Fortuna 485A

U N I T E DS T A T E S

Proxy Voting Guidelines

Benchmark Policy Recommendations

Effective for Meetings on or after February 1, 2024

Published early January, 2024

W W W . I S S G O V E R N A N C E . C O M


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UNITED STATES Proxy Voting Guidelines

TABLE OF CONTENTS

Coverage8

1.Board of Directors9

Voting on Director Nominees in Uncontested Elections9

Independence9

ISS Classification of Directors – U.S.10

Composition12

Attendance12

Overboarded Directors12

Gender Diversity12

Racial and/or Ethnic Diversity12

Responsiveness13

Accountability13

Poison Pills13

Unequal Voting Rights14

Classified Board Structure14

Removal of Shareholder Discretion on Classified Boards14

Problematic Governance Structure14

Unilateral Bylaw/Charter Amendments15

Restricting Binding Shareholder Proposals15

Director Performance Evaluation15

Management Proposals to Ratify Existing Charter or Bylaw Provisions16

Problematic Audit-Related Practices16

Problematic Compensation Practices16

Problematic Pledging of Company Stock17

Climate Accountability17

Governance Failures17

Voting on Director Nominees in Contested Elections18

Vote-No Campaigns18

Proxy Contests/Proxy Access18

Other Board-Related Proposals18

Adopt Anti-Hedging/Pledging/Speculative Investments Policy18

Board Refreshment18

Term/Tenure Limits19

Age Limits19

Board Size19

Classification/Declassification of the Board19

CEO Succession Planning19

Cumulative Voting19

Director and Officer Indemnification, Liability Protection, and Exculpation20

Establish/Amend Nominee Qualifications20

Establish Other Board Committee Proposals21

Filling Vacancies/Removal of Directors21

Independent Board Chair21

Majority of Independent Directors/Establishment of Independent Committees22

Majority Vote Standard for the Election of Directors22


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UNITED STATES Proxy Voting Guidelines

Proxy Access22

Require More Nominees than Open Seats22

Shareholder Engagement Policy (Shareholder Advisory Committee)23

2.Audit-Related24

Auditor Indemnification and Limitation of Liability24

Auditor Ratification24

Shareholder Proposals Limiting Non-Audit Services24

Shareholder Proposals on Audit Firm Rotation25

3.Shareholder Rights & Defenses26

Advance Notice Requirements for Shareholder Proposals/Nominations26

Amend Bylaws without Shareholder Consent26

Control Share Acquisition Provisions26

Control Share Cash-Out Provisions26

Disgorgement Provisions27

Fair Price Provisions27

Freeze-Out Provisions27

Greenmail27

Shareholder Litigation Rights27

Federal Forum Selection Provisions27

Exclusive Forum Provisions for State Law Matters28

Fee shifting28

Net Operating Loss (NOL) Protective Amendments29

Poison Pills (Shareholder Rights Plans)29

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy29

Management Proposals to Ratify a Poison Pill29

Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)30

Proxy Voting Disclosure, Confidentiality, and Tabulation30

Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions30

Reimbursing Proxy Solicitation Expenses31

Reincorporation Proposals31

Shareholder Ability to Act by Written Consent31

Shareholder Ability to Call Special Meetings32

Stakeholder Provisions32

State Antitakeover Statutes32

Supermajority Vote Requirements32

Virtual Shareholder Meetings33

4.Capital/Restructuring34

Capital34

Adjustments to Par Value of Common Stock34

Common Stock Authorization34

General Authorization Requests34

Specific Authorization Requests35

Dual Class Structure35

Issue Stock for Use with Rights Plan35


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UNITED STATES Proxy Voting Guidelines

Preemptive Rights35

Preferred Stock Authorization35

General Authorization Requests35

Recapitalization Plans37

Reverse Stock Splits37

Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.37

Share Repurchase Programs38

Share Repurchase Programs Shareholder Proposals38

Stock Distributions: Splits and Dividends38

Tracking Stock38

Restructuring38

Appraisal Rights38

Asset Purchases39

Asset Sales39

Bundled Proposals39

Conversion of Securities39

Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged

Buyouts/Wrap Plans39

Formation of Holding Company40

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)40

Joint Ventures41

Liquidations41

Mergers and Acquisitions41

Private Placements/Warrants/Convertible Debentures42

Reorganization/Restructuring Plan (Bankruptcy)43

Special Purpose Acquisition Corporations (SPACs)43

Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions44

Spin-offs44

Value Maximization Shareholder Proposals44

5.Compensation45

Executive Pay Evaluation45

Advisory Votes on Executive Compensation—Management Proposals (Say-on-Pay)45

Pay-for-Performance Evaluation46

Problematic Pay Practices47

Compensation Committee Communications and Responsiveness48

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")48

Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale48

Equity-Based and Other Incentive Plans49

Shareholder Value Transfer (SVT)50

Three-Year Value-Adjusted Burn Rate50

Egregious Factors50

Liberal Change in Control Definition50

Repricing Provisions51

Problematic Pay Practices or Significant Pay-for-Performance Disconnect51

Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m))51


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UNITED STATES Proxy Voting Guidelines

Specific Treatment of Certain Award Types in Equity Plan Evaluations52

Dividend Equivalent Rights52

Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts

(REITs)52

Other Compensation Plans52

401(k) Employee Benefit Plans52

Employee Stock Ownership Plans (ESOPs)53

Employee Stock Purchase Plans—Qualified Plans53

Employee Stock Purchase Plans—Non-Qualified Plans53

Option Exchange Programs/Repricing Options53

Stock Plans in Lieu of Cash54

Transfer Stock Option (TSO) Programs54

Director Compensation55

Shareholder Ratification of Director Pay Programs55

Equity Plans for Non-Employee Directors55

Non-Employee Director Retirement Plans56

Shareholder Proposals on Compensation56

Bonus Banking/Bonus Banking “Plus”56

Compensation Consultants—Disclosure of Board or Company’s Utilization56

Disclosure/Setting Levels or Types of Compensation for Executives and Directors56

Golden Coffins/Executive Death Benefits57

Hold Equity Past Retirement or for a Significant Period of Time57

Pay Disparity57

Pay for Performance/Performance-Based Awards57

Pay for Superior Performance58

Pre-Arranged Trading Plans (10b5-1 Plans)58

Prohibit Outside CEOs from Serving on Compensation Committees59

Recoupment of Incentive or Stock Compensation in Specified Circumstances59

Severance Agreements for Executives/Golden Parachutes59

Share Buyback Impact on Incentive Program Metrics59

Supplemental Executive Retirement Plans (SERPs)60

Tax Gross-Up Proposals60

Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of

Unvested Equity60

6.Routine/Miscellaneous61

Adjourn Meeting61

Amend Quorum Requirements61

Amend Minor Bylaws61

Change Company Name61

Change Date, Time, or Location of Annual Meeting61

Other Business62

7.Social and Environmental Issues63

Global Approach – E&S Shareholder Proposals63

Endorsement of Principles63

Animal Welfare63


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UNITED STATES Proxy Voting Guidelines

Animal Welfare Policies63

Animal Testing64

Animal Slaughter64

Consumer Issues64

Genetically Modified Ingredients64

Reports on Potentially Controversial Business/Financial Practices64

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation65

Product Safety and Toxic/Hazardous Materials65

Tobacco-Related Proposals66

Climate Change66

Say on Climate (SoC) Management Proposals66

Say on Climate (SoC) Shareholder Proposals67

Climate Change/Greenhouse Gas (GHG) Emissions67

Energy Efficiency68

Renewable Energy68

Diversity68

Board Diversity68

Equality of Opportunity69

Gender Identity, Sexual Orientation, and Domestic Partner Benefits69

Gender, Race/Ethnicity Pay Gap69

Racial Equity and/or Civil Rights Audit Guidelines69

Environment and Sustainability70

Facility and Workplace Safety70

General Environmental Proposals and Community Impact Assessments70

Hydraulic Fracturing70

Operations in Protected Areas71

Recycling71

Sustainability Reporting71

Water Issues71

General Corporate Issues72

Charitable Contributions72

Data Security, Privacy, and Internet Issues72

ESG Compensation-Related Proposals72

Human Rights, Human Capital Management, and International Operations72

Human Rights Proposals72

Mandatory Arbitration73

Operations in High-Risk Markets73

Outsourcing/Offshoring74

Sexual Harassment74

Weapons and Military Sales74

Political Activities74

Lobbying74

Political Contributions75

Political Expenditures and Lobbying Congruency75

Political Ties75


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UNITED STATES Proxy Voting Guidelines

8.Mutual Fund Proxies77

Election of Directors77

Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes77

Converting Closed-end Fund to Open-end Fund77

Proxy Contests77

Investment Advisory Agreements77

Approving New Classes or Series of Shares78

Preferred Stock Proposals78

1940 Act Policies78

Changing a Fundamental Restriction to a Nonfundamental Restriction78

Change Fundamental Investment Objective to Nonfundamental78

Name Change Proposals78

Change in Fund's Subclassification79

Business Development Companies—Authorization to Sell Shares of Common Stock at a Price

below Net Asset Value79

Disposition of Assets/Termination/Liquidation79

Changes to the Charter Document79

Changing the Domicile of a Fund80

Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval80

Distribution Agreements80

Master-Feeder Structure80

Mergers80

Shareholder Proposals for Mutual Funds80

Establish Director Ownership Requirement80

Reimburse Shareholder for Expenses Incurred81

Terminate the Investment Advisor81


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UNITED STATES Proxy Voting Guidelines

Coverage

The U.S. research team provides proxy analyses and voting recommendations for the common shareholder

meetings of U.S. - incorporated companies that are publicly-traded on U.S. exchanges, as well as certain OTC

companies, if they are held in our institutional investor clients' portfolios. Coverage generally includes corporate

actions for common equity holders, such as written consents and bankruptcies. ISS’ U.S. coverage includes

investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment

trusts), limited partnerships (“LPs”), master limited partnerships (“MLPs”), limited liability companies (“LLCs”), and

business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is

subject to change based on client need and industry trends.

Foreign-incorporated companies

In addition to U.S.- incorporated, U.S.- listed companies, ISS’ U.S. policies are applied to certain foreign-

incorporated company analyses. Like the SEC, ISS distinguishes two types of companies that list but are not

incorporated in the U.S.:

▪U.S. Domestic Issuers – which have a majority of outstanding shares held in the U.S. and meet other criteria, as

determined by the SEC, and are subject to the same disclosure and listing standards as U.S. incorporated

companies (e.g. they are required to file DEF14A proxy statements) – are generally covered under standard

U.S. policy guidelines.

▪Foreign Private Issuers (FPIs) – which are allowed to take exemptions from most disclosure requirements (e.g.,

they are allowed to file 6-K for their proxy materials) and U.S. listing standards – are generally covered under a

combination of policy guidelines:

▪FPI Guidelines (see the Americas Regional Proxy Voting Guidelines), may apply to companies incorporated

in governance havens, and apply certain minimum independence and disclosure standards in the

evaluation of key proxy ballot items, such as the election of directors; and/or

▪Guidelines for the market that is responsible for, or most relevant to, the item on the ballot.

U.S. incorporated companies listed only on non-U.S. exchanges are generally covered under the ISS guidelines for

the market on which they are traded.

An FPI is generally covered under ISS’ approach to FPIs outlined above, even if such FPI voluntarily files a proxy

statement and/or other filing normally required of a U.S. Domestic Issuer, so long as the company retains its FPI

status.

In all cases – including with respect to other companies with cross-market features that may lead to ballot items

related to multiple markets – items that are on the ballot solely due to the requirements of another market (listing,

incorporation, or national code) may be evaluated under the policy of the relevant market, regardless of the

“assigned” primary market coverage.


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UNITED STATES Proxy Voting Guidelines

1.Board of Directors

Voting on Director Nominees in Uncontested Elections

Four fundamental principles apply when determining votes on director nominees:

Independence: Boards should be sufficiently independent from management (and significant shareholders) to

ensure that they are able and motivated to effectively supervise management's performance for the benefit of all

shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of

shareholder capital, and in setting and monitoring executive compensation programs that support that strategy.

The chair of the board should ideally be an independent director, and all boards should have an independent

leadership position or a similar role in order to help provide appropriate counterbalance to executive

management, as well as having sufficiently independent committees that focus on key governance concerns such

as audit, compensation, and nomination of directors.

Composition: Companies should ensure that directors add value to the board through their specific skills and

expertise and by having sufficient time and commitment to serve effectively. Boards should be of a size

appropriate to accommodate diversity, expertise, and independence, while ensuring active and collaborative

participation by all members. Boards should be sufficiently diverse to ensure consideration of a wide range of

perspectives.

Responsiveness: Directors should respond to investor input, such as that expressed through significant opposition

to management proposals, significant support for shareholder proposals (whether binding or non-binding), and

tender offers where a majority of shares are tendered.

Accountability: Boards should be sufficiently accountable to shareholders, including through transparency of the

company's governance practices and regular board elections, by the provision of sufficient information for

shareholders to be able to assess directors and board composition, and through the ability of shareholders to

remove directors.

General Recommendation: Generally vote for director nominees, except under the following circumstances (with

new nominees1 considered on case-by-case basis):

Independence

Vote against2 or withhold from non-independent directors (Executive Directors and Non-Independent Non-

Executive Directors per ISS’ Classification of Directors) when:

▪Independent directors comprise 50 percent or less of the board;

▪The non-independent director serves on the audit, compensation, or nominating committee;

▪The company lacks an audit, compensation, or nominating committee so that the full board functions as that

committee; or

▪The company lacks a formal nominating committee, even if the board attests that the independent directors

fulfill the functions of such a committee.

1 A "new nominee" is a director who is being presented for election by shareholders for the first time. Recommendations on

new nominees who have served for less than one year are made on a case-by-case basis depending on the timing of their

appointment and the problematic governance issue in question.

2 In general, companies with a plurality vote standard use “Withhold” as the contrary vote option in director elections; companies

with a majority vote standard use “Against”. However, it will vary by company and the proxy must be checked to determine the

valid contrary vote option for the particular company.


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UNITED STATES Proxy Voting Guidelines

ISS Classification of Directors – U.S.

1.Executive Director

1.1.Current officer1 of the company or one of its affiliates2.

2.Non-Independent Non-Executive Director

Board Identification

2.1.Director identified as not independent by the board.

Controlling/Significant Shareholder

2.2.Beneficial owner of more than 50 percent of the company's voting power (this may be aggregated if

voting power is distributed among more than one member of a group).

Current Employment at Company or Related Company

2.3.Non-officer employee of the firm (including employee representatives).

2.4.Officer1, former officer, or general or limited partner of a joint venture or partnership with the

company.

Former Employment

2.5.Former CEO of the company. 3, 4

2.6.Former non-CEO officer1 of the company or an affiliate2 within the past five years.

2.7.Former officer1 of an acquired company within the past five years.4

2.8.Officer1 of a former parent or predecessor firm at the time the company was sold or split off within the

past five years.

2.9.Former interim officer if the service was longer than 18 months. If the service was between 12 and 18

months an assessment of the interim officer’s employment agreement will be made.5

Family Members

2.10.Immediate family member6 of a current or former officer1 of the company or its affiliates2 within

the last five years.

2.11.Immediate family member6 of a current employee of company or its affiliates2 where additional factors

raise concern (which may include, but are not limited to, the following: a director related to numerous

employees; the company or its affiliates employ relatives of numerous board members; or a non-

Section 16 officer in a key strategic role).

Professional, Transactional, and Charitable Relationships

2.12.Director who (or whose immediate family member6) currently provides professional services7 in excess

of $10,000 per year to: the company, an affiliate2, or an individual officer of the company or an affiliate;

or who is (or whose immediate family member6 is) a partner, employee, or controlling shareholder of

an organization which provides the services.

2.13.Director who (or whose immediate family member6) currently has any material transactional

relationship8 with the company or its affiliates2; or who is (or whose immediate family member6 is)

a partner in, or a controlling shareholder or an executive officer of, an organization which has the

material transactional relationship8 (excluding investments in the company through a private

placement).

2.14.Director who (or whose immediate family member6) is a trustee, director, or employee of a charitable

or non-profit organization that receives material grants or endowments8 from the company or its

affiliates2.

Other Relationships

2.15.Party to a voting agreement9 to vote in line with management on proposals being brought to

shareholder vote.

2.16.Has (or an immediate family member6 has) an interlocking relationship as defined by the SEC involving

members of the board of directors or its Compensation Committee.10

2.17.Founder11 of the company but not currently an employee.

2.18.Director with pay comparable to Named Executive Officers.

2.19.Any material12 relationship with the company.

3.Independent Director

3.1.No material12 connection to the company other than a board seat.


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UNITED STATES Proxy Voting Guidelines

Footnotes:

1.The definition of officer will generally follow that of a “Section 16 officer” (officers subject to Section 16 of the Securities and

Exchange Act of 1934) and includes the chief executive, operating, financial, legal, technology, and accounting officers of a

company (including the president, treasurer, secretary, controller, or any vice president in charge of a principal business unit,

division, or policy function). Current interim officers are included in this category. For private companies, the equivalent positions

are applicable. A non-employee director serving as an officer due to statutory requirements (e.g. corporate secretary) will generally

be classified as a Non-Independent Non-Executive Director under “Any material relationship with the company.” However, if the

company provides explicit disclosure that the director is not receiving additional compensation exceeding $10,000 per year for

serving in that capacity, then the director will be classified as an Independent Director.

2.“Affiliate” includes a subsidiary, sibling company, or parent company. ISS uses 50 percent control ownership by the parent

company as the standard for applying its affiliate designation. The manager/advisor of an externally managed issuer (EMI) is

considered an affiliate.

3.Includes any former CEO of the company prior to the company’s initial public offering (IPO).

4.When there is a former CEO of a special purpose acquisition company (SPAC) serving on the board of an acquired company, ISS will

generally classify such directors as independent unless determined otherwise taking into account the following factors: the

applicable listing standards determination of such director’s independence; any operating ties to the firm; and the existence of any

other conflicting relationships or related party transactions.

5.ISS will look at the terms of the interim officer’s employment contract to determine if it contains severance pay, long-term health

and pension benefits, or other such standard provisions typically contained in contracts of permanent, non-temporary CEOs. ISS

will also consider if a formal search process was under way for a full-time officer at the time.

6.“Immediate family member” follows the SEC’s definition of such and covers spouses, parents, children, step-parents, step- children,

siblings, in-laws, and any person (other than a tenant or employee) sharing the household of any director, nominee for director,

executive officer, or significant shareholder of the company.

7.Professional services can be characterized as advisory in nature, generally involve access to sensitive company information or to

strategic decision-making, and typically have a commission- or fee-based payment structure. Professional services generally include

but are not limited to the following: investment banking/financial advisory services, commercial banking (beyond deposit services),

investment services, insurance services, accounting/audit services, consulting services, marketing services, legal services, property

management services, realtor services, lobbying services, executive search services, and IT consulting services. The following would

generally be considered transactional relationships and not professional services: deposit services, IT tech support services,

educational services, and construction services. The case of participation in a banking syndicate by a non-lead bank should be

considered a transactional (and hence subject to the associated materiality test) rather than a professional relationship. “Of

Counsel” relationships are only considered immaterial if the individual does not receive any form of compensation (in excess of

$10,000 per year) from, or is a retired partner of, the firm providing the professional service. The case of a company providing a

professional service to one of its directors or to an entity with which one of its directors is affiliated, will be considered a

transactional rather than a professional relationship. Insurance services and marketing services are assumed to be professional

services unless the company explains why such services are not advisory.

8.A material transactional relationship, including grants to non-profit organizations, exists if the company makes annual payments to,

or receives annual payments from, another entity, exceeding the greater of: $200,000 or 5 percent of the recipient’s gross

revenues, for a company that follows NASDAQ listing standards; or the greater of $1,000,000 or 2 percent of the recipient’s gross

revenues, for a company that follows NYSE listing standards. For a company that follows neither of the preceding standards, ISS will

apply the NASDAQ-based materiality test. (The recipient is the party receiving the financial proceeds from the transaction).

9.Dissident directors who are parties to a voting agreement pursuant to a settlement or similar arrangement may be classified as

Independent Directors if an analysis of the following factors indicates that the voting agreement does not compromise their

alignment with all shareholders’ interests: the terms of the agreement; the duration of the standstill provision in the agreement;

the limitations and requirements of actions that are agreed upon; if the dissident director nominee(s) is subject to the standstill;

and if there any conflicting relationships or related party transactions.

10.Interlocks include: executive officers serving as directors on each other’s compensation or similar committees (or, in the absence of

such a committee, on the board); or executive officers sitting on each other’s boards and at least one serves on the other’s

compensation or similar committees (or, in the absence of such a committee, on the board).

11.The operating involvement of the founder with the company will be considered; if the founder was never employed by the

company, ISS may deem him or her an Independent Director.


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UNITED STATES Proxy Voting Guidelines

12.For purposes of ISS’s director independence classification, “material” will be defined as a standard of relationship (financial,

personal, or otherwise) that a reasonable person might conclude could potentially influence one’s objectivity in the boardroom in a

manner that would have a meaningful impact on an individual's ability to satisfy requisite fiduciary standards on behalf of

shareholders.

Composition

Attendance at Board and Committee Meetings: Generally vote against or withhold from directors (except

nominees who served only part of the fiscal year3) who attend less than 75 percent of the aggregate of their board

and committee meetings for the period for which they served, unless an acceptable reason for absences is

disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the

following:

▪Medical issues/illness;

▪Family emergencies; and

▪Missing only one meeting (when the total of all meetings is three or fewer).

In cases of chronic poor attendance without reasonable justification, in addition to voting against the director(s)

with poor attendance, generally vote against or withhold from appropriate members of the nominating/

governance committees or the full board.

If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of

the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold

from the director(s) in question.

Overboarded Directors: Generally vote against or withhold from individual directors who:

▪Sit on more than five public company boards; or

▪Are CEOs of public companies who sit on the boards of more than two public companies besides their own—

withhold only at their outside boards4.

Gender Diversity: Generally vote against or withhold from the chair of the nominating committee (or other

directors on a case-by-case basis) at companies where there are no women on the company's board. An exception

will be made if there was at least one woman on the board at the preceding annual meeting and the board makes

a firm commitment to return to a gender-diverse status within a year.

Racial and/or Ethnic Diversity: For companies in the Russell 3000 or S&P 1500 indices, generally vote against or

withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the board

has no apparent racially or ethnically diverse members5. An exception will be made if there was racial and/or

ethnic diversity on the board at the preceding annual meeting and the board makes a firm commitment to appoint

at least one racial and/or ethnic diverse member within a year.

3 Nominees who served for only part of the fiscal year are generally exempted from the attendance policy.

4 Although all of a CEO’s subsidiary boards with publicly-traded common stock will be counted as separate boards, ISS will not

recommend a withhold vote for the CEO of a parent company board or any of the controlled (>50 percent ownership)

subsidiaries of that parent but may do so at subsidiaries that are less than 50 percent controlled and boards outside the

parent/subsidiary relationships.

5 Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.


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UNITED STATES Proxy Voting Guidelines

Responsiveness

Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:

▪The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in

the previous year or failed to act on a management proposal seeking to ratify an existing charter/bylaw

provision that received opposition of a majority of the shares cast in the previous year. Factors that will be

considered are:

▪Disclosed outreach efforts by the board to shareholders in the wake of the vote;

▪Rationale provided in the proxy statement for the level of implementation;

▪The subject matter of the proposal;

▪The level of support for and opposition to the resolution in past meetings;

▪Actions taken by the board in response to the majority vote and its engagement with shareholders;

▪The continuation of the underlying issue as a voting item on the ballot (as either shareholder or

management proposals); and

▪Other factors as appropriate.

▪The board failed to act on takeover offers where the majority of shares are tendered; or

▪At the previous board election, any director received more than 50 percent withhold/against votes of the

shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and the Say on

Pay proposal if:

▪The company’s previous say-on-pay received the support of less than 70 percent of votes cast. Factors that

will be considered are:

▪The company's response, including:

▪Disclosure of engagement efforts with major institutional investors, including the frequency and

timing of engagements and the company participants (including whether independent directors

participated);

▪Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay

opposition; and

▪Disclosure of specific and meaningful actions taken to address shareholders' concerns;

▪Other recent compensation actions taken by the company;

▪Whether the issues raised are recurring or isolated;

▪The company's ownership structure; and

▪Whether the support level was less than 50 percent, which would warrant the highest degree of

responsiveness.

▪The board implements an advisory vote on executive compensation on a less frequent basis than the

frequency that received the plurality of votes cast.

Accountability

Problematic Takeover Defenses, Capital Structure, and Governance Structure

Poison Pills: Generally vote against or withhold from all nominees (except new nominees1, who should be

considered case- by-case) if:

▪The company has a poison pill with a deadhand or slowhand feature6;

6 If a short-term pill with a deadhand or slowhand feature is enacted but expires before the next shareholder vote, ISS will

generally still recommend withhold/against nominees at the next shareholder meeting following its adoption.


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UNITED STATES Proxy Voting Guidelines

▪The board makes a material adverse modification to an existing pill, including, but not limited to, extension,

renewal, or lowering the trigger, without shareholder approval; or

▪The company has a long-term poison pill (with a term of over one year) that was not approved by the public

shareholders7.

Vote case-by-case on nominees if the board adopts an initial short-term pill6 (with a term of one year or less) without

shareholder approval, taking into consideration:

▪ The disclosed rationale for the adoption;

▪ The trigger;

▪ The company's market capitalization (including absolute level and sudden changes);

▪ A commitment to put any renewal to a shareholder vote; and

▪ Other factors as relevant.

Unequal Voting Rights: Generally vote withhold or against directors individually, committee members, or the entire

board (except new nominees1, who should be considered case-by-case), if the company employs a common stock

structure with unequal voting rights8.

Exceptions to this policy will generally be limited to:

▪Newly-public companies9 with a sunset provision of no more than seven years from the date of going public;

▪Limited Partnerships and the Operating Partnership (OP) unit structure of REITs;

▪Situations where the super-voting shares represent less than 5% of total voting power and therefore considered

to be de minimis; or

▪The company provides sufficient protections for minority shareholders, such as allowing minority shareholders

a regular binding vote on whether the capital structure should be maintained.

Classified Board Structure: The board is classified, and a continuing director responsible for a problematic

governance issue at the board/committee level that would warrant a withhold/against vote recommendation is

not up for election. All appropriate nominees (except new) may be held accountable.

Removal of Shareholder Discretion on Classified Boards: The company has opted into, or failed to opt out of,

state laws requiring a classified board structure.

Problematic Governance Structure: For companies that hold or held their first annual meeting9 of public

shareholders after Feb. 1, 2015, generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees1, who should be considered case-by-case) if, prior to or in

connection with the company's public offering, the company or its board adopted the following bylaw or charter

provisions that are considered to be materially adverse to shareholder rights:

▪Supermajority vote requirements to amend the bylaws or charter;

▪A classified board structure; or

▪Other egregious provisions.

7 Approval prior to, or in connection, with a company’s becoming publicly-traded, or in connection with a de-SPAC transaction,

is insufficient.

8 This generally includes classes of common stock that have additional votes per share than other shares; classes of shares that

are not entitled to vote on all the same ballot items or nominees; or stock with time-phased voting rights (“loyalty shares”).

9 Includes companies that emerge from bankruptcy, SPAC transactions, spin-offs, direct listings, and those who complete a

traditional initial public offering.


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A provision which specifies that the problematic structure(s) will be sunset within seven years of the date of going

public will be considered a mitigating factor.

Unless the adverse provision is reversed or removed, vote case-by-case on director nominees in subsequent years.

Unilateral Bylaw/Charter Amendments: Generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees1, who should be considered case-by-case) if the board

amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes

shareholders' rights or that could adversely impact shareholders, considering the following factors:

▪The board's rationale for adopting the bylaw/charter amendment without shareholder ratification;

▪Disclosure by the company of any significant engagement with shareholders regarding the amendment;

▪The level of impairment of shareholders' rights caused by the board's unilateral amendment to the

bylaws/charter;

▪The board's track record with regard to unilateral board action on bylaw/charter amendments or other

entrenchment provisions;

▪The company's ownership structure;

▪The company's existing governance provisions;

▪The timing of the board's amendment to the bylaws/charter in connection with a significant business

development; and

▪Other factors, as deemed appropriate, that may be relevant to determine the impact of the amendment on

shareholders.

Unless the adverse amendment is reversed or submitted to a binding shareholder vote, in subsequent years vote

case-by-case on director nominees. Generally vote against (except new nominees1, who should be considered

case-by-case) if the directors:

▪Classified the board;

▪Adopted supermajority vote requirements to amend the bylaws or charter;

▪Eliminated shareholders' ability to amend bylaws;

▪Adopted a fee-shifting provision; or

▪Adopted another provision deemed egregious.

Restricting Binding Shareholder Proposals: Generally vote against or withhold from the members of the governance

committee if:

▪The company’s governing documents impose undue restrictions on shareholders’ ability to amend the bylaws.

Such restrictions include but are not limited to: outright prohibition on the submission of binding shareholder

proposals or share ownership requirements, subject matter restrictions, or time holding requirements in excess

of SEC Rule 14a-8. Vote against or withhold on an ongoing basis.

Submission of management proposals to approve or ratify requirements in excess of SEC Rule 14a-8 for the

submission of binding bylaw amendments will generally be viewed as an insufficient restoration of

shareholders' rights. Generally continue to vote against or withhold on an ongoing basis until shareholders are

provided with an unfettered ability to amend the bylaws or a proposal providing for such unfettered right is

submitted for shareholder approval.

Director Performance Evaluation: The board lacks mechanisms to promote accountability and oversight,

coupled with sustained poor performance relative to peers. Sustained poor performance is measured by one-,

three-, and five-year total shareholder returns in the bottom half of a company’s four-digit GICS industry group

(Russell 3000 companies only). Take into consideration the company’s operational metrics and other factors as

warranted. Problematic provisions include but are not limited to:

▪A classified board structure;

▪A supermajority vote requirement;


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▪Either a plurality vote standard in uncontested director elections, or a majority vote standard in contested

elections;

▪The inability of shareholders to call special meetings;

▪The inability of shareholders to act by written consent;

▪A multi-class capital structure; and/or

▪A non-shareholder-approved poison pill.

Management Proposals to Ratify Existing Charter or Bylaw Provisions: Vote against/withhold from individual

directors, members of the governance committee, or the full board, where boards ask shareholders to ratify

existing charter or bylaw provisions considering the following factors:

▪The presence of a shareholder proposal addressing the same issue on the same ballot;

▪The board's rationale for seeking ratification;

▪Disclosure of actions to be taken by the board should the ratification proposal fail;

▪Disclosure of shareholder engagement regarding the board’s ratification request;

▪The level of impairment to shareholders' rights caused by the existing provision;

▪The history of management and shareholder proposals on the provision at the company’s past meetings;

▪Whether the current provision was adopted in response to the shareholder proposal;

▪The company's ownership structure; and

▪Previous use of ratification proposals to exclude shareholder proposals.

Problematic Audit-Related Practices

Generally vote against or withhold from the members of the Audit Committee if:

▪The non-audit fees paid to the auditor are excessive;

▪The company receives an adverse opinion on the company’s financial statements from its auditor; or

▪There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification

agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal

recourse against the audit firm.

Vote case-by-case on members of the Audit Committee and potentially the full board if:

▪Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of

GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth,

chronological sequence, and duration, as well as the company’s efforts at remediation or corrective actions, in

determining whether withhold/against votes are warranted.

Problematic Compensation Practices

In the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot item or in egregious situations,

vote against or withhold from the members of the Compensation Committee and potentially the full board if:

▪There is an unmitigated misalignment between CEO pay and company performance (pay for performance);

▪The company maintains significant problematic pay practices; or

▪The board exhibits a significant level of poor communication and responsiveness to shareholders.

Generally vote against or withhold from the Compensation Committee chair, other committee members, or

potentially the full board if:

▪The company fails to include a Say on Pay ballot item when required under SEC provisions, or under the

company’s declared frequency of say on pay; or

▪The company fails to include a Frequency of Say on Pay ballot item when required under SEC provisions.

Generally vote against members of the board committee responsible for approving/setting non-employee director

compensation if there is a pattern (i.e. two or more years) of awarding excessive non-employee director

compensation without disclosing a compelling rationale or other mitigating factors.


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UNITED STATES Proxy Voting Guidelines

Problematic Pledging of Company Stock: Vote against the members of the committee that oversees risks related to

pledging, or the full board, where a significant level of pledged company stock by executives or directors raises

concerns. The following factors will be considered:

▪The presence of an anti-pledging policy, disclosed in the proxy statement, that prohibits future pledging

activity;

▪The magnitude of aggregate pledged shares in terms of total common shares outstanding, market value, and

trading volume;

▪Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time;

▪Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not

include pledged company stock; and

▪Any other relevant factors.

Climate Accountability

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain10,

generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a

case-by-case basis) in cases where ISS determines that the company is not taking the minimum steps needed to

understand, assess, and mitigate risks related to climate change to the company and the larger economy.

Minimum steps to understand and mitigate those risks are considered to be the following. Both minimum criteria

will be required to be in alignment with the policy:

▪Detailed disclosure of climate-related risks, such as according to the framework established by the Task Force

on Climate-related Financial Disclosures (TCFD), including:

▪Board governance measures;

▪Corporate strategy;

▪Risk management analyses; and

▪Metrics and targets.

▪Appropriate GHG emissions reduction targets.

At this time, “appropriate GHG emissions reductions targets” will be medium-term GHG reduction targets or Net

Zero-by-2050 GHG reduction targets for a company's operations (Scope 1) and electricity use (Scope 2). Targets

should cover the vast majority of the company’s direct emissions.

Governance Failures

Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or

the entire board, due to:

▪Material failures of governance, stewardship, risk oversight11, or fiduciary responsibilities at the company;

▪Failure to replace management as appropriate; or

▪Egregious actions related to a director’s service on other boards that raise substantial doubt about his or her

ability to effectively oversee management and serve the best interests of shareholders at any company.

10 Companies defined as “significant GHG emitters” will be those on the current Climate Action 100+ Focus Group list.

11 Examples of failure of risk oversight include but are not limited to: bribery; large or serial fines or sanctions from regulatory

bodies; demonstrably poor risk oversight of environmental and social issues, including climate change; significant adverse legal

judgments or settlement; or hedging of company stock.


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UNITED STATES Proxy Voting Guidelines

Voting on Director Nominees in Contested Elections

Vote-No Campaigns

General Recommendation: In cases where companies are targeted in connection with public “vote-no”

campaigns, evaluate director nominees under the existing governance policies for voting on director nominees in

uncontested elections. Take into consideration the arguments submitted by shareholders and other publicly

available information.

Proxy Contests/Proxy Access

General Recommendation: Vote case-by-case on the election of directors in contested elections, considering the

following factors:

▪Long-term financial performance of the company relative to its industry;

▪Management’s track record;

▪Background to the contested election;

▪Nominee qualifications and any compensatory arrangements;

▪Strategic plan of dissident slate and quality of the critique against management;

▪Likelihood that the proposed goals and objectives can be achieved (both slates); and

▪Stock ownership positions.

In the case of candidates nominated pursuant to proxy access, vote case-by-case considering any applicable factors

listed above or additional factors which may be relevant, including those that are specific to the company, to the

nominee(s) and/or to the nature of the election (such as whether there are more candidates than board seats).

Other Board-Related Proposals

Adopt Anti-Hedging/Pledging/Speculative Investments Policy

General Recommendation: Generally vote for proposals seeking a policy that prohibits named executive officers

from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock in a

margin account, or pledging stock as collateral for a loan. However, the company’s existing policies regarding

responsible use of company stock will be considered.

Board Refreshment

Board refreshment is best implemented through an ongoing program of individual director evaluations, conducted

annually, to ensure the evolving needs of the board are met and to bring in fresh perspectives, skills, and diversity as

needed.


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UNITED STATES Proxy Voting Guidelines

Term/Tenure Limits

General Recommendation: Vote case-by-case on management proposals regarding director term/tenure limits,

considering:

▪The rationale provided for adoption of the term/tenure limit;

▪The robustness of the company’s board evaluation process;

▪Whether the limit is of sufficient length to allow for a broad range of director tenures;

▪Whether the limit would disadvantage independent directors compared to non-independent directors; and

▪Whether the board will impose the limit evenly, and not have the ability to waive it in a discriminatory manner.

Vote case-by-case on shareholder proposals asking for the company to adopt director term/tenure limits,

considering:

▪The scope of the shareholder proposal; and

▪Evidence of problematic issues at the company combined with, or exacerbated by, a lack of board refreshment.

Age Limits

General Recommendation: Generally vote against management and shareholder proposals to limit the tenure of

independent directors through mandatory retirement ages. Vote for proposals to remove mandatory age limits.

Board Size

General Recommendation: Vote for proposals seeking to fix the board size or designate a range for the board size.

Vote against proposals that give management the ability to alter the size of the board outside of a specified range

without shareholder approval.

Classification/Declassification of the Board

General Recommendation: Vote against proposals to classify (stagger) the board.

Vote for proposals to repeal classified boards and to elect all directors annually.

CEO Succession Planning

General Recommendation: Generally vote for proposals seeking disclosure on a CEO succession planning policy,

considering, at a minimum, the following factors:

▪The reasonableness/scope of the request; and

▪The company’s existing disclosure on its current CEO succession planning process.

Cumulative Voting

General Recommendation: Generally vote against management proposals to eliminate cumulate voting, and for

shareholder proposals to restore or provide for cumulative voting, unless:


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▪The company has proxy access12, thereby allowing shareholders to nominate directors to the company’s

ballot; and

▪The company has adopted a majority vote standard, with a carve-out for plurality voting in situations where

there are more nominees than seats, and a director resignation policy to address failed elections.

Vote for proposals for cumulative voting at controlled companies (insider voting power > 50%).

Director and Officer Indemnification, Liability Protection, and Exculpation

General Recommendation: Vote case-by-case on proposals on director and officer indemnification, liability

protection, and exculpation13.

Consider the stated rationale for the proposed change. Also consider, among other factors, the extent to which the

proposal would:

▪Eliminate directors' and officers' liability for monetary damages for violating the duty of care.

▪Eliminate directors' and officers' liability for monetary damages for violating the duty of loyalty.

▪Expand coverage beyond just legal expenses to liability for acts that are more serious violations of fiduciary

obligation than mere carelessness; and.

▪Expand the scope of indemnification to provide for mandatory indemnification of company officials in

connection with acts that previously the company was permitted to provide indemnification for, at the

discretion of the company's board (i.e., "permissive indemnification"), but that previously the company was

not required to indemnify.

Vote for those proposals providing such expanded coverage in cases when a director’s or officer’s legal defense was

unsuccessful if both of the following apply:

▪If the individual was found to have acted in good faith and in a manner that the individual reasonably

believed was in the best interests of the company; and

If only the individual’s legal expenses would be covered.

Establish/Amend Nominee Qualifications

General Recommendation: Vote case-by-case on proposals that establish or amend director qualifications. Votes

should be based on the reasonableness of the criteria and the degree to which they may preclude dissident

nominees from joining the board.

Vote case-by-case on shareholder resolutions seeking a director nominee who possesses a particular subject

matter expertise, considering:

▪The company’s board committee structure, existing subject matter expertise, and board nomination

provisions relative to that of its peers;

12 A proxy access right that meets the recommended guidelines.

13 Indemnification: the condition of being secured against loss or damage.

Limited liability: a person's financial liability is limited to a fixed sum, or personal financial assets are not at risk if the individual

loses a lawsuit that results in financial award/damages to the plaintiff.

Exculpation: to eliminate or limit the personal liability of a director or officer to the corporation or its shareholders for

monetary damages for breach of fiduciary duty as a director or officer.


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▪The company’s existing board and management oversight mechanisms regarding the issue for which board

oversight is sought;

▪The company’s disclosure and performance relating to the issue for which board oversight is sought and any

significant related controversies; and

▪The scope and structure of the proposal.

Establish Other Board Committee Proposals

General Recommendation: Generally vote against shareholder proposals to establish a new board committee, as

such proposals seek a specific oversight mechanism/structure that potentially limits a company’s flexibility to

determine an appropriate oversight mechanism for itself. However, the following factors will be considered:

▪Existing oversight mechanisms (including current committee structure) regarding the issue for which board

oversight is sought;

▪Level of disclosure regarding the issue for which board oversight is sought;

▪Company performance related to the issue for which board oversight is sought;

▪Board committee structure compared to that of other companies in its industry sector; and

▪The scope and structure of the proposal.

Filling Vacancies/Removal of Directors

General Recommendation: Vote against proposals that provide that directors may be removed only for cause.

Vote for proposals to restore shareholders’ ability to remove directors with or without cause.

Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

Vote for proposals that permit shareholders to elect directors to fill board vacancies.

Independent Board Chair

General Recommendation: Generally vote for shareholder proposals requiring that the board chair position be

filled by an independent director, taking into consideration the following:

▪The scope and rationale of the proposal;

▪The company's current board leadership structure;

▪The company's governance structure and practices;

▪Company performance; and

▪Any other relevant factors that may be applicable.

The following factors will increase the likelihood of a “for” recommendation:

▪A majority non-independent board and/or the presence of non-independent directors on key board

committees;

▪A weak or poorly-defined lead independent director role that fails to serve as an appropriate counterbalance

to a combined CEO/chair role;

▪The presence of an executive or non-independent chair in addition to the CEO, a recent recombination of the

role of CEO and chair, and/or departure from a structure with an independent chair;

▪Evidence that the board has failed to oversee and address material risks facing the company;

▪A material governance failure, particularly if the board has failed to adequately respond to shareholder

concerns or if the board has materially diminished shareholder rights; or

▪Evidence that the board has failed to intervene when management’s interests are contrary to shareholders'

interests.


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UNITED STATES Proxy Voting Guidelines

Majority of Independent Directors/Establishment of Independent Committees

General Recommendation: Vote for shareholder proposals asking that a majority or more of directors be

independent unless the board composition already meets the proposed threshold by ISS’ definition of

Independent Director (See ISS' Classification of Directors.)

Vote for shareholder proposals asking that board audit, compensation, and/or nominating committees be

composed exclusively of independent directors unless they currently meet that standard.

Majority Vote Standard for the Election of Directors

General Recommendation: Generally vote for management proposals to adopt a majority of votes cast standard

for directors in uncontested elections. Vote against if no carve-out for a plurality vote standard in contested

elections is included.

Generally vote for precatory and binding shareholder resolutions requesting that the board change the company’s

bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does

not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve-

out for a plurality vote standard when there are more nominees than board seats.

Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation

policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.

Proxy Access

General Recommendation: Generally vote for management and shareholder proposals for proxy access with the

following provisions:

▪Ownership threshold: maximum requirement not more than three percent (3%) of the voting power;

▪Ownership duration: maximum requirement not longer than three (3) years of continuous ownership for each

member of the nominating group;

▪Aggregation: minimal or no limits on the number of shareholders permitted to form a nominating group; and

▪Cap: cap on nominees of generally twenty-five percent (25%) of the board.

Review for reasonableness any other restrictions on the right of proxy access.

Generally vote against proposals that are more restrictive than these guidelines.

Require More Nominees than Open Seats

General Recommendation: Vote against shareholder proposals that would require a company to nominate more

candidates than the number of open board seats.


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Shareholder Engagement Policy (Shareholder Advisory Committee)

General Recommendation: Generally vote for shareholder proposals requesting that the board establish an

internal mechanism/process, which may include a committee, in order to improve communications between

directors and shareholders, unless the company has the following features, as appropriate:

▪Established a communication structure that goes beyond the exchange requirements to facilitate the

exchange of information between shareholders and members of the board;

▪Effectively disclosed information with respect to this structure to its shareholders;

▪Company has not ignored majority-supported shareholder proposals, or a majority withhold vote on a director

nominee; and

▪The company has an independent chair or a lead director, according to ISS’ definition. This individual must be

made available for periodic consultation and direct communication with major shareholders.


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2.Audit-Related

Auditor Indemnification and Limitation of Liability

General Recommendation: Vote case-by-case on the issue of auditor indemnification and limitation of liability.

Factors to be assessed include, but are not limited to:

▪The terms of the auditor agreement—the degree to which these agreements impact shareholders' rights;

▪The motivation and rationale for establishing the agreements;

▪The quality of the company’s disclosure; and

▪The company’s historical practices in the audit area.

Vote against or withhold from members of an audit committee in situations where there is persuasive evidence

that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the

ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

Auditor Ratification

General Recommendation: Vote for proposals to ratify auditors unless any of the following apply:

▪An auditor has a financial interest in or association with the company, and is therefore not independent;

▪There is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor

indicative of the company’s financial position;

▪Poor accounting practices are identified that rise to a serious level of concern, such as fraud or misapplication

of GAAP; or

▪Fees for non-audit services (“Other” fees) are excessive.

Non-audit fees are excessive if:

▪Non-audit (“other”) fees > audit fees + audit-related fees + tax compliance/preparation fees

Tax compliance and preparation include the preparation of original and amended tax returns and refund claims,

and tax payment planning. All other services in the tax category, such as tax advice, planning, or consulting, should

be added to “Other” fees. If the breakout of tax fees cannot be determined, add all tax fees to “Other” fees.

In circumstances where "Other" fees include fees related to significant one-time capital structure events (such as

initial public offerings, bankruptcy emergence, and spin-offs) and the company makes public disclosure of the

amount and nature of those fees that are an exception to the standard "non-audit fee" category, then such fees

may be excluded from the non-audit fees considered in determining the ratio of non-audit to audit/audit-related

fees/tax compliance and preparation for purposes of determining whether non-audit fees are excessive.

Shareholder Proposals Limiting Non-Audit Services

General Recommendation: Vote case-by-case on shareholder proposals asking companies to prohibit or limit

their auditors from engaging in non-audit services.


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UNITED STATES Proxy Voting Guidelines

Shareholder Proposals on Audit Firm Rotation

General Recommendation: Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into

account:

▪The tenure of the audit firm;

▪The length of rotation specified in the proposal;

▪Any significant audit-related issues at the company;

▪The number of Audit Committee meetings held each year;

▪The number of financial experts serving on the committee; and

▪Whether the company has a periodic renewal process where the auditor is evaluated for both audit quality

and competitive price.


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UNITED STATES Proxy Voting Guidelines

3.Shareholder Rights & Defenses

Advance Notice Requirements for Shareholder Proposals/Nominations

General Recommendation: Vote case-by-case on advance notice proposals, giving support to those proposals

which allow shareholders to submit proposals/nominations as close to the meeting date as reasonably possible

and within the broadest window possible, recognizing the need to allow sufficient notice for company, regulatory,

and shareholder review.

To be reasonable, the company’s deadline for shareholder notice of a proposal/nominations must be no earlier

than 120 days prior to the anniversary of the previous year’s meeting and have a submittal window of no shorter

than 30 days from the beginning of the notice period (also known as a 90-120-day window). The submittal window

is the period under which shareholders must file their proposals/nominations prior to the deadline.

In general, support additional efforts by companies to ensure full disclosure in regard to a proponent’s economic

and voting position in the company so long as the informational requirements are reasonable and aimed at

providing shareholders with the necessary information to review such proposals.

Amend Bylaws without Shareholder Consent

General Recommendation: Vote against proposals giving the board exclusive authority to amend the bylaws.

Vote case-by-case on proposals giving the board the ability to amend the bylaws in addition to shareholders, taking

into account the following:

▪Any impediments to shareholders' ability to amend the bylaws (i.e. supermajority voting requirements);

▪The company's ownership structure and historical voting turnout;

▪Whether the board could amend bylaws adopted by shareholders; and

▪Whether shareholders would retain the ability to ratify any board-initiated amendments.

Control Share Acquisition Provisions

General Recommendation: Vote for proposals to opt out of control share acquisition statutes unless doing so

would enable the completion of a takeover that would be detrimental to shareholders.

Vote against proposals to amend the charter to include control share acquisition provisions.

Vote for proposals to restore voting rights to the control shares.

Control share acquisition statutes function by denying shares their voting rights when they contribute to

ownership in excess of certain thresholds. Voting rights for those shares exceeding ownership limits may only be

restored by approval of either a majority or supermajority of disinterested shares. Thus, control share acquisition

statutes effectively require a hostile bidder to put its offer to a shareholder vote or risk voting disenfranchisement

if the bidder continues buying up a large block of shares.

Control Share Cash-Out Provisions

General Recommendation: Vote for proposals to opt out of control share cash-out statutes.


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Control share cash-out statutes give dissident shareholders the right to "cash-out" of their position in a company at

the expense of the shareholder who has taken a control position. In other words, when an investor crosses a preset

threshold level, remaining shareholders are given the right to sell their shares to the acquirer, who must buy them

at the highest acquiring price.

Disgorgement Provisions

General Recommendation: Vote for proposals to opt out of state disgorgement provisions.

Disgorgement provisions require an acquirer or potential acquirer of more than a certain percentage of a company's

stock to disgorge, or pay back, to the company any profits realized from the sale of that company's stock purchased

24 months before achieving control status. All sales of company stock by the acquirer occurring within a certain

period of time (between 18 months and 24 months) prior to the investor's gaining control status are subject to these

recapture-of-profits provisions.

Fair Price Provisions

General Recommendation: Vote case-by-case on proposals to adopt fair price provisions (provisions that stipulate

that an acquirer must pay the same price to acquire all shares as it paid to acquire the control shares), evaluating

factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price

provision, and the mechanism for determining the fair price.

Generally vote against fair price provisions with shareholder vote requirements greater than a majority of

disinterested shares.

Freeze-Out Provisions

General Recommendation: Vote for proposals to opt out of state freeze-out provisions. Freeze-out provisions force

an investor who surpasses a certain ownership threshold in a company to wait a specified period of time before

gaining control of the company.

Greenmail

General Recommendation: Vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise

restrict a company’s ability to make greenmail payments.

Vote case-by-case on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

Greenmail payments are targeted share repurchases by management of company stock from individuals or groups

seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium over

the market value of its shares, the practice discriminates against all other shareholders.

Shareholder Litigation Rights

Federal Forum Selection Provisions

Federal forum selection provisions require that U.S. federal courts be the sole forum for shareholders to litigate

claims arising under federal securities law.


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UNITED STATES Proxy Voting Guidelines

General Recommendation: Generally vote for federal forum selection provisions in the charter or bylaws that specify

"the district courts of the United States" as the exclusive forum for federal securities law matters, in the absence of

serious concerns about corporate governance or board responsiveness to shareholders.

Vote against provisions that restrict the forum to a particular federal district court; unilateral adoption (without a

shareholder vote) of such a provision will generally be considered a one-time failure under the Unilateral Bylaw/

Charter Amendments policy.

Exclusive Forum Provisions for State Law Matters

Exclusive forum provisions in the charter or bylaws restrict shareholders’ ability to bring derivative lawsuits against

the company, for claims arising out of state corporate law, to the courts of a particular state (generally the state of

incorporation).

General Recommendation: Generally vote for charter or bylaw provisions that specify courts located within the

state of Delaware as the exclusive forum for corporate law matters for Delaware corporations, in the absence of

serious concerns about corporate governance or board responsiveness to shareholders.

For states other than Delaware, vote case-by-case on exclusive forum provisions, taking into consideration:

▪The company's stated rationale for adopting such a provision;

▪Disclosure of past harm from duplicative shareholder lawsuits in more than one forum;

▪The breadth of application of the charter or bylaw provision, including the types of lawsuits to which it would

apply and the definition of key terms; and

▪Governance features such as shareholders' ability to repeal the provision at a later date (including the vote

standard applied when shareholders attempt to amend the charter or bylaws) and their ability to hold

directors accountable through annual director elections and a majority vote standard in uncontested

elections.

Generally vote against provisions that specify a state other than the state of incorporation as the exclusive forum

for corporate law matters, or that specify a particular local court within the state; unilateral adoption of such a

provision will generally be considered a one-time failure under the Unilateral Bylaw/Charter Amendments policy.

Fee shifting

Fee-shifting provisions in the charter or bylaws require that a shareholder who sues a company unsuccessfully pay

all litigation expenses of the defendant corporation and its directors and officers.

General Recommendation: Generally vote against provisions that mandate fee-shifting whenever plaintiffs are

not completely successful on the merits (i.e., including cases where the plaintiffs are partially successful).

Unilateral adoption of a fee-shifting provision will generally be considered an ongoing failure under the Unilateral

Bylaw/Charter Amendments policy.


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UNITED STATES Proxy Voting Guidelines

Net Operating Loss (NOL) Protective Amendments

General Recommendation: Vote against proposals to adopt a protective amendment for the stated purpose of

protecting a company's net operating losses (NOL) if the effective term of the protective amendment would

exceed the shorter of three years and the exhaustion of the NOL.

Vote case-by-case, considering the following factors, for management proposals to adopt an NOL protective

amendment that would remain in effect for the shorter of three years (or less) and the exhaustion of the NOL:

▪The ownership threshold (NOL protective amendments generally prohibit stock ownership transfers that

would result in a new 5-percent holder or increase the stock ownership percentage of an existing 5-percent

holder);

▪The value of the NOLs;

▪Shareholder protection mechanisms (sunset provision or commitment to cause expiration of the protective

amendment upon exhaustion or expiration of the NOL);

▪The company's existing governance structure including: board independence, existing takeover defenses, track

record of responsiveness to shareholders, and any other problematic governance concerns; and

▪Any other factors that may be applicable.

Poison Pills (Shareholder Rights Plans)

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy

General Recommendation: Vote for shareholder proposals requesting that the company submit its poison pill to a

shareholder vote or redeem it unless the company has: (1) A shareholder-approved poison pill in place; or (2) The

company has adopted a policy concerning the adoption of a pill in the future specifying that the board will only

adopt a shareholder rights plan if either:

▪Shareholders have approved the adoption of the plan; or

▪The board, in its exercise of its fiduciary responsibilities, determines that it is in the best interest of

shareholders under the circumstances to adopt a pill without the delay in adoption that would result from

seeking stockholder approval (i.e., the “fiduciary out” provision). A poison pill adopted under this fiduciary out

will be put to a shareholder ratification vote within 12 months of adoption or expire. If the pill is not approved

by a majority of the votes cast on this issue, the plan will immediately terminate.

If the shareholder proposal calls for a time period of less than 12 months for shareholder ratification after

adoption, vote for the proposal, but add the caveat that a vote within 12 months would be considered sufficient

implementation.

Management Proposals to Ratify a Poison Pill

General Recommendation: Vote case-by-case on management proposals on poison pill ratification, focusing on

the features of the shareholder rights plan. Rights plans should contain the following attributes:

▪No lower than a 20 percent trigger, flip-in or flip-over;

▪A term of no more than three years;

▪No deadhand, slowhand, no-hand, or similar feature that limits the ability of a future board to redeem the pill;

and

▪Shareholder redemption feature (qualifying offer clause); if the board refuses to redeem the pill 90 days after

a qualifying offer is announced, 10 percent of the shares may call a special meeting or seek a written consent

to vote on rescinding the pill.


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In addition, the rationale for adopting the pill should be thoroughly explained by the company. In examining the

request for the pill, take into consideration the company’s existing governance structure, including: board

independence, existing takeover defenses, and any problematic governance concerns.

Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)

General Recommendation: Vote against proposals to adopt a poison pill for the stated purpose of protecting a

company's net operating losses (NOL) if the term of the pill would exceed the shorter of three years and the

exhaustion of the NOL.

Vote case-by-case on management proposals for poison pill ratification, considering the following factors, if the

term of the pill would be the shorter of three years (or less) and the exhaustion of the NOL:

▪The ownership threshold to transfer (NOL pills generally have a trigger slightly below 5 percent);

▪The value of the NOLs;

▪Shareholder protection mechanisms (sunset provision, or commitment to cause expiration of the pill upon

exhaustion or expiration of NOLs);

▪The company's existing governance structure, including: board independence, existing takeover defenses,

track record of responsiveness to shareholders, and any other problematic governance concerns; and

▪Any other factors that may be applicable.

Proxy Voting Disclosure, Confidentiality, and Tabulation

General Recommendation: Vote case-by-case on proposals regarding proxy voting mechanics, taking into

consideration whether implementation of the proposal is likely to enhance or protect shareholder rights. Specific

issues covered under the policy include, but are not limited to, confidential voting of individual proxies and

ballots, confidentiality of running vote tallies, and the treatment of abstentions and/or broker non-votes in the

company's vote-counting methodology.

While a variety of factors may be considered in each analysis, the guiding principles are: transparency, consistency,

and fairness in the proxy voting process. The factors considered, as applicable to the proposal, may include:

▪The scope and structure of the proposal;

▪The company's stated confidential voting policy (or other relevant policies) and whether it ensures a "level

playing field" by providing shareholder proponents with equal access to vote information prior to the annual

meeting;

▪The company's vote standard for management and shareholder proposals and whether it ensures consistency

and fairness in the proxy voting process and maintains the integrity of vote results;

▪Whether the company's disclosure regarding its vote counting method and other relevant voting policies with

respect to management and shareholder proposals are consistent and clear;

▪Any recent controversies or concerns related to the company's proxy voting mechanics;

▪Any unintended consequences resulting from implementation of the proposal; and

▪Any other factors that may be relevant.

Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions

General Recommendation: Generally vote against management proposals to ratify provisions of the company’s

existing charter or bylaws, unless these governance provisions align with best practice.


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UNITED STATES Proxy Voting Guidelines

In addition, voting against/withhold from individual directors, members of the governance committee, or the full

board may be warranted, considering:

▪The presence of a shareholder proposal addressing the same issue on the same ballot;

▪The board's rationale for seeking ratification;

▪Disclosure of actions to be taken by the board should the ratification proposal fail;

▪Disclosure of shareholder engagement regarding the board’s ratification request;

▪The level of impairment to shareholders' rights caused by the existing provision;

▪The history of management and shareholder proposals on the provision at the company’s past meetings;

▪Whether the current provision was adopted in response to the shareholder proposal;

▪The company's ownership structure; and

▪Previous use of ratification proposals to exclude shareholder proposals.

Reimbursing Proxy Solicitation Expenses

General Recommendation: Vote case-by-case on proposals to reimburse proxy solicitation expenses.

When voting in conjunction with support of a dissident slate, vote for the reimbursement of all appropriate proxy

solicitation expenses associated with the election.

Generally vote for shareholder proposals calling for the reimbursement of reasonable costs incurred in connection

with nominating one or more candidates in a contested election where the following apply:

▪The election of fewer than 50 percent of the directors to be elected is contested in the election;

▪One or more of the dissident’s candidates is elected;

▪Shareholders are not permitted to cumulate their votes for directors; and

▪The election occurred, and the expenses were incurred, after the adoption of this bylaw.

Reincorporation Proposals

General Recommendation: Management or shareholder proposals to change a company's state of incorporation

should be evaluated case-by-case, giving consideration to both financial and corporate governance concerns

including the following:

▪Reasons for reincorporation;

▪Comparison of company's governance practices and provisions prior to and following the reincorporation; and

▪Comparison of corporation laws of original state and destination state.

Vote for reincorporation when the economic factors outweigh any neutral or negative governance changes.

Shareholder Ability to Act by Written Consent

General Recommendation: Generally vote against management and shareholder proposals to restrict or prohibit

shareholders' ability to act by written consent.

Generally vote for management and shareholder proposals that provide shareholders with the ability to act by

written consent, taking into account the following factors:

▪Shareholders' current right to act by written consent;

▪The consent threshold;

▪The inclusion of exclusionary or prohibitive language;


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▪Investor ownership structure; and

▪Shareholder support of, and management's response to, previous shareholder proposals.

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the

following governance and antitakeover provisions:

▪An unfettered14 right for shareholders to call special meetings at a 10 percent threshold;

▪A majority vote standard in uncontested director elections;

▪No non-shareholder-approved pill; and

▪An annually elected board.

Shareholder Ability to Call Special Meetings

General Recommendation: Vote against management or shareholder proposals to restrict or prohibit

shareholders’ ability to call special meetings.

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special

meetings taking into account the following factors:

▪Shareholders’ current right to call special meetings;

▪Minimum ownership threshold necessary to call special meetings (10 percent preferred);

▪The inclusion of exclusionary or prohibitive language;

▪Investor ownership structure; and

▪Shareholder support of, and management’s response to, previous shareholder proposals.

Stakeholder Provisions

General Recommendation: Vote against proposals that ask the board to consider non-shareholder constituencies

or other non-financial effects when evaluating a merger or business combination.

State Antitakeover Statutes

General Recommendation: Vote case-by-case on proposals to opt in or out of state takeover statutes (including

fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions,

and anti-greenmail provisions).

Supermajority Vote Requirements

General Recommendation: Vote against proposals to require a supermajority shareholder vote.

Vote for management or shareholder proposals to reduce supermajority vote requirements. However, for companies

with shareholder(s) who have significant ownership levels, vote case-by-case, taking into account:

▪Ownership structure;

▪Quorum requirements; and

▪Vote requirements.

14 "Unfettered" means no restrictions on agenda items, no restrictions on the number of shareholders who can group together

to reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after

the last annual meeting and no greater than 90 prior to the next annual meeting.


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UNITED STATES Proxy Voting Guidelines

Virtual Shareholder Meetings

General Recommendation: Generally vote for management proposals allowing for the convening of shareholder

meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to

disclose the circumstances under which virtual-only15 meetings would be held, and to allow for comparable rights

and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Vote case-by-case on shareholder proposals concerning virtual-only meetings, considering:

▪Scope and rationale of the proposal; and

▪Concerns identified with the company’s prior meeting practices.

15 Virtual-only shareholder meeting” refers to a meeting of shareholders that is held exclusively using technology without a

corresponding in-person meeting.


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UNITED STATES Proxy Voting Guidelines

4.Capital/Restructuring

Capital

Adjustments to Par Value of Common Stock

General Recommendation: Vote for management proposals to reduce the par value of common stock unless the

action is being taken to facilitate an anti-takeover device or some other negative corporate governance action.

Vote for management proposals to eliminate par value.

Common Stock Authorization

General Authorization Requests

General Recommendation: Vote case-by-case on proposals to increase the number of authorized shares of

common stock that are to be used for general corporate purposes:

▪If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to 50% of current authorized share;

▪If share usage is 50% to 100% of the current authorized, vote for an increase of up to 100% of current

authorized shares;

▪If share usage is greater than current authorized shares, vote for an increase of up to the current share usage; or

▪In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company’s prior or

ongoing use of authorized shares is problematic, including, but not limited to:

▪The proposal seeks to increase the number of authorized shares of the class of common stock that

has superior voting rights to other share classes;

▪On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

▪The company has a non-shareholder approved poison pill (including an NOL pill); or

▪The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

▪In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

▪The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

▪A government body has in the past year required the company to increase its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.


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Specific Authorization Requests

General Recommendation: Generally vote for proposals to increase the number of authorized common shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in

the proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

▪twice the amount needed to support the transactions on the ballot, and

▪the allowable increase as calculated for general issuances above.

Dual Class Structure

General Recommendation: Generally vote against proposals to create a new class of common stock unless:

▪The company discloses a compelling rationale for the dual-class capital structure, such as:

▪The company's auditor has concluded that there is substantial doubt about the company's ability to continue

as a going concern; or

▪The new class of shares will be transitory;

▪The new class is intended for financing purposes with minimal or no dilution to current shareholders in both

the short term and long term; and

▪The new class is not designed to preserve or increase the voting power of an insider or significant shareholder.

Issue Stock for Use with Rights Plan

General Recommendation: Vote against proposals that increase authorized common stock for the explicit

purpose of implementing a non-shareholder-approved shareholder rights plan (poison pill).

Preemptive Rights

General Recommendation: Vote case-by-case on shareholder proposals that seek preemptive rights, taking into

consideration:

▪The size of the company;

▪The shareholder base; and

▪The liquidity of the stock.

Preferred Stock Authorization

General Authorization Requests

General Recommendation: Vote case-by-case on proposals to increase the number of authorized shares of

preferred stock that are to be used for general corporate purposes:

▪If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to 50% of current authorized shares.

▪If share usage is 50% to 100% of the current authorized, vote for an increase of up to 100% of current

authorized shares.

▪If share usage is greater than current authorized shares, vote for an increase of up to the current share usage.


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▪In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization; or

▪If no preferred shares are currently issued and outstanding, vote against the request, unless the company

discloses a specific use for the shares.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company’s prior or

ongoing use of authorized shares is problematic, including, but not limited to:

▪If the shares requested are blank check preferred shares that can be used for antitakeover purposes;16

▪The company seeks to increase a class of non-convertible preferred shares entitled to more than one vote per

share on matters that do not solely affect the rights of preferred stockholders "supervoting shares");

▪The company seeks to increase a class of convertible preferred shares entitled to a number of votes greater

than the number of common shares into which they are convertible ("supervoting shares") on matters that do

not solely affect the rights of preferred stockholders;

▪The stated intent of the increase in the general authorization is to allow the company to increase an existing

designated class of supervoting preferred shares;

▪On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

▪The company has a non-shareholder approved poison pill (including an NOL pill); and

▪The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

▪In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

▪The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

▪A government body has in the past year required the company to increase its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.

Specific Authorization Requests

General Recommendation: Generally vote for proposals to increase the number of authorized preferred shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in

the proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

▪twice the amount needed to support the transactions on the ballot, and

▪the allowable increase as calculated for general issuances above.

16 To be acceptable, appropriate disclosure would be needed that the shares are “declawed”: i.e., representation by the board

that it will not, without prior stockholder approval, issue or use the preferred stock for any defensive or anti-takeover purpose or

for the purpose of implementing any stockholder rights plan.


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UNITED STATES Proxy Voting Guidelines

Recapitalization Plans

General Recommendation: Vote case-by-case on recapitalizations (reclassifications of securities), taking into

account the following:

▪More simplified capital structure;

▪Enhanced liquidity;

▪Fairness of conversion terms;

▪Impact on voting power and dividends;

▪Reasons for the reclassification;

▪Conflicts of interest; and

▪Other alternatives considered.

Reverse Stock Splits

General Recommendation: Vote for management proposals to implement a reverse stock split if:

▪The number of authorized shares will be proportionately reduced; or

▪The effective increase in authorized shares is equal to or less than the allowable increase calculated in

accordance with ISS' Common Stock Authorization policy.

Vote case-by-case on proposals that do not meet either of the above conditions, taking into consideration the

following factors:

▪Stock exchange notification to the company of a potential delisting;

▪Disclosure of substantial doubt about the company's ability to continue as a going concern without additional

financing;

▪The company's rationale; or

▪Other factors as applicable.

Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.

General Recommendation: For U.S. domestic issuers incorporated outside the U.S. and listed solely on a U.S.

exchange, generally vote for resolutions to authorize the issuance of common shares up to 20 percent of currently

issued common share capital, where not tied to a specific transaction or financing proposal.

For pre-revenue or other early-stage companies that are heavily reliant on periodic equity financing, generally

vote for resolutions to authorize the issuance of common shares up to 50 percent of currently issued common

share capital. The burden of proof will be on the company to establish that it has a need for the higher limit.

Renewal of such mandates should be sought at each year’s annual meeting.

Vote case-by-case on share issuances for a specific transaction or financing proposal.


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UNITED STATES Proxy Voting Guidelines

Share Repurchase Programs

General Recommendation: For U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers

that are traded solely on U.S. exchanges, vote for management proposals to institute open-market share

repurchase plans in which all shareholders may participate on equal terms, or to grant the board authority to

conduct open- market repurchases, in the absence of company-specific concerns regarding:

▪Greenmail;

▪The use of buybacks to inappropriately manipulate incentive compensation metrics;

▪Threats to the company's long-term viability; or

▪Other company-specific factors as warranted.

Vote case-by-case on proposals to repurchase shares directly from specified shareholders, balancing the stated

rationale against the possibility for the repurchase authority to be misused, such as to repurchase shares from

insiders at a premium to market price.

Share Repurchase Programs Shareholder Proposals

General Recommendation: Generally vote against shareholder proposals prohibiting executives from selling

shares of company stock during periods in which the company has announced that it may or will be repurchasing

shares of its stock. Vote for the proposal when there is a pattern of abuse by executives exercising options or

selling shares during periods of share buybacks.

Stock Distributions: Splits and Dividends

General Recommendation: Generally vote for management proposals to increase the common share

authorization for stock split or stock dividend, provided that the effective increase in authorized shares is equal to

or is less than the allowable increase calculated in accordance with ISS' Common Stock Authorization policy.

Tracking Stock

General Recommendation: Vote case-by-case on the creation of tracking stock, weighing the strategic value of

the transaction against such factors as:

▪Adverse governance changes;

▪Excessive increases in authorized capital stock;

▪Unfair method of distribution;

▪Diminution of voting rights;

▪Adverse conversion features;

▪Negative impact on stock option plans; and

▪Alternatives such as spin-off.

Restructuring

Appraisal Rights

General Recommendation: Vote for proposals to restore or provide shareholders with rights of appraisal.


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Asset Purchases

General Recommendation: Vote case-by-case on asset purchase proposals, considering the following factors:

▪Purchase price;

▪Fairness opinion;

▪Financial and strategic benefits;

▪How the deal was negotiated;

▪Conflicts of interest;

▪Other alternatives for the business; and

▪Non-completion risk.

Asset Sales

General Recommendation: Vote case-by-case on asset sales, considering the following factors:

▪Impact on the balance sheet/working capital;

▪Potential elimination of diseconomies;

▪Anticipated financial and operating benefits;

▪Anticipated use of funds;

▪Value received for the asset;

▪Fairness opinion;

▪How the deal was negotiated; and

▪Conflicts of interest.

Bundled Proposals

General Recommendation: Vote case-by-case on bundled or “conditional” proxy proposals. In the case of items

that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when

the joint effect of the conditioned items is not in shareholders’ best interests, vote against the proposals. If the

combined effect is positive, support such proposals.

Conversion of Securities

General Recommendation: Vote case-by-case on proposals regarding conversion of securities. When evaluating

these proposals, the investor should review the dilution to existing shareholders, the conversion price relative to

market value, financial issues, control issues, termination penalties, and conflicts of interest.

Vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to

file for bankruptcy if the transaction is not approved.

Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse

Leveraged Buyouts/Wrap Plans

General Recommendation: Vote case-by-case on proposals to increase common and/or preferred shares and to

issue shares as part of a debt restructuring plan, after evaluating:

▪Dilution to existing shareholders' positions;

▪Terms of the offer - discount/premium in purchase price to investor, including any fairness opinion;

termination penalties; exit strategy;


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▪Financial issues - company's financial situation; degree of need for capital; use of proceeds; effect of the

financing on the company's cost of capital;

▪Management's efforts to pursue other alternatives;

▪Control issues - change in management; change in control, guaranteed board and committee seats; standstill

provisions; voting agreements; veto power over certain corporate actions; and

▪Conflict of interest - arm's length transaction, managerial incentives.

Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not

approved.

Formation of Holding Company

General Recommendation: Vote case-by-case on proposals regarding the formation of a holding company, taking

into consideration the following:

▪The reasons for the change;

▪Any financial or tax benefits;

▪Regulatory benefits;

▪Increases in capital structure; and

▪Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend for the transaction, vote against the formation of a holding

company if the transaction would include either of the following:

▪Increases in common or preferred stock in excess of the allowable maximum (see discussion under “Capital”);

▪Adverse changes in shareholder rights.

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)

General Recommendation: Vote case-by-case on going private transactions, taking into account the following:

▪Offer price/premium;

▪Fairness opinion;

▪How the deal was negotiated;

▪Conflicts of interest;

▪Other alternatives/offers considered; and

▪Non-completion risk.

Vote case-by-case on going dark transactions, determining whether the transaction enhances shareholder value by

taking into consideration:

▪Whether the company has attained benefits from being publicly-traded (examination of trading volume,

liquidity, and market research of the stock); and

▪Balanced interests of continuing vs. cashed-out shareholders, taking into account the following:

▪Are all shareholders able to participate in the transaction?

▪Will there be a liquid market for remaining shareholders following the transaction?

▪Does the company have strong corporate governance?

▪Will insiders reap the gains of control following the proposed transaction? and

▪Does the state of incorporation have laws requiring continued reporting that may benefit shareholders?


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UNITED STATES Proxy Voting Guidelines

Joint Ventures

General Recommendation: Vote case-by-case on proposals to form joint ventures, taking into account the

following:

▪Percentage of assets/business contributed;

▪Percentage ownership;

▪Financial and strategic benefits;

▪Governance structure;

▪Conflicts of interest;

▪Other alternatives; and

▪Non-completion risk.

Liquidations

General Recommendation: Vote case-by-case on liquidations, taking into account the following:

▪Management’s efforts to pursue other alternatives;

▪Appraisal value of assets; and

▪The compensation plan for executives managing the liquidation.

Vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.

Mergers and Acquisitions

General Recommendation: Vote case-by-case on mergers and acquisitions. Review and evaluate the merits and

drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

▪Valuation - Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While

the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is

placed on the offer premium, market reaction, and strategic rationale.

▪Market reaction - How has the market responded to the proposed deal? A negative market reaction should

cause closer scrutiny of a deal.

▪Strategic rationale - Does the deal make sense strategically? From where is the value derived? Cost and

revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management

should also have a favorable track record of successful integration of historical acquisitions.

▪Negotiations and process - Were the terms of the transaction negotiated at arm's-length? Was the process fair

and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation "wins"

can also signify the deal makers' competency. The comprehensiveness of the sales process (e.g., full auction,

partial auction, no auction) can also affect shareholder value.

▪Conflicts of interest - Are insiders benefiting from the transaction disproportionately and inappropriately as

compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the

company may be more likely to vote to approve a merger than if they did not hold these interests. Consider

whether these interests may have influenced these directors and officers to support or recommend the

merger. The CIC figure presented in the "ISS Transaction Summary" section of this report is an aggregate

figure that can in certain cases be a misleading indicator of the true value transfer from shareholders to

insiders. Where such figure appears to be excessive, analyze the underlying assumptions to determine

whether a potential conflict exists.

▪Governance - Will the combined company have a better or worse governance profile than the current

governance profiles of the respective parties to the transaction? If the governance profile is to change for the

worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration

in governance.


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Private Placements/Warrants/Convertible Debentures

General Recommendation: Vote case-by-case on proposals regarding private placements, warrants, and

convertible debentures taking into consideration:

▪Dilution to existing shareholders' position: The amount and timing of shareholder ownership dilution should

be weighed against the needs and proposed shareholder benefits of the capital infusion. Although newly

issued common stock, absent preemptive rights, is typically dilutive to existing shareholders, share price

appreciation is often the necessary event to trigger the exercise of "out of the money" warrants and

convertible debt. In these instances from a value standpoint, the negative impact of dilution is mitigated by

the increase in the company's stock price that must occur to trigger the dilutive event.

▪Terms of the offer (discount/premium in purchase price to investor, including any fairness opinion, conversion

features, termination penalties, exit strategy):

▪The terms of the offer should be weighed against the alternatives of the company and in light of

company's financial condition. Ideally, the conversion price for convertible debt and the exercise price for

warrants should be at a premium to the then prevailing stock price at the time of private placement.

▪When evaluating the magnitude of a private placement discount or premium, consider factors that

influence the discount or premium, such as, liquidity, due diligence costs, control and monitoring costs,

capital scarcity, information asymmetry, and anticipation of future performance.

▪Financial issues:

▪The company's financial condition;

▪Degree of need for capital;

▪Use of proceeds;

▪Effect of the financing on the company's cost of capital;

▪Current and proposed cash burn rate; and

▪Going concern viability and the state of the capital and credit markets.

▪Management's efforts to pursue alternatives and whether the company engaged in a process to evaluate

alternatives: A fair, unconstrained process helps to ensure the best price for shareholders. Financing

alternatives can include joint ventures, partnership, merger, or sale of part or all of the company.

▪Control issues:

▪Change in management;

▪Change in control;

▪Guaranteed board and committee seats;

▪Standstill provisions;

▪Voting agreements;

▪Veto power over certain corporate actions; and

▪Minority versus majority ownership and corresponding minority discount or majority control premium.

▪Conflicts of interest:

▪Conflicts of interest should be viewed from the perspective of the company and the investor; and

▪Were the terms of the transaction negotiated at arm's length? Are managerial incentives aligned with

shareholder interests?

▪Market reaction:


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▪The market's response to the proposed deal. A negative market reaction is a cause for concern. Market

reaction may be addressed by analyzing the one-day impact on the unaffected stock price.

Vote for the private placement, or for the issuance of warrants and/or convertible debentures in a private

placement, if it is expected that the company will file for bankruptcy if the transaction is not approved.

Reorganization/Restructuring Plan (Bankruptcy)

General Recommendation: Vote case-by-case on proposals to common shareholders on bankruptcy plans of

reorganization, considering the following factors including, but not limited to:

▪Estimated value and financial prospects of the reorganized company;

▪Percentage ownership of current shareholders in the reorganized company;

▪Whether shareholders are adequately represented in the reorganization process (particularly through the

existence of an Official Equity Committee);

▪The cause(s) of the bankruptcy filing, and the extent to which the plan of reorganization addresses the

cause(s);

▪Existence of a superior alternative to the plan of reorganization; and

▪Governance of the reorganized company.

Special Purpose Acquisition Corporations (SPACs)

General Recommendation: Vote case-by-case on SPAC mergers and acquisitions taking into account the

following:

▪Valuation - Is the value being paid by the SPAC reasonable? SPACs generally lack an independent fairness

opinion and the financials on the target may be limited. Compare the conversion price with the intrinsic value

of the target company provided in the fairness opinion. Also, evaluate the proportionate value of the

combined entity attributable to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally,

a private company discount may be applied to the target if it is a private entity.

▪Market reaction - How has the market responded to the proposed deal? A negative market reaction may be a

cause for concern. Market reaction may be addressed by analyzing the one-day impact on the unaffected

stock price.

▪Deal timing - A main driver for most transactions is that the SPAC charter typically requires the deal to be

complete within 18 to 24 months, or the SPAC is to be liquidated. Evaluate the valuation, market reaction, and

potential conflicts of interest for deals that are announced close to the liquidation date.

▪Negotiations and process - What was the process undertaken to identify potential target companies within

specified industry or location specified in charter? Consider the background of the sponsors.

▪Conflicts of interest - How are sponsors benefiting from the transaction compared to IPO shareholders?

Potential conflicts could arise if a fairness opinion is issued by the insiders to qualify the deal rather than a

third party or if management is encouraged to pay a higher price for the target because of an 80 percent rule

(the charter requires that the fair market value of the target is at least equal to 80 percent of net assets of the

SPAC). Also, there may be sense of urgency by the management team of the SPAC to close the deal since its

charter typically requires a transaction to be completed within the 18-24-month timeframe.

▪Voting agreements - Are the sponsors entering into enter into any voting agreements/tender offers with

shareholders who are likely to vote against the proposed merger or exercise conversion rights?

▪Governance - What is the impact of having the SPAC CEO or founder on key committees following the

proposed merger?


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Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions

General Recommendation: Vote case-by-case on SPAC extension proposals taking into account the length of the

requested extension, the status of any pending transaction(s) or progression of the acquisition process, any

added incentive for non-redeeming shareholders, and any prior extension requests.

▪Length of request: Typically, extension requests range from two to six months, depending on the progression

of the SPAC's acquisition process.

▪Pending transaction(s) or progression of the acquisition process: Sometimes an initial business combination

was already put to a shareholder vote, but, for varying reasons, the transaction could not be consummated by

the termination date and the SPAC is requesting an extension. Other times, the SPAC has entered into a

definitive transaction agreement, but needs additional time to consummate or hold the shareholder meeting.

▪Added incentive for non-redeeming shareholders: Sometimes the SPAC sponsor (or other insiders) will

contribute, typically as a loan to the company, additional funds that will be added to the redemption value of

each public share as long as such shares are not redeemed in connection with the extension request. The

purpose of the "equity kicker" is to incentivize shareholders to hold their shares through the end of the

requested extension or until the time the transaction is put to a shareholder vote, rather than electing

redemption at the extension proposal meeting.

▪Prior extension requests: Some SPACs request additional time beyond the extension period sought in prior

extension requests.

Spin-offs

General Recommendation: Vote case-by-case on spin-offs, considering:

▪Tax and regulatory advantages;

▪Planned use of the sale proceeds;

▪Valuation of spinoff;

▪Fairness opinion;

▪Benefits to the parent company;

▪Conflicts of interest;

▪Managerial incentives;

▪Corporate governance changes; and

▪Changes in the capital structure.

Value Maximization Shareholder Proposals

General Recommendation: Vote case-by-case on shareholder proposals seeking to maximize shareholder value by:

▪Hiring a financial advisor to explore strategic alternatives;

▪Selling the company; or

▪Liquidating the company and distributing the proceeds to shareholders.

These proposals should be evaluated based on the following factors:

▪Prolonged poor performance with no turnaround in sight;

▪Signs of entrenched board and management (such as the adoption of takeover defenses);

▪Strategic plan in place for improving value;

▪Likelihood of receiving reasonable value in a sale or dissolution; and

▪The company actively exploring its strategic options, including retaining a financial advisor.


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5.Compensation

Executive Pay Evaluation

Underlying all evaluations are five global principles that most investors expect corporations to adhere to in

designing and administering executive and director compensation programs:

1.Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This

principle encompasses overall executive pay practices, which must be designed to attract, retain, and

appropriately motivate the key employees who drive shareholder value creation over the long term. It will take

into consideration, among other factors, the link between pay and performance; the mix between fixed and

variable pay; performance goals; and equity-based plan costs;

2.Avoid arrangements that risk “pay for failure”: This principle addresses the appropriateness of long or indefinite

contracts, excessive severance packages, and guaranteed compensation;

3.Maintain an independent and effective compensation committee: This principle promotes oversight of

executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for

compensation decision-making (e.g., including access to independent expertise and advice when needed);

4.Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the

importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices

fully and fairly; and

5.Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in

ensuring that compensation to outside directors is reasonable and does not compromise their independence

and ability to make appropriate judgments in overseeing managers’ pay and performance. At the market level,

it may incorporate a variety of generally accepted best practices.

Advisory Votes on Executive Compensation—Management Proposals (Say-on-Pay)

General Recommendation: Vote case-by-case on ballot items related to executive pay and practices, as well as

certain aspects of outside director compensation.

Vote against Advisory Votes on Executive Compensation (Say-on-Pay or “SOP”) if:

▪There is an unmitigated misalignment between CEO pay and company performance (pay for performance);

▪The company maintains significant problematic pay practices; or

▪The board exhibits a significant level of poor communication and responsiveness to shareholders.

Vote against or withhold from the members of the Compensation Committee and potentially the full board if:

▪There is no SOP on the ballot, and an against vote on an SOP would otherwise be warranted due to pay-for-

performance misalignment, problematic pay practices, or the lack of adequate responsiveness on

compensation issues raised previously, or a combination thereof;

▪The board fails to respond adequately to a previous SOP proposal that received less than 70 percent support

of votes cast;

▪The company has recently practiced or approved problematic pay practices, such as option repricing or option

backdating; or

▪The situation is egregious.


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Primary Evaluation Factors for Executive Pay

Pay-for-Performance Evaluation

ISS annually conducts a pay-for-performance analysis to identify strong or satisfactory alignment between pay and

performance over a sustained period. With respect to companies in the S&P1500, Russell 3000, or Russell 3000E

Indices17, this analysis considers the following:

1.Peer Group18 Alignment:

▪The degree of alignment between the company's annualized TSR rank and the CEO's annualized total pay rank

within a peer group, each measured over a three-year period.

▪The rankings of CEO total pay and company financial performance within a peer group, each measured over a

three-year period.

▪The multiple of the CEO's total pay relative to the peer group median in the most recent fiscal year.

2.Absolute Alignment19 – the absolute alignment between the trend in CEO pay and company TSR over the prior

five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in annualized TSR

during the period.

If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the

case of companies outside the Russell indices, a misalignment between pay and performance is otherwise

suggested, our analysis may include any of the following qualitative factors, as relevant to an evaluation of how

various pay elements may work to encourage or to undermine long-term value creation and alignment with

shareholder interests:

▪The ratio of performance- to time-based incentive awards;

▪The overall ratio of performance-based compensation to fixed or discretionary pay;

▪The rigor of performance goals;

▪The complexity and risks around pay program design;

▪The transparency and clarity of disclosure;

▪The company's peer group benchmarking practices;

▪Financial/operational results, both absolute and relative to peers;

▪Special circumstances related to, for example, a new CEO in the prior FY or anomalous equity grant practices

(e.g., bi-annual awards);

▪Realizable pay20 compared to grant pay; and

▪Any other factors deemed relevant.

17 The Russell 3000E Index includes approximately 4,000 of the largest U.S. equity securities.

18 The revised peer group is generally comprised of 14-24 companies that are selected using market cap, revenue (or assets for

certain financial firms), GICS industry group, and company's selected peers' GICS industry group, with size constraints, via a

process designed to select peers that are comparable to the subject company in terms of revenue/assets and industry, and also

within a market-cap bucket that is reflective of the company's market cap. For Oil, Gas & Consumable Fuels companies, market

cap is the only size determinant.

19 Only Russell 3000 Index companies are subject to the Absolute Alignment analysis.

20 ISS research reports include realizable pay for S&P1500 companies.


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Problematic Pay Practices

Problematic pay elements are generally evaluated case-by-case considering the context of a company's overall pay

program and demonstrated pay-for-performance philosophy. The focus is on executive compensation practices that

contravene the global pay principles, including:

▪Problematic practices related to non-performance-based compensation elements;

▪Incentives that may motivate excessive risk-taking or present a windfall risk; and

▪Pay decisions that circumvent pay-for-performance, such as options backdating or waiving performance

requirements.

The list of examples below highlights certain problematic practices that carry significant weight in this overall

consideration and may result in adverse vote recommendations:

▪Repricing or replacing of underwater stock options/SARs without prior shareholder approval (including cash

buyouts and voluntary surrender of underwater options);

▪Extraordinary perquisites or tax gross-ups;

▪New or materially amended agreements that provide for:

▪Excessive termination or CIC severance payments (generally exceeding 3 times base salary and

average/target/most recent bonus);

▪CIC severance payments without involuntary job loss or substantial diminution of duties ("single" or

"modified single" triggers) or in connection with a problematic Good Reason definition;

▪CIC excise tax gross-up entitlements (including "modified" gross-ups); and/or

▪Multi-year guaranteed awards that are not at risk due to rigorous performance conditions;

▪Liberal CIC definition combined with any single-trigger CIC benefits;

▪Insufficient executive compensation disclosure by externally-managed issuers (EMIs) such that a reasonable

assessment of pay programs and practices applicable to the EMI's executives is not possible;

▪Severance payments made when the termination is not clearly disclosed as involuntary (for example, a

termination without cause or resignation for good reason); and/or

▪Any other provision or practice deemed to be egregious and present a significant risk to investors.

The above examples are not an exhaustive list. Please refer to ISS' U.S. Compensation Policies FAQ document for

additional detail on specific pay practices that have been identified as problematic and may lead to negative vote

recommendations.

Options Backdating

The following factors should be examined case-by-case to allow for distinctions to be made between “sloppy” plan

administration versus deliberate action or fraud:

▪Reason and motive for the options backdating issue, such as inadvertent vs. deliberate grant date changes;

▪Duration of options backdating;

▪Size of restatement due to options backdating;

▪Corrective actions taken by the board or compensation committee, such as canceling or re-pricing backdated

options, the recouping of option gains on backdated grants; and

▪Adoption of a grant policy that prohibits backdating and creates a fixed grant schedule or window period for

equity grants in the future.


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Compensation Committee Communications and Responsiveness

Consider the following factors case-by-case when evaluating ballot items related to executive pay on the board’s

responsiveness to investor input and engagement on compensation issues:

▪Failure to respond to majority-supported shareholder proposals on executive pay topics; or

▪Failure to adequately respond to the company's previous say-on-pay proposal that received the support of less

than 70 percent of votes cast, taking into account:

▪Disclosure of engagement efforts with major institutional investors, including the frequency and timing of

engagements and the company participants (including whether independent directors participated);

▪Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay

opposition;

▪Disclosure of specific and meaningful actions taken to address shareholders' concerns;

▪Other recent compensation actions taken by the company;

▪Whether the issues raised are recurring or isolated;

▪The company's ownership structure; and

▪Whether the support level was less than 50 percent, which would warrant the highest degree of

responsiveness.

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")

General Recommendation: Vote for annual advisory votes on compensation, which provide the most consistent

and clear communication channel for shareholder concerns about companies' executive pay programs.

Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale

General Recommendation: Vote case-by-case on say on Golden Parachute proposals, including consideration of

existing change-in-control arrangements maintained with named executive officers but also considering new or

extended arrangements.

Features that may result in an “against” recommendation include one or more of the following, depending on the

number, magnitude, and/or timing of issue(s):

▪Single- or modified-single-trigger cash severance;

▪Single-trigger acceleration of unvested equity awards;

▪Full acceleration of equity awards granted shortly before the change in control;

▪Acceleration of performance awards above the target level of performance without compelling rationale;

▪Excessive cash severance (generally >3x base salary and bonus);

▪Excise tax gross-ups triggered and payable;

▪Excessive golden parachute payments (on an absolute basis or as a percentage of transaction equity value); or

▪Recent amendments that incorporate any problematic features (such as those above) or recent actions (such

as extraordinary equity grants) that may make packages so attractive as to influence merger agreements that

may not be in the best interests of shareholders; or

▪The company's assertion that a proposed transaction is conditioned on shareholder approval of the golden

parachute advisory vote.

Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis.

However, the presence of multiple legacy problematic features will also be closely scrutinized.


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In cases where the golden parachute vote is incorporated into a company's advisory vote on compensation

(management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which

may give higher weight to that component of the overall evaluation.

Equity-Based and Other Incentive Plans

Please refer to ISS' U.S. Equity Compensation Plans FAQ document for additional details on the Equity Plan

Scorecard policy.

General Recommendation: Vote case-by-case on certain equity-based compensation plans21 depending on a

combination of certain plan features and equity grant practices, where positive factors may counterbalance

negative factors, and vice versa, as evaluated using an "Equity Plan Scorecard" (EPSC) approach with three pillars:

▪Plan Cost: The total estimated cost of the company’s equity plans relative to industry/market cap peers,

measured by the company's estimated Shareholder Value Transfer (SVT) in relation to peers and considering

both:

▪SVT based on new shares requested plus shares remaining for future grants, plus outstanding

unvested/unexercised grants; and

▪SVT based only on new shares requested plus shares remaining for future grants.

▪Plan Features:

▪Quality of disclosure around vesting upon a change in control (CIC);

▪Discretionary vesting authority;

▪Liberal share recycling on various award types;

▪Lack of minimum vesting period for grants made under the plan; and

▪Dividends payable prior to award vesting.

▪Grant Practices:

▪The company’s three-year burn rate relative to its industry/market cap peers;

▪Vesting requirements in CEO's recent equity grants (3-year look-back);

▪The estimated duration of the plan (based on the sum of shares remaining available and the new shares

requested, divided by the average annual shares granted in the prior three years);

▪The proportion of the CEO's most recent equity grants/awards subject to performance conditions;

▪Whether the company maintains a sufficient claw-back policy; and

▪Whether the company maintains sufficient post-exercise/vesting share-holding requirements.

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall,

in shareholders' interests, or if any of the following egregious factors ("overriding factors") apply:

▪Awards may vest in connection with a liberal change-of-control definition;

▪The plan would permit repricing or cash buyout of underwater options without shareholder approval (either

by expressly permitting it – for NYSE and Nasdaq listed companies – or by not prohibiting it when the company

has a history of repricing – for non-listed companies);

▪The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under

certain circumstances;

▪The plan is excessively dilutive to shareholders' holdings;

▪The plan contains an evergreen (automatic share replenishment) feature; or

21 Proposals evaluated under the EPSC policy generally include those to approve or amend (1) stock option plans for employees

and/or employees and directors, (2) restricted stock plans for employees and/or employees and directors, and (3) omnibus

stock incentive plans for employees and/or employees and directors; amended plans will be further evaluated case-by-case.


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▪Any other plan features are determined to have a significant negative impact on shareholder interests.

Further Information on certain EPSC Factors:

Shareholder Value Transfer (SVT)

The cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which is measured using a binomial

option pricing model that assesses the amount of shareholders’ equity flowing out of the company to employees

and directors. SVT is expressed as both a dollar amount and as a percentage of market value, and includes the new

shares proposed, shares available under existing plans, and shares granted but unexercised (using two measures,

in the case of plans subject to the Equity Plan Scorecard evaluation, as noted above). All award types are valued.

For omnibus plans, unless limitations are placed on the most expensive types of awards (for example, full-value

awards), the assumption is made that all awards to be granted will be the most expensive types.

For proposals that are not subject to the Equity Plan Scorecard evaluation, Shareholder Value Transfer is

reasonable if it falls below a company-specific benchmark. The benchmark is determined as follows: The top

quartile performers in each industry group (using the Global Industry Classification Standard: GICS) are identified.

Benchmark SVT levels for each industry are established based on these top performers’ historic SVT. Regression

analyses are run on each industry group to identify the variables most strongly correlated to SVT. The benchmark

industry SVT level is then adjusted upwards or downwards for the specific company by plugging the company-

specific performance measures, size, and cash compensation into the industry cap equations to arrive at the

company’s benchmark.22

Three-Year Value-Adjusted Burn Rate

A "Value-Adjusted Burn Rate" is used for stock plan evaluations. Value-Adjusted Burn Rate benchmarks are

calculated as the greater of: (1) an industry- specific threshold based on three-year burn rates within the

company's GICS group segmented by S&P 500, Russell 3000 index (less the S&P 500) and non-Russell 3000 index;

and (2) a de minimis threshold established separately for each of the S&P 500, the Russell 3000 index less the S&P

500, and the non-Russell 3000 index. Year-over-year burn-rate benchmark changes will be limited to a

predetermined range above or below the prior year's burn-rate benchmark.

The Value-Adjusted Burn Rate is calculated as follows:

Value-Adjusted Burn Rate = ((# of options * option’s dollar value using a Black-Scholes model) + (# of full-value

awards * stock price)) / (Weighted average common shares * stock price).

Egregious Factors

Liberal Change in Control Definition

Generally vote against equity plans if the plan has a liberal definition of change in control and the equity awards

could vest upon such liberal definition of change in control, even though an actual change in control may not

occur. Examples of such a definition include, but are not limited to, announcement or commencement of a tender

22 For plans evaluated under the Equity Plan Scorecard policy, the company's SVT benchmark is considered along with other

factors.


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offer, provisions for acceleration upon a “potential” takeover, shareholder approval of a merger or other

transactions, or similar language.

Repricing Provisions

Vote against plans that expressly permit the repricing or exchange of underwater stock options/stock appreciate

rights (SARs) without prior shareholder approval. "Repricing" typically includes the ability to do any of the

following:

▪Amend the terms of outstanding options or SARs to reduce the exercise price of such outstanding options or

SARs;

▪Cancel outstanding options or SARs in exchange for options or SARs with an exercise price that is less than the

exercise price of the original options or SARs;

▪Cancel underwater options in exchange for stock awards; or

▪Provide cash buyouts of underwater options.

While the above cover most types of repricing, ISS may view other provisions as akin to repricing depending on the

facts and circumstances.

Also, vote against or withhold from members of the Compensation Committee who approved repricing (as defined

above or otherwise determined by ISS), without prior shareholder approval, even if such repricings are allowed in

their equity plan.

Vote against plans that do not expressly prohibit repricing or cash buyout of underwater options without

shareholder approval if the company has a history of repricing/buyouts without shareholder approval, and the

applicable listing standards would not preclude them from doing so.

Problematic Pay Practices or Significant Pay-for-Performance Disconnect

If the equity plan on the ballot is a vehicle for problematic pay practices, vote against the plan.

ISS may recommend a vote against the equity plan if the plan is determined to be a vehicle for pay-for-

performance misalignment. Considerations in voting against the equity plan may include, but are not limited to:

▪Severity of the pay-for-performance misalignment;

▪Whether problematic equity grant practices are driving the misalignment; and/or

▪Whether equity plan awards have been heavily concentrated to the CEO and/or the other NEOs.

Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m))

General Recommendation: Vote case-by-case on amendments to cash and equity incentive plans.

Generally vote for proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

▪Addresses administrative features only; or

▪Seeks approval for Section 162(m) purposes only, and the plan administering committee consists entirely of

independent directors, per ISS’ Classification of Directors. Note that if the company is presenting the plan to

shareholders for the first time for any reason (including after the company’s initial public offering), or if the

proposal is bundled with other material plan amendments, then the recommendation will be case-by-case (see

below).


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Vote against proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

▪Seeks approval for Section 162(m) purposes only, and the plan administering committee does not consist

entirely of independent directors, per ISS’ Classification of Directors.

Vote case-by-case on all other proposals to amend cash incentive plans. This includes plans presented to

shareholders for the first time after the company's IPO and/or proposals that bundle material amendment(s) other

than those for Section 162(m) purposes.

Vote case-by-case on all other proposals to amend equity incentive plans, considering the following:

▪If the proposal requests additional shares and/or the amendments include a term extension or addition of full

value awards as an award type, the recommendation will be based on the Equity Plan Scorecard evaluation as

well as an analysis of the overall impact of the amendments;

▪If the plan is being presented to shareholders for the first time (including after the company's IPO), whether or

not additional shares are being requested, the recommendation will be based on the Equity Plan Scorecard

evaluation as well as an analysis of the overall impact of any amendments; and

▪If there is no request for additional shares and the amendments do not include a term extension or addition of

full value awards as an award type, then the recommendation will be based entirely on an analysis of the

overall impact of the amendments, and the EPSC evaluation will be shown only for informational purposes.

In the first two case-by-case evaluation scenarios, the EPSC evaluation/score is the more heavily weighted

consideration.

Specific Treatment of Certain Award Types in Equity Plan Evaluations

Dividend Equivalent Rights

Options that have Dividend Equivalent Rights (DERs) associated with them will have a higher calculated award

value than those without DERs under the binomial model, based on the value of these dividend streams. The

higher value will be applied to new shares, shares available under existing plans, and shares awarded but not

exercised per the plan specifications. DERS transfer more shareholder equity to employees and non-employee

directors and this cost should be captured.

Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)

For Real Estate Investment Trusts (REITS), include the common shares issuable upon conversion of outstanding

Operating Partnership (OP) units in the share count for the purposes of determining: (1) market capitalization in

the Shareholder Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate analysis.

Other Compensation Plans

401(k) Employee Benefit Plans

General Recommendation: Vote for proposals to implement a 401(k) savings plan for employees.


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Employee Stock Ownership Plans (ESOPs)

General Recommendation: Vote for proposals to implement an ESOP or increase authorized shares for existing

ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding

shares).

Employee Stock Purchase Plans—Qualified Plans

General Recommendation: Vote case-by-case on qualified employee stock purchase plans. Vote for employee

stock purchase plans where all of the following apply:

▪Purchase price is at least 85 percent of fair market value;

▪Offering period is 27 months or less; and

▪The number of shares allocated to the plan is 10 percent or less of the outstanding shares.

Vote against qualified employee stock purchase plans where when the plan features do not meet all of the above

criteria.

Employee Stock Purchase Plans—Non-Qualified Plans

General Recommendation: Vote case-by-case on nonqualified employee stock purchase plans. Vote for

nonqualified employee stock purchase plans with all the following features:

▪Broad-based participation;

▪Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary;

▪Company matching contribution up to 25 percent of employee’s contribution, which is effectively a discount

of 20 percent from market value; and

▪No discount on the stock price on the date of purchase when there is a company matching contribution.

Vote against nonqualified employee stock purchase plans when the plan features do not meet all of the above

criteria. If the matching contribution or effective discount exceeds the above, ISS may evaluate the SVT cost of the

plan as part of the assessment.

Option Exchange Programs/Repricing Options

General Recommendation: Vote case-by-case on management proposals seeking approval to exchange/reprice

options taking into consideration:

▪Historic trading patterns--the stock price should not be so volatile that the options are likely to be back “in-

the-money” over the near term;

▪Rationale for the re-pricing--was the stock price decline beyond management's control?;

▪Is this a value-for-value exchange?;

▪Are surrendered stock options added back to the plan reserve?;

▪Timing--repricing should occur at least one year out from any precipitous drop in company's stock price;

▪Option vesting--does the new option vest immediately or is there a black-out period?;

▪Term of the option--the term should remain the same as that of the replaced option;

▪Exercise price--should be set at fair market or a premium to market; and

▪Participants--executive officers and directors must be excluded.


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If the surrendered options are added back to the equity plans for re-issuance, then also take into consideration the

company’s total cost of equity plans and its three-year average burn rate.

In addition to the above considerations, evaluate the intent, rationale, and timing of the repricing proposal. The

proposal should clearly articulate why the board is choosing to conduct an exchange program at this point in time.

Repricing underwater options after a recent precipitous drop in the company’s stock price demonstrates poor

timing and warrants additional scrutiny. Also, consider the terms of the surrendered options, such as the grant

date, exercise price and vesting schedule. Grant dates of surrendered options should be far enough back (two to

three years) so as not to suggest that repricings are being done to take advantage of short-term downward price

movements. Similarly, the exercise price of surrendered options should be above the 52-week high for the stock

price.

Vote for shareholder proposals to put option repricings to a shareholder vote.

Stock Plans in Lieu of Cash

General Recommendation: Vote case-by-case on plans that provide participants with the option of taking all or a

portion of their cash compensation in the form of stock.

Vote for non-employee director-only equity plans that provide a dollar-for-dollar cash-for-stock exchange.

Vote case-by-case on plans which do not provide a dollar-for-dollar cash for stock exchange. In cases where the

exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be

considered using the binomial option pricing model. In an effort to capture the total cost of total compensation,

ISS will not make any adjustments to carve out the in-lieu-of cash compensation.

Transfer Stock Option (TSO) Programs

General Recommendation: One-time Transfers: Vote against or withhold from compensation committee

members if they fail to submit one-time transfers to shareholders for approval.

Vote case-by-case on one-time transfers. Vote for if:

▪Executive officers and non-employee directors are excluded from participating;

▪Stock options are purchased by third-party financial institutions at a discount to their fair value using option

pricing models such as Black-Scholes or a Binomial Option Valuation or other appropriate financial models;

and

▪There is a two-year minimum holding period for sale proceeds (cash or stock) for all participants.

Additionally, management should provide a clear explanation of why options are being transferred to a third-party

institution and whether the events leading up to a decline in stock price were beyond management's control. A

review of the company's historic stock price volatility should indicate if the options are likely to be back “in-the-

money” over the near term.

Ongoing TSO program: Vote against equity plan proposals if the details of ongoing TSO programs are not provided

to shareholders. Since TSOs will be one of the award types under a stock plan, the ongoing TSO program, structure,

and mechanics must be disclosed to shareholders. The specific criteria to be considered in evaluating these

proposals include, but not limited, to the following:

▪Eligibility;

▪Vesting;


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▪Bid-price;

▪Term of options;

▪Cost of the program and impact of the TSOs on company’s total option expense; and

▪Option repricing policy.

Amendments to existing plans that allow for introduction of transferability of stock options should make clear that

only options granted post-amendment shall be transferable.

Director Compensation

Shareholder Ratification of Director Pay Programs

General Recommendation: Vote case-by-case on management proposals seeking ratification of non-employee

director compensation, based on the following factors:

▪If the equity plan under which non-employee director grants are made is on the ballot, whether or not it

warrants support; and

▪An assessment of the following qualitative factors:

▪The relative magnitude of director compensation as compared to companies of a similar profile;

▪The presence of problematic pay practices relating to director compensation;

▪Director stock ownership guidelines and holding requirements;

▪Equity award vesting schedules;

▪The mix of cash and equity-based compensation;

▪Meaningful limits on director compensation;

▪The availability of retirement benefits or perquisites; and

▪The quality of disclosure surrounding director compensation.

Equity Plans for Non-Employee Directors

General Recommendation: Vote case-by-case on compensation plans for non-employee directors, based on:

▪The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the

company’s estimated Shareholder Value Transfer (SVT) based on new shares requested plus shares remaining

for future grants, plus outstanding unvested/unexercised grants;

▪The company’s three-year burn rate relative to its industry/market cap peers (in certain circumstances); and

▪The presence of any egregious plan features (such as an option repricing provision or liberal CIC vesting risk).

On occasion, non-employee director stock plans will exceed the plan cost or burn-rate benchmarks when

combined with employee or executive stock plans. In such cases, vote case-by-case on the plan taking into

consideration the following qualitative factors:

▪The relative magnitude of director compensation as compared to companies of a similar profile;

▪The presence of problematic pay practices relating to director compensation;

▪Director stock ownership guidelines and holding requirements;

▪Equity award vesting schedules;

▪The mix of cash and equity-based compensation;

▪Meaningful limits on director compensation;

▪The availability of retirement benefits or perquisites; and

▪The quality of disclosure surrounding director compensation.


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Non-Employee Director Retirement Plans

General Recommendation: Vote against retirement plans for non-employee directors. Vote for shareholder

proposals to eliminate retirement plans for non-employee directors.

Shareholder Proposals on Compensation

Bonus Banking/Bonus Banking “Plus”

General Recommendation: Vote case-by-case on proposals seeking deferral of a portion of annual bonus pay,

with ultimate payout linked to sustained results for the performance metrics on which the bonus was earned

(whether for the named executive officers or a wider group of employees), taking into account the following

factors:

▪The company’s past practices regarding equity and cash compensation;

▪Whether the company has a holding period or stock ownership requirements in place, such as a meaningful

retention ratio (at least 50 percent for full tenure); and

▪Whether the company has a rigorous claw-back policy in place.

Compensation Consultants—Disclosure of Board or Company’s Utilization

General Recommendation: Generally vote for shareholder proposals seeking disclosure regarding the company,

board, or compensation committee’s use of compensation consultants, such as company name, business

relationship(s), and fees paid.

Disclosure/Setting Levels or Types of Compensation for Executives and Directors

General Recommendation: Generally vote for shareholder proposals seeking additional disclosure of executive

and director pay information, provided the information requested is relevant to shareholders' needs, would not

put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the

company.

Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate

the amount or form of compensation (such as types of compensation elements or specific metrics) to be used for

executive or directors.

Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in

order to qualify as a director or to remain on the board.

Vote case-by-case on all other shareholder proposals regarding executive and director pay, taking into account

relevant factors, including but not limited to: company performance, pay level and design versus peers, history of

compensation concerns or pay-for-performance disconnect, and/or the scope and prescriptive nature of the

proposal.


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Golden Coffins/Executive Death Benefits

General Recommendation: Generally vote for proposals calling for companies to adopt a policy of obtaining

shareholder approval for any future agreements and corporate policies that could oblige the company to make

payments or awards following the death of a senior executive in the form of unearned salary or bonuses,

accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or

awards made in lieu of compensation. This would not apply to any benefit programs or equity plan proposals for

which the broad-based employee population is eligible.

Hold Equity Past Retirement or for a Significant Period of Time

General Recommendation: Vote case-by-case on shareholder proposals asking companies to adopt policies

requiring senior executive officers to retain a portion of net shares acquired through compensation plans. The

following factors will be taken into account:

▪The percentage/ratio of net shares required to be retained;

▪The time period required to retain the shares;

▪Whether the company has equity retention, holding period, and/or stock ownership requirements in place

and the robustness of such requirements;

▪Whether the company has any other policies aimed at mitigating risk taking by executives;

▪Executives' actual stock ownership and the degree to which it meets or exceeds the proponent’s suggested

holding period/retention ratio or the company’s existing requirements; and

▪Problematic pay practices, current and past, which may demonstrate a short-term versus long-term focus.

Pay Disparity

General Recommendation: Vote case-by-case on proposals calling for an analysis of the pay disparity between

corporate executives and other non-executive employees. The following factors will be considered:

▪The company’s current level of disclosure of its executive compensation setting process, including how the

company considers pay disparity;

▪If any problematic pay practices or pay-for-performance concerns have been identified at the company; and

▪The level of shareholder support for the company's pay programs.

Generally vote against proposals calling for the company to use the pay disparity analysis or pay ratio in a specific

way to set or limit executive pay.

Pay for Performance/Performance-Based Awards

General Recommendation: Vote case-by-case on shareholder proposals requesting that a significant amount of

future long-term incentive compensation awarded to senior executives shall be performance-based and

requesting that the board adopt and disclose challenging performance metrics to shareholders, based on the

following analytical steps:

▪First, vote for shareholder proposals advocating the use of performance-based equity awards, such as

performance contingent options or restricted stock, indexed options, or premium-priced options, unless the

proposal is overly restrictive or if the company has demonstrated that it is using a “substantial” portion of

performance-based awards for its top executives. Standard stock options and performance-accelerated

awards do not meet the criteria to be considered as performance-based awards. Further, premium-priced

options should have a meaningful premium to be considered performance-based awards; and


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▪Second, assess the rigor of the company’s performance-based equity program. If the bar set for the

performance-based program is too low based on the company’s historical or peer group comparison, generally

vote for the proposal. Furthermore, if target performance results in an above target payout, vote for the

shareholder proposal due to program’s poor design. If the company does not disclose the performance metric

of the performance-based equity program, vote for the shareholder proposal regardless of the outcome of the

first step to the test.

In general, vote for the shareholder proposal if the company does not meet both of the above two steps.

Pay for Superior Performance

General Recommendation: Vote case-by-case on shareholder proposals that request the board establish a pay-

for- superior performance standard in the company's executive compensation plan for senior executives. These

proposals generally include the following principles:

▪Set compensation targets for the plan’s annual and long-term incentive pay components at or below the peer

group median;

▪Deliver a majority of the plan’s target long-term compensation through performance-vested, not simply time-

vested, equity awards;

▪Provide the strategic rationale and relative weightings of the financial and non-financial performance metrics

or criteria used in the annual and performance-vested long-term incentive components of the plan;

▪Establish performance targets for each plan financial metric relative to the performance of the company’s

peer companies; and

▪Limit payment under the annual and performance-vested long-term incentive components of the plan to

when the company’s performance on its selected financial performance metrics exceeds peer group median

performance.

Consider the following factors in evaluating this proposal:

▪What aspects of the company’s annual and long-term equity incentive programs are performance driven?

▪If the annual and long-term equity incentive programs are performance driven, are the performance criteria

and hurdle rates disclosed to shareholders or are they benchmarked against a disclosed peer group?

▪Can shareholders assess the correlation between pay and performance based on the current disclosure? and

▪What type of industry and stage of business cycle does the company belong to?

Pre-Arranged Trading Plans (10b5-1 Plans)

General Recommendation: Generally vote for shareholder proposals calling for the addition of certain safeguards

in prearranged trading plans (10b5-1 plans) for executives. Safeguards may include:

▪Adoption, amendment, or termination of a 10b5-1 Plan must be disclosed in a Form 8-K;

▪Amendment or early termination of a 10b5-1 Plan allowed only under extraordinary circumstances, as

determined by the board;

▪Request that a certain number of days that must elapse between adoption or amendment of a 10b5-1 Plan

and initial trading under the plan;

▪Reports on Form 4 must identify transactions made pursuant to a 10b5-1 Plan;

▪An executive may not trade in company stock outside the 10b5-1 Plan; and

▪Trades under a 10b5-1 Plan must be handled by a broker who does not handle other securities transactions

for the executive.


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Prohibit Outside CEOs from Serving on Compensation Committees

General Recommendation: Generally vote against proposals seeking a policy to prohibit any outside CEO from

serving on a company’s compensation committee, unless the company has demonstrated problematic pay

practices that raise concerns about the performance and composition of the committee.

Recoupment of Incentive or Stock Compensation in Specified Circumstances

General Recommendation: Vote case-by-case on proposals to recoup incentive cash or stock compensation made to

senior executives if it is later determined that the figures upon which incentive compensation is earned turn out to

have been in error, or if the senior executive has breached company policy or has engaged in misconduct that may

be significantly detrimental to the company's financial position or reputation, or if the senior executive failed to

manage or monitor risks that subsequently led to significant financial or reputational harm to the company. Many

companies have adopted policies that permit recoupment in cases where an executive's fraud, misconduct, or

negligence significantly contributed to a restatement of financial results that led to the awarding of unearned

incentive compensation. However, such policies may be narrow given that not all misconduct or negligence may

result in significant financial restatements. Misconduct, negligence, or lack of sufficient oversight by senior

executives may lead to significant financial loss or reputational damage that may have long-lasting impact.

In considering whether to support such shareholder proposals, ISS will take into consideration the following

factors:

▪If the company has adopted a formal recoupment policy;

▪The rigor of the recoupment policy focusing on how and under what circumstances the company may recoup

incentive or stock compensation;

▪Whether the company has chronic restatement history or material financial problems;

▪Whether the company’s policy substantially addresses the concerns raised by the proponent;

▪Disclosure of recoupment of incentive or stock compensation from senior executives or lack thereof; and

▪Any other relevant factors.

Severance and Golden Parachute Agreements

General Recommendation: Vote case-by-case on shareholder proposals requiring that executive severance

(including change-in-control related) arrangements or payments be submitted for shareholder ratification.

Factors that will be considered include, but are not limited to:

▪The company’s severance or change-in-control agreements in place, and the presence of problematic features

(such as excessive severance entitlements, single triggers, excise tax gross-ups, etc.);

▪Any existing limits on cash severance payouts or policies which require shareholder ratification of severance

payments exceeding a certain level;

▪Any recent severance-related controversies; and

▪Whether the proposal is overly prescriptive, such as requiring shareholder approval of severance that does not

exceed market norms.

Share Buyback Impact on Incentive Program Metrics

General Recommendation: Vote case-by-case on proposals requesting the company exclude the impact of share

buybacks from the calculation of incentive program metrics, considering the following factors:


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▪The frequency and timing of the company's share buybacks;

▪The use of per-share metrics in incentive plans;

▪The effect of recent buybacks on incentive metric results and payouts; and

▪Whether there is any indication of metric result manipulation.

Supplemental Executive Retirement Plans (SERPs)

General Recommendation: Generally vote for shareholder proposals requesting to put extraordinary benefits

contained in SERP agreements to a shareholder vote unless the company’s executive pension plans do not

contain excessive benefits beyond what is offered under employee-wide plans.

Generally vote for shareholder proposals requesting to limit the executive benefits provided under the company’s

supplemental executive retirement plan (SERP) by limiting covered compensation to a senior executive’s annual

salary or those pay elements covered for the general employee population.

Tax Gross-Up Proposals

General Recommendation: Generally vote for proposals calling for companies to adopt a policy of not providing

tax gross-up payments to executives, except in situations where gross-ups are provided pursuant to a plan, policy,

or arrangement applicable to management employees of the company, such as a relocation or expatriate tax

equalization policy.

Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of

Unvested Equity

General Recommendation: Vote case-by-case on shareholder proposals seeking a policy requiring termination of

employment prior to severance payment and/or eliminating accelerated vesting of unvested equity.

The following factors will be considered:

▪The company's current treatment of equity upon employment termination and/or in change-in-control

situations (i.e., vesting is double triggered and/or pro rata, does it allow for the assumption of equity by

acquiring company, the treatment of performance shares, etc.); and

▪Current employment agreements, including potential poor pay practices such as gross-ups embedded in those

agreements.

Generally vote for proposals seeking a policy that prohibits automatic acceleration of the vesting of equity awards

to senior executives upon a voluntary termination of employment or in the event of a change in control (except for

pro rata vesting considering the time elapsed and attainment of any related performance goals between the award

date and the change in control).


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6.Routine/Miscellaneous

Adjourn Meeting

General Recommendation: Generally vote against proposals to provide management with the authority to

adjourn an annual or special meeting absent compelling reasons to support the proposal.

Vote for proposals that relate specifically to soliciting votes for a merger or transaction if supporting that merger

or transaction. Vote against proposals if the wording is too vague or if the proposal includes "other business."

Amend Quorum Requirements

General Recommendation: Vote case-by-case on proposals to reduce quorum requirements for shareholder

meetings below a majority of the shares outstanding, taking into consideration:

▪The new quorum threshold requested;

▪The rationale presented for the reduction;

▪The market capitalization of the company (size, inclusion in indices);

▪The company's ownership structure;

▪Previous voter turnout or attempts to achieve quorum;

▪Any provisions or commitments to restore quorum to a majority of shares outstanding, should voter turnout

improve sufficiently; and

▪Other factors as appropriate.

In general, a quorum threshold kept as close to a majority of shares outstanding as is achievable

is preferred. Vote case-by-case on directors who unilaterally lower the quorum requirements below a majority of the

shares outstanding, taking into consideration the factors listed above.

Amend Minor Bylaws

General Recommendation: Vote for bylaw or charter changes that are of a housekeeping nature (updates or

corrections).

Change Company Name

General Recommendation: Vote for proposals to change the corporate name unless there is compelling evidence

that the change would adversely impact shareholder value.

Change Date, Time, or Location of Annual Meeting

General Recommendation: Vote for management proposals to change the date, time, or location of the annual

meeting unless the proposed change is unreasonable.

Vote against shareholder proposals to change the date, time, or location of the annual meeting unless the current

scheduling or location is unreasonable.


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Other Business

General Recommendation: Vote against proposals to approve other business when it appears as a voting item.


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7.Social and Environmental Issues

Global Approach – E&S Shareholder Proposals

ISS applies a common approach globally to evaluating social and environmental proposals which cover a wide

range of topics, including consumer and product safety, environment and energy, labor standards and human

rights, workplace and board diversity, and corporate political issues. While a variety of factors goes into each

analysis, the overall principle guiding all vote recommendations focuses on how the proposal may enhance or

protect shareholder value in either the short or long term.

General Recommendation: Generally vote case-by-case, examining primarily whether implementation of the

proposal is likely to enhance or protect shareholder value. The following factors will be considered:

▪If the issues presented in the proposal are being appropriately or effectively dealt with through legislation

or government regulation;

▪If the company has already responded in an appropriate and sufficient manner to the issue(s) raised in the

proposal;

▪Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive;

▪The company's approach compared with any industry standard practices for addressing the issue(s) raised by

the proposal;

▪Whether there are significant controversies, fines, penalties, or litigation associated with the company's

practices related to the issue(s) raised in the proposal;

▪If the proposal requests increased disclosure or greater transparency, whether reasonable and sufficient

information is currently available to shareholders from the company or from other publicly available sources;

and

▪If the proposal requests increased disclosure or greater transparency, whether implementation would reveal

proprietary or confidential information that could place the company at a competitive disadvantage.

Endorsement of Principles

General Recommendation: Generally vote against proposals seeking a company's endorsement of principles that

support a particular public policy position. Endorsing a set of principles may require a company to take a stand on

an issue that is beyond its own control and may limit its flexibility with respect to future developments.

Management and the board should be afforded the flexibility to make decisions on specific public policy positions

based on their own assessment of the most beneficial strategies for the company.

Animal Welfare

Animal Welfare Policies

General Recommendation: Generally vote for proposals seeking a report on a company’s animal welfare

standards, or animal welfare-related risks, unless:

▪The company has already published a set of animal welfare standards and monitors compliance;

▪The company’s standards are comparable to industry peers; and

▪There are no recent significant fines, litigation, or controversies related to the company’s and/or its suppliers'

treatment of animals.


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Animal Testing

General Recommendation: Generally vote against proposals to phase out the use of animals in product testing,

unless:

▪The company is conducting animal testing programs that are unnecessary or not required by regulation;

▪The company is conducting animal testing when suitable alternatives are commonly accepted and used by

industry peers; or

▪There are recent, significant fines or litigation related to the company’s treatment of animals.

Animal Slaughter

General Recommendation: Generally vote against proposals requesting the implementation of Controlled

Atmosphere Killing (CAK) methods at company and/or supplier operations unless such methods are required by

legislation or generally accepted as the industry standard.

Vote case-by-case on proposals requesting a report on the feasibility of implementing CAK methods at company and/

or supplier operations considering the availability of existing research conducted by the company or industry groups

on this topic and any fines or litigation related to current animal processing procedures at the company.

Consumer Issues

Genetically Modified Ingredients

General Recommendation: Generally vote against proposals requesting that a company voluntarily label

genetically engineered (GE) ingredients in its products. The labeling of products with GE ingredients is best left to

the appropriate regulatory authorities.

Vote case-by-case on proposals asking for a report on the feasibility of labeling products containing GE ingredients,

taking into account:

▪The potential impact of such labeling on the company's business;

▪The quality of the company’s disclosure on GE product labeling, related voluntary initiatives, and how this

disclosure compares with industry peer disclosure; and

▪Company’s current disclosure on the feasibility of GE product labeling.

Generally vote against proposals seeking a report on the social, health, and environmental effects of genetically

modified organisms (GMOs). Studies of this sort are better undertaken by regulators and the scientific community.

Generally vote against proposals to eliminate GE ingredients from the company's products, or proposals asking for

reports outlining the steps necessary to eliminate GE ingredients from the company’s products. Such decisions are

more appropriately made by management with consideration of current regulations.

Reports on Potentially Controversial Business/Financial Practices

General Recommendation: Vote case-by-case on requests for reports on a company’s potentially controversial

business or financial practices or products, taking into account:

▪Whether the company has adequately disclosed mechanisms in place to prevent abuses;


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▪Whether the company has adequately disclosed the financial risks of the products/practices in question;

▪Whether the company has been subject to violations of related laws or serious controversies; and

▪Peer companies’ policies/practices in this area.

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation

General Recommendation: Generally vote against proposals requesting that companies implement specific price

restraints on pharmaceutical products unless the company fails to adhere to legislative guidelines or industry

norms in its product pricing practices.

Vote case-by-case on proposals requesting that a company report on its product pricing or access to medicine

policies, considering:

▪The potential for reputational, market, and regulatory risk exposure;

▪Existing disclosure of relevant policies;

▪Deviation from established industry norms;

▪Relevant company initiatives to provide research and/or products to disadvantaged consumers;

▪Whether the proposal focuses on specific products or geographic regions;

▪The potential burden and scope of the requested report; and

▪Recent significant controversies, litigation, or fines at the company.

Generally vote for proposals requesting that a company report on the financial and legal impact of its prescription

drug reimportation policies unless such information is already publicly disclosed.

Generally vote against proposals requesting that companies adopt specific policies to encourage or constrain

prescription drug reimportation. Such matters are more appropriately the province of legislative activity and may

place the company at a competitive disadvantage relative to its peers.

Product Safety and Toxic/Hazardous Materials

General Recommendation: Generally vote for proposals requesting that a company report on its policies,

initiatives/procedures, and oversight mechanisms related to toxic/hazardous materials or product safety in its

supply chain, unless:

▪The company already discloses similar information through existing reports such as a supplier code of conduct

and/or a sustainability report;

▪The company has formally committed to the implementation of a toxic/hazardous materials and/or product

safety and supply chain reporting and monitoring program based on industry norms or similar standards

within a specified time frame; or

▪The company has not been recently involved in relevant significant controversies, fines, or litigation.

Vote case-by-case on resolutions requesting that companies develop a feasibility assessment to phase-out of

certain toxic/hazardous materials, or evaluate and disclose the potential financial and legal risks associated with

utilizing certain materials, considering:

▪The company’s current level of disclosure regarding its product safety policies, initiatives, and oversight

mechanisms;

▪Current regulations in the markets in which the company operates; and

▪Recent significant controversies, litigation, or fines stemming from toxic/hazardous materials at the company.


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Generally vote against resolutions requiring that a company reformulate its products.

Tobacco-Related Proposals

General Recommendation: Vote case-by-case on resolutions regarding the advertisement of tobacco products,

considering:

▪Recent related fines, controversies, or significant litigation;

▪Whether the company complies with relevant laws and regulations on the marketing of tobacco;

▪Whether the company’s advertising restrictions deviate from those of industry peers;

▪Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco

to youth; and

▪Whether restrictions on marketing to youth extend to foreign countries.

Vote case-by-case on proposals regarding second-hand smoke, considering;

▪Whether the company complies with all laws and regulations;

▪The degree that voluntary restrictions beyond those mandated by law might hurt the company’s

competitiveness; and

▪The risk of any health-related liabilities.

Generally vote against resolutions to cease production of tobacco-related products, to avoid selling products to

tobacco companies, to spin-off tobacco-related businesses, or prohibit investment in tobacco equities. Such

business decisions are better left to company management or portfolio managers.

Generally vote against proposals regarding tobacco product warnings. Such decisions are better left to public

health authorities.

Climate Change

Say on Climate (SoC) Management Proposals

General Recommendation: Vote case-by-case on management proposals that request shareholders to approve

the company’s climate transition action plan23, taking into account the completeness and rigor of the plan.

Information that will be considered where available includes the following:

▪The extent to which the company’s climate related disclosures are in line with TCFD recommendations and

meet other market standards;

▪Disclosure of its operational and supply chain GHG emissions (Scopes 1, 2, and 3);

▪The completeness and rigor of company’s short-, medium-, and long-term targets for reducing operational and

supply chain GHG emissions (Scopes 1, 2, and 3 if relevant);

▪Whether the company has sought and received third-party approval that its targets are science-based;

▪Whether the company has made a commitment to be “net zero” for operational and supply chain emissions

(Scopes 1, 2, and 3) by 2050;

▪Whether the company discloses a commitment to report on the implementation of its plan in subsequent

years;

▪Whether the company’s climate data has received third-party assurance;

23 Variations of this request also include climate transition related ambitions, or commitment to reporting on the

implementation of a climate plan.


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▪Disclosure of how the company’s lobbying activities and its capital expenditures align with company strategy;

▪Whether there are specific industry decarbonization challenges; and

▪The company’s related commitment, disclosure, and performance compared to its industry peers.

Say on Climate (SoC) Shareholder Proposals

General Recommendation: Vote case-by-case on shareholder proposals that request the company to disclose a

report providing its GHG emissions levels and reduction targets and/or its upcoming/approved climate transition

action plan and provide shareholders the opportunity to express approval or disapproval of its GHG emissions

reduction plan, taking into account information such as the following:

▪The completeness and rigor of the company’s climate-related disclosure;

▪The company’s actual GHG emissions performance;

▪Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to its GHG emissions; and

▪Whether the proposal’s request is unduly burdensome (scope or timeframe) or overly prescriptive.

Climate Change/Greenhouse Gas (GHG) Emissions

General Recommendation: Generally vote for resolutions requesting that a company disclose information on the

financial, physical, or regulatory risks it faces related to climate change on its operations and investments or on

how the company identifies, measures, and manages such risks, considering:

▪Whether the company already provides current, publicly-available information on the impact that climate

change may have on the company as well as associated company policies and procedures to address related

risks and/or opportunities;

▪The company's level of disclosure compared to industry peers; and

▪Whether there are significant controversies, fines, penalties, or litigation associated with the company's

climate change-related performance.

Generally vote for proposals requesting a report on greenhouse gas (GHG) emissions from company operations

and/or products and operations, unless:

▪The company already discloses current, publicly-available information on the impacts that GHG emissions may

have on the company as well as associated company policies and procedures to address related risks and/or

opportunities;

▪The company's level of disclosure is comparable to that of industry peers; or

▪There are no significant, controversies, fines, penalties, or litigation associated with the company's GHG

emissions.

Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations,

taking into account:

▪Whether the company provides disclosure of year-over-year GHG emissions performance data;

▪Whether company disclosure lags behind industry peers;

▪The company's actual GHG emissions performance;

▪The company's current GHG emission policies, oversight mechanisms, and related initiatives; and

▪Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to GHG emissions.


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Energy Efficiency

General Recommendation: Generally vote for proposals requesting that a company report on its energy

efficiency policies, unless:

▪The company complies with applicable energy efficiency regulations and laws, and discloses its participation in

energy efficiency policies and programs, including disclosure of benchmark data, targets, and performance

measures; or

▪The proponent requests adoption of specific energy efficiency goals within specific timelines.

Renewable Energy

General Recommendation: Generally vote for requests for reports on the feasibility of developing renewable

energy resources unless the report would be duplicative of existing disclosure or irrelevant to the company’s line

of business.

Generally vote against proposals requesting that the company invest in renewable energy resources. Such decisions

are best left to management’s evaluation of the feasibility and financial impact that such programs may have on the

company.

Generally vote against proposals that call for the adoption of renewable energy goals, taking into account:

▪The scope and structure of the proposal;

▪The company's current level of disclosure on renewable energy use and GHG emissions; and

▪The company's disclosure of policies, practices, and oversight implemented to manage GHG emissions and

mitigate climate change risks.

Diversity

Board Diversity

General Recommendation: Generally vote for requests for reports on a company's efforts to diversify the board,

unless:

▪The gender and racial minority representation of the company’s board is reasonably inclusive in relation to

companies of similar size and business; or

▪The board already reports on its nominating procedures and gender and racial minority initiatives on the

board and within the company.

Vote case-by-case on proposals asking a company to increase the gender and racial minority representation on its

board, taking into account:

▪The degree of existing gender and racial minority diversity on the company’s board and among its executive

officers;

▪The level of gender and racial minority representation that exists at the company’s industry peers;

▪The company’s established process for addressing gender and racial minority board representation;

▪Whether the proposal includes an overly prescriptive request to amend nominating committee charter

language;

▪The independence of the company’s nominating committee;

▪Whether the company uses an outside search firm to identify potential director nominees; and


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UNITED STATES Proxy Voting Guidelines

▪Whether the company has had recent controversies, fines, or litigation regarding equal employment practices.

Equality of Opportunity

General Recommendation: Generally vote for proposals requesting a company disclose its diversity policies or

initiatives, or proposals requesting disclosure of a company’s comprehensive workforce diversity data, including

requests for EEO-1 data, unless:

▪The company publicly discloses equal opportunity policies and initiatives in a comprehensive manner;

▪The company already publicly discloses comprehensive workforce diversity data; or

▪The company has no recent significant EEO-related violations or litigation.

Generally vote against proposals seeking information on the diversity efforts of suppliers and service providers.

Such requests may pose a significant burden on the company.

Gender Identity, Sexual Orientation, and Domestic Partner Benefits

General Recommendation: Generally vote for proposals seeking to amend a company’s EEO statement or

diversity policies to prohibit discrimination based on sexual orientation and/or gender identity, unless the change

would be unduly burdensome.

Generally vote against proposals to extend company benefits to, or eliminate benefits from, domestic partners.

Decisions regarding benefits should be left to the discretion of the company.

Gender, Race/Ethnicity Pay Gap

General Recommendation: Vote case-by-case on requests for reports on a company's pay data by gender or

race/ ethnicity, or a report on a company’s policies and goals to reduce any gender or race/ethnicity pay gaps,

taking into account:

▪The company's current policies and disclosure related to both its diversity and inclusion policies and practices

and its compensation philosophy on fair and equitable compensation practices;

▪Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

gender, race, or ethnicity pay gap issues;

▪The company’s disclosure regarding gender, race, or ethnicity pay gap policies or initiatives compared to its

industry peers; and

▪Local laws regarding categorization of race and/or ethnicity and definitions of ethnic and/or racial minorities.

Racial Equity and/or Civil Rights Audit Guidelines

General Recommendation: Vote case-by-case on proposals asking a company to conduct an independent racial

equity and/or civil rights audit, taking into account:

▪The company’s established process or framework for addressing racial inequity and discrimination internally;

▪Whether the company adequately discloses workforce diversity and inclusion metrics and goals;

▪Whether the company has issued a public statement related to its racial justice efforts in recent years, or has

committed to internal policy review;

▪Whether the company has engaged with impacted communities, stakeholders, and civil rights experts;

▪The company’s track record in recent years of racial justice measures and outreach externally; and


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UNITED STATES Proxy Voting Guidelines

▪Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

racial inequity or discrimination.

Environment and Sustainability

Facility and Workplace Safety

General Recommendation: Vote case-by-case on requests for workplace safety reports, including reports on

accident risk reduction efforts, taking into account:

▪The company’s current level of disclosure of its workplace health and safety performance data, health and

safety management policies, initiatives, and oversight mechanisms;

▪The nature of the company’s business, specifically regarding company and employee exposure to health and

safety risks;

▪Recent significant controversies, fines, or violations related to workplace health and safety; and

▪The company's workplace health and safety performance relative to industry peers.

Vote case-by-case on resolutions requesting that a company report on safety and/or security risks associated with its

operations and/or facilities, considering:

▪The company’s compliance with applicable regulations and guidelines;

▪The company’s current level of disclosure regarding its security and safety policies, procedures, and compliance

monitoring; and

▪The existence of recent, significant violations, fines, or controversy regarding the safety and security of the

company’s operations and/or facilities.

General Environmental Proposals and Community Impact Assessments

General Recommendation: Vote case-by-case on requests for reports on policies and/or the potential

(community) social and/or environmental impact of company operations, considering:

▪Current disclosure of applicable policies and risk assessment report(s) and risk management procedures;

▪The impact of regulatory non-compliance, litigation, remediation, or reputational loss that may be associated

with failure to manage the company’s operations in question, including the management of relevant

community and stakeholder relations;

▪The nature, purpose, and scope of the company’s operations in the specific region(s);

▪The degree to which company policies and procedures are consistent with industry norms; and

▪The scope of the resolution.

Hydraulic Fracturing

General Recommendation: Generally vote for proposals requesting greater disclosure of a company's (natural

gas) hydraulic fracturing operations, including measures the company has taken to manage and mitigate the

potential community and environmental impacts of those operations, considering:

▪The company's current level of disclosure of relevant policies and oversight mechanisms;

▪The company's current level of such disclosure relative to its industry peers;

▪Potential relevant local, state, or national regulatory developments; and


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UNITED STATES Proxy Voting Guidelines

▪Controversies, fines, or litigation related to the company's hydraulic fracturing operations.

Operations in Protected Areas

General Recommendation: Generally vote for requests for reports on potential environmental damage as a result

of company operations in protected regions, unless:

▪Operations in the specified regions are not permitted by current laws or regulations;

▪The company does not currently have operations or plans to develop operations in these protected regions; or

▪The company’s disclosure of its operations and environmental policies in these regions is comparable to

industry peers.

Recycling

General Recommendation: Vote case-by-case on proposals to report on an existing recycling program, or adopt a

new recycling program, taking into account:

▪The nature of the company’s business;

▪The current level of disclosure of the company's existing related programs;

▪The timetable and methods of program implementation prescribed by the proposal;

▪The company’s ability to address the issues raised in the proposal; and

▪How the company's recycling programs compare to similar programs of its industry peers.

Sustainability Reporting

General Recommendation: Generally vote for proposals requesting that a company report on its policies,

initiatives, and oversight mechanisms related to social, economic, and environmental sustainability, unless:

▪The company already discloses similar information through existing reports or policies such as an

environment, health, and safety (EHS) report; a comprehensive code of corporate conduct; and/or a diversity

report; or

▪The company has formally committed to the implementation of a reporting program based on Global

Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame.

Water Issues

General Recommendation: Vote case-by-case on proposals requesting a company report on, or adopt a new

policy on, water-related risks and concerns, taking into account:

▪The company's current disclosure of relevant policies, initiatives, oversight mechanisms, and water usage

metrics;

▪Whether or not the company's existing water-related policies and practices are consistent with relevant

internationally recognized standards and national/local regulations;

▪The potential financial impact or risk to the company associated with water-related concerns or issues; and

▪Recent, significant company controversies, fines, or litigation regarding water use by the company and its

suppliers.


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UNITED STATES Proxy Voting Guidelines

General Corporate Issues

Charitable Contributions

General Recommendation: Vote against proposals restricting a company from making charitable contributions.

Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the

community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which,

and if, contributions are in the best interests of the company.

Data Security, Privacy, and Internet Issues

General Recommendation: Vote case-by-case on proposals requesting the disclosure or implementation of data

security, privacy, or information access and management policies and procedures, considering:

▪The level of disclosure of company policies and procedures relating to data security, privacy, freedom of

speech, information access and management, and Internet censorship;

▪Engagement in dialogue with governments or relevant groups with respect to data security, privacy, or the

free flow of information on the Internet;

▪The scope of business involvement and of investment in countries whose governments censor or monitor the

Internet and other telecommunications;

▪Applicable market-specific laws or regulations that may be imposed on the company; and

▪Controversies, fines, or litigation related to data security, privacy, freedom of speech, or Internet censorship.

ESG Compensation-Related Proposals

General Recommendation: Vote case-by-case on proposals seeking a report or additional disclosure on the

company's approach, policies, and practices on incorporating environmental and social criteria into its executive

compensation strategy, considering:

▪The scope and prescriptive nature of the proposal;

▪The company's current level of disclosure regarding its environmental and social performance and governance;

▪The degree to which the board or compensation committee already discloses information on whether it has

considered related E&S criteria; and

▪Whether the company has significant controversies or regulatory violations regarding social or environmental

issues.

Human Rights, Human Capital Management, and International

Operations

Human Rights Proposals

General Recommendation: Generally vote for proposals requesting a report on company or company supplier

labor and/or human rights standards and policies unless such information is already publicly disclosed.


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UNITED STATES Proxy Voting Guidelines

Vote case-by-case on proposals to implement company or company supplier labor and/or human rights standards

and policies, considering:

▪The degree to which existing relevant policies and practices are disclosed;

▪Whether or not existing relevant policies are consistent with internationally recognized standards;

▪Whether company facilities and those of its suppliers are monitored and how;

▪Company participation in fair labor organizations or other internationally recognized human rights initiatives;

▪Scope and nature of business conducted in markets known to have higher risk of workplace labor/human

rights abuse;

▪Recent, significant company controversies, fines, or litigation regarding human rights at the company or its

suppliers;

▪The scope of the request; and

▪Deviation from industry sector peer company standards and practices.

Vote case-by-case on proposals requesting that a company conduct an assessment of the human rights risks in its

operations or in its supply chain, or report on its human rights risk assessment process, considering:

▪The degree to which existing relevant policies and practices are disclosed, including information on the

implementation of these policies and any related oversight mechanisms;

▪The company’s industry and whether the company or its suppliers operate in countries or areas where there is

a history of human rights concerns;

▪Recent significant controversies, fines, or litigation regarding human rights involving the company or its

suppliers, and whether the company has taken remedial steps; and

▪Whether the proposal is unduly burdensome or overly prescriptive.

Mandatory Arbitration

General Recommendation: Vote case-by-case on requests for a report on a company’s use of mandatory

arbitration on employment-related claims, taking into account:

▪The company's current policies and practices related to the use of mandatory arbitration agreements on

workplace claims;

▪Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

the use of mandatory arbitration agreements on workplace claims; and

▪The company's disclosure of its policies and practices related to the use of mandatory arbitration agreements

compared to its peers.

Operations in High-Risk Markets

General Recommendation: Vote case-by-case on requests for a report on a company’s potential financial and

reputational risks associated with operations in “high-risk” markets, such as a terrorism-sponsoring state or

politically/socially unstable region, taking into account:

▪The nature, purpose, and scope of the operations and business involved that could be affected by social or

political disruption;

▪Current disclosure of applicable risk assessment(s) and risk management procedures;

▪Compliance with U.S. sanctions and laws;

▪Consideration of other international policies, standards, and laws; and

▪Whether the company has been recently involved in recent, significant controversies, fines, or litigation

related to its operations in "high-risk" markets.


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UNITED STATES Proxy Voting Guidelines

Outsourcing/Offshoring

General Recommendation: Vote case-by-case on proposals calling for companies to report on the risks

associated with outsourcing/plant closures, considering:

▪Controversies surrounding operations in the relevant market(s);

▪The value of the requested report to shareholders;

▪The company’s current level of disclosure of relevant information on outsourcing and plant closure

procedures; and

▪The company’s existing human rights standards relative to industry peers.

Sexual Harassment

General Recommendation: Vote case-by-case on requests for a report on company actions taken to strengthen

policies and oversight to prevent workplace sexual harassment, or a report on risks posed by a company’s failure

to prevent workplace sexual harassment, taking into account:

▪The company's current policies, practices, oversight mechanisms related to preventing workplace sexual

harassment;

▪Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

workplace sexual harassment issues; and

▪The company's disclosure regarding workplace sexual harassment policies or initiatives compared to its

industry peers.

Weapons and Military Sales

General Recommendation: Vote against reports on foreign military sales or offsets. Such disclosures may involve

sensitive and confidential information. Moreover, companies must comply with government controls and

reporting on foreign military sales.

Generally vote against proposals asking a company to cease production or report on the risks associated with the

use of depleted uranium munitions or nuclear weapons components and delivery systems, including disengaging

from current and proposed contracts. Such contracts are monitored by government agencies, serve multiple

military and non-military uses, and withdrawal from these contracts could have a negative impact on the

company’s business.

Political Activities

Lobbying

General Recommendation: Vote case-by-case on proposals requesting information on a company’s lobbying

(including direct, indirect, and grassroots lobbying) activities, policies, or procedures, considering:

▪The company’s current disclosure of relevant lobbying policies, and management and board oversight;

▪The company’s disclosure regarding trade associations or other groups that it supports, or is a member of, that

engage in lobbying activities; and

▪Recent significant controversies, fines, or litigation regarding the company’s lobbying-related activities.


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Political Contributions

General Recommendation: Generally vote for proposals requesting greater disclosure of a company's political

contributions and trade association spending policies and activities, considering:

▪The company's policies, and management and board oversight related to its direct political contributions and

payments to trade associations or other groups that may be used for political purposes;

▪The company's disclosure regarding its support of, and participation in, trade associations or other groups that

may make political contributions; and

▪Recent significant controversies, fines, or litigation related to the company's political contributions or political

activities.

Vote against proposals barring a company from making political contributions. Businesses are affected by

legislation at the federal, state, and local level; barring political contributions can put the company at a competitive

disadvantage.

Vote against proposals to publish in newspapers and other media a company's political contributions. Such

publications could present significant cost to the company without providing commensurate value to shareholders.

Political Expenditures and Lobbying Congruency

General Recommendation: Generally vote case-by-case on proposals requesting greater disclosure of a company’s

alignment of political contributions, lobbying, and electioneering spending with a company’s publicly stated values

and policies, considering:

▪The company’s policies, management, board oversight, governance processes, and level of disclosure related

to direct political contributions, lobbying activities, and payments to trade associations, political action

committees, or other groups that may be used for political purposes;

▪The company’s disclosure regarding: the reasons for its support of candidates for public offices; the reasons

for support of and participation in trade associations or other groups that may make political contributions;

and other political activities;

▪Any incongruencies identified between a company’s direct and indirect political expenditures and its publicly

stated values and priorities.

▪Recent significant controversies related to the company’s direct and indirect lobbying, political contributions,

or political activities.

Generally vote case-by-case on proposals requesting comparison of a company’s political spending to objectives

that can mitigate material risks for the company, such as limiting global warming.

Political Ties

General Recommendation: Generally vote against proposals asking a company to affirm political nonpartisanship

in the workplace, so long as:

▪There are no recent, significant controversies, fines, or litigation regarding the company’s political

contributions or trade association spending; and


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▪The company has procedures in place to ensure that employee contributions to company-sponsored political

action committees (PACs) are strictly voluntary and prohibit coercion.

Vote against proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or

investment bankers that have prior government service and whether such service had a bearing on the business of

the company. Such a list would be burdensome to prepare without providing any meaningful information to

shareholders.


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8.Mutual Fund Proxies

Election of Directors

General Recommendation: Vote case-by-case on the election of directors and trustees, following the same

guidelines for uncontested directors for public company shareholder meetings. However, mutual fund boards do

not usually have compensation committees, so do not withhold for the lack of this committee.

Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes

General Recommendation: For closed-end management investment companies (CEFs), vote against or withhold

from nominating/governance committee members (or other directors on a case-by-case basis) at CEFs that have

not provided a compelling rationale for opting-in to a Control Share Acquisition statute, nor submitted a by-law

amendment to a shareholder vote.

Converting Closed-end Fund to Open-end Fund

General Recommendation: Vote case-by-case on conversion proposals, considering the following factors:

▪Past performance as a closed-end fund;

▪Market in which the fund invests;

▪Measures taken by the board to address the discount; and

▪Past shareholder activism, board activity, and votes on related proposals.

Proxy Contests

General Recommendation: Vote case-by-case on proxy contests, considering the following factors:

▪Past performance relative to its peers;

▪Market in which the fund invests;

▪Measures taken by the board to address the issues;

▪Past shareholder activism, board activity, and votes on related proposals;

▪Strategy of the incumbents versus the dissidents;

▪Independence of directors;

▪Experience and skills of director candidates;

▪Governance profile of the company; and

▪Evidence of management entrenchment.

Investment Advisory Agreements

General Recommendation: Vote case-by-case on investment advisory agreements, considering the following

factors:

▪Proposed and current fee schedules;

▪Fund category/investment objective;

▪Performance benchmarks;

▪Share price performance as compared with peers;

▪Resulting fees relative to peers; and

▪Assignments (where the advisor undergoes a change of control).


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Approving New Classes or Series of Shares

General Recommendation: Vote for the establishment of new classes or series of shares.

Preferred Stock Proposals

General Recommendation: Vote case-by-case on the authorization for or increase in preferred shares,

considering the following factors:

▪Stated specific financing purpose;

▪Possible dilution for common shares; and

▪Whether the shares can be used for antitakeover purposes.

1940 Act Policies

General Recommendation: Vote case-by-case on policies under the Investment Advisor Act of 1940, considering

the following factors:

▪Potential competitiveness;

▪Regulatory developments;

▪Current and potential returns; and

▪Current and potential risk.

Generally vote for these amendments as long as the proposed changes do not fundamentally alter the investment

focus of the fund and do comply with the current SEC interpretation.

Changing a Fundamental Restriction to a Nonfundamental Restriction

General Recommendation: Vote case-by-case on proposals to change a fundamental restriction to a non-

fundamental restriction, considering the following factors:

▪The fund's target investments;

▪The reasons given by the fund for the change; and

▪The projected impact of the change on the portfolio.

Change Fundamental Investment Objective to Nonfundamental

General Recommendation: Vote against proposals to change a fund’s fundamental investment objective to non-

fundamental.

Name Change Proposals

General Recommendation: Vote case-by-case on name change proposals, considering the following factors:

▪Political/economic changes in the target market;

▪Consolidation in the target market; and

▪Current asset composition.


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Change in Fund's Subclassification

General Recommendation: Vote case-by-case on changes in a fund's sub-classification, considering the following

factors:

▪Potential competitiveness;

▪Current and potential returns;

▪Risk of concentration; and

▪Consolidation in target industry.

Business Development Companies—Authorization to Sell Shares of Common Stock at a Price

below Net Asset Value

General Recommendation: Vote for proposals authorizing the board to issue shares below Net Asset Value (NAV)

if:

▪The proposal to allow share issuances below NAV has an expiration date no more than one year from the date

shareholders approve the underlying proposal, as required under the Investment Company Act of 1940;

▪The sale is deemed to be in the best interests of shareholders by (1) a majority of the company's independent

directors and (2) a majority of the company's directors who have no financial interest in the issuance; and

▪The company has demonstrated responsible past use of share issuances by either:

▪Outperforming peers in its 8-digit GICS group as measured by one- and three-year median TSRs; or

▪Providing disclosure that its past share issuances were priced at levels that resulted in only small or moderate

discounts to NAV and economic dilution to existing non-participating shareholders.

Disposition of Assets/Termination/Liquidation

General Recommendation: Vote case-by-case on proposals to dispose of assets, to terminate or liquidate,

considering the following factors:

▪Strategies employed to salvage the company;

▪The fund’s past performance; and

▪The terms of the liquidation.

Changes to the Charter Document

General Recommendation: Vote case-by-case on changes to the charter document, considering the following

factors:

▪The degree of change implied by the proposal;

▪The efficiencies that could result;

▪The state of incorporation; and

▪Regulatory standards and implications.

Vote against any of the following changes:

▪Removal of shareholder approval requirement to reorganize or terminate the trust or any of its series;

▪Removal of shareholder approval requirement for amendments to the new declaration of trust;

▪Removal of shareholder approval requirement to amend the fund's management contract, allowing the

contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act;


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▪Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred

sales charges and redemption fees that may be imposed upon redemption of a fund's shares;

▪Removal of shareholder approval requirement to engage in and terminate subadvisory arrangements; or

▪Removal of shareholder approval requirement to change the domicile of the fund.

Changing the Domicile of a Fund

General Recommendation: Vote case-by-case on re-incorporations, considering the following factors:

▪Regulations of both states;

▪Required fundamental policies of both states; and

▪The increased flexibility available.

Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval

General Recommendation: Vote against proposals authorizing the board to hire or terminate subadvisers

without shareholder approval if the investment adviser currently employs only one subadviser.

Distribution Agreements

General Recommendation: Vote case-by-case on distribution agreement proposals, considering the following

factors:

▪Fees charged to comparably sized funds with similar objectives;

▪The proposed distributor’s reputation and past performance;

▪The competitiveness of the fund in the industry; and

▪The terms of the agreement.

Master-Feeder Structure

General Recommendation: Vote for the establishment of a master-feeder structure.

Mergers

General Recommendation: Vote case-by-case on merger proposals, considering the following factors:

▪Resulting fee structure;

▪Performance of both funds;

▪Continuity of management personnel; and

▪Changes in corporate governance and their impact on shareholder rights.

Shareholder Proposals for Mutual Funds

Establish Director Ownership Requirement

General Recommendation: Generally vote against shareholder proposals that mandate a specific minimum

amount of stock that directors must own in order to qualify as a director or to remain on the board.


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Reimburse Shareholder for Expenses Incurred

General Recommendation: Vote case-by-case on shareholder proposals to reimburse proxy solicitation expenses.

When supporting the dissidents, vote for the reimbursement of the proxy solicitation expenses.

Terminate the Investment Advisor

General Recommendation: Vote case-by-case on proposals to terminate the investment advisor, considering the

following factors:

▪Performance of the fund’s Net Asset Value (NAV);

▪The fund’s history of shareholder relations; and

▪The performance of other funds under the advisor’s management.


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for long-term and sustainable growth by providing

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GET STARTED WITH ISS SOLUTIONS

Email sales@issgovernance.com or visit www.issgovernance.com for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies

to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is

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institutional investors who rely on ISS’ objective and impartial offerings, as well as public companies focused on

ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS’ expertise to help

them make informed investment decisions. This document and all of the information contained in it, including

without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional

Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange

Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of

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The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.

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AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED

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profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude

or limit any liability that may not by applicable law be excluded or limited.


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		[X]
Pre-Effective Amendment No.		[ ]
Post-Effective Amendment No.	334	[X]


REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940		[X]
Amendment No.	336	[X]


Gregory Bakken, President						Copy to:
Listed Funds Trust						Laura E. Flores
c/o U.S. Bancorp Fund Services, LLC						Morgan, Lewis & Bockius LLP
777 East Wisconsin Avenue, 10th Floor						1111 Pennsylvania Avenue, NW
Milwaukee, Wisconsin 53202						Washington, DC 20004-2541
(Name and Address of Agent for Service)


[ ]						Immediately upon filing pursuant to Rule 485(b).
[ ]						on (date) pursuant to Rule 485(b).
[ ]						60 days after filing pursuant to Rule 485(a)(1).
[ ]						on (date) pursuant to Rule 485(a)(1).
[X]						75 days after filing pursuant to Rule 485(a)(2).
[ ]						on (date) pursuant to Rule 485(a)(2).


FUND SUMMARY			3
ADDITIONAL INFORMATION ABOUT THE FUND			11
INVESTMENT OBJECTIVE			11
PRINCIPAL INVESTMENT STRATEGIES			11
PRINCIPAL INVESTMENT RISKS			13
PORTFOLIO HOLDINGS INFORMATION			20
MANAGEMENT			20
INVESTMENT ADVISER			20
MANAGEMENT OF THE SUBSIDIARY			20
PORTFOLIO MANAGERS			20
OTHER SERVICE PROVIDERS			21
HOW TO BUY AND SELL SHARES			21
BOOK ENTRY			21
FREQUENT PURCHASES AND REDEMPTIONS OF SHARES			21
DETERMINATION OF NET ASSET VALUE			22
FAIR VALUE PRICING			22
DELIVERY OF SHAREHOLDER DOCUMENTS - HOUSEHOLDING			22
DIVIDENDS, DISTRIBUTIONS, AND TAXES			22
DIVIDENDS AND DISTRIBUTIONS			22
TAXES			22
TAXES ON DISTRIBUTIONS			23
TAXES WHEN SHARES ARE SOLD ON THE EXCHANGE			23
TAXES ON PURCHASES AND REDEMPTIONS OF CREATION UNITS			24
TAXATION OF THE SUBSIDIARY			24
INVESTMENTS IN COMPLEX SECURITIES			24
INVESTMENTS IN CERTAIN FOREIGN CORPORATIONS			24
NET INVESTMENT INCOME TAX			25
DISTRIBUTION PLAN			25
PREMIUM/DISCOUNT INFORMATION			25
ADDITIONAL NOTICES			25
FINANCIAL HIGHLIGHTS			25


[ ]						This post-effective amendment designates a new effective date for a previously filed post-effective amendment.


Shareholder Fees (fees paid directly from your investment)			None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee1			[...]%
Distribution and/or Service (12b-1) Fees			0.00%
Other Expenses2			0.00%
Acquired Fund Fees and Expenses2			[...]%
Total Annual Fund Operating Expenses			[...]%


Adviser			Fortuna Funds, LLC (the “Adviser”)
Portfolio Managers			Mark Adams has been the portfolio manager of the Fund since its inception in [...] 2024


Adviser	Fortuna Funds, LLC 6565 Hillcrest Road, Suite 215 Dallas, Texas 75205	Transfer Agent and Administrator	U.S. Bancorp Fund Services, LLC d/b/a U.S. Bank Global Fund Services 615 East Michigan Street Milwaukee, Wisconsin 53202
Custodian	U.S. Bank National Association 1555 North Rivercenter Drive, Suite 302 Milwaukee, Wisconsin 53212	Distributor	Foreside Fund Services, LLC Three Canal Plaza, Suite 100 Portland, Maine 04101
Independent Registered Public Accounting Firm	[...] [...] [...]	Legal Counsel	Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541


General Information about the Trust			2
Additional Information About Investment Objective, Policies, and Related Risks			2
Non-Diversification			2
General Risks			2
Description of Permitted Investments			3
Investment Restrictions			17
Exchange Listing and Trading			18
Management of the Trust			19
Principal Shareholders, Control Persons, and Management Ownership			22
Codes of Ethics			23
Proxy Voting Policies			23
Investment Management			23
Investment Adviser			23
Portfolio Managers			24
Distributor			24
Administrator and Transfer Agent			26
Custodian			26
Legal Counsel			26
Independent Registered Public Accounting Firm			26
Portfolio Holdings Disclosure Policies and Procedures			26
Description of Shares			26
Limitation of Trustees’ Liability			26
Brokerage Transactions			27
Portfolio Turnover Rate			28
Book Entry Only System			28
Purchase and Redemption of Creation Units			29
Determination of Net Asset Value			34
Dividends and Distributions			34
Federal Income Taxes			35
Financial Statements			42
Appendix A			A-1


Name and Year of Birth	Position(s) Held with the Trust	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
Gregory C. Bakken Year of birth: 1983	President and Principal Executive Officer	Indefinite term, February 2019	Vice President, U.S. Bancorp Fund Services, LLC (since 2006)
Travis G. Babich Year of birth: 1980	Treasurer and Principal Financial Officer	Indefinite term, September 2019	Vice President, U.S. Bancorp Fund Services, LLC (since 2005)
Kacie G. Briody Year of birth: 1992	Assistant Treasurer	Indefinite term, March 2019	Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2021); Officer, U.S. Bancorp Fund Services, LLC (2014 to 2021)
Chad E. Fickett Year of birth: 1973	Secretary	Indefinite term, June 2024	Vice President, U.S. Bancorp Fund Services, LLC (since 2024); Assistant General Counsel, The Northwestern Mutual Life Insurance Company (2007 to 2024)
Christi C. Powitzky Year of birth: 1974	Chief Compliance Officer and Anti-Money Laundering Officer	Indefinite term, July 2022	Senior Vice President, U.S. Bancorp Fund Services, LLC (since 2022); Principal Consultant, ACA Group (2021 to 2022); Lead Manager, Communications Compliance, T. Rowe Price Investment Services, Inc. (2018 to 2021)
Jay S. Fitton Year of birth: 1970	Assistant Secretary	Indefinite term, May 2023	Vice President, U.S. Bancorp Fund Services, LLC (since 2022); Assistant Vice President, U.S. Bancorp Fund Services, LLC (2019 to 2022); Partner, Practus, LLP (2018 to 2019)


Name	Aggregate Compensation from Fund	Total Compensation from Fund Complex Paid to Trustees
Interested Trustee
Paul R. Fearday	$0	$0
Independent Trustees
John. L. Jacobs	$[...]	$[...]
Koji Felton	$[...]	$[...]
Pamela H. Conroy	$[...]	$[...]


Exhibit No.			Description of Exhibit
(a)	(i)		Certificate of Trust of Active Weighting Funds ETF Trust dated August 26, 2016 is incorporated herein by reference to Exhibit (a)(i) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
	(ii)		Certificate of Amendment to the Certificate of Trust of Active Weighting Funds ETF Trust dated December 21, 2018 is incorporated herein by reference to Exhibit (a)(ii) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
	(iii)		Amended and Restated Declaration of Trust of Listed Funds Trust (the “Registrant” or the “Trust”) dated December 21, 2018 is incorporated herein by reference to Exhibit (a)(iii) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
(b)			Amended and Restated By-Laws of the Registrant dated March 19, 2019 are incorporated herein by reference to Exhibit (b) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
(c)			For information regarding the rights of the holders of securities, please see Articles IV, VII and VIII of the Declaration of Trust, filed as Exhibit (a)(i) above.
(d)			Investment Advisory Agreement — To Be Filed By Amendment.
(e)	(i)	(A)	ETF Distribution Agreement between the Trust and Foreside Fund Services, LLC dated September 30, 2021 is incorporated herein by reference to Exhibit (e)(i) to the Registrant’s Registration Statement on Form N-1A, as filed on October 19, 2021.
		(B)	Ninth Amendment to the ETF Distribution Agreement — To Be Filed By Amendment.
	(ii)		Form of Authorized Participant Agreement is incorporated herein by reference to Exhibit (e)(2) to the Registrant’s Registration Statement on Form N-1A, as filed on October 2, 2017.
(f)			Not applicable.
(g)	(i)		Custody Agreement between Registrant and U.S. Bank National Association dated April 9, 2019 is incorporated herein by reference to Exhibit (G) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
	(ii)		Exhibit 26 to Custody Agreement — To Be Filed By Amendment.
(h)	(i)	(A)	Fund Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC dated April 9, 2019 is incorporated herein by reference to Exhibit (h)(1) to the Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
		(B)	Exhibit 26 to Fund Servicing Agreement — To Be Filed By Amendment.
	(ii)		Powers of Attorney are incorporated herein by reference to Exhibit (h)(ii) to the Registrant’s Registration Statement on Form N-1A, as filed on July 29, 2024.
	(iii)		Certificate of Secretary dated February 6, 2019 is incorporated herein by reference to Exhibit (h)(vi) to the Registrant’s Registration Statement on Form N-1A, as filed on February 6, 2019.
(i)	(i)		Opinion and Consent of Counsel — To Be Filed By Amendment.
(j)			Consent of Independent Registered Public Accounting Firm — Not Applicable.
(k)			Not applicable.
(l)			Not applicable.
(m)	(i)		Rule 12b-1 Plan dated September 13, 2017 (the “12b-1 Plan”) is incorporated herein by reference to Exhibit (m) to Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on October 2, 2017.
	(ii)		Amended Appendix A to the Rule 12b-1 Plan — To Be Filed By Amendment.
(n)			Not applicable.
(o)			Reserved.
(p)	(i)		Registrant’s Code of Ethics dated March 19, 2019 is incorporated herein by reference to Exhibit (p)(i) to Registrant’s Registration Statement on Form N-1A, as filed on April 26, 2019.
	(ii)		Code of Ethics for Fortuna Funds, LLC — To Be Filed By Amendment.


Name	Address	Position with Underwriter	Position with Registrant
Teresa Cowan	Three Canal Plaza, Suite 100, Portland, ME 04101	President/Manager	None
Chris Lanza	Three Canal Plaza, Suite 100, Portland, ME 04101	Vice President	None
Kate Macchia	Three Canal Plaza, Suite 100, Portland, ME 04101	Vice President	None
Susan L. LaFond	Three Canal Plaza, Suite 100, Portland ME 04101	Vice President and Chief Compliance Officer and Treasurer	None
Kelly B. Whetstone	Three Canal Plaza, Suite 100, Portland, ME 04101	Secretary	None
Weston Sommers	Three Canal Plaza, Suite 100, Portland, ME 04101	Financial and Operations Principal and Chief Financial Officer	None


Records Relating to:			Are located at:
Registrant’s Fund Administrator, Fund Accountant and Transfer Agent			U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, Wisconsin 53202
Registrant’s Custodian			U.S. Bank, National Association 1555 N. Rivercenter Drive, Suite 302 Milwaukee, Wisconsin 53212
Registrant’s Principal Underwriter			[...] [...] [...]
Registrant’s Investment Adviser			Fortuna Funds, LLC 6565 Hillcrest Road, Suite 215 Dallas, Texas 75205


Signature			Title

*/s/ John L. Jacobs			Trustee
John L. Jacobs

*/s/ Koji Felton			Trustee
Koji Felton

*/s/ Pamela H. Conroy			Trustee
Pamela H. Conroy

*/s/ Paul R. Fearday			Trustee and Chairman
Paul R. Fearday

*/s/ Gregory C. Bakken			President and Principal Executive Officer
Gregory C. Bakken

*/s/ Travis G. Babich			Treasurer and Principal Financial Officer
Travis G. Babich

*By: /s/ Chad Fickett Chad Fickett, Attorney-in-Fact Pursuant to Powers of Attorney