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Exhibit p(12)
MELLON
SECURITIES TRADING POLICY
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CONTENTS
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PAGE
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INTRODUCTION.............................................................. 1
CLASSIFICATION OF EMPLOYEES............................................... 2
-Insider Risk Employees
-Investment Employees
-Access Decision Makers
-Other Employees
-Consultants, Independent Contractors and
Temporary Employees
PERSONAL SECURITIES TRADING PRACTICES..................................... 3
SECTION ONE - APPLICABLE T INSIDER RISK EMPLOYEES.................... 3
Quick Reference - Insider Risk Employees...................... 5
Standards of Conduct for Insider Risk Employees............... 6
Restrictions on Transactions in Mellon Securities............. 9
Restrictions on Transactions in Other Securities.............. 11
Protecting Confidential Information........................... 14
SECTION TWO - APPLICABLE T INVESTMENT EMPLOYEES...................... 17
Quick Reference - Investment Employees........................ 19
Standards of Conduct for Investment Employees................. 20
Restrictions on Transactions in Mellon Securities............. 24
Restrictions on Transactions in Other Securities.............. 26
Protecting Confidential Information........................... 29
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES........................ 31
Quick Reference - Other Employees............................. 33
Standards of Conduct for Other Employees...................... 34
Restrictions on Transactions in Mellon Securities............. 35
Restrictions on Transactions in Other Securities ............. 37
Protecting Confidential Information .......................... 39
GLOSSARY Definitions................................................... 43
Exhibit A - Sample Letter to Broker........................... 49
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INTRODUCTION The Securities Trading Policy (the "Policy") is
designed to reinforce Mellon Financial
Corporation's ("Mellon's") reputation for
integrity by avoiding even the appearance of
impropriety in the conduct of Mellon's business.
The Policy sets forth procedures and limitations
which govern the personal securities transactions
of every Mellon Employee.
Mellon and its employees are subject to certain
laws and regulations governing personal securities
trading. Mellon has developed this Policy to
promote the highest standards of behavior and
ensure compliance with applicable laws.
Employees should be aware that they may be held
personally liable for any improper or illegal acts
committed during the course of their employment,
and that "ignorance of the law" is not a defense.
Employees may be subject to civil penalties such
as fines, regulatory sanctions including
suspensions, as well as criminal penalties.
Employees outside the United States are also
subject to applicable laws of foreign
jurisdictions, which may differ substantially from
US law and which may subject such employees to
additional requirements. Such employees must
comply with applicable requirements of pertinent
foreign laws as well as with the provisions of the
Policy. To the extent foreign law, employees
should consult the General Counsel or the Manager
of Corporate Compliance.
Any provision of this Policy may be waived or
exempted at the discretion of the Manager of
Corporate Compliance. Any such waiver or exemption
will be evidenced in writing and maintained in the
Audit and Risk Review Department.
Employees must read the Policy and must comply
with it. Failure to comply with the provisions of
the Policy may result in the imposition of serious
sanctions, including but not limited to
disgorgement of profits, dismissal, substantial
personal liability and referral to law enforcement
agencies or other regulatory agencies. Employees
should retain the Policy in their records for
future reference. Any questions regarding the
Policy should be referred to the Manager of
Corporate Compliance or his/her designee.
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CLASSIFICATION OF EMPLOYEES The Policy is applicable to all
employees of Mellon and all of its subsidiaries
which are more than 50% owned by Mellon. This
includes all full-time, part-time, benefited and
non-benefited, exempt and non-exempt, domestic and
international employees. It does not include
consultants and contract or temporary employees,
nor employees of subsidiaries which are 50% or
less owned by Mellon. Although the Policy
provisions generally have worldwide applicability,
some sections of the Policy may conflict with the
laws or customs of the countries in which Mellon
operations are located. The Policy may be amended
for operations outside the United States only with
the approval of the Manager of Corporate
Compliance.
Employees are engaged in a wide variety of
activities for Mellon. In light of the nature of
their activities and the impact of federal and
state laws and the regulations thereunder, the
Policy imposes different requirements and
limitations on employees based on the nature of
their activities for Mellon. To assist employees
in complying with the requirements and limitations
imposed on them in light of their activities,
employees are classified into one of four
categories: Insider Risk Employee, Investment
Employee, Access Decision Maker and Other
Employee. Appropriate requirements and limitations
are specified in the Policy based upon an
employee's classification.
Business line management, in conjunction with the
Manager of Corporate Compliance, will determine
the classification of each employee based on the
following guidelines. Employees should confirm
their classification with their Preclearance
Compliance Officer or the Manager of Corporate
Compliance.
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INSIDER RISK EMPLOYEE You are considered to be an Insider Risk Employee
if, in the normal conduct of your Mellon
responsibilities, you are likely to receive or be
perceived to possess or receive, material
nonpublic information concerning Mellon's
commercial credit or corporate finance customers.
This will typically include certain employees in
the credit, lending and leasing businesses,
certain members of the Audit and Risk Review, and
Legal Departments, and all members of the Senior
Management Committee who are not Investment
Employees.
INVESTMENT EMPLOYEE You are considered to be an Investment Employee
if, in the normal conduct of your Mellon
responsibilities, you are likely to receive or be
perceived to possess or receive, material
nonpublic information concerning Mellon's trading
in securities for Mellon's account or for the
accounts of others, and/or if you provide
investment advice. This will typically include:
- certain employees in fiduciary securities
sales and trading, investment management and
advisory services, investment research and
various trust or fiduciary functions;
- an employee of a Mellon entity registered
under the Investment Advisers Act of 1940 who
is also an "Access Person" as defined by Rule
17j-1 of the Investment Company Act of 1940
(see glossary); and
- any member of Mellon's Senior Management
Committee who, as part of his/her usual
duties, has management responsibility for
fiduciary activities or routinely has access
to information about customers' securities
transactions.
ACCESS DECISION MAKER (ADM) A person designated as such by the Investment
Ethics Committee. Generally, this will be
portfolio managers and research analysts who make
recommendations or decisions regarding the
purchase or sale of equity, convertible debt, and
non-investment grade debt securities for mutual
funds and other managed accounts. See further
details in the Access Decision Maker edition of
the Policy.
OTHER EMPLOYEE You are considered to be an Other Employee if you
are an employee of Mellon Financial Corporation or
any of its direct or indirect subsidiaries who is
not an Insider Risk Employee, Investment Employee,
or an ADM.
CONSULTANTS, INDEPENDENT Managers should inform consultants, independent
CONTRACTORS AND TEMPORARY contractors and temporary employees of the general
EMPLOYEES provisions of the Policy (such as the prohibition
on trading while in possession of material
nonpublic information), but generally they will
not be required to preclear trades or report their
personal securities holdings. If one of these
persons would be considered an Insider Risk
Employee, Investment Employee or Access Decision
Maker if the person were a Mellon employee, the
person's manager should advise the Manager of
Corporate Compliance who will determine whether
such individual should be subject to the
preclearance and reporting requirements of the
Policy.
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PERSONAL SECURITIES TRADING PRACTICES
SECTION ONE - APPLICABLE TO INSIDER RISK EMPLOYEES
3
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CONTENTS
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PAGE
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PERSONAL SECURITIES TRADING PRACTICES
SECTION ONE - APPLICABLE TO INSIDER RISK EMPLOYEES
Quick Reference - Insider Risk Employees.................. 5
Standards of Conduct for Insider Risk Employees........... 6
--Conflict of Interest................................ 6
--Material Nonpublic Information...................... 6
--Brokers............................................. 6
--Personal Securities Transaction Reports............. 6
--Preclearance for Personal Securities Transactions... 6
--Exemptions from Requirement to Preclear............. 7
--Gifting of Securities............................... 8
--DRIPs, DPPs and AIPs................................ 8
--Restricted List..................................... 8
--Confidential Treatment.............................. 9
Restrictions on Transactions in Mellon Securities......... 9
--Mellon 401(k) Plan.................................. 10
--Mellon Employee Stock Options....................... 11
Restrictions on Transactions in Other Securities.......... 11
--Prohibition on Investments in Securities of
Financial Services Organizations.................... 12
Beneficial Ownership...................................... 13
Non-Mellon Employee Benefit Plans......................... 13
Protecting Confidential Information....................... 13
--Insider Trading and Tipping......................... 14
--The "Chinese Wall".................................. 15
GLOSSARY Definitions............................................... 43
Exhibit A - Sample Letter to Broker ...................... 49
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QUICK REFERENCE - INSIDER RISK EMPLOYEES
SOME THINGS YOU MUST DO 1. DUPLICATE STATEMENTS & CONFIRMATIONS - Instruct
your broker, trust account manager or other entity
through which you have a securities trading
account to send directly to MANAGER OF CORPORATE
COMPLIANCE, MELLON BANK, PO BOX 3130, PITTSBURGH,
PA 15230-3130:
- Trade confirmations summarizing each
transaction
- Periodic statements
Exhibit B of this Policy can be used to notify
your broker.
This applies to all accounts in which you have a
beneficial interest. (See Glossary)
2. PRECLEARANCE - Before initiating a securities
transaction, written preclearance must be
obtained from the Manager of Corporate
Compliance. This can be done by completing a
Preclearance Request Form and:
- delivering the request to the Manager of
Corporate Compliance, AIM 151-4340,
- faxing the request to (412) 234-1516, or
- contacting the Manager of Corporate
Compliance for other available notification
options.
Preclearance Request Forms can be obtained from
Corporate Compliance (412) 234-1661. If
preclearance approval is received the trade must
be executed before the end of the 3rd business
day (with the date of approval being the 1st
business day), at which time the preclearance
approval will expire.
3. SPECIAL APPROVALS
- Acquisition of securities in a Private Placement
must be precleared by the employee's
Department/Entity head and the Manager of
Corporate Compliance.
- Acquisition of securities through an allocation
by the underwriter of an Initial Public Offering
(IPO) is prohibited without the approval of the
Manager of Corporate Compliance. Approval can be
given only when the allocation is the result of
a direct family relationship.
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SOME THINGS YOU MUST NOT MELLON SECURITIES - The following transactions in
DO Mellon securities are prohibited for all Mellon
Employees:
- Short sales
- Purchasing and selling or selling and
purchasing within 60 days
- Purchasing or selling during a blackout
period
- Margin purchases or options other than
employee options.
NON-MELLON SECURITIES - New investments in financial
services organizations are prohibited for CERTAIN
EMPLOYEES ONLY - see page 12.
OTHER RESTRICTIONS are detailed throughout
Section One. READ THE POLICY!
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EXEMPTIONS Preclearance is NOT required for:
- Purchases or sales of municipal bonds,
non-financial commodities (such as agricultural
futures, metals, oil, gas, etc.), currency
futures, financial futures, index futures index
securities, securities issued by investment
companies, commercial paper; CDs; bankers'
acceptances; repurchase agreements; and direct
obligations of the government of the United
States.
- Transactions in any account over which the
employee has no direct or indirect control over
the investment decision making process.
- Transactions that are non-volitional on the
part of an employee (such as stock
dividends).
- Changes in elections under Mellon's 401(k)
Retirement Savings Plan.
- An exercise of an employee stock option
administered by Human Resources.
- Automatic reinvestment of dividends under a
DRIP or Automatic Investment Plan. (Optional
cash purchases under a DRIP or Direct
Purchase Plan do require preclearance.)
- Sales of securities pursuant to tender offers
and sales or exercises of "Rights".(see page
8).
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QUESTIONS? (412) 234-1661
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This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF CONDUCT FOR Because of their particular responsibilities, Insider
INSIDER RISK EMPLOYEES Risk Employees are subject to preclearance and
personal securities reporting requirements, as
discussed below.
Every Insider Risk Employee must follow these
procedures or risk serious sanctions, including
dismissal. If you have any questions about these
procedures you should consult the Manager of
Corporate Compliance. Interpretive issues that arise
under these procedures shall be decided by, and are
subject to the discretion of, the Manager of
Corporate Compliance.
CONFLICT OF INTEREST No employee may engage in or recommend any securities
transaction that places, or appears to place, his or
her own interests above those of any customer to whom
financial services are rendered, including mutual
funds and managed accounts, or above the interests of
Mellon.
MATERIAL NONPUBLIC No employee may engage in or recommend a securities
INFORMATION transaction, for his or her own benefit or for the
benefit of others, including Mellon or its customers,
while in possession of material nonpublic information
regarding such securities. No employee may
communicate material nonpublic information to others
unless it is properly within his or her job
responsibilities to do so.
BROKERS Trading Accounts - All Insider Risk Employees are
encouraged to conduct their personal investing
through a Mellon affiliate brokerage account. This
will assist in the monitoring of account activity on
an ongoing basis in order to ensure compliance with
the Policy.
PERSONAL SECURITIES Trading Accounts - All Insider Risk Employees are
TRANSACTIONS REPORTS required to instruct their broker, trust account
manager or other entity through which they have a
securities trading account to submit directly to the
Manager of Corporate Compliance copies of all trade
confirmations and statements relating to each account
of which they are a beneficial owner regardless of
what, if any, securities are maintained in such
accounts. Thus, for example, even if the brokerage
account contains only mutual funds or other exempt
securities as that term is defined by the Policy and
the account has the capability to have reportable
securities traded in it, the Insider Risk Employee
maintaining such an account must arrange for
duplicate account statements and trade confirmations
to be sent by the broker to the Manager of Corporate
Compliance. An example of an instruction letter to a
broker is contained in Exhibit A.
PRECLEARANCE FOR All Insider Risk Employees must notify the Manager of
PERSONAL SECURITIES Corporate Compliance in writing and receive
TRANSACTIONS preclearance before they engage in any purchase or
sale of a security. Insider Risk Employees should
refer to the provisions under "Beneficial Ownership"
below, which are applicable to these provisions.
All requests for preclearance for a securities
transaction shall be submitted by completing a
Preclearance Request Form which can be obtained from
the Manager of Corporate Compliance.
The Manager of Corporate Compliance will notify the
Insider Risk Employee whether the request is approved
or denied, without disclosing the reason for such
approval or denial.
Notifications may be given in writing or verbally by
the Manager of Corporate Compliance to the Insider
Risk Employee. A record of such notification will be
maintained by the Manager of Corporate Compliance.
However, it shall be the responsibility of the
Insider Risk Employee to obtain a written record of
the Manager of Corporate Compliance's notification
within 24 hours of such notification. The Insider
Risk Employee should retain a copy of this written
record.
As there could be many reasons for preclearance being
granted or denied, Insider Risk Employees should not
infer from the preclearance response anything
regarding the security for which preclearance was
requested.
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Although making a preclearance request does not
obligate an Insider Risk Employee to do the
transaction, it should be noted that:
- preclearance requests should not be made for a
transaction that the Insider Risk Employee does
not intend to make.
- preclearance authorization will expire at the
end of the third business day after it is
received. The day authorization is granted is
considered the first business day.
- Insider Risk Employees should not discuss with
anyone else, inside or outside Mellon, the
response they received to a preclearance
request. If the Insider Risk Employee is
preclearing as beneficial owner of another's
account, the response may be disclosed to the
other owner.
- Good Until Canceled/Stop Loss Orders ("Limit
Orders") must be precleared, and security
transactions receiving preclearance
authorization must be executed before the
preclearance expires. At the end of the
three-day preclearance authorization period, any
unexecuted Limit Order must be canceled or a new
preclearance authorization must be obtained.
EXEMPTIONS FROM Preclearance by Insider Risk Employees is not
REQUIREMENT TO PRECLEAR required for the following transactions:
- Purchases or sales of Exempt Securities (direct
obligations of the government of the United
States; high quality short-term debt
instruments; bankers' acceptances; CDs;
commercial paper; repurchase agreements; and
securities issued by open-end investment
companies);
- Purchases or sales of municipal bonds,
closed-end mutual funds; non-financial
commodities (such as agricultural futures,
metals, oil, gas, etc.), currency futures,
financial futures, index futures and index
securities;
- Purchases or sales effected in any account over
which an employee has no direct or indirect
control over the investment decision making
process (e.g., discretionary trading accounts).
Discretionary trading accounts may only be
exempted from preclearance procedures, when the
Manager of Corporate Compliance, after a
thorough review, is satisfied that the account
is truly discretionary;
- Transactions that are non-volitional on the part
of an employee (such as stock dividends);
- The sale of Mellon stock received upon the
exercise of an employee stock option if the sale
is part of a "netting of shares" or "cashless
exercise" administered by the Human Resources
Department (for which the Human Resources
Department will forward information to the
Manager of Corporate Compliance);
- Changes to elections in the Mellon 401(k) plan;
- Purchases effected upon the exercise of rights
issued by an issuer pro rata to all holders of a
class of securities, to the extent such rights
were acquired from such issuer;
- Sales of rights acquired from an issuer, as
described above; and/or
- Sales effected pursuant to a bona fide tender
offer.
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GIFTING OF SECURITIES Insider Risk Employees desiring to make a bona fide
gift of securities or who receive a bona fide gift,
including an inheritance, of securities do not need
to preclear the transaction. However, Insider Risk
Employees must report such bona fide gifts to the
Manager of Corporate Compliance. The report must be
made within 10 days of making or receiving the gift
and must disclose the following information: the name
of the person receiving (giving) the gift, the date
of the transaction, and the name of the broker
through which the transaction was effected. A bona
fide gift is one where the donor does not receive
anything of monetary value in return. An Insider Risk
Employee who purchases a security with the intention
of making a gift must preclear the purchase
transaction.
DRIPS, DPPS AND AIPS Certain companies with publicly traded securities
establish:
- Dividend Reinvestment Plans (DRIPs) - These
permit shareholders to have their dividend
payments channeled to the purchase of additional
shares of such company's stock. An additional
benefit offered to DRIP participants is the
right to buy additional shares by sending in a
check before the dividend reinvestment date
("optional cash purchases").
- Direct Purchase Plans (DPPs) - These allow
purchasers to buy stock by sending a check
directly to the issuer, without using a broker.
- Automatic Investment Plans (AIPs) - These allow
purchasers to set up a plan whereby a fixed
amount of money is automatically deducted from
their checking account each month and used to
purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
Insider Risk Employees who enroll in a DRIP or AIP
are not required to preclear enrollment, the periodic
reinvestment of dividend payments into additional
shares of company stock through a DRIP, or the
periodic investments through an AIP.
Insider Risk Employees must preclear all optional
cash purchases through a DRIP and all purchases
through a DPP. Insider Risk Employees must also
preclear all sales through a DRIP, DPP or AIP.
RESTRICTED LIST The Manager of Corporate Compliance will maintain a
list (the "Restricted List") of companies whose
securities are deemed appropriate for implementation
of trading restrictions for Insider Risk Employees.
The Restricted List will not be distributed outside
of the office of Corporate Compliance. From time to
time, such trading restrictions may be appropriate to
protect Mellon and its Insider Risk Employees from
potential violations, or the appearance of
violations, of securities laws. The inclusion of a
company on the Restricted List provides no indication
of the advisability of an investment in the company's
securities or the existence of material nonpublic
information on the company. Nevertheless, the
contents of the Restricted List will be treated as
confidential information to avoid unwarranted
inferences.
To assist the Manager of Corporate Compliance in
identifying companies that may be appropriate for
inclusion on the Restricted List, the
department/entity heads in which Insider Risk
Employees are employed are required to inform the
Manager of Corporate Compliance in writing of any
companies they believe should be included on the
Restricted List, based upon facts known or readily
available to such department heads. Although the
reasons for inclusion on the Restricted List may
vary, they could typically include the following:
- Mellon is involved as a lender, investor or
adviser in a merger, acquisition or financial
restructuring involving the company;
- Mellon is involved as a selling shareholder in
a public distribution of the company's
securities;
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- Mellon is involved as an agent in the
distribution of the company's securities;
- Mellon has received material nonpublic
information on the company;
- Mellon is considering the exercise of
significant creditors' rights against the
company; or
- The company is a Mellon borrower in Credit
Recovery.
Department heads of sections in which Insider Risk
Employees are employed are also responsible for
notifying the Manager of Corporate Compliance in
writing of any change in circumstances making it
appropriate to remove a company from the Restricted
List.
The Manager of Corporate Compliance will retain
copies of the restricted lists for five years.
CONFIDENTIAL TREATMENT The Manager of Corporate Compliance will use his or
her best efforts to assure that all requests for
preclearance, all personal securities transaction
reports and all reports of securities holdings are
treated as "Personal and Confidential." However, such
documents will be available for inspection by
appropriate regulatory agencies and by other parties
within and outside Mellon as are necessary to
evaluate compliance with or sanctions under this
Policy.
-------------------------- -----------------------------------------------------
RESTRICTIONS ON Employees who engage in transactions involving Mellon
TRANSACTIONS IN MELLON securities should be aware of their unique
SECURITIES responsibilities with respect to such transactions
arising from the employment relationship and should
be sensitive to even the appearance of impropriety.
The following restrictions apply to all transactions
in Mellon's publicly traded securities occurring in
the employee's own account and in all other accounts
over which the employee could be presumed to exercise
influence or control (see provisions under
"Beneficial Ownership" below for a more complete
discussion of the accounts to which these
restrictions apply). These restrictions are to be
followed in addition to any restrictions that apply
to particular officers or directors (such as
restrictions under Section 16 of the Securities
Exchange Act of 1934).
- Short Sales - Short sales of Mellon securities
by employees are prohibited.
- Short Term Trading - Employees are prohibited
from purchasing and selling, or from selling and
purchasing, Mellon securities within any 60
calendar day period.
- Margin Transactions - Purchases on margin of
Mellon's publicly traded securities by employees
is prohibited. Margining Mellon securities in
connection with a cashless exercise of an
employee stock option through the Human
Resources Department is exempt from this
restriction. Further, Mellon securities may be
used to collateralize loans or the acquisition
of securities other than those issued by Mellon.
- Option Transactions - Option transactions
involving Mellon's publicly traded securities
are prohibited. Transactions under Mellon's
Long-Term Incentive Plan or other employee
option plans are exempt from this restriction.
- Major Mellon Events - Employees who have
knowledge of major Mellon events that have not
yet been announced are prohibited from buying or
selling Mellon's publicly traded securities
before such public announcements, even if the
employee believes the event does not constitute
material nonpublic information.
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- Mellon Blackout Period - Employees are
prohibited from buying or selling Mellon's
publicly traded securities during a blackout
period. The blackout period begins the 16th day
of the last month of each calendar quarter and
ends 3 business days after Mellon Financial
Corporation publicly announces the financial
results for that quarter. Thus, the blackout
periods begin on March 16, June 16, September 16
and December 16. The end of the blackout period
is determined by counting business days only,
and the day of the earnings announcement is day
1. The blackout period ends at the end of day 3,
and employees can trade Mellon securities on day
4.
MELLON 401(k) PLAN For purposes of the blackout period and the short
term trading rule, employees' changing their existing
account balance allocation to increase or decrease
the amount allocated to Mellon Common Stock will be
treated as a purchase or sale of Mellon Stock,
respectively. This means:
- Employees are prohibited from increasing or
decreasing their existing account balance
allocation to Mellon Common Stock during the
blackout period.
- Employees are prohibited from increasing their
existing account balance allocation to Mellon
Common Stock and then decreasing it within 60
days. Similarly, employees are prohibited from
decreasing their existing account balance
allocation to Mellon Common Stock and then
increasing it within 60 days. However, changes
to existing account balance allocations in the
401(k) plan will not be compared to transactions
in Mellon securities outside the 401(k) for
purposes of the 60-day rule. (Note: this does
not apply to members of the Executive Management
Group, who should consult with the Legal
Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for
example:
- Employees are not required to preclear any
elections or changes made in their 401(k)
account.
- There is no restriction on employees' changing
their salary deferral contribution percentages
with regard to either the blackout period or the
60-day rule.
- The regular salary deferral contribution to
Mellon Common Stock in the 401(k) that takes
place with each pay will not be considered a
purchase for the purposes of either the blackout
or the 60-day rule.
MELLON EMPLOYEE STOCK Receipt - Your receipt of an employee stock option
OPTIONS from Mellon is not deemed to be a purchase of a
security. Therefore, it is exempt from preclearance
and reporting requirements, can take place during the
blackout period and does not constitute a purchase
for purposes of the 60-day prohibition.
Exercises - The exercise of an employee stock option
that results in your holding the shares is exempt
from preclearance and reporting requirements, can
take place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
"Cashless" Exercises - The exercise of an employee
stock option which is part of a "cashless exercise"
or "netting of shares" that is administered by the
Human Resources Department or Chase Mellon
Shareholder Services is exempt from the preclearance
and reporting requirements and will not constitute a
purchase or a sale for purposes of the 60-day
prohibition. A "cashless exercise" or "netting of
shares" transaction is permitted during the blackout
period for ShareSuccess plan options only. They are
not permitted during the blackout period for any
other plan options.
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Sales - The sale of the Mellon securities that were
received in the exercise of an employee stock option
is treated like any other sale under the Policy
(regardless of how little time has elapsed between
the option exercise and the sale). Thus, such sales
are subject to the preclearance and reporting
requirements, are prohibited during the blackout
period and constitute sales for purposes of the
60-day prohibition.
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RESTRICTIONS ON Purchases or sales by an employee of the securities
TRANSACTIONS IN of issuers with which Mellon does business, or other
SECURITIES third party issuers, could result in liability on the
OTHER part of such employee. Employees should be sensitive
to even the appearance of impropriety in connection
with their personal securities transactions.
Employees should refer to "Beneficial Ownership"
below, which is applicable to the following
restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that do
business with Mellon. Employees should refer to the
Code of Conduct and comply with such restrictions in
addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
- Credit, Consulting or Advisory Relationship -
Employees may not buy or sell securities of a
company if they are considering granting,
renewing, modifying or denying any credit
facility to that company, acting as a benefits
consultant to that company, or acting as an
adviser to that company with respect to the
company's own securities. In addition, lending
employees who have assigned responsibilities in
a specific industry group are not permitted to
trade securities in that industry. This
prohibition does not apply to transactions in
open end mutual funds.
- Customer Transactions - Trading for customers
and Mellon accounts should always take
precedence over employees' transactions for
their own or related accounts.
- Excessive Trading, Naked Options - Mellon
discourages all employees from engaging in
short-term or speculative trading, in trading
naked options, in trading that could be deemed
excessive or in trading that could interfere
with an employee's job responsibilities.
- Front Running - Employees may not engage in
"front running," that is, the purchase or sale
of securities for their own accounts on the
basis of their knowledge of Mellon's trading
positions or plans.
- Initial Public Offerings - Insider Risk
Employees are prohibited from acquiring
securities through an allocation by the
underwriter of an Initial Public Offering (IPO)
without the approval of the Manager of Corporate
Compliance. Approval can be given only when the
allocation comes through an employee of the
issuer who is a direct family relation of the
Insider Risk Employee. Due to NASD rules, this
approval may not be available to employees of
registered broker/dealers.
- Material Nonpublic Information - Employees
possessing material nonpublic information
regarding any issuer of securities must refrain
from purchasing or selling securities of that
issuer until the information becomes public or
is no longer considered material.
11
<PAGE> 14
- Private Placements - Insider Risk Employees are
prohibited from acquiring any security in a
private placement unless they obtain the prior
written approval of the Manager of Corporate
Compliance and the employee's department head.
Approval must be given by both persons for the
acquisition to be considered approved. After
receipt of the necessary approvals and the
acquisition, employees are required to disclose
that investment if they participate in any
subsequent consideration of credit for the
issuer, or of an investment in the issuer for an
advised account. Final decision to acquire such
securities for an advised account will be
subject to independent review.
- Scalping - Employees may not engage in
"scalping," that is, the purchase or sale of
securities for their own or Mellon's accounts on
the basis of knowledge of customers' trading
positions or plans.
- Short Term Trading - All Employees are
discouraged from purchasing and selling, or from
selling and purchasing, the same (or equivalent)
securities within any 60 calendar day period.
PROHIBITION ON You are prohibited from acquiring any security issued
INVESTMENTS IN SECURITIES by a financial services organization if you are:
OF FINANCIAL
SERVICES ORGANIZATIONS - a member of the Mellon Senior Management
Committee.
- employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
- an employee specifically designated by the
Manager of Corporate Compliance and informed
that this prohibition is applicable to you.
Financial Services Organizations - The term "security
issued by a financial services organization" includes
any security issued by:
- Commercial Banks other than Mellon
- Bank Holding Companies other than Mellon
- Insurance Companies
- Investment Advisory Companies
- Shareholder Servicing Companies
- Thrifts
- Savings and Loan Associations
- Broker/Dealers
- Transfer Agents
- Other Depository Institutions
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by
mutual funds, variable annuities or insurance
policies. Further, for purposes of determining
whether a company is a financial services
organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services
organizations properly acquired before the employee's
becoming subject to this prohibition may be
maintained or disposed of at the owner's discretion
consistent with this policy.
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<PAGE> 15
Additional securities of a financial services
organization acquired through the reinvestment of the
dividends paid by such financial services
organization through a dividend reinvestment program
(DRIP), or through an automatic investment plan (AIP)
are not subject to this prohibition, provided the
employee's election to participate in the DRIP or AIP
predates the date of the employee's becoming subject
to this prohibition. Optional cash purchases through
a DRIP or direct purchase plan (DPP) are subject to
this prohibition.
Securities acquired in any account over which an
employee has no direct or indirect control over the
investment decision making process (e.g.,
discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of financial
services organizations must be disclosed in writing
to the Manager of Corporate Compliance.
BENEFICIAL OWNERSHIP The provisions of the Policy apply to transactions in
the employee's own name and to all other accounts
over which the employee could be presumed to exercise
influence or control, including:
- accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
- accounts of any other member of the
employee's household (e.g., a relative
living in the same home);
- trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or influence;
- corporate accounts controlled, directly or
indirectly, by the employee;
- arrangements similar to trust accounts that
are established for bona fide financial
purposes and benefit the employee; and
- any other account for which the employee is
the beneficial owner (see Glossary for a
more complete legal definition of
"beneficial owner").
NON-MELLON EMPLOYEE The provisions discussed above do not apply to
BENEFIT PLANS transactions done under a bona fide employee benefit
plan administered by an organization not affiliated
with Mellon and by an employee of that organization
who shares beneficial interest with a Mellon
employee, and in the securities of the employing
organization. This means if a Mellon employee's
spouse is employed at a non-Mellon company, the
Mellon employee is not required to obtain approval
for transactions in the employer's securities done by
the spouse as part of the spouse's employee benefit
plan.
The Securities Trading Policy does not apply in such
a situation. Rather, the other organization is relied
upon to provide adequate supervision with respect to
conflicts of interest and compliance with securities
laws.
-------------------------- -----------------------------------------------------
PROTECTING CONFIDENTIAL As an employee you may receive information about
INFORMATION Mellon, its customers and other parties that, for
various reasons, should be treated as confidential.
All employees are expected to strictly comply with
measures necessary to preserve the confidentiality of
information. Employees should refer to the Mellon
Code of Conduct.
INSIDER TRADING AND Federal securities laws generally prohibit the
TIPPING trading of securities while in possession of
"material nonpublic" information regarding the issuer
of those securities (insider trading).
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<PAGE> 16
LEGAL PROHIBITIONS Any person who passes along material nonpublic
information upon which a trade is based (tipping) may
also be liable.
Information is "material" if there is a substantial
likelihood that a reasonable investor would consider
it important in deciding whether to buy, sell or hold
securities. Obviously, information that would affect
the market price of a security would be material.
Examples of information that might be material
include:
- a proposal or agreement for a merger,
acquisition or divestiture, or for the sale
or purchase of substantial assets;
- tender offers, which are often material for
the party making the tender offer as well as
for the issuer of the securities for which
the tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity
problems;
- defaults under agreements or actions by
creditors, customers or suppliers relating
to a company's credit standing;
- earnings and other financial information,
such as large or unusual write-offs,
write-downs, profits or losses;
- pending discoveries or developments, such as
new products, sources of materials, patents,
processes, inventions or discoveries of
mineral deposits;
- a proposal or agreement concerning a
financial restructuring;
- a proposal to issue or redeem securities, or
a development with respect to a pending
issuance or redemption of securities;
- a significant expansion or contraction of
operations;
- information about major contracts or
increases or decreases in orders;
- the institution of, or a development in,
litigation or a regulatory proceeding;
- developments regarding a company's senior
management;
- information about a company received from a
director of that company; and
- information regarding a company's possible
noncompliance with environmental protection
laws.
This list is not exhaustive. All relevant
circumstances must be considered when determining
whether an item of information is material.
"Nonpublic" - Information about a company is
nonpublic if it is not generally available to the
investing public. Information received under
circumstances indicating that it is not yet in
general circulation and which may be attributable,
directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic
information.
14
<PAGE> 17
If you obtain material non-public information you may
not trade related securities until you can refer to
some public source to show that the information is
generally available (that is, available from sources
other than inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in widely
accessible sources--such as in newspapers or on the
internet--becomes public very soon after publication,
information appearing in less accessible
sources--such as regulatory filings, may take up to
several days to be deemed public. Similarly, highly
complex information might take longer to become
public than would information that is easily
understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information
about a company--whether that company is Mellon,
another Mellon entity, a Mellon customer or supplier,
or other company--may not trade in that company's
securities, either for their own accounts or for any
account over which they exercise investment
discretion. In addition, employees may not recommend
trading in those securities and may not pass the
information along to others, except to employees who
need to know the information in order to perform
their job responsibilities with Mellon. These
prohibitions remain in effect until the information
has become public.
Employees who have investment responsibilities should
take appropriate steps to avoid receiving material
nonpublic information. Receiving such information
could create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants and
temporary employees who have access to the types of
confidential information described in this Policy are
responsible for ensuring that consultants and
temporary employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on material
nonpublic information, or specific information that
might be subject to it, should be referred to the
General Counsel.
RESTRICTIONS ON THE FLOW As a diversified financial services organization,
OF INFORMATION WITHIN Mellon faces unique challenges in complying with the
MELLON(THE "CHINESE WALL) prohibitions on insider trading and tipping of
material non-public information, and misuse of
confidential information. This is because one Mellon
unit might have material nonpublic information about
a company while other Mellon units may have a desire,
or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or
sales to customers. To engage in such broad-ranging
financial services activities without violating laws
or breaching Mellon's fiduciary duties, Mellon has
established a "Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the Mellon
units or individuals that are likely to receive
material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that
either trade in securities--for Mellon's account or
for the accounts of others--or provide investment
advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall. have a desire, or
even a fiduciary duty, to buy or sell that company's
securities or recommend such purchases or sales to
customers. To engage in such broad-ranging financial
services activities without violating laws or
breaching Mellon's fiduciary duties, Mellon has
established a "Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the Mellon
units or individuals that are likely to receive
material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that
either trade in securities--for Mellon's account or
for the accounts of others--or provide investment
advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
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<PAGE> 18
PERSONAL SECURITIES TRADING PRACTICES
SECTION TWO - APPLICABLE TO INVESTMENT EMPLOYEES
16
<PAGE> 19
CONTENTS
--------
PAGE
----
PERSONAL SECURITIES TRADING PRACTICES
SECTION TWO - APPLICABLE TO INVESTMENT EMPLOYEES
Quick Reference - Investment Employees ..................... 19
Standards of Conduct for Investment Employees .............. 20
--Conflict of Interest ................................ 20
--Material Nonpublic Information ...................... 20
--Brokers ............................................. 20
--Personal Securities Transaction Reports ............. 20
--Preclearance for Personal Securities Transactions ... 21
--Blackout Policy ..................................... 22
--Exemptions from Requirement to Preclear ............. 22
--Gifting of Securities ............................... 22
--DRIPs, DPPs and AIPs ................................ 23
--Statement of Securities Accounts and Holdings ....... 23
--Restricted List ..................................... 24
--Confidential Treatment .............................. 24
Restrictions on Transactions in Mellon Securities .......... 24
--Mellon 401(k) Plan .................................. 25
--Mellon Employee Stock Options ....................... 26
Restrictions on Transactions in Other Securities ........... 26
--Prohibition on Investments in Securities of
Financial Services Organizations .................... 27
Beneficial Ownership ....................................... 28
Non-Mellon Employee Benefit Plans .......................... 28
Protecting Confidential Information ........................ 29
--Insider Trading and Tipping ......................... 29
--The "Chinese Wall" .................................. 30
Special Procedures for Access Decision Makers .............. 30
GLOSSARY Definitions................................................. 43
Exhibit A - Sample Letter to Broker ........................ 49
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<PAGE> 20
QUICK REFERENCE - INVESTMENT EMPLOYEES
------------------------ -------------------------------------------------------
SOME THINGS YOU MUST DO 1. STATEMENT OF ACCOUNTS AND HOLDINGS - Provide to
your Preclearance Compliance Officer a statement
of all securities accounts and holdings within 10
days of becoming an Investment Employee, and
again annually on request.
2. DUPLICATE STATEMENTS & CONFIRMATIONS - Instruct
your broker, trust account manager or other
entity through which you have a securities
trading account to send directly to Compliance:
- Trade confirmations summarizing each
transaction
- Periodic statements
Exhibit A can be used to notify your broker.
Contact your designated Preclearance Compliance
Officer for the correct address. This applies to
all accounts in which you have a beneficial
interest.
3. Preclearance - Before initiating a securities
transaction, written preclearance must be
obtained from the designated Preclearance
Compliance Officer. This can be accomplished by
completing a Preclearance Request Form and:
- delivering or faxing the request to the
designated Preclearance Compliance Officer, or
- contacting the designated Preclearance
Compliance Officer for other available
notification options.
Preclearance Request Forms can be obtained from
the designated Preclearance Compliance Officer.
If preclearance approval is received the trade
must be communicated to the broker on the same
day, and executed before the end of the next
business day, at which time the preclearance
approval will expire.
4. Special Approvals
- Acquisition of securities in a Private
Placement must be precleared by the
employee's Department/Entity head, the
Manager of Corporate Compliance and the
designated Preclearance Compliance
Officer.
- Acquisition of securities through an
allocation by the underwriter of an
Initial Public Offering (IPO) is
prohibited without the approval of the
Manager of Corporate Compliance.
Approval can be given only when the
allocation is the result of a direct
family relationship.
-
------------------------ ------------------------------------------------------
SOME THINGS YOU MUST MELLON SECURITIES - The following transactions in
NOT DO Mellon securities are prohibited for all Mellon
Employees:
- Short sales
- Purchasing and selling or selling and
purchasing within 60 days
- Purchasing or selling during a
blackout period
- Margin purchases or options other than
employee options.
NON-MELLON SECURITIES
- Purchasing and selling or selling and
purchasing within 60 days is discouraged,
and any profits must be disgorged.
- New investments in financial services
organizations are prohibited for CERTAIN
EMPLOYEES ONLY - see page 27.
OTHER RESTRICTIONS are detailed throughout Section Two.
READ THE POLICY!
------------------------ -------------------------------------------------------
EXEMPTIONS Preclearance is NOT required for:
- Purchases or sales of high quality
short-term debt instruments, non-financial
commodities (such as agricultural futures,
metals, oil, gas, etc.), currency futures,
financial futures, index futures, index
securities, open-end mutual funds,
non-affiliated closed-end investment
companies, commercial paper; CDs; bankers'
acceptances; repurchase agreements; and
direct obligations of the government of the
United States.)
- Transactions in any account over which the
employee has no direct or indirect control
over the investment decision making process.
- Transactions that are non-volitional on the
part of an employee (such as stock
dividends).
- Changes in elections under Mellon's 401(k)
Retirement Savings Plan.
- An exercise of an employee stock option
administered by Human Resources.
- Automatic reinvestment of dividends under a
DRIP or Automatic Investment Plan. (Optional
cash purchases under a DRIP or Direct
Purchase Plan do require preclearance.
Sales of securities pursuant to tender offers and
sales or exercises of "Rights".(see page 22).
------------------------ -------------------------------------------------------
QUESTIONS? Contact your designated Preclearance Compliance
Officer. If you don't know who that is,
call 412-234-1661
------------------------ -------------------------------------------------------
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
18
<PAGE> 21
-------------------------- ----------------------------------------------------
STANDARDS OF CONDUCT Because of their particular responsibilities,
FOR INVESTMENT Investment Employees are subject to preclearance and
EMPLOYEES personal securities reporting requirements, as
discussed below.
Every Investment Employee must follow these
procedures or risk serious sanctions, including
dismissal. If you have any questions about these
procedures you should consult the Manager of
Corporate Compliance. Interpretive issues that arise
under these procedures shall be decided by, and are
subject to the discretion of, the Manager of
Corporate Compliance.
CONFLICT OF INTEREST No employee may engage in or recommend any securities
transaction that places, or appears to place, his or
her own interests above those of any customer to whom
financial services are rendered, including mutual
funds and managed accounts, or above the interests of
Mellon.
MATERIAL NONPUBLIC No employee may divulge the current portfolio
INFORMATION positions, or current or anticipated portfolio
transactions, programs or studies, of Mellon or any
Mellon customer to anyone unless it is properly
within his or her job responsibilities to do so.
No employee may engage in or recommend a securities
transaction, for his or her own benefit or for the
benefit of others, including Mellon or its customers,
while in possession of material nonpublic information
regarding such securities. No employee may
communicate material nonpublic information to others
unless it is properly within his or her job
responsibilities to do so.
BROKERS Trading Accounts - All Investment Employees are
encouraged to conduct their personal investing
through a Mellon affiliate brokerage account. This
will assist in the monitoring of account activity on
an ongoing basis in order to ensure compliance with
the Policy.
PERSONAL SECURITIES Statements & Confirmations - All Investment Employees
TRANSACTIONS REPORTS are required to instruct their broker, trust account
manager or other entity through which they have a
securities trading account to submit directly to the
Manager of Corporate Compliance or designated
Preclearance Compliance Officer copies of all trade
confirmations and statements relating to each account
of which they are a beneficial owner regardless of
what, if any, securities are maintained in such
accounts. Thus, for example, even if the brokerage
account contains only mutual funds or other exempt
securities as that term is defined by the Policy and
the account has the capability to have reportable
securities traded in it, the Investment Employee
maintaining such an account must arrange for
duplicate account statements and trade confirmations
to be sent by the broker to the Manager of Corporate
Compliance or designated Preclearance Compliance
Officer. Exhibit A is an example of an instruction
letter to a broker.
Other securities transactions which were not
completed through a brokerage account, such as gifts,
inheritances, spin-offs from securities held outside
brokerage accounts, or other transfers must be
reported to the designated Preclearance Compliance
Officer within 10 days.
19
<PAGE> 22
PRECLEARANCE FOR All Investment Employees must notify the designated
PERSONAL SECURITIES Preclearance Compliance Officer in writing and
TRANSACTIONS receive preclearance before they engage in any
purchase or sale of a security for their own
accounts. Investment Employees should refer to the
provisions under "Beneficial Ownership" below,
which are applicable to these provisions.
All requests for preclearance for a securities
transaction shall be submitted by completing a
Preclearance Request Form which can be obtained from
the designated Preclearance Compliance Officer.
The designated Preclearance Compliance Officer will
notify the Investment Employee whether the request is
approved or denied, without disclosing the reason for
such approval or denial.
Notifications may be given in writing or verbally by
the designated Preclearance Compliance Officer to the
Investment Employee. A record of such notification
will be maintained by the designated Preclearance
Compliance Officer. However, it shall be the
responsibility of the Investment Employee to obtain a
written record of the designated Preclearance
Compliance Officer's notification within 48 hours of
such notification. The Investment Employee should
retain a copy of this written record.
As there could be many reasons for preclearance being
granted or denied, Investment Employees should not
infer from the preclearance response anything
regarding the security for which preclearance was
requested.
Although making a preclearance request does not
obligate an Investment Employee to do the
transaction, it should be noted that:
- Preclearance requests should not be made for
a transaction that the Investment Employee
does not intend to make.
- The order for a transaction must be placed
with the broker on the same day that
preclearance authorization is received. The
broker must execute the trade close of
business on the next business day, at which
time the preclearance authorization will
expire.
- Investment Employees should not discuss with
anyone else, inside or outside Mellon, the
response they received to a preclearance
request. If the Investment Employee is
preclearing as beneficial owner of another's
account, the response may be disclosed to
the other owner.
- Good Until Canceled/Stop Loss Orders ("Limit
Orders") must be precleared, and security
transactions receiving preclearance
authorization must be executed before the
preclearance expires. At the end of the
preclearance authorization period, any
unexecuted Limit Order must be canceled or a
new preclearance authorization must be
obtained.
BLACKOUT POLICY Except as described below, Investment Employees will
not generally be given clearance to execute a
transaction in any security that is on the restricted
list maintained by their Preclearance Compliance
Officer, or for which there is a pending buy or sell
order for an affiliated account. This provision does
not apply to transactions effected or contemplated by
index funds.
Exceptions - Regardless of any restrictions above,
Investment Employees will generally be given
clearance to execute the following transactions:
- Purchase or sale of up to $50,000 of
securities of the top 200 issuers on the
Russell list of largest publicly traded
companies.
- Purchase or sale of up to the greater of 100
shares or $10,000 of securities ranked 201
to 500 on the Russell list of largest
publicly traded companies.
The Investment Employee is limited to two such trades
in the securities of any one issuer in any calendar
month.
20
<PAGE> 23
EXEMPTIONS FROM Preclearance is not required for the following
REQUIREMENT TO PRECLEAR transactions:
- Purchases or sales of Exempt Securities
(direct obligations of the government of the
United States; high quality short-term debt
instruments; bankers' acceptances; CDs;
commercial paper; repurchase agreements; and
securities issued by open-end investment
companies);
- Purchases or sales of non-affiliated
closed-end investment companies;
non-financial commodities (such as
agricultural futures, metals, oil, gas,
etc.), currency futures, financial futures,
index futures and index securities;
- Purchases or sales effected in any account
over which an employee has no direct or
indirect control over the investment
decision making process (e.g., discretionary
trading accounts). Discretionary trading
accounts may only be maintained, without
being subject to preclearance procedures,
when the Manager of Corporate Compliance,
after a thorough review, is satisfied that
the account is truly discretionary;
- Transactions that are non-volitional on the
part of an employee (such as stock
dividends);
- The sale of Mellon stock received upon the
exercise of an employee stock option if the
sale is part of a "netting of shares" or
"cashless exercise" administered by the
Human Resources Department (for which the
Human Resources Department will forward
information to the Manager of Corporate
Compliance);
- Changes to elections in the Mellon 401(k)
plan;
- Purchases effected upon the exercise of
rights issued by an issuer pro rata to all
holders of a class of securities, to the
extent such rights were acquired from such
issuer;
- Sales of rights acquired from an issuer, as
described above; and/or
- Sales effected pursuant to a bona fide
tender offer.
GIFTING OF SECURITIES Investment Employees desiring to make a bona fide
gift of securities or who receive a bona fide gift of
securities do not need to preclear the transaction.
However, Investment Employees must report such bona
fide gifts to the Manager of Corporate Compliance.
The report must be made within 10 days of making or
receiving the gift and must disclose the following
information: the name of the person receiving
(giving) the gift, the date of the transaction, and
the name of the broker through which the transaction
was effected. A bona fide gift is one where the donor
does not receive anything of monetary value in
return. An Investment Employee who purchases a
security with the intention of making a gift must
preclear the purchase transaction.
21
<PAGE> 24
DRIPs, DPPs and AIPs Certain companies with publicly traded securities
establish:
- Dividend Reinvestment Plans (DRIPs) - These
permit shareholders to have their dividend
payments channeled to the purchase of
additional shares of such company's stock.
An additional benefit offered to DRIP
participants is the right to buy additional
shares by sending in a check before the
dividend reinvestment date ("optional cash
purchases").
- Direct Purchase Plans (DPPs) - These allow
purchasers to buy stock by sending a check
directly to the issuer, without using a
broker.
- Automatic Investment Plans (AIPs) - These
allow purchasers to set up a plan whereby a
fixed amount of money is automatically
deducted from their checking account each
month and used to purchase stock directly
from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
Investment Employees who enroll in a DRIP or AIP are
not required to preclear enrollment, the periodic
reinvestment of dividend payments into additional
shares of company stock through a DRIP, or the
periodic investments through an AIP.
Investment Employees must preclear all optional cash
purchases through a DRIP and all purchases through a
DPP. Investment Employees must also preclear all
sales through a DRIP, DPP or AIP.
STATEMENT OF SECURITIES Within ten days of receiving this Policy and on an
ACCOUNTS AND HOLDINGS annual basis thereafter, all Investment Employees
must submit to the Manager of Corporate Compliance:
- a listing of all securities trading accounts
in which the employee has a beneficial
interest.
- a statement of all securities in which they
presently have any direct or indirect
beneficial ownership other than Exempt
Securities, as defined in the Glossary.
The annual report must be completed upon the request
of Corporate Compliance, and the information
submitted must be current within 30 days of the date
the report is submitted. The annual statement of
securities holdings contains an acknowledgment that
the Investment Employee has read and complied with
this Policy.
22
<PAGE> 25
RESTRICTED LIST Each Preclearance Compliance Officer will maintain a
list (the "Restricted List") of companies whose
securities are deemed appropriate for implementation
of trading restrictions for Investment Employees in
their area. From time to time, such trading
restrictions may be appropriate to protect Mellon and
its Investment Employees from potential violations,
or the appearance of violations, of securities laws.
The inclusion of a company on the Restricted List
provides no indication of the advisability of an
investment in the company's securities or the
existence of material nonpublic information on the
company. Nevertheless, the contents of the Restricted
List will be treated as confidential information in
order to avoid unwarranted inferences.
The Preclearance Compliance Officer will retain
copies of the restricted lists for five years.
CONFIDENTIAL TREATMENT The Manager of Corporate Compliance and/or
Preclearance Compliance Officer will use his or her
best efforts to assure that all requests for
preclearance, all personal securities transaction
reports and all reports of securities holdings are
treated as "Personal and Confidential." However, such
documents will be available for inspection by
appropriate regulatory agencies, and by other parties
within and outside Mellon as are necessary to
evaluate compliance with or sanctions under this
Policy. Documents received from Investment Employees
are also available for inspection by the boards of
directors of 40-Act entities and by the boards of
directors (or trustees or managing general partners,
as applicable) of the investment companies managed or
administered by 40-Act entities.
-------------------------- -----------------------------------------------------
RESTRICTIONS ON Investment Employees who engage in transactions
TRANSACTIONS IN MELLON involving Mellon securities should be aware of their
SECURITIES unique responsibilities with respect to such
transactions arising from the employment relationship
and should be sensitive to even the appearance of
impropriety.
The following restrictions apply to all transactions
in Mellon's publicly traded securities occurring in
the employee's own account and in all other accounts
over which the employee could be presumed to exercise
influence or control (see provisions under
"Beneficial Ownership" below for a more complete
discussion of the accounts to which these
restrictions apply). These restrictions are to be
followed in addition to any restrictions that apply
to particular officers or directors (such as
restrictions under Section 16 of the Securities
Exchange Act of 1934).
- Short Sales - Short sales of Mellon
securities by employees are prohibited.
- Short Term Trading - Investment Employees
are prohibited from purchasing and selling,
or from selling and purchasing Mellon
securities within any 60 calendar day
period. In addition to any other sanction,
any profits realized on such short term
trades must be disgorged in accordance with
procedures established by senior management.
- Margin Transactions - Purchases on margin of
Mellon's publicly traded securities by
employees is prohibited. Margining Mellon
securities in connection with a cashless
exercise of an employee stock option through
the Human Resources Department is exempt
from this restriction. Further, Mellon
securities may be used to collateralize
loans or the acquisition of securities other
than those issued by Mellon.
- Option Transactions - Option transactions
involving Mellon's publicly traded
securities are prohibited. Transactions
under Mellon's Long-Term Incentive Plan or
other employee option plans are exempt from
this restriction.
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<PAGE> 26
- Major Mellon Events - Employees who have
knowledge of major Mellon events that have
not yet been announced are prohibited from
buying or selling Mellon's publicly traded
securities before such public announcements,
even if the employee believes the event does
not constitute material nonpublic
information.
- Mellon Blackout Period - Employees are
prohibited from buying or selling Mellon's
publicly traded securities during a blackout
period. The blackout period begins the 16th
day of the last month of each calendar
quarter and ends 3 business days after
Mellon Financial Corporation publicly
announces the financial results for that
quarter. Thus, the blackout periods begin on
March 16, June 16, September 16 and December
16. The end of the blackout period is
determined by counting business days only,
and the day of the earnings announcement is
day 1. The blackout period ends at the end
of day 3, and employees can trade Mellon
securities on day 4.
MELLON 401(k) PLAN For purposes of the blackout period and the short
term trading rule, employees' changing their existing
account balance allocation to increase or decrease
the amount allocated to Mellon Common Stock will be
treated as a purchase or sale of Mellon Stock,
respectively. This means:
- Employees are prohibited from increasing or
decreasing their existing account balance
allocation to Mellon Common Stock during the
blackout period.
- Employees are prohibited from increasing
their existing account balance allocation to
Mellon Common Stock and then decreasing it
within 60 days. Similarly, employees are
prohibited from decreasing their existing
account balance allocation to Mellon Common
Stock and then increasing it within 60 days.
However:
- with respect to Investment
Employees, any profits realized on
short term changes in the 401(k)
will not have to be disgorged.
- changes to existing account balance
allocations in the 401(k) plan will
not be compared to transactions in
Mellon securities outside the
401(k) for purposes of the 60-day
rule. (Note: this does not apply to
members of the Executive Management
Group, who should consult with the
Legal Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for
example:
- Employees are not required to preclear any
elections or changes made in their 401(k)
account.
- There is no restriction on employees'
changing their salary deferral contribution
percentages with regard to either the
blackout period or the 60-day rule.
- The regular salary deferral contribution to
Mellon Common Stock in the 401(k) that takes
place with each pay will not be considered a
purchase for the purposes of either the
blackout or the 60-day rule.
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<PAGE> 27
MELLON EMPLOYEE STOCK Receipt - Your receipt of an employee stock option
OPTIONS from Mellon is not deemed to be a purchase of a
security. Therefore, it is exempt from preclearance
and reporting requirements, can take place during the
blackout period and does not constitute a purchase
for purposes of the 60-day prohibition.
Exercises - The exercise of an employee stock option
that results in your holding the shares is exempt
from preclearance and reporting requirements, can
take place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
"Cashless" Exercises - The exercise of an employee
stock option which is part of a "cashless exercise"
or "netting of shares" that is administered by the
Human Resources Department or Chase Mellon
Shareholder Services is exempt from the preclearance
and reporting requirements and will not constitute a
purchase or a sale for purposes of the 60-day
prohibition. A "cashless exercise" or "netting of
shares" transaction is permitted during the blackout
period for ShareSuccess plan options only. They are
not permitted during the blackout period for any
other plan options.
Sales - The sale of the Mellon securities that were
received in the exercise of an employee stock option
is treated like any other sale under the Policy
(regardless of how little time has elapsed between
the option exercise and the sale). Thus, such sales
are subject to the preclearance and reporting
requirements, are prohibited during the blackout
period and constitute sales for purposes of the
60-day prohibition.
-------------------------- -----------------------------------------------------
RESTRICTIONS ON Purchases or sales by an employee of the securities
TRANSACTIONS IN OTHER of issuers with which Mellon does business, or other
SECURITIES third party issuers, could result in liability on the
part of such employee. Employees should be sensitive
to even the appearance of impropriety in connection
with their personal securities transactions.
Employees should refer to "Beneficial Ownership"
below, which is applicable to the following
restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that do
business with Mellon. Employees should refer to the
Code of Conduct and comply with such restrictions in
addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
- Customer Transactions - Trading for
customers and Mellon accounts should always
take precedence over employees' transactions
for their own or related accounts.
- Excessive Trading, Naked Options - Mellon
discourages all employees from engaging in
short-term or speculative trading, in
trading naked options, in trading that could
be deemed excessive or in trading that could
interfere with an employee's job
responsibilities.
- Front Running - Employees may not engage in
"front running," that is, the purchase or
sale of securities for their own accounts on
the basis of their knowledge of Mellon's
trading positions or plans.
- Initial Public Offerings - Investment
Employees are prohibited from acquiring
securities through an allocation by the
underwriter of an Initial Public Offering
(IPO) without the approval of the Manager of
Corporate Compliance. Approval can be given
only when the allocation comes through an
employee of the issuer who is a direct
family relation of the Investment Employee.
Due to NASD rules, this approval may not be
available to employees of registered
broker/dealers.
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<PAGE> 28
- Material Nonpublic Information - Employees
possessing material nonpublic information
regarding any issuer of securities must
refrain from purchasing or selling
securities of that issuer until the
information becomes public or is no longer
considered material.
- Private Placements - Investment Employees
are prohibited from acquiring any security
in a private placement unless they obtain
the prior written approval of the Manager of
Corporate Compliance, the designated
Preclearance Compliance Officer and the
Investment Employee's department head.
Approval must be given by all three persons
for the acquisition to be considered
approved. After receipt of the necessary
approvals and the acquisition, Investment
Employees are required to disclose that
investment if they participate in any
subsequent consideration of credit for the
issuer, or of an investment in the issuer
for an advised account. Final decision to
acquire such securities for an advised
account will be subject to independent
review.
- Scalping - Employees may not engage in
"scalping," that is, the purchase or sale of
securities for their own or Mellon's
accounts on the basis of knowledge of
customers' trading positions or plans.
- Short Term Trading - All Employees are
discouraged from purchasing and selling, or
from selling and purchasing, the same (or
equivalent) securities within any 60
calendar day period. With respect to
Investment Employees, any profits realized
on such short term trades must be disgorged
in accordance with procedures established by
senior management. Exception: securities may
be sold pursuant to a bona fide tender offer
without disgorgement under the 60-day rule.
PROHIBITION ON You are prohibited from acquiring any security issued
INVESTMENTS IN by a financial services organization if you are:
SECURITIES OF
FINANCIAL - a member of the Mellon Senior Management
SERVICES ORGANIZATIONS Committee.
- Employed in any of the following
departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
- an employee specifically designated by the
Manager of Corporate Compliance and informed
that this prohibition is applicable to you.
Financial Services Organizations - The term "security
issued by a financial services organization" includes
any security issued by:
- Commercial Banks other than Mellon
- Bank Holding Companies other than Mellon
- Insurance Companies
- Investment Advisory Companies
- Shareholder Servicing Companies
- Thrifts
- Savings and Loan Associations
- Broker/Dealers
- Transfer Agents
- Other Depository Institutions
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by
mutual funds, variable annuities or insurance
policies. Further, for purposes of determining
whether a company is a financial services
organization, subsidiaries and parent companies are
treated as separate issuers.
26
<PAGE> 29
Effective Date - Securities of financial services
organizations properly acquired before the employee's
becoming subject to this prohibition may be
maintained or disposed of at the owner's discretion
consistent with this policy.
Additional securities of a financial services
organization acquired through the reinvestment of the
dividends paid by such financial services
organization through a dividend reinvestment program
(DRIP), or through an automatic investment plan (AIP)
are not subject to this prohibition, provided the
employee's election to participate in the DRIP or AIP
predates the date of the employee's becoming subject
to this prohibition. Optional cash purchases through
a DRIP or direct purchase plan (DPP) are subject to
this prohibition.
Securities acquired in any account over which an
employee has no direct or indirect control over the
investment decision making process (e.g.
discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of financial
services organizations must be disclosed in writing
to the Manager of Corporate Compliance.
BENEFICIAL OWNERSHIP The provisions of the Policy apply to transactions in
the employee's own name and to all other accounts
over which the employee could be presumed to exercise
influence or control, including:
- accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
- accounts of any other member of the
employee's household (e.g., a relative
living in the same home);
- trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or influence;
- corporate accounts controlled, directly or
indirectly, by the employee;
- arrangements similar to trust accounts that
are established for bona fide financial
purposes and benefit the employee; and
- any other account for which the employee is
the beneficial owner (see Glossary for a
more complete legal definition of
"beneficial owner").
NON-MELLON EMPLOYEE The provisions discussed above do not apply to
BENEFIT PLANS transactions done under a bona fide employee benefit
plan administered by an organization not affiliated
with Mellon and by an employee of that organization
who shares beneficial interest with a Mellon
employee, and in the securities of the employing
organization. This means if a Mellon employee's
spouse is employed at a non-Mellon company, the
Mellon employee is not required to obtain approval
for transactions in the employer's securities done by
the spouse as part of the spouse's employee benefit
plan.
The Securities Trading Policy does not apply in such
a situation. Rather, the other organization is relied
upon to provide adequate supervision with respect to
conflicts of interest and compliance with securities
laws.
-------------------------- -----------------------------------------------------
PROTECTING CONFIDENTIAL As an employee you may receive information about
INFORMATION Mellon, its customers and other parties that, for
various reasons, should be treated as confidential.
All employees are expected to strictly comply with
measures necessary to preserve the confidentiality of
information. Employees should refer to the Mellon
Code of Conduct.
INSIDER TRADING AND Federal securities laws generally prohibit the
TIPPING trading of securities while in possession of
"material nonpublic" information regarding the issuer
of those securities (insider trading).
27
<PAGE> 30
LEGAL PROHIBITIONS Any person who passes along material nonpublic
information upon which a trade is based (tipping) may
also be liable.
Information is "material" if there is a substantial
likelihood that a reasonable investor would consider
it important in deciding whether to buy, sell or hold
securities. Obviously, information that would affect
the market price of a security would be material.
Examples of information that might be material
include:
- a proposal or agreement for a merger,
acquisition or divestiture, or for the sale
or purchase of substantial assets;
- tender offers, which are often material for
the party making the tender offer as well as
for the issuer of the securities for which
the tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity
problems;
- defaults under agreements or actions by
creditors, customers or suppliers relating
to a company's credit standing;
- earnings and other financial information,
such as large or unusual write-offs,
write-downs, profits or losses;
- pending discoveries or developments, such as
new products, sources of materials, patents,
processes, inventions or discoveries of
mineral deposits;
- a proposal or agreement concerning a
financial restructuring;
- a proposal to issue or redeem securities, or
a development with respect to a pending
issuance or redemption of securities;
- a significant expansion or contraction of
operations;
- information about major contracts or
increases or decreases in orders;
- the institution of, or a development in,
litigation or a regulatory proceeding;
- developments regarding a company's senior
management;
- information about a company received from a
director of that company; and
- information regarding a company's possible
noncompliance with environmental protection
laws.
This list is not exhaustive. All relevant
circumstances must be considered when determining
whether an item of information is material.
"Nonpublic" - Information about a company is
nonpublic if it is not generally available to the
investing public. Information received under
circumstances indicating that it is not yet in
general circulation and which may be attributable,
directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic
information.
28
<PAGE> 31
If you obtain material non-public information you may
not trade related securities until you can refer to
some public source to show that the information is
generally available (that is, available from sources
other than inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in widely
accessible sources--such as in newspapers or on the
internet--becomes public very soon after publication,
information appearing in less accessible
sources--such as regulatory filings, may take up to
several days to be deemed public. Similarly, highly
complex information might take longer to become
public than would information that is easily
understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information
about a company--whether that company is Mellon,
another Mellon entity, a Mellon customer or supplier,
or other company--may not trade in that company's
securities, either for their own accounts or for any
account over which they exercise investment
discretion. In addition, employees may not recommend
trading in those securities and may not pass the
information along to others, except to employees who
need to know the information in order to perform
their job responsibilities with Mellon. These
prohibitions remain in effect until the information
has become public.
Employees who have investment responsibilities should
take appropriate steps to avoid receiving material
nonpublic information. Receiving such information
could create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants and
temporary employees who have access to the types of
confidential information described in this Policy are
responsible for ensuring that consultants and
temporary employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on material
nonpublic information, or specific information that
might be subject to it, should be referred to the
General Counsel.
RESTRICTIONS ON THE FLOW
OF INFORMATION WITHIN
MELLON
(THE "CHINESE WALL") As a diversified financial services organization,
Mellon faces unique challenges in complying with the
prohibitions on insider trading and tipping of
material non-public information, and misuse of
confidential information. This is because one Mellon
unit might have material nonpublic information about
a company while other Mellon units may have a desire,
or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or
sales to customers. To engage in such broad-ranging
financial services activities without violating laws
or breaching Mellon's fiduciary duties, Mellon has
established a "Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the Mellon
units or individuals that are likely to receive
material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that
either trade in securities--for Mellon's account or
for the accounts of others--or provide investment
advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
-------------------------- -----------------------------------------------------
SPECIAL PROCEDURES FOR Certain Portfolio Managers and Research Analysts in
ACCESS DECISION MAKERS the fiduciary businesses have been designated as
Access Decision Makers and are subject to additional
procedures which are discussed in a separate edition
of the Securities Trading Policy. If you have reason
to believe that you may be an Access Decision Maker,
contact your supervisor, designated Preclearance
Compliance Officer or the Manager of Corporate
Compliance.
29
<PAGE> 32
PERSONAL SECURITIES TRADING PRACTICES
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES
30
<PAGE> 33
CONTENTS
--------
PAGE
----
PERSONAL SECURITIES TRADING PRACTICES
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES
Quick Reference - Other Employees ............................ 33
Standards of Conduct ......................................... 34
--Conflict of Interest ................................... 34
--Material Nonpublic Information ......................... 34
--Brokers ................................................ 34
--Personal Securities Transaction Reports ................ 34
--Brokerage Account Statements ........................... 34
--Confidential Treatment ................................. 34
Restrictions on Transactions in Mellon Securities ............ 35
--Mellon 401(k) Plan ..................................... 36
--Mellon Employee Stock Options .......................... 36
Restrictions on Transactions in Other Securities ............. 37
--Prohibition on Investments in Securities of Financial
Services Organizations.................................. 38
Beneficial Ownership ......................................... 39
Non-Mellon Employee Benefit Plans ............................ 39
Protecting Confidential Information .......................... 39
--Insider Trading and Tipping ............................ 39
--The "Chinese Wall" ..................................... 41
GLOSSARY Definitions .................................................. 43
Exhibit A - Sample Letter to Broker .......................... 49
31
<PAGE> 34
QUICK REFERENCE - OTHER EMPLOYEES
-------------------------- -----------------------------------------------------
SOME THINGS YOU MUST DO - If you buy or sell MELLON FINANCIAL
CORPORATION SECURITIES you must provide a
report of the trade and a copy of the broker
confirmation within 10 days of transaction
to the Manager of Corporate Compliance, AIM
151-4340. This does not apply to the
exercise of employee stock options, or
changes in elections under Mellon's 401(k)
Retirement Savings Plan.
- If you want to purchase any security in a
PRIVATE PLACEMENT you must first obtain the
approval of your Department/Entity head and
the Manager of Corporate Compliance. Contact
the Manager of Corporate Compliance at
412-234-0810.
- Acquisition of securities through an
allocation by the underwriter of an INITIAL
PUBLIC OFFERING (IPO) is prohibited without
the approval of the Manager of Corporate
Compliance. Approval can be given only when
the allocation is the result of a direct
family relationship.
- For Employees who are subject to the
prohibition on new investments in financial
services organizations (certain employees
only - see page 38), broker must send
directly to MANAGER OF CORPORATE COMPLIANCE,
MELLON BANK, PO BOX 3130, PITTSBURGH, PA
15230-3130:
- Broker trade confirmations
summarizing each transaction
- Periodic statements
Exhibit A can be used to notify your broker
of all accounts for which your broker will
be responsible for sending duplicate
confirmations and statements.
SOME THINGS YOU MUST NOT MELLON SECURITIES - The following transactions in
DO Mellon securities are prohibited for all Mellon
employees:
- Short sales
- Purchasing and selling or selling and
purchasing within 60 days
- Purchasing or selling during a blackout
period
- Margin purchases or options other than
employee options.
NON-MELLON SECURITIES
- New investments in financial services
organizations (certain employees only - see
page 38.)
OTHER RESTRICTIONS are detailed throughout Section
Three. READ THE POLICY!
QUESTIONS? (412) 234-1661
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
32
<PAGE> 35
STANDARDS OF CONDUCT FOR Every Other Employee must follow these procedures or
OTHER EMPLOYEES risk serious sanctions, including dismissal. If you
have any questions about these procedures you should
consult the Manager of Corporate Compliance.
Interpretive issues that arise under these procedures
shall be decided by, and are subject to the
discretion of, the Manager of Corporate Compliance.
CONFLICT OF INTEREST No employee may engage in or recommend any securities
transaction that places, or appears to place, his or
her own interests above those of any customer to whom
financial services are rendered, including mutual
funds and managed accounts, or above the interests of
Mellon.
MATERIAL NONPUBLIC No employee may engage in or recommend a securities
INFORMATION transaction, for his or her own benefit or for the
benefit of others, including Mellon or its customers,
while in possession of material nonpublic information
regarding such securities. No employee may
communicate material nonpublic information to others
unless it is properly within his or her job
responsibilities to do so.
BROKERS Trading Accounts - All employees are encouraged to
conduct their personal investing through a Mellon
affiliate brokerage account.
PERSONAL SECURITIES Other Employees must report in writing to the Manager
TRANSACTIONS REPORTS of Corporate Compliance within ten calendar days
whenever they purchase or sell Mellon securities.
Purchases and sales include optional cash purchases
under Mellon's Dividend Reinvestment and Common Stock
Purchase Plan (the "Mellon DRIP").
It should be noted that the reinvestment of dividends
under the DRIP, changes in elections under Mellon's
401(k) Retirement Savings Plan, the receipt of stock
under Mellon's Restricted Stock Award Plan, and the
receipt or exercise of options under Mellon's
employee stock option plans are not considered
purchases or sales for the purpose of this reporting
requirement.
BROKERAGE ACCOUNT Certain Other Employees are subject to the
STATEMENTS restriction on investments in financial services
organizations and are required to instruct their
brokers to send statements directly to Corporate
Compliance. See page 38.
An example of an instruction letter to a broker is
contained in Exhibit A.
CONFIDENTIAL TREATMENT The Manager of Corporate Compliance will use his or
her best efforts to assure that all personal
securities transaction reports and all reports of
securities holdings are treated as "Personal and
Confidential." However, such documents will be
available for inspection by appropriate regulatory
agencies and by other parties within and outside
Mellon as are necessary to evaluate compliance with
or sanctions under this Policy.
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<PAGE> 36
RESTRICTIONS ON Employees who engage in transactions involving Mellon
TRANSACTIONS IN MELLON securities should be aware of their unique
SECURITIES responsibilities with respect to such transactions
arising from the employment relationship and should
be sensitive to even the appearance of impropriety.
The following restrictions apply to all transactions
in Mellon's publicly traded securities occurring in
the employee's own account and in all other accounts
over which the employee could be expected to exercise
influence or control (see provisions under
"Beneficial Ownership" below for a more complete
discussion of the accounts to which these
restrictions apply). These restrictions are to be
followed in addition to any restrictions that apply
to particular officers or directors (such as
restrictions under Section 16 of the Securities
Exchange Act of 1934).
- Short Sales - Short sales of Mellon
securities by employees are prohibited.
- Short Term Trading - Employees are
prohibited from purchasing and selling, or
from selling and purchasing Mellon
securities within any 60 calendar day
period.
- Margin Transactions - Purchases on margin of
Mellon's publicly traded securities by
employees is prohibited. Margining Mellon
securities in connection with a cashless
exercise of an employee stock option through
the Human Resources Department is exempt
from this restriction. Further, Mellon
securities may be used to collateralize
loans or the acquisition of securities other
than those issued by Mellon.
- Option Transactions - Option transactions
involving Mellon's publicly traded
securities are prohibited. Transactions
under Mellon's Long-Term Incentive Plan or
other employee option plans are exempt from
this restriction.
- Major Mellon Events - Employees who have
knowledge of major Mellon events that have
not yet been announced are prohibited from
buying or selling Mellon's publicly traded
securities before such public announcements,
even if the employee believes the event does
not constitute material nonpublic
information.
- Mellon Blackout Period - Employees are
prohibited from buying or selling Mellon's
publicly traded securities during a blackout
period. The blackout period begins the 16th
day of the last month of each calendar
quarter and ends 3 business days after
Mellon Financial Corporation publicly
announces the financial results for that
quarter. Thus, the blackout periods begin on
March 16, June 16, September 16 and December
16. The end of the blackout period is
determined by counting business days only,
and the day of the earnings announcement is
day 1. The blackout period ends at the end
of day 3, and employees can trade Mellon
securities on day 4.
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<PAGE> 37
MELLON 401(K) PLAN For purposes of the blackout period and the short
term trading rule, employees' changing their existing
account balance allocation to increase or decrease
the amount allocated to Mellon Common Stock will be
treated as a purchase or sale of Mellon Stock,
respectively. This means:
- Employees are prohibited from increasing or
decreasing their existing account balance
allocation to Mellon Common Stock during the
blackout period.
- Employees are prohibited from increasing
their existing account balance allocation to
Mellon Common Stock and then decreasing it
within 60 days. Similarly, employees are
prohibited from decreasing their existing
account balance allocation to Mellon Common
Stock and then increasing it within 60 days.
However, changes to existing account balance
allocations in the 401(k) plan will not be
compared to transactions in Mellon
securities outside the 401(k) for purposes
of the 60-day rule. (Note: this does not
apply to members of the Executive Management
Group, who should consult with the Legal
Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for
example:
- There is no restriction on employees'
changing their salary deferral contribution
percentages with regard to either the
blackout period or the 60-day rule.
- The regular salary deferral contribution to
Mellon Common Stock in the 401(k) that takes
place with each pay will not be considered a
purchase for the purposes of either the
blackout or the 60-day rule.
MELLON EMPLOYEE STOCK Receipt - Your receipt of an employee stock option
OPTIONS from Mellon is not deemed to be a purchase of a
security. Therefore, it is exempt from reporting
requirements, can take place during the blackout
period and does not constitute a purchase for
purposes of the 60-day prohibition.
Exercises - The exercise of an employee stock option
that results in your holding the shares is exempt
from reporting requirements, can take place during
the blackout period and does not constitute a
purchase for purposes of the 60-day prohibition.
"Cashless" Exercises - The exercise of an employee
stock option which is part of a "cashless exercise"
or "netting of shares" that is administered by the
Human Resources Department or Chase Mellon
Shareholder Services is exempt from the preclearance
and reporting requirements and will not constitute a
purchase or a sale for purposes of the 60-day
prohibition. A "cashless exercise" or "netting of
shares" transaction is permitted during the blackout
period for ShareSuccess plan options only. They are
not permitted during the blackout period for any
other plan options.
Sales - The sale of the Mellon securities that were
received in the exercise of an employee stock option
is treated like any other sale under the Policy
(regardless of how little time has elapsed between
the option exercise and the sale). Thus, such sales
are subject to the reporting requirements, are
prohibited during the blackout period and constitute
sales for purposes of the 60-day prohibition.
35
<PAGE> 38
-------------------------- -----------------------------------------------------
RESTRICTIONS ON Purchases or sales by an employee of the securities
TRANSACTIONS IN OTHER of issuers with which Mellon does business, or other
SECURITIES third party issuers, could result in liability on the
part of such employee. Employees should be sensitive
to even the appearance of impropriety in connection
with their personal securities transactions.
Employees should refer to "Beneficial Ownership"
below, which is applicable to the following
restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that do
business with Mellon. Employees should refer to the
Code of Conduct and comply with such restrictions in
addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
- Credit, Consulting or Advisory Relationship
- Employees may not buy or sell securities
of a company if they are considering
granting, renewing, modifying or denying any
credit facility to that company, acting as a
benefits consultant to that company, or
acting as an adviser to that company with
respect to the company's own securities. In
addition, lending employees who have
assigned responsibilities in a specific
industry group are not permitted to trade
securities in that industry. This
prohibition does not apply to transactions
in open end mutual funds.
- Customer Transactions - Trading for
customers and Mellon accounts should always
take precedence over employees' transactions
for their own or related accounts.
- Excessive Trading, Naked Options - Mellon
discourages all employees from engaging in
short-term or speculative trading, in
trading naked options, in trading that could
be deemed excessive or in trading that could
interfere with an employee's job
responsibilities.
- Front Running - Employees may not engage in
"front running," that is, the purchase or
sale of securities for their own accounts on
the basis of their knowledge of Mellon's
trading positions or plans.
- Initial Public Offerings - Other Employees
are prohibited from acquiring securities
through an allocation by the underwriter of
an Initial Public Offering (IPO) without the
approval of the Manager of Corporate
Compliance. Approval can be given only when
the allocation comes through an employee of
the issuer who is a direct family relation
of the Other Employee. Due to NASD rules,
this approval may not be available to
employees of registered broker/dealers.
- Material Nonpublic Information - Employees
possessing material nonpublic information
regarding any issuer of securities must
refrain from purchasing or selling
securities of that issuer until the
information becomes public or is no longer
considered material.
- Private Placements - Other Employees are
prohibited from acquiring any security in a
private placement unless they obtain the
prior written approval of the Manager of
Corporate Compliance and the employee's
department head. Approval must be given by
both persons for the acquisition to be
considered approved. After receipt of the
necessary approvals and the acquisition,
employees are required to disclose that
investment if they participate in any
subsequent consideration of credit for the
issuer, or of an investment in the issuer
for an advised account. Final decision to
acquire such securities for an advised
account will be subject to independent
review.
- Scalping - Employees may not engage in
"scalping," that is, the purchase or sale of
securities for their own or Mellon's
accounts on the basis of knowledge of
customers' trading positions or plans.
- Short Term Trading - Employees are
discouraged from purchasing and selling, or
from selling and purchasing, the same (or
equivalent) securities within any 60
calendar day period.
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<PAGE> 39
PROHIBITION ON You are prohibited from acquiring any security issued
INVESTMENTS IN by a financial services organization if you are:
SECURITIES OF
FINANCIAL - a member of the Mellon Senior Management
SERVICES ORGANIZATIONS Committee.
- employed in any of the following
departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
- an employee specifically designated by the
Manager of Corporate Compliance and informed
that this prohibition is applicable to you.
Brokerage Accounts - All employees subject to this
restriction on investments in financial services
organizations are required to instruct their brokers
to submit directly to the Manager of Corporate
Compliance copies of all trade confirmations and
statements relating to each account of which they are
a beneficial owner regardless of what, if any,
securities are maintained in such accounts. Thus, for
example, even if the brokerage account has no
reportable securities traded in it, the employee
maintaining such an account must arrange for
duplicate account statements and trade confirmations
to be sent by the broker to the Manager of Corporate
Compliance. An example of an instruction letter to a
broker is contained in Exhibit A.
Financial Services Organizations - The term "security
issued by a financial services organization" includes
any security issued by:
- Commercial Banks other than Mellon
- Bank Holding Companies other than Mellon
- Insurance Companies
- Investment Advisory Companies
- Shareholder Servicing Companies
- Thrifts
- Savings and Loan Associations
- Broker/Dealers
- Transfer Agents
- Other Depository Institutions
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by
mutual funds, variable annuities or insurance
policies. Further, for purposes of determining
whether a company is a financial services
organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services
organizations properly acquired before the employee's
becoming subject to this prohibition may be
maintained or disposed of at the owner's discretion
consistent with this policy.
Additional securities of a financial services
organization acquired through the reinvestment of the
dividends paid by such financial services
organization through a dividend reinvestment program
(DRIP), or through an automatic investment plan (AIP)
are not subject to this prohibition, provided the
employee's election to participate in the DRIP or AIP
predates the date of the employee's becoming subject
to this prohibition. Optional cash purchases through
a DRIP or direct purchase plan (DPP) are subject to
this prohibition.
Securities acquired in any account over which an
employee has no direct or indirect control over the
investment decision making process (e.g.
discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of financial
services organizations must be disclosed in writing
to the Manager of Corporate Compliance.
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<PAGE> 40
BENEFICIAL OWNERSHIP The provisions of the Policy apply to transactions in
the employee's own name and to all other accounts
over which the employee could be presumed to exercise
influence or control, including:
- accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
- accounts of any other member of the
employee's household (e.g., a relative
living in the same home);
- trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or influence;
- corporate accounts controlled, directly or
indirectly, by the employee;
- arrangements similar to trust accounts that
are established for bona fide financial
purposes and benefit the employee; and
- any other account for which the employee is
the beneficial owner (see Glossary for a
more complete legal definition of
"beneficial owner").
NON-MELLON EMPLOYEE The provisions discussed above do not apply to
BENEFIT PLANS transactions done under a bona fide employee benefit
plan administered by an organization not affiliated
with Mellon and by an employee of that organization
who shares beneficial interest with a Mellon
employee, and in the securities of the employing
organization. This means if a Mellon employee's
spouse is employed at a non-Mellon company, the
Mellon employee is not required to obtain approval
for transactions in the employer's securities done by
the spouse as part of the spouse's employee benefit
plan.
The Securities Trading Policy does not apply in such
a situation. Rather, the other organization is relied
upon to provide adequate supervision with respect to
conflicts of interest and compliance with securities
laws.
-------------------------- -----------------------------------------------------
PROTECTING CONFIDENTIAL As an employee you may receive information about
INFORMATION Mellon, its customers and other parties that, for
various reasons, should be treated as confidential.
All employees are expected to strictly comply with
measures necessary to preserve the confidentiality of
information. Employees should refer to the Mellon
Code of Conduct.
INSIDER TRADING AND Federal securities laws generally prohibit the
TIPPING trading of securities while in possession of
"material nonpublic" information regarding the issuer
of those securities (insider trading).
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<PAGE> 41
LEGAL PROHIBITIONS Any person who passes along material nonpublic
information upon which a trade is based (tipping) may
also be liable.
Information is "material" if there is a substantial
likelihood that a reasonable investor would consider
it important in deciding whether to buy, sell or hold
securities. Obviously, information that would affect
the market price of a security would be material.
Examples of information that might be material
include:
- a proposal or agreement for a merger,
acquisition or divestiture, or for the sale
or purchase of substantial assets;
- tender offers, which are often material for
the party making the tender offer as well as
for the issuer of the securities for which
the tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity
problems;
- defaults under agreements or actions by
creditors, customers or suppliers relating
to a company's credit standing;
- earnings and other financial information,
such as large or unusual write-offs,
write-downs, profits or losses;
- pending discoveries or developments, such as
new products, sources of materials, patents,
processes, inventions or discoveries of
mineral deposits;
- a proposal or agreement concerning a
financial restructuring;
- a proposal to issue or redeem securities, or
a development with respect to a pending
issuance or redemption of securities;
- a significant expansion or contraction of
operations;
- information about major contracts or
increases or decreases in orders;
- the institution of, or a development in,
litigation or a regulatory proceeding;
- developments regarding a company's senior
management;
- information about a company received from
a director of that company; and
- information regarding a company's possible
noncompliance with environmental protection
laws.
This list is not exhaustive. All relevant
circumstances must be considered when determining
whether an item of information is material.
"Nonpublic" - Information about a company is
nonpublic if it is not generally available to the
investing public. Information received under
circumstances indicating that it is not yet in
general circulation and which may be attributable,
directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic
information.
39
<PAGE> 42
If you obtain material non-public information you may
not trade related securities until you can refer to
some public source to show that the information is
generally available (that is, available from sources
other than inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in widely
accessible sources--such as in newspapers or on the
internet--becomes public very soon after publication,
information appearing in less accessible
sources--such as regulatory filings, may take up to
several days to be deemed public. Similarly, highly
complex information might take longer to become
public than would information that is easily
understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information
about a company--whether that company is Mellon,
another Mellon entity, a Mellon customer or supplier,
or other company--may not trade in that company's
securities, either for their own accounts or for any
account over which they exercise investment
discretion. In addition, employees may not recommend
trading in those securities and may not pass the
information along to others, except to employees who
need to know the information in order to perform
their job responsibilities with Mellon. These
prohibitions remain in effect until the information
has become public.
Employees who have investment responsibilities should
take appropriate steps to avoid receiving material
nonpublic information. Receiving such information
could create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants and
temporary employees who have access to the types of
confidential information described in this Policy are
responsible for ensuring that consultants and
temporary employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on material
nonpublic information, or specific information that
might be subject to it, should be referred to the
General Counsel.
RESTRICTIONS ON THE FLOW As a diversified financial services organization,
OF INFORMATION WITHIN Mellon faces unique challenges in complying with the
MELLON (THE "CHINESE prohibitions on insider trading and tipping of
WALL") material non-public information, and misuse of
confidential information. This is because one Mellon
unit might have material nonpublic information about
a company while other Mellon units may have a desire,
or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or
sales to customers. To engage in such broad-ranging
financial services activities without violating laws
or breaching Mellon's fiduciary duties, Mellon has
established a "Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the Mellon
units or individuals that are likely to receive
material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that
either trade in securities--for Mellon's account or
for the accounts of others--or provide investment
advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
40
<PAGE> 43
-------------------------- -----------------------------------------------------
GLOSSARY
DEFINITIONS - 40-ACT ENTITY - A Mellon entity registered
under the Investment Company Act and/or the
Investment Advisers Act of 1940
- ACCESS DECISION MAKER - A person designated
as such by the Investment Ethics Committee.
Generally, this will be portfolio managers
and research analysts who make
recommendations or decisions regarding the
purchase or sale of equity, convertible
debt, and non-investment grade debt
securities for investment companies and
other managed accounts. See further details
in the Access Decision Maker edition of the
Policy.
- ACCESS PERSON - As defined by Rule 17j-1
under the Investment Company Act of 1940,
"access person" means:
(A)With respect to a registered investment
company or an investment adviser
thereof, any director, officer, general
partner, or advisory person (see
definition below), of such investment
company or investment adviser;
(B)With respect to a principal underwriter,
any director, officer, or general
partner of such principal underwriter
who in the ordinary course of his
business makes, participates in or
obtains information regarding the
purchase or sale of securities for the
registered investment company for which
the principal underwriter so acts, or
whose functions or duties as part of the
ordinary course of his business relate
to the making of any recommendations to
such investment company regarding the
purchase or sale of securities.
(C)Notwithstanding the provisions of
paragraph (A) hereinabove, where the
investment adviser is primarily engaged
in a business or businesses other than
advising registered investment companies
or other advisory clients, the term
"access person" shall mean: any
director, officer, general partner, or
advisory person of the investment
adviser who, with respect to any
registered investment company, makes any
recommendations, participates in the
determination of which recommendation
shall be made, or whose principal
function or duties relate to the
determination of which recommendation
will be made, to any such investment
company; or who, in connection with his
duties, obtains any information
concerning securities recommendations
being made by such investment adviser to
any registered investment company.
(D)An investment adviser is "primarily
engaged in a business or businesses
other than advising registered
investment companies or other advisory
clients" when, for each of its most
recent three fiscal years or for the
period of time since its organization,
whichever is less, the investment
adviser derived, on an unconsolidated
basis, more than 50 percent of (i) its
total sales and revenues, and (ii) its
income (or loss) before income taxes and
extraordinary items, from such other
business or businesses.
- ADVISORY PERSON of a registered investment
company or an investment adviser thereof
means:
(A)Any employee of such company or
investment adviser (or any company in a
control relationship to such investment
company or investment adviser) who, in
connection with his regular functions or
duties, makes, participates in, or
obtains information regarding the
purchase or sale of a security by a
registered investment company, or whose
functions relate to the making of any
recommendation with respect to such
purchases or sales; and
(B)Any natural person in a control
relationship to such company or
investment adviser who obtains
information concerning recommendations
made to such company with regard to the
purchase or sale of a security.
- APPROVAL - written consent or written notice
of non-objection.
- BENEFICIAL OWNERSHIP - The definition that
follows conforms to interpretations of the
Securities and Exchange Commission on this
matter. Because a determination of
beneficial ownership
41
<PAGE> 44
requires a detailed analysis of personal
financial circumstances that are subject to
change, Corporate Compliance ordinarily will
not advise employees on this definition. It
is the responsibility of each employee to
read the definition and based on that
definition, determine whether he/she is the
beneficial owner of an account. If the
employee determines that he/she is not a
beneficial owner of an account and Corporate
Compliance becomes aware of the existence of
the account, the employee will be
responsible for justifying his/her
determination.
Securities owned of record or held in the
employee's name are generally considered to
be beneficially owned by the employee.
Securities held in the name of any other
person are deemed to be beneficially owned
by the employee if by reason of any
contract, understanding, relationship,
agreement or other arrangement, the employee
obtains therefrom benefits substantially
equivalent to those of ownership, including
the power to vote, or to direct the
disposition of, such securities. Beneficial
ownership includes securities held by others
for the employee's benefit (regardless of
record ownership), e.g., securities held for
the employee or members of the employee's
immediate family, defined below, by agents,
custodians, brokers, trustees, executors or
other administrators; securities owned by
the employee, but which have not been
transferred into the employee's name on the
books of the company; securities which the
employee has pledged; or securities owned by
a corporation that should be regarded as the
employee's personal holding corporation. As
a natural person, beneficial ownership is
deemed to include securities held in the
name or for the benefit of the employee's
immediate family, which includes the
employee's spouse, the employee's minor
children and stepchildren and the employee's
relatives or the relatives of the employee's
spouse who are sharing the employee's home,
unless because of countervailing
circumstances, the employee does not enjoy
benefits substantially equivalent to those
of ownership. Benefits substantially
equivalent to ownership include, for
example, application of the income derived
from such securities to maintain a common
home, meeting expenses that such person
otherwise would meet from other sources, and
the ability to exercise a controlling
influence over the purchase, sale or voting
of such securities. An employee is also
deemed the beneficial owner of securities
held in the name of some other person, even
though the employee does not obtain benefits
of ownership, if the employee can vest or
revest title in himself at once, or at some
future time.
In addition, a person will be deemed the
beneficial owner of a security if he has the
right to acquire beneficial ownership of
such security at any time (within 60 days)
including but not limited to any right to
acquire: (1) through the exercise of any
option, warrant or right; (2) through the
conversion of a security; or (3) pursuant to
the power to revoke a trust, discretionary
account or similar arrangement.
With respect to ownership of securities held
in trust, beneficial ownership includes
ownership of securities as a trustee in
instances where either the employee as
trustee or a member of the employee's
"immediate family" has a vested interest in
the income or corpus of the trust, the
ownership by the employee of a vested
beneficial interest in the trust and the
ownership of securities as a settlor of a
trust in which the employee as the settlor
has the power to revoke the trust without
obtaining the consent of the beneficiaries.
Certain exemptions to these trust beneficial
ownership rules exist, including an
exemption for instances where beneficial
ownership is imposed solely by reason of the
employee being settlor or beneficiary of the
securities held in trust and the ownership,
acquisition and disposition of such
securities by the trust is made without the
employee's prior approval as settlor or
beneficiary. "Immediate family" of an
employee as trustee means the employee's son
or daughter (including any legally adopted
children) or any descendant of either, the
employee's stepson or stepdaughter, the
employee's father or mother or any ancestor
of either, the employee's stepfather or
stepmother and the employee's spouse.
To the extent that stockholders of a company
use it as a personal trading or investment
medium and the company has no other
substantial business, stockholders are
regarded as beneficial
42
<PAGE> 45
owners, to the extent of their respective
interests, of the stock thus invested or
traded in. A general partner in a
partnership is considered to have indirect
beneficial ownership in the securities held
by the partnership to the extent of his pro
rata interest in the partnership. Indirect
beneficial ownership is not, however,
considered to exist solely by reason of an
indirect interest in portfolio securities
held by any holding company registered under
the Public Utility Holding Company Act of
1935, a pension or retirement plan holding
securities of an issuer whose employees
generally are beneficiaries of the plan and
a business trust with over 25 beneficiaries.
Any person who, directly or indirectly,
creates or uses a trust, proxy, power of
attorney, pooling arrangement or any other
contract, arrangement or device with the
purpose or effect of divesting such person
of beneficial ownership as part of a plan or
scheme to evade the reporting requirements
of the Securities Exchange Act of 1934 shall
be deemed the beneficial owner of such
security.
The final determination of beneficial
ownership is a question to be determined in
light of the facts of a particular case.
Thus, while the employee may include
security holdings of other members of his
family, the employee may nonetheless
disclaim beneficial ownership of such
securities.
- "CHINESE WALL" POLICY - procedures designed
to restrict the flow of information within
Mellon from units or individuals who are
likely to receive material nonpublic
information to units or individuals who
trade in securities or provide investment
advice.
- DIRECT FAMILY RELATION - employee's husband,
wife, father, mother, brother, sister,
daughter or son. Includes the preceding
plus, where appropriate, the following
prefixes/suffix: grand-, step-, foster-,
half- and -in-law.
- DISCRETIONARY TRADING ACCOUNT - an account
over which the employee has no direct or
indirect control over the investment
decision making process.
- EMPLOYEE - any employee of Mellon Financial
Corporation or its more-than-50%-owned
direct or indirect subsidiaries; includes
all full-time, part-time, benefited and
non-benefited, exempt and non-exempt,
domestic and international employees; does
not include consultants and contract or
temporary employees
- EXEMPT SECURITIES - Exempt Securities are
defined as:
- direct obligations of the
government of the United States;
- high quality short-term debt
instruments;
- bankers' acceptances;
- bank certificates of deposit and
time deposits;
- commercial paper;
- repurchase agreements;
- securities issued by open-end
investment companies;
- FAMILY RELATION - see direct family
relation.
- GENERAL COUNSEL - General Counsel of Mellon
Financial Corporation or any person to whom
relevant authority is delegated by the
General Counsel.
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<PAGE> 46
- INDEX FUND - an investment company or
managed portfolio which contains securities
of an index in proportions designed to
replicate the return of the index.
- INITIAL PUBLIC OFFERING (IPO) - the first
offering of a company's securities to the
public through an allocation by the
underwriter.
- INVESTMENT CLUB - is a membership
organization where investors make joint
decisions on which securities to buy or
sell. The securities are generally held in
the name of the investment club. Since each
member of an investment club participates in
the investment decision making process, Insider
Risk Employees, Investment Employees and Access
Decision Makers belonging to such investment
clubs must preclear and report the securities
transactions contemplated by such investment
clubs. In contrast, a private investment company
is an organization where the investor invests
his/her money, but has no direct control over
the way his/her money is invested. Insider Risk
Employees, Investment Employees and Access
Decision Makers investing in such a private
investment company are not required to preclear
any of the securities transactions made by the
private investment company. Insider Risk
Employees, Investment Employees and Access
Decision Makers are required to report their
investment in a private investment company to
the Manager of Corporate Compliance and certify
to the Manager of Corporate Compliance that they
have no direct control over the way their money
is invested.
- INVESTMENT COMPANY - a company that issues
securities that represent an undivided interest
in the net assets held by the company. Mutual
funds are investment companies that issue
and sell redeemable securities representing an
undivided interest in the net assets of the
company.
- INVESTMENT ETHICS COMMITTEE is composed of
investment, legal, compliance, and audit
management representatives of Mellon and its
affiliates. The members of the Investment Ethics
Committee are:
President and Chief Investment Officer of
The Dreyfus Corporation (Committee Chair)
General Counsel, Mellon Financial Corporation
Chief Risk Management Officer, Mellon Trust
Manager of Corporate Compliance, Mellon
Financial Corporation
Corporate Chief Auditor, Mellon Financial
Corporation
Chief Investment Officer, Mellon Private
Asset Management
Executive Officer of a Mellon investment
adviser (rotating membership)
The Committee has oversight of issues related to
personal securities trading and investment
activity by Access Decision Makers.
- MANAGER OF CORPORATE COMPLIANCE - the
employee within the Audit and Risk Review
Department of Mellon Financial Corporation who is
responsible for administering the Securities
Trading Policy, or any person to whom relevant
authority is delegated by the Manager of
Corporate Compliance.
- MELLON - Mellon Financial Corporation and
all of its direct and indirect subsidiaries.
- OPTION - a security which gives the investor
the right, but not the obligation, to buy or sell
a specific security at a specified price within a
specified time. For purposes of compliance with
the Policy, any Mellon employee who buys/sells an
option, is deemed to have purchased/sold the
underlying security when the option was
purchased/sold. Four combinations are possible as
described below.
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<PAGE> 47
- Call Options
If a Mellon employee buys a call
option, the employee is considered
to have purchased the underlying
security on the date the option
was purchased.
If a Mellon employee sells a call
option, the employee is considered
to have sold the underlying
security on the date the option
was sold.
- Put Options
If a Mellon employee buys a put
option, the employee is considered
to have sold the underlying
security on the date the option
was purchased.
If a Mellon employee sells a put
option, the employee is considered
to have bought the underlying
security on the date the option
was sold.
Below is a table describing the above:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Transaction Type
-----------------------------------------------------------------------------------
Option Type Buy Sale
-----------------------------------------------------------------------------------
<S> <C> <C>
Put Sale of Underlying Security Purchase of Underlying Security
-----------------------------------------------------------------------------------
Call Purchase of Underlying Security Sale of Underlying Security
-----------------------------------------------------------------------------------
</TABLE>
- PRECLEARANCE COMPLIANCE OFFICER - a person
designated by the Manager of Corporate
Compliance and/or the Investment Ethics
Committee to administer, among other things,
employees' preclearance requests for a
specific business unit.
- PRIVATE PLACEMENT - an offering of
securities that is exempt from registration
under the Securities Act of 1933 because it
does not constitute a public offering.
Includes limited partnerships.
- SENIOR MANAGEMENT COMMITTEE - the Senior
Management Committee of Mellon Financial
Corporation.
- SHORT SALE - the sale of a security that is
not owned by the seller at the time of the
trade.
45
<PAGE> 48
EXHIBIT A - SAMPLE INSTRUCTION LETTER TO BROKER
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted above,
please be advised that the Compliance Department of my employer should be noted
as an "Interested Party" with respect to my accounts. They should, therefore, be
sent copies of all trade confirmations and account statements relating to my
account.
Please send the requested documentation ensuring the account holder's name
appears on all correspondence to:
Manager, Corporate Compliance Preclearance Compliance Officer
Mellon Bank or (obtain address from your
PO Box 3130 Pittsburgh, PA. designated Preclearance
15230-3130 Compliance Officer)
Thank you for your cooperation in this request.
Sincerely yours,
Employee
cc: Manager, Corporate Compliance (151-4340) or Preclearance Compliance Officer
46
<PAGE> 49
MELLON
SECURITIES TRADING POLICY
ACCESS DECISION MAKER EDITION
47
<PAGE> 50
QUICK REFERENCE - ACCESS DECISION MAKERS
-------------------------- -----------------------------------------------------
SOME THINGS YOU MUST DO 1. STATEMENT OF HOLDINGS - Provide to your
Preclearance Compliance Officer a statement of
all securities holdings within 10 days of
becoming an ADM, and within 30 days after every
quarter-end thereafter.
2. DUPLICATE STATEMENTS & CONFIRMATIONS - Instruct
your broker, trust account manager or other
entity through which you have a securities
trading account to send directly to Compliance:
- Trade confirmations summarizing
each transaction
- Periodic statements
Exhibit A can be used to notify your broker.
Contact your designated Preclearance Compliance
Officer for the correct address. This applies to
all accounts in which you have a beneficial
interest.
3. PRECLEARANCE - Before initiating a securities
transaction, written preclearance must be
obtained from the designated Preclearance
Compliance Officer. This can be accomplished by
completing a Preclearance Request Form and:
- delivering or faxing the request to
the designated Preclearance
Compliance Officer, or
- contacting the designated
Preclearance Compliance Officer for
other available notification
options.
Preclearance Request Forms can be obtained from
the designated Preclearance Compliance Officer.
If preclearance approval is received the trade
must be communicated to the broker on the same
day, and executed before the end of the next
business day, at which time the preclearance
approval will expire.
4. CONTEMPORANEOUS DISCLOSURE - ADMs must obtain
written authorization from the ADM's CIO or
other Investment Ethics Committee designee prior
to making or acting upon a portfolio
recommendation in a security which they own
personally.
5. PRIVATE PLACEMENTS - Purchases must be
precleared by the Investment Ethics Committee.
Prior holdings must be approved by the
Investment Ethics Committee within 90 days of
becoming an ADM. To initiate preclearance or
approval, contact the Manager of Corporate
Compliance.
6. IPOS - Acquisition of securities through an
allocation by the underwriter of an Initial
Public Offering (IPO) is prohibited without the
approval of the Manager of Corporate Compliance.
Approval can be given only when the allocation
is the result of a direct family relationship.
7. MICRO-CAP SECURITIES - MCADMs are prohibited
from purchasing any security of an issuer with a
common equity market capitalization of $100
million or less at the time of acquisition
unless approved by the Investment Ethics
Committee. MCADMs must obtain on their
Preclearance Request Forms the written
authorization of their immediate supervisor and
their Chief Investment Officer prior to trading
any security of an issuer with a common equity
market capitalization of more than $100 million
but less than or equal to $250 million at the
time of trade. Any prior holding of such
securities must be approved by the CIO.
-------------------------- -----------------------------------------------------
SOME THINGS YOU MUST NOT MELLON SECURITIES - The following transactions in
DO Mellon securities are prohibited for all Mellon
employees:
- Short sales
- Purchasing and selling or selling and
purchasing within 60 days
- Purchasing or selling during a blackout
period
- Margin purchases or options other than
employee options.
NON-MELLON SECURITIES
- Portfolio Managers are prohibited from
purchasing/selling 7 days before or after a
fund or other advised account transaction.
- For all ADMs, purchasing and selling or
selling and purchasing the same or
equivalent security within 60 days is
discouraged, and any profits must be
disgorged.
OTHER RESTRICTIONS are detailed throughout the
Policy. READ THE POLICY!
-------------------------- -----------------------------------------------------
EXEMPTIONS Preclearance is NOT required for certain other types
of transactions, and transactions in certain other
types of securities. See pages 6 & 7.
-------------------------- -----------------------------------------------------
QUESTIONS? Contact your designated Preclearance Compliance
Officer. If you don't know who that is,
call 412-234-1661
-------------------------- -----------------------------------------------------
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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Dear Colleague:
At Mellon, we take great pride in our transformation over the years from a
regional bank to a global financial services company. Our growth makes us better
able to meet customers' changing needs, gives us greater stability during any
unexpected economic downturn and affords us the opportunity to be the best
performing financial services company.
This diversity of our businesses also makes us a complex organization, which is
why it's more important than ever that you clearly understand Mellon's
SECURITIES TRADING POLICY. Mellon has long maintained strict policies regarding
securities transactions, all with the same clear-cut objective: to establish and
demonstrate our compliance with the high standards with which we conduct our
business.
If you are new to Mellon, please take the time to fully understand the POLICY
and consult it whenever you are unsure about appropriate actions. If you have
seen the POLICY previously, I urge you to renew your understanding of the entire
document and its implications for you. Only by strict adherence to the POLICY
can we ensure that our well-deserved reputation for integrity is preserved.
Sincerely yours,
Martin G. McGuinn
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Questions Concerning the Securities Trading Policy?
Contact Corporate Compliance, (412) 234-1661
AIM 151-4340, Mellon Bank, Pittsburgh, PA 15258-0001
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CONTENTS
--------
PAGE
----
INTRODUCTION........................................................... 1
Purpose..................................................... 1
CLASSIFICATION OF EMPLOYEES............................................ 2
The Investment Ethics Committee ............................ 2
PERSONAL SECURITIES TRADING PRACTICES.................................. 3
Standards of Conduct for Access Decision Makers ............ 3
Conflict of Interest ................................... 3
Material Nonpublic Information ......................... 3
Brokers................................................. 3
Personal Securities Transaction Reports ................ 3
Statement of Securities Accounts and Holdings .......... 4
Quarterly Reporting .................................... 4
Preclearance for Personal Securities Transactions ...... 4
Contemporaneous Disclosure ............................. 5
Blackout Policy ........................................ 6
Exemptions from Requirement to Preclear ................ 6
Gifting of Securities .................................. 7
DRIPs, DPPs, and AIPs .................................. 7
Restricted List ........................................ 7
Confidential Treatment ................................. 8
Restrictions on Transactions in Mellon Securities .......... 9
Mellon 401(k) Plan ..................................... 9
Mellon Employee Stock Options .......................... 10
Restrictions on Transactions in Other Securities ........... 11
Initial Public Offerings ............................... 11
Micro-Cap Securities ................................... 11
Private Placements ..................................... 12
Prohibition on Investments in Securities of Financial
Services Organizations ............................... 13
Beneficial Ownership ................................... 14
Non-Mellon Employee Benefit Plans ...................... 14
Protecting Confidential Information ........................ 15
Insider Trading and Tipping - Legal Prohibitions ....... 15
Insider Trading and Tipping - Mellon's Policy .......... 16
The "Chinese Wall" ..................................... 16
GLOSSARY Definitions ................................................ 17
Exhibit A - Sample Letter to Broker ........................ 23
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-------------------------------------------------------------------------------
INTRODUCTION The Securities Trading Policy (the "Policy") is
designed to reinforce Mellon Financial Corporation's
("Mellon's") reputation for integrity by avoiding
even the appearance of impropriety in the conduct of
Mellon's business. The Policy sets forth procedures
and limitations which govern the personal securities
transactions of every Mellon Employee.
Mellon and its employees are subject to certain laws
and regulations governing personal securities
trading. Mellon has developed this Policy to promote
the highest standards of behavior and ensure
compliance with applicable laws.
Employees should be aware that they may be held
personally liable for any improper or illegal acts
committed during the course of their employment, and
that "ignorance of the law" is not a defense.
Employees may be subject to civil penalties such as
fines, regulatory sanctions including suspensions, as
well as criminal penalties.
Employees outside the United States are also subject
to applicable laws of foreign jurisdictions, which
may differ substantially from US law and which may
subject such employees to additional requirements.
Such employees must comply with applicable
requirements of pertinent foreign laws as well as
with the provisions of the Policy. To the extent any
particular portion of the Policy is inconsistent with
foreign law, employees should consult the General
Counsel or the Manager of Corporate Compliance.
Any provision of this Policy may be waived or
exempted at the discretion of the Manager of
Corporate Compliance. Any such waiver or exemption
will be evidenced in writing and maintained in the
Audit and Risk Review Department.
Employees must read the Policy and must comply with
it. Failure to comply with the provisions of the
Policy may result in the imposition of serious
sanctions, including but not limited to disgorgement
of profits, dismissal, substantial personal liability
and referral to law enforcement agencies or other
regulatory agencies. Employees should retain the
Policy in their records for future reference. Any
questions regarding the Policy should be referred to
the Manager of Corporate Compliance or his/her
designee.
SPECIAL EDITION This edition of the Securities Trading Policy has
been prepared especially for Access Decision Makers.
If you believe you are not an Access Decision Maker,
please contact your supervisor, designated
Preclearance Compliance Officer or the Manager of
Corporate Compliance to obtain the standard edition
of the Policy.
PURPOSE It is imperative that Mellon and its affiliates avoid
even the appearance of a conflict between the
personal securities trading of its employees and its
fiduciary duties to investment companies and managed
account clients. Potential conflicts of interest are
most acute with respect to personal securities
trading by those employees most responsible for
directing managed fund and account trades: portfolio
managers and research analysts. In order to avoid
even the appearance of impropriety, an Investment
Ethics Committee has been formed. The Committee, in
turn, has established the following practices which
apply to Access Decision Makers. These practices do
not limit the authority of any Mellon affiliate to
impose additional restrictions or limitations.
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----------------------------- --------------------------------------------------
CLASSIFICATION OF EMPLOYEES Employees are engaged in a wide
variety of activities for Mellon. In light of the
nature of their activities and the impact of
federal and state laws and the regulations
thereunder, the Policy imposes different
requirements and limitations on employees based on
the nature of their activities for Mellon. To
assist the employees in complying with the
requirements and limitations imposed on them in
light of their activities, employees are
classified into one or both of the following
categories: Access Decision Maker and Micro-Cap
Access Decision Maker. Appropriate requirements
and limitations are specified in the Policy based
upon the employee's classification.
The Investment Ethics Committee will determine the
classification of each employee based on the
following
ACCESS DECISION MAKER (ADM) A person designated as such by the Investment
Ethics Committee. Generally, this will be
portfolio managers and research analysts who make
recommendations or decisions regarding the
purchase or sale of equity, convertible debt, and
non-investment grade debt securities for mutual
funds and other managed accounts. Portfolio
managers in Mellon Private Capital Management are
generally ADMs; other personal trust officers are
generally not ADMs unless the investment
discretion they exercise warrants ADM designation.
Traders are not ADMs. Portfolio managers of funds
which are limited to replicating an index are not
ADMs.
MICRO-CAP ACCESS DECISION An ADM designated as such by the Investment Ethics
MAKERS (MCADM) Committee. Generally, this will be ADMs who make
recommendations or decisions regarding the
purchase or sale of any security of an issuer with
a common equity market capitalization equal to or
less than two-hundred fifty million dollars.
MCADMs are also ADMs.
CONSULTANTS, INDEPENDENT Managers should inform consultants, independent
CONTRACTORS AND TEMPORARY contractors and temporary employees of the general
EMPLOYEES provisions of the Policy (such as the prohibition
on trading while in possession of material
nonpublic information), but generally they will
not be required to preclear trades or report their
personal securities holdings. If one of these
persons would be considered an ADM if the person
were a Mellon employee, the person's manager
should advise the Manager of Corporate Compliance
who will determine whether such individual should
be subject to the preclearance and reporting
requirements of the Policy.
THE INVESTMENT ETHICS The Investment Ethics Committee is composed of
COMMITTEE investment, legal, compliance, and audit
management representatives of Mellon and its
affiliates.
The chief executive officer, senior investment
officer and the Preclearance Compliance Officer at
each Mellon investment affiliate, working
together, will be designees of the Investment
Ethics Committee. The Investment Ethics Committee
will meet periodically to review the actions taken
by its designees and to consider issues related to
personal securities trading and investment
activity by ADMs.
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PERSONAL SECURITIES TRADING PRACTICES
--------------------------------------------------------------------------------
STANDARDS OF CONDUCT FOR Because of their particular responsibilities, ADMs
ACCESS DECISION MAKERS are subject to preclearance and personal
securities reporting requirements, as discussed
below.
Every ADM must follow these procedures or risk
serious sanctions, including dismissal. If you
have any questions about these procedures you
should consult the Manager of Corporate Compliance
or your Preclearance Compliance Officer.
Interpretive issues that arise under these
procedures shall be decided by, and are subject to
the discretion of, the Manager of Corporate
Compliance.
CONFLICT OF INTEREST No employee may engage in or recommend any
securities transaction that places, or appears to
place, his or her own interests above those of any
customer to whom financial services are rendered,
including mutual funds and managed accounts, or
above the interests of Mellon.
MATERIAL NONPUBLIC No employee may divulge the current portfolio
INFORMATION positions, or current or anticipated portfolio
transactions, programs or studies, of Mellon or
any Mellon customer to anyone unless it is
properly within his or her job responsibilities to
do so.
No employee may engage in or recommend a
securities transaction, for his or her own benefit
or for the benefit of others, including Mellon or
its customers, while in possession of material
nonpublic information regarding such securities.
No employee may communicate material nonpublic
information to others unless it is properly within
his or her job responsibilities to do so.
BROKERS Trading Accounts - All ADMs are encouraged to
conduct their personal investing through a Mellon
affiliate brokerage account. This will assist in
the monitoring of account activity on an ongoing
basis in order to ensure compliance with the
Policy.
PERSONAL SECURITIES Statements & Confirmations - All ADMs are required
TRANSACTIONS REPORTS to instruct their broker, trust account manager or
other entity through which they have a securities
trading account to submit directly to the Manager
of Corporate Compliance or designated Preclearance
Compliance Officer copies of all trade
confirmations and statements relating to each
account of which they are a beneficial owner
regardless of what, if any, securities are
maintained in such accounts. Thus, for example,
even if the brokerage account contains only mutual
funds or other Exempt Securities as that term is
defined in the glossary and the account has the
capability to have reportable securities traded in
it, the ADM maintaining such an account must
arrange for duplicate account statements and trade
confirmations to be sent by the broker to the
Manager of Corporate Compliance or designated
Preclearance Compliance Officer. Exhibit A is an
example of an instruction letter to a broker.
Other securities transactions which were not
completed through a brokerage account, such as
gifts, inheritances, spin-offs from securities
held outside brokerage accounts, or other
transfers must be reported to the designated
Preclearance Compliance Officer within 10 days.
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<PAGE> 57
STATEMENT OF SECURITIES Within ten days of becoming an ADM and on an
ACCOUNTS AND HOLDINGS annual basis thereafter, all ADMs must submit to
their designated Preclearance Compliance Officer:
- a listing of all securities trading
accounts in which the employee has a
beneficial interest.
- a statement of all securities in which
they presently have any direct or
indirect beneficial ownership other than
Exempt Securities.
The annual report must be completed upon the
request of Corporate Compliance, and the
information submitted must be current within 30
days of the date the report is submitted. The
annual statement of securities holdings contains
an acknowledgment that the ADM has read and
complied with this Policy.
QUARTERLY REPORTING ADMs are required to submit quarterly to their
Preclearance Compliance Officer the Quarterly
Securities Report. This report must be submitted
within 30 days of each quarter end and includes
information on:
- securities beneficially owned at any
time during the quarter which were also
either recommended for a transaction or
in the portfolio managed by the ADM
during the quarter.
- positions obtained in private
placements.
- securities of issuers with a common
equity market capitalization of $250
million or less at security acquisition
or at the date designated by the
Preclearance Compliance Officer,
whichever is later, which were
beneficially owned at any time during
the quarter.
- Securities transactions which were not
completed through a brokerage account,
such as gifts inheritances, spin-offs
from securities held outside brokerage
accounts, or other transfers.
A form for making this report can be obtained from
your designated Preclearance Compliance Officer or
from the Securities Trading Site on the Mellon
intranet.
PRECLEARANCE FOR PERSONAL All ADMs must notify the designated Preclearance
SECURITIES TRANSACTIONS Compliance Officer in writing and receive
preclearance before they engage in any purchase or
sale of a security for their own accounts. ADMs
should refer to the provisions under "Beneficial
Ownership" below, which are applicable to these
provisions.
All requests for preclearance for a securities
transaction shall be submitted by completing a
Preclearance Request Form which can be obtained
from the designated Preclearance Compliance
Officer.
The designated Preclearance Compliance Officer
will notify the ADM whether the request is
approved or denied, without disclosing the reason
for such approval or denial.
Notifications may be given in writing or verbally
by the designated Preclearance Compliance Officer
to the ADM. A record of such notification will be
maintained by the designated Preclearance
Compliance Officer. However, it shall be the
responsibility of the ADM to obtain a written
record of the designated Preclearance Compliance
Officer's notification within 48 hours of such
notification. The ADM should retain a copy of this
written record for at least two years.
As there could be many reasons for preclearance
being granted or denied, ADMs should not infer
from the preclearance response anything regarding
the security for which preclearance was requested.
Although making a preclearance request does not
obligate an ADM to do the transaction, it should
be noted that:
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- Preclearance requests should not be made for
a transaction that the ADM does not intend to
make.
- The order for a transaction must be placed
with the broker on the same day that
preclearance authorization is received. The
broker must execute the trade by 4:00 p.m.
Eastern Time on the next business day, at
which time the preclearance authorization
will expire.
- ADMs should not discuss with anyone else,
inside or outside Mellon, the response they
received to a preclearance request. If the
ADM is preclearing as beneficial owner of
another's account, the response may be
disclosed to the other owner.
- Good Until Canceled/Stop Loss Orders ("Limit
Orders") must be precleared, and security
transactions receiving preclearance
authorization must be executed before the
preclearance expires. At the end of the
preclearance authorization period, any
unexecuted Limit Order must be canceled or a
new preclearance authorization must be
obtained. There are additional pre-approval
requirements for initial public offerings,
micro-cap securities and private placements.
See page 11.
CONTEMPORANEOUS ADMs must obtain written authorization
DISCLOSURE prior to making or acting upon a portfolio
recommendation in a security which they own
personally. This authorization must be obtained
from the ADM's CIO/CEO or other Investment Ethics
Committee designee immediately prior to the first
such portfolio recommendation in a particular
security in a calendar month. The following
personal securities holdings are exempt from the
requirement to obtain written authorization
immediately preceding a portfolio recommendation
or transaction:
- Exempt Securities (see glossary).
- Securities held in accounts over which the
ADM has no investment discretion, which are
professionally managed by a non-family
member, and where the ADM has no actual
knowledge that such account is currently
holding the same or equivalent security at
the time of the portfolio recommendation.
- Personal holdings of equity securities of the
top 200 issuers on the Russell list of
largest publicly traded companies.
- Personal equity holdings of securities of
non-US issuers with a common equity market
capitalization of $20 billion or more.
- Personal holdings of debt securities which do
not have a conversion feature and are rated
BBB or better.
- Personal holdings of ADMs who are index fund
managers and who have no investment
discretion in replicating an index.
- Personal holdings of Portfolio Managers in
Mellon Private Capital Management and Mellon
Private Asset Management if the Portfolio
Manager exactly replicates the model or clone
portfolio. A disclosure form is required if
the Portfolio Manager recommends securities
which are not in the clone or model portfolio
or recommends a model or clone security in a
different percentage than model or clone
amounts. Disclosure forms are also required
when the Portfolio Manager recommends
individual securities to clients, even if
Mellon shares control of the investment
process with other parties.
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If a personal securities holding does not fall
under one of these exemptions, the ADM must
complete and forward a disclosure form for
authorization by the CIO/CEO or designee,
immediately prior to the first recommendation or
transaction in the security in the current
calendar month. Disclosure forms for subsequent
transactions in the same security are not required
for the remainder of the calendar month as long as
purchases (or sales) in all portfolios do not
exceed the maximum number of shares, options, or
bonds disclosed on the disclosure form. If the ADM
seeks to effect a transaction or makes a
recommendation in a direction opposite to the most
recent disclosure form, a new disclosure form must
be completed prior to the transaction or
recommendation.
Once the CIO/CEO's authorization is obtained, the
ADM may make the recommendation or trade the
security in the managed portfolio without the
Preclearance Compliance Officer's signature.
However, the ADM must deliver the authorization
form to the Preclearance Compliance Officer on the
day of the CIO/CEO's authorization. The
Preclearance Compliance Officer will forward a
copy of the completed form for the ADM's files.
The ADM is responsible for following-up with the
Preclearance Compliance Officer in the event a
completed form is not returned to the ADM within 5
business days. It is recommended that the ADM
retain completed forms for two years.
A listing of Investment Ethics Committee
designees, a listing of the Russell 200, and the
personal securities disclosure forms are available
on the Mellon intranet , or can be obtained from
your designated Preclearance Compliance Officer.
BLACKOUT POLICY Except as described below, ADMs will generally not
be given clearance to execute a transaction in any
security that is on the restricted list maintained
by their Preclearance Compliance Officer, or for
which there is a pending buy or sell order for an
affiliated account. This provision does not apply
to transactions effected or contemplated by index
funds.
In addition, portfolio managers (except index fund
managers) are prohibited from buying or selling a
security within seven calendar days before and
after their investment company or managed account
has effected a transaction in that security. In
addition to other appropriate sanctions, if such
ADMs effect such a personal transactions during
that period, these individuals must disgorge any
and all profit realized from such transactions.
The amount of the disgorgement will be determined
by the Investment Ethics Committee.
Exceptions - Regardless of any restrictions above,
ADMs will generally be given clearance to buy or
sell up to the greater of 100 shares or $10,000 of
securities of the top 500 issuers on the Russell
list of largest publicly traded companies. In
addition, ADMs will be exempt from the 7-day
disgorgement for the described transactions (but
not the disgorgement for short-term/60-day
trading). An ADM is limited to two such purchases
or two such sales in the securities of any one
issuer in any calendar month.
EXEMPTIONS FROM Preclearance is not required for the following
REQUIREMENT transactions:
TO PRECLEAR
- purchases or sales of Exempt Securities
(see Glossary);
- purchases or sales of securities issued by
non-affiliated closed-end investment
companies; non-financial commodities (such
as agricultural futures, metals, oil, gas,
etc.), currency futures, financial futures,
index futures and index securities;
- purchases or sales effected in any account
over which an employee has no direct or
indirect control over the investment decision
making process (e.g., discretionary trading
accounts). Discretionary trading accounts may
be maintained, without being subject to
preclearance procedures, only when the
Manager of Corporate Compliance, after a
thorough review, is satisfied that the
account is truly discretionary;
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- transactions that are non-volitional on the
part of an employee (such as stock
dividends);
- the sale of Mellon stock received upon the
exercise of an employee stock option if the
sale is part of a "netting of shares" or
"cashless exercise" administered by the Human
Resources Department (for which the Human
Resources Department will forward information
to the Manager of Corporate Compliance);
- changes to elections in the Mellon 401(k)
plan;
- purchases effected upon the exercise of
rights issued by an issuer pro rata to all
holders of a class of securities, to the
extent such rights were acquired from such
issuer;
- sales of rights acquired from an issuer, as
described above; and/or
- sales effected pursuant to a bona fide tender
offer.
GIFTING OF SECURITIES ADMs desiring to make a bona fide gift of
securities or who receive a bona fide gift of
securities do not need to preclear the
transaction. However, ADMs must report such bona
fide gifts to the designated Preclearance
Compliance Officer. The report must be made within
10 days of making or receiving the gift and must
disclose the following information: the name of
the person receiving (giving) the gift, the date
of the transaction, and the name of the broker
through which the transaction was effected. A bona
fide gift is one where the donor does not receive
anything of monetary value in return. An ADM who
purchases a security with the intention of making
a gift must preclear the purchase transaction.
DRIPs, DPPs AND Certain companies with publicly traded securities
AIPs establish:
- Dividend reinvestment plans (DRIPs) - These
permit shareholders to have their dividend
payments channeled to the purchase of
additional shares of such company's stock. An
additional benefit offered by many DRIPs to
DRIP participants is the right to buy
additional shares by sending in a check
before the dividend reinvestment date
("optional cash purchases").
- Direct Purchase Plans (DPPs) - These allow
purchasers to buy stock by sending a check
directly to the issuer, without using a
broker.
- Automatic Investment Plans (AIPs) - These
allow purchasers to set up a plan whereby a
fixed amount of money is automatically
deducted from their checking account each
month and used to purchase stock directly
from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
ADMs who enroll in a DRIP or AIP are not required
to preclear enrollment, the periodic reinvestment
of dividend payments into additional shares of
company stock through a DRIP, or the periodic
investments through an AIP.
ADMs must preclear all optional cash purchases
through a DRIP and all purchases through a DPP.
ADMs must also preclear all sales through a DRIP,
DPP or AIP.
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RESTRICTED LIST Each Preclearance Compliance Officer will maintain
a list (the "Restricted List") of companies whose
securities are deemed appropriate for
implementation of trading restrictions for ADMs in
their area. From time to time, such trading
restrictions may be appropriate to protect Mellon
and its ADMs from potential violations, or the
appearance of violations, of securities laws. The
inclusion of a company on the Restricted List
provides no indication of the advisability of an
investment in the company's securities or the
existence of material nonpublic information on the
company. Nevertheless, the contents of the
Restricted List will be treated as confidential
information in order to avoid unwarranted
inferences.
The Preclearance Compliance Officer will retain
copies of the restricted lists for five years.
CONFIDENTIAL TREATMENT The Manager of Corporate Compliance and/or
Preclearance Compliance Officer will use his or
her best efforts to assure that all requests for
preclearance, all personal securities transaction
reports and all reports of securities holdings are
treated as "Personal and Confidential." However,
such documents will be available for inspection by
appropriate regulatory agencies, and by other
parties within and outside Mellon as are necessary
to evaluate compliance with or sanctions under
this Policy. Documents received from ADMs are also
available for inspection by the boards of
directors of 40-Act entities and by the boards of
directors (or trustees or managing general
partners, as applicable) of the investment
companies managed or administered by 40-Act
entities.
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RESTRICTIONS ON Employees who engage in transactions involving
TRANSACTIONS IN Mellon securities should be aware of their unique
MELLON SECURITIES responsibilities with respect to such transactions
arising from the employment relationship and
should be sensitive to even the appearance of
impropriety.
The following restrictions apply to all
transactions in Mellon's publicly traded
securities occurring in the employee's own account
and in all other accounts over which the employee
could be presumed to exercise influence or control
(see provisions under "Beneficial Ownership" below
for a more complete discussion of the accounts to
which these restrictions apply). These
restrictions are to be followed in addition to any
restrictions that apply to particular officers or
directors (such as restrictions under Section 16
of the Securities Exchange Act of 1934).
- Short Sales - Short sales of Mellon
securities by employees are prohibited.
- Short Term Trading - ADMs are prohibited from
purchasing and selling, or from selling and
purchasing Mellon securities within any 60
calendar day period. In addition to any other
sanctions, any profits realized on such short
term trades must be disgorged in accordance
with procedures established by senior
management.
- Margin Transactions - Purchases on margin of
Mellon's publicly traded securities by
employees is prohibited. Margining Mellon
securities in connection with a cashless
exercise of an employee stock option through
the Human Resources Department is exempt from
this restriction. Further, Mellon securities
may be used to collateralize loans or the
acquisition of securities other than those
issued by Mellon.
- Option Transactions - Option transactions
involving Mellon's publicly traded securities
are prohibited. Transactions under Mellon's
Long-Term Incentive Plan or other employee
option plans are exempt from this
restriction.
- Major Mellon Events - Employees who have
knowledge of major Mellon events that have
not yet been announced are prohibited from
buying or selling Mellon's publicly traded
securities before such public announcements,
even if the employee believes the event does
not constitute material nonpublic
information.
- Mellon Blackout Period - Employees are
prohibited from buying or selling Mellon's
publicly traded securities during a blackout
period. The blackout period begins the 16th
day of the last month of each calendar
quarter and ends 3 business days after Mellon
Financial Corporation publicly announces the
financial results for that quarter. Thus, the
blackout periods begin on March 16, June 16,
September 16 and December 16. The end of the
blackout period is determined by counting
business days only, and the day of the
earnings announcement is day 1. The blackout
period ends at the end of day 3, and
employees can trade Mellon securities on day
4.
MELLON 401(k) PLAN For purposes of the blackout period and the short
term trading rule, employees' changing their
existing account balance allocation to increase or
decrease the amount allocated to Mellon Common
Stock will be treated as a purchase or sale of
Mellon Stock, respectively. This means:
- Employees are prohibited from increasing or
decreasing their existing account balance
allocation to Mellon Common Stock during the
blackout period.
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- Employees are prohibited from increasing
their existing account balance allocation to
Mellon Common Stock and then decreasing it
within 60 days. Similarly, employees are
prohibited from decreasing their existing
account balance allocation to Mellon Common
Stock and then increasing it within 60 days.
However:
- with respect to ADMs, any profits
realized on short term changes in the
401(k) will not have to be disgorged.
- changes to existing account balance
allocations in the 401(k) plan will not
be compared to transactions in Mellon
securities outside the 401(k) for
purposes of the 60-day rule. (Note: this
does not apply to members of the
Executive Management Group, who should
consult with the Legal Department.)
Except for the above there are no other
restrictions applicable to the 401(k) plan. This
means, for example:
- Employees are not required to preclear any
elections or changes made in their 401(k)
account.
- There is no restriction on employees'
changing their salary deferral contribution
percentages with regard to either the
blackout period or the 60-day rule.
- The regular salary deferral contribution to
Mellon Common Stock in the 401(k) that takes
place with each pay will not be considered a
purchase for the purposes of either the
blackout or the 60-day rule.
MELLON EMPLOYEE STOCK Receipt - Your receipt of an employee stock option
OPTIONS from Mellon is not deemed to be a purchase of a
security. Therefore, it is exempt from
preclearance and reporting requirements, can take
place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
Exercises - The exercise of an employee stock
option that results in your holding the shares is
exempt from preclearance and reporting
requirements, can take place during the blackout
period and does not constitute a purchase for
purposes of the 60-day prohibition.
"Cashless" Exercises - The exercise of an employee
stock option which is part of a "cashless
exercise" or "netting of shares" that is
administered by the Human Resources Department or
Chase Mellon Shareholder Services is exempt from
the preclearance and reporting requirements and
will not constitute a purchase or a sale for
purposes of the 60-day prohibition. A "cashless
exercise" or "netting of shares" transaction is
permitted during the blackout period for
ShareSuccess plan options only. They are not
permitted during the blackout period for any other
plan options.
Sales - The sale of the Mellon securities that
were received in the exercise of an employee stock
option is treated like any other sale under the
Policy (regardless of how little time has elapsed
between the option exercise and the sale). Thus,
such sales are subject to the preclearance and
reporting requirements, are prohibited during the
blackout period and constitute sales for purposes
of the 60-day prohibition.
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RESTRICTIONS ON Purchases or sales by an employee of the
TRANSACTIONS IN OTHER securities of issuers with which Mellon does
SECURITIES business, or other third party issuers, could
result in liability on the part of such employee.
Employees should be sensitive to even the
appearance of impropriety in connection with their
personal securities transactions. Employees
should refer to "Beneficial Ownership" below,
which is applicable to the following
restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that do
business with Mellon. Employees should refer to
the Code of Conduct and comply with such
restrictions in addition to the restrictions and
reporting requirements set forth below.
The following restrictions apply to all securities
transactions by ADMs:
- Customer Transactions - Trading for customers
and Mellon accounts should always take
precedence over employees' transactions for
their own or related accounts.
- Excessive Trading, Naked Options - Mellon
discourages all employees from engaging in
short-term or speculative trading, in trading
naked options, in trading that could be
deemed excessive or in trading that could
interfere with an employee's job
responsibilities.
- Front Running - Employees may not engage in
"front running," that is, the purchase or
sale of securities for their own accounts on
the basis of their knowledge of Mellon's
trading positions or plans.
- Initial Public Offerings - ADMs are
prohibited from acquiring securities through
an allocation by the underwriter of an
Initial Public Offering (IPO) without the
approval of the Investment Ethics Committee.
Approval can be given only when the
allocation comes through an employee of the
issuer who is a direct family relation of the
ADM. Due to NASD rules, this approval may not
be available to employees of registered
broker/dealers.
- Material Nonpublic Information - Employees
possessing material nonpublic information
regarding any issuer of securities must
refrain from purchasing or selling securities
of that issuer until the information becomes
public or is no longer considered material.
- Micro-Cap Securities - Unless specifically
authorized in writing by the Investment
Ethics Committee, MCADMs are prohibited from
voluntarily obtaining beneficial ownership of
any security of an issuer with a common
equity market capitalization of $100 million
or less at the time of acquisition. If any
MCADM involuntarily acquires such a
micro-cap security through inheritance,
gift, or spin-off, this fact must be
disclosed in a memo to the MCADM's
Preclearance Compliance Officer within 10
business days of the MCADM's knowledge of
this fact. A copy of this memo should be
attached to the MCADM's next Quarterly
Securities Report. A form for making this
report can be obtained from your designated
Preclearance Compliance Officer.
MCADMs must obtain on their Preclearance
Request Forms the written authorization of
their immediate supervisor and their Chief
Investment Officer prior to voluntarily
obtaining, or disposing of, a beneficial
ownership of any security of an issuer with a
common equity market capitalization of more
than $100 million but less than or equal to
$250 million at the time of acquisition.
MCADMs who have prior holdings of securities
of an issuer with a common equity market
capitalization of $250 million or less must
disclose on their next Quarterly Securities
Report that they have not yet received
CIO/CEO authorization for these holdings. The
Preclearance Compliance Officer will utilize
these forms to request the appropriate
authorizations.
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- Private Placements - Participation in private
placements is prohibited without the prior
written approval of the Investment Ethics
Committee. The Committee will generally not
approve an ADM's acquiring, in a private
placement, beneficial ownership of any
security of an issuer in which any managed
fund or account is authorized to invest
within the ADM's fund complex.
Private placements include certain
co-operative investments in real estate,
co-mingled investment vehicles such as hedge
funds, and investments in family owned
businesses. For the purpose of this policy,
time-shares and cooperative investments in
real estate used as a primary or secondary
residence are not considered to be private
placements.
When considering requests for participation
in private placements, the Investment Ethics
Committee will take into account the specific
facts and circumstances of the request prior
to reaching a decision on whether to
authorize a private placement investment by
an ADM. These factors include, among other
things, whether the opportunity is being
offered to an individual by virtue of his or
her position with Mellon or its affiliates,
or his or her relationship to a managed fund
or account. The Investment Ethics Committee
will also consider whether a fund or account
managed by the ADM is authorized to invest in
securities of the issuer in which the ADM is
seeking to invest. At its discretion, the
Investment Ethics Committee may request any
and all information and/or documentation
necessary to satisfy itself that no actual or
potential conflict, or appearance of a
conflict, exists between the proposed private
placement purchase and the interests of any
managed fund or account.
ADMs who have prior holdings of securities
obtained in a private placement must request
the written authorization of the Investment
Ethics Committee to continue holding the
security. This request for authorization must
be initiated within 90 days of becoming an
ADM.
To request authorization for prior holdings
or new proposed acquisitions of securities
issued in an eligible private placement,
contact the Manager of Corporate Compliance.
- Scalping - Employees may not engage in
"scalping," that is, the purchase or sale of
securities for their own or Mellon's accounts
on the basis of knowledge of customers'
trading positions or plans.
- Short Term Trading - ADMs are discouraged
from purchasing and selling, or from selling
and purchasing, the same (or equivalent)
securities within any 60 calendar day period.
Any profits realized on such short term
trades must be disgorged in accordance with
procedures established by senior management.
Exception: securities may be sold pursuant to
a bona fide tender offer without disgorgement
under the 60-day rule.
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PROHIBITION ON INVESTMENTS You are prohibited from acquiring any security
IN SECURITIES OF FINANCIAL issued by a financial services organization if you
SERVICES ORGANIZATIONS are:
- a member of the Mellon Senior Management
Committee.
- employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
- an employee specifically designated by the
Manager of Corporate Compliance and informed
that this prohibition is applicable to you.
Financial Services Organizations - The term
"security issued by a financial services
organization" includes any security issued by:
- Commercial Banks other than Mellon
- Bank Holding Companies other than Mellon
- Insurance Companies
- Investment Advisory Companies
- Shareholder Servicing Companies
- Thrifts
- Savings and Loan Associations
- Broker/Dealers
- Transfer Agents
- Other Depository Institutions
The term "securities issued by a financial
services organization" DOES NOT INCLUDE securities
issued by mutual funds, variable annuities or
insurance policies. Further, for purposes of
determining whether a company is a financial
services organization, subsidiaries and parent
companies are treated as separate issuers.
Effective Date - Securities of financial services
organizations properly acquired before the
employee's becoming subject to this prohibition
may be maintained or disposed of at the owner's
discretion consistent with this policy.
Additional securities of a financial services
organization acquired through the reinvestment of
the dividends paid by such financial services
organization through a dividend reinvestment
program (DRIP), or through an automatic investment
plan (AIP) are not subject to this prohibition,
provided the employee's election to participate in
the DRIP or AIP predates the date of the
employee's becoming subject to this prohibition.
Optional cash purchases through a DRIP or direct
purchase plan (DPP) are subject to this
prohibition.
Securities acquired in any account over which an
employee has no direct or indirect control over
the investment decision making process (e.g.
discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of
financial services organizations must be disclosed
in writing to the Manager of Corporate Compliance.
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BENEFICIAL OWNERSHIP The provisions of the Policy apply to transactions
in the employee's own name and to all other
accounts over which the employee could be presumed
to exercise influence or control, including:
- accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
- accounts of any other member of the
employee's household (e.g., a relative living
in the same home);
- trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or influence;
- corporate accounts controlled, directly or
indirectly, by the employee;
- arrangements similar to trust accounts that
are established for bona fide financial
purposes and benefit the employee; and
- any other account for which the employee is
the beneficial owner (see Glossary for a more
complete legal definition of "beneficial
owner").
NON-MELLON EMPLOYEE BENEFIT The provisions discussed above do not apply to
PLANS transactions done under a bona fide employee
benefit plan administered by an organization
not affiliated with Mellon and by an employee of
that organization who shares beneficial interest
with a Mellon employee, and in the securities of
the employing organization. This means if a Mellon
employee's spouse is employed at a non-Mellon
company, the Mellon employee is not required to
obtain approval for transactions in the employer's
securities done by the spouse as part of the
spouse's employee benefit plan.
The Securities Trading Policy does not apply in
such a situation. Rather, the other organization
is relied upon to provide adequate supervision
with respect to conflicts of interest and
compliance with securities laws.
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PROTECTING CONFIDENTIAL As an employee you may receive information about
INFORMATION Mellon, its customers and other parties that, for
various reasons, should be treated as
confidential. All employees are expected to
strictly comply with measures necessary to
preserve the confidentiality of information.
Employees should refer to the Mellon Code of
Conduct.
INSIDER TRADING AND TIPPING Federal securities laws generally prohibit the
trading of securities while in possession of
"material nonpublic" information regarding the
issuer of those securities (insider trading).
LEGAL PROHIBITIONS Any person who passes along material nonpublic
information upon which a trade is based (tipping)
may also be liable.
Information is "material" if there is a
substantial likelihood that a reasonable investor
would consider it important in deciding whether to
buy, sell or hold securities. Obviously,
information that would affect the market price of
a security would be material. Examples of
information that might be material include:
- a proposal or agreement for a merger,
acquisition or divestiture, or for the sale
or purchase of substantial assets;
- tender offers, which are often material for
the party making the tender offer as well as
for the issuer of the securities for which
the tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity
problems;
- defaults under agreements or actions by
creditors, customers or suppliers relating to
a company's credit standing;
- earnings and other financial information,
such as large or unusual write-offs,
write-downs, profits or losses;
- pending discoveries or developments, such as
new products, sources of materials, patents,
processes, inventions or discoveries of
mineral deposits;
- a proposal or agreement concerning a
financial restructuring;
- a proposal to issue or redeem securities, or
a development with respect to a pending
issuance or redemption of securities;
- a significant expansion or contraction of
operations;
- information about major contracts or
increases or decreases in orders;
- the institution of, or a development in,
litigation or a regulatory proceeding;
- developments regarding a company's senior
management;
- information about a company received from a
director of that company; and
- information regarding a company's possible
noncompliance with environmental protection
laws.
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This list is not exhaustive. All relevant
circumstances must be considered when determining
whether an item of information is material.
"Nonpublic" - Information about a company is
nonpublic if it is not generally available to the
investing public. Information received under
circumstances indicating that it is not yet in
general circulation and which may be attributable,
directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic
information.
If you obtain material non-public information you
may not trade related securities until you can
refer to some public source to show that the
information is generally available (that is,
available from sources other than inside sources)
and that enough time has passed to allow wide
dissemination of the information. While
information appearing in widely accessible
sources--such as in newspapers or on the
internet--becomes public very soon after
publication, information appearing in less
accessible sources--such as regulatory filings,
may take up to several days to be deemed public.
Similarly, highly complex information might take
longer to become public than would information
that is easily understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic
information about a company--whether that company
is Mellon, another Mellon entity, a Mellon
customer or supplier, or other company--may not
trade in that company's securities, either for
their own accounts or for any account over which
they exercise investment discretion. In addition,
employees may not recommend trading in those
securities and may not pass the information along
to others, except to employees who need to know
the information in order to perform their job
responsibilities with Mellon. These prohibitions
remain in effect until the information has become
public.
Employees who have investment responsibilities
should take appropriate steps to avoid receiving
material nonpublic information. Receiving such
information could create severe limitations on
their ability to carry out their responsibilities
to Mellon's fiduciary customers.
Employees managing the work of consultants and
temporary employees who have access to the types
of confidential information described in this
Policy are responsible for ensuring that
consultants and temporary employees are aware of
Mellon's policy and the consequences of
noncompliance.
Questions regarding Mellon's policy on material
nonpublic information, or specific information
that might be subject to it, should be referred to
the General Counsel.
RESTRICTIONS ON THE FLOW OF As a diversified financial services organization,
INFORMATION WITHIN MELLON Mellon faces unique challenges in complying with
(THE "CHINESE WALL") the prohibitions on insider trading and tipping
of material non-public information, and misuse of
confidential information. This is because one
Mellon unit might have material nonpublic
information about a company while other Mellon
units may have a desire, or even a fiduciary duty,
to buy or sell that company's securities or
recommend such purchases or sales to customers. To
engage in such broad-ranging financial services
activities without violating laws or breaching
Mellon's fiduciary duties, Mellon has established
a "Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the Mellon
units or individuals that are likely to receive
material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals
that either trade in securities--for Mellon's
account or for the accounts of others--or provide
investment advice (Investment Functions).
Employees should refer to CPP 903-2(C) The Chinese
Wall.
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GLOSSARY
DEFINITIONS - 40-ACT ENTITY - A Mellon entity registered
under the Investment Company Act and/or the
Investment Advisers Act of 1940
- ACCESS DECISION MAKER - A person designated
as such by the Investment Ethics Committee.
Generally, this will be portfolio managers
and research analysts who make
recommendations or decisions regarding the
purchase or sale of equity, convertible debt,
and non-investment grade debt securities for
investment companies and other managed
accounts.
- ACCESS PERSON - As defined by Rule 17j-1
under the Investment Company Act of 1940,
"access person" means:
(A) With respect to a registered
investment company or an investment
adviser thereof, any director,
officer, general partner, or
advisory person (see definition
below), of such investment company
or investment adviser;
(B) With respect to a principal
underwriter, any director, officer,
or general partner of such
principal underwriter who in the
ordinary course of his business
makes, participates in or obtains
information regarding the purchase
or sale of securities for the
registered investment company for
which the principal underwriter so
acts, or whose functions or duties
as part of the ordinary course of
his business relate to the making
of any recommendations to such
investment company regarding the
purchase or sale of securities.
(C) Notwithstanding the provisions of
paragraph (A) hereinabove, where
the investment adviser is primarily
engaged in a business or businesses
other than advising registered
investment companies or other
advisory clients, the term "access
person" shall mean: any director,
officer, general partner, or
advisory person of the investment
adviser who, with respect to any
registered investment company,
makes any recommendations,
participates in the determination
of which recommendation shall be
made, or whose principal function
or duties relate to the
determination of which
recommendation will be made, to any
such investment company; or who, in
connection with his duties, obtains
any information concerning
securities recommendations being
made by such investment adviser to
any registered investment company.
(D) An investment adviser is "primarily
engaged in a business or businesses
other than advising registered
investment companies or other
advisory clients" when, for each of
its most recent three fiscal years
or for the period of time since its
organization, whichever is lesser,
the investment adviser derived, on
an unconsolidated basis, more than
50 percent of (i) its total sales
and revenues, and (ii) its income
(or loss) before income taxes and
extraordinary items, from such
other business or businesses.
- ADVISORY PERSON of a registered investment
company or an investment adviser thereof
means:
(A) Any employee of such company or
investment adviser (or any company
in a control relationship to such
investment company or investment
adviser) who, in connection with
his regular functions or duties,
makes, participates in, or obtains
information regarding the purchase
or sale of a security by a
registered investment company, or
whose functions relate to the
making of any recommendation with
respect to such purchases or sales;
and
(B) Any natural person in a control
relationship to such company or
investment adviser who obtains
information concerning
recommendations made to such
company with regard to the purchase
or sale of a security.
- APPROVAL - written consent or written notice
of non-objection.
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- BENEFICIAL OWNERSHIP - The definition that
follows conforms to interpretations of the
Securities and Exchange Commission on this
matter. Because a determination of
beneficial ownership requires a detailed
analysis of personal financial circumstances
that are subject to change, Corporate
Compliance ordinarily will not advise
employees on this definition. It is the
responsibility of each employee to read the
definition and based on that definition,
determine whether he/she is the beneficial
owner of an account. If the employee
determines that he/she is not a beneficial
owner of an account and Corporate Compliance
becomes aware of the existence of the
account, the employee will be responsible
for justifying his/her determination.
Securities owned of record or held in the
employee's name are generally considered to be
beneficially owned by the employee.
Securities held in the name of any other person
are deemed to be beneficially owned by the
employee if by reason of any contract,
understanding, relationship, agreement or other
arrangement, the employee obtains therefrom
benefits power to vote, or to direct the
disposition of, such securities. Beneficial
ownership includes securities held by others for
the employee's benefit (regardless of record
ownership), e.g., securities held for the employee
or members of the employee's immediate family,
defined below, by agents, custodians, brokers,
trustees, executors or other administrators;
securities owned by the employee, but which have
not been transferred into the employee's name on
the books of the company; securities which the
employee has pledged; or securities owned by a
corporation that should be regarded as the
employee's personal holding corporation. As a
natural person, beneficial ownership is deemed to
include securities held in the name or for the
benefit of the employee's immediate family, which
includes the employee's spouse, the employee's
minor children and stepchildren and the employee's
relatives or the relatives of the employee's
spouse who are sharing the employee's home, unless
because of countervailing circumstances, the
employee does not enjoy benefits substantially
equivalent to those of ownership. Benefits
substantially equivalent to ownership include, for
example, application of the income derived from
such securities to maintain a common home, meeting
expenses that such person otherwise would meet
from other sources, and the ability to exercise a
controlling influence over the purchase, sale or
voting of such securities. An employee is also
deemed the beneficial owner of securities held in
the name of some other person, even though the
employee does not obtain benefits of ownership, if
the employee can vest or revest title in himself
at once, or at some future time.
In addition, a person will be deemed the
beneficial owner of a security if he has the
right to acquire beneficial ownership of such
security at any time (within 60 days) including
but not limited to any right to acquire: (1)
through the exercise of any option, warrant or
right; (2) through the conversion of a security;
or (3) pursuant to the power to revoke a trust,
nondiscretionary account or similar arrangement.
With respect to ownership of securities held in
trust, beneficial ownership includes ownership of
securities as a trustee in instances where either
the employee as trustee or a member of the
employee's "immediate family" has a vested
interest in the income or corpus of the trust, the
ownership by the employee of a vested beneficial
interest in the trust and the ownership of
securities as a settlor of a trust in which the
employee as the settlor has the power to revoke
the trust without obtaining the consent of the
beneficiaries. Certain exemptions to these trust
beneficial ownership rules exist, including an
exemption for instances where beneficial ownership
is imposed solely by reason of the employee being
settlor or beneficiary of the securities held in
trust and the ownership, acquisition and
disposition of such securities by the trust is
made without the employee's prior approval as
settlor or beneficiary. "Immediate family" of an
employee as trustee means the employee's son or
daughter (including any legally adopted children)
or any descendant of either, the employee's
stepson or stepdaughter, the employee's father or
mother or any ancestor of either, the employee's
stepfather or stepmother and the employee's
spouse.
To the extent that stockholders of a company use
it as a personal trading or investment medium and
the company has no other substantial business,
stockholders are regarded as beneficial owners, to
the extent of their respective interests, of the
stock thus invested or traded in. A general
partner in a partnership is considered to have
indirect beneficial ownership in the securities
held by the partnership to the extent of his pro
rata interest in the partnership. Indirect
beneficial ownership is not, however, considered
to exist solely by reason of an indirect interest
in portfolio securities held by any holding
company registered under the Public Utility
Holding Company Act of 1935, a pension or
retirement plan holding securities of an issuer
whose employees generally are beneficiaries of the
plan and a business trust with over 25
beneficiaries.
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Any person who, directly or indirectly, creates or
uses a trust, proxy, power of attorney, pooling
arrangement or any other contract, arrangement or
device with the purpose or effect of divesting
such person of beneficial ownership as part of a
plan or scheme to evade the reporting requirements
of the Securities Exchange Act of 1934 shall be
deemed the beneficial owner of such security.
The final determination of beneficial ownership is
a question to be determined in light of the facts
of a particular case. Thus, while the employee may
include security holdings of other members of his
family, the employee may nonetheless disclaim
beneficial ownership of such securities.
- "CHINESE WALL" POLICY - procedures designed
to restrict the flow of information within
Mellon from units or individuals who are
likely to receive material nonpublic
information to units or individuals who trade
in securities or provide investment advice.
- DIRECT FAMILY RELATION - employee's husband,
wife, father, mother, brother, sister,
daughter or son. Includes the preceding plus,
where appropriate, the following
prefixes/suffix: grand-, step-, foster-,
half- and -in-law.
- DISCRETIONARY TRADING ACCOUNT - an account
over which the employee has no direct or
indirect control over the investment decision
making process.
- EMPLOYEE - any employee of Mellon Financial
Corporation or its more-than-50%-owned direct
or indirect subsidiaries; includes all
full-time, part-time, benefited and
non-benefited, exempt and non-exempt,
domestic and international employees; does
not include consultants and contract or
temporary employees.
- EXEMPT SECURITIES - Exempt Securities are
defined as:
- direct obligations of the government of
the United States;
- high quality short-term debt
instruments;
- bankers' acceptances;
- bank certificates of deposit and time
deposits;
- commercial paper;
- repurchase agreements;
- securities issued by open-end investment
companies;
- FAMILY RELATION - see direct family relation.
- GENERAL COUNSEL - General Counsel of Mellon
Financial Corporation or any person to whom
relevant authority is delegated by the
General Counsel.
- INDEX FUND - an investment company or managed
portfolio which contains securities of an
index in proportions designed to replicate
the return of the index.
- INITIAL PUBLIC OFFERING (IPO) - the first
offering of a company's securities to the
public through an allocation by the
underwriter.
- INVESTMENT CLUB - is a membership
organization where investors make joint
decisions on which securities to buy or
sell. The securities are generally held in
the name of the investment club. Since each
member of an investment club participates in
the investment decision making process,
Insider Risk Employees, Investment Employees
and Access Decision Makers belonging to such
investment clubs must preclear and report
the securities transactions contemplated by
such investment clubs. In contrast, a
private investment company is an
organization where the investor invests
his/her money, but has no direct control
over the way his/her money is invested.
Insider Risk Employees, Investment Employees
and Access Decision Makers investing in such
a private investment company are not
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required to preclear any of the securities
transactions made by the private investment
company. Insider Risk Employees, Investment
Employees and Access Decision Makers are
required to report their investment in a
private investment company to the Manager of
Corporate Compliance and certify to the
Manager of Corporate Compliance that they
have no direct control over the way their
money is invested.
- INVESTMENT COMPANY - a company that issues
securities that represent an undivided
interest in the net assets held by the
company. Mutual funds are investment
companies that issue and sell redeemable
securities representing an undivided interest
in the net assets of the company.
- INVESTMENT ETHICS COMMITTEE is composed of
investment, legal, compliance, and audit
management representatives of Mellon and its
affiliates. The members of the Investment
Ethics Committee are:
President and Chief Investment Officer of
The Dreyfus Corporation (Committee Chair)
General Counsel, Mellon Financial
Corporation
Chief Risk Management Officer, Mellon
Trust
Manager of Corporate Compliance, Mellon
Financial Corporation
Corporate Chief Auditor, Mellon
Financial Corporation
Chief Investment Officer, Mellon Private
Asset Management
Executive Officer of a Mellon investment
adviser (rotating membership)
The Committee has oversight of issues related
to personal securities trading and investment
activity by Access Decision Makers.
- MANAGER OF CORPORATE COMPLIANCE - the
employee within the Audit and Risk Review
Department of Mellon Financial Corporation
who is responsible for administering the
Securities Trading Policy, or any person to
whom relevant authority is delegated by the
Manager of Corporate Compliance.
- MELLON - Mellon Financial Corporation and all
of its direct and indirect subsidiaries.
- OPTION - a security which gives the investor
the right, but not the obligation, to buy or
sell a specific security at a specified price
within a specified time. For purposes of
compliance with the Policy, any Mellon
employee who buys/sells an option, is deemed
to have purchased/sold the underlying
security when the option was purchased/sold.
Four combinations are possible as described
below.
- Call Options
If a Mellon employee buys a call
option, the employee is
considered to have purchased
the underlying security on
the date the option was
purchased.
If a Mellon employee sells a
call option, the employee is
considered to have sold the
underlying security on the
date the option was sold.
- Put Options
If a Mellon employee buys a put
option, the employee is
considered to have sold the
underlying security on the
date the option was
purchased.
If a Mellon employee sells a put
option, the employee is
considered to have bought the
underlying security on the
date the option was sold.
Below is a table describing the above:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Transaction Type
------------------------------------------------------------------------------------------------------
Option Type Buy Sale
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Put Sale of Underlying Security Purchase of Underlying Security
------------------------------------------------------------------------------------------------------
Call Purchase of Underlying Security Sale of Underlying Security
------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 74
- PRECLEARANCE COMPLIANCE OFFICER - a person
designated by the Manager of Corporate
Compliance and/or the Investment Ethics
Committee to administer, among other things,
employees' preclearance requests for a
specific business unit.
- PRIVATE PLACEMENT - an offering of securities
that is exempt from registration under the
Securities Act of 1933 because it does not
constitute a public offering. Includes
limited partnerships.
- SENIOR MANAGEMENT COMMITTEE - the Senior
Management Committee of Mellon Financial
Corporation.
- SHORT SALE - the sale of a security that is
not owned by the seller at the time of the
trade.
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<PAGE> 75
EXHIBIT A - SAMPLE INSTRUCTION LETTER TO BROKER
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted above,
please be advised that the Compliance Department of my employer should be noted
as an "Interested Party" with respect to my accounts. They should, therefore, be
sent copies of all trade confirmations and account statements relating to my
account.
Please send the requested documentation ensuring the account holder's name
appears on all correspondence to:
<TABLE>
<CAPTION>
<S> <C> <C>
Manager, Corporate Compliance Preclearance Compliance Officer
Mellon Bank or (obtain address from your
PO Box 3130 Pittsburgh, PA. designated Preclearance
15230-3130 Compliance Officer)
</TABLE>
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Manager, Corporate Compliance (151-4340) or Preclearance Compliance Officer
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<PAGE> 76
INTRODUCTION The Securities Trading Policy (the "Policy") is
designed to reinforce the reputation for integrity
of The Dreyfus Corporation and its subsidiaries
(collectively, "Dreyfus") by avoiding even the
appearance of impropriety in the conduct of their
businesses. The Policy sets forth procedures and
limitations which govern the personal securities
transactions of every Dreyfus employee.
SPECIAL EDITION This edition of the Policy has been prepared
specifically for Nonmanagement Board Members of
Dreyfus and the investment companies advised
by Dreyfus (each a "Fund").
NONMANAGEMENT BOARD MEMBER You are considered to be a Nonmanagement Board
Member if you are:
- a director of Dreyfus who is not also an
officer or employee of Dreyfus ("Dreyfus
Board Member"); or
- a director or trustee of any Fund who is not
also an officer or employee of Dreyfus
("Mutual Fund Board Member").
INDEPENDENT MUTUAL FUND The term "Independent Mutual Fund Board Member"
BOARD MEMBER means those Mutual Fund Board Members who are not
deemed "interested persons" of their Fund(s),
as defined by the Investment Company Act
of 1940, as amended.
STANDARDS OF CONDUCT FOR Outside Activities - Mutual Fund Board Members are
NONMANAGEMENT BOARD MEMBERS prohibited from accepting nomination or serving as
a director, trustee or managing general partner of
an investment company not advised by Dreyfus, or
accepting employment with or acting as a
consultant to any person acting as a registered
investment adviser to an investment company,
without the express prior approval of the board of
directors/trustees of the pertinent Fund(s) for
which the Mutual Fund Board Member serves as a
director/trustee. In any such circumstance,
management of Dreyfus must be given advance notice
by the Mutual Fund Board Member of his/her request
in order to allow management to provide its input,
if any, for the relevant Fund board of
directors/trustees' consideration.
- Dreyfus Board Members are prohibited from
accepting nomination or serving as a
director, trustee or managing general partner
of an investment company not advised by
Dreyfus, or accepting employment with or
acting as a consultant to any person acting
as a registered investment adviser to an
investment company, without Dreyfus's express
prior approval.
- Independent Mutual Fund Board Members are
prohibited from owning Mellon securities
(since that would destroy his or her
independent status).
- Nonmanagement Board Members are prohibited
from buying or selling Mellon's publicly
traded securities during a blackout period,
which begins the 16th day of the last month
of each calendar quarter and ends three
business days after Mellon publicly announces
the financial results for that quarter.
INSIDER TRADING AND TIPPING Federal securities laws generally prohibit the
trading of securities while in possession of
"material nonpublic" information regarding the
issuer of those securities (insider trading). Any
person who passes along material nonpublic
information upon which a trade is based (tipping)
may also be liable.
Information is "material" if there is a
substantial likelihood that a reasonable investor
would consider it important in deciding whether to
buy, sell or hold securities. Obviously,
information that would affect the market price of
a security would be material. Examples of
information that might be material include:
- a proposal or agreement for a merger,
acquisition or divestiture, or for the sale
or purchase of substantial assets;
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<PAGE> 77
- tender offers, which are often material for
the party making the tender offer as well as
for the issuer of the securities for which
the tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity
problems;
- defaults under agreements or actions by
creditors, customers or suppliers relating
to a company's credit standing;
- earnings and other financial information,
such as large or unusual write-offs,
write-downs, profits or losses;
- pending discoveries or developments, such as
new products, sources of materials, patents,
processes, inventions or discoveries of
mineral deposits;
- a proposal or agreement concerning a
financial restructuring;
- a proposal to issue or redeem securities, or
a development with respect to a pending
issuance or redemption of securities;
- a significant expansion or contraction of
operations;
- information about major contracts or
increases or decreases in orders;
- the institution of, or a development in,
litigation or a regulatory proceeding;
- developments regarding a company's senior
management;
- information about a company received from a
director of that company; and
- information regarding a company's possible
noncompliance with environmental protection
laws.
This list is not exhaustive. All relevant
circumstances must be considered when determining
whether an item of information is material.
"Nonpublic"- Information about a company is
nonpublic if it is not generally available to the
investing public. Information received under
circumstances indicating that it is not yet in
general circulation and which may be attributable,
directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic
information.
If you obtain material non-public information you
may not trade related securities until you can
refer to some public source to show that the
information is generally available (that is,
available from sources other than inside sources)
and that enough time has passed to allow wide
dissemination of the information, While
information appearing in widely accessible
sources--such as in newspapers or on the
internet--becomes public very soon after
publication, information appearing in less
accessible sources--such as regulatory filings,
may take up to several days to be deemed public.
Similarly, highly complex information might take
longer to become public than would information
that is easily understood by the average investor.
Conflict of Interest--No Nonmanagement Board
Member may recommend a securities transaction for
Mellon, Dreyfus or any Fund without disclosing any
interest he or she has in such securities or
issuer thereof (other than an interest in publicly
traded securities where the total investment is
less than or equal to $25,000), including:
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<PAGE> 78
- any direct or indirect beneficial
ownership of any securities of such
issuer;
- any contemplated transaction by the
Nonmanagement Board Member in such
securities;
- any position with such issuer or its
affiliates; and
- any present or proposed business
relationship between such issuer or its
affiliates and the Nonmanagement Board
Member or any party in which the
Nonmanagement Board Member has a
beneficial ownership interest (see
"Beneficial Ownership" in the Glossary).
Portfolio Information--No Nonmanagement Board
Member may divulge the current portfolio
positions, or current or anticipated portfolio
transactions, programs or studies, of Mellon,
Dreyfus or any Fund, to anyone unless it is
properly within his or her responsibilities as a
Nonmanagement Board Member to do so.
Material Nonpublic Information--No Nonmanagement
Board Member may engage in or recommend any
securities transaction, for his or her own benefit
or for the benefit of others, including Mellon,
Dreyfus or any Fund, while in possession of
material nonpublic information. No Nonmanagement
Board Member may communicate material nonpublic
information to others unless it is properly within
his or her responsibilities as a Nonmanagement
Board Member to do so.
PRECLEARANCE FOR PERSONAL Nonmanagement Board Members are permitted to
SECURITIES TRANSACTIONS engage in personal securities transactions without
obtaining prior approval from the Preclearance
Compliance Officer.
PERSONAL SECURITIES INDEPENDENT MUTUAL FUND BOARD MEMBERS--Any
TRANSACTIONS REPORTS Independent Mutual Fund Board Member, as defined
above, who effects a securities transaction where
he or she knew, or in the ordinary course of
fulfilling his or her official duties should have
known, that during the 15-day period immediately
preceding or after the date of such transaction,
the same security was purchased or sold, or was
being considered for purchase or sale by Dreyfus
(including any Fund or other account managed by
Dreyfus), is required to report such personal
securities transaction. In the event a personal
securities transaction report is required, it must
be submitted to the Preclearance Compliance
Officer not later than ten days after the end of
the calendar quarter in which the transaction to
which the report relates was effected. The report
must include the date of the transaction, the
title and number of shares or principal amount of
the security, the nature of the transaction (e.g.,
purchase, sale or any other type of acquisition or
disposition), the price at which the transaction
was effected and the name of the broker or other
entity with or through whom the transaction was
effected. This reporting requirement can be
satisfied by sending a copy of the confirmation
statement regarding such transaction to the
Preclearance Compliance Officer within the time
period specified.
Dreyfus Board Members and "Interested" Mutual Fund
Board Members--Dreyfus Board Members and Mutual
Fund Board Members who are "interested persons" of
a Fund, as defined by the Investment Company Act
of 1940, are required to report their personal
securities transactions. Personal securities
transaction reports are required to be submitted
to the Preclearance Compliance Officer not later
than ten days after the end of the calendar
quarter in which the transaction to which the
report relates was effected. The report must
include the date of the transaction, the title and
number of shares or principal amount of the
security, the nature of the transaction (e.g.,
purchase, sale or any other type of acquisition or
disposition), the price at which the transaction
was effected and the name of the broker or other
entity with or through whom the transaction was
effected. This reporting requirement can be
satisfied by sending a copy of the confirmation
statement regarding such transaction to the
Preclearance Compliance Officer within the time
period specified.
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<PAGE> 79
EXEMPTIONS FROM REPORTING Notwithstanding the foregoing, securities
REQUIREMENTS transaction reports are not required for the
following transactions purchases or sales of
"Exempt Securities" (see Glossary); purchases or
sales effected in any account over which the
Nonmanagement Board Member has no direct or
indirect control over the investment
decision-making process (i.e., discretionary
trading accounts); transactions which are
non-volitional on the part of the Nonmanagement
Board Member (such as stock dividends);
purchases which are part of an automatic
reinvestment of dividends under a DRIP;
purchases effected upon the exercise of rights
issued by an issuer pro rata to all holders of a
class of securities, to the extent such rights
were acquired from such issuer; and\or
sales of rights acquired from an issuer, as
described above.
CONFIDENTIAL TREATMENT THE PRECLEARANCE COMPLIANCE OFFICER WILL USE HIS
OR HER BEST EFFORTS TO ASSURE THAT ALL PERSONAL
SECURITIES TRANSACTION REPORTS ARE TREATED AS
"PERSONAL AND CONFIDENTIAL." HOWEVER, SUCH
DOCUMENTS WILL BE AVAILABLE FOR INSPECTION BY
APPROPRIATE REGULATORY AGENCIES AND OTHER PARTIES
WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO
EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER THIS
POLICY.
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<PAGE> 80
GLOSSARY
DEFINITIONS - ACCESS PERSON - As defined by Rule 17j-1
under the Investment Company Act of 1940,
"access person" includes, with respect to a
registered investment company or an
investment adviser thereof, any director of
such investment company or investment
adviser. Each Nonmanagement Board Member is
therefore considered an access person of
Dreyfus or their respective Funds.
- APPROVAL - written consent or written notice
of nonobjection.
- BENEFICIAL OWNERSHIP - The definition that
follows conforms to interpretations of the
Securities and Exchange Commission on this
matter. Because a determination of beneficial
ownership requires a detailed analysis of
personal financial circumstances that are
subject to change, Corporate Compliance
ordinarily will not advise Nonmanagement
Board Members ("NBM") on this definition. It
is the responsibility of each NBM to read the
definition, and based on that definition
determine whether he/she is the beneficial
owner of a security.
Securities owned of record or held in the NBM's
name are generally considered to be beneficially
owned by the NBM.
Securities held in the name of any other person
are deemed to be beneficially owned by the NBM if
by reason of any contract, understanding,
relationship, agreement or other arrangement, the
NBM obtains therefrom benefits substantially
equivalent to those of ownership, including the
power to vote, or to direct the disposition of,
such securities. Beneficial ownership includes
securities held by others for the NBM's benefit
(regardless of record ownership), e.g., securities
held for the NBM or members of the NBM's immediate
family, defined below, by agents, custodians,
brokers, trustees, executors or other
administrators; securities owned by the NBM, but
which have not been transferred into the NBM's
name on the books of the company; securities which
the NBM has pledged; or securities owned by a
corporation that should be regarded as the NBM's
personal holding corporation. As a natural person,
beneficial ownership is deemed to include
securities held in the name or for the benefit of
the NBM's immediate family, which includes the
NBM's spouse, the NBM's minor children and
stepchildren and the NBM's relatives or the
relatives of the NBM's spouse who are sharing the
NBM's home, unless because of countervailing
circumstances, the NBM does not enjoy benefits
substantially equivalent to those of ownership.
Benefits substantially equivalent to ownership
include, for example, application of the income
derived from such securities to maintain a common
home, meeting expenses that such person otherwise
would meet from other sources, and the ability to
exercise a controlling influence over the
purchase, sale or voting of such securities. An
NBM is also deemed the beneficial owner of
securities held in the name of some other person
even through the NBM does not obtain benefits of
ownership, if the NBM can vest or revest title in
himself or herself at once, or at some future
time.
In addition, a person will be deemed the
beneficial owner of a security if he/she has the
right to acquire beneficial ownership of such
security at any time (within 60 days) including
but not limited to any right to acquire: (1)
through the exercise of any option, warrant or
right; (2) through the conversion of a security;
or (3) pursuant to the power to revoke a trust,
discretionary account or similar arrangement.
With respect to ownership of securities held in
trust, beneficial ownership includes ownership of
securities as a trustee in instances where either
the NBM as trustee or a member of the NBM's
"immediate family" has a vested interest in the
income or corpus of the trust, the ownership by
the NBM of a vested beneficial interest in the
trust and the ownership of securities as a settlor
of a trust in which the NBM as the settlor has the
power to revoke the trust without obtaining the
consent of the beneficiaries. Certain exemptions
to these trust beneficial ownership rules exist,
including an exemption for instances where
beneficial ownership is imposed solely by reason
of the NBM being settlor or beneficiary of the
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<PAGE> 81
securities held in trust and the ownership,
acquisition and disposition of such securities by
the trust is made without the NBM's prior approval
as settlor or beneficiary. "Immediate family" of
an NBM as trustee means the NBM's son or daughter
(including any legally adopted children or any
descendant of either), the NBM's stepson or
stepdaughter, the NBM's father or mother or any
ancestor of either, the NBM's stepfather or
stepmother and the NBM's spouse.
To the extent that stockholders of a company use
it as a personal trading or investment medium and
the company has no other substantial business,
stockholders are regarded as beneficial owners, to
the extent of their respective interests, of the
stock thus invested or traded in. A general
partner in a partnership is considered to have
indirect beneficial ownership in the securities
held by the partnership to the extent of his pro
rata interest in the partnership. Indirect
beneficial ownership is not, however, considered
to exist solely by reason of an indirect interest
in portfolio securities held by any holding
company registered under the Public Utility
Holding Company Act of 1935, a pension or
retirement plan holding securities of an issuer
whose employees generally are beneficiaries of the
plan, and a business trust with over 25
beneficiaries.
Any person who, directly or indirectly, creates or
uses a trust, proxy, power of attorney, pooling
arrangement or any other contract, arrangement or
device with the purpose or effect of divesting
such person of beneficial ownership as part of a
plan or scheme to evade the reporting requirements
of the Securities Exchange Act of 1934 shall be
deemed the beneficial owner of such security.
The final determination of beneficial ownership is
a question to be determined in light of the facts
of a particular case. Thus, while the NBM may
report the security holdings of other members of
his family, the NBM may nonetheless disclaim
beneficial ownership of such securities.
- DISCRETIONARY TRADING ACCOUNT - an account
over which the NBM has no direct or indirect
control over the investment decision making
process.
- EXEMPT SECURITIES - Exempt Securities are
defined as:
- direct obligations of the
government of the United States;
- bankers' acceptances;
- bank certificates of deposit and
time deposits;
- commercial paper;
- high quality short-term debt
instruments;
- repurchase agreements;
- securities issued by open-end
investment companies.
- INVESTMENT COMPANY - a company that issues
securities that represent an undivided
interest in the net assets held by the
company. Mutual funds are investment
companies that issue and sell redeemable
securities representing an undivided interest
in the net assets of the company.
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<PAGE> 82
- INVESTMENT ETHICS COMMITTEE is composed of
investment, legal, compliance, and audit
management representatives of Mellon and its
affiliates. The members of the Investment
Ethics Committee are:
President and Chief Investment Officer of
The Dreyfus Corporation (Committee Chair)
General Counsel, Mellon Financial
Corporation
Chief Risk Management Officer, Mellon
Trust
Manager of Corporate Compliance, Mellon
Financial Corporation
Corporate Chief Auditor, Mellon
Financial Corporation
Chief Investment/Executive Officers of
two investment departments or affiliates
(rotating memberships)
The Committee has oversight of issues related
to personal securities trading and investment
activity by certain employees, including
those who make recommendations or decisions
regarding the purchase or sale of portfolio
securities by Funds or other managed
accounts.
- MELLON - Mellon Financial Corporation and all
of its direct and indirect subsidiaries.
- PRECLEARANCE COMPLIANCE OFFICER - a person
designated by the Manager of Corporate
Compliance and/or the Investment Ethics
Committee to administer, among other things,
employees' preclearance requests for a
specific business unit.
80
<PAGE> 83
Securities Trading Policy
Dreyfus Nonmanagement Board Member Edition
81
