EX-99.WELL PROXYPOL 5 a13-2127_16ex99dwellproxypol.htm EX-99. WELLINGTON PROXY VOTING P

Exhibit 99.Well ProxyPol

 

 

 

Wellington Management Company, LLP

Global Proxy Voting Guidelines

 

 

 

Introduction

 

Upon a client’s written request, Wellington Management Company, LLP (“Wellington Management”) votes securities that are held in the client’s account in response to proxies solicited by the issuers of such securities. Wellington Management established these Global Proxy Voting Guidelines to document positions generally taken on common proxy issues voted on behalf of clients.

 

 

 

 

 

These guidelines are based on Wellington Management’s fiduciary obligation to act in the best economic interest of its clients as shareholders. Hence, Wellington Management examines and votes each proposal so that the long-term effect of the vote will ultimately increase shareholder value for our clients. Because ethical considerations can have an impact on the long-term value of assets, our voting practices are also attentive to these issues and votes will be cast against unlawful and unethical activity. Further, Wellington Management’s experience in voting proposals has shown that similar proposals often have different consequences for different companies. Moreover, while these Global Proxy Voting Guidelines are written to apply globally, differences in local practice and law make universal application impractical. Therefore, each proposal is evaluated on its merits, taking into account its effects on the specific company in question, and on the company within its industry. It should be noted that the following are guidelines, and not rigid rules, and Wellington Management reserves the right in all cases to vote contrary to guidelines where doing so is judged to represent the best economic interest of its clients.

 

 

 

 

 

Following is a list of common proposals and the guidelines on how Wellington Management anticipates voting on these proposals. The “(SP)” after a proposal indicates that the proposal is usually presented as a Shareholder Proposal.

 

 

 

 

 

Voting Guidelines

 

Composition and Role of the Board of Directors

 

 

 

 

 

 

 

 

 

·       Election of Directors:

 

Case-by-Case

 

 

We believe that shareholders’ ability to elect directors annually is the most important right shareholders have. We generally support management nominees, but will withhold votes from any director who is demonstrated to have acted contrary to the best economic interest of shareholders. We may also withhold votes from directors who failed to implement shareholder proposals that received majority support, implemented dead-hand or no-hand poison pills, or failed to attend at least 75% of scheduled board meetings.

 

 

 

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·       Classify Board of Directors:

 

Against

 

 

We will also vote in favor of shareholder proposals seeking to declassify boards.

 

 

 

 

 

 

 

 

 

·       Adopt Director Tenure/Retirement Age (SP):

 

Against

 

 

 

 

 

 

 

·       Adopt Director & Officer Indemnification:

 

For

 

 

We generally support director and officer indemnification as critical to the attraction and retention of qualified candidates to the board. Such proposals must incorporate the duty of care.

 

 

 

 

 

 

 

 

 

·       Allow Special Interest Representation to Board (SP):

 

Against

 

 

 

 

 

 

 

·       Require Board Independence:

 

For

 

 

We believe that, in the absence of a compelling counter-argument or prevailing market norms, at least 65% of a board should be comprised of independent directors, with independence defined by the local market regulatory authority. Our support for this level of independence may include withholding approval for non-independent directors, as well as votes in support of shareholder proposals calling for independence.

 

 

 

 

 

 

 

 

 

·       Require Key Board Committees to be Independent.
Key board committees are the Nominating, Audit, and Compensation Committees. Exceptions will be made, as above, in respect of local market conventions.

 

For

 

 

 

 

 

 

 

·       Require a Separation of Chair and CEO or Require a Lead Director (SP):
We will generally support management proposals to separate the Chair and CEO or establish a Lead Director.

 

Case-by-Case

 

 

 

 

 

 

 

·       Approve Directors’ Fees:

 

For

 

 

 

 

 

 

 

·       Approve Bonuses for Retiring Directors:

 

Case-by-Case

 

 

 

 

 

 

 

·       Elect Supervisory Board/Corporate Assembly:

 

For

 

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·       Elect/Establish Board Committee:

 

For

 

 

 

 

 

 

 

·       Adopt Shareholder Access/Majority Vote on Election of Directors (SP):

 

Case-by-Case

 

 

We believe that the election of directors by a majority of votes cast is the appropriate standard for companies to adopt and therefore generally will support those proposals that seek to adopt such a standard. Our support for such proposals will extend typically to situations where the relevant company has an existing resignation policy in place for directors that receive a majority of “withhold” votes. We believe that it is important for majority voting to be defined within the company’s charter and not simply within the company’s corporate governance policy.

 

 

 

 

 

 

 

 

 

Generally we will not support proposals that fail to provide for the exceptional use of a plurality standard in the case of contested elections. Further, we will not support proposals that seek to adopt a majority of votes outstanding (i.e., total votes eligible to be cast as opposed to actually cast) standard.

 

 

 

 

 

 

 

 

 

Management Compensation

 

 

 

 

 

 

 

 

 

·       Adopt/Amend Stock Option Plans:

 

Case-by-Case

 

 

 

 

 

 

 

·       Adopt/Amend Employee Stock Purchase Plans:

 

For

 

 

 

 

 

 

 

·       Approve/Amend Bonus Plans:

 

Case-by-Case

 

 

In the US, Bonus Plans are customarily presented for shareholder approval pursuant to Section 162(m) of the Omnibus Budget Reconciliation Act of 1992 (“OBRA”). OBRA stipulates that certain forms of compensation are not tax- deductible unless approved by shareholders and subject to performance criteria. Because OBRA does not prevent the payment of subject compensation, we generally vote “for” these proposals. Nevertheless, occasionally these proposals are presented in a bundled form seeking 162 (m) approval and approval of a stock option plan. In such cases, failure of the proposal prevents the awards from being granted. We will vote against these proposals where the grant portion of the

 

 

 

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proposal fails our guidelines for the evaluation of stock option plans.

 

 

 

 

 

 

 

 

 

·       Approve Remuneration Policy:

 

Case-by-Case

 

 

 

 

 

 

 

·       To approve compensation packages for named executive Officers:

 

Case-by-Case

 

 

 

 

 

 

 

·       To determine whether the compensation vote will occur every 1, 2 or 3 years:

 

1 Year

 

 

 

 

 

 

 

·       Exchange Underwater Options:

 

Case-by-Case

 

 

We may support value-neutral exchanges in which senior management is ineligible to participate.

 

 

 

 

 

 

 

 

 

·       Eliminate or Limit Severance Agreements (Golden Parachutes):

 

Case-by-Case

 

 

We will oppose excessively generous arrangements, but may support agreements structured to encourage management to negotiate in shareholders’ best economic interest.

 

 

 

 

 

 

 

 

 

·       To approve golden parachute arrangements in connection with certain corporate transactions:

 

Case-by-Case

 

 

 

 

 

 

 

·       Shareholder Approval of Future Severance Agreements Covering Senior Executives (SP):

 

Case-by-Case

 

 

We believe that severance arrangements require special scrutiny, and are generally supportive of proposals that call for shareholder ratification thereof. But, we are also mindful of the board’s need for flexibility in recruitment and retention and will therefore oppose limitations on board compensation policy where respect for industry practice and reasonable overall levels of compensation have been demonstrated.

 

 

 

 

 

 

 

 

 

·       Expense Future Stock Options (SP):

 

For

 

 

 

 

 

 

 

·       Shareholder Approval of All Stock Option Plans (SP):

 

For

 

 

·       Disclose All Executive Compensation (SP):

 

For

 

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Reporting of Results

 

 

 

 

 

 

 

 

 

·       Approve Financial Statements:

 

For

 

 

 

 

 

 

 

·       Set Dividends and Allocate Profits:

 

For

 

 

 

 

 

 

 

·       Limit Non-Audit Services Provided by Auditors (SP):
We follow the guidelines established by the Public Company Accounting Oversight Board regarding permissible levels of non-audit fees payable to auditors.

 

Case-by-Case

 

 

 

 

 

 

 

·       Ratify Selection of Auditors and Set Their Fees:

 

Case-by-Case

 

 

We will generally support management’s choice of auditors, unless the auditors have demonstrated failure to act in shareholders’ best economic interest.

 

 

 

 

 

 

 

 

 

·       Elect Statutory Auditors:

 

Case-by-Case

 

 

 

 

 

 

 

·       Shareholder Approval of Auditors (SP):

 

For

 

 

 

 

 

 

 

Shareholder Voting Rights

 

 

 

 

 

 

 

 

 

·       Adopt Cumulative Voting (SP):

 

Against

 

 

We are likely to support cumulative voting proposals at “controlled” companies (i.e., companies with a single majority shareholder), or at companies with two-tiered voting rights.

 

 

 

 

 

 

 

 

 

·       Shareholder Rights Plans

 

Case-by-Case

 

 

Also known as Poison Pills, these plans can enable boards of directors to negotiate higher takeover prices on behalf of shareholders. However, these plans also may be misused to entrench management. The following criteria are used to evaluate both management and shareholder proposals regarding shareholder rights plans.

 

 

 

 

 

 

 

 

 

· We generally support plans that include:

 

 

 

 

· Shareholder approval requirement

 

 

 

 

· Sunset provision

 

 

 

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· Permitted bid feature (i.e., bids that are made for all shares and demonstrate evidence of financing must be submitted to a shareholder vote).

 

 

 

 

 

 

 

 

 

Because boards generally have the authority to adopt shareholder rights plans without shareholder approval, we are equally vigilant in our assessment of requests for authorization of blank check preferred shares (see below).

 

 

 

 

 

 

 

 

 

·       Authorize Blank Check Preferred Stock:

 

Case-by-Case

 

 

We may support authorization requests that specifically proscribe the use of such shares for anti-takeover purposes.

 

 

 

 

 

 

 

 

 

·       Eliminate Right to Call a Special Meeting:

 

Against

 

 

 

 

 

 

 

·       Establish Right to Call a Special Meeting or Lower Ownership Threshold to Call a Special Meeting (SP):

 

Case-by-Case

 

 

 

 

 

 

 

·       Increase Supermajority Vote Requirement:

 

Against

 

 

We likely will support shareholder and management proposals to remove existing supermajority vote requirements.

 

 

 

 

 

 

 

 

 

·       Adopt Anti-Greenmail Provision:

 

For

 

 

 

 

 

 

 

·       Adopt Confidential Voting (SP):

 

Case-by-Case

 

 

We require such proposals to include a provision to suspend confidential voting during contested elections so that management is not subject to constraints that do not apply to dissidents.

 

 

 

 

 

 

 

 

 

·       Remove Right to Act by Written Consent:

 

Against

 

 

 

 

 

 

 

Capital Structure

 

 

 

 

 

 

 

 

 

·       Increase Authorized Common Stock:

 

Case-by-Case

 

 

We generally support requests for increases up to 100% of the shares currently authorized. Exceptions will be made when the company has clearly articulated a reasonable need for a greater increase. Conversely, at companies trading in less liquid markets, we may impose a lower threshold.

 

 

 

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·       Approve Merger or Acquisition:

 

Case-by-Case

 

 

 

 

 

 

 

·       Approve Technical Amendments to Charter:

 

Case-by-Case

 

 

 

 

 

 

 

·       Opt Out of State Takeover Statutes:

 

For

 

 

 

 

 

 

 

·       Authorize Share Repurchase:

 

For

 

 

 

 

 

 

 

·       Authorize Trade in Company Stock:

 

For

 

 

 

 

 

 

 

·       Approve Stock Splits:

 

Case-by-Case

 

 

We approve stock splits and reverse stock splits that preserve the level of authorized, but unissued shares.

 

 

 

 

 

 

 

 

 

·       Approve Recapitalization/Restructuring:

 

Case-by-Case

 

 

 

 

 

 

 

·       Issue Stock with or without Preemptive Rights:

 

Case-by-Case

 

 

 

 

 

 

 

·       Issue Debt Instruments:

 

Case-by-Case

 

 

 

 

 

 

 

Environmental and Social Issues

 

 

 

 

We expect portfolio companies to comply with applicable laws and regulations with regards to environmental and social standards. We evaluate shareholder proposals related to environmental and social issues on a case-by-case basis.

 

 

 

 

 

 

 

 

 

·       Disclose Political and PAC Gifts (SP):

 

Case-by-Case

 

 

 

 

 

 

 

·       Report on Sustainability (SP):

 

Case-by-Case

 

 

 

 

 

 

 

Miscellaneous

 

 

 

 

 

 

 

 

 

·       Approve Other Business:

 

Against

 

 

 

 

 

 

 

·       Approve Reincorporation:

 

Case-by-Case

 

 

 

 

 

 

 

·       Approve Third-Party Transactions:

 

Case-by-Case

 

 

 

 

 

 

 

Dated: March 8, 2012

 

 

 

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Wellington Management Company, LLP

Global Proxy Policy and Procedures

 

 

 

Introduction

 

Wellington Management Company, LLP (“Wellington Management”) has adopted and implemented policies and procedures that it believes are reasonably designed to ensure that proxies are voted in the best economic interests of its clients around the world.

 

 

 

 

 

Wellington Management’s Proxy Voting Guidelines (the “Guidelines”), which are incorporated by reference to these Global Proxy Policy and Procedures, set forth the sets of guidelines that Wellington Management uses in voting specific proposals presented by the boards of directors or shareholders of companies whose securities are held in client portfolios for which Wellington Management has voting discretion. While the Guidelines set forth general sets of guidelines for voting proxies, it should be noted that these are guidelines and not rigid rules. Many of the Guidelines are accompanied by explanatory language that describes criteria that may affect our vote decision. The criteria as described are to be read as part of the guideline, and votes cast according to the criteria will be considered within guidelines. In some circumstances, the merits of a particular proposal may cause us to enter a vote that differs from the Guidelines.

 

 

 

Statement of Policy

 

As a matter of policy, Wellington Management:

 

 

 

 

 

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Takes responsibility for voting client proxies only upon a client’s written request.

 

 

 

 

 

2

 

 

Votes all proxies in the best interests of its clients as shareholders, i.e., to maximize economic value.

 

 

 

 

 

3

 

 

Develops and maintains broad guidelines setting out positions on common proxy issues, but also considers each proposal in the context of the issuer, industry, and country or countries in which its business is conducted.

 

 

 

 

 

4

 

 

Evaluates all factors it deems relevant when considering a vote, and may determine in certain instances that it is in the best interest of one or more clients to refrain from voting a given proxy ballot.

 

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5

 

 

Identifies and resolves all material proxy-related conflicts of interest between the firm and its clients in the best interests of the client.

 

 

 

 

 

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Believes that sound corporate governance practices can enhance shareholder value and therefore encourages consideration of an issuer’s corporate governance as part of the investment process.

 

 

 

 

 

7

 

 

Believes that proxy voting is a valuable tool that can be used to promote sound corporate governance to the ultimate benefit of the client as shareholder.

 

 

 

 

 

8

 

 

Provides all clients, upon request, with copies of these Global Proxy Policy and Procedures, the Guidelines, and related reports, with such frequency as required to fulfill obligations under applicable law or as reasonably requested by clients.

 

 

 

 

 

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Reviews regularly the voting record to ensure that proxies are voted in accordance with these Global Proxy Policy and Procedures and the Guidelines; and ensures that procedures, documentation, and reports relating to the voting of proxies are promptly and properly prepared and disseminated.

 

 

 

Responsibility and Oversight

 

Wellington Management has a Corporate Governance Committee, established by action of the firm’s Executive Committee, that is responsible for the review and approval of the firm’s written Global Proxy Policy and Procedures and the Guidelines, and for providing advice and guidance on specific proxy votes for individual issuers. The firm’s Legal and Compliance Group monitors regulatory requirements with respect to proxy voting on a global basis and works with the Corporate Governance Committee to develop policies that implement those requirements. Day-to-day administration of the proxy voting process at Wellington Management is the responsibility of the Global Research Services Group. In addition, the Global Research Services Group acts as a resource for portfolio managers and research analysts on proxy matters, as needed.

 

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Statement of Procedures

 

Wellington Management has in place certain procedures for implementing its proxy voting policy.

 

 

 

General Proxy Voting

 

Authorization to Vote

 

 

Wellington Management will vote only those proxies for which its clients have affirmatively delegated proxy-voting authority.

 

 

 

 

 

Receipt of Proxy

 

 

Proxy materials from an issuer or its information agent are forwarded to registered owners of record, typically the client’s custodian bank. If a client requests that Wellington Management votes proxies on its behalf, the client must instruct its custodian bank to deliver all relevant voting material to Wellington Management or its voting agent. Wellington Management, or its voting agent, may receive this voting information by mail, fax, or other electronic means.

 

 

 

 

 

Reconciliation

 

 

To the extent reasonably practicable, each public security proxy received by electronic means is matched to the securities eligible to be voted and a reminder is sent to any custodian or trustee that has not forwarded the proxies as due. Although proxies received for private securities, as well as those received in non-electronic format, are voted as received, Wellington Management is not able to reconcile these proxies to holdings, nor does it notify custodians of non- receipt.

 

 

 

 

 

Research

 

 

In addition to proprietary investment research undertaken by Wellington Management investment professionals, the firm conducts proxy research internally, and uses the resources of a number of external sources to keep abreast of developments in corporate governance around the world and of current practices of specific companies.

 

 

 

 

 

Proxy Voting

 

 

Following the reconciliation process, each proxy is compared against the Guidelines, and handled as follows:

 

 

 

 

 

·       Generally, issues for which explicit proxy voting guidance is provided in the Guidelines (i.e., “For”, “Against”, “Abstain”) are reviewed by the Global Research Services Group and voted in accordance with the Guidelines.

 

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·       Issues identified as “case-by-case” in the Guidelines are further reviewed by the Global Research Services Group. In certain circumstances, further input is needed, so the issues are forwarded to the relevant research analyst and/or portfolio manager(s) for their input.

 

 

 

 

 

·       Absent a material conflict of interest, the portfolio manager has the authority to decide the final vote. Different portfolio managers holding the same securities may arrive at different voting conclusions for their clients’ proxies.

 

 

 

 

 

Material Conflict of Interest Identification and Resolution Processes
Wellington Management’s broadly diversified client base and functional lines of responsibility serve to minimize the number of, but not prevent, material conflicts of interest it faces in voting proxies. Annually, the Corporate Governance Committee sets standards for identifying material conflicts based on client, vendor, and lender relationships, and publishes those standards to individuals involved in the proxy voting process. In addition, the Corporate Governance Committee encourages all personnel to contact the Global Research Services Group about apparent conflicts of interest, even if the apparent conflict does not meet the published materiality criteria. Apparent conflicts are reviewed by designated members of the Corporate Governance Committee to determine if there is a conflict, and if so whether the conflict is material.

 

 

 

 

 

If a proxy is identified as presenting a material conflict of interest, the matter must be reviewed by designated members of the Corporate Governance Committee, who will resolve the conflict and direct the vote. In certain circumstances, the designated members may determine that the full Corporate Governance Committee should convene. Any Corporate Governance Committee member who is himself or herself subject to the identified conflict will not participate in the decision on whether and how to vote the proxy in question.

 

 

 

Other Considerations

 

In certain instances, Wellington Management may be unable to vote or may determine not to vote a proxy on behalf of one or more clients. While not exhaustive, the following list of considerations highlights some potential instances in which a proxy vote might not be entered.

 

 

 

 

 

Securities Lending

 

 

Wellington Management may be unable to vote proxies when the underlying securities have been lent out pursuant to a client’s securities lending program. In general, Wellington Management does not know when securities have been

 

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lent out and are therefore unavailable to be voted. Efforts to recall loaned securities are not always effective, but, in rare circumstances, Wellington Management may recommend that a client attempt to have its custodian recall the security to permit voting of related proxies.

 

 

 

 

 

 

 

 

Share Blocking and Re-registration

 

 

Certain countries require shareholders to stop trading securities for a period of time prior to and/or after a shareholder meeting in that country (i.e., share blocking). When reviewing proxies in share blocking countries, Wellington Management evaluates each proposal in light of the trading restrictions imposed and determines whether a proxy issue is sufficiently important that Wellington Management would consider the possibility of blocking shares. The portfolio manager retains the final authority to determine whether to block the shares in the client’s portfolio or to pass on voting the meeting.

 

 

 

 

 

In certain countries, re-registration of shares is required to enter a proxy vote. As with share blocking, re-registration can prevent Wellington Management from exercising its investment discretion to sell shares held in a client’s portfolio for a substantial period of time. The decision process in blocking countries as discussed above is also employed in instances where re-registration is necessary.

 

 

 

 

 

Lack of Adequate Information, Untimely Receipt of Proxy Materials, or Excessive Costs

 

 

Wellington Management may be unable to enter an informed vote in certain circumstances due to the lack of information provided in the proxy statement or by the issuer or other resolution sponsor, and may abstain from voting in those instances. Proxy materials not delivered in a timely fashion may prevent analysis or entry of a vote by voting deadlines. In addition, Wellington Management’s practice is to abstain from voting a proxy in circumstances where, in its judgment, the costs exceed the expected benefits to clients. Requirements for Powers of Attorney and consularization are examples of such circumstances.

 

 

 

Additional Information

 

Wellington Management maintains records of proxies voted pursuant to Section 204-2 of the Investment Advisers Act of 1940 (the “Advisers Act”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and other applicable laws.

 

 

 

 

 

Wellington Management’s Global Proxy Policy and Procedures may be amended from time to time by Wellington Management. Wellington Management provides clients with a copy of its Global Proxy Policy and Procedures, including

 

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the Guidelines, upon written request. In addition, Wellington Management will make specific client information relating to proxy voting available to a client upon reasonable written request.

 

 

 

 

 

Dated: July 8, 2009

 

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