SPADE Defense Index

Calculation Methodology
The Index is calculated using a modified market capitalization weighting methodology. The components market capitalization weights are modified to conform to asset diversification rules that are applied in conjunction with the scheduled quarterly updates to the Index. The resultant weighting is designed to be RIC compliant and 'fund friendly'. The weight of any component stock may not account for more than 10% of the total value of the Index.

Maintenance of the Index

In the event of a merger between two components, the share weight of the surviving entity may be adjusted to account for any shares issued in the acquisition.

The ISBC may substitute components or change the number of issues included in the index, based on changing conditions in the industry or in the event of certain types of corporate actions, including mergers, acquisitions, spin-offs, and reorganizations.

In the event of component or share weight changes to the Index portfolio, the payment of dividends other than ordinary cash dividends, spin-offs, rights offerings, re-capitalization, or other corporate actions affecting a component of the Index; the Index divisor may be adjusted to ensure that there are no changes to the Index level as a result of non-market forces.

For changes in a component's shares outstanding greater than 5% due to a merger, acquisition or spin-off, an adjustment will be made effective after the close on the effective date of the corporate action. Share changes less than 5% are made during the scheduled quarterly updates to the Index.

Quarterly Updates
Changes to the Index composition and/or the component share weights in the Index typically take effect after the close of trading on the next to last business day of each calendar quarter month ("Rebalance Date"). The components and weights will be determined and announced at the close of trading two days prior to the Rebalance Date. This takes place in March, June, September, and December.

In conjunction with the quarterly review, the share weights used in the calculation of the Index are updated based upon current shares outstanding and prices as of the close of trading two business days prior to the Rebalance Date. The share weight of each component in the Index portfolio remains fixed between quarterly reviews except in the event of certain types of corporate actions such as splits, reverse splits, stock dividends, or similar events.