KRS 367.368: Disclosure requirement when proxy advisory service not solely in the

interest of shareholders or is materially different from advice provided to

different clients.

(1) A proxy advisory service is not solely in the interest of shareholders of a company

if the service:

(a) Is wholly or partly based on, or otherwise takes into account, one (1) or more

nonpecuniary interests or subordinates the financial interests of shareholders

to other objectives, including sacrificing investment returns or und ertaking

additional investment risk to promote or further nonpecuniary interests;

(b) Involves providing a voting recommendation with respect to a shareholder -

sponsored proposal that:

1. Is inconsistent with the voting recommendation of the company's board

of directors or a board committee composed of a majority of the

company's independent directors; and

2. Does not include a written economic analysis of the financial impact on

shareholders of the proposal; or

(c) Advises against a company proposal to elec t a governing person unless the

proxy advisor affirmatively states that the proxy advisory service rendered

such advice solely in the interest of the shareholders of the company.

(2) If a proxy advisor provides a proxy advisory service that is not solely i n the interest

of shareholders as provided in subsection (1) of this section, the proxy advisor shall:

(a) Include, in writing or by electronic means, a disclosure to each shareholder or

entity or other person acting on behalf of a shareholder receiving th e proxy

advisory service that:

1. Conspicuously states that pursuant to subsectio n (1) of this section the

proxy advisory service is not being provided solely in the interest of

shareholders and that the advice subordinates the financial interests of

shareholders to other objectives, including sacrificing investment returns

or undertak ing additional investment risk to promote one (1) or more

nonpecuniary interests; and

2. Explains, with particularity, the basis of the proxy advisor's advice

concerning each recommendation, including but not limited to the

company or companies for which t he advice applies to and the

nonpecuniary interests used in the basis of the advice; and

(b) Immediately provide a copy of the disclosure required under paragraph (a) of

this subsection to the company that is subject to the proxy advisory service.

(3) If t he proxy advisor provides materially different advice to different clients who

have not expressly requested proxy advisory services for a nonpecuniary interest,

the advisor shall:

(a) If applicable, comply with the disclosure requirements in subsections (1 ) and

(2) of this section; and

(b) Notify, in writing or by electronic means, each shareholder or entity or other

person acting on behalf of a shareholder receiving the proxy advisory service,

the company that is subject to the materially different advice provided by the

proxy advisory service, and the Attorney General, of the materially different

advice and disclose the advice or recommendation that is:

1. Provided solely in the interest of shareholders; and

2. Supported by an economic analysis performed a nd relied upon by the

proxy advisor.