RBC Global Asset Management (U.S.) Inc. Item 2 – Material Changes The following is a summary of the specific material change to the brochure since its inception on January 30, 2012: 01/29/2016: Annual update, added a new wrap fee program (Managed Account Program sponsored by Robert W. Baird & Co. Incorporated. 02/05/2015: Change of proxy voting guidelines from Taft Hartley Advisory Services to custom RBC GAM guidelines. 01/28/2015: A new investment strategy was added (Global Focus Equity, International Focus Equity and Emerging Market Equity Value) and annual update. 11/06/2014: A new investment strategy was added (Canadian Equity Value). 04/11/2014: Change of Address for Firm from 100 South Fifth Street, Minneapolis to 50 South Sixth Street, Minneapolis 01/30/2014: Clarified the types of derivative trading performed by RBC GAM-US. 01/28/2014: A new investment strategy was added (Small Cap Value) and annual update. 12/11/2013: A new investment strategy was added (Emerging Market Equity: Core and Small Cap). 04/01/2013: A new investment strategy was added (Mid Cap Growth and Concentrated Mid Cap Value). 01/29/2013: A new investment strategy was added (U.S. Investment Grade and Ultra Short) and annual update. 11/30/2012: A new investment strategy was added (Global Resources). 10/01/2012: Added a new wrap fee program (Global Manager Strategies sponsored by Goldman Sachs & Co.).

RBC Global Asset Management (U.S.) Inc. (“RBC GAM-US”) will provide our clients with a new Brochure as necessary based on changes or new information. This brochure is also available upon request, at any time, free of charge.

Item 3 –Table of Contents

Item 1 – Title Page………………………………………………………..…………………………………………………………………………….…….1 Item 2 – Material Changes ...................................................................................................................................... 2 Item 3 –Table of Contents ...................................................................................................................................... 2 Item 4 – Advisory Business ..................................................................................................................................... 3 Item 5 – Fees and Compensation ........................................................................................................................... 4 Item 6 – Performance-Based Fees and Side-By-Side Management ....................................................................... 5 Item 7 – Types of Clients ......................................................................................................................................... 6 Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss.................................................................. 6 Item 9 – Disciplinary Information ......................................................................................................................... 15 Item 10 – Other Financial Industry Activities and Affiliations .............................................................................. 15 Item 11 – Code of Ethics, Participation or Interest in Client Transactions and Personal Trading........................ 16 Item 12 – Brokerage Practices .............................................................................................................................. 18 Item 13 – Review of Accounts .............................................................................................................................. 23 Item 14 – Client Referrals and Other Compensation ........................................................................................... 24 Item 15 – Custody ................................................................................................................................................. 24 Item 16 – Investment Discretion .......................................................................................................................... 25 Item 17 – Voting Client Securities......................................................................................................................... 25 Item 18 – Financial Information............................................................................................................................ 26 Fee Schedule Appendix ............................................................................................................................. 27 Risk Disclosure Appendix .......................................................................................................................... 2

RBC Global Asset Management (U.S.) Inc. Item 4 – Advisory Business Firm Overview RBC GAM-US was formed in 1983 and is registered as an Investment Adviser with the U.S. Securities and Exchange Commission, pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”), a Commodity Pool Operator (“CPO”) and Introducing Broker (“IB”) with the National Futures Association (“NFA”), pursuant to the Commodity Exchange Act (“CEA”). The firm is a wholly owned subsidiary of RBC USA Holdco Corporation, which is an indirect, wholly owned subsidiary of the Royal Bank of Canada (“RBC”). RBC is publicly held and traded on the New York Stock Exchange and Toronto Stock Exchange. RBC GAM-US is also a part of the RBC Global Asset Management (“RBC GAM”) asset management division of RBC. The RBC GAM group of companies includes the following affiliates, all indirect wholly owned subsidiaries of RBC: RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management Inc., RBC Global Asset Management (UK) Limited, RBC Alternative Asset Management Inc., BlueBay Asset Management LLP, BlueBay Asset Management USA LLC, and RBC Investment Management (Asia) Limited.

RBC GAM operates as a global firm and leverages the talent and investment capabilities across RBC GAM to create solutions for its clients. This Brochure describes the investment advisory services of RBC GAM-US. To comply with Advisers Act, we provide this Brochure to persons who receive or who may receive investment advisory services from RBC GAM-US.

Advisory Services RBC GAM-US seeks to develop a full understanding of each client’s investment needs and concerns and meet those needs with equity, fixed income, and cash management solutions. These are available to a broad range of institutional clients through the following vehicles:  Institutional separate accounts (“Separate Accounts”)  Open-end investment companies registered under the Investment Company Act of 1940, as amended (“mutual funds”)  Other pooled vehicles (such as private funds, collective trusts, and commingled funds)

RBC GAM-US also provides portfolio management services for wrap fee accounts and model portfolios offered by other providers.

RBC GAM-US enters into agreements with third party investment subadvisers. These subadvisers may provide portfolio management services to mutual funds or Separate Accounts and may be affiliates of RBC GAM-US.

DISCRETIONARY ADVISORY SERVICES Separate Accounts RBC GAM-US provides discretionary and non-discretionary investment management solutions to clients in the form of Separate Accounts. Fees and services for each arrangement are individually negotiated. Separate Account clients may impose restrictions on investing in certain securities or types of securities if those restrictions are consistent with the strategy’s investment style and process. These restrictions are specified in each client’s written investment policy or other governing document. RBC GAM-US assesses each portfolio’s compliance with the client’s investment policy or other offering document through automated and manual reviews. The fees and services for each such arrangement are generally based upon a percentage of assets under management. For additional information on fees, refer to Item 5 or the Fee Schedule Appendix.

Mutual Funds and Other Pooled Investment Vehicles (“Funds”) RBC GAM-US serves as the investment adviser to the RBC Funds Trust, an affiliated investment company, as well as other affiliated pooled investment funds. RBC GAM-US also provides investment management services to a variety of non-affiliated mutual funds and other pooled investment vehicles. In connection with its advisory services to a Fund, RBC GAM-US or its related persons providing services to a Fund receive advisory, manager, administration, co-administration and/or distribution fees from the Fund and/or from investment advisers to the Fund. Clients should carefully review each mutual fund prospectus or other offering documents for more detailed information regarding a Fund advised or sub-advised by RBC GAM-US.

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RBC Global Asset Management (U.S.) Inc. Wrap Fee Program (“Wrap Fee Accounts”) RBC GAM-US provides investment advisory services to Wrap Fee Accounts offered by broker-dealers or other investment advisers (“program sponsor”). RBC GAM-US provides its advisory services pursuant to an investment management agreement with the program sponsor. Participants in Wrap Fee Accounts pay a single inclusive fee (“wrap fee”) to the program sponsor that typically includes custody, investment consultation, trading (provided by the program sponsor) and investment advisory services (provided by RBC GAM-US) to the program sponsor. A portion of the wrap fee is paid to RBC GAM-US by the program sponsor. RBC GAM-US currently participates in the following wrap fee programs: Consulting Solutions sponsored by RBC Wealth Management, a division of RBC Capital Markets, LLC, an affiliate of RBC GAM-US; Fiduciary Services, sponsored by Morgan Stanley Smith Barney, LLC; Global Manager Strategies sponsored by Goldman Sachs & Co; and Managed Account Program sponsored by Robert W. Baird & Co. Incorporated.

The services provided by RBC GAM-US to Wrap Fee Accounts are tailored to the requirements of each Wrap fee program and differ from the services we provide to separately managed institutional accounts. For example, client reports are not provided for Wrap Fee Accounts. Wrap fee program clients should review all materials relating to their program (including the program brochure) regarding a wrap fee program terms, conditions, and fees, while also taking into consideration advantages and disadvantages as provided by their program sponsor. NON-DISCRETIONARY ADVISORY SERVICES RBC GAM-US provides non-discretionary investment advisory services (such as asset allocation advice, equity and fixed income research and recommendations for a variety of investment styles) to clients, including model portfolios. The fees and services for each such arrangement are generally based upon a percentage of assets under management. For additional information on fees, refer to Item 5 or the Fee Schedule Appendix.

Model Portfolio Provider As a model portfolio provider, RBC GAM-US provides program sponsors, including affiliates of ours, with non-discretionary recommendations to assist the sponsor in the development of one or more portfolios that the sponsor may determine to be suitable for its clients (each a “model portfolio”). Our role is generally limited to providing research and portfolio recommendations, including a model portfolio, to the program sponsor. We generally use the same sources of information and investment/research personnel as we use to manage our other client accounts with similar investment strategies or investment objectives. Therefore, model portfolios may relate to the same strategies that are also offered or utilized through our discretionary accounts.

Program clients are clients of the program sponsor and not of RBC GAM-US. The program sponsor or overlay manager is responsible for investment decisions and performing many other services and functions typically handled by RBC GAM-US in a traditional discretionary managed account program. Depending on the particular facts and circumstances, RBC GAM-US may or may not have an advisory relationship with model-based program clients. If this Brochure is being delivered to program clients with whom there is no advisory relationship or under circumstances where it is not legally required to be delivered, it is provided for informational purposes only. Furthermore, RBC GAM-US is not responsible for overseeing the provision of services by a model-based program sponsor and cannot assure the quality of its services. Clients should review the program sponsor’s firm brochure regarding the terms, conditions, and fees, while also considering the advantages and disadvantages as provided by the program sponsor. Refer to Item 12 for additional information on sponsored fee-based program accounts. Assets Under Management Client assets under management for RBC GAM-US as of October 31, 2015: Discretionary $42,039,920,403 Non-Discretionary $ 430,818,157 Total: $42,470,738,560

Item 5 – Fees and Compensation

Rates / Fee Schedule While fees are individually negotiated, clients will generally pay a percentage of assets under management in accordance with the Fee Schedule Appendix. Fees and services are negotiated based on factors such as client type, asset class, specific

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RBC Global Asset Management (U.S.) Inc. investment strategy utilized, whether a pre-existing relationship is present, portfolio complexity, account size or other special circumstances or requirements. However, in certain limited circumstances, for eligible clients and certain strategies, fixed or performance-based fees may also be negotiated, and related accounts may be aggregated for fee calculation purposes. Some clients may pay higher or lower fees than other clients. For information on our account minimums, refer to Item 7.

Billing Periods RBC GAM-US advisory fees are generally payable quarterly (in advance or arrears) or at such other times as agreed upon by the parties involved, based upon a percentage of the market value of assets in the account on the date of valuation, or the average of the market value of the assets in the account during the billing period. For accounts that pay in advance, if a client terminates their investment advisory contract with RBC GAM-US prior to quarter-end, the advisory fee will be pro-rated based on the portion of the quarter the account was open, and any unused portion of any fees paid in advance will be returned to the client.

Valuation/Calculation Valuations of account assets are determined in accordance with RBC GAM-US valuation procedures, which generally rely on third-party pricing services, but also permit the use of other valuation methodologies in certain circumstances. Our valuation may differ from valuations reflected on a client’s custodial statement. In certain limited circumstances, and only upon request of the client, RBC GAM-US may rely on the valuation determined by the client’s custodian. Since such valuations may differ, the client may pay more or less in fees depending on the valuation methodology utilized.

Other Fees and Expenses Clients incur certain charges imposed by custodians, brokers, and other third parties such as fees charged by other managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange-traded funds charge internal management fees, which are disclosed in the fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to our fee, and RBC GAM-US does not receive any portion of these commissions, fees, or costs incurred by the client. However, certain clients pay RBC GAM-US other fees and expenses in addition to our advisory fee. Such fees may include a manager fee charged by certain private funds for which we serve as manager and mutual fund administrative and servicing fees. Refer to Item 11 for more information on mutual fund fees, or the offering documents of the relevant fund.

Item 6 – Performance-Based Fees and Side-By-Side Management

RBC GAM-US manages multiple accounts for multiple clients with different investment mandates and different fee structures. The investment objectives, strategies, time horizons, tax considerations, and other investment considerations specific to a particular client account may differ from other accounts.

RBC GAM-US generally receives an asset-based fee; however, in certain limited cases, and at the request of the client, we will enter into performance-based fee arrangements with qualified clients for our advisory services. Performance-based fee structures are individually negotiated with each client, generally with a minimum investment of $50 million.

In measuring clients' assets for the calculation of performance-based fees, RBC GAM-US includes realized and unrealized capital gains and losses. Performance-based fees may create an incentive for RBC GAM-US to make investments that are riskier or more speculative than would be the case if a performance-based fee was not charged. Performance-based fees may create an incentive to favor performance-based fee-paying accounts over nonperformance-based fee accounts in the allocation of investment opportunities. In these instances, our compensation may be greater than it would otherwise have been, as the fee will be based on account performance instead of, or in addition to, a percentage of assets under management. RBC GAM-US has procedures that are reasonably designed to ensure that all clients are treated fairly and equally, and to prevent this conflict from influencing the allocation of investment opportunities among clients. The inherent conflicts of interest of managing accounts with both types of fee structures are mitigated by the firm’s trade allocation policies that ensure all trades are allocated in a fair and consistent manner. Trade allocation is monitored internally, and any exceptions or issues arising from the reviews are brought to the attention of our Chief Investment Officer and Chief Compliance Officer. Refer to Item 12 for more information on allocation of investment opportunities.

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RBC Global Asset Management (U.S.) Inc. Item 7 – Types of Clients We provide portfolio management services to corporations, public and private pension plans, Taft-Hartley plans, charitable institutions, foundations, endowments, municipalities, registered mutual funds, private investment funds, trust programs, foreign funds such as UCITS funds, individuals (including high net worth individuals), wrap sponsors and other U.S. and international institutions.

RBC GAM-US provides the following investment management capabilities:  U.S. Equity  U.S. Fixed Income  Global Equity  Global Credit  Multi-Strategy Our accounts are generally subject to a standard minimum quarterly revenue requirement as part of the investment management agreement of $18,750 per quarter. For additional information on fees, refer to Item 5 or the Fee Schedule Appendix.

Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss

In providing discretionary investment management services and recommendations to non-discretionary clients, individual portfolio managers may emphasize one method of security analysis over another. The primary methods of analysis we employ are fundamental analysis (i.e., the analysis and interpretation of basic company and industry data) and quantitative analysis (i.e., the analysis and interpretation of numerical, measurable characteristics). Each investment team at RBC GAM-US maintains key research personnel who are responsible for researching investment opportunities, reporting their findings and views on specific issuers and securities to other investment personnel and portfolio managers on their respective investment teams. Furthermore, our Portfolio Risk and Analytics team is responsible for developing independent measures of absolute and benchmark relative risk, creating and aggregating performance attribution analysis and reporting performance and risk profiles through formal investment scorecards. On a monthly basis, performance and risk characteristics are presented and reviewed by senior investment leadership.

Investment Teams RBC GAM operates as a global firm and leverages the talent and investment capabilities across RBC GAM to create solutions for its clients. RBC GAM-US offers investment management of select strategies managed by investment teams of our affiliates. Some of these affiliates are not registered as investment advisers in the United States but are able to provide investment advisory services in the United States pursuant to regulatory relief granted to RBC. Refer to Item 10 for more information. While these affiliates have practices that vary from RBC GAM-US, we have reviewed their relevant practices and oversee these investment teams through periodic reviews. When practices vary, we will refer to each respective investment team in the following terms: “Canadian-based Equity Management Team,” “Canadian-based Fixed Income Management Team,” or together as the “Canadian-based Management Teams”. Employees of RBC GAM-US will be references as the “U.S.-based Investment Management Teams.”

Investment Strategies We employ various investment strategies through our investment mandates and based on the objectives and strategies of the clients involved. Client portfolios with similar investment mandates, strategies and guidelines are generally managed similarly. Long term (securities held for at least one year), short term (securities sold within one year) and trading (securities sold within thirty days) may all be used, if permitted by the applicable client investment guidelines. We may also borrow securities in connection with short sales, borrow money to invest in additional portfolio securities or engage in transactions in futures contracts for some clients. In employing investment strategies, we use certain hedging strategies in an attempt to “hedge” or “neutralize” various risks associated with positions in a client’s portfolio. The instruments used to engage in these hedging strategies include various derivative instruments, such as futures, options, warrants, and other derivative securities.

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RBC Global Asset Management (U.S.) Inc. Item 9 – Disciplinary Information RBC GAM-US and our management personnel do not have any reportable disciplinary events to disclose.

Item 10 – Other Financial Industry Activities and Affiliations

As discussed in Item 4 above, RBC GAM-US is a wholly-owned subsidiary of RBC USA Holdco Corporation, which is an indirect wholly owned subsidiary of RBC. RBC has a global portfolio of companies under its control, including six other investment advisers material to the investment advisory services we provide:      

RBC Alternative Asset Management, Inc., RBC Global Asset Management Inc. (“RBC GAM Inc. ”) RBC Global Asset Management (UK) Limited (“RBC GAM-UK”) BlueBay Asset Management LLP, BlueBay Asset Management USA LLC and RBC Capital Markets, LLC (“RBC CM”), a dually registered investment adviser and broker dealer.

As described below, many of our affiliates engage in activities that are material to our advisory business or to our clients. RBC GAM-US does not have any relationships or arrangements that are material to its advisory business or clients with a related person other than those discussed below:  RBC GAM-US has employees who are registered representatives of an affiliated broker-dealer, RBC CM.  Some of our directors, executive officers and employees are also directors, officers or employees of one or more affiliates. In these circumstances, the potential for a conflict of interest exists between the allocation of resources and time between entities and the obligations to our clients and the incentive to take actions that benefit one or more of our other affiliates. We believe these potential conflicts are mitigated because our employees and those of our affiliates are subject to a Code of Ethics and various policies that require these employees to act in the best interests of our clients and to put the needs of our clients first at all times.  RBC GAM-US relies on the processes and investment strategies developed by foreign affiliates. Pursuant to no-action relief granted to RBC by the Securities and Exchange Commission, RBC GAM-US engages the use of a Participating Affiliate (“PA”) arrangement, with our affiliate, RBC GAM Inc., a Canadian-registered investment adviser. A PA arrangement allows RBC GAM-US to retain our affiliate to provide certain investment management services to our clients. Neither RBC GAMUS nor the affiliate receive any additional compensation for engaging in the PA arrangement or investment strategy other than the management fees that are paid to us by the client. A portion of the fee will be paid to our affiliate for the investment management of client accounts. Individuals who engage in the PA arrangement are acting as agents of RBC GAM-US when providing investment advisory services under the PA arrangement. Accordingly, such individuals are subject to our Code of Ethics and various other policies that require these individuals to act in the best interests of our clients and to put the needs of our clients first at all times.  RBC GAM-US relies on its affiliate, RBC GAM Inc., to review and validate proxy recommendations and votes from our proxy research and service provider are in line with our proxy voting guidelines.  We serve as sub-adviser to separate accounts, private investment funds, foreign registered mutual funds or other pooled investment foreign funds such as UCITS funds for our affiliates. Our affiliates recommend these products to their eligible clients. Other than the management fee we collect from our affiliates, we do not collect any additional fees for the sale of these funds.  Our affiliate, RBC CM, sweeps a portion of its client account cash balances into the RBC Funds Trust money market funds. RBC CM recommends to its clients the purchase of shares of one or more of the other RBC Funds Trust mutual funds, but only to the extent that such securities are suitable for the client.  We have clients who custody their assets with RBC CM, a qualified custodian. Refer to Item 15 for more information on custody with affiliates.  RBC GAM-US participates as an investment adviser or model portfolio provider to RBC CM, a wrap-fee sponsor for certain wrap-fee accounts. We do not receive any additional compensation other than a portion of the management fee RBC CM charges each client. Refer to Items 4 and 5 for more information on wrap fee accounts.  RBC GAM-US delegates some or all of its responsibilities to one or more affiliates, to the extent permissible by law.  We receive certain administrative, operational, infrastructure and technical support, compliance, legal, and marketing services from our affiliates that may be material to our advisory business.

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RBC Global Asset Management (U.S.) Inc.  RBC GAM-US enters into solicitation (referral) agreements with broker/dealers and investment advisers, including affiliates whereby RBC GAM-US pays the referring entity a referral fee for successful referrals. RBC GAM-US also has agreements with broker/dealers and investment advisers, including affiliates, whereby RBC GAM-US receives a referral fee in exchange for referring clients. In all cases, these arrangements are disclosed to clients and do not result in additional fees owed by the client. Refer to Item 14 for information on client referral arrangements.  BlueBay Asset Management LLP and BlueBay Asset Management USA LLC serve as investment sub-advisers to certain U.S. registered mutual funds for which RBC GAM-US serves as the investment adviser.  RBC Global Asset Management (UK) Limited serves as the investment sub-adviser to certain U.S. registered mutual funds and separate accounts for which RBC GAM‐US serves as the investment adviser.  RBC Global Asset Management (UK) Limited serves as the investment sub-adviser to certain privately offered pooled investment vehicles for which RBC GAM‐US serves as the managing member. Please refer to applicable offering documents for more specifics around RBC GAM-US’ role in such investment vehicles.  RBC GAM-US receives referrals or recommendations from consultants who are hired by their clients to evaluate and recommend investment advisers. RBC GAM-US does not compensate consultants for these referrals or recommendations. However, RBC GAM-US has other relationships with some of these consultants or their affiliates that include (1) paying for research or educational services and (2) providing investment management services to a pooled investment vehicle sponsored by an affiliate of the consultant. RBC GAM-US evaluates these relationships annually to assess that (1) payments made are for legitimate business needs and (2) consultants (or their affiliates) do not receive preferential treatment for advisory services RBC GAM-US provides. [SPACE HOLDER for consultant relationship – Mikki to provide ] We do not believe these relationships create material conflicts of interest between RBC GAM-US and our clients.

Item 11 – Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Code of Ethics and Personal Trading We have adopted a Code of Ethics that guides our standards of business conduct as a fiduciary to our clients as well as other policies and procedures that outline our practices surrounding personal trading in securities, confidentiality of client information, and the misuse of non-public information. You may obtain a copy of our Code of Ethics by contacting us at (800) 553-2143 or by sending a request to: RBC Global Asset Management (U.S.) Inc. Attention: Client Service 50 South Sixth Street, Suite 2350 Minneapolis, MN 55402

Generally, the personal trading and participation or interest in client transactions of our Code of Ethics provides that:  The personal securities transactions, activities and interests of the employees of RBC GAM-US will not interfere with (i) making decisions in the best interest of our advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts;  Except for certain classes of securities that have been designated as exempt transactions, employees must pre-clear all personal trades for their own accounts or accounts over which they have an interest or control;  Employees may not purchase or sell the same security during the firm imposed blackout period, which is 7-days after a trade in a client account and 7-days before the client trade. (These restrictions may be waived where appropriate by the compliance department based on individual circumstances);  Employees may not purchase or sell the same security for a gain within any 60-day period. (These restrictions may be waived where appropriate by the compliance department based on individual circumstances); and  Employees must report personal securities holdings at the time of hire, as well as annually thereafter, and certify adherence to the Code of Ethics and accuracy of their personal holdings and transactions quarterly. PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS

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RBC Global Asset Management (U.S.) Inc. Use of Affiliated Broker-Dealer We generally do not trade with our affiliated broker-dealers. However, with specific client consent, RBC GAM-US will enter into investment transactions on behalf of the client in which an affiliated entity either (1) acts on a principal basis or (2) otherwise provides services for which the affiliate is compensated or otherwise financially benefits.

In certain circumstances, we do recommend that our advisory clients engage in securities transactions for which an affiliate of our serves as an underwriter, remarketing agent, or liquidity provider. Such purchases will generally be made in accordance with the (1) Prohibited Transaction Exemption 75-1, for accounts subject to ERISA, (2) Rule 10f-3 under the Investment Company Act of 1940, as amended, for mutual funds, and (3) Section 206(3) of the Advisers Act.

RBC CM, like RBC GAM-US, is an indirectly wholly-owned subsidiary of RBC. The recommendation and/or purchase or sale of the securities involves a conflict of interest because of the services these affiliates provide with respect to the securities and their financial interest in the securities, including the compensation they receive in connection with transactions in the securities. We have adopted policies and procedures in order to mitigate these conflicts of interest and obtain specific client consent where required by securities laws. In addition, prior to engaging in any affiliated trade, we will review the transaction to ensure that it is in the best interest of the client, considering factors such as our best execution obligation, and any additional compensation that may be received by the affiliate prior to the recommendation of the transaction.

Investment Adviser to Affiliated Open End Investment Company RBC GAM-US serves as investment adviser to RBC Funds Trust (“RBC Mutual Funds”), a registered open-end investment company. In addition, RBC GAM-US serves as RBC Mutual Funds’ co-administrator and provides certain administrative services necessary for the operation of the RBC Mutual Funds.

Certain employees, who are securities registered through RBC CM will recommend to investors the purchase of shares of one or more of the RBC Mutual Funds, but only to the extent that such securities are suitable for the investor. Other than the investment advisory fee paid by each of the Funds and an administrative services fee paid by certain RBC Mutual Funds, we do not collect any additional fees for the sale of these mutual funds.

Other Fund Activities From time to time, to the extent consistent with a client’s investment objectives and strategies, RBC GAM-US may invest client assets in affiliated or unaffiliated Funds. Clients may also choose to participate in their custodians’ sweep programs, which may offer mutual funds. Mutual funds typically pay fees for investment advisory, administrative and distribution services. Clients whose accounts are invested in mutual funds that are unaffiliated with RBC GAM-US will pay two levels of advisory fees – one through the unaffiliated mutual fund to its investment adviser and one to RBC GAM-US. Clients whose accounts are invested in Funds that are affiliated with RBC GAM-US do not pay a separate advisory fee to RBC GAM-US on those assets. For RBC GAM-US affiliated mutual funds; RBC GAM-US does receive investment advisory fees and administrative fees. More information regarding fees associated with a Fund can be found in the product’s underlying prospectus, statement of additional information, or offering memorandum.

Stable Value Portfolio Management RBC Capital Markets LLC (“RBC CM”)serves as the stable value provider for an investment fund (“Investment Fund”) managed by RBC GAM-US that is offered solely as an investment option for certain variable life insurance contracts offered by insurance companies for which we manage. RBC GAM-US may consult with RBC CM and other affiliates in connection with its investment decisions for the Investment Fund. These arrangements create a conflict of interest because we have an incentive to maximize the Investment Fund’s value in order to lessen our parent company’s financial obligation. This incentive could cause us to take undue investment risk when managing the Investment Fund. RBC GAM-US believes this conflict and the related risks are adequately addressed in a variety of ways, including the Investment Fund’s disclosures, investment restrictions and guidelines our fiduciary obligations, procedures limiting communications between RBC GAM-US RBC CM relating to the Investment Fund, and when appropriate, client More information on this fund and RBC’s role is contained in the Investment Fund’s confidential offering circular. Cross Transactions From time to time, we effect cross transactions between advisory clients, employee benefit plans governed by ERISA or restricted by the client. Any cross transactions involving the RBC Funds are subject to the Funds’ compliance procedures for

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RBC Global Asset Management (U.S.) Inc. such trades. We will not receive any compensation for effecting a transaction between advisory clients. The desire to liquidate, change asset allocation, or otherwise raise cash in a client account may necessitate selling a security that is attractive to another client account. In order to facilitate the settlement of the cross transaction, we may arrange with a third-party broker, or custodian(s) for one of our client accounts to sell the security and one or more of our client accounts to purchase the security. Such cross transactions will be effected only if, in our judgment, the transaction is beneficial to both the client account(s) selling the security and the client account(s) purchasing the security. The ability to effect a cross transaction between client accounts may be a conflict of interest for us and present a conflicting division of loyalty because it provides us with an opportunity to potentially advantage one client over another. To mitigate this conflict of interest, each cross trade is reviewed by the equity Head Trader, Co-Heads of Fixed Income and their respective oversight committees.

Item 12 – Brokerage Practices

Best Execution As an investment adviser, RBC GAM-US is obligated to exercise its fiduciary obligation to seek best execution of client transactions under the circumstances of the particular transaction. RBC GAM-US seeks to satisfy its best execution obligation through established policies and procedures, as well as assessing factors such as price, volume, market conditions, counterparty risk and relying on services that will best help achieve best execution through periodic monitoring of trade execution quality.

Our policies and procedures are also designed to address the conflicts of interest that may arise as a result of managing multiple types of accounts, including client accounts that pay RBC GAM-US higher fees or performance fees. Refer to the broker selection process referenced below for additional information on factors we consider in executing transactions.

RBC GAM-US hires subadvisers to manage certain mutual funds and may hire subadvisers to manage Separate Accounts. RBC GAM-US reviews the brokerage practices of each subadviser during compliance due diligence meetings and in each respective trading oversight committee to verify that each subadviser maintain reasonable policies and procedures and that the subadviser achieves best execution on trades made on behalf of RBC GAM.

Research & Soft Dollars (Use of Client Commissions) When it is consistent with our duty to seek best execution, RBC GAM-US executes equity transactions with broker-dealers who provide us with research, brokerage products and services and order execution goods and services in exchange for directing brokerage transactions to such broker-dealers. The brokerage commissions we use to acquire research are known as soft dollars. RBC GAM-US considers both proprietary research and third party research as soft dollars.

We use soft dollars to acquire either type of research. The research we obtain with soft dollars may not necessarily be used for the specific account that generated the soft dollars. Our clients benefit from the research and other services obtained by us even if your account contains mandates that do not permit investments in such securities or prohibit soft dollar transactions. Research services acquired in connection with broker-dealer transactions constitute eligible research for purpose of Section 28(e) of the Securities Exchange Act of 1934 (“Exchange Act”). Typical research and brokerage services we acquire with soft dollars include the following:  reports and access to information on the economy, industries, sectors and individual companies or issuers;  statistical information;  reports on legal developments affecting portfolio securities;  credit and data analyses; and  fundamental and proprietary research

For our U.S.-based Investment Management Teams, broker-dealers typically provide a bundle of services including research and execution of transactions. The research provided can be either proprietary (created and provided by the broker-dealer, including tangible research products as well as access to analysts and company management teams) or third-party (created and distributed by a third-party).

The receipt of research in exchange for soft dollars creates conflicts of interest. RBC GAM-US receives a benefit because we can supplement our own research and analysis activities, receive the views and information of individuals and research staff of

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RBC Global Asset Management (U.S.) Inc. other securities firms, and gain access to persons having special expertise on certain companies, industries, areas of the economy and market factors with the use of client commissions. We may have an incentive to select a broker-dealer based on a desire to receive research, rather than based on your interest to receive most favorable execution. We do select brokerdealers based on their ability to provide quality executions and our belief that the research information and other services provided by such broker-dealer benefits client accounts. Accordingly, we pay higher commissions if we determine in good faith that the value of the brokerage and/or research services provided is reasonable in relation to another broker.

We will not enter into any agreement or understanding with any broker-dealer, which would obligate us to direct a specific amount of brokerage transactions or commissions in return for such services. However, certain broker-dealers state in advance the amount of brokerage commissions they require for certain services and the applicable cash equivalent. Further, we do not consider the marketing efforts of broker-dealers on behalf of the funds for which we serve as investment adviser in selecting broker-dealers to execute trades. Such marketing efforts include the sales of mutual funds, the inclusion of our products on a broker-dealers wrap fee program platform (other than to the extent such program requires RBC GAM-US to trade with such broker-dealer), and referrals of clients or prospects. This prohibition is not intended to prevent trading with broker-dealers that make marketing efforts on behalf of the funds; it simply prevents such efforts from being a consideration when selecting executing broker-dealers.

We currently maintain arrangements to obtain third-party research or other products or services using soft dollars with several broker-dealers. This allows us to obtain particular product(s) or service(s) with available soft dollar credits and pay cash to make up any difference. If the product or service we obtain is a “mixed use” item (products or services that provide both research and non-research benefits), we use soft dollars for the Section 28(e) eligible research portion and pay cash for the non-eligible non-research portion. We will make a good faith effort to allocate between soft dollars and cash and will prepare records of any such allocations and payments.

We regularly review our soft dollar arrangements to ensure that soft dollar arrangements are consistent with Section 28(e) of the Exchange Act, commissions are priced at competitive levels, that we continue to seek best execution, and the brokerage and research services being paid for with soft dollars continue to be used to directly assist us in our investment decisionmaking process.

For accounts managed by our Canadian-based Equity Management Team, the research goods and services received also include (i) advice as to the value of securities and the advisability of effecting transactions in securities; and (ii), analyses and reports concerning securities, issuers, industries, portfolio strategy or economic or political factors and trends that may have an impact on the value of securities.

Brokerage for Client Referrals We engage in referral arrangements with broker-dealers on our approved list. We do not direct trades to approved brokerdealers based on our referral arrangements. Refer to the Broker Selection section that follows for our practices related to how we select executing broker-dealers. Refer to Item 14 for additional information on client referrals.

Broker Selection By granting RBC GAM-US investment discretion through an investment agreement, clients are also granting us authority to determine, without client consent, the broker or dealer for securities transactions in the client’s account. Our objective for each transaction is to seek the broker most capable of providing the brokerage services necessary in obtaining the best execution, while taking into consideration factors such as: ability to minimize trading costs, level of trading expertise, infrastructure, ability to provide information or services, financial condition, confidentiality provided by broker-dealer, competitiveness of commission rates, evaluations of execution quality, promptness of execution, past history, ability to prospect for and find liquidity, difficulty of trade and security’s trading characteristics, size of order, liquidity of market, block trading capabilities quality of settlements, specialized expertise, overall responsiveness, and willingness to commit capital. These considerations (and others as relevant) guide our selection of the appropriate venue (e.g., an ECN or alternative trading system (“ATS”), a traditional broker, or a crossing network, etc.) in which to place an order and the proper strategy with which to trade. RBC GAM-US maintains an approved list of broker-dealers for each asset class. Each respective oversight committee determines broker-dealer approvals.

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RBC Global Asset Management (U.S.) Inc. Each respective oversight committee maintains their own criteria for assessing and approving broker-dealers, as well as ongoing monitoring procedures for approved broker-dealers. Criteria includes any or all of the following: (1) broker’s ability to provide best execution capabilities in the types of securities traded to accomplish defined client directives for use of minority and women owned brokerage firms; (2) investment ideas; (3) research capabilities; (4) settlement capabilities; (5) reasonableness of commissions; (6) accessibility to trading personnel; (7) general reputation, including regulatory history of the firm; (8) financial stability/creditworthiness; and (9) trade desk opinion of the firm. For equity trades, we may also take into consideration the quality of research provided by executing broker-dealers and its usefulness in the management of client accounts. Refer to the research and soft dollars section above. Client Direction Clients may, upon written direction, request us to execute a portion of their trades through a particular broker-dealer. Typically, the client has an arrangement with such broker-dealer, which results in the client receiving some benefit from the broker-dealer in exchange for the directed brokerage. Although we generally discourage such direction, we do permit client direction in certain circumstances, ensuring that clients are apprised of the potential risks associated with directed brokerage, which may result in:  higher commissions, larger spreads or less favorable net prices than would be the case if RBC GAM-US selected the brokers;  loss in benefits that accrue in aggregating orders with similar trades for other client accounts; or  disparity in returns to those of other client accounts with similar strategies that do not direct brokerage. Similarly, in the case of client accounts that are custodied at broker-dealers, we have discretion to select brokers or dealers other than the custodians when necessary to fulfill our duty to seek best execution of transactions for client accounts. However, brokerage commissions and other charges for transactions not effected through the custodian are charged to the client. For this reason, it is likely that most, if not all, transactions for such clients will be effected through the broker custodian.

On occasion, we instruct the executing broker to credit a portion of a block trade to another broker, a common practice known as a step out. Generally, this occurs when numerous allocations are blocked into one single trade order, whereas one or more of the clients participating in the block have placed trade direction to one or more brokers other than the executing broker. A step out, in this case, allows our traders to block a trade order where all participating allocations receive the same price and facilitates specific client direction to trade with a specified broker(s). No client is disadvantaged by means of a step out. Aggregation & Allocation RBC GAM-US provides investment advisory services to many different types of client accounts. Certain portfolio management decisions may affect more than one account, for example when we decide to take an investment action with respect to all of the accounts we manage in a certain style. This results in multiple trading orders relating to the same security but for different client accounts. In these cases, we may combine or aggregate purchase or sale orders for more than one client when we believe such aggregation is consistent with its duty to seek best execution. Such aggregation may be able to reduce commission costs or market impact costs on a per-share and per-dollar basis. The decision to aggregate is only made after we determine: the aggregation will not result in favoring any account over another; it does not systematically advantage or disadvantage any account; it does not receive any additional compensation or remuneration solely as the result of the aggregation; and each participating account will receive the average share price and will share pro rata in the transaction costs. Equity Aggregation & Allocation Our U.S. Equity Investment Teams may encounter occasions when equity clients may pay disparate transaction costs due to minimum charges per account imposed by either the broker effecting the transaction or the client’s custodian. If there is an open order and a subsequent similar order for the same security for a different account is received by RBC GAM-US’s trading desk, such subsequent order will generally be aggregated with any remainder of the original order consistent with the considerations set forth above. RBC GAM-US may determine that an equity order will not be aggregated with other orders for a number of reasons. These reasons may include: the account’s governing documents do not permit aggregation; a client has directed that trades be executed through a specific broker-dealer; aggregation is impractical because of specific trade directions received from the portfolio manager, e.g., a limit order; the order involves a different trading strategy; or if we otherwise determine that

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RBC Global Asset Management (U.S.) Inc. aggregation is not consistent with seeking best execution. When we determine that multiple orders cannot be aggregated for equity clients, we have adopted procedures that seek to ensure client account orders are treated fairly and equitably over time. RBC GAM-US equity allocation practices are based on the premise that all clients and investment funds are given a fair opportunity to invest in a security that is appropriate for the specific client or Fund. Each portfolio manager makes the final determination as to whether a particular investment opportunity is appropriate for the specific client or specific investment fund. Therefore, both our U.S.-based Investment Management and Canadian-based Equity Management teams will not intentionally favor or disfavor any client, class of client, or investment fund in the allocation of investment opportunities so that over a period of time, such opportunities are allocated among clients and Funds fairly and equitably.

As a general matter, the U.S. Equity Investment Team groups equity accounts and uses random order sequencing in an effort to ensure that all accounts are treated fairly over time. We categorize equity accounts into three groups: • Group 1: accounts that can be aggregated because they have no trading limitations or any such trading limitation can be successfully addressed using step-outs; • Group 2: client-directed accounts, some trades may be aggregated within this group if they share a common directed broker, and wrap programs (accounts aggregated at the sponsor level); and • Group 3: model portfolios, where we do not provide trade execution services, but merely transmit model portfolio information to the model sponsors or their overlay managers, who then decide whether and when to execute such instructions.

Group (1) accounts are block traded and are always traded first. For Group (2) accounts, random order sequence would determine the trade order for directed brokers and wrap programs. If there is more than one directed broker or wrap program, random order sequence would determine the order of accounts within each group. Group (3) trades are communicated to the model sponsor or overlay manager after trading is complete for Groups (1) and (2). Clients in Group 2 may obtain a price that is different, in some cases more favorable and in some cases less favorable, than Group 1 trades that are executed first due to external factors (market volatility, macro-economic events, security-specific news, monetary policy announcements, etc.) that influence daily market movements. It is GAM-US’s belief that, over time, both Group 1 and Group 2 trades are treated fairly and equitably and share equally in the exposure to external market factors.

Wrap Fee Programs Another factor in the selection of broker-dealers is whether the client account is part of a wrap fee program. As previously disclosed in Item 4, RBC GAM-US has been retained as an investment manager in a number of wrap fee programs. Under most wrap programs, clients are not charged separate commissions or other transaction costs on each trade so long as the wrap sponsor (or its broker-dealer affiliate) executes the trade. A portion of the wrap fee generally is considered as “in lieu of commissions” or other transaction costs. Where permitted by wrap program terms, we may execute a transaction through a broker-dealer other than the wrap program sponsor where we believe that such trade would result in the best price and execution under the circumstances. However, in most situations trades will be executed with the introducing wrap program sponsor (or its broker-dealer affiliate) so as to avoid additional brokerage costs or other transaction costs in addition to the wrap fee by using other broker-dealers.

As described above, Group 2 accounts include wrap fee program accounts and client-directed accounts. Random order sequence determines the trade order for directed brokers and wrap programs. If there is more than one directed broker or wrap program, random order sequence would determine the order of accounts within each group.

In wrap programs, Group 2 accounts, where we are directed to use the wrap sponsor or its affiliate as broker-dealer, we may be unable to obtain volume discounts, best price or best execution. Although it has been our experience that the broker-dealers to which we are required to direct transactions under a wrap program generally can offer best execution under the circumstances, no assurance can be given that this will continue to be the case in the future. Depending upon the level of the wrap fee charged by a wrap sponsor, the amount of portfolio activity in a client’s account, the value of the custodial and other services that are provided under a wrap arrangement and other factors, a wrap client should consider whether the wrap fee would exceed the aggregate cost of such services if they were to be provided separately and if we were free to negotiate commissions. Program clients should review all materials available from a third-party sponsor

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RBC Global Asset Management (U.S.) Inc. concerning the program, the sponsor and the program’s terms, conditions and fees. Refer to Item 4 for additional information on wrap fee programs.

Model Portfolios Group 3 accounts, the model portfolios, are sent to the model sponsors or overlay managers before market open on the business day after the trading for Groups 1 and 2 have been completed. RBC GAM‐US has no influence over when or even if model changes are implemented.

Given this sequencing, account trades using the model portfolio changes that are executed at the discretion of the model recipient are subject to price movements, particularly if they are trading after large block trades, involve thinly‐traded or illiquid securities or occur in volatile markets. This may result in model portfolio recipients obtaining a price that is different and in some cases less favorable than those account trades that are executed first, particularly in the case of model portfolios that hold small or mid-capitalization securities. Refer to Item 4 for additional information on model portfolios. Partial Fills On occasion, an aggregated order involving multiple equity accounts does not receive sufficient securities to fill all of the accounts. For those equity clients, if an aggregated order cannot be filled in one day (a “partial fill”), the executed portion of the order is automatically allocated to the participating accounts pro rata on the basis of order size.

Equity Allocation Review RBC GAM-US reviews equity allocation to monitor the fair and equitable treatment of all client accounts.

Fixed Income Aggregation & Allocation RBC GAM-US Fixed Income trading is built on the premise that all client account orders are treated fairly and equitably. We recognize that certain types of securities may be better suited for particular accounts given each account’s investment strategy and/or investment restrictions. In allocating orders to fixed income clients, we first determine that the securities are consistent with guidelines and a particular style of account. We then addresses specific account needs, which generally include, among other factors, a review of portfolio duration, sector allocation, security characteristics, cash positions and typical size of positions within the account. Some issues purchased are small or have limited availability. It is often impractical to allocate a purchase across all eligible accounts, as block sizes are often too small. In such cases, the portfolio manager has discretion to determine allocations based on a number of considerations described below.

In most instances, it is possible for the portfolio manager to prioritize the allocation of securities among accounts in order to meet the best “fit and need.” Factors considered in such prioritization include specific needs, amount of cash available, state specific needs, amount of portfolio in similar types of credits, current maturity structure of portfolio, and whether the account was allocated securities in recent purchases. As a result of this approach, not all eligible accounts will participate in every available opportunity. It is our policy to allocate various purchases over time in a manner that is fair to all clients. Allocations are reviewed to demonstrate adherence to allocation policies. Trade allocation methodologies for the Canadian-based Fixed Income Management Teams specify how trade orders are to be allocated across portfolios and are made available to traders, analysts, fund managers, portfolio managers, and other relevant parties. RBC GAM-US’s policy and practice is not to intentionally favor or disfavor any client, class of clients, or investment fund in the allocation of investment opportunities such that, over a period of time, investment opportunities are allocated among clients and investment funds fairly and equitably.

For fixed income securities specifically, the trader or fund manager must decide which broker to use, based on best execution. Fixed Income investment portfolios with similar objectives and characteristics (i.e., similar risk profiles) are constructed based on consistency of duration, maturity distribution and issuer selection distribution, although they may not have the identical security holdings. Differences in holdings combined with market movements tend to result in the respective risk profiles drifting over time. Trade allocation in bonds example, aims primarily for consistency among portfolios with similar risk profiles, including realigning them as necessary.

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RBC Global Asset Management (U.S.) Inc. OTHER TRANSACTIONS OTC We primarily place fixed income over-the-counter (“OTC”) transactions through broker dealers, market-makers and electronic communication networks (“ECNs”). Trades that are not executed through an electronic trading platform are evaluated using multiple sources to determine if the price is favorable under the circumstances. At times, multiple offerings or bids for a security are unavailable and an order needs to be worked at a certain level with a specific broker-dealer. All trading activity is pursued with the intent of best execution as fiduciary for the benefit of our clients unless directed otherwise. New Issues To the extent that we participate in new issues, private placements, or initial public offerings (IPOs) (“new issue”), we treat eligible client accounts fairly and equitably. Generally the trade order will be placed before the offering prices and all participating accounts are identified, while also taking into consideration each client’s investment objectives, restrictions and tax circumstances; a client’s tolerance for risk and high portfolio turnover; the nature, size and investment merits of the limited offering; the size of a client’s account and the client’s cash availability and other holdings; and other current or expected competing investment opportunities. For equity accounts, if the allocation for the new issue is less than that requested, the securities received will be allocated pro rata based on the amount initially requested for each account. In allocating new issues to fixed income clients, we first determine that the securities are consistent with guidelines and a particular style of account. We then addresses specific account needs, which generally include, among other factors, a review of portfolio duration, sector allocation, security characteristics, cash positions and typical size of positions within the account.

Correcting Trade Errors In the event RBC GAM-US makes a trade error, it is our policy to correct the trade error and absorb any financial loss as a result of that error. Further, we do not use soft dollars or directed trades to correct an error, or attempt to correct the error using another client account. If a trade error unfavorably affects the client’s account, we will reimburse the account. The client will not be financially disadvantaged. Gains as a result of a trade error that has settled in a client account will be maintained in the client account unless the client specifically instructs us that they do not wish to retain the gain. When an error is identified before settlement, we may move the trade to our error account. Any funds remaining in our error account are donated to a charitable organization on a periodic basis.

Item 13 – Review of Accounts

Overview RBC GAM-US provides monitoring and oversight of the discretionary accounts we manage through our trade order management and portfolio compliance platforms. Accounts are reviewed by Portfolio Managers, Client Service, investment policy compliance personnel, as well other relevant RBC GAM-US employees./ Reviews monitor for consistency with the investment mandate applicable to the account in terms of (1) allocation and diversification of portfolio assets; (2) duration and maturity for fixed income accounts; (3) cash flows; (4) compliance with any specific restrictions established by the client; (5) the performance of individual securities or asset classes compared against targeted benchmark; (6) material economic or market events; (7) changes in a client’s financial profile as communicated to RBC GAM-US; and/or (8) changes that are recommended in overall investment policy or strategy by RBC GAM-US portfolio managers.

Investment policy compliance is monitored through the use of the Charles River Investment Management System (“CRIMS”), a trade order management and investment policy compliance system. Each client’s investment policy statement is modeled in CRIMS. Investment policy compliance personnel monitor and regularly review system results with the investment and service teams to verify the portfolio holdings are in line with the client’s investment policy statement.

Additionally, to help monitor investment risk at the strategy level, RBC GAM-US maintains a Portfolio Risk and Analytics team, responsible for developing independent measure of absolute and benchmark relative risk, creating and aggregating performance attribution analysis and reporting performance and risk profiles through formal investment scorecards. On a monthly basis, performance and risk characteristics are presented and reviewed by senior investment leadership.

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RBC Global Asset Management (U.S.) Inc. Generally, unless more frequent meetings are requested by the client, we seek to meet with each client on an annual basis to review goals, objectives, holdings, and portfolio performance to ascertain the continued appropriateness of the client’s investment strategy. In addition, RBC GAM-US senior management may formally review some accounts more frequently. Our senior management may also meet with portfolio managers or other investment personnel to discuss accounts under their management.

Client Reporting RBC GAM-US delivers client reports (as directed by each client). Our client reports include portfolio and benchmark performance and characteristics; portfolio holdings; and transactions for the period. For certain clients, client reports may only identify portfolio holdings. Market commentary is made available separately to our clients.

At least quarterly, client reports are made available through our secure client-only website (https://clients.us.rbcgam.com) and are also sent in hard copy, if requested. Clients receive e-mail notifications when new client reports are posted and available. RBC GAM-US encourages clients to review their reports and to promptly notify us if they identify any discrepancies or have questions.

Item 14 – Client Referrals and Other Compensation

Referrals We engage in third-party referral arrangements, which include the use of our affiliates and in limited circumstances, unaffiliated broker/dealers and investment advisers. These arrangements create a conflict of interest by providing an incentive for the affiliate or third-party solicitor to recommend us over another investment adviser. All referral and marketing relationships meet the requirements of Rule 206(4)-3 and 206(4)-5 under the Advisers Act. While limited, we engage non-affiliated solicitors through referral arrangements. RBC GAM-US will pay a retainer and/or a portion of the advisory fee that we receive from the referred client. Any solicitor referral arrangement we have in place is disclosed in writing to the client and in compliance with the other requirements of Rule 206(4)-3 and 206(4)-5 under the Advisers Act. Client fees are not increased as a result of any referral fees.

Other Compensation We also have arrangements with our affiliates, which allow us to receive cash compensation for referring clients to them. We disclose these types of referral arrangements to the client at the time of solicitation. Clients do not pay higher fees as a result of any referral arrangement.

Payments to Others As part of its ordinary business, RBC GAM-US, or a related person may send corporate gifts or pay for meals and entertainment, such as golf fees or tickets to cultural or sporting events for clients who engage in business with us, or our affiliates. RBC GAM-US employees may also receive corporate gifts, meals and entertainment. The giving and receipt of gifts and other benefits are subject to certain limitations as outlined in our Gifts and Entertainment Policy.

RBC GAM-US also makes charitable contributions or sponsors charitable events at the request of others. Payments may vary by organization, depending on the nature of our and our affiliated investment advisers’ managed account activities with the recipient and the amount of client assets under RBC GAM-US or its affiliated investment advisers’ management. Payments are subject to internal review and approval of RBC GAM-US or its affiliates.

All gifts given by RBC GAM-US or our employees to our business partners or received by RBC GAM-US personnel must comply with all applicable regulations and are subject to review by our Chief Compliance Officer.

Item 15 – Custody

Clients should receive at least quarterly statements from their broker-dealer, bank, or other qualified custodian that holds and maintains client assets. Clients are encouraged to contact their custodian and request copies of their statements if they are not receiving them. RBC GAM-US urges you to carefully review such statements and compare such official custodial records to the client reports we provide you. The account values reflected in RBC GAM-US client reports may vary from custodial statements

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RBC Global Asset Management (U.S.) Inc. based on accounting procedures, reporting dates, or valuation methodologies of certain securities and are not intended as a substitute for accounts statements provided by your qualified custodian. Refer to Item 13 for more information about client reports.

RBC GAM-US is deemed to have custody of client assets in select and limited cases, including instances where clients have selected to custody their assets with one of our affiliates, as well as with certain private funds. For client assets, RBC GAM-US complies with all disclosure and regulatory requirements and has contracted with an external third party auditor to conduct surprise annual audits in compliance with applicable SEC rules. For private funds, RBC GAM-US engages an independent public accountant to audit the financial statements, which are then provided to each private fund investor within 180 days of fiscal year end. In the event of an inadvertent receipt of a check or other financial instrument payable to a client, RBC GAM-US reserves the right to send the check or instrument to the client or its custodian rather than back to the original sender when we believe that such procedure provides the best overall protection for the underlying assets. In addition, RBC GAM-US provides clients with monthly or quarterly client reports, which include disclosures directing clients to review the account statements provided by their custodians.

Item 16 – Investment Discretion

RBC GAM-US offers both discretionary (clients who have granted us written authorization to execute transactions for their accounts without prior approval) and non-discretionary (clients who require transactions be either traded by or authorized by them in advance) investment management services. Before RBC GAM-US will assume discretionary authority for a client, the client and RBC GAM-US must enter into an investment management agreement that grants us authority to execute trades on behalf of the client. Regardless of whether discretion is granted to us, investment management will be conducted in a manner consistent with the stated investment objectives of the client account. Clients, or in the case of a wrap fee account, the program sponsor, may impose reasonable restrictions, such as those regarding particular security classes, specific issuers and other guidelines, such as asset allocation ranges, as well as statutory restrictions. With the exception of account restrictions discussed above, for accounts that have granted us investment discretion, we are generally authorized to make the following determinations, consistent with each client’s investment goals and policies, without client consultation or consent before a transaction is effected:  Which securities or other investments to buy or sell;  The total amount of securities or other investments to buy or sell;  The broker or dealer through whom securities are bought or sold;  The commission rates at which securities or other investment transactions for client accounts are effected; and  The price at which securities or other investments are to be bought or sold, which may include dealer spreads or markups and transactions costs. However, there are instances where RBC GAM-US has accepted accounts for which it has discretionary authority to purchase securities for the account, but not the authority to select the executing broker-dealer for the transactions. Refer to Item 12 for more information on directed brokerage.

Investment Guideline Changes Investment guidelines, restrictions, and changes to investment guidelines must be provided to RBC GAM-US in writing.

Item 17 – Voting Client Securities

Many of our clients have granted us discretion to vote proxies on their behalf. In order to assist us in exercising that discretion, we rely on services provided by a third-party vendor, which acts as our primary resource for proxy research and voting recommendations. RBC GAM-US utilizes customized proxy guidelines and engages (1) Institutional Shareholder Services Inc. (“ISS”) as its primary research and voting service provider and (2) RBC Global Asset Management Inc., an affiliate, to review

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RBC Global Asset Management (U.S.) Inc. ISS’ recommendations and votes are in line with the customized proxy guidelines. Additionally, clients may choose to withhold discretion from RBC GAM-US to vote proxies and engage a third-party proxy voting service, or to vote their own proxies directly.

We have satisfied ourselves that the analysis of proxy issues provided to us by our third-party vendors is consistent with our belief that proxies should be voted in shareholders’ long-term interests. The engagement of third-party vendors to assist us with our proxy voting process is not intended to be a delegation of our proxy voting responsibilities and does not relieve us of our fiduciary obligations to clients with respect to the voting of proxies. Accordingly, we retain the right to vote clients’ proxies in a manner that is different from what our vendors recommend, where we believe that to do so would be in the client’s best interests and is not contrary to the terms of the investment management agreement. We have established a Proxy Committee, which is responsible for establishing, monitoring and reviewing our policies and guidelines with respect to proxy voting, but which does not generally consider the manner in which specific proxies are or have been voted. The Proxy Committee is also responsible for providing oversight of our relationship with the provider of our proxy voting policy and proxy research. The Proxy Committee does not have oversight over other proxy voting services that are chosen by clients or clients who vote proxies directly.

Clients may obtain a copy of our proxy voting policy and procedures upon request by contacting their institutional portfolio manager. Clients may also obtain information from RBC GAM-US about how RBC GAM-US voted any proxies on behalf of their account(s).

Item 18 – Financial Information

RBC GAM-US has no financial commitment that impairs its ability to meet contractual and fiduciary commitments to clients, and has not been the subject of a bankruptcy proceeding.

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RBC Global Asset Management (U.S.) Inc. Fee Schedule Appendix Equity Strategy Fee Schedule AUM Diversified Large Cap Core

Annual Fee Schedule Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Large Cap Value

0.70% 0.60% 0.50% 0.40%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Concentrated Large Cap Value

0.70% 0.60% 0.50% 0.40%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Mid Cap Value

0.90% 0.75% 0.65% 0.50%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Mid Cap Growth

0.85% 0.70% 0.65% 0.60%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Emerging Markets Equity

0.85% 0.70% 0.65% 0.60%

Minimum Account Size $75 million

First $50 million of assets 0.95% Next $50 million of assets 0.85% Assets exceeding $100 million 0.80% Emerging Markets Equity – Small Cap

Minimum Account Size $75 million

First $50 million of assets Next $50 million of assets Assets exceeding $100 million Emerging Markets Equity – Value

1.15% 1.05% 1.00%

Minimum Account Size $75 million

First $50 million of assets Next $50 million of assets Assets exceeding $100 million International Focus Equity

0.95% 0.85% 0.80%

Minimum Account Size $75 million

First $50 million of assets Next $50 million of assets Assets exceeding $100 million

0.70% 0.60% 0.55%

AUM SMID Cap Growth

Annual Fee Schedule Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Small Cap Growth

0.95% 0.85% 0.75% 0.65%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Small Cap Core

1.00% 0.95% 0.85% 0.75%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Small Cap Value

1.00% 0.90% 0.80% 0.70%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Microcap Core

1.00% 0.95% 0.85% 0.75%

Minimum Account Size $10 million

First $25 million of assets Assets exceeding $25 million Concentrated Microcap

1.25% 1.00%

Minimum Account Size $10 million

First $25 million of assets Assets exceeding $25 million Concentrated Mid Cap Value

1.25% 1.00%

Minimum Account Size $10 million

First $10 million of assets Next $15 million of assets Next $25 million of assets Assets exceeding $50 million Global Resources

0.95% 0.80% 0.75% 0.70%

Minimum Account Size $50 million

First $100 million of assets Assets exceeding $100 million Canadian Equity Value

0.85% 0.75%

Minimum Account Size $100 million

First $100 million of assets Assets exceeding $100 million Global Focus Equity

0.55% 0.45%

Minimum Account Size $75 million

First $50 million of assets Next $50 million of assets Assets exceeding $100 million

0.70% 0.60% 0.55%

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RBC Global Asset Management (U.S.) Inc. Fixed Income Strategy Fee Schedule AUM

Core Cash Management

Annual Fee Schedule Minimum Account Size $100 million

First $100 million of assets Assets exceeding $100 million Short Core

0.12% 0.10%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million Broad Market Core

0.30% 0.20% 0.15% 0.10%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million Intermediate Core

0.35% 0.25% 0.20% 0.15%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million Short Government

0.35% 0.25% 0.20% 0.15%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million Intermediate Municipal Core

0.25% 0.15% 0.10% 0.08%

Minimum Account Size $15 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million

0.30% 0.25% 0.20% 0.15%

AUM

Annual Fee Schedule

Access Capital Community Investment

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Assets exceeding $50 million Intermediate Government

0.40% 0.30% 0.25%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million Government Cash Management

0.30% 0.20% 0.15% 0.10%

Minimum Account Size $100 million

First $100 million of assets Assets exceeding $100 million Ultra Short

0.12% 0.10%

Minimum Account Size $50 million

First $50 million of assets Next $50 million of assets Assets exceeding $100 million U.S. Investment Grade

0.20% 0.15% 0.10%

Minimum Account Size $25 million

First $25 million of assets Next $25 million of assets Next $50 million of assets Assets exceeding $100 million

0.35% 0.30% 0.25% 0.20%

RBC Global Asset Management (U.S.) Inc. Risk Disclosure Appendix Active Management Risk. The portfolio is actively managed. The Adviser and each individual portfolio manager will apply investment techniques and risk analyses in making investment decisions, but there can be no guarantee that these decisions will produce the desired results.

Call Risk. The possibility that during periods of falling interest rates, a bond issuer will “call” – or repay – a high-yielding bond before its maturity date. If a security is called, the proceeds may have to be reinvested at lower interest rates resulting in a decline in income.

Concentration Risk. Investments are expected to be closely tied to a specific name, industry, or benchmark. As a result, performance may be more volatile than the performance of a portfolio that does not concentrate its investments in a particular economic industry or sector. Counterparty Risk. The possibility that counterparty could fail, or a clearinghouse, guarantor or any service provider to the portfolio. The inability or unwillingness of others to honor obligations could result in credit losses incurred from late payments, failed payments and default. In times of general market turmoil, even large, well-established financial institutions may fail rapidly with little warning.

CRA Strategy Risk. The Advisor will take into account the goal of holding securities in designated geographic areas in determining which securities to purchase and sell. Accordingly, investment decisions will not be exclusively based on the investment characteristics of the securities, which may or may not have an adverse effect on investment performance. CRA qualified securities in geographic areas sought by a portfolio may not provide as favorable return as CRA qualified securities in other geographic areas. In addition, a portfolio may sell securities for reasons relating to CRA qualification, at times when such sales may not be desirable for investment purposes. Further, a portfolio may hold short-term investments that produce relatively low yields pending the selection of long-term investments believed to be CRA-qualified.

Currency Risk. The possibility that could arise from the change in price of one currency against another.

Derivatives Risk. Derivatives are financial instruments that have a value, which depends upon, or is derived from, the value of something else, such as one or more underlying securities, pools of securities, options, futures, indexes or currencies. Losses involving derivative instruments may be substantial, because a relatively small price movement in the underlying security (ies), option, future, index or currency may result in a substantial loss for the portfolio. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility within the portfolio. Derivative instruments will typically increase a portfolio’s exposure to material risks to which it is otherwise exposed, and may expose the portfolio to additional risks, including correlation risk, counterparty credit risk, hedging risk, leverage risk, and liquidity risk. ▪ Correlation risk Related to hedging risk and is the risk that there may be an incomplete correlation between the hedge and the opposite position, which may result in increased or unanticipated losses. ▪ Counterparty credit The risk that a counterparty to the derivative instrument becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties and the portfolio may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. ▪ Hedging risk The risk that derivative instruments used to hedge against an opposite position may offset losses, but they may also offset gains. There is no guarantee that a hedging strategy will eliminate the risk, which the hedging strategy is intended to offset, which may lead to losses within the portfolio. ▪ Leverage risk The risk that losses from the derivative instrument may be greater than the amount invested in the derivative instrument. ▪ Liquidity risk The risk that the derivative instrument may be difficult or impossible to sell or terminate, which may cause the portfolio to be in a position to do something the portfolio managers would not otherwise choose, including accepting a lower price for the derivative instrument, selling other investments or foregoing another, more appealing investment opportunity. Derivative instruments, which are not traded on an exchange, may have increased liquidity risk. Certain derivatives have the potential for unlimited losses, regardless of the size of the initial investment.

RBC Global Asset Management (U.S.) Inc. Foreign Risk. The risk of loss due to lower levels of foreign government regulation, public information and/or economic, political and social stability in these countries. Loss may also result from the imposition of exchange controls, confiscations and other government restrictions, or from problems in registration, settlement or custody. Foreign risk also involves the risk of negative foreign currency rate fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the portfolio could have exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate significantly over short periods of time. General Economic and Market Conditions Risk. The success of the portfolio's investment program may be affected by general economic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political circumstances. These factors may affect the level and volatility of securities prices and the liquidity of investments. Unexpected volatility or illiquidity could impair profitability or result in losses.

Government Intervention in Financial Markets Risk. Instability in the financial markets has led the U.S. Government to take unprecedented actions to support certain financial institutions and certain segments of the financial markets that experienced extreme volatility. Regulatory organizations may take future legislative or regulatory actions that may affect the operations of a portfolio or its investments or preclude a portfolio's ability to achieve its investment objective. Government Obligations Risk. Obligations of U.S. Government agencies, authorities, instrumentalities and sponsored enterprises (such as Fannie Mae and Freddie Mac) have historically involved little risk of loss of principal if held to maturity. However, the maximum potential liability of the issuers of some of these securities may greatly exceed their current resources and no assurance can be given that the U.S. Government would provide financial support to any of these entities if it is not obligated to do so by law. In September 2008, the U.S. Treasury and the FHFA announced that Fannie Mae and Freddie Mac would be placed into a conservatorship under FHFA. The effect that this conservatorship will have on the entities’ debt and securities guaranteed by the entities is unclear. Growth Investing Risk. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections.

Interest Rate Risk. The values of some or all investments may change in response to movements in interest rates. If interest rates rise, the values of debt securities will generally fall and vice versa. In general, the longer the average maturity or duration of an investment portfolio, the greater the sensitivity to changes in interest rates. Issuer/Credit Risk. The possibility that issuers of securities may default on the payment of interest or principal on the securities when due, which would cause a portfolio to lose money.

Leverage Risk. Leverage occurs when the portfolio increases its assets available for investment using borrowings, short sales, derivatives, or other instruments or techniques. Leverage may exaggerate the effect of a change in the value of a security, causing the portfolio to be more volatile than if leverage was not used. Each leveraged account will either (1) segregate liquid assets, (2) “cover” the transactions that introduce such risk or (3) pledge portfolio assets as collateral for its borrowings. If an account is unable to payback the borrowings, it may risk losing the pledged assets. Lenders also may require that an account agree to loan covenants that could restrict its investment flexibility in the future, and loan agreements may provide for acceleration of the maturity of the indebtedness if certain financial tests are not met. A portfolio may be required to dispose of or seek prepayment of assets at a time it would otherwise not do so to repay indebtedness in a timely fashion. Liquidity Risk. Investments in illiquid securities or repurchase agreements with maturities longer than seven days may be difficult or impossible to sell at desirable prices due to lack of marketability.

Market Risk. One or more markets in which the portfolio invests may go down in value, sometimes sharply and unpredictably, and the value of the securities may fall or fail to rise. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The success of a portfolio’s investment program may be affected by general economic and market conditions. These conditions may affect the level and volatility of securities prices and the liquidity of investments. Unexpected volatility or illiquidity could impair profitability or result in losses.

RBC Global Asset Management (U.S.) Inc. Mid-Sized Company Risk. Stocks of mid-sized companies may carry greater risks than those of larger companies because mid-sized companies may have less management experience, competitive strengths and financial resources than larger companies. Mid-sized companies may also be more vulnerable to adverse business or economic events and may be more volatile than larger companies.

Prepayment Risk. The value of some mortgage-backed and asset-backed securities may fall because of unanticipated levels of principal prepayments that can occur when interest rates decline. Principal and interest payments on such securities depend on payment of the underlying loans, though issuers may support creditworthiness via letters of credit or other instruments.

Qualification for CRA Credit Risk. For an institution to receive CRA credit with respect to investments, the portfolio must hold CRA qualifying investments that relate to the institution’s delineated CRA assessment area. All investments are expected to be considered eligible for regulatory credit under the CRA. There is no guarantee, however, that an investor will receive CRA credit if, for example, a state banking regulator does not consider an account eligible for regulatory credit. If CRA credit is not given, there is a risk that an investor may not fulfill its CRA requirements.

Small and Micro Company Risk. Stocks of smaller and less seasoned companies involve greater risks than those of larger companies. These companies may not have the management experience, financial resources, product diversification and competitive strengths of larger companies. Smaller companies may be more sensitive to changes in the economy overall. Historically, small company stocks have been more volatile than those of larger companies. As a result, an account's value may be subject to rapid and substantial changes. Small company stocks tend to be bought and sold less often and in smaller amounts than larger company stocks, which could result in a limited ability to sell a large quantity of stock of a smaller company. Small company risk can be intensified when investing in micro-cap companies. The prices of micro-cap stocks are generally more volatile and their markets are less liquid relative to larger companies. An investment may involve considerably more risk of loss and its returns may differ significantly from investing in larger companies.

Small Company Risk. Stocks of smaller and less seasoned companies involve greater risks than those of larger companies. These companies may not have the management experience, financial resources, product diversification and competitive strengths of larger companies. Smaller companies may be more sensitive to changes in the economy overall. Historically, small company stocks have been more volatile than those of larger companies. As a result, an account's value may be subject to rapid and substantial changes. Small company stocks tend to be bought and sold less often and in smaller amounts than larger company stocks, which could result in a limited ability to sell a large quantity of stock of a smaller company. The prices of small cap stocks are generally more volatile and their markets are less liquid relative to larger companies. An investment may involve considerably more risk of loss and its returns may differ significantly from investing in larger companies.

Tax Risk. The risk that the issuer of a security will fail to comply with certain requirements of the Internal Revenue Code, which would cause adverse tax consequences. Changes in federal or state tax laws could cause the prices of tax-exempt securities to fall and/or could affect the tax-exempt status of the securities. A portion of distributions may be subject to the federal alternative minimum tax. Value Investing Risk. Value stocks may not increase in price as anticipated if they fall out of favor with investors or the markets favor faster-growing companies.

RBC Global Asset Management (U.S.) Inc. Privacy Notice Wrap Investors At RBC Global Asset Management (U.S.) Inc (“RBC GAM-US”), protecting privacy is a responsibility we take seriously. That is why we would like to take this opportunity to explain to you that as an investor in a wrap program with funds managed by RBC GAM-US (“Wrap Investor”), you can feel confident that we are committed to safeguarding your personal information.

Our Commitment to Your Privacy. RBC GAM-US is sensitive to the privacy concerns of Wrap Investors. We have a longstanding policy of protecting the confidentiality and security of information we collect. We are providing you with this notice to help you better understand why and how we collect certain personal information, the care with which we treat that information and how we use that information.

Confidentiality and Security We consider all information we have about you to be confidential, including the fact that you are a Wrap Investor (unless you tell us otherwise). Your information will only be handled in the manner described in this notice. We restrict access to information about you to those employees and authorized agents who need to know that information in order to provide products or services to you. We maintain physical, electronic and procedural safeguards that comply with federal standards to maintain the confidentiality of your information.

Information We Collect At RBC GAM-US we collect the following types of information about you:  Information, either directly or through the sponsor wrap account program you participate in, contained in new account forms, applications, or agreements you enter to receive our products or services.  Information about your transactions with us.

Third Parties to Whom We Disclose Information We do not sell information about our current or former Wrap Investors. We do not share any information about Wrap Investors with anyone, except as necessary to process your business or where required or permitted by law or regulation.

Sharing Within the RBC Family* We do not share information regarding Wrap Investors within the RBC Family for marketing purposes.

* The RBC Family of companies is a group of global financial services companies dedicated to serving your financial needs. It is comprised of Royal Bank of Canada (“RBC”) and its subsidiaries. It is one of the largest providers of financial products and services in the world. RBC Global Asset Management (U.S.) Inc. is a federally registered investment adviser founded in 1983. RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management (U.S.) Inc., RBC Alternative Asset Management Inc., and BlueBay Asset Management LLP, which are separate, but affiliated corporate entities. ®/™ Trademark(s) of Royal Bank of Canada. Used under license. © 2013 RBC Global Asset Management (U.S.) Inc. Equal Opportunity Employer M/F/D/V 09/2013

RBC Global Asset Management (U.S.) Inc. Proxy Voting Policy General This policy describes the manner in which RBC Global Asset Management (U.S.) Inc. (“Adviser”) discharges its obligations to clients with respect to the voting of clients’ proxies. This policy has been designed to ensure that the Adviser: (a) is acting with the appropriate level of care, skill, prudence and diligence; and (b) votes the proxies of its clients solely in their long-term best interests or, in the case of Employee Retirement Income Security Act (“ERISA”) plans and public pension plans, in the long-term interests of their participants and beneficiaries and for the exclusive purpose of providing benefits to them. Responsibility to Vote Proxies General In instances where the Adviser has been granted full discretion over the client’s assets, the Adviser votes proxies on behalf of the client unless the client has specifically instructed the Adviser not to do so, has reserved voting authority for itself, or has delegated voting authority to a third-party. ERISA Accounts The Adviser recognizes that, as an investment manager appointed to manage the accounts of ERISA plans, the United States Department of Labor takes the position that the Adviser has an obligation to vote proxies where (a) the client has specifically directed it to do so or (b) the client has not specifically directed it to do so, but also has not specifically precluded it from doing so. Accordingly, ERISA accounts that wish to retain responsibility for proxy voting or to assign that responsibility to a different investment manager or proxy voting service must either indicate in their investment management agreement or investment policy statement that the Adviser is not responsible for voting proxies or otherwise indicate in writing to the Adviser that it is precluded from voting proxies. Engagement of Proxy Research and Voting Services Institutional Shareholder Services The Adviser has engaged Institutional Shareholder Services Inc. (“ISS”), owned by VISS Holdings, Inc., an affiliate of Vestar Capital Partners as its primary proxy research and voting service. ISS’s analysis of proxy issues and recommendations in adherence to the Adviser’s custom proxy guidelines (the “Guidelines”) are consistent with the Adviser’s belief that proxies should be voted in shareholders’ long-term interests. The Guidelines is attached to this policy as Appendix A.

The Adviser has satisfied itself that ISS has implemented adequate policies and procedures, including information barriers, to ensure that its staff involved in the preparation of proxy research and recommendations are independent of the clients for whom its sister division, ISS Corporate Services, Inc. (“ICS”), provides corporate governance advice and services to corporate issuers. Because of these measures, ISS can make recommendations for voting proxies in an impartial manner and in the best interests of the Adviser’s clients. RBC Global Asset Management Inc. The Adviser has engaged RBC Global Asset Management Inc., (“RBC GAM Inc.”) an affiliate of the Adviser, to review ISS proxy recommendations and votes to ensure adherence to the Guidelines. The engagement of ISS and RBC GAM Inc. is not intended to be a delegation of the Adviser’s proxy voting responsibilities and does not relieve the Adviser of its fiduciary obligations to clients with respect to the voting of proxies. Accordingly, the Adviser retains the right to vote clients’ proxies in a manner that is different from what ISS and RBC GAM Inc. recommend, where the Adviser believes that to do so would be in the client’s best interests and is not contrary to the terms of the investment management agreement. Proxy Committee The Adviser’s Proxy Committee (the “Committee”) includes the RBC GAM-US CIO, the appointed Committee Chairperson, the Chief Compliance Officer, the head of each equity team, the Proxy Administrator and Alternate Proxy Administrator and such other Adviser staff involved in the proxy voting process, as the other members of the Committee deem necessary or desirable. A Committee Chairperson will be appointed by the RBC GAM-US CIO to ensure that the Committee meets on an as needed basis and to provide oversight and supervision of the proxy voting process. The Committee shall meet at least annually and minutes of the meetings shall be recorded. The Proxy Committee is responsible for establishing, monitoring, and reviewing the Adviser’s policies and guidelines with respect proxy voting, but does not generally consider the manner in which specific proxies are or have been voted. The Proxy Committee shall consider the Adviser’s fiduciary responsibility to all clients when addressing proxy issues. Oversight of Proxy Research and Voting Services The Proxy Committee will review the Proxy Voting Policy and the Guidelines at least annually in order to satisfy itself that the Policy and Guidelines continue to reflect what the Adviser believes to be in the best interests of its clients. The Proxy Committee will also conduct an annual review of specific voting recommendations for the previous year in order to satisfy itself that the recommendations are consistent with the Adviser’s written policies and guidelines.

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The Chairperson, Proxy Administrator, and the Chief Compliance Officer (or any other members of the Committee) will conduct an annual review of ISS’s policies regarding the management of ISS conflicts of interest, which may include a meeting or telephone interview with appropriate staff of ISS. The results of this review will be recorded and presented to the other members of the Committee. Although the Adviser will normally accept the ISS recommendations and vote clients’ proxies in adherence to the Guidelines without any additional review or analysis, the Proxy Committee may, from time to time, direct that the recommendations with respect to particular types of proxy issues be reviewed on a case-by-case basis (a “Reviewable Issue”) by one or more of its members prior to submitting the Adviser’s voting instructions. The results of any such review will be recorded and presented to the Committee. No Oversight of other Proxy Voting Services The Adviser does not conduct reviews of the proxy voting policies and guidelines of any other proxy voting service. Disclosure The Adviser’s Part 2A of its Form ADV summarizes these proxy voting policies and procedures and provides contact information for obtaining copies of them. Upon request, the Adviser will disclose to its clients how their proxies have been voted. All requests for information will be documented in SatuitCRM. The Adviser provides each ERISA client for which it votes proxies a summary of the client’s proxy votes at least annually. Business Owner

Proxy Administrator Proxy Chairperson Exhibits

Appendix A – RBC Global Asset Management Proxy Voting Guidelines Appendix B – Proxy Override Form Annual Review

At least annually, these policies and procedures will be reviewed for accuracy, and updated as needed. Approval Dates

Approved by the Operations Committee on July 1, 2005 Approved by the Operations Committee on December 16, 2009

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Approved by the Proxy Committee on August 5, 2011 Amended and approved by the Proxy Committee on March 30, 2012 Approved by the Operations Committee on April 11, 2012 Amended and approved by the Proxy Committee on September 3, 2013 Approved by the Operations Committee on September 17, 2013 Amended and approved by the Proxy Committee on January 3, 2015 Approved by the Operations Committee on February 4, 2015

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RBC Global Asset Management (U.S.) Inc. Proxy Voting Policy Appendix A

RBC Global Asset Management Proxy Voting Guidelines Updated January 2015

Proxy Voting Guidelines - January 2015

Table of Contents Introduction ......................................................................................................................................................... 1 Proxy Voting Policy ...................................................................................................................................... 1 Enhancing Governance ............................................................................................................................... 1 Proxy Voting Issues ..................................................................................................................................... 1 Proxy Voting Guidelines .............................................................................................................................. 2 1. Board of Directors ......................................................................................................................................... 3 1.1 Independence of the Board of Directors ......................................................................................... 3 1.2 Independence of the Chair ............................................................................................................. 3 1.3 Executive Chair ............................................................................................................................... 4 1.4 Risk Management ........................................................................................................................... 4 1.5 Board Size ...................................................................................................................................... 4 1.6 Committees of the Board ................................................................................................................ 5 1.7 Cumulative Voting ........................................................................................................................... 5 1.8 Staggered Boards ........................................................................................................................... 6 1.9 Director Attendance ........................................................................................................................ 6 1.10 Overboarding .................................................................................................................................. 6 1.11 Director Liability and Indemnification .............................................................................................. 6 1.12 Term Limits for Directors ................................................................................................................ 7 1.13 Performance Evaluation of Directors and Board ............................................................................ 7 1.14 Directors Proposed on a Single Ballot ............................................................................................ 7 1.15 In Camera Meetings ....................................................................................................................... 8 1.16 Voting for Directors ......................................................................................................................... 8 1.17 Audit Process .................................................................................................................................. 8 1.18 Audit Fees ....................................................................................................................................... 8 1.19 Board Diversity ............................................................................................................................... 9 2. Management and Director Compensation .................................................................................................... 9 2.1 Stock Option and Incentive Compensation Plans .......................................................................... 9 2.2 Expensing of Share Options ......................................................................................................... 11 2.3 Golden Parachutes ....................................................................................................................... 11 2.4 Employee Stock Purchase Plans ................................................................................................. 11 2.5 Aggregate Dilution from all Stock-Based Compensation Plans ................................................... 11 2.6 Director Compensation ................................................................................................................. 12 2.7 Director Retirement Benefits ........................................................................................................ 12 2.8 Employee Loans ........................................................................................................................... 12 2.9 Excessive Executive Compensation ............................................................................................. 12 2.10 Compensation Report and Say-on-Pay ........................................................................................ 13 2.11 Compensation Consultants .......................................................................................................... 14

Proxy Voting Guidelines - January 2015

3. Takeover Protection .................................................................................................................................... 14 3.1 Shareholder Rights Plans (“Poison Pills”) .................................................................................... 14 3.2 Other Takeover Protection Measures ........................................................................................... 14 3.3 Dissident Shareholders, Contested Elections, and Proxy Contests ............................................. 15 3.4 Dissident Director Nominee Compensation.................................................................................. 16 4. Shareholder Rights .................................................................................................................................... 16 4.1 Confidential Voting ........................................................................................................................ 16 4.2 Majority Voting .............................................................................................................................. 17 4.3 Proxy Access ................................................................................................................................ 17 4.4 Dual-Class Stock .......................................................................................................................... 17 4.5 Supermajority Approval ................................................................................................................ 18 4.6 Linked Proposals .......................................................................................................................... 18 4.7 Increase in Authorized Shares ..................................................................................................... 18 4.8 Disclosure of Voting Results ......................................................................................................... 18 4.9 Blank-cheque Preferred Shares ................................................................................................... 19 4.10 Shareholder Meeting Quorum ...................................................................................................... 19 4.11 Equity Issues ................................................................................................................................ 19 4.12 Other Business ............................................................................................................................. 19 4.13 Implementing Shareholder Views ................................................................................................. 19 4.14 Share Blocking .............................................................................................................................. 20 4.15 Income Trust Governance ............................................................................................................ 20 4.16 Reincorporation ............................................................................................................................ 20 5. Shareholder Proposals ................................................................................................................................ 21 5.1 General ......................................................................................................................................... 21 5.2 Environmental and Social Shareholder Proposals ....................................................................... 21

Proxy Voting Guidelines - January 2015

Introduction Proxy Voting Policy As a portfolio manager, RBC Global Asset Management has an obligation to act in the best interests of the accounts that it manages, including segregated client accounts and investment funds. This responsibility includes exercising the voting rights attached to securities in the portfolio of each account. It is our policy to exercise the voting rights of the accounts we manage in the best interests of the portfolio and with a view to enhancing the long-term value of the securities held.

Enhancing Governance We are satisfied that investments in issuers that have more transparent disclosure and more effective governance generally yield better results. We believe that we can help to protect and enhance the longterm value of our clients’ investments through our support of organizations that work to promote good governance, through direct or indirect engagement with issuers, and by communicating with an issuer’s management through the exercise of voting rights.

Proxy Voting Issues Issuers’ proxies most frequently contain management proposals to elect directors, to appoint auditors, to adopt or amend compensation plans, and to amend the capitalization of the issuer. A securityholder’s ability to clearly communicate with the management of an issuer using these few tools is limited. We encourage issuers and their boards of directors to consider and adopt recognized best practices in governance and disclosure. A decision to invest in an issuer is based in part on the quality of an issuer’s disclosure, the performance of its management and its corporate governance practices. Since a decision to invest is generally an endorsement of management of the issuer, we will usually vote with management on routine matters. When considering the election of directors, we will consider the board’s past course of action and any plans to improve governance and disclosure. We will be particularly concerned with any management proposal having financial implications for the issuer or the potential to adversely impact investment value. Proxies may also contain shareholder proposals requesting a change in the policies and practices of management. Where those proposals align with our views and have not been adequately addressed by management, we will support them. In order to discharge our obligations under this policy, we access and utilize research on management performance and corporate governance issues drawn from portfolio manager and analyst due diligence and we consider the detailed analysis and voting recommendations provided by leading independent research firms. We also participate as a member in organizations such as the Canadian Coalition for Good Governance, the Council of Institutional Investors, the International Corporate Governance Network and the Responsible Investment Association.

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Proxy Voting Guidelines - January 2015

Proxy Voting Guidelines Through our internal expertise and resources and leading independent research firms, we have established these Proxy Voting Guidelines (the “Guidelines”) to govern the exercise of our voting rights. We review and update our Guidelines on an ongoing basis as corporate governance best practices evolve. Our Guidelines are published for the information of our clients and to assist issuers in understanding the message we have sent or intend to send through the exercise of proxy voting rights. While we will generally vote proxies in accordance with the Guidelines, there may be circumstances where we believe it is in the best interests of a client for us to vote differently than as contemplated by the Guidelines, or to withhold a vote or abstain from voting. In the event of a perceived or actual conflict of interest involving the exercise of proxy voting rights, we follow procedures to ensure that a proxy is exercised in accordance with our Guidelines, uninfluenced by considerations other than the best interests of our clients.

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Proxy Voting Guidelines - January 2015

1. Board of Directors The board of directors of a corporation must act in the best interests of that corporation. The board engages the services of a management team to ensure the corporation’s long-term success. The board’s key functions are to approve direction of corporate strategy, supervise risk management, and evaluate the performance of the company and of management. Overall, the board is responsible for determining, implementing, and maintaining a culture of integrity and ethical behaviour. In order to be effective in representing the interests of securityholders, the board should reflect the criteria outlined below. If these criteria are met, then we will generally vote in favour of the election of directors proposed by management. We will also support shareholder proposals seeking to implement these criteria.

1.1 Independence of the Board of Directors Ideally, the board should be composed of a substantial majority of independent directors. An independent director shall be independent of management and free from any interest or relationship that could interfere with the director’s ability to act in the best interests of the corporation and its shareholders. A director who is not independent will be considered to be independent three years after the termination of the relationship or interest that caused the director’s independence to be compromised. However, a former CEO or CFO of the company will not be considered independent until five years after their employment with the company ends. For directors who are also major shareholders (defined as a person who controls 5% or more of the equity or voting rights of the company), independence will be assessed on a case-by-case basis. However, if these directors hold stock that has disproportionate voting rights, they will not be considered to be independent. We will consider proposals to adopt a stricter definition of independence on a case-by-case basis and in doing so will consider the current independence of the board as well as local legal and regulatory requirements. We will generally support proposals requesting that the company provide expanded disclosure of potential conflicts of interest regarding directors. Voting Guideline We will generally not support directors who are not independent if the proposed board is composed of less than a two-thirds majority of independent directors. We will generally support proposals that limit employees of the company sitting on the board to the CEO only.

1.2 Independence of the Chair It is a matter of good governance practice that an independent director be appointed to the position of chair of the board of directors. An independent chair is one of the primary mechanisms by which board independence is maintained.

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Proxy Voting Guidelines - January 2015

Voting Guideline We will generally not support a non-independent director if he or she is also chair (or will become chair upon becoming a director) unless an independent director is appointed as a lead director and an independent corporate governance committee exists.

1.3 Executive Chair In some instances a company may appoint an individual to be an “executive chair” of the board although another individual has been appointed board chair. An executive chair can present both corporate governance and compensation concerns for shareholders. To address the corporate governance concerns, the company should disclose the role of the executive chair in detail and explain to shareholders why having an executive chair is an appropriate corporate governance practice. Compensation arrangements for an executive chair are of particular concern and should be assessed in the context of director compensation rather than executive compensation practices. We are particularly concerned when the executive chair role appears to have been created to provide ongoing generous compensation to a retired CEO or founder of the company. Voting Guideline We will review all executive chair compensation arrangements on a case-by-case basis but may withhold/vote against the executive chair if the executive chair’s total compensation is more than two times that of the highest paid independent director sitting on the board. We will generally support shareholder proposals that ask for enhanced disclosure of the responsibilities of the executive chair, and full disclosure of the compensation structure for the role.

1.4 Risk Management One of the primary responsibilities of the board is to understand the risks facing the company and to ensure that management has put in place appropriate measures to identify, monitor and manage those risks. While initial responsibility for risk management may be delegated to a committee of the board, it is ultimately the responsibility of the entire board. Proper succession planning is also an important responsibility of senior management and the board, particularly when it comes to identifying candidates for the CEO role. Companies and boards should have a robust succession planning process and fully disclose to shareholders the process to ensure that the company follows that process. Voting Guideline Proposals to establish a risk committee of the board will be assessed on a case-by-case basis. These proposals will be assessed in the context of the risk profile of the company and how effectively those risks are being managed.

1.5 Board Size The number of directors on a board can be an important factor in board effectiveness. The board should be large enough to adequately perform its responsibilities without being so large that it becomes cumbersome. In general, boards should have between 5 and 15 directors, but the appropriate number of directors will vary with the size and nature of the corporation. 4

Proxy Voting Guidelines - January 2015

Voting Guideline Where the number of directors is outside this range of 5 – 15 directors we will vote against approval of the number of directors on the board if we believe that board effectiveness has been compromised.

1.6 Committees of the Board Committees have become accepted mechanisms of corporate governance. Corporations of a sufficient size should, at a minimum, include the following committees of the board: 

Audit Committee: The audit committee should be responsible for ensuring the accurate accounting and reporting of the company’s financial performance, ensuring that adequate internal control measures exist, and overseeing the annual external audit of the corporation. Members should have relevant experience.



Corporate Governance Committee: The corporate governance committee should be responsible for the oversight of the governance of the corporation.



Compensation Committee: This committee should be responsible for the direction and oversight of the company’s executive compensation program and for regularly evaluating the performance of senior management.



Nominating Committee: The nominating committee should identify the board’s need for new or additional directors and skill sets, and then recruit, nominate and orientate new directors. The committee should also assess the need for certain skills on the board that may be lacking.

The chair and committee members should all be independent directors. Voting Guideline For most companies, we will not support non-independent board members who sit on, or chair, any of the above committees. We will generally support proposals to prohibit CEOs of other listed companies from sitting on the compensation committee. For small companies, we will not support non-independent board members who sit on, or chair, the audit committee. For the compensation, nominating and corporate governance committees, a majority of the members and the chair should be independent. We will not necessarily vote against the board for failing to establish any or all of the above committees, but will actively encourage the board to establish them. We will support proposals to establish any or all of the above committees. We will generally support proposals that encourage boards and management to adopt short and long-term succession planning policies for all levels of senior management, including the CEO, and to and fully disclose those policies to shareholders.

1.7 Cumulative Voting There are valid arguments for and against cumulative voting. It can ensure an independent voice on an unresponsive board, or it can allow a small group of shareholders to promote their own agenda. 5

Proxy Voting Guidelines - January 2015

Voting Guideline We will generally vote against cumulative voting proposals, unless there is a clear and demonstrated need for cumulative voting.

1.8 Staggered Boards The annual election of all directors is an effective way to ensure that shareholders can change the composition or control of the board, especially during periods of deteriorating corporate or board performance. We believe that the annual election of all directors best serves the interest of shareholders. Voting Guideline We will not support a proposal for the introduction of staggered terms. We will not necessarily vote against a slate of directors simply because the board uses staggered terms. We will support a proposal to eliminate staggered terms or to introduce the annual election of directors.

1.9 Director Attendance Directors should be able to commit sufficient time and energy to carry out their duties in an effective manner. While attendance at board and committee meetings is not the only measure of director performance, poor attendance makes it difficult for directors to carry out their responsibilities effectively. Voting Guideline We will generally not support existing directors if they have attended less than 75% of the board and committee meetings in aggregate, unless there are extenuating circumstances.

1.10 Overboarding Serving as a director of a public company requires a significant commitment in time and effort. If directors sit on an excessive number of boards it can compromise their ability to serve effectively. Voting Guideline We will generally withhold votes from directors who sit on more than six boards or, in the case of current CEOs, more than two boards.

1.11 Director Liability and Indemnification We recognize that in order to build and maintain a qualified board it may be necessary for the company to have a policy limiting the liability of directors and provide them with an indemnity. However, these policies should only apply when directors are acting honestly, in good faith and in the best interests of the corporation. If the director acts dishonestly, the indemnification should not apply. Voting Guideline When considering proposals to eliminate or limit the personal liability of the directors, RBC GAM will consider: 6

Proxy Voting Guidelines - January 2015



the performance of the board



the independence of the board and its key committees



whether or not the company has anti-takeover devices in place

If the above factors are favourable, we will generally support liability-limiting proposals to indemnify directors against legal costs provided they have acted honestly and in good faith and provided the company persuasively argues that it is necessary to attract and retain directors. We will also generally support proposals seeking personal liability for directors as a result of fiduciary breaches arising from gross negligence. We will generally oppose proposals for indemnification when they seek to insulate directors from actions they have already taken or if litigation is pending.

1.12 Term Limits for Directors In general, we do not favour term limits for directors as they impose an arbitrary limit on directors’ tenure regardless of a director’s performance and they may foster a short-term view. Voting Guideline In general, we will vote against proposals to introduce term limits for directors unless there is a clearly demonstrated need for them. We will assess the independence of all directors annually regardless of length of service.

1.13 Performance Evaluation of Directors and Board A board must evaluate its own performance, which presents a conflict of interest. We believe that the best way to deal with this conflict is for the board to adopt its own statement of principles and guidelines to evaluate the performance of directors and the effectiveness of the board. The board should prepare annual evaluations based on these principles and guidelines, and should summarize the results of that evaluation in the annual proxy circular. Voting Guideline We will support proposals to develop and institute performance evaluations for a board of directors and to disclose a summary of the results of those evaluations in the annual proxy circular.

1.14 Directors Proposed on a Single Ballot We believe that directors should be proposed individually on the annual ballot. When directors are proposed on a single ballot it removes the shareholders’ ability to withhold votes for individual directors to change the composition of the board. Boards may use a single ballot as a means of protecting individual board members, or preventing certain board practices from being changed. A board that is confident with its governance practices should be willing to propose directors individually. Voting Guideline We will support proposals that directors be proposed individually.

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We will withhold votes for a board proposed on a single ballot if we believe that the independence of the board or the board committees has been compromised in any way or if the board’s actions have not been in the shareholders’ best interests.

1.15 In Camera Meetings In camera meetings of independent board members create an opportunity for more candid discussions than may occur at formal board meetings. These meetings may help to facilitate and enhance overall board independence. It is recommended that after these meetings, the chair of the in camera sessions should meet with the chief executive officer to advise of the topics that were discussed. Voting Guideline We will generally support proposals that would require regular in camera meetings of independent board members only.

1.16 Voting for Directors Voting Guideline In general, we will vote for the directors nominated by management unless these guidelines indicate otherwise or the long-term performance of the corporation or the directors has been unsatisfactory. In this regard, we will also consider any issues that come to our attention regarding a director’s performance at another public company.

1.17 Audit Process The audit plays a vital role in the corporate governance process. Not only does it verify the financial performance of a company, but it also identifies any deficiencies in the internal control mechanisms of the company. The audit process should involve the establishment of an independent audit committee (see 1.4) and the appointment of an independent auditor by that committee. The auditor should report directly to the audit committee and not to management. Auditors and/or the audit partner should be rotated on a regular basis. Voting Guideline We will generally support the choice of auditors recommended by the audit committee. Where auditors are being changed for reasons other than routine rotation, we will review the reasons on a case-by-case basis. Where the auditor has limited or capped its liability as it relates to the performance of the audit and the limits placed on the auditor’s liability are unreasonable, we will not support the choice of auditor.

1.18 Audit Fees The amount and composition of fees paid to an auditor can compromise an auditor’s ability to act independently and perform an audit that is free from undue influence by management. In order to help ensure auditor independence, a substantial majority of the fees paid to the auditors should be for audit and audit-related services. 8

Proxy Voting Guidelines - January 2015

Voting Guideline We will generally support proposals that prohibit the outside auditor from maintaining a relationship with the company other than providing audit and audit-related services. We will generally not support the choice of auditor if less than two-thirds of the total fees paid to the auditor over the previous year were for audit and audit-related services. We will consider withholding our votes from members of the audit committee if the company’s auditor received more than half its fees from nonaudit services.

1.19 Board Diversity While the quality of individual directors is paramount, to enhance overall board effectiveness we expect that directors will have a diverse range of backgrounds and experience. To the extent practicable, directors should reflect the gender, ethnic, cultural and other personal characteristics of the communities in which the corporation operates and sells its goods or services. Voting Guideline We will generally support proposals that call for enhanced disclosure or reporting requirements regarding board diversity policies and procedures. We will generally support proposals to adopt non-binding guidelines for female or other minority representation on the board. We will review proposals to adopt binding quotas or targets for female or other minority representation on the board on a case by case basis.

2. Management and Director Compensation We believe that all compensation plans should attempt to align the long-term interests of shareholders with the interests of management and directors. Compensation plans should also be sufficiently generous to attract and retain individuals with the skill sets required to ensure the long-term success of the company, but compensation should always be commiserate with performance. The compensation plan should be developed and maintained by the compensation committee.

2.1 Stock Option and Incentive Compensation Plans In general, these plans should reward good performance, and not reward poor performance. The cost of the plan, either to the shareholders or the company, should be related to the benefits derived from it. The plan should be disclosed to the shareholders in detail and be approved by them. In general we would like to see a reduction in the use of stock options as a form of compensation. Our preference is for stock ownership rather than stock options. Voting Guideline We will review each compensation plan on a case-by-case basis. We will generally support:

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

stock option plans that explicitly define the awards to senior executives and link the granting or vesting of options to specific performance targets

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stock option plans where the underlying securities are issued at market value or higher

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plans where the stock options have a life of five years or less

We will generally not support: 

plans that exceed five years



"evergreen" stock option plans

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plans or proposals that allow the repricing of stock options, or that reissue options with an exercise price higher than the current market price



any plan that does not prohibit the inappropriate manipulation of equity award grant dates through practices known as backdating, spring loading or bullet dodging



stock option plans that are 100% vested when granted or plans that allow pyramiding, gross-ups or acceleration of the vesting requirements. We will oppose plans that do not provide clear guidelines for the allocation of awards

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stock option plan amendments if the total potential dilution exceeds 10%, or annual dilution exceeds 1%

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stock option plans that authorize allocation of 25% or more of the available options to any one individual

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plans that give the board broad discretion in setting the terms and conditions of equity-based compensation programs



stock option plans that allow for the “reloading” of exercised or lapsed options



equity-based compensation plans that allow, or do not specifically prohibit, hedging. We will withhold/vote against the members of the compensation committee if any equity-based compensation exposure is hedged during the period

In general, we believe it is not appropriate for directors to participate in stock option plans, and would prefer directors own stock outright in the company. As such, we will generally not support proposals for director participation in stock option plans. However, for small companies we will review director options on a case-by-case basis, and if a company demonstrates a need for director options we may support such a plan (for example, where cash preservation is a priority for the company). We will generally not support change in control provisions that allow for stock option holders to receive more for their options than shareholders would receive for their shares, or provisions that allow for the granting of options or bonuses to outside directors in the event of a change of control. We discourage the use of omnibus stock option plan proposals. Ideally, shareholders should have the opportunity to consider and vote on the separate components of such plans.

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Proxy Voting Guidelines - January 2015

2.2 Expensing of Share Options While options may not be an expense to the corporation, they are an expense to the existing shareholders due to the dilution effects. As such, we believe that share options should be expensed in the financial statements of a corporation. Voting Guideline We will support proposals that require the expensing of stock options in the financial statements of a corporation in accordance with IFRS.

2.3 Golden Parachutes We recognize that ‘golden parachutes’ may in some circumstances be an appropriate way to provide executives with the personal financial security and professional objectivity that is required to act in the best interests of shareholders. However, in some cases these provisions can be excessive. Voting Guideline We will support proposals requiring shareholders to approve golden parachute arrangements. We will review golden parachute arrangements on a case-by-case basis. However, we will generally vote against overly generous golden parachutes for senior executives. We will also vote against plans that use a single trigger for cash or other payments or for the vesting of equity based compensation.

2.4 Employee Stock Purchase Plans The interests of shareholders and employees are aligned if employees have the opportunity to become shareholders at a reasonable price. Employee stock purchase plans are an effective way to facilitate that alignment. In general we will support employee stock purchase plans that align employee interests with creating value for shareholders. Voting Guideline We will generally support employee stock purchase plans with a purchase price of not less than 85% of market value, potential dilution of less than 10% and an appropriate mandatory hold period.

2.5 Aggregate Dilution from all Stock-Based Compensation Plans There are many types of stock-based compensation plans, some of which can dilute the holding of current shareholders. It is easy to focus on the dilution that may result from stock option plans, but ignore the dilution from other types of stock-based plans. As such, it is important to assess the dilution of these plans individually and in aggregate. Voting Guideline We will generally vote against any individual stock based compensation plans that contribute to total potential dilution from all plans within a firm exceeding 10%.

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2.6 Director Compensation We believe that director compensation should be commiserate with the time and effort that directors spend executing their duties, but it should not be so generous that it may compromise a director’s ability to act independently of the board or management. We also believe that directors who personally own a significant amount of the company’s stock will be better motivated to act in the interests of all shareholders. Voting Guideline We will review proposals regarding director compensation on a case-by-case basis. We will support proposals advocating a proportion of the directors’ remuneration be in the form of common stock.

2.7 Director Retirement Benefits We believe that retirement benefits should be restricted to the employees of a corporation. Directors’ independence could be compromised if they receive retirement benefits from the corporation. Voting Guideline We will vote against proposals for retirement benefits for directors, unless it can be clearly shown that they will not impair directors’ independence.

2.8 Employee Loans Loans to senior management or the guaranteeing of loans for the purpose of exercising options should be avoided. These types of arrangements expose the company to the risk of not being able to recover the loan if the employment of the borrower is terminated. Voting Guideline We will review all loans to senior management on a case-by-case basis, but will generally support loans that are reasonable in amount, given at a market rate of interest, (and not forgivable) and are secured against shares in the company or some other real asset.

2.9 Excessive Executive Compensation In recent years, we have seen some executive compensation packages reach excessive levels, with insufficient correlation to individual or corporate performance. We believe that executive compensation should be performance based and should align the interests of executives with the long-term interests of shareholders. We would like to see performance criteria clearly disclosed and defined and detailed disclosure of whether and how those criteria have been met. The performance criteria and the degree to which they have been met should be determined by the compensation committee. Executives should be required to hold a substantial portion of their equity compensation awards, including shares received from option exercises, during their employment with the company and for some reasonable time after leaving the company. Voting Guideline We will generally support executive compensation plans that are fair and oppose those that are excessive. We will review on a case-by-case basis proposals to enhance compensation disclosure, but will generally support proposals that require disclosure of performance criteria and whether those criteria were met. We will consider supporting proposals to link executive compensation to the company’s achievement of goals 12

Proxy Voting Guidelines - January 2015

that go beyond traditional financial metrics, provided that those goals will improve the company’s long-term performance and sustainability.

2.10 Compensation Report and Say-on-Pay The compensation report in the proxy circular is the primary means by which shareholders obtain information to assess the compensation practices of the company. This report should be clear, concise and fully disclose all methods of compensation and performance measures. Furthermore, this report should present the information in a format that will allow all shareholders to easily determine total compensation for an individual. When considering whether to approve a company’s advisory vote on executive compensation, we will consider the company’s overall compensation philosophy in the context of all relevant factors, including: 

whether pay is aligned to long-term sustainable performance and whether the company has disclosed specific performance metrics



whether the company has poor executive pay practices

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whether the company has manipulated its equity compensation plans through stock option backdating, spring loading or re-pricing

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whether the company uses time vesting or performance vesting for equity awards

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whether the company has established meaningful stock holding requirements for executives and whether it has clawback policies in place in the event of accounting restatement or wrongdoing



whether overall amounts of executive compensation are reasonable relative to company peers, other employees and the value added by the executive

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whether the executive compensation plans are overly complex or duplicative

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whether the company’s executive compensation plans give directors excessive discretionary power over awards

Voting Guideline We will generally support proposals that require full or enhanced disclosure of compensation for senior executives. We will support proposals requiring an advisory vote by shareholders to approve the annual compensation report (i.e. “say-on-pay”). Where a say-on-pay proposal fails to obtain the support of at least 60% of its shareholders we will expect a substantive board response. Boards should engage with their significant shareholders to determine the nature of their concerns with the company’s executive compensation practices. If those concerns are not adequately addressed in the next proxy circular, we will generally withhold/vote against the members of the compensation committee of the board.

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2.11 Compensation Consultants Compensation consultants are increasingly being used by boards to provide advice and recommendations on the structure of executive compensation plans. The use of consultants can provide invaluable support to the compensation committee in designing the executive compensation plan. It is important that the independence of compensation consultants is not compromised and that the nature and the extent of the relationship are disclosed to shareholders. We prefer that no less than two-thirds of the total fees paid to the compensation consultant be for consulting services provided to the board. In addition, we prefer that the compensation consultants be engaged by the compensation committee and report directly to it. Voting Guideline We will generally support shareholder proposals requiring the full disclosure of all fees paid to a compensation consulting firm, distinguishing between fees paid for services to the board and for all other services provided to the company. We will generally support shareholder proposals requiring compensation consultants to limit their overall relationship with a company to providing services to the board only.

3. Takeover Protection The takeover protection measures that are available to boards and management can be a double-edged sword for the shareholder. They can be used to protect shareholder value by defending the company from hostile takeover bids that do not represent a fair value for the assets of the company. However, they can also be used to entrench a board and management who may ultimately undermine shareholder rights and shareholder value.

3.1 Shareholder Rights Plans (“Poison Pills”) There are two main purposes for a shareholder rights plan. The first is to ensure that all shareholders are treated equally, and the second is to give the board time to consider other options. Many shareholder rights plans go well beyond these two aims and may be used to prevent bids that are worthy of shareholder consideration. A shareholder rights plan should allow a takeover offer to stand for no longer than 60 days before the board responds. This gives management and the board ample time to consider the bid and assess alternatives. In Canada, shareholder rights plans must be ratified by the shareholders at the first annual meeting following adoption of the plan. In the U.S., shareholder ratification is not required. Voting Guideline We will review each shareholder rights plan on a case-by-case basis, but will generally not support plans that are not subject to shareholder approval at least every three years. We will oppose any shareholder rights plan that is triggered by a purchase of less than 20% of the company’s shares.

3.2 Other Takeover Protection Measures Other takeover protection measures may include, but are not limited to the following: 

going private transactions 14

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

leveraged buyouts



lock-up arrangements



crown-jewel defences



greenmail

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fair price amendments



re-incorporation

When considering any takeover protection measure, we would be more likely to support a proposal if: 

the measure protects the rights of all shareholders



the measure seeks to maximize shareholder value



sufficient time and information is made available to shareholders to make an informed decision



the measure will allow competing bids to be considered over a reasonable time



the measure is subject to shareholder approval



the measure is adopted for a limited period

Voting Guideline We will review each takeover protection measure on a case-by-case basis. We will generally oppose greenmail payments where there is no sufficient long-term business justification for them.

3.3 Dissident Shareholders, Contested Elections, and Proxy Contests Over recent years we have seen an increase in contested elections where a dissident shareholder is proposing its own slate of director nominees. In these situations it is important to understand what both sides are proposing and the implications it will have on governance and performance going forward. Voting Guideline We will review dissident shareholder proposals for director nominees on a case-by-case basis to determine which will result in the best governance and performance for the company over both the short and longterm. We will consider: 

board independence, performance, equity ownership and responsiveness to shareholder concerns



the performance of current management and the company’s long-term performance



the competing strategic plans of the dissident and incumbent slate to enhance long-term corporate value, including the impact on key constituents



the relative qualifications of the nominees and, where relevant, the company’s current executive and board compensation practices

When dissidents are proposing an alternative strategy or if a proposed merger or acquisition is put to shareholders for a vote, we will consider all relevant factors, including: 

impact on long-term corporate value 15

Proxy Voting Guidelines - January 2015



anticipated financial and operating benefits



the price being offered to shareholders



circumstances regarding how the deal was negotiated



any proposed or resulting changes in corporate governance and the impact of those changes on shareholders’ rights



the impact of any merger or acquisition on key constituents at both companies

3.4 Dissident Director Nominee Compensation In some contested director elections, dissident director nominees may have separate compensation agreements with the dissident shareholder. These agreements can be problematic, particularly if they extend beyond the election of the nominee directors, as they may compromise the independence of the nominee directors, motivate them to act in the best interests of the dissident shareholder rather than the best interests of the company, and create divisions within the board. Voting Guideline We will review nominee director compensation agreements with dissident shareholders on a case-by-case basis, but may vote against/withhold votes from nominee directors if we believe their independence has been or could be compromised. We will generally support proposals to prohibit payments from a dissident shareholder to its nominee directors after those directors have been elected to the board. We will generally vote against proposals that would prevent the election of nominee directors who have received compensation from a dissident shareholder during a proxy contest, prior to being elected to the board.

4. Shareholder Rights Shareholder rights include rights to influence management of the issuer through voting, to receive information from the issuer, to sell or transfer shares, to receive a share of the income of the issuer and to share in the net proceeds on the sale or winding-up of the issuer. These rights, like any other asset, should be protected and maintained. Voting Guideline We will generally oppose attempts to limit and/or eliminate shareholders’ rights to call a special meeting or act by written consent and will generally support resolutions that seek to restore those rights.

4.1 Confidential Voting As with other electoral systems, the voting of proxies should be confidential, thereby ensuring that the process is impartial and free from coercion. Voting Guideline We will support proposals to introduce confidential voting. 16

Proxy Voting Guidelines - January 2015

4.2 Majority Voting It is a fundamental right of shareholders to have an effective ability to vote directors both on and off the board. Plurality voting does not respect this basic right. Companies should adopt policies to ensure that directors are elected to the board using a majority vote system where shareholders have the option of voting “for” and “against” individual directors, and directors must receive a majority of votes “for” to be elected to the board. Voting Guideline We will generally support proposals that call for the adoption of a majority vote system for the election of directors in non-contested director elections.

4.3 Proxy Access We believe that a robust process for nominating directors is fundamentally important for creating an effective board and that shareholders have a role to play in that process. Significant shareholders should have the right to nominate a number of directors for election in the ordinary course, outside of any contest for control, and should have their nominees included in the proxy circular in the same manner as the company’s nominees. Voting Guideline We will generally support proposals that provide shareholders owning at least 3% of a company’s voting shares (individually or together with other shareholders) access to the company proxy statement to advance non-management board candidates comprising no more than 25% of the total board. In general, we will withhold support for proxy access proposals if the access right could be used to promote hostile takeovers by allowing for nomination of more than 25% of the board.

4.4 Dual-Class Stock A company with dual class shares gives multiple votes per share to a certain class of shares, resulting in unequal voting rights between classes of shares. This violates the principle of one share, one vote. Companies with multiple voting shares give minority shareholders the ability to make decisions that may not be in the interests of all shareholders, or may not be supported by the majority of shareholders. Voting Guideline We will generally not support the creation or extension of a dual-class share structure without substantial proof that such a plan is critical to the success of the firm as a result of specific and unique challenges. Any such plan must be subject to future approval by the holders of the subordinate voting shares at regular and pre-determined intervals. We will support proposals to eliminate dual-class share structures. We will consider any proposal to enhance the voting rights of long-term shareholders on a case-by-case basis, in light of the particular circumstances of the company and the legal regulatory regime to which it is subject.

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4.5 Supermajority Approval We believe that supermajority requirements do have a legitimate purpose, but can be subject to abuse. They should not be used for votes regarding takeovers or control of a company, and the approval proportion should not be set too high. A two-thirds majority is most common, and we generally consider anything above that to be unreasonable. Voting Guideline We will consider supermajority voting proposals on a case-by-case basis but will generally vote against any supermajority proposal that has more than a two-third majority requirement unless it can be clearly demonstrated that it is in the shareholders’ best interests.

4.6 Linked Proposals Linked proposals are used to pass proposals that may not be approved if they were proposed individually. Voting Guideline We will generally not support linked proposals.

4.7 Increase in Authorized Shares We recognize that directors may need the flexibility to issue stock to meet changing financial conditions. This may include a stock split, to support an acquisition or restructuring plan, to use in a stock option plan or to implement an anti-takeover plan. The authorization of additional stock should be approved by shareholders, and should meet a specific business need. Voting Guideline We will review proposals to increase authorized shares on a case-by-case basis. We will not support proposals for unlimited authorized shares. We may support a reverse stock split if management provides a reasonable justification for it and reduces authorized shares accordingly. We will oppose management proposals to issue tracking stocks designed to reflect the performance of a particular business unit.

4.8 Disclosure of Voting Results We believe that shareholders have the right to know whether a proposal has been passed or defeated, as well as the number votes for, against and withheld. Additionally, all proposals should be cast by ballot rather than a show of hands, as this will ensure that all shareholders, whether present at the meeting or not, will be treated equally. In order to maintain the integrity of the proxy voting process, it is recommended that vote results be subject to independent verification. Voting Guideline We will support proposals for the prompt disclosure of proxy voting results, to eliminate the practice of voting by a show of hands, and to adopt independent verification of proxy voting. 18

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4.9 Blank-cheque Preferred Shares There may be valid business reasons for the issuance of blank-cheque preferred shares, but we believe the potential for abuse outweighs the benefits. The authorization of these shares gives directors complete discretion over the conditions of the stock and shareholders have no further power to determine how or when the shares will be allocated. Voting Guideline We will generally not support the authorization of blank-cheque preferred shares.

4.10 Shareholder Meeting Quorum The quorum for shareholders’ meetings should be high enough to ensure that individual shareholders or small groups of shareholders (for example the board or senior management) will not be able to act independently of other shareholders, but not so high as to make it difficult to achieve. Voting Guideline We will generally support quorum amendment proposals that require a minimum of five shareholders representing 25% of outstanding shares to constitute a quorum.

4.11 Equity Issues Shareholders should exercise control over the issuance of shares, especially when that issuance will result in significant dilution of ownership. This allows shareholder input on major decisions that affect the longterm interests of shareholders and the company. Voting Guideline We will review all proposals regarding private placements and the issuance of equity on a case-by-case basis, but will vote against any proposal that will cause excessive dilution without a valid business need.

4.12 Other Business We believe that the inclusion of an “other business” proposal on a proxy ballot gives the board broad discretion to act without specific shareholder approval. Voting Guideline We will not support “other business” proposals.

4.13 Implementing Shareholder Views When a resolution receives the support of a majority of shareholders, the board of directors should report back within a reasonable time, and not later than the next annual shareholders’ meeting, on the action taken or explain why no action has been taken.

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Voting Guideline When the board fails to implement a proposal that has received a majority of shareholder support, and does not demonstrate a valid reason for this action, we will generally withhold votes for all board members who served on the board during the period in question.

4.14 Share Blocking Some countries allow the practice of share blocking, where shareholders are “blocked” or prevented from trading their position from the time the proxy votes are submitted to the day after the shareholders’ meeting. This practice has implications for the management of the portfolios in which these securities are held. We believe that this practice is not in the interests of shareholders and we would like to see it discontinued. Voting Guideline In general, we will not vote shares that are subject to blocking restrictions unless we determine that it is in our clients’ best interests to do so.

4.15 Income Trust Governance Unit holders of income trusts should enjoy the equivalent rights and protection as the shareholders of a corporation. The trust and associated entities should take steps to ensure that appropriate governance practices are adopted to achieve this end. Voting Guideline We will generally support proposals that enhance governance practices of the trust. We may withhold votes from trustees where they have failed to establish or protect the rights of unit holders.

4.16 Reincorporation There can be valid business reasons for a company to reincorporate in a different jurisdiction; however, a company may also be motivated to reincorporate for reasons that may be inconsistent with the interests of shareholders. Voting Guideline We will review all reincorporation proposals on a case-by-case basis but will generally vote against any proposal that will result in unjustified risk to the corporation, unreasonable limits on director liability, diminished shareholder rights or weaker corporate governance requirements. We will generally oppose management proposals to restructure the venue for shareowner claims by adopting charter or bylaw provisions that seek to establish an exclusive judicial forum.

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5. Shareholder Proposals 5.1 General Shareholders should have the right to bring relevant proposals to the annual general meeting. We believe that these proposals should be included on the proxy ballot for consideration by all shareholders as long as they deal with appropriate issues and are not used to air personal grievances or to obtain publicity. We also believe that proposals should generally refrain from specifying how corporations should achieve the desired objectives. We are mindful that some proposals may diminish long-term shareholder value by imposing unreasonable constraints on the board and management. Voting Guideline We will generally review all shareholder proposals on a case-by-case basis. Where proposals relate to enhanced disclosure in an area that represents a real risk or opportunity for the corporation, we will generally support it. Where proposals mandate a specific course of action for the company we will generally oppose it.

5.2 Environmental and Social Shareholder Proposals Environmental and social issues are increasingly acknowledged to be areas of real risk to the operations and value of a company. Proposals that address these issues should be assessed in terms of the risks and opportunities they represent for the company and whether those issues have been adequately disclosed to shareholders.

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Proxy Voting Guidelines - January 2015

Environmental Issues All companies have an impact on the environment. We expect companies to adopt policies and procedures to minimize a company’s impact on the environment. Proposals that seek to improve the environmental practices of a company will generally be supported. Voting Guideline We will generally vote in support of proposals that ask for: 

greater disclosure of a company’s environmental practices and/or environmental risks and liabilities



initiatives to reduce toxic emissions and detailed disclosure of results



initiatives to reduce the emission of greenhouse gases, including carbon, and detailed disclosure of results



detailed reporting on the risks and opportunities resulting from climate change



initiatives to promote recycling, including product life-cycle management, and detailed disclosure of results



companies to abstain from operating in environmentally sensitive areas or using products produced from materials extracted from such areas



consideration and adoption of the Global Reporting Initiative reporting standards



consideration and adoption of the Equator Principles



companies to consider investing in or developing renewable energy sources

Human Rights We live in an increasingly globalized world where companies located in one country operate within the borders of others. Those operations frequently occur in the developing world where basic human rights are not protected as vigorously as they are in the developed world. We generally support proposals that call on companies to respect basic human rights and comply with relevant international agreements regarding the protection of human rights. Voting Guideline We will generally vote in support of proposals that call on companies to: 

adopt or comply with policies that conform to the United Nation’s Universal Declaration on Human Rights



take reasonable steps, or institute a review process, to ensure that it does not do business with suppliers that manufacture products using forced labour, conflict labour or child labour, or suppliers that fail to comply with all applicable laws and standards protecting their employees’ wages, benefits, working conditions, freedom of association and other rights

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Proxy Voting Guidelines - January 2015



prepare a report or adopt a code of conduct with respect to the company’s investments or operations in countries or regions with systemic labour and human rights abuses



report on operations and the cost of continued involvement in countries with poor human rights records



provide meaningful disclosure of a company’s activities in countries with patterns of human rights abuses



adopt policies relating to operations in a conflict zone to protect the rights of local communities and avoid exacerbating the conflict



adopt independent programs to monitor the company’s compliance with codes of conduct and to provide detailed disclosure of results

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adopt or comply with policies that conform to the International Labour Organization’s Core Conventions and report on the progress toward implementing those standards

Community Issues Shareholder proposals commonly relate to the impact of a company’s operations on the residents of the communities in which it operates, including First Nations or other indigenous communities. “Community” may also refer to larger areas, such as a province, state or nation, to the extent that a company’s operations may have broader impact. In general, we support proposals that ask companies to operate in a manner that respects the wishes of the communities in which they operate. Voting Guideline We will generally vote in support of proposals that call for: 

reporting on a company’s impact on indigenous communities and the adoption of policies relating to the rights of indigenous peoples

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careful consideration of advertising policies and practices to ensure that they do not promote racial stereotyping

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meaningful disclosure of plant closing criteria

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eliminating the use of predatory lending practices and “redlining”

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disclosure of lending practices in developing countries

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disclosure and board level oversight of corporate political contributions and lobbying expenditures

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support of the Extractive Industry Transparency Initiative

We will generally oppose proposals that call for: 

asking banks to forgive loans outright

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requiring shareholder ratification of charitable grants

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