investmentdecisions, or determine to permit the portfolio manager to make
individual decisions on how best to maximize economic value for a Fund (similar
to normal buy/sell investment decisions made by such portfolio managers). While
it is expected that the Adviser will generally seek to vote proxies over which
the Adviser exercises voting authority in a uniform manner for all the
Adviser's clients, the Committee, in conjunction with a Fund's portfolio
manager, may determine that the Fund's specific circumstances require that its
proxies be voted differently. D-10 =============================================================================== To assist the Adviser in voting proxies, the Committee has retained
Institutional Shareholder Services ("ISS"). ISS is an independent adviser that
specializes in providing a variety of fiduciary-level proxy-related services to
institutional investment managers, plan sponsors, custodians, consultants, and
other institutional investors. The services provided to the Adviser by ISS
include in-depth research, voting recommendations (although the Adviser is not
obligated to follow such recommendations), vote execution, and recordkeeping.
ISS will also assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act. The Adviser's Proxy Voting Procedures also address special circumstances that
can arise in connection with proxy voting. For instance, under the Proxy Voting
Procedures, the Adviser generally will not seek to vote proxies related to
portfolio securities that are on loan, although it may do so under certain
circumstances. In addition, the Adviser will vote proxies related to securities
of foreign issuers only on a best efforts basis and may elect not to vote at
all in certain countries where the Committee determines that the costs
associated with voting generally outweigh the benefits. The Committee may at
any time override these general policies if it determines that such action is
in the best interests of a Fund. From time to time, the Adviser may be required to vote proxies in respect of an
issuer where an affiliate of the Adviser (each, an "Affiliate"), or a money
management or other client of the Adviser, including investment companies for
the Committee concurs that the subcommittee's determination is consistent with
the Adviser's fiduciary duties. In addition to the general principles outlined above, the Adviser has adopted
voting guidelines with respect to certain recurring proxy issues that are not
expected to involve unusual circumstances. These policies are guidelines only,
and the Adviser may elect to vote differently from the recommendation set forth
in a voting guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at any time upon
the request of a Committee member and may be amended or deleted upon the vote
of a majority of Committee members present at a Committee meeting at which
there is a quorum. D-11 =============================================================================== The Adviser has adopted specific voting guidelines with respect to the
following proxy issues: * Proposals related to the composition of the board of directors of issuers
other than investment companies.As a general matter, the Committee believes
that a company's board of directors (rather than shareholders) is most
likely to have access to important, nonpublic information regarding a
company's business and prospects, and is, therefore, best-positioned to set
corporate policy and oversee management. The Committee, therefore, believes
that the foundation of good corporate governance is the election of
qualified, independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, the Committee may look at a nominee's number of
other directorships, history of representing shareholder interests as a
director of other companies or other factors, to the extent the Committee
deems relevant. * Proposals related to the selection of an issuer's independent auditors.As a
general matter, the Committee believes that corporate auditors have a
responsibility to represent the interests of shareholders and provide an
independent view on the propriety of financial reporting decisions of
corporate management. While the Committee will generally defer to a
corporation's choice of auditor, in individual cases, the Committee may
auditor of other companies, to the extent the Committee deems relevant. * Proposals related to management compensation and employee benefits.As a
general matter, the Committee favors disclosure of an issuer's compensation
and benefit policies and opposes excessive compensation, but believes that
compensation matters are normally best determined by an issuer's board of
directors, rather than shareholders. Proposals to "micro-manage" an
issuer's compensation practices or to set arbitrary restrictions on
compensation or benefits will, therefore, generally not be supported. * Proposals related to requests, principally from management, for approval of
amendments that would alter an issuer's capital structure.As a general
matter, the Committee will support requests that enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive. * Proposals related to requests for approval of amendments to an issuer's
charter or by-laws.As a general matter, the Committee opposes poison pill
provisions. * Routine proposals related to requests regarding the formalities of
corporate meetings. * Proposals related to proxy issues associated solely with holdings of
investment company shares.As with other types of companies, the Committee
believes that a fund's board of directors (rather than its shareholders) is
best positioned to set fund policy and oversee management. However, the
Committee opposes granting boards of directors authority over certain
matters, such as changes to a fund's investment objective, which the
Investment Company Act envisions will be approved directly by shareholders. * Proposals related to limiting corporate conduct in some manner that relates
to the shareholder's environmental or social concerns. The Committee
generally believes that annual shareholder meetings are inappropriate
forums for discussion of larger social issues, and opposes shareholder
resolutions "micromanaging" corporate conduct or requesting release of
information that would not help a shareholder evaluate an investment in the
corporation as an economic matter. While the Committee is generally
supportive of proposals to require corporate disclosure of matters that
seem relevant and material to the economic interests of shareholders, the
Committee is generally not supportive of proposals to require disclosure of
corporate matters for other purposes. Information about how a Fund voted proxies relating to securities held in the
Fund's portfolio during the most recent 12 month period ended November 30 is
available without charge (1) at www.blackrock.comand (2) on the Commission's
web site at http://www.sec.gov . D-12 =============================================================================== BOSTON ADVISORS, LLC. PROXY VOTING POLICIES AND PROCEDURES I. INTRODUCTION Under the investment management contracts between Boston Advisors, LLC. ("BA")
and most of our clients, the client retains exclusive voting authority over the
securities in the client's portfolio and we do not have any role in proxy
voting. BA assumes responsibility for voting proxies when requested by a client
and with respect to clients subject to the Employee Retirement Income Security
Act of 1974 ("ERISA"). II. STATEMENTS OF POLICIES AND PROCEDURES A. Policy Statement. The Investment Advisers Act of 1940, as amended (the
"Advisers Act"), requires us to, at all times, act solely in the best
interest of our clients. We have adopted and implemented these Proxy Voting
Policies and Procedures, which we believe, are reasonably designed to
ensure that proxies are voted in the best interest of clients, in
accordance with our fiduciary duties and Rule 206(4)-6 under the Advisers
Act. While retaining final authority to determine how each proxy is voted, BA has
reviewed and determined to follow in most instances the proxy voting policies
and recommendations (the "Guidelines") of Egan-Jones Proxy Services, a proxy
research and consulting firm ("Egan-Jones"). Egan-Jones will track each proxy
that BA is authorized to vote on behalf of our clients and will make a
recommendation to management of BA as how it would vote such proxy in
accordance with the Guidelines. Unless otherwise directed by BA, Egan-Jones
will instruct Proxy-Edge, a proxy voting firm ("Proxy-Edge") to vote on such
matters on our behalf in accordance with its recommendations. BA will monitor
the recommendations from Egan-Jones and may override specific recommendations
or may modify the Guidelines in the future. We have established these Proxy Voting Policies and Procedures in a manner that
is generally intended to result in us voting proxies with a view to enhance the
value of the securities held in a client's account. The financial interest of
our clients is the primary consideration in determining how proxies should be
voted. In the case of social and political responsibility that we believe do
not primarily involve financial considerations, we shall abstain from voting or
vote against such proposals since it is not possible to represent the diverse
views of our clients in a fair and impartial manner. However, all proxy votes
are ultimately cast on a case-by-case basis, taking into account the foregoing
principal and all other relevant facts and circumstances at the time of the
between the interests of our clients on the one hand and our interests
(including those of our affiliates, directors, officers, employees and
other similar persons) on the other hand (a "potential conflict") the
matter shall be considered by management. Proxy proposals that are "routine," such as uncontested elections of directors,
meeting formalities, and approval of an annual report/financial statements are
presumed not to involve a material conflict of interest. Non-routine proxy
proposals are presumed to involve a material conflict of interest, unless BA
determines that neither BA nor its personnel have such a conflict of interest.
Non-routine proposals would typically include any contested matter, including a
contested election of directors, a merger or sale of substantial assets, a
change in the articles of incorporation that materially affects the rights of
shareholders, and compensation matters for management (e.g., stock option plans
and retirement plans). D-13 =============================================================================== If BA management determines that BA has a material conflict of interest then we
shall vote the proxy according to the recommendation of Egan-Jones or, if
applicable, the client's proxy voting policies. BA management also reserves the
right to vote a proxy using the following methods: * We may obtain instructions from the client on how to vote the proxy. * If we are able to disclose the conflict to the client, we may do so and
obtain the client's consent as to how we will vote on the proposal (or
otherwise obtain instructions from the client on how the proxy should be
voted). We use commercially reasonable efforts to determine whether a potential
conflict may exist, and a potential conflict shall be deemed to exist if and
only if one or more of our senior investment staff actually knew or reasonably
should have known of the potential conflict. C. Limitations on Our Responsibilities 1. Limited Value. We may abstain from voting a client proxy if we conclude
that the effect on client's economic interests or the value of the
portfolio holding is indeterminable or insignificant. 2. Unjustifiable Costs. We may abstain from voting a client proxy for cost
reasons (e.g., costs associated with voting proxies of non-U.S.
securities). In accordance with our fiduciary duties, we weigh the costs
and benefits of voting proxy proposals relating to foreign securities and
make an informed decision with respect to whether voting a given proxy
proposal is prudent. Our decision takes into account the effect that the
vote of our clients, either by itself or together with other votes, is
expected to have on the value of our client's investment and whether this
expected effect would outweigh the cost of voting. 3. Special Client Considerations. a. Mutual Funds. We vote proxies of our mutual fund clients subject to the
funds' applicable investment restrictions. b. ERISA Accounts. With respect our ERISA clients, we vote proxies in
accordance with our duty of loyalty and prudence, compliance with the plan
documents, as well as our duty to avoid prohibited transactions. 4. Client Direction. If a client has a proxy-voting policy and instructs us to
follow it, we will comply with that policy upon receipt except when doing
so would be contrary to the client's economic interests or otherwise
imprudent or unlawful. As a fiduciary to ERISA clients, we are required to
discharge our duties in accordance with the documents governing the plan
(insofar as they are consistent with ERISA), including statements of proxy
voting policy. We will, on a best efforts basis, comply with each client's
proxy voting policy. If client policies conflict, we may vote proxies to
reflect each policy in proportion to the respective client's interest in
any pooled account (unless voting in such a manner would be imprudent or
otherwise inconsistent with applicable law). D. Disclosure. A client for which we are responsible for voting proxies may
obtain information from us, via Egan-Jones and Proxy Edge records,
regarding how we voted the client's proxies. Clients should contact their
account manager to make such a request. E. Review and Changes. We shall from time to time review these Proxy Voting
Policies and Procedures and may adopt changes based upon our experience,
evolving industry practices and developments in applicable laws and
regulations. Unless otherwise agreed to with a client, we may change these
Proxy Voting Policies and Procedures from time to time without notice to,
or approval by, any client. Clients may request a current version of our
Proxy Voting Policies and Procedures from their account manager. D-14 ===============================================================================
F. Delegation. We may delegate our responsibilities under these Proxy Voting
Policies and Procedures to a third party, provided that we retain final
authority and fiduciary responsibility for proxy voting. If we so delegate
our responsibilities, we shall monitor the delegate's compliance with these
Proxy Voting Policies and Procedures.
G. Maintenance of Records. We maintain at our principal place of business the
records required to be maintained by us with respect to proxies in
accordance with the requirements of the Advisers Act and, with respect to
our fund clients, the Investment Company Act of 1940. We may, but need not,
maintain proxy statements that we receive regarding client securities to
the extent that such proxy statements are available on the SEC's EDGAR
system. We may also rely upon a third party, such as Egan-Jones or Proxy
Edge to maintain certain records required to be maintained by the Advisers
Act. III. EGAN-JONES PROXY VOTING PRINCIPLES AND GUIDELINES Attached as Appendix A is the Proxy Voting Principles and Guidelines of Egan-
Jones Proxy Services. Appendix A EGAN-JONES PROXY SERVICES PROXY VOTING PRINCIPLES AND GUIDELINES Egan-Jones Proxy Voting Principles Introduction Our Proxy Voting Principles serve as the background for our Proxy Voting
Guidelines, which, in turn, act as general guidelines for the specific
recommendations that we make with respect to proxy voting. It is important to
recognize that such principles are not intended to dictate but guide. Certain
of the principles may be inappropriate for a given company, or in a given
situation. Additionally, the principles are evolving and should be viewed in
that light. Our principles are and will be influenced by current and
forthcoming legislation, rules and regulations, and stock exchange rules.
Examples include: * the Sarbanes-Oxley Act of 2002 and implementing rules promulgated by the
U.S. Securities & Exchange Commission * revised corporate governance listing standards of the New York Stock
Exchange and resulting SEC rules * corporate governance reforms and subsequent proposed rule filings made with
the SEC by The NASDAQ Stock Market, Inc. and resulting SEC rules In general: * Directors should be accountable to shareholders, and management should be
accountable to directors. * Information on the Company supplied to shareholders should be transparent. * Shareholders should be treated fairly and equitably according to the
principle of one share, one vote. Principles A. Director independence It is our view that: * A two-thirds majority of the Board should be comprised of independent
directors. * Independent directors should meet alone at regularly scheduled meetings, no
less frequently than semi-annually, without the Chief Executive Officer or
other non-independent directors present. D-15 ===============================================================================
* When the Chairman of the Board also serves as the company's Chief Executive
Officer, the Board should designate one independent director to act as a
leader to coordinate the activities of the other independent directors.
* Committees of the Board dealing with the following responsibilities should
consist only of independent directors: audit, compensation, nomination of
directors, corporate governance, and compliance. * No director should serve as a consultant or service provider to the
Company. * Director compensation should be a combination of cash and stock in the
company, with stock constituting a significant component. In our opinion, an independent director, by definition, has no material
relationship with the Company other than his or her directorship. This avoids
the potential for conflict of interest. Specifically such director: * should not have been employed by the Company or an affiliate within the
previous five years; * should not be, and should not be affiliated with, a company that is an
adviser or consultant to the Company or affiliate, or to a member of the
Company's senior management; * should not be affiliated with a significant customer or supplier of the
Company or affiliate; * should have no personal services contract with the Company or affiliate, or
a member of senior management; * should not be affiliated with a not-for-profit organization that receives
significant contributions from the Company or affiliate;
* within the previous five years, should not have had any business
relationship with the Company or affiliate which required disclosure in the
Company's Form 10-K; * should not be employed by a public company at which an executive officer of
the Company serves as a director; * should not be a member of the immediate family of any person described
above. B. Board operating procedures * The Board should adopt a written statement of its governance principles,
and regularly re-evaluate them. * Independent directors should establish performance criteria and
compensation incentives for the Chief Executive Officer, and regularly
review his or her performance against such criteria. Such criteria should
align the interests of the CEO with those of shareholders, and evaluate the
CEO against peer groups. * The independent directors should be provided access to professional
advisers of their own choice, independent of management. * The Board should have a CEO succession plan, and receive periodic reports
from management on the development of other members of senior management. * Directors should have access to senior management through a designated
liaison person. * The Board should periodically review its own size, and determine the
appropriate size. C. Requirements for individual directors We recommend that: * The Board should provide guidelines for directors serving on several Boards
* The Board should establish performance criteria for itself and for
individual directors regarding director attendance, preparedness, and
participation at meetings of the Board and of committees of the Board, and
directors should perform satisfactorily in accordance with such criteria in
order to be re-nominated.
D. Shareholder rights * A simple majority of shareholders should be able to amend the company's
bylaws, call special meetings, or act by written consent. * In the election of directors, there should be multiple nominees for each
seat on the Board. * "Greenmail" should be prohibited. * Shareholder approval should be required to enact or amend a "poison pill"
(i.e., "shareholder rights") plan. * Directors should be elected annually. * The Board should ordinarily implement a shareholder proposal that is
approved by a majority of proxy votes. * Shareholders should have effective access to the director nomination
process. Egan-Jones Proxy Voting Guidelines Consistent with the above-listed principles, the proxy voting guidelines
outlined below are written to guide the specific recommendations that we make
to our clients. Ordinarily, we do not recommend that clients ABSTAIN on votes;
rather, we recommend that they vote FOR or AGAINST proposals (or, in the case
of election of directors, that they vote FOR ALL nominees, AGAINST the
nominees, or that they WITHHOLD votes for certain nominees). In the latter
instance, the recommendation on our report takes the form ALL, EXCEPT FOR and
lists the nominees from whom votes should be withheld. Whether or not the guideline below indicates "case-by-case basis," every case
is examined to ensure that the recommendation is appropriate. Board of Directors Election of Directors in Uncontested Elections Case-by-case basis, examining composition of board and key board committees,
attendance history, corporate governance provisions and takeover activity,
long-term company financial performance relative to a market index, directors'