Proxy Voting Guidelines - Corporate Governance

BOARD DIRECTORS

Director Compensation

We oppose resolutions that award outside directors with total compensation greater than $100,000 per annum.

Directors: Consulting Fees

We vote on a case by case basis on resolutions regarding the payment of directors for their consulting services. We would only support such payments if they are clearly disclosed.

Directors: Independence

We support resolutions that call for a majority of board members to be independent of management.

Directors: Independence on Key Committees

We support resolutions that call for a majority of independent directors and/or all-independent representation on the compensation and nominating committees of the board.

Directors: Independent Chair

We support resolutions that call for the board chair to be an independent director.

Directors: Independent Lead Director

We support resolutions that call for an independent “lead director” to act as a formal leader for independent directors.

Directors: Limit Number of Directorships

We generally support resolutions that ask the board not to nominate directors who already have too many board positions at other companies.

Director Pension Plans

We support resolutions that seek to eliminate pension plans for company directors.

Directors: Term Limits

We generally support resolutions that call for limits on the tenure of directors.

Directors: Retirement

We generally oppose resolutions that call for mandatory retirement ages for directors.

Directors: Separate Chair and CEO

We support resolutions that seek the separation of the roles of board chair and chief executive officer.

Director Stock Ownership

Directors should own stock in the company but we are against requiring directors to purchase stock as this could exclude individuals who cannot afford it.

CAPITAL STRUCTURE, CLASSES OF STOCK AND RE-CAPITALIZATION

Change State of Incorporation

We will evaluate any change in the state of incorporation on a case-by-case basis in the interests of all stakeholders of the corporation.

COMPENSATION PLANS

CEO Compensation

We vote against plans that awards CEOs with total compensation exceeding $5 million per annum including stock options.

Stock Option Plans

We vote on the approval of stock option plans on a case-by-case basis focusing primarily on the dilutive effect of the plan on shareholders’ existing holdings. We also weigh whether the plan provides incentives that are effective and fairly distributed to employees beyond just top management.

Stock Options Plans: Repricing Underwater Options

We support resolutions and binding by-law amendments asking companies to seek shareholder approval for repricing underwater stock options.

Stock Options Plans: Based on Performance

We generally support resolutions that request that all future stock options grants to senior executives be performance-based. (Performance-based stock options are options with an exercise price either linked to an industry average or significantly above the current market price of the stock at the date of the grant.)

Eliminate Bonuses and Stock Options

We generally oppose resolutions to eliminate immediately all executive bonuses and, upon termination of existing executive award programs, discontinue awards of stock options, stock appreciation rights and other awards.

Executive Pay: Tie to Dividends

We oppose resolutions that ask companies to tie any executive compensation to the amount of dividends paid to shareholders.

Executive Pay Cap

We generally support resolutions that seek to cap executive pay at a multiple of the pay of the lowest paid employee.

Executive Pay: Disclosure

We support resolutions that ask for the names and titles of executives that are entitled to receive more than $250,000 in annual base pay to be disclosed in future proxy statements.

Executive Pay: Link to Social Performance

We support resolutions that seek to link executive pay to the company’s social performance, including ¨ but not limited to - respect for human rights, protection of environment, consumer satisfaction, community citizenship, equal employment opportunity, and effective implementation of contractor workplace standards.

Executive Pay: Freeze During Downsizing

We support resolutions that ask companies to freeze the pay of corporate executives when they eliminate significant numbers of jobs.

Severance Packages: Disclosure

We support resolutions that seek shareholder approval of all severance packages, or “golden parachutes,” to top executives.

Severance Packages: Limits

We generally support resolutions that seek to restrict or eliminate “golden parachute” severance packages to top executives.

Management Incentive Plans

We evaluate management incentive plans on a case-by-case basis. We favor plans that: include reasonable and clearly articulated performance criteria; include broad-based inclusion of employees outside of top management; and meet the long-term interests of shareholders.

CORPORATE GOVERNANCE: GENERAL

Adjournment of Special Meeting

We vote on the issue of adjourning a special meeting on case-by-case basis.

Annual Election of Directors

We generally support annual election of directors.

Classified Boards

We generally oppose classified or staggered boards.

Confidential Voting

We support confidentiality of proxy voting.

Cumulative Voting

We generally oppose resolutions and bylaw amendments that seek to establish cumulative voting practices for board elections. However, we may support such a resolution where a board appears unduly controlled by management. We may support such a resolution if it is also supported by a union or an Employee Stock Ownership Program (ESOP).

Indemnification of Management or Directors

We oppose excessive indemnification of management or directors.

Proxy Advice

We generally support resolutions asking the Board of Directors to hire a proxy advisory firm, chosen by shareowner vote, to make proxy voting recommendation to all shareholders free of charge for one year.

Ratification of Independent Auditors

We support the ratification or approval of independent auditors.

Separate Classes of Stock

We generally oppose the issuance of multiple classes of stock with unequal voting rights.

Super-majority Voting

We generally oppose this but may support those proposals that apply to a change of control.

TAKEOVER DEFENSE AND RELATED ACTIONS

Mergers and Acquisitions

We evaluate bids by one company for another on a case-by-case basis.

Anti-greenmail Proposals

We generally support anti-greenmail provisions because greenmail discriminates against other shareholders.

Increase Authorized Common Stock

We will support the authorization of additional common stock if the company gives a satisfactory explanation of its plans in the proxy statement, and if the number of new shares issued does not exceed four times the number of existing authorized shares.

Poison Pills: Submit to Vote

We support shareholder resolutions and bylaw amendments asking companies to put their poison pills to a shareholder vote.

Poison Pills: Redeem

We support shareholder resolutions and bylaw amendments asking companies to redeem their poison pills.

Special Meetings

We support resolutions to restore the rights of shareholders to call special meetings and/or act by written consent. We oppose resolutions to limit or revoke these shareholder rights.