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Proxy Voting Guidelines

The proxy voting guidelines below summarize Saturna Capital's positions on various issues of concern to investors, and give a general indication of how portfolio securities held in advisory accounts will be voted on proposals dealing with particular issues.

The proxy voting guidelines are just that — guidelines. The guidelines are not exhaustive and do not include all potential voting issues. Because proxy issues and the circumstances of individual companies are so varied, there may be instances when the adviser may not vote in strict adherence to these guidelines. Regardless of these guidelines, the adviser will always attempt to vote consistent with specific investment objectives and policies of the account.

Saturna Capital's investment professionals, as part of their ongoing review and analysis of all portfolio holdings, are responsible for monitoring significant corporate developments, including proxy proposals submitted to shareholders. Voting proxies is a responsibility of an account’s portfolio manager.

For mutual funds, these guidelines are reviewed and approved annually by the fund trustees. The portfolio manager will refer all issues where there could be a conflict of interest (e.g., a familial or business relationship with company management) or uncertainty of direction to the fund trustees for resolution. Disclosure of the proxy voting record is a responsibility of the fund's secretary.

By the following general categories, absent special circumstances, proxies will be voted:

Governance
  • For proposals calling for a majority of the directors to be independent of management.
  • For proposals seeking to increase the independence of board nominating, audit, and compensation committees.
  • In accordance with the recommendation of the company's board of directors on all shareholder proposals, except it will vote for shareholder proposals that are consistent with these proxy voting guidelines.
  • For the election of the company's nominees for director, except it will withhold votes for nominees it considers insufficiently committed or competent.
  • Against proposals to elect directors on a staggered schedule.
Business Transactions
  • On a case-by-case basis on board-approved proposals to effect acquisitions, mergers, reincorporations, reorganizations, and other transactions.
  • Against proposals to adopt anti-takeover measures.
  • On a case-by-case basis on proposals to amend a company's charter or bylaws.
  • Against authorization to transact other unidentified, substantive business at the meeting.
Capitalization
  • On a case-by-case basis on board-approved proposals involving changes to a company's capitalization, except it will normally vote:
  • For proposals relating to the authorization of additional common stock.
  • For proposals to effect stock splits.
  • For proposals authorizing share repurchase programs.
Executive Compensation
  • On a case-by-case basis on board-approved proposals relating to executive compensation.
  • For compensation programs that relate executive compensation to a company's long-term performance.
  • For stock option plans unless they could result in massive dilution or have other provisions clearly not in the interest of existing shareholders.