Exhibit p.2
REAMS ASSET MANAGEMENT COMPANY, LLC
CODE OF ETHICS and COMPLIANCE PROCEDURES STATEMENT
I. Applicability. This Code of Ethics and Compliance
Procedures Statement (this "Statement"), as
restated, is effective August 1, 2000, updates and
replaces the policy statement adopted March 31,
1994 and amended April 30, 1998, and applies to
all employees, Managers and Members of Reams Asset
Management Company, LLC (other than Class B
Members subject to a Code of Ethics represented to
comply with Rule 17j-1 under the Investment
Company Act of 1940, as amended (the "1940 Act"))
(collectively, "Employees"). All Employees are
expected to be knowledgeable of and comply with
this Statement, and to confirm such knowledge and
compliance annually in writing.
II. Definitions.
A. "Advisory client" means any client (including
both investment companies and managed
accounts) for which REAMS (i) serves as
investment adviser or subadviser, (ii)
renders investment advice, or (iii) makes
investment decisions.
B. "Company" or "REAMS" means Reams Asset
Management Company, LLC.
C. "Compliance Officer" means the individual
designated as such by the Managers of the
Company.
D. "Beneficial ownership" shall be interpreted
in the same manner as it would be in
determining whether a person is subject to
the provisions of Section 16 of the
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and
regulations promulgated thereunder, except
that the determination of direct or indirect
beneficial ownership shall apply to all
securities which an Employee owns or
acquires. As a general matter, "beneficial
ownership" will be attributed to an Employee
in all instances where the person (i)
possesses the ability to purchase or sell the
security (or the ability to direct the
disposition of the security); (ii) possesses
the voting power (including the power to vote
or to direct the voting) over such security;
or (iii) receives any benefits substantially
equivalent to those of ownership.
Although the following is not an exhaustive
list, a person generally would be regarded to
be the beneficial owner of the following:
(i) securities held in the person's own
name;
(ii) securities held with another in
joint tenancy, as tenants in
common, or in other joint ownership
arrangements;
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(iii) securities held by a bank or
broker as a nominee or custodian on
such person's behalf or pledged as
collateral for a loan;
(iv) securities held by members of the
person's immediate family sharing
the same household ("immediate
family" means any child, stepchild,
grandchild, parent, stepparent,
grandparent, spouse, sibling,
mother-in-law, father-in-law, son-
in-law, daughter-in-law, brother-in-
law or sister-in-law, including
adoptive relationships);
(v) securities held by a relative not
residing in the person's home if
the person is a custodian,
guardian, or otherwise has
controlling influence over the
purchase, sale, or voting of such
securities;
(vi) securities held by a trust for
which the person serves as a
trustee and in which the person has
a pecuniary interest (including
pecuniary interests by virtue of
performance fees and by virtue of
holdings by the person's immediate
family);
(vii) securities held by a trust in
which the person is a beneficiary
and has or shares the power to make
purchase or sale decisions;
(viii) securities held by a general
partnership or limited partnership
in which the person is a general
partner; and
(ix) securities owned by a corporation,
including a foundation, which is
directly or indirectly controlled
by, or under common control with,
such person.
Any uncertainty as to whether an Employee
beneficially owns a security should be
brought to the attention of the Compliance
Officer. Such questions will be resolved in
accordance with, and this definition is
subject to, the definition of "beneficial
owner" found in Rules 16a-1(a)(2) and (5)
promulgated under the Exchange Act .
E. "Personal securities transaction" means a
purchase or sale of a Security in which an
Employee or members of his or her immediate
family sharing the same household has or
acquires a Beneficial ownership interest.
Personal securities transaction shall not
include a purchase or sale of a Security made
by REAMS in an Advisory account in which the
Employee or members of his or her immediate
family has or acquires a Beneficial ownership
interest.
F. "Purchase or sale of a security" includes,
among other things, the writing of an option
to purchase or sell a security.
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G. "Securities" shall have the meaning set forth
in Section 2 (a)(36) of The Act, except that
it shall not include shares of registered
open-end investment companies, direct
obligations of the Government of the United
States, high quality short-term debt
instruments, bankers' acceptances, bank
certificates of deposit, and commercial
paper.
III. General Principles. The following general
fiduciary principles govern the personal conduct
of all Employees:
(1) It is each Employee's duty at all times to
place the interests of Advisory clients,
ahead of personal interests;
(2) All Personal securities transactions are
to be conducted in a fashion consistent with
this Statement and in such a manner as to
avoid any actual or potential conflict of
interest or any abuse of the individual's
position of trust and responsibility; and
(3) Employees shall refrain from taking
inappropriate advantage of their position.
"Taking inappropriate advantage" includes but is
not limited to the provision by an Employee to any
other person of proprietary information concerning
and/or advice on investment in, securities which
are eligible to be held in REAMS Advisory client
accounts (other than in securities exempted from
advance clearance as referenced in Section VIII(1)
hereof).
IV. Code of Ethics. The Code of Ethics and Standards
of Professional Conduct, (together, the "Code"),
of the Association for Investment Management and
Research, as amended May 5, 1996, (Appendix A) is
adopted by reference, and applies to all
Employees, whether or not engaged in investment
analysis. It is specifically noted that Section
B.4 of the Code deals with Priority of
Transactions, and states the cardinal principle
that "transactions for clients and employers shall
have priority over transactions in securities...of
which [the Employee] is the beneficial owner, so
that such personal transactions do not operate
adversely to their clients' or employer's
interests."
V. Statutory Reporting Requirements. The Securities
and Exchange Commission ("SEC") requires, pursuant
to the Investment Advisers Act of 1940 and the
1940 Act (Rule 204-2 (a)(12) and Rule 17j-1,
respectively) that Employees report and that REAMS
maintain a record of Employees' Personal
securities transactions where the Employee has
direct or indirect beneficial ownership, other
than transactions in which the Employee has
neither direct nor indirect influence or control,
and that such transactions are to "be recorded not
later than 10 days after the end of the calendar
quarter in which the transaction was effected."
This applies to all Employees, and to transactions
in all securities. The information to be provided
is as follows:
(1) The date of the transaction, the title,
the interest rate and maturity date (if
applicable) and number of shares or the
principal amount of the security;
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(2) The type of transaction (i.e., purchase,
sale or other transaction (to be
specified));
(3) The price of the security at which the
transaction was effected; and
(4) The name of the broker, dealer or other bank with
or through whom the transaction was effected;
(5) The date that the report is submitted by the
Employee.
The report may contain a statement that it shall
not be construed as an admission that the Employee
has any direct or indirect beneficial ownership in
the securities to which the report relates. A
form which may be used to meet the Employee
reporting requirement is attached hereto as
Exhibit A.
VI. Exempt Transactions.
The restrictions of Section VII of this Statement shall
not apply to:
(1) Purchases and sales effected in any
account over which the Employee has no
direct or indirect influence or control
(e.g., a blind trust);
(2) Purchases or sales of securities which are
not eligible for purchase or sale by
accounts for which REAMS serves as a
subadviser;
(3) Purchases or sales which are non-
volitional on the part of the Employee;
(4) Purchases which are part of an automatic
dividend reinvestment plan or;
(5) Purchases effected upon the exercise of
rights issued by an issuer pro rata to all
holders of a class of its securities, to the
extent such rights were acquired from the
issuer; and sales of such rights so
acquired.
The Securities transactions listed above are not exempt
from the reporting requirements set forth in Section V.
VII. Investment and Other Restrictions.
(1) No Employee shall purchase or sell, directly
or indirectly, any Security in which the
Employee has or thereby obtains a direct or
indirect beneficial ownership interest within
three calendar days before or after REAMS
trades on behalf of any Advisory client in
such Security or while REAMS has on behalf of
any Advisory client an unfilled order pending
with a broker in such Security. However, an
Employee may purchase or sell the same
Securities as an Advisory client, without
regard to the 3 day period, provided that the
Employee executes the transaction at the same
or worse price as that received by the
Advisory client. In addition, the 3 day
period shall not
<PAGE>
apply to purchases or sales
which receive the prior approval of the
Compliance Officer because they (i) are not
harmful to any Advisory client; (ii) would be
very unlikely to affect a highly institutional
market; or (iii) clearly are not related
economically to securities to be purchased,
sold or held by an Advisory client.
(2) No Employee shall acquire any securities in
an initial public offering.
(3) No employee shall acquire securities pursuant to a
private placement without prior approval from the
Company's Managers. In determining whether approval
should be granted, the Managers should consider:
(a) Whether the investment opportunity should be
reserved for the Company and its Advisory Clients; and
(b) Whether the opportunity is being offered to an
individual by virtue of his or her position with the
Company.
The Company must maintain a record of any
decision, and the reasons supporting the
decision, to approve the acquisition by
Employees for at lease five years after the
end of the fiscal year in which the approval
is granted. In the event approval is granted,
the Employee must disclose the investment when
he or she plays a material role in the
Company's subsequent consideration of an
investment in the issurer. In such
circumstances, the Company's decision to
purchase securities of the issuer will be
subject to an independent review by investment
personnel with no personal interest in the
issuer.
(4) No Employee shall accept personally any gift
or other benefit (including travel, lodging,
meals and/or entertainment) of more than de
minimis value from any person or entity that
does business with REAMS on behalf of any
client of REAMS. Such prohibition shall not
apply to seasonal gifts made generally
available to all REAMS Employees at the
Company's business office or to meals and/or
entertainment provided in the ordinary course
of business and consistent in cost with the
Company's standards for Employee expenditures.
(5) No Employee shall serve on the Board of
Directors of a publicly traded company without
prior authorization by the Managers of REAMS
based upon a determination that such service
would be consistent with the interests of
REAMS and its clients.
VIII. Compliance Procedures.
(1) Advance clearance is required for all
Personal securities transactions in which an
Employee has a Beneficial ownership interest,
excluding (i) transactions in Securities which
are not eligible to be held in REAMS Advisory
client accounts, (ii) transactions in the
Securities of companies having an aggregate
market capitalization in excess of $3 billion,
(iii) transactions for the direct or indirect
benefit of such Employee made by persons or
entities to whom such Employee has granted
discretionary investment authority, provided
that such Employee is not advised of
<PAGE>
the transactions in advance and does not
participate in the decision-making related
thereto and (iv) transactions in options or
futures on broad based market indices or
related securities (e.g., SPDRs). A form
provided for advance clearance is attached
hereto as Exhibit B.
(2) Clearance requests should be submitted in
writing in duplicate to D.B. McKinney, or in
his absence to David R. Milroy, or in his
absence to any other Manager of REAMS, who may
approve or disapprove such transactions on the
grounds of compliance with this Statement, the
Code or otherwise. Approval shall only be
given when the person giving it has determined
that the intended transaction does not fall
within any of the prohibitions in this
Statement or the Code. One copy of the
clearance request will be returned to the
Employee showing approval or disapproval and
one copy will be retained by the Compliance
Officer.
(3) The authorization provided by the Manager is
effective until the earlier of (i) its
revocation, (ii) the close of business on the
second trading day after the authorization is
granted (for example, if authorization is
provided on a Monday, it is effective until
the close of business on Wednesday), or (iii)
the Employee learns that the information in
the trade request is not accurate. If the
order for the Personal securities transaction
is not placed within that period, a new
advance authorization must be obtained before
the transaction is placed. If the transaction
is placed but has not been executed within two
trading days after the day the authorization
is granted (as, for example, in the case of a
limit order), no new authorization is
necessary unless the person placing the
original order amends it in any way.
(4) Employees are required to provide duplicate
copies of their periodic security trading
(brokerage) account statements, if any, to the
Compliance Officer. Duplicate statements must
be provided no less frequently than quarterly,
and within 30 calendar days after the end of
each quarter. A memorandum which may be used
for this reporting requirement is attached
hereto as Exhibit C. Employees may also
provide duplicate copies of their trade
confirmations. A letter which may be used to
request that a broker, dealer or bank send
duplicate statements and/or confirmations
directly to the Compliance Officer is attached
hereto as Exhibit D.
(5) The Compliance Officer shall monitor
Employees' Personal securities transactions
for compliance with this Statement and the
Code, and shall make a written report of any
infractions to the Managers of the Company,
who will after suitable inquiry adjudicate the
matter including determination of the
sanctions, if any, to be levied, which may
include but are not limited to forfeiture of
trading profits. In the case of alleged
infractions by the Manager of the Company, the
other Managers of the Company shall
collectively adjudicate by majority vote. In
the case of the Compliance Officer's Personal
securities transactions, a Manager shall
monitor and adjudicate.
(6) Employees shall disclose details of their
Personal securities holdings within ten (10)
days of commencement of employment and
annually as December 31 thereafter, no
<PAGE>
later than January 30 of the following year. The
disclosure shall take the form of a written
statement provided to the Compliance Officer.
This statement may, but is not required to
include holdings of securities in which
trading is not required to be reported. A
form which may be used for this reporting
requirement is attached hereto as Exhibit E.
(7) On commencement of employment an Employee
shall confirm in writing to the Compliance
Officer his or her understanding of the Code
and this Statement, and his or her obligation
to comply therewith. All Employees are
required to submit annually to the Compliance
Officer a Statement of Compliance in the form
attached as Exhibit F, confirming their
understanding of and compliance with both the
Code and this Statement.
(8) All written information provided to the
Compliance Officer pursuant to this Statement
shall be retained in confidential files.
(9) The Compliance Officer shall prepare an
annual report to the Managers of the Company
and to The Board of Directors of any
Investment Company for which The Company
serves as Investment Adviser summarizing the
Company's procedures concerning personal
investing, detailing any significant
violations during the past year and
identifying suggested changes in policies or
procedures in the light of experience,
industry practices or legislative and
regulatory developments and stating that The
Company has adopted procedures reasonable
necessary to prevent its Employees from
violating this Code of Ethics.
<PAGE>
APPENDIX A
ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH
(AIMR)
CODE OF ETHICS AND STANDARDS OF PROFESSIONAL CONDUCT
As Amended May 5, 1996
ATTACHED
<PAGE>
EXHIBIT A
REAMS ASSET MANAGEMENT COMPANY, LLC
THIS REPORT MUST BE SUBMITTED WITHIN 10 DAYS OF QUARTER END
EMPLOYEE TRANSACTION RECORD for ______________________________
(Name)
FOR QUARTER ENDED _______________________________
(Date)
I AM REPORTING BELOW ALL TRANSACTIONS REQUIRED TO BE
REPORTED FOR THE QUARTER PURSUANT TO THE CODE OF ETHICS
AND COMPLIANCE PROCEDURES STATEMENT OF THE COMPANY, AS
RESTATED August 1, 2000, AND THE CODE OF ETHICS AND
STANDARDS OF PROFESSIONAL CONDUCT OF THE ASSOCIATION
FOR INVESTMENT MANAGEMENT AND RESEARCH AS AMENDED MAY
5, 1996.
__________________________ ____________________________
(Date) (Employee's Signature)
Check if applicable: ( ) I had no reportable transactions during
this reporting period.
( ) All transactions required to be
reported have been provided to the
Compliance Officer through duplicate
confirmations.
( ) The reporting of any transaction
below shall not be construed as an
admission that I have any direct or
indirect beneficial ownership in the
subject security.
Date Security # Shares Purch/ Price Broker
Name or Par Sale/Other Name
------ --------- --------- ---------- ------- ----------------
------ --------- --------- ---------- -------- ----------------
______ _________ _________ __________ ________ ________________
______ _________ _________ __________ ________ ________________
(attach additional sheets if necessary)
REVIEWED: ___________________ __________________________
(Date) (Signature)
FOLLOW-UP ACTION (if any) (attach additional sheet if required)
___________________________________________________________
<PAGE>
EXHIBIT B
REAMS ASSET MANAGEMENT COMPANY
ADVANCE PERSONAL TRADING CLEARANCE/REVIEW REQUEST
Background:
The Company's Code of Ethics and Compliance Procedures
Statement states in part that "advance clearance is
required for all Personal securities transactions in
which an Employee has a Beneficial ownership interest,
excluding (i) transactions in Securities which are not
eligible to be held in REAMS Advisory client accounts,
(ii) transactions in the Securities of companies having
an aggregate market capitalization in excess of $3
billion, (iii) transactions for the direct or indirect
benefit of such Employee made by persons or entities to
whom such Employee has granted discretionary and
investment authority, provided that such Employee is
not advised of the transactions in advance and does not
participate in the decision-making related thereto and
(iv) transactions in options or futures on broad based
market indices or related securities (e.g., SPDRs).
REAMS defines "personal securities transactions" as
purchases or sales of a Security in which an Employee
or members of his or her immediate family sharing the
same household has or acquires a Beneficial ownership
interest. "Immediate family" includes any child,
stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-
law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships.
Clearance/Review Request: (form should also be used
also to record trading where clearance is not required,
so as to document non-clearance requirement)
1. Name of Employee:
2. If different than (1), name of person in whose
account the trade will occur:
3. Relationship of (2) to (1):
4. Name of Security:
5. Maximum number of shares or units to
be purchased or sold or amount of bond:
6. Check if applicable:Purchase ____ Market Order ____
Sale ____ Limit Order ____ (Limit Order Price: )
To: DBM/DRM From: ___________ Date: ____/____/____ Time:__________
I (or accounts defined above as "personal") intend to
purchase/sell the above-named Security (on date if other than
above: ____/____/____). My initials above confirm that
to the best of my knowledge, the proposed transaction is in
compliance with the Company's Code of Ethics and Compliance
Procedures Statement.
Check and Complete A or B.
<PAGE>
A: ( ) For clearance: policy check-off (OK shown in bold)
Last date REAMS traded: ____/____/____
Open order unfilled: YES/NO IPO: YES/NO Private placement: YES/NO
B. ( ) Excluded from clearance requirement (Exclusion shown in bold)
Eligible for clients: YES/NO Market cap > $3 bil.: YES/NO
Option or future on market indices: YES/NO
CERTIFICATION OF EMPLOYEE DESIGNEE (if applicable)
The undersigned hereby certifies that the above-named
Employee (a) directly instructed me to complete this Form on
his or her behalf, (b) to the best of my knowledge, was out
of the office at the time of such instruction and has not
returned, and (c) confirmed to me that the information and
representations contained in this form are accurate.
_________________________ _________________________
Employee Designee Print Name
-------------------------------------------------------------
Clearance/Review Decision: Date: ____/____/____ Time:
The proposed transaction is: APPROVED / DISAPPROVED ________________________
(initials of interviewer)
Comments/notes: _________________________________________________________
[White Copy: Compliance Officer; Yellow Copy: Employee]
<PAGE>
EXHIBIT C
TO: Compliance Officer
FROM:
SUBJECT: Brokerage Statements
Pursuant to Section VIII(4) of the Company's CODE OF
ETHICS and COMPLIANCE PROCEDURES STATEMENT, attached
are copies of the brokerage statements listed below for
the period from [date] to [date]. This submission
constitutes my complete and timely compliance with
aforesaid Section for the period stated. (Each
quarter's statements are required to be submitted
within 30 days of quarter-end. If the attached
statements cover a different time period, please so
note).
Check if applicable: ( ) I had no brokerage accounts
during the period stated above.
_________________________ ____________________________
Date Employee Signature
BROKERAGE FIRM ACCOUNT NAME ACCOUNT No.
<PAGE>
EXHIBIT D
Form of Letter to Broker, Dealer or Bank
[Date]
[Broker, Dealer or Bank Name and Address]
RE: Account #
Dear :
You are hereby requested to send [duplicate
confirmations of individual transactions as well as]
duplicate periodic statements for the above-referenced
account(s) to Reams Asset Management Company, LLC.
Please address the confirmations and statements
directly to:
Compliance Officer
Reams Asset Management Company, LLC
P.O. Box 1377
Columbus, IN 47202-1377
If you have any questions regarding this request,
please contact me at (812) 372-6606.
Sincerely,
[Name of Employee]
cc: Mr. David B. McKinney
<PAGE>
EXHIBIT E
REAMS ASSET MANAGEMENT COMPANY
REPORT OF PERSONAL SECURITIES HOLDINGS
Preamble:
The Company's Code of Ethics and Compliance Procedures
Statement states in part that "employees shall disclose
details of their Personal securities holdings upon
commencement of employment and annually as of year-end
thereafter, no later than January 30 of the following
year. The disclosure shall take the form of a written
statement provided to the Compliance Officer. The
statement may but is not required to include holdings
of securities in which trading is not required to be
reported." This form may be used for making the
required report, or you may use any other format you
prefer. If you have already reported all reportable
year-end holdings by submission of year-end brokerage
statements, just check the applicable box and sign &
date where indicated.
Personal Securities Holdings Report by:
(name)
As of: Year-end 20_____ or date of employment (____/____/____)
[Check and complete as applicable]: Holdings already
reported on brokerage statement/s ( )
Holdings are listed below ( ) or on attached statement/s ( ).
If NONE, check here ( )
# Shares or par value Type/description Issuer (full name, not symbol)
--------------------- ---------------- ------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
______________________________ __________
(Signature) (Date)
<PAGE>
EXHIBIT F
REAMS ASSET MANAGEMENT COMPANY, LLC
Personal Investment Compliance Certification
I am knowledgeable of the Code of Ethics and Compliance
Procedures Statement adopted by Reams Asset Management
Company, LLC ("REAMS") effective, as restated August 1,
2000, (the "Statement") and the Code of Ethics and
Standards of Professional Conduct, (together, the
"Code"), of the Association for Investment Management
and Research as amended May 5, 1996, as adopted by
reference in the Statement. The intent of the
Statement and the Code is to ensure that ethical
standards are observed by all REAMS employees, that
regulatory disclosure obligations are met, and that the
interests of customers, clients, and employer have
priority and take precedence over the personal
interests of employees.
To the best of my knowledge, during the period January
1, 20__ to December 31, 20__, I was in compliance with
the Statement and the Code and made no Personal
securities transactions which were or might be
considered to be in conflict with the Statement or the
Code. In addition, I have submitted to REAMS full and
complete records of all Personal securities
transactions required to be reported by the Statement
and the Code.
Printed Name: _____________________
Signature: _____________________
Date: _____________________
