Target Fund Shareholder
|
Percentage of
Outstanding Shares
in Fund
|
Percentage of
Outstanding Shares
of Combined Fund
|
Rochdale Alternative Total Return Offshore Fund LP
570 Lexington Avenue
New York, NY 10022
|
29.40%
|
1.33%
|
City National Rochdale LLP (General Partner)
570 Lexington Avenue
New York, NY 10022
|
6.36%
|
0.29%
|
|
|
|
Acquiring Fund Shareholder
|
Percentage of
Outstanding Shares
in Fund
|
Percentage of
Outstanding Shares
of Combined Fund
|
City National Bank
Fiduciary for Various Accounts
Attn: Trust Ops/Mutual Funds
555 S. Flower Street, Floor 10
Los Angeles, CA 90071
|
20.28%
|
19.38%
|
Assetmark Trust Company FBO
Assetmark Inc. and Mutual Clients and FBO Other Custodial Clients
3200 N. Central Avenue, Floor 7
Phoenix, AZ 85012
|
19.79%
|
18.91%
|
The Trustees and officers of the Trust as a group owned beneficially less than 1% of each of the Target Fund’s and the Acquiring Fund’s outstanding shares as of February 28, 2014.
GENERAL INFORMATION
The persons named in the accompanying Proxy will vote in each case as directed in the Proxy, but in the event an executed Proxy without instructions is received by the Trust, they intend to vote
FOR
the proposed Reorganization and may vote in their discretion with respect to other matters that may be presented to the Meeting.
Litigation
Neither the Target Fund nor the Trust is involved in any litigation or proceeding that is believed likely to have any material adverse financial effect upon the ability of CNR to provide investment advisory services or any material adverse effect upon either the Target Fund or the Acquiring Fund.
Other Matters to Come Before the Meeting
Management of the Target Fund does not know of any matters to be presented at the Meeting other than those described in this Prospectus/Proxy Statement. If other business should properly come before the Meeting, the Proxy holders will vote on them in accordance with their best judgment.
Shareholder Proposals
The Meeting is a special meeting of shareholders of the Target Fund. The Target Fund is not required, nor does it intend, to hold regular annual meetings of the Fund’s shareholders. If such a meeting is called, any shareholder who wishes to submit a proposal for consideration at the meeting should submit the proposal promptly to the Secretary of the Trust. Any proposal to be considered for submission to shareholders must comply with applicable federal and state laws.
FINANCIAL HIGHLIGHTS AND FINANCIAL STATEMENTS
The audited annual financial statements and financial highlights of the Target Fund and the Acquiring Fund for the year ended September 30, 2013 are incorporated by reference into the Statement of Additional Information to this Combined Prospectus and Proxy Statement. The audited annual financial statements and financial highlights for the Target Fund have been audited by PKF O’Connor Davies, a division of O’Connor Davies, LLP, independent registered public accountants, to the extent indicated in their report thereon. The audited annual financial statements and financial highlights for the Acquiring Fund have been audited by KPMG LLP, independent registered public accountants, to the extent indicated in their report thereon, and except as described hereafter. The financial highlights for all periods prior to January 1, 2013 for the Acquiring Fund were audited by the independent registered public accounting firm for the Acquiring Fund’s Predecessor Fund.
These annual reports have been incorporated by reference in reliance upon such reports given upon the authority of such firms as an experts in accounting and auditing.
Pro forma financial statements are not included since the net asset value of the Target Fund does not exceed ten percent of the net asset value of the Acquiring Fund, as of February 28, 2014.
INFORMATION FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
Additional information about the Target Fund is included in its Offering Memorandum filed January 10, 2011, as supplemented, which is incorporated by reference herein. The Commission file number for the Target Fund’s Offering Memorandum, filed January 10, 2011, is Registration No. 811-22503. Additional information about the Acquiring Fund is included in its Prospectus and Statement of Additional Information dated January 31, 2014, as amended and/or supplemented. The Commission file numbers for the Trust’s registration statement containing the current Prospectus and Statement of Additional Information for the Acquiring Fund, dated January 31, 2014, are Registration No. 811-07923 and Registration No. 333-16093.
Additional information about each Fund may also be obtained from the each Fund’s Annual Report for the fiscal year ended September 30, 2013, each of which has been filed with the SEC. Copies of the Offering Memorandum, Prospectus, Statement of Additional Information, and Annual Report for the Funds, as applicable, may be obtained without charge by writing to the Funds at 570 Lexington Avenue, New York, New York 10022, by calling the Funds at 1-800-245-9888, or, with respect to the Acquiring Fund, on the Fund’s website,
www.citynationalrochdalefunds.com
. The Funds are subject to certain informational requirements of the Securities Exchange Act of 1934 and the 1940 Act, as applicable, and in accordance with such requirements file reports, proxy statements, and other information with the SEC. Once available, these materials may be inspected and copied:
•
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At the Public Reference Facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549;
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•
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At the SEC's Regional Offices at 233 Broadway, New York, New York, 10279, and 175 W. Jackson Boulevard, Suite 900, Chicago, Illinois 60604;
|
•
|
By e-mail request to publicinfo@sec.gov (for a duplicating fee); and
|
•
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On the SEC’s EDGAR database on the SEC’s Internet Web site at http://www.sec.gov.
|
*****
SHAREHOLDERS ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this “Agreement”) is made as of this __ day of _________, 2014, by and among City National Rochdale Alternative Total Return Fund LLC, a Delaware limited liability company (the “Target Fund”), City National Rochdale Funds, a Delaware statutory trust (the “Trust”), on behalf of City National Rochdale Fixed Income Opportunities Fund, a series thereof (the “Acquiring Fund”), and, solely for purposes of Section 4.4, City National Rochdale, LLC (“CNR”).
WHEREAS, the parties wish to effect a reorganization (the “Reorganization”) which will consist of the transfer of all of the assets of the Target Fund to the Acquiring Fund in exchange for the assumption by the Acquiring Fund of all of the liabilities of the Target Fund and the issuance by the Acquiring Fund of the number of shares of the Acquiring Fund (the “Shares”) described in Section 1.1, and the distribution of the Shares by the Target Fund to its shareholders in complete liquidation and dissolution of the Target Fund, all as more fully set forth in this Agreement.
WHEREAS, the Board of Trustees of the Trust, including a majority of the Trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), and the Board of Managers of the Target Fund, including a majority of the Managers who are “interested persons” of the Target Fund, as defined in the 1940 Act, have each determined that the Reorganization is in the best interests of the shareholders of the Target Fund and the Acquiring Fund, respectively, and that the interests of shareholders of each Fund would not be diluted as a result of the transactions contemplated thereby.
NOW THEREFORE, in consideration of the agreements contained in this Agreement, the parties agree as follows:
Article 1
Transfer of Assets and Liabilities
1.1
Transfer of Assets and Liabilities.
Subject to the terms and conditions set forth herein, on the Closing Date (as hereafter defined) the Target Fund shall transfer all of its assets to the Acquiring Fund. In exchange therefor, the Acquiring Fund shall assume all of the liabilities of the Target Fund and deliver to the Target Fund a number of Class N Shares which is equal to (i) the aggregate net asset value attributable to shares of the Target Fund at the close of business on the business day preceding the Closing Date, divided by (ii) the net asset value per share of such Class of shares of the Acquiring Fund outstanding at the close of business on the business day preceding the Closing Date.
1.2
Liquidation of Target Fund.
Subject to the terms and conditions set forth herein, on the Closing Date the Target Fund shall liquidate and shall distribute pro rata to its shareholders of record in proportion to their respective numbers of shares held, determined as of the close of business on the business day preceding the Closing Date, the Shares received by the Target Fund pursuant to Section 1.1.
1.3
No Issuance of Share Certificates.
The Target Fund shall accomplish the liquidation and distribution provided for herein by opening accounts on the books of the Acquiring Fund in the names of its shareholders and transferring to its shareholders the Shares credited to the account of the Target Fund on the books of the Acquiring Fund. No certificates evidencing Shares shall be issued.
1.4
Time and Date of Valuation.
The number of Shares to be issued by the Acquiring Fund to the Target Fund shall be computed as of 4:00 p.m. (Eastern time) on the business day preceding the Closing Date in accordance with the regular practices of the Target Fund, the Acquiring Fund and the Trust.
1.5
Closing Time and Place.
The Closing Date shall be _________, 2014, or such later date as the parties may mutually agree. All acts taking place on the Closing Date shall be deemed to be taking place simultaneously as of the commencement of business on the Closing Date, unless otherwise provided. The closing of the Reorganization (the “Closing”) shall be held at 5:00 p.m. (Eastern Time) at the offices of CNR, 570 Lexington Avenue, New York, New York 10022, or such other time and/or place as the parties may mutually agree.
1.6
Delay of Valuation.
If on the business day preceding the Closing Date (a) the primary trading market for portfolio securities of either party is closed to trading or trading thereon is restricted, or (b) trading or the reporting of trading is disrupted so that an accurate appraisal of the value of the net assets of either party and an accurate calculation of the number of shares held by each shareholder is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored.
1.7
Termination of Target Fund.
As promptly as practicable after the Closing, the Target Fund shall dissolve.
Article 2
Conditions Precedent to the Effectiveness of the Reorganization
The respective obligation of each party to effect the reorganization contemplated by this Agreement is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
2.1
Shareholder Approval.
On or prior to the Closing Date, the shareholders of the Target Fund shall have approved the transactions contemplated by this Agreement in accordance with the provisions of Delaware law and the 1940 Act.
2.2
No Injunctions or Restraints.
On the Closing Date, no action, suit or other proceeding shall be pending before any court or government agency which seeks to restrain or prohibit or obtain damages or other relief in connection with this Agreement or the transactions contemplated hereby.
2.3
Consents.
All consents of the other party and all other consents, orders and permits of Federal, state and local regulatory authorities deemed necessary by the Target Fund or the Trust to permit consummation, in all material respects, of the transactions contemplated herein shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party or the Trust.
2.4
Effective Registration Statement.
The Form N-1A Registration Statement of the Trust and the Form N-14 Registration Statement of the Trust with respect to the Shares shall continue to be effective and no stop orders suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated.
2.5
Covenants, Representations and Warranties.
Each party shall have performed all of its covenants set forth in Article 4, and its representations and warranties set forth in Article 3 shall be true and correct in all material respects on and as of the Closing Date as if made on such date, and the President of the Trust and the President of the Target Fund shall have executed a certificate to such effect.
2.6
Statement of Assets and Liabilities.
The Target Fund shall have delivered to the Trust on the Closing Date a statement of its assets and liabilities, prepared in accordance with generally accepted accounting principles consistently applied, together with a certificate of its Controller and Chief Operating Officer as to its portfolio securities.
Article 3
Representations and Warranties
The parties represent and warrant as follows:
3.1
Structure and Standing.
The
Target Fund represents and warrants that it is a duly organized limited liability company, validly existing and in good standing under the laws of the State of Delaware, and has the power to own all of its properties and assets and conduct its business. The Acquiring Fund represents and warrants that it is duly organized as a series of a statutory trust, validly existing and in good standing under the laws of the State of Delaware, and has the power to own all of its properties and assets and conduct its business.
3.2
Power.
Each party represents and warrants that it has full power and authority to enter into and perform its obligations under this Agreement; the execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the Board of Trustees of the Trust or Board of Managers of the Target Fund; this Agreement does not violate, and its performance will not result in violation of, any provision of the Declaration of Trust of the Trust or Limited Liability Company Operating Agreement of the Target Fund, or any agreement, instrument or other undertaking to which it is a party or by which it is bound; and this Agreement constitutes its valid and binding contract enforceable in accordance with its terms, subject to the effects of bankruptcy, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors’ rights generally and court decisions with respect thereto.
3.3
Litigation.
Each party represents and warrants that no litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending against it and, to the best of its knowledge, none is threatened against it or any of its properties or assets, which, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business; it knows of no facts which might form the basis for the institution of such proceedings; and it is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially and adversely affects its business or its ability to consummate the transactions herein contemplated.
3.4
Fund Assets.
The Target Fund represents and warrants that on the Closing Date the assets received by the Acquiring Fund from the Target Fund will be delivered to the Acquiring Fund as provided in Section 1.1 free and clear of all liens, pledges, security interests, charges or other encumbrances of any nature whatsoever created by the Target Fund and without any restriction upon the transfer thereof, except for such liabilities assumed as provided in Section 1.1.
3.5
The Shares.
The
Acquiring Fund represents and warrants that on the Closing Date (a) the Shares to be delivered to the Target Fund as contemplated in this Agreement will be duly authorized, validly issued, fully paid and nonassessable; (b) no shareholder of the Acquiring Fund or any other series of the Trust has any preemptive right to subscription or purchase in respect thereof; (c) the Target Fund will acquire the Shares free and clear of all liens pledges, security interests, charges or other encumbrances of any nature whatsoever created by the Trust and without any restriction on the transfer thereof; and (d) the Shares will be duly qualified for offering to the public in all of the states of the United States in which such qualification is required or an exemption from such requirement shall have been obtained.
3.6
Tax Status and Filings.
The Target Fund represents and warrants that it is treated as a partnership and not as a regulated investment company, an association or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. The Acquiring Fund represents and warrants that it is treated as a corporation separate from the other series of the Trust under Section 851(g) of the Internal Revenue Code of 1986, as amended (the “Code”); and it has satisfied the requirements of Subchapter M of the Code for treatment as a regulated investment company for each taxable year since its formation and has elected to be treated as such. Each party further represents that
it has filed or furnished all federal, state, and other tax returns and reports required by law to have been filed or furnished, and it has paid or made provision for payment of, so far as due, all federal, state and other taxes, interest and penalties; that no such return is currently being audited; and that no assessment has been asserted with respect to any such returns or reports.
3.7
Accuracy of Information.
Each party represents and warrants that all information furnished by it to the other party for use in any documents which may be necessary in connection with the transactions contemplated by this Agreement will be accurate and complete and will comply in all material respects with federal securities and other laws and regulations applicable thereto.
3.8
Acquisition of the Shares.
The Target Fund represents and warrants that the Shares it acquires pursuant to this Agreement are not being acquired for the purpose of making any distribution thereof, except in accordance with the terms of this Agreement.
3.9
Financial Statements.
Each party represents and warrants that its Statement of Assets and Liabilities as of September 30, 2013 provided to the other party has been prepared in accordance with generally accepted accounting principles consistently applied, and fairly reflects the financial condition of such party as of such date, and there are no known contingent liabilities of such party as of such date not disclosed therein.
3.10
No Adverse Changes.
Each party represents and warrants that since September 30, 2013, there has not been any material adverse change in its financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business except as otherwise disclosed in writing to and accepted by the other party (for the purposes of this paragraph, a decline in net asset value per share of a party shall not constitute a material adverse change).
3.11
Proxy Statement.
Each party represents and warrants that the Combined Proxy Statement and Prospectus contained in the Form N-14 Registration Statement to be used in connection with the transaction contemplated hereby (only insofar as it relates to such party) will, on its effective date and on the Closing Date, not contain any untrue statement of material fact with respect to such party or omit to state a material fact required to be stated therein with respect to such party or necessary to make the statements therein with respect to such party, in light of the circumstances under which such statements were made, not materially misleading.
Article 4
Covenants
4.1
Conduct of Business.
During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing Date, each party shall operate its business in the ordinary course except as contemplated by this Agreement.
4.2
Shareholder Meeting.
The Target Fund shall call a special meeting of its shareholders as soon as possible for the purpose of considering the reorganization contemplated by this Agreement.
4.3
Preparation of Combined Prospectus and Proxy Statement.
The Acquiring Fund shall prepare and file a combined prospectus and proxy statement with respect to the reorganization with the United States Securities and Exchange Commission in form and substance satisfactory to both parties, and shall use its best efforts to provide that the combined prospectus and proxy statement can be distributed to the shareholders of the Target Fund as promptly as thereafter as practicable. As soon as reasonably practicable, the parties shall also prepare and file any other related filings required under applicable state securities laws.
4.4
Fees and Expenses.
Whether or not this Agreement is consummated, CNR shall bear the costs and expenses of the Target Fund and the Acquiring Fund incurred in connection with this Agreement and the transactions contemplated hereby.
4.5
Provision of Documents.
Each party agrees that it will, from time to time as and when reasonably requested by the other party, provide or cause to be provided to the other party such information, execute and deliver or cause to be executed and delivered to the other party such documents, and take or cause to be taken such further action, as the other party may deem necessary in order to carry out the intent of this Agreement.
4.6
Target Fund Liabilities.
The Target Fund will use its best efforts to discharge all of its financial liabilities and obligations prior to the Closing Date.
4.7
Tax Treatment.
The transactions contemplated by this Agreement are intended to be treated for federal income tax purposes as follows:
|
(a)
|
The contribution by the Target Fund of all of its assets to the Acquiring Fund in exchange for the assumption of all of the liabilities of Target Fund and the issuance of Shares pursuant to Section 1.1 will be treated as a taxable exchange.
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(b)
|
The distribution by the Target Fund of the Shares pursuant to Section 1.2 will be treated as a complete liquidation of the Target Fund, subject to the provisions of Sections 731, 732 and 735 of the Code.
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The Target Fund and the Trust, on behalf of the Acquiring Fund, agree to report the tax consequences of the transactions contemplated by this Agreement in conformity with this Section 4.7.
Article 5
Termination, Amendment and Waiver
5.1
Termination.
This Agreement may be terminated by resolution of the Board of Trustees of the Trust or Board of Managers of the Target Fund at any time prior to the Closing Date, if
|
(a)
|
either party shall have breached any material provision of this Agreement; or
|
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(b)
|
circumstances develop that, in the opinion of such Board, make proceeding with the Reorganization inadvisable; or
|
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(c)
|
any governmental body shall have issued an order, decree or ruling having the effect of permanently enjoining, restraining or otherwise prohibiting the consummation of this Agreement.
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5.2
Effect of Termination.
In the event of any termination pursuant to Section 5.1, there shall be no liability for damage on the part of either party to the other party.
5.3
Amendment.
This Agreement contains the entire agreement of the parties with respect to the reorganization contemplated by the Reorganization and may be amended prior to the Closing Date by the parties in writing at any time; provided, however, that there shall not be any amendment that by law requires approval by the shareholders of a party without obtaining such approval.
5.4
Waiver.
At any time prior to the Closing Date, any of the terms or conditions of this Agreement may be waived by the Board of Managers of the Target Fund or Board of Trustees of the Trust if, in either Board’s judgment after consultation with legal counsel, such action or waiver will not have a material adverse effect on the benefits intended under this Agreement to the shareholders of the Target Fund or the Acquiring Fund, respectively.
Article 6
General Provisions
6.1
Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
6.2
Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person other than the parties hereto and their respective successors and assigns any rights or remedies under or by reason of this Agreement.
6.3
Recourse.
All persons dealing with the Acquiring Fund or the Target Fund must look solely to the property of the Acquiring Fund or the Target Fund for the enforcement of any claims against the Acquiring Fund or the Target Fund, respectively, as neither the trustees, directors, officers, agents nor shareholders of the Acquiring Fund or the Target Fund assume any personal liability for obligations entered into on behalf of the Acquiring Fund or the Target Fund, respectively.
6.4
Notices.
Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to either party at:
If to the Acquiring Fund:
City National Rochdale Funds
400 North Roxbury Drive
Beverly Hills, CA 90210
Attn: Garrett R. D’Alessandro, President
With a copy to:
Bingham McCutchen LLP
Suite 4400
355 South Grand Avenue
Los Angeles, CA 90071
Attn: Michael Glazer
If to the Target Fund:
City National Rochdale Alternative Total Return Fund LLC
570 Lexington Avenue
New York, New York 10022
Attn: Garrett R. D’Alessandro, President
With a copy to:
Bingham McCutchen LLP
Suite 4400
355 South Grand Avenue
Los Angeles, CA 90071
Attn: Michael Glazer
*** Signature Page Follows***
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and attested on its behalf by its duly authorized representatives as of the date first above written.
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CITY NATIONAL ROCHDALE FUNDS, on behalf of its City National Rochdale Fixed Income Opportunities Fund Series
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By:
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_______________________________
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Garrett R. D’Alessandro
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President
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CITY NATIONAL ROCHDALE ALTERNATIVE TOTAL RETURN FUND LLC
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By:
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_______________________________
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Garrett R. D’Alessandro
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President
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Solely for purposes of Section 4.4,
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CITY NATIONAL ROCHDALE, LLC
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By:
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_______________________________
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