PROXY VOTING GUIDELINES

Robert Bender & Associates has long recognized the fiduciary obligations inherent in the proxy voting process. Accordingly, we have established polices and procedures designed to ensure that we vote client securities in the best interests of our clients and in a manner that eliminates or minimizes any conflicts of interests that may arise between our clients and us.

The guidelines below are intended to provide you with a general and basic overview of our proxy voting philosophy. These guidelines are not intended to be hard and fast rules. No set of policies and procedures can be designed to anticipate every situation that may arise. Therefore, in particular circumstances, we may attempt to determine how a particular proposal might impact the financial prospects of a company and vote accordingly.

 

OUR GUIDELINES

Corporate Governance and Independence

We believe that efficient and proper corporate function depends upon the competence and integrity of corporate directors, as it is their responsibility to oversee management while adhering to unimpeachable ethical standards. We believe that ethical corporate governance coupled with independence from management strengthens a system of checks and balances and promotes a culture of responsibility within the companies in which we invest on behalf of our clients. Consistent with these beliefs, our voting decisions favor proposals for:

  • The annual election of all board members, as opposed to staggered terms;
  • Confidential balloting;
  • Cumulative voting;
  • Independent boards and nominating, audit, compensation and governance committees;
  • Coupling executive compensation with financial performance; and
  • Reporting on corporate political contributions and lobbying costs.
  • Corporate Structure and Shareholder Rights

We believe that shareholders, as the owners of a company, should have voting power that reflects their equity interest in a company. Thus, we oppose measures that restrict shareholders' proportionate voting power. In addition, while we are opposed in principle to policies that serve to entrench current management, we consider on a case by case basis policies and structures that are designed to prevent or obstruct corporate takeovers.

We generally support proposals requiring that shareholders be given the opportunity to vote on the adoption of so called "poison-pill" or "chewable-pill" plans;

We generally oppose proposals that authorize generous "golden parachute" plans because they impede potential takeovers that shareholders should be free to consider;

We consider proposals for the adoption of "sunset" provisions on a case by case basis. We generally support such proposals if they are linked to a business strategy that will, in our judgment, likely result in greater value for shareholders. We believe that sunset plans must be of a short term, and require shareholder approval to reinstate on expired plan or adopt a new plan at the end of a plan term;

We favor proposals that require simple majority votes by shareholders on matters submitted for their approval and, generally, we oppose proposals that impose supermajority voting requirements; and

We oppose proposals for the creation of classes of common stock with unequal voting rights, or the adoption of a dual or multi-class capitalization structure.

Equity-based Compensation Plans

We favor the use of equity-based compensation plans that align the interests of management with those of shareholders by providing management and employees with an incentive to increase shareholder value. We evaluate equity-based compensation plans on a case-by-case basis. Generally, our voting decisions favor plans or plan amendments in which:

  • Awards to non-employee directors are not subject to management discretion;
  • The dilutive effect, in conjunction with other equity related plans, does not exceed 10%. However, if a plan or plan amendment does not meet this criteria, we also evaluate its dilutive effect considering all the circumstances affecting a company;
  • The minimum exercise price of stock options is not less than 100% of fair market value of the stock on the date of grant;
  • Neither the board of directors nor any of its committee is authorized to materially amend a plan without shareholder approval;
  • The re-pricing of stock options, including the cancellation and exchange of options, is not permitted without shareholder approval; and
  • The granting of awards is reasonable.

Independent Auditors

We believe that corporate audit committees are obligated to undertake a primary role in ensuring that the engagement of a company's independent auditor is limited primarily to the audit function. Accordingly, we favor proposals which impose restrictions on the engagement of auditing firms that provide both auditing services and business consulting services to a company.

Corporate Social Policies

We believe that a corporations primary responsibility is to maximize return for its shareholders. However, we recognize that in certain circumstances social policies may have an economic impact on a company. We believe that determinations on issues of social policy are the responsibility of management. Accordingly, we generally oppose shareholder proposals concerning social policies, although we assess all such proposals on a case by case basis.

 

RECORDKEEPING

We are required to retain certain records on how we voted proxies on behalf of our clients. We must retain:

  • A copy of these proxy voting policies and procedures;
  • A copy of proxy statements received;
  • Records of the votes we cast on behalf of clients;
  • Records of client requests for proxy voting information; and
  • Any documents prepared by us that were material to our decision how to vote on a particular proposal.

In certain cases, we may rely on proxy statements filed on the United States Securities and Exchange Commission's EDGAR system instead of keeping our own copies of certain records. We may also rely on records retained by proxy voting services for certain other information that we are required to maintain, in which case we will have obtained an undertaking from the proxy voting service to provide a copy of the documents to us promptly upon our request.

RESOLVING CONFLICTS OF INTEREST

In certain circumstances, we may believe that we have a conflict of interest in voting on a particular proposal. Generally, it is our policy to disclose such conflict to our clients, in writing, and obtain their written consent before voting on the proposal. In the absence of client disclosure and consent, we will take other steps that, in our judgment, are designed to ensure that the decision to vote the proxies was based on the clients' best interests and was not the result of the conflict of interest.

OBTAINING INFORMATION

It is our policy to disclose to our clients information on how we voted the securities they hold. We make this information available to each client, upon request, and only with respect to that client's holdings.

We make these guidelines available to our clients upon our engagement and any time a copy is requested by the client.