Table of Contents

I. Introduction

Under rule 206(4)-6 of the Investment Advisers Act of 1940 (the "Act"), it is a  fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of section 206(4) of the Act for an investment adviser to exercise voting authority with respect to client securities, unless (i) the adviser has adopted and implemented written policies and procedures that are reasonably designed to ensure that the adviser votes proxies in the best interest of its clients, (ii) the adviser describes its proxy voting procedures to its clients and provides copies on request, and (iii) the adviser discloses to clients how they may obtain information on how the adviser voted their proxies.

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II. Policy

It is the policy of Huntington Asset Advisors ("HAA") to vote proxies in the best interest of the shareholders of the Huntington Funds and the Huntington VA Funds (the "Funds").  HAA will employ an independent third party (currently Institutional Shareholder Service ("ISS")) to (i) research all proxies for which HAA has authority to vote (except, as described below, for proxy votes which pertain to the Funds), (ii) to recommend a vote according to the guidelines published by the independent third party and according the these Policies, and (iii) to cast a vote consistent with the recommendation of the independent third party, unless the Special Proxy Voting Committee overrides the recommendation of the independent third party.  Proxy voting matters which pertain to the Funds for which a vote has already been cast by the Board of Trustees of the Funds, will be cast according to the vote of the independent Trustees of the Board of Trustees of the Funds.

The President of HAA will appoint a Proxy Review Committee to monitor the recommendations made and votes cast by the independent third party to assure that votes are consistent with: (i) HAA's fiduciary duty, (ii) the best interest of the shareholders of the Funds, (iii) the guidelines published by the independent third party, and (iv) these Proxy Voting Policies.

HAA may refer, to the Special Proxy Voting Committee, any proxy vote that would be impractical or inappropriate to resolve by following the voting recommendation of the independent third party vote.

III. Committees

1. Proxy Review Committee
   1. The purpose of the Proxy Review Committee is to monitor the recommendations made and votes cast by the independent third party to assure that such votes are consistent with (i) HAA's fiduciary duty, (ii) the best interest of the shareholders of the Funds, (iii) the guidelines published by the independent third party, and (iv) these Proxy Voting Policies.
   2. The Proxy Review Committee will report, to the President of HAA, on a quarterly basis the results of its monitoring activities.  Any votes that appear inconsistent with these Policies will be reported to HAA immediately.
   3. The Proxy Review Committee will provide the Special Proxy Voting Committee with the information it needs for the Committee to determine how to vote a proxy, including information pertaining to any possible conflict of interest.
   4. The President of HAA will appoint the members of the Proxy Review Committee.
   
   
2. Special Proxy Voting Committee
   1. The purpose of the Special Proxy Voting Committee is to consider and determine how to vote on behalf of the Funds with respect to specific votes referred by the Funds' investment adviser, HAA.
   2. The Special Proxy Voting Committee shall be composed exclusively of the independent Trustees of the Board of Trustees of the Funds.
   3. The Special Proxy Voting Committee will conduct its activities according to the Special Proxy Voting Committee Charter.

IV. Conflicts of Interest

HAA will ensure that proxy votes are voted in the Funds' best interest and are not affected by HAA's conflicts of interest.  Proxy votes cast based upon the recommendations of an independent third party will be cast according to that party's pre-determined proxy voting policy and therefore will involve little discretion on the part of HAA.  For proxy votes for which HAA overrides the recommendation of the independent third party, HAA will grant voting authority to the Special Proxy Voting Committee.

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V. Guidelines

The following is a summary of the pre-determined proxy voting guidelines adopted by ISS.  HAA has adopted these guidelines to further the interests of the Funds with respect to proxy voting matters.

1. Operational Matters

   Adjourn Meeting
   Generally vote AGAINST proposals to provide management with the authority to adjourn an annual or special meeting absent compelling reasons to support the proposal.

   Amend Quorum Requirements
   Vote AGAINST proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal.

   Amend Minor Bylaws
   Vote FOR bylaw or charter changes that are of a housekeeping nature (updates or corrections).

   Change Company Name
   Vote FOR proposals to change the corporate name.

   Change Date, Time, or Location of Annual Meeting
   Vote FOR management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable.
   Vote AGAINST shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable.

   Ratifying Auditors
   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
   • Fees for non-audit services are excessive, or
   • There is reason to believe that the independent auditor has rendered an opinion which is neither accurate nor indicative of the company's financial position.
   Vote CASE-BY-CASE on shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services.
   Vote FOR shareholder proposals asking for audit firm rotation, unless the rotation period is so short (less than five years) that it would be unduly burdensome to the company.

   Transact Other Business
   Vote AGAINST proposals to approve other business when it appears as voting item.

   
   
2. Board of Directors

   Voting on Director Nominees in Uncontested Elections
   Votes on director nominees should be made on a CASE-BY-CASE basis, examining the following factors: composition of the board and key board committees, attendance at board meetings, corporate governance provisions and takeover activity, long-term company performance relative to a market index, directors' investment in the company, whether the chairman is also serving as CEO, and whether a retired CEO sits on the board. However, there are some actions by directors that should result in votes being withheld. These instances include directors who:

   • Attend less than 75 percent of the board and committee meetings without a valid excuse
   • Implement or renew a dead-hand or modified dead-hand poison pill
   • Ignore a shareholder proposal that is approved by a majority of the shares outstanding
   • Ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years
   • Failed to act on takeover offers where the majority of the shareholders tendered their shares
   • Are inside directors or affiliated outsiders and sit on the audit, compensation, or nominating committees
   • Are inside directors or affiliated outsiders and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees
   • Are audit committee members and the non-audit fees paid to the auditor are excessive.
   In addition, directors who enacted egregious corporate governance policies or failed to replace management as appropriate would be subject to recommendations to withhold votes.

   Age Limits
   Vote AGAINST shareholder proposals to impose a mandatory retirement age for outside directors.

   Board Size
   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
   Vote AGAINST proposals to classify the board.
   Vote FOR proposals to repeal classified boards and to elect all directors annually.

   Cumulative Voting
   Vote AGAINST proposals to eliminate cumulative voting.
   Vote proposals to restore or permit cumulative voting on a CASE-BY-CASE basis relative to the company's other governance provisions.

   Director and Officer Indemnification and Liability Protection
   Proposals on director and officer indemnification and liability protection should be evaluated on a CASE-BY-CASE basis, using Delaware law as the standard.
   Vote AGAINST proposals to eliminate entirely directors' and officers' liability for monetary damages for violating the duty of care.
   Vote AGAINST indemnification proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness.
   Vote FOR only 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:

   • The director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and
   • Only if the director's legal expenses would be covered.

   Establish/Amend Nominee Qualifications
   Vote CASE-BY-CASE on proposals that establish or amend director qualifications.
   Votes should be based on how reasonable the criteria are and to what degree they may preclude dissident nominees from joining the board.
   Vote AGAINST shareholder proposals requiring two candidates per board seat.

   Filling Vacancies/Removal of Directors
   Vote AGAINST proposals that provide that directors may be removed only for cause.
   Vote FOR proposals to restore shareholder 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 Chairman (Separate Chairman/CEO)
   Vote on a CASE-BY-CASE basis shareholder proposals requiring that the positions of chairman and CEO be held separately. Because some companies have governance structures in place that counterbalance a combined position, the following factors should be taken into account in determining whether the proposal warrants support:

   • Designated lead director appointed from the ranks of the independent board members with clearly delineated duties
   • Majority of independent directors on board
   • All-independent key committees
   • Committee chairpersons nominated by the independent directors
   • CEO performance reviewed annually by a committee of outside directors
   • Established governance guidelines
   • Company performance.

   Majority of Independent Directors/Establishment of Committees
   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's definition of independence.
   Vote FOR shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard.

   Stock Ownership Requirements
   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. The company should determine the appropriate ownership requirement.

   Term Limits
   Vote AGAINST shareholder proposals to limit the tenure of outside directors.

   
   
3. Proxy Contests

   Voting for Director Nominees in Contested Elections
   Votes in a contested election of directors must be evaluated on a CASE-BY-CASE basis, considering the following factors:

   • Long-term financial performance of the target company relative to its industry; management's track record
   • Background to the proxy contest
   • Qualifications of director nominees (both slates)
   • Evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met; and stock ownership positions.

   Reimbursing Proxy Solicitation Expenses
   Voting to reimburse proxy solicitation expenses should be analyzed on a CASE-BY-CASE basis. When voting in favor of the dissidents, we will also vote for reimbursing proxy solicitation expenses.

   Confidential Voting
   Vote FOR shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election, as long as the proposal includes a provision for proxy contests as follows: In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents will not agree, the confidential voting policy is waived.
   Vote FOR management proposals to adopt confidential voting.

   
   
4. Anti-takeover Defenses and Voting Related Issues

   Advance Notice Requirements for Shareholder Proposals/Nominations
   Votes on advance notice proposals are determined on a CASE-BY-CASE basis, giving support to those proposals which allow shareholders to submit proposals as close to the meeting date as reasonably possible and within the broadest window possible.

   Amend Bylaws without Shareholder Consent
   Vote AGAINST proposals giving the board exclusive authority to amend the bylaws.
   Vote FOR proposals giving the board the ability to amend the bylaws in addition to shareholders.

   Poison Pills
   Vote FOR shareholder proposals that ask a company to submit its poison pill for shareholder ratification.
   Review on a CASE-BY-CASE basis shareholder proposals to redeem a company's poison pill.
   Review on a CASE-BY-CASE basis management proposals to ratify a poison pill.

   Shareholder Ability to Act by Written Consent
   Vote AGAINST proposals to restrict or prohibit shareholder ability to take action by written consent.
   Vote FOR proposals to allow or make easier shareholder action by written consent.

   Shareholder Ability to Call Special Meetings
   Vote AGAINST proposals to restrict or prohibit shareholder ability to call special meetings.
   Vote FOR proposals that remove restrictions on the right of shareholders to act independently of management.

   Supermajority Vote Requirements
   Vote AGAINST proposals to require a supermajority shareholder vote.
   Vote FOR proposals to lower supermajority vote requirements.

   
   
5. Mergers and Corporate Restructurings

   Appraisal Rights
   Vote FOR proposals to restore, or provide shareholders with, rights of appraisal.

   Asset Purchases
   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
   • Non-completion risk.

   Asset Sales
   Votes on asset sales should be determined on a CASE-BY-CASE basis, 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
   • Conflicts of interest.

   Bundled Proposals
   Review on a CASE-BY-CASE basis bundled or "conditioned" 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
   Votes on proposals regarding conversion of securities are determined on a CASE-BY-CASE basis. 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
   Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a CASE-BY-CASE basis, taking into consideration the following:

   • Dilution to existing shareholders' position
   • Terms of the offer
   • Financial issues
   • Management's efforts to pursue other alternatives
   • Control issues
   • Conflicts of interest.
   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
   Votes on proposals regarding the formation of a holding company should be determined on a CASE-BY-CASE basis, taking into consideration the following:

   • The reasons for the change
   • Any financial or tax benefits
   • Regulatory benefits
   • Increases in capital structure
   • Changes to the articles of incorporation or bylaws of the company.
   Absent compelling financial reasons to recommend 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 as calculated by the ISS Capital Structure model
   • Adverse changes in shareholder rights

   Going Private Transactions (LBOs and Minority Squeeze outs)
   Vote going private transactions on a CASE-BY-CASE basis, 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.

   Joint Ventures
   Votes 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
   Votes on liquidations should be made on a CASE-BY-CASE basis after reviewing 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/ Issuance of Shares to Facilitate Merger or Acquisition
   Votes on mergers and acquisitions should be considered on a CASE-BY-CASE basis, determining whether the transaction enhances shareholder value by giving consideration to the following:

   • Prospects of the combined company, anticipated financial and operating benefits
   • Offer price
   • Fairness opinion
   • How the deal was negotiated
   • Changes in corporate governance
   • Change in the capital structure
   • Conflicts of interest.

   Private Placements/Warrants/Convertible Debentures
   Votes on proposals regarding private placements should be determined on a CASE-BY-CASE basis. When evaluating these proposals the investor should review: dilution to existing shareholders' position, terms of the offer, financial issues, management's efforts to pursue other alternatives, control issues, and conflicts of interest.
   Vote FOR the private placement if it is expected that the company will file for bankruptcy if the transaction is not approved.

   Spin offs
   Votes on spin offs should be considered on a CASE-BY-CASE basis depending on:

   • Tax and regulatory advantages
   • Planned use of the sale proceeds
   • Valuation of spin off
   • Fairness opinion
   • Benefits to the parent company
   • Conflicts of interest
   • Managerial incentives
   • Corporate governance changes
   • Changes in the capital structure.

   Value Maximization Proposals
   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, strategic plan in place for improving value, likelihood of receiving reasonable value in a sale or dissolution, and whether company is actively exploring its strategic options, including retaining a financial advisor.

   
   
6. State of Incorporation

   Control Share Acquisition Provisions
   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 Cash out Provisions
   Vote FOR proposals to opt out of control share cash out statutes.

   Disgorgement Provisions
   Vote FOR proposals to opt out of state disgorgement provisions.

   Fair Price Provisions
   Vote proposals to adopt fair price provisions on a CASE-BY-CASE basis, 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
   Vote FOR proposals to opt out of state freeze out provisions.

   Greenmail
   Vote FOR proposals to adopt anti-greenmail charter of bylaw amendments or otherwise restrict a company's ability to make greenmail payments.
   Review on a CASE-BY-CASE basis anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

   Reincorporation Proposals
   Proposals to change a company's state of incorporation should be evaluated on a CASE-BY-CASE basis, giving consideration to both financial and corporate governance concerns, including the reasons for reincorporating, a comparison of the governance provisions, and a comparison of the jurisdictional laws.
   Vote FOR reincorporation when the economic factors outweigh any neutral or negative governance changes.

   Stakeholder Provisions
   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 Anti-takeover Statutes
   Review on a CASE-BY-CASE basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freeze out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti-greenmail provisions, and disgorgement provisions).

   
   
7. Capital Structure

   Adjustments to Par Value of Common Stock
   Vote FOR management proposals to reduce the par value of common stock.

   Common Stock Authorization
   Votes on proposals to increase the number of shares of common stock authorized for issuance are determined on a CASE-BY-CASE basis using a model developed by ISS.
   Vote AGAINST proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights.
   Vote FOR proposals to approve increases beyond the allowable increase when a company's shares are in danger of being delisted or if a company's ability to continue to operate as a going concern is uncertain.

   Dual-class Stock
   Vote AGAINST proposals to create a new class of common stock with superior voting rights.
   Vote FOR proposals to create a new class of nonvoting or sub-voting common stock if:

   • It is intended for financing purposes with minimal or no dilution to current Shareholders
   • It is not designed to preserve the voting power of an insider or significant shareholder

   Issue Stock for Use with Rights Plan
   Vote AGAINST proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill).

   Preemptive Rights
   Review on a CASE-BY-CASE basis shareholder proposals that seek preemptive rights. In evaluating proposals on preemptive rights, consider the size of a company, the characteristics of its shareholder base, and the liquidity of the stock.

   Preferred Stock
   Vote AGAINST proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights ("blank check" preferred stock).
   Vote FOR proposals to create "declawed" blank check preferred stock (stock that cannot be used as a takeover defense).
   Vote FOR proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable.
   Vote AGAINST proposals to increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose.
   Vote CASE-BY-CASE on proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company's industry and performance in terms of shareholder returns.

   Recapitalization
   Votes 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
   Vote FOR management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced.
   Vote FOR management proposals to implement a reverse stock split to avoid delisting.
   Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a CASE-BY-CASE basis using a model developed by ISS.

   Share Repurchase Programs
   Vote FOR management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.

   Stock Distributions: Splits and Dividends
   Vote FOR management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance as determined using a model developed by ISS.

   Tracking Stock
   Votes on the creation of tracking stock are determined on a CASE-BY-CASE basis, 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 other alternatives such as spin off.

   
   
8. Executive and Director Compensation

   Votes with respect to compensation plans should be determined on a CASE-BY-CASE basis. ISS methodology for reviewing compensation plans primarily focuses on the transfer of shareholder wealth (the dollar cost of pay plans to shareholders instead of simply focusing on voting power dilution). Using the expanded compensation data disclosed under the SEC's rules, ISS will value every award type. ISS will include in its analyses an estimated dollar cost for the proposed plan and all continuing plans. This cost, dilution to shareholders' equity, will also be expressed as a percentage figure for the transfer of shareholder wealth, and will be considered long with dilution to voting power. Once ISS determines the estimated cost of the plan, we compare it to a company-specific dilution cap.

   The ISS model determines a company-specific allowable pool of shareholder wealth that may be transferred from the company to executives, adjusted for:

   • Long-term corporate performance (on an absolute basis and relative to a standard industry peer group and an appropriate market index),
   • Cash compensation, and
   • Categorization of the company as emerging, growth, or mature.
   These adjustments are pegged to market capitalization. ISS will continue to examine other features of proposed pay plans such as administration, payment terms, plan duration, and whether the administering committee is permitted to reprice underwater stock options without shareholder approval.

   Director Compensation
   Votes on compensation plans for directors are determined on a CASE-BY-CASE basis, using a proprietary, quantitative model developed by ISS.

   Stock Plans in Lieu of Cash
   Votes for plans which provide participants with the option of taking all or a portion of their cash compensation in the form of stock are determined on a CASE-BY-CASE basis.
   Vote FOR plans which provide a dollar-for-dollar cash for stock exchange.
   Votes for plans which do not provide a dollar-for-dollar cash for stock exchange should be determined on a CASE-BY-CASE basis using a proprietary, quantitative model developed by ISS.

   Director Retirement Plans
   Vote AGAINST retirement plans for non-employee directors.
   Vote FOR shareholder proposals to eliminate retirement plans for non-employee directors.

   Management Proposals Seeking Approval to Reprice Options
   Votes on management proposals seeking approval to reprice options are evaluated on a CASE-BY-CASE basis giving consideration to the following:

   • Historic trading patterns
   • Rationale for the repricing
   • Value-for-value exchange
   • Option vesting
   • Term of the option
   • Exercise price
   • Participation.

   Employee Stock Purchase Plans
   Votes on employee stock purchase plans should be determined on a CASE-BY-CASE basis.
   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
   • Potential voting power dilution (VPD) is ten percent or less.
   Vote AGAINST employee stock purchase plans where any of the following apply:
   • Purchase price is less than 85 percent of fair market value, or
   • Offering period is greater than 27 months, or
   • VPD is greater than ten percent

   Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation Proposals)
   Vote FOR proposals that simply amend shareholder-approved compensation plans to include administrative features or place a cap on the annual grants any one participant may receive to comply with the provisions of Section 162(m).
   Vote FOR proposals to add performance goals to existing compensation plans to comply with the provisions of Section 162(m) unless they are clearly inappropriate.
   Votes to amend existing plans to increase shares reserved and to qualify for favorable tax treatment under the provisions of Section 162(m) should be considered on a CASE-BY-CASE basis using a proprietary, quantitative model developed by ISS.
   Generally vote FOR cash or cash and stock bonus plans that are submitted to shareholders for the purpose of exempting compensation from taxes under the provisions of Section 162(m) if no increase in shares is requested.

   Employee Stock Ownership Plans (ESOPs)
   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.)

   401(k) Employee Benefit Plans
   Vote FOR proposals to implement a 401(k) savings plan for employees.

   Shareholder Proposals Regarding Executive and Director Pay
   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.
   Vote AGAINST shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.
   Vote AGAINST shareholder proposals requiring director fees be paid in stock only.
   Vote FOR shareholder proposals to put option repricings to a shareholder vote.
   Vote on a CASE-BY-CASE basis for all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook.

   Option Expensing
   Generally vote FOR shareholder proposals asking the company to expense stock options, unless the company has already publicly committed to expensing options by a specific date.

   Performance-Based Stock Options
   Vote CASE-BY-CASE on shareholder proposals advocating the use of performance based stock options (indexed, premium-priced, and performance-vested options), taking into account:

   • Whether the proposal mandates that all awards be performance-based
   • Whether the proposal extends beyond executive awards to those of lower-ranking employees
   • Whether the company's stock-based compensation plans meet ISS's SVT criteria and do not violate our repricing guidelines

   Golden and Tin Parachutes
   Vote FOR shareholder proposals to require golden and tin parachutes (executive severance agreements) to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into employment contracts.
   Vote on a CASE-BY-CASE basis on proposals to ratify or cancel golden or tin parachutes. An acceptable parachute should include the following:

   • The parachute should be less attractive than an ongoing employment opportunity with the firm
   • The triggering mechanism should be beyond the control of management
   • The amount should not exceed three times base salary plus guaranteed benefits
   
   
9. Social and Environmental Issues
   
   
   1. Consumer Issues and Public Safety

      Animal Rights
      Vote CASE-BY-CASE on proposals to phase out the use of animals in product testing, taking into account:

      • The nature of the product and the degree that animal testing is necessary or federally mandated (such as medical products)
      • The availability and feasibility of alternatives to animal testing to ensure product safety, and
      • The degree that competitors are using animal-free testing.
      Generally vote FOR proposals seeking a report on the company's animal welfare standards unless:
      • The company has already published a set of animal welfare standards and monitors compliance
      • The company's standards are comparable to or better than those of peer firms, and
      • There are no serious controversies surrounding the company's treatment of animals

      Drug Pricing
      Vote CASE-BY-CASE on proposals asking the company to implement price restraints on pharmaceutical products, taking into account:

      • Whether the proposal focuses on a specific drug and region
      • Whether the economic benefits of providing subsidized drugs (e.g., public goodwill) outweigh the costs in terms of reduced profits, lower R&D spending, and harm to competitiveness
      • The extent that reduced prices can be offset through the company's marketing budget without affecting R&D spending
      • Whether the company already limits price increases of its products
      • Whether the company already contributes life-saving pharmaceuticals to the needy and Third World countries
      • The extent that peer companies implement price restraints

      Genetically Modified Foods
      Vote CASE-BY-CASE on proposals to label genetically modified (GMO) ingredients voluntarily in the company's products, or alternatively to provide interim labeling and eventually eliminate GMOs, taking into account:

      • The costs and feasibility of labeling and/or phasing out
      • The nature of the company's business and the proportion of it affected by the Proposal
      • The proportion of company sales in markets requiring labeling or GMO-free products
      • The extent that peer companies label or have eliminated GMOs
      • Competitive benefits, such as expected increases in consumer demand for the company's products
      • The risks of misleading consumers without federally mandated, standardized labeling
      • Alternatives to labeling employed by the company.
      
      Vote FOR proposals asking for a report on the feasibility of labeling products containing GMOs.
      Vote AGAINST proposals to completely phase out GMOs from the company's products. Such resolutions presuppose that there are proven health risks to GMOs—an issue better left to federal regulators—which outweigh the economic benefits derived from biotechnology.
      Vote CASE-BY-CASE on reports outlining the steps necessary to eliminate GMOs from the company's products, taking into account:
      • The relevance of the proposal in terms of the company's business and the proportion of it affected by the resolution
      • The extent that peer companies have eliminated GMOs
      • The extent that the report would clarify whether it is viable for the company to eliminate GMOs from its products
      • Whether the proposal is limited to a feasibility study or additionally seeks an action plan and timeframe actually to phase out GMOs
      • The percentage of revenue derived from international operations, particularly in Europe, where GMOs are more regulated.
      
      Vote AGAINST proposals seeking a report on the health and environmental effects of GMOs and the company's strategy for phasing out GMOs in the event they become illegal in the United States. Studies of this sort are better undertaken by regulators and the scientific community. If made illegal in the United States, genetically modified crops would automatically be recalled and phased out.

      Handguns
      Generally vote AGAINST requests for reports on a company's policies aimed at curtailing gun violence in the United States unless the report is confined to product safety information. Criminal misuse of firearms is beyond company control and instead falls within the purview of law enforcement agencies.

      Predatory Lending
      Vote CASE-BY CASE on requests for reports on the company's procedures for preventing predatory lending, including the establishment of a board committee for oversight, taking into account:

      • Whether the company has adequately disclosed mechanisms in place to prevent abusive lending practices
      • Whether the company has adequately disclosed the financial risks of its sub-prime business
      • Whether the company has been subject to violations of lending laws or serious lending controversies
      • Peer companies' policies to prevent abusive lending practices.

      Tobacco
      Most tobacco-related proposals should be evaluated on a CASE-BY-CASE basis, taking into account the following factors:
      Second-hand smoke:

      • Whether the company complies with all local ordinances and regulations
      • The degree that voluntary restrictions beyond those mandated by law might hurt the company's competitiveness
      • The risk of any health-related liabilities.
      Advertising to youth:
      • Whether the company complies with federal, state, and local laws on the marketing of tobacco or if it has been fined for violations
      • Whether the company has gone as far as peers in restricting advertising
      • Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco to youth
      • Whether restrictions on marketing to youth extend to foreign countries
      Cease production of tobacco-related products or avoid selling products to tobacco companies:
      • The percentage of the company's business affected
      • The economic loss of eliminating the business versus any potential tobacco-related liabilities.
      Spin off tobacco-related businesses:
      • The percentage of the company's business affected
      • The feasibility of a spin off
      • Potential future liabilities related to the company's tobacco business.
      
      Stronger product warnings:
      Vote AGAINST proposals seeking stronger product warnings. Such decisions are better left to public health authorities.
      Investment in tobacco stocks:
      Vote AGAINST proposals prohibiting investment in tobacco equities. Such decisions are better left to portfolio managers.
      
      
   2. Environment and Energy

      Arctic National Wildlife Refuge
      Vote CASE-BY-CASE on reports outlining potential environmental damage from drilling in the Arctic National Wildlife Refuge (ANWR), taking into account:

      • Whether there are publicly available environmental impact reports;
      • Whether the company has a poor environmental track record, such as violations of federal and state regulations or accidental spills; and
      • The current status of legislation regarding drilling in ANWR.

      CERES Principles
      Vote CASE-BY-CASE on proposals to adopt the CERES Principles, taking into account:

      • The company's current environmental disclosure beyond legal requirements, including environmental health and safety (EHS) audits and reports that may duplicate CERES
      • The company's environmental performance record, including violations of federal and state regulations, level of toxic emissions, and accidental spills
      • Environmentally conscious practices of peer companies, including endorsement of CERES
      • Costs of membership and implementation.

      Environmental Reports
      Generally vote FOR requests for reports disclosing the company's environmental policies unless it already has well-documented environmental management systems that are available to the public.

      Global Warming
      Generally vote FOR reports on the level of greenhouse gas emissions from the company's operations and products, unless the report is duplicative of the company's current environmental disclosure and reporting or is not integral to the company's line of business. However, additional reporting may be warranted if:

      • The company's level of disclosure lags that of its competitors, or
      • The company has a poor environmental track record, such as violations of federal and state regulations.

      Recycling
      Vote CASE-BY-CASE on proposals to adopt a comprehensive recycling strategy, taking into account:

      • The nature of the company's business and the percentage affected
      • The extent that peer companies are recycling
      • The timetable prescribed by the proposal
      • The costs and methods of implementation
      • Whether the company has a poor environmental track record, such as violations of federal and state regulations.

      Renewable Energy
      Vote CASE-BY-CASE on proposals to invest in renewable energy sources, taking into account:

      • The nature of the company's business and the percentage affected
      • The extent that peer companies are switching from fossil fuels to cleaner sources
      • The timetable and specific action prescribed by the proposal
      • The costs of implementation
      • The company's initiatives to address climate change
      Generally vote FOR requests for reports on the feasibility of developing renewable energy sources, unless the report is duplicative of the company's current environmental disclosure and reporting or is not integral to the company's line of business.
      
      
   3. General Corporate Issues

      Link Executive Compensation to Social Performance
      Vote CASE-BY-CASE on proposals to review ways of linking executive compensation to social factors, such as corporate downsizings, customer or employee satisfaction, community involvement, human rights, environmental performance, predatory lending, and executive/employee pay disparities. Such resolutions should be evaluated in the context of:

      • The relevance of the issue to be linked to pay
      • The degree that social performance is already included in the company's pay structure and disclosed
      • The degree that social performance is used by peer companies in setting pay
      • Violations or complaints filed against the company relating to the particular social performance measure
      • Artificial limits sought by the proposal, such as freezing or capping executive pay
      • Independence of the compensation committee
      • Current company pay levels.

      Charitable/Political Contributions
      Generally vote AGAINST proposals asking the company to affirm political nonpartisanship in the workplace so long as:

      • The company is in compliance with laws governing corporate political activities, and
      • The company has procedures in place to ensure that employee contributions to company-sponsored political action committees (PACs) are strictly voluntary and not coercive.
      
      Vote AGAINST proposals to report or publish in newspapers the company's political contributions. Federal and state laws restrict the amount of corporate contributions and include reporting requirements.
      Vote AGAINST proposals disallowing the company from making political contributions. Businesses are affected by legislation at the federal, state, and local level and barring contributions can put the company at a competitive disadvantage.
      Vote AGAINST proposals restricting the 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 contributions are in the best interests of the company.
      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.
      
      
   4. Labor Standards and Human Rights

      China Principles
      Vote AGAINST proposals to implement the China Principles unless:

      • There are serious controversies surrounding the company's China operations, and
      • The company does not have a code of conduct with standards similar to those promulgated by the International Labor Organization (ILO).

      Country-specific human rights reports
      Vote CASE-BY-CASE on requests for reports detailing the company's operations in a particular country and steps to protect human rights, based on:

      • The nature and amount of company business in that country
      • The company's workplace code of conduct
      • Proprietary and confidential information involved
      • Company compliance with U.S. regulations on investing in the country
      • Level of peer company involvement in the country.

      International Codes of Conduct/Vendor Standards
      Vote CASE-BY-CASE on proposals to implement certain human rights standards at company facilities or those of its suppliers and to commit to outside, independent monitoring. In evaluating these proposals, the following should be considered:

      • The company's current workplace code of conduct or adherence to other global standards and the degree they meet the standards promulgated by the proponent
      • Agreements with foreign suppliers to meet certain workplace standards
      • Whether company and vendor facilities are monitored and how
      • Company participation in fair labor organizations
      • Type of business
      • Proportion of business conducted overseas
      • Countries of operation with known human rights abuses
      • Whether the company has been recently involved in significant labor and human rights controversies or violations
      • Peer company standards and practices
      • Union presence in company's international factories
      Generally vote FOR reports outlining vendor standards compliance unless any of the following apply:
      • The company does not operate in countries with significant human rights violations
      • The company has no recent human rights controversies or violations, or
      • The company already publicly discloses information on its vendor standards compliance.

      MacBride Principles
      Vote CASE-BY-CASE on proposals to endorse or increase activity on the MacBride Principles, taking into account:

      • Company compliance with or violations of the Fair Employment Act of 1989
      • Company anti-discrimination policies that already exceed the legal requirements
      • The cost and feasibility of adopting all nine principles
      • The cost of duplicating efforts to follow two sets of standards (Fair Employment and the MacBride Principles)
      • The potential for charges of reverse discrimination
      • The potential that any company sales or contracts in the rest of the United Kingdom could be negatively impacted
      • The level of the company's investment in Northern Ireland
      • The number of company employees in Northern Ireland
      • The degree that industry peers have adopted the MacBride Principles
      • Applicable state and municipal laws that limit contracts with companies that have not adopted the MacBride Principles.
      
      
   5. Military Business

      Foreign Military Sales/Offsets
      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.

      Landmines and Cluster Bombs
      Vote CASE-BY-CASE on proposals asking a company to renounce future involvement in antipersonnel landmine production, taking into account:

      • Whether the company has in the past manufactured landmine components
      • Whether the company's peers have renounced future production
      
      Vote CASE-BY-CASE on proposals asking a company to renounce future involvement in cluster bomb production, taking into account:
      • What weapons classifications the proponent views as cluster bombs
      • Whether the company currently or in the past has manufactured cluster bombs or their components
      • The percentage of revenue derived from cluster bomb manufacture
      • Whether the company's peers have renounced future production

      Nuclear Weapons
      Vote AGAINST proposals asking a company to cease production of nuclear weapons components and delivery systems, including disengaging from current and proposed contracts. Components and delivery systems serve multiple military and non-military uses, and withdrawal from these contracts could have a negative impact on the company's business.

      Space-Based Weaponization
      Generally vote FOR reports on a company's involvement in space-based weaponization unless:

      • The information is already publicly available or
      • The disclosures sought could compromise proprietary information.
      
      
   6. Workplace Diversity

      Board Diversity
      Generally vote FOR reports on the company's efforts to diversify the board, unless:

      • The board composition is reasonably inclusive in relation to companies of similar size and business or
      • The board already reports on its nominating procedures and diversity initiatives.
      Vote CASE-BY-CASE on proposals asking the company to increase the representation of women and minorities on the board, taking into account:
      • The degree of board diversity
      • Comparison with peer companies
      • Established process for improving board diversity
      • Existence of independent nominating committee
      • Use of outside search firm
      • History of EEO violations.

      Equal Employment Opportunity (EEO)
      Generally vote FOR reports outlining the company's affirmative action initiatives unless all of the following apply:

      • The company has well-documented equal opportunity programs
      • The company already publicly reports on its company-wide affirmative initiatives and provides data on its workforce diversity, and
      • The company has no recent EEO-related violations or litigation.
      Vote AGAINST proposals seeking information on the diversity efforts of suppliers and service providers, which can pose a significant cost and administration burden on the company.

      Glass Ceiling
      Generally vote FOR reports outlining the company's progress towards the Glass Ceiling Commission's business recommendations, unless:

      • The composition of senior management and the board is fairly inclusive
      • The company has well-documented programs addressing diversity initiatives and leadership development
      • The company already issues public reports on its company-wide affirmative initiatives and provides data on its workforce diversity, and
      • The company has had no recent, significant EEO-related violations or litigation

      Sexual Orientation
      Vote CASE-BY-CASE on proposals to amend the company's EEO policy to include sexual orientation, taking into account:

      • Whether the company's EEO policy is already in compliance with federal, state and local laws
      • Whether the company has faced significant controversies or litigation regarding unfair treatment of gay and lesbian employees
      • The industry norm for including sexual orientation in EEO statements
      • Existing policies in place to prevent workplace discrimination based on sexual orientation
      Vote AGAINST proposals to extend company benefits to or eliminate benefits from domestic partners. Benefit decisions should be left to the discretion of the company.
      
      

10. Mutual Fund Proxies

    Election of Directors
    Vote to elect directors on a CASE-BY-CASE basis, considering the following factors:

    • Board structure
    • Director independence and qualifications
    • Attendance at board and committee meetings.
    Votes should be withheld from directors who:
    • Attend less than 75 percent of the board and committee meetings without a valid excuse for the absences. Valid reasons include illness or absence due to company business. Participation via telephone is acceptable. In addition, if the director missed only one meeting or one day's meetings, votes should not be withheld even if such absence dropped the director's attendance below 75 percent.
    • Ignore a shareholder proposal that is approved by a majority of shares outstanding
    • Ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years
    • Are interested directors and sit on the audit or nominating committee, or
    • Are interested directors and the full board serves as the audit or nominating committee or the company does not have one of these committees.

    Convert Closed-end Fund to Open-end Fund
    Vote conversion proposals on a CASE-BY-CASE basis, 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
    • Past shareholder activism, board activity
    • Votes on related proposals.

    Proxy Contests
    Votes on proxy contests should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Past performance relative to its peers
    • Market in which 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
    • Evidence of management entrenchment

    Investment Advisory Agreements
    Votes on investment advisory agreements should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Proposed and current fee schedules
    • Fund category/investment objective
    • Performance benchmarks
    • Share price performance compared to peers
    • Resulting fees relative to peers
    • Assignments (where the advisor undergoes a change of control).

    Approve New Classes or Series of Shares
    Vote FOR the establishment of new classes or series of shares.

    Preferred Stock Proposals
    Votes on the authorization for or increase in preferred shares should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Stated specific financing purpose
    • Possible dilution for common shares
    • Whether the shares can be used for anti-takeover purposes.

    Investment Company Act of 1940 Act Policies
    Votes on the Investment Company Act of 1940 Act policies should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Potential competitiveness
    • Regulatory developments
    • Current and potential returns
    • 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.

    Change Fundamental Restriction to Non-fundamental Restriction
    Proposals to change a fundamental restriction to a non-fundamental restriction should be evaluated on a CASE-BY-CASE basis, considering the following factors:

    • The fund's target investments
    • The reasons given by the fund for the change
    • The projected impact of the change on the portfolio.

    Change Fundamental Investment Objective to Non fundamental
    Vote AGAINST proposals to change a fund's fundamental investment objective to Non-fundamental.

    Name Change Proposals
    Votes on name change proposals should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Political/economic changes in the target market
    • Consolidation in the target market
    • Current asset composition

    Change in Fund's Sub-classification
    Votes on changes in a fund's sub-classification should be determined on a CASE-BY-CASE basis, considering the following factors:

    • Potential competitiveness
    • Current and potential returns
    • Risk of concentration
    • Consolidation in target industry

    Disposition of Assets/Termination/Liquidation
    Vote these proposals on a CASE-BY-CASE basis, considering the following factors:

    • Strategies employed to salvage the company
    • The fund's past performance
    • Terms of the liquidation.

    Changes to the Charter Document
    Votes on changes to the charter document should be determined on a CASE-BY-CASE basis, considering the following factors:

    • The degree of change implied by the proposal
    • The efficiencies that could result
    • The state of incorporation
    • 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
    • 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 sub-advisory arrangements
    • Removal of shareholder approval requirement to change the domicile of the fund

    Change the Fund's Domicile
    Vote reincorporations on a CASE-BY-CASE basis, considering the following factors:

    • Regulations of both states
    • Required fundamental policies of both states
    • Increased flexibility available.

    Authorize the Board to Hire and Terminate Sub-advisors Without Shareholder Approval
    Vote AGAINST proposals authorizing the board to hire/terminate sub-advisors without shareholder approval.

    Distribution Agreements
    Vote these proposals on a CASE-BY-CASE basis, 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
    • Terms of the agreement.

    Master-Feeder Structure Vote FOR the establishment of a master-feeder structure.

    Mergers
    Vote merger proposals on a CASE-BY-CASE basis, considering the following factors:

    • Resulting fee structure
    • Performance of both funds
    • Continuity of management personnel
    • Changes in corporate governance and their impact on shareholder rights.

    Shareholder Proposals to Establish Director Ownership Requirement
    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. While ISS favors stock ownership on the part of directors, the company should determine the appropriate ownership requirement.

    Shareholder Proposals to Reimburse Proxy Solicitation Expenses
    Voting to reimburse proxy solicitation expenses should be analyzed on a CASE-BY-CASE basis. In cases where ISS recommends in favor of the dissidents, we also recommend voting for reimbursing proxy solicitation expenses.

    Shareholder Proposals to Terminate Investment Advisor
    Vote to terminate the investment advisor on a CASE-BY-CASE basis, considering the following factors:

    • Performance of the fund's NAV
    • The fund's history of shareholder relations
    • The performance of other funds under the advisor's management.

VI. Recordkeeping

In accordance with Rule 204-2, as amended, HAA must retain (i) its proxy voting policies and procedures; (ii) proxy statements received regarding Fund securities; (iii) records of votes on behalf of the Funds; (iv) records of Fund requests for proxy voting information, and (v) any documents prepared by HAA that were material to making a decision how to vote, or that memorialized the basis for the decision. HAA may rely on proxy statements filed on the SEC's EDGAR system (instead of keeping its own copies), and may rely on proxy statements and records of its votes cast that are maintained with an independent third party such as ISS, provided that HAA obtains an undertaking from the independent third party to provide a copy of the documents promptly upon request.

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