Manager Directed Portfolios PRE 14A, filed Dec 21, 2023
Manager Directed Portfolios (SJCP)
PRE 14A
2023-12-21
For: 2023-12-21
View Original
Added on
October 20, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant ⌧
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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⌧
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Manager Directed Portfolios
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Total fee paid:
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Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Date Filed:
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Sphere 500 Climate Fund
a series of Manager Directed Portfolios
c/o U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, Wisconsin 53202
[ ]
Dear Shareholder,
On behalf of the Board of Trustees of Manager Directed Portfolios (the “MDP Board”), I am writing to inform you of the upcoming special meeting of the shareholders of the Sphere 500 Climate Fund, a series of Manager
Directed Portfolios (“MDP”) (the “Fund” or the “Acquired Fund”), which will be held at the offices of U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202 on February 7, 2024 at 11:00 a.m. Central Time (with any
adjournments or postponements thereof, the “Meeting”).
At the Meeting, the shareholders of the Fund will be asked to vote on an Agreement and Plan of Reorganization and Termination (“Reorganization Agreement”) providing for the reorganization of the Fund with and into a
series of North Square Investments Trust (“NSIT”) that was newly created specifically for such reorganization (the “Acquiring Fund”) (the “Reorganization”).
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ACQUIRED FUND
(series of Manager Directed Portfolios)
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To be
reorganized into
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ACQUIRING FUND
(series of North Square Investments Trust)
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Sphere 500 Climate Fund
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è
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Sphere 500 Climate Fund
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The Acquired Fund is currently organized as a series of MDP, an open-end management investment company organized as a Delaware statutory trust with its principal offices located at 615 East Michigan Street,
Milwaukee, Wisconsin 53202. After completion of the Reorganization, the Acquired Fund will become a series of NSIT, an open-end management investment company organized as a Delaware statutory trust with its principal offices located c/o Ultimus
Fund Solutions, LLC, 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246.
If shareholders approve the Reorganization, it will take effect on or about February [23], 2024, or such other date as may be agreed upon by the officers of MDP and NSIT. At that time, the shares of the Acquired Fund will be exchanged on a
tax-free basis for shares of the Acquiring Fund with the same aggregate net asset value. Following the Reorganization, Reflection Asset Management, LLC (the “Adviser” or “Reflection”), the investment adviser to the Acquired Fund, will continue as
the investment adviser to the Acquiring Fund. There will be no change to the Acquired Fund’s investment objective or strategies as a result of the Reorganization. The Acquired Fund’s management fee, investment limitations and principal risks will
remain the same, and expenses of the Acquiring Fund are anticipated to be the same as those of the Acquired Fund following the Reorganization. The Acquiring Fund is expected to experience lower expenses over time due to reduced service provider
expenses.
Your vote is important no matter how many shares you own. After careful consideration, and with the recommendation of Reflection, the MDP Board unanimously approved the
Reorganization Agreement and authorized the solicitation of proxies on the proposal. The MDP Board recommends that you vote FOR the Reorganization proposal. For more information about the Reorganization proposal requiring your vote,
please refer to the accompanying Proxy Statement. The Notice of Special Meeting of Shareholders and the proxy card are also enclosed.
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Voting your shares early will avoid costly follow-up mail and telephone solicitation. After reviewing the attached materials, please complete, sign and date your proxy card and mail it promptly in the enclosed postage paid envelope. You may also
vote online by following the instructions found on your proxy card, by telephone at the number provided on the proxy card, or at the Meeting. Any proposal submitted to a vote at the Meeting may be voted at the Meeting, by phone or online using the
instructions found on your proxy card, or by written proxy. If you have any questions regarding the Proxy Statement, please call 1-877-864-5060.
Do you have questions? If you have any questions about how to vote your proxy or about the meeting in general, please call toll-free 1-877-864-5060. Representatives are available to assist you Monday through Friday 9 a.m. to 10 p.m. Eastern Time.
Sincerely,
Scott M. Ostrowski
President
Manager Directed Portfolios
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Sphere 500 Climate Fund
a series of Manager Directed Portfolios
c/o U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, Wisconsin 53202
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 7, 2024
Dear Shareholders:
Notice is hereby given that a special meeting of shareholders of the Sphere 500 Climate Fund, a series of Manager Directed Portfolios (the “Acquired Fund”), will be held at the offices of U.S. Bank Global Fund
Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202 on February 7, 2024 at 11:00 a.m. Central Time (with any adjournments or postponements thereof, the “Meeting”).
The purpose of the Meeting is for shareholders of the Acquired Fund to consider and act upon the following proposal:
| PROPOSAL: |
To approve the Agreement and Plan of Reorganization and Termination providing for (a) the acquisition of all of the assets of the Acquired Fund by a newly created series of North Square Investments Trust of the same name (the “Acquiring
Fund”) in exchange for shares of the Acquiring Fund and the assumption by the Acquiring Fund of all liabilities of the Acquired Fund and (b) the subsequent liquidation, termination and dissolution of the Acquired Fund.
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Shareholders may also be asked to transact such other business as may properly come before the Meeting. Shareholders of record at the close of business on December 22, 2023, are entitled to notice of, and to vote at,
the Meeting.
THE MDP BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 7, 2024. This Notice of Special Meeting of
Shareholders and the Proxy Statement are available on the Internet at [ ]. On this website, you will be able to access the Notice of Special Meeting of Shareholders, the Proxy Statement and any amendments or supplements to the foregoing material
that are required to be furnished to shareholders.
By Order of the Board of Trustees of
Manager Directed Portfolios:
Amber C. Kopp
Secretary
Manager Directed Portfolios
[ ]
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YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN
To assure your representation at the Meeting, please complete the enclosed proxy and return it promptly in the accompanying envelope, vote online at the website listed on your proxy card, or vote
by calling the number listed on your proxy card, whether or not you expect to be present at the Meeting. If you attend the Meeting, you may revoke your proxy and vote your shares at the Meeting.
IF YOU SIGN, DATE AND RETURN THE PROXY CARD BUT GIVE NO INSTRUCTIONS, YOUR SHARES WILL BE VOTED “FOR” THE PROPOSAL DESCRIBED ABOVE.
To avoid the additional expense of further solicitation, we ask for your cooperation in voting promptly. In addition to the solicitation of proxies by mail, you may receive a call from a representative of EQ Fund
Solutions or from Reflection Asset Management, LLC if your vote is not received.
INSTRUCTIONS FOR VOTING BY TOUCH-TONE TELEPHONE OR VIA THE INTERNET
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Read the Proxy Statement, and have your Proxy Card handy.
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Call the toll-free number or visit the web site indicated on your Proxy Card.
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Enter the number found in the shaded box on the front of your Proxy Card.
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Follow the recorded or on-line instructions to cast your vote.
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MANAGER DIRECTED PORTFOLIOS
Sphere 500 Climate Fund
615 East Michigan Street
Milwaukee, Wisconsin 53202
______________________________
PROXY STATEMENT
______________________________
SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 7, 2024
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “MDP Board”) of Manager Directed Portfolios (“MDP”) on behalf of the Sphere 500 Climate Fund, a series of
MDP (the “Acquired Fund”), for use at the special meeting of shareholders of the Acquired Fund to be held at the offices of U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202 on February 7, 2024 at 11:00 a.m.
Central Time (together with any postponements or adjournments thereof, the “Meeting”). The Notice of Special Meeting of Shareholders, Proxy Statement, and proxy card will be mailed to shareholders beginning on or about January 25, 2024.
The Meeting has been called by the MDP Board to consider the proposed Agreement and Plan of Reorganization and Termination (“Reorganization Agreement") attached as an Appendix to this Proxy Statement, pursuant to
which the Acquired Fund would reorganize into a newly created series of North Square Investments Trust (“NSIT”), an investment company organized as a Delaware statutory trust. Under the Reorganization Agreement, (i) the Acquired Fund would transfer
all of its assets into a newly created series of NSIT with the same name as the Acquired Fund (the “Acquiring Fund”), in exchange for (a) the number of full and fractional shares of the Acquiring Fund corresponding to the number of outstanding full
and fractional shares of the Acquired Fund with an aggregate net asset value (“NAV”) equal to the aggregate NAV of shares of the Acquired Fund, and (b) the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund, followed by
(ii) a liquidating distribution by the Acquired Fund to its shareholders of the Acquiring Fund shares received in the exchange, in proportion to the shareholders’ holdings of the shares of the Acquired Fund (the “Reorganization”).
The Reorganization of the Acquired Fund will not result in any change to the investment objective, principal investment strategies, or investment policies of the Acquired Fund. There are no changes
anticipated to be made to the Acquired Fund’s portfolio as a result of being reorganized into the Acquiring Fund. Reflection Asset Management, LLC, the investment adviser to the Acquired Fund (the “Adviser” or “Reflection”), will continue to serve
as the investment adviser to the Acquiring Fund. The portfolio manager of the Acquired Fund will continue as the portfolio manager of the Acquiring Fund. The investment advisory fee rate for the Acquiring Fund will be the same as the investment
advisory fee rate for the Acquired Fund. No change in the advisory fee rate is being proposed.
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ACQUIRED FUND
(series of Manager Directed Portfolios)
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To be
reorganized into
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ACQUIRING FUND
(series of North Square Investments Trust)
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Sphere 500 Climate Fund
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è
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Sphere 500 Climate Fund
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The Prospectus and Statement of Additional Information of the Acquired Fund are incorporated herein by reference. The Acquired Fund’s administrator will provide a copy of the
Acquired Fund’s Prospectus, Statement of Additional Information, and most recent annual report and semi-annual report, including financial statements and schedules, at no charge if you call the Acquired Fund at (844)2SPHERE (toll free) or write
to the Sphere 500 Climate Fund c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The Acquired Fund’s most recent annual report has previously been delivered or made available to shareholders. All of these
documents are also available at no charge on the Acquired Fund’s website at: www.oursphere.org/fund, or on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
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QUESTIONS AND ANSWERS: Important Information to Help You Understand and Vote on the Proposal
Question: What is the purpose of the Reorganization?
| Answer: |
Reflection and the MPD Board are recommending the Reorganization because each believes it would be in the best interest of the Fund and its shareholders. The purpose of the Reorganization is to transition
the Acquired Fund from MDP to NSIT with the objective of obtaining lower service provider fees, greater distribution opportunities and enhanced marketing services that are anticipated to be available to the Acquired Fund through the
Reorganization. The Adviser believes that, by transitioning the Acquired Fund to NSIT and accessing its complement of service providers, it will provide a better strategic fit for the Acquired Fund and improved efficiencies due to the
affiliation of NSIT’s administrator with the Acquired Fund’s distributor. In addition, the Adviser expects that the Acquiring Fund will experience reduced service provider fees.
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The Reorganization of the Acquired Fund must be approved by the shareholders of the Acquired Fund in order to take place.
Question: How will the Acquired Fund be impacted by the Reorganization?
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There are no significant differences in the management structure or organization of the Acquired Fund and the Acquiring Fund. The Acquired Fund is a separate portfolio series of MDP, a Delaware statutory trust, and the Acquired Fund is
managed by the Adviser. The Acquiring Fund is a separate portfolio series of NSIT, which is also a Delaware statutory trust, and will continue to be managed by the Adviser. The board of trustees of NSIT (“NSIT Board”) provides oversight and
governance for NSIT and the series of funds in NSIT. As a new series of NSIT, the Acquiring Fund, assuming the consummation of the Reorganization, will be overseen by a different board of trustees and have different officers than the
Acquired Fund. The Acquiring Fund will also be subject to the compliance and other policies and procedures of NSIT, although it is not anticipated that this will result in any substantive change from the current day-to-day operations of the
Acquired Fund, including its various operational and regulatory policies and procedures.
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A common set of service providers provides non-investment management services to NSIT and its series funds, some of which are the same service providers as those in place for the Acquired Fund.
Custody, administration, accounting, transfer agency, distribution services and legal counsel (“Third Party Service Arrangements”) are provided to MDP and NSIT by the following parties:
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MDP
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NSIT
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Administrator/
Transfer Agent
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U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
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Ultimus Fund Solutions, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
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Distributor
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Ultimus Fund Distributors, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246 |
Ultimus Fund Distributors, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246 |
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Custodian
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U.S. Bank, N.A.
Custody Operations
1555 North River Center Drive
Milwaukee, Wisconsin 53212
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U.S. Bank, N.A.
Custody Operations
1555 North River Center Drive
Milwaukee, Wisconsin 53212
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Auditor
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Cohen & Company, Ltd.
1835 Market Street, 3rd Floor
Philadelphia, PA 19103
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Cohen & Company, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115
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Legal Counsel
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Godfrey & Kahn, S.C.
833 East Michigan Street, Suite 1800
Milwaukee, WI 53202
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Seward & Kissel LLP
901 K Street
Washington, DC 20001
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| Question: |
Who is Ultimus Fund Solutions LLC?
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| Answer: |
Ultimus Fund Solutions, LLC is one of the largest independent fund administration providers in the United States. As of November 30, 2023, it serves as the administrator for over 1,800 mutual funds and exchange-traded funds (“ETFs”).
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| Question: |
What will remain the same after the Reorganization?
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| Answer: |
The Reorganization, if consummated, will provide the Acquired Fund’s shareholders with the opportunity to continue to invest in the Acquiring Fund, offering the same day-to-day investment management of the
Fund by the same investment adviser and portfolio manager that currently manage the Acquired Fund. The Reorganization will not affect the Acquired Fund’s investment objective, principal investment strategies, or principal investment
risks. There are no changes anticipated to be made to the Acquired Fund portfolio as a result of being reorganized into the Acquiring Fund. The Adviser serves as the investment adviser to the Acquired Fund under an investment advisory
agreement with MDP, on behalf of the Acquired Fund. The Adviser will serve as the investment adviser to the Acquiring Fund under a new investment advisory agreement with NSIT, on behalf of the Acquiring Fund. The investment advisory
agreement with NSIT will be substantially the same in all material respects as the investment advisory agreement with MDP.
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| Question: |
What will change as a result of the Reorganization?
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| Answer: |
If the Reorganization of the Acquired Fund is approved by the shareholders of the Acquired Fund, the Acquired Fund will reorganize into a separate series of NSIT, a separate trust with a different board of trustees than the Acquired
Fund’s board. NSIT is subject to its own Agreement and Declaration of Trust and By-Laws. As a series of NSIT, the Acquiring Fund will have different officers and a different fund administrator and transfer agent than the Acquired Fund.
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| Question: |
What effect will the Reorganization have on me as a shareholder?
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| Answer: |
If the Reorganization is approved by the shareholders of the Acquired Fund, the Acquired Fund will be reorganized into a new, identically named Acquiring Fund, which is a new series of NSIT. Each shareholder
of the Acquired Fund will receive the same number of full and fractional shares of the Acquiring Fund, with the same aggregate NAV, as the shareholder held of the Acquired Fund immediately prior to the Reorganization. There are no
changes anticipated to be made to the Acquired Fund’s portfolio as a result of being reorganized into the Acquiring Fund. The shareholder services offered to the shareholders of the Acquiring Fund will be substantially similar to the
shareholder services offered to the shareholders of the Acquired Fund. As discussed further below, the investment advisory fee rate for the Acquiring Fund will be the same as the investment advisory fee rate for the Acquired Fund
following the Reorganization. The total annual fund operating expenses of Acquiring Fund are anticipated to be the same as those of the Acquired Fund immediately following the Reorganization.
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| Question: |
How will the Reorganization work?
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| Answer: |
The Reorganization of the Acquired Fund will involve three steps: (a) the Acquired Fund will transfer all of its assets to the Acquiring Fund, in exchange for shares of the Acquiring Fund with an aggregate NAV equal to the aggregate NAV
of shares of that Acquired Fund, and the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund; (b) the Acquired Fund will distribute the Acquiring Fund shares received in the exchange pro rata to its shareholders;
and (c) the Acquired Fund will be liquidated and terminated.
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| Question: |
Who will pay the expenses related to the Reorganization?
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The Adviser will pay all costs related to the Reorganization, even if the Reorganization is not consummated with respect to the Acquired Fund. This includes, but is not limited to, proxy and proxy solicitation costs, printing costs,
board fees relating to any special board meetings and legal fees. Neither the Acquired Fund nor the Acquiring Fund and their respective shareholders will incur any expenses in connection with the Reorganization.
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| Question: |
Will my investment advisory fee rate and/or fund expenses change as a result of the Reorganization?
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Upon reorganization of the Acquired Fund into the Acquiring Fund, the Adviser’s investment advisory fee rate will not change. The total annual fund operating expenses of the Acquiring Fund are anticipated
to be the same or less than the total annual fund operating expenses of the Acquired Fund following the Reorganization. The Adviser expects that the Acquiring Fund will realize reduced service provider expenses. The Adviser has agreed
to pay all expenses of the Acquired Fund, except for: the unified management fee payable to the Adviser pursuant to the investment advisory agreement, interest charges on any borrowings, taxes, brokerage
commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, distribution
(12b-1) fees and expenses, and shareholder service fees and expenses pursuant to the shareholder servicing plan (“Shareholder Servicing Plan”) (collectively, “Excluded Expenses”). The Adviser has agreed to continue to pay all
expenses of the Acquiring Fund, except for the Excluded Expenses, following the Reorganization. The Acquired Fund is authorized to pay a shareholder servicing fee under the Shareholder Servicing Plan. The Shareholder Servicing Plan
is currently inactive but the payment of such shareholder servicing fees may be made in the future pursuant to the Shareholder Servicing Plan.
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| Question: |
What are the tax consequences of the Reorganization?
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| Answer: |
The Reorganization is expected to be a tax-free reorganization for federal income tax purposes under Section 368(a) of the Internal Revenue Code of 1986, as amended. Accordingly, no gain or loss should be recognized by the Acquired Fund
or its shareholders as a result of the Reorganization.
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| Question: |
How does the MDP Board suggest I vote on the Reorganization?
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The MDP Board recommends that you vote “FOR” the approval of the Reorganization. For a discussion of the considerations of the MDP Board in evaluating these matters, please see the section entitled, “MDP Board Considerations.”
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Will my vote make a difference? What is the vote needed to pass the proposal?
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Yes. Your vote is needed to ensure that the proposal can be acted upon, and we encourage all shareholders to participate in the governance of the Acquired Fund. Your immediate response will help prevent the need for any further
solicitations for a shareholder vote. We encourage all shareholders to vote, no matter how many shares you own. If not enough shareholders vote, the Reorganization could be delayed, and we may need to solicit votes again. The Reorganization
will be approved with respect to the Acquired Fund only with the affirmative “vote of a majority of the outstanding voting securities” of the Acquired Fund, as defined under the Investment Company Act of 1940 (the “1940 Act”), which means
the vote of the lesser of (1) 67% or more of the voting securities present at the Meeting, if more than 50% of the outstanding voting securities of the Acquired Fund are present or represented by proxy or (2) more than 50% of the
outstanding voting securities of the Acquired Fund.
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| Question: |
How do I place my vote?
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You can place your vote by mailing your completed proxy card included with this Proxy Statement in the postage-paid envelope provided. As an alternative to voting the proxy card or voting instruction card by mail, you may vote by
telephone, the Internet, or in person. To vote by telephone or the Internet, please follow the instructions listed on the proxy card or voting instruction card. If you will attend the Meeting and vote in person, please let us know by
calling EQ Fund Solutions toll-free at 1-877-864-5060.
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| Question: |
What will happen if the Reorganization is not approved?
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| Answer: |
If the Reorganization is not approved with respect to the Acquired Fund by the shareholders of the Acquired Fund, the Reorganization will not be consummated, and the MDP Board will consider other alternatives, which may include
liquidating the Acquired Fund or having the Acquired Fund continue as a series of MDP.
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| Question: |
What if I do not wish to participate in the Reorganization?
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If you do not wish to have your Acquired Fund shares exchanged for shares of the Acquiring Fund, you may redeem your shares prior to the consummation of the Reorganization. If you redeem your shares, and if you hold shares in a taxable
account, you may recognize a taxable gain or loss based on the difference between your tax basis in the shares and the amount you receive for them.
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| Question: |
Where do I call if I have questions?
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| Answer: |
If you have any questions about the proposal or to quickly vote your shares, please call EQ Fund Solutions, our proxy solicitation firm, toll-free at 1-877-864-5060. Representatives are available to take your vote or to answer any
questions Monday through Friday 9:00 AM to 10:00 PM (Eastern Time).
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SUMMARY OF THE REORGANIZATION PROPOSAL
You are being asked to approve the reorganization of the Acquired Fund in which you are invested pursuant to an Agreement and Plan of Reorganization and Termination (the “Reorganization Agreement”), which provides
for the Acquired Fund to be reorganized into the Acquiring Fund, at which time you, as a shareholder of the Acquired Fund, will become a shareholder of the Acquiring Fund.
The Acquired Fund is a series of MDP. If the Reorganization Agreement is approved by shareholders with respect to the Acquired Fund, the Acquired Fund will be reorganized into the new, identically named Acquiring Fund, a series of NSIT. The
principal goals of the Reorganization, as identified by the Adviser, are to transition the Acquired Fund from MDP to NSIT to realize the lower service provider fees that are anticipated to be available to the Acquired Fund, as well as enhanced
services, as a result of the Reorganization. The Adviser will remain the investment adviser to the Acquiring Fund. The investment advisory fee rate and structure for the Acquiring Fund will be the same as the investment advisory fee rate and
structure for the Acquired Fund. The total annual fund operating expenses of the Acquiring Fund are expected to be the same as the total annual fund operating expenses of the Acquired Fund following the Reorganization. The purpose of the
Reorganization is to transition the Acquired Fund from MDP to NSIT, which the Adviser believes will also result in greater distribution opportunities and enhanced marketing services. In addition, the Adviser and the MDP Board believe that the
Reorganization will provide a better strategic fit for the Acquired Fund and improved efficiencies due to the affiliation of NSIT’s administrator with the Acquired Fund’s distributor.
The following items will be the same after the Reorganization:
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The investment objective, principal investment strategies, investment policies and limitations, principal investment risks and fiscal year end of the Acquired Fund will be the same as those of the Acquiring Fund;
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The investment adviser to the Acquiring Fund will be the same as the current investment adviser to the Acquired Fund;
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The portfolio manager of the Acquiring Fund will be the same as the portfolio manager of the Acquiring Fund;
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The portfolio of the Acquiring Fund will remain the same as the portfolio of the Acquired Fund, with no changes anticipated to be made as a result of the Reorganization;
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The Acquiring Fund will continue to have the same distributor, custodian and registered public accounting firm as the Acquired Fund;
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The investment advisory fee rate paid to the investment adviser of the Acquiring Fund will be the same as the current investment advisory fee rate paid to the investment adviser of the Acquired Fund;
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The Adviser will continue to be paid a unified advisory fee pursuant to which the Adviser is responsible for most expenses of the Fund;
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The number of full and fractional shares of the Acquired Fund owned by a shareholder immediately prior to the Reorganization will be the same as, and will have an aggregate NAV equal to, the number of full and fractional shares of the
Acquiring Fund owned by the shareholder immediately after the Reorganization;
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Shareholders will continue to own shares of a series of an open-end investment company organized as a Delaware statutory trust;
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The shareholder services currently offered to the shareholders of the Acquired Fund are expected to be substantially the same as the shareholder services offered to the shareholders of the Acquiring Fund; and
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The annual fund operating expenses of the Acquiring Fund will be no greater than those of the Acquired Fund.
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The following items will change after the Reorganization:
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The Acquiring Fund will have a different board of trustees than the current MDP Board and different officers;
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The Adviser’s investment advisory agreement will be with NSIT, on behalf of the Acquiring Fund;
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The Acquiring Fund will have a different fund administrator, transfer agent and legal counsel; and
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The Acquiring Fund will be subject to the Declaration of Trust and By-Laws of NSIT.
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Pursuant to the Reorganization Agreement, the Reorganization will be accomplished as follows: (a) the Acquired Fund will transfer all of its assets to the Acquiring Fund, in exchange for shares of the Acquiring Fund
with an aggregate NAV equal to the aggregate NAV of shares of the Acquired Fund, and the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund; (b) the Acquired Fund will distribute the Acquiring Fund shares received in
the exchange pro rata to its shareholders; and (c) the Acquired Fund will be liquidated and terminated. The Reorganization Agreement is attached hereto in the Appendix.
At meetings of the MDP Board held on August 17, 2023, September 15, 2023, and October 17, 2023, the MDP Trustees discussed the Adviser’s recommendation to reorganize the Acquired Fund into a new series of NSIT. The
MDP Trustees, all of whom are members who are not “interested persons” of the Acquired Fund, as that term is defined in the 1940 Act (“Independent Trustees”), considered the Reorganization Agreement with respect to the Acquired Fund substantially
in the form attached to this Proxy Statement on October 17, 2023. The MDP Trustees unanimously determined that the Reorganization would be in the best interests of the shareholders of the Acquired Fund and that the interests of its shareholders
will not be diluted as a result of the Reorganization.
The MDP Board recommends a vote “FOR” the Reorganization.
REASONS FOR THE PROPOSED REORGANIZATION
The Adviser requested that the MDP Board consider the Reorganization. The Acquired Fund is currently a series of MDP, a Delaware statutory trust, and is managed by the Adviser. MDP is structured so that its board of
trustees provides oversight and governance to, and a common set of service providers provide non-investment management services to, a number of different funds managed by different unaffiliated investment advisers. NSIT is a Delaware statutory
trust structured in the same manner as MDP. If the Reorganization is approved, the Acquiring Fund will become a series of NSIT and the Adviser would be one of the investment advisers that provide investment management services to funds in NSIT.
The MDP Board discussed the Reorganization during its regular meeting on August 17, 2023 and at a special meeting on September 15, 2023. A representative of the Adviser participated in both of these meetings and provided information to the
Board regarding the proposed Reorganization. The Adviser proposed the Reorganization of the Acquired Fund because the Adviser believes that the Fund and its shareholders would benefit by becoming a series of NSIT. Specifically, the Adviser
stated its belief that the service options and fee arrangements offered to the Acquired Fund through the Reorganization would be in the best interests of shareholders given that, among other benefits, the overall fees and expenses are
anticipated to be lower. The Adviser believes the Reorganization will also result in greater distribution opportunities and enhanced marketing services for the Acquiring Fund, as well as improved efficiencies due to the affiliation of NSIT’s
administrator, Ultimus Fund Solutions, LLC (“Ultimus”), with the Acquired Fund’s distributor, Ultimus Fund Distributors, LLC.
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In connection with its consideration of the Reorganization, the MDP Board requested various information and data from the Adviser and NSIT. The MDP Board reviewed, among other information, responses from the
Adviser and NSIT to a due diligence request, the terms of the Reorganization Agreement and information relating to: the compatibility of the Acquiring Fund’s investment objective, strategies and risks to those of the Acquired Fund; the fees and
expenses of the Acquiring Fund as compared to the Acquired Fund’s fees and expenses; the Acquiring Fund’s distribution strategy as described by the Adviser; information regarding the Acquiring Fund; the expected federal income tax consequences of
the Reorganization; the party who would be responsible for the costs anticipated to be incurred in connection with the Reorganization; and the potential benefits to the Adviser, among other factors.
MDP Board Considerations in Approving the Reorganization
The MDP Board formally considered the Reorganization at a meeting held on October 17, 2023. At this meeting, the Trustees were advised by independent legal counsel in their considerations of the Reorganization
Agreement and the Reorganization. The Board considered their duties in considering the Reorganization under Delaware law and the 1940 Act, including Rule 17a-8. The MDP Trustees reviewed additional information regarding the proposed
Reorganization and the anticipated benefits to the Acquired Fund and its shareholders. The MDP Board noted that the Adviser would continue to serve as the investment adviser of the Acquiring Fund and the portfolio manager for the Acquired Fund
would continue to serve as the portfolio manager of the Acquiring Fund. Moreover, the Acquiring Fund would continue be a passively-managed index fund, following the same index as the Acquired Fund and with the same investment objective and
principal investment strategies and limitations of the Acquired Fund. The MDP Board considered that the advisory fee rate will not change for the Acquiring Fund, and there would be no change in the nature or level of advisory services to be
provided by the Adviser. The Board considered information provided by a representative of Ultimus and NSIT who participated in the meeting and provided background on NSIT and information about Ultimus’ qualifications and experience. The Board
determined that the other principal service providers to the Acquiring Fund will continue to provide a high level of services to the Fund, notwithstanding the change in certain service providers.
The Board considered the potential benefits of the Reorganization to the Adviser and NSIT, including the Acquiring Fund’s opportunity to acquire the assets and performance track record of the Acquired Fund, and
financial benefits, such as the cost savings that the Adviser may realize under the Acquiring Fund’s unified fee structure due to the anticipated reduction in certain service provider expenses. The Board considered that neither the Acquired Fund
nor the Acquiring Fund would bear any costs of the Reorganization, which costs would be borne by the Adviser, and that the value of the Acquiring Fund shares to be received by shareholders of the Acquired Fund would be calculated at NAV as
determined in accordance with MDP’s valuation procedures. Thus, the Reorganization would not be dilutive to shareholders.
After careful consideration, the MDP Board, which is comprised solely of Independent Trustees, determined that the Reorganization was in the best interests of the Acquired Fund and its shareholders and that the
interests of the shareholders of the Acquired Fund would not be diluted as a result of the Reorganization. The MDP Board unanimously approved the Reorganization Agreement and recommended that shareholders of the Acquired Fund vote in favor of the
proposal. The MDP Board did not find it practicable to, and did not, assign relative weights to the specific factors considered in reaching their conclusions and determinations to approve the Reorganization Agreement. Rather, the determinations
were made on the basis of each Trustee’s business judgment after consideration of all of the factors taken in their entirety. Although not meant to be all‑inclusive, the following were some of the factors considered by the MDP Board in making
their determination:
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| • |
The terms and conditions of the Reorganization.
|
| • |
The Adviser will manage the Acquiring Fund as the successor to the Acquired Fund.
|
| • |
The continuity of portfolio management as a result of the Reorganization.
|
| • |
The investment objective, principal investment strategies, investment policies and limitations, principal investment risks and fiscal year end of the Acquiring Fund will be the same as those of the Acquired Fund.
|
| • |
The investment advisory fee rate for the Acquiring Fund will be the same as the current investment advisory fee rate for the Acquired Fund and the unified advisory fee structure will remain in place. Accordingly, the Adviser will continue to pay all expenses of the Acquiring Fund, except for the Excluded Expenses, pursuant to the terms of the investment advisory agreement with NSIT, on behalf of the Acquiring Fund.
|
| • |
The interests of the shareholders of the Acquired Fund will not be diluted as a result of the Reorganization.
|
| • |
Potential benefits to the shareholders of the Acquired Fund from the Reorganization, including anticipated enhanced marketing and distribution services and expected efficiencies from operating the Acquiring Fund within NSIT.
|
| • |
The shareholder services offered to the shareholders of the Acquiring Fund will be substantially similar to the shareholder services currently offered to the shareholders of the Acquired Fund, although provided by different service
providers.
|
| • |
The qualifications and experience of the Acquiring Fund’s service providers.
|
| • |
The total annual operating expenses of the Acquiring Fund following the Reorganization are expected to be the same as those of the Acquired Fund.
|
| • |
The costs of the Reorganization, including the costs of soliciting proxies, will be borne by the Adviser and not the Acquired Fund or the Acquiring Fund or their respective shareholders, and the Adviser will bear such costs whether the
Reorganization is consummated or not.
|
| • |
Potential benefits to the Adviser due to the anticipated reduction in the gross annual operating expenses of the Acquiring Fund.
|
| • |
The Reorganization is expected to qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended (the “Code”).
|
| • |
If shareholders of the Acquired Fund do not wish to become shareholders of the Acquiring Fund, they may redeem their Acquired Fund shares before the Reorganization.
|
| • |
Possible alternatives to the Reorganization.
|
If shareholders of the Acquired Fund approve the proposal, the Reorganization will take effect on or about February [23], 2024 (the “Closing Date”) or such other date as may be agreed upon by the officers of NSIT and
MDP in accordance with the Reorganization Agreement. The NSIT Board has also approved the Reorganization on behalf of the Acquiring Fund.
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Summary of the Reorganization Agreement
Below is a summary of the important terms of the Reorganization Agreement, a form of which is set forth as an Appendix to this Proxy Statement, and which we encourage you to read in its entirety. All information
regarding NSIT, its operations and the various agreements between NSIT and its several service providers have been provided by NSIT or the Adviser, and neither MDP nor any member of the MDP Board has independently verified the accuracy of such
information.
Key Provisions. The Reorganization Agreement consists of several steps that will occur on the Closing Date following shareholder approval. First, with respect to the Acquired
Fund, it will transfer all of its assets to the Acquiring Fund, which is a series of NSIT, in exchange solely for (1) all of the shares of Acquiring Fund with an aggregate NAV equal to the aggregate NAV of the number of full and fractional shares
of the Acquired Fund as of the Closing Date and (2) the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund. Immediately thereafter, the Acquired Fund will distribute the shares received from the Acquiring Fund to its
shareholders on a pro rata basis and liquidate. This will be accomplished by opening an account on the books of the Acquiring Fund in the name of each shareholder of record, determined on the business day prior to the Closing Date, of the Acquired
Fund and transferring the Acquiring Fund shares to each such account, in complete liquidation of the Acquired Fund. As a result, every shareholder of record of the Acquired Fund will own the same number of shares of the Acquiring Fund, with the
same aggregate NAV, as the number of Acquired Fund shares held by the shareholder immediately before the Reorganization. For example, if you held 100 shares of the Acquired Fund (a series of MDP) immediately prior to the close of the New York Stock
Exchange on the Valuation Date, those shares would be canceled and you would receive 100 shares of the Acquiring Fund, which will also be named Sphere 500 Climate Fund (a series of NSIT). The aggregate NAV of your Acquiring Fund shares immediately
after the Reorganization will be equal to the aggregate NAV of your Acquired Fund shares immediately prior to the Reorganization. All of these transactions would occur as of the Closing Date. Until the Closing Date, shareholders of the Acquired
Fund will continue to be able to redeem their shares at the NAV per share next determined after receipt by the Acquired Fund’s transfer agent of a redemption request in proper form. After the Reorganization, all of the issued and outstanding shares
of the Acquired Fund will be canceled on the books of the Acquired Fund, and the share transfer books of the Acquired Fund will be permanently closed. If the Reorganization is consummated, shareholders will be free to redeem the shares of the
Acquiring Fund that they receive in the transaction at their next determined NAV per share. No sales charges will be imposed on the shares of the Acquiring Fund issued in connection with the Reorganization. The Reorganization has been structured to
qualify for federal income tax purposes as a tax-free reorganization under Section 368(a)(1)F) of the Code. As a condition of the Reorganization, counsel for NSIT will provide a tax opinion that the shareholders of the Acquired Fund will not
recognize any gain or loss for Federal income tax purposes as a consequence of the Reorganization. Nevertheless, shareholders of the Acquired Fund are encouraged to consult their tax advisors as to any different consequences of redeeming their
shares prior to the Reorganization or exchanging such shares for shares of the Acquiring Fund in the Reorganization.
Other Provisions. The Reorganization is subject to a number of conditions set forth in the Reorganization Agreement. Certain of these conditions may be waived by each of the
MDP Board and the NSIT Board. A significant condition includes the approval of the Reorganization Agreement by shareholders of the Acquired Fund (which may not be waived). The Reorganization Agreement may be terminated and the Reorganization
abandoned at any time prior to the Closing Date, before or after approval by the shareholders of the Acquired Fund, by mutual agreement of the parties, or by either party in the event of specified circumstances such as material breach. In addition,
the Reorganization Agreement may be amended, modified, or supplemented, as MDP and NSIT may mutually agree on in writing. However, shareholder approval would be required in order to amend the Reorganization Agreement, subsequent to the Meeting, in
a manner that would have a material adverse effect on the Acquired Fund’s shareholders’ interests. No governmental consent, approval, authorization or filing is required under the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the 1940 Act, or state securities laws, except as detailed in the Reorganization Agreement.
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COMPARISONS OF THE ACQUIRED FUND TO THE ACQUIRING FUND
Investment Objective, Principal Investment Strategies; Principal Risks; and Investment Policies and Restrictions. The investment objective, principal investment strategies,
investment policies and limitations, principal investment risks and fiscal year end of the Acquiring Fund are the same as those of the Acquired Fund. There are no changes anticipated to be made to the Acquired Fund’s portfolio as a result of being
reorganized into the Acquiring Fund.
Distribution and Purchase Procedures and Exchange Rights; Redemption Procedures; Valuation of Shares. The policies regarding distribution, purchase, redemption, and valuation
of shares for the Acquiring Fund are substantially the same as those of the Acquired Fund. There are no changes anticipated to be made to the Acquired Fund’s policies regarding distribution, purchase, redemption, and valuation of shares as a result
of being reorganized into the Acquiring Fund.
Fees and Expenses. The Reorganization will not result in any change to the Adviser’s investment advisory fee rate charged to the Acquiring Fund. In addition, the total annual
fund operating expenses of the Acquiring Fund are expected to be the same as those of the Acquired Fund. As discussed in more detail below, the Acquired Fund has adopted a Shareholder Servicing Plan that provides for a shareholder servicing fee of
up to 0.10%. The Shareholder Servicing Plan is currently inactive but the payment of such shareholder servicing fees may be made in the future pursuant to the Shareholder Servicing Plan.
The fee rates to be charged by the fund administrator, transfer agent and fund accountant to the Acquiring Fund are expected to be lower than the fee rates currently charged to the Acquired Fund. These fund expenses
are borne by the Adviser under the terms of the unified advisory fee.
The following tables allows you to compare the shareholder fees and annual fund operating expenses as a percentage of the aggregate daily net assets of the Acquired Fund that you may pay for buying
and holding shares of the Acquired Fund to those of the Acquiring Fund. The pro forma columns show estimated expenses of the Acquiring Fund for the current fiscal year, as if the Reorganization had occurred on the last day of the Acquired Fund’s
annual period ended September 30, 2023. The Annual Fund Operating Expenses tables and Example tables shown below are based on actual expenses incurred during the Acquired Fund’s annual period ended September 30, 2023. The pro forma columns show
your costs as if the Reorganization had occurred on September 30, 2023. Please keep in mind that, as a result of changing market conditions, total asset levels, and other factors, expenses at any time during the current fiscal year may be
significantly different from those shown. These tables do not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker-dealer or financial institution maintaining the account through which you
hold Fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here.
SPHERE 500 CLIMATE FUND
|
Annual Fund Operating Expenses (expenses that you pay each year
as a percentage of the value of your investment)
|
Acquired Fund
|
Pro Forma
Acquiring Fund
|
|
Management Fees
|
0.07%
|
0.07%
|
|
Distribution (12b-1) and/or Service Fees
|
0.00%
|
0.00%
|
|
Other Expenses
|
0.00%
|
0.00%(1)
|
|
Total Annual Fund Operating Expenses
|
0.07%
|
0.07%
|
| (1) |
Estimated expenses for the current fiscal year.
|
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Example. This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then redeem or hold all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher or lower, based upon these assumptions your costs would be:
|
Year
|
Acquired Fund
|
Pro Forma Acquiring Fund
|
|
1
|
$7
|
$7
|
|
3
|
$23
|
$23
|
|
5
|
$40
|
$40
|
|
10
|
$90
|
$90
|
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the
fiscal year ended September 30, 2023, the Acquired Fund’s portfolio turnover rate was 16% of the average value of its portfolio.
Performance. Set forth below is the performance information for the Acquired Fund. The bar chart and table that follow provide some indication of the risks of investing in the
Acquiring Fund by showing the performance of the Acquired Fund since inception and by showing how the Acquired Fund’s average annual returns compare with the Sphere 500 Fossil Free IndexTM and those of a broad measure of market
performance. The information shown assumes reinvestment of distributions. The Acquiring Fund has not yet commenced operations and therefore has no performance history. However, if the Reorganization is approved by shareholders, the Acquiring Fund
will acquire all of the assets, and assume all of the liabilities, of the Acquired Fund and will adopt the financial statements and performance history of the Acquired Fund. The Acquired Fund’s past performance, before and after taxes, is not
necessarily an indication of how the Acquiring Fund will perform in the future. Updated performance information for the Acquired Fund is available through the Acquired Fund’s website at www.oursphere.org/fund or by calling 1-844-2SPHERE (toll
free).
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Calendar Year Total Return as of December 31
The Fund’s calendar year-to-date return as of September 30, 2023 was 14.67%. During the period of time shown in the bar chart, the highest return for a calendar quarter was 5.40% for the quarter ended December 31,
2022, and the lowest return for a calendar quarter was -15.97% for the quarter ended June 30, 2022.
Average Annual Total Returns
(For the Periods Ended December 31, 2022)
|
1 Year
|
Since Inception
(October 4, 2021)
|
|
|
Acquired Fund*
|
||
|
Return Before Taxes
|
-20.02%
|
-10.39%
|
|
Return After Taxes on Distributions
|
-20.16%
|
-10.53%
|
|
Return After Taxes on Distributions and Sale of Fund Shares
|
-11.76%
|
-7.89%
|
|
Sphere 500 Fossil Free Index
|
-23.01%
|
-14.35%
|
|
S&P 500 Index
|
-18.11%
|
-7.27%
|
* Effective November 14, 2022, the Fund changed its name from the Sphere 500 Fossil Free Fund to the Sphere 500 Climate Fund.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s
tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who are exempt from tax or hold their Fund shares through tax-deferred or other tax-advantaged arrangements such as 401(k) plans or
individual retirement accounts (“IRAs”). In certain cases, the figure representing “Return After Taxes on Distributions and Sale of Fund Shares” may be higher than the other return figures for the same period. A higher after-tax return results
when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.
Tax Information. The Fund’s distributions will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred or other tax-advantaged
arrangement, such as a 401(k) plan or an IRA. You may be taxed upon withdrawal of monies from such tax-deferred arrangements.
Payments to Broker-Dealers and Other Financial Intermediaries. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and
its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over
another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
-15-
Existing and Pro Forma Capitalization of the Fund
The following tables set forth the capitalization of the Acquired Fund as of September 30, 2023, and of the Acquiring Fund as if the Reorganization took place on September 30, 2023. The capitalization of the
Acquiring Fund will likely be different at the time that the Reorganization is consummated, including as a result of daily share purchase and redemption activity in the Acquired Fund and changes in NAV per share.
|
Acquired Fund
|
Pro Forma Acquiring Fund
|
|
|
Total Net Assets
|
$5,530,603
|
$5,530,603
|
|
Shares Outstanding
|
278,236
|
278,236
|
|
NAV per Share
|
$19.88
|
$19.88
|
MANAGEMENT ARRANGEMENTS
The Acquired Fund’s investment adviser is Reflection Asset Management, LLC (the “Adviser” or “Reflection”), 1000 Palm Boulevard, Isle of Palms, South Carolina 29451. The Adviser is a registered investment adviser
under the Investment Advisers Act of 1940 and provides investment advisory services to the Acquired Fund under an investment advisory agreement with MDP, on behalf of the Acquired Fund. After the Reorganization, the Adviser will continue to serve
as investment adviser to the Acquiring Fund.
Under the current investment advisory agreement between the Adviser and MDP (on behalf of the Acquired Fund), the Acquired Fund pays the Adviser a unified management fee, which is calculated daily and paid monthly,
at an annual rate of 0.07% of the Acquired Fund’s average daily net assets. The Adviser has agreed to pay all expenses of the Acquired Fund, except for: the unified management fee payable to the Adviser pursuant to the investment advisory
agreement, interest charges on any borrowings, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred
tax liability, extraordinary expenses, distribution (12b-1) fees and expenses, and shareholder service fees and expenses pursuant to the Shareholder Servicing Plan (collectively, “Excluded Expenses”). With respect to the Acquiring Fund, the Adviser
has agreed to continue to pay all expenses of the Acquiring Fund, except for the Excluded Expenses following the Reorganization.
Our Sphere, Inc.™ (“Sphere” or the “Fund Sponsor”), currently serves as fund sponsor for the Acquired Fund. The Fund Sponsor has entered into a services agreement with the Adviser, pursuant to which the
Fund Sponsor agrees to (i) provide marketing support for the Acquired Fund; (ii) assist with the development of, and provide other support to, the Acquired Fund; and (iii) assume the obligation of the Adviser to pay all expenses of the Acquired
Fund, except Excluded Expenses.
Portfolio Management. There will be no change to the Acquired Fund’s portfolio manager as a result of the Reorganization. Jason T. Britton, Chief Executive Officer and Founder
of the Adviser, is the portfolio manager of the Acquired Fund. Background information regarding Mr. Britton is set forth below.
Jason T. Britton, Chief Executive Officer and Founder of the Adviser, serves as the Portfolio Manager of the Acquired Fund. Mr. Britton also serves as a portfolio manager of
an exchange-traded fund offered in a separate investment company. Mr. Britton has served as the CEO and head portfolio manager of the Adviser since its inception in 2019. From 2016 to 2019, Mr. Britton served as a consulting portfolio manager for
two different SEC registered investment advisers: Sciens Capital Management and AlphaOne Capital. From 2009 to 2016, Mr. Britton served as Managing Director and Head Portfolio Manager for thematic/ESG equities for U.S. Trust, a division of Bank
of America. Additionally, Mr. Britton is a Professor of Impact Investing in the business school of the College of Charleston. Mr. Britton received his B.S. in Business from Georgetown University and holds an MBA from the Yale School of
Management.
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The Acquired Fund’s Statement of Additional Information provides additional information about the compensation of the portfolio manager, other accounts managed by the portfolio manager and the ownership of the
Acquired Fund’s shares by the portfolio manager. You may obtain the Acquired Fund’s Statement of Additional Information at no charge if you call the Acquired Fund at (844)2SPHERE (toll free) or write to the Sphere 500 Climate Fund c/o U.S. Bank
Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
Comparison of Shareholder Servicing Fees
Shareholder Servicing Fee Comparison. The Acquired Fund and the Acquiring Fund have substantially similar shareholder servicing plans. The authorized fee rates under such plans
are identical. The Acquired Fund may charge an annualized shareholder servicing fee of up to 0.10% of average daily net assets. Because shareholder servicing fees are paid out of fund assets on an ongoing basis, over time these fees will increase
the cost of your investment and may cost you more than paying other types of sales charges. No shareholder servicing fees are currently being paid by the Acquired Fund under the plan but the payment of such fees may be made in the future pursuant
to the plan.
Consistent with the arrangements currently in place for the Acquired Fund, the Adviser may make payments to financial intermediaries for distribution and shareholder services. These shareholder services or
distribution-related services may include: marketing support; access to third party platforms; access to sales meetings, sales representatives and management representatives of the intermediary; and inclusion of the Fund on a sales list, including
a preferred or select sales list, and in other sales programs.
CERTAIN BACKGROUND AND COMPARATIVE INFORMATION ABOUT MDP AND NSIT
General. MDP and NSIT are each organized as Delaware statutory trusts. MDP was organized as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust (the
“MDP Trust Instrument”) dated March 20, 2007, as amended and restated thereafter. As a Delaware statutory trust, MDP’s operations are currently governed by the MDP Trust Instrument and Amended and Restated By-Laws (the “MDP By-Laws”), as well as by
applicable federal and Delaware law. NSIT was organized as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust (the “NSIT Trust Instrument”) on August 2, 2018. As a Delaware statutory trust, NSIT’s operations are currently
governed the NSIT Trust Instrument and Bylaws (the “NSIT Bylaws”), and applicable federal and Delaware law.
There are no material differences between the rights of shareholders under the governing state laws of MDP and NSIT although there are some differences in the rights provided for in the respective governing
instruments of these entities, certain of which are described below. This summary is not intended to be a complete list of similarities and differences and is qualified in its entirety by reference to the documents themselves. Shareholders should
refer to the provisions of these documents and to state law directly for a more thorough comparison. Copies of each of these documents are available to shareholders without charge upon written request.
NSIT Trust Instrument vs. MDP Trust Instrument
| • |
The NSIT Trust Instrument permits the trustees to dissolve the NSIT, any series of shares and any class of shares, at any time without shareholder approval. The MDP Trust Instrument permits the trustees to dissolve MDP, any portfolio or
class without shareholder approval upon sixty (60) days prior written notice to the shareholders.
|
| • |
The NSIT Trust Instrument provides that any trustee may be removed by action of two-thirds of the trustees with or without cause and that a trustee may be removed with or
without cause at any shareholder meeting by a vote of two-thirds of the total combined net asset value of all shares then issued and outstanding. The MDP Trust Instrument provides that, subject to the requirements of Section 16(a) of the
1940 Act, the board of trustees may remove a trustee, with or without cause, by action of a majority of the trustees at a duly constituted meeting. The MDP Instrument further
provides that a trustee may be removed at any shareholder meeting by a vote of two-thirds of the outstanding shares.
|
| • |
The NSIT Trust Instrument states that the number of trustees shall at all times be at least one (1). The MDP Trust Instrument states that the number of trustees shall in no event be less than one (1) nor more than fifteen (15).
|
-17-
NSIT Bylaws vs. MDP By-Laws
| • |
The NSIT Bylaws require that written notice of a shareholder meeting shall be given not less than ten (10) days (or such other number of days as the board of trustees shall
determine in its own discretion) before the date of the meeting. The MDP By-Laws require that written notice of a shareholder meeting must be given not less than seven (7) days before
the date of the meeting.
|
| • |
Under the MDP By-Laws, the trustees shall call a meeting of the shareholders for the purpose of voting upon the question of removal of one or more trustees upon the written notice of the holders of not less than ten percent (10%) of the
outstanding shares. The NSIT Bylaws do not contain a similar provision.
|
EXPENSES OF THE REORGANIZATION
The Adviser will bear all expenses associated with the Reorganization, regardless of whether or not the Reorganization is consummated with respect to the Acquired Fund, including, without limitation, (1) costs
associated with preparing and filing the Acquired Fund’s prospectus supplements and the Registration Statement, and printing and distributing the Acquiring Fund’s prospectus and the Acquired Fund’s Proxy Statement, (2) legal and accounting fees,
(3) expenses associated with holding the Meeting and any special meetings or portions of meetings of the NSIT Board or Trustees and MDP Board of Trustees in connection with the Reorganization, (4) proxy tabulation and solicitation costs, and (5)
other related administrative or operational costs. EQ Fund Solutions has been engaged to provide tabulation and solicitation services, which are estimated to cost approximately $8,000.
FEDERAL INCOME TAX CONSEQUENCES
Federal Income Taxes. The following is a general summary of the material federal income tax consequences of the Reorganization and is based upon the current provisions of the
Code, the existing U.S. Treasury Regulations thereunder, current administrative rulings of the Internal Revenue Service (“IRS”) and published judicial decisions, all of which are subject to change. Administrative changes, new legislation, or court
decisions may significantly change the conclusions summarized below, and may have retroactive effect with respect to the Reorganization. The summary does not address all of the federal income tax consequences that may be relevant to a particular
shareholder or to shareholders who may be subject to special treatment under federal income tax laws.
The Reorganization is intended to qualify for federal income tax purposes as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code. In general, the Acquired Fund will neither recognize gain
or loss as a consequence of the Reorganization, nor will the shareholders of the Acquired Fund recognize gain or loss as a result of the Acquired Fund’s distribution of the Acquiring Fund’s shares to its shareholders in exchange for such
shareholder’s Acquired Fund’s shares. In addition, a shareholder’s tax basis for shares held in the Acquired Fund will carry over to the shares of the Acquiring Fund acquired in the Reorganization, and the holding period for shares held as a
capital asset also will carry over to the Acquiring Fund shares received in the Reorganization.
-18-
As a condition of the closing of the Reorganization, the Acquired Fund and the Acquiring Fund will receive an opinion from Seward & Kissel LLP substantially to the effect that, as further described below, on the
basis of existing provisions of the Code, U.S. Treasury regulations issued thereunder, current administrative rules, pronouncements and court decisions, for U.S. federal income tax purposes:
| • |
The Reorganization will constitute a “reorganization” under Section 368(a)(1)(F) of the Code, and the Acquired Fund and the Acquiring Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code;
|
| • |
Under Sections 361 and 357 of the Code, no gain or loss will be recognized by the Acquired Fund upon (i) the transfer of all of the Acquired Fund’s assets to the Acquiring Fund in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of all the known and existing liabilities of the Acquired Fund or (ii) the distribution of shares of the Acquiring Fund by the Acquired Fund to the Acquired Fund’s shareholders in complete liquidation of the
Acquired Fund, except that the Acquired Fund may be required to recognize gain or loss with respect to (A) contracts described in Section 1256(b) of the Code, (B) stock in a passive foreign investment company, as defined in Section 1297(a)
of the Code, or (C) any other gain or loss required to be recognized upon the termination of a position, or upon the transfer of such asset regardless of whether such a transfer would otherwise be a nontaxable transaction under the Code;
|
| • |
Under Section 1032 of the Code, no gain or loss will be recognized by the Acquiring Fund upon receipt of the assets of the Acquired Fund in exchange for shares of the Acquiring Fund and the assumption by the Acquiring Fund of all known
and existing liabilities of the Acquired Fund;
|
| • |
Under Section 354 of the Code, no gain or loss will be recognized by the shareholders of the Acquired Fund upon the distribution to them by the Acquired Fund of the shares of the Acquiring Fund in exchange for their shares of the
Acquired Fund in complete liquidation of the Acquired Fund;
|
| • |
Under Section 358 of the Code, the basis of shares of the Acquiring Fund received by shareholders of the Acquired Fund in connection with the Reorganization will be the same as the basis of the Acquired Fund shares exchanged therefor by
shareholders of the Acquired Fund;
|
| • |
Under Section 362(b) of the Code, the basis of the Acquired Fund’s assets received by the Acquiring Fund in the Reorganization will be the same in the hands of the Acquiring Fund as the basis of such assets in the hands of the Acquired
Fund immediately prior to the transfer, adjusted for any gain or loss required to be recognized in the second bullet point above;
|
| • |
Under Section 1223(1) of the Code, each Acquired Fund shareholder’s holding period in the shares of the Acquiring Fund received in the Reorganization will be determined by including the period for which the Acquired Fund shareholder held
the shares of the Acquired Fund exchanged therefor, provided that the Acquired Fund shareholder held such shares of the Acquired Fund as a capital asset at the time of the exchange;
|
| • |
Under Section 1223(2) of the Code, the holding period of the Acquiring Fund with respect to the Acquired Fund’s assets transferred to the Acquiring Fund in the Reorganization, other than any asset with respect to which gain or loss is
required to be recognized as described in the second bullet point above, will include the period for which the Acquired Fund’s assets were held by the Acquired Fund; and
|
| • |
The Acquiring Fund will succeed to and take into account those tax attributes of the Acquired Fund that are described in Section 381(c) of the Code, subject to the conditions and limitations specified in the Code, the regulations
thereunder, and existing court decisions and published interpretations of the Code and regulations.
|
-19-
| • |
The consummation of the Reorganization will not terminate the taxable year of the Acquired Fund for federal income tax purposes, aside from any elective change in the taxable year of the Acquiring Fund. The part of the taxable year of
the Acquired Fund before the Reorganization and part of the taxable year of the Acquiring Fund after the Reorganization will constitute a single taxable year of the Acquiring Fund.
|
The opinion will be based on certain factual certifications made by the officers of the Acquired Fund and the Acquiring Fund and will also be based on customary assumptions. It is possible that the IRS or a court
could disagree with Seward & Kissel LLP’s opinion, which therefore cannot be free from doubt.
An opinion of counsel is not binding upon the IRS or the courts. If the Reorganization was consummated but did not qualify as a tax-free reorganization under the Code, a shareholder of the Acquired Fund would
recognize a taxable gain or loss equal to the difference between his or her tax basis in his or her Acquired Fund shares and the fair market value of the shares of the Acquiring Fund he or she received. Shareholders of the Acquired Fund should
consult their tax advisors regarding the effect, if any, of the Reorganization in light of their individual circumstances.
This description of the U.S. federal income tax consequences of the Reorganization is made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their tax
advisors regarding the effect, if any, of the Reorganization in light of their individual circumstances. Because the foregoing discussion relates only to the U.S. federal income tax consequences of the Reorganization, shareholders of the Acquired
Fund should also consult their tax advisors as to the state, local and foreign tax consequences, if any, of the Reorganization.
State and Local Taxes. You should consult your tax adviser regarding the effect, if any, of the proposed Reorganization in light of your individual circumstances. Since the
foregoing discussion relates only to the federal income tax consequences of the Reorganization, you should also consult your tax adviser as to state and local tax consequences, if any, of the Reorganization.
Cost Basis Reporting. Federal law requires that mutual fund companies report their shareholders’ cost basis, gain/loss, and holding period to the IRS on their shareholders’
Consolidated Form 1099s when “covered” securities are sold. Covered securities are any regulated investment company and/or dividend reinvestment plan shares acquired on or after January 1, 2012. Like the Acquired Fund, the Acquiring Fund has chosen
average cost as its standing (default) tax lot identification method for all shareholders. A tax lot identification method is the way the Acquiring Fund will determine which specific shares are deemed to be sold when there are multiple purchases on
different dates at differing NAVs, and the entire position is not sold at one time. The Acquiring Fund’s standing tax lot identification method is the method used for covered shares reported on your Consolidated Form 1099 if you do not select a
specific tax lot identification method. You may choose a method different than the Acquiring Fund’s standing method and will be able to do so at the time of your purchase or upon the sale of covered shares. Please refer to the appropriate Treasury
Regulations or consult your tax advisor with regard to your personal circumstances. For those securities defined as “covered” under current cost basis tax reporting Treasury Regulations, the Acquiring Fund is responsible for maintaining accurate
cost basis and tax lot information for tax reporting purposes. The Acquiring Fund is not responsible for the reliability or accuracy of the information for those securities that are not “covered”. The Acquiring Fund and its service providers do not
provide tax advice. You should consult independent sources, which may include a tax professional, with respect to any decisions you may make with respect to choosing a tax lot identification method.
OTHER INFORMATION
-20-
Operation of the Acquired Fund. The principal executive offices of the MDP Board are located at 615 East Michigan Street, Milwaukee, Wisconsin 53202. The MDP Board supervises
the business activities of the Acquired Fund.
The Proxy. The MDP Board is soliciting proxies so that each shareholder has the opportunity to vote on the proposal 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 will be voted for approval of
each proposal described in this Proxy Statement and at the discretion of the holders of the proxy on any other matter that may come properly 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 Secretary of MDP revoking the proxy, or (3) attending and voting at the Meeting.
Voting Securities and Voting. Shareholders of record of the Acquired Fund at the close of business on December 22, 2023 (“Record Date”), are entitled to vote at the Meeting or at any adjournments
thereof. As of [ ], the Acquired Fund had [ ] shares outstanding and entitled to vote at the Meeting.
Shareholders are entitled to one vote for each share held and a proportionate vote for each fractional share held. Shareholders of the Acquired Fund will vote on the proposed Reorganization. The presence at the
Meeting of holders of 40% of the outstanding shares of the Acquired Fund entitled to vote, at the Meeting or by proxy, shall constitute a quorum for the Meeting for the Acquired Fund. A quorum being present, the Acquired Fund will adopt a proposal
if a majority of the outstanding voting securities as defined under the 1940 Act (i.e., the lesser of either (i) 67% or more of the applicable voting securities present at the Meeting, if the holders of more than 50% of the outstanding and
applicable voting securities of the Acquired Fund are present or represented by proxy or (ii) more than 50% of the outstanding and applicable voting securities of the Acquired Fund) approve the Reorganization proposal.
For purposes of determining the presence of a quorum for transacting business at the Meeting or any adjournment(s) or postponement(s) thereof, executed proxies marked as abstentions will be treated as shares that
are present, but not as votes cast, at the Meeting. The affirmative vote necessary to approve the Reorganization proposal will be determined with reference to a percentage of shares outstanding or present at the Meeting, which has the effect of
treating abstentions as votes counted toward establishing quorum but as votes against the proposal with regard to the Acquired Fund. Due to the nature of the proposal at the Meeting being “non-routine” matter,
there will not be any “broker non-votes” (that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other person entitled to vote shares on a particular matter with respect
to which the broker or nominees do not have discretionary power) at the Meeting.
If, with respect to the Acquired Fund, either (a) a quorum is not present at the Meeting, or (b) a quorum is present but sufficient votes in favor of the proposal have not been obtained, then the persons named as
proxies may propose and vote for one or more adjournments of the Meeting with respect to the Acquired Fund, without further notice to the shareholders of the Acquired Fund, to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares affected by the adjournment that are represented at the Meeting in person or by proxy. The persons named as proxies will vote those proxies which they are entitled to vote for the proposal
in favor of such adjournments, and will vote those proxies required to be voted against the proposal against any such adjournment.
With respect to the Acquired Fund, the Meeting may be adjourned from time-to-time by the vote of a majority of the shares represented at the Meeting, whether or not a quorum is present. If the 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.
-21-
The individuals named as proxies on the enclosed proxy card will vote in accordance with the shareholder’s direction, as indicated thereon, if the proxy card is received and is properly executed. If the shareholder
properly executes a proxy and gives no voting instructions with respect to a proposal, the shares will be voted in favor of such proposal. The proxies, in their discretion, may vote upon such other matters as may properly come before the Meeting.
The MDP Board is not aware of any other matters to come before the Meeting.
Solicitation of Proxies. EQ Fund Solutions has been engaged to provide tabulation and solicitation services for an approximate cost of $8,000. EQ Fund Solutions may solicit
proxies by mail, telephone, e-mail, or the Internet. Employees of the Adviser may make additional solicitations by mail, telephone, e-mail, or the Internet to obtain the necessary shareholder representation at the Meeting but will receive no
additional compensation for doing so.
Shareholder Proposals. The Acquired Fund does not hold annual shareholder meetings. Shareholders wishing to submit proposals for inclusion in a proxy statement for a
shareholder meeting should send their written proposals to the Secretary of MDP, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. Proposals must be received a reasonable time before MDP begins to print and send its
proxy materials to be considered for inclusion in the proxy materials for the Meeting. Any shareholder proposal that is not submitted a reasonable time before MDP sends out its proxy materials will be considered untimely and will not be included in
the proxy materials. Timely submission of a proposal does not, however, necessarily mean the proposal will be included.
Proxy Delivery/Householding. If possible, depending on shareholder registration and address information, and unless you have otherwise opted out, only one copy of this Proxy
Statement will be sent to shareholders at the same address. However, each shareholder will receive a separate Proxy Card. If you would like to receive a separate copy of the Proxy Statement, please call 1-844-2SPHERE or write to the Sphere 500
Climate Fund c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. If you currently receive multiple copies of proxy statements or shareholder reports and would like to request to receive a single copy of documents in
the future, please call the toll-free number or write to the address above.
Certain Information Regarding the NSIT Trustees
The NSIT Board consists of trustees different than the trustees that currently oversee the operations of the Acquired Fund. The current trustees and officers of NSIT and their years of birth are listed below with
their addresses, present positions with NSIT, term of office with NSIT and length of time served, principal occupations over at least the last five years and other directorships/trusteeships held.
-22-
|
Name, Addressa,
Year of Birth and
Position(s) with
the Trust
|
Position with
the Trust
|
Term of
Office and
Length of
Time Servedb
|
Principal Occupations
During the Past
Five Years or Longer
|
Number of
Portfolios in
Fund Complex
Overseen by Trusteec
|
Other Directorship/
Trusteeship Positions
held by Trustee During
the Past 5 Years
|
|
Independent Trustees
|
|||||
|
David B. Boon (1960)
|
Trustee
|
08/2018 to present
|
Chief Financial Officer and Managing Director, Eagle Capital Management, LLC (since 2018); Chief Financial Officer and Partner, Cedar Capital, LLC (2013 – 2018).
|
12
|
None
|
|
Donald J. Herrema (1952)
|
Chairman of the Board and Trustee
|
08/2018 to present
|
Vice Chair and Chief Investment Officer, Independent Life Insurance Company (since 2018); Financial Services Executive, Advisor and Founder of BlackSterling Partners, LLC (private investments and advisory firm) (since 2004.
|
12
|
Chairman and Director Emeritus, TD Funds USA (2009 - 2019); Director, Abel Noser Holdings, LLC (since 2016); Member, USC Marshall Business School Board (since 2010); Director, FEG Investment Advisors (since 2017); Director, Independent
Life Insurance Company (since 2018); and Director, Independent Insurance Group (since 2023).
|
|
Catherine A. Zaharis (1960)
|
Trustee
|
08/2018 to present
|
Professor of Practice (since 2019), Director, Professional/ Employer Development, Finance Department (2015 - 2019), Adjunct Lecturer (2010 - 2019), and Business Director, MBA Finance Career Academy (2008 – 2015), University of Iowa,
Tippie College of Business; Chair (2013 – 2016), Director (1999 – 2016), and Investment Committee Member (1999 – 2013) and Chair (2003 – 2013), University of Iowa Foundation.
|
12
|
Director, The Vantagepoint Funds (2015 – 2016).
|
-23-
|
Name, Addressa,
Year of Birth and
Position(s) with
the Trust
|
Position with
the Trust
|
Term of
Office and
Length of
Time Servedb
|
Principal Occupations
During the Past
Five Years or Longer
|
Number of
Portfolios in
Fund Complex
Overseen by Trusteec
|
Other Directorship/
Trusteeship Positions
held by Trustee During
the Past 5 Years
|
|
Interested Trusteed
|
|||||
|
Ian Martin (1968)
|
Trustee and President
|
05/2023 to present
|
Executive Vice President, Chief Administrative Officer of Ultimus Fund Solutions, LLC (2019 – present); Executive Vice President (1992 – 2019), U.S. Bank Global Fund Services.
|
12
|
None
|
|
Officers of the Trust
|
|||||
|
Zachary P. Richmond (1980)
|
Treasurer
|
05/2023 to present
|
Vice President, Director of Financial Administration of Ultimus Fund Solutions, LLC (2015 – present).
|
N/A
|
N/A
|
|
Karen Jacoppo-Wood
(1966)
|
Secretary
|
05/2023 to present
|
Senior Vice President and Associate General Counsel of Ultimus Fund Solutions, LLC (2022 – present); Managing Director and Managing Counsel of State Street Bank and Trust Company (2019 – 2022) (Vice President and Managing Counsel from
2014 – 2019).
|
N/A
|
N/A
|
-24-
|
Name, Addressa,
Year of Birth and
Position(s) with
the Trust
|
Position with
the Trust
|
Term of
Office and
Length of
Time Servedb
|
Principal Occupations
During the Past
Five Years or Longer
|
Number of
Portfolios in
Fund Complex
Overseen by Trusteec
|
Other Directorship/
Trusteeship Positions
held by Trustee During
the Past 5 Years
|
|
Martin R. Dean (1963)
|
Chief Compliance Officer
|
05/2023 to present
|
President of Northern Lights Compliance Services, LLC (January 2023 – present); Senior Vice President, Head of Fund Compliance (2020 – January 2023) of Ultimus Fund Solutions, LLC (Vice President and Director of Fund Compliance from 2016
– 2020).
|
N/A
|
N/A
|
| a. |
The business address of each trustee and officer is North Square Investments Trust, c/o Ultimus Fund Solutions, LLC, 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246.
|
| b. |
Trustees and officers serve until their successors are duly elected and qualified.
|
| c. |
The term “Fund Complex” applies to the twelve portfolios that currently comprise NSIT.
|
| d. |
Mr. Martin is considered to be an “interested person” of the NSIT as that term is defined in the 1940 Act by virtue of his positions with the administrator, transfer agent and fund accountant.
|
SECURITY OWNERSHIP
Security Ownership of Management and Certain Beneficial Owners. The following table provides information on shareholders who owned of record or, to the knowledge of the
Acquired Fund, beneficially, more than 5% of the Acquired Fund’s outstanding shares as of the Record Date. As of the Record Date, and except as noted in the table below, MDP knows of no person (including any “group” as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) that beneficially owns more than 5% of the Acquired Fund.
As of [ ], the following persons owned 5% or more of the Acquired Fund’s outstanding shares.
|
Name and Address of Beneficial Owner*
|
Number of Shares
|
Percentage of Shares Owned
|
* Each entity set forth in this column is the shareholder of record and may be deemed to be the beneficial owner of certain of the shares listed for certain purposes under the securities laws, although certain of the
entities generally do not have an economic interest in these shares and would ordinarily disclaim any beneficial ownership.
As of the Record Date, no shareholder of the Acquired Fund would be deemed to be a “control person” (as that term is defined in the 1940 Act) of the Acquired Fund because it beneficially owns, directly or indirectly,
more than 25% of the outstanding shares of the Acquired Fund, by virtue of its fiduciary roles with respect to its clients or otherwise. A control person may be able to facilitate shareholder approval of proposals it favors and to impede
shareholder approval of proposals it opposes. In this regard, if a control person owns a sufficient number of the Acquired Fund’s outstanding shares, then, for certain shareholder proposals, such control person may be able to approve, or to prevent
approval, of such proposals without regard to votes by other Acquired Fund shareholders.
-25-
Security Ownership of Management. As of the Record Date, no Trustees or officers of the Trust beneficially owned shares of the Acquired Fund, therefore, the Trustees and
officers, as a group, beneficially owned less than 1% of the outstanding shares of the Acquired Fund. During the two most recently completed calendar years, neither the Independent Trustees of MDP, nor an immediate family member of such Independent
Trustee, has owned securities beneficially, or of record, in the Adviser, the Distributor or any of their affiliates. Accordingly, neither the Independent Trustees of MDP, nor any of their immediate family members, has or had a direct or indirect
interest, the value of which exceeds $120,000, in the Adviser, the Distributor or any of their affiliates.
AVAILABLE INFORMATION
MDP and NSIT are subject to the requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act, and in accordance therewith, file reports, proxy materials, and other information about each of the
Funds with the SEC. Reports and other information about the Funds are available on the EDGAR database on the SEC’s Internet site located at http://www.sec.gov. Alternatively, copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request to the following e-mail address: publicinfo@sec.gov.
FINANCIAL HIGHLIGHTS
Following the Reorganization, the Acquired Fund will be the accounting survivor. The Acquired Fund’s audited financial highlights were derived from financial statements audited by Cohen & Company, Ltd. and, to
the extent applicable, BBD, LLP (prior to its acquisition by Cohen & Company, Ltd. on March 6, 2023) (together, the “Auditor”), the Acquired Fund’s independent registered public accounting firm, whose report, along with the Acquired Fund’s
financial statements and notes thereto, are included in the Acquired Fund’s September 30, 2023 Annual Report. The audited financial statements and related report of the Auditor from the Acquired Fund’s September 30, 2023 Annual Report are
incorporated by reference herein.
-26-
APPENDIX
AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION (“Reorganization Agreement”) is made as of this day of , by and between North Square Investments Trust, a Delaware statutory trust (“Acquiring Trust”), on behalf of Sphere 500 Climate Fund (a newly created separate
series of the Acquiring Trust, the “Acquiring Fund”); Manager Directed Portfolios, a Delaware statutory trust (“Selling Trust”), separately on behalf of Sphere 500 Climate Fund (an existing
separate series of the Selling Trust, the “Acquired Fund”) (the Acquiring Fund and Acquired Fund are sometimes referred to herein individually as a “Fund” and collectively as the “Funds”); and Reflection Asset Management, LLC,
a South Carolina limited liability company (“Adviser”), the existing investment adviser for the Acquired Fund and proposed investment adviser for the Acquiring Fund (only for purposes of Sections 1.10, 4.2, 4.4, 5.11, 6.4, 7.4, 9.1 and 10.2
of this Reorganization Agreement).
BACKGROUND
This Reorganization Agreement is intended to be and is adopted as a plan of “reorganization” within the meaning of Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (“Code”), and the Treasury Regulations promulgated thereunder. The reorganization (as defined below) will consist of: (a) the transfer of all the assets of the Acquired Fund to the Acquiring Fund (as set forth in Exhibit
A hereto), in exchange solely for shares of beneficial interest, no par value per share, of the Acquiring Fund (“Acquiring Fund Shares”) and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund; and (b) the
pro rata distribution of all the shares of the Acquiring Fund to the shareholders of the Acquired Fund (as calculated pursuant to this Reorganization Agreement), and the termination, dissolution and complete liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions set forth in this Reorganization Agreement (the “Reorganization”).
* * * * *
WHEREAS, the Acquiring Fund is a separate series of the Acquiring Trust, the Acquired Fund is an existing, separate series of the Selling Trust, the Acquiring Trust and the Selling Trust are
open-end management investment companies registered under the Investment Company Act of 1940, as amended (“1940 Act”), and the Acquired Fund owns portfolio securities that generally are assets of the type in which the Acquiring Fund will be
permitted to invest;
WHEREAS, the Acquiring Fund has been organized to continue the business and operations of the Acquired Fund;
WHEREAS, the Acquiring Fund is authorized to issue the Acquiring Fund Shares;
WHEREAS, the Acquiring Fund currently has no assets and has carried on no business activities prior to the date first written above and will have no assets and will have carried on no business
activities prior to the consummation of the Reorganization, except as necessary to effect the Reorganization and to issue the Initial Shares (as defined in Section 1.10 of this Reorganization Agreement) as part of the organization of the
Acquiring Fund;
WHEREAS, the Board of Trustees of the Acquiring Trust, including a majority of the trustees who are not “interested persons” of the Acquiring Trust as that term is defined in Section 2(a)(19) of
the 1940 Act (the “Independent Trustees”), has determined that the Reorganization is in the best interests of the Acquiring Fund; and
-27-
WHEREAS, the Board of Trustees of the Selling Trust, including a majority of its Independent Trustees, has determined that the Reorganization is in the best interests of the Acquired Fund and that
the interests of the existing shareholders of the Acquired Fund will not be diluted as a result of the Reorganization.
NOW, THEREFORE, in consideration of the premises and of the covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound hereby, covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND THE ASSUMPTION OF THE
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND THE ASSUMPTION OF THE
ACQUIRED FUND’S LIABILITIES, AND TERMINATION AND
LIQUIDATION OF THE ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein and on
the basis of the representations, warranties and covenants contained herein, the Acquired Fund agrees to transfer all its assets, as set forth in Section 1.2 of this Reorganization Agreement, to the Acquiring Fund. In consideration for such
transfer, the Acquiring Fund agrees (a) to deliver to the Acquired Fund the number of full and fractional Acquiring Fund Shares computed in the manner set forth in Section 2.3 of this Reorganization Agreement; and (b) to assume all the
liabilities of the Acquired Fund, as set forth in Section 1.3 of this Reorganization Agreement. All Acquiring Fund Shares delivered to the Acquired Fund shall be delivered at net asset value (“NAV”) without a sales load, commission or other
similar fee being imposed. Such transactions shall take place at the closing provided for in Section 3.1 of this Reorganization Agreement (“Closing”).
1.2 ASSETS TO BE TRANSFERRED. The Acquired Fund shall transfer all its assets to
the Acquiring Fund, including, without limitation, all cash, securities, commodities, interests in futures and dividends or interest receivables, owned by the Acquired Fund and any deferred or prepaid expenses shown as an asset on the books of
the Acquired Fund on the Closing Date (as defined in Section 3.1 of this Reorganization Agreement).
1.3 LIABILITIES TO BE ASSUMED. The Acquired Fund will undertake, consistent with
its obligation to continue to pursue its investment objective and employ its investment strategies in accordance with the terms of its Prospectus, to discharge all its known liabilities and obligations to the extent possible before the Closing
Date, other than those liabilities and obligations which otherwise would be discharged at a later date in the ordinary course of business or any liabilities or obligations that are intended to be assumed and paid by another person or entity
(including the Adviser) and those liabilities incurred in the ordinary course of business that are associated with the assets to be transferred. Notwithstanding the foregoing, the Acquiring Fund shall assume all liabilities of the Acquired Fund.
1.4 LIQUIDATION AND DISTRIBUTION. As soon as reasonably practicable after the
Closing:
(a) The Acquired Fund will distribute all of the Acquiring Fund Shares received
by the Acquired Fund pursuant to Section 1.1 of this Reorganization Agreement to its shareholders of record, determined as of the close of business on the Valuation Date (as defined in Section 2.1 of this Reorganization Agreement) (“Acquired Fund
Shareholders”), in proportion to their Acquired Fund shares then held of record and in exchange therefor. Such distribution shall be accomplished by the Acquiring Trust’s transfer agent’s opening accounts on the Acquiring Fund’s shareholder
records in the Acquired Fund Shareholders’ names and transferring those Acquiring Fund Shares thereto. The Acquired Fund Shareholder’s account shall be credited with the pro rata number of full and fractional Acquiring Fund Shares having an
aggregate NAV equal to the aggregate NAV of the Acquired Fund shares that the Acquired Fund Shareholder holds at the Valuation Date. All issued and outstanding shares of the Acquired Fund will simultaneously be canceled on its books. The
Acquiring Fund shall not issue certificates representing Acquiring Fund Shares in connection with such transfer; and
-28-
(b) The Acquired Fund will thereupon promptly proceed to dissolve and terminate
as set forth in Section 1.8 of this Reorganization Agreement.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be shown on the
books and records of the Acquiring Fund’s transfer agent. Shares of the Acquiring Fund will be issued at the Closing to the Acquired Fund, in an amount computed in the manner set forth in Section 2.3 of this Reorganization Agreement, to be
distributed to the Acquired Fund Shareholders.
1.6 STATE FILINGS. Promptly following the Closing Date, the Selling Trust, on
behalf of the Acquired Fund (a) shall make any filings with the State of Delaware that may be required under state law to cause, implement and complete the termination of the Acquired Fund, and (b) with respect to periods ending prior to the
Closing Date, shall file tax returns with the State of Delaware and other jurisdictions to the extent required under applicable law, as well as any other required filing by any governmental or regulatory authority. For the avoidance of doubt, any
tax returns or other filings required under applicable law for periods ending after the Closing shall be the responsibility of the Acquiring Trust on behalf of the Acquiring Fund.
1.7 TRANSFER TAXES. Any transfer taxes payable upon the issuance of Acquiring
Fund Shares in a name other than the registered holder of the Acquired Fund shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are
to be issued and transferred.
1.8 TERMINATION. The Acquired Fund shall be dissolved, terminated and have its
affairs wound up in accordance with Delaware state law, as soon as practicable following the Closing Date and the making of all distributions pursuant to Section 1.4 of this Reorganization Agreement (but in no event later than six (6) months
after the Closing Date). After the Closing Date, the Acquired Fund shall not conduct any business except in connection with its dissolution or as otherwise contemplated hereby.
1.9 BOOKS AND RECORDS. All books and records of the Acquired Fund, including all
books and records required to be maintained under the 1940 Act and the rules and regulations thereunder, shall be made available to the Acquiring Fund from and after the Closing Date and copies thereof shall be provided to the Acquiring Fund as
soon as practicable following the Closing Date. The Acquiring Fund shall maintain all books and records relating to the Reorganization for the time periods required under applicable law.
1.10 INITIAL SHARES. Prior to the Closing, the Acquiring Fund will only issue
initial shares (the “Initial Shares”) to the Adviser or an affiliate thereof (“Sole Shareholder”), for the sole purpose of allowing the Sole Shareholder to approve certain organizational items on behalf of the Acquiring Fund. The Initial Shares
shall be redeemed and cancelled by the Acquiring Fund in exchange for the same value per share immediately prior to the Closing.
1.11 PERFORMANCE SURVIVOR. The Acquired Fund shall be the performance survivor in
the Reorganization, with the result that the Acquiring Fund, as the surviving fund in the Reorganization, will assume the performance history of the Acquired Fund.
ARTICLE II
VALUATION
VALUATION
2.1 VALUATION OF ASSETS AND LIABILITIES. The value of the Acquired Fund’s net
assets shall be the value of all of the Acquired Fund’s assets computed as of the close of regular trading on the New York Stock Exchange (“NYSE”) on the business day prior to the Closing Date (such time and date being hereinafter called the
“Valuation Date”) less the amount of all of the Acquired Fund’s liabilities as of the Valuation Date. The value of the Acquired Fund’s assets and liabilities shall be determined by using the valuation procedures set forth in the Acquired Fund’s
Valuation Policy and Procedures and the Acquired Fund’s then-current prospectus and statement of additional information, or such other valuation procedures as may be mutually agreed upon by the parties. The aggregate net asset value of the shares
of the Acquiring Fund Shares shall be the aggregate net asset value of the Acquired Fund computed on the Valuation Date, using the valuation procedures set forth above.
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2.2 VALUATION OF SHARES. The NAV per share for the shares of the Acquiring Fund
shall be equal to the NAV per share for the Acquired Fund computed on the Valuation Date, using the valuation procedures set forth in Section 2.1 of this Reorganization Agreement.
2.3 SHARES TO
BE ISSUED. The number of full and fractional shares to be issued by the Acquiring Fund in exchange for the net assets of the Acquired Fund shall be equal to the number of full and fractional shares of the Acquired Fund issued and outstanding
on the Valuation Date, calculated to the third decimal place after the decimal point. Each shareholder of the Acquired Fund will receive the number of full and fractional shares of shares of the Acquiring Fund equal to the number of shares of
the Acquired Fund held by that shareholder immediately prior to the Reorganization, calculated to the third decimal place after the decimal point.
2.4 EFFECT OF
SUSPENSION IN TRADING. The Valuation Date and Closing Date (as defined in Section 3.1 of this Reorganization Agreement) shall be postponed, if on the Valuation Date, either:
(a) the NYSE or another primary exchange on which the portfolio securities of the Acquiring Fund or Acquired Fund are purchased or sold, shall be closed to trading or trading on
such exchange shall be restricted; or
(b) trading or the reporting of trading on the NYSE or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquiring Fund or Acquired
Fund is impracticable as mutually agreed upon by the parties.
The postponement shall continue until the first business day after the day when trading is fully resumed and reporting is restored.
2.5 DETERMINATION
OF VALUE. All computations of value shall be made by U.S. Bank Global Fund Services (“Fund Services”), the Acquired Fund’s administrator, in accordance with its regular practice in pricing the shares and assets of the Acquired Fund and
confirmed by Ultimus Fund Solutions, LLC (“Ultimus”), the Acquiring Fund’s accounting agent. In the case of differences in valuation, the parties shall agree to discuss such differences in good faith to attempt to resolve such differences by
the Closing Date.
ARTICLE III
CLOSING AND CLOSING DATE
CLOSING AND CLOSING DATE
3.1 CLOSING
DATE. The Closing shall occur on [Monday], February [_ ____], 2024 or such other date as the parties may agree in writing (“Closing Date”). Unless otherwise provided, all acts taking place at the Closing shall be deemed to take place
immediately after the close of regular trading on the NYSE on the Valuation Date. The Closing shall be held as soon as practicable after the close of regular trading on the NYSE on the Closing Date at the offices of Ultimus in Cincinnati, Ohio
or at such other time and/or place as the parties may agree.
3.2 CUSTODIAN’S
CERTIFICATE. The Acquired Fund shall cause U.S. Bank, N.A., as custodian for the Acquired Fund (“Custodian”), to deliver to the Acquiring Fund at the Closing a certificate of an authorized officer stating
that (a) the Acquired Fund’s portfolio securities, cash, and any other assets shall have been delivered in proper form to the Acquiring Fund on the Closing Date; and (b) all necessary taxes including all applicable U.S. federal and state stock
transfer stamps, if any, shall have been paid, or provision for payment shall have been made, in conjunction with the delivery of portfolio securities by the Acquired Fund. The Acquired Fund’s portfolio securities represented by a certificate
or other written instrument shall be presented by the Custodian for the Acquired Fund to the custodian for the Acquiring Fund for examination no later than ten (10) business days preceding the Closing Date and transferred and delivered by the
Acquired Fund as of the Closing Date for the account of the Acquiring Fund, duly endorsed in proper form for the transfer in such condition so as to constitute good delivery thereof.
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3.3 TRANSFER
AGENT’S CERTIFICATE. The Acquired Fund shall cause Fund Services, as transfer agent for the Acquired Fund (“Acquired Fund Transfer Agent”), to deliver to the Acquiring Fund at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders, and the number and percentage ownership of outstanding shares owned by each such shareholder immediately prior to the Closing. The Acquiring Fund shall issue and deliver
or cause Ultimus, its transfer agent, to issue and deliver to the Secretary of the Selling Trust at the Closing (a) a certificate as to the opening of accounts in the Acquired Fund Shareholders’ names on the Acquiring Fund’s share transfer
books; and (b) a confirmation evidencing the Acquiring Fund Shares to be credited at the Closing or evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund’s account on the books of the
Acquiring Fund.
3.4 DELIVERY
OF ADDITIONAL ITEMS. At the Closing, each party shall deliver to the other party such bills of sale, checks, assignments, share certificates, receipts and other documents, if any, as such other party or its counsel may reasonably request to
effect and document the transactions contemplated by this Reorganization Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS
OF THE ACQUIRED FUND. The Selling Trust, on behalf of the Acquired Fund, represents and warrants to the Acquiring Fund as follows:
(a) The
Selling Trust is a statutory trust, duly organized, validly existing and in good standing under the laws of the State of Delaware.
(b) The
Acquired Fund is a separate series of the Selling Trust and has been duly established in accordance with the applicable provisions of the Selling Trust’s Amended and Restated Agreement and Declaration of Trust.
(c) The
Selling Trust is registered as an open-end management investment company under the 1940 Act, and such registration has not been revoked or rescinded and is in full force and effect.
(d) The
Acquired Fund is not, and the execution, delivery, and performance of this Reorganization Agreement (subject to Acquired Fund shareholder approval) will not result, in a conflict with or a material violation of any provision of the Selling
Trust’s Amended and Restated Agreement and Declaration of Trust or Amended and Restated By-Laws (collectively, the “Selling Trust Governing Documents”) or of any material agreement, indenture, instrument, contract, lease, or other undertaking
to which the Selling Trust or Acquired Fund is a party or by which it is bound.
(e) Except
for conversion fees, if any, that may be paid to the Acquired Fund Transfer Agent and the Acquired Fund’s Custodian in connection with the Reorganization or as otherwise disclosed in writing to and accepted by the Acquiring Fund, the Acquired
Fund has no material contracts or other commitments (other than this Reorganization Agreement) that will be terminated with liability to the Acquired Fund before the Closing Date, except for liabilities, if any, to be discharged as provided in
Section 1.3 of this Reorganization Agreement.
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(f) No
litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Selling Trust or Acquired Fund or any of its properties or assets, which, if
adversely determined, would materially and adversely affect its financial condition, the conduct of its business, or the ability of the Selling Trust or Acquired Fund to carry out the transactions contemplated by this Reorganization Agreement.
Neither the Selling Trust nor the Acquired Fund is a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the
transactions contemplated hereby and, to the best knowledge of the Selling Trust or Acquired Fund, there is currently no formal or informal investigation or action that reasonably could lead to such a result.
(g) Financial
Statements.
(1) The
annual financial statements of the Acquired Fund for the most recently-ended fiscal year were prepared in accordance with generally accepted accounting principles and were audited by an independent registered public accounting firm, and such
statements (copies of which have been furnished to the Acquiring Fund) fairly reflect the financial condition of the Acquired Fund as of such period, and there are no known contingent liabilities of the Acquired Fund required to be reflected on
a balance sheet (including the notes thereto) in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) as of such date that are not disclosed in such statements.
(2) The
semi-annual financial statements of the Acquired Fund for the most recently ended semi-annual fiscal period ended were prepared in accordance with GAAP and such statements (copies of which have been furnished to the Acquiring Fund) fairly reflect
the financial condition of the Acquired Fund as of such period, and there are no known contingent liabilities of the Acquired Fund required to be reflected on a balance sheet (including the notes thereto) in accordance with GAAP as of such date
that are not disclosed in such statements.
(h) Since the
date of the financial statements referred to in Section 4.1(g) of this Reorganization Agreement, there have been no material adverse changes in the Acquired Fund’s financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business) and there are no known contingent liabilities of the Acquired Fund arising after such date, except as otherwise disclosed in writing to and accepted by the Acquiring Fund. For the purposes of this
Section 4.1(h) of this Reorganization Agreement, distributions of net investment income and net realized capital gains, changes in portfolio securities or other assets, a decline in the NAV of the Acquired Fund, or net redemptions shall not
constitute a material adverse change.
(i) All U.S.
federal, state, local and other tax returns and related reports of the Acquired Fund required by law to have been filed by the Acquired Fund (taking into account permitted extensions for filing) have been timely filed and are correct in all
material respects. All U.S. federal, state, local and other taxes required to have been paid (whether shown on any such return or report) have been paid, or provision shall have been made for the payment thereof and any such unpaid taxes are
properly reflected on the financial statements referred to in Section 4.1(g) of this Reorganization Agreement. To the best of the Acquired Fund’s knowledge, no tax authority is currently auditing or preparing to audit the Acquired Fund, and no
assessment for taxes, interest, additions to tax, or penalty has been asserted or threatened, in each case, in writing, against the Acquired Fund.
(j) All
issued and outstanding shares of the Acquired Fund are validly issued and fully paid and non-assessable, and purchasers of the shares will not have any obligation to make payments to the Selling Trust or its creditors (other than the purchase
price for the shares) or contributions to the Selling Trust or its creditors solely by reason of the purchasers’ ownership of the shares of the Acquired Fund. All the issued and outstanding shares of the Acquired Fund will, at the time of the
Closing, be held by the persons and in the amounts set forth in the records of the Acquired Fund Transfer Agent as provided in Section 3.3 of this Reorganization Agreement. The Acquired Fund has no outstanding options, warrants, or other rights
to subscribe for or purchase any shares of the Acquired Fund and has no outstanding securities convertible into shares of the Acquired Fund.
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(k) At the
time of the Closing, the Acquired Fund will have good and marketable title to the Acquired Fund’s assets to be transferred to the Acquiring Fund pursuant to Section 1.2 of this Reorganization Agreement, and possesses full right, power, and
authority to sell, assign, transfer, and deliver such assets, and, upon delivery and payment for such assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no other restrictions on the full transfer thereof,
including any such restrictions under the Securities Act of 1933, as amended (“1933 Act”).
(l) Other
than approval by the Acquired Fund Shareholders, the execution, delivery and performance of this Reorganization Agreement has been duly authorized by all necessary action on the part of the Acquired Fund and the Selling Trust’s Board of
Trustees. Subject to approval by the Acquired Fund Shareholders, this Reorganization Agreement constitutes the valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, bankruptcy,
insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights and to general equity principles.
(m) The
information to be furnished by the Acquired Fund for use in registration statements, proxy materials, applications for orders, no-action letters, and other documents that may be necessary in connection with the transactions contemplated herein
shall be accurate and complete in all material respects and shall comply in all material respects with applicable U.S. federal securities and other laws and regulations.
(n) The
current prospectus and statement of additional information of the Acquired Fund conform, in all material respects, to the applicable requirements of the 1933 Act, and the 1940 Act and the rules and regulations thereunder and do not include,
with respect to the Selling Trust or the Acquired Fund, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading.
(o) From the
date of the filing of the Proxy Statement (as defined in Section 5.7 of this Reorganization Agreement), through the time of the meeting of the Acquired Fund Shareholders (“Acquired Fund Meeting”) and on the Closing Date, any written information
furnished by the Acquired Fund for use in the Proxy Materials (as defined in Section 5.7 of this Reorganization Agreement), or any other materials provided in connection with the Reorganization, does not and will not contain, with respect to the Selling Trust or the Acquired Fund, any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances
under which such statements were made, not materially misleading.
(p) For each
taxable year of the Acquired Fund ending prior to the Closing Date, the Acquired Fund (i) has had in effect an election to qualify, and has qualified, as a “regulated investment company” under Subchapter M of the Code (“RIC”), (ii) has been
eligible to, and has computed, its U.S. federal income tax under Section 852 of the Code, and (iii) has been treated as a separate corporation for U.S. federal income tax purposes pursuant to Section 851(g) of the Code. The Acquired Fund has no
earnings and profits accumulated in any taxable year to which the provisions of Subchapter M of the Code (or the corresponding provision of prior law) did not apply to it. Subject to the accuracy of the representations set forth in Section
4.3(k) of this Reorganization Agreement the Acquired Fund expects to satisfy the applicable requirements for qualification as a RIC for the taxable year that includes the Closing Date. The Acquired Fund has not at any time since its inception
been liable for, and is not now liable for, any material income or excise tax pursuant to Section 852 or 4982 of the Code that remains unpaid.
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(q) No
governmental consents, approvals, authorizations or filings are required under the 1933 Act, the Securities Exchange Act of 1934, as amended (“1934 Act”), the 1940 Act or Delaware state law, as applicable, for the execution and performance of
this Reorganization Agreement by the Selling Trust on behalf of the Acquired Fund, except for the effectiveness of the Acquiring Trust’s N-1A Post-Effective Amendment (as defined in Section 8.6 of this Reorganization Agreement), the Selling
Trust’s filing with the U.S. Securities and Exchange Commission (“Commission”) of a proxy statement on Schedule 14A, and the filing of any documents that may be required under Delaware state law and such other consents, approvals,
authorizations and filings as have been made or received and such consents, approvals, authorizations and filings as may be required subsequent to the Closing Date, it being specifically understood, however, that this Reorganization Agreement
and the transactions contemplated herein must be approved by the Acquired Fund Shareholders as provided in Section 5.2 of this Reorganization Agreement.
4.2 REPRESENTATIONS OF THE ADVISER. The Adviser represents and warrants to the
Acquiring Fund and to the Acquired Fund as follows:
(a) The Adviser is a South Carolina limited liability company, duly organized,
validly existing, and in good standing under the laws of the State of South Carolina.
(b) The Adviser is registered as an investment adviser with the Commission under
the Investment Advisers Act of 1940, as amended, and such registration has not been revoked or rescinded and is in full force and effect.
(c) The execution, delivery, and performance of this
Reorganization Agreement has been duly authorized by all necessary action on the part of the Adviser, and this Reorganization Agreement constitutes a valid and binding obligation of the Adviser, enforceable in accordance with its terms, subject
as to enforcement, bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights and to general equity principles.
(d) The information to be furnished by the Adviser
for use in registration statements, proxy materials, applications for orders, no-action letters, and other documents that may be necessary in connection with the transactions contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with applicable U.S. federal securities and other laws and regulations.
(e) From the date of the filing of the Proxy
Statement (as defined in Section 5.7 of this Reorganization Agreement), through the time of the Acquired Fund Meeting and on the Closing Date, any written information furnished by the Adviser for use in the Proxy Materials (as defined in
Section 5.7 of this Reorganization Agreement), or any other materials provided in connection with the Reorganization, does not and will not contain, with respect to the Adviser, any untrue statement of a
material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances under which such statements were made, not materially misleading.
(f) The representations and warranties made by the Acquired Fund herein are true
and correct as of the dates to which they relate, and will be true and correct at Closing.
4.3 REPRESENTATIONS
OF THE ACQUIRING FUND. The Acquiring Trust, on behalf of the Acquiring Fund, represents and warrants to the Acquired Fund as follows:
(a) The
Acquiring Trust is a statutory trust, duly organized, validly existing and in good standing under the laws of the State of Delaware.
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(b) The
Acquiring Fund is a separate series of the Acquiring Trust and has been duly established in accordance with the applicable provisions of the Acquiring Trust’s Agreement and Declaration of Trust.
(c) The
Acquiring Trust is registered as an open-end management investment company under the 1940 Act, and such registration has not been revoked or rescinded and is in full force and effect.
(d) The
Acquiring Fund, a new series of the Acquiring Trust, was formed solely for the purpose of effecting the Reorganization, has not commenced operations or engaged in any business and will not do so until after the Closing and, except with respect
to the consideration received in exchange for the issuance of the Initial Shares, does not own any assets and will not own any assets prior to the Closing. There shall be no issued and outstanding shares of the Acquiring Fund prior to the
Closing Date other than the Initial Shares issued to the Sole Shareholder in connection with the organization of the Acquiring Fund. The Acquiring Fund will redeem and cancel such Initial Shares immediately prior to the Closing in exchange for
an amount equal to the consideration received by the Acquiring Fund for such Initial Shares so that the Acquiring Fund will own no assets at the time of the Closing. The Acquiring Fund has no earnings and profits accumulated in any taxable year
and has no liabilities.
(e) The
Acquiring Fund is not, and the execution, delivery and performance of this Reorganization Agreement will not result, in a conflict with or a material violation of any provision of the Acquiring Trust’s Agreement and Declaration of Trust or
By-Laws, or of any material agreement, indenture, instrument, contract, lease, or other undertaking to which the Acquiring Trust or Acquiring Fund is a party or by which it is bound.
(f) No
litigation, administrative proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquiring Trust or the Acquiring Fund or any of its properties or assets, which,
if adversely determined, would materially and adversely affect its financial condition, the conduct of its business or the ability of the Acquiring Trust or the Acquiring Fund to carry out the transactions contemplated by this Reorganization
Agreement. Neither the Acquiring Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to
consummate the transactions contemplated hereby and, to the best knowledge of the Acquiring Trust or Acquiring Fund, there is currently no formal or informal investigation or action that reasonably could lead to such a result.
(g) The
execution, delivery and performance of this Reorganization Agreement has been duly authorized by all necessary action on the part of the Acquiring Fund and the Acquiring Trust’s Board of Trustees, and this Reorganization Agreement constitutes a
valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights and to
general equity principles.
(h) The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Reorganization Agreement will, at the Closing Date, have been duly authorized and will, after
taking into account the redemption and cancellation of the Initial Shares, constitute all the issued and outstanding shares of the Acquiring Fund as of the Closing Date. When so issued and delivered, such shares will be duly and validly issued
shares of the Acquiring Fund and will be fully paid and non-assessable. The Acquiring Fund has no outstanding options, warrants or other rights to subscribe for or purchase any shares of the Acquiring Fund, and has no outstanding securities
convertible into shares of the Acquiring Fund.
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(i) The
information to be furnished by the Acquiring Fund for use in registration statements, proxy materials, applications for orders, no-action letters, and other documents that may be necessary in connection with the transactions contemplated herein
shall be accurate and complete in all material respects and shall comply in all material respects with U.S. federal securities and other laws and regulations.
(j) The
prospectus and statement of additional information of the Acquiring Fund filed as part of the Acquiring Trust’s N-1A Post‑Effective Amendment (as defined in Section 8.6 of this Reorganization Agreement), which will become effective prior to the
Closing Date, conform, and as of the effective date of the N-1A Post‑Effective Amendment (as defined in Section 8.6 of this Reorganization Agreement) will conform, in all material respects, to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations thereunder and do not, and as of the effective date of the Post‑Effective Amendment will not, with respect to the Acquiring Trust or the Acquiring Fund, include any untrue statement of a material fact or
omit to state any material fact required to be stated or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading.
(k) Subject
to the accuracy of the representations and warranties in Section 4.1(p) of this Reorganization Agreement the Acquiring Fund (i) will elect to be a RIC, will qualify for the tax treatment afforded RICs under the Code for its taxable year that
includes the Closing Date, and intends to continue to qualify for such treatment for its subsequent taxable years, (ii) will be eligible to compute its U.S. federal income tax under Section 852 of the Code for the taxable year that includes the
Closing Date, and (iii) will be treated as a separate corporation for U.S. federal income tax purposes pursuant to Section 851(g) of the Code for the taxable year that includes the Closing Date.
(l) No
governmental consents, approvals, authorizations or filings are required under the 1933 Act, the 1934 Act, the 1940 Act or Delaware state law for the execution of this Reorganization Agreement by the Acquiring Trust, for itself and on behalf of
the Acquiring Fund, or the performance of this Reorganization Agreement by the Acquiring Trust, for itself and on behalf of the Acquiring Fund, except for the effectiveness of the N-1A Post-Effective Amendment (as defined in Section 8.6 of this
Reorganization Agreement), and the filing of any documents that may be required under the laws of the state of Delaware and except for such other consents, approvals, authorizations and filings as have been made or received and such consents,
approvals, authorizations and filings as may be required subsequent to the Closing Date.
(m) The
Acquiring Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act, and any state securities laws as it may deem appropriate to continue its operations after the Closing Date.
4.4 REPRESENTATIONS
OF THE ACQUIRING FUND, THE ACQUIRED FUND AND THE ADVISER. Each of the Acquiring Trust and the Selling Trust, on behalf of the Acquiring Fund and Acquired Fund, respectively, as well as the Adviser, represents and warrants to each other that
there is no person or entity entitled to receive any broker’s fees or similar fees or commission payments in connection with the Reorganization or transactions contemplated herein.
ARTICLE V
COVENANTS OF ACQUIRING FUND AND Acquired FUND
COVENANTS OF ACQUIRING FUND AND Acquired FUND
5.1 OPERATION
IN ORDINARY COURSE.
(a) Subject to Section 1.2 of this Reorganization Agreement, the Acquired Fund will operate its business in the ordinary course of business between the date of this Reorganization
Agreement and the Closing Date, it being understood that such ordinary course of business will include making customary dividends and distributions, any other distribution necessary or desirable to avoid U.S. federal income or excise taxes, and
shareholder purchases and redemptions. The Acquiring Fund shall not conduct any business prior to the Closing Date, other than such activity as is necessary to consummate the transactions contemplated by this Reorganization Agreement. No party
shall take any action that would, or reasonably would be expected to, result in any of its representations and warranties set forth in this Reorganization Agreement being or becoming untrue in any material respect.
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5.2 SHAREHOLDER
APPROVAL. The Acquired Fund will call a special meeting of the Acquired Fund Shareholders to consider and approve this Reorganization Agreement (and transactions contemplated thereby) and to take all other appropriate action necessary to obtain
approval of the transactions contemplated herein.
5.3 INVESTMENT
REPRESENTATION. The Selling Trust, on behalf of the Acquired Fund, covenants that the Acquiring Fund Shares to be issued to the Acquired Fund pursuant to this Reorganization Agreement are not being acquired for the purpose of making any
distribution, other than in connection with the Reorganization and in accordance with the terms of this Reorganization Agreement.
5.4 ADDITIONAL
INFORMATION. The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requests concerning the beneficial ownership of the Acquired Fund’s shares as permitted by shareholder account
registrations.
5.5 FURTHER
ACTION. Subject to the provisions of this Reorganization Agreement, each Fund shall take or cause to be taken, any and all actions, and do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Reorganization Agreement, including any actions required to be taken after the Closing Date. In particular, the Acquired Fund covenants that it will, as and when reasonably requested by the
Acquiring Fund, execute and deliver or cause to be executed and delivered all such assignments and other instruments and will take or cause to be taken such further action as the Acquiring Fund may reasonably deem necessary or desirable in
order to vest in and confirm the Acquiring Fund’s title to and possession of all the Acquired Fund’s assets and otherwise to carry out the intent and purpose of this Reorganization Agreement.
5.6 STATEMENT
OF EARNINGS AND PROFITS. As promptly as practicable, but in no case later than forty-five (45) days after the Closing Date, the Selling Trust shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring Fund and
which will be certified by the Selling Trust’s Treasurer, a statement of the earnings and profits of the Acquired Fund for U.S. federal income tax purposes, as well as any net operating loss carryovers and capital loss carryovers, that will be
carried over to the Acquiring Fund as a result of Section 381 of the Code.
5.7 PREPARATION
OF PROXY STATEMENT AND PROXY MATERIALS. The parties will prepare and file, or shall have prepared and filed, with the Commission a proxy statement on Schedule 14A relating to the Reorganization (“Proxy Statement”). The Proxy Statement shall be
in compliance, in all material respects, with the 1933 Act, the 1934 Act, and the 1940 Act, as applicable. Each party will provide the other party with the materials and information necessary to prepare the Proxy Statement and related materials
(“Proxy Materials”), for inclusion therein, in connection with the Acquired Fund Meeting of Shareholders to consider the approval of this Reorganization Agreement and the transactions contemplated herein.
5.8 REPORTING
RESPONSIBILITY. Any reporting responsibility of the Acquired Fund, including, without limitation, the responsibility for filing of regulatory reports, tax returns or other documents with the Commission, any state securities commission, and any
U.S. federal, state or local tax authorities or any other relevant authority, is and shall remain the responsibility of the Acquired Fund, including after the Closing.
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5.9 TAX
STATUS OF REORGANIZATION. The parties intend that the Reorganization will qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code. None of the Selling Trust, the Acquired Fund, the Acquiring Trust or the Acquiring
Fund shall (either before or after the Closing Date) take any action or cause any action to be taken (including, without limitation the filing of any tax return) that is inconsistent with such treatment or that results in the failure of the
Reorganization to qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code.
5.10 STATEMENT
OF ASSETS AND LIABILITIES. The Acquired Fund shall, as soon as is reasonably practicable after the Closing Date, deliver to the Acquiring Fund a statement of the Acquired Fund’s assets and liabilities, together with a list of the Acquired Fund’s
portfolio securities (as of the Closing Date) showing the tax basis of such securities by lot and the holding periods of such securities, as of the Closing Date, certified by the Treasurer or Assistant Treasurer of the Selling Trust.
5.11 CONFIDENTIALITY.
(a) The
Acquiring Trust, the Acquiring Fund, the Selling Trust, the Acquired Fund, and the Adviser ("Covered Persons") will hold, and will cause their respective board members, officers, employees, representatives, agents and affiliates to hold,
in strict confidence, and not disclose to any other person, and not use in any way except in connection with transactions hereby contemplated, without the prior written consent of the other Covered Persons, all non-public, confidential or
proprietary information obtained from the other Covered Persons in connection with the transactions contemplated by this Reorganization Agreement, except that any such information may be disclosed (i) to governmental or regulatory bodies, and,
where necessary, to any other person in connection with the obtaining of consents or waivers as contemplated by this Reorganization Agreement; (ii) if required by court order or decree or applicable law; (iii) if it is publicly available through
no act or failure to act of such party; (iv) if it was already known to such party on a non-confidential basis on the date of receipt; (v) during the course of or in connection with any litigation, government investigation, arbitration, or other
proceedings based upon or in connection with the subject matter of this Reorganization Agreement, including, without limitation, the failure of the transactions contemplated hereby to be consummated; or (vi) if it is otherwise expressly provided
for herein.
(b) In the
event of a termination of this Reorganization Agreement, the Covered Persons agree that they along with their respective board members, employees, representatives, agents and affiliates shall, and shall cause their affiliates to, except with the
prior written consent of the other Covered Persons, keep secret and retain in strict confidence, and not use for their benefit, nor disclose to any other persons, any and all non-public, confidential or proprietary information relating to the
other Covered Persons and their related parties and affiliates, whether obtained through their due diligence investigation, this Reorganization Agreement or otherwise, except such information may be disclosed (i) if required by court order or
decree or applicable law; (ii) if it is publicly available through no act or failure to act of such party; (iii) if it was already known to such party on a non-confidential basis on the date of receipt; (iv) during the course of or in connection
with any litigation, government investigation, arbitration, or other proceedings based upon or in connection with the subject matter of this Reorganization Agreement, including, without limitation, the failure of the transactions contemplated
hereby to be consummated; or (v) if it is otherwise expressly provided for herein.
ARTICLE VI
CONDITIONs PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
CONDITIONs PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions provided for herein shall be subject to the fulfillment or waiver of the following conditions:
6.1 REPRESENTATIONS
AND COVENANTS. All representations, covenants, and warranties of the Acquiring Trust and the Acquiring Fund contained in this Reorganization Agreement shall be true and correct in all material respects as of the date hereof and as of the
Closing Date, with the same force and effect as if made on and as of the Closing Date. The Acquiring Fund shall have delivered to the Acquired Fund a certificate executed in the Acquiring Fund’s name by the Acquiring Trust’s President and its
Treasurer, in form and substance satisfactory to the Acquired Fund and dated as of the Closing Date, to such effect and as to such other matters as the Acquired Fund shall reasonably request.
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6.2 PERFORMANCE
OF CONDITIONS AND COVENANTS. The Acquiring Fund shall have performed and complied, in all material respects, with all terms, conditions, covenants, obligations, agreements and restrictions required by this Reorganization Agreement to be
performed or complied with by the Acquiring Fund prior to or at the Closing.
6.3 DELIVERY
OF CERTIFICATE. The Acquiring Trust, on behalf of the Acquiring Fund, shall have executed and delivered to the Selling Trust an Assumption of Liabilities certificate dated as of the Closing Date pursuant to which the Acquiring Fund will assume
all of the Assumed Liabilities of the Acquired Fund not discharged prior to the Closing Date in accordance with Section 1.3 of this Reorganization Agreement.
6.4 ADVISER
EXPENSES. All expenses of the Acquired Fund that are the obligation of the Adviser under the Investment Advisory Agreement with the Selling Trust, on behalf of the Acquired Fund, dated August 10, 2021, shall have been paid by the Adviser and
the fees and costs of the Reorganization as set forth in Section 9.1 shall have been paid by the Adviser on or before the two business days preceding the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions provided for herein shall be subject to the fulfillment or waiver of the following conditions:
7.1 CERTAIN
REPRESENTATIONS AND COVENANTS. All representations, covenants, and warranties of the Selling Trust and the Acquired Fund contained in this Reorganization Agreement shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, with the same force and effect as if made on and as of the Closing Date. The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in the Acquired Fund’s name by the Selling
Trust’s President and Treasurer or Assistant Treasurer, in form and substance satisfactory to the Acquiring Fund and dated as of the Closing Date, to such effect and as to such other matters as the Acquiring Fund shall reasonably request.
7.2 PERFORMANCE
OF CONDITIONS AND COVENANTS. The Acquired Fund shall have performed and complied in all material respects with all terms, conditions, covenants, obligations, agreements and restrictions required by this Reorganization Agreement to be performed
or complied with by the Acquired Fund prior to or at the Closing.
7.3 PORTFOLIO
SECURITIES LIST. The Acquired Fund will, within five (5) business days prior to the Closing Date, as such term is defined in Section 3.1 of this Reorganization Agreement, furnish the Acquiring Fund with a list of the Acquired Fund’s portfolio
securities and other investments as of such date.
7.4 TRUSTEE
AND OFFICER TAIL INSURANCE. For the period beginning at the Closing Date and ending not less than six years thereafter, the Adviser, its successors and assigns, shall either (a) arrange for the provision of liability coverage under the Selling
Trust’s current D&O/E&O policy, through the designation of the Acquired Fund as a terminated fund under the current policy, to any former and/or current trustees and officers of the Selling Trust as of the date of this Reorganization
Agreement, covering the actions of such trustees and officers of the Selling Trust for the period(s) they served in such capacity on behalf of the Acquired Fund; or (b) obtain a pre-paid, non-cancelable run-off or “tail” insurance policy (e.g.,
errors and omissions/trustees and officers) providing liability coverage to the Acquired Fund and to any former and/or current trustees and officers of the Selling Trust as of the date of this Reorganization Agreement, covering the actions of
such trustees and officers of the Selling Trust for the period(s) they served in such capacity on behalf of the Acquired Fund and at limit levels and otherwise on terms as the Board of Trustees of the Selling Trust deems appropriate.
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ARTICLE VIII
FURTHER CONDITIONS PRECEDENT
FURTHER CONDITIONS PRECEDENT
The obligations of each Fund shall also be subject to the fulfillment of the following conditions (or waiver by the affected parties, except for Section 8.2 of this Reorganization
Agreement):
8.1 APPROVAL
OF THE BOARDS. This Reorganization Agreement and the transactions contemplated herein shall have been approved by both the Board of Trustees of the Acquiring Trust and the Board of Trustees of the Selling Trust, and each Fund shall have
delivered to the other a copy of the resolutions approving this Reorganization Agreement adopted by its Board, certified by its Secretary or equivalent officer.
8.2 ACQUIRED
FUND SHAREHOLDER APPROVAL. This Reorganization Agreement and the transactions contemplated herein, with respect to the Acquired Fund, shall have been approved by the requisite vote of the holders of the outstanding shares of the Acquired Fund
in accordance with applicable law, including the 1940 Act and the provisions of the Selling Trust Governing Documents. Notwithstanding anything herein to the contrary, neither Fund may waive the conditions set forth in this Section 8.2 of this
Reorganization Agreement.
8.3 OTHER
OPERATING AGREEMENTS. The Acquiring Trust, on behalf of and with respect to the Acquiring Fund, shall have entered into or adopted any and all agreements necessary for the Acquiring Fund’s operation as a series of an open-end investment
company.
8.4 NO
ADVERSE COMMISSION ACTION. On the Closing Date, the Commission shall not have instituted any proceeding seeking to enjoin the consummation of the transactions contemplated by this Reorganization under the 1940 Act. Furthermore, no action, suit
or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit or obtain damages or other relief in connection with this Reorganization Agreement or the transactions
contemplated herein.
8.5 OTHER
REQUIRED CONSENTS. All required consents of other parties and all other consents, orders, and permits of U.S. federal, state and local regulatory authorities (including those of the Commission and of state securities authorities, including any
necessary “no-action” positions and exemptive orders from such U.S. federal and state authorities) to permit consummation of the transactions contemplated herein shall have been obtained.
8.6 N-1A POST
EFFECTIVE AMENDMENT. The post-effective amendment to the Acquiring Trust’s registration statement on Form N-1A relating to Acquiring Fund Shares under the 1933 Act and the 1940 Act, as applicable (“N-1A Post-Effective Amendment”), shall
have become effective, and any additional post-effective amendments to any such registration statement as are determined by the Trustees of the Acquiring Trust to be necessary and appropriate shall have been filed with the Commission and shall
have become effective; and no stop order suspending the effectiveness of such registration statement shall have been issued. To the best knowledge of the parties to this Reorganization Agreement, no investigation or proceeding for these
purposes shall have been instituted or be pending, threatened or contemplated under the 1933 Act.
8.7 SEWARD
& KISSEL TAX OPINION. The Acquiring Trust and the Selling Trust shall have received an opinion of Seward & Kissel LLP (“Counsel”) as to the U.S. federal income tax consequences mentioned
below with respect to the Reorganization (“Tax Opinion”). In rendering the Tax Opinion, Counsel may rely as to factual matters, exclusively and without independent verification, on the representations and warranties made in this
Reorganization Agreement, which Counsel may treat as representations and warranties made to it (that, notwithstanding anything else contained herein, shall survive the Closing), and in separate letters, if
Counsel requests, addressed to it (collectively, “Representations”) and the certificates delivered pursuant to Sections 6.1 and 7.1. The Tax Opinion shall be substantially to the effect that, based
on the facts and assumptions stated therein and conditioned on the Representations being true and complete at the Closing Date and consummation of the Reorganization in accordance with this Reorganization Agreement (without the waiver or
modification of any terms or conditions hereof and without taking into account any amendment hereof that Counsel has not approved), for U.S. federal income tax purposes with respect to the Reorganization:
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(a) The transfer of all of the Acquired Fund’s assets to the Acquiring Fund in exchange solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund followed by the pro rata
distribution, by the Acquired Fund of all of the Acquiring Fund Shares to the Acquired Fund Shareholders in complete liquidation of the Acquired Fund will constitute a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code, and
the Acquiring Fund and the Acquired Fund will each be a “party to a reorganization,” within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund upon the receipt of the Acquired Fund’s assets solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired
Fund.
(c) No gain or loss will be recognized by the Acquired Fund upon the transfer of the Acquired Fund’s assets to the Acquiring Fund solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities
of the Acquired Fund or upon the distribution (whether actual or constructive) of the Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for the Acquired Fund Shareholders’ shares of the Acquired Fund in complete liquidation of
the Acquired Fund.
(d) No gain or loss will be recognized by the Acquired Fund Shareholders upon the exchange of their shares of the Acquired Fund solely for Acquiring Fund Shares in complete liquidation of the Acquired Fund pursuant to the Reorganization.
(e) The aggregate adjusted basis of the Acquiring Fund Shares received by an Acquired Fund Shareholder pursuant to the Reorganization will be the same as the aggregate adjusted basis of the shares of the Acquired Fund exchanged therefor
by such Acquired Fund Shareholder.
(f) The holding period of the Acquiring Fund Shares received by an Acquired Fund Shareholder will include the period during which the shares of the Acquired Fund exchanged therefor were held by such Acquired Fund Shareholder, provided
such shares of the Acquired Fund are held as capital assets at the Closing Date.
(g) The adjusted basis of each asset of the Acquired Fund that is transferred to the Acquiring Fund in the Reorganization will be the same as the adjusted basis of such asset to the Acquired Fund immediately prior to the transfer thereof.
(h) The holding period of each asset of the Acquired Fund in the hands of the Acquiring Fund will include the period during which such asset was held by the Acquired Fund (except where the Acquiring Fund’s investment activities have the
effect of reducing or eliminating an asset’s holding period).
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(i) The Reorganization will not result in the termination of the Acquired Fund’s taxable year and the Acquiring Fund will succeed to and take into account the items of the Acquired Fund, if any, described under Section 381(c), subject to
the conditions and limitations specified in Sections 381, 382, 383 and 384 and the Treasury Regulations thereunder.
Notwithstanding the foregoing, the Tax Opinion may state that no opinion is expressed as to: (i) whether either the Acquired Fund or the Acquiring Fund qualifies or will qualify as
a regulated investment company; (ii) the U.S. federal income tax consequences of the payment of Reorganization Expenses by Adviser, except in relation to the qualification of the Reorganization as a reorganization under Section 368(a) of the Code;
(iii) whether any U.S. federal income tax will be imposed or required to be withheld under the Foreign Investment in Real Property Tax Act of 1980 with respect to any Acquired Fund Shareholder that is a foreign person; (iv) the effect of the
Reorganization on the Acquired Fund with respect to any transferred asset as to which unrealized gain or loss is required to be recognized for U.S. federal income tax purposes on the termination or transfer thereof even if the transaction otherwise
constitutes a nontaxable transaction or under a mark-to-market system of accounting (including under Section 1256 of the Code); (v) the effect of the Reorganization on any Acquired Fund Shareholder that is required to recognize unrealized gains or
losses for U.S. federal income tax purposes under a mark-to-market system of accounting; (vi) whether accrued market discount, if any, on any market discount bonds held by the Acquired Fund will be required to be recognized as ordinary income under
Section 1276 of the Code as a result of the Reorganization; (vii) whether any gain or loss will be required to be recognized with respect to any asset that constitutes stock in a passive foreign investment company (within the meaning of Section
1297(a) of the Code); and (viii) any state, local or foreign tax consequences of the Reorganization.
ARTICLE IX
EXPENSES
EXPENSES
9.1 EXPENSES.
Notwithstanding anything herein to the contrary, neither Fund shall pay any expenses relating to the Reorganization (“Reorganization Expenses"). The Adviser will pay and/or cause to be paid all Reorganization Expenses. In this regard,
Reorganization Expenses include: (a) expenses associated with the preparation and filing of the Acquired Fund prospectus supplement, the Acquiring Fund registration statement(s), the Proxy Statement and any amendments thereto; (b) postage; (c)
accounting fees; (d) legal fees incurred by each Fund, including fees to counsel of the Selling Trust, counsel of the Acquiring Trust, counsel to the Independent Trustees of the Selling Trust, and counsel to the Independent Trustees of the
Acquiring Trust; (e) the costs of retaining a proxy tabulator, including any costs associated with obtaining beneficial ownership information; (f) proxy solicitation costs, if any; (g) expenses associated with any special meetings or portions
of meetings of Fund shareholders, the Board of Trustees of the Acquiring Trust and the Board of Trustees of the Selling Trust in connection with the Reorganization, costs of the terminating Acquired Fund; (h) premium expenses of tail coverage
insurance for the Acquired Fund and its Trustees and officers as set forth in Section 7.4; and (i) other related administrative or operational costs (including, for example, brokerage commissions, transfer fees, transfer taxes, exchange fees,
and securities registration fees). For the avoidance of doubt, whether the Reorganization is consummated or not, the Adviser will bear full responsibility for payment of all Reorganization Expenses. Notwithstanding the foregoing, expenses of
the Reorganization will in any event be paid by the party directly incurring such expenses if and to the extent that the payment by another person of such expenses would result in a failure by either the Acquired Fund or the Acquiring Fund to
qualify for treatment as a regulated investment company within the meaning of Section 851 of the Code or would prevent the Reorganization from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or otherwise result
in the imposition of tax on either the Acquired Fund or the Acquiring Fund or on any of their respective shareholders.
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ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF COVENANTS
ENTIRE AGREEMENT; SURVIVAL OF COVENANTS
10.1 ENTIRE
AGREEMENT. The parties agree that no party has made to the other parties any representation, warranty and/or covenant not set forth herein, and that this Reorganization Agreement constitutes the entire agreement between and among the parties,
except for the Mutual Nondisclosure Agreement dated September 27, 2023, by and between the Selling Trust, the Acquiring Trust, the Adviser and Fund Services.
10.2 SURVIVAL
OF CERTAIN PROVISIONS. Except for the provisions set forth in Sections 1.4, 1.9, 4.1, 4.2, 4.3, 5.5, 5.6, 5.8, 5.10, 5.11, 9.1 and 10.2 of this Reorganization Agreement, the representations, warranties, and covenants contained in this
Reorganization Agreement or in any document delivered pursuant to or in connection with this Reorganization Agreement shall not survive the consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
TERMINATION
11.1 TERMINATION OF AGREEMENT. This Reorganization Agreement may be terminated by the mutual agreement of the Acquiring Trust and the Selling Trust. In addition, either the Acquiring Trust or the Selling Trust may at its option terminate
this Reorganization Agreement at or before the Closing Date due to:
(a) a willful
material breach by the other party of any representation, warranty, or agreement contained herein to be performed at or before the Closing Date, if not cured within thirty (30) days of written notice thereof to the breaching party and prior to
the Closing Date;
(b) a
condition precedent to the obligations of the terminating party that has not been met and it reasonably appears that it will not or cannot be met; or
(c) a
determination by the Board of Trustees of the Acquiring Trust or the Board of Trustees of the Selling Trust that the consummation of the transactions contemplated herein is not in the best interests of the Acquiring Fund or Acquired Fund or its
shareholders, respectively.
11.2 EFFECT
OF TERMINATION. In the event of any such termination, in the absence of willful material default, there shall be no liability for damages on the part of the Acquiring Trust, the Acquiring Fund, the Selling Trust, the Acquired Fund, the Adviser,
or their respective board members, members, shareholders and officers, but Section 9.1 shall continue to apply. In the event of willful material default, all remedies at law or in equity of the party adversely affected shall survive.
ARTICLE XII
AMENDMENTS
AMENDMENTS
12.1 AMENDMENTS.
This Reorganization Agreement may be amended, modified, or supplemented in such manner as may be mutually agreed upon in writing by the officers of the Acquiring Trust and the Selling Trust as specifically authorized by their respective Boards
of Trustees; provided, however, that following the Acquired Fund Meeting called by the Acquired Fund pursuant to Section 5.2 of this Reorganization Agreement, no such amendment may have the effect of changing the provisions hereof to the
detriment of Acquired Fund Shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW;
ASSIGNMENT; LIMITATION OF LIABILITY
HEADINGS; COUNTERPARTS; GOVERNING LAW;
ASSIGNMENT; LIMITATION OF LIABILITY
13.1 HEADINGS.
The article and section headings contained in this Reorganization Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Reorganization Agreement.
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13.2 COUNTERPARTS.
This Reorganization Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
13.3 CONTROLLING
LAW. This Reorganization Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws.
13.4 NO
ASSIGNMENT. This Reorganization Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but, except as provided in this section, no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the written consent of the other parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm, or corporation, other than the
parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Reorganization Agreement.
13.5 EFFECT OF THE AGREEMENT ON CERTAIN PERSONS. It is expressly agreed that the
obligations of each Fund hereunder shall not be binding upon any of the trustees, directors, shareholders, nominees, officers, agents, or employees of the Acquiring Trust or the Selling Trust personally but shall bind only the property of the
respective Fund, as provided in the trust instrument of the Acquiring Trust and the Selling Trust Governing Documents. Moreover, no series of the Selling Trust or Acquiring Trust other than the Acquired Fund
or Acquiring Fund, respectively, shall be responsible for the obligations of the Acquiring Trust or Selling Trust hereunder, and all persons shall look only to the assets of the applicable Fund to satisfy the obligations of such Trust and Fund
hereunder. The execution and delivery of this Reorganization Agreement have been authorized by the Board of Trustees of the Acquiring Trust on behalf of the Acquiring Fund and the Board of Trustees of the Selling Trust on behalf of the Acquired Fund and signed by authorized officers of the Acquiring Trust and the Selling Trust, respectively, acting as such. Neither the authorization by such Board of Trustees, as applicable, nor the execution and
delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally but shall bind only the property of the respective Fund.
ARTICLE XIV
NOTICES
NOTICES
14.1 NOTICES. Any notice, report, statement or demand required or permitted by
any provisions of this Reorganization Agreement shall be in writing and shall be deemed duly given if delivered by electronic mail, by hand (including by FedEx or similar express courier), transmitted by facsimile or three days after being mailed
by prepaid registered or certified mail, return receipt requested, addressed as follows or to such other address of which the parties may have given written notice:
For the Acquiring Trust, on behalf of itself and the Acquiring Fund:
North Square Investments Trust
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
Attention: Alan Molotsky
Email: amolotsky@northsquareinvest.com
Phone: 312-857-7038
With a copy to (which shall not constitute notice):
Seward & Kissel LLP
901 K Street NW, Suite 800
Washington, DC 20001
Attention: Robert M. Kurucza, Esq.
Email: kurucza@sewkis.com
Phone: 202-661-7195
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For the Selling Trust, on behalf of itself and the Acquired Fund:
Manager Directed Portfolios
615 East Michigan Street, 3rd Floor
Milwaukee, WI 53202
Attention: Amber Kopp
Email: amber.kopp@usbank.com
Phone: 201-708-9796
With a copy to (which shall not constitute notice):
Godfrey & Kahn, SC
833 East Michigan Street, Suite 1800
Milwaukee, WI 53202
Attention: Ellen R. Drought, Esq.
Email: edrought@gklaw.com
Phone: 414-287-9517
For the Adviser:
Reflection Asset Management, LLC
1000 Palm Boulevard
Isle of Palms, SC 29451
Attention: Jason Britton, Chief Executive Officer
Email: jbritton@reflectionam.com
Phone: 617-584-4042
(signature page follows)
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IN WITNESS WHEREOF, the parties have duly executed this Reorganization Agreement, all as of the date first written above.
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NORTH SQUARE INVESTMENTS TRUST,
separately on behalf of the Sphere 500 Climate Fund
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By:
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Name:
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Title:
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MANAGER DIRECTED PORTFOLIOS,
separately on behalf of the Sphere 500 Climate Fund
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By:
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Name:
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Title:
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The undersigned is a party to this Reorganization Agreement for the purposes of Sections 1.10, 4.2, 4.4, 5.11, 6.4, 7.4, 9.1 and 10.2 only
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REFLECTION ASSET MANAGEMENT, LLC
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By:
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Name:
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EXHIBIT A
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Column A (Acquiring Fund)
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Column B (Acquired Fund)
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Sphere 500 Climate Fund, a series of North Square Investments Trust
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Sphere 500 Climate Fund, a series of Manager Directed Portfolios
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Sphere 500 Climate Fund
A SERIES OF MANAGER DIRECTED PORTFOLIOS
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 7, 2024
The undersigned, revoking prior proxies, hereby appoints Scott M. Ostrowski and Amber C. Kopp, and each of them, as attorneys-in-fact and proxies of the undersigned, granted in connection with the voting of the
shares subject hereto with full power of substitution, to vote shares held in the name of the undersigned on the record date at the Special Meeting of Shareholders of Sphere 500 Climate Fund (the “Fund”) to be held at the offices of U.S. Bank
Global Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202 on February 7, 2024 at 11:00 a.m. Central Time, or at any adjournment thereof, upon the Proposal described in the Notice of Meeting and accompanying Proxy Statement, which
have been received by the undersigned.
Do you have questions? If you have any questions about how to vote your proxy or about the meeting in general, please call toll-free 1-877-864-5060. Representatives are available to assist you Monday through Friday 9 a.m. to 10 p.m. Eastern Time.
Important Notice Regarding the Availability of Proxy Materials for this Special Meeting of Shareholders to Be Held on February 7, 2024. The proxy statement for this meeting is available at:
vote.proxyonline.com/sphere/docs/2024meeting.pdf
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Sphere 500 Climate Fund
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PROXY CARD
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YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. The signer(s) acknowledges receipt with this Proxy Statement of the Board of Trustees. Your
signature(s) on this should be exactly as your name(s) appear on this Proxy (reverse side). If the shares are held jointly, each holder should sign this Proxy. Attorneys-in-fact, executors, administrators, trustees or guardians
should indicate the full title and capacity in which they are signing.
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SIGNATURE (IF HELD JOINTLY)
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This proxy is solicited on behalf of the Fund’s Board of Trustees, and the Proposal has been unanimously approved by the Board of Trustees and recommended for approval by shareholders. When properly executed,
this proxy will be voted as indicated or “FOR” the proposal if no choice is indicated. The proxy will be voted in accordance with the proxy holders’ best judgment as to any other matters that may arise at the Special Meeting.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
TO VOTE, MARK CIRCLES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: ●
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To approve the Agreement and Plan of Reorganization and Termination providing for (a) the acquisition of all of the assets of the Acquired Fund by a newly created series of North
Square Investments Trust of the same name (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund and the assumption by the Acquiring Fund of all liabilities of the Acquired Fund and (b) the subsequent liquidation, termination
and dissolution of the Acquired Fund.
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THANK YOU FOR VOTING