UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
SCHEDULE 14A
___________________
Proxy Statement Pursuant to Schedule 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
|
☐ |
Preliminary Proxy Statement |
|
☐ |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
☒ |
Definitive Proxy Statement |
|
☐ |
Definitive Additional Materials |
|
☐ |
Soliciting Material Pursuant to §240.14a-12 |
XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST
(Exact Name of Registrant as Specified in Charter)
_________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
☒ |
No fee required. |
|
|
☐ |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
|
(1) |
Title of each class of securities to which transaction applies: |
|
|
|
||
|
(2) |
Aggregate number of securities to which transaction applies: |
|
|
|
||
|
(3) |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
|
|
|
||
|
(4) |
Proposed maximum aggregate value of transaction: |
|
|
|
||
|
(5) |
Total fee paid: |
|
|
|
||
|
☐ |
Fee paid previously with preliminary materials: |
|
|
☐ |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
|
|
(1) |
Amount Previously Paid: |
|
|
|
||
|
(2) |
Form, Schedule or Registration No.: |
|
|
|
||
|
(3) |
Filing Party: |
|
|
|
||
|
(4) |
Date Filed: |
|
|
|
||
XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST
321 North Clark Street
Chicago, Illinois 60654
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on May 24, 2022
Notice is hereby given to the shareholders of XAI Octagon Floating Rate & Alternative Income Term Trust (“XFLT” or the “Trust”) that the annual meeting of shareholders of the Trust (the “Annual Meeting”) will be held at the offices of the Trust’s investment adviser, XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654 on Tuesday, May 24, 2022, at 9:00 a.m. (Central time).
The Annual Meeting is being held for the following purposes:
1. To elect the Trustee nominees named in the accompanying proxy statement, as follows:
(a) Gregory G. Dingens as a Class II Trustee to be elected by the holders of Common Shares and Preferred Shares, voting together as a single class, to serve until the Trust’s 2025 annual meeting of shareholders or until his successor shall have been elected and qualified; and
(b) Philip G. Franklin as a Class II Trustee to be elected by the holders of Preferred Shares, voting as a separate class, to serve until the Trust’s 2025 annual meeting of shareholders or until her successor shall have been elected and qualified.
2. To transact such other business as may properly come before the Annual Meeting or any adjournments, postponements or delays thereof.
THE BOARD OF TRUSTEES OF THE TRUST (THE “BOARD”), INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES OF THE BOARD.
The Board has fixed the close of business on April 1, 2022 as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments, postponements or delays thereof.
It is important that your shares be represented at the Annual Meeting or by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to complete, sign, date, and return the enclosed proxy card in the postage paid envelope provided or vote via telephone or the Internet pursuant to the instructions on the enclosed proxy card so you will be represented at the Annual Meeting. If you attend the Annual Meeting and wish to vote during the Annual Meeting, you will be able to do so and your vote at the Annual Meeting will revoke any proxy you may have submitted. Merely attending the Annual Meeting, however, will not revoke any previously submitted proxy.
The Trust currently intends to hold the Annual Meeting in person. However, the Trust is actively monitoring the coronavirus (COVID-19) pandemic; the Trust is sensitive to the public health and travel concerns shareholders may have and the protocols that federal, state, and local governments and health officials may impose or recommend. In the event the Trust determines it is not possible or advisable to hold the Annual Meeting in person, the Trust will publicly announce alternative arrangements for the meeting as promptly as practicable before the Annual Meeting, which may include holding the Annual Meeting solely by means of remote communication (i.e., a virtual-only Annual Meeting). Please monitor the Trust’s website for updated information. If you are planning to attend the Annual Meeting, please check the website prior to the meeting date.
|
By order of the Board: |
||
|
/s/ Theodore J. Brombach |
||
|
Theodore J. Brombach |
||
|
Trustee, President and Chief Executive Officer |
Chicago, Illinois
April 13, 2022
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED OR VOTE VIA TELEPHONE OR THE INTERNET PURSUANT TO THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. IN ORDER TO SAVE THE TRUST ANY ADDITIONAL EXPENSE OF FURTHER SOLICITATION, PLEASE MAIL YOUR PROXY CARD OR VOTE VIA TELEPHONE OR THE INTERNET PROMPTLY.
IF YOU WISH TO ATTEND THE ANNUAL MEETING AND VOTE IN PERSON, YOU WILL BE ABLE TO DO SO. IF YOU INTEND TO ATTEND THE ANNUAL MEETING IN PERSON AND YOU ARE A RECORD HOLDER OF SHARES, IN ORDER TO GAIN ADMISSION YOU MUST SHOW PHOTOGRAPHIC IDENTIFICATION, SUCH AS YOUR DRIVER’S LICENSE. IF YOU INTEND TO ATTEND THE ANNUAL MEETING IN PERSON AND YOU HOLD YOUR SHARES THROUGH A BANK, BROKER OR OTHER CUSTODIAN, IN ORDER TO GAIN ADMISSION YOU MUST SHOW PHOTOGRAPHIC IDENTIFICATION, SUCH AS YOUR DRIVER’S LICENSE, AND SATISFACTORY PROOF OF OWNERSHIP OF SHARES, SUCH AS YOUR VOTING INSTRUCTION FORM (OR A COPY THEREOF) OR BROKER’S STATEMENT INDICATING OWNERSHIP AS OF THE RECORD DATE. IF YOU HOLD YOUR SHARES IN A BROKERAGE ACCOUNT OR THROUGH A BANK OR OTHER NOMINEE, YOU WILL NOT BE ABLE TO VOTE IN PERSON AT THE ANNUAL MEETING UNLESS YOU HAVE PREVIOUSLY REQUESTED AND OBTAINED A “LEGAL PROXY” FROM YOUR BROKER, BANK OR OTHER NOMINEE AND PRESENT IT AT THE ANNUAL MEETING.
XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST (NYSE: XFLT)
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To be held on May 24, 2022
This proxy statement (“Proxy Statement”) is furnished to the holders of common shares of beneficial interest, par value $0.01 per share (“Common Shares”) and the holders of 6.50% Series 2026 Term Preferred Shares, par value $0.01 per share (“Preferred Shares” and, together with the Common Shares, “Shares”) of XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) in connection with the solicitation by the Board of Trustees of the Trust (the “Board”) of proxies to be voted at the annual meeting of shareholders of the Trust and any adjournments, postponements or delays thereof (the “Annual Meeting”). The Annual Meeting will be held at the offices of the Trust’s investment adviser, XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654 on Tuesday, May 24, 2022, at 9:00 a.m. (Central time).
The Trust currently intends to hold the Annual Meeting in person. However, the Trust is actively monitoring the coronavirus (COVID-19) pandemic; the Trust is sensitive to the public health and travel concerns shareholders may have and the protocols that federal, state, and local governments and health officials may impose or recommend. In the event the Trust determines it is not possible or advisable to hold the Annual Meeting in person, the Trust will publicly announce alternative arrangements for the meeting as promptly as practicable before the Annual Meeting, which may include holding the Annual Meeting solely by means of remote communication (i.e., a virtual-only Annual Meeting). Please monitor the Trust’s website for updated information. If you are planning to attend the Annual Meeting, please check the website prior to the meeting date.
This document will give you the information you need to vote on the matters listed on the accompanying Notice of Annual Meeting of Shareholders (the “Notice”). Much of the information in this Proxy Statement is required under rules of the Securities and Exchange Commission (“SEC”). If there is anything you do not understand, please contact the Trust at (888) 903-3358.
The Trust will furnish to any shareholder, without charge, a copy of the Trust’s most recent annual and semi-annual report to shareholders upon request. Requests should be directed to the Trust, c/o XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654, or by calling (888) 903-3358.
The Notice, this Proxy Statement and the enclosed proxy card(s) are first being sent to the Trust’s shareholders on or about April 20, 2022.
• Why is a shareholder meeting being held?
The Trust’s Shares are listed on the New York Stock Exchange (“NYSE”), and the Trust’s governing documents and the rules of the NYSE require the Trust to hold an annual meeting of shareholders to elect Trustees each fiscal year.
• What proposal will be voted on?
The Annual Meeting is being held to elect the Trustee nominees named in this Proxy Statement (Gregory G. Dingens and Philip G. Franklin) as Class II Trustees to serve until the Trust’s 2025 annual meeting of shareholders or until their respective successors shall have been elected and qualified (the “Proposal”).
• Will your vote make a difference?
Yes! Your vote is important and could make a difference in the governance of the Trust, no matter how many shares you own.
• Who is asking for your vote?
The enclosed proxy card is solicited by the Board for use at the Annual Meeting to be held on Tuesday, May 24, 2022, and, if the Annual Meeting is adjourned, postponed or delayed, at any later meetings, for the purposes stated in the Notice.
1
• How does the Board recommend that shareholders vote on the Proposal?
The Board unanimously recommends that you vote “FOR” each of the nominees of the Board. The Board has reviewed the qualifications and backgrounds of the Board’s nominees. The Board has approved the nominees named in this Proxy Statement and believes their election is in your best interests.
• Who is eligible to vote?
Shareholders of record of the Trust at the close of business on April 1, 2022 (the “Record Date”) are entitled to attend the Annual Meeting and any adjournments, postponements or delays thereof and to vote on the Proposal applicable to their Shares. Each Share is entitled to one vote. Shares represented by duly executed proxies will be voted in accordance with your instructions.
• How do you vote your Shares?
Whether or not you plan to attend the Annual Meeting, we urge you to complete the enclosed proxy card, date and sign it and return it promptly, or record your voting instructions by telephone or via the internet so your Shares will be represented at the Annual Meeting, no matter how large or small your holdings may be. Instructions regarding how to vote via telephone or the Internet are included on the enclosed proxy card. The required control number for internet and telephone voting is printed on the enclosed proxy card. The control number is used to match proxy cards with shareholders’ respective accounts and to ensure that, if multiple proxy cards are executed, Shares are voted in accordance with the proxy card bearing the latest date.
If you wish to attend the Annual Meeting and vote in person, you will be able to do so. If you intend to attend the Annual Meeting in person and you are a record holder of Shares, in order to gain admission you must show photographic identification, such as your driver’s license. If you intend to attend the Annual Meeting in person and you hold your Shares through a bank, broker or other custodian, in order to gain admission you must show photographic identification, such as your driver’s license, and satisfactory proof of ownership of Shares, such as your voting instruction form (or a copy thereof) or broker’s statement indicating ownership as of the Record Date. If you hold your Shares in a brokerage account or through a bank or other nominee, you will not be able to vote in person at the Annual Meeting unless you have previously requested and obtained a “legal proxy” from your broker, bank or other nominee and present it at the Annual Meeting.
You may contact the Trust at (888) 903-3358 to obtain directions to the site of the Annual Meeting.
The Trust currently intends to hold the Annual Meeting in person. However, the Trust is actively monitoring the coronavirus (COVID-19) pandemic; the Trust is sensitive to the public health and travel concerns shareholders may have and the protocols that federal, state, and local governments and health officials may impose or recommend. In the event the Trust determines it is not possible or advisable to hold the Annual Meeting in person, the Trust will publicly announce alternative arrangements for the meeting as promptly as practicable before the Annual Meeting, which may include holding the Annual Meeting solely by means of remote communication (i.e., a virtual-only Annual Meeting). Please monitor the Trust’s website for updated information. If you are planning to attend the Annual Meeting, please check the website prior to the meeting date.
All Shares represented by properly executed proxies received prior to the Annual Meeting will be voted at the Annual Meeting in accordance with the instructions marked thereon or otherwise as provided therein. If any other business is brought before the Annual Meeting, your Shares will be voted at the proxies’ discretion. If you sign the proxy card, but do not fill in a vote, your Shares will be voted in accordance with the Board’s recommendation.
Shareholders who execute proxy cards or record their voting instructions via telephone or the Internet may revoke them at any time before they are voted by filing with the Secretary of the Trust a written notice of revocation, by delivering (including via telephone or the Internet) a duly executed proxy bearing a later date or by attending the Annual Meeting and voting in person. Merely attending the Annual Meeting, however, will not revoke any previously submitted proxy.
2
Broker-dealer firms holding Shares in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their Shares on the proposal before the Annual Meeting. The Trust understands that, under the rules of the NYSE, such broker-dealer firms may for certain “routine” matters, without instructions from their customers and clients, grant discretionary authority to the proxies designated by the Board to vote if no instructions have been received prior to the date specified in the broker-dealer firm’s request for voting instructions. The Proposal is a “routine” matter and beneficial owners who do not provide proxy instructions or who do not return a proxy card may have their Shares voted by broker-dealer firms in favor of the Proposal. A properly executed proxy card or other authorization by a beneficial owner of Shares that does not specify how the beneficial owner’s Shares should be voted on the Proposal may be deemed an instruction to vote such Shares in favor of the Proposal. Broker-dealers who are not members of the NYSE may be subject to other rules, which may or may not permit them to vote your Shares without instruction. We urge you to provide instructions to your broker or nominee so that your votes may be counted.
• What vote is required to elect a Trustee nominee?
The affirmative vote of a majority of the Shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting at which a quorum is present is necessary to elect a Trustee nominee.
• How many Shares of the Trust were outstanding as of the record date?
At the close of business on the Record Date, the Trust had 32,270,148 Common Shares and 1,596,000 Preferred Shares outstanding.
3
THE PROPOSAL: TO ELECT TRUSTEES
The Trust’s governing documents and the rules of the NYSE require the Trust to hold an annual meeting of shareholders to elect Trustees each fiscal year. Shareholders are being asked to elect Trustees in the following manner:
To elect the Trustee nominees named in this Proxy Statement:
(a) Gregory G. Dingens as the Class II Trustee to be elected by the holders of Common Shares and Preferred Shares, voting together as a single class, to serve until the Trust’s 2025 annual meeting of shareholders or until his successor shall have been elected and qualified; and
(b) Philip G. Franklin as the Class II Trustee to be elected by the holders of Preferred Shares, voting as a separate class, to serve until the Trust’s 2025 annual meeting of shareholders or until her successor shall have been elected and qualified.
Composition of the Board
The Trustees of the Trust are currently classified into three classes of Trustees. Set forth below are the current Class I Trustees, Class II Trustees and Class III Trustee of the Trust:
CLASS I TRUSTEES. Theodore J. Brombach and Danielle Cupps* are the Class I Trustees of the Trust. The Class I Trustees will continue until the 2024 annual meeting of shareholders or until their successors shall have been duly elected and qualified.
CLASS II TRUSTEES. Gregory G. Dingens and Philip G. Franklin* are the Class II Trustees of the Trust. The term of the Class II Trustees are standing for re-election at the Annual Meeting..
CLASS III TRUSTEE. Scott Craven Jones is the Class III Trustee of the Trust. The term of the Class III Trustee will continue until the 2023 annual meeting of shareholders or until his successor shall have been duly elected and qualified.
____________
* Designated for election by the holders of Preferred Shares, voting as a separate class.
Each Trustee nominee, if elected at the Annual Meeting, will hold office for three years or until his or her successor shall have been elected and qualified or until he or she resigns or is otherwise removed. The other Trustees of the Trust will continue to serve under their current terms and will stand for re-election at subsequent annual meetings of shareholders as indicated above.
Unless authority is withheld or other instructions are provided, it is the intention of the persons named in the proxy card to vote “FOR” the election of the Trustee nominees named above. Each of Gregory G. Dingens and Philip G. Franklin has consented to serve as a Trustee if elected at the Annual Meeting. If a designated Trustee nominee declines or otherwise becomes unavailable for election, however, the proxy confers discretionary power on the persons named therein to vote in favor of a substitute Trustee nominee or nominees.
4
Trustee Biographical Information
Certain information concerning the Trustees (including the Trustee nominees) and the officers of the Trust is set forth in the tables below. Trustees who are not interested persons (as defined in Section 2(a)(19) of the Investment Company Act of 1940 (the “1940 Act”)) of the Trust are referred to herein as “Independent Trustees.” The Trustee who is classified as an interested person of the Trust is referred to herein as an “Interested Trustee.”
|
Name, Business Address(1) and |
Position(s) |
Term of Office(2) |
Principal Occupations |
Number of |
Other Directorships |
|||||
|
INDEPENDENT TRUSTEES: |
||||||||||
|
Danielle Cupps |
Trustee |
Trustee since 2017 |
Current: Director, Digital Customer Engagement, McDonald’s Corporation (2019-present). Former: Managing Director, Kinzie Capital Partners (2018) (private equity); Managing Director, BLG Capital Advisors (2016-2018) (family office); Director, Finance and Chief of Staff to CFO, Boeing Company (2006-2012); Vice President, Code Hennessy & Simmons LLC (2000-2005) (private equity); Associate, Goldman, Sachs & Co. (1998-2000). |
1 |
None. |
|||||
|
Gregory G. Dingens |
Trustee (Chair of the Board) |
Trustee since 2017 |
Current: Executive Vice President, Monroe Financial Partners, Inc. (2006-present) (investment banking and trading); Member, Siena Capital Partners GP LLC (2006-present) (private investment fund); Director, Qwickrate LLC (2012-present) (online marketplace for financial institutions). Former: Managing Director, Lehman Brothers (2004-2006); Managing Director, Merrill Lynch (1993-2003). |
1 |
None. |
|||||
|
Philip G. Franklin |
Trustee |
Trustee since 2017 |
Former: Chief Financial Officer and Executive Vice President, Littelfuse, Inc. (1998-2016) (electronics components); Chief Financial Officer and Vice President, OmniQuip International (1995-1998) (construction equipment). |
1 |
Current: TTM Technologies Inc. (2014-present); Chairman, Tribune Publishing Company (Tronc, Inc.) (2014-present). |
|||||
5
|
Name, Business Address(1) and |
Position(s) |
Term of Office(2) |
Principal Occupations |
Number of |
Other Directorships |
|||||
|
Scott Craven Jones |
Trustee |
Trustee since 2017 |
Current: Interim Director (2020-2022), Director (2022-present), Park Agency, Inc.; Director, Carne Global Financial Services (US) LLC (2013-present). Former: Adviser, Wanzenburg Partners LLC (2012-2013); Chief Operating Officer, Chief Financial Officer and Treasurer, Aurora Investment Management LLC (2010-2012); Executive Vice President and Chief Administrative Officer, Calamos Asset Management, Inc. (2005-2008); Managing Director, Northern Trust Global Investments (2000-2005). |
1 |
Current: Madison Funds (15 portfolios) (2019-present); Manager Directed Portfolios, a U.S. Bancorp series trust (10 portfolios) (2016-present). Former: Guestlogix Inc. (2015-2016) (travel technology). |
|||||
|
INTERESTED TRUSTEE: |
||||||||||
|
Theodore J. Brombach* |
Trustee, President and Chief Executive Officer |
Trustee since 2017 |
Current: Co-Chief Executive Officer of XAI (2016-present); Co-Founding Partner of XMS Capital Partners, LLC (2006-present). Former: Co-Head of Midwest Investment Banking, Managing Director, Founding Member of Financial Sponsors Group at Morgan Stanley (1990-2006); Analyst, Kidder, Peabody & Co. (1985-1988). |
1 |
Current: Chair of the Board, Power & Digital Infrastructure Acquisition II Corp. (2021-present); RiverWood Bank (2006-present). Former: Chair of the Board, Power & Digital Infrastructure Acquisition Corp. (2020-2022). |
|||||
____________
* Mr. Brombach is an interested person of the Trust because of his position as an officer of the Adviser and certain of its affiliates.
(1) The business address of each Trustee of the Trust is 321 North Clark Street, Suite 2430, Chicago, Illinois 60654, unless otherwise noted.
(2) See “Composition of the Board.”
(3) The Trust is the only fund in the “Fund Complex.”
Trustee Qualifications
The Board has determined that each Trustee should serve as a Trustee of the Trust based on several factors (none of which alone is determinative). The Board believes that the Trustees have balanced and diverse experiences, skills, attributes and qualifications, which allow the Board to operate effectively in governing the Trust and protecting the interests of shareholders. Among the factors the Board considered when concluding that an individual should serve on the Board were the following: availability and commitment to attend meetings and perform the responsibilities of a Trustee; personal and professional background; educational background; financial expertise; ability to review critically, evaluate and discuss information provided to them; and ability to interact effectively with XA Investments LLC, the Trust’s investment adviser (the “Adviser”), Octagon Credit Investors, LLC, the Trust’s investment sub-adviser (the “Sub-Adviser”), other service providers, counsel, auditors and other trustees. Each Trustee’s ability to perform his duties effectively is evidenced by professional accomplishments; prior and current business, consulting and public service positions; service on boards of public and private companies and not-for-profit entities and other organizations; and prior experience in fields related to the operations of the Trust.
6
Following is a summary of various qualifications, experiences and skills of each Trustee (in addition to business experience during the past five years as set forth in the table above) that contributed to the Board’s conclusion that an individual should serve on the Board. References to the qualifications, attributes and skills of Trustees do not constitute the holding out of any Trustee as being an expert under Section 7 of the Securities Act of 1933 or the rules and regulations of the SEC.
Theodore J. Brombach. Mr. Brombach has served as a Trustee of the Trust since its inception in 2017. Through his over 30 years of investment experience in the financial industry, including as Co-Chief Executive Officer of XAI, founding partner of XMS Capital Partners, LLC, Chairman of Power & Digital Infrastructure Acquisition Corp., Chairman of Power & Digital Infrastructure Acquisition Corp. II, and Co-Head of Midwest Investment Banking at Morgan Stanley, Mr. Brombach is experienced in financial, regulatory and investment matters.
Danielle Cupps. Ms. Cupps has served as a Trustee of the Trust since its inception in 2017. Through her experience as a Director of CEO & Financial Communications, at McDonald’s Corporation, Managing Director at Kinzie Capital Partners, a private equity firm, Managing Director at BLG Capital Advisors, a family office managing a global portfolio of alternative assets, in various roles, including Director of Corporate and Strategic Development and Chief of Staff in the Office of the Chief Financial Officer, at Boeing Company, Vice President at Code Hennessy & Simmons LLC, a private equity firm, and Associate in the private equity funds group at Goldman, Sachs & Co., Ms. Cupps is experienced in financial, regulatory and investment matters.
Gregory G. Dingens. Mr. Dingens has served as a Trustee of the Trust since its inception in 2017. Through his over 25 years of investment management experience, including as Executive Vice President of Monroe Financial Partners, Inc., Member of Siena Capital Partners, a private investment fund, director of Qwickrate LLC, and Managing Director at both Lehman Brothers and Merrill Lynch, Mr. Dingens is experienced in financial, regulatory and investment matters.
Philip G. Franklin. Mr. Franklin has served as a Trustee of the Trust since its inception in 2017. Through his experience as Chairman of Tribune Publishing Company, Chief Financial Officer and Executive Vice President of Littelfuse, Inc. and Chief Financial Officer and Vice President at OmniQuip International, Mr. Franklin is experienced in financial, accounting and regulatory matters.
Scott Craven Jones. Mr. Jones has served as a Trustee of the Trust since its inception in 2017. Through his experience as a director at Carne Global Financial Services (US) LLC, Chief Operating Officer, Chief Financial Officer and Treasurer of Aurora Investment Management LLC, Executive Vice President and Chief Administrative Officer of Calamos Asset Management, Inc., Managing Director at Northern Trust Global Investments, in various roles at Nuveen Investments and as a trustee at various other fund complexes, Mr. Jones is experienced in financial, accounting, regulatory and investment matters.
Executive Officers
The following information relates to the executive officers of the Trust who are not Trustees. The officers of the Trust were appointed by the Board and will serve until their respective successors are chosen and qualified. The principal business address of each executive officer is 321 North Clark Street, Suite 2430, Chicago, Illinois 60654.
|
Name, Business |
Position |
Term of Office(2) |
Principal Occupations |
|||
|
Kimberly Ann Flynn |
Vice President |
Officer since 2017 |
Current: Managing Director of XAI (2016-present). Former: Senior Vice President, Head of Product Development (2013-2016), Vice President (2009-2013), Assistant Vice President (2007-2009) and Associate (2004-2007), Nuveen Investments. |
7
|
Name, Business |
Position |
Term of Office(2) |
Principal Occupations |
|||
|
Benjamin D. |
Chief Legal Officer and Secretary |
Officer since 2019 |
Current: General Counsel & Managing Director (2019-present); Chief Compliance Officer (2021-present), XAI. Former: Associate, Drinker Biddle & Reath LLP (2015-2019); Associate Counsel, First Trust Portfolios LP (2012-2015). |
|||
|
Derek Mullins |
Chief Financial Officer and Treasurer |
Officer since 2020 |
Current: Managing Partner, PINE Advisors, LLC (2018-present); Chief Financial Officer and Treasurer, Destra Investment Trust (2 portfolios) (2018-present); Chief Financial Officer and Treasurer, Destra International & Event-Driven Credit Fund (2018-present); Chief Financial Officer and Treasurer, Destra Multi-Alternative Fund (2018-present); Chief Financial Officer and Treasurer, Primark Private Equity Investments Fund (2020-present); Chief Financial Officer and Treasurer, Bow River Capital Evergreen Fund (2020-present); Chief Financial Officer and Treasurer, Forum CRE Income Fund (2011-present); Chief Financial Officer, Altmore BDC, Inc. (2021-present). Former: Director of Operations, ArrowMark Partners LLC (2009-2018), Chief Financial Officer and Treasurer, Meridian Fund, Inc. (2013-2018); Chief Financial Officer and Treasurer, Emles Trust (7 portfolios) (2020-2021). |
|||
|
John “Yogi” Spence |
Vice President |
Officer since 2017 |
Current: Co-Chief Executive Officer, XAI (2016-present); Co-Founding Partner, XMS Capital Partners, LLC (2006-present). |
|||
|
Theodore J. Uhl |
Chief Compliance Officer |
Officer since 2017 |
Current: Vice President and Deputy Chief Compliance Officer, ALPS Fund Services, Inc. (2006-present); Chief Compliance Officer, Financial Investors Trust (2010-present), Centre Funds (2013-present), Reaves Utility Income Fund (2015-present), Alpha Alternative Assets Fund (2021-present), and Granite Shares ETF Trust (2021-present). Former: Internal Audit Manager/Senior Risk Manager, ALPS Fund Services, Inc. (2006-2010). |
____________
(1) The business address of each Officer of the Trust is 321 North Clark Street, Suite 2430, Chicago, Illinois 60654, unless otherwise noted.
(2) Officers serve at the pleasure of the Board and until his or her successor is appointed and qualified or until his or her earlier resignation or removal.
Mr. Mullins serves as Chief Financial Officer and Treasurer of the Trust pursuant to a Services Agreement between the Trust and PINE Advisors, LLC (“PINE”). The Trust pays PINE an annual fee, payable monthly, and reimburses of out-of-pocket expenses. Notwithstanding the Services Agreement, the designation of the Chief Financial Officer and Treasurer must be approved by the Board.
Mr. Uhl serves as Chief Compliance Officer of the Trust pursuant to a Chief Compliance Officer Services Agreement between the Trust and ALPS Fund Services Inc. The Trust pays ALPS Fund Services Inc. an annual fee, payable monthly, and reimburses out-of-pocket expenses. Notwithstanding the Chief Compliance Officer Services
8
Agreement, the designation of the Chief Compliance Officer must be approved by the Board, including a majority of the Independent Trustees, and such Chief Compliance Officer may be removed from his responsibilities by action of (and only with the approval of) the Board, including a majority of the Independent Trustees.
Board Leadership Structure
The primary responsibility of the Board is to represent the interests of the Trust and to provide oversight of the management of the Trust. The Trust’s day-to-day operations are managed by the Adviser, the Sub-Adviser and other service providers who have been approved by the Board. The Board is currently comprised of five Trustees, four of whom (including the chairperson) are Independent Trustees and one of whom is classified as an Interested Trustee. Generally, the Board acts by majority vote of all the Trustees, including a majority vote of the Independent Trustees if required by applicable law.
The Board has appointed an independent chairperson, Gregory G. Dingens, who presides at Board meetings and who is responsible for, among other things, setting the tone of Board meetings and seeking to encourage open dialogue and independent inquiry among the Trustees and management. The Board meets regularly four times each year to discuss and consider matters concerning the Trust, and also holds special meetings to address matters arising between regular meetings. Regular meetings generally take place in-person; other meetings may take place in-person or by telephone. The Board has established two standing committees (as described below) and has delegated certain responsibilities to those committees, each of which is comprised solely of Independent Trustees. The Board and its committees will meet periodically throughout the year to oversee the Trust’s activities, review contractual arrangements with service providers, review the Trust’s financial statements, oversee compliance with regulatory requirements, and review performance. The Independent Trustees are represented by independent legal counsel at Board and committee meetings and regularly meet outside the presence of Trust management. The Board has determined that this leadership structure, including an independent chairperson, a supermajority of Independent Trustees and committee membership limited to Independent Trustees, is appropriate in light of the characteristics and circumstances of the Trust.
Board Committees
The Trustees have determined that the efficient conduct of the Trust’s affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. The committees meet as often as necessary, either in conjunction with regular meetings of the Trustees or otherwise. The standing committees of the Board are the Audit Committee and the Governance Committee.
Audit Committee. Danielle Cupps, Gregory Dingens, Philip Franklin and Scott Craven Jones, who are Independent Trustees, serve on the Trust’s Audit Committee. Mr. Jones serves as chairperson of the Audit Committee and has been identified as the Audit Committee Financial Expert of the Trust. The Audit Committee is generally responsible for reviewing and evaluating issues related to the accounting and financial reporting policies and internal controls of the Trust and, as appropriate, the internal controls of certain service providers, overseeing the quality and objectivity of the Trust’s financial statements and the audit thereof and acting as a liaison between the Board of Trustees and the Trust’s independent registered public accounting firm.
The Audit Committee presents the following report:
The Audit Committee oversees the Trust’s financial reporting process on behalf of the Board of Trustees and operates under a written charter adopted by the Board of Trustees. The Audit Committee meets with management of the Trust and the Trust’s independent registered public accounting firm and reports the results of its activities to the Board of Trustees. Management of the Trust has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. In connection with the responsibilities of the Audit Committee and independent registered public accounting firm of the Trust, management of the Trust has advised that the Trust’s financial statements for the past fiscal year were prepared in conformity with the generally accepted accounting principles.
The Committee has reviewed and discussed with management and the independent registered public accounting firm of the Trust the audited financial statements of the Trust for the past fiscal year. The Audit Committee discussed with the Trust’s independent registered public accounting firm the matters required to be discussed by AS 1301 issued by the Public Company Accounting Oversight Board. The Audit Committee received the written
9
disclosures and the letter from the Trust’s independent registered public accounting firm as required by Public Company Accounting Oversight Board’s Ethics & Independence Rule 3526 and has discussed with the Trust’s independent registered public accounting firm the independence of the Trust’s independent registered public accounting firm.
Based on the Audit Committee’s reviews and discussions referred to above, including its discussion with management and the Trust’s independent registered public accounting firm, the Audit Committee recommended to the Board of Trustees and approved, pursuant to authority delegated by Board of Trustees, that the audited financial statements be included in the Trust’s Annual Report for the past fiscal year.
Submitted by the Audit Committee of the Board of Trustees:
Danielle C. Cupps, Gregory G. Dingens, Philip G. Franklin and Scott Craven Jones
February 22, 2022
The Audit Committee is governed by a written Audit Committee Charter, which was approved by the Board on May 5, 2017. A copy of the Audit Committee Charter is available on the Fund’s website at www.xainvestments.com/XFLT.
Governance Committee. Danielle Cupps, Gregory Dingens, Philip Franklin and Scott Craven Jones, who are Independent Trustees, serve on the Trust’s Governance Committee. Mr. Franklin serves as chairperson of the Governance Committee. The Governance Committee is responsible for recommending qualified candidates to the Board of Trustees in the event that a position is vacated or created. In considering trustee nominee candidates, the Governance Committee takes into account a wide variety of factors, including the overall diversity of the Board’s composition. The Governance Committee believes the Board generally benefits from diversity of background, experience and views among its members, and considers this a factor in evaluating the composition of the Board, but has not adopted any specific policy in this regard.
The Governance Committee would consider recommendations by shareholders if a vacancy were to exist. In considering candidates recommended to the Governance Committee by shareholders, the Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. The Governance Committee may also take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held. In order to be considered, such recommendations should be forwarded to the Secretary of the Trust, c/o XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654.
The Governance Committee is governed by a written Governance Committee Charter, which was approved by the Board on May 5, 2017. A copy of the Governance Committee Charter is available on the Fund’s website at www.xainvestments.com/XFLT.
10
Beneficial Ownership of Securities
As of the Record Date, each Trustee of the Trust beneficially owned equity securities of the Trust and all of the registered investment companies in the family of investment companies overseen by the Trustee in the dollar range amounts specified below.
|
Name |
Number of |
Percentage of |
Dollar Range of |
Aggregate Dollar |
||||
|
Independent Trustees: |
||||||||
|
Danielle Cupps |
30,000 |
* |
Over $100,000 |
Over $100,000 |
||||
|
Gregory G. Dingens |
28,200 |
* |
Over $100,000 |
Over $100,000 |
||||
|
Philip G. Franklin |
60,637 |
* |
Over $100,000 |
Over $100,000 |
||||
|
Scott Craven Jones |
7,128 |
* |
$50,001 – $100,000 |
$50,001 – $100,000 |
||||
|
Interested Trustee: |
||||||||
|
Theodore J. Brombach(2) |
421,376 |
1.3% |
Over $100,000 |
Over $100,000 |
____________
(1) The Trust is the only fund in the “Family of Investment Companies.”
(2) In addition, the Adviser holds 10,205 Shares of the Trust, purchased to provide the Trust with over $100,000 of net capital as required by the 1940 Act. Mr. Brombach may be deemed to be a beneficial owner of the Shares held by the Adviser by virtue of his control over the Adviser.
* Less than 1%.
As of the Record Date, executive officers of the Trust, who are not Trustees, beneficially owned equity securities of the Trust in the following amounts:
|
Name |
Number of Common Shares of the Trust Owned |
Percentage of Outstanding Common Shares Owned |
||
|
Kimberly Ann Flynn |
37,800 |
* |
||
|
Benjamin D. McCulloch |
643 |
* |
||
|
Derek Mullins |
None |
— |
||
|
John “Yogi” Spence(1) |
490,710 |
1.5% |
||
|
Theodore J. Uhl |
None |
— |
____________
(1) In addition, the Adviser holds 10,205 Shares of the Trust, purchased to provide the Trust with over $100,000 of net capital as required by the 1940 Act. Mr. Spence may be deemed to be a beneficial owner of the Shares held by the Adviser by virtue of his control over the Adviser.
* Less than 1%.
As of the Record Date, the Trustees and officers of the Trust as a group owned approximately 3.4% of the outstanding Common Shares of the Trust.
13
Trustee Compensation
The following table sets forth the compensation paid to each Trustee by the Trust and the total compensation paid to each Trustee by funds in the Fund Complex for the Trust’s fiscal year ended September 30, 2021. The Trust’s officers and the Trustee who is an interested person of the Adviser receive no compensation from the Trust but may be officers or employees of the Adviser and may receive compensation in such capacities.
|
Name(1) |
Aggregate Compensation from the Trust |
Pension or |
Estimated |
Total |
||||||
|
Independent Trustees: |
|
|
||||||||
|
Danielle Cupps |
$ |
42,250 |
None |
None |
$ |
42,250 |
||||
|
Gregory G. Dingens |
$ |
52,500 |
None |
None |
$ |
52,500 |
||||
|
Philip G. Franklin |
$ |
47,500 |
None |
None |
$ |
47,500 |
||||
|
Scott Craven Jones |
$ |
47,500 |
None |
None |
$ |
47,500 |
||||
____________
(1) Trustees not entitled to compensation are not included in the table.
(2) The Trust does not accrue or pay retirement or pension benefits to Trustees.
(3) The Trust is the only fund in the “Fund Complex.”
Trustee Communications
Shareholders and other interested parties may contact the Board or any member of the Board by mail. To communicate with the Board or any member of the Board, correspondence should be addressed to the Board or the Board member(s) with whom you wish to communicate by either name or title. All such correspondence should be sent c/o the Secretary of the Trust, c/o XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654. A shareholder communication must (i) be in writing and signed by the shareholder, (ii) provide contact information for the shareholder, (iii) identify that it relates to the Trust and (iv) identify the number of shares held by the shareholder.
Board Meetings
During the Trust’s fiscal year ended September 30, 2021, the Board held nine meetings, the Trust’s Audit Committee held five meetings, and the Trust’s Governance Committee held two meetings.
It is the Trust’s policy to invite Trustees to attend annual meetings of shareholders, either in person or telephonically. All of the Trustees attended the Trust’s annual meeting of shareholders held on May 18, 2021 by virtual means.
Shareholder Approval
The affirmative vote of a majority of the Shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting at which a quorum is present is necessary to elect a Trustee nominee. The holders of Shares will have equal voting rights (i.e., one vote per Share). Abstentions will have the same effect as votes against the proposal. “Broker non-votes” (i.e., Shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owner or the persons entitled to vote and (ii) the broker does not have discretionary voting power on a particular matter) will have no effect on the outcome of the vote on the Proposal.
Board Recommendation
The Board, including the Independent Trustees, unanimously recommends that shareholders of the Trust vote “FOR” each nominee of the Board.
14
ADDITIONAL INFORMATION
Further Information About Voting and the Annual Meeting
Quorum. The holders of a majority of the Shares entitled to vote on any matter at a meeting present in person or by proxy shall constitute a quorum at such meeting of the shareholders for purposes of conducting business on such matter. Abstentions and broker non-votes will be counted as Shares present at the Annual Meeting for quorum purposes.
Record Date. The Board has fixed the close of business on April 1, 2022 as the Record Date for the determination of shareholders of the Trust entitled to notice of, and to vote at, the Annual Meeting. Shareholders of the Trust as of the close of business on the Record Date will be entitled to one vote for each Share held and a fractional vote with respect to fractional Shares with no cumulative voting rights.
How to Vote Your Shares. Whether or not you plan to attend the Annual Meeting, we urge you to complete, sign, date, and return the enclosed proxy card in the postage-paid envelope provided or vote via telephone or the Internet so your Shares will be represented at the Annual Meeting. Instructions regarding how to vote via telephone or the Internet are included on the enclosed proxy card. The required control number for Internet and telephone voting is printed on the enclosed proxy card. The control number is used to match proxy cards with shareholders’ respective accounts and to ensure that, if multiple proxy cards are executed, Shares are voted in accordance with the proxy card bearing the latest date.
All Shares represented by properly executed proxies received prior to the Annual Meeting will be voted at the Annual Meeting in accordance with the instructions marked thereon or otherwise as provided therein. If any other business is brought before the Annual Meeting, your Shares will be voted at the proxies’ discretion. If you sign the proxy card, but don’t fill in a vote, your Shares will be voted in accordance with the Board’s recommendation.
Shareholders who execute proxy cards or record voting instructions via telephone or the Internet may revoke them at any time before they are voted by filing with the Secretary of the Trust a written notice of revocation, by delivering (including via telephone or the Internet) a duly executed proxy bearing a later date or by attending the Annual Meeting and voting in person. Merely attending the Annual Meeting, however, will not revoke any previously submitted proxy.
Attending the Annual Meeting. If you wish to attend the Annual Meeting and vote in person, you will be able to do so. If you intend to attend the Annual Meeting in person and you are a record holder of Shares, in order to gain admission you must show photographic identification, such as your driver’s license. If you intend to attend the Annual Meeting in person and you hold your Shares through a bank, broker or other custodian, in order to gain admission you must show photographic identification, such as your driver’s license, and satisfactory proof of ownership of Shares, such as your voting instruction form (or a copy thereof) or broker’s statement indicating ownership as of the Record Date. If you hold your Shares in a brokerage account or through a bank or other nominee, you will not be able to vote in person at the annual meeting unless you have previously requested and obtained a “legal proxy” from your broker, bank or other nominee and present it at the Annual Meeting. You may contact the Trust at (888) 903-3358 to obtain directions to the site of the Annual Meeting.
The Trust currently intends to hold the Annual Meeting in person. However, the Trust is actively monitoring the coronavirus (COVID-19) pandemic; the Trust is sensitive to the public health and travel concerns shareholders may have and the protocols that federal, state, and local governments and health officials may impose or recommend. In the event the Trust determines it is not possible or advisable to hold the Annual Meeting in person, the Trust will publicly announce alternative arrangements for the meeting as promptly as practicable before the Annual Meeting, which may include holding the Annual Meeting solely by means of remote communication (i.e., a virtual-only Annual Meeting). Please monitor the Trust’s website for updated information. If you are planning to attend the Annual Meeting, please check the website prior to the meeting date.
Additional Information Regarding Voting. Broker-dealer firms holding Shares in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their Shares on the proposal before the Annual Meeting. The Trust understands that, under the rules of the NYSE, such broker-dealer firms may for certain “routine” matters, without instructions from their customers and clients, grant discretionary authority to the proxies designated by the Board to vote if no instructions have been received prior to the date specified
15
in the broker-dealer firm’s request for voting instructions. The Proposal is a “routine” matter and beneficial owners who do not provide proxy instructions or who do not return a proxy card may have their Shares voted by broker dealer firms in favor of the Proposal. A properly executed proxy card or other authorization by a beneficial owner of Shares that does not specify how the beneficial owner’s Shares should be voted on the Proposal may be deemed an instruction to vote such Shares in favor of the Proposal. Broker-dealers who are not members of the NYSE may be subject to other rules, which may or may not permit them to vote your Shares without instruction. We urge you to provide instructions to your broker or nominee so that your votes may be counted.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 24, 2022
This Proxy Statement is available on the Internet at www.proxyvote.com.
Adviser
XA Investments LLC serves as the investment adviser to the Trust and is responsible for overseeing the Trust’s overall investment strategy and its implementation, including the use of leverage by the Trust. The Adviser is an investment adviser registered under the Investment Advisers Act of 1940 and acts as investment adviser to certain other management investment companies. The Adviser is a Delaware limited liability company, with its principal offices located at 321 North Clark Street, Suite 2430, Chicago, Illinois 60654. The Adviser is controlled by Theodore J. Brombach, Co-Chief Executive Officer of the Adviser and a founding partner of XMS Capital Partners, LLC, and John “Yogi” Spence, Co-Chief Executive Officer of the Adviser and a founding partner of XMS Capital Partners, LLC.
XAI was founded by the principals of XMS Capital Partners, LLC in April 2016. The Adviser’s leadership team believes that the investing public needs better access to a broader range of alternative investment strategies and managers. The Adviser sponsors registered investment companies designed to provide investors with access to institutional-caliber alternative investments, by partnering with established alternative asset managers selected from numerous alternative credit managers, hedge fund managers and private debt and equity firms to sub-advise the Adviser’s funds. As of March 31, 2022, the Adviser managed approximately $410 million in assets. The Adviser is located at 321 North Clark Street, Suite 2430, Chicago, Illinois 60654.
Sub-Adviser
Octagon Credit Investors, LLC (the “Sub-Adviser”) acts as investment sub-adviser to the Trust and is responsible for investing the Trust’s assets. The Sub-Adviser is an investment adviser registered under the Advisers Act. The Sub-Adviser is a Delaware limited liability company, with its principal offices located at 250 Park Avenue, 15th Floor, New York, NY 10177. Octagon Credit Investors, LLC is majority-owned by Conning & Company, which is an indirect subsidiary of Cathay Financial Holding Co., Ltd., a Taiwan-based company.
The Sub-Adviser’s experienced team of investment professionals has worked together for many years and managed funds through multiple credit cycles over Octagon’s 25-plus year history. The Sub-Adviser currently manages $31.0 billion in assets under management as of March 31, 2022 across 42 collateralized loan obligations, 10 commingled funds and 17 separately managed accounts.
Administrator
ALPS Fund Services Inc., located at 1290 Broadway, Suite 1100, Denver, CO 80203, serves as administrator to the Trust.
Independent Registered Public Accounting Firm
Cohen & Company, Ltd. (“Cohen & Company”), has been selected as the Trust’s independent registered public accounting firm by the Audit Committee and ratified by a majority of the Board, including all of the Independent Trustees, to audit the accounts of the Trust for the fiscal year ending September 30, 2022. The Trust does not know of any direct or indirect financial interest of Cohen & Company in the Trust. Representatives of Cohen & Company will be invited to attend the Annual Meeting either in person or telephonically and will have the opportunity to make a statement and to answer questions if they desire to do so.
16
Cohen & Company served as the Trust’s independent registered public accounting firm for the fiscal year ended September 30, 2021. Cohen & Company replaced KPMG LLP (“KPMG”), the Trust’s prior independent registered public accounting firm.
KPMG’s audit reports on the Trust’s financial statements as of and for the fiscal year ended September 30, 2020 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal year ended September 30, 2020, there were (i) no disagreements between the Company and KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference thereto in their reports, and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Audit Fees
The aggregate fees billed for professional services rendered by KPMG for the fiscal year ended September 30, 2020 and through April 12, 2021 of fiscal year ended September 30, 2021 for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements was $105,000 and $0, respectively. The aggregate fees billed for professional services rendered by Cohen & Company from April 12, 2021 to the fiscal year ended September 30, 2021 the for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements was $90,000.
Audit-Related Fees
The aggregate fees billed for the fiscal year ended September 30, 2020 and through April 12, 2021 of fiscal year ended September 30, 2021 for assurance and related services rendered by KPMG that are reasonably related to the performance of the audit of the Trust’s financial statements was $40,500 and $118,000, respectively. The aggregate fees billed from April 12, 2021 to the fiscal year ended September 30, 2021 for assurance and related services rendered by Cohen & Company that are reasonably related to the performance of the audit of the Trust’s financial statements was $0.
Tax Fees
The aggregate fees billed for the fiscal year ended September 30, 2020 and through April 12, 2021 of fiscal year ended September 30, 2021 for professional services rendered by KPMG for tax compliance, tax advice, and tax planning was $26,000 and $0, respectively. The aggregate fees billed from April 12, 2021 to the fiscal year ended September 30, 2021 for professional services rendered by Cohen & Company for tax compliance, tax advice, and tax planning was $15,000.
All Other Fees
The aggregate fees billed for the fiscal year ended September 30, 2020 and through April 12, 2021 of fiscal year ended September 30, 2021 for products and services provided by KPMG, other than the services reported above in Audit Fee, Audit-Related Fees, and Tax Fees were $0 and $0, respectively. The aggregate fees billed from April 12, 2021 to the fiscal year end September 30, 2021 for products and services provided by Cohen & Company, other than the services reported above in Audit Fee, Audit-Related Fees, and Tax Fees was $0.
Aggregate Non-Audit Fees
The aggregate non-audit fees billed by KPMG for services rendered to the Trust, and rendered to the Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Trust for the last two fiscal years ended September 30, 2020 and September 30, 2021 was $0 and $0, respectively. For the fiscal year ended September 30, 2020 and through April 12, 2021 of fiscal year ended September 30, 2021 KPMG did not bill the Trust for products and services other than the services reported above. From April 12, 2021 to the fiscal year ended September 30, 2021 Cohen & Company did not bill the Trust for products and services other than the services reported above.
17
Audit Committee’s Pre-Approval Policies and Procedures
For the Trust’s two most recently completed fiscal years ended September 30, 2020 and September 30, 2021, respectively, the Audit Committee approved the engagement of KPMG and Cohen & Company, respectively, to provide all audit services. For the Trust’s two most recently completed fiscal years ended September 30, 2020 and September 30, 2021, no other services were provided by KPMG or Cohen & Company to the Trust, the Adviser or any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Trust.
For the Trust’s two most recently completed fiscal years ended September 30, 2020 and September 30, 2021, none of the services described above were approved by the Audit Committee pursuant to the pre-approval exception under Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the SEC.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 30(h) of the 1940 Act require the Trust’s officers and Trustees, certain officers of the Adviser, affiliated persons of the Adviser, and persons who beneficially own more than ten percent of the Trust’s shares to file certain reports of ownership (“Section 16 filings”) with the SEC. Based upon the Trust’s review of such Section 16 filings, the Trust believes that for its fiscal year ended September 30, 2021, all filings applicable to such persons were completed and filed on time and in good order.
Principal Shareholders
The following table lists each person who, to the knowledge of the Trust, beneficially owned more than 5% of any class of equity securities of the Trust as of the Record Date. The information contained in this table is based on the Trust’s review of Schedule 13D, Schedule 13G and other regulatory filings.
|
Shareholder Name and Address |
Class of Shares |
Share Holdings |
Percentage Owned |
|||
|
Eagle Point Credit Management Entities(1) |
Preferred Shares |
476,057 Shares(2) |
29.83% |
|||
|
Karpus Management, Inc. |
Preferred Shares |
283,500 Shares(3) |
17.76% |
____________
(1) Eagle Point Credit Management LLC (“Eagle Point”) has agreed to “mirror vote” its Preferred Shares; provided that upon written notice to the Fund, Eagle Point may vote up to 5% of its Preferred Shares in a manner other than mirror voting.
(2) Based on a Schedule 13D filed jointly with the SEC on September 20, 2021 by (i) Eagle Point Credit Management LLC, (ii) Eagle Point DIF GP I LLC, (iii) Eagle Point CIF GP I LLC, (iv) Eagle Point Defensive Income Fund US LP, (v) EP DIF Cayman I LP and (vi) Eagle Point Core Income Fund LP (collectively, the “Eagle Point Credit Management Entities”). Includes (a) 228,303 Preferred Shares owned by Eagle Point DIF GP I LLC, (b) 120,000 Preferred Shares owned by Eagle Point CIF GP I LLC, (c) 165,317 Preferred Shares owned by Eagle Point Defensive Income Fund US LP, (d) 62,986 Preferred Shares owned by EP DIF Cayman I LP and (e) 120,000 Preferred Shares owned by Eagle Point Core Income Fund LP. Eagle Point Credit Management LLC is a registered investment adviser and serves as investment adviser to Eagle Point Defensive Income Fund US LP, EP DIF Cayman I LP, Eagle Point CIF GP I LLC and a separately managed account, each of which holds the 6.50% Series 2026 Term Preferred Shares described herein.
(3) Based on a Schedule 13G filed with the SEC on April 9, 2021.
Privacy Principles of the Trust
The Trust is committed to maintaining the privacy of its shareholders and to safeguarding their non-public, personal information. The following information is provided to help you understand what personal information the Trust collects, how the Trust protects that information and why, in certain cases, the Trust may share information with select other parties.
Generally, the Trust does not receive any non-public personal information relating to its shareholders, although certain non-public, personal information of its shareholders may become available to the Trust. The Trust does not disclose any non-public, personal information about its shareholders or former shareholders to anyone, except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third-party administrator).
18
The Trust restricts access to non-public, personal information about its shareholders to employees of the Adviser and its delegates and affiliates with a legitimate business need for the information. The Trust maintains physical, electronic and procedural safeguards designed to protect the non-public, personal information of its shareholders.
Deadline for Shareholder Proposals
The Trust’s by-laws require compliance with certain procedures for a shareholder to properly make a nomination for election as a Trustee or to propose other business for the Trust. If a shareholder who is entitled to do so under the by-laws wishes to nominate a person or persons for election as a Trustee or propose other business for the Trust, that shareholder must provide a written notice to the Secretary of the Trust at the Trust’s principal executive offices. Such notice must include certain information about the proponent and the proposal, or in the case of a nomination, the nominee. A copy of the by-laws, which include the provisions regarding the requirements for shareholder nominations and proposals, may be obtained by writing to the Secretary of the Trust, c/o XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654. Any shareholder considering making a nomination or other proposal should carefully review and comply with those provisions of the by-laws.
Shareholder proposals intended for inclusion in the Trust’s proxy statement in connection with the Trust’s 2023 annual meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act must be received by the Trust at the Trust’s principal executive offices by December 21, 2022 in order to be considered for inclusion in the Trust’s proxy statement. Timely submission of a proposal does not necessarily mean that such proposal will be included in the Trust’s proxy statement.
A proposal, other than a proposal submitted pursuant to Rule 14a-8, must be received by the Trust’s Secretary at the Trust’s principal executive offices not earlier than January 24, 2023 and not later than February 23, 2023 (which is also the date after which shareholder nominations and proposals made outside of Rule 14a-8 under the Exchange Act would not be considered “timely” within the meaning of Rule 14a-4(c) under the Exchange Act). If a proposal is not “timely” within the meaning of Rule 14a-4(c), then the persons named as proxies in the proxies solicited by the Board for the 2023 annual meeting of shareholders may exercise discretionary voting power with respect to any such proposal.
Expenses of Proxy Solicitation
The cost of soliciting proxies will be borne by the Trust. Certain officers of the Trust and certain officers and employees of the Adviser (none of whom will receive additional compensation therefore), may solicit proxies by telephone, mail, e-mail and personal interviews. Brokerage houses, banks and other fiduciaries may be requested to forward proxy solicitation material to their principals to obtain authorization for the execution of proxies and will be reimbursed by the Trust for such out-of-pocket expenses.
Other Matters
The management of the Trust knows of no other matters that are to be brought before the Annual Meeting. However, if any other matters not now known properly come before the Annual Meeting, it is the intention of the persons named in the enclosed form of proxy to vote such proxy in accordance with their judgment on such matters.
Failure of a quorum to be present at the Annual Meeting may result in an adjournment. The chairperson of the Annual Meeting may move for an adjournment to permit further solicitation of proxies if the chair determines that adjournment and further solicitation are reasonable and in the best interests of shareholders. Any adjourned meeting or meetings may be held without the necessity of another notice. For purposes of determining the presence of a quorum, abstentions and broker non-votes will be treated as shares that are present at the meeting.
Please vote promptly by signing and dating each enclosed proxy card and returning it in the accompanying postage-paid return envelope or by following the enclosed instructions to vote by telephone or over the Internet.
April 13, 2022
19
SCAN TO VIEW MATERIALS & VOTE XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST C/O ALPS FUND SERVICES, INC. 1290 BROADWAY, SUITE 1000 DENVER, CO 80203 To vote by Internet 1) Read the Proxy Statement and have the proxy card below at hand. 2) Go to website www.proxyvote.com or scan the QR Barcode above 3) Follow the instructions provided on the website. To vote by Telephone 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions. To vote by Mail 1) Read the Proxy Statement. 2) Check the appropriate box on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. D78731-P72565 The Board of Trustees recommends you vote FOR the nominee listed. 1. Election of Class II Trustee of the Trust, to be elected by common shares and preferred shares voting as a single class, to serve until the 2025 annual meeting, or until his successor is duly elected and qualified. For Against Abstain Nominee 1a. Gregory G. Dingens 2. To transact such other business as may properly come before the meeting or any adjournments, postponements or delays thereof. Please complete, date and sign this proxy and return it promptly in the enclosed envelope. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Proxy Statement is available at www.proxyvote.com. D78732-P72565 Solicited on Behalf of the Board of Trustees XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST ANNUAL MEETING OF SHAREHOLDERS May 24, 2022 The undersigned shareholder of XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) hereby appointsBenjamin McCulloch and Kimberly Ann Flynn, and either of them, the proxies of the undersigned, with full power of substitution, to represent and vote all of the shares of the Trust standing in the name of the undersigned at the close of business on April 1, 2022,at an Annual Meeting of Shareholders that will be held at the offices of the Trust’s investment adviser, XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654 on Tuesday, May 24, 2022, at 9:00 a.m. (Central Time) and at any and all adjournments, postponements or delays thereof, with all of the powers the undersigned would possess if then and there personally present and especially (but without limiting the general authorization and power hereby given) to vote as indicated on the proposal, as more fully described in the Proxy Statement for the meeting. SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED AS TO THE PROPOSAL, THE PROXIES SHALL VOTE FOR SUCH PROPOSAL. THE PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS, POSTPONEMENTS OR DELAYS THEREOF. PLEASE SIGN AND DATE ON THE REVERSE SIDE
SCAN TO VIEW MATERIALS & VOTE XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST C/O ALPS FUND SERVICES, INC. 1290 BROADWAY, SUITE 1000 DENVER, CO 80203 To vote by Internet 1) Read the Proxy Statement and have the proxy card below at hand. 2) Go to website www.proxyvote.com or scan the QR Barcode above 3) Follow the instructions provided on the website. To vote by Telephone 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions. To vote by Mail 1) Read the Proxy Statement. 2) Check the appropriate boxes on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. D78733-P72565 The Board of Trustees recommends you vote FOR the nominees listed. 1. Election of Class II Trustees of the Trust to serve until the 2025 annual meeting, or until his or her successor is duly elected and qualified, as follows: Class II Trustee nominee to be elected by holders of common shares and preferred shares voting as a single class: Against Abstain For 1a. Gregory G. Dingens Class II Trustee nominee to be elected by holders of preferred shares voting as a separate class: For Against Abstain 1b. Philip G. Franklin 2. To transact such other business as may properly come before the meeting or any adjournments, postponements or delays thereof. Please complete, date and sign this proxy and return it promptly in the enclosed envelope. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Proxy Statement is available at www.proxyvote.com. D78734-P72565 Solicited on Behalf of the Board of Trustees XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST ANNUAL MEETING OF SHAREHOLDERS May 24, 2022 The undersigned shareholder of XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) hereby appointsBenjamin McCulloch and Kimberly Ann Flynn, and either of them, the proxies of the undersigned, with full power of substitution, to represent and vote all of the shares of the Trust standing in the name of the undersigned at the close of business on April 1, 2022,at an Annual Meeting of Shareholders that will be held at the offices of the Trust’s investment adviser, XA Investments LLC, 321 North Clark Street, Suite 2430, Chicago, Illinois 60654 on Tuesday, May 24, 2022, at 9:00 a.m. (Central Time) and at any and all adjournments, postponements or delays thereof, with all of the powers the undersigned would possess if then and there personally present and especially (but without limiting the general authorization and power hereby given) to vote as indicated on the proposals, as more fully described in the Proxy Statement for the meeting. SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED AS TO THE PROPOSALS, THE PROXIES SHALL VOTE FOR SUCH PROPOSALS. THE PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS, POSTPONEMENTS OR DELAYS THEREOF. PLEASE SIGN AND DATE ON THE REVERSE SIDE