UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION RE QUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X] | |
Filed by a Party other than the Registrant [ ] | |
Check the appropriate box: | |
[X] | Preliminary Proxy Statement |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[ ] | Definitive Proxy Statement |
[ ] | Definitive Additional Materials |
[ ] | Soliciting Material under Rule 14a-12 |
ALPS SERIES TRUST | |
(Name of Registrant as Specified In Its Charter) | |
| |
(Name of Person Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
[X] | No fee required. | |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. | |
(1) | Title of each class of securities to whom 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: | |
(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: | |
(4) | Date Filed: |
DGS Draft 12/4/18
ALPS SERIES TRUST
Clarkston Founders Fund
Clarkston Fund
Clarkston Partners Fund
December 26, 2018
Dear Shareholders:
The enclosed Proxy Statement discusses a proposal to be voted upon by the shareholders of the Clarkston Founders Fund, the Clarkston Fund, and the Clarkston Partners Fund, each a series of the ALPS Series Trust, at a meeting to be held onFebruary 13, 2019. During the Meeting, the shareholders of each Fund will vote separately on a proposal to approve a new investment advisory agreement with Clarkston Capital Partners, LLC (“Clarkston”).
Clarkston currently serves as the adviser to the Funds and is responsible for the day-to-day management of each Fund’s assets. Clarkston is undergoing an internal reorganization. As part of the reorganization, on or about December 31, 2018, subject to certain conditions to closing, the ownership interests of the principal owners of Clarkston will be restructured and the ownership interest of one principal owner will be reduced below 25%. This reduction in ownership below 25% is deemed to be a “change in control” of Clarkston for the purpose of the Investment Company Act of 1940, as amended and will cause the automatic termination of the current advisory agreement, this assignment will automatically terminate the advisory agreement. Although the ownership interests of the principals will be restructured, the management of Clarkston will remain the same. No third parties will be introduced into the ownership structure, and all owners will have the same controlling influence over Clarkston after the Transaction as they did before the Transaction.
No Fund’s investment objectives and investment strategies will change as a result of the Transaction. The investment advisory personnel of Clarkston who provide services to each Fund are expected to remain the same.
To provide for continuity in the investment management of the Funds, you are being asked to approve a new advisory agreement with Clarkston. Under the new advisory agreement, Clarkston will continue to provide investment advisory services to the Funds subject to the oversight of the Board of Trustees, for the same fees that are currently in effect.
THE BOARD OF TRUSTEES OF THE FUNDS RECOMMENDS A VOTE FOR THE PROPOSAL.
Your vote is important no matter how many shares you own. Voting your shares early will avoid costly follow-up mail and telephone solicitation. After reviewing the enclosed materials, please complete, sign and date your proxy card and mail it promptly in the enclosed return envelope, or help save time and postage costs by calling the toll-free number and following the instructions. You may also vote via the Internet by logging on to the website indicated on your proxy card and following the instructions that will appear. If you have any questions about the proposal or the voting instructions, you may call toll-free at 1-800-290-6427 .
Very truly yours,
/s/ Jeremy O. May
Jeremy O. May
President of ALPS Series Trust
2
ALPS SERIES TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be Held on
February 13, 2019
1290 Broadway, Suite 1100
Denver, Colorado 80203
To the Shareholders:
NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of shareholders (the “Shareholders”) of the Clarkston Founders Fund, Clarkston Fund, and Clarkston Partners Fund (each a Fund” and collectively, the “Funds”), each a series of ALPS Series Trust (the “Trust”), will be held in the offices of the Trust, at 1290 Broadway, Suite 1100, Denver, Colorado 80203, on February 13, 2019 at 10:00 a.m. Mountain time.
At the Meeting, each Fund’s shareholders will be asked to act upon the following:
1. | (For each Fund) To approve a new Investment Advisory Agreement among the Trust, on behalf of the Fund, and Clarkston Capital Partners, LLC (“Clarkston” or the “Adviser”) (the “Proposal”); and |
2. | To transact such other business as may properly come before the Meeting and any adjournments thereof. |
THE BOARD OF TRUSTEES OF THE FUNDS RECOMMENDS THAT YOU VOTEFOR THE PROPOSAL.
Any shareholder who owned shares of the Funds as of the close of business on December 3, 2018 (the “Record Date”) will receive notice of the Meeting and will be entitled to vote at the Meeting. Proxies or voting instructions may be revoked at any time before they are exercised by executing and submitting a revised proxy, by giving written notice of revocation to the Funds, or by voting in person at the Meeting.
Proposal:
Clarkston serves as the adviser to the Funds and is responsible for the day-to-day management of each Fund’s assets.
3
Clarkston is undergoing an internal reorganization. As part of the reorganization, on or about December 31, 2018, subject to certain conditions to closing, the ownership interests of the principal owners of Clarkston will be restructured and the ownership interest of one principal owner will be reduced below 25% (the “Transaction”). This reduction in ownership below 25% is deemed to be a “change in control” of Clarkston for the purpose of the Investment Company Act of 1940, as amended (“1940 Act”). This “change of control” will constitute an “assignment,” as such term is understood under 1940 Act, of the current advisory agreement between Clarkston and the Trust, with respect to the Funds. Under the 1940 Act and the terms of the advisory agreement, this assignment will automatically terminate the advisory agreement. Although the ownership interests of the principals will be restructured, the management of Clarkston will remain the same. No third parties will be introduced into the ownership structure, and all owners will have the same controlling influence over Clarkston after the Transaction as they did before the Transaction.
The completion of the Transaction is contemplated to occur on or about December 31, 2018 (the date on which the closing actually occurs is referred to in these materials as the “Closing Date”), and will cause a change of control for Clarkston for the purpose of the 1940 Act and, therefore, result in the termination of the Funds’ current investment advisory agreement with Clarkston (the “Current Advisory Agreement”).
In anticipation of the completion of the Transaction and related events, the Board of Trustees has reviewed and approved an interim and a new investment advisory agreement (the “Interim Agreement” and the “New Advisory Agreement”). The Interim Agreement will take effect on the Closing Date and the New Advisory Agreement will take effect if approved by shareholders of a Fund. The Interim Agreement and the New Agreement will allow Clarkston to continue to serve as the investment adviser to that Fund, under terms that are the same in all material respects to the Current Advisory Agreement, except that there will be a new commencement date and an initial one (1) year term for the New Advisory Agreement, with annual renewal thereafter subject to approval. The Current Advisory Agreement has an initial two (2) year term, with annual renewal thereafter subject to approval.
To provide for continuity in the operation of the Funds, and to enable the Funds to benefit from favorable developments in its management, you are being asked to approve the New Advisory Agreement. Under the New Advisory Agreement, Clarkston will continue to provide investment advisory services to the Funds subject to the oversight of the Board of Trustees, under terms described above and for the same fees that are currently in effect.
No Fund’s investment objectives and investment strategies will change as a result of the Transaction. The investment advisory personnel of Clarkston who provide services to each Fund are expected to remain the same.
4
YOUR VOTE IS IMPORTANT – PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
You are cordially invited to attend the Meeting. If you attend the Meeting, you may vote your shares in person. However, we urge you, whether or not you expect to attend the Meeting in person, to complete, date, sign and return the enclosed proxy card(s) in the enclosed postage-paid envelope or vote by telephone or through the Internet. We ask your cooperation in voting your proxy promptly.
By order of the Board of Trustees of ALPS Series Trust, on behalf of the Funds
/s/ Richard M. Noyes
Richard M. Noyes
Secretary
December 26, 2018
Important Notice Regarding the Availability of Proxy Materials for the Meeting to
be Held on February 13, 2019 or any adjournment or postponement thereof
This Notice and Proxy Statement are available on the internet at www.proxyonline.com/docs/ClarkstonFunds2019.pdf. On this website, you will be able to access this Notice, the Proxy Statement, any accompanying materials and any amendments or supplements to the foregoing material that are required to be furnished to Shareholders. To request a copy of this Notice, the Proxy Statement or a Form of Proxy please call 1-800-290-6427. You may also call for information on how to obtain directions to be able to attend the Meeting in person. Copies of each Fund’s annual report have previously been mailed to Shareholders. This Proxy Statement should be read in conjunction with each Fund’s annual report. You may request a copy of the annual report by calling 1-844-680-6562 or by visiting the Funds’ website at www.Clarkstonmutualfunds.com.
5
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL
While we strongly encourage you to read the full text of the enclosed Proxy Statement, we are also providing you with a brief overview of the subject of the shareholder proposal. Your vote is important.
QUESTIONS AND ANSWERS
General:
Q. What am I being asked to vote on?
A. At the Meeting, you will be asked to act upon the following:
1. | (For each Fund) To approve a new investment advisory agreement by and between the Trust, on behalf of the Fund, and Clarkston Capital Partners, LLC (“Clarkston” or the “Adviser”) (the “Proposal”); and |
2. | To transact such other business as may properly come before the Meeting and any adjournments thereof. |
Q. Why are you sending me this information?
A. You are receiving these proxy materials because you own shares in the Funds and have the right to vote on this very important proposal concerning your investment.
Q. Who will bear the costs related to this proxy solicitation?
A. Clarkston has agreed to bear the costs related to this proxy solicitation.
Q. Who is entitled to vote?
A. If you owned shares of the Funds as of the close of business on December 3, 2018 (the “Record Date”), you are entitled to vote with respect to the proposal.
Q. When and where will the Meeting be held?
A. The Meeting will be held in the offices of the Trust at 1290 Broadway, Suite 1100, Denver, Colorado 80203, on February 13, 2019 at 10:00 a.m. Mountain time.
Q. How do I vote my shares?
A. For your convenience, there are several ways you can vote:
6
By Mail: Vote, sign and return the enclosed proxy card(s) in the enclosed self-addressed, postage-paid envelope;
By Telephone: Call the number printed on the enclosed proxy card(s);
By Internet: Access the website address printed on the enclosed proxy card(s); or
In Person: Attend the Meeting as described in the Proxy Statement.
Q. What vote is required to approve the Proposal?
A. The Proposal requires the affirmative vote of a “majority of the outstanding voting securities” of the Funds. Under the Investment Company Act of 1940, as amended (the “1940 Act”), that means an affirmative vote of the lesser of (a) 67% or more of the shares of the Funds present at the Meeting or represented by proxy if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (b) more than 50% of the outstanding shares.
Q. What happens if I sign and return my proxy card but do not mark my vote?
A. Your proxy will be voted in favor of the proposal.
Q. May I revoke my proxy?
A. You may revoke your proxy at any time before it is exercised by giving written notice of your revocation to the Funds, or by the execution and delivery of a later-dated proxy. You may also revoke your proxy by attending the Meeting, requesting the return of your proxy, and voting in person.
Q. How can I obtain a copy of each Fund’s annual or semi-annual report?
A. If you would like to receive a copy of the latest annual or semi-annual report(s) for the Funds, please call 1-844-680-6562, or write to ALPS Fund Services, Inc., P.O. Box 1920, Denver, Colorado 80201. The reports will be furnished free of charge.
Q. Whom should I call for additional information about this Proxy Statement?
A. If you need any assistance or have any questions regarding the proposal or how to vote your shares, please call toll free at 1-800-290-6427.
Proposal
Q. What is happening?
A. Clarkston serves as the adviser to the Funds and is responsible for the day-to-day management of the Funds’ assets.
7
Clarkston is undergoing an internal reorganization. As part of the reorganization, on or about December 31, 2018, subject to certain conditions to closing, the ownership interests of the principal owners of Clarkston will be restructured and the ownership interest of one principal owner will be reduced below 25% (the “Transaction”). This reduction in ownership below 25% is deemed to be a “change in control” of Clarkston for the purpose of the Investment Company Act of 1940, as amended (“1940 Act”). This “change of control” will constitute an “assignment,” as such term is understood under 1940 Act, of the current advisory agreement between Clarkston and the Trust, with respect to the Funds. Under the 1940 Act and the terms of the advisory agreement, this assignment will automatically terminate the advisory agreement. Although the ownership interests of the principals will be restructured, the management of Clarkston will remain the same. No third parties will be introduced into the ownership structure, and all owners will have the same controlling influence over Clarkston after the Transaction as they did before the Transaction.
The completion of the Transaction is contemplated to occur on or about December 31, 2018 (the date on which the closing actually occurs is referred to in these materials as the “Closing Date”), and will cause a change of control for Clarkston for purposes of the 1940 Act and, therefore, result in the termination of the Funds’ current investment advisory agreement with Clarkston (the “Current Advisory Agreement”).
In anticipation of the completion of the Transaction and related events, the Board of Trustees has reviewed and approved an interim and a new investment advisory agreement (the “Interim Agreement” and the “New Advisory Agreement”). The Interim Agreement will take effect on the Closing Date and the New Advisory Agreement will take effect if approved by shareholders of a Fund. The Interim Agreement and the New Agreement will allow Clarkston to continue to serve as the investment adviser to that Fund, under terms that are the same in all material respects to the Current Advisory Agreement, except that there will be a new commencement date and an initial one (1) year term for the New Advisory Agreement, with annual renewal thereafter subject to approval. The Current Advisory Agreement has an initial two (2) year term, with annual renewal thereafter subject to approval.
To provide for continuity in the operation of the Funds, and to enable the Funds to benefit from favorable developments in its management, you are being asked to approve the New Advisory Agreement. Under the New Advisory Agreement, Clarkston will continue to provide investment advisory services to the Funds subject to the oversight of the Board of Trustees, under terms described above and for the same fees that are currently in effect.
Q. How will the Transaction or the approval of a New Advisory Agreement affect me as a Fund Shareholder?
A. No Fund’s investment objectives or investment strategies will change as a result of the approval of the New Advisory Agreement or the completion of the Transaction, and you will still own the same shares in each Fund. The terms of the New Advisory Agreement are the same as the Current Advisory Agreement in all material respects except that there will be a new commencement date and initial term. The advisory fee rates payable to Clarkston will remain the same as under the Current Advisory Agreement.
8
If approved by the shareholders, the New Advisory Agreement will have an initial one-year term and will be subject to annual renewal thereafter. The Clarkston portfolio managers who currently manage the Funds will continue to manage the Funds under the New Advisory Agreement. Each Fund is also expected to enter into a fee waiver letter agreement with Clarkston with substantially similar material terms as the fee waiver letter agreement currently in place. The new fee waiver letter agreement will continue through January 31, 2020.
Q. Will there be any changes to the Funds’ portfolio managers?
A. The Funds’ portfolio managers will remain the same immediately following the Closing Date.
Q. Will the Funds’ names change as a result of the Transaction?
A. No. No Fund’s name will change.
Q. Has the Board of Trustees approved the New Advisory Agreement and how do the Trustees of the Funds recommend that I vote?
A. The Board of Trustees unanimously approved the New Advisory Agreement at a meeting held on November 29, 2018, and recommends that you vote FOR the Proposal.
Q. What will happen if shareholders of the Funds do not approve the New Advisory Agreement?
A. Shareholder approval of the New Advisory Agreement by the Clarkston Founders Fund, the Clarkston Fund, or the Clarkston Partners Fund is not a requirement for the Transaction to be completed. But, if a Fund does not vote in favor of the proposal then the Board may consider all other available options, including without limitation, liquidating one or more of the Funds.
9
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to you and avoid the time and expenses involved in validating your vote if you fail to sign your proxy card properly.
(1)Individual Accounts: Sign your name exactly as it appears in the registration on the proxy card.
(2)Joint Accounts: Either party may sign, but the name of the signing party should conform exactly to the name shown in the registration on the proxy card.
(3)Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:
Registration | Valid Signature | |
Corporate Accounts | ||
(1) ABC Corp. | ABC Corp. | |
(2) ABC Corp. | John Doe, Treasurer | |
(3) ABC Corp. c/o John Doe, Treasurer | John Doe | |
(4) ABC Corp. Profit Sharing Plan | John Doe, Trustee | |
Trust Accounts | ||
(1) ABC Trust | Jane B. Doe, Trustee | |
(2) Jane B. Doe, Trustee u/t/d 12/28/78 | Jane B. Doe | |
Custodial or Estate Accounts | ||
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA | John B. Smith | |
(2) Estate of John B. Smith | John B. Smith, Jr., Executor |
10
ALPS SERIES TRUST
Clarkston Founders Fund
Clarkston Fund
Clarkston Partners Fund
PROXY STATEMENT
for the Special Meeting of Shareholders
to be held on February 13, 2019
1290 Broadway
Suite 1100
Denver, Colorado 80203
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Trustees of ALPS Series Trust (the “Trust”), on behalf of the Clarkston Founders Fund, the Clarkston Fund, and the Clarkston Partners Fund (each a “Fund”, and collectively the “Funds”), each a series of the Trust, to be used at the special meeting of shareholders (the “Shareholders”) of the Funds to be held in the offices of the Trust, at 1290 Broadway, Suite 1100, Denver, Colorado 80203, on February 13, 2019 at 10:00 a.m. Mountain time and at any adjournments thereof (such meeting and any adjournments being referred to as the “Meeting”).
Solicitation of Proxies
The solicitation of proxies for use at the Meeting is being made primarily by the Funds via the mailing on or about December 26, 2018 of the Notice of Special Meeting of Shareholders, this Proxy Statement and the accompanying proxy card. Supplementary solicitations may be made by mail, telephone or personal interview (i) by officers and Trustees of the Funds, (ii) by officers, employees and agents of the Funds’ investment adviser, Clarkston Capital Partners, LLC (“Clarkston” or the “Adviser”) and/or its affiliates, (iii) by officers, employees and agents of the Funds’ administrator, ALPS Fund Services, Inc. (“ALPS”), and/or its affiliates; and/or (iv) AST Fund Solutions, LLC, the Funds’ proxy solicitor. Authorization to execute proxies may be obtained from Shareholders through instructions transmitted by telephone, facsimile, electronic mail or other electronic means.
At the Meeting, each Fund’s shareholders will be asked to act upon the following:
11
1. | (For each Fund)To approve a new investment advisory agreement by and between the Trust, on behalf of the Fund, and Clarkston (the “Proposal”); and |
2. | To transact such other business as may properly come before the Meeting and any adjournments thereof. |
The Board of Trustees has set the close of business on December 3, 2018 as the record date (the “Record Date”), and only Shareholders of record on the Record Date will be entitled to vote on the Proposal at the Meeting. The vote for the Proposal will be at the Fund level, meaning that the Shareholders of all classes of the Funds will vote together.
As of the Record Date, the number of Fund shares issued and outstanding is:
Fund | Number of Shares Issued and Outstanding |
Clarkston Founders Fund | [_________] |
Clarkston Fund | [_________] |
Clarkston Partners Fund | [_________] |
Additional information regarding outstanding shares and voting your proxy is included at the end of this Proxy Statement in the sections titled “GENERAL INFORMATION” and “VOTING INFORMATION.”
12
TABLE OF CONTENTS
Page | |
General Overview | |
Evaluation by the Board | |
Information about the Clarkston Mutual Fund Advisors Trust | |
Information about Other Service Providers | |
General Information | |
Voting Information | |
Exhibit A: Form of New Advisory Agreement | |
Exhibit B: Data Regarding Current and New Advisory Agreement |
13
GENERAL OVERVIEW
PROPOSAL: APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
The Transaction
Clarkston serves as the adviser to the Funds and is responsible for the day-to-day management of the Funds’ assets.
Clarkston is undergoing an internal reorganization. As part of the reorganization, on or about December 31, 2018, subject to certain conditions to closing, the ownership interests of the principal owners of Clarkston will be restructured and the ownership interest of one principal owner will be reduced below 25% (the “Transaction”). This reduction in ownership below 25% is deemed to be a “change in control” of Clarkston for the purpose of the Investment Company Act of 1940, as amended (“1940 Act”). This “change of control” will constitute an “assignment,” as such term is understood under 1940 Act, of the current advisory agreement between Clarkston and the Trust, with respect to the Funds. Under the 1940 Act and the terms of the advisory agreement, this assignment will automatically terminate the advisory agreement. Although the ownership interests of the principals will be restructured, the management of Clarkston will remain the same. No third parties will be introduced into the ownership structure, and all owners will have the same controlling influence over Clarkston after the Transaction as they did before the Transaction.
The completion of the Transaction is contemplated to occur on or about December 31, 2018 (the date on which the closing actually occurs is referred to in these materials as the “Closing Date”), and will cause a change of control for Clarkston for purposes of the 1940 Act and, therefore, result in the termination of the Funds’ current investment advisory agreement with Clarkston (the “Current Advisory Agreement”).
In anticipation of the completion of the Transaction and related events, the Board of Trustees has reviewed and approved an interim and a new investment advisory agreement (the “Interim Agreement” and the “New Advisory Agreement”). The Interim Agreement will take effect on the Closing Date and the New Advisory Agreement will take effect if approved by shareholders of a Fund. The Interim Agreement and the New Agreement will allow Clarkston to continue to serve as the investment adviser to that Fund, under terms that are the same in all material respects to the Current Advisory Agreement, except that there will be a new commencement date and an initial one (1) year term for the New Advisory Agreement, with annual renewal thereafter subject to approval. The Current Advisory Agreement has an initial two (2) year term, with annual renewal thereafter subject to approval.
14
New Advisory Agreement
To provide for continuity in the operation of the Funds, and to enable the Funds to benefit from favorable developments in its management, you are being asked to approve the New Advisory Agreement. Under the New Advisory Agreement, Clarkston will continue to provide investment advisory services subject to the oversight of the Board of Trustees, under terms that are similar in all material respects to the Current Advisory Agreement and for the same fees that are currently in effect.
No Fund’s investment objectives and investment strategies will change as a result of the Transaction. The investment advisory personnel of Clarkston who provide services to the Funds will remain the same.
Each of the members of the Board of Trustees who are not “interested persons” (as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Funds or Clarkston (the “Independent Trustees”), are expected to continue to serve on the Board of Trustees following the Closing Date. The Board of Trustees will continue to make decisions regarding the independent accountants, custodian, administrators, distributor and transfer agent of the Funds. Clarkston is not proposing any changes to these existing service providers at this time.
Shareholders of the Funds are being asked to approve the New Advisory Agreement between the Trust, on behalf of the Funds, and Clarkston. Approval of the New Advisory Agreement is being sought so that the operation of the Funds can continue without interruption.
Board Approval and Recommendation
During its meeting on November 29, 2018, the Board of Trustees considered various factors relating to the Transaction and the New Advisory Agreement. In connection with such meeting, the Board reviewed certain information provided by Clarkston at the Board’s request.
On November 29, 2018, the Board of Trustees of the Trust, including a majority of the Independent Trustees: (i) unanimously approved the New Advisory Agreement and (ii) unanimously recommended that Shareholders of the Funds approve the New Advisory Agreement. A summary of the Board’s considerations is provided below in the section titled “EVALUATION BY THE BOARD.”
Description and Comparison of Current and New Advisory Agreement
The form of the New Agreement is set forth inExhibit A to this Proxy Statement. The description of terms in this section and the summaries inExhibit B are qualified in their entirety by reference toExhibit A.Exhibit B to this Proxy Statement shows, with respect to the Funds:
15
● | the date of the Current Advisory Agreement; |
● | the date on which the Current Advisory Agreement were last approved by the Board; |
● | the aggregate amount of Clarkston’s advisory fee and the amount and purpose of any other payments by the Funds or Clarkston, or any of its affiliated persons or affiliated person of such person, during the fiscal year ended September 30, 2018; |
● | whether Clarkston has waived, reduced or otherwise agreed to reduce its compensation with respect to the Funds under any applicable contract. |
Except as described below, the terms of the New Advisory Agreement are the same in all material respects except that there will be a new initial term. The Prior Agreement was renewed by the Board of Trustees on August 23, 2018.
Services Provided
Under the terms of the Current Advisory Agreement, Clarkston serves as the investment adviser for the Funds. Subject to the supervision of the Board of Trustees, Clarkston provides a continuous investment program for the Funds, including investment research and management with respect to all securities, investments, cash and cash equivalents in the Funds. Generally, Clarkston determines from time to time what securities and other investments will be purchased, retained or sold by the Funds, and provides such services for the Funds in accordance with the Funds’ investment objectives, policies, and restrictions as stated in each Fund’s prospectus and statement of additional information, as currently in effect or as supplemented from time to time.
Clarkston’s responsibilities and obligations under the New Advisory Agreement for the Funds will be substantively identical to those under the Current Advisory Agreement.
Compensation
Fund | Fee Rates (annualized rate) |
Clarkston Founders Fund | 0.75% of the average daily net assets of the Fund |
Clarkston Fund | 0.50% of the average daily net assets of the Fund |
Clarkston Partners Fund | 0.80% of the average daily net assets of the Fund |
16
These investment advisory fees shall be calculated as of the last business day of each month based upon the average daily net assets of each Fund determined in the manner described in each Fund’s Prospectus and/or Statement of Additional Information and shall be paid to the Adviser by the Funds as soon as practicable after the last day of each month.
The advisory fee rates payable to Clarkston under the New Advisory Agreement will be identical to the fee rates payable under the Current Advisory Agreement.
Each Fund is also expected to enter into a new fee waiver letter agreement with Clarkston with substantially similar material terms as the fee waiver letter agreement currently in place. The new fee waiver letter agreement will continue through January 31, 2020.
Liability of Clarkston
Under the terms of the Current Advisory Agreement, Clarkston assumes no responsibility under this Agreement other than to render the services called for under the Agreement. Clarkston is not be liable for any error of judgment or for any loss suffered by the Trust or the Funds in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of, or from reckless disregard by it of its obligations and duties under, this Agreement. Clarkston has no responsibility or liability for the accuracy or completeness of the Trust’s registration statement under the 1940 Act or the Securities Act of 1933, as amended (the “1933 Act”), except for information supplied by Clarkston for inclusion in the registration statement.
Term and Termination
The Current Advisory Agreement provides that it shall remain in effect for an initial term of two (2) years, and from year to year thereafter provided such continuance is approved at least annually by the vote of a majority of the trustees of the Trust who are not “interested persons” (as defined in the 1940 Act) of the Trust, which vote must be cast in person at a meeting called for the purpose of voting on such approval;provided,however, that:
17
(a) the Trust may, at any time and without the payment of any penalty, terminate this Agreement upon 30 days’ written notice of a decision to terminate this Agreement by: (i) the Trust’s trustees; or (ii) the vote of a majority of the outstanding voting securities of the Funds;
(b) Clarkston may, at any time and without the payment of penalty, terminate this Agreement upon 60 days’ notice to the Trust on behalf of the Funds; and
(c) this Agreement shall immediately terminate in the event of its assignment (within the meaning of the 1940 Act and the Rules thereunder),
In the event of the assignment of the Current Advisory Agreement, Clarkston shall notify the Trust on behalf of the Funds in writing sufficiently in advance of any proposed change of control, as defined in Section 2(a)(9) of the 1940 Act, as will enable the Trust to consider whether an assignment as defined in Section 2(a)(4) of the 1940 Act will occur, and to take the steps necessary to enter into a new contract with Clarkston.
The New Advisory Agreement will have an initial term of one (1) year, and otherwise will be substantively identical to the Current Advisory Agreement. The commencement date of the New Advisory Agreement is expected to be the date such agreement is approved by the Shareholders.
Portfolio Management
Each Fund’s portfolio managers will remain the same immediately following the Closing Date.
Required Quorum and Vote
As provided under the governing documents of the Trust, the presence in person or by proxy of at least one-third of the votes entitled to be cast on any matter shall be a quorum as to such matter;provided, however, that any lesser number shall be sufficient for matters upon which the Shareholders vote at adjournments.
Assuming a quorum is present, approval of the Proposal separately requires the affirmative vote of a “majority of the outstanding voting securities” of the Funds, which, under the 1940 Act, means the affirmative vote of the lesser of (a) 67% or more of the shares of the Funds present at the Meeting or represented by proxy if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (b) more than 50% of the outstanding shares. The vote for the Proposal will be at the Fund level, meaning that the Shareholders of all share classes of a Fund will vote together, and each Fund will vote separately.
18
Effect if the Proposal is Not Approved
Shareholder approval of the New Advisory Agreement by the Clarkston Founders Fund, the Clarkston Fund or the Clarkston Partners Fund is not a requirement for the Transaction to be completed. But, if a Fund does not vote in favor of the proposal then the Board may consider all other available options, including without limitation, liquidating one or more of the Funds.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF THE FUNDS VOTE “FOR” THE PROPOSAL
***
EVALUATION BY THE BOARD
Summary of Board Meeting and Considerations
The Board of Trustees met in person on November 29, 2018 to evaluate, among other things, the Transaction, Clarkston, and to determine whether approving the New Agreement was in the best interests of each Fund’s shareholders. At this meeting and throughout the consideration process, the Board, including a majority of the Independent Trustees, was advised by counsel.
In their consideration of the New Agreement, the Board and its counsel reviewed materials furnished by Clarkston; communicated with senior representatives of Clarkston regarding its personnel, operations and financial condition. The Board also discussed the terms of the Transaction and the New Agreement, and considered their possible effects on each Fund and its shareholders.
During this meeting, the representatives of Clarkston indicated their belief that the Transaction would not adversely affect (i) the continued operation of any Fund; or (ii) the capability of Clarkston to continue to provide the same level of advisory services to any Fund. Those representatives indicated that they believed that the Transaction may provide certain benefits to a Fund, but also indicated that there could be no assurance as to any particular benefits that may result.
In connection with the Board’s recommendation that shareholders approve the New Agreement, the Trustees considered, among others, the following factors, but without identifying any single factor as all-important or controlling:
(i) the assurances from Clarkston that the way each Fund’s assets are managed will not change in any material manner, that the personnel who currently manage each Fund’s assets will continue to do so after the Transaction, and that there is not expected to be any diminution in the nature, quality and extent of services provided to any Fund;
19
(ii) the fact that the material terms of the New Agreement, including the fees payable by each Fund, are substantively identical to the material terms of the Prior Agreement;
(iii) the history, reputation, qualifications and background of Clarkston and their key personnel;
(iv) the fact that Fund shareholders will not bear any costs relating to the Transaction, insofar as Clarkston and its affiliates thereof have agreed to pay such expenses, including proxy solicitation expenses;
(v) information provided by representatives of Clarkston regarding the anticipated impact of the Transaction; and
(vi) other factors described in greater detail below.
Board Consideration of the New Agreement
The 1940 Act requires that the Board of Trustees of each Fund review each Fund’s advisory contract and consider whether to approve, and to recommend that the shareholders approve, that contract.
In anticipation of the Board’s meeting on November 29, 2018 and as part of the process to consider the New Agreement, legal counsel to the Independent Trustees requested certain information from Clarkston. In response to these requests, the Independent Trustees received reports from Clarkston that addressed specific factors to be considered by the Board. The Board also received from counsel a memorandum regarding the Board’s responsibilities pertaining to the approval of advisory contracts.
At the November 29, 2018 meeting, the Trustees met in person and discussed with representatives from Clarkston the general plans and intentions regarding each Fund. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of Clarkston in connection with the Transaction, including the anticipated senior management structure. The Independent Trustees met to consider Clarkston’s recommendations as to the approval of the New Agreement. Based on its evaluation, the Board unanimously concluded that the terms of the New Agreement were reasonable and fair and that its approval was in the best interests of each Fund and its shareholders.
In voting to approve the New Agreement, the Board did not identify any single factor as all-important or controlling. The following summary does not identify all the matters considered by the Board, but provides a summary of the principal matters the Board considered.
20
Nature, Extent, and Quality of the Services: The Trustees recalled their recent renewal of the current investment advisory agreement during which they evaluated the nature, extent and quality of services provided to the Clarkston Funds. The Trustees reviewed and considered Clarkston Capital’s personnel, its history as an asset manager and its performance. The Trustees also discussed the research and decision-making processes utilized by Clarkston Capital, including the methods adopted to seek to achieve compliance with the investment objectives, policies and restrictions of the Clarkston Funds.
The Trustees reviewed the background and experience of Clarkston Capital’s management relating to the Clarkston Funds, including the qualifications, background and responsibilities of the portfolio managers primarily responsible for the day-to-day portfolio management, and noted that the Transaction would not result in a change in portfolio managers. They also discussed the resources of Clarkston Capital devoted to research and analysis of actual and potential investments. They considered the Trust’s experience with Clarkston Capital, including the Clarkston Capital’s responsiveness and compliance record.
Investment Advisory Fee Rate: The Trustees reviewed and considered the proposed annual advisory fee to be paid by the Trust on behalf of each Clarkston Fund to Clarkston Capital, noting that the fees would not change as a result of the transaction.
The Trustees considered the information they received when the current investment advisory agreement was recently renewed, comparing each Clarkston Fund’s contractual annual advisory fees and overall expenses with those of funds in the expense group and universe of funds provided by FUSE, an independent provider of investment company data, which screened retail and institutional funds with similar strategies and comparable fee structures of the Clarkston Funds, and excluded all others. Each FUSE peer group consisted of the applicable Clarkston Fund and several other funds identified by FUSE using similar strategies with comparable fee structures.
The Trustees also noted that Clarkston Capital managed other institutional and strategic accounts, and model delivery service clients, using investment strategies similar to the strategies of the Clarkston Funds, and reviewed the fee structures for, and services rendered to, such clients. Bearing in mind the limitations of comparing different types of accounts and the different levels of service typically associated with such accounts, the Trustees noted that the fee structures applicable to Clarkston Capital’s other clients employing a comparable strategy to any Clarkston Fund were not indicative of any unreasonableness with respect to the advisory fee payable by such Clarkston Fund.
Performance: The Trustees recalled their discussion of performance of each Clarkston Fund when the current investment advisory agreement was recently renewed. They reviewed performance information for each Clarkston Fund’s through September 30, 2018 provided by Clarkston Capital, including sector allocations and attribution results. They noted that the performance of each Fund trailed the relevant benchmark index since inception and further noted the relatively short performance period for all the Clarkston Funds, especially the Clarkston Founders Fund. They discussed information provided related to the upside and downside capture ratio of the Clarkston Capital strategy, as well as recent cash position of the strategy, and how that information reflects the risk of investing in the Funds. They considered the adviser’s confidence that the valuations of the companies in the portfolios would be realized over the long term.
21
Profitability: The Trustees received and considered actual and estimated profitability analyses provided by Clarkston Capital when the current investment advisory agreement was recently renewed, as well as Clarkston Capital’s confirmation that profitability has not materially changed since the last renewal. The Trustees considered the profits, if any, realized and anticipated to be realized by Clarkston Capital relating to the operation of each Clarkston Fund. The Trustees then considered the financial condition of Clarkston Capital. They concluded that any profits would remain reasonable after the Transaction.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to each Clarkston Fund would be passed along to the shareholders under the Investment Advisory Agreement. The Trustees concluded that the expense limitation provided by Clarkston Capital was a benefit to shareholders and, based on current asset levels, adequately addressed the issue.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by Clarkston Capital from its relationship with each Clarkston Fund, including research services.
The Board summarized its deliberations with respect to the Investment Advisory Agreement with Clarkston Capital. In evaluating Clarkston Capital and the fees to be charged under the proposed Investment Advisory Agreement, the Trustees concluded that no single factor reviewed by the Trustees was identified by the Trustees to be determinative as the principal factor in whether to approve the Investment Advisory Agreement. Further, the Independent Trustees were advised by independent legal counsel throughout the process. The Trustees, including all the Independent Trustees, concluded that:
● | each Clarkston Fund’s contractual advisory fee was not unreasonable; |
● | the nature, extent and quality of services to be rendered by Clarkston Capital under the proposed Investment Advisory Agreement were adequate; |
● | bearing in mind the relatively short performance history of the Clarkston Funds, the performance of each Clarkston Fund was acceptable; |
● | the estimated profitability of Clarkston Capital relating to the management of each Clarkston Fund was not unreasonable; and |
● | there were no material economies of scale or other material incidental benefits accruing to Clarkston Capital because of its relationship with each Clarkston Fund. |
Based on its evaluation of the considerations, the Board unanimously voted to approve the New Agreement, and to recommend to the shareholders of each Fund that they approve the New Agreement.
22
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act permits an investment adviser of a registered investment company (or any affiliated persons of the investment adviser) to receive any amount or benefit in connection with a sale of an interest in the investment adviser, provided that two conditions are satisfied.
First, an “unfair burden” may not be imposed on the investment company as a result of the sale of the interest, or any express or implied terms, conditions or understandings applicable to the sale of the interest. The term “unfair burden,” as defined in the 1940 Act, includes any arrangement during the two-year period after the transaction whereby the investment adviser (or predecessor or successor adviser), or any “interested person” of the adviser (as defined in the 1940 Act), receives or is entitled to receive any compensation, directly or indirectly, from the investment company or its security holders (other than fees for bona fide investment advisory or other services), or from any person in connection with the purchase or sale of securities or other property to, from or on behalf of the investment company (other than ordinary fees for bona fide principal underwriting services).
Second, during the three-year period after the transaction, at least 75% of the members of the investment company’s board of trustees/directors cannot be “interested persons” (as defined in the 1940 Act) of the investment adviser or its predecessor.
The Board of Trustees intends for the Transaction to come within the safe harbor provided by Section 15(f) of the 1940 Act. The Board believes that the Transaction will not result in the imposition of an “unfair burden” on the Funds. At the present time, three (3) of the four (4) Trustees are classified as Independent Trustees and following the Transaction, all four (4) of the Independent Trustees will continue to be classified as such.
In addition, the Funds are also expected to enter into a new fee waiver letter agreement with Clarkston with substantially similar material terms as the fee waiver letter agreement currently in place. The new fee waiver letter agreement will continue through January 31, 2020.
INFORMATION ABOUT CLARKSTON CAPITAL PARTNERS, LLC
Clarkston Capital Partners, LLC (“Clarkston”) is currently engaged to manage the investments of the Funds in accordance with the prospectus and other offering documents, investment objective, policies and limitations and investment guidelines established by Clarkston and the Board of Trustees. Clarkston is located at 91 West Long Lake Road, Bloomfield Hills, MI 48304. As of October 31, 2018, Clarkston had approximately $3.64 billion in assets under management.
Information regarding the principal executive officers and directors of Clarkston their principal occupations for the past five years is set forth below:
23
Name and Address* |
Principal Occupation (all at Clarkston) | Position(s) with the Funds (if any) |
Jeffrey A. Hakala | Member, Chief Executive Officer and Chief Investment Officer | Portfolio Manager |
Gerald W. Hakala | Member and Managing Partner, Equities | Portfolio Manager |
Jeremy J. Modell | Member, Managing Partner and Portfolio Manager, Fixed Income | None |
* | The business address for each person listed is 91 West Long Lake Road, Bloomfield Hills, MI 48304. |
INFORMATION ABOUT OTHER SERVICE PROVIDERS
Administrator, Distributor and Transfer Agent
ALPS Fund Services, 1290 Broadway, Suite 1100, Denver, Colorado, 80203, serves as administrator and transfer agent to the Funds. ALPS Distributors, Inc., 1290 Broadway, Suite 1100, Denver, Colorado, 80203, serves as distributor of the Funds’ shares.
GENERAL INFORMATION
Ownership of Shares
As of the Record Date, the number of Fund shares issued and outstanding is:
Fund | Number of Shares Issued and Outstanding |
Clarkston Founders Fund | [_________] |
Clarkston Fund | [_________] |
Clarkston Partners Fund | [_________] |
As of the Record Date, and to the best knowledge of the Trust, the following persons were known to own of record more than 5% of any class of the voting securities of the Funds:
[add 5% table for each fund, each class here]
[As of the Record Date, the Trustees and officers of the Trust, either individually or as a group, owned less than 1% of the outstanding shares of the Funds.]
Any person owning more than 25% of the outstanding shares of the Funds may be deemed to control it.
As of the Record Date, no officer or Trustee owns securities of, or has any other material direct or indirect interest in, Clarkston or any person controlling, controlled by or under common control with Clarkston. As of the Record Date, no Trustee has had any material interest, direct or indirect, in any material transaction, proposed or otherwise, since October 1, 2017, to which Clarkston was a party.
24
Other Information
During the most recent fiscal year ended September 30, 2018, no commissions were paid by the Funds to a broker affiliated with Clarkston.
Payment of Solicitation Expenses
Clarkston will pay the expenses of the preparation, printing and mailing of this Proxy Statement and its enclosures and of all solicitations. The aggregate cost of the proxy solicitation is expected to be approximately [$___,___].
Delivery of Proxy Statement
In certain circumstances, 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, unless the Funds has received contrary instructions from one or more of the household’s Shareholders. If a Shareholder needs an additional copy of this Proxy Statement, would like to receive separate copies in the future, or would like to request delivery of a single copy to Shareholders sharing an address, please contact 1-800-290-6427.
Other Business
The Board of Trustees does not intend to bring any matters before the Meeting other than the Proposal described in this Proxy Statement, and the Board of Trustees is not aware of any other matters to be brought before the Meeting by others. Because matters not known at the time of the solicitation may come before the Meeting, the proxy as solicited confers discretionary authority with respect to such matters as properly come before the Meeting, including any adjournment(s) or postponement(s) thereof, and it is the intention of the persons named as attorneys-in-fact in the proxy (or their substitutes) to vote the proxy in accordance with their judgment on such matters.
Submission of Certain Shareholder Proposal
The Trust is generally not required to hold annual meetings of shareholders, and the Trust generally does not hold a meeting of shareholders in any year, unless certain specified shareholder actions, such as the election of directors or the approval of a new advisory agreement, are required to be taken under state law or the 1940 Act. By observing this policy, the Trust seeks to avoid the expenses customarily incurred in the preparation of proxy materials and the holding of shareholders’ meetings, as well as the related expenditure of staff time.
25
A shareholder desiring to submit a proposal intended to be presented at any meeting of shareholders of a series of the Trust hereafter called should send the proposal to the Secretary of the Trust at the Trust’s principal offices within a reasonable time before the solicitation of proxies for such meeting occurs. The mere submission of a proposal by a shareholder does not guarantee that such proposal will be included in the proxy statement because certain rules under the federal securities laws must be complied with before inclusion of the proposal is required. Also, the submission does not mean that the proposal will be presented at the meeting. For a shareholder proposal to be considered at a shareholders’ meeting, it must be a proper matter for consideration under Delaware law.
Reports to Shareholders and Financial Statements
The Annual Report to Shareholders of the Funds (if available), including financial statements of the Funds, have previously been sent to Fund shareholders.Upon request, each Fund’s most recent annual and subsequent semi-annual reports (when available) can be obtained at no cost.To request a report for the Funds, please call 1-844-680-6562, write to ALPS Fund Services, Inc., P.O. Box 1920, Denver, Colorado 80201, or visit www.clarkstonfunds.com.
VOTING INFORMATION
Voting Rights
Only Shareholders of record of a Fund on the Record Date may vote. Shareholders of record on the Record Date are entitled to be present and to vote at the Meeting. Each share or fractional share is entitled to one vote or fraction thereof.
Each proxy solicited by the Board of Trustees which is properly executed and returned in time to be voted at the Meeting will be voted at the Meeting in accordance with the instructions on the proxy. Any proxy may be revoked at any time prior to its use by written notification received by the Trust’s Secretary, by the execution and delivery of a later-dated proxy, or by attending the Meeting and voting in person. Any letter of revocation or later-dated proxy must be received by the Funds prior to the Meeting and must indicate your name and account number to be effective. Proxies voted by telephone or Internet may be revoked at any time before they are voted at the Meeting in the same manner that proxies voted by mail may be revoked.
For the Proposal, the Funds understand that the New York Stock Exchange (the “NYSE”) has taken the position that broker-dealers that are members of the NYSE and that have not received instructions from a customer prior to the date specified in the broker-dealer firms’ request for voting instructions may not vote such customer's shares on a new investment advisory contract. Therefore, NYSE broker-dealers that have not received customer instructions will not be permitted to vote customer shares with respect to the Proposal. A signed proxy card or other authorization by a beneficial owner of each Fund’s shares that does not specify how the beneficial owner’s shares are to be voted on a proposal may be deemed to be an instruction to vote such shares in favor of the Proposal.
26
Abstentions and broker non-votes will be counted as present for purposes of determining whether a quorum is present. “Broker non-votes” occur where: (i) shares are held by brokers or nominees, typically in “street name”; (ii) instructions have not been received from the beneficial owners or persons entitled to vote the shares; and (iii) the broker or nominee does not have discretionary voting power on a matter. Abstentions and broker non-votes will be disregarded in determining the “votes cast” on the Proposal, and therefore, will have the effect of a vote against the Proposal.
Quorum; Adjournment
The presence at the Meeting of holders of a majority of the outstanding shares of a Fund entitled to vote at the Meeting (in person or by proxy) constitutes a quorum for that Fund.
If the necessary quorum to transact business or the vote required to approve the Proposal is not obtained at the Special Meeting, or if a quorum is obtained but sufficient votes required to approve the Proposal, the persons named as proxies on the enclosed proxy card may propose one or more adjournments of the Meeting to permit, in accordance with applicable law, further solicitation of proxies with respect to the Proposal. Whether or not a quorum is present, any such adjournment as to a matter will require the affirmative vote of the holders of a majority of the shares represented at that meeting, either in person or by proxy. The meeting may be held as adjourned within a reasonable time after the date set for the original meeting without further notice, unless a new record date is established for the adjourned meeting and the adjourned meeting is held less than 10 days or more than 90 days from the record date. In the event of an adjournment, no notice is required other than an announcement at the meeting at which adjournment is taken.
The presence of a quorum alone, however, is not sufficient to approve the Proposal (see “Vote Required” below).
Vote Required
Approval of the Proposal will require the affirmative vote of a “majority of the outstanding voting securities” of the Funds as defined in the 1940 Act. This means the lesser of (1) 67% or more of the shares of the Funds present at the Meeting if more than 50% of the outstanding shares of the Funds are present in person or represented by proxy, or (2) more than 50% of the outstanding shares of the Funds. The vote for the Proposal will be at the Fund level, meaning that the Shareholders of all share classes of a Fund will vote together, and each Fund will vote separately.
27
To assure the presence of a quorum at the Meeting (which will allow for the transaction of business), and to help assure that your vote is noted, please promptly execute and return the enclosed proxy. A self-addressed, postage-paid envelope is enclosed for your convenience. Alternatively, you may vote by telephone or through the Internet at the number or website address printed on the enclosed proxy card(s).
Should shareholders require additional information regarding the proxy or replacement proxy cards, they may call toll free at 1-800-290-6427. Representatives are available Monday through Friday, 9:00 a.m. Eastern time to 10:00 p.m. Eastern time.
28
EXHIBITS TO PROXY STATEMENT
EXHIBIT A: Form of New Advisory Agreement
EXHIBIT B: Data Regarding Current Advisory Agreement and New Advisory Agreement
EXHIBIT B
DATA REGARDING CURRENT AND NEW ADVISORY AGREEMENT
A. | Dates of Current Agreement |
Current Agreement | Last approved by Board on | Last approved by Shareholders on | |
Clarkston Founders Fund | August 23, 2018 | April 27, 2016 | |
Clarkston Fund | August 23, 2018 | September 8, 2015 | |
Clarkston Partners Fund | August 23, 2018 | September 8, 2015 |
B. | Advisory Fee Rates Under Current and New Advisory Agreement for the Funds. |
Fund | Fee Rates (annualized rate) |
Clarkston Founders Fund | 0.75% of the average daily net assets of the Fund |
Clarkston Fund | 0.50% of the average daily net assets of the Fund |
Clarkston Partners Fund | 0.80% of the average daily net assets of the Fund |
These investment advisory fees shall be calculated as of the last business day of each month based upon the average daily net assets of each Fund determined in the manner described in each Fund’s Prospectus and/or Statement of Additional Information and shall be paid to the Adviser by the Funds as soon as practicable after the last day of each month.
The management fee payable to Clarkston under the New Advisory Agreement will be the same as under the Current Advisory Agreement.
B-1
C. | Payments to Clarkston During the Fiscal Year Ended September 30, 2018. |
Aggregate Advisory Fees Paid by the Fund to Clarkston for Fiscal Year Ended 9/30/18 | Aggregate Other Payments by the Fund to Clarkston for Fiscal Year Ended 9/30/18 | Aggregate Other Payments by the Fund to Affiliates of Clarkston or Affiliates of Such Affiliates for Fiscal Year Ended 9/30/18 |
$5,951,448 | $1,962,784 | $0 |
E. | Whether Clarkston Has Waived, Reduced or Otherwise Agreed to Reduce its Compensation with respect to the Funds. |
Clarkston has contractually agreed to waive a portion of its management fees and/or administration fees and/or reimburse additional other expenses so as to limit each Fund’s Total Annual Fund Operating Expenses, exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses.
Clarkston Founders Fund
Clarkston has contractually agreed to limit the amount of the Fund’s Total Annual Fund Operating Expenses, exclusive of shareholder service fees, brokerage expenses, interest expenses, acquired fund fees and expenses, taxes and extraordinary expenses, to an annual rate of 0.80% of the Fund’s average daily net assets for the Institutional Class shares. This agreement is in effect through January 31, 2020. Clarkston may not terminate this agreement without the approval of the Fund’s Board of Trustees. Clarkston will be permitted to recover, on a class-by-class basis, expenses it has borne subsequent to the effective date of the agreement described above (whether through reduction of its management fee or otherwise) only to the extent that the Fund’s expenses in later periods do not exceed the lesser of: (1) the contractual expense limit in effect at the time Clarkston waives or limits the expenses; or (2) the contractual expense limit in effect at the time Clarkston seeks to recover the expenses; provided, however, that the Fund will not be obligated to reimburse any such expenses borne by Clarkston more than three years after the date on which the fee or expense was waived or limited or assumed and paid by Clarkston, as calculated on a monthly basis.
Clarkston Fund
Clarkston has contractually agreed to limit the amount of the Fund’s Total Annual Fund Operating Expenses, exclusive of shareholder services fees, brokerage expenses, interest expenses, acquired fund fees and expenses, taxes and extraordinary expenses, to an annual rate of 0.55% of the Fund’s average daily net assets for the Institutional Class shares. This agreement is in effect through January 31, 2020. Clarkston may not terminate this agreement without the approval of the Fund’s Board of Trustees. Clarkston will be permitted to recover, on a class-by-class basis, expenses it has borne subsequent to the effective date of the agreement described above (whether through reduction of its management fee or otherwise) only to the extent that the Fund’s expenses in later periods do not exceed the lesser of: (1) the contractual expense limit in effect at the time Clarkston waives or limits the expenses; or (2) the contractual expense limit in effect at the time the Adviser seeks to recover the expenses; provided, however, that the Fund will not be obligated to reimburse any such expenses borne by Clarkston more than three years after the end of the date on which the fee or expense was waived or limited or assumed and paid by Clarkston, as calculated on a monthly basis.
B-2
Clarkston Partners Fund
Clarkston has contractually agreed to limit the amount of the Fund’s Total Annual Fund Operating Expenses, exclusive of shareholder service fees, brokerage expenses, interest expenses, acquired fund fees and expenses, taxes and extraordinary expenses, to an annual rate of 0.85% of the Fund’s average daily net assets for each of the Founders Class shares and the Institutional Class shares. This agreement is in effect through January 31, 2020. Clarkston may not terminate this agreement without the approval of the Fund’s Board of Trustees. The Adviser will be permitted to recover, on a class-by-class basis, expenses it has borne subsequent to the effective date of the agreement described above (whether through reduction of its management fee or otherwise) only to the extent that the Fund’s expenses in later periods do not exceed the lesser of: (1) the contractual expense limit in effect at the time Clarkston waives or limits the expenses; or (2) the contractual expense limit in effect at the time Clarkston seeks to recover the expenses; provided, however, that the Fund will not be obligated to reimburse any such expenses borne by Clarkston more than three years after the date on which the fee or expense was waived or limited or assumed and paid by Clarkston, as calculated on a monthly basis.
B-3