# EDGAR Filing Document

**Accession Number:** 0001643174
**File Stem:** 0001398344-26-005108
**Filing Date:** 2026-3
**Character Count:** 861580
**Document Hash:** f0afa7808555e2ccbf0b570aa6f794c5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001398344-26-005108.hdr.sgml**: 20260313

**ACCESSION NUMBER**: 0001398344-26-005108

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 34

**FILED AS OF DATE**: 20260313

**DATE AS OF CHANGE**: 20260312

**EFFECTIVENESS DATE**: 20260410

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Horizon Funds
- **CENTRAL INDEX KEY:** 0001643174

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1130

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23063
- **FILM NUMBER:** 26749465

**BUSINESS ADDRESS:**
- **STREET 1:** 6210 ARDREY KELL ROAD
- **STREET 2:** SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28277
- **BUSINESS PHONE:** 704-544-2399

**MAIL ADDRESS:**
- **STREET 1:** 6210 ARDREY KELL ROAD
- **STREET 2:** SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28277
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Horizon Funds
- **CENTRAL INDEX KEY:** 0001643174

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1130

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-205411
- **FILM NUMBER:** 26749464

**BUSINESS ADDRESS:**
- **STREET 1:** 6210 ARDREY KELL ROAD
- **STREET 2:** SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28277
- **BUSINESS PHONE:** 704-544-2399

**MAIL ADDRESS:**
- **STREET 1:** 6210 ARDREY KELL ROAD
- **STREET 2:** SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28277

## Series and Classes Contracts Data

### Anfield Universal Fixed Income Fund (Series ID: S000101856)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000272173 | Advisor Class       |  |
| C000272174 | Institutional Class |  |
| C000272175 | Investor Class      |  |

?xml version='1.0' encoding='ASCII'?

As filed with the Securities and Exchange Commission on March 12, 2026

1933 Act Registration File No. 333-205411

1940 Act File No. 811-23063

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**Form N-1A**

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.__

Post-Effective Amendment No. 61

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 63

**HORIZON FUNDS**

(Exact Name of Registrant as Specified in Charter)

6210 Ardrey Kell Road, Suite 300

Charlotte, North Carolina 28277

(Address of Principal Office)

Registrant's Telephone Number, including Area Code: (704) 544-2399

Matthew S. Chambers

Horizon Funds

6210 Ardrey Kell Road, Suite 300

Charlotte, North Carolina 28277

(Name and Address of Agent for Service)

With copy to: Jeffrey T. Skinner, Esq.

Kilpatrick Townsend & Stockton LLP

1001 West Fourth Street

Winston-Salem, NC 27101

It is proposed that this filing become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)

[X] on April 10, 2026, 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 (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

![](fp0097930-1_01.jpg)

**PROSPECTUS**

**Anfield Universal Fixed Income Fund**

Advisor Class ____ <br> Investor Class ____ <br> Institutional Class AFLIX

**May 1, 2026**

The Prospectus provides important information about the Fund that you should know before investing. Please read it carefully and keep it for future reference.

These securities have not been approved or disapproved by the U.S. Securities and Exchange Commission nor has the U.S. Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

**<u>**TABLE OF CONTENTS**</u>**

---

| | |
|:---|:---|
| SUMMARY SECTIONS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Objective | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees and Expenses of the Universal Fixed Income Fund | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Turnover | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal Investment Strategies of the Universal Fixed Income Fund | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal Risks of the Universal Fixed Income Fund | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Adviser | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Managers | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase and Sale of Fund Shares | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Information | 9 |
| ADDITIONAL INFORMATION ABOUT THE FUND'S PRINCIPAL INVESTMENT STRATEGIES | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Objective | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary Defensive Strategies | 11 |
| PRINCIPAL INVESTMENT RISKS | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Principal Risks | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Holdings Disclosure | 26 |
| MANAGEMENT OF THE FUND | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Adviser | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multi-Manager Structure | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Managers | 28 |
| HOW SHARES ARE PRICED | 29 |
| HOW TO PURCHASE SHARES | 30 |
| HOW TO REDEEM SHARES | 32 |
| HOW TO EXCHANGE SHARES | 36 |
| TAX STATUS, DIVIDENDS AND DISTRIBUTIONS | 36 |
| FREQUENT PURCHASES AND REDEMPTIONS OF SHARES | 39 |
| HOUSEHOLDING | 40 |
| ADDITIONAL INFORMATION | 40 |
| FINANCIAL HIGHLIGHTS | 41 |
| PRIVACY NOTICE | 43 |

---

**SUMMARY SECTIONS**

**<u>Anfield Universal Fixed Income Fund</u>**

**Investment Objective**

The Anfield Universal Fixed Income Fund (the "Universal Fixed Income Fund" or the "Fund") seeks current income.

**Fees and Expenses of the Universal Fixed Income Fund**

This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Universal Fixed Income Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below**.

---

| | | | |
|:---|:---|:---|:---|
| **Annual Fund Operating Expenses <br> (expenses that you pay each year as a percentage of the value of your investment)** | **Adviser**<br> **Class** | **Investor**<br> **Class** | **Institutional**<br> **Class** |
| Management Fees | 0.80% | 0.80% | 0.80% |
| Distribution and Service (12b-1) Fees | 0.25% | 0.10% |  |
| Other Expenses<sup>(1)</sup> | 0.25% | 0.25% | 0.25% |
| **Total Annual Fund Operating Expenses** | 1.30% | 1.15% | 1.05% |
| Fee Waiver and Expense Reimbursements <sup>(2)</sup> | (0.06)% | (0.06)% | (0.06)% |
| **Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursements/Recoupment** | 1.24% | 1.09% | 0.99% |

---

 

<sup>(1)</sup> "Other expenses" have been adjusted from amounts incurred by the Fund's predecessor, Anfield Universal Fixed Income Fund, a series of Two Roads Shared Trust ("the Universal Fixed Income Predecessor Fund"), during the Universal Fixed Income Predecessor Fund's most recent fiscal year end to reflect estimated current expenses for the Fund.

<sup>(2)</sup> Horizon has agreed to waive its advisory fee and reimburse expenses to limit total operating expenses of the Fund at least until March 31, 2029, so that direct expenses (exclusive of front-end or contingent deferred loads; brokerage fees and commissions; acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); payments, if any, under a Rule 12b-1 Distribution Plan; expenses paid with securities lending expense offset credits; taxes; and extraordinary expenses (such as litigation)) of the Fund will not exceed, 0.99% with respect to Advisor Class, Investor Class and Institutional Class shares, subject to the terms of the applicable expense limitation agreement; provided, however, that any fees waived and expenses reimbursed are subject to possible recoupment by Horizon, within 36 months after such fees have been waived or expenses reimbursed, if such recoupment can be achieved without exceeding the lower of the expense limit in place at the time of the waiver or reimbursement and the expense limit in place at the time of recoupment. After the expiration of the contractual expense limitation, total annual fund operating expenses may increase if Horizon does not renew or maintain the cap or waiver.

**Example:** This Example is intended to help you compare the cost of investing in the Universal Fixed Income Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Universal Fixed Income Fund for the time periods indicated and then sell 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 Universal Fixed Income Fund's operating expenses remain the same. The fee waiver/expense reimbursement arrangement discussed in the table above is reflected only through March 31, 2029. Although your actual costs may be higher or lower, based upon these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Anfield Universal Fixed Income Fund** | **1 Year** | **3 Years** | **5 Years** | **10 Years** |
| Institutional Class Shares | $101 | $315 | $561 | $1265 |
| Advisor Class Shares | $126 | $393 | $695 | $1551 |
| Investor Class Shares | $111 | $347 | $615 | $1381 |

---

**Portfolio Turnover**

The Universal Fixed Income 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 Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Universal Fixed Income Fund's performance. During the most recent fiscal year, the portfolio turnover rate for the Universal Fixed Income Predecessor Fund was 42% of the average value of the portfolio.

**Principal Investment Strategies of the Universal Fixed Income Fund**

The Fund normally invests at least 80% of its net assets, including any borrowings for investment purposes, in a diversified portfolio of fixed income instruments. The Fund is not managed relative to an index and has broad flexibility to allocate its assets across different types of securities and sectors of the fixed income markets. The principal investments of the Fund include corporate bonds, U.S. government and agency securities, master-limited partnerships ("MLPs") (tied to energy-related commodities), preferred securities, private debt, foreign sovereign bonds, convertible securities, bank loans, mortgage-backed securities, and cash equivalent instruments. To a lesser extent, the Fund may invest in dividend-paying common stocks. The Fund may invest in structured products including mortgage-related and other asset-backed securities including residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities and collateralized loan obligations ("CLOs").

The Fund may invest in fixed income instruments with fixed or adjustable (floating) rates. The Fund does not seek to maintain any particular weighted average maturity or duration, and may invest in fixed income instruments of any maturity or duration. The Fund may invest in both investment grade and below investment grade (often referred to as "high yield" or "junk" bonds) securities, subject to a maximum of up to 50% of the Fund's assets in below investment grade securities. The Fund will typically invest a substantial portion of the Fund's investments in securities of issuers with a range of credit ratings that have stable or improving fundamentals. Securities of these issuers include secured bank loans and below investment grade bonds. The Fund may also engage in short sales when it believes a security is overvalued in the market. The Fund may invest without limit in U.S. and non-U.S. dollar-denominated securities of U.S. and foreign issuers. Depending on market conditions, the Fund may at times focus its investments in particular sectors or areas of the economy.

The Fund's investment process includes both a top-down macroeconomic analysis and a bottom-up analysis of individual securities. In its evaluation of a potential investment, the Fund conducts a fundamental analysis of the individual issuer, reviews the valuation of the security and the relative valuations of similar securities, and analyzes the supply and demand for the security in the market. The Fund seeks to identify companies in stable and growing sectors of the economy that generate sufficient revenue to meet their debt obligations. The Fund will sell a portfolio holding when the security no longer meets its investment criteria or when a more attractive investment is available.

The Fund may engage in active and frequent trading. The Fund may also engage in securities lending to generate income.

**Principal Risks of the Universal Fixed Income Fund**

Many factors affect the Universal Fixed Income Fund's performance. The Universal Fixed Income Fund is not federally insured or guaranteed by any government agency. You may lose money by investing in the Fund and there is no guarantee that the Fund will achieve its investment objective. The principal risks affecting shareholders' investments in the Fund are set forth below.

**Market Risk.** Overall market risk may affect the value of individual instruments in which the Fund invests. The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors such as domestic and foreign (non-U.S.) economic growth and market conditions, real or perceived adverse economic or political conditions, military conflicts, acts of terrorism, social unrest, natural disasters, recessions, inflation, changes in interest rate levels, supply chain disruptions, sanctions, tariffs, the spread of infection, or other public health threats, lack of liquidity in the bond markets, volatility in the securities markets, adverse investor and political events affect the securities markets. U.S. and foreign stock markets have experienced periods of substantial price volatility in the past and may do so again in the future. Securities markets also may experience long periods of decline in value. A change in financial condition or other event affecting a single issuer or market may adversely impact securities markets as a whole. The value of assets or income from an investment may be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Fund's assets can decline as can the value of the Fund's distributions. When the value of the Fund's investments goes down, your investment in the Fund decreases in value and you could lose money.

Local, state, regional, national or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments and could result in decreases to the Fund's net asset value. Political, geopolitical, natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures, natural and environmental disasters, epidemics, pandemics and other public health crises and related events and governments' reactions to such events have led, and in the future may lead, to economic uncertainty, decreased economic activity, increased market volatility and other disruptive effects on U.S. and global economies and markets. Such events may have significant adverse direct or indirect effects on the Fund and its investments. For example, a widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, impact the ability to complete redemptions, and affect Fund performance. A health crisis may exacerbate other pre-existing political, social and economic risks. In addition, the increasing interconnectedness of markets around the world may result in many markets being affected by events or conditions in a single country or region or events affecting a single or small number of issuers.

**Fixed Income Securities Risk.** Fixed income securities held by the Fund are subject to interest rate risk, call risk, prepayment and extension risk, credit risk, duration, and liquidity risk. In addition, current market conditions may pose heightened risks for fixed income securities. When the Fund invests in fixed income securities or derivatives, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities or derivatives owned by the Fund. In general, the market price of fixed income securities with longer maturities or durations will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment by the Fund, possibly causing the Fund's share price and total return to be reduced and fluctuate more than other types of investments. Moreover, new regulations applicable to and changing business practices of financial intermediaries that make markets in fixed income securities have resulted in less market making activity for certain fixed income securities, which has reduced liquidity and may increase the volatility for such fixed income securities. The fixed-income securities market can be susceptible to increases in volatility and decreases in liquidity. Liquidity may decline unpredictably in response to overall economic conditions or credit tightening. For example, a general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions for the Fund. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund's performance. Duration risk arises when holding long duration and long maturity investments, which will magnify certain risks, including interest rate risk and credit risk. Longer-term securities may be more sensitive to interest rate changes. Effective duration estimates price changes for relatively small changes in rates. If rates rise significantly, effective duration may tend to understate the drop in a security's price. If rates drop significantly, effective duration may tend to overstate the rise in a security's price.

**Credit Spread Risk.** The risk that credit spreads (or the difference in yield between securities that is due to differences in their credit quality) may increase when the market expects lower-grade bonds to default more frequently. Widening credit spreads may quickly reduce the market values of lower-rated securities.

**Interest Rate Risk.** In response to certain economic conditions, including periods of high inflation, government authorities and regulators may respond with significant fiscal and monetary policy changes such as raising interest rates. Generally, when interest rates rise, prices of fixed-income securities fall. However, market factors, such as the demand for particular fixed income securities, may cause the price of certain fixed income securities to fall while the prices of other securities rise or remain unchanged. Certain countries have experienced negative interest rates on certain fixed-income instruments. Very low or negative interest rates may magnify interest rate risk. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates and/or volatility.

**Management Risk.** The risk that investment strategies employed by the Adviser in selecting investments for the Fund may not result in an increase in the value of your investment or in overall performance equal to other similar investment vehicles having similar investment strategies.

**Mortgage-Backed and Asset-Backed Securities Risk.** The risk of investing in mortgage-backed and other asset-backed securities, including prepayment risk, extension risk, interest rate risk, market risk and management risk. Mortgage-backed securities include caps and floors, inverse floaters, mortgage dollar rolls, private mortgage pass-through securities, resets and stripped mortgage securities. A systemic and persistent increase in interest rate volatility may also negatively impact a number of the Fund's mortgage-backed and asset-backed securities holdings. Conversely, periods of falling interest rates often results in increased prepayment on the underlying mortgage or asset which may cause the yield realized by the Fund to be less than the yield the Fund predicted.

**Collateralized Loan Obligations Risk**. The Fund is subject to the following risks as a result of its investments in CLOs:

● *Asset Manager Risk*. The CLO's performance is linked to the expertise of the CLO manager and its ability to manage the CLO portfolio. The experience of a CLO manager plays an important role in the rating and risk assessment of CLO debt securities. One of the primary risks to investors of a CLO is the potential change in CLO manager, over which the Fund will have no control.

● *Legal and Regulatory Risk*. The Fund may be adversely affected by new (or revised) laws or regulations that may be imposed by government regulators or self-regulatory organizations that supervise the financial markets. These agencies are empowered to promulgate a variety of rules pursuant to financial reform legislation in the United States. The Fund may also be adversely affected by changes in the enforcement or interpretation of existing statutes and rules. Changes in the regulation of CLOs may adversely affect the value of the investments held by the Fund and the ability of the Fund to execute its investment strategy.

● *Limited Recourse Risk*. CLO debt securities are limited recourse obligations of their issuers. CLO debt is payable solely from the proceeds of its underlying assets. Consequently, CLO investors must rely solely on distributions from the underlying assets for payments on the CLO debt they hold. No party or entity other than the issuer will be obligated to make payments on CLO debt. CLO debt is not guaranteed by the issuer or any other party or entity involved in the organization and management of a CLO. If income from the underlying loans is insufficient to make payments on the CLO debt, no other assets will be available for payment.

● *Redemption Risk*. CLO debt securities may be subject to redemption. For example, certain tranches of CLO debt may be redeemed if the CLO manager is unable to identify assets suitable for investment during the period when it has the ability to reinvest the principal proceeds from the sale of assets, scheduled redemptions and prepayments in additional assets (the "Reinvestment Period"). Additionally, holders of subordinated CLO debt may cause the redemption of senior CLO debt. In the event of an early redemption, holders of the CLO debt being redeemed will be repaid earlier than the stated maturity of the debt. The timing of redemptions may adversely affect the returns on CLO debt.

● *Reinvestment Risk*. The CLO manager may not find suitable assets in which to invest during the Reinvestment Period or to replace assets that the manager has determined are no longer suitable for investment (for example, if a security has been downgraded by a rating agency). Additionally, the reinvestment period is a pre-determined finite period of time; however, there is a risk that the reinvestment period may terminate early if, for example, the CLO defaults on payments on the securities which it issues or if the CLO manager determines that it can no longer reinvest in underlying assets. Early termination of the Reinvestment Period could adversely affect a CLO investment.

**Active Trading Risk.** A higher portfolio turnover due to active and frequent trading will result in higher transactional and brokerage costs that may result in lower investment returns.

**Bank Loan Risk.** The Fund's investments in secured and unsecured participations in bank loans and assignments of such loans may create substantial risk. In making investments in such loans, which are made by banks or other financial intermediaries to borrowers, the Fund will depend primarily upon the creditworthiness of the borrower for payment of principal and interest.

**Cash Positions Risk.** The Fund may hold a significant position in cash, cash equivalent securities or U.S. Treasury investments. When the Fund's investment in cash, cash equivalent securities or U.S. Treasury investment increases, the Fund may not participate in market advances or declines to the same extent that it would if the Fund were more fully invested.

**Common Stock Risk.** The stock (i.e., equity) market can be volatile. Equity securities are susceptible to general market fluctuations, volatile increases and decreases in value as market confidence in and perceptions of their issuers change and unexpected trading activity among retail investors. The prices of stocks can fall rapidly in response to developments affecting a specific company or industry, or to changing economic, political or market conditions.

**Convertible Securities Risk.** Convertible securities subject the Fund to the risks associated with both fixed-income securities and equity securities. The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change based on changes in the issuer's credit rating or the market's perception of the issuer's creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock. If a convertible security's investment value is greater than its conversion value, its price likely increases when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying equity security.

**Credit Risk.** The risk that the Fund could lose money if the issuer or guarantor of a fixed income security is unwilling or unable to make timely payments to meet its contractual obligations on an investment held by the Fund. Changes in the credit rating of a debt security held by the Fund could have a similar effect.

**Currency Risk.** The risk that foreign (non-U.S.) currencies will decline in value relative to the U.S. dollar and adversely affect the value of the Fund's investments in foreign currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign currencies. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of supply and demand in the foreign exchange markets, actual or perceived changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or currency controls or political developments in the U.S. or abroad.

**Cybersecurity Risk.** There is risk to the Fund of an unauthorized breach and access to fund assets, customer data (including private shareholder information), or proprietary information, or the risk of an incident occurring that causes the Fund, the investment adviser, custodian, transfer agent, distributor and other service providers and financial intermediaries ("Service Providers") to suffer data breaches, data corruption or lose operational functionality. Successful cyber-attacks or other cyber-failures or events affecting the Fund or its Service Providers may adversely impact the Fund or its shareholders.

**Foreign (Non-U.S.) Investment Risk.** Foreign (non-U.S.) securities present greater investment risks than investing in the securities of U.S. issuers and may experience more rapid and extreme changes in value than the securities of U.S. companies, due to less information about foreign companies in the form of reports and ratings than about U.S. issuers; different accounting, auditing and financial reporting requirements; smaller markets; nationalization; expropriation or confiscatory taxation; currency blockage; or political, financial, social and economic events (including, for example, military confrontations, war and terrorism) or diplomatic developments. Foreign (non-U.S.) securities may be less liquid and more difficult to value than securities of U.S. issuers. To the extent that the Fund invests a significant portion of its assets in a specific geographic region, the Fund will generally have more exposure to regional economic risks associated with foreign investments. International trade barriers or economic sanctions against foreign countries, organizations, entities and/or individuals may adversely affect the Fund's foreign holdings or exposures.

**Gap Risk.** The Fund is subject to the risk that stock price or derivative value will change dramatically from one level to another with no trading in between and/or before the Fund can exit from the investment. Usually, such movements occur when there are adverse news announcements, which can cause a stock price or derivative value to drop substantially from the previous day's closing price. Trading halts may lead to gap risk.

**High Yield Fixed Income Securities ("Junk Bond") Risk.** Investment in or exposure to high yield (lower rated or below investment grade) debt instruments (also known as "junk bonds") may involve greater levels of interest rate, credit, liquidity and valuation risk than for higher rated instruments. High yield debt instruments are considered predominantly speculative and are higher risk than investment grade instruments with respect to the issuer's continuing ability to make principal and interest payments and, therefore, such instruments generally involve greater risk of default or price changes than higher rated debt instruments. Junk bonds may experience more price volatility and a more limited market than the market for investment-grade fixed income securities.

**Index Risk.** If a derivative or ETF is linked to the performance of an index, it will be subject to the risks associated with changes in that index.

**Issuer-Specific Risk.** The value of a specific security can be more volatile than the market as a whole and may perform worse than the market as a whole.

**Liquidity Risk.** Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations. Illiquidity may result from the absence of an established market for investments as well as legal, contractual, or other restrictions. Liquidity risk may be magnified in an environment of rising interest rates or widening credit spreads in which investor redemptions from fixed income mutual funds may be higher than normal. In stressed markets, certain types of mortgage-backed securities may suffer periods of illiquidity if they are disfavored by the market. All of these risks may increase during periods of market turmoil, such as those experienced in 2020 with COVID-19, and could have a negative effect on the Fund's performance. Securities of companies with smaller market capitalizations, foreign securities, or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risk.

**Market Events Risk.** There has been increased volatility, depressed valuations, decreased liquidity and heightened uncertainty in the financial markets during the past several years, including what was experienced in 2020. These conditions may continue, recur, worsen or spread. The U.S. government and the Federal Reserve, as well as certain foreign governments and central banks, took steps to support financial markets, including by lowering interest rates to historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. When the U.S. government and the Federal Reserve reduce market support activities, including by increasing interest rates, such reductions could negatively affect financial markets generally, increase market volatility and reduce the value and liquidity of securities in which the Fund invests. Policy and legislative changes in the United States and in other countries may also contribute to decreased liquidity and increased volatility in the financial markets. The impact of these influences on the markets, and the practical implications for market participants, may not be fully known for some time.

**Master Limited Partnership ("MLP") Risk.** An investment in MLP units involves certain risks which differ from an investment in the securities of a corporation. Holders of MLP units have limited control and voting rights on matters affecting the partnership. In addition, there are certain tax risks associated with an investment in MLP units and conflicts of interest exist between common unit holders of MLPs and the general partner, including those arising from incentive distribution payments. Risks of MLPs include the following: a decrease in the production of natural gas, natural gas liquids, crude oil, coal or other energy commodities or a decrease in the volume of such commodities available for transportation, mining, processing, storage or distribution may adversely impact the financial performance of MLPs or MLP-related securities. In addition, investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs. The amount of cash that any MLP has available to pay its unit holders in the form of distributions/dividends depends on the amount of cash flow generated from such company's operations. Cash flow from operations will vary from quarter to quarter and is largely dependent on factors affecting the MLP's operations and factors affecting the energy, natural resources or real estate sectors in general. MLPs were adversely impacted by the reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of the COVID-19 pandemic, which triggered an unprecedented sell-off of energy pipeline and midstream companies in 2020. Within the past several years, global oil prices have experienced significant volatility, including a period where an oil-price futures contract fell into negative territory for the first time in history. Reduced production and continued oil price volatility may adversely impact the value of the Fund's investments in MLPs and energy infrastructure companies.

**Odd Lot Risk.** Bonds may be purchased and held as smaller sized bond positions known as "odd lots". Pricing services generally value such securities based on bid prices for larger institutional sized bond positions known as "round lots"; and such round lot prices may reflect more favorable pricing than odd lot holdings. The Fund may purchase securities suitable for its investment strategies in odd lots. Special valuation considerations may apply with respect to the Fund's odd-lot positions, as the Fund may receive different prices when it sells such positions than it would receive for sales of institutional round lot positions. The Fund may fair value a particular bond if the Adviser does not believe that the round lot value provided by the independent pricing service reflects fair value of the Fund's holding. There can be no assurance that the Fund's valuation procedures will result in pricing data that is completely congruent with prices that the Fund might obtain on the open market.

**Options Risk.** Investments in options involve risks different from, or possibly greater than, the risks associated with investing directly in securities, including leverage risk, tracking risk, and, in the case of over-the-counter options, counterparty default risk. Option positions may expire worthless, exposing the Fund to potentially significant losses. If the Fund writes options, it may receive a premium that is small relative to the loss realized in the event of adverse changes in the value of the underlying instruments. When the Fund utilizes options combinations, such as spreads, straddles, collars, or other strategies, the premium received for writing the call option may offset, in part, the premium paid to purchase the corresponding put option; however, these strategies may limit upside gains while not fully protecting against downside risks, and the cost of implementing them may reduce the Fund's overall returns. To the extent a Fund writes options on individual securities that it does not hold in its portfolio (i.e., "naked" options), it is subject to the risk that a liquid market for the underlying security may not exist at the time an option is exercised or when the Fund otherwise seeks to close out an option position. Naked call options, in particular, have speculative characteristics and the potential for unlimited loss.

**FLEX Options.** FLEX Options are guaranteed for settlement by the OCC. Although unlikely, it is possible the OCC is unable to meet its settlement obligations, which could result in substantial loss for the Fund. FLEX Options may be less liquid than more traditional exchange-traded option contracts, meaning that the Fund may have more difficulty closing out certain FLEX Options positions at desired times and prices. Upon expiration, the FLEX Options held by the Fund will be exercisable at the strike price. Prior to the expiration date, the value of the FLEX Options will be determined based upon market quotations or using other recognized pricing methods. The value of the FLEX Options prior to the expiration date may vary due to factors other than the value of underlying asset, such as interest rate changes, changing supply and demand, decreased liquidity of the FLEX Options, a change in the actual and perceived volatility of the stock market and underlying asset, and the remaining time to expiration.

**Preferred Securities Risk.** Preferred securities can decrease in value for a variety of reasons, including decreases in response to the activities of an individual company or in response to general market and/or economic conditions. To the extent a preferred security defers, suspends, or does not declare distributions, the preferred security may lose significant value, and the Fund may still be required to account for the distribution that has been deferred or suspended even though it has not received this income in cash. The market value of all securities, including preferred securities, is based upon the market's perception of value and not necessarily the book value of an issuer or other objective measures of a company's worth. Preferred securities may be less liquid than common securities and may be subject to more fluctuations in market value, due to changes in market participants' perceptions of the issuer's ability to continue to pay dividends, than debts of the same issuer.

**Prepayment and Extension Risk.** Many types of fixed income securities are subject to prepayment risk. Prepayment occurs when the issuer of a fixed income security can repay principal prior to the security's maturity. Fixed income securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment and accordingly, a decline in the Fund's net asset value. In addition, the potential impact of prepayment features on the price of a fixed income security can be difficult to predict and result in greater volatility. On the other hand, rising interest rates could cause prepayments of the obligations to decrease, extending the life of mortgage- and asset-backed securities with lower payment rates. This is known as extension risk and may increase the Fund's sensitivity to rising rates and its potential for price declines.

**Regulatory Risk.** Changes in the laws or regulations of the United States or other countries, including any changes to applicable tax laws and regulations, could impair the ability of the Fund to achieve its investment objective and could increase the operating expenses of the Fund. For example, the SEC recently adopted regulations that will subject activities of investment companies trading certain derivative instruments to additional regulation, which may increase the operating expenses of the Fund and impair the Fund's ability to achieve its investment objective.

**Sector Risk.** The risk that if the Fund invests a significant portion of its total assets in certain issuers within the same economic sector, an adverse economic, business or political development or natural or other event, including war, terrorism, natural and environmental disasters, epidemics, pandemics and other public health crises, affecting that region or sector may affect the value of the Fund's investments more than if the Fund's investments were not so focused. While the Fund may not concentrate in any one industry, the Fund may invest without limitation in a particular sector. Economic, legislative, or regulatory developments may occur that significantly affect an entire sector. This may cause the Fund's NAV to fluctuate more than that of a fund that does not focus in a particular sector. Also, a significant dislocation in one or more industries (e.g., energy, commodities, etc.) could put pressure on bonds issued by those sectors.

**Securities Lending Risk.** The risks associated with lending portfolio securities, as with other extensions of secured credit, include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the securities loaned, possible loss of rights in the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. In certain market conditions, the portion of the Fund's securities on loan may be significant and may magnify the risk of such a loss or delay.

**Short Sales Risk.** The risk on a short sale is the risk of loss if the value of a security sold short increases prior to the delivery date, since the Fund must pay more for the security than it received from the purchaser in the short sale. Therefore, the risk of loss may be unlimited, whereas the potential loss on long positions is limited to the original purchase price. You should be aware that any strategy that includes selling securities short could suffer significant losses. Shorting will also result in higher transaction costs (such as interest and dividends), which reduce the Fund's return, and may result in higher taxes.

**Underlying Fund Risk.** The Fund's investment performance and its ability to achieve its investment objective are directly related to the performance of the underlying funds in which it invests. There can be no assurance that the Fund's investments in the underlying funds will achieve their respective investment objectives. The Fund is subject to the risks of the underlying funds in direct proportion to the allocation of its assets among the underlying funds. The Fund will also bear its proportionate share of fees and expenses of the underlying funds, which may increase overall costs. Regulatory limits may restrict the Fund's ability to invest in other funds.

**U.S. Government Securities Risk.** Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. The U.S. government and its agencies and instrumentalities do not guarantee the market value of their securities, which may fluctuate, and the securities may be affected by changes in the credit rating of the U.S. Government.

**Valuation Risk.** The sale price that the Fund could receive for a portfolio security may differ from the Fund's valuation of the security, particularly for securities that trade in low volume or volatile markets or that are valued using a fair value methodology. In addition, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Fund's shares.

**Variable or Floating Rate Securities Risk.** Variable and floating rate securities generally are less sensitive to interest rate changes but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Floating rate securities will not generally increase in value if interest rates decline. Although floating rate securities are generally less sensitive to interest rate risk than fixed-rate securities, they are subject to credit risk and default risk which could impair their value.

**Volatility Risk.** The Fund's investments may appreciate or decrease significantly in value over short periods of time. The value of an investment in the Fund's portfolio may fluctuate due to factors that affect markets generally or that affect a particular industry or sector. The value of an investment in the Fund's portfolio may also be more volatile than the market as a whole. This volatility may affect the Fund's net asset value per share, including by causing it to experience significant increases or declines in value over short periods of time. Events or financial circumstances affecting individual investments, industries or sectors may increase the volatility of the Fund.

**Yield Curve Risk.** This is the risk that there is an adverse shift in market interest rates of fixed income investments. The risk is associated with either flattening or steepening of the yield curve, which is a result of changing yields among comparable bonds with different maturities. If the yield curve flattens, then the yield spread between long-and short-term interest rates narrows and the price of a bond will change. If the curve steepens, then the spread between the long- and short-term interest rates increases which means long-term bond prices decrease relative to short-term bond prices.

**Performance**

The Fund is expected to commence operations on May 1, 2026, following the reorganization of the Universal Fixed Income Predecessor Fund, which is anticipated to take place as of the close of business on May 1, 2026 (the "Reorganization"). As a result of the Reorganization, the Fund has adopted the accounting and performance history of the Universal Fixed Income Predecessor Fund. Class I, Class A and Class C shares of the Universal Fixed Income Predecessor Fund will be exchanged for and renamed Institutional Class shares of the Fund.

Performance results for periods prior to May 1, 2026, reflect the performance of the Universal Fixed Income Predecessor Fund before the commencement of the Fund's operations. The bar chart and table below provide an indication of the risks of an investment in the Fund by showing changes in the performance of the Universal Fixed Income Predecessor Fund. The bar chart shows how the Universal Fixed Income Predecessor Fund's performance has varied from year to year. The table shows the Universal Fixed Income Predecessor Fund's average annual returns (before and after taxes) compared with those of the Bloomberg U.S. Aggregate Bond Index, the benchmark index selected for the Fund. The performance of any index does not reflect deductions for fees, expenses, or taxes. If the investment adviser to the Universal Fixed Income Predecessor Fund had not agreed to waive or reimburse certain Universal Fixed Income Predecessor Fund expenses during the period shown, if applicable, the Universal Fixed Income Predecessor Fund's returns would have been less than those shown. All returns reflect reinvestment of all dividend and capital gain distributions. The Universal Fixed Income Predecessor Fund's past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

**Performance Bar Chart for Calendar Years Ended December 31st:**

![](fp0097930-1_02.jpg)

**Performance Table Average Annual Total Returns**

**(For the year ended December 31, 2025)**

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| | | | |
|:---|:---|:---|:---|
| **Institutional Class Shares** | **One Year** | **Five Years** | **Ten Years** |
| Return before taxes | 6.51% | 3.13% | 2.75% |
| Return after taxes on Distributions | 4.92% | 1.41% | 1.24% |
| Return after taxes on Distributions and Sale of Fund Shares | 3.82% | 1.63% | 1.43% |
| Bloomberg U.S. Aggregate Bond Index<sup>(1)</sup><br> (reflects no deductions for fees, expenses or taxes) | 7.30% | -0.36% | 2.01% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Bloomberg U.S. Aggregate Bond Index is a broad-based flagship benchmark that services as the Fund's
regulatory benchmark to allow investors to compare the Fund's performance to a broad-based market index. The index measures the
investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate
securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency). Investors may not invest directly in an index.
Index returns are gross of any fees, brokerage commissions or other expenses of investing.

After-tax returns are shown for the Universal Fixed Income Predecessor Fund's Class I shares only (the Fund's Institutional Class Shares), and after-tax returns for Advisor Class and Investor Class shares will vary. After-tax returns were calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares of the Fund through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

**Investment Adviser.** Horizon Investments, LLC.

**Portfolio Managers.** Peter van de Zilver, David Young, Cyrille Conseil, and Cameron Baxter have responsibility for the day-to-day management of the Fund as portfolio managers. Messrs. van de Zilver, Young, Conseil, and Baxter have served as portfolio managers of the Fund, including while portfolio managers to the Universal Fixed Income Predecessor Fund, since 2013.

**Purchase and Sale of Fund Shares.** You may purchase and redeem shares of the Universal Fixed Income Fund on any day that the New York Stock Exchange is open for trading, subject to certain restrictions described under the section titled "How to Purchase Shares" and "How to Redeem Shares" of the Universal Fixed Income Fund's Prospectus. Purchases and redemptions may be made by mailing an application or redemption request to Horizon Funds c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701, or by calling 1-855-754-7932. You also may purchase and redeem shares through a financial intermediary. The minimum initial investment in the Universal Fixed Income Fund is $2,500 and the minimum subsequent investment is $250 for Advisor Class and Investor Class shares. The minimum initial investment in the Universal Fixed Income Fund is $10 million for Institutional Class shares. There is no minimum subsequent investment for Institutional Class shares.

**Tax Information.** The Universal Fixed Income Fund's distributions are taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account ("IRA"). Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.

**Payments to Broker-Dealers and Other Financial Intermediaries.** If you purchase the Universal Fixed Income Fund through a broker-dealer or other financial intermediary (such as a bank), the Universal Fixed Income Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Universal Fixed Income Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

 **ADDITIONAL INFORMATION ABOUT THE FUND'S PRINCIPAL INVESTMENT STRATEGIES** 

**Investment Objective**: The Universal Fixed Income Fund may change its investment objective without shareholder approval upon not less than 60 days' written notice to shareholders.

**Temporary Defensive Strategies:** To respond to adverse market, economic, political or other conditions, the Fund may take a defensive position and invest up to 100% of its total assets, without limitation, in high-quality short-term debt securities or money market instruments. These short-term debt securities and money market instruments may include, without limitation: shares of money market mutual funds, commercial paper, certificates of deposit, bankers' acceptances, U.S. Government securities and repurchase agreements. While the Fund is in a defensive position, the opportunity to achieve its investment objective will be limited. Furthermore, to the extent that the Fund invests in money market mutual funds for cash positions, there will be some duplication of expenses because the Fund pays its pro-rata portion of such money market funds' advisory fees and operational fees. The Fund may also invest a substantial portion of its assets in such instruments at any time to maintain liquidity or pending selection of investments in accordance with its policies.

&nbsp;&nbsp;**PRINCIPAL INVESTMENT RISKS**

As with all funds, there is the risk that you could lose money through your investment in the Fund. An investment in the Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks. The Adviser cannot guarantee that the Fund will achieve its objectives. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The Fund is not intended to be a complete investment program but rather one component of a diversified investment portfolio. Many factors affect the Fund's net asset value and performance. It is important that investors closely review and understand these risks before making an investment in the Fund. Additional information regarding the principal and certain other risks of investing in the Fund is provided below. The risks, which are described in alphabetical order and not in order of perceived importance or potential exposure, can negatively affect the Fund's performance. The Fund's SAI, which is incorporated by reference into this Prospectus, includes more information about the Fund and its investments and risks. The risks described in this Prospectus (and in the SAI) are not intended to include every potential risk of investing in the Fund. The Fund could be subject to additional risks because the types of investments it makes may change over time.

**Active Trading Risk.** A higher portfolio turnover may result in higher transactional and brokerage costs associated with the turnover which may reduce the Fund's return, unless the securities traded can be bought and sold without corresponding commission costs. Active trading of securities may also increase the Fund's realized capital gains or losses, which may affect the taxes you pay as the Fund shareholder.

**Bank Loan Risk**. The Universal Fixed Income Fund and Dynamic Fixed Income Fund's investments in secured and unsecured participations in bank loans and assignments of such loans may create substantial risk. In making investments in such loans, which are made by banks or other financial intermediaries to borrowers, a (or Underlying Funds in which the Fund invests) will depend primarily upon the creditworthiness of the borrower for payment of principal and interest. If the Fund or Underlying Fund does not receive scheduled interest or principal payments on such indebtedness, the Fund's share price could be adversely affected. The Fund and Underlying Funds may invest in loan participations that are rated by a NRSRO or are unrated and may invest in loan participations of any credit quality, including "distressed" companies with respect to which there is a substantial risk of losing the entire amount invested. In addition, certain bank loans in which the Fund or Underlying Fund may invest may be illiquid and, therefore, difficult to value and/or sell at a price that is beneficial to the Fund. In addition to the risks associated with bank loans, such investments would carry the risks associated with investment companies and exchange-traded funds, discussed below.

**Cash Positions Risk.** The Fund may hold a significant position in cash, cash equivalent securities or U.S. Treasury investments. When the Fund's investment in cash, cash equivalent securities or U.S. Treasury investment increases, the Fund may not participate in market advances or declines to the same extent that it would if the Fund were more fully invested.

**Common Stock Risk.** The stock (i.e., equity) market can be volatile, and common stocks are susceptible to general stock market fluctuations, to volatile increases and decreases in value as market confidence and perceptions of their issuers change and unexpected trading activity among retail investors. The prices of stocks can fall rapidly in response to developments affecting a specific company or industry, or to changing economic, political or market conditions.

**Collateralized Loan Obligations Risk.** The Fund are subject to certain risks as a result of their investments in CLOs. CLOs can be difficult to value, may at times be illiquid, may be highly leveraged (which could make them highly volatile), and may produce unexpected investment results due to their complex structure. In addition, CLOs involve many of the same risks of investing in debt securities and asset-backed securities including, but not limited to, interest rate risk, credit risk, liquidity risk, and valuation risk. In addition, a CLO's performance is linked to the expertise of the CLO manager and its ability to manage the CLO portfolio. The experience of a CLO manager plays an important role in the rating and risk assessment of CLO debt securities. One of the primary risks to investors of a CLO is the potential change in CLO manager, over which the Fund will have no control. A Fund may be adversely affected by new (or revised) laws or regulations that may be imposed by government regulators or self-regulatory organizations that supervise the financial markets. These agencies are empowered to promulgate a variety of rules pursuant to financial reform legislation in the United States. The Fund may also be adversely affected by changes in the enforcement or interpretation of existing statutes and rules. Changes in the regulation of CLOs may adversely affect the value of the investments held by the Fund and the ability of the Fund to execute its investment strategy. CLO debt securities are limited recourse obligations of their issuers. CLO debt is payable solely from the proceeds of its underlying assets. Consequently, CLO investors must rely solely on distributions from the underlying assets for payments on the CLO debt they hold. No party or entity other than the issuer will be obligated to make payments on CLO debt. CLO debt is not guaranteed by the issuer or any other party or entity involved in the organization and management of a CLO. If income from the underlying loans is insufficient to make payments on the CLO debt, no other assets will be available for payment. CLO debt securities may be subject to redemption. For example, certain tranches of CLO debt may be redeemed if the CLO manager is unable to identify assets suitable for investment during the period when it has the ability to reinvest the principal proceeds from the sale of assets, scheduled redemptions and prepayments in additional assets (the "Reinvestment Period"). Additionally, holders of subordinated CLO debt may cause the redemption of senior CLO debt. In the event of an early redemption, holders of the CLO debt being redeemed will be repaid earlier than the stated maturity of the debt. The timing of redemptions may adversely affect the returns on CLO debt. The CLO manager may not find suitable assets in which to invest during the Reinvestment Period or to replace assets that the manager has determined are no longer suitable for investment (for example, if a security has been downgraded by a rating agency). Additionally, the Reinvestment Period is a pre-determined finite period of time; however, there is a risk that the Reinvestment Period may terminate early if, for example, the CLO defaults on payments on the securities which it issues or if the CLO manager determines that it can no longer reinvest in underlying assets. Early termination of the Reinvestment Period could adversely affect a CLO investment.

**Convertible Securities Risk.** Convertible securities include fixed income securities that may be exchanged or converted into a predetermined number of the issuer's common stock at the option of the holder during a specified period. The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change based on changes in the issuer's credit rating or the market's perception of the issuer's creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock. Convertible securities subject the Fund to the risks associated with both fixed-income securities and equity securities. If a convertible security's investment value is greater than its conversion value, its price will likely increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying equity security.

**Counterparty Credit Risk / Counterparty Risk.** The stability and liquidity of many derivatives transactions, including repurchase agreements, forwards and over-the-counter derivative transactions depend in large part on the creditworthiness of the parties to the transactions. These contracts also involve exposure to credit risk, since contract performance depends in part on the financial condition of the counterparty. If a counterparty to such a transaction defaults, exercising contractual rights may involve delays or costs for the Fund. Furthermore, there is a risk that a counterparty could become the subject of insolvency proceedings and that the recovery of securities and other assets from such counterparty will be delayed or be of a value less than the value of the securities or assets originally entrusted to such counterparty. If a privately negotiated over-the-counter contract calls for payments by the Fund, the Fund must be prepared to make such payments when due. In addition, if a counterparty's creditworthiness declines, the Fund may not receive payments owed under the contract, or such payments may be delayed under such circumstances and the value of agreements with such counterparty can be expected to decline, potentially resulting in losses to the Fund. The Adviser considers factors such as counterparty credit ratings and financial statements among others when determining whether a counterparty is creditworthy. In addition, the Fund may enter into derivatives that involve a limited number of counterparties, which may increase the Fund's exposure to counterparty risk.

Transactions in certain types of derivatives are also required to be centrally cleared ("cleared derivatives"). In a transaction involving cleared derivatives, the Fund's counterparty is a clearing house, rather than a bank or broker. Since the Fund is not a member of clearing houses and only members of a clearing house ("clearing members") can participate directly in the clearing house, the Fund will hold cleared derivatives through accounts at clearing members. In cleared derivatives positions, the Fund will make payments (including margin payments) to and receive payments from a clearing house through their accounts at clearing members. Clearing members guarantee performance of their clients' obligations to the clearing house. In contrast to bilateral derivatives transactions, following a period of advance notice to the Fund, clearing members generally can require termination of existing cleared derivatives transactions at any time and increases in margin above the margin that it required at the beginning of a transaction. Clearing houses also have broad rights to increase margin requirements for existing transactions and to terminate transactions. Any such increase or termination could interfere with the ability of the Fund to pursue its investment strategy. Also, the Fund is subject to execution risk if it enters into a derivatives transaction that is required to be cleared (or that the Adviser expects to be cleared), and no clearing member is willing or able to clear the transaction on the Fund's behalf. While the documentation in place between the Fund and its clearing members generally provides that the clearing members will accept for clearing all transactions submitted for clearing that are within credit limits specified by the clearing members in advance, the Fund could be subject to this execution risk if the Fund submits for clearing transactions that exceed such credit limits, if the clearing house does not accept the transactions for clearing, or if the clearing members do not comply with their agreement to clear such transactions. In that case, the transaction might have to be terminated, and the Fund could lose some or all of the benefit of any increase in the value of the transaction after the time of the transaction. In addition, new regulations could, among other things, restrict the Fund's ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund or increasing margin or capital requirements. If the Fund cannot enter into a particular derivatives transaction, the Fund's investment performance and risk profile could be adversely affected as a result.

In addition, the Fund may use counterparties located in jurisdictions outside the United States. Such local counterparties are subject to the laws and regulations in non-U.S. jurisdictions that are designed to protect their customers in the event of their insolvency. However, the practical effect of these laws and their application to the Fund's assets are subject to substantial limitations and uncertainties. Because of the large number of entities and jurisdictions involved and the range of possible factual scenarios involving the insolvency of a counterparty, it is impossible to generalize about the effect of their insolvency on the Fund and its assets. Shareholders should assume that the insolvency of any counterparty would result in a loss to the Fund, which could be material.

**Credit Risk.** The risk that issuers or guarantors of a fixed income security cannot or will not make payments on the securities and other investments held by the Fund or an Underlying Fund may result in losses to the Fund. In addition, the credit quality of fixed income securities held by the Fund may be lowered if an issuer's financial condition changes, which may lower their value and may affect their liquidity. Generally, the lower the credit rating of a security, the greater the risk that the issuer of the security will default on its obligation. High quality securities are generally believed to have relatively low degrees of credit risk. The Fund intends to enter into financial transactions with counterparties that are creditworthy at the time of the transactions. There is always the risk that the Adviser's analysis of creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will be more susceptible to the risks associated with one or more counterparties.

**Credit Spread Risk.** The risk that credit spreads (or the difference in yield between securities that is due to differences in their credit quality) may increase when the market expects lower-grade bonds to default more frequently. Widening credit spreads may quickly reduce the market values of lower-rated securities.

**Currency Risk.** The risk that foreign (non-U.S.) currencies will decline in value relative to the U.S. dollar and adversely affect the value of the Fund's or an Underlying Fund's investments in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies. Currency risk may be particularly high to the extent that the Fund invests in foreign (non-U.S.) currencies or engages in foreign (non-U.S.) currency transactions that are economically tied to emerging market countries.

**Cybersecurity Risk.** There is risk to the Fund of an unauthorized breach and access to fund assets, customer data (including private shareholder information), or proprietary information, or the risk of an incident occurring that causes the Fund or its Service Providers to suffer data breaches, data corruption or lose operational functionality. Successful cyber-attacks or other cyber-failures or events affecting the Fund, or its Service Providers may adversely impact the Fund or its shareholders. Because information technology ("IT") systems and digital data underlie most of the Fund's operations, the Fund and its Service Providers are exposed to the risk that their operations and data may be compromised as a result of internal and external cyber-failures, breaches or attacks ("Cyber Risk"). This could occur as a result of malicious or criminal cyber-attacks. Cyber-attacks include actions taken to: (i) steal or corrupt data maintained online or digitally, (ii) gain unauthorized access to or release confidential information, (iii) shut down the Fund or Service Provider website through denial-of-service attacks, or (iv) otherwise disrupt normal business operations. Events arising from human error, faulty or inadequately implemented policies and procedures or other systems failures unrelated to any external cyber-threat may have effects similar to those caused by deliberate cyber-attacks.

**Derivatives Risk.** The Fund or underlying funds may invest in derivatives, which are financial instruments whose value is typically based on the value of a security, index or other instrument. These instruments include futures, options, repurchase agreements and other similar instruments. Derivative instruments may be more volatile than other instruments and may be subject to unanticipated market movements, which are potentially unlimited. Derivatives may also include customized baskets or options (which may incorporate other securities directly and also various derivatives including common stock, options, and futures) structured as agreed upon by a counterparty, as well as specially structured types of mortgage- and asset-backed securities whose value is often linked to commercial and residential mortgage portfolios. The Fund's use of derivative instruments involves risks different from, and possibly greater than, the risks associated with investing directly in securities and other more traditional investments, and certain derivatives may create a risk of loss greater than the amount invested.

Investing for hedging purposes or to increase the Fund's return may result in certain additional transaction costs that may reduce the Fund's performance. When used for hedging purposes, no assurance can be given that each derivative position will achieve a perfect correlation with the investment against which it is being hedged. Because the markets for certain derivative instruments are relatively new, suitable derivatives transactions may not be available in all circumstances for risk management or other purposes and there can be no assurance that a particular derivative position will be available when sought by the Adviser or that such techniques will be utilized by the Adviser.

Derivative prices are highly volatile and may fluctuate substantially during a short period of time. Such prices are influenced by numerous factors that affect the markets, including, but not limited to: changing supply and demand relationships; government programs and policies; national and international political and economic events, changes in interest rates, inflation and deflation and changes in supply and demand relationships. The market value of derivative instruments and securities may be more volatile than that of other instruments, and each type of derivative instrument may have its own special risks, including the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates, and indices. Many derivatives, in particular privately negotiated derivatives, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the Fund. The value of derivatives may not correlate perfectly, or at all, with the value of the assets, reference rates or indices they are designed to closely track.

Derivatives are subject to a number of other risks, including liquidity risk (the possibility that the derivative may be difficult to purchase or sell and the Adviser may be unable to initiate a transaction or liquidate a position at an advantageous time or price), leverage risk (the possibility that adverse changes in the value or level of the underlying asset, reference rate or index can result in loss of an amount substantially greater than the amount invested in the derivative), interest rate risk (some derivatives are more sensitive to interest rate changes and market price fluctuations), and counterparty risk (the risk that a counterparty may be unable to perform according to a contract, and that any deterioration in a counterparty's creditworthiness could adversely affect the instrument). In addition, because derivative products are highly specialized, investment techniques and risk analyses employed with respect to investments in derivatives are different from those associated with stocks and bonds. Finally, the Fund's use of derivatives may cause the Fund to realize higher amounts of short-term capital gains (generally taxed at ordinary income tax rates) than if the Fund had not used such instruments.

Derivative instruments are also subject to the risk that the market value of an instrument will change to the detriment of the Fund. If the Adviser inaccurately forecast the values of securities, currencies or interest rates or other economic factors in using derivatives, the Fund might have been in a better position if it had not entered into the transaction at all. Some strategies involving derivative instruments can reduce the risk of loss, but they can also reduce the opportunity for gain or result in losses by offsetting favorable price movements in other investments held by the Fund. New derivatives regulations require the Fund, to the extent it uses derivatives to a material extent, to, among other things, comply with certain overall limits on leverage. These regulations may limit the ability of the Fund to pursue its investment strategies and may not be effective to mitigate the Fund's risk of loss from derivatives. The Fund may also have to buy or sell a security at a disadvantageous time or price because regulations require funds to maintain offsetting positions or asset coverage in connection with certain derivatives transactions.

The Fund may also purchase or write (sell) credit default swap indexes ("CDX"), which are credit derivatives used to hedge credit risk and/or take a position on a basket of credit entities. Unlike a credit default swap, which is an over-the-counter derivative, a CDX may be exchange-traded, or sold over the counter. Each CDX is designed to track a basket of credit entities, which may be standard or customized. This means that it may be more liquid than a credit default swap, and it may be cheaper to hedge the Fund's portfolio with a CDX than it would be to buy many single name credit default swaps to achieve a similar effect.

The Fund may also invest in inverse ETFs to hedge its long positions. The Fund may also use derivative transactions to create investment leverage. For example, the Fund may use CDX to take indirect long or short positions on equity or fixed income indices, equity or fixed income securities, or currencies.

Trading derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities.

**Duration Risk.** Longer-term securities may be more sensitive to interest rate changes. Given the recent increases to the historically low interest rates and the potential for further increases in those rates, a heightened risk is posed by rising interest rates to longer-term fixed income securities. Effective duration estimates price changes for relatively small changes in rates. If rates rise significantly, effective duration may tend to understate the drop in a security's price. If rates drop significantly, effective duration may tend to overstate the rise in a security's price.

**Energy Sector Risk.** The Fund or an Underlying Fund may invest in the energy sector, which is comprised of energy, industrial, consumer, infrastructure and logistics companies, and will therefore be susceptible to adverse economic, environmental, business, regulatory or other occurrences affecting that sector. The energy sector has historically experienced substantial price volatility. At times, the performance of these investments may lag the performance of other sectors or the market as a whole. Companies operating in the energy sector are subject to specific risks, including, among others, fluctuations in commodity prices; reduced consumer demand for commodities such as oil, natural gas or petroleum products; reduced availability of natural gas or other commodities for transporting, processing, storing or delivering; slowdowns in new construction; extreme weather or other natural disasters; and threats of attack by terrorists on energy assets. Additionally, energy sector companies are subject to substantial government regulation and changes in the regulatory environment for energy companies may adversely impact their profitability. Over time, depletion of natural gas reserves and other energy reserves may also affect the profitability of energy companies. The energy markets have experienced significant volatility in recent periods, including a historic drop in crude oil and natural gas prices in April 2020 attributable to the significant decrease in demand for oil and other energy commodities as a result of the slowdown in economic activity due to the COVID-19 pandemic as well as price competition among key oil-producing countries. The low price environment caused financial hardship for energy companies and has led to, and may continue to lead to, energy companies defaulting on debt and filing for bankruptcy. The energy markets may continue to experience stress and relatively high volatility for a prolonged period. Future pandemics could lead to reduced production and price volatility.

**Fixed Income Securities Risk.** Fixed income securities held by the Fund are subject to interest rate risk, call risk, prepayment and extension risk, credit risk, duration risk and liquidity risk, which are more fully described below. In addition, current market conditions may pose heightened risks for fixed income securities. After being at or near historic lows in recent years, interest rates have begun to rise. Increases in interest rates could result in less liquidity and greater volatility of fixed income securities. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. A general rise in interest rates has the potential to cause investors to move out of fixed income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund's performance. When the Fund invests in fixed income securities or derivatives, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities or derivatives owned by the Fund. In general, the market price of fixed income securities with longer maturities or durations will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment by the Fund, possibly causing the Fund's share price and total return to be reduced and fluctuate more than other types of investments. Moreover, new regulations applicable to and changing business practices of financial intermediaries that make markets in fixed income securities have resulted in less market making activity for certain fixed income securities, which may reduce the liquidity and may increase the volatility for such fixed income securities. The fixed-income securities market can be susceptible to increases in volatility and decreases in liquidity. Liquidity may decline unpredictably in response to overall economic conditions or credit tightening. Duration risk arises when holding long duration and long maturity investments, which will magnify certain risks, including interest rate risk and credit risk. Longer-term securities may be more sensitive to interest rate changes. Effective duration estimates price changes for relatively small changes in rates. If rates rise significantly, effective duration may tend to understate the drop in a security's price. If rates drop significantly, effective duration may tend to overstate the rise in a security's price.

**Fluctuation of Net Asset Value Risk.** The NAV of the Fund's shares will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of the shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of and demand for the shares on the Exchange. The Adviser cannot predict whether the shares will trade below, at or above their NAV. Price differences may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for the shares will be closely related to, but not identical to, the same forces influencing the prices of the Fund's holdings trading individually or in the aggregate at any point in time. Actively managed ETFs have a limited trading history and, therefore, there can be no assurance as to whether and/or the extent to which the Shares will trade at premiums or discounts to NAV.

**Foreign (Non-U.S.) Investment Risk / Foreign Exposure Risk**. Foreign securities include direct investments in non-U.S. dollar-denominated securities traded primarily outside of the United States and dollar-denominated securities of foreign issuers. Foreign securities also include indirect investments such as American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs"). The Fund will invest in foreign securities as a principal strategy. ADRs are U.S. dollar-denominated receipts representing shares of foreign-based corporations. ADRs are receipts that are traded in the United States, and entitle the holder to all dividend and capital gain distributions that are paid out on the underlying foreign shares. EDRs and GDRs are receipts that often trade on foreign exchanges. They represent ownership in an underlying foreign or U.S. security and generally are denominated in a foreign currency. Foreign government obligations may include debt obligations of supranational entities, including international organizations (such as The International Bank for Reconstruction and Development, also known as the World Bank) and international banking institutions and related government agencies.

Foreign securities involve special risks and costs, which are considered by the Adviser in evaluating the creditworthiness of issuers and making investment decisions for the Fund. Foreign securities fluctuate in price because of political, financial, social and economic events in foreign countries (including, for example, military confrontations, war and terrorism). A foreign security could also lose value because of more or less stringent foreign securities regulations and less stringent accounting and disclosure standards. In addition, foreign markets may have greater volatility than domestic markets and foreign securities may be less liquid and harder to value than domestic securities.

Foreign securities, and in particular foreign debt securities, are sensitive to changes in interest rates. In addition, investment in the securities of foreign governments involves the risk that foreign governments may default on their obligations or may otherwise not respect the integrity of their obligations. The performance of investments in securities denominated in a foreign currency also will depend, in part, on the strength of the foreign currency against the U.S. dollar and the interest rate environment in the country issuing the currency. Absent other events which otherwise could affect the value of a foreign security (such as a change in the political climate or an issuer's credit quality), appreciation in the value of the foreign currency generally results in an increase in value of a foreign currency-denominated security in terms of U.S. dollars. A decline in the value of the foreign currency relative to the U.S. dollar generally results in a decrease in value of a foreign currency-denominated security. Additionally, many countries throughout the world are dependent on a healthy U.S. economy and are adversely affected when the U.S. economy weakens or its markets decline.

Investment in foreign securities may involve higher costs than investment in U.S. securities, including higher transaction and custody costs as well as the imposition of additional taxes by foreign governments. Foreign investments also may involve risks associated with the level of currency exchange rates, less complete financial information about the issuers, less market liquidity, more market volatility and political instability. Future political and economic developments, the possible imposition of withholding taxes on dividend income, the possible seizure or nationalization of foreign holdings, the possible establishment of exchange controls or freezes on the convertibility of currency, trade restrictions (including tariffs) or the adoption of other governmental restrictions might adversely affect an investment in foreign securities. Additionally, foreign banks and foreign branches of domestic banks may be subject to less stringent reserve requirements and to different accounting, auditing and recordkeeping requirements.

While the Fund's or an Underlying Fund's investments may, if permitted, be denominated in foreign currencies, the portfolio securities and other assets held by the Fund or Underlying Funds are valued in U.S. dollars. Price fluctuations may occur in the dollar value of foreign securities because of changing currency exchange rates or, in the case of hedged positions, because the U.S. dollar declines in value relative to the currency hedged. Currency exchange rates may fluctuate significantly over short periods of time causing the Fund's or Underlying Fund's NAV to fluctuate as well. Currency exchange rates can be affected unpredictably by the intervention or the failure to intervene by U.S. or foreign governments or central banks, or by currency controls or political developments in the United States or abroad. To the extent that the Fund or an Underlying Fund is invested in foreign securities while also maintaining currency positions, it may be exposed to greater combined risk. The net currency positions of the Fund or Underlying Funds may expose them to risks independent of their securities positions.

The Fund or Underlying Funds may operate in euros and/or may hold euros and/or euro-denominated bonds and other obligations. The euro requires participation of multiple sovereign states forming the Euro zone and is therefore sensitive to the credit and general economic and political positions of each such state, including, each state's actual and intended ongoing engagement with and/or support for the other sovereign states then forming the European Union ("EU"), in particular those within the Euro zone. Changes in these factors might materially and adversely impact the value of securities in which the Fund or the Underlying Fund has invested.

The departure of the United Kingdom ("UK") from the EU (commonly referred to as "Brexit") could have a lasting impact on the currency volatility and economic growth in Europe among other political, regulatory, economic and market outcomes that cannot be predicted. Securities issued by companies domiciled in the UK could be subject to changing regulatory and tax regimes. Banking and financial services companies that operate in the UK or EU could be disproportionately impacted by these actions. Further insecurity in EU membership, or the abandonment of the euro, could exacerbate market and currency volatility and negatively impact the Fund's investments in securities issued by companies located in EU countries. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching.

A number of countries in the Middle East and Europe have suffered terror attacks, and additional attacks may occur in the future. Eastern Europe and the Middle East have experienced ongoing military conflict; this conflict may expand and military attacks could occur. Europe has also been struggling with mass migration from the Middle East and Africa. European elections could, depending on the outcomes, further call into question the future direction of the EU. The ultimate effects of these events and other socio-political or geopolitical issues are not known but could profoundly affect global economies and markets. Whether or not the Fund or an Underlying Fund invests in securities of issuers located in Europe or with significant exposure to European issuers or countries, these events could negatively affect the value and liquidity of the Fund's investments.

Investment exposure to China subjects the Fund to specific risks. China may be subject to considerable degrees of economic, political and social instability. It is a developing market and demonstrates significantly higher volatility from time to time in comparison to developed markets. Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information, and/or political and social instability. Internal social unrest or confrontations with other neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency convertibility, interest rate fluctuations and higher rates of inflation. Export growth continues to be a major driver of China's rapid economic growth. Reduction in spending on Chinese products and services, institution of tariffs or other trade barriers, or a downturn in any of the economies of China's key trading partners may have an adverse impact on its economy.

In addition, there has been enhanced regulatory focus in the U.S. on access to audit and other information regarding Chinese companies. In November 2020, an executive order was issued prohibiting investments in certain Chinese companies that might be owned or controlled by the military, resulting in NASDAQ removing shares of certain companies from its indexes and the NYSE delisting certain companies. In December 2020, the Holding Foreign Companies Accountable Act ("HFCAA") was signed into law, requiring the SEC to ban trading on all U.S. exchanges of any foreign company for which the Public Company Accounting Oversight Board ("PCAOB") is unable to inspect audit workpapers for three consecutive years, which is a particular threat to Chinese companies as PCAOB inspection of the audit work of foreign accounting firms conflicts with Chinese law and policy. The enactment of the HFCAA and other efforts to increase U.S. regulatory access to audit workpapers could cause investor uncertainty, and the market price of any Chinese securities held by the Fund could be adversely affected. In addition, PCAOB's inability to evaluate the audits and quality control procedures of auditors deprive investors of the transparency and protections provided by such evaluations and may subject such investors to a heightened risk of fraud. The composition of an emerging market index generally will not weigh individual securities by investor protection considerations. Therefore, to the extent the Fund tracks an emerging market index, it could invest in companies that lack transparency and other investor protections.

In addition, Russia's recent military incursions in Ukraine have led to sanctions being levied against Russia by the United States, EU and other countries, which could adversely affect European and global energy and financial markets, as well as commodity prices, supply chains and global trade. This and future geopolitical tensions could have an outsized impact on the Fund's investments due to its exposure to frontier markets, commodities, and/or energy.

**Forward and Futures Contract Risk / Futures Contract Risk.** The successful use of forward and futures contracts draws upon the Adviser's or Sub-Adviser's skill and experience with respect to such instruments and is subject to special risk considerations. The primary risks associated with the use of forward and futures contracts, which may adversely affect the Fund's NAV and total return, are (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the forward or futures contract; (b) possible lack of a liquid secondary market for a forward or futures contract and the resulting inability to close a forward or futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the Adviser's or Sub-Adviser's inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; (e) the possibility that the counterparty will default in the performance of its obligations; and (f) if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, or to meet margin increases required as a result of market conditions or periods of high volatility, and the Fund may have to sell securities at a time when it may be disadvantageous to do so. The Fund could be unable to recover assets held at the futures clearing broker, even assets directly traceable to the Fund from the futures clearing broker in the event of a bankruptcy of the broker. A futures clearing broker is required to segregate customer funds pursuant to the Commodities Exchange Act and the regulations of the U.S. Commodity Futures Trading Commission ("CFTC"). However, in the unlikely event of the broker's bankruptcy, there is no equivalent of the Securities Investors Protection Corporation insurance as is applicable in the case of securities broker dealers' bankruptcies.

**Gap Risk.** The Fund is subject to the risk that a stock price or derivative value will change dramatically from one level to another with no trading in between and/or before the Fund can exit the investment. Usually such movements occur when there are adverse news announcements, which can cause a stock price or derivative value to drop substantially from the previous day's closing price. For example, the price of a stock can drop from its closing price one night to its opening price the next morning. The difference between the two prices is the gap. Trading halts may lead to gap risk.

**Hedging Transactions Risk.** The Adviser may employ various hedging techniques. The success of the Fund's hedging strategy will be subject to the Adviser's ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged. Since the characteristics of many securities change as markets change or time passes, the success of the Fund's hedging strategy will also be subject to the Adviser's ability to continually recalculate, readjust, and execute hedges in an efficient and timely manner. Investing for hedging purposes or to increase the Fund's return may result in certain additional transaction costs.

Hedging against a decline in the value of a portfolio position does not eliminate fluctuations in the values of those portfolio positions or prevent losses if the values of those positions decline. Rather, it establishes other positions designed to gain from those same declines, thus seeking to moderate the decline in the portfolio position's value. Such hedging transactions also limit the opportunity for gain if the value of the portfolio position should increase. For a variety of reasons, the Adviser may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to risk of loss. In addition, it is not possible to hedge fully or perfectly against any risk, and hedging entails its own costs. The Adviser may determine, in its sole discretion, not to hedge against certain risks and certain risks may exist that cannot be hedged. Furthermore, the Adviser may not anticipate a particular risk so as to hedge against it effectively. Hedging transactions also limit the opportunity for gain if the value of a hedged portfolio position should increase.

**High Yield Risk.** Investment in or exposure to high yield (lower rated) debt instruments (also known as "junk bonds") may involve greater levels of interest rate, credit, liquidity and valuation risk than for higher rated instruments. High yield debt instruments are considered predominantly speculative and are higher risk than investment grade instruments with respect to the issuer's continuing ability to make principal and interest payments and, therefore, such instruments generally involve greater risk of default or price changes than higher rated debt instruments. An economic downturn or period of rising interest rates could adversely affect the value of these securities and market for these securities and reduce market liquidity (liquidity risk). Less active markets can diminish the Fund's ability to obtain accurate market quotations when valuing portfolio securities and thereby give rise to valuation risk. If the issuer of a security is in default with respect to interest or principal payments, the issuer's security could lose its entire value. Furthermore, the transaction costs associated with the purchase and sale of high yield debt instruments may vary greatly depending on a number of factors and may adversely affect the Fund's performance.

**Index Risk.** If a derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.

**Investment Companies/Exchange-Traded Funds Risk.** When the Fund invests in other investment companies (including closed-end funds and ETFs) it will bear additional expenses based on its pro rata share of the other investment company's or ETF's operating expenses, including management fees of unaffiliated funds, in addition to those paid by the Fund. The risk of owning shares of an investment company generally reflects the risks of owning the underlying investments held by the investment company. The Fund also may incur brokerage costs when it purchases and sells shares of investment companies. In addition, the market value of closed-end fund or ETF shares may differ from their NAV. This difference in price may be due to the fact that the supply and demand in the market for fund shares at any point in time is not always identical to the supply and demand in the market for the underlying investments. Accordingly, there may be times when closed-end fund or ETF shares trade at a premium or discount to NAV. The Fund may invest in inverse ETFs, which may result in increased volatility and will magnify the Fund's losses or gains. During periods of market volatility, inverse ETFs may not perform as expected.

**Money Market Fund Risk.** The Fund may invest in money market mutual funds. An investment in a money market mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds that invest in U.S. government securities seek to preserve the value of the Fund's investment at $1.00 per share, it is possible to lose money by investing in a stable NAV money market mutual fund. Moreover, SEC rules require prime money market mutual funds to use floating NAVs that do not preserve the value of the Fund's investment at $1.00 per share. These rule amendments may impact the Fund's use of prime money market mutual funds for capital preservation purposes.

**Issuer-Specific Risk.** The value of a specific security or option can be more volatile than the market as a whole and may perform worse than the market as a whole. The value of large cap securities, as represented by the S&P 500 Index, can be more volatile than smaller cap securities due to differing market reactions to adverse issuer, political, regulatory, market, or economic developments.

**Large-Cap Securities Risk**. The securities of large capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities, such as changes in technology and consumer tastes. Large market capitalization companies may be unable to attain or maintain the high growth rate of successful smaller companies, especially during extended periods of economic expansion.

**Leveraging Risk**. To the extent the Fund uses leveraging techniques, its net asset value may be more volatile because leverage tends to exaggerate the effect of changes in interest rates and any increase or decrease in the value of the Fund's investments. Leverage risk is created when an investment exposes the Fund to a level of risk that exceeds the amount invested. The use of certain derivatives may increase leveraging risk and adverse changes in the value or level of the underlying asset, rate, or index may result in a loss substantially greater than the amount paid for the derivative. The use of leverage may exaggerate any increase or decrease in the net asset value, causing the Fund to be more volatile and small changes in the value of the underlying instrument may produce disproportionate losses to the Fund. The use of leverage may increase expenses and increase the impact of the Fund's other risks. Certain derivatives require the Fund to make margin payments, a form of security deposit intended to protect against nonperformance of the derivative contract. The Fund may have to post additional margin if the value of the derivative position changes in a manner adverse to the Fund. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so in order to comply with limits on leverage imposed by the 1940 Act, to satisfy its obligations, to meet additional margin or collateral or regulatory requirements or to meet redemption requests resulting in increased volatility of returns. Leverage, including borrowing, may cause the Fund to be more volatile than if the Fund had not been leveraged.

**Liquidity Risk.** There is risk that the Fund may not be able to liquidate its holdings because of unusual market conditions, an unusually high volume of redemption requests, legal restrictions impairing its ability to sell particular securities or close derivative positions at an advantageous market price or other reasons. Certain portfolio securities may be less liquid than others, which may make them difficult or impossible to sell at the time and the price that the Fund would like. The Fund may have to lower the price, sell other securities instead or forgo an investment opportunity. In addition, less liquid securities may be more difficult to value and markets may become less liquid when there are fewer interested buyers or sellers or when dealers are unwilling or unable to make a market for certain securities. Recently, dealers have generally been less willing to make markets for fixed income securities. Any of these events could have a negative effect on fund management or performance. Funds with principal investment strategies that involve investments in securities of companies with smaller market capitalizations, foreign securities, Rule 144A securities, derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risk. Liquidity risk may be magnified in an environment of rising interest rates or widening credit spreads in which investor redemptions from fixed income mutual funds may be higher than normal. In the past, in stressed markets, certain types of securities suffered periods of illiquidity if disfavored by the market. All of these risks may increase during periods of market turmoil, such as that experienced in 2020 with COVID-19 and could have a negative effect on the Fund's performance. Illiquidity may result from the absence of an established market for investments as well as legal, contractual or other restrictions.

**Management Risk.** The Fund's investment strategies may not result in an increase in the value of your investment in the Fund or in overall performance equal to other similar investment vehicles having similar investment strategies to those of the Fund. The net asset value of the Fund changes daily based on the performance of the securities and derivatives in which it invests. The Fund's portfolio managers use qualitative analyses and/or models. Any imperfections or limitations in such analyses or models could affect the ability of the portfolio managers to implement strategies. Management risk includes the risk that the quantitative model used by the Fund's Adviser may not perform as expected, particularly in volatile markets. The Sub-Adviser's judgments about the attractiveness, value and potential appreciation of particular securities and derivatives in which the Fund invests may prove to be incorrect and may not produce the desired results. Additionally, the Adviser or Sub-Adviser may have conflicts of interest that could interfere with its management of the Fund's portfolio. For example, the Adviser, Sub-Adviser or their affiliates may manage other investment funds or have other clients that may be similar to, or overlap with, the investment objective and strategy of the Fund, creating potential conflicts of interest when making decisions regarding which investments may be appropriate for the Fund and other clients. Further information regarding conflicts of interest is available in the SAI.

**Market Capitalization Risk.** The Fund's anticipated weighting towards larger-sized companies subjects the Fund to the risk that larger companies may not be able to attain the high growth rates of successful smaller companies, especially during strong economic periods, and that they may be less capable of responding quickly to competitive challenges and industry changes. Because the Fund may invest in medium capitalization companies, its share price could be more volatile than the Fund that invests only in large companies. Medium-sized companies typically have less experienced management, narrower product lines, more limited financial resources, and less publicly available information than larger companies. The earnings and prospects of medium sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. Medium sized companies normally have a lower trading volume than larger companies, which may tend to make their market price fall more disproportionately than larger companies in response to selling pressures.

**Market Events Risk.** There has been increased volatility, depressed valuations, decreased liquidity and heightened uncertainty in the financial markets during the past several years, including what was experienced in 2020. These conditions are an inevitable part of investing in capital markets and may continue, recur, worsen or spread. The U.S. government and the Federal Reserve, as well as certain foreign governments and central banks, have taken steps to support financial markets, including by lowering interest rates to historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. When the U.S. government and the Federal Reserve reduce market support activities, including increasing interest rates, such reductions, could negatively affect financial markets generally, increase market volatility and reduce the value and liquidity of securities in which the Fund invests. Policy and legislative changes in the United States and in other countries may also contribute to decreased liquidity and increased volatility in the financial markets. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time.

COVID-19 resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, business and school closings, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems.

**Market Risk.** Overall market risk may affect the value of individual instruments in which the Fund invests. The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors such as domestic and foreign (non-U.S.) economic growth and market conditions, real or perceived adverse economic or political conditions, military conflict, acts of terrorism, social unrest, natural disasters, recessions, inflation, changes in interest rate levels, supply chain disruptions, sanctions, tariffs, the spread of infectious illness or other public health threats, lack of liquidity in the bond and other markets, volatility in the securities markets, adverse investor sentiment and political events affect the securities markets. U.S. and foreign stock markets have experienced periods of substantial price volatility in the past and may do so again in the future. Securities markets also may experience long periods of decline in value. A change in financial condition or other event affecting a single issuer or market may adversely impact securities markets as a whole. The value of assets or income from an investment may be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Fund's assets can decline as can the value of the Fund's distributions. When the value of the Fund's investments goes down, your investment in the Fund decreases in value and you could lose money.

Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. Different sectors of the market and different security types may react differently to such developments. Changes in value may be temporary or may last for extended periods. The Fund may experience a substantial or complete loss on any individual security. Even when securities markets perform well, there is no assurance that the investments held by the Fund will increase in value along with the broader market. Market factors, such as the demand for particular portfolio securities, may cause the price of certain portfolio securities to fall while the prices of other securities rise or remain unchanged.

Local, state, regional, national or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments and could result in decreases to the Fund's net asset value. Political, geopolitical, natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures, natural and environmental disasters, epidemics, pandemics and other public health crises and related events and governments' reactions to such events have led, and in the future may lead, to economic uncertainty, decreased economic activity, increased market volatility and other disruptive effects on U.S. and global economies and markets. Such events may have significant adverse direct or indirect effects on the Fund and its investments. For example, a widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, impact the ability to complete redemptions, and affect Fund performance. A health crisis may exacerbate other pre-existing political, social and economic risks. In addition, the increasing interconnectedness of markets around the world may result in many markets being affected by events or conditions in a single country or region or events affecting a single or small number of issuers.

Political turmoil within the U.S. and abroad may also impact the Fund. Although the U.S. government has honored its credit obligations, it remains possible that the U.S. could default on its obligations. While it is impossible to predict the consequences of such an unprecedented event, it is likely that a default by the U.S. would be highly disruptive to the U.S. and global securities markets and could significantly impair the value of the Fund's investments. Similarly, political events within the U.S. at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S. economy, decrease the value of the Fund's investments, and increase uncertainty in or impair the operation of the U.S. or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or threatened to impose significant import tariffs. These actions could lead to price volatility and overall declines in U.S. and global investment markets. The current contentious domestic political environment, as well as political and diplomatic events within the U.S. and abroad, such as presidential elections in the U.S. or abroad may adversely affect the U.S. regulatory landscape, the general market environment and/or investor sentiment, which could have an adverse impact on the Fund's investments and operations.

**MLP Risk.** An investment in MLP units involves certain risks which differ from an investment in the securities of a corporation. Holders of MLP units have limited control and voting rights on matters affecting the partnership. In addition, there are certain tax risks associated with an investment in MLP units and conflicts of interest exist between common unit holders of MLPs and the general partner, including those arising from incentive distribution payments. Additional risks of MLPs include the following: a decrease in the production of natural gas, natural gas liquids, crude oil, coal or other energy commodities; or a decrease in the volume of such commodities available for transportation, mining, processing, storage or distribution, which may adversely impact the financial performance of MLPs or MLP-related securities. To maintain or grow their revenues, these companies need to maintain or expand their reserves through exploration of new sources of supply, through the development of existing sources, through acquisitions, or through long-term contracts to acquire reserves. The financial performance of MLPs may be adversely affected if an MLP, or the companies to whom it provides the service, are unable to cost-effectively acquire additional reserves sufficient to replace the natural decline. Various governmental authorities have the power to enforce compliance with regulations and the permits issued under them, and violators are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the future which would likely increase compliance costs and may adversely affect the financial performance of MLPs. Volatility of commodity prices, which may lead to a reduction in production or supply, may also negatively impact the performance of MLPs. MLPs are also subject to risks that are specific to the industry they serve. MLPs that provide crude oil, refined product, natural gas liquids and natural gas services are subject to supply and demand fluctuations in the markets they serve which will be impacted by a wide range of factors, including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, and economic conditions, among others. As a partnership, an MLP has no tax liability at the entity level if it receives at least 90% of its income from qualifying sources such as interest, dividends, real estate rents, gain from the sale or disposition of real property, income and gain from certain mineral or natural resources activities, income and gain from the transportation or storage of certain fuels, and, in certain circumstances, income and gain from commodities or futures, forwards and options with respect to commodities, and gain from the sale or other disposition of a capital asset held for the production of such income. If, as a result of a change in current law or a change in an MLP's business, an MLP were treated as a corporation for federal income tax purposes, such an MLP would be obligated to pay federal income tax on its income at the corporate tax rate. If an MLP were classified as a corporation for federal income tax purposes, the amount of cash available for distribution by the MLP would be reduced. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs. The amount of cash that any MLP has available to pay its unit holders in the form of distributions/dividends depends on the amount of cash flow generated from such company's operations. Cash flow from operations will vary from quarter to quarter and is largely dependent on factors affecting the MLP's operations and factors affecting the energy, natural resources or real estate sectors in general. MLPs were adversely impacted by the reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of the COVID-19 pandemic, which triggered an unprecedented sell-off of energy pipeline and midstream companies in 2020. Recently, global oil prices have experienced significant volatility, including a period where an oil-price futures contract fell into negative territory for the first time in history. Reduced production and continued oil price volatility may adversely impact the value of the Fund's investments in MLPs and energy infrastructure companies.

**Mortgage-Backed and Asset-Backed Securities Risk**. The risk of investing in mortgage-backed and other asset-backed securities, including prepayment risk, extension risk, interest rate risk, market risk and management risk as discussed under Fixed Income Risk above. Mortgage-backed securities include caps and floors, inverse floaters, mortgage dollar rolls, private mortgage pass-through securities, resets and stripped mortgage securities. With respect to prepayment risk if interest rates fall, the underlying debt may be repaid early, reducing the value of the Fund's investments. On the other hand, if interest rates rise, the duration of the securities may be extended, making them more sensitive to changes in interest rates. Furthermore, fewer prepayments may be made, which would cause the average bond maturity to rise, increasing the potential for the Fund to lose money. The value of mortgage-backed and asset-backed securities may be considerably affected by changes in interest rates, the market's perception of issuers, declines in the value of collateral, and the creditworthiness of the parties involved. Those securities that are guaranteed as to timely payment of interest and principal by a government entity, are not guaranteed as to market price, which will fluctuate. The ability of the Fund to successfully utilize these instruments may depend on the ability of the Fund's Adviser to forecast interest rates and other economic factors correctly.

**Odd Lot Risk**. Bonds may be purchased and held as smaller sized bond positions known as "odd lots". Pricing services generally value such securities based on bid prices for larger institutional sized bond positions known as "round lots"; and such round lot prices may reflect more favorable pricing than odd lot holdings. The Fund may purchase securities suitable for its investment strategies in odd lots. Special valuation considerations may apply with respect to the Fund's odd-lot positions, as the Fund may receive different prices when it sells such positions than it would receive for sales of institutional round lot positions. The Fund may fair value a particular bond if the Adviser does not believe that the round lot value provided by the independent pricing service reflects fair value of the Fund's holding. There can be no assurance that the Fund's valuation procedures will result in pricing data that is completely congruent with prices that the Fund might obtain on the open market.

**Preferred Securities Risk**. Preferred securities can decrease in value for a variety of reasons, including decreases in response to the activities of an individual company or in response to general market and/or economic conditions. To the extent a preferred security defers, suspends, or does not declare distributions, the preferred security may lose significant value and the Fund may still be required to account for the distribution that has been deferred or suspended even though it has not received this income in cash. The market value of all securities, including preferred securities, is based upon the market's perception of value and not necessarily the book value of an issuer or other objective measures of a company's worth. Preferred securities may be less liquid than common securities and may be subject to more fluctuations in market value, due to changes in market participants' perceptions of the issuer's ability to continue to pay dividends, than debts of the same issuer.

**Regulatory Risk**. Changes in the laws or regulations of the United States or other countries, including any changes to applicable tax laws and regulations, could impair the ability of the Fund to achieve its investment objective and could increase the operating expenses of mutual funds trading certain derivative instruments subject to regulation by the CFTC, including additional disclosure and operational obligations. The SEC recently adopted regulations that will subject activities of investment companies trading certain derivative instruments to additional regulation, which may increase the operating expenses of the Fund and impair the Fund's ability to achieve its investment objective.

**Sector Risk**. The risk that if the Fund invests a significant portion of its total assets in certain issuers within the same economic sector, an adverse economic, business or political development or natural or other event, including war, terrorism, natural and environmental disasters, epidemics, pandemics and other public health crises, affecting that region or sector may affect the value of the Fund's investments more than if the Fund's investments were not so focused. While the Fund may not concentrate in any one industry, the Fund may invest without limitation in a particular sector. Economic, legislative or regulatory developments may occur that significantly affect an entire sector. This may cause the Fund's NAV to fluctuate more than that of a fund that does not focus in a particular sector. Also, a significant dislocation in one or more industries (e.g., energy, commodities, etc.) could put pressure on bonds issued by those sectors.

**Securities Lending Risk.** To realize additional income, the Fund may lend portfolio securities with a value of up to 33 1/3% of the total assets, including any collateral received from the loans. The Fund receives collateral equal to at least 102% of the market value for loans secured by government securities or cash in the same currency as the loaned shares and 105% for all other loaned securities at each loan's inception. The collateral the Fund receives will generally take the form of cash, U.S. Government securities, letters of credit, or other collateral as deemed appropriate by the Adviser. The Fund may use any cash collateral it receives to invest in short-term investments, including money market funds. It is the Trust's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day. Therefore, from time to time the value of the collateral received by the Fund may be less than the value of the securities on loan. The Fund will receive income earned on the securities loaned during the lending period and a portion of the interest or rebate earned on the collateral received. The risks associated with lending portfolio securities, as with other extensions of secured credit, include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the securities loaned, possible loss of rights in the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. In certain market conditions, the portion of the Fund's securities on loan may be significant and may magnify the risk of such a loss or delay.

**Short Sales Risk**. The Fund may attempt to limit its exposure to a possible market decline in the value of its portfolio securities through short sales of securities that its portfolio manager believes possess volatility characteristics similar to those being hedged. The Fund may also use short sales for non-hedging purposes to pursue its investment objectives if, in the portfolio manager's view, the security is over-valued. Short selling is speculative in nature and, in certain circumstances, can substantially increase the effect of adverse price movements on the Fund's portfolio. A short sale of a security involves the risk of an unlimited increase in the market price of the security that can in turn result in an inability to cover the short position and a theoretically unlimited loss. No assurance can be given that securities necessary to cover the Fund's short position will be available for purchase. Positions in shorted securities are speculative and riskier than "long" positions (purchases) because the cost of the replacement security is unknown. Therefore, the potential loss on an uncovered short is unlimited, whereas the potential loss on long positions is limited to the original purchase price. You should be aware that any strategy that includes selling securities short could suffer significant losses. If the Fund is required to cover its short positions in securities at the same time other short-sellers are trying to borrow or buy such securities, a "short squeeze" could occur, causing the stock price to rise and making it more likely that the Fund will have to cover its short positions at an unfavorable price. In addition, if the Fund's securities short positions or its strategy become generally known as a result of required disclosure obligations or otherwise, it could have a significant effect on the Adviser's ability to implement its investment strategy. In particular, it would make it more likely that other investors could cause a "short squeeze" in the securities held short by the Fund forcing the Fund to cover its positions at a loss. Shorting will also result in higher transaction costs (such as interest and dividends), which reduce the Fund's return, and may result in higher taxes. The SEC and other U.S. and non-U.S. regulatory authorities have imposed, and may impose in the future, restrictions on short selling, either on a temporary or permanent basis. Such restrictions may include placing limitations on specific companies and/or industries with respect to which the Fund may enter into short positions, and may hinder the Fund in, or prevent it from, implementing its investment strategies, and may negatively affect performance.

**Sovereign Debt Risk**. Sovereign debt instruments are subject to the risk that a government entity may delay or refuse to pay interest or repay principal on its sovereign debt , due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity's debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies. If a governmental entity defaults, it may ask for more time in which to pay or for further loans. There may be no legal process for collecting sovereign debt that a government does not pay nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected.

**Underlying Fund Risk**. The Fund's investment performance and its ability to achieve its investment objective are directly related to the performance of the underlying funds in which it invests. There can be no assurance that the Fund's investments in the underlying funds will achieve their respective investment objectives. The Fund is subject to the risks of the underlying funds in direct proportion to the allocation of its assets among the underlying funds.

**U.S. Government Securities Risk**. Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. The U.S. Government and its agencies and instrumentalities do not guarantee the market value of their securities, which may fluctuate due to changes in the credit rating of the U.S. Government.

**Valuation Risk.** The sale price the Fund could receive for a security may differ from the Fund's valuation of the security, particularly for securities that trade in low volume or volatile markets, or that are valued using a fair value methodology. Because portfolio securities of the Fund may be traded on non-U.S. exchanges, and non-U.S. 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 the Fund's shares.

**Variable or Floating Rate Securities Risk**. Variable and floating rate securities generally are less sensitive to interest rate changes by may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Floating rate securities will not generally increase in value if interest rates decline. Although floating rate securities are generally less sensitive to interest rate risk than fixed-rate securities, they are subject to credit risk and default risk which could impair their value.

**Volatility Risk**. The Fund's investments may appreciate or decrease significantly in value over short periods of time. The value of an investment in the Fund's portfolio may fluctuate due to factors that affect markets generally or that affect a particular industry or sector. The value of an investment in the Fund's portfolio may also be more volatile than the market as a whole. This volatility may affect the Fund's net asset value per share, including by causing it to experience significant increases or declines in value over short periods of time. Events or financial circumstances affecting individual investments, industries or sectors may increase the volatility of the Fund.

***Non-Principal Risks***

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In addition to the principal risks outlined above, an investment in the Fund is also subject to the following additional risk:

**Commodity Risk.** Exposure to commodities through investments in underlying assets that directly or indirectly track commodity prices may subject the Fund to greater volatility than investments in traditional securities such as stocks or bonds. Commodities are influenced by a wide range of factors, including supply and demand dynamics, geopolitical events, and changes in overall market movements. For example, droughts, floods, extreme weather conditions, livestock disease, and other environmental factors may significantly impact the supply of agricultural commodities, leading to sharp price fluctuations. Similarly, tariffs, embargoes, and other trade restrictions may create uncertainty and volatility in commodity markets, particularly for energy and industrial metals.

Commodities are also sensitive to changes in interest rates, inflation, and currency exchange rates, which can amplify volatility. For instance, rising interest rates may increase the cost of storage and financing for commodity producers, leading to reduced supply and higher prices. Conversely, falling commodity prices may result in losses for the Fund, particularly during periods of declining global economic activity or oversupply.

International economic, political, and regulatory developments may also disproportionately impact commodity markets. For example, geopolitical tensions in oil-producing regions may lead to supply disruptions and sharp price increases for energy commodities, while regulatory changes may impose additional costs or restrictions on commodity producers and consumers. Because commodity prices can be influenced by unpredictable external factors, the Fund's exposure to commodities may result in significant gains or losses over short periods, increasing the Fund's overall risk profile.

**Loans of Portfolio Securities.** The Fund may lend its portfolio securities to brokers, dealers, banks and other institutional investors. By lending its portfolio securities, the Fund attempts to increase its net investment income through the receipt of interest on the cash collateral with respect to the loan or fees received from the borrower in connection with the loan. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Fund. The Fund employs an agent to implement the securities lending program and the agent receives a fee from the Fund for its services. A Fund will not lend more than 33⅓% of the value of its total assets.

A Fund may lend its portfolio securities so long as the terms, structure and the aggregate amount of such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the SEC thereunder. While voting rights pass with the loaned securities, the Fund will retain the right to call any security in anticipation of a vote that Horizon deems material to the security on loan.

Loans of securities involve a risk that the borrower may fail to return the securities or may fail to maintain the proper amount of collateral, which may result in a loss of money by the Fund. There may be risks of delay and costs involved in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. These delays and costs could be greater for foreign securities. However, loans will be made only to borrowers deemed by the Fund's adviser to be creditworthy and when, in the judgment of the adviser, the income that can be earned from such securities loans justifies the attendant risk. The Fund bears the risk that the reinvestment of collateral will result in a principal loss. Finally, there is the risk that the price of the securities will increase while they are on loan and the collateral will not be adequate to cover their value.

***Portfolio Holdings Disclosure***

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Information about the Fund's daily portfolio holdings will be available on the Fund's website, www.horizonmutualfunds.com. A summarized 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").

&nbsp;&nbsp; **MANAGEMENT OF THE FUND** 

**Investment Adviser**

Horizon Investments, LLC, a South Carolina limited liability company, serves as investment adviser to each of the Fund. Horizon has been an investment adviser since 1995, and serves individuals, mutual funds, ETFs, employee benefit plans, trusts and corporations. Horizon maintains its principal offices at 6210 Ardrey Kell Road, Suite 300, Charlotte, North Carolina 28277. Under the terms of its Investment Advisory Agreement with the Fund, Horizon is responsible for formulating the Fund's investment program and making day-to-day investment decisions. Horizon provides office space, services and equipment and assistance in supervising matters relating to the Fund's operations. As of December 31, 2025, Horizon managed approximately $8.9 billion in client assets.

Under the terms of the Investment Advisory Agreements, Horizon receives monthly fees from the Fund calculated at an annual rate of 0.80% of the Fund's average daily net assets.

A discussion regarding the basis for the Board of Trustees' approval of the Investment Advisory Agreement will be included in the Fund's first annual or semi-annual report on Form N-CSR.

**Multi-Manager Structure.** Horizon, subject to the approval of the Board of Trustees, has ultimate responsibility to recommend the hiring, termination and replacement of sub-advisers, if any, on behalf of the Fund, and to supervise, monitor and evaluate the performance of each sub-adviser thereof. The Trust, on behalf of the Trust's series, and Horizon have obtained an order from the SEC (the "Order") that permits Horizon to appoint or replace certain sub-advisers to manage all or a portion of the Fund's assets and enter into, amend or terminate a sub-advisory agreement with certain sub-advisers, in each case subject to the approval of the Board, but without obtaining shareholder approval ("multi-manager structure"). The Fund is not currently operating in a multi-manager structure, although the shareholders of the Fund have approved its operation in a multi-manager structure and the Fund may determine to operate in this way in the future. Board approval of any change of a sub-adviser will include a determination by the Board that the change is in the best interests of the Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which Horizon, a sub-adviser, any officer or trustee of the Fund, or any officer or board member of Horizon derives an inappropriate advantage. Pursuant to the Order, Horizon, with the approval of the Board, has the discretion to terminate any sub-adviser and allocate and reallocate the Fund's assets among any other sub-advisers. Because Horizon compensates each sub-adviser out of its management fee, Horizon is able to reduce the sub-advisory fees and retain a larger portion of the management fee or increase the sub-advisory fees and retain a smaller portion of the management fee. Pursuant to the Order, Horizon is not required to publicly disclose its contractual fee arrangements with any sub-adviser. The Fund and Horizon are subject to the conditions imposed by the Order, including the condition that within 90 days of hiring a new sub-adviser pursuant to the multi-manager structure, the Fund will provide shareholders with an information statement containing information about the new sub-adviser. The shareholders of the Fund have approved the multi-manager structure described herein.

Horizon has agreed to waive its advisory fee and reimburse expenses to limit total operating expenses of the Fund, at least until March 31, 2029, so that direct expenses (exclusive of front-end or contingent deferred loads; brokerage fees and commissions; acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); payments, if any, under a Rule 12b-1 Distribution Plan; expenses paid with securities lending expense offset credits; taxes; and extraordinary expenses (such as litigation)) of the Fund will not exceed, 0.99% with respect to Adviser Class, Investor Class and Institutional Class shares, subject to the terms of the applicable expense limitation agreement. After the expiration of the contractual expense limitation, total annual fund operating expenses may increase if Horizon does not renew or maintain the cap or waiver.

Any fees waived or expenses reimbursed are subject to possible recoupment by Horizon within 36 months after such fees have been waived or expenses reimbursed, if such recoupment can be achieved without exceeding the lower of the expense limit in place at the time of the waiver or reimbursement and the expense limit in place at the time of recoupment.

**Portfolio Managers**

The individuals listed below are primarily responsible for the day-to-day management of the Fund, as indicated. Prior to the Reorganizations, these individuals served in the same or similar capacities for the Predecessor Fund while employed by Anfield Capital Management, LLC ("Anfield"). The Adviser may reassign portfolio management responsibilities among team members or add or remove portfolio managers at any time without prior notice.

**Peter van de Zilver, CFA**

Mr. van de Zilver serves as a Portfolio Manager for the Fund. Prior to joining the Adviser, Mr. van de Zilver served as Head of Portfolio Manager Analytics and Risk Management at Anfield beginning in 2012, and he served as a portfolio manager for the Predecessor Fund from the Predecessor Fund's inception. Mr. van de Zilver has over 20 years of investment management experience and retired in 2010 from a senior position in PIMCO's Portfolio Analytics group, where he was responsible for the architecture, development, and implementation of many of PIMCO's analytics and risk management systems. Mr. van de Zilver holds the Chartered Financial Analyst (CFA) designation.

**Cyrille Conseil, CFA** 

Mr. Conseil serves as a Portfolio Manager for the Fund. Prior to joining the Adviser, Mr. Conseil served as a portfolio manager and senior member of the investment committee at Anfield beginning in 2012, and he served as a portfolio manager for the Predecessor Fund from the Predecessor Fund's inception. Before that, Mr. Conseil was an Executive Vice President, Portfolio Manager, and Head of the global leveraged loan desk at PIMCO from May 2005 until 2012. Mr. Conseil has over 20 years of investment management experience and holds the Chartered Financial Analyst (CFA) designation.

**David Young, CFA** 

Mr. Young serves as a Portfolio Manager for the Fund. Prior to joining the Adviser, Mr. Young served in senior leadership roles at Anfield, including as Chief Executive Officer beginning in 2009 and as Chief Investment Officer from 2009 through 2012, and he served as a portfolio manager for the Predecessor Fund from the Predecessor Fund's inception. Mr. Young has more than 25 years of investment management experience and retired at the end of 2008 from his position as Executive Vice President and Account Manager at PIMCO, where he contributed to the firm's global macroeconomic view and investment strategy and helped build the business in the United Kingdom, Europe, and the Middle East. Mr. Young holds the Chartered Financial Analyst (CFA) designation.

**Cameron Baxter, CFA** 

Mr. Baxter serves as a Portfolio Manager for the Fund. Prior to joining the Adviser, Mr. Baxter served as a portfolio manager and trader at Anfield beginning in December 2017, and he served as a portfolio manager for the Predecessor Fund from the Predecessor Fund's inception. Prior to his investment roles, Mr. Baxter worked in business development and operations analysis at a material handling supply company. Mr. Baxter maintains a Series 65 registration and holds the Chartered Financial Analyst (CFA) designation.

The SAI provides additional information about the Portfolio Managers' compensation, other accounts managed by the Portfolio Managers, and the Portfolio Managers' ownership of securities in the Fund.

&nbsp;&nbsp;**HOW SHARES ARE PRICED**

The price of the Fund's shares is based on the Fund's NAV. The Fund's NAV is calculated on each day that the New York Stock Exchange ("NYSE") is open. The NYSE is closed on weekends and most national holidays. The calculated and reported NAV of the Fund is the value of a single share of the Fund. The NAV is calculated for the Fund at the close of business of the NYSE, normally 4:00 p.m. Eastern time ("Valuation Time"), and the price at which a purchase or redemption of a Fund share is effected is based on the next calculation of net asset value after the order is placed. The Fund's NAV is determined by subtracting the total of the Fund's liabilities from its total assets and dividing the remainder by the number of shares outstanding. Due to the fact that different expenses are charged to the Advisor Class, Institutional Class and Investor Class shares of the Fund, the NAV of the three classes of the Fund may vary. The value of the Fund's total assets is generally based on the market value of the securities that the Fund holds. Fund portfolio securities, which are traded on a national securities exchange, are valued at the last quoted sale price. NASDAQ traded securities are valued using the NASDAQ official closing price (NOCP). Certain short-term securities are valued on the basis of amortized cost. Foreign securities may be traded in their primary markets on weekends or other days when the Fund does not price its shares. Similarly, when the Fund hold securities traded in foreign markets that close prior to U.S. markets then significant events, including company-specific developments or broad market moves, may affect the value of foreign securities held by the Fund. Therefore, the NAV of the Fund, if holding foreign securities, may change on days when shareholders will not be able to buy or redeem their Fund shares. The Fund normally uses third party pricing services to obtain market quotations.

If a security does not have a readily available market quotation, Horizon values the security based on fair value, as determined in good faith in accordance with the guidelines established by the Fund's Board of Trustees (the "Board"). The types of securities for which fair value pricing is required include, but are not limited to:

● Securities for which market quotations are insufficient or not readily available at the Valuation Time on a particular Business Day (including securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source);

● Securities for which, in the judgment of Horizon, the prices or values available do not represent the fair value of the instrument. Factors which may cause Horizon to make such a judgment include, but are not limited to, the following: only a bid price or an asked price is available; the spread between bid and asked prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets, such as the suspension or limitation of trading;

● Securities determined to be illiquid; and

● Securities with respect to which an event that will affect the value thereof has occurred since the closing prices were established on the principal exchange on which they are traded, but prior to a Fund's calculation of its NAV.

Fair value pricing should result in a more accurate determination of the Fund's NAV, which should eliminate the potential for arbitrage in the Fund. However, valuing securities at fair value involves greater reliance on judgment than securities that have readily available market quotations. There can be no assurance that the Fund could purchase or sell a portfolio security at the price used to calculate the Fund's NAV. In the case of fair valued portfolio securities, lack of information and uncertainty as to the significance of information may lead to a conclusion that a prior valuation is the best indication of a portfolio security's present value. Fair valuations may remain unchanged until new information becomes available. Consequently, changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes in the price of portfolio securities valued by an independent pricing service, or based on market quotations.

Fair valuation of the Fund's portfolio securities can serve to reduce arbitrage opportunities available to short term traders, but there is no assurance that fair value pricing policies will prevent dilution of the Fund's NAV by short-term traders. There is no assurance that the Fund will obtain the fair value assigned to a security if it were to sell such security while it is fair valued.

With respect to any portion of the Fund's assets that are invested in one or more open-end management investment companies that are registered under the Investment Company Act of 1940 (the "1940 Act"), the Fund's NAV is calculated based upon the NAV of the registered open-end management investment companies in which the Fund invests, and the prospectuses for these companies explain the circumstances under which those companies will use fair value pricing and the effects of using fair value pricing.

&nbsp;&nbsp;**HOW TO PURCHASE SHARES**

**Choosing a Class**

The Fund has authorized three classes of shares, Advisor Class, Institutional Class and Investor Class. Each class of shares is designed for specific investors. Not all classes are currently being offered for sale.

If you are making your initial investment in the Fund, you must select a class of shares. Each class represents an interest in the same portfolio of securities and each has the same rights with one exception. Pursuant to the 1940 Act, you will have exclusive voting rights with respect to the Distribution Plan pursuant to Rule 12b-1, if any, for the class you choose.

Different share classes allow you to choose the class that will be most beneficial to you. Your decision should depend upon a number of factors including the amount you purchase and the length of time you plan to hold the shares. All share classes are not available to all investors. Your financial consultant can assist you in determining which class is best for you. Because all future investments in your account will be made in the share class you designate when opening the account, you should make your decision carefully.

**12b-1 Plans.** The Board of Trustees of the Fund has adopted, on behalf of the Advisor Class shares and Investor Class shares of the Fund, a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"). The 12b-1 Plan allows the Fund to use part of its assets for the sale and distribution of these Shares, including advertising, marketing and other promotional activities, as well as shareholder servicing. For these services, under the 12b-1 Plan, the Fund is authorized to pay the Distributor a distribution fee at the rate of up to 0.25% of average net assets attributable to Advisor Class shares and 0.10% of the average net assets attributable to Investor Class shares, as applicable, of the Fund on an annualized basis. The Distributor may use monies authorized by the 12b-1 Plan to compensate other parties that have entered into selling and/or shareholder servicing agreements with Distributor with respect to the distribution of Fund shares. Because these distribution and shareholder service fees are paid out of the Fund's assets on an ongoing basis, the fees under the 12b-1 Plan may, over time, increase the cost of investing in the Fund and cost investors more than other types of sales loads.

**Advisor Class**

Advisor Class shares of the Fund are offered without any sales charges, and are not subject to shareholder servicing fees but are subject to a 0.25% 12b-1 fee.

**Investor Class**

Investor Class shares of the Fund are offered only through financial intermediaries that have been approved by the Fund and are subject to a 0.10% 12b-1 fee.

Please refer to your financial representative for detailed information on purchasing Investor Class shares of the Fund.

**Institutional Class**

Institutional Class shares are offered without any sales charges, and are not subject to any 12b-1 or shareholder servicing fees.

**Additional Information Regarding the Purchase of Shares**

All checks must be in U.S. Dollars drawn on a domestic bank. The Fund will not accept payment in cash or money orders. The Fund does not accept post-dated checks or any conditional order or payment. To prevent check fraud, the Fund will not accept third party checks, Treasury checks, credit card checks, traveler's checks or starter checks for the purchase of shares.

The Transfer Agent will charge a $25 fee against a shareholder's account, in addition to any loss sustained by the Fund, for any payment that is returned. It is the policy of the Fund not to accept applications under certain circumstances or in amounts considered disadvantageous to shareholders. The Fund reserves the right to reject any application.

To buy shares of the Fund, complete an account application and send it together with your check for the amount you wish to invest in the Fund to the address below. To make additional investments once you have opened your account, write your account number on the check and send it together with the Invest by Mail form from your most recent confirmation statement received from the transfer agent. If you do not have the Invest by Mail form, include the Fund name, address, and account number on a separate piece of paper along with your check. If you are purchasing Shares, you may send your purchase request to:

<u>By Regular Mail</u>

Horizon Funds

c/o U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, WI 53201-0701

<u>By Overnight Delivery</u>

Horizon Funds

c/o U.S. Bank Global Fund Services

615 East Michigan Street, 3rd Floor

Milwaukee, WI 53202

The Fund does not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the Transfer Agent's post office box, of purchase orders or redemption request does not constitute receipt by the Transfer Agent or the Fund. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices.

<u>For initial purchases by wire</u>

If you are making your first investment in the Fund, before you wire funds, the Transfer Agent must have a completed account application. You may mail or overnight deliver your account application to the Transfer Agent. Upon receipt of your completed account application, the Transfer Agent will establish an account for you. The account number assigned will be required as part of the instruction that should be provided to your bank to send the wire. Your bank must include both the name of the Fund you are purchasing, the account number, and your name so that monies can be correctly applied. Your bank should transmit funds by wire to:

U.S. Bank, N.A.

777 East Wisconsin Avenue

Milwaukee, WI 53202

ABA #075000022

Credit:

U.S. Bancorp Fund Services, LLC

Account #112-952-137

Further Credit:

(name of Fund to be purchased)

(shareholder registration)

(shareholder account number)

<u>For subsequent investment by wire</u>

Before sending your wire, please contact the Transfer Agent to advise them of your intent to wire funds. This will ensure prompt and accurate credit upon receipt of your wire.

Wired funds must be received prior to 4:00 p.m. Eastern time to be eligible for same day pricing. The Fund and U.S. Bank, N.A. are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions.

**Telephone Purchases**

Investors may purchase additional shares of the Fund by calling 1-855-754-7932. If you elected this option on your account application, and your account has been open for at least 7 business days, telephone orders will be accepted via electronic funds transfer from your bank account through the Automated Clearing House (ACH) network. You must have banking information established on your account prior to making a purchase. If you order is received prior to 4 p.m. Eastern time, your shares will be purchased at the net asset value calculated on the day your order is placed.

Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

**Automatic Investment Plan (AIP)**

Once your account has been opened with the initial minimum investment you may make additional purchases at regular intervals through the Automatic Investment Plan. This Plan provides a convenient method to have monies deducted from your bank account, for investment into the Fund, on a monthly basis. In order to participate in the Plan, each purchase must be in the amount of $100 or more, and your financial institution must be a member of the Automated Clearing House (ACH) network. If your bank rejects your payment, the Fund's transfer agent will charge a $25 fee to your account. To begin participating in the Plan, please complete the Automatic Investment Plan section on the account application or call the Fund's transfer agent at 1-855-754-7932 for instructions. Any request to change or terminate your Automatic Investment Plan should be submitted to the transfer agent 5 days prior to the effective date.

&nbsp;&nbsp;**HOW TO REDEEM SHARES**

You have the right to sell ("redeem") all or any part of your shares subject to certain restrictions. Selling your shares in the Fund is referred to as a "redemption" because the Funds buy back their shares. We will redeem your shares at a price per share equal to the NAV next computed following receipt of your redemption request in good order. See the section entitled "Redemption Procedures Request in Good Order".

The Fund typically expects to meet redemption requests by paying out proceeds from cash or cash equivalent portfolio holdings, or by selling portfolio holdings. In stressed market conditions, redemption methods may include redeeming in kind. We will mail your redemption proceeds to your address of record, or, if previously established on your account, you may have proceeds sent by wire or electronic funds transfer through the ACH network directly to your bank account. Wires are subject to a $15 fee paid by the investor and your bank may charge a fee to receive wired funds. You do not incur any charge when proceeds are sent via the ACH network; however, credit may not be available in your bank account for two to three days.

The Fund typically sends the redemption proceeds on the next business day (a day when the NYSE is open for normal business) after the redemption request is received in good order and prior to market close, regardless of whether the redemption proceeds are sent via check, wire, or ACH transfer. Under unusual circumstances, the Fund may suspend redemptions, or postpone payment for up to seven days, as permitted by federal securities law. If you purchase shares by check or electronic funds transfer through the ACH network and, soon after, request a redemption, your redemption request will not be processed until the purchase amount has cleared (usually within 10 calendar days). This delay will not apply if you purchased your shares via wire payment.

The Fund cannot accept requests that specify a certain date for redemption or which specify any other special conditions. Redemption proceeds must be payable to the registered shareholder(s) of the account or to a financial intermediary for the benefit of the registered shareholder(s) of the account. Please call 1-855-754-7932 for further information. We will not process your redemption request if it is not in good order. We will notify you if your redemption request is not in good order.

If, as a result of your redemption, your account value drops below $2,500, we may redeem the remaining shares in your account. We will notify you in writing of our intent to redeem your shares. We will allow at least sixty days thereafter for you to make an additional investment to bring your account value up to at least the minimum amount before we will process the redemption.

**Systematic Withdrawal Plan**

For Investor Class shares, please refer to your financial representative for detailed information on whether your financial representative's firm is participating in the Fund's systematic withdrawal plan. Generally, the Fund will mail your redemption proceeds to your address of record or transmit them electronically to your designated bank account. Except under certain extraordinary conditions, we will send your redemption to you within seven days after we receive your redemption request. If you purchase shares by check and, soon after, request a redemption, your redemption request will not be processed until the check used for your purchase has cleared (usually within 10 calendar days). Generally, if your current account value is at least $10,000, you may adopt a Systematic Withdrawal Plan to provide for monthly, quarterly or other periodic checks for any designated amount of $100 or more.

For Advisor Class, Investor Class and Institutional Class shares, if your current account value is at least $10,000, you may adopt a Systematic Withdrawal Plan to provide for monthly, quarterly or other periodic checks for any designated amount of $100 or more. If you wish to open a Systematic Withdrawal Plan, please indicate on your application or contact the Fund at 1-855-754-7932 for instructions. You may also elect to modify or terminate your participation in this Plan at any time by contacting the transfer agent at least 5 days prior to the next scheduled withdrawal.

**Signature Guarantees**

Under certain circumstances, your redemption request must be accompanied by a signature guarantee. Signature guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program and the Securities Transfer Agents Medallion Program ("STAMP"). A notary public is not an acceptable signature guarantor.

A signature guarantee, from either a Medallion program member or a non-Medallion program member, is required in the following situations:

● If ownership is being changed on your account;

● When redemption proceeds are payable or sent to any person, address or bank account not on record;

● When a redemption request is received by the Transfer Agent and the account address has changed within the last 30 calendar days;

● For all redemptions in excess of $50,000 from any shareholder account.

The Fund may waive any of the above requirements in certain instances. In addition to the situations described above, the Fund and/or the Transfer Agent reserve the right to require a signature guarantee in other instances based on the circumstances relative to the particular situation.

Non-financial transactions, including establishing or modifying certain services on an account, may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source.

**Third Party Transactions**

The Fund has authorized certain financial intermediaries to accept on its behalf purchase and redemption orders. The Fund will be deemed to have received the order when an approved financial intermediary or an authorized designee accepts your order. Your order will be priced per share at the Fund's NAV next computed after it is received by an approved financial intermediary or its authorized designee.

If you buy and redeem shares of the Fund through a member of the Financial Industry Regulatory Authority, Inc. that member may charge you a fee for that service. The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate intermediaries to accept orders on the Fund's behalf. The Fund will be deemed to have received the order when an authorized broker or a broker authorized designee accepts your order. Your order will be priced per share at the Fund's NAV next computed after it is received by the authorized broker or broker authorized designee.

Horizon may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative and servicing functions for Fund shareholders and/or making the Fund available for purchase on their platforms. However, distribution-related fees are made from Horizon and are not charged to the Fund, unless part of an approved 12b-1 Plan.

**Redemptions in Kind**

The Fund reserves the right to honor requests for redemption or repurchase orders by making payment in whole or in part in readily marketable securities ("redemption in kind") if the amount of such a request is large enough to affect operations (for example, if the request is greater than $250,000 or 1% of the Fund's assets). The securities will be chosen by the Fund and be valued at an amount equal to the net asset value of the shares being redeemed. A shareholder may incur transaction expenses in subsequently converting these securities to cash.

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| | |
|:---|:---|
| **Method of**<br> **Redemption** | **Redemption Procedures** |
| By Telephone | You may authorize redemption of some or all shares in your account with the Fund by telephoning the Fund at 1-855-754-7932. between 8:30 a.m. and 4:00 p.m. Eastern time on any day the Fund is open.<br> You will NOT be eligible to use the telephone redemption service if you:<br> ● have declined or canceled your telephone investment privilege;<br> ● wish to redeem shares valued in excess of $50,000 or if you ask us to send the redemption proceeds using an address, bank instructions, or payee other than what is currently on file;<br> ● must provide supporting legal documents such as a signature guarantee for redemption; or<br> ● wish to redeem from certain type of retirement accounts. |

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| | |
|:---|:---|
| By Mail | If you are redeeming Shares, you may send your redemption request to:<br>By Regular Mail<br> Horizon Funds<br> c/o U.S. Bank Global Fund Services<br> P.O. Box 701<br> Milwaukee, WI 53201-0701<br>By Overnight Delivery<br> Horizon Funds<br> c/o U.S. Bank Global Fund Services<br> 615 East Michigan Street, 3rd Floor<br> Milwaukee, WI 53202<br>You must include the following information in your written request:<br>● a letter of instruction stating the name of the Fund, the number of shares or dollar amount you are redeeming, the names in which the account is registered and your account number;<br> ● other supporting legal documents, if necessary, for redemption requests by corporations, trusts and partnerships;<br> ● a signature guarantee, if necessary. |
| By Wire | You may request your redemption proceeds be wired directly to the bank account designated on your application. The Fund's Transfer Agent will charge you a $15.00 fee for each wire redemption. The Transfer Agent will deduct the fee from your redemption proceeds for complete and share certain redemptions and directly from your account in the case of a partial redemption. Your bank may also impose a fee for the incoming wire. |
| Request in "Good Order" | For our mutual protection, all redemption requests must include:<br>● your account number;<br> ● the amount of the transaction;<br> ● for mail request, signatures of all owners EXACTLY as registered on the account and signature guarantees, if required (signature guarantees can be obtained at most banks, credit unions, and licensed brokers); and<br> ● any supporting legal documentation that may be required.<br>**Your redemption request will be processed at the next determined share price after we have received all required information.** |
| **IMPORTANT NOTE** | Once we have processed your redemption request, and a confirmation number has been given, the transaction cannot be revoked. |

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**Other Redemption Considerations**

Shareholders who have an individual retirement account ("IRA") or other retirement plan must indicate on their written redemption request whether or not to withhold federal income tax. Redemption requests failing to indicate an election not to have tax withheld will generally be subject to 10% withholding. Shares held in IRA or other retirement plan accounts may be redeemed by telephone at 1-855-754-7932. Investors will be asked whether or not to withhold taxes from any distribution.

The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with such services, or receipt at the Transfer Agent's post office box, of purchase orders or redemption requests does not constitute receipt by the Transfer Agent or the Fund. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices.

**Options For Redemption Proceeds**

You may receive your redemption proceeds by check, ACH transfer, or wire.

**Check Redemptions.** Normally we will mail your check within two business days of a redemption.

**ACH Redemptions.** Before you can receive redemption proceeds by ACH, you must establish this option by completing a special form or the appropriate section of your account application.

**Wire Redemptions.** Before you can receive redemption proceeds by wire, you must establish this option by completing a special form or the appropriate section of your account application.

You may request that your redemption proceeds be wired directly to your bank account. The Fund's Transfer Agent imposes a $15.00 fee for each wire redemption and deducts the fee directly from your account. Your bank may also impose a fee for the incoming wire. The redemption proceeds must be paid to the same bank and account as designated on the application or in written instructions in proper form subsequently received by the Fund.

**Telephone Redemptions**

We will automatically establish the telephone redemption option for your account, unless you instruct us otherwise in writing. Telephone redemptions are easy and convenient, but this account option involves a risk of loss from unauthorized or fraudulent transactions. We will take reasonable precautions to protect your account from fraud. You should do the same by keeping your account information private and by reviewing immediately any account statements and confirmations that you receive. Please contact us immediately about any transaction you believe to be unauthorized.

The Fund reserves the right to refuse a telephone redemption if the caller cannot provide:

● the account number

● the name and address exactly as registered on the account

● the primary social security or employer identification number as registered on the account

The Fund will not be responsible for any account losses due to telephone fraud, so long as we have taken reasonable steps to verify the caller's identity. If an account has more than one owner or authorized person, the Fund will accept telephone instructions from any one owner or authorized person. Once a telephone transaction has been placed, it cannot be canceled or modified after the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern time). If you wish to cancel the telephone redemption feature for your account, please notify us in writing.

**Limitation On Purchases and Redemptions**

Purchases or sales of shares of the Fund should not be used to try to take advantage of short-term swings in the market. Frequent purchase and sale transactions create higher expenses for the Fund. Accordingly, the Fund reserves the right to limit or terminate the ability to purchase shares of the Fund for any shareholder making frequent purchases or sales.

**Transferring Registration**

You can transfer the registration of your shares in the Funds t another owner by completing a transfer form and sending it to the Horizon Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701. Generally, a signature guarantee is required for all transfers.

**Other Purchase Information**

The Fund reserves the right, in its sole discretion, to suspend the offering of its shares or any class thereof, to reject any purchase order or to waive any minimum investment requirements.

Purchases of the Fund's shares will be made in full and fractional shares of the Fund calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued.

**Policy on prohibition of Foreign Shareholders**

Shares of the Fund have not been registered for sale outside of the United States. Accordingly, the Fund generally requires that all shareholders must be U.S. persons with a valid U.S. taxpayer identification number to open an account with the Fund. The Fund generally does not sell shares to investors residing outside the United States, even if they are United States citizens or lawful permanent residents, except to investors with United States military APO or FPO addresses. In the rare event that the Transfer Agent is unable to verify your identity, the Fund reserves the right to redeem your account at the current day's net asset value.

**Lost Shareholders, Inactive Accounts and Unclaimed Property**

It is important that the Fund maintain a correct address for each shareholder. An incorrect address may cause a shareholder's account statements and other mailings to be returned to the Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder's account can legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no activity occurs within your account during the "inactivity period" specified in your state's abandoned property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state's unclaimed property administrator in accordance with statutory requirements. The shareholder's last known address of record determines which state has jurisdiction. Please proactively contact the Transfer Agent at 1-855-754-7932 (toll free) at least annually to ensure your account remains in active status.

If you are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.

&nbsp;&nbsp;**HOW TO EXCHANGE SHARES**

Exchanges of all or a portion of your investment from the Fund for shares in an identically registered account of another Horizon Fund may be made as long as the exchange is for the same class of shares of the other Horizon Fund. Any new account established through an exchange will be subject to the minimum investment requirements described above. Exchanges will be executed on the basis of the relative NAV of the shares exchanged after your request for an exchange is received. An exchange is considered to be a sale of shares for federal income tax purposes on which you may realize a taxable gain or loss. Call the Fund to learn more about exchanges. If you purchased shares of the Fund through your financial intermediary, please contact your financial intermediary to determine if you may take advantage of the exchange policies described in this section and for your financial intermediary's policies to effect an exchange.

The Fund is intended as a long-term investment vehicle and not to provide a means of speculating on short-term market movements. In addition, excessive trading can hurt the Fund's performance and shareholders. Therefore, the Fund may terminate, without notice, the exchange privilege of any investor who uses the exchange privilege excessively. The Fund may change or temporarily suspend the exchange privilege during unusual market conditions.

&nbsp;&nbsp;**TAX STATUS, DIVIDENDS AND DISTRIBUTIONS**

As a Fund shareholder, you are entitled to your share of the Fund's net income and capital gains on its investments. The Fund passes substantially all of its earnings along to its investors as distributions. When the Fund earns dividends from stocks and interest from bonds and other debt securities and distributes these earnings to shareholders, it is called a dividend. The Fund realizes capital gains when it sells securities for a higher price than it paid. When net long-term capital gains are distributed to shareholders, it is called a capital gain distribution. Net short-term capital gains are considered ordinary income and are included in dividends.

**Long-Term vs. Short-Term Capital Gains** 

● Long-term capital gains are realized on securities held for more than one year and are part of your capital gain distribution.

● Short-term capital gains are realized on securities held less than one year and are part of your dividends.

The Fund distributes dividends monthly. The Fund distributes capital gains annually. These distributions are typically declared and paid in December, and are taxable as if paid on December 31st of the year declared. The Fund may make an additional distribution if necessary to avoid federal income taxes, excise taxes, or as otherwise approved by the Board of Trustees. The Internal Revenue Service ("IRS") requires you to report these amounts on your income tax return for the year declared. The may have tax losses available for offsetting ordinary income and capital gains. These losses, based on existing tax law, may limit the ability of the Fund to make monthly distributions to shareholders out of current ordinary income.

You will receive distributions from the Fund in additional shares of the Fund unless you choose to receive your distributions in cash. If you wish to change the way in which you receive distributions, please contact your financial representative for instructions.

If an investor elects to receive distributions in cash and the U.S. Postal Service cannot deliver your check, or if a check remains uncashed for six months, the Fund reserves the right to reinvest the amount of the distribution check in the shareholder's account at the Fund's then current NAV per share and to reinvest all subsequent distributions. You may change your distribution option in writing or by telephone. Any request for change should be submitted at least 5 days prior to the record date of the next distribution.

**Federal Tax Considerations** 

The following information is meant as a general summary for U.S. taxpayers (other than U.S. investors who hold their shares in an IRA or other tax-qualified plan). Additional tax information appears in the SAI. Shareholders should rely on their own tax advisors for advice about the particular federal, state, and local tax consequences of investing in the Fund.

**Taxes on Distributions.** You may be subject to federal income tax on all Fund distributions. Your distributions will be taxed in the same manner whether you receive the distributions in cash or additional shares of the Fund making the distribution. Distributions that are derived from net long-term capital gains will generally be taxed as long-term capital gains. The rate of tax will depend on how long the Fund held the securities on which it realized the gains. In general, for individual shareholders, the maximum long-term capital gain rate is 20 percent. All other distributions, including short-term capital gains, will be taxed as ordinary income. The Fund sends detailed tax information to its shareholders about the amount and type of its distributions by January 31st for the prior calendar year.

You may also be subject to state and local taxes on all dividends, other distributions the Fund declares, and redemption proceeds.

**Taxes on Sales.** If you redeem your shares of the Fund, you may be subject to tax on any taxable gain. Your taxable gain or loss is computed by subtracting your tax basis in the shares from the redemption proceeds. Because your tax basis depends on the original purchase price and on the price at which any dividends may have been reinvested, you should keep your account statements so that you or your tax preparer will be able to determine whether a sale or exchange will result in a taxable gain or loss. All or a portion of any loss realized upon a taxable disposition of Fund shares will be disallowed if you purchase other substantially identical shares within 30 days before or 30 days after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

**"Buying a Dividend".** Unless your investment is in a tax-deferred account, such as an IRA, you may want to avoid investing in the Fund close to the date of a distribution because you will pay the full pre-distribution price for your shares and then receive part of your investment back as a taxable distribution. This is known as "buying a dividend". We recommend you consult with your independent tax advisor to determine the federal, state, and local tax consequences of "buying a dividend".

**Tax Withholding.** The Fund may be required to withhold U.S. federal income tax at the rate of 24% from all taxable distributions and from proceeds from certain sales and exchanges payable to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications, or who have been notified by the IRS that they are subject to backup withholding. Any such withheld amounts may be credited against the shareholder's U.S. federal income tax liability.

**Medicare Tax.** Certain U.S. shareholders, including individuals and estates and trusts, will be subject to an additional 3.8% Medicare tax on all or a portion of their "net investment income", which should include dividends from the Fund and net gains from the disposition of shares of the Fund. U.S. shareholders are urged to consult their own tax advisors regarding the implications of the additional Medicare tax resulting from an investment in the Fund.

**Cost Basis.** A shareholder's basis in shares of the Fund that he or she acquires ("Covered Shares") will be determined in accordance with the Fund's default method, which is average basis, unless the shareholder affirmatively elects in writing, which may be electronic, to use a different acceptable basis determination method, such as a specific identification method. The Fund, or its administrative agent, must report to the IRS and furnish to its shareholders the basis information for Covered Shares. Fund shareholders should consult with their tax advisers to determine the best IRS-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law applies to them.

&nbsp;&nbsp;**FREQUENT PURCHASES AND REDEMPTIONS OF SHARES**

The Board has adopted policies and procedures with respect to frequent purchases and redemptions of Fund shares by Fund shareholders and discourages market timing. Market timing is an investment strategy using frequent purchases, redemptions and/or exchanges in an attempt to profit from short-term market movements. Market timing may disrupt portfolio management strategies and hurt Fund performance. Such practices may dilute the value of Fund shares, interfere with the efficient management of the Fund's investments, and increase brokerage and administrative costs. The Fund may reject purchase orders or temporarily or permanently revoke privileges if there is reason to believe that a shareholder is engaging in market timing activities. Brokers maintaining omnibus accounts with the Fund have agreed to provide shareholder transaction information, to the extent known to the broker, to the Fund upon request. The Fund does not accommodate frequent purchases and redemptions of Fund shares by Fund shareholders.

To prevent disruption in the management of the Fund, excessive trading or exchange activity is limited. An investor's right to purchase additional shares may be revoked if the redemption or exchange activity is considered excessive. Generally, trading or exchange activity is considered excessive if an exchange or redemption in excess of a predetermined dollar amount occurs within 7 calendar days of purchase.

The Fund may accept redemptions and exchanges in excess of the above guidelines if it believes that granting such exceptions is in the best interest of the Fund and the redemption is not part of a market timing strategy.

It is a violation of policy for an officer or Trustee of the Fund to knowingly facilitate a purchase or redemption where the shareholder executing the transaction is engaged in any activity which violates the terms of the Fund's Prospectus or Statement of Additional Information, and/or is considered not to be in the best interests of the Fund or its other shareholders.

The Fund will apply its policies and procedures uniformly to all Fund shareholders. Although the Fund intends to deter market timing, there is no assurance that they will be able to identify and eliminate all market timers. For example, certain accounts called "omnibus accounts" include multiple shareholders. Omnibus accounts typically provide the Fund with a net purchase or redemption request on any given day where purchasers of the Fund's shares and redeemers of the Fund's shares are netted against one another and the identities of individual purchasers and redeemers whose orders are aggregated are not known by the Fund. The netting effect often makes it more difficult for the Fund to detect market timing, and there can be no assurance that the Fund will be able to do so. Therefore, with respect to Omnibus accounts, the Fund relies on selling group members to enforce the Fund's market timing policies and procedures. Omnibus account arrangements are common forms of holding shares of the Fund. While the Fund will encourage financial intermediaries to apply the Fund's Market Timing Trading Policy to their customers who invest indirectly in the Fund, the Fund is limited in its ability to monitor the trading activity or enforce the Fund's Market Timing Trading Policy with respect to customers of financial intermediaries. For example, should it occur, the Fund may not be able to detect market timing that may be facilitated by financial intermediaries or made difficult to identify in the omnibus accounts used by those intermediaries for aggregated purchases, exchanges, and redemptions on behalf of all their customers. More specifically, unless the financial intermediaries have the ability to apply the Fund's Market Timing Trading Policy to their customers through such methods as implementing short-term trading limitations or restrictions and monitoring trading activity for what might be market timing, the Fund may not be able to determine whether trading by customers of financial intermediaries is contrary to the Fund's Market Timing Trading Policy. However, the Fund will ensure that financial intermediaries maintaining omnibus accounts on behalf of the Fund enter into an agreement with the Fund to provide shareholder transaction information, to the extent known to the financial intermediary, to the Fund upon request.

The Fund reserves the right to modify its policies and procedures at any time without prior notice as it deems in its sole discretion to be in the best interests of its shareholders, or to comply with state or Federal legal requirements.

**Anti-Money Laundering Program**

In compliance with the USA Patriot Act of 2001, please note that the Transfer Agent will verify certain information on your Account Application as part of the Fund's Anti-Money Laundering Program. As requested on the Application, you must supply your full name, date of birth, social security number and permanent street address. If you are opening the account in the name of a legal entity (e.g., partnership, limited liability company, business trust, corporation, etc.), you must also supply the identity of the beneficial owners. Mailing addresses containing only a P.O. Box will not be accepted. Please contact the Transfer Agent at 1-855-754-7932 if you need additional assistance when completing your Application.

If we do not have a reasonable belief of the identity of a customer, the account will be rejected or the customer will not be allowed to perform a transaction on the account until such information is received. In the rare event that the Transfer Agent is unable to verify your identity, the Fund reserves the right to redeem your account at the current day's net asset value.

&nbsp;&nbsp;**HOUSEHOLDING**

To reduce expenses, the Trust mails only one copy of the prospectus and other similar documents to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at 1-855-754-7932 between the hours of 8:30 a.m. and 6:00 p.m. Eastern time on days the Fund is open for business or contact your financial institution. The Trust will begin sending you individual copies thirty days after receiving your request.

&nbsp;&nbsp;**ADDITIONAL INFORMATION**

The Trust enters into contractual arrangements with various parties, including among others, the Fund's investment adviser, principal underwriter, custodian and transfer agent, who provide services to the Fund. Shareholders are not parties to any such contractual arrangements or intended beneficiaries of those contractual arrangements, and those contractual arrangements are not intended to create in any shareholder any right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Trust.

This prospectus provides information concerning the Fund that you should consider in determining whether to purchase Fund shares. Neither this prospectus nor the Statement of Additional Information is intended, or should be read, to be or give rise to an agreement or contract between the Trust, the Trustees or the Fund and any investor, or to give rise to any rights in any shareholder or other person other than any rights under federal or state law that may not be waived.

&nbsp;&nbsp;**FINANCIAL HIGHLIGHTS**

The financial highlights table below is intended to help you understand the financial performance of the Predecessor Fund for the periods presented. Certain information reflects financial results for a single share. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in the Predecessor Fund (assuming reinvestment of all dividends and distributions).

As of the close of business on May 1, 2026, pursuant to the Reorganization, the Fund will acquire all of the assets and assume all of the liabilities of the Predecessor Fund. Upon completion of the Reorganization, the Fund's shares will assume the performance, financial, and other historical information of those of the Predecessor Fund.

The information in the following tables has been derived from the Predecessor Fund's financial statements, which have been audited by Deloitte & Touche LLP, an independent registered public accounting firm whose reports, along with the Predecessor Fund's financial statements and related notes, are included in the Predecessor Fund's annual reports, which are available upon request.

**Anfield Universal Fixed Income Fund**

**Financial Highlights**

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Year

***Class I***

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended**<br>October 31,<br>2025 | **Year Ended**<br>October 31,<br>2024 | **Year Ended**<br>October 31,<br>2023 | **Year Ended**<br>October 31,<br>2022 | **Year Ended**<br>October 31,<br>2021 |
| Net asset value, beginning of year | $8.70 | $8.62 | $8.53 | $9.49 | $9.51 |
| Activity from investment operations: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income (1) | 0.36 | 0.46 | 0.44 | 0.30 | 0.24 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) on investments (2) | 0.20 | 0.20 | 0.12 | (0.98) | 0.12 |
| Total from investment operations | 0.56 | 0.66 | 0.56 | (0.68) | 0.36 |
| Less distributions from: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income | (0.36) | (0.47) | (0.47) | (0.28) | (0.38) |
| &nbsp;&nbsp;&nbsp;Return of Capital | (0.02) | (0.11) |  |  |  |
| Total distributions | (0.38) | (0.58) | (0.47) | (0.28) | (0.38) |
| Net asset value, end of year | $8.88 | $8.70 | $8.62 | $8.53 | $9.49 |
| Total return (3) | 6.20% | 7.88%(7) | 6.78% | (7.28)% | 3.87% |
| Net assets, at end of year (000)s | $149129 | $138968 | $141035 | $107121 | $126814 |
| Ratio of gross expenses to average net assets (4)(5)(6) | 1.25% | 1.34% | 1.35% | 1.39% | 1.25% |
| Ratio of net expenses to average net assets (5)(6) | 1.25% | 1.34% | 1.35% | 1.39% | 1.25% |
| Ratio of net investment income to average net assets (5)(6) | 4.10% | 5.34% | 5.20% | 3.24% | 2.54% |
| Portfolio Turnover Rate | 42% | 62% | 26% | 44% | 52% |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Per share amounts calculated using the average shares method, which more appropriately represents the per share data for the period.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Net realized and unrealized gain (loss) on investments per share are balancing amounts necessary to reconcile the change in net asset
value per share for the year, and may not reconcile with aggregate gains (losses) in the statement of operations due to the share transactions
for the period.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Total returns are historical in nature and assume changes in sale price, reinvestment of dividends and capital gain distributions.
Had the adviser not waived a portion of the Fund's expenses, total returns would have been lower.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;(5) The ratios of expenses to average net assets and net investment income (loss) to average net assets do not reflect the expenses of
the underlying investment companies in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Ratio calculated for each share class as a whole, therefore an individual investor's ratio may vary.

&nbsp;&nbsp;&nbsp;&nbsp;(7) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, consequently,
the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values
and returns for shareholder transactions.

*PRIVACY NOTICE*

 

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| | |
|:---|:---|
| **FACTS** | **WHAT DOES HORIZON FUNDS DO WITH YOUR PERSONAL INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share and protect your personal information. Please read this notice carefully to understand what we do. |
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br> ● Social Security number and account information<br> ● Account balance and transaction history<br> ● Wire Transfer Instructions |
| **How?** | All financial companies need to share your personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information the reasons Horizon Funds chooses to share and whether you can limit this sharing. |

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| | | |
|:---|:---|:---|
| Reasons we can share your personal information | Does Horizon Funds <br> share? | Can you limit this<br> sharing? |
| **For our everyday business purposes** –<br> Such as to process your transactions, maintain your account(s), respond to court orders and legal investigations or report to credit bureaus | Yes | No |
| **For our marketing purposes** –<br> to offer our products and services to you | No | We don't share |
| **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes** –<br> information about your transactions and experiences or creditworthiness | No | We don't share |
| **For non-affiliates to market to you** | No | We don't share |

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| | |
|:---|:---|
| **Questions?** | Call 1-855-754-7932 |

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**Page 2**

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| | |
|:---|:---|
| **Who we are** | **Who we are** |
| **Who is providing this notice?** | Horizon Funds |
| **What we do** | **What we do** |
| **How does Horizon Funds protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| **How does Horizon Funds collect my personal information?** | We collect your personal information, for example, when you<br>● Open an account<br> ● Provide account information<br> ● Give us your contact information<br> ● Make deposits or withdrawals from your account<br> ● Make a wire transfer<br> ● Tell us where to send the money<br> ● Tell us who receives the money<br> ● Show your government-issued ID<br> ● Show your driver's license |
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br>● Sharing for affiliates' everyday business purposes – information about your creditworthiness<br> ● Affiliates from using your information to market to you<br> ● Sharing for non-affiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. |
| **Definitions** | **Definitions** |
| **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies.<br>● Our affiliates include companies such as Horizon Investments, LLC. |
| **Non-affiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies<br>● Non-affiliates we share with can include financial companies such as custodians, transfer agents, registered representatives, financial advisers, and nonfinancial companies such as fulfillment, proxy voting and class action service providers. |
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.<br>● Horizon Funds does not jointly market. |

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***Investment Adviser***

Horizon Investments, LLC

6210 Ardrey Kell Road, Suite 300

Charlotte, North Carolina 28277

 ****

***Independent Registered Public Accounting Firm***

Cohen & Company, Ltd.

1350 Euclid Ave., Suite 800

Cleveland, OH 44115

 ****

***Legal Counsel***

Kilpatrick Townsend & Stockton LLP

1001 West 4<sup>th</sup> Street

Winston-Salem, North Carolina 27101

 ****

***Custodian***

U.S. Bank, N.A

Custody Operations

1555 North River Center Drive, Suite 302

Milwaukee, Wisconsin 53212

 ****

***Transfer Agent, Fund Accountant and Fund Administrator***

U.S. Bank Global Fund Services

615 East Michigan Street

Milwaukee, Wisconsin 53202

 ****

***Distributor***

Quasar Distributors, LLC

3 Canal Plaza, Suite 100

Portland, ME 04101

**WHERE TO GO FOR MORE INFORMATION**

You will find more information about the Fund in the following documents:

**Annual and 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. In the Fund's annual report, once available, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. In Form N-CSR, you will find the Fund's annual and semi-annual financial statements.

**Statement of Additional Information ("SAI").** The Statement of Additional Information contains additional and more detailed information about the Fund.

The SAI is incorporated by reference into (and is thus a part of) this Prospectus.

***The SAI and the Fund's annual and semi-annual reports and other information, such as Fund financial statements, are available, without charge, upon request. In addition to requesting these documents from your financial representative, there are three additional ways to get a copy of these documents:***

1. Request a copy by calling the Fund at 1-855-754-7932 or submitting a written request to the address listed below and a copy will be sent to you without charge.

Horizon Funds

c/o U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, WI 53201-0701

The Prospectus, Annual Report, Semi-Annual Report, and holdings information are available at **www.horizonmutualfunds.com.**

2. Go to the EDGAR Database on the SEC's website (www.sec.gov) and download a free text-only version. Copies of the SAI, Annual Report, Annual Report, and Semi-annual may be obtained after paying a duplicating fee, by electronic request to publicinfo@sec.gov.

*If you are a current Fund shareholder and would like information about your account, account transactions, or account statements, please call us at 1-855-754-7932.* 

 

If you purchased your shares through a financial institution, you may contact that institution for more information.

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

The Fund' Investment Company Act File Number is 811-23063.

**HORIZON FUNDS** 

**STATEMENT OF ADDITIONAL INFORMATION**

Anfield Universal Fixed Income Fund

Advisor Class ___ <br> Investor Class ___ <br> Institutional Class AFLIX

**May 1, 2026**

This Statement of Additional Information (the "SAI") is not a prospectus and should be read in conjunction with the Prospectus dated May 1, 2026, as may be amended or supplemented from time to time, for the Anfield Universal Fixed Income Fund (the "Fund"), a series of Horizon Fund (the "Trust"). A copy of the Prospectus may be obtained without charge by calling 1-855-754-7932 or by visiting www.horizonmutualfunds.com.

The Fund was established in connection with a reorganization (the "Reorganization") in which all of the assets and liabilities of the Anfield Universal Fixed Income Fund (the "Predecessor Fund"), previously a series of Two Roads Shared Trust, were transferred to the Fund. In exchange for such transfer, Institutional Class shares of the Fund were issued to the Predecessor Fund and distributed to its shareholders in complete liquidation of the Predecessor Fund. The Reorganization is expected to be completed as of the close of business on May 1, 2026.

The investment objective, principal investment strategies, and fundamental policies of the Fund are substantially similar to those of the Predecessor Fund. Following the Reorganization, the Fund will adopt the accounting and performance history of the Predecessor Fund for purposes of financial reporting and performance presentation.

The audited financial statements for the Predecessor Fund's most recent fiscal year are included in the Annual Report of the Predecessor Fund, which is incorporated by reference into this SAI and is available upon request by calling 1-855-754-7932 or visiting www.horizonmutualfunds.com. The financial statements have been audited by Deloitte & Touche LLP the independent registered public accounting firm for the Predecessor Fund.

This SAI provides additional information about the Fund and should be retained for future reference.

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| GENERAL INFORMATION | 1 |
| TRUST HISTORY | 1 |
| INVESTMENT RESTRICTIONS OF THE FUND | 2 |
| TEMPORARY DEFENSIVE POSITIONS | 4 |
| DESCRIPTION OF SECURITIES, OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS | 4 |
| DISCLOSURE OF PORTFOLIO HOLDINGS | 34 |
| MANAGEMENT OF THE TRUST | 35 |
| CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES | 41 |
| INVESTMENT MANAGEMENT AND OTHER SERVICES | 42 |
| ADMINISTRATOR | 43 |
| CUSTODIAN | 44 |
| TRANSFER AGENT SERVICES | 44 |
| DISTRIBUTION OF SHARES | 44 |
| SECURITIES LENDING AGENT | 44 |
| CODES OF ETHICS | 44 |
| PROXY VOTING POLICIES AND PROCEDURES | 45 |
| PORTFOLIO MANAGERS | 45 |
| BROKERAGE ALLOCATION AND OTHER PRACTICES | 48 |
| REDEMPTION OF SECURITIES BEING OFFERED | 51 |
| DISTRIBUTION PLANS | 51 |
| SHAREHOLDER SERVICES | 52 |
| DETERMINATION OF NET ASSET VALUE | 53 |
| ANTI-MONEY LAUNDERING AND CUSTOMER IDENTIFICATION PROGRAMS | 54 |
| TAXES | 55 |
| ORGANIZATION OF THE TRUST | 62 |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 63 |
| LEGAL MATTERS | 63 |
| FINANCIAL STATEMENTS | 63 |
| APPENDIX A | A-1 |
| APPENDIX B | B-1 |

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**GENERAL INFORMATION**

This Statement of Additional Information ("SAI") is meant to be read in conjunction with the prospectus for the Fund. The Fund is a separate diversified series of Horizon Fund (the "Trust"). As such, the Fund intends to meet the diversification requirements of the 1940 Act. Current 1940 Act diversification requirements require that with respect to 75% of the assets of the Fund, the Fund may not invest more than 5% of its total assets in the securities of any one issuer or own more than 10% of the outstanding voting securities of any one issuer, except cash or cash items, obligations of the U.S. government, its agencies and instrumentalities, and securities of other investment companies. As for the other 25% of the Fund's assets not subject to the limitation described above, there is no limitation on investment of these assets under the 1940 Act, so that all of such assets may be invested in securities of any one issuer. The prospectus for the Fund (the "Prospectus") incorporates this SAI by reference in its entirety. Because this SAI is not itself a prospectus, no investment in shares of the Fund should be made solely upon the information contained herein. Copies of the Prospectus and [Annual Report](https://www.sec.gov/Archives/edgar/data/1643174/000139834423002201/fp0081239-3_ncsr.htm) for the Fund may be obtained at no charge by writing or calling the Fund at the address or phone number shown above. Capitalized terms used but not defined herein have the same meanings as in the Prospectus.

**TRUST HISTORY**

The Trust is an open-end management investment company. The Trust has 29 series, including the Fund. The Trust was organized as a Delaware business trust by a Declaration of Trust filed May 21, 2015, with the Secretary of State of Delaware, and is registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940 (the "1940 Act"). As a Delaware statutory trust, the Trust is subject to Delaware law, including the Delaware Statutory Trust Act. The Delaware Statutory Trust Act provides that a shareholder of a Delaware statutory trust will be entitled to the same limitation of personal liability extended to shareholders of Delaware corporations, and the Declaration of Trust further provides that no shareholder of the Trust will be personally liable for the obligations of the Trust or of any series or class thereof except by reason of his or her own acts or conduct.

Shares of other series of the Trust are offered in separate prospectuses and SAIs. The Fund's Prospectus and this SAI are a part of the Trust's Registration Statement filed with the SEC. Copies of the Trust's complete Registration Statement may be obtained from the SEC upon payment of the prescribed fee, or may be accessed free of charge at the SEC's website at www.sec.gov. As permitted by Delaware law, the Trust's Board of Trustees (the "Board") may create additional series (and classes thereof) of the Trust and offer shares of these series and classes under the Trust at any time without the vote of shareholders.

All shares of a series will represent an equal proportionate interest in the assets held with respect to that series (subject to the liabilities held with respect to that series and such rights and preferences as may have been established and designated with respect to classes of shares of such series), and each share of a series will be equal to each other share of that series.

Shares are voted in the aggregate and not by series or class, except in matters where a separate vote is required by the 1940 Act, or when the matters affect only the interest of a particular series or class. When matters are submitted to shareholders for a vote, each shareholder is entitled to one vote for each full share owned and fractional votes for fractional shares owned.

In case of the liquidation of a series, the holders of shares of the series being liquidated are entitled to receive a distribution out of the assets, net of the liabilities, belonging to that series. Expenses attributable to any series (or class thereof) are borne by that series (or class). Any general expenses of the Trust not readily identifiable as belonging to a particular series are allocated by, or under the direction of, the Board to all applicable series (and classes thereof) in such manner and on such basis as the Board in its sole discretion deems fair and equitable.

The Fund is managed by Horizon Investments, LLC (the "Adviser" or "Horizon"). Horizon directs the day-to-day operations and the investment of assets of the Fund.

The Fund is a series of Horizon Fund and is the successor in interest to the Predecessor Fund, which was previously a separate series of Two Roads Shared Trust. In the Reorganization, the Fund acquired all of the assets and assumed all of the liabilities of the Predecessor Fund and, following the Reorganization, adopted the accounting and performance history of the Predecessor Fund for purposes of financial reporting and performance presentation.

The Predecessor Fund had substantially similar investment objective and principal investment strategies as the Fund. Accordingly, any historical information provided in this SAI for the Fund that predates the Reorganization reflects the financial, performance, and other historical information of the Predecessor Fund.

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services"), serves as the administrator, accounting agent, transfer agent, and dividend disbursing agent for the Fund. U.S. Bank, N.A. (the "Custodian") acts as the custodian for the Fund. Quasar Distributors, LLC (the "Distributor") is the distributor of the Fund's shares. Fund Services and the Custodian are affiliates.

**INVESTMENT RESTRICTIONS OF THE FUND**

**Fundamental Restrictions.** The Fund has adopted the following fundamental investment limitations, which cannot be changed without approval by holders of a majority of its outstanding voting shares. A "majority" for this purpose means the lesser of (i) 67% of the Fund's outstanding shares represented in person or by proxy at a meeting at which more than 50% of its outstanding shares are represented; or (ii) more than 50% of the Fund's outstanding shares.

Shares of the Fund will be voted separately on matters affecting the Fund, including approval of changes in the fundamental investment policies of the Fund. Except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval.

As a matter of fundamental policy, the Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Issue any class of securities senior to any other class of securities except in compliance with the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Borrow money except as permitted under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Purchase or sell real estate, or invest in real estate limited partnerships, except the Fund may, as appropriate
 and consistent with its respective investment objective, policies and other investment restrictions, buy securities of issuers that engage
 in real estate operations and securities that are secured by interests in real estate (including shares of real estate mortgage investment
 conduits, REITs, mortgage pass-through securities, mortgage-backed securities and collateralized mortgage obligations) and may hold and
 sell real estate acquired as a result of ownership of such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Purchase or sell commodities or contracts thereon, except that the Fund may purchase and sell options, forward
 contracts, futures contracts, including those relating to indices, and options on futures contracts or indices and may purchase interests
 in equity securities issued by companies (including, without limitation, investment companies) that hold or invest in one or more commodities
 as their sole or principal business activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Underwrite securities issued by other persons, except to the extent that the Fund may be deemed to be an underwriter,
 within the meaning of the Securities Act of 1933, as amended (the "1933 Act"), in connection with the purchase of securities
 directly from an issuer in accordance with the Fund's investment objective, policies and restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Make loans, except that the Fund may, in accordance with its investment objective, policies and restrictions:
 (i) invest in all or a portion of an issue of publicly issued or privately placed bonds, debentures, notes, other debt securities and
 loan participation interests for investment purposes; (ii) purchase money market securities and enter into repurchase agreements; and
 (iii) lend its portfolio securities in an amount not exceeding one-third of the value of the Fund's total assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Invest 25% or more of the value of its total assets in any one industry or group of industries. This limitation
 does not apply to securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities or repurchase agreements secured
 by U.S. Government securities.

**Non-Fundamental Restrictions.** The following investment limitations are not fundamental and may be changed by the Board without shareholder approval. As a matter of non-fundamental policy, the Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Invest in portfolio companies for the purpose of acquiring or exercising control of such companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Mortgage, pledge, or hypothecate in any other manner, or transfer as security for indebtedness any security
 owned by the Fund, except as may be necessary in connection with permissible borrowings and then only if such mortgaging, pledging or
 hypothecating does not exceed 33 1/3% of the Fund's total assets. Collateral arrangements with respect to margin, option and other
 risk management and when-issued and forward commitment transactions are not deemed to be pledges or other encumbrances for purposes of
 this restriction.

The Fund has adopted a policy that requires the Fund to provide shareholders with at least 60 days notice prior to any change in its policy to invest at least 80% of its net assets, including any borrowings for investment purposes, in a diversified portfolio of fixed income instruments.

The foregoing fundamental and non-fundamental restrictions supplement the policies and limitations set forth in the Prospectus. Unless otherwise noted, whenever a restriction states a maximum percentage of the Fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitations will be determined immediately after and as a result of the Fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Fund's investment policies and limitations.

With respect to the above fundamental investment restriction on borrowing money, the entry into options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices shall not constitute borrowing. With respect to the above fundamental investment restriction on making loans, investment in U.S. Government obligations, short-term commercial paper, certificates of deposit, bankers' acceptances and repurchase agreements shall not be deemed to be the making of a loan.

With respect to the above fundamental investment restriction on purchasing securities on margin, short sales of securities, forward contracts or similar trades requiring margin deposits or other use of a margin account are not considered purchasing securities on margin.

With respect to the above fundamental investment restriction on concentration in a particular industry or group of industries, securities of the U.S. Government (including its agencies and instrumentalities), tax-exempt securities of state or municipal governments and their political subdivisions and investments in other registered investment companies are not considered to be issued by members of any industry. If the Fund invests in a revenue bond tied to a particular industry, the Fund will consider such investment to be issued by a member of the industry to which the revenue bond is tied.

The 1940 Act presently allows the Fund to borrow from any bank (including pledging, mortgaging or hypothecating assets) in an amount up to 33⅓% of its total assets and the Fund will, to the extent necessary, reduce its existing borrowings (within 3 days, excluding Sundays and holidays) to comply with the provisions of the 1940 Act.

**TEMPORARY DEFENSIVE POSITIONS**

The Fund may, from time to time, take temporary defensive positions that are inconsistent with its principal investment objective or strategies in an attempt to respond to adverse market, economic, political or other conditions or when the Adviser believes it is otherwise appropriate to do so. When this happens, the Fund may increase temporarily its investment in short-term securities such as money market funds, or hold cash, without regard to the Fund's investment restrictions, policies or normal investment emphasis. During such a period, the Fund could be unable to achieve its investment objectives. In addition, this defensive investment strategy may cause frequent trading and high portfolio turnover ratios. High transaction costs could result from more frequent trading. Such trading may also result in realization of net short-term capital gains upon which you may be taxed at ordinary tax rates when distributed from the Fund.

**DESCRIPTION OF SECURITIES, OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS**

The Fund may, from time to time, take temporary defensive positions that are inconsistent with its principal investment objective or strategies in order to respond to adverse market, economic, political, or other conditions, or when the Adviser determines that such action is otherwise appropriate. During such periods, the Fund may increase its investment in short-term instruments, such as money market funds, cash equivalents, or may hold cash, without regard to its normal investment policies or emphasis. While taking a temporary defensive position, the Fund may not be able to achieve its investment objective. This approach may also result in more frequent trading and higher portfolio turnover, which can lead to increased transaction costs and the realization and distribution of net short-term capital gains, which are taxable to shareholders at ordinary income rates.

**CYBERSECURITY**

As technology becomes more integrated into the Fund's operations, the Fund faces increased operational risks associated with cybersecurity breaches. A cybersecurity breach refers to both intentional and unintentional events that may result in the loss of proprietary information, data corruption, or the disruption of the Fund's operational capacity. Such incidents could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures, and/or financial loss. Cybersecurity threats may arise from unauthorized access to the Fund's digital information systems (such as through hacking or malicious software), as well as from external attacks, such as denial-of-service attacks that make network resources unavailable to intended users. Because the Fund relies on third-party service providers, including administrators, transfer agents, custodians, and others, cybersecurity breaches at those service providers may subject the Fund to many of the same risks as a direct attack. The same is true for cybersecurity incidents affecting issuers in which the Fund invests. While the Fund and its third-party service providers have implemented information technology and data security programs, as well as business continuity plans and other systems designed to prevent losses and mitigate cybersecurity risks, there are inherent limitations in such programs and systems. These limitations include the possibility that certain risks have not been identified, or that cyber-attacks may be highly sophisticated or otherwise evade detection and prevention measures. As a result, there can be no assurance that the Fund's or its service providers' policies, procedures, and controls will be sufficient to prevent or mitigate all cybersecurity risks.

**DEBT AND OTHER FIXED INCOME INSTRUMENTS**

**General.** Fixed income and debt investments bear certain risks, including credit risk, or the ability of an issuer to pay interest and principal as they become due. Generally, higher yielding fixed income and debt investments are subject to more credit risk than lower yielding fixed income and debt investments. Such investments are also subject to interest rate risk, which refers to the fluctuations in value of fixed income securities resulting from the inverse relationship between the market value of outstanding fixed income securities and changes in interest rates. An increase in interest rates will generally reduce the market value of fixed income investments and a decline in interest rates will tend to increase their value.

Call risk is the risk that an issuer will pay principal on an obligation earlier than scheduled or expected, which would accelerate cash flows from, and shorten the average life of, the security. Bonds are typically called when interest rates have declined. In the event of a bond being called, the Adviser may have to reinvest the proceeds in lower yielding securities to the detriment of the Fund.

Extension risk is the risk that an issuer may pay principal on an obligation slower than expected, having the effect of extending the average life and duration of the obligation. This typically happens when interest rates have increased.

Prepayment risk is the risk that, when interest rates decline, fixed income securities with stated interest rates may have their principal paid earlier than expected. This may result in the Fund having to reinvest that money at lower prevailing interest rates, which can reduce the returns of the Fund.

A number of factors, including changes in a central bank's monetary policies or general improvements in the economy, may cause interest rates to rise. Fixed income and debt securities with longer durations are more sensitive to interest rate changes than securities with shorter durations, making them more volatile. This means their prices are more likely to experience a considerable reduction in response to a rise in interest rates.

**Adjustable Rate Securities.** Adjustable rate securities (i.e., variable rate and floating rate instruments) are securities that have interest rates that are adjusted periodically, according to an interest rate index or other set formula. The maturity of some adjustable rate securities may be shortened under certain special conditions described more fully below.

Floating rate instruments have interest rate reset provisions similar to those for variable rate instruments and may be subject to demand features like those for variable rate instruments. The interest rate is adjusted, periodically (e.g., daily, monthly, semi-annually), based on the prevailing interest rate in the marketplace. The interest rate on floating rate securities is ordinarily determined by reference to the 90-day U.S. Treasury bill rate, the rate of return on commercial paper or bank certificates of deposit or an index of short-term interest rates. The maturity of a floating rate instrument is considered to be the period remaining until the principal amount can be recovered through demand.

Resets of the interest rates of adjustable rate securities can occur at predetermined intervals or whenever changes in the applicable benchmark index occur. Changes in the benchmark index and the interest rate may be difficult to predict and may increase the volatility of the price, and have adverse effects on the value of the adjustable rate securities.

**Adjustable Rate Mortgage Securities.** Adjustable-rate mortgage securities ("ARMS") bear interest at a rate determined by reference to a predetermined interest rate or index. The interest rates paid on the ARMS in which the Fund may invest generally are readjusted or reset at intervals of one year or less to an increment over some predetermined interest rate index. There are two main categories of indices: those based on U.S. Treasury securities and those derived from a calculated measure, such as a cost of funds index or a moving average of mortgage rates. Commonly utilized indices include the one-year and five-year constant maturity Treasury Note rates, the three-month Treasury Bill rate, the 180-day Treasury Bill rate, rates on longer-term Treasury securities, the National Median Cost of Fund's, the one-month or three-month London Interbank Offered Rate (LIBOR), the Secured Overnight Financing Rate (SOFR), the prime rate of a specific bank, or commercial paper rates. Some indices, such as the one-year constant maturity Treasury Note rate, closely mirror changes in market interest rate levels. Others may lag changes in market rate levels and be more or less volatile.

The underlying mortgages which collateralize ARMs may be fixed-rate mortgages or adjustable-rate mortgages. ARMS secured by fixed-rate mortgages generally have lifetime caps on the coupon rates of the securities. The adjustable-rate mortgages that secure ARMS will frequently have caps and floors that limit the maximum amount by which the interest rate or the monthly principal and interest payments on the mortgages may increase. These payment caps may result in negative amortization. The value of mortgage securities may be affected if market interest rates rise or fall faster and farther than the allowable caps or floors on the underlying residential mortgage loans. Additionally, even though the interest rates on the underlying residential mortgages are adjustable, amortization and prepayments may occur, thereby causing the effective maturities of mortgage securities to be shorter than the maturities stated in the underlying mortgages.

**Below-Investment-Grade Debt Securities.** When investing in fixed income and debt securities, the Fund may purchase securities regardless of their rating, including debt securities that are rated below "investment grade" by Standard and Poor's ("S&P") or Moody's Investors Services, Inc. ("Moody's") or, if unrated, are deemed by the Adviser to be of comparable quality. Securities rated less than Baa by Moody's or BBB by S&P are classified as below investment grade securities and are commonly referred to as "junk bonds" or "high yield" securities. Debt rated BB, B, CCC, CC and C and debt rated Ba, B, Caa, Ca, and C is regarded by S&P and Moody's, respectively, on balance, as high risk and predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. For S&P, BB indicates the lowest degree of speculation and C the highest degree of speculation. For Moody's, Ba indicates the lowest degree of speculation and C the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. Similarly, debt rated Ba or BB and below is regarded by the relevant rating agency as speculative. Debt rated C by Moody's or S&P is the lowest rated debt that is not in default as to principal or interest, and such issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Such securities are also generally considered to be subject to greater risk than securities with higher ratings with regard to a deterioration of general economic conditions.

The use of credit to evaluate high yield securities can involve certain risks. For example, ratings of debt securities represent the rating agency's opinion regarding the debt security's quality and are not a guarantee of quality. In addition, rating agencies attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Also, rating agencies may fail to make timely changes in credit ratings to reflect events occurring since the security was last rated. The achievement of the Fund's investment objective may be more dependent on the Adviser's own credit analysis than might be the case for a fund which invests in higher quality bonds, and analysis of the creditworthiness of issuers of debt securities that are high yield may be more complex than for issuers of higher quality debt securities. The Fund may retain a security whose rating has been changed. The market values of lower quality debt securities tend to reflect individual developments of the issuer to a greater extent than do higher quality securities, which react primarily to fluctuations in the general level of interest rates. In addition, while investments in lower quality debt securities generally provide greater income and increased opportunity for capital appreciation than investments in higher quality debt securities, lower quality debt securities tend to be more sensitive to economic conditions and generally have more volatile prices and principal and income risk than higher quality securities. Issuers of lower quality securities are often highly leveraged and may not have available to them more traditional methods of financing, and the prices of high yield securities have been found to be more sensitive to adverse economic downturns or individual corporate developments. For example, during an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of lower quality securities may experience financial stress, and during such periods, such issuers may not have sufficient revenues to meet their interest payment obligations. If an issuer of high yield securities defaults, in addition to risking payment of all or a portion of interest and principal, by investing in such securities the Fund may incur additional expenses to obtain recovery. In addition, the issuer's ability to service debt obligations may also be adversely affected by specific developments affecting the issuer, such as the issuer's inability to meet specific projected business forecasts or the unavailability of additional financing. Similarly, certain emerging market governments that issue lower quality debt securities are among the largest debtors to commercial banks, foreign governments and supranational organizations such as the World Bank and may not be able or willing to make principal and/or interest repayments as they come due. The risk of loss due to default by the issuer is significantly greater for the holders of lower quality securities because such securities are generally unsecured and are often subordinated to other creditors of the issuer. Lower quality debt securities frequently have call or buy-back features, which would permit an issuer to call or repurchase the security from the Fund. In addition, the Fund may have difficulty disposing of lower quality securities because the secondary market on which high yield securities are traded may be less liquid than the market for higher grade securities. There may be no established retail secondary market for many of these securities, and there may be at times a limited number of dealers or institutional investors that may be willing to purchase such securities. Less liquidity in the secondary trading market could adversely affect the price at which the Fund could sell a high yield security, may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing the Fund's portfolio (e.g., such valuation may require more research, and elements of judgment may play a greater role in the valuation because there is less reliable, objective data available), and could adversely affect the daily det asset value ("NAV") of the Fund's shares. The Fund may also acquire lower quality debt securities during an initial underwriting or which are sold without registration under applicable securities laws. Such securities involve special considerations and risks.

In addition to the foregoing, factors that could have an adverse effect on the market value of lower quality debt securities in which the Fund may invest, include: (i) potential adverse publicity, (ii) heightened sensitivity to general economic or political conditions, and (iii) the likely adverse impact of a major economic recession. The Fund may also incur additional expenses to the extent the Fund is required to seek recovery upon a default in the payment of principal or interest on its portfolio holdings, and the Fund may have limited legal recourse in the event of a default. Debt securities issued by governments in emerging markets can differ from debt obligations issued by private entities in that remedies for defaults generally must be pursued in the courts of the defaulting government, and legal recourse is therefore somewhat diminished. Political conditions, in terms of a government's willingness to meet the terms of its debt obligations, also are of considerable significance. There can be no assurance that the holders of commercial bank debt may not contest payments to the holders of debt securities issued by governments in emerging markets in the event of default by the governments under commercial bank loan agreements. The Adviser attempts to minimize the speculative risks associated with investments in lower quality securities through credit analysis and monitoring current trends in interest rates, political developments and other factors. Nonetheless, investors should carefully review the investment objective and policies of the Fund and consider their ability to assume the investment risks involved before making an investment. The Fund may also invest in unrated debt securities. Unrated debt securities, while not necessarily of lower quality than rated securities, may not have as broad a market. Because of the size and perceived demand for an issue, among other factors, certain issuers may decide not to pay the cost of obtaining a rating for their bonds.

**Certificates of Deposit and Bankers' Acceptances.** The Fund may invest in certificates of deposit and bankers' acceptances, which are considered to be short-term money market instruments.

Certificates of deposit are unsecured, interest bearing receipts issued by a depository institution in exchange for the deposit of funds. The issuer agrees to pay the amount deposited plus interest to the bearer of the receipt on the date specified on the certificate. The certificate usually can be traded in the secondary market prior to maturity. Bankers' acceptances typically arise from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then "accepted" by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an earning asset or it may be sold in the secondary market at the going rate of discount for a specific maturity. Although maturities for acceptances can be as long as 270 days, most acceptances have maturities of six months or less.

**Commercial Paper.** Commercial paper consists of short-term (usually from 1 to 270 days) unsecured promissory notes issued by banks, corporations or other borrowers in order to finance their current operations. Commercial Paper is typically sold on a discounted basis rather than as an interest-bearing instrument.

**Loans and Other Direct Debt Instruments.** Direct debt instruments are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. These loans may bear fixed or floating rates. Syndicated loans have generally been arranged through private negotiations between a corporate borrower and one or more financial institutions.

Purchasers of loans and other forms of direct indebtedness depend primarily upon the creditworthiness of the borrower for payment of principal and interest. Direct debt instruments may not be rated by any nationally recognized rating service. If the Fund does not receive scheduled interest or principal payments on such indebtedness, the Fund's share price and yield could be adversely affected. Loans that are fully secured offer the Fund more protections than an unsecured loan in the event of non-payment of scheduled interest or principal. However, there is no assurance that the liquidations of collateral from a secured loan would satisfy the borrower's obligation, or that the collateral could be liquidated. Indebtedness of borrowers whose creditworthiness is poor involves substantially greater risks and may be highly speculative. Borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. Direct indebtedness of developing countries also involves a risk that the governmental entities responsible for the repayment of the debt may be unable, or unwilling, to pay interest and repay principal when due. Further, obligations of sovereigns and their affiliates may be difficult or impossible to enforce.

Investments in loans through direct assignment of a financial institution's interests with respect to a loan may involve additional risks to the Fund, and in certain cases, the rights and obligations acquired by the Fund through the purchase of an assignment may differ from, and be more limited than, those held by the assigning selling institution. For example, if a loan is foreclosed, the Fund could become part owner of any collateral, and would bear the costs and liabilities associated with owning and disposing of the collateral. In addition, it is conceivable that under emerging legal theories of lender liability, the Fund could be held liable as a co-lender. In certain cases, the rights and obligations acquired by the Fund through the purchase of an assignment may differ from, and be more limited than, those held by the assigning selling institution. Assignments are sold strictly without recourse to the selling institutions, and the selling institutions will generally make no representations or warranties to the Fund about the underlying loan, the borrowers, the documentation of the loans or any collateral securing the loans.

With respect to loan participations, the Fund has the right to receive payments of principal, interest and any fees to which they are entitled only from the lender selling the loan participation and only upon receipt by the lender of the payments from the borrower. The Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan in which the Fund has purchased a loan participation, nor any rights of set-off against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the loan participation. Thus, the Fund assumes the credit risk of both the borrower and the lender that is selling the loan participation. In addition, in connection with purchasing loan participations, the Fund generally will have no role in terms of negotiating or effecting amendments, waivers and consents with respect to the loans underlying the loan participations. In the event of the insolvency of the lender, the Fund may be treated as a general creditor of the lender and may not benefit from any set-off between the lender and the borrower.

Investments in loan participations and assignments involve additional risks, including the risk of nonpayment of principal and interest by the borrower, the risk that any loan collateral may become impaired and that the Fund may obtain less than the full value for the loan interests sold because they may be illiquid. Purchasers of loans depend primarily upon the creditworthiness of the borrower for payment of interest and repayment of principal. If scheduled interest or principal payments are not made, the value of the instrument may be adversely affected. Loan participations may also have the risk that the counterparty to the loan participation defaults or becomes insolvent.

Direct debt instruments may also involve a risk of insolvency of the lending bank or other intermediary. Direct debt instruments that are not in the form of securities may offer less legal protection to the Fund in the event of fraud or misrepresentation. In the absence of definitive regulatory guidance, the Fund relies on the Adviser's research in an attempt to avoid situations where fraud or misrepresentation could adversely affect the Fund.

A syndicated loan is often administered by a bank or other financial institution that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. Unless, under the terms of the loan or other indebtedness, the Fund has direct recourse against the borrower, the Fund may have to rely on the agent to apply appropriate credit remedies against a borrower. If assets held by the agent for the benefit of the Fund were determined to be subject to the claims of the agent's general creditors, the Fund might incur certain costs and delays in realizing payment on the loan or loan participation and could suffer a loss of principal or interest.

Interests in loans are also subject to additional liquidity risks. Loans are generally subject to legal or contractual restrictions on resale. Loans are not currently listed on any securities exchange or automatic quotation system, but are traded by banks and other institutional investors engaged in loan syndication. As a result, no active market may exist for some loans, and to the extent a secondary market exists for other loans, such market may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. Consequently, the Fund may have difficulty disposing of loan assignments or loan participations in response to a specific economic event such as deterioration in the creditworthiness of the borrower, which can result in a loss. In such market situations, it may be more difficult for the Fund to assign a value to loan assignments or loan participations when valuing the Fund's securities and calculating its net asset value.

The loans acquired by the Fund may be unsecured or undersecured. In addition, in the event of the insolvency of the selling institution, under the U.S. laws, the Fund may be treated as a general creditor of such selling institution, and may not have any exclusive or senior claim with respect to the selling institution's interest in, or the collateral with respect to, a secured loan. Consequently, the Fund may be subject to the credit risk of the selling institution as well as of the borrower. Certain of the secured loans or loan participations may be governed by the law of a jurisdiction other than the United States, which may present additional risks as regards the characterization under such laws of such participation in the event of the insolvency of the selling institution or the borrower.

Direct indebtedness purchased by the Fund may include letters of credit, revolving credit facilities, or other standby financing commitments obligating the Fund to pay additional cash on demand. These commitments may have the effect of requiring the Fund to increase its investment in a borrower at a time when it would not otherwise have done so, even if the borrower's condition makes it unlikely that the amount will ever be repaid. The Fund will typically set aside appropriate liquid assets in a custodial account to cover its potential obligations under standby financing commitments.

The Fund limits the amount of total assets that it will invest in any one issuer or, in issuers within the same industry. For purposes of these limitations, the Fund generally will treat the borrower as the "issuer" of indebtedness held by the Fund. In the case of loan participations where a bank or other lending institution serves as financial intermediary between the Fund and the borrower, if the participation does not shift to the Fund the direct debtor-creditor relationship with the borrower, SEC interpretations require that the Fund, in appropriate circumstances, to treat both the lending bank or other lending institution and the borrower as "issuers" for these purposes. Treating a financial intermediary as an issuer of indebtedness may restrict the Fund's ability to invest in indebtedness related to a single financial intermediary, or a group of intermediaries engaged in the same industry, even if the underlying borrowers represent many different companies and industries.

**Maturity of Debt Securities.** The maturity of debt securities may be considered long (10 years or more), intermediate (3 to 10 years), or short-term (less than 3 years). In general, the principal values of longer-term securities fluctuate more widely in response to changes in interest rates than those of shorter-term securities, providing greater opportunity for capital gain or risk of capital loss. A decline in interest rates usually produces an increase in the value of debt securities, while an increase in interest rates generally reduces their value.

**Mortgage Pass-Through Securities.** Interests in pools of mortgage pass-through securities differ from other forms of debt securities (which normally provide periodic payments of interest in fixed amounts and the payment of principal in a lump sum at maturity or on specified call dates). Instead, mortgage pass-through securities represent undivided ownership interests in pools of mortgages and provide monthly payments consisting of both interest and principal payments. In effect, these payments are a "pass-through" of the monthly payments made by the individual borrowers on the underlying residential mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Unscheduled payments of principal may be made if the underlying mortgage loans are repaid or refinanced or the underlying properties are foreclosed, thereby shortening the securities' weighted average life. Some mortgage pass-through securities (such as securities guaranteed by the Government National Mortgage Association ("GNMA")) are described as "modified pass-through securities". These securities entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of certain fees, on the scheduled payment dates regardless of whether the mortgagor actually makes the payment.

The principal governmental guarantor of mortgage pass-through securities is GNMA. GNMA is authorized to guarantee, with the full faith and credit of the U.S. Treasury, the timely payment of principal and interest (but not as to price and yield) on securities issued by lending institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of mortgage loans. These mortgage loans are either insured by the Federal Housing Administration or guaranteed by the Veterans Administration. A "pool" or group of such mortgage loans is assembled and after being approved by GNMA, is offered to investors through securities dealers.

Government-related guarantors of mortgage pass-through securities (i.e., not backed by the full faith and credit of the U.S. Treasury) include the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA is a government-sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases conventional (i.e., not insured or guaranteed by any government agency) residential mortgages from a list of approved sellers/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Mortgage pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the U.S. Treasury.

Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage pass-through securities.

Mortgage pass-through certificates are subject to more rapid prepayment than their stated maturity date would indicate; their rate of prepayment tends to accelerate during periods of declining interest rates or increased property transfers and, as a result, the proceeds from such prepayments may be reinvested in instruments that have lower yields. The impact of prepayments on the price of a security may be difficult to predict and may increase the volatility of the price.

**Repurchase Agreements.** A repurchase agreement is an instrument under which the investor (such as the Fund) acquires ownership of a security (known as the "underlying security") and simultaneously commits to resell that security to the seller (i.e., a bank or primary dealer) at a mutually agreed upon price on an agreed upon date (usually within seven days of purchase), thereby determining the yield during the term of the agreement. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or date of maturity of the purchased security. This results in a fixed rate of return insulated from market fluctuations during such period, unless the seller defaults on its repurchase obligations. Repurchase agreements involve certain risks not associated with direct investments in the underlying securities. In the event of a default or bankruptcy by the seller, the Fund will typically seek to liquidate such collateral. The exercise of the Fund right to liquidate such collateral could involve certain costs or delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the repurchase price, the Fund could suffer a loss.

Repurchase agreements are considered to be loans by an investment company under the 1940 Act. The Fund will only enter into repurchase agreements in accordance with policies and procedures approved by the Board and adopted by the Trust on behalf of the Fund. Repurchase agreements usually are for short periods, often under one week, and will not be entered into by the Fund for a duration of more than seven days if, as a result, more than 15% of the NAV of the Fund would be invested in such agreements or other securities which are illiquid.

The Fund will assure that the amount of collateral with respect to any repurchase agreement is adequate. As with a true extension of credit, however, there is risk of delay in recovery or the possibility of inadequacy of the collateral should the seller of the repurchase agreement fail financially. In addition, the Fund could incur costs in connection with the disposition of the collateral if the seller were to default. The Fund will enter into repurchase agreements only with sellers deemed to be creditworthy by, or pursuant to guidelines established by, the Board of Trustees of the Trust and only when the economic benefit to the Fund is believed to justify the attendant risks. The Fund has adopted standards for the sellers with whom they will enter into repurchase agreements. The Board of Trustees of the Trust believe these standards are designed to reasonably assure that such sellers present no serious risk of becoming involved in bankruptcy proceedings within the time frame contemplated by the repurchase agreement.

The use of repurchase agreements involves certain risks. For example, if the seller of the agreements defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, the Fund may incur a loss upon disposition of them. If the seller of the agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a bankruptcy court may determine that the underlying securities are collateral not within the control of the Fund and therefore subject to sale by the trustee in bankruptcy. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying securities.

**United States Government Obligations.** United States Government obligations consist of various types of marketable securities issued by the United States Treasury, i.e., bills, notes and bonds. Such securities are direct obligations of the United States Government and its agencies and instrumentalities that issue or guarantee securities, such as the Federal Home Loan Banks, FNMA and the Student Loan Marketing Association, and differ mainly in the length of their maturity. Treasury bills, the most frequently issued marketable government security, have a maturity of up to one year and are issued on a discount basis.

Except for U.S. Treasury securities, obligations of U.S. Government agencies and instrumentalities may or may not be supported by the full faith and credit of the United States. Some, such as those of the Federal Home Loan Banks, are backed by the right of the issuer to borrow from the U.S. Treasury, others by discretionary authority of the U.S. Government to purchase the agencies' obligations, while still others, such as the Student Loan Marketing Association, are supported only by the credit of the instrumentality. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment.

**United States Government Agency Securities.** United States Government agency securities consist of debt securities issued by agencies and instrumentalities of the United States government, including the various types of instruments currently outstanding or which may be offered in the future. Agencies include, among others, GNMA, Farmer's Home Administration, Export-Import Bank of the United States, Maritime Administration, and General Services Administration. Instrumentalities include, for example, each of the Federal Home Loan Banks, the National Bank for Cooperatives, FHLMC, the Farm Credit Banks, FNMA, and the United States Postal Service. These securities are either: (i) backed by the full faith and credit of the United States Government (e.g., United States Treasury Bills); (ii) guaranteed by the United States Treasury (e.g., GNMA mortgage-backed securities); (iii) supported by the issuing agency's or instrumentality's right to borrow from the United States Treasury (e.g., FNMA Discount Notes); or (iv) supported only by the issuing agency's or instrumentality's own credit (e.g., Tennessee Valley Association). No assurance can be given that the U.S. government will provide financial support to U.S. government agencies or instrumentalities that are not supported by the full faith and credit of the U.S. government, since the U.S. government is not obligated to do so by law. The guarantee of the U.S. government does not extend to the yield or value of the Fund's shares.

**Warrants.** Warrants are options to purchase equity securities at a specific price and are valid for a specific period of time. They do not represent ownership of the securities, but only the right to buy them. Warrants are typically issued with preferred stock or bonds. The price of the warrant usually represents a premium over the applicable market value of the common stock at the time of the warrant's issuance. Investments in warrants involve certain risks, including the possible lack of a liquid market for the resale of the warrants, potential price fluctuations due to adverse market conditions or other factors and failure of the price of the common stock to rise. If the warrant is not exercised within the specified time period, it becomes worthless. Warrants may be more speculative than other types of investments in that they have no voting rights, pay no dividends and have no rights with respect to the assets of the corporation issuing them. Warrants differ from call options in that warrants are issued by the issuer of the security, which may be purchased on their exercise, whereas call options may be written or issued by anyone. The prices of warrants may not necessarily move parallel to the prices of the underlying securities.

**DERIVATIVE INSTRUMENTS**

The Fund's derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets of the Fund, which creates the possibility that the loss on such instruments may be greater than the gain in the value of the underlying assets in the Fund's portfolios; the loss of principal; the possible default of the other party to the transaction; and illiquidity of the derivative investments. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. In addition, in the event of the insolvency of a counterparty to a derivative transaction, the derivative contract would typically be terminated at its fair market value. If the Fund is owed this fair market value in the termination of the derivative contract and its claim is unsecured, the Fund will be treated as a general creditor of such counterparty, and will not have any claim with respect to the underlying security.

Certain of the derivative investments in which the Fund may invest may, in certain circumstances, give rise to a form of financial leverage, which may magnify the risk of owning such instruments. The ability to successfully use derivative investments depends on the ability of the Adviser to predict pertinent market movements, which cannot be assured. In addition, amounts paid by the Fund as premiums and cash or other assets held in margin accounts with respect to the Fund's derivative investments would not be available to the Fund for other investment purposes, which may result in lost opportunities for gain.

Over-the-counter ("OTC") derivatives may be more difficult to purchase, sell or value than other investments. Although both OTC and exchange-traded derivatives markets may experience a lack of liquidity, OTC non-standardized derivative transactions are generally less liquid than OTC cleared and exchange-traded instruments. The illiquidity of the derivatives markets may be due to various factors, including congestion, disorderly markets, limitations on deliverable supplies, the participation of speculators, government regulation and intervention, and technical and operational or system failures. In addition, the liquidity of a secondary market in an exchange-traded derivative contract may be adversely affected by "daily price fluctuation limits" established by the exchanges which limit the amount of fluctuation in an exchange-traded contract price during a single trading day. Once the daily limit has been reached in the contract, no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open positions. Prices have in the past moved beyond the daily limit on a number of consecutive trading days. If it is not possible to close an open derivative position entered into by the Fund, the Fund would continue to be required to make cash payments of variation (or mark-to-market) margin in the event of adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell portfolio securities to meet variation margin requirements at a time when it may be disadvantageous to do so. The absence of liquidity may also make it more difficult for the Fund to ascertain a market value for such instruments. The inability to close derivatives transactions positions also could have an adverse impact on the Fund's abilities to effectively hedge their portfolios. OTC derivatives that are not cleared are also subject to counterparty risk, which is the risk that the other party to the contract will not fulfill its contractual obligation to complete the transaction with the Fund. If a counterparty were to default on its obligations, the Fund contractual remedies against such counterparty may be subject to bankruptcy and insolvency laws, which could affect the Fund's rights as a creditor *(e.g.*, the Fund may not receive the net amount of payments that it is contractually entitled to receive). In addition, the use of certain derivatives may cause the Fund to realize higher amounts of income or short-term capital gains (generally taxed at ordinary income tax rates).

**FOREIGN SECURITIES**

**Exposure to Foreign Markets.** Investing in foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations involves certain considerations and significant risks that are not typically associated with investing in U.S. investments. The value of securities denominated in foreign currencies, and of dividends and interest paid with respect to such securities will fluctuate based on the relative strength of the U.S. dollar.

There may be less publicly available information about foreign securities, issuers and countries than is available about U.S. government securities and securities of domestic issuers. Foreign companies generally are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to domestic companies. There may also be less government supervision and regulation of foreign securities exchanges, brokers and listed companies than exists in the United States. Securities of some foreign companies are less liquid and their prices may be more volatile than securities of comparable domestic companies. The Fund's interest and dividends from foreign issuers as well as gains or proceeds realized from the sale or other disposition of international securities may be subject to foreign. withholding and other foreign taxes, which may decrease the net return on such investments as compared to dividends and interest paid to the Fund by domestic companies or the U.S. Government and thereby reduce the Fund's net investment income.

Currency exchange rates may fluctuate significantly over short periods and can be subject to unpredictable change based on such factors as political developments and currency controls by foreign governments. Decreases in the value of currencies of the foreign countries in which the Fund invests relative to the U.S. dollar will result in a corresponding decrease in the U.S. dollar value of the Fund's assets denominated in those currencies (and possibly a corresponding increase in the amount of securities required to be liquidated to meet distribution requirements). Conversely, increases in the value of currencies of the foreign countries in which the Fund invests relative to the U.S. dollar will result in a corresponding increase in the U.S. dollar value of the Fund's assets (and possibly a corresponding decrease in the amount of securities to be liquidated). Because the Fund may invest in securities denominated in foreign currencies, it may seek to hedge foreign currency risks by engaging in foreign currency exchange transactions. These may include buying or selling foreign currencies on a spot basis, entering into foreign currency forward contracts, and buying and selling foreign currency options, foreign currency futures, and options on foreign currency futures. These activities may constitute "derivatives" transactions.

The Fund may invest in issuers domiciled in "emerging markets", or those countries determined by the Adviser to have developing or emerging economies and markets. Emerging market investing can have more risks than investing in developed foreign markets. For example, governments of developing and emerging market countries may be more unstable as compared to more developed countries. Also, currency values may fluctuate more in developing or emerging markets, and many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. In addition, economies in emerging markets generally are heavily dependent upon international trade and, accordingly, have been and continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. The securities markets of developing and emerging countries are substantially smaller, less developed, less liquid and more volatile than the securities markets of the United States and other more developed countries, and such countries may have less developed legal and accounting systems. It may be more difficult to sell securities at acceptable prices and security prices may be more volatile than in countries with more mature markets.

Further, brokerage commissions, custodial services and other costs relating to investment in foreign markets generally are more expensive than in the United States, particularly with respect to emerging markets. In addition, some emerging market countries impose transfer taxes or fees on a capital market transaction. Some currencies in emerging markets may have been devalued significantly against the U.S. Dollar. For these and other reasons, the prices of securities in foreign markets can fluctuate more significantly than the prices of securities of companies in developed countries.

Foreign investments involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments, and may be affected by actions of foreign governments adverse to the interests of U.S. investors. Such actions may include the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on foreign ownership of local companies generally, restrictions on the ability to repatriate investment income or constraints on currency exchange, or other government intervention. There is no assurance that the Adviser will be able to anticipate these potential events or counter their effects. These risks are magnified for investments in developing countries, which may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. The less developed the country, the greater effect these risks may have on the Fund.

Economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Foreign markets may offer less protection to investors than U.S. markets. It is anticipated that in most cases the best available market for foreign securities will be on an exchange or in over-the-counter markets located outside the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. issuers. Foreign security trading practices, including those involving securities settlement where Fund assets may be released prior to receipt of payment, may result in increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer, and may involve substantial delays. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions and custodial costs, are generally higher than for U.S. investors. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed companies than in the United States. It may also be difficult to enforce legal rights in foreign countries. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to U.S. issuers.

Some foreign securities impose restrictions on transfer within the United States or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depositary Receipts ("ADRs"), as well as other "hybrid" forms of ADRs, including European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs"), are certificates evidencing ownership of shares of a foreign issuer. ADRs typically are issued by a U.S. bank or trust company, evidence ownership of underlying securities issued by a foreign company, and are designed for use in U.S. securities markets; EDRs are issued by European financial institutions and typically trade in Europe; and GDRs are issued by European financial institutions and typically trade in both Europe and the United States. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. These risks include foreign exchange risk as well as the political and economic risks of the underlying issuer's country.

Investments in European securities are subject to the risks of European countries, which can be significantly affected by the actions of their own individual governments as well as the actions of other European institutions, such as the European Union ("EU"), the European Economic and Monetary Union ("EMU") and the European Central Bank. The EU is an intergovernmental and supranational union consisting of 27 member states. One of the key responsibilities of the EU is to create and administer a unified trade policy. The member states created the EMU, which established different stages and commitments that member states need to follow to achieve greater economic policy coordination and monetary cooperation. Member states relinquish their monetary control to the European Central Bank and use a single unified currency, the euro. Investments in Europe are also subject to currency risks. Further, because many countries are dependent on foreign exports, any fluctuations in the euro exchange rate could have a negative effect on an issuer's profitability and performance. In addition, the EU has been extending its influence to the east as it has accepted several new Eastern European countries as members. Some of the new members remain burdened by the inherited inefficiencies of centrally planned economies. Additionally, these countries are dependent on Western Europe for trade and credit. The current and future status of the EU continues to be the subject of political and regulatory controversy, with widely differing views both within and between member countries. Further, the European financial markets have experienced uncertainty over the past few years, largely because of concerns about rising government debt levels and increased budget deficits. Political and regulatory responses to address structural and policy issues have created even greater instability throughout the region. The high levels of public debt increases the likelihood that certain European issuers will either default or restructure their debt obligations, which would have a negative effect on asset values. The use of austerity measures in countries such as Spain, Italy, Greece, Portugal and Ireland during times in which the eurozone has high levels of unemployment has limited economic growth. European countries can be adversely affected by the tight fiscal and monetary controls that the EMU requires its members to comply with.

Investments in emerging markets can be subject to a number of types of taxes that vary by country, change frequently, and are sometimes defined by custom rather than written regulation. Emerging countries can tax interest, dividends, and capital gains through the application of a withholding tax. The local custodian normally withholds the tax upon receipt of a payment and forwards such tax payment to the foreign government on behalf of the Fund. Certain foreign governments can also require a foreign investor to file an income tax return and pay the local tax through estimated tax payments or pay the local tax when filing the tax return. Although not frequently used, some emerging markets have attempted to slow conversion of their currency by imposing a repatriation tax. Generally, this tax is applied to amounts, that are converted from the foreign currency to the investor's currency and withdrawn from the local bank account. Transfer taxes or fees, such as stamp duties, security transfer taxes, and registration and script fees, are generally imposed by emerging markets as a tax or fee on a capital market transaction. Each emerging country may impose a tax or fee at a different point in time as the foreign investor perfects his interest in the securities acquired in the local market. A stamp duty is generally a tax on the official recording of a capital market transaction. Payment of such duty is generally a condition of the transfer of assets and failure to pay such duty can result in a loss of title to such asset as well as loss of benefit from any corporate actions. A stamp duty is generally determined based on a percentage of the value of the transaction conducted and can be charged against the buyer (e.g., Cyprus, India, Israel, Jordan, Malaysia, Pakistan, and the Philippines), against the seller (e.g., Argentina, Australia, China, Egypt, Indonesia, Kenya, Portugal, South Korea, Trinidad, Tobago, and Zimbabwe). Although such a fee does not generally exceed 100 basis points, certain emerging markets have assessed a stamp duty as high as 750 basis points (e.g., Pakistan). A security transfer tax is similar to a stamp duty and is generally applied to the purchase, sale or exchange of securities, that occur in a particular foreign market. These taxes are based on the value of the trade and similar to stamp taxes, can be assessed against the buyer, seller or both. Although the securities transfer tax may be assessed in lieu of a stamp duty, such tax can be assessed in addition to a stamp duty in certain foreign markets (e.g., Switzerland, South Korea, Indonesia). Upon purchasing a security in an emerging market, such security must often be submitted to a registration process in order to record the purchaser as a legal owner of such security interest. Often foreign countries will charge a registration or script fee to record the change in ownership and, where physical securities are issued, issue a new security certificate. In addition to assessing this fee upon the acquisition of a security, some markets also assess registration charges upon the registration of local shares to foreign shares.

In addition to the general risks of investing in foreign securities, the Fund may, from time to time, have exposure to issuers located in Asian markets, including, but not limited to, Japan and China. The economic, political, and regulatory conditions in Asian countries can be highly variable and, in some cases, unpredictable. Many Asian markets have experienced periods of significant instability and government intervention, including expropriation or nationalization of assets, abrupt changes in laws or regulations affecting foreign investment, restrictions on repatriation of capital, and imposition of currency controls. These factors can adversely affect the value, liquidity, and repatriation of the Fund's investments. Asian securities markets are, in general, less mature than those in the United States, often characterized by lower trading volumes, wider bid/ask spreads, greater price volatility, and less reliable settlement systems, which can result in increased risk of delays or failed trades.

The Fund's investments in Asian countries may also be significantly affected by fluctuations in local currencies, which can be subject to government intervention, devaluation, or inconvertibility. In China, for example, the government maintains significant control over the economy, financial markets, and currency exchange, and may impose capital controls or foreign ownership restrictions with little notice. Investments in Chinese issuers may also be affected by regulatory uncertainty, lack of transparency, changes in policies regarding foreign participation in local markets, social, economic and political conditions impacting China, including international relations with other nations, public health risks, corruption and military activity, market illiquidity, exchange-rate fluctuations, volatility, and the potential for limited disclosure and regulation involving Chinese securities. Additionally, certain investments in China may be made through structures such as variable interest entities (VIEs), which present unique legal and operational risks, including uncertainty regarding enforceability of ownership rights. Japan, though a developed market, faces distinct risks related to long-term economic stagnation, high levels of public debt, an aging population, exposure to natural disasters, and ongoing monetary and fiscal interventions by the Japanese government and central bank. The performance of Japanese securities may also be influenced by regional geopolitical tensions or trade disputes.

Across Asia, the diversity of legal, regulatory, and accounting standards, as well as varying levels of investor protection and market oversight, may make it more challenging for the Fund to obtain reliable information or enforce contractual and legal rights. Geopolitical risks, such as tensions in the Taiwan Strait, the Korean Peninsula, or territorial disputes in the South China Sea, may lead to market volatility or disrupt economic activity in the region. While the Fund does not concentrate exclusively in any single Asian market or sector, their investments in the region may subject them to these and other risks to a greater extent than funds that do not invest in Asian issuers. These risks may be heightened during periods of economic, political, or social instability and may result in significant losses.

**Foreign Currency Transactions.** A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. The Fund may also invest in non-deliverable forward contracts (cash-settled contracts for currencies of countries which do not allow non-residents to hold substantial sums of their currency, e.g. China), in order to hedge the foreign currency risk. These contracts are principally traded in the interbank market conducted directly between currency traders (usually large, commercial banks) and their customers as opposed to on exchanges regulated by the CFTC (note, however, that under new definitions adopted by the CFTC and SEC, many non-deliverable foreign currency forwards will be considered swaps for certain purposes, including determination of whether such instruments must be traded on exchanges and centrally cleared). A forward contract generally has no standard maturity dates or amounts (i.e., the parties to the contract may fix the maturity date and the amount) or initial margin deposit requirement, and no commissions are charged at any stage for trades.

The Fund may enter into forward contracts for a variety of purposes in connection with the management of the foreign currency exposure of its portfolio. When the Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of dollars of the amount of foreign currency involved in the underlying security transactions, the Fund will seek to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date the security is purchased or sold and the date on which payment is made or received.

When the Adviser believes that one currency may experience a substantial movement against another currency, including the U.S. dollar, or it wishes to alter the Fund's exposure to the currencies of the countries in its investment universe, it may enter into a forward contract to sell or buy foreign currency in exchange for the U.S. dollar or another foreign currency. Alternatively, where appropriate, the Fund may manage all or part of its foreign currency exposure through the use of a basket of currencies or a proxy currency where such currency or currencies act as an effective proxy for other currencies. In such a case, the Fund may enter into a forward contract where the amount of the foreign currency to be sold exceeds the value of the securities denominated in such currency. The use of this basket hedging technique may be more efficient and economical than entering into separate forward contracts for each currency held in the Fund. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Under normal circumstances, consideration of the prospect for currency parities will be incorporated into the longer-term investment decisions made with regard to overall diversification strategies. However, the Fund retains flexibility to enter into such forward contracts when the Adviser determines that the best interests of the Fund will be served.

The Fund may enter into forward contracts for any other purpose consistent with the Fund's investment objective and program. In determining the amount to be delivered under a contract, the Fund may net offsetting positions.

At the maturity of a forward contract, the Fund may sell the portfolio security and make delivery of the foreign currency, or it may retain the security and either extend the maturity of the forward contract (by "rolling" that contract forward) or initiate a new forward contract.

If the Fund retains the portfolio security and engages in an offsetting transaction, the Fund will incur a gain or a loss (as described below) to the extent that there has been movement in forward contract prices. If the Fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline during the period between the Fund's entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the Fund will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Fund will suffer a loss to the extent of the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell.

The Fund's dealing in forward foreign currency exchange contracts will generally be limited to the transactions described above. However, the Fund reserves the right to enter into forward foreign currency contracts for different purposes and under different circumstances. The Fund is required to enter into forward contracts with regard to its foreign currency denominated securities and the Fund will not do so unless deemed appropriate by the Adviser. Further, this method of hedging against a decline in the value of a currency is intended to establish a rate of exchange at a future date, and not to eliminate fluctuations in the underlying prices of the securities. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time, they tend to limit any potential gain, which might result from an increase in the value of that currency.

Although the Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. It will do so from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference (the "spread") between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of exchange should the Fund desire to resell that currency to the dealer.

**Foreign Futures and Options.** Participation in foreign futures and foreign options transactions involves the execution and clearing of trades on or subject to the rules of a foreign board of trade. Neither the National Futures Association nor any domestic exchange regulates activities of any foreign boards of trade, including the execution, delivery and clearing of transactions, or has the power to compel enforcement of the rules of a foreign board of trade or any applicable foreign law. This is true even if the exchange is formally linked to a domestic market so that a position taken on the market may be liquidated by a transaction on another market. Moreover, such laws or regulations will vary depending on the foreign country in which the foreign futures or foreign options transaction occurs. For these reasons, customers who trade foreign futures or foreign options contracts may not be afforded certain of the protective measures provided by the Commodity Exchange Act ("CEA"), the CFTC's regulations and the rules of the National Futures Association and any domestic exchange, including the right to use reparations proceedings before the Commission and arbitration proceedings provided by the National Futures Association or any domestic futures exchange. In particular, funds received from the Fund for foreign futures or foreign options transactions may not be provided the same protections as funds received in respect of transactions on United States futures exchanges. In addition, the price of any foreign futures or foreign options contract and, therefore, the potential profit and loss thereon may be affected by any variance in the foreign exchange rate between the time the Fund's order is placed and the time it is liquidated, offset or exercised.

**FORWARD COMMITMENTS**

Forward commitments are securities purchased on a "when-issued" or delayed delivery basis. Such securities are not available for immediate delivery despite the fact that a market exists for those securities. The price for such securities, which is generally expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment for the when-issued securities take place at a later date. Normally, the settlement date occurs within two months of the purchase, but may be negotiated to take up to three months. During the period between purchases and settlement, no payment is made by the Fund to the issuer and no interest accrues to the Fund. At the time the Fund makes the commitment to purchase a security on a when-issued basis, it will record the transaction as a purchase and thereafter reflect the value of the security each day in determining the Fund's NAV. When-issued and forward commitment transactions involve the risk that the price or yield obtained in a transaction may be less favorable than the price or yield available in the market when the transaction takes place.

**FUTURES CONTRACTS**

**General.** Futures contracts include stock index, interest rate and currency futures (commonly referred to as "futures" or "futures contracts").

Stock index futures contracts may be used to provide a hedge for a portion of the Fund's portfolio, as a cash management tool, or as an efficient way for the Adviser to implement either an increase or decrease in portfolio market exposure in response to changing market conditions. The Fund may purchase or sell futures contracts with respect to any stock index. Nevertheless, to hedge the Fund's portfolio successfully, the Fund must sell futures contracts with respect to indices or sub-indices whose movements will have a significant correlation with movements in the prices of the Fund's portfolio securities.

Interest rate or currency futures contracts may be used to manage the Fund's exposure to changes in prevailing levels of interest rates or currency exchange rates in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by the Fund. In this regard, the Fund could sell interest rate or currency futures as an offset against the effect of expected increases in interest rates or currency exchange rates and purchase such futures as an offset against the effect of expected declines in interest rates or currency exchange rates.

The Fund may enter into futures contracts that are traded on national or foreign futures exchanges, which are standardized as to maturity date and underlying financial instrument. Futures exchanges and trading in the United States are regulated under the CEA by the CFTC. Futures are traded in London at the London International Financial Futures Exchange in Paris at the MATIF and in Tokyo at the Tokyo Stock Exchange. Although techniques other than the sale and purchase of futures contracts could be used for the above-referenced purposes, futures contracts offer an effective and relatively low cost means of implementing the Fund's objectives in these areas.

Although the Fund has no current intention of engaging in futures or options transactions other than those described above, they reserve the right to do so. Such futures and options trading might involve risks, which differ from those involved in the futures and options described in this Statement of Additional Information.

**Hedging Risk.** A decision of whether, when and how to hedge involves skill and judgment, and even a well-conceived hedge may be unsuccessful to some degree because of unexpected market behavior or market or interest rate trends. There are several risks in connection with the use by the Fund of futures contracts as a hedging device. One risk arises because of the possible imperfect correlation between movements in the prices of the futures contracts and movements in the prices of the underlying instruments, which are the subject of the hedge. The Adviser will, however, attempt to reduce this risk by entering into futures contracts whose movements, in its judgment, will have a significant correlation with movements in the prices of the Fund's underlying instruments sought to be hedged.

Successful use of futures contracts by the Fund for hedging purposes is also subject to the Adviser's ability to correctly predict movements in the direction of the market. It is possible that, when the Fund has sold futures to hedge its portfolio against a decline in the market, the index, indices, or instruments underlying futures might advance and the value of the underlying instruments held in the Fund's portfolio might decline. If this were to occur, the Fund would lose money on the futures and also would experience a decline in value in its underlying instruments. However, while this might occur to a certain degree, the Adviser believes that over time the value of the Fund's portfolio will tend to move in the same direction as the market indices used to hedge the portfolio. It is also possible that if the Fund were to hedge against the possibility of a decline in the market (adversely affecting the underlying instruments held in its portfolio) and prices instead increased, the Fund would lose part or all of the benefit of increased value of those underlying instruments that it has hedged, because it would have offsetting losses in its futures positions. In addition, in such situations, if the Fund had insufficient cash, it might have to sell underlying instruments to meet daily variation margin requirements. Such sales of underlying instruments might be, but would not necessarily be, at increased prices (which would reflect the rising market). The Fund might have to sell underlying instruments at a time when it would be disadvantageous to do so.

In addition to the possibility that there might be an imperfect correlation, or no correlation at all, between price movements in the futures contracts and the portion of the portfolio being hedged, the price movements of futures contracts might not correlate perfectly with price movements in the underlying instruments due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors might close futures contracts through offsetting transactions, which could distort the normal relationship between the underlying instruments and futures markets. Second, the margin requirements in the futures market are less onerous than margin requirements in the securities markets, and as a result the futures market might attract more speculators than the securities markets do. Increased participation by speculators in the futures market might also cause temporary price distortions. Due to the possibility of price distortion in the futures market and also because of the imperfect correlation between price movements in the underlying instruments and movements in the prices of futures contracts, even a correct forecast of general market trends by the Adviser might not result in a successful hedging transaction over a very short time period.

**LIBOR Risk.** The Fund may be exposed to financial instruments that are tied to the London Interbank Offered Rate ("LIBOR") to determine payment obligations, financing terms, hedging strategies or investment value. The Fund's investments may pay interest at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. The Fund may also obtain financing at floating rates based on LIBOR. Derivative instruments utilized by the Fund may also reference LIBOR.

The United Kingdom's Financial Conduct Authority ("FCA"), which regulates LIBOR, has ceased publishing all LIBOR settings. In April 2023, the FCA directed that certain USD LIBOR settings would continue to be published under a synthetic methodology, a practice that ceased on September 30, 2024. Actions by regulators have resulted in the establishment of alternative reference rates in most major currencies. The U.S. Federal Reserve, based on the recommendations of Alternative Reference Rates Committee, has begun publishing the Secured Overnight Financing Rate ("SOFR") that is intended to replace U.S. dollar LIBOR. Proposals for alternative reference rates for other currencies have also been announced or have already begun publication. Markets are slowly developing in response to these new reference rates.

Neither the effect of the LIBOR transition process nor its ultimate success can yet be known. The transition process might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. While some existing LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate-setting methodology, there may be significant uncertainty regarding the effectiveness of any such alternative methodologies to replicate LIBOR. Not all existing LIBOR-based instruments may have alternative rate-setting provisions and there remains uncertainty regarding the willingness and ability of issuers to add alternative rate-setting provisions in certain existing instruments. In addition, a liquid market for newly-issued instruments that use a reference rate other than LIBOR still may be developing. There may also be challenges for the Fund to enter into hedging transactions against such newly-issued instruments until a market for such hedging transactions develops. All of the aforementioned may adversely affect the Fund's performance or net asset value.

**Liquidity.** The Fund may elect to close some or all of its futures positions at any time prior to their expiration. The Fund would do so to reduce exposure represented by long futures positions or short futures positions. The Fund may close its positions by taking opposite positions, which would operate to terminate the Fund's position in the futures contracts. Final determinations of variation margin would then be made, additional cash would be required to be paid by or released to the Fund, and the Fund would realize a loss or a gain.

Futures contracts may be closed out only on the exchange or board of trade where the contracts were initially traded. Although the Fund intends to purchase or sell futures contracts only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a liquid market on an exchange or board of trade will exist for any particular contract at any particular time. The reasons for the absence of a liquid secondary market on an exchange are substantially the same as those discussed in the section entitled "Description of Securities, Other Investment Policies and Risk Considerations – Options on Futures Contracts". In the event that a liquid market does not exist, it might not be possible to close out a futures contract, and in the event of adverse price movements, the Fund would continue to be required to make daily cash payments of variation margin. However, in the event futures contracts have been used to hedge the underlying instruments, the Fund would continue to hold the underlying instruments subject to the hedge until the futures contracts could be terminated. In such circumstances, an increase in the price of underlying instruments, if any, might partially or completely offset losses on the futures contract. However, as described below, there is no guarantee that the price of the underlying instruments will, in fact, correlate with the price movements in the futures contract and thus provide an offset to losses on a futures contract.

**Trading in Futures Contracts.** A futures contract provides for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument (e.g., units of a stock index) for a specified price, date, time and place designated at the time the contract is made. The financial instrument underlying the contract may be a stock, stock index, bond, bond index, interest rate, foreign exchange rate or other similar instrument. Brokerage fees are incurred when a futures contract is bought or sold and margin deposits must be maintained. Entering into a contract to buy is commonly referred to as buying or purchasing a contract or holding a long position. Entering into a contract to sell is commonly referred to as selling a contract or holding a short position.

Futures contracts are traded in the United States on commodity exchanges or boards of trade (known as "contract markets") approved for such trading and regulated by the CFTC. These contract markets standardize the terms, including the maturity date and underlying financial instrument, of all futures contracts.

Unlike when the Fund purchases or sells a security, no price would be paid or received by the Fund upon the purchase or sale of a futures contract. Upon entering into a futures contract, and to maintain the Fund's open positions in futures contracts, the Fund would be required to deposit with its custodian or futures broker in a segregated account in the name of the futures broker an amount of cash, U.S. Government securities, suitable money market instruments, or other liquid securities, known as "initial margin". The margin required for a particular futures contract is set by the exchange on which the contract is traded, and may be significantly modified from time to time by the exchange during the term of the contract. Futures contracts are customarily purchased and sold on margins that may range upward from less than 5% of the value of the contract being traded.

If the price of an open futures contract changes (by increase in the underlying instrument or index in the case of a sale or by decrease in the case of a purchase) so that the loss on the futures contract reaches a point at which the margin on deposit does not satisfy margin requirements, the broker will require an increase in the margin. However, if the value of a position increases because of favorable price changes in the futures contract so that the margin deposit exceeds the required margin, the broker will pay the excess to the Fund.

These subsequent payments, called "variation margin", to and from the futures broker, are made on a daily basis as the price of the underlying assets fluctuate making the long and short positions in the futures contract more or less valuable, a process known as "marking to the market". The Fund expects to earn interest income on its margin deposits.

Although certain futures contracts, by their terms, require actual future delivery of and payment for the underlying instruments, in practice most futures contracts are usually closed out before the delivery date. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical underlying instrument or index and the same delivery date. If the offsetting purchase price is less than the original sale price, the Fund realizes a gain; if it is more, the Fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that the Fund will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If the Fund is not able to enter into an offsetting transaction the Fund will continue to be required to maintain the margin deposits on the futures contract.

For example, one contract in the Financial Times Stock Exchange 100 Index future is a contract to buy 25 pounds sterling multiplied by the level of the UK Financial Times 100 Share Index on a given future date. Settlement of a stock index futures contract may or may not be in the underlying instrument or index. If not in the underlying instrument or index, then settlement will be made in cash, equivalent over time to the difference between the contract price and the actual price of the underlying asset at the time the stock index futures contract expires.

**Volatility and Leverage.** The prices of futures contracts are volatile and are influenced, among other things, by actual and anticipated changes in the market and interest rates, which in turn are affected by fiscal and monetary policies and national and international political and economic events. Most United States futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of futures contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.

Because of the low margin deposits required, futures trading involves an extremely high degree of leverage. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the futures contract were deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount of margin deposited to maintain the futures contract. However, the Fund would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold it after the decline.

**ILLIQUID SECURITIES**

Certain securities that the Fund may purchase (e.g., restricted securities purchased in private placements) may be illiquid (generally, securities that the Fund determines are unlikely to be able to be sold within seven (7) days) when purchased.

Securities held by the Fund, even if liquid when acquired, may become illiquid if the underlying issuer faces material financial difficulties or bankruptcy, the securities are delisted from an exchange on which they were traded or the Adviser otherwise determines that the securities are illiquid. Illiquid securities are subject to the risk that they cannot be sold in a timely manner, and are also subject to the risk that they must be fair valued by the Fund with little or no current, independent pricing information. In such a case, the Fund may undervalue or overvalue the securities. The Fund is subject to a restriction preventing the Fund from acquiring illiquid securities with more than 15% of its assets. If through the appreciation of illiquid securities or the depreciation of liquid securities, the Fund should be in a position where more than 15% of the value of its net assets are invested in illiquid assets, including restricted securities, the Fund will take appropriate steps to protect liquidity.

**INVESTMENT COMPANIES**

The Fund may invest in the securities of other investment companies, including ETFs, closed-end funds and open-end (mutual) funds (also called underlying funds), as well as in business development companies. To the extent such underlying funds are index-based, these underlying funds will generally attempt to replicate the performance of a particular index. An underlying fund may not always hold all of the same securities as the index it attempts to track. An underlying fund may use statistical sampling techniques to attempt to replicate the returns of an index. Statistical sampling techniques attempt to match the investment characteristics of the index and the fund by taking into account such factors as capitalization, industry exposures, dividend yield, price/earnings (P/E) ratio, price/book (P/B) ratio, and earnings growth. An underlying fund may not track the index perfectly because differences between the index and the fund's portfolio can cause differences in performance. In addition, expenses and transaction costs, the size and frequency of cash flow into and out of the fund, and differences between how and when the fund and the index are valued can cause differences in performance. Furthermore, when the Fund invests in shares of underlying funds, performance is directly related to the ability of the underlying funds to meet their respective investment objectives, as well as the allocation of the Fund's assets among the underlying funds by the Adviser. Accordingly, the Fund's investment performance will be influenced by the investment strategies of and risks associated with any underlying funds in direct proportion to the amount of assets the Fund allocates to such underlying funds utilizing such strategies.

There is also a risk that the underlying funds may terminate due to extraordinary events. For example, any of the service providers to an underlying fund, such as the trustee or sponsor, may close or otherwise fail to perform their obligations to the underlying fund, and the underlying fund may not be able to find a substitute service provider. Also, the underlying fund may be dependent upon licenses to use the various indices as a basis for determining their compositions and/or otherwise to use certain trade names. If these licenses are terminated, the respective underlying fund may also terminate. In addition, an underlying fund may terminate if its net assets fall below a certain amount. Although the Fund believe that in the event of the termination of an underlying fund, the Fund will be able to invest instead in shares of an alternate underlying fund tracking the same market index or another index covering the same general market, there can be no assurance that shares of an alternate underlying fund would be available for investment at that time.

Additional risks related to investments in investment companies, including risks related to specific types of investment companies, are set forth below.

**1940 Act Requirements.** Generally, under Section 12(d)(1) of the 1940 Act, a fund may not acquire shares of another investment company if, immediately after such acquisition, (i) a fund would hold more than 3% of the other investment company's total outstanding shares, (ii) a fund's investment in securities of the other investment company would be more than 5% of the value of the total assets of the fund, or (iii) more than 10% of a fund's total assets would be invested in investment companies. Under certain statutory and regulatory exemptions, a fund may invest in registered and unregistered money market funds in excess of these limitations. The Fund may rely upon any applicable statutory or regulatory exemptions in investing in other investment companies. These restrictions and conditions may limit the Fund's ability to invest in other investment companies to the extent desired.

**Business Development Companies.** Business Development Companies ("BDCs") are a type of closed-end investment company regulated under the 1940 Act. BDCs typically operate as publicly traded private equity firms that invest in early stage to mature private companies as well as small public companies. BDCs are regulated under the 1940 Act and are taxed as regulated investment companies ("RICs") under the Internal Revenue Code of 1986, as amended (the "Code"). BDCs realize operating income when their investments are sold off, and therefore maintain complex organizational, operational, tax and compliance requirements. For tax purposes, BDCs generally intend to qualify for taxation as RICs. To so qualify, BDCs must satisfy certain asset diversification and source of income tests and must generally distribute at least 90% of their taxable earnings as dividends. Under the 1940 Act, BDCs are also required to invest at least 70% of their total assets primarily in securities of private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. Government securities and high-quality debt investments that mature in one year or less. While BDCs are expected to generate income in the form of dividends, because BDCs generally invest in less mature private companies or thinly traded U.S. public companies (which involve greater risk than well-established publicly-traded companies), certain BDCs during certain periods of time may not generate such income. Generally, little public information exists for private and thinly traded companies and there is a risk that investors may not be able to make a fully informed evaluation of a BDC and the BDC's portfolio of investments. Securities of private companies may be difficult to value and may be difficult to sell at a price representative of their intrinsic value. Small and medium-sized companies also may have fewer lines of business so that changes in any one line of business may have a greater impact on the value of their stock than is the case with a larger company. In addition, investments made by BDCs are generally subject to legal and other restrictions on resale and are otherwise less liquid than publicly-traded securities. The illiquidity of these investments may make it difficult to sell such investments if the need arises, and if there is a need for a BDC in which the Fund invests to liquidate its portfolio quickly, it may realize a loss on its investments. BDCs may have relatively concentrated investment portfolios, consisting of a relatively small number of holdings. A consequence of this limited number of investments is that the aggregate returns realized may be disproportionately impacted by the poor performance of a small number of investments, or even a single investment, particularly if a company experiences the need to write down the value of an investment. Since BDCs rely on access to short-term money markets, longer-term capital markets and the bank markets as significant sources of liquidity, if BDCs are not able to access capital at competitive rates, their ability to implement certain financial strategies will be negatively impacted. Market disruptions, including a downturn in capital markets in general or a downgrade of the credit rating of a BDC held by the Fund, may increase the cost of borrowing to that company, thereby increasing its cost of borrowing and adversely impacting the Fund's returns. Credit downgrades may also result in requirements for a BDC to provide additional support in the form of letters of credit or cash or other collateral to various counterparties.

**Closed-End Investment Companies.** The Fund may invest in "closed-end" investment companies (or "closed-end funds"), subject to the investment restrictions set forth below. The Fund, together with any company or companies controlled by the Fund, and any other investment companies having the Adviser as an investment adviser, may purchase in the aggregate only up to 3% of the total outstanding voting stock of any closed-end fund. Shares of closed-end funds are typically offered to the public in a one-time initial public offering by a group of underwriters who retain a spread or underwriting commission of between 4% or 6% of the initial public offering price. Such securities are then listed for trading on the NYSE, the National Association of Securities Dealers Automated Quotation System (commonly known as "NASDAQ") and, in some cases, may be traded in other over-the-counter markets. Because the shares of closed-end funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as the Fund), investors seek to buy and sell shares of closed-end funds in the secondary market.

The Fund generally will purchase shares of closed-end funds only in the secondary market. The Fund will incur normal brokerage costs on such purchases similar to the expenses the Fund would incur for the purchase of securities of any other type of issuer in the secondary market. The Fund may, however, also purchase securities of a closed-end fund in an initial public offering when, in the opinion of the Adviser, based on a consideration of the nature of the closed-end fund's proposed investments, the prevailing market conditions and the level of demand for such securities, they represent an attractive opportunity for growth of capital. The initial offering price typically will include a dealer spread, which may be higher than the applicable brokerage cost if the Fund purchased such securities in the secondary market.

The shares of many closed-end funds, after their initial public offering, frequently trade at a price per share, which is less than the NAV per share, the difference representing the "market discount" of such shares. This market discount may be due in part to the investment objective of long-term appreciation, which is sought by many closed-end funds, as well as to the fact that the shares of closed-end funds are not redeemable by the holder upon demand to the issuer at the next determined NAV but rather are subject to the principles of supply and demand in the secondary market. A relative lack of secondary market purchasers of closed-end fund shares also may contribute to such shares trading at a discount to their net asset value.

The Fund may invest in shares of closed-end funds that are trading at a discount to NAV or at a premium to net asset value. There can be no assurance that the market discount on shares of any closed-end fund purchased by the Fund will ever decrease. In fact, it is possible that this market discount may increase and the Fund may suffer realized or unrealized capital losses due to further decline in the market price of the securities of such closed-end funds, thereby adversely affecting the NAV of the Fund's shares. Similarly, there can be no assurance that any shares of a closed-end fund purchased by the Fund at a premium will continue to trade at a premium or that the premium will not decrease subsequent to a purchase of such shares by the Fund.

Closed-end funds may issue senior securities (including preferred stock and debt obligations) for the purpose of leveraging the closed-end fund's common shares in an attempt to enhance the current return to such closed-end fund's common shareholders. The Fund's investment in the common shares of closed-end funds that are financially leveraged may create an opportunity for greater total return on its investment, but at the same time may be expected to exhibit more volatility in market price and NAV than an investment in shares of investment companies without a leveraged capital structure.

**Exchange Traded Fund.** The Fund may invest in shares of other exchange traded funds ("ETFs"). Typically, assets underlying the ETF shares are stocks, though they may also be commodities or other instruments. An ETF may seek to replicate the performance of a specific index or may be actively managed.

Typically, shares of an ETF that tracks an index are expected to increase in value as the value of the underlying benchmark increases. However, in the case of inverse ETFs (also called "short ETFs" or "bear ETFs"), ETF shares are expected to increase in value as the value of the underlying benchmark decreases. Inverse ETFs seek to deliver the opposite of the performance of the benchmark they track and are often marketed as a way for investors to profit from, or at least hedge their exposure to, downward moving markets. Investments in inverse ETFs are similar to holding short positions in the underlying benchmark. Leveraged ETFs seek to deliver multiples of the performance of the index or other benchmark they track and use derivatives in an effort to amplify the returns (or declines, in the case of leveraged inverse ETFs) of the underlying index or benchmark. In addition, some ETFs are non-registered investment companies that invest directly in securities, commodities or other assets (such as precious metals).

Inverse and leveraged ETFs are subject to additional risks not generally associated with traditional ETFs. The NAV and market price of leveraged or inverse ETFs are usually more volatile than the value of the tracked index or of other ETFs that do not use leverage. Inverse and leveraged ETFs may use investment techniques and financial instruments such as derivative transactions and short selling techniques, and the use of these techniques may cause the inverse or leveraged ETFs to lose more money in market environments that are adverse to their investment strategies than other funds that do not use such techniques. In addition, while leveraged ETFs may offer the potential for greater return, the potential for loss and the speed at which losses can be realized also are greater. Most leveraged and inverse ETFs "reset" daily, meaning they are designed to achieve their stated objectives on a daily basis. Leveraged and inverse ETFs can deviate substantially from the performance of their underlying benchmark over longer periods of time, particularly in volatile periods.

ETF shares are redeemable only in large blocks (typically, 50,000 shares), called "creation units", and are redeemed principally in-kind at each day's next calculated net asset value per share (NAV). ETFs typically incur fees that are separate from those fees incurred directly by a fund. The Fund's purchase of ETFs results in the layering of expenses, such that the Fund would indirectly bear a proportionate share of any ETF's operating expenses. Further, while traditional investment companies are continuously offered at NAV, ETFs are traded in the secondary market (e.g., on a stock exchange) on an intra-day basis at prices that may be above or below the value of their underlying portfolios.

Investments in an ETF involve certain risks generally associated with investments in a broadly based portfolio of securities, including risks that the general level of stock prices may decline, thereby adversely affecting the value of each unit of the ETF or other instrument. In addition, an index-based ETF may not fully replicate the performance of its benchmark index because of the temporary unavailability of certain investments in the secondary market, discrepancies between the ETF and the index with respect to the weighting or number of investments held or other factors. In addition, an ETF may be adversely affected by the performance of the specific index, market sector or group of industries on which it is based. ETFs that invest in other assets, such as commodities, are subject to the risks associated with directly investing in those assets. In addition, ETFs are subject to the following risks that do not apply to conventional mutual funds: (1) the market price of the ETF's shares may trade at a discount to their net asset value and, if an index-based ETF, the ETF may not track an index as well as a traditional index mutual fund because of the disparity between the ETF's market value and the ETF's NAV; (2) an active trading market for an ETF's shares may not develop or be maintained; or (3) trading of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, if the shares are de-listed from the exchange, or upon the activation of market-wide "circuit breakers" (which are tied to large decreases in stock prices) halts stock trading generally.

Because ETFs and pools that issue similar instruments bear various fees and expenses, the Fund's investment in these instruments will involve certain indirect costs, as well as transaction costs, such as brokerage commissions. The Adviser may consider the expenses associated with an investment in determining whether to invest in an ETF.

**Expenses of Other Investment Companies.** The Fund's investments in ETFs, mutual funds, closed-end funds, REITs and other underlying funds involve certain additional expenses and certain tax results, which would not be present in a direct investment in the underlying funds.

**Master/Feeder Structure.** Notwithstanding these limitations, the Fund reserves the right to convert to a "master/feeder" structure at a future date. If the Board approved the use of a master-feeder structure for the Fund, the Fund (the "feeder" fund) would invest all of its investable assets in an open-end management investment company (the "master" fund) with substantially the same investment objectives, policies and limitations as the Fund. For this purpose, "all of the Fund's investable assets" means that the only investment securities that would be held by the Fund would be the Fund's interest in the master fund. Under such a structure, one or more "feeder" funds, such as the Fund, invest all of their assets in a "master" fund, which, in turn, invests directly in a portfolio of securities. If required by applicable law, the Fund will seek shareholder approval before converting to a master/feeder structure. If the requisite regulatory authorities determine that such approval is not required, shareholders will be deemed, by purchasing shares, to have consented to such a conversion and no further shareholder approval will be sought. Such a conversion is expressly permitted under the investment objective and fundamental policies of the Fund.

**Open-End Investment Companies.** The 1940 Act provides that an underlying fund whose shares are purchased by the Fund will be obligated to redeem shares held by the Fund only in an amount up to 1% of the underlying fund's outstanding securities during any period of less than 30 days. Shares held by the Fund in excess of 1% of an underlying fund's outstanding securities therefore, will generally be considered not readily marketable securities, which, together with other such securities, may not exceed 15% of the Fund's assets. In some cases deemed appropriate by the Adviser or the Board of Trustees, Shares held by the Fund in excess of 1% of an underlying fund's outstanding securities will be considered readily marketable securities (for example, ETFs, which are registered as open-end investment companies but listed on an exchange).

Under certain circumstances an underlying fund may determine to make payment of a redemption by the Fund wholly or partly by a distribution in kind of securities from its portfolio, in lieu of cash, in conformity with the rules of the SEC. In such cases, the Fund may hold securities distributed by an underlying fund until the Adviser determines that it is appropriate to dispose of such securities.

Investment decisions by the investment advisers of the underlying funds are made independently of the Fund and the Adviser. Therefore, the investment adviser of one underlying fund may be purchasing shares of the same issuer whose shares are being sold by the investment adviser of another such fund. The result of this would be an indirect expense to the Fund without accomplishing any investment purpose.

**MARKET RISK**

Market risk is the risk that the value of the securities in the Fund's portfolios may decline due to daily fluctuations in the securities markets that are generally beyond the Adviser's control, including fluctuation in interest rates, the quality of the Fund's investments, economic conditions and general market conditions. Certain market events could increase volatility and exacerbate market risk, and could result in trading halts, such as changes in governments' economic policies, political turmoil, environmental events, trade disputes, terrorism, war, military action and epidemics, pandemics or other public health issues. Any of the foregoing market events can adversely affect the economies of one or more countries or the entire global economy, certain industries or individual issuers, and capital and security markets in ways that cannot necessarily be foreseen or quickly addressed.

As shown with the coronavirus disease that emerged in 2020 (COVID-19), market events (including public health crises and concerns) can have a profound economic and business effect that results in cancellations and disruptions to supply chains and customer activity, disruption and displacement of one or more sectors or industries, closing of borders and imposition of travel restrictions and quarantines, general public concern and uncertainty and, in extreme cases, exchange trading halts due to rapidly falling prices.

Market events such as these and other types of market events may cause significant declines in the values and liquidity of many securities and other instruments, and significant disruptions to global business activity and financial markets. Turbulence in financial markets, and reduced liquidity in equity, credit and fixed income markets may negatively affect many issuers both domestically and around the world, and can result in trading halts, any of which could have an adverse impact on the Fund. During periods of market volatility, security prices (including securities held by the Fund) could change drastically and rapidly and therefore adversely affect the Fund.

**OPTIONS**

**Dealer (Over-the-Counter) Options.** The Fund may engage in transactions involving dealer options. Certain risks are specific to dealer options. While the Fund would look to a clearing corporation to exercise exchange-traded options, if the Fund were to purchase a dealer option, it would rely on the dealer from whom it purchased the option to perform if the option were exercised. Failure by the dealer to do so would result in the loss of the premium paid by the Fund as well as loss of the expected benefit of the transaction. Transaction costs regarding writing and purchasing options are normally higher than those applicable to purchases and sales of portfolio securities.

Exchange-traded options generally have a continuous liquid market while dealer options have none. Consequently, the Fund will generally be able to realize the value of a dealer option it has purchased only by exercising it or reselling it to the dealer who issued it. Similarly, when the Fund writes a dealer option, it generally will be able to close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer to which the Fund originally wrote the option. While the Fund will seek to enter into dealer options only with dealers who will agree to and which are expected to be capable of entering into closing transactions with the Fund, there can be no assurance that the Fund will be able to liquidate a dealer option at a favorable price at any time prior to expiration. Until the Fund, as a covered dealer call option writer, is able to effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) or currencies used as cover until the option expires or is exercised. In the event of insolvency of the contra party, the Fund may be unable to liquidate a dealer option. With respect to options written by the Fund, the inability to enter into a closing transaction may result in material losses to the Fund. For example, since the Fund must maintain a secured position with respect to any call option on a security they write, the Fund may not sell the assets, that they have segregated to secure the position while it is obligated under the option. This requirement may impair the Fund's ability to sell portfolio securities or currencies at a time when such sale might be advantageous.

The Staff of the SEC has taken the position that purchased dealer options and the assets used to secure the written dealer options are illiquid securities. The Fund may treat the cover used for written OTC options as liquid if the dealer agrees that the Fund may repurchase the OTC option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the OTC option would be considered illiquid only to the extent the maximum repurchase price under the formula exceeds the intrinsic value of the option. Accordingly, the Fund will treat dealer options as subject to the Fund's limitation on unmarketable securities. If the SEC changes its position on the liquidity of dealer options, the Fund will change its treatment of such instrument accordingly.

**Options on Futures Contracts.** The Fund may purchase and sell options on the same types of futures in which it may invest. Options on futures are similar to options on underlying instruments except that options on futures give the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put), rather than to purchase or sell the futures contract, at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by the delivery of the accumulated balance in the writer's futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.

Where the Fund seeks to close out an option position by writing or buying an offsetting option covering the same underlying instrument, index or contract and having the same exercise price and expiration date, its ability to establish and close out positions on such options will be subject to the maintenance of a liquid secondary market. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options, or underlying instruments; (iv) unusual or unforeseen circumstances (e.g., volume exceeds clearing capability) may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at times, render certain of the facilities of any of the clearing corporations inadequate, and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers' orders.

As an alternative to writing or purchasing call and put options on stock index futures, the Fund may write or purchase call and put options on stock indices. Such options would be used in a manner similar to the use of options on futures contracts.

**Purchasing Call Options.** The Fund may purchase American or European style call options. As the holder of a call option, the Fund has the right to purchase the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European style). The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may purchase call options for the purpose of increasing its current return or avoiding tax consequences, which could reduce its current return. The Fund may also purchase call options in order to acquire the underlying securities or currencies. Examples of such uses of call options are provided below.

Call options may be purchased by the Fund for the purpose of acquiring the underlying securities or currencies for its portfolio. Utilized in this fashion, the purchase of call options enables the Fund to acquire the securities or currencies at the exercise price of the call option plus the premium paid. At times the net cost of acquiring securities or currencies in this manner may be less than the cost of acquiring the securities or currencies directly. This technique may also be useful to the Fund in purchasing a large block of securities or currencies that would be more difficult to acquire by direct market purchases. So long as it holds such a call option rather than the underlying security or currency itself, the Fund is partially protected from any unexpected decline in the market price of the underlying security or currency and in such event could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option.

**Purchasing Put Options.** The Fund may purchase American or European style put options. As the holder of a put option, the Fund has the right to sell the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European style). In return for this right, the Fund pays the current market price for the option (known as the "option premium"). The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may purchase put options for defensive purposes in order to protect against an anticipated decline in the value of its securities or currencies.

The Fund may purchase a put option on an underlying security or currency (a "protective put") owned by the Fund as a defensive technique in order to protect against an anticipated decline in the value of the security or currency. Such hedge protection is provided only during the life of the put option when the Fund, as the holder of the put option, is able to sell the underlying security or currency at the put exercise price regardless of any decline in the underlying security's market price or currency's exchange value. For example, a put option may be purchased in order to protect unrealized appreciation of a security or currency where the Adviser deems it desirable to continue to hold the security or currency because of tax considerations. The premium paid for the put option and any transaction costs would reduce any capital gain otherwise available for distribution when the security or currency is eventually sold.

The Fund may also purchase put options at a time when the Fund does not own the underlying security or currency. By purchasing put options on a security or currency it does not own, the Fund seeks to benefit from a decline in the market price of the underlying security or currency. If the put option is not sold when it has remaining value, and if the market price of the underlying security or currency remains equal to or greater than the exercise price during the life of the put option, the Fund will lose its entire investment in the put option. In order for the purchase of a put option to be profitable, the market price of the underlying security or currency must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction.

**Option Combinations.** The Fund may purchase or write put or call options in combinations, including, without limitation, spreads, straddles and collars. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. In "spread" transactions, the Fund buys and writes a put or buys and writes a call on the same underlying instrument with the options having different exercise prices, expiration dates, or both. In "straddles," the Fund purchases a put option and a call option or writes a put option and a call option on the same instrument with the same expiration date and the same exercise price. When the Fund engages in spread and straddle transactions, it seeks to profit from differences in the option premiums paid and received and in the market prices of the related options positions when they are closed out or sold. Because these transactions require the Fund to buy and/or write more than one option simultaneously, the Fund's ability to enter into such transactions and to liquidate its positions when necessary or deemed advisable may be more limited than if the Fund were to buy or sell a single option. Similarly, costs incurred by the Fund in connection with these transactions will in many cases be greater than if the Fund were to buy or sell a single option. The Fund also may use option "collars." A "collar" position combines a put option purchased by the Fund (the right of the Fund to sell a specific security within a specified period) with a call option that is written by the Fund (the right of the counterparty to buy the same security) in a single instrument. The Fund's right to sell the security is typically set at a price that is below the counterparty's right to buy the security. Thus, the combined position "collars" the performance of the underlying security, providing protection from depreciation below the price specified in the put option, and allowing for participation in any appreciation up to the price specified by the call option. In each case, the premium received for writing an option offsets, in part, the premium paid to purchase the corresponding option, however, downside protection may be limited as compared to just owning a single option. Also, certain option combinations, such as straddles, may be subject to special tax rules.

**Special Risks of Over the Counter Options.** Exchange-traded options in the United States are issued by a clearing organization affiliated with the exchange on which the option is listed that, in effect, guarantees completion of every exchange-traded option transaction. In contrast, an OTC option is a type of financial contract that is negotiated privately and directly between two parties, rather than being traded on a public exchange. Unlike exchange-traded options, which are standardized and backed by a clearing organization that guarantees the transaction, OTC options are custom contracts whose terms are set by the parties involved, typically the Fund and a financial institution such as a bank or securities dealer. There is no third-party clearinghouse involved to guarantee that each party fulfills its obligations under the contract. Thus, when the Fund purchases an OTC option, it relies on the counter-party from whom it purchased the option to make or take delivery of the underlying investment upon exercise of the option. Failure by the counter-party to do so would result in the loss of any premium paid by the Fund as well as the loss of any expected benefit of the transaction.

The Fund's ability to establish and close out positions in exchange-traded options depends on the existence of a liquid market. However, there can be no assurance that such a market will exist at any particular time. Closing transactions can be made for OTC options only by negotiating directly with the counter-party or by a transaction in the secondary market if any such market exists. There can be no assurance that the Fund will in fact be able to close out an OTC option position at a favorable price prior to expiration. In the event of insolvency of the counter-party, the Fund might be unable to close out an OTC option position at any time prior to its expiration.

If the Fund were unable to effect a closing transaction for an option it had purchased, it would have to exercise the option to realize any profit. The inability to enter into a closing purchase transaction for a covered call option written by the Fund could cause material losses because the Fund would be unable to sell the investment used as cover for the written option until the option expires or is exercised.

**Writing Covered Call Options.** The Fund may write (sell) American or European style "covered" call options and purchase options to close out options previously written by the Fund. In writing covered call options, the Fund expects to generate additional premium income which should serve to enhance the Fund's total return and reduce the effect of any price decline of the security or currency involved in the option. Covered call options will generally be written on securities or currencies which, in the Adviser's opinion, are not expected to have any major price increases or moves in the near future but which, over the long term, are deemed to be attractive investments for the Fund.

A call option gives the holder (buyer) the "right to purchase" a security or currency at a specified price (the exercise price) at expiration of the option (European style) or at any time until a certain date (the expiration date) (American style). So long as the obligation of the writer of a call option continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to deliver the underlying security or currency against payment of the exercise price. This obligation terminates upon the expiration of the call option, or such earlier time at which the writer effects a closing purchase transaction by repurchasing an option identical to that previously sold. To secure his obligation to deliver the underlying security or currency in the case of a call option, a writer is required to deposit in escrow the underlying security or currency or other assets in accordance with the rules of a clearing corporation.

A call option is considered "covered" if the Fund (i) owns the security or currency subject to the option, or owns an option to purchase the same underlying security or currency having an exercise price equal to or less than the exercise price of the "covered" option; or (ii) has established with its custodian for the term of the option an account consisting of cash, U.S. Government securities or other liquid securities having a value equal to the fluctuating market value of the securities or currencies on which the Fund holds the option.

The writing of covered call options is a conservative investment technique believed to involve relatively little risk (in contrast to the writing of naked or uncovered options), but capable of enhancing the Fund's total return. When writing a covered call option, the Fund, in return for the premium, gives up the opportunity for profit from a price increase in the underlying security or currency above the exercise price, but conversely retains the risk of loss should the price of the security or currency decline. Unlike one who owns securities or currencies not subject to an option, the Fund has no control over when it may be required to sell the underlying securities or currencies, since it may be assigned an exercise notice at any time prior to the expiration of its obligation as a writer. If a call option, which the Fund has written, expires, the Fund will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security or currency during the option period. If the call option is exercised, the Fund will realize a gain or loss from the sale of the underlying security or currency. The Fund does not consider a security or currency covered by a call to be "pledged" as that term is used in the Fund's policy which limits the pledging or mortgaging of its assets.

The premium received is the market value of an option. The premium the Fund will receive from writing a call option will reflect, among other things, the current market price of the underlying security or currency, the relationship of the exercise price to such market price, the historical price volatility of the underlying security or currency, and the length of the option period. Once the decision to write a call option has been made, the Adviser, in determining whether a particular call option should be written on a particular security or currency, will consider the reasonableness of the anticipated premium and the likelihood that a liquid secondary market will exist for those options. The premium received by the Fund for writing covered call options will be recorded as a liability of the Fund. This liability will be adjusted daily to the option's current market value, which will be the latest sale price at the time at which the NAV per share of the Fund is computed (the close of the New York Stock Exchange ("NYSE")) or, in the absence of such sale, the latest asked price. The option will be terminated upon expiration of the option, the purchase of an identical option in a closing transaction, or delivery of the underlying security or currency upon the exercise of the option.

Closing transactions are typically effected in order to realize a profit on an outstanding call option, to prevent an underlying security or currency from being called, or, to permit the sale of the underlying security or currency. Furthermore, effecting a closing transaction will permit the Fund to write another call option on the underlying security or currency with either a different exercise price or expiration date or both. If the Fund desires to sell a particular security or currency from its portfolio on which it has written a call option, or purchased a put option, it will seek to effect a closing transaction prior to, or concurrently with, the sale of the security or currency. There is no assurance that the Fund will be able to effect such closing transactions at favorable prices. If the Fund cannot enter into such a transaction, it may be required to hold a security or currency that it might otherwise have sold. When the Fund writes a covered call option, it runs the risk of not being able to participate in the appreciation of the underlying securities or currencies above the exercise price, as well as the risk of being required to hold on to securities or currencies that are depreciating in value. This could result in higher transaction costs. The Fund will pay transaction costs in connection with the writing of options to close out previously written options. Such transaction costs are normally higher than those applicable to purchases and sales of portfolio securities.

The exercise price of the options may be below, equal to, or above the current market values of the underlying securities or currencies at the time the options are written. From time to time, the Fund may purchase an underlying security or currency for delivery in accordance with an exercise notice of a call option assigned to it, rather than delivering such security or currency from its portfolio. In such cases, additional costs may be incurred.

The Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from the writing of the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security or currency, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security or currency owned by the Fund.

**Writing Covered Put Options.** The Fund may write American or European style covered put options and purchase options to close out options previously written by the Fund. A put option gives the purchaser of the option the right to sell and the writer (seller) has the obligation to buy, the underlying security or currency at the exercise price during the option period (American style) or at the expiration of the option (European style). So long as the obligation of the writer continues, it may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring it to make payment of the exercise price against delivery of the underlying security or currency. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options.

A put option is considered "covered" if the Fund (i) maintains in a segregated account cash, U.S. Government securities or other liquid appropriate securities in an amount not less than the exercise price or (ii) owns an option to sell the underlying security or currency subject to the option having an exercise price equal to or greater than the exercise price of the "covered" option at all times while the put option is outstanding. (The rules of a clearing corporation currently require that such assets be deposited in escrow to secure payment of the exercise price.) The Fund would generally write covered put options in circumstances where the Adviser wishes to purchase the underlying security or currency for the Fund's portfolio at a price lower than the current market price of the security or currency. In such event the Fund would write a put option at an exercise price, which, reduced by the premium received on the option, reflects the lower price it is willing to pay. Since the Fund would also receive interest on debt securities or currencies maintained to cover the exercise price of the option, this technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying security or currency would decline below the exercise price less the premiums received. Such a decline could be substantial and result in a significant loss to the Fund. In addition, the Fund, because it does not own the specific securities or currencies, which it may be required to purchase in exercise of the put, cannot benefit from appreciation, if any, with respect to such specific securities or currencies.

If trading is interrupted in an underlying security, the trading of options on that security is usually halted as well. Holders and writers of options will then be unable to close out their positions until options trading resumes, and they may be faced with considerable losses if the security reopens at a substantially different price. Even if options trading is halted, holders of options will generally be able to exercise them. However, if trading has also been halted in the underlying security, option holders face the risk of exercising options without knowing the security's current market value. If exercises do occur when trading of the underlying security is halted, the party required to deliver the underlying security may be unable to obtain it, which may necessitate a postponed settlement and/or the fixing of cash settlement prices.

**REAL ESTATE INVESTMENT TRUSTS**

The Fund may invest in real estate investment trusts ("REITs"). Equity REITs invest directly in real property while mortgage REITs invest in mortgages on real property. REITS may also include operating or finance companies. REITs are subject to similar risks to those of direct investments in real estate and the real estate industry generally, including, without limitation, declines in the value of real estate, risks related to changes in general and local economic conditions, overbuilding and increased competition (including, without limitation, competition based on rental rates), increases in property taxes and operating expenses, variations in rental income, loss to casualty or condemnation, zoning law amendments, changes in interest rates, variations in market value, changes in the financial condition of tenants, changes in operating costs, attractiveness and location of properties, adverse changes in the real estate markets generally or in specific sectors of the real estate industry and possible environmental liabilities. REITs pay dividends to their shareholders based upon available funds from operations. It is quite common for these dividends to exceed a REIT's taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. To the extent that the Fund includes the gross dividends from such REITs in its distributions to its shareholders, a portion of the Fund's distributions may be deemed a return of capital. In addition, generally, REITs are subject to management fees and other expenses, and so when the Fund is invested in a REIT, the Fund might bear its proportionate share of the costs of the REIT's operations. REITs are also subject to additional risks associated with poor performance by the REIT's manager, changes to the tax laws, and failure by the REIT to qualify for tax-free distributions of income or exemption under the 1940 Act. Furthermore, REITs are not diversified and are heavily dependent on cash flow.

**REGULATORY MATTERS**

**Changing Fixed Income Market Conditions.** Changes in domestic policy may expose fixed-income and related markets to heightened volatility and may reduce liquidity for certain fixed income investments, including fixed income investments held by the Fund, which could cause the value of the Fund's investments and share price to decline and/or may decrease demand for Fund shares. This could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund's performance. To the extent that the Fund invests in derivatives tied to fixed income markets, the Fund will be more substantially exposed to these risks than a fund that does not invest in such derivatives.

**Regulatory Limitations.** The Fund will engage in futures contracts and options thereon only for bona fide hedging, yield enhancement, risk management purposes, or as otherwise permitted by the rules and regulations of the CFTC. The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, regulates the OTC derivatives market by, among other things, requiring many derivative transactions to be cleared, expanding entity registration requirements, imposing business conduct requirements on dealers and requiring banks to move some derivatives trading units to a non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether.

The Fund's investments in regulated derivatives instruments, such as swaps, futures and options, may be subject to maximum position limits established by the CFTC and U.S. and foreign futures exchanges. Under the exchange rules, all accounts owned or managed by advisers (such as the Adviser) or the Adviser's principals or affiliates would be combined for position limit purposes. To comply with the position limits established by the CFTC and the relevant exchanges, the Adviser may in the future reduce the size of positions that would otherwise be taken for the Fund or not trade in certain markets on behalf of the Fund to avoid exceeding such limits. A violation of position limits by the Adviser could lead to regulatory action resulting in mandatory liquidation of certain positions held by the Adviser on behalf of the Fund. There can be no assurance that the Adviser will liquidate positions held on behalf of all of the Adviser's accounts in a proportionate manner or at favorable prices, which may result in substantial losses to the Fund. Such policies could affect the nature and extent of derivatives use by the Fund.

**RESTRICTED SECURITIES AND RULE 144A** 

Restricted securities may be acquired in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the 1933 Act. Where registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than prevailed when it decided to sell. Restricted securities are generally illiquid, and will be priced at fair value as determined in accordance with procedures prescribed by the Board of Trustees of the Trust.

Restricted securities acquired by the Fund will generally be eligible for purchase and sale under Rule 144A under the 1933 Act. This rule permits certain qualified institutional buyers to trade in privately placed securities even though such securities are not registered under the 1933 Act. The Adviser, under the supervision of the Board of Trustees of the Trust, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the Fund's restriction of investing no more than 15% of its net assets in illiquid securities. A determination of whether a Rule 144A security is liquid or not is a question of fact. In making this determination, the Adviser will consider the trading markets for the specific security taking into account the unregistered nature of a Rule 144A security. In addition, the Adviser could consider: (1) the frequency of trades and quotes, (2) the number of dealers and potential purchases, (3) any dealer undertakings to make a market, and (4) the nature of the security and of marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). The liquidity of Rule 144A securities would be monitored, and if as a result of changed conditions it is determined that a Rule 144A security is no longer liquid, the Fund's holdings of illiquid securities would be reviewed to determine what, if any, steps are required to assure that the Fund does not invest more than 15% of its net assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of the Fund's assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.

**SECURITIES LENDING**

In order to generate additional income, the Fund may lend portfolio securities in an amount up to 33% of its total assets to broker-dealers, major banks, or other recognized domestic institutional borrowers of securities which Horizon has determined are creditworthy under guidelines established by the Board. In determining whether the Fund will lend securities, Horizon will consider all relevant facts and circumstances. The Fund may not lend securities to any company affiliated with Horizon. Each loan of securities will be collateralized by cash, securities or letters of credit. The Fund might experience a loss if the borrower of a security defaults on the loan or its other obligations.

The borrower at all times during the loan must maintain with the Fund cash or cash equivalent collateral, or provide to the Fund an irrevocable letter of credit, equal in value to at least 100% of the value of the securities loaned. While the loan is outstanding, the borrower will pay the Fund any interest paid on the loaned securities, and the Fund may invest the cash collateral to earn additional income. Alternatively, the Fund may receive an agreed-upon amount of interest income from the borrower who has delivered equivalent collateral or a letter of credit. It is anticipated that the Fund may share with the borrower some of the income received on the collateral for the loan or the Fund will be paid a premium for the loan. Loans are subject to termination at the option of the Fund or the borrower at any time. The Fund may pay reasonable administrative and custodial fees in connection with a loan, and may pay a negotiated portion of the income earned on the cash to the borrower or placing broker. The Fund might experience the risk of loss if the institution with which the Fund has engaged in a portfolio loan transaction breaches its agreement with the Fund. The principal risk of portfolio lending is potential default or insolvency of the borrower, and as with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower fail financially. 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 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.

The Fund participate in securities lending arrangements whereby the Fund lends certain of its portfolio securities to brokers, dealers and financial institutions (not with individuals) in order to receive additional income and increase the rate of return of its portfolio. U.S. Bank, N.A. serves as the Fund's securities lending agent, and it oversees the securities lending process, which includes the screening, selection and ongoing review of borrowers, monitoring the availability of securities, negotiating rebates, daily marking to market of loans, monitoring and maintaining cash collateral levels, processing securities movements and reinvesting cash collateral as directed by Horizon.

**SHORT SALES**

The Fund may sell securities short as part of its overall portfolio management strategies involving the use of derivative instruments and to offset potential declines in long positions in similar securities. A short sale involves the sale of a security that is borrowed from a broker or other institution to complete the sale. It is a transaction in which the Fund sells a security it does not own or has the right to acquire (or that it owns but does not wish to deliver) in anticipation that the market price of that security will decline.

When the Fund makes a short sale, the broker-dealer through which the short sale is made must borrow the security sold short and deliver it to the party purchasing the security. The Fund is required to make a margin deposit in connection with such short sales; the Fund may have to pay a fee to borrow particular securities and will often be obligated to pay over any dividends and accrued interest on borrowed securities. These types of short sales expenses are sometimes referred to as the "negative cost of carry," and will tend to cause the Fund to lose money on a short sale even in instances where the price of the security sold short does not change over the duration of the short sale.

If the price of the security sold short increases between the time of the short sale and the time the Fund covers its short position, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged. In addition, short sales expose the Fund to the risk that the Fund will be required to acquire, convert or exchange securities to replace the borrowed security (also known as "covering" the short position) at a time when the security sold short has appreciated in value, thus resulting in a loss to the Fund. The Fund's investment performance may also suffer if the Fund is required to close out a short position earlier than it had intended.

The Fund may sell securities short to the full extent permitted under the 1940 Act. A short sale is "against the box" to the extent the Fund contemporaneously owns, or has the right to obtain at no added cost, securities identical to those sold short.

**SWAP AGREEMENTS**

The Fund may enter into interest rate, index and currency exchange rate swap agreements in attempts to obtain a particular desired return at a lower cost to the Fund than if the Fund has invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are calculated with respect to a "notional amount", i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a "basket" of securities representing a particular index. The "notional amount" of the swap agreement is only a fictive basis on which to calculate the obligations the parties to a swap agreement have agreed to exchange. The Fund's obligations (or rights) under a swap agreement will generally be equal only to the amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount").

Swap transactions are subject to market risk, liquidity risk, risk of default by the other party to the transaction, known as "counterparty risk," regulatory risk and risk of imperfect correlation between the value of such instruments and the underlying assets and may involve commissions or other costs. Whether the Fund's use of swap agreements enhance the Fund's total return will depend on the Adviser's ability to correctly to predict whether certain types of investments are likely to produce greater returns than other investments. Because they are two-party contracts and may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Adviser will cause the Fund to enter into swap agreements only with counterparties that would be eligible for consideration as repurchase agreement counterparties under the Fund's repurchase agreement guidelines.

Swap agreements are primarily entered into by institutional investors and the value of such agreements may be extremely volatile. Certain swap agreements are traded OTC between two parties, while other more standardized swaps must be transacted through a futures commission merchant and centrally cleared or exchange-traded. While central clearing and exchange-trading are intended to reduce counterparty credit and liquidity risk, they do not make a swap transaction risk-free. The current regulatory environment regarding swap agreements is subject to change. The Adviser will continue to monitor these developments, particularly to the extent regulatory changes affect the Fund's ability to enter into or close out swap agreements. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund's ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

The swap market has matured in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid; however there is no guarantee that the swap market will continue to provide liquidity and may be subject to liquidity risk, which exists when a particular swap is difficult to purchase or sell. The absence of liquidity may also make it more difficult for the Fund to ascertain a market value for such instruments. The inability to close derivative positions also could have an adverse impact on the Fund's abilities to effectively hedge their respective portfolios. If the Adviser is incorrect in its forecasts of market values, interest rates or currency exchange rates, the investment performance of the Fund would be less favorable than it would have been if these investment techniques were not used.

Certain swap agreements are exempt from most provisions of the CEA and, therefore, are not regulated as futures or commodity option transactions under the CEA, pursuant to regulations of the CFTC. To qualify for this exemption, a swap agreement must be entered into by "eligible participants", which include the following, provided the participants' total assets exceed established levels: a bank or trust company, savings association or credit union, insurance company, investment company subject to regulation under the 1940 Act, commodity pool, corporation, partnership, proprietorship, organization, trust or other entity, employee benefit plan, governmental entity, broker-dealer, futures commission merchant, natural person, or regulated foreign person. To be eligible, natural persons and most other entities must have total assets exceeding $10 million; commodity pools and employees benefit plans must have assets exceeding $5 million. In addition, an eligible swap transaction must meet three conditions. First, the swap agreement may not be part of a fungible class of agreements that are standardized as to their material economic terms. Second, the creditworthiness of parties with actual or potential obligations under the swap agreement must be a material consideration in entering into or determining the terms of the swap agreement, including pricing, cost or credit enhancement terms. Third, swap agreements may not be entered into and traded on or through a multilateral transaction execution facility.

**Credit Default Swaps.** A credit default swap is a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is akin to a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments (essentially an insurance premium). If the third party defaults, the party providing insurance will have to purchase from the insured party the defaulted asset. In turn, the insurer typically pays the insured the remaining interest on the debt, as well as the principal. A credit default swap agreement may reference one or more debt securities or obligations that may not then be currently held by the Fund. If a credit event occurs under a swap referencing a corporate, sovereign or municipal reference obligation, the buyer typically receives the notional amount of the reference obligation subject to an obligation to physically deliver the notional amount of the reference obligation (or other permitted security) to the seller, which reference obligation (or other permitted security) may not be readily available to the buyer, in which case the buyer may forfeit its credit event payment. However, in many cases, the parties to the swap will agree to an industry-wide cash-settlement auction process. Following a credit event and the physical delivery or cash settlement thereof, a swap referencing a corporate, sovereign or municipal reference obligation will terminate. If a credit event occurs under a swap referencing an asset-backed security reference obligation, the buyer typically receives a payment calculated by reference to the principal write-downs and interest shortfalls under a notional amount of the reference obligation. In certain cases, the buyer may be required to make a payment calculated by reference to a write-up or recovery under a notional amount of the reference obligation, which may relate to a credit event that occurred prior to the time that the buyer entered into the swap. Swaps referencing asset-backed security reference obligations do not terminate following a credit event thereunder. If the Fund is a buyer and no credit event occurs, the Fund will have made payments under the swap and received nothing. If the Fund is a seller of protection under a credit default swap, the Fund effectively adds leverage to its portfolio because it gains exposure to the notional amount of the swap. Entering into a credit default swap may subject the Fund to greater risk than if the Fund had invested in the reference obligation directly. In addition to general market risks, credit default swaps also involve illiquidity risk, counter-party risk (for OTC swaps) and credit risk.

**DISCLOSURE OF PORTFOLIO HOLDINGS**

The Trust has adopted policies and procedures that govern the disclosure of the Fund's portfolio holdings. These policies and procedures are designed to ensure that such disclosure is in the best interests of Fund shareholders.

No sooner than sixty days after the end of each fiscal quarter or semi-annual period, the Fund will make available a complete schedule of its portfolio holdings as of the last day of the applicable period. The Trust currently files with the SEC a Form N-CSR or Form N-PORT report for each period, which discloses the Fund's portfolio holdings as of the end of the relevant quarter. Quarter-end portfolio holdings disclosed on Form N-PORT are made publicly available by the SEC 60 days after the end of each fiscal quarter.

The Fund and/or the Adviser may also, from time to time, make additional portfolio holdings information available to the public on the Fund's website at www.horizonmutualfunds.com. Complete lists of the Fund's holdings will typically be posted to the website approximately 30 days following the end of any calendar quarter or month and will remain available until new information for the next period is posted. The Fund may also send a portion or all of this information to its shareholders and to mutual fund analysts and rating and trading entities; provided that such information will not be sent to shareholders or analysts or rating and/or trading entities until the information is at least 30 days old or until one day after it has been posted to the Fund's website, if earlier.

Other than to rating agencies and service providers as described below, the Fund does not selectively disclose portfolio holdings to any person. In each case of advance disclosure, a determination has been made that such disclosure is supported by a legitimate business purpose and that the recipient is subject to a duty to keep the information confidential.

The following parties may have access to the Fund's portfolio holdings as necessary to provide their services to the Fund, and each is subject to confidentiality obligations:

● Personnel of the Adviser, including those responsible for portfolio management, who require full daily access to the Fund's portfolio holdings to provide investment management and related services. Adviser personnel may also discuss portfolio holdings with broker-dealers and research providers for purposes of trade execution and analysis.

● U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services"), which serves as the administrator, accounting agent, transfer agent, and dividend disbursing agent for the Fund.

● U.S. Bank, N.A. (the "Custodian"), which acts as custodian for the Fund.

● Cohen & Company, Ltd., the Fund's independent registered public accounting firm, in connection with the audit of the Fund's financial statements.

● Kilpatrick Townsend & Stockton LLP, counsel to the Fund, in connection with SEC filings, annual and semi-annual reports, and meetings of the Board of Trustees.

● Stradley Ronon Stevens & Young, LLP, counsel to the Independent Trustees of the Trust, in connection with SEC filings, reports, and Board meetings.

● ICE Data Services, which performs portfolio liquidity analysis for the Fund.

● Mutual fund rating agencies such as Morningstar and Lipper, which may receive the Fund's portfolio holdings, generally on a quarterly basis with a 30-day lag, and may make such information public at any time.

● The Investment Company Institute ("ICI"), which may receive monthly portfolio holdings information on a 30-day lag for purposes of industry data compilation and analysis.

The Fund's Chief Compliance Officer (or designee) may grant exceptions to permit additional disclosure of portfolio holdings information at differing times and with different lag periods, provided the disclosure serves a legitimate business purpose, is in the best interests of shareholders, and the recipient is subject to a duty of confidentiality and is required to execute an agreement not to trade based on the nonpublic information. The Board will be informed of any such disclosures at its next regularly scheduled meeting or as soon as reasonably practicable thereafter.

In no event will the Fund, the Adviser, or any other party receive any direct or indirect compensation in connection with the disclosure of information about the Fund's portfolio holdings.

There is no assurance that the Trust's policies on disclosure of portfolio holdings will protect the Fund from the potential misuse of holdings information by individuals or firms in possession of that information.

**MANAGEMENT OF THE TRUST**

**Trustees and Officers** 

The Board is responsible for the overall management of the Trust, including general supervision and review of the investment activities of the Fund. The Board, in turn, elects the Officers of the Trust, who are responsible for administering the day-to-day operations of the Trust and the Fund. The current Trustees and Officers of the Trust, their year of birth and positions with the Trust, term of office with the Trust and length of time served, their principal occupations for the past five years and other directorships held during the past five years are set forth in the following table. Those Trustees who are "interested persons" as defined in the 1940 Act and those Trustees who are identified in the table.

***<u>Independent Trustees</u>***

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Address\* and Year of Birth** | **Position/Term of Office** | **Principal Occupation**<br> **During the Past Five Years** | **Number of Portfolios in Fund Complex**<br> **Overseen by Trustee** | **Other Directorships held by Trustee**<br> **During the Past Five Years** |
| John W. Davidson<br> Year of Birth: 1946 | Trustee; Audit Committee Chair, Indefinite Term of Office (since 2015) | Creator, author and founder of John Davidson's Economic Comments (2009-2018). | 29 | Trustee, AdvisorOne Fund (7 portfolios).<br> (2012-2022) |
| Todd W. Gaylord<br> Year of Birth: 1975 | Trustee; Indefinite Term of Office (since 2015) | Consultant (financial services) since 2012; Owner, McCauley Street Partners, Inc. (real estate brokerage firm) (2009-2014); Corporate Bond, Syndicated Loan, and Credit Default Swap Trader, Wachovia Securities (2005-2008). | 29 |  |
| Thomas W. Okel<br> Year of Birth: 1962 | Trustee; Indefinite Term of Office (since 2015) | Executive Director (2011-2019), Catawba Lands Conservancy; Global Head of Syndicated Capital Markets (1998-2010), Bank of America Merrill Lynch. | 29 | Trustee, Barings Fund Trust (8 portfolios)<br> (2013-2021)<br> Trustee, Barings Global Short Duration High Yield Fund<br> (2011-current)<br> Trustee, Barings BDC, Inc.,<br> (2018-current)<br> Trustee, Barings Private Credit Corporation.<br> (2021-current)<br> Trustee, Barings Capital Investment Corporation<br> (2020-current)<br> Trustee, Barings Private Equity Opportunities & Commitments Fund<br> (2022-2023) |

---

\* The address for each Trustee and officer is 6210 Ardrey Kell Road, Suite 300, Charlotte, North Carolina 28277.

***<u>Interested Trustees and Officers</u>***

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Address\* and Year of Birth** | **Position/Term of Office** | **Principal Occupation**<br> **During the Past Five Years** | **Number of Portfolios in Fund Complex** <br> **Overseen by Trustee** | **Other Directorships held by Trustee During the Past Five Years** |
| John Drahzal \*\*<br> Year of Birth: 1966 | Interested Trustee Indefinite Term of Office (since 2021) and President; One Year Term of Office (since 2021) | CEO and President of Horizon Investments, LLC (CEO November 2021 - present and President December 2020- present); Various Positions at Horizon Investments (2017-2020). | 29 |  |
| Matthew Chambers<br> Year of Birth: 1976 | Vice President, Chief Compliance Officer and Secretary; One Year Term of Office (since 2015) | General Counsel and Chief Compliance Officer of Horizon Investments, LLC, December 2014-present; Attorney, Kilpatrick Townsend & Stockton, 2008 - 2014 | Not Applicable | Not Applicable |
| Steve Terry<br> Year of Birth: 1980 | Treasurer, Chief Financial Officer;<br> One Year Term<br> of Office (since October 2018) | Chief Financial Officer of Horizon Investments, LLC, November 2021- present; Head of Finance and Business Systems of Horizon Investments, LLC, August 2016-present; Co-Founder, Catamaran Investment Partners, 2015-August 2016; Principal, Intersection Partners, 2011-2015 | Not Applicable | Not Applicable |

---

\* The address for each Trustee and officer is 6210 Ardrey Kell Road, Suite 300, Charlotte, North Carolina 28277.

\*\* Mr. Drahzal is considered an "interested person" of the Trust, as defined in the 1940 Act, because of his current position with Horizon.

**The Role of the Board of Trustees**

The Board oversees the management and operations of the Trust. The day-to-day management and operation of the Trust is the responsibility of the various service providers to the Trust, such as Horizon, the Distributor, the Custodian and Fund Services (the transfer agent and administrator), each of whom are discussed in greater detail in this Statement of Additional Information. The Board has appointed various senior employees of Horizon as officers of the Trust, with responsibility to monitor and report to the Board regarding certain of the Trust's operations. In conducting this oversight, the Board receives regular reports from these officers and the service providers. The Board has appointed a Chief Compliance Officer ("CCO") who administers the Trust's compliance program and regularly reports to the Board as to compliance matters. These reports are provided as part of the Board's regular quarterly Board Meetings, which are typically held quarterly, in person, and involve the Board's review of recent operations.

**Board Leadership Structure** 

The Board has structured itself in a manner that it believes allows it to perform its oversight function effectively. The Trust's Board includes three Independent Trustees and one Interested Trustee. Mr. Okel, an Independent Trustee, serves as Chair of the Board. The Board has determined that this is an appropriate structure for the Trust because, among other things, the Board's small size and the small number of Fund in the Trust permit Trust management to communicate with each independent Trustee as and when needed, and permit each Independent Trustee to be involved in each committee of the Board (each a "Committee") as well as each Board function.

The Board has established a committee structure that includes an Audit Committee, Nominating Committee and a Proxy Voting Committee (discussed in more detail below). Each Committee is comprised entirely of Independent Trustees.

The Board reviews annually the structure and operation of the Board and its Committees. The Board has determined that the composition of the Board and the function and composition of its various Committees provide the appropriate means and communication channels to address any potential conflicts of interest that may arise.

**Board Oversight of Risk Management**

Through the Board's direct oversight role and the officers and service providers of the Fund, the Board performs a risk oversight function for the Fund. To effectively perform its risk oversight function, the Board, among other things, performs the following activities: receives and reviews reports related to the performance and operations of the Fund; reviews and approves, as applicable, the compliance policies and procedures of the Fund; approves the Fund's principal investment policies; meets with representatives of various service providers, including Horizon and the independent registered public accounting firm of the Fund, to review and discuss the activities of the Fund and to provide direction with respect thereto; and appoints a CCO of the Fund who oversees the implementation and testing of the Fund's compliance program and reports to the Board regarding compliance matters for the Fund and their service providers. The Board holds four regular meetings each year to consider and address matters involving the Trust and Fund. As part of its oversight function, the Board also may hold special meetings or communicate directly with Trust management or the CCO to address matters arising between regular meetings.

Not all risks that may affect the Fund can be identified nor can controls be developed to eliminate or mitigate their occurrence or effects. It may not be practical or cost effective to eliminate or mitigate certain risks, the processes and controls employed to address certain risks may be limited in their effectiveness, and some risks are simply beyond the reasonable control of the Fund, Horizon or other service providers. Moreover, it is necessary to bear certain risks (such as investment-related risks) to achieve the Fund's goals. As a result of the foregoing and other factors, the Fund's ability to manage risk is subject to substantial limitations.

**Information about Each Trustee's Qualification, Experience, Attributes or Skills** 

The Board believes that each of the Trustees has the qualifications, experience, attributes and skills ("Trustee Attributes") appropriate to their continued service as Trustees of the Trust in light of the Board's function and the Trust's business and structure. The Board annually conducts a "self-assessment" wherein the effectiveness of the Board is reviewed.

In addition to the information provided in the prior chart, below is certain additional information concerning each particular Trustee and his/her Trustee Attributes.

*John Drahzal.* Mr. Drahzal has been the President of Horizon since December 2020 and the CEO of Horizon and President of the Trust since November 2021. Previously, Mr. Drahzal served as head of distribution for Prudential Investments, and President of Reich & Tang, an investment affiliate of Natixis Global Asset Management. Mr. Drahzal began his career at Victory Asset Management where he helped launch their mutual fund business, The Victory Fund.

*John W. Davidson.* Mr. Davidson served as the lead independent trustees for AdvisorOne Fund from 2012-2022. He has received the CFA designation and has over 35 years of industry experience, including positions with investment management responsibility for separate institutional accounts, mutual funds, trusts, and insurance assets. Mr. Davidson was most recently the President of PartnerRe Asset Management Corporation.

*Todd W. Gaylord.* Mr. Gaylord has received CPA (inactive) and CFA designations, and worked in various capacities on trading floors for Bank of America and Wachovia Securities from 1999-2008 trading corporate bonds, syndicated loans, and credit default swaps. In recent years he has been active in real estate and private equity investing, as well as financial consulting.

*Thomas W. Okel.* Mr. Okel was most recently the Executive Director of Catawba Lands Conservancy, which is a nonprofit land trust that works with willing landowners to save land in North Carolina's Southern Piedmont to preserve a healthy, natural environment for future generations. He is also a trustee of Barings Global Short Duration High Yield Fund, Barings BDC, Inc., Barings Capital Investment Corporation, and Barings Private Credit Corporation, and was formerly a Trustee of the Barings Fund Trust and the Barings Private Equity Opportunities & Commitments Fund. Tom previously served as Global Head of Syndicated Capital Markets at Bank of America Merrill Lynch and managed capital markets, sales, trading and research for the United States, Europe, Asia and Latin America.

The Board has determined that each of the Trustees' careers and background, combined with their interpersonal skills and general understanding of financial and other matters, enable the Trustees to effectively participate in and contribute to the Board's functions and oversight of the Trust. References to the qualifications, attributes and skills of Trustees are pursuant to requirements of the SEC, do not constitute holding out the Board or any Trustee as having any special expertise or experience, and shall not impose any greater responsibility on any such person or on the Board by reason thereof.

**Trustee Standing Committees**

The Board has established the following standing committees:

*Audit Committee.* The Independent Trustees are the current members of the Audit Committee. The Audit Committee oversees the Fund's accounting and financial reporting policies and practices, reviews the results of the annual audits of the Fund's financial statements, and interacts with the Fund's independent auditors on behalf of the Board. The Audit Committee also serves in the role of the Trust's qualified legal compliance committee and, as such, receives, investigates and makes recommendations as to appropriate remedial action in connection with, any report of evidence of a material violation of securities laws or breach of fiduciary duty or similar violation by the Trust, its officers, trustees or agents. The Audit Committee operates pursuant to an Audit Committee Charter and meets periodically as necessary. The Audit Committee met two times during the last fiscal year.

 

*Nominating Committee.* The Independent Trustees are the current members of the Nominating Committee. The Nominating Committee nominates, selects, and appoints Independent Trustees to fill vacancies on the Board and to stand for election at appropriate meetings of the shareholders of the Trust. The Nominating Committee meets only as necessary. The Nominating Committee generally will not consider nominees recommended by shareholders of the Trust. The Nominating Committee did not meet during the last fiscal year.

 

*Proxy Voting Committee.* The Independent Trustees are the current members of the Proxy Voting Committee. The Proxy Voting Committee will determine how the Fund should cast its vote, if called upon by the Board or the Adviser, when a matter with respect to which the Fund is entitled to vote presents a conflict between the interests of the Fund's shareholders, on the one hand, and those of the Adviser, principal underwriter or an affiliated person of the Fund, the Adviser, or principal underwriter, on the other hand. The Proxy Voting Committee will review the Trust's Proxy Voting and Disclosure Policy and recommend any changes to the Board as it deems necessary or advisable. The Proxy Voting Committee will also decide if the Fund should participate in a class action settlement, if called upon by the Adviser, in cases where a class action settlement with respect to which the Fund is eligible to participate presents a conflict between the interests of the Fund's shareholders, on the one hand, and those of the Adviser, on the other hand. The Proxy Voting Committee meets only as necessary. The Proxy Voting Committee did not meet during the last fiscal year.

 

**Compensation of Trustees**

The Trust pays each Trustee of the Trust who is not an interested person an annual retainer of $110,000 for each fiscal year plus $10,000 for attendance at each quarterly board meeting. Prior to January 1, 2025, the Trust paid each Trustee of the Trust who is not an interested person an annual retainer of $85,000 for each fiscal year plus $10,000 for attendance at each quarterly board meeting. The Trust also reimburses the Trustees for travel and other expenses incurred in attending meetings of the Board. Trustees who are interested persons of the Trust do not receive any direct compensation from the Trust. No other compensation or retirement benefits are received by any Trustee from the Fund.

As the Fund had not commenced operations prior to the date of this SAI, none of the Trustees have received any compensation with respect to the Fund, however, the table below reflects the amount of compensation received by each Trustee from all funds in the Trust during the fiscal year ended November 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Trustee** | **Aggregate**<br> **Compensation**<br> **from Funds** | **Pension or**<br> **Retirement**<br> **Benefits**<br> **Estimated**<br> **Accrued as Part**<br> **of Trust Expense** | **Annual**<br> **Benefits**<br> **Upon**<br> **Retirement** | **Total**<br> **Compensation**<br> **From Registrant**<br> **and Fund**<br> **Complex Paid To**<br> **Trustees** |
| John Drahzal (Interested Trustee) | $0 | $0 | $0 | $0 |
| John W. Davidson | $150000 | $0 | $0 | $150000 |
| Todd W. Gaylord | $150000 | $0 | $0 | $150000 |
| Thomas W. Okel | $150000 | $0 | $0 | $150000 |

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The Trustees serve on the Board for terms of indefinite duration. A Trustee's position in that capacity will terminate if such Trustee is removed, resigns or is subject to various disabling events such as death or incapacity.

**Trustee Ownership of Fund Shares and Other Interests** 

As the Fund had not commenced operations prior to the date of this SAI, none of the Trustees have beneficially owned any shares of the Fund, however, the table below reflects the aggregate dollar range of equity securities in all funds in the Trust owned by the Trustees as of December 31, 2025, stated as one of the following ranges: A = None; B = $1–$10,000; C = $10,001–$50,000; D = $50,001–$100,000; and E = over $100,000.

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| |
|:---|
| **Name of Fund** |
| **Expedition Plus Fund** |
| **Landmark Fund** C |
| **Dividend Income Fund** |
| **Core Equity Fund** |
| **Managed Risk Fund** |
| **Core Bond Fund** |
| **Flexible Income Fund** |
| **NASDAQ-100 Defined Risk Fund** |
| **Digital Frontier Fund** C |
| **Small/Mid Cap Core Equity Fund** |
| **International Equity Fund** |
| **International Managed Risk Fund** |
| **Active Asset Allocation Fund** C |
| **Active Risk Assist Fund** C |
| **Active Income Fund** |
| **Equity Premium Income Fund** |
| **Defined Risk Fund** |
| **Multi-Factor U.S. Equity Fund** |
| **Defensive Core Fund** |
| **Tactical Income Fund** |
| **Multi-Factor Small/Mid Cap Fund** |
| **Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies** |

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The Trustees serve on the Board for terms of indefinite duration. A Trustee's position in that capacity will terminate if such Trustee is removed, resigns or is subject to various disabling events such as death or incapacity.

**Ownership of Fund Affiliates**

Neither the Independent Trustees nor members of their immediate family, own securities beneficially or of record in Horizon, the Fund's principal underwriter, or any of their affiliates. Accordingly, during the two most recently completed calendar years, neither the Independent Trustees nor members of their immediate family, have had a direct or indirect interest, the value of which exceeds $120,000, in Horizon, the Trust's principal underwriter or any of its affiliates.

**CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES**

A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding shares of the Fund. A control person is one who owns beneficially or through controlled companies more than 25% of the voting securities of a company or acknowledges the existence of control. Shareholders with a controlling interest could affect the outcome of voting or the direction of management of the Fund.

As a new Fund, there were no shareholders who beneficially or of record owned 5% or more of the outstanding shares of any class of the Fund.

The Trustees and officers of the Trust as a group did not own more than 1% of the outstanding shares of the Fund or Predecessor Fund.

As of February 28, 2026, the name and percentage ownership of each shareholder that owned 5% or more of the outstanding shares of the Predecessor Fund is set forth in the table below:

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| | |
|:---|:---|
| **Name & Address** | ***Percentage of Fund Share Class*** |
| **Anfield Universal Fixed Income Fund - Class A Shares** | **Anfield Universal Fixed Income Fund - Class A Shares** |
| Charles Schwab & CO<br> 211 Main Street<br> San Francisco, CA 94105 | *24.09%* |
| LPL Financial<br> P.O. Box 509046<br> San Diego, CA 92150 | *7.23%* |
| Pershing LLC<br> P.O. Box 2052<br> Jersey City, NJ 07303 | *41.53%* |
| **Anfield Universal Fixed Income Fund - Class I Shares** | **Anfield Universal Fixed Income Fund - Class I Shares** |
| Charles Schwab & CO<br> 211 Main Street<br> San Francisco, CA 94105 | *77.88%* |
| **Anfield Universal Fixed Income Fund - Class C Shares** | **Anfield Universal Fixed Income Fund - Class C Shares** |
| LPL Financial<br> P.O. Box 509046<br> San Diego, CA 92150 | *62.57%* |
| Pershing LLC<br> P.O. Box 2052<br> Jersey City, NJ 07303 | *37.43%* |

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**INVESTMENT MANAGEMENT AND OTHER SERVICES**

**Investment Adviser**

Horizon Investments, LLC, a South Carolina limited liability company, serves as investment adviser to the Fund. Horizon has been an investment adviser since 1995, and serves individuals, mutual funds, employee benefit plans, trusts and corporations. Horizon maintains its principal offices at 6210 Ardrey Kell Road, Suite 300, Charlotte, North Carolina 28277. Under the terms of its Investment Advisory Agreement with the Fund, Horizon is responsible for formulating the Fund's investment program and making day-to-day investment decisions. Horizon provides office space, services and equipment and assistance in supervising matters relating to the Fund's operations. Horizon is controlled by ACP Horizon Holdings, L.P., an entity affiliated with Altamont Capital Management, LLC, a private investment firm. As of December 31, 2025, Horizon managed approximately $8.9 billion in client assets.

In addition to the duties set forth in the Prospectus under the section entitled "Management", Horizon, in furtherance of such duties and responsibilities, is authorized in its discretion to engage in the following activities: (i) develop a continuing program for the management of the assets of the Fund; (ii) buy, sell, exchange, convert, lend, or otherwise trade in portfolio securities and other assets; (iii) place orders, negotiate commissions for the execution of transactions in securities and establish relationships with or through broker-dealers, underwriters, or issuers; (iv) prepare and supervise the preparation of shareholder reports and other shareholder communications; and (v) obtain and evaluate business and financial information in connection with the exercise of its duties.

Subject to policies established by the Board, which has overall responsibility for the business and affairs of the Fund, Horizon manages the operations of the Fund. In addition to providing advisory services, Horizon furnishes the Fund with office space and certain facilities and personnel required for conducting the business of the Fund.

**Investment Advisory Agreement**

The Investment Advisory Agreement will continue in effect for two (2) years initially and thereafter shall continue from year to year provided such continuance is approved at least annually by (a) a vote of the majority of the Independent Trustees, cast in person at a meeting specifically called for the purpose of voting on such approval and by (b) the majority vote of either all of the Trustees or the vote of a majority of the outstanding shares of the Fund. The Advisory Agreement may be terminated without penalty on 60 days' written notice by a vote of a majority of the Trustees or by Horizon, or by holders of a majority of the Fund's outstanding shares. The Advisory Agreement shall terminate automatically in the event of its "assignment," as such term is defined in the 1940 Act.

For the advisory services provided and expenses assumed by it, Horizon has agreed to a fee computed daily and payable monthly at an annual rate of 0.80% of the Fund's average daily net assets.

As of the date of this SAI, the Fund has not commenced operations and the Fund has not paid management fees to the Adviser.

The Predecessor Fund paid the following advisory fees to the Predecessor Adviser for the periods indicated:

**Universal Fixed Income Predecessor Fund** 

For the fiscal year ended October 31, 2023: $997,524, net of waivers in place during the period

For the fiscal year ended October 31, 2024: $1,115,332, net of waivers in place during the period

For the fiscal year ended October 31, 2025: $1,198,200, net of waivers in place during the period

**Expense Limitation Agreement**

Horizon has agreed to waive its advisory fee and reimburse expenses to limit total operating expenses of the Fund, at least until March 31, 2029, so that direct expenses (exclusive of front-end or contingent deferred loads; brokerage fees and commissions; acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); payments, if any, under a Rule 12b-1 Distribution Plan; expenses paid with securities lending expense offset credits; taxes; and extraordinary expenses (such as litigation)) of the Fund will not exceed, 0.99% with respect to each of the Adviser Class, Investor Class and Institutional Class shares, subject to the terms of the applicable expense limitation agreement. After the expiration of the contractual expense limitation, total annual fund operating expenses may increase if Horizon does not renew or maintain the cap or waiver.

Any fees waived or expenses reimbursed are subject to possible recoupment by Horizon within 36 months after such fees have been waived or expenses reimbursed, if such recoupment can be achieved without exceeding the lower of the expense limit in place at the time of the waiver or reimbursement and the expense limit in place at the time of recoupment.

If Horizon waives any fee or reimburses any expense pursuant to a waiver agreement, and the Fund's operating expenses are subsequently less than its respective limit described in the waiver agreement, Horizon shall be entitled to reimbursement by the Fund. If the Fund's operating expenses subsequently exceed 0.99%, the reimbursements shall be suspended. Horizon may seek reimbursement only for expenses waived or paid by it during the 36 months prior to such reimbursement; provided, however, that such expenses may only be reimbursed to the extent they were waived or paid after the date of the waiver agreement (or any similar agreement). No amounts will be paid to Horizon in any fiscal quarter unless the Board determines that reimbursement is in the best interests of the Fund and its shareholders.

**ADMINISTRATOR**

Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202, acts as the Fund's administrator pursuant to an administration agreement (the "Administration Agreement"). Fund Services provides certain administrative services to the Fund, including, among other responsibilities, coordinating the negotiation of contracts and fees with, and the monitoring of performance and billing of, the Fund's independent contractors and agents; preparation for signature by an officer of the Trust of all documents required to be filed for compliance by the Trust and the Fund with applicable laws and regulations excluding those of the securities laws of various states; arranging for the computation of performance data, including NAV and yield; responding to shareholder inquiries; and arranging for the maintenance of books and records of the Fund, and providing, at its own expense, office facilities, equipment and personnel necessary to carry out its duties. 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 Fund shares.

As the Fund had not commenced operations prior to the date of this SAI, no fees were paid to the Administrator.

With respect to the Predecessor Fund, during the fiscal years indicated below, Two Roads Shared Trust paid administration fees to Ultimus Fund Solutions, LLC, the Predecessor Fund's administrator and fund accountant, as follows:

● For the fiscal year ended October 31, 2023, the Fund paid $206,664 for fund accounting services, $38,816 for administrative services and $169,062 for transfer agency services.

● For the fiscal year ended October 31, 2024, the Fund paid $287,075 for fund accounting services, $42,975 for administrative services and $75,179 for transfer agency services.

● For the fiscal year ended October 31, 2025, the Fund paid $43,459 for fund accounting services, $241,140 for administrative services and $42,919 for transfer agency services.

**CUSTODIAN**

U.S. Bank, NA, (the "Custodian") serves as the Custodian of the Trust's assets pursuant to a Custody Agreement by and between the Custodian and the Trust. The Custodian's responsibilities include safeguarding and controlling the Trust's cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on the Trust's investments. Pursuant to the Custody Agreement, the Custodian also provides certain accounting and pricing services to the Trust; maintaining original entry documents and books of record and general ledgers; posting cash receipts and disbursements; reconciling bank account balances monthly; recording purchases and sales based upon communications from the Adviser; and preparing monthly and annual summaries to assist in the preparation of financial statements of, and regulatory reports for, the Trust. The Trust may employ foreign sub-custodians that are approved by the Board of Trustees to hold foreign assets. The Custodian is located at 1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212. Fund Services and the Custodian are affiliates.

**TRANSFER AGENT SERVICES**

Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202, acts as the Fund's transfer agent and dividend disbursing agent.

**DISTRIBUTION OF SHARES**

Quasar Distributors, LLC (the "Distributor"), 3 Canal Plaza, Suite 100, Portland, Maine 04101, serves as the distributor in connection with the continuous offering of the Fund's shares. The Distributor and participating dealers with whom it has entered into dealer agreements offer shares of the Fund as agents on a best efforts basis and are not obligated to sell any specific amount of shares. Currently, Horizon compensates the Distributor for services that the Distributor provides to the Fund.

**SECURITIES LENDING AGENT**

The Board of Trustees has approved the Fund's participation in a securities lending program. Under the securities lending program, U.S. Bank, N.A. serves as securities lending agent for the Fund and in that role administers the Fund's securities lending program pursuant to the terms of a Master Securities Lending Agreement entered into between the Fund and U.S. Bank, N.A. For its services as securities lending agent, the Fund pay to U.S. Bank, N.A. a share of the revenue generated from the Fund's securities lending program. Additionally, an affiliate and wholly-owned subsidiary of U.S. Bank, N.A. receives compensation from the Fund for managing the pooled investment vehicle into which cash collateral from the Fund's securities lending program is invested. The net income to which the Fund is entitled pursuant to the securities lending program may be used to offset against costs and other charges incurred by the Fund with the Custodian or its affiliates or, as directed in writing by the Fund, other service providers.

As securities lending agent, U.S. Bank, N.A. is responsible for marketing to approved borrowers available securities from Fund portfolios. U.S. Bank, N.A. is responsible for the administration and management of the Fund's securities lending program, including the preparation and execution of a participant agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented with the Fund's custodian, ensuring that loaned securities are daily valued and that the corresponding required cash collateral of at least 102% of the current market value of the loaned securities is delivered by the borrower(s), using best efforts to obtain additional collateral on the next business day if the value of the collateral falls below the required amount, and arranging for the investment of cash collateral received from borrowers in accordance with the Fund's investment guidelines.

The Fund has no income to report from securities lending activities because they had not commenced operations prior to the date of this SAI. The Predecessor Fund did not generate any income for securities lending activities during the fiscal year ended October 31, 2025.

**CODES OF ETHICS**

The Trust, Horizon, and the Distributor each have adopted codes of ethics under Rule 17j-1 under the 1940 Act that governs the personal securities transactions of their board members, officers and employees who may have access to current trading information of the Trust. The codes of ethics permit personnel subject thereto to invest in securities, including securities that may be purchased or held by the Fund, subject to certain restrictions. The codes of ethics requires access persons (other than independent Trustees) to pre-clear most transactions and to report transactions and security holdings to the Fund's chief compliance officer. In addition, the Trust has adopted a code of ethics, which applies only to the Trust's executive officers to ensure that these officers promote professional conduct in the practice of corporate governance and management.

**PROXY VOTING POLICIES AND PROCEDURES**

The Trust has adopted a proxy voting and disclosure policy that delegates to Horizon the authority to vote proxies for the Fund, subject to oversight of the Board. The Trust's proxy voting policy appears in Appendix A and Horizon's proxy voting policy appears in Appendix B.

No later than August 31 of each year, the Trust files Form N-PX with the SEC. Form N-PX states how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30. Each Fund's proxy voting records, as set forth in its most recent Form N-PX filing, are available upon request, without charge, by calling the Fund at 1-855-754-7932. This information is also available on the SEC's website at http://www.sec.gov.

**PORTFOLIO MANAGERS**

**Other Accounts**

The following table identifies, for each portfolio manager of the Fund, the number of other accounts managed (excluding the Fund) and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles and other accounts. Information in the table is shown as of October 31, 2025. Asset amounts are approximate and have been rounded. None of the portfolio managers manage accounts with performance-based fees.

\* *Cyrille Conseil*

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| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of<br> Accounts by<br> Account Type** | **Total Assets By<br> Account Type(in<br> millions)** | **Number of<br> Accounts by<br> Account Type<br> Subject to a<br> Performance Fee** | **Total Assets By<br> Account Type<br> Subject to a<br> Performance Fee** |
| Registered Investment Companies | 3 | $396 | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | 0 | 0 | $0 |
| Other Accounts | 1 | $12 | 0 | $0 |

---

\* Mr. Conseil generally utilizes a team based approach to managing other pooled investment vehicles and other accounts. The portfolio manager is jointly and primarily responsible for the management of the total assets and number of accounts shown.

*Peter van de Zilver*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of<br> Accounts by<br> Account Type** | **Total Assets By<br> Account Type(in<br> millions)** | **Number of<br> Accounts by<br> Account Type<br> Subject to a<br> Performance Fee** | **Total Assets By<br> Account Type<br> Subject to a<br> Performance Fee** |
| Registered Investment Companies | 5 | $551 | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | 0 | 0 | $0 |
| Other Accounts | 1087 | $683 | 0 | $0 |

---

*David Young*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of<br> Accounts by<br> Account Type** | **Total Assets By<br> Account Type(in<br> millions)** | **Number of<br> Accounts by<br> Account Type<br> Subject to a<br> Performance Fee** | **Total Assets By<br> Account Type<br> Subject to a<br> Performance Fee** |
| Registered Investment Companies | 5 | $551 | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | 0 | 0 | $0 |
| Other Accounts | 1087 | $683 | 0 | $0 |

---

 

*Cameron Baxter*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of<br> Accounts by<br> Account Type** | **Total Assets By<br> Account Type(in<br> millions)** | **Number of<br> Accounts by<br> Account Type<br> Subject to a<br> Performance Fee** | **Total Assets By<br> Account Type<br> Subject to a<br> Performance Fee** |
| Registered Investment Companies | 4 | $396 | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | 0 | 0 | $0 |
| Other Accounts | 1 | $12 | 0 | $0 |

---

**Conflicts of Interest**

When a portfolio manager has responsibility for managing more than one account, potential conflicts of interest may arise. Those conflicts could include preferential treatment of one account over others in terms of allocation of resources or of investment opportunities. For instance, Horizon may receive fees from certain accounts that are higher than the fee it receives from the Fund. In those instances, the portfolio manager may have an incentive to favor the higher fee accounts over the Fund. Horizon has adopted policies and procedures designed to address these potential material conflicts. For instance, portfolio managers within Horizon are normally responsible for all accounts within a certain investment discipline, and do not, absent special circumstances, differentiate among the various accounts when allocating resources. Additionally, Horizon and its advisory affiliates utilize a system for allocating investment opportunities among portfolios that is designed to provide a fair and equitable allocation.

**Compensation**

The compensation of Horizon's portfolio managers include an annual fixed salary, which is based on various market factors and the skill and experience of the individual, and a discretionary bonus. The discretionary bonus takes into account several factors including Horizon's profitability (net income and ability to pay a bonus), the value and number of accounts/portfolios overseen by the portfolio manager, the general performance of client accounts relative to market conditions and the performance of the Fund based on percent return, adjusted for dividends and capital gains, calculated on a pre-tax basis relative to the performance of the Fund's relevant benchmarks and competitors for the preceding one year period, or shorter if the Fund has not operated for these periods. The formula for determining these amounts may vary, and no individual's compensation is solely tied to the investment performance or asset value of any one product or strategy.

**Ownership of Fund Shares**

No portfolio manager ownership information in the Fund is provided because the Fund had not commenced operations prior to the date of this SAI.

**The following table shows the dollar range of equity securities beneficially owned by the portfolio managers in the Predecessor Fund as of October 31, 2025:** 

---

| | |
|:---|:---|
| **Name of Portfolio Manager** | **Dollar Range of Equity<br> Securities in the Fund** |
| Cyrille Conseil |  |
| Peter van de Zilver |  |
| David Young | $10001-$50000 |
| Cameron Baxter |  |

---

**BROKERAGE ALLOCATION AND OTHER PRACTICES**

Subject to the general supervision of the Board of Trustees of the Trust, the Adviser is responsible for making decisions with respect to the purchase and sale of portfolio securities on behalf of the Fund. The Adviser is also responsible for the implementation of those decisions, including the selection of broker-dealers to effect portfolio transactions, the negotiation of commissions and the allocation of principal business and portfolio brokerage. In purchasing and selling the Fund's portfolio securities, it is the Adviser's policy to obtain quality execution at the most favorable prices through responsible broker-dealers and, in the case of agency transactions, at competitive commission rates where such rates are negotiable. However, under certain conditions, the Fund may pay higher brokerage commissions in return for brokerage and research services. In selecting broker-dealers to execute the Fund's portfolio transactions, consideration is given to a number of factors, including, without limitation: the price of the security; the rate of the commission; the size and difficulty of the order; the reliability, integrity, financial condition, general execution and operational capabilities of competing broker-dealers; the broker-dealers' expertise in particular markets; the brokerage and research services they provide to the Adviser or the Fund; and other factors that may be specific to any particular transaction. It is not the policy of the Adviser to seek the lowest available commission rate where it is believed that a broker or dealer charging a higher commission rate would offer greater reliability or provide better price or execution.

Transactions on stock exchanges involve the payment of brokerage commissions. In transactions on stock exchanges in the United States, these commissions are negotiated. Traditionally, commission rates have generally not been negotiated on stock markets outside the United States. In recent years, however, an increasing number of overseas stock markets have adopted a system of negotiated rates, although a number of markets continue to be subject to an established schedule of minimum commission rates. It is expected that equity securities will ordinarily be purchased in the primary markets, whether over-the-counter or listed, and that listed securities may be purchased in the over-the-counter market if such market is deemed the primary market. In the case of securities traded on the over-the-counter markets, there is generally no stated commission, but the price usually includes an undisclosed commission or markup. In underwritten offerings, the price includes a disclosed, fixed commission or discount.

For fixed income securities, it is expected that purchases and sales will ordinarily be transacted with the issuer, the issuer's underwriter, or with a primary market maker acting as principal on a net basis, with no brokerage commission being paid by the Fund. However, the price of the securities generally includes compensation, which is not disclosed separately. Transactions placed through dealers who are serving as primary market makers reflect the spread between the bid and asked prices.

With respect to equity and fixed income securities, the Adviser may effect principal transactions on behalf of the Fund with a broker or dealer who furnishes brokerage and/or research services, designate any such broker or dealer to receive selling concessions, discounts or other allowances or otherwise deal with any such broker or dealer in connection with the acquisition of securities in underwritings. The price the Fund pays to underwriters of newly-issued securities usually includes a concession paid by the issuer to the underwriter. The Adviser may receive research services in connection with brokerage transactions, including designations in fixed price offerings.

The Adviser receives a wide range of research services from brokers and dealers covering investment opportunities throughout the world, including information on the economies, industries, groups of securities, individual companies, statistics, political developments, technical market action, pricing and appraisal services, and performance analyses of all the countries in which the Fund's portfolio is likely to be invested. The Adviser cannot readily determine the extent to which commissions charged by brokers reflect the value of their research services, but brokers occasionally suggest a level of business they would like to receive in return for the brokerage and research services they provide. To the extent that research services of value are provided by brokers, the Adviser may be relieved of expenses, which it might otherwise bear. In some cases, research services are generated by third parties but are provided to the Adviser by or through brokers.

When one or more brokers is believed capable of providing the best combination of price and execution, the Fund's Adviser may select a broker based upon brokerage or research services provided to the Adviser. The Adviser may pay a higher commission than otherwise obtainable from other brokers in return for such services only if a good faith determination is made that the commission is reasonable in relation to the services provided.

Section 28(e) of the Securities Exchange Act of 1934 permits the Adviser, 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. In addition to agency transactions, the Adviser may receive brokerage and research services in connection with certain riskless principal transactions, in accordance with applicable SEC guidance. Brokerage and research services include: (1) furnishing advice as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and (3) effecting securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody). In the case of research services, the Adviser believes that access to independent investment research is beneficial to their investment decision-making processes and, therefore, to the Fund.

To the extent research services may be a factor in selecting brokers, such services may be in written form or through direct contact with individuals and may include information as to particular companies and securities as well as market, economic, or institutional areas and information which assists in the valuation and pricing of investments. Examples of research-oriented services for which the Adviser might utilize Fund commissions include research reports and other information on the economy, industries, sectors, groups of securities, individual companies, statistical information, political developments, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance and other analysis. The Adviser may use research services furnished by brokers in servicing all client accounts and not all services may necessarily be used in connection with the account that paid commissions to the broker providing such services. Information so received by the Adviser will be in addition to and not in lieu of the services required to be performed by the Adviser under the Advisory Agreement. Any advisory or other fees paid to the Adviser are not reduced as a result of the receipt of research services. Portfolio securities will not be purchased from or sold to the Adviser or the Distributor, or any affiliated person or any of them acting as principal, except to the extent permitted by rule or order of the SEC.

As of the date of this SAI, the Fund has not yet commenced operations, and the Fund has not paid brokerage commissions. For the fiscal year ended October 31, 2023, the Predecessor Fund paid $350 in brokerage commissions. For the fiscal year ended October 31, 2024, the Predecessor Fund paid $0 in brokerage commissions. For the fiscal year ended October 31, 2025, the Predecessor Fund paid $0 in brokerage commissions.

**Brokerage with Fund Affiliates.**

As of the date of this SAI, the Fund has not yet commenced operations and the Fund did not pay brokerage commissions to any registered broker-dealer affiliates of the Fund, the Adviser, or the Distributor.

**Securities of "Regular Broker-Dealer."**

The Fund is required to identify any securities of their "regular brokers and dealers" (as such term is defined in the 1940 Act) which it may hold at the close of its most recent fiscal year. "Regular brokers or dealers" of the Trust are the ten brokers or dealers that, during the most recent fiscal year: (i) received the greatest dollar amounts of brokerage commissions from the Trust's portfolio transactions; (ii) engaged as principal in the largest dollar amounts of portfolio transactions of the Trust; or (iii) sold the largest dollar amounts of the Trust's shares.

As of the date of this SAI, the Fund has not yet commenced operations and the Fund did not hold any equity securities of its regular broker-dealers or their parent companies.

**Aggregated Trades**

While investment decisions for the Fund are made independently from those for any other investment companies and accounts advised or managed by the Adviser, such other advisory clients may invest in the same securities as the Fund. To the extent permitted by law, the Adviser may aggregate the securities to be sold or purchased for theFund with those to be sold or purchased for other investment companies or accounts advised or managed by the Adviser in executing transactions. When a purchase or sale of the same security is made as part of an aggregated trade, the transaction will be averaged as to price and available investments allocated as to amount in a manner which the Adviser believes to be equitable to the Fund and other participating investment companies or accounts. In some instances, this investment procedure may adversely affect the price paid or received by the Fund or the size of the position obtained or sold by the Fund.

**Portfolio Turnover**

The portfolio turnover rate of the Fund is calculated by dividing the lesser of the Fund's purchases or sales of portfolio securities for the year by the monthly average value of the portfolio securities. The calculation excludes all securities whose remaining maturities at the time of acquisition were one year or less. The portfolio turnover rate may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. A high rate of portfolio turnover (100% or more) generally leads to higher transaction costs and generally reflects a greater number of taxable transactions. High portfolio turnover may result in larger amounts of short-term capital gains which, when distributed to shareholders, are generally taxed at ordinary income tax rates. The Fund has not commenced operations and do not have portfolio turnover to report.

During the fiscal year ended October 31, 2024, the Predecessor Fund's portfolio turnover rate was 62%. During the fiscal year ended October 31, 2025, the Predecessor Fund's portfolio turnover rate was 42%.

**REDEMPTION OF SECURITIES BEING OFFERED**

The Fund generally intends to pay all redemptions of its shares in cash. However, the Fund may, at its discretion, make full or partial payment of any redemption request by distributing portfolio securities of the Fund (i.e., by redemption-in-kind), valued at the same value used to compute the Fund's net asset value per share. Pursuant to Rule 18f-1 under the 1940 Act, the Fund has filed a notification of election under which it is committed to pay in cash, during any 90-day period, all redemption requests by any shareholder up to the lesser of $250,000 or 1% of the Fund's net asset value at the beginning of such period. Any redemption-in-kind will be made using readily marketable securities selected in a manner the Board of Trustees deems fair and equitable.

If a shareholder receives portfolio securities in satisfaction of a redemption request, the shareholder may incur brokerage or other transaction costs in converting those securities to cash. Under normal circumstances, the Fund does not anticipate making redemptions in kind.

The right to redeem shares of the Fund or to receive payment with respect to any redemption may be suspended only (1) for any period during which trading on the New York Stock Exchange ("NYSE") is restricted or the NYSE is closed, other than customary weekend and holiday closings; (2) for any period during which an emergency exists as a result of which disposal of securities or determination of the Fund's net asset value is not reasonably practicable; or (3) for such other periods as the Securities and Exchange Commission may by order permit for the protection of shareholders.

The Fund will be deemed to have received a purchase or redemption order when an authorized broker, or if applicable, a broker's authorized designee, receives the order.

**DISTRIBUTION PLANS**

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"). See the section entitled "How to Purchase Shares – 12b-1 Plan" in the Prospectus. As required by Rule 12b-1, the 12b-1 Plan was approved by the Board of Trustees (the "Board") and separately by a majority of the Independent Trustees who have no direct or indirect financial interest in the operation of the 12b-1 Plan. The 12b-1 Plan requires that the Distributor or Treasurer provide to the Board, at least quarterly, a written report of the amounts expended pursuant to the 12b-1 Plan and the purposes of such expenditures. The Board will take these expenditures into account when reviewing the operation of the 12b-1 Plan and in connection with its annual consideration of the renewal of the 12b-1 Plan.

Potential benefits of the 12b-1 Plan to the Fund include savings in certain operating expenses, benefits to the investment process through growth and stability of assets, and maintenance of a financially healthy management organization. The continuation of the 12b-1 Plan must be approved by the Board annually.

Under the 12b-1 Plan, the Fund may annually expend up to 0.25% of its average daily net assets allocable to Advisor Class shares and up to 0.10% of its average daily net assets allocable to Investor Class shares. Expenditures under the 12b-1 Plan may be used to pay for shareholder servicing or any activity primarily intended to result in the sale of Fund shares, provided that the Board has approved the category of expenses for which payment is being made. Such expenditures paid as distribution fees to any person who sells shares may not exceed 0.25% per annum of the Advisor Class's average daily net assets and 0.10% per annum of the Investor Class's average daily net assets.

Such expenditures may include, without limitation, the printing and mailing of the Fund's Prospectus, Statement of Additional Information, any supplements thereto and shareholder reports for prospective shareholders; those relating to the development, preparation, printing and mailing of advertisements, sales literature and other promotional materials describing and/or relating to the Fund; obtaining information and providing explanations to wholesale and retail distributors regarding the Fund's investment objective and policies and other information about the Fund, including its performance; training sales personnel regarding the Fund; and financing any activity that the Distributor determines is primarily intended to result in the sale of Fund shares. The Fund does not participate in any joint distribution activities with other investment companies.

During the fiscal year ended October 31, 2025, the Predecessor Fund incurred $1,577 in distribution related fees pursuant to the Class A Plan, and $810 in distribution related fees pursuant to the Class C Plan. For the fiscal year indicated below, the Predecessor Fund incurred the following allocated distribution expenses:

**Actual 12b-1 Expenditures Incurred by the Predecessor Fund**

**During the Fiscal Year Ended October 31, 2024**

---

| | | |
|:---|:---|:---|
| | **Class A** | **Class C** |
| Advertising/Marketing |  |  |
| Printing/Postage |  |  |
| Payment to distributor | $206 | $207 |
| Payment to dealers | $1053 | $285 |
| Compensation to sales personnel |  |  |
| Other | $318 | $319 |
| Total | $1577 | $810 |

---

**SHAREHOLDER SERVICES** 

<u>Systematic Withdrawal Program.</u> A shareholder owning or purchasing shares of the Fund having a total value of $10,000 or more may participate in a systematic withdrawal program providing for regular monthly or quarterly payments. An application form containing details of the Systematic Withdrawal Program is available upon request from the Fund's transfer agent. Participation in the program is voluntary and may be terminated at any time by the shareholder.

Income dividends and capital gain distributions on shares of the Fund held in a Systematic Withdrawal Program should be reinvested in additional shares of the Fund at net asset value. The Systematic Withdrawal Program is not an annuity and does not and cannot protect against loss in declining markets. Amounts paid to a shareholder from the Systematic Withdrawal Program represent the proceeds from redemptions of Fund shares, and the value of the shareholder's investment in the Fund will be reduced to the extent that the payments exceed any increase in the aggregate value of the shareholder's shares (including shares purchased through reinvestment of dividends and distributions). If a shareholder receives payments that are greater than the appreciation in value of his or her shares, plus the income earned on the shares, the shareholder may eventually withdraw his or her entire account balance. This will occur more rapidly in a declining market. For tax purposes, depending upon the shareholder's cost basis and date of purchase, each withdrawal will result in a capital gain or loss. See "Distributions" and "Federal Tax Considerations" in the Fund's Prospectus and "Taxes" in this SAI.

The Fund offers certain shareholder services, which are designed to facilitate investment in its shares. Each of the options is described in the Fund's Prospectus. All of these special services may be terminated by either the Fund or the shareholder without any prior written notice.

<u>Automatic Account Builder.</u> An investor may arrange to have a fixed amount of $100 or more automatically invested in shares of the Fund monthly by authorizing his or her bank account to be debited to invest specified dollar amounts in shares of the Fund. The investor's bank must be a member of the Automatic Clearing House System. Stock certificates are not issued to Automatic Account Builder participants.

Further information about these programs and an application form can be obtained from the Fund's transfer agent.

**DETERMINATION OF NET ASSET VALUE**

The net asset value ("NAV") per share of the Fund will be determined for each class of shares. The NAV per share of a given class of shares is determined by calculating the total value of the Fund's assets attributable to such class, deducting its total liabilities attributable to such class in conformance with the provisions of the plan adopted by the Fund in accordance with Rule 18f-3 under the 1940 Act, and dividing the result by the number of shares of such class outstanding. The NAV of shares of each class of the Fund is normally calculated as of the close of regular trading on the New York Stock Exchange ("NYSE") on every day the NYSE is open for trading. The NYSE is open Monday through Friday except on the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The NYSE may also be closed on national days of mourning or due to natural disaster or other extraordinary events or emergency.

Because different expenses are charged to the Advisor Class, Institutional Class, and Investor Class shares of the Fund, the NAV of each class may vary.

In determining the Fund's NAV per share, equity securities for which market quotations are readily available are valued at current market value using the last reported sales price. NASDAQ traded securities are valued using the NASDAQ official closing price ("NOCP"). If the NOCP is not available, such securities shall be valued at the mean between the current bid and ask prices on the day of valuation, or if there has been no sale on such day, at the mean between the current bid and ask prices on the primary exchange. If market quotations are not readily available, then securities are valued at fair value as determined by the Board (or its delegate).

Short-term debt instruments with a remaining maturity of more than 60 days, intermediate and long-term bonds, convertible bonds, and other debt securities are generally valued on the basis of dealer-supplied quotations or by a pricing system selected by the Adviser and approved by the Board. Where such prices are not available, valuations will be obtained from brokers who are market makers for such securities. In circumstances where the Adviser deems it appropriate, the mean of the bid and asked prices for over-the-counter securities or the last available sale price for exchange-traded debt securities may be used. Where no last sale price for exchange-traded debt securities is available, the mean of the bid and asked prices may be used. Short-term debt securities with a remaining maturity of 60 days or less are amortized to maturity, provided such valuations represent par value.

Other securities and assets for which market quotations are not readily available, or for which valuation cannot be provided as described above, are valued as determined in good faith in accordance with procedures approved by the Board.

Trading in securities on foreign securities exchanges and over-the-counter markets is normally completed well before the close of business on each business day in New York (i.e., a day on which the NYSE is open). In addition, foreign securities trading generally or in a particular country or countries may not take place on all business days in New York. Furthermore, trading may take place in certain foreign markets on certain Saturdays or other days that are not business days in New York, and on which the Fund's NAV is not calculated. The Fund calculates NAV per share, and therefore effects sales, redemptions, and repurchases of its shares, as of the close of regular trading on the NYSE on each day on which the NYSE is open. Such calculation may not take place contemporaneously with the determination of the prices of the majority of the portfolio securities used in such calculation. If events that may materially affect the value of such securities occur between the time when their price is determined and the time when the Fund's NAV is calculated, such securities may be valued at fair value as determined in good faith in accordance with procedures approved by the Board.

**ANTI-MONEY LAUNDERING AND CUSTOMER IDENTIFICATION PROGRAMS**

The USA PATRIOT Act requires financial institutions, including the Fund, to adopt certain policies and programs to prevent money laundering activities or the financing of terrorist activities, including procedures to verify the identity of customers opening new accounts. As required by law, the Fund may employ various procedures, such as comparing the information to fraud databases or requesting additional information or documentation from you, to ensure that the information supplied by you is correct. The Trust's Anti-Money Laundering (AML) Compliance Officer is responsible for implementing and monitoring the operations and internal controls of the program. Compliance officers at certain of the Fund's service providers are also responsible for monitoring aspects of the AML program. The AML program is subject to the continuing oversight of the Board.

**TAXES**

The following is only a summary of certain additional U.S. federal income tax considerations generally affecting the Fund and its shareholders that is intended to supplement the discussion contained in the Prospectus. The summary is based on the existing provisions of the Code, its legislative history, existing and proposed Treasury regulations (the "Regulations"), published rulings and court decisions, all as currently in effect and all subject to change at any time, perhaps with retroactive effect. No attempt is made to present a comprehensive explanation of the U.S. 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 serve as a substitute for careful tax planning. New legislation, administrative changes or court decisions may significantly change the discussion below and may have retroactive effects. State, local and foreign income tax laws may treat the Fund and its shareholders differently than U.S. federal income tax law.

Prospective shareholders are urged to consult their tax advisors with specific reference to their own tax situations, including their state, local, and foreign tax liabilities. Unless otherwise stated, references in this section to the Fund apply equally to the Fund.

<u>Qualification as a Regulated Investment Company.</u>

The Fund has elected and intends to qualify as a RIC under Subchapter M of the Code. In general, to qualify as a RIC: (a) at least 90% of the gross income of the Fund for the taxable year must be derived from dividends, interest, payments with respect to loans of securities, gains from the sale or other disposition of securities, or other income derived with respect to its business of investing in securities; (b) the Fund must distribute to its shareholders 90% of its ordinary income and net short-term capital gains; and (c) the Fund must diversify its assets so that, at the close of each quarter of its taxable year, (i) at least 50% of the fair market value of its total (gross) assets is comprised of cash, cash items, U.S. Government securities, securities of other RICs and other securities limited in respect of any one issuer to no more than 5% of the fair market value of the Fund's total assets and 10% of the outstanding voting securities of such issuer and (ii) no more than 25% of the fair market value of its total assets is invested in the securities of any one issuer (other than U.S. Government securities and securities of other RICs) or of two or more issuers controlled by the Fund and engaged in the same, similar or related trades or businesses, or in the securities of one or more "qualified publicly traded partnerships."

As a RIC, the Fund will not be subject to U.S. federal income tax on the portion of its taxable investment income and capital gains that it timely distributes to shareholders, provided that it satisfies as a minimum distribution requirement. To satisfy the minimum distribution requirement, the Fund must distribute to its shareholders at least the sum of (i) 90% of its "investment company taxable income" (i.e., generally, its taxable income other than its net capital gain, computed without regard to the dividends paid deduction, plus or minus certain other adjustments) and (ii) 90% of its net tax-exempt income for the taxable year. The Fund will be subject to U.S. federal income tax at the regular corporate tax rate on any taxable income or gains that it does not distribute to its shareholders. The Fund's policy is to distribute to its shareholders all of its investment company taxable income (computed without regard to the dividends paid deduction) and any net realized long-term capital gains for each fiscal year in a manner that complies with the distribution requirement of the Code, so that the Fund will not be subject to any U.S. federal income or excise tax. However, the Fund can give no assurance that distributions will be sufficient to eliminate all taxes. If the Fund fails to satisfy the RIC requirements set forth above in any taxable year, it 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 requirements where the Fund corrects the failure within a specified period.

If, in any taxable year, the Fund should not qualify as a RIC under the Code: (1) it would be taxed at normal corporate rates on the entire amount of its taxable income without deduction for dividends paid or other distributions to its shareholders and (2) its distributions to the extent made out of its current or accumulated earnings and profits would be taxable to its shareholders (other than shareholders in tax deferred accounts) as ordinary dividends (regardless of whether they would otherwise have been considered capital gain dividends), and may qualify for the deduction for dividends received by corporations. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a RIC. Failure to qualify as a RIC would have a negative impact on the Fund's income and performance. It is possible that the Fund will not qualify as a RIC in any given tax year.

<u>U.S. Federal Excise Tax.</u>

The Fund must declare and distribute dividends equal to at least 98% of its ordinary income (as of the twelve months ended December 31) and at least 98.2% of its net capital gain (as of the twelve months ended October 31), in order to avoid a nondeductible 4% U.S. federal excise tax. The Fund intends to make the required distributions to avoid liability for U.S. federal excise tax but can make no assurances that such tax 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 U.S. federal excise tax liability at a time when the Fund 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.

<u>Distributions to Shareholders.</u>

The Fund receives income generally in the form of dividends and interest on investments. This income, plus net short-term capital gains, if any, less expenses incurred in the operation of the Fund, constitutes the Fund's net investment income from which dividends may be paid to you. Net realized capital gains for a fiscal period are computed by taking into account any capital loss carryforwards of the Fund. Taxable dividends and distributions are subject to tax whether you receive them in cash or in additional shares. To the extent the Fund engages in increased portfolio turnover, short-term capital gains may be realized, and any distribution resulting from such gains will be considered ordinary income for U.S. federal tax purposes.

Distributions of net investment income, including distributions of net short-term capital gains, may be taxable to shareholders as ordinary income. Distributions from the Fund's net capital gain (i.e., the excess of the Fund's net long-term capital gains over its net short-term capital losses) are taxable to shareholders as long-term capital gains regardless of the length of time Fund shares have been held.

In general, to the extent that the Fund receives qualified dividend income, the Fund may report a portion of the dividends it pays as qualified dividend income. Qualified dividend income is, in general, dividend income from taxable domestic corporations and certain foreign corporations (i.e., foreign corporations incorporated in a possession of the United States or in certain countries with a comprehensive tax treaty with the United States, and foreign corporations if the stock with respect to which the dividend was paid is readily tradable on an established securities market in the United States). A dividend will not be treated as qualified dividend income to the extent that (i) the shareholder has not held the shares on which the dividend was paid for more than 60 days during the 121-day period that begins on the date that is 60 days before the date on which the shares become "ex-dividend" with respect to such dividend, (ii) the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to substantially similar or related property, or (iii) the shareholder elects to treat such dividend as investment income under Section 163(d)(4)(B) of the Code. In order for a dividend on certain preferred stock to be treated as qualified dividend income, the shareholder 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. The holding period requirements described in this paragraph apply to shareholders' investments in the Fund and to the Fund's investments in underlying dividend-paying stocks. Distributions received by the Fund from an underlying fund taxable as a RIC or from a REIT will be treated as qualified dividend income only to the extent so reported by such underlying fund or REIT.

In the case of corporate shareholders, Fund distributions (other than capital gain distributions) generally qualify for the dividends received deduction to the extent such distributions are so reported and do not exceed the gross amount of qualifying dividends received by the Fund for the year. Generally, and subject to certain limitations (including certain holding period limitations), a dividend will be treated as a qualifying dividend if it has been received from a domestic corporation. The Fund's investment strategies may limit their ability to make distributions eligible for the dividends received deduction for corporate shareholders.

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. If any dividend paid by the Fund exceeds its current and accumulated earnings and profits (as calculated for U.S. federal income tax purposes), all or a portion of the dividend may be treated as a return of capital to shareholders. A return of capital distribution generally will not be taxable but will reduce each shareholder's tax basis, resulting in a higher capital gain or lower capital loss when the shares on which the distribution was received are sold. After a shareholder's tax basis in the shares has been reduced to zero, dividends in excess of earnings and profits will be treated as gain from the sale of the shareholder's shares.

Each shareholder who receives taxable distributions in the form of additional shares will be treated for U.S. federal income tax purposes as if receiving a distribution in an amount equal to the amount of money that the shareholder would have received if he or she had instead elected to receive cash distributions. The shareholder's aggregate tax basis in shares of the Fund will be increased by such amount.

A dividend or distribution received shortly after the purchase of shares reduces the net asset value of the shares by the amount of the dividend or distribution and, although in effect a return of capital, will be taxable to the shareholder. If the net asset value of shares were reduced below the shareholder's cost by dividends or distributions representing gains realized on sales of securities, such dividends or distributions would be a return of investment though taxable to the shareholder in the same manner as other dividends or distributions.

A dividend or other distribution by the Fund is generally treated under the Code as received by the shareholders at the time the dividend or distribution is made. However, distributions declared in October, November or December to shareholders of record on a date in such a month and paid the following January are taxable as if received on December 31. Shareholders should note that the Fund may make taxable distributions of income and capital gains even when share values have declined.

The Fund (or your broker) will inform you of the amount of your ordinary income dividends, qualified dividend income and capital gain distributions, if any, and will advise you of their tax status for U.S. federal income tax purposes shortly after the close of each calendar year. If you have not held your shares for a full year, the Fund may designate and distribute to you, as ordinary income, qualified dividend income or capital gain, a percentage of income that is not equal to the actual amount of such income earned during the period of your investment in the Fund.

A corporate shareholder may be entitled to take a deduction for income dividends received by it that are attributable to dividends received from a domestic corporation, provided that both the corporate shareholder retains its shares in the Fund for more than 45 days and the Fund retains its shares in the issuer from whom it received the income dividends for more than 45 days. The Fund must designate distributions of net capital gain and must notify shareholders of this designation within sixty days after the close of the Trust's taxable year. A corporate shareholder of the Fund cannot use a dividends-received deduction for distributions of net capital gain.

Shareholders who hold Fund shares in a tax-deferred account, such as an individual retirement account ("IRA"), generally will not have to pay tax on Fund distributions until they receive distributions from their account.

Certain individuals, estates and trusts are required to pay a 3.8% Medicare surtax on "net investment income" including, among other things, dividends and proceeds of sale in respect of securities like the shares, subject to certain exceptions. Prospective investors should consult with their own tax advisors regarding the effect, if any, of the tax on net investment income on their ownership and disposition of the shares.

<u>Sale or Exchange of Shares.</u>

In general, a shareholder who sells or redeems shares will realize a capital gain or loss, which will be long-term or short-term depending upon the shareholder's holding period of Fund shares. An exchange of shares is generally treated as a sale and any gain may be subject to tax. All or a portion of any loss so recognized may be disallowed if you purchase (for example, by reinvesting dividends) shares of the same Fund within 30 days before or after the sale, exchange, or repurchase. If disallowed, the loss will be reflected in an upward adjustment to the basis of the shares purchased.

Shareholders should note that, upon the sale of shares in a Fund, if the shareholder has not held such shares for at least six months, any loss on the sale or exchange of those shares will be treated as a long-term capital loss to the extent of the capital gains dividends received with respect to the shares. Any capital loss arising from the sale, exchange or repurchase of shares held for six months or less, however, will be treated as a long-term capital loss to the extent of the amount of distributions of net capital gain received on such shares. In determining the holding period of such shares for this purpose, any period during which your risk of loss is offset by means of options, short sales or similar transactions is not counted. Capital losses in any tax year are deductible only to the extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary income.

The repurchase or transfer of shares may result in a taxable gain or loss to a tendering shareholder. Different tax consequences may apply for tendering and non-tendering shareholder in connection with a repurchase offer. For example, if a shareholder does not tender all of his or her shares, such repurchase may not be treated as a sale or exchange for U.S. federal income tax purposes, and may result in deemed distributions to non-tendering shareholder. On the other hand, shareholder holding shares as capital assets who tender all of their shares (including shares deemed owned by shareholders under constructive ownership rules) will be treated as having sold their shares and generally will recognize capital gain or loss. The amount of the gain or loss will be equal to the difference between the amount received for the shares and the shareholder adjusted tax basis in the relevant shares. Such gain or loss generally will be a long-term capital gain or loss if the shareholder has held such shares as capital assets for more than one year. Otherwise, the gain or loss will be treated as short-term capital gain or loss.

<u>Tax Treatment of Complex Securities</u>.

The Fund may invest in complex securities and these investments may be subject to numerous special and complex tax rules. These rules could affect the Fund's ability to qualify as a RIC, affect whether gains and losses recognized by the Fund is treated as ordinary income or capital gain, accelerate the recognition of income to the Fund and/or defer the Fund's ability to recognize losses, and, in limited cases, subject the Fund to U.S. federal income tax on income from certain of its foreign securities. In turn, these rules may affect the amount, timing or character of the income distributed to you by the Fund.

The Fund may invest in REITs. Investments in REIT equity securities may require the Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. The Fund's investments in REIT equity securities may at other times result in the Fund's receipt of cash in excess of the REIT's earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to the Fund's shareholders for U.S. federal income tax purposes. Dividends paid by a REIT, other than capital gain distributions, will be taxable as ordinary income up to the amount of the REIT's current and accumulated earnings and profits. Capital gain dividends paid by a REIT to the Fund will be treated as long-term capital gains by the Fund and, in turn, may be distributed by the Fund to its shareholders as a capital gain distribution. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income or qualify for the dividends received deduction. If a REIT is operated in a manner such that it fails to qualify as a REIT, an investment in the REIT would become subject to double taxation, meaning the taxable income of the REIT would be subject to U.S. federal income tax at the regular corporate rate without any deduction for dividends paid to shareholders and the dividends would be taxable to shareholders as ordinary income (or possibly as qualified dividend income) to the extent of the REIT's current and accumulated earnings and profits.

REITs in which the Fund invests often do not provide complete and final tax information to the Fund until after the time that the Fund issues a tax reporting statement. As a result, the Fund may at times find it necessary to reclassify the amount and character of its distributions to you after it issues your tax reporting statement. When such reclassification is necessary, the Fund (or its administrative agent) will send you a corrected, final IRS Form 1099-DIV to reflect the reclassified information. If you receive a corrected IRS Form 1099-DIV, use the information on this corrected form, and not the information on the previously issued tax reporting statement, in completing your tax returns.

"Qualified REIT dividends" (i.e., ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income eligible for capital gain tax rates) are eligible for a 20% deduction by non-corporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Distributions by the Fund to its shareholders that are attributable to qualified REIT dividends received by the Fund and which the Fund properly reports as "Section 199A Dividends," are treated as "qualified REIT dividends" in the hands of non-corporate shareholders. A Section 199A Dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying RIC shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend and is not under an obligation to make related payments with respect to a position in substantially similar or related property. The Fund is permitted to report such part of its dividends as Section 199A Dividends as are eligible but is not required to do so. Unless extended or made permanent, this 20% deduction will no longer be available for taxable years beginning after December 31, 2025.

<u>U.S. Federal Tax Treatment of Options, Futures Contracts and Forward Foreign Exchange Contracts</u>.

The Fund may enter into certain option, futures and forward foreign exchange contracts, including options and futures on currencies, which qualify as "section 1256 contracts" under the Code ("Section 1256 Contracts") and may result in the Fund entering into straddles.

Section 1256 Contracts held by the Fund at fiscal year-end are treated for federal income tax purposes as being sold on such date for their fair market value, and any gains or losses will be recognized for tax purposes at that time. Such gains or losses from the normal closing or settlement of such transactions will generally be characterized as 60% long-term capital gain or loss and 40% short-term capital gain or loss regardless of the holding period of the instrument. When the Section 1256 Contract is subsequently disposed of, the actual gain or loss will be adjusted by the amount of any year-end gain or loss previously recognized. The Fund will be required to distribute net gains on such transactions to shareholders even though the Fund may not have closed the transaction and received cash to pay such distributions.

Options, futures and forward foreign exchange contracts, including options and futures on currencies, that offset a security or currency position may be considered straddles for tax purposes, in which case a loss on any position in a straddle will be subject to deferral to the extent of unrealized gain in an offsetting position. The holding period of the securities or currencies comprising the straddle may be deemed not to begin until the straddle is terminated. The holding period of the security offsetting an "in-the-money qualified covered call" option will not include the period of time the option is outstanding. Losses on written covered calls and purchased puts on securities, excluding certain "qualified covered call" options, may be long-term capital loss, if the security covering the option was held for more than twelve months prior to the writing of the option.

<u>Certain Tax Rules Applicable to Fund Transactions</u>

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.

The treatment of capital loss carryovers for the Fund is similar to the rules that apply to capital loss carryovers of individuals, which provide that such losses are carried over indefinitely. If the Fund has a "net capital loss" (that is, capital losses in excess of capital gains), the excess of the Fund's net short-term capital losses over its net long-term capital gains is treated as a short-term capital loss arising on the first day of the Fund's next taxable year, and the excess (if any) of the Fund's net long-term capital losses over its net short-term capital gains is treated as a long-term capital loss arising on the first day of the Fund's next taxable year. 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 Internal Revenue Code.

At the time of purchase, the Fund's NAV may reflect undistributed income or net capital gains. A subsequent distribution to shareholders of such amounts, although constituting a return of their investment, would be taxable either as dividends or capital gain distributions. For federal income tax purposes, the Fund is permitted to carry forward its net realized capital losses, if any, for eight years, and realize net capital gains up to the amount of such losses without being required to pay taxes on, or distribute such gains.

Pursuant to the Reorganization, the Predecessor Fund's capital loss carry-forwards were transferred to the Fund. As of February 28, 2026, the Predecessor Fund had the following capital loss carry-forwards for federal income tax purposes available to offset future capital gains:

---

| | | |
|:---|:---|:---|
| **Short-Term** | **Non-Expiring Long-Term** | **Total** |
| $957645 | $14339432 | $15297077 |

---

Foreign currency gains and losses, including the portion of gain or loss on the sale of debt securities attributable to foreign exchange rate fluctuations, are taxable as ordinary income. If the net effect of these transactions is a gain, the dividend paid by the Fund will be increased; if the result is a loss, the income dividend paid by the Fund will be decreased. Adjustments to reflect these gains and losses will be made at the end of the Fund's taxable year.

<u>Foreign Taxes</u>

Income received by the Fund from sources within various foreign countries may be subject to foreign income taxes withheld at the source. The United States has entered into tax treaties with many foreign countries that may entitle the Fund to a reduced rate of tax or exemption from tax on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of the Fund's assets to be invested within various countries is not known. Under the Code, if more than 50% of the value of the Fund's total assets at the close of its taxable year comprises securities issued by foreign corporations, the Fund may file an election with the Internal Revenue Service (the "IRS") to "pass through" to its shareholders the amount of any foreign income taxes paid by the Fund. Pursuant to this election, shareholders will be required to: (i) include in gross income, even though not actually received, their respective pro rata share of foreign taxes paid by the Fund; (ii) treat their pro rata share of foreign taxes as paid by them; and (iii) either deduct their pro rata share of foreign taxes in computing their taxable income, or use it as a foreign tax credit against U.S. income taxes (but not both). No deduction for foreign taxes may be claimed by a shareholder who does not itemize deductions.

Even if the Fund were eligible to make such an election for a given year, it may determine not to do so. 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 IRAs or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund.

<u>Backup Withholding</u>

The Fund will be required in certain cases to withhold and remit to the U.S. Treasury a percentage (currently 24%) of taxable dividends or gross proceeds realized upon a sale to shareholders who: (i) have failed to provide a correct tax identification number in the manner required, (ii) are subject to withholding by the IRS for failure to properly include on their return payments of taxable interest or dividends, (iii) have failed to certify to the Fund that they are not subject to backup withholding when required to do so, or (iv) are "exempt recipients."

<u>State and Local Taxes</u>

Depending upon the extent of the Fund's activities in states and localities in which its offices are maintained, in which its agents or independent contractors are located, or in which it is otherwise deemed to be conducting business, the Fund may be subject to the tax laws of such states or localities. In addition, in those states and localities that have income tax laws, the treatment of the Fund and its shareholders under such laws may differ from their treatment under federal income tax laws.

<u>Foreign Shareholders</u>

The foregoing discussion relates only to U.S. federal income tax law as applicable to U.S. shareholders (i.e., U.S. citizens and residents and U.S. domestic corporations, partnerships, trusts, and estates). Non-U.S. shareholders who are not U.S. persons should consult their tax advisers regarding U.S. and foreign tax consequences of ownership of shares of the Fund, including the likelihood that taxable distributions to them (including any deemed distributions with respect to a repurchase offer) would be subject to withholding of U.S. tax at a rate of 30% (or a lower treaty rate for eligible investors).

Dividends paid by the Fund to non-U.S. shareholders may be subject to U.S. withholding tax at the rate of 30% unless reduced by treaty (and the shareholder files a valid Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities), or other applicable form, with the Fund certifying foreign status and treaty eligibility) or the non-U.S. shareholder files a Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States, or other applicable form, with the Fund certifying that the investment to which the distribution relates is effectively connected to a United States trade or business of such non-U.S. shareholder (and, if certain tax treaties apply, is attributable to a United States permanent establishment maintained by such non-U.S. shareholder). The Fund may elect not to withhold the applicable withholding tax on any distribution representing a capital gains dividend to a non-U.S. shareholder.

Payments to a shareholder that is either a foreign financial institution ("FFI") or a non-financial foreign entity ("NFFE") within the meaning of the Foreign Account Tax Compliance Act ("FATCA") may be subject to a generally nonrefundable 30% withholding tax on: (a) income dividends paid by the Fund after June 30, 2014, and (b) certain capital gain distributions and the proceeds arising from the sale of Fund shares paid by the Fund after December 31, 2016. FATCA withholding tax generally can be avoided: (a) by an FFI, subject to any applicable intergovernmental agreement or other exemption, if it enters into a valid agreement with the IRS to, among other requirements, report required information about certain direct and indirect ownership of foreign financial accounts held by U.S. persons with the FFI, and (b) by an NFFE, if it: (i) certifies that it has no substantial U.S. persons as owners, or (ii) if it does have such owners, reports information relating to them. The Fund may disclose the information that it receives from its shareholders to the IRS, non-U.S. taxing authorities, or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of the Fund fails to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.

<u>Tax Shelter Reporting Regulations</u>

Under U.S. Treasury regulations, generally, if a shareholder recognizes a loss of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886, Reportable Transaction Disclosure Statement. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company such as the Fund are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. 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>Cost Basis Reporting</u>

Mutual funds are required to report to the IRS and furnish to fund shareholders the cost basis information for fund shares purchased and/or sold on or after January 1, 2012. In addition to the requirement to report the gross proceeds from the sale of shares in the Fund, the Fund is also required to report the cost basis information for such shares and indicate whether these shares had a short-term or long-term holding period. In the absence of an election by a shareholder to elect from available IRS-accepted cost basis methods, the Fund will use a default cost basis method. The cost basis method elected or applied may not be changed after the settlement date of a sale of shares in the Fund. Fund shareholders should consult with their tax advisers concerning the most desirable IRS-accepted cost basis method for their tax situation and to obtain more information about how the cost basis reporting law applies to them.

Prospective investors should consult with their own tax advisers regarding the application of these provisions to their situation.

**ORGANIZATION OF THE TRUST**

The Trust is organized as a Delaware business trust. As a Delaware business trust, the Trust need not hold regular annual shareholder meetings and, in the normal course, does not expect to hold such meetings. The Trust, however, must hold shareholder meetings for such purposes as, for example: (1) approving certain agreements as required by the 1940 Act; (2) changing fundamental investment objectives, policies, and restrictions of the Fund; and (3) filling vacancies on the Board of Trustees of the Trust in the event that less than two-thirds of the Trustees were elected by shareholders. The Trust expects that there will be no meetings of shareholders for the purpose of electing Trustees unless and until such time as less than two-thirds of the Trustees holding office have been elected by shareholders. At such time, the Trustees then in office will call a shareholders' meeting for the election of Trustees. In addition, holders of record of not less than two-thirds of the outstanding shares of the Trust may remove a Trustee from office by a vote cast in person or by proxy at a shareholder meeting called for that purpose at the request of holders of 10% or more of the outstanding shares of the Trust. The Fund has an obligation to assist in such shareholder communications. Except as set forth above, Trustees will continue in office and may appoint successor Trustees.

In the event of a liquidation or dissolution of the Trust or the Fund, shareholders of the Fund would be entitled to receive the assets available for distribution belonging to such Fund. Shareholders of the Fund are entitled to participate equally in the net distributable assets of the Fund upon liquidation, based on the number of shares of the Fund that are held by each shareholder. If there are any assets, income, earnings, proceeds, funds, or payments that are not readily identifiable as belonging to the Fund, the Board shall allocate them among any one or more of the Fund as they, in their sole discretion, deem fair and equitable. Shareholders of all series of the Trust, including the Fund, will vote together and not separately on a series-by-series or class-by-class basis, except as otherwise required by law or when the Board determines that the matter to be voted upon affects only the interests of the shareholders of a particular series or class. The Trust has adopted a Rule 18f-3 Multi-Class Plan that contains the general characteristics of, and conditions under which the Trust may offer multiple classes of shares of each series. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Trust shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of each series or class affected by the matter. A series or class is affected by a matter unless it is clear that the interests of each series or class in the matter are substantially identical or that the matter does not affect any interest of the series or class. Under Rule 18f-2, the approval of an investment advisory agreement or any change in a fundamental investment policy would be effectively acted upon with respect to a series only if approved by a majority of the outstanding shares of such series. However, Rule 18f-2 also provides that the ratification of the appointment of independent accountants, the approval of principal underwriting contracts and the election of Trustees may be effectively acted upon by shareholders of the Trust voting together, without regard to a particular series or class. Rights of shareholders cannot be modified by less than a majority vote.

Shareholders are entitled to one vote for each full share and a fractional vote for each fractional share held. Shares of all series of the Trust have equal voting rights and liquidation rights. Shares have non-cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees and, in this event, the holders of the remaining shares voting will not be able to elect any Trustees. Rights of shareholders cannot be modified by less than a majority vote. The Trust will comply with the provisions of Section 16(c) of the 1940 Act in order to facilitate communications among shareholders. The Trustees will hold office indefinitely, except that: (i) any Trustee may resign or retire; and (ii) any Trustee may be removed: (a) any time by written instrument signed by at least two-thirds of the number of Trustees prior to such removal; (b) at any meeting of shareholders of the Trust by a vote of two-thirds of the outstanding shares of the Trust; or (c) by a written declaration signed by shareholders holding not less than two-thirds of the outstanding shares of the Trust. In case a vacancy on the Board shall for any reason exist, the vacancy shall be filled by the affirmative vote of a majority of the remaining Trustees, subject to certain restrictions under the 1940 Act. The Trust Instrument provides that the Trustees will not be liable in any event in connection with the affairs of the Trust, except as such liability may arise from a Trustee's bad faith, willful misfeasance, gross negligence, or reckless disregard of duties. It also provides that all third parties shall look solely to the Trust property for satisfaction of claims arising in connection with the affairs of the Trust. With the exceptions stated, the Trust Instrument provides that a Trustee or officer is entitled to be indemnified against all liability in connection with the affairs of the Trust.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Cohen & Company, Ltd. serves as the Fund's independent registered public accounting firm and is responsible for auditing the financial statements of the Fund.

**LEGAL MATTERS**

Legal advice regarding certain matters relating to the federal securities laws applicable to the Fund and the offer and sale of the Fund's shares has been provided by Kilpatrick Townsend & Stockton LLP, 1001 West 4<sup>th</sup> Street, Winston-Salem, North Carolina 27101.

**FINANCIAL STATEMENTS**

Financial statements and annual reports will be available after the Fund has completed a fiscal year of operations.

The audited financial statements for the Predecessor Fund's most recent fiscal year are included in the Predecessor Fund's Annual Report, which was filed with the Securities and Exchange Commission on the dates indicated below as part of the Predecessor Fund's filing on Form N-CSR, and are incorporated by reference into this SAI. Such financial statements have been audited by Deloitte & Touche LLP, the independent registered public accounting firm to the Predecessor Fund, whose report also appears in the applicable Annual Report and is incorporated by reference herein.

Universal Fixed Income Predecessor Fund: [<u>Annual Report to Shareholders for the fiscal year ended October 31, 2025, filed January 9, 2026, (SEC Accession No. 0001580642-26-000193)</u>](https://www.sec.gov/ix?doc=/Archives/edgar/data/1552947/000158064226000193/anfield-universal_ncsr.htm)

The Fund's Annual Reports will be available, without charge, upon request by calling 1-866-866-4848 or on the EDGAR database by visiting the SEC's website at www.sec.gov.

**APPENDIX A**

**Proxy Voting Policy**

**of**

**Horizon Fund**

The Board of Trustees of Horizon Fund (the "Trust") has adopted a Proxy Voting Policy (the "**Proxy Voting Policy**") used to determine how each series of the Trust (each a "Fund") votes proxies relating to its portfolio securities. Under the Trust's Proxy Voting Policy, the Board has, subject to its oversight, delegated to Horizon Investments, LLC (the "Adviser") the following duties: (1) to make the proxy voting decisions for the Trust, subject to the exceptions described below; and (2) to assist the Trust in disclosing their respective proxy voting record as required by Rule 30b1-4 under the Investment Company Act of 1940, as amended ("1940 Act") (the "**Proxy Duties**").

The Trust's CCO shall ensure that the Adviser has adopted a Proxy Voting Policy, which it uses to vote proxies for its clients, including the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;A. **General** 

The Board and the Trust believe that the voting of proxies is an important part of portfolio management as it represents an opportunity for shareholders to make their voices heard and to influence the direction of a company. The Trust is committed to voting corporate proxies in the manner that best serves the interests of the Fund's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;B. **Delegation to the Investment Adviser** 

The Board and the Trust believe that the Adviser is in the best position to make individual voting decisions for the Trust consistent with this Proxy Voting Policy. Therefore, subject to the oversight of the Board, the Adviser is hereby delegated the following duties:

&nbsp;&nbsp;&nbsp;&nbsp;1. to make the proxy voting decisions for the Trust, in accordance with the Adviser's Proxy Voting Policy
 (the "Adviser Voting Policy"); and

&nbsp;&nbsp;&nbsp;&nbsp;2. to assist the Trust in disclosing its proxy voting record as required by Rule 30b1-4 under the 1940 Act, including
 (a) categorizing the subject matter of each of the reported proxy voting matters using the categories specified in Form N-PX, and (b)
 providing the information for each matter with respect to which the Trust is entitled to vote, as required by Form N-PX, including: (i)
 information identifying the matter voted on; (iii) whether the matter was proposed by the issuer or by a security holder; (iv) whether
 and how the Trust cast its vote; (v) whether the Trust cast its vote for or against management; (vi) the number of shares that were voted
 and how they were voted, and (vii) the number of shares that the Trust loaned and did not recall.

The Board, including a majority of the Independent Trustees of the Board, must approve the Adviser Voting Policy as it relates to the Trust. The Board must also approve any material changes to the Adviser Voting Policy no later than six (6) months after adoption by the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;C. **Delegation to Sub-Adviser.** 

The Adviser may, but is not required to, further delegate the responsibility for voting proxies relating to portfolio securities held by the Fund to one or more of the sub-advisers retained to provide investment advisory services to such Fund, if any (each a "Sub-Adviser"). If such responsibility is delegated to a Sub-Adviser, then the Sub-Adviser shall assume the fiduciary duty and reporting responsibilities of the Adviser under these policy guidelines. As used in these Policies and Procedures, the term "Adviser" includes any and all Sub-Advisers.

&nbsp;&nbsp;&nbsp;&nbsp;D. **Conflicts** 

In cases where a matter with respect to which the Trust was entitled to vote presents a conflict between the interest of the Trust's shareholders, on the one hand, and those of the Adviser, or an affiliated person of the Trust, or the Adviser, on the other hand, the Trust shall always vote in the best interest of the Trust's shareholders. For purposes of this Proxy Voting Policy a vote shall be considered in the best interest of the Trust's shareholders when a vote is cast consistent with the specific voting policy as set forth in the Adviser Voting Policy, provided such specific voting policy was approved by the Board, including a majority of the Independent Trustees of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;E. **Disclosure** 

The Adviser will ensure that the Trust discloses in its annual and semi-annual reports to shareholders that a description (or copy) of the Trust's proxy voting policies and procedures is available without charge, upon request by calling a specified toll-free telephone number and by accessing the Securities and Exchange Commission's website at http://www.sec.gov.

The Adviser will file the Trust's complete proxy voting record with the SEC on Form N-PX on an annual basis, by not later than August 31, of each year. The Trust will also disclose in its annual and semi-annual reports to shareholders that its proxy voting record is available without charge, upon request by calling a specified toll-free telephone number and by accessing the Securities and Exchange Commission's website at http://www.sec.gov. The Trust must send the information disclosed in the Trust's most recently filed Form N-PX within three business days of receipt of a request.

**APPENDIX B**

**Proxy Voting Policy**

**of**

**Horizon Investments, LLC ("Horizon")**

For separately managed accounts, Horizon generally does not vote proxies. However, Horizon votes proxies for the mutual funds (the "Fund") and Collective Investment Trusts ("Collectives", and together with the Fund, "Fund Clients") it advises, and therefore has adopted and implemented this Proxy Voting Policy and Procedures.

**<u>Policy</u>**

Horizon, as a matter of policy and practice, has no authority to vote proxies on behalf of advisory clients unless otherwise agreed to in writing. Horizon's policy of having no proxy voting responsibility is disclosed to its advisory clients. However, Horizon may agree to vote proxies for Fund Clients and may, with the approval of the the Fund Client's Board, delegate to a sub-adviser for the Fund Client the obligation to vote such proxies. Horizon may retain third party proxy voting services for a variety of proxy-related services. These services may include research, tracking, voting, proxy guidelines, and reporting, among others. Horizon's general policy with respect to its proxy and corporate action obligations are set forth below.

**<u>Procedure</u>**

Horizon has adopted the following procedures to implement the firm's policy:

● Horizon discloses its proxy voting policy of generally not having proxy voting authority in the firm's Form ADV Part 2A Disclosure Brochure.

● Horizon's advisory agreements with natural person clients provide that the firm has no proxy voting responsibilities and that the advisory clients expressly retain such voting authority.

**<u>Proxies for Fund Clients</u>**

Horizon serves as investment adviser to certain Fund Clients. To the extent that the Fund Client's portfolio contains common stock or other securities of issuers that are not Underlying Fund, proxies received from such issuers will be voted in accordance with Horizon's Proxy Voting Guidelines ("Guidelines"), set forth below.

Notwithstanding the foregoing, Fund Clients may be "funds of funds", meaning that these Fund Clients pursue their investment goals by investing primarily in other investment companies that are not affiliated with Horizon ("Underlying Fund").Consistent with certain requirements applicable to Fund Clients under Section 12(d)(1)(F) of the Investment Company Act, it is the policy of Horizon to vote all proxies received from the Underlying Fund in the same proportion that all other shares of the Underlying Fund is voted (i.e., "mirror" or "echo" voting), or in accordance with instructions received from Underlying Fund shareholders, pursuant to Section 12(d)(1)(F) of the Investment Company Act. After voting, the proxy materials are maintained for future reference.

**<u>Proxy Voting Guidelines</u>**

Horizon has adopted and implemented the following Guidelines, which it believes are reasonably designed to ensure that proxies are voted in the best economic interest of clients and in accordance with its fiduciary duties and local regulation.

In light of Horizon's fiduciary duties, and given the complexity of the issues that may be raised in connection with proxy votes, Horizon has retained Institutional Shareholder Services Inc. ("ISS") to assist in the coordination and voting of client proxies, which specializes in providing a variety of fiduciary-level proxy-related services to investment managers, to assist in the coordination and voting of client proxies. The services provided to Horizon will include timely delivery of meeting and record date information; proxy analysis through an electronic web-based vote execution platform; and detailed recordkeeping needs of Horizon's proxy voting function.

ISS votes Horizon's advisory clients' proxies in accordance with Horizon's proxy guidelines or Horizon's specific instructions. Where the Fund Client has given specific instructions as to how a proxy should be voted, Horizon will notify ISS to carry out those instructions. Where no specific instruction exists, Horizon will follow the procedures in voting the proxies set forth in this document.

A copy of Horizon's current specific voting guidelines with respect to certain categories of proxy votes is attached hereto as Schedule 1.

The CCO or the CCO's designee is responsible for managing the relationship with ISS and for ensuring that proxies are being properly voted and that ISS is retaining appropriate proxy voting records regarding the same.

Proxies solicited by issuers other than Underlying Fund (whose proxies may be voted consistent with other shareholders as discussed above) are voted in accordance with the predetermined guidelines of ISS, unless the Fund Client directs Horizon to vote differently on a specific proxy or specific categories of proxies.

Although the majority of proxy proposals can be handled in accordance with Horizon's established proxy policies, Horizon recognizes that some proposals require special consideration that may dictate that exceptions are made to its general procedures. In this regard, Horizon recognizes that under certain circumstances where Horizon is required to vote a proxy without the assistance of ISS, such as where the Guidelines do not address a particular category of proxy or where ISS is otherwise unable to provide a recommendation, Horizon may have a conflict of interest in voting proxies on behalf of the Fund Client. Such circumstances may include, but are not limited to, situations where Horizon or one or more of its affiliates, including, without limitation, officers, directors or employees, has or is seeking a client relationship with the issuer of the security that is the subject of the proxy vote. Horizon personnel should identify such conflicts and bring them to the attention of the Fund Client's Board. In such a case, the Fund Client's Board will then determine whether the conflict is "material" based on whether, under the facts and circumstances of the case, the conflict has the potential to influence Horizon' s decision-making in voting the proxy. If the Fund Client's Board determines that the conflict is material, then: (i) the Fund Client's Proxy Voting Committee will vote the proxy; or (ii) at the Board's direction, Horizon shall vote the proxy based upon the recommendation of the Board or its designee. Horizon will keep a record of all materiality decisions and report them to the Fund Client's Board on an annual basis.

Horizon is not required to vote a proxy for the Fund Client if Horizon reasonably determines that refraining from voting the proxy is in the best interest of the Fund Client, such as when the cost to the Fund Client of voting the proxy exceeds the expected benefit to the Fund Client.

**<u>Oversight of Proxy Services</u>**

Horizon will periodically evaluate the performance of ISS in performing proxy services. The SEC has provided guidance that evaluations of proxy services should include:

● Evaluating whether the proxy service has adequate policies and procedures to identify, disclose and address conflicts of interest, including conflicts arising from recommendations and services to issuers or proponents of shareholder proposals that may be the subject of a vote, or affiliations with third parties that have significant influence over the proxy service (such as lenders or shareholders). In this regard, an adviser should consider the proxy service's policies for disclosing actual and potential conflicts to the adviser and any technology used by the proxy service to facilitate such disclosure.

● Evaluating whether the proxy service has the capacity and competency to adequately analyze the matters for which it is responsible, including the proxy service's staffing, personnel and technology.

● Reviewing proxy voting guidelines to ensure that they are reasonably designed to vote proxies in the best interest of each client.

● Evaluating whether proxies are being voted in a manner consistent with proxy voting guidelines, which may be performed by sampling votes before or after votes are cast.

● To the extent an adviser becomes aware of any potential factual errors, incompleteness or methodological weaknesses in the proxy service's analysis that it deems credible and relevant to its voting decisions, assessing the extent to which any pf the foregoing materially affected the proxy service's research or recommendations.

● Evaluating any material changes in the services provided by, or the operations of, the proxy service to ensure that the proxy service continues to vote proxies in the best interest of clients.

**<u>Record Keeping</u>**

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

Horizon describes its proxy voting policies and procedures in its Part 2A of Form ADV for (or other brochure fulfilling the requirement of Rule 204-3), which description will inform clients that they may obtain information on how their securities were voted or a copy of Horizon's Policies and Procedures by written request addressed to Horizon. Horizon will coordinate with mutual fund Clients to assist in the provision of applicable information required to be filed by on Form N-PX.

**Schedule 1**

SPECIFIC PROXY VOTING GUIDELINES

(ATTACHED)

![](fp0092770-1_11.jpg)

**UNITED STATES**<br> Proxy Voting Guidelines<br>

**TABLE OF CONTENTS**

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| | |
|:---|:---|
| **Coverage** | **8** |
| **1.&nbsp;&nbsp;&nbsp;&nbsp;Board of Directors** | **9** |
| &nbsp;&nbsp;&nbsp;Voting on Director Nominees in Uncontested Elections | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independence | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ISS Classification of Directors – U.S. | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Composition | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attendance | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overboarded Directors | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gender Diversity | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Racial and/or Ethnic Diversity | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Responsiveness | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accountability | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Poison Pills | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unequal Voting Rights | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified Board Structure | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Removal of Shareholder Discretion on Classified Boards | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Governance Structure | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unilateral Bylaw/Charter Amendments | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricting Binding Shareholder Proposals | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director Performance Evaluation | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Proposals to Ratify Existing Charter or Bylaw Provisions | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Audit-Related Practices | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Compensation Practices | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Pledging of Company Stock | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Climate Accountability | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governance Failures | 18 |
| &nbsp;&nbsp;&nbsp;Voting on Director Nominees in Contested Elections | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vote-No Campaigns | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxy Contests/Proxy Access | 18 |
| &nbsp;&nbsp;&nbsp;Other Board-Related Proposals | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adopt Anti-Hedging/Pledging/Speculative Investments Policy | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board Refreshment | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term/Tenure Limits | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Age Limits | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board Size | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classification/Declassification of the Board | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CEO Succession Planning | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative Voting | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director and Officer Indemnification, Liability Protection, and Exculpation | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Establish/Amend Nominee Qualifications | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Establish Other Board Committee Proposals | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filling Vacancies/Removal of Directors | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent Board Chair | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Majority of Independent Directors/Establishment of Independent Committees | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Majority Vote Standard for the Election of Directors | 23 |

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxy Access | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Require More Nominees than Open Seats | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Engagement Policy (Shareholder Advisory Committee) | 24 |
| **2.&nbsp;&nbsp;&nbsp;&nbsp;Audit-Related** | **25** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Auditor Indemnification and Limitation of Liability | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Auditor Ratification | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Proposals Limiting Non-Audit Services | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Proposals on Audit Firm Rotation | 26 |
| **3.&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Rights & Defenses** | **27** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance Notice Requirements for Shareholder Proposals/Nominations | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amend Bylaws without Shareholder Consent | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control Share Acquisition Provisions | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control Share Cash-Out Provisions | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disgorgement Provisions | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Price Provisions | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Freeze-Out Provisions | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Greenmail | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Litigation Rights | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal Forum Selection Provisions | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exclusive Forum Provisions for State Law Matters | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee shifting | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Operating Loss (NOL) Protective Amendments | 30 |
| &nbsp;&nbsp;&nbsp;Poison Pills (Shareholder Rights Plans) | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Proposals to Ratify a Poison Pill | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs) | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxy Voting Disclosure, Confidentiality, and Tabulation | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursing Proxy Solicitation Expenses | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reincorporation Proposals | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Ability to Act by Written Consent | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Ability to Call Special Meetings | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stakeholder Provisions | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State Antitakeover Statutes | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supermajority Vote Requirements | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Virtual Shareholder Meetings | 34 |
| **4.&nbsp;&nbsp;&nbsp;&nbsp;Capital/Restructuring** | **35** |
| &nbsp;&nbsp;&nbsp;Capital | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to Par Value of Common Stock | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock Authorization | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General Authorization Requests | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific Authorization Requests | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dual Class Structure | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issue Stock for Use with Rights Plan | 36 |

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preemptive Rights | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock Authorization | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General Authorization Requests | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recapitalization Plans | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reverse Stock Splits | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S. | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Repurchase Programs | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Repurchase Programs Shareholder Proposals | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Distributions: Splits and Dividends | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tracking Stock | 40 |
| &nbsp;&nbsp;&nbsp;Restructuring | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appraisal Rights | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset Purchases | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset Sales | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bundled Proposals | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of Securities | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Formation of Holding Company | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs) | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Joint Ventures | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidations | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mergers and Acquisitions | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Private Placements/Warrants/Convertible Debentures | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reorganization/Restructuring Plan (Bankruptcy) | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Purpose Acquisition Corporations (SPACs) | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Spin-offs | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Value Maximization Shareholder Proposals | 46 |
| **5.&nbsp;&nbsp;&nbsp;&nbsp;Compensation** | **47** |
| &nbsp;&nbsp;&nbsp;Executive Pay Evaluation | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advisory Votes on Executive Compensation—Management Proposals (Say-on-Pay) | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pay-for-Performance Evaluation | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Pay Practices | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee Communications and Responsiveness | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Frequency of Advisory Vote on Executive Compensation ("Say When on Pay") | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale | 50 |
| &nbsp;&nbsp;&nbsp;Equity-Based and Other Incentive Plans | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Value Transfer (SVT) | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three-Year Value-Adjusted Burn Rate | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Egregious Factors | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liberal Change in Control Definition | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repricing Provisions | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Problematic Pay Practices or Significant Pay-for-Performance Disconnect | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m)) | 54 |

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|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific Treatment of Certain Award Types in Equity Plan Evaluations | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividend Equivalent Rights | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs) | 55 |
| &nbsp;&nbsp;&nbsp;Other Compensation Plans | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;401(k) Employee Benefit Plans | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Stock Ownership Plans (ESOPs) | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Stock Purchase Plans—Qualified Plans | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Stock Purchase Plans—Non-Qualified Plans | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Option Exchange Programs/Repricing Options | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Plans in Lieu of Cash | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfer Stock Option (TSO) Programs | 57 |
| &nbsp;&nbsp;&nbsp;Director Compensation | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Ratification of Director Pay Programs | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity Plans for Non-Employee Directors | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Employee Director Retirement Plans | 58 |
| &nbsp;&nbsp;&nbsp;Shareholder Proposals on Compensation | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonus Banking/Bonus Banking "Plus" | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Consultants—Disclosure of Board or Company's Utilization | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosure/Setting Levels or Types of Compensation for Executives and Directors | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Golden Coffins/Executive Death Benefits | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hold Equity Past Retirement or for a Significant Period of Time | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pay Disparity | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pay for Performance/Performance-Based Awards | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pay for Superior Performance | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Arranged Trading Plans (10b5-1 Plans) | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prohibit Outside CEOs from Serving on Compensation Committees | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recoupment of Incentive or Stock Compensation in Specified Circumstances | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance and Golden Parachute Agreements | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Buyback Impact on Incentive Program Metrics | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplemental Executive Retirement Plans (SERPs) | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Gross-Up Proposals | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity | 63 |
| **6.&nbsp;&nbsp;&nbsp;&nbsp;Routine/Miscellaneous** | **64** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjourn Meeting | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amend Quorum Requirements | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amend Minor Bylaws | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change Company Name | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change Date, Time, or Location of Annual Meeting | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Business | 65 |
| **7.&nbsp;&nbsp;&nbsp;&nbsp;Social and Environmental Issues** | **66** |
| &nbsp;&nbsp;&nbsp;Global Approach – E&S Shareholder Proposals | 66 |
| &nbsp;&nbsp;&nbsp;Endorsement of Principles | 66 |
| &nbsp;&nbsp;&nbsp;Animal Welfare | 66 |

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|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Animal Welfare Policies | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Animal Testing | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Animal Slaughter | 67 |
| &nbsp;&nbsp;&nbsp;Consumer Issues | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Genetically Modified Ingredients | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reports on Potentially Controversial Business/Financial Practices | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product Safety and Toxic/Hazardous Materials | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tobacco-Related Proposals | 69 |
| &nbsp;&nbsp;&nbsp;Climate Change | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Say on Climate (SoC) Management Proposals | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Say on Climate (SoC) Shareholder Proposals | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Climate Change/Greenhouse Gas (GHG) Emissions | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Energy Efficiency | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Renewable Energy | 71 |
| &nbsp;&nbsp;&nbsp;Diversity | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board Diversity | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equality of Opportunity | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gender Identity, Sexual Orientation, and Domestic Partner Benefits | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gender, Race/Ethnicity Pay Gap | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Racial Equity and/or Civil Rights Audit Guidelines | 73 |
| &nbsp;&nbsp;&nbsp;Environment and Sustainability | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Facility and Workplace Safety | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Natural Capital- Related and/or Community Impact Assessment Proposals | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hydraulic Fracturing | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations in Protected Areas | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recycling | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sustainability Reporting | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water Issues | 75 |
| &nbsp;&nbsp;&nbsp;General Corporate Issues | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Charitable Contributions | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data Security, Privacy, and Internet Issues | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ESG Compensation-Related Proposals | 76 |
| &nbsp;&nbsp;&nbsp;Human Rights, Human Capital Management, and International Operations | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Human Rights Proposals | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Arbitration | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations in High-Risk Markets | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outsourcing/Offshoring | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sexual Harassment | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weapons and Military Sales | 78 |
| &nbsp;&nbsp;&nbsp;Political Activities | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lobbying | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Political Contributions | 79 |

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Political Expenditures and Lobbying Congruency | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Political Ties | 79 |
| **8.&nbsp;&nbsp;&nbsp;&nbsp;Mutual Fund Proxies** | **81** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Election of Directors | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Converting Closed-end Fund to Open-end Fund | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxy Contests | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Advisory Agreements | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approving New Classes or Series of Shares | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock Proposals | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1940 Act Policies | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changing a Fundamental Restriction to a Nonfundamental Restriction | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change Fundamental Investment Objective to Nonfundamental | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name Change Proposals | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in Fund's Subclassification | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business Development Companies—Authorization to Sell Shares of Common Stock at a Price below Net Asset Value | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disposition of Assets/Termination/Liquidation | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes to the Charter Document | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changing the Domicile of a Fund | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution Agreements | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Master-Feeder Structure | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mergers | 85 |
| &nbsp;&nbsp;&nbsp;Shareholder Proposals for Mutual Funds | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Establish Director Ownership Requirement | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimburse Shareholder for Expenses Incurred | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terminate the Investment Advisor | 86 |

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Coverage**

The U.S. research team provides proxy analyses and voting recommendations for the common shareholder meetings of U.S. - incorporated companies that are publicly-traded on U.S. exchanges, as well as certain OTC companies, if they are held in our institutional investor clients' portfolios. Coverage generally includes corporate actions for common equity holders, such as written consents and bankruptcies. ISS' U.S. coverage includes investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment trusts), limited partnerships ("LPs"), master limited partnerships ("MLPs"), limited liability companies ("LLCs"), and business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is subject to change based on client need and industry trends.

**Foreign-incorporated companies**

In addition to U.S.- incorporated, U.S.- listed companies, ISS' U.S. policies are applied to certain foreign- incorporated company analyses. Like the SEC, ISS distinguishes two types of companies that list but are not incorporated in the U.S.:

&nbsp;&nbsp;&nbsp;&nbsp;■ U.S. Domestic Issuers – which
 have a majority of outstanding shares held in the U.S. and meet other criteria, as determined
 by the SEC, and are subject to the same disclosure and listing standards as U.S. incorporated
 companies (e.g. they are required to file DEF14A proxy statements) – are generally
 covered under standard U.S. policy guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;■ <u>Foreign Private Issuers</u> (FPIs)
 – which are allowed to take exemptions from most disclosure requirements (e.g., they
 are allowed to file 6-K for their proxy materials) and U.S. listing standards – are
 generally covered under a combination of policy guidelines:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ FPI Guidelines (see the <u>Americas Regional Proxy Voting Guidelines</u>), may apply to companies incorporated in governance
 havens, and apply certain minimum independence and disclosure standards in the evaluation
 of key proxy ballot items, such as the election of directors; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Guidelines for the market that is responsible for, or most relevant
 to, the item on the ballot.

U.S. incorporated companies listed only on non-U.S. exchanges are generally covered under the ISS guidelines for the market on which they are traded.

An FPI is generally covered under ISS' approach to FPIs outlined above, even if such FPI voluntarily files a proxy statement and/or other filing normally required of a U.S. Domestic Issuer, so long as the company retains its FPI status.

In all cases – including with respect to other companies with cross-market features that may lead to ballot items related to multiple markets – items that are on the ballot solely due to the requirements of another market (listing, incorporation, or national code) may be evaluated under the policy of the relevant market, regardless of the "assigned" primary market coverage.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;1. Board of Directors

Voting on Director Nominees in Uncontested Elections

Four fundamental principles apply when determining votes on director nominees:

**Independence**: Boards should be sufficiently independent from management (and significant shareholders) to ensure that they are able and motivated to effectively supervise management's performance for the benefit of all shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of shareholder capital, and in setting and monitoring executive compensation programs that support that strategy. The chair of the board should ideally be an independent director, and all boards should have an independent leadership position or a similar role in order to help provide appropriate counterbalance to executive management, as well as having sufficiently independent committees that focus on key governance concerns such as audit, compensation, and nomination of directors.

**Composition**: Companies should ensure that directors add value to the board through their specific skills and expertise and by having sufficient time and commitment to serve effectively. Boards should be of a size appropriate to accommodate diversity, expertise, and independence, while ensuring active and collaborative participation by all members. Boards should be sufficiently diverse to ensure consideration of a wide range of perspectives.

**Responsiveness**: Directors should respond to investor input, such as that expressed through significant opposition to management proposals, significant support for shareholder proposals (whether binding or non-binding), and tender offers where a majority of shares are tendered.

**Accountability**: Boards should be sufficiently accountable to shareholders, including through transparency of the company's governance practices and regular board elections, by the provision of sufficient information for shareholders to be able to assess directors and board composition, and through the ability of shareholders to remove directors.

**General Recommendation:** Generally vote for director nominees, except under the following circumstances (with new nominees**<sup>1</sup>** considered on case-by-case basis):

**Independence**

Vote against**<sup>2</sup>** or withhold from non-independent directors (Executive Directors and Non-Independent Non- Executive Directors per <u>ISS' Classification of Directors</u>) when:

&nbsp;&nbsp;&nbsp;&nbsp;■ Independent directors comprise 50 percent or less of the board;

&nbsp;&nbsp;&nbsp;&nbsp;■ The non-independent director serves on the audit, compensation,
 or nominating committee;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company lacks an audit, compensation, or nominating committee
 so that the full board functions as that committee; or

**<sup>1</sup>** A "new nominee" is a director who is being presented for election by shareholders for the first time. Recommendations on new nominees who have served for less than one year are made on a case-by-case basis depending on the timing of their appointment and the problematic governance issue in question.

**<sup>2</sup>** In general, companies with a plurality vote standard use "Withhold" as the contrary vote option in director elections; companies with a majority vote standard use "Against". However, it will vary by company and the proxy must be checked to determine the valid contrary vote option for the particular company.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ The company lacks a formal nominating
 committee, even if the board attests that the independent directors fulfill the functions
 of such a committee.

**ISS Classification of Directors – U.S.**

&nbsp;&nbsp;&nbsp;&nbsp;1. Executive
 Director

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. Current officer  ***<sup>1</sup>*** of the company or one of its affiliates  ***<sup>2</sup>.*** 

&nbsp;&nbsp;&nbsp;&nbsp;2. Non-Independent
 Non-Executive Director

<u>Board Identification</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. Director identified
 as not independent by the board. <u>Controlling/Significant Shareholder</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. Beneficial owner of
 more than 50 percent of the company's voting power (this may be aggregated if voting
 power is distributed among more than one member of a group).

<u>Current Employment at Company or Related Company</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. Non-officer employee
 of the firm (including employee representatives).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. Officer  ***<sup>1</sup>*** ,
 former officer, or general or limited partner of a joint venture or partnership with the
 company.

<u>Former Employment</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. Former CEO of the
 company.  ***<sup>3, 4</sup>*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. Former non-CEO officer  ***<sup>1</sup>*** of the company or an affiliate  ***<sup>2</sup>*** within the past five years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. Former officer  ***<sup>1</sup>*** of an acquired company within the past five years.  ***<sup>4</sup>*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. Officer  ***<sup>1</sup>*** of a former parent or predecessor firm at the time the company was sold or split off within
 the past five years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. Former interim officer
 if the service was longer than 18 months. If the service was between 12 and 18 months an
 assessment of the interim officer's employment agreement will be made.  ***<sup>5</sup>*** 

<u>Family Members</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. Immediate family
 member  ***<sup>6</sup>*** of a current or former officer  ***<sup>1</sup>*** of the company or its affiliates  ***<sup>2</sup>*** within the last five years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. Immediate family
 member  ***<sup>6</sup>*** of a current employee of company or its affiliates  ***<sup>2</sup>*** where additional factors raise concern (which may include, but are not limited to, the following:
 a director related to numerous employees; the company or its affiliates employ relatives
 of numerous board members; or a non- Section 16 officer in a key strategic role).

<u>Professional, Transactional, and Charitable Relationships</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. Director who (or
 whose immediate family member  ***<sup>6</sup>***) currently provides professional
 services  ***<sup>7</sup>*** in excess of $10,000 per year to: the company, an affiliate  ***<sup>2</sup>*** ,
 or an individual officer of the company or an affiliate; or who is (or whose immediate family
 member  ***<sup>6</sup>*** is) a partner, employee, or controlling shareholder of an
 organization which provides the services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. Director who (or
 whose immediate family member  ***<sup>6</sup>***) currently has any material transactional
 relationship  ***<sup>8</sup>*** with the company or its affiliates  ***<sup>2</sup>*** ;
 or who is (or whose immediate family member  ***<sup>6</sup>*** is) a partner in, or
 a controlling shareholder or an executive officer of, an organization which has the material
 transactional relationship  ***<sup>8</sup>*** (excluding investments in the company
 through a private placement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14. Director who (or
 whose immediate family member  ***<sup>6</sup>*)** is a trustee, director, or employee
 of a charitable or non-profit organization that receives material grants or endowments  ***<sup>8</sup>*** from the company or its affiliates  ***<sup>2</sup>*** .

<u>Other Relationships</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15. Party to a voting
 agreement  ***<sup>9</sup>*** to vote in line with management on proposals being brought
 to shareholder vote.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16. Has (or an immediate
 family member  ***<sup>6</sup>*** has) an interlocking relationship as defined by the
 SEC involving members of the board of directors or its Compensation Committee.  ***<sup>10</sup>*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17. Founder  ***<sup>11</sup>*** of the company but not currently an employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18. Director with pay
 comparable to Named Executive Officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19. Any material  ***<sup>12</sup>*** relationship with the company.

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&nbsp;&nbsp;&nbsp;&nbsp;**3.** Independent Director

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. No material  ***<sup>12</sup>*** connection to the company other than a board seat.

**Footnotes:**

 

&nbsp;&nbsp;&nbsp;&nbsp;*1.* The definition of officer will generally follow that of a "Section
 16 officer" (officers subject to Section 16 of the Securities and Exchange Act of 1934)
 and includes the chief executive, operating, financial, legal, technology, and accounting
 officers of a company (including the president, treasurer, secretary, controller, or any
 vice president in charge of a principal business unit, division, or policy function). Current
 interim officers are included in this category. For private companies, the equivalent positions
 are applicable. A non-employee director serving as an officer due to statutory requirements
 (e.g. corporate secretary) will generally be classified as a Non-Independent Non-Executive
 Director under "Any material relationship with the company." However, if the
 company provides explicit disclosure that the director is not receiving additional compensation
 exceeding $10,000 per year for serving in that capacity, then the director will be classified
 as an Independent Director.

 

&nbsp;&nbsp;&nbsp;&nbsp;*2.* "Affiliate" includes a
 subsidiary, sibling company, or parent company. ISS uses 50 percent control ownership by
 the parent company as the standard for applying its affiliate designation. The manager/advisor
 of an externally managed issuer (EMI) is considered an affiliate.

 

&nbsp;&nbsp;&nbsp;&nbsp;*3.* Includes any former CEO of the company
 prior to the company's initial public offering (IPO).

 

&nbsp;&nbsp;&nbsp;&nbsp;*4.* When there is a former CEO of a special purpose acquisition company
 (SPAC) serving on the board of an acquired company, ISS will generally classify such directors
 as independent unless determined otherwise taking into account the following factors: the
 applicable listing standards determination of such director's independence; any operating
 ties to the firm; and the existence of any other conflicting relationships or related party
 transactions.

 

&nbsp;&nbsp;&nbsp;&nbsp;*5.* ISS will look at the terms of the
 interim officer's employment contract to determine if it contains severance pay, long-term
 health and pension benefits, or other such standard provisions typically contained in contracts
 of permanent, non-temporary CEOs. ISS will also consider if a formal search process was under
 way for a full-time officer at the time.

 

&nbsp;&nbsp;&nbsp;&nbsp;*6.* "Immediate family member"
 follows the SEC's definition of such and covers spouses, parents, children, step-parents,
 step- children, siblings, in-laws, and any person (other than a tenant or employee) sharing
 the household of any director, nominee for director, executive officer, or significant shareholder
 of the company.

 

&nbsp;&nbsp;&nbsp;&nbsp;*7.* Professional services can be characterized as advisory in nature,
 generally involve access to sensitive company information or to strategic decision-making,
 and typically have a commission- or fee-based payment structure. Professional services generally
 include but are not limited to the following: investment banking/financial advisory services,
 commercial banking (beyond deposit services), investment services, insurance services, accounting/audit
 services, consulting services, marketing services, legal services, property management services,
 realtor services, lobbying services, executive search services, and IT consulting services.
 The following would generally be considered transactional relationships and not professional
 services: deposit services, IT tech support services, educational services, and construction
 services. The case of participation in a banking syndicate by a non-lead bank should be considered
 a transactional (and hence subject to the associated materiality test) rather than a professional
 relationship. "Of Counsel" relationships are only considered immaterial if the
 individual does not receive any form of compensation (in excess of $10,000 per year) from,
 or is a retired partner of, the firm providing the professional service. The case of a company
 providing a professional service to one of its directors or to an entity with which one of
 its directors is affiliated, will be considered a transactional rather than a professional
 relationship. Insurance services and marketing services are assumed to be professional services
 unless the company explains why such services are not advisory.

 

&nbsp;&nbsp;&nbsp;&nbsp;*8.* A material transactional relationship, including grants to non-profit
 organizations, exists if the company makes annual payments to, or receives annual payments
 from, another entity, exceeding the greater of: $200,000 or 5 percent of the recipient's
 gross revenues, for a company that follows NASDAQ listing standards; or the greater of $1,000,000
 or 2 percent of the recipient's gross revenues, for a company that follows NYSE listing
 standards. For a company that follows neither of the preceding standards, ISS will apply
 the NASDAQ-based materiality test. (The recipient is the party receiving the financial proceeds
 from the transaction).

 

&nbsp;&nbsp;&nbsp;&nbsp;*9.* Dissident directors who are parties to a voting agreement pursuant
 to a settlement or similar arrangement may be classified as Independent Directors if an analysis
 of the following factors indicates that the voting agreement does not compromise their alignment
 with all shareholders' interests: the terms of the agreement; the duration of the standstill
 provision in the agreement; the limitations and requirements of actions that are agreed upon;
 if the dissident director nominee(s) is subject to the standstill; and if there any conflicting
 relationships or related party transactions.

 

&nbsp;&nbsp;&nbsp;&nbsp;*10.* Interlocks include: executive officers serving as directors on
 each other's compensation or similar committees (or, in the absence of such a committee,
 on the board); or executive officers sitting on each other's boards and at least one
 serves on the other's compensation or similar committees (or, in the absence of such
 a committee, on the board).

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;*11.* The operating involvement of the founder with the company will
 be considered; if the founder was never employed by the company, ISS may deem him or her
 an Independent Director.

 

&nbsp;&nbsp;&nbsp;&nbsp;*12.* For purposes of ISS's director independence classification,
 "material" will be defined as a standard of relationship (financial, personal,
 or otherwise) that a reasonable person might conclude could potentially influence one's
 objectivity in the boardroom in a manner that would have a meaningful impact on an individual's
 ability to satisfy requisite fiduciary standards on behalf of shareholders.

**Composition**

**Attendance at Board and Committee Meetings:** Generally vote against or withhold from directors (except nominees who served only part of the fiscal year**<sup>3</sup>**) who attend less than 75 percent of the aggregate of their board and committee meetings for the period for which they served, unless an acceptable reason for absences is disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Medical issues/illness;

&nbsp;&nbsp;&nbsp;&nbsp;■ Family emergencies; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Missing only one meeting (when the total of all meetings
 is three or fewer).

In cases of chronic poor attendance without reasonable justification, in addition to voting against the director(s) with poor attendance, generally vote against or withhold from appropriate members of the nominating/governance committees or the full board.

If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold from the director(s) in question.

**Overboarded Directors:** Generally vote against or withhold from individual directors who:

&nbsp;&nbsp;&nbsp;&nbsp;■ Sit on more than five public company boards; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Are CEOs of public companies who sit on the boards of more than
 two public companies besides their own—withhold only at their outside boards **<sup>4</sup>**.

*NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder Services (ISS) has indefinitely halted the consideration of the gender diversity of a company's board when making vote recommendations with respect to the election or re-election of directors at U.S. companies covered by these guidelines under its proprietary ISS U.S. Benchmark policy.*

 

**Gender Diversity:** Generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) at companies where there are no women on the company's board. An exception will be made if there was at least one woman on the board at the preceding annual meeting and the board makes a firm commitment to return to a gender-diverse status within a year.

**<sup>3</sup>** Nominees who served for only part of the fiscal year are generally exempted from the attendance policy.

**<sup>4</sup>** Although all of a CEO's subsidiary boards with publicly-traded common stock will be counted as separate boards, ISS will not recommend a withhold vote for the CEO of a parent company board or any of the controlled (>50 percent ownership) subsidiaries of that parent but may do so at subsidiaries that are less than 50 percent controlled and boards outside the parent/subsidiary relationships.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

*NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder Services (ISS) has indefinitely halted the consideration of the racial and/or ethnic diversity of a company's board when making vote recommendations with respect to the election or re-election of directors at U.S. companies covered under these guidelines under its proprietary ISS U.S. Benchmark policy.*

 

**Racial and/or Ethnic Diversity:** For companies in the Russell 3000 or S&P 1500 indices, generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the board has no apparent racially or ethnically diverse members**<sup>5</sup>**. An exception will be made if there was racial and/or ethnic diversity on the board at the preceding annual meeting and the board makes a firm commitment to appoint at least one racial and/or ethnic diverse member within a year.

**Responsiveness**

Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The board failed to act on a shareholder proposal that received
 the support of a majority of the shares cast in the previous year or failed to act on a management
 proposal seeking to ratify an existing charter/bylaw provision that received opposition of
 a majority of the shares cast in the previous year. Factors that will be considered are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosed outreach efforts by the board to shareholders in the
 wake of the vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Rationale provided in the proxy statement for the level of implementation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The subject matter of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The level of support for and opposition to the resolution in
 past meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Actions taken by the board in response to the majority vote and
 its engagement with shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The continuation of the underlying issue as a voting item on
 the ballot (as either shareholder or management proposals); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Other factors as appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;■ The board failed to act on takeover offers where the majority of
 shares are tendered; or

&nbsp;&nbsp;&nbsp;&nbsp;■ At the previous board election, any director received more than
 50 percent withhold/against votes of the shares cast and the company has failed to address
 the issue(s) that caused the high withhold/against vote.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and the Say on Pay proposal if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's previous say-on-pay
 received the support of less than 70 percent of votes cast. Factors that will be considered
 are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The company's response, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of engagement efforts
 with major institutional investors, including the frequency and timing of engagements and
 the company participants (including whether independent directors participated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of the specific concerns
 voiced by dissenting shareholders that led to the say-on-pay opposition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of specific and meaningful
 actions taken to address shareholders' concerns;

&nbsp;&nbsp;&nbsp;&nbsp;■ Other recent compensation actions taken by the company;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the issues raised are recurring or isolated;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the support level was less than 50 percent, which would
 warrant the highest degree of responsiveness.

**<sup>5</sup>** Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ The board implements an advisory vote on executive compensation
 on a less frequent basis than the frequency that received the plurality of votes cast.

**Accountability**

***Problematic Takeover Defenses, Capital Structure, and Governance Structure***

 

**Poison Pills:** Generally vote against or withhold from all nominees (except new nominees**<sup>1</sup>**, who should be considered case-by-case) if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has a poison pill with a deadhand or slowhand feature **<sup>6</sup>**;

&nbsp;&nbsp;&nbsp;&nbsp;■ The board makes a material adverse modification to an existing pill,
 including, but not limited to, extension, renewal, or lowering the trigger, without shareholder
 approval; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has a long-term poison pill (with a term of over one
 year) that was not approved by the public shareholders **<sup>7</sup>**.

Vote case-by-case on nominees if the board adopts an initial short-term pill<sup>6</sup> (with a term of one year or less) without shareholder approval, taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The trigger threshold and other terms of the pill;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The disclosed rationale for the adoption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The context in which the pill was adopted, (e.g., factors such
 as the company's size and stage of development, sudden changes in its market capitalization,
 and extraordinary industry-wide or macroeconomic events);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ A commitment to put any renewal to a shareholder vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The company's overall track record on corporate governance
 and responsiveness to shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Other factors as relevant.

**Unequal Voting Rights**: Generally vote withhold or against directors individually, committee members, or the entire board (except new nominees**<sup>1</sup>**, who should be considered case-by-case), if the company employs a common stock structure with unequal voting rights**<sup>8</sup>**.

Exceptions to this policy will generally be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ Newly-public companies **<sup>9</sup>** with a sunset provision
 of no more than seven years from the date of going public;

&nbsp;&nbsp;&nbsp;&nbsp;■ Limited Partnerships and the Operating Partnership (OP) unit structure
 of REITs;

&nbsp;&nbsp;&nbsp;&nbsp;■ Situations where the super-voting shares represent less than 5%
 of total voting power and therefore considered to be *de minimis*; or

**<sup>6</sup>** If a short-term pill with a deadhand or slowhand feature is enacted but expires before the next shareholder vote, ISS will generally still recommend withhold/against nominees at the next shareholder meeting following its adoption.

**<sup>7</sup>** Approval prior to, or in connection, with a company's becoming publicly-traded, or in connection with a de-SPAC transaction, is insufficient.

**<sup>8</sup>** This generally includes classes of common stock that have additional votes per share than other shares; classes of shares that are not entitled to vote on all the same ballot items or nominees; or stock with time-phased voting rights ("loyalty shares").

**<sup>9</sup>** Includes companies that emerge from bankruptcy, SPAC transactions, spin-offs, direct listings, and those who complete a traditional initial public offering.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ The company provides sufficient protections for minority shareholders,
 such as allowing minority shareholders a regular binding vote on whether the capital structure
 should be maintained.

**Classified Board Structure:** The board is classified, and a continuing director responsible for a problematic governance issue at the board/committee level that would warrant a withhold/against vote recommendation is not up for election. All appropriate nominees (except new) may be held accountable.

**Removal of Shareholder Discretion on Classified Boards** : The company has opted into, or failed to opt out of, state laws requiring a classified board structure.

**Problematic Governance Structure** : For companies that hold or held their first annual meeting**<sup>9</sup>** of public shareholders after Feb. 1, 2015, generally vote against or withhold from directors individually, committee members, or the entire board (except new nominees**<sup>1</sup>**, who should be considered case-by-case) if, prior to or in connection with the company's public offering, the company or its board adopted the following bylaw or charter provisions that are considered to be materially adverse to shareholder rights:

&nbsp;&nbsp;&nbsp;&nbsp;■ Supermajority vote requirements to amend the bylaws or charter;

&nbsp;&nbsp;&nbsp;&nbsp;■ A classified board structure; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Other egregious provisions.

A provision which specifies that the problematic structure(s) will be sunset within seven years of the date of going public will be considered a mitigating factor.

Unless the adverse provision is reversed or removed, vote case-by-case on director nominees in subsequent years.

**Unilateral Bylaw/Charter Amendments:** Generally vote against or withhold from directors individually, committee members, or the entire board (except new nominees**<sup>1</sup>**, who should be considered case-by-case) if the board amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes shareholders' rights or that could adversely impact shareholders, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The board's rationale for adopting the bylaw/charter amendment
 without shareholder ratification;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure by the company of any significant engagement with shareholders
 regarding the amendment;

&nbsp;&nbsp;&nbsp;&nbsp;■ The level of impairment of shareholders' rights caused by
 the board's unilateral amendment to the bylaws/charter;

&nbsp;&nbsp;&nbsp;&nbsp;■ The board's track record with regard to unilateral board action
 on bylaw/charter amendments or other entrenchment provisions;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's ownership structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's existing governance provisions;

&nbsp;&nbsp;&nbsp;&nbsp;■ The timing of the board's amendment to the bylaws/charter
 in connection with a significant business development; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Other factors, as deemed appropriate, that may be relevant to determine
 the impact of the amendment on shareholders.

Unless the adverse amendment is reversed or submitted to a binding shareholder vote, in subsequent years vote case-by-case on director nominees. Generally vote against (except new nominees**<sup>1</sup>**, who should be considered case-by-case) if the directors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Classified the board;

&nbsp;&nbsp;&nbsp;&nbsp;■ Adopted supermajority vote requirements to amend the bylaws or charter;

&nbsp;&nbsp;&nbsp;&nbsp;■ Eliminated shareholders' ability to amend bylaws;

&nbsp;&nbsp;&nbsp;&nbsp;■ Adopted a <u>fee-shifting provision</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Adopted another provision deemed egregious.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Restricting Binding Shareholder Proposals:** Generally vote against or withhold from the members of the governance committee if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's governing documents impose undue restrictions
 on shareholders' ability to amend the bylaws. Such restrictions include but are not
 limited to: outright prohibition on the submission of binding shareholder proposals or share
 ownership requirements, subject matter restrictions, or time holding requirements in excess
 of SEC Rule 14a-8. Vote against or withhold on an ongoing basis.

Submission of management proposals to approve or ratify requirements in excess of SEC Rule 14a-8 for the submission of binding bylaw amendments will generally be viewed as an insufficient restoration of shareholders' rights. Generally continue to vote against or withhold on an ongoing basis until shareholders are provided with an unfettered ability to amend the bylaws or a proposal providing for such unfettered right is submitted for shareholder approval.

**Director Performance Evaluation:** The board lacks mechanisms to promote accountability and oversight, coupled with sustained poor performance relative to peers. Sustained poor performance is measured by one-, three-, and five-year total shareholder returns in the bottom half of a company's four-digit GICS industry group (Russell 3000 companies only). Take into consideration the company's operational metrics and other factors as warranted. Problematic provisions include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ A classified board structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ A supermajority vote requirement;

&nbsp;&nbsp;&nbsp;&nbsp;■ Either a plurality vote standard in uncontested director elections,
 or a majority vote standard in contested elections;

&nbsp;&nbsp;&nbsp;&nbsp;■ The inability of shareholders to call special meetings;

&nbsp;&nbsp;&nbsp;&nbsp;■ The inability of shareholders to act by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;■ A multi-class capital structure; and/or

&nbsp;&nbsp;&nbsp;&nbsp;■ A non-shareholder-approved poison pill.

**Management Proposals to Ratify Existing Charter or Bylaw Provisions:** Vote against/withhold from individual directors, members of the governance committee, or the full board, where boards ask shareholders to ratify existing charter or bylaw provisions considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of a shareholder proposal addressing the same issue
 on the same ballot;

&nbsp;&nbsp;&nbsp;&nbsp;■ The board's rationale for seeking ratification;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of actions to be taken by the board should the ratification
 proposal fail;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of shareholder engagement regarding the board's
 ratification request;

&nbsp;&nbsp;&nbsp;&nbsp;■ The level of impairment to shareholders' rights caused by
 the existing provision;

&nbsp;&nbsp;&nbsp;&nbsp;■ The history of management and shareholder proposals on the provision
 at the company's past meetings;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the current provision was adopted in response to the shareholder
 proposal;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Previous use of ratification proposals to exclude shareholder proposals.

**Problematic Audit-Related Practices**

Generally vote against or withhold from the members of the Audit Committee if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The non-audit fees paid to the auditor are <u>excessive</u>;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company receives an adverse opinion on the company's financial
 statements from its auditor; or

&nbsp;&nbsp;&nbsp;&nbsp;■ There is persuasive evidence that the Audit Committee entered into
 an inappropriate indemnification agreement with its auditor that limits the ability of the
 company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

Vote case-by-case on members of the Audit Committee and potentially the full board if:

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ Poor accounting practices are identified that rise to a level of
 serious concern, such as: fraud; misapplication of GAAP; and material weaknesses identified
 in Section 404 disclosures. Examine the severity, breadth, chronological sequence, and duration,
 as well as the company's efforts at remediation or corrective actions, in determining
 whether withhold/against votes are warranted.

**Problematic Compensation Practices**

In the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot item or in egregious situations, vote against or withhold from the members of the Compensation Committee and potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;■ There is an unmitigated misalignment between CEO pay and company
 performance (<u>pay for performance</u>);

&nbsp;&nbsp;&nbsp;&nbsp;■ The company maintains significant <u>problematic pay practices</u>;
 or

&nbsp;&nbsp;&nbsp;&nbsp;■ The board exhibits a significant level of <u>poor communication and responsiveness</u> to shareholders.

Generally vote against or withhold from the Compensation Committee chair, other committee members, or potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company fails to include a Say on Pay ballot item when required
 under SEC provisions, or under the company's declared frequency of say on pay; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The company fails to include a Frequency of Say on Pay ballot item
 when required under SEC provisions.

Generally vote against members of the board committee responsible for approving/setting non-employee director compensation if there is a pattern (i.e. two or more years) of awarding excessive non-employee director compensation without disclosing a compelling rationale or other mitigating factors.

**Problematic Pledging of Company Stock** : Vote against the members of the committee that oversees risks related to pledging, or the full board, where a significant level of pledged company stock by executives or directors raises concerns. The following factors will be considered:

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of an anti-pledging policy, disclosed in the proxy
 statement, that prohibits future pledging activity;

&nbsp;&nbsp;&nbsp;&nbsp;■ The magnitude of aggregate pledged shares in terms of total common
 shares outstanding, market value, and trading volume;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of progress or lack thereof in reducing the magnitude
 of aggregate pledged shares over time;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure in the proxy statement that shares subject to
 stock ownership and holding requirements do not include pledged company stock; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other relevant factors.

**Climate Accountability**

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain**<sup>10</sup>**, generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a case-by-case basis) in cases where ISS determines that the company is not taking the minimum steps needed to understand, assess, and mitigate risks related to climate change to the company and the larger economy.

Minimum steps to understand and mitigate those risks are considered to be the following. Both minimum criteria will be required to be in alignment with the policy :

&nbsp;&nbsp;&nbsp;&nbsp;■ Detailed disclosure of climate-related risks, such as according
 to the framework established by the Task Force on Climate-related Financial Disclosures (TCFD),
 including:

**<sup>10</sup>** Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Board governance measures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Corporate strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Risk management analyses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Metrics and targets.

&nbsp;&nbsp;&nbsp;&nbsp;■ Appropriate GHG emissions reduction targets.

At this time, "appropriate GHG emissions reductions targets" will be medium-term GHG reduction targets or Net Zero-by-2050 GHG reduction targets for a company's operations (Scope 1) and electricity use (Scope 2). Targets should cover the vast majority of the company's direct emissions.

**Governance Failures**

Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or the entire board, due to:

&nbsp;&nbsp;&nbsp;&nbsp;■ Material failures of governance, stewardship, risk oversight **<sup>11</sup>**,
 or fiduciary responsibilities at the company;

&nbsp;&nbsp;&nbsp;&nbsp;■ Failure to replace management as appropriate; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Egregious actions related to a director's service on other
 boards that raise substantial doubt about his or her ability to effectively oversee management
 and serve the best interests of shareholders at any company.

Voting on Director Nominees in Contested Elections

**Vote-No Campaigns**

**General Recommendation:** In cases where companies are targeted in connection with public "vote-no" campaigns, evaluate director nominees under the existing governance policies for voting on director nominees in uncontested elections. Take into consideration the arguments submitted by shareholders and other publicly available information.

**Proxy Contests/Proxy Access**

**General Recommendation:** Vote case-by-case on the election of directors in contested elections, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Long-term financial performance of the company relative to its industry;

&nbsp;&nbsp;&nbsp;&nbsp;■ Management's track record;

&nbsp;&nbsp;&nbsp;&nbsp;■ Background to the contested election;

&nbsp;&nbsp;&nbsp;&nbsp;■ Nominee qualifications and any compensatory arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;■ Strategic plan of dissident slate and quality of the critique against
 management;

&nbsp;&nbsp;&nbsp;&nbsp;■ Likelihood that the proposed goals and objectives can be achieved
 (both slates); and

&nbsp;&nbsp;&nbsp;&nbsp;■ Stock ownership positions.

**<sup>11</sup>** Examples of failure of risk oversight include but are not limited to: bribery; large or serial fines or sanctions from regulatory bodies; demonstrably poor risk oversight of environmental and social issues, including climate change; significant adverse legal judgments or settlement; or hedging of company stock.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

In the case of candidates nominated pursuant to proxy access, vote case-by-case considering any applicable factors listed above or additional factors which may be relevant, including those that are specific to the company, to the nominee(s) and/or to the nature of the election (such as whether there are more candidates than board seats).

Other Board-Related Proposals

**Adopt Anti-Hedging/Pledging/Speculative Investments Policy**

**General Recommendation:** Generally vote for proposals seeking a policy that prohibits named executive officers from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock in a margin account, or pledging stock as collateral for a loan. However, the company's existing policies regarding responsible use of company stock will be considered.

**Board Refreshment**

Board refreshment is best implemented through an ongoing program of individual director evaluations, conducted annually, to ensure the evolving needs of the board are met and to bring in fresh perspectives, skills, and diversity as needed.

**Term/Tenure Limits**

**General Recommendation:** Vote case-by-case on management proposals regarding director term/tenure limits, considering:

&nbsp;&nbsp;&nbsp;&nbsp;■ The rationale provided for adoption of the term/tenure limit;

&nbsp;&nbsp;&nbsp;&nbsp;■ The robustness of the company's board evaluation process;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the limit is of sufficient length to allow for a broad range
 of director tenures;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the limit would disadvantage independent directors compared
 to non-independent directors; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the board will impose the limit evenly, and not have the
 ability to waive it in a discriminatory manner.

Vote case-by-case on shareholder proposals asking for the company to adopt director term/tenure limits, considering:

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope of the shareholder proposal; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Evidence of problematic issues at the company combined with, or
 exacerbated by, a lack of board refreshment.

**Age Limits**

**General Recommendation:** Generally vote against management and shareholder proposals to limit the tenure of independent directors through mandatory retirement ages. Vote for proposals to remove mandatory age limits.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Board Size**

**General Recommendation:** Vote for proposals seeking to fix the board size or designate a range for the board size.

Vote against proposals that give management the ability to alter the size of the board outside of a specified range without shareholder approval.

**Classification/Declassification of the Board**

**General Recommendation:** Vote against proposals to classify (stagger) the board.

Vote for proposals to repeal classified boards and to elect all directors annually.

**CEO Succession Planning**

**General Recommendation:** Generally vote for proposals seeking disclosure on a CEO succession planning policy, considering, at a minimum, the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The reasonableness/scope of the request; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's existing disclosure on its current CEO succession
 planning process.

**Cumulative Voting**

**General Recommendation:** Generally vote against management proposals to eliminate cumulate voting, and for shareholder proposals to restore or provide for cumulative voting, unless:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has proxy access **<sup>12</sup>**, thereby allowing
 shareholders to nominate directors to the company's ballot; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has adopted a majority vote standard, with a carve-out
 for plurality voting in situations where there are more nominees than seats, and a director
 resignation policy to address failed elections.

Vote for proposals for cumulative voting at controlled companies (insider voting power > 50%).

**<sup>12</sup>** A proxy access right that meets the <u>recommended guidelines.</u>

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Director and Officer Indemnification, Liability Protection, and Exculpation**

**General Recommendation:** Vote case-by-case on proposals on director and officer indemnification, liability protection, and exculpation**<sup>13</sup>**.

Consider the stated rationale for the proposed change. Also consider, among other factors, the extent to which the proposal would:

&nbsp;&nbsp;&nbsp;&nbsp;■ Eliminate directors' and officers' liability for monetary
 damages for violating the duty of care;

&nbsp;&nbsp;&nbsp;&nbsp;■ Eliminate directors' and officers' liability for monetary
 damages for violating the duty of loyalt;

&nbsp;&nbsp;&nbsp;&nbsp;■ Expand coverage beyond just legal expenses to liability for acts
 that are more serious violations of fiduciary obligation than mere carelessness; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Expand the scope of indemnification to provide for mandatory indemnification
 of company officials in connection with acts that previously the company was permitted to
 provide indemnification for, at the discretion of the company's board (*i.e.*,
 "permissive indemnification"), but that previously the company was not required
 to indemnify.

Vote for those proposals providing such expanded coverage in cases when a director's or officer's legal defense was unsuccessful if both of the following apply:

&nbsp;&nbsp;&nbsp;&nbsp;■ If the individual was found to have acted in good faith and in a
 manner that the individual reasonably believed was in the best interests of the company;
 and

&nbsp;&nbsp;&nbsp;&nbsp;■ If only the individual's legal expenses would be covered.

**Establish/Amend Nominee Qualifications**

**General Recommendation:** Vote case-by-case on proposals that establish or amend director qualifications. Votes should be based on the reasonableness of the criteria and the degree to which they may preclude dissident nominees from joining the board.

Vote case-by-case on shareholder resolutions seeking a director nominee who possesses a particular subject matter expertise, considering:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's board committee structure, existing subject
 matter expertise, and board nomination provisions relative to that of its peers;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's existing board and management oversight mechanisms
 regarding the issue for which board oversight is sought;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's disclosure and performance relating to the issue
 for which board oversight is sought and any significant related controversies; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope and structure of the proposal.

**<sup>13</sup>** **Indemnification**: the condition of being secured against loss or damage.

**Limited liability**: a person's financial liability is limited to a fixed sum, or personal financial assets are not at risk if the individual loses a lawsuit that results in financial award/damages to the plaintiff.

**Exculpation**: to eliminate or limit the personal liability of a director or officer to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director or officer.

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**Establish Other Board Committee Proposals**

**General Recommendation:** Generally vote against shareholder proposals to establish a new board committee, as such proposals seek a specific oversight mechanism/structure that potentially limits a company's flexibility to determine an appropriate oversight mechanism for itself. However, the following factors will be considered:

&nbsp;&nbsp;&nbsp;&nbsp;■ Existing oversight mechanisms (including current committee structure)
 regarding the issue for which board oversight is sought;

&nbsp;&nbsp;&nbsp;&nbsp;■ Level of disclosure regarding the issue for which board oversight
 is sought;

&nbsp;&nbsp;&nbsp;&nbsp;■ Company performance related to the issue for which board oversight
 is sought;

&nbsp;&nbsp;&nbsp;&nbsp;■ Board committee structure compared to that of other companies in
 its industry sector; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope and structure of the proposal.

**Filling Vacancies/Removal of Directors**

**General Recommendation:** Vote against proposals that provide that directors may be removed only for cause. Vote for proposals to restore shareholders' ability to remove directors with or without cause.

Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

Vote for proposals that permit shareholders to elect directors to fill board vacancies.

**Independent Board Chair**

**General Recommendation:** Generally vote for shareholder proposals requiring that the board chair position be filled by an independent director, taking into consideration the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope and rationale of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's current board leadership structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's governance structure and practices;

&nbsp;&nbsp;&nbsp;&nbsp;■ Company performance; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other relevant factors that may be applicable.

The following factors will increase the likelihood of a "for" recommendation:

&nbsp;&nbsp;&nbsp;&nbsp;■ A majority non-independent board and/or the presence of non-independent
 directors on key board committees;

&nbsp;&nbsp;&nbsp;&nbsp;■ A weak or poorly-defined lead independent director role that fails
 to serve as an appropriate counterbalance to a combined CEO/chair role;

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of an executive or non-independent chair in addition
 to the CEO, a recent recombination of the role of CEO and chair, and/or departure from a
 structure with an independent chair;

&nbsp;&nbsp;&nbsp;&nbsp;■ Evidence that the board has failed to oversee and address material
 risks facing the company;

&nbsp;&nbsp;&nbsp;&nbsp;■ A material governance failure, particularly if the board has failed
 to adequately respond to shareholder concerns or if the board has materially diminished shareholder
 rights; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Evidence that the board has failed to intervene when management's
 interests are contrary to shareholders' interests.

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**Majority of Independent Directors/Establishment of Independent Committees**

**General Recommendation:** Vote for shareholder proposals asking that a majority or more of directors be independent unless the board composition already meets the proposed threshold by ISS' definition of Independent Director (See <u>ISS' Classification of Directors</u>.)

Vote for shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors unless they currently meet that standard.

**Majority Vote Standard for the Election of Directors**

**General Recommendation:** Generally vote for management proposals to adopt a majority of votes cast standard for directors in uncontested elections. Vote against if no carve-out for a plurality vote standard in contested elections is included.

Generally vote for precatory and binding shareholder resolutions requesting that the board change the company's bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve- out for a plurality vote standard when there are more nominees than board seats.

Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.

**Proxy Access**

**General Recommendation:** Generally vote for management and shareholder proposals for proxy access with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;■ **Ownership threshold:** maximum requirement not more than three
 percent (3%) of the voting power;

&nbsp;&nbsp;&nbsp;&nbsp;■ **Ownership duration:** maximum requirement not longer than three
 (3) years of continuous ownership for each member of the nominating group;

&nbsp;&nbsp;&nbsp;&nbsp;■ **Aggregation:** minimal or no limits on the number of shareholders
 permitted to form a nominating group; and

&nbsp;&nbsp;&nbsp;&nbsp;■ **Cap:** cap on nominees of generally twenty-five percent (25%)
 of the board.

Review for reasonableness any other restrictions on the right of proxy access. Generally vote against proposals that are more restrictive than these guidelines.

**Require More Nominees than Open Seats**

**General Recommendation:** Vote against shareholder proposals that would require a company to nominate more candidates than the number of open board seats.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Shareholder Engagement Policy (Shareholder Advisory Committee)**

**General Recommendation:** Generally vote for shareholder proposals requesting that the board establish an internal mechanism/process, which may include a committee, in order to improve communications between directors and shareholders, unless the company has the following features, as appropriate:

&nbsp;&nbsp;&nbsp;&nbsp;■ Established a communication structure that goes beyond the exchange
 requirements to facilitate the exchange of information between shareholders and members of
 the board;

&nbsp;&nbsp;&nbsp;&nbsp;■ Effectively disclosed information with respect to this structure
 to its shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;■ Company has not ignored majority-supported shareholder proposals,
 or a majority withhold vote on a director nominee; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has an independent chair or a lead director, according
 to <u>ISS' definition</u>. This individual must be made available for periodic consultation
 and direct communication with major shareholders.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;2. Audit-Related

**Auditor Indemnification and Limitation of Liability**

**General Recommendation:** Vote case-by-case on the issue of auditor indemnification and limitation of liability. Factors to be assessed include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ The terms of the auditor agreement—the degree to which these
 agreements impact shareholders' rights;

&nbsp;&nbsp;&nbsp;&nbsp;■ The motivation and rationale for establishing the agreements;

&nbsp;&nbsp;&nbsp;&nbsp;■ The quality of the company's disclosure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's historical practices in the audit area.

Vote against or withhold from members of an audit committee in situations where there is persuasive evidence that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

**Auditor Ratification**

**General Recommendation:** Vote for proposals to ratify auditors unless any of the following apply:

&nbsp;&nbsp;&nbsp;&nbsp;■ An auditor has a financial interest in or association with the company,
 and is therefore not independent;

&nbsp;&nbsp;&nbsp;&nbsp;■ There is reason to believe that the independent auditor has rendered
 an opinion that is neither accurate nor indicative of the company's financial position;

&nbsp;&nbsp;&nbsp;&nbsp;■ Poor accounting practices are identified that rise to a serious
 level of concern, such as fraud or misapplication of GAAP; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Fees for non-audit services ("Other" fees) are excessive.

Non-audit fees are excessive if:

&nbsp;&nbsp;&nbsp;&nbsp;■ Non-audit ("other") fees > audit fees + audit-related
 fees + tax compliance/preparation fees

Tax compliance and preparation include the preparation of original and amended tax returns and refund claims, and tax payment planning. All other services in the tax category, such as tax advice, planning, or consulting, should be added to "Other" fees. If the breakout of tax fees cannot be determined, add all tax fees to "Other" fees.

In circumstances where "Other" fees include fees related to significant one-time capital structure events (such as initial public offerings, bankruptcy emergence, and spin-offs) and the company makes public disclosure of the amount and nature of those fees that are an exception to the standard "non-audit fee" category, then such fees may be excluded from the non-audit fees considered in determining the ratio of non-audit to audit/audit-related fees/tax compliance and preparation for purposes of determining whether non-audit fees are excessive.

**Shareholder Proposals Limiting Non-Audit Services**

**General Recommendation:** Vote case-by-case on shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Shareholder Proposals on Audit Firm Rotation**

**General Recommendation:** Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into account:

■ The tenure of the audit firm;

■ The length of rotation specified in the proposal;

■ Any significant audit-related issues at the company;

■ The number of Audit Committee meetings held each year;

■ The number of financial experts serving on the committee;
and

■ Whether the company has a periodic renewal process where
the auditor is evaluated for both audit quality and competitive price.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;3. Shareholder Rights &
 Defenses

**Advance Notice Requirements for Shareholder Proposals/Nominations**

**General Recommendation:** Vote case-by-case on advance notice proposals, giving support to those proposals which allow shareholders to submit proposals/nominations as close to the meeting date as reasonably possible and within the broadest window possible, recognizing the need to allow sufficient notice for company, regulatory, and shareholder review.

To be reasonable, the company's deadline for shareholder notice of a proposal/nominations must be no earlier than 120 days prior to the anniversary of the previous year's meeting and have a submittal window of no shorter than 30 days from the beginning of the notice period (also known as a 90-120-day window). The submittal window is the period under which shareholders must file their proposals/nominations prior to the deadline.

In general, support additional efforts by companies to ensure full disclosure in regard to a proponent's economic and voting position in the company so long as the informational requirements are reasonable and aimed at providing shareholders with the necessary information to review such proposals.

**Amend Bylaws without Shareholder Consent**

**General Recommendation:** Vote against proposals giving the board exclusive authority to amend the bylaws.

Vote case-by-case on proposals giving the board the ability to amend the bylaws in addition to shareholders, taking into account the following:

■ Any impediments
 to shareholders' ability to amend the bylaws (i.e. supermajority voting requirements);

■ The company's
 ownership structure and historical voting turnout;

■ Whether the board
 could amend bylaws adopted by shareholders; and

■ Whether shareholders
 would retain the ability to ratify any board-initiated amendments.

**Control Share Acquisition Provisions**

**General Recommendation:** Vote for proposals to opt out of control share acquisition statutes unless doing so would enable the completion of a takeover that would be detrimental to shareholders.

Vote against proposals to amend the charter to include control share acquisition provisions.

Vote for proposals to restore voting rights to the control shares.

Control share acquisition statutes function by denying shares their voting rights when they contribute to ownership in excess of certain thresholds. Voting rights for those shares exceeding ownership limits may only be restored by approval of either a majority or supermajority of disinterested shares. Thus, control share acquisition statutes effectively require a hostile bidder to put its offer to a shareholder vote or risk voting disenfranchisement if the bidder continues buying up a large block of shares.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Control Share Cash-Out Provisions**

**General Recommendation:** Vote for proposals to opt out of control share cash-out statutes.

Control share cash-out statutes give dissident shareholders the right to "cash-out" of their position in a company at the expense of the shareholder who has taken a control position. In other words, when an investor crosses a preset threshold level, remaining shareholders are given the right to sell their shares to the acquirer, who must buy them at the highest acquiring price.

**Disgorgement Provisions**

**General Recommendation:** Vote for proposals to opt out of state disgorgement provisions.

Disgorgement provisions require an acquirer or potential acquirer of more than a certain percentage of a company's stock to disgorge, or pay back, to the company any profits realized from the sale of that company's stock purchased 24 months before achieving control status. All sales of company stock by the acquirer occurring within a certain period of time (between 18 months and 24 months) prior to the investor's gaining control status are subject to these recapture-of-profits provisions.

**Fair Price Provisions**

**General Recommendation:** Vote case-by-case on proposals to adopt fair price provisions (provisions that stipulate that an acquirer must pay the same price to acquire all shares as it paid to acquire the control shares), evaluating factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price provision, and the mechanism for determining the fair price.

Generally vote against fair price provisions with shareholder vote requirements greater than a majority of disinterested shares.

**Freeze-Out Provisions**

**General Recommendation:** Vote for proposals to opt out of state freeze-out provisions. Freeze-out provisions force an investor who surpasses a certain ownership threshold in a company to wait a specified period of time before gaining control of the company.

**Greenmail**

**General Recommendation:** Vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a company's ability to make greenmail payments.

Vote case-by-case on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

Greenmail payments are targeted share repurchases by management of company stock from individuals or groups seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium over the market value of its shares, the practice discriminates against all other shareholders.

**Shareholder Litigation Rights**

**Federal Forum Selection Provisions**

Federal forum selection provisions require that U.S. federal courts be the sole forum for shareholders to litigate claims arising under federal securities law.

**General Recommendation:** Generally vote for federal forum selection provisions in the charter or bylaws that specify "the district courts of the United States" as the exclusive forum for federal securities law matters, in the absence of serious concerns about corporate governance or board responsiveness to shareholders.

Vote against provisions that restrict the forum to a particular federal district court; unilateral adoption (without a shareholder vote) of such a provision will generally be considered a one-time failure under the <u>Unilateral Bylaw/Charter Amendments</u> policy.

**Exclusive Forum Provisions for State Law Matters**

Exclusive forum provisions in the charter or bylaws restrict shareholders' ability to bring derivative lawsuits against the company, for claims arising out of state corporate law, to the courts of a particular state (generally the state of incorporation).

**General Recommendation:** Generally vote for charter or bylaw provisions that specify courts located within the state of Delaware as the exclusive forum for corporate law matters for Delaware corporations, in the absence of serious concerns about corporate governance or board responsiveness to shareholders.

For states other than Delaware, vote case-by-case on exclusive forum provisions, taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's stated rationale for adopting such a provision;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of past harm from duplicative shareholder lawsuits in
 more than one forum;

&nbsp;&nbsp;&nbsp;&nbsp;■ The breadth of application of the charter or bylaw provision, including
 the types of lawsuits to which it would apply and the definition of key terms; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Governance features such as shareholders' ability to repeal
 the provision at a later date (including the vote standard applied when shareholders attempt
 to amend the charter or bylaws) and their ability to hold directors accountable through annual
 director elections and a majority vote standard in uncontested elections.

Generally vote against provisions that specify a state other than the state of incorporation as the exclusive forum for corporate law matters, or that specify a particular local court within the state; unilateral adoption of such a provision will generally be considered a one-time failure under the <u>Unilateral Bylaw/Charter Amendments</u> policy.

**Fee shifting**

Fee-shifting provisions in the charter or bylaws require that a shareholder who sues a company unsuccessfully pay all litigation expenses of the defendant corporation and its directors and officers.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**General Recommendation:** Generally vote against provisions that mandate fee-shifting whenever plaintiffs are not completely successful on the merits (i.e., including cases where the plaintiffs are partially successful).

Unilateral adoption of a fee-shifting provision will generally be considered an ongoing failure under the <u>Unilateral Bylaw/Charter Amendments</u> policy.

**Net Operating Loss (NOL) Protective Amendments**

**General Recommendation:** Vote against proposals to adopt a protective amendment for the stated purpose of protecting a company's net operating losses (NOL) if the effective term of the protective amendment would exceed the shorter of three years and the exhaustion of the NOL.

Vote case-by-case, considering the following factors, for management proposals to adopt an NOL protective amendment that would remain in effect for the shorter of three years (or less) and the exhaustion of the NOL:

&nbsp;&nbsp;&nbsp;&nbsp;■ The ownership threshold (NOL protective amendments generally prohibit
 stock ownership transfers that would result in a new 5-percent holder or increase the stock
 ownership percentage of an existing 5-percent holder);

&nbsp;&nbsp;&nbsp;&nbsp;■ The value of the NOLs;

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholder protection mechanisms (sunset provision or commitment
 to cause expiration of the protective amendment upon exhaustion or expiration of the NOL);

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's existing governance structure including: board
 independence, existing takeover defenses, track record of responsiveness to shareholders,
 and any other problematic governance concerns; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other factors that may be applicable.

Poison Pills (Shareholder Rights Plans)

**Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy**

**General Recommendation:** Vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it unless the company has: (1) A shareholder-approved poison pill in place; or (2) The company has adopted a policy concerning the adoption of a pill in the future specifying that the board will only adopt a shareholder rights plan if either:

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholders have approved the adoption of the plan; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The board, in its exercise of its fiduciary responsibilities, determines
 that it is in the best interest of shareholders under the circumstances to adopt a pill without
 the delay in adoption that would result from seeking stockholder approval (i.e., the "fiduciary
 out" provision). A poison pill adopted under this fiduciary out will be put to a shareholder
 ratification vote within 12 months of adoption or expire. If the pill is not approved by
 a majority of the votes cast on this issue, the plan will immediately terminate.

If the shareholder proposal calls for a time period of less than 12 months for shareholder ratification after adoption, vote for the proposal, but add the caveat that a vote within 12 months would be considered sufficient implementation.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Management Proposals to Ratify a Poison Pill**

**General Recommendation:** Vote case-by-case on management proposals on poison pill ratification, focusing on the features of the shareholder rights plan. Rights plans should contain the following attributes:

&nbsp;&nbsp;&nbsp;&nbsp;■ No lower than a 20 percent trigger,
 flip-in or flip-over;

&nbsp;&nbsp;&nbsp;&nbsp;■ A term of no more than three years;

&nbsp;&nbsp;&nbsp;&nbsp;■ No deadhand, slowhand, no-hand, or similar
 feature that limits the ability of a future board to redeem the pill; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholder redemption feature (qualifying
 offer clause); if the board refuses to redeem the pill 90 days after a qualifying offer is
 announced, 10 percent of the shares may call a special meeting or seek a written consent
 to vote on rescinding the pill.

In addition, the rationale for adopting the pill should be thoroughly explained by the company. In examining the request for the pill, take into consideration the company's existing governance structure, including: board independence, existing takeover defenses, and any problematic governance concerns.

**Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)**

**General Recommendation:** Vote against proposals to adopt a poison pill for the stated purpose of protecting a company's net operating losses (NOL) if the term of the pill would exceed the shorter of three years and the exhaustion of the NOL.

Vote case-by-case on management proposals for poison pill ratification, considering the following factors, if the term of the pill would be the shorter of three years (or less) and the exhaustion of the NOL:

&nbsp;&nbsp;&nbsp;&nbsp;■ The ownership threshold to transfer (NOL pills generally have a
 trigger slightly below 5 percent);

&nbsp;&nbsp;&nbsp;&nbsp;■ The value of the NOLs;

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholder protection mechanisms (sunset provision, or commitment
 to cause expiration of the pill upon exhaustion or expiration of NOLs);

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's existing governance structure, including: board
 independence, existing takeover defenses, track record of responsiveness to shareholders,
 and any other problematic governance concerns; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other factors that may be applicable.

**Proxy Voting Disclosure, Confidentiality, and Tabulation**

**General Recommendation:** Vote case-by-case on proposals regarding proxy voting mechanics, taking into consideration whether implementation of the proposal is likely to enhance or protect shareholder rights. Specific issues covered under the policy include, but are not limited to, confidential voting of individual proxies and ballots, confidentiality of running vote tallies, and the treatment of abstentions and/or broker non-votes in the company's vote-counting methodology.

While a variety of factors may be considered in each analysis, the guiding principles are: transparency, consistency, and fairness in the proxy voting process. The factors considered, as applicable to the proposal, may include:

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope and structure of the proposal;

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's stated confidential
 voting policy (or other relevant policies) and whether it ensures a "level playing
 field" by providing shareholder proponents with equal access to vote information prior
 to the annual meeting;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's vote standard for management and shareholder
 proposals and whether it ensures consistency and fairness in the proxy voting process and
 maintains the integrity of vote results;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company's disclosure regarding its vote counting
 method and other relevant voting policies with respect to management and shareholder proposals
 are consistent and clear;

&nbsp;&nbsp;&nbsp;&nbsp;■ Any recent controversies or concerns related to the company's
 proxy voting mechanics;

&nbsp;&nbsp;&nbsp;&nbsp;■ Any unintended consequences resulting from implementation of the
 proposal; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other factors that may be relevant.

**Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions**

**General Recommendation:** Generally vote against management proposals to ratify provisions of the company's existing charter or bylaws, unless these governance provisions align with best practice.

In addition, voting against/withhold from individual directors, members of the governance committee, or the full board may be warranted, considering:

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of a shareholder proposal addressing the same issue
 on the same ballot;

&nbsp;&nbsp;&nbsp;&nbsp;■ The board's rationale for seeking ratification;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of actions to be taken by the board should the ratification
 proposal fail;

&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of shareholder engagement regarding the board's
 ratification request;

&nbsp;&nbsp;&nbsp;&nbsp;■ The level of impairment to shareholders' rights caused by
 the existing provision;

&nbsp;&nbsp;&nbsp;&nbsp;■ The history of management and shareholder proposals on the provision
 at the company's past meetings;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the current provision was adopted in response to the shareholder
 proposal;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Previous use of ratification proposals to exclude shareholder proposals.

**Reimbursing Proxy Solicitation Expenses**

**General Recommendation:** Vote case-by-case on proposals to reimburse proxy solicitation expenses.

When voting in conjunction with support of a dissident slate, vote for the reimbursement of all appropriate proxy solicitation expenses associated with the election.

Generally vote for shareholder proposals calling for the reimbursement of reasonable costs incurred in connection with nominating one or more candidates in a contested election where the following apply:

&nbsp;&nbsp;&nbsp;&nbsp;■ The election of fewer than 50 percent of the directors to be elected
 is contested in the election;

&nbsp;&nbsp;&nbsp;&nbsp;■ One or more of the dissident's candidates is elected;

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholders are not permitted to cumulate their votes for directors;
 and

&nbsp;&nbsp;&nbsp;&nbsp;■ The election occurred, and the expenses were incurred, after the
 adoption of this bylaw.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Reincorporation Proposals**

**General Recommendation:** Management or shareholder proposals to change a company's state of incorporation should be evaluated case-by-case, giving consideration to both financial and corporate governance concerns including the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Reasons for reincorporation;

&nbsp;&nbsp;&nbsp;&nbsp;■ Comparison of company's governance practices and provisions
 prior to and following the reincorporation; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Comparison of corporation laws of original state and destination
 state.

Vote for reincorporation when the economic factors outweigh any neutral or negative governance changes.

**Shareholder Ability to Act by Written Consent**

**General Recommendation:** Generally vote against management and shareholder proposals to restrict or prohibit shareholders' ability to act by written consent.

Generally vote for management and shareholder proposals that provide shareholders with the ability to act by written consent, taking into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholders' current right to act by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;■ The consent threshold;

&nbsp;&nbsp;&nbsp;&nbsp;■ The inclusion of exclusionary or prohibitive language;

&nbsp;&nbsp;&nbsp;&nbsp;■ Investor ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholder support of, and management's response to, previous
 shareholder proposals.

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the following governance and antitakeover provisions:

&nbsp;&nbsp;&nbsp;&nbsp;■ An unfettered **<sup>14</sup>** right for shareholders to call
 special meetings at a 10 percent threshold;

&nbsp;&nbsp;&nbsp;&nbsp;■ A majority vote standard in uncontested director elections;

&nbsp;&nbsp;&nbsp;&nbsp;■ No non-shareholder-approved pill; and

&nbsp;&nbsp;&nbsp;&nbsp;■ An annually elected board.

**Shareholder Ability to Call Special Meetings**

**General Recommendation:** Vote against management or shareholder proposals to restrict or prohibit shareholders' ability to call special meetings.

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special meetings taking into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholders' current right to call special meetings;

**<sup>14</sup>** "Unfettered" means no restrictions on agenda items, no restrictions on the number of shareholders who can group together to reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after the last annual meeting and no greater than 90 prior to the next annual meeting.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;■ Minimum ownership threshold necessary to call special meetings (10
 percent preferred);

&nbsp;&nbsp;&nbsp;&nbsp;■ The inclusion of exclusionary or prohibitive language;

&nbsp;&nbsp;&nbsp;&nbsp;■ Investor ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Shareholder support of, and management's response to, previous
 shareholder proposals.

**Stakeholder Provisions**

**General Recommendation:** Vote against proposals that ask the board to consider non-shareholder constituencies or other non-financial effects when evaluating a merger or business combination.

**State Antitakeover Statutes**

**General Recommendation:** Vote case-by-case on proposals to opt in or out of state takeover statutes (including fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, and anti-greenmail provisions).

**Supermajority Vote Requirements**

**General Recommendation:** Vote against proposals to require a supermajority shareholder vote.

Vote for management or shareholder proposals to reduce supermajority vote requirements. However, for companies with shareholder(s) who have significant ownership levels, vote case-by-case, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ Ownership structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ Quorum requirements; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Vote requirements.

**Virtual Shareholder Meetings**

**General Recommendation:** Generally vote for management proposals allowing for the convening of shareholder meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to disclose the circumstances under which virtual-only**<sup>15</sup>** meetings would be held, and to allow for comparable rights and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Vote case-by-case on shareholder proposals concerning virtual-only meetings, considering:

&nbsp;&nbsp;&nbsp;&nbsp;■ Scope and rationale of the proposal; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Concerns identified with the company's prior meeting practices.

**<sup>15</sup>** Virtual-only shareholder meeting" refers to a meeting of shareholders that is held exclusively using technology without a corresponding in-person meeting.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

&nbsp;&nbsp;&nbsp;&nbsp;4. Capital/Restructuring

Capital

**Adjustments to Par Value of Common Stock**

**General Recommendation:** Vote for management proposals to reduce the par value of common stock unless the action is being taken to facilitate an anti-takeover device or some other negative corporate governance action.

Vote for management proposals to eliminate par value.

**Common Stock Authorization**

**General Authorization Requests**

**General Recommendation:** Vote case-by-case on proposals to increase the number of authorized shares of common stock that are to be used for general corporate purposes:

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage (outstanding plus reserved) is less than 50% of the
 current authorized shares, vote for an increase of up to **50** % of current authorized
 share;

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage is 50% to 100% of the current authorized, vote for
 an increase of up to **100** % of current authorized shares;

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage is greater than current authorized shares, vote for
 an increase of up to the current share usage; or

&nbsp;&nbsp;&nbsp;&nbsp;■ In the case of a stock split, the allowable increase is calculated
 (per above) based on the post-split adjusted authorization.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company's prior or ongoing use of authorized shares is problematic, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ The proposal seeks to increase the number of authorized shares of
 the class of common stock that has superior voting rights to other share classes;

&nbsp;&nbsp;&nbsp;&nbsp;■ On the same ballot is a proposal for a reverse split for which support
 is warranted despite the fact that it would result in an excessive increase in the share
 authorization;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has a non-shareholder approved poison pill (including
 an NOL pill); or

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has previous sizeable placements (within the past 3
 years) of stock with insiders at prices substantially below market value, or with problematic
 voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is disclosure of specific and severe risks to shareholders of not approving the request, such as:

&nbsp;&nbsp;&nbsp;&nbsp;■ In, or subsequent to, the company's most recent 10-K filing,
 the company discloses that there is substantial doubt about its ability to continue as a
 going concern;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company states that there is a risk of imminent bankruptcy or
 imminent liquidation if shareholders do not approve the increase in authorized capital; or

&nbsp;&nbsp;&nbsp;&nbsp;■ A government body has in the past year required the company to increase
 its capital ratios.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

For companies incorporated in states that allow increases in authorized capital without shareholder approval, generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to the above policies.

**Specific Authorization Requests**

**General Recommendation:** Generally vote for proposals to increase the number of authorized common shares where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;■ twice the amount needed to support the transactions on the ballot,
 and

&nbsp;&nbsp;&nbsp;&nbsp;■ the allowable increase as calculated for general issuances above.

**Dual Class Structure**

**General Recommendation:** Generally vote against proposals to create a new class of common stock unless:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company discloses a compelling rationale for the dual-class
 capital structure, such as:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's auditor has concluded that there is substantial
 doubt about the company's ability to continue as a going concern; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The new class of shares will be transitory;

&nbsp;&nbsp;&nbsp;&nbsp;■ The new class is intended for financing purposes with minimal or
 no dilution to current shareholders in both the short term and long term; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The new class is not designed to preserve or increase the voting
 power of an insider or significant shareholder.

**Issue Stock for Use with Rights Plan**

**General Recommendation:** Vote against proposals that increase authorized common stock for the explicit purpose of implementing a non-shareholder-approved shareholder rights plan (poison pill).

**Preemptive Rights**

**General Recommendation:** Vote case-by-case on shareholder proposals that seek preemptive rights, taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;■ The size of the company;

&nbsp;&nbsp;&nbsp;&nbsp;■ The shareholder base; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The liquidity of the stock.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Preferred Stock Authorization**

**General Authorization Requests**

**General Recommendation:** Vote case-by-case on proposals to increase the number of authorized shares of preferred stock that are to be used for general corporate purposes:

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage (outstanding plus reserved) is less than 50% of the
 current authorized shares, vote for an increase of up to **50** % of current authorized
 shares;

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage is 50% to 100% of the current authorized, vote for
 an increase of up to **100** % of current authorized shares;

&nbsp;&nbsp;&nbsp;&nbsp;■ If share usage is greater than current authorized shares, vote for
 an increase of up to the current share usage.

&nbsp;&nbsp;&nbsp;&nbsp;■ In the case of a stock split, the allowable increase is calculated
 (per above) based on the post-split adjusted authorization; or

&nbsp;&nbsp;&nbsp;&nbsp;■ If no preferred shares are currently issued and outstanding, vote
 against the request, unless the company discloses a specific use for the shares.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company's prior or ongoing use of authorized shares is problematic, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ If the shares requested are blank check preferred shares that can
 be used for antitakeover purposes; **<sup>16</sup>** 

&nbsp;&nbsp;&nbsp;&nbsp;■ The company seeks to increase a class of non-convertible preferred
 shares entitled to more than one vote per share on matters that do not solely affect the
 rights of preferred stockholders "supervoting shares");

&nbsp;&nbsp;&nbsp;&nbsp;■ The company seeks to increase a class of convertible preferred shares
 entitled to a number of votes greater than the number of common shares into which they are
 convertible ("supervoting shares") on matters that do not solely affect the rights
 of preferred stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;■ The stated intent of the increase in the general authorization is
 to allow the company to increase an existing designated class of supervoting preferred shares;

&nbsp;&nbsp;&nbsp;&nbsp;■ On the same ballot is a proposal for a reverse split for which support
 is warranted despite the fact that it would result in an excessive increase in the share
 authorization;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has a non-shareholder approved poison pill (including
 an NOL pill); and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has previous sizeable placements (within the past 3
 years) of stock with insiders at prices substantially below market value, or with problematic
 voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is disclosure of specific and severe risks to shareholders of not approving the request, such as:

&nbsp;&nbsp;&nbsp;&nbsp;■ In, or subsequent to, the company's most recent 10-K filing,
 the company discloses that there is substantial doubt about its ability to continue as a
 going concern;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company states that there is a risk of imminent bankruptcy or
 imminent liquidation if shareholders do not approve the increase in authorized capital; or

&nbsp;&nbsp;&nbsp;&nbsp;■ A government body has in the past year required the company to increase
 its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval, generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to the above policies.

**<sup>16</sup>** To be acceptable, appropriate disclosure would be needed that the shares are "declawed": i.e., representation by the board that it will not, without prior stockholder approval, issue or use the preferred stock for any defensive or anti-takeover purpose or for the purpose of implementing any stockholder rights plan.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**<u>Specific Authorization Requests</u>**

**General Recommendation:** Generally vote for proposals to increase the number of authorized preferred shares where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

■ twice the amount needed to support the transactions on the
ballot, and

■ the allowable increase as calculated for general issuances
above.

**Recapitalization Plans**

**General Recommendation:** Vote case-by-case on recapitalizations (reclassifications of securities), taking into account the following:

■ More simplified capital structure;

■ Enhanced liquidity;

■ Fairness of conversion terms;

■ Impact on voting power and dividends;

■ Reasons for the reclassification;

■ Conflicts of interest; and

■ Other alternatives considered.

**Reverse Stock Splits**

**General Recommendation:** Vote for management proposals to implement a reverse stock split if:

■ The number of authorized shares will be proportionately reduced;
or

■ The effective increase in authorized shares is equal to or
less than the allowable increase calculated in accordance with ISS' <u>Common Stock Authorization</u> policy.

Vote case-by-case on proposals that do not meet either of the above conditions, taking into consideration the following factors:

■ Stock exchange notification to the company of a potential
delisting;

■ Disclosure of substantial doubt about the company's
ability to continue as a going concern without additional financing;

■ The company's rationale; or

■ Other factors as applicable.

**Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.**

**General Recommendation:** For U.S. domestic issuers incorporated outside the U.S. and listed <u>solely</u> on a U.S. exchange, generally vote for resolutions to authorize the issuance of common shares up to 20 percent of currently issued common share capital, where not tied to a specific transaction or financing proposal.

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For pre-revenue or other early-stage companies that are heavily reliant on periodic equity financing, generally vote for resolutions to authorize the issuance of common shares up to 50 percent of currently issued common share capital. The burden of proof will be on the company to establish that it has a need for the higher limit.

Renewal of such mandates should be sought at each year's annual meeting.

Vote case-by-case on share issuances for a specific transaction or financing proposal.

**Share Repurchase Programs**

**General Recommendation:** For U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers that are traded solely on U.S. exchanges, vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms, or to grant the board authority to conduct open- market repurchases, in the absence of company-specific concerns regarding:

■ Greenmail;

■ The use of buybacks to inappropriately manipulate incentive
compensation metrics;

■ Threats to the company's long-term viability; or

■ Other company-specific factors as warranted.

Vote case-by-case on proposals to repurchase shares directly from specified shareholders, balancing the stated rationale against the possibility for the repurchase authority to be misused, such as to repurchase shares from insiders at a premium to market price.

**Share Repurchase Programs Shareholder Proposals**

**General Recommendation:** Generally vote against shareholder proposals prohibiting executives from selling shares of company stock during periods in which the company has announced that it may or will be repurchasing shares of its stock. Vote for the proposal when there is a pattern of abuse by executives exercising options or selling shares during periods of share buybacks.

**Stock Distributions: Splits and Dividends**

**General Recommendation:** Generally vote for management proposals to increase the common share authorization for stock split or stock dividend, provided that the effective increase in authorized shares is equal to or is less than the allowable increase calculated in accordance with ISS' Common Stock Authorization policy.

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**Tracking Stock**

**General Recommendation:** Vote case-by-case on the creation of tracking stock, weighing the strategic value of the transaction against such factors as:

■ Adverse governance changes;

■ Excessive increases in authorized capital stock;

■ Unfair method of distribution;

■ Diminution of voting rights;

■ Adverse conversion features;

■ Negative impact on stock option plans; and

■ Alternatives such as spin-off.

Restructuring

**Appraisal Rights**

**General Recommendation:** Vote for proposals to restore or provide shareholders with rights of appraisal.

**Asset Purchases**

**General Recommendation:** Vote case-by-case on asset purchase proposals, considering the following factors:

■ Purchase price;

■ Fairness opinion;

■ Financial and strategic benefits;

■ How the deal was negotiated;

■ Conflicts of interest;

■ Other alternatives for the business; and

■ Non-completion risk.

**Asset Sales**

**General Recommendation:** Vote case-by-case on asset sales, considering the following factors:

■ Impact on the balance sheet/working capital;

■ Potential elimination of diseconomies;

■ Anticipated financial and operating benefits;

■ Anticipated use of funds;

■ Value received for the asset;

■ Fairness opinion;

■ How the deal was negotiated; and

■ Conflicts of interest.

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**Bundled Proposals**

**General Recommendation:** Vote case-by-case on bundled or "conditional" proxy proposals. In the case of items that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when the joint effect of the conditioned items is not in shareholders' best interests, vote against the proposals. If the combined effect is positive, support such proposals.

**Conversion of Securities**

**General Recommendation:** Vote case-by-case on proposals regarding conversion of securities. When evaluating these proposals, the investor should review the dilution to existing shareholders, the conversion price relative to market value, financial issues, control issues, termination penalties, and conflicts of interest.

Vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.

**Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans**

**General Recommendation:** Vote case-by-case on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan, after evaluating:

&nbsp;&nbsp;&nbsp;&nbsp;■ Dilution to existing shareholders' positions;

&nbsp;&nbsp;&nbsp;&nbsp;■ Terms of the offer - discount/premium in purchase price to
 investor, including any fairness opinion; termination penalties; exit strategy;

&nbsp;&nbsp;&nbsp;&nbsp;■ Financial issues - company's financial situation; degree of
 need for capital; use of proceeds; effect of the financing on the company's cost of
 capital;

&nbsp;&nbsp;&nbsp;&nbsp;■ Management's efforts to pursue other alternatives;

&nbsp;&nbsp;&nbsp;&nbsp;■ Control issues - change in management; change in control, guaranteed
 board and committee seats; standstill provisions; voting agreements; veto power over certain
 corporate actions; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Conflict of interest - arm's length transaction, managerial
 incentives.

Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.

**Formation of Holding Company**

**General Recommendation:** Vote case-by-case on proposals regarding the formation of a holding company, taking into consideration the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ The reasons for the change;

&nbsp;&nbsp;&nbsp;&nbsp;■ Any financial or tax benefits;

&nbsp;&nbsp;&nbsp;&nbsp;■ Regulatory benefits;

&nbsp;&nbsp;&nbsp;&nbsp;■ Increases in capital structure; and

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&nbsp;&nbsp;&nbsp;&nbsp;■ Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend for the transaction, vote against the formation of a holding company if the transaction would include either of the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Increases in common or preferred stock in excess of the allowable
 maximum (see discussion under "Capital"); or

&nbsp;&nbsp;&nbsp;&nbsp;■ Adverse changes in shareholder rights.

**Going Private and Going Dark Transactions (LBOs and Minority Squeeze- outs)**

**General Recommendation:** Vote case-by-case on going private transactions, taking into account the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Offer price/premium;

&nbsp;&nbsp;&nbsp;&nbsp;■ Fairness opinion;

&nbsp;&nbsp;&nbsp;&nbsp;■ How the deal was negotiated;

&nbsp;&nbsp;&nbsp;&nbsp;■ Conflicts of interest;

&nbsp;&nbsp;&nbsp;&nbsp;■ Other alternatives/offers considered; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Non-completion risk.

Vote case-by-case on going dark transactions, determining whether the transaction enhances shareholder value by taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has attained benefits from being publicly-traded
 (examination of trading volume, liquidity, and market research of the stock); and

&nbsp;&nbsp;&nbsp;&nbsp;■ Balanced interests of continuing vs. cashed-out shareholders, taking
 into account the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Are all shareholders able to participate in the transaction?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Will there be a liquid market for remaining shareholders following
 the transaction?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Does the company have strong corporate governance?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Will insiders reap the gains of control following the proposed
 transaction? and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Does the state of incorporation have laws requiring continued
 reporting that may benefit shareholders?

**Joint Ventures**

**General Recommendation:** Vote case-by-case on proposals to form joint ventures, taking into account the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Percentage of assets/business contributed;

&nbsp;&nbsp;&nbsp;&nbsp;■ Percentage ownership;

&nbsp;&nbsp;&nbsp;&nbsp;■ Financial and strategic benefits;

&nbsp;&nbsp;&nbsp;&nbsp;■ Governance structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ Conflicts of interest;

&nbsp;&nbsp;&nbsp;&nbsp;■ Other alternatives; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Non-completion risk.

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**Liquidations**

**General Recommendation:** Vote case-by-case on liquidations, taking into account the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Management's efforts to pursue other alternatives;

&nbsp;&nbsp;&nbsp;&nbsp;■ Appraisal value of assets; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The compensation plan for executives managing the liquidation.

Vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.

**Mergers and Acquisitions**

**General Recommendation:** Vote case-by-case on mergers and acquisitions. Review and evaluate the merits and drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

&nbsp;&nbsp;&nbsp;&nbsp;■ *Valuation* - Is the value to be received by the target shareholders
 (or paid by the acquirer) reasonable? While the fairness opinion may provide an initial starting
 point for assessing valuation reasonableness, emphasis is placed on the offer premium, market
 reaction, and strategic rationale.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Market reaction* - How has the market responded to the proposed
 deal? A negative market reaction should cause closer scrutiny of a deal.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Strategic rationale* - Does the deal make sense strategically?
 From where is the value derived? Cost and revenue synergies should not be overly aggressive
 or optimistic, but reasonably achievable. Management should also have a favorable track record
 of successful integration of historical acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Negotiations and process* - Were the terms of the transaction
 negotiated at arm's-length? Was the process fair and equitable? A fair process helps
 to ensure the best price for shareholders. Significant negotiation "wins" can
 also signify the deal makers' competency. The comprehensiveness of the sales process
 (e.g., full auction, partial auction, no auction) can also affect shareholder value.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Conflicts of interest* - Are insiders benefiting from the
 transaction disproportionately and inappropriately as compared to non-insider shareholders?
 As the result of potential conflicts, the directors and officers of the company may be more
 likely to vote to approve a merger than if they did not hold these interests. Consider whether
 these interests may have influenced these directors and officers to support or recommend
 the merger. The CIC figure presented in the "ISS Transaction Summary" section
 of this report is an aggregate figure that can in certain cases be a misleading indicator
 of the true value transfer from shareholders to insiders. Where such figure appears to be
 excessive, analyze the underlying assumptions to determine whether a potential conflict exists.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Governance* - Will the combined company have a better or worse
 governance profile than the current governance profiles of the respective parties to the
 transaction? If the governance profile is to change for the worse, the burden is on the company
 to prove that other issues (such as valuation) outweigh any deterioration in governance.

**Private Placements/Warrants/Convertible Debentures**

**General Recommendation:** Vote case-by-case on proposals regarding private placements, warrants, and convertible debentures taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;■ Dilution to existing shareholders'
 position: The amount and timing of shareholder ownership dilution should be weighed against
 the needs and proposed shareholder benefits of the capital infusion. Although newly issued
 common stock, absent preemptive rights, is typically dilutive to existing shareholders, share
 price appreciation is often the necessary event to trigger the exercise of "out
 of the money" warrants and convertible debt. In these instances from a value standpoint,
 the negative impact of dilution is mitigated by the increase in the company's stock
 price that must occur to trigger the dilutive event.

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&nbsp;&nbsp;&nbsp;&nbsp;■ Terms of the offer (discount/premium in purchase price to investor,
 including any fairness opinion, conversion features, termination penalties, exit strategy):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The terms of the offer should be weighed against the alternatives
 of the company and in light of company's financial condition. Ideally, the conversion
 price for convertible debt and the exercise price for warrants should be at a premium to
 the then prevailing stock price at the time of private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ When evaluating the magnitude of a private placement discount
 or premium, consider factors that influence the discount or premium, such as, liquidity,
 due diligence costs, control and monitoring costs, capital scarcity, information asymmetry,
 and anticipation of future performance.

&nbsp;&nbsp;&nbsp;&nbsp;■ Financial issues:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The company's financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Degree of need for capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Use of proceeds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Effect of the financing on the company's cost of capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Current and proposed cash burn rate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Going concern viability and the state of the capital and credit
 markets.

&nbsp;&nbsp;&nbsp;&nbsp;■ Management's efforts to pursue alternatives and whether the
 company engaged in a process to evaluate alternatives: A fair, unconstrained process helps
 to ensure the best price for shareholders. Financing alternatives can include joint ventures,
 partnership, merger, or sale of part or all of the company.

&nbsp;&nbsp;&nbsp;&nbsp;■ Control issues:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Change in management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Change in control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Guaranteed board and committee seats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Standstill provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Voting agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Veto power over certain corporate actions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Minority versus majority ownership and corresponding minority
 discount or majority control premium.

&nbsp;&nbsp;&nbsp;&nbsp;■ Conflicts of interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Conflicts of interest should be viewed from the perspective of
 the company and the investor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Were the terms of the transaction negotiated at arm's length?
 Are managerial incentives aligned with shareholder interests?

&nbsp;&nbsp;&nbsp;&nbsp;■ Market reaction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The market's response to the proposed deal. A negative
 market reaction is a cause for concern. Market reaction may be addressed by analyzing the
 one-day impact on the unaffected stock price.

Vote for the private placement, or for the issuance of warrants and/or convertible debentures in a private placement, if it is expected that the company will file for bankruptcy if the transaction is not approved.

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**Reorganization/Restructuring Plan (Bankruptcy)**

**General Recommendation:** Vote case-by-case on proposals to common shareholders on bankruptcy plans of reorganization, considering the following factors including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;■ Estimated value and financial prospects of the reorganized company;

&nbsp;&nbsp;&nbsp;&nbsp;■ Percentage ownership of current shareholders in the reorganized
 company;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether shareholders are adequately represented in the reorganization
 process (particularly through the existence of an Official Equity Committee);

&nbsp;&nbsp;&nbsp;&nbsp;■ The cause(s) of the bankruptcy filing, and the extent to which the
 plan of reorganization addresses the cause(s);

&nbsp;&nbsp;&nbsp;&nbsp;■ Existence of a superior alternative to the plan of reorganization;
 and

&nbsp;&nbsp;&nbsp;&nbsp;■ Governance of the reorganized company.

**Special Purpose Acquisition Corporations (SPACs)**

**General Recommendation:** Vote case-by-case on SPAC mergers and acquisitions taking into account the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ *Valuation* - Is the value being paid by the SPAC reasonable?
 SPACs generally lack an independent fairness opinion and the financials on the target may
 be limited. Compare the conversion price with the intrinsic value of the target company provided
 in the fairness opinion. Also, evaluate the proportionate value of the combined entity attributable
 to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally, a private
 company discount may be applied to the target if it is a private entity.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Market reaction* - How has the market responded to the proposed
 deal? A negative market reaction may be a cause for concern. Market reaction may be addressed
 by analyzing the one-day impact on the unaffected stock price.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Deal timing* - A main driver for most transactions is that
 the SPAC charter typically requires the deal to be complete within 18 to 24 months, or the
 SPAC is to be liquidated. Evaluate the valuation, market reaction, and potential conflicts
 of interest for deals that are announced close to the liquidation date.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Negotiations and process* - What was the process undertaken
 to identify potential target companies within specified industry or location specified in
 charter? Consider the background of the sponsors.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Conflicts of interest* - How are sponsors benefiting from
 the transaction compared to IPO shareholders? Potential conflicts could arise if a fairness
 opinion is issued by the insiders to qualify the deal rather than a third party or if management
 is encouraged to pay a higher price for the target because of an 80 percent rule (the charter
 requires that the fair market value of the target is at least equal to 80 percent of net
 assets of the SPAC). Also, there may be sense of urgency by the management team of the SPAC
 to close the deal since its charter typically requires a transaction to be completed within
 the 18-24-month timeframe.

&nbsp;&nbsp;&nbsp;&nbsp;■ *Voting agreements* - Are the sponsors entering into enter
 into any voting agreements/tender offers with shareholders who are likely to vote against
 the proposed merger or exercise conversion rights?

&nbsp;&nbsp;&nbsp;&nbsp;■ *Governance* - What is the impact of having the SPAC CEO or
 founder on key committees following the proposed merger?

**Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions**

The main purpose of SPACs is to identify and acquire a viable target within a specified timeframe, and failure to achieve this objective within the allotted time calls into question management's ability to execute its primary objective. The end of that timeframe is generally referred to as the termination date.

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**General Recommendation:** Generally support requests to extend the termination date by up to one year from the SPAC's original termination date (inclusive of any built-in extension options, and accounting for prior extension requests).

Other factors that may be considered include: any added incentives, business combination status, other amendment terms, and, if applicable, use of money in the trust fund to pay excise taxes on redeemed shares.

**Spin-offs**

**General Recommendation:** Vote case-by-case on spin-offs, considering:

■ Tax and regulatory advantages;

■ Planned use of the sale proceeds;

■ Valuation of spinoff;

■ Fairness opinion;

■ Benefits to the parent company;

■ Conflicts of interest;

■ Managerial incentives;

■ Corporate governance changes; and

■ Changes in the capital structure.

**Value Maximization Shareholder Proposals**

**General Recommendation:** Vote case-by-case on shareholder proposals seeking to maximize shareholder value by:

■ Hiring a financial advisor to explore strategic alternatives;

■ Selling the company; or

■ Liquidating the company and distributing the proceeds to
shareholders.

These proposals should be evaluated based on the following factors:

■ Prolonged poor performance with no turnaround in sight;

■ Signs of entrenched board and management (such as the adoption
of takeover defenses);

■ Strategic plan in place for improving value;

■ Likelihood of receiving reasonable value in a sale or dissolution;
and

■ The company actively exploring its strategic options, including
retaining a financial advisor.

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&nbsp;&nbsp;&nbsp;&nbsp;5. Compensation

Executive Pay Evaluation

Underlying all evaluations are five global principles that most investors expect corporations to adhere to in designing and administering executive and director compensation programs:

&nbsp;&nbsp;&nbsp;&nbsp;1. Maintain appropriate pay-for-performance
 alignment, with emphasis on long-term shareholder value: This principle encompasses overall
 executive pay practices, which must be designed to attract, retain, and appropriately motivate
 the key employees who drive shareholder value creation over the long term. It will take into
 consideration, among other factors, the link between pay and performance; the mix between
 fixed and variable pay; performance goals; and equity-based plan costs;

&nbsp;&nbsp;&nbsp;&nbsp;2. Avoid arrangements that
 risk "pay for failure": This principle addresses the appropriateness of long
 or indefinite contracts, excessive severance packages, and guaranteed compensation;

&nbsp;&nbsp;&nbsp;&nbsp;3. Maintain an independent and
 effective compensation committee: This principle promotes oversight of executive pay programs
 by directors with appropriate skills, knowledge, experience, and a sound process for compensation
 decision-making (*e.g.*, including access to independent expertise and advice when needed);

&nbsp;&nbsp;&nbsp;&nbsp;4. Provide shareholders with
 clear, comprehensive compensation disclosures: This principle underscores the importance
 of informative and timely disclosures that enable shareholders to evaluate executive pay
 practices fully and fairly; and

&nbsp;&nbsp;&nbsp;&nbsp;5. Avoid inappropriate pay to
 non-executive directors: This principle recognizes the interests of shareholders in ensuring
 that compensation to outside directors is reasonable and does not compromise their independence
 and ability to make appropriate judgments in overseeing managers' pay and performance.
 At the market level, it may incorporate a variety of generally accepted best practices.

**Advisory Votes on Executive Compensation—Management Proposals (Say- on-Pay)**

**General Recommendation:** Vote case-by-case on ballot items related to executive pay and practices, as well as certain aspects of outside director compensation.

Vote against Advisory Votes on Executive Compensation (Say-on-Pay or "SOP") if:

&nbsp;&nbsp;&nbsp;&nbsp;■ There is an unmitigated misalignment between CEO pay and company
 performance (<u>pay for performance</u>);

&nbsp;&nbsp;&nbsp;&nbsp;■ The company maintains significant <u>problematic pay practices</u>;
 or

&nbsp;&nbsp;&nbsp;&nbsp;■ The board exhibits a significant level of <u>poor communication and responsiveness</u> to shareholders.

Vote against or withhold from the members of the Compensation Committee and potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;■ There is no SOP on the ballot, and an against vote on an SOP would
 otherwise be warranted due to pay-for- performance misalignment, problematic pay practices,
 or the lack of adequate responsiveness on compensation issues raised previously, or a combination
 thereof;

&nbsp;&nbsp;&nbsp;&nbsp;■ The board fails to respond adequately to a previous SOP proposal
 that received less than 70 percent support of votes cast;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company has recently practiced or approved problematic pay practices,
 such as option repricing or option backdating; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The situation is egregious.

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Primary Evaluation Factors for Executive Pay

**Pay-for-Performance Evaluation**

ISS annually conducts a pay-for-performance analysis to identify strong or satisfactory alignment between pay and performance over a sustained period. With respect to companies in the S&P1500, Russell 3000, or Russell 3000E Indices**<sup>17</sup>**, this analysis considers the following:

&nbsp;&nbsp;&nbsp;&nbsp;1. Peer Group **<sup>18</sup>** Alignment:

&nbsp;&nbsp;&nbsp;&nbsp;■ The degree of alignment between the company's annualized TSR
 rank and the CEO's annualized total pay rank within a peer group, each measured over
 a three-year period.

&nbsp;&nbsp;&nbsp;&nbsp;■ The rankings of CEO total pay and company financial performance
 within a peer group, each measured over a three-year period.

&nbsp;&nbsp;&nbsp;&nbsp;■ The multiple of the CEO's total pay relative to the peer group
 median in the most recent fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;2. Absolute Alignment **<sup>19</sup>** – the absolute alignment between the trend in CEO pay and company TSR over the prior
 five fiscal years – i.e., the difference between the trend in annual pay changes and
 the trend in annualized TSR during the period.

If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the case of companies outside the Russell indices, a misalignment between pay and performance is otherwise suggested, our analysis may include any of the following qualitative factors, as relevant to an evaluation of how various pay elements may work to encourage or to undermine long-term value creation and alignment with shareholder interests:

&nbsp;&nbsp;&nbsp;&nbsp;■ The ratio of performance- to time-based incentive awards;

&nbsp;&nbsp;&nbsp;&nbsp;■ The overall ratio of performance-based compensation to fixed or
 discretionary pay;

&nbsp;&nbsp;&nbsp;&nbsp;■ The rigor of performance goals;

&nbsp;&nbsp;&nbsp;&nbsp;■ The complexity and risks around pay program design;

&nbsp;&nbsp;&nbsp;&nbsp;■ The transparency and clarity of disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's peer group benchmarking practices;

&nbsp;&nbsp;&nbsp;&nbsp;■ Financial/operational results, both absolute and relative to peers;

&nbsp;&nbsp;&nbsp;&nbsp;■ Special circumstances related to, for example, a new CEO in the
 prior FY or anomalous equity grant practices (e.g., bi-annual awards);

&nbsp;&nbsp;&nbsp;&nbsp;■ Realizable pay **<sup>20</sup>** compared to grant pay; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other factors deemed relevant.

**<sup>17</sup>** The <u>Russell 3000E</u> Index includes approximately 4,000 of the largest U.S. equity securities.

**<sup>18</sup>** The revised peer group is generally comprised of 14-24 companies that are selected using market cap, revenue (or assets for certain financial firms), GICS industry group, and company's selected peers' GICS industry group, with size constraints, via a process designed to select peers that are comparable to the subject company in terms of revenue/assets and industry, and also within a market-cap bucket that is reflective of the company's market cap. For Oil, Gas & Consumable Fuels companies, market cap is the only size determinant.

**<sup>19</sup>** Only Russell 3000 Index companies are subject to the Absolute Alignment analysis.

**<sup>20</sup>** ISS research reports include realizable pay for S&P1500 companies.

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**Problematic Pay Practices**

Problematic pay elements are generally evaluated case-by-case considering the context of a company's overall pay program and demonstrated pay-for-performance philosophy. The focus is on executive compensation practices that contravene the global pay principles, including:

&nbsp;&nbsp;&nbsp;&nbsp;■ Problematic practices related to non-performance-based compensation
 elements;

&nbsp;&nbsp;&nbsp;&nbsp;■ Incentives that may motivate excessive risk-taking or present a
 windfall risk; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Pay decisions that circumvent pay-for-performance, such as options
 backdating or waiving performance requirements.

The list of examples below highlights certain problematic practices that carry significant weight in this overall consideration and may result in adverse vote recommendations:

&nbsp;&nbsp;&nbsp;&nbsp;■ Repricing or replacing of underwater stock options/SARs without
 prior shareholder approval (including cash buyouts and voluntary surrender of underwater
 options);

&nbsp;&nbsp;&nbsp;&nbsp;■ Extraordinary perquisites or tax gross-ups;

&nbsp;&nbsp;&nbsp;&nbsp;■ New or materially amended agreements that provide for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Excessive termination or CIC severance payments (generally exceeding
 3 times base salary and average/target/most recent bonus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ CIC severance payments without involuntary job loss or substantial
 diminution of duties ("single" or "modified single" triggers) or
 in connection with a problematic Good Reason definition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ CIC excise tax gross-up entitlements (including "modified"
 gross-ups); and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Multi-year guaranteed awards that are not at risk due to rigorous
 performance conditions;

&nbsp;&nbsp;&nbsp;&nbsp;■ Liberal CIC definition combined with any single-trigger CIC benefits;

&nbsp;&nbsp;&nbsp;&nbsp;■ Insufficient executive compensation disclosure by externally-managed
 issuers (EMIs) such that a reasonable assessment of pay programs and practices applicable
 to the EMI's executives is not possible;

&nbsp;&nbsp;&nbsp;&nbsp;■ Severance payments made when the termination is not clearly disclosed
 as involuntary (for example, a termination without cause or resignation for good reason);
 and/or

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other provision or practice deemed to be egregious and present
 a significant risk to investors.

The above examples are not an exhaustive list. Please refer to ISS' <u>U.S. Compensation Policies FAQ</u> document for additional detail on specific pay practices that have been identified as problematic and may lead to negative vote recommendations.

**Options Backdating**

The following factors should be examined case-by-case to allow for distinctions to be made between "sloppy" plan administration versus deliberate action or fraud:

&nbsp;&nbsp;&nbsp;&nbsp;■ Reason and motive for the options backdating issue, such as inadvertent
 vs. deliberate grant date changes;

&nbsp;&nbsp;&nbsp;&nbsp;■ Duration of options backdating;

&nbsp;&nbsp;&nbsp;&nbsp;■ Size of restatement due to options backdating;

&nbsp;&nbsp;&nbsp;&nbsp;■ Corrective actions taken by the board or compensation committee,
 such as canceling or re-pricing backdated options, the recouping of option gains on backdated
 grants; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Adoption of a grant policy that prohibits backdating and creates
 a fixed grant schedule or window period for equity grants in the future.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Compensation Committee Communications and Responsiveness**

Consider the following factors case-by-case when evaluating ballot items related to executive pay on the board's responsiveness to investor input and engagement on compensation issues:

&nbsp;&nbsp;&nbsp;&nbsp;■ Failure to respond to majority-supported shareholder proposals on
 executive pay topics; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Failure to adequately respond to the company's previous say-on-pay
 proposal that received the support of less than 70 percent of votes cast, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of engagement efforts with major institutional investors,
 including the frequency and timing of engagements and the company participants (including
 whether independent directors participated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of the specific concerns voiced by dissenting shareholders
 that led to the say-on-pay opposition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Disclosure of specific and meaningful actions taken to address
 shareholders' concerns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Other recent compensation actions taken by the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the issues raised are recurring or isolated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the support level was less than 50 percent, which would
 warrant the highest degree of responsiveness.

**Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")**

**General Recommendation:** Vote for annual advisory votes on compensation, which provide the most consistent and clear communication channel for shareholder concerns about companies' executive pay programs.

**Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale**

**General Recommendation:** Vote case-by-case on say on Golden Parachute proposals, including consideration of existing change-in-control arrangements maintained with named executive officers but also considering new or extended arrangements.

Features that may result in an "against" recommendation include one or more of the following, depending on the number, magnitude, and/or timing of issue(s):

&nbsp;&nbsp;&nbsp;&nbsp;■ Single- or modified-single-trigger cash severance;

&nbsp;&nbsp;&nbsp;&nbsp;■ Single-trigger acceleration of unvested equity awards;

&nbsp;&nbsp;&nbsp;&nbsp;■ Full acceleration of equity awards granted shortly before the change
 in control;

&nbsp;&nbsp;&nbsp;&nbsp;■ Acceleration of performance awards above the target level of performance
 without compelling rationale;

&nbsp;&nbsp;&nbsp;&nbsp;■ Excessive cash severance (generally >3x base salary and bonus);

&nbsp;&nbsp;&nbsp;&nbsp;■ Excise tax gross-ups triggered and payable;

&nbsp;&nbsp;&nbsp;&nbsp;■ Excessive golden parachute payments (on an absolute basis or as
 a percentage of transaction equity value); or

&nbsp;&nbsp;&nbsp;&nbsp;■ Recent amendments that incorporate any
 problematic features (such as those above) or recent actions (such as extraordinary equity
 grants) that may make packages so attractive as to influence merger agreements that may not
 be in the best interests of shareholders; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's assertion that a
 proposed transaction is conditioned on shareholder approval of the golden parachute advisory
 vote.

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Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis. However, the presence of multiple legacy problematic features will also be closely scrutinized.

In cases where the golden parachute vote is incorporated into a company's advisory vote on compensation (management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which may give higher weight to that component of the overall evaluation.

Equity-Based and Other Incentive Plans

Please refer to ISS' <u>U.S. Equity Compensation Plans FAQ</u> document for additional details on the Equity Plan Scorecard policy.

**General Recommendation:** Vote case-by-case on certain equity-based compensation plans**<sup>21</sup>** depending on a combination of certain plan features and equity grant practices, where positive factors may counterbalance negative factors, and vice versa, as evaluated using an "Equity Plan Scorecard" (EPSC) approach with three pillars:

&nbsp;&nbsp;&nbsp;&nbsp;■ **Plan Cost:** The total estimated cost of the company's
 equity plans relative to industry/market cap peers, measured by the company's estimated
 Shareholder Value Transfer (SVT) in relation to peers and considering both:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ SVT based on new shares requested plus shares remaining for future
 grants, plus outstanding unvested/unexercised grants; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ SVT based only on new shares requested plus shares remaining
 for future grants.

&nbsp;&nbsp;&nbsp;&nbsp;■ Plan Features:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Quality of disclosure around vesting upon a change in control
 (CIC);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Discretionary vesting authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Liberal share recycling on various award types;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Lack of minimum vesting period for grants made under the plan;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Dividends payable prior to award vesting.

&nbsp;&nbsp;&nbsp;&nbsp;■ Grant Practices:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The company's three-year burn rate relative to its industry/market
 cap peers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Vesting requirements in CEO's recent equity grants (3-year
 look-back);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The estimated duration of the plan (based on the sum of shares
 remaining available and the new shares requested, divided by the average annual shares granted
 in the prior three years);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The proportion of the CEO's most recent equity grants/awards
 subject to performance conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company maintains a sufficient claw-back policy;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company maintains sufficient post-exercise/vesting
 share-holding requirements.

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall, in shareholders' interests, or if any of the following egregious factors ("overriding factors") apply:

&nbsp;&nbsp;&nbsp;&nbsp;■ Awards may vest in connection with a liberal change-of-control definition;

&nbsp;&nbsp;&nbsp;&nbsp;■ The plan would permit repricing or cash buyout of underwater options
 without shareholder approval (either by expressly permitting it – for NYSE and Nasdaq
 listed companies – or by not prohibiting it when the company has a history of repricing
 – for non-listed companies);

**<sup>21</sup>** Proposals evaluated under the EPSC policy generally include those to approve or amend (1) stock option plans for employees and/or employees and directors, (2) restricted stock plans for employees and/or employees and directors, and (3) omnibus stock incentive plans for employees and/or employees and directors; amended plans will be further evaluated case-by-case.

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&nbsp;&nbsp;&nbsp;&nbsp;■ The plan is a vehicle for problematic pay practices or a significant
 pay-for-performance disconnect under certain circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;■ The plan is excessively dilutive to shareholders' holdings;

&nbsp;&nbsp;&nbsp;&nbsp;■ The plan contains an evergreen (automatic share replenishment) feature;
 or

&nbsp;&nbsp;&nbsp;&nbsp;■ Any other plan features are determined to have a significant negative
 impact on shareholder interests.

**Further Information on certain EPSC Factors:**

**Shareholder Value Transfer (SVT)**

The cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which is measured using a binomial option pricing model that assesses the amount of shareholders' equity flowing out of the company to employees and directors. SVT is expressed as both a dollar amount and as a percentage of market value, and includes the new shares proposed, shares available under existing plans, and shares granted but unexercised (using two measures, in the case of plans subject to the Equity Plan Scorecard evaluation, as noted above). All award types are valued.

For omnibus plans, unless limitations are placed on the most expensive types of awards (for example, full-value awards), the assumption is made that all awards to be granted will be the most expensive types.

For proposals that are not subject to the Equity Plan Scorecard evaluation, Shareholder Value Transfer is reasonable if it falls below a company-specific benchmark. The benchmark is determined as follows: The top quartile performers in each industry group (using the Global Industry Classification Standard: GICS) are identified. Benchmark SVT levels for each industry are established based on these top performers' historic SVT. Regression analyses are run on each industry group to identify the variables most strongly correlated to SVT. The benchmark industry SVT level is then adjusted upwards or downwards for the specific company by plugging the company- specific performance measures, size, and cash compensation into the industry cap equations to arrive at the company's benchmark.**<sup>22</sup>**

**Three-Year Value-Adjusted Burn Rate**

A "Value-Adjusted Burn Rate" is used for stock plan evaluations. Value-Adjusted Burn Rate benchmarks are calculated as the greater of: (1) an industry-specific threshold based on three-year burn rates within the company's GICS group segmented by S&P 500, Russell 3000 index (less the S&P 500) and non-Russell 3000 index; and (2) a *de minimis* threshold established separately for each of the S&P 500, the Russell 3000 index less the S&P 500, and the non-Russell 3000 index. Year-over-year burn-rate benchmark changes will be limited to a predetermined range above or below the prior year's burn-rate benchmark.

The Value-Adjusted Burn Rate is calculated as follows:

Value-Adjusted Burn Rate = ((# of options \* option's dollar value using a Black-Scholes model) + (# of full-value awards \* stock price)) / (Weighted average common shares \* stock price).

**<sup>22</sup>** For plans evaluated under the Equity Plan Scorecard policy, the company's SVT benchmark is considered along with other factors.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Egregious Factors**

**Liberal Change in Control Definition**

Generally vote against equity plans if the plan has a liberal definition of change in control and the equity awards could vest upon such liberal definition of change in control, even though an actual change in control may not occur. Examples of such a definition include, but are not limited to, announcement or commencement of a tender offer, provisions for acceleration upon a "potential" takeover, shareholder approval of a merger or other transactions, or similar language.

**Repricing Provisions**

Vote against plans that expressly permit the repricing or exchange of underwater stock options/stock appreciate rights (SARs) without prior shareholder approval. "Repricing" typically includes the ability to do any of the following:

■ Amend the terms of outstanding options or SARs to reduce
the exercise price of such outstanding options or SARs;

■ Cancel outstanding options or SARs in exchange for options
or SARs with an exercise price that is less than the exercise price of the original options or SARs;

■ Cancel underwater options in exchange for stock awards; or

■ Provide cash buyouts of underwater options.

While the above cover most types of repricing, ISS may view other provisions as akin to repricing depending on the facts and circumstances.

Also, vote against or withhold from members of the Compensation Committee who approved repricing (as defined above or otherwise determined by ISS), without prior shareholder approval, even if such repricings are allowed in their equity plan.

Vote against plans that do not expressly prohibit repricing or cash buyout of underwater options without shareholder approval if the company has a history of repricing/buyouts without shareholder approval, and the applicable listing standards would not preclude them from doing so.

**Problematic Pay Practices or Significant Pay-for-Performance Disconnect**

If the equity plan on the ballot is a vehicle for <u>problematic pay practices</u>, vote against the plan.

ISS may recommend a vote against the equity plan if the plan is determined to be a vehicle for pay-for- performance misalignment. Considerations in voting against the equity plan may include, but are not limited to:

■ Severity of the pay-for-performance misalignment;

■ Whether problematic equity grant practices are driving the
misalignment; and/or

■ Whether equity plan awards have been heavily concentrated
to the CEO and/or the other NEOs.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m))**

**General Recommendation:** Vote case-by-case on amendments to cash and equity incentive plans.

Generally vote for proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

&nbsp;&nbsp;&nbsp;&nbsp;■ Addresses administrative features only; or

&nbsp;&nbsp;&nbsp;&nbsp;■ Seeks approval for Section 162(m) purposes <u>only</u>, and the
 plan administering committee consists entirely of independent directors, per ISS' Classification
 of Directors. Note that if the company is presenting the plan to shareholders for the first
 time for any reason (including after the company's initial public offering), or if
 the proposal is bundled with other material plan amendments, then the recommendation will
 be case-by-case (see below).

Vote against proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

&nbsp;&nbsp;&nbsp;&nbsp;■ Seeks approval for Section 162(m) purposes only, and the plan administering
 committee does not consist entirely of independent directors, per <u>ISS' Classification of Directors</u>.

Vote case-by-case on all other proposals to amend <u>cash</u> incentive plans. This includes plans presented to shareholders for the first time after the company's IPO and/or proposals that bundle material amendment(s) other than those for Section 162(m) purposes.

Vote case-by-case on all other proposals to amend <u>equity</u> incentive plans, considering the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ If the proposal requests additional
 shares and/or the amendments include a term extension or addition of full value awards as
 an award type, the recommendation will be based on the Equity Plan Scorecard evaluation as
 well as an analysis of the overall impact of the amendments;

&nbsp;&nbsp;&nbsp;&nbsp;■ If the plan is being presented to shareholders for the first time
 (including after the company's IPO), whether or not additional shares are being requested,
 the recommendation will be based on the Equity Plan Scorecard evaluation as well as an analysis
 of the overall impact of any amendments; and

&nbsp;&nbsp;&nbsp;&nbsp;■ If there is no request for additional shares and the amendments
 do not include a term extension or addition of full value awards as an award type, then the
 recommendation will be based entirely on an analysis of the overall impact of the amendments,
 and the EPSC evaluation will be shown only for informational purposes.

In the first two case-by-case evaluation scenarios, the EPSC evaluation/score is the more heavily weighted consideration.

**Specific Treatment of Certain Award Types in Equity Plan Evaluations**

**Dividend Equivalent Rights**

Options that have Dividend Equivalent Rights (DERs) associated with them will have a higher calculated award value than those without DERs under the binomial model, based on the value of these dividend streams. The higher value will be applied to new shares, shares available under existing plans, and shares awarded but not exercised per the plan specifications. DERS transfer more shareholder equity to employees and non-employee directors and this cost should be captured.

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**UNITED STATES**<br> Proxy Voting Guidelines<br>

**Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)**

For Real Estate Investment Trusts (REITS), include the common shares issuable upon conversion of outstanding Operating Partnership (OP) units in the share count for the purposes of determining: (1) market capitalization in the Shareholder Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate analysis.

Other Compensation Plans

**401(k) Employee Benefit Plans**

**General Recommendation:** Vote for proposals to implement a 401(k) savings plan for employees.

**Employee Stock Ownership Plans (ESOPs)**

**General Recommendation:** Vote for proposals to implement an ESOP or increase authorized shares for existing ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding shares).

**Employee Stock Purchase Plans—Qualified Plans**

**General Recommendation:** Vote case-by-case on qualified employee stock purchase plans. Vote for employee stock purchase plans where all of the following apply:

■ Purchase price is at least 85 percent of fair market value;

■ Offering period is 27 months or less; and

■ The number of shares allocated to the plan is 10 percent
or less of the outstanding shares.

Vote against qualified employee stock purchase plans where when the plan features do not meet all of the above criteria.

**Employee Stock Purchase Plans—Non-Qualified Plans**

**General Recommendation:** Vote case-by-case on nonqualified employee stock purchase plans. Vote for nonqualified employee stock purchase plans with all the following features:

■ Broad-based participation;

■ Limits on employee contribution, which may be a fixed dollar
amount or expressed as a percent of base salary;

■ Company matching contribution up to 25 percent of employee's
contribution, which is effectively a discount of 20 percent from market value; and

■ No discount on the stock price on the date of purchase when
there is a company matching contribution.

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Vote against nonqualified employee stock purchase plans when the plan features do not meet all of the above criteria. If the matching contribution or effective discount exceeds the above, ISS may evaluate the SVT cost of the plan as part of the assessment.

**Option Exchange Programs/Repricing Options**

**General Recommendation:** Vote case-by-case on management proposals seeking approval to exchange/reprice options taking into consideration:

■ Historic trading patterns--the stock price should not be
so volatile that the options are likely to be back "in- the-money" over the near term;

■ Rationale for the re-pricing--was the stock price decline
beyond management's control?;

■ Is this a value-for-value exchange?;

■ Are surrendered stock options added back to the plan reserve?;

■ Timing--repricing should occur at least one year out from
any precipitous drop in company's stock price;

■ Option vesting--does the new option vest immediately or is
there a black-out period?;

■ Term of the option--the term should remain the same as that
of the replaced option;

■ Exercise price--should be set at fair market or a premium
to market; and

■ Participants--executive officers and directors must be excluded.

If the surrendered options are added back to the equity plans for re-issuance, then also take into consideration the company's total cost of equity plans and its three-year average burn rate.

In addition to the above considerations, evaluate the intent, rationale, and timing of the repricing proposal. The proposal should clearly articulate why the board is choosing to conduct an exchange program at this point in time. Repricing underwater options after a recent precipitous drop in the company's stock price demonstrates poor timing and warrants additional scrutiny. Also, consider the terms of the surrendered options, such as the grant date, exercise price and vesting schedule. Grant dates of surrendered options should be far enough back (two to three years) so as not to suggest that repricings are being done to take advantage of short-term downward price movements. Similarly, the exercise price of surrendered options should be above the 52-week high for the stock price.

Vote for shareholder proposals to put option repricings to a shareholder vote.

**Stock Plans in Lieu of Cash**

**General Recommendation:** Vote case-by-case on plans that provide participants with the option of taking all or a portion of their cash compensation in the form of stock.

Vote for non-employee director-only equity plans that provide a dollar-for-dollar cash-for-stock exchange.

Vote case-by-case on plans which do not provide a dollar-for-dollar cash for stock exchange. In cases where the exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be considered using the binomial option pricing model. In an effort to capture the total cost of total compensation, ISS will not make any adjustments to carve out the in-lieu-of cash compensation.

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**Transfer Stock Option (TSO) Programs**

**General Recommendation:** One-time Transfers: Vote against or withhold from compensation committee members if they fail to submit one-time transfers to shareholders for approval.

Vote case-by-case on one-time transfers. Vote for if:

&nbsp;&nbsp;&nbsp;&nbsp;■ Executive officers and non-employee directors are excluded
from participating;

&nbsp;&nbsp;&nbsp;&nbsp;■ Stock options are purchased by third-party financial institutions
at a discount to their fair value using option pricing models such as Black-Scholes or a Binomial Option Valuation or other appropriate
financial models; and

&nbsp;&nbsp;&nbsp;&nbsp;■ There is a two-year minimum holding period for sale proceeds
(cash or stock) for all participants.

Additionally, management should provide a clear explanation of why options are being transferred to a third-party institution and whether the events leading up to a decline in stock price were beyond management's control. A review of the company's historic stock price volatility should indicate if the options are likely to be back "in-the- money" over the near term.

Ongoing TSO program: Vote against equity plan proposals if the details of ongoing TSO programs are not provided to shareholders. Since TSOs will be one of the award types under a stock plan, the ongoing TSO program, structure, and mechanics must be disclosed to shareholders. The specific criteria to be considered in evaluating these proposals include, but not limited, to the following:

&nbsp;&nbsp;&nbsp;&nbsp;■ Eligibility;

&nbsp;&nbsp;&nbsp;&nbsp;■ Vesting;

&nbsp;&nbsp;&nbsp;&nbsp;■ Bid-price;

&nbsp;&nbsp;&nbsp;&nbsp;■ Term of options;

&nbsp;&nbsp;&nbsp;&nbsp;■ Cost of the program and impact of the TSOs on company's
total option expense; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Option repricing policy.

Amendments to existing plans that allow for introduction of transferability of stock options should make clear that only options granted post-amendment shall be transferable.

Director Compensation

**Shareholder Ratification of Director Pay Programs**

**General Recommendation:** Vote case-by-case on management proposals seeking ratification of non-employee director compensation, based on the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ If the equity plan under which non-employee director grants are
 made is on the ballot, whether or not it warrants support; and

&nbsp;&nbsp;&nbsp;&nbsp;■ An assessment of the following qualitative factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The relative magnitude of director compensation as compared to
 companies of a similar profile;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of problematic pay practices relating to director
 compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Director stock ownership guidelines and holding requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Equity award vesting schedules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The mix of cash and equity-based compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ Meaningful limits on director compensation;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The availability of retirement benefits or perquisites; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;■ The quality of disclosure surrounding director compensation.

**Equity Plans for Non-Employee Directors**

**General Recommendation:** Vote case-by-case on compensation plans for non-employee directors, based on:

&nbsp;&nbsp;&nbsp;&nbsp;■ The total estimated cost of the company's equity plans relative
 to industry/market cap peers, measured by the company's estimated Shareholder Value
 Transfer (SVT) based on new shares requested plus shares remaining for future grants, plus
 outstanding unvested/unexercised grants;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's three-year burn rate relative to its industry/market
 cap peers (in certain circumstances); and

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of any egregious plan features (such as an option repricing
 provision or liberal CIC vesting risk).

On occasion, non-employee director stock plans will exceed the plan cost or burn-rate benchmarks when combined with employee or executive stock plans. In such cases, vote case-by-case on the plan taking into consideration the following qualitative factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The relative magnitude of director compensation as compared
to companies of a similar profile;

&nbsp;&nbsp;&nbsp;&nbsp;■ The presence of problematic pay practices relating to director
compensation;

&nbsp;&nbsp;&nbsp;&nbsp;■ Director stock ownership guidelines and holding requirements;

&nbsp;&nbsp;&nbsp;&nbsp;■ Equity award vesting schedules;

&nbsp;&nbsp;&nbsp;&nbsp;■ The mix of cash and equity-based compensation;

&nbsp;&nbsp;&nbsp;&nbsp;■ Meaningful limits on director compensation;

&nbsp;&nbsp;&nbsp;&nbsp;■ The availability of retirement benefits or perquisites; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The quality of disclosure surrounding director compensation.

**Non-Employee Director Retirement Plans**

**General Recommendation:** Vote against retirement plans for non-employee directors. Vote for shareholder proposals to eliminate retirement plans for non-employee directors.

Shareholder Proposals on Compensation

**Bonus Banking/Bonus Banking "Plus"**

**General Recommendation:** Vote case-by-case on proposals seeking deferral of a portion of annual bonus pay, with ultimate payout linked to sustained results for the performance metrics on which the bonus was earned (whether for the named executive officers or a wider group of employees), taking into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's past practices regarding equity and cash
compensation;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has a holding period or stock ownership
requirements in place, such as a meaningful retention ratio (at least 50 percent for full tenure); and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has a rigorous claw-back policy in place.

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**Compensation Consultants—Disclosure of Board or Company's Utilization**

**General Recommendation:** Generally vote for shareholder proposals seeking disclosure regarding the company, board, or compensation committee's use of compensation consultants, such as company name, business relationship(s), and fees paid.

**Disclosure/Setting Levels or Types of Compensation for Executives and Directors**

**General Recommendation:** Generally vote for shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders' needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company.

Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation (such as types of compensation elements or specific metrics) to be used for executive or directors.

Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in order to qualify as a director or to remain on the board.

Vote case-by-case on all other shareholder proposals regarding executive and director pay, taking into account relevant factors, including but not limited to: company performance, pay level and design versus peers, history of compensation concerns or pay-for-performance disconnect, and/or the scope and prescriptive nature of the proposal.

**Golden Coffins/Executive Death Benefits**

**General Recommendation:** Generally vote for proposals calling for companies to adopt a policy of obtaining shareholder approval for any future agreements and corporate policies that could oblige the company to make payments or awards following the death of a senior executive in the form of unearned salary or bonuses, accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or awards made in lieu of compensation. This would not apply to any benefit programs or equity plan proposals for which the broad-based employee population is eligible.

**Hold Equity Past Retirement or for a Significant Period of Time**

**General Recommendation:** Vote case-by-case on shareholder proposals asking companies to adopt policies requiring senior executive officers to retain a portion of net shares acquired through compensation plans. The following factors will be taken into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ The percentage/ratio of net shares required to be retained;

&nbsp;&nbsp;&nbsp;&nbsp;■ The time period required to retain the shares;

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■ Whether the company has equity retention, holding period,
and/or stock ownership requirements in place and the robustness of such requirements;

■ Whether the company has any other policies aimed at mitigating
risk taking by executives;

■ Executives' actual stock ownership and the degree to
which it meets or exceeds the proponent's suggested holding period/retention ratio or the company's existing requirements;
and

■ Problematic pay practices, current and past, which may demonstrate
a short-term versus long-term focus.

**Pay Disparity**

**General Recommendation:** Vote case-by-case on proposals calling for an analysis of the pay disparity between corporate executives and other non-executive employees. The following factors will be considered:

■ The company's current level of disclosure of its executive
compensation setting process, including how the company considers pay disparity;

■ If any problematic pay practices or pay-for-performance concerns
have been identified at the company; and

■ The level of shareholder support for the company's
pay programs.

Generally vote against proposals calling for the company to use the pay disparity analysis or pay ratio in a specific way to set or limit executive pay.

**Pay for Performance/Performance-Based Awards**

**General Recommendation:** Vote case-by-case on shareholder proposals requesting that a significant amount of future long-term incentive compensation awarded to senior executives shall be performance-based and requesting that the board adopt and disclose challenging performance metrics to shareholders, based on the following analytical steps:

■ First, vote for shareholder proposals advocating the use
of performance-based equity awards, such as performance contingent options or restricted stock, indexed options, or premium-priced options,
unless the proposal is overly restrictive or if the company has demonstrated that it is using a "substantial" portion of
performance-based awards for its top executives. Standard stock options and performance-accelerated awards do not meet the criteria to
be considered as performance-based awards. Further, premium-priced options should have a meaningful premium to be considered performance-based
awards; and

■ Second, assess the rigor of the company's performance-based
equity program. If the bar set for the performance-based program is too low based on the company's historical or peer group comparison,
generally vote for the proposal. Furthermore, if target performance results in an above target payout, vote for the shareholder proposal
due to program's poor design. If the company does not disclose the performance metric of the performance-based equity program,
vote for the shareholder proposal regardless of the outcome of the first step to the test.

In general, vote for the shareholder proposal if the company does not meet both of the above two steps.

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**Pay for Superior Performance**

**General Recommendation:** Vote case-by-case on shareholder proposals that request the board establish a pay-for- superior performance standard in the company's executive compensation plan for senior executives. These proposals generally include the following principles:

■ Set compensation targets for the plan's annual and
long-term incentive pay components at or below the peer group median;

■ Deliver a majority of the plan's target long-term compensation
through performance-vested, not simply time- vested, equity awards;

■ Provide the strategic rationale and relative weightings of
the financial and non-financial performance metrics or criteria used in the annual and performance-vested long-term incentive components
of the plan;

■ Establish performance targets for each plan financial metric
relative to the performance of the company's peer companies; and

■ Limit payment under the annual and performance-vested long-term
incentive components of the plan to when the company's performance on its selected financial performance metrics exceeds peer group
median performance.

Consider the following factors in evaluating this proposal:

■ What aspects of the company's annual and long-term
equity incentive programs are performance driven?

■ If the annual and long-term equity incentive programs are
performance driven, are the performance criteria and hurdle rates disclosed to shareholders or are they benchmarked against a disclosed
peer group?

■ Can shareholders assess the correlation between pay and performance
based on the current disclosure? and

■ What type of industry and stage of business cycle does the
company belong to?

**Pre-Arranged Trading Plans (10b5-1 Plans)**

**General Recommendation:** Generally vote for shareholder proposals calling for the addition of certain safeguards in prearranged trading plans (10b5-1 plans) for executives. Safeguards may include:

■ Adoption, amendment, or termination of a 10b5-1 Plan must
be disclosed in a Form 8-K;

■ Amendment or early termination of a 10b5-1 Plan allowed only
under extraordinary circumstances, as determined by the board;

■ Request that a certain number of days that must elapse between
adoption or amendment of a 10b5-1 Plan and initial trading under the plan;

■ Reports on Form 4 must identify transactions made pursuant
to a 10b5-1 Plan;

■ An executive may not trade in company stock outside the 10b5-1
Plan; and

■ Trades under a 10b5-1 Plan must be handled by a broker who
does not handle other securities transactions for the executive.

**Prohibit Outside CEOs from Serving on Compensation Committees**

**General Recommendation:** Generally vote against proposals seeking a policy to prohibit any outside CEO from serving on a company's compensation committee, unless the company has demonstrated problematic pay practices that raise concerns about the performance and composition of the committee.

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**Recoupment of Incentive or Stock Compensation in Specified Circumstances**

**General Recommendation:** Vote case-by-case on proposals to recoup incentive cash or stock compensation made to senior executives if it is later determined that the figures upon which incentive compensation is earned turn out to have been in error, or if the senior executive has breached company policy or has engaged in misconduct that may be significantly detrimental to the company's financial position or reputation, or if the senior executive failed to manage or monitor risks that subsequently led to significant financial or reputational harm to the company. Many companies have adopted policies that permit recoupment in cases where an executive's fraud, misconduct, or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned incentive compensation. However, such policies may be narrow given that not all misconduct or negligence may result in significant financial restatements. Misconduct, negligence, or lack of sufficient oversight by senior executives may lead to significant financial loss or reputational damage that may have long-lasting impact.

In considering whether to support such shareholder proposals, ISS will take into consideration the following factors:

■ If the company has adopted a formal recoupment policy;

■ The rigor of the recoupment policy focusing on how and under
what circumstances the company may recoup incentive or stock compensation;

■ Whether the company has chronic restatement history or material
financial problems;

■ Whether the company's policy substantially addresses
the concerns raised by the proponent;

■ Disclosure of recoupment of incentive or stock compensation
from senior executives or lack thereof; and

■ Any other relevant factors.

**Severance and Golden Parachute Agreements**

**General Recommendation:** Vote case-by-case on shareholder proposals requiring that executive severance (including change-in-control related) arrangements or payments be submitted for shareholder ratification.

Factors that will be considered include, but are not limited to:

■ The company's severance or change-in-control agreements
in place, and the presence of problematic features (such as excessive severance entitlements, single triggers, excise tax gross-ups,
etc.);

■ Any existing limits on cash severance payouts or policies
which require shareholder ratification of severance payments exceeding a certain level;

■ Any recent severance-related controversies; and

■ Whether the proposal is overly prescriptive, such as requiring
shareholder approval of severance that does not exceed market norms.

**Share Buyback Impact on Incentive Program Metrics**

**General Recommendation:** Vote case-by-case on proposals requesting the company exclude the impact of share buybacks from the calculation of incentive program metrics, considering the following factors:

■ The frequency and timing of the company's share
buybacks;

■ The use of per-share metrics in incentive plans;

■ The effect of recent buybacks on incentive metric results
and payouts; and

■ Whether there is any indication of metric result manipulation.

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**Supplemental Executive Retirement Plans (SERPs)**

**General Recommendation:** Generally vote for shareholder proposals requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote unless the company's executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans.

Generally vote for shareholder proposals requesting to limit the executive benefits provided under the company's supplemental executive retirement plan (SERP) by limiting covered compensation to a senior executive's annual salary or those pay elements covered for the general employee population.

**Tax Gross-Up Proposals**

**General Recommendation:** Generally vote for proposals calling for companies to adopt a policy of not providing tax gross-up payments to executives, except in situations where gross-ups are provided pursuant to a plan, policy, or arrangement applicable to management employees of the company, such as a relocation or expatriate tax equalization policy.

**Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity**

**General Recommendation:** Vote case-by-case on shareholder proposals seeking a policy requiring termination of employment prior to severance payment and/or eliminating accelerated vesting of unvested equity.

The following factors will be considered:

■ The company's current treatment of equity upon employment
termination and/or in change-in-control situations (i.e., vesting is double triggered and/or pro rata, does it allow for the assumption
of equity by acquiring company, the treatment of performance shares, etc.); and

■ Current employment agreements, including potential poor
pay practices such as gross-ups embedded in those agreements.

Generally vote for proposals seeking a policy that prohibits automatic acceleration of the vesting of equity awards to senior executives upon a voluntary termination of employment or in the event of a change in control (except for pro rata vesting considering the time elapsed and attainment of any related performance goals between the award date and the change in control).

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&nbsp;&nbsp;&nbsp;&nbsp;6. Routine/Miscellaneous

**Adjourn Meeting**

**General Recommendation:** Generally vote against proposals to provide management with the authority to adjourn an annual or special meeting absent compelling reasons to support the proposal.

Vote for proposals that relate specifically to soliciting votes for a merger or transaction if supporting that merger or transaction. Vote against proposals if the wording is too vague or if the proposal includes "other business."

**Amend Quorum Requirements**

**General Recommendation:** Vote case-by-case on proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding, taking into consideration:

■ The new quorum threshold requested;

■ The rationale presented for the reduction;

■ The market capitalization of the company (size, inclusion
in indices);

■ The company's ownership structure;

■ Previous voter turnout or attempts to achieve quorum;

■ Any provisions or commitments to restore quorum to a majority
of shares outstanding, should voter turnout improve sufficiently; and

■ Other factors as appropriate.

In general, a quorum threshold kept as close to a majority of shares outstanding as is achievable is preferred.

Vote case-by-case on directors who unilaterally lower the quorum requirements below a majority of the shares outstanding, taking into consideration the factors listed above.

**Amend Minor Bylaws**

**General Recommendation:** Vote for bylaw or charter changes that are of a housekeeping nature (updates or corrections).

**Change Company Name**

**General Recommendation:** Vote for proposals to change the corporate name unless there is compelling evidence that the change would adversely impact shareholder value.

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**Change Date, Time, or Location of Annual Meeting**

**General Recommendation:** Vote for management proposals to change the date, time, or location of the annual meeting unless the proposed change is unreasonable.

Vote against shareholder proposals to change the date, time, or location of the annual meeting unless the current scheduling or location is unreasonable.

**Other Business**

**General Recommendation:** Vote against proposals to approve other business when it appears as a voting item.

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&nbsp;&nbsp;&nbsp;&nbsp;7. Social and Environmental
 Issues

Global Approach – E&S Shareholder Proposals

ISS applies a common approach globally to evaluating social and environmental proposals which cover a wide range of topics, including consumer and product safety, environment and energy, labor standards and human rights, workplace and board diversity, and corporate political issues. While a variety of factors goes into each analysis, the overall principle guiding all vote recommendations focuses on how the proposal may enhance or protect shareholder value in either the short or long term.

**General Recommendation:** Generally vote case-by-case, examining primarily whether implementation of the proposal is likely to enhance or protect shareholder value. The following factors will be considered:

■ If the issues presented in the proposal are being appropriately
or effectively dealt with through legislation or government regulation;

■ If the company has already responded in an appropriate
and sufficient manner to the issue(s) raised in the proposal;

■ Whether the proposal's request is unduly burdensome
(scope or timeframe) or overly prescriptive;

■ The company's approach compared with any industry
standard practices for addressing the issue(s) raised by the proposal;

■ Whether there are significant controversies, fines, penalties,
or litigation associated with the company's practices related to the issue(s) raised in the proposal;

■ If the proposal requests increased disclosure or greater
transparency, whether reasonable and sufficient information is currently available to shareholders from the company or from other publicly
available sources; and

■ If the proposal requests increased disclosure or greater
transparency, whether implementation would reveal proprietary or confidential information that could place the company at a competitive
disadvantage.

Endorsement of Principles

**General Recommendation:** Generally vote against proposals seeking a company's endorsement of principles that support a particular public policy position. Endorsing a set of principles may require a company to take a stand on an issue that is beyond its own control and may limit its flexibility with respect to future developments.

Management and the board should be afforded the flexibility to make decisions on specific public policy positions based on their own assessment of the most beneficial strategies for the company.

Animal Welfare

**Animal Welfare Policies**

**General Recommendation:** Generally vote for proposals seeking a report on a company's animal welfare standards, or animal welfare-related risks, unless:

■ The company has already published a set of animal welfare
standards and monitors compliance;

■ The company's standards are comparable to industry
peers; and

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■ There are no recent significant fines, litigation, or controversies
related to the company's and/or its suppliers' treatment of animals.

**Animal Testing**

**General Recommendation:** Generally vote against proposals to phase out the use of animals in product testing, unless:

■ The company is conducting animal testing programs that
are unnecessary or not required by regulation;

■ The company is conducting animal testing when suitable
alternatives are commonly accepted and used by industry peers; or

■ There are recent, significant fines or litigation related
to the company's treatment of animals.

**Animal Slaughter**

**General Recommendation:** Generally vote against proposals requesting the implementation of Controlled Atmosphere Killing (CAK) methods at company and/or supplier operations unless such methods are required by legislation or generally accepted as the industry standard.

Vote case-by-case on proposals requesting a report on the feasibility of implementing CAK methods at company and/or supplier operations considering the availability of existing research conducted by the company or industry groups on this topic and any fines or litigation related to current animal processing procedures at the company.

Consumer Issues

**Genetically Modified Ingredients**

**General Recommendation:** Generally vote against proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products. The labeling of products with GE ingredients is best left to the appropriate regulatory authorities.

Vote case-by-case on proposals asking for a report on the feasibility of labeling products containing GE ingredients, taking into account:

■ The potential impact of such labeling on the company's
business;

■ The quality of the company's disclosure on GE product
labeling, related voluntary initiatives, and how this disclosure compares with industry peer disclosure; and

■ Company's current disclosure on the feasibility of
GE product labeling.

Generally vote against proposals seeking a report on the social, health, and environmental effects of genetically modified organisms (GMOs). Studies of this sort are better undertaken by regulators and the scientific community.

Generally vote against proposals to eliminate GE ingredients from the company's products, or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company's products. Such decisions are more appropriately made by management with consideration of current regulations.

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**Reports on Potentially Controversial Business/Financial Practices**

**General Recommendation:** Vote case-by-case on requests for reports on a company's potentially controversial business or financial practices or products, taking into account:

■ Whether the company has adequately disclosed mechanisms
in place to prevent abuses;

■ Whether the company has adequately disclosed the financial
risks of the products/practices in question;

■ Whether the company has been subject to violations of related
laws or serious controversies; and

■ Peer companies' policies/practices in this area.

**Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation**

**General Recommendation:** Generally vote against proposals requesting that companies implement specific price restraints on pharmaceutical products unless the company fails to adhere to legislative guidelines or industry norms in its product pricing practices.

Vote case-by-case on proposals requesting that a company report on its product pricing or access to medicine policies, considering:

■ The potential for reputational, market, and regulatory risk
exposure;

■ Existing disclosure of relevant policies;

■ Deviation from established industry norms;

■ Relevant company initiatives to provide research and/or products
to disadvantaged consumers;

■ Whether the proposal focuses on specific products or geographic
regions;

■ The potential burden and scope of the requested report; and

■ Recent significant controversies, litigation, or fines at
the company.

Generally vote for proposals requesting that a company report on the financial and legal impact of its prescription drug reimportation policies unless such information is already publicly disclosed.

Generally vote against proposals requesting that companies adopt specific policies to encourage or constrain prescription drug reimportation. Such matters are more appropriately the province of legislative activity and may place the company at a competitive disadvantage relative to its peers.

**Product Safety and Toxic/Hazardous Materials**

**General Recommendation:** Generally vote for proposals requesting that a company report on its policies, initiatives/procedures, and oversight mechanisms related to toxic/hazardous materials or product safety in its supply chain, unless:

■ The company already discloses similar information through
existing reports such as a supplier code of conduct and/or a sustainability report;

■ The company has formally committed to the implementation
of a toxic/hazardous materials and/or product safety and supply chain reporting and monitoring program based on industry norms or similar
standards within a specified time frame; or

■ The company has not been recently involved in relevant significant
controversies, fines, or litigation.

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Vote case-by-case on resolutions requesting that companies develop a feasibility assessment to phase-out of certain toxic/hazardous materials, or evaluate and disclose the potential financial and legal risks associated with utilizing certain materials, considering:

■ The company's current level of disclosure regarding
its product safety policies, initiatives, and oversight mechanisms;

■ Current regulations in the markets in which the company operates;
and

■ Recent significant controversies, litigation, or fines stemming
from toxic/hazardous materials at the company.

Generally vote against resolutions requiring that a company reformulate its products.

**Tobacco-Related Proposals**

**General Recommendation:** Vote case-by-case on resolutions regarding the advertisement of tobacco products, considering:

■ Recent related fines, controversies, or significant litigation;

■ Whether the company complies with relevant laws and regulations
on the marketing of tobacco;

■ Whether the company's advertising restrictions deviate
from those of industry peers;

■ Whether the company entered into the Master Settlement Agreement,
which restricts marketing of tobacco to youth; and

■ Whether restrictions on marketing to youth extend to foreign
countries.

Vote case-by-case on proposals regarding second-hand smoke, considering;

■ Whether the company complies with all laws and regulations;

■ The degree that voluntary restrictions beyond those mandated
by law might hurt the company's competitiveness; and

■ The risk of any health-related liabilities.

Generally vote against resolutions to cease production of tobacco-related products, to avoid selling products to tobacco companies, to spin-off tobacco-related businesses, or prohibit investment in tobacco equities. Such business decisions are better left to company management or portfolio managers.

Generally vote against proposals regarding tobacco product warnings. Such decisions are better left to public health authorities.

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Climate Change

**Say on Climate (SoC) Management Proposals**

**General Recommendation:** Vote case-by-case on management proposals that request shareholders to approve the company's climate transition action plan**<sup>23</sup>**, taking into account the completeness and rigor of the plan. Information that will be considered where available includes the following:

■ The extent to which the company's climate related disclosures
are in line with TCFD recommendations and meet other market standards;

■ Disclosure of its operational and supply chain GHG emissions
(Scopes 1, 2, and 3);

■ The completeness and rigor of company's short-, medium-,
and long-term targets for reducing operational and supply chain GHG emissions (Scopes 1, 2, and 3 if relevant);

■ Whether the company has sought and received third-party approval
that its targets are science-based;

■ Whether the company has made a commitment to be "net
zero" for operational and supply chain emissions (Scopes 1, 2, and 3) by 2050;

■ Whether the company discloses a commitment to report on the
implementation of its plan in subsequent years;

■ Whether the company's climate data has received third-party
assurance;

■ Disclosure of how the company's lobbying activities
and its capital expenditures align with company strategy;

■ Whether there are specific industry decarbonization challenges;
and

■ The company's related commitment, disclosure, and performance
compared to its industry peers.

**Say on Climate (SoC) Shareholder Proposals**

**General Recommendation:** Vote case-by-case on shareholder proposals that request the company to disclose a report providing its GHG emissions levels and reduction targets and/or its upcoming/approved climate transition action plan and provide shareholders the opportunity to express approval or disapproval of its GHG emissions reduction plan, taking into account information such as the following:

■ The completeness and rigor of the company's climate-related
disclosure;

■ The company's actual GHG emissions performance;

■ Whether the company has been the subject of recent, significant
violations, fines, litigation, or controversy related to its GHG emissions; and

■ Whether the proposal's request is unduly burdensome
(scope or timeframe) or overly prescriptive.

**Climate Change/Greenhouse Gas (GHG) Emissions**

**General Recommendation:** Generally vote for resolutions requesting that a company disclose information on the financial, physical, or regulatory risks it faces related to climate change on its operations and investments or on how the company identifies, measures, and manages such risks, considering:

■ Whether the company already provides current, publicly-available
information on the impact that climate change may have on the company as well as associated company policies and procedures to address
related risks and/or opportunities;

**<sup>23</sup>** Variations of this request also include climate transition related ambitions, or commitment to reporting on the implementation of a climate plan.

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&nbsp;&nbsp;&nbsp;&nbsp;■ The company's level of disclosure compared to industry peers;
 and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether there are significant controversies, fines, penalties, or
 litigation associated with the company's climate change-related performance.

Generally vote for proposals requesting a report on greenhouse gas (GHG) emissions from company operations and/or products and operations, unless:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company already discloses current, publicly-available information
 on the impacts that GHG emissions may have on the company as well as associated company policies
 and procedures to address related risks and/or opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's level of disclosure is comparable to that of
 industry peers; or

&nbsp;&nbsp;&nbsp;&nbsp;■ There are no significant, controversies, fines, penalties, or litigation
 associated with the company's GHG emissions.

Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company provides disclosure of year-over-year GHG emissions
 performance data;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether company disclosure lags behind industry peers;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's actual GHG emissions performance;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's current GHG emission policies, oversight mechanisms,
 and related initiatives; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has been the subject of recent, significant
 violations, fines, litigation, or controversy related to GHG emissions.

**Energy Efficiency**

**General Recommendation:** Generally vote for proposals requesting that a company report on its energy efficiency policies, unless:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company complies with applicable energy efficiency regulations
 and laws, and discloses its participation in energy efficiency policies and programs, including
 disclosure of benchmark data, targets, and performance measures; or

&nbsp;&nbsp;&nbsp;&nbsp;■ The proponent requests adoption of specific energy efficiency goals
 within specific timelines.

**Renewable Energy**

**General Recommendation:** Generally vote for requests for reports on the feasibility of developing renewable energy resources unless the report would be duplicative of existing disclosure or irrelevant to the company's line of business.

Generally vote against proposals requesting that the company invest in renewable energy resources. Such decisions are best left to management's evaluation of the feasibility and financial impact that such programs may have on the company.

Generally vote against proposals that call for the adoption of renewable energy goals, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ The scope and structure of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's current level of disclosure on renewable energy
 use and GHG emissions; and

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■ The company's disclosure of policies, practices, and oversight implemented to manage GHG emissions and mitigate climate change risks.

Diversity

**Board Diversity**

**General Recommendation:** Generally vote for requests for reports on a company's efforts to diversify the board, unless:

■ The gender and racial minority representation of the company's board is reasonably inclusive in relation to companies of similar size and business; or

■ The board already reports on its nominating procedures and gender and racial minority initiatives on the board and within the company.

Vote case-by-case on proposals asking a company to increase the gender and racial minority representation on its board, taking into account:

■ The degree of existing gender and racial minority diversity on the company's board and among its executive officers;

■ The level of gender and racial minority representation that exists at the company's industry peers;

■ The company's established process for addressing gender and racial minority board representation;

■ Whether the proposal includes an overly prescriptive request to amend nominating committee charter language;

■ The independence of the company's nominating committee;

■ Whether the company uses an outside search firm to identify potential director nominees; and

■ Whether the company has had recent controversies, fines, or litigation regarding equal employment practices.

**Equality of Opportunity**

**General Recommendation:** Generally vote for proposals requesting a company disclose its diversity policies or initiatives, or proposals requesting disclosure of a company's comprehensive workforce diversity data, including requests for EEO-1 data, unless:

■ The company publicly discloses equal opportunity policies and initiatives in a comprehensive manner;

■ The company already publicly discloses comprehensive workforce diversity data; or

■ The company has no recent significant EEO-related violations or litigation.

Generally vote against proposals seeking information on the diversity efforts of suppliers and service providers. Such requests may pose a significant burden on the company.

**Gender Identity, Sexual Orientation, and Domestic Partner Benefits**

**General Recommendation:** Generally vote for proposals seeking to amend a company's EEO statement or diversity policies to prohibit discrimination based on sexual orientation and/or gender identity, unless the change would be unduly burdensome.

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Generally vote against proposals to extend company benefits to, or eliminate benefits from, domestic partners. Decisions regarding benefits should be left to the discretion of the company.

**Gender, Race/Ethnicity Pay Gap**

**General Recommendation:** Vote case-by-case on requests for reports on a company's pay data by gender or race/ ethnicity, or a report on a company's policies and goals to reduce any gender or race/ethnicity pay gaps, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's current policies and disclosure related to both
 its diversity and inclusion policies and practices and its compensation philosophy on fair
 and equitable compensation practices;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has been the subject of recent controversy,
 litigation, or regulatory actions related to gender, race, or ethnicity pay gap issues;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's disclosure regarding gender, race, or ethnicity
 pay gap policies or initiatives compared to its industry peers; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Local laws regarding categorization of race and/or ethnicity and
 definitions of ethnic and/or racial minorities.

**Racial Equity and/or Civil Rights Audit Guidelines**

**General Recommendation:** Vote case-by-case on proposals asking a company to conduct an independent racial equity and/or civil rights audit, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's established process or framework for addressing
 racial inequity and discrimination internally;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company adequately discloses workforce diversity and
 inclusion metrics and goals;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has issued a public statement related to its
 racial justice efforts in recent years, or has committed to internal policy review;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has engaged with impacted communities, stakeholders,
 and civil rights experts;

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's track record in recent years of racial justice
 measures and outreach externally; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the company has been the subject of recent controversy,
 litigation, or regulatory actions related to racial inequity or discrimination.

Environment and Sustainability

**Facility and Workplace Safety**

**General Recommendation:** Vote case-by-case on requests for workplace safety reports, including reports on accident risk reduction efforts, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's current level of disclosure of its workplace
 health and safety performance data, health and safety management policies, initiatives, and
 oversight mechanisms;

&nbsp;&nbsp;&nbsp;&nbsp;■ The nature of the company's business, specifically regarding
 company and employee exposure to health and safety risks;

&nbsp;&nbsp;&nbsp;&nbsp;■ Recent significant controversies, fines, or violations related to
 workplace health and safety; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The company's workplace health and safety performance relative
 to industry peers.

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Vote case-by-case on resolutions requesting that a company report on safety and/or security risks associated with its operations and/or facilities, considering:

■ The company's compliance with applicable regulations
and guidelines;

■ The company's current level of disclosure regarding
its security and safety policies, procedures, and compliance monitoring; and

■ The existence of recent, significant violations, fines, or
controversy regarding the safety and security of the company's operations and/or facilities.

**Natural Capital- Related and/or Community Impact Assessment Proposals**

**General Recommendation:** Vote case-by-case on requests for reports on policies and/or the potential (community) social and/or environmental impact of company operations, considering:

■ Alignment of current disclosure of applicable company policies,
metrics, risk assessment report(s) and risk management procedures with any relevant, broadly accepted reporting frameworks;

■ The impact of regulatory non-compliance, litigation, remediation,
or reputational loss that may be associated with failure to manage the company's operations in question, including the management
of relevant community and stakeholder relations;

■ The nature, purpose, and scope of the company's operations
in the specific region(s);

■ The degree to which company policies and procedures are consistent
with industry norms; and

■ The scope of the resolution.

**Hydraulic Fracturing**

**General Recommendation:** Generally vote for proposals requesting greater disclosure of a company's (natural gas) hydraulic fracturing operations, including measures the company has taken to manage and mitigate the potential community and environmental impacts of those operations, considering:

■ The company's current level of disclosure of relevant
policies and oversight mechanisms;

■ The company's current level of such disclosure relative
to its industry peers;

■ Potential relevant local, state, or national regulatory developments;
and

■ Controversies, fines, or litigation related to the company's
hydraulic fracturing operations.

**Operations in Protected Areas**

**General Recommendation:** Generally vote for requests for reports on potential environmental damage as a result of company operations in protected regions, unless:

■ Operations in the specified regions are not permitted by
current laws or regulations;

■ The company does not currently have operations or plans to
develop operations in these protected regions; or

■ The company's disclosure of its operations and environmental
policies in these regions is comparable to industry peers.

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**Recycling**

**General Recommendation:** Vote case-by-case on proposals to report on an existing recycling program, or adopt a new recycling program, taking into account:

■ The nature of the company's business;

■ The current level of disclosure of the company's existing
related programs;

■ The timetable and methods of program implementation prescribed
by the proposal;

■ The company's ability to address the issues raised
in the proposal; and

■ How the company's recycling programs compare to similar
programs of its industry peers.

**Sustainability Reporting**

**General Recommendation:** Generally vote for proposals requesting that a company report on its policies, initiatives, and oversight mechanisms related to social, economic, and environmental sustainability, unless:

■ The company already discloses similar information through
existing reports or policies such as an environment, health, and safety (EHS) report; a comprehensive code of corporate conduct; and/or
a diversity report; or

■ The company has formally committed to the implementation
of a reporting program based on Global Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame.

**Water Issues**

**General Recommendation:** Vote case-by-case on proposals requesting a company report on, or adopt a new policy on, water-related risks and concerns, taking into account:

■ The company's current disclosure of relevant policies,
initiatives, oversight mechanisms, and water usage metrics;

■ Whether or not the company's existing water-related
policies and practices are consistent with relevant internationally recognized standards and national/local regulations;

■ The potential financial impact or risk to the company associated
with water-related concerns or issues; and

■ Recent, significant company controversies, fines, or litigation
regarding water use by the company and its suppliers.

General Corporate Issues

**Charitable Contributions**

**General Recommendation:** Vote against proposals restricting a company from making charitable contributions. Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which, and if, contributions are in the best interests of the company.

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**Data Security, Privacy, and Internet Issues**

**General Recommendation:** Vote case-by-case on proposals requesting the disclosure or implementation of data security, privacy, or information access and management policies and procedures, considering:

■ The level of disclosure of company policies and procedures
relating to data security, privacy, freedom of speech, information access and management, and Internet censorship;

■ Engagement in dialogue with governments or relevant groups
with respect to data security, privacy, or the free flow of information on the Internet;

■ The scope of business involvement and of investment in countries
whose governments censor or monitor the Internet and other telecommunications;

■ Applicable market-specific laws or regulations that may be
imposed on the company; and

■ Controversies, fines, or litigation related to data security,
privacy, freedom of speech, or Internet censorship.

**ESG Compensation-Related Proposals**

**General Recommendation:** Vote case-by-case on proposals seeking a report or additional disclosure on the company's approach, policies, and practices on incorporating environmental and social criteria into its executive compensation strategy, considering:

■ The scope and prescriptive nature of the proposal;

■ The company's current level of disclosure regarding
its environmental and social performance and governance;

■ The degree to which the board or compensation committee already
discloses information on whether it has considered related E&S criteria; and

■ Whether the company has significant controversies or regulatory
violations regarding social or environmental issues.

Human Rights, Human Capital Management, and International Operations

**Human Rights Proposals**

**General Recommendation:** Generally vote for proposals requesting a report on company or company supplier labor and/or human rights standards and policies unless such information is already publicly disclosed.

Vote case-by-case on proposals to implement company or company supplier labor and/or human rights standards and policies, considering:

■ The degree to which existing relevant policies and practices
are disclosed;

■ Whether or not existing relevant policies are consistent
with internationally recognized standards;

■ Whether company facilities and those of its suppliers are
monitored and how;

■ Company participation in fair labor organizations or other
internationally recognized human rights initiatives;

■ Scope and nature of business conducted in markets known to
have higher risk of workplace labor/human rights abuse;

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■ Recent, significant company controversies, fines, or litigation
regarding human rights at the company or its suppliers;

■ The scope of the request; and

■ Deviation from industry sector peer company standards and
practices.

Vote case-by-case on proposals requesting that a company conduct an assessment of the human rights risks in its operations or in its supply chain, or report on its human rights risk assessment process, considering:

■ The degree to which existing relevant policies and practices
are disclosed, including information on the implementation of these policies and any related oversight mechanisms;

■ The company's industry and whether the company or its
suppliers operate in countries or areas where there is a history of human rights concerns;

■ Recent significant controversies, fines, or litigation regarding
human rights involving the company or its suppliers, and whether the company has taken remedial steps; and

■ Whether the proposal is unduly burdensome or overly prescriptive.

**Mandatory Arbitration**

**General Recommendation:** Vote case-by-case on requests for a report on a company's use of mandatory arbitration on employment-related claims, taking into account:

■ The company's current policies and practices related
to the use of mandatory arbitration agreements on workplace claims;

■ Whether the company has been the subject of recent controversy,
litigation, or regulatory actions related to the use of mandatory arbitration agreements on workplace claims; and

■ The company's disclosure of its policies and practices
related to the use of mandatory arbitration agreements compared to its peers.

**Operations in High-Risk Markets**

**General Recommendation:** Vote case-by-case on requests for a report on a company's potential financial and reputational risks associated with operations in "high-risk" markets, such as a terrorism-sponsoring state or politically/socially unstable region, taking into account:

■ The nature, purpose, and scope of the operations and business
involved that could be affected by social or political disruption;

■ Current disclosure of applicable risk assessment(s) and risk
management procedures;

■ Compliance with U.S. sanctions and laws;

■ Consideration
 of other international policies, standards, and laws; and

■ Whether the company has been recently involved in recent,
significant controversies, fines, or litigation related to its operations in "high-risk" markets.

**Outsourcing/Offshoring**

**General Recommendation:** Vote case-by-case on proposals calling for companies to report on the risks associated with outsourcing/plant closures, considering:

■ Controversies surrounding operations in the relevant market(s);

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■ The value of the requested report to shareholders;

■ The company's current level of disclosure of relevant
information on outsourcing and plant closure procedures; and

■ The company's existing human rights standards relative
to industry peers.

**Sexual Harassment**

**General Recommendation:** Vote case-by-case on requests for a report on company actions taken to strengthen policies and oversight to prevent workplace sexual harassment, or a report on risks posed by a company's failure to prevent workplace sexual harassment, taking into account:

■ The company's current policies, practices, oversight
mechanisms related to preventing workplace sexual harassment;

■ Whether the company has been the subject of recent controversy,
litigation, or regulatory actions related to workplace sexual harassment issues; and

■ The company's disclosure regarding workplace sexual
harassment policies or initiatives compared to its industry peers.

**Weapons and Military Sales**

**General Recommendation:** Vote against reports on foreign military sales or offsets. Such disclosures may involve sensitive and confidential information. Moreover, companies must comply with government controls and reporting on foreign military sales.

Generally vote against proposals asking a company to cease production or report on the risks associated with the use of depleted uranium munitions or nuclear weapons components and delivery systems, including disengaging from current and proposed contracts. Such contracts are monitored by government agencies, serve multiple military and non-military uses, and withdrawal from these contracts could have a negative impact on the company's business.

Political Activities

**Lobbying**

**General Recommendation:** Vote case-by-case on proposals requesting information on a company's lobbying (including direct, indirect, and grassroots lobbying) activities, policies, or procedures, considering:

■ The company's current disclosure of relevant lobbying
policies, and management and board oversight;

■ The company's disclosure regarding trade associations
or other groups that it supports, or is a member of, that engage in lobbying activities; and

■ Recent significant controversies, fines, or litigation regarding
the company's lobbying-related activities.

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**Political Contributions**

**General Recommendation:** Generally vote for proposals requesting greater disclosure of a company's political contributions and trade association spending policies and activities, considering:

■ The company's policies, and management and board oversight
related to its direct political contributions and payments to trade associations or other groups that may be used for political purposes;

■ The company's disclosure regarding its support of,
and participation in, trade associations or other groups that may make political contributions; and

■ Recent significant controversies, fines, or litigation related
to the company's political contributions or political activities.

Vote against proposals barring a company from making political contributions. Businesses are affected by legislation at the federal, state, and local level; barring political contributions can put the company at a competitive disadvantage.

Vote against proposals to publish in newspapers and other media a company's political contributions. Such publications could present significant cost to the company without providing commensurate value to shareholders.

**Political Expenditures and Lobbying Congruency**

**General Recommendation:** Generally vote case-by-case on proposals requesting greater disclosure of a company's alignment of political contributions, lobbying, and electioneering spending with a company's publicly stated values and policies, considering:

■ The company's policies, management, board oversight,
governance processes, and level of disclosure related to direct political contributions, lobbying activities, and payments to trade associations,
political action committees, or other groups that may be used for political purposes;

■ The company's disclosure regarding: the reasons for
its support of candidates for public offices; the reasons for support of and participation in trade associations or other groups that
may make political contributions; and other political activities;

■ Any incongruencies identified between a company's direct
and indirect political expenditures and its publicly stated values and priorities; and

■ Recent significant controversies related to the company's
direct and indirect lobbying, political contributions, or political activities.

Generally vote case-by-case on proposals requesting comparison of a company's political spending to objectives that can mitigate material risks for the company, such as limiting global warming.

**Political Ties**

**General Recommendation:** Generally vote against proposals asking a company to affirm political nonpartisanship in the workplace, so long as:

■ There are no recent, significant controversies, fines, or
litigation regarding the company's political contributions or trade association spending; and

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■ The company has procedures in place to ensure that employee
contributions to company-sponsored political action committees (PACs) are strictly voluntary and prohibit coercion.

Vote against proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or investment bankers that have prior government service and whether such service had a bearing on the business of the company. Such a list would be burdensome to prepare without providing any meaningful information to shareholders.

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&nbsp;&nbsp;&nbsp;&nbsp;8. Mutual Fund Proxies

**Election of Directors**

**General Recommendation:** Vote case-by-case on the election of directors and trustees, following the same guidelines for uncontested directors for public company shareholder meetings. However, mutual fund boards do not usually have compensation committees, so do not withhold for the lack of this committee.

**Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes**

**General Recommendation:** For closed-end management investment companies (CEFs), vote against or withhold from nominating/governance committee members (or other directors on a case-by-case basis) at CEFs that have not provided a compelling rationale for opting-in to a Control Share Acquisition statute, nor submitted a by-law amendment to a shareholder vote.

**Converting Closed-end Fund to Open-end Fund**

**General Recommendation:** Vote case-by-case on conversion proposals, considering the following factors:

■ Past performance as a closed-end fund;

■ Market in which the fund invests;

■ Measures taken by the board to address the discount; and

■ Past shareholder activism, board activity, and votes on related
proposals.

**Proxy Contests**

**General Recommendation:** Vote case-by-case on proxy contests, considering the following factors:

■ Past performance relative to its peers;

■ Market in which the fund invests;

■ Measures taken by the board to address the issues;

■ Past shareholder activism, board activity, and votes on related
proposals;

■ Strategy of the incumbents versus the dissidents;

■ Independence of directors;

■ Experience and skills of director candidates;

■ Governance profile of the company; and

■ Evidence of management entrenchment.

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**Investment Advisory Agreements**

**General Recommendation:** Vote case-by-case on investment advisory agreements, considering the following factors:

■ Proposed and current fee schedules;

■ Fund category/investment objective;

■ Performance benchmarks;

■ Share price performance as compared with peers;

■ Resulting fees relative to peers; and

■ Assignments (where the advisor undergoes a change of control).

**Approving New Classes or Series of Shares**

**General Recommendation:** Vote for the establishment of new classes or series of shares.

**Preferred Stock Proposals**

**General Recommendation:** Vote case-by-case on the authorization for or increase in preferred shares, considering the following factors:

■ Stated specific financing purpose;

■ Possible dilution for common shares; and

■ Whether the shares can be used for antitakeover purposes.

**1940 Act Policies**

**General Recommendation:** Vote case-by-case on policies under the Investment Advisor Act of 1940, considering the following factors:

■ Potential competitiveness;

■ Regulatory developments;

■ Current and potential returns; and

■ Current and potential risk.

Generally vote for these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with the current SEC interpretation.

**Changing a Fundamental Restriction to a Nonfundamental Restriction**

**General Recommendation:** Vote case-by-case on proposals to change a fundamental restriction to a non- fundamental restriction, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The fund's target investments;

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&nbsp;&nbsp;&nbsp;&nbsp;■ The reasons given by the fund for the change; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The projected impact of the change on the portfolio.

**Change Fundamental Investment Objective to Nonfundamental**

**General Recommendation:** Vote against proposals to change a fund's fundamental investment objective to non- fundamental.

**Name Change Proposals**

**General Recommendation:** Vote case-by-case on name change proposals, considering the following factors:

■ Political/economic changes in the target market;

■ Consolidation in the target market; and

■ Current asset composition.

**Change in Fund's Subclassification**

**General Recommendation:** Vote case-by-case on changes in a fund's sub-classification, considering the following factors:

■ Potential competitiveness;

■ Current and potential returns;

■ Risk of concentration; and

■ Consolidation in target industry.

**Business Development Companies—Authorization to Sell Shares of Common Stock at a Price below Net Asset Value**

**General Recommendation:** Vote for proposals authorizing the board to issue shares below Net Asset Value (NAV) if:

■ The proposal to allow share issuances below NAV has an expiration
date no more than one year from the date shareholders approve the underlying proposal, as required under the Investment Company Act of
1940;

■ The sale is deemed to be in the best interests of shareholders
by (1) a majority of the company's independent directors and (2) a majority of the company's directors who have no financial
interest in the issuance; and

■ The company has demonstrated responsible past use of share
issuances by either:

■ Outperforming peers in its 8-digit GICS group as measured
by one- and three-year median TSRs; or

■ Providing disclosure that its past share issuances were priced
at levels that resulted in only small or moderate discounts to NAV and economic dilution to existing non-participating shareholders.

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**Disposition of Assets/Termination/Liquidation**

**General Recommendation:** Vote case-by-case on proposals to dispose of assets, to terminate or liquidate, considering the following factors:

■ Strategies employed to salvage the company;

■ The fund's past performance; and

■ The terms of the liquidation.

**Changes to the Charter Document**

**General Recommendation:** Vote case-by-case on changes to the charter document, considering the following factors:

■ The degree of change implied by the proposal;

■ The efficiencies that could result;

■ The state of incorporation; and

■ Regulatory standards and implications.

Vote against any of the following changes:

■ Removal of shareholder approval requirement to reorganize
or terminate the trust or any of its series;

■ Removal of shareholder approval requirement for amendments
to the new declaration of trust;

■ Removal of shareholder approval requirement to amend the
fund's management contract, allowing the contract to be modified by the investment manager and the trust management, as permitted
by the 1940 Act;

■ Allow the trustees to impose other fees in addition to sales
charges on investment in a fund, such as deferred sales charges and redemption fees that may be imposed upon redemption of a fund's
shares;

■ Removal of shareholder approval requirement to engage in
and terminate subadvisory arrangements; or

■ Removal of shareholder approval requirement to change the
domicile of the fund.

**Changing the Domicile of a Fund**

**General Recommendation:** Vote case-by-case on re-incorporations, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Regulations of both states;

&nbsp;&nbsp;&nbsp;&nbsp;■ Required fundamental policies of both states; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The increased flexibility available.

**Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval**

**General Recommendation:** Vote against proposals authorizing the board to hire or terminate subadvisers without shareholder approval if the investment adviser currently employs only one subadviser.

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**Distribution Agreements**

**General Recommendation:** Vote case-by-case on distribution agreement proposals, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Fees charged to comparably sized funds with similar objectives;

&nbsp;&nbsp;&nbsp;&nbsp;■ The proposed distributor's reputation and past performance;

&nbsp;&nbsp;&nbsp;&nbsp;■ The competitiveness of the fund in the industry; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The terms of the agreement.

**Master-Feeder Structure**

**General Recommendation:** Vote for the establishment of a master-feeder structure.

**Mergers**

**General Recommendation:** Vote case-by-case on merger proposals, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Resulting fee structure;

&nbsp;&nbsp;&nbsp;&nbsp;■ Performance of both funds;

&nbsp;&nbsp;&nbsp;&nbsp;■ Continuity of management personnel; and

&nbsp;&nbsp;&nbsp;&nbsp;■ Changes in corporate governance and their impact on shareholder
 rights.

Shareholder Proposals for Mutual Funds

**Establish Director Ownership Requirement**

**General Recommendation:** Generally vote against shareholder proposals that mandate a specific minimum amount of stock that directors must own in order to qualify as a director or to remain on the board.

**Reimburse Shareholder for Expenses Incurred**

**General Recommendation:** Vote case-by-case on shareholder proposals to reimburse proxy solicitation expenses. When supporting the dissidents, vote for the reimbursement of the proxy solicitation expenses.

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**Terminate the Investment Advisor**

**General Recommendation:** Vote case-by-case on proposals to terminate the investment advisor, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ Performance of the fund's Net Asset Value (NAV);

&nbsp;&nbsp;&nbsp;&nbsp;■ The fund's history of shareholder relations; and

&nbsp;&nbsp;&nbsp;&nbsp;■ The performance of other funds under the advisor's management.

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Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading institutional investors who rely on ISS' objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to help them make informed investment decisions. This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

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PART C

OTHER INFORMATION

**Item 28. Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (1) [Certificate of Trust was previously filed with the Registrant's Initial Registration on Form N-1A on June 2, 2015 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/cot.htm)

(2) [Declaration of Trust was previously filed with the Registrant's Initial Registration on Form N-1A on June 2, 2015 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/dot.htm)

(b) [By-Laws were previously filed with the Registrant's Initial Registration on Form N-1A on June 2, 2015 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/bylaws.htm)

(c) Instruments Defining Rights of Security Holders – See relevant portions
 of [Certificate of Trust](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/cot.htm) , [Declaration of Trust](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/dot.htm) and [By-Laws](http://www.sec.gov/Archives/edgar/data/1643174/000089418915002763/bylaws.htm) .

(d) (1) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon Active Asset Allocation Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d1.htm)

(2) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon Active Dividend Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d2.htm) .

(3) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon Active Income Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d3.htm) **.** 

(4) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon Active Risk Assist Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d4.htm) .

(5) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon Defined Risk Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d5.htm) .

(6) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon ESG Defensive Core Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d6.htm) .

(7) [First Amendment to the Investment Advisory Agreement between the Registrant, on behalf of the Horizon ESG Defensive Core Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 33 to its Registration Statement on Form N-1A on September 29, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019425/fp0079901_ex9928d6a.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) [Investment Advisory Agreement between the Registrant, on behalf of the Horizon U.S. Defensive Equity Fund, and Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928d7.htm) .

(9) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon U.S. Defensive Small/Mid Cap Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 34 to its Registration Statement on Form N-1A on October 3, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019666/fp0080037_ex9928d8.htm)

(10) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Tactical Fixed Income Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 34 to its Registration Statement on Form N-1A on October 3, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019666/fp0080037_ex9928d9.htm)

(11) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Expedition Plus ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928d10.htm)

(12) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Landmark ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928d11.htm)

(13) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Expedition Plus ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928d12.htm)

(14) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Landmark ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928d13.htm)

(15) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Centre American Select Equity Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928d14.htm)

(16) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Centre Global Infrastructure Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928d15.htm)

(17) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Core Equity ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d16.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Core Equity ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d17.htm)

(19) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Dividend Income ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d18.htm)

(20) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Dividend Income ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d19.htm)

(21) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Managed Risk ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d20.htm)

(22) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Managed Risk ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d21.htm)

(23) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Core Bond ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d22.htm)

(24) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Core Bond ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d23.htm)

(25) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Flexible Income ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d24.htm)

(26) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Flexible Income ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d25.htm)

(27) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Nasdaq-100 Defined Risk ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d26.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Nasdaq-100 Defined Risk ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d27.htm)

(29) [Form of Investment Advisory Agreement between the Registrant, on behalf of the Horizon Digital Frontier ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d28.htm)

(30) [Form of Sub-Advisory Agreement between the Registrant, on behalf of the Horizon Digital Frontier ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 50 to its Registration Statement on Form N-1A on April 4, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006675/fp0092906-1_ex9928d29.htm)

(31) [Form of Investment Advisory Agreement between the Registrant, on behalf of Horizon Small/Mid Cap Core Equity ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928d31.htm)

(32) [Form of Sub-Advisory Agreement between the Registrant, on behalf of Horizon Small/Mid Cap Core Equity ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 54 to its Registration Statement on Form N-1A on August 20, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425016213/fp0095054-1_ex9928d32.htm)

(33) [Form of Investment Advisory Agreement between the Registrant, on behalf of Horizon International Equity ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928d33.htm)

(34) [Form of Sub-Advisory Agreement between the Registrant, on behalf of Horizon International Equity ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 54 to its Registration Statement on Form N-1A on August 20, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425016213/fp0095054-1_ex9928d34.htm)

(35) [Form of Investment Advisory Agreement between the Registrant, on behalf of Horizon International Managed Risk ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928d35.htm)

(36) [Form of Sub-Advisory Agreement between the Registrant, on behalf of Horizon International Managed Risk ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 54 to its Registration Statement on Form N-1A on August 20, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425016213/fp0095054-1_ex9928d36.htm)

(37) [Form of Investment Advisory Agreement between the Registrant, on behalf of Anfield Enhanced Market ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d37.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38) [Form of Investment Advisory Agreement between the Registrant, on behalf of Anfield Universal Fixed Income ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d38.htm)

(39) [Form of Investment Advisory Agreement between the Registrant, on behalf of Anfield Dynamic Fixed Income ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d39.htm)

(40) [Form of Investment Advisory Agreement between the Registrant, on behalf of Regents Park Hedged Market Strategy ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d40.htm)

(41) [Form of Investment Advisory Agreement between the Registrant, on behalf Anfield U.S. Equity Sector Rotation ETF, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d41.htm)

(42) [Form of Sub-Advisory Agreement between the Registrant, on behalf of Anfield U.S. Equity Sector Rotation ETF, Exchange Traded Concepts, LLC and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 56 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022764/fp0096682-1_ex9928d42.htm)

(43) [Form of Investment Advisory Agreement between the Registrant, on behalf of Anfield Universal Fixed Income Fund, and Horizon Investments, LLC, was previously filed with Post-Effective Amendment No. 57 to its Registration Statement on Form N-1A on December 19, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425022765/fp0096683-1_ex9928d43.htm)

(e) (1) [Distribution Agreement between the Registrant and Quasar Distributors, LLC, effective as of February 8, 2016, was previously filed with Pre-Effective Amendment No. 3 to the Registration Statement on Form N-1A on January 29, 2016, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-e_distrib.htm)

(2) [Novation to the Distribution Agreement between the Registrant and Quasar Distributors, LLC effective as of September 30, 2021 (Novation Agreement) was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928e.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [Form of First Amendment to Distribution Agreement was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/dis_agr.htm)

(4) [Second Amendment to Distribution Agreement dated January 23, 2019 was previously filed with Post-Effective Amendment No. 19 to its Registration Statement on Form N-1A on March 29, 2019 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834419005859/fp0040675_ex9928e3.htm)

(5) [Form of Third Amendment to Distribution Agreement was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928e6.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [Fourth Amendment to Distribution Agreement was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928e5.htm)

(7) [Form of Fifth Amendment to Distribution Agreement was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928e6.htm)

(8) [ETF Distribution Agreement between the Registrant and Quasar Distributors, LLC, effective as of December 10, 2024, previously filed with the Post-Effective Amendment No. 44 to the Registrant's Registration Statement on Form N-1A on January 14, 2025, is hereby incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425000655/fp0091754-1_ex9928e2.htm)

(9) [First Amendment to the ETF Distribution Agreement between the Registrant and Quasar Distributors, LLC, dated April 30, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928e9.htm)

(10) [Form of Authorized Participant Agreement, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928e3.htm)

(11) [Form of Second Amendment to the ETF Distribution Agreement between the Registrant and Quasar Distributors, LLC, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928e11.htm)

(12) Form of Third Amendment to the ETF Distribution Agreement between the Registrant
 and Quasar Distributors, LLC, dated [ ], **to be filed by amendment.** 

(13) Form of Sixth Amendment to Distribution Agreement, **to be filed by amendment.** 

(f) Bonus, profit sharing contracts – None.

(g) (1) [Custody Agreement between the Registrant and U.S. Bank National Association was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-g_custody.htm)

(2) [Form of First Amendment to Custody Agreement was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/cus_agr.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [Second Amendment to the Custody Agreement dated January 23, 2019 was previously filed with Post-Effective Amendment No. 19 to its Registration Statement on Form N-1A on March 29, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419005859/fp0040675_ex9928g3.htm)

(4) [Form of Third Amendment to the Custody Agreement was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928g4.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) [Fourth Amendment to the Custody Agreement dated June 25, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928g5.htm)

(6) [Fifth Amendment to the Custody Agreement dated December 19, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928g6.htm)

(7) [Sixth Amendment to the Custody Agreement dated March 8, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928g7.htm) .

(8) [Seventh Amendment to the Custody Agreement dated December 20, 2022, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928g8.htm)

(9) [Eighth Amendment to the Custody Agreement dated February 1, 2025, was previously filed with Post-Effective Amendment No. 48 to its Registration Statement on Form N-1A on March 28, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006146/fp0092770-1_ex9928g9.htm)

(10) [Ninth Amendment to the Custody Agreement, dated April 10, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928g10.htm)

(11) [ETF Custody Agreement between the Registrant and U.S. Bank National Association, dated as of January 17, 2025 was previously filed with Post Effective Amendment No. 45 to its Registration Statement on Form N-1A on January 28, 2025 and incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425001233/fp0092106-1_ex9928g9.htm)

(12) [First Amendment to the ETF Custody Agreement between the Registrant and U.S. Bancorp Fund Services, dated May 28, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928g12.htm)

(13) [Second Amendment to the ETF Custody Agreement between the Registrant and U.S. Bancorp Fund Services, dated October 28, 2025, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928g13.htm)

(14) Third Amendment to the ETF Custody Agreement between the Registrant and U.S.
 Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(15) Tenth Amendment to the Custody Agreement, dated [ ], **to be filed by amendment.** 

(h) (1) [Fund Administration Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-h1_fundadminsrcvng.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [Form of First Amendment to Fund Administration Servicing Agreement was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/fundadm_agr.htm)

(3) [Third Amendment (including First Addendum) to the Fund Administration Servicing Agreement dated January 23, 2019 was previously filed with Post-Effective Amendment No. 19 to its Registration Statement on Form N-1A on March 29, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419005859/fp0040675_ex9928h3.htm)

(4) [Form of Fourth Amendment to the Fund Administration Servicing Agreement was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h4.htm) .

(5) [Fifth Amendment (including Addendums) to the Fund Administration Servicing Agreement dated June 25, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h4a.htm)

(6) [Sixth Amendment (including Addendums) to the Fund Administration Servicing Agreement dated December 19, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h4b.htm)

(7) [Seventh Amendment to the Horizon Funds Fund Administration Servicing Agreement dated March 8, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h4c.htm) .

(8) [Eighth Amendment to the Horizon Funds Fund Administration Servicing Agreement dated December 20, 2022, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h4d.htm) [.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h4d.htm)

(9) [Ninth Amendment to the Horizon Funds Fund Administration Servicing Agreement dated February 1, 2025 was previously filed with Post-Effective Amendment No. 48 to its Registration Statement on Form N-1A on March 28, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006146/fp0092770-1_ex9928h4e.htm)

(10) [Tenth Amendment to the Horizon Funds Fund Administration Servicing Agreement, dated April 10, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h10.htm)

(11) [Transfer Agent Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-h2_transfer.htm)

(12) [Form of Addendum to Transfer Agent Servicing Agreement was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/trans_agr.htm) .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) [Third Amendment (including First Addendum) to the Transfer Agent Servicing Agreement dated January 23, 2019 was previously filed with Post-Effective Amendment No. 19 to its Registration Statement on Form N-1A on March 29, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419005859/fp0040675_ex9928h6.htm)

(14) [Form of Fourth Amendment to the Transfer Agent Servicing Agreement was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h8.htm)

(15) [Fifth Amendment (including Addendums) to the Transfer Agent Servicing Agreement dated June 25, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h8a.htm)

(16) [Sixth Amendment (including Addendums) to the Transfer Agent Servicing Agreement dated December 19, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h8b.htm)

(17) [Seventh Amendment to the Horizon Funds Transfer Agent Servicing Agreement dated March 8, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h8c.htm) .

(18) [Eighth Amendment to the Horizon Funds Transfer Agent Servicing Agreement dated December 20, 2022, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h8d.htm) [.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h8d.htm)

(19) [Ninth Amendment to the Horizon Funds Transfer Agent Servicing Agreement dated February 1, 2025 was previously filed with Post-Effective Amendment No. 48 to its Registration Statement on Form N-1A on March 28, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006146/fp0092770-1_ex9928h8e.htm)

(20) [Tenth Amendment to the Horizon Funds Transfer Agent Servicing Agreement, dated April 10, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h20.htm)

(21) [Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-h3_fundaccounting.htm)

(22) [Form of First Amendment to Fund Accounting Servicing Agreement was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/fundacct_agr.htm)

(23) [Second Amendment to the Fund Accounting Servicing Agreement dated January 23, 2019 was previously filed with Post-Effective Amendment No. 19 to its Registration Statement on Form N-1A on March 29, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419005859/fp0040675_ex9928h9.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24) [Form of Third Amendment to the Fund Accounting Servicing Agreement was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h12.htm)

(25) [Fourth Amendment to the Fund Accounting Servicing Agreement dated June 25, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h12a.htm)

(26) [Fifth Amendment to the Fund Accounting Servicing Agreement dated December 19, 2019 was previously filed with Post-Effective Amendment No. 27 to its Registration Statement on Form N-1A on March 27, 2020 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834420006996/fp0052006_ex9928h12b.htm)

(27) [Sixth Amendment to the Horizon Funds Fund Accounting Servicing Agreement dated March 8, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h12c.htm) .

(28) [Seventh Amendment to the Horizon Funds Fund Accounting Servicing Agreement dated December 20, 2022, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h12d.htm) [.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h12d.htm)

(29) [Eighth Amendment to the Horizon Funds Fund Accounting Servicing Agreement dated February 1, 2025 was previously filed with Post-Effective Amendment No. 48 to its Registration Statement on Form N-1A on March 28, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425006146/fp0092770-1_ex9928h12e.htm)

(30) [Ninth Amendment to the Horizon Funds Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated April 10, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h30.htm)

(31) [Shareholder Services Plan, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h13.htm)

(32) [Second Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Active Asset Allocation Fund was previously filed with Post-Effective Amendment No. 17 to its Registration Statement on Form N-1A on July 27, 2018 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834418010661/fp0034756_ex9928h8.htm)

(33) [Second Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Active Risk Assist Fund was previously filed with Post-Effective Amendment No. 17 to its Registration Statement on Form N-1A on July 27, 2018 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834418010661/fp0034756_ex9928h9.htm)

(34) [Second Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Active Income Fund was previously filed with Post-Effective Amendment No. 17 to its Registration Statement on Form N-1A on July 27, 2018 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834418010661/fp0034756_ex9928h10.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(35) [Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Active Dividend Fund was previously filed with Post-Effective Amendment No. 12 to its Registration Statement on Form N-1A on March 30, 2018 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834418004950/fp0032260_ex9928h11.htm)

(36) [Form of Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Defined Risk Fund was previously filed with Post-Effective Amendment No. 12 to its Registration Statement on Form N-1A on March 30, 2018 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834418004950/fp0032260_ex9928h12.htm)

(37) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Defensive Multi-Factor Fund (formerly known as the Horizon U.S. Risk Assist](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h19.htm) [® Fund) was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h19.htm)

(38) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Multi-Asset Income Fund was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928h21.htm)

(39) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon ESG Defensive Core Fund was previously filed with Post-Effective Amendment No. 25 to its Registration Statement on Form N-1A on December 26, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419023064/fp0048634_ex9928d21.htm)

(40) [Amended and Restated Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon ESG Defensive Core Fund, was previously filed with Post-Effective Amendment No. 33 to its Registration Statement on Form N-1A on September 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019425/fp0079901_ex9928h21a.htm) .

(41) [Fund of Funds Investment Agreement between the Registrant and The Select Sector SPDR Trust dated January 19, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h22.htm) **.** 

(42) [Fund of Funds Investment Agreement between the Registrant and SPDR S&P 500 ETF Trust and SPDR Dow Jones Industrial Average ETF Trust dated January 19, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h23.htm) **.** 

(43) [Fund of Funds Investment Agreement between the Registrant and SPDR Series Trust, SPDR Index Shares Funds and SSGA Active Trust dated January 19, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h24.htm) **.** 

(44) [Form of Fund of Funds Investment Agreement between the Registrant and DBX ETF Trust dated January 19, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h25.htm) **.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(45) [Fund of Funds Investment Agreement between the Registrant and BlackRock ETF Trust, BlackRock ETF Trust II, iShares Trust, iShares, Inc., and iShares U.S. ETF Trust dated January 19, 2022 was previously filed with Post-Effective Amendment No. 31 to its Registration Statement on Form N-1A on March 29, 2022 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834422006629/fp0074384_ex9928h26.htm) .

(46) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon U.S. Defensive Small/Mid Cap Fund, was previously filed with Post-Effective Amendment No. 34 to its Registration Statement on Form N-1A on October 3, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019666/fp0080037_ex9928h22.htm)

(47) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Horizon Tactical Income Fund, was previously filed with Post-Effective Amendment No. 34 to its Registration Statement on Form N-1A on October 3, 2022 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422019666/fp0080037_ex9928h23.htm)

(48) [Addendum to the Fund Administration Servicing Agreement (Confluence), was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928h29.htm)

(49) [Addendum to the Fund Administration Servicing Agreement – was previously filed with Post-Effective Amendment No. 41 to its Registration Statement on Form N-1A on March 27, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424006459/fp0087638-1_485bposixbrl.htm)

(50) [ETF Fund Administration Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated January 22, 2025 was previously filed with Post Effective Amendment No. 45 to its Registration Statement on Form N-1A on January 28, 2025 and incorporated by reference](https://www.sec.gov/Archives/edgar/data/1643174/000139834425001233/fp0092106-1_ex9928h31.htm) .

(51) [First Amendment to the Horizon Funds ETF Fund Administration Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated May 28, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h51.htm)

(52) [ETF Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated January 22, 2025, was previously filed with Post Effective Amendment No. 45 to its Registration Statement on Form N-1A on January 28, 2025 and incorporated by reference](https://www.sec.gov/Archives/edgar/data/1643174/000139834425001233/fp0092106-1_ex9928h32.htm) .

(53) [First Amendment to the Horizon Funds ETF Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated May 28, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h53.htm)

(54) [ETF Transfer Agent Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated January 22, 2025 was previously filed with Post Effective Amendment No. 45 to its Registration Statement on Form N-1A on January 28, 2025 and incorporated by reference](https://www.sec.gov/Archives/edgar/data/1643174/000139834425001233/fp0092106-1_ex9928h33.htm) .

(55) [First Amendment to the Horizon Funds ETF Transfer Agent Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated May 28, 2025, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928h55.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(56) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Centre American Select Equity Fund, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928h34.htm)

(57) [Form of Expense Limitation Agreement between Horizon Investments, LLC and the Registrant on behalf of the Centre Global Infrastructure Fund, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928h35.htm)

(58) [Second Amendment to the Horizon Funds ETF Fund Administration Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated October 30, 2025, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928h58.htm)

(59) [Second Amendment to the Horizon Funds ETF Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated October 30, 2025, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928h59.htm)

(60) [Second Amendment to the Horizon Funds ETF Transfer Agent Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, dated October 30, 2025, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928h60.htm)

(61) Third Amendment to the Horizon Funds ETF Fund Administration Servicing Agreement
 between the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(62) Third Amendment to the Horizon Funds ETF Fund Accounting Servicing Agreement
 between the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(63) Third Amendment to the Horizon Funds ETF Transfer Agent Servicing Agreement
 between the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(64) Form of Expense Limitation Agreement between Horizon Investments, LLC and the
 Registrant on behalf of the Anfield Universal Fixed Income Fund, **to be filed by amendment.** 

(65) [ ] Amendment to the Horizon Funds Fund Accounting Servicing Agreement between
 the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(66) [ ] Amendment to the Horizon Funds Fund Administration Servicing Agreement between
 the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(67) [ ] Amendment to the Horizon Funds Fund Transfer Agent Servicing Agreement between
 the Registrant and U.S. Bancorp Fund Services, dated [ ], **to be filed by amendment.** 

(i) (1) [Opinion and consent of counsel relating to Horizon Active Asset Allocation Fund, Horizon Active Risk Assist Fund and Horizon Active Income Fund was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-j_consentacctngfirm.htm)

(2) [Opinion and consent of counsel relating to Horizon Active Dividend Fund (formerly known as Horizon Dynamic Dividend Fund) and Horizon Defined Risk Fund was previously filed with Post-Effective Amendment No. 7 to its Registration Statement on Form N-1A on October 7, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916012241/opinion.htm)

(3) [Opinion and consent of counsel relating to Horizon Defensive Multi-Factor Fund (formerly known as Horizon U.S. Risk Assist](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928j.htm) [® Fund), Horizon ESG Defensive Core Fund (formerly known as the Horizon Sustainable Risk Assist® Fund) and Horizon Multi-Asset Income Fund was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928j.htm)

(4) [Opinion and consent of counsel relating to Horizon Expedition Plus ETF and Horizon Landmark ETF, previously filed with the Post-Effective Amendment No. 44 to the Registrant's Registration Statement on Form N-1A on January 14, 2025, is hereby incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834425000655/fp0091754-1_ex9928i4.htm)

(5) [Opinion and consent of counsel relating to Centre American Select Equity Fund and Centre Global Infrastructure Fund, previously filed with Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on Form N-14 on February 7, 2025, is hereby incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425002210/fp0092203-5_ex1611.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [Opinion and consent of counsel relating to Horizon Small/Mid Cap Core Equity ETF, Horizon International Equity ETF, and Horizon International Managed Risk ETF, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928i6.htm)

(7) Opinion and consent of counsel relating to Anfield Enhanced Market Strategy
 ETF, Anfield Universal Fixed Income ETF, Anfield Dynamic Fixed Income ETF, Anfield U.S. Equity Sector Rotation ETF, and Regents Park Hedged
 Market Strategy ETF, was previously filed with Post-Effective Amendment No. 60 to its Registration Statement on Form N-1A on March 12, 2026, and is incorporated by reference.

(8) [Opinion and consent of counsel relating to Anfield Universal Fixed Income Fund, **filed herewith.**](fp0097930-1_ex9928i8.htm)

(j) (1) [Consent of Independent Registered Public Accounting Firm (Cohen), **filed herewith.**](fp0097930-1_ex9928j1.htm)

(2) [Consent of Independent Registered Public Accounting Firm (Deloitte), **filed herewith.**](fp0097930-1_ex9928j2.htm)

(k) Financial statements omitted from prospectus – None.

(l) [Initial Subscription Agreement was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-l_initialcap.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) (1) [Distribution Plan pursuant to Rule 12b-1, was previously filed with Post-Effective Amendment No. 36 to its Registration Statement on Form N-1A on March 29, 2023 and is incorporated by reference](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928m.htm) [.](http://www.sec.gov/Archives/edgar/data/1643174/000139834423006747/fp0082790-1_ex9928m.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [Amended and Restated Distribution Plan pursuant to Rule 12b-1, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928m2.htm)

(3) [Second Amended and Restated Distribution Plan pursuant to Rule 12b-1, was previously filed with Post-Effective Amendment No. 53 to its Registration Statement on Form N-1A on June 20, 2025 and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425012033/fp0093981-1_ex9928m3.htm)

(4) [Third Amended and Restated Distribution Plan pursuant to Rule 12b-1, was previously filed with Post-Effective Amendment No. 55 to its Registration Statement on Form N-1A on November 3, 2025, and is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1643174/000139834425020219/fp0096050-1_ex9928m4.htm)

(6) [Fourth Amended and Restated Distribution Plan pursuant to Rule 12b-1, **filed herewith**](fp0097930-1_ex9928m6.htm)

(n) (1) [Rule 18f-3 Multiple Class Plan was previously filed with Post-Effective Amendment No. 22 to its Registration Statement on Form N-1A on June 25, 2019 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834419011149/fp0043204_ex9928n.htm)

(2) [Amended and Restated Rule 18f-3 Multiple Class Plan, was previously filed with Post-Effective Amendment No. 43 to its Registration Statement on Form N-1A on November 19, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424021007/fp0091008-1_ex9928n2.htm)

(o) Reserved.

(p) (1) [Code of Ethics of Horizon Funds was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-p_coetrust.htm)

(2) [Code of Ethics of Horizon Investments, LLC was previously filed with Post-Effective Amendment No. 9 to its Registration Statement on Form N-1A on January 30, 2017 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418917000448/coe.htm)

(3) [Code of Ethics of Quasar Distributors, LLC was previously filed with Pre-Effective Amendment No. 3 to its Registration Statement on Form N-1A on January 29, 2016 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000089418916007263/ex-p3_quasar.htm)

(4) [Code of Ethics of Exchange Traded Concepts, LLC, was previously filed with Post-Effective Amendment No. 42 to its Registration Statement on Form N-1A on November 1, 2024 and is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834424019834/fp0090832-1_ex9928p5.htm)

(q) [Powers of Attorney were previously filed with Post-Effective Amendment No. 32 to its Registration Statement on Form N-1A on August 1, 2022 and are incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1643174/000139834422014503/fp0078250_ex9928p4.htm)

**Item 29. Persons Controlled by or Under Common Control with Registrant**

None.

**Item 30. Indemnification**

Reference is made to Article VII, Sections 2 and 3 of the Registrant's Declaration of Trust with respect to the Registrant. The general effect of this provision is to indemnify the Trustees, officers, employees and other agents of the Trust who are parties pursuant to any proceeding by reason of their actions performed in their scope of service on behalf of the Trust.

Pursuant to Rule 484 under the Securities Act of 1933, as amended (the "Securities Act"), the Registrant furnishes the following undertaking: "Insofar as indemnification for liability arising under the Securities Act of 1933 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 Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities 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 trustee, 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 Securities Act and will be governed by the final adjudication of such issue."

**Item 31. Business and Other Connections of Investment Adviser**

Incorporated by reference to the Statement of Additional Information pursuant to Rule 411 under the Securities Act of 1933.

**Item 32. Principal Underwriter.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Quasar Distributors, LLC, the Registrant's principal underwriter, acts
 as principal underwriter for the following investment companies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Advisor Managed Portfolios

2. Capital Advisors Growth Fund, Series of Advisors Series Trust

3. Chase Growth Fund, Series of Advisors Series Trust

4. Davidson Multi Cap Equity Fund, Series of Advisors Series Trust

5. Ecofin Tax-Exempt Private Credit Fund, Inc.

6. Edgar Lomax Value Fund, Series of Advisors Series Trust

7. First Sentier American Listed Infrastructure Fund, Series of Advisors Series Trust

8. First Sentier Global Listed Infrastructure Fund, Series of Advisors Series Trust

9. Huber Large Cap Value Fund, Series of Advisors Series Trust

10. Huber Mid Cap Value Fund, Series of Advisors Series Trust

11. Huber Select Large Cap Value Fund, Series of Advisors Series Trust

12. Huber Small Cap Value Fund, Series of Advisors Series Trust

13. Logan Capital Broad Innovative Growth ETF, Series of Advisors Series Trust

14. Medalist Partners MBS Total Return Fund, Series of Advisors Series Trust

15. Medalist Partners Short Duration Fund, Series of Advisors Series Trust

16. O'Shaughnessy Market Leaders Value Fund, Series of Advisors Series Trust

17. PIA BBB Bond Fund, Series of Advisors Series Trust

18. PIA High Yield (MACS) Fund, Series of Advisors Series Trust

19. PIA High Yield Fund, Series of Advisors Series Trust

20. PIA MBS Bond Fund, Series of Advisors Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. PIA Short-Term Securities Fund, Series of Advisors Series Trust

22. Poplar Forest Cornerstone Fund, Series of Advisors Series Trust

23. Poplar Forest Partners Fund, Series of Advisors Series Trust

24. Pzena Emerging Markets Value Fund, Series of Advisors Series Trust

25. Pzena International Small Cap Value Fund, Series of Advisors Series Trust

26. Pzena International Value Fund, Series of Advisors Series Trust

27. Pzena Mid Cap Value Fund, Series of Advisors Series Trust

28. Pzena Small Cap Value Fund, Series of Advisors Series Trust

29. Reverb ETF, Series of Advisors Series Trust

30. Scharf Fund, Series of Advisors Series Trust

31. Scharf Global Opportunity Fund, Series of Advisors Series Trust

32. Scharf Multi-Asset Opportunity Fund, Series of Advisors Series Trust

33. Shenkman Capital Floating Rate High Income Fund, Series of Advisors Series Trust

34. Shenkman Capital Short Duration High Income Fund, Series of Advisors Series Trust

35. VegTech Plant-based Innovation & Climate ETF, Series of Advisors Series Trust

36. The Aegis Funds

37. Allied Asset Advisors Funds

38. Angel Oak Funds Trust

39. Angel Oak Strategic Credit Fund

40. Brookfield Infrastructure Income Fund Inc.

41. Brookfield Investment Funds

42. Buffalo Funds

43. DoubleLine Funds Trust

44. EA Series Trust (f/k/a Alpha Architect ETF Trust)

45. Ecofin Tax-Advantaged Social Impact Fund, Inc.

46. AAM Bahl & Gaynor Small/Mid Cap Income Growth ETF, Series of ETF Series Solutions

47. AAM Brentview Dividend Growth ETF, Series of ETF Series Solutions

48. AAM Low Duration Preferred and Income Securities ETF, Series of ETF Series Solutions

49. AAM S&P 500 High Dividend Value ETF, Series of ETF Series Solutions

50. AAM Sawgrass U.S. Large Cap Quality Growth ETF, Series of ETF Series Solutions

51. AAM Sawgrass U.S. Small Cap Quality Growth ETF, Series of ETF Series Solutions

52. AAM SLC Low Duration Income ETF, Series of ETF Series Solutions

53. AAM Transformers ETF, Series of ETF Series Solutions

54. AlphaMark Actively Managed Small Cap ETF, Series of ETF Series Solutions

55. Aptus Collared Investment Opportunity ETF, Series of ETF Series Solutions

56. Aptus Defined Risk ETF, Series of ETF Series Solutions

57. Aptus Drawdown Managed Equity ETF, Series of ETF Series Solutions

58. Aptus Enhanced Yield ETF, Series of ETF Series Solutions

59. Aptus International Enhanced Yield ETF, Series of ETF Series Solutions

60. Aptus Large Cap Enhanced Yield ETF, Series of ETF Series Solutions

61. Aptus Large Cap Upside ETF, Series of ETF Series Solutions

62. Bahl & Gaynor Dividend ETF, Series of ETF Series Solutions

63. Bahl & Gaynor Income Growth ETF, Series of ETF Series Solutions

64. Bahl & Gaynor Small Cap Dividend ETF, Series of ETF Series Solutions

65. BTD Capital Fund, Series of ETF Series Solutions

66. Carbon Strategy ETF, Series of ETF Series Solutions

67. ClearShares OCIO ETF, Series of ETF Series Solutions

68. ClearShares Piton Intermediate Fixed Income Fund, Series of ETF Series Solutions

69. ClearShares Ultra-Short Maturity ETF, Series of ETF Series Solutions

70. Distillate International Fundamental Stability & Value ETF, Series of ETF Series Solutions

71. Distillate Small/Mid Cash Flow ETF, Series of ETF Series Solutions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;72. Distillate U.S. Fundamental Stability & Value ETF, Series of ETF Series Solutions

73. ETFB Green SRI REITs ETF, Series of ETF Series Solutions

74. Hoya Capital High Dividend Yield ETF, Series of ETF Series Solutions

75. Hoya Capital Housing ETF, Series of ETF Series Solutions

76. LHA Market State Alpha Seeker ETF, Series of ETF Series Solutions

77. LHA Market State Tactical Beta ETF, Series of ETF Series Solutions

78. LHA Market State Tactical Q ETF, Series of ETF Series Solutions

79. LHA Risk-Managed Income ETF, Series of ETF Series Solutions

80. McElhenny Sheffield Managed Risk ETF, Series of ETF Series Solutions

81. NETLease Corporate Real Estate ETF, Series of ETF Series Solutions

82. Opus Small Cap Value ETF, Series of ETF Series Solutions

83. Range Cancer Therapeutics ETF, Series of ETF Series Solutions

84. Roundhill Acquirers Deep Value ETF, Series of ETF Series Solutions

85. The Acquirers Fund, Series of ETF Series Solutions

86. The Brinsmere Fund – Conservative ETF, Series of ETF Series Solutions

87. The Brinsmere Fund – Growth ETF, Series of ETF Series Solutions

88. U.S. Global GO GOLD and Precious Metal Miners ETF, Series of ETF Series Solutions

89. U.S. Global JETS ETF, Series of ETF Series Solutions

90. U.S. Global Sea to Sky Cargo ETF, Series of ETF Series Solutions

91. US Vegan Climate ETF, Series of ETF Series Solutions

92. Vest 10 Year Interest Rate Hedge ETF, Series of ETF Series Solutions

93. Vest 2 Year Interest Rate Hedge ETF, Series of ETF Series Solutions

94. First American Funds Trust

95. FundX Investment Trust

96. The Glenmede Fund, Inc.

97. The GoodHaven Funds Trust

98. Harding, Loevner Funds, Inc.

99. Hennessy Funds Trust

100. Horizon Funds

101. Hotchkis & Wiley Funds

102. Intrepid Capital Management Funds Trust

103. Jacob Funds Inc.

104. The Jensen Quality Growth Fund Inc.

105. Kirr, Marbach Partners Funds, Inc.

106. Leuthold Funds, Inc.

107. Core Alternative ETF, Series of Listed Funds Trust

108. Wahed Dow Jones Islamic World ETF, Series of Listed Funds Trust

109. Wahed FTSE USA Shariah ETF, Series of Listed Funds Trust

110. LKCM Funds

111. LoCorr Investment Trust

112. MainGate Trust

113. ATAC Rotation Fund, Series of Managed Portfolio Series

114. Coho Relative Value Equity Fund, Series of Managed Portfolio Series

115. Coho Relative Value ESG Fund, Series of Managed Portfolio Series

116. Cove Street Capital Small Cap Value Fund, Series of Managed Portfolio Series

117. Ecofin Global Water ESG Fund, Series of Managed Portfolio Series

118. Jackson Square Large-Cap Growth Fund, Series of Managed Portfolio Series

119. Jackson Square SMID-Cap Growth Fund, Series of Managed Portfolio Series

120. Kensington Active Advantage Fund, Series of Managed Portfolio Series

121. Kensington Defender Fund, Series of Managed Portfolio Series

122. Kensington Dynamic Growth Fund, Series of Managed Portfolio Series

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123. Kensington Hedged Premium Income ETF, Series of Managed Portfolio Series

124. Kensington Managed Income Fund, Series of Managed Portfolio Series

125. LK Balanced Fund, Series of Managed Portfolio Series

126. Muhlenkamp Fund, Series of Managed Portfolio Series

127. Nuance Concentrated Value Fund, Series of Managed Portfolio Series

128. Nuance Mid Cap Value Fund, Series of Managed Portfolio Series

129. Olstein All Cap Value Fund, Series of Managed Portfolio Series

130. Olstein Strategic Opportunities Fund, Series of Managed Portfolio Series

131. Port Street Quality Growth Fund, Series of Managed Portfolio Series

132. Principal Street High Income Municipal Fund, Series of Managed Portfolio Series

133. Principal Street Short Term Municipal Fund, Series of Managed Portfolio Series

134. Reinhart Genesis PMV Fund, Series of Managed Portfolio Series

135. Reinhart International PMV Fund, Series of Managed Portfolio Series

136. Reinhart Mid Cap PMV Fund, Series of Managed Portfolio Series

137. Tortoise Energy Infrastructure and Income Fund, Series of Managed Portfolio Series

138. Tortoise Energy Infrastructure Total Return Fund, Series of Managed Portfolio Series

139. Tortoise North American Pipeline Fund, Series of Managed Portfolio Series

140. Tremblant Global ETF, Series of Managed Portfolio Series

141. Greenspring Income Opportunities Fund, Series of Manager Directed Portfolios

142. Hood River International Opportunity Fund, Series of Manager Directed Portfolios

143. Hood River New Opportunities Fund, Series of Manager Directed Portfolios

144. Hood River Small-Cap Growth Fund, Series of Manager Directed Portfolios

145. Mar Vista Strategic Growth Fund, Series of Manager Directed Portfolios

146. SanJac Alpha Core Plus Bond ETF, Series of Manager Directed Portfolios

147. SanJac Alpha Low Duration ETF, Series of Manager Directed Portfolios

148. SWP Growth & Income ETF, Series of Manager Directed Portfolios

149. Vert Global Sustainable Real Estate ETF, Series of Manager Directed Portfolios

150. Mason Capital Fund Trust

151. Matrix Advisors Funds Trust

152. Matrix Advisors Value Fund, Inc.

153. Monetta Trust

154. Nicholas Equity Income Fund, Inc.

155. Nicholas Fund, Inc.

156. Nicholas II, Inc.

157. Nicholas Limited Edition, Inc.

158. Oaktree Diversified Income Fund Inc.

159. Permanent Portfolio Family of Funds

160. Perritt Funds, Inc.

161. Procure ETF Trust II

162. Professionally Managed Portfolios

163. Prospector Funds, Inc.

164. Provident Mutual Funds, Inc.

165. Abbey Capital Futures Strategy Fund, Series of The RBB Fund, Inc.

166. Abbey Capital Multi-Asset Fund, Series of The RBB Fund, Inc.

167. Adara Smaller Companies Fund, Series of The RBB Fund, Inc.

168. Aquarius International Fund, Series of The RBB Fund, Inc.

169. Boston Partners All Cap Value Fund, Series of The RBB Fund, Inc.

170. Boston Partners Emerging Markets Dynamic Equity Fund, Series of The RBB Fund, Inc.

171. Boston Partners Global Equity Fund, Series of The RBB Fund, Inc.

172. Boston Partners Global Sustainability Fund, Series of The RBB Fund, Inc.

173. Boston Partners Long/Short Equity Fund, Series of The RBB Fund, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;174. Boston Partners Long/Short Research Fund, Series of The RBB Fund, Inc.

175. Boston Partners Small Cap Value Fund II, Series of The RBB Fund, Inc.

176. Campbell Systematic Macro Fund, Series of The RBB Fund, Inc.

177. F/m 10-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

178. F/m 2-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

179. F/m 3-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

180. F/m Emerald Life Sciences Innovation ETF, Series of The RBB Fund, Inc.

181. F/m Opportunistic Income ETF, Series of The RBB Fund, Inc.

182. Motley Fool 100 Index ETF, Series of The RBB Fund, Inc.

183. Motley Fool Capital Efficiency 100 Index ETF, Series of The RBB Fund, Inc.

184. Motley Fool Global Opportunities ETF, Series of The RBB Fund, Inc.

185. Motley Fool Mid-Cap Growth ETF, Series of The RBB Fund, Inc.

186. Motley Fool Next Index ETF, Series of The RBB Fund, Inc.

187. Motley Fool Small-Cap Growth ETF, Series of The RBB Fund, Inc.

188. Optima Strategic Credit Fund, Series of The RBB Fund, Inc.

189. SGI Dynamic Tactical ETF, Series of The RBB Fund, Inc.

190. SGI Enhanced Core ETF, Series of The RBB Fund, Inc.

191. SGI Enhanced Global Income ETF, Series of The RBB Fund, Inc.

192. SGI Global Equity Fund, Series of The RBB Fund, Inc.

193. SGI Peak Growth Fund, Series of The RBB Fund, Inc.

194. SGI Prudent Growth Fund, Series of The RBB Fund, Inc.

195. SGI Small Cap Core Fund, Series of The RBB Fund, Inc.

196. SGI U.S. Large Cap Core ETF, Series of The RBB Fund, Inc.

197. SGI U.S. Large Cap Equity Fund, Series of The RBB Fund, Inc.

198. SGI U.S. Small Cap Equity Fund, Series of The RBB Fund, Inc.

199. US Treasury 10 Year Note ETF, Series of The RBB Fund, Inc.

200. US Treasury 12 Month Bill ETF, Series of The RBB Fund, Inc.

201. US Treasury 2 Year Note ETF, Series of The RBB Fund, Inc.

202. US Treasury 20 Year Bond ETF, Series of The RBB Fund, Inc.

203. US Treasury 3 Month Bill ETF, Series of The RBB Fund, Inc.

204. US Treasury 3 Year Note ETF, Series of The RBB Fund, Inc.

205. US Treasury 30 Year Bond ETF, Series of The RBB Fund, Inc.

206. US Treasury 5 Year Note ETF, Series of The RBB Fund, Inc.

207. US Treasury 6 Month Bill ETF, Series of The RBB Fund, Inc.

208. US Treasury 7 Year Note ETF, Series of The RBB Fund, Inc.

209. WPG Partners Select Hedged Fund, Series of The RBB Fund, Inc.

210. WPG Partners Select Small Cap Value Fund, Series of The RBB Fund, Inc.

211. WPG Partners Small Cap Value Diversified Fund, Series of The RBB Fund, Inc.

212. The RBB Fund Trust

213. RBC Funds Trust

214. Rockefeller Municipal Opportunities Fund

215. Series Portfolios Trust

216. Thompson IM Funds, Inc.

217. Tortoise Capital Series Trust

218. TrimTabs ETF Trust

219. Bright Rock Mid Cap Growth Fund, Series of Trust for Professional Managers

220. Bright Rock Quality Large Cap Fund, Series of Trust for Professional Managers

221. CrossingBridge Low Duration High Income Fund, Series of Trust for Professional Managers

222. CrossingBridge Nordic High Income Bond Fund, Series of Trust for Professional Managers

223. CrossingBridge Responsible Credit Fund, Series of Trust for Professional Managers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;224. CrossingBridge Ultra-Short Duration Fund, Series of Trust for Professional Managers

225. RiverPark Strategic Income Fund, Series of Trust for Professional Managers

226. Dearborn Partners Rising Dividend Fund, Series of Trust for Professional Managers

227. Jensen Global Quality Growth Fund, Series of Trust for Professional Managers

228. Jensen Quality MidCap Fund, Series of Trust for Professional Managers

229. Rockefeller Climate Solutions Fund, Series of Trust for Professional Managers

230. Rockefeller US Small Cap Core Fund, Series of Trust for Professional Managers

231. USQ Core Real Estate Fund

232. Wall Street EWM Funds Trust

233. Wisconsin Capital Funds, Inc.

(b) To the best of Registrant's knowledge, the directors and executive officers of Quasar Distributors, LLC are as follows:

---

| | | | |
|:---|:---|:---|:---|
| Name | Address | Position with Underwriter | Position with Registrant |
| Teresa Cowan | Three Canal Plaza, Suite 100, <br> Portland, ME 04101 | President/Manager |  |
| Chris Lanza | Three Canal Plaza, Suite 100, <br> Portland, ME 04101 | Vice President |  |
| Kate Macchia | Three Canal Plaza, Suite 100, <br> Portland, ME 04101 | Vice President |  |
| Weston Sommers | Three Canal Plaza, Suite 100, <br> Portland ME 04101 | Financial and Operations Principal and Chief Financial Officer |  |
| Kelly B. Whetstone | Three Canal Plaza, Suite 100, <br> Portland, ME 04101 | Secretary |  |
| Susan L. LaFond | Three Canal Plaza, Suite 100, <br> Portland, ME 04101 | Vice President and Chief Compliance Officer and Treasurer |  |

---

(c) Not applicable.

**Item 33. Location of Accounts and Records**

The books, accounts and other documents required by Section 31(a) under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder will be maintained at the offices of:

Horizon Investments, LLC, 6210 Ardrey Kell Road, Suite 300, Charlotte, North Carolina 28277 (records relating to its function as investment adviser of Horizon Funds).

Exchange Traded Concepts, LLC, 10900 Hefner Pointe Dr #400, Oklahoma City, Oklahoma 73120 (records relating to its function as investment sub-adviser of Horizon Funds).

U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (records relating to its function as administrator, transfer agent and dividend disbursing agent).

U.S. Bank, N.A., 1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin, 53212 (records relating to its function as custodian).

Quasar Distributors, LLC, Three Canal Plaza, Suite 100, Portland, ME 04101 (records relating to its function as distributor).

**Item 34. Management Services**

Not applicable.

**Item 35. Undertakings**

The Registrant hereby undertakes to furnish each person to whom a Prospectus for one or more of the series of the Registrant is delivered with a copy of the relevant latest annual report to shareholders, upon request and without charge.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of this Amendment to the Registration Statement under Rule 485(b) under the Securities Act of 1933, and the Registrant has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Charlotte, and State of North Carolina, on March 12, 2026.

---

| | |
|:---|:---|
| **Horizon Funds** | **Horizon Funds** |
| By: | /s/ John Drahzal |
|  | John Drahzal |
|  | President |

---

Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date(s) indicated.

---

| | | |
|:---|:---|:---|
| Signature | Title | Date |
| /s/ John Drahzal | President and Trustee | March 12, 2026 |
| John Drahzal |  |  |
| John W. Davidson\* | Trustee | March 12, 2026 |
| John W. Davidson |  |  |
| Todd W. Gaylord\* | Trustee | March 12, 2026 |
| Todd W. Gaylord |  |  |
| Thomas W. Okel\* | Trustee | March 12, 2026 |
| Thomas W. Okel |  |  |
| /s/ Steve Terry | Treasurer | March 12, 2026 |
| Steve Terry |  |  |

---

---

| | |
|:---|:---|
| \*By | /s/ Matthew Chambers |
|  | Matthew Chambers |

---

\* As Attorney-in-Fact pursuant to Powers of Attorney previously filed and incorporated herein by reference.

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [(i)(8)](fp0097930-1_ex9928i8.htm) | [Opinion and consent of counsel relating to Anfield Universal Fixed Income Fund](fp0097930-1_ex9928i8.htm) |
| [(j)(1)](fp0097930-1_ex9928j1.htm) | [Consent of Independent Registered Public Accounting Firm (Cohen)](fp0097930-1_ex9928j1.htm) |
| [(j)(2)](fp0097930-1_ex9928j2.htm) | [Consent of Independent Registered Public Accounting Firm (Deloitte)](fp0097930-1_ex9928j2.htm) |
| [(m)(6)](fp0097930-1_ex9928m6.htm) | [Fourth Amended and Restated Distribution Plan pursuant to Rule 12b-1](fp0097930-1_ex9928m6.htm) |

---

## Exhibit 99.28

---

| | | |
|:---|:---|:---|
| ![](image_001.jpg) | **Kilpatrick Townsend & Stockton LLP**<br> ktslaw.com | 1001 West Fourth Street <br> Winston-Salem, NC 27101-2400 |

---

March 12, 2026

Horizon Funds

6210 Ardrey Kell Road, Suite 300

Charlotte, NC 28277

Ladies and Gentlemen:

We have served as counsel for Horizon Funds, a Delaware statutory trust (the "Trust") registered as an investment company under the Investment Company Act of 1940, as amended (File No. 811-23063), with an indefinite number of shares of the Trust registered for offer and sale under the Securities Act of 1933, as amended, pursuant to the Trust's Registration Statement on Form N-1A (No. 333-025411) (the "Registration Statement"), in connection with the issuance and sale by the Trust of its shares of beneficial interest (the "Shares") of Anfield Universal Fixed Income Fund (the "Fund").

We have examined and are familiar with originals or copies (certified or otherwise identified to our satisfaction) of such documents, corporate records and other instruments relating to the organization of the Trust and to the authorization and issuance of shares of the Fund, as we have deemed necessary and advisable.

In rendering this opinion, we have reviewed and relied upon a copy of the Trust's Certificate of Trust, the Trust's Declaration of Trust, the Trust's By-Laws, the Trust's record of the various actions by the Trustees thereof, and all such agreements, certificates of public officials, certificates and oral representations of officers and representatives of the Trust and others, and such other documents, papers, statutes and authorities as we have deemed necessary and advisable. In our examination we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as certified or photostatic copies.

Based upon the foregoing, we are of the opinion that, after registration of the Fund is effective for purposes of federal and applicable state securities laws, the Shares, if issued in accordance with the then current Prospectus and Statement of Additional Information relating thereto in the Registration Statement, will be legally issued, fully paid and non-assessable under the laws of the State of Delaware.

We do not express an opinion with respect to any laws other than the laws of the State of Delaware applicable to the issuance of shares of beneficial interest in a statutory trust. Accordingly, our opinion does not extend to, among other laws, the federal securities laws or the securities or "blue sky" laws of Delaware or any other jurisdiction. We are rendering this opinion as members of the State Bar of North Carolina.

This opinion is intended only for your use in connection with the offering of the Shares and may not be relied upon by any person other than you and the shareholders of the Fund. We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to our firm and the opinion set forth herein in the Registration Statement.

---

| |
|:---|
| Sincerely, |
| /s/ **KILPATRICK TOWNSEND & STOCKTON LLP** |

---

## Exhibit 99.28

![](image_004.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 Anfield Universal Fixed Income Fund, a series of Horizon Funds, under the headings "Disclosure of Portfolio Holdings" and "Independent Registered Public Accounting Firm" in the Statement of Additional Information.

/s/ Cohen & Company, Ltd.

COHEN & COMPANY, LTD.

Cleveland, Ohio

March 12, 2026

![](image_005.jpg)

## Exhibit 99.28

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in this Post-Effective Amendment to Registration Statement on Form N-1A of our report dated December 30, 2025 relating to the financial statements and financial highlights of Anfield Universal Fixed Income Fund, appearing in the Annual Report on Form N-CSR of the Fund for the year ended October 31, 2025, and to the reference to us under the heading "Financial Highlights", which is part of such Registration Statement.

![](image_002.jpg)

Costa Mesa, California

March 12, 2026

## Exhibit 99.28

**HORIZON FUNDS**

**DISTRIBUTION PLAN – RULE 12b-1**

This Distribution Plan (the "Plan") is adopted in accordance with Rule 12b–1 (the "Rule") under the Investment Company Act of 1940, as amended (the "1940 Act"), by Horizon Funds, a Delaware statutory trust (the "Trust"), with respect to each series of its shares and each class of shares of such series (if separate classes shall be designated) identified on <u>Schedule A</u> attached hereto and incorporated herein (each such series covered by this Plan, a "Fund" and each such class, a "Class").

As a general rule, an investment company may not finance any activity primarily intended to result in the sale of its shares, except pursuant to the Rule. Uncertainty may exist from time to time with respect to whether payments to be made by the Trust to Quasar Distributors, LLC (the "Distributor"), or to other firms under agreements with respect to a Fund or Class, may be deemed to constitute impermissible distribution expenses. Accordingly, payments by the Trust and expenditures made by others out of monies received from the Trust which are later deemed to be for the financing of any activity primarily intended to result in the sale of Fund shares shall be deemed to have been made pursuant to the Plan.

The provisions of the Plan are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Annual Fee</u>. The Trust will pay to the Distributor an annual fee for the Distributor's services in such capacity, including its expenses in connection with the promotion and distribution of each Fund's or Class's shares. The annual fee paid to the Distributor under the Plan will be calculated daily and paid monthly by each Fund or Class on the first day of each month based on the average daily net assets of each Fund or Class not to exceed the lesser of (i) the "Maximum Authorized Rate" and (ii) the "Currently Approved Rate" (each as set forth opposite such Fund's or Class's name on Exhibit A attached hereto). The "Maximum Authorized Rate" shall mean the maximum rate authorized by the Board of Trustees of the Trust under this Plan and the "Currently Approved Rate" shall mean that portion of the Maximum Authorized Rate that is currently authorized for payment by the Fund or Class, as may be amended from time to time by the Board of Trustees of the Trust. The fees are not tied exclusively to actual distribution and service expenses, and the fee may exceed the expenses actually incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Expenses Covered by the Plan</u>. The fees paid under Section 1 of the Plan may be used to pay for any expenses primarily intended to result in the sale of shares of the Funds and Classes ("distribution services"), including, but not limited to: (a) costs of payments, including incentive compensation, made to agents for and consultants to the Distributor, including pension administration firms that provide distribution services and broker–dealers that engage in the distribution of the shares of the Funds and Classes; (b) payments made to, and expenses of, persons who provide support services in connection with the distribution of shares of a Fund or a Class including, but not limited to, personnel of the Distributor and its affiliates, office space and equipment, telephone facilities, answering routine inquiries regarding the Funds, processing shareholder transactions and providing any other shareholder services not otherwise provided by the Trust's transfer agency or other servicing arrangements; (c) payments made pursuant to any dealer agreements between the Distributor and certain broker–dealers, financial institutions and other service providers; (d) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; (e) costs of printing and distributing prospectuses, statements of additional information and reports of the Funds to prospective shareholders of the Funds; (f) costs involved in preparing, printing and distributing sales literature pertaining to the Funds; and (g) costs involved in obtaining whatever information, analyses and reports with respect to marketing and promotional activities that the Trust may, from time to time, deem advisable. Such expenses shall be deemed incurred whether paid directly by the Distributor or by a third party to the extent reimbursed therefor by the Distributor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Written Reports</u>. The Distributor shall furnish to the Board of Trustees of the Trust, for its review, on at least a quarterly basis, a written report of the monies paid to it under the Plan with respect to each Fund and each Class, and shall furnish the Board of Trustees of the Trust with such other information as the Board of Trustees may reasonably request in connection with the payments made under the Plan in order to enable the Board of Trustees to make an informed determination of whether the Plan should be continued as to each Fund or Class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Termination</u>. The Plan may be terminated as to any Fund or Class at any time, without penalty, by vote of a majority of the outstanding voting securities of the Fund or Class or by vote of a majority of the Trustees who are not interested persons of the Trust and have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan (the "independent Trustees"), and any dealer agreement under the Plan may be likewise terminated on not more than sixty (60) days' written notice. The Plan and any dealer agreement under the Plan will also terminate automatically in the event of their assignment, as that term is defined in the 1940 Act. Once terminated, no further payments shall be made under the Plan or any dealer agreement under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Amendments</u>. The Plan may not be amended to increase materially the amount to be spent for distribution services with respect to shares of a Fund or a Class pursuant to Section 1 hereof without approval by a majority of the outstanding voting securities of the Fund or Class. All material amendments to the Plan shall be approved by a majority of the independent Trustees by vote cast in person at a meeting called for the purpose of voting on any such amendment and by the Trust's Board of Trustees, as required by Rule 12b–1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Selection of Independent Trustees</u>. So long as the Plan is in effect, the selection and nomination of the Trustees who are not interested persons of the Trust shall be committed to the discretion of such Trustees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Effective Date of Plan</u>. The Plan shall take effect as to a Fund or Class at such time as it has received requisite Trustee and shareholder approval (if any) with respect to such Fund or Class and, unless sooner terminated, shall continue in effect for such Fund or Class for a period of more than one year from such date of its effectiveness only so long as such continuance is specifically approved at least annually by the Board of Trustees of the Trust, including the independent Trustees, cast in person at a meeting called for the purpose of voting on such continuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Preservation of Materials</u>. The Trust will preserve copies of the Plan, any agreements relating to the Plan and any report made pursuant to Section 3 above, for a period of not less than six years (the first two years in an easily accessible place) from the date of the Plan, agreement or report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Meanings of Certain Terms</u>. As used in the Plan, the terms "assignment," "interested person," and "majority of the outstanding voting securities" will be deemed to have the same meaning that those terms have under the 1940 Act and the rules and regulations under the 1940 Act, subject to any exemption that may be granted to the Trust under the 1940 Act by the Securities and Exchange Commission.

**<u>SCHEDULE A</u>**

ANNUAL FEES PAID WITH RESPECT TO THE

RULE 12b–1 DISTRIBUTION PLAN OF

HORIZON FUNDS

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| | | |
|:---|:---|:---|
| **Fund** | **Maximum Authorized Rate** | **Currently Approved Rate** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON ACTIVE ASSET ALLOCATION FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> N/A<br> N/A | <br> 0.25%<br> N/A<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON ACTIVE INCOME FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> N/A<br> N/A | <br> 0.25%<br> N/A<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON ACTIVE RISK ASSIST FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> N/A<br> N/A | <br> 0.25%<br> N/A<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON EQUITY PREMIUM INCOME FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON DEFINED RISK FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON MULTI-FACTOR U.S. EQUITY FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON DEFENSIVE CORE FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON MULTI-FACTOR SMALL/MID CAP FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HORIZON TACTICAL FIXED INCOME FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| HORIZON EXPEDITION PLUS ETF | 0.25% | 0.00% |
| HORIZON LANDMARK LIQUIDITY ETF | 0.25% | 0.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CENTRE SELECT EQUITY FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CENTRE GLOBAL INFRASTRUCTURE FUND<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| Horizon Dividend Income ETF | 0.25% | 0.00% |
| Horizon Core Equity ETF | 0.25% | 0.00% |
| Horizon Managed Risk ETF | 0.25% | 0.00% |
| Horizon Core Bond ETF | 0.25% | 0.00% |
| Horizon Flexible Income ETF | 0.25% | 0.00% |
| Horizon Nasdaq-100 Defined Risk Fund | 0.25% | 0.00% |
| Horizon Digital Frontier ETF | 0.25% | 0.00% |
| HORIZON SMALL/MID CAP CORE EQUITY ETF | 0.25% | 0.00% |
| HORIZON INTERNATIONAL EQUITY ETF | 0.25% | 0.00% |

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| | | |
|:---|:---|:---|
| HORIZON INTERNATIONAL MANAGED RISK ETF | 0.25% | 0.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Anfield universal fixed income fund<br> Advisor Class<br> Investor Class<br> Institutional Class | <br> 0.25%<br> 0.10%<br> N/A | <br> 0.25%<br> 0.10%<br> N/A |
| ANFIELD ENHANCED MARKET STRATEGY ETF | 0.25% | 0.00% |
| REGENTS PARK HEDGED MARKET STRATEGY ETF | 0.25% | 0.00% |
| ANFIELD U.S. EQUITY SECTOR ROTATION ETF | 0.25% | 0.00% |
| ANFIELD UNIVERSAL FIXED INCOME ETF | 0.25% | 0.00% |
| ANFIELD DYNAMIC FIXED INCOME ETF | 0.25% | 0.00% |

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***As amended by the Board of Trustees on January 27, 2026***