AVIEMORE FUNDS
PROXY VOTING POLICIES
(Adopted
Pursuant to rules
established by the Securities and Exchange Commission (the “Commission”), under the Investment Company Act of
1940, as amended, the Board of Trustees of Aviemore
Funds (the “Trust”) has adopted the following formal, written guidelines for
proxy voting by the Trust. The Board of
Trustees of the Trust oversees voting policies and decisions for each series of
the Trust (the “Funds”).
Each Fund
exercises its proxy voting rights with regard to the companies in the Fund’s
investment portfolio, with the goals of maximizing the value of the Fund’s
investments, promoting accountability of a company’s management and board of
directors to its shareholders, aligning the interests of management with those
of shareholders, and increasing transparency of a company’s business and
operations.
In
general, the Board of Trustees of the Trust believes that each Fund’s
investment adviser, or sub-adviser, if applicable, which selects the individual
companies that are part of the Fund’s portfolio, is the most knowledgeable and
best suited to make decisions about proxy votes. Therefore, the Trust defers to and relies on the
Funds’ investment advisers or sub-advisers, as appropriate, to make decisions
on casting proxy votes.
In some
instances, an adviser (or sub-adviser) may be asked to cast a proxy vote that
presents a conflict between the interests of a Fund’s shareholders, and those
of the adviser (or sub-adviser) or an affiliated person of the adviser (or
sub-adviser).
In such a case, the adviser (or sub-adviser) is instructed to abstain
from making a voting decision and to forward all necessary proxy voting
materials to the Trust to enable the Board of Trustees to make a voting decision. The adviser (or sub-adviser) shall make a written recommendation of the voting decision
to the Board of Trustees, which shall include: (i) an
explanation of why it has a conflict of interest; (ii) the reasons for its
recommendation; and (iii) an explanation of why the recommendation is
consistent with the adviser’s (or
sub-adviser’s) proxy voting policies. The Board of Trustees shall make the proxy
voting decision that in its judgment, after reviewing the recommendation of the
adviser (or sub-adviser), is most consistent with the adviser’s (or
sub-adviser’s) proxy voting policies and in the best
interests of Fund shareholders. When the
Board of Trustees is required to make a proxy
voting decision, only the Trustees without a conflict of interest with regard
to the security in question or the matter to voted
upon shall be permitted to participate in the decision of how the Fund’s vote
will be cast.
A
copy of these Proxy Voting Policies and Procedures are available, without
charge, upon request, by calling the Trust’s toll-free telephone number at
(800)239-9136, on the Trust’s website at http://www.aviemorefund.com, and on the
Commission’s website at http://www.sec.gov.
The Trust will send a copy of the Trust’s Proxy Voting Policies and
Procedures within three business days of receipt of a request, by first-class
mail or other means designed to ensure equally prompt delivery.
AVIEMORE ASSET
MANAGEMENT, LLC.
PROXY VOTING
POLICIES
Approved
Pursuant to the recent adoption
by the Securities and Exchange Commission (the “Commission”)
of Rule 206(4)-6 (17
In order to
fulfill its responsibilities under the Act, Aviemore
Asset Management, Inc. (hereinafter “we” or “our”) has adopted the following
policies and procedures for proxy voting with regard to companies in investment portfolios
of our clients.
The key
objectives of these policies and procedures recognize that a company’s
management is entrusted with the day-to-day operations and longer term
strategic planning of the company, subject to the oversight of the company’s
board of directors. While “ordinary business matters”
are primarily the responsibility of management and should be approved solely by
the corporation’s board of directors, these objectives also recognize that the
company’s shareholders must have final say over how management and directors
are performing, and how shareholders’ rights and ownership interests are
handled, especially when matters could have substantial economic implications to the shareholders.
Therefore, we will pay
particular attention to the following matters in exercising our proxy voting responsibilities
as a fiduciary for our clients:
Accountability. Each company should
have effective means in place to hold those entrusted with running a company’s
business accountable for their actions.
Management of a company should be accountable to its board of directors
and the board should be accountable to shareholders.
Alignment of Management and Shareholder Interests. Each company should endeavor to align the
interests of management and the board of directors with the interests of the
company’s shareholders. For example, we generally believe that compensation
should be designed to reward management for doing a
good job of creating value for the shareholders of the company.
Transparency. Promotion of timely
disclosure of important information about a company’s business operations and
financial performance enables investors to evaluate the performance of a
company and to make informed decisions about the purchase and sale of a
company’s securities.
DECISION METHODS
We generally
believe that the individual portfolio managers that invest in and track
particular companies are the most knowledgeable and best suited to make
decisions with regard to proxy votes.
Therefore, we rely on those individuals to make the final decisions on
how to cast proxy votes.
No set of proxy
voting guidelines can anticipate all situations that may arise. In special
cases, we may seek insight from other knowledgeable individuals and analysts on
how a particular proxy proposal will impact the financial prospects of a
company, and vote accordingly.
In some
instances, a proxy vote may present a conflict between the interests of a
client, on the one hand, and our interests or the interests of a person
affiliated with us, on the other. In
such a case, the disinterested trustees will decide how to vote the proxies.
SUMMARY OF PROXY
VOTING GUIDELINES
Election of the Board of
Directors
We believe that good
corporate governance generally starts with a board composed primarily of
independent directors, unfettered by significant ties to management, all of
whose members are elected annually. In
addition, key board committees should be entirely independent.
The election of
a company’s board of directors is one of the most fundamental rights held by
shareholders. Because a classified board
structure prevents shareholders from electing a full slate of directors
annually, we
will generally support efforts to declassify boards or other measures that
permit shareholders to remove a majority of directors at any time, and will generally oppose
efforts to adopt classified board structures.
Approval of Independent
Auditors
We believe that the
relationship between a company and its auditors should be limited primarily to
the audit engagement, although it may include certain closely related
activities that do not raise an appearance of impaired independence.
We will evaluate on a
case-by-case basis instances in which the audit firm has a substantial
non-audit relationship with a company to determine whether we believe
independence has been, or could be, compromised.
Equity-based compensation
plans
We believe that
appropriately designed equity-based compensation plans, approved by shareholders,
can be an effective way to align the interests of shareholders and the
interests of directors, management, and employees by providing incentives to increase
shareholder value. Conversely, we are opposed to plans that
substantially dilute ownership interests in the company, provide participants
with excessive awards, or have inherently objectionable structural features.
We will generally support
measures intended to increase stock ownership by executives and the use of
employee stock purchase plans to increase company stock ownership by
employees. These may include:
1. Requiring
senior executives to hold stock in a company.
2. Requiring
stock acquired through option exercise to be held for a certain period of time.
3. Using
restricted stock grants instead of options.
4. Awards based on non-discretionary grants specified by the
plan’s terms rather than subject to management’s discretion.
While we
evaluate plans on a case-by-case basis, we will generally oppose plans that have the following
features:
1. Annual
option grants that would exceed 2% of outstanding shares.
2. Ability
to issue options with an exercise price below the stock’s current market price.
3. Automatic
share replenishment (“evergreen”) feature.
4. Authorization to permit the board of directors to materially
amend a plan without shareholder approval.
5. Authorizes the re-pricing of stock
options or the cancellation and exchange of options without shareholder
approval.
These are guidelines, and we
consider other factors, such as the nature of the industry and size of the
company, when assessing a plan’s impact on ownership interests.
Corporate Structure
We view the
exercise of shareholders’ rights, including the rights to act by written
consent, to call special meetings and to remove directors, to be fundamental to
good corporate governance.
Because classes
of common stock with unequal voting rights limit the rights of certain
shareholders, we
generally believe that shareholders should have voting power equal to their
equity interest in the company and should be able to approve or reject changes
to a company’s by-laws by a simple majority vote.
Because the
requirement of a supermajority vote can limit the ability of shareholders to
effect change, we
will support proposals to remove super-majority (typically from 66.7% to 80%)
voting requirements for certain types of proposals and oppose proposals to
impose super-majority requirements.
We will generally support the ability of
shareholders to cumulate their votes for the election of directors.
Shareholder
Rights Plans
While we
recognize that there are arguments both in favor of and against shareholder
rights plans, also known as poison pills, such measures may tend to entrench
current management, which we generally consider to have a negative impact on
shareholder value.
We believe the
best approach is for a company to seek shareholder approval of rights plans and
we generally support shareholder resolutions requesting that shareholders be
given the opportunity to vote on the adoption of rights plans.
We will
generally be more inclined to support a shareholder rights plan if the plan (i)
has short-term “sunset”
provisions, (ii) is linked to a business strategy that will likely result in
greater value for shareholders, (iii) requires shareholder approval to
reinstate the expired plan or adopt a new plan at the end of its term, and (iv) is subject to
mandatory review by a committee of independent directors.
CLIENT INFORMATION
A
copy of these Proxy Voting Policies and Procedures is available to our clients,
without charge, upon request, by calling
In addition, we
will provide each client, without charge, upon request, information regarding
the proxy votes cast by us with regard to the client’s securities.
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