<PAGE> 1
EXHIBIT 23(p)(ii)
CODE OF CONDUCT
All of us within the Capital organization are responsible for maintaining the
very highest ethical standards when conducting business. In keeping with these
standards, we must never allow our own interests to be placed ahead of our
shareholders' and clients' interests.
Over the years we have earned a reputation for the highest integrity. Regardless
of lesser standards that may be followed through business or community custom,
we must observe exemplary standards of honesty and integrity.
REPORTING VIOLATIONS
If you know of any violation of our Code of Conduct, you have a
responsibility to report it. Deviations from controls or procedures that
safeguard the company, including the assets of shareholders and clients,
should also be reported.
You can report confidentially to:
- Your manager or department head
- CGC Audit Committee:
Wally Stern -- Chairman
Donnalisa Barnum
David Beevers
Jim Brown
Larry P. Clemmensen
Roberta Conroy
Bill Hurt -- (emeritus)
Sonny Kamm
Mike Kerr
Victor Kohn
John McLaughlin
Don O'Neal
Tom Rowland
John Smet
Antonio Vegezzi
Shaw Wagener
Kelly Webb
- Mike Downer or any other lawyer in the CGC Legal Group
- Don Wolfe of Deloitte & Touche LLP (CGC's auditors).
CGC GIFTS POLICY -- CONFLICTS OF INTEREST
A conflict of interest occurs when the private interests of associates
interfere or could potentially interfere with their responsibilities at
work. Associates must not place themselves or the company in a position of
actual or potential conflict. Associates may not accept gifts worth more
than $100, excessive business entertainment, loans, or anything else
involving personal gain from those who conduct business with the company. In
addition, a business entertainment event exceeding $200 in value should not
be accepted unless the associate
<PAGE> 2
receives permission from the Gifts Policy Committee.
REPORTING-- Although the limitations on accepting gifts applies to all
associates as described above, some associates will be asked to fill out
quarterly reports. If you receive a reporting form, you must report any gift
exceeding $50 (although it is recommended that you report all gifts
received) and business entertainment in which an event exceeds $75.
GIFTS POLICY COMMITTEE
The Gifts Policy Committee oversees administration of and compliance with
the Policy.
INSIDER TRADING
Antifraud provisions of the federal securities laws generally prohibit
persons while in possession of material nonpublic information from trading
on or communicating the information to others. Sanctions for violations can
include civil injunctions, permanent bars from the securities industry,
civil penalties up to three times the profits made or losses avoided,
criminal fines and jail sentences.
While investment research analysts are most likely to come in contact with
material nonpublic information, the rules (and sanctions) in this area apply
to all CGC associates and extend to activities both within and outside each
associate's duties.
PERSONAL INVESTING POLICY
As an associate of the Capital Group companies, you may have access to
confidential information. This places you in a position of special trust.
You are associated with a group of companies that is responsible for the
management of many billions of dollars belonging to mutual fund shareholders
and other clients. The law, ethics and our own policy place a heavy burden
on all of us to ensure that the highest standards of honesty and integrity
are maintained at all times.
There are several rules that must be followed to avoid possible conflicts of
interest in personal securities transactions.
ALL ASSOCIATES
Information regarding proposed or partially completed plans by CGC companies
to buy or sell specific securities must not be divulged to outsiders.
Favors or preferential treatment from stockbrokers may not be accepted.
Associates may not subscribe to ANY initial public offering (IPO).
Generally, this prohibition applies to spouses of associates and any family
member residing in the same household. However, an associate may request
that the Personal Investing Committee consider granting an
<PAGE> 3
exception under special circumstances.
COVERED PERSONS
Associates who have access to investment information in connection with
their regular duties are generally considered "covered persons." If you
receive a quarterly personal securities transactions report form, you are a
covered person. You should take the time to review this policy, as ongoing
interpretations of the policy will be explained therein.
Covered persons must conduct their personal securities transactions in such
a way that they do not conflict with the interests of the funds and client
accounts. This policy also includes securities transactions of family
members living in the covered person's household and any trust or
custodianship for which the associate is trustee or custodian. A conflict
may occur if you, a family member in the same household, a trust or
custodianship for which you are trustee or custodian have a transaction in a
security when the funds or client accounts are considering or concluding a
transaction in the same security.
Additional rules apply to "investment personnel" including portfolio
counselors/managers, research analysts, traders, portfolio control
associates, and investment administration personnel (see below).
PRE-CLEARANCE OF SECURITIES TRANSACTIONS
Before buying or selling securities, covered persons must check with the CGC
Legal Group based in LAO. (You will generally receive a response within one
business day.) Unless a shorter period is specified, clearance is good for
two trading days (including the day you check). If you have not executed
your transaction within this period, you must again pre-clear your
transaction.
Covered persons must PROMPTLY submit quarterly reports of certain
transactions. Transactions of securities (including fixed-income securities)
or options (see below) must be pre-cleared as described above and reported
except for: open-end investment companies (mutual funds); money market
instruments with maturities of one year or less; direct obligations of the
U.S. Government, bankers' acceptances, CDs or other commercial paper;
commodities; and options or futures on broad-based indices. Covered persons
must also report transactions made by family members in their household and
by those for which they are a trustee or custodian. NOTE THAT INVESTMENTS IN
PRIVATE PLACEMENTS AND VENTURE CAPITAL PARTNERSHIPS ARE ALSO SUBJECT TO
PRECLEARANCE AND REPORTING. Reporting forms will be supplied at the
appropriate times AND MUST BE SUBMITTED BY THE DATE INDICATED ON THE FORM
In addition, the following transactions must be reported but need not have
been pre-cleared: gifts or bequests (either receiving or giving) of
securities MUST be reported (sales of securities received as a gift MUST be
both precleared and reported); transactions in debt instruments rated "A" or
above by at least one national rating service; sales pursuant to tender
offers; and dividend reinvestment plan purchases (provided the purchase
pursuant to such plan is made with dividend proceeds only).
PERSONAL INVESTING SHOULD BE VIEWED AS A PRIVILEGE, NOT A RIGHT. AS SUCH,
LIMITATIONS MAY BE
<PAGE> 4
PLACED ON THE NUMBER OF PRE-CLEARANCES AND/OR TRANSACTIONS AS DEEMED
APPROPRIATE BY THE PERSONAL INVESTING COMMITTEE.
BROKERAGE ACCOUNTS
Covered persons should inform their stockbrokers that they are employed by
an investment adviser, trust company or affiliate of either. U.S. brokers
are subject to certain rules designed to prevent favoritism toward such
accounts. Associates may not accept negotiated commission rates which they
believe may be more favorable than the broker grants to accounts with
similar characteristics. In addition, covered persons must direct their
brokers to send duplicate confirmations and copies of all periodic
statements on a timely basis to The Legal Group of The Capital Group
Companies, Inc. ALL DOCUMENTS RECEIVED ARE KEPT STRICTLY CONFIDENTIAL.
[If extraneous information is included on an associate's statements (e.g.,
checking account information or other information that is not subject to the
policy), the associate might want to establish a separate account solely for
transactions subject to the policy.]
ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS
Covered persons will be required to disclose all personal securities
holdings upon commencement of employment (or upon becoming a covered person)
and thereafter on an annual basis. Reporting forms will be supplied for this
purpose.
ANNUAL RECERTIFICATION
All access persons will be required to certify annually that they have read
and understood the Personal Investing Policy and recognize that they are
subject thereto.
ADDITIONAL RULES FOR INVESTMENT PERSONNEL
DISCLOSURE OF OWNERSHIP OF RECOMMENDED SECURITIES-- Ownership of securities
that are held professionally as well as personally will be reviewed on a
periodic basis by the Legal Group and may also be reviewed by the applicable
Management Committee and/or Investment Committee or Subcommittee. In
addition, to the extent that disclosure has not already been made by the
Legal Group to the applicable Management Committee and/or Investment
Committee or Subcommittee, any associate who is in a position to recommend
the purchase or sale of securities by the fund or client accounts that s/he
personally owns should first disclose such ownership either in writing (in a
company write-up) or orally (when discussing the company at investment
meetings) prior to making a recommendation.(1)
BLACKOUT PERIOD - Investment personnel may not buy or sell a security within
at least seven calendar days before and after a fund or client account that
his or her company manages transacts in that security. Profits resulting
from transactions occurring within this time period are subject to special
review and may be subject to disgorgement.
BAN ON SHORT-TERM TRADING PROFITS -- Investment personnel are prohibited
from profiting from
----------
(1) Note that this disclosure requirement is consistent with both AIMR standards
as well as the ICI Advisory Group Guidelines.
<PAGE> 5
the purchase and sale or sale and purchase of the same (or equivalent)
securities within 60 days. THIS RESTRICTION APPLIES TO THE PURCHASE OF AN
OPTION AND THE EXERCISE OF THE OPTION WITHIN 60 DAYS.
SERVICE AS A DIRECTOR -- Investment personnel must obtain prior
authorization of the investment committee of the appropriate management
company or CGC Management Committee before serving on the board of directors
of publicly traded companies. This can be arranged by calling the LAO Legal
Group.
PERSONAL INVESTING COMMITTEE
Any questions or hardships that result from these policies or requests for
exceptions should be referred to CGC's Personal Investing Committee by
calling the LAO Legal Group.
<PAGE> 6
INTER-OFFICE CORRESPONDENCE
January 1, 2000
TO: Covered Persons
FROM: Personal Investing Policy Committee (c/o CAR - LAO/34th Floor)
SUBJECT: REPORT OF PERSONAL SECURITIES TRANSACTIONS
A. INTRODUCTION
Since you have or may have access to investment information in connection
with your regular duties, you are a "covered person" under the CGC Personal
Investing Policy. A detailed description of the Policy and Questions and
Answers about the Policy is attached.
The purpose of the Policy is to prevent actual conflicts of interest (or
even the appearance of a conflict) between your personal securities
transactions and those of the funds or client accounts. Accordingly, under
the Policy, as a covered person, you must (1) obtain pre-clearance before
you (or an immediate family member residing with you) purchase or sell
securities subject to the Policy; (2) report quarterly all transactions
that were subject to the Policy that you (or an immediate family member
residing with you) engaged in during the quarter; and (3) direct your
broker to send duplicate confirmation and account statements to The Legal
Group of The Capital Group Companies, Inc., P.O. Box 30207, Los Angeles, CA
90030, and (4) provide annually a complete listing of your portfolio
holdings.
The Policy has been adopted pursuant to the requirements of various
regulations including U.S. securities laws and U.K. IMRO regulations, and
even inadvertent failures to comply (such as late submission of reports)
could subject you or the company employing you to various sanctions.
B. REPORTING
You must complete the attached report of your securities transactions,
specifying, among other things, the number of shares and the price at which
each transaction was effected. These reports are, of course, held in
confidence. THE REPORT MUST BE RETURNED EVEN IF YOU DID NOT HAVE ANY
REPORTABLE TRANSACTIONS.
Before completing the report, please read the summary of the Policy and the
Questions and Answers which are attached to this memorandum. YOU SHOULD
REVIEW THESE PERIODICALLY, SINCE CLARIFICATIONS ARE REGULARLY MADE TO THE
POLICY. In addition, a more detailed description of the policy is available
on the CGC web home page.
Your cooperation in returning the report promptly is extremely important.
Please return the completed report to CAR (LAO/34th Floor), unless you are
based in the GVO or the LDO. If you are based in the GVO, please return
your report to SAF. If you are based in the LDO, please return your report
to KXL. Reports are due NO LATER THAN 10 DAYS AFTER CALENDAR QUARTER END.
<PAGE> 7
PERSONAL INVESTING POLICY
I. INTRODUCTION
As you know, The Capital Group Companies ("CGC") have adopted a single
policy on personal investing which applies to all "covered" associates in all
offices. As regulations (for example, those of the U.S. Securities and Exchange
Commission and the U.K.'s Investment Management Regulatory Organization (IMRO))
and industry standards have developed, the policy has been modified to reflect
such developments, and changes also have been applied across all CG companies. A
committee consisting of Alan Berro, Mike Downer, Ida Levine, Lionel Sauvage, and
Brad Vogt oversees the administration of the policy. Bill Hurt serves as adviser
to the Committee. Among other duties, the Committee will review quarterly
reports and consider requests for exceptions (see section VI. below).
Note that for purposes of the policy, all references to transactions or
holdings of "associates" or "covered persons" (including "investment personnel")
in this memo include transactions or holdings of such individuals' immediate
family members (for example, spouses, children and parents) residing in the same
household and any account (for example, a family trust) over which the
individual (or immediate family member) exercises investment discretion or
control. Unless otherwise stated, for purposes of the policy, all securities are
subject to pre-clearance and reporting.
II. GUIDING PRINCIPLES
The following are guiding principles relating to our "conflict of interest"
policies including those relating to personal investing and gifts and
entertainment:
It is important to keep in mind that we must at all times put the interests
of fund shareholders and clients first. Moreover, we should adhere to the
spirit as well as the letter of the law and be vigilant in guarding against
anything that could color our judgment. These policies should help us
maintain our objectivity at all times. However, we recognize the importance
of preserving the ability of associates to invest personally and to foster
business relationships. Accordingly, we believe that these policies should
clearly articulate the organization's expectations and that our standards
should be uniformly enforced. At the same time, the policies should not be
administered so mechanically that their application leads to irrational
results, harms the interests of shareholders and clients, or becomes
unnecessarily intrusive with respect to the personal affairs of associates.
Only with the full support of all associates for the spirit of these
policies can we strike the appropriate balance.
<PAGE> 8
Personal Investing Policy
Page 2
III. DESCRIPTION OF THE PERSONAL INVESTING POLICY
1. INITIAL PUBLIC OFFERINGS
All associates are banned from acquiring ANY securities in an
initial public offering (IPO).
2. PRIVATE PLACEMENTS
All associates must preclear private placement transactions. In
some instances, the matter may be referred to the Personal
Investing Committee and/or the appropriate Investment
Committee(s) or Investment Sub-Committee(s).
In addition, opportunities to acquire a stock that is "limited"
(i.e., a broker-dealer is only given a certain number of shares
to sell and is offering the opportunity to buy) would be subject
to the "Gifts and Entertainment Policy."
3. PRE-CLEARANCE AND REPORTING
Before buying or selling securities, you are required to
preclear the transaction with the CGC Legal Group based in LAO
by calling extension 90000 (213-615-0000).
Transactions will not be permitted in securities on days the
funds or clients are transacting in the security in question. If
the security is owned by any fund or client account at the time
the associate seeks permission to purchase, the security
generally would be subject to AT LEAST A ONE-YEAR HOLDING
PERIOD. Larger transactions may be subject to review and
pre-approval by the Personal Investing Committee. In addition,
in the case of investment personnel, permission to transact will
also be denied if the transaction would violate the seven-day
blackout or short-term profits policies, see Section IV below.
Unless a shorter period is specified, clearance is good for two
trading days (including the day approval is granted). IF YOU
HAVE NOT EXECUTED YOUR TRANSACTION WITHIN THIS PERIOD, YOU MUST
PRECLEAR YOUR TRANSACTION AGAIN.
Covered associates are required to promptly submit quarterly
reports. Transactions of securities (including fixed-income
securities) or options (see below) must be precleared as
described above and reported EXCEPT for: open-end investment
companies (mutual funds); money market instruments with
maturities of one year or less; direct obligations of the U.S.
Government, bankers' acceptances, CDs or other commercial paper;
commodities; and options or futures on broad-based indices or
currencies. NOTE THAT INVESTMENTS IN PRIVATE PLACEMENTS AND
VENTURE CAPITAL PARTNERSHIPS ARE ALSO SUBJECT TO PRE-CLEARANCE
AND REPORTING. You will receive reporting forms each quarter.
In addition, the following transactions must be reported but do
not need to be precleared: gifts or bequests (either receiving
or giving) of securities MUST be reported (sales of securities
received as a gift MUST be both precleared and reported);
transactions in debt instruments rated "A" or above by at least
one national rating service; sales pursuant to tender offers;
and dividend reinvestment plan purchases (provided the purchase
pursuant to such plan is made with dividend proceeds only).
<PAGE> 9
Personal Investing Policy
Page 3
OPTIONS --THE WRITING OF PUTS AND CALLS ON SECURITIES SUBJECT TO
PRE-CLEARANCE IS PROHIBITED. (Note also that "short sales" of
securities - subject to preclearance are prohibited.) Purchases
of put and call options on securities are subject to
preclearance and are governed by the same procedures outlined
above, including preclearance requirements at both the time the
option is purchased and the time the option is exercised. (Be
sure to mention your proposed transaction is in an option when
you call for preclearance.) In addition, OPTIONS that expire in
60 days or less are prohibited, and associates will not be given
permission to exercise an option until more than 60 days after
the purchase date of the option has passed. ALTHOUGH YOU MAY BE
GRANTED PRECLEARANCE AT THE TIME THE OPTION IS PURCHASED, YOU
RUN THE RISK OF NOT BEING GRANTED PERMISSION TO EXERCISE THE
OPTION, AND IT WOULD EXPIRE WORTHLESS. Accordingly, transactions
in options on individual securities are strongly discouraged.
PERSONAL INVESTING SHOULD BE VIEWED AS A PRIVILEGE, NOT A RIGHT.
AS SUCH, LIMITATIONS MAY BE PLACED ON THE NUMBER OF
PRECLEARANCES AND/OR TRANSACTIONS AS DEEMED APPROPRIATE BY THE
PERSONAL INVESTING COMMITTEE.
4. CONFIRMATION AND ACCOUNT STATEMENTS
Covered associates must inform their investment broker-dealers
that they are employed by an investment management organization.
U.S. broker-dealers are subject to certain rules designed to
prevent favoritism toward such accounts. Associates may not
accept negotiated commission rates or any other terms which they
believe may be more favorable than the broker-dealer grants to
accounts with similar characteristics.
In addition, as a covered associate, YOU MUST DIRECT YOUR
BROKER-DEALER(S) TO SEND COPIES OF ALL CONFIRMATION AND ACCOUNT
STATEMENTS FOR ALL NEW OR EXISTING ACCOUNTS ON A TIMELY BASIS to
The Legal Group of The Capital Group Companies, Inc., P.O. Box
30207, Los Angeles, CA 90030.(1) ALL DOCUMENTS RECEIVED IN THIS
POST OFFICE BOX ARE KEPT STRICTLY CONFIDENTIAL. Associates in
the GVO should direct their broker-dealers to send duplicate
copies of their trade confirmations and monthly statements to
the GVO Legal Department, Attn: PB.
If the associate's broker will be sending confirmation
statements for an immediate family member that has a different
last name than the associate, the associate should inform the
Legal Group by calling the preclearance line (extension 90000)
with the name of the individual and the relationship to the
associate.
If extraneous information is included on an associate's
statements (e.g., checking account information or other
information that is not subject to the policy), the associate
might want to establish a separate account solely for
transactions subject to the policy.
----------
(1) You need not submit statements if your account includes only securities
exempt under the policy (for example, mutual funds).
<PAGE> 10
Personal Investing Policy
Page 4
5. DISCLOSURE OF HOLDINGS
All covered associates are required to disclose annually a list
of their portfolio holdings. In addition, new CGC associates
that are covered by the policy (and any associate transferring
into a "covered" position) must submit a list of holdings WITHIN
10 DAYS OF COMMENCING EMPLOYMENT (or transferring to a "covered"
position). A form will be sent to the appropriate associates for
this purpose. Completed forms should be sent to The Legal Group
of The Capital Group Companies, Inc., P.O. Box 30207, Los
Angeles, CA 90030. ALL DOCUMENTS RECEIVED IN THIS POST OFFICE
BOX ARE KEPT STRICTLY CONFIDENTIAL. Associates in the GVO should
forward their Annual Disclosure documents to the GVO Legal
Department, Attn: PB.
6. ANNUAL RECERTIFICATION
All covered associates are required to certify annually that
they have read and understand the code of ethics. Further,
covered associates are required to certify at least annually
that they have complied with the requirements of the code of
ethics and that they have disclosed or reported all personal
securities transactions required to be disclosed or reported
pursuant to the requirements of the code.
7. CERTAIN EXCEPTIONS TO THE POLICY
EXEMPTION FOR SPOUSES "IN THE INVESTMENT BUSINESS" -- Currently,
if an associate's spouse is employed in the investment business,
the associate is asked to sign a statement agreeing not to
discuss specific investment ideas or transactions with his/her
spouse. The spouse's BUSINESS-RELATED securities transactions
then are not subject to preclearance or reporting.
In addition, certain instances may arise in which a spouse's
securities activities are in a gray area between business and
personal (e.g., where the spouse manages money in hedge funds
that include his/her own money, or has retired from active
employment and manages a personal portfolio as an occupation).
On a very limited basis, the "investment business" exemption
from preclearance (but not reporting) may be granted to the
"quasi-business" investment activities of certain spouses. The
Personal Investing Committee is responsible for determining on a
case-by-case basis whether such an exemption should be granted
and will periodically review such exemptions.
IV. ADDITIONAL POLICIES FOR "INVESTMENT PERSONNEL"
1. INVESTMENT PERSONNEL
Unless otherwise specified, the term "investment personnel"
includes: portfolio managers/counselors; research analysts;
traders; associates in investment administration, and associates
in portfolio control.
<PAGE> 11
Personal Investing Policy
Page 5
2. DISCLOSURE OF PERSONAL HOLDINGS PRIOR TO RECOMMENDATION
Ownership of securities that are held professionally as well as
personally will be reviewed on a periodic basis by the Legal
Group and may also be reviewed by the applicable Investment
Subcommittees or CGC Management Committee. In addition, to the
extent that disclosure has not already been made by the Legal
Group to the applicable Investment Subcommittee, any associate
who is in a position to recommend the purchase or sale of
securities by the fund or client accounts that s/he personally
owns should first disclose such ownership either in writing (in
a company write-up) or orally (when discussing the company at
investment meetings) prior to making a recommendation.(2) If you
have questions, you should contact Michele Yang at (213)
486-9001, Mike Downer at (213) 486-9425, or Cheryl Ruff at (213)
486-9970.
3. BLACKOUT PERIODS
Investment personnel may not buy or sell a security during a
period beginning seven calendar days before and ending seven
calendar days after a fund or client account that is managed by
the company(ies) with which the counselor, manager, or analyst
is associated transacts in that security. If a fund or client
account transaction takes place in the seven calendar days
following a precleared purchase by an investment personnel, the
transaction will be reviewed by the Personal Investing Committee
to determine whether disgorgement would be appropriate.
4. BAN ON SHORT-TERM TRADING PROFITS
All investment personnel are prohibited from engaging in
short-term trades (i.e. the purchase and sale, or sale and
purchase, of the same or equivalent "securities" (subject to
preclearance and/or reporting) within 60 calendar days).
5. SERVICE AS A DIRECTOR
All investment personnel must obtain prior authorization of the
Investment Committee or Investment Sub-Committee of the
appropriate management company or CGC Management Committee
before serving on the boards of directors of publicly traded
companies. Also, prior to serving on the board of a private
company investment personnel must notify CAR (ext. 99970), MYY
(ext. 99001), or MD (ext. 99425); in certain circumstances these
matters may be referred to the appropriate management or
investment committee for approval.
In addition, other CGC associates must notify CAR (ext. 99970),
MYY (ext. 99001), or MD (ext. 99425) prior to serving on the
board of a public or private company.
V. PENALTIES FOR VIOLATING THE POLICY
You may be subject to penalties for violating the policy
including failing to preclear, report, submit statements, submit
annual statements of securities holdings, etc. For
----------
(2) Note that this disclosure requirement is consistent with both AIMR standards
as well as the ICI Advisory Group Guidelines.
<PAGE> 12
Personal Investing Policy
Page 6
example, an associate was required to disgorge the entire amount of his
initial investment plus profits for failing to preclear and report even
though he had ultimately come forward and disclosed the failure. In
addition, another fund group recently sanctioned a portfolio manager for
failing to disclose some of his personal securities transactions. The
portfolio manager was required to refrain from personal trading, forfeit
options and bonuses of over $200,000, and refund profits and price
benefits of over $5,000 received from trading in certain accounts.
VI. HARDSHIP EXCEPTIONS
The Personal Investing Committee will consider requests for exceptions
from the terms of the policy in bona fide hardship situations. HOWEVER,
EVEN IF A HARDSHIP EXISTS, SUCH REQUESTS MAY BE DENIED.
VII. SPECIAL RULES FOR IMRO, CIL/CIKK ASSOCIATES, AND SIO ASSOCIATES
1. CIL ASSOCIATES
Written confirmation of each transaction actually completed must
be submitted as soon as possible to the Secretary of the CIL
Compliance Committee (currently VPD) to comply with IMRO
requirements.
2. CIKK ASSOCIATES
If you are an employee of CIKK (a CGC company based in Tokyo),
you may not sell (purchase) securities of an issuer within six
months of a purchase (sale) of the securities. Please call
Parker Simes in the TKO if you have any questions.
3. SIO BASED ASSOCIATES
If you are an associate based in the SIO, please check with
Queenie Chin (QXC) before requesting pre-clearance for any
transactions.
* * * * *
Questions or requests for exceptions should be directed to either Cheryl
Ruff at ext. 99970 or Michele Yang at ext. 99001
<PAGE> 13
QUESTIONS AND ANSWERS ABOUT THE
CGC PERSONAL INVESTING POLICY
SECURITIES NOT HELD IN THE ASSOCIATE'S NAME (family members, trusts, significant
others)
1. Q. Will these requirements apply to securities held in the name of
another individual?
A. Yes. The requirements apply to securities held by any immediate
family member living with you or held in any account over which
such individuals have the power to vote or sell, including trusts
(see Question 18 below for a description of a limited exception
for certain trusts). In addition, the policy also applies to a
significant other living with you if you may be in the position
to benefit from the significant other's transactions.
2. Q. I am a member of an investment club that periodically purchases
and sells securities. Are these transactions subject to the
preclearance and reporting requirements of the policy?
A. Yes. If you are involved in the investment decisions-making
process (e.g., you vote on investment actions taken by the club
or are involved in discussing the merits of a proposed investment
action), those transactions are subject to the preclearance and
reporting requirements of the policy.
CONFIRMATION AND ACCOUNT STATEMENTS
3. Q. I have a single brokerage account that not only contains
securities that are subject to our policy but is also linked to
my personal checking accounts. I would prefer to keep my personal
account information (such as checking) confidential, but if I
send duplicate account statements, the information will be
included. Can I personally send in an edited statement rather
than have my broker send it directly to The Capital Group
Companies?
A. No. Confirmation and account statements are treated with the
strictest confidentiality. However, if you are still concerned,
you may separate the securities which are subject to the policy
into a separate account and only send confirmation and account
statements from that account. Only accounts that do not hold any
instruments that are subject to our policy (such as money market
funds, open-end mutual funds, checking accounts, CDs, etc.) are
exempt from this requirement.
<PAGE> 14
DIFFERENT TYPES OF SECURITIES
4. Q. Transactions in open-end mutual fund shares are exempt from the
preclearance and reporting requirements. Are transactions
involving shares of closed-end funds also exempt?
A. No.
5. Q. Are securities that are not the types of securities that
CRMC-managed funds or CGTC clients generally purchase (e.g.,
start-up companies, limited partnership interests, etc.) subject
to the preclearance and reporting requirements?
A. Yes, all types of securities (except the exempt securities
specifically listed above) are covered by the preclearance and
quarterly reporting requirements.
6. Q. Are investments in hedge funds subject to the preclearance and
reporting requirements of the policy?
A. Investments in some "hedge funds" that operate in a similar
manner to open-end mutual funds are not subject to the
preclearance and reporting requirements of the policy. Please
call CAR (x99970) or MYY (x99001) if you have any questions.
7. Q. Are investments in SPDR's (a long-term unit investment trust
intended to track the price performance and dividend yield of the
S&P 500 index) subject to the preclearance and reporting
requirements of the policy?
A. Investments in SPDR's (which operate in a similar manner to
open-end mutual funds) are not subject to the preclearance and
reporting requirements of the policy. Please call CAR (x99970) or
MYY (x99001) if you have any questions.
8. Q. Are transactions involving bonds subject to the requirements?
A. Yes. (These requirements even apply to bonds issued by non-US
governments.) However, transactions involving bonds rated "A" or
above by at least one national rating service must be reported
but don't have to be precleared.
9. Q. Are payments on account of a maturing bond subject to the
requirements?
A. Such payments would not be considered "purchases" or "sales," and
therefore would not be subject to the preclearance or reporting
requirements. Of course the initial purchase of the bond would
have been subject to both requirements unless specifically
exempted.
2
<PAGE> 15
DIFFERENT TYPES OF TRANSACTIONS
10. Q. Are partial tender offers covered by the requirements?
A. Sales pursuant to tender offers (including partial tender offers)
must be reported but don't have to be cleared in advance.
11. Q. How are dividend reinvestment plans (e.g., for utility stocks)
treated?
A. Your initial purchase of the stock would, of course, be subject
to both preclearance and reporting. After that, purchases of
additional shares through the dividend reinvestment plan
attributable solely to reinvested dividends would need to be
reported but not precleared. Note that some dividend reinvestment
plans permit shareholders to purchase shares directly from the
issuer in amounts exceeding dividends received in a given period.
Such excess purchases pursuant to a reinvestment plan would be
subject to preclearance. Of course, sales of any of your shares
would have to be both precleared and reported.
12. Q. Are put or call options on securities subject to preclearance and
reporting?
A. Yes. Purchases of put and call options are subject to
preclearance requirements at both the time the option is
purchased and the time the option is exercised. The writing of
both puts and calls on securities subject to preclearance is
prohibited. Note, however, that transactions involving options
related to broad-based indices which measure an overall market
such as the stock or bond index as opposed to narrow-based
indices which measure a specific industry or market sector do not
have to be precleared or reported.
13. Q. Are SHORT SALES of securities allowed under the Policy?
A. No. Short sales of securities are prohibited.
14. Q. Are transactions in debt securities that are convertible into
equity securities subject to the policy?
A. Yes. Although transactions in debt securities that are rated "A"
or above by at least one national rating service need only be
reported (but not pre-cleared), if the debt security is
convertible into an equity security, the transaction must be both
precleared and reported.
3
<PAGE> 16
15. Q. How are gifts or bequests treated?
A. Reporting (but not preclearance) is required when you (or an
immediate family member residing with you) give (or receive)
securities as a gift or bequest. Any subsequent sale of
securities received as a gift are subject to preclearance and
reporting requirements.
16. Q. The issuer of securities I own has issued rights permitting me to
purchase additional shares at a predetermined price. Am I
required to preclear and/or report transactions involving these
rights?
A. You may exercise or sell (without exercising) these rights
without preclearance, however the transaction should be reported.
17. Q. A utility company is being privatized, and the right to purchase
the new shares of the company are being offered to the public. Am
I required to preclear and/or report such a transaction?
A. Yes. Such transactions would be subject to preclearance and
reporting. Note, however, that if the offering is considered an
"initial public offering," you will be denied permission to
transact.
OBTAINING EXCEPTIONS TO THE POLICIES (If you feel you qualify for one of the
exceptions described below, you should call CAR at ext. 99970 or MYY at ext.
99001).
18. Q. A family emergency requires the liquidation of securities; are
exceptions ever made for hardship cases?
A. Sometimes. There is no general "emergency" or "hardship"
exception to the requirement that you obtain preclearance, but
the circumstances would be taken into account by the Committee in
determining whether to give you permission to trade.
19. Q. My spouse wants to purchase stock in his employer through an
automatic monthly payroll purchase plan. Are transactions of this
type subject to preclearance?
A. The preclearance requirement still applies, although arrangements
might be made in appropriate cases to give blanket preclearance
to permit enrollment in such a plan. In any event, all such
purchases would have to be reported and any sales of such
securities are still subject to preclearance and reporting.
4
<PAGE> 17
20. Q. My spouse is employed in the investment business. How does CGC's
personal investing policy affect us?
A. If your spouse is in the investment business, we will ask you to
agree in writing not to discuss specific investment ideas or
transactions with your spouse. Your spouse's business-related
securities transactions would then not be subject to preclearance
or reporting. Of course, personal transactions of either you or
your spouse would remain subject to the Policy.
21. Q. I am trustee for a trust which benefits a person who is not
related to me or any immediate family member and I receive no
compensation or other benefits for serving as trustee. Are
transactions that I make as trustee on behalf of this trust
subject to preclearance and reporting requirements?
A. Generally the requirements apply to all securities (including
those held in trust) that you, or any immediate family member
living with you, have the power to vote or sell. However, if
you/any immediate family member living with you are a trustee of
a trust which benefits individual(s) who are not related to
you/or any immediate family member and you/immediate family
member receive no direct or indirect benefits from your service
as trustee (e.g. compensation), the Committee may grant an
exception from the policy for the sale of securities.
22. Q. I have a brokerage account over which my broker has trading
discretion. Are trades made for this account subject to
preclearance and reporting?
A. The mere fact that trading is under the discretion of the broker
does not exclude trades made for the account from preclearance
and reporting. However, if in addition to granting the discretion
to trade to a broker, safeguards are established to ensure that
you have no direct or indirect influence or control over the
account, you might be granted an exception such that trades would
not be subject to preclearance or reporting.
If you have any questions about the Personal Investing Policy or if you wish to
discuss special circumstances relating to a proposed transaction for which you
are requesting preclearance, please call CAR at extension 99970 or MYY at
extension 99001 in the LAO for assistance.
5
<PAGE> 18
REPORT OF PERSONAL SECURITIES TRANSACTIONS FOR THE QUARTER ENDED calendar
quarter end
/ / I have no securities transactions to report
RETURN TO CAR/LAO-34
NO LATER THAN 10 DAYS AFTER
CALENDAR QUARTER END
<TABLE>
<CAPTION>
FOR PURCHASE/SALE TRANSACTIONS
SECURITY NAME
(includes Private Placements, BROKER-DEALER
Venture Capital Partnership INDICATE PRICE/ PRINCIPAL OR BANK
Investments and distributions TRADE PURCHASE DIVIDEND CORP. SHARE AMOUNT RATING THROUGH
from such partnerships) DATE OR SALE REINVEST ACTION QUANTITY (USD) (USD) (if Bond) WHOM EFFECTED
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
OTHER ACQUISITIONS/DISPOSITIONS
SECURITY NAME (Check appropriate box)
(includes Private Placements, VENTURE SECURITIES
Venture Capital Partnership CAPITAL RECEIVED
Investments and distributions STOCK OR GIVEN
from such partnerships) DISTRIB. AS A GIFT QUANTITY
<S> <C> <C> <C>
</TABLE>
REQUIRED CERTIFICATION: I have read and understand The Capital Group Companies'
Code of Conduct which contains the personal investing policy, and understand
that I am subject to its provisions. I have also read and understand that I am
also subject to the provisions of the personal investing policy. The policies
are now available on the CG Web Home page. To access the documents, click on
Code of Ethics. In addition, I have, to the best of my knowledge, reported all
personal securities transactions required to be reported under the policy.
--------------------------------- ---------------------------------
(Please sign) Date
SECURITIES LAWS REQUIRE THAT YOU FILL OUT THIS FORM WITHIN
10 DAYS OF THE END OF THE QUARTER. IF YOUR FORM IS DATED
AFTER 04/10/2000, PLEASE PROVIDE AN EXPLANATION IN THE SPACE
BELOW.
Explanation (if appropriate):
<PAGE> 19
<TABLE>
<CAPTION>
FOR PURCHASE/SALE TRANSACTIONS
SECURITY NAME
(includes Private Placements, BROKER-DEALER
Venture Capital Partnership INDICATE PRICE/ PRINCIPAL OR BANK
Investments and distributions TRADE PURCHASE DIVIDEND CORP. SHARE AMOUNT RATING THROUGH
from such partnerships) DATE OR SALE REINVEST ACTION QUANTITY (USD) (USD) (if Bond) WHOM EFFECTED
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
OTHER ACQUISITIONS/DISPOSITIONS
SECURITY NAME (Check appropriate box)
(includes Private Placements, VENTURE SECURITIES
Venture Capital Partnership CAPITAL RECEIVED
Investments and distributions STOCK OR GIVEN
from such partnerships) DISTRIB. AS A GIFT QUANTITY
<S> <C> <C> <C>
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
FOR PURCHASE/SALE TRANSACTIONS
SECURITY NAME
(includes Private Placements, BROKER-DEALER
Venture Capital Partnership INDICATE PRICE/ PRINCIPAL OR BANK
Investments and distributions TRADE PURCHASE DIVIDEND CORP. SHARE AMOUNT RATING THROUGH
from such partnerships) DATE OR SALE REINVEST ACTION QUANTITY (USD) (USD) (if Bond) WHOM EFFECTED
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
OTHER ACQUISITIONS/DISPOSITIONS
SECURITY NAME (Check appropriate box)
(includes Private Placements, VENTURE SECURITIES
Venture Capital Partnership CAPITAL RECEIVED
Investments and distributions STOCK OR GIVEN
from such partnerships) DISTRIB. AS A GIFT QUANTITY
<S> <C> <C> <C>
</TABLE>
<PAGE> 21
CGC PERSONAL INVESTING POLICY
You are required to report certain securities transactions made during the
quarter. YOU MUST FILE A REPORT (EVEN IF THERE WERE NO TRANSACTIONS) WITHIN 10
DAYS FROM THE END OF EACH CALENDAR QUARTER. These reports are, of course, held
in confidence.
READ THESE INSTRUCTIONS BEFORE COMPLETING THE REPORT:
1. If you had no reportable transactions, check the box above the table on the
form.
2. You must report all transactions or options on securities in an account
over which you (or an immediate family member residing with you) exercised
voting power or investment discretion (these should also have been
pre-cleared) EXCEPT:
- Open-end mutual fund shares (whether or not of The American Funds
Group) or funds with similar characteristics such as certain hedge
funds, SPDR's and Diamonds.
- Shares of CG stock
- Money market instruments
- Direct obligations of the United States or of a U.S. Government agency
or instrumentality - obligations of governments (other than the U.S.
Government) and their agencies and instrumentalities must be reported
and, if rated less than "A", pre-cleared
- Commodities
- Options or futures on broad-based stock indices (e.g., the S & P 500)
- Transactions in accounts over which neither you nor an immediate
family member residing with you has any direct or indirect influence
or control
3. You must report (but need not have pre-cleared):
- Transactions in straight debt instruments rated "A" or above by at
least one national rating service (convertibles and non-US debt
instruments rated below "A" must be pre-cleared)
- Sales pursuant to tender offers
- Dividend reinvestment plan purchases, provided such purchases are
attributed solely to reinvested dividends
- Gifts or bequests of securities (of course, if these securities are
later sold, pre-clearance and reporting requirements will apply)
- Venture Capital distributions (note: the initial investment into
Venture Capital Partnerships is subject to both pre-clearance and
reporting)
1
<PAGE> 22
M E M O R A N D U M
TO: All Associates Subject to The Gifts and Entertainment Policy
FROM: The Gifts and Entertainment Policy Committee
SUBJECT: The CGC Gifts and Entertainment Policy
I. BACKGROUND
The Capital Group Companies ("CGC") Gifts and Entertainment Policy (the
"Policy") requires that you report on a quarterly basis gifts and entertainment
extended or received during the period. The Gifts and Entertainment Committee,
consisting of Ursula Van Almsick, Andy Barth, Dana Howells, Lee Ann Jarrell, Rob
Lovelace, Scott McIntyre, and Bob Winston, has also published the attached
questions and answers to provide additional guidance in connection with the
Policy. Questions regarding the Policy should be directed to Kristine Nishiyama
(ext. 99652), Michele Yang (ext. 99001), or Ken Gorvetzian (ext. 99253).
II. THE POLICY
1. INTRODUCTION
Generally, the Policy prohibits acceptance of any gifts exceeding a
certain dollar amount in value and requires pre-approval of certain business
entertainment. In addition, the Policy now requires quarterly reporting of
certain gifts and entertainment as more fully described below. The Policy is
intended to ensure that gifts and entertainment received by an associate do not
interfere with the associate's judgment. "Gifts" include such items as books,
pens, mugs, food, flowers, etc. that are received by a covered CGC associate
from an outside party due to that party's business relationship (or prospective
or desired business relationship) with CGC. In addition, items extended by a CGC
associate to a third party due to that party's business relationship (or
prospective relationship) with the CGC companies would also constitute a gift
subject to the Policy unless the associate were to be reimbursed by a CGC
company for the cost of such items. Finally, where the opportunity to acquire a
stock is "limited" (i.e., a broker-dealer is allocated a certain number of
shares to sell and is offering the opportunity to buy), the acquisition of the
stock would be considered a gift that is subject to the Policy.
"Entertainment" includes items such as dinners, tickets to plays or
sporting events, golf outings, etc. that are attended by a covered CGC associate
and the party bearing the cost of the event (or a representative) where there is
a business purpose for the CGC associate to attend such an event. In addition,
transportation provided in connection with a research visit that is not paid for
by CGC would also be classified as an entertainment item. If tickets to plays or
sporting events, etc. are given to a covered associate, but the party bearing
the cost of the event (or a representative) does not accompany the covered
associate, the tickets would constitute a gift subject to our policy, not an
entertainment item.
<PAGE> 23
2. LIMITS
a. Gifts
Individual Gifts -- An associate MAY NOT ACCEPT a
gift or group of gifts from (or give a gift or group of gifts
to) any one person or entity exceeding, in aggregate, $100 per
year.
Departmental Gifts -- Items such as food and/or
flowers that exceed $100 in value may be received by a
department (even if the item is delivered to one individual),
provided that the gifts are not repetitive or extravagant AND
the item(s) is (are) shared with the entire department.
Department managers are encouraged to consult with the Legal
Group in LAO regarding gifts that may be considered
extravagant.
b. Entertainment
Tickets -- All covered associates must obtain
permission from their supervisor prior(1) to accepting any
tickets regardless of value (offered as gifts(2) or business
entertainment).
Items in excess of $200 -- A covered associate must
receive approval from the Gifts and Entertainment Policy
Committee (see below) before accepting an entertainment item
in excess of $200. For this purpose, items from the same
source need not be aggregated. Of course, entertainment that
is unduly repetitive or extravagant should not be accepted
regardless of the value. If you believe a business reason
exists for accepting entertainment that costs more than $200,
you are required to raise the issue with Kristine Nishiyama,
Michele Yang or Ken Gorvetzian who will discuss the matter
with the Committee.
c. Determining Cost
For purposes of the Policy, "replacement value" shall
be the value of the gift/ entertainment. For example, if a
ticket to a football game has a face value of $75 but could
not be acquired on game day for less than $200, the value of
the ticket is considered to be $200 not $75. On the other
hand, if a charity dinner costs $200 a plate but the dinner
itself is worth no more than $50, the value of the dinner is
considered to be $50. Estimates of value should be
conservative, and if you are in doubt as to whether the value
of an item exceeds a limit, assume that it does.
(1) The Committee realizes that there may be some situations where it will be
impossible for associates to obtain permission from their supervisor before
accepting a ticket(s) (i.e., the invitation is extended on the same day of the
event and your supervisor is unavailable for consultation). In these situations,
an associate may independently decide that it is appropriate to accept the
ticket(s), but must inform his/her supervisor and, if necessary the Committee,
about the ticket(s) immediately after the event.
(2) Note, that it is generally preferred that associates only accept a ticket(s)
if the person providing the ticket(s) will be accompanying the associate.
<PAGE> 24
3. REPORTING
You are required to report each quarter gifts in excess of
$50, including all gifts (regardless of value) received from or given to the
same source during a calendar year where the aggregate value of those gifts
exceeds $50. Department gifts should be reported by department managers. In
addition, you are required to report each quarter all tickets accepted (either
as gifts or business entertainment) and any other item of entertainment that
exceeds $75 in value. The Committee will forward a copy of your completed report
to the individual responsible for signing your expense reimbursement forms. (The
Committee recommends that for your convenience you report all
gifts/entertainment.)
4. SOLICITING DONATIONS, GIFTS, OR ENTERTAINMENT FROM OUTSIDE
SOURCES
The same potential conflicts of interest arise when associates
solicit donations or gifts from outside parties. Accordingly, no CGC associate
should ever allow the present or anticipated business relationships of CGC or
any of its affiliates to be a factor in soliciting political or charitable
contributions. As a general rule, before soliciting a person/entity having a
business relationship with CGC for a donation, gift, or entertainment, the
associate should obtain the consent of his/her supervisor. In determining
whether the solicitation would constitute a potential conflict of interest, the
supervisor should consider the following: (I) whether the associate has an
independent relationship with the outside party, (ii) whether the outside party
has an independent relationship with the charity, and (iii) the magnitude of the
requested donation (donations with a value of $100 or less are deemed not to
present a conflict of interest).
5. POLITICAL CONTRIBUTIONS
One of the main objectives of the Gifts and Entertainment
Policy is to ensure that conflicts of interest do not arise as a result of an
associate's position with CGC. Contributions made to certain political campaigns
(i.e., city, county or state treasurer) may raise potential conflicts of
interest because of the ability of certain office holders to direct business to
CGC. Accordingly, before making a political contribution to an individual
running for such an office please discuss the situation with your supervisor and
obtain pre-approval from the Gifts and Entertainment Committee by contacting
Kristine Nishiyama, Michele Yang, or Ken Gorvetzian who will raise the issue
with the Committee. Please feel free to raise any other questions or concerns
you may have regarding political contributions with your supervisor and/or the
Committee. In deciding whether a contribution will create a conflict of interest
the Committee will consider, among other things: (i) your relationship with the
candidate (i.e., is your relationship a personal or business one); and (ii) the
candidate's relationship with CGC.
III. THE GIFTS AND ENTERTAINMENT POLICY COMMITTEE
A Committee has been created which will be responsible for overseeing
the administration of the Policy, which will be handled by selected members of
the CGC Legal Group in LAO.
<PAGE> 25
IV. PUBLICIZING THE POLICY
You are encouraged to make brokers, outside vendors, and any other
appropriate group aware of our Policy (a single page explanation of the Policy
that you can distribute is attached).
* * * * *
If you have any questions, please contact Kristine Nishiyama (ext. 99652),
Michele Yang (ext. 99001), or Ken Gorvetzian (ext. 99253).
<PAGE> 26
SUMMARY OF THE GIFTS AND ENTERTAINMENT POLICY OF THE CAPITAL GROUP COMPANIES
The Capital Group Companies, Inc. and its affiliates (CRMC, CRC, CGTC, etc.)
have always been concerned that our associates maintain the very highest ethical
standards when conducting business. Given our recent dramatic growth, it seems
appropriate at this time to review with associates our guidelines regarding
gifts and entertainment.
THE FOCUS OF INTERACTION SHOULD ALWAYS BE ON IMPROVING THE BUSINESS
RELATIONSHIP. ACCORDINGLY, WE EXPECT OUR ASSOCIATES TO OBSERVE THE FOLLOWING
PRACTICES:
- Personal gifts are discouraged and should not be accepted if
individually or over the course of a year they exceed $100.
- Tickets to events should only be accepted if the outside party
will be accompanying the associate. Before accepting any
ticket(s) associates should 1) obtain permission from their
supervisor regardless of value and 2) report all tickets
accepted on the quarterly reporting form. If the value of the
associate's ticket(s) exceeds $200 he or she should review the
matter with his or her supervisor and the Committee before
accepting.
- Business meals should not be repetitive or extravagant. Again,
if the value of the associate's meal is expected to exceed
$200, the matter should be discussed with the associate's
supervisor and the Committee.
- While we understand that our associates may solicit political
or charitable contributions from various people in the
business community, our associates should not allow a present
or anticipated business relationship to become a factor in
soliciting contributions.
These guidelines have been developed in conjunction with the Investment Company
Institute's recommendations regarding gifts and entertainment, and are not meant
to discourage productive relationship building. Please feel free to contact
Kristine Nishiyama (213/486-9652), Michele Yang (213/486-9001), or Ken
Gorvetzian (213/486-9253), if you have any questions.
<PAGE> 27
M E M O R A N D U M
To: All Associates Subject to The Gifts and Entertainment Policy
From: The Gifts and Entertainment Policy Committee
Subject: Additional Clarification Regarding The Gifts and Entertainment Policy
As a result of many questions received by the staff of The Gifts and
Entertainment Policy Committee, we are providing the following questions and
answers to aid associates in interpreting the policy. If you have any questions,
please contact Kristine Nishiyama (ext. 99652), Michele Yang (ext. 99001), or
Ken Gorvetzian (ext. 99253).
1. Q. Anne Associate (and her spouse) are invited to go to dinner at "The
Ritz" (a fairly expensive restaurant) and then to the theater by a
representative of ABC Company, which does business with The Capital
Group Companies. The representative and his spouse will be in
attendance as well. The cost for dinner will probably run around $70
per person. The theater tickets cost $50 per person. Does Anne need to
receive approval from The Gifts and Entertainment Policy Committee
before attending the event?
A. Yes. Attendance at an event or series of events that are related and
have a single sponsor should be aggregated for purposes of calculating
value. Therefore, although the cost of dinner (an item of
entertainment) would be approximately $140 for Anne and her spouse,
and the cost of theater tickets (also an item of entertainment) would
be $100 (neither of which alone would exceed the $200 trigger level
for Committee pre-approval), the amounts should be aggregated when
considering whether it is necessary to obtain Committee approval.
(Note that Anne must include the value received by her spouse in
determining the value of the entertainment event.)
2. Q. Same facts as Question 1, except the representative and spouse of ABC
Company are not in attendance. Would Anne be able to accept the dinner
and theater tickets?
A. No. The dinner and tickets would be considered a gift and would be
subject to the $100 limit, however, she would not be able to accept
any additional gifts from ABC Company because she would have met her
$100 annual aggregate gifts limit.
<PAGE> 28
3. Q. Antonio Analyst goes on a research visit to XYZ Company. XYZ offers to
pay for Antonio's hotel expenses and meals, including a "black tie"
dinner at which the senior executives of XYZ Company will be present.
Would it be appropriate to allow XYZ Company to pay for these items?
A. Generally, it is not appropriate for a company to pay for hotel
accommodations during a research visit -- these expenses should be
paid for by the appropriate Capital Group company. Meals offered at an
outside restaurant at which no representative of the company is
present generally should also be paid for by the appropriate Capital
Group company. However, meals with representatives of the company or
that are eaten on the company's premises during a research visit are
always acceptable.
4. Q. Antonio Analyst goes on a research visit to ABC Company in Indonesia.
Because it is generally very difficult to find a taxi cab with drivers
who understand English who can take Antonio to ABC Company and to the
various plants that Antonio will need to visit, ABC Company offers to
provide a company car and driver to Antonio. Would it be appropriate
to accept this transportation?
A. Probably. Although the analyst should try to pay if possible,
transportation incidental to a research visit where commercial
transportation is difficult to procure, or unavailable, or impractical
is generally acceptable. However, the analyst should check with
his/her research manager (preferably) before the transportation is
accepted. (If it is not practical to check in advance, the analyst
should inform his/her research manager afterwards.)
5. Q. Astrid Analyst (an associate in LAO) goes on a research visit to BBB
Company in London. BBB Company offers to fly Astrid to London in the
company jet. Would it be appropriate to accept this transportation?
A. Probably not. Commercial transportation from Los Angeles to London is
available and should be paid for by the appropriate CG company. If
special circumstances exist or there are business reasons for
accepting such transportation (e.g., the CEO of BBB Company will also
be traveling on the plane), the analyst should check with the
Committee or his/her research manager.
6. Q. Sally (an AFS shareholder service representative) spends a lot of time
answering questions and helping a shareholder process a redemption
request. Sally receives a "thank you" card from the shareholder with a
gift certificate for $100 at a local department store. May Sally
accept this gift certificate?
A. In the event the shareholder sends an unsolicited gift (even in the
form of a gift certificate or gift catalogue), Sally may accept the
gift provided it is within the limit and is reported to her supervisor
(and on the reporting form if she is required to complete one).
However, employees may not accept gifts in the form of cash or checks.
<PAGE> 29
7. Q. Arnold Associate has two friends, April and Barney, who work at ABC
Printing Company, a company with which The Capital Group Companies
(and, specifically, Arnold's department) does business. April is a
close college friend with whom Arnold has been exchanging gifts since
before they joined their respective companies. Barney is a friend that
Arnold met by virtue of having worked with him at ABC through the
years and with whom Arnold has been exchanging gifts for the last
couple years. For his birthday, April and Barney each send Arnold a
gift basket worth $150 per basket. May Arnold accept the gift baskets?
A. In the case of April, it is entirely appropriate for Arnold to accept
the basket since Arnold and April have a personal friendship that is
separate from their business relationship (and their relationship
pre-dates the business relationship). In addition, gifts arising from
such personal relationships are outside the scope of the policy and
need not be reported.
The gift from Barney presents a more difficult situation since there
is no independent relationship. However, the "personal gift" may be
accepted if, for example, Arnold and Barney would most likely exchange
gifts even if one ceased to work for his respective company and the
value of the gifts exchanged are comparable. In order for a gift to be
treated as a "personal gift," there must be reciprocity of gift
giving; i.e., there should be a true exchange of gifts between the
individuals and the gifts should be comparable in value.
8. Q. Mike Manager and Anne Associate each receive from an outside vendor a
large gift basket filled with Dom Perignon champagne, Beluga caviar,
and Godiva chocolates. Both baskets are meant to be shared by the
department, and since there are a number of associates in the
department, the value per associate would be less than $100. Mike
Manager decides that, under the circumstances, the gift is extravagant
and sends the basket he received back to the vendor. In addition, he
informs Anne of his assessment of the situation and suggests that she
return the one sent to her as well. Was Mike's decision to return the
baskets consistent with the policy (even though the value was within
policy limits when divided by the number of associates in the
department)?
A. Yes. Although a gift to a department may technically be within the
"$100 per associate" limit, it is never appropriate to accept a gift
that may be extravagant. Where there is a question, the department
manager may make the decision as to what is "extravagant" or may
contact the Committee for guidance (for example, in some limited
situations, it may be appropriate to accept the gift and raffle the
items off to associates, but the ultimate decision rests with the
department manager and/or the Committee).
9. Q. Ashley Associate, an analyst in Geneva, receives a fine leather
briefcase worth approximately $500 during the holidays from an Asian
brokerage firm. Ashley believes it would be impolite to return the
briefcase. What should Ashley do with the briefcase?
A. The briefcase should be turned over to the Committee. The Committee
will either donate the briefcase to charity or auction the briefcase
off to associates with the proceeds going to charity.
<PAGE> 30
10. Q. Christopher Computer Programmer is attending an educational seminar
sponsored by IBM. IBM is paying the attendance fee for all of its
large corporate clients that have IBM systems. Is this permissible?
A. Yes. A sponsor of a conference or educational seminar may pay an
associate's attendance fee regardless of the cost, provided the
sponsor is paying the fee for all attendees similarly situated (i.e.,
others in addition to CGC associates). This would not be considered a
gift or entertainment subject to the policy, so it would not have to
be reported. Note that if the conference requires travel and hotel
expenses, CGC should pay for these costs. In addition, the associate
may attend dinners or other entertainment events sponsored by the
hosting company or other entities attending the conference.
11. Q. Alex Analyst, along with 49 other CGC analysts and traders, are
invited to dinner at a fine dining restaurant by Bob Broker of XYZ
Brokerage firm. Bob and one other broker will be attending and dinner
will cost XYZ approximately $125 a person. Should Alex and the other
49 analysts and traders accept the invitation?
A. Everyone should decline the invitation. Although Bob and another
broker would be attending the dinner, CGC associates would
predominate, making the ratio of broker to CGC associate 25:1. The
opportunity to cultivate a business relationship with the brokers and
have a meaningful conversation with each of them is significantly
reduced. Thus, most associates would essentially be there only for the
meal, converting what would seem to be entertainment into a gift to
each associate that exceeds the $100 limit. However, if the dinner
were less than $100 per person, the individuals could accept the
invitation but should report it. Note that acceptance assumes that any
particular individual has not received other gifts during the year
from XYZ, that together with the dinner exceeds the $100 limit from
any one source during a one year period.
12. Q. Amanda Analyst, who is based in the LAO, has been invited by Sunshine,
Inc., a company Amanda follows, to attend The Masters golf tournament
in Augusta, Georgia. Sunshine's invitation includes transportation on
Sunshine's corporate jet, lodging in a five-star hotel, tickets to
attend all four days of the golf tournament, and a dinner with
executives of Sunshine the first night of the tournament. Except for
the dinner, there would be no other planned activities with Sunshine,
and Amanda would be on her own after the first night. The total cost
of the trip is around $2,000. However, Amanda has followed the company
for a number of years and has developed a close relationship with
management. Thus, she believes it would be embarrassing to decline the
invitation or reimburse Sunshine for any of the costs. Can Amanda
accept the invitation?
A. As this is entertainment over the $200 limit, Amanda should raise the
issue with the Gifts & Entertainment Committee and discuss the matter
with her supervisor. Amanda will most likely be asked to decline the
invitation or, if appropriate, have CGC pay for the trip. However, if
Amanda is truly uncomfortable declining the invitation or having CGC
reimburse Sunshine, another option might be for Amanda to personally
contribute an amount at least equal to the cost of the trip to a
charity in Sunshine's name. It would also be appropriate for Sunshine
to pick the charity, so that the contribution would more likely go to
a charity Amanda would normally not contribute to.
<PAGE> 31
13. Q. Abe Accountant and his spouse are invited to dinner and opening night
at the opera by an auditor at DTPW Accounting firm. Abe works very
closely with the auditor and the firm. Tickets to the opera are
$150/each. May Abe accept the invitation to dinner and the opera?
A. Because the value of entertainment exceeds $200 Abe must obtain
pre-approval from the Committee. Given the business relationship
between Abe, the auditor, and the accounting firm and the opportunity
to further develop these relationships Abe would most likely be given
approval to attend dinner and the opera. However, Abe should consider
having CGC pay for dinner. By doing this the value of the opera
tickets will be offset by the cost of the dinner, arguably negating
any perception of a conflict of interest.
14. Q. Arthur Analyst follows Nintendo as part of his research
responsibilities. Nintendo has just released a new game platform,
valued at $200, and sends a complimentary one to Arthur to demo. May
Arthur keep the game?
A. Analysts should speak with their research director regarding product
samples whose value exceeds the $100 gift limit to determine whether
there is a clear business purpose to accept the sample. Depending on
the facts and circumstances there are various options for dealing with
product samples, including: 1) returning the product immediately; 2)
trying the product out for a while then returning it; 3) keeping the
product and having CGC reimburse the company who gave it; or 4) keep
the product.
15. Q. Marcia, a meeting planner for CGC, coordinates things such as travel
arrangements, meeting locations, and catering for large CGC meetings
or events. In connection with an event she is organizing for the
company, Marcia books 100 hotel rooms at Spa Resort. The resort, happy
about the business, offers Marcia a two-night stay in their resort.
May Marcia accept the gift?
A. No; Marcia should decline the resort's offer for a two-night stay.
Marcia should not personally benefit from a clear gift that is being
given in gratitude for something Marcia was required to do as part of
her job. However, if Marcia needed to determine whether the hotel was
suitable for a meeting it may be appropriate for her to stay in the
hotel for a reasonable time period and in a room similar to one that
would be used by meeting attendees.
<PAGE> 32
16. Q. Larry Lawyer is invited to speak at a conference in Bermuda on mutual
fund regulations, an area of law he has become an expert on while
working at CGC. The sponsor of the conference is a printing company
that Larry works with and has offered to pay for Larry's
transportation and lodging and will pay him a $1,000 speaker's fee.
The conference will take place during the work week. Can Larry speak
at the conference, accept the speaking fee and the sponsor's offer to
pay for transportation and lodging?
A. First, the potential for a conflict of interest is the main
consideration in determining whether Larry can accept the sponsor's
offer to pay for transportation and lodging. In this situation, the
sponsor is a printing company or vendor Larry works with on occasion.
There is a potential conflict of interest because of the printing
company's interest in doing printing or related work for CGC.
Consequently, it would not be appropriate for the printer to pay for
Larry's transportation and lodging. If, however, the sponsor of the
conference was a professional or trade association (i.e., the National
Association of Securities Dealers or the Investment Company Institute)
it would be appropriate for them to pick up Larry's transportation and
lodging because there is no potential for a conflict of interest.
Second, Larry should discuss with his supervisor whether it would be
appropriate for him to speak at the conference and accept the
speaker's fee. Considerations in making this decision include whether
this is something work related or whether it is akin to part-time
employment, and whether Larry would be speaking during company time
(which is the case here) or is taking vacation time. One alternative
to accepting a speaker's fee or honorarium is to donate the money to
charity.
<PAGE> 33
RETURN TO CAR/LAO/34
NO LATER THAN
10 DAYS AFTER CALENDAR QUARTER END
THE CAPITAL GROUP COMPANIES, INC.
GIFTS AND ENTERTAINMENT POLICY REPORTING FORM
/ / I HAVE NO GIFTS OR ENTERTAINMENT EXTENDED OR RECEIVED TO REPORT.
<TABLE>
<CAPTION>
GIFTS EXTENDED BY YOU OR RECEIVED BY YOU
----------------------------------------------------------------------------------------------------
ESTIMATED COST
-----------------------------------
DESCRIPTION OF GIFT AND NAME OF INDIVIDUAL AND EXTENDED BY YOU RECEIVED BY YOU
DATE ORGANIZATION (US$) (US$)
<S> <C> <C> <C>
</TABLE>
Please report any individual gift or series of gifts from the same source having
a value of $50 or more. You are encouraged to report all gifts regardless of
value. Department manager should report department gifts.
<TABLE>
BUSINESS MEALS AND/OR ENTERTAINMENT EXTENDED BY YOU OR RECEIVED BY YOU
----------------------------------------------------------------------------------------------------
ESTIMATED COST
-----------------------------------
DESCRIPTION OF BUSINESS MEAL OR ENTERTAINMENT AND EXTENDED BY YOU RECEIVED BY YOU
DATE NAME OF INDIVIDUAL AND ORGANIZATION (US$) (US$)
<S> <C> <C> <C>
</TABLE>
Please report any items of entertainment having a value of $75 or more. You are
encouraged to report all items of entertainment regardless of value. You are
required to preclear any item of entertainment having a value in excess of $200.
YOU NEED NOT REPORT ITEMS THAT ARE REIMBURSED BY THE COMPANY.
<PAGE> 34
Signature
<PAGE> 35
CODE OF CONDUCT
The Capital Group Companies, Inc., its subsidiaries, and all employees shall
maintain the highest ethical standards in the conduct of our business. An
underlying principle of this policy is that our own interests are never to be
placed ahead of those of our clients.
We conduct a service business which is founded upon our reputation for
integrity. The highest standards of honesty and integrity must be observed
irrespective of whether lesser standards are followed elsewhere through business
or community custom. If laws or regulations are difficult to interpret,
employees should seek advice from the Legal Department.
SUMMARY OF THE GIFTS AND ENTERTAINMENT POLICY OF THE CAPITAL GROUP COMPANIES
The Capital Group Companies, Inc. and its affiliates (CRMC, CRC, CGTC, etc.)
have always been concerned that our associates maintain the very highest ethical
standards when conducting business. Given our recent dramatic growth, it seems
appropriate at this time to review with associates our guidelines regarding
gifts and entertainment.
THE FOCUS OF INTERACTION SHOULD ALWAYS BE ON IMPROVING THE BUSINESS
RELATIONSHIP. ACCORDINGLY, WE EXPECT OUR ASSOCIATES TO OBSERVE THE FOLLOWING
PRACTICES:
- Personal gifts are discouraged and should not be accepted if
individually or over the course of a year they exceed $100.
- Tickets to events should only be accepted if the outside party will be
accompanying the associate. Before accepting any ticket(s) associates
should 1) obtain permission from their supervisor regardless of value
and 2) report all tickets accepted on the quarterly reporting form. If
the value of the associate's ticket(s) exceeds $200 he or she should
review the matter with his or her supervisor and the Committee before
accepting.
- Business meals should not be repetitive or extravagant. Again, if the
value of the associate's meal is expected to exceed $200, the matter
should be discussed with the associate's supervisor and the Committee.
- While we understand that our associates may solicit political or
charitable contributions from various people in the business
community, our associates should not allow a present or anticipated
business relationship to become a factor in soliciting contributions.
These guidelines have been developed in conjunction with the Investment Company
Institute's recommendations regarding gifts and entertainment, and are not meant
to discourage productive relationship building. Please feel free to contact
Kristine Nishiyama (213/486-9652), Michele Yang (213/486-9001), or Ken
Gorvetzian (213/486-9253), if you have any questions.
