UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[x]
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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RIVERNORTH OPPORTUNITIES
FUND, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other
than the Registrant)
Payment of Filing Fee (Check appropriate box):
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[x]
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No fee required
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) Title of Each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration No.:
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RIVERNORTH OPPORTUNITIES FUND, INC.
(the “Fund”)
1290 Broadway, Suite 1000
Denver, Colorado 80203
(855) 830-1222
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 20, 2021 AT 10:00 A.M. MOUNTAIN
TIME
To the Stockholders of the Fund:
Notice is hereby given that the Annual Meeting of
Stockholders (the “Meeting”) of the Fund will be held as a telephone conference call meeting at which no one will be allowed
to attend in person, and at any adjournments thereof on August 20, 2021, at 10:00 a.m. Mountain Time, for the following purposes:
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1.
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To elect two (2) Directors (“Proposal 1”);
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2.
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To vote on a proposal, pursuant to the Fund’s Articles of Incorporation, to convert the Fund to
an open-end investment company (“Proposal 2”); and
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3.
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To consider and vote upon such other matters, including adjournments, as may properly come before the
Meeting or any adjournments thereof.
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These items are discussed in greater detail in the
attached Proxy Statement. The Fund’s Board of Directors has concluded that Proposal 1 is in the best interest of the Fund and
its stockholders and unanimously recommends that you vote “FOR” Proposal 1 and that the continued operation of the Fund as
a closed-end fund is in the best interest of the Fund and its stockholders and unanimously recommends that you vote “AGAINST”
Proposal 2.
Stockholders of record at the close of business on
June 11, 2021 are entitled to a notice of and to vote at the Meeting and any adjournments thereof.
Because of the public health concerns regarding the
coronavirus (COVID-19) pandemic, we will be hosting this year’s Meeting as a telephone conference call. There is no physical location
for the Meeting. To participate in the Meeting, you must email [shareholdermeetings@computershare.com] no later than 5:00 p.m. Eastern
Time on [●], 2021 and provide your full name and address. You will then receive an email from Computershare Fund Services containing
the conference call dial-in information and instructions for participating in the Meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR
HOLDINGS IN THE FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE EITHER VOTE VIA THE INTERNET, BY TELEPHONE
OR COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES.
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By Order of the Board of Directors of:
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RiverNorth Opportunities Fund, Inc.
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Kathryn A. Burns
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President of the Fund
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July 2, 2021
The Meeting is important. Kindly indicate your vote as to the items
to be discussed at the meeting by following the instructions in the attached proxy card or voting instruction form. You may still attend
the Meeting, even if you vote your shares beforehand.
Intentionally Left Blank
RIVERNORTH OPPORTUNITIES FUND, INC.
1290 Broadway, Suite 1000
Denver, Colorado 80203
(855) 830-1222
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
to be held on August 20, 2021
at 10:00 a.m. Mountain Time
This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors (the “Board”) of the RiverNorth Opportunities Fund, Inc. (the “Fund”),
a closed-end investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”), for use at the
Annual Meeting of Stockholders of the Fund (the “Meeting”) to be held on August 20, 2021, at 10:00 a.m. Mountain Time, as
a telephone conference call meeting at which no one will be allowed to attend in person, and at any adjournments thereof. This Proxy Statement
was first mailed to stockholders on or about July 2, 2021.
Proposals to be Considered at the Meeting
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1.
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To elect two (2) Directors (“Proposal 1”);
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2.
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To vote on a proposal, pursuant to the Fund’s Articles of Incorporation, to convert the Fund to
an open-end investment company (“Proposal 2”); and
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3.
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To consider and vote upon such other matters, including adjournments, as may properly come before the
Meeting or any adjournments thereof.
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The Board recommends that you vote FOR Proposal
1, electing the Fund’s nominated Directors; and AGAINST Proposal 2, rejecting the conversion of the Fund to
an open-end investment company.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 20, 2021.
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The Fund’s most recent annual report, including
audited financial statements for the fiscal year ended July 31, 2020, and the Fund’s most recent semi-annual report, including unaudited
financial statements for the fiscal period ended January 31, 2021, are available upon request, without charge, by writing to the Fund
at 1290 Broadway, Suite 1000, Denver, Colorado 80203, by calling the Fund at (855) 830-1222, on the internet at www.rivernorthcef.com.
Copies of the proxy materials are available on [www.proxyvote.com]. Stockholders are encouraged to review these materials before voting.
Your vote is important!
The Board recommends that you vote FOR Proposal
1, electing the Fund’s nominated Directors; and AGAINST Proposal 2, rejecting the conversion of the Fund to
an open-end investment company.
As further described below, you may vote on the proposals by any of the
following methods:
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(1)
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date and sign the enclosed proxy card and return it promptly in the enclosed reply envelope;
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(2)
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visit the website listed on your proxy card; or
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(3)
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call the number listed on your proxy card.
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If voting by paper, it is important that the proxy be returned promptly.
The Board solicits proxies so that each stockholder,
including those that cannot attend the Meeting, has the opportunity to vote on the proposals to be considered at the Meeting. A proxy
card for voting your shares at the Meeting is enclosed. If the enclosed proxy card is properly executed and returned in time to be voted
at the Meeting, shares represented thereby will be voted in accordance with the instructions marked thereon. Any stockholder who has given
a proxy has the right to revoke it at any time prior to its exercise either by attending the Meeting and voting his or her Common Shares
via telephone or by submitting a letter of revocation or a later-dated proxy to the Fund at the above address prior to the date of the
Meeting.
The presence telephonically or by proxy of the
holders of shares of common stock of the Fund entitled to cast one-third (33 1/3 percent) of the votes entitled to be cast shall
constitute a quorum at the Meeting for purposes of conducting business. If a quorum is not present at the Meeting, or if a quorum is
present at the Meeting but sufficient votes to approve any of the proposed items are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation of proxies. A stockholder vote may be taken on one or
more of the proposals in this Proxy Statement prior to such adjournment if sufficient votes have been received for approval and it
is otherwise appropriate. Any such adjournment for the Meeting may be called by the chairman of the meeting to a date not more than
120 days after the original record date. If a quorum is present, the persons named as proxies will vote thereon according to their
best judgment in the interests of the Fund.
Shares Eligible to Vote
At the close of business on June 11, 2021 (the “Record
Date”), only stockholders of record are entitled to receive notice of the Meeting and to vote those shares for which they are the
record owners, at either the Meeting or any adjournment or postponement thereof. The Fund has one class of capital stock: shares of common
stock, $0.0001 par value per share (“Common Shares”). As of the Record Date, the Fund had [●] Common Shares outstanding.
There are no dissenters’ rights of appraisal in connection with any vote to be taken at the Meeting.
Number of Votes per Share
The holders of Common Shares are entitled to one vote
for each full share and an appropriate fraction of a vote for each fractional share held.
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In order that your Common Shares may be represented
at the Meeting, you are being requested to vote on the following matters:
PROPOSAL 1
ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS
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Nominees for the Fund’s Board of Directors
The Board is divided into three classes, each class
having a term of three years. Each year, the term of office for one class will expire. Listed below are the Director nominees for the
Board, who have been nominated by the Board for election to a three-year term to expire at the Fund’s 2024 Annual Meeting of Stockholders
or until their successors are duly elected and qualified.
Unless authority is withheld, it is the intention
of the persons named in the proxy to vote the proxy “FOR” the election of the nominees named above. The nominees have indicated
that they each have consented to serve as Directors if elected at the Meeting. However, if a designated nominee declines or otherwise
becomes unavailable for election, the proxy confers discretionary power on the persons named therein to vote in favor of a substitute
nominee or nominees.
Information
about Each Nominee’s Professional Experience and Qualifications
Provided below is a brief summary of the specific
experience, qualifications, attributes or skills for each Director nominated for reelection that warranted their consideration as a Director
candidate:
John S. Oakes – Mr. Oakes has
served as a Director of the Fund since 2013 and as the Fund’s independent Chairman since 2017. Mr. Oakes has over 40 years of experience
in the securities industry. Additionally, Mr. Oakes serves on the board of directors of another registered investment company. Mr. Oakes
was the Principal of Financial Search and Consulting, LLC, a consulting and recruiting company. He held numerous management and leadership
positions at major brokerage firms and a major bank. The Board feels Mr. Oakes’ industry and board experience adds an operational
perspective to the Board.
Jerry R. Raio – Mr. Raio has served
as Director of the Fund since 2019. Mr. Raio has many years of experience in the securities industry, including management roles in the
banking and investment management industries. He has more than 15 years of experience in equity capital markets, having worked on the
retail syndicate desks at both Citigroup and Morgan Stanley. Since 2018, he has served as President and CEO of Arbor Lane Advisors, Inc.
He served as the Managing Director and Head of Retail Origination for Wells Fargo Securities, LLC from 2005 to 2018. Prior to working
at Wells Fargo, he served as Director and Head of Closed-End Funds for Citigroup Asset Management. He also serves on the Board of each
of FLX Distribution; Qudos Technologies; and Quantify Crypto. He was selected to serve as a Director of the Fund based on his business,
financial services and investment management experience.
Qualifications of the Remaining Serving Directors
In addition, the information following contains a
summary of the specific experience, qualifications, attributes or skills of the other Directors currently serving on the Board:
John K. Carter – Mr. Carter has
served as a Director of the Fund since 2013. He currently serves on the Fund’s Nominating and Corporate Governance Committee, the
Audit Committee and the Qualified Legal Compliance Committee. Mr. Carter has served as the Managing Partner of the Law Office of John
K. Carter, P.A., a general practice and corporate law firm since 2015. From 2012 to 2015, he served as the Managing Partner of Global
Recruiters of St. Petersburg, a financial services consulting and recruiting firm. Prior, Mr. Carter was a Business Unit Head of Transamerica
Asset Management from 2006 to 2012. Mr. Carter was also a Director and Chairman of the Board of Transamerica Funds and was a Board Member
of the United Way of Tampa Bay from 2011 to 2012. Mr. Carter was previously an investment management attorney with experience as in-house
counsel, serving with the Securities and Exchange Commission and in private practice with a large law firm. Mr. Carter was selected to
serve as a Director of the Fund based on his industry-specific experience, including serving as a chairman of another fund complex, as
a compliance officer, and as an investment management attorney.
J. Wayne Hutchens – Mr. Hutchens
has served as a Director of the Fund since 2013. Mr. Hutchens is currently retired. From April 2006 to December 2012, he served as President
and CEO of the University of Colorado (CU) Foundation, an organization responsible fundraising, alumni record keeping and endowment management.
From April 2009 to December 2012, he was Executive Director of the CU Real Estate Foundation. Mr. Hutchens is also Director Emeritus of
the Denver Museum of Nature and Science (2000 to present), Director of AMG National Trust Bank (June 2012 to present) and Director of
Children’s Hospital Colorado (May 2012 to present). Prior to these positions, Mr. Hutchens spent 29 years in the banking industry,
retiring as Chairman of Chase Bank Colorado. Mr. Hutchens has also served as a Director of ALPS Series Trust since 2012. Mr. Hutchens
was selected to serve as a Director of the Fund based on his business and financial services experience.
David M. Swanson - Mr. Swanson has served
as a Director of the Fund since 2013. In 2006, Mr. Swanson founded SwanDog Marketing, a marketing consulting firm to asset managers. Mr.
Swanson currently serves as SwanDog’s Managing Partner. He has over 30 years of senior management and marketing experience, with
approximately 20 years in financial services. Before joining SwanDog, Mr. Swanson most recently served as Executive Vice President and
Head of Distribution for Calamos Investments, an investment management firm. He previously held positions as Chief Operating Officer of
Van Kampen Investments, President and CEO of Scudder, Stevens & Clark, Canada, Ltd. and Managing Director and Head of Global Investment
Products at Morgan Stanley. Mr. Swanson holds a Master of Management from the Kellogg Graduate School of Management at Northwestern University
and a Bachelors in Journalism from Southern Illinois University. He was selected to serve as a Director of the Fund based on his business,
financial services and investment management experience.
Patrick W. Galley - Mr. Galley has been an Interested Director
of the Fund since 2013 and is the Chief Executive Officer and Chief Investment Officer for the Fund’s investment sub-adviser, RiverNorth
Capital Management, LLC (the “Sub-Adviser”) and the portfolio manager of the Fund. His knowledge regarding the investment
strategy of the Fund and the closed-end fund industry in total makes him uniquely qualified to serve as a Director.
Additional Information about Each Director and
the Fund’s Officers
The table below sets forth the names and age of the
Directors and principal officers of the Fund, the year each was first elected or appointed to office, their term of office, their principal
business occupations during at least the last five years, the number of portfolios overseen by each Director or the Fund Complex, and
their other directorships of public companies. There are no familial relationships among the officers and Directors. Unless noted otherwise,
the address for the Directors and officers is 1290 Broadway, Suite 1000, Denver, Colorado 80203.
Independent Directors
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Name and Year of Birth
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Position(s) Held with Registrant
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Term of
Office(1) and Length of Time Served
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Principal Occupation(s) During Past 5 Years
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Number of Funds in Fund Complex(2) Overseen by Director
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Other Directorships(3) Held by the Director During the Past 5 Years
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John K. Carter
(1961)
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Director
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Current term expires in 2023. Has served since 2013.
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Managing Partner, Law Office of John K. Carter, P.A. (a general practice and corporate law firm) (2015 to present); Managing Partner, Global Recruiters of St. Petersburg (a financial services consulting and recruiting firm) (2012 to present).
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10
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); Carillon Mutual Funds (12 funds) (2016 to present); RiverNorth Specialty Finance Corporation (1 fund) (2016 to present); RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (1 fund) (2016 to present); RiverNorth Funds (3 funds) (2013 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2020 to present); RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present).
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J. Wayne Hutchens
(1944)
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Director
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Current term expires in 2023. Has served since 2013.
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Currently retired. Trustee Emeritus, Denver Museum of Nature and Science (2000 to present); Executive Director, CU Real Estate Foundation (2009 to present); Director, AMG National Trust Bank (June 2012 to present); Trustee of Children’s Hospital Colorado (May 2012 to present)
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7
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); RiverNorth Specialty Finance Corporation (1 fund) (2019 to present); RiverNorth/DoubleLine Strategic Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2020 to present); RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present).
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Independent Directors
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Name and Year of Birth
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Position(s) Held with Registrant
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Term of
Office(1) and Length of Time Served
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Principal Occupation(s) During Past 5 Years
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Number of Funds in Fund Complex(2) Overseen by Director
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Other Directorships(3) Held by the Director During the Past 5 Years
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John S. Oakes
(1943)
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Chairman and Director
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Current term expires in 2021. Has served since 2013.
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Principal, Financial Search and Consulting (a recruiting and consulting firm) (2013 to present).
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10
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); RiverNorth Specialty Finance Corporation (1 fund) (2016 to present); RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (1 fund) (2016 to present); RiverNorth Funds (3 funds) (2010 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2020 to present) RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present).
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David M. Swanson
(1957)
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Director
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Current term expires in 2022. Has served since 2013.
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Founder & Managing Partner of SwanDog Strategic Marketing (marketing consulting firm) (2006 - present).
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17
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); RiverNorth Specialty Finance Corporation (1 fund) (2018 to present); RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (1 fund) (2019 to present); RiverNorth Funds (3 funds) (2018 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2020 to present); RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present); Managed Portfolio Series (33 funds) (2011 to present); ALPS Variable Investment Trust (7 funds) (2006 to present).
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INTERESTED DIRECTORS(7) AND OFFICERS(4)
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Name and Year of Birth
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Position(s) Held with Registrant
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Term of Office(1) and Length of
Time Served
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Principal Occupation(s) During Past 5 Years
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Number of Funds in Fund Complex(2) Overseen by Director
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Other Directorships(3) Held by the Director During the Past 5 Years
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Patrick W. Galley(5)
(1975)
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Director
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Current term expires in 2022. Has served since 2013.
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Chief Executive Officer, RiverNorth Capital Management, LLC (2020 to present); Chief Investment Officer, RiverNorth Capital Management, LLC (2004 to present).
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10
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); RiverNorth Specialty Finance Corporation (1 fund) (2016 to present); RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (1 fund) (2016 to present); RiverNorth Funds (3 funds) (2006 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present).
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Jerry Raio (1964)(6)
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Director
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Current term expires in 2021. Has served since 2019.
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President, Arbor Lane Advisors, Inc. (Since 2018); Board Member of each of FLX Distribution, (2020 to present); Qudos Technologies (2019 to present); and Quantify Crypto (2021 to present); Head of Capital Markets, ClickIPO (2018-2019); Managing Director, Head of Retail Origination, Wells Fargo Securities, LLC (2005 to 2018).
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7
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RiverNorth Managed Duration Municipal Income Fund, Inc. (1 fund) (2019 to present); RiverNorth Opportunistic Municipal Income Fund, Inc. (1 fund) (2018 to present); RiverNorth Specialty Finance Corporation (1 fund) (2019 to present); RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (1 fund) (2019 to present); RiverNorth Flexible Municipal Income Fund, Inc. (1 fund) (2020 to present); RiverNorth Flexible Municipal Income Fund II, Inc. (1 fund) (2021 to present).
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Kathryn A. Burns (1976)
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President
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Has served since 2019 as President.
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Ms. Burns is Vice President, Director of Fund Operations of ALPS Advisors, Inc. (since 2018). Ms. Burns served as the Fund’s Treasurer from September 2018 until June 2019. From 2013 to 2018, she served as Vice President and Fund Controller at ALPS Fund Services. Ms. Burns is also President of ALPS Variable Investment Trust and Principal Real Estate Income Fund and Treasurer of ALPS ETF Trust and Boulder Growth & Income Fund.
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N/A
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N/A
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Jill A. Kerschen (1975)
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Treasurer
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Has served since 2019.
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Ms. Kerschen joined ALPS in July 2013 and is currently Vice President, ALPS Advisors, Inc. and serves as Treasurer of Liberty All-Star Growth Fund, Inc., Liberty All-Star Equity Fund, Principal Real Estate Income Fund, and ALPS Variable Investment Trust.
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N/A
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N/A
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Sareena Khwaja-Dixon (1980)
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Secretary
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Has served since 2020.
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Ms. Khwaja-Dixon joined ALPS in August 2015 and is currently Principal Legal Counsel and Vice President of ALPS Fund Services, Inc. Ms. Khwaja-Dixon is also Secretary of Clough Dividend and Income Fund, Clough Global Opportunities Fund, Clough Global Equity Fund, Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc. and Clough Funds Trust and Assistant Secretary of RiverNorth Specialty Finance Corp, RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., RiverNorth Flexible Municipal Income Fund, Inc., RiverNorth Managed Duration Municipal Income Fund, Inc., and RiverNorth Opportunistic Municipal Income Fund, Inc.
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N/A
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N/A
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Matthew Sutula
(1985)
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Chief Compliance Officer
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Has served since 2019.
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Matthew Sutula is Chief Compliance Officer of ALPS Advisors, Inc. (“AAI”) and Chief Compliance Officer of Red Rocks Capital LLC (“RRC”), a subsidiary. Mr. Sutula is also Chief Compliance Officer of ALPS ETF Trust, Principal Real Estate Income Fund, ALPS Variable Investment Trust, RiverNorth Opportunities Fund, Inc., Liberty All-Star Equity Fund and Liberty All-Star Growth Fund, Inc. Mr. Sutula joined ALPS in 2012. Prior to his current role, Mr. Sutula served as interim Chief Compliance Officer of AAI and RRC. Previously he held other positions, including Compliance Manager and Senior Compliance Analyst for AAI, as well as Compliance Analyst for ALPS Fund Services, Inc. Prior to joining ALPS, he spent seven years at Morningstar, Inc. in various analyst roles supporting the registered investment company databases.
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N/A
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N/A
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(1)
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Each Director’s term is three years.
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(2)
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The term “Fund Complex” means two or more registered investment companies that:
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(a) hold themselves out to investors as
related companies for purposes of investment and investor services; or
(b) have a common
investment adviser or that have an investment adviser that is an affiliated person of the investment adviser of any of the other registered
investment companies.
For Mr. Galley, Mr.
Carter and Mr. Oakes, the Fund Complex consists of the Fund, RiverNorth Managed Duration Municipal Income Fund Inc., RiverNorth Opportunistic
Municipal Income Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., RiverNorth
Funds (3 funds), RiverNorth Flexible Municipal Income Fund, Inc., and RiverNorth Flexible Municipal Income Fund II, Inc.
For Mr. Swanson, the
Fund Complex consists of the Fund, RiverNorth Managed Duration Municipal Income Fund Inc., RiverNorth Opportunistic Municipal Income Fund,
Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., RiverNorth Funds (3 funds), RiverNorth
Flexible Municipal Income Fund, Inc., RiverNorth Flexible Municipal Income Fund II, Inc. and ALPS Variable Investment Trust (7 funds).
For Mr. Hutchens and
Mr. Raio, the Fund Complex consists of the Fund, RiverNorth Managed Duration Municipal Income Fund Inc., RiverNorth Opportunistic Municipal
Income Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., RiverNorth Flexible
Municipal Income Fund, Inc., and RiverNorth Flexible Municipal Income Fund II, Inc.
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(3)
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The numbers enclosed in the parentheticals represent the number of funds
overseen in each respective directorship held by the Director. Only includes public company directorships.
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(4)
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Officers are elected annually. Each officer will hold such office until a successor has been elected
by the Board.
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(5)
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Mr. Galley is considered an “Interested Director” because of his affiliation with the Sub-Adviser.
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(6)
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Mr. Raio is considered an “Interested Director” because of his current position as a director
of FLX Distribution, which the Sub-Adviser is an investor in and Mr. Galley is a Director of; and his prior affiliation with Wells Fargo
Securities, LLC, which previously served as a broker and underwriter for certain funds advised by the Sub-Adviser.
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(7)
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“Interested Directors” refers to those Directors who constitute “interested persons”
of the Fund as defined in the 1940 Act.
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Beneficial Ownership of Common Shares Held in
the Fund and in All Funds in the Family of Investment Companies for Each Director and Nominee for Election as Director
Set forth in the table below is the dollar range of
equity securities held in the Fund and on an aggregate basis for all funds overseen in a family of investment companies overseen by each
Director.
Name of Board Member/Nominee
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Dollar Range of Equity Securities Held in the Fund (1)
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Aggregate Dollar Range of Equity Securities Held in All Funds in the Family of Investment Companies (1)(2)
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Independent Directors
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John K. Carter
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[None]
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[$50,001 - $100,000]
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J. Wayne Hutchens
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[$50,001 - $100,000]
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[$50,001 - $100,000]
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John S. Oakes
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[$10,001 - $50,000]
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[over $100,000]
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David M. Swanson
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[$10,001 - $50,000]
|
|
[$10,001 - $50,000]
|
Interested Directors
|
|
|
|
|
Patrick W. Galley
|
|
[over $100,000]
|
|
[over $100,000]
|
Jerry R. Raio
|
|
[None]
|
|
[$10,001 - $50,000]
|
|
(1)
|
This information has been furnished by each Director as of [●],
2021. “Beneficial Ownership” is determined in accordance with Section 16a-1(a)(2) under the Securities Exchange Act of 1934,
as amended (the “1934 Act”).
|
|
(2)
|
The Family of Investment Companies includes the ten RiverNorth
branded funds that the Sub-Adviser serves as either an investment adviser or sub-adviser. This includes the Fund, the RiverNorth Funds
(3 funds), RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., RiverNorth Opportunistic Municipal Income Fund, Inc., RiverNorth Managed
Duration Municipal Income Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth Flexible Municipal Income Fund, Inc., and
RiverNorth Flexible Municipal Income Fund II, Inc.
|
Director Transactions with Fund Affiliates
As of December 31, 2020, none of the Independent Directors,
as such term is defined by the New York Stock Exchange (“NYSE”) Listing Standards (each an “Independent Director”
and collectively the “Independent Directors”), nor members of their immediate families owned securities, beneficially or of
record, in ALPS Advisors, Inc. (the “Adviser”) or the Sub-Adviser, or an affiliate or person directly or indirectly controlling,
controlled by, or under common control with the Adviser or Sub-Adviser. Furthermore, over the past five years, neither the Independent
Directors nor members of their immediate families have any direct or indirect interest, the value of which exceeds $120,000, in the Adviser
or Sub-Adviser or any of their respective affiliates. In addition, for the fiscal year ended July 31, 2020, neither the Independent Directors
nor members of their immediate families have conducted any transactions (or series of transactions) or maintained any direct or indirect
relationship in which the amount involved exceeds $120,000 and to which the Adviser or Sub-Adviser or any of their respective affiliates
was a party.
Director Compensation
Directors and Officers of the Fund who are employed
by the Adviser (including its affiliates) or the Sub-Adviser receive no compensation from the Fund or any other fund in the Fund Complex.
The following table sets forth certain information regarding the compensation of the Fund’s Directors for the fiscal year ended
July 31, 2020.
Compensation
of the directors
Name of Director/Nominee
|
|
Total Compensation From the Fund
|
|
Total Compensation From the Fund and Fund Complex Paid to Directors
|
|
Number of Funds in Director’s Fund Complex
|
John K. Carter
|
|
|
|
|
|
|
J. Wayne Hutchens
|
|
|
|
|
|
|
John S. Oakes
|
|
|
|
|
|
|
David M. Swanson
|
|
|
|
|
|
|
Patrick W. Galley
|
|
-
|
|
-
|
|
|
Jerry R. Raio
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
The Independent Directors (and Mr. Raio) of the Fund
receive an annual retainer of $17,000 and an additional $2,000 for attending each regular meeting of the Board, and an additional $1,000
for attending each special meeting of the Board. The Independent Directors are also reimbursed for all reasonable out-of-pocket expenses
relating to attendance at meetings of the Board. The Independent Chairman also receives an additional $10,000 annually.
During the fiscal year ended July 31, 2020, the Board
met six times. Each Director then serving in such capacity attended at least 75% of the meetings of Directors and of any Committee of
which he is a member.
Leadership Structure of the Board of Directors
The Board, which has overall responsibility for the
oversight of the Fund’s investment programs and business affairs, believes that it has structured itself in a manner that allows
it to effectively perform its oversight obligations. Mr. Oakes, the Chairman of the Board (“Chairman”), is an Independent
Director. The Directors also complete an annual self-assessment during which the Directors review their overall structure and consider
where and how its structure remains appropriate in light of the Fund’s current circumstances. The Chairman’s role is to preside
at all meetings of the Board and in between meetings of the Board to generally act as the liaison between the Board and the Fund’s
officers, attorneys and various other service providers, including but not limited to ALPS and other such third parties servicing the
Fund.
The Fund has three standing committees, each of which
enhances the leadership structure of the Board: the Audit Committee; the Nominating and Corporate Governance Committee; and the Qualified
Legal Compliance Committee. The Audit Committee, Nominating and Corporate Governance Committee, and the Qualified Legal Compliance Committee
are each chaired by, and composed of, members who are Independent Directors.
Oversight of Risk Management
The Fund is confronted with a multitude of risks,
such as investment risk, counter party risk, valuation risk, political risk, risk of operational failures, business continuity risk, regulatory
risk, legal risk and other risks not listed here. The Board recognizes that not all risk that may affect the Fund can be known, eliminated
or even mitigated. In addition, there are some risks that may not be cost effective or an efficient use of the Fund’s limited resources
to moderate. As a result of these realities, the Board, through its oversight and leadership, has and will continue to deem it necessary
for stockholders of the Fund to bear certain and undeniable risks, such as investment risk, in order for the Fund to operate in accordance
with its prospectus, statement of additional information and other related documents.
However, as required under the 1940 Act, the Board
has adopted, on the Fund’s behalf, a vigorous risk program that mandates the Fund’s various service providers, including ALPS,
to adopt a variety of processes, procedures and controls to identify various risks, mitigate the likelihood of such adverse events from
occurring and/or attempt to limit the effects of such adverse events on the Fund. The Board fulfills its leadership role by receiving
a variety of quarterly written reports prepared by the Fund’s Chief Compliance Officer that (1) evaluate the operation, policies
and policies of the Fund’s service providers, (2) make known any material changes to the policies and procedures adopted by the
Fund or its service providers since the CCO’s last report and (3) disclose any material compliance matters that occurred since the
date of the last CCO report. In addition, the Independent Directors meet quarterly in executive sessions without the presence of any Interested
Directors, ALPS, the Sub-Adviser or any of their affiliates. This configuration permits the Independent Directors to effectively receive
the information and have private discussions necessary to perform their risk oversight role, exercise independent judgment, and allocate
areas of responsibility between the full Board, its various committees and certain officers of the Fund. Furthermore the Independent Directors
have engaged independent legal counsel and auditors to assist the Independent Directors in performing their oversight responsibilities.
As discussed above and in consideration of other factors not referenced herein, the Board has determined its leadership role concerning
risk management as one of oversight and not active management of the Fund’s day-to-day risk management operations.
Audit Committee
The Audit Committee of the Board (“Audit Committee”)
is comprised of Messrs. Carter, Oakes, Swanson and Hutchens (the Audit Committee’s Chairman and Financial Expert). None of the members
of the Audit Committee are “interested persons” of the Fund as defined in the 1940 Act.
The role of the Audit Committee is to assist the Board
in its oversight of (i) the quality and integrity of Fund’s financial statements, reporting process and the independent registered
public accounting firm (the “independent accountants”) and reviews thereof, (ii) the Fund’s accounting and financial
reporting policies and practices, its internal controls and, as appropriate, the internal controls of certain service providers, (iii)
the Fund’s compliance with legal and regulatory requirements and (iv) the independent accountants’ qualifications, independence
and performance. The Audit Committee is also required to prepare an audit committee report pursuant to the rules of the SEC for inclusion
in the Fund’s annual proxy statement. The Audit Committee operates pursuant to the Audit Committee Charter (the “Audit Committee
Charter”) that was most recently reviewed and approved by the Audit Committee on May 11, 2021, at which time the Audit Committee
recommended approval to the Board and the Board approved the continuance of the Audit Committee Charter. The Audit Committee Charter is
available at the Fund’s website: www.rivernorthcef.com. As set forth in the Audit Committee Charter, management is responsible for
maintaining appropriate systems for accounting and internal control, and the Fund’s independent accountants are responsible for
planning and carrying out proper audits and reviews. The independent accountants are ultimately accountable to the Board and to the Audit
Committee, as representatives of stockholders. The independent accountants for the Fund report directly to the Audit Committee.
Based on the findings of the Audit Committee, the
Audit Committee has determined that Mr. Hutchens is an “audit committee financial expert,” as defined in the rules promulgated
by the SEC, and as required by NYSE Listing Standards. Mr. Hutchens serves as the Chairman of the Audit Committee.
The Audit Committee met three times during the fiscal
year ended July 31, 2020.
Report of the Audit Committee
In performing its oversight function, at a meeting
held on September 21, 2020, the Audit Committee reviewed and discussed with management of the Fund and its independent accountant, Cohen
& Company, Ltd (“Cohen”), the audited financial statements of the Fund as of and for the fiscal year ended July 31, 2020,
and discussed the audit of such financial statements with the independent accountant.
In addition, the Audit Committee discussed with the
matter required to be discussed by the applicable requirements of Public Company Accounting Oversight Board (“PCAOB”) and
the SEC and received the written disclosures and letter required by the PCAOB regarding the relationships between the independent accountant
and the Fund and the impact that any such relationships might have on the objectivity and independence of the independent accountant.
As set forth above, and as more fully set forth in
the Audit Committee Charter, the Audit Committee has significant duties and powers in its oversight role with respect to the Fund’s
financial reporting procedures, internal control systems and the independent audit process.
The members of the Audit Committee are not, and do
not represent themselves to be, professionally engaged in the practice of auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control purposes. Moreover, the Audit Committee relies on and makes no independent verification
of the facts presented to it or representations made by management or the independent verification of the facts presented to it or representation
made by management or the Fund’s independent accountant. Accordingly, the Audit Committee’s oversight does not provide an
independent basis to determine that management has maintained appropriate accounting and/or financial reporting principles and policies,
or internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore,
the Audit Committee’s considerations and discussions referred to above do not provide assurance that the audit of the Fund’s
financial statements has been carried out in accordance with generally accepted accounting standards or that the financial statements
are presented in accordance with generally accepted accounting principles.
Based on its consideration of the audited financial
statements and the discussions referred to above with management and the Fund’s independent accountant, and subject to the limitations
on the responsibilities and role of the Audit Committee set forth in the Audit Committee Charter and those discussed above, the Audit
Committee recommended to the Board that the Fund’s audited financial statements be included in the Fund’s Annual Report for
the fiscal year ended July 31, 2020.
SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
J. Wayne Hutchens
John K. Carter
David M. Swanson
John S. Oakes
May 11, 2021
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee
of the Board of Directors (“Nominating and Corporate Governance Committee”) is comprised of Messrs. Carter (Chairman), Hutchens,
Oakes and Swanson. The Nominating and Corporate Governance Committee operates pursuant to the Nominating and Corporate Governance Committee
Charter. The Nominating and Corporate Governance Committee is responsible for identifying and recommending to the Board individuals believed
to be qualified to become Board members in the event that a position is vacated or created. The Nominating and Corporate Governance Committee
Charter is available at the Fund’s website: www.rivernorthcef.com.
The Nominating and Corporate Governance Committee
will consider Director candidates recommended by stockholders. In considering candidates submitted by stockholders, the Nominating and
Corporate Governance Committee will take into consideration the needs of the Board, the qualifications of the candidate and the interests
of stockholders. The Nominating and Corporate Governance Committee has not adopted a formal diversity policy, but it may consider diversity
of professional experience, education and skills when evaluating potential nominees for Board membership.
To serve as a Director, nominees must (a) have no
felony convictions or felony or misdemeanor convictions involving the purchase or sale of a security; and (b) not have been the subject
of any order, judgment or decree (which was not subsequently reversed, suspended or vacated) of any federal or state authority finding
that the individual violated or is in violation of any federal or state securities laws.
In addition, in order for the Nominating and Corporate
Governance Committee to consider a stockholder submission, the following requirements must be satisfied regarding the nominee: (a) The
nominee must satisfy all qualifications provided under the Nominating and Corporate Governance Committee Charter and in the Fund’s
organizational documents, including qualification as a possible independent Board member. (b) The nominee may not be the nominating stockholder,
a member of the nominating stockholder group or a member of the immediate family of the nominating stockholder or any member of the nominating
stockholder group. (c) Neither the nominee nor any member of the nominee’s immediate family may be currently employed or employed
within the last year by any nominating stockholder entity or entity in a nominating stockholder group. (d) Neither the nominee nor any
immediate family member of the nominee is permitted to have accepted directly or indirectly, during the year of the election for which
the nominee’s name was submitted, during the immediately preceding calendar year, or during the year when the nominee’s name
was submitted, any consulting, advisory, or other compensatory fee from the nominating stockholder or any member of a nominating stockholder
group. (e) The nominee may not be an executive officer, Director (or person fulfilling similar functions) of the nominating stockholder
or any member of the nominating stockholder group, or of an affiliate of the nominating stockholder or any such member of the nominating
stockholder group. (f) The nominee may not control (as that term is defined under the 1940 Act) the nominating stockholder or any member
of the nominating stockholder group (or, in the case of a holder or member that is a fund, an interested person of such holder or member
as defined by Section 2(a)(19) of the 1940 Act). (g) A stockholder or stockholder group may not submit for consideration a nominee who
has previously been considered by the Nominating and Corporate Governance Committee.
Stockholders wishing to recommend candidates to
the Nominating and Corporate Governance Committee should submit such recommendations to the Secretary of the Fund, who will forward
the recommendations to the committee for consideration. The submission must include: (i) a brief description of the business desired
to be brought before the annual or special meeting and the reasons for conducting such business at the annual or special meeting;
(ii) the name and address, as they appear on the Fund’s books, of the stockholder proposing such business or nomination; (iii)
a representation that the stockholder is a holder of record of stock of the Fund entitled to vote at such meeting and intends to
appear telephonically or by proxy at the meeting to present such nomination; (iv) whether the stockholder plans to deliver or
solicit proxies from other stockholders; (v) the class and number of Common Shares of the Fund, which are
beneficially owned by the stockholder and the proposed nominee to the Board; (vi) any material interest of the stockholder or
nominee in such business; (vii) to the extent to which such stockholder (including such stockholder’s principals) or the
proposed nominee to the Board has entered into any hedging transaction or other arrangement with the effect or intent of mitigating
or otherwise managing profit, loss, or risk of changes in the value of the Common Shares or the daily quoted market price of the
Fund held by such stockholder (including stockholder’s principals) or the proposed nominee, including independently verifiable
information in support of the foregoing; and (viii) such other information regarding such nominee proposed by such stockholder as
would be required to be included in a proxy statement filed pursuant to Regulation 14A under the 1934 Act. Each eligible stockholder
or stockholder group may submit no more than one independent Director nominee each calendar year.
The Nominating and Corporate Governance Committee
met one time during the fiscal year ended July 31, 2020.
Qualified Legal Compliance Committee
The Qualified Legal Compliance Committee of the Board
of Directors (“QLCC”) is comprised of Messrs. Carter, Hutchens, Oakes and Swanson. The QLCC operates pursuant to the Qualified
Legal Compliance Committee Guidelines. Each member of the QLCC must be a member of the Board who is not employed, directly or indirectly,
by the Fund and who is not an “interested person” of the Fund as defined in section 2(a)(19) of the 1940 Act. The QLCC shall
consist, at a minimum, of at least three members, including at least one member of the Fund’s Audit Committee.
Among other responsibilities, the QLCC is responsible
for (i) receiving reports of certain material breaches or violations of certain U.S. laws or regulations or fiduciary duties, (ii) reporting
evidence of such breaches or violations to the Fund’s Principal Executive Officer (“PEO”), (iii) determining whether
an investigation of such breaches or violations is required, (iv) if the QLCC determines an investigation is required, initiating such
investigation, (v) at the conclusion of such investigation, recommending that the Fund implement an appropriate response to evidence of
a breach or violation, and (vi) informing the PEO and the Board of results of the investigation.
The QLCC met one time during the fiscal year ended
July 31, 2020.
Compensation Committee
The Fund does not have a compensation committee.
Other Board Related Matters
The Fund does not require Directors to attend the
Annual Meeting of Stockholders.
Required Vote
The election of the listed nominees for Director of
the Fund requires the affirmative vote of the holders of a plurality of the votes cast by the holders of Common Shares represented at
the Meeting, if a quorum is present.
Broker Non-Votes and Abstentions; Voting Results
The affirmative vote of a plurality of votes cast
for each nominees by the holders entitled to vote for the particular nominee is necessary for the election of the nominee.
Votes will be counted as either “FOR”
or “WITHHELD.” For the purpose of electing nominees, withheld votes, abstentions or broker non-votes will not be counted as
votes cast and will have no effect on the result of the election. Withheld votes, abstentions or broker non-votes, however, will be considered
to be present at the Meeting for purposes of determining the existence of the Fund’s quorum. Stockholders will be informed of the
voting results of its Meeting in the Fund’s Annual Report dated July 31, 2021.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE FUND’S NOMINEES TO THE BOARD.
PROPOSAL 2
CONVERSION OF THE FUND FROM A CLOSED-END INVESTMENT
COMPANY TO AN OPEN-END INVESTMENT COMPANY
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE AGAINST THIS PROPOSAL.
What is this proposal?
The Fund’s stockholders are being asked to
consider whether to convert the Fund from a closed-end fund to an open-end investment company (the “Open-End Proposal”).
If the Fund converts to an open-end fund, the Fund’s Common Shares would become redeemable directly by the Fund at NAV and
would not trade on any exchange. In order to address the organizational changes necessitated by converting from a closed-end fund to
an open-end fund, approval of this proposal would also authorize the Directors to make such amendments to RiverNorth Opportunities
Fund’s Charter and such other changes as they may deem necessary or appropriate and may require additional stockholder
approval.
Why is this proposal being submitted to stockholders?
The Fund’s Articles of Incorporation require
that in the calendar year 2021, the Board call a meeting of stockholders for the purposes of voting to determine whether the Fund should
be converted to an open-end fund.
What do the Directors recommend?
The Directors of the Fund believe the continued operation
of the Fund as a closed-end fund is in the best interest of the Fund’s stockholders. ACCORDINGLY, THE DIRECTORS OF THE FUND UNANIMOUSLY
RECOMMEND THAT THE FUND’S STOCKHOLDERS VOTE “AGAINST” THIS PROPOSAL.
Why are the Directors recommending a vote against
this proposal?
The Board believes that the Fund has been successful
in its current closed-end fund structure and that any benefits that stockholders might receive from changing the structure would be significantly
outweighed by the negatives of operating as and converting to an open-end fund. At a meeting of the Board held on May 11, 2021, the Directors
considered the following factors, among others, in recommending a vote against converting the Fund to an open-end investment company which
are summarized below.
Comparison of Open-End Fund and Closed-End Fund
Characteristics
Currently, the Fund is a
closed-end fund. Accordingly, it does not redeem its outstanding shares. The Fund’s Common Shares are principally traded on the
NYSE at prevailing market prices, which may be equal to, less than NAV (known as a “discount to NAV”) or more than NAV
(known as a “premium to NAV”). By contrast, open-end funds issue redeemable securities for which there is no secondary
trading market. The holders of such redeemable securities have the right to surrender them to the issuing open-end fund and obtain
in return their proportionate share of the fund’s NAV per share at the time of redemption (less any redemption fee charged by
the fund or contingent deferred sales charge imposed by the fund’s distributor), except during periods when the NYSE is closed
or trading thereon is restricted, or when redemptions may otherwise be suspended in an emergency as permitted by the 1940 Act.
Additionally, most open-end funds continuously offer new shares to investors at a price based upon the shares’ NAV per share
at the time of issuance.
Potential Disadvantages from the Conversion of
the Fund to an Open-End Fund
(1) Loss of the Fund’s
Current Market Price Premium to its NAV.
Closed-end funds whose
shares have historically traded at a large discount to their NAV, a conversion to an open-end fund would allow fund stockholders to
redeem their shares at NAV rather than at the prevailing market price. However, for a closed-end fund that historically trades at a
premium, conversion to an open-end fund causes its stockholders immediate harm, as future redemptions would be required to be made
at NAV and the Fund’s trading premium would be eliminated. Stockholders holding at the time of conversion would thus be faced
with a loss equal to the difference between the Fund’s market price and NAV.
As of the close of business
on June 1, 2021, the Fund’s Common Shares were trading at a premium greater than 4% to its NAV. In fact, as of
that same date, the Fund’s Common Shares have averaged a trading premium to NAV of greater than 2.3% for the 2021 year-to-date
period. As shown in the chart below, since the Fund’s inception, the Fund’s Common Shares have traded both at a premium
and a discount to NAV. The Fund cannot predict whether the Common Shares will trade in the future at a premium or discount to NAV in
the future.
The following table shows,
for each fiscal quarter since the quarter ended January 31, 2016: (i) high and low NAVs per share of common stock, (ii) the high and
low sale prices per share of common stock, as reported in the consolidated transaction reporting system, and (iii) the percentage by
which the common shares traded at a premium over, or discount from, the high and low NAVs per shares of common stock. The
Fund’s NAV per Common Shares is determined on a daily basis.
Quarter Ended
|
|
Market Price
|
|
NAV
|
|
Market Premium
(Discount)
to NAV
|
|
|
|
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
2021
|
|
April 30
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
|
|
January 31
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
2020
|
|
October 31
|
|
$16.09
|
|
$13.75
|
|
$15.29
|
|
$14.49
|
|
5.23%
|
|
-5.11%
|
|
|
|
July 31
|
|
$15.55
|
|
$12.52
|
|
$14.95
|
|
$13.58
|
|
4.01%
|
|
-7.81%
|
|
|
|
April 30
|
|
$17.00
|
|
$8.65
|
|
$17.01
|
|
$11.72
|
|
-0.06%
|
|
-26.19%
|
|
|
|
January 31
|
|
$17.10
|
|
$15.85
|
|
$17.30
|
|
$16.79
|
|
-1.16%
|
|
-5.60%
|
|
2019
|
|
October 31
|
|
$17.32
|
|
$16.09
|
|
$17.13
|
|
$16.90
|
|
1.11%
|
|
-4.79%
|
|
|
|
July 31
|
|
$17.75
|
|
$16.44
|
|
$17.54
|
|
$17.14
|
|
1.20%
|
|
-4.08%
|
|
|
|
April 30
|
|
$17.36
|
|
$16.44
|
|
$17.49
|
|
$17.50
|
|
-0.74%
|
|
-6.06%
|
|
|
|
January 31
|
|
$17.30
|
|
$14.20
|
|
$17.79
|
|
$15.90
|
|
-2.75%
|
|
-10.69%
|
|
2018
|
|
October 31
|
|
$20.04
|
|
$16.76
|
|
$19.02
|
|
$17.57
|
|
5.36%
|
|
-4.61%
|
|
|
|
July 31
|
|
$21.63
|
|
$18.80
|
|
$19.47
|
|
$18.98
|
|
11.09%
|
|
0.96%
|
|
|
|
April 30
|
|
$21.36
|
|
$20.02
|
|
$19.76
|
|
$19.67
|
|
8.10%
|
|
1.78%
|
|
|
|
January 31
|
|
$21.09
|
|
$19.10
|
|
$19.98
|
|
$19.87
|
|
5.56%
|
|
-3.88%
|
|
2017
|
|
October 31
|
|
$21.51
|
|
$19.70
|
|
$20.89
|
|
$20.59
|
|
2.97%
|
|
-4.32%
|
|
|
|
July 31
|
|
$21.57
|
|
$19.42
|
|
$20.80
|
|
$20.68
|
|
3.70%
|
|
-6.09%
|
|
|
|
April 30
|
|
$20.13
|
|
$19.19
|
|
$20.87
|
|
$20.56
|
|
-3.55%
|
|
-6.66%
|
|
|
|
January 31
|
|
$19.65
|
|
$18.00
|
|
$20.21
|
|
$19.64
|
|
-2.77%
|
|
-8.35%
|
|
2016
|
|
October 31
|
|
$20.59
|
|
$18.67
|
|
$20.88
|
|
$20.33
|
|
-1.39%
|
|
-8.17%
|
|
|
|
July 31
|
|
$19.71
|
|
$17.79
|
|
$20.70
|
|
$19.73
|
|
-4.78%
|
|
-9.83%
|
|
|
|
April 30
|
|
$19.79
|
|
$15.31
|
|
$19.99
|
|
$17.73
|
|
-1.00%
|
|
-13.65%
|
|
|
|
January 31
|
|
$20.81
|
|
$18.66
|
|
$18.03
|
|
$18.06
|
|
15.42%
|
|
3.32%
|
|
(2) Negative Impact on Portfolio
Management.
Management of Share Redemptions
and Proceeds. While under normal market conditions, the portfolio assets of closed-end funds can be fully invested in accordance with
their investment strategies, open-end funds are subject to periodic inflows and outflows of cash that can complicate and negatively affect
the management of the Fund’s portfolio. For example, open-end funds may be subject to pressure to sell portfolio securities at disadvantageous
times or prices in order to satisfy redemption requests.
Another difference between the
management of an open-end fund and a closed-end fund relates to the management of inflows and outflows. While the ability of open-end
funds to sell shares at any time (resulting from shares being priced at NAV per share) may produce certain distribution efficiencies,
open-end funds are unable to coordinate the timing of asset inflows and outflows. Open-end funds often find that large net purchases of
shares occur around market highs and face net redemptions around market lows, which may be inopportune times to invest or liquidate portfolio
positions, respectively.
The negative effects that the
inability to manage the timing of stockholder investments and redemptions would likely be magnified for the Fund. The Fund’s strategy
seeks to derive value from the discount and premium spreads associated with closed-end fund investments and the Sub-Adviser’s research
shows that historically, closed-end fund discounts often are greater during market downturns and narrow in strong markets. Thus, in a
market downturn that sees closed-end discounts widen, an open-end fund may be required to sell investments at a loss to meet increases
in redemption requests, while a similar closed-end fund would be able to take advantage of investment opportunities given its stable base
of assets.
In addition, the ability of open-end
funds to invest all of a fund’s assets in portfolio securities may be limited because of the need to maintain cash reserves to provide
for stockholder redemptions. The level of redemptions may be particularly high immediately following a conversion to open-end status and
therefore, initially, the Fund may be forced to sell significant portfolio securities to satisfy redemption requests. In the event cash
reserves, temporary investments and borrowings are exhausted, the result may be that more securities in the Fund’s portfolio will
be sold, leaving the Fund with less-liquid securities in its portfolio which are not as well-suited to meeting future redemptions. As
a closed-end fund, the Fund’s portfolio can be managed with a greater emphasis on long-term considerations as it is not required
to liquidate portfolio holdings at inopportune times to meet redemption requests.
Enhanced investment flexibility
with respect to illiquid securities and leverage. Because they are required to maintain the ability to honor redemption requests,
open-end funds are prohibited by the 1940 Act from investing more than 15% of their assets in illiquid securities. Closed-end funds such
as the Fund are not subject to this restriction, although generally the Fund has not utilized this flexibility to a significant extent.
Illiquid securities may offer attractive investment returns to investors, such as closed-end funds, that are able to hold these securities
long term. Further, closed-end funds have significantly more flexibility compared to open-end funds in how they are to utilize leverage.
For example, open-end funds are not able to issue preferred shares. While the Fund has not issued preferred shares since its inception,
such issuance could later be beneficial to the Fund and stockholders as market conditions change.
(3) Effect of Redemptions.
In addition to the effects on the Fund's investment strategy and portfolio management, redemptions could also result in an
increase in the Fund's operating expenses. In particular, a reduction in size of the Fund would result in the fixed expenses of the Fund
being spread over a smaller asset base, thereby increasing the per-share effect of those expenses. Redemptions could also
increase the Fund's portfolio turnover rate above its normal levels, thereby increasing Fund expenses. If the Fund decreased in size,
the expense ratio may increase because certain expenses may remain the same or increase. For example, certain expenses, such as transfer
agency expenses, are generally higher for open-end funds than for a closed-end funds. Although certain increases in Fund expenses may
be waived or reimbursed under the Fund's management fee and expense reimbursement arrangements, certain of these expenses may be borne
by the Fund, subject to Board approval. Similarly, any increase in transaction costs would decrease the Fund's yield and total return.
It is also possible that, as a result of the increase in expenses and/or decrease in the Fund's assets, the Fund's gross expenses could
increase to a level where the Adviser is no longer willing to waive or reimburse expenses.
(4) Potential Reduction of
Distribution Yield and Total Return. If the Fund converts to an open-end fund, the Adviser and the Sub-Adviser believe that the potential
changes to the Fund’s investment strategies, policies and restrictions, and the need to maintain higher cash balances due to regular
inflows and outflows, all as described above, could reduce the Fund’s distribution yield and total return.
(5) Additional Costs of Operating
an Open-End Fund. The Fund’s expense ratio would likely increase for the reasons mentioned above under “— Effect
of Redemptions” and below under “— Distribution and Shareholder Service Costs,” and because transfer agency expenses
are generally higher for an open-end fund.
(6) Distribution and
Shareholder Service Costs. If the Fund converts to open-end status, it will need to have an effective distribution system to
help mitigate the erosion of its asset base through redemptions. The distribution and marketing of open-end funds involve additional
costs. These costs may be paid either by new investors (in the case of a front-end sales charge) or by current stockholders (in the
case of a plan of distribution adopted under Rule 12b-1 under the 1940 Act (a “12b-1 Plan”). If the Open-End Proposal is
approved by stockholders, the Adviser and Sub-Adviser may propose that the Board approve the implementation of a 12b-1 Plan
providing for distribution-related payments by the Fund at varying annual rates (to the extent the Fund’s Common Shares are
divided into multiple classes following conversion to an open-end fund).
If the Fund converts to open-end status, the
Adviser may also propose that the Board approve a shareholder services plan (“Shareholder Services Plan”), pursuant to
which the Fund would pay a fee at varying annual rates (to the extent the Fund’s Common Shares are divided into multiple
classes following conversion to an open-end fund) to help compensate financial institutions for providing customer service and
account maintenance. Such services are intended to compensate financial intermediaries for services provided to stockholders, and
generally help open-end funds to retain assets.
(7) Reinvestment of Dividends
and Distributions. Like the plans of many other closed-end funds, the Fund’s Dividend Reinvestment Plan (the “Plan”)
permits stockholders to reinvest their dividends and distributions on a different basis than would be the case if the Fund converted
to an open-end investment company. For example, if the Fund is trading at a discount, the Plan permits a reinvesting stockholder to benefit
by purchasing additional shares at that market discount and this buying activity may tend to lessen any discount. The positive result
of reinvesting at a price below NAV per share can be significant, particularly given the compounding effect over time. Conversely, when
the Fund is at a premium, stockholders are able to reinvest at NAV, providing them with an immediately gain of the difference between
NAV and the higher market price.
Providing differing methods of
reinvestment of distributions are an advantage that is not offered by open-end investment companies, which reinvest dividends or distributions
at NAV per share. Consequently, participants in the Plan would lose the compounding benefit of reinvesting their distributions at a price
below NAV per share when Fund shares are trading at a discount or, when the Fund is at a premium, at a price below the then market price
per share. In either situation, stockholders lose the opportunity to realize the possible gains from such transaction.
(8) Additional Conversion Costs.
The process of converting the Fund to an open-end fund would involve additional printing, securities registration, legal, other professional
costs and expenses of establishing a new structure. These costs, many of which would be non-recurring, include costs associated with the
preparation of an open-end fund registration statement as required by federal securities laws and other costs. [The Fund estimates that
these costs, which would be considered extraordinary expenses and be paid by the Fund (subject to approval of the Board), would be in
the range of $[ ] to $[ ], or approximately [ ]% of the Fund’s average net assets (based on the estimated reduced asset level after
the conversion).]
(9) De-listing from
NYSE. The Fund’s Common Shares are currently listed on the NYSE, however, due to their redemption features, open-end funds
are not traded on exchanges. Conversion to an open-end fund would require immediate de-listing of the Fund from the NYSE, and thus
any advantage related to being listed on the NYSE would be lost. A listing on a U.S. stock exchange, and in particular the NYSE, may
be beneficial.
In addition, because of its NYSE listing, the Fund
is currently exempt from state securities regulation. Upon de-listing, the Fund would be required to make state notice filings and pay
state fees.
(10)
Expectations of Stockholders. The Fund was organized under a closed-end structure and has operated as such since its inception
in 2015. Since inception, the Fund has been able to successfully execute its strategy and meet its investment objective of total return
consisting of capital appreciation and current income in its current structure. The Board of Directors, along with the Adviser and Sub-Adviser,
believe that given the consistently strong performance of the Fund within the closed-end structure, the stockholder base of the Fund
has chosen to invest in the Fund on the basis of this structure, and that the significant changes to the Fund that would be necessitated
by the conversion to open-end status, and the potential consequences of these changes, as discussed above, would not be consistent with
the expectations of many stockholders.
Potential Open-End Fund Advantages
(1) Redeemability of Shares.
Except in certain circumstances as authorized by the 1940 Act, stockholders of an open-end fund have the right to redeem their shares
at any time at the NAV per share of such shares (less any applicable redemption or contingent deferred sales charges). The ability to
obtain NAV per share for their shares could constitute a potential immediate benefit to stockholders of the Fund, but only to the extent
that shares are trading at a discount to NAV. As noted above, however, the Fund has recently traded at a premium to its NAV. Further,
the Board and the Adviser and Sub-Adviser believe that the effect of portfolio selling to meet significant post-conversion redemptions
on the Fund’s NAV may significantly offset this benefit. Further
In addition, while stockholders in a closed-end fund
generally pay a brokerage commission when they buy or sell the closed-end fund shares on a stock exchange, stockholders in open-end funds
may or may not incur a brokerage commission when they purchase or redeem their shares (depending on the broker used and the open-end fund
invested in), although redemption fees and/or contingent deferred sales charges may apply. Contingent deferred sales charges, if any,
would only be applicable to new shares sold by the Fund after conversion to open-end status.
(2) Shareholder Services.
Open-end funds generally provide more services to stockholders than closed-end funds. One service that is frequently offered by open-end
funds is an exchange privilege which enables stockholders to transfer their investment from one fund into another fund which is part of
a family of open-end funds, at little or no cost to stockholders. This permits the exchange of shares at relative NAV per share when the
holder’s investment objectives change. Other services that could be offered include use of the Fund by retirement plans and permitting
purchases and sales of shares in convenient amounts. There are, of course, additional costs for these services, some of which may be borne
by the Fund or stockholders, which must be weighed against the anticipated benefit of the particular service. There can be no assurance
that any such services would be made available to Fund stockholders if the Open-End Proposal were approved.
(3) Raising Capital. Because
the 1940 Act restricts the ability of a registered fund to sell its shares at a price below NAV, a closed-end fund trading at a discount
may not be able to raise capital through share sales (other than through a rights offering) when it believes further investment would
be advantageous. Even if a closed-end fund is trading at a premium, the sale of new shares to the public typically involves the cost and
delay of a registration statement filing and public offering. By contrast, open-end funds are priced at NAV and can sell additional shares
at any time. This ability to raise new money can potentially achieve greater economies of scale if a strong share distribution network
is in place and cash inflows occur at opportune times. However, open-end funds do not have the ability to plan for cash inflows.
(4) Modest Cost Savings Related
to the Elimination of Required Annual Stockholder Meetings. As a closed-end fund listed on the NYSE, the Fund is subject to NYSE rules
requiring annual meetings of stockholders. Unlike the Fund, unlisted open-end funds are not required to hold annual stockholder meetings,
except in special circumstances where stockholder approval of certain matters is required under the 1940 Act. This would result in modest
cost savings to the Fund; however, the Board believes such savings would not outweigh the benefits that annual meetings provide, allowing
stockholders to have their voice heard on important Fund matters.
Measures Possibly Adopted or Considered if the
Fund becomes an Open-End Fund
If the stockholders vote to convert the Fund to an
open-end fund, the Board of Directors may take the following actions, which may require another stockholder vote. As of the date of this
Proxy Statement, the Board has not made any determination with respect to any of the items discussed below except to recommend that stockholders
vote “AGAINST” the Open-End Proposal.
(1) Effect on the Fund’s
Charter. If the Open-End Proposal is approved by stockholders, the Board of Directors would advise and approve the amendment and restatement
of the Charter to reflect the change in the Fund’s sub-classification under the 1940 Act from a closed-end investment company to
an open-end investment company and adopt by-laws reflecting the Fund’s change to an open-end structure. Amendments to the Fund’s
by-laws would also be approved, to the extent necessary to reflect the amendments to the Fund’s Charter.
(2) Matters Related to Fund
Fees and Expenses. As discussed above, if the Open-End Proposal is approved by stockholders and the Fund decreases in size, the expense
ratio may increase because certain expenses may remain the same or increase.
(3) Multiple Share Classes.
If the Open-End Proposal is approved by stockholders, the Fund may offer multiple classes of shares.
(4) Underwriting and Distribution.
If the stockholders vote to convert the Fund to an open-end fund, the Board of Directors would consider whether to select a distributor
of the Fund’s shares. Fund shares could be offered and sold directly by the Fund itself, by a distributor and by any other broker-dealers
who enter into selling agreements with the distributor. There can be no assurance that satisfactory arrangements with a distributor would
be achieved.
(5) 12b-1 Plan and Shareholder
Services Plan. If the Open-End Proposal is approved by stockholders, the Board may consider the implementation of a 12b-1 Plan that
would allow the Fund to pay distribution fees for the sale and distribution of its shares and allows the Fund to pay for distribution-related
activities and/or stockholder services provided to stockholders.
If the Open-End Proposal is approved by stockholders,
the Board may also consider adopting a Shareholder Services Plan, pursuant to which the Fund pays the Distributor a service fee. Under
a Service Plan, the Fund or the Distributor may enter into agreements with qualified financial institutions to provide these stockholder
services, and the Distributor would be responsible for payment to the financial institutions. Services provided may include customer service
and account maintenance, and may vary based on the services offered by a stockholder’s financial institution and the class of shares
in which a stockholder invests.
(6) Timing. If the Open-End
Proposal is approved by stockholders, a number of steps would be required to implement the conversion, including the preparation, filing
and effectiveness of an open-end fund registration statement under the Securities Act of 1933 covering the offering of Fund shares (the
“Open-End Registration Statement”), the establishment of distribution arrangements, and the negotiation and execution of a
new or amended agreement with the Fund’s service providers.
(7) Stockholder Approval of
Certain Items. If the Open-End Proposal passes, certain aspects of the operation of the Fund subsequent to its conversion may need
to be approved by the Fund’s stockholders before the effectiveness of the conversion. These matters may include, among other things,
making any changes in the Fund’s fundamental investment policies or investment management agreement and associated fee and expense
arrangements considered appropriate, and considering the adoption of a Rule 12b-1 Plan. The manner in which these items would be proposed
to stockholders would be determined by the Board of Directors in consultation with counsel.
Accordingly, in consideration of the factors discussed
above, the Board recommends that stockholders vote against the proposal to open-end the Fund.
What is the voting requirement for Proposal 2?
Approval of Proposal 2 requires a “yes”
vote from a majority of the Fund’s outstanding Common Shares.
If approved, the conversion would become
effective following compliance with all necessary regulatory requirements under federal and state law. The Fund would seek to
complete this process within 12 months of such approval. Until the conversion, the Fund’s Common Shares would continue to be
listed and traded on the New York Stock Exchange.
If Proposal 2 is not approved, would the Fund continue
as a closed-end fund?
Yes, in the event the Fund’s stockholders do
not approve the conversion of the Fund to an open-end fund, the Fund would continue to operate as a closed-end fund.
Broker Non-Votes and Abstentions; Voting Results
For the purpose of voting on Proposal 2, withheld
votes, abstentions or broker non-votes will not be counted as votes cast. Withheld votes, abstentions or broker non-votes, however, will
be considered to be present at the Meeting for purposes of determining the existence of the Fund’s quorum and will have the same
effect as votes cast against Proposal 2.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” CONVERTING THE FUND TO AN OPEN-END INVESTMENT COMPANY.
OTHER MATTERS TO COME BEFORE THE MEETING
|
|
The Directors of the Fund do not intend to present
any other business at the Meeting, nor are they aware that any stockholder intends to do so. If, however, any other matters, including
adjournments, are properly brought before a Meeting, the persons named in the accompanying form of proxy will vote thereon in accordance
with their judgment.
Stockholder Proposal Deadlines
Pursuant to the Fund’s By-Laws, a stockholder
is required to give to a Fund notice of, and specified information with respect to, any proposals that such stockholder intends to present
at the 2022 annual meeting no earlier than March 6, 2022 or approximately 150 days prior to the first anniversary of the date of the Fund’s
proxy statement and no later than April 5, 2022, or 120 days prior to the first anniversary of the date of the Fund’s proxy statement.
Under the circumstances described in, and upon compliance with, Rule 14a-4(c) under the 1934 Act, the Fund may solicit proxies in connection
with the 2022 annual meeting which confers discretionary authority to vote on any stockholder proposals of which the Secretary of the
Fund does not receive notice in accordance with the aforementioned date. Timely submission of a proposal does not guarantee that such
proposal will be included.
Organization and Operation of the Fund
The Fund was organized as a Maryland corporation on
September 9, 2010 and is registered as a diversified, closed-end management investment company under the 1940 Act. The Fund commenced
investment operations on December 24, 2015. ALPS Fund Services, Inc. (“ALPS”) is the Fund’s administrator. ALPS Advisors,
Inc.is the Fund’s investment adviser. Each of the Fund, ALPS and the Adviser are located at 1290 Broadway, Suite 1000, Denver, CO
80203. DST Systems, Inc., an affiliate of ALPS and the Adviser, is the Fund’s transfer agent and is located at 333 West 11th Street,
5th floor, Kansas City, Missouri 64105. RiverNorth Capital Management, LLC is the Fund’s investment sub-adviser and is located at
325 N. LaSalle Street, Suite 645, Chicago, Illinois 60654.
Security Ownership of Management and Certain Beneficial Owners
The following table shows the ownership as of the
Record Date of the Common Shares by each Director and the Fund’s principal executive officer and principal financial officer (each
an “Executive Officer” and together, the “Executive Officers”). Beneficial ownership is determined in accordance
with Rule 13d-3 under the 1934 Act. Unless otherwise noted below, all ownership amounts shown are held directly.
Directors & Executive Officer’s Names
|
|
Total Common Shares Owned and Nature of Ownership
|
Percentage of Fund
|
John K. Carter
|
|
|
|
J. Wayne Hutchens
|
|
|
|
John S. Oakes
|
|
|
|
David M. Swanson
|
|
|
|
Patrick W. Galley
|
|
|
|
Jerry R. Raio
|
|
|
|
Kathryn Burns*
|
|
|
|
Jill A. Kerschen**
|
|
|
|
All Directors and Executive
Officers as a Group
|
|
|
|
|
*
|
Ms. Burns is the Principal Executive Officer of the Fund.
|
|
**
|
Ms. Kerschen is the Principal Financial Officer of the Fund.
|
|
+
|
Ownership amount constitutes less than 1% of the total Common
Shares outstanding.
|
|
^
|
Mr. Galley owns [ ] Common Shares directly (comprising [
]% of the Fund’s outstanding Common Shares) and may be deemed to beneficially own Common Shares held by RiverNorth Capital Management,
LLC (comprising [ ]% of the Fund’s outstanding Common Shares), due to Mr. Galley’s power to direct the voting and disposition
of such Common Shares.
|
Except as noted in the above table and footnotes,
based on a review of Schedule 13D and Schedule 13G filings as of the Record Date, there are no other persons or organizations known to
the Fund to be beneficial owners of more than 5% of the Fund’s outstanding Common Shares.
Independent Registered Public Accounting Firm
At the September 21, 2020 meeting of the Board, the
Board, together with the Audit Committee, selected Cohen to serve as the Fund’s independent registered public accounting firm for
the Fund’s fiscal year ending July 31, 2021. Cohen acted as the Fund’s independent registered public accounting firm for the
fiscal year ended July 31, 2020. The Fund knows of no direct financial or material indirect financial interest of Cohen in the Fund. A
representative of Cohen will not be present at the Meeting, but may be available by telephone and will have an opportunity to make a statement
if they desire to do so.
Principal Accounting Fees and Services
The table provided below sets forth the aggregate
fees billed by Cohen for services rendered to the Fund during the Fund’s fiscal year ended July 31, 2020 and fiscal period ended
July 31, 2019. The fees are for the following work:
(1) Audit Fees for professional
services provided by Cohen for the audit of the Fund’s annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements;
(2) Audit-Related Fees for assurance
and related services by Cohen that are reasonably related to the performance of the audit of the Fund’s financial statements and
are not reported under “Audit Fees;”
(3) Tax Fees for professional services
by Cohen for income tax return preparation fees, excise tax return preparation fees and review of dividend distribution calculation fees;
and
(4) All Other Fees for products
and services provided by Cohen other than those services reported in above under “Audit Fees,” “Audit-Related Fees,”
and “Tax Fees.”
|
Year-Ended
|
|
Period-Ended
|
|
|
July 31, 2020
|
Pre-Approved by
Audit Committee
|
July 31, 2019
|
Pre-Approved by
Audit Committee
|
Audit Fee
|
$20,000
|
Yes
|
$19,000
|
Yes
|
Audit-Related Fees
|
$0
|
-
|
$0
|
-
|
Tax Fees
|
$5,200
|
Yes
|
$5,000
|
Yes
|
All Other Fees
|
$14,550
|
Yes
|
$24,250
|
Yes
|
The Fund’s Audit Committee Charter requires
that the Audit Committee pre-approve all audit and non-audit services to be provided by Cohen, the Fund’s independent registered
public accounting firm. Further, the Audit Committee Charter mandates that the Audit Committee pre-approve all permitted non-audit services
to be provided by Cohen to the Fund’s investment adviser and to entities controlling, controlled by, or under common control with
the adviser and that provide ongoing services to the Fund, if the services relate directly to the operations and financial reporting of
the Fund. Except, however, de minimis non-audit services may, to the extent permitted by applicable law, be approved prior to completion
of the audit. The Audit Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in
accordance with applicable laws. The Fund requires that the Audit Committee maintain these pre-approval policies and procedures to ensure
that the provision of these services by Cohen does not impair its independence.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the 1934 Act and Section 30(h) of
the 1940 Act, and the rules thereunder, require the Fund’s officers and Directors, the investment adviser’s officers and directors,
affiliated persons of the investment adviser, and persons who beneficially own more than 10% of a registered class of the Fund’s
Common Shares to file reports of ownership and changes in ownership with the SEC and the NYSE and to furnish the Fund with copies of all
Section 16(a) forms they file. Based solely on a review of the reports filed, the Fund believes that during fiscal year ended July 31,
2019, all Section 16(a) filing requirements applicable to the Fund’s officers, Directors and greater than 10% beneficial owners
were complied with. A statement of change of beneficial ownership on Form 4 of John S. Oakes, Chairman and Director of the Fund was not
filed before the end of the second business day following the day on which a transaction resulting in a change in beneficial ownership
was executed. The statement of change of beneficial ownership of Mr. Oakes has since been filed with the SEC.
Other Methods and Costs of Proxy Solicitation
In addition to the solicitation of proxies by mail,
officers of the Fund and officers and regular employees of DST Systems, Inc. (“DST”), the Fund’s transfer agent, ALPS,
and affiliates of DST, ALPS, the Adviser or Sub-Adviser, as well as other representatives of the Fund may also solicit proxies by telephone
or Internet. The expenses incurred in connection with preparing the Proxy Statement and its enclosures will be paid by the Fund. In addition,
the Fund has engaged Computershare Fund Services (“Computershare”) to assist in the proxy effort for the Fund. Under the terms
of the engagement, Computershare will be providing a web site for the dissemination of these proxy materials, printing, mailing and tabulation
services. The estimated fees anticipated to be paid to Computershare is approximately [$8,080]. The Fund will also reimburse brokerage
firms and others for their expenses in forwarding solicitation materials to the beneficial owners of the Fund’s Common Shares.
Stockholder Communications with Board of Directors
Stockholders may mail written communications to the
Fund’s Board, to committees of the Board or to specified individual Directors in care of the Secretary of the Fund, 1290 Broadway,
Suite 1000, Denver, Colorado 80203. All stockholder communications received by the Secretary will be forwarded promptly to the Board,
the relevant Board’s committee or the specified individual Directors, as applicable, except that the Secretary may, in good faith,
determine that a stockholder communication should not be so forwarded if it does not reasonably relate to the Fund or its operations,
management, activities, policies, service providers, Board, officers, stockholders or other matters relating to an investment in the Fund
or is purely ministerial in nature.
Proxy Delivery and Householding
If you and another stockholder share the same address,
the Fund may only send one Proxy Statement unless you or the other stockholders(s) request otherwise. Call or write to the Fund if you
wish to receive a separate copy of the Proxy Statement, and the Fund will promptly mail a copy to you. You may also call or write to the
Fund if you wish to receive a separate proxy in the future or if you are receiving multiple copies now and wish to receive a single copy
in the future. You may contact the Fund at 1290 Broadway, Suite 1000, Denver, Colorado 80203, or by telephone at (855) 830-1222.
YOUR VOTE IS IMPORTANT! Please
VOTE By ANY OF THE FOLLOWING METHODS:
|
(1)
|
date and sign the enclosed proxy and return it promptly in the enclosed reply envelope;
|
|
(2)
|
VISIT THE WEBSITE LISTED ON YOUR PROXY CARD; OR
|
|
(3)
|
CALL THE NUMBER LISTED ON YOUR PROXY CARD.
|
IF VOTING BY PAPER, IT IS IMPORTANT THAT THE PROXY BE RETURNED PROMPTLY.
YOU MAY ALSO VOTE BY ATTENDING THE MEETING TELEPHONICALLY.
Intentionally Left Blank
Intentionally Left Blank
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