UNITED STATES
SECURITIES
SECRUITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENTProxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE(Amendment No.___)
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant ☒[X]
Filed by a Party other than the ☐Registrant [ ]
Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
SABA CAPITAL INCOME & OPPORTUNITIES FUND
(name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| [X] | No fee |
| [ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: | ||||
| [ ] | Fee paid previously with preliminary materials. |
| [ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and |
identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
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Voya Prime Rate Trust
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, AZ 85258-2034Saba Capital Income & Opportunities Fund
April 21, 2021405 Lexington Avenue, 58th Floor
New York, New York 10174
212-542-4644
August 9, 2022
Dear Shareholder:
You
On behalf of the Board of Trustees (the “Board”), we are cordially invitedpleased to attendinvite you to the Special Meetingannual meeting of Shareholdersshareholders (the “Special“Annual Meeting”) of Voya Prime Rate TrustSaba Capital Income & Opportunities Fund (the “Fund”) to be held. The Annual Meeting is scheduled for 10:00 a.m., local time, on May 21, 2021 at 3:00 p.m, Eastern Time. You will be able to participate in the Special Meeting, vote and submit your questionsSeptember 23, 2022, via live webcast by visiting https://www.viewproxy.com/voya/broadridgevsm/.audio teleconference.
At the SpecialAnnual Meeting, shareholders of the Fund (“Shareholders”will be asked to reelect six nominees to the Board (the “Proposal”).
Formal notice of the Annual Meeting appears on the next page, followed by the proxy statement (the “Proxy Statement”). The Proposal is discussed in detail in the enclosed Proxy Statement, which you should read carefully.
After careful consideration, the Board recommends that you vote “FOR” the Proposal.
Your vote is important regardless of the number of shares you own. To avoid the added cost of follow-up solicitations and possible adjournments, please take a few minutes to read the Proxy Statement and cast your vote. It is important that your vote be received no later than September 23, 2022.
We appreciate your participation and prompt response in this matter and thank you for your continued support.
Sincerely,
Andrew Kellerman
President of the Board
Notice of Annual Meeting of Shareholders
of
Saba Capital Income & Opportunities Fund
405 Lexington Avenue, 58th Floor
New York, New York 10174
212-542-4644
Dear Shareholder:
NOTICE IS HEREBY GIVEN that an annual meeting of the shareholders (the “Annual Meeting”) of Saba Capital Income & Opportunities Fund (the “Fund”) is scheduled for 10:00 a.m., local time on September 23, 2022 via audio teleconference.
At the Annual Meeting, shareholders will be asked:
| 1. | To reelect six nominees to the Board of Trustees of the Fund (the “Proposal”); |
| 2. | To transact such other business, not currently contemplated, that may properly come before the Annual Meeting, or any adjournments or postponements thereof, in the discretion of the proxies or their substitutes. |
Please read the enclosed proxy statement (the “Proxy Statement”) carefully for information concerning the Proposal to be placed before the Annual Meeting. The Board of Trustees recommends that you vote “FOR” the Proposal.
Shareholders of record as of the close of business on July 15, 2022, are entitled to notice of, and to vote at, the Annual Meeting, and are also entitled to vote at any adjournments or postponements thereof. Your attention is called to the accompanying Proxy Statement. Regardless of whether you plan to attend the Annual Meeting, please complete, sign, and return promptly, but in no event later than September 23, 2022, the enclosed Proxy Ballot so that a proposalquorum will be present and a maximum number of shares may be voted. Proxies may be revoked at any time before they are exercised by submitting a revised Proxy Ballot, by giving written notice of revocation to approve a new investment management agreement between the Fund and Saba Capital Management, L.P. (“Saba”) (the “New Management Agreement”). The Fund’s current investment adviser, Voya Investments, LLC (“VIL”), andor by voting virtually at the Fund’s current sub-adviser,Annual Meeting. Voya Investment Management Co. LLC (“Voya IM”), have submitted their respective resignations, effective as
By Order of June 22, 2021 and such resignation was accepted by the Board. The VIL and Voya IM resignations followed a request for proposal process undertaken by a strategic committee established by the Board of Trustees. AtTrustees
Michael D’Angelo
Secretary
August 9, 2022
PROXY STATEMENT
August 9, 2022
Saba Capital Income & Opportunities Fund
405 Lexington Avenue, 58th Floor
New York, New York 10174
212-542-4644
Annual Meeting of Shareholders
Scheduled for September 23, 2022
Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on September 23, 2022
This Proxy Statement and Notice of Annual Meeting of Shareholders are
available at: www.proxyvote.com
INTRODUCTION
Why did you send me this juncture, VILbooklet?
This booklet includes a proxy statement (the “Proxy Statement”) and Voya IM determineda Proxy Ballot for the Saba Capital Income & Opportunities Fund (the “Fund”) in which you have an interest. It provides you with information you should review before providing voting instructions on the matters listed in the Notice of Annual Meeting of Shareholders. The words “you” and “shareholder” are used in this Proxy Statement to submit their resignations as adviser and sub-adviserrefer to the Fund, respectively, as they concludedperson or entity that engaging a new investment managerhas voting rights or is being asked to provide voting instructions in connection with the shares.
What proposal will be appropriate in lightconsidered at the Annual Meeting?
At the annual meeting of shareholders (the “Annual Meeting”), shareholders of the Board’s direction forFund are being asked to approve the Fund.
At meetingselection of six nominees to the Board of Trustees of the Fund (the “Board”“Proposal”) held on March 22, 2021 and April 1, 2021, respectively, the independent members.
Who is eligible to vote?
Shareholders of record holding an investment in shares of the Board, after careful consideration, determinedFund as of the close of business on July 15, 2022 (the “Record Date”) are eligible to select vote at the Annual Meeting or any adjournments or postponements thereof.
How do I vote?
You may submit your Proxy Ballot in one of four ways:
| ● | By Internet. The web address and instructions for voting can be found on the enclosed Proxy Ballot. You will be required to provide your control number located on the Proxy Ballot. |
| ● | By Telephone. The toll-free number for telephone voting can be found on the enclosed Proxy Ballot. You will be required to provide your control number located on the Proxy Ballot. |
| ● | By Mail. Mark the enclosed Proxy Ballot, sign and date it, and return it in the postage-paid envelope we provided. Joint owners must each sign the Proxy Ballot. |
| ● | Virtually at the Annual Meeting. You can vote your shares virtually at the Annual Meeting. If you expect to attend the Annual Meeting virtually, please call Broadridge Fund Solutions, LLC (“Broadridge”) at 855-928-4480. |
To be certain your vote will be counted, a properly executed Proxy Ballot must be received no later than 5:00 p.m., local time, on September 23, 2022.
When and where will the Annual Meeting be held?
The Annual Meeting is scheduled to be held via audio teleconference on September 23, 2022, at 10:00 a.m., local time, and, if the Annual Meeting is adjourned or postponed, any adjournments or postponements of the Annual Meeting will also be held in the same manner.
To participate in the Annual Meeting, shareholders must register in advance by visiting https://www.viewproxy.com/sabacapital/broadridgevsm/ and submitting the requested required information to Broadridge, the Fund’s proxy tabulator.
Shareholders whose shares are registered directly with the Fund in the shareholder’s name will be asked to submit their name and control number found on the shareholder’s proxy card in order to register to participate in and vote at the Annual Meeting. Shareholders whose shares are held by a broker, bank or other nominee must first obtain a “legal proxy” from the applicable nominee/record holder, who will then provide the shareholder with a newly issued control number. We note that obtaining a legal proxy may take several days. Requests for registration should be received no later than 2 days prior to Meeting Date, but in any event must be received by the scheduled time for commencement of the Annual Meeting. Once shareholders have obtained a new control number, they must visit https://www.viewproxy.com/sabacapital/broadridgevsm/, submit their name and newly issued control number in order to register to participate in and vote at the Annual Meeting. After shareholders have submitted their registration information, they will receive an email from Broadridge that confirms that their registration request has been received and is under review by Broadridge. Once shareholders’ registration requests have been accepted, they will receive (i) an email containing an event link and dial-in information to attend the Annual Meeting, and (ii) an email with a password to enter at the event link in order to access the Annual Meeting.
Shareholders may vote before or during the Annual Meeting at proxyvote.com. Only shareholders of the Fund present virtually or by proxy will be able to vote, or otherwise exercise the powers of a shareholder, at the Annual Meeting.
How can I obtain more information about the Fund?
Should you have any questions about the Fund, please do not hesitate to contact Broadridge toll free at 855-928-4480. A copy of the current annual report and most recent semi-annual report is available, without charge, on the Internet at www.sabacef.com or by contacting the Fund at:
Saba Capital Management, LP
405 Lexington Avenue, 58th Floor
New York, NY 10174
212-542-4644
Who are the service providers to servethe Fund?
Saba Capital Management, L.P. (“Saba Capital” or “Adviser”) serves as the investment adviser to the Fund. Additional information about Saba Capital may be found below.
Saba Capital, a Delaware limited partnership, has overall responsibility for the management of the Fund. Saba Capital oversees all investment advisory and portfolio management services and assists in managing and supervising all aspects of the general day-to-day business activities and operations of the Fund, including custodial, transfer agency, dividend disbursing, accounting, auditing, compliance and related services. Saba Capital is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser. Effective June 4, 2021, Saba Capital replaced Voya Investments, LLC as the investment manager of the Fund and to assumeassumed responsibility for providing the investment management services that are now providedto the Fund.
The Adviser is a U.S.-based registered investment adviser who focuses on credit relative value, tail hedge, SPACs and closed-end funds. Saba Capital’s principal office is located at 405 Lexington Avenue, 58th Floor, New York, New York 10174. As of July 1, 2022, Saba Capital managed approximately $4.9 billion in assets.
The Fund has engaged ALPS Fund Services, Inc. ("SS&C ALPS") to provide certain administrative and transfer agency services to the Fund. SS&C ALPS also acts as Fund Accountant, Transfer Agent, and Administrator to the Fund by VILpursuant to service agreements with the Fund. The principal business address of SS&C ALPS is 1290 Broadway Suite 1000 Denver, CO 80203. In addition, the Fund has engaged Foreside Fund Officer Services, LLC ("Foreside") to provide third-party compliance officer and Voya IMtreasurer services.
PROPOSAL ONE – ELECTION OF THE NOMINEES
What is Proposal One?
The Board of Trustees for the Fund (the “Adviser Transition”“Board”), and to approve the New Management Agreement in connection with such Adviser Transition. The New Management Agreement must also be approved by Shareholders to become effective.
As described in the accompanying Proxy Statement, the terms has nominated six individuals (the “Nominees”) for election as Trustees of the New Management Agreement differ from the terms of the current investment management agreement between the Fund and VIL in view of revisions necessary to bring the New Management Agreement in line with recent market precedent in the registered closed-end fund space, and to reflect the fact that the Fund expects to retain a third-party administrator to provide administrative services to the Fund as part of the Adviser Transition. Effective upon the Adviser Transition date, all investment management and administrative services will no longer be provided by VIL and Voya IM. There will be no change in fees payable by the Fund under the New Management Agreement, nor is it expected that the Fund will bear any increase in the aggregate amount of other fees or expenses as a result of the Adviser Transition. In addition, Saba expects to enter into an expense limitation agreement with the Fund, to be effective upon consummation of the Adviser Transition, on substantially the same terms as the current expense limitation agreement.The expense cap in the Saba expense limitation agreement mirrors that of the Fund’s current expense limitation agreement and therefore the total fees and expenses borne by the Fund are expected to remain the same. The aggregate fees and expenses would, however, increase in the absence of a new expense limitation agreement.
The Board, including a majority of non-interested trustees, has approved the New Management Agreement and believes it to be in the best interests of the Fund and itsShareholders. Subject to obtaining approval by Shareholders of the New Management Agreement, and to the satisfaction of various other conditions that are described in the enclosed Proxy Statement, it is expected that the Adviser Transition will be effected on or about the date of the Special Meeting, May 21, 2021, but in no event later than June 22, 2021. This proposal is explained more fully in the accompanying Proxy Statement. Shareholders are also being asked to approve changes to certain fundamental policies of the Fund, in order to provide the Fund with greater investment flexibility subsequent to the Adviser Transition. In addition,Fund. Shareholders are being asked to approvereelect each Nominee as a changeTrustee, each to serve until his or her death, resignation, or removal or until his or her successor is duly elected and qualified.
The Nominees are: Aditya Bindal, Thomas Bumbolow, Karen Caldwell, Ketu Desai, Kieran Goodwin and Andrew Kellerman, each of whom is a current member of the Fund’s investment objective.
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In connection with the Adviser Transition, the Board requested that the Fund begin to liquidate a portion of its portfolio to provide additional liquidityBoard. Except for Messrs. Kellerman and investment flexibility subsequent to completion of the Adviser Transition. Accordingly, as of March 31, 2021, approximately $76.3 Million, representing approximately 12.7% of the Fund’s investment portfolio, was held in cash or cash equivalents, and up to 30% of the Fund’s portfolio may ultimately consist of cash and cash equivalents immediately prior to completion of the Adviser Transition. As a result, the Fund’s expected average yield on its investments and corresponding net investment income available for distribution to shareholders will likely be reduced on a temporary basis.
Following the completion of the Adviser Transition, the Fund’s name will change to Saba Capital Income & Opportunities Fund. The common sharesBindal, each nominee is not an “interested person” of the Fund, will continue to be listed on the New York Stock Exchange, although the ticker symbol will change upon the change in the name of the Fund to BRW. Further details regarding the business to be conducted at the Special Meeting are more fully described in the accompanying Notice of Special Meeting and Proxy Statement.
It is important that your shares be represented at the Special Meeting. If you are unable to attend the Special Meeting virtually, I urge you to complete, date and sign the enclosed proxy card and promptly return it in the envelope provided, vote your shares by telephone, or vote via the Internet. Your vote is important.
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Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of
Shareholders to Be Held on May 21, 2021.
This Proxy Statement and Notice of the Special Meeting of Shareholders are
available at: www.proxyvote.com.
The following information applicable to the Special Meeting may be found in the proxy statement and accompanying proxy card:
The date, time and location of the meeting;
A list of the matters intended to be acted on and our recommendations regarding those matters;
Any control/identification numbers that you need to access your proxy card; and
Information about attending the meeting and voting.
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Voya Prime Rate Trust
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, AZ 85258-2034
April 21, 2021
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 2021
To the Shareholders of Voya Prime Rate Trust:
The Special Meeting of Shareholders (the “Special Meeting”) of Voya Prime Rate Trust (the “Fund”) will be held on May 21, 2021 at 3:00 p.m., Eastern Time for the following purposes:
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You will be able to participate in the Special Meeting, vote and submit your questions via live webcast by visiting https://www.viewproxy.com/voya/broadridgevsm/. Prior to the Special Meeting you will be able to vote electronically at www.proxyvote.com.
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THE BOARD OF TRUSTEES, INCLUDING THE NON-INTERESTED TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE PROPOSALS.
Each proposal is discussed in greater detail in the enclosed Proxy Statement. You have the right to receive notice of and to vote at the Special Meeting if you were a shareholder of record at the close of business on March 8, 2021. Whether or not you expect to attend the meeting virtually, please sign the enclosed proxy and return it promptly in the self-addressed envelope provided, or submit your vote by calling toll free at the telephone number indicated on the enclosed proxy card, or submit your vote through the Internet website as indicated on the proxy card. Instructions are shown on the proxy card. In the event there are not sufficient votes for a quorum or to approve any of the foregoing proposals at the time of the Special Meeting, the Special Meeting may be adjourned in order to permit further solicitation of proxies by the Fund.
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New York, New York
April 21, 2021
This is an important meeting. To ensure proper representation at the meeting, please complete, sign, date and return the proxy card in the enclosed, self-addressed envelope, vote your shares by telephone, or vote via the Internet. Even if you vote your shares prior to the Special Meeting, you still may attend the meeting virtually and vote your shares.
If you have any questions about the special meeting or any of the proposals after reading the accompanying proxy statement, please contact our proxy solicitor, Innisfree M&A Incorporated:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Shareholders may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
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GENERAL INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
Q1: Why did you send me this proxy statement?
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This proxy statement summarizes the information regarding the matters to be voted upon at the Special Meeting. However, you do not need to attend the Special Meeting to vote your shares. You may simply complete, sign, and return the enclosed proxy card, or submit your vote by calling toll free at the telephone number indicated on the enclosed proxy card, or vote your shares through the Internet, as indicated on the proxy card.
As of March 8, 2021, the date for determining shareholders of the Fund (“Shareholders”) entitled to vote at the Special Meeting (the “Record Date”), there were 121,775,465.7790 of the Fund’s common shares of beneficial interest. If you owned shares on the Record Date, you are entitled to one vote for each whole share you owned as of that date and any fractional share shall be entitled to a proportionate fractional vote. The Fund began mailing this proxy statement on or about April 21, 2021 to all Shareholders entitled to vote their shares at the Special Meeting.
Q2: What am I being asked to vote on?
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Q3: What is the quorum requirement for the Special Meeting?
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If a quorum is not present at the Special Meeting, the Shareholders who are represented may adjourn the Special Meeting until a quorum is present. The persons named as proxies will vote those proxies for such adjournment, unless marked to be voted against any proposal for which an adjournment is sought, to permit the further solicitation of proxies. On the Record Date, there were 121,775,465.7790 of the Fund’s shares outstanding and entitled to vote. Thus, 60,887,733.8895 shares must be represented by Shareholders present at the Special Meeting or by proxy to have a quorum.
Q4: What is the Adviser Transition
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Thus, at meetings of the Board held on March 22, 2021 and April 1, 2021, respectively, the independent members of the Board, after careful consideration, determined to select Saba to serve as investment adviser of the Fund and to assume responsibility for providing investment management services that are now provided to the Fund by VIL and Voya IM (the “Adviser Transition”), and approve a new investment management agreement (the “New Management Agreement”) in connection with such Adviser Transition. The New Management Agreement must be approved by Shareholders to become effective.
The terms of the New Management Agreement differ from the terms of the current investment management agreement between the Fund and VIL in view of revisions necessary to bring the New Management Agreement in line with recent market precedent in the registered closed-end fund space, and to reflect the fact that the Fund expects to retain a third-party administrator to provide administrative services to the Fund as part of the Adviser Transition. Effective upon the Adviser Transition date, all investment management and administrative services will no longer be provided by VIL and Voya IM.
Q5: Why am I being asked to vote on the New Management Agreement?
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Q6: What are the benefits of the Adviser Transition to the Fund and its Shareholders?
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Saba is a registered investment adviser founded in 2009. Saba is a spin-out of a proprietary investing group founded by Boaz Weinstein at Deutsche Bank in 1998. Saba manages $3.2 billion across four core strategies: Credit Relative Value, Tail Hedge, SPACs and Closed-End Funds. Saba’s investors are predominantly institutions and include public and corporate pension plans, endowments and foundations, family offices, banks and insurers, bank private wealth platforms, fund of funds and certain high net worth individuals.
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Upon consummation of the Adviser Transition, the Fund will be led by the senior management team of Saba, including Boaz Weinstein, Pierre Weinstein, Andrew Kellerman, Michael D’Angelo, Xavier Riera and Nitin Sapru. Boaz Weinstein will replace Dina Santoro as President of the Fund and Pierre Weinstein will replace Michael Bell as Chief Executive Officer. Boaz Weinstein, Pierre Weinstein (no relation to Boaz) and Paul Kazarian will serve as portfolio managers of the Fund.
The Board of Trustees discussed Saba’s qualifications and considered its philosophy of management, historical performance, and methods of operations, and considered the following potential benefits to the Fund and its Shareholders:
The Fund may benefit from Saba’s extensive expertise in the credit space generally.
The Fund may also benefit from Saba’s sophisticated investment advisory platform and resources, including its experience analyzing alternative opportunistic investments that may provide attractive risk-adjusted returns in addition to the Fund’s core credit focus.
Saba is well capitalized and is able to attract and retain personnel necessary to provide quality investment advisory services to the Fund.
Q7: What are the conditions of the Adviser Transition?
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Q8: How will the Adviser Transition affect the Fund’s investment objective and strategy?
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Q9: Will the Fund continue to be publicly traded after the Adviser Transition?
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Q10: Will the Fund’s name change?
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Q11: Will the management fees payable to Saba under the New Management Agreement increase as a result of the Adviser Transition?
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Q12: How does the Board of Trustees recommend that I vote with respect to the proposal to approve the New Management Agreement?
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Q13: Do any of the Fund’s trustees or officers have an interest in the approval of the New Management Agreement that is different from that of the Fund’s Shareholders generally?
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Q14: Will the Fund bear the costs associated with the Adviser Transition and the Special Meeting?
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Q15: How do I vote by proxy and how many votes do I have?
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If your shares are registered in the name of a bank or brokerage firm, you will receive a copy of the Proxy Statement, either by paper or electronically, and you may be eligible to vote your shares electronically via the Internet or by telephone by following the instructions set forth on your voting instruction form.
If you require assistance with voting proxy or have any questions about the special meeting, please contact our proxy solicitor, Innisfree M&A Incorporated, toll-free at (877) 825-8964.
If any other matter is presented, the shares represented by such proxy will be voted in accordance with the best judgment of the person or persons exercising authority conferred by the proxy at the Special Meeting. You have one vote for each share that you own on the Record Date. The proxy card indicates the number of shares that you owned on the Record Date.
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Q16: What does it mean if I receive more than one proxy card?
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Q17: May I revoke my proxy?
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vote virtually at the Special Meeting on May 21, 2021. If you hold common shares through a broker, bank or other nominee, you must follow the instructions you receive from your broker, bank or other nominee in order to revoke your voting instructions.
Q18: What is the difference between holding shares as a shareholder of record and as a beneficial owner?
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Beneficial Owner. You are a beneficial owner if at the close of business on the Record Date your shares were held by a bank, brokerage firm or other nominee and not in your name. Being a beneficial owner means that your shares are held in “street name.” As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following the voting instructions your bank, brokerage firm or other nominee provides. If you do not provide your bank, brokerage firm or other nominee with instructions on how to vote your shares, your bank, brokerage firm or other nominee will not be able to vote your shares with respect to any of the proposals. Please see “What if I do not specify how my shares are to be voted?” for additional information.
Q19: What will happen if I do not vote my shares?
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Beneficial Owners. If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. “Broker non-votes” represent votes that could have been cast on a particular matter by a brokerage firm, as a shareholder of record, but that were not cast because the brokerage firm lacked discretionary voting authority on the matter and did not receive voting instructions from the beneficial owner of the shares. Under the rules of the New York Stock Exchange (“NYSE”), your brokerage firm or other nominee does not have discretion to vote your shares on non-routine matters such as Proposals 1, 2, 3, 4, 5, 6 and 7. Accordingly, there will be no broker non-votes with respect to Proposals 1, 2, 3, 4, 6 and 7.
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Q20: What is the vote required for each proposal?
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Since banks, brokerage firms or other nominees do not have discretion to vote on Proposals 1, 2, 3, 4, 5 or 6, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
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Q21: What if I do not specify how my shares are to be voted?
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In the discretion of the named proxies regarding any other matters properly presented for a vote at the Special Meeting.
Beneficial Owners. If you are a beneficial owner and you do not provide the bank, brokerage firm or other nominee that holds your shares with voting instructions, the bank, brokerage firm or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under the NYSE’s rules, banks, brokerage firms and other nominees do not have discretion to vote on non-routine matters such as Proposals 1, 2, 3, 4, 5, 6 or 7. Accordingly, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will not vote your shares on Proposals 1, 2, 3, 4, 5, 6 or 7 and your shares will not be counted as present for purposes of meeting the quorum requirement.
Q22: What are abstentions and broker non-votes?
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Q23: What will happen if Proposal 1 is not approved
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Q24: What will happen if Proposals 2, 3, 4, 5 or 6 are not approved?
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Q25: How do I find out the results of the voting at the Special Meeting?
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Q26: Who should I call if I have any questions?
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Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Shareholders may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
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VOYA PRIME RATE TRUST
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, AZ 85258-2034
April 21, 2021
PROXY STATEMENT
Special Meeting of Shareholders
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “Board”) of Voya Prime Rate Trust. (the “Fund,” “we,” “us” or “our”) for use at the Fund’s Special Meeting of Shareholders (the “Special Meeting”) of Voya Prime Rate Trust (the “Fund”) to be held on May 21, 2021 at 3:00 p.m., Eastern Time. You will be able to participate in the Special Meeting, vote and submit your questions via live webcast by visiting https://www.viewproxy.com/voya/broadridgevsm/. This Proxy Statement and the accompanying proxy card are first being sent to Shareholders on or about April 21, 2021. This Proxy Statement is also available on the proxy tabulator’s website at www.proxyvote.com.
We encourage you to vote your shares, either by voting virtually at the Special Meeting or by granting a proxy (i.e., authorizing someone to vote your shares). If you properly sign and date the accompanying proxy card, or otherwise provide voting instructions, either via the Internet or by telephone, and the Fund receives it in time for the Special Meeting, the persons named as proxies will vote the shares registered directly in your name in the manner that you specified. If you give no instructions on the proxy card, the shares covered by the proxy card will be voted FOR the matters listed in the accompanying Notice of Special Meeting of Shareholders.
If your shares are registered in the name of a bank or brokerage firm, you will receive a copy of the Proxy Statement, either by paper or electronically, and you may be eligible to vote your shares electronically via the Internet or by telephone by following the instructions set forth on your voting instruction form.
Purpose of Meeting
At the Special Meeting, you will be asked to vote on the following proposals:
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Record Date and Voting Securities
You may vote your shares, virtually or by proxy, at the Special Meeting only if you were a Shareholder of record at the close of business on March 8, 2021 (the “Record Date”). On the Record Date, there were 121,775,465.7790 of the Fund’s common shares of beneficial interest. Each share is entitled to one vote.
Quorum Required
A quorum must be present at the Special Meeting for any business to be conducted. The presence at the Special Meeting, virtually or by proxy, of the holders of a majority of the shares outstanding on the Record Date will constitute a quorum. Abstentions will be treated as shares present for quorum purposes. Since banks, brokerage firms or other nominees do not have discretion to vote on non-routine matters such as Proposals 1, 2, 3, 4, 5, 6 or 7, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement. As of the Record Date, there were 121,775,465.7790 shares of the Fund’s shares outstanding and entitled to vote thereon. Thus, 60,887,733.8895 shares must be represented by Shareholders present at the Special Meeting or by proxy to have quorum.
If a quorum is not present at the Special Meeting, the Shareholders who are represented at the Special Meeting may adjourn the Special Meeting until a quorum is present. The persons named as proxies will vote those proxies for such adjournment, unless marked to be voted against any proposal for which an adjournment is sought, to permit the further solicitation of proxies.
Submitting Voting Instructions for Shares Held Through a Bank, Brokerage Firm or Other Nominee
If you hold your shares through a bank, brokerage firm or other nominee, you must follow the voting instructions you receive from your bank, brokerage firm or other nominee. If you hold shares through a bank, brokerage firm or other nominee and you want to vote virtually at the Special Meeting, you must obtain a legal proxy from the record holder of your shares and present it at the Special Meeting. If you do not vote virtually at the Special Meeting or submit voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
If your shares are registered in the name of a bank or brokerage firm, you will receive a copy of the Proxy Statement, either by paper or electronically, and you may be eligible to vote your shares electronically via the Internet or by telephone by following the instructions set forth on your voting instruction form.
Authorizing a Proxy for Shares Held in Your Name
If you are a record holder of common shares you may authorize a proxy to vote on your behalf, as described on the enclosed proxy card. Authorizing your proxy will not limit your right to vote virtually at the Special Meeting. A properly completed and submitted proxy will be voted in accordance with your instructions, unless you subsequently revoke your instructions. If you authorize a proxy without indicating your voting instructions, the proxy holder will vote your shares according to the Board of Trustees’ recommendations. You may return the enclosed proxy card by mail in the enclosed, self-addressed envelope, or you may vote your shares by calling toll free or voting through the Internet by following the instructions set forth on the enclosed proxy card.
Revoking Your Proxy
If you are a Shareholder of record, you can revoke your proxy at any time before it is exercised by:
deliver a written revocation notice prior to 9:00 a.m., Eastern Time, on May 20, 2021 to our proxy tabulator, Broadridge Financial Solutions, Inc.;
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deliver a later-dated proxy by following the instructions set forth on the enclosed proxy card;
vote virtually at the Special Meeting on May 21, 2021.
If you require assistance with voting your proxy or have any questions about the special meeting, please contact our proxy solicitor, Innisfree M&A Incorporated toll-free at (877) 825-8964.
If you hold common shares through a broker, bank or other nominee, you must follow the instructions you receive from your broker, bank or other nominee in order to revoke your voting instructions. Attending the Special Meeting does not revoke your proxy unless you also vote virtually at the Special Meeting.
Vote Required
Approval of the New Management Agreement. Approval of the New Management Agreement requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the Investment Company Act of 1940, as amended (the “1940 Act”). Since the Fund’s only voting securitiesSuch persons are common shares, consistent with the 1940 Act, the affirmative vote of a majoritycommonly referred to as “Independent Trustees.” Messrs. Kellerman and Bindal are considered an interested person of the outstanding common shares entitled to vote at the Special Meeting is required to approve the New Management Agreement. For purposes of approval of the New Management Agreement, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against the New Management Agreement. Since banks, brokerage firms or other nominees do not have discretion to vote on non-routine matters such as the approval of the New Management Agreement, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
Approval of Changes to Fundamental Investment Restrictions. The approval of each change requires the affirmative vote of a majority of the Fund’s outstanding voting securitiesFund, as defined in the 1940 Act. SuchAct, because each is also employed by Saba Capital. Each Nominee is currently a majority means the affirmative voteTrustee of the holdersFund and has consented to serve as a Trustee and to being named in this Proxy Statement. Please read the section entitled “Further Information about the Trustees and Officers” before voting on the Proposal.
Who are the Nominees and what are their qualifications?
Set forth below is pertinent information about each Nominee.
Independent Trustees
Thomas Bumbolow
Thomas R. Bumbolow became a Trustee of the Fund in 2021. Mr. Bumbolow currently serves as the Head of Distribution & Business Development at Midwest Holding (MWDT), an insurance company which marries its innovative insurance carrier with reinsurance capabilities customized for elite asset management partners. Mr. Bumbolow serves as advisor to Limitless Ventures, a venture-based social impact fund and was the co-Founder of protoCapital, a merchant bank that operated from 2017-2020. Mr. Bumbolow has 20 years of experience at JPMorgan Chase, where he held various roles in fixed-income sales and trading from 1997-2017. He has been a board member of Stepping Stones Museum for Children since 2018. Mr. Bumbolow earned a Bachelor of Arts in Economics from Boston College. Mr. Bumbolow's qualifications to serve as a Trustee include his numerous years of experience working within the financial and banking sectors, and with the asset management space generally.
Karen Caldwell
Karen Caldwell has served as the Chief Financial Officer of Reform Alliance, a non-profit organization dedicated to probation, parole, and sentencing reform in the United States through legislation and lobbying, since 2019. Previously, Ms. Caldwell served as the Chief Financial Officer and Treasurer of the NHP Foundation, a non-profit organization dedicated to increasing housing affordability, from 2018 to 2019. From 2016 to 2018, Ms. Caldwell served as the Chief Financial Officer and Executive Vice President of the New York City Housing Authority. Prior to such position, she served as the president of Hanseatic Management Services, Inc., an asset management company, from 2015 to 2016. Prior to Hanseatic, Ms. Caldwell served as a managing director of Alternative Investments at Amundi Investments, LLC, an investment advisement firm, from 2008 to 2014. From 1994 until 2008, Ms. Caldwell served as the Group Senior Vice President and Co-Head of Rates and Portfolio Management of ABN AMRO/LaSalle Bank Corporation Treasury. Ms. Caldwell also served as the Vice President of Foreign Exchange Trading and Sales at JPMorgan Chase from 1982 until 1994. Ms. Caldwell has served on the board of trustees of Finite Solar Finance Fund since 2021, and Saba Capital Income & Opportunities Fund, including as Chairwoman of the Audit Committee, since 2020. Additionally, Ms. Caldwell served as a member of the board of directors and on the Audit Committee of the Chicago Housing Authority from 2014 until 2015. Ms. Caldwell earned a B.S. in Accounting from Florida A&M University, and an MBA in Finance & Marketing from Northwestern University, Kellogg School of Management. Ms. Caldwell’s qualifications to serve as a Trustee include her extensive experience as senior management in various businesses and decades of leadership experience in top financial institutions.
Ketu Desai
Ketu Desai has served as Principal, Chief Compliance Officer, Investment Adviser Representative and Independent Registered Investment Adviser of i-squared Wealth Management, Inc., a private wealth investment management firm, since 2016. He has also served as CIO of Centerfin, Inc. since December 2021. Previously, Mr. Desai served as Investment Analyst at Lighthouse Investment Partners, LLC (“Lighthouse”), a global investment firm, from 2007 until 2016, where he helped manage Lighthouse’s credit funds, including the Lighthouse Credit Opportunities Fund and Lighthouse Credit Compass. At Lighthouse, Mr. Desai was also a member of the firm’s Relative Value Committee, where he was responsible for portfolio allocation decisions and risk management of fixed income, credit, event-driven, mortgage, and distressed strategies. Prior to joining Lighthouse, Mr. Desai served as a M&A Investment Banking Analyst at Credit Suisse AG from 2006 until 2007. Mr. Desai has served as a trustee on the Board of Trustees of Saba Capital Income & Opportunities Fund since 2020. Mr. Desai earned a B.A. in Economics from Stony Brook University, a M.S. in Economics from New York University and an MBA from NYU Stern in Finance, Financial Instruments and Markets, and Entrepreneurship and Innovation. Mr. Desai’s qualifications to serve as a trustee include his extensive leadership experience in the investment and finance industries, including in risk management.
Kieran Goodwin
Kieran Goodwin is the founder of Hidden Truth, a mobile application game. Mr. Goodwin is also the CFO of two special purpose acquisition companies, Rosecliff Acquisition Corp. I and Arena Fortify Acquisition Corp. Previously, he served as the co-founder and Portfolio Manager of Panning Capital Management, LLC, a hedge fund with $2.5 billion AUM at its peak, from 2012 to 2019. Prior to Panning, from 2004 to 2010, Mr. Goodwin served as partner and Head of Trading of King Street Capital Management, an investment management firm. From 2002 to 2004, Mr. Goodwin served as a Managing Director in UBS Principal Finance. Prior to UBS, Mr. Goodwin was a Managing Director in Fixed Income at Merrill Lynch and from 1991 until 1997 he was a trader in interest rate and credit derivatives at Smith Barney, Citigroup and Salomon Brothers. Mr. Goodwin earned a B.A. in Computer Science from Duke University in 1991. Mr. Goodwin’s qualifications to serve as a Trustee include his experience as a founder of an investment company and his extensive knowledge and experience in the finance and investment spaces.
Interested Trustees
Aditya Bindal
Aditya Bindal, has served as Managing Director and Chief Risk Officer at Saba Capital, an investment advisor focused on credit and equity relative value strategies, since October 2018. Previously, Mr. Bindal served as Chief Risk Officer at Water Island Capital, an event-driven investment firm with over $2.5 billion in AUM where he was responsible for firm wide risk management, as well as developing quantitative research, from September 2015 to September 2018. Prior to joining Water Island, Mr. Bindal worked as Senior Risk Manager for Eton Park Capital Management, an investment management firm, from July 2008 to September 2015. His primary responsibilities included managing risks for credit and derivative portfolios, devising scenario analysis for complex strategies and providing capital market perspectives to senior management. Mr. Bindal began his career in 2005 at The Bear Stearns Companies, Inc. (formerly NYSE: BSC), a global investment bank, securities trading and brokerage firm, as a risk associate and subsequently traded credit derivatives for the proprietary desk. Mr. Bindal has served as a trustee on the Board of Trustees of Templeton Global Income Fund since May 2021 and as a trustee on the Board of Trustees of Saba Capital Income & Opportunities Fund since July 2020. Mr. Bindal received a Ph.D. in Chemical Engineering from Rutgers University, Masters from Purdue University and a B.Tech from Indian Institute of Technology, Kharagpur in India. Mr. Bindal’s qualifications to serve as a trustee include his deep financial expertise and the senior financial management positions he has held at multiple asset management firms.
Andrew Kellerman
Andrew Kellerman is a Partner and has served as President and Head of Business Development of Saba Capital Management, L.P. since 2018. Prior to joining Saba, Mr. Kellerman served as a Managing Director and Head of Distribution for the Private Institutional Client group within Alex. Brown & Sons where he was responsible for placement of boutique funds and private direct investments from 2017 to 2018. Prior to Alex. Brown, Mr. Kellerman served as a Managing Partner of Measure 8 Venture Partners, a diversified private capital fund focused on opportunities in emerging industries, from January 2017 to November 2017. Previously, Mr. Kellerman served as a Managing Director and Head of Business Development with Vertical Knowledge supplying open source data and analytics for the defense, financial services, and commercial markets from 2014-2016. Prior to joining Vertical Knowledge, Mr. Kellerman was employed with Deutsche Bank from 2002 through 2014, where he served as a Managing Director in Credit Derivatives from 2002-2006; U.S. Head of Synthetic CDO Sales from 2006-2009 and Head of Hedge Fund Credit Sales from 2009 through 2014. Mr. Kellerman’s additional experience includes FleetBoston Financial in Singapore where he was a Director in Asia Structured Finance, Presidio Capital also in Singapore where he served as Director in Structured Finance and First National Bank of Chicago where he served as VP, Head of EM Options Trading. Mr. Kellerman has served as a trustee on the Board of Trustees and chairman of the Board of Trustees of Saba Capital Income & Opportunities Fund since July 2020. Mr. Kellerman holds a Bachelor of Science in International Relations from Syracuse University. Mr. Kellerman’s qualifications to serve as a Trustee include his extensive experience in the investment and financial services industries including his time as managing director of a large multinational investment bank.
For additional information on the Nominees, please see Appendix A. No Nominee is a party adverse to the Fund or any of its affiliates in any material pending legal proceeding, nor does any Nominee have an interest materially adverse to the Fund.
If any or all of the Nominees become unavailable to serve as Trustee due to events not now known or anticipated, the persons named as proxies will vote for such other nominee or nominees as the current Trustees may recommend or the Board may reduce the number of Trustees as provided for in the Fund’s charter documents.
How long will the Trustees serve on the Board?
If elected, each Nominee would serve as a Trustee until the next meeting of shareholders called for the purpose of electing Trustees, if any, and until a successor is duly elected and qualified, or if sooner, until their death, resignation, or removal.
What is the required vote?
Shareholders of the Fund will vote collectively as a single class on the election of each Nominee. There is no cumulative voting for the election of Trustees. The election of each Nominee must be approved by a plurality of the votes cast at the Annual Meeting at which a quorum is present. Shareholders who vote for the Proposal will vote for each Nominee. Those shareholders who wish to withhold their vote on any specific nominees may do so on the Proxy Ballot. Shareholders do not have appraisal rights in connection with the Proposal.
What is the Board’s recommendation?
The Board, including all of the Independent Trustees, has unanimously approved the nomination of each of the Nominees, and is recommending that the shareholders of the Fund vote “FOR” each of the Nominees.
FURTHER INFORMATION ABOUT THE TRUSTEES AND OFFICERS
The Board of Trustees
The Fund is governed by the Board, which oversees the Fund’s business and affairs. The Board delegates the day-to-day management of the Fund to the Fund’s Officers and to various service providers that have been contractually retained to provide such day-to-day services. The entities that render services to the Fund do so pursuant to contracts that have been approved by the Board. The Trustees are experienced executives who, among other duties, oversee the Fund’s activities, review contractual arrangements with companies that provide services to the Fund, and review the Fund’s investment performance.
The Board Leadership Structure and Related Matters
The Board is comprised of six members, four of whom are Independent Trustees.
One of the Interested Trustees, Andrew Kellerman, serves as the Chairperson of the Board. The responsibilities of the Chairperson of the Board include: coordinating with management in the preparation of agendas for Board meetings; presiding at Board meetings; between Board meetings, serving as a primary liaison with other Trustees, officers of the Fund, management personnel, and legal counsel to the Independent Trustees; and such other duties as the Board periodically may determine. Mr. Kellerman is a partner of the Fund’s investment adviser, Saba Capital. The designation of an individual as the Chairperson does not impose on such Trustee any duties, obligations or liabilities greater than the duties, obligations or liabilities imposed on such person as a member of the Board, generally.
For the fiscal year ended October 31, 2021, no Trustee attended fewer than 75% of the aggregate of: (1) the total number of meetings held by the Board and (2) with respect to Trustees currently serving as members of the Audit Committee, the total number of meetings held by the Audit Committee. The Nominating and Corporate Governance Committee (the “Nominating Committee”) of the Board was created subsequent to the end of the fiscal year ended October 31, 2021, as described in further detail below, and as such the Nominating Committee did not meet during the fiscal year ended October 31, 2021.
Audit Committee. The Board has established an Audit Committee whose functions include, among other things: (i) meeting with the independent registered public accounting firm of the Fund to review the scope of the Fund’s audit, the Fund’s financial statements and accounting controls; (ii) meeting with management concerning these matters, internal audit activities and other matters; and (iii) overseeing the implementation of the fund’s valuation procedures and the fair value determinations made with respect to securities held by the Fund for which market value quotations are not readily available. The Audit Committee currently consists of three (3) Independent Trustees. The following Trustees currently serve as members of the Audit Committee: Ms. Caldwell and Messrs. Bumbolow and Desai. Ms. Caldwell currently serves as the Chairperson of the Audit Committee. All Committee members have been designated as Audit Committee Financial Experts under the Sarbanes-Oxley Act of 2002. The Audit Committee held four (4) meetings during the fiscal year ended October 31, 2021.
Nominating Committee. On June 24, 2022, the Board established the Nominating Committee, whose functions include, among other things: (i) identifying individuals qualified to become members of the Board; (ii) selecting or recommending to the Board the trustee nominees for each annual meeting of shareholders; (iii) developing and recommending to the Board a set of corporate governance principles applicable to the Fund; (iv) planning for the succession of the Fund’s executive officers; and (v) overseeing the evaluation of the Board, its committees and management. The following Trustees currently serve as members of the Nominating Committee: Ms. Caldwell and Messrs. Bumbolow, Goodwin and Desai. Mr. Bumbolow currently serves as the Chairperson of the Nominating Committee. The Nominating Committee typically meets at least once per year, and may hold special meetings by telephone or in person to discuss specific matters that may require action prior to the next regular meeting. The Nominating Committee did not meet during the fiscal year ended October 31, 2021.
The Nominating Committee will consider Trustee candidates recommended by shareholders. In considering candidates submitted by shareholders, the Nominating Committee will take into consideration the needs of the Board, the qualifications of the candidate and the interests of shareholders.
To serve as a Trustee, nominees must (a) 67%have no felony convictions or felony or misdemeanor convictions involving the purchase or sale of a security; and (b) not have been the subject of any order, judgment or decree (which was not subsequently reversed, suspended or vacated) of any federal or state authority finding that the individual violated or is in violation of any federal or state securities laws.
Shareholders wishing to recommend candidates to the Nominating Committee should submit such recommendations to the Secretary of the Fund, who will forward the recommendations to the committee for consideration. The submission must include: (i) a brief description of the business desired to be brought before the annual or special meeting and the reasons for conducting such business at the annual or special meeting; (ii) the name and address, as they appear on the Fund’s books, of the shareholder proposing such business or nomination; (iii) a representation that the shareholder is a holder of record of stock of the Fund entitled to vote at such meeting and intends to appear telephonically or by proxy at the meeting to present such nomination; (iv) whether the shareholder plans to deliver or solicit proxies from other shareholders; (v) the class and number of Common Shares of the Fund, which are beneficially owned by the shareholder and the proposed nominee to the Board; (vi) any material interest of the shareholder or nominee in such business; (vii) to the extent to which such shareholder (including such shareholder’s principals) or the proposed nominee to the Board has entered into any hedging transaction or other arrangement with the effect or intent of mitigating or otherwise managing profit, loss, or risk of changes in the value of the Common Shares or the daily quoted market price of the Fund held by such shareholder (including shareholder’s principals) or the proposed nominee, including independently verifiable information in support of the foregoing; and (viii) such other information regarding such nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”). Each eligible shareholder or shareholder group may submit no more than one independent Trustee nominee each calendar year.
The Board has not established any committees other than the Audit Committee and Nominating Committee and does not have a standing compensation committee. The Board believes it is appropriate for the Fund not to have a standing compensation committee because, given the size of the Board, the Independent Trustees are collectively capable of effectively and efficiently fulfilling the obligations that would otherwise be delegated to such committee, without the need for a formal committee structure. The Independent Trustees, acting together as a group, each participate in the consideration of the compensation of trustees and executive officers.
The Board’s Risk Oversight Role
The day-to-day management of various risks relating to the administration and operation of the Fund and the Fund is the responsibility of management and other service providers retained by the Board or by management, most of whom employ professional personnel who have risk management responsibilities. The Board oversees this risk management function consistent with and as part of its oversight duties. The Board performs this risk management oversight function directly and, with respect to various matters, through its committees. The following description provides an overview of many, but not all, aspects of the Board’s oversight of risk management for the Fund. In this connection, the Board has been advised that it is not practicable to identify all of the risks that may impact the Fund or to develop procedures or controls that are designed to eliminate all such risk exposures, and that applicable securities law regulations do not contemplate that all such risks be identified and addressed.
The Board, working with management personnel and other service providers, has endeavored to identify the primary risks that confront the Fund. In general, these risks include, among others: (i) investment risks; (ii) credit risks; (iii) liquidity risks; (iv) valuation risks; (v) operational risks; (vi) reputational risks; (vii) regulatory risks; (viii) risks related to potential legislative changes; (ix) the risk of conflicts of interest affecting affiliates in managing the Fund; and (x) cybersecurity risks. The Board has adopted and periodically reviews various policies and procedures that are designed to address these and other risks confronting the Fund. In addition, many service providers to the Fund have adopted their own policies, procedures, and controls designed to address particular risks to the Fund. The Board and persons retained to render advice and service to the Board, including SS&C ALPS, which provides certain administrative, middle office and transfer agency services to the Fund, and Foreside, which provides third-party compliance officer and treasurer services to the Fund, periodically review and/or monitor changes to, and developments relating to, the effectiveness of these policies and procedures.
The Board oversees risk management activities in part through receipt and review by the Board of regular and special reports, presentations and other information from Officers of the Fund, including the CCOs for the Fund and the Adviser and the Adviser’s Chief Risk Officer, and from other service providers.
Trustee Compensation
Each Trustee is reimbursed for reasonable expenses incurred in connection with each meeting of the Board or Audit Committee meetings attended, as applicable. Each Independent Trustee is compensated for his or her services, on a quarterly basis, according to a fee schedule adopted by the Board. The Board may from time to time designate other meetings as subject to compensation.
For serving on the Board, each Independent Trustee was paid between $3,750 and $5,625 for the fiscal year ended October 31, 2021. Appendix B details the compensation paid to the Trustees by the Fund.
Trustee Ownership of Securities
Appendix C provides the dollar value of all of the shares of the Fund present, virtuallyheld directly or representedindirectly by proxy, at the Meeting, if the holderseach Trustee as of more than 50%a recent date.
Officers of the outstanding sharesFund
The Fund’s officers are elected by the Board and hold office until their successors are chosen and qualified, or until they sooner resign, are removed, or are otherwise disqualified to serve. The officers of the Fund, together with each person’s position with the Fund and principal occupation for the last five years, are so present,listed in Appendix D.
Officer Compensation
The officers, who are also officers or (b) more than 50%employees of Saba Capital or its affiliates, are compensated by Saba Capital or its affiliates. The officers are not paid by the Fund.
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
Who is asking for my vote?
The Board is soliciting your vote for the Annual Meeting of shareholders.
How is my proxy being solicited?
Solicitation of proxies is being made primarily by the mailing of the outstanding sharesNotice of the Fund, whichever is less. Abstentions will have the effectAnnual Meeting of a vote against the changes.
Approval of Change to Investment Objective. The approval of the change requires the affirmative vote of a majority of the Fund’s outstanding voting securities as defined in the 1940 Act. Such a majority means the affirmative vote of the holders of (a) 67% or more of the shares of the Fund present, virtually or represented by proxy, at the Meeting, if the holders of more than 50% of the outstanding shares of the Fund are so present, or (b) more than 50% of the outstanding shares of the Fund, whichever is less. Abstentions will have the effect of a vote against the change.
Adjournment of Special Meeting. Approval of the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies, requires the affirmative vote of the holders of a majority of the votes cast at the Special Meeting. Abstentions will have the effect of a vote against this proposal.
Additional Solicitation. If there are not enough votes to approve the New Management Agreement or to approve Proposals 2, 3, 4 or 5, a majority of the shareholders who are represented may adjourn the Special Meeting to permit the further solicitation of proxies. The persons named as proxies will vote those proxies for such adjournment, unless marked to be voted against the proposal for which an adjournment is sought, to permit the further solicitation of proxies.
Also, a shareholder vote may be taken to approve the New Management Agreement prior to any such adjournment if there are sufficient votes for approval of the New Management Agreement.
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Information Regarding This Solicitation
Saba will bear the costs associated with the board and shareholder approval process, including the costs and expenses incurred in connection with preparing and mailingShareholders, the Proxy Statement, and soliciting the shareholder votes in connection with the Special Meeting.
Proxy Ballot on or about August 9, 2022. In addition to the solicitation of proxies by the usemail, employees of the mail,Saba Capital and its affiliates, without additional compensation, may solicit proxies may be solicited in person and/or by telephone, telegraph, facsimile, or facsimile transmissionoral communications.
If a shareholder wishes to participate in the Annual Meeting, the shareholder may mail the Proxy Ballot originally sent with the Proxy Statement, attend virtually, vote telephonically, or vote online by trustees, officerslogging on to www.proxyvote.com and following the online directions. Should shareholders require additional information regarding the proxy or employeesrequire replacement of the Proxy Ballot, they may contact Broadridge at 855-928-4480.
What happens to my proxy once I submit it?
The Board has named Michael D’Angelo and Nitin Sapru, or one or more substitutes designated by them, as proxies who are authorized to vote Fund and/or officers or employees of Saba. Saba is located at 405 Lexington Ave., 58th Floor, New York, NY 10174. No additional compensation will be paid to trustees, officers or regular employees of the Fund or Saba for such services. Saba has also retained Innisfree M&A Incorporated to assist in the solicitation of proxies for a fee of approximately $20,000 plus reimbursement of certain out of pocket expenses.shares as directed by shareholders.
Any
Can I revoke my proxy given pursuant to this solicitationafter I submit it?
A shareholder may be revoked by notice from the person giving therevoke their proxy at any time before it is exercised. Any such notice ofprior to its use by filing with the Fund a written revocation shouldor a duly executed proxy bearing a later date. In addition, any shareholder who attends the Annual Meeting virtually may vote by ballot at the Annual Meeting, thereby canceling any proxy previously given.
How will my shares be provided in writing and signedvoted?
If you follow the voting instructions, your proxies will vote your shares as you have directed. If you submitted your Proxy Ballot but did not vote on the proposals, your proxies will vote on the proposals as recommended by the shareholderBoard. If any other matter is properly presented, your proxies will vote in the same manner as the proxy being revoked and delivered to the Fund’s proxy tabulator Broadridge Financial Solutions, Inc., at 9:00 a.m. Eastern Time, on May 20, 2021, or submitted by calling toll free at 800-690-6903 or through the Internet website as indicated on the proxy card, prior to 9:00 a.m., Eastern Time, on May 20, 2021.
Preliminary voting results will be announced at the Special Meeting. Final voting results will be included in the semi-annual report of the Fund for the period ended August 31, 2021, which will be sent to Shareholders on or before October 30, 2021.
Appraisal Rights
Shareholders do not have any appraisal rights in connection with the Proposals.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the Record Date, the beneficial ownership of each current trustee, the Fund’s executive officers, each person known to us to beneficially own 5% or more of the outstanding shares, and the executive officers and trustees as a group.
Beneficial ownership is determinedtheir discretion in accordance with the rules of the Securities and Exchange Commission (“SEC”) and includes voting or investment power with respect to the securities. Ownership information for those persons who beneficially own 5% or more of our common shares is based upon Schedule 13G filings by such persons with the SEC and other information obtained from such persons, if available.
Unless otherwise indicated, the Fund believes that each beneficial owner set forth in the table has sole voting and investment power and has the same address as the Fund. The Fund’s current address is 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258.
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Name and Address of Beneficial Owner | Number of Shares Owned Beneficially(1) | Percentage of Class(2) | ||||
Current Executive Officers | ||||||
Michael Bell | – | * | ||||
Dina Santoro | – | * | ||||
Jonathan Nash | – | * | ||||
James M. Fink | – | * | ||||
Kevin M. Gleason | – | * | ||||
Todd Modic | – | * | ||||
Incoming Executive Officers | ||||||
Boaz Weinstein (3) | 27,457,299 | 22.5 | % | |||
Pierre Weinstein | – | * | ||||
Michael D’Angelo | – | * | ||||
Treasurer- Foreside Fund Officer Services, LLC | – | * | ||||
Chief Compliance Officer- Foreside Fund Officer Services, LLC | – | * | ||||
Current Executive officers and trustees as a group | – | * | ||||
Five Percent Owner | ||||||
Saba Capital Management, L.P. | 27,457,299 | 22.5 | % | |||
* Represents less than one percent.
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Set forth below is the dollar range of equity securities beneficially owned by each of our Trustees as of the Record Date.
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Information about the Fund’s Existing Service Providers
Voya Investments, LLC serves as the Fund’s investment adviser and is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258. Voya Investment Management Co. LLC serves as the Fund’s sub-investment adviser and is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258. Voya Investments Distributor, LLC serves as the Fund’s distributor and is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258.
The Fund’s existing service providers will be replaced effective upon completion of the Adviser Transition.
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PROPOSAL I
TO APPROVE THE NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE
FUND AND SABA CAPITAL MANAGEMENT, L.P.
Background
Voya Investments, LLC (“VIL”) currently provides investment advisory services to the Fund pursuant to the current investment management agreement, dated November 18, 2014, as amended and restated on May 1, 2015, between the Fund and VIL (the “Existing Management Agreement”). The Existing Management Agreement was last approved by the Board of Trustees,their best judgment, including a majority of trustees who are not “interested persons,” as such term is defined under the 1940 Act (the “Non-interested Trustees”), on November 20, 2020 and was last approved by a vote of the Shareholders on May 6, 2013.
VIL and the Fund’s current sub-adviser, Voya Investment Management Co. LLC (“Voya IM”), have submitted their respective resignations, effective as of June 22, 2021. The VIL and Voya IM resignations followed a request for proposal process undertaken by a strategic committee established by the Board of Trustees. At this juncture, VIL and Voya IM determined to submit their resignations as adviser and sub-adviser to the Fund, respectively, as they concluded that engaging a new investment manager to be appropriate in light of the Board’s direction for the Fund.
Thus, at meetings of the Board of Trustees of the Fund (the “Board”) held on March 22, 2021 and April 1, 2021, the independent members of the Board, after careful consideration, determined to select Saba to serve as investment manager of the Fund and to assume responsibility for providing the investment management services that are now provided to the Fund by VIL and Voya IM (the “Adviser Transition”) and to approve a New Management Agreement between the Fund and Saba (the “New Management Agreement”) in connection with such Adviser Transition. The New Management Agreement must also be approved by Shareholders to become effective.
The Board, including a majority of non-interested trustees, has approved the New Management Agreement and believes it to be in the best interests of the Fund and its Shareholders. Shareholders are being asked to approve the New Management Agreement between the Fund and Saba. The terms and conditions of the New Management Agreement will be substantially similar to all material terms and conditions of the Existing Management Agreement except for revisions necessary to bring the New Management Agreement in line with recent market precedent in the registered closed-end fund space, and to reflect the fact that the Fund expects to retain a third-party administrator to provide administrative services to the Fund going forward. The differences between the terms of the New Management Agreement and the Existing Management Agreement are discussed in more detail below.
In connection with the Adviser Transition, and as described in Proposals 2, 3, 4 5, 6 and 7, Shareholders are also being asked to approve the removal of certain fundamental policies of the Fund, in order to provide the Fund with greater investment flexibility, and to approve a change to the investment objective of the Fund and to make the investment objective non-fundamental and to allow the Fund to operate as a non-diversified fund subsequent to the Adviser Transition.
Following the Adviser Transition, the Fund’s name will change to Saba Capital Income & Opportunities Fund. However, you will still own the same amount and type of shares in the same Fund. The shares of the Fund will continue to be listed on the New York Stock Exchange, although the ticker symbol will change upon the change in the name of the Fund to BRW.
VIL is contractually obligated to limit expenses of the Fund at a rate of 1.05% of the Fund’s average daily gross asset value, minus the sum of the Fund’s accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares), plus 0.15% of average daily net assets through July 1, 2021. The limitation does not extendproposal to interest, taxes, investment-related costs, leverage expenses, extraordinary expenses, and Acquired Fund Fees and Expenses. The limitation is subject to possible recoupment by VIL within 36 months of the waiver or reimbursement and the amount of the recoupment is limited to the lesser of the amounts
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that would be recoupable under: (i) the expense cap in effect at the time of the waiver or reimbursement; or (ii) the expense cap in effect at the time of recoupment. It is expected that Saba will enter into a substantially similar expense limitation agreement with the Fund, to be effective upon consummation of the Adviser Transition. The expense cap in the Saba expense limitation agreement mirrors that of the Fund’s current expense limitation agreement and therefore the total fees and expenses borne by the Fund are expected to remain the same. The aggregate fees and expenses would, however, increase in the absence of a new expense limitation agreement.
Saba will bear the costs associated with the board and Shareholder approval process, including the costs and expenses incurred in connection with preparing and mailing the Proxy Statement and soliciting the Shareholder votes in connection with the Special Meeting.
There will be no changes to the Fund’s distribution policy in connection with the Adviser Transition. To the extent that the Fund has income available, it intends to continue to distribute monthly dividends to its Shareholders. The amount of the Fund’s distributions, if any, will be determined by its Board. Any distributions to the Fund’s Shareholders will be declared out of assets legally available for distribution.
To the extent Proposal 6 – Adjournment of the Special Meeting is approved by the Fund’s Shareholders, the Fund may adjourn the Special Meeting and seek additional proxies to vote on Proposal 1, as necessary. If Proposal 1 is not approved bymeeting. At the Fund’s Shareholders, the Board will consider such other actions, including the approval of an investment management agreement with a firm other than Saba, as it determines to be in the best interests of the Fund and Shareholders. The Board may determine to approve an interim investment management agreement to enable Saba to serve as investment adviser of the Fund following the resignation of VIL. However, an interim agreement may remain in effect for a period of not more than 150 days, and a new investment management agreement must be approved by the Board and by Shareholders for Saba to continue to serve as adviser to the Fund after expiration of the term of the interim agreement
Benefits of the Adviser Transition
In evaluating the New Management Agreement, the Board of Trustees, the Board of Trustees considered materials detailing Saba’s background and investment experience as a firm generally, as well as the experience of its senior management team.
Saba is a registered investment adviser founded in 2009. Saba is a spin-out of a proprietary investing group founded by Boaz Weinstein at Deutsche Bank in 1998. Saba manages $3.2 billion across four core strategies: Credit Relative Value, Tail Hedge, SPACs and Closed-End Funds. Saba’s investors are predominantly institutions and include public and corporate pension plans, endowments and foundations, family offices, banks and insurers, bank private wealth platforms, fund of funds and certain high net worth individuals.
Upon consummation of the Adviser Transition, the Fund will be led by the senior management team of Saba, including Boaz Weinstein, Pierre Weinstein, Andrew Kellerman, Michael D’Angelo, Xavier Riera and Nitin Sapru. Boaz Weinstein will replace Dina Santoro as President of the Fund and Pierre Weinstein will replace Michael Bell as Chief Executive Officer. Boaz Weinstein, Pierre Weinstein (no relation to Boaz) and Paul Kazarian will serve as portfolio managers of the Fund.
The Board of Trustees discussed Saba’s qualifications and considered its philosophy of management, historical performance, and methods of operations, and considered the following potential benefits to the Fund and its Shareholders:
The Fund may benefit from Saba’s extensive expertise in the credit space generally.
The Fund may also benefit from Saba’s sophisticated investment advisory platform and resources, including its experience analyzing alternative opportunistic investments that may provide attractive risk-adjusted returns in addition to the Fund’s core credit focus.
Saba is well capitalized and is able to attract and retain personnel necessary to provide quality management services to the Fund.
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Summary of the Terms of the Existing Management Agreement and New Management Agreement
A copy of the New Management Agreement is attached totime this Proxy Statement as Appendix A. The following description of the terms of the New Management Agreement is only a summary of its material terms and explicitly highlights all material differences between the New Management Agreement and the Existing Management Agreement. You should refer to Appendix A for the New Management Agreement.
Following approval by the Shareholders in the manner required by the 1940 Act, the New Management Agreement will be entered into on the date of the Special Meeting, May 21, 2021, but in no event later than June 22, 2021, concurrent with completion of the Adviser Transition. The New Management Agreement will remain in effect for a period of two (2) years from the date it is signed, unless sooner terminated. After the initial two-year period, continuation of the New Management Agreement from year-to-year is subject to annual approval bywas printed, the Board knew of Trustees, including at least a majority of the Non-interested Trustees.
Advisory and Other Services. Under the terms of the Existing Management Agreement, subjectno matter that needed to the supervision of the Board of Trustees, VIL manages the Fund’s day-to-day operations of, and provides investment advisory services to the Fund, in each case in accordance with the Fund’s investment objectives, policies and restrictions. Pursuant to the Existing Management Agreement, VIL: (i) furnishes the Fund with advice and recommendations with respect to the investment of the Fund’s assets and the purchase and sale of its portfolio securities, including the taking of such other steps as may be necessary to implement such advice and recommendations, (ii) furnishes the Fund with reports, statements and other data on securities, economic conditions and other pertinent subjects which the Board of Trustees may request, (iii) permits its officers and employees to serve without compensation as Trustees of the Fund if elected to such positions and (iv) in general superintends and manages the investment of the Fund, subject to the ultimate supervision and direction to the Board of Trustees. Subject to the approval of the Board of Trustees of the Trust, VIL is authorized to enter into sub-advisory agreements with other registered investment advisers to serve as investment sub-advisers, whether or not affiliated with VIL (each, a “Sub-Adviser”). VIL has responsibility for all services furnished pursuant to any sub-advisory agreement and, among other things: (i) continually evaluates the performance of any Sub-Adviser to the Fund; and (ii) periodically makes recommendations to the Board of Trustees regarding the results of its evaluation and monitoring functions. Saba will continue to provide these services under the New Management Agreement.
The Existing Management Agreement also provides for VIL to provide certain administrative services to the Fund, oracted upon at the expense of VIL, to retainAnnual Meeting other than the services of a third party as its delegate to provide such administrative services. Pursuant to the New Management Agreement, Saba will provide, or arrange for the provision by a third party services provider of, such administrative services. Saba has indicated that it intends to arrange for the Fund to retain a third-party administrator and certain other third-party service providers to furnish the administrative services referencedproposal discussed in the New Management Agreement.
Management Fees. In consideration of the services provided by VIL to the Fund, under the Existing Management Agreement, the Fund pays VIL a management fee computed at the annual rate of 1.05% of the Fund’s average daily gross asset value, minus the sum of the Fund’s accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares) (“Managed Assets”). The management fees is accrued daily by the Fund and paid to the investment adviser at the end of each calendar month. The same fee will be payable by the Fund to Saba under the New Management Agreement. During the fiscal year ended February 28, 2021, the Fund paid to VIL approximately $9,291,687 in management fees.
VIL is contractually obligated to limit expenses of the Fund at a rate of 1.05% of the Fund’s average daily Managed Assets, plus 0.15% of average daily net assets through July 1, 2021. The limitation does not extend to interest, taxes, investment-related costs, leverage expenses, extraordinary expenses, and Acquired Fund Fees and Expenses. The limitation is subject to possible recoupment by VIL within 36 months of the waiver or reimbursement and the amount of the recoupment is limited to the lesser of the amounts that would be recoupable under: (i) the expense cap in effect at the time of the waiver or reimbursement; or (ii) the expense cap in effect at the time of recoupment. It is expected that Saba will enter into a substantially similar expense limitation agreement with the Fund, to be effective upon the Adviser
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Transition, a form of which is attached as Appendix B to this Proxy Statement (the “New Expense Limitation Agreement”). The expense cap in the Saba expense limitation agreement mirrors that of the Fund’s current expense limitation agreement and therefore the total fees and expenses borne by the Fund are expected to remain the same. The aggregate fees and expenses would, however, increase in the absence of a new expense limitation agreement.
Expenses. Under the Existing Management Agreement, VIL pays all of its expenses arising from the performance of its obligations under the Existing Management Agreement, including executive salaries and expenses of the Trustees and officers of the Fund who are employees of VIL or its affiliates, except the Fund’s Chief Compliance Officer. VIL pays the fees of Voya IM. The Fund pays expenses, such as legal, audit, transfer agency and custodian out-of-pocket fees, proxy solicitation costs, and the compensation of Trustees who are not affiliated with VIL. Pursuant to the New Management Agreement, Saba will pay the following expenses: (i) the compensation of any sub-adviser retained pursuant to New Management Agreement, and (ii) the compensation of any investment advisory personnel that provide services to the Fund on behalf of Saba pursuant to the Agreement, along with the allocable portion of the following “overhead expenses” (office space, rent and utilities, furniture and fixtures, computer equipment, stationery, secretarial/managerial services, salaries, entertainment expenses, employee insurance and payroll taxes) attributable to such investment advisory personnel. Subject to application of the New Expense Limitation Agreement, the Fund will be responsible for all other costs and expenses of its operations and transactions, including:
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Bank service fees, clearing and settlement charges and interest expense; Management Fees; fees and expenses incidental to the purchase and sale of interests in, and the fees and expenses of, portfolio companies in which the Trust invests;
Interest payable on debt, if any, to finance the Fund’s investments;
Expenses relating to software tools, programs or other technology utilized in managing the Fund (including, without limitation, third-party software licensing, implementation, data management and recovery services and custom development costs);
Exchange listing fees, expenses relating to proxy contests, voting, tender offers and solicitation fees and expenses;
Trading platform and seat fees; research-related expenses, including, without limitation, news and quotation equipment and services;
Fees and expenses associated with independent audits and outside legal costs;
Fees for data and software providers; other expenses related to the purchase, sale or transmittal of investments; website creation and maintenance, fees for risk management systems and service providers; legal expenses;
Other professional fees (including, without limitation, expenses of consultants and experts);
Transfer agent and custodial fees;
The costs of organizing and maintaining any subsidiaries;
Fees and expenses associated with marketing and investor relations efforts including proxy solicitations and shareholder meetings;
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Costs relating to swaps (and similar agreements); tax preparation expenses; accounting expenses;
Costs of printing and mailing proxies, reports and/or notices; market data costs; administration expenses (including fees for the provision of middle-office and back-office services);
Directors’ and officers’ fees;
Fund-related insurance expenses (including, without limitation, premium payments for fidelity bonds and Directors’ and Officers’ and Errors and Omissions insurance);
Compensation and expenses of the independent members of the Board of Trustees of the Fund;
Organizational and offering-related expenses, including the preparation and filing of related registration statements under the Securities Act of 1933, as amended;
Filing and registration fees; corporate licensing fees, federal, state and local taxes and other governmental fees and expenses;
All regulatory expenses (including, without limitation, fees and expenses incurred in connection with ongoing compliance obligations and the preparation and filing of regulatory filings, including those required under the 1940 Act and applicable federal and state securities laws); litigation-related and indemnification expenses; withholding and transfer fees;
Trademarks;
Other expenses related to the purchase, monitoring, sale, allocation, settlement, custody, valuation, appraisal or transmittal of assets;
Extraordinary expenses, including the costs of any third party pricing or valuation services;
The allocable portion of the compensation and related overhead expenses attributable to any director, officer, partner or employee of the Manager or any affiliate thereof when and to the extent providing administrative services to the Fund; and
Other similar expenses and all other costs and expenses incurred in connection with the engagement of any third party service providers to provide administrative services to the Fund.
Term, Continuance and Termination. The continuance and termination provisions under the New Management Agreement are substantially the same as the continuance and termination provisions under the Existing Management Agreement. Consistent with the Existing Management Agreement, unless terminated as provided therein, the New Management Agreement shall continue from year to year so long as such continuation is approved at least annually by (i) the Trustees of the Fund 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 Fund who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval. The New Management Agreement may also be terminated at any time, without the payment of any penalty, by the action of the Board of Trustees or by a vote of a majority of the Fund’s outstanding voting securities, on 60 days’ written notice to Saba, or by Saba at any time, without the payment of any penalty, on 60 days’ written notice to the Fund. As with the Existing Management Agreement, the New Management Agreement shall terminate automatically in the event of any transfer or assignment thereof, as defined in the 1940 Act, as amended.
Indemnification. The Existing Management Agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of VIL, VIL shall not be subject to liability to the Fund, or to any Shareholder of the Fund, for any act or omission in the course of, or connected with, rendering advisory services under the agreement or for any losses that may be sustained in the purchase, holding or
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sale of any security by the Fund. The New Management Agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of Saba, Saba (and its officers, managers, agents, employees, partners, controlling persons, members, and any other person or entity affiliated with the Saba) shall not be subject to liability to the Fund, the members of the Board of Trustees or to anyEach shareholder of the Fund is entitled to one vote for any act or omission in the course of, or connected with, rendering advisory services and any other services provided from time to time by Saba or for any losses that may be sustained in the purchase, holding or sale of any security by the Fund.
The Existing Management Agreement contains the following provision, which is not contained in the New Management Agreement: VIL agrees to reimburse the Fund for any and all costs, expenses, and counsel and Trustees’ fees reasonably incurred by the Fund in the preparation, printing and distribution of proxy statements, amendments to its Registration Statement, the holding of meetings of its Shareholders or Trustees, the conduct of factual investigations, any legal or administrative proceedings (including any applications for exemptions or determinations by the Securities and Exchange Commission) which the Fund incurseach share held as a result of action or inaction of the investment adviser or any of its Shareholders where the action or inaction necessitating such expenditures: (1) is directly or indirectly related to any transactions or proposed transaction in the shares or control of the investment adviser or its affiliates (or litigation related to any pending or proposed future transaction inmatter on which such shares or control) which shall have been undertaken without the prior, express approval of the Fund’s Trustees, or (2)shareholder is within the sole control of the investment adviser or any of its affiliates or any of their officers, trustees, employees or shareholders. The investment adviser shall not be obligated to reimburse the Fund for any expenditures related to the institution of an administrative proceeding or civil litigation by the Fund or by a Fund Shareholder seeking to recover all or a portion of the proceeds derived by any shareholder of the investment adviser or any of its affiliates from the sale of his shares of the investment adviser, or similar matters. So long as this Agreement is in effect, the investment adviser shall pay to the Fund the amount due for expenses within thirty (30) days after a bill or statement has been received by the Fund therefor. This provision shall not be deemed to be a waiver of any claim the Fund may have or may assert against the investment adviser or others or costs, expenses, or damages heretofore incurred by the Fund for costs, expenses, or damages the Fund may hereafter incur which are not reimbursable to it hereunder.
The New Management Agreement also provides that the Fund shall indemnify Saba (and its officers, managers, agents, employees, partners, controlling persons, members, and any other person or entity affiliated with Saba) (collectively, the “Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Fund or its security holders) arising out of or otherwise based upon the performance of any of Saba’s duties or obligations under the agreement or otherwise as an investment adviser of the Fund. Nothing contained in this indemnification provision shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Fund or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Manager’s duties or by reason of the reckless disregard of Saba’s duties and obligations under the New Management Agreement.
Board Consideration of the Approval of the New Management Agreement
At an executive session held on November 20, 2020 and subsequent to a meeting of the Board held on November 20, 2020, the Board formed a Special Planning Committee (the “SPC”) to, among other things, review and make recommendations regarding the Fund including, conducting a search for a new investment manager to replace the then current manager and its affiliated sub-adviser. After an extensive process, the SPC recommended to the Board, including all of the Non-interested Trustees, that they consider approving the New Management Agreement. At a special meeting of the Board held on March 22, 2021, the Board, including all of the Non-interested Trustees, determined to select Saba as the new investment adviser to the Fund, and at a subsequent special meeting of the Board held on April 1, 2021, considered and approved the New Management Agreement in the form attached hereto as Appendix A. In determining to approve the New Management Agreement, the Board discussed and considered materials which had been
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distributed to them in advance of the meeting and prepared by Saba, including responses to a questionnaire provided by the Fund’s independent counsel with respect to certain matters that counsel believed relevant to the approval of the New Management Agreement under Section 15 of the 1940 Act. In addition, the Board met with representatives from Saba and had the opportunity to ask them questions.
Matters considered by the Board in connection with its approval of the New Management Agreement included, among others, the following:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of services proposed to be provided to the Fund under the New Management Agreement. The Board discussed the prior experience of Saba with respect to managing certain private investment funds and separately managed accounts and, with respect to an ETF, serving as the sub-adviser, each such investment product with investment strategies similar to the strategy proposed by Saba for the Fund. The Board discussed the written information provided by Saba and the information presented orally at the Meeting by Saba, including information with respect to its anticipated profitability, compliance program, insurance arrangements, personnel and portfolio management, risk management policies, brokerage allocation and soft dollar practices. The Board concluded that, overall, they were satisfied with the nature, extent and quality of services expected to be provided to the Fund by Saba under the proposed New Management Agreement.
Performance. In considering whether to approve the New Management Agreement, the Board reviewed the investment performance over the past year, three-year, five-year and since-inception periods of two of Saba’s accounts having a similar investment strategy as the strategy proposed for the Fund, and an example provided by Saba using a combination of the two portfolios, which Saba believed more accurately reflects the proposed investment strategy for the Fund. The Board expressed their belief that given Saba’s historical reported returns for other investment products that they advise and, based on the estimated higher Sharpe ratio for the combined portfolio, they anticipated that Saba should be able to provide the Fund and its shareholders with superior risk-adjusted returns. The Sharpe ratio represents the additional amount of return that an investor receives per unit of increase in risk (defined as the difference between the return of the portfolio and the risk-free rate of return, divided by the standard deviation of the portfolio). The Board also noted the experience of the principals of Saba in managing securities portfolios, as well as their longstanding experience in seeking out opportunities in the market that have attractive risk reward characteristics.
Fees and Expenses. In reviewing the anticipated fees and expenses for the Fund, the Board noted that the proposed management fee would remain the same as the current management fee payable under the Fund’s investment management agreement with the current manager which included fees paid to the manager’s affiliated sub-adviser for day to day management of the Fund’s portfolio. The Board also noted that Saba proposed entering into an expense limitation agreement with the Fund such that the expense limitation currently in place would remain unchanged. The Board considered that the proposed management fee was comparable to fees paid by other funds in the Fund’s Peer Group, a group consisting of the Fund and ten other bank loan funds, as identified by Broadridge Financial Solutions, Inc., an independent third party data provider that provided the Board in November, 2020 with such comparative data, and that it would be among the lowest total fees that Saba receives across its platform for providing similar investment management services. The Board separately determined that the proposed management fee payable to Saba was not unreasonable in light of the nature, extent and quality of the services that Saba is expected to provide. Based on the factors above, the Board concluded that the management fee was not unreasonable.
Profitability. Saba provided the Board with a summary and analysis of the Saba’s anticipated costs and pre-tax profitability with respect to the management of the Fund for the first twelve month and first twenty-four month periods. The Board was satisfied with Saba’s estimates regarding the level of profitability that it was seeking from managing the Fund and that the projections were sufficient and appropriate to provide the necessary advisory and management services to the Fund. The Board concluded that the Saba’s projected profitability from its relationship with the Fund, after taking into account a reasonable allocation of costs, was not excessive.
Economies of Scale. The Board considered whether Saba would realize economies of scale with respect to the management services provided to the Fund. The Board noted that the Fund, as a closed-end fund, generally does not issue new shares and is less likely to realize economies of scale from additional share purchases. The Board considered that
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Saba believed that there could be economies of scale realized if the Fund did grow in size and there was an opportunity for Saba to push certain third-party service provider fees down and negotiate for certain lower fees in the service contracts with these third parties. The Board also considered the extent to which economies of scale realized by Saba could be shared with the Fund through fee waivers and expense reimbursements.
Other Benefits. The Board considered the character and amount of other direct and incidental benefits to be received by Saba and its affiliates from their association with the Fund. The Board considered that Saba anticipated no other sources of income or benefit in connection with managing the Fund and did not expect to market the Fund to its existing private clients or use soft dollars to any notable extent.
Conclusion. The Board, having requested and received such information from Saba as it believed reasonably necessary to evaluate the terms of the New Management Agreement, and having been advised by its Independent Counsel that the Board had appropriately considered and weighed all relevant factors, determined that approval of the New Management Agreement was in the best interests of the Fund and its shareholders. In considering the approval of the New Management Agreement, the Board considered a variety of factors, including those discussed above, and also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the closed-end fund industry). None of the factors weighed against the approval of the New Management Agreement. The Board did not identify any one factor as determinative, and different Board members may have given different weight to different individual factors and related conclusions.
After these deliberations on April 1, 2021, the Board, including a majority of the Non-interested Trustees, approved the New Management Agreement between Saba and the Fund as in the best interests of the Fund and its Shareholders. The Board of Trustees then directed that the New Management Agreement be submitted to the Fund’s Shareholders for approval with the Board of Trustees’ recommendation that Shareholders vote to approve the New Management Agreement.
Information Regarding Saba
Saba is a registered investment adviser founded in 2009. Saba is a spin-out of a proprietary investing group founded by Boaz Weinstein at Deutsche Bank in 1998. Saba manages $3.2 billion across four core strategies: Credit Relative Value, Tail Hedge, SPACs and Closed-End Funds. Saba’s investors are predominantly institutions and include public and corporate pension plans, endowments and foundations, family offices, banks and insurers, bank private wealth platforms, fund of funds and certain high net worth individuals. Additional information about Saba is set forth in Saba’s Form ADV.
The following chart sets forth the name, address and principal occupation of the senior professionals of Saba:
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*The address of each individual listed is 405 Lexington Ave., 58th Floor, New York, NY 10174.
Following the Adviser Transition, Boaz Weinstein, Pierre Weinstein (no relation to Boaz) and Paul Kazarian will serve as the Fund’s portfolio managers and will have sole investment and dispositive control over all of portfolio Fund investments held by the Fund as of the Adviser Transition and over all other new investments.
Boaz Weinstein is the founder and Chief Investment Officer of Saba. Mr. Weinstein founded Saba in 2009 as a lift-out of Saba Principal Strategies. At Saba, Mr. Weinstein leads a team of 30 professionals, with the senior investment
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team having worked together for fifteen years. Prior to founding Saba, Mr. Weinstein was Co-Head of Global Credit Trading at Deutsche Bank. In that role he was responsible for co-managing a group of approximately 650 professionals and was a member of the Global Markets Executive Committee. Throughout his career at Deutsche Bank, Mr. Weinstein had dual responsibility for proprietary trading and market making. In proprietary trading, he founded Saba Principal Strategies to specialize in credit and capital structure investing. As a market-maker, he focused on credit default swaps, investment grade bonds, and high yield bonds. Mr. Weinstein worked at Deutsche Bank for eleven years, the last eight as Managing Director, a title he received at age 27. Mr. Weinstein graduated from the University of Michigan, Ann Arbor, with a BA in Philosophy.
Pierre Weinstein joined Saba at launch in April 2009. Prior to Saba, Mr. Weinstein was a Portfolio Manager at Saba Principal Strategies, the proprietary credit trading group at Deutsche Bank since January 2005, where he managed the equity derivatives, international convertible bond and SPAC arbitrage strategies. Mr. Weinstein started his investment career at Société Générale in Paris in 1998 as an equity derivatives market maker and had various roles until 2004 including a position as a convertible bond proprietary trader in New York. Mr. Weinstein holds a Ms in Engineering from École Centrale Lyon and a Ms in Finance from École HEC in Paris.
Paul Kazarian joined Saba in March 2013 and is responsible for Exchange Traded products, including ETF arb and Closed-End Funds. Prior to Saba, Mr. Kazarian was a Director at RBC Capital Markets in the Global Arbitrage and Trading Group from 2007-2013. While there, Mr. Kazarian was responsible for the development and management of the Fixed Income ETF Group and also responsible for overseeing other ETF and index strategies. Prior to RBC, Mr. Kazarian worked as a technology analyst at Merrill Lynch from 2006-2007. Mr. Kazarian holds a BA in Political Science from Bates College.
Principal Executive Offices
The principal executive office of Saba is 405 Lexington Ave, Suite 58, New York, NY 10174. Upon the consummation of the Adviser Transition, the principal executive office of each of the Fund and Saba will also be 405 Lexington Ave, Suite 58, New York, NY 10174.
Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote atand for each fractional share that is owned, the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote ofshareholder shall be entitled to a proportionate fractional vote. A majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve the New Management Agreement. For purposes of approval of the New Management Agreement, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect ofshall constitute a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
Conflicts of Interests of Our Trustees and Officers in the Adviser Transition
Two members of the Board of Trustees, Andrew Kellerman and Aditya Bindal, are employed by Saba and have conflicts of interests in connection with the vote on the New Management Agreement. As a result of such conflicts, a special committee consisting solely of Trustees who have no affiliation with Saba initially reviewed Saba’s proposal to become investment adviser to the Fund, and recommended Saba’s appointment to the full Board. There are no other conflicts of interest.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
THE NEW MANAGEMENT AGREEMENT BETWEEN THE FUND AND SABA
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PROPOSAL IIAdjournments
TO REMOVE THE FUND’S FUNDAMENTAL INVESTMENT RESTRICTION RELATING TO
INVESTING IN WARRANTS
The Fund has adopted the following investment restriction as a fundamental policy, which can only be changed by a vote of the Fund’s shareholders:
The Fund will not invest in marketable warrants other than those acquired in conjunction with Senior Loans and such warrants will not constitute more than 5% of assets.
Although the Fund does not currently have any current intention to purchase warrants in excess of 5% of its net assets, the Board recommends that Fund shareholders approve removing the above investment related restriction to provide the Fund with maximum flexibility in the event of future changes to its investment strategy. In addition, there is no federal requirement that the Fund have a fundamental investment restriction regarding warrants.
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By unanimous written consent, dated April 19, 2021, the Board of Trustees (including a majority of the Non-interested Trustees) voted to recommend that the fundamental investment restriction regarding warrants be removed.
Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve this proposal. For purposes of approval, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
REMOVING A FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
WARRANTS
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PROPOSAL III
TO REMOVE THE FUND’S FUNDAMENTAL INVESTMENT RESTRICTION RELATING TO PURCHASING OR SELLING EQUITY SECURITIES, ENGAGING IN SHORT-SELLING AND
THE USE OF CERTAIN OPTION ARRANGEMENTS
The Fund has adopted the following investment restriction as a fundamental policy, which can only be changed by a vote of the Fund’s shareholders:
The Fund will not purchase or sell equity securities (except that the Fund may, incidental to the purchase or ownership of an interest in a Senior Loan, or as part of a borrower reorganization, acquire, sell and exercise warrants and/or acquire or sell other equity securities), real estate, real estate mortgage loans, commodities, commodity futures contracts, or oil or gas exploration or development programs; or sell short, purchase or sell straddles, spreads, or combinations thereof, or write put or call options.
The Board recommends that Fund shareholders approve removing the restriction relating to the purchase and sale of equity securities by the Fund, engaging in short-selling and the use of certain option arrangements included in the foregoing, in order to maximize the Fund’s investment flexibility. There is no federal requirement that the Fund have a fundamental investment restriction regarding equity securities, engaging in short-selling or the use of option arrangements. The investment restriction, as proposed to be revised, is set forth below:
The Fund will not purchase or sell real estate, real estate mortgage loans, commodities, commodity futures contracts, or oil or gas exploration or development programs.
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By unanimous written consent, dated April 19, 2021, the Board of Trustees (including a majority of the Non-interested Trustees) voted to recommend that the fundamental investment restriction regarding the purchase and sale of equity securities, engaging in short-selling and the use of certain option arrangements be removed.
Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve this proposal. For purposes of approval, “a majority of outstanding common
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shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
REMOVING A FUNDAMENTAL INVESTMENT RESTRICTION REGARDING PURCHASING
OR SELLING EQUITY SECURITIES, ENGAGING IN SHORT-SELLING AND THE USE OF CERTAIN OPTION ARRANGEMENTS.
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PROPOSAL IV
TO REMOVE THE FUND’S FUNDAMENTAL INVESTMENT RESTRICTION RELATING TO INVESTING IN OTHER INVESTMENT COMPANIES
The Fund has adopted the following investment restriction as a fundamental policy, which can only be changed by a vote of the Fund’s shareholders:
The Fund will not purchase shares of other investment companies, except in connection with a merger, consolidation, acquisition or reorganization.
In view of Saba’s intent to seek to have the Fund invest at least a portion of its portfolio in registered closed-end investment companies, the Board recommends that Fund shareholders approve removing the above investment related restriction to provide the Fund with the flexibility to fully implement Saba’s proposed investment objective and strategies subsequent to the Adviser Transition. In addition, there is no federal requirement that the Fund have a fundamental investment restriction regarding investments in other investment companies.
Notably, in the event the foregoing investment restriction is removed, the Fund will remain subject to limitations imposed under the 1940 Act with respect to its ownership of other investment companies. In particular, pursuant to Section 12(d)(1) under the 1940 Act, at the time the Fund acquires a share of any other registered investment company, the Fund may not hold more than 3% of the outstanding voting equity of that registered investment company, the Fund’s investments in that registered investment company may not exceed 5% of its total assets, and its aggregate investments in other registered investment companies may not exceed 10% of its total assets.
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By unanimous written consent, dated April 19, 2021, the Board of Trustees (including a majority of the Non-interested Trustees) voted to recommend that the fundamental investment restriction regarding investments in other investment companies be removed.
Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve this proposal. For purposes of approval, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
REMOVING A FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
INVESTMENTS IN OTHER INVESTMENT COMPANIES
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PROPOSAL V
TO APPROVE CHANGING THE FUND’S SUB-CLASSIFICATION UNDER THE INVESTMENT COMPANY ACT OF 1940 FROM “DIVERSIFIED” TO “NON-DIVERSIFIED;
Background
The Fund is currently classified as a “diversified” fund under the 1940 Act. As a diversified fund, the Fund is generally limited as to the size of its investment in any single issuer. The 1940 Act sets forth the requirements that must be met for an investment company to be diversified. The 1940 Act requires that to qualify as a “diversified” fund, a fund may not, with respect to at least 75% of the value of its total assets, invest in securities of any issuer if, immediately after the investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of that issuer or the fund would hold more than 10% of the outstanding voting securities of the issuer. (Under the 1940 Act, these percentage limitations do not apply to cash or cash items (including receivables), securities issued by investment companies, or any “Government security.” A Government security is any security issued or guaranteed as to principal or interest by the United States, or by a person controlled or supervised by and acting as an instrumentality of the government of the United Sates pursuant to authority granted by the Congress of the United Sates, or any certificate of deposit for any of the forgoing.) The remaining 25% of the fund’s total assets is not subject to this restriction. This means that, with respect to the remaining 25% of the fund’s total assets, a diversified fund may invest more than 5% of its total assets in the securities of one issuer and may hold more than 10% of an issuer’s outstanding voting securities. These 1940 Act requirements do not apply to an investment company that is non-diversified. As a result, compared with a non-diversified fund, a diversified fund would be generally expected to have lesser exposures to individual portfolio securities.
The Board recommends that Shareholders of the Fund approve a change in the Fund’s sub-classification under the 1940 Act from “diversified” to “non-diversified.” As a non-diversified fund, the Fund would have greater flexibility to invest more of its assets in the securities of fewer issuers than it currently does as a diversified fund. However, as a non-diversified fund, the Fund would be exposed to non-diversification risk, as its ability to invest more of its assets in the securities of fewer issuers would increase its vulnerability to factors affecting a single investment. If Shareholders approve this change, the Fund’s fundamental investment policy regarding diversification of investments will be changed to reflect that the fund is non-diversified.
The Trustees, subject to Shareholder approval, have approved the proposed change to the Fund’s sub-classification from a diversified fund to a non-diversified fund. In recommending that Shareholders approve this change, the Trustees considered Saba’s representation that this change would allow Saba to more effectively manage the fund in the best interests of the Fund’s shareholders following the Adviser Transition (assuming that Proposal 1 is approved by Shareholders), including because it would allow the Fund to invest more of its assets in the securities of fewer issuers. The Trustees observed Saba’s view that the proposed change is more consistent with Saba’s overall emphasis on active management and stock selection for the Fund and is also better aligned with anticipated demand from current and prospective Shareholders.
Under the 1940 Act, shareholder approval is required to permit the fund to change its sub-classification from diversified to non-diversified. Assuming shareholder approval, the proposed change in the Fund’s sub-classification will take effect upon the Adviser Transition.
By unanimous written consent, dated April 20, 2021, the Board of Trustees (including a majority of the Non-interested Trustees) voted to recommend that that the Fund change sub-classification under the Investment Company Act of 1940 from “diversified” to “non-diversified.”
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Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve this proposal. For purposes of approval, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” CHANGING THE FUND’S SUB-CLASSIFICATION FROM “DIVERSIFIED” TO “NON-DIVERSIFIED.”
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PROPOSAL VI
TO APPROVE A CHANGE TO THE INVESTMENT OBJECTIVE AND TO MAKE THE
INVESTMENT OBJECTIVE NON-FUNDAMENTAL
The current investment objective of the Fund is that it seeks to provide investors with as high a level of current income as is consistent with the preservation of capital. The investment objective is fundamental and may not be changed without a majority vote of the shareholders of the Fund.
The Fund (after feedback from the proposed investment adviser (Saba)) is proposing that the Fund’s investment objective be amended from the objective as stated above to indicate that the Fund “seeks to provide investors with a high level of current income, with a secondary goal of capital appreciation” and to change its investment objective to a non-fundamental policy that may be changed by the Board without shareholder approval upon 60 days’ prior written notice to shareholders.
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A vote in favor of Proposal 5 also constitutes a vote in favor of making the Fund’s investment objective a non-fundamental policy of the Fund. As a non-fundamental policy of the Fund, any future changes to the investment objective may be made by the Board without shareholder approval upon prior notice to shareholders. The Fund’s current investment objective is a fundamental policy of the Fund, which means that any changes to the Fund’s current investment objective are subject to shareholder approval. Changing the Fund’s investment objective to a non-fundamental policy of the Fund would give the Board more flexibility to make appropriate changes to the Fund’s investment objective in a timely manner without having to incur the cost of soliciting and obtaining shareholder approval.
The Board noted that the proposed new investment objective is, as indicted by Saba, is more consistent with the investment strategies that have been approved by the Board, which are described more fully after this section.
By unanimous written consent, dated April 19, 2021, the Board of Trustees (including a majority of the Non-interested Trustees) voted to recommend that that the Fund change its investment objective and to make the investment objective non-fundamental.
Required Vote
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Fund’s only voting securities are common shares, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding common shares entitled to vote at the Special Meeting is required to approve this proposal. For purposes of approval, “a majority of outstanding common shares” is the lesser of: (i) 67% or more of the common shares present at the Special Meeting if the holders of more than 50% of the outstanding common shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
CHANGING THE INVESTMENT OBJECTIVE AND MAKING THE INVESTMENT
OBJECTIVE NON-FUNDAMENTAL
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PROPOSAL VII
ADJOURNMENT OF THE SPECIAL MEETING
Shareholders may be asked to consider and act upon one or more adjournments of the Special Meeting, if necessary or appropriate, to solicit additional proxies in favor of any or all of the other proposals set forth in this proxy statement.
If a quorum is not present at the SpecialAnnual Meeting, if there are insufficient votes to approve the ShareholdersProposal, or for any other reason deemed appropriate by your proxies, your proxies may propose one or more adjournments of the Annual Meeting to permit additional time for the solicitation of proxies. Solicitation of votes may continue to be askedmade without any obligation to provide any additional notice of the adjournment. The persons named as proxies will vote in favor of such adjournments in their discretion.
Broker Non-Votes and Abstentions
If a shareholder abstains from voting as to any matter, or if a broker returns a “non-vote” proxy, indicating a lack of authority to vote on a matter, then the proposal to adjourn the Special Meeting to solicit additional proxies. If a quorum isshares represented by such abstention or non-vote will be treated as shares that are present at the SpecialAnnual Meeting but there arefor purposes of determining the existence of a quorum. However, abstentions and broker non-votes will be disregarded in determining the “votes cast” on a proposal. Abstentions and broker non-votes will not sufficient votes ataffect the timeoutcome of the Special Meeting to approveelection of Trustees.
How many shares are outstanding?
Appendix E sets forth the proposals, the Shareholders may also be asked to vote on the proposal to approve the adjournmentnumber of shares of the Special Meeting to permit further solicitation of proxies in favorFund issued and outstanding as of the other proposals.Record Date. Shares have no preemptive or subscription rights.
If
Appendix F lists the adjournment proposal is submitted for a vote at the Special Meeting, and if the Shareholders vote to approve the adjournment proposal, the meeting will be adjourned to enable the Board of Trustees to solicit additional proxies in favorpersons that, as of the proposals. IfRecord Date, owned beneficially or of record 5% or more of the adjournment proposal is approved, andoutstanding shares of the Special Meeting is adjourned,Fund. To the Boardbest of the Fund’s knowledge, as of the Record Date, no Trustee or officers owned 1% or more of the outstanding shares of the Fund. As of the Record Date, none of the Independent Trustees will usenor their immediate family members owned any shares of the additional time to solicit additional proxies in favorAdviser or principal underwriter or of any entity controlling, controlled by, or under common control with the Adviser or principal underwriter (not including registered investment companies).
Reverse Stock Split
On May 20, 2022 the Fund undertook a reverse stock split (the “Reverse Split”) of its common shares at a ratio of 1-for-2, such that every two shares of the proposals to be presented atFund's issued and outstanding common shares was converted into one common share. Upon completion, the Special Meeting, including the solicitation of proxies from Shareholders that have previously voted against the relevant proposal.
The Board of Trustees believes that, ifReverse Split reduced the number of the Fund’sFund's authorized common shares voting in favor of anyfrom 85,058,986 shares to 42,529,493 shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the proposals presented at the Special Meeting is insufficient to approve a proposal, it is in the best interests1934 Act and Section 30(h) of the Shareholders1940 Act, as applied to enable the Board ofFund, require the Fund’s officers, Trustees, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes in favorinvestment adviser, affiliates of the proposal. Any signed proxies received by the Fund in which no voting instructions are provided on such matter will be voted in favorinvestment adviser, and persons who beneficially own more than 10% of an adjournment in these circumstances. The time and placea registered class of the adjourned meeting will be announced at the time the adjournment is taken. Any adjournmentFund’s outstanding securities (“Reporting Persons”), to file reports of ownership of the Special Meeting for the purpose of soliciting additional proxies will allow the Shareholders who have already sentFund’s securities and changes in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned or postponed.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
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OTHER BUSINESS
The Board of Trustees knows of no other business to be presented for action at the Special Meeting. If any matters do come before the Special Meeting on which action can properly be taken, it is intended that the proxies shall vote in accordance with the judgment of the person or persons exercising the authority conferred by the proxy at the Special Meeting. The submission of a proposal does not guarantee its inclusion in the Fund’s proxy statement or presentation at the Special Meeting unless certain securities law requirements are met.
AVAILABLE INFORMATION
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT AND THE MOST RECENT QUARTERLY REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY, TO ANY SHAREHOLDER UPON REQUEST. REQUESTS SHOULD BE DIRECTED TO:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Shareholders may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
We are required to file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act. The SEC maintains an Internet site that contains reports, proxy and information statements and other information filed electronically by ussuch ownership with the SEC whichand the New York Stock Exchange. Such persons are availablerequired by the SEC regulations to furnish the Fund with copies of all such filings. Based solely on its review of the copies of such forms received by it and written representations from certain Reporting Persons, the Fund believes that during the fiscal year ended October 31, 2021, its Reporting Persons complied with all applicable filing requirements, except as noted in the following sentence. Initial filings on Form 3 were not filed timely on behalf of Messrs. Keniston, Weinstein, D’Angelo, Sapru and Statczar within the required 10-day period after each such person became an officer or trustee of the Fund, as applicable.
Shareholder Communications with the Board
Shareholders may send other communications to the Board or an individual Trustee. Such communications should be sent to the Fund’s Secretary at the address on the SEC’s website at http://www.sec.gov. Copiesfront of these reports, proxy and information statements and other information may be obtained, after payingthis Proxy Statement.
What is the deadline to submit a duplicating fee, by electronic request atproposal for the following e-mail2023 Annual Meeting? address: publicinfo@sec.gov, or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549. This information will also be available free of charge by contacting us at 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258 or by telephone at 1 (800) 992-0180 or on our website at https://individuals.voya.com/product/closed-end-fund/profile/voya-prime-rate-trust.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund expectsIt is anticipated that the 2021 Annual Meeting of Shareholdersnext annual meeting will be held in July, 2021,September 2023, but the exact date, time, and location of such meeting have yet to be determined. A shareholder whoAny proposals of shareholders that are intended to presentbe presented at the next annual meeting must be in writing and received at the Fund’s principal executive offices no later than April 7, 2023, in order for the proposal to be considered for inclusion in the proxy statement for that meeting. The submission of a proposal does not guarantee its inclusion in the proxy statement or presentation at the 2021 Annual Meeting of meeting.
Shareholders and forwho wish to make a proposal that proposal towould not be included in the Fund’s proxy materials for thator to nominate a person or persons as a Trustee at the 2023 annual meeting must have submitted a proposal in writing to the Fund at its business address, andof the Fund must have receivedensure that the proposal or nomination is delivered to the Fund’s principal executive offices no earlier than March 8, 2023 and no later than January 11, 2021.April 7, 2023 and includes the information specified in the Fund’s declaration of trust and bylaws. However, if the annual meeting is not scheduled to be held within 30 days before or after the first anniversary date of the 2020 annual meeting of shareholders offor the Fundpreceding year (such annual meeting date outside such period, an “Other Annual Meeting Date”), notice by shareholders, to be timely, must be delivered in writing to the business address for the Fund within a reasonable time before the Fund begins to print and send its proxy materials to shareholders. The submission of a proposal does not guarantee its inclusion in the Fund’s proxy statement or presentation at the meeting.
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For any proposal that is not submitted for inclusion in the Fund’s proxy statement for the 2021 Annual Meeting of Shareholders (as described in the preceding paragraph) must have delivered notice of the proposal or nomination to the Fund’s principal executive offices no earlier than January 11, 2021 and no later than February 10, 2021 and included the information specified in the Fund’s declaration of trust and bylaws. However, if the 2021 Annual Meeting of Shareholders is scheduled to be held on an Other Annual Meeting Date, notice by shareholders, to be timely, must be delivered to the Fund’s principal executive offices by the later of (i) the date 90 days prior to the Other Annual Meeting Date or (ii) the 10th day following the date that the Other Annual Meeting Date is first publicly announced or disclosed and must include the information specified in the Fund’s declaration of trust and bylaws. The chairperson of the Annual Meeting may disregard any nomination or other proposal by a shareholder that is not made in the manner described above.
Who are the Fund’s independent public accountants?
The Board has selected the accounting firm of Ernst & Young LLP (“E&Y”) as the independent auditor of the Fund reservesfor the rightcurrent fiscal year.
As part of its oversight of the Fund’s financial statements, on December 17, 2021, the Audit Committee held a telephonic meeting to reject, rule outreview and discuss with the Adviser, and E&Y the Fund’s audited financial statements for the fiscal year ended October 31, 2021. The Audit Committee discussed with E&Y the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard 1301, Communications with Audit Committees. The Audit Committee has also received and reviewed the written disclosures and the letter from E&Y pursuant to PCAOB Rule 3526 and discussed E&Y’s independence with E&Y.
Based on the reviews and discussion referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Fund’s Annual Report to shareholders.
Submitted by the Audit Committee of order,the Board
Karen Caldwell
Thomas Bumbolow
Ketu Desai
The fees paid to E&Y for professional audit services during the Fund’s most recent fiscal years ended February 28, 2021 and October 31, 2021, amounts billed for other services rendered by E&Y to the Fund, and the aggregate non-audit fees billed by E&Y for services rendered to the Fund, the Adviser, and any entity controlling, controlled by, or take other appropriate actionunder common control with the Adviser that provides ongoing services to the Fund for the fiscal years ended February 28 2021 and October 31, 2021 are described in Appendix G.
All of the services provided by the independent public accountants were approved by the Audit Committee pursuant to pre-approval policies and procedures adopted by the Audit Committee. Pursuant to such policies and procedures, the Audit Committee approves: (i) all audit and non-audit services to be rendered to the Fund by E&Y; and (ii) all non-audit services impacting the operations and financial reporting of the Fund provided by E&Y to the Adviser or any affiliate thereof that provides ongoing services to the Fund (collectively, “Covered Services”). The Audit Committee has adopted pre-approval procedures authorizing one or more members of the Audit Committee to approve from time to time, on behalf of the Audit Committee, all Covered Services to be provided by E&Y which are not otherwise approved at a meeting of the Audit Committee, provided that such delegate reports to the full Audit Committee at its next regularly scheduled meeting. The pre-approval procedures do not include delegation of the Audit Committee’s responsibilities to management. Pre-approval has not been waived with respect to any proposalof the services described above since the date on which the Audit Committee adopted its current pre-approval procedures.
The Audit Committee of the Board has considered and will periodically consider whether E&Y’s provision of non-audit services to the Adviser and all entities controlling, controlled by, or under common control with the Adviser that provide ongoing services to the Fund that were not required to be pre-approved is compatible with maintaining the independence of E&Y.
Representatives of E&Y are not expected to be at the Annual Meeting but have been given the opportunity to make a statement if they wish.
Why did my household only receive one copy of this Proxy Statement?
Only one copy of this Proxy Statement may be mailed to each household, even if more than one person in the household is a Fund shareholder of record, unless the Fund has received contrary instructions from one or more of the household’s shareholders. If a shareholder needs an additional copy of this Proxy Statement, please contact Broadridge at 855-928-4480. If in the future, any shareholder does not comply with these and other applicable requirements.
You are cordially invitedwish to participate incombine or wishes to recombine the Special Meeting. Whether or not you plan to attend the Special Meeting virtually, you are requested to vote in accordance with the voting instructions in the Noticemailing of Internet Availability of Proxy Materials, or by requesting hard copy proxy materials from us and returning a proxy card.
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statement with household members, please inform the Fund in writing at 405 Lexington Avenue, 58th Floor, New York, New York
April 21, 2021
25Who pays for this proxy solicitation?
PRIVACY NOTICE
The Fund has adopted a policy concerning investor privacy. To reviewwill pay the privacy policy, contact a Shareholder Services Representative at 1-800-336-3436, obtain a policy over the Internet at www.voyainvestments.com, or see the privacy promise that accompanies any Prospectus obtained by mail.
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APPENDIX A
INVESTMENT MANAGEMENT AGREEMENT
SABA CAPITAL INCOME & OPPORTUNITIES FUND
AGREEMENT dated May [ ], 2021, between Saba Capital Income & Opportunities Fund (the “Trust”), a Massachusetts business trust and Saba Capital Management, L.P. (the “Manager”), a limited partnership formed and existing under the laws of the State of Delaware (the “Agreement”).
WHEREAS, the Trust is a closed-end management investment company, registered as such under the Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, the Manager is registered as an investment adviser under the Investment Advisers Act of 1940, and is engaged in the business of supplying investment advice and investment management and certain other services, as an independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render advice and services pursuant to the terms and provisions of this Agreement, and the Manager is willing to furnish said advice and services.
NOW, THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties hereto, intending to be legally bound hereby, mutually agree as follows:
1. Employment of Manager.
The Trust hereby employs the Manager and the Manager hereby accepts such employment, to render investment advice and investment management services with respect to the assets of the Trust (“Advisory Services”), and to provide or arrange for the provision of administrative services as the Manager may deem reasonably necessary from time to time for the ordinary operation of the Trust (“Administrative Services”), subject to the supervision and direction of the Board of Trustees of the Trust (the “Trustees”).
The Manager shall, as part of its duties hereunder (i) furnish the Trust with advice and recommendations with respect to the investment of the Trust’s assets and the purchase and sale of its portfolio securities, including the taking of such other steps as may be necessary to implement such advice and recommendations, (ii) furnish the Trust with reports, statements and other data on securities, economic conditions and other pertinent subjects which the Board of Trustees may reasonably request, (iii) permit, with its written consent, its officers and employees to serve without compensation as Trustees of the Trust if elected to such positions and (iv) in general superintend and manage the investment of the Trust, subject to the ultimate supervision and direction to the Board of Trustees.
Subject to the approval of the Board of Trustees, the Manager is authorized to enter into sub-advisory agreements with other registered investment advisers to serve as investment sub-advisers, whether or not affiliated with the Manager (each, a “Sub-Adviser”). The Manager will continue to have responsibility for all services furnished pursuant to any sub-advisory agreement. The Trust and the Manager understand and agree that the Manager may manage the Trust with one or more Sub-Advisers, which contemplates that the Manager will, among other things: (i) continually evaluate the performance of any Sub-Adviser to the Trust; and (ii) periodically make recommendations to the Board of Trustees regarding the results of its evaluation and monitoring functions. The Trust recognizes that, subject to the approval of the Board of Trustees, a Sub-Adviser’s services may be terminated or modified and that the Manager may appoint a new Sub-Adviser for the Trust.
A-1
2. Reasonable Best Judgment. The Manager shall use its reasonable best judgment and efforts in rendering the Advisory Services as contemplated by this Agreement.
3. Exclusivity. The Manager shall, for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or represent the Trust in any way, or in any way be deemed an agent for the Trust. It is expressly understood and agreed that the Advisory Services to be rendered by the Manager to the Trust under the provisions of this Agreement are not to be deemed exclusive, and the Manager shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be materially impaired thereby.
4. Reasonable Best Efforts. The Manager agrees to use its reasonable best efforts in the furnishing of such advice and recommendations to the Trust, in the preparation of reports and information, in the management of the Trust’s assets, and in the provision of Advisory Services, all pursuant to this Agreement, and for this purpose the Manager 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 Manager shall be deemed to include persons employed or retained by the Manager to furnish statistical, research, and other factual information, advice regarding economic factors and trends, information with respect to technical and scientific developments, and such other information, advice and assistance as the Manager may desire and request.
5. Statements and Reports. The Trust will from time to time furnish to the Manager detailed statements of the investments and assets of the Trust and information as to its investment objectives and needs, and will make available to the Manager such financial reports, proxy statements, legal and other information relating to its investments as may be in the possession of the Trust or available to it and such other information as the Manager may reasonably request.
6. Expenses.
(a) In consideration for the Management Fee, the Manager will provide the Trust with certain operational and managerial services. The Manager shall be responsible for (i) the compensation of any Sub-Adviser retained pursuant to this Agreement, and (ii) the compensation of any investment advisory personnel that provide services to the Trust on behalf of the Manager pursuant to this Agreement, along with the allocable portion of the following “overhead expenses” (office space, rent and utilities, furniture and fixtures, computer equipment, stationery, secretarial/managerial services, salaries, entertainment expenses, employee insurance and payroll taxes) attributable to such investment advisory personnel.
(b) Other than the expenses expressly borne by the Manager pursuant to Section 6(a) above, the Trust shall be responsible for all of the expenses of its operations, including, without limitation, the Trust’s investment-related expenses whether relating to investments that are consummated or unconsummated (e.g., brokerage commissions, due diligence costs, expenses relating to short sales, investment banking fees, sourcing or finder’s fees (which may include a base fee component and/or a performance compensation component), borrowing charges on securities sold short, custodial fees and expenses and nominee fees); bank service fees, clearing and settlement charges and interest expense; Management Fees; fees and expenses incidental to the purchase and sale of interests in, and the fees and expenses of, portfolio companies in which the Trust invests; interest payable on debt, if any, to finance the Trust’s investments; expenses relating to software tools, programs or other technology utilized in managing the Trust (including, without limitation, third-party software licensing, implementation, data management and recovery services and custom development costs); exchange listing fees, expenses relating to proxy contests, voting, tender offers and solicitation fees and expenses; trading platform and seat fees; research-related expenses, including, without limitation, news and quotation equipment and services; fees and expenses associated with independent audits and outside legal costs; fees for data and software providers; other expenses related to the purchase, sale or transmittal of investments; website creation and maintenance, fees for risk management systems and service
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providers; legal expenses; other professional fees (including, without limitation, expenses of consultants and experts); transfer agent and custodial fees; the costs of organizing and maintaining any subsidiaries; costs relating to swaps (and similar agreements); tax preparation expenses; accounting expenses; fees and expenses associated with marketing and investor relations efforts including proxy solicitations and shareholder meetings; costs of printing and mailing proxies, reports and/or notices; market data costs; administration expenses (including fees for the provision of middle-office and back-office services); directors’ and officers’ fees); Trust-related insurance expenses (including, without limitation, premium payments for fidelity bonds and Directors’ and Officers’ and Errors and Omissions insurance); compensation and expenses of the independent members of the Board of Trustees of the Trust; organizational and offering-related expenses, including the preparation and filing of related registration statements under the Securities Act of 1933, as amended; filing and registration fees; corporate licensing fees, federal, state and local taxes and other governmental fees and expenses; all regulatory expenses (including, without limitation, fees and expenses incurred in connection with ongoing compliance obligations and the preparation and filing of regulatory filings, including those required under the 1940 Act and applicable federal and state securities laws); litigation-related and indemnification expenses; withholding and transfer fees; trademarks; other expenses related to the purchase, monitoring, sale, allocation, settlement, custody, valuation, appraisal or transmittal of assets; extraordinary expenses, including the costs of any third party pricing or valuation services; the allocable portion of the compensation and related overhead expenses attributable to any director, officer, partner or employee of the Manager or any affiliate thereof when and to the extent providing administrative services to the Trust; and other similar expenses and all other costs and expenses incurred in connection with the engagementNotice of any third party service providers to provide administrative services toAnnual Meeting of Shareholders, Proxy Statement, and the Trust.Annual Meeting, including printing, mailing, vote tabulation, legal, and out of pocket expenses. The total estimated proxy solicitation costs are approximately $58,244.
(c) To
In order that the extentpresence of a quorum at the Manager incurs or bears any costs or expenses expressly borne by the Trust pursuant to Section 6(b) above, the Trust shall promptly reimburse the Manager for such costs and expenses on no less frequently than a quarterly basis.
7. Delegation.
(a) The Manager may delegate the performance of certain Advisory Services to a Sub-Adviser.
(b) Certain Administrative ServicesAnnual Meeting may be furnished by the directors, officers, partner or employeesassured, prompt execution and return of the Managerenclosed Proxy Ballot is requested. A self-addressed postage paid envelope is enclosed for your convenience. You also may vote via telephone or of affiliatesvia the Internet. Please follow the voting instructions as outlined on your Proxy Ballot.
Michael D’Angelo
Secretary
August 9, 2022
APPENDIX A: NOMINEES
The following table sets forth information concerning the Nominees of the Manager, or by any third-party service provider retained by the Trust to provide such Administrative Services in lieu of the Manager; provided, that any agreement pertaining to the provision of Administrative Services shall be subject to the approval of the Board of Trustees.
(c)Fund. The Manager shall not be liable to the Trustmailing address for any service delegated to a third party service provider.
8. Oversight of Sub-Adviserseach Nominee is 405 Lexington Avenue, 58th Floor, New York, NY 10174.. In the event that the Manager wishes to select others to render Advisory Services, the Manager shall analyze, select and recommend for consideration and approval by the Board of Trustees investment advisory firms (however organized) to provide investment advice to the Trust, and, at the expense of the Manager, engage (which engagement may also be by the Trust) any such investment advisory firm to render investment advice and manage the investments of the Trust and the composition the Trust’s portfolio of securities and investments, including cash, and the purchase, retention and disposition thereof, or any offering thereof, in accordance with the Trust’s investment objective or objectives and policies as stated in the Trust’s registration statement, as may be supplemented or amended from time to time (the “Registration Statement”). The Manager shall take the following actions in respect of the performance by the Sub-Adviser of its obligations in respect of the Trust:
(a) Periodically monitor and evaluate the performance of the Sub-Advisers with respect to the investment objectives and policies of the Trust, including without limitation, perform periodic detailed analysis and review of the Sub-Adviser’s investment performance in respect of the Trust and in respect of other accounts managed by the Sub-Adviser with similar investment strategies;
| Name, Address and Date of Birth | Position(s) Held with the Fund | Term of Office and Length of Time Served1 | Principal Occupation(s) During the Past 5 Years | Number of Funds in the Fund Complex Overseen by Trustees2 | Other Board Positions Held by Trustees |
| Independent Nominees | |||||
Thomas Bumbolow DOB: 05/17/1976 | Trustee | Since January 2021 | See “Proposal One – Election of Nominees” | 1 | Stepping Stones Museum |
Karen Caldwell DOB: 01/22/1959 | Trustee | Since July 2020 | See “Proposal One – Election of Nominees” | 1 | Finite Solar Finance Fund; |
Ketu Desai DOB: 07/02/1982 | Trustee | Since July 2020 | See “Proposal One – Election of Nominees” | 1 | None |
Kieran Goodwin DOB: 07/30/1969 | Trustee | Since July 2020 | See “Proposal One – Election of Nominees” | 1 | None |
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(b) Prepare and present periodic reports to the Board of Trustees regarding the investment performance
| Name, Address and Age | Position(s) Held with the Fund | Term of Office and Length of Time Served1 | Principal Occupation(s) During the Past 5 Years | Number of Funds in the Fund Complex Overseen by Trustees2 | Other Board Positions Held by Trustees |
| Nominee who is an “Interested Person” 3 | |||||
Aditya Bindal DOB: 03/10/1976 | Trustee | Since July 2020 | See “Proposal One – Election of Nominees” | 1 | GIM |
Andrew Kellerman DOB: 09/22/1965 | Trustee | Since July 2020 | See “Proposal One – Election of Nominees” | 1 | None |
| 1. | Trustees serve until their successors are duly elected and qualified. The tenure of each Trustee who is not an “interested person” as defined in the 1940 Act, of the Fund (as defined below, “Independent Trustee”) is subject to the Board’s retirement policy, which states that each duly elected or appointed Independent Trustee shall retire from and cease to be a member of the Board of Trustees at the close of business on December 31 of the calendar year in which the Independent Trustee attains the age of 75. A majority vote of the Board’s other Independent Trustees may extend the retirement date of an Independent Trustee if the retirement would trigger a requirement to hold a meeting of shareholders of the Fund under applicable law, whether for the purposes of appointing a successor to the Independent Trustee or otherwise complying under applicable law, in which case the extension would apply until such time as the shareholder meeting can be held or is no longer required (as determined by a vote of a majority of the other Independent Trustees). |
| 2. | For the purposes of this table, “Fund Complex” means the Fund. |
| 3. | Aditya Bindal and Andrew Kellerman are each deemed to be an Interested Trustee because of their current affiliation with the Fund and Saba Capital and its affiliates. |
Sub-Adviser and other information regarding the Sub-Adviser, at such times and in such forms as the Board of Trustees may reasonably request;
(c) Review and consider any changes in the personnel of the Sub-Adviser responsible for performing the Sub-Adviser’s obligations and make appropriate reports to the Board of Trustees;
(d) Review and consider any changes in the ownership or senior management of the Sub-Adviser and make appropriate reports to the Board of Trustees;
(e) Perform periodic in-person or telephonic diligence meetings with representatives of the Sub-Adviser;APPENDIX B: TRUSTEE COMPENSATION TABLE
(f) Supervise Sub-Advisers with respect to the services that such Sub-Advisers provide under each Sub-Adviser’s Sub-Advisory Agreement;
(g) Assist the Board of Trustees and management of the Trust in developing and reviewing information with respect to the initial approval of the Sub-Adviser Agreement with the Sub-Adviser and annual consideration of the agreement thereafter;
(h) Monitor the Sub-Advisers for compliance with the investment objective or objectives, policies and restrictions of the Trust, the 1940 Act, Subchapter M of the Internal Revenue Code, and if applicable, regulations under such provisions, and other applicable law;
(i) If appropriate, analyze and recommend for consideration by the Board of Trustees termination of a contract with a Sub-Adviser under which the Sub-Adviser provides investment advisory services to the Trust;
(j) Identify potential successors to or replacements of the Sub-Adviser or potential additional Sub-Advisers, perform appropriate due diligence, and develop and present to the Board of Trustees a recommendation as to any such successor, replacement, or additional Sub-Adviser;
(k) Designate and compensate from its own resources such personnel as the Manager may consider necessary or appropriate to the performance of its services hereunder; and
(l) Perform such other review and reporting functions as the Board of Trustees shall reasonably request consistent with this Agreement and applicable law.
9. Compensation.
(a) The Trust agrees to pay to the Manager, and the Manager agrees to accept, as full compensation for all Advisory Services furnished orfollowing tables have been provided to the Trust and as full reimbursement for all expenses assumedFund by the Manager, a management fee equal to the amount specified for the Trust on Schedule A.
(b) The management fees shall be accrued daily by the Trust and paid to the Manager at the end of each calendar month.
10. Prohibition on Short Positions. The Manager agrees that neither it nor any of its officers or employees shall take any short position in the capital stock of the Trust. This prohibition shall not prevent the purchase of such shares by any of the officers and directors or bona fide employees of the Manager or any trust, pension, profit-sharing or other benefit plan for such persons or affiliates thereof, at a price not less than the net asset value thereof at the time of purchase, as allowed pursuant to rules promulgated under the 1940 Act.
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11. Actions in Contravention of Organizational Documents. Nothing herein contained shall be deemed to require the Trust to take any action contrary to the Declaration of Trust or By-Laws of the Trust, or any applicable statute or regulation, or to relieve or deprive the Trustees of the Trust of its responsibility for and control of the conduct of the affairs of the Trust.
12. Limitation of Liability of the Manager; Indemnification.
(a) In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of the Manager, the Manager (and its officers, managers, agents, employees, partners, controlling persons, members, agents and any other person or entity affiliated with the Manage) shall not be subject to liability to the Trust, the members of the Board of Trustees or to any shareholder of the Trust, for any act or omission in the course of, or connected with, rendering Advisory Services and any other services provided from time to time by the Manager or for any losses that may be sustained in the purchase, holding or sale of any security by the Trust.
(b) No provision of this Agreement shall be construed to protect any director or officer of the Trust, or of the Manager, from liability in violation of Section 17(i) of the 1940 Act.
(c) The Trust shall indemnify the Manager (and its officers, managers, agents, employees, partners, controlling persons, members, agents and any other person or entity affiliated with the Manager) (collectively, the “Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Trust or its security holders) arising out of or otherwise based upon the performance of any of the Manager’s duties or obligations under this Agreement or otherwise as an investment adviser of the Trust. Notwithstanding the preceding sentence of this Paragraph 12 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Trust or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Manager’s duties or by reason of the reckless disregard of the Manager’s duties and obligations under this Agreement.
13. Term and Continuation. This Agreement shall become effective on the date first written above (the “Effective Date”), subject to the condition that the Board of Trustees, including a majority of those Trustees who are not parties to this Agreement or interested persons (as defined under the 1940 Act) of either the Trust or the Manager, and a majority of the outstanding voting securities of the Trust, shall have approved this Agreement. Unless terminated as provided herein, the Agreement shall continue in full force and effect for two years following the Effective Date, and shall continue from year to year thereafter so long as such continuation is approved at least annually by either (i) the Board of Trustees, including a majority of those Trustees who are not parties to this Agreement or interested persons (as defined under the 1940 Act) of either the Trust or the Manager, or (ii) the affirmative vote of a majority of the outstanding voting securities of the Trust.
14. Termination.
(a) This Agreement may be terminated at any time, without payment of any penalty, by the Board of Trustees of the Trust or by the affirmative vote of a majority of the outstanding voting securities of the Trust, upon sixty (60) days written notice to the Manager, and by the Manager upon sixty (60) days written notice to the Trust.
(b) This Agreement shall terminate automatically in the event of any transfer or assignment thereof, as defined in the 1940 Act.
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15. Use of Name. It is understood that the name “Saba Capital Management, L.P.” or any trademark, trade name, service mark, or logo, or any variation of such trademark, service mark, or logo of the Manager or its affiliates, including but not limited to the mark “Saba®” (collectively, the “Saba Marks”) is the valuable property of the ManagerAdviser and its affiliates and thatsets forth information regarding the Trust hascompensation paid to the right to use such Saba Marks only so long as this Agreement or any subsequent agreement withIndependent Trustees for the Manager in replacementfiscal year ended October 31, 2021 for service on the Board.
| Name of Trustee | Aggregate Compensation from the Fund (fiscal year ended October 31, 2021) | Total Compensation from the Fund and Complex Paid to Trustees |
| Karen Caldwell | $5,625 | $5,625 |
| Ketu Desai | $3,750 | $3,750 |
| Kieran Goodwin | $3,750 | $3,750 |
| Thomas Bumbolow | $3,750 | $3,750 |
| Aditya Bindal1 | $0 | $0 |
| Andrew Kellerman1 | $0 | $0 |
| 1. | Aditya Bindal and Andrew Kellerman are each deemed to be an Interested Trustee because of their current affiliation with the Fund and Saba Capital and its affiliates and therefore do not receive any compensation from the Fund for their roles as Interested Trustees. |
APPENDIX C: SHARES OWNED BY TRUSTEES
The following table sets forth information regarding the dollar range of this Agreement shall continue with respect to such Trust. Upon termination of this Agreement without its replacement by a subsequent agreement, the Trust shall, as soon as is reasonably possible, discontinue all useequity securities of the Saba Marks and shall promptly amend its DeclarationFund beneficially owned by each Trustee as of Trust to change its name (if such Saba Marks are included therein).July 15, 2022.
18. Applicable Law.
| Name of Trustee | BRW | Aggregate Dollar Range of Equity Securities in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
| Independent Trustees | ||
| Karen Caldwell | $0 | None |
| Ketu Desai | $0 | None |
| Kieran Goodwin | $0 | None |
| Thomas Bumbolow | $0 | None |
| Trustee who is an “Interested Person” | ||
| Aditya Bindal | $0 | None |
| Andrew Kellerman | $0 | None |
APPENDIX D: OFFICERS
(a) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby.
(b) The term “majorityInformation for each Officer of the outstanding voting securities” of the Trust shall have the meaning asFund is set forth in the 1940 Act.
(c) This Agreement shall be governed by the laws of the State oftable below. The mailing address for each officer is 405 Lexington Avenue, 58th Floor, New York, applicable to contracts formed and to be performed entirely within the State of New York, without regard to the conflicts of law principles thereof, to the extent such principles would require or permit the application of the laws of another jurisdiction; provided, that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Investment Advisors Act of 1940,NY 10174, except as amended, or any rules or orders of the SEC thereunder.
19. Limitation of Liability for Claims. The Manager is hereby expressly put on notice of the limitation of liability as set forth in the Trust’s Declaration of Trust and agrees that the obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the Trust and its assets, and the Manager shall not seek satisfaction of any such obligation from the shareholders of the Trust or from any trustee, officer, employee or agent of the Trust.
20. Excess Brokerage Commissions. The Manager is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Trust to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Manager determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Trust’s portfolio, and constitutes the best net results for the Trust.
21. Responsibility of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, officer or employee of the Manager or its affiliates is or becomes a director, officer, partner and/or employee of the Trust and acts as such in any business of the Trust, then such manager, partner, officer and/or employee of the Manager or its affiliates shall be deemed to be acting in such capacity solely for the Trust, and not as a manager, partner, officer or employee of the Manager or its affiliates or under the control or direction of the Manager, even if paid by the Manager or an affiliate thereof.
22. Amendment of Agreement. This Agreement may be amended only by written agreement of the Manager and the Trust and only in accordance with the provisions of the 1940 Act and the rules and regulations promulgated thereunder.
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23. Proxy Voting. The Manager shall be responsible for voting any proxies solicited by an issuer of securities held by the Trust in the best interest of the Trust and in accordance with the Manager’s proxy voting policies and procedures, as any such proxy voting policies and procedures may be amended from time to time. The Manager’s proxy voting policies and procedures, and any amendment thereto will be subject to Board of Trustee’s approval. The Trust has been provided with a copy of the Manager’s proxy voting policies and procedures and has been informed as to how it can obtain further information from the Manager regarding proxy voting activities undertaken on behalf of the Trust. In accordance with its provisions of managerial services to the Trust hereunder, the Manager shall be responsible for reporting the Trust’s proxy voting activities, as required, through periodic filings on Form N-PXnoted below. or any successor form thereto.
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IN WITNESS WHEREOF the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first written above.
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SCHEDULE A
with respect to the
INVESTMENT MANAGEMENT AGREEMENT
between
SABA CAPITAL INCOME & OPPORTUNITIES FUND
and
SABA CAPITAL MANAGEMENT, L.P.
| Name, Address1 and DOB | Position(s) Held with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During the Past 5 Years |
DOB: 06/06/1973 | President |
| CIO of |
Pierre Weinstein DOB: 04/07/1975 | Chief Executive Officer | Since May 2021 | Portfolio Manager at Saba Capital |
Michael D’Angelo DOB: 09/08/1978 | Secretary | COO and General Counsel at Saba Capital | |
Patrick Keniston1 DOB: 01/18/1964 | CCO | Since June 2021 | Senior Principal Consultant, ACA Global (since 2008) |
Troy Statczar1 DOB: 08/31/1971 | PFO, Treasurer | Since June 2021 | Senior Principal Consultant (2020-present) - ACA Global; Director of Fund Administration (2017-2019) - Thornburg Investment Management, Inc.; Director of U.S. Operations (2008-2017) - Henderson Global Investors N.A., Inc. |
Nitin Sapru DOB: 12/07/1980 | VP | Since May 2021 | CFO at Saba Capital |
|
APPENDIX E: COMMON SHARES OUTSTANDING
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APPENDIX B
EXPENSE LIMITATION AGREEMENT
SABA CAPITAL INCOME & OPPORTUNITIES FUND
This EXPENSE LIMITATION AGREEMENT (the “Agreement”), effective [], 2021, by and between Saba Capital Management, L.P. (the “Investment Manager”) and Saba Capital Income & Opportunities Fund (the “Fund”).
WHEREAS,The following table sets forth the Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end management investment company; and
WHEREAS, the Fund and the Investment Manager desire that the provisions of this Agreement do not adversely affect the Fund’s status as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), do not interfere with the Fund’s ability to compute its taxable income under Code Section 852, do not adversely affect the status of the distributions the Fund makes as deductible dividends under Code Section 562, and do comply with the requirements of Revenue Procedure 99-40 (or any successor pronouncement of the Internal Revenue Service); and
WHEREAS, the Fund and the Investment Manager have entered into an investment management agreement (the “Management Agreement”), pursuant to which the Investment Manager provides investment advisory services to the Fund; and
WHEREAS, the Fund and the Investment Manager have determined that it is appropriate and in the best interests of the Funds and their shareholders to maintain the expenses of the Fund at a level below the level to which each such Fund might otherwise be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the ordinary operating expenses, including but not limited to investment advisory fees payable to the Investment Manager, but excluding interest, taxes, investor relations services, other investment-related costs, leverage expenses (as defined below), extraordinary expenses such as litigation, other expenses not incurred in the ordinary course of such Fund’s business, and expenses of any counsel or other persons or services retained by such Fund’s Trustees who are not “interested persons,” as that term is defined in the 1940 Act, of the Investment Manager (the “Fund Operating Expenses”), incurred by the Fund listed on Schedule A during any term of this Agreement (the “Term”) exceed the Operating Expense Limit, as defined in Section 1.2 below, for such Fund for such Term, such excess amount (the “Excess Amount”) shall be the liability of the Investment Manager. As such, the Investment Manager may waive all or a portion of certain fees and/or reimburse expenses in amounts necessary so that after such waivers and/or reimbursements, the maximum total operating expense of the Fund shall be as listed on Schedule A. For the purposes of this Agreement, leverage expenses shall mean fees, costs and expenses incurred by the Fund’s use of leverage (including, without limitation, expenses incurred by the Fund in creating, establishing and maintaining leverage through borrowings or the issuance of preferred shares).
1.2 Operating Expense Limit. The Operating Expense Limit in any Term with respect to the Fund shall be the amount specified in Schedule A.
1.3 Daily Computation. The Investment Manager shall determine on each business day whether the aggregate Term to date Fund Operating Expenses for any Fund exceed the Operating Expense Limit, as such Operating
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Expense Limit has been pro-rated to the date of such determination (the “Pro-Rated Expense Cap”). If, on any business day, the aggregate Term to date Fund Operating Expenses for any Fund do not equal the Pro-Rated Expense Cap for that Fund, the amount of such difference shall be netted against the previous day’s accrued amount for Excess Amounts or Recoupment Amounts (as defined below), and the difference shall be accrued for that day as an Excess Amount or Recoupment Amount as applicable.
1.4 Payment. At the end of each month, the accruals made pursuant to Section 1.3 above shall be netted, and the result shall be remitted by the Investment Manager to the Fund (pursuant to Section 1.1 above) if such netting results in an Excess Amount, and it shall be remitted to the Investment Manager if such netting results in a Recoupment Amount and the Investment Manager is entitled to a Recoupment Amount pursuant to Section 2 below. Any such amounts remitted to the Fund, or repaid by the Fund, shall be allocated to the Fund in accordance with the terms of the 1940 Act. Any payments made pursuant to Section 1.1 and this Section 1.4 may include waivers of all or a portion of certain fees and/or reimbursements of expenses in amounts necessary so that after such waivers and/or reimbursements, the maximum total operating expense of the Fund shall be as listed on Schedule A. The Fund may offset amounts owed to the Fund pursuant to this Agreement against the Fund’s advisory fee payable to the Investment Manager.
2. Right to Recoupment. If the Investment Manager has made any payments pursuant to Section 1.4 above, including waivers and/or reimbursements of certain fees and/or expenses, relating to any of the 36 months immediately preceding any month end calculation pursuant to Section 1.4 above, the Investment Manager shall be entitled to recoup from the Fund any such investment advisory fees waived or reduced and any such payments made (collectively, a “Recoupment Amount”), if (i) on the date of any calculation under Section 1.3, the aggregate Term to date Fund Operating Expenses for any Fund are less than that day’s Pro-Rated Expense Cap for that Fund, and (ii) such Recoupment Amounts have not already been recouped. Any amounts recouped from the Fund shall be recouped in accordance with the 1940 Act. Amounts recouped shall be allocated to the oldest Recoupment Amounts during such 36-month period until fully recouped, and thereafter to the next oldest Recoupment Amounts, and so forth.
3. Term and Termination. This Agreement shall have an initial term with respect to the Fund ending on the date indicated on Schedule A, as such schedule may be amended from time to time. Thereafter, this Agreement shall automatically renew for one-year terms with respect to the Fund unless the Investment Manager provides written notice of the termination of this Agreement to a lead Independent Trustee of the Fund within 90 days of the end of the then current term for that Fund and such termination is approved by the Board of Trustees of the Fund. In addition, this Agreement shall terminate with respect to the Fund upon termination of the Management Agreement with respect to such Fund, or it may be terminated by the Fund, without payment of any penalty, upon written notice to the Investment Manager at its principal place of business within 90 days of the end of the then current term for the Fund.
4. Miscellaneous.
4.1 Captions. The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof or otherwise affect their construction or effect.
4.2 Interpretation. Nothing herein shall be deemed to require the Fund to take any action contrary to the Fund’s articles of incorporation, declaration of trust, or similar governing document, an applicable prospectus or statement of additional information, or any applicable statutory or regulatory requirement, or to relieve or deprive the Fund’s Board of Trustees of its responsibility for and control of the conduct of the affairs of the Fund.
4.3 Definitions. Any question of interpretation of any term or provision of this Agreement, including but not limited to the investment management fee, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Management Agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to such Management Agreement or the 1940 Act.
4.4 Amendments. This Agreement, including the applicable expense limitsCommon Shares outstanding for the Fund as set forth on Schedule A, may be amended only by a written agreement signed by each of the parties hereto and such amendment is approved by the Board of Trustees of the Fund.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized, as of the day and year first above written.Record Date.
| Fund | ||||||||||||
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SCHEDULE A
to the
EXPENSE LIMITATION AGREEMENT
SABA CAPITAL INCOME & OPPORTUNITIES FUND
OPERATING EXPENSE LIMITS
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| Common Shares Outstanding | ||
| Saba Capital Income & Opportunities Fund | ||
APPENDIX F: 5 PERCENT BENEFICIAL OWNERSHIP
| Fund | Name and Address of Shareholder1 | Number of Shares | Percentage of Fund |
| BRW | RiverNorth Capital Management, LLC 325 N. LaSalle Street, Suite 645 | 8,144,012 | 19.15% |
| BRW | Saba Capital Management, L.P. / Boaz Weinstein 405 Lexington Ave., 58th Floor New York, NY 10174 | 4,506,964 | 10.60% |
| BRW | Relative Value Partners Group 1033 Skokie Blvd. Suite 470 Northbrook, IL 60062 | 4,403,314 | 10.35% |
| 1. | This entity is the shareholder of record and may be deemed to be the beneficial owner of the shares listed for certain purposes under the securities laws, although in certain instances it may not have an economic interest in these shares and would, therefore, ordinarily disclaim any beneficial ownership therein. |
Effective Date: [],
APPENDIX G: FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The following table shows fees paid to E&Y for professional audit services during the Fund’s most recent fiscal years ended February 28, 2021 and October 31, 2021, as well as fees billed for other services rendered by E&Y to the Fund.
| Fund | Audit Fees1 | Audit-Related Fees2 | ||
| October 31, 2021 | February 28, 2021 | October 31, 2021 | February 28, 2021 | |
| BRW | $62,300 | $62,300 | $0 | $0 |
| Tax Fees3 | All Other Fees4 | |||
| October 31, 2021 | February 28, 2021 | October 31, 2021 | February 28, 2021 | |
| BRW | $12,500 | $7,800 | $0 | $0 |
| 1. | Audit fees consist of fees billed for professional services rendered for the audit of the year-end financial statements and services that are normally provided by E&Y in connection with statutory and regulatory filings. |
|
| 3. | Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance. |
| 4. | All other fees would include fees for products and services other than the services reported above, including those related to the review and issuance of consents on various SEC filings. |
The following table presents: (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the Fund by the independent registered public accounting firm for the Fund’s fiscal years ended October 31, 2021 and February 29, 2021; and (ii) the aggregate non-audit fees billed to the investment adviser, or any of its affiliates, by the independent registered public accounting firm for the same time periods.
| Aggregate Non-Audit Fees | ||
| Registrant/Investment Adviser | 2022 | 2021 |
| BRW | $0 | $0 |
| Saba Capital Management, L.P. became the |
B-4
w SCAN TO VIEW MATERIALS & VOTE 7337 EAST DOUBLETREE RANCH ROAD SUITE 100 SCOTTSDALE, ARIZONA 85258-2034 3 EASY WAYS TO VOTE YOUR PROXY VOTE BY PHONE: Call toll-free 1-877-907-7646 and follow the recorded instructions. VOTE ON THE INTERNET: Log on to Proxyvote.com and follow the online directions. VOTE BY MAIL: Check the appropriate boxes on the Proxy Ballot below, sign and date the Proxy Ballot and return in the envelope provided. If you vote via phone or the Internet, you do not need to return your Proxy Ballot. PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON May 21, 2021. D52577-S20204 THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4, 5, 6 AND 7. For Abstain Against For Against Abstain 1. To approve the New Investment Management Agreement between the Fund and Saba Capital Management, L.P. in connection with the Adviser Transition as defined in the Proxy Statement 4. To remove the Fund’s fundamental investment restriction relating to investing in other investment companies. 5. To approve changing the Fund’s sub-classification under the Investment Company Act of 1940 from “diversified” to “non-diversified.” 2. To remove the Fund’s fundamental investment restriction relating to investing in warrants. 3. To remove the Fund’s fundamental investment restriction relating to purchasing or selling equity securities, engaging in short-selling and the use of certain option arrangements. 6. To approve a change of the investment objective and to make the investment objective non-fundamental. 7. To approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies. To avoid the additional expense of further solicitation, we strongly urge you to review, complete and return your Proxy Ballot as soon as possible. Your vote is important regardless of the number of shares owned. If you vote via phone or the Internet, you do not need to return your Proxy Ballot. Please vote, date and sign this proxy and return it promptly in the enclosed envelope. This Proxy Ballot must be signed exactly as your name(s) appear(s) hereon. If as an attorney, executor, guardian or in some representative capacity or as an officer of a corporation, please add title(s) as such. Joint owners must each sign.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting to Be Held on May 21, 2021: The Proxy Statement for the Special Meeting and the Notice of the Meeting are availablea t WWW.PROXYVOTE.COM/VOYA. D52578-S20204 VOYA PRIME RATE TRUST THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES The undersigned hereby appoints Andrew Kellerman and Aditya Bindal, or any one or all of them, proxies, with full power of substitution, to vote all shares of the Voya Prime Rate Trust, which the undersigned is entitled to vote at the Special Meeting of Shareholders to be held virtually on May 21, 2021 at 1:00 p.m. MDT, and at any adjournment(s) or postponement(s) thereof, with all of the powers the undersigned would possess if then and there personally present and especially (but without limiting the general authorization and power hereby given) to vote as indicated on the proposals, as more fully described in the Proxy Statement for the Special Meeting. To register to attend the Virtual Shareholder Meeting visit the website: https://www.viewproxy.com/voya/broadridgevsm/. This proxy will be voted as instructed. If no specification is made, the proxy will be voted “FOR” the proposals. PLEASE SIGN AND DATE ON THE REVERSE SIDE.