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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
WORLD FUNDS TRUST
(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 the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
COMMONWEALTH SMALL CAP FUND
a series of
WORLD FUNDS TRUST
8730 Stony Point Parkway, Suite 205
Richmond, Virginia 23235
(800) 673-0550
June __, 2009
Dear Shareholder:
Enclosed is a notice, proxy statement, and proxy card for a Special Meeting of
Shareholders ("the Meeting") of the Commonwealth Small Cap Fund (the "Fund"), a
series of World Funds Trust (the "Trust"). The Meeting is scheduled for
Thursday, June 25, 2009. If you are a shareholder of record of the Fund at the
close of business on Monday, June 8, 2009, you are entitled to vote at the
Meeting, and any adjournment of the Meeting, on a proposal to approve a new
investment subadvisory agreement for the Fund.
The proposed investment subadvisory agreement (the "Subadvisory Agreement") is
between Commonwealth Capital Management, LLC (the "Adviser"), the Fund's
investment adviser, and Crosswind Investments, LLC ("Crosswind"). The
Subadvisory Agreement is being proposed as part of a strategic decision to
partner with Crosswind, whose advisory expertise is focused on growth, as a
complement to the Fund's current subadviser, Investment Management of Virginia,
LLC, whose investment focus is on value. By adding Crosswind as a subadviser to
the Fund, the Fund will become a true "core" small cap mutual fund, with an
investment strategy that encompasses both growth and value approaches to stock
selection.
At a meeting held on June 12, 2009, the Board of Trustees of the Trust reviewed
and approved the Subadvisory Agreement, subject to shareholder approval. Based
on information that the Board received from Crosswind, the Board concluded that
it is in the best interests of shareholders to approve the Subadvisory Agreement
and recommended that the proposal be submitted to shareholders for approval.
More specific information about the proposal is contained in the proxy
statement, which you should consider carefully.
The Board of Trustees of World Funds Trust has unanimously approved the proposal
and recommends that you vote FOR the proposal as described in the proxy
statement.
Your vote is important to us. Please take a few minutes to review the proxy
statement and vote your shares today. We have enclosed a proxy card that we ask
you to mark, sign, date and return as soon as possible, unless you plan to
attend the Meeting. If we do not receive your vote promptly, you may be
contacted by a representative of the Fund, who will remind you to vote your
shares.
Thank you for your attention and consideration of this important proposal and
for your investment in the Fund. If you need additional information, please call
shareholder services at 1-800-673-0550.
Sincerely,
Franklin A. Trice, III
Chairman
COMMONWEALTH SMALL CAP FUND
a series of
WORLD FUNDS TRUST
8730 Stony Point Parkway, Suite 205
Richmond, Virginia 23235
(800) 673-0550
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 25, 2009
Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
the Commonwealth Small Cap Fund (the "Fund"), a series of World Funds Trust (the
"Trust"), will be held at the offices of the Trust, 8730 Stony Point Parkway,
Suite 205, Richmond, Virginia 23235 on Thursday, June 25, 2009 at 4 p.m. Eastern
Time.
At the Meeting, shareholders will be asked to approve an investment subadvisory
agreement between Commonwealth Capital Management, LLC (the "Adviser"), the
Fund's investment adviser, and Crosswind Capital Management, Inc. ("Crosswind"),
a form of which is attached to the proxy statement as Exhibit A, and to transact
such other business, if any, as may properly come before the Meeting.
Shareholders of record at the close of business on Monday, June 8, 2009, are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
Shareholders are cordially invited to attend the Meeting in person. However, if
you are unable to attend the Meeting, you are requested to complete, sign, and
date the proxy card and return it promptly in the postage-paid envelope so that
the Meeting may be held and a maximum number of shares may be voted. It is
important that your vote be received before 4 p.m. on Thursday, June 25, 2009.
Your vote is important no matter how many shares you own. You may change your
vote even though a proxy has already been returned by written notice to the
Fund, by submitting a subsequent proxy using the mail, or by voting in person at
the Meeting.
Please read carefully the proxy statement when it becomes available because it
contains important information you should consider when casting your vote. We
will provide you with a proxy statement in final form, along with a proxy card,
on or about June 22, 2009. You may also obtain the proxy materials without
charge from the website of the U.S. Securities and Exchange Commission at
www.sec.gov.
By Order of the Board of Trustees
Franklin A. Trice, III
Chairman
June 12, 2009
COMMONWEALTH SMALL CAP FUND
a series of
WORLD FUNDS TRUST
8730 Stony Point Parkway, Suite 205
Richmond, Virginia 23235
(800) 673-0550
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 25, 2009
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Trustees of World Funds Trust (the "Trust") for use at the
special meeting of shareholders of the Commonwealth Small Cap Fund (the "Fund")
to be held on Thursday, June 25, 2009 at 4 p.m. Eastern Time at the offices of
the Trust, 8730 Stony Point Parkway, Suite 205, Richmond, Virginia 23235, and at
any adjournment thereof (the "Meeting"). Shareholders of record at the close of
business on Monday, June 8, 2009 (the "Record Date") are entitled to vote at the
Meeting. The proxy card and this proxy statement are being hand delivered and/or
mailed to shareholders on or about June 22, 2009.
At the Meeting, shareholders will be asked to vote on a proposal to approve an
investment subadvisory agreement between Commonwealth Capital Management, LLC
(the "Adviser"), the Fund's investment adviser, and Crosswind Investments, LLC
("Crosswind"). Each full share will be entitled to one vote at the Meeting and
each fraction of a share will be entitled to the fraction of a vote equal to the
proportion of a full share represented by the fractional share. As of the Record
Date, there were 124,458.272 shares of beneficial interest of the Fund
outstanding and entitled to be voted.
If you wish to participate in the Meeting you may submit the proxy card included
with this proxy statement or attend in person. Your vote is important no matter
how many shares you own. You can vote easily and quickly by mail or in person.
At any time before the Meeting, you may change your vote, even though a proxy
has already been returned, by written notice to the Fund or by submitting a
subsequent proxy by mail or by voting in person at the meeting. Should you
require additional information regarding the proxy or replacement proxy cards,
you may contact the Fund at 1-800-673-0550.
The solicitation of proxies will be done in person and by mail, but may include
telephonic or other communication by officers and service providers of the Fund,
who will not be paid for these services. The costs of the solicitation of
proxies and the costs of holding the Meeting will be borne by Crosswind, not the
Fund. All proxy cards solicited that are properly executed and received in time
to be voted at the Meeting will be voted according to the instructions on the
proxy card. If no specification is made on a proxy card, it will be voted FOR
the matter specified on the proxy card. One-third of the shares entitled to vote
at the Meeting shall be a quorum for the transaction of business. For purposes
of determining the presence of a quorum, abstentions or broker non-votes will be
counted as present.
The approval of the proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of the Fund. Under the Investment Company Act of
1940, as amended (the "1940 Act"), the vote of a "majority of the outstanding
voting securities" means the affirmative vote of the lesser of: (a) 67% or more
of the voting securities present at the meeting or represented by proxy if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy; or (b) more than 50% of the outstanding voting securities.
PROPOSAL - APPROVAL OF THE INVESTMENT SUBADVISORY AGREEMENT
Introduction
At the Meeting, it is proposed that an investment subadvisory agreement between
the Adviser and Crosswind (the "Proposed Agreement") be approved by shareholders
of the Fund. For the reasons discussed below, the Board of Trustees of the Trust
(the "Board") recommends that shareholders vote FOR the approval of the Proposed
Agreement.
Summary
The Adviser serves as the investment adviser to the Fund and oversees the
Sub-Adviser to ensure it complies with the investment policies and guidelines of
the Fund and monitors the Sub-Adviser's adherence to its investment style. In
addition, the Adviser periodically assesses the Fund's investment policies and
recommends changes regarding the policies to the Board where appropriate.
Pursuant to a subadvisory agreement with the Adviser, Investment Management of
Virginia, LLC ("IMVA") serves as the subadviser to the Fund and is responsible
for the day-to-day management of the Fund's assets in accordance with its
investment objective. As discussed more fully below, the Adviser has recommended
and the Board has approved the engagement of Crosswind as an additional
subadviser to the Fund. The Adviser based its recommendation on the belief that
Crosswind's experience in managing small cap strategies with a focus on growth
will benefit the Fund and complement the value focus of the Fund's current
subadviser. By adding Crosswind as a subadviser to the Fund, the Fund will
become a true "core" small cap mutual fund, with an investment strategy that
encompasses both growth and value approaches to stock selection. It is intended
that day-to-day management of the Fund's assets will be equally divided between
the subadvisers such that each of IMVA and Crosswind generally will be
responsible for the investment of half of the Fund's assets.
If approved by shareholders, the Proposed Agreement will remain in effect in
accordance with its terms for an initial period of two years and then will
continue in effect from year to year so long as it is approved annually by the
Board. Additional information about the Proposed Agreement appears below.
Information on Crosswind
Crosswind is a majority employee-owned firm located at 2 International Place,
Boston, Massachusetts 02110. It was founded in 2006 to exclusively focus on high
value-added equity investment strategies. Cowen Group, Inc. holds a minority
interest in Crosswind of 19.9%. As of ___________, 2009, Crosswind had $________
assets under management. Crosswind is an investment adviser registered in the
State of Virginia and filed its registration with the Securities and Exchange
Commission on May 29, 2009. Crosswind will be registered as an investment
adviser with the SEC prior to serving as a subadviser of the Fund. Listed below
are the names and principal occupations of each of Crosswind's principal
executive officers and partners. The principal business address of each
principal executive officer and partner is 2 International Place, Boston,
Massachusetts 02110.
Name Position with Crosswind
Malcolm MacColl Managing Partner and Chief Executive Officer
Michael Raso Partner
Andrew Morey, CFA Partner
Lisa Mikes Partner
Timothy Gasperoni, PhD Senior Analyst
Description of the Proposed Agreement
A copy of the form of Proposed Agreement is attached to this proxy statement as
Exhibit A. Pursuant to the Proposed Agreement, and under the direction of the
Adviser, Crosswind will make the investment decisions and continuously review,
supervise, and administer the investment program for that portion of the Fund's
assets under its management, subject to the supervision of and policies
established by the Board. The contractual investment advisory fee payable by the
Fund to the Adviser will not change. The Adviser will pay Crosswind a fee out of
the advisory fee it receives from the Fund at an annual rate of 0.45% of the
average daily value of the Fund's assets managed by Crosswind. After an initial
two year term, the Proposed Agreement shall continue in effect if specifically
approved annually (a) by the vote of a majority of those members of the Board
who are not parties to the agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by vote of either the Board or of a majority of the outstanding voting
securities of the Fund. The Proposed Agreement will terminate automatically (a)
in the event of its assignment and (b) upon the termination of the advisory
agreement between the Adviser and the Trust with respect to the Fund. The
Proposed Agreement is terminable without penalty by Adviser and by the Board on
sixty days written notice. The Proposed Agreement provides that Crosswind shall
not be protected against any liability resulting from (a) a breach of fiduciary
duty with respect to the receipt of compensation for services, (b) willful
misfeasance, bad faith or negligence on its part in the performance of its
duties, or (c) reckless disregard by it of its obligations or duties.
Board Approval of the Proposed Agreement
At a meeting of the Board held on June 12, 2009, the Board, including those
trustees who are not "interested persons" of the Trust, as that term is defined
in the 1940 Act (the "Independent Trustees"), unanimously approved the
engagement of Crosswind as a subadviser to the Fund and the Proposed Agreement,
subject to approval by the Fund's shareholders.
At the meeting, representatives of the Adviser stated that they had evaluated
Crosswind's investment management capabilities and believed the addition of
Crosswind as a subadviser would be in the best interest of the Fund. They
discussed the benefits they believe such a strategic partnership would bring to
the Fund. By broadening the Fund's investment approach to encompass both growth
and value criteria, it is anticipated that the Fund will have broader investment
appeal in the small cap market, thus leading to a growth of assets. The Adviser
noted that there would be no change to the Fund's investment objective. The
Adviser also discussed its decision to reduce the contractual expense limitation
on the Fund's total annual operating expenses from 1.49% to 1.34% as part of the
strategic plan for the Fund. The reduced expense limit would remain in place at
least until July 31, 2010.
The Board evaluated information regarding Crosswind in order to consider the
subadvisory fee and other aspects of the Proposed Agreement. In preparation for
the meeting, the Board requested and received a variety of information from
Crosswind, including written materials regarding: (a) quality of investment
management and other services; (b) investment management personnel; (c)
operations; (d) compliance systems; (e) policies and procedures for personal
securities transactions; and (f) reputation, expertise, and resources in
domestic financial markets. Also at the meeting, representatives from Crosswind
presented oral information to the Board to help the Board evaluate the Proposed
Agreement.
The Board received and considered information regarding the nature, extent, and
quality of services to be provided to the Fund by Crosswind. In this regard, the
Board evaluated, among other things, Crosswind's personnel, experience, track
record, and compliance program. The Board considered the background and
experience of Crosswind's senior management and the expertise of, and amount of
attention expected to be given to the Fund by, its portfolio management team.
The Board reviewed the qualifications, background, and responsibilities of the
portfolio manager who will be responsible for the day-to-day management of the
Fund. The Board also reviewed information pertaining to Crosswind's
organizational structure, senior management, investment operations, and other
relevant information. The Board concluded that, within the context of its full
deliberations, the nature, extent, and quality of the services to be provided to
the Fund by Crosswind supported the approval of the Proposed Agreement.
With respect to the subadvisory fee, the Board considered the rate of
compensation under the Proposed Agreement and that the total investment advisory
fee payable by the Fund would not increase. The Board concluded that, within the
context of its full deliberations, the subadvisory fee under the Proposed
Agreement is reasonable and supported the approval of the Proposed Agreement.
In its deliberations, the Board did not identify any single piece of information
that was all-important or controlling. Based on the Board's deliberations and
its evaluation of the information described above, the Board, including all of
the Independent Trustees, unanimously approved the Proposed Agreement.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE TO
APPROVE THE PROPOSAL.
ADDITIONAL INFORMATION
Other Service Providers
Commonwealth Shareholder Services, Inc. ("CSS") serves as the Fund's
administrator. Commonwealth Fund Services, Inc. ("CFSI") serves as the
Fund's transfer agent. First Dominion Capital Corp. ("FDCC") serves as the
Fund's distributor and principal underwriter. CSS, CFSI and FDCC are located
at 8730 Stony Point Parkway, Suite 205, Richmond, Virginia 23235.
Payment of Expenses
Crosswind will pay the expenses of the preparation, printing, and mailing of
this proxy statement and materials and of all related solicitations. The Fund
will not incur any of these expenses.
Beneficial Ownership of Shares
The following table contains information about the beneficial ownership by
shareholders of 5% or more of the Fund's outstanding shares as of the Record
Date. On that date, the existing trustees and officers of the Fund, together as
a group, beneficially owned less than 1% of the Fund's outstanding shares.
----------------------------------------------------------
Percentage
Name and Address of Number of of Shares
Shareholder Shares Owned
----------------------------------------------------------
----------------------------------------------------------
Mary T. Pasco 10,00.000 8.03%
212 S. Mooreland Rd.
Richmond, VA 23229
----------------------------------------------------------
----------------------------------------------------------
Jack Bocock 50,000.000 40.17%
1801 Westview Rd.
Charlottesville, VA 22903
----------------------------------------------------------
----------------------------------------------------------
Davenport & Company LLC 24,712.644 19.86%
1801 Westview Rd.
Charlottesville, VA 22903
----------------------------------------------------------
----------------------------------------------------------
Thomas & Hwei Lin Sung 39,745.628 31.93%
655 Long Boat Club Rd.,
#18A
Longboat Key, FL 34228
----------------------------------------------------------
The term "beneficial ownership" is as defined under Rule 16a-1(a)(2) under the
1934 Act. The information as to beneficial ownership is based on statements
furnished to the Fund by the existing Trustees of the Fund, and/or on the
records of the Fund's transfer agent.
Shareholder Reports
The Fund's semiannual report for its first fiscal half year ended January 31,
2009 was previously provided to shareholders. For an additional copy free of
charge, shareholders may call toll free 1-800-673-0550 or write to the Fund at
Commonwealth Small Cap Fund, 8730 Stony Point Parkway, Suite 205, Richmond,
Virginia 23235 or send a request by email to mail@ccofva.com.
Submission of Shareholder Proposals
The Trust is organized as a Delaware statutory trust. As such, the Trust is not
required to, and does not, have annual meetings. Nonetheless, the Board of
Trustees may call a special meeting of shareholders for action by shareholder
vote as may be required by the 1940 Act or as required or permitted by the
Declaration of Trust and By-Laws of the Trust. Shareholders who wish to present
a proposal for action at a future meeting should submit a written proposal to
the Trust for inclusion in a future proxy statement. Shareholders retain the
right to request that a meeting of the shareholders be held for the purpose of
considering matters requiring shareholder approval.
Voting and Other Matters
Abstentions and "broker non-votes" will not be counted for or against the
proposal but will be counted for purposes of determining whether a quorum is
present. The Fund believes that brokers who hold shares as record owners for
beneficial owners have the authority under the rules of the various stock
exchanges to vote those shares with respect to the proposals when they have not
received instructions from beneficial owners.
No business other than the matter described above is expected to come before the
Meeting, but should any matter incident to the conduct of the Meeting or any
question as to an adjournment of the Meeting arise, the persons named in the
enclosed proxy will vote thereon according to their best judgment in the
interest of the Fund.
Adjournment
If a quorum is not present at the Meeting or in the event that sufficient votes
in favor of the proposal are not received by the time scheduled for the Meeting,
the persons named as proxies may propose one or more adjournments of the Meeting
for a period or periods to permit further solicitation of proxies with respect
to the proposal. Any such adjournment will require the affirmative vote of a
majority of the votes cast on the question in person or by proxy at the session
of the meeting to be adjourned. Abstentions and "broker non-votes" will not be
counted for or against such proposal to adjourn. The persons named as proxies
will vote in favor of adjournments with respect to a proposal those proxies that
they are entitled to vote in favor of such proposal. They will vote against any
such adjournment those proxies required to be voted against the proposal.
Crosswind will bear the costs of any additional solicitation and any adjourned
sessions.
Shareholders who do not expect to be present at the special meeting and who wish
to have their shares voted are requested to vote by mail as explained in the
instructions included on your proxy card.
By Order of the Trustees,
Franklin A. Trice, III
Chairman
Dated: June __, 2009
Exhibit A
FORM OF INVESTMENT SUBADVISORY AGREEMENT
Investment Sub-Advisory Agreement (the "Agreement") dated this ____ day of
_____, 2009 by and between Commonwealth Capital Management, LLC, a Virginia
limited liability company (the "Adviser"), a registered investment adviser under
the Investment Advisers Act of 1940, as amended, and Crosswind Investments, LLC,
(the "Sub-Adviser"), a registered investment adviser under the Investment
Advisers Act of 1940, as amended.
WHEREAS, The World Funds Trust. (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and consists of one or more series of shares, each
having its own investment objective and policies and each with one or more
separate classes of shares;
WHEREAS, the Trust has retained the Adviser to furnish investment advisory
and management services to the Commonwealth Small Cap Fund, a series of the
Trust (the "Fund"), subject to the control of the Trust's Board of Trustees (the
"Board" or the "Trustees"), and the Adviser is willing to so furnish such
services; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist it in
furnishing investment advisory and management services to the Fund, subject to
the control of the Adviser, and the Sub-Adviser is willing to so furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be bound, it is agreed between the parties
hereto as follows:
1. Appointment. The Adviser, as permitted by the investment advisory agreement
by and between the Trust and the Adviser, hereby appoints the Sub-Adviser to act
as the sub-adviser to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. Duties of the Sub-Adviser. Subject to the supervision of the Adviser, the
Sub-Adviser will assist the Adviser in managing the investment and reinvestment
of the assets of the Fund, and will continuously review, supervise, and
administer the investment program of the Fund, to determine in its discretion
the securities to be purchased or sold, to provide the Trust and Commonwealth
Shareholder Services, Inc. (the "Administrator") with records concerning the
Sub-Adviser's activities which the Trust is required to maintain, and to render
regular reports to the Adviser, the Trust's officers and Board and to the
Administrator, concerning the Sub-Adviser's discharge of the foregoing
responsibilities.
The Sub-Adviser shall discharge the foregoing responsibilities subject to
the control of the Adviser and the Trust's Board and in compliance with such
policies as the Board may from time to time establish, and in compliance with
the objectives, policies and limitations for the Fund as set forth in the Fund's
prospectus and statement of additional information, as amended from time to
time, and applicable laws and regulations. The Trust will instruct each of its
agents and contractors to cooperate in the conduct of the business of the Fund.
The Sub-Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings, and equipment
and the personnel required by it to perform the services on the terms and for
the compensation provided herein.
3. Portfolio Transactions. The Sub-Adviser is authorized to select the brokers
and dealers that will execute the purchases and sales of portfolio securities
for the Fund and is directed to use its best efforts to obtain the best price
and execution for the Fund's transactions in accordance with the policies of the
Trust as set forth from time to time in the Fund's prospectus and Statement of
Additional Information. The Sub-Adviser will promptly communicate to the Trust
and to the Administrator such information relating to portfolio transactions as
they may reasonably request.
It is understood that the Sub-Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in breach of
any obligation owing to the Trust under this Agreement, or otherwise, by reason
of its having directed a securities transaction on behalf of the Trust to an
unaffiliated broker-dealer in compliance with the provisions of Section 28(e) of
the Securities Exchange Act of 1934 or as described from time to time by the
Fund's prospectus and statement of additional information. Subject to the
foregoing, the Sub-Adviser may direct any transaction of the Fund to a broker
which is affiliated with the Adviser or Sub-Adviser in accordance with, and
subject to, the policies and procedures approved by the Board pursuant to Rule
17e-1 under the 1940 Act. Such brokerage services are not deemed to be provided
under this Agreement.
4. Compensation of the Sub Adviser. For the services to be rendered by the
Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation at the rate specified in the Schedule attached hereto and made a
part of this Agreement. Such compensation shall be paid monthly, from collected
Advisory fees, to the Sub-Adviser and calculated by applying a daily rate, based
on the annual percentage rates as specified in the attached Schedule, to the
assets within the Fund managed by the Sub-Adviser as determined by the Advisor.
The fee shall be based on the average daily net assets for the month involved.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
5. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Fund.
6. Reports. The Sub-Adviser agrees to furnish to the Adviser and the Trust
current information required for the preparation by such parties of
prospectuses, statements of additional information, proxy statements, reports to
shareholders, certified copies of the Fund's financial statements, and to
furnish such other information and documents with regard to its affairs as each
may reasonably request.
7. Status of the Sub-Adviser. The services of the Sub-Adviser to the Adviser and
to the Trust are not to be deemed exclusive, and the Sub-Adviser shall be free
to render similar services to others so long as its services to the Adviser and
to the Trust are not impaired thereby.
Pursuant to comparable agreements, the Adviser and/or the Trust may also
retain the services of the Sub-Adviser to serve as the investment advisor or
sub-adviser to other series of the Trust.
8. Books and Records. In compliance with the requirements of the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the Trust are
the property of the Trust, and further agrees to surrender promptly to the Trust
any of such records upon the Trust's request. The Sub-Adviser further agrees to
preserve for the periods prescribed by the 1940 Act, and the rules or orders
there under, the records required to be maintained by the 1940 Act.
9. Limitation of Liability of Sub-Adviser. The duties of the Sub-Adviser shall
be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Sub-Adviser hereunder. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Adviser in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or negligence on the part of the Sub-Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement (as used in this paragraph 9, the term
"Sub-Adviser" shall include directors, officers, employees and other corporate
agents of the Sub-Adviser as well as that corporation itself).
10. Permissible Interest. Trustees, agents, and shareholders of the Trust or the
Adviser are or may be interested in the Sub-Adviser (or any successor thereof)
as directors, officers, or shareholders, or otherwise; directors, officers,
agents and shareholders of the Sub-Adviser are or may be interested in the Trust
or the Adviser as directors, officers, shareholders or otherwise; and the
Sub-Adviser (or any successor) is or may be interested in the Trust or the
Adviser as a shareholder or otherwise. In addition, brokerage transactions for
the Trust may be effected through affiliates of the Adviser or Sub-Adviser if
approved by the Trust's Board of Trustees subject to the rules and regulations
of the U.S. Securities and Exchange Commission, and the policies and procedures
adopted by the Trust.
11. Duties and Termination. This Agreement shall become effective on the date
first above written subject to its approval by the shareholders of the Fund and
unless sooner terminated as provided herein, shall continue in effect for two
(2) years from that date. Thereafter, this Agreement shall be renewable for
successive periods of one year each, provided such continuance is specifically
approved annually (a) by the vote of a majority of those members of the Trust's
Board who are not parties to this Agreement or interested persons of any such
party (as that term is defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval, and (b) by vote of either the
Board or of a majority of the outstanding voting securities (as that term is
defined in the 1940 Act) of the Fund. Notwithstanding the foregoing, this
Agreement may be terminated by the Adviser, the Fund or by the Trust at any time
on sixty (60) days' written notice, without the payment of any penalty, provided
that termination must be authorized either by vote of the Board or by vote of a
majority of the outstanding voting securities of the Fund or by the Sub-Adviser
on sixty (60) days written notice. This Agreement will automatically terminate
upon the termination of the Investment Advisory Agreement between the Adviser
and the Trust with respect to the Fund. This Agreement will automatically
terminate in the event of its assignment (as that term in defined in the 1940
Act).
12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. No material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act).
13. Notice. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
address stated below:
(a) To the Trust at: 8730 Stony Point Parkway Suite
205 Richmond, Virginia 23235
(b) To the Adviser at: 8730 Stony Point Parkway Suite
205 Richmond, Virginia 23235
(c) To the Sub-Adviser at: 310 Fourth Street, N.E.
Suite 101 Charlottesville, VA 22902
14. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
15. Applicable Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the Commonwealth of Virginia, and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Virginia, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
16. Entire Agreement. This Agreement consists of the entire agreement of the
parties with respect to the subject matter hereof and supercedes all prior
writings and understandings relating thereto.
17. Counterparts. This Agreement may be executed in two or more counterparts,
each of which, when so executed, shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
COMMONWEALTH CAPITAL MANAGEMENT, LLC
BY: ___________________________________
John Pasco, III
President
Crosswind Investments, LLC
BY: ____________________________________
Malcolm MacColl
Chief Executive Officer
SCHEDULE A TO
SUB-ADVISORY AGREEMENT
BY AND BETWEEN
COMMONWEALTH CAPITAL MANAGEMENT, LLC
AND CROSSWIND INVESTMENTS, LLC
ON BEHALF OF THE COMMONWEALTH SMALL CAP FUND
Pursuant to Paragraph 4 of the Sub-Advisory Agreement, dated
______________ between Commonwealth Capital Management, LLC (the "Adviser") and
CROSSWIND INVESTMENTS, LLC for the COMMONWEALTH SMALL CAP FUND a series of World
Funds Trust. (the "Fund"), the Adviser, subject to the collection of Advisory
fees, shall pay to the Sub-Adviser compensation at an annual rate of 0.45% of
the assets within the fund managed by the Sub-Advisor, as determined by the
Advisor.
COMMONWEALTH SMALL CAP FUND
a series of
WORLD FUNDS TRUST
FORM OF PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 25, 2009
The undersigned, revoking previous proxies with respect to the shares in the
name of undersigned, hereby appoints Karen Shupe and Franklin A. Trice, III as
proxies and each of them, each with full power of substitution, to vote all of
the shares at the Special Meeting of Shareholders of the Commonwealth Small Cap
Fund (the "Fund"), a series of World Funds Trust (the "Trust"), to be held at
the offices of the Trust's administrator, Commonwealth Shareholder Services,
8730 Stony Point Parkway, Suite 205, Richmond, Virginia 23235, at 4:00 pm,
Eastern Time, on June 25, 2009, and any adjournments or postponements thereof
(the "Meeting"), and the undersigned hereby instructs said proxies to vote:
Proposal 1. To approve an investment subadvisory agreement between
Commonwealth Capital Management, LLC and Crosswind Investments, LLC.
____For ____Against ____Abstain
This proxy will, when properly executed, be voted as directed herein by the
signing shareholder(s). If no contrary direction is given when the duly executed
proxy is returned, this proxy will be voted FOR the foregoing proposal and will
be voted in the appointed proxies' discretion upon such other business as may
properly come before the Meeting.
Your signature(s) acknowledges receipt with this proxy of a copy of the Notice
of Special Meeting and the proxy statement. Your signature(s) on this proxy
should be exactly as your name(s) appear on this proxy. If the shares are held
jointly, each holder should sign this proxy. Attorneys-in-fact, executors,
administrators, directors or guardians should indicate the full title and
capacity in which they are signing.
Dated: _____________________
--------------------------------
Signature of Shareholder
--------------------------------
Signature (joint owners)
--------------------------------
Printed Name of Shareholder(s)
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED, POSTAGE-PAID
ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY VOTE IN
PERSON IF YOU ATTEND.