   price   performance   as   compared   with   peers;
       Resulting   fees   relative   to   peers;
       Assignments   (where   the   advisor   undergoes   a   change   of   control).
 
Approving New Classes or Series of Shares
 
 
General   Recommendation :   Vote   for   the   establishment   of   new   classes   or   series   of   shares.
 
 
Preferred Stock Proposals
 
General   Recommendation: Vote   case-by-case   on   the   authorization   for   or   increase   in   preferred   shares,   considering   the   following   factors
          
               Stated   specific   financing   purpose;
 
   
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
 
       Possible   dilution   for   common   shares;
       Whether   the   shares   can   be   used   for   antitakeover   purposes.
 
1940 Act Policies
 
General   Recommendation: Vote   case-by-case   on   policies   under   the   Investment   Advisor   Act   of   1940,   considering   the   following   factors:
          
       Potential   competitiveness;
       Regulatory   developments;
       Current   and   potential   returns;   and
       Current   and   potential   risk.

Generally vote for these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with the current SEC interpretation.

Changing a Fundamental Restriction to a Nonfundamental Restriction
 
 
General   Recommendation: Vote   case-by-case   on   proposals   to   change   a   fundamental   restriction   to   a   non-   fundamental   restriction,   considering   the   following   factors:
          
General   Recommendation :  

       The   fund's   target   investments;
       The   reasons   given   by   the   fund   for   the   change;   and
 
       The   projected   impact   of   the   change   on   the   portfolio.

Change Fundamental Investment Objective to Nonfundamental
 
 
General   Recommendation:  Vote   against   proposals   to   change   a   fund’s   fundamental   investment   objective   to   non-   fundamental.
       
Name Change Proposals
 
General   Recommendation: Vote   case-by-case   on   name   change   proposals,   considering   the   following   factors:
     
       Political/economic   changes   in   the   target   market;
 
       Consolidation   in   the   target   market;   and
       Current   asset   composition.
 

Change in Fund's Subclassification
 
General   Recommendation: Vote   case-by-case   on   changes   in   a   fund's   sub-classification,   considering   the   following   factors:
          
       Potential   competitiveness;
       Current   and   potential   returns;
       Risk   of   concentration;
       Consolidation   in   target   industry.

 
Business Development Companies—Authorization to Sell Shares of Common Stock at a Price below Net Asset Value
 
 
General   Recommendation: Vote   for   proposals   authorizing   the   board   to   issue   shares   below   Net   Asset   Value   (NAV)   if:
          
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   66 of 69
   
 
 

 
 
 
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
       The   company   has   demonstrated   responsible   past   use   of   share   issuances   by   either:
       Outperforming   peers   in   its   8-digit   GICS   group   as   measured   by   one-   and   three-year   median   TSRs;   or
 
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.
 

Disposition of Assets/Termination/Liquidation
 
 
General   Recommendation: Vote   case-by-case   on   proposals   to   dispose   of   assets,   to   terminate   or   liquidate,   considering   the   following   factors:
       
       Strategies   employed   to   salvage   the   company;
       The   fund’s   past   performance;
       The   terms   of   the   liquidation.
 

Changes to the Charter Document
 
 
General   Recommendation: Vote   case-by-case   on   changes   to   the   charter   document,   considering   the   following   factors:
                     The   degree   of   change   implied   by   the   proposal;
       The   efficiencies   that   could   result;
       The   state   of   incorporation;
       Regulatory   standards   and   implications.   Vote   against   any   of   the   following   changes:
       Removal   of   shareholder   approval   requirement   to   reorganize   or   terminate   the   trust   or   any   of   its   series;
       Removal   of   shareholder   approval   requirement   for   amendments   to   the   new   declaration   of   trust;
 
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;
       Removal   of   shareholder   approval   requirement   to   engage   in   and   terminate   subadvisory   arrangements;
       Removal   of   shareholder   approval   requirement   to   change   the   domicile   of   the   fund.
 
Changing the Domicile of a Fund  
 
General   Recommendation: Vote   case-by-case   on   re-incorporations,   considering   the   following   factors:
          
       Regulations   of   both   states;
       Required   fundamental   policies   of   both   states;
 
       The   increased   flexibility   available.
 

Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval
 
 
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.
          
 
Enabling the financial community to manage governance risk for the benefit of shareholders  
 
© 2015 ISS | Institutional Shareholder Services   67 of 69
   
 
 

 
 
 
 
2015 U.S. Summary Proxy Voting Guidelines
 
 
Distribution Agreements
 
 
General   Recommendation: Vote   case-by-case   on   distribution   agreement   proposals,   considering   the   following   factors:
     
       Fees   charged   to   comparably   sized   funds   with   similar   objectives;
       The   proposed   distributor’s   reputation   and   past   performance;
       The   competitiveness   of   the   fund   in   the   industry;
       The   terms   of   the   agreement.
 

Master-Feeder Structure
 
General   Recommendation :   Vote   for   the   establishment   of   a   master-feeder   structure.
 
Mergers
 
 
General   Recommendation: Vote   case-by-case   on   merger   proposals,   considering   the   following   factors:
        
       Resulting   fee   structure;
       Performance   of   both   funds;
       Continuity   of   management   personnel;
       Changes   in   corporate   governance   and   their   impact   on   shareholder   rights.
 

Shareholder Proposals for Mutual Funds
 

Establish Director Ownership Requirement
 
 
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.
          
Reimburse Shareholder for Expenses Incurred
 
 
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.
       
Terminate the Investment Advisor
 
General   Recommendation: Vote   case-by-case   on   proposals   to   terminate   the   investment   advisor,   considering   the   following   factors:
     

       Performance   of   the   fund’s   Net   Asset   Value   (NAV);
       The   fund’s   history   of   shareholder   relations;
       The   performance   of   other   funds   under   the   advisor’s   management.
 
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
 
 
This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.
 

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer, securities, financial products or instruments or trading strategies.
 

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.
 

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.
 

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.



 

 
 
 
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© 2015 ISS | Institutional Shareholder Services   69 of 69
 
 
 

 
 
SERIES PORTFOLIOS TRUST (the “Trust”)
PART C

(Weiss Funds)

OTHER INFORMATION

Item 28.  Exhibits

(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.
 
 
1

 
 
(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.

Item 29.  Persons Controlled by or Under Common Control with Registrant

No person is directly or indirectly controlled by or under common control with the Registrant.

Item 30.  Indemnification

Reference is made to Article VII, Section 2 of the Registrant’s Agreement and Declaration of Trust, Article VI of Registrant’s Bylaws, and Paragraph 8 of the Distribution Agreement.  With respect to the Registrant, the general effect of these provisions is to indemnify any person (Trustee, officer, employee or agent, among others) who was or is a party to any proceeding by reason of their actions performed in their official or duly authorized capacity on behalf of the Trust.  With respect to the Distributor, the general effect of the relevant provisions is to indemnify those entities for claims arising out of any untrue statement or material fact contained in the Funds’ Registration Statement, reports to shareholders or advertising and sales literature.

Pursuant to Rule 484 under the Securities Act of 1933, as amended, (the “1933 Act”) the Registrant furnishes the following undertaking:  “Insofar as indemnification for liability arising under the 1933 Act may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.”

Item 31.  Business and Other Connections of Investment Adviser

The response to this Item is incorporated by reference to the Adviser’s Uniform Application for Investment Adviser Registration (“Form ADV”) on file with the SEC.  The Adviser’s Form ADV may be obtained, free of charge, at the SEC’s website at www.adviserinfo.sec.gov.
 
 
2

 
 
Item 32.  Principal Underwriter.

(a)      Quasar Distributors, LLC, the Registrant’s principal underwriter, acts as principal underwriter for the following investment companies:

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
 
 
3

 

(b)    To the best of Registrant’s knowledge, the directors and executive officers of Quasar Distributors, LLC are as follows:
 
Name and Principal
Business Address
Position and Offices with Quasar
Distributors, LLC
Positions and Offices
with Registrant
James R. Schoenike (1)
President, Board Member
None
Andrew M. Strnad (2)
Vice President, Secretary
None
Joe Neuberger (1)
Board Member
None
Robert Kern (1)
Board Member
None
Susan LaFond (1)
Vice President, Treasurer
None
Joseph Bree (1)
Chief Financial Officer, Board Member
None
Teresa Cowan (1)
Senior Vice President, Assistant Secretary
None
Brett Scribner (3)
Assistant Treasurer
None
(1) This individual is located at 615 East Michigan Street, Milwaukee, Wisconsin, 53202.
(2) This individual is located at 10 West Market Street, Indianapolis, Indiana, 46204.
(3) This individual is located at 800 Nicollet Mall, Minneapolis, Minnesota, 55402.

(c)       Not applicable.

Item 33.  Location of Accounts and Records

The books and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 are maintained at the following locations:
 
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
 
Item 34.  Management Services
 
 
Not applicable.
 
 
Item 35.  Undertakings
 
 
Not applicable.
 
 
4

 
 
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it has duly caused this Registration Statement on Form N-1A to be signed below on its behalf by the undersigned, duly authorized, in the City of Milwaukee and State of Wisconsin, on November 5, 2015.
 
 
Series Portfolios Trust
 
     
 
By:     /s/ John J. Hedrick*                   
 
 John J. Hedrick
 
 
 President
 


Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the 5th day of November 2015.

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
 
 
 
 

 

INDEX TO EXHIBITS

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



6
 


SERIES PORTFOLIOS TRUST

INVESTMENT ADVISORY AGREEMENT

With

Weiss Multi-Strategy Advisers LLC

THIS INVESTMENT ADVISORY AGREEMENT is made as of the 3rd day of November, 2015, by and between Series Portfolios Trust, a Delaware statutory trust (the “Trust”), on behalf of the series listed on Schedule A, which may be amended from time to time (each a “Fund” and together, the “Funds”), and Weiss Multi-Strategy Advisers LLC, a limited liability company (the “Adviser”).

WITNESSETH:

WHEREAS , the Trust is an open-end management investment company, registered as such under the Investment Company Act of 1940 (the “Investment Company Act”); and

WHEREAS , each   Fund listed on Schedule A is a series of the Trust having separate assets and liabilities; and

WHEREAS , the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”) and is engaged in the business of providing investment advisory services as an independent contractor; and

WHEREAS , the Trust desires to retain the Adviser to render advice and services to the Fund pursuant to the terms and provisions of this Agreement, and the Adviser desires to furnish said advice and services;

NOW, THEREFORE , in consideration of the covenants and the mutual promises hereinafter set forth, the parties to this Agreement, intending to be legally bound hereby, mutually agree as follows:

1. APPOINTMENT OF ADVISER. The Trust hereby employs the Adviser and the Adviser hereby accepts such employment, to render investment advice and related services with respect to the assets of the Fund for the period and on the terms set forth in this Agreement, subject to the supervision and direction of the Trust’s Board of Trustees (the “Board,” “Trustees,” or “Board of Trustees”).

2. DUTIES OF ADVISER.

(a) GENERAL DUTIES. The Adviser shall act as investment adviser to the Fund and, in such capacity, shall provide investment advisory services to the Fund, including managing the investment and reinvestment of the assets of the Fund,  in accordance with the investment objectives, policies and restrictions of the Fund as set forth in the Fund’s prospectus and statement of additional information and such other applicable limitations, policies and procedures as the trustees of the Board of Trustees may impose from time to time and provide in writing to the Adviser (collectively, the “Investment Policies”).  In providing such services, the Adviser shall at all times adhere to the applicable provisions and restrictions contained in the federal securities laws, applicable state securities laws, Subchapter M, and any provisions as may become applicable, of the Internal Revenue Code of 1986 (the “Code”), and any applicable provisions of the Uniform Commercial Code and other applicable law.
 
 
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Without limiting the generality of the foregoing, the Adviser shall: (i) make decisions with respect to the investment of the Fund’s assets and the purchase and sale of portfolio securities and other investments for the Fund, including the taking of such steps as may be necessary to implement such decisions ( i.e ., placing the orders); (ii) manage and oversee the investments of the Fund, subject to the ultimate supervision and direction of the Trust’s Board of Trustees; (iii) vote proxies for the Fund and file beneficial ownership reports required by Section 13(d) of the Securities Exchange Act of 1934 (the “1934 Act”) for the Fund; (iv) maintain or cause to be maintained records relating to the advisory services provided by the Adviser hereunder required to be prepared and maintained by the Adviser or the Fund pursuant to applicable law; (v) furnish reports, statements and other data on securities, economic conditions and other matters related to the investment of the Fund’s assets which the officers of the Trust may reasonably request; and (vi) render to the Trustees such periodic and special reports with respect to the Fund’s investment activities as the Board of Trustees may reasonably request, including at least one in-person appearance annually before the Board of Trustees.  It is understood and agreed that the Adviser shall have no obligation to initiate litigation on behalf of the Fund.

(b) BROKERAGE. The Adviser shall be responsible for decisions to buy and sell securities for the Fund, for broker-dealer selection, and for negotiation of brokerage commission rates, provided that the Adviser shall not direct orders to an affiliated person of the Adviser without general prior authorization to use such affiliated broker or dealer from the Trust’s Board of Trustees.  In selecting a broker-dealer to execute each particular transaction, the Adviser may take the following factors, among others, into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Fund on a continuing basis. The price to the Fund in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the portfolio execution services offered.

Subject to such policies as the Board of Trustees of the Trust may determine and consistent with Section 28(e) of the 1934 Act, the Adviser shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Fund to pay a broker or dealer that provides (directly or indirectly) brokerage or research services to the Adviser an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities to clients for which it exercises investment discretion. Subject to the same policies and legal provisions, the Adviser is further authorized to allocate the orders placed by it on behalf of the Fund to such brokers or dealers who also provide research or statistical material, or other services, to the Trust, the Adviser, or any affiliate of either. Such allocation shall be in such amounts and proportions as the Adviser shall determine, and the Adviser shall report on such allocations to the Trustees as required, indicating the broker-dealers to whom such allocations have been made and the basis therefor.

When the Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as of other clients, the Adviser, to the extent permitted by applicable laws and regulations, may aggregate orders of the Fund and those other clients for the purchase or sale of the security. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other clients.

The Trust authorizes and empowers the Adviser to open and maintain trading accounts in the name of the Fund and to execute for the Fund as its agent and attorney-in-fact such agreements with such brokers or dealers as the Adviser shall select as provided herein.  The Adviser shall cause or direct, as applicable, all securities and other property purchased or sold for the Fund to be settled at the place of business of the Custodian or as the Custodian shall direct.  All securities and other property of the Fund shall remain in the direct or indirect custody of the Custodian except as otherwise authorized by the Board.
 
 
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The Adviser further shall have the authority to instruct the Custodian to pay cash for securities and other property delivered to the Custodian for the Fund and deliver securities and other property against payment for the Fund, and such other authority granted by the Trust or the Board from time to time.  The Adviser shall not have authority to cause the Custodian to deliver securities and other property or pay cash to the Adviser except as expressly provided herein.

3. REPRESENTATIONS OF THE ADVISER.

(a) The Adviser shall use its best judgment and efforts in rendering the advice and services to the Fund as contemplated by this Agreement.

(b) The Adviser shall maintain all licenses and registrations necessary to perform its duties hereunder in good order.

(c) The Adviser shall, in performing its duties hereunder, at all times comply with the Advisers Act and the Investment Company Act, and any rules and regulations adopted thereunder; any other applicable state or federal law, and any rules and regulations adopted thereunder; and any applicable self-regulatory organization regulations.

(d) The Adviser shall, in providing its services hereunder, conduct its operations at all times in conformance with Subchapter M, and any provisions as may become applicable, of the Code, and any rules and regulations adopted thereunder.

(e) The Adviser shall maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board of Trustees in connection with its approval of this Agreement, unless a different amount is thereafter approved or consented to by the Board.

4. INDEPENDENT CONTRACTOR. The Adviser shall, for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided herein or otherwise authorized to do so, have no authority to act for or represent the Trust or the Fund in any way, or in any way be deemed an agent for the Trust or for the Fund. It is expressly understood and agreed that the services to be rendered by the Adviser to the Fund under the provisions of this Agreement are not to be deemed exclusive, and that the Adviser may give advice and take action with respect to other clients, including any other registered investment company or series thereof or affiliates of the Adviser, that may be similar or different from that given to the Fund.

5. ADVISER’S PERSONNEL. The Adviser shall, at its own expense, maintain such staff and employ or retain such personnel and consult with such other persons as it shall from time to time determine to be necessary to the performance of its obligations under this Agreement. Without limiting the generality of the foregoing, the staff and personnel of the Adviser shall be deemed to include any compliance staff and personnel required by the Adviser and reasonably requested by the Board of Trustees.
 
 
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6. EXPENSES.

(a) With respect to the operation of the Fund, the Adviser shall be responsible for (i) the Fund’s organizational expenses and only its allocable portion of Trust organization expenses; (ii) providing the personnel, office space and equipment reasonably necessary to perform its obligations hereunder; (iii) the expenses of printing and distributing extra copies of the Fund’s prospectus, statement of additional information, and sales and advertising materials (but not the legal, auditing or accounting fees attendant thereto) to prospective investors (but not to existing shareholders) to the extent such expenses are not covered by any applicable plan adopted pursuant to Rule 12b-1 under the Investment Company Act (each, a “12b-1 Plan”); (iv) the costs of any special Board of Trustees meetings or shareholder meetings convened for the primary benefit of the Adviser   and attendance at required annual Board meeting(s); (v) the costs associated with any supplements to the Fund’s registration statement created at the Adviser’s request for the primary benefit of the Adviser; and (vi) any costs of liquidating or reorganizing the Fund (unless such cost is otherwise allocated by the Board of Trustees).  If the Adviser has agreed to limit the operating expenses of the Fund, the Adviser also shall be responsible on a monthly basis for any operating expenses that exceed the agreed upon expense limit, subject to the terms of such agreement.

(b) The Fund is responsible for and has assumed the obligation for payment of all of its expenses, other than as stated in Subparagraph 6(a) above, including but not limited to: fees and expenses incurred in connection with the issuance, registration and transfer of its shares; brokerage and commission expenses; all expenses of transfer, receipt, safekeeping, servicing and accounting for the cash, securities and other property of the Trust for the benefit of the Fund including all fees and expenses of its custodian, shareholder services agent and accounting services agent; interest charges on any borrowings; costs and expenses of pricing and calculating its daily net asset value and of maintaining its books of account required under the Investment Company Act; taxes, if any; a pro rata portion of expenditures in connection with meetings of the Fund’s shareholders and the Board of Trustees that are properly payable by the Fund; its pro rata portion of salaries and expenses of officers of  the Trust, including without limitation the Trust’s Chief Compliance Officer, and fees and expenses of members of the Board of Trustees or members of any advisory board or committee who are not members of, affiliated with or interested persons of the Adviser; insurance premiums on property or personnel of the Fund which inure to its benefit, including liability and fidelity bond insurance; the cost of preparing and printing reports, proxy statements, prospectuses and statements of additional information of the Fund or other communications for distribution to existing shareholders; legal, auditing and accounting fees; its pro rata portion of trade association dues or educational program expenses determined appropriate by the Board of Trustees; fees and expenses (including legal fees) of registering and maintaining registration of its shares for sale under applicable securities laws; all expenses of maintaining and servicing shareholder accounts, including all charges for transfer, shareholder recordkeeping, dividend disbursing, redemption, and other agents for the benefit of the Fund, if any; and all other charges and costs of its operation plus any extraordinary and non-recurring expenses, except as herein otherwise prescribed.

(c) The Adviser may voluntarily or contractually absorb certain Fund expenses.

(d) To the extent the Adviser incurs any costs by assuming expenses which are an obligation of the Fund as set forth herein, the Fund shall promptly reimburse the Adviser for such costs and expenses, except to the extent the Adviser has otherwise agreed to bear such expenses. To the extent the services for which the Fund is obligated to pay are performed by the Adviser, the Adviser shall be entitled to recover from such Fund to the extent of the Adviser’s actual costs for providing such services. In determining the Adviser’s actual costs, the Adviser may take into account an allocated portion of the salaries and overhead of personnel performing such services.
 
 
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(e) To the extent that the Adviser pays fees from its own legitimate profits that are in addition to any Fund distribution or servicing fees to financial intermediaries, including without limitation banks, broker-dealers, financial advisors, or pension administrators, for sub-administration, sub-transfer agency or any other shareholder servicing or distribution services associated with shareholders whose shares are held in omnibus or other group accounts, the Adviser shall report such payments regularly to the Trust, including the amounts paid and the relevant financial institutions.

7. INVESTMENT ADVISORY AND MANAGEMENT FEE.

(a) The Fund shall pay to the Adviser, and the Adviser agrees to accept, as full compensation for all services furnished or provided to such Fund pursuant to this Agreement, an annual management fee at the rate set forth in Schedule A to this Agreement.

(b) The management fee shall be accrued daily by the Fund and paid to the Adviser on the first business day of the succeeding month.

(c) The initial fee under this Agreement shall be payable on the first business day of the first month following the effective date of this Agreement and shall be prorated as set forth below. If this Agreement becomes effective or is terminated prior to the end of any month, the fee to the Adviser shall be prorated for the portion of any month in which this Agreement is in effect which is not a complete month according to the proportion which the number of calendar days in the month during which the Agreement is in effect bears to the number of calendar days in the month.  In the event the Agreement is terminated, such fee shall be payable within ten (10) days after the date of termination.

(d) The fee payable to the Adviser under this Agreement will be reduced to the extent of any receivable owed by the Adviser to the Fund and as required under any expense limitation applicable to the Fund.

(e) The Adviser voluntarily may reduce any portion of the compensation or reimbursement of expenses due to it pursuant to this Agreement and may agree to make payments to limit the expenses which are the responsibility of the Fund under this Agreement. Any such reduction or payment shall be applicable only to such specific reduction or payment and shall not constitute an agreement to reduce any future compensation or reimbursement due to the Adviser hereunder or to continue future payments. Any such reduction will be agreed to prior to accrual of the related expense or fee and will be estimated daily and reconciled and paid on a monthly basis.

(f) Any such reductions made by the Adviser in its fees or payment of expenses which are the Fund’s obligation are subject to recoupment, if so requested by the Adviser, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the recoupment) does not exceed the applicable limitation on Fund expenses. Under the expense limitation agreement, the Adviser may recoup fees waived and expenses reimbursed in any fiscal year of the Fund over the following three fiscal years.  Any such recoupment is contingent upon Board of Trustees review and approval at the time the recoupment is made and such recoupment must be made in accordance with applicable guidance of the staff of the Securities and Exchange Commission. Such recoupment may not be paid prior to the Fund’s payment of current ordinary operating expenses.

(g) The Adviser may agree not to require payment of any portion of the compensation or reimbursement of expenses otherwise due to it pursuant to this Agreement. Any such agreement shall be applicable only with respect to the specific items covered thereby and shall not constitute an agreement not to require payment of any future compensation or reimbursement due to the Adviser hereunder.
 
 
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8. NO SHORTING; NO BORROWING. The Adviser agrees that neither it nor any of its officers or employees shall take any short position in the shares of the Fund. The Adviser agrees that neither it nor any of its officers or employees shall borrow from the Fund or pledge or use the Fund’s assets in connection with any borrowing not directly for the Fund’s benefit. For this purpose, failure to pay any amount due and payable to the Fund for a period of more than thirty (30) days shall constitute a borrowing.

9. CONFLICTS WITH TRUST’S GOVERNING DOCUMENTS AND APPLICABLE LAWS.    Nothing herein contained shall be deemed to require the Trust or the Fund to take any action contrary to the Trust’s Agreement and Declaration of Trust and By-Laws, each as may be amended and restated from time to time, or any applicable statute or regulation, or to relieve or deprive the Board of Trustees of its responsibility for and control of the conduct of the affairs of the Trust and Fund. In this connection, the Adviser acknowledges that the Board of Trustees retains ultimate plenary authority over the Fund and may take any and all actions necessary and reasonable to protect the interests of shareholders.

10. REPORTS AND ACCESS; APPROVAL. (a)  The Adviser agrees to supply such information to the Fund’s administrator and to permit such compliance inspections by the Fund’s administrator as shall be reasonably necessary to permit the administrator to satisfy its obligations and respond to the reasonable requests of the Board of Trustees.

(b) The Trust agrees to provide the Adviser such information about the Trust and the Fund as is necessary and appropriate for the Adviser to perform its services hereunder.  Such information includes, but is not limited to, the Trust’s Agreement and Declaration of Trust and Bylaws, each as may be amended and restated from time to time, and all compliance policies and procedures of the Trust.  The Trust agrees to provide to the Adviser promptly any amendment to the foregoing and, if any such amendment would materially affect the services to be provided by, or the liability of, the Adviser hereunder, the Trust agrees to provide the amendment to the Adviser prior to its adoption by the Board of Trustees.

(c) The Trust represents and warrants that this Agreement has been authorized by the Board of Trustees and by shareholders in accordance with applicable law.

11. ADVISOR’S LIABILITIES AND INDEMNIFICATION.

(a) The Adviser shall have responsibility for the accuracy and completeness of the statements in the Fund’s offering materials (including the prospectus, the statement of additional information, advertising and sales materials) relating to (i) the Adviser and its affiliates, (ii) the Fund’s investment strategies and related risks, and (iii) other information, in each case only if supplied by the Adviser for inclusion therein.

(b) Except as otherwise provided herein, the Adviser shall be liable to the Fund for any loss (including brokerage charges) incurred by the Fund as a result of any improper investment made by the Adviser in contradiction of the Investment Policies, other than losses or damages relating to lost profits.

(c) In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the obligations or duties hereunder on the part of the Adviser, the Adviser shall not be subject to liability to the Trust or the Fund or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering the Adviser’s services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security or other asset by the Fund.  Notwithstanding the foregoing, federal securities laws and certain state laws impose liabilities under certain circumstances on persons who have acted in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which the Trust, the Fund or any shareholder of the Fund may have under any federal securities law or state law.
 
 
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(d) Each party to this Agreement shall indemnify and hold harmless the other party and the shareholders, directors, members, managers, agents, officers and employees of the other party (any such person, an “Indemnified Party”) against any loss, liability, claim, damage or expense (including the reasonable cost of investigating and defending any alleged loss, liability, claim, damage or expenses and reasonable counsel fees incurred in connection therewith) (collectively, “Losses”) arising out of the Indemnifying Party’s willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties hereunder; provided, however, that nothing herein shall be deemed to protect any Indemnified Party against any Loss to which such Indemnified Party would otherwise be subject by reason of such party’s willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties under this Agreement.

(e) No provision of this Agreement shall be construed to protect any Trustee or officer of the Trust, or officer of the Adviser, from liability in violation of Sections 17(h) and (i) of the Investment Company Act.

12. NON-EXCLUSIVITY; TRADING FOR ADVISOR’S OWN ACCOUNT. The Trust’s employment of the Adviser is not an exclusive arrangement. The Trust may from time to time employ other individuals or entities to furnish it with the services provided for herein. Likewise, the Adviser may act as investment adviser for any other person, and shall not in any way be limited or restricted from buying, selling or trading any securities or other assets for its or their own accounts or the accounts of others for whom it or they may be acting; provided, however, that the Adviser expressly represents that it will undertake no activities which, in its judgment, will adversely affect the performance of its obligations to the Fund under this Agreement; and provided further that the Adviser will adopt a code of ethics governing employee trading and trading for proprietary accounts that conforms to the requirements of Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act and, as  approved by the Board of Trustees.

13. TRANSACTIONS WITH OTHER INVESTMENT ADVISERS. The Adviser is not, at the time of this agreement, an affiliated person of any investment adviser responsible for providing advice with respect to any other series of the Trust, or of any promoter, underwriter, officer, director, member of an advisory board or employee of any other series of the Trust.  The Adviser shall not consult with the investment adviser of any other series of the Trust concerning transactions for the Fund or any other series of the Trust.

14. TERM.   This Agreement shall become effective at the time the Fund commences operations pursuant to an effective amendment to the Trust’s Registration Statement under the Securities Act of 1933, as amended, and shall remain in effect for a period of two (2) years unless sooner terminated as hereinafter provided. This Agreement shall continue in effect thereafter for additional periods not exceeding one (l) year so long as such continuation is approved at least annually by (i) the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Fund and (ii) the vote of a majority of the Trustees of the Trust who are not parties to this Agreement nor interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval. The terms “majority of the outstanding voting securities” and “interested persons” shall have the meanings set forth in the Investment Company Act.

15. INTELLECTUAL PROPERTY LICENSE.   For so long as this Agreement remains effective, the Trust and the Fund shall have a non-transferable, non-exclusive license to use the names “ Weiss Multi-Asset Advisers LLC ”, “ Weiss Alternative Balanced Risk Fund ”, www.gweiss.com , and the name of a series of the Trust (other than the Fund) that may become subject to this Agreement (collectively, the “Adviser Names”) solely in connection with the Trust and the Fund. The Trust and the Fund acknowledge that the Adviser Names and any derivatives or combinations thereof are the sole and exclusive property of the Adviser (or the Adviser’s related entities), and the Trust and the Fund agree that they will not contest ownership or validity of the Adviser Names.  The Trust and the Fund will use the Adviser Names according to the Adviser’s trademark standards.  The Adviser makes no representations or warranties in respect of the relative superiority of its rights in the Adviser Names to the rights of any third party in the Adviser Names.   Notwithstanding anything herein to the contrary, the Adviser shall have no liability to the Trust or the Fund for or in respect of any claim by any third party that the Trust or the Fund’s use of the Adviser names infringes upon or otherwise violates any proprietary or other rights of such third party. Within sixty (60) days from such time as this Agreement shall no longer be in effect, the Trust and Fund shall cease to use the Adviser Names and any other name connected with the Adviser.
 
 
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16. TERMINATION; NO ASSIGNMENT.

(a) This Agreement may be terminated by the Trust on behalf of the Fund at any time without payment of any penalty, by the Board of Trustees or by vote of a majority of the outstanding voting securities of the Fund, upon not more than sixty (60) days’ written notice to the Adviser, and by the Adviser upon sixty (60) days’ written notice to the Fund. In the event of a termination, the Adviser shall cooperate in the orderly transfer of the Fund’s affairs and, at the request of the Board of Trustees, transfer, at the Fund’s expense, any and all books and records of the Fund maintained by the Adviser on behalf of the Fund.

(b) This Agreement shall terminate automatically in the event of any assignment thereof, as defined in the Investment Company Act.

17. NO THIRD PARTY BENEFICIARIES.   Nothing in this Agreement, express or implied, shall be deemed to confer on any person or entity other than the parties hereto any benefits, rights, remedies, obligations or liabilities under or by reason of this Agreement.  No person or entity, including, without limitation, shareholders of the Trust or the Fund, shall be deemed to be a third-party beneficiary of this Agreement.

18. NONPUBLIC PERSONAL INFORMATION . Notwithstanding any provision herein to the contrary, the Adviser agrees on behalf of itself and its managers, members, officers, and employees (1) to treat confidentially and as proprietary information of the Trust (a) all records and other information relative to the Fund’s prior, present, or potential shareholders (and clients of said shareholders) and (b) any Nonpublic Personal Information, as defined under Section 248.3(t) of Regulation S-P (“Regulation S-P”), promulgated under the Gramm-Leach-Bliley Act (the “G-L-B Act”); and (2) except after prior notification to and approval in writing by the Trust, not to use such records and information for any purpose other than the performance of its responsibilities and duties hereunder, or as otherwise permitted by Regulation S-P or the G-L-B Act, and if in compliance therewith, the privacy policies adopted by the Trust and communicated in writing to the Adviser.  Such written approval shall not be unreasonably withheld by the Trust and may not be withheld where the Adviser may be exposed to civil or criminal contempt or other proceedings for failure to comply after being requested to divulge such information by duly constituted authorities. Nothing herein will apply to information that is or becomes publicly available without breach of any obligation owed by the Adviser under this Agreement, is independently developed by the Adviser without reference to information required to be treated confidentially, or is used by the Adviser to enforce its rights under this Agreement, and nothing herein will be deemed to prevent the Adviser from disclosing any information pursuant to applicable law, rule or regulation or in response to a request from a regulatory, self-regulatory or other  authority with appropriate jurisdiction over the Adviser.

19. ANTI-MONEY LAUNDERING COMPLIANCE. The Adviser acknowledges that, in compliance with the Bank Secrecy Act, as amended, the USA PATRIOT Act, and any implementing regulations thereunder (together, “AML Laws”), the Trust has adopted an Anti-Money Laundering Policy. The Adviser represents that has adopted an Anti-Money Laundering Policy and agrees to comply with its Anti-Money Laundering Policy and the AML Laws, as the same may apply to the Adviser, now and in the future. The Adviser further agrees to provide to the Trust and/or the administrator such reports, certifications and contractual assurances as may be reasonably requested by the Trust. The Trust may disclose information regarding the Adviser to governmental and/or regulatory or self-regulatory authorities to the extent required by applicable law or regulation and may file reports with such authorities as may be required by applicable law or regulation.
 
 
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20. CERTIFICATIONS; DISCLOSURE CONTROLS AND PROCEDURES. The Adviser acknowledges that, in compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the implementing regulations promulgated thereunder, the Trust and the Fund are required to make certain certifications and have adopted disclosure controls and procedures. To the extent reasonably requested by the Trust, the Adviser agrees to use its best efforts to assist the Trust and the Fund in complying with the Sarbanes-Oxley Act and implementing the Trust’s disclosure controls and procedures. The Adviser agrees to inform the Trust of any material development related to the Fund that the Adviser reasonably believes is relevant to the Fund’s certification obligations under the Sarbanes-Oxley Act.

21. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby.

22. CAPTIONS. The captions in this Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

23. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the Investment Company Act and the Advisers Act and any rules and regulations promulgated thereunder.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all on the day and year first above written.

 
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
 
 
 
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SCHEDULE A

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

 
 
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DISTRIBUTION AGREEMENT
 
THIS AGREEMENT is made and entered into as of this 15th day of September, 2015, by and between Series Portfolios Trust , a Delaware statutory  trust (the “ Trust ”) and Quasar Distributors, LLC , a Delaware limited liability company (the “ Distributor ”).   Weiss Multi-Strategy Advisers LLC , a Delaware limited liability company and the investment advisor to the Trust (the “ Advisor ”), is a party hereto with respect to Sections 3 F. and 6 only.

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “ 1940 Act ”), as an open-end management investment company, and is authorized to issue shares of beneficial interest (“ Shares ”) in separate series, with each such series representing interests in a separate portfolio of securities and other assets;
 
WHEREAS, the Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), and is a member of the Financial Industry Regulatory Authority (“ FINRA ”);
 
WHEREAS, the Trust desires to retain the Distributor as principal underwriter in connection with the offer and sale of the Shares of each series of the Trust listed on Exhibit A hereto (as amended from time to time) (each a “ Fund ”); and
 
WHEREAS, this Agreement has been approved by a vote of the Trust’s board of trustees (the “ Board ”), including its disinterested trustees voting separately, in conformity with Section 15(c) of the 1940 Act.
 
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
 
1.             Appointment of Quasar as Distributor .  The Trust hereby appoints the Distributor as its agent for the sale and distribution of Shares of the Fund in jurisdictions wherein the Shares may be legally offered for sale, on the terms and conditions set forth in this Agreement, and the Distributor hereby accepts such appointment and shall perform the services and duties set forth in this Agreement.  The services and duties of the Distributor shall be confined to those matters expressly set forth herein, and no implied duties are assumed by or may be asserted against the Distributor hereunder.
 
2.             Services and Duties of the Distributor .
 
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.
 
 
 
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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.
 
 
2

 
 
 
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.
 
3.             Representations and Covenants of the Trust .
 
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.
 
 
3

 
 
 
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.
 
 
4

 
 
 
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.
 
4.             Additional Representations and Covenants of the Distributor .  The Distributor hereby represents, warrants and covenants to the Trust, which representations, warranties and covenants shall be deemed to be continuing throughout the term of this Agreement, that:
 
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;
 
 
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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.
 
5.             Standard of Care .
 
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
 
 
 
6

 
 
 
 
 
  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.  
 
6.             Compensation .  The Distributor shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on Exhibit B hereto (as amended from time to time).  The Distributor shall also be compensated for such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, and reproduction charges) as are reasonably incurred by the Distributor in performing its duties hereunder.  The Trust shall pay all such fees and reimbursable expenses within 30 calendar days following receipt of the billing notice, except for any fee or expense subject to a good faith dispute.  The Trust shall notify the Distributor in writing within 30 calendar days following receipt of each invoice if the Trust is disputing any amounts in good faith. The Trust shall pay such disputed amounts within 10 calendar days of the day on which the parties agree to the amount to be paid.  With the exception of any fee or expense the Trust is disputing in good faith as set forth above, unpaid invoices shall accrue a finance charge of 1½% per month after the due date.  Notwithstanding anything to the contrary, amounts owed by the Trust to the Distributor shall only be paid out of the assets and property of the particular Fund involved.  Such fees and expenses shall be paid to Distributor by the Trust from Rule 12b-1 fees payable by the appropriate Fund or, if the Fund does not have a Rule 12b-1 plan, or if Rule 12b-1 fees are not sufficient to pay such fees and expenses, or if the Rule 12b-1 plan is discontinued, or if the Advisor otherwise determines that Rule 12b-1 fees shall not, in whole or in part, be used to pay Distributor, the Advisor shall be responsible for the payment of the amount of such fees and expenses not covered by Rule 12b-1 payments.
 
7.            Expenses .
 
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.
 
 
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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.
 
8.             Indemnification .
 
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).
 
 
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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).
 
 
9

 
 
 
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.
 
 
10

 
 
 
9.             Proprietary and Confidential Information .  The Distributor agrees on behalf of itself and its managers, 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 the Distributor 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 the Distributor or any of its employees, agents or representatives, and information that was already in the possession of the Distributor prior to receipt thereof from the Trust or its agent, shall not be subject to this paragraph.
 
Further, the Distributor will adhere to the privacy policies adopted by the Trust pursuant to Title V of the Gramm-Leach-Bliley Act, as may be modified from time to time.  In this regard, the Distributor shall have in place and maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to the Trust and its shareholders.
 
10.             Compliance with Laws .  The Trust has and retains primary responsibility for all compliance matters relating to the Fund, including but not limited to compliance with the 1940 Act, the Internal Revenue Code of 1986, the Sarbanes-Oxley Act of 2002, the USA Patriot Act of 2001 and the policies and limitations of the Fund relating to its portfolio investments as set forth in its Prospectus and statement of additional information.  The Distributor’s services hereunder shall not relieve the Trust of its responsibilities for assuring such compliance or the Board of Trustee’s oversight responsibility with respect thereto.
 
11.             Term of Agreement; Amendment; Assignment .
 
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.
 
 
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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.
 
12.             Early Termination .  In the absence of any material breach of this Agreement, should the Trust elect to terminate this Agreement prior to the end of the term, the Trust shall pay the following fees:
 
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.
 
13.             Duties in the Event of Termination .  In the event that, in connection with termination, a successor to any of the Distributor’s duties or responsibilities hereunder is designated by the Trust by written notice to the Distributor, the Distributor will promptly, upon such termination and at the expense of the Trust, transfer to such successor all relevant books, records, correspondence, and other data established or maintained by the Distributor under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which the Distributor has maintained the same, the Trust shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from the Distributor’s personnel in the establishment of books, records, and other data by such successor.  If no such successor is designated, then such books, records and other data shall be returned to the Trust.
 
 
12

 
 
14.             Governing Law .  This   Agreement shall be construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles.  To the extent that the applicable laws of the State of Wisconsin, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the SEC thereunder.
 
15.             No Agency Relationship .  Nothing herein contained shall be deemed to authorize or empower either party to act as agent for the other party to this Agreement, or to conduct business in the name, or for the account, of the other party to this Agreement.
 
16.             Services Not Exclusive .  Nothing in this Agreement shall limit or restrict the Distributor from providing services to other parties that are similar or identical to some or all of the services provided hereunder.
 
17.             Invalidity .  Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.
 
18.             Notices .   Any notice required or permitted to be given by any party to the others shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service, or three days after sent by registered or certified mail, postage prepaid, return receipt requested, or on the date sent and confirmed received by facsimile transmission to the other parties’ respective addresses as set forth below:
 
Notice to the Distributor shall be sent to:

Quasar Distributors, LLC
Attn:  President
615 East Michigan Street
Milwaukee, Wisconsin  53202

notice to the Trust shall be sent to:

Series Portfolios Trust
U.S. Bancorp Fund Services, LLC
ATTN: Fund Administration
615 E. Michigan Street
Milwaukee, WI 53202

and notice to the Advisor shall be sent to:

Weiss Multi-Strategy Advisers LLC
320 Park Avenue, 20 th Floor
New York, NY 10022


 
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19.             Multiple Originals .   This   Agreement may be executed on two or more counterparts, each of which when so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.
 

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.
 

 
The parties hereby agree that the Distribution Services provided by Quasar Distributors, LLC will commence on or after September 15, 2015.
 
SERIES PORTFOLIOS TRUST                                                                                     QUASAR DISTRIBUTORS, LLC
 

 
By:                                                                                                         By:                                                                                                         
   
Name:  John J. Hedrick Name:  James R. Schoenike
   
Title:  President Title:  President
 
 WEISS MULTI-STRATEGY ADVISERS LLC
(with respect to Sections 3 F. and  6 only)

 
By:________________________________
 
Name:_____________________________
 
Title:______________________________
 
 
 
14

 
 
Exhibit A
to the
Distribution Agreement

Fund Names

Separate Series of Series Portfolios Trust

Name of Series
Weiss Alternative Balance Fund
 
 
 
 
A-1

 


Exhibit B
to the
Distribution Agreement – Fee Schedule at September, 2015

Regulatory Distribution Annual Services Per Fund*
$__ basis point on average net assets over $__ million plus
Base annual fee:
§  
$_____ per fund
 
Default sales loads and distributor concession, if applicable, are paid to Quasar.
 
Standard Advertising Compliance Review
§  
$___ 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.)

Expedited Advertising Compliance Review
§  
$___ 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.)

Licensing of Investment Advisor’s Staff (if desired)
§  
$___ 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

Fund Fact Sheets
§  
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

Out-of-Pocket Expenses
Reasonable out-of-pocket expenses incurred by the Distributor in connection with activities primarily intended to result in the sale of shares, including, but not limited to:
§  
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


* Subject to annual CPI increase - All Urban Consumers - U.S. City Average.
Fees are calculated pro rata and billed monthly.

 
B-1 


 
CUSTODY AGREEMENT
 
 
THIS AGREEMENT is made and entered into as of  September 15, 2015, by and between SERIES PORTFOLIOS TRUST , a Delaware statutory trust (the “Trust”), and U.S. BANK NATIONAL ASSOCIATION , a national banking association organized and existing under the laws of the United States of America with its principal place of business in Minneapolis, Minnesota (the “Custodian”).
 
 
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is authorized to issue shares of beneficial interest in separate series, with each such series representing interests in a separate portfolio of securities and other assets;
 
 
WHEREAS, the Custodian is a bank having the requirements prescribed in Section 26(a)(1) of the 1940 Act; and
 
 
WHEREAS, the Trust desires to retain the Custodian to act as custodian of the cash and securities of each series of the Trust listed on the exhibits hereto (as amended from time to time) (each a “Fund” and collectively, the “Funds”); and
 
 
WHEREAS, the Board of Trustees of the Trust has delegated to the Custodian the responsibilities set forth in Rule 17f-5(c) under the 1940 Act and the Custodian is willing to undertake the responsibilities and serve as the foreign custody manager for the Trust.
 
 
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
 
ARTICLE I
 
CERTAIN DEFINITIONS
 
Whenever used in this Agreement, the following words and phrases shall have the meanings set forth below unless the context otherwise requires:
 
1.01   “Authorized Person” means any Officer or person who has been designated as such by written notice and named in Exhibit A and delivered to the Custodian by the Trust, or if the Trust has notified the Custodian in writing that it has an authorized investment manager or other agent, delivered to the Custodian by the Trust’s investment advisor or other agent.  Such Officer or person shall continue to be an Authorized Person until such time as the Custodian receives Written Instructions from the Trust or the Trust’s investment advisor or other agent that any such person is no longer an Authorized Person.
 
1.02   “Board of Trustees” shall mean the trustees from time to time serving under the Trust’s declaration of trust, as amended from time to time.
 
 
1

 
 
1.03   “Book-Entry System” shall mean a federal book-entry system as provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFR Part 350, or in such book-entry regulations of federal agencies as are substantially in the form of such Subpart O.
 
1.04   “Business Day” shall mean any day recognized as a settlement day by The New York Stock Exchange, Inc. and any other day for which the Trust computes the net asset value of Shares of the Fund.
 
1.05   “Eligible Foreign Custodian” has the meaning set forth in Rule 17f-5(a)(1), including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository.
 
1.06   “Eligible Securities Depository” has the meaning set forth in Rule 17f-7(b)(1) under the 1940 Act.
 
1.07   “Foreign Securities” means any investments of a Fund (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect such Fund’s transactions in such investments.
 
1.08   “Fund Custody Account” shall mean any of the accounts in the name of the Fund, which is provided for in Section 3.2 below.
 
1.09   “IRS” shall mean the Internal Revenue Service.
 
1.10   “FINRA” shall mean the Financial Industry Regulatory Authority, Inc.
 
1.11   “Loan” means any U.S. dollar denominated commercial loan, or participation therein, made by a bank or other financial institution that by its terms provides for payments of principal and/or interest, including discount obligations and payment- in-kind obligations, acquired by any Fund from time to time.
 
1.12   “Loan Checklist” means a list delivered to the Custodian in connection with delivery of a Loan to the Custodian that identifies the items contained in the related Loan File.
 
1.13   Loan Documents ” means those documents to the extent delivered to the Custodian.
 
1.14   “Loan File” means, with respect to each Loan delivered to the Custodian, each of the Loan Documents identified on the related Loan Checklist.
 
1.15   “Noteless Loan” means a Loan with respect to which (i) the related loan agreement does not require the obligor to execute and deliver an Underlying Note to evidence the indebtedness created under such Loan and (ii) no Underlying Notes are outstanding with respect to the portion of the Loan transferred to a Fund.
 
 
2

 
 
1.16   “Officer” shall mean the Chairman, President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer of the Trust.
 
1.17   “Participation” means an interest in a Loan that is acquired indirectly by way of a participation from a selling institution.
 
1.18   “Proper Instructions” shall mean Written Instructions.
 
1.19   “SEC” shall mean the U.S. Securities and Exchange Commission.
 
1.20   “Securities” shall include, without limitation, common and preferred stocks, bonds, call options, put options, debentures, notes, bank certificates of deposit, bankers' acceptances, Loans, mortgage-backed securities or other obligations, and any certificates, receipts, warrants or other instruments or documents representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or any similar property or assets that the Custodian or its agents have the facilities to clear and service.
 
1.21   “Securities Depository” shall mean The Depository Trust Company and any other clearing agency registered with the SEC under Section 17A of the Securities Exchange Act of 1934, as amended (the “1934 Act”), which acts as a system for the central handling of Securities where all Securities of any particular class or series of an issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of the Securities.
 
1.22   “Shares” shall mean, with respect to a Fund, the units of beneficial interest issued by the Trust on account of the Fund.
 
1.23   “Sub-Custodian” shall mean and include (i) any branch of a “U.S. bank,” as that term is defined in Rule 17f-5 under the 1940 Act, and (ii) any “Eligible Foreign Custodian” having a contract with the Custodian which the Custodian has determined will provide reasonable care of assets of the Fund based on the standards specified in Section 3.3 below.  Such contract shall be in writing and shall include provisions that provide: (i) for indemnification or insurance arrangements (or any combination of the foregoing) such that the Fund will be adequately protected against the risk of loss of assets held in accordance with such contract; (ii) that the Foreign Securities will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Sub-Custodian or its creditors except a claim of payment for their safe custody or administration, in the case of cash deposits, liens or rights in favor of creditors of the Sub-Custodian arising under bankruptcy, insolvency, or similar laws; (iii) that beneficial ownership for the Foreign Securities will be freely transferable without the payment of money or value other than for safe custody or administration; (iv) that adequate records will be maintained identifying the assets as belonging to the Fund or as being held by a third party for the benefit of the Fund; (v) that the Fund’s independent public accountants will be given access to those records or confirmation of the contents of those records; and (vi) that the Fund will receive periodic reports with respect to the safekeeping of the Fund’s assets, including, but not limited to, notification of any transfer to or from a Fund's account or a third party account containing assets held for the benefit of the Fund.  Such contract may contain, in lieu of any or all of the provisions specified in (i)-(vi) above, such other provisions that the Custodian determines will provide, in their entirety, the same or a greater level of care and protection for Fund assets as the specified provisions.
 
 
3

 
 
1.24   “Trade Confirmation” means a confirmation to the Custodian from the Trust (or Fund) of a Fund’s acquisition of a Loan, and setting forth applicable information with respect to such Loan, which confirmation may be in the form of Exhibit B attached hereto and made a part hereof, subject to such changes or additions as may be agreed to by, or in such other form as may be agreed to by, the Custodian and the Trust from time to time.
 
1.25   “Underlying Note” means the one or more promissory notes executed by an obligor evidencing a Loan.
 
1.26   “Written Instructions” shall mean (i) written communications actually received by the Custodian and signed by an Authorized Person, (ii) communications by facsimile or electronic e-mail or any other such system from one or more persons reasonably believed by the Custodian to be an Authorized Person.
 
ARTICLE II.
 
APPOINTMENT OF CUSTODIAN
 
2.01   Appointment .  The Trust hereby appoints the Custodian as custodian of all Securities and cash owned by or in the possession of the Fund at any time during the period of this Agreement, on the terms and conditions set forth in this Agreement, and the Custodian hereby accepts such appointment and agrees to perform the services and duties set forth in this Agreement.  The Trust hereby delegates to the Custodian, subject to Rule 17f-5(b), the responsibilities with respect to the Fund’s Foreign Securities, and the Custodian hereby accepts such delegation as foreign custody manager with respect to the Fund.  The services and duties of the Custodian shall be confined to those matters expressly set forth herein, and no implied duties are assumed by or may be asserted against the Custodian hereunder.
 
2.02   Documents to be Furnished .  The following documents, including any amendments thereto, will be provided contemporaneously with the execution of the Agreement to the Custodian by the Trust:
 
(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
 
 
 
4

 
 
 
(f)  
An executed authorization required by the Shareholder Communications Act of 1985, attached hereto as Exhibit C .
 

2.03   Notice of Appointment of Transfer Agent .  The Trust agrees to notify the Custodian in writing of the appointment, termination or change in appointment of any transfer agent of the Fund.
 
ARTICLE III.
 
CUSTODY OF CASH AND SECURITIES
 
3.01   Segregation .  All Securities and non-cash property held by the Custodian for the account of the Fund (other than Securities maintained in a Securities Depository, Eligible Securities Depository or Book-Entry System) shall be physically segregated from other Securities and non-cash property in the possession of the Custodian (including the Securities and non-cash property of the other series of the Trust, if applicable) and shall be identified as subject to this Agreement.
 
3.02   Fund Custody and Cash Accounts .  As to each Fund, the Custodian shall open and maintain in its trust department: (x) a custody account in the name of the Trust coupled with the name of the Fund, subject only to draft or order of the Custodian, in which the Custodian shall enter and carry all Securities (other than Loans), cash and other assets of such Fund which are delivered to it and (y) cash accounts, including any subaccounts, in the name of the Trust coupled with the name of the Fund, subject only to draft or order of the Custodian, in which the Custodian shall enter and carry all principal and interest received with respect to the Loans.  The amounts held in the cash accounts shall be transferred in the respective Fund’s custody account on a daily basis.
 
3.03   Appointment of Agents.
 
(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).
 
 
 
5

 
 
(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.
 
 
6

 
 
3.04   Delivery of Assets to Custodian .
 
(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.
 
3.05   Securities Depositories and Book-Entry Systems .  The Custodian may deposit and/or maintain Securities (excluding Loans) of the Fund in a Securities Depository or in a Book-Entry System, subject to the following provisions:
 
(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.
 
 
7

 
 
(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.
 
3.06   Disbursement of Moneys from Fund Custody Account .  Upon receipt of Proper Instructions, the Custodian shall disburse moneys from the Fund Custody Account but only in the following cases:
 
(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;
 
 
8

 
 
(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.
 
3.07   Delivery of Securities from Fund Custody Account .  Upon receipt of Proper Instructions, the Custodian shall release and deliver, or cause the Sub-Custodian to release and deliver, Securities from the Fund Custody Account or Loan Documents but only in the following cases:
 
(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;
 
 
 
9

 
 
(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
 
 
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(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.
 
3.08   Actions Not Requiring Proper Instructions .  Unless otherwise instructed by the Trust, the Custodian shall with respect to all Securities held for the Fund:
 
 
(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.
 
3.09   Registration and Transfer of Securities .  All Securities (other than Loans) held for the Fund that are issued or issuable only in bearer form shall be held by the Custodian in that form, provided that any such Securities shall be held in a Book-Entry System if eligible therefor.  All other Securities (other than Loans) held for the Fund may be registered in the name of the Fund, the Custodian, a Sub-Custodian or any nominee thereof, or in the name of a Book-Entry System, Securities Depository or any nominee of either thereof.  The records of the Custodian with respect to foreign securities of the Fund that are maintained with a Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers shall identify those securities as belonging to the Fund.  The Trust shall furnish to the Custodian appropriate instruments to enable the Custodian to hold or deliver in proper form for transfer, or to register in the name of any of the nominees referred to above or in the name of a Book-Entry System or Securities Depository, any Securities (other than Loans) registered in the name of the Fund.
 
 
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3.10   Records .
 
(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.
 
3.11   Fund Reports by Custodian .  The Custodian shall furnish the Trust with a daily activity statement and a summary of all transfers to or from each Fund Custody Account on the day following such transfers.  At least monthly, the Custodian shall furnish the Trust with a detailed statement of the Securities and moneys held by the Custodian and the Sub-Custodians for the Fund under this Agreement.
 
3.12   Other Reports by Custodian .  As the Trust may reasonably request from time to time, the Custodian shall provide the Trust with reports on the internal accounting controls and procedures for safeguarding Securities which are employed by the Custodian or any Sub-Custodian.
 
3.13   Proxies and Other Materials .  The Custodian shall cause all proxies relating to Securities which are not registered in the name of the Fund to be promptly executed by the registered holder of such Securities, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Trust such proxies, all proxy soliciting materials and all notices relating to such Securities.  With respect to the foreign Securities, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject to the laws, regulations and practical constraints that may exist in the country where such securities are issued.  The Trust acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Trust to exercise shareholder rights.
 
3.14   Information on Corporate Actions .  The Custodian shall promptly deliver to the Trust all information received by the Custodian and pertaining to Securities being held by the Fund with respect to optional tender or exchange offers, calls for redemption or purchase, or expiration of rights.  If the Trust desires to take action with respect to any tender offer, exchange offer or other similar transaction, the Trust shall notify the Custodian at least three Business Days prior to the date on which the Custodian is to take such action.  The Trust will provide or cause to be provided to the Custodian all relevant information for any Security which has unique put/option provisions at least three Business Days prior to the beginning date of the tender period.
 
 
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ARTICLE IV.
 
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
 
4.01   Purchase of Securities .
 
(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.
 
 
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(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.
 
4.02   Liability for Payment in Advance of Receipt of Securities Purchased .  In any and every case where payment for the purchase of Securities for the Fund is made by the Custodian in advance of receipt of the Securities purchased and in the absence of specified Written Instructions to so pay in advance, the Custodian shall be liable to the Fund for such payment.
 
 
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4.03   Sale of Securities .  Promptly upon each sale of Securities by 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 sold, (iii) the date of sale and settlement, (iv) the sale price per unit, (v) the total amount payable upon such sale, and (vi) the person to whom such Securities are to be delivered.  Upon receipt of the total amount payable to the Fund as specified in such Written Instructions, the Custodian shall deliver such Securities to the person specified in such Written Instructions.  Subject to the foregoing, the Custodian may accept payment in such form as shall be satisfactory to it, and may deliver Securities and arrange for payment in accordance with the customs prevailing among dealers in Securities.
 
4.04   Delivery of Securities Sold .  Notwithstanding Section 4.03 above or any other provision of this Agreement, the Custodian, when instructed to deliver Securities or Loan Documents against payment, shall be entitled, if in accordance with generally accepted market practice, to deliver such Securities or Loan Documents prior to actual receipt of final payment therefor.  In any such case, the Fund shall bear the risk that final payment for such Securities may not be made or that such Securities may be returned or otherwise held or disposed of by or through the person to whom they were delivered, and the Custodian shall have no liability for any for the foregoing.
 
4.05   Payment for Securities Sold .  In its sole discretion and from time to time, the Custodian may credit the Fund Custody Account, prior to actual receipt of final payment thereof, with (i) proceeds from the sale of Securities which it has been instructed to deliver against payment, (ii) proceeds from the redemption of Securities or other assets of the Fund, and (iii) income from cash, Securities or other assets of the Fund.  Any such credit shall be conditional upon actual receipt by Custodian of final payment and may be reversed if final payment is not actually received in full.  The Custodian may, in its sole discretion and from time to time, permit the Fund to use funds so credited to the Fund Custody Account in anticipation of actual receipt of final payment.  Any such funds shall be repayable immediately upon demand made by the Custodian at any time prior to the actual receipt of all final payments in anticipation of which funds were credited to the Fund Custody Account.
 
4.06   Advances by Custodian for Settlement .  The Custodian may, in its sole discretion and from time to time, advance funds to the Trust to facilitate the settlement of a Fund's transactions in the Fund Custody Account.  Any such advance shall be repayable immediately upon demand made by Custodian.
 
ARTICLE V.
 
REDEMPTION OF FUND SHARES
 
5.01   Transfer of Funds .  From such funds as may be available for the purpose in the relevant Fund Custody Account, and upon receipt of Proper Instructions specifying that the funds are required to redeem Shares of the Fund, the Custodian shall wire each amount specified in such Proper Instructions to or through such bank or broker-dealer as the Trust may designate.
 
 
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5.02   No Duty Regarding Paying Banks .  Once the Custodian has wired amounts to a bank or broker-dealer pursuant to Section 5.01 above, the Custodian shall not be under any obligation to effect any further payment or distribution by such bank or broker-dealer.
 
ARTICLE VI.
 
SEGREGATED ACCOUNTS
 
6.01 Upon receipt of Proper Instructions, the Custodian shall establish and maintain a segregated account or accounts for and on behalf of the Fund, into which account or accounts may be transferred cash and/or Securities, including Securities maintained in a Depository Account:
 
(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.
 
6.02                 Each segregated account established under this Article VI shall be established and maintained for the Fund only.  All Proper Instructions relating to a segregated account shall specify the Fund.
 
ARTICLE VII.
 
COMPENSATION OF CUSTODIAN
 
7.01   Compensation .  The Custodian shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on the exhibits attached hereto (as amended from time to time).  The Custodian shall also be compensated for such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, and reproduction charges) as are reasonably incurred by the Custodian in performing its duties hereunder.  The Trust shall pay all such fees and reimbursable expenses within 30 calendar days following receipt of the billing notice, except for any fee or expense subject to a good faith dispute.  The Trust shall notify the Custodian in writing within 30 calendar days following receipt of each invoice if the Trust is disputing any amounts in good faith. The Trust shall pay such disputed amounts within 10 calendar days of the day on which the parties agree to the amount to be paid.  Notwithstanding anything to the contrary, amounts owed by the Trust to the Custodian shall only be paid out of the assets and property of the particular Fund involved.
 
 
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7.02   Overdrafts .  The Trust is responsible for maintaining an appropriate level of short term cash investments to accommodate cash outflows.  The Trust may obtain a formal line of credit for potential overdrafts of its custody account.  In the event of an overdraft or in the event the line of credit is insufficient to cover an overdraft, the overdraft amount or the overdraft amount that exceeds the line of credit will be charged in accordance with the fee schedule set forth on the exhibits attached hereto (as amended from time to time)
 
ARTICLE VIII.
 
REPRESENTATIONS AND WARRANTIES
 
8.01   Representations and Warranties of the Trust .  The Trust hereby represents and warrants to the Custodian, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
 
(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.
 
8.02   Representations and Warranties of the Custodian .  The Custodian hereby represents and warrants to the Trust, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
 
(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;
 
 
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(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.
 
ARTICLE IX.
 
 CONCERNING THE CUSTODIAN
 
9.01   Standard of Care .  The Custodian shall exercise reasonable care in the performance of its duties under this Agreement.  The Custodian 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, except a loss arising out of or relating to the Custodian’s (or a Sub-Custodian’s) refusal or failure to comply with the terms of this Agreement (or any sub-custody agreement) or from its (or a Sub-Custodian’s) bad faith, negligence or willful misconduct in the performance of its duties under this Agreement (or any sub-custody agreement).  The Custodian shall be entitled to rely on and may act upon advice of counsel on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice.  The Custodian shall promptly notify the Trust of any action taken or omitted by the Custodian pursuant to advice of counsel.
 
9.02   Actual Collection Required .  The Custodian shall not be liable for, or considered to be the custodian of, any cash belonging to the Fund or any money represented by a check, draft or other instrument for the payment of money, until the Custodian or its agents actually receive such cash or collect on such instrument.
 
9.03   No Responsibility for Title, etc.   So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received or delivered by it pursuant to this Agreement.
 
9.04   Limitation on Duty to Collect .  Custodian shall not be required to enforce collection, by legal means or otherwise, of any money or property due and payable with respect to Securities held for the Fund if such Securities are in default or payment is not made after due demand or presentation.
 
9.05   Reliance Upon Documents and Instructions .  The Custodian shall be entitled to rely upon any certificate, notice or other instrument in writing received by it and reasonably believed by it to be genuine.  The Custodian shall be entitled to rely upon any Written Instructions actually received by it pursuant to this Agreement.
 
 
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9.06   Cooperation .  The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the Trust to keep the books of account of the Fund and/or compute the value of the assets of the Fund.  The Custodian shall take all such reasonable actions as the Trust may from time to time request to enable the Trust to obtain, from year to year, favorable opinions from the Trust's independent accountants with respect to the Custodian's activities hereunder in connection with (i) the preparation of the Trust's reports on Form N-1A and Form N-SAR and any other reports required by the SEC, and (ii) the fulfillment by the Trust of any other requirements of the SEC.
 
ARTICLE X.
 
INDEMNIFICATION
 
10.01   Indemnification by Trust .  The Trust shall indemnify and hold harmless the Custodian, any Sub-Custodian and any nominee thereof (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against any and all claims, demands, losses, expenses and liabilities of any and every nature (including reasonable attorneys' fees) that an Indemnified Party may sustain or incur or that may be asserted against an Indemnified Party by any person arising directly or indirectly (i) from the fact that Securities are registered in the name of any such nominee, (ii) from any action taken or omitted to be taken by the Custodian or such Sub-Custodian (a) at the request or direction of or in reliance on the advice of the Trust, or (b) upon Proper Instructions, or (iii) from the performance of its obligations under this Agreement or any sub-custody agreement, provided that neither the Custodian nor any such Sub-Custodian shall be indemnified and held harmless from and against any such claim, demand, loss, expense or liability arising out of or relating to its refusal or failure to comply with the terms of this Agreement (or any sub-custody agreement), or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement (or any sub-custody 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 terms “Custodian” and “Sub-Custodian” shall include their respective directors, officers and employees.
 
10.02   Indemnification by Custodian .  The Custodian shall indemnify and hold harmless the Trust from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys’ fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising directly or indirectly out of any action taken or omitted to be taken by an Indemnified Party as a result of the Indemnified Party’s refusal or failure to comply with the terms of this Agreement (or any sub-custody agreement), or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement (or any sub-custody agreement).  This indemnity shall be a continuing obligation of the Custodian, its successors and assigns, notwithstanding the termination of this Agreement.  As used in this paragraph, the term “Trust” shall include the Trust’s trustees, officers and employees.
 
10.03   Security .  If the Custodian advances cash or Securities to the Fund for any purpose, either at the Trust's request or as otherwise contemplated in this Agreement, or in the event that the Custodian or its nominee incurs, in connection with its performance under this Agreement, any claim, demand, loss, expense or liability (including reasonable attorneys' fees) (except such as may arise from its or its nominee's bad faith, negligence or willful misconduct), then, in any such event, any property at any time held for the account of the Fund shall be security therefor, and should the Fund fail promptly to repay or indemnify the Custodian, the Custodian shall be entitled to utilize available cash of such Fund and to dispose of other assets of such Fund to the extent necessary to obtain reimbursement or indemnification.
 
 
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10.04   Miscellaneous.
 
(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.
 
ARTICLE XI.
 
FORCE MAJEURE
 
Neither the Custodian nor the Trust shall be 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 God; earthquakes; fires; floods; wars; civil or military disturbances; acts of terrorism; sabotage; strikes; epidemics; riots; power failures; computer failure and any such circumstances beyond its reasonable control as may cause interruption, loss or malfunction of utility, transportation, computer (hardware or software) or telephone communication service; accidents; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation; provided, however, that in the event of a failure or delay, the Custodian (i) shall not discriminate against the Fund in favor of any other customer of the Custodian in making computer time and personnel available to input or process the transactions contemplated by this Agreement, and (ii) shall use its best efforts to ameliorate the effects of any such failure or delay.
 
 
 
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ARTICLE XII.
 
PROPRIETARY AND CONFIDENTIAL INFORMATION
 
12.01   The Custodian 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 the Custodian may be exposed to civil or criminal contempt proceedings for failure to comply, (ii) when requested to divulge such information by duly constituted authorities although the Custodian will promptly report such disclosure to the Trust if disclosure is permitted by applicable law and regulation, or (iii) when so requested by the Trust.  Records and other information which have become known to the public through no wrongful act of the Custodian or any of its employees, agents or representatives, and information that was already in the possession of the Custodian prior to receipt thereof from the Trust or its agent, shall not be subject to this paragraph.
 
12.02   Further, the Custodian will adhere to the privacy policies adopted by the Trust pursuant to Title V of the Gramm-Leach-Bliley Act, as may be modified from time to time.  In this regard, the Custodian shall have in place and maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to the Trust and its shareholders.

 
ARTICLE XIII.
 
EFFECTIVE PERIOD; TERMINATION
 
13.01   Termination .  This Agreement shall become effective with respect to a Fund as of the date the applicable exhibit for such Fund is approved by the Board of Trustees of the Trust and will continue in effect for successive annual periods.   This Agreement may be terminated by either party upon giving 90 days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties. Notwithstanding the foregoing, this Agreement may be terminated by any party upon the breach of the other party of any material term of this Agreement if such breach is not cured within 15 days of notice of such breach to the breaching party.  This Agreement may not be amended or modified in any manner except by written agreement executed by USBFS and the Trust, and authorized or approved by the Board of Trustees.
 
13.02   Appointment of Successor Custodian .  If a successor custodian shall have been appointed by the Board of Trustees, the Custodian shall, upon receipt of a notice of acceptance by the successor custodian, on such specified date of termination (i) deliver directly to the successor custodian all Securities (other than Securities held in a Book-Entry System or Securities Depository) and cash then owned by the Fund and held by the Custodian as custodian, and (ii) transfer any Securities held in a Book-Entry System or Securities Depository to an account of or for the benefit of the Fund at the successor custodian, provided that the Trust shall have paid to the Custodian all fees, expenses and other amounts to the payment or reimbursement of which it shall then be entitled.  In addition, the Custodian shall, at the expense of the Trust, transfer to such successor all relevant books, records, correspondence, and other data established or maintained by the Custodian under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which the Custodian has maintained the same, the Trust shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from the Custodian’s personnel in the establishment of books, records, and other data by such successor.  Upon such delivery and transfer, the Custodian shall be relieved of all obligations under this Agreement.
 
 
21

 
 
 
13.03   Failure to Appoint Successor Custodian .  If a successor custodian is not designated by the Trust on or before the date of termination of this Agreement, then the Custodian shall have the right to deliver to a bank or trust company of its own selection, which bank or trust company (i) is a “bank” as defined in the 1940 Act, and (ii) has aggregate capital, surplus and undivided profits as shown on its most recent published report of not less than $25 million, all Securities, cash and other property held by Custodian under this Agreement and to transfer to an account of or for the Fund at such bank or trust company all Securities of the Fund held in a Book-Entry System or Securities Depository.  Upon such delivery and transfer, such bank or trust company shall be the successor custodian under this Agreement and the Custodian shall be relieved of all obligations under this Agreement.  In addition, under these circumstances, all books, records and other data of the Trust shall be returned to the Trust.

 
ARTICLE XIV.

CLASS ACTIONS

The Custodian shall use its best efforts to identify and file claims for the Fund(s) involving any class action litigation that impacts any security the Fund(s) may have held during the class period.  The Trust agrees that the Custodian may file such claims on its behalf and understands that it may be waiving and/or releasing certain rights to make claims or otherwise pursue class action defendants who settle their claims.  Further, the Trust acknowledges that there is no guarantee these claims will result in any payment or partial payment of potential class action proceeds and that the timing of such payment, if any, is uncertain.

However, the Trust may instruct the Custodian to distribute class action notices and other relevant documentation to the Fund(s) or its designee and, if it so elects, will relieve the Custodian from any and all liability and responsibility for filing class action claims on behalf of the Fund(s).
 
 
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In the event the Fund(s) are closed, the Custodian shall only file the class action claims upon written instructions by an authorized representative of the closed Fund(s).  Any expenses associated with such filing will be assessed against the proceeds received of any class action settlement.


ARTICLE XV.
 
MISCELLANEOUS
 
15.01  Compliance with Laws .  The Trust has and retains primary responsibility for all compliance matters relating to the Fund, including but not limited to compliance with the 1940 Act, the Internal Revenue Code of 1986, the Sarbanes-Oxley Act of 2002, the USA Patriot Act of 2001 and the policies and limitations of the Fund relating to its portfolio investments as set forth in its Prospectus and statement of additional information.  The Custodian’s services hereunder shall not relieve the Trust of its responsibilities for assuring such compliance or the Board of Trustee’s oversight responsibility with respect thereto.
 
15.02  Amendment .  This Agreement may not be amended or modified in any manner except by written agreement executed by the Custodian and the Trust, and authorized or approved by the Board of Trustees.
 
15.03  Assignment .  This Agreement shall extend to and be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Trust without the written consent of the Custodian, or by the Custodian without the written consent of the Trust accompanied by the authorization or approval of the Board of Trustees.
 
15.04  Governing Law .  This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to conflicts of law principles.  To the extent that the applicable laws of the State of Minnesota, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the SEC thereunder.
 
15.05   No Agency Relationship .  Nothing herein contained shall be deemed to authorize or empower either party to act as agent for the other party to this Agreement, or to conduct business in the name, or for the account, of the other party to this Agreement.
 
15.06  Services Not Exclusive .  Nothing in this Agreement shall limit or restrict the Custodian from providing services to other parties that are similar or identical to some or all of the services provided hereunder.
 
15.07  Invalidity.   Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.
 
 
23

 
 
15.08  Notices .   Any notice required or permitted to be given by either party to the other shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service, or three days after sent by registered or certified mail, postage prepaid, return receipt requested, or on the date sent and confirmed received by facsimile transmission to the other party’s address set forth below:
 
All notices to the Custodian shall be sent to:

U.S Bank, N.A.
1555 N. Rivercenter Dr., MK-WI-S302
Milwaukee, WI 53212

Attn:  Tom Fuller
Phone: 414-905-6118
Fax: 866-350-5066

If applicable, a copy of notices related to Loans or Loan Documents, to

U.S. Bank National Association
One Federal Street, 3 rd Floor
Boston, MA 02110
Ref: [_______]

and notice to the Trust shall be sent to:

Series Portfolios Trust
U.S. Bancorp Fund Services, LLC
ATTN: Fund Administration
615 E. Michigan Street
Milwaukee, WI 53202

15.09  Multiple Originals .  This Agreement may be executed on two or more counterparts, each of which when so executed shall be deemed an original, but such counterparts shall together constitute but one and the same instrument.
 
15.10   No Waiver .  No failure by either party hereto to exercise, and no delay by such party in exercising, any right hereunder shall operate as a waiver thereof.  The exercise by either party hereto of any right hereunder shall not preclude the exercise of any other right, and the remedies provided herein are cumulative and not exclusive of any remedies provided at law or in equity.
 
15.11   Rights and Obligations of Each Fund .  No Fund shall receive any rights or have any liabilities arising from any action or inaction of any other Fund of the Trust under this Agreement.
 
 
24

 
 
15.12   References to Custodian .  The Trust shall not circulate any printed matter which contains any reference to Custodian without the prior written approval of Custodian, excepting printed matter contained in the Prospectus or statement of additional information for the Fund and such other printed matter as merely identifies Custodian as custodian for the Fund.  The Trust shall submit printed matter requiring approval to Custodian in draft form, allowing sufficient time for review by Custodian and its counsel prior to any deadline for printing.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.
 
 
 
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
 

 
25

 
 
EXHIBIT A

AUTHORIZED PERSONS


Set forth below are the names and specimen signatures of the persons authorized by the series of the Trust to administer the Fund Custody Accounts.

Authorized Persons
 
Specimen Signatures
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
 
 
 
26

 
 
 
 
Exhibit B to the Series Portfolios Trust Custody Agreement
Loan Trade Confirmation

List of Data Elements for Loan Trade Confirmation


Trade Date

Issuer Description

Investment Description

CUSIP/Investment ID

Maturity Date

Coupon Rate

Currency

Quantity

Price

Trade Fees

Accrued Interest

Broker

Comments



 
27

 
 
Exhibit C

SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION

Series Portfolios Trust

The Shareholder Communications Act of 1985 requires banks and trust companies to make an effort to permit direct communication between a company which issues securities and the shareholder who votes those securities.

Unless you specifically require us to NOT release your name and address to requesting companies, we are required by law to disclose your name and address.

Your “yes” or “no” to disclosure will apply to all securities U.S. Bank holds for you now and in the future, unless you change your mind and notify us in writing.



______ 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.




Series Portfolios Trust on behalf of ______________________          
 

By:                                                                                         
 
 
Title:                                                                                        , President

 
Date:                                                                                       


 
28

 




Exhibit D to the Trust for Series Portfolios Trust
Custody Agreement –  Custody Services Fee Schedule at  September, 2015
 
 

 
Name of Series Date Added
Weiss Alternative Balanced Risk Fund on or after September 15, 2015
 
   
Annual Fee Based Upon Market Value Per Fund*
1.00 basis point on average daily market value of all long securities and cash held in the portfolio
Minimum annual fee per fund - $4,800
Plus portfolio transaction fees

Portfolio Transaction Fees
§  
$__ – 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)

A transaction is a purchase/sale of a security, free receipt/free delivery, maturity, tender or exchange.

Out-Of-Pocket Expenses
Including but not limited to expenses incurred in the safekeeping, delivery and receipt of securities, shipping, transfer fees, deposit withdrawals at custodian (DWAC) fees, SWIFT charges and extraordinary expenses based upon complexity.

Additional Services
§
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.


* Subject to annual CPI increase - All Urban Consumers - U.S. City Average.
Fees are calculated pro rata and billed monthly.



 
29

 
 
Exhibit D (continued) to the Series Portfolio Trust Custody Agreement – Global Fee Schedule at September, 2015
SPT CUSTODY AGREEMENT – GLOBAL FEE SCHEDULE GRAPHIC
 
Safekeeping and transaction fees are assessed on security and currency transactions.
Base Fee - A monthly base fee per account (fund) will apply based on the number of foreign securities held.
§  
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.

Tax Reclamation Services: Tax reclaims that have been outstanding for more than 6 (six) months with the client will be charged $50 per claim.
Out of Pocket Expenses
§  
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.

Advisor’s Signature below acknowledges approval of the fee schedules on this Exhibit D.
Weiss Multi-Strategy Advisers LLC

By:   /s/ Pierce Archer                                                         Printed Name: /s/ Pierce Archer                                             
 
 
Title:    Senior Vice President                                            Date:     11/06/2015                                                                      
 
 
 
  30
 


 
 
FUND ADMINISTRATION SERVICING AGREEMENT
 
       THIS AGREEMENT is made and entered into as of September 15, 2015, by and between SERIES PORTFOLIOS TRUST , a Delaware statutory trust, (the “Trust”) and U.S. BANCORP FUND SERVICES, LLC , a Wisconsin limited liability company (“USBFS”).
 
       WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is authorized to issue shares of beneficial interest in separate series, with each such series representing interests in a separate portfolio of securities and other assets;
 
       WHEREAS, USBFS is, among other things, in the business of providing fund administration services for the benefit of its customers; and
 
       WHEREAS, the Trust desires to retain USBFS to provide fund administration services to each series of the Trust listed on the exhibits attached hereto (as amended from time to time) (each a “Fund” and collectively, the “Funds”).
 
       NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
 
1.  
Appointment of USBFS as Administrator
 
The Trust hereby appoints USBFS as administrator of the Trust on the terms and conditions set forth in this Agreement, and USBFS hereby accepts such appointment and agrees to perform the services and duties set forth in this Agreement.  The services and duties of USBFS shall be confined to those matters expressly set forth herein, and no implied duties are assumed by or may be asserted against USBFS hereunder.
 
2.  
Services and Duties of USBFS
 
USBFS shall provide the following administration services to the Fund:
 
 
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.
 
 
 
1

 
 
(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

 
 
(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

 
 
(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.
 
 
 
4

 
 
 
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
 
USBFS shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on the exhibits attached hereto (as amended from time to time).  USBFS shall also be compensated for such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, and reproduction charges) as are reasonably incurred by USBFS in performing its duties hereunder.  The Trust shall pay all such fees and reimbursable expenses within 30 calendar days following receipt of the billing notice, except for any fee or expense subject to a good faith dispute.  The Trust shall notify USBFS in writing within 30 calendar days following receipt of each invoice if the Trust is disputing any amounts in good faith. The Trust shall pay such disputed amounts within 10 calendar days of the day on which the parties agree to the amount to be paid.  Notwithstanding anything to the contrary, amounts owed by the Trust to USBFS shall only be paid out of the assets and property of the particular Fund involved.
 
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
 
 
 
5

 
 
 
(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.
 
6.           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, 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.
 
 
 
6

 

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys’ fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of 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 USBFS, its successors and assigns, notwithstanding the termination of this Agreement.  As used in this paragraph, the term “Trust” shall include the Trust’s directors, trustees, officers and employees.

Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.

In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues.  USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS.  USBFS agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available.  Representatives of the Trust shall be entitled to inspect USBFS’ premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS.  Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.

Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.
 
 
 
7

 

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.
 
 
 
8

 
 
7.             Data Necessary to Perform Services
 
The Trust or its agent shall furnish to USBFS the data necessary to perform the services described herein at such times and in such form as mutually agreed upon.
 
8.             Proprietary and Confidential Information
 
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.
 
Further, USBFS will adhere to the privacy policies adopted by the Trust pursuant to Title V of the Gramm-Leach-Bliley Act, as may be modified from time to time.  In this regard, USBFS shall have in place and maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to the Trust and its shareholders and shall comply with the Gramm-Leach-Bliley Act and any state laws concerning privacy.
 
9.             Records
 
USBFS shall keep records relating to the services to be performed hereunder in the form and manner, and for such period, as it may deem advisable and is agreeable to the Trust, but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of the 1940 Act and the rules thereunder.  USBFS agrees that all such records prepared or maintained by USBFS relating to the services to be performed by USBFS hereunder are the property of the Trust and will be preserved, maintained, and made available in accordance with such applicable sections and rules of the 1940 Act and will be promptly surrendered to the Trust or its designee on and in accordance with its request.
 
10.           Compliance with Laws
 
The Trust has and retains primary responsibility for all compliance matters relating to the Fund, including but not limited to compliance with the 1940 Act, the Code, the SOX Act, the USA Patriot Act of 2001 and the policies and limitations of the Fund relating to its portfolio investments as set forth in its Prospectus and SAI.  USBFS’ services hereunder shall not relieve the Trust of its responsibilities for assuring such compliance or the Board of Trustee’s oversight responsibility with respect thereto.
 
 
 
9

 

11.          Term of Agreement; Amendment
 
This Agreement shall become effective with respect to a Fund as of the date the applicable exhibit for such Fund is approved by the Board of Trustees of the Trust and will continue in effect for successive annual periods.   This Agreement may be terminated by either party upon giving 90 days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties. Notwithstanding the foregoing, this Agreement may be terminated by any party upon the breach of the other party of any material term of this Agreement if such breach is not cured within 15 days of notice of such breach to the breaching party.  This Agreement may not be amended or modified in any manner except by written agreement executed by USBFS and the Trust, and authorized or approved by the Board of Trustees.
 
12.          Duties in the Event of Termination
 
In the event that, in connection with termination, a successor to any of USBFS’ duties or responsibilities hereunder is designated by the Trust by written notice to USBFS, USBFS will promptly, upon such termination and at the expense of the Trust, transfer to such successor all relevant books, records, correspondence, and other data established or maintained by USBFS under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which USBFS has maintained the same, the Trust shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from USBFS’ personnel in the establishment of books, records, and other data by such successor.  If no such successor is designated, then such books, records and other data shall be returned to the Trust.
 
13.          Assignment

This Agreement shall extend to and be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Trust without the written consent of USBFS, or by USBFS without the written consent of the Trust accompanied by the authorization or approval of the Trust’s Board of Trustees.
 
14.          Governing Law
 
This Agreement shall be construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles.  To the extent that the applicable laws of the State of Wisconsin, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the SEC thereunder.
 
 
 
10

 
 
15.          No Agency Relationship
 
Nothing herein contained shall be deemed to authorize or empower either party to act as agent for the other party to this Agreement, or to conduct business in the name, or for the account, of the other party to this Agreement.
 
16.          Services Not Exclusive
 
Nothing in this Agreement shall limit or restrict USBFS from providing services to other parties that are similar or identical to some or all of the services provided hereunder.

17.          Invalidity
 
Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.

18.          Legal-Related Services

Nothing in this Agreement shall be deemed to appoint USBFS and its officers, directors and employees as the Fund attorneys, form attorney-client relationships or require the provision of legal advice.  The Fund acknowledges that in-house USBFS attorneys exclusively represent USBFS and rely on outside counsel retained by the Fund to review all services provided by in-house USBFS attorneys and to provide independent judgment on the Fund’s behalf.  Because no attorney-client relationship exists between in-house USBFS attorneys and the Fund, any information provided to USBFS attorneys may not be privileged and may be subject to compulsory disclosure under certain circumstances.  USBFS represents that it will maintain the confidentiality of information disclosed to its in-house attorneys on a best efforts basis.
 
19.          Notices
 
Any notice required or permitted to be given by either party to the other shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service, or three days after sent by registered or certified mail, postage prepaid, return receipt requested, or on the date sent and confirmed received by facsimile transmission to the other party’s address set forth below:
 
 
 
11

 
 
Notice to USBFS shall be sent to:
 
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202

and notice to the Trust shall be sent to:
 
Series Portfolios Trust
U.S. Bancorp Fund Services, LLC
Attn: Fund Administration
615 E. Michigan Street
Milwaukee, WI  53202

 
20.          Rights and Obligations of Each Fund
 
No Fund shall receive any rights or have any liabilities arising from any action or inaction of any other Fund of the Trust under this Agreement.
 
21.          Multiple Originals
 
This Agreement may be executed on two or more counterparts, each of which when so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.
 
 
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

                                                                       
 
 
12 

 
 
Exhibit A to the Fund Administration Servicing Agreement – Series Portfolios Trust

REQUIRED PROVISIONS OF MSCI, S&P AND FACTSET

·  
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.
 
THE DATA IS PROVIDED TO THE TRUST ON AN "AS IS" BASIS.  USBFS, ITS INFORMATION PROVIDERS, AND ANY OTHER THIRD PARTY INVOLVED IN OR RELATED TO THE MAKING OR COMPILING OF THE DATA MAKE NO REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE DATA (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF).  USBFS, ITS INFORMATION PROVIDERS AND ANY OTHER THIRD PARTY INVOLVED IN OR RELATED TO THE MAKING OR COMPILING OF THE DATA EXPRESSLY DISCLAIM ANY AND ALL IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, COMPLETENESS, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.


 
13 

 
 
Exhibit A (continued) to the Fund Administration Servicing Agreement – Series Portfolios Trust


THE TRUST ASSUMES THE ENTIRE RISK OF ANY USE THE TRUST MAY MAKE OF THE DATA.  IN NO EVENT SHALL USBFS, ITS INFORMATION PROVIDERS OR ANY THIRD PARTY INVOLVED IN OR RELATED TO THE MAKING OR COMPILING OF THE DATA, BE LIABLE TO THE TRUST, OR ANY OTHER THIRD PARTY, FOR ANY DIRECT OR INDIRECT DAMAGES, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, LOST SAVINGS OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE INABILITY OF THE TRUST TO USE THE DATA, REGARDLESS OF THE FORM OF ACTION, EVEN IF USBFS, ANY OF ITS INFORMATION PROVIDERS, OR ANY OTHER THIRD PARTY INVOLVED IN OR RELATED TO THE MAKING OR COMPILING OF THE DATA HAS BEEN ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF SUCH DAMAGES.



 
14 

 



Exhibit B to the Fund Administration Servicing Agreement-Series Portfolios Trust 
Fund Accounting, Fund Administration & Portfolio Compliance, and Chief
Compliance Officer (CCO) Services Fee Schedule at September, 2015

 
Name of Series Date Added  
Weiss Alternative Balanced Risk Fund     on or after September 15, 2015  
 
Fund Accounting,   Fund Administration & Portfolio Compliance, and Chief Compliance Officer (CCO) Services Fee Schedule at September, 2015
Annual Fee Based Upon Average Net Assets Per Fund*
__ basis points on the first $__ million
__ basis points on the next $__ million
__ basis points on the balance
Minimum annual fee:  $__ per fund

§
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

Services Included in Annual Fee Per Fund
§
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)

Pricing Services
§
$__ - 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)

Fair Value Services (Charged at the Complex Level)
§
  $__ per security on the First 100 Securities
§
 $__ per security on the Balance of Securities

NOTE: Prices above are based on using U.S. Bancorp primary pricing service which may vary by security type and are subject to change.  Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non- standard security type, such as CLOs and CDOs, which may result in additional fees.  All schedules subject to change depending upon the use of unique security type requiring special pricing or accounting arrangements.

Corporate Action Services
§
$__ per Foreign Equity Security per Month
§ 
$__ per Domestic Equity Security per Month

Factor Services (security paydown factor data)
§
$__ per CMOs, Asset Backed, Mortgage Backed Security per Month

Chief Compliance Officer Annual Fees (Per Advisor Relationship per Fund)*
§
$__ 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

Third Party Administrative Data Charges (descriptive data for each security)
§
$__ per security per month for fund administrative

Prices above are based on using U.S. Bancorp standard data pricing services and are subject to change.
 
 
 
15

 
 
Exhibit B (continued) to the Fund Administration Servicing Agreement - Series Portfolios Trust at September, 2015

Out-Of-Pocket Expenses
Including but not limited to, SWIFT processing, customized reporting, third-party data provider costs (including Bloomberg, S&P, Moody’s, Morningstar GICS, MSCI, Lipper, etc.), postage, stationery, programming, special reports, proxies, insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, expenses related to and including travel to and from Board of directors meetings, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary) and CCO team travel related costs to perform due diligence reviews at advisor or sub-advisor facilities.
Additional Services
Available but not included above are the following services – additional legal administration (e.g., subsequent new fund launch), daily compliance testing, Section 18 compliance testing, Section 15(c) reporting, equity & fixed income attribution reporting, electronic Board book portal (BookMark), and additional services mutually agreed upon.

*   Subject to annual CPI increase - All Urban Consumers - U.S. City
Average. Fees are calculated pro rata and billed monthly.
 
 
Fund Administration Supplemental Services

Additional Legal Administration Services
§
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

Daily Compliance Services
§
Base fee – $__ per fund per year
§
Setup – $__ per fund group

Section 18 Compliance Testing
§
$__ set up fee per  fund complex
§
$__ per fund per month

Section 15(c) Reporting
§
$__ per fund per report – first class
§
$__ per additional class report

Equity & Fixed Income Attribution Reporting
§
Fees are dependent upon portfolio makeup, services required, and benchmark requirements.


Advisor’s Signature below acknowledges approval of the fund administration fee schedules on this Exhibit B.
 
Weiss Multi-Strategy Advisers LLC
 
   
By:    /s/ Pierce Archer                                        
Printed Name:    Pierce Archer                                      
   
Title:     Senior Vice President                           
Date:     11/03/2015                                                           

 

 
16


 
 
FUND ACCOUNTING SERVICING AGREEMENT

THIS AGREEMENT is made and entered into as of September 15, 2015 by and between SERIES PORTFOLIOS TRUST , a Delaware statutory trust (the “Trust”) and U.S. BANCORP FUND SERVICES, LLC , a Wisconsin limited liability company (“USBFS”).

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is authorized to issue shares of beneficial interest in separate series, with each such series representing interests in a separate portfolio of securities and other assets;

WHEREAS, USBFS is, among other things, in the business of providing mutual fund accounting services to investment companies; and

WHEREAS, the Trust desires to retain USBFS to provide accounting services to each series of the Trust listed on the exhibits attached hereto (as amended from time to time) (each a “Fund” and collectively, the “Funds”).

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1.  
Appointment of USBFS as Fund Accountant
 
The Trust hereby appoints USBFS as fund accountant of the Trust on the terms and conditions set forth in this Agreement, and USBFS hereby accepts such appointment and agrees to perform the services and duties set forth in this Agreement.  The services and duties of USBFS shall be confined to those matters expressly set forth herein, and no implied duties are assumed by or may be asserted against USBFS hereunder.

2.  
Services and Duties of USBFS
 
USBFS shall provide the following accounting services to the Fund:
 
 
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.
 
 
 
2

 

(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

 

(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.

The Trust acknowledges the proprietary rights that USBFS and its suppliers have in the Data.

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.
 
 
 
4

 

If the Trust desires to provide a price that varies from the price provided by the pricing source, the Trust shall promptly notify and supply USBFS with the price of any such security on each valuation date.  All pricing changes made by the Trust will be in writing and must specifically identify the securities to be changed by CUSIP, name of security, new price or rate to be applied, and, if applicable, the time period for which the new price(s) is/are effective.

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
 
Any resolution passed by the Board of Trustees that affects accounting practices and procedures under this Agreement shall be effective upon written receipt of notice and acceptance by USBFS.

6.  
Changes in Equipment, Systems, Etc.
 
USBFS reserves the right to make changes from time to time, as it deems advisable, relating to its systems, programs, rules, operating schedules and equipment, so long as such changes do not adversely affect the services provided to the Trust under this Agreement.

7.  
Compensation
 
USBFS shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on the exhibits attached hereto (as amended from time to time).  USBFS shall also be compensated for such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, and reproduction charges) as are reasonably incurred by USBFS in performing its duties hereunder.  The Trust shall pay all such fees and reimbursable expenses within 30 calendar days following receipt of the billing notice, except for any fee or expense subject to a good faith dispute.  The Trust shall notify USBFS in writing within 30 calendar days following receipt of each invoice if the Trust is disputing any amounts in good faith.  The Trust shall pay such disputed amounts within 10 calendar days of the day on which the parties agree to the amount to be paid.  Notwithstanding anything to the contrary, amounts owed by the Trust to USBFS shall only be paid out of the assets and property of the particular Fund involved.
 
 
 
5

 

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
 
 
 
6

 

 
(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.

The Trust acknowledges that the Data are intended for use as an aid to institutional investors, registered brokers or professionals of similar sophistication in making informed judgments concerning securities.  The Trust accepts responsibility for, and acknowledges it exercises its own independent judgment in, its selection of the Data, its selection of the use or intended use of such, and any results obtained.  Nothing contained herein shall be deemed to be a waiver of any rights existing under applicable law for the protection of investors.
 
 
 
7

 

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of 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 USBFS, its successors and assigns, notwithstanding the termination of this Agreement.  As used in this paragraph, the term “Trust” shall include the Trust’s trustees, officers and employees.

In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues.  USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS.  USBFS agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available.  Representatives of the Trust shall be entitled to inspect USBFS’ premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS.  Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.

Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.

In no case shall either party be liable to the other for (i) any special, indirect or consequential damages, loss of profits or goodwill (even if advised of the possibility of such) or (ii) any delay by reason of circumstances beyond its control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure beyond its control of transportation or power supply.

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.
 
 
 
8

 

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.

Further, USBFS will adhere to the privacy policies adopted by the Trust pursuant to Title V of the Gramm-Leach-Bliley Act, as may be modified from time to time.  In this regard, USBFS shall have in place and maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to the Trust and its shareholders and shall comply with the Gramm-Leach-Bliley Act and any state laws concerning privacy.
 
 
 
9

 

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
 
USBFS shall keep records relating to the services to be performed hereunder in the form and manner, and for such period, as it may deem advisable and is agreeable to the Trust, but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of the 1940 Act and the rules thereunder.  USBFS agrees that all such records prepared or maintained by USBFS relating to the services to be performed by USBFS hereunder are the property of the Trust and will be preserved, maintained, and made available in accordance with such applicable sections and rules of the 1940 Act and will be promptly surrendered to the Trust or its designee on and in accordance with its request.

12.  
Compliance with Laws
 
The Trust has and retains primary responsibility for all compliance matters relating to the Fund, including but not limited to compliance with the 1940 Act, the Code, the SOX Act, the USA Patriot Act of 2001 and the policies and limitations of the Fund relating to its portfolio investments as set forth in its current prospectus and statement of additional information.  USBFS’s services hereunder shall not relieve the Trust of its responsibilities for assuring such compliance or the Board of Trustee’s oversight responsibility with respect thereto.

13.  
Term of Agreement; Amendment
 
This Agreement shall become effective with respect to a Fund as of the date the applicable exhibit for such Fund is approved by the Board of Trustees of the Trust and will continue in effect for successive annual periods.   This Agreement may be terminated by either party upon giving 90 days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties.  Notwithstanding the foregoing, this Agreement may be terminated by any party upon the breach of the other party of any material term of this Agreement if such breach is not cured within 15 days of notice of such breach to the breaching party.  This Agreement may not be amended or modified in any manner except by written agreement executed by USBFS and the Trust, and authorized or approved by the Board of Trustees.

14.  
Duties in the Event of Termination
 
In the event that, in connection with termination, a successor to any of USBFS’ duties or responsibilities hereunder is designated by the Trust by written notice to USBFS, USBFS will promptly, upon such termination and at the expense of the Trust, transfer to such successor all relevant books, records, correspondence and other data established or maintained by USBFS under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which USBFS has maintained the same, the Trust shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from USBFS’ personnel in the establishment of books, records and other data by such successor.  If no such successor is designated, then such books, records and other data shall be returned to the Trust.
 
 
 
10

 
 
15.  
Assignment
 
This Agreement shall extend to and be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Trust without the written consent of USBFS, or by USBFS without the written consent of the Trust accompanied by the authorization or approval of the Trust’s Board of Trustees.

 
16.  
Governing Law
 
This Agreement shall be construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles.  To the extent that the applicable laws of the State of Wisconsin, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the SEC thereunder.

17.           No Agency Relationship
 
Nothing herein contained shall be deemed to authorize or empower either party to act as agent for the other party to this Agreement, or to conduct business in the name, or for the account, of the other party to this Agreement.

18.           Services Not Exclusive
 
Nothing in this Agreement shall limit or restrict USBFS from providing services to other parties that are similar or identical to some or all of the services provided hereunder.

19.           Invalidity
 
Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.
 
 
 
11

 

20.           Notices
 
Any notice required or permitted to be given by either party to the other shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service, or three days after sent by registered or certified mail, postage prepaid, return receipt requested, or on the date sent and confirmed received by facsimile transmission to the other party’s address set forth below:

Notice to USBFS shall be sent to:

U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI  53202

and notice to the Trust shall be sent to:

Series Portfolios Trust
Attn:  Fund Administration
615 E. Michigan Street
Milwaukee, WI 53202
 

 
21.           Rights and Obligations of Each Fund
 
No Fund shall receive any rights or have any liabilities arising from any action or inaction of any other Fund of the Trust under this Agreement.
 
22.           Multiple Originals
 
This Agreement may be executed on two or more counterparts, each of which when so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.
 

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
 
 
 
12

 

Exhibit A to the Series Portfolios Trust – Fund Accounting Servicing Agreement  
Fund Accounting, Fund Administration & Portfolio Compliance, and Chief
Compliance Officer (CCO) Services Fee Schedule at September, 2015
 
Name of Series
Date Added
 
Weiss Alternative Balanced Risk Fund
on or after September 15, 2015
 
 
Annual Fee Based Upon Average Net Assets Per Fund*
__ basis points on the first $__ million
__ basis points on the next $__ million
__basis points on the balance
Minimum annual fee:  $__ per fund

§
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
 
Services Included in Annual Fee Per Fund
§
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)
Pricing Services
§
$__ - 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)
Fair Value Services (Charged at the Complex Level)
§
  $__ per security on the First 100 Securities
§
 $__ per security on the Balance of Securities
NOTE: Prices above are based on using U.S. Bancorp primary pricing service which may vary by security type and are subject to change.  Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non- standard security type, such as CLOs and CDOs, which may result in additional fees.  All schedules subject to change depending upon the use of unique security type requiring special pricing or accounting arrangements.
Corporate Action Services
§
$__ per Foreign Equity Security per Month
§
$__ per Domestic Equity Security per Month
Factor Services (security paydown factor data)
§
$__ per CMOs, Asset Backed, Mortgage Backed Security per Month
Chief Compliance Officer Annual Fees (Per Advisor Relationship per Fund)*
§
$__ 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
Third Party Administrative Data Charges (descriptive data for each security)
§
$1 per security per month for fund administrative

Prices above are based on using U.S. Bancorp standard data pricing services and are subject to change.

Adviser’s Signature below acknowledges approval of the fee schedules on this Exhibit A.
 
Weiss Multi-Strategy Advisers LLC
 
   
By:    /s/ Pierce Archer                                       
Printed Name:    Pierce Archer                          
   
Title:    Senior Vice President                            
Date:    11/06/2015                                              
 
 
14
 


 
TRANSFER AGENT SERVICING AGREEMENT
 
 
THIS AGREEMENT is made and entered into as of September 15, 2015, by and between SERIES PORTFOLIOS TRUST , a Delaware statutory trust (the "Trust") and U.S. BANCORP FUND SERVICES, LLC , a Wisconsin limited liability company ("USBFS").
 
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company, and is authorized to issue shares of beneficial interest in separate series, with each such series representing interests in a separate portfolio of securities and other assets;
 
WHEREAS, USBFS is, among other things, in the business of administering transfer and dividend disbursing agent functions for the benefit of its customers; and
 
WHEREAS, the Trust desires to retain USBFS to provide transfer and dividend disbursing agent services to each series of the Trust listed on the exhibits attached hereto (as amended from time to time) (each a “Fund” and collectively, the “Funds”).
 
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
 
1.  
Appointment of USBFS as Transfer Agent
 
The Trust hereby appoints USBFS as transfer agent of the Trust on the terms and conditions set forth in this Agreement, and USBFS hereby accepts such appointment and agrees to perform the services and duties set forth in this Agreement.  The services and duties of USBFS shall be confined to those matters expressly set forth herein, and no implied duties are assumed by or may be asserted against USBFS hereunder.
 
2.  
Services and Duties of USBFS
 
USBFS shall provide the following transfer agent and dividend disbursing agent services to each Fund:
 
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.
 
 
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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
 
If the  Trust so elects, by including the service it wishes to receive in its fee schedule, USBFS shall provide the following services that are further described and that may be subject to additional terms and conditions specified in their respective exhibits, as such may be amended from time to time:
 
Data Warehouse Services and MARS System TM       ( Exhibit B )

The Trust hereby acknowledges that exhibits are an integral part of this Agreement and, to the extent services included in Exhibit B are selected by the series of the Trust, such services shall also be subject to the terms and conditions of this Agreement.  To the extent the terms and conditions of this Agreement conflict with the terms and conditions included in Exhibit B the exhibits shall control.  The provisions of Exhibit B , as applicable, shall continue in effect for as long as this Agreement remains in effect, unless sooner terminated pursuant to Section 13 hereof.

 
4.  
Lost Shareholder Due Diligence Searches and Servicing
 
The Trust hereby acknowledges that USBFS has an arrangement with an outside vendor to conduct lost shareholder searches required by Rule 17Ad-17 under the Securities Exchange Act of 1934, as amended.  Costs associated with such searches will be passed through to the Trust as an out-of-pocket expense in accordance with the fee schedule set forth on the exhibits attached hereto.  If a shareholder remains lost and the shareholder’s account unresolved after completion of the mandatory Rule 17Ad-17 search, the Trust hereby authorizes vendor to enter, at its discretion, into fee sharing arrangements with the lost shareholder (or such lost shareholder’s representative or executor) to conduct a more in-depth search in order to locate the lost shareholder before the shareholder’s assets escheat to the applicable state.  The Trust hereby acknowledges that USBFS is not a party to these arrangements and does not receive any revenue sharing or other fees relating to these arrangements.  Furthermore, the Trust hereby acknowledges that vendor may receive up to 35% of the lost shareholder’s assets as compensation for its efforts in locating the lost shareholder.
 
 
 
3

 
 
 
 
5.  
Anti-Money Laundering and Red Flag Identity Theft Prevention Programs
 
The Trust acknowledges that it has had an opportunity to review, consider and comment upon the written procedures provided by USBFS describing various tools used by USBFS which are designed to promote the detection and reporting of potential money laundering activity by monitoring certain aspects of shareholder activity as well as written procedures for verifying a customer’s identity (collectively, the “Procedures”).  Further, the Trust has determined that the Procedures, as part of the Trust’s overall anti-money laundering program and Red Flag Identity Theft Prevention program, are reasonably designed to prevent the Fund from being used for money laundering or the financing of terrorist activities and to achieve compliance with the applicable provisions of the Fair and Accurate Credit Transactions Act of 2003 and the USA Patriot Act of 2001 and the implementing regulations thereunder.
 
Based on this determination, the Trust hereby instructs and directs USBFS to implement the Procedures on the Trust’s behalf, as such may be amended or revised from time to time.  It is contemplated that these Procedures will be amended from time to time by the parties as additional regulations are adopted and/or regulatory guidance is provided relating to the Trust’s anti-money laundering and identity theft responsibilities.
 
USBFS agrees to provide to the Trust:
 
(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;
 
 
4

 
 
(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.
 
The Trust hereby directs, and USBFS acknowledges, that USBFS shall (i) permit federal regulators access to such information and records maintained by USBFS and relating to USBFS’s implementation of the Procedures, on behalf of the Trust, as they may request, and (ii) permit such federal regulators to inspect USBFS’ implementation of the Procedures on behalf of the Trust.
 
6.  
Compensation
 
USBFS shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on the exhibits attached hereto (as amended from time to time).  USBFS shall be compensated for such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, and reproduction charges) as are reasonably incurred by USBFS in performing its duties hereunder.  USBFS shall also be compensated for any increases in costs due to industry, regulatory or other applicable rules. The Trust shall pay all such fees and reimbursable expenses within 30 calendar days following receipt of the billing notice, except for any fee or expense subject to a good faith dispute.  The Trust shall notify USBFS in writing within 30 calendar days following receipt of each invoice if the Trust is disputing any amounts in good faith.  The Trust shall pay such disputed amounts within 10 calendar days of the day on which the parties agree to the amount to be paid.  Notwithstanding anything to the contrary, amounts owed by the Trust to USBFS shall only be paid out of assets and property of the particular Fund involved.
 
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;
 
 
5

 
 
 
 
(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.


 
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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.

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of 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 USBFS, its successors and assigns, notwithstanding the termination of this Agreement.  As used in this paragraph, the term “Trust” shall include the Trust’s trustees, officers and employees.
 
Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.
 
In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues.  USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS.  USBFS agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available.  Representatives of the Trust shall be entitled to inspect USBFS’ premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS.  Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.
 
Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.
 
 
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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.
 
 
 
8

 
 
 
9.  
Data Necessary to Perform Services
 
The Trust or its agent shall furnish to USBFS the data necessary to perform the services described herein at such times and in such form as mutually agreed upon.

10.  
Proprietary and Confidential Information
 
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.
 
Further, USBFS will adhere to the privacy policies adopted by the Trust pursuant to Title V of the Gramm-Leach-Bliley Act, as may be modified from time to time.  In this regard, USBFS shall have in place and maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to the Trust and its shareholders and shall comply with the Gramm-Leach-Bliley Act and any state laws concerning privacy.
 
11.  
Records
 
USBFS shall keep records relating to the services to be performed hereunder in the form and manner, and for such period, as it may deem advisable and is agreeable to the Trust, but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of the 1940 Act and the rules thereunder.  USBFS agrees that all such records prepared or maintained by USBFS relating to the services to be performed by USBFS hereunder are the property of the Trust and will be preserved, maintained, and made available in accordance with such applicable sections and rules of the 1940 Act and will be promptly surrendered to the Trust or its designee on and in accordance with its request.
 
12. 
Compliance with Laws
 
The Trust has and retains primary responsibility for all compliance matters relating to the Fund, including but not limited to compliance with the 1940 Act, the Internal Revenue Code of 1986, the Sarbanes-Oxley Act of 2002, the USA Patriot Act of 2001 and the policies and limitations of the Fund relating to its portfolio investments as set forth in its Prospectus and statement of additional information.  USBFS’ services hereunder shall not relieve the Trust of its responsibilities for assuring such compliance or the Board of Trustee’s oversight responsibility with respect thereto.
 
 
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13.  
Term of Agreement; Amendment
 
This Agreement shall become effective with respect to a Fund as of the date the applicable exhibit for such Fund is approved by the Board of Trustees of the Trust and will continue in effect for successive annual periods.  This Agreement may be terminated by either party upon giving 90 days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties.  Notwithstanding the foregoing, this Agreement may be terminated by any party upon the breach of the other party of any material term of this Agreement if such breach is not cured within 15 days of notice of such breach to the breaching party.  This Agreement may not be amended or modified in any manner except by written agreement executed by USBFS and the Trust, and authorized or approved by the Board of Trustees.
 
14.  
Duties in the Event of Termination
 
In the event that, in connection with termination, a successor to any of USBFS’s duties or responsibilities hereunder is designated by the Trust by written notice to USBFS, USBFS will promptly, upon such termination and at the expense of the Trust, transfer to such successor all relevant books, records, correspondence, and other data established or maintained by USBFS under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which USBFS has maintained the same, the Trust shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from USBFS’ personnel in the establishment of books, records, and other data by such successor.  If no such successor is designated, then such books, records and other data shall be returned to the Trust.
 
15.  
Assignment
 
This Agreement shall extend to and be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Trust without the written consent of USBFS, or by USBFS without the written consent of the Trust accompanied by the authorization or approval of the Trust’s Board of Trustees.
 
16.  
Governing Law
 
This Agreement shall be construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles.  To the extent that the applicable laws of the State of Wisconsin, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the Securities and Exchange Commission thereunder.
 
 
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17.  
No Agency Relationship
 
Nothing herein contained shall be deemed to authorize or empower either party to act as agent for the other party to this Agreement, or to conduct business in the name, or for the account, of the other party to this Agreement.
 
18.  
Services Not Exclusive
 
Nothing   in this Agreement shall limit or restrict USBFS from providing services to other parties that are similar or identical to some or all of the services provided hereunder.
 
19.  
Invalidity
 
Any   provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.
 
20.  
Notices
 
Any notice required or permitted to be given by either party to the other shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service, or three days after sent by registered or certified mail, postage prepaid, return receipt requested, or on the date sent and confirmed received by facsimile transmission to the other party’s address set forth below:
 
Notice to USBFS shall be sent to:
 
U.S. Bancorp Fund Services, LLC
Attention:  President
615 East Michigan Street
Milwaukee, WI  53202
 
 
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and notice to the Trust shall be sent to:
 
Series Portfolios Trust
U.S. Bancorp Fund Services, LLC
Attn:  Fund Administration
615 East Michigan Street
Milwaukee, WI  53202
 
21.  
Rights and Obligations of Each Fund
 
No Fund shall receive any rights or have any liabilities arising from any action or inaction of any other Fund of the Trust under this Agreement.
 
22.  
Multiple Originals
 
This Agreement may be executed on two or more counterparts, each of which when so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.
 

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.


 
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
 

 
 
12

 
 
Exhibit A
to the
Transfer Agent Servicing Agreement


As Of Processing Policy

USBFS will reimburse each Fund for any Net Material Loss that may exist on the Fund’s books and for which USBFS is responsible, at the end of each calendar month.  “Net Material Loss” shall be defined as any remaining loss, after netting losses against any gains, which impacts a Fund’s net asset value per share by at least ½ cent.  Gains and losses will be reflected on the Fund’s daily share sheet, and the Fund will be reimbursed for any net material loss on a monthly basis.  USBFS will reset the as of ledger each calendar month so that any losses which do not exceed the materiality threshold of ½ cent will not be carried forward to the next succeeding month.  USBFS will notify the advisor to the Fund on the daily share sheet of any losses for which the advisor may be held accountable.

 
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Exhibit B to the
Series Portfolios Trust Transfer Agent Servicing Agreement

DATA WAREHOUSE SERVICES and MARS System TM

1.           Certain Definitions

Whenever used in this Exhibit B , the following words and phrases shall have the meanings set forth below unless the context otherwise requires:

 
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.

2.           Services Covered

USBFS shall allow access to Data Warehouse Services by authorized Users on behalf of the Trust in accordance with the terms of this Exhibit B .

3.           Duties and Responsibilities of USBFS

USBFS will provide the following implementation support:

(1)  Project Management Assistance
(2)  Setup and Testing of System Interfaces
(3)  Conversion of Historical Data from the Funds
(4)  Assist with Sales Channel and Sales Territory Setup
(5)  Assist with Clearing/Executing Firm Relationships
(6)  Assist with Compliance Rule Setup
(7)  Database Setup (User Defined Fields)
(8)  Training (additional fee)
 
 
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USBFS will provide the following support services after implementation:

(1)  Assist with Project Management
(2)  Dedicated Client Service team
(3)  Weekly status calls (if needed)
(4)  Setup and testing of requests from the Funds
(5)  Duplicate Data Identification
(6)  Assistance with System File Imports
(7)  Custom Report Programming (at Programming rates)
(8)  Enhanced support available at a designated fee (such as database query reports, compliance report review and analysis, compliance workflow assistance)

4.           Duties and Responsibilities of the Trust

 
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.

5.           System Maintenance

The Trust and the Funds understand that USBFS will have to perform periodic maintenance to the hardware and software used to provide MARS TM and Data Warehouse Services, which may cause temporary service interruptions.  USBFS shall notify the Funds of all planned outages of its own hardware and software and, to the extent possible, will perform any necessary maintenance during non-business hours.

6.           Additional Representation and Warranty

The parties hereby warrant that neither party shall knowingly insert into any interface, other software, or other program provided by such party to the other hereunder, or accessible on the Funds’ web site(s), as the case may be, any “back door,” “time bomb,” “Trojan Horse,” “worm,” “drop dead device,” “virus” or other computer software code or routines or hardware components designed to disable, damage or impair the operation of any system, program or operation hereunder.  For failure to comply with this warranty, the non-complying party shall immediately replace all copies of the affected work product, system or software.  All costs incurred with replacement including, but not limited to, cost of media, shipping, deliveries and installation, shall be borne by such party.
 
 
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7.           Proprietary Rights

 
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.
 

 
 
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8.           Compensation

USBFS shall be compensated for providing MARS TM or Data Warehouse Services in accordance with the fee schedule set forth in the attached exhibits (as amended from time to time).

9.           Additional Indemnification; Limitation of Liability

 
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.
 
 
 
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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.

10.           File Security and Retention; Confidentiality

 
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.
 
 
 
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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.

11.           Warranties

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS EXHIBIT, MARS TM AND DATA WAREHOUSE SERVICES AND ALL EQUIPMENT, SOFTWARE AND SYSTEMS DESCRIBED IN THIS EXHIBIT ARE PROVIDED “AS IS” ON AN “AS AVAILABLE” BASIS, AND USBFS HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING MARS OR DATA WAREHOUSE SERVICES PROVIDED HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.

12.           Duties in the Event of Termination

In the event of termination of the services provided pursuant to this , (i) the Trust and Users will immediately end their access to MARS TM and Data Warehouse Services and (ii) the Trust will return all codes, system access mechanisms, programs, manuals, confidential or proprietary information and other written information provided to it by USBFS in connection with the Electronic Services provided hereunder, and shall destroy or erase all such information on any diskettes or other storage medium.

 
 
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Exhibit C to the Series Portfolios Trust - Transfer Agent Servicing Agreement
 
 
Name of Series Date Added
   
Weiss Alternative Balanced Risk Fund on or after September 1, 2015
 
 
Fees at September, 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
 
 

Annual Basis Point Fee
1 basis point on the first $___ million
.75 basis points on the next $___ million
.50 basis points on the balance
 
Services Included in Annual Basis Point Fee
 
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
 
CUSIP Setup beyond the initial CUSIP - $___ per CUSIP
Expedited CUSIP Setup - $___ per CUSIP (Less than 35 days)
 
Out-Of-Pocket Expenses
 
Including but not limited to telephone toll-free lines, mailing, sorting and postage, stationery, envelopes, service/data conversion, AML verification services, special reports, record retention, processing of literature fulfillment kits, lost shareholder search, disaster recovery charges, ACH fees, Fed wire charges, NSCC activity charges, DST charges, shareholder/dealer print out (daily confirms, investor confirms, tax, check printing and writing and commissions), voice response (VRU) maintenance and development, data communication and implementation charges, specialized programming, omnibus conversions, travel, excess history, FATCA and other compliance mailings.

Additional Services
Available but not included above are the following services - FAN Web shareholder e-commerce, FAN Mail electronic data delivery, Vision intermediary e-commerce, client Web data access, recordkeeping application access, programming charges, outbound calling & marketing campaigns, training, cost basis reporting, short-term trader reporting, excessive trader, investor email services, dealer reclaim services, literature fulfillment, money market fund service organizations, charges paid by investors, physical certificate processing, Real Time Cash Flow, CUSIP setup, CTI reporting, sales reporting & 22c-2 reporting (MARS), electronic statements (Informa), Fund Source, EConnect Delivery, Shareholder Call review analysis, marketing and fulfillment solution (eCONNECT), and additional services mutually agreed upon

Subject to annual CPI increase - All Urban Consumers - U.S. City Average.
Fees are calculated pro rata and billed monthly.

The monthly fee for an open account shall be charged in the month during which an account is opened through the month in which such account is closed. The monthly fee for a closed account shall be charged in the month following the month during which such account is closed .
 
 
 
20

 
 
Exhibit C (continued) to the Series Portfolios Trust - Transfer Agent Servicing Agreement
E-Commerce Fees at September, 2015

FAN Web
Shareholder internet access to account information and transaction capabilities through a hyperlink at the fund group web site.  Shareholders access account information, portfolio listing fund family, transaction history, purchase additional shares through ACH, etc.
 
§  
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- Responsive Design (includes Mobile Access)
Shareholder account access through the internet.  Shareholders can securely access account information, conduct financial transactions, and perform account maintenance activities. Electronic document delivery is also available as an adjunct service. This version of FAN Web has a completely redesigned, modern user interface which caters to a full range of connected devices, including tablets and smart phones.
 
§  
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:
  Inquiry - $___ per event
  Account Maintenance - $___ per event
  Transaction – financial transactions, duplicate statement requests, etc. - $___ per event
  New Account Set-up - $___ 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 Mail
Financial planner mailbox provides transaction, account and price information to financial planners and small broker dealers for import into a variety of financial planning software packages.
 
§  
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
 
Vision
Permits broker dealers, financial planners, and RIAs to use a web-based system to perform order and account inquiry, execute trades, print applications, review prospectuses, and establish new accounts.
 
 
 
21

 
 
§  
Inquiry Only
−  
Inquiry - $___ per event
−  
Per broker ID - $___ per month per ID
§  
Transaction Processing
  Implementation - $___ per management company
  Transaction – purchase, redeem, exchange, literature order - $___ per event
 
 
Exhibit C (continued) to the Transfer Agent Servicing Agreement – Series Portfolios Trust – E-Commerce Fees at September, 2015

Vision   – (continued)
  New Account Setup – $___ per event
  Monthly Minimum Charge - $___ per month

Fund Source – Client Access to audited fund information, pricing, performance, literature, processing guidelines
$___ per Month - Unlimited Users

eConnect
Upon consent from shareholder caller, forms and fulfillment pieces can be sent via email through a secured service rather than mailed.
-  
$___ per Email
 
Client Web Data Access
USBFS client on-line access to fund and investor data through USBFS technology applications and data delivery and security software.
§  
BDS – Statement Storage & Retrieval
-    Setup: $
§  
Report and Data File Storage & Retrieval
-    Setup: Included in initial fund setup on Transfer Agent system
-    $___ per user per month beyond 2 users included as part of setup
 
Additional Data Delivery Services
§ 
Ad Hoc per  PowerSelect File Development
-   Standard ad-hoc select: $___ per file
-   Custom coded data for recurring, scheduled delivery: $___ per hour consultation and programming development
-   Support: $___ per file per month for recurring files/reports scheduled for delivery via Report Source.
-   Recurring files scheduled for delivery via Report Source.
§   Custom Electronic File Exchange (DDS delivery of standard TIP files)
-   Setup: $___ one-time fee
-   Support: $___ per file per month
 
Recordkeeping Application Access
§  
Internet VPN – Infrastructure to allow for application accessibility to host systems and file transfers
−   $___ implementation
-   $___ per month250 per user
-    Support: $___ per user per month
−   ReportSource –
§  
Physical Network – Infrastructure to allow for application accessibility to host systems and file transfers
−   Cost varies depending upon location and bandwidth
§  
TA2000 3270 Emulation (Mainframe Green Screen) – Account inquiry and ability to perform financial transactions or account maintenance depending upon user access.
−   $___ implementation
−   $___ per ID per month
§  
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.
−   $___ implementation
−   $___ per ID per month
§  
TA2000 SmartDesk (Web Application to TA2000 Mainframe) – Account inquiry only.
−   $___ implementation
−   $___ per ID per month
§  
Automated Work Distributor (AWD) – Image and workflow application.
−   $___ implementation
−   $___ per ID per month
§ 
Same Day Cash Management (SDCM) – Fund level transaction and cash reporting.
−   $___ implementation
−   $___ per ID per month
§
PowerSelect – SQL database used for ad hoc reporting from the shareholder recordkeeping system.
−   $___ per month


 
 

 

Exhibit C (continued) to the Transfer Agent Servicing Agreement – Series Portfolios Trust
Supplemental Fees at September, 2015

 
Programming Charges - (subject to change at prevailing rate of vendor)
§  
$___ per hour
§  
Charges incurred for customized services based upon fund family requirements including but not limited to:
-   Fund setup programming (transfer agent system, statements, options, etc.)
-   Conversion programming
-   Customized service development
-   Voice response system setup (menu selections, shareholder system integration, testing, etc.)
-   All other client specific customization and/or development services

Outbound Calling & Marketing Campaigns – Cost based on project requirements

Transfer Agent Training Services
§  
On-site at USBFS - $___ per day
§  
At Client Location - $___ per day plus travel and out-of-pocket expenses if required

Cost Basis Reporting – Annual reporting of shareholder cost basis for non-fiduciary direct accounts.
§  
$___ per direct open account per year

Email Services – Services to capture, queue, monitor, service and archive shareholder email correspondence:
§  
$___ setup per fund group
§  
$___ per month administration
§  
$___ per received email correspondence

Dealer Reclaim Services – Services reclaim fund losses due to the pricing differences for dealer trade adjustments such as between dealer placed trades and cancellations.  There will be no correspondence charges related to this service.
§  
$___ per fund group per month
 
Literature Fulfillment Services
§  
Account Management/Database Administration
−   $___ per month
−   Receiving - $___ per SKU
−   Order Processing - $___ per order
−   Skid Storage - $___ per month per location
−   Disposal - $___ per SKU
§  
Inbound Teleservicing Only
−   Account Management - $___ per month
−   Call Servicing - $___ per minute
§  
Lead Source Reporting
−   $___ per month
§  
Closed Loop Reporting
−   Account Management - $___ per month
−   Database Installation, Setup - $___ per fund group
§   Out-of-Pocket Expenses
−   Included but not limited to specialized programming, kit and order processing expenses, postage, and printing.

Shareholder Call Review Analysis
Includes Call Sampling sent securely to client and Reporting of internal representative reviews.
-   $___ per Month

CTI Reporting – Integrated custom detailed call reporting
§   
$___ per monthly report


 
23

 

Exhibit C (continued) to the Transfer Agent Servicing Agreement –   Series Portfolios Trust - Supplemental Fees at September, 2015


Charges Paid by Investors
Shareholder accounts will be charged based upon the type of activity and type of account, including the following:
 
Qualified Plan Fees
§  
$___ 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

 
Additional Shareholder Paid Fees
 
§  
$___ 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)

Physical Certificate Processing – Services to support the setup and processing of physical certificated shares for a fund family:
§  
$___ setup per fund group
§  
$___ per certificate transaction

Real Time Cash Flow
§  
Implementation (one time charge) & Recurring Charges (monthly)
-   5 Users – $___
-   10 Users – $___
-   20 Users – $___
-   30 Users – $___
-   40 Users – $___
-   50 Users – $___
§  
Training
-   WebEx - $___ per user
-   On Site at USBFS - $___ per day
-   At Client Location - $___ per day plus travel and out-of-pocket expenses if required
§  
Real Time Data Feeds
-   Implementation (per feed) - $___ per hour (8 hour estimate)
-   Recurring (per feed) - $___ per month



 
 

 
 
 
Adviser’s Signature below acknowledges approval of the transfer agent fee schedules on this Exhibit C.

Weiss Multi-Strategy Advisers LLC

By:   /s/ Pierce Archer                                                                       Printed Name:    Pierce Archer                                                      
 
Title:     Senior Vice President                                                            Date:  11/06/2012                                                                            
 
 
 
25


 
 
SERIES PORTFOLIOS TRUST

SHAREHOLDER SERVICING PLAN


WHEREAS :   Series Portfolios Trust (the “Trust”) is registered as an open-end investment company under the Investment Company Act of 1940, as amended (the “Act”); and

WHEREAS , the Trust desires to adopt a Shareholder Servicing Plan (the “Plan”) on behalf of the classes of shares for the series of the Trust listed on Schedule A as may be amended from time to time (each, a “Fund”) and the Board of Trustees (the “Board”) has determined that there is a reasonable likelihood that adoption of the Plan will benefit each class of the Fund listed in Appendix A and its shareholders; and

WHEREAS , the shareholder servicing agent for each applicable Fund is listed in Appendix A and shall serve as shareholder servicing agent for the Fund (the “Agent”);

NOW THEREFORE , the Fund hereby adopts the Plan on behalf of each class of the Fund listed in Schedule A on the following terms and conditions:

1.   Each class of the Fund listed on Schedule A will pay the Agent, as set forth in Paragraph 3, for providing or for arranging for the provision of non-distribution personal shareholder services provided by the Agent or by securities broker-dealers and other securities professionals (“Service Organizations”) to beneficial owners of the Fund (“Clients”), including but not limited to shareholder servicing provided by the Agent at facilities dedicated to the Fund, provided that such shareholder servicing is not duplicative of the servicing otherwise provided on behalf of the Fund.

2.   Such services may include, but are not limited to, (a) establishing and maintaining accounts and records relating to Clients who invest in the Shares; (b) aggregating and processing orders involving the shares of the Shares; (c) processing dividend and other distribution payments from the Fund on behalf of Clients; (d) providing information to Clients as to their ownership of Fund shares or about other aspects of the operations of the Fund; (e) preparing tax reports or forms on behalf of Clients; (f) forwarding communications from the Fund to Clients; (g) assisting Clients in changing the Fund’s records as to their addresses, dividend options, account registrations or other data; (h) providing sub-accounting with respect to shares beneficially owned by shareholders, or the information to the Fund necessary for sub-accounting; (i) responding to shareholder inquiries relating to the services performed; (j) providing shareholders with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; and (k) providing such other similar services as the Agent may reasonably request to the extent the Service Organization is permitted to do so under applicable statutes, rules or regulations.
 
 
1

 

3.   Each class of the Fund listed on Schedule A shall pay the Agent, for its services, an annual rate of the average daily net assets of the Fund as indicated on Schedule A.  The payments shall be calculated monthly.  The Fund may make such payments monthly, and payments to the Agent may exceed the amount expended by the Agent during the month or the year to date.  In the event that payments to the Agent during a fiscal year exceed the amounts expended (or accrued, in the case of payments to Service Organizations) during a fiscal year, the Agent will promptly refund to the Fund any such excess amount.  Payments to the Agent may be discontinued, or the rate amended, at any time by the Board, in its sole discretion.  The Agent may make final and binding decisions as to all matters relating to payments to Service Organizations, including but not limited to (a) the identity of Service Organizations; and (b) what Shares, if any, are to be attributed to a particular Service Organization, to a different Service Organization or to no Service Organization.

4.   While this Plan is in effect, the Agent shall report in writing at least quarterly to the Board, and the Board shall review, the amounts expended under this Plan and the purposes for which such expenditures were made.

5.   This Plan shall be effective with respect to each Fund listed on Schedule A (or each class of the Fund added to Schedule A from time to time): (a) on the date upon which it is approved for such Fund or class by vote of the Board, cast in person at a meeting called for the purpose of voting on the approval of the Plan for such class; or (b) on the date the class commences operations, if such date is later.

6.   This Plan shall, unless terminated as hereinafter provided, continue in effect until for two years from the date hereof, and from year to year thereafter only so long as such continuance is specifically approved at least annually with respect to a class or classes of shares of the Fund, by the Board cast in person at a meeting called for the purpose of voting on such continuance.  This Plan may be terminated or amended, with respect to a class or classes of shares of the Fund, at any time by a vote of the Board or by the vote of the holders of a “majority” (as defined in the Act) of the outstanding voting securities of the Fund.



Adopted: September 15, 2015
 
 
2

 
 
SCHEDULE A
SHAREHOLDER SERVICING PLAN



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
 

 
 
 
3
 


 
POWER OF ATTORNEY
 
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints Dana L. Armour, John J. Hedrick, Jacob L. Ferch and Alia M. Vasquez, and each of them, his true and lawful attorney-in-fact as agent with full power of substitution and resubstitution for him in his name, place, and stead, to sign any and all registration statements applicable to Series Portfolios Trust and any amendment or supplement thereto, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes, may lawfully do or cause to be done by virtue hereof.




/s/ Koji Felton                                                                  September 15, 2015
Koji Felton
 
 
 
 

 
 
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints Dana L. Armour, John J. Hedrick, Jacob L. Ferch and Alia M. Vasquez, and each of them, his true and lawful attorney-in-fact as agent with full power of substitution and resubstitution for him in his name, place, and stead, to sign any and all registration statements applicable to Series Portfolios Trust and any amendment or supplement thereto, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes, may lawfully do or cause to be done by virtue hereof.



/s/Debra McGinty-Poteet                                                        September 15, 2015
Debra McGinty-Poteet
 
 
 
 

 
 
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints Dana L. Armour, John J. Hedrick, Jacob L. Ferch and Alia M. Vasquez, and each of them, his true and lawful attorney-in-fact as agent with full power of substitution and resubstitution for him in his name, place, and stead, to sign any and all registration statements applicable to Series Portfolios Trust and any amendment or supplement thereto, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes, may lawfully do or cause to be done by virtue hereof.
 





/s/ Dana L. Armour                                                        September 15, 2015
Dana L. Armour
 
 
 
 

 
 
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints Dana L. Armour, John J. Hedrick, Jacob L. Ferch and Alia M. Vasquez, and each of them, his true and lawful attorney-in-fact as agent with full power of substitution and resubstitution for him in his name, place, and stead, to sign any and all registration statements applicable to Series Portfolios Trust and any amendment or supplement thereto, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes, may lawfully do or cause to be done by virtue hereof.
 





/s/ Daniel B. Willey                                                        September 15, 2015
Daniel B. Willey



 
 


SERIES PORTFOLIOS TRUST

OPERATING EXPENSES LIMITATION AGREEMENT

THIS OPERATING EXPENSES LIMITATION AGREEMENT (the “Agreement”) is effective as of November 3, 2015 by and between SERIES PORTFOLIOS TRUST, a Delaware statutory trust (the “Trust”), on behalf of each series listed in Appendix A as attached hereto (which may have multiple classes (each a “Class”)), each a series of the Trust (each a “Fund”), and the investment adviser of the Fund, Weiss Multi-Strategy Advisers LLC(the “Adviser”).


WITNESSETH:

WHEREAS, the Adviser renders advice and services to the Fund pursuant to the terms and provisions of an Investment Advisory Agreement between the Trust and the Adviser dated November 3,  2015 (the “Investment Advisory Agreement”); and

WHEREAS, pursuant to the Investment Advisory Agreement, the Fund is responsible for, and has assumed the obligation for, payment of all expenses that have not been assumed by the Adviser thereunder; and

WHEREAS, the Adviser desires to limit the Fund’s Operating Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to the terms and provisions of this Agreement, and the Trust (on behalf of the Funds) desires to allow the Adviser to implement those limits;

NOW THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties, intended to be legally bound hereby, mutually agree as follows:

1.   Limit on Operating Expenses.

1.   The Adviser hereby agrees to limit during the Expense Limitation Period (as that term is defined in Paragraph 2 of this Agreement) the Fund’s Operating Expenses for each Class of its shares to an annual rate, expressed as a percentage of the Fund’s average annual net assets of such Class, to the percentage listed in Appendix A (the “Annual Limits”) by (i) waiving all or a portion of the Adviser’s investment advisory fee payable pursuant to the Investment Advisory Agreement and (ii) to the extent such fee waiver by itself is insufficient, reimbursing the Fund the portion of such Operating Expenses with respect to the Fund and each Class that is in excess of the Annual Limits for such fiscal year.  To the extent that the Operating Expenses for each Class, as accrued each month, exceed its Annual Limit accrued for such month, the Adviser will waive its investment advisory fees and if that is insufficient, pay to the Fund Class, on a monthly basis, the amount of the accrued Operating Expense in excess of the accrued Annual Limit within 30 days of being notified that an excess Operating Expense payment is due.

2.  Definition.   For purposes of this Agreement:

a.  Subject to Paragraph 2.b., the term “Operating Expenses” with respect to the Fund and Class is defined as the expenses of the Class that are appropriately reflected in the Class’ “Ratio of Expenses to Average Annual Net Assets” in the Fund’s prospectus pursuant to Item 8(a) “Financial Highlights” of Form N-1A in accordance with Instructions 4.a and 4.b thereto, as each such Item and Instruction is in effect as of the date hereof, including expenses such as, but not limited to, the Class’ share of advisory and administrative fees or expense reimbursements, audit expenses, Trust Board meeting costs, legal costs for ordinary operations, costs of preparing and filing post effective amendments, annual and semiannual reports to shareholders, and any proxy materials, and printing and distributing prospectuses, statements of additional information, shareholder reports and any proxy materials for current shareholders, and other expenses that would be part of the expenses borne by a registered investment company in the ordinary course of business including any Rule 12b-1 fees, Shareholder Servicing Plan fees and other expenses described in the Investment Advisory Agreement or as determined by the Trust’s Board of Trustees and its counsel, but does not include any acquired fund fees and expenses (within the meaning of Item 3 of Form N-1A in effect on the date hereof), front-end or contingent deferred loads, redemption fees, taxes, leverage interest, brokerage fees (including commissions, mark-ups and mark-downs), annual account fees for margin accounts, expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation.
 
 
1

 

b.  Notwithstanding Paragraph 2.a, the term “Operating Expenses” of the Fund or a Class shall be deemed not to include any expenses of the Fund or Class to the extent that such expenses of the Fund or a Class are directly attributable to fees of the Trust’s administrators, transfer agents, fund accountants, shareholder services providers or distributors, in excess of the fee rates provided for in the agreements for such services for the Fund in effect as of the date hereof.  Any fees of the services providers in respect of the Fund or a Class thereof that are in excess of the fee rates provided for in the agreements for such services for the Fund in effect as of the date hereof shall be the sole responsibility of the Trust and the Fund and not of the Adviser without in each case the express prior written consent of the Adviser.

c.  The term “Expense Limitation Period” is defined as the period of time commencing on the date the Fund’s initial Prospectus becomes effective under the Securities Act, through the fourth (4 th ) month following the Fund’s fiscal year end, and each subsequent one (1) year period for which this Agreement automatically is renewed pursuant to Paragraph 4 hereof.

3.   Reimbursement of Fees and Expenses.   The Adviser retains its right to receive reimbursement of any excess expense payments paid by it pursuant to this Agreement under the same terms and conditions as it is permitted to receive reimbursement of reductions of its investment management fee under the Investment Advisory Agreement.

4.    Term.   This Agreement shall become effective on the date hereof and shall remain in effect through the end of the Expense Limitation Period, and shall automatically renew for an additional one (1) year period following the end of an Expense Limitation Period, unless sooner terminated as provided in Paragraph 5 of this Agreement.

5.  Termination.   This Agreement may be terminated at any time, and without payment of any penalty, by the Board of Trustees of the Trust, on behalf of the Funds, upon sixty (60) days’ written notice to the Adviser.  This Agreement may not be terminated by the Adviser without the consent of the Board of Trustees of the Trust, which consent will not be unreasonably withheld, except that the Adviser at its election may terminate this Agreement without payment or penalty or consent effective upon the end of an Expiration Limitation Period upon at least sixty (60) days written notice prior to the end of the Expense Limitation Period.  This Agreement will automatically terminate, with respect to each Fund or Class listed in Appendix A, if the Investment Advisory Agreement for that Fund is terminated, with such termination effective upon the effective date of the Investment Advisory Agreement’s termination for that Fund or Class.  The termination of this Agreement shall not affect any obligation of a party that has accrued or is outstanding prior to such termination

6.  Assignment.   This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party.
 
 
2

 

7.  Severability.   If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby.

8.  Governing Law .  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to the conflict of laws principles thereof, provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the Investment Company Act of 1940, as amended and the Investment Advisers Act of 1940, as amended and any rules and regulations promulgated thereunder.

9.  Entire Agreement.   This Agreement, including its appendices and schedules (each of which is incorporated herein and made a part hereof by these references), represents the entire agreement and understanding of the parties hereto, and shall supersede any prior agreements.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers, all on the day and year first above written.


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  
 
 
 
 
 
3

 
 
 
Appendix A

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%

 
  4


 
SERIES PORTFOLIOS TRUST

on behalf of the funds managed by
Weiss Multi-Strategy Advisers, LLC

DISTRIBUTION PLAN
(12b-1 Plan)

The following Distribution Plan (the “Plan”) has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Act”), by Series Portfolios Trust (the “Trust”), a Delaware statutory trust, on behalf of the series of the Trust listed on Schedule A as may be amended from time to time (each, a “Fund”).  The Plan has been approved by a majority of the Trust’s Board of Trustees (the “Board”), including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any Rule 12b-1 Agreement (as defined below) (the “Disinterested Trustees”), cast in person at a meeting called for the purpose of voting on such Plan.

In approving the Plan, the Board determined that adoption of the Plan would be prudent and in the best interests of each Fund and its shareholders.  Such approval by the Board of Trustees included a determination, in the exercise of its reasonable business judgment and in light of its fiduciary duties, that there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders.

The provisions of the Plan are as follows:

1.           PAYMENTS BY THE FUND TO PROMOTE THE SALE OF FUND SHARES

The Trust, on behalf of each identified Class of the Fund, will pay Quasar Distributors, LLC (the “Distributor”), as principal distributor of the Class’s shares, a distribution fee and shareholder servicing fee equal to a percentage of the average daily net assets of each Fund as shown on Schedule A in connection with the promotion and distribution of Fund shares and the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, and the printing and mailing of sales literature.  The Distributor may pay all or a portion of these fees to any registered securities dealer, financial institution or any other person (the “Recipient”) who renders assistance in distributing or promoting the sale of shares, or who provides certain shareholder services, pursuant to a written agreement (the “Rule 12b-1 Agreement”), a form of which is attached hereto as Appendix A with respect to each Fund.  To the extent not so paid by the Distributor, such amounts may be retained by the Distributor.  Payment of these fees shall be made monthly promptly following the close of the month.

2.  
RULE 12B-1 AGREEMENTS

(a)   No Rule 12b-1 Agreement shall be entered into with respect to the Fund and no payments shall be made pursuant to any Rule 12b-1 Agreement, unless such Rule 12b-1 Agreement is in writing and the form of which has first been delivered to and approved by a vote of a majority of the Board, and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on such Rule 12b-1 Agreement.  The form of Rule 12b-1 Agreement relating to the Fund attached hereto as Appendix A has been approved by the Board as specified above.
 
 
 
 

 

(b)   Any Rule 12b-1 Agreement shall describe the services to be performed by the Recipient and shall specify the amount of, or the method for determining, the compensation to the Recipient.

(c)   No Rule 12b-1 Agreement may be entered into unless it provides (i) that it may be terminated with respect to the Fund at any time, without the payment of any penalty, by vote of a majority of the shareholders of the Fund, or by vote of a majority of the Disinterested Trustees, on not more than 60 days’ written notice to the other party to the Rule 12b-1 Agreement, and (ii) that it shall automatically terminate in the event of its assignment.

(d)   Any Rule 12b-1 Agreement shall continue in effect for a period of more than one year from the date of its execution only if such continuance is specifically approved at least annually by a vote of a majority of the Board, and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on such Rule 12b-1 Agreement.

3.           QUARTERLY REPORTS

The Distributor shall provide to the Board, and the Board shall review at least quarterly, a written report of all amounts expended pursuant to the Plan.  This report shall include the identity of the recipient of each payment and the purpose for which the amounts were expended and such other information as the Board may reasonably request.

4.           EFFECTIVE DATE AND DURATION OF THE PLAN

The Plan shall become effective immediately upon approval by the vote of a majority of the Board, and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on the approval of the Plan.  The Plan shall continue in effect with respect to the Fund for a period of one year from its effective date unless terminated pursuant to its terms.  Thereafter, the Plan shall continue with respect to each Fund from year to year, provided that such continuance is approved at least annually by a vote of a majority of the Board of Trustees, and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on such continuance.  The Plan, or any Rule 12b-1 agreement, may be terminated with respect to each Fund at any time, without penalty, on not more than 60 days’ written notice by a majority vote of shareholders of the Fund, or by vote of a majority of the Disinterested Trustees.

5.           SELECTION OF DISINTERESTED TRUSTEES

During the period in which the Plan is effective, the selection and nomination of those Trustees who are Disinterested Trustees of the Trust shall be committed to the discretion of the Disinterested Trustees.

6.           AMENDMENTS

All material amendments of the Plan shall be in writing and shall be approved by a vote of a majority of the Board, and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on such amendment.  In addition, the Plan may not be amended to increase materially the amount to be expended by the Fund hereunder without the approval by a majority vote of shareholders of the Fund.
 
 
 
 

 

7.           RECORDKEEPING

The Trust shall preserve copies of the Plan, any Rule 12b-1 Agreement and all reports made pursuant to Section 3 for a period of not less than six years from the date of this Plan, any such Rule 12b-1 Agreement or such reports, as the case may be, the first two years in an easily accessible place.
 
 
 
 

 
 
SCHEDULE A

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
     
 
 
 
 
 

 
 
Appendix A

Rule 12b-1 Related Agreement

Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, WI 53202


Weiss Multi-Strategy Advisers LLC
320 Park Avenue, 20 th Floor
New York, NY 10022

Ladies and Gentlemen:

This letter will confirm our understanding and agreement with respect to payments to be made to you pursuant to a Distribution Plan (the “Plan”) adopted by Series Portfolios Trust (the “Trust”), on behalf of each series of the Trust listed on Schedule A as may be amended from time to time (each a “Fund”), pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Act”).  The Plan and this related agreement (the “Rule 12b-1 Agreement”) have been approved by a majority of the Board of Trustees of the Trust (the “Board”), including a majority of the Board who are not “interested persons” of the Trust, as defined in the Act, and who have no direct or indirect financial interest in the operation of the Plan or in this or any other Rule 12b-1 Agreement (the “Disinterested Trustees”), cast in person at a meeting called for the purpose of voting thereon.  Such approval included a determination by the Board that, in the exercise of its reasonable business judgment and in light of its fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Fund or its shareholders.

1.           To the extent you provide distribution and marketing services in the promotion of the Fund’s shares and/or services to the Fund’s shareholders, including furnishing services and assistance to your customers who invest in and own shares, including, but not limited to, answering routine inquiries regarding the Fund and assisting in changing account designations and addresses, we shall pay you a fee as described on Schedule A.  We reserve the right to increase, decrease or discontinue the fee at any time in our sole discretion upon written notice to you.

You agree that all activities conducted under this Rule 12b-1 Related Agreement will be conducted in accordance with the Plan, as well as all applicable state and federal laws, including the Act, the Securities Exchange Act of 1934, the Securities Act of 1933, the U.S. PATRIOT Act of 2001 and any applicable rules of the Financial Industry Regulatory Authority.

2.           You shall furnish us with such information as shall reasonably be requested either by the Board or by us with respect to the services provided and the fees paid to you pursuant to this Rule 12b-1 Agreement.

3.           We shall furnish to the Board, for its review, on a quarterly basis, a written report of the amounts expended under the Plan by us and the purposes for which such expenditures were made.

4.           This Rule 12b-1 Agreement may be terminated: (a) on 60 days’ written notice after the vote of a majority of shareholders, or (b) at any time by the vote of a majority of the Disinterested Trustees, in each case, without payment of any penalty.  In addition, this Rule 12b-1 Agreement will be terminated by any act which terminates the Plan or the Distribution Agreement between the Trust and us and shall terminate immediately in the event of its assignment.  This Rule 12b-1 Agreement may be amended by us upon written notice to you, and you shall be deemed to have consented to such amendment upon effecting any purchases of shares for your own account or on behalf of any of your customer’s accounts following your receipt of such notice.
 
 
 
 

 

5.           This Rule 12b-1 Agreement shall become effective on the date accepted by you and shall continue in full force and effect so long as the continuance of the Plan and this Rule 12b-1 Agreement are approved at least annually by a vote of the Board and of the Disinterested Trustees, cast in person at a meeting called for the purpose of voting thereon.  All communications to us should be sent to the above address.  Any notice to you shall be duly given if mailed or faxed to you at the address specified by you below.


Quasar Distributors, LLC


By:                                                                       
James R. Schoenike, President



Accepted :
 
                                                                            
(Dealer or Service Provider Name)

 
                                                                            
(Street Address)

                                                                            
(City)(State)(ZIP)
 
 
                                                                            
(Telephone No.)

                                                                            
(Facsimile No.)


By:                                                                      
(Name and Title)
 

 
 
 

 

Schedule A
to the
Rule 12b-1 Related Agreement

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

For all services rendered pursuant to the Rule 12b-1 Agreement, we shall pay you the fee shown above calculated as follows:

The above fee as a percentage of the average daily net assets of the Fund (computed on an annual basis) which are owned of record by your firm as nominee for your customers or which are owned by those customers of your firm whose records, as maintained by the Trust or its agent, designate your firm as the customer’s dealer or service provider of record.

We shall make the determination of the net asset value, which determination shall be made in the manner specified in the Fund’s current prospectus, and pay to you, on the basis of such determination, the fee specified above, to the extent permitted under the Plan.

 
 


 
 
SERIES PORTFOLIOS TRUST

Multiple Class Plan Pursuant to Rule 18f-3


Pursuant to Rule-18f-3 under the Investment Company Act of 1940, as amended (the “1940 Act”), Series Portfolios Trust (the “Trust”) has adopted this Multiple Class Plan (the “Plan”) which sets forth the method for allocating fees and expenses among each class of shares (each a “Class” and collectively, the “Classes”) of certain series of the Trust (the “Funds”) set forth in exhibits hereto.   In addition, the Plan sets forth the maximum initial sales charges, contingent deferred sales charges (“CDSCs”), Rule 12b-1 distribution fees, shareholder servicing fees, conversion features, exchange privileges and other shareholder services applicable to each class of shares of the Funds.
 
The Trust is an open-end series investment company registered under the 1940 Act, the shares of which are registered on Form N-1A under the Securities Act of 1933.  The Trust hereby elects to offer multiple classes of shares of the Funds pursuant to the provisions of Rule 18f-3 and the Plan.  The exhibits hereto, as may be amended from time to time, list the Funds that have approved the Plan and the classes of such Funds.
 
SECTION 1.         Rights and Obligations.   Except as set forth herein, all Classes of shares issued by the Funds shall have identical voting, dividend, liquidation and other rights, preferences, powers, restrictions, limitations, qualifications, designations, and terms and conditions.  The only differences among the various Classes of shares relate solely to the following:  (a) each Class may be subject to different Class expenses and sales charges as discussed under Section 3 of this Plan; (b) each Class may bear a different identifying designation; (c) each Class has exclusive voting rights with respect to matters solely affecting such Class; (d) each Class may have different redemption or exchange fees and exchange privileges; and (e) each Class may provide for the automatic conversion of that Class into another Class.
 
SECTION 2.       Class Arrangements.   The class arrangements for each Class shall be as set forth in the applicable exhibit hereto.
 
SECTION 3.        Allocation of Expenses.
 
(a)           Class Expenses.   Each Class of shares may be subject to different Class expenses (collectively, “Class Expenses”) consisting of:
 
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;
 
 
 
1

 
 
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”).
 
(b)           Other Expenses.   Except for the Class Expenses discussed above (which will be allocated to the appropriate Class), all expenses incurred by the Fund will be allocated to all Classes of shares on the basis of the net asset value of each Class to the net asset value of the Trust or the Fund, as the case may be.  Excess expenses created by the imposition of an operating expense limit on one or more Classes shall be considered general Fund expenses.
 
(c)           Waivers and Reimbursements of Expenses.   The Fund’s investment adviser and any provider of services to the Fund may waive or reimburse the expenses of a particular Class or Classes; provided , however , that such waiver shall not result in cross-subsidization between Classes.
 
SECTION 4.          Allocation of Income.   The Fund will allocate income and realized and unrealized capital gains and losses and appreciation and depreciation based on the relative net assets of each Class of shares.
 
SECTION 5.         Exchange Privileges.   Shareholders of the Fund may participate in an exchange of shares, subject to the Fund’s right to reject any exchange request, in whole or in part, for any reason and without prior notice.  The Fund may decide to restrict purchase and sale activity (including exchanges) in its shares based on various factors, including whether frequent purchase and sale activity will disrupt portfolio management strategies and adversely affect its performance.  The Fund reserves the right to terminate or modify the exchange privileges of Fund shareholders in the future.  Shares to be exchanged will be redeemed at their next calculated net asset value following receipt of an exchange request in the form of a proper redemption request, as described in the applicable prospectus.  An exchange of shares will be subject to any redemption fee applicable to a redemption of shares.  See the Fund’s current prospectus for more information about share exchanges.
 
 
 
2

 
 
SECTION 6.         Conversions.   Currently, no Class of shares will automatically convert into shares of another Class.  A shareholder of Investor Class shares may request to convert to Institutional Class shares if they are eligible in accordance with the Fund’s current prospectus.  Any implementation of a conversion feature is subject to the continuing availability of a ruling or regulations of the Internal Revenue Service (“IRS”), or of an opinion of counsel or tax adviser, stating that the conversion of one Class of shares to another does not constitute a taxable event under federal income tax law.  The conversion feature may be suspended if such a ruling, regulation or opinion is not available.
 
SECTION 7.         Board Review.   The Board shall review the Plan as it deems necessary.  Prior to any material amendment(s) to the Plan with respect to any of the Fund’s shares, the Board, including a majority of the Trustees that are not interested persons of the Trust, shall find that the Plan, as proposed to be amended (including any proposed amendments to the method of allocating class and/or fund expenses), is in the best interest of each class of shares of the Fund individually and the Fund as a whole.  In considering whether to approve any proposed amendment(s) to the Plan, the Board shall request and evaluate such information as they consider reasonably necessary to evaluate the proposed amendment(s) to the Plan.
 
SECTION 8.          Effective Date.   The Plan shall become effective when initially approved by both the Board and a majority of Disinterested Trustees.
 
 

 
 
Exhibit A
 
MULTIPLE CLASS PLAN
 
SERIES PORTFOLIOS SERIES
Class A Shares

This Exhibit to the Multiple Class Plan is hereby adopted by the below-listed portfolios of the Trust pursuant to Section 2.

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.
 
 
 
4

 
 
Exhibit B
 
MULTIPLE CLASS PLAN
 
SERIES PORTFOLIOS SERIES
Class C Shares

This Exhibit to the Multiple Class Plan is hereby adopted by the below-listed portfolios of the Trust pursuant to Section 2.

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.
 
 
 
 
5

 
 
Exhibit C
 
MULTIPLE CLASS PLAN
 
SERIES PORTFOLIOS SERIES
Class I Shares

This Exhibit to the Multiple Class Plan is hereby adopted by the below-listed portfolios of the Trust pursuant to Section 2.

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.
 
 
 
 
6

 
 
Exhibit D
 
MULTIPLE CLASS PLAN
 
SERIES PORTFOLIOS SERIES
Class K Shares

This Exhibit to the Multiple Class Plan is hereby adopted by the below-listed portfolios of the Trust pursuant to Section 2.

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.
 

 
 
7
 


SERIES PORTFOLIOS TRUST

Code of Ethics

Adopted September 15, 2015


1.  
BACKGROUND

Rule 17j-1 (the “Rule”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”) requires Series Portfolios Trust (the “Trust”), as a registered investment company, to adopt a written Code of Ethics. The Rule also requires investment advisers to and principal underwriters for the Trust (each a “Fund Organization”) to adopt a written Code of Ethics and to report to the Board of Trustees of the Trust (the “Board”) any material compliance violations. Each Fund Organization is required to adopt its own Code of Ethics and to submit such Code to the Board for approval. The Board will make a determination whether such Code of Ethics contains provisions reasonably necessary to prevent Access Persons (as defined below) from engaging in conduct prohibited by the Rule. If the Fund Organization does not have a Code of Ethics or the Board determines that such Code is not compliant with the requirements of the Rule, the Fund Organization will be required to adopt this Code of Ethics as its own and to comply with all terms herein. The Board may only approve a Code of Ethics after it has made a determination that the Code of Ethics contains provisions designed to prevent “access persons” (summarized below and further defined in Appendix 1) from engaging in fraud. In addition, certain key “investment personnel” (summarized below and defined in Appendix 1) of a Fund Organization are subject to further pre-clearance procedures with respect to their investment in securities offered through an initial public offering (an “IPO”) or private placement (a “Limited Offering”).

2.  
KEY DEFINITIONS

For other defined terms, see Appendix 1.

The term “Access Person” is defined to include:

(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)

The term “Investment Personnel” is defined to include (i) any employee of the Trust or of an investment adviser to the Trust who regularly participates in making recommendations regarding the purchase or sale of securities of a Fund; and (ii) any natural person who controls the Trust or an investment adviser to the Trust who obtains information concerning recommendations made to a Fund regarding the purchase or sale of securities by a Fund. The Fund Compliance Officer (defined below) will notify an employee if that person fits the above definition and maintain a list of all Investment Personnel (see Appendix 2). Investment Personnel are also Access Persons.
 
 
1

 

The term “Reportable Fund” for a particular Access Person, means any Fund for which the investment adviser with whom the Access Person is associated, if any, (the “Associated Adviser”) serves as investment adviser (including any sub-adviser) or any Fund whose investment adviser or principal underwriter controls the Associated Adviser, is controlled by the Associated Adviser, or is under common control with the Associated Adviser.

3. GENERAL PROHIBITIONS UNDER THE RULE

The Rule prohibits fraudulent activities by affiliated persons of the Trust or Fund Organization. Specifically, it is unlawful for any of these persons to:

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.

4. COMPLIANCE OFFICERS

In order to meet the requirements of the Rule, the Code of Ethics includes a procedure for detecting and preventing material trading abuses and requires all Access Persons to report personal securities transactions on an initial, quarterly and annual basis (the “Reports”).  The officers of the Trust will appoint a compliance officer for each Fund Organization and for the Trust (each a “Fund Compliance Officer”) to receive and review Reports delivered to a Fund Compliance Officer in accordance with Section 5 below. In turn, the officers of the Trust will report to the Board any material violations of the Code of Ethics in accordance with Section 7 below.

5. ACCESS PERSON REPORTS

All Access Persons are required to submit the following reports to the Fund Compliance Officer for THEMSELVES AND ANY IMMEDIATE FAMILY MEMBER residing at the same address. In lieu of providing the Reports, an Access Person may submit brokerage statements or transaction confirmations that contain duplicate information. The Access Person should arrange to have brokerage statements and transaction confirmations sent directly to the Fund Compliance Officer (see Appendix 3 for the form of an Authorization Letter):

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

 

 
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.

A form of the INITIAL HOLDINGS REPORT is attached as Appendix 4.

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.

A form of the QUARTERLY TRANSACTION REPORT is attached as Appendix 5.

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):
 
 
3

 

 
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.

A form of the ANNUAL HOLDINGS REPORT is attached as Appendix 6.

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;
 
 
4

 
 

 
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.

No Access Person shall review his or her own Report(s). The Fund Compliance Officer shall appoint an alternate to review his or her own Reports if the Fund Compliance Officer is also an Access Person.

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

This Code of Ethics is not intended to cover all possible areas of potential liability under the Investment Company Act or under the federal securities laws in general. For example, other provisions of Section 17 of the Investment Company Act prohibit various transactions between a registered investment company and affiliated persons, including the knowing sale or purchase of property to or from a registered investment company on a principal basis, and joint transactions (i.e., combining to achieve a substantial position in a security or commingling of funds) between an investment company and an affiliated person. Access Persons covered by this Code of Ethics are advised to seek advice before engaging in any transactions involving securities held or under consideration for purchase or sale by a Fund or if a transaction directly or indirectly involves themselves and the Trust other than the purchase or redemption of shares of a Fund or the performance of their normal business duties.

In addition, the Securities Exchange Act of 1934 may impose fiduciary obligations and trading restrictions on access persons and others in certain situations. It is expected that access persons will be sensitive to these areas of potential conflict, even though this Code of Ethics does not address specifically these other areas of fiduciary responsibility.

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
 
 
 
5

 

 
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

As to any material violation of this Code of Ethics, each Fund Organization shall adopt trading policies and procedures that provide for sanctions of the Access Persons. Such sanctions may include, but are not limited to: (1) a written reprimand in the Access Person’s employment file; (2) a suspension from employment; and/or (3) termination from employment.

The Board may also impose sanctions as it deems appropriate, including sanctions against the Fund Organization or the Fund Compliance Officer for failure to adequately supervise its Access Persons.

11.
  RECORD RETENTION

All Trust records shall be maintained in accordance with Rule 17j-1(f) under the Investment Company Act.  Rule 17j-1(f) mandates the following record keeping requirements:
 
·  
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.
 
 
6

 

ACKNOWLEDGED AND AGREED :
I have read, and I understand the terms of, this Code of Ethics.

By:                                                                                                                                                                 

 
Name:                                                                                                                                                             
 
 
Title:                                                                                                                                                               
 
 
Fund Organization:                                                                                                                                            
 
 
Date:                                                                                                                                                               
 
 
 
7

 


SERIES PORTFOLIOS TRUST
Code of Ethics
 
APPENDIX 1
 

 
DEFINITIONS
 
ACCESS PERSON
 
(i)         any director, officer, general partner or Advisory Person of a Fund or of a Fund’s investment adviser; (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, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of Covered Securities by the Fund for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.

ADVISORY PERSON
 
(i)         any employee of the Fund or of a Fund’s investment adviser (or of any company in a control relationship to the Fund or investment adviser) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of Covered Securities by a Fund, or whose functions relate to the making of any recommendations with respect to the purchases or sales; and (ii) any natural person in a control relationship to the Fund or an investment adviser who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of Covered Securities by the Fund.
 
CONTROL
 
The power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.
 
COVERED SECURITY
 
Includes any Security (see below) but does not include (i) direct obligations of the Government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and (iii) shares issued by open-end investment companies (i.e., mutual funds) other than Reportable Funds.
 
FUND
 
A series of the Trust.
 
IMMEDIATE FAMILY MEMBER
 
Includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, father-in-law, mother-in-law, son-in-law, daughter-in-law, sister-in-law, brother-in-law (including adoptive relationships).
 
 
 
8

 
 
INITIAL PUBLIC OFFERING (IPO)
 
An offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
 
INVESTMENT PERSONNEL
 
 (i) any employee of the Trust, a Fund or investment adviser (or of any company in a control relationship to the Trust, a Fund or investment adviser) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of security by the Fund; and (ii) any natural person who controls the Trust, a Fund or investment adviser and who obtains information concerning recommendations made to the Fund regarding the purchase or sale of securities by the Fund.

LIMITED OFFERING
 
An offering that is exempt from registration under the Securities Act of 1933 (the “Securities Act”) pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act.
 
PURCHASE OR SALE OF A COVERED SECURITY
 
Includes, among other things, the writing of an option to purchase or sell a Covered Security.
 
REPORTABLE FUND
 
Includes, for a particular Access Person, any registered investment company, including a Fund, for which the investment adviser with whom the Access Person is associated, if any, (the “Associated Adviser”) serves as investment adviser (as defined in Section 2(a)(20) of the Investment Company Act) or any registered investment company, including a Fund, whose investment adviser or principal underwriter controls the Associated Adviser, is controlled by the Associated Adviser, or is under common control with the Associated Adviser.
 
SECURITY
 
Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

SECURITY HELD OR TO BE ACQUIRED BY THE FUND
 
(i)       any Covered Security which, within the most recent 15 days: (a) is or has been held by the Fund; or (b) is being or has been considered by the Fund or its investment adviser for purchase by the Fund; and (ii) any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in paragraphs (a) or (b) above.
 
 
 
9

 
 
SERIES PORTFOLIOS TRUST
 
Code of Ethics
 
 
APPENDIX 2
 

LIST OF ACCESS PERSONS AND INVESTMENT PERSONNEL
 
 
 
Name
 
 
Title
Acknowledgement
Of Receipt of
Code of Ethics
 
Is this person also an
investment
Personnel
     
 
 
 
 
 
 
 
 
 
1

 

 
SERIES PORTFOLIOS TRUST

Code of Ethics
 
APPENDIX 3
 
Form of Authorization Letter
 
Date
 
Name of Broker Address
 
Re: Brokerage Statements of [name of employee]
 
Ladies and Gentlemen:
 
The above referenced person is an employee of [name of Fund Organization]. Federal securities laws require that we monitor the personal securities transactions of certain key personnel. By this Authorization Letter, and the acknowledgement of the employee below, please forward duplicate copies of the employee’s brokerage statements and transaction confirmations to:
 
[Compliance Officer]
 
[Fund Organization]
 
[Address]
 
Should you have any questions, please contact the undersigned at [number].
 
Very truly yours,
 
 
 
 
AUTHORIZATION:
 
I hereby authorize you to release duplicate brokerage statements and transaction confirmations to my employer.
 
Signature:                                                                
 
Name:                                                                     
 
SSN:                                                                       
 
Account Number:                                                     
 
 
 
1

 
 
SERIES PORTFOLIOS TRUST

Code of Ethics

 
APPENDIX 4

INITIAL HOLDINGS REPORT
(complete within ten days of becoming an Access Person)
 
Date: ___________
 
NOTE: IN LIEU OF THIS REPORT, YOU MAY SUBMIT DUPLICATE COPIES OF YOUR BROKERAGE STATEMENTS

1. HOLDINGS
 

 
Name and Type of Covered Security and/or Reportable Fund
 
Ticker Symbol or CUSIP
Number of Shares or Principal Amount
 
 
 
   

 
2. BROKERAGE ACCOUNTS
 
Name of Institution and Account Holder’s Name(i.e., you, spouse, child)
 
Account Number
Have you requested duplicate statements?
 
 
 
   

 
REVIEWED:                                                                                   
(compliance officer signature)
 
DATE:                                                                                           
 
 
 
2

 
 
SERIES PORTFOLIOS TRUST

Code of Ethics
 
 
APPENDIX 5
QUARTERLY TRANSACTION REPORT
 
(complete within thirty days of the quarter-end)
 
Date: ___________
 
NOTE: IN LIEU OF THIS REPORT, YOU MAY SUBMIT DUPLICATE COPIES OF YOUR BROKERAGE STATEMENTS

1. TRANSACTIONS
 

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
 
 
 
 
 
           


 
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?
 
 
 
 
 
   






REVIEWED:                                                                                   
(compliance officer signature)
 
DATE:                                                                                           
 
 
 
3

 
 
 
 
SERIES PORTFOLIOS TRUST

Code of Ethics
 
APPENDIX 6
 
ANNUAL HOLDING REPORT
 
(current within 45 days of the date of the Report)

 
Date: ___________
 
NOTE: IN LIEU OF THIS REPORT, YOU MAY SUBMIT DUPLICATE COPIES OF YOUR BROKERAGE 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?
     


REVIEWED:                                                                                   
(Chief Compliance Officer signature)
 
DATE:                                                                                           

4
 


 
Code of Ethics for Access Persons


Quasar Distributors, LLC
Code of Ethics
For Access Persons

Effective March 17, 2014


Pursuant to Rule 17j-1 of the Investment Company Act of 1940, as amended (the “1940 Act”), the Board of Directors/Trustees of an investment company registered under the 1940 Act (hereafter, “Fund” or “Funds”), including a majority of Directors/Trustees who are not interested persons, must approve the code of ethics of the Fund, the code of ethics of each investment adviser to the Fund, and the code of ethics of the principal underwriter of the Fund, as well as any material changes to these codes of ethics.

Quasar Distributors, LLC (“Quasar”) is licensed by FINRA as a mutual fund underwriter.  Based upon Quasar's limited membership with FINRA, the nature of Quasar’s services, and Quasar’s role with Funds and Fund investment advisers, Quasar believes it employs no person who could be considered an "Access Person" as defined by Rule 17j-1 of the 1940 Act.  No Quasar employee, director or officer, in the ordinary course of business, makes, participates in or obtains information regarding the purchase or sale of securities by Funds; Quasar’s functions and duties in the ordinary course of business do not relate to the making of any recommendation to a Fund regarding the purchase or sale of securities.  Nevertheless, Quasar has adopted this code of ethics pursuant to the requirements of Rule 17j-1.
 
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.

Although the following is not an exhaustive list, a person generally would be regarded to be the beneficial owner of the following:

·  
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.

Any uncertainty as to whether an Access Person beneficially owns a security should be brought to the attention of the Compliance Officer.  Such questions will be resolved in accordance with, and this definition is subject to, the definition of “beneficial owner” found in Rules 16a-1(a)(2) and (5) promulgated under the Exchange Act.

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.

All Access Persons that are employees of Quasar must certify to this Code of Ethics for all mutual funds that use Quasar as their principal underwriter under the the 1940 Act, Rule 17j-1.
 
II.  
General Fiduciary Principles

In addition to the specific principles enunciated in this Code of Ethics, all Access Persons shall be governed by the following 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

The prohibitions of Sections IV and V of this Code of Ethics shall not apply to:

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.

In the event approval is granted, the Access Person must disclose the investment when he/she plays a material role in a Company’s subsequent consideration of an investment in the issuer.  In such circumstances, the Company’s decision to purchase securities of the issuer will be subject to an independent review by investment personnel with no personal interest in the issuer.

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

In addition to the prohibitions contained in Section IV hereof, it is the general policy of the Underwriter that no Access Person shall have any direct or indirect beneficial ownership of any security which is also owned by a Fund unless said Access Person complies with Section IV(B), or any security which is on the Restricted List.  Upon the discovery by the Underwriter or any Access Person that an Access Person has direct or indirect beneficial ownership of a security which is on the Restricted List, such Access Person shall promptly report such fact to the Compliance Officer, and may be required to divest himself or herself of such ownership if the Compliance Officer determines that any significant conflict of interest or potential conflict of interest exists as a result of such ownership or that such ownership results in a breach of other policies or agreements of the Underwriter.

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 .

A form which may be used to meet the Access Person reporting requirement is attached hereto as Appendix 1 .

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.

The Compliance Officer will document such review by initialing Access Person statements or otherwise indicating the statements that have been reviewed and will maintian copies of all reports and account statements received.
 
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

No Access Person shall purchase or sell Fund Shares while in possession of material non-public information regarding the Fund.  The Compliance Officer may from time to time deny Access Persons the ability to buy or sell Fund Shares if the Compliance Officer, in his or her sole discretion, determines that it is likely that such person has possession of material non-public information or that it would be otherwise inadvisable, in his or her sole discretion, for such transaction to occur.  The Compliance Officer should, together with the Underwriter’s legal counsel, be available to consult as to whether an Access Person is likely to be in possession of material non-public information.
 
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

The Compliance Officer shall maintain all records in accordance with Rule 17j-1 under the 1940 Act. The Compliance Officer shall maintain a copy of each of the following for five years   in an easily accessible place:

·  
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

Upon discovering a violation of this Code of Ethics, the Board of Managers of the Underwriter may impose such sanctions as it deems appropriate, including, among other sanctions, a letter of censure or suspension, disgorgement of profits or termination of the employment of the violator.
 
XII.  
Other Procedures

Other policies and procedures of the Underwriter relating to securities transactions, including, without limitation, policies relating to insider trading, shall remain in full force and effect and shall not be affected by adoption of this Code of Ethics.  To the extent of any inconsistencies between this Code of Ethics and any such other policies, this Code of Ethics shall control.
 
 
 
      7 
 
 

 
 
Appendix 1

THIS REPORT MUST BE SUBMITTED WITHIN 30 DAYS OF QUARTER END
      
 ACCESS PERSON TRANSACTION RECORD for   (Name)  
 FOR CALENDAR QUARTER ENDED     (Date)  
 
 
I HAVE REPORTED BELOW ALL TRANSACTIONS AND ACCOUNTS REQUIRED TO BE REPORTED FOR THE QUARTER PURSUANT TO THE CODE OF ETHICS.

I.  TRANSACTION REPORTING

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.
 
Transactions
 
Date
Secuity
Name
Ticker Symbol or
CUSIP Number
 
Nature of
Transaction
 
Price
Broker
Name
           
           
           
           
           
           
           
           
           
           
           
           
           
           
(attach additional sheets if necessary)

 
 
(Date)
   (Access Person's Signature)
     
 
 
 
   
 
 

 
 
II.  ACCOUNT REPORTING

Securities Accounts Opened During Quarter
 
  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)
     
 
 
 
 
   
 
 

 
 
Appendix 2


Form of Letter to Broker, Dealer or Bank

<Date>

<Broker Name and Address>

Subject:                      Account #



Dear                      :

I am affiliated with Quasar Distributors, LLC, a principal underwriter to registered investment companies, and am an Access Person of such underwriter.  You are requested to send duplicate confirmations of individual transactions as well as duplicate periodic statements for the above-referenced account to Quasar Distributors, LLC.  Please address the confirmations and statements directly to:

Ms. Cynthia Durfee, AVP
Quasar Distributors, LLC
615 East Michigan Street, 4th Floor
Milwaukee, WI  53202

Your cooperation is most appreciated.  If you have any questions regarding these requests, please contact Quasar Compliance or me.

Sincerely,


<Name of Access Person>


cc: Quasar Distributors, LLC
 
 
 
    10 
 
 

 

Appendix 3


INITIAL HOLDINGS REPORT
ANNUAL HOLDINGS REPORT
PERSONAL SECURITIES HOLDINGS

In accordance with Section VI of the Code of Ethics, please provide a list of all accounts in which you have a beneficial interest.

(1)           Name of Access Person:

(2)           If different than (1), name of the person
in whose name the account is held:

(3)           Relationship of (2) to (1):

(4)           Broker at which Account is maintained:

(5)           Account Number:

(6)           Contact person at Broker and phone number:

(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
                                                                                                   
1.

2.

3.

4.

5.
(Attach separate sheet if necessary)

I certify that this form and the attached statements (if any) constitute all of the securities in which I have a beneficial interest, including those held in accounts of my immediate family residing in my household.
 
 
     
   
 
Access Person's Signature
     
     
Dated:    
 
Print Name 
 

 
    11 
 
 

 
 
Appendix 4


ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS
 
 
I acknowledge that I have received and reviewed the Code of Ethics, and represent:

 
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 
 
 

 
 
Appendix 5


ADVANCE PERSONAL TRADING CLEARANCE/REVIEW REQUEST

Background :

The Code of Ethics states that advance clearance is required for all securities transactions in which an Access Person has a beneficial ownership interest.

Clearance/Review Request :

1.             Name of Access Person:

2.             If different than (1), name of person in whose  account the trade will occur:

3.             Relationship of (2) to (1):

4.             Name of Security and Symbol/CUSIP:

5.             Maximum number of shares or units to be purchased or sold or amount of bond:

6.             Check if applicable:    Purchase  ____       Market Order  ____

                               Sale           ____        Limit Order     ____  ( Limit Order Price: )

7.             For a Sale, Date of Purchase of Lot(s) Being Sold

To:          Compliance Officer           From:
 
   Date:                                        Time:

I (or the account in which I have a beneficial ownership interest) intend to purchase/sell the above-named Security (on date if other than above:   /               /             ).
 
I confirm that to the best of my knowledge, the proposed transaction is in compliance with the Code of Ethics.

 
Access Person Signature:        
   
Date:      
 
 
 Approved: ¨    No: ¨
Compliance Officer Signature:
 
 
  Date:
 
Original to Compliance Officer
Copy to Access Person

 
 
    13 
 
 

 
 
Appendix 6


Quasar Distributors, LLC

List of Access Persons
 
 
Name Status 
Date Added
           
           
           
           
           


 
    14 
 
 

 

Appendix 7


ANNUAL CERTIFICATION OF COMPLIANCE WITH THE CODE OF ETHICS


I certify that during the past year:

 
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