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EXHIBIT P(ii)
CRAMER ROSENTHAL MCGLYNN, LLC
("CRM")
CODE OF ETHICS
AND
STANDARDS OF PROFESSIONAL CONDUCT
REPRINTED FROM THE
ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH
PUBLICATION FOR
THE INSTITUTE OF CHARTERED FINANCIAL ANALYSTS
All portfolio managers, analysts and other employees who make investment
recommendations are expected to comply with this Code of Ethics and these
Standards of Professional Conduct.
Revised June 20, 2000
CODE OF ETHICS
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A financial analyst should conduct himself(1) with integrity and dignity and act
in an ethical manner in his dealing with the public, clients, customers,
employers, employees, and fellow analysts.
A financial analyst should conduct himself and should encourage others to
practice financial analysis in a professional and ethical manner that will
reflect credit on himself and his profession.
A financial analyst should act with competence and should strive to maintain and
improve his competence and that of others in the profession.
A financial analyst should use proper care and exercise independent professional
judgment.
STANDARDS OF PROFESSIONAL CONDUCT
I. OBLIGATION TO INFORM EMPLOYER OF CODE AND STANDARDS
The financial analyst shall inform his employer, through his direct
supervisor, that the analyst is obligated to comply with the Code of Ethics and
Standards of Professional Conduct, and is subject to disciplinary sanctions for
violations thereof. He shall deliver a copy of the Code and Standards to his
employer if the employer does not have a copy.
II. COMPLIANCE WITH GOVERNING LAWS AND REGULATIONS AND THE CODE AND STANDARDS
A. REQUIRED KNOWLEDGE AND COMPLIANCE
The financial analyst shall maintain knowledge of and shall
comply with all applicable laws, rules, and regulations of any government,
governmental agency, and regulatory organization governing his professional,
financial, or business activities, as well as with these Standards of
Professional Conduct and the accompanying Code of Ethics.
B. PROHIBITION AGAINST ASSISTING LEGAL AND ETHICAL VIOLATIONS
The financial analyst shall not knowingly participate in, or
assist, any acts in violation of any applicable law, rule, or regulation of any
government, governmental agency, or regulatory organization governing his
professional, financial, or business activities, nor any act which would violate
any provision of these Standards of Professional Conduct or the accompanying
Code of Ethics.
C. PROHIBITION AGAINST USE OF MATERIAL NONPUBLIC INFORMATION
The financial analyst shall comply with all laws and regulations
relating to the use and communication of material nonpublic information. The
financial analyst's duty is generally defined as to not trade while in
possession of, nor communicate, material nonpublic information in breach of a
duty, or if the information is misappropriated.
Duties under the standard include the following: (1) If the
analyst acquires such information as a result of a special or
confidential
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(1) MASCULINE PRONOUNS, USED THROUGHOUT THE CODE AND STANDARDS TO SIMPLIFY
SENTENCE STRUCTURE, SHALL APPLY TO ALL PERSONS, REGARDLESS OF SEX.
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relationship with the issuer or others, he shall
not communicate the information (other that within the
relationship), or take investment action on the basis of such
information, if it violates that relationship. (2) If the
analyst is not in a special or confidential relationship with
the issuer or others, he shall not communicate or act on
material nonpublic information if he knows, or should have
known, that such information (a) was disclosed to him, or
would result, in a breach of a duty, or (b) was
misappropriated.
If such a breach of duty exists, the analyst shall make reasonable
efforts to achieve public dissemination of such information.
D. RESPONSIBILITIES OF SUPERVISORS
A financial analyst with supervisory responsibility shall
exercise reasonable supervision over those subordinate
employees subject to his control, to prevent any violation
such persons of applicable statues, regulations, or provisions
of the Code of Ethics or Standards of Professional Conduct. In
so doing the analyst is entitled to rely upon reasonable
procedures established by his employer.
III. RESEARCH REPORTS, INVESTMENT RECOMMENDATIONS AND ACTIONS
A. REASONABLE BASIS AND REPRESENTATIONS
1. The financial analyst shall exercise diligence and
thoroughness in making an investment recommendations
to others or in taking an investment action for
others.
2. The financial analyst shall have a reasonable
and adequate basis for such recommendations and
actions, supported by appropriate research and
investigation.
3. The financial analyst shall make reasonable and
diligent efforts to avoid any material
misrepresentation in any research report or
investment recommendation.
4. The financial analyst shall maintain
appropriate records to support the
reasonableness of such recommendations and
actions.
B. RESEARCH REPORTS
1. The financial analyst shall use reasonable judgment
as to the inclusion of relevant factors in research
reports.
2. The financial analyst shall distinguish between
facts and opinions in research reports.
3. The financial analyst shall indicate the basic
characteristics of the investment involved when
preparing
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for general public distribution a research report that is not directly
related to a specific portfolio or client.
C. PORTFOLIO INVESTMENT RECOMMENDATIONS AND ACTIONS
1. The financial analyst shall, when making an
investment recommendation or taking an investment
action for a specific portfolio or client, consider
its appropriateness and suitability for such
portfolio or client. In considering such matters, the
financial analyst shall take into account (a) the
needs and circumstances of the client, (b) the basic
characteristics of the investment involved, and (c)
the basic characteristics of the total portfolio. The
financial analyst shall use reasonable judgment to
determine the applicable relevant factors.
2. The financial analyst shall distinguish between
facts and opinions in the presentation of
investment recommendations.
3. The financial analyst shall disclose to clients and
prospective clients the basic format and general
principals of the investment processes by which
securities are selected and portfolios are
constructed and shall promptly disclose to clients
any changes that might significantly affect those
processes.
D. PROHIBITION AGAINST PLAGIARISM
The financial analyst shall not, when presenting material to
his employer, associates, customers, clients, or the general
public, copy or use in substantially the same form, material
prepared by other persons without acknowledging its use and
identifying the name of the author or publisher of such
material. The analyst may, however, use without acknowledgment
factual information published by recognized financial and
statistical reporting services or similar sources.
E. PROHIBITION AGAINST MISREPRESENTATION OF SERVICES
The financial analyst shall not make any statements,
orally or in writing, which misrepresent (1) the
services that the analyst or his firm is capable of
performing for the client, (2) the qualifications of
such analyst or his firm, and/or (3) the expected
performance of any investment.
The financial analyst shall not make, orally or in writing,
explicitly or implicitly, any assurances about or guarantees of any investment
or its return except communication of accurate information as to the terms of
the investment instrument and the issuer's obligations under the instrument.
F. PERFORMANCE PRESENTATION STANDARDS
1. The financial analyst shall not make any statements, orally
or in writing, which misrepresent the investment performance that the analyst or
his firm has
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accomplished or can reasonably be expected to achieve.
2. If an analyst communicates directly or
indirectly individual or firm performance
information to a client or prospective client,
or in a manner intended to be received by a
client or prospective client ("Performance
Information"), the analyst shall make every
reasonable effort to ensure that such
Performance Information is a fair, accurate,
and complete presentation of such performance.
3. The financial analyst shall inform his employer about
the existence and content of the Association for
Investment Management and Research's Performance
Presentation Standards, and this Standard III F, and
shall encourage his employer to adopt and use the
Performance Presentation Standards.
4. If Performance Information complies with the
Performance Presentation Standards, the analyst
shall be presumed to be in compliance with III
F 2 above.
5. An analyst presenting Performance Information
may use the following legend on the Performance
Information presentation, but only if the
analyst has made every reasonable effort to
ensure that such presentation is in compliance
with the Performance Presentation Standards in
all material respects:
"This report has been prepared and presented in
compliance with the Performance Presentation Standards of the Association for
Investment Management and Research."
G. FAIR DEALING WITH CUSTOMERS AND CLIENTS
The financial analyst shall act in a matter
consistent with his obligation to deal fairly with
all customers and clients when (1) disseminating
investment recommendations, (2) disseminating
materials changes in prior investment advice, and (3)
taking investment action.
IV. PRIORITY OF TRANSACTIONS
The financial analyst shall conduct himself in such a manner that
transactions for his customers, clients, and employer have priority over
transactions in securities or other investments of which he is the beneficial
owner, and so that transactions in securities or other investments in which he
has such beneficial ownership do not operate adversely to their interests. If an
analyst decides to make a recommendation about the purchase or sale of a
security or other investment, he shall give his customers, clients, and employer
adequate opportunity to act on this recommendation before acting on his own
behalf.
For purposes of these Standards of Professional Conduct, a financial
analyst is a "beneficial owner" if he directly or indirectly, through any
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contract, arrangement, understanding, relationship or otherwise, has or shares a
direct or indirect pecuniary interest in the securities or the investment.
V. DISCLOSURE OF CONFLICTS
The financial analyst, when making investment recommendations, or
taking investment actions, shall disclose to his customers and clients any
material conflict or interest relating to him and any material beneficial
ownership of the securities or other investments involved that could reasonably
be expected to impair his ability to render unbiased and objective advice.
The financial analyst shall disclose to his employer all matters that
could reasonably be expected to interfere with his duty to the employer, or with
his ability to render unbiased and objective advice.
The financial analyst shall also comply with all requirements as to
disclosure of conflicts of interest imposed by law and by rules and regulations
of organizations governing his activities and shall comply with any prohibitions
on his activities if a conflict of interest exists.
VI. COMPENSATION
A. DISCLOSURE OF ADDITIONAL COMPENSATION ARRANGEMENTS
The financial analyst shall inform his customers, clients, and
employer of compensation or other benefit arrangements in
connection with his services to them which are in addition to
compensation from them for such services.
B. DISCLOSURE OF REFERRAL FEES
The financial analyst shall make appropriate disclosure to a
prospective client or customer of any consideration paid or
other benefit delivered to others for recommending his
services to that prospective client or customer.
C. DUTY TO EMPLOYER
The financial analyst shall not undertake independent
practice, which could result in compensation or other benefit
in competition with his employer unless he has received
written consent from both his employer and the person for whom
he undertakes independent employment.
VII. RELATIONSHIPS WITH OTHERS
A. PRESERVATION OF CONFIDENTIALITY
A financial analyst shall preserve the confidentiality of
information communicated by the client concerning matters
within the scope of the confidential relationship, unless the
financial analyst receives information concerning illegal
activities on the part of the client.
B. MAINTENANCE OF INDEPENDENCE AND OBJECTIVITY
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The financial analyst, in relationships and contacts with an
issuer of securities, whether individually or as a member of a
group, shall use particular care and good judgment to achieve
and maintain independence and objectivity.
C. FIDUCIARY DUTIES
The financial analyst, in relationships with clients, shall
use particular care in determining applicable fiduciary duty
and shall comply with such duty as to those persons and
interests to whom it is owed.
VIII. USE OF PROFESSIONAL DESIGNATION
The qualified financial analyst may use, as applicable, the
professional designation "Member of the Association for Investment Management
and Research," "Member of the Financial Analysts Federation," and "Member of the
Institute of Chartered Financial Analysts," and is encouraged to do so, but only
in a dignified and judicious manner. The use of the designations may be
accompanied by an accurate explanation (1) of the requirements that have been
met to obtain the designation, and (2) of the Association for Investment
Management and Research, the Financial Analysts Federation, and the Institute of
Chartered Financial Analysts, as applicable.
The Chartered Financial Analyst may use the professional designation
"Chartered Financial Analyst," or the abbreviation "CFA," and is encouraged to
do so, but only in a dignified and judicious manner. The use of the designation
may be accompanied by an accurate explanation (1) of the requirements that have
been met to obtain the designation, and (2) of the Association for Investment
Management and Research and the Institute of Chartered Financial Analysts.
IX. PROFESSIONAL MISCONDUCT
The financial analyst shall not (1) commit a criminal act that upon
conviction materially reflects adversely on his honesty, trustworthiness, or
fitness as a financial analyst in other respects, or (2) engage in conduct
involving dishonesty, fraud, deceit, or misrepresentation.
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INVESTMENT ADVISER CODE OF ETHICS CONCERNING
PERSONAL SECURITIES TRANSACTIONS SUMMARY
CRAMER ROSENTHAL MCGLYNN, LLC
(i) REVISED MAY 24, 2000
The following summary is intended to assist you in understanding what is
prohibited and what is permissible, as more fully detailed in the Code.
1. Portfolio Managers, Assistant Portfolio Managers and Access
employees where ownership would exceed 5% of the outstanding shares of the
company being traded, are PROHIBITED from purchasing or selling any security
that he/she knows has to have been purchased, sold, or considered within the
last 7 days. This rule is subject to the client portfolios that he/she oversees
as manager. You are also PROHIBITED from purchasing or selling any security
which you know is being considered for purchase or sale by any of our advised
mutual funds or clients or which you know has been considered for such action
within the last 7 days. Transactions in stocks for which the market
capitalization of the company is greater than $500 million are generally exempt
from this prohibition and may therefore be "bunched" or aggregated with orders
of the funds or client portfolios. The compliance department to ensure all
clients received best execution during the course of that trading day will
review executed bunched transactions. In the event a client received a poorer
price than an employee did during the day, the best execution will be awarded to
the client. However, "bunching" would not be permitted if the aggregate order,
including orders from "proprietary" accounts would exceed 20% of the anticipated
daily volume of the company's stock. In addition, any "proprietary" account
which uses a "directed" broker may be required to wait until 2 p.m. in order to
execute a trade requested during that day. All access employee trades that are
not bunched with clients' will not be executed until all open orders are
completed for the clients. Once completed, the access employee's trade will be
executed immediately, providing the employee is in compliance with the 7-day and
60-day rule. If a stock is not executed during the day requested, you must
resubmit your request on the following day. NON - ACCESS employees are permitted
to execute with out approval trades of 100 shares or less. However, the non-
access employee is still required to complete the standard Trade Notification
Form and the share position of the security must not exceed 499 shares, in the
aggregate. Any purchase of a security leading to a position of 500 shares would
be subject to the Access Employee rules. An Access Employee as defined is a
Principal, Officer, or individual who has the ability to make investment
decisions for clients. Transactions in shares of unaffiliated mutual funds,
government securities and money market instruments are also generally exempt.
Notwithstanding these general exemptions, the SEC has full authority to review
ALL transactions to determine whether there has been any violation of federal
securities laws.
2. You are PROHIBITED from revealing any information regarding an
actual or proposed securities trade by any of our clients except in the normal
course of your duties as CRM director, officer or employee.
3. A portfolio manager who intends to purchase a security in a mutual
fund must first disclose any interest he/she has in the security to the Chief
Investment Officer and to the officers of the mutual fund. Your interest can
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take the form of (a) ownership of any securities issued by the same issuer, (b)
a contemplated trade by you of such securities, (c) any position you hold with
the issuer or its affiliates, or (d) any present or proposed business
relationship between the issuer or its affiliates and you or any entity in which
you have a significant interest. In general, this disclosure requirement does
not apply to stocks for which the market capitalization of the company is
greater than $500 million.
4. You are PROHIBITED from purchasing any security in an IPO.
5. You are PROHIBITED from purchasing any security in a private
placement without the prior approval of CRM's Investment Compliance Committee,
and you must disclose any authorized investment in a private placement if you
play any part in a subsequent consideration of an investment in securities of
the issuer.
6. You are PROHIBITED from engaging in short-term trading (within 60
days), and will be required to disgorge any profits realized on any short-term
trade. Exceptions to this prohibition must be approved in advance by two members
of CRM's Investment Compliance Committee.
7. You are PROHIBITED from engaging in personal securities transactions
(public or private in nature) without the prior written approval of CRM's
Investment Compliance Committee.
8. This Code applies to all directors, Access Employee's and Non-Access
employees of CRM. It also covers trading by your spouse, minor children and
adult members of your household and any account where you have a direct or
indirect beneficial interest, influence or control. A new employee has a 30-day
waiver to the bunching rule on any position purchased prior to the employee's
official start date at CRM. During this period, the employee is still subject to
filling out the normal trade approval form even with this exemption. Following
this 30-day period, any restrictions to trading due to the bunching rule would
apply.
9. Certain transactions may be permitted under The Policy and
Procedures for Allocation and Aggregation of Trades of Securities, which was
implemented on June 1, 1996, and revised on January 1, 1998, and any successive
policy and procedures concerning the same ("Allocation Procedures"). Any
transactions implemented under the Allocation Procedures supersede this Code of
Ethics.
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INVESTMENT ADVISER CODE OF ETHICS
CONCERNING PERSONAL SECURITIES TRANSACTIONS
THIS CODE OF ETHICS APPLIES WITH RESPECT TO
CRAMER ROSENTHAL MCGLYNN, LLC'S ACTIVITIES AS AN
INVESTMENT ADVISER TO SEPARATELY MANAGED ACCOUNTS AND TO INVESTMENT COMPANIES.
1. PURPOSES
Rule 17j-1 under the Investment Company Act of 1940, as amended (the
"1940 Act") generally proscribes fraudulent or manipulative practices with
respect to purchases or sales of securities held or to be acquired by investment
companies, if effected by associated persons of such companies. Section 204A of
the Investment Advisers Act of 1940, as amended ("Advisers Act"), requires every
registered investment adviser to establish, maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of material,
nonpublic information by such investment adviser or any person associated with
such investment adviser.
The purpose of this Code of Ethics is to provide regulations and
procedures consistent with the 1940 Act and Rule 17j-1, designed to give effect
to the general prohibitions set forth in Rule 17j-1(a), as follows:
(a) It shall be unlawful for any affiliated person of or principal
underwriter for a registered investment company, or any affiliated person of an
investment adviser of or principal underwriter for a registered investment
company, in connection with the purchase or sale, directly or indirectly, by
such person of a security held or to be acquired, as defined in this section, by
such registered investment company --
(1) To employ any device, scheme or artifice to
defraud such registered investment company,
(2) To make to such registered investment company any
untrue statement of a material fact or omit to
state to such registered investment company a
material fact necessary in order to make the
statements made, in light of the circumstances
under which they are made, not misleading,
(3) To engage in any act, or course of business which
operates or would operate as a fraud or deceit upon
any such registered investment company, or
(4) To engage in any manipulative practice with
respect to such registered investment company.
In addition, this Code of Ethics sets forth procedures to deter the misuse of
material nonpublic information, in Appendix I hereto.
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The provisions of this Investment Adviser Code of Ethics Concerning
Personal Securities Transactions and the attached Policy Statement on Insider
Trading are in addition to and not a substitute for the Code of Ethics and The
Standards of Professional Conduct of the Institute of Chartered Financial
Analysts which shall apply to all portfolio managers, analysts and other
employees who make investment recommendations.
2. DEFINITIONS
(a) "Adviser" means Cramer Rosenthal McGlynn LLC.
(b) "Fund" means any registered investment company for which the
Adviser serves as investment adviser or sub-adviser.
(c) "Access person," means any director, officer, Principal
or Advisory person of the Advisor.
(d) "Advisory person" means (i) any employee of the Adviser
or of any company in a control relationship to the
Adviser, who, in connection with his or her regular
functions or duties, makes, participates in, or obtains
information regarding the purchase or sale or a security
by the Fund, or whose functions relate to the making of
any recommendations with respect to such purchases or
sales; and (ii) any natural person in control
relationship to the Adviser who obtains information
concerning recommendations made to the Fund with regard
to the purchase or sale of a security.
(e) A security is "being considered for purchase or sale"
when a recommendation to purchase or sell a security has
been made and communicated and, with respect to the
person making the recommendation, when such person
seriously considers making such a recommendation.
(f) "Beneficial ownership" shall be interpreted with reference to
the definition contained in the provisions of Section 16 of
the Securities Exchange Act of 1934, as amended ("Exchange
Act") and the rules and regulations thereunder, as such
provisions may be interpreted by the Securities and Exchange
Commission ("SEC"), except that the determination of direct or
indirect beneficial ownership shall apply to all securities
which an access person has or acquires.
(g) "Control" shall have the meaning set forth in Section
2(a)(9) of the 1940 Act.
(h) "Proprietary Accounts" means certain general accounts and
pension accounts of the officers and employees of
Advisers, either in their name or on their behalf.
(i) "Public Accounts" means the Funds and any outside private
accounts for which Adviser serves as investment adviser
and in which Adviser (and persons associated with
Adviser) has no ownership interest, direct or indirect
(other than as a shareholder of the Funds).
(j) "Purchase or sale of a security" includes, inter alia,
the writing of an option to purchase or sell a security.
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(k) "Security" shall have the meaning set forth in Section
2(a)(36) of the 1940 Act, except that it shall not
include shares of registered open-end investment
companies not managed by the Adviser, securities issued
or guaranteed as to principal and interest by the
Government of the United States, short term debt
securities which are "government securities" within the
meaning of Section 2(a)(16) of the 1940 Act, bankers'
acceptances, bank certificates of deposit, commercial
paper and such other money market instruments as
designated by the Board of Directors of the Adviser.
3. PROHIBITED PURCHASES AND SALES
(a) No access person shall purchase or sell, directly or
indirectly, any security in which he or she has, or by reason
of such transaction acquires, any direct or indirect
beneficial ownership and which he or she knows or should have
known: at the time of such purchase or sale
(i) is being considered for purchase or sale by the
Public Accounts, within 7 days or
(ii) is being purchased or sold by the Public Accounts within
7 days.
Transactions in stocks for which the market capitalization of
the company is greater than $500 million are generally exempt
from this prohibition and may therefore be "bunched" or
aggregated with orders of the funds or client portfolios.
However, "bunching" would not be permitted if the aggregate
order, including orders from "proprietary" accounts would
exceed 20% of the anticipated daily volume of the company's
stock. In addition, any "proprietary" account which uses a
"directed" broker may be required to wait until 2 p.m. in
order to execute a trade requested during that day. If a stock
is not executed during the day requested, you must resubmit
your request on the following day. Transactions in shares of
unaffiliated mutual funds, government securities and money
market instruments are also generally exempt. Notwithstanding
these general exemptions, the SEC has full authority to review
all transactions to determine whether there has been any
violation of federal securities laws.
(b) No access or non-access person shall reveal to any other
person (Except in the normal course of his or her duties
on behalf of the Adviser) any information regarding
securities transactions by the Public Accounts or
consideration by the Public Accounts or the Adviser of
any such securities transaction.
(c) No access or non-access person shall recommend any
securities transaction by the Public Accounts without
having disclosed his or her interest, if any, in such
securities or the issuer thereof, including without
limitation, (i) his or her direct or indirect
beneficial ownership of any securities of such
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issuer, (ii) any contemplated transaction by
such person in such securities, (iii) any
position with such issuer or its affiliates, and
(iv) any present or proposed business
relationship between such issuer or its
affiliates, on the one hand, and such person
or any party in which such person has a
significant interest, on the other; provided,
however, that in the event the interest of such
access person in such securities or issuer is
not material to his or her personal net worth
or any contemplated transaction by such
person in such securities cannot reasonably be
expected to have a material adverse effect on
any such transaction by the Public Accounts or
on the market for the securities generally,
such access person shall not be required to
disclose his or her interest in the securities
or issuer thereof in connection with any such
recommendation.
(d) No access or non-access person shall acquire any
securities in an initial public offering.
(e) No access or non-access person shall acquire any
securities in a private placement without the
prior approval of the Adviser's Investment
Compliance Committee. Any authorized investment
in a private placement must be disclosed by such
access person when he or she plays any part in a
Public Account's subsequent consideration of an
investment in securities of the issuer, and any
decision by the Fund or a portfolio manager
on behalf of the Public Accounts to purchase
securities of the issuer will be subject to an
independent review by personnel of the Adviser
with no personal interest in the issuer.
(f) No access or non-access person shall profit in the purchase
and sale, or sale and purchase, of the same (or equivalent)
securities within 60 calendar days without prior approval of
the Investment Compliance Committee. Any profits realized on
any unauthorized short-term trade should be disgorged.
(g) No access person shall purchase or sell any security
for his or her own account without obtaining the
prior written approval of the transaction by the
Investment Compliance Committee. This approval will
be acquired by filling out a trade pre-clearance form
and giving it to the compliance coordinator. He will
then check the 60 and 7-day rules for compliance
purposes. After approval of Head Trader, a member of
the Compliance Committee will then review the trade.
Then the trading desk will execute the trade.
(h) The Investment Compliance Committee shall maintain a
Restricted List containing the names of all issuers that
shall be deemed Restricted for any reason. This list
will be distributed to all employees and to the Director
of Trading on a regular basis. The securities so listed
may not be purchased and/or sold for any client or by any
employee. From time to time there may be certain
securities on the Restricted List for which the Adviser
is deemed an insider. In those cases, the firm will
operate under the
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issuer's Insider Trading Policy and rules. Further,
all such transactions may need to be pre-cleared in
writing by the issuer's counsel to the Adviser's
Investment Compliance Committee. Once approved, all
trades for the Adviser's clients, if any, are executed
prior to those of any employee.
4. EXEMPTED TRANSACTIONS
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the access
person has no direct or indirect influence or control.
(b) Purchases, which are part of an automatic dividend reinvestment,
plan.
(c) Purchases, which are part of a systematic withdrawal from a bank,
account (e.g., a monthly investment in a mutual fund.
(d) Purchase effected upon the exercise of rights issued by an issuer
pro rate to all holders of a class of its securities, to the extent such rights
were acquired from such issuer, and sales of such rights so acquired.
5. Reporting
(a) Every access and non-access person must direct his or her
broker to provide the Investment Compliance Committee with
duplicate copies of all trading statements.
(b) Every access and non access person shall report to the
Investment Compliance Committee, the information
described in Section 5(c) of this Code with respect to
transactions in any security that does not require
pre-approval by CRM's Investment Compliance Committee in
which such access person has, or by reason of such
transaction acquires, any direct or indirect beneficial
ownership in the security; provided, however, that an
access person shall not be required to make a report
with respect to transactions effected for any account
over which such person does not have any direct or
indirect influence.
(c) Every report (the Personal Securities Transaction Report)
shall be made not later than 10 calendar days after the
trade date in which the transaction to which the report
relates was effected, and shall contain the following
information:
(i) The date of the transaction, the title and the
number of shares or the par value of each security involved;
(ii) The nature of the transaction (i.e., purchase,
sale or any other type of acquisition or disposition);
(iii) The price at which the transaction was effected; and
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(d) Any such report may contain a statement that the
report shall not be construed as an admission by the
person making such report that he or she has any
direct or indirect beneficial ownership in the
security to which the report relates. A copy of the
Adviser's Securities Trading Compliance Policy is
attached hereto as Appendix II.
6. SANCTIONS
Upon discovering a violation of this Code, the Investment Compliance
Committee of the Adviser may impose such sanctions as it deems appropriate,
including, INTER ALIA, a letter of censure or suspension or termination of
the employment of the violator. All material violations of this Code and any
sanctions imposed with respect thereto shall be reported periodically to the
Board of Managers of the Company and Board of Trustees of any Fund that the
Company serves as Adviser.
7. INSIDER TRADING
The Board of Directors of the Adviser has adopted a policy statement on
insider trading and conflicts of interest (the "Policy Statement"), a
copy of which is attached hereto as Appendix I. All access persons are
required by this Code to read and familiarize themselves with their
responsibilities under the Policy Statement. All access persons shall
sign a copy of the Policy Statement, and the Investment Compliance
Committee, shall maintain a copy of each executed Policy Statement. The
adviser has implemented a Securities Trading Compliance Policy attached
hereto as Appendix II. All employees are required to comply with the
procedures outlined in this policy.
<PAGE>
POLICY STATEMENT ON INSIDER TRADING SUMMARY
The following summary is intended to assist you in understanding what is
prohibited and what is permissible, as more fully detailed in the Policy.
1. You are PROHIBITED from trading securities while in possession
of material, non-public information. You may not trade, either
personally or on behalf of others, including clients, while in
possession of such insider information, and you may not
communicate such information to others.
2. The Policy applies to all directors, access and
non-employees of CRM, and also covers trading by your
spouse, minor children and adult members of your
household.
3. Information is "material" when there is a substantial
likelihood that a reasonable investor would consider it
important in making his investment decisions. Generally,
this is information whose disclosure will have a
substantial effect on the price of a company's
securities, such as earnings results, dividend changes or
proposed mergers or acquisitions.
4. Information is "non-public" when it has not been disseminated
broadly to investors in the marketplace.
5. Before executing any trade for yourself or others,
including clients, you should determine whether you have
access to material, non-public information. If you think
you do, you should do the following:
* Report the information and proposed trade immediately to
the chief investment officer(s).
* Do not purchase or sell the securities on behalf of yourself
or others, including clients.
* Do not communicate the information to anyone other than the chief
Compliance Committee.
* After the Investment Compliance Committee has reviewed the
issue, CRM, will determine whether the information is material
and non-public and, if so, what action should be taken.
6. You should be particularly careful when you have contact with, or
obtain non-public information about, public companies.
7. You should also exercise particular caution any time you become
aware of non-public information regarding a tender offer.
APPENDIX I
<PAGE>
CRAMER ROSENTHAL MCGLYNN, LLC.
POLICY STATEMENT ON INSIDER TRADING
The following policies have been established to aid employees and other persons
associated with CRM in avoiding "insider trading". All employees and other
persons must follow these policies or risk serious sanction, including
dismissal, substantial personal liability and criminal penalties. If an employee
or other person has a question about these procedures, such person should
contact CRM's Investment Compliance Committee.
I. DESCRIPTION OF INSIDER TRADING
The term "insider trading" is not defined in the federal securities
laws, but generally is used to refer to the use of material non-public
information to trade in securities (whether or not someone is an "insider")
and to communications of material non-public information to others.
While the law concerning "insider trading" is not static, it is
generally understood that the law prohibits:
* trading by an insider while in possession of material
non-public information; or
* trading by an non-insider while in possession of material
non-public information, where the information was either disclosed to the
non-insider in violation of an insider's duty to keep it confidential or was
misappropriated; or
* communicating material non-public information to others.
The elements of "insider trading" and the penalties for such
unlawful conduct are discussed below:
A. WHO IS AN INSIDER?
The concept of "insider" is broad. It includes all
employees of a company. In addition, a person can be a "temporary insider" if
he/she enters into a special confidential relationship in the conduct of a
company's affairs and as a result is given access to information solely for
the company's purposes. A temporary insider can include, among others, a
company's attorneys, accountant, consultants, bank lending officers and the
employees of such organizations. In addition, an employee of CRM may become a
temporary insider for a company it advises or for which it performs other
services. According to the Supreme Court, the company must expect an outsider
to keep the disclosed non-public information confidential and the
relationship must at least imply such a duty before the outsider will be
considered an insider.
B. WHAT IS MATERIAL INFORMATION?
<PAGE>
Trading on inside information is not a basis for
liability unless the information is material. "Material
information" is generally defined as information for
which there is a substantial likelihood that a reasonable
investor would consider it important in making his/her
investment decisions or information that is reasonably
certain to have a substantial effect on the price of a
company's securities. Information that employees should
consider material includes but it not limited to:
dividend changes, earnings estimates, changes in
previously released earnings estimates, significant
merger or acquisition proposals or agreements, major
litigation, liquidation problems and extraordinary
management developments.
Material information does not have to
relate to a company's business. For example, in
Carpenter v. U.S. 108 U.S. 316 (1987), the Supreme Court
considered as material certain information about the
contents of a forthcoming newspaper column that was
expected to affect the market price of a security. In
that case, a reporter for THE WALL STREET JOURNAL was
found criminally liable for disclosing to others the
dates that reports on various companies would appear in
THE WALL STREET JOURNAL and whether those reports would
be favorable or not.
C. WHAT IS NON-PUBLIC INFORMATION?
Information is non-public until it has been effectively
communicated to the marketplace. One must be able to point to some fact to
show that the information is generally public. For example, information found
in a report filed with the Securities and Exchange Commission, or appearing
in Dow Jones, Reuters Economic Services, The Wall Street Journal or other
publications of general circulation would be considered public.
D. PENALTIES
Penalties for trading on or communicating material
non-public information are severe, both for individuals involved in such
unlawful conduct and their employers. A person can be subject to some or all
of the penalties below even if he/she does not personally benefit from the
violation. Penalties include:
* civil injunctions;
* treble damages;
* disgorgement of profits;
* jail sentences;
* fines for the person who committed the violation
of up to three times the profit gained or loss avoided, whether or not the
person actually benefited; and
<PAGE>
* fines for the employer or other controlling person
of up to the greater of $1,000,000 or three times the profit gained or loss
avoided.
In addition, any violations or this Policy Statement on
Insider Trading will be subject to the sanctions described in Section VI. Of
the Code.
II. IDENTIFYING INSIDE INFORMATION
Before an employee enters into a transaction in the securities of a
company about which he/she may have potential inside information, the
following questions must be resolved:
A. IS THE INFORMATION MATERIAL? Is this information that an
investor would consider important in making his/her investment decision? Is
this information that would substantially affect the market price of the
securities if generally disclosed?
B. IS THE INFORMATION NON-PUBLIC? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace by being published in REUTERS ECONOMIC SERVICES, THE WALL STREET
JOURNAL or other publications of general circulation?
If, after consideration of the above, the employee believes that the
information is material and non-public, or if he/she has any questions as to
whether the information is material and non-public, the employee must take
the following steps:
* report the matter immediately to the Investment Compliance
Committee;
* refrain from purchasing or selling the securities in a
personal securities transaction or on behalf of others,
including CRM's client accounts;
* refrain form communicating the information inside or
outside CRM, other than to the Investment Compliance
Committee; and
* after the Investment Compliance Committee has reviewed the
issue, the employee will be instructed to continue the
prohibitions against trading and communications, or will be
allowed to trade on and communicate the information.
III. RESTRICTING ACCESS TO MATERIAL NON-PUBLIC INFORMATION
Information in the possession of any employee that may be considered
identified as material and non-public may not be communicated to anyone,
including persons within CRM, except as provided in Section II.B. above. In
addition, care should
<PAGE>
be taken so that such information is secure. For example, files containing
material non-public information should be sealed and access to computer files
containing material non-public information should be restricted.
IV. RESOLVING ISSUES CONCERNING INSIDER TRADING
If, after consideration of the items set forth in Section II.B.
above, doubt remains as to whether information is material or
non-public, or if there is any unresolved question as to the
applicability or interpretation of the foregoing procedures or as
to the propriety of any action, it must be discussed with the Chief
Investment Officer(s) before trading on or communicating the
information to anyone.
<PAGE>
APPENDIX II
SECURITIES TRADING COMPLIANCE POLICY
All access employees/shareholders of Cramer Rosenthal McGlynn, LLC. ("CRM")
shall maintain accounts on CRM's system. All access employees are encouraged to
conduct all securities trades through CRM's trading department for themselves
and their immediate family [one's spouse and dependents (including parents if
the employee provides a majority of support) and any trades in which the
employee has a direct or indirect beneficial interest (such as a beneficiary of
a trust)]. All trades (whether placed through our trading desk or done
independently) shall be approved in advance, in writing, by a member of CRM's
Investment Compliance Committee using the Company's Pre-Clearance form.. In
addition, all employees must have copies of monthly statements sent directly to
CRM's Investment Compliance Committee.
All employees shall complete and execute a quarterly certificate which states
that the employee has complied with all of the securities trading policies of
CRM including making the required disclosures. A form of such certificate is
also attached.
Stock purchases and sales in corporations in which any Cramer Rosenthal McGlynn,
LLC, Officer or family member is an Officer or Director, or owns greater than a
4.9% interest are specifically restricted and must be approved in advance by two
members of CRM's Investment Compliance Committee. A list of restricted as well
as a list showing the companies in which CRM holds a 4.9% or interest or greater
are circulated periodically..
<PAGE>
SECURITIES TRADING COMPLIANCE CERTIFICATE
The undersigned employee has been provided with a copy of Cramer Rosenthal
McGlynn, LLC's Code of Ethics Concerning Personal Securities Transactions,
Policy Statement on Insider Trading and the Securities Trading Compliance Policy
and hereby acknowledges that for the quarter ended ________________, 199 , the
employee is in full compliance with such policy including but not limited to
having made all the required disclosures to the Investment Compliance Committee.
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