Item 1.01 - Entry into a Material Definitive Agreement
New Distribution and Sub-Placement Agent Agreements
Reaves Utility Income Fund (NYSE American: UTG) (the "Fund") has entered into a
distribution agreement (the "Distribution Agreement"), dated September 19, 2022,
with Paralel Distributors LLC ("Paralel Distributors"), pursuant to which the
Fund may offer and sell up to 8,000,000 common shares of beneficial interest, no
par value ("Common Shares"), from time to time through Paralel Distributors in
transactions deemed to be "at the market" as defined in Rule 415 under the
Securities Act of 1933, as amended (the "Offering").
The Offering is being made pursuant a prospectus supplement, dated November 24,
2021 and the accompanying prospectus, also dated November 24, 2021, each of
which constitute part of the Fund's effective shelf registration statement on
Form N-2 (File No. 333-261328) previously filed with the Securities and Exchange
Commission (the "Registration Statement"). Under the Investment Company Act of
1940, as amended, the Fund may not sell any Common Shares at a price below the
current net asset value of such common shares, exclusive of any distributing
commission or discount.
Under the Distribution Agreement, Paralel Distributors may enter into
sub-placement agent agreements with one or more selected dealers. Paralel
Distributors has entered into a sub-placement agent agreement, dated September
19, 2022 (the "Sub-Placement Agent Agreement"), with UBS Securities LLC ("UBS")
relating to the Common Shares to be offered under the Distribution Agreement.
Pursuant to the Distribution Agreement, the Fund will compensate Paralel
Distributors with respect to sales of Common Shares at a commission rate of
1.00% of the gross proceeds of the sale of Common Shares. Out of this
commission, under the Sub-Placement Agent Agreement, Paralel Distributors will
compensate UBS at a rate of up to 0.80% of the gross sales proceeds of the sale
of the Common Shares sold by UBS.
The Distribution Agreement replaces the materially similar distribution
agreement between the Fund and ALPS Distributors, Inc. ("ADI"), dated November
14, 2019, as amended on October 6, 2020, June 21, 2021 and November 22, 2021
(collectively, the "Prior ADI Agreement"). The Distribution Agreement and Prior
ADI Agreement contain materially similar terms except for the parties to the
agreements, number of Common Shares offered for sale and effective date. The
Sub-Placement Agent Agreement replaces the materially similar sub-placement
agent agreement between ADI and UBS, dated November 14, 2019, as amended on
August 12, 2020, October 6, 2020, June 21, 2021 and November 22, 2021 ("Prior
SPA Agreement"). The Sub-Placement Agent Agreement and Prior SPA Agreement
contain materially similar terms except for the parties to the agreements,
number of Common Shares offered for sale, and effective date.
Under the Prior ADI Agreement and Prior SPA Agreement, the Fund could offer and
sell up to 23,000,000 Common Shares from time to time through ADI and UBS,
respectively. From the date of the commencement of the Offering, November 24,
2021, through September 16, 2022, 5,077,802 Common Shares have been sold through
ADI and UBS in the Offering. From November 14, 2019 through September 16, 2022,
22,026,485 Common Shares have been sold through ADI and UBS in aggregate in the
Offering and a prior "at the market" offering. Each of the Prior ADI Agreement
and Prior SPA Agreement are terminated effective September 19, 2022.
Paralel Distributors' principal business address is 1700 Broadway, Suite 1230,
Denver, Colorado 80290, which, beginning September 19, 2022, is also the address
at which shareholders may request a free copy of the prospectus supplement,
accompanying prospectus, statement of additional information, or the Fund's
annual and semi-annual reports.
The foregoing descriptions of the Distribution Agreement and the Sub-Placement
Agent Agreement do not purport to be complete and are qualified in their
entirety by reference to the full text of the Distribution Agreement filed with
this report as Exhibit 1.1 and incorporated herein by reference, and the full
text of the Sub-Placement Agent Agreement filed with this report as Exhibit 1.2
and incorporated herein by reference.
New Administration and Accounting Agreement
The Fund has entered into a new administration and fund accounting agreement
(the "Paralel Agreement") with Paralel Technologies LLC ("Paralel") pursuant to
which Paralel will begin serving as the Fund's administrator effective September
19, 2022. Paralel will replace the Fund's current administrator, ALPS Fund
Services, Inc. ("ALPS"), effective September 19, 2022. Paralel's principal
business address is 1700 Broadway, Suite 1230, Denver, Colorado 80290 and is the
parent company of Paralel Distributors.
The Paralel Agreement is materially similar to the Fund's administration and
fund accounting agreement with ALPS (the "ALPS Administration Agreement"),
except with respect to the fees, effective date, parties to the agreements, and
certain marketing services provided. Pursuant to the Paralel Agreement, Paralel
will provide the Fund with fund accounting, tax, fund administration, and
compliance services, providing the Fund with certain executive officers, and
generally managing the business affairs of the Fund. These services are
materially similar to those provided by ALPS under the ALPS Administration
Agreement, except that in addition to those listed above, Paralel (itself or
through its affiliates) also agrees to provide secondary market support to the
Fund up to a specified amount in the Paralel Agreement .
The Paralel Agreement provides that from its fees earned, Paralel will pay all
expenses incurred by the Fund with the exception of advisory fees; taxes and
governmental fees; expenses related to portfolio transactions and management of
the portfolio; expenses associated with secondary offerings of shares; trustee
fees and expenses; expenses associated with tender offers and other share
repurchases; and other extraordinary expenses. For these services, Paralel is
entitled to receive a monthly fee at the annual rate of 0.15% on the first $2
billion of the average daily total assets of the Fund and 0.10% on any amount in
excess of $2 billion of the average daily total assets of the Fund. Under the
ALPS Administration Agreement, for its services, ALPS was entitled to receive a
monthly fee at the annual rate of 0.265% on the first $2.5 billion of the
average daily total assets of the Fund and 0.240% on any amount in excess of
$2.5 billion of the average daily total assets of the Fund. From its fees, ALPS
paid all expenses incurred by the Fund, except for certain exceptions that are
materially similar to those described above under the Paralel Agreement. The
ALPS Administration Agreement is terminated effective September 19, 2022.
The foregoing description of the Paralel Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Paralel Agreement filed with this report as Exhibit 1.3 and incorporated herein
by reference.
Item 1.02 - Termination of a Material Definitive Agreement.
The relevant information relating to the termination of the Prior ADI Agreement,
Prior SPA Agreement, and ALPS Administration Agreement found in Item 1.01 above
is hereby incorporated by reference into this Item 1.02.
Item 5.02 Departure of Certain Officers; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
The Board of Trustees have appointed Jill Kerschen, Christopher Moore, and
Bradley Swenson to serve as Treasurer, Secretary, and Chief Compliance Officer,
respectively, of the Fund effective as of September 19, 2022. Each officer
appointed are employees of Paralel and/or its affiliates. The Paralel officer
appointments were made in connection with the resignations of Jennell Panell,
Sareena Khwaja-Dixon, and Ted Uhl, the Fund's prior Treasurer, Secretary, and
Chief Compliance Officer, respectively, that were tendered in connection to the
termination of ALPS as the Fund's administrator, as described in Item 1.01
above.
Ms. Kerschen, born in 1975, joined Paralel in 2021 and currently serves as
Director of Fund Administration. Prior to joining Paralel, Ms. Kerschen was Vice
President at ALPS Advisors, Inc. from 2019 to 2021, and served as Vice President
and Fund Controller at ALPS Fund Services, Inc. from 2013 to 2019. Ms. Kerschen
also has served as the Treasurer and Vice President of the SRH Total Return
Fund, Inc. since 2021.
Mr. Moore, born in 1984, serves as the General Counsel and Chief Compliance
Officer of Paralel and Paralel Advisors LLC, and General Counsel of Paralel
Distributors since 2021. Mr. Moore served as Deputy General Counsel and Legal
Operations Manager of RiverNorth Capital Management, LLC from 2020 to 2021; VP
and Senior Counsel of ALPS Fund Services, Inc. from 2016 to 2020; and associate
at Thompson Hine LLP from 2013 to 2016. Mr. Moore previously obtained his CPA at
Ernst & Young from 2007 to 2009. Mr. Moore also has served as the Secretary,
Chief Compliance Officer and Vice President of the SRH Total Return Fund, Inc.
since 2021.
Mr. Swenson, born in 1972, serves as Director of Compliance Services of Paralel,
and President and Chief Compliance Officer of Paralel Distributors since 2022.
Mr. Swenson also served as President of TruePeak Consulting, LLC from 2021 to
present; and President from 2019 to 2021 and Chief Operating Officer from 2015
to 2021 of ALPS and ADI, respectively. Mr. Swenson also has served as the Chief
Compliance Officer of Cullen Funds Trust since 2022.
Officers of the Fund who are employed by Paralel or Paralel Distributors receive
no compensation from the Fund. No officer employed by Paralel or Paralel
Distributors owns any shares of the Fund.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
1.1 Distribution Agreement between the Fund and Paralel Distributors
LLC
1.2 Sub-Placement Agent Agreement between Paralel Distributors LLC and
UBS Securities LLC
1.3 Administration and Accounting Agreement between Paralel Technologies
LLC and the Fund© Edgar Online, source Glimpses
REAVES UTILITY INCOME FUND 
