# EDGAR Filing Document

**Accession Number:** 0001540305
**File Stem:** 0000894189-25-005126
**Filing Date:** 2025-7
**Character Count:** 864098
**Document Hash:** 578bfbe961584a96dde751c75f3483bc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000894189-25-005126.hdr.sgml**: 20250724

**ACCESSION NUMBER**: 0000894189-25-005126

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 47

**FILED AS OF DATE**: 20250724

**DATE AS OF CHANGE**: 20250724

**EFFECTIVENESS DATE**: 20250724

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ETF Series Solutions
- **CENTRAL INDEX KEY:** 0001540305

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1112

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-22668
- **FILM NUMBER:** 251145662

**BUSINESS ADDRESS:**
- **STREET 1:** 615 EAST MICHIGAN ST
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202
- **BUSINESS PHONE:** 414-287-3700

**MAIL ADDRESS:**
- **STREET 1:** 615 EAST MICHIGAN ST
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ETF Series Solutions
- **CENTRAL INDEX KEY:** 0001540305

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1112

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-179562
- **FILM NUMBER:** 251145661

**BUSINESS ADDRESS:**
- **STREET 1:** 615 EAST MICHIGAN ST
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202
- **BUSINESS PHONE:** 414-287-3700

**MAIL ADDRESS:**
- **STREET 1:** 615 EAST MICHIGAN ST
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202

## Series and Classes Contracts Data

### AAM Todd International Intrinsic Value ETF (Series ID: S000093585)

| Class ID   | Class Name                                 | Ticker Symbol   |
|:---|:---|:---|
| C000261974 | AAM Todd International Intrinsic Value ETF | TIIV            |

?xml version='1.0' encoding='ASCII'? ck0001540305-20250724

Filed with the U.S. Securities and Exchange Commission on July 24, 2025

1933 Act Registration File No. 333-179562

1940 Act File No. 811-22668

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-1A**

---

| | | |
|:---|:---|:---|
| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | [X] |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Effective Amendment No. | | [ ] |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post-Effective Amendment No. | 1028 | [X] |

---

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] <br> Amendment No. <u>1029</u> [X]

(Check appropriate box or boxes.)

**<u>ETF SERIES SOLUTIONS</u>**

(Exact Name of Registrant as Specified in Charter)

615 East Michigan Street, Milwaukee, Wisconsin 53202

(Address of Principal Executive Offices)

(Registrant's Telephone Number, including Area Code): (414) 516-1645

Kristina R. Nelson, President

ETF Series Solutions

c/o U.S. Bank Global Fund Services

615 East Michigan Street

Milwaukee, WI 53202

(Name and Address of Agent for Service)

Copy to:

Christopher D. Menconi

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004-2541

As soon as practical after the effective date of this Registration Statement

(Approximate Date of Proposed Public Offering)

It is proposed that this filing will become effective

[X] immediately upon filing pursuant to paragraph (b)

[ ] on <u>February 28, 2025</u> pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[ ] on pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box

&nbsp;&nbsp;&nbsp;&nbsp;[ ] &nbsp;&nbsp;&nbsp;&nbsp;this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

------

PROSPECTUS

![aametfsa01.jpg](ck0001540305-20250724_g1.jpg)

**AAM TODD INTERNATIONAL INTRINSIC VALUE ETF (TIIV)**

**Listed on NYSE Arca, Inc.**

**July 24, 2025**

The U.S. Securities and Exchange Commission ("SEC") has not approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **[AAM Todd International Intrinsic Value ETF - Fund Summary](#i07daad83fe2e48ba8c90945e568e0628_13)** | **[2](#i07daad83fe2e48ba8c90945e568e0628_13)** |
| **[Additional Information About the Fund](#i07daad83fe2e48ba8c90945e568e0628_19)** | **[7](#i07daad83fe2e48ba8c90945e568e0628_19)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[Investment Objectives](#i07daad83fe2e48ba8c90945e568e0628_22) | [7](#i07daad83fe2e48ba8c90945e568e0628_22) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Principal Investment Risks](#i07daad83fe2e48ba8c90945e568e0628_28) | [7](#i07daad83fe2e48ba8c90945e568e0628_28) |
| **[Portfolio Holdings Information](#i07daad83fe2e48ba8c90945e568e0628_31)** | **[10](#i07daad83fe2e48ba8c90945e568e0628_31)** |
| **[Management](#i07daad83fe2e48ba8c90945e568e0628_34)** | **[10](#i07daad83fe2e48ba8c90945e568e0628_34)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[Investment Adviser](#i07daad83fe2e48ba8c90945e568e0628_37) | [10](#i07daad83fe2e48ba8c90945e568e0628_37) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Sub-Adviser](#i07daad83fe2e48ba8c90945e568e0628_40)s | [11](#i07daad83fe2e48ba8c90945e568e0628_40) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Portfolio Managers](#i07daad83fe2e48ba8c90945e568e0628_43) | [11](#i07daad83fe2e48ba8c90945e568e0628_43) |
| &nbsp;&nbsp;&nbsp;&nbsp;Past Performance | [12](#i07daad83fe2e48ba8c90945e568e0628_667) |
| **[How to Buy and Sell Shares](#i07daad83fe2e48ba8c90945e568e0628_46)** | **[14](#i07daad83fe2e48ba8c90945e568e0628_46)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[Book Entry](#i07daad83fe2e48ba8c90945e568e0628_49) | [14](#i07daad83fe2e48ba8c90945e568e0628_49) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Frequent Purchases and Redemptions of Shares](#i07daad83fe2e48ba8c90945e568e0628_52) | [14](#i07daad83fe2e48ba8c90945e568e0628_52) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Determination of Net Asset Value](#i07daad83fe2e48ba8c90945e568e0628_55) | [14](#i07daad83fe2e48ba8c90945e568e0628_55) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Fair Value Pricing](#i07daad83fe2e48ba8c90945e568e0628_58) | [14](#i07daad83fe2e48ba8c90945e568e0628_58) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Delivery of Shareholder Documents - Householding](#i07daad83fe2e48ba8c90945e568e0628_61) | [15](#i07daad83fe2e48ba8c90945e568e0628_61) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Investments by Registered Investment Companies](#i07daad83fe2e48ba8c90945e568e0628_64) | [15](#i07daad83fe2e48ba8c90945e568e0628_64) |
| **[Dividends, Distributions, and Taxes](#i07daad83fe2e48ba8c90945e568e0628_67)** | **[15](#i07daad83fe2e48ba8c90945e568e0628_67)** |
| **[Distribution](#i07daad83fe2e48ba8c90945e568e0628_70)** | **[17](#i07daad83fe2e48ba8c90945e568e0628_70)** |
| **[Premium/Discount Information](#i07daad83fe2e48ba8c90945e568e0628_73)** | **[17](#i07daad83fe2e48ba8c90945e568e0628_73)** |
| **[Additional Notices](#i07daad83fe2e48ba8c90945e568e0628_76)** | **[17](#i07daad83fe2e48ba8c90945e568e0628_76)** |
| **[Financial Highlights](#i07daad83fe2e48ba8c90945e568e0628_79)** | **[17](#i07daad83fe2e48ba8c90945e568e0628_79)** |

---

------

**AAM TODD INTERNATIONAL INTRINSIC VALUE ETF - FUND SUMMARY**<br>

**Investment Objective** 

The AAM Todd International Intrinsic Value ETF (the "Fund") seeks to provide total return primarily through capital appreciation.

**Fees and Expenses of the Fund** 

The following table describes the fees and expenses you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.**

---

| | |
|:---|:---|
| **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* | **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* |
| Management Fees | 0.54% |
| Distribution and/or Service (Rule 12b-1) Fees |  |
| Other Expenses<sup>1</sup> | 0.00% |
| **Total Annual Fund Operating Expenses** | **0.54%** |

---

<sup>1</sup> Estimated for the current fiscal year.

**Expense Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then continue to hold or redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | |
|:---|:---|
| **1 Year** | **3 Years** |
| $55 | $173 |

---

**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. Because the Fund is newly organized, portfolio turnover information is not yet available.

**Principal Investment Strategies**

The Fund is an actively managed exchange-traded Fund ("ETF") that seeks to achieve its investment objective by primarily investing in equity securities, including American Depositary Receipts ("ADRs"), of internationally domiciled companies, including in ex-U.S. developed markets and emerging markets, that trade on a U.S. securities exchange.

Todd Asset Management LLC ("Todd"), the Fund's investment sub-adviser, selects securities for the Fund utilizing a "bottom-up" internal screening process designed to identify securities that, in Todd's opinion, trade at discounts to the true or "intrinsic value" of a company. Todd begins with an investment universe of approximately 800 securities that have a market cap greater than $1 billion. Todd may acquire securities for the Fund's portfolio with market cap of less than $1 billion. Todd evaluates each company for potential investment based on valuation, fundamental strength (*i.e*. strong and rising earnings), technical strength, and strong price-to-intrinsic value ("P/IV") ratios. P/IV ratios are calculated by Todd by dividing a security's current market price by Todd's assessment of a security's underlying value, based on both tangible and intangible factors.

Todd then ranks the securities following the P/IV screening using a proprietary Multi-Factor Ranking Model that assigns each security a composite ranking score that reflects, in a single number, all of the factors Todd believes are most critical to identifying a stock's true future potential. The Multi-Factor Ranking Model prioritizes securities with strong P/IV and price to earnings ratios along with securities that demonstrate positive earnings revisions and earnings momentum. While a security must have an attractive P/IV ratio to be considered for the Fund's portfolio, Todd evaluates each security to ensure that it meets Todd's assessment of potential upside, quality, and diversification across sectors and geographic regions prior to investment.

The Fund's holdings may represent multiple geographic regions and sectors that will vary at different points in time. Todd anticipates the Fund will have significant exposure to companies in Europe and Japan at the time of inception. The Fund's investment strategy also may result in a substantial focus in the financial and industrial sectors at the time of inception.

------

Todd generally sells a security for the Fund when, in Todd's opinion, the fundamentals of the company are perceived to have weakened, if Todd becomes concerned about the integrity of a company's accounting, or if Todd believes that a company is no longer attractive compared to its intrinsic value relative to other available equity investments.

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. The principal risks are presented in alphabetical order to facilitate finding particular risks and comparing them with other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value per share ("NAV"), trading price, yield, total return and/or ability to meet its objectives. For more information about the risks of investing in the Fund, see the section in the Fund's Prospectus titled "Additional Information About the Fund".

• **Active Management Risk**. The Fund is actively managed and may not meet its investment objective based on the Sub-Adviser's success or failure to implement investment strategies for the Fund. The Adviser relies on quantitative data that may prove to be incorrect or incomplete.

• **ADR Risk**. ADRs involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. ADRs listed on U.S. exchanges are issued by banks or trust companies, and ADRs entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares ("Underlying Shares"). When the Fund invests in ADRs as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the ADRs may not provide a return that corresponds precisely with that of the Underlying Shares.

• **Capital Controls and Sanctions Risk**. Economic conditions, such as volatile currency exchange rates and interest rates, political events, military action and other conditions may, without prior warning, lead to foreign government intervention (including intervention by the U.S. government with respect to foreign governments, economic sectors, foreign companies and related securities and interests) and the imposition of capital controls and/or sanctions, which may also include retaliatory actions of one government against another government, such as seizure of assets. Capital controls and/or sanctions include the prohibition of, or restrictions on, the ability to transfer currency, securities or other assets. Capital controls and/or sanctions may also impact the ability of the Fund to buy, sell or otherwise transfer securities or currency, negatively impact the value and/or liquidity of such instruments, adversely affect the trading market and price for Shares, and cause the Fund to decline in value.

• **Currency Exchange Rate Risk**. The Fund may invest in investments that provide exposure to non-U.S. currencies. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investment and the value of your Shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning and you may lose money.

• **Emerging Markets Risk**. The Fund may invest in companies organized in emerging market nations. Investments in securities and instruments traded in developing or emerging markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments or investments in more developed international markets. Such conditions may impact the ability of the Fund to buy, sell or otherwise transfer securities, adversely affect the trading market and price for Shares and cause the Fund to decline in value.

• **Equity Market Risk**. The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, or sectors in which the Fund invests. Common stocks are generally exposed to greater risk than other types of securities, such as preferred stock and debt obligations, because common stockholders generally have inferior rights to receive payment from issuers. In addition, local, regional or global events such as war, including Russia's invasion of Ukraine, acts of terrorism, market volatility related to global trade policy and the imposition of tariffs, the spread of infectious diseases or other public health issues (such as the global pandemic caused by the COVID-19 virus), recessions, rising inflation, or other events could have a significant negative impact on the Fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. Such events could adversely affect the prices and liquidity of the Fund's portfolio securities or other instruments and could result in disruptions in the trading markets.

• **ETF Risks**. The Fund is an ETF, and, as a result of an ETF's structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as Authorized Participants ("APs"). In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, Shares may trade at a material discount to NAV and possibly face delisting: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or

------

liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Costs of Buying or Selling Shares.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid-ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Shares May Trade at Prices Other Than NAV.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Trading*. Although Shares are listed for trading on NYSE Arca, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. There can be no assurance that an active trading market for such Shares will develop or be maintained. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than Shares, and this could lead to differences between the market price of the Shares and the underlying value of those Shares.

• **Foreign Securities Risk**. Investments in securities of foreign companies, including through ADRs, involve certain risks that may not be present with investments in U.S. securities. For example, the value of such securities may be subject to risk of decline due to foreign currency fluctuations, the imposition of tariffs, or to political or economic instability. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Such investments also may be subject to withholding or other taxes and may be indirectly subject to additional trading, settlement, custodial, and operational risks. These and other factors can make investments in the Fund more volatile and potentially less liquid than other types of investments. Companies in many foreign markets are not subject to the same degree of regulatory requirements, accounting standards or auditor oversight as companies in the U.S., and as a result, information about the securities in which the Fund invests may be less reliable or complete. Foreign markets often have less reliable securities valuations and greater risk associated with the custody of securities than the U.S. There may be significant obstacles to obtaining information necessary for investigations into or litigation against companies and shareholders may have limited legal remedies.

• **Geographic Investment Risk**. To the extent the Fund invests a significant portion of its assets in the securities of companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Japan.* The Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a negative impact on Japanese securities. While the Japanese economy has recently emerged from a prolonged economic downturn, Japan's economic growth rate may remain relatively low in the future. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade regulations, changes in the U.S. dollar exchange rates, a recession in the United States or continued increases in foreclosure rates may have an adverse impact on the economy of Japan. Japan also has few natural resources, and any fluctuation or shortage in the commodity markets could have a negative impact on Japanese securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Europe.* The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The Fund makes investments in securities of issuers that are domiciled in, or have significant operations in, member countries of the European Union ("EU") that are subject to economic and monetary controls that can adversely affect the Fund's investments. The European financial markets have experienced volatility and adverse trends in recent years and these events have adversely affected the exchange rate of the euro and may continue to significantly affect other European countries. Decreasing imports or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the euro, the default or threat of default by an EU member country on its sovereign debt, and/or an economic recession in an EU member country may have a significant adverse effect on the economies of EU member countries and their trading partners, including some or all of the European countries in which the Fund invests. Acts of war in Europe, including Russia's large-scale military invasion of Ukraine, and the resulting sanctions by and against European nations could also have a severe adverse effect on both European and global economies, which in turn could affect the value of the Fund's investments.

------

The United Kingdom ("UK") formally exited from the EU on January 31, 2020 (known as "Brexit"), and effective December 31, 2020, the UK ended a transition period during which it continued to abide by the EU's rules and the UK's trade relationships with the EU were generally unchanged. Following this transition period, the impact on the UK and European economies and the broader global economy could be significant, resulting in negative impacts, such as increased volatility and illiquidity, and potentially lower economic growth of markets in the UK, Europe and globally, which may adversely affect the value of the Fund's investments.

Russia's large-scale invasion of Ukraine on February 24, 2022 has led to various countries imposing economic sanctions on certain Russian individuals and Russian corporate and banking entities. A number of jurisdictions have also instituted broader sanctions on Russia. Further, as of the date of this Prospectus, the Russian securities markets effectively have not been open for trading by foreign investors since February 28, 2022. Russia's military incursion and resulting sanctions could have a severe adverse effect on both regional and global economies, which in turn could affect the value of the Fund's investments.

Eastern European markets are particularly sensitive to social, political, economic, and currency events in Russia and may suffer heavy losses as a result of their trading and investment links to the Russian economy and currency. Changes in regulations on trade, decreasing imports or exports, changes in the exchange rate of the euro, a significant influx of refugees, and recessions among European countries may have a significant adverse effect on the economies of other European countries including those of Eastern Europe.

• **Geopolitical Risk.** Some countries and regions in which the Fund invests have experienced security concerns, war or threats of war and aggression, terrorism, economic uncertainty, natural and environmental disasters and/or systemic market dislocations that have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on the U.S. and world economies and markets generally, each of which may negatively impact the Fund's investments.

• **Large-Capitalization Investing Risk**. The Fund's performance may be adversely affected if securities of large cap companies underperform securities of smaller-capitalization companies or the market as a whole. The securities of large cap companies may be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion. Large-capitalization companies may also be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

• **Liquidity Risk**. Liquidity risk exists when particular investments are difficult to purchase or sell. This can reduce the Fund's returns because the Fund may be unable to transact at advantageous times or prices.

• **New Fund Risk**. The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Additionally, Todd has not previously managed a registered fund, which may increase the risk of investing in the Fund.

• **Sector Risk**. To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Financials Sector Risk.* This sector, which includes banks, insurance companies, and financial service firms, can be significantly affected by changes in interest rates, government regulation, the rate of defaults on corporate, consumer and government debt, the availability and cost of capital, and fallout from the housing and sub-prime mortgage crisis. Banks, in particular, are subject to volatile interest rates, severe price competition, and extensive government oversight and regulation, which may limit certain economic activities available to banks, impact their fees and overall profitability, and establish capital maintenance requirements. In addition, banks may have concentrated portfolios of loans or investments that make them vulnerable to economic conditions that affect that industry. Insurance companies are subject to similar risks as banks, including adverse economic conditions, changes in interest rates, increased competition and government regulation, but insurance companies are more at risk from changes in tax law, government imposed premium rate caps, and catastrophic events, such as earthquakes, floods, hurricanes and terrorist acts. This sector has experienced significant losses in the recent past, and the impact of higher interest rates, more stringent capital requirements, and of recent or future regulation on any individual financial company, or on the sector as a whole, cannot be predicted. In recent years, cyber attacks and technology malfunctions and failures have become increasingly frequent in the financial sector and have caused significant losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Industrials Sector Risk.* The industrials sector can be significantly affected by, among other things, worldwide economic growth, supply and demand for specific products and services, rapid technological developments, international political and economic developments, environmental issues, tariffs and trade barriers, and tax and governmental regulatory policies. As the demand for, or prices of, industrials increase, the value of the Fund's investments generally would be expected to also increase. Conversely, declines in the demand for, or prices of, industrials generally would be expected to contribute to declines in the value of such securities. Such declines may occur quickly and without warning and may negatively impact the value of the Fund and your investment.

------

**Performance** 

Performance information for the Fund is not included because the Fund had not yet commenced operations as of the date of this Prospectus. In the future, performance information for the Fund will be presented in this section. Updated performance information will be available on the Fund's website at www.aamlive.com/ETF.

**Portfolio Management** 

---

| | |
|:---|:---|
| **Adviser** | Advisors Asset Management, Inc. ("AAM" or the "Adviser")  |
| **Sub-Advisers** | Todd Asset Management LLC and Vident Asset Management ("Vident") (together, the "Sub-Advisers") |
| **Portfolio Managers** | Curtiss M. Scott Jr., CFA, President, CIO, Partner, and Portfolio Manager for Todd, John J. White, CFA, Partner and Senior Portfolio Manager for Todd, John C. Holden, CFA, Partner and Senior Portfolio Manager for Todd, Shaun C. Siers, CFA, Partner and Senior Portfolio Manager for Todd, Austin Wen, CFA, Senior Portfolio Manager for Vident, Rafael Zayas, CFA, SVP, Head of Portfolio Management and Trading for Vident, and Yin Bhuyan, Senior Portfolio Manager for Vident have been portfolio managers for the Fund since its inception in July 2025. |

---

**Purchase and Sale of Shares** 

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through brokers at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Investors may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or selling Shares in the secondary market (the "bid-ask spread"). Recent information about the Fund, including its NAV, market price, premiums and discounts, and bid-ask spreads is available on the Fund's website at www.aamlive.com/ETF.

**Tax Information** 

Fund distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is in an individual retirement account ("IRA") or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser, the Sub-Advisers or their affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ADDITIONAL INFORMATION ABOUT THE FUND**

**Investment Objectives**

The Fund's investment objective has been adopted as a non-fundamental investment policy and may be changed without shareholder approval upon written notice to shareholders.

**Principal Investment Risks**

This section provides additional information regarding the principal risks described in the Fund Summary. As in the Fund Summary, the principal risks below are presented in alphabetical order to facilitate finding particular risks and comparing them with other funds. Each risk described below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. Each of the factors below could have a negative impact on the Fund's performance and trading prices.

• **Active Management Risk.** The Fund is actively managed and may not meet its investment objective based on the Adviser's success or failure to implement investment strategies for the Fund. The Adviser relies on quantitative data that may prove to be incorrect or incomplete.

• **ADR Risk**. The Fund will hold the securities of non-U.S. companies in the form of ADRs. ADRs are negotiable certificates issued by a U.S. financial institution that represent a specified number of shares in a foreign stock and trade on a U.S. national securities exchange, such as the New York Stock Exchange. Sponsored ADRs are issued with the support of the issuer of the foreign stock underlying the ADRs and carry all of the rights of common shares, including voting rights. The underlying securities of the ADRs in the Fund's portfolio are usually denominated or quoted in currencies other than the U.S. Dollar. As a result, changes in foreign currency exchange rates may affect the value of the Fund's portfolio. In addition, because the underlying securities of ADRs trade on foreign exchanges at times when the U.S. markets are not open for trading, the value of the securities underlying the ADRs may change materially at times when the U.S. markets are not open for trading, regardless of whether there is an active U.S. market for shares.

• **Capital Controls and Sanctions Risk**. Economic conditions, such as volatile currency exchange rates and interest rates, political events, military action and other conditions may, without prior warning, lead to foreign government intervention (including intervention by the U.S. government with respect to foreign governments, economic sectors, foreign companies and related securities and interests) and the imposition of capital controls and/or sanctions, which may also include retaliatory actions of one government against another government, such as seizure of assets. Capital controls and/or sanctions include the prohibition of, or restrictions on, the ability to transfer currency, securities or other assets. Capital controls and/or sanctions may also impact the ability of the Fund to buy, sell or otherwise transfer securities or currency, negatively impact the value and/or liquidity of such instruments, adversely affect the trading market and price for Shares, and cause the Fund to decline in value.

• **Currency Exchange Rate Risk**. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investments in ADRs and the value of your Shares. Because the Fund's NAV is determined on the basis of U.S. dollars, the U.S. dollar value of your investment in the Fund may go down if the value of the local currency of the non-U.S. markets in which the Fund invests through ADRs depreciates against the U.S. dollar. This is true even if the local currency value of securities in an ADR held by the Fund goes up. Conversely, the dollar value of your investment in the Fund may go up if the value of the local currency appreciates against the U.S. dollar. The value of the U.S. dollar measured against other currencies is influenced by a variety of factors. These factors include: national debt levels and trade deficits, changes in balances of payments and trade, domestic and foreign interest and inflation rates, global or regional political, economic or financial events, monetary policies of governments, actual or potential government intervention, and global energy prices. Political instability, the possibility of government intervention and restrictive or opaque business and investment policies may also reduce the value of a country's currency. Government monetary policies and the buying or selling of currency by a country's government may also influence exchange rates. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning, and you may lose money.

*•* **Emerging Markets Risk**. Investments in securities and instruments traded in developing or emerging markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments. For example, developing and emerging markets may be subject to (i) greater market volatility, (ii) lower trading volume and liquidity, (iii) greater social, political and economic uncertainty, (iv) governmental controls on foreign investments and limitations on repatriation of invested capital, (v) lower disclosure, corporate governance, auditing and financial reporting standards, (vi) fewer protections of property rights, (vii) fewer investor rights and limited legal or practical remedies available to investors against emerging market companies, (viii) restrictions on the transfer of securities or currency, and (ix) settlement and trading practices that differ from those in U.S. markets. Each of these factors may impact the ability of the Fund to buy, sell or otherwise transfer securities, adversely affect the trading market and price for Shares and cause the Fund to decline in value.

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• **Equity Market Risk**. The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, or sectors in which the Fund invests. Common stocks are generally exposed to greater risk than other types of securities, such as preferred stock and debt obligations, because common stockholders generally have inferior rights to receive payment from issuers. In addition, local, regional or global events such as war, including Russia's invasion of Ukraine, acts of terrorism, market volatility related to global trade policy and the imposition of tariffs, the spread of infectious diseases or other public health issues (such as the global pandemic caused by the COVID-19 virus), recessions, rising inflation, or other events could have a significant negative impact on the Fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. Such events could adversely affect the prices and liquidity of the Fund's portfolio securities or other instruments and could result in disruptions in the trading markets.

• **ETF Risks**. The Fund is an ETF, and, as a result of an ETF's structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as Authorized Participants ("APs"). In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, Shares may trade at a material discount to NAV and possibly face delisting: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Costs of Buying or Selling Shares.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid-ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Shares May Trade at Prices Other Than NAV.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Trading*. Although Shares are listed for trading on (the Exchange and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. There can be no assurance that an active trading market for such Shares will develop or be maintained. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than Shares, and this could lead to differences between the market price of the Shares and the underlying value of those Shares.

• **Foreign Securities Risk.** Investments in securities of foreign companies, including through ADRs, involve certain risks that may not be present with investments in U.S. companies. For example, investments in non-U.S. companies may be subject to risk of loss due to foreign currency fluctuations, the imposition of tariffs, or to political or economic instability. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Securities of non-U.S. companies may be subject to different accounting, auditing, financial reporting and investor protection standards than those of U.S. companies. Investments tied to non-U.S. companies may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. Because legal systems differ, there is also the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price their Shares, the value of the securities in the Fund's portfolios may change on days when shareholders will not be able to purchase or sell Shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

• **Geographic Investment Risk***.* To the extent that the Fund invests a significant portion of its assets in the securities of companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region. For example, political and economic conditions and changes in regulatory, tax, or economic policy in a country could significantly affect the market in that country and in surrounding or related countries and have a negative impact on the Fund's performance. Currency developments or restrictions, political and social instability, and changing economic conditions have resulted in significant market volatility.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Japan.* The Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a negative impact on Japanese securities. While the Japanese economy has recently emerged from a prolonged economic downturn, Japan's economic growth rate may remain relatively low in the future. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade regulations, changes in the U.S. dollar exchange rates, a recession in the United States or continued increases in foreclosure rates may have an adverse impact on the economy of Japan. Japan also has few natural resources, and any fluctuation or shortage in the commodity markets could have a negative impact on Japanese securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Europe.* The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The Fund makes investments in securities of issuers that are domiciled in, or have significant operations in, member countries of the European Union ("EU") that are subject to economic and monetary controls that can adversely affect the Fund's investments. The European financial markets have experienced volatility and adverse trends in recent years and these events have adversely affected the exchange rate of the euro and may continue to significantly affect other European countries. Decreasing imports or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the euro, the default or threat of default by an EU member country on its sovereign debt, and/or an economic recession in an EU member country may have a significant adverse effect on the economies of EU member countries and their trading partners, including some or all of the European countries in which the Fund invests. Acts of war in Europe, including Russia's large-scale military invasion of Ukraine, and the resulting sanctions by and against European nations could also have a severe adverse effect on both European and global economies, which in turn could affect the value of the Fund's investments.

The United Kingdom ("UK") formally exited from the EU on January 31, 2020 (known as "Brexit"), and effective December 31, 2020, the UK ended a transition period during which it continued to abide by the EU's rules and the UK's trade relationships with the EU were generally unchanged. Following this transition period, the impact on the UK and European economies and the broader global economy could be significant, resulting in negative impacts, such as increased volatility and illiquidity, and potentially lower economic growth of markets in the UK, Europe and globally, which may adversely affect the value of the Fund's investments. &nbsp;&nbsp;&nbsp;&nbsp;

Russia's large-scale invasion of Ukraine on February 24, 2022 has led to various countries imposing economic sanctions on certain Russian individuals and Russian corporate and banking entities. A number of jurisdictions have also instituted broader sanctions on Russia. Further, as of the date of this Prospectus, the Russian securities markets effectively have not been open for trading by foreign investors since February 28, 2022. Russia's military incursion and resulting sanctions could have a severe adverse effect on both regional and global economies, which in turn could affect the value of the Fund's investments.

Eastern European markets are particularly sensitive to social, political, economic, and currency events in Russia and may suffer heavy losses as a result of their trading and investment links to the Russian economy and currency. Changes in regulations on trade, decreasing imports or exports, changes in the exchange rate of the euro, a significant influx of refugees, and recessions among European countries may have a significant adverse effect on the economies of other European countries including those of Eastern Europe.

• **Geopolitical Risk***.* Some countries and regions in which the Fund invests have experienced security concerns, war or threats of war and aggression, terrorism, economic uncertainty, natural and environmental disasters and/or systemic market dislocations that have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on the U.S. and world economies and markets generally. Such geopolitical and other events may also disrupt securities markets and, during such market disruptions, the Fund's exposure to the other risks described herein will likely increase. Each of the foregoing may negatively impact the Fund's investments.

• **Large-Capitalization Investing Risk**. The Fund's performance may be adversely affected if securities of large cap companies underperform securities of smaller-capitalization companies or the market as a whole. The securities of large cap companies may be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion. Large-capitalization companies may also be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

• **Liquidity Risk**. Liquidity risk exists when particular investments are difficult to purchase or sell. To the extent the Fund invests in illiquid securities or securities that become less liquid, such investments may have a negative effect on the returns of the Fund because the Fund may be unable to sell the illiquid securities at an advantageous time or price. To the extent that the Fund's principal investment strategies involve investing in securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. There can be no assurance that a security that is deemed to be liquid when purchased will continue to be liquid for as long as it is held by the Fund.

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**• New Fund Risk**. The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Additionally, Todd has not previously managed a registered fund, which may increase the risk of investing in the Fund.

• **Sector Risk**. The Fund's investing approach may result in an emphasis on certain sectors or sub-sectors of the market at any given time. To the extent the Fund invests more heavily in one sector or sub-sector of the market, it thereby presents a more concentrated risk, and its performance will be especially sensitive to developments that significantly affect those sectors or sub-sectors. In addition, the value of the Fund's shares may change at different rates compared to the value of shares of a fund with investments in a more diversified mix of sectors and industries. An individual sector or sub-sector of the market may have above-average performance during particular periods but may also move up and down more than the broader market. The several industries that constitute a sector may all react in the same way to economic, political or regulatory events. The Fund's performance could also be affected if the sectors or sub-sectors do not perform as expected. Alternatively, the lack of exposure to one or more sectors or sub-sectors may adversely affect performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Financials Sector Risk.* This sector, which includes banks, insurance companies, and financial service firms, can be significantly affected by changes in interest rates, government regulation, the rate of defaults on corporate, consumer and government debt, the availability and cost of capital, and fallout from the housing and sub-prime mortgage crisis. Banks, in particular, are subject to volatile interest rates, severe price competition, and extensive government oversight and regulation, which may limit certain economic activities available to banks, impact their fees and overall profitability, and establish capital maintenance requirements. In addition, banks may have concentrated portfolios of loans or investments that make them vulnerable to economic conditions that affect that industry. Insurance companies are subject to similar risks as banks, including adverse economic conditions, changes in interest rates, increased competition and government regulation, but insurance companies are more at risk from changes in tax law, government imposed premium rate caps, and catastrophic events, such as earthquakes, floods, hurricanes and terrorist acts. This sector has experienced significant losses in the recent past, and the impact of higher interest rates, more stringent capital requirements, and of recent or future regulation on any individual financial company, or on the sector as a whole, cannot be predicted. In recent years, cyber attacks and technology malfunctions and failures have become increasingly frequent in the financial sector and have caused significant losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Industrials Sector Risk.* The industrials sector can be significantly affected by, among other things, worldwide economic growth, supply and demand for specific products and services, rapid technological developments, international political and economic developments, environmental issues, tariffs and trade barriers, and tax and governmental regulatory policies. As the demand for, or prices of, industrials increase, the value of the Fund's investments generally would be expected to also increase. Conversely, declines in the demand for, or prices of, industrials generally would be expected to contribute to declines in the value of such securities. Such declines may occur quickly and without warning and may negatively impact the value of the Fund and your investment.

**PORTFOLIO HOLDINGS INFORMATION**

Information about the Fund's daily portfolio holdings is available at www.aamlive.com/ETF. A complete description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio holdings is available in the Fund's Statement of Additional Information ("SAI").

**MANAGEMENT**

**Investment Adviser**

Advisors Asset Management, Inc. serves as the investment adviser and has overall responsibility for the general management and administration of the Fund. AAM's headquarters is located at 18925 Base Camp Road, Suite 203, Monument, Colorado 80132. AAM is a registered broker dealer, member FINRA and SIPC, and SEC registered investment adviser. AAM provides portfolio supervisory and evaluation services to AAM-sponsored unit investment trusts registered under the 1940 Act and provides investment advisory services to separately managed accounts, mutual funds, and the Fund. AAM also arranges for sub-advisory, transfer agency, custody, fund administration, distribution and all other services necessary for the Fund to operate. AAM provides oversight of the Sub-Advisers, monitoring of each Sub-Adviser's buying and selling of securities for the Fund, and review of each Sub-Adviser's performance. For the services it provides to the Fund, the Fund pays AAM a unified management fee, which is calculated daily and paid monthly, at an annual rate based on the Fund's average daily net assets as set forth in the table below.

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| | |
|:---|:---|
| **Name of Fund** | **Management Fee** |
| AAM Todd International Intrinsic Value ETF | 0.54% |

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Under the Investment Advisory Agreement (the "Advisory Agreement"), AAM has agreed to pay all expenses of the Fund, except for: the unified management fee paid to AAM, interest charges on any borrowings, dividends, and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution (12b-1) fees and expenses. AAM, in turn, compensates the Sub-Advisers from the management fee it receives.

AAM shall not be liable to the Trust or any shareholder for anything done or omitted by it, except acts or omissions arising out of the Adviser's willful misfeasance, bad faith, or gross negligence in the performance of its duties under the Advisory Agreements or its reckless disregard of its obligations and duties under the Advisory Agreements or for any losses that may be sustained in the purchase, holding, or sale of any security.

A discussion regarding the basis for the Board of Trustees' approval of the Fund's Advisory Agreement will be available in the Fund's Core Financial Statements that will be filed as part of the Fund's first Form N-CSR.

**Sub-Advisers**

*Todd Asset Management LLC*

The Adviser has retained Todd Asset Management LLC to serve as a sub-adviser for the Fund. Todd is responsible for investment decisions and the day-to-day portfolio management of the Fund, subject to the supervision of the Adviser and the Board. Todd is an SEC registered investment adviser. Todd's principal office is located at 101 South 5th Street, Suite 3100, Louisville, Kentucky 40202. Todd was formed in 1998, as Veredus Asset Management LLC ("VAM"). Effective May 1, 2009, VAM combined with Todd Investment Advisors, Inc. ("Todd Investment Advisors"), a registered investment advisor formed in 1979, at which time VAM changed its name to Todd-Veredus Asset Management LLC ("TVAM"). On February 28, 2013, TVAM changed its name to Todd Asset Management LLC. Todd provides investment advisory services to pensions, state or municipal government entities, charitable organizations, Taft-Hartley plans, high net worth individuals, and other business not listed in addition to the Fund. For its services, Todd is paid a fee by the Adviser, which fee is calculated daily and paid monthly, at an annual rate based on the average daily net assets of the Fund of 0.13%.

*Vident Asset Management*

The Adviser has retained Vident Asset Management to serve as a sub-adviser for the Fund. Vident is responsible for trading portfolio securities for the Fund in accordance with instructions provided by Todd Asset Management LLC, including selecting broker-dealers to execute purchase and sale transactions, subject to the supervision of the Adviser and the Board. Vident is an SEC registered investment adviser. Its principal office is located at 1125 Sanctuary Parkway, Suite 515, Alpharetta, Georgia 30009. Vident was formed in 2016 and provides investment advisory services to ETFs, including the Fund. For its services, Vident is paid a fee by the Adviser, which fee is calculated daily and paid monthly, at an annual rate based on the average daily net assets of the Fund, and subject to a minimum annual fee as follows:

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| | | |
|:---|:---|:---|
| **Name of Fund** | **Sub-Advisory Fee** | **Minimum <br>Annual Fee** |
| AAM Todd International Intrinsic Value ETF | 0.05% on the first $250 million; <br>0.045% on the second $250 million; and <br>0.04% on all assets thereafter | $40000 |

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A discussion regarding the basis for the Board of Trustees' approval of the Fund's Sub-Advisory Agreement will be available in the Fund's Core Financial Statements that will be filed as part of the Fund's first Form N-CSR.

**Manager of Managers Structure**

The Fund and the Adviser have received exemptive relief from the SEC permitting the Adviser (subject to certain conditions and the approval of the Board) to change or select sub-advisers without obtaining shareholder approval. The relief also permits the Adviser to materially amend the terms of agreements with a sub-advisers (including an increase in the fee paid by the Adviser to the sub-advisers (and not paid by the Fund)) or to continue the employment of a sub-advisers after an event that would otherwise cause the automatic termination of services with Board approval, but without shareholder approval. Shareholders will be notified of any sub-advisers changes.

**Portfolio Managers**

The below individuals are the Fund's Portfolio Managers and are jointly and primarily responsible for day-to-day management of the Fund's portfolios as described below.

Curtiss M. Scott Jr, CFA is a native of Louisville, Kentucky, and a graduate of the University of Louisville where he earned a BS in Commerce in 1976. He also holds the Chartered Financial Analyst® designation (1982). In 1978, Mr. Scott started his investment career with First Kentucky National as an equity securities analyst. In 1986, he moved to New York to manage mutual funds for

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Oppenheimer Management and later joined Lazard Freres Asset Management as a portfolio manager for Taft-Hartley and Corporate Accounts. Mr. Scott joined Capitoline Investment Services in 1991 as Vice President and Sr. Portfolio Manager. In 1993, he joined Executive Investment Advisors as Managing Director and Sr. Portfolio Manager. Mr. Scott joined Todd Investment Advisors, Inc., an affiliate which combined with the Adviser in 2009 ("Todd Investment Advisors"), in 1996 as a member of the equity management team and was made President of Todd Investment Advisors in January 2006. Mr. Scott is an active member of the Louisville Society of Financial Analysts and the CFA Institute.

John J. White, CFA, is a native of Long Island, New York. He received his BS in Finance from Boston College in 1982 and MBA from Baruch College in 1988. Mr. White holds the Chartered Financial Analyst® designation (1999). Mr. White started his investment career in New York, working for Metropolitan Life Insurance Company as an equity analyst until 1987, and then moved to Smith Barney where he was an equity strategist until 1994. Mr. White was Senior Managing Director and served as Director of Research and Director of Equity Strategy for Wachovia Securities in Charlotte prior to joining Todd Investment Advisors in 2002 as a member of the equity management team. Mr. White is an active member of the Louisville Society of Financial Analysts, the CFA Institute, and a board member of the Kentucky Association for Corporate Growth.

John C. Holden, CFA, is a native of Louisville, Kentucky, and a graduate of the University of Louisville where he earned a BS in Business Administration in 1985. He also holds the Chartered Financial Analyst® designation (1990). Mr. Holden started his investment career in 1983 with First Kentucky Trust as Portfolio Manager/Analyst, moving to Star Bank as Senior Portfolio Manager/Analyst. He later joined Mellon Private Asset Management as Vice President, Senior Portfolio Manager. Mr. Holden served as head of the equity team of Fort Washington Investment Advisors, Inc., as Managing Director and Senior Portfolio Manager and then moved to Todd Investment Advisors in 2006 as a member of the equity management team. Mr. Holden is an active member of the Louisville Society of Financial Analysts and the CFA Institute.

Shaun C. Siers, CFA, is a native of Sellersburg, Indiana, and a graduate of the University of Louisville where he earned a BSBA in Finance in 2007 and an MBA with Distinction in 2009. He also holds the Chartered Financial Analyst® designation (2014). Mr. Siers started his investment career with Todd Investment Advisors as an intern in the summer of 2006 while earning his degree. He was hired as a Research Analyst in August 2007, promoted to Portfolio Manager in October 2014 and made partner in January 2018. Mr. Siers is an active member of the CFA Society of Louisville and the CFA Institute.

Austin Wen, CFA, is a Senior Portfolio Manager at Vident. Mr. Wen has over a decade of investment experience. At Vident, Mr. Wen specializes in portfolio management and trading of equity, derivative, and commodities-based portfolios, as well as risk monitoring and investment analysis. Previously, he was a financial analyst for Vident Financial, focusing on the development and review of various investment solutions. He began his career as a State Examiner for the Georgia Department of Banking and Finance. Mr. Wen obtained a BA in Finance from the University of Georgia and holds the Chartered Financial Analyst designation.

Rafael Zayas, CFA, has over 15 years of trading and portfolio management experience in global equity products and ETFs. He is Senior Vice President, Head of Portfolio Management & Trading. Previously, Mr. Zayas focused on international equities, specializing in managing and trading developed, emerging, and frontier market portfolios. Prior to joining Vident, Mr. Zayas was a Portfolio Manager at Russell Investments for over $5 billion in quantitative strategies across global markets, including emerging, developed, and frontier markets and listed alternatives. Before that, he was an equity Portfolio Manager at BNY Mellon Asset Management, where he was responsible for $150 million in internationally listed global equity ETFs and assisted in managing $3 billion of global ETF assets. Mr. Zayas holds a BS in Electrical Engineering from Cornell University. He also holds the Chartered Financial Analyst designation.

Yin Bhuyan has over 12 years of expertise in trading and portfolio management, specializing in options and defined outcome ETFs. Prior to joining Vident, Ms. Bhuyan was the Director of ETF Portfolio Management at Milliman Financial Risk Management, LLC, where she focused on managing defined outcome ETFs and index tracking ETFs. She led the ETF portfolio management team, significantly contributing to the growth of assets to $16 billion in defined outcome ETFs. Before that, she traded in the S&P Options Pit at Cboe, specializing in volatility arbitrage and delta-neutral hedging strategies. Ms. Bhuyan holds a Bachelor of Science in Economics from National Taipei University and an MBA from the University of Illinois at Chicago.

The Fund's SAI provides additional information about the portfolio managers' compensation structure, other accounts managed by the portfolio managers, and the portfolio managers' ownership of Shares.

**Prior Performance for Todd Asset Management** 

The performance information shown below represents the prior performance of the Fund's strategy as managed by Todd in separately managed accounts with substantially the same investment objectives, policies, and investment strategies as the Fund (collectively, the "International Intrinsic Value Composite"). The Portfolio Managers have been responsible for the management of such accounts continuously since October 1, 2005 with the same degree of discretion as with respect to the Fund. The performance below reflects the asset-weighted composite of time-weighted returns for all such International Intrinsic Value Composite accounts.

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All returns of the International Intrinsic Value Composite are presented after the deduction of all actual fees and expenses, including sales loads or placement fees (there were no such sales loads or placement fees applied to the International Intrinsic Value Composite accounts), investment advisory fees, brokerage commissions, fees and expenses of underlying investments, and execution costs paid by the composite accounts without provision for federal or state income taxes.

The fees and expenses for substantially all of the separately managed accounts included in the International Intrinsic Value Composite were lower at times than what is estimated for the Fund; therefore, if the composite accounts had the Fund's estimated expense structure, the performance results of the International Intrinsic Value Composite during that time period would have been lower.

The separately managed accounts included in the International Intrinsic Value Composite are not registered investment funds in the U.S. and are not subject to the same types of expenses as the Fund or to the diversification requirements, specific tax restrictions, and investment limitations imposed on the Fund by the 1940 Act, or the Code, which, if applicable, may have adversely affected the performance results of the International Intrinsic Value Composite.

Investors should be aware that the use of a methodology different from that used to calculate the Fund's performance could result in different performance data. The methodology used to calculate the International Intrinsic Value Composite's performance information differs from the SEC required methodology used by the Fund to calculate its performance.

Prior performance of the International Intrinsic Value Composite is not indicative of the Fund's future performance.

**The performance data below is for the International Intrinsic Value Composite and is not the performance results of the Fund.**

**Average Annual Total Returns**

**For the Periods Ended December 31, 2024**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **1 Year** | **3 Year** | **5 Year** | **10 Year** |
| International Intrinsic Value Composite – Net\* | 4.33% | 1.56% | 5.01% | 4.55% |
| MSCI ACWI Ex-US (net)<br>(reflects no deduction for fees, expenses, or taxes) | 5.53% | 0.82% | 4.10% | 4.80% |

---

<sup>\*</sup>The net returns for the International Intrinsic Value Composite are shown net of all fees and expenses.

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Net Monthly Total Returns of the International Intrinsic Value Composite** <sup>(1)</sup> | **Annual Total Returns** | **Annual Total Returns** |
| | **Jan** | **Feb** | **Mar** | **Apr** | **May** | **Jun** | **Jul** | **Aug** | **Sep** | **Oct** | **Nov** | **Dec** | **Inter-national Intrinsic Value Composite (net)** | **MSCI**<br>**ACWI**<br>**ex-US**<br>**(net)**<sup>(2)</sup> |
| **2024** | -1.48% | 3.39% | 4.15% | -1.43% | 4.07% | -3.02% | 3.49% | 1.80% | 1.93% | -4.17% | -0.28% | -3.67% | 4.33% | 5.53% |
| **2023** | 9.11% | -3.70% | -0.25% | -0.28% | -4.51% | 8.10% | 4.78% | -3.37% | -2.25% | -3.91% | 6.78% | 3.99% | 13.93% | 15.62% |
| **2022** | 0.28% | -5.62% | 0.22% | -7.56% | 4.83% | -10.12% | 3.39% | -4.01% | -8.79% | 5.25% | 13.45% | -1.30% | -11.87% | -16.00% |
| **2021** | 0.04% | 7.04% | 1.75% | 1.99% | 2.66% | -2.38% | -2.17% | 1.78% | -1.83% | 3.35% | -4.78% | 4.07% | 11.49% | 7.83% |
| **2020** | -3.94% | -7.10% | -18.12% | 8.89% | 3.66% | 5.54% | 3.79% | 3.74% | -3.14% | -0.70% | 15.14% | 5.35% | 9.35% | 10.65% |
| **2019** | 10.61% | 1.83% | 0.20% | 3.85% | -7.97% | 8.37% | -0.76% | -3.14% | 2.21% | 3.45% | 2.84% | 4.18% | 27.28% | 21.51% |
| **2018** | 7.21% | -4.69% | -1.94% | -0.01% | -0.12% | -2.30% | 2.72% | -3.53% | 0.89% | -9.64% | 0.15% | -7.77% | -18.42% | -14.20% |
| **2017** | 4.35% | 1.05% | 2.74% | 1.68% | 2.22% | 1.17% | 4.64% | 0.36% | 2.22% | 1.70% | 0.22% | 0.68% | 25.49% | 27.19% |
| **2016** | -8.77% | -1.69% | 7.32% | 0.32% | 0.28% | -4.56% | 4.29% | 0.15% | 1.11% | -1.15% | -1.13% | 1.08% | -3.59% | 4.50% |
| **2015** | -0.83% | 6.84% | -1.64% | 3.07% | 1.17% | -2.26% | 0.47% | -8.02% | -5.21% | 6.76% | -0.38% | -1.72% | -2.74% | -5.66% |

---

<sup>1</sup>The Portfolio Managers have managed the International Intrinsic Value Composite strategy continuously, and in substantially the same manner, since the International Intrinsic Value Composite's inception date of October 1, 2005.

<sup>2</sup>MSCI ACWI ex-US (net) return (reflects no deduction for fees, expenses or taxes).

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**HOW TO BUY AND SELL SHARES**

The Fund issues and redeems Shares at NAV only in Creation Units. Only APs may acquire Shares directly from the Fund, and only APs may tender their Shares for redemption directly to the Fund, at NAV. APs must be a member or participant of a clearing agency registered with the SEC and must execute a Participant Agreement that has been agreed to by the Distributor (defined below), and that has been accepted by the Fund's transfer agent, with respect to purchases and redemptions of Creation Units. Once created, Shares trade in the secondary market in quantities less than a Creation Unit. Most investors buy and sell Shares in secondary market transactions through brokers. Shares are listed for trading on the secondary market on the Exchange and can be bought and sold throughout the trading day like other publicly traded securities.

When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges, and you may pay some or all of the bid-ask spread on your transactions. In addition, because secondary market transactions occur at market prices, you may pay more than NAV when you buy Shares and receive less than NAV when you sell those Shares.

**Book Entry**

Shares are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company ("DTC") or its nominee is the record owner of all outstanding Shares.

Investors owning Shares are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all Shares. DTC's participants include securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of Shares, you are not entitled to receive physical delivery of stock certificates or to have Shares registered in your name, and you are not considered a registered owner of Shares. Therefore, to exercise any right as an owner of Shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other securities that you hold in book entry or "street name" through your brokerage account.

**Frequent Purchases and Redemptions of Shares**

The Fund imposes no restrictions on the frequency of purchases and redemptions of Shares. In determining not to approve a written, established policy, the Board evaluated the risks of market timing activities by Fund shareholders. Purchases and redemptions by APs, who are the only parties that may purchase or redeem Shares directly with the Fund, are an essential part of the ETF process and help keep Share trading prices in line with NAV. As such, the Fund accommodates frequent purchases and redemptions by APs. However, the Board has also determined that frequent purchases and redemptions for cash may increase tracking error and portfolio transaction costs and may lead to the realization of capital gains. To minimize these potential consequences of frequent purchases and redemptions, the Fund employs fair value pricing and may impose transaction fees on purchases and redemptions of Creation Units to cover the custodial and other costs incurred by the Fund in effecting trades. In addition, the Fund and the Adviser reserve the right to reject any purchase order at any time.

**Determination of NAV**

The Fund's NAV is calculated as of the scheduled close of regular trading on the New York Stock Exchange ("NYSE"), generally 4:00 p.m. Eastern time, each day the NYSE is open for business. The NAV is calculated by dividing the Fund's net assets by its Shares outstanding.

In calculating its NAV, the Fund generally values its assets on the basis of market quotations, last sale prices, or estimates of value furnished by a pricing service or brokers who make markets in such instruments. In particular, the Fund generally values equity securities traded on any recognized U.S. or non-U.S. exchange at the last sale price or official closing price on the exchange or system on which they are principally traded. If such information is not available for a security held by the Fund or is determined to be unreliable, the security will be valued by the Adviser at fair value pursuant to procedures established by the Adviser and approved by the Board (as described below).

**Fair Value Pricing**

The Adviser has been designated by the Board as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. In its capacity as valuation designee, the Adviser has adopted procedures and methodologies to fair value Fund securities whose market prices are not "readily available" or are deemed to be unreliable. For example, such circumstances may arise when: (i) a security has been de-listed or has had its trading halted or suspended; (ii) a security's primary pricing source is unable or unwilling to provide a price; (iii) a security's primary trading market is closed during regular market hours; or (iv) a security's value is materially affected by events occurring after the close of the security's primary trading market. The Board has appointed the Adviser as the Fund's valuation designee to perform all fair valuations of the Fund's portfolio investments, subject to the Board's oversight. Accordingly, the Adviser has established procedures for its fair valuation of the Fund's portfolio investments. Generally, when fair valuing a security held by the Fund, the Adviser will take into account all reasonably available information that may be relevant to a particular valuation including, but not limited to, fundamental analytical data regarding the issuer, information relating to the issuer's business, recent trades or offers

------

of the security, general and/or specific market conditions and the specific facts giving rise to the need to fair value the security. Fair value determinations are made in good faith and in accordance with the fair value methodologies established by the Adviser. Due to the subjective and variable nature of determining the fair value of a security or other investment, there can be no assurance that the Adviser's fair value will match or closely correlate to any market quotation that subsequently becomes available or the price quoted or published by other sources. In addition, the Fund may not be able to obtain the fair value assigned to the security upon the sale of such security.

**Delivery of Shareholder Documents – Householding**

Householding is an option available to certain investors of the Fund. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding for the Fund is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, please contact your broker-dealer. If you are currently enrolled in householding and wish to change your householding status, please contact your broker-dealer.

**Investments by Registered Investment Companies**

Section 12(d)(1) of the 1940 Act restricts investments by registered investment companies ("Investing Funds") in the securities of other investment companies, including Shares of the Fund. Investing Funds are permitted to invest in the Fund beyond the limits set forth in Section 12(d)(1) subject to certain terms and conditions set forth in Rule 12d1-4 under the 1940 Act, including that such Investing Funds enter into an agreement with the Fund setting forth the material terms of the investment in such Fund. However, Investing Funds generally may not rely on Rule 12d1-4 to invest in a Fund beyond the limits set forth in Section 12(d)(1) if the acquired Fund also invests significantly in other investment companies in reliance on and compliance with the conditions set forth in Rule 12d1-4. Investing Funds may also invest in a Fund beyond the limits of Section 12(d)(1) in reliance on Section 12(d)(1)(F) and Rule 12d1-3 under the 1940 Act provided, among other conditions, the Investing Fund, together with its affiliates, acquires no more than three percent of the outstanding voting stock of the acquired Fund.

**DIVIDENDS, DISTRIBUTIONS, AND TAXES**

**Dividends and Distributions**

The Fund intends to pay out dividends, if any, and distribute any net realized capital gains to its shareholders at least annually. The Fund will declare and pay capital gain distributions, if any, in cash. Distributions in cash may be reinvested automatically in additional whole Shares only if the broker through whom you purchased Shares makes such option available. Your broker is responsible for distributing the income and capital gain distributions to you.

**Taxes** 

The following discussion is a summary of certain important U.S. federal income tax considerations generally applicable to investments in the Fund. Your investment in the Fund may have other tax implications. Please consult your tax advisor about the tax consequences of an investment in Shares, including the possible application of foreign, state, and local tax laws. This summary does not apply to Shares held in an IRA or other tax-qualified plans, which are generally not subject to current tax. Transactions relating to Shares held in such accounts may, however, be taxable at some time in the future. This summary is based on current tax laws, which may change.

The Fund intends to elect and qualify each year for treatment as a regulated investment company ("RIC") under the Internal Revenue Code of 1986 (the "Code"). If the Fund meets certain minimum distribution requirements, a RIC is not subject to tax at the fund level on income and gains from investments that are timely distributed to shareholders. However, the Fund's failure to qualify as a RIC or to meet minimum distribution requirements would result (if certain relief provisions were not available) in fund-level taxation and, consequently, a reduction in income available for distribution to shareholders.

Unless your investment in Shares is made through a tax-exempt entity or tax-advantaged account, such as an IRA, you need to be aware of the possible tax consequences when the Fund makes distributions, when you sell your Shares listed on the Exchange, and when you purchase or redeem Creation Units (APs only).

**Taxes on Distributions** 

The Fund intends to distribute, at least annually, substantially all of its net investment income and net capital gains. For federal income tax purposes, distributions of investment income are generally taxable as ordinary income or qualified dividend income. Taxes on distributions of capital gains (if any) are determined by how long the Fund owned the investments that generated them, rather than how long a shareholder has owned his or her Shares. Sales of assets held by the Fund for more than one year generally result in long-term capital gains and losses, and sales of assets held by the Fund for one year or less generally result in short-term capital gains and losses. Distributions of the Fund's net capital gain (the excess of net long-term capital gains over net short-term capital losses) that are reported by the Fund as capital gain dividends ("Capital Gain Dividends") will be taxable as long-term capital gains, which for non-corporate shareholders are subject to tax at reduced rates of up to 20% (lower rates apply to individuals in lower tax brackets).

------

Distributions of short-term capital gain will generally be taxable as ordinary income. Dividends and distributions are generally taxable to you whether you receive them in cash or reinvest them in additional Shares.

Distributions reported by the Fund as "qualified dividend income" are generally taxed to non-corporate shareholders at rates applicable to long-term capital gains, provided holding period and other requirements are met. "Qualified dividend income" generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that the Fund received in respect of stock of certain foreign corporations may be qualified dividend income if that stock is readily tradable on an established U.S. securities market. Corporate shareholders may be entitled to a dividends received deduction for the portion of dividends they receive from the Fund that are attributable to dividends received by the Fund from U.S. corporations, subject to certain limitations. Dividends received by the Fund from a real estate investment trust ("REIT") may be treated as qualified dividend income generally only to the extent so reported by such REIT. The Fund's investment strategy may limit the amount of distributions eligible for treatment as qualified dividend income in the hands of non-corporate shareholders or eligible for the dividends received deduction for corporate shareholders. Shortly after the close of each calendar year, you will be informed of the amount and character of any distributions received from the Fund.

U.S. individuals with income exceeding specified thresholds are subject to a 3.8% tax on all or a portion of their "net investment income," which includes interest, dividends, and certain capital gains (generally including capital gains distributions and capital gains realized on the sale of Shares). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts.

In general, your distributions are subject to federal income tax for the year in which they are paid. Certain distributions paid in January, however, may be treated as paid on December 31 of the prior year. Distributions are generally taxable even if they are paid from income or gains earned by the Fund before your investment (and thus were included in the Shares' NAV when you purchased your Shares).

You may wish to avoid investing in the Fund shortly before a dividend or other distribution, because such a distribution will generally be taxable even though it may economically represent a return of a portion of your investment.

If the Fund's distributions exceed its earnings and profits, all or a portion of the distributions made for a taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable, but will reduce each shareholder's cost basis in Shares and result in a higher capital gain or lower capital loss when the Shares are sold. After a shareholder's basis in Shares has been reduced to zero, distributions in excess of earnings and profits in respect of those Shares will be treated as gain from the sale of the Shares.

If you are neither a resident nor a citizen of the United States or if you are a foreign entity, distributions (other than Capital Gain Dividends) paid to you by the Fund will generally be subject to a U.S. withholding tax at the rate of 30%, unless a lower treaty rate applies. Gains from the sale or other disposition of Shares by non-U.S. shareholders generally are not subject to U.S. taxation, unless you are a nonresident alien individual who is physically present in the U.S. for 183 days or more per year. The Fund may, under certain circumstances, report all or a portion of a dividend as an "interest-related dividend" or a "short-term capital gain dividend," which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Different tax consequences may result if you are a foreign shareholder engaged in a trade or business within the United States or if a tax treaty applies.

The Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) generally is required to withhold and remit to the U.S. Treasury a percentage (currently 24%) of the taxable distributions and sale proceeds paid to any shareholder who fails to properly furnish a correct taxpayer identification number, who has underreported dividend or interest income, or who fails to certify that the shareholder is not subject to such withholding.

**Taxes When Shares are Sold on the Exchange**

Provided that a shareholder holds Shares as capital assets, any capital gain or loss realized upon a sale of Shares generally is treated as a long-term capital gain or loss if Shares have been held for more than one year and as a short-term capital gain or loss if Shares have been held for one year or less. However, any capital loss on a sale of Shares held for six months or less is treated as long-term capital loss to the extent of Capital Gain Dividends paid with respect to such Shares. Any loss realized on a sale will be disallowed to the extent Shares of the Fund are acquired, including through reinvestment of dividends, within a 61-day period beginning 30 days before and ending 30 days after the disposition of Shares. The ability to deduct capital losses may be limited.

The cost basis of Shares of the Fund acquired by purchase will generally be based on the amount paid for the Shares and then may be subsequently adjusted for other applicable transactions as required by the Code. The difference between the selling price and the cost basis of Shares generally determines the amount of the capital gain or loss realized on the sale or exchange of Shares. Contact the broker through whom you purchased your Shares to obtain information with respect to the available cost basis reporting methods and elections for your account.

------

**Taxes on Purchases and Redemptions of Creation Units** 

An AP having the U.S. dollar as its functional currency for U.S. federal income tax purposes who exchanges securities for Creation Units generally recognizes a gain or a loss. The gain or loss will be equal to the difference between the value of the Creation Units at the time of the exchange and the exchanging AP's aggregate basis in the securities delivered, plus the amount of any cash paid for the Creation Units. An AP who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanging AP's basis in the Creation Units and the aggregate U.S. dollar market value of the securities received, plus any cash received for such Creation Units. The IRS may assert, however, that a loss that is realized upon an exchange of securities for Creation Units may not be currently deducted under the rules governing "wash sales" (for an AP who does not mark-to-market its holdings), or on the basis that there has been no significant change in economic position. APs exchanging securities should consult their own tax advisor with respect to whether the wash sales rule applies and when a loss might be deductible.

**Foreign Investments by the Fund** 

Interest and other income received by the Fund with respect to foreign securities may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If as of the close of a taxable year more than 50% of the value of the Fund's assets consists of certain foreign stock or securities, the Fund will be eligible to elect to "pass through" to investors the amount of foreign income and similar taxes (including withholding taxes) paid by the Fund during that taxable year. This means that investors would be considered to have received as additional income their respective Shares of such foreign taxes, but may be entitled to either a corresponding tax deduction in calculating taxable income, or, subject to certain limitations, a credit in calculating federal income tax. If the Fund does not so elect, the Fund will be entitled to claim a deduction for certain foreign taxes incurred by the Fund. The Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) will notify you if it makes such an election and provide you with the information necessary to reflect foreign taxes paid on your income tax return.

*The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. You also may be subject to state and local tax on Fund distributions and sales of Shares. Consult your personal tax advisor about the potential tax consequences of an investment in Shares under all applicable tax laws. For more information, please see the section entitled "Federal Income Taxes" in the SAI.* 

**DISTRIBUTION** 

The Distributor, Quasar Distributors, LLC, a wholly-owned subsidiary of Foreside Financial Group, LLC (d/b/a ACA Group), is a broker-dealer registered with the SEC. The Distributor distributes Creation Units for the Fund on an agency basis and does not maintain a secondary market in Shares. The Distributor has no role in determining the policies of the Fund or the securities that are purchased or sold by the Fund. The Distributor's principal address is Three Canal Plaza, Suite 100, Portland, Maine 04101.

The Board has adopted a Distribution and Service Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Plan, the Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year for certain distribution-related activities and shareholder services.

No Rule 12b-1 fees are currently paid by the Fund, and there are no plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because the fees are paid out of the Fund's assets, over time these fees will increase the cost of your investment and may cost you more than certain other types of sales charges.

**PREMIUM/DISCOUNT INFORMATION**

Information regarding how often Shares are traded on the Exchange at a price above (*i.e.*, at a premium) or below (*i.e.*, at a discount) the NAV per Share is available, free of charge, on the Fund's website at www.aamlive.com/ETF.

**ADDITIONAL NOTICES**

Shares are not sponsored, endorsed, or promoted by the Exchange. The Exchange is not responsible for, nor has it participated in the determination of the timing, prices, or quantities of Shares to be issued, nor in the determination or calculation of the equation by which Shares are redeemable. The Exchange has no obligation or liability to owners of Shares in connection with the administration, marketing, or trading of Shares.

Without limiting any of the foregoing, in no event shall the Exchange have any liability for any lost profits or indirect, punitive, special, or consequential damages even if notified of the possibility thereof.

The Adviser and the Fund make no representation or warranty, express or implied, to the owners of Shares or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly.

**FINANCIAL HIGHLIGHTS**

Financial information is not available because the Fund has not commenced operations prior to the date of this Prospectus.

------

**AAM TODD INTERNATIONAL INTRINSIC VALUE ETF**

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| | | | |
|:---|:---|:---|:---|
| **Adviser** | **Advisors Asset Management, Inc.** <br>18925 Base Camp Road, Suite 203 <br>Monument, Colorado 80132 | **Independent Registered Public Accounting Firm** | **Cohen & Company, Ltd.**<br>1835 Market St., Suite 310<br>Philadelphia, Pennsylvania 19103 |
| **Sub-Advisers** | **Todd Asset Management LLC**<br>101 South 5th Street, Suite 3100<br>Louisville, Kentucky 40202 | **Transfer Agent, Fund Accountant and Fund Administrator** | **U.S. Bancorp Fund Services, LLC** <br>**d/b/a U.S. Bank Global Fund Services**<br>615 East Michigan Street <br>Milwaukee, Wisconsin 53202 |
|  | **Vident Asset Management**<br>1125 Sanctuary Parkway, Suite 515<br>Alpharetta, Georgia 30009 | **Distributor** | **Quasar Distributors, LLC**<br>Three Canal Plaza, Suite 100 <br>Portland, Maine 04101 |
| **Custodian** | **U.S. Bank National Association** <br>1555 North Rivercenter Drive, Suite 302<br>Milwaukee, Wisconsin 53212 | **Legal Counsel** | **Morgan, Lewis & Bockius LLP**<br>1111 Pennsylvania Avenue, NW<br>Washington, DC 20004-2541 |

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Investors may find more information about the Fund in the following documents:

**Statement of Additional Information:** The Fund's SAI provides additional details about the investments and techniques of the Fund and certain other additional information. A current SAI dated July 24, 2025 is on file with the SEC and is herein incorporated by reference into this Prospectus. It is legally considered a part of this Prospectus.

**Annual/Semi-Annual Reports:** Additional information about the Fund's investments will be available in the Fund's annual and semi-annual reports to shareholders and in Form N-CSR (when available). In the annual report you will find a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the Fund's prior fiscal year. In Form N-CSR, you will find the Fund's annual and semi-annual financial statements.

You can obtain free copies of these documents, request other information or make general inquiries about the Fund by calling 1-800-617-0004.

Shareholder reports and other information about the Fund are also available:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Free of charge from the SEC's EDGAR database on the SEC's website at http://www.sec.gov; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Free of charge from the Fund's Internet web site at www.aamlive.com/ETF; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;For a fee, by e-mail request to publicinfo@sec.gov.

(SEC Investment Company Act File No. 811-22668)

------

**AAM TODD INTERNATIONAL INTRINSIC VALUE ETF (TIIV)**

a series of ETF Series Solutions

Listed on NYSE Arca, Inc.

**STATEMENT OF ADDITIONAL INFORMATION**

**July 24, 2025**

This Statement of Additional Information ("SAI") is not a prospectus and should be read in conjunction with the Prospectus for the AAM Todd International Intrinsic Value ETF, (the "Fund"), a series of ETF Series Solutions (the "Trust"), dated July 24, 2025, as may be supplemented from time to time (the "Prospectus"). Capitalized terms used herein that are not defined have the same meaning as in the Prospectus, unless otherwise noted. A copy of the Prospectus may be obtained without charge, by calling the Fund at 1-800-617-0004 or visiting www.aamlive.com/ETF.

The Fund's audited financial statements for the most recent fiscal year (when available) are incorporated into this SAI by reference to the Fund's most recent Annual Core Financial Statements (File No. 811-22668), which will be filed as part of the Fund's Form N-CSR. When available, you may obtain a copy of the Fund's Core Financial Statements and the Fund's Annual Report at no charge by contacting the Fund at the address or phone number noted above.

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [General Information About](#i19dbd46208f2468aa3d45c0be69b12c6_7)[t](#i19dbd46208f2468aa3d45c0be69b12c6_7)[he Trust](#i19dbd46208f2468aa3d45c0be69b12c6_7) | [2](#i19dbd46208f2468aa3d45c0be69b12c6_7) |
| [Additional Information About Investment Objectives, Policies, and Related Risks](#i19dbd46208f2468aa3d45c0be69b12c6_10) | [2](#i19dbd46208f2468aa3d45c0be69b12c6_10) |
| [Investment Restrictions](#i19dbd46208f2468aa3d45c0be69b12c6_13) | [11](#i19dbd46208f2468aa3d45c0be69b12c6_13) |
| [Exchange Listing and Trading](#i19dbd46208f2468aa3d45c0be69b12c6_16) | [12](#i19dbd46208f2468aa3d45c0be69b12c6_16) |
| [Management of the Trust](#i19dbd46208f2468aa3d45c0be69b12c6_19) | [12](#i19dbd46208f2468aa3d45c0be69b12c6_19) |
| [Principal Shareholders, Control Persons, and Management Ownership](#i19dbd46208f2468aa3d45c0be69b12c6_22) | [17](#i19dbd46208f2468aa3d45c0be69b12c6_22) |
| [Codes of Ethics](#i19dbd46208f2468aa3d45c0be69b12c6_25) | [17](#i19dbd46208f2468aa3d45c0be69b12c6_25) |
| [Proxy Voting Policies](#i19dbd46208f2468aa3d45c0be69b12c6_28) | [17](#i19dbd46208f2468aa3d45c0be69b12c6_28) |
| [Investment Adviser and Sub-Adviser](#i19dbd46208f2468aa3d45c0be69b12c6_31)s | [17](#i19dbd46208f2468aa3d45c0be69b12c6_31) |
| [Portfolio Managers](#i19dbd46208f2468aa3d45c0be69b12c6_34) | [19](#i19dbd46208f2468aa3d45c0be69b12c6_34) |
| [The Distributor](#i19dbd46208f2468aa3d45c0be69b12c6_37) | [20](#i19dbd46208f2468aa3d45c0be69b12c6_37) |
| [The Transfer Agent and Administrator](#i19dbd46208f2468aa3d45c0be69b12c6_40) | [21](#i19dbd46208f2468aa3d45c0be69b12c6_40) |
| [Custodian and Securities Lending Agent](#i19dbd46208f2468aa3d45c0be69b12c6_43) | [21](#i19dbd46208f2468aa3d45c0be69b12c6_43) |
| [Legal Counsel](#i19dbd46208f2468aa3d45c0be69b12c6_46) | [22](#i19dbd46208f2468aa3d45c0be69b12c6_46) |
| [Independent Registered Public Accounting Firm](#i19dbd46208f2468aa3d45c0be69b12c6_49) | [22](#i19dbd46208f2468aa3d45c0be69b12c6_49) |
| [Portfolio Holdings Disclosure Policies and Procedures](#i19dbd46208f2468aa3d45c0be69b12c6_52) | [22](#i19dbd46208f2468aa3d45c0be69b12c6_52) |
| [Description of Shares](#i19dbd46208f2468aa3d45c0be69b12c6_55) | [22](#i19dbd46208f2468aa3d45c0be69b12c6_55) |
| [Limitation of Trustees' Liability](#i19dbd46208f2468aa3d45c0be69b12c6_58) | [23](#i19dbd46208f2468aa3d45c0be69b12c6_58) |
| [Brokerage Transactions](#i19dbd46208f2468aa3d45c0be69b12c6_61) | [23](#i19dbd46208f2468aa3d45c0be69b12c6_61) |
| [Portfolio Turnover Rate](#i19dbd46208f2468aa3d45c0be69b12c6_64) | [24](#i19dbd46208f2468aa3d45c0be69b12c6_64) |
| [Book Entry Only System](#i19dbd46208f2468aa3d45c0be69b12c6_67) | [24](#i19dbd46208f2468aa3d45c0be69b12c6_67) |
| [Purchase and Redemption of Shares in Creation Units](#i19dbd46208f2468aa3d45c0be69b12c6_70) | [25](#i19dbd46208f2468aa3d45c0be69b12c6_70) |
| [Determination of Net Asset Value](#i19dbd46208f2468aa3d45c0be69b12c6_73) | [30](#i19dbd46208f2468aa3d45c0be69b12c6_73) |
| [Dividends and Distributions](#i19dbd46208f2468aa3d45c0be69b12c6_76) | [30](#i19dbd46208f2468aa3d45c0be69b12c6_76) |
| [Federal Income Taxes](#i19dbd46208f2468aa3d45c0be69b12c6_79) | [31](#i19dbd46208f2468aa3d45c0be69b12c6_79) |
| [Financial Statements](#i19dbd46208f2468aa3d45c0be69b12c6_82) | [37](#i19dbd46208f2468aa3d45c0be69b12c6_82) |
| [Appendix A: Proxy Voting Policies of Advisors Asset Management, Inc](#i19dbd46208f2468aa3d45c0be69b12c6_85). | [A](#i19dbd46208f2468aa3d45c0be69b12c6_85)-1 |
| [Appendix B: Proxy Voting Guidelines of Glass Lewis](#i19dbd46208f2468aa3d45c0be69b12c6_88) | [B](#i19dbd46208f2468aa3d45c0be69b12c6_88)-1 |

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**GENERAL INFORMATION ABOUT THE TRUST**

The Trust is an open-end management investment company consisting of multiple investment series. This SAI relates to the Fund. The Trust was organized as a Delaware statutory trust on February 9, 2012. The Trust is registered with the U.S. Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (together with the rules and regulations adopted thereunder, as amended, the "1940 Act"), as an open-end management investment company and the offering of the Fund's shares ("Shares") is registered under the Securities Act of 1933, as amended (the "Securities Act"). The Trust is governed by its Board of Trustees (the "Board").

Advisors Asset Management, Inc. ("AAM" or the "Adviser") serves as the investment adviser for the Fund. Vident Asset Management and Todd Asset Management LLC serve as a sub-advisers to the Fund (each, a "Sub-Adviser" and, together, the "Sub-Advisers"). The investment objective of the Fund is as stated in the Fund's Prospectus under "Investment Objective."

The Fund offers and issues Shares at their net asset value ("NAV") only in aggregations of a specified number of Shares (each, a "Creation Unit"). The Fund generally issues Shares in exchange for (a)(i) a basket of securities ("Deposit Securities") and/or (ii) the cash value (*i.e.*, the cash in lieu amount) of any or all of the Deposit Securities ("Deposit Cash") and (b) a specified cash payment ("Cash Component"). The Fund also generally redeems its Shares only in Creation Unit aggregations for (a)(i) a basket of securities included in its portfolio ("Fund Securities") and/or (ii) the cash value (*i.e.*, the cash in lieu amount) of the Fund Securities and (b) a specified cash payment ("Cash Redemption Amount"). The Trust reserves the right to permit or require the substitution of a cash in lieu amount to replace any Deposit Security or any Fund Security in connection with the purchase or redemption, respectively, of a Creation Unit. Shares are listed on the NYSE Arca, Inc. (the "Exchange") and trade on the Exchange at market prices that may differ from the Shares' NAV. Shares are also redeemable only in Creation Unit aggregations, primarily for a basket of Deposit Securities together with a Cash Component. A Creation Unit of the Fund generally consists of 10,000 Shares, though this may change from time to time. As a practical matter, only institutions or large investors purchase or redeem Creation Units. Except when aggregated in Creation Units, Shares are not redeemable securities.

Shares may be issued in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to a specified percentage of the value of the missing Deposit Securities, as set forth in the Participant Agreement (as defined below). The Trust may impose a transaction fee for each creation or redemption. In all cases, such fees will be limited in accordance with the requirements of the SEC applicable to management investment companies offering redeemable securities. As in the case of other publicly traded securities, brokers' commissions on transactions in the secondary market will be based on negotiated commission rates at customary levels.

**ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES, POLICIES, AND RELATED RISKS**

The Fund's investment objective and principal investment strategies are described in the Prospectus. The following information supplements, and should be read in conjunction with, the Prospectus. For a description of certain permitted investments, see "<u>Description of Permitted Investments</u>" in this SAI.

With respect to the Fund's investments, unless otherwise noted, if a percentage limitation on investment is adhered to at the time of investment or contract, a subsequent increase or decrease as a result of market movement or redemption will not result in a violation of such investment limitation.

**Diversification**

The Fund is "diversified" within the meaning of the 1940 Act. Under applicable federal laws, to qualify as a diversified fund, the Fund, with respect to 75% of its total assets, may not invest greater than 5% of its total assets in any one issuer and may not hold greater than 10% of the securities of one issuer, other than investments in cash and cash items (including receivables), U.S. government securities, and securities of other investment companies. The remaining 25% of the Fund's total assets do not need to be "diversified" and may be invested in securities of a single issuer, subject to other applicable laws. The diversification of the Fund's holdings is measured at the time the Fund purchases a security. However, if the Fund purchases a security and holds it for a period of time, the security may become a larger percentage of the Fund's total assets due to movements in the financial markets. If the market affects several securities held by the Fund, the Fund may have a greater percentage of its assets invested in securities of a single issuer or a small number of issuers. However, the Fund intends to satisfy the asset diversification requirements for qualification as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). See "<u>Federal Income Taxes</u>" below for details.

**General Risks**

The value of the Fund's portfolio securities may fluctuate with changes in the financial condition of an issuer or counterparty, changes in specific economic or political conditions that affect a particular security or issuer and changes in general economic or political conditions. An investor in the Fund could lose money over short or long periods of time.

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There can be no guarantee that a liquid market for the securities held by the Fund will be maintained. The existence of a liquid trading market for certain securities may depend on whether dealers will make a market in such securities. There can be no assurance that a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be sold and the value of Shares will be adversely affected if trading markets for the Fund's portfolio securities are limited or absent, or if bid-ask spreads are wide.

***Recent Events.*** Beginning in the first quarter of 2020, financial markets in the United States and around the world experienced extreme and, in many cases, unprecedented volatility and severe losses due to the global pandemic caused by COVID-19, a novel coronavirus. The pandemic resulted in a wide range of social and economic disruptions, including closed borders, voluntary or compelled quarantines of large populations, stressed healthcare systems, reduced or prohibited domestic or international travel, and supply chain disruptions affecting the United States and many other countries. Some sectors of the economy and individual issuers experienced particularly large losses as a result of these disruptions. Although the immediate effects of the COVID-19 pandemic have dissipated, global markets and economies continue to contend with the ongoing and long-term impact of the COVID-19 pandemic and the resultant market volatility and economic disruptions. It is unknown how long circumstances related to the pandemic will persist, whether they will reoccur in the future, whether efforts to support the economy and financial markets will be successful, and what additional implications may follow from the pandemic. The impact of these events and other epidemics or pandemics in the future could adversely affect Fund performance.

Russia's military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia, certain Russian individuals, banking entities and corporations, and Belarus as a response to Russia's invasion of Ukraine, and may impose sanctions on other countries that provide military or economic support to Russia. The sanctions restrict companies from doing business with Russia and Russian companies, prohibit transactions with the Russian central bank and other key Russian financial institutions and entities, ban Russian airlines and ships from using many other countries' airspace and ports, respectively, and place a freeze on certain Russian assets. The sanctions also removed some Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the electronic network that connects banks globally to facilitate cross-border payments. In addition, the United States and the United Kingdom have banned oil and other energy imports from Russia, and the European Union has banned most Russian crude oil imports and refined petroleum products, with limited exceptions. The extent and duration of Russia's military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions, including cyber attacks) are impossible to predict, but could result in significant market disruptions, including in certain industries or sectors, such as the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund's performance and the value of an investment in the Fund, even if the Fund does not have direct exposure to Russian issuers or issuers in other countries affected by the invasion.

In addition, the foreign policy agenda of the new U.S. administration, which includes the imposition of significant tariffs on foreign countries, including China and long-time U.S. allies, may have a substantial impact on both the U.S. and global economy. In particular, the imposition of increased tariffs by the United States could lead to retaliatory tariffs by foreign countries, increased and prolonged market volatility, and sector-specific downturns in industries reliant on international trade. These efforts may adversely affect the growth of the global economy and, in turn, have a negative impact on the Fund.

***Cyber Security Risk.*** Investment companies, such as the Fund, and their service providers may be subject to operational and information security risks resulting from cyber attacks. Cyber attacks include, among other behaviors, stealing or corrupting data maintained online or digitally, denial of service attacks on websites, the unauthorized release of confidential information or various other forms of cyber security breaches. Cyber attacks affecting the Fund or the Adviser, Sub-Adviser, custodian, transfer agent, intermediaries and other third-party service providers may adversely impact the Fund. For instance, cyber attacks may interfere with the processing of shareholder transactions, impact the Fund's ability to calculate its NAV, cause the release of private shareholder information or confidential company information, impede trading, subject the Fund to regulatory fines or financial losses, and cause reputational damage. The Fund may also incur additional costs for cyber security risk management purposes. Similar types of cyber security risks are also present for issuers of securities in which the Fund invests, which could result in material adverse consequences for such issuers, and may cause the Fund's investments in such portfolio companies to lose value.

**Description of Permitted Investments**

The following are descriptions of the Fund's permitted investments and investment practices and the associated risk factors. The Fund will only invest in any of the following instruments or engage in any of the following investment practices if such investment or activity is consistent with the Fund's investment objective and permitted by the Fund's stated investment policies.

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**Borrowing** 

Although the Fund does not intend to borrow money, the Fund may do so to the extent permitted by the 1940 Act. Under the 1940 Act, the Fund may borrow up to one-third (1/3) of its total assets. The Fund will borrow money only for short-term or emergency purposes. Such borrowing is not for investment purposes and will be repaid by the Fund promptly. Borrowing will tend to exaggerate the effect on NAV of any increase or decrease in the market value of the Fund's portfolio. Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. The Fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

**Depositary Receipts**

To the extent the Fund invests in stocks of foreign corporations, the Fund's investment in securities of foreign companies may be in the form of depositary receipts or other securities convertible into securities of foreign issuers. American Depositary Receipts ("ADRs") are dollar-denominated receipts representing interests in the securities of a foreign issuer, which securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by U.S. banks and trust companies which evidence ownership of underlying securities issued by a foreign corporation. Generally, ADRs in registered form are designed for use in domestic securities markets and are traded on exchanges or over-the-counter in the United States. Global Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs"), and International Depositary Receipts ("IDRs") are similar to ADRs in that they are certificates evidencing ownership of shares of a foreign issuer; however, GDRs, EDRs, and IDRs may be issued in bearer form and denominated in other currencies and are generally designed for use in specific or multiple securities markets outside the U.S. EDRs, for example, are designed for use in European securities markets, while GDRs are designed for use throughout the world. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities.

The Fund will not invest in any Depositary Receipt that the Sub-Adviser deems to be illiquid or for which pricing information is not readily available. The Fund may invest in ADRs with sponsored and unsponsored facilities (also referred to as sponsored and unsponsored ADRs). A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the depositary security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts of the deposited securities. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the value of the Depositary Receipts. The use of a Depositary Receipt may increase tracking error relative to the applicable Index if the Index includes the foreign security instead of the Depositary Receipt.

**Equity Securities**

Equity securities, such as the common stocks of an issuer, are subject to stock market fluctuations and therefore may experience volatile changes in value as market conditions, consumer sentiment or the financial condition of the issuers change. A decrease in value of the equity securities in the Fund's portfolio may also cause the value of Shares to decline.

An investment in the Fund should be made with an understanding of the risks inherent in an investment in equity securities, including the risk that the financial condition of issuers may become impaired or that the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of the Fund's portfolio securities and therefore a decrease in the value of Shares). Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence and perceptions change. These investor perceptions are based on various and unpredictable factors, including expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic, public health, or banking crises.

Holders of common stocks incur more risk than holders of preferred stocks and debt obligations because common stockholders, as owners of the issuer, generally have inferior rights to receive payments from the issuer in comparison with the rights of creditors or holders of debt obligations or preferred stocks. Further, unlike debt securities, which typically have a stated principal amount payable at maturity (whose value, however, is subject to market fluctuations prior thereto), or preferred stocks, which typically have a liquidation preference and which may have stated optional or mandatory redemption provisions, common stocks have neither a fixed principal amount nor a maturity. Common stock values are subject to market fluctuations as long as the common stock remains outstanding.

*When-Issued Securities* **–** A when-issued security is one whose terms are available and for which a market exists, but which has not been issued. When the Fund engages in when-issued transactions, it relies on the other party to consummate the sale. If the other party fails to complete the sale, the Fund may miss the opportunity to obtain the security at a favorable price or yield.

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When purchasing a security on a when-issued basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield changes. At the time of settlement, the value of the security may be more or less than the purchase price. The yield available in the market when the delivery takes place also may be higher than those obtained in the transaction itself. Because the Fund does not pay for the security until the delivery date, these risks are in addition to the risks associated with its other investments.

Decisions to enter into "when-issued" transactions will be considered on a case-by-case basis when necessary to maintain continuity in a company's index membership. The Fund will segregate cash or liquid securities equal in value to commitments for the when-issued transactions. The Fund will segregate additional liquid assets daily so that the value of such assets is equal to the amount of the commitments.

**Types of Equity Securities:**

*Common Stocks* — Common stocks represent units of ownership in a company. Common stocks usually carry voting rights and earn dividends. Unlike preferred stocks, which are described below, dividends on common stocks are not fixed but are declared at the discretion of the company's board of directors.

*Preferred Stocks* — Preferred stocks are also units of ownership in a company. Preferred stocks normally have preference over common stock in the payment of dividends and the liquidation of the company. However, in all other respects, preferred stocks are subordinated to the liabilities of the issuer. Unlike common stocks, preferred stocks are generally not entitled to vote on corporate matters. Types of preferred stocks include adjustable-rate preferred stock, fixed dividend preferred stock, perpetual preferred stock, and sinking fund preferred stock.

Generally, the market values of preferred stock with a fixed dividend rate and no conversion element vary inversely with interest rates and perceived credit risk.

*Rights and Warrants* — A right is a privilege granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued. Rights normally have a short life of usually two to four weeks, are freely transferable and entitle the holder to buy the new common stock at a lower price than the public offering price. Warrants are securities that are usually issued together with a debt security or preferred stock and that give the holder the right to buy proportionate amount of common stock at a specified price. Warrants are freely transferable and are traded on major exchanges. Unlike rights, warrants normally have a life that is measured in years and entitles the holder to buy common stock of a company at a price that is usually higher than the market price at the time the warrant is issued. Corporations often issue warrants to make the accompanying debt security more attractive.

An investment in warrants and rights may entail greater risks than certain other types of investments. Generally, rights and warrants do not carry the right to receive dividends or exercise voting rights with respect to the underlying securities, and they do not represent any rights in the assets of the issuer. In addition, their value does not necessarily change with the value of the underlying securities, and they cease to have value if they are not exercised on or before their expiration date. Investing in rights and warrants increases the potential profit or loss to be realized from the investment as compared with investing the same amount in the underlying securities.

*Small- and Mid-Sized Companies* — Investors in small- and mid-sized companies typically take on greater risk and price volatility than they would by investing in larger, more established companies. This increased risk may be due to the greater business risks of their smaller size, limited markets and financial resources, narrow product lines and frequent lack of management depth. The securities of small- and mid-sized companies are often traded in the over-the-counter market and might not be traded in volumes typical of securities traded on a national securities exchange. Thus, the securities of small and medium capitalization companies are likely to be less liquid, and subject to more abrupt or erratic market movements, than securities of larger, more established companies.

*Tracking Stocks* — The Fund may invest in tracking stocks. A tracking stock is a separate class of common stock whose value is linked to a specific business unit or operating division within a larger company and which is designed to "track" the performance of such business unit or division. The tracking stock may pay dividends to shareholders independent of the parent company. The parent company, rather than the business unit or division, generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same rights as holders of the company's common stock.

**Exchange-Traded Funds ("ETFs")**

The Fund may invest in shares of other investment companies (including ETFs). As the shareholder of another ETF, the Fund would bear, along with other shareholders, its pro rata portion of the other ETF's expenses, including advisory fees. Such expenses are in addition to the expenses the Fund pays in connection with its own operations. The Fund's investments in other ETFs may be limited by applicable law.

Disruptions in the markets for the securities underlying ETFs purchased or sold by the Fund could result in losses on investments in ETFs. ETFs also carry the risk that the price the Fund pays or receives may be higher or lower than the ETF's NAV. ETFs are also subject to certain additional risks, including the risks of illiquidity and of possible trading halts due to market conditions or other reasons, based on the policies of the relevant exchange. ETFs and other investment companies in which the Fund may invest may be leveraged, which would increase the volatility of the Fund's NAV.

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**Illiquid Investments**

The Fund may invest up to an aggregate amount of 15% of its net assets in illiquid investments, as such term is defined by Rule 22e-4 under the 1940 Act. The Fund may not invest in illiquid investments if, as a result of such investment, more than 15% of the Fund's net assets would be invested in illiquid investments. Illiquid investments include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets. The inability of the Fund to dispose of illiquid investments readily or at a reasonable price could impair the Fund's ability to raise cash for redemptions or other purposes. The liquidity of securities purchased by the Fund that are eligible for resale pursuant to Rule 144A, except for certain 144A bonds, will be monitored by the Fund on an ongoing basis. In the event that more than 15% of its net assets are invested in illiquid investments, the Fund, in accordance with Rule 22e-4(b)(1)(iv), will report the occurrence to both the Board and the SEC and seek to reduce its holdings of illiquid investments within a reasonable period of time.

**Investment Company Securities**

The Fund may invest in the securities of other investment companies, including money market funds and ETFs, subject to applicable limitations under Section 12(d)(1) of the 1940 Act and Rule 12d1-4 under the 1940 Act. Investing in another pooled vehicle exposes the Fund to all the risks of that pooled vehicle. Pursuant to Section 12(d)(1), the Fund may invest in the securities of another investment company (the "acquired company") provided that the Fund, immediately after such purchase or acquisition, does not own in the aggregate: (i) more than 3% of the total outstanding voting stock of the acquired company; (ii) securities issued by the acquired company having an aggregate value in excess of 5% of the value of the total assets of the Fund; or (iii) securities issued by the acquired company and all other investment companies (other than treasury stock of the Fund) having an aggregate value in excess of 10% of the value of the total assets of the Fund. To the extent allowed by law or regulation, the Fund may invest its assets in securities of investment companies that are money market funds in excess of the limits discussed above.

The Fund may rely on Section 12(d)(1)(F) and Rule 12d1-3 under the 1940 Act, which provide an exemption from Section 12(d)(1) that allows the Fund to invest all of its assets in other registered funds, including ETFs, if, among other conditions: (a) the Fund, together with its affiliates, acquires no more than three percent of the outstanding voting stock of any acquired fund, and (b) the sales load charged on the Fund's Shares is no greater than the limits set forth in Rule 2341 of the Rules of the Financial Industry Regulatory Authority, Inc. ("FINRA"). In addition, the Fund may invest beyond the limits of Section 12(d)(1) subject to certain terms and conditions set forth in Rule 12d1-4 under the 1940 Act, including that the Fund enters into an agreement with the acquired company.

If the Fund invests in and, thus, is a shareholder of, another investment company, the Fund's shareholders will indirectly bear the Fund's proportionate share of the fees and expenses paid by such other investment company, including advisory fees, in addition to both the management fees payable directly by the Fund to the Fund's own investment adviser and the other expenses that the Fund bears directly in connection with the Fund's own operations.

Section 12(d)(1) of the 1940 Act restricts investments by registered investment companies ("Investing Funds") in the securities of other registered investment companies, including the Fund. The acquisition of Shares by Investing Funds is subject to the restrictions of Section 12(d)(1) of the 1940 Act, except as may be permitted by exemptive rules under the 1940 Act such as Rule 12d1-4 under the 1940 Act, subject to certain terms and conditions, including that the Investing Fund enter into an agreement with the Fund regarding the terms of the investment.

**Non-U.S. Securities.** The Fund is exposed to the risks of non-U.S. securities through its investments in equity securities, including ADRs, of internationally domiciled companies, including in ex-U.S. developed markets and emerging markets, that trade on a U.S. securities exchange. Investments in non-U.S. securities involve certain risks that may not be present in investments in U.S. securities. For example, non-U.S. securities may be subject to currency risks or to political or economic instability. There may be less information publicly available about a non-U.S. issuer than about a U.S. issuer, and a foreign issuer may or may not be subject to uniform accounting, auditing and financial reporting standards and practices comparable to those in the U.S. Investments in non-U.S. securities may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. Other risks of investing in such securities include political or economic instability in the country involved, the difficulty of predicting international trade patterns and the possible imposition of tariffs and exchange controls. The prices of such securities may be more volatile than those of domestic securities. With respect to certain foreign countries, there is a possibility of expropriation of assets or nationalization, imposition of withholding taxes on dividend or interest payments, difficulty in obtaining and enforcing judgments against foreign entities or diplomatic developments which could affect investment in these countries. Losses and other expenses may be incurred in converting between various currencies in connection with purchases and sales of foreign securities. Since foreign exchanges may be open on days when the Fund does not price its Shares, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell Shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

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Non-U.S. stock markets may not be as developed or efficient as, and may be more volatile than, those in the U.S. While the volume of shares traded on non-U.S. stock markets generally has been growing, such markets usually have substantially less volume than U.S. markets. Therefore, the Fund's investment in non-U.S. equity securities may be less liquid and subject to more rapid and erratic price movements than comparable securities listed for trading on U.S. exchanges. Non-U.S. equity securities may trade at price/earnings multiples higher than comparable U.S. securities and such levels may not be sustainable. There may be less government supervision and regulation of foreign stock exchanges, brokers, banks and listed companies abroad than in the U.S. Moreover, settlement practices for transactions in foreign markets may differ from those in U.S. markets. Such differences may include delays beyond periods customary in the U.S. and practices, such as delivery of securities prior to receipt of payment, that increase the likelihood of a failed settlement, which can result in losses to the Fund. The value of non-U.S. investments and the investment income derived from them may also be affected unfavorably by changes in currency exchange control regulations. Foreign brokerage commissions, custodial expenses and other fees are also generally higher than for securities traded in the U.S. This may cause the Fund to incur higher portfolio transaction costs than domestic equity funds. Fluctuations in exchange rates may also affect the earning power and asset value of the foreign entity issuing a security, even one denominated in U.S. dollars. Dividend and interest payments may be repatriated based on the exchange rate at the time of disbursement, and restrictions on capital flows may be imposed.

Set forth below for certain markets in which the Fund may invest are brief descriptions of some of the conditions and risks in each such market.

*Investments in Emerging Markets Securities.* Direct investments in emerging market securities, as well as investments in ADRs with underlying shares organized, listed or domiciled in emerging markets, are subject to additional risks that may not be present for U.S. investments or investments in more developed non-U.S. markets. Such risks may include: (i) greater market volatility; (ii) lower trading volume; (iii) greater social, political and economic uncertainty; (iv) governmental controls on foreign investments and limitations on repatriation of invested capital; (v) the risk that companies may be held to lower disclosure, corporate governance, auditing and financial reporting standards than companies in more developed markets; and (vi) the risk that there may be less protection of property rights than in other countries; Emerging markets are generally less liquid and less efficient than developed securities markets.

*Investments in Europe.* Most developed countries in Western Europe are members of the European Union ("EU"), and many are also members of the European Monetary Union (EMU), which requires compliance with restrictions on inflation rates, deficits, and debt levels. Unemployment in certain European nations is historically high and several countries face significant debt problems. These conditions can significantly affect every country in Europe. The euro is the official currency of the EU. The Fund, through its investments in Europe, may have significant exposure to the euro and events affecting the euro. Recent market events affecting several of the EU member countries have adversely affected the sovereign debt issued by those countries, and ultimately may lead to a decline in the value of the euro. A significant decline in the value of the euro may produce unpredictable effects on trade and commerce generally and could lead to increased volatility in financial markets worldwide.

The UK formally exited from the EU on January 31, 2020 (known as "Brexit"), and effective December 31, 2020, the UK ended a transition period during which it continued to abide by the EU's rules and the UK's trade relationships with the EU were generally unchanged. During this transition period and beyond, the impact on the UK and European economies and the broader global economy could be significant, resulting in negative impacts, such as increased volatility and illiquidity, potentially lower economic growth on markets in the UK, Europe, and globally, and changes in legal and regulatory regimes to which certain Fund assets are or become subject, any of which may adversely affect the value of Fund investments.

The effects of Brexit will depend, in part, on agreements the UK negotiates to retain access to EU markets, including, but not limited to, current trade and finance agreements. Brexit could lead to legal and tax uncertainty and potentially divergent national laws and regulations, as the UK determines which EU laws to replace or replicate. The extent of the impact of the withdrawal negotiations in the UK and in global markets, as well as any associated adverse consequences, remain unclear, and the uncertainty may have a significant negative effect on the value of Fund investments. If one or more other countries were to exit the EU or abandon the use of the euro as a currency, the value of investments tied to those countries or the euro could decline significantly and unpredictably.

Russia's large-scale invasion of Ukraine on February 24, 2022 has led to various countries imposing economic sanctions on certain Russian individuals and Russian corporate and banking entities. A number of jurisdictions have also instituted broader sanctions on Russia, including banning Russia from global payments systems that facilitate cross-border payments. In response, the government of Russia has imposed capital controls to restrict movements of capital entering and exiting the country. As a result, the value and liquidity of Russian securities and the Russian currency have experienced significant declines. Further, as of the date of this SAI, the Russian securities markets effectively have been closed for trading by foreign investors since February 28, 2022.

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Russia's military incursion and resulting sanctions could have a severe adverse effect on the region's economies and more globally, including significant negative impacts on the financial markets for certain securities and commodities and could affect the value of the Fund's investments. Eastern European markets are particularly sensitive to social, political, economic, and currency events in Russia and may suffer heavy losses as a result of their trading and investment links to the Russian economy and currency. Changes in regulations on trade, decreasing imports or exports, changes in the exchange rate of the euro, a significant influx of refugees, and recessions among European countries may have a significant adverse effect on the economies of other European countries including those of Eastern Europe.

*Investments in Japan.* Economic growth in Japan is heavily dependent on international trade, government support, and consistent government policy. Slowdowns in the economies of key trading partners such as the United States, China, and countries in Southeast Asia could have a negative impact on the Japanese economy as a whole. The Japanese economy has in the past been negatively affected by, among other factors, government intervention and protectionism and an unstable financial services sector. While the Japanese economy has recently emerged from a prolonged economic downturn, some of these factors, as well as other adverse political developments, increases in government debt, changes to fiscal, monetary or trade policies, or other events, such as natural disasters, could have a negative impact on Japanese securities. Japan also has few natural resources, and any fluctuation or shortage in the commodity markets could have a negative impact on Japanese securities.

**Other Short-Term Instruments**

In addition to repurchase agreements, the Fund may invest in short-term instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that may include but are not limited to: (i) shares of money market funds; (ii) obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities (including government-sponsored enterprises); (iii) negotiable certificates of deposit ("CDs"), bankers' acceptances, fixed time deposits and other obligations of U.S. and foreign banks (including foreign branches) and similar institutions; (iv) commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1" by S&P or, if unrated, of comparable quality as determined by the Sub-Adviser; (v) non-convertible corporate debt securities (*e.g.*, bonds and debentures) with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a-7 under the 1940 Act; and (vi) short-term U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of the Sub-Adviser, are of comparable quality to obligations of U.S. banks which may be purchased by the Fund. Any of these instruments may be purchased on a current or a forward-settled basis. Money market instruments also include shares of money market funds. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Bankers' acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.

**Real Estate Investment Trusts ("REITs")**

A REIT is a corporation or business trust (that would otherwise be taxed as a corporation) which meets the definitional requirements of the Code. The Code permits a qualifying REIT to deduct from taxable income the dividends paid, thereby effectively eliminating corporate level federal income tax. To meet the definitional requirements of the Code, a REIT must, among other things: invest substantially all of its assets in interests in real estate (including mortgages and other REITs), cash and government securities; derive most of its income from rents from real property or interest on loans secured by mortgages on real property; and, in general, distribute annually 90% or more of its taxable income (other than net capital gains) to shareholders.

REITs are sometimes informally characterized as Equity REITs and Mortgage REITs. An Equity REIT invests primarily in the fee ownership or leasehold ownership of land and buildings (*e.g.*, commercial equity REITs and residential equity REITs); a Mortgage REIT invests primarily in mortgages on real property, which may secure construction, development or long-term loans.

REITs may be affected by changes in underlying real estate values, which may have an exaggerated effect to the extent that REITs in which the Fund invests may concentrate investments in particular geographic regions or property types. Additionally, rising interest rates may cause investors in REITs to demand a higher annual yield from future distributions, which may in turn decrease market prices for equity securities issued by REITs. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the Fund's investments to decline. During periods of declining interest rates, certain Mortgage REITs may hold mortgages that the mortgagors elect to prepay, which prepayment may diminish the yield on securities issued by such Mortgage REITs. In addition, Mortgage REITs may be affected by the ability of borrowers to repay when due the debt extended by the REIT and Equity REITs may be affected by the ability of tenants to pay rent.

Certain REITs have relatively small market capitalization, which may tend to increase the volatility of the market price of securities issued by such REITs. Furthermore, REITs are dependent upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in operating and financing a limited number of projects. By investing in REITs indirectly through the Fund, a shareholder will bear not only his or her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. REITs depend generally on their ability to generate cashflow to make distributions to shareholders.

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In addition to these risks, Equity REITs may be affected by changes in the value of the underlying property owned by the trusts, while Mortgage REITs may be affected by the quality of any credit extended. Further, Equity and Mortgage REITs are dependent upon management skills and generally may not be diversified. Equity and Mortgage REITs are also subject to heavy cashflow dependency defaults by borrowers and self-liquidation. In addition, Equity and Mortgage REITs could possibly fail to qualify for the favorable U.S. federal income tax treatment generally available to REITs under the Code or fail to maintain their exemptions from registration under the 1940 Act. The above factors may also adversely affect a borrower's or a lessee's ability to meet its obligations to the REIT. In the event of default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting its investments.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements to generate income from its excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which the Fund acquires a financial instrument (*e.g.*, a security issued by the U.S. government or an agency thereof, a banker's acceptance or a certificate of deposit) from a seller, subject to resale to the seller at an agreed upon price and date (normally, the next Business Day). A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed upon interest rate effective for the period the instrument is held by the Fund and is unrelated to the interest rate on the underlying instrument.

In these repurchase agreement transactions, the securities acquired by the Fund (including accrued interest earned thereon) must have a total value in excess of the value of the repurchase agreement and are held by the Custodian until repurchased. No more than an aggregate of 15% of the Fund's net assets will be invested in illiquid investments, including repurchase agreements having maturities longer than seven days and securities subject to legal or contractual restrictions on resale, or for which there are no readily available market quotations.

The use of repurchase agreements involves certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security at a time when the value of the security has declined, the Fund may incur a loss upon disposition of the security. If the other party to the agreement becomes insolvent and subject to liquidation or reorganization under the U.S. Bankruptcy Code or other laws, a court may determine that the underlying security is collateral for a loan by the Fund not within the control of the Fund and, therefore, the Fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement.

**Securities Lending** 

The Fund may lend portfolio securities in an amount up to one-third of its total assets to brokers, dealers and other financial institutions. In a portfolio securities lending transaction, the Fund receives from the borrower an amount equal to the interest paid or the dividends declared on the loaned securities during the term of the loan as well as the interest on the collateral securities, less any fees (such as finders or administrative fees) the Fund pays in arranging the loan. The Fund may share the interest it receives on the collateral securities with the borrower. The terms of the Fund's loans permit the Fund to reacquire loaned securities on five business days' notice or in time to vote on any important matter. Loans are subject to termination at the option of the Fund or borrower at any time, and the borrowed securities must be returned when the loan is terminated. The Fund may pay fees to arrange for securities loans.

The SEC currently requires that the following conditions must be met whenever the Fund's portfolio securities are loaned: (1) the Fund must receive at least 100% cash collateral from the borrower; (2) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (3) the Fund must be able to terminate the loan at any time; (4) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned securities, and any increase in market value; (5) the Fund may pay only reasonable custodian fees approved by the Board in connection with the loan; (6) while voting rights on the loaned securities may pass to the borrower, the Board must terminate the loan and regain the right to vote the securities if a material event adversely affecting the investment occurs; and (7) the Fund may not loan its portfolio securities so that the value of the loaned securities is more than one-third of its total asset value, including collateral received from such loans. These conditions may be subject to future modification. Such loans will be terminable at any time upon specified notice. The Fund might experience the risk of loss if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund. In addition, the Fund will not enter into any portfolio security lending arrangement having a duration of longer than one year. The principal risk of portfolio lending is potential default or insolvency of the borrower. In either of these cases, the Fund could experience delays in recovering securities or collateral or could lose all or part of the value of the loaned securities. As part of participating in a lending program, the Fund may be required to invest in collateralized debt or other securities that bear the risk of loss of principal. In addition, all investments made with the collateral received are subject to the risks associated with such investments. If such investments lose value, the Fund will have to cover the loss when repaying the collateral.

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Any loans of portfolio securities are fully collateralized based on values that are marked-to-market daily. Any securities that the Fund may receive as collateral will not become part of the Fund's investment portfolio at the time of the loan and, in the event of a default by the borrower, the Fund will, if permitted by law, dispose of such collateral except for such part thereof that is a security in which the Fund is permitted to invest. During the time securities are on loan, the borrower will pay the Fund any accrued income on those securities, and the Fund may invest the cash collateral and earn income or receive an agreed-upon fee from a borrower that has delivered cash-equivalent collateral.

**U.S. Government Securities**

The Fund may invest in U.S. government securities. Securities issued or guaranteed by the U.S. government or its agencies or instrumentalities include U.S. Treasury securities, which are backed by the full faith and credit of the U.S. Treasury and which differ only in their interest rates, maturities, and times of issuance. U.S. Treasury bills have initial maturities of one-year or less; U.S. Treasury notes have initial maturities of one to ten years; and U.S. Treasury bonds generally have initial maturities of greater than ten years. Certain U.S. government securities are issued or guaranteed by agencies or instrumentalities of the U.S. government including, but not limited to, obligations of U.S. government agencies or instrumentalities such as the Federal National Mortgage Association ("Fannie Mae"), the Government National Mortgage Association ("Ginnie Mae"), the Small Business Administration, the Federal Farm Credit Administration, the Federal Home Loan Banks, Banks for Cooperatives (including the Central Bank for Cooperatives), the Federal Land Banks, the Federal Intermediate Credit Banks, the Tennessee Valley Authority, the Export-Import Bank of the United States, the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan Marketing Association, the National Credit Union Administration and the Federal Agricultural Mortgage Corporation ("Farmer Mac").

Some obligations issued or guaranteed by U.S. government agencies and instrumentalities, including, for example, Ginnie Mae pass-through certificates, are supported by the full faith and credit of the U.S. Treasury. Other obligations issued by or guaranteed by federal agencies, such as those securities issued by Fannie Mae, are supported by the discretionary authority of the U.S. government to purchase certain obligations of the federal agency, while other obligations issued by or guaranteed by federal agencies, such as those of the Federal Home Loan Banks, are supported by the right of the issuer to borrow from the U.S. Treasury, while the U.S. government provides financial support to such U.S. government-sponsored federal agencies, no assurance can be given that the U.S. government will always do so, since the U.S. government is not so obligated by law. U.S. Treasury notes and bonds typically pay coupon interest semi-annually and repay the principal at maturity.

On September 7, 2008, the U.S. Treasury announced a federal takeover of Fannie Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), placing the two federal instrumentalities in conservatorship. Under the takeover, the U.S. Treasury agreed to acquire $1 billion of senior preferred stock of each instrumentality and obtained warrants for the purchase of common stock of each instrumentality (the "Senior Preferred Stock Purchase Agreement" or "Agreement"). Under the Agreement, the U.S. Treasury pledged to provide up to $200 billion per instrumentality as needed, including the contribution of cash capital to the instrumentalities in the event their liabilities exceed their assets. This was intended to ensure that the instrumentalities maintain a positive net worth and meet their financial obligations, preventing mandatory triggering of receivership. On December 24, 2009, the U.S. Treasury announced that it was amending the Agreement to allow the $200 billion cap on the U.S. Treasury's funding commitment to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. As a result of this Agreement, the investments of holders, including the Fund, of mortgage-backed securities and other obligations issued by Fannie Mae and Freddie Mac are protected.

The total public debt of the United States as a percentage of gross domestic product has grown rapidly since the beginning of the 2008–2009 financial downturn. Although high debt levels do not necessarily indicate or cause economic problems, they may create certain systemic risks if sound debt management practices are not implemented. A high national debt can raise concerns that the U.S. government will not be able to make principal or interest payments when they are due. This increase has also necessitated the need for the U.S. Congress to negotiate adjustments to the statutory debt limit to increase the cap on the amount the U.S. government is permitted to borrow to meet its existing obligations and finance current budget deficits. In August 2023, Fitch lowered its long-term sovereign credit rating on the U.S. In explaining the downgrade, Fitch cited, among other reasons, expected fiscal deterioration of the U.S. government and extended and contentious negotiations related to raising the government's debt ceiling. An increase in national debt levels may also necessitate the need for the U.S. Congress to negotiate adjustments to the statutory debt ceiling to increase the cap on the amount the U.S. Government is permitted to borrow to meet its existing obligations and finance current budget deficits. Future downgrades could increase volatility in domestic and foreign financial markets, result in higher interest rates, lower prices of U.S. Treasury securities and increase the costs of different kinds of debt. Any controversy or ongoing uncertainty regarding the statutory debt ceiling negotiations may impact the U.S. long-term sovereign credit rating and may cause market uncertainty. As a result, market prices and yields of securities supported by the full faith and credit of the U.S. government may be adversely affected.

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**INVESTMENT RESTRICTIONS**

The Trust has adopted the following investment restrictions as fundamental policies with respect to the Fund. These restrictions cannot be changed with respect to the Fund without the approval of the holders of a majority of the Fund's outstanding voting securities. For the purposes of the 1940 Act, a "majority of outstanding shares" means the vote of the lesser of: (1) 67% or more of the voting securities of the Fund present at the meeting if the holders of more than 50% of the Fund's outstanding voting securities are present or represented by proxy; or (2) more than 50% of the outstanding voting securities of the Fund.

Except with the approval of a majority of the outstanding voting securities, the Fund may not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Concentrate its investments in an industry or group of related industries (*i.e.*, invest 25% or more of its total assets in the stocks of a particular industry or group of related industries). For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities), repurchase agreements collateralized by U.S. government securities, and tax-exempt securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Borrow money or issue senior securities (as defined under the 1940 Act), except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Make loans, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments, except to the extent permitted under the 1940 Act. This shall not prevent the Fund from investing in securities or other instruments backed by real estate, real estate investment trusts or securities of companies engaged in the real estate business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except to the extent permitted under the 1940 Act. This shall not prevent the Fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Underwrite securities issued by other persons, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.With respect to 75% of its total assets, purchase the securities of any one issuer if, immediately after and as a result of such purchase, (a) the value of the Fund's holdings in the securities of such issuer exceeds 5% of the value of the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding voting securities of the issuer (with the exception that this restriction does not apply to the Fund's investments in the securities of the U.S. government, or its agencies or instrumentalities, or other investment companies).

If a percentage limitation is adhered to at the time of investment or contract, a later increase or decrease in percentage resulting from any change in value or total or net assets will not result in a violation of such restriction, except that the percentage limitation with respect to the borrowing of money will be observed continuously.

The following descriptions of certain provisions of the 1940 Act may assist investors in understanding the above policies and restrictions:

*<u>Concentration.</u>* The SEC has defined concentration as investing more than 25% of the Fund's net assets in an industry or group of industries, with certain exceptions.

*<u>Borrowing</u>*<u>.</u> The 1940 Act presently allows the Fund to borrow from a bank (including pledging, mortgaging or hypothecating assets) in an amount up to 33 1/3% of its total assets (not including temporary borrowings up to 5% of its total assets).

*<u>Senior Securities</u>*<u>.</u> Senior securities may include any obligation or instrument issued by the Fund evidencing indebtedness. The 1940 Act generally prohibits a fund from issuing senior securities. An exemptive rule under the 1940 Act, however, permits a fund to enter into transactions that might otherwise be deemed to be senior securities, such as derivative transactions, reverse repurchase agreements and similar financing transactions, and short sales, subject to certain conditions.

*<u>Lending</u>*<u>.</u> Under the 1940 Act, the Fund may only make loans if expressly permitted by its investment policies. The Fund's current investment policy on lending is that the Fund may not make loans if, as a result, more than 33 1/3% of its total assets would be lent to other parties, except that the Fund may: (i) purchase or hold debt instruments in accordance with its investment objective and policies; (ii) enter into repurchase agreements; and (iii) engage in securities lending as described in this SAI.

*<u>Real Estate and Commodities</u>*<u>.</u> The 1940 Act does not directly restrict the Fund's ability to invest in real estate or commodities, but the 1940 Act requires every investment company to have a fundamental investment policy governing such investments.

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*<u>Underwriting</u>*<u>.</u> Under the 1940 Act, underwriting securities involves the Fund purchasing securities directly from an issuer for the purpose of selling (distributing) them or participating in any such activity either directly or indirectly.

**EXCHANGE LISTING AND TRADING**

Shares are listed for trading and trade throughout the day on the Exchange.

There can be no assurance that the Fund will continue to meet the requirements of the Exchange necessary to maintain the listing of Shares. The Exchange will consider the suspension of trading in, and will initiate delisting proceedings of, the Shares if any of the requirements set forth in the Exchange rules, including compliance with Rule 6c-11(c) under the 1940 Act, are not continuously maintained or such other event shall occur or condition shall exist that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. The Exchange will remove the Shares of the Fund from listing and trading upon termination of the Fund.

The Trust reserves the right to adjust the price levels of Shares in the future to help maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the Fund.

**MANAGEMENT OF THE TRUST**

**Board Responsibilities.** The management and affairs of the Trust and its series are overseen by the Board, which elects the officers of the Trust who are responsible for administering the day-to-day operations of the Trust and the Fund. The Board has approved contracts, as described below, under which certain companies provide essential services to the Trust.

The day-to-day business of the Trust, including the management of risk, is performed by third-party service providers, such as the Adviser, the Sub-Advisers, the Distributor, and the Administrator. The Board is responsible for overseeing the Trust's service providers and, thus, has oversight responsibility with respect to risk management performed by those service providers. Risk management seeks to identify and address risks, *i.e.*, events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance, or reputation of the Fund. The Fund and its service providers employ a variety of processes, procedures, and controls to identify such events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur. Each service provider is responsible for one or more discrete aspects of the Trust's business (*e.g.,* the Sub-Advisers are responsible for the day-to-day management of the Fund's portfolio investments) and, consequently, for managing the risks associated with those aspects for which it is responsible. The Board has emphasized to the Fund's service providers the importance of maintaining vigorous risk management.

The Board's role in risk oversight begins before the inception of the Fund, at which time certain of the Fund's service providers present the Board with information concerning the investment objectives, strategies, and risks of the Fund as well as proposed investment limitations for the Fund. Additionally, the Adviser and Sub-Advisers provide the Board with an overview of, among other things, their investment philosophy, brokerage practices, and compliance infrastructure. Thereafter, the Board continues its oversight function as various personnel, including the Trust's Chief Compliance Officer, as well as personnel of the Sub-Advisers, and other service providers such as the Fund's independent registered public accounting firm, make periodic reports to the Audit Committee or to the Board with respect to various aspects of risk management. The Board and the Audit Committee oversee efforts by management and service providers to manage risks to which the Fund may be exposed.

The Board is responsible for overseeing the nature, extent, and quality of the services provided to the Fund by the Adviser and the Sub-Advisers and receives information about those services at its regular meetings. In addition, on an annual basis (following the initial two-year period), in connection with its consideration of whether to renew the Investment Advisory Agreement with the Adviser, and the Sub-Advisory Agreements with the Sub-Advisers, the Board or its designee may meet with the Adviser and/or the Sub-Advisers to review such services. Among other things, the Board regularly considers the Adviser's and each Sub-Adviser's adherence to the Fund's investment restrictions and compliance with various Fund policies and procedures and with applicable securities regulations. The Board also reviews information about the Fund's performance and the Fund's investments, including, for example, portfolio holdings schedules.

The Trust's Chief Compliance Officer reports regularly to the Board to review and discuss compliance issues and Fund, Adviser, or Sub-Adviser risk assessments. At least annually, the Trust's Chief Compliance Officer provides the Board with a report reviewing the adequacy and effectiveness of the Trust's policies and procedures and those of its service providers, including the Adviser and the Sub-Advisers. The report addresses the operation of the policies and procedures of the Trust and each service provider since the date of the last report; any material changes to the policies and procedures since the date of the last report; any recommendations for material changes to the policies and procedures; and any material compliance matters since the date of the last report.

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The Board receives reports from the Fund's service providers regarding operational risks and risks related to the valuation and liquidity of portfolio securities. Annually, the Fund's independent registered public accounting firm reviews with the Audit Committee its audit of the Fund's financial statements, focusing on major areas of risk encountered by the Fund and noting any significant deficiencies or material weaknesses in the Fund's internal controls. Additionally, in connection with its oversight function, the Board oversees Fund management's implementation of disclosure controls and procedures, which are designed to ensure that information required to be disclosed by the Trust in its periodic reports with the SEC are recorded, processed, summarized, and reported within the required time periods. The Board also oversees the Trust's internal controls over financial reporting, which comprise policies and procedures designed to provide reasonable assurance regarding the reliability of the Trust's financial reporting and the preparation of the Trust's financial statements.

From their review of these reports and discussions with the Adviser, the Sub-Advisers, the Chief Compliance Officer, the independent registered public accounting firm and other service providers, the Board and the Audit Committee learn in detail about the material risks of the Fund, thereby facilitating a dialogue about how management and service providers identify and mitigate those risks.

The Board recognizes that not all risks that may affect the Fund can be identified and/or quantified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the Fund's goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the Board as to risk management matters are typically summaries of the relevant information. Most of the Fund's investment management and business affairs are carried out by or through the Adviser, Sub-Advisers, and other service providers, each of which has an independent interest in risk management but whose policies and the methods by which one or more risk management functions are carried out may differ from the Fund's and each other's in the setting of priorities, the resources available or the effectiveness of relevant controls. As a result of the foregoing and other factors, the Board's ability to monitor and manage risk, as a practical matter, is subject to limitations.

**Members of the Board.** There are four members of the Board, and all four members are not interested persons of the Trust, as that term is defined in the 1940 Act (the "Independent Trustees"). Mr. Michael A. Castino serves as Chairman of the Board, and Mr. Leonard M. Rush serves as the Trust's Lead Independent Trustee. As Lead Independent Trustee, Mr. Rush acts as a spokesperson for the Independent Trustees in between meetings of the Board, serves as a liaison for the Independent Trustees with the Trust's service providers, officers, and legal counsel to discuss ideas informally, and participates in setting the agenda for meetings of the Board and separate meetings or executive sessions of the Independent Trustees.

The Board is comprised entirely of Independent Trustees. There is an Audit Committee of the Board that is chaired by an Independent Trustee and comprised solely of Independent Trustees. The Audit Committee chair presides at the Audit Committee meetings, participates in formulating agendas for Audit Committee meetings, and coordinates with management to serve as a liaison between the Independent Trustees and management on matters within the scope of responsibilities of the Audit Committee as set forth in its Board-approved charter. There is a Nominating and Governance Committee of the Board that is chaired by an Independent Trustee and comprised solely of Independent Trustees. The Nominating and Governance Committee chair presides at the Nominating and Governance Committee meetings, participates in formulating agendas for Nominating and Governance Committee meetings, and coordinates with management to serve as a liaison between the Independent Trustees and management on matters within the scope of responsibilities of the Nominating and Governance Committee as set forth in its Board-approved charter. The Trust has determined its leadership structure is appropriate given the specific characteristics and circumstances of the Trust. The Trust made this determination in consideration of, among other things, the fact that the Independent Trustees of the Trust constitute the entire Board, the number of Independent Trustees that constitute the Board, the amount of assets under management in the Trust, and the number of funds overseen by the Board. The Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Trustees from Fund management.

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Additional information about each Trustee of the Trust is set forth below. The address of each Trustee of the Trust is c/o U.S. Bank Global Fund Services, 615 E. Michigan Street, Milwaukee, WI 53202.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and <br>Year of Birth** | **Position Held with the Trust** | **Term of Office and Length of Time Served** | **Principal Occupation(s) During Past 5 Years** | **Number of Portfolios in Fund Complex Overseen by Trustee** | **Other Directorships Held by Trustee During Past 5 Years** |
| &nbsp;&nbsp;&nbsp;**Independent Trustees** | &nbsp;&nbsp;&nbsp;**Independent Trustees** | &nbsp;&nbsp;&nbsp;**Independent Trustees** | &nbsp;&nbsp;&nbsp;**Independent Trustees** | &nbsp;&nbsp;&nbsp;**Independent Trustees** | &nbsp;&nbsp;&nbsp;**Independent Trustees** |
| &nbsp;&nbsp;&nbsp;Michael A. Castino<br>Born: 1967 | Trustee and Chairman | Indefinite term; Trustee<br>since 2014;<br>Chairman<br>since 2013 | &nbsp;&nbsp;&nbsp;President, Sound Capital Solutions LLC (since 2023); Senior Vice President, U.S. Bancorp Fund Services, LLC (2013–2023); Managing Director of Index Services, Zacks Investment Management (2011–2013). | 53 | &nbsp;&nbsp;&nbsp;None. |
| &nbsp;&nbsp;&nbsp;Leonard M. Rush, CPA<br>Born: 1946 | Lead Independent Trustee and Audit Committee Chairman | Indefinite term;<br>since 2012 | &nbsp;&nbsp;Retired; formerly Chief Financial Officer, Robert W. Baird & Co. Incorporated (wealth management firm) (2000–2011). | 53 | &nbsp;&nbsp;&nbsp;Independent Trustee, Managed Portfolio Series (30 portfolios) (since 2011). |
| &nbsp;&nbsp;&nbsp;David A. Massart<br>Born: 1967 | Trustee and Nominating and Governance Committee Chairman | Indefinite term; Trustee<br>since 2012;<br>Committee Chairman <br>since 2023 | &nbsp;&nbsp;&nbsp;Partner and Managing Director, Beacon Pointe Advisors, LLC (since 2022); Co-Founder, President, and Chief Investment Strategist, Next Generation Wealth Management, Inc. (2005–2021). | 53 | &nbsp;&nbsp;&nbsp;Independent Trustee, Managed Portfolio Series (30 portfolios) (since 2011). |
| &nbsp;&nbsp;&nbsp;Janet D. Olsen<br>Born: 1956 | Trustee | Indefinite term;<br>since 2018 | &nbsp;&nbsp;&nbsp;Retired; formerly Managing Director and General Counsel, Artisan Partners Limited Partnership (investment adviser) (2000–2013); Executive Vice President and General Counsel, Artisan Partners Asset Management Inc. (2012–2013); Vice President and General Counsel, Artisan Funds, Inc. (investment company) (2001–2012). | 53 | &nbsp;&nbsp;&nbsp;Independent Trustee, PPM Funds (2 portfolios) (2017–2024). |

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**Individual Trustee Qualifications.** The Trust has concluded that each of the Trustees should serve on the Board because of their ability to review and understand information about the Fund provided to them by management, to identify and request other information they may deem relevant to the performance of their duties, to question management and other service providers regarding material factors bearing on the management and administration of the Fund, and to exercise their business judgment in a manner that serves the best interests of the Fund's shareholders. The Trust has concluded that each of the Trustees should serve as a Trustee based on his or her own experience, qualifications, attributes and skills as described below.

The Trust has concluded that Mr. Rush should serve as a Trustee because of his substantial industry experience, including serving in several different senior executive roles at various global financial services firms, and the experience he has gained as serving as trustee of another investment company trust since 2011. He most recently served as Managing Director and Chief Financial Officer of Robert W. Baird & Co. Incorporated and several other affiliated entities and served as the Treasurer for Baird Funds. He also served as the Chief Financial Officer for Fidelity Investments' four broker-dealers and has substantial experience with mutual fund and investment advisory organizations and related businesses, including Vice President and Head of Compliance for Fidelity Investments, a Vice President at Credit Suisse First Boston, a Manager with Goldman Sachs, & Co. and a Senior Manager with Deloitte & Touche. Mr. Rush has been determined to qualify as an Audit Committee Financial Expert for the Trust.

The Trust has concluded that Mr. Massart should serve as a Trustee because of his substantial industry experience, including over two decades working with high net worth individuals, families, trusts, and retirement accounts to make strategic and tactical asset allocation decisions, evaluate and select investment managers, and manage complex client relationships, and the experience he has gained as serving as trustee of another investment company trust since 2011. He is currently a Partner and Managing Director at Beacon Pointe Advisors, LLC. Previously, he served as President and Chief Investment Strategist of an SEC-registered investment advisory firm he co-founded, as a Managing Director of Strong Private Client, and as a Manager of Wells Fargo Investments, LLC.

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The Trust has concluded that Ms. Olsen should serve as a Trustee because of her substantial industry experience, including nearly 20 years as a practicing attorney representing primarily registered investment companies and investment advisers, over a decade serving as a senior executive of an investment management firm and a related public company, and the experience she has gained by serving as an executive officer of another investment company from 2001 to 2012. Ms. Olsen most recently served as Managing Director and General Counsel of Artisan Partners Limited Partnership, a registered investment adviser serving primarily investment companies and institutional investors, and several affiliated entities, including its general partner, Artisan Partners Asset Management Inc. (NYSE: APAM), and as an executive officer of Artisan Funds Inc.

The Trust has concluded that Mr. Castino should serve as Trustee because of the experience he gained as Chairman of the Trust since 2013, as a senior officer of U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services" or the "Transfer Agent"), from 2012 to 2023, and in his past roles with investment management firms and indexing firms involved with ETFs, as well as his experience in and knowledge of the financial services industry. Mr. Castino currently serves as President of Sound Capital Solutions, LLC, an SEC registered investment adviser.

In its periodic assessment of the effectiveness of the Board, the Board considers the complementary individual skills and experience of the individual Trustees primarily in the broader context of the Board's overall composition so that the Board, as a body, possesses the appropriate (and appropriately diverse) skills and experience to oversee the business of the Funds.

**Board Committees**. The Board has established the following standing committees of the Board:

<u>Audit Committee</u>. The Board has a standing Audit Committee that is composed of each of the Independent Trustees of the Trust. The Audit Committee operates under a written charter approved by the Board. The principal responsibilities of the Audit Committee include: recommending which firm to engage as the Fund's independent registered public accounting firm and whether to terminate this relationship; reviewing the independent registered public accounting firm's compensation, the proposed scope and terms of its engagement, and the firm's independence; pre-approving audit and non-audit services provided by the Fund's independent registered public accounting firm to the Trust and certain other affiliated entities; serving as a channel of communication between the independent registered public accounting firm and the Trustees; reviewing the results of each external audit, including any qualifications in the independent registered public accounting firm's opinion, any related management letter, management's responses to recommendations made by the independent registered public accounting firm in connection with the audit, reports submitted to the Committee by the internal auditing department of the Trust's Administrator that are material to the Trust as a whole, if any, and management's responses to any such reports; reviewing the Fund's audited financial statements and considering any significant disputes between the Trust's management and the independent registered public accounting firm that arose in connection with the preparation of those financial statements; considering, in consultation with the independent registered public accounting firm and the Trust's senior internal accounting executive, if any, the independent registered public accounting firms' report on the adequacy of the Trust's internal financial controls; reviewing, in consultation with the Fund's independent registered public accounting firm, major changes regarding auditing and accounting principles and practices to be followed when preparing the Fund's financial statements; and other audit related matters. During the fiscal year ended October 31, 2024, the Audit Committee met four times.

The Audit Committee also serves as the Qualified Legal Compliance Committee ("QLCC") for the Trust for the purpose of compliance with Rules 205.2(k) and 205.3(c) of the Code of Federal Regulations, regarding alternative reporting procedures for attorneys retained or employed by an issuer who appear and practice before the SEC on behalf of the issuer (the "issuer attorneys"). An issuer attorney who becomes aware of evidence of a material violation by the Trust, or by any officer, director, employee, or agent of the Trust, may report evidence of such material violation to the QLCC as an alternative to the reporting requirements of Rule 205.3(b) (which requires reporting to the chief legal officer and potentially "up the ladder" to other entities).

<u>Nominating and Governance Committee</u>. The Board has a standing Nominating and Governance Committee that is composed of each of the Independent Trustees of the Trust. The Nominating and Governance Committee operates under a written charter approved by the Board. The principal responsibility of the Nominating and Governance Committee is to consider, recommend and nominate candidates to fill vacancies on the Trust's Board, if any. The Nominating and Governance Committee generally will not consider nominees recommended by shareholders. The Nominating and Governance Committee is also responsible for, among other things, reviewing and making recommendations regarding Independent Trustee compensation and the Trustees' annual "self-assessment." The Nominating and Governance Committee meets periodically, as necessary. During the fiscal year ended October 31, 2024, the Nominating and Governance Committee met three times.

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**Principal Officers of the Trust**

The officers of the Trust conduct and supervise its daily business. The address of each officer of the Trust is c/o U.S. Bank Global Fund Services, 615 E. Michigan Street, Milwaukee, WI 53202. Additional information about the Trust's officers is as follows:

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| | | | |
|:---|:---|:---|:---|
| **Name and**<br>**Year of Birth** | **Position(s) Held with the Trust** | **Term of Office and Length of Time Served** | **Principal Occupation(s)**<br>**During Past 5 Years** |
| Kristina R. Nelson<br>Born: 1982 | President | Indefinite term;<br>since 2019 | Senior Vice President, U.S. Bancorp Fund Services, LLC (since 2020); Vice President, U.S. Bancorp Fund Services, LLC (2014–2020). |
| Cynthia L. Andrae<br>Born: 1971 | Chief Compliance Officer and Anti-Money Laundering Officer | Indefinite term;<br>since 2022 <br>(other roles since 2021) | Vice President, U.S. Bancorp Fund Services, LLC (since 2019); Deputy Chief Compliance Officer, U.S. Bancorp Fund Services, LLC (2021–2022); Compliance Officer, U.S. Bancorp Fund Services, LLC (2015-2019). |
| Kristen M. Weitzel<br>Born: 1977 | Treasurer | Indefinite term;<br>since 2014<br>(other roles since 2013) | Vice President, U.S. Bancorp Fund Services, LLC (since 2015). |
| Rachel Spearo<br>Born: 1979 | Interim Secretary | Indefinite Term; since 2025 | Senior Vice President, U.S. Bank Global Fund Services (2004-2019; 2021-present); Independent Consultant (investment management regulation) (2019-2021). |
| Jessica L. Vorbeck<br>Born: 1984 | Assistant Treasurer | Indefinite term;<br>since 2020 | Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2022); Officer, U.S. Bancorp Fund Services, LLC (2014–2017, 2018–2022). |
| Kyle L. Kroken<br>Born: 1986 | Assistant Treasurer | Indefinite term;<br>since 2024 | Vice President, U.S. Bancorp Fund Services, LLC (since 2019). |
| Noelle-Nadia A. Filali <br>Born: 1997 | Assistant Secretary | Indefinite term;<br>since 2025 | Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2025); Regulatory Administration Attorney, U.S. Bancorp Fund Services, LLC (since 2023); Regulatory Administration Intern, U.S. Bancorp Fund Services, LLC (2022-2023); Law Student (2020-2023). |

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**Trustee Ownership of Shares.** The Fund is required to show the dollar amount ranges of each Trustee's "beneficial ownership" of Shares and each other series of the Trust as of the end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC. "Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (the "1934 Act").

As of December 31, 2024, no Trustee owned Shares or shares of any other series of the Trust.

**Board Compensation.** The Trustees each receive an annual trustee fee of $212,000 for attendance at the four regularly scheduled quarterly meetings and one annual meeting, if necessary, and receive additional compensation for each additional meeting attended of $2,000, as well as reimbursement for travel and other out-of-pocket expenses incurred in connection with attendance at Board meetings. The Lead Independent Trustee receives an additional annual fee of $18,000. The Chairman of the Audit Committee receives an additional annual fee of $18,000. The Chairman of the Nominating and Governance Committee receives an additional annual fee of $8,000. The Trust has no pension or retirement plan.

The following table shows the compensation earned by each Trustee for the Fund's fiscal year ended October 31, 2024. Trustee fees are paid by the investment adviser to each series of the Trust and not by the Fund. Trustee compensation does not include reimbursed out-of-pocket expenses in connection with attendance at meetings.

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| | | |
|:---|:---|:---|
| **Name** | **Aggregate Compensation <br>From the Fund** | **Total Compensation from Fund Complex <br>Paid to Trustees** |
| **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |
| Michael A. Castino | $0 | $213533 |
| Leonard M. Rush, CPA | $0 | $247033 |
| Janet D. Olsen | $0 | $213533 |
| David A. Massart | $0 | $221533 |

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**PRINCIPAL SHAREHOLDERS, CONTROL PERSONS, AND MANAGEMENT OWNERSHIP**

A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding Shares. A control person is a shareholder that owns beneficially or through controlled companies more than 25% of the voting securities of a company or acknowledges the existence of control. Shareholders owning voting securities in excess of 25% may determine the outcome of any matter affecting and voted on by shareholders of the Fund. In addition, Scott Colyer and Lisa Colyer, are deemed control persons of the Adviser, each by virtue of their roles with entities that own directly and indirectly over 25% of the outstanding capital stock of AAM Holdings, Inc. As of the date of this SAI, the Fund has not commenced operations, and consequently, there were no outstanding Shares.

**CODES OF ETHICS**

The Trust, the Adviser, and the Sub-Advisers have each adopted codes of ethics pursuant to Rule 17j-1 of the 1940 Act. These codes of ethics are designed to prevent affiliated persons of the Trust, the Adviser, and the Sub-Advisers from engaging in deceptive, manipulative or fraudulent activities in connection with securities held or to be acquired by the Fund (which may also be held by persons subject to the codes of ethics). Each Code of Ethics permits personnel subject to that Code of Ethics to invest in securities for their personal investment accounts, subject to certain limitations, including limitations related to securities that may be purchased or held by the Fund. The Distributor (as defined below) relies on the principal underwriters exception under Rule 17j-1(c)(3), specifically where the Distributor is not affiliated with the Trust, the Adviser, the Sub-Advisers, and no officer, director, or general partner of the Distributor serves as an officer, director, or general partner of the Trust, the Adviser, or the Sub-Advisers.

There can be no assurance that the codes of ethics will be effective in preventing such activities. Each code of ethics may be examined at the office of the SEC in Washington, D.C. or on the Internet at the SEC's website at http://www.sec.gov.

**PROXY VOTING POLICIES**

The Fund has delegated proxy voting responsibilities to the Adviser, subject to the Board's oversight. A copy of the Adviser's proxy voting policies (the "Proxy Voting Policies") is set forth in <u>Appendix A</u> to this SAI. In delegating proxy responsibilities, the Board has directed that proxies be voted consistent with the Fund's and its shareholders' best interests and in compliance with all applicable proxy voting rules and regulations. The Adviser has engaged Glass, Lewis & Co. ("Glass Lewis") to make recommendations on the voting of proxies relating to securities held by the Fund and has adopted the Glass Lewis Guidelines as part of each of its proxy voting policies. A copy of the Glass Lewis Guidelines is set forth in <u>Appendix B</u> to this SAI. The Trust's Chief Compliance Officer is responsible for monitoring the effectiveness of the Proxy Voting Policies. The Proxy Voting Policies have been adopted by the Trust as the policies and procedures that the Adviser will use when voting proxies on behalf of the Fund.

Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling 1–800–617–0004, (2) on the Fund's website at www.aamlive.com/ETF, and (3) on the SEC's website at www.sec.gov.

**INVESTMENT ADVISER AND SUB-ADVISERS**

**Investment Adviser**

Advisors Asset Management, Inc., a Delaware corporation, serves as the investment adviser to the Fund. AAM is located at 18925 Base Camp Road, Suite 203, Monument, Colorado 80132. AAM is a wholly-owned subsidiary of AAM Holdings, Inc., which is majority-owned by Sun Life Financial, Inc., through its subsidiaries. Sun Life Financial, Inc. is a publicly-traded company. In addition, Scott Colyer and Lisa Colyer, are deemed control persons of the Adviser, each by virtue of their ownership of at least 25% of AAM Holdings, Inc., directly or through one or more trusts or other entities. AAM is a registered broker dealer, member FINRA and SIPC, and SEC registered investment adviser.

Pursuant to an investment advisory agreement (the "Advisory Agreement"), AAM provides investment advice to the Fund subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, AAM arranges for sub-advisory, transfer agency, custody, fund administration, distribution, and all other services necessary for the Fund to operate. AAM provides oversight of the Sub-Advisers, defined below, monitoring of the Sub-Advisers' buying and selling of securities for the Fund, and review of the Sub-Advisers' performance. For the services it provides to the Fund, the Fund pays AAM a unified management fee, which is calculated daily and paid monthly, at an annual rate of the Fund's average daily net assets as follows:

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| | |
|:---|:---|
| **Name of Fund** | **Management Fee** |
| AAM Todd International Intrinsic Value ETF | 0.54% |

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Under the Advisory Agreement, AAM has agreed to pay all expenses of the Fund, except for: the fee paid to AAM pursuant to the Advisory Agreement, interest charges on any borrowings, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution (12b-1) fees and expenses.

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Additionally, under the Advisory Agreement, AAM, in turn, compensates the Sub-Advisers from the management fee it receives from the Fund. AAM shall not be liable to the Trust or any shareholder for anything done or omitted by it, except acts or omissions involving willful misfeasance, bad faith, gross negligence or reckless disregard of the duties imposed upon it by its agreement with the Trust.

The Fund is new and, therefore, have not paid any management fees to the Adviser as of the date of this SAI.

**Sub-Advisers**

***Todd Asset Management***

The Trust, on behalf of the Fund, and the Adviser have retained Todd Asset Management ("Todd" or the "Sub-Adviser"), 101 South 5th Street, Suite 3100, Louisville, Kentucky 40202, to serve as a sub-adviser for the Fund.

Pursuant to a Sub-Advisory Agreement between the Adviser and the Sub-Adviser (the "Sub-Advisory Agreement"), the Sub-Adviser is responsible for managing portfolio securities on behalf of the Fund, subject to the supervision of the Adviser and the Board. For the services it provides to the Fund, the Sub-Adviser is compensated by the Adviser from the management fees paid by the Fund to the Adviser. For its services, the Sub-Adviser is paid a fee by the Adviser, which fee is calculated daily at an annual rate of the Fund's average daily net assets of 0.13%.

The Sub-Advisory Agreement will continue in force for an initial period of up to two years. Thereafter, the Sub-Advisory Agreement is renewable from year to year with respect to the Fund, so long as its continuance is approved at least annually (1) by the vote, cast in person at a meeting called for that purpose, of a majority of those Trustees who are not "interested persons" of the Trust; and (2) by the majority vote of either the full Board or the vote of a majority of the outstanding Shares. The Sub-Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Board or, with respect to the Fund, by a majority of the outstanding Shares or by the Adviser on not less than 60 days' written notice to the Sub-Adviser, or by the Sub-Adviser on 90 days' written notice to the Adviser and the Trust. The Sub-Advisory Agreement provides that the Sub-Adviser shall not be protected against any liability to the Trust or its shareholders by reason of willful misfeasance, bad faith, or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder.

The Fund is new and, therefore, the Adviser has not paid any sub-advisory fees to the Sub-Adviser with respect to the Fund as of the date of this SAI.

***Vident Asset Management***

The Trust, on behalf of the Fund, and the Adviser have retained Vident Asset Management ("Vident" or the "Sub-Adviser"), 1125 Sanctuary Parkway, Suite 515, Alpharetta, Georgia 30009, to serve as a sub-adviser for the Fund. The Sub-Adviser was established in 2016 and is owned by Vident Capital Holdings, LLC. Vident Capital Holdings, LLC is controlled by MM VAM, LLC which is owned by Casey Crawford.

Pursuant to an Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement") among the Adviser, the Sub-Adviser, and the Trust, on behalf of each of the Fund, Vident is responsible for trading portfolio securities on behalf of the Fund, including selecting broker-dealers to execute purchase and sale transactions as instructed by the Adviser, subject to the supervision of the Adviser and the Board. For the services it provides to the Fund, the Sub-Adviser is compensated by the Adviser from the management fees paid by the Fund to the Adviser. For its services, Vident is paid a fee by the Adviser, which fee is calculated daily and paid monthly, at an annual rate based on the average daily net assets of the Fund, and subject to a minimum annual fee as follows:

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| | | |
|:---|:---|:---|
| **Name of Fund** | **Sub-Advisory Fee** | **Minimum <br>Annual Fee** |
| AAM Todd International Intrinsic Value ETF | 0.05% on the first $250 million; <br>0.045% on the second $250 million; and <br>0.04% on all assets thereafter | $40000 |

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The Sub-Advisory Agreement will continue in force for an initial period of two years. Thereafter, the Sub-Advisory Agreement will be renewable from year to year with respect to the Fund, so long as its continuance is approved at least annually (1) by the vote, cast in person at a meeting called for that purpose, of a majority of those Trustees who are not "interested persons" of the Trust; and (2) by the majority vote of either the full Board or the vote of a majority of the outstanding Shares. The Sub-Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Board or, with respect to the Fund, by a majority of the outstanding Shares or by the Adviser on not less than 60 days' written notice to the Sub-Adviser, or by the Sub-Adviser on 90 days' written notice to the Adviser and the Trust. The Sub-Advisory Agreement provides that the Sub-Adviser shall not be protected against any liability to the Trust or its shareholders by reason of willful misfeasance, bad faith, or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder.

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The Fund is new and, therefore, the Adviser has not paid any sub-advisory fees to the Sub-Adviser with respect to the Fund as of the date of this SAI.

**PORTFOLIO MANAGERS**

The Fund is co-managed by Curtiss M. Scott Jr., CFA, President, CIO, Partner, and Portfolio Manager for Todd, John J. White, CFA, Partner and Senior Portfolio Manager for Todd, John C. Holden, CFA, Partner and Senior Portfolio Manager for Todd, Shaun C. Siers, CFA, Partner and Senior Portfolio Manager for Todd, Austin Wen, CFA, Senior Portfolio Manager for Vident, Rafael Zayas, CFA, SVP, Head of Portfolio Management and Trading for Vident, and Yin Bhuyan, Senior Portfolio Manager for Vident.

**Share Ownership**

The Fund is required to show the dollar ranges of each Portfolio Manager's "beneficial ownership" of Shares as of the end of the most recently completed fiscal year or a more recent date for a new portfolio manager. Dollar amount ranges disclosed are established by the SEC. "Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under the Exchange Act. As of the date of this SAI, the Portfolio Manager did not beneficially own Shares.

**Other Accounts**

In addition to the Fund, the Portfolio Managers managed the following other accounts as of June 30, 2025, none of which were subject to a performance-based fee:

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| | | | |
|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Accounts** | **Total <br>Number of <br>Accounts** | **Total Assets of <br>Accounts** |
| Curtiss M. Scott Jr., CFA  | Registered Investment Companies | 0 | $0 |
| Curtiss M. Scott Jr., CFA  | Other Pooled Investment Vehicles | 0 | $0 |
| Curtiss M. Scott Jr., CFA  | Other Accounts | 104 | $5.6 billion |
| John J. White, CFA | Registered Investment Companies | 0 | $0 |
|  | Other Pooled Investment Vehicles | 0 | $0 |
|  | Other Accounts | 104 | $5.6 billion |
| John C. Holden, CFA | Registered Investment Companies | 0 | $0 |
|  | Other Pooled Investment Vehicles | 0 | $0 |
|  | Other Accounts | 104 | $5.6 billion |
| Shaun C. Siers, CFA | Registered Investment Companies | 0 | $0 |
|  | Other Pooled Investment Vehicles | 0 | $0 |
|  | Other Accounts | 104 | $5.6 billion |
| Austin Wen, CFA | Registered Investment Companies | 57 | $7.8 billion |
| Austin Wen, CFA | Other Pooled Investment Vehicles | 20 | $4.5 billion |
| Austin Wen, CFA | Other Accounts | 0 | $0 |
| Rafael Zayas, CFA | Registered Investment Companies | 52 | $8.2 billion |
| Rafael Zayas, CFA | Other Pooled Investment Vehicles | 17 | $4.5 billion |
| Rafael Zayas, CFA | Other Accounts | 0 | $0 |
| Yin Bhuyan | Registered Investment Companies | 22 | $665.9 million |
| Yin Bhuyan | Other Pooled Investment Vehicles | 3 | $8.0 million |
| Yin Bhuyan | Other Accounts | 0 | $0 |

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**Compensation**

*Todd Asset Management*

The Portfolio Managers receive a fixed base salary and discretionary bonus that are not tied to the performance of the Fund.

*Vident Asset Management*

The Portfolio Managers receive a fixed base salary and discretionary bonus that are not tied to the performance of the Fund.

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**Conflicts of Interest**

A Portfolio Manager's management of "other accounts" may give rise to potential conflicts of interest in connection with their management of the Fund's investments, on the one hand, and the investments of the other accounts, on the other. The other accounts may have the same investment objectives as the Fund. Therefore, a potential conflict of interest may arise as a result of the identical investment objectives, whereby a Portfolio Manager could favor one account over another. Another potential conflict could include a Portfolio Manager's knowledge about the size, timing and possible market impact of Fund trades, whereby a Portfolio Manager could use this information to the advantage of other accounts and to the disadvantage of the Fund. However, the Sub-Advisers have established policies and procedures to ensure that the purchase and sale of securities among all accounts the Sub-Advisers manage are fairly and equitably allocated.

**THE DISTRIBUTOR**

The Trust and Quasar Distributors, LLC (the "Distributor"), a wholly-owned subsidiary of Foreside Financial Group, LLC (d/b/a ACA Group), are parties to a distribution agreement (the "Distribution Agreement"), whereby the Distributor acts as principal underwriter for the Fund and distributes Shares. Shares are continuously offered for sale by the Distributor only in Creation Units. The Distributor will not distribute Shares in amounts less than a Creation Unit and does not maintain a secondary market in Shares. The principal business address of the Distributor is Three Canal Plaza, Suite 100, Portland, Maine 04101.

Under the Distribution Agreement, the Distributor, as agent for the Trust, will review orders for the purchase and redemption of Creation Units, provided that any subscriptions and orders will not be binding on the Trust until accepted by the Trust. The Distributor is a broker-dealer registered under the 1934 Act and a member of FINRA.

The Distributor may also enter into agreements with securities dealers ("Soliciting Dealers") who will solicit purchases of Creation Units of Shares. Such Soliciting Dealers may also be Authorized Participants (as discussed in "<u>Procedures for Purchase of Creation Units</u>" below) or DTC participants (as defined below).

The Distribution Agreement will continue for two years from its effective date and is renewable annually thereafter. The continuance of the Distribution Agreement must be specifically approved at least annually (i) by the vote of the Trustees or by a vote of the shareholders of the Fund and (ii) by the vote of a majority of the Independent Trustees who have no direct or indirect financial interest in the operations of the Distribution Agreement or any related agreement, cast in person at a meeting called for the purpose of voting on such approval. The Distribution Agreement is terminable without penalty by the Trust on 60 days' written notice when authorized either by majority vote of its outstanding voting Shares or by a vote of a majority of its Board (including a majority of the Independent Trustees), or by the Distributor on 60 days' written notice, and will automatically terminate in the event of its assignment. The Distribution Agreement provides that in the absence of willful misfeasance, bad faith or gross negligence on the part of the Distributor, or reckless disregard by it of its obligations thereunder, the Distributor shall not be liable for any action or failure to act in accordance with its duties thereunder.

***Intermediary Compensation.*** The Adviser, the Sub-Advisers, or their affiliates, out of their own resources and not out of Fund assets (*i.e.*, without additional cost to the Fund or its shareholders), may pay certain broker dealers, banks and other financial intermediaries ("Intermediaries") for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange traded products, including the Fund, or for other activities, such as marketing and educational training or support. These arrangements are not financed by the Fund and, thus, do not result in increased Fund expenses. They are not reflected in the fees and expenses listed in the fees and expenses sections of the Fund's Prospectus and they do not change the price paid by investors for the purchase of Shares or the amount received by a shareholder as proceeds from the redemption of Shares.

Such compensation may be paid to Intermediaries that provide services to the Fund, including marketing and education support (such as through conferences, webinars and printed communications). The Adviser and Sub-Advisers periodically assess the advisability of continuing to make these payments. Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries pay to your adviser, broker or other investment professional, if any, may also be significant to such adviser, broker or investment professional. Because an Intermediary may make decisions about what investment options it will make available or recommend, and what services to provide in connection with various products, based on payments it receives or is eligible to receive, such payments create conflicts of interest between the Intermediary and its clients. For example, these financial incentives may cause the Intermediary to recommend the Fund over other investments. The same conflict of interest exists with respect to your financial adviser, broker or investment professional if he or she receives similar payments from his or her Intermediary firm.

Intermediary information is current only as of the date of this SAI. Please contact your adviser, broker, or other investment professional for more information regarding any payments his or her Intermediary firm may receive. Any payments made by the Adviser, Sub-Advisers or their affiliates to an Intermediary may create the incentive for an Intermediary to encourage customers to buy Shares.

If you have any additional questions, please call 1-800-617-0004.

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***Distribution and Service Plan.*** The Trust has adopted a Distribution and Service Plan (the "Plan") in accordance with the provisions of Rule 12b-1 under the 1940 Act, which regulates circumstances under which an investment company may directly or indirectly bear expenses relating to the distribution of its shares. No payments pursuant to the Plan are expected to be made during the twelve (12) month period from the date of this SAI. Rule 12b-1 fees to be paid by the Fund under the Plan may only be imposed after approval by the Board.

Continuance of the Plan must be approved annually by a majority of the Trustees of the Trust and by a majority of the Trustees who are not interested persons (as defined in the 1940 Act) of the Trust and have no direct or indirect financial interest in the Plan or in any agreements related to the Plan ("Qualified Trustees"). The Plan requires that quarterly written reports of amounts spent under the Plan and the purposes of such expenditures be furnished to and reviewed by the Trustees. The Plan may not be amended to increase materially the amount that may be spent thereunder without approval by a majority of the outstanding Shares. All material amendments of the Plan will require approval by a majority of the Trustees of the Trust and of the Qualified Trustees.

The Plan provides that the Fund pays the Distributor an annual fee of up to a maximum of 0.25% of the average daily net assets of the Shares. Under the Plan, the Distributor may make payments pursuant to written agreements to financial institutions and intermediaries such as banks, savings and loan associations and insurance companies including, without limit, investment counselors, broker-dealers and the Distributor's affiliates and subsidiaries (collectively, "Agents") as compensation for services and reimbursement of expenses incurred in connection with distribution assistance. The Plan is characterized as a compensation plan since the distribution fee will be paid to the Distributor without regard to the distribution expenses incurred by the Distributor or the amount of payments made to other financial institutions and intermediaries. The Trust intends to operate the Plan in accordance with its terms and with the FINRA rules concerning sales charges.

Under the Plan, subject to the limitations of applicable law and regulations, the Fund is authorized to compensate the Distributor up to the maximum amount to finance any activity primarily intended to result in the sale of Creation Units of the Fund or for providing or arranging for others to provide shareholder services and for the maintenance of shareholder accounts. Such activities may include, but are not limited to: (i) delivering copies of the Fund's then current reports, prospectuses, notices, and similar materials, to prospective purchasers of Creation Units; (ii) marketing and promotional services, including advertising; (iii) paying the costs of and compensating others, including Authorized Participants (as discussed in "Procedures for Purchase of Creation Units" below) with whom the Distributor has entered into written Participant Agreements (as defined below), for performing shareholder servicing on behalf of the Fund; (iv) compensating certain Authorized Participants for providing assistance in distributing the Creation Units of the Fund, including the travel and communication expenses and salaries and/or commissions of sales personnel in connection with the distribution of the Creation Units of the Fund; (v) payments to financial institutions and intermediaries such as banks, savings and loan associations, insurance companies and investment counselors, broker-dealers, mutual fund supermarkets and the affiliates and subsidiaries of the Trust's service providers as compensation for services or reimbursement of expenses incurred in connection with distribution assistance; (vi) facilitating communications with beneficial owners of Shares, including the cost of providing (or paying others to provide) services to beneficial owners of Shares, including, but not limited to, assistance in answering inquiries related to shareholder accounts; and (vii) such other services and obligations as are set forth in the Distribution Agreement. The Distributor does not retain Fund monies for profit. Instead, it keeps them in retention for future distribution related expenses. The Adviser compensates the Distributor for certain distribution related services.

**THE TRANSFER AGENT AND ADMINISTRATOR** 

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the Fund's transfer agent, administrator, and index receipt agent.

Pursuant to a Fund Administration Servicing Agreement and a Fund Accounting Servicing Agreement between the Trust and Fund Services, Fund Services provides the Trust with administrative and management services (other than investment advisory services) and accounting services, including portfolio accounting services, tax accounting services, and furnishing financial reports. In this capacity, Fund Services does not have any responsibility or authority for the management of the Fund, the determination of investment policy, or for any matter pertaining to the distribution of Shares. As compensation for the administration, accounting and management services, the Adviser pays Fund Services a fee based on the Fund's average daily net assets, subject to a minimum annual fee. Fund Services also is entitled to certain out-of-pocket expenses for the services mentioned above, including pricing expenses.

The Fund is new and the Adviser has not paid Fund Services any fees for administrative services to the Fund as of the date of this SAI.

**CUSTODIAN AND SECURITIES LENDING AGENT**

Pursuant to a Custody Agreement, U.S. Bank National Association (the "Custodian" or "U.S. Bank"), 1555 North Rivercenter Drive, Suite 302, Milwaukee, Wisconsin 53212, serves as the custodian of the Fund's assets. The Custodian holds and administers the assets in the Fund's portfolio. Pursuant to the Custody Agreement, the Custodian receives an annual fee from the Adviser based on the Trust's total average daily net assets, subject to a minimum annual fee, and certain settlement charges. The Custodian also is entitled to certain out-of-pocket expenses.

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The Fund may participate in securities lending arrangements whereby the Fund lends certain of its portfolio securities to brokers, dealers, and financial institutions (not with individuals) to receive additional income and increase the rate of return of its portfolio. U.S. Bank serves as the Fund's securities lending agent and is responsible for (i) negotiating the fees (rebates) of securities loans within parameters approved by the Board; (ii) delivering loaned securities to the applicable borrower(s), a list of which has been approved by the Board; (iii) investing any cash collateral received for a securities loan in investments pre-approved by the Board; (iv) receiving the returned securities at the expiration of a loan's term; (v) daily monitoring of the value of the loaned securities and the collateral received; (vi) notifying borrowers to make additions to the collateral, when required; (vii) accounting and recordkeeping services as necessary for the operation of the securities lending program, and (viii) establishing and operating a system of controls and procedures to ensure compliance with its obligations under the Fund's securities lending program.

**LEGAL COUNSEL**

Morgan, Lewis & Bockius LLP, located at 1111 Pennsylvania Avenue NW, Washington, DC 20004-2541, serves as legal counsel for the Trust.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Cohen & Company, Ltd., located at 1835 Market Street, Suite 310, Philadelphia, Pennsylvania 19103, serves as the independent registered public accounting firm for the Fund. Its services include auditing the Fund's financial statements. Cohen and Co Advisory, LLC, an affiliate of Cohen & Company, Ltd., provides tax services to the Fund as requested.

**PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES**

The Trust's Board has adopted a policy regarding the disclosure of information about the Fund's security holdings. The Fund's entire portfolio holdings are publicly disseminated each day the Fund is open for business and may be available through financial reporting and news services, including publicly available internet web sites. In addition, the composition of the Deposit Securities (as defined below) is publicly disseminated daily prior to the opening of the Exchange via the National Securities Clearing Corporation ("NSCC").

**DESCRIPTION OF SHARES**

The Declaration of Trust authorizes the issuance of an unlimited number of funds and Shares. Each Share represents an equal proportionate interest in the Fund with each other Share. Shares are entitled upon liquidation to a pro rata share in the net assets of the Fund. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees may create additional series or classes of Shares. All consideration received by the Trust for shares of any additional funds and all assets in which such consideration is invested would belong to that fund and would be subject to the liabilities related thereto. Share certificates representing Shares will not be issued. Shares, when issued, are fully paid and non-assessable.

Each Share has one vote with respect to matters upon which a shareholder vote is required, consistent with the requirements of the 1940 Act and the rules promulgated thereunder. Shares of all funds of the Trust vote together as a single class, except that if the matter being voted on affects only a particular fund it will be voted on only by that fund and if a matter affects a particular fund differently from other funds, that fund will vote separately on such matter. As a Delaware statutory trust, the Trust is not required, and does not intend, to hold annual meetings of shareholders. Approval of shareholders will be sought, however, for certain changes in the operation of the Trust and for the election of Trustees under certain circumstances. Upon the written request of shareholders owning at least 10% of the Trust's shares, the Trust will call for a meeting of shareholders to consider the removal of one or more Trustees and other certain matters. In the event that such a meeting is requested, the Trust will provide appropriate assistance and information to the shareholders requesting the meeting.

Under the Declaration of Trust, the Trustees have the power to liquidate the Fund without shareholder approval. While the Trustees have no present intention of exercising this power, they may do so if the Fund fails to reach a viable size within a reasonable amount of time or for such other reasons as may be determined by the Board.

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**LIMITATION OF TRUSTEES' LIABILITY**

The Declaration of Trust provides that a Trustee shall be liable only for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees shall not be responsible or liable in any event for any neglect or wrong-doing of any officer, agent, employee, adviser or principal underwriter of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee. The Declaration of Trust also provides that the Trust shall indemnify each person who is, or has been, a Trustee, officer, employee or agent of the Trust, any person who is serving or has served at the Trust's request as a Trustee, officer, trustee, employee or agent of another organization in which the Trust has any interest as a shareholder, creditor or otherwise to the extent and in the manner provided in the Amended and Restated By-laws. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his or her willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of the office of Trustee. Nothing contained in this section attempts to disclaim a Trustee's individual liability in any manner inconsistent with the federal securities laws.

**BROKERAGE TRANSACTIONS**

The policy of the Trust regarding purchases and sales of securities for the Fund is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions. Consistent with this policy, when securities transactions are effected on a stock exchange, the Trust's policy is to pay commissions which are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. The Trust believes that a requirement always to seek the lowest possible commission cost could impede effective portfolio management and preclude the Fund and the Sub-Adviser from obtaining a high quality of brokerage and research services. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Sub-Adviser will rely upon its experience and knowledge regarding commissions generally charged by various brokers and on its judgment in evaluating the brokerage services received from the broker effecting the transaction. Such determinations are necessarily subjective and imprecise, as in most cases, an exact dollar value for those services is not ascertainable. The Trust has adopted policies and procedures that prohibit the consideration of sales of Shares as a factor in the selection of a broker or dealer to execute its portfolio transactions.

Vident owes a fiduciary duty to its clients to seek to provide best execution on trades effected. In selecting a broker-dealer for each specific transaction, Vident chooses the broker-dealer deemed most capable of providing the services necessary to obtain the most favorable execution. "Best execution" is generally understood to mean the most favorable cost or net proceeds reasonably obtainable under the circumstances. The full range of brokerage services applicable to a particular transaction may be considered when making this judgment, which may include, but is not limited to: liquidity, price, commission, timing, aggregated trades, capable floor brokers or traders, competent block trading coverage, ability to position, capital strength and stability, reliable and accurate communications and settlement processing, use of automation, knowledge of other buyers or sellers, arbitrage skills, administrative ability, underwriting and provision of information on a particular security or market in which the transaction is to occur. The specific criteria will vary depending upon the nature of the transaction, the market in which it is executed, and the extent to which it is possible to select from among multiple broker-dealers. Vident will also use electronic crossing networks ("ECNs") when appropriate.

Subject to the foregoing policies, brokers or dealers selected to execute the Fund's portfolio transactions may include the Fund's Authorized Participants (as discussed in "<u>Procedures for Purchase of Creation Units</u>" below) or their affiliates. An Authorized Participant or its affiliates may be selected to execute the Fund's portfolio transactions in conjunction with an all-cash creation unit order or an order including "cash-in-lieu" (as described below under "<u>Purchase and Redemption of Shares in Creation Units</u>"), so long as such selection is in keeping with the foregoing policies. As described below under "<u>Purchase and Redemption of Shares in Creation Units—Creation Transaction Fee</u>" and "<u>—Redemption Transaction Fee</u>", the Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for creation orders that facilitate the rebalance of the Fund's portfolio in a more tax efficient manner than could be achieved without such order, even if the decision to not charge a variable fee could be viewed as benefiting the Authorized Participant or its affiliate selected to execute the Fund's portfolio transactions in connection with such orders.

Vident may use the Fund's assets for, or participate in, third-party soft dollar arrangements, in addition to receiving proprietary research from various full-service brokers, the cost of which is bundled with the cost of the broker's execution services. Vident does not "pay up" for the value of any such proprietary research. Section 28(e) of the 1934 Act permits Vident, under certain circumstances, to cause the Fund to pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the broker or dealer. Vident may receive a variety of research services and information on many topics, which it can use in connection with its management responsibilities with respect to the various accounts over which it exercises investment discretion or otherwise provides investment advice. The research services may include qualifying order management systems, portfolio attribution and monitoring services and computer software and access charges which are directly related to investment research. Accordingly, the Fund may pay a broker commission higher than the lowest available in recognition of the broker's provision of such services to Vident, but only if Vident determines the total commission (including the soft dollar benefit) is comparable to the best

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commission rate that could be expected to be received from other brokers. The amount of soft dollar benefits received depends on the amount of brokerage transactions effected with the brokers. A conflict of interest exists because there is an incentive to: 1) cause clients to pay a higher commission than the firm might otherwise be able to negotiate; 2) cause clients to engage in more securities transactions than would otherwise be optimal; and 3) only recommend brokers that provide soft dollar benefits.

Vident faces a potential conflict of interest when it uses client trades to obtain brokerage or research services. This conflict exists because Vident is able to use the brokerage or research services to manage client accounts without paying cash for such services, which reduces Vident's expenses to the extent that Vident would have purchased such products had they not been provided by brokers. Section 28(e) permits Vident to use brokerage or research services for the benefit of any account it manages. Certain accounts managed by Vident may generate soft dollars used to purchase brokerage or research services that ultimately benefit other accounts managed by Vident, effectively cross subsidizing the other accounts managed by Vident that benefit directly from the product. Vident may not necessarily use all of the brokerage or research services in connection with managing the Fund whose trades generated the soft dollars used to purchase such products.

Vident is responsible, subject to oversight by the Adviser and the Board, for placing orders on behalf of the Fund for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities of the Fund and one or more other investment companies or clients supervised by Vident are considered at or about the same time, transactions in such securities are allocated among the several investment companies and clients in a manner deemed equitable and consistent with its fiduciary obligations to all by Vident. In some cases, this procedure could have a detrimental effect on the price or volume of the security so far as the Fund is concerned. However, in other cases, it is possible that the ability to participate in volume transactions and to negotiate lower brokerage commissions will be beneficial to the Fund. The primary consideration is prompt execution of orders at the most favorable net price.

The Fund may deal with affiliates in principal transactions to the extent permitted by exemptive order or applicable rule or regulation.

The Fund is new and had not paid any brokerage commissions as of the date of this SAI.

**Brokerage with Fund Affiliates**. The Fund may execute brokerage or other agency transactions through registered broker-dealer affiliates of the Fund, the Adviser, the Sub-Adviser, or the Distributor for a commission in conformity with the 1940 Act, the 1934 Act and rules promulgated by the SEC. These rules require that commissions paid to the affiliate by the Fund for exchange transactions not exceed "usual and customary" brokerage commissions. The rules define "usual and customary" commissions to include amounts which are "reasonable and fair compared to the commission, fee or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time." The Trustees, including those who are not "interested persons" of the Fund, have adopted procedures for evaluating the reasonableness of commissions paid to affiliates and review these procedures periodically. The Fund is new and, therefore, as of the date of this SAI, did not pay brokerage commissions to any registered broker-dealer affiliates of the Fund, the Adviser, the Sub-Advisers, or the Distributor.

**Securities of "Regular Broker-Dealers."** The Fund is required to identify any securities of its "regular brokers and dealers" (as such term is defined in the 1940 Act) that it may hold at the close of its most recent fiscal year. "Regular brokers or dealers" of the Fund are the ten brokers or dealers that, during the most recent fiscal year: (i) received the greatest dollar amounts of brokerage commissions from the Fund's portfolio transactions; (ii) engaged as principal in the largest dollar amounts of portfolio transactions of the Fund; or (iii) sold the largest dollar amounts of Shares. The Fund is new and, therefore, as of the date of this SAI, did not hold any securities of its "regular broker-dealers."

**PORTFOLIO TURNOVER RATE**

Portfolio turnover may vary from year to year, as well as within a year. High turnover rates are likely to result in comparatively greater brokerage expenses. The overall reasonableness of brokerage commissions is evaluated by the Sub-Advisers based upon their knowledge of available information as to the general level of commissions paid by other institutional investors for comparable services.

**BOOK ENTRY ONLY SYSTEM**

The Depository Trust Company ("DTC") acts as securities depositary for Shares. Shares are represented by securities registered in the name of DTC or its nominee, Cede & Co., and deposited with, or on behalf of, DTC. Except in limited circumstances set forth below, certificates will not be issued for Shares.

DTC is a limited-purpose trust company that was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by the New York Stock Exchange ("NYSE") and FINRA. Access to the DTC system is also available to others such as banks, brokers,

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dealers, and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect Participants").

Beneficial ownership of Shares is limited to DTC Participants, Indirect Participants, and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Shares (owners of such beneficial interests are referred to in this SAI as "Beneficial Owners") is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase of Shares. The Trust recognizes DTC or its nominee as the record owner of all Shares for all purposes. Beneficial Owners of Shares are not entitled to have Shares registered in their names and will not receive or be entitled to physical delivery of Share certificates. Each Beneficial Owner must rely on the procedures of DTC and any DTC Participant and/or Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of Shares.

Conveyance of all notices, statements, and other communications to Beneficial Owners is effected as follows. DTC will make available to the Trust upon request and for a fee a listing of Shares held by each DTC Participant. The Trust shall obtain from each such DTC Participant the number of Beneficial Owners holding Shares, directly or indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies of such notice, statement, or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all Shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the Fund as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of Shares held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC Participants.

The Trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in Shares, or for maintaining, supervising, or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.

DTC may determine to discontinue providing its service with respect to the Fund at any time by giving reasonable notice to the Fund and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Fund shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such replacement is unavailable, to issue and deliver printed certificates representing ownership of Shares, unless the Trust makes other arrangements with respect thereto satisfactory to the Exchange.

**PURCHASE AND REDEMPTION OF SHARES IN CREATION UNITS**

The Fund issues and redeems Shares only in Creation Units on a continuous basis through the Transfer Agent, without a sales load (but subject to transaction fees, if applicable), at their NAV per share next determined after receipt of an order, on any Business Day, in proper form pursuant to the terms of the Authorized Participant Agreement ("Participant Agreement"). The NAV of Shares is calculated each Business Day as of the scheduled close of regular trading on the NYSE, generally 4:00 p.m., Eastern time. The Fund will not issue fractional Creation Units. A "Business Day" is any day on which the NYSE is open for business.

**Fund Deposit.** The consideration for purchase of a Creation Unit of the Fund generally consists of (a)(i) Deposit Securities and/or (ii) Deposit Cash and (b) a Cash Component, computed as described below. Notwithstanding the foregoing, the Fund reserves the right to permit or require the substitution of a cash in lieu amount to replace any Deposit Security in connection with the purchase of a Creation Unit. When accepting purchases of Creation Units for all or a portion of Deposit Cash, the Fund may incur additional costs associated with the acquisition of Deposit Securities that would otherwise be provided by an in-kind purchaser.

Together, the Deposit Securities or Deposit Cash, as applicable, and the Cash Component constitute the "Fund Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund. The "Cash Component" is an amount equal to the difference between the NAV of Shares (per Creation Unit) and the value of the Deposit Securities or Deposit Cash, as applicable. If the Cash Component is a positive number (*i.e.*, the NAV per Creation Unit exceeds the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such positive amount. If the Cash Component is a negative number (*i.e.*, the NAV per Creation Unit is less than the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such negative amount and the creator will be entitled to receive cash in an amount equal to the Cash Component. The Cash Component serves the function of compensating for any differences between the NAV per Creation Unit and the value of the Deposit Securities or Deposit Cash, as applicable. Computation of the Cash Component excludes any stamp duty or other similar

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fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, if applicable, which shall be the sole responsibility of the Authorized Participant (as defined below).

The Fund, through NSCC, makes available on each Business Day, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern time), the list of the names and the required number of shares of each Deposit Security or the required amount of Deposit Cash, as applicable, to be included in the current Fund Deposit (based on information at the end of the previous Business Day) for the Fund. Such Fund Deposit is subject to any applicable adjustments as described below, to effect purchases of Creation Units of the Fund until such time as the next-announced composition of the Deposit Securities or the required amount of Deposit Cash, as applicable, is made available.

The identity and number of Shares of the Deposit Securities or the amount of Deposit Cash, as applicable, required for a Fund Deposit for the Fund changes as rebalancing adjustments and corporate action events are reflected from time to time by the Sub-Advisers with a view to the investment objective of the Fund.

The Trust reserves the right to permit or require the substitution of Deposit Cash to replace any Deposit Security, which shall be added to the Cash Component, including, without limitation, in situations where the Deposit Security: (i) may not be available in sufficient quantity for delivery; (ii) may not be eligible for transfer through the systems of DTC for corporate securities and municipal securities; (iii) may not be eligible for trading by an Authorized Participant (as defined below) or the investor for which it is acting; (iv) would be restricted under the securities laws or where the delivery of the Deposit Security to the Authorized Participant would result in the disposition of the Deposit Security by the Authorized Participant becoming restricted under the securities laws; or (v) in certain other situations (collectively, "custom orders").

**Procedures for Purchase of Creation Units.** To be eligible to place orders with the Distributor to purchase a Creation Unit of the Fund, an entity must be (i) a "Participating Party" (*i.e.*, a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the NSCC (the "Clearing Process")), a clearing agency that is registered with the SEC; or (ii) a DTC Participant (see "<u>Book Entry Only System</u>"). In addition, each Participating Party or DTC Participant (each, an "Authorized Participant") must execute a Participant Agreement that has been agreed to by the Distributor, and that has been accepted by the Transfer Agent, with respect to purchases and redemptions of Creation Units. Each Authorized Participant will agree, pursuant to the terms of a Participant Agreement, on behalf of itself or any investor on whose behalf it will act, to certain conditions, including that it will pay to the Fund, an amount of cash sufficient to pay the Cash Component together with the creation transaction fee (described below), if applicable, and any other applicable fees and taxes.

All orders to purchase Shares directly from the Fund must be placed for one or more Creation Units and in the manner and by the time set forth in the Participant Agreement and/or applicable order form. The order cut-off time for the Fund for orders to purchase Creation Units is 4:00 p.m. Eastern time, which may be modified by the Fund from time-to-time by amendment to the Participant Agreement and/or applicable order form. In the case of custom orders, the order must be received by the Distributor no later than 3:00 p.m. Eastern time or such earlier time as may be designated by the Fund and disclosed to Authorized Participants. The date on which an order to purchase Creation Units (or an order to redeem Creation Units, as set forth below) is received and accepted is referred to as the "Order Placement Date."

An Authorized Participant may require an investor to make certain representations or enter into agreements with respect to the order (*e.g.*, to provide for payments of cash, when required). Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to purchase Shares directly from the Fund in Creation Units have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement and only a small number of such Authorized Participants may have international capabilities.

On days when the Exchange closes earlier than normal, the Fund may require orders to create Creation Units to be placed earlier in the day. In addition, if a market or markets on which the Fund's investments are primarily traded is closed, the Fund will also generally not accept orders on such day(s). Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to the Transfer Agent pursuant to procedures set forth in the Participant Agreement and in accordance with the applicable order form. On behalf of the Fund, the Transfer Agent will notify the Custodian of such order. The Custodian will then provide such information to the appropriate local sub-custodian(s). Those placing orders through an Authorized Participant should allow sufficient time to permit proper submission of the purchase order to the Transfer Agent by the cut-off time on such Business Day. Economic or market disruptions or changes, or telephone or other communication failure may impede the ability to reach the Transfer Agent or an Authorized Participant.

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Fund Deposits must be delivered by an Authorized Participant through the Federal Reserve System (for cash) or through DTC (for corporate securities), through a subcustody agent (for foreign securities), and/or through such other arrangements allowed by the Fund or its agents. With respect to foreign Deposit Securities, the Custodian shall cause the subcustodian of the Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, such Deposit Securities (or Deposit Cash for all or a part of such securities, as permitted or required), with any appropriate adjustments as advised by the Fund. Foreign Deposit Securities must be delivered to an account maintained at the applicable local subcustodian. The Fund Deposit transfer must be ordered by the Authorized Participant in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities or Deposit Cash, as applicable, to the account of the Fund or its agents by no later than 12:00 p.m. Eastern time (or such other time as specified by the Fund) on the Settlement Date. If the Fund or its agents do not receive all of the Deposit Securities, or the required Deposit Cash in lieu thereof, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to the Fund for losses, if any, resulting therefrom. The "Settlement Date" for the Fund is generally the first Business Day after the Order Placement Date. However, the Fund reserves the right to settle transactions on a basis other than the Business Day after the Order Placement Date.

All questions as to the number of Deposit Securities or Deposit Cash to be delivered, as applicable, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities or cash, as applicable, will be determined by the Fund, whose determination shall be final and binding. The amount of cash represented by the Cash Component must be transferred directly to the Custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by the Custodian no later than the Settlement Date. If the Cash Component and the Deposit Securities or Deposit Cash, as applicable, are not received by the Custodian in a timely manner by the Settlement Date, the creation order may be cancelled. Upon written notice to the Transfer Agent, such canceled order may be resubmitted the following Business Day using a Fund Deposit as newly constituted to reflect the then current NAV of the Fund.

The order shall be deemed to be received on the Business Day on which the order is placed provided that the order is placed in proper form prior to the applicable cut-off time. Trades are to be settled when the federal funds in the appropriate amount are deposited by 2:00 p.m. or 3:00 p.m., Eastern time (as set forth on the applicable order form), with the Custodian on the Settlement Date. If the order is not placed in proper form as required, or federal funds in the appropriate amount are not received by 2:00 p.m. or 3:00 p.m., Eastern time (as set forth on the applicable order form) on the Settlement Date, then the order may be deemed to be rejected and the Authorized Participant shall be liable to the Fund for losses, if any, resulting therefrom. A creation request is considered to be in "proper form" if all procedures set forth in the Participant Agreement, order form and this SAI are properly followed.

**Issuance of a Creation Unit.** Except as provided in this SAI, Creation Units will not be issued until the transfer of good title to the Fund of the Deposit Securities or payment of Deposit Cash, as applicable, and the payment of the Cash Component have been completed. When the subcustodian has confirmed to the Custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant subcustodian or subcustodians, the Distributor and the Adviser shall be notified of such delivery, and the Fund will issue and cause the delivery of the Creation Units. The delivery of Creation Units so created generally will occur no later than one Business Day following the day on which the purchase order is deemed received by the Transfer Agent. However, the Fund reserves the right to settle transactions on a basis other than the Business Day after the purchase order is deemed received by the Distributor. The Authorized Participant shall be liable to the Fund for losses, if any, resulting from unsettled orders.

Creation Units may be purchased in advance of receipt by the Fund of all or a portion of the applicable Deposit Securities as described below. In these circumstances, the initial deposit will have a value greater than the NAV of Shares on the date the order is placed in proper form since, in addition to available Deposit Securities, cash must be deposited in an amount equal to the sum of (i) the Cash Component, plus (ii) an additional amount of cash equal to a percentage of the value as set forth in the Participant Agreement, of the undelivered Deposit Securities (the "Additional Cash Deposit"), which shall be maintained in a separate non-interest bearing collateral account. The Authorized Participant must deposit with the Custodian the Additional Cash Deposit, as applicable, by 12:00 p.m. Eastern time (or such other time as specified by the Fund) on the Settlement Date. If the Fund or its agents do not receive the Additional Cash Deposit in the appropriate amount, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to the Fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with the Fund, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with the Fund in an amount at least equal to the applicable percentage, as set forth in the Participant Agreement, of the daily market value of the missing Deposit Securities. The Participant Agreement will permit the Fund to buy the missing Deposit Securities at any time. Authorized Participants will be liable to the Fund for the costs incurred by the Fund in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the value of such Deposit Securities on the day the purchase order was deemed received by the Distributor plus the brokerage and related transaction costs associated with such purchases. The Fund will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by the Custodian or purchased by the Fund and deposited into the Fund. In addition, a transaction fee, as described below under "<u>Creation Transaction Fee</u>," may be charged. The delivery of Creation Units so created generally will occur no later than the Settlement Date.

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**Acceptance of Orders of Creation Units.** The Fund reserves the right to reject an order for Creation Units transmitted to it by the Transfer Agent with respect to the Fund including, without limitation, if (a) the order is not in proper form; (b) the Deposit Securities or Deposit Cash, as applicable, delivered by the Participant are not as disseminated through the facilities of the NSCC for that date by the Custodian; (c) the investor(s), upon obtaining Shares ordered, would own 80% or more of the currently outstanding Shares; (d) the acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance or receipt of the order for a Creation Unit would, in the opinion of Fund counsel, be unlawful; or (f) in the event that circumstances outside the control of the Fund, the Custodian, the Transfer Agent and/or the Adviser make it for all practical purposes not feasible to process orders for Creation Units.

Examples of such circumstances include acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting the Fund, the Distributor, the Custodian, a sub-custodian, the Transfer Agent, DTC, NSCC, Federal Reserve System, or any other participant in the creation process, and other extraordinary events. The Transfer Agent shall notify a prospective creator of a Creation Unit and/or the Authorized Participant acting on behalf of the creator of a Creation Unit of its rejection of the order of such person. The Fund, the Transfer Agent, the Custodian, any sub-custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall either of them incur any liability for the failure to give any such notification. The Fund, the Transfer Agent, the Custodian and the Distributor shall not be liable for the rejection of any purchase order for Creation Units.

All questions as to the number of Shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be delivered shall be determined by the Fund, and the Fund's determination shall be final and binding.

**Creation Transaction Fee.** A fixed purchase (*i.e.*, creation) transaction fee, payable to the Fund's custodian, may be imposed for the transfer and other transaction costs associated with the purchase of Creation Units ("Creation Order Costs"). The standard fixed creation transaction fee for the Fund is $300, regardless of the number of Creation Units created in the transaction. The Fund may adjust the standard fixed creation transaction fee from time to time. The fixed creation fee may be waived on certain orders if the Fund's custodian has determined to waive some or all of the Creation Order Costs associated with the order or another party, such as the Adviser, has agreed to pay such fee.

In addition, a variable fee, payable to the Fund, of up to a maximum of 2% of the value of the Creation Units subject to the transaction may be imposed for cash purchases, non-standard orders, or partial cash purchases of Creation Units. The variable charge is primarily designed to cover additional costs (*e.g.*, brokerage, taxes) involved with buying the securities with cash. The Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for creation orders that facilitate the rebalance of the Fund's portfolio in a more tax efficient manner than could be achieved without such order.

Investors who use the services of a broker or other such intermediary may be charged a fee for such services. Investors are responsible for the fixed costs of transferring the Fund Securities from the Fund to their account or on their order.

**Risks of Purchasing Creation Units.** There are certain legal risks unique to investors purchasing Creation Units directly from the Fund. Because Shares may be issued on an ongoing basis, a "distribution" of Shares could be occurring at any time. Certain activities that a shareholder performs as a dealer could, depending on the circumstances, result in the shareholder being deemed a participant in the distribution in a manner that could render the shareholder a statutory underwriter and subject to the prospectus delivery and liability provisions of the Securities Act. For example, a shareholder could be deemed a statutory underwriter if it purchases Creation Units from the Fund, breaks them down into the constituent shares, and sells those shares directly to customers, or if a shareholder chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary-market demand for Shares. Whether a person is an underwriter depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could cause you to be deemed an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary-market transactions), and thus dealing with Shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.

**Redemption.** Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Fund through the Transfer Agent and only on a Business Day. The Fund will not redeem shares in amounts less than Creation Units, except upon liquidation of the Fund. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of Shares to constitute a redeemable Creation Unit.

Fund Securities received on redemption may not be identical to Deposit Securities.

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Redemption proceeds for a Creation Unit are paid either in-kind or in cash, or combination thereof, as determined by the Fund. With respect to in-kind redemptions of the Funds, redemption proceeds for a Creation Unit will consist of Fund Securities, as announced by the Custodian on the Business Day of the request for redemption, received in proper form plus the Cash Redemption Amount, less a fixed redemption transaction fee, as applicable on that day. The Cash Redemption Amount is an amount equal to the difference between the NAV of Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities. Fund Securities received on redemption may not be identical to Deposit Securities.

In the event that the Fund Securities have a value greater than the NAV of Shares, a compensating cash payment equal to the differential is required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, at the Fund's discretion, an Authorized Participant may receive the corresponding cash value of the securities in lieu of the in-kind securities value representing one or more Fund Securities.

**Redemption Transaction Fee.** A fixed redemption transaction fee, payable to the Fund's custodian, may be imposed for the transfer and other transaction costs associated with the redemption of Creation Units ("Redemption Order Costs"). The standard fixed redemption transaction fee for the Fund is $300, regardless of the number of Creation Units redeemed in the transaction. The Fund may adjust the redemption transaction fee from time to time. The fixed redemption fee may be waived on certain orders if the Fund's custodian has determined to waive some or all of the Redemption Order Costs associated with the order or another party, such as the Adviser, has agreed to pay such fee.

In addition, a variable fee, payable to the Fund, of up to a maximum of 2% of the value of the Creation Units subject to the transaction may be imposed for cash redemptions, non-standard orders, or partial cash redemptions (when cash redemptions are available) of Creation Units. The variable charge is primarily designed to cover additional costs (*e.g.*, brokerage, taxes) involved with selling portfolio securities to satisfy a cash redemption. The Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for redemption orders that facilitate the rebalance of the Fund's portfolio in a more tax efficient manner than could be achieved without such order.

Investors who use the services of a broker or other such intermediary may be charged a fee for such services. Investors are responsible for the fixed costs of transferring the Fund Securities from the Fund to their account or on their order.

**Procedures for Redemption of Creation Units**. Orders to redeem Creation Units must be submitted in proper form to the Transfer Agent prior to 4:00 p.m. Eastern time. A redemption request is considered to be in "proper form" if (i) an Authorized Participant has transferred or caused to be transferred to the Fund's Transfer Agent the Creation Unit(s) being redeemed through the book-entry system of DTC so as to be effective by the time as set forth in the Participant Agreement and (ii) a request in form satisfactory to the Fund is received by the Transfer Agent from the Authorized Participant on behalf of itself or another redeeming investor within the time periods specified in the Participant Agreement. If the Transfer Agent does not receive the investor's Shares through DTC's facilities by the times and pursuant to the other terms and conditions set forth in the Participant Agreement, the redemption request shall be rejected.

The Authorized Participant must transmit the request for redemption, in the form required by the Fund, to the Transfer Agent in accordance with procedures set forth in the Participant Agreement. Investors should be aware that their particular broker may not have executed a Participant Agreement, and that, therefore, requests to redeem Creation Units may have to be placed by the investor's broker through an Authorized Participant who has executed a Participant Agreement. Investors making a redemption request should be aware that such request must be in the form specified by such Authorized Participant. Investors making a request to redeem Creation Units should allow sufficient time to permit proper submission of the request by an Authorized Participant and transfer of Shares to the Fund's Transfer Agent; such investors should allow for the additional time that may be required to effect redemptions through their banks, brokers or other financial intermediaries if such intermediaries are not Authorized Participants.

**Additional Redemption Procedures.** In connection with taking delivery of Shares of Fund Securities upon redemption of Creation Units, a redeeming shareholder or Authorized Participant acting on behalf of such shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such Fund Securities will be delivered. Deliveries of redemption proceeds generally will be made within one Business Day of the trade date. However, the Fund reserves the right to settle transactions on a basis other than the Business Day after the trade date.

The Fund may in its discretion exercise its option to redeem such Shares in cash, and the redeeming investor will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that the Fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its Shares based on the NAV of Shares next determined after the redemption request is received in proper form (minus a redemption transaction fee, if applicable, and additional charge for requested cash redemptions specified above, to offset the Fund's brokerage and other transaction costs associated with the disposition of Fund Securities). The Fund may also, in its sole discretion, upon request of a shareholder, provide such redeemer a portfolio of securities that differs from the exact composition of the Fund Securities but does not differ in NAV.

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Redemptions of Shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular security included in the Fund Securities applicable to the redemption of Creation Units may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming investor of Shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment. Further, an Authorized Participant that is not a "qualified institutional buyer," ("QIB"), as such term is defined under Rule 144A of the Securities Act, will not be able to receive Fund Securities that are restricted securities eligible for resale under Rule 144A. An Authorized Participant may be required by the Fund to provide a written confirmation with respect to QIB status to receive Fund Securities.

Because the portfolio securities of the Fund may trade on other exchanges on days that the Exchange is closed or are otherwise not Business Days for the Fund, shareholders may not be able to redeem their Shares, or to purchase or sell Shares on the Exchange, on days when the NAV of the Fund could be significantly affected by events in the relevant foreign markets.

The right of redemption may be suspended or the date of payment postponed with respect to the Fund (1) for any period during which the Exchange is closed (other than customary weekend and holiday closings); (2) for any period during which trading on the Exchange is suspended or restricted; (3) for any period during which an emergency exists as a result of which disposal of Shares or determination of the NAV of Shares is not reasonably practicable; or (4) in such other circumstance as is permitted by the SEC.

**DETERMINATION OF NET ASSET VALUE**

NAV per Share for the Fund is computed by dividing the value of the net assets of the Fund (*i.e.*, the value of its total assets less total liabilities) by the total number of Shares outstanding, rounded to the nearest cent. Expenses and fees, including the management fees, are accrued daily and taken into account for purposes of determining NAV. The NAV is calculated by Fund Services and determined at the scheduled close of the regular trading session on the NYSE (ordinarily 4:00 p.m., Eastern time) on each day that the NYSE is open, provided that fixed income assets may be valued as of the announced closing time for trading in fixed income instruments on any day that the Securities Industry and Financial Markets Association ("SIFMA") announces an early closing time.

Pursuant to Rule 2a-5 under the 1940 Act, the Board has appointed the Adviser as the Fund's valuation designee (the "Valuation Designee") to perform all fair valuations of the Fund's portfolio investments, subject to the Board's oversight. As the Valuation Designee, the Adviser has established procedures for its fair valuation of the Fund's portfolio investments. These procedures address, among other things, determining when market quotations are not readily available or reliable and the methodologies to be used for determining the fair value of investments, as well as the use and oversight of third-party pricing services for fair valuation. The Adviser's fair value determinations will be carried out in compliance with Rule 2a-5 and based on fair value methodologies established and applied by the Adviser and periodically tested to ensure such methodologies are appropriate and accurate with respect to the Fund's portfolio investments. The Adviser's fair value methodologies may involve obtaining inputs and prices from third-party pricing services.

In calculating the Fund's NAV per Share, the Fund's investments are generally valued using market quotations to the extent such market quotations are readily available. If market quotations are not readily available or are deemed to be unreliable by the Adviser, the Adviser will fair value such investments and use the fair value to calculate the Fund's NAV. When fair value pricing is employed, the prices of securities used by the Adviser to calculate the Fund's NAV may differ from quoted or published prices for the same securities. Due to the subjective and variable nature of fair value pricing, it is possible that the fair value determined for a particular security may be materially different (higher or lower) from the price of the security quoted or published by others, or the value when trading resumes or is realized upon its sale. There may be multiple methods that can be used to value a portfolio investment when market quotations are not readily available. The value established for any portfolio investment at a point in time might differ from what would be produced using a different methodology or if it had been priced using market quotations.

**DIVIDENDS AND DISTRIBUTIONS**

The following information supplements and should be read in conjunction with the section in the Prospectus entitled "Dividends, Distributions, and Taxes."

<u>General Policies</u>. Dividends from net investment income, if any, are declared and paid at least annually by the Fund. Distributions of net realized securities gains, if any, generally are declared and paid once a year, but the Fund may make distributions on a more frequent basis to improve index tracking for the Fund or to comply with the distribution requirements of the Code to preserve the Fund's eligibility for treatment as a RIC, in all events in a manner consistent with the provisions of the 1940 Act.

Dividends and other distributions on Shares are distributed, as described below, on a pro rata basis to Beneficial Owners of such Shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Trust.

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The Fund makes additional distributions to the extent necessary (i) to distribute the entire annual taxable income of the Fund, plus any net capital gains and (ii) to avoid imposition of the excise tax imposed by Section 4982 of the Code. Management of the Trust reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable to preserve the Fund's eligibility for treatment as a RIC or to avoid imposition of income or excise taxes on undistributed income.

<u>Dividend Reinvestment Service</u>. The Trust will not make the DTC book-entry dividend reinvestment service available for use by Beneficial Owners for reinvestment of their cash proceeds, but certain individual broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by Beneficial Owners of the Fund through DTC Participants for reinvestment of their dividend distributions. Investors should contact their brokers to ascertain the availability and description of these services. Beneficial Owners should be aware that each broker may require investors to adhere to specific procedures and timetables to participate in the dividend reinvestment service and investors should ascertain from their brokers such necessary details. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole Shares issued by the Trust of the Fund at NAV per Share. Distributions reinvested in additional Shares will nevertheless be taxable to Beneficial Owners acquiring such additional Shares to the same extent as if such distributions had been received in cash.

**FEDERAL INCOME TAXES**

The following is only a summary of certain important U.S. federal income tax considerations generally affecting the Fund and its shareholders that supplements the discussion in the Prospectus. No attempt is made to present a comprehensive explanation of the federal, state, local or foreign tax treatment of the Fund or its shareholders, and the discussion here and in the Prospectus is not intended to be a substitute for careful tax planning.

The following general discussion of certain U.S. federal income tax consequences is based on provisions of the Code and the regulations issued thereunder as in effect on the date of this SAI. New legislation, as well as administrative changes or court decisions, may significantly change the conclusions expressed herein, and may have a retroactive effect with respect to the transactions contemplated herein.

Shareholders are urged to consult their own tax advisers regarding the application of the provisions of tax law described in this SAI in light of the particular tax situations of the shareholders and regarding specific questions as to federal, state, local or foreign taxes.

<u>Taxation of the Fund</u>. The Fund intends to elect and intends to qualify each year to be treated as a RIC under the Code. As such, the Fund should not be subject to federal income taxes on its net investment income and capital gains, if any, to the extent that it timely distributes such income and capital gains to its shareholders. To qualify for treatment as a RIC, the Fund must distribute annually to its shareholders at least the sum of 90% of its net investment income (generally including the excess of net short-term capital gains over net long-term capital losses) and 90% of its net tax-exempt interest income, if any (the "Distribution Requirement") and also must meet several additional requirements. Among these requirements are the following: (i) at least 90% of the Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities or foreign currencies and net income derived from interests in qualified publicly traded partnerships (the "Qualifying Income Requirement"); and (ii) at the end of each quarter of the Fund's taxable year, the Fund's assets must be diversified so that (a) at least 50% of the value of the Fund's total assets is represented by cash and cash items, U.S. government securities, securities of other RICs, and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater in value than 5% of the value of the Fund's total assets and to not more than 10% of the outstanding voting securities of such issuer, including the equity securities of a qualified publicly traded partnership, and (b) not more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, in the securities (other than U.S. government securities or securities of other RICs) of any one issuer, the securities (other than securities of other RICs) of two or more issuers which the Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the "Diversification Requirement").

It may not be possible for the Fund to fully implement a replication strategy or a representative sampling strategy while satisfying the Diversification Requirement. The Fund's efforts to satisfy the Diversification Requirement may affect the Fund's execution of its investment strategy and may cause the Fund's return to deviate from that of the Index, and the Fund's efforts to represent the Index using a sampling strategy, if such a strategy is used at any point, may cause it inadvertently to fail to satisfy the Diversification Requirement.

To the extent the Fund makes investments that may generate income that is not qualifying income, including certain derivatives, the Fund will seek to restrict the resulting income from such investments so that the Fund's non-qualifying income does not exceed 10% of its gross income.

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Although the Fund intends to distribute substantially all of its net investment income and may distribute its capital gains for any taxable year, the Fund will be subject to federal income taxation to the extent any such income or gains are not distributed. The Fund is treated as a separate corporation for federal income tax purposes. The Fund therefore is considered to be a separate entity in determining its treatment under the rules for RICs described herein. The requirements (other than certain organizational requirements) for qualifying RIC status are determined at the Fund level rather than at the Trust level.

If the Fund fails to satisfy the Qualifying Income Requirement or the Diversification Requirement in any taxable year, the Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect, and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain *de minimis* failures of the Diversification Requirement where the Fund corrects the failure within a specified period of time. To be eligible for the relief provisions with respect to a failure to meet the Diversification Requirement, the Fund may be required to dispose of certain assets. If these relief provisions were not available to the Fund and it were to fail to qualify for treatment as a RIC for a taxable year, all of its taxable income would be subject to tax at the regular 21% corporate rate without any deduction for distributions to shareholders, and its distributions (including capital gains distributions) generally would be taxable to the shareholders of the Fund as ordinary income dividends, to the extent of the Fund's current and accumulated earnings and profits, subject to the dividends received deduction for corporate shareholders and the lower tax rates on qualified dividend income received by non-corporate shareholders, subject to certain limitations. To requalify for treatment as a RIC in a subsequent taxable year, the Fund would be required to satisfy the RIC qualification requirements for that year and to distribute any earnings and profits from any year in which the Fund failed to qualify for tax treatment as a RIC. If the Fund failed to qualify as a RIC for a period greater than two taxable years, it would generally be required to pay a Fund-level tax on certain net built in gains recognized with respect to certain of its assets upon disposition of such assets within five years of qualifying as a RIC in a subsequent year. The Board reserves the right not to maintain the qualification of the Fund for treatment as a RIC if it determines such course of action to be beneficial to shareholders. If the Fund determines that it will not qualify as a RIC, the Fund will establish procedures to reflect the anticipated tax liability in the Fund's NAV.

If the Fund meets the Distribution Requirement but retains some or all of its income or gains, it will be subject to federal income tax to the extent any such income or gains are not distributed. The Fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate shares of the income tax paid by the Fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their tax liabilities, and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their Shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective income tax credits.

The Fund may elect to treat part or all of any "qualified late year loss" as if it had been incurred in the succeeding taxable year in determining the Fund's taxable income, net capital gain, net short-term capital gain, and earnings and profits. The effect of this election is to treat any such "qualified late year loss" as if it had been incurred in the succeeding taxable year in characterizing Fund distributions for any calendar year. A "qualified late year loss" generally includes net capital loss, net long-term capital loss, or net short-term capital loss incurred after October 31 of the current taxable year (commonly referred to as "post-October losses") and certain other late-year losses.

Capital losses in excess of capital gains ("net capital losses") are not permitted to be deducted against a RIC's net investment income. Instead, for U.S. federal income tax purposes, potentially subject to certain limitations, the Fund may carry a net capital loss from any taxable year forward indefinitely to offset its capital gains, if any, in years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they will not result in U.S. federal income tax liability to the Fund and may not be distributed as capital gains to its shareholders. Generally, the Fund may not carry forward any losses other than net capital losses. The carryover of capital losses may be limited under the general loss limitation rules if the Fund experiences an ownership change as defined in the Code.

The Fund will be subject to a nondeductible 4% federal excise tax on certain undistributed income if it does not distribute to its shareholders in each calendar year an amount at least equal to 98% of its ordinary income for the calendar year plus 98.2% of its capital gain net income for the one-year period ending on October 31 of that year, subject to an increase for any shortfall in the prior year's distribution. For this purpose, any ordinary income or capital gain net income retained by the Fund and subject to corporate income tax will be considered to have been distributed. The Fund intends to declare and distribute dividends and distributions in the amounts and at the times necessary to avoid the application of the excise tax, but the Fund can make no assurances that all such tax liability will be completely eliminated. For example, the Fund may receive delayed or corrected tax reporting statements from its investments that cause the Fund to accrue additional income and gains after the Fund has already made its excise tax distributions for the year. In such a situation, the Fund may incur an excise tax liability resulting from such delayed receipt of such tax information statements. In addition, the Fund may in certain circumstances be required to liquidate Fund investments in order to make sufficient distributions to avoid federal excise tax liability at a time when the investment adviser might not otherwise have chosen to do so, and liquidation of investments in such circumstances may affect the ability of the Fund to satisfy the requirement for qualification as a RIC.

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<u>Taxation of Shareholders – Distributions</u>. The Fund intends to distribute annually to its shareholders substantially all of its investment company taxable income (computed without regard to the deduction for dividends paid), its net tax-exempt income, if any, and any net capital gain (net recognized long-term capital gains in excess of net recognized short-term capital losses, taking into account any capital loss carryforwards). The distribution of investment company taxable income (as so computed) and net realized capital gain will be taxable to Fund shareholders regardless of whether the shareholder receives these distributions in cash or reinvests them in additional Shares.

The Fund (or your broker) will report to shareholders annually the amounts of dividends paid from ordinary income, the amount of distributions of net capital gain, the portion of dividends which may qualify for the dividends received deduction for corporations, and the portion of dividends which may qualify for treatment as qualified dividend income, which, subject to certain limitations and requirements, is taxable to non-corporate shareholders at rates of up to 20%. Distributions from the Fund's net capital gain will be taxable to shareholders at long-term capital gains rates, regardless of how long shareholders have held their Shares. Distributions by the Fund of its net short-term capital gains will be taxable as ordinary income. Distributions may be subject to state and local taxes.

Qualified dividend income includes, in general and, subject to certain holding period and other requirements, dividend income from taxable domestic corporations and certain foreign corporations. Subject to certain limitations, eligible foreign corporations include those incorporated in possessions of the United States, those incorporated in certain countries with comprehensive tax treaties with the United States, and other foreign corporations if the stock with respect to which the dividends are paid is readily tradable on an established securities market in the United States. Dividends received by the Fund from an underlying fund taxable as a RIC may be treated as qualified dividend income generally only to the extent so reported by such underlying fund. If 95% or more of the Fund's gross income (calculated without taking into account net capital gain derived from sales or other dispositions of stock or securities) consists of qualified dividend income, the Fund may report all distributions of such income as qualified dividend income. Fund dividends will not be treated as qualified dividend income if the Fund does not meet holding period and other requirements with respect to dividend paying stocks in its portfolio, and the shareholder does not meet holding period and other requirements with respect to the Shares on which the dividends were paid. Certain of the Fund's investment strategies may limit its ability to make distributions eligible for the reduced rates applicable to qualified dividend income.

In the case of corporate shareholders, certain dividends received by the Fund from U.S. corporations (generally, dividends received by the Fund in respect of any share of stock (1) with a tax holding period of at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and appropriately so reported by the Fund may be eligible for the 50% dividends received deduction. Certain preferred stock must have a holding period of at least 91 days during the 181-day period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend to be eligible. Capital gain dividends distributed to the Fund from other RICs are not eligible for the dividends received deduction. To qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their Shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their Shares, and, if they borrow to acquire or otherwise incur debt attributable to Shares, they may be denied a portion of the dividends received deduction with respect to those Shares. Certain of the Fund's investment strategies may limit its ability to make distributions eligible for the dividends received deduction.

Although dividends generally will be treated as distributed when paid, any dividend declared by the Fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared.

U.S. individuals with adjusted gross income (subject to certain adjustments) exceeding certain threshold amounts ($250,000 if married filing jointly or if considered a "surviving spouse" for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases) are subject to a 3.8% tax on all or a portion of their "net investment income," which includes taxable interest, dividends, and certain capital gains (generally including capital gain distributions and capital gains realized on the sale of Shares). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts.

Shareholders who have not held Shares for a full year should be aware that the Fund may report and distribute, as ordinary dividends or capital gain dividends, a percentage of income that is not equal to the percentage of the Fund's ordinary income or net capital gain, respectively, actually earned during the applicable shareholder's period of investment in the Fund. A taxable shareholder may wish to avoid investing in the Fund shortly before a dividend or other distribution, because the distribution will generally be taxable even though it may economically represent a return of a portion of the shareholder's investment.

To the extent that the Fund makes a distribution of income received by the Fund in lieu of dividends (a "substitute payment") with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be eligible for the dividends received deduction for corporate shareholders.

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If the Fund's distributions exceed its earnings and profits, all or a portion of the distributions made for a taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable, but will reduce each shareholder's cost basis in the Fund and result in a higher capital gain or lower capital loss when the Shares on which the distribution was received are sold. After a shareholder's basis in the Shares has been reduced to zero, distributions in excess of earnings and profits will be treated as gain from the sale of the shareholder's Shares.

<u>Taxation of Shareholders – Sale or Exchange of Shares</u>. A sale or exchange of Shares may give rise to a gain or loss. For tax purposes, an exchange of your Fund Shares for shares of a different fund is the same as a sale. In general, provided that a shareholder holds Shares as capital assets, any gain or loss realized upon a taxable disposition of Shares will be treated as long-term capital gain or loss if Shares have been held for more than 12 months. Otherwise, the gain or loss on the taxable disposition of Shares will generally be treated as short-term capital gain or loss. Any loss realized upon a taxable disposition of Shares held for six months or less will be treated as long-term capital loss, rather than short-term capital loss, to the extent of any amounts treated as distributions to the shareholder of long-term capital gain (including any amounts credited to the shareholder as undistributed capital gains). All or a portion of any loss realized upon a taxable disposition of Shares may be disallowed if substantially identical Shares are acquired (through the reinvestment of dividends or otherwise) within a 61-day period beginning 30 days before and ending 30 days after the disposition. In such a case, the basis of the newly acquired Shares will be adjusted to reflect the disallowed loss.

The cost basis of Shares acquired by purchase will generally be based on the amount paid for Shares and then may be subsequently adjusted for other applicable transactions as required by the Code. The difference between the selling price and the cost basis of Shares generally determines the amount of the capital gain or loss realized on the sale or exchange of Shares. Contact the broker through whom you purchased your Shares to obtain information with respect to the available cost basis reporting methods and elections for your account.

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time and the sum of the exchanger's aggregate basis in the securities surrendered plus the amount of cash paid for such Creation Units. The ability of Authorized Participants to receive a full or partial cash redemption of Creation Units of the Fund may limit the tax efficiency of the Fund. An Authorized Participant who redeems Creation Units will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the sum of the aggregate market value of any securities received plus the amount of any cash received for such Creation Units. The Internal Revenue Service ("IRS"), however, may assert that a loss realized upon an exchange of securities for Creation Units cannot currently be deducted under the rules governing "wash sales" (for a person who does not mark-to-market its portfolio) or on the basis that there has been no significant change in economic position.

Any capital gain or loss realized upon the creation of Creation Units will generally be treated as long-term capital gain or loss if the securities exchanged for such Creation Units have been held for more than one year. Any capital gain or loss realized upon the redemption of Creation Units will generally be treated as long-term capital gain or loss if Shares comprising the Creation Units have been held for more than one year. Otherwise, such capital gains or losses will generally be treated as short-term capital gains or losses. Any loss upon a redemption of Creation Units held for six months or less may be treated as long-term capital loss to the extent of any amounts treated as distributions to the applicable Authorized Participant of long-term capital gain with respect to the Creation Units (including any amounts credited to the Authorized Participant as undistributed capital gains).

The Trust, on behalf of the Fund, has the right to reject an order for Creation Units if the purchaser (or a group of purchasers) would, upon obtaining the Creation Units so ordered, own 80% or more of the outstanding Shares and if, pursuant to Section 351 of the Code, the Fund would have a basis in the deposit securities different from the market value of such securities on the date of deposit. The Trust also has the right to require the provision of information necessary to determine beneficial Share ownership for purposes of the 80% determination. If the Fund does issue Creation Units to a purchaser (or a group of purchasers) that would, upon obtaining the Creation Units so ordered, own 80% or more of the outstanding Shares, the purchaser (or a group of purchasers) will generally not recognize gain or loss upon the exchange of securities for Creation Units.

Authorized Participants purchasing or redeeming Creation Units should consult their own tax advisers with respect to the tax treatment of any creation or redemption transaction and whether the wash sales rule applies and when a loss may be deductible.

<u>Taxation of Fund Investments</u>. Certain of the Fund's investments may be subject to complex provisions of the Code (including provisions relating to hedging transactions, straddles, integrated transactions, foreign currency contracts, forward foreign currency contracts, and notional principal contracts) that, among other things, may affect the Fund's ability to qualify as a RIC, may affect the character of gains and losses realized by the Fund (*e.g.*, may affect whether gains or losses are ordinary or capital), accelerate recognition of income to the Fund and defer losses. These rules could therefore affect the character, amount and timing of distributions to shareholders. These provisions also may require the Fund to mark to market certain types of positions in its portfolio (*i.e*., treat them as if they were closed out) which may cause the Fund to recognize income without the Fund receiving cash with which to make distributions in amounts sufficient to enable the Fund to satisfy the RIC distribution requirements for avoiding income and excise taxes. The Fund intends to monitor its transactions, intends to make appropriate tax elections, and intends to make appropriate entries in its books and records to mitigate the effect of these rules and preserve the Fund's qualification for treatment as a RIC. To the extent

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the Fund invests in an underlying fund that is taxable as a RIC, the rules applicable to the tax treatment of complex securities will also apply to the underlying funds that also invest in such complex securities and investments.

<u>Foreign Investments.</u> Dividends and interest received by the Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax treaties between certain countries and the U.S. may reduce or eliminate such taxes.

If more than 50% of the value of the Fund's assets at the close of any taxable year consists of stock or securities of foreign corporations, which for this purpose may include obligations of foreign governmental issuers, the Fund may elect, for U.S. federal income tax purposes, to treat any foreign income or withholding taxes paid by the Fund as paid by its shareholders. For any year that the Fund is eligible for and makes such an election, each shareholder of the Fund will be required to include in income an amount equal to his or her allocable share of qualified foreign income taxes paid by the Fund, and shareholders will be entitled, subject to certain holding period requirements and other limitations, to credit their portions of these amounts against their U.S. federal income tax due, if any, or to deduct their portions from their U.S. taxable income, if any. No deductions for foreign taxes paid by the Fund may be claimed, however, by non-corporate shareholders who do not itemize deductions. No deduction for such taxes will be permitted to individuals in computing their alternative minimum tax liability. Shareholders that are not subject to U.S. federal income tax, and those who invest in the Fund through tax-advantaged accounts (including those who invest through individual retirement accounts or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund. The Fund does not expect to satisfy the requirements for passing through to its shareholders any share of foreign taxes paid by the Fund, with the result that shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns. Foreign taxes paid by the Fund will reduce the return from the Fund's investments.

If the Fund holds shares in a "passive foreign investment company" ("PFIC"), it may be subject to U.S. federal income tax on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Fund to its shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains.

The Fund may be eligible to treat a PFIC as a "qualified electing fund" ("QEF") under the Code in which case, in lieu of the foregoing requirements, the Fund will be required to include in income each year a portion of the ordinary earnings and net capital gains of the qualified electing fund, even if not distributed to the Fund, and such amounts will be subject to the 90% and excise tax distribution requirements described above. To make this election, the Fund would be required to obtain certain annual information from the PFICs in which it invests, which may be difficult or impossible to obtain. Alternatively, the Fund may make a mark-to-market election that will result in the Fund being treated as if it had sold and repurchased its PFIC stock at the end of each year. In such case, the Fund would report any gains resulting from such deemed sales as ordinary income and would deduct any losses resulting from such deemed sales as ordinary losses to the extent of previously recognized gains. The election must be made separately for each PFIC owned by the Fund and, once made, is effective for all subsequent taxable years, unless revoked with the consent of the IRS. By making the election, the Fund could potentially ameliorate the adverse tax consequences with respect to its ownership of shares in a PFIC, but in any particular year may be required to recognize income in excess of the distributions it receives from PFICs and its proceeds from dispositions of PFIC stock. The Fund may have to distribute this excess income to satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax. To distribute this income and avoid a tax at the Fund level, the Fund might be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss. The Fund intends to make the appropriate tax elections, if possible, and take any additional steps that are necessary to mitigate the effect of these rules. Amounts included in income each year by the Fund arising from a QEF election, will be "qualifying income" under the Qualifying Income Requirement (as described above) even if not distributed to the Fund, if the Fund derives such income from its business of investing in stock, securities or currencies.

The Fund's transactions in foreign currencies and forward foreign currency contracts will generally be subject to special provisions of the Code that, among other things, may affect the character of gains and losses realized by the Fund (*i.e.*, may affect whether gains or losses are ordinary or capital), accelerate recognition of income to the Fund and defer losses. These rules could therefore affect the character, amount and timing of distributions to shareholders. These provisions also may require the Fund to mark-to-market certain types of positions in its portfolio (*i.e.*, treat them as if they were closed out) which may cause the Fund to recognize income without receiving cash with which to make distributions in amounts necessary to satisfy the Distribution Requirements and for avoiding the excise tax described above. The Fund intends to monitor their transactions, intend to make the appropriate tax elections, and intend to make the appropriate entries in their books and records when they acquire any foreign currency or forward foreign currency contract in order to mitigate the effect of these rules so as to prevent disqualification of the Fund as a RIC and minimize the imposition of income and excise taxes.

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<u>Backup Withholding</u>. The Fund will be required in certain cases to withhold (as "backup withholding") on amounts payable to any shareholder who (1) fails to provide a correct taxpayer identification number certified under penalty of perjury; (2) is subject to backup withholding by the IRS for failure to properly report all payments of interest or dividends; (3) fails to provide a certified statement that he or she is not subject to "backup withholding;" or (4) fails to provide a certified statement that he or she is a U.S. person (including a U.S. resident alien). The backup withholding rate is currently 24%. Backup withholding is not an additional tax and any amounts withheld may be credited against the shareholder's ultimate U.S. tax liability. Backup withholding will not be applied to payments that have been subject to the 30% withholding tax on shareholders who are neither citizens nor permanent residents of the United States.

<u>Non-U.S. Shareholders</u>. Any non-U.S. investors in the Fund may be subject to U.S. withholding and estate tax and are encouraged to consult their tax advisors prior to investing in the Fund. Foreign shareholders (*i.e.*, nonresident alien individuals and foreign corporations, partnerships, trusts and estates) are generally subject to U.S. withholding tax at the rate of 30% (or a lower tax treaty rate) on distributions derived from taxable ordinary income. The Fund may, under certain circumstances, report all or a portion of a dividend as an "interest-related dividend" or a "short-term capital gain dividend," which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Short-term capital gain dividends received by a nonresident alien individual who is present in the U.S. for a period or periods aggregating 183 days or more during the taxable year are not exempt from this 30% withholding tax. Gains realized by foreign shareholders from the sale or other disposition of Shares generally are not subject to U.S. taxation, unless the recipient is an individual who is physically present in the U.S. for 183 days or more per year. Foreign shareholders who fail to provide an applicable IRS form may be subject to backup withholding on certain payments from the Fund. Backup withholding will not be applied to payments that are subject to the 30% (or lower applicable treaty rate) withholding tax described in this paragraph. Different tax consequences may result if the foreign shareholder is engaged in a trade or business within the United States. In addition, the tax consequences to a foreign shareholder entitled to claim the benefits of a tax treaty may be different than those described above.

Unless certain non-U.S. entities that hold Shares comply with IRS requirements that will generally require them to report information regarding U.S. persons investing in, or holding accounts with, such entities, a 30% withholding tax may apply to Fund distributions payable to such entities. A non-U.S. shareholder may be exempt from the withholding described in this paragraph under an applicable intergovernmental agreement between the U.S. and a foreign government, provided that the shareholder and the applicable foreign government comply with the terms of the agreement.

Under legislation generally known as "FATCA" (the Foreign Account Tax Compliance Act), the Fund is required to withhold 30% of certain ordinary dividends it pays to shareholders that fail to meet prescribed information reporting or certification requirements. In general, no such withholding will be required with respect to a U.S. person or non-U.S. person that timely provides the certifications required by the Fund or its agent on a valid IRS Form W-9 or applicable series of IRS Form W-8, respectively. Shareholders potentially subject to withholding include foreign financial institutions ("FFIs"), such as non-U.S. investment funds, and non-financial foreign entities ("NFFEs"). To avoid withholding under FATCA, an FFI generally must enter into an information sharing agreement with the IRS in which it agrees to report certain identifying information (including name, address, and taxpayer identification number) with respect to its U.S. account holders (which, in the case of an entity shareholder, may include its direct and indirect U.S. owners), and an NFFE generally must identify and provide other required information to the Fund or other withholding agent regarding its U.S. owners, if any. Such non-U.S. shareholders also may fall into certain exempt, excepted or deemed compliant categories as established by regulations and other guidance. A non-U.S. shareholder resident or doing business in a country that has entered into an intergovernmental agreement with the United States to implement FATCA will be exempt from FATCA withholding provided that the shareholder and the applicable foreign government comply with the terms of the agreement. A non-U.S. entity that invests in the Fund will need to provide the Fund with documentation properly certifying the entity's status under FATCA in order to avoid FATCA withholding.

For foreign shareholders to qualify for an exemption from backup withholding, described above, the foreign shareholder must comply with special certification and filing requirements. Foreign shareholders in the Fund should consult their tax advisors in this regard.

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<u>Certain Potential Tax Reporting Requirements</u>. Under U.S. Treasury regulations, if a shareholder recognizes a loss on disposition of Shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC are not excepted. Significant penalties may be imposed for the failure to comply with the reporting requirements. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

<u>Other Issues</u>. In those states which have income tax laws, the tax treatment of the Fund and of Fund shareholders with respect to distributions by the Fund may differ from federal tax treatment.

**FINANCIAL STATEMENTS**

The Fund's Core Financial Statements, which will be filed as part of the Fund's Form N-CSR, will be available after the Fund has completed a fiscal year of operations. The Fund's Core Financial Statements, when available, are incorporated by reference into this SAI. When available, you may request a copy of the Fund's Core Financial Statements at no charge by calling 800-617-0004, or through the Fund's website at www.aamlive.com/ETF.

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**APPENDIX A**

**Proxy Voting Policies and Procedures**

Where AAM acts as Adviser to ESS, the duty to vote proxies for securities held in the Fund's portfolio is the responsibility of AAM as Adviser to the ESS funds or delegated to the Sub-Adviser. For those funds where AAM is responsible for proxy voting, AAM has retained the services of Broadridge to vote proxies for securities held in the Fund's portfolio. The voting for these funds will be in line with Glass Lewis recommendations.

The Trust shall file an annual report of each proxy voted with respect to portfolio securities held by the Fund during the 12-month period on Form N-PX. AAM's CCO (or designee) will review the voting record for accuracy before it is filed.

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**APPENDIX B**

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United States

![Image_0.jpg](ck0001540305-20250724_g2.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;

www.glasslewis.com

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![Image_1.jpg](ck0001540305-20250724_g3.jpg)

**Table of Contents**

[About](#iea245be9574c4fa4ae4e29d2a2aa05f4_13)[Glass](#iea245be9574c4fa4ae4e29d2a2aa05f4_13) [Lewis](#iea245be9574c4fa4ae4e29d2a2aa05f4_13)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_13)[6](#iea245be9574c4fa4ae4e29d2a2aa05f4_13)

[Guidelines](#iea245be9574c4fa4ae4e29d2a2aa05f4_16) [Introduction](#iea245be9574c4fa4ae4e29d2a2aa05f4_16)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_16)[7](#iea245be9574c4fa4ae4e29d2a2aa05f4_16)

[Summary](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)[Changes](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)[for](#iea245be9574c4fa4ae4e29d2a2aa05f4_19) [2025](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)[7](#iea245be9574c4fa4ae4e29d2a2aa05f4_19)

[Clarifying](#iea245be9574c4fa4ae4e29d2a2aa05f4_28) [Amendments](#iea245be9574c4fa4ae4e29d2a2aa05f4_28)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_28)[8](#iea245be9574c4fa4ae4e29d2a2aa05f4_28)

[A](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[Directors](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[that](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[Serves](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_40) [Interest](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)[9](#iea245be9574c4fa4ae4e29d2a2aa05f4_40)

[Election](#iea245be9574c4fa4ae4e29d2a2aa05f4_43)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_43) [Directors](#iea245be9574c4fa4ae4e29d2a2aa05f4_43)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_43)[9](#iea245be9574c4fa4ae4e29d2a2aa05f4_43)

[Independence](#iea245be9574c4fa4ae4e29d2a2aa05f4_46)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_46)[9](#iea245be9574c4fa4ae4e29d2a2aa05f4_46)

[Committee](#iea245be9574c4fa4ae4e29d2a2aa05f4_49) [Independence](#iea245be9574c4fa4ae4e29d2a2aa05f4_49)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_49)[12](#iea245be9574c4fa4ae4e29d2a2aa05f4_49)

[Independent](#iea245be9574c4fa4ae4e29d2a2aa05f4_52) [Chair](#iea245be9574c4fa4ae4e29d2a2aa05f4_52)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_52)[12](#iea245be9574c4fa4ae4e29d2a2aa05f4_52)

[Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_55)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_55)[14](#iea245be9574c4fa4ae4e29d2a2aa05f4_55)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_58) [Responsiveness](#iea245be9574c4fa4ae4e29d2a2aa05f4_58)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_58)[15](#iea245be9574c4fa4ae4e29d2a2aa05f4_58)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)[Responsiveness](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)[to](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)[Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_61) [Proposals](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)[16](#iea245be9574c4fa4ae4e29d2a2aa05f4_61)

[The](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)[Role of](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)[a](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)[Committee](#iea245be9574c4fa4ae4e29d2a2aa05f4_64) [Chair](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)[16](#iea245be9574c4fa4ae4e29d2a2aa05f4_64)

[Audit](#iea245be9574c4fa4ae4e29d2a2aa05f4_67)[Committees and](#iea245be9574c4fa4ae4e29d2a2aa05f4_67) [Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_67)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_67)[17](#iea245be9574c4fa4ae4e29d2a2aa05f4_67)

[Standards](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)[for](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)[Assessing](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)[the Audit](#iea245be9574c4fa4ae4e29d2a2aa05f4_70) [Committee](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)[17](#iea245be9574c4fa4ae4e29d2a2aa05f4_70)

[Material](#iea245be9574c4fa4ae4e29d2a2aa05f4_73) [Weaknesses](#iea245be9574c4fa4ae4e29d2a2aa05f4_73)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_73)[20](#iea245be9574c4fa4ae4e29d2a2aa05f4_73)

[Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_76)[Committee](#iea245be9574c4fa4ae4e29d2a2aa05f4_76) [Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_76)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_76)[21](#iea245be9574c4fa4ae4e29d2a2aa05f4_76)

[Nominating](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[Governance](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[Committee](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)[23](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)

[Board-Level](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)[Risk](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)[Management](#iea245be9574c4fa4ae4e29d2a2aa05f4_82) [Oversight](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)[26](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[Oversight](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[of Environmental](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[Social](#iea245be9574c4fa4ae4e29d2a2aa05f4_85) [Issues](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)[27](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)[Oversight](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)[Technology](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)[28](#iea245be9574c4fa4ae4e29d2a2aa05f4_88)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[Accountability for](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[Environmental](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[Social](#iea245be9574c4fa4ae4e29d2a2aa05f4_91) [Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)[30](#iea245be9574c4fa4ae4e29d2a2aa05f4_91)

[Director](#iea245be9574c4fa4ae4e29d2a2aa05f4_94) [Commitments](#iea245be9574c4fa4ae4e29d2a2aa05f4_94)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_94)[31](#iea245be9574c4fa4ae4e29d2a2aa05f4_94)

[Other](#iea245be9574c4fa4ae4e29d2a2aa05f4_97) [Considerations](#iea245be9574c4fa4ae4e29d2a2aa05f4_97)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_97)[32](#iea245be9574c4fa4ae4e29d2a2aa05f4_97)

[Controlled](#iea245be9574c4fa4ae4e29d2a2aa05f4_100) [Companies](#iea245be9574c4fa4ae4e29d2a2aa05f4_100)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_100)[33](#iea245be9574c4fa4ae4e29d2a2aa05f4_100)

[Significant](#iea245be9574c4fa4ae4e29d2a2aa05f4_103) [Shareholders](#iea245be9574c4fa4ae4e29d2a2aa05f4_103)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_103)[34](#iea245be9574c4fa4ae4e29d2a2aa05f4_103)

[Governance](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[Following](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[an IPO,](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[Spin-Off,](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[or](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[Direct](#iea245be9574c4fa4ae4e29d2a2aa05f4_106) [Listing](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)[34](#iea245be9574c4fa4ae4e29d2a2aa05f4_106)

[Governance](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[Following](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[a](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[Business](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[Combination](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[with](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[a](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[Special](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[Purpose Acquisition](#iea245be9574c4fa4ae4e29d2a2aa05f4_109) [Company](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)[36](#iea245be9574c4fa4ae4e29d2a2aa05f4_109)

[Dual-Listed](#iea245be9574c4fa4ae4e29d2a2aa05f4_112)[or](#iea245be9574c4fa4ae4e29d2a2aa05f4_112)[Foreign-Incorporated](#iea245be9574c4fa4ae4e29d2a2aa05f4_112) [Companies](#iea245be9574c4fa4ae4e29d2a2aa05f4_112)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_112)[36](#iea245be9574c4fa4ae4e29d2a2aa05f4_112)

[OTC-listed](#iea245be9574c4fa4ae4e29d2a2aa05f4_115) [Companies](#iea245be9574c4fa4ae4e29d2a2aa05f4_115)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_115)[37](#iea245be9574c4fa4ae4e29d2a2aa05f4_115)

------

![Image_1.jpg](ck0001540305-20250724_g3.jpg)

[Mutual](#iea245be9574c4fa4ae4e29d2a2aa05f4_118)[Fund](#iea245be9574c4fa4ae4e29d2a2aa05f4_118)[Boards](#iea245be9574c4fa4ae4e29d2a2aa05f4_118)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_118)[37](#iea245be9574c4fa4ae4e29d2a2aa05f4_118)

[Declassified](#iea245be9574c4fa4ae4e29d2a2aa05f4_121) [Boards](#iea245be9574c4fa4ae4e29d2a2aa05f4_121)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_121)[38](#iea245be9574c4fa4ae4e29d2a2aa05f4_121)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_124)[Composition](#iea245be9574c4fa4ae4e29d2a2aa05f4_124)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_124) [Refreshment](#iea245be9574c4fa4ae4e29d2a2aa05f4_124)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_124)[39](#iea245be9574c4fa4ae4e29d2a2aa05f4_124)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_127) [Diversity](#iea245be9574c4fa4ae4e29d2a2aa05f4_127)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_127)[40](#iea245be9574c4fa4ae4e29d2a2aa05f4_127)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_130)[Gender](#iea245be9574c4fa4ae4e29d2a2aa05f4_130) [Diversity](#iea245be9574c4fa4ae4e29d2a2aa05f4_130)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_130)[40](#iea245be9574c4fa4ae4e29d2a2aa05f4_130)

[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_133)[Underrepresented](#iea245be9574c4fa4ae4e29d2a2aa05f4_133)[Community](#iea245be9574c4fa4ae4e29d2a2aa05f4_133) [Diversity](#iea245be9574c4fa4ae4e29d2a2aa05f4_133)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_133)[41](#iea245be9574c4fa4ae4e29d2a2aa05f4_133)

[State](#iea245be9574c4fa4ae4e29d2a2aa05f4_136)[Laws on](#iea245be9574c4fa4ae4e29d2a2aa05f4_136)[Diversity](#iea245be9574c4fa4ae4e29d2a2aa05f4_136)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_136)[41](#iea245be9574c4fa4ae4e29d2a2aa05f4_136)

[Disclosure](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[Director](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[Diversity](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[Skills](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)[42](#iea245be9574c4fa4ae4e29d2a2aa05f4_139)

Stock Exchange Diversity Disclosure Requirements&nbsp;&nbsp;&nbsp;&nbsp;43

[Proxy](#iea245be9574c4fa4ae4e29d2a2aa05f4_142) [Access](#iea245be9574c4fa4ae4e29d2a2aa05f4_142)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_142)[42](#iea245be9574c4fa4ae4e29d2a2aa05f4_142)

[Majority](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)[for Election](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_145) [Directors](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)[43](#iea245be9574c4fa4ae4e29d2a2aa05f4_145)

[The](#iea245be9574c4fa4ae4e29d2a2aa05f4_148)[Plurality](#iea245be9574c4fa4ae4e29d2a2aa05f4_148)[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_148) [Standard](#iea245be9574c4fa4ae4e29d2a2aa05f4_148)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_148)[43](#iea245be9574c4fa4ae4e29d2a2aa05f4_148)

[Advantages](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[of a](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[Majority](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[Standard](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)[43](#iea245be9574c4fa4ae4e29d2a2aa05f4_151)

[Conflicting](#iea245be9574c4fa4ae4e29d2a2aa05f4_154)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_154)[Excluded](#iea245be9574c4fa4ae4e29d2a2aa05f4_154) [Proposals](#iea245be9574c4fa4ae4e29d2a2aa05f4_154)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_154)[44](#iea245be9574c4fa4ae4e29d2a2aa05f4_154)

[Transparency](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[Integrity](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[in](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[Financial](#iea245be9574c4fa4ae4e29d2a2aa05f4_157) [Reporting](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)[45](#iea245be9574c4fa4ae4e29d2a2aa05f4_157)

[Auditor](#iea245be9574c4fa4ae4e29d2a2aa05f4_160) [Ratification](#iea245be9574c4fa4ae4e29d2a2aa05f4_160)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_160)[46](#iea245be9574c4fa4ae4e29d2a2aa05f4_160)

[Voting](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[Recommendations](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[on](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[Auditor](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[Ratification](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)[47](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)

[Pension Accounting Issues](#iea245be9574c4fa4ae4e29d2a2aa05f4_166)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_166)[48](#iea245be9574c4fa4ae4e29d2a2aa05f4_166)

[The](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)[Link](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)[Between Compensation and](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)[Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)[49](#iea245be9574c4fa4ae4e29d2a2aa05f4_169)

[Advisory](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[on](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[Executive](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[(Say-on-](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[Pay)](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)[49](#iea245be9574c4fa4ae4e29d2a2aa05f4_172)

[Say-on-Pay](#iea245be9574c4fa4ae4e29d2a2aa05f4_175)[Voting](#iea245be9574c4fa4ae4e29d2a2aa05f4_175) [Recommendations](#iea245be9574c4fa4ae4e29d2a2aa05f4_175)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_175)[50](#iea245be9574c4fa4ae4e29d2a2aa05f4_175)

[Company](#iea245be9574c4fa4ae4e29d2a2aa05f4_178) [Responsiveness](#iea245be9574c4fa4ae4e29d2a2aa05f4_178)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_178)[52](#iea245be9574c4fa4ae4e29d2a2aa05f4_178)

[Pay](#iea245be9574c4fa4ae4e29d2a2aa05f4_181)[for](#iea245be9574c4fa4ae4e29d2a2aa05f4_181) [Performance](#iea245be9574c4fa4ae4e29d2a2aa05f4_181)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_181)[52](#iea245be9574c4fa4ae4e29d2a2aa05f4_181)

[Short-Term](#iea245be9574c4fa4ae4e29d2a2aa05f4_184) [Incentives](#iea245be9574c4fa4ae4e29d2a2aa05f4_184)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_184)[53](#iea245be9574c4fa4ae4e29d2a2aa05f4_184)

[Long-Term](#iea245be9574c4fa4ae4e29d2a2aa05f4_187) [Incentives](#iea245be9574c4fa4ae4e29d2a2aa05f4_187)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_187)[55](#iea245be9574c4fa4ae4e29d2a2aa05f4_187)

[Grants](#iea245be9574c4fa4ae4e29d2a2aa05f4_190)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_190)[Front-Loaded](#iea245be9574c4fa4ae4e29d2a2aa05f4_190) [Awards](#iea245be9574c4fa4ae4e29d2a2aa05f4_190)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_190)[56](#iea245be9574c4fa4ae4e29d2a2aa05f4_190)

[Linking](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[Executive](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[Pay](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[to](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[Environmental](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[Social](#iea245be9574c4fa4ae4e29d2a2aa05f4_193) [Criteria](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)[57](#iea245be9574c4fa4ae4e29d2a2aa05f4_193)

[One-Time](#iea245be9574c4fa4ae4e29d2a2aa05f4_196) [Awards](#iea245be9574c4fa4ae4e29d2a2aa05f4_196)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_196)[58](#iea245be9574c4fa4ae4e29d2a2aa05f4_196)

[Contractual](#iea245be9574c4fa4ae4e29d2a2aa05f4_199)[Payments](#iea245be9574c4fa4ae4e29d2a2aa05f4_199)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_199) [Arrangements](#iea245be9574c4fa4ae4e29d2a2aa05f4_199)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_199)[58](#iea245be9574c4fa4ae4e29d2a2aa05f4_199)

[Sign-on](#iea245be9574c4fa4ae4e29d2a2aa05f4_202) [Awards](#iea245be9574c4fa4ae4e29d2a2aa05f4_202) [and](#iea245be9574c4fa4ae4e29d2a2aa05f4_202) [Severance](#iea245be9574c4fa4ae4e29d2a2aa05f4_202) [Benefits](#iea245be9574c4fa4ae4e29d2a2aa05f4_202)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_202)[58](#iea245be9574c4fa4ae4e29d2a2aa05f4_202)

[Change in](#iea245be9574c4fa4ae4e29d2a2aa05f4_205)[Control](#iea245be9574c4fa4ae4e29d2a2aa05f4_205)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_205)[59](#iea245be9574c4fa4ae4e29d2a2aa05f4_205)

------

![Image_1.jpg](ck0001540305-20250724_g3.jpg)

[Excise](#iea245be9574c4fa4ae4e29d2a2aa05f4_208)[Tax Gross-](#iea245be9574c4fa4ae4e29d2a2aa05f4_208)[ups](#iea245be9574c4fa4ae4e29d2a2aa05f4_208)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_208)[59](#iea245be9574c4fa4ae4e29d2a2aa05f4_208)

[Amended](#iea245be9574c4fa4ae4e29d2a2aa05f4_211)[Employment](#iea245be9574c4fa4ae4e29d2a2aa05f4_211) [Agreements](#iea245be9574c4fa4ae4e29d2a2aa05f4_211)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_211)[60](#iea245be9574c4fa4ae4e29d2a2aa05f4_211)

[Recoupment](#iea245be9574c4fa4ae4e29d2a2aa05f4_214)[Provisions](#iea245be9574c4fa4ae4e29d2a2aa05f4_214) [(Clawbacks)](#iea245be9574c4fa4ae4e29d2a2aa05f4_214)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_214)[60](#iea245be9574c4fa4ae4e29d2a2aa05f4_214)

[Hedging](#iea245be9574c4fa4ae4e29d2a2aa05f4_217)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_217) [Stock](#iea245be9574c4fa4ae4e29d2a2aa05f4_217)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_217)[60](#iea245be9574c4fa4ae4e29d2a2aa05f4_217)

[Pledging](#iea245be9574c4fa4ae4e29d2a2aa05f4_220)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_220) [Stock](#iea245be9574c4fa4ae4e29d2a2aa05f4_220)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_220)[61](#iea245be9574c4fa4ae4e29d2a2aa05f4_220)

[Executive](#iea245be9574c4fa4ae4e29d2a2aa05f4_223)[Ownership](#iea245be9574c4fa4ae4e29d2a2aa05f4_223) [Guidelines](#iea245be9574c4fa4ae4e29d2a2aa05f4_223)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_223)[61](#iea245be9574c4fa4ae4e29d2a2aa05f4_223)

[Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_226)[Consultant](#iea245be9574c4fa4ae4e29d2a2aa05f4_226) [Independence](#iea245be9574c4fa4ae4e29d2a2aa05f4_226)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_226)[62](#iea245be9574c4fa4ae4e29d2a2aa05f4_226)

[CEO](#iea245be9574c4fa4ae4e29d2a2aa05f4_229)[Pay](#iea245be9574c4fa4ae4e29d2a2aa05f4_229) [Ratio](#iea245be9574c4fa4ae4e29d2a2aa05f4_229)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_229)[62](#iea245be9574c4fa4ae4e29d2a2aa05f4_229)

[Frequency](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)[Say-on-](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)[Pay](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)[62](#iea245be9574c4fa4ae4e29d2a2aa05f4_232)

[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)[on](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)[Golden](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)[Parachute](#iea245be9574c4fa4ae4e29d2a2aa05f4_235) [Arrangements](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)[63](#iea245be9574c4fa4ae4e29d2a2aa05f4_235)

[Equity-Based](#iea245be9574c4fa4ae4e29d2a2aa05f4_238)[Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_238) [Proposals](#iea245be9574c4fa4ae4e29d2a2aa05f4_238)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_238)[63](#iea245be9574c4fa4ae4e29d2a2aa05f4_238)

[Option](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)[Exchanges](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)[Repricing](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)[65](#iea245be9574c4fa4ae4e29d2a2aa05f4_241)

[Option](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)[Backdating, Spring-Loading](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)[and Bullet-](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)[Dodging](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)[65](#iea245be9574c4fa4ae4e29d2a2aa05f4_244)

[Director](#iea245be9574c4fa4ae4e29d2a2aa05f4_247)[Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_247) [Plans](#iea245be9574c4fa4ae4e29d2a2aa05f4_247)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_247)[67](#iea245be9574c4fa4ae4e29d2a2aa05f4_247)

[Employee](#iea245be9574c4fa4ae4e29d2a2aa05f4_250)[Stock Purchase](#iea245be9574c4fa4ae4e29d2a2aa05f4_250)[Plans](#iea245be9574c4fa4ae4e29d2a2aa05f4_250)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_250)[67](#iea245be9574c4fa4ae4e29d2a2aa05f4_250)

[Executive](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [Compensation](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [Tax](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [Deductibility](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [—](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [Amendment](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [to](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [IRC](#iea245be9574c4fa4ae4e29d2a2aa05f4_253) [162(M)](#iea245be9574c4fa4ae4e29d2a2aa05f4_253)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_253)[67](#iea245be9574c4fa4ae4e29d2a2aa05f4_253)

[Governance](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[Structure](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[the](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_256) [Franchise](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)[69](#iea245be9574c4fa4ae4e29d2a2aa05f4_256)

[Anti-Takeover](#iea245be9574c4fa4ae4e29d2a2aa05f4_259) [Measures](#iea245be9574c4fa4ae4e29d2a2aa05f4_259)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_259)[69](#iea245be9574c4fa4ae4e29d2a2aa05f4_259)

[Poison](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)[Pills](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)[(Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)[Rights](#iea245be9574c4fa4ae4e29d2a2aa05f4_262) [Plans)](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)[69](#iea245be9574c4fa4ae4e29d2a2aa05f4_262)

[NOL](#iea245be9574c4fa4ae4e29d2a2aa05f4_265)[Poison](#iea245be9574c4fa4ae4e29d2a2aa05f4_265) [Pills](#iea245be9574c4fa4ae4e29d2a2aa05f4_265)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_265)[69](#iea245be9574c4fa4ae4e29d2a2aa05f4_265)

[Fair](#iea245be9574c4fa4ae4e29d2a2aa05f4_268)[Price](#iea245be9574c4fa4ae4e29d2a2aa05f4_268) [Provisions](#iea245be9574c4fa4ae4e29d2a2aa05f4_268)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_268)[71](#iea245be9574c4fa4ae4e29d2a2aa05f4_268)

[Control](#iea245be9574c4fa4ae4e29d2a2aa05f4_271)[Share](#iea245be9574c4fa4ae4e29d2a2aa05f4_271) [Statutes](#iea245be9574c4fa4ae4e29d2a2aa05f4_271)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_271)[71](#iea245be9574c4fa4ae4e29d2a2aa05f4_271)

[Quorum](#iea245be9574c4fa4ae4e29d2a2aa05f4_274) [Requirements](#iea245be9574c4fa4ae4e29d2a2aa05f4_274)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_274)[72](#iea245be9574c4fa4ae4e29d2a2aa05f4_274)

[Director](#iea245be9574c4fa4ae4e29d2a2aa05f4_277)[and Officer](#iea245be9574c4fa4ae4e29d2a2aa05f4_277)[Indemnification](#iea245be9574c4fa4ae4e29d2a2aa05f4_277)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_277)[72](#iea245be9574c4fa4ae4e29d2a2aa05f4_277)

[Officer](#iea245be9574c4fa4ae4e29d2a2aa05f4_280) [Exculpation](#iea245be9574c4fa4ae4e29d2a2aa05f4_280)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_280)[72](#iea245be9574c4fa4ae4e29d2a2aa05f4_280)

[Reincorporation](#iea245be9574c4fa4ae4e29d2a2aa05f4_283)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_283)[73](#iea245be9574c4fa4ae4e29d2a2aa05f4_283)

[Exclusive](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)[Forum](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)[Fee-Shifting Bylaw](#iea245be9574c4fa4ae4e29d2a2aa05f4_286) [Provisions](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)[74](#iea245be9574c4fa4ae4e29d2a2aa05f4_286)

[Authorized](#iea245be9574c4fa4ae4e29d2a2aa05f4_289) [Shares](#iea245be9574c4fa4ae4e29d2a2aa05f4_289)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_289)[75](#iea245be9574c4fa4ae4e29d2a2aa05f4_289)

[Advance](#iea245be9574c4fa4ae4e29d2a2aa05f4_292)[Notice](#iea245be9574c4fa4ae4e29d2a2aa05f4_292)[Requirements](#iea245be9574c4fa4ae4e29d2a2aa05f4_292)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_292)[76](#iea245be9574c4fa4ae4e29d2a2aa05f4_292)

[Virtual](#iea245be9574c4fa4ae4e29d2a2aa05f4_295)[Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_295) [Meetings](#iea245be9574c4fa4ae4e29d2a2aa05f4_295)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_295)[76](#iea245be9574c4fa4ae4e29d2a2aa05f4_295)

------

![Image_1.jpg](ck0001540305-20250724_g3.jpg)

[Voting](#iea245be9574c4fa4ae4e29d2a2aa05f4_298) [Structure](#iea245be9574c4fa4ae4e29d2a2aa05f4_298)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_298)[77](#iea245be9574c4fa4ae4e29d2a2aa05f4_298)

[Multi-Class](#iea245be9574c4fa4ae4e29d2a2aa05f4_301)[Share](#iea245be9574c4fa4ae4e29d2a2aa05f4_301)[Structures](#iea245be9574c4fa4ae4e29d2a2aa05f4_301)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_301)[77](#iea245be9574c4fa4ae4e29d2a2aa05f4_301)

[Cumulative](#iea245be9574c4fa4ae4e29d2a2aa05f4_304) [Voting](#iea245be9574c4fa4ae4e29d2a2aa05f4_304)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_304)[78](#iea245be9574c4fa4ae4e29d2a2aa05f4_304)

[Supermajority](#iea245be9574c4fa4ae4e29d2a2aa05f4_307)[Vote](#iea245be9574c4fa4ae4e29d2a2aa05f4_307) [Requirements](#iea245be9574c4fa4ae4e29d2a2aa05f4_307)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_307)[79](#iea245be9574c4fa4ae4e29d2a2aa05f4_307)

[Transaction](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)[Other](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)[Business](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)[79](#iea245be9574c4fa4ae4e29d2a2aa05f4_310)

[Anti-Greenmail](#iea245be9574c4fa4ae4e29d2a2aa05f4_313) [Proposals](#iea245be9574c4fa4ae4e29d2a2aa05f4_313)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_313)[79](#iea245be9574c4fa4ae4e29d2a2aa05f4_313)

[Mutual](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[Funds:](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[Investment](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[Policies](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[Advisory](#iea245be9574c4fa4ae4e29d2a2aa05f4_316) [Agreements](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)[79](#iea245be9574c4fa4ae4e29d2a2aa05f4_316)

[Real](#iea245be9574c4fa4ae4e29d2a2aa05f4_319)[Estate Investment](#iea245be9574c4fa4ae4e29d2a2aa05f4_319)[Trusts](#iea245be9574c4fa4ae4e29d2a2aa05f4_319)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_319)[80](#iea245be9574c4fa4ae4e29d2a2aa05f4_319)

[Preferred](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[Stock](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[Issuances](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[at](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[REITs](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)[80](#iea245be9574c4fa4ae4e29d2a2aa05f4_322)

[Business](#iea245be9574c4fa4ae4e29d2a2aa05f4_325)[Development](#iea245be9574c4fa4ae4e29d2a2aa05f4_325) [Companies](#iea245be9574c4fa4ae4e29d2a2aa05f4_325)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_325)[80](#iea245be9574c4fa4ae4e29d2a2aa05f4_325)

[Authorization to Sell](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[Shares](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[at](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[a Price](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[Below](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[Net Asset](#iea245be9574c4fa4ae4e29d2a2aa05f4_328) [Value](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)[81](#iea245be9574c4fa4ae4e29d2a2aa05f4_328)

[Auditor](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)[Ratification](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)[and](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)[Below-NAV](#iea245be9574c4fa4ae4e29d2a2aa05f4_331) [Issuances](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)[81](#iea245be9574c4fa4ae4e29d2a2aa05f4_331)

[Special Purpose](#iea245be9574c4fa4ae4e29d2a2aa05f4_334) [Acquisition](#iea245be9574c4fa4ae4e29d2a2aa05f4_334) [Companies](#iea245be9574c4fa4ae4e29d2a2aa05f4_334)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_334)[82](#iea245be9574c4fa4ae4e29d2a2aa05f4_334)

[Extension](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)[Business](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)[Combination](#iea245be9574c4fa4ae4e29d2a2aa05f4_337) [Deadline](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)[82](#iea245be9574c4fa4ae4e29d2a2aa05f4_337)

[SPAC](#iea245be9574c4fa4ae4e29d2a2aa05f4_340)[Board](#iea245be9574c4fa4ae4e29d2a2aa05f4_340) [Independence](#iea245be9574c4fa4ae4e29d2a2aa05f4_340)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_340)[82](#iea245be9574c4fa4ae4e29d2a2aa05f4_340)

[Director](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[Commitments](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[of](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[SPAC](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[Executives](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)[82](#iea245be9574c4fa4ae4e29d2a2aa05f4_343)

[Shareholder](#iea245be9574c4fa4ae4e29d2a2aa05f4_346) [Proposals](#iea245be9574c4fa4ae4e29d2a2aa05f4_346)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_346)[83](#iea245be9574c4fa4ae4e29d2a2aa05f4_346)

[Overall](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[Approach](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[to](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[Environmental,](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[Social](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[&](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[Governance](#iea245be9574c4fa4ae4e29d2a2aa05f4_349) [Issues](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)[84](#iea245be9574c4fa4ae4e29d2a2aa05f4_349)

[Connect](#iea245be9574c4fa4ae4e29d2a2aa05f4_352)[with](#iea245be9574c4fa4ae4e29d2a2aa05f4_352)[Glass](#iea245be9574c4fa4ae4e29d2a2aa05f4_352) [Lewis](#iea245be9574c4fa4ae4e29d2a2aa05f4_352)[&nbsp;&nbsp;&nbsp;&nbsp;](#iea245be9574c4fa4ae4e29d2a2aa05f4_352)[86](#iea245be9574c4fa4ae4e29d2a2aa05f4_352)

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About Glass Lewis

Glass Lewis is the world's choice for governance solutions. We enable institutional investors and publicly

listed companies to make informed decisions based on research and data. We cover 30,000+ meetings each year, across approximately 100 global markets. Our team has been providing in-depth analysis of companies since 2003, relying solely on publicly available information to inform its policies, research, and voting recommendations.

Our customers include the majority of the world's largest pension plans, mutual funds, and asset

managers, collectively managing over $40 trillion in assets. We have teams located across the United States, Europe, and Asia-Pacific giving us global reach with a local perspective on the important governance issues.

Investors around the world depend on Glass Lewis' **<u>Viewpoint</u>** platform to manage their proxy voting, policy implementation, recordkeeping, and reporting. Our industry leading **<u>Proxy Paper</u>** product provides comprehensive environmental, social, and governance research and voting recommendations weeks ahead of voting deadlines. Public companies can also use our innovative **<u>Report Feedback Statement</u>** to deliver their opinion on our proxy research directly to the voting decision makers at every investor client in time for voting decisions to be made or changed.

The research team engages extensively with public companies, investors, regulators, and other industry stakeholders to gain relevant context into the realities surrounding companies, sectors, and the market in general. This enables us to provide the most comprehensive and pragmatic insights to our customers.

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Guidelines Introduction

Summary of Changes for 2025

Glass Lewis evaluates these guidelines on an ongoing basis and formally updates them on an annual basis. This year we've made noteworthy revisions in the following areas, which are summarized below but discussed in greater detail in the relevant section of this document:

*Update: 17 December 2024. We have removed our discussion on page 42 of stock exchange diversity disclosure requirements.*

Board Oversight of AI

We have included a new discussion on our approach to artificial intelligence (AI)-related risk oversight. In recent years, companies have rapidly begun to develop and adopt uses for artificial intelligence (AI) technologies throughout various aspects of their operations. Deployed and overseen effectively, AI technologies have the potential to make companies' operations and systems more efficient and productive. However, as the use of these technologies has grown, so have the potential risks associated with companies' development and use of AI. Given these potential risks, the benchmark policy takes the view that boards should be cognizant of, and take steps to mitigate exposure to, any material risks that could arise from their use or development of AI.

In the absence of material incidents related to a company's use or management of AI-related issues, our benchmark policy will generally not make voting recommendations on the basis of a company's oversight of, or disclosure concerning, AI-related issues. However, in instances where there is evidence that insufficient oversight and/or management of AI technologies has resulted in material harm to shareholders, Glass Lewis will review a company's overall governance practices and identify which directors or board-level committees have been charged with oversight of AI-related risks. We will also closely evaluate the board's response to, and management of, this issue as well as any associated disclosures and the benchmark policy may recommend

against appropriate directors should we find the board's oversight, response or disclosure concerning AI-related issues to be insufficient.

Change-In-Control Provisions

We have updated our discussion of change-in-control provisions in the section "The Link Between Compensation and Performance" to define our benchmark policy view that companies that allow for committee discretion over the treatment of unvested awards should commit to providing clear rationale for how such awards are treated in the event a change in control occurs.

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Clarifying Amendments

The following clarifications of our existing policies are included this year:

Board Responsiveness to Shareholder Proposals

We have revised our discussion of board responsiveness to shareholder proposal to reflect that when shareholder proposals receive significant shareholder support (generally more than 30% but less than majority of votes cast), the benchmark policy generally takes the view that boards should engage with shareholders on the issue and provide disclosure addressing shareholder concerns and outreach initiatives.

Reincorporation

We have revised our discussion on reincorporations to reflect that we review all proposals to reincorporate to a different state or country on a case-by-case basis. Our review includes the changes in corporate governance provisions, especially those relating to shareholder rights, material differences in corporate statutes and legal precedents, and relevant financial benefits, among other factors, resulting from the change in domicile.

Approach to Executive Pay Program

We have provided some clarifying statements to the discussion of in the section titled "The Link Between Compensation and Performance" to emphasize Glass Lewis' holistic approach to analyzing executive compensation programs. There are few program features that, on their own, lead to an unfavorable recommendation from Glass Lewis for a say-on-pay proposal. Our analysis reviews pay programs on a case-by- case basis. We do not utilize a pre-determined scorecard approach when considering individual features such as the allocation of the long-term incentive between performance-based awards and time-based awards.

Unfavorable factors in a pay program are reviewed in the context of rationale, overall structure, overall

disclosure quality, the program's ability to align executive pay with performance and the shareholder experience and the trajectory of the pay program resulting from changes introduced by the compensation committee.

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A Board of Directors that Serves Shareholder Interest

Election of Directors

The purpose of Glass Lewis' proxy research and advice is to facilitate shareholder voting in favor of governance structures that will drive performance, create shareholder value and maintain a proper tone at the top. Glass Lewis looks for talented boards with a record of protecting shareholders and delivering value over the medium- and long-term. We believe that a board can best protect and enhance the interests of shareholders if it is sufficiently independent, has a record of positive performance, and consists of individuals with diverse backgrounds and a breadth and depth of relevant experience.

Independence

The independence of directors, or lack thereof, is ultimately demonstrated through the decisions they make. In assessing the independence of directors, we will take into consideration, when appropriate, whether a director has a track record indicative of making objective decisions. Likewise, when assessing the independence of

directors we will also examine when a director's track record on multiple boards indicates a lack of objective decision-making. Ultimately, we believe the determination of whether a director is independent or not must take into consideration both compliance with the applicable independence listing requirements as well as judgments made by the director.

We look at each director nominee to examine the director's relationships with the company, the company's executives, and other directors. We do this to evaluate whether personal, familial, or financial relationships (not including director compensation) may impact the director's decisions. We believe that such relationships make it difficult for a director to put shareholders' interests above the director's or the related party's interests. We also believe that a director who owns more than 20% of a company can exert disproportionate influence on the

board, and therefore believe such a director's independence may be hampered, in particular when serving on

the audit committee.

Thus, we put directors into three categories based on an examination of the type of relationship they have with the company:

**Independent Director** — An independent director has no material financial, familial or other current relationships with the company, its executives, or other board members, except for board service and standard fees paid for that service. Relationships that existed within three to five years<sup>1</sup> before the

1 NASDAQ originally proposed a five-year look-back period but both it and the NYSE ultimately settled on a three-year look- back prior to finalizing their rules. A five-year standard for former employment relationships is more appropriate, in our view, because we believe that the unwinding of conflicting relationships between former management and board members is more likely to be complete and final after five years. However, Glass Lewis does not apply the five-year look-back period to directors who have previously served as executives of the company on an interim basis for less than one year.

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inquiry are usually considered "current" for purposes of this test. For material financial relationships with the company, we apply a three-year look back, and for former employment relationships with the company, we apply a five-year look back.

**Affiliated Director** — An affiliated director has, (or within the past three years, had) a material financial, familial or other relationship with the company or its executives, but is not an employee of the company.<sup>2</sup> This includes directors whose employers have a material financial relationship with the company.<sup>3</sup> In addition, we view a director who either owns or controls 20% or more of the company's voting stock, or is an employee or affiliate of an entity that controls such amount, as an affiliate.<sup>4</sup>

We view 20% shareholders as affiliates because they typically have access to and involvement with the management of a company that is fundamentally different from that of ordinary shareholders. More importantly, 20% holders may have interests that diverge from those of ordinary holders, for reasons such as the liquidity (or lack thereof) of their holdings, personal tax issues, etc.

Glass Lewis applies a three-year look back period to all directors who have an affiliation with the company other than former employment, for which we apply a five-year look back.

Definition of **"Material"**: A material relationship is one in which the dollar value exceeds:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• $50,000 (or where no amount is disclosed) for directors who are paid for a service they have agreed to perform for the company, outside of their service as a director, including professional or other services. This threshold also applies to directors who are the majority or principal owner of a firm that receives such payments; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• $120,000 (or where no amount is disclosed) for those directors employed by a professional services firm such as a law firm, investment bank, or consulting firm and the company pays the firm, not the individual, for services.<sup>5</sup> This dollar limit would also apply to charitable contributions to schools where a

2 If a company does not consider a non-employee director to be independent, Glass Lewis will classify that director as an affiliate.

3 We allow a five-year grace period for former executives of the company or merged companies who have consulting agreements with the surviving company. (We do not automatically recommend voting against directors in such cases for the first five years.) If the consulting agreement persists after

this five-year grace period, we apply the materiality thresholds outlined in the definition of "material."

4 This includes a director who serves on a board as a representative (as part of his or her basic responsibilities) of an investment firm with greater than 20% ownership. However, while we will generally consider him/her to be affiliated, we will not recommend voting against unless (i) the investment firm has disproportionate board representation or (ii) the director serves on the audit committee.

5 We may deem such a transaction to be immaterial where the amount represents less than 1% of the firm's annual revenues and the board provides a compelling rationale as to why the director's independence is not affected by the relationship.

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board member is a professor; or charities where a director serves on the board or is an executive;<sup>6</sup> and

any aircraft and real estate dealings between the company and the director's firm; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1% of either company's consolidated gross revenue for other business relationships (e.g., where the director is an executive officer of a company that provides services or products to or receives services or products from the company).<sup>7</sup>

Definition of **"Familial"** — Familial relationships include a person's spouse, parents, children, siblings, grandparents, uncles, aunts, cousins, nieces, nephews, in-laws, and anyone (other than domestic employees) who shares such person's home. A director is an affiliate if: i) he or she has a family member who is employed by the company and receives more than $120,000<sup>8</sup> in annual compensation; or, ii) he or she has a family member who is employed by the company and the company does not disclose this individual's compensation.

Definition of **"Company"** — A company includes any parent or subsidiary in a group with the company or any entity that merged with, was acquired by, or acquired the company.

**Inside Director** — An inside director simultaneously serves as a director and as an employee of the company. This category may include a board chair who acts as an employee of the company or is paid as an employee of the company. In our view, an inside director who derives a greater amount of income as a result of affiliated transactions with the company rather than through compensation paid by the company (i.e., salary, bonus, etc. as a company employee) faces a conflict between making decisions that are in the best interests of the company versus those in the director's own best interests.

Therefore, we will recommend voting against such a director.

Additionally, we believe a director who is currently serving in an interim management position should be considered an insider, while a director who previously served in an interim management position for less than one year and is no longer serving in such capacity is considered independent. Moreover, a director who previously served in an interim management position for over one year and is no longer serving in such capacity is considered an affiliate for five years following the date of the director's resignation or departure from the interim management position.

Voting Recommendations on the Basis of Board Independence

Glass Lewis believes a board will be most effective in protecting shareholders' interests if it is at least two-thirds independent. We note that each of the Business Roundtable, the Conference Board, and the Council of Institutional Investors advocates that two-thirds of the board be independent. Where more than one-third of

6 We will generally take into consideration the size and nature of such charitable entities in relation to the company's size and industry along with any other relevant factors such as the director's role at the charity. However, unlike for other types of related party transactions, Glass Lewis generally does not apply a look-back period to affiliated relationships involving charitable contributions; if the relationship between the director and the school or charity ceases, or if the company discontinues its donations to the entity, we will consider the director to be independent.

7 This includes cases where a director is employed by, or closely affiliated with, a private equity firm that profits from an acquisition made by the company. Unless disclosure suggests otherwise, we presume the director is affiliated.

8 Pursuant to SEC rule Item 404 of Regulation S-K under the Securities Exchange Act, compensation exceeding $120,000 is the minimum threshold deemed material for disclosure of transactions involving family members of directors.

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the members are affiliated or inside directors, we typically<sup>8</sup> recommend voting against some of the inside and/or affiliated directors in order to satisfy the two-thirds threshold.

In the case of a less than two-thirds independent board, Glass Lewis strongly supports the existence of a presiding or lead director with authority to set the meeting agendas and to lead sessions outside the insider chair's presence.

In addition, we scrutinize avowedly "independent" chairs and lead directors. We believe that they should be

unquestionably independent, or the company should not tout them as such.

Committee Independence

We believe that only independent directors should serve on a company's audit, compensation, nominating, and governance committees[.](#iea245be9574c4fa4ae4e29d2a2aa05f4_52)<sup>9</sup> We typically recommend that shareholders vote against any affiliated or inside director seeking appointment to an audit, compensation, nominating, or governance committee, or who has served in that capacity in the past year.

Pursuant to Section 952 of the Dodd-Frank Act, as of January 11, 2013, the U.S. Securities and Exchange Commission (SEC) approved new listing requirements for both the NYSE and NASDAQ which require that boards apply enhanced standards of independence when making an affirmative determination of the independence of compensation committee members. Specifically, when making this determination, in addition to the factors considered when assessing general director independence, the board's considerations must include: (i) the source of compensation of the director, including any consulting, advisory or other compensatory fee paid by

the listed company to the director (the "Fees Factor"); and (ii) whether the director is affiliated with the listing

company, its subsidiaries, or affiliates of its subsidiaries (the "Affiliation Factor").

Glass Lewis believes it is important for boards to consider these enhanced independence factors when assessing compensation committee members. However, as discussed above in the section titled Independence, we apply our own standards when assessing the independence of directors, and these standards also take into account consulting and advisory fees paid to the director, as well as the director's affiliations with the company and its subsidiaries and affiliates. We may recommend voting against compensation committee members who are not independent based on our standards.

Independent Chair

Glass Lewis believes that separating the roles of CEO (or, more rarely, another executive position) and chair creates a better governance structure than a combined CEO/chair position. An executive manages the business

8 With a staggered board, if the affiliates or insiders that we believe should not be on the board are not up for election, we will express our concern regarding those directors, but we will not recommend voting against the other affiliates or insiders who are up for election just to achieve two-thirds independence. However, we will consider recommending voting against the directors subject to our concern at their next election if the issue giving rise to the concern is not resolved.

9 We will recommend voting against an audit committee member who owns 20% or more of the company's stock, and we believe that there should be a maximum of one director (or no directors if the committee is composed of less than three directors) who owns 20% or more of the company's stock on the compensation, nominating, and governance committees.

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according to a course the board charts. Executives should report to the board regarding their performance in achieving goals set by the board. This is needlessly complicated when a CEO chairs the board, since a CEO/chair presumably will have a significant influence over the board.

While many companies have an independent lead or presiding director who performs many of the same functions of an independent chair (e.g., setting the board meeting agenda), we do not believe this alternate form of independent board leadership provides as robust protection for shareholders as an independent chair.

It can become difficult for a board to fulfill its role of overseer and policy setter when a CEO/chair controls the agenda and the boardroom discussion. Such control can allow a CEO to have an entrenched position, leading to longer-than-optimal terms, fewer checks on management, less scrutiny of the business operation, and limitations on independent, shareholder-focused goal-setting by the board.

A CEO should set the strategic course for the company, with the board's approval, and the board should enable the CEO to carry out the CEO's vision for accomplishing the board's objectives. Failure to achieve the board's objectives should lead the board to replace that CEO with someone in whom the board has confidence.

Likewise, an independent chair can better oversee executives and set a pro-shareholder agenda without the management conflicts that a CEO and other executive insiders often face. Such oversight and concern for shareholders allows for a more proactive and effective board of directors that is better able to look out for the interests of shareholders.

Further, it is the board's responsibility to select a chief executive who can best serve a company and its shareholders and to replace this person when his or her duties have not been appropriately fulfilled. Such a replacement becomes more difficult and happens less frequently when the chief executive is also in the position of overseeing the board.

Glass Lewis believes that the installation of an independent chair is almost always a positive step from a corporate governance perspective and promotes the best interests of shareholders. Further, the presence of an independent chair fosters the creation of a thoughtful and dynamic board, not dominated by the views of senior management. Encouragingly, many companies appear to be moving in this direction — one study indicates that only 10 percent of incoming CEOs in 2014 were awarded the chair title, versus 48 percent in 2002.<sup>10</sup> Another study finds that 53 percent of S&P 500 boards now separate the CEO and chair roles, up from 37 percent in 2009, although the same study found that only 34 percent of S&P 500 boards have truly independent chairs.<sup>11</sup>

We do not recommend that shareholders vote against CEOs who chair the board. However, we typically recommend that our clients support separating the roles of chair and CEO whenever that question is posed in a proxy (typically in the form of a shareholder proposal), as we believe that it is in the long-term best interests of the company and its shareholders.

Further, where the company has neither an independent chair nor independent lead director, we will recommend voting against the chair of the governance committee.

10 Ken Favaro, Per-Ola Karlsson and Gary L. Nelson. "The $112 Billion CEO Succession Problem." (*Strategy+Business*, Issue 79, Summer 2015).

11 Spencer Stuart Board Index, 2019, p. 6.

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Performance

The most crucial test of a board's commitment to the company and its shareholders lies in the actions of the board and its members. We look at the performance of these individuals as directors and executives of the company and of other companies where they have served.

We find that a director's past conduct is often indicative of future conduct and performance. We often find directors with a history of overpaying executives or of serving on boards where avoidable disasters have occurred serving on the boards of companies with similar problems. Glass Lewis has a proprietary database of directors serving at over 8,000 of the most widely held U.S. companies. We use this database to track the performance of directors across companies.

Voting Recommendations on the Basis of Performance

We typically recommend that shareholders vote against directors who have served on boards or as executives of companies with records of poor performance, inadequate risk oversight, excessive compensation, audit- or accounting-related issues, and/or other indicators of mismanagement or actions against the interests of shareholders. We will reevaluate such directors based on, among other factors, the length of time passed since the incident giving rise to the concern, shareholder support for the director, the severity of the issue, the

director's role (e.g., committee membership), director tenure at the subject company, whether ethical lapses

accompanied the oversight lapse, and evidence of strong oversight at other companies.

Likewise, we examine the backgrounds of those who serve on key board committees to ensure that they have the required skills and diverse backgrounds to make informed judgments about the subject matter for which the committee is responsible.

We believe shareholders should avoid electing directors who have a record of not fulfilling their responsibilities to shareholders at any company where they have held a board or executive position. We typically recommend voting against:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director who fails to attend a minimum of 75% of board and applicable committee meetings, calculated in the aggregate.<sup>12</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director who belatedly filed a significant form(s) 4 or 5, or who has a pattern of late filings if the late

filing was the director's fault (we look at these late filing situations on a case-by-case basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director who is also the CEO of a company where a serious and material restatement has occurred after the CEO had previously certified the pre-restatement financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director who has received two against recommendations from Glass Lewis for identical reasons within the prior year at different companies (the same situation must also apply at the company being analyzed).

Furthermore, with consideration given to the company's overall corporate governance, pay-for-performance alignment and board responsiveness to shareholders, we may recommend voting against directors who served

12 However, where a director has served for less than one full year, we will typically not recommend voting against for failure to attend 75% of meetings. Rather, we will note the poor attendance with a recommendation to track this issue going forward. We will also refrain from recommending to vote against directors when the proxy discloses that the director missed the meetings due to serious illness or other extenuating circumstances.

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throughout a period in which the company performed significantly worse than peers and the directors have not taken reasonable steps to address the poor performance.

Board Responsiveness

Glass Lewis believes that boards should be responsive to shareholders when a significant percentage of shareholders vote contrary to the recommendation of management, depending on the issue.

When 20% of more of shareholders vote contrary to management (which occurs when more than 20% of votes on the proposal are cast as AGAINST and/or ABSTAIN), we believe that boards should engage with shareholders on the issue and demonstrate some initial level of responsiveness. These include instances when 20% or more of shareholders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)withhold votes from (or vote against) a director nominee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)vote against a management-sponsored proposal.

In our view, a 20% threshold is significant enough to warrant a close examination of the underlying issues and an evaluation of whether the board responded appropriately following the vote, particularly in the case of a compensation or director election proposal. While the 20% threshold alone will not automatically generate a negative vote recommendation from Glass Lewis on a future proposal (e.g., to recommend against a director nominee, against a say-on-pay proposal, etc.), it may be a contributing factor to our recommendation to vote

against management's recommendation in the event we determine that the board did not respond

appropriately.

When a majority of shareholders vote contrary to management, we believe that boards should engage with shareholders on the issue and provide a more robust response to fully address shareholder concerns. These include instances when a majority or more of shareholders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)withhold votes from (or vote against) a director nominee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)vote against a management-sponsored proposal;

At controlled companies and companies that have multi-class share structures with unequal voting rights, we will carefully examine the level of approval or disapproval attributed to unaffiliated shareholders when determining whether board responsiveness is warranted. In the case of companies that have multi-class share structures with unequal voting rights, we will generally examine the level of approval or disapproval attributed to unaffiliated shareholders on a "one share, one vote" basis. At controlled and multi-class companies, when at least 20% or more of unaffiliated shareholders vote contrary to management, we believe that boards should engage with shareholders and demonstrate some initial level of responsiveness, and when a majority or more of unaffiliated shareholders vote contrary to management, we believe that boards should engage with shareholders and provide a more robust response to address shareholder concerns.

As a general framework, our evaluation of board responsiveness involves a review of publicly available disclosures (e.g., the proxy statement, annual report, 8-Ks, company website, etc.) released following the date of the company's last annual meeting up through the publication date of our most current Proxy Paper. Depending on the specific issue, our focus typically includes, but is not limited to, the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• At the board level, any changes in directorships, committee memberships, disclosure of related party transactions, meeting attendance, or other responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any revisions made to the company's articles of incorporation, bylaws or other governance documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any press or news releases indicating changes in, or the adoption of, new company policies, business practices or special reports; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any modifications made to the design and structure of the company's compensation program, as well as an assessment of the company's engagement with shareholders on compensation issues as discussed in the Compensation Discussion & Analysis (CD&A), particularly following a material vote against a company's say-on-pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proxy statement disclosure discussing the board's efforts to engage with shareholders and the actions

taken to address shareholder concerns.

Our Proxy Paper analysis will include a case-by-case assessment of the specific elements of board responsiveness that we examined along with an explanation of how that assessment impacts our current voting recommendations.

Board Responsiveness to Shareholder Proposals

Majority-Supported Shareholder Proposals

We expect clear action from the board when shareholder proposals receive support from a majority of votes cast (excluding abstentions and broker non-votes). In our view, this may include fully implementing the request of the shareholder proposal and/or engaging with shareholders on the issue and providing sufficient disclosures to address shareholder concerns.

Significantly Supported Shareholder Proposals

When shareholder proposals receive significant support (generally more than 30% but less than majority of votes cast), we believe an initial level of board responsiveness is warranted. In instances where a shareholder proposal has received at least 30% shareholder support, we generally believe boards should engage with shareholders on the issue and provide disclosure addressing shareholder concerns and outreach initiatives.

Further, as discussed above, at controlled companies and companies that have multi-class share structures with unequal voting rights, we will carefully examine the level of approval or disapproval attributed to unaffiliated shareholders when determining whether board responsiveness is warranted.

The Role of a Committee Chair

Glass Lewis believes that a designated committee chair maintains primary responsibility for the actions of his or her respective committee. As such, many of our committee-specific voting recommendations are against the applicable committee chair rather than the entire committee (depending on the seriousness of the issue). In cases where the committee chair is not up for election due to a staggered board, and where we have identified multiple concerns, we will generally recommend voting against other members of the committee who are up for election, on a case-by-case basis.

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In cases where we would ordinarily recommend voting against a committee chair but the chair is not specified, we apply the following general rules, which apply throughout our guidelines:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If there is no committee chair, we recommend voting against the longest-serving committee member or, if the longest-serving committee member cannot be determined, the longest-serving board member

serving on the committee (i.e., in either case, the "senior director"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If there is no committee chair, but multiple senior directors serving on the committee, we recommend voting against both (or all) such senior directors.

In our view, companies should provide clear disclosure of which director is charged with overseeing each committee. In cases where that simple framework is ignored and a reasonable analysis cannot determine which committee member is the designated leader, we believe shareholder action against the longest serving committee member(s) is warranted. Again, this only applies if we would ordinarily recommend voting against the committee chair but there is either no such position or no designated director in such role.

Audit Committees and Performance

Audit committees play an integral role in overseeing the financial reporting process because stable capital markets depend on reliable, transparent, and objective financial information to support an efficient and effective capital market process. Audit committees play a vital role in providing this disclosure to shareholders.

When assessing an audit committee's performance, we are aware that an audit committee does not prepare financial statements, is not responsible for making the key judgments and assumptions that affect the financial statements, and does not audit the numbers or the disclosures provided to investors. Rather, an audit committee member monitors and oversees the process and procedures that management and auditors perform. The 1999 Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees stated it best:

*A proper and well-functioning system exists, therefore, when the three main groups responsible for financial reporting — the full board including the audit committee, financial management including the internal auditors, and the outside auditors — form a 'three legged stool' that supports responsible financial disclosure and active participatory oversight. However, in the view of the Committee, the audit committee must be 'first among equals' in this process, since the audit committee is an extension of the full board and hence the ultimate monitor of the process.*

Standards for Assessing the Audit Committee

For an audit committee to function effectively on investors' behalf, it must include members with sufficient knowledge to diligently carry out their responsibilities. In its audit and accounting recommendations, the Conference Board Commission on Public Trust and Private Enterprise said "members of the audit committee must be independent and have both knowledge and experience in auditing financial matters."<sup>13</sup>

13 Commission on Public Trust and Private Enterprise. The Conference Board. 2003.

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We are skeptical of audit committees where there are members that lack expertise as a Certified Public Accountant (CPA), Chief Financial Officer (CFO) or corporate controller, or similar experience. While we will not necessarily recommend voting against members of an audit committee when such expertise is lacking, we are more likely to recommend voting against committee members when a problem such as a restatement occurs and such expertise is lacking.

Glass Lewis generally assesses audit committees against the decisions they make with respect to their oversight and monitoring role. The quality and integrity of the financial statements and earnings reports, the completeness of disclosures necessary for investors to make informed decisions, and the effectiveness of the internal controls should provide reasonable assurance that the financial statements are materially free from errors. The independence of the external auditors and the results of their work all provide useful information by which to assess the audit committee.

When assessing the decisions and actions of the audit committee, we typically defer to its judgment and generally recommend voting in favor of its members. However, we will consider recommending that shareholders vote against the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the audit committee when options were backdated, there is a lack of adequate controls in place, there was a resulting restatement, and disclosures indicate there was a lack of documentation with respect to the option grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair, if the audit committee does not have a financial expert or the committee's financial expert does not have a demonstrable financial background sufficient to understand the financial issues unique to public companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair, if the audit committee did not meet at least four times during the year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair, if the committee has less than three members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any audit committee member who sits on more than three public company audit committees, unless the audit committee member is a retired CPA, CFO, controller or has similar experience, in which case the limit shall be four committees, taking time and availability into consideration including a review of the audit committee member's attendance at all board and committee meetings.<sup>14</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee who are up for election and who served on the committee at the time of the audit, if audit and audit-related fees total one-third or less of the total fees billed by the auditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair when tax and/or other fees are greater than audit and audit-related fees paid to the auditor for more than one year in a row (in which case we also recommend against ratification of the auditor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair when fees paid to the auditor are not disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee where non-audit fees include fees for tax services (including, but not limited to, such things as tax avoidance or shelter schemes) for senior executives of the company. Such services are prohibited by the Public Company Accounting Oversight Board (PCAOB).

14 Glass Lewis may exempt certain audit committee members from the above threshold if, upon further analysis of relevant factors such as the director's experience, the size, industry-mix and location of the companies involved and the director's attendance at all the companies, we can reasonably determine that the audit committee member is likely not hindered by multiple audit committee commitments.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee that reappointed an auditor that we no longer consider to be independent for reasons unrelated to fee proportions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee when audit fees are excessively low, especially when compared with other companies in the same industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The audit committee chair if the committee failed to put auditor ratification on the ballot for shareholder approval. However, if the non-audit fees or tax fees exceed audit plus audit-related fees in either the current or the prior year, then Glass Lewis will recommend voting against the entire audit committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee where the auditor has resigned and reported that a section 10A<sup>15</sup>

letter has been issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee at a time when material accounting fraud occurred at the company.<sup>16</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee at a time when annual and/or multiple quarterly financial statements had to be restated, and any of the following factors apply:<sup>17</sup>

oThe restatement involves fraud or manipulation by insiders;

oThe restatement is accompanied by an SEC inquiry or investigation;

oThe restatement involves revenue recognition;

oThe restatement results in a greater than 5% adjustment to costs of goods sold, operating expense, or operating cash flows; or

oThe restatement results in a greater than 5% adjustment to net income, 10% adjustment to assets or shareholders equity, or cash flows from financing or investing activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee if the company repeatedly fails to file its financial reports in a timely fashion. For example, the company has filed two or more quarterly or annual financial statements late within the last five quarters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee when it has been disclosed that a law enforcement agency has charged the company and/or its employees with a violation of the Foreign Corrupt Practices Act (FCPA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of an audit committee when the company has aggressive accounting policies and/or poor disclosure or lack of sufficient transparency in its financial statements.

15 Auditors are required to report all potential illegal acts to management and the audit committee unless they are clearly inconsequential in nature. If the audit committee or the board fails to take appropriate action on an act that has been determined to be a violation of the law, the independent auditor is required to send a section 10A letter to the SEC. Such letters are rare and therefore we believe should be taken seriously.

16 Research indicates that revenue fraud now accounts for over 60% of SEC fraud cases, and that companies that engage in fraud experience significant negative abnormal stock price declines—facing bankruptcy, delisting, and material asset sales at much higher rates than do non-fraud firms (Committee of Sponsoring Organizations of the Treadway Commission.

"Fraudulent Financial Reporting: 1998-2007." May 2010).

17 The SEC issued guidance in March 2021 related to classification of warrants as liabilities at special purpose acquisition companies (SPACs). We will generally refrain from recommending against audit committee members when the restatement in question is solely as a result of the aforementioned SEC guidance.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the audit committee when there is a disagreement with the auditor and the auditor resigns or is dismissed (e.g., the company receives an adverse opinion on its financial statements from the auditor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the audit committee if the contract with the auditor specifically limits the auditor's

liability to the company for damages.<sup>18</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the audit committee who served since the date of the company's last annual meeting if, since the last annual meeting, the company has reported a material weakness that has not yet been corrected and the company has not disclosed a remediation plan; or when a material weakness has been ongoing for more than one year and the company has not disclosed an updated remediation plan that clearly outlines the company's progress toward remediating the material weakness.

Material Weaknesses

Effective internal controls over financial reporting should ensure the integrity of companies' accounting and

financial reporting.

The SEC guidance regarding Management's Report on Internal Control Over Financial Reporting requires that reports on internal control should include: (i) a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; (ii) management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; (iii) a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and (iv) a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.

A material weakness occurs when a company identifies a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. Failure to maintain effective internal controls can create doubts regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP and may lead to companies publishing financial statements that are not free of errors or misstatements.

We believe it is the responsibility of audit committees to ensure that material weaknesses are remediated in a timely manner and that companies disclose remediation plans that include detailed steps to resolve a given material weakness. In cases where a material weakness has been ongoing for more than one fiscal year, we expect the company to disclose an updated remediation plan at least annually thereafter. Updates to existing remediation plans should state the progress the company has made toward remediating the material weakness and the remaining actions the company plans to take until the material weakness is fully remediated. As such, we are critical of audit committees when companies disclose remediation plans that remain unchanged from a prior period.

18 The Council of Institutional Investors. "Corporate Governance Policies," p. 4, April 5, 2006; and "Letter from Council of Institutional Investors to the AICPA," November 8, 2006.

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When a material weakness is reported and the company has not disclosed a remediation plan, or when a material weakness has been ongoing for more than one year and the company has not disclosed an updated remediation plan that clearly outlines the company's progress toward remediating the material weakness, we will consider recommending that shareholders vote against all members of a company's audit committee who served on the committee during the time when the material weakness was identified.

We also take a dim view of audit committee reports that are boilerplate, and which provide little or no information or transparency to investors. When a problem such as a material weakness, restatement or late filings occurs, in forming our judgment with respect to the audit committee we take into consideration the transparency of the audit committee report.

Compensation Committee Performance

Compensation committees have a critical role in determining the compensation of executives. This includes deciding the basis on which compensation is determined, as well as the amounts and types of compensation to be paid. This process begins with the hiring and initial establishment of employment agreements, including the terms for such items as pay, pensions and severance arrangements. It is important in establishing compensation arrangements that compensation be consistent with, and based on the long-term economic

performance of, the business's long-term shareholders returns.

Compensation committees are also responsible for the oversight of the transparency of compensation. This oversight includes disclosure of compensation arrangements, the matrix used in assessing pay for performance, and the use of compensation consultants. In order to ensure the independence of the board's compensation consultant, we believe the compensation committee should only engage a compensation consultant that is not also providing any services to the company or management apart from their contract with the compensation committee. It is important to investors that they have clear and complete disclosure of all the significant terms of compensation arrangements in order to make informed decisions with respect to the oversight and decisions of the compensation committee.

Finally, compensation committees are responsible for oversight of internal controls over the executive compensation process. This includes controls over gathering information used to determine compensation, establishment of equity award plans, and granting of equity awards. For example, the use of a compensation consultant who maintains a business relationship with company management may cause the committee to

make decisions based on information that is compromised by the consultant's conflict of interests. Lax controls can also contribute to improper awards of compensation such as through granting of backdated or spring- loaded options, or granting of bonuses when triggers for bonus payments have not been met.

Central to understanding the actions of compensation committee is a careful review of the CD&A report included in each company's proxy. We review the CD&A in our evaluation of the overall compensation practices of a company, as overseen by the compensation committee. The CD&A is also integral to the evaluation of compensation proposals at companies, such as advisory votes on executive compensation, which allow shareholders to vote on the compensation paid to a company's top executives.

When assessing the performance of compensation committees, we will consider recommending that shareholders vote against the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of a compensation committee during whose tenure the committee failed to address shareholder concerns following majority shareholder rejection of the say-on-pay proposal in the previous year. Where the proposal was approved but there was a significant shareholder vote (i.e., greater than 20% of votes cast) against the say-on-pay proposal in the prior year, if the board did not respond sufficiently to the vote including actively engaging shareholders on this issue, we will also consider recommending voting against the chair of the compensation committee or all members of the compensation committee, depending on the severity and history of the compensation problems and the level of shareholder opposition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee who are up for election and served when the company failed to align pay with performance if shareholders are not provided with an advisory vote on executive compensation at the annual meeting.<sup>19</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any member of the compensation committee who has served on the compensation committee of at least two other public companies that have consistently failed to align pay with performance and whose oversight of compensation at the company in question is suspect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee (during the relevant time period) if the company entered into excessive employment agreements and/or severance agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when performance goals were changed (i.e., lowered) when employees failed or were unlikely to meet original goals, or performance-based compensation was paid despite goals not being attained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee if excessive employee perquisites and benefits were allowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The compensation committee chair if the compensation committee did not meet during the year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when the company repriced options or completed a "self tender offer" without shareholder approval within the past two years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when vesting of in-the-money options is accelerated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when option exercise prices were backdated. Glass Lewis will recommend voting against an executive director who played a role in and participated in

option backdating.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when option exercise prices were spring-loaded or otherwise timed around the release of material information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when a new employment contract is given to an executive that does not include a clawback provision and the company had a material restatement, especially if the restatement was due to fraud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The chair of the compensation committee where the CD&A provides insufficient or unclear information about performance metrics and goals, where the CD&A indicates that pay is not tied to performance, or where the compensation committee or management has excessive discretion to alter performance terms or increase amounts of awards in contravention of previously defined targets.

19 If a company provides shareholders with a say-on-pay proposal, we will initially only recommend voting against the company's say-on-pay proposal and will not recommend voting against the members of the compensation committee unless there is a pattern of failing to align pay and performance and/or the company exhibits egregious compensation practices. For cases in which the disconnect between pay and performance is marginal and the company has outperformed its peers, we will consider not recommending against compensation committee members.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee during whose tenure the committee failed to implement a shareholder proposal regarding a compensation-related issue, where the proposal received the affirmative vote of a majority of the voting shares at a shareholder meeting, and when a reasonable analysis suggests that the compensation committee (rather than the governance committee) should have taken steps to implement the request[.](#iea245be9574c4fa4ae4e29d2a2aa05f4_79)<sup>20</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when the board has materially decreased proxy statement disclosure regarding executive compensation policies and procedures in a manner which substantially impacts shareholders' ability to make an informed assessment of the company's executive pay practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when new excise tax gross-up provisions are adopted in employment agreements with executives, particularly in cases where the company previously committed not to provide any such entitlements in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the compensation committee when the board adopts a frequency for future advisory votes on executive compensation that differs from the frequency approved by shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The chair of the compensation committee when" mega-grants" have been granted and the awards present concerns such as excessive quantum, lack of sufficient performance conditions, and/or are excessively dilutive, among others.

Nominating and Governance Committee Performance

The nominating and governance committee is responsible for the governance by the board of the company and its executives. In performing this role, the committee is responsible and accountable for selection of objective and competent board members. It is also responsible for providing leadership on governance policies adopted by the company, such as decisions to implement shareholder proposals that have received a majority vote. At most companies, a single committee is charged with these oversight functions; at others, the governance and nominating responsibilities are apportioned among two separate committees.

Consistent with Glass Lewis' philosophy that boards should have diverse backgrounds and members with a breadth and depth of relevant experience, we believe that nominating and governance committees should consider diversity when making director nominations within the context of each specific company and its industry. In our view, shareholders are best served when boards make an effort to ensure a constituency that is not only reasonably diverse on the basis of age, race, gender and ethnicity, but also on the basis of geographic knowledge, industry experience, board tenure and culture.

Regarding the committee responsible for governance, we will consider recommending that shareholders vote against the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the governance committee<sup>21</sup> during whose tenure a shareholder proposal relating to important shareholder rights received support from a majority of the votes cast (excluding abstentions

20 In all other instances (i.e., a non-compensation-related shareholder proposal should have been implemented) we recommend that shareholders vote against the members of the governance committee.

21 If the board does not have a committee responsible for governance oversight and the board did not implement a shareholder proposal that received the requisite support, we will recommend voting against the entire board. If the

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and broker non-votes) and the board has not begun to implement or enact the proposal's subject matter.<sup>22</sup> Examples of such shareholder proposals include those seeking a declassified board structure, a majority vote standard for director elections, or a right to call a special meeting. In determining whether a board has sufficiently implemented such a proposal, we will examine the quality of the right enacted or proffered by the board for any conditions that may unreasonably interfere with the shareholders' ability to exercise the right (e.g., overly restrictive procedural requirements for calling a special meeting).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the governance committee when a shareholder resolution is excluded from the meeting agenda but the SEC has declined to state a view on whether such resolution should be excluded, or when the SEC has verbally permitted a company to exclude a shareholder proposal but there is no written record provided by the SEC about such determination and the company has not provided any disclosure concerning this no-action relief.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when the chair is not independent and an independent lead or presiding director has not been appointed.<sup>23</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair at companies with a multi-class share structure and unequal voting rights when the company does not provide for a reasonable sunset of the multi-class share structure (generally seven years or less).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In the absence of a nominating committee, the governance committee chair when there are fewer than five, or the whole governance committee when there are more than 20 members on the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when the committee fails to meet at all during the year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair, when for two consecutive years the company provides what we consider to be "inadequate" related party transaction disclosure (i.e., the nature of such transactions and/or the monetary amounts involved are unclear or excessively vague, thereby preventing a share- holder from being able to reasonably interpret the independence status of multiple directors above and beyond what the company maintains is compliant with SEC or applicable stock exchange listing requirements).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair, when during the past year the board adopted a forum selection clause (i.e., an exclusive forum provision)<sup>24</sup> designating either a state's courts for intra-corporate disputes,

shareholder proposal at issue requested that the board adopt a declassified structure, we will recommend voting against all director nominees up for election.

22 Where a compensation-related shareholder proposal should have been implemented, and when a reasonable analysis suggests that the members of the compensation committee (rather than the governance committee) bear the responsibility for failing to implement the request, we recommend that shareholders only vote against members of the compensation committee.

23 We believe that one independent individual should be appointed to serve as the lead or presiding director. When such a position is rotated among directors from meeting to meeting, we will recommend voting against the governance committee chair as we believe the lack of fixed lead or presiding director means that, effectively, the board does not have an independent board leader.

24 A forum selection clause is a bylaw provision stipulating that a certain state or federal jurisdiction is the exclusive forum for specified legal matters. Such a clause effectively limits a shareholder's legal remedy regarding appropriate choice of venue and related relief.

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and/or federal courts for matters arising under the Securities Act of 1933 without shareholder approval,<sup>25</sup> or if the board is currently seeking shareholder approval of a forum selection clause pursuant to a bundled bylaw amendment rather than as a separate proposal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the governance committee during whose tenure the board adopted, without shareholder approval, provisions in its charter or bylaws that, through rules on director compensation, may inhibit the ability of shareholders to nominate directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when the board takes actions to limit shareholders' ability to vote on matters material to shareholder rights (e.g., through the practice of excluding a shareholder proposal by means of ratifying a management proposal that is materially different from the shareholder proposal).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when directors' records for board and committee meeting attendance are not disclosed, or when it is indicated that a director attended less than 75% of board and committee meetings but disclosure is sufficiently vague that it is not possible to determine which specific director's attendance was lacking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when a detailed record of proxy voting results from the prior annual meeting has not been disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The governance committee chair when a company does not clearly disclose the identity of a shareholder proponent (or lead proponent when there are multiple filers) in their proxy statement. For a detailed explanation of this policy, please refer to our comprehensive *Proxy Paper Guidelines for Shareholder Proposals & ESG-Related Issues*, available at <u>www.glasslewis.com/voting-policies-current/</u>.

In addition, we may recommend that shareholders vote against the chair of the governance committee, or the entire committee, where the board has amended the company's governing documents to reduce or remove important shareholder rights, or to otherwise impede the ability of shareholders to exercise such right, and has done so without seeking shareholder approval. Examples of board actions that may cause such a recommendation include: the elimination of the ability of shareholders to call a special meeting or to act by written consent; an increase to the ownership threshold required for shareholders to call a special meeting; an

increase to vote requirements for charter or bylaw amendments; the adoption of provisions that limit the ability of shareholders to pursue full legal recourse — such as bylaws that require arbitration of shareholder claims

or that require shareholder plaintiffs to pay the company's legal expenses in the absence of a court victory (i.e., "fee-shifting" or "loser pays" bylaws); the adoption of a classified board structure; and the elimination of the ability of shareholders to remove a director without cause.

Regarding the nominating committee, we will consider recommending that shareholders vote against the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All members of the nominating committee, when the committee nominated or renominated

an individual who had a significant conflict of interest or whose past actions demonstrated a lack of integrity or inability to represent shareholder interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nominating committee chair, if the nominating committee did not meet during the year.

25 Glass Lewis will evaluate the circumstances surrounding the adoption of any forum selection clause as well as the general provisions contained therein. Where it can be reasonably determined that a forum selection clause is narrowly crafted to suit the particular circumstances facing the company and/or a reasonable sunset provision is included, we may make an exception to this policy.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In the absence of a governance committee, the nominating committee chair when the chair is not independent, and an independent lead or presiding director has not been appointed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nominating committee chair, when there are fewer than five, or the whole nominating committee when there are more than 20 members on the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nominating committee chair, when a director received a greater than 50% against vote the prior year and not only was the director not removed, but the issues that raised shareholder concern were not corrected.<sup>26</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The chair of the nominating committee of a board that is not at least 30 percent gender diverse[,](#iea245be9574c4fa4ae4e29d2a2aa05f4_82)<sup>27</sup> or all members of the nominating committee of a board with no gender diverse directors, at companies within the Russell 3000 index. For companies outside of the Russell 3000 index, we will recommend voting against the chair of the nominating committee if there are no gender diverse directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The chair of the nominating committee of a board with fewer than one director from an underrepresented community on the board, at companies within the Russell 1000 index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nominating committee chair when, alongside other governance or board performance concerns, the average tenure of non-executive directors is 10 years or more and no new independent directors have joined the board in the past five years. We will not be making voting recommendations solely on this basis; rather, insufficient board refreshment may be a contributing factor in our recommendations when additional board-related concerns have been identified.

In addition, we may consider recommending shareholders vote against the chair of the nominating committee where the board's failure to ensure the board has directors with relevant experience, either through periodic director assessment or board refreshment, has contributed to a company's poor performance. Where these issues warrant an against vote in the absence of both a governance and a nominating committee, we will recommend voting against the board chair, unless the chair also serves as the CEO, in which case we will recommend voting against the longest-serving director.

Board-Level Risk Management Oversight

Glass Lewis evaluates the risk management function of a public company board on a strictly case-by-case basis. Sound risk management, while necessary at all companies, is particularly important at financial firms which inherently maintain significant exposure to financial risk. We believe such financial firms should have a chief risk officer reporting directly to the board and a dedicated risk committee or a committee of the board charged with risk oversight. Moreover, many non-financial firms maintain strategies which involve a high level of exposure to financial risk. Similarly, since many non-financial firms have complex hedging or trading strategies, those firms should also have a chief risk officer and a risk committee.

26 Considering that shareholder disapproval clearly relates to the director who received a greater than 50% against vote rather than the nominating chair, we review the severity of the issue(s) that initially raised shareholder concern as well as company responsiveness to such matters, and will only recommend voting against the nominating chair if a reasonable analysis suggests that it would be most appropriate. In rare cases, we will consider recommending against the nominating chair when a director receives a substantial (i.e., 20% or more) vote against based on the same analysis.

27 Women and directors that identify with a gender other than male or female.

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Our views on risk oversight are consistent with those expressed by various regulatory bodies. In its December 2009 Final Rule release on Proxy Disclosure Enhancements, the SEC noted that risk oversight is a key competence of the board and that additional disclosures would improve investor and shareholder

understanding of the role of the board in the organization's risk management practices. The final rules, which became effective on February 28, 2010, now explicitly require companies and mutual funds to describe (while allowing for some degree of flexibility) the board's role in the oversight of risk.

When analyzing the risk management practices of public companies, we take note of any significant losses or writedowns on financial assets and/or structured transactions. In cases where a company has disclosed a sizable loss or writedown, and where we find that the company's board-level risk committee's poor oversight contributed to the loss, we will recommend that shareholders vote against such committee members on that basis. In addition, in cases where a company maintains a significant level of financial risk exposure but fails to disclose any explicit form of board-level risk oversight (committee or otherwise)[,](#iea245be9574c4fa4ae4e29d2a2aa05f4_85)<sup>28</sup> we will consider recommending to vote against the board chair on that basis. However, we generally would not recommend voting against a combined chair/CEO, except in egregious cases.

Board Oversight of Environmental and Social Issues

Glass Lewis recognizes the importance of ensuring the sustainability of companies' operations. We believe that insufficient oversight of material environmental and social issues can present direct legal, financial, regulatory and reputational risks that could serve to harm shareholder interests. Therefore, we believe that these issues should be carefully monitored and managed by companies, and that all companies should have an appropriate oversight structure in place to ensure that they are mitigating attendant risks and capitalizing on related opportunities to the best extent possible.

To that end, Glass Lewis believes that companies should ensure that boards maintain clear oversight of material risks to their operations, including those that are environmental and social in nature. These risks could include, but are not limited to, matters related to climate change, human capital management, diversity, stakeholder relations, and health, safety & environment. Given the importance of the board's role in overseeing environmental and social risks, we believe this responsibility should be formally designated and codified in the appropriate committee charters or other governing documents.

While we believe that it is important that these issues are overseen at the board level and that shareholders are afforded meaningful disclosure of these oversight responsibilities, we believe that companies should determine the best structure for this oversight. In our view, this oversight can be effectively conducted by specific directors, the entire board, a separate committee, or combined with the responsibilities of a key committee.

For companies in the Russell 3000 index and in instances where we identify material oversight concerns, Glass Lewis will review a company's overall governance practices and identify which directors or board-level committees have been charged with oversight of environmental and/or social issues. Furthermore, given the

importance of the board's role in overseeing environmental and social risks, Glass Lewis will generally

28 A committee responsible for risk management could be a dedicated risk committee, the audit committee, or the finance committee, depending on a given company's board structure and method of disclosure. At some companies, the entire board is charged with risk management.

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recommend voting against the governance committee chair of a company in the Russell 1000 index that fails to

provide explicit disclosure concerning the board's role in overseeing these issues.

When evaluating the board's role in overseeing environmental and/or social issues, we will examine a company's committee charters and governing documents to determine if the company has codified and maintained a meaningful level of oversight of and accountability for a company's material environmental and social impacts.

Board Oversight of Technology

Cyber Risk Oversight

Companies and consumers are exposed to a growing risk of cyber-attacks. These attacks can result in customer or employee data breaches, harm to a company's reputation, significant fines or penalties, and interruption to a company's operations. Further, in some instances, cyber breaches can result in national security concerns, such as those impacting companies operating as utilities, defense contractors, and energy companies.

In response to these issues, regulators have increasingly been focused on ensuring companies are providing appropriate and timely disclosures and protections to stakeholders that could have been adversely impacted by a breach in a company's cyber infrastructure.

On July 26, 2023, the SEC approved final rules requiring public companies to report cybersecurity incidents deemed material within four days of identifying them, detailing their nature, scope, timing, and material impact under Item 1.05 on Form 8-K.

Furthermore, in annual reports, companies must disclose their processes for assessing, identifying, and managing material cybersecurity risks, along with their material effects; and describe whether any risks from prior incidents have materially affected its business strategy, results of operations, or financial condition (or are reasonably likely to), pursuant to Regulation S-K Item 106. Item 106 will also require registrants to describe the board of directors' oversight of risks from cybersecurity threats and management's role and expertise in assessing and managing material risks from cybersecurity threats. Similar rules were also adopted for foreign private issuers. The final rules became effective on September 5, 2023.

Given the regulatory focus on, and the potential adverse outcomes from, cyber-related issues, it is our view that cyber risk is material for all companies. We therefore believe that it is critical that companies evaluate and mitigate these risks to the greatest extent possible. With that view, we encourage all issuers to provide clear disclosure concerning the role of the board in overseeing issues related to cybersecurity, including how companies are ensuring directors are fully versed on this rapidly evolving and dynamic issue. We believe such disclosure can help shareholders understand the seriousness with which companies take this issue.

In the absence of material cyber incidents, we will generally not make voting recommendations on the basis of a company's oversight or disclosure concerning cyber-related issues. However, in instances where cyber-attacks have caused significant harm to shareholders we will closely evaluate the board's oversight of cybersecurity as well as the company's response and disclosures.

Moreover, in instances where a company has been materially impacted by a cyber-attack, we believe shareholders can reasonably expect periodic updates communicating the company's ongoing progress towards

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resolving and remediating the impact of the cyber-attack. We generally believe shareholders are best served when such updates include (but are not necessarily limited to) details such as when the company has fully restored its information systems, when the company has returned to normal operations, what resources the company is providing for affected stakeholders, and any other potentially relevant information, until the company considers the impact of the cyber-attack to be fully remediated. These disclosures should focus on the company's response to address the impacts to affected stakeholders and should not reveal specific and/or

technical details that could impede the company's response or remediation of the incident or that could assist

threat actors.

In such instances, we may recommend against appropriate directors should we find the board's oversight, response or disclosure concerning cybersecurity-related issues to be insufficient, or are not provided to shareholders.

Board Oversight of Artificial Intelligence

In recent years, companies have rapidly begun to develop and adopt uses for artificial intelligence (AI) technologies throughout various aspects of their operations. Deployed and overseen effectively, AI technologies have the potential to make companies' operations and systems more efficient and productive. However, as the use of these technologies has grown, so have the potential risks associated with companies' development and use of AI. Given these potential risks, we believe that boards should be cognizant of, and take steps to mitigate exposure to, any material risks that could arise from their use or development of AI.

Companies that use or develop AI technologies should consider adopting strong internal frameworks that include ethical considerations and ensure they have provided a sufficient level of oversight of AI. As such, boards may seek to ensure effective oversight and address skills gaps by engaging in continued board education and/or appointing directors with AI expertise. With that view, we believe that all companies that develop or employ the use of AI in their operations should provide clear disclosure concerning the role of the board in overseeing issues related to AI, including how companies are ensuring directors are fully versed on this rapidly evolving and dynamic issue. We believe such disclosure can help shareholders understand the seriousness with which companies take this issue.

While we believe that it is important that these issues are overseen at the board level and that shareholders are afforded meaningful disclosure of these oversight responsibilities, we believe that companies should determine the best structure for this oversight. In our view, this oversight can be effectively conducted by specific directors, the entire board, a separate committee, or combined with the responsibilities of a key committee.

In the absence of material incidents related to a company's use or management of AI-related issues, we will

generally not make voting recommendations on the basis of a company's oversight of, or disclosure concerning, AI-related issues. However, in instances where there is evidence that insufficient oversight and/or management of AI technologies has resulted in material harm to shareholders, Glass Lewis will review a company's overall governance practices and identify which directors or board-level committees have been charged with oversight of AI-related risks. We will also closely evaluate the board's response to, and management of, this issue as well as any associated disclosures and may recommend against appropriate directors should we find the board's oversight, response or disclosure concerning AI-related issues to be insufficient.

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Board Accountability for Environmental and Social Performance

Glass Lewis carefully monitors companies' performance with respect to environmental and social issues, including those related to climate and human capital management. In situations where we believe that a company has not properly managed or mitigated material environmental or social risks to the detriment of shareholder value, or when such mismanagement has threatened shareholder value, Glass Lewis may recommend that shareholders vote against the members of the board who are responsible for oversight of environmental and social risks. In the absence of explicit board oversight of environmental and social issues, Glass Lewis may recommend that shareholders vote against members of the audit committee. In making these determinations, Glass Lewis will carefully review the situation, its effect on shareholder value, as well as any corrective action or other response made by the company.

For more information on how Glass Lewis evaluates environmental and social issues, please see Glass Lewis' Overall Approach to ESG as well as our comprehensive *Proxy Paper Guidelines for Shareholder Proposals & ESG- Related Issues,* available at <u>www.glasslewis.com/voting-policies-current/</u>.

Board Accountability for Climate-related Issues

Given the exceptionally broad impacts of a changing climate on companies, the economy, and society in general, we view climate risk as a material risk for all companies. We therefore believe that boards should be considering and evaluating their operational resilience under lower-carbon scenarios. While all companies maintain exposure to climate-related risks, we believe that additional consideration should be given to, and that disclosure should be provided by those companies whose GHG emissions represent a financially material risk.

We believe that companies with this increased risk exposure should provide clear and comprehensive disclosure regarding these risks, including how they are being mitigated and overseen. We believe such information is

crucial to allow investors to understand the company's management of this issue, as well as the impact of a lower carbon future on the company's operations.

In line with this view, Glass Lewis will carefully examine the climate-related disclosures provided by companies in the S&P 500 index with material exposure to climate risk stemming from their own operations<sup>29,</sup> as well as companies where we believe emissions or climate impacts, or stakeholder scrutiny thereof, represent an outsized, financially material risk, in order to assess whether they have produced disclosures in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) or IFRS S2 Climate-related Disclosures. We will also assess whether these companies have disclosed explicit and clearly defined board-level oversight responsibilities for climate-related issues. In instances where we find either (or both) of these disclosures to be absent or significantly lacking, we may recommend voting against the chair of the committee (or board) charged with oversight of climate-related issues, or if no committee has been charged with such oversight, the chair of the governance committee. Further, we may extend our recommendation on this basis to additional members of the responsible committee in cases where the committee chair is not standing for

29 This policy will generally apply to companies in the following SASB-defined industries: agricultural products, air freight & logistics, airlines, chemicals, construction materials, containers & packaging, cruise lines, electric utilities & power generators, food retailers & distributors, health care distributors, iron & steel producers, marine transportation, meat, poultry & dairy, metals & mining, non-alcoholic beverages, oil & gas, pulp & paper products, rail transportation, road transportation, semiconductors, waste management.

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election due to a classified board, or based on other factors, including the company's size, industry and its overall governance profile.

Director Commitments

We believe that directors should have the necessary time to fulfill their duties to shareholders. In our view, an overcommitted director can pose a material risk to a company's shareholders, particularly during periods of crisis. In addition, recent research indicates that the time commitment associated with being a director has been on a significant upward trend in the past decade.<sup>30</sup> As a result, we generally recommend that shareholders vote against a director who serves as an executive officer (other than executive chair) of any public company<sup>31</sup> while serving on more than one external public company board, a director who serves as an executive chair of any public company while serving on more than two external public company boards, and any other director who serves on more than five public company boards.

Because we believe that executives will primarily devote their attention to executive duties, we generally will not recommend that shareholders vote against overcommitted directors at the companies where they serve as an executive.

When determining whether a director's service on an excessive number of boards may limit the ability of the director to devote sufficient time to board duties, we may consider relevant factors such as the size and location of the other companies where the director serves on the board, the director's board roles at the companies in question, whether the director serves on the board of any large privately-held companies, the director's tenure on the boards in question, and the director's attendance record at all companies. In the case of directors who serve in executive roles other than CEO (e.g., executive chair), we will evaluate the specific duties and responsibilities of that role in determining whether an exception is warranted.

We may also refrain from recommending against certain directors if the company provides sufficient rationale for their continued board service. The rationale should allow shareholders to evaluate the scope of the

directors' other commitments, as well as their contributions to the board including specialized knowledge of the company's industry, strategy or key markets, the diversity of skills, perspective and background they provide, and other relevant factors. We will also generally refrain from recommending to vote against a director who serves on an excessive number of boards within a consolidated group of companies in related industries, or a director that represents a firm whose sole purpose is to manage a portfolio of investments which include the company.

30 For example, the 2015-2016 NACD Public Company Governance Survey states that, on average, directors spent a total of

&nbsp;&nbsp;&nbsp;&nbsp;248.2 hours annual on board-related matters during the past year, which it describes as a "historically high level" that is significantly above the average hours recorded in 2006. Additionally, the 2020 Spencer Stuart Board Index indicates that, while 39% of S&P 500 CEOs serve on one additional public board, just 2% of S&P 500 CEOs serve on two additional public boards and only one CEO serves on three.

31 When the executive officer in question serves only as an executive at a special purpose acquisition company (SPAC) we will generally apply the higher threshold of five public company directorships.

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Other Considerations

In addition to the three key characteristics — independence, performance, experience — that we use to evaluate board members, we consider conflict-of-interest issues as well as the size of the board of directors when making voting recommendations.

Conflicts of Interest

We believe board members should be wholly free of identifiable and substantial conflicts of interest, regardless of the overall level of independent directors on the board. Accordingly, we recommend that shareholders vote against the following types of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A CFO who is on the board: In our view, the CFO holds a unique position relative to financial reporting and disclosure to shareholders. Due to the critical importance of financial disclosure and reporting, we believe the CFO should report to the board and not be a member of it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director who provides — or a director who has an immediate family member who provides — material consulting or other material professional services to the company. These services may include legal, consulting[,](#iea245be9574c4fa4ae4e29d2a2aa05f4_97)<sup>32</sup> or financial services. We question the need for the company to have consulting relationships with its directors. We view such relationships as creating conflicts for directors, since they may be forced to weigh their own interests against shareholder interests when making board decisions.

In addition, a company's decisions regarding where to turn for the best professional

services may be compromised when doing business with the professional services firm of one of the

company's directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A director, or a director who has an immediate family member, engaging in airplane, real estate, or similar deals, including perquisite-type grants from the company, amounting to more than $50,000. Directors who receive these sorts of payments from the company will have to make unnecessarily complicated decisions that may pit their interests against shareholder interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interlocking directorships: CEOs or other top executives who serve on each other's boards create an interlock that poses conflicts that should be avoided to ensure the promotion of shareholder interests above all else.<sup>33</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All board members who served at a time when a poison pill with a term of longer than one year was adopted without shareholder approval within the prior twelve months.<sup>34</sup> In the event a board is classified and shareholders are therefore unable to vote against all directors, we will recommend voting against the remaining directors the next year they are up for a shareholder vote. If a poison pill with a

32 We will generally refrain from recommending against a director who provides consulting services for the company if the director is excluded from membership on the board's key committees and we have not identified significant governance concerns with the board.

33 We do not apply a look-back period for this situation. The interlock policy applies to both public and private companies. On a case-by-case basis, we evaluate other types of interlocking relationships, such as interlocks with close family members of executives or within group companies. Further, we will also evaluate multiple board interlocks among non-insiders (i.e., multiple directors serving on the same boards at other companies), for evidence of a pattern of poor oversight.

34 Refer to the "Governance Structure and the Shareholder Franchise" section for further discussion of our policies regarding anti-takeover measures, including poison pills.

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term of one year or less was adopted without shareholder approval, and without adequate justification, we will consider recommending that shareholders vote against all members of the governance committee. If the board has, without seeking shareholder approval, and without adequate justification, extended the term of a poison pill by one year or less in two consecutive years, we will consider recommending that shareholders vote against the entire board.

Size of the Board of Directors

While we do not believe there is a universally applicable optimal board size, we do believe boards should have at least five directors to ensure sufficient diversity in decision-making and to enable the formation of key board committees with independent directors. Conversely, we believe that boards with more than 20 members will typically suffer under the weight of "too many cooks in the kitchen" and have difficulty reaching consensus and making timely decisions. Sometimes the presence of too many voices can make it difficult to draw on the wisdom and experience in the room by virtue of the need to limit the discussion so that each voice may be heard.

To that end, we typically recommend voting against the chair of the nominating committee (or the governance committee, in the absence of a nominating committee) at a board with fewer than five directors or more than 20 directors.

Controlled Companies

We believe controlled companies warrant certain exceptions to our independence standards. The board's function is to protect shareholder interests; however, when an individual, entity (or group of shareholders party to a formal agreement) owns more than 50% of the voting shares, the interests of the majority of shareholders are the interests of that entity or individual. Consequently, Glass Lewis does not apply our usual two-thirds board independence rule and therefore we will not recommend voting against boards whose composition reflects the makeup of the shareholder population.

Independence Exceptions

The independence exceptions that we make for controlled companies are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We do not require that controlled companies have boards that are at least two-thirds independent. So long as the insiders and/or affiliates are connected with the controlling entity, we accept the presence of non-independent board members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The compensation committee and nominating and governance committees do not need to consist solely of independent directors.

oWe believe that standing nominating and corporate governance committees at controlled companies are unnecessary. Although having a committee charged with the duties of searching for, selecting, and nominating independent directors can be beneficial, the unique composition of a controlled company's shareholder base makes such committees weak and irrelevant.

oLikewise, we believe that independent compensation committees at controlled companies are unnecessary. Although independent directors are the best choice for approving and monitoring senior executives' pay, controlled companies serve a unique shareholder population whose voting power ensures the protection of its interests. As such, we believe that having affiliated

directors on a controlled company's compensation committee is acceptable. However, given

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that a controlled company has certain obligations to minority shareholders we feel that an insider should not serve on the compensation committee. Therefore, Glass Lewis will recommend voting against any insider (the CEO or otherwise) serving on the compensation committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Controlled companies do not need an independent chair or an independent lead or presiding director. Although an independent director in a position of authority on the board — such as chair or presiding director — can best carry out the board's duties, controlled companies serve a unique shareholder population whose voting power ensures the protection of its interests.

Size of the Board of Directors

We have no board size requirements for controlled companies.

Audit Committee Independence

Despite a controlled company's status, unlike for the other key committees, we nevertheless believe that audit committees should consist solely of independent directors. Regardless of a company's controlled status, the interests of all shareholders must be protected by ensuring the integrity and accuracy of the company's financial statements. Allowing affiliated directors to oversee the preparation of financial reports could create an insurmountable conflict of interest.

Board Responsiveness at Multi-Class Companies

At controlled companies and companies that have multi-class share structures with unequal voting rights, we will carefully examine the level of approval or disapproval attributed to unaffiliated shareholders when determining whether board responsiveness is warranted. In the case of companies that have multi-class share structures with unequal voting rights, we will generally examine the level of approval or disapproval attributed to unaffiliated shareholders on a "one share, one vote" basis. At controlled and multi-class companies, when at least 20% or more of unaffiliated shareholders vote contrary to management, we believe that boards should engage with shareholders and demonstrate some initial level of responsiveness, and when a majority or more of unaffiliated shareholders vote contrary to management we believe that boards should engage with shareholders and provide a more robust response to fully address shareholder concerns.

Significant Shareholders

Where an individual or entity holds between 20-50% of a company's voting power, we believe it is reasonable to allow proportional representation on the board and committees (excluding the audit committee) based on the individual or entity's percentage of ownership.

Governance Following an IPO, Spin-Off, or Direct Listing

We believe companies that have recently completed an initial public offering (IPO), spin-off, or direct listing should be allowed adequate time to fully comply with marketplace listing requirements and meet basic corporate governance standards. Generally speaking, we refrain from making recommendations on the basis of governance standards (e.g., board independence, committee membership and structure, meeting attendance, etc.) during the one-year period following an IPO.

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However, some cases warrant shareholder action against the board of a company that have completed an IPO, spin-off, or direct listing within the past year. When evaluating companies that have recently gone public, Glass Lewis will review the terms of the applicable governing documents in order to determine whether shareholder rights are being severely restricted indefinitely. We believe boards that approve highly restrictive governing documents have demonstrated that they may subvert shareholder interests following the IPO. In conducting this evaluation, Glass Lewis will consider:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The adoption of anti-takeover provisions such as a poison pill or classified board

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supermajority vote requirements to amend governing documents

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The presence of exclusive forum or fee-shifting provisions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether shareholders can call special meetings or act by written consent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The voting standard provided for the election of directors

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The ability of shareholders to remove directors without cause

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The presence of evergreen provisions in the company's equity compensation arrangements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The presence of a multi-class share structure which does not afford common shareholders voting power that is aligned with their economic interest

In cases where Glass Lewis determines that the board has approved overly restrictive governing documents, we will generally recommend voting against members of the governance committee. If there is no governance committee, or if a portion of such committee members are not standing for election due to a classified board structure, we will expand our recommendations to additional director nominees, based on who is standing for election.

In cases where, preceding an IPO, the board adopts a multi-class share structure where voting rights are not aligned with economic interest, or an anti-takeover provision, such as a poison pill or classified board, we will generally recommend voting against all members of the board who served at the time of the IPO if the board: (i) did not also commit to submitting these provisions to a shareholder vote at the company's first shareholder meeting following the IPO; or (ii) did not provide for a reasonable sunset of these provisions (generally three to five years in the case of a classified board or poison pill; or seven years or less in the case of a multi-class share structure). In the case of a multi-class share structure, if these provisions are put to a shareholder vote, we will examine the level of approval or disapproval attributed to unaffiliated shareholders when determining the vote outcome.

In our view, adopting an anti-takeover device unfairly penalizes future shareholders who (except for electing to buy or sell the stock) are unable to weigh in on a matter that could potentially negatively impact their ownership interest. This notion is strengthened when a board adopts a classified board with an infinite duration or a poison pill with a five- to ten-year term immediately prior to going public, thereby insulating management for a substantial amount of time.

In addition, shareholders should also be wary of companies that adopt supermajority voting requirements before their IPO. Absent explicit provisions in the articles or bylaws stipulating that certain policies will be phased out over a certain period of time, long-term shareholders could find themselves in the predicament of having to attain a supermajority vote to approve future proposals seeking to eliminate such policies.

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Governance Following a Business Combination with a Special Purpose Acquisition Company

The business combination of a private company with a publicly traded special purpose acquisition company (SPAC) facilitates the private entity becoming a publicly traded corporation. Thus, the business combination

represents the private company's de-facto IPO. We believe that some cases warrant shareholder action against the board of a company that have completed a business combination with a SPAC within the past year.

At meetings where shareholders vote on the business combination of a SPAC with a private company, shareholders are generally voting on a new corporate charter for the post-combination company as a condition to approval of the business combination. In many cases, shareholders are faced with the dilemma of having to approve corporate charters that severely restrict shareholder rights to facilitate the business combination.

Therefore, when shareholders are required to approve binding charters as a condition to approval of a business combination with a SPAC, we believe shareholders should also be provided with advisory votes on material charter amendments as a means to voice their opinions on such restrictive governance provisions.

When evaluating companies that have recently gone public via business combination with a SPAC, Glass Lewis will review the terms of the applicable governing documents to determine whether shareholder rights are being severely restricted indefinitely and whether these restrictive provisions were put forth for a shareholder vote on an advisory basis at the prior meeting where shareholders voted on the business combination.

In cases where, prior to the combined company becoming publicly traded, the board adopts a multi-class share structure where voting rights are not aligned with economic interest, or an anti-takeover provision, such as a poison pill or classified board, we will generally recommend voting against all members of the board who served at the time of the combined company becoming publicly traded if the board: (i) did not also submit these provisions to a shareholder vote on an advisory basis at the prior meeting where shareholders voted on the business combination; (ii) did not also commit to submitting these provisions to a shareholder vote at the company's first shareholder meeting following the company becoming publicly traded; or (iii) did not provide for a reasonable sunset of these provisions (generally three to five years in the case of a classified board or poison pill; or seven years or less in the case of a multi-class share structure).

Consistent with our view on IPOs, adopting an anti-takeover device unfairly penalizes future shareholders who (except for electing to buy or sell the stock) are unable to weigh in on a matter that could potentially negatively impact their ownership interest.

Dual-Listed or Foreign-Incorporated Companies

For companies that trade on multiple exchanges or are incorporated in foreign jurisdictions but trade only in the U.S., we will apply the governance standard most relevant in each situation. We will consider a number of factors in determining which Glass Lewis country-specific policy to apply, including but not limited to: (i) the corporate governance structure and features of the company including whether the board structure is unique to a particular market; (ii) the nature of the proposals; (iii) the location of the company's primary listing, if one can be determined; (iv) the regulatory/governance regime that the board is reporting against; and (v) the availability and completeness of the company's SEC filings.

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OTC-listed Companies

Companies trading on the OTC Bulletin Board are not considered "listed companies" under SEC rules and therefore not subject to the same governance standards as listed companies. However, we believe that more stringent corporate governance standards should be applied to these companies given that their shares are still publicly traded.

When reviewing OTC companies, Glass Lewis will review the available disclosure relating to the shareholder meeting to determine whether shareholders are able to evaluate several key pieces of information, including: (i) the composition of the board's key committees, if any; (ii) the level of share ownership of company insiders or directors; (iii) the board meeting attendance record of directors; (iv) executive and non-employee director compensation; (v) related-party transactions conducted during the past year; and (vi) the board's leadership structure and determinations regarding director independence.

We are particularly concerned when company disclosure lacks any information regarding the board's key committees. We believe that committees of the board are an essential tool for clarifying how the responsibilities of the board are being delegated, and specifically for indicating which directors are accountable for ensuring: (i) the independence and quality of directors, and the transparency and integrity of the nominating process; (ii) compensation programs that are fair and appropriate; (iii) proper oversight of the company's accounting, financial reporting, and internal and external audits; and (iv) general adherence to principles of good corporate governance.

In cases where shareholders are unable to identify which board members are responsible for ensuring oversight of the above-mentioned responsibilities, we may consider recommending against certain members of the board.

Ordinarily, we believe it is the responsibility of the corporate governance committee to provide thorough

disclosure of the board's governance practices. In the absence of such a committee, we believe it is appropriate to hold the board's chair or, if such individual is an executive of the company, the longest-serving non-executive board member accountable.

Mutual Fund Boards

Mutual funds, or investment companies, are structured differently from regular public companies (i.e., operating companies). Typically, members of a fund's advisor are on the board and management takes on a different role from that of regular public companies. Thus, we focus on a short list of requirements, although many of our guidelines remain the same.

The following mutual fund policies are similar to the policies for regular public companies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Size of the board of directors** — The board should be made up of between five and twenty directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **The CFO on the board** — Neither the CFO of the fund nor the CFO of the fund's registered investment

advisor should serve on the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Independence of the audit committee** — The audit committee should consist solely of independent directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Audit committee financial expert** — At least one member of the audit committee should be designated as the audit committee financial expert.

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The following differences from regular public companies apply at mutual funds:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Independence of the board** — We believe that three-fourths of an investment company's board should be made up of independent directors. This is consistent with a proposed SEC rule on investment company boards. The Investment Company Act requires 40% of the board to be independent, but in 2001, the SEC amended the Exemptive Rules to require that a majority of a mutual fund board be independent. In 2005, the SEC proposed increasing the independence threshold to 75%. In 2006, a federal appeals court ordered that this rule amendment be put back out for public comment, putting it back into "proposed rule" status. Since mutual fund boards play a vital role in overseeing the relationship between the fund and its investment manager, there is greater need for independent oversight than there is for an operating company board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **When the auditor is not up for ratification** — We do not recommend voting against the audit committee if the auditor is not up for ratification. Due to the different legal structure of an investment company compared to an operating company, the auditor for the investment company (i.e., mutual fund)

does not conduct the same level of financial review for each investment company as for an operating company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Non-independent chair** — The SEC has proposed that the chair of the fund board be independent. We agree that the roles of a mutual fund's chair and CEO should be separate. Although we believe this would be best at all companies, we recommend voting against the chair of an investment company's nominating committee as well as the board chair if the chair and CEO of a mutual fund are the same person and the fund does not have an independent lead or presiding director. Seven former SEC commissioners support the appointment of an independent chair and we agree with them that "an independent board chair would be better able to create conditions favoring the long-term interests of fund shareholders than would a chair who is an executive of the advisor." (See the comment letter sent to the SEC in support of the proposed rule at <u>http://www.sec.gov/news/studies/indchair.pdf</u>.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Multiple funds overseen by the same director** — Unlike service on a public company board, mutual fund boards require much less of a time commitment. Mutual fund directors typically serve on dozens of other mutual fund boards, often within the same fund complex. The Investment Company Institute's (ICI) Overview of Fund Governance Practices, 1994-2012, indicates that the average number of funds served by an independent director in 2012 was 53. Absent evidence that a specific director is hindered from being an effective board member at a fund due to service on other funds' boards, we refrain from maintaining a cap on the number of outside mutual fund boards that we believe a director can serve on.

Declassified Boards

Glass Lewis favors the repeal of staggered boards and the annual election of directors. We believe staggered boards are less accountable to shareholders than boards that are elected annually. Furthermore, we feel the annual election of directors encourages board members to focus on shareholder interests.

Empirical studies have shown: (i) staggered boards are associated with a reduction in a firm's valuation; and (ii) in the context of hostile takeovers, staggered boards operate as a takeover defense, which entrenches management, discourages potential acquirers, and delivers a lower return to target shareholders.

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In our view, there is no evidence to demonstrate that staggered boards improve shareholder returns in a takeover context. Some research has indicated that shareholders are worse off when a staggered board blocks a transaction; further, when a staggered board negotiates a friendly transaction, no statistically significant difference in premium occurs.<sup>35</sup> Additional research found that charter-based staggered boards "reduce the

market value of a firm by 4% to 6% of its market capitalization" and that "staggered boards bring about and not merely reflect this reduction in market value."<sup>36</sup> A subsequent study reaffirmed that classified boards reduce shareholder value, finding "that the ongoing process of dismantling staggered boards, encouraged by

institutional investors, could well contribute to increasing shareholder wealth."<sup>37</sup>

Shareholders have increasingly come to agree with this view. In 2019, 90% of S&P 500 companies had declassified boards, up from 68% in 2009.<sup>38</sup> Management proposals to declassify boards are approved with near unanimity and shareholder proposals on the topic also receive strong shareholder support; in 2014, shareholder proposals requesting that companies declassify their boards received average support of 84% (excluding abstentions and broker non-votes), whereas in 1987, only 16.4% of votes cast favored board declassification.<sup>39</sup> Further, a growing number of companies, nearly half of all those targeted by shareholder proposals requesting that all directors stand for election annually, either recommended shareholders support the proposal or made no recommendation, a departure from the more traditional management recommendation to vote against shareholder proposals.

Given our belief that declassified boards promote director accountability, the empirical evidence suggesting staggered boards reduce a company's value and the established shareholder opposition to such a structure, Glass Lewis supports the declassification of boards and the annual election of directors.

Board Composition and Refreshment

Glass Lewis strongly supports routine director evaluation, including independent external reviews, and periodic board refreshment to foster the sharing of diverse perspectives in the boardroom and the generation of new ideas and business strategies. Further, we believe the board should evaluate the need for changes to board composition based on an analysis of skills and experience necessary for the company, as well as the results of the director evaluations, as opposed to relying solely on age or tenure limits. When necessary, shareholders can address concerns regarding proper board composition through director elections.

35 Lucian Bebchuk, John Coates IV, Guhan Subramanian, "The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants," 55 Stanford Law Review 885-917 (2002).

36 Lucian Bebchuk, Alma Cohen, "The Costs of Entrenched Boards" (2004).

37 Lucian Bebchuk, Alma Cohen and Charles C.Y. Wang, "Staggered Boards and the Wealth of Shareholders: Evidence from a Natural Experiment,"

SSRN: <u>http://ssrn.com/abstract=1706806</u> (2010), p. 26.

38 Spencer Stuart Board Index, 2019, p. 15.

39 Lucian Bebchuk, John Coates IV and Guhan Subramanian, "The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy".

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In our view, a director's experience can be a valuable asset to shareholders because of the complex, critical issues that boards face. This said, we recognize that in rare circumstances, a lack of refreshment can contribute to a lack of board responsiveness to poor company performance.

We will note as a potential concern instances where the average tenure of non-executive directors is 10 years or more and no new directors have joined the board in the past five years. While we will be highlighting this as a potential area of concern, we will not be making voting recommendations strictly on this basis, unless we have identified other governance or board performance concerns.

On occasion, age or term limits can be used as a means to remove a director for boards that are unwilling to police their membership and enforce turnover. Some shareholders support term limits as a way to force change in such circumstances.

While we understand that age limits can aid board succession planning, the long-term impact of age limits restricts experienced and potentially valuable board members from service through an arbitrary means. We believe that shareholders are better off monitoring the board's overall composition, including the diversity of its members, the alignment of the board's areas of expertise with a company's strategy, the board's approach to corporate governance, and its stewardship of company performance, rather than imposing inflexible rules that don't necessarily correlate with returns or benefits for shareholders.

However, if a board adopts term/age limits, it should follow through and not waive such limits. In cases where the board waives its term/age limits for two or more consecutive years, Glass Lewis will generally recommend that shareholders vote against the nominating and/or governance committee chair, unless a compelling rationale is provided for why the board is proposing to waive this rule, such as consummation of a corporate transaction.

Board Diversity

Glass Lewis recognizes the importance of ensuring that the board is composed of directors who have a diversity of skills, thought and experience, as such diversity benefits companies by providing a broad range of perspectives and insights. Glass Lewis closely reviews the composition of the board for representation of diverse director candidates.

Board Gender Diversity

We consider the nominating and governance committee to be responsible for ensuring sufficient board diversity, or for publicly communicating its rationale or a plan for increasing diversity. As such, we will generally recommend voting against the chair of the nominating committee of a board that is not at least 30 percent gender diverse, or all members of the nominating committee of a board with no gender diverse directors, at companies within the Russell 3000 index. For companies outside the Russell 3000 index, our policy requires a minimum of one gender diverse director.

When making these voting recommendations, we will carefully review a company's disclosure of its diversity considerations and may refrain from recommending that shareholders vote against directors when boards have provided sufficient rationale for the lack of diversity or a plan to address the lack of diversity, including a

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timeline of when the board intends to appoint additional gender diverse directors (generally by the next annual meeting or as soon as reasonably practicable).

We may extend our gender diversity recommendations to additional members of the nominating committee in cases where the committee chair is not standing for election due to a classified board, or based on other factors, including the company's size and industry, applicable laws in its state of headquarters, and its overall governance profile.

Board Underrepresented Community Diversity

We will generally recommend against the chair of the nominating committee of a board with fewer than one director from an underrepresented community on the board at companies within the Russell 1000 index.

We define "underrepresented community director" as an individual who self-identifies as Black, African American, North African, Middle Eastern, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaskan Native, or who self-identifies as a member of the LGBTQIA+ community. For the purposes of this evaluation, we will rely solely on self-identified demographic information as disclosed in company proxy statements.

When making these voting recommendations, we will carefully review a company's disclosure of its diversity considerations and may refrain from recommending that shareholders vote against directors when boards have provided a sufficient rationale or plan to address the lack of diversity on the board, including a timeline to appoint additional directors from an underrepresented community (generally by the next annual meeting or as soon as reasonably practicable).

We may extend our underrepresented community diversity recommendations to additional members of the nominating committee in cases where the committee chair is not standing for election due to a classified board, or based on other factors, including the company's size and industry, applicable laws in its state of headquarters, and its overall governance profile.

State Laws on Diversity

Several states have begun to encourage board diversity through legislation. Some state laws imposed mandatory board composition requirements, while other states have enacted or are considering legislation that encourages companies to diversify their boards but does not mandate board composition requirements.

Furthermore, several states have enacted or are considering enacting certain disclosure or reporting requirements in filings made with each respective state annually.

Glass Lewis will recommend in accordance with mandatory board composition requirements set forth in applicable state laws when they come into effect. We will generally refrain from recommending against directors when applicable state laws do not mandate board composition requirements, are non-binding, or solely impose disclosure or reporting requirements.

We note that during 2022, California's Senate Bill 826 and Assembly Bill 979 regarding board gender and

"underrepresented community" diversity, respectively, were both deemed to violate the equal protection clause of the California state constitution. These laws are currently in the appeals process.

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Accordingly, where we previously recommended in accordance with mandatory board composition requirements set forth in California's SB 826 and AB 979, we will refrain from providing recommendations pursuant to these state board composition requirements until further notice while we continue to monitor the appeals process. However, we will continue to monitor compliance with these requirements.

Disclosure of Director Diversity and Skills

Because company disclosure is critical when measuring the mix of diverse attributes and skills of directors, Glass Lewis assesses the quality of such disclosure in companies' proxy statements. Accordingly, we reflect how a company's proxy statement presents: (i) the board's current percentage of racial/ethnic diversity; (ii) whether the board's definition of diversity explicitly includes gender and/or race/ethnicity; (iii) whether the board has adopted a policy requiring women and minorities to be included in the initial pool of candidates when selecting new director nominees (aka "Rooney Rule"); and (iv) board skills disclosure. Such ratings will help inform our assessment of a company's overall governance and may be a contributing factor in our recommendations when additional board-related concerns have been identified.

At companies in the Russell 1000 index that have not provided any disclosure in any of the above categories, we will generally recommend voting against the chair of the nominating and/or governance committee. Further, when companies in the Russell 1000 index have not provided any disclosure of individual or aggregate racial/ethnic minority board demographic information, we will generally recommend voting against the chair of the nominating and/or governance committee.

Proxy Access

In lieu of running their own contested election, proxy access would not only allow certain shareholders to nominate directors to company boards but the shareholder nominees would be included on the company's ballot, significantly enhancing the ability of shareholders to play a meaningful role in selecting their representatives. Glass Lewis generally supports affording shareholders the right to nominate director candidates to management's proxy as a means to ensure that significant, long-term shareholders have an ability to nominate candidates to the board.

Companies generally seek shareholder approval to amend company bylaws to adopt proxy access in response to shareholder engagement or pressure, usually in the form of a shareholder proposal requesting proxy access, although some companies may adopt some elements of proxy access without prompting. Glass Lewis considers several factors when evaluating whether to support proposals for companies to adopt proxy access including the specified minimum ownership and holding requirement for shareholders to nominate one or more directors, as well as company size, performance and responsiveness to shareholders.

For a discussion of recent regulatory events in this area, along with a detailed overview of the Glass Lewis approach to shareholder proposals regarding Proxy Access, refer to Glass Lewis' *Proxy Paper Guidelines for Shareholder Proposals & ESG-Related Issues*, available at <u>www.glasslewis.com</u>.

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Majority Vote for Election of Directors

Majority voting for the election of directors is fast becoming the de facto standard in corporate board elections. In our view, the majority voting proposals are an effort to make the case for shareholder impact on director elections on a company-specific basis.

While this proposal would not give shareholders the opportunity to nominate directors or lead to elections where shareholders have a choice among director candidates, if implemented, the proposal would allow shareholders to have a voice in determining whether the nominees proposed by the board should actually serve as the overseer-representatives of shareholders in the boardroom. We believe this would be a favorable outcome for shareholders.

The number of shareholder proposals requesting that companies adopt a majority voting standard has declined significantly during the past decade, largely as a result of widespread adoption of majority voting or director resignation policies at U.S. companies. In 2019, 89% of the S&P 500 Index had implemented a resignation policy for directors failing to receive majority shareholder support, compared to 65% in 2009.<sup>40</sup>

The Plurality Vote Standard

Today, most U.S. companies still elect directors by a plurality vote standard. Under that standard, if one shareholder holding only one share votes in favor of a nominee (including that director, if the director is a shareholder), that nominee "wins" the election and assumes a seat on the board. The common concern among companies with a plurality voting standard is the possibility that one or more directors would not receive a majority of votes, resulting in "failed elections."

Advantages of a Majority Vote Standard

If a majority vote standard were implemented, a nominee would have to receive the support of a majority of the shares voted in order to be elected. Thus, shareholders could collectively vote to reject a director they believe will not pursue their best interests. Given that so few directors (less than 100 a year) do not receive majority support from shareholders, we think that a majority vote standard is reasonable since it will neither result in many failed director elections nor reduce the willingness of qualified, shareholder-focused directors to serve in the future. Further, most directors who fail to receive a majority shareholder vote in favor of their election do not step down, underscoring the need for true majority voting.

We believe that a majority vote standard will likely lead to more attentive directors. Although shareholders only rarely fail to support directors, the occasional majority vote against a director's election will likely deter the election of directors with a record of ignoring shareholder interests. Glass Lewis will therefore generally support proposals calling for the election of directors by a majority vote, excepting contested director elections.

In response to the high level of support majority voting has garnered, many companies have voluntarily taken steps to implement majority voting or modified approaches to majority voting. These steps range from a

40 Spencer Stuart Board Index, 2019, p. 15.

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modified approach requiring directors that receive a majority of withheld votes to resign (i.e., a resignation policy) to actually requiring a majority vote of outstanding shares to elect directors.

We feel that the modified approach does not go far enough because requiring a director to resign is not the same as requiring a majority vote to elect a director and does not allow shareholders a definitive voice in the election process. Further, under the modified approach, the corporate governance committee could reject a resignation and, even if it accepts the resignation, the corporate governance committee decides on the

director's replacement. And since the modified approach is usually adopted as a policy by the board or a board committee, it could be altered by the same board or committee at any time.

Conflicting and Excluded Proposals

SEC Rule 14a-8(i)(9) allows companies to exclude shareholder proposals "if the proposal directly conflicts with one of the company's own proposals to be submitted to shareholders at the same meeting." On October 22, 2015, the SEC issued Staff Legal Bulletin No. 14H (SLB 14H) clarifying its rule concerning the exclusion of certain shareholder proposals when similar items are also on the ballot. SLB 14H increased the burden on companies to prove to SEC staff that a conflict exists; therefore, many companies still chose to place management proposals alongside similar shareholder proposals in many cases.

During the 2018 proxy season, a new trend in the SEC's interpretation of this rule emerged. Upon submission of shareholder proposals requesting that companies adopt a lower special meeting threshold, several companies petitioned the SEC for no-action relief under the premise that the shareholder proposals conflicted with

management's own special meeting proposals, even though the management proposals set a higher threshold than those requested by the proponent. No-action relief was granted to these companies; however, the SEC stipulated that the companies must state in the rationale for the management proposals that a vote in favor of management's proposal was tantamount to a vote against the adoption of a lower special meeting threshold. In certain instances, shareholder proposals to lower an existing special meeting right threshold were excluded on the basis that they conflicted with management proposals seeking to ratify the existing special meeting rights. We find the exclusion of these shareholder proposals to be especially problematic as, in these instances, shareholders are not offered any enhanced shareholder right, nor would the approval (or rejection) of the

ratification proposal initiate any type of meaningful change to shareholders' rights.

In instances where companies have excluded shareholder proposals, such as those instances where special

meeting shareholder proposals are excluded as a result of "conflicting" management proposals, Glass Lewis will

take a case-by-case approach, taking into account the following issues:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The threshold proposed by the shareholder resolution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The threshold proposed or established by management and the attendant rationale for the threshold;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether management's proposal is seeking to ratify an existing special meeting right or adopt a bylaw

that would establish a special meeting right; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The company's overall governance profile, including its overall responsiveness to and engagement with

shareholders.

Glass Lewis generally favors a 10-15% special meeting right. Accordingly, Glass Lewis will generally recommend voting for management or shareholder proposals that fall within this range. When faced with conflicting

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proposals, Glass Lewis will generally recommend in favor of the lower special meeting right and will recommend voting against the proposal with the higher threshold. However, in instances where there are conflicting management and shareholder proposals and a company has not established a special meeting right, Glass Lewis may recommend that shareholders vote in favor of the shareholder proposal and that they abstain from a management-proposed bylaw amendment seeking to establish a special meeting right. We believe that an abstention is appropriate in this instance in order to ensure that shareholders are sending a clear signal regarding their preference for the appropriate threshold for a special meeting right, while not directly opposing the establishment of such a right.

In cases where the company excludes a shareholder proposal seeking a reduced special meeting right by means of ratifying a management proposal that is materially different from the shareholder proposal, we will generally recommend voting against the chair or members of the governance committee.

In other instances of conflicting management and shareholder proposals, Glass Lewis will consider the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nature of the underlying issue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The benefit to shareholders of implementing the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The materiality of the differences between the terms of the shareholder proposal and management proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The context of a company's shareholder base, corporate structure and other relevant circumstances;

and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A company's overall governance profile and, specifically, its responsiveness to shareholders as

evidenced by a company's response to previous shareholder proposals and its adoption of progressive

shareholder rights provisions.

In recent years, we have seen the dynamic nature of the considerations given by the SEC when determining whether companies may exclude certain shareholder proposals. We understand that not all shareholder proposals serve the long-term interests of shareholders, and value and respect the limitations placed on shareholder proponents, as certain shareholder proposals can unduly burden companies. However, Glass Lewis believes that shareholders should be able to vote on issues of material importance.

We view the shareholder proposal process as an important part of advancing shareholder rights and encouraging responsible and financially sustainable business practices. While recognizing that certain proposals cross the line between the purview of shareholders and that of the board, we generally believe that companies should not limit investors' ability to vote on shareholder proposals that advance certain rights or promote beneficial disclosure. Accordingly, Glass Lewis will make note of instances where a company has successfully petitioned the SEC to exclude shareholder proposals. If after review we believe that the exclusion of a shareholder proposal is detrimental to shareholders, we may, in certain very limited circumstances, recommend against members of the governance committee.

Transparency and Integrity in Financial Reporting

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Auditor Ratification

The auditor's role as gatekeeper is crucial in ensuring the integrity and transparency of the financial information necessary for protecting shareholder value. Shareholders rely on the auditor to ask tough questions and to do a thorough analysis of a company's books to ensure that the information provided to shareholders is complete,

accurate, fair, and that it is a reasonable representation of a company's financial position. The only way shareholders can make rational investment decisions is if the market is equipped with accurate information about a company's fiscal health. As stated in the October 6, 2008 Final Report of the Advisory Committee on the Auditing Profession to the U.S. Department of the Treasury:

*"The auditor is expected to offer critical and objective judgment on the financial matters under consideration, and actual and perceived absence of conflicts is critical to that expectation. The Committee believes that auditors, investors, public companies, and other market participants must understand the independence requirements and their objectives, and that auditors must adopt a mindset of skepticism when facing situations that may compromise their independence."*

As such, shareholders should demand an objective, competent and diligent auditor who performs at or above professional standards at every company in which the investors hold an interest. Like directors, auditors should be free from conflicts of interest and should avoid situations requiring a choice between the auditor's interests and the public's interests. Almost without exception, shareholders should be able to annually review an

auditor's performance and to annually ratify a board's auditor selection. Moreover, in October 2008, the Advisory Committee on the Auditing Profession went even further, and recommended that "to further enhance audit committee oversight and auditor accountability ... disclosure in the company proxy statement regarding shareholder ratification [should] include the name(s) of the senior auditing partner(s) staffed on the

engagement."<sup>41</sup>

On August 16, 2011, the PCAOB issued a Concept Release seeking public comment on ways that auditor independence, objectivity and professional skepticism could be enhanced, with a specific emphasis on mandatory audit firm rotation. The PCAOB convened several public roundtable meetings during 2012 to further discuss such matters. Glass Lewis believes auditor rotation can ensure both the independence of the auditor and the integrity of the audit; we will typically recommend supporting proposals to require auditor rotation when the proposal uses a reasonable period of time (usually not less than 5-7 years), particularly at companies with a history of accounting problems.

On June 1, 2017, the PCAOB adopted new standards to enhance auditor reports by providing additional important information to investors. For companies with fiscal year end dates on or after December 15, 2017, reports were required to include the year in which the auditor began serving consecutively as the company's auditor. For large accelerated filers with fiscal year ends of June 30, 2019 or later, and for all other companies with fiscal year ends of December 15, 2020 or later, communication of critical audit matters (CAMs) will also be required. CAMs are matters that have been communicated to the audit committee, are related to accounts or

41 "Final Report of the Advisory Committee on the Auditing Profession to the U.S. Department of the Treasury." p. VIII:20,

October 6, 2008.

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disclosures that are material to the financial statements, and involve especially challenging, subjective, or complex auditor judgment.

Glass Lewis believes the additional reporting requirements are beneficial for investors. The additional disclosures can provide investors with information that is critical to making an informed judgment about an auditor's independence and performance. Furthermore, we believe the additional requirements are an important step toward enhancing the relevance and usefulness of auditor reports, which too often are seen as boilerplate compliance documents that lack the relevant details to provide meaningful insight into a particular audit.

Voting Recommendations on Auditor Ratification

We generally support management's choice of auditor except when we believe the auditor's independence or audit integrity has been compromised. Where a board has not allowed shareholders to review and ratify an auditor, we typically recommend voting against the audit committee chair. When there have been material restatements of annual financial statements or material weaknesses in internal controls, we usually recommend voting against the entire audit committee.

Reasons why we may not recommend ratification of an auditor include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When audit fees plus audit-related fees total less than the tax fees and/or other non-audit fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recent material restatements of annual financial statements, including those resulting in the reporting of material weaknesses in internal controls and including late filings by the company where the auditor bears some responsibility for the restatement or late filing[.](#iea245be9574c4fa4ae4e29d2a2aa05f4_163)<sup>42</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When the auditor performs prohibited services such as tax-shelter work, tax services for the CEO or CFO, or contingent-fee work, such as a fee based on a percentage of economic benefit to the company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When audit fees are excessively low, especially when compared with other companies in the same industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When the company has aggressive accounting policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When the company has poor disclosure or lack of transparency in its financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Where the auditor limited its liability through its contract with the company or the audit contract requires the corporation to use alternative dispute resolution procedures without adequate justification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We also look for other relationships or concerns with the auditor that might suggest a conflict between

the auditor's interests and shareholder interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In determining whether shareholders would benefit from rotating the company's auditor, where

relevant we will consider factors that may call into question an auditor's effectiveness, including auditor tenure, a pattern of inaccurate audits, and any ongoing litigation or significant controversies. When Glass Lewis considers ongoing litigation and significant controversies, it is mindful that such matters may involve unadjudicated allegations. Glass Lewis does not assume the truth of such allegations or that the

42 An auditor does not audit interim financial statements. Thus, we generally do not believe that an auditor should be opposed due to a restatement of interim financial statements unless the nature of the misstatement is clear from a reading of the incorrect financial statements.

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law has been violated. Instead, Glass Lewis focuses more broadly on whether, under the particular facts and circumstances presented, the nature and number of such lawsuits or other significant controversies reflects on the risk profile of the company or suggests that appropriate risk mitigation measures may be warranted."

Pension Accounting Issues

A pension accounting question occasionally raised in proxy proposals is what effect, if any, projected returns on employee pension assets should have on a company's net income. This issue often arises in the executive- compensation context in a discussion of the extent to which pension accounting should be reflected in business performance for purposes of calculating payments to executives.

Glass Lewis believes that pension credits should not be included in measuring income that is used to award performance-based compensation. Because many of the assumptions used in accounting for retirement plans

are subject to the company's discretion, management would have an obvious conflict of interest if pay were tied to pension income. In our view, projected income from pensions does not truly reflect a company's performance.

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The Link Between Compensation and Performance

Glass Lewis carefully reviews the compensation awarded to senior executives, as we believe that this is an

important area in which the board's priorities are revealed. Glass Lewis strongly believes executive compensation should be linked directly with the performance of the business the executive is charged with managing. We believe the most effective compensation arrangements provide for an appropriate mix of performance-based short- and long-term incentives in addition to fixed pay elements while promoting a prudent and sustainable level of risk-taking.

Glass Lewis believes that comprehensive, timely and transparent disclosure of executive pay is critical to allowing shareholders to evaluate the extent to which pay is aligned with company performance. When reviewing proxy materials, Glass Lewis examines whether the company discloses the performance metrics used to determine executive compensation. We recognize performance metrics must necessarily vary depending on the company and industry, among other factors, and may include a wide variety of financial measures as well as industry-specific performance indicators. However, we believe companies should disclose why the specific performance metrics were selected and how the actions they are designed to incentivize will lead to better corporate performance.

Moreover, it is rarely in shareholders' interests to disclose competitive data about individual salaries below the senior executive level. Such disclosure could create internal personnel discord that would be counterproductive for the company and its shareholders. We do not believe shareholders need or will benefit from detailed reports about individual management employees other than the most senior executives.

Advisory Vote on Executive Compensation (Say-on-Pay)

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") required most companies to hold an advisory vote on executive compensation at the first shareholder meeting that occurs six months after enactment of the bill (January 21, 2011).

This practice of allowing shareholders a non-binding vote on a company's compensation report is standard practice in many non-U.S. countries, and has been a requirement for most companies in the United Kingdom since 2003 and in Australia since 2005. Although say-on-pay proposals are non-binding, a high level of

"against" or "abstain" votes indicates substantial shareholder concern about a company's compensation policies

and procedures.

Given the complexity of most companies' compensation programs, Glass Lewis applies a highly nuanced

approach when analyzing advisory votes on executive compensation. We review each company's compensation on a case-by-case basis, recognizing that each company must be examined in the context of industry, size, maturity, performance, financial condition, its historic pay for performance practices, and any other relevant internal or external factors.

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We believe that each company should design and apply specific compensation policies and practices that are appropriate to the circumstances of the company and, in particular, will attract and retain competent executives and other staff, while motivating them to grow the company's long-term shareholder value.

Where we find those specific policies and practices serve to reasonably align compensation with performance, and such practices are adequately disclosed, Glass Lewis will recommend supporting the company's approach. If, however, those specific policies and practices fail to demonstrably link compensation with performance, Glass Lewis will generally recommend voting against the say-on-pay proposal.

Glass Lewis reviews say-on-pay proposals on both a qualitative basis and a quantitative basis, with a focus on several main areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The overall design and structure of the company's executive compensation programs including selection

and challenging nature of performance metrics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The implementation and effectiveness of the company's executive compensation programs including

pay mix and use of performance metrics in determining pay levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The quality and content of the company's disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The quantum paid to executives; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The link between compensation and performance as indicated by the company's current and past pay- for-performance grades.

We also review any significant changes or modifications, including post fiscal year-end changes and one-time awards, particularly where the changes touch upon issues that are material to Glass Lewis recommendations. Additionally, while we recognize their rarity in the U.S. market, beneficial features such as but not limited to post-vesting and/or post-retirement holding requirements may be viewed positively in our holistic analysis.

Say-on-Pay Voting Recommendations

In cases where we find deficiencies in a company's compensation program's design, implementation or management, we will recommend that shareholders vote against the say-on-pay proposal. Generally, such instances include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evidence of a pattern of poor pay-for-performance practices (e.g., deficient or failing pay-for- performance grades or a misalignment between incentive payouts and the shareholder experience),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unclear or questionable disclosure regarding the overall compensation structure (e.g., limited information regarding benchmarking processes, limited rationale for bonus performance metrics and targets, etc.),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Questionable adjustments to certain aspects of the overall compensation structure (e.g., limited rationale for significant changes to performance targets or metrics, the payout of guaranteed bonuses or sizable retention grants, etc.), and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other egregious compensation practices.

Glass Lewis approaches its analysis of executive compensation programs on a case-by-case basis. Glass Lewis reviews all factors related to named executive officer compensation, including quantitative analyses, structural features, the presence of effective best practice policies, disclosure quality and trajectory-related factors. Except for particularly egregious pay decisions and practices, no one factor would ordinarily lead to an unfavorable

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recommendation without a review of the company's rationale and/or the influence of such decisions or

practices on other aspects of the pay program, most notably the company's ability to align executive pay with

performance and the shareholder experience.

Although not an exhaustive list, the following factors are viewed negatively. When weighed together, they may cause Glass Lewis to recommend voting against a say-on-pay vote:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inappropriate or outsized self-selected peer groups and/or benchmarking issues such as compensation targets set well above the median without adequate justification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Egregious or excessive bonuses, equity awards, perquisites or severance payments, including golden handshakes and golden parachutes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Insufficient response to low shareholder support;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Problematic contractual payments, such as guaranteed bonuses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjustments to performance results that lead to problematic pay outcomes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Insufficiently challenging performance targets and/or high potential payout opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance targets lowered without justification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Discretionary bonuses paid when short- or long-term incentive plan targets were not met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• High executive pay relative to peers that is not justified by outstanding company performance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The terms of the long-term incentive plans are inappropriate (please see "Long-Term Incentives").

The aforementioned issues influence Glass Lewis' assessment of the structure of a company's compensation program. We evaluate structure on a "Good, Fair, Poor" rating scale whereby a "Good" rating represents a compensation program with little to no concerns and market-leading practices, a "Fair" rating represents a compensation program with some concerns but general adherence to best practices and a "Poor" rating represents a compensation program that deviates significantly from best practice or contains one or more egregious compensation practices.

We believe that it is important for companies to provide investors with clear and complete disclosure of all the significant terms of compensation arrangements. Similar to structure, we evaluate disclosure on a "Good, Fair, Poor" rating scale. A "Good" rating represents a thorough discussion of all elements of compensation with rationale. A "Fair" rating represents an adequate discussion of all or most elements of compensation with rationale. A "Poor" rating represents an incomplete or absent discussion of compensation. In instances where a company has simply failed to provide sufficient disclosure of its policies, we may recommend shareholders vote against this proposal solely on this basis, regardless of the appropriateness of compensation levels. Glass Lewis understands that regulatory disclosure rules such as smaller reporting company disclosure standards may condone the omission of key executive compensation information. However, we believe that companies should provide sufficient information in the proxy statement to enable shareholders to vote in an informed manner.

In general, most companies will fall within the "Fair" range for both structure and disclosure, and Glass Lewis largely uses the "Good" and "Poor" ratings to highlight outliers.

Where we identify egregious compensation practices, we may also recommend voting against the compensation committee based on the practices or actions of its members during the year. Such practices may include approving large one-off payments, the inappropriate, unjustified use of discretion, or sustained poor pay for performance practices. (Refer to the section on "Compensation Committee Performance" for more information.)

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Company Responsiveness

When companies receive a significant level of shareholder opposition to a say-on-pay proposal, which occurs when more than 20% of votes on the proposal are cast as AGAINST and/or ABSTAIN, we believe the board should demonstrate a commensurate level of engagement and responsiveness to the concerns behind the disapproval, with a particular focus on responding to shareholder feedback. When assessing the level of opposition to say-on-pay proposals, we may further examine the level of opposition among disinterested shareholders as an independent group. While we recognize that sweeping changes cannot be made to a compensation program without due consideration, and that often a majority of shareholders may have voted in favor of the proposal, given that the average approval rate for say-on-pay proposals is about 90%, we believe the compensation committee should demonstrate in its proxy statement a level of response to a significant vote against. In general, our expectations regarding the minimum appropriate levels of responsiveness will correspond with the level of shareholder opposition, as expressed both through the magnitude of opposition in a single year, and through the persistence of shareholder disapproval over time.

Responses we consider appropriate include engaging with large shareholders, especially dissenting shareholders, to identify their concerns, and, where reasonable, implementing changes and/or making commitments that directly address those concerns within the company's compensation program. In cases where particularly egregious pay decisions caused the say on pay proposal to fail, Glass Lewis will closely consider whether any changes were made directly relating to the pay decision that may address structural concerns that shareholders have. In the absence of any evidence in the disclosure that the board is actively engaging shareholders on these issues and responding accordingly, we may recommend holding compensation committee members accountable for failing to adequately respond to shareholder opposition. Regarding such recommendations, careful consideration will be given to the level of shareholder protest and the severity and history of compensation practices.

Pay for Performance

Glass Lewis believes an integral part of a well-structured compensation package is a successful link between pay and performance. Our proprietary pay-for-performance model, which serves as our primary quantitative analysis, was developed to better evaluate the link between pay and performance. Generally, compensation and performance are measured against a peer group of appropriate companies that may overlap, to a certain extent, with a company's self-disclosed peers. This quantitative analysis provides a consistent framework and historical context for our clients to determine how well companies link executive compensation to relative performance. Companies that demonstrate a weaker link are more likely to receive a negative recommendation; however, other qualitative factors such as overall incentive structure, significant forthcoming changes to the compensation program or reasonable long-term payout levels may mitigate our concerns to a certain extent.

While we assign companies a letter grade of A, B, C, D or F based on the alignment between pay and performance under our primary model, the grades derived from the Glass Lewis pay-for-performance analysis do not follow the traditional U.S. school letter grade system. Rather, the grades are generally interpreted as follows:

**Grade of A**: The company's percentile rank for pay is significantly less than its percentile rank for performance

**Grade of B**: The company's percentile rank for pay is moderately less than its percentile rank for performance

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**Grade of C**: The company's percentile rank for pay is approximately aligned with its percentile rank for

performance

**Grade of D**: The company's percentile rank for pay is higher than its percentile rank for performance

**Grade of F**: The company's percentile rank for pay is significantly higher than its percentile rank for performance

Separately, a specific comparison between the company's executive pay and its peers' executive pay levels may be discussed in the analysis for additional insight into the grade. Likewise, a specific comparison between the company's performance and its peers' performance is reflected in the analysis for further context.

We use this analysis to inform our voting decisions on say-on-pay proposals. If a company receives a "D" or "F" from our proprietary model, we are more likely to recommend that shareholders vote against the say-on-pay proposal. However, important supplemental quantitative factors like analyses of realized pay levels and the "compensation actually paid" data mandated by the SEC's 2022 final rule regarding pay versus performance may be considered, and other qualitative factors such as an effective overall incentive structure, the relevance of selected performance metrics, significant forthcoming enhancements or reasonable long-term payout levels may give us cause to recommend in favor of a proposal even when we have identified a disconnect between pay and performance.

In determining the peer groups used in our pay-for-performance letter grades, Glass Lewis utilizes a proprietary methodology that considers both market and industry peers, along with each company's self-disclosed peers and peers of those company-disclosed peers. Each component is considered on a weighted basis and is subject to size-based ranking and screening. Since the peer group used is based on an independent, proprietary technique, it will often differ from the one used by the company which, in turn, will affect the resulting analyses. While Glass Lewis believes that the independent, rigorous methodology it uses provides a valuable perspective on the company's compensation program, the company's self-selected peer group may also presented in the Proxy Paper for comparative purposes and for supplemental analyses.

Short-Term Incentives

A short-term bonus or incentive (STI) should be demonstrably tied to performance. Whenever possible, we believe a mix of corporate and individual performance measures is appropriate. We would normally expect performance measures for STI plans to be based on company-wide or divisional financial measures as well as non-financial, qualitative or non-formulaic factors such as those related to safety, environmental issues, and customer satisfaction when they are material to the company's overall health. While we recognize that companies operating in different sectors or markets may seek to utilize a wide range of metrics, we expect such measures to be appropriately tied to a company's business drivers.

Further, the threshold, target and maximum performance goals and corresponding payout levels that can be achieved under STI plans should be disclosed. Shareholders should expect stretching performance targets for the maximum award to be achieved. Any increase in the potential target and maximum award should be clearly justified to shareholders, as should any decrease in target and maximum performance levels from the previous year.

Glass Lewis recognizes that disclosure of some measures or performance targets may include commercially confidential information. Therefore, we believe it may be reasonable to exclude such information in some cases

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as long as the company provides sufficient justification for non-disclosure. However, where a short-term bonus has been paid, companies should disclose the extent to which performance has been achieved against relevant targets, including disclosure of the actual target achieved.

Where management has received significant short-term incentive payments but overall performance and/or the shareholder experience over the measurement year prima facie appears to be poor or negative, we believe the company should provide a clear explanation of why these significant short-term payments were made. We also believe any significant changes to the program structure should be accompanied by rationalizing disclosure.

Further, where a company has applied upward discretion, which includes lowering goals mid-year, increasing calculated payouts or retroactively pro-rating performance periods, we expect a robust discussion of why the decision was necessary.

Adjustments to GAAP figures may be considered in Glass Lewis' assessment of the effectiveness of the incentive at tying executive pay with performance. We believe that where companies use non-GAAP or bespoke metrics, clear reconciliations between these figures and GAAP figures in audited financial statements should be provided. Moreover, Glass Lewis believes that in circumstances where significant adjustments were applied to performance results, thorough, detailed discussion of adjustments akin to a GAAP-to-non-GAAP reconciliation and their impact on payouts within the proxy statement is warranted. The absence of such enhanced disclosure for significant adjustments will impact Glass Lewis' assessment of the quality of disclosure and, in turn, may play a role in the overall recommendation for the advisory vote on executive compensation.

Glass Lewis recognizes the importance of the compensation committee's prudent and responsible exercise of discretion over incentive pay outcomes to account for significant, material events that would otherwise be excluded from performance results of selected metrics of incentive programs. For instance, litigation settlement charges are typically removed from non-GAAP results before the determination of formulaic incentive payouts, or health and safety failures may not be reflected in performance results where companies do not expressly include health and safety metrics in incentive plans. Such events may nevertheless be consequential to corporate performance results, impact the shareholder experience, and, in some cases, may present material risks. Conversely, certain events may adversely impact formulaic payout results despite being outside executives' control. We believe that companies should provide thorough discussion of how such events were considered in the committee's decisions to exercise discretion over incentive payouts.

We do not generally recommend against a pay program due to the use of a non-formulaic plan. If a company has chosen to rely primarily on a subjective assessment or the board's discretion in determining short-term bonuses, we believe that the proxy statement should provide a meaningful discussion of the board's rationale in determining the bonuses paid as well as a rationale for the use of a non-formulaic mechanism. Particularly where the aforementioned disclosures are substantial and satisfactory, such a structure will not provoke serious concern in our analysis on its own. However, in conjunction with other significant issues in a program's design or operation, such as a disconnect between pay and performance, the absence of a cap on payouts, or a lack of performance-based long-term awards, the use of a non-formulaic bonus may help drive a negative recommendation.

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Long-Term Incentives

Glass Lewis recognizes the value of equity-based incentive programs, which are often the primary long-term incentive for executives. When used appropriately, they can provide a vehicle for linking an executive's pay to company performance, thereby aligning their interests with those of shareholders. In addition, equity-based compensation can be an effective way to attract, retain and motivate key employees.

There are certain elements that Glass Lewis believes are common to most well-structured long-term incentive (LTI) plans. These include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No re-testing or lowering of performance conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance metrics that cannot be easily manipulated by management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Two or more performance metrics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• At least one relative performance metric that compares the company's performance to a relevant peer

group or index;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance periods of at least three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stretching metrics that incentivize executives to strive for outstanding performance while not encouraging excessive risk-taking;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reasonable individual award limits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Equity granting practices that are clearly disclosed and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Additional post-vesting holding periods to encourage long-term executive share ownership.

In evaluating long-term incentive grants, Glass Lewis generally believes that at least half of the grant should consist of performance-based awards, putting a material portion of executive compensation at-risk and demonstrably linked to the performance of the company. While we will consistently raise concern with programs that do not meet this criterion, we may refrain from a negative recommendation in the absence of other significant issues with the program's design or operation. However, in cases where performance-based

awards are significantly rolled back or eliminated from a company's long-term incentive plan, such decisions will generally be viewed negatively outside of exceptional circumstances. Given the reduction in rigor and

accountability in the pay program, Glass Lewis will assess the revision's impact on the pay program's ability to align executive pay with performance and shareholder experience; programs that fail our assessment may receive an unfavorable recommendation. They may also lead to an unfavorable recommendation from Glass Lewis if the change is not offset by meaningful revisions such as to pay quantum and vesting periods, particularly in the absence of cogent rationale.

As with the short-term incentive, Glass Lewis recognizes the importance of the compensation committee's judicious and responsible exercise of discretion over incentive pay outcomes to account for significant events that would otherwise be excluded from performance results of selected metrics of incentive programs. We believe that companies should provide thorough discussion of how such events were considered in the committee's decisions to exercise discretion or refrain from applying discretion over incentive pay outcomes. Furthermore, considerations related to the use of non-GAAP metrics under the STI plan similarly apply to the long-term incentive program.

Performance measures should be carefully selected and should relate to the specific business/industry in which

the company operates and, especially, to the key value drivers of the company's business. As with short-term

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incentive plans, the basis for any adjustments to metrics or results should be clearly explained, as should the

company's judgment on the use of discretion and any significant changes to the performance program structure.

While cognizant of the inherent complexity of certain performance metrics, Glass Lewis generally believes that measuring a company's performance with multiple metrics serves to provide a more complete picture of the company's performance than a single metric. Further, reliance on just one metric may focus too much management attention on a single target and is therefore more susceptible to manipulation. When utilized for relative measurements, external benchmarks such as a sector index or peer group should be disclosed and transparent. The rationale behind the selection of a specific index or peer group should also be disclosed.

Internal performance benchmarks should also be disclosed and transparent, unless a cogent case for confidentiality is made and fully explained. Similarly, actual performance and vesting levels for previous grants earned during the fiscal year should be disclosed.

We also believe shareholders should evaluate the relative success of a company's compensation programs, particularly with regard to existing equity-based incentive plans, in linking pay and performance when evaluating potential changes to LTI plans and determining the impact of additional stock awards. We will therefore review the company's pay-for-performance analyses (see above for more information) and specifically the proportion of total compensation that is stock-based.

Grants of Front-Loaded Awards

Many U.S. companies have chosen to provide large grants, usually in the form of equity awards, that are intended to serve as compensation for multiple years. This practice, often called front-loading, is taken up either in the regular course of business or as a response to specific business conditions and with a predetermined objective. The so-called "mega-grant", an outsized award to one individual sometimes valued at over $100 million is sometimes but not always provided as a front-loaded award. We believe shareholders should generally be wary of this granting approach, and we accordingly weigh these grants with particular scrutiny.

While the use of front-loaded awards is intended to lock-in executive service and incentives, the same rigidity also raises the risk of effectively tying the hands of the compensation committee. As compared with a more responsive annual granting schedule program, front-loaded awards may preclude improvements or changes to reflect evolving business strategies or to respond to other unforeseen factors. Additionally, if structured poorly, early vesting of such awards may reduce or eliminate the retentive power at great cost to shareholders. The considerable emphasis on a single grant can place intense pressures on every facet of its design, amplifying any potential perverse incentives and creating greater room for unintended consequences. In particular, provisions around changes of control or separations of service must ensure that executives do not receive excessive payouts that do not reflect shareholder experience or company performance.

We consider a company's rationale for granting awards under this structure and also expect any front-loaded awards to include a firm commitment not to grant additional awards for a defined period, as is commonly associated with this practice. Even when such a commitment is provided, unexpected circumstances may lead the board to make additional payments or awards for retention purposes, or to incentivize management towards more realistic goals or a revised strategy. If a company breaks its commitment not to grant further awards, we may recommend against the pay program unless a convincing rationale is provided. The multiyear nature of these awards generally lends itself to significantly higher compensation figures in the year of grant

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than might otherwise be expected. In our qualitative analysis of the grants of front-loaded awards to executives, Glass Lewis considers the quantum of the award on an annualized basis and may compare this result to the prior practice and peer data, among other benchmarks. Additionally, for awards that are granted in the form of equity, Glass Lewis may consider the total potential dilutive effect of such award on shareholders.

In situations where the front-loaded award was meant to cover a certain portion of the regular long-term incentive grant for each year during the covered period, our analysis of the value of the remaining portion of the regular long-term incentives granted during the period covered by the award will account for the annualized value of the front-loaded portion, and we expect no supplemental grant be awarded during the vesting period of the front-loaded portion.

Linking Executive Pay to Environmental and Social Criteria

Glass Lewis believes that explicit environmental and/or social (E&S) criteria in executive incentive plans, when used appropriately, can serve to provide both executives and shareholders a clear line of sight into a company's ESG strategy, ambitions, and targets. Although we are strongly supportive of companies' incorporation of material E&S risks and opportunities in their long-term strategic planning, we believe that the inclusion of E&S metrics in compensation programs should be predicated on each company's unique circumstances. In order to establish a meaningful link between pay and performance, companies must consider factors including their industry, size, risk profile, maturity, performance, financial condition, and any other relevant internal or external factors.

When a company is introducing E&S criteria into executive incentive plans, we believe it is important that companies provide shareholders with sufficient disclosure to allow them to understand how these criteria align withtheir strategies. Additionally, Glass Lewis recognizes that there may be situations where certain E&S performance criteria are reasonably viewed as prerequisites for executive performance, as opposed to behaviors and conditions that need to be incentivized. For example, we believe that shareholders should interrogate the use of metrics that award executives for ethical behavior or compliance with policies and regulations. It is our view that companies should provide shareholders with disclosures that clearly lay out the rationale for selecting specific E&S metrics, the target-setting process, and corresponding payout opportunities. Further, particularly in the case of qualitative metrics, we believe that shareholders should be provided with a clear understanding of the basis on which the criteria will be assessed. Where quantitative targets have been set, we believe that shareholders are best served when these are disclosed on an ex-ante basis, or the board should outline why it believes it is unable to do so.

While we believe that companies should generally set long-term targets for their environmental and social ambitions, we are mindful that not all compensation schemes lend themselves to the inclusion of E&S metrics. We also are of the view that companies should retain flexibility in not only choosing to incorporate E&S metrics in their compensation plans, but also in the placement of these metrics. For example, some companies may resolve that including E&S criteria in the annual bonus may help to incentivize the achievement of short-term milestones and allow for more maneuverability in strategic adjustments to long-term goals. Other companies may determine that their long-term sustainability targets are best achieved by incentivizing executives through metrics included in their long-term incentive plans.

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One-Time Awards

Glass Lewis believes shareholders should generally be wary of awards granted outside of the standard incentive schemes, as such awards have the potential to undermine the integrity of a company's regular incentive plans or the link between pay and performance, or both. We generally believe that if the existing incentive programs fail to provide adequate incentives to executives, companies should redesign their compensation programs rather than make additional grants.

However, Glass Lewis reviews grants of supplemental awards on a case-by-case, company-by-company basis to give adequate consideration for unique circumstances. Companies should provide a thorough description of the awards, including a cogent and convincing explanation of their necessity and why existing awards do not provide sufficient motivation and a discussion of how the quantum of the award and its structure were determined.

Further, such awards should be tied to future service and performance whenever possible.

Additionally, we believe companies making supplemental or one-time awards should also describe if and how the regular compensation arrangements will be affected by these additional grants. In reviewing a company's use of supplemental awards, Glass Lewis will evaluate the terms and size of the grants in the context of the company's overall incentive strategy and granting practices, as well as the current operating environment.

Contractual Payments and Arrangements

Beyond the quantum of contractual payments, Glass Lewis will also consider the design of any entitlements. Certain executive employment terms may help to drive a negative recommendation, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Excessively broad change in control triggers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inappropriate severance entitlements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inadequately explained or excessive sign-on arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Guaranteed bonuses (especially as a multiyear occurrence); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Failure to address any concerning practices in amended employment agreements.

In general, we are wary of terms that are excessively restrictive in favor of the executive, or that could

potentially incentivize behaviors that are not in a company's best interest.

Sign-on Awards and Severance Benefits

We acknowledge that there may be certain costs associated with transitions at the executive level. In evaluating the size of severance and sign-on arrangements, we may consider the executive's regular target compensation level, or the sums paid to other executives (including the recipient's predecessor, where applicable) in evaluating the appropriateness of such an arrangement.

We believe sign-on arrangements should be clearly disclosed and accompanied by a meaningful explanation of the payments and the process by which the amounts were reached. Further, the details of and basis for any "make-whole" payments (paid as compensation for awards forfeited from a previous employer) should be provided.

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With respect to severance, we believe companies should abide by predetermined payouts in most circumstances. While in limited circumstances some deviations may not be inappropriate, we believe shareholders should be provided with a meaningful explanation of any additional or increased benefits agreed upon outside of regular arrangements. However, where Glass Lewis determines that such predetermined payouts are particularly problematic or unfavorable to shareholders, we may consider the execution of such payments in a negative recommendation for the advisory vote on executive compensation.

In the U.S. market, most companies maintain severance entitlements based on a multiple of salary and, in many cases, bonus. In almost all instances we see, the relevant multiple is three or less, even in the case of a change in control. We believe the basis and total value of severance should be reasonable and should not exceed the upper limit of general market practice. We consider the inclusion of long-term incentives in cash severance calculations to be inappropriate, particularly given the commonality of accelerated vesting and the proportional weight of long-term incentives as a component of total pay. Additional considerations, however, will be accounted for when reviewing atypically structured compensation approaches.

Change in Control

Glass Lewis considers double-trigger change in control arrangements, which require both a change in control and termination or constructive termination, to be best practice. Any arrangement that is not explicitly double- trigger may be considered a single-trigger or modified single-trigger arrangement. Companies that allow for committee discretion over the treatment of unvested awards should commit to providing clear rationale for the committee's ultimate decision as to how such awards should be treated in the event a change in control occurs.

Further, we believe that excessively broad definitions of change in control are potentially problematic as they may lead to situations where executives receive additional compensation where no meaningful change in status or duties has occurred.

Excise Tax Gross-ups

Among other entitlements, Glass Lewis is strongly opposed to excise tax gross-ups related to IRC § 4999 and their expansion, especially where no consideration is given to the safe harbor limit. We believe that under no normal circumstance is the inclusion of excise tax gross-up provisions in new agreements or the addition of such provisions to amended agreements acceptable. In consideration of the fact that minor increases in change-in- control payments can lead to disproportionately large excise taxes, the potential negative impact of tax gross- ups far outweighs any retentive benefit.

Depending on the circumstances, the addition of new gross-ups around this excise tax may lead to negative

recommendations for a company's say-on-pay proposal, the chair of the compensation committee, or the entire committee, particularly in cases where a company had committed not to provide any such entitlements in the future. For situations in which the addition of new excise tax gross ups will be provided in connection with a specific change-in-control transaction, this policy may be applied to the say-on-pay proposal, the golden parachute proposal and recommendations related to the compensation committee for all involved corporate parties, as appropriate.

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Amended Employment Agreements

Any contractual arrangements providing for problematic pay practices which are not addressed in materially amended employment agreements will potentially be viewed by Glass Lewis as a missed opportunity on the part of the company to align its policies with current best practices. Such problematic pay practices include, but are not limited to, excessive change in control entitlements, modified single-trigger change in control entitlements, excise tax gross-ups, and multi-year guaranteed awards.

Recoupment Provisions (Clawbacks)

On October 26, 2022, the SEC adopted Rule 10D-1 under the Securities Exchange Act of 1934. The rule mandates national securities exchanges and associations to promulgate new listing standards requiring companies to

maintain recoupment policies ("clawback provisions"). The final clawback listing standards were approved by the SEC, effective October 2, 2023 and required listed companies to adopt a compliant policy by December 1, 2023. Glass Lewis believes that clawback provisions play an important role in mitigating excessive risk-taking that may be encouraged by poorly structured variable incentive programs. Current listing standards require recoupment of erroneously awarded payouts to current and former executive officers in the event of an accounting restatement or correction to previous financial statements that is material to the current period, regardless of fault or misconduct.

Glass Lewis recognizes that excessive risk-taking that can materially and adversely impact shareholders may not necessarily result in such restatements. We believe that clawback policies should allow recovery from current and former executive officers in the event of a restatement of financial results or similar revision of performance indicators upon which the awards were based. Additionally, recoupment policies should provide companies with the ability to claw back variable incentive payments (whether time-based or performance-based) when there is evidence of problematic decisions or actions, such as material misconduct, a material reputational failure, material risk management failure, or a material operational failure, the consequences of which have not already been reflected in incentive payments and where recovery is warranted.

In situations where the company ultimately determines not to follow through with recovery, Glass Lewis will assess the appropriateness of such determination for each case. A thorough, detailed discussion of the company's decision to not pursue recoupment and, if applicable, how the company has otherwise rectified the disconnect between executive pay outcomes and negative impacts of their actions on the company and the shareholder experience will be considered. The absence of such enhanced disclosure may impact Glass Lewis' assessment of the quality of disclosure and, in turn, may play a role in Glass Lewis' overall recommendation for the advisory vote on executive compensation. The clawback policy should provide recoupment authority regardless of whether the employment of the executive officer was terminated with or without cause.

Hedging of Stock

Glass Lewis believes that the hedging of shares by executives in the shares of the companies where they are employed severs the alignment of interests of the executive with shareholders. We believe companies should adopt strict policies to prohibit executives from hedging the economic risk associated with their share ownership in the company.

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Pledging of Stock

Glass Lewis believes that shareholders should examine the facts and circumstances of each company rather than apply a one-size-fits-all policy regarding employee stock pledging. Glass Lewis believes that shareholders benefit when employees, particularly senior executives, have meaningful financial interest in the success of the company under their management, and therefore we recognize the benefits of measures designed to encourage employees to both buy shares out of their own pocket and to retain shares they have been granted; blanket policies prohibiting stock pledging may discourage executives and employees from doing either.

However, we also recognize that the pledging of shares can present a risk that, depending on a host of factors, an executive with significant pledged shares and limited other assets may have an incentive to take steps to avoid a forced sale of shares in the face of a rapid stock price decline. Therefore, to avoid substantial losses from a forced sale to meet the terms of the loan, the executive may have an incentive to boost the stock price in the short term in a manner that is unsustainable, thus hurting shareholders in the long-term. We also recognize

concerns regarding pledging may not apply to less senior employees, given the latter group's significantly more

limited influence over a company's stock price. Therefore, we believe that the issue of pledging shares should be reviewed in that context, as should policies that distinguish between the two groups.

Glass Lewis believes that the benefits of stock ownership by executives and employees may outweigh the risks of stock pledging, depending on many factors. As such, Glass Lewis reviews all relevant factors in evaluating proposed policies, limitations and prohibitions on pledging stock, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The number of shares pledged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The percentage executives' pledged shares are of outstanding shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The percentage executives' pledged shares are of each executive's shares and total assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether the pledged shares were purchased by the employee or granted by the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether there are different policies for purchased and granted shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether the granted shares were time-based or performance-based;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The overall governance profile of the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The volatility of the company's stock (in order to determine the likelihood of a sudden stock price drop);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nature and cyclicality, if applicable, of the company's industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The participation and eligibility of executives and employees in pledging;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The company's current policies regarding pledging and any waiver from these policies for employees

and executives; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disclosure of the extent of any pledging, particularly among senior executives.

Executive Ownership Guidelines

The alignment between shareholder interests and those of executives helps to ensure that executives are acting in the best long-term interests of disinterested shareholders. Companies should facilitate this relationship through the adoption and enforcement of meaningful minimum executive share ownership requirements.

Companies should clearly disclose their executive ownership requirements in their Compensation Discussion and Analysis section and how the various types of outstanding equity awards are counted or excluded from the ownership level calculation.

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In determining whether executives have met the requirements or not, the inclusion of unearned performance- based full value awards and/or unexercised stock options without cogent rationale may be viewed as problematic. While Glass Lewis views the inclusion of unearned performance-based equity in the ownership determination renders executive share ownership policies less effective, we continue to believe that performance-based equity compensation plays an important role in the separate issue of aligning executive pay with performance.

Compensation Consultant Independence

As mandated by Section 952 of the Dodd-Frank Act, as of January 11, 2013, the SEC approved listing requirements for both the NYSE and NASDAQ which require compensation committees to consider six factors (https://www.sec.gov/rules/final/2012/33-9330.pdf, p.31-32) in assessing compensation advisor independence. According to the SEC, "no one factor should be viewed as a determinative factor." Glass Lewis believes this six- factor assessment is an important process for every compensation committee to undertake but believes companies employing a consultant for board compensation, consulting and other corporate services should provide clear disclosure beyond just a reference to examining the six points, in order to allow shareholders to review the specific aspects of the various consultant relationships.

We believe compensation consultants are engaged to provide objective, disinterested, expert advice to the compensation committee. When the consultant or its affiliates receive substantial income from providing other services to the company, we believe the potential for a conflict of interest arises and the independence of the consultant may be jeopardized. Therefore, Glass Lewis will, when relevant, note the potential for a conflict of interest when the fees paid to the advisor or its affiliates for other services exceed those paid for compensation consulting.

CEO Pay Ratio

As mandated by Section 953(b) of the Dodd-Frank Wall Street Consumer and Protection Act, beginning in 2018, issuers will be required to disclose the median annual total compensation of all employees except the CEO, the total annual compensation of the CEO or equivalent position, and the ratio between the two amounts. Glass Lewis will display the pay ratio as a data point in our Proxy Papers, as available. While we recognize that the pay ratio has the potential to provide additional insight when assessing a company's pay practices, at this time it will not be a determinative factor in our voting recommendations. On the other hand, we believe the underlying data may help shareholders evaluate the rationale for certain executive pay decisions such as increases in fixed pay levels.

Frequency of Say-on-Pay

The Dodd-Frank Act also requires companies to allow shareholders a non-binding vote on the frequency of say- on-pay votes (i.e., every one, two or three years). Additionally, Dodd-Frank requires companies to hold such votes on the frequency of say-on-pay votes at least once every six years.

We believe companies should submit say-on-pay votes to shareholders every year. We believe that the time and financial burdens to a company with regard to an annual vote are relatively small and incremental and are

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outweighed by the benefits to shareholders through more frequent accountability. Implementing biannual or triennial votes on executive compensation limits shareholders' ability to hold the board accountable for its compensation practices through means other than voting against the compensation committee. Unless a company provides a compelling rationale or unique circumstances for say-on-pay votes less frequent than annually, we will generally recommend that shareholders support annual votes on compensation.

Vote on Golden Parachute Arrangements

The Dodd-Frank Act also requires companies to provide shareholders with a separate non-binding vote on approval of golden parachute compensation arrangements in connection with certain change-in-control transactions. However, if the golden parachute arrangements have previously been subject to a say-on-pay vote which shareholders approved, then this required vote is waived.

Glass Lewis believes the narrative and tabular disclosure of golden parachute arrangements benefits all shareholders. Glass Lewis analyzes each golden parachute arrangement on a case-by-case basis, taking into account, among other items: the nature of the change-in-control transaction, the ultimate value of the payments particularly compared to the value of the transaction, any excise tax gross-up obligations, the tenure and position of the executives in question before and after the transaction, any new or amended employment agreements entered into in connection with the transaction, and the type of triggers involved (i.e., single vs. double). In cases where new problematic features, such as excise tax gross-up obligations or new and excessive single-trigger entitlements, are introduced in a golden parachute proposal, such features may contribute to a negative recommendation not only for the golden parachute proposal under review, but for the next say-on-pay proposal of any involved corporate parties, as well as recommendations against their compensation committee as appropriate.

Equity-Based Compensation Proposals

We believe that equity compensation awards, when not abused, are useful for retaining employees and providing an incentive for them to act in a way that will improve company performance. Glass Lewis recognizes that equity-based compensation plans are critical components of a company's overall compensation program, and we analyze such plans accordingly based on both quantitative and qualitative factors.

Our quantitative analysis assesses the plan's cost and the company's pace of granting utilizing a number of different analyses, comparing the program with absolute limits we believe are key to equity value creation and with a carefully chosen peer group. In general, our model seeks to determine whether the proposed plan is either absolutely excessive or is more than one standard deviation away from the average plan for the peer group on a range of criteria, including dilution to shareholders and the projected annual cost relative to the company's financial performance. Each of the analyses (and their constituent parts) is weighted and the plan is scored in accordance with that weight.

We compare the program's expected annual expense with the business's operating metrics to help determine whether the plan is excessive in light of company performance. We also compare the plan's expected annual cost to the enterprise value of the firm rather than to market capitalization because the employees, managers and directors of the firm contribute to the creation of enterprise value but not necessarily market capitalization

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(the biggest difference is seen where cash represents the vast majority of market capitalization). Finally, we do not rely exclusively on relative comparisons with averages because, in addition to creeping averages serving to inflate compensation, we believe that some absolute limits are warranted.

We then consider qualitative aspects of the plan such as plan administration, the method and terms of exercise, repricing history, express or implied rights to reprice, and the presence of evergreen provisions. We also closely review the choice and use of, and difficulty in meeting, the awards' performance metrics and targets, if any. We believe significant changes to the terms of a plan should be explained for shareholders and clearly indicated.

Other factors such as a company's size and operating environment may also be relevant in assessing the severity of concerns or the benefits of certain changes. Finally, we may consider a company's executive compensation practices in certain situations, as applicable.

We evaluate equity plans based on certain overarching principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Companies should seek more shares only when needed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Requested share amounts or share reserves should be conservative in size so that companies must seek shareholder approval every three to four years (or more frequently);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If a plan is relatively expensive, it should not grant options solely to senior executives and board members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dilution of annual net share count or voting power, along with the "overhang" of incentive plans, should

be limited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Annual cost of the plan (especially if not shown on the income statement) should be reasonable as a percentage of financial results and should be in line with the peer group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The expected annual cost of the plan should be proportional to the business's value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The intrinsic value that option grantees received in the past should be reasonable compared with the

business's financial results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Plans should not permit repricing of stock options without shareholder approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Plans should not contain excessively liberal administrative or payment terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Plans should not count shares in ways that understate the potential dilution, or cost, to common

shareholders. This refers to "inverse" full-value award multipliers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Selected performance metrics should be challenging and appropriate, and should be subject to relative performance measurements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stock grants should be subject to minimum vesting and/or holding periods sufficient to ensure sustainable performance and promote retention.

Meanwhile, for individual equity award proposals where the recipient of the proposed grant is also a large shareholder of the company whose vote can materially affect the passage of the proposal, we believe that the company should strongly consider the level of approval from disinterested shareholders before proceeding with the proposed grant. Glass Lewis recognizes potential conflicts of interests when vote outcomes can be heavily influenced by the recipient of the grant. A required abstention vote or non-vote from the recipient for an equity award proposal in these situations can help to avoid such conflicts. This favorable feature will be weighed alongside the structure, disclosure, dilution, provided rationale, and other provisions related to the individual award to assess the award's alignment with long-term shareholder interests.

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Option Exchanges and Repricing

Glass Lewis is generally opposed to the repricing of employee and director options regardless of how it is accomplished. Employees should have some downside risk in their equity-based compensation program and repricing eliminates any such risk. As shareholders have substantial risk in owning stock, we believe that the equity compensation of employees and directors should be similarly situated to align their interests with those of shareholders. We believe this will facilitate appropriate risk- and opportunity-taking for the company by employees.

We are concerned that option grantees who believe they will be "rescued" from underwater options will be more inclined to take unjustifiable risks. Moreover, a predictable pattern of repricing or exchanges substantially alters a stock option's value because options that will practically never expire deeply out of the money are worth far more than options that carry a risk of expiration.

In short, repricings and option exchange programs change the bargain between shareholders and employees after the bargain has been struck.

There is one circumstance in which a repricing or option exchange program may be acceptable: if

macroeconomic or industry trends, rather than specific company issues, cause a stock's value to decline dramatically and the repricing is necessary to motivate and retain employees. In viewing the company's stock decline as part of a larger trend, we would expect the impact to approximately reflect the market or industry price decline in terms of timing and magnitude. In this circumstance, we think it fair to conclude that option grantees may be suffering from a risk that was not foreseeable when the original "bargain" was struck. In such a scenario, we may opt to support a repricing or option exchange program only if sufficient conditions are met.

We look for the following features in a repricing or exchange proposal:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Officers and board members cannot participate in the program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The exchange is value-neutral or value-creative to shareholders using very conservative assumptions.

In our evaluation of the appropriateness of the program design, we also consider the inclusion of the following features:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The vesting requirements on exchanged or repriced options are extended beyond one year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Shares reserved for options that are reacquired in an option exchange will permanently retire (i.e., will not be available for future grants) so as to prevent additional shareholder dilution in the future; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management and the board make a cogent case for needing to motivate and retain existing employees, such as being in a competitive employment market.

Option Backdating, Spring-Loading and Bullet-Dodging

Glass Lewis views option backdating, and the related practices of spring-loading and bullet-dodging, as egregious actions that warrant holding the appropriate management and board members responsible. These practices are similar to repricing options and eliminate much of the downside risk inherent in an option grant that is designed to induce recipients to maximize shareholder return.

Backdating an option is the act of changing an option's grant date from the actual grant date to an earlier date

when the market price of the underlying stock was lower, resulting in a lower exercise price for the option. In

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past studies, Glass Lewis identified over 270 companies that have disclosed internal or government investigations into their past stock-option grants.

Spring-loading is granting stock options while in possession of material, positive information that has not been disclosed publicly. Bullet-dodging is delaying the grants of stock options until after the release of material, negative information. This can allow option grants to be made at a lower price either before the release of positive news or following the release of negative news, assuming the stock's price will move up or down in response to the information. This raises a concern similar to that of insider trading, or the trading on material non-public information.

The exercise price for an option is determined on the day of grant, providing the recipient with the same market risk as an investor who bought shares on that date. However, where options were backdated, the executive or the board (or the compensation committee) changed the grant date retroactively. The new date may be at or near the lowest price for the year or period. This would be like allowing an investor to look back and select the lowest price of the year at which to buy shares.

A 2006 study of option grants made between 1996 and 2005 at 8,000 companies found that option backdating can be an indication of poor internal controls. The study found that option backdating was more likely to occur at companies without a majority independent board and with a long-serving CEO; both factors, the study

concluded, were associated with greater CEO influence on the company's compensation and governance

practices.<sup>43</sup>

Where a company granted backdated options to an executive who is also a director, Glass Lewis will recommend voting against that executive/director, regardless of who decided to make the award. In addition, Glass Lewis will recommend voting against those directors who either approved or allowed the backdating. Glass Lewis feels that executives and directors who either benefited from backdated options or authorized the practice have failed to act in the best interests of shareholders.

Given the severe tax and legal liabilities to the company from backdating, Glass Lewis will consider recommending voting against members of the audit committee who served when options were backdated, a restatement occurs, material weaknesses in internal controls exist and disclosures indicate there was a lack of documentation. These committee members failed in their responsibility to ensure the integrity of the company's financial reports.

When a company has engaged in spring-loading or bullet-dodging, Glass Lewis will consider recommending voting against the compensation committee members where there has been a pattern of granting options at or near historic lows. Glass Lewis will also recommend voting against executives serving on the board who benefited from the spring-loading or bullet-dodging.

43 Lucian Bebchuk, Yaniv Grinstein and Urs Peyer. "LUCKY CEOs." November, 2006.

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Director Compensation Plans

Glass Lewis believes that non-employee directors should receive reasonable and appropriate compensation for the time and effort they spend serving on the board and its committees. However, a balance is required. Fees should be competitive in order to retain and attract qualified individuals, but excessive fees represent a financial cost to the company and potentially compromise the objectivity and independence of non-employee directors. We will consider recommending support for compensation plans that include option grants or other equity- based awards that help to align the interests of outside directors with those of shareholders. However, to ensure directors are not incentivized in the same manner as executives but rather serve as a check on imprudent risk-taking in executive compensation plan design, equity grants to directors should not be performance-based. Where an equity plan exclusively or primarily covers non-employee directors as participants, we do not believe that the plan should provide for performance-based awards in any capacity.

When non-employee director equity grants are covered by the same equity plan that applies to a company's broader employee base, we will use our proprietary model and analyst review of this model to guide our voting recommendations. If such a plan broadly allows for performance-based awards to directors or explicitly provides for such grants, we may recommend against the overall plan on this basis, particularly if the company has granted performance-based awards to directors in past.

Employee Stock Purchase Plans

Glass Lewis believes that employee stock purchase plans (ESPPs) can provide employees with a sense of ownership in their company and help strengthen the alignment between the interests of employees and shareholders. We evaluate ESPPs by assessing the expected discount, purchase period, expected purchase

activity (if previous activity has been disclosed) and whether the plan has a "lookback" feature. Except for the

most extreme cases, Glass Lewis will generally support these plans given the regulatory purchase limit of

$25,000 per employee per year, which we believe is reasonable. We also look at the number of shares requested to see if a ESPP will significantly contribute to overall shareholder dilution or if shareholders will not have a chance to approve the program for an excessive period of time. As such, we will generally recommend against ESPPs that contain "evergreen" provisions that automatically increase the number of shares available under the ESPP each year.

Executive Compensation Tax Deductibility —

Amendment to IRC 162(M)

The "Tax Cut and Jobs Act" had significant implications on Section 162(m) of the Internal Revenue Code, a provision that allowed companies to deduct compensation in excess of $1 million for the CEO and the next three most highly compensated executive officers, excluding the CFO, if the compensation is performance-based and is paid under shareholder-approved plans. Glass Lewis does not generally view amendments to equity plans and changes to compensation programs in response to the elimination of tax deductions under 162(m) as problematic. This specifically holds true if such modifications contribute to the maintenance of a sound performance-based compensation program.

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As grandfathered contracts may continue to be eligible for tax deductions under the transition rule for Section 162(m), companies may therefore submit incentive plans for shareholder approval to take of advantage of the tax deductibility afforded under 162(m) for certain types of compensation.

We believe the best practice for companies is to provide robust disclosure to shareholders so that they can make fully informed judgments about the reasonableness of the proposed compensation plan. To allow for meaningful shareholder review, we prefer that disclosure should include specific performance metrics, a maximum award pool, and a maximum award amount per employee. We also believe it is important to analyze the estimated grants to see if they are reasonable and in line with the company's peers.

We typically recommend voting against a 162(m) proposal where: (i) a company fails to provide at least a list of performance targets; (ii) a company fails to provide one of either a total maximum or an individual maximum; or

&nbsp;&nbsp;&nbsp;&nbsp;(iii) the proposed plan or individual maximum award limit is excessive when compared with the plans of the

company's peers.

The company's record of aligning pay with performance (as evaluated using our proprietary pay-for- performance model) also plays a role in our recommendation. Where a company has a record of setting reasonable pay relative to business performance, we generally recommend voting in favor of a plan even if the plan caps seem large relative to peers because we recognize the value in special pay arrangements for continued exceptional performance.

As with all other issues we review, our goal is to provide consistent but contextual advice given the specifics of the company and ongoing performance. Overall, we recognize that it is generally not in shareholders' best interests to vote against such a plan and forgo the potential tax benefit since shareholder rejection of such plans will not curtail the awards; it will only prevent the tax deduction associated with them.

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Governance Structure and the Shareholder Franchise

Anti-Takeover Measures

Poison Pills (Shareholder Rights Plans)

Glass Lewis believes that poison pill plans are not generally in shareholders' best interests. They can reduce management accountability by substantially limiting opportunities for corporate takeovers. Rights plans can thus prevent shareholders from receiving a buy-out premium for their stock. Typically we recommend that shareholders vote against these plans to protect their financial interests and ensure that they have an opportunity to consider any offer for their shares, especially those at a premium.

We believe boards should be given wide latitude in directing company activities and in charting the company's course. However, on an issue such as this, where the link between the shareholders' financial interests and their right to consider and accept buyout offers is substantial, we believe that shareholders should be allowed to vote on whether they support such a plan's implementation. This issue is different from other matters that are typically left to board discretion. Its potential impact on and relation to shareholders is direct and substantial. It is also an issue in which management interests may be different from those of shareholders; thus, ensuring that shareholders have a voice is the only way to safeguard their interests.

In certain circumstances, we will support a poison pill that is limited in scope to accomplish a particular objective, such as the closing of an important merger, or a pill that contains what we believe to be a reasonable qualifying offer clause. We will consider supporting a poison pill plan if the qualifying offer clause includes each of the following attributes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The form of offer is not required to be an all-cash transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The offer is not required to remain open for more than 90 business days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The offeror is permitted to amend the offer, reduce the offer, or otherwise change the terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There is no fairness opinion requirement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There is a low to no premium requirement.

Where these requirements are met, we typically feel comfortable that shareholders will have the opportunity to voice their opinion on any legitimate offer.

NOL Poison Pills

Similarly, Glass Lewis may consider supporting a limited poison pill in the event that a company seeks shareholder approval of a rights plan for the express purpose of preserving Net Operating Losses (NOLs). While companies with NOLs can generally carry these losses forward to offset future taxable income, Section 382

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of the Internal Revenue Code limits companies' ability to use NOLs in the event of a "change of ownership."<sup>44</sup> In this case, a company may adopt or amend a poison pill (NOL pill) in order to prevent an inadvertent change of ownership by multiple investors purchasing small chunks of stock at the same time, and thereby preserve the ability to carry the NOLs forward. Often such NOL pills have trigger thresholds much lower than the common 15% or 20% thresholds, with some NOL pill triggers as low as 5%.

In many cases, companies will propose the adoption of bylaw amendments specifically restricting certain share transfers, in addition to proposing the adoption of a NOL pill. In general, if we support the terms of a particular NOL pill, we will generally support the additional protective amendment in the absence of significant concerns with the specific terms of that proposal.

As with traditional poison pills, NOL pills may deter shareholders and potentially serve as entrenchment mechanisms. Certain features such as low thresholds combined with acting in concert provisions, among other concerning terms, may disempower shareholders and insulate the board and management. When acting in concert provisions are present within the terms of a NOL pill, we believe this may raise concerns as to the true objective of the pill.

Acting in concert provisions broaden the definition of beneficial ownership to prohibit parallel conduct, or multiple shareholders party to a formal or informal agreement collaborating to influence the board and management of a company, and aggregate the ownership of such shareholders towards the triggering threshold. In our view, acting in concert provisions broadly limit the voice of shareholders and may diminish their ability to engage in a productive dialogue with the company and with other shareholders. When a board adopts defensive measures without engaging with shareholders, we take a dim view of the board and the overall governance of the company.

As such, Glass Lewis evaluates NOL pills on a strictly case-by-case basis, taking into consideration, among other factors: (i) the value of the NOLs to the company; (ii) the likelihood of a change of ownership based on the size of the holdings and the nature of the larger shareholders; (iii) the trigger threshold; (iv) the duration of the plan (i.e., whether it contains a reasonable "sunset" provision, generally one year or less); (v) the inclusion of an acting in concert provision; (vi) whether the pill is implemented following the filing of a Schedule 13D by a shareholder or there is evidence of hostile activity or shareholder activism; and (vii) if the pill is subject to periodic board review and/or shareholder ratification.

We believe that shareholders should be offered the opportunity to vote on any adoption or renewal of a NOL pill regardless of any potential tax benefit that it offers a company. As such, we will consider recommending voting against those members of the board who served at the time when an NOL pill was adopted without shareholder approval within the prior twelve months and where the NOL pill is not subject to shareholder ratification.

44 Section 382 of the Internal Revenue Code refers to a "change of ownership" of more than 50 percentage points by one or more 5% shareholders within a three-year period. The statute is intended to deter the "trafficking" of net operating losses.

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Fair Price Provisions

Fair price provisions, which are rare, require that certain minimum price and procedural requirements be observed by any party that acquires more than a specified percentage of a corporation's common stock. The provision is intended to protect minority shareholder value when an acquirer seeks to accomplish a merger or other transaction which would eliminate or change the interests of the minority shareholders. The provision is generally applied against the acquirer unless the takeover is approved by a majority of "continuing directors" and holders of a majority, in some cases a supermajority as high as 80%, of the combined voting power of all stock entitled to vote to alter, amend, or repeal the above provisions.

The effect of a fair price provision is to require approval of any merger or business combination with an

"interested shareholder" by 51% of the voting stock of the company, excluding the shares held by the interested shareholder. An interested shareholder is generally considered to be a holder of 10% or more of the company's outstanding stock, but the trigger can vary.

Generally, provisions are put in place for the ostensible purpose of preventing a back-end merger where the interested shareholder would be able to pay a lower price for the remaining shares of the company than he or she paid to gain control. The effect of a fair price provision on shareholders, however, is to limit their ability to gain a premium for their shares through a partial tender offer or open market acquisition which typically raise the share price, often significantly. A fair price provision discourages such transactions because of the potential costs of seeking shareholder approval and because of the restrictions on purchase price for completing a merger or other transaction at a later time.

Glass Lewis believes that fair price provisions, while sometimes protecting shareholders from abuse in a takeover situation, more often act as an impediment to takeovers, potentially limiting gains to shareholders from a variety of transactions that could significantly increase share price. In some cases, even the independent directors of the board cannot make exceptions when such exceptions may be in the best interests of shareholders. Given the existence of state law protections for minority shareholders such as Section 203 of the Delaware Corporations Code, we believe it is in the best interests of shareholders to remove fair price provisions.

Control Share Statutes

Certain states, including Delaware, have adopted control share acquisition statutes as an anti-takeover defense for certain closed-end investment companies and business development companies. Control share statutes may prevent changes in control by limiting voting rights of a person that acquires the ownership of "control shares." Control shares are shares of stock equal to or exceeding specified percentages of company voting power, and a control share statute prevents shares in excess of the specified percentage from being voted, unless: (i) the

board approves them to be voted; or (ii) the holder of the "control shares" receives approval from a supermajority of "non-interested" shareholders.

Depending on the state of incorporation, companies may automatically rely on control share statutes unless the fund's board of trustees eliminates the application of the control share statute to any or all fund share acquisitions, through adoption of a provision in the fund's governing instrument or by fund board action alone. In certain other states, companies must adopt control share statutes.

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In our view, control share statues disenfranchise shareholders by reducing their voting power to a level less than their economic interest and effectively function as an anti-takeover device. We believe all shareholders should have an opportunity to vote all of their shares. Moreover, anti-takeover measures may prevent shareholders from receiving a buy-out premium for their stock.

As such, we will generally recommend voting for proposals to opt out of control share acquisition statutes, unless doing so would allow the completion of a takeover that is not in the best interests of shareholders; and against proposals to amend the charter to include control share acquisition provisions.

Further, in cases where a closed-end fund or business development company has received a public buyout offer and has relied on a control share statute as a defense mechanism in the prior year, we will generally recommend shareholders vote against the chair of the nominating and governance committee, absent a compelling rationale as to why a rejected acquisition was not in the best interests of shareholders.

Quorum Requirements

Glass Lewis believes that a company's quorum requirement should be set at a level high enough to ensure that a broad range of shareholders are represented in person or by proxy, but low enough that the company can transact necessary business. Companies in the U.S. are generally subject to quorum requirements under the laws of their specific state of incorporation. Additionally, those companies listed on the NASDAQ Stock Market are required to specify a quorum in their bylaws, provided however that such quorum may not be less than one- third of outstanding shares. Prior to 2013, the New York Stock Exchange required a quorum of 50% for listed companies, although this requirement was dropped in recognition of individual state requirements and potential confusion for issuers. Delaware, for example, required companies to provide for a quorum of no less than one-third of outstanding shares; otherwise such quorum shall default to a majority.

We generally believe a majority of outstanding shares entitled to vote is an appropriate quorum for the transaction of business at shareholder meetings. However, should a company seek shareholder approval of a lower quorum requirement we will generally support a reduced quorum of at least one-third of shares entitled to vote, either in person or by proxy. When evaluating such proposals, we also consider the specific facts and circumstances of the company, such as size and shareholder base.

Director and Officer Indemnification

While Glass Lewis strongly believes that directors and officers should be held to the highest standard when carrying out their duties to shareholders, some protection from liability is reasonable to protect them against certain suits so that these officers feel comfortable taking measured risks that may benefit shareholders. As such, we find it appropriate for a company to provide indemnification and/or enroll in liability insurance to cover its directors and officers so long as the terms of such agreements are reasonable.

Officer Exculpation

In August 2022, the Delaware General Assembly amended Section 102(b)(7) of the Delaware General

Corporation Law ("DGCL") to authorize corporations to adopt a provision in their certificate of incorporation to

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eliminate or limit monetary liability of certain corporate officers for breach of fiduciary duty of care. Previously, the DGCL allowed only exculpation of corporate directors from breach of fiduciary duty of care claims if the corporation's certificate of incorporation includes an exculpation provision.

The amendment authorizes corporations to provide for exculpation of the following officers: (i) the

corporation's president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer, (ii) "named executive officers" identified in the corporation's SEC filings, and (iii) individuals who have agreed to be identified as officers of the corporation.

Corporate exculpation provisions under the DGCL only apply to claims for breach of the duty of care, and not to breaches of the duty of loyalty. Exculpation provisions also do not apply to acts or omissions not in good faith or that involve intentional misconduct, knowing violations of the law, or transactions involving the receipt of any improper personal benefits. Furthermore, officers may not be exculpated from claims brought against them by, or in the right of, the corporation (i.e., derivative actions).

Under Section 102(b)(7), a corporation must affirmatively elect to include an exculpation provision in its certificate of incorporation. We will closely evaluate proposals to adopt officer exculpation provisions on a case- by-case basis. We will generally recommend voting against such proposals eliminating monetary liability for breaches of the duty of care for certain corporate officers, unless compelling rationale for the adoption is provided by the board, and the provisions are reasonable.

Reincorporation

In general, Glass Lewis believes that the board is in the best position to determine the appropriate jurisdiction of incorporation for the company. We review all proposals to reincorporate to a different state or country on a case-by-case basis. Our review includes the changes in corporate governance provisions, especially those relating to shareholder rights, material differences in corporate statutes and legal precedents, and relevant financial benefits, among other factors, resulting from the change in domicile.

Glass Lewis closely examines the impact on shareholder rights arising from a change in domicile and governing law, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Will shareholders gain/retain certain rights (i.e. the right to call special meetings, the right to act by written consent, the ability to remove directors)?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Does the proposed new jurisdiction allow for director and officer exculpation and/or exclusive forum provisions?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• What are the fiduciary duties (if any) of directors, officers, and majority shareholders under the new

jurisdiction's statutes?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• What are the material differences in corporate statutes, case law, and judicial systems?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Is the company proposing to reincorporate to a jurisdiction considered to be a "tax haven"?

In addition, when examining a proposal to reincorporate, we will also consider the overall governance of the company, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Does the company have anti-takeover protections such as a poison pill or classified board in place?

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Does the company have a significant shareholder or is the company otherwise considered controlled?<sup>45</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Has the board been previously unresponsive to shareholders (such as failing to implement a shareholder proposal that received majority shareholder support)?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Does the company have an independent chair and is the board sufficiently independent?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Are there other material governance issues of concern at the company? Has the company's

performance matched or exceeded its peers in the past one and three years?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• How has the company ranked in Glass Lewis' pay-for-performance analysis during the last three years?

Where there is a decline in shareholder rights, the financial benefits are de minimis, and the proposed jurisdiction has significantly worse shareholder protections, we will generally recommend voting against the transaction.

In addition, costly, shareholder-initiated reincorporations are typically not the best route to achieve the furtherance of shareholder rights. We believe shareholders are generally better served by proposing specific shareholder resolutions addressing pertinent issues which may be implemented at a lower cost, and perhaps even with board approval. However, when shareholders propose a shift into a jurisdiction with enhanced shareholder rights, Glass Lewis examines the significant ways the company would benefit from shifting jurisdictions including an evaluation of the criteria listed above. We note, however, that we will only support shareholder proposals to change a company's place of incorporation in exceptional circumstances.

Exclusive Forum and Fee-Shifting Bylaw Provisions

Glass Lewis recognizes that companies may be subject to frivolous and opportunistic lawsuits, particularly in conjunction with a merger or acquisition, that are expensive and distracting. In response, companies have sought ways to prevent or limit the risk of such suits by adopting bylaws regarding where the suits must be brought or shifting the burden of the legal expenses to the plaintiff, if unsuccessful at trial.

Glass Lewis believes that charter or bylaw provisions limiting a shareholder's choice of legal venue are not in the best interests of shareholders. Such clauses may effectively discourage the use of shareholder claims by increasing their associated costs and making them more difficult to pursue. As such, shareholders should be wary about approving any limitation on their legal recourse including limiting themselves to a single jurisdiction (e.g., Delaware or federal courts for matters arising under the Securities Act of 1933) without compelling evidence that it will benefit shareholders.

For this reason, we recommend that shareholders vote against any bylaw or charter amendment seeking to adopt an exclusive forum provision unless the company: (i) provides a compelling argument on why the provision would directly benefit shareholders; (ii) provides evidence of abuse of legal process in other, non- favored jurisdictions; (iii) narrowly tailors such provision to the risks involved; and (iv) maintains a strong record of good corporate governance practices.

45 In cases where a controlled company is seeking to change its domicile, we will closely evaluate how the independent members of the board came to its recommendation, if the controlling shareholder had any ability to influence the board, and if the proposal is also put to a vote of disinterested shareholders.

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Moreover, in the event a board seeks shareholder approval of a forum selection clause pursuant to a bundled bylaw amendment rather than as a separate proposal, we will weigh the importance of the other bundled provisions when determining the vote recommendation on the proposal. We will nonetheless recommend voting against the chair of the governance committee for bundling disparate proposals into a single proposal (refer to our discussion of nominating and governance committee performance in Section I of the guidelines).

Similarly, some companies have adopted bylaws requiring plaintiffs who sue the company and fail to receive a judgment in their favor pay the legal expenses of the company. These bylaws, also known as "fee-shifting" or "loser pays" bylaws, will likely have a chilling effect on even meritorious shareholder lawsuits as shareholders would face an strong financial disincentive not to sue a company. Glass Lewis therefore strongly opposes the adoption of such fee-shifting bylaws and, if adopted without shareholder approval, will recommend voting against the governance committee. While we note that in June of 2015 the State of Delaware banned the adoption of fee-shifting bylaws, such provisions could still be adopted by companies incorporated in other states.

Authorized Shares

Glass Lewis believes that adequate capital stock is important to a company's operation. When analyzing a request for additional shares, we typically review four common reasons why a company might need additional capital stock:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**Stock Split** — We typically consider three metrics when evaluating whether we think a stock split is likely or necessary: The historical stock pre-split price, if any; the current price relative to the company's most common trading price over the past 52 weeks; and some absolute limits on stock price that, in our view, either always make a stock split appropriate if desired by management or would almost never be a reasonable price at which to split a stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**Shareholder Defenses** — Additional authorized shares could be used to bolster takeover defenses such as a poison pill. Proxy filings often discuss the usefulness of additional shares in defending against or discouraging a hostile takeover as a reason for a requested increase. Glass Lewis is typically against such defenses and will oppose actions intended to bolster such defenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**Financing for Acquisitions** — We look at whether the company has a history of using stock for acquisitions and attempt to determine what levels of stock have typically been required to accomplish such transactions. Likewise, we look to see whether this is discussed as a reason for additional shares in the proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**Financing for Operations** — We review the company's cash position and its ability to secure financing through borrowing or other means. We look at the company's history of capitalization and whether the company has had to use stock in the recent past as a means of raising capital.

Issuing additional shares generally dilutes existing holders in most circumstances. Further, the availability of additional shares, where the board has discretion to implement a poison pill, can often serve as a deterrent to interested suitors. Accordingly, where we find that the company has not detailed a plan for use of the proposed shares, or where the number of shares far exceeds those needed to accomplish a detailed plan, we typically recommend against the authorization of additional shares. Similar concerns may also lead us to recommend

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against a proposal to conduct a reverse stock split if the board does not state that it will reduce the number of authorized common shares in a ratio proportionate to the split.

With regard to authorizations and/or increases in preferred shares, Glass Lewis is generally against such authorizations, which allow the board to determine the preferences, limitations and rights of the preferred shares (known as "blank-check preferred stock"). We believe that granting such broad discretion should be of concern to common shareholders, since blank-check preferred stock could be used as an anti-takeover device or in some other fashion that adversely affects the voting power or financial interests of common shareholders.

Therefore, we will generally recommend voting against such requests, unless the company discloses a commitment to not use such shares as an anti-takeover defense or in a shareholder rights plan, or discloses a commitment to submit any shareholder rights plan to a shareholder vote prior to its adoption.

While we think that having adequate shares to allow management to make quick decisions and effectively operate the business is critical, we prefer that, for significant transactions, management come to shareholders to justify their use of additional shares rather than providing a blank check in the form of a large pool of unallocated shares available for any purpose.

Advance Notice Requirements

We typically recommend that shareholders vote against proposals that would require advance notice of shareholder proposals or of director nominees.

These proposals typically attempt to require a certain amount of notice before shareholders are allowed to place proposals on the ballot. Notice requirements typically range between three to six months prior to the annual meeting. Advance notice requirements typically make it impossible for a shareholder who misses the deadline to present a shareholder proposal or a director nominee that might be in the best interests of the company and its shareholders.

We believe shareholders should be able to review and vote on all proposals and director nominees. Shareholders can always vote against proposals that appear with little prior notice. Shareholders, as owners of a business, are capable of identifying issues on which they have sufficient information and ignoring issues on which they have insufficient information. Setting arbitrary notice restrictions limits the opportunity for shareholders to raise issues that may come up after the window closes.

Virtual Shareholder Meetings

A growing contingent of companies have elected to hold shareholder meetings by virtual means only. Glass Lewis believes that virtual meeting technology can be a useful complement to a traditional, in-person shareholder meeting by expanding participation of shareholders who are unable to attend a shareholder meeting in person (i.e., a "hybrid meeting"). However, we also believe that virtual-only meetings have the potential to curb the ability of a company's shareholders to meaningfully communicate with the company's management.

Prominent shareholder rights advocates, including the Council of Institutional Investors, have expressed concerns that such virtual-only meetings do not approximate an in-person experience and may serve to reduce

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the board's accountability to shareholders. When analyzing the governance profile of companies that choose to hold virtual-only meetings, we look for robust disclosure in a company's proxy statement which assures shareholders that they will be afforded the same rights and opportunities to participate as they would at an in- person meeting.

Examples of effective disclosure include: (i) addressing the ability of shareholders to ask questions during the meeting, including time guidelines for shareholder questions, rules around what types of questions are allowed, and rules for how questions and comments will be recognized and disclosed to meeting participants; (ii)

procedures, if any, for posting appropriate questions received during the meeting and the company's answers, on the investor page of their website as soon as is practical after the meeting; (iii) addressing technical and logistical issues related to accessing the virtual meeting platform; and (iv) procedures for accessing technical support to assist in the event of any difficulties accessing the virtual meeting.

We will generally recommend voting against members of the governance committee where the board is planning to hold a virtual-only shareholder meeting and the company does not provide such disclosure.

Voting Structure

Multi-Class Share Structures

Glass Lewis believes multi-class voting structures are typically not in the best interests of common shareholders. Allowing one vote per share generally operates as a safeguard for common shareholders by ensuring that those who hold a significant minority of shares are able to weigh in on issues set forth by the board.

Furthermore, we believe that the economic stake of each shareholder should match their voting power and that no small group of shareholders, family or otherwise, should have voting rights different from those of other shareholders. On matters of governance and shareholder rights, we believe shareholders should have the power to speak and the opportunity to effect change. That power should not be concentrated in the hands of a few for reasons other than economic stake.

We generally consider a multi-class share structure to reflect negatively on a company's overall corporate governance. Because we believe that companies should have share capital structures that protect the interests of non-controlling shareholders as well as any controlling entity, we typically recommend that shareholders vote in favor of recapitalization proposals to eliminate dual-class share structures. Similarly, we will generally recommend against proposals to adopt a new class of common stock. We will generally recommend voting against the chair of the governance committee at companies with a multi-class share structure and unequal voting rights when the company does not provide for a reasonable sunset of the multi-class share structure (generally seven years or less).

In the case of a board that adopts a multi-class share structure in connection with an IPO, spin-off, or direct listing within the past year, we will generally recommend voting against all members of the board who served at the time of the IPO if the board: (i) did not also commit to submitting the multi-class structure to a shareholder vote at the company's first shareholder meeting following the IPO; or (ii) did not provide for a reasonable sunset of the multi-class structure (generally seven years or less). If the multi-class share structure is put to a

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shareholder vote, we will examine the level of approval or disapproval attributed to unaffiliated shareholders when determining the vote outcome.

At companies that have multi-class share structures with unequal voting rights, we will carefully examine the level of approval or disapproval attributed to unaffiliated shareholders when determining whether board responsiveness is warranted. In the case of companies that have multi-class share structures with unequal voting rights, we will generally examine the level of approval or disapproval attributed to unaffiliated shareholders on a "one share, one vote" basis. At controlled and multi-class companies, when at least 20% or more of unaffiliated shareholders vote contrary to management, we believe that boards should engage with shareholders and demonstrate some initial level of responsiveness, and when a majority or more of unaffiliated shareholders vote contrary to management we believe that boards should engage with shareholders and provide a more robust response to fully address shareholder concerns.

Cumulative Voting

Cumulative voting increases the ability of minority shareholders to elect a director by allowing shareholders to cast as many shares of the stock they own multiplied by the number of directors to be elected. As companies generally have multiple nominees up for election, cumulative voting allows shareholders to cast all of their votes for a single nominee, or a smaller number of nominees than up for election, thereby raising the likelihood of electing one or more of their preferred nominees to the board. It can be important when a board is controlled

by insiders or affiliates and where the company's ownership structure includes one or more shareholders who

control a majority-voting block of company stock.

Glass Lewis believes that cumulative voting generally acts as a safeguard for shareholders by ensuring that those who hold a significant minority of shares can elect a candidate of their choosing to the board. This allows the creation of boards that are responsive to the interests of all shareholders rather than just a small group of

large holders.

We review cumulative voting proposals on a case-by-case basis, factoring in the independence of the board and the status of the company's governance structure. But we typically find these proposals on ballots at companies where independence is lacking and where the appropriate checks and balances favoring shareholders are not in place. In those instances we typically recommend in favor of cumulative voting.

Where a company has adopted a true majority vote standard (i.e., where a director must receive a majority of votes cast to be elected, as opposed to a modified policy indicated by a resignation policy only), Glass Lewis will recommend voting against cumulative voting proposals due to the incompatibility of the two election methods. For companies that have not adopted a true majority voting standard but have adopted some form of majority voting, Glass Lewis will also generally recommend voting against cumulative voting proposals if the company has not adopted anti-takeover protections and has been responsive to shareholders.

Where a company has not adopted a majority voting standard and is facing both a shareholder proposal to adopt majority voting and a shareholder proposal to adopt cumulative voting, Glass Lewis will support only the majority voting proposal. When a company has both majority voting and cumulative voting in place, there is a higher likelihood of one or more directors not being elected as a result of not receiving a majority vote. This is because shareholders exercising the right to cumulate their votes could unintentionally cause the failed election of one or more directors for whom shareholders do not cumulate votes.

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Supermajority Vote Requirements

Glass Lewis believes that supermajority vote requirements impede shareholder action on ballot items critical to shareholder interests. An example is in the takeover context, where supermajority vote requirements can strongly limit the voice of shareholders in making decisions on such crucial matters as selling the business. This in turn degrades share value and can limit the possibility of buyout premiums to shareholders. Moreover,

we believe that a supermajority vote requirement can enable a small group of shareholders to overrule the will of the majority shareholders. We believe that a simple majority is appropriate to approve all matters presented to shareholders.

Transaction of Other Business

We typically recommend that shareholders not give their proxy to management to vote on any other business items that may properly come before an annual or special meeting. In our opinion, granting unfettered discretion is unwise.

Anti-Greenmail Proposals

Glass Lewis will support proposals to adopt a provision preventing the payment of greenmail, which would serve to prevent companies from buying back company stock at significant premiums from a certain shareholder.

Since a large or majority shareholder could attempt to compel a board into purchasing its shares at a large premium, the anti-greenmail provision would generally require that a majority of shareholders other than the majority shareholder approve the buyback.

Mutual Funds: Investment Policies and Advisory Agreements

Glass Lewis believes that decisions about a fund's structure and/or a fund's relationship with its investment advisor or sub-advisors are generally best left to management and the members of the board, absent a showing of egregious or illegal conduct that might threaten shareholder value. As such, we focus our analyses of such proposals on the following main areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The terms of any amended advisory or sub-advisory agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any changes in the fee structure paid to the investment advisor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any material changes to the fund's investment objective or strategy.

We generally support amendments to a fund's investment advisory agreement absent a material change that is not in the best interests of shareholders. A significant increase in the fees paid to an investment advisor would be reason for us to consider recommending voting against a proposed amendment to an investment advisory agreement or fund reorganization. However, in certain cases, we are more inclined to support an increase in advisory fees if such increases result from being performance-based rather than asset-based. Furthermore, we

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generally support sub-advisory agreements between a fund's advisor and sub-advisor, primarily because the fees received by the sub-advisor are paid by the advisor, and not by the fund.

In matters pertaining to a fund's investment objective or strategy, we believe shareholders are best served when a fund's objective or strategy closely resembles the investment discipline shareholders understood and selected when they initially bought into the fund. As such, we generally recommend voting against amendments to a fund's investment objective or strategy when the proposed changes would leave shareholders with stakes in a fund that is noticeably different than when originally purchased, and which could therefore potentially

negatively impact some investors' diversification strategies.

Real Estate Investment Trusts

The complex organizational, operational, tax and compliance requirements of Real Estate Investment Trusts (REITs) provide for a unique shareholder evaluation. In simple terms, a REIT must have a minimum of 100 shareholders (the 100 Shareholder Test) and no more than 50% of the value of its shares can be held by five or fewer individuals (the "5/50 Test"). At least 75% of a REITs' assets must be in real estate, it must derive 75% of its gross income from rents or mortgage interest, and it must pay out 90% of its taxable earnings as dividends. In addition, as a publicly traded security listed on a stock exchange, a REIT must comply with the same general listing requirements as a publicly traded equity.

In order to comply with such requirements, REITs typically include percentage ownership limitations in their organizational documents, usually in the range of 5% to 10% of the REITs outstanding shares. Given the complexities of REITs as an asset class, Glass Lewis applies a highly nuanced approach in our evaluation of REIT proposals, especially regarding changes in authorized share capital, including preferred stock.

Preferred Stock Issuances at REITs

Glass Lewis is generally against the authorization of "blank-check preferred stock." However, given the requirement that a REIT must distribute 90% of its net income annually, it is inhibited from retaining capital to make investments in its business. As such, we recognize that equity financing likely plays a key role in a REIT's growth and creation of shareholder value. Moreover, shareholder concern regarding the use of preferred stock as an anti-takeover mechanism may be allayed by the fact that most REITs maintain ownership limitations in their certificates of incorporation. For these reasons, along with the fact that REITs typically do not engage in private placements of preferred stock (which result in the rights of common shareholders being adversely impacted), we may support requests to authorize shares of blank-check preferred stock at REITs.

Business Development Companies

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similar to those of REITs—the most evident of which is that BDCs must distribute at least 90% of their taxable earnings as dividends.

Authorization to Sell Shares at a Price Below Net Asset Value

Considering that BDCs are required to distribute nearly all their earnings to shareholders, they sometimes need to offer additional shares of common stock in the public markets to finance operations and acquisitions.

However, shareholder approval is required in order for a BDC to sell shares of common stock at a price below Net Asset Value (NAV). Glass Lewis evaluates these proposals using a case-by-case approach, but will recommend supporting such requests if the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The authorization to allow share issuances below NAV has an expiration date of one year or less from the date that shareholders approve the underlying proposal (i.e., the meeting date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The proposed discount below NAV is minimal (ideally no greater than 20%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The board specifies that the issuance will have a minimal or modest dilutive effect (ideally no greater

than 25% of the company's then-outstanding common stock prior to the issuance); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A majority of the company's independent directors who do not have a financial interest in the issuance

approve the sale.

In short, we believe BDCs should demonstrate a responsible approach to issuing shares below NAV, by proactively addressing shareholder concerns regarding the potential dilution of the requested share issuance, and explaining if and how the company's past below-NAV share issuances have benefitted the company.

Auditor Ratification and Below-NAV Issuances

When a BDC submits a below-NAV issuance for shareholder approval, we will refrain from recommending against the audit committee chair for not including auditor ratification on the same ballot. Because of the unique way these proposals interact, votes may be tabulated in a manner that is not in shareholders' interests.

In cases where these proposals appear on the same ballot, auditor ratification is generally the only "routine proposal," the presence of which triggers a scenario where broker non-votes may be counted toward shareholder quorum, with unintended consequences.

Under the 1940 Act, below-NAV issuance proposals require relatively high shareholder approval. Specifically, these proposals must be approved by the lesser of: (i) 67% of votes cast if a majority of shares are represented at the meeting; or (ii) a majority of outstanding shares. Meanwhile, any broker non-votes counted toward quorum will automatically be registered as "against" votes for purposes of this proposal. The unintended result can be a case where the issuance proposal is not approved, despite sufficient voting shares being cast in favor.

Because broker non-votes result from a lack of voting instruction by the shareholder, we do not believe shareholders' ability to weigh in on the selection of auditor outweighs the consequences of failing to approve an issuance proposal due to such technicality.

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Special Purpose Acquisition Companies

Special Purpose Acquisition Companies (SPACs), also known as "blank check companies," are publicly traded entities with no commercial operations and are formed specifically to pool funds in order to complete a merger or acquisition within a set time frame. In general, the acquisition target of a SPAC is either not yet identified or otherwise not explicitly disclosed to the public even when the founders of the SPAC may have at least one target in mind. Consequently, IPO investors often do not know what company they will ultimately be investing in.

SPACs are therefore very different from typical operating companies. Shareholders do not have the same expectations associated with an ordinary publicly traded company and executive officers of a SPAC typically do not continue in employment roles with an acquired company.

Extension of Business Combination Deadline

Governing documents of SPACs typically provide for the return of IPO proceeds to common shareholders if no qualifying business combination is consummated before a certain date. Because the time frames for the consummation of such transactions are relatively short, SPACs will sometimes hold special shareholder meetings at which shareholders are asked to extend the business combination deadline. In such cases, an acquisition target will typically have been identified, but additional time is required to allow management of the SPAC to finalize the terms of the deal.

Glass Lewis believes management and the board are generally in the best position to determine when the extension of a business combination deadline is needed. We therefore generally defer to the recommendation of management and support reasonable extension requests.

SPAC Board Independence

The board of directors of a SPAC's acquisition target is in many cases already established prior to the business combination. In some cases, however, the board's composition may change in connection with the business combination, including the potential addition of individuals who served in management roles with the SPAC. The role of a SPAC executive is unlike that of a typical operating company executive. Because the SPAC's only business is identifying and executing an acquisition deal, the interests of a former SPAC executive are also different. Glass Lewis does not automatically consider a former SPAC executive to be affiliated with the acquired operating entity when their only position on the board of the combined entity is that of an otherwise independent director. Absent any evidence of an employment relationship or continuing material financial interest in the combined entity, we will therefore consider such directors to be independent.

Director Commitments of SPAC Executives

We believe the primary role of executive officers at SPACs is identifying acquisition targets for the SPAC and consummating a business combination. Given the nature of these executive roles and the limited business

operations of SPACs, when a directors' only executive role is at a SPAC, we will generally apply our higher limit for company directorships. As a result, we generally recommend that shareholders vote against a director who serves in an executive role only at a SPAC while serving on more than five public company boards.

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Shareholder Proposals

Glass Lewis believes that shareholders should seek to promote governance structures that protect shareholders, support effective ESG oversight and reporting, and encourage director accountability. Accordingly, Glass Lewis places a significant emphasis on promoting transparency, robust governance structures and companies' responsiveness to and engagement with shareholders. We also believe that companies should be transparent on how they are mitigating material ESG risks, including those related to climate change, human capital management, and stakeholder relations.

To that end, we evaluate all shareholder proposals on a case-by-case basis with a view to protecting long-term shareholder value. While we are generally supportive of those that promote board accountability, shareholder rights, and transparency, we consider all proposals in the context of a company's unique operations and risk profile.

For a detailed review of our policies concerning compensation, environmental, social, and governance shareholder proposals, please refer to our comprehensive *Proxy Paper Guidelines for Shareholder Proposals & ESG-Related Issues*, available at <u>www.glasslewis.com/voting-policies-current/</u>.

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Overall Approach to Environmental, Social & Governance Issues

Glass Lewis evaluates all environmental and social issues through the lens of long-term shareholder value. We believe that companies should be considering material environmental and social factors in all aspects of their operations and that companies should provide shareholders with disclosures that allow them to understand how these factors are being considered and how attendant risks are being mitigated. We also are of the view that governance is a critical factor in how companies manage environmental and social risks and opportunities and that a well-governed company will be generally managing these issues better than one without a governance structure that promotes board independence and accountability.

We believe part of the board's role is to ensure that management conducts a complete risk analysis of company operations, including those that have material environmental and social implications. We believe that directors should monitor management's performance in both capitalizing on environmental and social opportunities and mitigating environmental and social risks related to operations in order to best serve the interests of shareholders. Companies face significant financial, legal and reputational risks resulting from poor environmental and social practices, or negligent oversight thereof. Therefore, in cases where the board or management has neglected to take action on a pressing issue that could negatively impact shareholder value, we believe that shareholders should take necessary action in order to effect changes that will safeguard their financial interests.

Given the importance of the role of the board in executing a sustainable business strategy that allows for the realization of environmental and social opportunities and the mitigation of related risks, relating to environmental risks and opportunities, we believe shareholders should seek to promote governance structures that protect shareholders and promote director accountability. When management and the board have displayed disregard for environmental or social risks, have engaged in egregious or illegal conduct, or have failed to adequately respond to current or imminent environmental and social risks that threaten shareholder value, we believe shareholders should consider holding directors accountable. In such instances, we will generally recommend against responsible members of the board that are specifically charged with oversight of the issue in question.

When evaluating environmental and social factors that may be relevant to a given company, Glass Lewis does so in the context of the financial materiality of the issue to the company's operations. We believe that all companies face risks associated with environmental and social issues. However, we recognize that these risks manifest themselves differently at each company as a result of a company's operations, workforce, structure, and geography, among other factors. Accordingly, we place a significant emphasis on the financial implications of a company's actions with regard to impacts on its stakeholders and the environment.

When evaluating environmental and social issues, Glass Lewis examines companies':

**Direct environmental and social risk** — Companies should evaluate financial exposure to direct environmental risks associated with their operations. Examples of direct environmental risks include those associated with oil or gas spills, contamination, hazardous leakages, explosions, or reduced water or air quality, among others.

Social risks may include non-inclusive employment policies, inadequate human rights policies, or issues that

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adversely affect the company's stakeholders. Further, we believe that firms should consider their exposure to risks emanating from a broad range of issues, over which they may have no or only limited control, such as insurance companies being affected by increased storm severity and frequency resulting from climate change

**Risk due to legislation and regulation** — Companies should evaluate their exposure to changes or potential changes in regulation that affect current and planned operations. Regulation should be carefully monitored in all jurisdictions in which the company operates. We look closely at relevant and proposed legislation and evaluate whether the company has responded proactively.

**Legal and reputational risk** — Failure to take action on important environmental or social issues may carry the risk of inciting negative publicity and potentially costly litigation. While the effect of high-profile campaigns on shareholder value may not be directly measurable, we believe it is prudent for companies to carefully evaluate the potential impacts of the public perception of their impacts on stakeholders and the environment. When considering investigations and lawsuits, Glass Lewis is mindful that such matters may involve unadjudicated allegations or other charges that have not been resolved. Glass Lewis does not assume the truth of such allegations or charges or that the law has been violated. Instead, Glass Lewis focuses more broadly on whether, under the particular facts and circumstances presented, the nature and number of such concerns, lawsuits or investigations reflects on the risk profile of the company or suggests that appropriate risk mitigation measures may be warranted.

**Governance risk** — Inadequate oversight of environmental and social issues carries significant risks to companies. When leadership is ineffective or fails to thoroughly consider potential risks, such risks are likely unmitigated and could thus present substantial risks to the company, ultimately leading to loss of shareholder value.

Glass Lewis believes that one of the most crucial factors in analyzing the risks presented to companies in the form of environmental and social issues is the level and quality of oversight over such issues. When management and the board have displayed disregard for environmental risks, have engaged in egregious or illegal conduct, or have failed to adequately respond to current or imminent environmental risks that threaten shareholder value, we believe shareholders should consider holding directors accountable. When companies have not provided for explicit, board-level oversight of environmental and social matters and/or when a substantial environmental or social risk has been ignored or inadequately addressed, we may recommend voting against members of the board. In addition, or alternatively, depending on the proposals presented, we may also consider recommending voting in favor of relevant shareholder proposals or against other relevant management-proposed items, such as the ratification of auditor, a company's accounts and reports, or ratification of management and board acts.

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Connect with Glass Lewis

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**PART C: OTHER INFORMATION**

**Item 28. Exhibits**

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| | | | |
|:---|:---|:---|:---|
| (a) | (i) |  | <u>[Certificate of Trust dated February 9, 2012 of ETF Series Solutions (the "Trust" or the "Registrant") is incorporated herein by reference to Exhibit (a)(i) to the Registrant's Registration Statement on Form N-1A, as filed on February 17, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912000776/cert.htm)</u> |
|  | (ii) |  | <u>[Registrant's Agreement and Declaration of Trust dated February 17, 2012 is incorporated herein by reference to Exhibit (a)(ii) to the Registrant's Registration Statement on Form N-1A, as filed on February 17, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912000776/declaration.htm)</u> |
| (b) |  |  | <u>[Registrant's Amended and Restated Bylaws dated August 18, 2014, are incorporated herein by reference to Exhibit (b) to the Registrant's Registration Statement on Form N-1A, as filed on September 8, 2014.](https://www.sec.gov/Archives/edgar/data/1540305/000089418914004441/bylaws.htm)</u> |
| (c) |  |  | Not applicable. |
| (d) | (i) | (A) | <u>[Investment Advisory Agreement between the Trust and Advisors Asset Management, Inc. dated October 7, 2022 is incorporated herein by reference to Exhibit (d)(i) to the Registration Statement on Form N-1A, as filed on February 24, 2023.](https://www.sec.gov/Archives/edgar/data/1540305/000089418923001437/aamiaa_postchangeofcontrol.htm)</u> |
|  |  | (B) | <u>[Amended Schedule A to the Investment Advisory Agreement is incorporated herein by reference to Exhibit (d)(i)(B) to the Registration Statement on Form N-1](aamadvisoryagreement-amend.htm)[A](aamadvisoryagreement-amend.htm)</u> **- filed herewith** |
|  | (ii) | (A) | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Vident Investment Advisory, LLC dated October 7, 2022 is incorporated herein by reference to Exhibit (d)(iii) to the Registration Statement on Form N-1A, as filed on February 24, 2023.](https://www.sec.gov/Archives/edgar/data/1540305/000089418923001437/viasub-advagreementaampost.htm)</u> |
|  |  | (B) | <u>[Amended Schedule A to the Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Vident Advisory, LLC is incorporated herein by reference to Exhibit (d)(ii)(B) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99diibvasub-advisoryagre.htm)</u> |
|  | (iii) |  | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Sawgrass Asset Management LLC dated April 11, 2024, is incorporated herein by reference to Exhibit (d)(iii) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99diiisawgrasssub-adviso.htm)</u> |
|  | (iv) |  | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Brentview Investment Management, LLC dated April 11, 2024, is incorporated herein by reference to Exhibit (d)(iv) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99divbrentviewsub-adviso.htm)</u> |
|  | (v) |  | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Sun Life Capital Management (U.S.) LLC is incorporated herein by reference to Exhibit (d)(v) to the Registration Statement on Form N-1A, as filed on November 26, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924006951/sub-advisoryagreementslcxa.htm)</u> |
|  | (vi) |  | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Todd Asset Management, LLC](toddsub-advisoryagreemente.htm)</u> **- filed herewith** |
|  | (vii) |  | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Vident Advisory, LLC](vasub-advisoryagreementxam.htm)</u>**- filed herewith** |
| (e) | (i) | (A) | <u>[Distribution Agreement between the Trust and Quasar Distributors, LLC dated September 30, 2021 is incorporated herein by reference to Exhibit (e)(i)(A) to the Registration Statement on Form N-1A, as filed on October 28, 2021.](https://www.sec.gov/Archives/edgar/data/1540305/000089418921007557/exeia2021-09x30essxquasare.htm)</u> |
|  |  | (B) | <u>[Sixteenth Amendment to the Distribution Agreement with Quasar Distributors, LLC is incorporated herein by reference to Exhibit (e)(i)(B) to the Registrant's Registration Statement on Form N-1A, as filed on February 27, 2025.](https://www.sec.gov/Archives/edgar/data/1540305/000089418925001424/ess-qdetfdaa16xexecutionco.htm)</u> |
|  | (ii) |  | <u>[Form of Authorized Participant Agreement for Quasar Distributors, LLC is incorporated herein by reference to Exhibit (e)(iii) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/ap_agmt.htm)</u> |
| (f) |  |  | Not applicable. |
| (g) | (i) | (A) | <u>[Custody Agreement between the Trust and U.S. Bank National Association dated May 16, 2012 is incorporated herein by reference to Exhibit (g) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/custody_agmt.htm)</u> |
|  |  | (B) | <u>[Amended Exhibit V to the Custody Agreement is incorporated herein by reference to Exhibit (g)(i)(B) to the Registration Statement on Form N-1A](aam-amendmasteresscustodyx.htm)</u> **- filed herewith** |
| (h) | (i) | (A) | <u>[Fund Administration Servicing Agreement between the Trust and U.S. Bancorp Fund Services, LLC dated May 16, 2012 is incorporated herein by reference to Exhibit (h)(i) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/fundadmin_agmt.htm)</u> |
|  |  | (B) | <u>[Amended Exhibit U to the Fund Administration Servicing Agreement is incorporated herein by reference to Exhibit (h)(i)(B) to the Registration Statement on Form N-1A](aam-amendmasteressfundadmi.htm)</u>**- filed herewith** |

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| | | | |
|:---|:---|:---|:---|
| | (ii) | (A) | <u>[Fund Accounting Servicing Agreement between the Trust and U.S. Bancorp Fund Services, LLC dated May 16, 2012 is incorporated herein by reference to Exhibit (h)(ii) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/fundacct_agmt.htm)</u> |
| | | (B) | <u>[Amended Exhibit T to the Fund Accounting Servicing Agreement is incorporated herein by reference to Exhibit (h)(ii)(B) to the Registration Statement on Form N-1A](aam-amendmasteressfundacct.htm)</u>**- filed herewith** |
| | (iii) | (A) | <u>[Transfer Agent Agreement between the Trust and U.S. Bancorp Fund Services, LLC dated May 16, 2012 is incorporated herein by reference to Exhibit (d)(ii) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/ta_agmt.htm)</u> |
| | | (B) | <u>[Amended Exhibit T to the Transfer Agent Agreement is incorporated herein by reference to Exhibit (h)(iii)(B) to the Registration Statement on Form N-1A](aam-amendmasteresstax7225.htm)</u> **- filed herewith** |
| | (iv) | | <u>[Powers of Attorney dated April 10, 2025 are incorporated herein by reference to Exhibit (h)(iv) to the Registrant's Registration Statement on Form N-1A, as filed on April 25, 2025.](https://www.sec.gov/Archives/edgar/data/1540305/000089418925002782/a2025-04trusteeandofficers.htm)</u> |
| | (v) | | <u>[Compliance Services Agreement between the Trust and U.S. Bancorp Fund Services, LLC dated May 24, 2022 is incorporated herein by reference to Exhibit (h)(v)(A) to the Registrant's Registration Statement on Form N-1A, as filed on May 26, 2022.](https://www.sec.gov/Archives/edgar/data/1540305/000089418922004045/exhvaccoagreement2022.htm)</u> |
| | (vi) | | <u>[Certificate of Secretary dated July 13, 2023 with respect to powers of attorney is incorporated herein by reference to Exhibit (h)(vi) to the Registrant's Registration Statement on Form N-1A, as filed on July 25, 2023.](https://www.sec.gov/Archives/edgar/data/1540305/000089418923004935/esssecretaryscertificatere.htm)</u> |
| | (vii) | | <u>[Fee Waiver Agreement between the Trust, on behalf of the AAM SLC Low Duration Income ETF is incorporated herein by reference to Exhibit (h)(vii) to the Registration Statement on Form N-1A, as filed on November 26, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924006951/lodifeewaiveragreement1114.htm)</u> |
| (i) | (i) |  | <u>[Opinion and Consent of Counsel (AAM S&P 500 High Dividend Value ETF and AAM S&P Emerging Markets High Dividend Value ETF) is incorporated herein by reference to Exhibit (i) to the Registrant's Registration Statement on Form N-1A, as filed on October 18, 2017.](https://www.sec.gov/Archives/edgar/data/1540305/000089418917005508/opinion.htm)</u> |
|  | (ii) |  | <u>[Opinion and Consent of Counsel (AAM S&P Developed Markets High Dividend Value ETF) is incorporated herein by reference to Exhibit (i) to the Registrant's Registration Statement on Form N-1A, as filed on November 20, 2018.](https://www.sec.gov/Archives/edgar/data/1540305/000089418918006332/opinion.htm)</u> |
|  | (iii) |  | <u>[Opinion and Consent of Counsel (AAM Low Duration Preferred and Income Securities ETF) is incorporated herein by reference to Exhibit (i)(iii) to the Registrant's Registration Statement on Form N-1A, as filed on November 15, 2019.](https://www.sec.gov/Archives/edgar/data/1540305/000089418919007681/exiiiilegalopinionforpfld.htm)</u> |
|  | (iv) |  | <u>[Opinion and Consent of Counsel (AAM Bahl & Gaynor Small/Mid Cap Income Growth ETF) is incorporated herein by reference to Exhibit (i)(iv) to the Registrant's Registration Statement on Form N-1A, as filed on August 20, 2021.](https://www.sec.gov/Archives/edgar/data/0001540305/000089418921005681/aammlbopinionofcounsel0820.htm)</u> |
|  | (v) |  | <u>[Opinion and Consent of Counsel (AAM Transformers ETF) is incorporated herein by reference to Exhibit (i)(v) to the Registrant's Registration Statement on Form N-1A, as filed on June 13, 2022.](https://www.sec.gov/Archives/edgar/data/1540305/000089418922004330/a111232_x130890344v2xetfse.htm)</u> |
|  | (vi) |  | <u>[Opinion and Consent of Counsel (AAM Brentview Dividend Growth ETF, AAM Sawgrass U.S. Small Cap Quality Growth ETF, and AAM Sawgrass U.S. Large Cap Quality Growth ETF), is incorporated herein by reference to Exhibit (i)(vi) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99ivilegalopinionforaame.htm)</u> |
|  | (vii) |  | <u>[Opinion and Consent of Counsel (AAM SLC Low Duration Income ETF) is incorporated herein by reference to Exhibit (i)(vii) to the Registration Statement on Form N-1A, as filed on November 26, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924006951/n-1alegalopinionforaamslcl.htm)</u> |
|  | (viii) |  | <u>[O](legalopinionforaamtiivpea1.htm)[pinion and Cons](legalopinionforaamtiivpea1.htm)[ent of Co](legalopinionforaamtiivpea1.htm)[unsel (AAM](legalopinionforaamtiivpea1.htm)[Todd International In](legalopinionforaamtiivpea1.htm)[trinsic Value ETF)](legalopinionforaamtiivpea1.htm)</u> - **filed herewith** |
| (j) |  |  | <u>[Consent of Independent Registered Public Accounting Firm](exjcohenconsent-aamtiiv.htm)</u> **- filed herewith** |
| (k) |  |  | Not applicable. |
| (l) | (i) |  | <u>[Initial Capital Agreement between the Trust and U.S. Bancorp Fund Services, LLC dated April 23, 2012 is incorporated herein by reference to Exhibit (l)(i) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/capital_agmt.htm)</u> |
|  | (ii) |  | <u>[Letter of Representations between the Trust and Depository Trust Company dated May 21, 2012 is incorporated herein by reference to Exhibit (l)(ii) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/depository-lttr.htm)</u> |
| (m) | (i) | (A) | <u>[Rule 12b-1 Plan is incorporated herein by reference to Exhibit (m) to the Registrant's Registration Statement on Form N-1A, as filed on May 23, 2012.](https://www.sec.gov/Archives/edgar/data/1540305/000089418912002911/plan_12b1.htm)</u> |
|  |  | (B) | <u>[Amended Schedule A to Rule 12b-1 Plan](scheduleatorule12b-1planx2.htm)</u> **- filed herewith** |
| (n) |  |  | Not applicable. |
| (o) |  |  | Reserved. |

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| | | |
|:---|:---|:---|
| (p) | (i) | <u>[Code of Ethics for the Trust is incorporated herein by reference to Exhibit (p)(i) to the Registrant's Registration Statement on Form N-1A, as filed on September 28, 2021.](https://www.sec.gov/Archives/edgar/data/1540305/000089418921006933/esscodeofethics2020-04x21.htm)</u> |
|  | (ii) | <u>[Code of Ethics for Advisors Asset Management, Inc., is incorporated herein by reference to Exhibit (p)(iii) to the Registrant's Registration Statement on Form N-1A, as filed on October 18, 2017](https://www.sec.gov/Archives/edgar/data/1540305/000089418917005508/coe.htm)</u>**<u>[.](https://www.sec.gov/Archives/edgar/data/1540305/000089418917005508/coe.htm)</u>** |
|  | (iii) | <u>[Code of Ethics for Vident Asset Management is incorporated herein by reference to Exhibit (p)(iv) to the Registrant's Registration Statement on Form N-1A, as filed on June 26, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924003777/videntcodeofethics_finalx0.htm)</u> |
|  | (iv) | <u>[Code of Ethics for Brentview Investment Management, LLC is incorporated herein by reference to Exhibit (p)(iv) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99pivbrentviewcoe2023.htm)</u> |
|  | (v) | <u>[Code of Ethics for Sawgrass Asset Management LLC is incorporated herein by reference to Exhibit (p)(v) to the Registration Statement on Form N-1A, as filed on July 29, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924004384/ex99pvsawgrasscoe.htm)</u> |
|  | (vi) | <u>[Code of Ethics for SLC Management is incorporated herein by reference to Exhibit (p)(vi) to the Registration Statement on Form N-1A, as filed on November 26, 2024.](https://www.sec.gov/Archives/edgar/data/1540305/000089418924006951/slcmanagementcodeofethicsp.htm)</u> |
|  | (vii) | <u>[Code of Ethics for Todd Asset Management, LLC](tamcodeofethics_revisednov.htm)</u> **- filed herewith** |

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**Item 29. Persons Controlled by or Under Common Control with Registrant**

No person is directly or indirectly controlled by or under common control with the Registrant.

**Item 30. Indemnification**

The Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, adviser or principal underwriter of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee, and, subject to the provisions of the By-Laws, the Trust out of its assets may indemnify and hold harmless each and every Trustee and officer of the Trust from and against any and all claims, demands, costs, losses, expenses, and damages whatsoever arising out of or related to such Trustee's or officer's performance of his or her duties as a Trustee or officer of the Trust; provided that nothing herein contained shall indemnify, hold harmless or protect any Trustee or officer from or against any liability to the Trust or any Shareholder to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Every note, bond, contract, instrument, certificate or undertaking and every other act or thing whatsoever issued, executed or done by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been issued, executed or done only in or with respect to their or his or her capacity as Trustees or Trustee, and such Trustees or Trustee shall not be personally liable thereon.

Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Securities Act") may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission ("SEC") such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such Trustee, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

**Item 31. Business and Other Connections of Investment Adviser**

This Item incorporated by reference each investment adviser's Uniform Application for Investment Adviser Registration ("Form ADV") on file with the SEC, as listed below. Each Form ADV may be obtained, free of charge, at the SEC's website at www.adviserinfo.sec.gov. Additional information as to any other business, profession, vocation or employment of a substantial nature engaged in by each officer and director of the below-listed investment advisers is included in the Trust's Statement of Additional Information.

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| | |
|:---|:---|
| <u>Investment Adviser</u> | <u>SEC File No.</u> |
| Advisors Asset Management, Inc. | 801-62731 |
| Vident Asset Management | 801-114538 |
| Brentview Investment Management, LLC | 801-118493 |
| Sawgrass Asset Management LLC | 801-55243 |
| Todd Asset Management LLC | 801-55565 |

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**Item 32(a). Principal Underwriter**

Quasar Distributors, LLC (the "Distributor") serves as principal underwriter for the following investment companies registered under the Investment Company Act of 1940, as amended:

&nbsp;&nbsp;&nbsp;&nbsp;1.Abacus FCF ETF Trust

&nbsp;&nbsp;&nbsp;&nbsp;2.Advisor Managed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;3.Antares Private Credit Fund

&nbsp;&nbsp;&nbsp;&nbsp;4.Capital Advisors Growth Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;5.Chase Growth Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;6.Davidson Multi Cap Equity Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;7.Edgar Lomax Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;8.First Sentier American Listed Infrastructure Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;9.First Sentier Global Listed Infrastructure Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;10.Huber Large Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;11.Huber Mid Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;12.Huber Select Large Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;13.Huber Small Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;14.Logan Capital Broad Innovative Growth ETF, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;15.Medalist Partners MBS Total Return Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;16.Medalist Partners Short Duration Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;17.O'Shaughnessy Market Leaders Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;18.PIA BBB Bond Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;19.PIA High Yield (MACS) Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;20.PIA High Yield Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;21.PIA MBS Bond Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;22.PIA Short-Term Securities Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;23.Poplar Forest Cornerstone Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;24.Poplar Forest Partners Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;25.Pzena Emerging Markets Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;26.Pzena International Small Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;27.Pzena International Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;28.Pzena Mid Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;29.Pzena Small Cap Value Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;30.Reverb ETF, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;31.Scharf Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;32.Scharf Global Opportunity Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;33.Scharf Multi-Asset Opportunity Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;34.Shenkman Capital Floating Rate High Income Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;35.Shenkman Capital Short Duration High Income Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;36.The Aegis Funds

&nbsp;&nbsp;&nbsp;&nbsp;37.Allied Asset Advisors Funds

&nbsp;&nbsp;&nbsp;&nbsp;38.Angel Oak Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;39.Angel Oak Strategic Credit Fund

&nbsp;&nbsp;&nbsp;&nbsp;40.Brookfield Infrastructure Income Fund Inc.

&nbsp;&nbsp;&nbsp;&nbsp;41.Brookfield Investment Funds

&nbsp;&nbsp;&nbsp;&nbsp;42.Buffalo Funds

&nbsp;&nbsp;&nbsp;&nbsp;43.DoubleLine Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;44.EA Series Trust *(f/k/a Alpha Architect ETF Trust)*

&nbsp;&nbsp;&nbsp;&nbsp;45.AAM Bahl & Gaynor Small/Mid Cap Income Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;46.AAM Brentview Dividend Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;47.AAM Low Duration Preferred and Income Securities ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;48.AAM S&P 500 High Dividend Value ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;49.AAM Sawgrass U.S. Large Cap Quality Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;50.AAM Sawgrass U.S. Small Cap Quality Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;51.AAM SLC Low Duration Income ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;52.AAM Transformers ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;53.Acquirers Deep Value ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;54.Aptus Collared Investment Opportunity ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;55.Aptus Deferred Income ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;56.Aptus Defined Risk ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;57.Aptus Drawdown Managed Equity ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;58.Aptus Enhanced Yield ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;59.Aptus International Enhanced Yield ETF, Series of ETF Series Solutions

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&nbsp;&nbsp;&nbsp;&nbsp;60.Aptus Large Cap Enhanced Yield ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;61.Aptus Large Cap Upside ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;62.Bahl & Gaynor Dividend ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;63.Bahl & Gaynor Income Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;64.Bahl & Gaynor Small Cap Dividend ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;65.BTD Capital Fund, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;66.Carbon Strategy ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;67.ClearShares OCIO ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;68.ClearShares Piton Intermediate Fixed Income Fund, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;69.ClearShares Ultra-Short Maturity ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;70.Distillate International Fundamental Stability & Value ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;71.Distillate Small/Mid Cash Flow ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;72.Distillate U.S. Fundamental Stability & Value ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;73.ETFB Green SRI REITs ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;74.Hoya Capital High Dividend Yield ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;75.Hoya Capital Housing ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;76.LHA Market State Tactical Beta ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;77.LHA Market State Tactical Q ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;78.LHA Risk-Managed Income ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;79.McElhenny Sheffield Managed Risk ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;80.NETLease Corporate Real Estate ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;81.Opus Small Cap Value ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;82.The Acquirers Fund, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;83.The Brinsmere Fund - Conservative ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;84.The Brinsmere Fund - Growth ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;85.U.S. Global GO GOLD and Precious Metal Miners ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;86.U.S. Global JETS ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;87.U.S. Global Sea to Sky Cargo ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;88.U.S. Global Technology and Aerospace & Defense ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;89.US Vegan Climate ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;90.Vest 10 Year Interest Rate Hedge ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;91.Vest 2 Year Interest Rate Hedge ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;92.First American Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;93.FundX Investment Trust

&nbsp;&nbsp;&nbsp;&nbsp;94.The Glenmede Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;95.The GoodHaven Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;96.Harding, Loevner Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;97.Hennessy Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;98.Horizon Funds

&nbsp;&nbsp;&nbsp;&nbsp;99.Hotchkis & Wiley Funds

&nbsp;&nbsp;&nbsp;&nbsp;100.Intrepid Capital Management Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;101.Jacob Funds Inc.

&nbsp;&nbsp;&nbsp;&nbsp;102.The Jensen Quality Growth Fund Inc.

&nbsp;&nbsp;&nbsp;&nbsp;103.Kirr, Marbach Partners Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;104.Core Alternative ETF, Series of Listed Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;105.Wahed Dow Jones Islamic World ETF, Series of Listed Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;106.Wahed FTSE USA Shariah ETF, Series of Listed Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;107.LKCM Funds

&nbsp;&nbsp;&nbsp;&nbsp;108.LoCorr Investment Trust

&nbsp;&nbsp;&nbsp;&nbsp;109.MainGate Trust

&nbsp;&nbsp;&nbsp;&nbsp;110.ATAC Rotation Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;111.Coho Relative Value Equity Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;112.Coho Relative Value ESG Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;113.Cove Street Capital Small Cap Value Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;114.Jackson Square Large-Cap Growth Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;115.Jackson Square SMID-Cap Growth Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;116.Kensington Active Advantage Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;117.Kensington Defender Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;118.Kensington Dynamic Allocation Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;119.Kensington Hedged Premium Income ETF, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;120.Kensington Managed Income Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;121.LK Balanced Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;122.Leuthold Core ETF, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;123.Leuthold Core Investment Fund, Series of Managed Portfolio Series

------

&nbsp;&nbsp;&nbsp;&nbsp;124.Leuthold Global Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;125.Leuthold Grizzly Short Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;126.Leuthold Select Industries ETF, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;127.Muhlenkamp Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;128.Nuance Concentrated Value Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;129.Nuance Mid Cap Value Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;130.Olstein All Cap Value Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;131.Olstein Strategic Opportunities Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;132.Port Street Quality Growth Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;133.Principal Street High Income Municipal Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;134.Principal Street Short Term Municipal Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;135.Reinhart Genesis PMV Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;136.Reinhart International PMV Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;137.Reinhart Mid Cap PMV Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;138.Tortoise Global Water ESG Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;139.Tremblant Global ETF, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;140.Greenspring Income Opportunities Fund, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;141.Hood River International Opportunity Fund, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;142.Hood River New Opportunities Fund, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;143.Hood River Small-Cap Growth Fund, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;144.SanJac Alpha Core Plus Bond ETF, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;145.SanJac Alpha Low Duration ETF, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;146.SWP Growth & Income ETF, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;147.Vert Global Sustainable Real Estate ETF, Series of Manager Directed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;148.Mason Capital Fund Trust

&nbsp;&nbsp;&nbsp;&nbsp;149.Matrix Advisors Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;150.Monetta Trust

&nbsp;&nbsp;&nbsp;&nbsp;151.Nicholas Equity Income Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;152.Nicholas Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;153.Nicholas II, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;154.Nicholas Limited Edition, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;155.Oaktree Diversified Income Fund Inc.

&nbsp;&nbsp;&nbsp;&nbsp;156.Permanent Portfolio Family of Funds

&nbsp;&nbsp;&nbsp;&nbsp;157.Perritt Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;158.Procure ETF Trust II

&nbsp;&nbsp;&nbsp;&nbsp;159.Professionally Managed Portfolios

&nbsp;&nbsp;&nbsp;&nbsp;160.Prospector Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;161.Provident Mutual Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;162.Abbey Capital Futures Strategy Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;163.Abbey Capital Multi-Asset Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;164.Adara Smaller Companies Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;165.Aquarius International Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;166.Boston Partners All Cap Value Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;167.Boston Partners Emerging Markets Dynamic Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;168.Boston Partners Global Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;169.Boston Partners Global Sustainability Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;170.Boston Partners Long/Short Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;171.Boston Partners Long/Short Research Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;172.Boston Partners Small Cap Value Fund II, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;173.Campbell Systematic Macro Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;174.F/m 10-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;175.F/m 2-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;176.F/m 3-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;177.F/m Emerald Life Sciences Innovation ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;178.F/m High Yield 100 ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;179.F/m Investments Large Cap Focused Fund Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;180.F/m Opportunistic Income ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;181.F/m Ultrashort Treasury Inflation-Protected Security (TIPS) ETF Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;182.Motley Fool 100 Index ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;183.Motley Fool Capital Efficiency 100 Index ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;184.Motley Fool Global Opportunities ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;185.Motley Fool Mid-Cap Growth ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;186.Motley Fool Next Index ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;187.Motley Fool Small-Cap Growth ETF, Series of The RBB Fund, Inc.

------

&nbsp;&nbsp;&nbsp;&nbsp;188.Optima Strategic Credit Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;189.SEG Partners Long/Short Equity Fund

&nbsp;&nbsp;&nbsp;&nbsp;190.SGI Dynamic Tactical ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;191.SGI Enhanced Core ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;192.SGI Enhanced Global Income ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;193.SGI Enhanced Market Leaders ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;194.SGI Global Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;195.SGI Peak Growth Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;196.SGI Prudent Growth Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;197.SGI Small Cap Core Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;198.SGI U.S. Large Cap Core ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;199.SGI U.S. Large Cap Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;200.SGI U.S. Small Cap Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;201.US Treasury 10 Year Note ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;202.US Treasury 12 Month Bill ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;203.US Treasury 2 Year Note ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;204.US Treasury 20 Year Bond ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;205.US Treasury 3 Month Bill ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;206.US Treasury 3 Year Note ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;207.US Treasury 30 Year Bond ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;208.US Treasury 5 Year Note ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;209.US Treasury 6 Month Bill ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;210.US Treasury 7 Year Note ETF, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;211.WPG Partners Select Hedged Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;212.WPG Partners Select Small Cap Value Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;213.WPG Partners Small Cap Value Diversified Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;214.The RBB Fund Trust

&nbsp;&nbsp;&nbsp;&nbsp;215.RBC Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;216.Rockefeller Municipal Opportunities Fund

&nbsp;&nbsp;&nbsp;&nbsp;217.Series Portfolios Trust

&nbsp;&nbsp;&nbsp;&nbsp;218.Tax-Exempt Private Credit Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;219.Thompson IM Funds, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;220.Tortoise Capital Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;221.Bright Rock Mid Cap Growth Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;222.Bright Rock Quality Large Cap Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;223.CrossingBridge Low Duration High Income Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;224.CrossingBridge Nordic High Income Bond Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;225.CrossingBridge Responsible Credit Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;226.CrossingBridge Ultra-Short Duration Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;227.RiverPark Strategic Income Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;228.Dearborn Partners Rising Dividend Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;229.Jensen Global Quality Growth Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;230.Jensen Quality MidCap Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;231.Rockefeller Climate Solutions Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;232.Rockefeller US Small Cap Core Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;233.USQ Core Real Estate Fund

&nbsp;&nbsp;&nbsp;&nbsp;234.Wall Street EWM Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;235.Wisconsin Capital Funds, Inc.

Item 32(b)&nbsp;&nbsp;&nbsp;&nbsp;The following are the Officers and Manager of the Distributor, the Registrant's underwriter. The Distributor's principal business address is 190 Middle Street, Suite 301, Portland, Maine 04101.

---

| | | | |
|:---|:---|:---|:---|
| <u>Name</u> | <u>Address</u> | <u>Position with Underwriter</u> | <u>Position with Registrant</u> |
| Teresa Cowan | 190 Middle Street, Suite 301, Portland, Maine 04101 | President/Manager |  |
| Chris Lanza | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President |  |
| Kate Macchia | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President |  |

---

------

---

| | | | |
|:---|:---|:---|:---|
| <u>Name</u> | <u>Address</u> | <u>Position with Underwriter</u> | <u>Position with Registrant</u> |
| Susan L. LaFond | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President and Chief Compliance Officer and Treasurer |  |
| Kelly B. Whetstone | 190 Middle Street, Suite 301, Portland, Maine 04101 | Secretary |  |
| Weston Sommers | 190 Middle Street, Suite 301, Portland, Maine 04101 | Financial and Operations Principal and Chief Financial Officer |  |

---

**Item 32(c). Not applicabl**e

**Item 33. Location of Accounts and Records**

The books and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 are maintained at the following locations:

---

| | | |
|:---|:---|:---|
| **Records Relating to:** | **Are located at:** | |
| Registrant's Fund Administrator, Fund Accountant and Transfer Agent | U.S. Bancorp Fund Services, LLC<br>d/b/a U.S. Bank Global Fund Services<br>615 East Michigan Street, 3<sup>rd</sup> Floor<br>Milwaukee, Wisconsin 53202 |  |
| Registrant's Custodian | U.S. Bank, National Association<br>1555 N. Rivercenter Drive, Suite 302 <br>Milwaukee, Wisconsin 53212 |  |
| Registrant's Principal Underwriters | Quasar Distributors, LLC<br>Three Canal Plaza, Suite 100<br>Portland, Maine 04101 |  |
| Registrant's Investment Adviser and Sub-Advisers | Advisors Asset Management, Inc.<br>18925 Base Camp Road, Suite 203<br>Monument, Colorado 80132 | Vident Asset Management<br>1125 Sanctuary Parkway, Suite 515<br>Alpharetta, Georgia 30009 |
|  | Brentview Investment Management LLC<br>1 Northfield Plaza, Suite 522<br>Northfield, Illinois 60093 | Sawgrass Asset Management<br>5000 Sawgrass Village Circle, Suite 32<br>Ponte Vedra, Florida 32082 |
|  | SLC Management<br>96 Worcester Street<br>Wellesley, Massachusetts 02481 | Todd Asset Management, LLC<br>101 South 5th Street, Suite 3100<br>Louisville, Kentucky 40202 |

---

**Item 34. Management Services**

Not applicable.

**Item 35. Undertakings**

Not applicable.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment to its Registration Statement on Form N-1A (this "Amendment") under rule 485(b) under the Securities Act and has duly caused this Amendment to be signed below on its behalf by the undersigned, duly authorized, in the City of Chicago, State of Illinois, on July 24, 2025.

---

| |
|:---|
| **ETF Series Solutions** |
| /s/ Noelle-Nadia A. Filali |
| Noelle-Nadia A. Filali <br>Assistant Secretary |

---

Pursuant to the requirements of the Securities Act of 1933, this Amendment has been signed below by the following persons in the capacities indicated on July 24, 2025.

---

| | |
|:---|:---|
| <u>Signature</u> | <u>Title</u> |
| \* David A. Massart | Trustee |
| David A. Massart | |
| \* Janet D. Olsen | Trustee |
| Janet D. Olsen | |
| \* Leonard M. Rush | Trustee |
| Leonard M. Rush | |
| \* Michael A. Castino | Trustee |
| Michael A. Castino | |
| <u>\* Kristina R. Nelson</u> | President |
| Kristina R. Nelson | |
| <u>\* Kristen M. Weitzel</u> | Treasurer |
| Kristen M. Weitzel | |

---

\*By: <u>/s/ Noelle-Nadia A. Filali</u>

&nbsp;&nbsp;&nbsp;&nbsp;Noelle-Nadia A. Filali

&nbsp;&nbsp;&nbsp;&nbsp;pursuant to Powers of Attorney

------

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | <br>**Description** |
| (d)(i)(B) | <u>[Amended Schedule A to the Investment Advisory Agreement is incorporated herein by reference to Exhibit (d)(i)(B) to the Registration Statement on Form N-1A](aamadvisoryagreement-amend.htm)</u>  |
| (d)(vi) | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Todd Asset Management, LLC](toddsub-advisoryagreemente.htm)</u> |
| (d)(vii) | <u>[Investment Sub-Advisory Agreement between the Trust, Advisors Asset Management, Inc., and Vident Advisory, LLC](vasub-advisoryagreementxam.htm)</u> |
| (g)(i) (B) | <u>[Amended Exhibit V to the Custody Agreement is incorporated herein by reference to Exhibit (g)(i)(B) to the Registration Statement on Form N-1A](aam-amendmasteresscustodyx.htm)</u> |
| (h)(i)(B) | <u>[Amended Exhibit U to the Fund Administration Servicing Agreement is incorporated herein by reference to Exhibit (h)(i)(B) to the Registration Statement on Form N-1A](aam-amendmasteressfundadmi.htm)</u>  |
| (h)(ii)(B) | <u>[Amended Exhibit T to the Fund Accounting Servicing Agreement is incorporated herein by reference to Exhibit (h)(ii)(B) to the Registration Statement on Form N-1A](aam-amendmasteressfundacct.htm)</u>  |
| (h)(iii)(B) | <u>[Amended Exhibit T to the Transfer Agent Agreement is incorporated herein by reference to Exhibit (h)(iii)(B) to the Registration Statement on Form N-1A](aam-amendmasteresstax7225.htm)</u> |
| (i)(viii) | <u>[Opinion and Consent of Counsel (AAM Todd International Intrinsic Value ETF)](legalopinionforaamtiivpea1.htm)</u> |
| (j) | <u>[Consent of Independent Registered Public Accounting Firm](exjcohenconsent-aamtiiv.htm)</u> |
| (m)(i)(B) | <u>[Amended Schedule A to Rule 12b-1 Plan](scheduleatorule12b-1planx2.htm)</u> |
| (p)(vii) | <u>[Code of Ethics for Todd Asset Management, LLC](tamcodeofethics_revisednov.htm)</u>  |

---

## Ex-99.(D)(I)(B)

**SCHEDULE A**

**to the**

**INVESTMENT ADVISORY AGREEMENT**

**Dated October 7, 2022 between**

**ETF SERIES SOLUTIONS**

**and**

**ADVISORS ASSET MANAGEMENT, INC.**

The Trust will pay to the Adviser as compensation for the Adviser's services rendered, a fee, computed daily at an annual rate based on the average daily net assets of the respective Fund in accordance with the following fee schedule:

---

| | | |
|:---|:---|:---|
| **<u>Fund</u>** | **<u>Rate</u>** | **<u>Effective</u> <u>Date</u>** |
| AAM S&P 500 High Dividend Value ETF | 0.29% | April 28, 2023 |
| AAM Low Duration Preferred and Income Securities ETF | 0.45% | April 28, 2023 |
| AAM Transformers ETF | 0.49% | January 19, 2023 |
| AAM Brentview Dividend Growth ETF | 0.49% | April 11, 2024 |
| AAM Sawgrass U.S. Large Cap Quality Growth ETF | 0.49% | April 11, 2024 |
| AAM Sawgrass U.S. Small Cap Quality Growth ETF | 0.55% | April 11, 2024 |
| AAM SLC Low Duration Income ETF | 0.39% | July 11, 2024 |
| AAM Blue Chip Covered Call ETF | 0.35% | January 16, 2025 |
| AAM Todd International Intrinsic Value ETF | 0.54% | January 16, 2025 |

---

IN WITNESS WHEREOF, the parties hereto have caused this Schedule A to be signed on their behalf by their duly authorized officers as of January 16, 2025.

---

| |
|:---|
| ETF SERIES SOLUTIONS, on behalf of each Fund listed on this Schedule A  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ETF SERIES SOLUTIONS |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Noelle-Nadia A. Filali</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Noelle-Nadia A. Filali |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Assistant Secretary |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADVISORS ASSET MANAGEMENT, INC. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Marilee Ferone</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Marilee Ferone |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: EVP, Asset Management Solutions  |

---

## Ex-99.(D)(Vi)

**ETF SERIES SOLUTIONS**

**INVESTMENT SUB-ADVISORY AGREEMENT**

**with** 

**TODD ASSET MANAGEMENT, LLC**

This INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement") is made as of January 16, 2025 by and between ADVISORS ASSET MANAGEMENT, INC., a Delaware corporation with its principal place of business at 18925 Base Camp Road, Suite 203, Monument, Colorado 80132 (the "Adviser"), ETF SERIES SOLUTIONS (the "Trust"), and TODD ASSET MANAGEMENT, LLC, an Kentucky limited liability company with its principal place of business located at 101 South 5<sup>th</sup> Street, Suite 3100, Louisville, Kentucky 40202 (the "Sub-Adviser").

**W I T N E S S E T H**

WHEREAS, the Trust is an open-end management investment company, registered as such under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 (the "Advisers Act"); and

WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated October 7, 2022, as amended to add additional series, with the Trust; and

WHEREAS, the Sub-Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and is engaged in the business of supplying investment advice as an independent contractor; and

WHEREAS, the Investment Advisory Agreement contemplates that the Adviser may appoint a sub-adviser to perform some or all of the services for which the Adviser is responsible; and

WHEREAS, the Sub-Adviser is willing to furnish such services to the Adviser and each Fund listed in <u>Schedule A</u> to this Agreement (each a "Fund" and, collectively, the "Funds"), as such Schedule may be amended from time to time upon mutual agreement of the parties.

NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the parties do hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Duties of the Sub-Adviser.** Subject to supervision and oversight of the Adviser and the Board of Trustees (the "Board"), and in accordance with the terms and conditions of the Agreement, the Sub-Adviser shall manage all of the securities and other assets of the Funds entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Funds' respective investment objectives, guidelines, policies and restrictions as stated in each Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall, subject to subparagraph (b), determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash as is permissible.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Prospectus, the Statement of Additional Information, the written instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and provided to the Sub-Adviser and the Trust's policies and procedures provided to the Sub-Adviser and will conform to and comply with the requirements of the 1940 Act, the Advisers Act, the Commodity Exchange Act, the Internal Revenue Code of 1986, as amended (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall determine the Assets to be purchased or sold by the Funds as provided in subparagraph (a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act, as requested by the Adviser. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust's administrator, the Trust's custodian and foreign custodians, the Trust's transfer agent and pricing agents and all other agents and representatives of the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser's fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients that may differ from the advice given or the timing or nature of action taken for a particular Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser will have no obligation to advise, initiate or take any other action on behalf of the Adviser, the Funds or the Assets in any legal proceedings (including, without limitation, class actions and bankruptcies) relating to the securities comprising the Assets or any other matter. Sub-Adviser will not file proofs of claims relating to the securities comprising the Assets or any other matter and will not notify the Adviser, the Funds or the Trust's custodian of class action settlements or bankruptcies relating to the Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and

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procedures of the Funds. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets which it sub-advises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Funds as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall maintain books and records with respect to the Funds' securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the U.S. Security and Exchange Commission ("SEC") or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;The fair valuation of securities in a Fund may be required when the Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund's portfolio. The Sub-Adviser will provide assistance in determining the fair value of the Assets, as necessary and reasonably requested by the Adviser or its agent, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser if market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser will provide information and perform reviews, as necessary and reasonably requested by the Adviser or its agent, with respect to any component of the liquidity risk management program adopted by the Fund(s) in accordance with SEC Rule 22e-4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Duties of the Adviser.** The Adviser shall continue to have responsibility for all services to be provided to the Funds pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Prospectus, the Statement of Additional Information, the written instructions and directions of the Board, the requirements of the 1940 Act, the Code, and all other applicable federal laws and regulations, as each is amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Delivery of Documents.** The Adviser has furnished the Sub-Adviser with copies of each of the following documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Trust's Agreement and Declaration of Trust (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust");

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Amended and Restated By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Prospectus and Statement of Additional Information of the Funds, as amended from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;A list of the Trust's principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The terms and conditions of exemptive and no-action relief granted to the Trust, as amended from time to time.

The Adviser shall promptly furnish the Sub-Adviser from time to time with copies of all amendments of or supplements to the foregoing. Until so provided, the Sub-Adviser may continue to rely on those documents previously provided. The Adviser shall not, and shall not permit any of the Funds to use the Sub-Adviser's name or make representations regarding Sub-Adviser or its affiliates without prior written consent of Sub-Adviser, such consent not to be unreasonably withheld. Notwithstanding the foregoing, the Sub-Adviser's approval is not required when the information regarding the Sub-Adviser used by the Adviser or the Fund is limited to information disclosed in materials provided by the Sub-Adviser to the Adviser in writing specifically for use in the Fund's registration statement, as amended or supplemented from time to time, or in Fund shareholder reports or proxy statements and the information is used (a) as required by applicable law, rule or regulation, in the Prospectus of the Fund or in Fund shareholder reports or proxy statements; or (b) as may be otherwise specifically approved in writing by the Sub-Adviser prior to use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Compensation to the Sub-Adviser.** For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefore, a sub-advisory fee at the rate specified in <u>Schedule A</u> which is attached hereto and made part of this Agreement. The fee will be calculated based on the daily value of the Assets under the Sub-Adviser's management (as calculated as described in the Fund's registration statement), shall be computed daily, and will be paid to the Sub-Adviser not less than monthly in arrears. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretations), the Sub-Adviser may, in its sole discretion and from time to time, waive a portion of its fee.

In the event of termination of this Agreement, the fee provided in this Section shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect; provided, however that any minimum annual fee for any Fund (as noted on Schedule A) will not be prorated if this Agreement is terminated with respect to such Fund within twelve (12) months of its inception under this Agreement, but, rather, such minimum annual fee shall be paid by the Adviser in full (minus any investment management fees already paid during such period) at the time of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.Expenses.** The Sub-Adviser will furnish, at its expense, all necessary facilities and personnel, including personnel compensation, expenses and fees required for the Sub-Adviser to perform its duties under this Agreement; administrative facilities, including operations and bookkeeping, and all

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equipment necessary for the efficient conduct of the Sub-Adviser's duties under this Agreement. The Sub-Adviser may enter into an agreement with the Funds to limit the operating expenses of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Indemnification.** The Sub-Adviser shall indemnify and hold harmless the Adviser, the Trust, all affiliated persons thereof (within the meaning of Section 2(a)(3) of the Investment Company Act) and all controlling persons (as described in Section 15 of the Securities Act of 1933, as amended) from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) however arising from or in connection with the performance of the Sub-Adviser's obligations under this Agreement to the extent resulting from or relating to Sub-Adviser's own willful misfeasance, fraud, bad faith or gross negligence, or to the reckless disregard of its duties under this Agreement.

The Adviser shall indemnify and hold harmless the Sub-Adviser and all affiliated persons thereof from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) however arising from or in connection with this Agreement (including, without limitation, any claims of infringement or misappropriation of the intellectual property rights of a third party against the Sub-Adviser or any affiliated person relating to any index or index data provided to Sub-Adviser by the Adviser or Adviser's agent and used by the Sub-Adviser in connection with performing its duties under this Agreement); provided, however, that the Adviser's obligation under this <u>Section 6</u> shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise directly related to the Sub-Adviser's own willful misfeasance, fraud, bad faith or gross negligence, or to the reckless disregard of its duties under this Agreement.

Notwithstanding anything to the contrary contained herein, no party to this Agreement shall be responsible or liable for its failure to perform under this Agreement or for any losses to the Assets resulting from any event beyond the reasonable control of such party or its agents, including, but not limited to, nationalization, expropriation, devaluation, seizure or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, levies or other charges affecting the Assets; or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any order or regulation of any banking or securities industry including changes in market rules and market conditions affecting the execution or settlement of transactions; or acts or war, terrorism, insurrection or revolution; or acts of God, or any other similar event. In no event, shall any party be responsible for incidental, consequential or punitive damages hereunder.

The provisions of this Section shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.Representations and Warranties of Sub-Adviser.** The Sub-Adviser represents and warrants to the Adviser and the Trust as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser is registered with the SEC as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser's ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will also promptly notify the Trust and the Adviser if it, a member of its executive management or portfolio manager for the Assets is served or otherwise receives notice of any action, suit, proceeding or investigation, at law or in equity, before or

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by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or relating to the investment advisory services of the Sub-Adviser (other than any routine regulatory examinations);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)' stated investment objectives, guidelines and policies or any applicable law or regulation; or (b) any material breach of any of the Fund(s)' or the Sub-Adviser's policies, guidelines or procedures relating to the Funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser is fully authorized under all applicable law and regulation to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of Kentucky with the power to own and possess its assets and carry on its business as it is now being conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser's powers and have been duly authorized by all necessary action on the part of its corporate members or board, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser's governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement is a valid and binding agreement of the Sub-Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate, current and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall not divert any Fund's portfolio securities transactions to a broker or dealer in consideration of such broker or dealer's promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser agrees to maintain an appropriate level of errors and omissions or professional liability insurance coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.Duration and Termination.** The effectiveness and termination dates of this Agreement shall be determined separately for each Fund as described below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)&nbsp;&nbsp;&nbsp;&nbsp;Duration</u>. This Agreement shall become effective with respect to a Fund upon the latest of (i) the approval by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval; (ii) the approval of a majority of the Fund's outstanding voting securities, if required by the 1940 Act; and (iii) the commencement of the Sub-Adviser's management of the Fund. This Agreement shall continue in effect for a period of two years from the effective date described in this sub-paragraph, subject thereafter to being continued in force and effect from year to year if specifically approved each year by the Board or by the vote of a majority of the Fund's outstanding voting securities. In addition to the foregoing, each renewal of this Agreement must be approved by the vote of a majority of the Board who are not parties to this Agreement or interested persons of any such

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party, cast in person at a meeting called for the purpose of voting on such approval. Prior to voting on the renewal of this Agreement, the Board may request and evaluate, and the Sub-Adviser shall furnish, such information as may reasonably be necessary to enable the Board to evaluate the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)&nbsp;&nbsp;&nbsp;&nbsp;Termination</u>. Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time with respect to a Fund, without payment of any penalty:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)By vote of a majority of the Board, or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days' written notice to the Sub-Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)By the Adviser upon breach by the Sub-Adviser of any representation or warranty contained in Section 7 and Section 9 hereof, which shall not have been cured within twenty (20) days of the Sub-Adviser's receipt of written notice of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)By the Adviser immediately upon written notice to the Sub-Adviser if the Sub-Adviser becomes unable to discharge its duties and obligations under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)By the Sub-Adviser upon ninety (90) days' written notice to the Adviser and the Board.

This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust upon notice to the Sub-Adviser. As used in this <u>Section 8</u>, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.Regulatory Compliance Program of the Sub-Adviser.** The Sub-Adviser hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that are reasonably designed to prevent violation of the "federal securities laws" (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this <u>Section 9(b)</u>, along with the policies and procedures referred to in <u>Section 9(a)</u>, are referred to herein as the Sub-Adviser's "Compliance Program").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.Confidentiality**. Subject to the duty of the Adviser or Sub-Adviser to comply with applicable law and regulation, including any demand or request of any regulatory, governmental or tax authority having jurisdiction, the parties hereto shall treat as confidential all non-public information pertaining to the Funds and the actions of the Sub-Adviser and the Funds in respect thereof. It is understood that any information or recommendation supplied by the Sub-Adviser in connection with the performance of its obligations hereunder is to be regarded as confidential and for use only by the Adviser, the Funds, the Board, or such persons as the Adviser may designate in connection with the Funds. It is also understood that any information supplied to the Sub-Adviser in connection with the performance of its obligations hereunder is to be regarded as confidential and for use only by the Sub-Adviser, its affiliates and agents in connection with its obligation to provide investment advice and other services to the Funds and to assist or enable the effective management of the Adviser's and the Funds' overall

------

relationship with the Sub-Adviser and its affiliates. The parties acknowledge and agree that all nonpublic personal information with regard to shareholders in the Funds shall be deemed proprietary and confidential information of the Adviser, and that the Sub-Adviser shall use that information solely in the performance of its duties and obligations under this Agreement and shall take reasonable steps to safeguard the confidentiality of that information. Further, the Sub-Adviser shall maintain and enforce adequate security and oversight procedures with respect to all materials, records, documents and data relating to any of its responsibilities pursuant to this Agreement including all means for the effecting of investment transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.Reporting of Compliance Matters.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall promptly provide to the Trust's Chief Compliance Officer ("CCO") the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;a report of any material violations of the Sub-Adviser's Compliance Program or any "material compliance matters" (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser's Compliance Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser's Compliance Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a copy of the Sub-Adviser's chief compliance officer's report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser's Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)an annual (or more frequently as the Trust's CCO may reasonably request) representation regarding the Sub-Adviser's compliance with Section 7 and Section 9 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser shall also provide the Trust's CCO with reasonable access, during normal business hours, to the Sub-Adviser's facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.Governing Law.** This Agreement shall be governed by the laws of the State of Delaware, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.Severability.** Should any part of this Agreement be held invalid by a court decision, statute, regulation, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.Notice.** Any notice, advice, document, report or other client communication to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid or electronically addressed by the party giving notice to the other party at the last address furnished by the other party. By consenting to the electronic delivery of any notice, advice, document, report or other client communication in respect of this Agreement or as required pursuant to applicable law, the Adviser authorizes the Sub-Adviser to deliver all communications by email or other electronic means.

------

---

| | |
|:---|:---|
| To the Adviser at: | Advisors Asset Management, Inc.<br>300 Carnegie Center, Suite 300<br>Princeton, NJ 08540<br>Attention: Marilee Ferone<br>Email: Marilee.ferone@aamlive.com |
| To the Trust at: | U.S. Bancorp Fund Services, LLC<br>615 East Michigan Street&nbsp;&nbsp;&nbsp;&nbsp;<br>Milwaukee, Wisconsin 53202<br>Attention: Joshua J. Hinderliter, Vice President<br>Email: Josh.Hinderliter@usbank.com |
| To the Sub-Adviser at: | Todd Asset Management, LLC<br>101 South 5<sup>th</sup> Street, Suite 3100<br>Louisville, Kentucky 40202 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.Amendment of Agreement.** This Agreement may be amended only by written agreement of the Adviser, the Sub-Adviser and the Trust, and only in accordance with the provisions of the 1940 Act and the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.Representations and Warranties of the Adviser.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is an "eligible contract participant" as defined in Section 1a(18) of the U.S. Commodity Exchange Act (the "CEA") and U.S. Commodity Futures Trading Commission ("CFTC") Rule 1.3(m) thereunder and a "qualified eligible person" as defined in Rule 4.7 of the CFTC. The Adviser consents to each Fund being treated as an exempt account under Rule 4.7 of the CFTC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser is not registered with the National Futures Association as a commodity pool operator or commodity trading adviser because it does not engage in any activities requiring such registration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and performance by the Adviser and the Funds of this Agreement have been duly authorized by all necessary action on the part of the Adviser and the Board (including full authority to bind the Funds to the terms of this Agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser will promptly notify the Sub-Adviser if any of the above representations in this Section are no longer true and accurate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.Entire Agreement.** This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.Interpretation.** Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act will be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules,

------

regulations or orders of the SEC validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a majority of the outstanding voting securities," "interested persons," "assignment," and "affiliated persons," as used herein will have the meanings assigned to them by Section 2(a) of the 1940 Act. In addition, where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is relaxed by a rule, regulation or order of the SEC, whether of special or of general application, such provision will be deemed to incorporate the effect of such rule, regulation or order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.Headings.** The headings in the sections of this Agreement are inserted for convenience of reference only and will not constitute a part hereof.

In the event the terms of this Agreement are applicable to more than one Fund of the Trust as specified in <u>Schedule A</u> attached hereto, the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of <u>Section 8</u> of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.Miscellaneous.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order.

**PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.**

[*Signature page follows*]

------

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed as of the day first set forth above.

---

| |
|:---|
| ETF SERIES SOLUTIONS, on behalf of each Fund listed on this Schedule A  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADVISORS ASSET MANAGEMENT, INC. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Marilee Ferone</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Marilee Ferone |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: EVP, Asset Management Solutions |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TODD ASSET MANAGEMENT, LLC |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Curtiss M. Scott, Jr</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Curtiss M. Scott, Jr |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: President & C.I.O. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ETF SERIES SOLUTIONS |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Noelle-Nadia A. Filali</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Noelle-Nadia A. Filali  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Assistant Secretary |

---

*Signature Page to<br>Sub-Advisory Agreement*

------

**SCHEDULE A** 

**to the**

**INVESTMENT SUB-ADVISORY AGREEMENT**

**Dated January 16, 2025 between**

**ADVISORS ASSET MANAGEMENT, INC.**

**and**

**TODD ASSET MANAGEMENT, LLC**

**and**

**ETF SERIES SOLUTIONS**

The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser's services rendered, a fee, computed daily at an annual rate based on the daily net assets of the respective Fund in accordance with the following fee schedule:

---

| | |
|:---|:---|
| **<u>Fund</u>** | **<u>Rate</u>** |
| AAM Todd International Intrinsic Value ETF | 0.13% |

---

## Ex-99.(D)(Vii)

**SCHEDULE A**

**to the**

**INVESTMENT SUB-ADVISORY AGREEMENT**

**Dated April 20, 2023 between** 

**ADVISORS ASSET MANAGEMENT, INC.**

**and**

**VIDENT ADVISORY, LLC**

**and**

**ETF SERIES SOLUTIONS**

---

| | | |
|:---|:---|:---|
| **<u>Fund</u>** | **<u>Minimum</u> <u>Fee</u>** | **<u>Rate</u>** |
| AAM Transformers ETF | $30000 | 0.055% on the first $250 million; 0.045% on the next $250 million; and 0.035% on net assets in excess of $500 million |
| AAM S&P 500 High Dividend Value ETF | $12000 | 0.04% on the first $250 million; 0.03% on the next $250 million; and<br>0.02% on net assets in excess of $500 million |
| AAM Low Duration Preferred and Income Securities ETF | $20000 | 0.04% on the first $250 million; 0.03% on the next $250 million; and<br>0.02% on net assets in excess of $500 million |
| AAM Brentview Dividend Growth ETF | $40000 | 0.05% on the first $250 million;<br>0.045% on the second $250 million; and 0.04% on all assets thereafter |
| AAM Sawgrass U.S. Large Cap Quality Growth ETF | $40000 | 0.05% on the first $250 million;<br>0.045% on the second $250 million; and 0.04% on all assets thereafter |
| AAM Sawgrass U.S. Small Cap Quality Growth ETF | $40000 | 0.05% on the first $250 million;<br>0.045% on the second $250 million; and 0.04% on all assets thereafter |
| AAM Blue Chip Covered Call ETF | $40000 | 0.05% on the first $250 million;<br>0.045% on the second $250 million; and 0.04% on all assets thereafter |
| AAM Todd International Intrinsic Value ETF | $40000 | 0.05% on the first $250 million;<br>0.045% on the second $250 million; and 0.04% on all assets thereafter |

---

[*Signatures to follow*]

------

IN WITNESS WHEREOF, the parties hereto have caused this Schedule A to be signed on their behalf by their duly authorized officers as of January 16, 2025.

---

| |
|:---|
| ETF SERIES SOLUTIONS, on behalf of each Fund listed on this Schedule A  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADVISORS ASSET MANAGEMENT, INC. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Marilee Ferone</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Marilee Ferone |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: EVP, Asset Management Solutions  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VIDENT ADVISORY, LLC |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Amrita Nandakumar</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Amrita Nandakumar |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: President |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ETF SERIES SOLUTIONS |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/</u> <u>Noelle-Nadia A. Filali</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Noelle-Nadia A. Filali |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Assistant Secretary |

---

## Ex-99.(G)(I)

**Redacted**

**Fee Schedule has been excluded because it is both (1) not material and (2) would likely cause competitive harm to the registrant if publicly disclosed**

**AMENDMENT TO THE** 

**ETF SERIES SOLUTIONS CUSTODY AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;**THIS AMENDMENT,** effective as of the last date on the signature block, to the Custody Agreement dated as of May 16, 2012, as amended (the "Agreement"), is entered into by and between **ETF SERIES SOLUTIONS**, a Delaware statutory trust (the "Trust"), and **U.S. BANK NATIONAL ASSOCIATION,** a national banking association (the "Custodian").

**RECITALS**

**WHEREAS,** the parties to the Agreement desire to amend the Agreement to add the following fund to Exhibit V, and to take into account present circumstances**:**

-AAM Todd International Intrinsic Value ETF

**WHEREAS,** Article XV, Section 15.02 of the Agreement allows for its amendment by a written instrument executed by both parties.

**NOW, THEREFORE,** the parties hereby amend the Agreement as follows:

**Exhibit V is hereby superseded and replaced with Exhibit V attached hereto.** 

Except to the extent amended hereby, the Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;

**IN WITNESS WHEREOF**, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year last written below.

---

| | | | |
|:---|:---|:---|:---|
| **ETF SERIES SOLUTIONS** | **ETF SERIES SOLUTIONS** | **U.S. BANK, N.A.** | **U.S. BANK, N.A.** |
| By: | /s/ Noelle-Nadia A. Filali | By: | /s/ Gregory Farley |
| Name: | Noelle-Nadia A. Filali | Name: | Gregory Farley |
| Title: | Assistant Secretary | Title: | Senior Vice President |
| Date: | June 25, 2025 | Date: | June 26, 2025 |

---

------

**Exhibit V to the ETF Series Solutions Custody Agreement**

**AAM S&P 500 High Dividend Value ETF**

**AAM S&P Emerging Markets High Dividend Value ETF**

**AAM S&P Developed Markets High Dividend Value ETF**

**AAM Low Duration Preferred and Income Securities ETF**

**AAM Transformers ETF**

**AAM Brentview Dividend Growth ETF**

**AAM Sawgrass U.S. Small Cap Quality Growth ETF**

**AAM Sawgrass U.S. Large Cap Quality Growth ETF**

**AAM SLC Low Duration Income ETF**

**AAM Todd International Intrinsic Value ETF**

**Base Fee for Domestic Custody Services**

The following reflects the greater of the basis point fee or annual minimum1 where Advisors Asset Management, Inc. acts as investment adviser to the fund(s) in the ETF Series Solutions Trust.

**Annual Minimum per Fund2&nbsp;&nbsp;&nbsp;&nbsp;Basis Points on Trust AUM2**

Funds 1-5&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;First $1b&nbsp;&nbsp;&nbsp;&nbsp;[ ] bp

Funds 6+&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;Balance&nbsp;&nbsp;&nbsp;&nbsp;[ ] bp

See **APPENDIX C** for Services and Associated Fees in addition to Base Fee

See **APPENDIX D** for Global Sub-Custodial Services & Safekeeping Services in addition to the Base Fee

1 Each fund, regardless of asset size, will have fees allocated to it equal to the per fund minimum. Should the complex level basis point fee calculation exceed the complex level minimum fee level calculation, the fees in excess of the minimum will be allocated to each fund based on the percent on AUM.

Once a Fund is operational, should this service agreement with U.S. Bank be terminated prior to the end of the initial two year period, Adviser will be responsible for the balance of the minimum fees for the remainder of the service agreement's 12-month period beginning with the Fund's launch or any anniversary of launch. To avoid doubt, if Adviser launched a Fund on March 1, 2021and terminated the relationship on June 30, 2022, Adviser would owe U.S. Bank up to [ ]% of $[ ] ($[ ] admin/acct/ta +$[ ] Custody).

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (*e.g*., compliance with new liquidity risk management and reporting requirements).

2 Subject to annual CPI increase: All Urban Consumers – U.S. City Average" index, provided that the CPI adjustment will not decrease the base fees (even if the cumulative CPI rate at any point in time is negative).

Fees are calculated pro rata and billed monthly

------

APPENDIX C

**Domestic Custody Services in addition to the Base Fee**<sup>1</sup>

**Portfolio Transaction Fees2**

$[ ] – Book entry DTC transaction, Federal Reserve transaction, principal paydown

$[ ] – Repurchase agreement, reverse repurchase agreement, time deposit/CD or other non-depository transaction

$[ ] – Option/SWAPS/future contract written, exercised or expired

$[ ] – Mutual fund trade, Margin Variation Wire and outbound Fed wire

$[ ] – Physical security transaction

$[ ] – Check disbursement (waived if U.S. Bank is Administrator)

A transaction is a purchase/sale of a security, free receipt/free delivery, maturity, tender or exchange.

*Miscellaneous Expenses*

All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred: expenses incurred in the safekeeping, delivery and receipt of securities, shipping, transfer fees, deposit withdrawals at custodian (DWAC) fees, SWIFT charges, negative interest charges and extraordinary expenses based upon complexity.

*Additional Services*

Additional fees apply for global servicing. Fund of Fund expenses quoted separately.

$[ ] per custody sub – account per year (e.g., per sub –adviser, segregated account, etc.)

Class Action Services – $[ ] filing fee per class action per account, plus [ ]% of gross proceeds, up to a maximum per recovery not to exceed $[ ].

No charge for the initial conversion free receipt.

Overdrafts – charged to the account at prime interest rate plus [ ]%, unless a line of credit is in place

Third Party lending - Additional fees will apply

Fees are calculated pro rata and billed monthly

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).

2 "Sponsor trades" are defined as any trades put through the Portfolio, on behalf of the Fund by any portfolio manager/sub advisor and their affiliates authorized by the BOT to act on behalf of the Fund, outside of the create/redeem process. Cash-in-Lieu proceeds received as part of the create/redeem process, and their related transactions are <u>not</u> considered to be "Sponsor trades.

------

**APPENDIX D**

**Additional Global Sub-Custodial Services Annual Fee Schedule**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Country** | **Safekeeping (BPS)** | **Transaction fee** | &nbsp;&nbsp;&nbsp;&nbsp;**Country** | **Safekeeping (BPS)** | **Transaction fee** | &nbsp;&nbsp;&nbsp;&nbsp;**Country** | **Safekeeping (BPS)** | **Transaction fee** |
| &nbsp;&nbsp;Argentina | [ ] | [ ] | Hong Kong | [ ] | [ ] | Poland | [ ] | [ ] |
| &nbsp;&nbsp;Australia | [ ] | [ ] | Hungary | [ ] | [ ] | Portugal | [ ] | [ ] |
| &nbsp;&nbsp;Austria | [ ] | [ ] | Iceland | [ ] | [ ] | Qatar | [ ] | [ ] |
| &nbsp;&nbsp;Bahrain | [ ] | [ ] | India | [ ] | [ ] | Romania | [ ] | [ ] |
| &nbsp;&nbsp;Bangladesh | [ ] | [ ] | Indonesia | [ ] | [ ] | Russia | [ ] | [ ] |
| &nbsp;&nbsp;Belgium | [ ] | [ ] | Ireland | [ ] | [ ] | Saudi Arabia | [ ] | [ ] |
| &nbsp;&nbsp;Bermuda | [ ] | [ ] | Israel | [ ] | [ ] | Serbia | [ ] | [ ] |
| &nbsp;&nbsp;Botswana | [ ] | [ ] | Italy | [ ] | [ ] | Singapore | [ ] | [ ] |
| &nbsp;&nbsp;Brazil | [ ] | [ ] | Japan | [ ] | [ ] | Slovakia | [ ] | [ ] |
| &nbsp;&nbsp;Bulgaria | [ ] | [ ] | Jordan | [ ] | [ ] | South Africa | [ ] | [ ] |
| &nbsp;&nbsp;Canada | [ ] | [ ] | Kenya | [ ] | [ ] | South Korea | [ ] | [ ] |
| &nbsp;&nbsp;Chile | [ ] | [ ] | Kuwait | [ ] | [ ] | Spain | [ ] | [ ] |
| <br>China Connect | [ ] | [ ] | <br>Latvia | [ ] | [ ] | <br>Sri Lanka | [ ] | [ ] |
| China (B<br>Shares) | [ ] | [ ] | Lithuania | [ ] | [ ] | Sweden | [ ] | [ ] |
| &nbsp;&nbsp;Colombia | [ ] | [ ] | Luxembourg | [ ] | [ ] | Switzerland | [ ] | [ ] |
| &nbsp;&nbsp;Costa Rica | [ ] | [ ] | Malaysia | [ ] | [ ] | Taiwan | [ ] | [ ] |
| &nbsp;&nbsp;Croatia | [ ] | [ ] | Malta | [ ] | [ ] | Thailand | [ ] | [ ] |
| &nbsp;&nbsp;Cyprus | [ ] | [ ] | Mauritius | [ ] | [ ] | Tunisia | [ ] | [ ] |
| &nbsp;&nbsp;Czech Republic | [ ] | [ ] | Mexico | [ ] | [ ] | Turkey | [ ] | [ ] |
| &nbsp;&nbsp;Denmark | [ ] | [ ] | Morocco | [ ] | [ ] | UAE | [ ] | [ ] |
| &nbsp;&nbsp;Egypt | [ ] | [ ] | Namibia | [ ] | [ ] | Uganda | [ ] | [ ] |
| &nbsp;&nbsp;Estonia | [ ] | [ ] | Netherlands | [ ] | [ ] | | [ ] | [ ] |
| &nbsp;&nbsp;Eswatini | [ ] | [ ] | New Zealand | [ ] | [ ] | Ukraine | [ ] | [ ] |
| Euroclear (Eurobonds) | [ ] | [ ] | <br>Nigeria | [ ] | [ ] | United Kingdom | [ ] | [ ] |
| Euroclear (Non-<br>Eurobonds) | [ ] | [ ] | <br>Norway | [ ] | [ ] | <br>Uruguay | [ ] | [ ] |
| &nbsp;&nbsp;Finland | [ ] | [ ] | Oman | [ ] | [ ] | Vietnam | [ ] | [ ] |
| <br>France | [ ] | [ ] | <br>Pakistan | [ ] | [ ] | West African Economic Monetary Union<br>(WAEMU)\* | [ ] | [ ] |
| &nbsp;&nbsp;Germany | [ ] | [ ] | Panama | [ ] | [ ] | Zambia | [ ] | [ ] |
| &nbsp;&nbsp;Ghana | [ ] | [ ] | Peru | [ ] | [ ] | Zimbabwe | [ ] | [ ] |
| &nbsp;&nbsp;Greece | [ ] | [ ] | Philippines | [ ] | [ ] | | | |

---

\* Includes Ivory Coast, Mali, Niger, Burkina Faso, Senegal, Guinea Bissau, Togo and Benin.

------

**Base Fee**

A monthly base fee of $[ ] per fund will apply when foreign securities are held. If no global assets are held within a given month, the monthly base charge will not apply for that month. In addition, the follow may apply.

Plus:

**Global Custody Transaction Fees1**

Global Custody transaction fees associate with Sponsor Trades2. (See schedule below)

A transaction is defined as any purchase/sale, free receipt / free delivery, maturity, tender or exchange of a security.

Global Safekeeping and Transaction Fees

(See schedule below)

Tax Reclamation Services

*Miscellaneous Expenses*

Charges incurred by U.S. Bank, N.A. directly or through sub-custodians for account opening fees, tax reclaim fees, local taxes, stamp duties or other local duties and assessments, stock exchange fees, foreign exchange transactions, postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees, proxy services and other shareholder communications, recurring administration fees, negative interest charges, overdraft charges or other expenses which are unique to a country in which the client or its clients is investing will be passed along as incurred.

A surcharge may be added to certain miscellaneous expenses listed herein to cover handling, servicing and other administrative costs associated with the activities giving rise to such expenses. Also, certain expenses are charged at a predetermined flat rate.

SWIFT reporting and message fees.

Fees are calculated pro rata and billed monthly

1"Sponsor trades" are defined as any trades put through the Portfolio, on behalf of the Fund by any portfolio manager/sub advisor and their affiliates authorized by the BOT to act on behalf of the Fund, outside of the create/redeem process. Cash-in-Lieu proceeds received as part of the create/redeem process, and their related transactions are <u>not</u> considered to be "Sponsor trades."

**Adviser's signature in acknowledgement is not needed. Advisors Asset Management, Inc signed the above fee schedule on July 17, 2024.**

## Ex-99.(H)(I)(B)

**Redacted**

**Fee Schedule has been excluded because it is both (1) not material and (2) would likely cause competitive harm to the registrant if publicly disclosed**

**AMENDMENT TO THE**

**ETF SERIES SOLUTIONS**

**FUND ADMINISTRATION SERVICING AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;**THIS AMENDMENT,** effective as the date last written on the signature page, to the Fund Administration Servicing Agreement dated as of May 16, 2012, as amended (the "Agreement"), is entered into by and between **ETF SERIES SOLUTIONS**, a Delaware statutory trust (the "Trust"), and **U.S. BANCORP FUND SERVICES, LLC,** a Wisconsin limited liability company ("USBFS").

**RECITALS**

**WHEREAS,** the parties to the Agreement desire to amend the Agreement to add the following fund to Exhibit U, and to take into account present circumstances:

-AAM Todd International Intrinsic Value ETF

**WHEREAS,** Section 11 of the Agreement allows for its amendment by a written instrument executed by both parties.

**NOW, THEREFORE,** the parties hereby amend the Agreement as follows:

**Exhibit U is hereby superseded and replaced with Exhibit U attached hereto.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Except to the extent amended hereby, the Agreement shall remain in full force and effect.

**IN WITNESS WHEREOF**, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year last written below.

---

| | | | |
|:---|:---|:---|:---|
| **ETF SERIES SOLUTIONS** | **ETF SERIES SOLUTIONS** | **U.S. BANCORP FUND SERVICES, LLC** | **U.S. BANCORP FUND SERVICES, LLC** |
| By: | /s/ Noelle-Nadia A. Filali | By: | /s/ Gregory Farley |
| Name: | Noelle-Nadia A. Filali | Name: | Gregory Farley |
| Title: | Assistant Secretary | Title: | Senior Vice President |
| Date: | June 25, 2025 | Date: | June 26, 2025 |

---

------

**Exhibit U to the ETF Series Solutions Fund Administration Servicing Agreement**

**AAM S&P 500 High Dividend Value ETF**

**AAM S&P Emerging Markets High Dividend Value ETF**

**AAM S&P Developed Markets High Dividend Value ETF**

**AAM Low Duration Preferred and Income Securities ETF**

**AAM Transformers ETF**

**AAM Brentview Dividend Growth ETF**

**AAM Sawgrass U.S. Small Cap Quality Growth ETF**

**AAM Sawgrass U.S. Large Cap Quality Growth ETF**

**AAM SLC Low Duration Income ETF**

**AAM Todd International Intrinsic Value ETF**

**Fund Start-up & Registration Services Project Fee Schedule**

Regulatory Administration Services – In support of external legal counsel

Subsequent new fund launch – $[ ] per fund or as negotiated

Drafting SEC exemptive order application for required relief Negotiated fee

Note: External legal costs are not included in the above fee, unless otherwise stated. Additional reviews by Trust counsel for extraordinary circumstances are billed at cost.

Fund startup and registration services project fee is paid for by the advisor and not the fund(s). This non-refundable fee is not able to be recouped by the advisor under the expense waiver limitation or similar agreement. Fund startup and registration fees are billed [ ]% following the selection of U.S. Bank and [ ]% [ ] days after the preliminary registration statement is filed with the SEC filings.

Ongoing Annual Regulatory Administration Services

Add the following for regulatory administration services in support of external legal counsel, including annual registration statement update and drafting of supplements

$[ ] for first three funds in same statutory prospectus

$[ ] for each additional active or inactive fund in the same statutory prospectus

All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred*:*

Postage, if necessary

Federal and state regulatory filing fees

Expenses from Board of Trustee meetings

Third party auditing

EDGAR/XBRL filing

All other Miscellaneous expenses

Fund startup and registration services project fee is paid for by the advisor and not the Fund(s). This non-refundable fee is not able to be recouped by the advisor under the expense waiver limitation or similar agreement. Fund startup and registration fees are billed [ ]% following the selection of U.S. Bank and [ ]% [ ] days after the preliminary registration statement is filed with the SEC filings.

------

**Base Fee for Accounting, Administration, and Transfer Agent Services**

The following reflects the greater of the basis point fee or annual minimum1 where Advisors Asset Management, Inc. acts as investment adviser to the fund(s) in the ETF Series Solutions Trust.

Annual Minimum per Fund<sup>2</sup>&nbsp;&nbsp;&nbsp;&nbsp;Basis Points on Trust AUM<sup>2</sup>

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$40,000&nbsp;&nbsp;&nbsp;&nbsp;First $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$35,000&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$30,000&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps Balance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

See APPENDIX A for Services and Associated Fees in addition to the Base Fee

See APPENDIX B for OPTIONAL Supplemental Services and Associated Fees

<sup>1</sup> Each fund, regardless of asset size, will have fees allocated to it equal to the per fund minimum. Should the complex level basis point fee calculation exceed the complex level minimum fee level calculation, the fees in excess of the minimum will be allocated to each fund based on the percent on AUM.

Once a Fund is operational, should this service agreement with U.S. Bank be terminated prior to the end of the initial two year period, Adviser will be responsible for the balance of the minimum fees for the remainder of the service agreement's 12-month period beginning with the Fund's launch or any anniversary of launch. To avoid doubt, if Adviser launched a Fund on March 1, 2021and terminated the relationship on June 30, 2022, Adviser would owe U.S. Bank up to [ ]% of $[ ] ($[ ] admin/acct/ta +$[ ] Custody).

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).

<sup>2</sup> Subject to annual CPI increase: All Urban Consumers – U.S. City Average" index, provided that the CPI adjustment will not decrease the base fees (even if the cumulative CPI rate at any point in time is negative).

Fees are calculated pro rata and billed monthly

------

**APPENDIX A**

**Accounting, Administration, Transfer Agent & Account Services (in addition to the Base Fee)**

**Pricing Services**

For daily pricing of each securities (estimated 252 pricing days annually)

$[ ] – Domestic Equities, Options, ADRs, Foreign Equities, Futures, Forwards, Currency Rates, Total Return Swaps

$[ ] – Domestic Corporates, Domestic Convertibles, Domestic Governments and Agency, Mortgage Backed, and Municipal Bonds

$[ ] – CMOs, Money Market Instruments, Foreign Corporates, Foreign Convertibles, Foreign Governments, Foreign Agencies, Asset Backed, and High Yield Bonds

$[ ] – Interest Rate Swaps, Foreign Currency Swaps

$[ ] – Bank Loans

$[ ] – Swaptions, Intraday money market funds pricing, up to 3 times per day

$[ ] – Credit Default Swaps

$[ ] per Month Manual Security Pricing (>[ ] per day)

NOTE: Prices are based on using U.S. Bank primary pricing service which may vary by security type and are subject to change. Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non-standard security type, such as CLOs and CDOs, which may result in additional fees. All schedules subject to change depending upon the use of unique security type requiring special pricing or accounting arrangements.

Corporate Action Services

Fee for ICE data used to monitor corporate actions

$[ ] per Foreign Equity Security per Month

$[ ] per Domestic Equity Security per Month

$[ ] per CMOs, Asset Backed, Mortgage Backed Security per Month

Trust Chief Compliance Officer Annual Fee

$[ ] for the first fund

$[ ] for each additional fund [ ]-[ ]

$[ ] for each fund over [ ] funds

$[ ] per sub-adviser per fund (capped at $[ ] per sub-adviser over the fund complex)

Per adviser relationship, and subject to change based upon board review and approval.

Third Party Administrative Data Charges (descriptive data for analytics, reporting and compliance)

$[ ] per security per month for fund administrative

SEC Modernization Requirements

Form N-PORT – $[ ] per year, per Fund

Form N-CEN – $[ ] per year, per Fund

**Section 15(c) Reporting**

$[ ] per fund per standard reporting package\*

\*Standard reporting packages for annual 15(c) meeting

-Expense reporting package: 2 peer comparison reports (adviser fee) and (net expense ratio with classes on one report) OR Full 15(c) report

-Performance reporting package: Peer Comparison Report

Additional 15(c) reporting is subject to additional charges

------

Standard data source – Morningstar; additional charges will apply for other data services

*Miscellaneous Expenses*

All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred: charges associated with accelerated effectiveness at DTCC, SWIFT processing, customized reporting, third-party data provider costs (including GICS, MSCI, Lipper, etc.), postage, stationary, programming, special reports, proxies, insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, expenses related to and including travel to and from Board of Trustee meetings, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary), and travel related costs.

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require

additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting

requirements).

Fees are calculated pro rata and billed monthly

------

APPENDIX B

**OPTIONAL Supplemental Services for Fund Accounting, Fund Administration & Portfolio Compliance (provided by U.S. Bank upon client request)**

Daily Compliance Services

Base fee – $[ ] per fund per year

Setup – $[ ] per fund group

Section 18 Daily Compliance Testing (for derivatives and leverage)

$[ ] set up fee per fund complex

$[ ] per fund per month

C- Corp Administrative Services

1940 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

1933 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

Controlled Foreign Corporation (CFC)

U.S. Bank Fee Schedule plus $[ ]

Core Tax Services

M-1 book-to-tax adjustments at fiscal and excise year-end, prepare tax footnotes in conjunction with fiscal year-end audit, Prepare Form 1120-RIC federal income tax return and relevant schedules, Prepare Form 8613 and relevant schedules, Prepare Form 1099- MISC Forms, Prepare Annual TDF FBAR (Foreign Bank Account Reporting) filing, Prepare state returns (Limited to two) and Capital Gain Dividend Estimates (Limited to two).

Optional Tax Services:

Prepare book-to-tax adjustments & Form 5471 for Controlled Foreign Corporations (CFCs) – $[ ] per year

Additional Capital Gain Dividend Estimates – (First two included in core services) – $[ ] per additional estimate

State tax returns - (First two included in core services) – $[ ] per additional return

------

Tax Reporting – C-Corporations

Federal Tax Returns

Prepare corporate Book to tax calculation, average cost analysis and cost basis role forwards, and federal income tax returns for investment fund (Federal returns & 1099 Breakout Analysis) – $[ ]

Prepare Federal and State extensions (If Applicable) – Included in the return fees

Prepare provision estimates – $[ ] Per estimate

State Tax Returns

Prepare state income tax returns for funds and blocker entities – $[ ] per state return

Sign state income tax returns – $[ ] per state return Assist in filing state income tax returns – Included with preparation of returns

State tax notice consultative support and resolution – $[ ] per fund

Fees are calculated pro rata and billed monthly

**Adviser's signature in acknowledgement is not needed. Advisors Asset Management, Inc signed the above fee schedule on July 17, 2024.**

## Ex-99.(H)(Ii)(B)

**Redacted**

**Fee Schedule has been excluded because it is both (1) not material and (2) would likely cause competitive harm to the registrant if publicly disclosed**

**AMENDMENT TO THE** 

**ETF SERIES SOLUTIONS** 

**FUND ACCOUNTING SERVICING AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;**THIS AMENDMENT,** effective as of the last date on the signature block, to the Fund Accounting Servicing Agreement dated as of May 16, 2012, as amended (the "Agreement"), is entered into by and between **ETF SERIES SOLUTIONS**, a Delaware statutory trust (the "Trust"), and **U.S. BANCORP FUND SERVICES, LLC,** a Wisconsin limited liability company ("USBFS").

**RECITALS**

**WHEREAS,** the parties to the Agreement desire to amend the Agreement to add the following fund to Exhibit T, and to take into account present circumstances:

-AAM Todd International Intrinsic Value ETF

**WHEREAS,** Section 15 of the Agreement allows for its amendment by a written instrument executed by both parties.

**NOW, THEREFORE,** the parties hereby amend the Agreement as follows:

**Exhibit T is hereby superseded and replaced with Exhibit T attached hereto.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except to the extent amended hereby, the Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;

**IN WITNESS WHEREOF**, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year last written below.

---

| | | | |
|:---|:---|:---|:---|
| **ETF SERIES SOLUTIONS** | **ETF SERIES SOLUTIONS** | **U.S. BANCORP FUND SERVICES, LLC** | **U.S. BANCORP FUND SERVICES, LLC** |
| By: | /s/ Noelle-Nadia A. Filali | By: | /s/ Gregory Farley |
| Name: | Noelle-Nadia A. Filali | Name: | Gregory Farley |
| Title: | Assistant Secretary | Title: | Senior Vice President |
| Date: | June 25, 2025 | Date: | June 26, 2025 |

---

------

**Exhibit T to the ETF Series Solutions Fund Accounting Servicing Agreement**

**AAM S&P 500 High Dividend Value ETF**

**AAM S&P Emerging Markets High Dividend Value ETF**

**AAM S&P Developed Markets High Dividend Value ETF**

**AAM Low Duration Preferred and Income Securities ETF**

**AAM Transformers ETF**

**AAM Brentview Dividend Growth ETF**

**AAM Sawgrass U.S. Small Cap Quality Growth ETF**

**AAM Sawgrass U.S. Large Cap Quality Growth ETF**

**AAM SLC Low Duration Income ETF**

**&nbsp;&nbsp;&nbsp;&nbsp;AAM Todd International Intrinsic Value ETF**

**Base Fee for Accounting, Administration, and Transfer Agent Services**

The following reflects the greater of the basis point fee or annual minimum1 where Advisors Asset Management, Inc. acts as investment adviser to the fund(s) in the ETF Series Solutions Trust.

Annual Minimum per Fund<sup>2</sup>&nbsp;&nbsp;&nbsp;&nbsp;Basis Points on Trust AUM<sup>2</sup>

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;First $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps Balance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

See APPENDIX A for Services and Associated Fees in addition to the Base Fee

See APPENDIX B for OPTIONAL Supplemental Services and Associated Fees

<sup>1</sup> Each fund, regardless of asset size, will have fees allocated to it equal to the per fund minimum. Should the complex level basis point fee calculation exceed the complex level minimum fee level calculation, the fees in excess of the minimum will be allocated to each fund based on the percent on AUM.

Once a Fund is operational, should this service agreement with U.S. Bank be terminated prior to the end of the initial two year period, Adviser will be responsible for the balance of the minimum fees for the remainder of the service agreement's 12-month period beginning with the Fund's launch or any anniversary of launch. To avoid doubt, if Adviser launched a Fund on March 1, 2021and terminated the relationship on June 30, 2022, Adviser would owe U.S. Bank up to [ ]% of $[ ] ($[ ] admin/acct/ta +$[ ] Custody).

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).

<sup>2</sup> Subject to annual CPI increase: All Urban Consumers – U.S. City Average" index, provided that the CPI adjustment will not decrease the base fees (even if the cumulative CPI rate at any point in time is negative).

Fees are calculated pro rata and billed monthly

------

**APPENDIX A**

**Accounting, Administration, Transfer Agent & Account Services (in addition to the Base Fee)**

**Pricing Services**

For daily pricing of each securities (estimated 252 pricing days annually)

$[ ] – Domestic Equities, Options, ADRs, Foreign Equities, Futures, Forwards, Currency Rates, Total Return Swaps

$[ ] – Domestic Corporates, Domestic Convertibles, Domestic Governments and Agency, Mortgage Backed, and Municipal Bonds

$[ ] – CMOs, Money Market Instruments, Foreign Corporates, Foreign Convertibles, Foreign Governments, Foreign Agencies, Asset Backed, and High Yield Bonds

$[ ] – Interest Rate Swaps, Foreign Currency Swaps

$[ ] – Bank Loans

$[ ] – Swaptions, Intraday money market funds pricing, up to 3 times per day

$[ ] – Credit Default Swaps

$[ ] per Month Manual Security Pricing (>[ ] per day)

NOTE: Prices are based on using U.S. Bank primary pricing service which may vary by security type and are subject to change. Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non-standard security type, such as CLOs and CDOs, which may result in additional fees. All schedules subject to change depending upon the use of unique security type requiring special pricing or accounting arrangements.

Corporate Action Services

Fee for ICE data used to monitor corporate actions

$[ ] per Foreign Equity Security per Month

$[ ] per Domestic Equity Security per Month

$[ ] per CMOs, Asset Backed, Mortgage Backed Security per Month

Trust Chief Compliance Officer Annual Fee

$[ ] for the first fund

$[ ] for each additional fund [ ]-[ ]

$[ ] for each fund over [ ] funds

$[ ] per sub-adviser per fund (capped at $[ ] per sub-adviser over the fund complex)

Per adviser relationship, and subject to change based upon board review and approval.

Third Party Administrative Data Charges (descriptive data for analytics, reporting and compliance)

$[ ] per security per month for fund administrative

SEC Modernization Requirements

Form N-PORT – $[ ] per year, per Fund

Form N-CEN – $[ ] per year, per Fund

**Section 15(c) Reporting**

$[ ] per fund per standard reporting package\*

\*Standard reporting packages for annual 15(c) meeting

-Expense reporting package: 2 peer comparison reports (adviser fee) and (net expense ratio with classes on one report) OR Full 15(c) report

-Performance reporting package: Peer Comparison Report

Additional 15(c) reporting is subject to additional charges

------

Standard data source – Morningstar; additional charges will apply for other data services

*Miscellaneous Expenses*

All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred: charges associated with accelerated effectiveness at DTCC, SWIFT processing, customized reporting, third-party data provider costs (including GICS, MSCI, Lipper, etc.), postage, stationary, programming, special reports, proxies, insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, expenses related to and including travel to and from Board of Trustee meetings, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary), and travel related costs.

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require

additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting

requirements).

Fees are calculated pro rata and billed monthly

------

APPENDIX B

**OPTIONAL Supplemental Services for Fund Accounting, Fund Administration & Portfolio Compliance (provided by U.S. Bank upon client request)**

Daily Compliance Services

Base fee – $[ ] per fund per year

Setup – $[ ] per fund group

Section 18 Daily Compliance Testing (for derivatives and leverage)

$[ ] set up fee per fund complex

$[ ] per fund per month

C- Corp Administrative Services

1940 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

1933 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

Controlled Foreign Corporation (CFC)

U.S. Bank Fee Schedule plus $[ ]

Core Tax Services

M-1 book-to-tax adjustments at fiscal and excise year-end, prepare tax footnotes in conjunction with fiscal year-end audit, Prepare Form 1120-RIC federal income tax return and relevant schedules, Prepare Form 8613 and relevant schedules, Prepare Form 1099- MISC Forms, Prepare Annual TDF FBAR (Foreign Bank Account Reporting) filing, Prepare state returns (Limited to two) and Capital Gain Dividend Estimates (Limited to two).

Optional Tax Services:

Prepare book-to-tax adjustments & Form 5471 for Controlled Foreign Corporations (CFCs) – $[ ] per year

Additional Capital Gain Dividend Estimates – (First [ ] included in core services) – $[ ] per additional estimate

State tax returns - (First two included in core services) – $[ ] per additional return

------

Tax Reporting – C-Corporations

Federal Tax Returns

Prepare corporate Book to tax calculation, average cost analysis and cost basis role forwards, and federal income tax returns for investment fund (Federal returns & 1099 Breakout Analysis) – $[ ]

Prepare Federal and State extensions (If Applicable) – Included in the return fees

Prepare provision estimates – $[ ] Per estimate

State Tax Returns

Prepare state income tax returns for funds and blocker entities – $[ ] per state return

Sign state income tax returns – $[ ] per state return Assist in filing state income tax returns – Included with preparation of returns

State tax notice consultative support and resolution – $[ ] per fund

Fees are calculated pro rata and billed monthly

**Adviser's signature in acknowledgement is not needed. Advisors Asset Management, Inc signed the above fee schedule on July 17, 2024.**

## Ex-99.(H)(Iii)(B)

**Redacted**

**Fee Schedule has been excluded because it is both (1) not material and (2) would likely cause competitive harm to the registrant if publicly disclosed**

**AMENDMENT TO THE**

**ETF SERIES SOLUTIONS** 

**TRANSFER AGENT SERVICING AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;**THIS AMENDMENT,** effective as of the last date on the signature block, to the Transfer Agent Servicing Agreement dated as of May 16, 2012, as amended (the "Agreement"), is entered into by and between **ETF SERIES SOLUTIONS**, a Delaware statutory trust (the "Trust"), and **U.S. BANCORP FUND SERVICES, LLC,** a Wisconsin limited liability company ("USBFS").

**RECITALS**

**WHEREAS,** the parties to the Agreement desire to amend the Agreement to add the following fund to Exhibit T, and to take into account present circumstances:

-AAM Todd International Intrinsic Value ETF

**WHEREAS,** Section 12 of the Agreement allows for its amendment by a written instrument executed by both parties.

**NOW, THEREFORE,** the parties hereby amend the Agreement as follows:

**Exhibit T is hereby superseded and replaced with Exhibit T attached hereto.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except to the extent amended hereby, the Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;

**IN WITNESS WHEREOF**, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year first written above.

---

| | | | |
|:---|:---|:---|:---|
| **ETF SERIES SOLUTIONS** | **ETF SERIES SOLUTIONS** | **U.S. BANCORP FUND SERVICES, LLC** | **U.S. BANCORP FUND SERVICES, LLC** |
| By: | /s/ Noelle-Nadia A. Filali | By: | /s/ Gregory Farley |
| Name: | Noelle-Nadia A. Filali | Name: | Gregory Farley |
| Title: | Assistant Secretary | Title: | Senior Vice President |
| Date: | June 25, 2025 | Date: | June 26, 2025 |

---

------

**Exhibit T to the ETF Series Solutions Transfer Agent Servicing Agreement**

**AAM S&P 500 High Dividend Value ETF**

**AAM S&P Emerging Markets High Dividend Value ETF**

**AAM S&P Developed Markets High Dividend Value ETF**

**AAM Low Duration Preferred and Income Securities ETF**

**AAM Transformers ETF**

**AAM Brentview Dividend Growth ETF**

**AAM Sawgrass U.S. Small Cap Quality Growth ETF**

**AAM Sawgrass U.S. Large Cap Quality Growth ETF**

**AAM SLC Low Duration Income ETF**

**AAM Todd International Intrinsic Value ETF**

**Base Fee for Accounting, Administration, and Transfer Agent Services**

The following reflects the greater of the basis point fee or annual minimum1 where Advisors Asset Management, Inc. acts as investment adviser to the fund(s) in the ETF Series Solutions Trust.

Annual Minimum per Fund<sup>2</sup>&nbsp;&nbsp;&nbsp;&nbsp;Basis Points on Trust AUM<sup>2</sup>

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;First $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

Funds [ ]&nbsp;&nbsp;&nbsp;&nbsp;$[ ]&nbsp;&nbsp;&nbsp;&nbsp;Next $[ ]&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps Balance&nbsp;&nbsp;&nbsp;&nbsp;[ ] bps

See APPENDIX A for Services and Associated Fees in addition to the Base Fee

See APPENDIX B for OPTIONAL Supplemental Services and Associated Fees

<sup>1</sup> Each fund, regardless of asset size, will have fees allocated to it equal to the per fund minimum. Should the complex level basis point fee calculation exceed the complex level minimum fee level calculation, the fees in excess of the minimum will be allocated to each fund based on the percent on AUM.

Once a Fund is operational, should this service agreement with U.S. Bank be terminated prior to the end of the initial two year period, Adviser will be responsible for the balance of the minimum fees for the remainder of the service agreement's 12-month period beginning with the Fund's launch or any anniversary of launch. To avoid doubt, if Adviser launched a Fund on March 1, 2021and terminated the relationship on June 30, 2022, Adviser would owe U.S. Bank up to [ ]% of $[ ] ($[ ] admin/acct/ta +$[ ] Custody).

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).

<sup>2</sup> Subject to annual CPI increase: All Urban Consumers – U.S. City Average" index, provided that the CPI adjustment will not decrease the base fees (even if the cumulative CPI rate at any point in time is negative).

Fees are calculated pro rata and billed monthly

------

**APPENDIX A**

**Accounting, Administration, Transfer Agent & Account Services (in addition to the Base Fee)**

**Pricing Services**

For daily pricing of each securities (estimated 252 pricing days annually)

$[ ] – Domestic Equities, Options, ADRs, Foreign Equities, Futures, Forwards, Currency Rates, Total Return Swaps

$[ ] – Domestic Corporates, Domestic Convertibles, Domestic Governments and Agency, Mortgage Backed, and Municipal Bonds

$[ ] – CMOs, Money Market Instruments, Foreign Corporates, Foreign Convertibles, Foreign Governments, Foreign Agencies, Asset Backed, and High Yield Bonds

$[ ] – Interest Rate Swaps, Foreign Currency Swaps

$[ ] – Bank Loans

$[ ] – Swaptions, Intraday money market funds pricing, up to 3 times per day

$[ ] – Credit Default Swaps

$[ ] per Month Manual Security Pricing (>[ ] per day)

NOTE: Prices are based on using U.S. Bank primary pricing service which may vary by security type and are subject to change. Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non-standard security type, such as CLOs and CDOs, which may result in additional fees. All schedules subject to change depending upon the use of unique security type requiring special pricing or accounting arrangements.

Corporate Action Services

Fee for ICE data used to monitor corporate actions

$[ ] per Foreign Equity Security per Month

$[ ] per Domestic Equity Security per Month

$[ ] per CMOs, Asset Backed, Mortgage Backed Security per Month

Trust Chief Compliance Officer Annual Fee

$[ ] for the first fund

$[ ] for each additional fund [ ]-[ ]

$[ ] for each fund over 5 funds

$[ ] per sub-adviser per fund (capped at $[ ] per sub-adviser over the fund complex)

Per adviser relationship, and subject to change based upon board review and approval.

Third Party Administrative Data Charges (descriptive data for analytics, reporting and compliance)

$[ ] per security per month for fund administrative

SEC Modernization Requirements

Form N-PORT – $[ ] per year, per Fund

Form N-CEN – $[ ] per year, per Fund

**Section 15(c) Reporting**

$[ ] per fund per standard reporting package\*

\*Standard reporting packages for annual 15(c) meeting

-Expense reporting package: 2 peer comparison reports (adviser fee) and (net expense ratio with classes on one report) OR Full 15(c) report

-Performance reporting package: Peer Comparison Report

Additional 15(c) reporting is subject to additional charges

------

Standard data source – Morningstar; additional charges will apply for other data services

*Miscellaneous Expenses*

All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred: charges associated with accelerated effectiveness at DTCC, SWIFT processing, customized reporting, third-party data provider costs (including GICS, MSCI, Lipper, etc.), postage, stationary, programming, special reports, proxies, insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, expenses related to and including travel to and from Board of Trustee meetings, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary), and travel related costs.

Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require

additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting

requirements).

Fees are calculated pro rata and billed monthly

------

APPENDIX B

**OPTIONAL Supplemental Services for Fund Accounting, Fund Administration & Portfolio Compliance (provided by U.S. Bank upon client request)**

Daily Compliance Services

Base fee – $[ ] per fund per year

Setup – $[ ] per fund group

Section 18 Daily Compliance Testing (for derivatives and leverage)

$[ ] set up fee per fund complex

$[ ] per fund per month

C- Corp Administrative Services

1940 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

1933 Act C-Corp – U.S. Bank Fee Schedule plus $[ ]

Controlled Foreign Corporation (CFC)

U.S. Bank Fee Schedule plus $[ ]

Core Tax Services

M-1 book-to-tax adjustments at fiscal and excise year-end, prepare tax footnotes in conjunction with fiscal year-end audit, Prepare Form 1120-RIC federal income tax return and relevant schedules, Prepare Form 8613 and relevant schedules, Prepare Form 1099- MISC Forms, Prepare Annual TDF FBAR (Foreign Bank Account Reporting) filing, Prepare state returns (Limited to two) and Capital Gain Dividend Estimates (Limited to two).

Optional Tax Services:

Prepare book-to-tax adjustments & Form 5471 for Controlled Foreign Corporations (CFCs) – $[ ] per year

Additional Capital Gain Dividend Estimates – (First two included in core services) – $[ ] per additional estimate

State tax returns - (First two included in core services) – $[ ] per additional return

AAM

------

Tax Reporting – C-Corporations

Federal Tax Returns

Prepare corporate Book to tax calculation, average cost analysis and cost basis role forwards, and federal income tax returns for investment fund (Federal returns & 1099 Breakout Analysis) – $[ ]

Prepare Federal and State extensions (If Applicable) – Included in the return fees

Prepare provision estimates – $[ ] Per estimate

State Tax Returns

Prepare state income tax returns for funds and blocker entities – $[ ] per state return

Sign state income tax returns – $[ ] per state return Assist in filing state income tax returns – Included with preparation of returns

State tax notice consultative support and resolution – $[ ] per fund

Fees are calculated pro rata and billed monthly

**Adviser's signature in acknowledgement is not needed. Advisors Asset Management, Inc signed the above fee schedule on July 17, 2024.**

AAM

## Ex-99.(I)(Viii)

![a1morganlewislogo.jpg](a1morganlewislogo.jpg)

July 24, 2025

ETF Series Solutions<br>615 East Michigan Street<br>Milwaukee, Wisconsin 53202

---

| | |
|:---|:---|
| **Re:** | **Registration Statement on Form N-1A** |

---

Ladies and Gentlemen:

We have acted as counsel to ETF Series Solutions (the "Trust"), a Delaware statutory trust, in connection with Post-Effective Amendment No. 1028 to the Trust's registration statement on Form N-1A to be filed with the U.S. Securities and Exchange Commission (the "Commission") on or about July 24, 2025 (the "Registration Statement"), with respect to the issuance of shares of beneficial interest, with no par value per share (collectively, the "Shares"), of AAM Todd International Intrinsic Value ETF (the "Fund"), a separate series of the Trust. You have requested that we deliver this opinion to you in connection with the Trust's filing of the Registration Statement.

In connection with the furnishing of this opinion, we have examined the following documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;A certificate of the Secretary of State of the State of Delaware (the "Delaware Secretary of State"), dated as of a recent date, as to the existence and good standing of the Trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;A copy, certified by the Delaware Secretary of State, of the Trust's Certificate of Trust dated February 9, 2012, as filed with the Delaware Secretary of State (the "Certificate of Trust");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Copies of the Trust's Agreement and Declaration of Trust dated February 17, 2012 (the "Declaration"), the Trust's Amended and Restated Bylaws dated August 18, 2014 (the "Bylaws"), and resolutions adopted by the Board of Trustees of the Trust authorizing the issuance of the Shares of the Fund (the "Resolutions"), each certified by an authorized officer of the Trust; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;A printer's proof of the Registration Statement.

In such examination, we have assumed the genuineness of all signatures, the conformity to the originals of all of the documents reviewed by us as copies, including conformed copies, the authenticity and completeness of all original documents reviewed by us in original or copy form, and the legal competence of each individual executing any document. We have assumed that the Registration Statement, as filed with the Commission, will be in substantially the form of the printer's proof referred to in paragraph (d)

![a3mlbaddress.jpg](a3mlbaddress.jpg)

------

July 24, 2025

above. We also have assumed for the purposes of this opinion that the Certificate of Trust, the Declaration, the Bylaws, and the Resolutions will not have been amended, modified, or withdrawn with respect to matters relating to the Shares, and will be in full force and effect on the date of the issuance of such Shares.

This opinion is based entirely on our review of the documents listed above and such other documents as we have deemed necessary or appropriate for the purposes of this opinion and such investigation of law as we have deemed necessary or appropriate. We have made no other review or investigation of any kind whatsoever, and we have assumed, without independent inquiry, the accuracy of the information set forth in such documents.

This opinion is limited solely to the Delaware Statutory Trust Act to the extent that the same may apply to or govern the transactions referred to herein, and we express no opinion with respect to the laws of any other jurisdiction or to any other laws of the State of Delaware. Further, we express no opinion as to any state or federal securities laws, including the securities laws of the State of Delaware. No opinion is given herein as to the choice of law or internal substantive rules of law that any tribunal may apply to such transactions. In addition, to the extent that the Declaration or the Bylaws refer to, incorporate, or require compliance with the Investment Company Act of 1940, as amended (the "1940 Act"), or any other law or regulation applicable to the Trust, except for the Delaware Statutory Trust Act, we have assumed compliance by the Trust with the 1940 Act and such other laws and regulations.

We understand that all of the foregoing assumptions and limitations are acceptable to you.

Based upon and subject to the foregoing, it is our opinion that the Shares, when issued and sold in accordance with the Declaration, the Bylaws, the Resolutions, and the Registration Statement, will be validly issued, fully paid, and nonassessable by the Trust.

This opinion is given as of the date hereof and we assume no obligation to update this opinion to reflect any changes in law or any other facts or circumstances which may hereafter come to our attention. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Registration Statement. In rendering this opinion and giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Morgan, Lewis & Bockius LLP

## Ex-99.(J)

![cohenlogo-toprightcornera.jpg](cohenlogo-toprightcornera.jpg)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the references to our firm in this Registration Statement on Form N-1A of AAM Todd International Intrinsic Value ETF, a series of ETF Series Solutions, under the heading "Independent Registered Public Accounting Firm" in the Statement of Additional Information.

/s/ Cohen & Company, Ltd.

COHEN & COMPANY, LTD.

Philadelphia, Pennsylvania

July 24, 2025

![footerimageconsentlettera.jpg](footerimageconsentlettera.jpg)<br>

## Ex-99.(M)(I)(B)

**Schedule A**

**to the**

**Distribution Plan (12b-1 Plan)**

**Dated April 10, 2025**

---

| | |
|:---|:---|
| **<u>Series of ETF Series Solutions</u>** | **<u>Rule 12b-1 Fee</u>** |
| Vident International Equity Strategy ETF | 0.25% of average daily net assets |
| Vident U.S. Equity Strategy ETF | 0.25% of average daily net assets |
| Acquirers Small and Micro Deep Value ETF | 0.25% of average daily net assets |
| Vident U.S. Bond Strategy ETF | 0.25% of average daily net assets |
| U.S. Global Jets ETF | 0.25% of average daily net assets |
| Range Cancer Therapeutics ETF | 0.25% of average daily net assets |
| U.S. Global GO GOLD and Precious Metal Miners ETF | 0.25% of average daily net assets |
| Aptus Drawdown Managed Equity ETF | 0.25% of average daily net assets |
| ClearShares OCIO ETF | 0.25% of average daily net assets |
| Point Bridge America First ETF | 0.25% of average daily net assets |
| AAM S&P 500 High Dividend Value ETF | 0.25% of average daily net assets |
| U.S. Diversified Real Estate ETF | 0.25% of average daily net assets |
| Opus Small Cap Value ETF | 0.25% of average daily net assets |
| ClearShares Ultra-Short Maturity ETF | 0.25% of average daily net assets |
| Defiance Quantum ETF | 0.25% of average daily net assets |
| Aptus Defined Risk ETF | 0.25% of average daily net assets |
| Distillate U.S. Fundamental Stability & Value ETF | 0.25% of average daily net assets |
| US Vegan Climate ETF | 0.25% of average daily net assets |
| The Acquirers Fund | 0.25% of average daily net assets |
| Defiance Connective Technologies ETF | 0.25% of average daily net assets |
| Hoya Capital Housing ETF | 0.25% of average daily net assets |
| NETLease Corporate Real Estate ETF | 0.25% of average daily net assets |
| Aptus Collared Investment Opportunity ETF | 0.25% of average daily net assets |
| AAM Low Duration Preferred and Income Securities ETF | 0.25% of average daily net assets |
| LHA Market State Tactical Beta ETF | 0.25% of average daily net assets |
| ClearShares Piton Intermediate Fixed Income ETF | 0.25% of average daily net assets |
| ETFB Green SRI REITs ETF | 0.25% of average daily net assets |
| Distillate International Fundamental Stability & Value ETF | 0.25% of average daily net assets |
| Defiance Next Gen H2 ETF | 0.25% of average daily net assets |
| Aptus International Enhanced Yield ETF | 0.25% of average daily net assets |
| Defiance Hotel, Airline, and Cruise ETF | 0.25% of average daily net assets |
| Bahl & Gaynor Small/Mid Cap Income Growth ETF | 0.25% of average daily net assets |
| McElhenny Sheffield Managed Risk ETF | 0.25% of average daily net assets |
| Hoya Capital High Dividend Yield ETF | 0.25% of average daily net assets |
| U.S. Global Sea to Sky Cargo ETF | 0.25% of average daily net assets |
| LHA Market State Tactical Q ETF | 0.25% of average daily net assets |
| AAM Transformers ETF | 0.25% of average daily net assets |
| Aptus Enhanced Yield ETF | 0.25% of average daily net assets |
| Distillate Small/Mid Cash Flow ETF | 0.25% of average daily net assets |
| Vest 10 Year Interest Rate Hedge ETF | 0.25% of average daily net assets |
| Vest 2 Year Interest Rate Hedge ETF | 0.25% of average daily net assets |
| Aptus Large Cap Enhanced Yield ETF | 0.25% of average daily net assets |

---

------

---

| | |
|:---|:---|
| LHA Risk-Managed Income ETF | 0.25% of average daily net assets |
| Bahl & Gaynor Income Growth ETF | 0.25% of average daily net assets |
| The Brinsmere Fund – Growth ETF | 0.25% of average daily net assets |
| The Brinsmere Fund – Conservative ETF | 0.25% of average daily net assets |
| Aptus January Buffer ETF | 0.25% of average daily net assets |
| Aptus April Buffer ETF | 0.25% of average daily net assets |
| Aptus July Buffer ETF | 0.25% of average daily net assets |
| Aptus October Buffer ETF | 0.25% of average daily net assets |
| U.S. Global Technology and Aerospace & Defense ETF | 0.25% of average daily net assets |
| AAM Brentview Dividend Growth ETF | 0.25% of average daily net assets |
| AAM Sawgrass U.S. Large Cap Quality Growth ETF | 0.25% of average daily net assets |
| AAM Sawgrass U.S. Small Cap Quality Growth ETF | 0.25% of average daily net assets |
| AAM SLC Low Duration Income ETF | 0.25% of average daily net assets |
| Aptus Deferred Income Bond ETF | 0.25% of average daily net assets |
| Aptus Large Cap Upside ETF | 0.25% of average daily net assets |
| Bahl & Gaynor Small Cap Dividend ETF | 0.25% of average daily net assets |
| Bahl & Gaynor Dividend ETF | 0.25% of average daily net assets |
| The Frontier Economic Fund | 0.25% of average daily net assets |
| AAM Todd International Intrinsic Value ETF | 0.25% of average daily net assets |

---

For all services rendered pursuant to the Rule 12b-1 Agreement, we shall pay you the fee shown above calculated as follows:

The above fee as a percentage of the average daily net assets of the Fund (computed on an annual basis) which are owned of record by your firm as nominee for your customers or which are owned by those customers of your firm whose records, as maintained by the Trust or its agent, designate your firm as the customer's dealer or service provider of record.

We shall make the determination of the net asset value, which determination shall be made in the manner specified in the Fund's current prospectus, and pay to you, on the basis of such determination, the fee specified above, to the extent permitted under the Plan.

## Ex-99.(P)(Vii)

**Todd Asset Management LLC**

Code of Ethics

Issued November 1, 2024

![tamimage.jpg](tamimage.jpg)

------

**Table of Contents**

---

| | |
|:---|:---|
| &nbsp;&nbsp;[Statement of General Policy](#i7cd965d5f47d4af18c000577538d29dc) | [Page 3](#i7cd965d5f47d4af18c000577538d29dc) |
| &nbsp;&nbsp;[Access Persons](#id9e13964d5df470d83fd69cf5faf7791) | [Page 5](#id9e13964d5df470d83fd69cf5faf7791) |
| &nbsp;&nbsp;[Standards of Business Conduct](#i6b66e7319d3d4e5db98a437aa656987f) | [Page 6](#i6b66e7319d3d4e5db98a437aa656987f) |
| &nbsp;&nbsp;[Investment, Broker, or Custodial Account Reporting](#i02bc047742a143548da376117314f53e) | [Page 9](#i02bc047742a143548da376117314f53e) |
| &nbsp;&nbsp;[Protecting the Confidentiality of Client Information](#ic9fd58ed2c634c27a6499d5046b3eaa2) | [Page 10](#ic9fd58ed2c634c27a6499d5046b3eaa2) |
| &nbsp;&nbsp;[Prohibition Against Insider Trading](#i0df9c65ec09941bda49bded94f55b6c2) | [Page 11](#i0df9c65ec09941bda49bded94f55b6c2) |
| &nbsp;&nbsp;[Personal Securities Transactions](#ia25f3025a9884ee4bf15274535b1e29c) | [Page 14](#ia25f3025a9884ee4bf15274535b1e29c) |
| &nbsp;&nbsp;[Blackout Periods](#i79d8b2c55ec34cb8a821ac4f5e111f9a) | [Page 15](#i79d8b2c55ec34cb8a821ac4f5e111f9a) |
| &nbsp;&nbsp;[Compliance Procedures](#i5acdf210d3b84152a2e3f3bd7b8e475b) | [Page 16](#i5acdf210d3b84152a2e3f3bd7b8e475b) |
| &nbsp;&nbsp;[Short-Term Trading Profits](#ic4647bea52ff4dec9120297ec5fbb2a0) | [Page 18](#ic4647bea52ff4dec9120297ec5fbb2a0) |
| &nbsp;&nbsp;[Personal Securities Trading Limitations](#ic9fe8f08a5a146c8a48570f0255f0497) | [Page 19](#ic9fe8f08a5a146c8a48570f0255f0497) |
| &nbsp;&nbsp;[Margin Transactions](#i6de006d486f94ec896a69cc08c66f0d6) | [Page 20](#i6de006d486f94ec896a69cc08c66f0d6) |
| &nbsp;&nbsp;[Limit Orders](#i903b59544d034fc4be386c47ed2c37b0) | [Page 21](#i903b59544d034fc4be386c47ed2c37b0) |
| &nbsp;&nbsp;[Interested Transactions](#i2dfe5f76d9a0472884a24ab68cb8e467) | [Page 22](#i2dfe5f76d9a0472884a24ab68cb8e467) |
| &nbsp;&nbsp;[Outside Business Activities](#ic905892a0cc44b2d94e478c3cb176bc9) | [Page 23](#ic905892a0cc44b2d94e478c3cb176bc9) |
| &nbsp;&nbsp;[Service as an Officer or Director](#ic04e2284a82144b087b649dcd6e1008e) | [Page 24](#ic04e2284a82144b087b649dcd6e1008e) |
| &nbsp;&nbsp;[Gifts and Entertainment](#i480b9feb635b419090fed9add71281f0) | [Page 25](#i480b9feb635b419090fed9add71281f0) |
| &nbsp;&nbsp;[Political Contributions](#id6a1d5f3b6374aa8a5617bb13815440e) | [Page 27](#id6a1d5f3b6374aa8a5617bb13815440e) |
| &nbsp;&nbsp;[Whistleblower Policy](#i24473a70cb22408d94d54d48ad3bfb9f) | [Page 28](#i24473a70cb22408d94d54d48ad3bfb9f) |
| &nbsp;&nbsp;[Reporting Violations and Sanctions](#i42c3ea2c7a3647438010cd5f20115a26) | [Page 30](#i42c3ea2c7a3647438010cd5f20115a26) |
| &nbsp;&nbsp;[Records](#i770374adea7b458ba71f929d80450e8d) | [Page 31](#i770374adea7b458ba71f929d80450e8d) |
| &nbsp;&nbsp;[Acknowledgements](#i22ff81ec26ad49d8a211a7856cde584a) | [Page 32](#i22ff81ec26ad49d8a211a7856cde584a) |
| &nbsp;&nbsp;[Definitions](#if8cefd7f76ac43328d25d5097dc1236c) | [Page 33](#if8cefd7f76ac43328d25d5097dc1236c) |

---

------

**Statement of General Policy**

This Code of Ethics ("Code") has been adopted by Todd Asset Management LLC ("TAM" or "Firm") and is designed to comply with Rule 204A-1 under the Investment Advisers Act of 1940 ("Advisers Act").

This Code establishes rules of conduct for all employees of TAM and is designed to, among other things; govern personal securities trading activities in the accounts of employees, their immediate family/household accounts and accounts in which an employee has a Beneficial Interest. The Code is based upon the principle that TAM and its employees owe a fiduciary duty to the Firm's clients to conduct their affairs, including their personal securities transactions, in such a manner as to avoid (i) serving their own personal interests ahead of clients, (ii) taking inappropriate advantage of their position with the Firm and (iii) any actual or potential conflicts of interest or any abuse of their position of trust and responsibility.

The Code is designed to ensure that the high ethical standards long maintained by TAM continue to be applied. The purpose of the Code is to preclude activities which may lead to or give the appearance of conflicts of interest, insider trading and other forms of prohibited or unethical business conduct. The excellent name and reputation of our Firm continues to be a direct reflection of the conduct of each employee.

Pursuant to Section 206 of the Advisers Act, both TAM and its employees are prohibited from engaging in fraudulent, deceptive or manipulative conduct. This involves more than acting with honesty and good faith. It means that the Firm has an affirmative duty of utmost good faith to act solely in the best interest of its clients. This duty creates an obligation to adhere not only to the specific provisions of this Code but to the general principles that guide the Code. These general principles are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The duty at all times to place the interests of clients first;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The duty at times to comply with the Investment Advisers Act of 1940, the Investment Company Act 1940, and all other Federal Securities Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The requirement that all personal securities transactions be conducted in a manner consistent with the Code of Ethics and in such a manner as to avoid any actual or potential conflict of interest or any abuse of any individual's position of trust and responsibility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The fundamental standard that such employees, officers, and directors should not take inappropriate advantage of their positions, or of their relationship with Clients; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The fiduciary principle that information concerning the identity of security holdings and financial circumstances of Clients is confidential.

In meeting its fiduciary responsibilities to its clients, TAM expects every employee to demonstrate the highest standards of ethical conduct for continued employment with TAM. Strict compliance with the provisions of the Code shall be considered a basic condition of employment with TAM. TAM's reputation for fair and honest dealing with its clients has taken considerable time to build. This standing could be seriously damaged as the result of even a single securities transaction being considered questionable in light of the fiduciary duty owed to our clients. Employees are urged to seek the advice of James Jenkins,

------

the Chief Compliance Officer ("CCO"), for any questions about the Code or the application of the Code to their individual circumstances. Employees should also understand that a material breach of the provisions of the Code may constitute grounds for disciplinary action, up to and including termination of employment with TAM.

The provisions of the Code are not all-inclusive. Rather, they are intended as a guide for employees of the Firm in their conduct. In those situations where an employee may be uncertain as to the intent or purpose of the Code, he/she is advised to consult with the CCO. The CCO may grant exceptions to certain provisions contained in the Code only in those situations when it is clear beyond dispute that the interests of our clients shall not be adversely affected or compromised. All questions arising in connection with personal securities trading should be resolved in favor of the client even at the expense of the interests of employees.

Recognizing the importance of maintaining the Firm's reputation and consistent with our fundamental principles of honesty, integrity and professionalism, the Firm requires that a supervised person advise the CCO immediately if he or she becomes involved in or threatened with litigation or an administrative investigation or legal proceeding of any kind. To the extent permissible by law and applicable regulations, TAM shall endeavor to maintain such information on a confidential basis.

The CCO may grant exceptions to certain substantive restrictions in appropriate circumstances (e.g., personal hardship) and will maintain records to justify such limitations.

Throughout the Code there are references to various disclosure forms and acknowledgements, which are made available through TAM's compliance system. If you have any questions on where to find these forms, please reach out to the CCO.

The CCO shall periodically report to the Board of Directors of Todd Asset Management LLC to document compliance with this Code.

------

**Access Persons**

For purposes of complying with Todd Asset Management LLC's Code of Ethics, **all [Supervised](#i8847daa9a20445b08089de4c8aee13d9_85)[Persons](#i8847daa9a20445b08089de4c8aee13d9_85) of the Firm** are regarded as Access Persons and are therefore subject to all applicable personal securities trading procedures and reporting obligations as set forth in this Code. Please refer to the Definitions section of this Code for a definition of Supervised Persons.

------

**Standards of Business Conduct**

TAM places the highest priority on maintaining its reputation for integrity and professionalism. That reputation is a vital business asset. The confidence and trust placed in our Firm and its employees by our clients is something we value and endeavor to protect. The following Standards of Business Conduct set forth policies and procedures to achieve these goals. This Code is intended to comply with the various provisions of the Advisers Act and also requires that all Supervised Persons comply with the various applicable provisions of the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and applicable rules and regulations adopted by the Securities and Exchange Commission ("SEC").

Section 204A of the Advisers Act requires the establishment and enforcement of policies and procedures reasonably designed to prevent the misuse of material, nonpublic information by investment advisers.

Such policies and procedures are contained in this Code. The Code also contains policies and procedures with respect to personal securities transactions of all TAM's Supervised Persons as defined herein. These procedures cover transactions in a Reportable Security in which a Supervised Person has a Beneficial Interest in or accounts over which the Supervised Person exercises control as well as transactions by members of the Supervised Person's immediate family and/or household.

Section 206 of the Advisers Act makes it unlawful for Todd Asset Management LLC or its agents or employees to employ any device, scheme or artifice to defraud any client or prospective client, or to engage in fraudulent, deceptive or manipulative practices. This Code contains provisions that prohibit these and other enumerated activities and that are reasonably designed to detect and prevent violations of the Code, the Advisers Act and rules thereunder.

Guidelines for Professional Standards

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• At all times, all Supervised Persons must comply with applicable federal securities laws and must reflect the professional standards expected of those engaged in the investment advisory business, and they shall act within the spirit and the letter of the federal, state, and local laws and regulations pertaining to investment advisers and the general conduct of business. These standards require all personnel to be judicious, accurate, objective, and reasonable in dealing with both clients and other parties so that his or her personal integrity is unquestionable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All Supervised Persons are required to report any violation of the Code, by any person, to the CCO or other appropriate persons of the Company promptly. Such reports will be held in confidence to the extent practicable. However, the Company remains responsible for satisfying the regulatory reporting and other obligations that may follow the reporting of a potential violation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must place the interests of clients first. All Supervised Persons must scrupulously avoid serving his or her own personal interests ahead of the interests of the Company's clients. In addition, Supervised Persons must work diligently to ensure that no client is preferred over any other client.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must use good judgment in identifying and responding appropriately to actual or apparent conflicts. Conflicts of interest that involve the Company and/or its Supervised

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Persons on one hand and clients on the other hand will generally be fully disclosed and/or resolved in a way that favors the interests of the clients over the interests of the Company and its Supervised Persons. If a Supervised Person believes that a conflict of interest has not been identified or appropriately addressed, that Supervised Person should promptly bring the issue to the CCO's attention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All Supervised Persons are naturally prohibited from engaging in any practice that defrauds or misleads any client, or from engaging in any manipulative or deceitful practice with respect to clients or securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Supervised Person may serve on the board of directors of any publicly traded company without prior written permission from the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons will not cause or attempt to cause any client to purchase, sell, or hold any security in a manner calculated to create any personal benefit, or on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, trading, promoting the Company's services, and engaging in other professional activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must conduct all personal securities transactions in full compliance with this Code. Doubtful situations should be resolved in favor of clients and in cooperation with the CCO. Technical compliance with the Code's provisions shall not automatically insulate from scrutiny any securities transactions or actions that could indicate a violation of the Company's fiduciary duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Personal transactions in securities by Access Persons must be transacted to avoid even the appearance of a conflict of interest on the part of such personnel with the interests of the Company's clients. Likewise, Supervised Persons must avoid actions or activities that allow (or appear to allow) a person to profit or benefit from his or her position with the Company at the expense of clients, or that otherwise bring into question the person's judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons are subject to Insider Trading Policies adopted by the Company to detect and prevent the misuse of material nonpublic information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Supervised Person shall communicate information known to be false to others (including but not limited to clients, prospective clients and other Supervised Persons) with the intention of manipulating financial markets for personal gain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons are prohibited from accepting compensation for services from outside sources without the specific prior written permission of the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When any Supervised Person faces a conflict or potential conflict between his or her personal interest and the interests of clients, he or she is required to immediately report the conflict to the CCO for instructions regarding how to proceed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must treat recommendations and actions of the Company as confidential and private matters. Accordingly, we have adopted a Privacy Policy to prohibit the transmission,

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distribution, or communication of any information regarding securities transactions in client accounts or other nonpublic information, except to broker-dealers, other bona fide service providers, or regulators in the ordinary course of business. In addition, no information obtained during the course of employment regarding particular securities (including internal reports and recommendations) may be transmitted, distributed, or communicated to anyone who is not affiliated with the Company, without the prior written approval of the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Supervised Person shall intentionally sell to or purchase from a client any security or other property without prior written authorization from the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Supervised Person shall provide loans or receive loans from clients without the prior written authorization from the CCO.

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**Investment, Broker, or Custodial Account Reporting**

All Supervised Persons are required to notify the CCO prior to or at the time of establishing a new custodial, broker or investment account or the closing of an existing custodial, broker or investment account, where the Supervised Person has Direct or Indirect Beneficial Interest (See Definitions for further information) providing the following details:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Account Name

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Account Owner Name

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Name of Broker, Dealer or Bank

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Date Established *(or)*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Date Closed

To provide further clarity, Covered Accounts include ALL brokerage accounts for which the Supervised Person has a direct or indirect beneficial interest, and such account[s] have the ability to trade in Reportable Securities (see Definitions for further information). Types of accounts may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokerage accounts that hold or have the ability to purchase Reportable Securities; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all accounts for which a Supervised Person serves as a trustee and are the ultimate beneficial owner, and/or exercise investment discretion; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Accounts where a Supervised Person has given full discretion to a broker to undertake transactions on the Supervised Person's behalf unless the Supervised Person can demonstrate that they have no control over the trading in the account[s].

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**Protecting the Confidentiality of Client Information**

**Confidential Client Information**

In the course of investment advisory activities of TAM, the Firm gains access to nonpublic information about its clients. Such information may include a person's status as a client, personal financial and account information, the allocation of assets in a client portfolio, the composition of investments in any client portfolio, information relating to services performed for or transactions entered into on behalf of clients, advice provided by TAM to clients, and data or analyses derived from such non-public personal information (collectively referred to as 'Confidential Client Information'). Any doubts about the confidentiality of information must be resolved in favor of confidentiality.

All Supervised Persons are prohibited from revealing Confidential Client Information except under the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As necessary to provide service(s) that the client requested or authorized, or to maintain and service the client's account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As required by regulatory authorities or law enforcement officials who have jurisdiction over TAM, or as otherwise required by any applicable law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• To the extent reasonably necessary to prevent fraud, unauthorized transactions or liability.

**Privacy Policy**

As a registered investment adviser, TAM has adopted compliance policies and procedures to protect the 'nonpublic personal information' of natural person clients. 'Nonpublic information,' under Regulation S-P, includes personally identifiable financial information and any list, description, or grouping that is derived from personally identifiable financial information. Personally identifiable financial information is defined to include information supplied by individual clients, information resulting from transactions, any information obtained in providing products or services. Pursuant to Regulation S-P TAM has adopted policies and procedures to safeguard the information of natural person clients. Compliance with the provisions of TAM's Privacy Policy and maintaining client information confidential is required. Please refer to TAM's Compliance Policy and Procedure Manual for additional information.

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**Prohibition Against Insider Trading**

**Introduction**

Trading securities while in possession of material, nonpublic information, or improperly communicating that information to others may expose Supervised Persons and TAM to stringent penalties. Criminal sanctions may include the imposition of a monetary fine and/or imprisonment. The SEC can recover the profits gained or losses avoided through the illegal trading, impose a penalty of up to three times the illicit windfall, and/or issue an order censuring, suspending or permanently barring you from the securities industry. Finally, Supervised Persons and the Firm may be sued by clients seeking to recover damages for insider trading violations.

The rules contained in this Code apply to securities trading and information handling by Supervised Persons of TAM and their immediate family members.

The law of insider trading is unsettled and continuously developing. An individual legitimately may be uncertain about the application of the rules contained in this Code in a particular circumstance. Often, a single question can avoid disciplinary action or complex legal problems. You must notify the CCO immediately if you have any reason to believe that a violation of this Code has occurred or is about to occur.

**General Policy**

No Supervised Person may trade, either personally or on behalf of others (such as investment funds and accounts managed by TAM), while in the possession of material, nonpublic information, nor may any personnel of the Firm communicate, either with other employees or outside parties, material, nonpublic information to others in violation of the law.

***1.What is Material Information?***

Information is material where there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, this includes any information the disclosure of which will have a substantial effect on the price of a company's securities. No simple test exists to determine when information is material; assessments of materiality involve a highly fact-specific inquiry. For this reason, you should direct any questions about whether information is material to the CCO.

Material information often relates to a company's results and operations, including, for example, dividend changes, earnings results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments.

Material information also may relate to the market for a company's securities. Information about a significant order to purchase or sell securities may, in some contexts, be material. Prepublication information regarding reports in the financial press also may be material. For example, the United States Supreme Court upheld the criminal convictions of insider trading defendants who capitalized on prepublication information about The Wall Street Journal's "Heard on the Street" column.

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You should also be aware of the SEC's position that the term "material nonpublic information" relates not only to issuers but also to TAM's securities recommendations and client securities holdings and transactions.

***2.What is Nonpublic Information?***

Information is "public" when it has been disseminated broadly to investors in the marketplace. For example, information is public after it has become available to the general public through the Internet, a public filing with the SEC or some other government agency, the Dow Jones "tape" or The Wall Street Journal or some other publication of general circulation, and after sufficient time has passed so that the information has been disseminated widely.

***3.Identifying Inside Information***

Before executing any trade for yourself or others, including investment funds or accounts managed by TAM ("Client Accounts"), you must determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic information, you should take the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Report the information and proposed trade immediately to the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Do not purchase or sell the securities on behalf of yourself or others, including investment funds or accounts managed by the Firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Do not communicate the information inside or outside the Firm, other than to the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• After the CCO has reviewed the issue, the Firm shall determine whether the information is material and nonpublic and, if so, what action the Firm will take.

You should consult with the CCO before taking any action. This high degree of caution will protect you, our clients, and the Firm.

***4.Contacts with Public Companies***

Contacts with public companies may represent an important part of our research efforts. The Firm may make investment decisions on the basis of conclusions formed through such contacts and analysis of publicly available information. Difficult legal issues arise, however, when, in the course of these contacts, a Supervised Person of TAM or other person subject to this Code becomes aware of material, nonpublic information. This could happen, for example, if a company's Chief Financial Officer prematurely discloses quarterly results to an analyst, or an investor relations representative makes selective disclosure of adverse news to a handful of investors. In such situations, TAM must make a judgment as to its further conduct. To protect yourself, our clients and the Firm, you should contact the CCO immediately if you believe that you may have received material, nonpublic information.

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***5.Tender Offers***

Tender offers represent a particular concern in the law of insider trading for two reasons: First, tender offer activity often produces extraordinary gyrations in the price of the target company's securities. Trading during this time period is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC has adopted a rule which expressly forbids trading and "tipping" while in the possession of material, nonpublic information regarding a tender offer received from the tender offer or, the target company or anyone acting on behalf of either. Supervised Persons of TAM and others subject to this Code should exercise extreme caution any time they become aware of nonpublic information relating to a tender offer.

***6.Restricted/Watch Lists***

Although TAM does not typically receive confidential information from portfolio companies, it will, if it receives such information establish restricted or watch lists in certain securities. A restricted or watch list will be reported to all Supervised Persons once established. Generally, any security that TAM is currently executing transactions on behalf of clients are temporarily restricted. This trade activity is regularly reported to all Supervised Persons. See section regarding Blackout Periods for additional information on the timing of trades being restricted.

Supervised Persons are prohibited from personally, or on behalf of an client account, purchasing or selling such securities during any period they are listed on a restricted list or a watch list.

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**Personal Securities Transactions**

**General Policy**

TAM has adopted the following principles governing personal investment activities by the Firm's Supervised Persons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the interests of client accounts shall at all times be placed first;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all personal securities transactions shall be conducted in such manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• supervised persons must not take inappropriate advantage of their positions.

**Preclearance Requirements**

TAM has instituted a policy whereby Supervised Persons are prohibited from purchasing any [Reportable Securities](#i8847daa9a20445b08089de4c8aee13d9_85) for a Covered Account unless preclearance for each such transaction is granted by the CCO or other designee. Any questions whatsoever regarding this policy should be directed to the CCO. A Supervised Person is permitted, without obtaining preclearance, to purchase or sell any security as part of an [Exempt Transaction](#i8847daa9a20445b08089de4c8aee13d9_85) (see Definitions for further information).

A Supervised Person may, directly or indirectly, dispose of Beneficial Ownership of such Reportable Securities only if such purchase or sale has been approved by the CCO or their designee and the approved transaction is completed within the Firm's permissible trade window of two (2) days. If, however, the trade is not executed within the trade window, the approval lapses and the request for the proposed transaction must be resubmitted.

Clearance for such transactions must be obtained by completing the prescribed preclearance procedure put in place by the CCO. The CCO or their designee monitors all transactions by all Supervised Persons in order to ascertain any pattern of conduct which may evidence conflicts or potential conflicts with the principles and objectives of this Code, including a pattern of front-running.

Advance trade clearance in no way waives or absolves any Supervised Person of the obligation to abide by the provisions, principles and objectives of this Code.

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**Blackout Periods**

A Supervised Person may not execute any transaction in a Reportable Security within three (3) trading days before or after a transaction in the same security or a related security has been executed on behalf of a Client. If the CCO determines that a transaction has violated this prohibition, the transaction shall be unwound or, if not possible or practical the Supervised Person must disgorge to the Client the value received by the Supervised Person due to any favorable price differential received by the Supervised Person.

For example, if the Supervised Person buys 100 shares at $10 per share, and the Client buys 1000 shares at $11 per share, the Supervised Person will pay $100 (100 shares x $1 differential) to the Client.

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**Compliance Procedures**

1. Initial Holdings Report

Every Supervised Person shall, no later than ten (10) days after employment with the Firm certify they have read and understand this Code and recognizes that he or she is subject to it, and must disclose the following information as of the date of employment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)The title and type of security, the ticker symbol or CUSIP number, number of shares and principal amount of each Security in which the Supervised Person has a Beneficial Interest (as of a date no more than 45 days before the report is submitted),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)The name of any broker, dealer, or custodian/bank with whom the Supervised Person maintains an account, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)The date the report is submitted by the Supervised Person.

2. Annual Holdings Report

Within 45 calendar days of each year end, each Supervised Person must certify that they have read and understands this Code and recognizes that they are subject to it, that that have complied with the requirements of this Code and has disclosed or reported all Personal Securities Transactions required to be disclosed or reported pursuant to the requirements of this Code. In addition, each Supervised Person shall annually provide the following information (as of a date no more than 45 days before the report is submitted):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)the title and type of security, the ticker symbol or CUSIP number, number of shares and principal amount of each Security in which the Supervised Person had any Beneficial Interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)the name of any broker, dealer or custodian/bank with whom the Supervised Person maintains an account in which any Securities are held for the direct or indirect benefit of the Supervised Person, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)the date the report is submitted.

3. Quarterly Transaction Reports

Every Supervised Person must, no later than thirty (30) days after the end of each calendar quarter, file a quarterly transaction report containing the following information:

With respect to any transaction during the quarter in a Reportable Security in which the Supervised Person had any direct or indirect beneficial ownership:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, the interest rate and maturity date, the number of shares and the principal amount of each Reportable Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the price of the Reportable Security at which the transaction was effected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the name of the broker, dealer or custodian/bank with or through whom the transaction was effected; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date the report is submitted by the Supervised Person.

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4. Monitoring and Review of Personal Securities Transactions

The CCO, or their designee, shall monitor and review all reports required under the Code for compliance with TAM's policies regarding personal securities transactions and applicable SEC rules and regulations. The CCO may also initiate inquiries of Supervised Persons regarding personal securities trading. Supervised Persons are required to cooperate with such inquiries and any monitoring or review procedures employed. Any transactions for any accounts of the CCO shall be reviewed and approved by the COO or other designated Officer of TAM.

5. General Sanction Guidelines

It should be emphasized that all required filings and reports under the Firm's Code shall be monitored by the CCO or their designee. The CCO shall receive and review report(s) of violations periodically. Violators may be subject to an initial written notification, while a repeat violator shall receive reprimands including administrative warnings, heightened supervision, suspension or limitations of personal trading privileges, demotions, suspensions, a monetary fine, or dismissal of the person involved. The remediation for any violation is based on the particular circumstances of that violation. No employee will receive preferential treatment based on their position within the Firm.

These are guidelines only, allowing TAM reserves the right to apply any appropriate sanction depending upon the circumstances, up to and including dismissal, as we deem appropriate.

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**Short-Term Trading Profits**

TAM's Supervised Persons are prohibited from purchasing and then selling or selling and then purchasing the same security within 30 calendar days of the initial transaction. In situations where multiple transactions have occurred in the same security, the holding period will calculate from the date of the most recent opposite-way transaction of the relevant security across all accounts, regardless of the holding period of prior transactions in the same security.

Any prohibited short-term profits are subject to disgorgement. This prohibition does not, however, apply to Exempt Transactions (as defined in Definitions). Furthermore, if a pattern of short-term trading is detected, the Firm reserves the right to impose additional restrictions on such access person's personal trading.

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**Personal Securities Trading Limitations**

As previously stated, TAM's fiduciary duty to clients and the obligation of all TAM employees to uphold that fundamental duty, includes first and foremost the duty at all times to place the interests of clients first. As such, the Firm expects all employees to work diligently in meeting client expectations and fulfilling their job responsibilities.

Although TAM's policy does not impose strict limitations as to the number of transactions a Supervised Person is permitted to execute during a defined timeframe, the scope and volume of personal trading by Supervised Persons shall be periodically assessed by the CCO or their designee. The Firm also recognizes that excessive trading may impede the ability of an individual to fulfill their primary obligation to our clients. In such circumstances the Firm retains the discretionary authority to impose limitations on the personal trading activities of the Supervised Person. Furthermore, and as part of TAM's oversight and monitoring of personal trading by Supervised Persons, the Firm may impose heightened supervision and or trading restrictions on a Supervise Person if it believes that such actions are warranted.

Any questions concerning this policy should be directed to the CCO.

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**Margin Transactions**

Securities held in a margin account may be sold by the broker if a Supervised Person fails to meet a margin call. Supervised Persons may not have control over these transactions as the securities may be sold at certain times without the Supervised Person's consent. A margin sale that occurs when a Supervised Person is aware of material, nonpublic information may, under some circumstances, result in unlawful insider trading.

Although TAM's policies do not expressly prohibit Supervised Persons' ability to purchase securities on margin, the use of margin should be part of any preclearance request, and the Firm retains the discretionary authority to approve or deny any such requests on a trade-by-trade basis.

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**Limit Orders**

Although TAM's policies generally permit Supervised Persons to place limit orders, all preclearance requests seeking preapproval for placement of a limit order shall be subject to review. TAM retains the authority to approve or deny such requests on a trade-by-trade basis.

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**Interested Transactions**

No Supervised Person shall recommend any securities transactions for a client's account without having disclosed their personal interest, if any, in such securities or the issuer thereof, to the Investment Committee including without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any direct or indirect beneficial ownership of any securities of such issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any position with such issuer or its affiliates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any present or proposed business relationship between such issuer or its affiliates and such person or any party in which such person has a significant interest.

**Note>** Securities acquired as part of a Related Account are not required to be disclosed.

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**Outside Business Activities**

TAM has adopted the following principles governing outside business activities by TAM Supervised Persons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the interests of client accounts shall at all times be placed first;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all outside business activities shall be conducted in such manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons must not take inappropriate advantage of their positions.

The Code mandates prior approval for outside business activities where a Supervised Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may be compensated or have the reasonable expectation of compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is working with or for a client, regardless of whether compensation is received; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is in a position to receive material non-public information concerning a publicly-traded company.

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**Service as an Officer or Director**

No Supervised Person shall serve as an officer or on the board of directors of any publicly or privately traded company without prior authorization by the CCO based upon a determination that any such board service or officer position would be consistent with the interest of TAM's clients. Where board service or an officer position is approved, the Supervised Person will be isolated from others making investment decisions with respect to securities of the company in question.

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**Gifts and Entertainment**

Giving, receiving or soliciting gifts or entertainment in a business setting may create an appearance of impropriety or may raise a potential conflict of interest. TAM has adopted the policies set forth below to guide Supervised Persons in this area.

**General Policy**

TAM's policy with respect to gifts and entertainment is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• giving, receiving or soliciting gifts in a business may give rise to an appearance of impropriety or may raise a potential conflict of interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no Supervised Person may give or accept cash gifts or cash equivalents, in excess of $100 per year, to or from a client, prospective client, or any entity that does, or seeks to do, business with or on behalf of TAM;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons should not accept or provide any gifts, or favors that might influence the decisions you or the recipient must make in business transactions involving TAM, or that others might reasonably believe would influence those decisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no Supervised Person may accept extravagant or excessive entertainment from a client, prospective client, or any person or entity that does or seeks to do business with or on behalf of TAM; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• where there is a law or rule that applies to the conduct of a particular business or the acceptance of gifts or entertainment of even nominal value, the law or rule must be followed.

**Reporting Requirements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any Supervised Person who accepts, directly or indirectly, anything of value from any person or entity that does business with or on behalf of TAM, including gifts, or gratuities with a value in excess of $100 per year must obtain consent from the CCO before accepting such gift. Any gifts deemed inappropriate or extravagant by the CCO will be returned to the giver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• TAM's policy prohibits Supervised Persons seeking to provide or offer any gift, in excess of $100 per year, to existing clients, prospective clients, or any person or entity that does business with or on behalf of TAM without obtaining pre-approval from the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a Supervised Person may provide or accept bona fide dining or bona fide entertainment if, during such dining or entertainment, you are accompanied by the person or representative of the entity that does business with the Firm. Substantiation of the business purpose of the entertainment must be satisfied, and one should review the Marketing Policy for additional reporting requirement that may arise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the reporting requirements are for the purpose of helping TAM monitor the activities of its employees. However, reporting does not relieve any Supervised Person from the obligations and policies set forth in this Section or anywhere else in this Code. If you have any questions or concerns about the appropriateness of any gift or entertainment, please consult the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supervised Persons are required to complete quarterly and annual gifts and entertainment certifications.

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*According to the DOL's Enforcement Manual, gifts and entertainment from one individual or entity that have an aggregate annual value of less than $250 (and that do not violate any plan policy or provision) are considered "insubstantial" and are generally not treated as violations of Section 406(b)(3). Advisers are required to report gifts to certain Taft-Hartley plan trustees to the DOL (e.g., payments of $250 or more per year per person must be reported on Form LM-10).*

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**Political Contributions**

In July 2010, the SEC adopted the 'Pay-to-Play Rule' which imposes restrictions on political contributions made by investment advisers that seek to manage assets of state and local governments. The rule is intended to prevent undue influence through political contributions and places limits on the amounts of campaign contributions that the investment adviser and/or certain of its employees ('covered associates') can give to state and local officials or candidates that have the ability to award advisory contracts to the Firm.

TAM recognizes that it is never appropriate to make or solicit political contributions or provide gifts or entertainment for the purpose of improperly influencing the actions of public officials. Accordingly, the Firm has put in place a Political Contribution policy as part of its compliance manual. Please refer to this policy for rules governing contribution activity.

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**Whistleblower Policy**

As articulated in this Code's Statement of General Policy and Standards of Business Conduct, central to our Firm's compliance culture is an ingrained commitment to fiduciary principles. The policies and procedures set forth here and in our Compliance Manual, and their consistent implementation by all supervised persons of TAM, evidence the Firm's unwavering intent to place the interests of clients ahead of self-interest for the Firm, our management and staff.

Every Supervised Person has a responsibility for knowing and following the Firm's policies and procedures. Every Supervised Person in a supervisory role is also responsible for those individuals under that Supervised Person's supervision. The Firm's Principal or a similarly designated Officer, has overall supervisory responsibility.

Recognizing our shared commitment to our clients, all Supervised Persons are required to conduct themselves with the utmost loyalty and integrity in their dealings with our clients, customers, stakeholders and one another. Improper conduct on the part of any Supervised Person puts the Firm and our personnel at risk. Therefore, while managers and senior management ultimately have supervisory responsibility and authority, these individuals cannot stop or remedy misconduct unless they know about it. Accordingly, all Supervised Persons are not only expected to, but are required to report their concerns about potentially illegal conduct as well as violations of the Firm's policies.

**Reporting Potential Misconduct**

To ensure consistent implementation of such practices, it is imperative that Supervised Persons have the opportunity to report any concerns or suspicions of improper activity at the Firm (whether by a Supervised Person or other party) confidentially and without retaliation.

TAM's Whistleblower Policy covers the treatment of all concerns relating to suspected illegal activity or potential misconduct.

Supervised Persons must report potential misconduct by submitting a violation, in any form suitable, anonymously. Reports of violations or suspected violations must be reported to the CCO or Supervised Persons may report suspected improper activity by the CCO to the Firm's other senior management.

**Responsibility of the Whistleblower**

A Supervised Person must be acting in good faith in reporting a complaint or concern under this policy and must have reasonable grounds for believing a deliberate misrepresentation has been made regarding accounting or audit matters or a breach of the Firm's compliance manual or this Code. A malicious allegation known to be false is considered a serious offense and shall be subject to disciplinary action that may include termination of employment.

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**Handling of Reported Improper Activity**

The Firm shall take seriously any report regarding a potential violation of Firm policy or other improper or illegal activity and recognizes the importance of keeping the identity of the reporting person from being widely known. Supervised persons are to be assured that the Firm will appropriately manage all such reported concerns or suspicions of improper activity in a timely and professional manner, confidentially and without retaliation.

In order to protect the confidentiality of the individual submitting such a report and to enable TAM to conduct a comprehensive investigation of reported misconduct, Supervised Persons should understand that those individuals responsible for conducting any investigation are generally precluded from communicating information pertaining to the scope and/or status of such reviews.

**No Retaliation Policy**

It is the Firm's policy that no Supervised Person who submits a complaint made in good faith will experience retaliation, harassment, or unfavorable or adverse employment consequences. A Supervised Person who retaliates against a person reporting a complaint will be subject to disciplinary action, which may include termination of employment. A Supervised Person who believes they have been subject to retaliation or reprisal as a result of reporting a concern or making a complaint is to report such action to the CCO or to the Firm's other senior management in the event the concern pertains to the CCO.

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**Reporting Violations and Sanctions**

All Supervised Persons shall promptly report to the CCO all apparent or potential violations of the Code. Any retaliation for the reporting of a violation under this Code shall constitute a violation of the Code.

The CCO shall promptly report to senior management all apparent material violations of the Code. When the CCO finds that a violation otherwise reportable to senior management could not be reasonably found to have resulted in a fraud, deceit, or a manipulative practice in violation of Section 206 of the Advisers Act, the CCO may, in their discretion, submit a written memorandum of such finding and the reasons therefore to a reporting file created for this purpose in lieu of reporting the matter to senior management.

Senior management shall consider reports made to it hereunder and shall determine whether or not the Code has been violated and what sanctions, if any, should be imposed. Possible sanctions may include reprimands, monetary fine or assessment, or suspension or termination of the Supervised Person's employment with the Firm.

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**Records**

The CCO shall maintain and cause to be maintained in a readily accessible place the following records:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a copy of any Code of Ethics adopted by the Firm pursuant to Advisers Act Rule 204A-1 which is or has been in effect during the past five years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a record of any violation of TAM's Code and any action that was taken as a result of such violation for a period of five (5) years from the end of the fiscal year in which the violation occurred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a record of all written acknowledgements of receipt of the Code and amendments thereto for each Supervised Person who is currently, or within the past five (5) years was, a Supervised Person which shall be retained for five (5) years after the individual ceases to be a Supervised Person of TAM;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a list of all Supervised Persons who are, or within the preceding five (5) years have been, Access Persons; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a record of any decision and reasons supporting such decision to approve a Supervised Person's transactions in IPOs, limited offerings, or other reportable security within the past five (5) years after the end of the fiscal year in which such approval is granted.

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**Acknowledgements**

**Initial Acknowledgement**

All Supervised Persons shall be provided with a copy of the Code and must initially acknowledge in writing to the CCO that they have: (i) received a copy of the Code; (ii) read and understand all provisions of the Code; (iii) agreed to abide by the Code; and (iv) reported all accounts and holdings as required by the Code.

**Acknowledgement of Amendments**

All Supervised Persons shall receive any amendments to the Code and must acknowledge to the CCO in writing that they have: (i) received a copy of the amendment; (ii) read and understood the amendment;

(iii) and agreed to abide by the Code as amended.

**Annual Acknowledgement**

All Supervised Persons must annually acknowledge in writing to the CCO that they have: (i) read and understood all provisions of the Code; (ii) complied with all requirements of the Code; and, if applicable,

(iii) submitted all holdings and transaction reports as required by the Code.

**Further Information**

Supervised Persons should contact the CCO regarding any inquiries pertaining to the Code or the policies established herein.

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**Definitions**

For the purposes of this Code, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*1933 Act*"** means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*1934 Act*"** means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Access Person*"** means any Supervised Person who: has access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any Reportable fund the Firm or its control affiliates manage or has access to such recommendations; or is involved in making securities recommendations to clients that are nonpublic. Generally, all Officers and Employees are considered an Access Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Account*"** or **"C*overed account*"** means accounts of any supervised person of the Firm deemed to be an access person and includes accounts of such access person's immediate family (e.g., a spouse or domestic partner, the spouse's or domestic partner's children residing in the same household, or to whom the access person, spouse or domestic partner contributes substantial support), and any account in which he or she has a direct or indirect beneficial interest, such as trusts and custodial accounts or other accounts in which the access person has a beneficial interest, exercises investment discretion, controls, or could reasonably be expected to be able to exercise influence or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Advisers Act*"** means the Investment Advisers Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Advisory Persons*"** means employees and certain control persons (and their employees) who make; participate in or obtain information regarding fund securities transactions or whose functions relate to the making of recommendations with respect to fund transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Automatic investment plan*"** means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Beneficial interest and ownership*"** A Direct or Indirect Beneficial Interest is any direct ownership or an indirect *pecuniary interest* through any contract, arrangement, understanding, relationship or otherwise, including immediate family members (person who is supported directly or indirectly to a material extent by such person), partners in a partnership or beneficiaries of a trust. The term *pecuniary interest* means the opportunity (directly or indirectly) to profit or share in any profit derived from a transaction in Reportable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Blackout Period*"** represents a time frame during which access persons are prohibited from trading in securities in which client transactions in the same security are being considered or traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Chief Compliance Officer*"** (CCO) refers to the Chief Compliance Officer of Todd Asset Management LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Contribution*"** means any gift, subscription, loan, advance, or deposit of money or anything of value made for (i) the purpose of influencing any election for federal, state or local office; (ii) payment of debt incurred in connection with any such election; or (iii) transition or inaugural expenses of the successful candidate for state or local office. (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Control*"** means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Covered Associate*"** means (i) any general partner, managing member or executive officer, or other individual with a similar status or function; (ii) any employee who solicits a government

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entity for the adviser and person who supervises, directly or indirectly, such employee; and Z(iii) any political action committee ("PAC") controlled by the adviser or by any such persons described in clauses (i) or (ii). (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Covered investment pool*"** means (i) an investment company registered under the Investment Company Act of 1940 (e.g., mutual fund) that is an investment option of a plan or program of a government entity; or (ii) any company that is exempt from registering under the Investment Company Act because it either (a) has less than 100 shareholders ("3(c)(1) funds"); (b) have only qualified purchasers ("3(c)(7) funds"); or (c) are collective investment funds maintained by a bank ("3(c)(11) funds"). (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***"Employee Account"*** each account in which an Employee or a member of his or her family has any direct or indirect Beneficial Interest or over which such person exercises control or influence, including, but not limited to, any joint account, partnership, corporation, trust or estate. An Employee's family members include the Employee's spouse, minor children, any person living in the home of the Employee and any relative of the Employee (including in-laws) to whose support an Employee directly or indirectly contributes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***"Exempt Transaction"*** transactions which are **1)** effected in an amount or in a manner over which the Employee has no direct or indirect influence or control, **2)** pursuant to a systematic dividend reinvestment plan, systematic cash purchase plan or systematic withdrawal plan, **3)** in connection with the exercise or sale of rights to purchase additional securities from an issuer and granted by such issuer pro-rata to all holders of a class of its securities, **4)** in connection with the call by the issuer of a preferred stock or bond, **5)** pursuant to the exercise by a second party of a put or call option, **6)** closing transactions no more than five business days prior to the expiration of a related put or call option, **7)** with respect to unaffiliated registered open-end investment companies, **8)** inconsequential to any Client because the transaction is very unlikely to affect a highly liquid market or because the security is clearly not related economically to any securities that a Client may purchase or sell (to be determined by the CCO), **9)** exchange traded funds that are not advised or sub-advised by TAM, or **10)** effected for an Employee Account on a separately managed account platform or a Related Account, but only if the transactions are consistent with transactions effected for all Client accounts following the same model portfolio advice provided by the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Front running*"** can occur when an individual purchases at a lower price or sells at a higher price before (i) execution of a significant securities transaction by some purchaser or seller in a size sufficient to move the market or (ii) issuance or change in an investment adviser's securities recommendation to purchase or sell a security while in possession of material nonpublic information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Government entity*"** means any state or political subdivision of a state, including (i) any agency, authority, or instrumentality of the state or political subdivision; (ii) any pool of assets sponsored or established by any of the foregoing (including, but not limited to a defined benefit plan and a state general fund); (iii) any participant-directed investment program or plan sponsored or established by any of the foregoing; and (iv)officers, agents, or employees of the state or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity. (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Initial public offering*"** (IPO) means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Inside information*"** means non-public information (i.e., information that is not available to investors generally) that there is a substantial likelihood that a reasonable investor would consider to be important in deciding whether to buy, sell or retain a security or would view it as having significantly altered the 'total mix' of information available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Insider*"** is broadly defined as it applies to Todd Asset Management LLC's Insider Trading policy and procedures. It includes our Firm's officers, directors and employees. In addition, a person can be a "temporary insider" if they enter into a special confidential relationship in the conduct of the company's affairs and, as a result, is given access to information solely for TAM's purposes. A temporary insider can include, among others, TAM's attorneys, accountants, consultants, and the employees of such organizations. Furthermore, TAM may become a temporary insider of a client it advises or for which it performs other services. If a client expects TAM to keep the disclosed non-public information confidential and the relationship implies such a duty, then TAM will be considered an insider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Insider trading*"** is generally understood to refer to the effecting of securities transactions while in possession of material, non-public information (regardless of whether one is an "insider") or to the communication of material, non-public information to others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Investment person*"** means a supervised person of Todd Asset Management LLC who, in connection with his or her regular functions or duties, makes recommendations regarding the purchase or sale of securities for client accounts (e.g., portfolio manager) or provides information or advice to portfolio managers, or who help execute and/or implement the portfolio manager's decision (e.g., securities analysts, traders, and portfolio assistants); and any natural person who controls TAM and who obtains information concerning recommendations made regarding the purchase or sale of securities for client accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Investment-related*"** means activities that pertain to securities, commodities, banking, insurance, or real estate (including, but not limited to, acting as or being associated with an investment adviser, broker-dealer, municipal securities dealer, government securities broker or dealer, issuer, investment company, futures sponsor, bank, or savings association).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Limited offering*"** means an offering of securities that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(5) or pursuant to Rule 504, 505, or Rule 506 under the Securities Act of 1933.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Official*"** means any person (including any election committee for the person) who was, at the time of the contribution, an incumbent, candidate or successful candidate for elective office of a government entity, if the office (i) is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser by a government entity; or (ii) has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser by a government entity. (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Plan or program of a government entity*"** means any participant-directed investment program or plan sponsored or established by a state or political subdivision or any agency, authority or instrumentality thereof, including, but not limited to, a "qualified tuition plan" authorized by section 529 of the Internal Revenue Code (26 U.S.C. 529), a retirement plan authorized by section 403(b) or 457 of the Internal Revenue Code (26 U.S.C. 403(b) or 457), or any similar program or plan. (See SEC Rule 206(4)-5; Political Contributions by Certain Investment Advisers)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Private fund*"** means an issuer that would be an investment company as defined in section 3 of the Investment Company Act of 1940 but for Section 3(c)(1) or 3(c)(7) of that Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Registered fund*"** means an investment company registered under the Investment Company Act.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***"Related Account"*** An Employee Account placed with an independent custodian for the purpose of investing in one of the investment strategies managed by the TAM for groups of Client accounts that are not Employee Accounts ("Non-Employee Accounts").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Reportable fund*"** means any registered investment company, Exchange Traded Fund, or other commingled fund for which our Firm acts as investment adviser or sub-adviser, as defined in Section 2(a) (20) of the Investment Company Act, or principal underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***"Reportable security"*** means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral- trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as a "security," or any certificate or interest or participation in temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase (including options) any of the foregoing; except for the following: 1) securities issued by the government of the United States, 2) bankers' acceptances, 3) bank certificates of deposit, 4) commercial paper and high quality short-term debt instruments, including repurchase agreements, 5) shares of money market funds , 6) shares of registered open-end investment companies (other than Reportable Funds) and 7) shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are advised by the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Restricted list*"** typically represents a list of issuers about which an adviser has inside information, and results in prohibitions on effecting either client or personal trades in such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***"Securities Transaction"*** the purchase or sale, or any action to accomplish the purchase or sale, of a Reportable Security for an Employee Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Supervised person*"** means any directors, officers and partners of TAM; employees of TAM; and any other person who provides advice on behalf of TAM and is subject to TAM's supervision and control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Tipping*"** means communication of material nonpublic information to others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"*Watch list securities*"** typically represent a list of issuers currently being evaluated as potential investment opportunities. Advisers may restrict trading in such securities by one or more of the Firm's securities analysts or may more broadly apply the restriction to some or all access persons.