Policy
Oberweis Asset Management, Inc. (the “Adviser”) acts as
discretionary investment adviser to various clients, including The
Oberweis Funds (the “Fund”). The Adviser will not exercise voting
authority with respect to client securities, unless a client has
authorized the Adviser to exercise such discretion pursuant to the
client’s advisory contract with the Adviser. The Adviser will
exercise voting authority with respect to securities held by the
Fund.
The Adviser’s policy is to vote proxies in the best economic
interests of clients. The principles which guide the voting policy
of the Adviser are maximizing the value of client assets and
promoting the rights of clients as beneficial owners of the
companies in whose securities they invest. The Adviser’s investment
strategies are predicated on the belief that the quality of
management is often the key to ultimate success or failure of a
business. Because the Adviser generally makes investments in
companies in which the Adviser has confidence in the management,
proxies generally are voted in accord with management’s
recommendation. The Adviser may vote a proxy in a manner contrary to
management’s recommendation if, in the judgment of the Adviser, the
proposal would not enhance shareholder value.
The Adviser has retained Risk Metrics Group (formerly known as
Institutional Shareholder Services (“RMG”), a proxy voting and
consulting firm, to receive proxy voting statements, provide
information and research, make proxy vote recommendations, and
handle various administrative functions associated with the voting
of client proxies. The proxy voting guidelines for U.S. proxies are
set forth in the RMG Proxy Voting Guidelines Summary and for non-U.S.
proxies, the RMG International Proxy Voting Guidelines, copies of
which are attached, and the RMG Proxy Voting Manual. In addition,
RMG has country and market specific policies. The Summaries are a
condensed version of all proxy voting recommendations contained in
the RMG Proxy Voting Manual. While RMG makes the proxy voting
recommendations, the Adviser retains the ultimate authority on how
to vote. In general, based on its review of RMG’ proxy voting
recommendations, it is anticipated that the Adviser will be in
agreement with RMG recommendations and no other action will be
required by the Adviser.
Procedures
The Chief Compliance Officer or his or her designee is responsible
for monitoring corporate actions. The Chief Compliance Officer or
his or her designee is also responsible for ensuring that all
proxies are voted in a timely manner and, except where a conflict
exists, are voted consistently across client accounts.The Chief
Compliance Officer or his or her designee is responsible for
monitoring for conflicts of interest between the Adviser (and/or its
affiliated persons) and its clients, including the Fund and its
shareholders. Such a conflict may arise, for example, when the
Adviser has a business relationship with (or is actively soliciting
business from) the company soliciting proxies or a third party that
has a material interest in the outcome of a proxy vote or that is
actively lobbying for a particular outcome of a proxy vote. All
employees are responsible for notifying the Chief Compliance Officer
or his or her designee, with respect to any conflict of interest of
which they become aware.
Upon receipt of proxy statements on behalf of the Adviser’s
clients, RMG will vote the proxies in accordance with its
recommendations and no action is required by the Adviser unless it
disagrees with RMG’ recommendation. If the Adviser disagrees with
RMG’ vote recommendation, it will override the vote and communicate
to RMG how to mark and process the vote. In such case, James W.
Oberweis, President, or other officer of the Adviser as designated
by James W. Oberweis, will vote the proxy.
The following matters will be referred to the Adviser’s Proxy
Committee for instructions: (1) matters where RMG indicates that the
application of the recommendations is unclear; (2) matters which RMG
indicates are not covered by the recommendations; (3) any other
unique matters that may require review by the committee, and (4) if
applicable as described under “Conflicts of Interest” below, matters
where there is a potential or actual conflict of interest. The Proxy
Committee will formulate a recommendation on such matters in
accordance with the Adviser’s goal to maximize the value of client
assets. The Proxy Committee will provide voting instructions on such
matters to James W. Oberweis, President, who will vote in accordance
with those instructions. The members of the Proxy Committee are
identified on Schedule A, which may be amended from time to time.
Guidelines
Foreign Securities
OAM will use its best efforts to vote “foreign security proxies”
consistent with its policy stated above, but will not vote a foreign
proxy:
- if, in the opinion of OAM, the cost of voting a foreign
proxy outweighs the benefit of voting the foreign proxy;
- when OAM has not been given enough time to process the vote;
or
- when a sell order for the foreign security is outstanding
and, in the particular foreign country, proxy voting would
impede the sale of the foreign security (“share blocking”).
Loaned Securities
Unless otherwise required, if an OAM client has determined to
participate in a securities lending program, OAM will not seek
recalls for the purpose of voting proxies for the securities on
loan.
Conflicts of Interest
If the Adviser determines that, through reasonable inquiry or
otherwise, an issue raises a potential material conflict of
interest, the Adviser will follow the recommendations of RMG except
as follows. If the Adviser and/or the Proxy Committee believes that
it would be in the interest of the Adviser’s clients to vote a proxy
other than according to the recommendation of RMG, the Proxy
Committee will prepare a report that (1) describes the conflict of
interest; (2) discusses procedures used to address such conflict of
interest; and (3) confirms that the recommendation was made solely
on the investment merits and without regard to any other
consideration.
In any event, the Adviser will report to the Board of the Fund
regarding any conflicts of interest with respect to the Fund,
including how the conflict was resolved, at the next regularly
scheduled Board meeting.
Recordkeeping
General
The Adviser will maintain the following records:
- these Policies and Procedures, including any amendments;
- proxy statements received regarding client securities (provided, however, that the Adviser may rely on the Securities and Exchange Commission's (the "SEC") EDGAR system if the company filed its proxy statements via EDGAR or may rely on
RMG;
- a record of each vote cast on behalf of a client (provided, however, that the Adviser may rely on
RMG);
- a copy of any document prepared by the Adviser that was
material to making a voting decision or that memorialized the
basis for the decision; and
- a copy of each written client request for information on how
the Adviser voted proxies on behalf of that client and the
Adviser’s written response to any client request (whether
written or oral) on how the Adviser voted proxies on behalf of
that client.
The Adviser will maintain these records in an easily accessible
place for at least five years from the end of the fiscal year during
which the last entry was made on such record, the first two years in
an appropriate office of the Adviser.
The Fund
With respect to proxies voted on behalf of the Fund, the Adviser
will coordinate with RMG to compile for each portfolio of the Fund
for each matter with respect to which the portfolio was entitled to
vote, the information required to be included in Form N PX for each
12 month period ending June 30 in order to assist the Fund in filing
Form N PX with the SEC by August 31 of each year.
Disclosure
The Adviser will describe in Part II of its Form ADV these Policies
and Procedures and indicate that these Policies and Procedures are
available to clients upon request. The Adviser will also advise
clients in Part II of its Form ADV how a client may obtain
information on how the Adviser voted with respect to that client’s
securities.
Members of Proxy Committee (as of October 1,
2008)
- Patrick B. Joyce
- James W. Oberweis
- Kenneth S. Farsalas
These Policies and Procedures may be amended by the Adviser
from time to time. However, such amendments must be reported to the
Board of the Fund at the next regularly scheduled Board meeting.
Dated August 1, 2003, as amended May 20, 2004 and further amended
January 27, 2005, November 1, 2005, January 10, 2007, and October 1,
2008. |
