<PAGE> 1
EXHIBIT (P)(3)
REQUIRED HOLDINGS REPORTS
Section 17(j) of the Investment Company Act prohibits an employee from engaging
in fraudulent activities and violations of security laws. The Securities
Exchange Commission, ("SEC") requires UBS Brinson to institute procedures to
prevent and detect violations of its code of ethics and securities laws. This
rule specifically requires firms to have employees report personal securities
transactions at least quarterly. The SEC has recently adopted amendments to
these rules, which now require organizations to increase the amount of
information about personal securities holdings of their employees. Rule 17j-1
requires all employees to disclose all reportable securities held by employees,
including those acquired before the person became an employee of UBS Brinson.
One purpose of the amendments to the rule is to improve the monitoring performed
by the Compliance Group of potential conflicts of interest. The rule now
requires all employees to complete an Initial Holdings Report and Annual
Holdings Reports thereafter.
Employees will continue to be required to complete the Quarterly Transaction
Report, which requires disclosure of all reportable transactions during the
reporting period, and completion of the Annual Affirmation and Affiliation
Statement.
As part of a new employee's first day orientation, three compliance forms will
be included and distributed with the Human Resources "New Employee Orientation
Program and Package." The three compliance forms are:
1. The Annual Affirmation and Affiliation Statement
2. The Initial Holdings Report
3. The Brokerage Confirmation Forwarding Instructions
The employee is obligated to sign and complete the Affirmation Statement and
Initial Holdings Report within (10) days and return to the Human Resources
Department.
Required Disclosures
--------------------
The Initial Holdings Report and Annual Holdings Report must include the title of
the security, the name of the broker, dealer, or bank where the security is
held, the number of units or shares held, the total principal amount, and the
date of the disclosure. (See attached form)
Applicable Investments and Accounts
-----------------------------------
A reportable security is any interest or instrument commonly known as a
security, whether in the nature of debt or equity, including any stock, bond,
note, debenture, evidence of indebtedness or any participation in or right to
subscribe to or purchase any such interest or instrument. For purposes of this
Policy, the term "security" includes commodity transactions, puts, calls,
futures,
<PAGE> 2
futures contracts and margin account transactions, but does not include: (1) a
deposit or share account in a banking institution, (2) a loan participation, (3)
a letter of credit or other form of bank indebtedness incurred in the ordinary
course of business, (4) currency, (5) any note, draft, bill of exchange or
bankers acceptance which has a maturity at the time of issuance not in excess of
nine months, exclusive of days of grace, or any renewal thereof the maturity of
which is likewise limited, (6) units of a collective investment fund, (7)
interests in a variable amount (master note) (8) direct obligations of any
government or (9) units of open-end, registered investment companies.
Accounts that require disclosure include an employee's personal account or those
investments financed by an employee and any investments over which an employee
exercises discretion or has direct, indirect, or shared influence or control,
including: (1) assets held in partnership, (2) UBS Brinson accounts, (3)
investment clubs or any other joint trading arrangement, (4) investments by the
employee's immediate family sharing the same household (child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
and shall include adoptive relationships), and (5) other similar arrangements.
Review
------
The Human Resources Group will be responsible for the distribution and
collection of new employees' Initial Holdings Reports. The Compliance Group is
responsible for distribution and collection of Annual Holdings Reports.
The Compliance Group is responsible for reviewing all Initial and Annual
Holdings Reports and any investigation or follow-up that may be required.
The compliance review will include:
o verification of completeness
o identification of potential conflicts of interest
o detection of abusive practices
o comparison to quarterly transaction reports to assure accuracy
Potential conflicts of interest will be brought to the attention of the Global
Compliance Manager and the employee for resolution.
Retention of Records and Documents
----------------------------------
The completed forms will be maintained in locked storage by Compliance for a
minimum of (7) years with the first (2) years on site.
<PAGE> 3
UBS Brinson
INTEGRITY POLICY
EFFECTIVE FEBRUARY 4, 2000
---------------------------
<PAGE> 4
UBS BRINSON INTEGRITY POLICY
TABLE OF CONTENTS
PAGE
I. General 1
II. Investments 3
A. General 3
B. Improper Conduct 3
C. Definition of Security 4
D. Personal Securities Trading Procedures 5
E. Initial Public Offerings 5
F. Short-Term Trading 6
G. Frequency 6
H. Disclosure of Personal Interest 6
I. Securities Transactions Reports 6
III. Disclosure Or Use Of Confidential Information 7
A. General 7
B. Insider Trading Policy 7
C. Material Inside Information 8
D. Disclosure 9
E. Procedures for Safeguarding Confidential Information 9
IV. Personal And Business Conduct 10
A. Use of Proper Accounting Procedures 10
B. Individual Expense Guidelines 10
C. Gifts and Bequests 11
D. Use of UBS Brinson Assets 11
E. Dealing with Suppliers 12
F. Use of UBS Brinson Intellectual Property and Proprietary Information 12
G. Candor Among Employees 13
V. Outside Activities 13
A. General 13
B. Reporting of Business Interests and Governmental Positions 14
VI. Observance Of Laws 14
A. General 14
B. Industry Regulators 15
VII. Individual Compliance 15
VIII. AIMR Code Of Ethics And Standards Of Professional Conduct 16
<PAGE> 5
UBS BRINSON INTEGRITY POLICY
I. GENERAL
-------
UBS Brinson(1) has many important assets. Perhaps the most valuable is
its established and unquestioned reputation for integrity. Preserving
this integrity demands the continuing alertness of every employee. Each
employee must avoid any activity or relationship that may reflect
unfavorably on UBS Brinson as a result of a possible conflict of
interest, the appearance of such a conflict, the improper use of
confidential information or the appearance of any impropriety.
Although no written code can take the place of personal integrity, the
following, in addition to common sense and sound judgment, should serve
as a guide to the minimum standards of proper conduct. Any conduct that
violates this policy statement is never acceptable and always
constitutes an activity beyond the scope of the employee's legitimate
employment.
This policy statement is drafted broadly and represents UBS Brinson's
effort not only to meet but also to exceed the requirements of law and
industry practice in a manner consistent with UBS Brinson's high
standard of business conduct.
The Integrity Policy is designed to ensure, among other things, that
all employees conduct their personal securities transactions in keeping
with the following principles:
o The interests of UBS Brinson's clients should be placed first
and foremost;
o All employees should conduct their personal investment
activity in a manner consistent with the law and this
Integrity Policy and in such a manner as to avoid any actual
or potential conflict of interest or any abuse of an
employee's position of trust and responsibility; and
o Employees should not take inappropriate advantage of their
positions.
Attached is a copy of the "Code of Ethics and Standards of Professional
Conduct" issued by the Association for Investment Management and
Research, the terms of which are incorporated within this Integrity
Policy by reference. Local guidelines issued by regulatory agencies or
industry associations that govern conduct of investment professionals
must be followed and are incorporated in this Integrity Policy by
reference. In addition, other policies and practices may be in place in
various locations that govern employee conduct. This policy should be
followed in conjunction with any such guidelines.
In addition to the specific prohibitions on certain personal securities
transactions as set forth herein, this Integrity Policy prohibits all
employees from:
(a) Employing any device, scheme or artifice to defraud
any client or prospective client;
----------------------
(1) In this Policy "UBS Brinson" refers to the UBS Brinson/Brinson Partners Inc.
business unit of the UBS Asset Management Division of UBS AG. The term
"employees" refers to all members of the staff of UBS Brinson.
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<PAGE> 6
(b) Making to any client or prospective client any untrue
statement of a material fact or failing to state to
such client or prospective client a material fact
necessary to make the statements made, in light of
the circumstances under which they are made, not
misleading;
(c) Engaging in any act, practice or course of business
that operates or would operate as a fraud or deceit
upon any client or any prospective client;
(d) Engaging in any fraudulent, deceptive or manipulative
act, practice or course of business with respect to
any client or any prospective client;
(e) Revealing to any other person (except in the normal
course of his or her duties on behalf of a client)
any information regarding investments of or
transactions by any client or the consideration by
any client or UBS Brinson of any securities
transactions; or
(f) Misrepresentation of official or functional position
to any other person.
An employee who has any question about the application of this
Integrity Policy in a particular instance should immediately consult
the applicable UBS Brinson compliance officer. Any violation of these
policies may subject the employee involved to disciplinary action,
including dismissal and possible civil or criminal penalties. In the
case of certain employee activities and circumstances, more specific
policies and regulations may apply.
All employees shall comply with this policy statement in addition to
any local integrity policy that applies to an employee's conduct. This
Integrity Policy applies to all employees of UBS Brinson. For purposes
of this Integrity Policy, the term "employees" includes all consultants
on long-term contracts (defined as in excess of 3 months) who work for
UBS Brinson and who have access to client or investment information.
II. INVESTMENTS
-----------
A. GENERAL
-------
Unless approved by UBS Brinson Compliance, no employee should
make or maintain investments or enter into any transactions,
directly or indirectly, which will create or give the
appearance of creating conflicts of interest between the
employee and UBS Brinson and any client or supplier. In
addition to investments for an employee's personal account,
this policy covers any investments financed by an employee and
any investments over which an employee exercises discretion or
has direct, indirect, or shared influence or control,
including: (1) assets held in partnership, (2) UBS Brinson
accounts, (3) investment clubs or any other joint trading
arrangement, (4) investments by the employee's immediate
family sharing the same household (child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive
relationships), and (5) other similar arrangements. No
employee may have another person do something on his or her
behalf that the employee could not have properly done
personally.
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<PAGE> 7
It is expected that employees of UBS Brinson shall maintain
all personal investment account relationships with UBS AG or a
subsidiary of UBS AG if, at the location at which the employee
works, UBS AG or its subsidiaries offers such service. At
locations where UBS AG or its subsidiaries do not offer such
service, the employee may utilize a third party for his/her
personal investment accounts, but must report the relationship
to UBS Brinson Compliance. Exceptions must be preapproved by
UBS Brinson Compliance. A listing of any non-UBS AG provider
accounts and, where applicable, a statement of holdings, must
be submitted annually to UBS Brinson Compliance.
B. IMPROPER CONDUCT
----------------
It is not possible to enumerate all the circumstances where
potential actions or inactions may be contrary to this
Integrity Policy; however, the following list and your common
sense and sound judgment should serve as a guide for your
conduct. It would be improper for an employee:
1. to make or maintain an investment in the
securities of a company that the employee
knows or should know is being financed by
UBS Brinson, unless the securities of the
company have a broad public market and are
registered on a national securities exchange
or traded in over-the-counter markets;
2. to permit any third party to arrange an
investment for the account of the employee
or to participate in investments arranged,
sponsored or participated in by another
under circumstances that might create, or
give the appearance of creating, a conflict
of interest;
3. to make or maintain an investment in any
corporation or business with which UBS
Brinson has business relationships if the
investment is of such a character (whether
because of the size or value of the
investment or for any other reason) as might
create, or give the appearance of creating a
conflict of interest;
4. to participate in an initial public offering
of any securities of any company, unless
such offering is approved by UBS Brinson
Compliance, which will review the nature of
the offer to ensure that there is no actual
or perceived conflict of interest;
5. to enter into a security transaction when
the employee knows or should know that such
action will anticipate, parallel or counter
any securities transaction of UBS Brinson,
whether UBS Brinson is acting for itself or
in a fiduciary capacity (this would not
apply to exchange traded futures contracts);
6. to enter into a security transaction,
without the prior approval of UBS Brinson
Compliance or its authorized delegates;
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<PAGE> 8
7. to enter into a net short position with
respect to any security held by UBS Brinson
individually or in its fiduciary capacity
(this would not apply to exchange-traded
futures contracts);
8. to enter into any derivative transaction
when a direct transaction in the underlying
security would violate this policy;
9. to engage in any self-dealing or other
transactions benefiting the employee at the
expense of UBS Brinson or its clients; and
10. to engage in personal trading that is out of
proportion with the employee's personal
assets or that might result in financial
hardship or dereliction of duty to clients
or UBS Brinson.
C. DEFINITION OF SECURITY
----------------------
For purposes of this policy, a "security" means any interest
or instrument commonly known as a security, whether in the
nature of debt or equity, including any stock, bond, note,
debenture, evidence of indebtedness or any participation in or
right to subscribe to or purchase any such interest or
instrument. For purposes of this Policy, the term "security"
includes commodity transactions, puts, calls, futures, futures
contracts and margin account transactions, but does not
include: (1) a deposit or share account in a banking
institution, (2) a loan participation, (3) a letter of credit
or other form of bank indebtedness incurred in the ordinary
course of business, (4) currency, (5) any note, draft, bill of
exchange or bankers acceptance which has a maturity at the
time of issuance not in excess of nine months, exclusive of
days of grace, or any renewal thereof the maturity of which is
likewise limited, (6) units of a collective investment fund,
(7) interests in a variable amount (master note), (8) direct
obligations of any government or (9) units of open-end,
registered investment companies.
D. PERSONAL SECURITIES TRADING PROCEDURES
--------------------------------------
Employees may not purchase or sell a prohibited security or
enter into any derivative transactions with respect to a
prohibited security. Prohibited securities include those of
any company with which UBS Brinson or an employee has a
special relationship and/or about which UBS Brinson or an
employee has confidential information as defined below.
Employees are required to obtain approval from UBS Brinson
Compliance or its authorized delegates prior to purchasing or
selling any security, or engaging in a derivative transaction
based on such a security. It is improper for an employee to
enter into any transactions with respect to a security on any
day UBS Brinson has traded, has an open order pending, or
anticipates trading such security on behalf of itself or
clients. All private placements must be approved for purchase
or sale by UBS Brinson Compliance. In circumstances where an
employee knows or should know that UBS Brinson is actively
considering trading a security, the employee may not transact
for his/her personal account.
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<PAGE> 9
Research analysts are prohibited from purchasing or selling
any security, or derivatives of such security, that is covered
by the research analyst unless prior approval has been
obtained from the Director of Research and from UBS Brinson
Compliance. Research analysts are not permitted to effect
personal transactions in securities they cover that are
contrary to their recommendations.
Violation of these procedures will result in disgorgement of
profits realized on improper trades as well as imposition of
appropriate disciplinary action or sanctions.
E. INITIAL PUBLIC OFFERINGS
------------------------
In general, employees will not be permitted to participate in
the initial public offering of any company. Employees must
seek the approval of UBS Brinson Compliance to participate in
an initial public offering of any securities of any company.
Approval may be granted for the privatisation or
demutualization of a major organization which actively
encourages participation by the community as a whole. All
initial public offerings will be viewed on a case by case
basis taking into account any actual or perceived impediment
to clients' portfolios.
If an employee is offered an initial public offering, the
employee is required to seek approval from UBS Brinson
Compliance which will review the nature of the offer relating
to any potential conflicts of interest.
F. SHORT-TERM TRADING
------------------
It is UBS Brinson's policy to discourage short term trading.
Employees must hold securities for a minimum of 30 calendar
days, unless the holding has experienced a loss greater than
or equal to 10% of the capital invested in the security.
Forward trades may only be entered into if they have a
duration of 7 calendar days or more. Exchange traded futures
or options contracts on a currency, a broadly based index,
interest rates, or other broadly based index-like products
must be held for a minimum of 7 calendar days.
This policy applies to trading in all types of securities and
instruments, except where in a particular case UBS Brinson
Compliance has made a specific finding of hardship and no
issue of abuse or conflict is presented (for example, when an
employee's request to sell a security which was purchased
within 30 days prior to the request is prompted by a major
corporate or market event, such as a tender offer, and the
security is not held in client accounts).
G. FREQUENCY
---------
Employees should not trade more than would be reasonable for
an active portfolio management account and are not permitted
more than 20 transactions per month.
H. DISCLOSURE OF PERSONAL INTEREST
-------------------------------
All investment personnel must disclose to their functional
head any position in a security held in their personal
portfolio before participating in investment research or
making an investment decision for a client account regarding
that security or an equivalent or related security. The
functional head will determine if the
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<PAGE> 10
investment decision should be reviewed by investment personnel
with no personal interest in the issuer.
I. SECURITIES TRANSACTIONS REPORTS
-------------------------------
All employees are required to file quarterly a report of
security investment transactions in accordance with this
Integrity Policy. The disclosure statement for each calendar
quarter must be filed no later than 10 days after the end of
the calendar quarter. The quarterly report must be filed even
if there were no transactions during the quarter. If there
were no reportable security transactions, the quarterly report
should be so noted. In addition, all employees must send a
written communication to every broker/dealer with whom they
trade instructing the broker to forward to the designated UBS
Brinson Compliance Officer duplicate trade confirmations for
all trades of securities made by that employee. The designated
UBS Brinson Compliance Officer should receive a copy of all
such written communications sent to broker/dealers.
To simplify reporting, it will not be necessary to report (1)
the purchase or sale of a fractional share, (2) the purchase
of shares with the current dividend under an automatic
dividend reinvestment plan, (3) transactions in UBS stock when
using UBS as an executing broker.
III. DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION
---------------------------------------------
A. GENERAL
-------
The nature of UBS Brinson's business is such that employees
may be in possession of confidential, proprietary or
market-sensitive information, including material non-public
information. All employees have an obligation to respect and
protect the confidential nature of relationships with and
information about former, present and prospective clients,
portfolio companies and suppliers of UBS Brinson. Any such
information that is acquired by employees in the course of UBS
Brinson's business must be kept confidential and may be used
solely for proper purposes of UBS Brinson. Under no
circumstances shall an employee disclose such information to
unauthorized persons or use or assist others in using
confidential information for personal gain. A person is not an
authorized individual simply because that person is an
employee of UBS Brinson.
In addition to information concerning other companies or
persons, confidential information about UBS Brinson or its
employees should not be disclosed to outside persons or to
employees who have no reasonable need for such information in
the course of their duties, nor should any employee use or
assist others in using confidential information for personal
gain or any other reason. This principle applies, among other
matters, to investment policy and strategy, trade secrets,
pricing information (especially non-public fee schedules),
internal policies and financial status.
B. INSIDER TRADING POLICY
----------------------
UBS Brinson prohibits any employee from trading, either
personally or on behalf of others (including any funds and
private accounts managed by UBS Brinson), on
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<PAGE> 11
confidential information and prohibits communication or
dissemination of confidential information to others in
violation of the law. UBS Brinson's policy applies to every
employee and extends to activities within and outside their
duties at UBS Brinson.
It is particularly important that employees not disclose
confidential information to unauthorized persons, or use such
information for personal gain. Any employee of UBS Brinson who
engages in securities transactions while in possession of
confidential information relating to the securities in
question, or who discloses such information to others
(including relatives and friends) who trade in such
securities, subjects himself or herself to severe legal
sanctions including the possibility of dismissal, fines and
imprisonment.
If an employee has any question regarding the confidentiality
of information, the employee should convey the particulars of
such information to, and confer with, UBS Brinson Compliance.
C. MATERIAL INSIDE INFORMATION
---------------------------
The term "material inside information" is not subject to being
precisely defined. Generally, information is considered to be
"inside" or "non-public" information if it has not been
publicly disclosed. Information about a company should be
deemed to be inside information if it is not generally known
to the marketplace. Information considered to be "material" is
any information about a company which, if disclosed, is likely
to affect the market price of the company's securities or to
be considered important by a reasonable investor in deciding
whether or not to trade in those securities. Information
should be presumed "material" if it relates to matters such as
dividend changes, earnings estimates by the company, changes
in the company's previously released earnings estimates,
significant calls for redemption of outstanding securities,
financing, significant developments in relationships with
clients, suppliers, lenders and key personnel, significant new
products or discoveries, major litigation by or against the
company, liquidity or solvency problems, extraordinary
management developments, significant merger or acquisition
proposals, or other similar major events. It includes all
information with respect to a company or its securities that
is not publicly available and might reasonably be expected to
have an effect on the market price of the company's
securities.
While the mere possession of material inside information is
not a violation of securities laws, the improper use of such
information can result in both civil and criminal liability.
The duty to preserve the confidentiality of material
non-public information arises from the anti-fraud provisions
of securities laws. Among other penalties, these laws may
provide for the imposition of criminal and civil sanctions,
including fines and imprisonment.
D. DISCLOSURE
----------
This policy prohibits UBS Brinson employees from disclosing
confidential information to anyone outside UBS Brinson,
including friends and relatives, and from using such
information for personal gain. Generally, however, such
information may be disclosed to legal counsel, accountants and
advisors to UBS
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<PAGE> 12
Brinson who need to know such information and to the extent
disclosure is required by law.
Otherwise, only after there is a full public disclosure of
information by a company, usually by means of an announcement
to the press, is a person who had access to or knew about the
information relieved of the requirement of keeping it strictly
to him or herself. Correspondingly, no trade or recommendation
of any trade in a company's securities can be made on the
basis of such information until the company has made a public
announcement or the information is known generally to the
marketplace.
E. PROCEDURES FOR SAFEGUARDING CONFIDENTIAL INFORMATION
----------------------------------------------------
To ensure that any confidential information that comes to UBS
Brinson in the course of its business is kept confidential,
each employee of UBS Brinson is expected to adhere to the
following policies:
1. Employees should not discuss with or
disclose to any family member or other
non-employee any confidential information or
non-public information about any company,
whether the company is a portfolio company
or one about which UBS Brinson may have
information because of a special transaction
or relationship;
2. Employees should treat as confidential all
non-public documents and materials, whether
generated by a portfolio company, a company
UBS Brinson is investigating, UBS Brinson
itself, a UBS Brinson venture partnership or
another entity with a special relationship
to UBS Brinson. Non-public documents should
be placed in files overnight and not left
unattended on top of desks, in conference
rooms or any work space if they might be
seen by visitors to the office;
3. Employees should not permit visitors to walk
through the offices unattended or to make
use of unoccupied offices which may contain
non-public information. All visitors who
wish to work in UBS Brinson's offices or to
make telephone calls should be directed to
the reception area or an unoccupied
conference room;
4. Employees should not discuss confidential
matters in elevators, airports, restaurants,
public transportation or other places where
people outside UBS Brinson are present.
Similarly, papers relating to confidential
matters should not be displayed in the
elevators or other public places;
5. Employees should hold telephone
conversations regarding confidential matters
privately; and
6. Before trading, employees should think about
whether they may have confidential
information relative to the securities under
consideration. If an employee believes that
he or she may have
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<PAGE> 13
confidential information, the employee
should not purchase or sell the securities
in question. Further, the employee should
not communicate the information inside or
outside UBS Brinson (other than as permitted
above) and should immediately contact the
UBS Brinson Compliance Officer or the UBS
Brinson Chief Operating Officer, who will
review the issue and determine whether
trades may be made and information may be
communicated.
IV. PERSONAL AND BUSINESS CONDUCT
-----------------------------
A. USE OF PROPER ACCOUNTING PROCEDURES
-----------------------------------
All financial transactions engaged in by UBS Brinson for
itself or its clients shall be recorded immediately,
completely and accurately. The knowing entry of false or
inaccurate information in UBS Brinson's accounting and
corporate records or any attempt to circumvent UBS Brinson's
internal accounting controls shall be a violation of this
Integrity Policy. All assets, liabilities, revenues and
expenses shall be properly recorded in the books of UBS
Brinson so as not to conceal any act that might violate the
Integrity Policy.
B. INDIVIDUAL EXPENSE GUIDELINES
-----------------------------
Each employee is expected to be familiar with and to comply
with guidelines established to govern the circumstances in
which employees are entitled to have individual expenses paid
for by UBS Brinson. In general terms, such expenses are
limited to those incurred in the course of developing and
maintaining beneficial business relationships. All such
expenses must be documented. Entertainment of government
officials requires analysis of and sensitivity to a number of
legal prohibitions and, accordingly, should be cleared with
UBS Brinson Compliance.
C. GIFTS AND BEQUESTS
------------------
To avoid even an unwarranted suspicion of impropriety, it is
extremely important that no employee accept any gifts and/or
bequests if such acceptance would leave even the slightest
implication of improper influence. As a general rule, no gifts
or bequests from present or former clients or suppliers, not
related by blood or marriage, may be accepted. If the
circumstances surrounding a particular gift or bequest are
such that its rejection or return might cause embarrassment or
be in bad taste, or if an employee is otherwise in doubt as to
the propriety of accepting a gift or bequest, the employee
should report the gift or bequest and its estimated value in
writing to UBS Brinson Compliance, which will either approve
or disapprove its acceptance or retention by the employee.
It is important to note that employees are not permitted to
borrow from clients or suppliers, except those who engage in
lending in the usual course of their business and then only on
terms offered to others in similar circumstances, without
special treatment as to interest rates, terms, security,
repayment terms and the like. This
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<PAGE> 14
prohibition does not preclude borrowing from anyone related to
the employee by blood or marriage.
D. USE OF UBS BRINSON ASSETS
-------------------------
UBS Brinson provides workstations, telephones, personal
computers and other equipment to assist employees in the
performance of their work. While limited personal use may be
made of these assets, such use must not interfere with UBS
Brinson's business and the privilege for such use may be
terminated at any time. Use of personal computers (including
use on the Internet, intranet and for e-mail) and telephones
may be subject to monitoring for security, supervisory and/or
network management reasons. Employees should not have any
expectation of privacy for their Internet, e-mail or other
personal computer usage.
The use of any employment-related tools (including computer
hardware, software and telephone systems) for other than
legitimate business activities is prohibited. Further, each
employee is obligated to use proper care to prevent
unauthorized access to UBS Brinson's data, the introduction of
any computer related virus or any breach of secured
information lines.
Employees must not:
o Visit Internet sites that contain obscene, lewd,
hateful or other objectionable materials; send or
receive material that is obscene or defamatory or
which is intended to annoy, harass or intimidate
another person;
o Use personal computers or telephones for any illegal
purpose;
o Represent personal opinions as those of UBS Brinson;
o Upload, download or otherwise transmit or receive
commercial software or any copyrighted materials
belonging to parties outside of UBS Brinson or UBS
Brinson itself;
o Reveal or publicize confidential or propriety
information, which includes, but is not limited to:
financial information, new business and product
ideas, marketing strategies and plans, databases and
the information contained therein, client lists,
computer software source codes, computer/network
access codes and business relationships; and
o Examine, change or use another person's files, output
or user name for which they do not have explicit
authorization.
E. DEALING WITH SUPPLIERS
----------------------
Employees should award orders, contracts and commitments to
suppliers of goods and services only after a fair and
impartial evaluation of all relevant information has been
completed. No employee shall accept any bribe, "kick-back" or
similar consideration from a supplier or potential supplier,
nor deal with a supplier solely on the basis of family
relationship, friendship or similar considerations (direct or
indirect ownership or financial relationship). Although a
family or other personal or financial relationship will not
necessarily preclude UBS Brinson from conducting business with
a particular supplier, all such relationships must be
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<PAGE> 15
clearly identified by an employee, to the extent known, to
his/her supervisor prior to the awarding of a supplier
contract.
F. USE OF UBS BRINSON INTELLECTUAL PROPERTY AND PROPRIETARY
--------------------------------------------------------
INFORMATION
-----------
Employees must not use UBS Brinson's intellectual property or
proprietary information such as trade secrets, inventions,
software applications, product plans, business systems and
procedures, manuals and other business data for personal gain.
UBS Brinson's intellectual and proprietary information belongs
to UBS Brinson and shall be kept confidential. Employees shall
not, either during or after their employment, disclose any
such information to the public or to any third party unless
and until such time as the information becomes publicly
available. Particular care should be taken when using
electronic mail (e-mail) and the Internet. These forms of
communication are not guaranteed to be private and they should
not be used for transmitting or receiving confidential
information unless adequate precautions are taken.
G. CANDOR AMONG EMPLOYEES
----------------------
Management must be promptly informed at all times of matters
which might adversely affect the operation or reputation of
UBS Brinson, regardless of the source of such information.
Moreover, complete candor is essential in dealing with UBS
Brinson's independent and internal auditors, investigators,
attorneys and regulatory authorities. It is UBS Brinson policy
that such communications will be treated confidentially, to
the extent possible, and that retaliatory action should not be
taken against employees providing such information in good
faith.
V. OUTSIDE ACTIVITIES
------------------
A. GENERAL
-------
Employees owe their primary duty of loyalty to UBS Brinson and
its clients. Unless approved by UBS Brinson Compliance, no
employee may engage in any outside activity, including the
conduct of another business or acceptance of employment with
another business firm, that may interfere with the employee's
duties to UBS Brinson, may reflect adversely on UBS Brinson,
or may raise actual, potential or perceived conflict of
interest issues.
Except as specifically approved by UBS Brinson Compliance, any
compensation received for services as a director, or the
equivalent of a director, of an entity in which UBS Brinson in
its individual or fiduciary capacity has an equity interest
shall be paid over to UBS Brinson, its clients or charity, as
appropriate.
UBS Brinson is interested in good government and the
sponsorship of nonprofit activities in our society, and wishes
to encourage such participation by employees to the extent it
does not reduce effectiveness in performing duties on behalf
of UBS Brinson, reflect adversely on UBS Brinson, or generate
a potential conflict of interest. If there are any questions
regarding participation in any such activity that does not
meet these standards, no action should be taken without the
proper approval of UBS Brinson Compliance.
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<PAGE> 16
Employees who serve as directors or trustees of nonprofit
organizations must report that involvement to UBS Brinson
Compliance. Any request for UBS Brinson's involvement with
nonprofit organizations should be referred to UBS Brinson
Compliance.
B. REPORTING OF BUSINESS INTERESTS AND GOVERNMENTAL POSITIONS
----------------------------------------------------------
Each employee is required to maintain on file with UBS Brinson
Compliance current information with respect to the employee's
Reportable Business Interests and Reportable Governmental
Positions. This information is to be reported by the filing of
an Employee Affirmation and Affiliation Statement not less
often than annually by each employee. All employees are
required to file an amended statement promptly upon obtaining
or disposing of a Reportable Business Interest or assuming or
relinquishing a Reportable Government Position.
An employee is deemed to have a "Reportable Business Interest"
as to each corporation, association, partnership, firm,
business trust, sole proprietorship or other business entity
(other than UBS Brinson) with respect to which:
1. Such employee together with his/her spouse
and minor children (i) own (whether legally,
equitably or otherwise) in the aggregate 10
percent or more of an equity interest in
such entity (or, in the case of a
corporation, 10 percent or more of the total
outstanding shares of any class of stock),
or (ii) hold, in the aggregate, indebtedness
of such entity which equals or exceeds 5
percent of such entity's outstanding debt;
2. Such employee has the power to direct, or
cause the direction of, the management or
policies of such entity, whether through the
ownership of securities, by contract, by
intercompany relationships, or otherwise; or
3. Such employee or spouse or minor child holds
any of the following positions in such
entity: (i) officer, director, trustee or
general partner; or (ii) employee,
beneficiary, participant or associate with
managerial or policy-making
responsibilities.
An employee is deemed to have a "Reportable
Governmental Position" in each national,
local or other government entity where the
employee serves as a director, agent,
employee, officer, trustee or member of any
governing body or committee.
VI. OBSERVANCE OF LAWS
------------------
A. GENERAL
-------
Each employee has an obligation not to take any action that
might result in a violation of law in any jurisdiction in
which UBS Brinson does business. If there should be any
question as to the legality of any action to be taken in the
name, or
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<PAGE> 17
on behalf, of UBS Brinson, such action should not be taken
without the prior approval of UBS Brinson Compliance.
B. INDUSTRY REGULATORS
-------------------
It is UBS Brinson's policy to cooperate with investigators
seeking information concerning UBS Brinson operations. At the
same time, UBS Brinson is entitled to all the safeguards
provided by law for the benefit of persons under
investigation.
The financial services industry is highly regulated, so there
is often a need for contact with the regulators. If an
employee is contacted by a regulator or investigator by
telephone, letter or home or office visit, the employee may
not, under any circumstances, engage in any discussion or take
any other action in response to the contact prior to notifying
UBS Brinson Compliance. Outside regulators and investigators
should be given access to UBS Brinson records and personnel
only by UBS Brinson Compliance.
VII. INDIVIDUAL COMPLIANCE
---------------------
The Integrity Policy sets forth a standard of conduct required
of all employees of UBS Brinson, regardless of position. UBS
Brinson's management shall monitor and report any violations
of this Integrity Policy. Any employee who is aware of a
suspected violation of this Integrity Policy by other
employees, including management, should immediately report
this information to UBS Brinson Compliance.
This Integrity Policy is designed to foster a working
environment in which employees will be conscious of their
obligation to avoid any actions that could cause embarrassment
to themselves or UBS Brinson by virtue of any actual or
seeming conflict of interest or improper influence. No
employee can be expected to know the identity of every client,
portfolio company and supplier of UBS Brinson. However, if
there is cause for an employee to believe that he or she may
be dealing with a client, portfolio company or supplier in a
transaction described herein, it is that employee's obligation
to make an appropriate inquiry to ascertain whether that is
the circumstance.
Failure to comply with the Integrity Policy or refusal to sign
the Employee Affirmation and Affiliation Statement is
considered a major infraction of our personnel policies, which
can result in termination of employment, in addition to other
potential sanctions, including criminal and civil prosecution.
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<PAGE> 18
ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH
CODE OF ETHICS AND STANDARDS OF PROFESSIONAL CONDUCT
As amended and restated May, 1999
THE CODE OF ETHICs
Members of the Association for Investment Management and Research shall:
o Act with Integrity, competence, dignity, and in an ethical manner when
dealing with the public, clients, prospects, employers, employees, and
fellow members.
o Practice and encourage others to practice in a professional and ethical
manner that will reflect credit on members and their profession.
o Strive to maintain and improve their competence and the competence of
others in the profession.
o Use reasonable care and exercise independent professional judgment.
THE STANDARDS OF PROFESSIONAL CONDUCT
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<PAGE> 19
STANDARD I: FUNDAMENTAL RESPONSIBILITIES
Members shall:
A. Maintain knowledge of and comply with all applicable laws,
rules, and regulations (including AIMR's Code of Ethics and
Standards of Professional Conduct) of any government,
government agency, regulatory organization, licensing agency,
or professional association governing the members'
professional activities.
B. Not knowingly participate or assist in any violation of such
laws, rules, or regulations.
STANDARD II: RELATIONSHIPS WITH AND RESPONSIBILITIES TO THE PROFESSION
A. USE OF PROFESSIONAL DESIGNATIONS.
1. AIMR members may reference their membership only in a
dignified and judicious manner. The use of the reference may
be accompanied by an accurate explanation of the requirements
that have been met to obtain membership in these
organizations.
2. Those who have earned the right to use the Chartered Financial
Analyst designations may use the marks "Chartered Financial
Analyst," or "CFA," and are encouraged to do so, but only in a
proper, dignified and judicious manner. The use of the
designation may be accompanied by an accurate explanation of
the requirements that have been met to obtain the right to use
the designation.
3. Candidate in the CFA Program, as defined in the AIMR Bylaws,
may reference their participation in the CFA Program, but the
reference must clearly state that an individual is a candidate
in the CFA Program and cannot imply that the candidate has
achieved any type of partial designation.
B. PROFESSIONAL MISCONDUCT.
1. Members shall not engage in any professional conduct involving
dishonesty, fraud, deceit, or misrepresentation or commit any
act that reflects adversely on their honesty, trustworthiness,
or professional competence.
2. Members and candidates shall not engage in any conduct or
commit any act that compromises the integrity of the CFA
designation or the integrity or validity of the examinations
leading to the award of the right to use the CFA designation.
C. PROHIBITION AGAINST PLAGIARISM. Members shall not copy or use
in substantially the same form as the original, material
prepared by another without acknowledging and identifying the
name of the author, publisher, or source of such material.
Members may use, without acknowledgment, factual information
published by recognized financial and statistical reporting
services or similar sources.
STANDARD III: RELATIONSHIPS WITH AND RESPONSIBILITIES TO THE EMPLOYER
A. OBLIGATION TO INFORM EMPLOYER OF CODE AND STANDARDS.
Members Shall:
1. Inform their employer in writing, through their direct
supervisor, that they are obligated to comply with the Code
and Standards and are subject to disciplinary sanctions for
violations thereof.
<PAGE> 20
2. Deliver a copy of the Code and Standards to their employer if
the employer does not have a copy.
B. DUTY TO EMPLOYER. Members shall not undertake any independent
practice that could result in compensation or other benefit in
competition with their employer unless they obtain written
consent from both their employer and the persons or entities
for whom they undertake independent practice.
C. DISCLOSURE OF CONFLICTS TO EMPLOYER.
Members Shall:
1. Disclose to their employer all matters, including beneficial
ownership of securities or other investments, that reasonably
could be expected to interfere with their duty to their
employer or ability to make unbiased and objective
recommendations.
2. Comply with any prohibitions on activities imposed by their
employer if a conflict of interest exists.
D. DISCLOSURE OF ADDITIONAL COMPENSATION ARRANGEMENTS.
Members shall disclose to their employer in writing all
monetary compensation or other benefits that they receive for
their services that are in addition to compensation or
benefits conferred by a member's employer.
E. RESPONSIBILITY OF SUPERVISORS. Members with supervisory
responsibility, authority, or the ability to influence the
conduct of others shall exercise reasonable supervision over
those subject to their supervision or authority to prevent any
violation of applicable statutes, regulations, or provisions
of the Code and Standards. In so doing, members are entitled
to rely on reasonable procedures to detect and prevent such
violations.
STANDARD IV: RELATIONSHIPS WITH AND RESPONSIBILITIES TO CLIENTS AND
PROSPECTS
A. INVESTMENT PROCESS.
A.1 REASONABLE BASIS AND REPRESENTATIONS.
Members Shall:
a. Exercise diligence and thoroughness in making investment
recommendations or in taking investment actions.
b. Have a reasonable and adequate basis, supported by appropriate
research and investigation, for such recommendations or
actions.
c. Make reasonable and diligent efforts to avoid any material
misrepresentation in any research report or investment
recommendation.
d. Maintain appropriate records to support the reasonableness of
such recommendations or actions.
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<PAGE> 21
A.2 RESEARCH REPORTS
Members shall:
a. Use reasonable judgment regarding the
inclusion or exclusion of relevant factors
in research reports.
b. Distinguish between facts and opinions in
research reports.
c. Indicate the basic characteristics of the
investment involved when preparing for
public distribution a research report that
is not directly related to a specific
portfolio or client.
A.3 INDEPENDENCE AND OBJECTIVITY. Members shall use reasonable
care and judgment to achieve and maintain independence and
objectivity in making investment recommendations or taking
investment action.
B. INTERACTIONS WITH CLIENTS AND PROSPECTS.
B.1 FIDUCIARY DUTIES. In relationships with clients, members shall
use particular care in determining applicable fiduciary duty
and shall comply with such duty as to those persons and
interests to whom the duty is owed. Members must act for the
benefit of their clients and place their clients' interests
before their own.
B.2 PORTFOLIO INVESTMENT RECOMMENDATIONS AND ACTIONS
Members Shall:
a. Make a reasonable inquiry into a client's financial situation,
investment experience, and investment objectives prior to
making any investment recommendations and shall update this
information as necessary, but no less frequently than
annually, to allow the members to adjust their investment
recommendations to reflect changed circumstances.
b. Consider the appropriateness and suitability of investment
recommendations or actions for each portfolio or client. In
determining appropriateness and suitability, members shall
consider applicable relevant factors, including the needs and
circumstances of the portfolio or client, the basic
characteristics of the investment involved, and the basic
characteristics of the total portfolio. Members shall not make
a recommendation unless they reasonably determine that the
recommendation is suitable to the client's financial
situation, investment experience, and investment objectives.
c. Distinguish between facts and opinions in the presentation of
investment recommendations.
d. Disclose to clients and prospects the basic format and general
principles of the investment processes by which securities are
selected and portfolios are constructed and shall promptly
disclose to clients and prospects any changes that might
significantly affect those processes.
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<PAGE> 22
B.3 FAIR DEALING. Members shall deal fairly and objectively with
all clients and prospects when disseminating investment
recommendations, disseminating material changes in prior
investment recommendations, and taking investment action.
B.4 PRIORITY OF TRANSACTIONS. Transactions for clients and
employers shall have priority over transactions in securities
or other investments of which a member is the beneficial owner
so that such personal transactions do not operate adversely to
their clients' or employer's interests. If members make a
recommendation regarding the purchase or sale of a security or
other investment, they shall give their clients and employer
adequate opportunity to act on their recommendation before
acting on their own behalf. For purposes of the Code and
Standards, a member is a "beneficial owner" if the member has:
a. a direct or indirect pecuniary interest in
the securities;
b. the power to vote or direct the voting of
the shares of the securities or investments;
c. the power to dispose or direct the
disposition of the security or investment.
B.5 PRESERVATION OF CONFIDENTIALITY. Members shall preserve the
confidentiality of information communicated by clients,
prospects, or employers concerning matters within the scope of
the client-member, prospect-member, or employer-member
relationship unless a member receives information concerning
illegal activities on the part of the client, prospect, or
employer.
B.6 PROHIBITION AGAINST MISREPRESENTATION. Members shall not make
any statements, orally or in writing, that misrepresent:
a. The services that they or their firms are
capable of performing;
b. Their qualifications or the qualifications
of their firm;
c. The member's academic or professional
credentials.
Members shall not make or imply, orally or in writing, any
assurances or guarantees regarding any investment except to
communicate accurate information regarding the terms of the
investment instrument and the issuer's obligations under the
instrument.
B.7 DISCLOSURE OF CONFLICTS TO CLIENTS AND PROSPECTS. Members
shall disclose to their clients and prospects all matters,
including beneficial ownership of securities or other
investments, that reasonably could be expected to impair the
members' ability to make unbiased and objective
recommendations.
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<PAGE> 23
B.8 DISCLOSURE OF REFERRAL FEES. Members shall disclose to clients
and prospects any consideration or benefit received by the
member or delivered to others for the recommendation of any
services to the client or prospect.
STANDARD V: RELATIONSHIPS WITH AND RESPONSIBILITIES TO THE PUBLIC
A. PROHIBITION AGAINST USE OF MATERIAL NONPUBLIC INFORMATION.
Members who possess material nonpublic information related to
the value of a security shall not trade or cause others to
trade in that security if such trading would breach a duty or
if the information was misappropriated or relates to a tender
offer. If members receive material nonpublic information in
confidence, they shall not breach that confidence by trading
or causing others to trade in securities to which such
information relates. Members shall make reasonable efforts to
achieve public dissemination of material nonpublic information
disclosed in breach of a duty.
B. PERFORMANCE PRESENTATION
1. Members shall not make any statements, orally or in writing,
that misrepresent the investment performance that they or
their firms have accomplished or can reasonably be expected to
achieve.
2. If members communicate individual or firm performance
information directly or indirectly to clients or prospective
clients, or in a manner intended to be received by clients or
prospective clients, members shall make every reasonable
effort to assure that such performance information is a fair,
accurate, and complete presentation of such performance.
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