240000000087.pdf

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 240000000087 .

between

THE STATE OF MICHIGAN

and

Glass, Lewis & Co., LLC Karl Borgquist TREAS

255 California Street, Suite 1100 517-230-8419

San Francisco, CA 94111

Pr og ra m

M an ag er borgquistk@michigan.gov

Dan Concannon Kyle Elzinga TREAS

301-325-3328 517-614-0956 dconcannon@glasslewis.com

ST

A

TE

C on tra ct

Ad m in is tra to r ElzingaK1@michigan.govC

O N

TR

A

C

TO

R

CV0001042

CONTRACT SUMMARY

DESCRIPTION: Proxy Voting and Corporate Governance

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE

OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

December 1, 2023 November 30, 2026 Three, one-year November 30, 2026

PAYMENT TERMS DELIVERY TIMEFRAME

Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-card ☐ Payment Request (PRC) ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

N/A

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $78,861.62

STATE OF MICHIGAN PROCUREMENT

Michigan Department of Treasury 7285 Parsons Dr., Dimondale, MI 48821

CONTRACT NO. 240000000087

FOR THE CONTRACTOR:

Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Kyle Elzinga, Department Analyst Name & Title

Department of Treasury Agency

Date

SCHEDULE A – STATEMENT OF WORK

CONTRACT ACTIVITIES

Proxy Voting and Corporate Governance

BACKGROUND

The State of Michigan Investment Board (Board) is investment fiduciary for the State of Michigan Retirement System (SMRS), which is comprised of the following component systems: Michigan Public School Employees’ Retirement System; State Employees’ Retirement System; Michigan State Police Retirement System; and Michigan Judges Retirement System. The State Treasurer of the State of Michigan, who serves as chair of the Board, is granted investment discretion over a number of statutorily created trusts and agencies (Trust and Agencies). As of December 31, 2022, the total value of the SMRS assets was approximately $92.6 billion, invested as follows:

Private Equity 24.2% Domestic Equities 18.6% International Equity 13.6% Real Return & Opportunistic 12.0% Real Estate & Infrastructure 10.8% Absolute Return 10.1% Fixed Income 9.2% Short Term 1.5%

The assets that comprise the Trust and Agencies are approximately $10.8 billion.

The Board delegated fiduciary duties and the authority to invest funds on behalf of the SMRS to the Bureau of Investments (BOI). The BOI has similarly been granted responsibility by the SMRS Treasurer for investing assets of the Trusts and Agencies. Assets are managed by in-house investment specialists and by external investment managers.

In carrying out its investment responsibilities, BOI manages a broadly diversified portfolio that is both internally and externally managed and includes over 7,100 individual investments.

BOI is managed by an executive team consisting of a Chief Investment Officer, Deputy Chief Investment Officer, Director of Asset Allocations/Director of Investments – Public Markets, Director of Investments – Private Markets, Chief Compliance Officer & General Counsel, and support staff. The executive team resides within the Administration area of BOI. Within the BOI’s Compliance Bureau, the Compliance and Corporate Governance Division (CCG) manages the overall legal, governance, and compliance efforts for the BOI, which includes proxy voting. As part of its mission, the CCG team works to create sustainable long-term corporate value and achieve maximum return for shareholders of SMRS by promoting solid corporate governance principles. Among other things, the team is responsible for ensuring that proxies are voted in accordance with internal policies and State laws; ensuring that investments comply with the parameters established by State law; and, monitoring external managers and monitoring the eligibility of SMRS in all class action filings.

This Schedule identifies requirements for services needed for Proxy Voting/Corporate Governance support, related consulting, and reporting services.

The Contractor must develop, implement, and maintain a customized proxy voting recommendation web-based system based on BOI’s Proxy Voting Policy and Corporate Governance Core Principles and Guidelines, provide quarterly research reports of the proxies voted by the State, as well as an aggregated report of proxies voted by internally and externally managed accounts. The Contractor must be able to identify, segregate, and deliver the proxy to BOI in a timely manner so the proxy can be voted before the meeting date.

The Contractor must maintain a relationship with the external managers retained by BOI, as well as the SMRS’ custodian bank, for purposes of receiving proxy materials and related issues. See Proxy Voting Policy (michigan.gov) for the State’s current Proxy Voting Policy.

SCOPE

Proxy Voting/Corporate Governance Services The Contractor must provide comprehensive voting, consulting, research, and support services to the BOI as it relates to independent proxy voting, research, advisory, and related services for all of the SMRS’ investments in the United States (U.S.) and non-U.S. equities consisting of approximately 900 U.S. tickers and approximately eight non-U.S. tickers.

The SMRS currently uses State Street Bank & Trust Company as its Custodian.

During the 2022 proxy voting season, the SMRS participated in over 1300 shareholder meetings where approximately 3,000 ballots were cast on its behalf.

In some cases, ballots are cast by external and internal investment managers.

Contractor must vote proxy ballots held on behalf of the SMRS in both internally and externally managed accounts. Upon finalization of the Contract, a full list of all accounts will be provided to the Contractor. Accounts may be added or removed, as directed by the Program Manager or designee.

1. REQUIREMENTS

1.1. General Requirements

The Contractor must provide Deliverables/Services and staff, and otherwise do all things necessary for or incidental to the performance of work, as set forth below:

Proxy Voting/Corporate Governance Services (Contractor)

1. Develop, implement, and maintain a customized proxy voting recommendation system based on the SMRS’ domestic proxy voting https://www.michigan.gov/treasury/-/media/Project/Websites/treasury/Investments/SMRS-Proxy-Voting-Policy-2022.pdf?rev=7ea1847e7e3f4e2a99c57f4d75142aa9&hash=DAAB622D51B8A7D803B3333722AD93A8 policy. See Proxy Voting Policy (michigan.gov) for the State’s current Proxy Voting Policy.

2. Provide a Web-based proxy voting recommendation platform customized to implement the SMRS’ Corporate Governance Core Principles and Guidelines and Proxy Voting Policy. The platform must also include the following:

a. Links to the company’s current Proxy Statements (14A) and subsequent amendments or contests and Annual Report (10K).

b. Provide a current copy of the State’s Corporate Governance Core Principles and Guidelines and Proxy Voting Policy as amended in the current year.

c. Provide a voting function which must show the recommended vote on the issues based on the State’s domestic proxy voting policy and allow the State to execute and/or modify recommended votes.

d. Provide proxy research and reports on corporate governance and corporate social responsibility issues including how other public pension funds view and voted the issues.

e. Highlight and investigate possible corporate governance issues of SMRS portfolio.

f. Provide proxy research services on company specific issues, including Michigan company specific issues and global markets.

g. Provide research services which must include proxy voting research coverage for U.S. and International companies in SMRS’ portfolio.

h. Provide detailed research on the following topics: executive compensation, mergers and acquisitions, proxy contests, recapitalizations, charter and by-law amendments, and other highly contested voting scenarios.

i. Provide detailed research relating to board elections and director qualifications, shareowner proposals, auditor ratifications, and other matters brought before shareowners on proxy ballots.

j. Provide the appropriate documents required by the Securities and Exchange Commission (SEC) requiring institutional investment managers file with the SEC or other regulatory bodies, to allow for compliance with any proxy voting disclosure requirements (including, but not limited to, on an annual basis a record of votes on certain executive compensation-related shareholder meeting agenda items).

https://www.michigan.gov/treasury/-/media/Project/Websites/treasury/Investments/SMRS-Proxy-Voting-Policy-2022.pdf?rev=7ea1847e7e3f4e2a99c57f4d75142aa9&hash=DAAB622D51B8A7D803B3333722AD93A8

k. Provide a separate report which details the voting of the MacBride Principles in accordance with Section 13a of Act 314 of 1965 (the Public Employee Retirement System Investment Act).

l. Contain/maintain current and archived accurate record of the State’s proxy voting records.

m. Develop custom reports detailing voting activity. Reporting capabilities must include generating reports based on account, account group (internally versus externally managed accounts), date range, voted/un-voted ballots, company, shareowner, proposal classification, vote recommendation, and/or individual ballot items. Reports must allow reasonable statistical analysis and be available on demand.

n. Provide custom reports that offer the following information:

(1) High level ballot statistics of the agenda items voted upon during a given time frame for the accounts selected.

(2) Ballot count by market.

(3) A statistical analysis of the ballots voted over a period of time.

Calculations should also be available at the meeting level.

(4) Upcoming meetings report (a list of upcoming meetings).

(5) Vote summary report – agenda level: A list of meetings and proposals that were voted, and how the votes were cast with the option of including ballot detail.

(6) Ballots received report: A list of ballot details for a specific meeting or meeting date range, and the accounts selected.

(7) Market summary report: Ballot count by market and full summary of voting activity during a specific time and for a particular account or set of accounts.

(8) Additional reports as needed.

o. Monitor compliance of the SMRS’ internal investment managers with proxy voting policy.

p. Maintain a list of proxy issues that are to be voted by the SMRS, separate proxies containing those issues and deliver them to the State identified individuals, via e-mail, notification/alert within 15 business days before the meeting date, in order to allow sufficient time for the SMRS to receive, review, and if necessary, vote the proxies online before the meeting date. If a notification/alert falls outside the 15-business day window, the Contractor must notify the SMRS Program Manager as soon as possible and maintain ongoing communication to ensure the State is effectively supported.

q. Advise on issues based on State policies in which the State will cast proxy votes at least 10 business days before the vote.

r. Provide external managers with access to the platform as requested by the Program Manager or designee.

s. Provide platform access and training to external managers who are approved by the Program Manager or designee.

3. Provide access to consulting services as follows:

a. Provide updates and summary description of SEC proxy rules as proposed and finalized.

b. Provide system of evaluation of corporate practices which includes, but is not limited to, an update of developing corporate governance issues and best practices.

c. Advise on issues and review existing Corporate Governance Core Principles and Guidelines and Proxy Voting Policy (see http://www.michigan.gov/documents/treasury/SMRSProxyVotingPolicy _290368_7.pdf) annually and recommend changes accordingly by November 1 of each Contract year.

d. Advise on, and aid in, the development and updating of an International Proxy Voting Policy.

e. Ensure that the policy is updated annually by November 1 of each Contract year based on issues and best practices.

f. Procure additional information to supplement general research analyses on an ad hoc basis.

g. Provide a variety of custom reports and statistical information upon request of the Program Manager. The Contractor must make every effort to provide the custom report or statistical information within three business days of the request.

h. Provide annual research on identified companies to determine which companies require greater scrutiny.

i. Provide direct access to a custom analyst for special requests.

j. Any other matters that may be related to proxy voting (including custom research support services).

4. System Requirements:

a. All data and reports must be provided to BOI via a web browser and, at a minimum, must support the State-utilized versions of Edge, Chrome, and/or Firefox (current versions). No additional software or hardware will be required.

b. Subject to the Service Level Agreement for Hybrid Purchases attached as Exhibit D, this service must operate 24 hours a day, seven days a week, and must be available between 8:00 a.m. and 6:00 p.m. Eastern Standard Time (EST), Monday through Friday.

http://www.michigan.gov/documents/treasury/SMRSProxyVotingPolicy_290368_7.pdf http://www.michigan.gov/documents/treasury/SMRSProxyVotingPolicy_290368_7.pdf

c. Any interruptions, defined as failure in the Contractor-supplied system or database, which results in work stoppage, in service over 30 minutes must be reported to the Program Manager or designee with the following:

(1) Length of interruption

(2) Reason for interruption

(3) Resolution and estimated time to resolve.

d. For most queries, data must populate within 10 seconds, and reports must populate within one minute. For reports or data with broad run parameters, the report must populate within 20 minutes.

e. The Contractor must comply with the security requirements in Schedule E, Data Security Requirements.

f. The system must accommodate at least 12 client users, or additional if required by the BOI, each with a unique log-on ID and password.

g. The system must allow users to have “read only” access.

h. The Program Manager must be notified prior to any modifications to the reporting system. The modification(s) must be transparent to BOI and not require any updates on BOI computers.

i. The Contractor is responsible for all, including but not limited to, data entry, maintenance, back-up, and recovery of the web-based system.

j. All system upgrades that are generally provided to the Contractor’s customers at no additional cost must also be provided to the State at no additional cost during the term of the Contract.

k. Data must be backed-up daily.

l. The Contractor must provide a disaster recovery and business continuity plan as defined by Exhibit 1 to Schedule E.

(1) The reporting tools must be available no more than five business days after a disaster.

m. The Contractor must notify the Program Manager seven days in advance of any scheduled downtime.

(1) All system outages/shutdowns must be reported immediately to the Program Manager or designee.

(2) Within 24 hours of problem resolution and restart, the Contractor must prepare and submit a report to the Program Manager or designee indicating elapsed downtime hours, start/end timeframes, reason for the outage, and impact on the systems (lost data, etc.) for each occurrence and resolution to mitigate future occurrences.

5. The Contractor must work with the State and other contractors (e.g., Department of Technology, Management and Budget, Custodian, external managers, etc.) to perform services/deliverables.

6. Additional Services:

a. BOI may potentially require additional services in the future. If any additional services are needed, a new Statement of Work will be added to the Contract via the Change Notice Process.

1.2 Transition

See Standard Contract Terms, Section 26. Transition Responsibilities.

1.3 Training

The Contractor must provide the following training in the event of new system rollouts or material updates to the existing system: minimally, internet-based training with option for the BOI to request onsite (i.e., at the BOI’s office) training when needed. Contractor must provide training through their Client Service team to all of the State’s users. Contractor must host webinars after significant product updates as well as before and after proxy season to discuss trends in corporate governance. All web based and phone training is included in the cost of the Contract.

The Contractor must provide documentation and training materials.

1.4 ADA Compliance

The State is required to comply with the Americans with Disabilities Act of 1990 (ADA) and has adopted standards and procedures regarding accessibility requirements for websites and software applications. All websites, applications, software, and associated content and documentation provided by the Contractor as part of the Solution must comply with Level AA of the World Wide Web Consortium (W3C) Web Content Accessibility Guidelines (WCAG) 2.0.

1.5 Specific Standards

IT Policies, Standards and Procedures (PSP) Contractors are advised that the State has methods, policies, standards and procedures that have been developed over the years. Contractors are expected to provide proposals that conform to State IT policies and standards. All services and products provided as a result of this RFP must comply with all applicable State IT policies and standards. Contractor is required to review all applicable links provided below and state compliance in their response.

Public IT Policies, Standards and Procedures (PSP):

https://www.michigan.gov/dtmb/0,5552,7-358-82547_56579_56755---,00.html https://www.michigan.gov/dtmb/0,5552,7-358-82547_56579_56755---,00.html

1.6 User Type and Capacity

Type of User Access Type Number of Users Number of

Concurrent Users

Full access

Instruct-only

Read-only

Reporting-only

Full access

Instruct-only

Read-only

Reporting-only

Unlimited Unlimited

Contractor must be able to meet the expected number of concurrent Users listed above.

1.7 End-User Operating Environment

The SOM environment is X86 VMware, IBM Power VM and Oracle VM, with supporting enterprise storage monitoring and management.

The software must run under commonly used web browsers. At a minimum the software must support Internet Explorer v11 or higher, or Edge, Chrome v71 or higher, Firefox v62 or higher, and Safari v12 or higher for iOS operating systems.

Contractor must support the current and future State standard environment at no additional cost to the State.

1.8 Hosting

Contractor must maintain and operate a backup and disaster recovery plan to achieve a Recovery Point Objective (RPO) of 24 hours, and a Recovery Time Objective (RTO) of 24 hours.

1.9 Secure Web Application Standard

Contractor’s solution must meet the State’s Secure Application Development Standards as mandated by the State.

Secure Application Development Life Cycle (SADLC) Contractor is required to meet the States Secure Application Development Life Cycle requirements that include:

A. Security Accreditation Contractor is required to complete the State Security Accreditation process for the solution.

B. Application Scanning

i. Externally hosted solutions

Contractor must provide the State a vulnerabilities assessment. These scans must be completed and provided to the State on a regular basis or at least for each major release.

For COTS or vendor owned applications, Contractor, at its sole expense, must provide resources to complete the scanning and to complete the analysis, remediation and validation of vulnerabilities identified by the scan as required by the State Secure Web Application Standards.

Types of scanning and remediation may include the following types of scans and activities.

• Dynamic Scanning for vulnerabilities, analysis, remediation, and validation

• Static Scanning for vulnerabilities, analysis, remediation and validation

• Third Party and/or Open-Source Scanning for vulnerabilities, analysis, remediation and validation

C. Infrastructure Scanning

i. Externally hosted solutions

A Contractor providing Hosted Services must perform vulnerability scans of the infrastructure at least once a week and provide the scan’s assessment to the State in a format that can be uploaded by the State and used to track the remediation.

2. Acceptance

2.1. Acceptance, Inspection and Testing

The State will use the following criteria to determine acceptance of the Contract Activities:

A. Performance and Reliability Evaluation (PARE) The Performance and Reliability Evaluation will consist of three phases:

1. PHASE 1 – Specifications Compliance Review

a. The first phase must be comprised of a compliance review of the specifications for the Web-based Proxy Voting/Corporate Governance platform listed in the Contract. This review must ensure all items are in compliance with the required specifications for the Contract. In the event Treasury determines that any component or feature of the system does not comply with the mandatory specifications of the Contract, Treasury reserves the right to cancel the Contract under Standard Contract Terms, Sections 24 or 25.

2. PHASE 2 – Acceptance Test

a. The Program Manager will evaluate the system’s performance based on the reports produced. The Program Manager will determine that the system is fully operational when all requirements listed in the Contract are met. It will be the Program Manager’s responsibility to determine that the system is fully operational.

3. PHASE 3 – Post Implementation

a. The performance period for Phase 3 is a period of 45 consecutive calendar days. The performance period must commence when the historical data load is complete, and the system is fully operational.

1) During the performance period for Phase 3, there must be no more than three interruptions. During the performance period for Phase 3 there must be no individual interruption that lasts longer than four hours.

2) An interruption is defined as failure in the Contractor-supplied system or database, which results in work stoppage.

Work stoppages resulting from network downtime, Treasury-supplied equipment failure or Treasury-supplied software malfunctions must not be included in the performance period.

B. The Contractor fulfills all Contract Activities related to Proxy Voting and Corporate Governance in a timely manner as required in Schedule A.

2.2. Final Acceptance

A. For Proxy Voting/Corporate Governance services, Final Acceptance will be completed 45 days after Phase 3 of the PARE in Section 2.1.A.3. During Final Acceptance, there must be no more than three interruptions. During Final Acceptance, there must be no individual interruption that lasts longer than four hours. Upon completion of Final Acceptance, the Program Manager will provide written acceptance of the system.

B. The Contractor fulfills all Contract Activities related to Proxy Voting and Corporate Governance in a timely manner as required in Schedule A.

Invoices must accurately reflect Proxy Voting/Corporate Governance services.

3. Staffing

3.1. Contractor Representative

The Contractor must appoint a single point of contact specifically assigned to State of Michigan account, who will respond to State inquiries regarding the Contract Activities, answer questions related to ordering and delivery, etc. (the “Contractor Representative”).

The Contractor must notify the Contract Administrator at least 14 calendar days before removing or assigning a new Contractor Representative.

3.2. Contractor Representative

The Contract Administrator for each party is the only person authorized to modify any terms of this Contract, and approve and execute any change under this Contract (each a “Contract Administrator”):

State: Contractor:

Kyle Elzinga 7285 Parsons Drive Dimondale, MI 48913 ElzingaK1@michigan.gov 517-614-0956

Dan Concannon 2323 Grand Boulevard, Suite 1125 Kansas City, MO 6410 dconcannon@glasslewis.com 301-325-3328

3.3. Program Manager

The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract (each a “Program Manager”):

State: Contractor:

Karl Borgquist 2501 Coolidge Rd East Lansing, MI 48823 Borgquistk@michigan.gov 517-230-8419

Matt Seuffert 2323 Grand Boulevard, Suite 1125 Kansas City, MO 6410 Mseuffert@glasslewis.com 816-945-4525

3.4. Technical Support, Repairs, and Maintenance

The Contractor must provide telephone support from 8:00 a.m. to 6:00 p.m.

Eastern Standard Time (EST), Monday through Friday and must respond to concerns within two business days.

3.5. Work Hours

The Contractor must provide Contract Activities during the State’s normal working hours Monday – Friday, 8:00 a.m. to 6:00 p.m. EST, and possible night and weekend hours depending on the requirements of the project.

3.6. Key Personnel

The Contractor must appoint a Key Personnel who will be directly responsible for the day-to-day operations of the Contract (“Key Personnel”). Key Personnel must be specifically assigned to the State account, be knowledgeable on the contractual requirements, and respond to State inquiries within 48 hours.

The State has the right to recommend and approve in writing the initial assignment, as well as any proposed reassignment or replacement, of any Key Personnel. Before assigning an individual to any Key Personnel position, Contractor will notify the State of the proposed assignment, introduce the individual to the State’s Project Manager, and provide the State with a resume and any other information about the individual reasonably requested by the State. The State reserves the right to interview the individual before granting written approval. In the event the State finds a proposed individual unacceptable, the State will provide a written explanation including reasonable detail outlining the reasons for the rejection. The State may require a 30-calendar day training period for replacement personnel.

Contractor will not remove any Key Personnel from their assigned roles on this Contract without the prior written consent of the State. The Contractor’s removal of Key Personnel without the prior written consent of the State is an unauthorized removal (“Unauthorized Removal”). An Unauthorized Removal does not include replacing Key Personnel for reasons beyond the reasonable control of Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation, or for cause termination of the Key Personnel’s employment. Any Unauthorized Removal may be considered by the State to be a material breach of this Contract, in respect of which the State may elect to terminate this Contract for cause under the Termination for Cause section of the Standard Contract Terms. It is further acknowledged that an Unauthorized Removal will interfere with the timely and proper completion of this Contract, to the loss and damage of the State, and that it would be impracticable and extremely difficult to fix the actual damage sustained by the State as a result of any Unauthorized Removal. Therefore, Contractor and the State agree that in the case of any Unauthorized Removal in respect of which the State does not elect to exercise its rights under Termination for Cause, Contractor will issue to the State the corresponding credits set forth below (each, an “Unauthorized Removal Credit”):

The Contractor must identify the Key Personnel, indicate where they will be physically located, describe the functions they will perform, and provide current chronological résumés.

A. The Contractor must identify all Key Personnel that will be assigned to this Contract in the table below which includes the following:

1. Name and title of staff that will be designated as Key Personnel.

2. Identify which of the required key personnel positions they are fulfilling.

3. Key Personnel’s roles and responsibilities, as they relate to this RFP, if the

Contractor is successful in being awarded the Contract. Descriptions of roles should be functional and not just by title.

4. Identify if each Key Personnel is a direct, subcontract, or contract employee.

5. Identify where each Key Personnel staff member will be physically located (city and state) during the Contract performance.

1.

Name 2.

Years of Experience in

Current Classification

3.

Role(s) /

Responsibilities

4.

Direct /

Subcontract / Contract

5.

% of Work Time

6.

Physical Location

Matt Seufert 5 Client Service Manager

Direct 100% Kansas City, MO

Lucas Swertloff

10 Manager of North American Policy

Direct 100% New York, NY

Heidi Little 17 Vice President, Operations

Direct 100% Limerick, IR

Courtney Keating

10 Senior Director of ESG Research

Direct 100% Denver, CO

1.

Name

2.

Years of

Experience in Current

Classification

3.

Role(s) /

Responsibilities

4.

Direct /

Subcontract / Contract

5.

% of Work Time

6.

Physical Location

(dedicated to research team) Brianno Castro (dedicated to research team)

7 Senior Director of U.S. Research

Direct 100% San Francisco

, CA

Jason McCandless (dedicated to research team)

10 Senior Director of M&A Research

Direct 100% San Francisco

, CA

Joseph Gonzalez

3 Director of Sales Direct 100% Chicago, IL

The Glass Lewis team that would support the account is:

• Matt Seufert, Manager, Client Services

• Lucas Swertloff, Manager of North American Policy

• Heidi Little, Vice President, Operations

• Courteney Keatinge, Senior Director of ESG Research

• Jason McCandless, Senior Director of M&A Research

• Brianna Castro, Senior Director of U.S. Research

• Joseph Gonzalez, Director of Sales

3.7. Disclosure of Subcontractors

The Contractor will not utilize subcontractors on this Contract. Any addition of subcontractors must be added to the Contract through a Change Notice.

3.8. Security

The Contractor will be subject to the following security procedures:

The State may require the Contractor’s personnel to wear State issued identification badges.

The Contractor’s staff may be required to make deliveries to or enter State facilities. The Contractor must: (a) explain how it intends to ensure the security of State facilities, (b) whether it uses uniforms and ID badges, etc., (c) identify the company that will perform background checks, and (d) the scope of the background checks.

4. Project Management

4.1. Project Plan

A. Contractor must carry out this project under the direction and control of the

Program Manager. All implementation plans for use during the Implementation Period are subject to the approval of the Program Manager.

B. An implementation plan is not needed for this Contract.

4.2. Meetings

The Contractor must attend the following meetings:

A. In-person Kick-Off Meeting within five calendar days of the Effective Contract Date, and once within 30 days before Contract expiration.

B. There must be continuous liaising between the Program Manager and Contractor during the Implementation Period. The Program Manager will meet with the Contractor’s Representative for initial review and updated status of the Contractor’s project plan periodically during the Implementation Period.

The meetings will provide reviewing progress and providing necessary guidance to the Contractor regarding the timing of activities and solving issues or problems.

C. Although there will be continuous liaison with the Contractor team, Program Manager will meet quarterly at a minimum, or as requested by the Program Manager, with the Contractor’s Project Manager for the purpose of reviewing progress and providing necessary guidance to the Contractor in solving problems which arise.

D. The State may request other meetings, as it deems appropriate.

4.3. Reporting

A. The Contractor must submit written, monthly summaries of progress which outline the work accomplished during the reporting period; work to be accomplished during the subsequent reporting period; problems, real or anticipated, which should be brought to the attention of the Program Manager; and notification of any significant deviation from previously agreed-upon work plans.

B. For Proxy Voting/Corporate Governance Contractor, within 15 business days of the close of the quarter, the Contractor must make available the following reports on their website (Microsoft Excel formatted quarterly and annual reports):

1. MacBride Report detailing how companies voted with respect to shareholder resolutions and initiatives proposing adoption of the nine MacBride Principles enumerated in Section 13a of the Investment Act (see MCL 38.1133a).

2. External Managers Report detailing proxy votes cast by external managers on behalf to the State. The report must offer detail on how the external manager voted. The purpose of this report is to enable the State to monitor external managers to ensure that proxy votes cast by external managers align with the State of Michigan’s Proxy Voting Policy (see Section 1.1.1.1).

3. Michigan Companies Report detailing proxies voted for companies that are domiciled in the State of Michigan. This report must allow the user to filter votes cast in annual meetings of companies based in the State of Michigan (see Sections 1.1.1.2.f. and g.).

4. Reports summarizing novel issues of the proxy season and how other funds voted and viewed these issues (see Sections 1.1.1.2.h. and i.).

5. The Contractor must submit, to the Program Manager, any other related reports as requested by the Program Manager.

5. Ordering

5.1. Authorizing Document

The appropriate authorizing documents for the Contract will be a Purchase Order (PO) or Delivery Order (DO).

6. Invoice and Payment

6.1. Invoice Requirements

A. The Contractor must provide detailed invoices for services rendered which clearly outline the scope of billing.

B. All invoices submitted to the State must include: (a) date; (b) purchase order or delivery order number; (c) quantity; (d) description of the Contract Activities; (e) unit price; (f) shipping cost (if any); and (g) total price. Overtime, holiday pay, travel or other out of pocket or miscellaneous expenses will not be paid by the State.

6.2. Payment Methods

The State will make payment for Contract Activities within 45 days of the State’s receipt of invoice.

6.3. Procedure

Invoices are sent to TREAS-BOI-INVOICES@michigan.gov and treas_fadinvoices@michigan.gov - which is received and processed by BOI. The invoice is checked against the Contract to make sure terms align, then sent to the Program Manager for approval. The approved invoices are then directed to Treasury’s Accounting Services for payment. Purchasing may be brought in if there are questions surrounding the Contract or if Accounting Services and/or mailto:TREAS-BOI-INVOICES@michigan.gov mailto:treas_fadinvoices@michigan.gov

BOI need a new PO/DO. Accounting Services verifies and enters the payment into SIGMA.

7. Pricing Pricing is firm for the entire length of the Contract.

8. Liquidated Damages Late or improper completion of the Contract Activities will cause loss and damage to the State, and it would be impracticable and extremely difficult to fix the actual damage sustained by the State. Therefore, if there is late or improper completion of the Contract Activities, the State, as soon as legally and commercially practicable, must notify the Contractor and, to the extent such late or improper completion of the Contract Activities was caused by or is in the reasonable control of the Contractor, the Contractor must remedy the same within two Business Days. If Contractor does not remedy such late or improper completion of the Contract Activities within such two (2) business day period and the same was caused by the acts or omissions of the Contractor then, as the State’s sole remedy and the Contractor’s sole liability, the State is entitled to collect liquidated damages in the amount of $5,000.00 and an additional $100.00 per day for each day Contractor fails to remedy the late or improper completion of the Work. For the avoidance of doubt, such liquidated damages shall not apply to the extent any such late or improper completion of the Work is caused by the State, any third party (other than a contractor, supplier, or vendor of the Contractor), or is otherwise beyond the reasonable control of the Contractor.

SCHEDULE B PRICING

1. Pricing includes all costs, including but not limited to, any one-time or set-up charges, fees, and potential costs that Contractor may charge the State.

2. The State does not guarantee a minimum or maximum volume of work.

Deliverable Monthly Price Months Three-Year Total

1. Proxy Voting/Corporate Governance Services (Internally and Externally managed accounts)

$1,744.88 See Note 1 below X 36 $ 65,361.62

2. Voting History on BOI Website that Could Be Made Available to Public $375.00 X 36 $ 13,500.00

a. Email Support for Public Questions Not Available X 36 Not Available

Deliverable Contractor’s Hourly Rate

Estimated Hours per

Three- Years Months

Estimated Three- Year Total

3. Consulting Services See Note 2 X 30 X 36 To Be Determined

4. Custom Research/Reports for the first 25 hours per year (Hourly Rate and Hours) See Note 3 X 60 X 36 To Be Determined 4 a. Custom Research/Reports beyond the first 25 hours per year See Note 3

Estimated Three-Year Contract Total $ 78,861.62

5. Optional Services

a. Provide voting history of other funds on selected issues. $ N/A (not offered)

b. Vote reconciliation. $ 0 (Included in service)

c. Drafting shareholder resolutions. $ N/A (not offered)

d. Proxy solicitation services. $ N/A (not offered)

e. SEC no-action related requests under the SEC proxy rules. $ N/A (not offered)

Additional Resources and Costs (If Applicable)

1. SEC Executive Compensation Reporting (Subject to SEC Finalization)

$ 2,500.00 – 1yr Fee / Monthly $208.33 $ 2,375.00 – 2yr Fee / Monthly $197.92 $ 2,250.00 – 3yr Fee / Monthly $187.50

2. Archive voting records for votes cast prior to proposed contract period (obtained from prior vendor).

$ 5,000.00 – 1yr Fee /Monthly $416.67 $ 4,750.00 – 2yr Fee /Monthly $395.83 $ 4,500.00 – 3yr Fee /Monthly $375.00

Pricing Notes:

As noted in the pricing table above, SMRS’ will receive a 5% buffer each billing period. Once the buffer limit has been reached, the SMRS will be invoiced at the end of each Contract year and will be priced as follows:

o Ballots over 3000 (total U.S. and non-U.S. combined) at $2.00 each.

o Meetings over a total of 908 (U.S. and non-U.S. combined) will be

$15.00 per each U.S. meeting and $30.00 per each non-U.S. meeting.

o For the purposes of clarity, if the total overages are $2,000.00 and the annual fee is $20,000.00 (5% of $20,000.00=$1,000.00), the overage due will be $1,000.00 ($2,000.00-$1,000.00).

1. Should consulting services be required beyond the scope of the Contractor’s standard service, these services may also be provided free of charge, or could require a flat or hourly fee that would be negotiated upon review of the specific requirements, as mutually agreed to by the parties.

2. The Contractor already implements SMRS’ custom policy across all ballots voted. If custom research/reports are necessary beyond that scope, these services may be provided free of charge, or could require a flat or hourly fee that would be negotiated upon review of the specific requirements, as mutually agreed to by the parties. Requirements for more than 25 hours of work would be considered for a lower per - hour rate.

STANDARD CONTRACT TERMS

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Glass Lewis & Co., LLC (“Contractor”), a Delaware limited liability company. This Contract is effective on December 1, 2023 (“Effective Date”), and unless terminated, will expire on November 30, 2026 (the “Term”).

This Contract may be renewed for up to three, one-year periods. Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

The parties agree as follows:

1. Duties of Contractor. Contractor must perform the services and provide the deliverables (the “Contract Activities”) described in a Statement of Work, the initial Statement of Work is attached as Schedule A – Statement of Work. An obligation to provide delivery of any commodity is considered a service and is a Contract Activity.

Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of the Contract Activities unless otherwise specified in a Statement of Work.

Contractor must: (a) perform the Contract Activities in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry; (b) meet or exceed the performance and operational standards, and specifications of the Contract; (c) provide all Contract Activities in good quality, with no material defects; (d) not interfere with the State’s operations; (e) cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of the Contract; (f) return to the State any State-furnished equipment or other resources in the same condition as when provided when no longer required for the Contract; (g) assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of the Contract; (h) comply with all State physical and IT security policies and standards which will be made available upon request; and (i) provide the State priority in performance of the Contract except as mandated by federal disaster response requirements. Any breach under this paragraph is considered a material breach.

Contractor must also be clearly identifiable while on State property by wearing identification issued by the State, and clearly identify themselves whenever making contact with the State.

2. Notices. All notices and other communications required or permitted under this Contract must be in writing and will be considered given and received: (a) when verified by written receipt if sent by courier; (b) when actually received if sent by mail without verification of receipt; or (c) when verified by automated receipt or electronic logs if sent by facsimile or email.

If to State: If to Contractor:

See Contract Administrator information shown below.

Dan Concannon 2323 Grand Boulevard, Suite 1125 Kansas City, MO 6410 dconcannon@glasslewis.com 301-325-3328

3. Contract Administrator. The Contract Administrator, or the individual duly authorized for each party, is the only person authorized to modify any terms of this Contract, and approve and execute any change under this Contract (each a “Contract Administrator”):

State: Contractor:

Kyle Elzinga 7285 Parsons Drive Dimondale, MI 48821 ElzingaK1@michigan.gov 517-614-0956

Dan Concannon 2323 Grand Boulevard, Suite 1125 Kansas City, MO 6410 dconcannon@glasslewis.com 301-325-3328

4. Program Manager. The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract (each a “Program Manager”):

State: Contractor:

Karl Borgquist 2501 Coolidge Road, Suite 400 East Lansing, MI 48823 borgquistk@michigan.gov 517-230-8419

Matt Seuffert 2323 Grand Boulevard, Suite 1125 Kansas City, MO 6410 Mseuffert@glasslewis.com 816-945-4525

5. Performance Guarantee. Contractor must at all times have financial resources sufficient, in the opinion of the State, to ensure performance of the Contract and must provide proof upon request. The State may require a performance bond (as specified in a Statement of Work) if, in the opinion of the State, it will ensure performance of the Contract.

6. Insurance Requirements.

a. General Requirements. Contractor, at its sole expense, must maintain the insurance coverage as specified herein for the duration of the Term.

Minimum limits may be satisfied by any combination of primary liability, umbrella or excess liability, and self-insurance coverage. To the extent damages are covered by any required insurance, Contractor waives all rights against the State for such damages. Failure to maintain required insurance does not limit this waiver.

b. Qualification of Insurers. Except for self-insured coverage, all policies must be written by an insurer with an A.M. Best rating of A- VII or higher unless otherwise approved by DTMB Enterprise Risk Management.

c. Primary and Non-Contributory Coverage. All policies for which the State of Michigan is required to be named as an additional insured must be on a primary and non-contributory basis.

d. Claims-Made Coverage. If any required policies provide claims-made coverage, Contractor must:

(1) Maintain coverage and provide evidence of coverage for at least 3 years after the later of the expiration or termination of the Contract or the completion of all its duties under the Contract.

(2) Purchase extended reporting coverage for a minimum of 3 years after completion of work if coverage is cancelled or not renewed, and not replaced with another claims-made policy form with a retroactive date prior to the Effective Date of this Contract.

e. Proof of Insurance

(1) Insurance certificates showing evidence of coverage as required herein must be submitted to the Contract Administrator within 10 days of the contract execution date.

(2) Renewal insurance certificates must be provided on annual basis or as otherwise commensurate with the effective dates of coverage for any insurance required herein.

(3) Insurance certificates must be in the form of a standard ACORD Insurance Certificate unless otherwise approved by DTMB Enterprise Risk Management.

(4) All insurance certificates must clearly identify the Contract Number (e.g., notated under the Description of Operations on an ACORD form).

(5) The State may require additional proofs of insurance or solvency, including but not limited to policy declarations, policy endorsements, policy schedules, self-insured certification/authorization, and balance sheets.

(6) In the event any required coverage is cancelled or not renewed, Contractor must provide written notice to the Contract Administrator no later than 5 business days following such cancellation or nonrenewal.

f. Subcontractors. Contractor is responsible for ensuring its subcontractors carry and maintain insurance coverage.

g. Limits of Coverage & Specific Endorsements. (See Table 6.1 Below)

TABLE 6.1

Required Limits Additional Requirements

Commercial General Liability Insurance Minimum Limits:

$1,000,000 Each Occurrence $1,000,000 Personal & Advertising Injury $2,000,000 Products/Completed Operations $2,000,000 General Aggregate

Contractor must have their policy endorsed to add “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds using endorsement CG 20 10 11 85, or both CG 20 10 12 19 and CG 20 37 12 19.

Automobile Liability Insurance Minimum Limits:

$1,000,000 Per Accident Contractor must have their policy: (1) endorsed to add “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds; and

(2) include Hired and Non-Owned Automobile coverage.

Workers' Compensation Insurance Minimum Limits:

Coverage according to applicable laws governing work activities.

Waiver of subrogation, except where waiver is prohibited by law.

Employers Liability Insurance Minimum Limits:

$500,000 Each Accident $500,000 Each Employee by Disease $500,000 Aggregate Disease

Privacy and Security Liability (Cyber Liability) Insurance Minimum Limits:

$1,000,000 Each Occurrence $1,000,000 Annual Aggregate

Contractor must have their policy cover information security and privacy liability, privacy notification costs, regulatory defense and penalties, and website media content liability.

Professional Liability (Errors and Omissions) Insurance

Minimum Limits:

$3,000,000 Each Occurrence $3,000,000 Annual Aggregate

h. Non-Waiver. This Section 6 is not intended to and is not to be construed in any manner as waiving, restricting, or limiting the liability of either party for any obligations under this Contract, including any provisions hereof requiring Contractor to indemnify, defend and hold harmless the State.

7. Reserved.

8. Reserved.

9. Relationship of the Parties. The relationship between the parties is that of independent contractors. Contractor, its employees, and agents will not be considered employees of the State. No partnership or joint venture relationship is created by virtue of this Contract. Contractor, and not the State, is responsible for the payment of wages, benefits and taxes of Contractor’s employees and any subcontractors. Prior performance does not modify Contractor’s status as an independent contractor. Neither party has authority to contract for nor bind the other party in any manner whatsoever.

10. Intellectual Property Rights. State acknowledges and agrees that the deliverables derived from the Contract Activities shall be exclusively for internal use by State solely for the purpose of analyzing proxy statements, assessing the corporate governance standards of companies and casting proxy votes, and may not be used for any other purpose, or be made available, in whole or in part, by State to any other person or included in any materials or information that State makes available to any other person, without the express prior written consent of Contractor. All right, title and interest, including all copyrights and other intellectual property rights, in such deliverables, in both print and machine-readable forms, belong to Contractor and its third-party suppliers. State acquires no proprietary interest in the deliverables by virtue of this Agreement. Contractor shall mark all such deliverables as “Confidential – Trade Secret.” To the extent such deliverables are not deemed trade secrets, they may be subject to disclosure under the Michigan Freedom of Information Act {MCL}.

11. Subcontracting. Contractor may not delegate any of its obligations under the Contract without the prior written approval of the State. Contractor must notify the State at least 90 calendar days before the proposed delegation and provide the State any information it requests to determine whether the delegation is in its best interest.