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Waycross Independent Trust

Filed: 2 Apr 21, 12:47pm

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

 

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Waycross Independent Trust

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Waycross Independent Trust

 

Waycross Long/Short Equity Fund

 

(the “Fund”)

 

4965 U.S. Highway 42, Suite 2900

Louisville, KY 40222

 

April 2, 2021

 

Dear Shareholders:

 

The enclosed Proxy Statement contains information about a proposal (“Proposal 1”) to approve a new investment advisory agreement (the “New Advisory Agreement”) between Waycross Independent Trust (the “Trust”), on behalf of the Fund, and Waycross Partners, LLC (“Waycross” or the “Adviser”), the investment adviser to the Fund, and a proposal (“Proposal 2”, and together with Proposal 1, the “Proposals”) to elect Vivek K. Sarin as an Independent Trustee of the Board of Trustees of the Trust (the “Board”), by shareholders of the Fund at a Special Meeting of Shareholders to be held on April 30, 2021, at 10:00 a.m. at the offices of Waycross, 4965 U.S. Highway 42, Suite 2900, Louisville, Kentucky 40222.

 

The Fund is sensitive to the health and travel concerns that shareholders may have and the protocols that federal, state, and local governments may impose at the time of the shareholder meeting. Due to the difficulties arising from the coronavirus known as COVID-19, the date, time, location or means of conducting the special meeting may change. In the event of such a change, the Fund will announce promptly alternative arrangements for the special meeting as soon as possible, which may include holding the special meeting by means of remote communication. If there are any such changes to the meeting, the Fund may not deliver additional soliciting materials to shareholders or otherwise amend the Fund’s proxy materials. Instead, the Fund will promptly:

 

(i)announce these changes, if any, by issuing a press release at www.waycrossfunds.com and encourages you to check this website before the special meeting if you plan to attend;
(ii)file the announcement as definitive additional soliciting material with the Securities and Exchange Commission;
(iii)take all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.

 

Anyone who attends the meeting in-person will need to comply with state and local safety guidelines for attending such events (e.g., self-provided mask or face covering, social distancing, etc.).

 

Waycross currently serves as the investment adviser to the Fund under an investment advisory agreement between the Trust, on behalf of the Fund, and Waycross (the “Current Advisory Agreement”). The Current Advisory Agreement terminated because of a change in the control that resulted in the assignment of the Current Advisory Agreement under federal securities laws. The change of control was due to an existing owner of Waycross increasing his ownership percentage from about 24.99% to 50%, as more fully described in the enclosed Proxy Statement. For Waycross to continue to provide investment management services to the Fund, the Board of Trustees of the Trust (the “Board”) voted unanimously to approve the New Advisory Agreement under which Waycross will continue to serve as investment adviser to the Fund. The New Advisory Agreement is identical to the Current Advisory Agreement, including the same fee rates, except for the commencement and renewal dates. To allow Waycross to continue to serve as the investment adviser to the Fund without any interruption, shareholders of the Fund are being asked to approve the New Advisory Agreement.

 

As discussed further in the proxy statement, the Transaction triggered Section 15(f) of the Investment Company Act of 1940 (the “1940 Act”) because Waycross received a benefit from the change of control that led to the assignment of the Current Advisory Agreement. To comply with Section 15(f) and 16(b) of the Investment Company Act of 1940, the Board selected and proposes Vivek K. Sarin as an Independent Trustee of the Trust effective upon the election by a majority of the Fund’s shareholders. Vivek K. Sarin is the Founder and President of Juvo Company, LLC, an international e-commerce, logistics, and procurement firm; previously served as a Secretary and Executive Cabinet Member of the Kentucky Cabinet for Economic Development.

 

 

The Board, including a majority of the independent trustees, voted unanimously to approve the Proposals on behalf of the Fund and recommends that you approve it. The Board believes that the Proposals are in the best interests of the Fund and its shareholders.

 

You may vote before the meeting by mail, online, or telephone, or in person at the meeting. It is very important to receive your vote. The Board encourages you to vote before April 30, 2021, either by mail, online, or telephone. Voting is quick and easy. Everything you need to vote is enclosed. Specific instructions for these voting options can be found on the enclosed Proxy Card.

 

YOUR VOTE IS IMPORTANT. If we do not hear from you after a reasonable period, you may receive a telephone call from a representative of Waycross, any of its affiliates, or our proxy solicitor, Okapi Partners, reminding you to vote your shares.

 

I appreciate your participation and prompt attention to this matter.

 

Sincerely,

 

/s/ Matthew Bevin 
Matthew Bevin 
President 
Waycross Independent Trust 
 

 

IMPORTANT INFORMATION

YOUR VOTE IS IMPORTANT

 

We encourage you to read the full text of the enclosed Proxy Statement. However, we thought it would be helpful to provide brief answers to some questions.

 

Q.What are shareholders being asked to vote on at the upcoming Special Meeting of Shareholders on April 30, 2021 (the “Meeting”)?

 

A.At the Meeting, shareholders of the Waycross Long/Short Equity Fund (the “Fund”), a series of Waycross Independent Trust (the “Trust”), will be voting on a proposal (“Proposal 1”) to approve a new investment advisory agreement (the “New Advisory Agreement”) between the Trust, on behalf of the Fund, and Waycross Partners, LLC (“Waycross”) and a proposal (“Proposal 2” and with Proposal 1, the “Proposals”) to elect Vivek K. Sarin as an Independent Trustee of the Board of Trustees of the Trust (the “Board”).  

 

Q.Why are shareholders being asked to approve the Proposals?

 

A.

Waycross currently serves as the investment adviser to the Fund under an investment advisory agreement between the Trust, on behalf of the Fund, and Waycross (“Current Advisory Agreement”). On January 31, 2021, a member of Waycross increased their ownership interest in Waycross to more than 25% (the “Transaction”). The Transaction has no bearing upon Waycross’ daily operations. Under the Investment Company Act of 1940, as amended (the “1940 Act”), the increased ownership resulted a “change in control” of an investment adviser, which causes any investment advisory agreement between that investment adviser and a registered investment company to automatically terminate. For Waycross to continue to provide investment management services to the Fund, shareholders are required by the 1940 Act to approve the New Advisory Agreement.

 

In addition, to comply with Sections 15(f) and 16(b) of the 1940 Act, the Board must also select and propose a new independent trustee so that at least 75% of the current trustees will be independent and elected by shareholders. Therefore, the Board recommends that shareholders elect Mr. Sarin to serve as an Independent Trustee of the Fund.

 

Q.Has the Board of Trustees of the Trust (the “Board”) approved the Proposals?

 

A.At a meeting of the Board of Trustees of the Trust (the “Board”) held on January 20, 2021, the Board unanimously approved the New Advisory Agreement for the Fund, subject to shareholder approval.  At a meeting of the Board on March 26, 2021, the Board selected and proposed Mr. Sarin to serve as an Independent Trustee of the Board, effective upon shareholder approval.  

 

Q.How does the Board recommend that I vote?

 

A.The Board believes that the Proposals are in the best interests of the Fund and its shareholders and recommends that you vote FOR the Proposals.

 

Q.If the Current Advisory Agreement terminated on January 31, 2021, how is the Fund currently being managed?

 

A.At the meeting of the Board held on January 20, 2021, the Board approved an interim investment advisory agreement (the “Interim Agreement”) with Waycross to take effect on the termination of the Current Advisory Agreement.  Pursuant to the Interim Agreement, Waycross will continue to provide advisory services to the Fund until the earlier of: (i) the date on which the Fund’s shareholders approve the New Advisory Agreement; or (ii) 150 days from the date of termination.  The Interim Agreement is identical in all material respects to the Current Advisory Agreement, except it has a lower management fee for the Waycross Focused Equity Fund (the “Focused Equity Fund”), a separate series of the Trust.  Additionally, the 1940 Act and the Interim Agreement require that all investment advisory fees will be held in escrow pending the approval of the New Advisory Agreement.  Should the shareholders approve the New Advisory Agreement, the escrowed management fees will be paid to Waycross and the Interim Agreement will terminate.

 

 

Q.Why is the Board recommending that shareholders approve the New Advisory Agreement?

 

A.If shareholders of the Fund do not approve the New Advisory Agreement, then Waycross cannot continue to serve as the Fund’s investment adviser after the expiration of the Interim Agreement, and the Board will have to consider other alternatives for the Fund, including again seeking approval by shareholders of the Fund of the New Advisory Agreement, seeking approval of a different advisory agreement, allowing Waycross to manage the Fund at cost for a temporary period, retaining a new investment adviser for the Fund, or the possible liquidation and closing of the Fund.  To avoid interruption to the management and operations of the Fund and to avoid additional costs to the Fund seeking alternatives, the Board is recommending that shareholders of the Fund approve the Proposal such that Waycross can continue to provide investment advisory services to the Fund.   

 

Q.Why am I being asked to vote to elect Trustees?

 

A.In connection with the Transaction, the Board must select and appoint another independent trustee to the Board, to ensure the Board continues to have sufficient independence from Waycross.  The Board selected and appointed Mr. Sarin as an Independent Trustee candidate on March 26, 2021.  The Board believes that it is in the shareholders’ best interest and a good governance practice for a supermajority of the members of the Board to be Independent Trustees.  Accordingly, the Board proposes that shareholders elect Mr. Sarin as an Independent Trustee to the Board.  

 

Q.What happens if the Trustee is not elected by shareholders?

 

A.If Mr. Sarin is not elected at the Meeting, the Board will consider what further action is in the best interests of the Fund and its shareholders, including the resubmission of the Trustee election proposal to shareholders.     

 

Q.How will the approval of the Proposals affect the management and operations of the Fund?

 

A.The Fund’s investment objective and investment strategy will not change because of the New Advisory Agreement.  In addition, the change of control will not result in any personnel change in Waycross’ management and investment teams serving the Fund. The Fund’s investment objective, strategies, risks, and fundamental policies will remain the same. Accordingly, approval of the Proposals is not expected to affect the management or operations of the Fund.

 

 Q.Will the New Advisory Agreement increase the management fee?

 

A.The approval of the New Advisory Agreement will not increase the advisory fee that the Fund pays to Waycross. Currently, the Fund pays Waycross a management fee of 1.25%. The management fee is the same under the New Advisory Agreement.

 

 Q.Will the New Advisory Agreement affect the Existing Expense Limitation Agreement?

 

A.

The expense limitation agreement is a separate contract from the investment advisory agreement. Under the expense limitation agreement in effect at the time of the Transaction (the “Existing ELA”), Waycross had agreed to waive fees or reimburse expenses to keep the Fund’s overall expense limited at 1.75%, excluding dividend expenses on securities sold short. In conjunction with the Transaction, Waycross agreed to lower the overall expense limit of the Fund to 1.70% (the “New ELA”). The New ELA took effect on February 1, 2021 and continues until at least June 30, 2022. If Waycross does not renew the expense limitation agreement, then the Total Annual Fund Operating Expenses paid by shareholders will increase upon the expiration of the current agreement. More information on that agreement is included in the proxy statement.

 

Under the Existing ELA, Waycross may recoup management fee reductions and expense reimbursements for three years after such fees and expenses were incurred, provided that the repayments do not cause Total Annual Fund Operating Expenses (after the repayment is taken into account) to exceed (i) the Fund’s current expense limitation, and (ii) the expense limitation in effect at the time the expenses to be repaid were incurred. The recoverable amounts under the Existing ELA will continue under the New ELA. If shareholders approve the New Advisory Agreement, then Waycross will continue to recoup previously waived fees and reimbursed expenses. If shareholders do not approve the New Advisory Agreement, then the New ELA will terminate at the same time as the Interim Advisory Agreement.

 

 

 Q.How will the approval of the Proposals affect the expenses of the Fund?

 

A.The approval of the New Advisory Agreement will not increase the Fund’s operating expense ratio. Before the Transaction, the Fund’s gross and net expense ratio, including dividend expense on securities sold short (0.95%), was 2.47%. The New Advisory Agreement will not change these ratios.  

 

Q.Who is paying the costs of this proxy solicitation?

 

A.Waycross  is paying the cost of preparing, printing, and mailing the enclosed Proxy Statement and related proxy materials and all other costs incurred in connection with this solicitation of proxies, including any additional solicitation made by mail, telephone, e-mail or in person. The costs associated with the solicitation of proxies are expected to be $17,300.  

 

Q.Are there any material differences between the Current Advisory Agreement and the New Advisory Agreement?

 

A.No.  As it relates to the Fund, the New Advisory Agreement is identical in all material respects to the Current Advisory Agreement except for the commencement and renewal dates.

 

Q.How do I vote?

 

A.

We urge you to vote your shares by submitting your proxy via the internet, phone, or mail as soon as possible. You may also vote in person at the shareholder meeting. Specific instructions for these voting options can be found on the enclosed Proxy Card.

 

To get access to this Proxy Statement online visit at www.okapivote.com/Waycross. You can also get more information about the proxy request or how to vote by calling the fund’s proxy solicitor, Okapi Partners LLC, at 1-888-785-6673.

 

Q.When should I vote?

 

A.Please vote as soon as possible. You may submit your vote at any time before the date of the shareholder meeting. Representatives of Waycross, its affiliates, and Okapi Partners, a firm authorized by the Adviser to assist in the solicitation of proxies, may be contacting you to urge you to vote on these important matters.
  
 Q.If I vote before the meeting, can I change my vote?

 

A.If you vote before the meeting and later decide to change your vote or attend the meeting, you may revoke your proxy and vote your shares again by proxy or in person at the meeting. You may revoke your proxy at any time before the conclusion of the meeting by: (1) submitting a signed proxy bearing a later date, (2) submitting a written notice to the President of the Trust revoking the proxy, or (3) attending and voting in person at the Meeting.

 

Q.What will happen if shareholders do not approve the New Advisory Agreement?

 

A.If the Fund’s shareholders do not approve the New Advisory Agreement, then the Board will consider other options including re-soliciting the shareholders. As described more in the proxy statement, Waycross is serving as the investment adviser to the Fund under an Interim Advisory Agreement for the 150-day period allowed under Rule 15a-4 under the 1940 Act. The period will expire on July 1, 2021. Following that 150-day period, if the Fund’s shareholders have not approved the New Advisory Agreement, Waycross cannot serve as investment adviser to the Fund. In such case, the Board will consider what further actions to take, including liquidating the Fund.

 

 

Waycross Long/Short Equity Fund

 

(the “Fund”)

 

4965 U.S. Highway 42, Suite 2900

Louisville, KY 40222

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

To Be Held on April 30, 2021

Dear Shareholders:

 

The Board of Trustees (the “Board”) of Waycross Independent Trust (the “Trust”) has called a special meeting of the Shareholders of the Waycross Long/Short Equity Fund (the “Fund”), a series of the Trust, to be held at the offices of the Trust, 4965 U.S. Highway 42, Suite 2900, Louisville, Kentucky 40222, on April 30, 2021, at 10:00 a.m., Eastern Time, for the following purposes:

 

 1.

To approve a new investment advisory agreement between the Trust, on behalf of the Fund, and Waycross Partners, LLC, the Fund’s current investment adviser.  No investment advisory fee increase is proposed.

 

 2.

To elect Vivek K. Sarin as an Independent Trustee of the Board.

 

 3.To transact such other business as may properly come before the meeting or any adjournment(s) or postponement(s) thereof.

 

Waycross is soliciting your vote on behalf of the Board and the Fund. The Board has already approved the new investment advisory agreement with Waycross and selected Mr. Sarin as a new Independent Trustee, each subject to shareholder approval. The Board determined that Proposals 1 and 2 are in the best interests of the Fund and its shareholders and recommends that you vote FOR Proposal 1 and Proposal 2. Shareholders of record at the close of business on March 19, 2021, are entitled to notice of, and to vote at, the special meeting and any adjournment(s) or postponement(s) thereof.

 

The Fund is sensitive to the health and travel concerns that shareholders may have and the protocols that federal, state, and local governments may impose at the time of the shareholder meeting. Due to the difficulties arising from the coronavirus known as COVID-19, the date, time, location or means of conducting the special meeting may change. In the event of such a change, the Fund will announce promptly alternative arrangements for the special meeting as soon as possible, which may include holding the special meeting by means of remote communication. If there are any such changes to the meeting, the Fund may not deliver additional soliciting materials to shareholders or otherwise amend the Fund’s proxy materials. Instead, the Fund will promptly:

 

(i)announce these changes, if any, by issuing a press release at www.waycrossfunds.com and encourages you to check this website before the special meeting if you plan to attend;
(ii)file the announcement as definitive additional soliciting material with the Securities and Exchange Commission;
(iii)take all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.

 

Anyone who attends the meeting in-person will need to comply with state and local safety guidelines for attending such events (e.g., self-provided mask or face covering, social distancing, etc.).

 

Anyone who attends the meeting in-person will need to comply with state and local safety guidelines for attending such events (e.g., self-provided mask or face covering, social distancing, etc.).

 

Please read the enclosed Proxy Statement carefully for information concerning the Proposals to be placed before the Meeting or any adjournments or postponements thereof. Additional matters would include only matters that were not anticipated as of the date of the enclosed Proxy Statement. 

 

 

You may vote before the meeting by mail, online, or telephone, or in person at the meeting. It is very important to receive your vote. The Board encourages you to vote before April 30, 2021, either by mail, online, or telephone. Voting is quick and easy. Everything you need to vote is enclosed. Specific instructions for these voting options can be found on the enclosed Proxy Card.

 

On behalf of the Board of Trustees

 

/s/ Matthew Bevin 
Matthew Bevin, President 
April 2, 2021 

 

 

 

Waycross Long/Short Equity Fund

 

(the “Fund”)

 

4965 U.S. Highway 42, Suite 2900

Louisville, KY 40222

 

 

 

PROXY STATEMENT

 

 

 

SPECIAL MEETING OF SHAREHOLDERS

 

To Be Held on April 30, 2021

 

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “Board”) of Waycross Independent Trust (the “Trust”) on behalf of the Waycross Long/Short Equity Fund (the “Fund”) for use at the special meeting of shareholders, to be held at the offices of the Trust, 4965 U.S. Highway 42, Suite 2900, Louisville, Kentucky 40222, on April 30, 2021, at 10:00 a.m., Eastern Time, and at any adjournments thereof. The Notice of the Meeting, Proxy Statement and accompanying form of proxy will first be mailed to shareholders on or about April 5, 2021. Only shareholders of record at the close of business on March 19, 2021 (the “Record Date”), will be entitled to vote at the Meeting.

 

Waycross is soliciting your vote on behalf of the Board and the Fund. The Shareholders of the Fund, as indicated below, are being asked to consider the following proposals:

 

 1.To approve a new investment advisory agreement between the Trust, on behalf of the Fund, and Waycross Partners, LLC, the Fund’s current investment adviser.  No investment advisory fee increase is proposed.
 2.

To elect Vivek K. Sarin as an Independent Trustee of the Board.

 

 3.To transact such other business as may properly come before the meeting or any adjournment(s) or postponement(s) thereof.

 

Shareholders in the Fund will vote separately on Proposal 1 and Proposal 2. Under the Investment Company Act of 1940, as amended (the “1940 Act”), an affirmative vote of the holders of a majority of the outstanding shares of the Fund is required for the approval of each Proposal. As defined in the 1940 Act, a “vote of the holders of a majority of the outstanding voting” shares of the Fund means the vote of: (1) 67% or more of the voting shares of the Fund present at the Meeting, if the holders of more than 50% of the outstanding shares of the Fund are present in person or represented by proxy, or (2) more than 50% of the outstanding voting shares of the Fund, whichever is less. The Board believes the Proposals are in the best interests of the Fund and its shareholders, recommends that you vote FOR Proposal 1 and Proposal 2.

 

You may vote before the meeting by mail, online, or telephone, or in person at the meeting. It is very important to receive your vote. The Board encourages you to vote before April 30, 2021, either by mail, online, or telephone. Voting is quick and easy. Everything you need to vote is enclosed. Specific instructions for these voting options can be found on the enclosed Proxy Card.

 

The Fund is sensitive to the health and travel concerns that shareholders may have and the protocols that federal, state, and local governments may impose at the time of the shareholder meeting. Due to the difficulties arising from the coronavirus known as COVID-19, the date, time, location or means of conducting the special meeting may change. In the event of such a change, the Fund will announce promptly alternative arrangements for the special meeting as soon as possible, which may include holding the special meeting by means of remote communication. If there are any such changes to the meeting, the Fund may not deliver additional soliciting materials to shareholders or otherwise amend the Fund’s proxy materials. Instead, the Fund will promptly:

 1 

 

(i)announce these changes, if any, by issuing a press release at www.waycrossfunds.com and encourages you to check this website before the special meeting if you plan to attend;
(ii)filing the announcement as definitive additional soliciting material with the Securities and Exchange Commission;
(iii)taking all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.

 

Anyone who attends the meeting in-person will need to comply with state and local safety guidelines for attending such events (e.g., self-provided mask or face covering, social distancing, etc.).

 

Important Notice Regarding Internet Availability of Proxy Materials

This Proxy Statement is available at www.okapivote.com/Waycross or by calling the fund’s proxy solicitor, Okapi Partners LLC, at 888-785-6673. The Fund’s annual and semi-annual reports are available, at no charge, by calling 866-267-4304.

 2 

 

PROPOSAL 1: APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST AND WAYCROSS.

 

Summary of the Proposal

 

You are receiving this proxy statement because the current investment advisory agreement between the Trust, on behalf the Fund, and Waycross Partners, LLC (“Waycross” or the “Adviser”), the Fund’s current investment adviser (the “Current Advisory Agreement”), automatically terminated due to the transaction described below. For Waycross to continue to provide investment management services to the Fund, you are being asked to approve a new investment advisory agreement between the Trust and Waycross (the “New Advisory Agreement”). Approval of the New Advisory Agreement will not increase the advisory fees paid by the Fund. As it relates to the Fund, the New Advisory Agreement is identical in all material respects to the Current Advisory Agreement except for the commencement and renewal dates. The effective date of the New Advisory Agreement will be the date that it is approved by shareholders of the Fund.

 

Shareholder approval of the New Advisory Agreement is being requested in connection with a change in the ownership of Waycross. On January 31, 2021, Mr. Matthew G. Bevin, a minority owner of Waycross, increased his ownership interest in Waycross to more than 25% by investing more cash into the business (the “Transaction”). In return for this additional equity investment, Mr. Bevin received additional interests in the Adviser. Mr. Bevin has been a minority owner and Managing Director of the Adviser since its inception. Recently, Mr. Bevin agreed to take a more active role in the Adviser and lead a new growth strategy that includes growing its existing investment products, launching new investment products, and hiring additional key personnel. As a private company, Waycross will not publicly disclose the terms of the Transaction, but it did disclose the terms to the Trust’s Board of Trustees (the “Board”). Before the Transaction, Mr. Benjamin Thomas, portfolio manager of the Fund, owned 75.01% of Waycross. After the Transaction, Messrs. Thomas and Bevin will each own 50% of Waycross.

 

Under the 1940 Act, a party owning, directly or indirectly, more than 25% of the voting securities of an investment company is presumed to control the company, and any transaction that results in a party acquiring more than a 25% interest is presumed a change in control of the investment adviser. The 1940 Act further provides that a transaction that results in a “change in control” of an investment adviser causes any investment advisory agreement between the investment adviser and a registered investment company to automatically terminate. The Board determined that the Transaction resulted in a change of control of Waycross. As a result, the Current Advisory Agreement automatically terminated at the close of business on January 31, 2021. For Waycross to continue to provide investment management services to the Fund, shareholders are required by the 1940 Act to approve the New Advisory Agreement.

 

In anticipation of the Transaction, the Board, including the Trustees who are not “interested persons” as that term is defined in the 1940 Act (“Independent Trustees”), approved the New Advisory Agreement. The Board determined that the New Advisory Agreement was in the best of interest of shareholders because it would allow Waycross to continue providing its services to the Fund with no increase in fees or change in personnel. The Board now recommends that the shareholders of the Fund also approve the New Advisory Agreement. The Board also considered that it would comply with Section 15(f) of the 1940 Act, which is discussed in further detail below, and that no “unfair burden” would be imposed on the Fund because of the Transaction.

 

The Board, including the Independent Trustees, also approved an interim investment advisory agreement between Waycross and the Trust (the “Interim Agreement”) on January 20, 2021, to be effective upon the close of the Transaction. Rule 15a-4 under the 1940 Act permits a fund to enter into an interim advisory agreement with an adviser to manage a fund in the event of a change of control. Under Rule 15a-4, an interim agreement may remain in place for up to 150 days so that a fund may receive investment advisory services without interruption while it solicits shareholder approval of a new investment advisory agreement. The period will expire on July 1, 2021.

 

With respect to the Fund, the Interim Agreement approved by the Board is identical to the New Advisory Agreement, as well as the Current Advisory Agreement, except for differences reflecting the requirements of Rule 15a-4, such as the date of execution, duration of the agreement, termination, and compensation conditions. Therefore, the Interim Agreement can only remain in effect for a period up to 150 days, and

 3 

 

the compensation under the agreement is no greater than the compensation the adviser would have received under the previous contract;
such compensation will be held in an interest-bearing escrow account at the Fund’s custodian or a bank pending shareholder approval of the New Advisory Agreement.

 

If a majority of shareholders approve the New Advisory Agreement, then Waycross will receive the entire amount in the escrow account (including interest earned) and the Interim Agreement will terminate. If a majority of shareholders do not approve the New Advisory Agreement by the end of the 150 days, Waycross will receive for its services during the interim period the lesser of (i) the costs it incurred in performing such services (plus interest earned on that amount) or (ii) the total amount in the escrow account (plus interest earned). . Waycross’ compensation did not change under the Interim Agreement.

 

The Fund’s investment objective and investment strategy will not change because of the New Advisory Agreement. In addition, the change of control will not result in any personnel change in Waycross’ management and investment teams serving the Fund. The Fund’s investment objective, strategies, risks, and fundamental policies will remain the same. Accordingly, the approval of Proposal is not expected to affect the management or operations of the Fund.

 

If the Fund’s shareholders do not approve the New Advisory Agreement, then the Board will consider other options including re-soliciting the shareholders. Under Rule 15a-4, if shareholders do not approve the New Advisory Agreement by July 1, 2021, Waycross cannot serve as investment adviser to the Fund. In such case, the Board will consider what further actions to take, including liquidating the Fund.

 

The Advisory Agreement

 

At a meeting on January 20, 2021, the Board, including the Independent Trustees, unanimously approved the New Advisory Agreement. As it relates to the Fund, the New Advisory Agreement is identical in all material respects to the Current Advisory Agreement except for the commencement and renewal dates.

 

Current Advisory Agreement. Under the terms of the Current Advisory Agreement and the New Advisory Agreement, Waycross is entitled to receive a monthly investment advisory fee computed at the annual rate of 1.25% of the average daily net assets of the Fund. As the investment adviser to the Fund, subject to the Board’s supervision, Waycross continuously reviews, supervises, and administers the Fund’s investment program. Waycross also ensures compliance with the Fund’s investment policies and guidelines. The Board approved the Current Advisory Agreement at its organizational meeting on July 13, 2020, shareholders last approved the Agreement on July 16, 2020. On November 13, 2020, the Fund’s shareholders approved the reorganization of the Fund into the Trust. Before the reorganization, Waycross served as the investment adviser to the Fund, which was a series of Ultimus Managers Trust. During the fiscal year ended February 29, 2020, the Fund paid Waycross aggregate advisory fees of $616,148.

 

The officers of the Fund that are also officers or employees of Waycross include Mr. Bevin, who is the President and Treasurer of the Trust, Mr. Thomas, who is a Vice President of the Trust, and Ms. Emily O’Leary, who is a Vice President of the Trust.

 

New Advisory Agreement. The New Advisory Agreement provides that it will continue in force for an initial period of two years, and yearly thereafter, but only so long as its continuance is approved at least annually by the Board at a meeting called for that purpose or by the vote of a majority of the outstanding shares of the Fund. The New Advisory Agreement will automatically terminate on assignment and is terminable upon notice by the Fund. In addition, the New Advisory Agreement can be terminated by Waycross on not more than 60 days’ notice to the Fund. The Current Advisory Agreement and the New Advisory Agreement may be amended by the parties thereto (which include Waycross and the Trust) provided that the amendment is approved by the vote of a majority of the Board, including a majority of the Independent Trustees, or by the vote of a majority of the outstanding voting securities of the Fund.

 

The New Advisory Agreement provides that Waycross will not be subject to any liability in connection with the performance of its services thereunder in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties.

 4 

 

The effective date of the New Advisory Agreement will be the date shareholders of the Fund approve the New Advisory Agreement. If the New Advisory Agreement is not approved by shareholders, the Board and Waycross will consider other options, including a new or modified request for shareholder approval of a new advisory agreement.

 

The New Advisory Agreement is attached as Appendix A. You should read the New Advisory Agreement. The description in this Proxy Statement of the New Advisory Agreement is only a summary.

 

Expense Limitation Agreement. Under an expense limitation agreement (the “Existing ELA”), Waycross has agreed to reduce the management fee and reimburse Fund expenses to the extent necessary to limit Total Annual Fund Operating Expenses (exclusive of brokerage costs, taxes, interest, borrowing costs such as interest and dividend expenses on securities sold short, costs to organize the Fund, Acquired Fund fees and expenses, and extraordinary expenses such as litigation and merger or reorganization costs and other expenses not incurred in the ordinary course of the Fund’s business) to an amount not exceeding 1.70% of the average daily net assets of the Long/Short Fund. Before June 30, 2022, the Expense Limitation Agreement may be modified or terminated only with the approval of the Board. Waycross may recoup management fee reductions and expense reimbursements for three years after such fees and expenses were incurred, provided that the repayments do not cause Total Annual Fund Operating Expenses (after the repayment is taken into account) to exceed (i) the Fund’s current expense limitation , and (ii) the expense limitation in effect at the time the expenses to be repaid were incurred. From March 1, 2020 through June 30, 2020, the expenses cap was 1.99%. Waycross agreed to lower the expense cap to 1.75% from July 1, 2020, through January 31, 2021. On February 1, 2021, Waycross again agreed to lower the expense cap to its current limit of 1.70% (the “New ELA”). If Waycross does not renew the expense limitation agreement, then the Total Annual Fund Operating Expenses paid by shareholders will increase upon the expiration of the current agreement.

 

Under the Existing ELA, Waycross may recoup management fee reductions and expense reimbursements for three years after such fees and expenses were incurred, provided that the repayments do not cause Total Annual Fund Operating Expenses (after the repayment is taken into account) to exceed (i) the Fund’s current expense limitation, and (ii) the expense limitation in effect at the time the expenses to be repaid were incurred. The recoverable amounts under the Existing ELA will continue under the New ELA. If shareholders approve the New Advisory Agreement, then Waycross will continue to recoup previously waived fees and reimbursed expenses. If shareholders do not approve the New Advisory Agreement, then the New ELA will terminate at the same time as the Interim Advisory Agreement. As of February 28, 2021, Waycross has recouped all prior years’ management fee reductions and expense reimbursements for the Funds.

 

Information Concerning Waycross

 

Waycross is organized as a Kentucky limited liability company and began operations in 2005. Waycross’ principal place of business is 4965 U.S. Highway 42, Suite 2900, Louisville, Kentucky 40222. Waycross is an investment adviser registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. The names, titles, addresses, and principal occupation of the principal executive officers and directors of Waycross are set forth below:

 

Name and Address*:Title and Principal Occupation**:
Benjamin H. ThomasManaging Partner, Chief Investment Officer, and Portfolio Manager
Matthew G. BevinManaging Partner
Emily O’LearyDirector of Operations and Chief Compliance Officer
Christopher GrecoChief Executive Officer

 

*The address for each officer is 4965 U.S. Highway 42, Suite 2900, Louisville, Kentucky 40222.
**Mr. Thomas served as Waycross’ principal executive officer from its inception to December 31, 2020. On January 1, 2021, Mr. Greco became the chief executive officer of Waycross and Mr. Thomas became its Chief Investment Officer.

 

Corporate structure. Immediately before the Transactions, Waycross Holdings, LLC owned 75.01% and Mr. Matthew G. Bevin owned 24.99% of Waycross. After the Transaction closed on January 31, 2021, Waycross Holdings and Integrity Holdings each own 50% of the Adviser and are considered the parent companies of the Adviser. Mr. Thomas is the sole owner of Waycross Holdings. Mr. Bevin is the sole owner of Integrity Holdings.

 5 

 

Material Transactions. Mr. Larry Walker, an interested trustee of the Trust, previously owned about 5% of Waycross. On December 29, 2020, Mr. Walker retired, and Waycross redeemed his interests in the Adviser, paying him about $275,000 for those interests. Mr. Walker will be eligible to become an independent trustee in January 2023.

 

Evaluation by the Board of Trustees

 

At a meeting held on January 20, 2021, the Board approved the Interim Agreement and New Advisory Agreement with respect to the Fund. The Board’s determination to approve the agreements followed its consideration of various factors and review of written materials provided by Waycross. The Board’s deliberations and the information on which its conclusions were based are summarized below.

 

At the Meeting, the Board considered the following material factors when it evaluated the New Advisory Agreement: (i) the nature, extent, and quality of the services provided by the Adviser; (ii) the investment performance of the Fund under the management of the Adviser; (iii) the costs of the services to be provided and profits to be realized by the Adviser from the relationship with the Fund; (iv) the extent to which economies of scale would be realized if the Fund grows and whether advisory fee levels reflect those economies of scale for the benefit of the Fund’s investors; and (v) the Adviser’s practices regarding possible conflicts of interest, including its contemplated brokerage practices, and other benefits derived by the Adviser.

 

In assessing these factors and reaching its decisions, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board meetings by the Adviser, as well as information specifically provided during the approval process, including at the Meeting.  The Board requested and was provided with (or had access to) information and reports relevant to the approval of the New Advisory Agreement, including: (i) information regarding the services and support provided to the Fund and its shareholders by the Adviser; (ii) quarterly assessments of the investment performance of the Fund from the portfolio management team; (iii) periodic commentary on the reasons for the performance; (iv) presentations by the Fund’s management addressing the Adviser’s investment philosophy, investment strategy, personnel, and operations; (v) compliance and audit reports concerning the Fund and the Adviser; (vi) disclosure information contained in the registration statement for the Fund and the Form ADV of the Adviser; and (vii) a memorandum from legal counsel that summarized the fiduciary duties and responsibilities of the Board in reviewing and approving the New Advisory Agreement, including the material factors set forth above and the types of information included in each factor that should be considered by the Board to make an informed decision. 

 

The Board also reviewed various information provided by the Adviser including, without limitation: (i) documents containing financial information about the Adviser, a description of personnel and the services provided to the Fund by the Adviser, information on investment advice, performance, summaries of Fund’s expenses, compliance program, current legal matters, and other general information; (ii) comparative expense and performance information for other mutual funds with strategies similar to the Fund; (iii) the anticipated effect of size on the Fund’s performance and expenses; and (iv) benefits to be realized by the Adviser from its relationship with the Fund.  The Board did not identify any information that was most relevant to its consideration to approve the New Advisory Agreement, and each Trustee may have afforded different weights to the various factors.

 

(1)       The nature, extent, and quality of the services to be provided by the Adviser.

 

The Board considered the Adviser’s responsibilities under the Fund’s Advisory Agreement.  The Board reviewed the services to be provided by the Adviser to the Fund including, without limitation: its processes for formulating investment recommendations and assuring compliance with the Fund’s investment objectives and limitations; its coordination of services for the Fund among the Fund’s service providers; and its efforts to promote the Fund, grow assets and assist in the distribution of the Fund’s shares. The Board considered the Adviser’s staffing, personnel, and methods of operating; the education and experience of its staff; and its compliance program, policies, and procedures. Specifically, the Board noted that the services provided by the Adviser to the Fund under the New Advisory Agreement are expected to be the same as under the Current Advisory Agreement. After reviewing the preceding and further information from the Adviser, the Board concluded that the nature, extent, and quality of the services to be provided by the Adviser was satisfactory and adequate for the Fund.

 6 

 

(2)       The Investment Performance of the Fund and the Adviser

 

The Board noted that the Adviser is currently managing the Fund under an interim investment advisory agreement, which commenced on February 1, 2021.  The Board considered that the Adviser’s Chief Investment Officer and the portfolio manager of the Fund under the interim investment advisory agreement has been a portfolio manager of the Fund since its inception.  The Board compared the short- and long-term performance of the Fund with the performance of its benchmark index, or indices, as applicable, comparable funds with similar objectives and size managed by other investment advisers, and peer group indices (e.g., Morningstar category averages).  The Trustees also considered the consistency of the Adviser’s management of the Fund with its investment objective and policies.

 

The Board noted that the Fund outperformed its peer group returns for the one, three, and five-year periods ended December 31, 2020 and outperformed its Morningstar category (Large Blend) average over the one-year period; the Board further noted that the Fund received a 5-star rating from Morningstar and Lipper on its three-year, five-year, and since inception periods. Finally, the Board considered the Fund’s performance during the most recent market conditions because of COVID-19. Based on the preceding, the Board concluded that the investment performance information presented for the Fund was satisfactory.

 

(3)       The costs of the services provided, and profits realized by the Adviser from the relationship with the Fund.

 

The Board considered: the Adviser’s staffing, personnel and methods of operating; its financial condition and its level of commitment to the Fund; the asset levels of the Fund; and the overall expenses of the Fund.  The Board also considered the financial statements of the Adviser and its financial stability and productivity.  The Board compared the fees and expenses of the Fund (including the management fee) relative to its peer group as of December 31, 2020.  The Board noted that the management fee for the Fund was in line with its peer group and near the higher end of its category, but recognized that the Fund’s asset levels ($69 million) were substantially smaller than those of its peers ($327 million to $2.1 billion) and the category average ($7.9 billion).

 

The Board also noted that the Fund’s net expense ratio was above the peer group average and median; they recognized that the Fund was substantially smaller than most of its peers, which affects its net expense ratio. The Trustees noted that the Adviser has entered into an expense limitation agreement according to which the Adviser has agreed to waive or reduce its fees and to assume other expenses of the Fund, if necessary, to limit its annual operating expenses (with industry-standard exceptions) through June 30, 2022.  Following this analysis and upon further consideration and discussion of the preceding, the Board concluded that the fee to be paid to the Adviser by the Fund was fair and reasonable.

 

(4)       The extent to which economies of scale would be realized if the Fund grows and whether advisory fee levels reflect these economies of scale for the benefit of shareholders.

 

The Board considered the Fund’s proposed fee arrangements with the Adviser.  The Trustees determined that although the management fee would stay the same as asset levels increased, the Fund’s shareholders would benefit from the expense limitation arrangement.  The Board noted that while a breakpoint schedule in an advisory agreement would be beneficial, such a feature only had benefits if the Fund’s assets were enough to realize the effect of the breakpoint.  The Trustees noted that lower expenses for the Fund’s shareholders are realized immediately with the expense limitation arrangements with the Adviser.  The Board also noted that the Fund would benefit from economies of scale under their agreements with some of their service providers other than the Adviser as fees that were in place with those other service providers were either fixed or essentially semi-fixed, and the Board considered the Adviser’s efforts to work with the fund administrator, transfer agent, and distributor to secure such arrangements for the Fund.  Following further discussion of the Fund’s asset levels, expectations for growth, and proposed fees, the Board determined that the Fund’s fee arrangement, in light of all the facts and circumstances, was fair and reasonable and that the expense limitation arrangement provided savings and protection for the benefit of the shareholders.

 7 

 

(5)       Possible conflicts of interest and benefits derived by the Adviser.

 

The Board evaluated the potential for conflicts of interest and considered such matters as: the experience and ability of the advisory and compliance personnel assigned to the Fund; the fact that the Adviser does not utilize soft dollars; the basis of decisions to buy or sell securities for the Fund; and the substance and administration of the Adviser’s code of ethics.  Based on the preceding, the Board determined that the Adviser’s standards and practices relating to the identification and mitigation of possible conflicts of interest were satisfactory. 

 

Section 15(f) of the 1940 Act

 

Section 15(f) provides that, when a change in the control of an investment adviser results in an assignment of the investment advisory agreement, the investment adviser and any of its affiliated persons may receive any amount or benefit in connection therewith if the following two conditions are satisfied:

 

(i)       During the three-year period immediately following the transaction, at least 75% of an investment company’s board of directors must not be “interested persons” of the investment advisor or the predecessor investment advisor within the meaning of the 1940 Act.

 

(ii)       No “unfair burden” may be imposed on the investment company because of the transaction, or any express or implied terms, conditions, or understandings applicable thereto. As defined in the 1940 Act, the term “unfair burden” includes any arrangement during the two-year period after the date on which such transaction occurs whereby the investment advisor (or predecessor or successor advisor) or any interested person of any such advisor 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 bona fide ordinary compensation as principal underwriter of the investment company).

 

To address the first condition, as stated in Proposal 2 below, the Board has selected and proposed Vivek K. Sarin to serve as a third independent trustee. At the time of the Transaction, the Board consisted of three trustees, including two independent trustees. The Board expects that it will maintain this composition for at least three years from the date of the shareholder meeting. If shareholders elect Mr. Sarin as an Independent Trustee, the Board’s composition will satisfy the first condition.

 

Regarding the second condition, Waycross and the Board are not aware of any circumstances relating to the Transaction that might result in the imposition of such an “unfair burden” on the Fund. The Board will use best efforts to continue satisfying the second condition and anticipates that it can comply with both conditions under Section 15(f).

 

PROPOSAL 2: ELECTION OF INDEPENDENT TRUSTEE OF THE TRUST.

 

Summary of the Proposal

 

The purpose of this proposal is to elect one Independent Trustee to the Board. The current independent trustees have selected and proposed that Vivek K. Sarin serve as an Independent Trustee and recommend that the persons named as proxies elect him unless such authority has been withheld. If shareholders elect the nominee, the nominee’s term of office will be until his death, resignation, retirement, or removal. If the nominee should be unavailable for election at the time of the Meeting (which is not presently anticipated), the persons named as proxies will vote for such other persons as the Board may recommend. The required vote is discussed below in “Voting Securities and Voting.” The nominee is not an “interested person” of the Trust, as defined in the 1940 Act. Shareholders are being asked to elect the nominee so that the Trust can comply with the conditions under Section 15(f).

 

Information about the Nominee for Independent Trustee

 

Set forth below is the name of the nominee together with certain information about him. The address of the nominee is c/o Waycross Independent Trust, 4965 U.S. Highway 42, Suite 2900, Louisville, KY 40222.

 8 

 

Name and Year of BirthLength of Time ServedPosition(s) Held with TrustPrincipal Occupation(s) During Past 5 YearsNumber of Funds in the Trust overseen by TrusteeDirectorships of Public Companies Held by Trustee During Past 5 Years

Vivek K. Sarin

 

Year of Birth: 1967

Since March 2021TrusteePresident, Juvo Company, LLC (2013 – present); Interim Secretary & Executive Cabinet Member, Kentucky Cabinet for Economic Development (2017 to 2019); Chief Executive Officer, Shelby Industries, LLC (1992 to 2016); Board member, University of Louisville Industrial Board of Advisors and Board of Overseers (2013 to 2016).2None

 

Qualifications of the Nominee

 

Mr. Sarin is a business leader with 30 years of international business experience in manufacturing, supply chain development, logistics, product development and sales. He recently served in the public sector as a member of the Kentucky Cabinet for Economic Development to achieve all-time records in every area of economic development, employment, exports, and revenue. Mr. Sarin received his Bachelor of Science from Indiana University – Kelley School of Business, his Masters in Business Administration from Miami University, and a certification in Executive Leadership from Northwestern University - Kellogg School of Management.  

 

 

Nominee’s Ownership of Fund Shares. The following table shows the Nominee’s beneficial ownership of shares of the Funds and, on an aggregate basis, of shares of all funds within the Trust. Information is provided as of December 31, 2020.

 

Name of NomineeDollar Range of Shares of each Fund Owned by Trustee

Aggregate Dollar Range of Shares Owned

of All Funds in Trust Overseen by Trustee

Vivek K. Sarin

Long/Short Fund – None

Focused Fund – None

None

 

Leadership Structure of the Board

 

The Board is responsible for the oversight of the Trust, its Funds, and their service providers. The Board is responsible for overseeing the investment adviser and the Trust’s other service providers in the operations of the Trust in accordance with the 1940 Act, other applicable federal and state laws, and the Declaration of Trust.

 

The Board met three times throughout the last fiscal year. Board meetings are usually in person (although meetings may be held virtually or telephonically as permitted by the 1940 Act). In addition, the Trustees may meet in person or by telephone at special meetings or on an informal basis at other times. The Independent Trustees also meet at least quarterly without the presence of any representatives of management.

 

Board Leadership. The Board is led by its Chairman, Mr. William Chandler, who is also an Independent Trustee. The Chairman generally presides at all Board Meetings, facilitates communication and coordination between the Trustees and management, and reviews meeting agendas for the Board and the information provided by management to the Trustees. The Chairman works closely with Trust counsel and counsel to the Independent Trustees and is also assisted by the Trust’s President, who, with the assistance of the Trust’s other officers, oversees the daily operations of the Fund, including monitoring the activities of all the Fund’s service providers.

 9 

 

The Board believes that its leadership structure, including having an Independent Trustee serve as Chairman and three of four Trustees as Independent Trustees, is appropriate and in the best interests of the Trust. The Board also believes its leadership structure facilitates the orderly and efficient flow of information to the Independent Trustees from Trust management.

 

Board Committees. The Board has established the following standing committees:

 

Audit Committee. All the Independent Trustees are members of the Audit Committee. The Audit Committee oversees the Fund’s accounting and financial reporting policies and practices, reviews the results of the annual audits of the Funds’ financial statements, and interacts with the Funds’ independent registered public accountants on behalf of all the Trustees. The Audit Committee also serves as the Trust’s qualified legal compliance committee. The Audit Committee operates pursuant to an Audit Committee Charter and meets periodically as necessary. Mr. Chilton is the Chairperson of the Audit Committee and presides at its meetings. During the last fiscal year, the Audit Committee met twice.

 

Nominating Committee (the “Nominating Committee”): The Nominating Committee nominates and selects persons to serve as members of the Board, including Independent Trustees and “interested” Trustees. In selecting and nominating persons to serve as Independent Trustees, the Nominating Committee will not consider nominees recommended by shareholders of the Trust unless required by law. All the Independent Trustees are the members of the Nominating Committee. Mr. Chandler is the Chairperson of the Nominating Committee and presides at its meetings.

 

Management of the Trust

 

Overall responsibility for management and supervision of the Fund and the Trust rests with the Board. The Trustees are elected by the Trust’s shareholders or existing members of the Board as permitted under the 1940 Act and the Trust’s Agreement and Declaration of Trust. Each Trustee serves for a term of indefinite duration until death, resignation, retirement, or removal from office. The Trustees, in turn, elect the officers of the Trust to actively supervise the Trust’s day-to-day operations. The officers are elected at least annually. Certain officers of the Trust also may serve as Trustees.

 

The Trust will be managed by the Board in accordance with the laws of the State of Delaware. There are currently three Trustees, two of whom are not “interested persons,” as defined by the 1940 Act, of the Trust (the “Independent Trustees”). The Independent Trustees receive compensation for their services as Trustees and attendance at meetings of the Board. Officers of the Trust receive no compensation from the Trust for performing the duties of their offices.

 

Following are the Trustees and executive officers of the Trust, their year of birth and address, their present position with the Trust, length of time served in their position, and their principal occupation(s) during the past five years, and any other directorships held by the Trustee. Those Trustees who are “interested persons” as defined in the 1940 Act and those Trustees who are Independent Trustees are identified in the table. 

 10 

 

Name and Year of Birth

Length of

Time

Served

Position(s) Held

with Trust

Principal Occupation(s)

During Past 5 Years

Number of

Funds in

the Trust overseen

by Trustee

Directorships

of Public

Companies

Held by

Trustee

During Past 5

Years

Interested Trustees:    

Larry J. Walker*

 

Year of Birth: 1950

Since InceptionTrusteeRetired. Partner, Waycross Partners, LLC since 2008.2None
Independent Trustees:    

William Chandler

 

Year of Birth: 1942

Since InceptionTrustee and ChairmanRetired.2None

John Chilton

 

Year of Birth: 1949

Since InceptionTrusteeManager, Kentucky Power Trading LLC (electricity trading firm) (2017-present); State Budget Director, Commonwealth of Kentucky (2015 – 2019); Partner, MeriTrust Holdings LLC (2012-2016)2Kentucky Retirement Systems, Public Pension Oversight Board (2016 – present); The University of Louisville, The University of Louisville Foundation, University of Louisville Research (2019 – present).

 

*Mr. Walker is considered an “interested person” of the Trust within the meaning of Section 2(a)(19) of the 1940 Act because he is an owner of the Adviser.

 

Name and Year of Birth

Length of

Time Served

Position(s) Held

with Trust

Principal Occupation(s) During Past 5 Years
Executive Officers:

Matthew G. Bevin

 

Year of Birth: 1967

Since March 2021President and TreasurerManaging Partner, Waycross Partners, LLC, 2020 to present; Governor of the Commonwealth of Kentucky, 2015 to 2019.

Benjamin H. Thomas

 

Year of Birth: 1974

Since Inception

Vice President (March 2021 to present)

 

President and Treasurer (2020-2021)

Managing Partner and Portfolio Manager, Waycross Partners, LLC, 2005 to present.

Emily O’Leary

 

Year of Birth: 1990

 

Since InceptionVice PresidentDirector of Operations (2020 to present), Operations Manager (2018 to 2020), Waycross Partners, LLC; Business Development Specialist (2017 to 2018), Marketing and Business Development Specialist (2016 to 2017), Bingham Greenebaum Doll, LLP; Client Advisory Team Analyst, Massey Quick & Co., LLC, 2014 to 2016.

 11 

 

Benjamin Mollozzi

 

Year of Birth: 1984

 

Since InceptionSecretaryAttorney, Ultimus Fund Solutions, LLC and Ultimus Fund Distributors, LLC, 2015 to present.

Charles Black

 

Year of Birth: 1979

 

Since InceptionChief Compliance OfficerDirector of Compliance Services, Joot, 2019 to present; Senior Compliance Officer, Ultimus Fund Solutions, LLC, 2015 to 2019; Chief Compliance Officer, Ultimus Managers Trust, 2016 to 2019; Assistant Chief Compliance Officer, Ultimus Managers Trust, 2015 to 2016.

Stephen L. Preston

 

Year of Birth: 1966

Since InceptionAssistant Vice President and AML Compliance OfficerChief Compliance Officer, AML Compliance Officer, Ultimus Fund Distributors, LLC, 2011 to present.

Theresa Bridge

 

Year of Birth: 1969

Since InceptionAssistant TreasurerSenior Vice President, Financial Administration, Ultimus Fund Solutions, LLC , 2000 to present.

Courtney Moore

 

Year of Birth: 1988

Since InceptionAssistant SecretaryAssociate Paralegal, Ultimus Fund Solutions, LLC, 2015 to present.

 

Qualifications of the Trustees. The Committee reviews the experience, qualifications, attributes, and skills of potential candidates for nomination or election by the Board. In evaluating a candidate for nomination or election as a Trustee, the Committee considers the contribution that the candidate would be expected to make to the diverse mix of experience, qualifications, attributes and skills that the Committee believes contribute to the oversight of the Trust’s affairs. The Board has concluded, based on each Trustee’s experience, qualifications, attributes, or skills on both an individual basis and in combination with the other Trustees, that each Trustee is qualified to serve on the Board. The Board believes that the Trustees’ ability to review critically, evaluate, question, and discuss information provided to them, to interact effectively with the Adviser, other service providers, legal counsel and the independent registered public accounting firm, and to exercise effective business judgment in the performance of their duties as Trustees support this conclusion. In determining that a particular Trustee is and will continue to be qualified to serve as a Trustee, the Board considers a variety of criteria, none of which, in isolation, is controlling.

 

In addition to the Trustee qualifications listed above, each of the Trustees has additional Trustee qualifications including, among other things, the experience identified in the “Trustees and Executive Officers” table and as follows:

 

Interested Trustee

 

Larry Walker has more than 38 years of investment experience. Prior to joining Waycross as a Partner and Strategist, Mr. Walker was a principal and portfolio manager at Invesco. From 1976 to 1992 he was a principal and investment consultant at Mercer Investment Consulting. Mr. Walker is a Chartered Financial Analyst charterholder. He holds a bachelors degree from Purdue University and a MBA from the University of Louisville.

 

Independent Trustees

 

William Chandler has more than 40 years of experience as a professional investment adviser and is a Chartered Financial Analyst charterholder. From 1979 through 2001, Mr. Chandler was a Principal and Founder of a registered institutional investment adviser which was acquired by Invesco in 2001. Mr. Chandler retired from Invesco in 2007 and has remained active as an investment consultant and volunteer investment adviser for various religious organizations.

 12 

 

John Chilton has more than 40 years of experience as a Certified Public Accountant (CPA) serving large and small private businesses. He is co-founder of Mountjoy Chilton Medley LLP, a regional accounting firm with nearly 300 professionals in Louisville, Lexington, Cincinnati, Indianapolis, and Jeffersonville, Indiana.  Mr. Chilton graduated from the University of Tennessee with a Bachelor of Science degree in Accounting with a concentration in Management Science. His credentials include Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), and Certified Valuation Analyst (CVA).

 

References above to the qualifications, attributes and skills of Trustees are pursuant to requirements of the SEC, do not constitute holding out the Board or any Trustee as having any special expertise or experience, and shall not impose any greater responsibility on any such person or on the Board by reason thereof.

 

Risk Oversight. The operation of a mutual fund, including its investment activities, generally involves a variety of risks. As part of its oversight of the Funds, the Board oversees risk through various regular board and committee activities. The Board, directly or through its Committee, reviews reports from, among others, the Adviser, the Trust’s CCO, the Trust’s independent registered public accounting firm, and outside legal counsel, regarding risks faced by the Funds and the risk management programs of the Adviser, with respect to the Funds’ investments and trading activities, and certain service providers. The actual day-to-day risk management with respect to the Funds resides with the Adviser, with respect to the Funds’ investment and trading activities, and other service providers to the Funds. Although the risk management policies of the Adviser and the service providers are designed to be effective, there is no guarantee that they will anticipate or mitigate all risks. Not all risks that may affect the Funds can be identified, eliminated or mitigated and some risks simply may not be anticipated or may be beyond the control of the Board or the Adviser or other service providers. The Independent Trustees meet separately with the Trust’s CCO at least annually, outside the presence of management, to discuss issues related to compliance. Furthermore, the Board receives an annual written report from the Trust’s CCO regarding the operation of the compliance policies and procedures of the Trust and its primary service providers. As part of its oversight function, the Board also may hold special meetings or communicate directly with Trust management or the Trust’s CCO to address matters arising between regular meetings.

 

The Board also receives quarterly reports from the Adviser on the investments and securities trading of the Funds, including the Funds’ investment performance, as well as reports regarding the valuation of the Funds’ securities. The Board also receives quarterly reports from the Administrator, transfer agent (the “Transfer Agent”), and the Distributor on regular quarterly items and, where appropriate and as needed, on specific issues. In addition, in its annual review of the Funds’ investment advisory agreement (the “Advisory Agreement”), the Board will review information provided by the Adviser relating to its operational capabilities, financial condition and resources. The Board also conducts an annual self-evaluation that includes a review of its effectiveness in overseeing, among other things, the number of funds in the Trust and the effectiveness of the Board’s committee structure.

 

Trustees’ Ownership of Fund Shares. The following table shows each Trustee’s beneficial ownership of shares of the Funds and, on an aggregate basis, of shares of all funds within the Trust overseen by the Trustee. Information is provided as of December 31, 2020.

 

Name of TrusteeDollar Range of Shares of each Fund Owned by Trustee

Aggregate Dollar Range of Shares Owned

of All Funds in Trust Overseen by Trustee

Interested Trustee
Larry J. Walker

Long/Short Fund – Over $100,000

Focused Fund – None

Over $100,000
Independent Trustees
William Chandler

Long/Short Fund – None

Focused Fund – None

None
John Chilton

Long/Short Fund – $1 - $10,000

Focused Fund – None

$1 - $10,000

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Ownership in Fund Affiliates. As of December 31, 2020, none of the Independent Trustees, nor members of their immediate families, owned, beneficially or of record, securities of the Adviser, the Distributor or any affiliate of the Adviser or the Distributor.

 

Trustee Compensation

 

No director, officer or employee of the Adviser or the Distributor receives any compensation from the Trust for serving as an officer or Trustee of the Trust. Each Independent Trustee receives $1,000 per meeting of the Board attended, payable in either cash or shares of the Funds. The Trust reimburses each Trustee and officer for his or her travel and other expenses incurred by attending meetings. Trustee compensation for the Funds’ fiscal year ending February 28, 2021 is as follows:

 

Name of Trustee

Aggregate

Compensation

from the Fund

Pension or

Retirement Benefits

Accrued as Part of

Fund Expenses

Estimated Annual
Benefits Upon
Retirement

Total

Compensation

from All Funds

Within the Trust

Interested Trustee
Larry J. WalkerNoneNoneNoneNone
Independent Trustees
William Chandler$3,000NoneNone$3,000
John Chilton$3,000NoneNone$3,000

 

THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE “FOR” THE NOMINEE LISTED UNDER PROPOSAL 2.

 

PROPOSAL 3: TO TRANSACT ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF IN THE DISCRETION OF THE PROXIES OR THEIR SUBSTITUTES

 

The proxy holders have no present intention of bringing any other matter before the Meeting other than the matters described herein or matters in connection with or to effect the same.  Neither the proxy holders nor the Board is aware of any matters which may be presented by others.  If any other business properly comes before the meeting, the proxy holders intend to vote thereon per their best judgment.

 

THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES,

UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE FUND

VOTE “FOR” PROPOSALS 1 and 2.

 

OPERATION OF THE FUND

 

The Fund is a diversified series of Waycross Independent Trust, an open-end management investment company organized as a Delaware statutory trust on May 28, 2020. The Board supervises the business activities of the Fund and the other series of the Trust. Like other mutual funds, the Trust retains various organizations to perform specialized services. As described above, the Trust currently retains Waycross Partners, LLC as investment adviser to the Fund. Ultimus Fund Solutions, LLC, located at 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, serves as the Fund’s administrator, transfer agent, and accounting agent. U.S. Bank, N.A., located at 425 Walnut Street, Cincinnati, Ohio 45202, serves as the custodian of the Fund’s assets. Ultimus Fund Distributors, LLC, located at 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, serves as the principal underwriter and national distributor for the shares of the Fund. No changes are being made to the service providers because of this Meeting.

 

THE PROXY

 

Waycross is soliciting your vote on behalf of the Board and the Fund, so that each shareholder can vote on the proposals to be considered at the Meeting. A proxy for voting your shares at the Meeting is enclosed. The shares represented by each valid proxy received in time will be voted at the Meeting as specified. If no specification is made, the shares represented by a duly executed proxy for the Fund will be voted for approval of the proposals. If no specification is made, the shares represented by a duly executed proxy will be voted at the discretion of the holders of the proxy on any other matter that may come before the Meeting. You may revoke your proxy at any time before it is exercised by: (1) submitting a duly executed proxy bearing a later date, (2) submitting a written notice to the President of the Trust revoking the proxy, or (3) attending and voting in person at the Meeting.

 14 

 

VOTING SECURITIES AND VOTING

 

As of the Record Date, 6,036,568.56 shares of beneficial interest of the Fund were issued and outstanding.

 

Shareholders of record of the Fund on the Record Date are entitled to vote at the Meeting. Each shareholder of the Fund is entitled to one vote per share held, and fractional votes for fractional shares held, on any matter concerning the Fund submitted to a vote at the Meeting.

 

As provided in the Trust’s Declaration of Trust, one-third of the outstanding shares of the Fund entitled to vote, present in person, or represented by proxy, shall constitute a quorum for the transaction of business at the Meeting. An affirmative vote of the holders of a majority of the outstanding shares of the Fund is required for the approval of both proposals under this proxy statement. The 1940 Act defines “the majority of the outstanding voting share” to mean the vote (i) of 67% or more of the voting securities (i.e., shares) present at the Meeting if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy; or (ii) of more than 50% of the outstanding voting securities of the Fund, whichever is less.

 

Shareholders in the Fund will vote separately on the Proposals. Proposal 1 is contingent on the approval of Proposal 2, if the shareholders approve Proposals 1 and 2, the New Advisory Agreement will be effective as of the date of the Meeting or any adjournment thereof. If shareholders of the Fund fail to approve the Proposal 1, the Board will consider additional options as it relates to the Fund.

 

Proposal 2 is contingent on the approval of Proposal 1 by shareholders of the Fund. If shareholders approve Proposal 1 and 2, Mr. Sarin will become an Independent Trustee as of the date of the Meeting or any adjournment. If shareholders of the Fund approve Proposal 1 but not Proposal 2, the Board will consider additional options, including the re-solicitation of shareholders.

 

Abstentions will be treated as votes present at the meeting for purposes of quorum, but will not be treated as votes cast. Therefore, abstentions and broker non-votes will have the same effect as a vote “against” the Proposal.

 

Under the Trust’s bylaws, any shareholders’ meeting, whether a quorum is present, may be adjourned by the vote of the majority of the shares represented at that meeting, either in person or by proxy. When any shareholders’ meeting is adjourned to another time or place, notice need not be given of the adjourned meeting at which the adjournment is taken, unless a new record date of the adjourned meeting is fixed or unless the adjournment is for more than 60 days from the date set for the original meeting, in which case the Board shall set a new record date. Notice of any such adjourned meeting shall be given to each shareholder of record entitled to vote at the adjourned meeting. At any adjourned meeting, the Trust may transact any business which might have been transacted at the original meeting.

 

SECURITY OWNERSHIP OF MANAGEMENT

 

As of the Record Date, the trustees and officers of the Trust beneficially owned, as a group, less than 1% of the outstanding shares of the Fund.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

 

As of the Record Date, the following shareholders were the record owners of 5% or more of the outstanding shares of the Fund:

 15 

 


Names and Addresses
Percent of Waycross Long/Short Equity Fund

National Financial Services, LLC

499 Washington Blvd.

Jersey City, NJ 07310

94.54%

 

As of the Record Date, the Trust knows of no other person (including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) who beneficially owns more than 5% of the outstanding shares of the Fund.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES

 

The Board has adopted procedures for shareholders to send written communications to the Board as a group. Such communications must be clearly addressed either to the Board of Trustees or any or all the Independent Trustees, and sent to either of the following, at the election of the shareholder, who will forward any communications so received:

 

Benjamin Mollozzi William Chandler
Secretary Chairman of the Nominating and Corporate Governance Committee
Waycross Independent Trust Waycross Independent Trust
225 Pictoria Dr., Suite 450 4965 U.S. Highway 42, Suite 2900
Cincinnati, Ohio 45246 Louisville, KY 40222

 

SHAREHOLDER PROPOSALS

 

The Trust must receive any shareholder proposals to be included in the proxy statement for the next meeting of shareholders within a reasonable period before the Trust begins to print and send its proxy materials.

 

COST OF SOLICITATION

 

Waycross is bearing the costs of solicitation of proxies and expenses incurred in connection with the preparation of proxy materials. In addition to soliciting proxies by mail, the Board and employees of the Trust may solicit proxies in person or by telephone. The costs associated with the solicitation of proxies are expected to be $17,300. By voting immediately, you can help avoid the additional expense and burden of a second proxy solicitation.

 

Only one copy of this Proxy Statement may be mailed to a shareholder holding shares in multiple accounts with the Fund. Unless the Trust has received contrary instructions, only one copy of this Proxy Statement will be mailed to a given address where two or more shareholders share that address. Additional copies of the Proxy Statement will be delivered promptly upon request. Requests may be sent to Ultimus Fund Solutions, LLC, PO Box 46707, Cincinnati, Ohio 45246-0707, or made by telephone by calling 866-267-4304.

 

OTHER MATTERS

 

The Board is not aware of any other matters to be presented at the Meeting other than as set forth above. If any other matters properly come before the Meeting that the Trust did not have notice of a reasonable time before the mailing of this Proxy Statement, the persons named as proxies will vote the shares represented by the proxy on such matters per their best judgment, and discretionary authority to do so is included in the proxy.

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder

 

Meeting to Be Held on April 30, 2021: The notice of meeting, proxy statement and shareholder ballot is available at www.okapivote.com/Waycross.

 

PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE. YOU MAY ALSO VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED VOTING INSTRUCTION CARD. FOR MORE INFORMATION OR ASSISTANCE WITH VOTING, PLEASE CALL 888-785-6673. REPRESENTATIVES ARE AVAILABLE TO ANSWER YOUR CALL 9:00 A.M. TO 10:00 P.M. EASTERN TIME. 

 16 

 

EXHIBIT A

 

INVESTMENT ADVISORY AGREEMENT

 

This Investment Advisory Agreement (the “Agreement”) is made and entered into effective as of April __, 2021, by and between WAYCROSS INDEPENDENT TRUST, a Delaware statutory trust (the “Trust”) on behalf of each series of the Trust set forth on Schedule A attached hereto (individually the “Fund” and collectively the “Funds”), a series of shares of the Trust, and WAYCROSS PARTNERS, LLC, a Kentucky limited liability company (the “Adviser”).

 

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and offers for sale distinct series of shares of beneficial interest, each corresponding to a distinct portfolio, including, the Fund; and

 

WHEREAS, the Trust desires to avail itself of the services, information, advice, assistance and facilities of an investment adviser on behalf of the Fund, and to have that investment adviser provide or perform for the Fund various research, statistical and investment services; and

 

WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”), and engages in the business of asset management and is willing to furnish such services to the Fund on the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, it is agreed between the parties as follows:

 

a.          Employment of the Adviser. The Trust hereby employs the Adviser to invest and reinvest the assets of the Fund in the manner set forth in Section 2 of this Agreement subject to the direction of the Board of Trustees (“Trustees”) and the officers of the Trust under the terms of this Agreement. The Adviser hereby accepts such employment and agrees to render the services and to assume the obligations outlined below. The Adviser is deemed to be an independent contractor and shall, except as expressly provided or authorized by the Board, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust.

 

2.          Obligations of Investment Adviser

 

(a)         Services. The Adviser agrees to perform the following services (the “Services”) for the Trust:

 

1.manage the investment and reinvestment of the assets of the Fund;

 

2.continuously review, supervise, and administer the investment program of the Fund;

 

3.determine, in its discretion, the securities to be purchased, retained or sold (and implement those decisions) with respect to the Fund;

 

4.provide the Trust and the Fund with records concerning the Adviser’s activities under this Agreement which the Trust and the Fund are required to maintain;

 

5.render regular reports to the Trust’s Trustees and officers concerning the Adviser’s discharge of the foregoing responsibilities; and

 

6.perform such other services as agreed to by the Adviser and the Trust.

 

The Adviser shall discharge the Services under the oversight of the Trustees and officers of the Trust and in compliance with (i) such policies as the Trustees may establish; (ii) the Fund’s objectives, policies, and limitations as set forth in its prospectus (“Prospectus”) and statement of additional information (“Statement of Additional Information”), each as amended and (iii) with all applicable laws and regulations. The Adviser may furnish any Services through its affiliates, directors, officers, employees or such other parties as the Adviser may engage pursuant to its authority and fiduciary duty

 A-1 

 

(b)       Expenses and Personnel. The Adviser agrees, at its own expense or at the expense of one or more of its affiliates, to render the Services and to provide the office space, furnishings, equipment and personnel as may be reasonably required in the judgment of the Trustees and officers of the Trust to perform the Services on the terms and for the compensation provided herein. The Adviser shall authorize and permit any of its affiliates, officers, directors and employees, who may be elected as Trustees or officers of the Trust, to serve in the capacities in which they are elected. Except to the extent expressly assumed by the Adviser herein and except to the extent required by law to be paid by the Adviser, the Trust shall pay all costs and expenses in connection with its operation.

 

(c)       Books and Records. All books and records prepared and maintained by the Adviser for the Trust under this Agreement shall be the property of the Trust and, upon request therefor, the Adviser shall surrender to the Trust any requested books and records.

 

3.          Fund Transactions. The Adviser is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for each series in the Trust that is managed by the Adviser. Consistent with its fiduciary duty, the Adviser shall seek to obtain the best overall execution for Fund transactions, which is a combination of price, quality of execution and other factors. The Adviser may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who provide the Adviser with brokerage, research, analysis, advice and similar services, and the Adviser may pay to these brokers and dealers, in return for such services, a higher commission or spread than may be charged by other brokers and dealers, provided that the Adviser determines in good faith that such commission is reasonable in terms either of that particular transaction or of the overall responsibility of the Adviser to the Fund and its other clients and that the total commission paid by the Fund will be reasonable in relation to the benefits to the Fund and its other clients over the long-term. The Adviser will promptly communicate to the Trustees and the officers of the Trust such information relating to portfolio transactions as they may reasonably request.

 

4.          Compensation of the Adviser. As compensation for the services that the Adviser is to provide or cause to be provided pursuant to this Agreement, the Fund shall pay to the Adviser an annual fee, computed and accrued daily and paid in arrears monthly, at the rate set forth on Schedule A, which shall be a percentage of the average daily net assets of the Fund (computed in the manner set forth in the Fund’s most recent Prospectus and Statement of Additional Information) determined as of the close of business on each business day throughout the month. If the Adviser shall so request in writing, with the approval of the Trustees, some or all of such fee shall be paid directly to a sub-adviser. The fee for any partial month under this Agreement shall be calculated on a proportionate basis.

 

5.          Status of Investment Adviser. The services of the Adviser to the Trust and the Fund are not to be deemed exclusive, and the Adviser shall be free to render similar services to others so long as its Services to the Trust are not impaired thereby. The Adviser shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust or the Fund in any way or otherwise be deemed an agent of the Trust or the Fund. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Adviser, who may also be a trustee, officer or employee of the Trust, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.

 

6.          Permissible Interests. Trustees, agents, and stockholders of the Trust are or may be, interested in the Adviser (or any successor thereof) as directors, partners, officers, or stockholders, or otherwise; and directors, partners, officers, agents, and stockholders of the Adviser are or may be interested in the Trust as Trustees, stockholders or otherwise; and the Adviser (or any successor) is or may be interested in the Trust as a stockholder or otherwise.

 

7.          Limits of Liability; Indemnification.

 

(a)       The Adviser assumes no responsibility under this Agreement other than to render the Services. The Adviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Fund 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 the 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, gross negligence, or reckless disregard on its part in the performance of its obligations and duties under this Agreement.

 A-2 

 

(b)       The parties agree that the Adviser shall have 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 (“1933 Act”), except for information supplied by the Adviser for inclusion therein.

 

(c)       The Trust agrees to indemnify the Adviser to the full extent permitted by the Trust’s Declaration of Trust.

 

(d)       Notice is hereby given that this instrument is executed on behalf of the Trustees and not individually and that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the Trust (or if the matter relates only to a particular Fund, that Fund), and the Adviser shall look only to the assets of the Trust, or the particular Fund, for the satisfaction of such obligations or any liability arising in connection therewith, and no other series of the Trust shall incur any liability or obligation in connection therewith.

 

(e)       The terms of this section shall survive the termination of this Agreement.

 

8.          Term. This Agreement shall remain in effect for an initial term of two years from the date hereof, and annually thereafter provided such continuance is approved 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:

 

(a)        the Trust may, at any time and without the payment of any penalty, terminate this Agreement upon 60 days written notice of a decision to terminate this Agreement by (i) the Trustees; or (ii) the vote of a majority of the outstanding voting securities of the Fund;

 

(b)        the Agreement shall immediately terminate in the event of its assignment (within the meaning of the Act and the Rules thereunder); and

 

(c)       the Adviser may, at any time and without the payment of any penalty, terminate this Agreement upon 60 days written notice to the Trust and the Fund.

 

9.          Amendments. The parties may amend this this Agreement only by an instrument in writing signed by each party, and, if required by the 1940 Act or other applicable law, approved by vote of the holders of a majority of the Fund’s outstanding voting securities.

 

10.       Applicable Law. This Agreement shall be construed in accordance with, and governed by, the substantive laws of the State of Delaware without regard to the principles of the conflict of laws or the choice of laws.

 

11.       Representations and Warranties.

 

(a)       Representations and Warranties of the Adviser. The Adviser represents and warrants to the Trust as follows: (i) the Adviser is a corporation duly organized, validly existing, and in good standing under the laws of the Commonwealth of Kentucky and is fully authorized to enter into this Agreement and carry out its duties and obligations hereunder; and (ii) the Adviser is registered as an investment adviser with the Securities and Exchange Commission (“SEC”) under the Advisers Act, and shall maintain such registration in effect at all times during the term of this Agreement.

 

(b)       Representations and Warranties of the Trust. The Trust represents and warrants to the Adviser as follows: (i) the Trust has been duly organized as a business trust under the laws of the State of Delaware and is authorized to enter into this Agreement and carry out its terms; (ii) the Trust is registered as an investment company with the SEC under the Act; (iii) shares of the Fund are registered for offer and sale to the public under the 1933 Act; and (iv) such registrations will be kept in effect during the term of this Agreement.

 A-3 

 

12.       Structure of Agreement. The Trust is entering into this Agreement solely on behalf of the Funds listed in Schedule A, individually and not jointly. Notwithstanding any to the contrary in this Agreement, no breach of any term of this Agreement shall create a right or obligation with respect to any series of the Trust other than the Fund; (b) under no circumstances shall the Adviser have the right to set off claims relating to the Fund by applying property of any other series of the Trust; and (c) the business and contractual relationships created by this Agreement, consideration for entering into this Agreement, and the consequences of such relationship and consideration relate solely to the Trust and the Fund.

 

13.       Compliance Procedures. The Adviser will, in accordance with Rule 206(4)-7 of the Advisers Act, adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and will provide the Trust with copies of such written policies and procedures upon request.

 

14.       Severability. 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 and, to this extent, the provisions of this Agreement shall be deemed to be severable.

 

15.       Notice. Notices of any kind to be given to the Trust hereunder by the Adviser shall be in writing and shall be duly given if mailed or delivered to the Waycross Independent Trust, 4965 U.S. Highway 42, Suite 2900, Louisville, KY 40222, Attention: President, or to such other address or to such individual as shall be so specified by the Trust to the Adviser. Notices of any kind to be given to the Adviser hereunder by the Trust shall be in writing and shall be duly given if mailed or delivered to Waycross Partners, LLC at 4965 U.S. Highway 42, Suite 2900, Louisville, KY 40222, Attention: Director of Operations, or at such other address or to such individual as shall be so specified by the Adviser to the Trust. Notices shall be deemed received when delivered in person or within four days after being deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested or upon receipt of proof of delivery when sent by overnight mail or overnight courier, addressed as stated above.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and the year first written above.

 

WAYCROSS INDEPENDENT TRUST, on behalf of the Funds listed on Schedule A waycross PARTNERS, Llc 
    
By: By: 
    
      
Name:Larry J. Walker Name:Benjamin Thomas 
Title:Trustee Title:Managing Partner 

 

 A-4 

 

SCHEDULE A

TO

INVESTMENT ADVISORY AGREEMENT

BETWEEN

WAYCROSS INDEPENDENT TRUST

AND

Waycross PARTNERS, Llc

 

Name of Fund Management Fee*
Waycross Long/Short Equity Fund 1.25%
Waycross Focused Equity Fund 0.75%

 

*As a percent of average daily net assets. Note, however, that the Adviser shall have the right, but not the obligation, to voluntarily waive any portion of the advisory fee from time to time.

 

 A-5