PROXY VOTING POLICIES AND PROCEDURES

I. POLICY

Jensen Investment Management ( the “Adviser”) acts as discretionary investment adviser for various clients, including clients governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) and registered open-end investment companies (“mutual funds”).  The Adviser’s authority to vote proxies is established through the delegation of discretionary authority under its investment advisory contracts.  Therefore, unless a client (including a “named fiduciary” under ERISA) specifically reserves the right, in writing, to vote its own proxies, the Adviser will vote all proxies in a timely manner as part of its full discretionary authority over client assets in accordance with these Policies and Procedures.

When voting proxies, the Adviser’s utmost concern is that all decisions be made solely in the best interest of the client (and for ERISA accounts, plan beneficiaries and participants, in accordance with the letter and spirit of ERISA).  The Adviser will act in a prudent and diligent manner intended to enhance the economic value of the assets of the client’s account. 

The Adviser acquires and holds a company’s securities in the accounts it manages in the expectation that they will be a good investment and appreciate in value.  As such, the Adviser votes proxies with a focus on the investment implications of each issue.  Pursuant to that goal, the Adviser believes in allowing responsible management teams to run the business and therefore supports policies, plans and structures that give management teams appropriate latitude to run the business in way that is most likely to maximize value for owners.  

It is the Adviser’s policy to vote all proxies received by the Fund within 10 days of receipt.  Upon receiving each proxy the Adviser will review the issues presented and make a decision to vote for or against (or to abstain on) each of the issues presented.  The Adviser will consider information from a variety of sources in evaluating the issues presented in a proxy. 

II. PURPOSE

The purpose of these Policies and Procedures is to memorialize the procedures and policies adopted by the Adviser to enable it to comply with its fiduciary responsibilities to clients and the requirements of Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).  These Policies and Procedures also reflect the fiduciary standards and responsibilities set forth by the Department of Labor for ERISA accounts.

III. PROCEDURES

The Investment Committee (the “Committee”) is ultimately responsible for ensuring that all proxies received by the Adviser are voted in a timely manner and in a manner consistent with the Adviser’s determination of the client’s best interests.  The Committee meets as needed to review proxies and decide on how they should be voted using the Adviser’s established guidelines (see Section V. below, “Guidelines”).  Although many proxy proposals can be voted in accordance with the Guidelines, the Adviser recognizes that some proposals require special consideration which may dictate that the Adviser makes an exception to the Guidelines. 

A. Conflicts of Interest

A potential conflict of interest arises when an investment adviser has business interests that may not be consistent with the best interests of its clients.  In reviewing proxy proposals in order to identify any potential material conflicts between the Adviser’s interests and those of its clients, the Adviser will consider such matters as (i) whether the Adviser has an economic incentive to vote in a manner that is not consistent with the best interests of its clients (e.g., the Adviser may have an economic incentive to vote in a manner that would please corporate management in the hope that doing so might lead corporate management to direct more business to the Adviser, such as managing company retirement plans), and (ii) whether there are any business or personal relationships between an employee of the Adviser and the officers or directors of the company from which the proxy is received that may create an incentive to vote in a manner that is not consistent with the best interests of its clients.

In assessing the materiality of a potential conflict, materiality will be defined as the potential to have a significant impact on the outcome of a proxy vote.  If the Adviser’s clients control less than 2% of the eligible vote, the conflict of interest is presumed to be immaterial.    

Where a proxy proposal raises a potential material conflict between the Adviser’s interests and a client’s interest, including a mutual fund client, the Adviser will resolve such a conflict in the manner described below:

1. Vote in Accordance with the GuidelinesTo the extent that the Adviser has little or no discretion to deviate from the Guidelines with respect to the proposal in question, the Adviser shall vote in accordance with such pre-determined voting policy.
   
2. Obtain Consent of Clients.  To the extent that Adviser has discretion to deviate from the Guidelines with respect to the proposal in question, Adviser will disclose the conflict to the relevant clients and obtain their consent to the proposed vote prior to voting the securities.  The disclosure to the client will include sufficient detail regarding the matter to be voted on and the nature of Adviser’s conflict that the client would be able to make an informed decision regarding the vote.  If a client does not respond to such a conflict disclosure request or denies the request, Adviser will abstain from voting the securities held by that client’s account. 
3. Client Directive to Use an Independent Third Party.  Alternatively, a client may, in writing, specifically direct Adviser to forward all proxy matters in which Adviser has a conflict of interest regarding the client’s securities to an identified independent third party for review and recommendation.  Where such independent third party’s recommendations are received on a timely basis, Adviser will vote all such proxies in accordance with such third party’s recommendation.  If the third party’s recommendations are not timely received, Adviser will abstain from voting the securities held by that client’s account.

In the event of a potential material conflict between the interests of the Adviser and the Fund, the Adviser’s policies provide that:

4. Disclose to the Board.  The conflict may be disclosed to the Fund’s Board or its delegate, who shall provide direction to vote the proxies.  The Board has delegated this authority to the independent directors, and the proxy voting direction in such a case shall be determined by a majority of the independent directors.

The Committee will review the proxy proposal for conflicts of interest as part of the overall vote review process.  All potential material conflicts of interest so identified by Adviser will be addressed as described above in this Section III.A.

B. Limitations

In certain circumstances, in accordance with a client’s investment advisory contract (or other written directive) or where Adviser has determined that it is in the client’s best interest, Adviser will not vote proxies received.  The following are certain circumstances where Adviser will limit its role in voting proxies:

1. Client Maintains Proxy Voting Authority:  Where client specifies in writing that it will maintain the authority to vote proxies itself or that it has delegated the right to vote proxies to a third party, Adviser will not vote the securities and will direct the relevant custodian to send the proxy material directly to the client.  If any proxy material is received by Adviser, it will promptly be forwarded to the client or specified third party.
2. Terminated Account:  Once a client account has been terminated with Adviser in accordance with its investment advisory agreement, Adviser will not vote any proxies received after the termination.  However, the client may specify in writing that proxies should be directed to the client (or a specified third party) for action.
3. Limited Value:  If Adviser determines that the value of an issuer’s economic interest in the proxy issue or the value of the portfolio holding is indeterminable or insignificant, Adviser may abstain from voting an issuer’s proxies.  Adviser also will not vote proxies received for securities which are no longer held by the client’s account.  In addition, Adviser generally will not vote securities where the cumulative market value of the securities held in all client accounts managed by the Adviser is less than $250,000.

IV. RECORD KEEPING

In accordance with Rule 204-2 under the Advisers Act, Adviser will maintain for the time periods set forth in the Rule (i) these proxy voting procedures and policies, and all amendments thereto; (ii) all proxy statements received regarding client securities (provided however, that Adviser may rely on the proxy statement filed on EDGAR as its records); (iii) a record of all votes cast on behalf of clients; (iv) records of all client requests for proxy voting information; (v) any documents prepared by Adviser that were material to making a decision how to vote or that memorialized the basis for the decision; and (vi) all records relating to requests made to clients regarding conflicts of interest in voting the proxy.

Adviser will describe in its Part II of Form ADV (or other brochure fulfilling the requirement of Rule 204-3) its proxy voting policies and procedures and will inform clients how they may obtain information on how Adviser voted proxies with respect to the clients’ portfolio securities.  Clients may obtain information on how their securities were voted or a copy of Adviser’s Policies and Procedures by written request addressed to Adviser.  Adviser will coordinate with all mutual fund clients to assist in the provision of all information required to be filed by such mutual funds on Form N-PX.

V. GUIDELINES

Each proxy issue will be considered individually.  The following guidelines are a partial list to be used in voting proposals contained in the proxy statements, but will not be used as rigid rules.

A. Oppose

The Adviser will generally vote against any proposal that clearly has the effect of restricting the ability of shareholders to realize the full potential value of their investment.  Proposals in this category would include:

1. Issues regarding the issuer’s Board entrenchment and anti-takeover measures such as the following:

• a. Proposals to stagger board members’ terms;
• b. Proposals to limit the ability of shareholders to call special meetings;
• c. Proposals to require super majority votes;
• d. Proposals requesting excessive increases in authorized common or preferred shares where management provides no explanation for the use or need of these additional shares;
• e. Proposals regarding “fair price” provisions;
• f. Proposals regarding “poison pill” provisions; and
• g. Permitting “green mail”

2. Providing cumulative voting rights.

3. “Social issues,” unless specific client guidelines supersede, e.g., restrictions regarding South Africa.

4. Election of directors recommended by management, except if there is a proxy fight, which will then be decided on a case-by-case basis.  Typically, new directors are recommended by existing board members, not management of the company.

B. Approve

Routine proposals are those which do not change the structure, bylaws, or operations of the corporation to the detriment of the shareholders.  Given the routine nature of these proposals, proxies will nearly always be voted with management.  Traditionally, these issues include:

1. Election of auditors recommended by board of directors, unless seeking to replace if there exists a dispute over policies.
2. Date and place of annual meeting.
3. Ratification of directors’ actions on routine matters since previous annual meeting.
4. Confidential voting
   • Confidential voting is most often proposed by shareholders as a means of eliminating undue management pressure in shareholders regarding their vote on proxy issues.
   • The Adviser will generally approve these proposals as shareholders can later divulge their votes to management on a selective basis if a legitimate reason arises.
5. Limiting directors’ liability
6. Eliminate preemptive rights
• Preemptive rights give current shareholders the opportunity to maintain their current percentage ownership through any subsequent equity offerings. These provisions are no longer common in the U.S., and can restrict management's ability to raise new capital.
7. The Adviser generally approves the elimination of preemptive rights, but will oppose the elimination of limited preemptive rights, e.g., on proposed issues representing more than an acceptable level of total dilution.
8. Employee Stock Purchase Plan
9. Establish 401(k) Plan.

C. Case-By-Case

The Adviser will review each issue in this category on a case-by-case basis.  Voting decisions will be made based on the financial interest of the client.  These matters include:

1. Pay directors solely in equity of the issuer
2. Eliminate director mandatory retirement policy
3. Rotate annual meeting location/date
4. Option and stock grants to management and directors
5. Allowing indemnification of directors and/or officers after reviewing the applicable laws and extent of protection requested.
6. Approvals for new and amended stock based compensation plans.
7. Proposals for changes to specific accounting policies, e.g., requiring the expensing of stock options.
8. Executive compensation plans.