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Exhibit No. EX-99.p.2
LEPERCQ, de NEUFLIZE & CO. INCORPORATED
LEPERCQ, de NEUFLIZE SECURITIES, INC.
and
LEPERCQ-ISTEL TRUST
CODE OF ETHICS
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(As Revised April 24, 1996 and August 9, 2000)
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WHEREAS, LEPERCQ, de NEUFLIZE & CO. INCORPORATED (the "Adviser") provides
investment advisory services to investment companies and other clients; and
WHEREAS, LEPERCQ, de NEUFLIFE SECURITIES, INC. (the "Distributor") provides
distribution services for the Adviser's investment company clients; and
WHEREAS, the investment advisory business involves decisions and
information which may have at least a temporary impact on the market price of
securities, thus creating a potential for conflicts of interest between the
persons engaged in such business and their clients; and
WHEREAS, the Adviser has a fiduciary relationship with respect to each
portfolio under management and the interests of the client accounts and of the
shareholders of the Adviser's investment company clients must take precedence
over the personal interests of the employees of the Adviser, thus requiring a
rigid adherence to the highest standards of conduct by such employees; and
WHEREAS, every practical step must be taken to ensure that no intentional
or inadvertent action is taken by an employee of the Adviser which is, or
appears to be, adverse to the interests of the Adviser or any of its client
accounts, including the defining of standards of behavior for such employees,
while at the same time avoiding unnecessary interference with the privacy or
personal freedom of such employees; and
WHEREAS, the Adviser originally adopted a Code of Ethics (the "Code") on
February 15, 1995, and amended it on April 24, 1996 to update and revise said
Code in light of changing circumstances in the securities markets in which the
Adviser conducts business and now deems it advisable to amend the Code to
reflect amendments to Rule 17j-1 of the Investment Company
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Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Lepercq-Istel Trust (the "Fund") is an open-end management
investment company, registered under 1940 Act; and
WHEREAS, the Fund is managed by the Adviser; and
NOW, THEREFORE, the Board of Directors of the Adviser and the Distributor
and the Board of Trustees of the Fund hereby adopt the following revised Code
pursuant to the provisions of Rule 17j-1 under the 1940 Act.
1. APPLICABILITY
Unless otherwise indicated, the term "employee" as used herein means: (i)
all officers, directors and employees, including "investment persons",
"portfolio managers" and "access persons", as defined in the rules and
procedures ("Procedures") adopted hereunder, of the Adviser, the Distributor and
their affiliates and wholly owned and indirect subsidiaries, if any, and (ii)
officers, directors (who maintain offices at the Adviser or the Distributor) and
employees of the Adviser who have an active part in the management, portfolio
selection, underwriting or shareholder functions with respect to the Adviser's
investment company clients or provide one or more similar services for the
Adviser's non-investment company clients.
The term "employee" does not include directors of any investment
company managed by the Adviser provided that they do not regularly
obtain information concerning the investment recommendations or
decisions made by the Adviser on behalf of client accounts
("independent directors").
2. INTERPRETATION AND ENFORCEMENT
The Chief Executive Officer of the Adviser shall appoint a Code of Ethics
Compliance Officer (the "Compliance Officer") or designee. The Compliance
Officer or designee shall have the responsibility for interpreting the
provisions of the Code, for adopting and implementing Procedures for the
enforcement of the provisions of the Code, and for determining whether a
violation of the provisions of the Code, or of any such related Procedures has
occurred. The Compliance Officer or designee will monitor personal investment
activity by "access persons" (as defined in the Procedures adopted hereunder),
both before and after any trade occurs and prepare periodic and annual reports,
conduct education seminars and obtain annual employee certifications as deemed
appropriate. In the event of a finding that a violation has occurred, the
Compliance Officer or designee shall take such action as he/she deems
appropriate, which may include recommendations to the Board of Directors of the
Adviser or to the board of any of its affiliates or subsidiaries on the
imposition of sanctions or initiation of disgorgement proceedings. The
Compliance Officer or designee shall also make recommendations and submit
reports to the Board of Trustees of the Adviser's investment company client.
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3. PROCEDURES ADOPTED UNDER THE CODE
From time to time, the Compliance Officer or designee shall adopt
Procedures to carry out the intent of the Code. Among other things, the
Procedures require certain new employees to complete an Initial Holdings Report
and Acknowledgment Form and such other forms as deemed appropriate by the
Compliance Officer or designee. Such Procedures are hereby incorporated into the
Code and are made a part of the Code. Therefore, a violation of the Procedures
shall be deemed a violation of the Code itself.
4. COMPLIANCE WITH GOVERNING LAWS, REGULATIONS AND PROCEDURES
(a) Each employee and director of the Adviser and the Distributor shall
have and maintain knowledge of and shall comply strictly with all
applicable federal and state laws and all rules and regulations of any
governmental agency or self-regulatory organization governing his/her
actions as an employee or director of the Adviser and the Distributor.
(b) Each employee and director of the Adviser and the Distributor shall
comply with all laws and regulations and the Adviser's Policy
Statement on Insider Trading (see Appendix 1). Trading on material
non-public information, or "inside information", of any sort, whether
obtained in the course of research activities, through a client
relationship or otherwise, is strictly prohibited.
(c) Each employee and director shall comply with the procedures and
guidelines established by the Adviser to ensure compliance with
applicable federal and state laws and regulations of governmental
agencies and self-regulatory organizations. No employee shall
knowingly participate in, assist, or condone any act in violation of
any statute or regulation governing the Adviser or any act that would
violate any provision of this Code, or of the Procedures adopted
hereunder.
(d) Each employee and director shall have and maintain knowledge of and
shall comply strictly with the provisions of this Code and any
Procedures adopted hereunder.
(e) Each employee having supervisory responsibility shall exercise
reasonable supervision over employees subject to his/her control, with
a view to preventing any violation by such persons of applicable
statutes or regulations, or the provisions of the Code, including the
Policy Statement on Insider Trading or the Procedures adopted
hereunder.
(f) Any employee obtaining evidence that an act in violation of applicable
statutes, regulations or provisions of the Code, including the Policy
Statement on Insider Trading, or of any Procedures adopted hereunder
has occurred shall immediately report such evidence to the Compliance
Officer or designee. Such action by the employee will remain
confidential, unless the employee waives confidentiality or
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federal or state authorities compel disclosure. Failure to report such
evidence may result in disciplinary proceedings and may include
sanctions as set forth in Section 6 hereof.
5. ETHICAL STANDARDS
(a) Employees and independent directors shall conduct themselves in a
manner consistent with the highest ethical and fiduciary standards.
They shall avoid any action, whether for personal profit or otherwise,
that results in an actual or potential conflict of interest with the
Adviser or its client accounts (as defined in the Procedures adopted
hereunder), or which may be otherwise detrimental to the interests of
the members of the Adviser or its client accounts.(1)
(b) Employees and directors shall act in a manner consistent with their
fiduciary obligation to clients of the Adviser, and shall not deprive
any client account of an investment opportunity in order to personally
benefit from that opportunity.
(c) Without the knowledge and approval of the Compliance Officer or
designee, employees shall not engage in a business activity or
practice for compensation in competition with the Adviser. Each
employee, who is deemed to be an "investment person" as defined in the
Procedures adopted hereunder, shall obtain the written approval of the
Compliance Officer or designee to participate on a board of
directors/trustees of any the following organizations:
(i) publicly traded company, partnership or trusts;
(ii) hospital or philanthropic institution:*
(iii) local or state municipal authority:* and/or
------------------------
(1) Conflicts of interest generally result from a situation in which an
individual has a personal interest in a matter that is or may be competitive
with his or her responsibilities to other persons or entities (such as the
Adviser or its client accounts) or where an individual has or may have competing
obligations or responsibilities to two or more persons or entities. In the case
of the relationship between a client account on the one hand, and the Adviser,
its officers, directors and employees, on the other hand, such conflict may
result from the purchase or sale of securities for a client account and for the
personal account of the individual involved or the account of any "affiliate" of
such individual as such term is defined in the 1940 Act. Such conflict may also
arise from the purchase or sale for a client account of securities in which an
officer, director or employee of the Adviser has an economic interest. Moreover,
such conflict may arise in connection with vendor relationships in which such
employee has direct or indirect financial interest, family interests, or other
personal interest. To the extent of conflicts of interest between the Adviser
and a vendor, such conflicts must be resolved in a manner that is not
disadvantageous to the Adviser. In any such case, potential or actual conflicts
must be disclosed to the Adviser and the first preference and priority must be
to avoid such conflicts of interest wherever possible and, where they
unavoidably occur, to resolve them in a manner that is not disadvantageous to a
client.
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(iv) charitable organization.*
* These restrictions relate to organizations that have or intend to raise
proceeds in a public securities offering.
(d) Each employee, in making an investment recommendation or taking any
investment action, shall exercise diligence and thoroughness, and
shall have a reasonable and adequate basis for any such recommendation
or action.
(e) Each employee and director shall not attempt to improperly influence
for such person's personal benefit any investment strategy to be
followed or investment action to be taken by the Adviser for its
client accounts.
(f) Each employee and director shall not improperly use for such person's
personal benefit any knowledge, whether obtained through such person's
relationship with the Adviser or otherwise, of any investment
recommendation made or to be made, or of any investment action taken
or to be taken by the Adviser for its client accounts.
(g) Employees and independent directors shall not disclose any non-public
information relating to a client account's portfolio or transactions
or to the investment recommendations of the Adviser, nor shall any
employee disclose any non-public information relating to the business
or operations of the Adviser unless properly authorized to do so.
(h) Employees shall not accept, directly or indirectly, from a
broker-dealer or other vendor who transacts business with the Adviser
or its client accounts, any gifts, gratuities or other things of such
value or significance that their acceptance might reasonably be
expected to interfere with or influence the exercise of independent
and objective judgment in carrying out such person's duties or
otherwise gives the appearance of a possible impropriety.
(i) Each employee who is deemed to be an "investment person" as defined in
the Procedures adopted hereunder (or registered representative and/or
principal(2) of any affiliated broker-dealer of the Adviser) shall not
acquire securities for an account for which he/she has a direct or
indirect beneficial interest in an initial public offering ("IPO") or
on behalf of any person, entity or organization that is not a client
of the Adviser unless such transaction has been pre-approved by the
Compliance officer or designee.
------------------------
(2) Under the NASD's Conduct Rules, registered representatives and principals
may not purchase a new offering until all public clients have been satisfied.
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(j) All personal securities transactions by employees must be conducted
consistent with this Code and the Procedures adopted hereunder, and in
such a manner as to avoid any actual or potential conflicts of
interest or any abuse of such employee's position of trust and
responsibility. Unless an exemption is available, employees who are
deemed to be "access persons" as defined in the Procedures adopted
hereunder, shall pre-clear all transactions in securities in
accordance with the Procedures adopted hereunder.
(k) Each employee, who is deemed to be an "investment person" as defined
in the Procedures adopted hereunder, shall refrain from engaging in
personal securities transactions in connection with a security that is
not registered under Section 12 of the Securities Act of 1933 (i.e., a
private placement security) unless such transaction has been
pre-approved by the Compliance Officer or designee.
(l) Employees who are deemed to be "access persons" as defined in the
Procedures adopted hereunder shall not execute a parallel transaction
in connection with the purchase or sale of a security on any day
during which any of the Adviser's clients, including investment
company clients, has a pending buy or sell order in that same security
until that order is executed or withdrawn. In addition, employees who
are deemed to be "investment persons" as defined in the Procedures
adopted hereunder, may not engage in a transaction in connection with
the purchase or sale of a security within seven calendar days before
and after an investment company client of the Adviser trades in that
security.
(m) Each employee, who is deemed to be an "investment person" as defined
in the Procedures adopted hereunder, may not purchase and voluntarily
sell or sell and voluntarily purchase the same (or equivalent)
securities of the same issuer within 60 calendar days unless such
employee complies with the disgorgement procedures set forth in the
Procedures adopted hereunder. Any transaction under this provision
will result in disgorgement proceedings for any profits received in
connection with such transaction by such employee.
6. SANCTIONS
Employees violating the provisions of the Code or any Procedures adopted
hereunder may be subject to sanctions, which may include, among other things,
restrictions on such person's personal securities transactions; a letter of
admonition, education or formal censure; fines, suspension, reassignment,
demotion or termination of employment; or other significant remedial action
Employees may also be subject to disgorgement proceedings for transactions in
securities that are inconsistent with Sections 5.l. and 5.m. above.
7. ADDITIONAL DISCLOSURE
This Code, including the Policy Statement on Insider Trading, and related
Procedures under the Code cannot, and do not, cover every situation in which
choices and decisions must be
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made, because other company policies, practices and procedures (as well as good
common sense) and good business judgment also apply. Employees should read and
understand these documents thoroughly. They present important rules of conduct
and operating controls for all employees. Employees are also expected to present
questions to the attention of their supervisors and to the Compliance Officer or
designee and to report suspected violations as set forth in these documents.
8. POLICY STATEMENT ON INSIDER TRADING
The Adviser's Policy Statement on Insider Trading is attached as Appendix I
hereto. Said Policy Statement applies to all employees and other persons
associated with the Adviser or the Fund.
LEPERCQ, de NEUFLIZE & CO. INCORPORATED
By:
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Date
LEPERCQ, de NEUFLIZE SECURITIES, INC.
By:
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------------------------------------
Date
LEPERCQ-ISTEL TRUST
By:
------------------------------------
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Date
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APPENDIX I
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
POLICY STATEMENT ON INSIDER TRADING
The following policies have been established to aid employees and other persons
associated with Lepercq, de Neuflize & Co. Incorporated (the "Adviser"),
Lepercq, de Neuflize Securities, Inc. (the "Distributor") and the Lepercq-Istel
Trust (the "Fund") in avoiding "insider trading" and to aid the Adviser in
preventing, detecting and imposing sanctions against "insider trading". All
employees and other persons must follow these policies or risk serious
sanctions, including dismissal, substantial personal liability and criminal
penalties. If an employee or other person has a question about these procedures,
such person should contact the Compliance Officer or designee.
1. DESCRIPTION OF INSIDER TRADING
The term "insider trading" is not defined in the federal securities laws,
but generally is used to refer to the use of material non-public information to
trade in securities (whether or not someone is an "insider") and to
communications of material non-public information to others.
(A) While the law concerning "insider trading" is not static, it is
generally understood that the law prohibits:
(B) trading by an insider while in possession of material non-public
information; or
(C) trading by a non-insider while in possession of material non-public
information, where the information was either disclosed to the
non-insider in violation of an insider's duty to keep it confidential
or was misappropriated; or
(D) communicating material non-public information to others.
The elements of "insider trading" and the penalties for such unlawful
conduct are discussed below:
1. WHO IS AN INSIDER?
The concept of "insider" is broad. It includes all employees of a company.
In addition, a person can be a "temporary insider" if he/she enters into a
special confidential relationship in the conduct of a company's affairs and
as a result is given access to information solely for the company's
purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers and the
employees of such organizations. In addition, an employee of the Adviser
may become a temporary insider for a company it advises or for which it
performs other services. According to the Supreme Court, the company must
expect an outsider to keep the
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disclosed non-public information confidential and the relationship must at
least imply such a duty before the outsider will be considered an insider.
2. WHAT IS MATERIAL INFORMATION?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" is generally defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his/her investment decisions
or information that is reasonably certain to have a substantial effect on
the price of a company's securities. Information that employees should
consider material includes but is not limited to: dividend changes,
earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major
litigation, liquidation problems and extraordinary management developments.
Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme Court
considered as material certain information about the contents of a
forthcoming newspaper column that was expected to affect the market price
of a security. In that case, a reporter for The Wall Street Journal was
found criminally liable for disclosing to others the dates that reports on
various companies would appear in The Wall Street Journal and whether those
reports would be favorable or not.
3. WHAT IS NON-PUBLIC INFORMATION?
Information is non-public until it has been effectively communicated to the
marketplace. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the Securities and Exchange Commission, or appearing in Dow
Jones, Reuters Economic Services, The Wall Street Journal or other
publications of general circulation would be considered public.
4. PENALTIES
Penalties for trading on or communicating material non-public information
are severe, both for individuals involved in such unlawful conduct and
their employers. A person can be subject to some or all of the penalties
below even if he/she does not personally benefit from the violation.
Penalties include:
civil injunctions;
treble damages;
disgorgement of profits;
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jail sentences;
fines for the person who committed the violation of up to three times the
profit gained or loss avoided, whether or not the person actually
benefited; and fines for the employer or other controlling person of up to
the greater of $1,000,000 or three times the profit gained or loss avoided.
In addition, any violations of this Policy Statement on Insider Trading
will be subject to the sanctions described in Section 6 of the Code.
2. IDENTIFYING INSIDE INFORMATION
Before a portfolio manager enters into a transaction in the securities of a
company about which he/she may have potential inside information, the following
questions must be resolved:
(1) Is the information material? Is this information that an investor
would consider important in making his/her investment decisions? Is
this information that would substantially affect the market price of
the securities if generally disclosed?
(2) IS THE INFORMATION NON-PUBLIC? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace by being published in Reuters Economic Services, The Wall
Street Journal or other publications of general circulation?
If, after consideration of the above, the portfolio manager believes
that the information is material and non-public, or if he/she has any
questions as to whether the information is material and non-public,
the portfolio manager must take the following steps:
a. report the matter immediately to the Compliance Officer or
designee;
b. refrain from purchasing or selling the securities in a personal
securities transaction or on behalf of others, including the
Adviser's client accounts;
c. refrain from communicating the information inside or outside the
Adviser, other than to the Compliance Officer or designee; and
d. after the Compliance Officer or designee has reviewed the issue,
the portfolio manager will be instructed to continue the
prohibitions against trading and communications, or will be
allowed to trade on and communicate the information.
3. RESTRICTING ACCESS TO MATERIAL NON-PUBLIC INFORMATION
Information in the possession of any employee that may be considered
identified as material and non-public may not be communicated to anyone,
including persons within the
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Adviser, except as provided in Section 2.b. above. In addition, care should be
taken so that such information is secure. For example, files containing material
non-public information should be sealed and access to computer files containing
material non-public information should be restricted.
4. RESOLVING ISSUES CONCERNING INSIDER TRADING
If, after consideration of the items set forth in Section 2.b. above, doubt
remains as to whether information is material or non-public, or if there is any
unresolved question as to the applicability or interpretation of the foregoing
procedures or as to the propriety of any action, it must be discussed with the
Compliance Officer or designee before trading on or communicating the
information to anyone.
5. CONTROL PROCEDURES
The role of the Compliance Officer or designee is critical to the
implementation and maintenance of the Adviser's policies and procedures against
"insider trading". Control procedures include prevention and detection of
"insider trading".
To prevent "insider trading", the Compliance Officer or designee should:
a. provide on a regular basis an educational program to familiarize
employees with the Adviser's policies and procedures against
"insider trading";
b. answer questions regarding the Adviser's policies and procedures;
c. resolve issues of whether information received by an employee of
the Adviser is material and non-public;
d. review on a regular basis and update as necessary the Code and
related Procedures of the Adviser and the Funds;
e. promptly review and either approve or disapprove, in writing,
each request of an employee for clearance to trade in specified
securities; and
f. when it has been determined that an employee of the Adviser has
material non-public information:
g. implement measures to prevent dissemination of such information;
and
h. if necessary, restrict employees from trading the securities.
To detect "insider trading", the Compliance Officer or designee has also
established internal auditing controls.
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6. SPECIAL REPORTS TO MANAGEMENT
Promptly, upon learning of an actual or potential violation of this Policy
Statement, the Compliance Officer or designee shall prepare and maintain in the
Adviser's records a written report providing full details of the situation and
the remedial action taken. Annually, the Compliance Officer or designee shall
report to the Board of Trustees of the Fund with regard to any issues that arose
during the year, under this Policy Statement. (See Section 6.b. of the
Procedures adopted hereunder.)
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LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
LEPERCQ, DE NEUFLIZE SECURITIES, INC.
AND
LEPERCQ-ISTEL TRUST
RULES AND PROCEDURES ADOPTED UNDER THE CODE OF ETHICS
(AS REVISED APRIL 24, 1996 AND AUGUST 9, 2000)
1. INTRODUCTION
These rules and procedures (collectively, "Procedures") have been adopted
by Lepercq, de Neuflize & Co. Incorporated (the "Adviser"), Lepercq, de Neuflize
Securities, Inc. (the "Distributor") and Lepercq-Istel Trust (the "Fund") to
carry out the intent of the Code of Ethics ("Code") of the Adviser, the
Distributor and the Fund and are incorporated by reference into and made a part
of the Code. The Code has been approved by the Adviser, the Distributor and by
the Board of Trustees of the Fund.
The Compliance Officer or designee has the responsibility for interpreting
the provisions of the Code, for adopting and implementing these Procedures, and
for determining whether a violation of the provisions of the Code or of these
Procedures has occurred and, if so, for imposing appropriate sanctions in
accordance with the rules adopted by the Compliance Officer or designee.
Further, the Code authorizes the Compliance Officer or designee to adopt
procedures, rules and guidelines designed to establish, maintain and enforce
written policies and procedures reasonably designed to prevent the misuse of
material non-public information.
2. APPLICABILITY
These Procedures apply to certain employees as defined in the Code. Any
questions regarding the Code or the Procedures should be referred to the
Compliance Officer or designee.
3. DEFINITIONS
For purposes of these Procedures, the following terms shall have the
meanings set forth below:
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1. "BENEFICIAL OWNERSHIP" means:
a. the receipt of benefits substantially equivalent to those of
relationship, understanding, agreement, contract or other
arrangements; or
b. the power to vest ownership in oneself at once or at some future
time. Generally, a person will be regarded as having a direct or
indirect beneficial ownership interest in securities held in
his/her name, as well as in the name of a spouse, minor children
who live with such person, and any other relative (parents, adult
children, brothers, sisters, in-laws, etc.) whose investments the
employee directs or controls, whether the person lives with the
employee or not. See Exhibit A to these Procedures for a more
complete description of beneficial ownership, as well as examples
of beneficial ownership.
2. "DISINTERESTED TRUSTEE" means a Trustee who is not an "interested
person" within the meaning of Section 2(a)(19) of the 1940 Act. An
"interested person" includes any person who is a trustee, director,
officer, employee or owner of 5% or more of the outstanding stock of
the Adviser. Affiliates of brokers or dealers are also "interested
persons," except as provided in Rule 2(a)(19)(1) under the 1940 Act.
3. "EMPLOYEE" has the same meaning as set forth in Section 1 of the Code.
In addition, the following definitions apply:
a. "ACCESS PERSON" includes all directors, officers and employees of
the Adviser or the Distributor (with respect to those investment
companies for which the Distributor acts) who, in the ordinary
course of their regular functions and duties, participates in or
may obtain information concerning recommendations by the Adviser
in connection with the purchase or sale of a security by one or
more of the Adviser's client accounts.
b. "INVESTMENT PERSON" includes all directors, officers and
employees of the Adviser who have access to information
concerning investment activities for the Adviser's client
accounts, and/or who give investment advice or support to, or
otherwise assist in, the execution of a portfolio manager's
decisions (i.e. traders and securities analysts, as well as all
"portfolio managers").
c. "PORTFOLIO MANAGER" includes those employees who actively
participate in the portfolio selection, monitoring and reporting
with respect to one or more of the Adviser's client accounts.
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4. "CLIENT ACCOUNTS" includes all private accounts and investment
companies who have entered into investment management administrative
and advisory agreements or sub-advisory agreements with one or more of
the members of the Adviser as described in the Code.
5. "SECURITY" means any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate,
pre-organization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit
for a security, fractional undivided interest in oil, gas or other
mineral rights, any put, call, straddle, option or privilege on any
security or on any group or index of securities (including any
interest therein or based on the value thereof), any put, call,
straddle, option or privilege entered into on a national securities
exchange relating to foreign currency, the writing of an option to
purchase or sell a security, or, in general, any interest or
instrument commonly known as a "security," or any certificate of
interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
6. "EQUIVALENT SECURITY" means a security that: (1) is convertible into
another security or (2) gives its holder the right to purchase another
security of the same issuer. For example, a bond or preferred stock
may be convertible into another security of the same issuer, or an
option or warrant may give the holder the right to purchase stock of
the same issuer.
7. "REPORTABLE SECURITY" means any SECURITY that must be reported to the
Compliance Officer or designee after execution of a trade (see Exhibit
B for examples).
8. "SECURITY REQUIRING PRIOR APPROVAL" means any REPORTABLE SECURITY that
must be pre-cleared by the Compliance Officer or designee prior to
execution of a trade (see Exhibit B for examples).
4. PROHIBITIONS
The Adviser, the Distributor and the Fund have determined that the
following courses of conduct are prohibited for all the Adviser's and
Distributor's employees:
1. INSIDER TRADING
Every employee is forbidden from trading, either personally or on behalf of
others (including client accounts managed by the Adviser), on material
non-public information
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or communicating material non-public information to others in violation of
the law. This conduct is frequently referred to as "insider trading". This
policy applies to every employee of the Adviser and the Distributor and
extends to activities within and outside their duties at the Adviser and
the Distributor. See Appendix I of the Code for a description of "insider
trading" and special procedures that are designed to detect and prevent
"insider trading".
2. TRANSACTIONS IN SECURITIES ON THE RESTRICTED LIST
From time to time, employees may obtain material, non-public information or
establish special or "insider" relationships with one or more issuers of
securities (i.e., the employee may become an officer or director of an
issuer, a member of a creditor committee that engages in material
negotiations with an issuer, etc.). In these cases, the Compliance Officer
or designee may maintain a Restricted List containing the names of issuers
whose securities are not eligible for purchase or sale by employees and/or
client accounts.
Employees who are deemed to be ACCESS PERSONS may not trade, either
personally or on behalf of client accounts of the Adviser, in a security of
an issuer appearing on the Restricted List. With respect to personal
transactions of employees, the Compliance Officer or designee will advise
each employee during the prior approval process if a security appears on
the Restricted List. With respect to trading on behalf of client accounts,
the Compliance Officer or designee will advise the PORTFOLIO MANAGERS
thereof in writing when any issuers are added to or deleted from the
Restricted List.
3. SOLICITATION OR ACCEPTANCE OF SIGNIFICANT GIFTS AND GRATUITIES
Except as noted below, an employee shall not solicit or accept from a
broker/dealer or other vendor that transacts business with the Adviser or
its client accounts any gifts or gratuities or other things of value. For
this purpose, gifts and gratuities and other things of value do not include
unsolicited entertainment (including meals or tickets to cultural or
sporting events) that are not so frequent or extensive as to raise any
question of impropriety. An employee may not accept unsolicited gifts or
other things of more than de minimis value from any person or entity that
does business with or on behalf of an investment company client account. In
any such case, the value may not exceed $100 per giver per year.
4. INDEPENDENT PRACTICE FOR COMPENSATION
Employees shall not undertake a business activity or practice for
compensation that is in competition with the Adviser unless they have
received the written consent of the Compliance Officer or designee. For
this purpose, "business activity or practice"
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includes any service that the Adviser currently makes available for
compensation. In addition, employees who are deemed to be INVESTMENT
PERSONS are prohibited from serving on the board of directors/trustees of
certain organizations without prior written approval from the Compliance
Officer or designee (see Section 5.c. of the Code). In the relatively small
number of instances in which board service is authorized, INVESTMENT
PERSONS serving as directors normally should be isolated from those making
investment decisions through "Chinese Wall" or other procedures.
Employees shall also avoid any action, whether for personal profit or
otherwise, that results in an actual or potential conflict of interest with
the Adviser or its client accounts, or which may be otherwise detrimental
to the interest of the Adviser or its client accounts. Such conflict may
also arise from the purchase and sale for a client account of securities in
which an officer, director or employee of the Adviser has an economic
interest. Moreover, such conflict may arise in connection with vendor
relationships in which such employee has any direct or indirect financial
interest, family interests or other personal interest. Such conflicts must
be resolved in favor of the Adviser's client, or if a vendor, in favor of
the Adviser.
5. FAILURE TO DISCLOSE PERSONAL INTERESTS IN A SECURITY
Upon commencement of duty with the Adviser, each ACCESS PERSON shall
disclose, on the appropriate form, all holdings of securities to the
Compliance Officer or designee. An employee who is deemed to be an ACCESS
PERSON shall not cause or attempt to cause client accounts to acquire or
dispose of any such security (including any option, warrant or other right
or interest relating to such security) unless the employee shall first
disclose to the Compliance Officer or designee all facts reasonably
necessary to assure that any conflicts of interest relating to such
security are resolved in a manner that is not disadvantageous to client
accounts.
The disclosures as described above are intended to bring to the attention
of the Compliance Officer or designee any actual or apparent conflicts of
interest and to prevent employees from exerting, or appearing to exert,
improper influence on the management of client accounts.
6. DEPRIVING CLIENT ACCOUNTS OF INVESTMENT OPPORTUNITIES
The failure of an employee who is deemed to be a PORTFOLIO MANAGER to
recommend an investment opportunity to, or to purchase an investment
opportunity for, a client account in order to obtain a personal benefit
will be considered a course of conduct that deprives a client account of an
investment opportunity. Therefore, such conduct will be considered to be a
violation of Section 5.b. of the Code. An example of this type of
prohibited
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conduct is to effect a personal transaction in a security and to
intentionally fail to recommend, or to fail to effect, a suitable client
account transaction in such security in order to avoid the appearance of a
conflict of interest.
7. "SCALPING" OR "FRONT-RUNNING"
Employees shall not acquire or dispose of beneficial ownership of a
security if such acquisition or disposition is based upon the employee's
knowledge of actions already taken, being taken or being considered by the
Adviser on behalf of any of its client accounts. Such prohibited conduct
will be considered to violate one or more of Sections 5.a., 5.b. and 5.f.
of the Code. Examples of this type of prohibited conduct include:
a. for personal gain, an employee uses knowledge of a future
purchase of a security by a client account and buys the security
or acquires direct or indirect beneficial ownership of the
security before the client account buys the security; or
b. for personal gain, an employee uses knowledge of a future sale of
a security by a client account and sells the security for any
account with respect to which the employee is the direct or
indirect beneficial owner before the client account sells the
security (e.g., the employee sells short a security based on
knowledge of a future sale of the security by a client account).
5. RESTRICTED TRADING PERIODS ("BLACKOUT PERIODS")
1. SAME DAY RESTRICTION
Employees who are deemed to be ACCESS PERSONS are prohibited from
executing a parallel securities transaction on any day during which a client
account has a pending "buy" or "sell" order in the same (or equivalent) security
of the same issuer, until that order is executed or withdrawn.
2. SEVEN-DAY RESTRICTION
Employees who are deemed to be ACCESS PERSONS are prohibited from
buying or selling a security for seven calendar days after a client account
executes an opposite trade in the same (or equivalent) security of the same
issuer. For example if a client account sold a security within the last seven
calendar days, ACCESS PERSONS (and registered representatives and/or principals
of any broker-dealer affiliate of the Adviser) would be prohibited from buying
the same (or equivalent) security of the same issuer. (NOTE: The day of the last
client account trade is counted as the first day of this seven calendar day
period.)
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Employees who are deemed to be INVESTMENT PERSONS are prohibited from
buying or selling a security within at least seven calendar days before or after
a client account trades in the same (or equivalent) security of the same issuer.
(NOTE: The day of the last client account trade is counted as the first day of
this seven calendar day period.) If any client account purchases or sells a
security within seven days before or after a trade by an INVESTMENT PERSON, the
Compliance Officer or designee will require that the employee take such action
as necessary to unwind, reverse or disgorge such securities. The Compliance
Officer or designee will direct the employee to disgorge any profits obtained as
a result of such subsequent trade.
Depending on the circumstances in each case, it may be appropriate for
the Compliance Officer or designee to impose a "cooling-off period" longer or
shorter than the seven calendar day period described above. Some of these
circumstances could include whether the security is thinly traded, the number
and dollar volume of transactions of employees and client accounts, and the
employee's level of involvement in the investment process.
3. 60-DAYS RESTRICTION
Employees who are deemed INVESTMENT PERSONS are prohibited from
profiting from the purchase and voluntary sale, or sale and voluntary purchase,
of the same (or equivalent) securities within 60 calendar days of a trade by one
or more client accounts.
a. Any such short-term trade will be investigated by the Compliance
Officer or designee who shall render a finding and determine the
appropriate disposition of the matter.
b. Any profits realized upon such disposition are subject to
disgorgement under such rules as adopted by the Adviser.
c. The Adviser may adopt rules providing for hardship exceptions
upon application on a case-by case basis.
NOTE: The Adviser believes that short-term trading by employees who are deemed
to be INVESTMENT PERSONS is inconsistent with their fiduciary duties and can be
detrimental to both the Adviser and its client accounts. It is, therefore, the
Adviser's judgment that excessive short-term trading can be a time-consuming
distraction, can interfere with an employee's ability to perform his/her duties
in a diligent and thorough manner and can act in a manner inconsistent with the
Adviser's fiduciary duty to clients. Such trading increases the possibility of
actual or apparent conflicts of interests.
6. DISCLOSURE OF CONFIDENTIAL INFORMATION
Except in the ordinary course of assigned duties, employees shall not
disclose to any non-employee or other non-member of the Adviser information
concerning particular securities that
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are held or being considered for purchase or sale by client accounts, any
information concerning client accounts or any other information deemed
confidential by the Adviser.
7. PURCHASE OF NON-INVESTMENT GRADE CORPORATE BONDS HELD IN CLIENT ACCOUNTS
Employees who are deemed to be ACCESS PERSONS shall not acquire direct or
indirect beneficial ownership of a corporate bond if, at the time of such
acquisition, any debt security of the issuer of such bond is held in a client
account and such corporate bond is rated less than investment grade by either
Moody's Investors Services, Inc. ("Moody's") or Standard and Poor's Corporation
("S&P"). (NOTE: for this purpose, a bond that is not rated by either Moody's or
S&P will be treated as a bond that is rated less than investment grade.)
8. NEW ISSUE PURCHASES DURING AN INITIAL PUBLIC OFFERING AND PRIVATE PLACEMENTS
Employees who are deemed to be INVESTMENT PERSONS are prohibited from
acquiring direct or indirect beneficial ownership, or otherwise purchasing
securities issued during an initial public offering ("IPO") or an unregistered
security issued in a private placement without the prior written approval of the
Compliance Officer or designee. Under normal circumstances, such approval will
not be withheld if the employee demonstrates in writing that: (1) the investment
is not suitable for one or more client accounts; (2) the investment opportunity
was unique to the individual circumstances of the employee; (3) the investment
did not involve employment with the Adviser as a consideration by the offeree;
and (4) no overreaching would or could occur. INVESTMENT PERSONS who have been
authorized to acquire securities in an initial public offering or a private
placement must disclose such investment to the Compliance Officer or designee
when such INVESTMENT PERSON plays a part in any subsequent consideration of any
investment in the issuer by a client account. The decision to purchase
securities of the issuer for a client account shall be subject to an independent
review by the Compliance Officer or designee.
9. PERSONAL SECURITIES TRADING
1. OPENING OF BROKERAGE ACCOUNTS
Each ACCESS PERSON shall supply to the Compliance Officer or designee a
completed Initial Holdings Report and Acknowledgement Form (see Exhibit C),
identifying all brokerage, company and other institutional accounts subject
to the Code and related Procedures in which the employee has a direct or
indirect beneficial ownership interest, as defined in Section III.A.
herein.
Each ACCESS PERSON is required to provide a Transaction Report: New Account
to the Compliance Officer or designee at any time the employee opens or
closes any brokerage, company or other institutional account in which
he/she has a direct or indirect beneficial
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ownership interest.
10. PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
1. Each employee who is deemed to be an ACCESS PERSON shall obtain
written approval from the Compliance Officer or designee prior to
buying or selling a SECURITY REQUIRING PRIOR APPROVAL. This
requirement applies to the purchase or sale of each SECURITY REQUIRING
PRIOR APPROVAL in which the employee has a direct or indirect
beneficial ownership interest such as purchases or sales for the
account(s) of the employee, his/her spouse or minor children, or for
accounts of a trust for which the employee is a trustee or in which
the employee has a direct or indirect beneficial ownership interest.
2. In the absence of the Compliance Officer or designee, pre-clearance
may be obtained from any officer of the investment department.
3. Notwithstanding Section 10.1. above, an employee shall not be required
to obtain prior approval for transactions in securities that are made
for any account(s) over which the employee has no direct or indirect
beneficial interest, influence or control.
4. Employees seeking pre-clearance of securities transactions shall
complete Part I of the Pre-Clearance Form (see Exhibit H) and submit
the form to the Compliance Officer or designee. Employees who are not
located at the home office of the Adviser may either fax the completed
form or verbally provide the Compliance Officer or designee with the
information necessary to complete Part I of the form.
For the purpose of approving or disapproving the securities transactions of
employees, the Compliance Officer or designee shall follow the
pre-clearance procedures set forth in Exhibit G, and such other procedures
approved by the Adviser for internal control purposes.
5. Securities transactions in discretionary accounts of ACCESS PERSONS
must also be approved by the Compliance Officer or designee prior to
execution of the trade if the security requires prior approval, as
defined herein. The employee must provide a copy of the discretionary
agreement to the Compliance Officer or designee upon commencement of
employment or upon a discretionary account.
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11. REPORTING OF PERSONAL SECURITIES TRANSACTIONS
1. GENERAL REPORTING REQUIREMENT
Coverage: Each ACCESS PERSON shall file with the Compliance Officer or
designee confidential quarterly reports containing the information
required in Section 11.2 of this Code with respect to all transactions
during the preceding quarter in any securities in which such person
has, or by reason of such transaction acquires, any direct or indirect
beneficial ownership, provided that no ACCESS PERSON shall be required
to report transactions effected for any account over which such ACCESS
PERSON has no direct or indirect influence or control (except that
such an ACCESS PERSON must file a written certification stating that
he or she has no direct or indirect influence or control over the
account in question). All such ACCESS PERSONS shall file reports, even
when no transactions have been effected, representing that no
transactions subject to reporting requirements were effected.
2. QUARTERLY TRANSACTION REPORTS
No later than 10 days after the end of a calendar quarter, the
following information must be provided:
a. With respect to any transaction during the quarter in a security
in which the ACCESS PERSON had any direct or indirect beneficial
ownership:
1. the date of the transaction, the title, the interest rate
and maturity date (if applicable) and the number of shares
and the principal amount of each security involved;
2. the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
3. the price at which the transaction was effected;
4. the name of the broker, dealer or bank with or through whom
the transaction was effected; and
5. the date that the report is submitted by the ACCESS PERSON.
b. With respect to any account established by the ACCESS PERSON in
which any securities were held during the quarter for the direct
or indirect benefit of the ACCESS PERSON:
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1. the name of the broker, dealer or bank with whom the ACCESS
PERSON established the account;
2. the date the account was established; and
3. the date that the report is submitted by the ACCESS PERSON.
3. Any report may contain a statement that it shall not be construed as
an admission by the person making the report that he or she has any
direct or indirect beneficial ownership in the security to which the
report relates.
4. PROVISION OF DUPLICATE CONFIRMATIONS
ACCESS PERSONS are required to provide duplicate confirmations and
monthly/quarterly brokerage statements for all transactions in
reportable securities. The Compliance Officer or designee will request
each broker/dealer identified on an employee's current Quarterly
Transaction Report to provide duplicate confirmations and
monthly/quarterly brokerage statements for all securities transactions
in the employee's account(s). Therefore, it is incumbent upon each
employee to make certain that his/her Quarterly Transaction Report is
maintained on a current basis (i.e., all of the employee's brokerage,
company and other institutional accounts are identified) and provided
to the Compliance Officer or designee in a timely manner. Failure to
keep such Quarterly Transaction Report current shall result in
disciplinary action.
12. REVIEW
Before making a determination that a violation has been committed by an
ACCESS PERSON, the Compliance Officer or designer shall give such person an
opportunity to supply additional information regarding the transaction in
question.
13. DISCLOSURE OF PERSONAL HOLDINGS
1. Initial Holdings Report and Acknowledgment Form. No later than 10 days
after a person becomes an ACCESS PERSON, the following information
must be provided:
a. the title, number of shares and principal amount of each security
in which the ACCESS PERSON had any direct or indirect beneficial
ownership when the person became an ACCESS PERSON;
b. the name of any broker, dealer or bank with whom the ACCESS
PERSON maintained an account in which any securities were held
for the direct or
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indirect benefit of the ACCESS PERSON as of the date the person
became an ACCESS PERSON; and
c. the date that the report is submitted by the ACCESS PERSON.
2. ANNUAL HOLDING REPORT AND ACKNOWLEDGEMENT FORM. Annually, the
following information (which information must be current as of a date
no more than 30 days before the report is submitted) must be provided:
a. the title, number of shares and principal amount of each security
in which the ACCESS PERSON had any direct or indirect beneficial
ownership;
b. the name of any broker, dealer or bank with whom the ACCESS
PERSON maintains an account in which any securities are held for
the direct or indirect benefit of the ACCESS PERSON; and
c. the date that the report is submitted by the ACCESS PERSON.
14. CERTIFICATION OF COMPLIANCE
Each ACCESS PERSON is required to certify initially and then annually that
he or she has read and understood the Code and recognizes that he or she is
subject to such Code. Further, each ACCESS PERSON is required to certify
annually that he or she has complied with all the requirements of the Code
and that he or she has disclosed or reported all personal securities
transactions pursuant to the requirements of the Code.
15. REVIEW BY THE BOARD OF TRUSTEES
1. The Board of Trustees must approve a material change to the Code no
later than six months after adoption of the material change.
2. At least annually, the Compliance Officer or designee shall furnish to
the Board of Trustees and the Board must consider, a written report
that includes:
a. any recommended changes to the Code or procedures;
b. a summary of any issues arising under the Code since the last
report to the Board, including, but not limited to, violations
which occurred during the past year with respect to which
significant remedial action was taken; and
c. certifications that the Fund, the Adviser and the Distributor
have adopted procedures reasonably necessary to prevent access
persons from violating the Code.
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16. SANCTIONS
1. SANCTIONS FOR VIOLATIONS BY ACCESS PERSONS
If the Compliance Officer or designee determines that a violation of
this Code has occurred, he or she shall so advise the Board of
Trustees and the Board may impose such sanctions as it deems
appropriate, including, inter alia, disgorgement of profits, censure,
suspension or termination of the employment of the violator. All
material violations of the Code and any sanctions imposed as a result
thereto shall be reported periodically to the Board of Trustees.
17. ADMINISTRATIVE PROCEDURES
1. DISTRIBUTION OF CODE OF ETHICS AND PROCEDURES ADOPTED UNDER THE CODE
Upon commencement of duty with the Adviser or any of its affiliates
each new employee shall receive a copy of the Code and related
Procedures. Thereafter, each such employee shall file an Initial
Holdings Report and Acknowledgment Form (see Exhibit C) with the
Compliance Officer or designee in a timely manner, indicating that
he/she has read and understands the Code, including the Policy
Statement on Insider Trading, and the Procedures under the Code.
The employee must also attend an orientation session with respect to
the Adviser's Code and related Procedures within 30 days of employment
unless a supervisor requests in writing that a 30-day extension of
time be granted in order to complete current business.
On an annual basis, each employee shall file with the Compliance
Officer or designee an Annual Holdings Report and Acknowledgment Form
(see Exhibit D) indicating that the employee has reviewed and
understands the provisions of the Code, including the Policy Statement
on Insider Trading, and the Procedures under the Code, and that he/she
has complied and will continue to comply, with the requirements
thereof, unless otherwise previously disclosed to the Compliance
Officer or designee.
2. RECORD KEEPING RESPONSIBILITIES
The Compliance Officer or designee shall be responsible for
maintaining custody of the following records for a period of five years from the
end of the fiscal year:
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a. A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved
in an easily accessible place.
b. all forms supplied to the Compliance Officer or designee by
employees;
c. all duplicate confirmations, Transaction Reports and brokerage
statements supplied to the Compliance Officer or designee
pursuant to the requirements of Section 11 of these Procedures;
d. all lists of employees used for the purpose of administering the
Code and related Procedures;
e. all Pre-Clearance Forms relating to the personal securities
transactions of employees; a copy of each Code and each set of
Procedures adopted thereunder;
f. a written record of each violation of the Code or related
Procedures, and a written record of any action taken as a result
of each such violation;
g. all employee Acknowledgment Statements referred to in Section 11
of the Procedures; and
h. a list of all persons who are required, or within the past five
years have been required, to make reports or who are or were
responsible for reviewing such reports pursuant to this Code.
3. MONITORING OF SECURITIES TRANSACTIONS OF EMPLOYEES
The duplicate confirmations supplied to the Compliance Officer or
designee pursuant to Section 11. of these Procedures shall be reviewed by the
Compliance Officer or designee in order to monitor compliance with the Code and
related Procedures. The Compliance Officer or designee shall develop review
procedures necessary to ensure compliance with the Code, including the Policy
Statement on Insider Trading, and Procedures related thereto.
4. ANNUAL SEMINARS
Annually, the Compliance Officer or designee will conduct a seminar
for the purpose of reviewing with all employees the Code and related Procedures.
Attendance at the Annual Review is mandatory. It is the responsibility of each
supervisor to ensure that employees subject to such person's submission attend
the Annual Review. Failure to attend such review will result in a letter of
admonition, censure or other sanction as deemed appropriate by the Compliance
Officer or designee. Such document will be placed in the violations file. Such
file
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is required to be maintained under the rules of the Investment Advisers Act
of 1940.
5. ANNUAL REPORTS
Once each year, the Compliance Officer or designee will report to the
Board of Trustees of the Adviser's investment company client accounts with
regard to evolving industry practices or developments in applicable laws or
regulations during the past year, recommended changes in the Policy Statement on
Insider Trading or Procedures under the Code, any violative conduct of a
substantial nature requiring significant remedial action occurring during the
last year, and other information as requested the director/trustees.
The Compliance Officer or designee will establish and review
procedures with respect to monitoring all personal security transactions by
employees and make periodic reports to the Board of Trustees of the Adviser's
investment company client.
18. PENALTIES FOR VIOLATIONS OF THE CODE
Employees violating or about to violate the provisions of the Code or
these Procedures may be subject to sanctions, which may include, among other
things, restrictions on such person's personal securities transactions; a letter
of admonition, education or formal censure; fines; suspension, reassignment,
demotion or termination of employment; or other significant remedial action.
Employees may also be subject to disgorgement proceedings for
transactions in securities that are inconsistent with Sections 5.1. and 5.m. of
the Code. Any profits realized on trades within any proscribed period (see
Section 4.5.) are required to be disgorged to charitable organizations,
eleemosynary institutions or nonprofit entities as determined by the Compliance
Officer or designee.
19. REQUIREMENTS FOR DISINTERESTED TRUSTEES
1. Every Disinterested Trustee shall file with the Compliance Officer or
designee a quarterly report containing the information required in
Section 11 of this Code with respect to transactions (other than
exempted transactions listed in Exhibit B) in any securities in which
such person has, or by reason of such transactions acquires, any
direct or indirect beneficial ownership, if such Trustee, at the time
of that transaction, knew or should have known, in the ordinary course
of pursuing his or her official duties as Trustee, that during the
15-day period immediately preceding or after the transaction by the
Trustee:
a. Such security was being purchased of sold by the Fund; or
b. Such security was being considered for purchase or sale by the
Fund.
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2. Notwithstanding the preceding section, any Disinterested Trustee may,
at his or her option, report the information described in Section 11
with respect to any one or more transactions and may include a
statement that the report shall not be construed as an admission that
the person knew or should have known of portfolio transaction by the
Fund in such securities.
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EXHIBIT A
BENEFICIAL OWNERSHIP
The purpose of this exhibit is to illustrate situations in which an employee has
or does not have direct or indirect BENEFICIAL OWNERSHIP of a security. If an
employee has direct or indirect BENEFICIAL OWNERSHIP of a "reportable security"
he/she is required to report transactions in the security according to the
provisions of Section VI. of the procedures adopted under the Code of Ethics
(the "Procedures"). If an employee has or acquires BENEFICIAL OWNERSHIP of a
"security requiring prior approval," he/she is required to pre-clear
transactions in such security according to the provisions of Section VI. of the
Procedures. In other words, with respect to securities beneficially owned by an
employee, the employee reports transactions in "reportable securities" and
pre-clears transactions in "securities requiring prior approval" as if the
transactions were his/her own.
1. GENERAL DESCRIPTION OF BENEFICIAL OWNERSHIP
As used in the Procedures, BENEFICIAL OWNERSHIP will be interpreted in the
same manner as it would be in determining whether a person is subject to
Section 16 of the Securities Exchange Act of 1934, except that the
determination of such ownership shall apply to all securities, including
equity securities. For the purpose of that Act, BENEFICIAL OWNERSHIP means:
the receipt of benefits substantially equivalent to those of ownership
through relationship, understanding, agreement, contract or other
arrangements; or
the power to vest such ownership in oneself at once, or at some future
time.
Using the above general definition as a broad guideline, the ultimate
determination of BENEFICIAL OWNERSHIP will be made in light of the facts of
the particular case. Key factors are the degree of the individual's ability
to exercise control over the security and the ability of the individual to
benefit from the proceeds of the security. Employees are encouraged to seek
the advice of the Compliance Officer or designee if they have any questions
concerning whether or not they have BENEFICIAL OWNERSHIP of any security.
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2. GENERAL RULES
i. SECURITIES HELD BY FAMILY MEMBERS
As a general rule, a person is regarded as the beneficial owner of
securities held in his/her name, as well as the name of his/her spouse
and their minor children. These relationships ordinarily confer to the
holders benefits substantially equivalent to ownership. In addition,
absent countervailing facts, it is expected that securities held by
relatives who share the same home as the reporting person will be
reported as beneficially owned by such person.
ii. SECURITIES HELD BY A CORPORATION OR PARTNERSHIP
Generally, ownership of securities in a company (i.e., corporation,
partnership, etc.) does not constitute BENEFICIAL OWNERSHIP with
respect to the holdings of the company in the securities of another
issuer. However, an owner of securities issued by a company will be
deemed to have BENEFICIAL OWNERSHIP in the securities holdings of the
company where:
the company is merely a medium through which one or several
persons in a small group invest or trade in securities;
the owner owns 25% or more of the outstanding voting securities
of, or a 25% or more equity interest in, the company; and
the company has no other substantial business.
In such cases, the person or persons who are in a position of control
of the company are deemed to have a BENEFICIAL OWNERSHIP interest in
the securities of the company.
iii. SECURITIES HELD IN TRUST
BENEFICIAL OWNERSHIP of securities in a private trust includes:
1. the ownership of securities as a trustee where either the
trustee or members of his "immediate family" have a vested
interest in the income or corpus of the trust;
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2. the ownership of a vested beneficial interest in a trust;
and
3. the ownership of securities as a settlor of a trust in which
the settlor has the power to revoke the trust without
obtaining the consent of all beneficiaries.
As used in this section, the "immediate family" of a trustee means:
a. a son or daughter of the trustee, or a descendent of either;
b. a stepson or stepdaughter of the trustee;
c. the father or mother of the trustee; and
d. a spouse of the trustee.
For the purpose of determining whether any of the foregoing
relations exists, a legally adopted child of a person shall be
considered a child of such person by blood.
iv. SECURITIES NOT BENEFICIALLY OWNED
BENEFICIAL OWNERSHIP does not include, however, indirect
investment by any person in portfolio securities held by:
1. any holding company registered under the Public Utility
Holding Company Act;
2. any investment company registered under the Investment
Company Act;
3. a pension or retirement plan holding securities of an issuer
whose employees generally are the beneficiaries of the plan;
and
4. a business trust with over twenty-five beneficiaries.
Participation in a pension or retirement plan will result in
BENEFICIAL OWNERSHIP of the portfolio securities if plan participants
can withdraw and trade the securities
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without withdrawing from the plan.
Upon selling, transferring or otherwise disposing of securities in
another company's 401(k) plan, the transaction must be pre-cleared
with the Compliance Department, if it consists of "reportable
securities."
3. EXAMPLES OF BENEFICIAL OWNERSHIP
i. Securities Held by Family Members
Example 1-A. X and Y are married. Although Y has an
independent source of income from a family inheritance and
segregates her funds from those of her husband's, Y contributes
to the maintenance of the family's home. X and Y have engaged in
joint estate planning and have the same financial advisor. Since
X and Y's resources are clearly significantly directed toward
their common property, they will be deemed to be beneficial
owners of each other's securities.
Example 1-B. X and Y are separated and have filed for
divorce. Neither party contributes to the support of the other. X
has no control over the financial affairs of his wife. X is not a
beneficial owner of Y's securities.
ii. Securities Held by a Company
Example 2-A. O is a holding company with five shareholders.
Although O's company does no business on its own, it has several
wholly owned subsidiaries which manufacture oil related products.
X is a controlling shareholder of O's company. X has a beneficial
interest in the securities holdings of O.
iii. Securities Held in Trust
Example 3-A. X is trustee of a trust created for his minor
children. When both of X's children reach 21, each will receive
an equal share of the corpus of the trust. X is a beneficial
owner of the trust.
Example 3-B. X is trustee of an irrevocable trust for his
daughter. X is a director of the issuer of the equity securities
held by the trust. The
A-4
<PAGE>
daughter is entitled to the income of the trust until she is 25
years old and is then entitled to the corpus. If the daughter
dies before reaching 25, X is entitled to the corpus. X should
report and pre-clear the securities transactions of the trust as
his own.
iv. Book Entry Shares in Public Companies
Certain widely held public companies provide for automatic
share accumulation programs directly from the respective
companies. Initial transactions pursuant to these programs must
be pre-cleared by the Compliance Officer or designee, but
subsequent investments do not require pre-clearance. However,
such holdings should be reported on the Initial/Annual Asset
Disclosure Form (see Exhibit C). Other types of automatic
programs that do not require pre-clearance include:
automatic withdrawal from checking account, monthly, for
investments in book entry shares in public companies; and
automatic reinvestment of dividends in established book
entry accounts with public companies.
v. Investment Clubs
Transactions by an Investment Club in which an employee is a
participant, partner or otherwise has a direct or indirect
BENEFICIAL OWNERSHIP, are subject to the pre-clearance and
reporting provisions described in the Procedures.
A-5
<PAGE>
EXHIBIT B
DISTINCTION BETWEEN "REPORTABLE SECURITIES" AND
"SECURITIES REQUIRING PRIOR APPROVAL"
The Procedures under the Code of Ethics require that certain employees obtain
the approval of the Compliance Officer or designee before purchasing or selling
any security requiring prior approval, and that such employees enable the
Compliance Officer or designee to receive duplicate confirmation for all of
their transactions in reportable securities. The table below is intended to show
the types of securities that are considered to be securities requiring prior
approval and reportable securities. This list does not purport to be an
exhaustive list of securities requiring prior approval and reportable
securities, and questions should be directed to the Compliance Officer or
designee when clarification is necessary.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Securities Requiring Reportable
Types of Securities Prior Approval Securities
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities No No
--------------------------------------------------------------------------------------------------------------
Money market instruments, such as bankers' acceptances,
certificates of deposit or repurchase agreements No No
--------------------------------------------------------------------------------------------------------------
Securities issued by an open-end investment company (including
the Adviser's clients) and unit investment trusts No Yes
--------------------------------------------------------------------------------------------------------------
Municipal bonds, notes and debentures No Yes
--------------------------------------------------------------------------------------------------------------
Securities and stock options issued by the Adviser, if any No Yes
--------------------------------------------------------------------------------------------------------------
Options on a stock market index, foreign currency, etc. No Yes
--------------------------------------------------------------------------------------------------------------
Unregistered or private placement securities Yes Yes
--------------------------------------------------------------------------------------------------------------
IPOs Yes Yes
--------------------------------------------------------------------------------------------------------------
Securities issued by a closed-end investment company Yes Yes
--------------------------------------------------------------------------------------------------------------
Securities issued or guaranteed by any foreign government, its
agencies or instrumentalities No No
--------------------------------------------------------------------------------------------------------------
Variable annuities issued by insurance company separate accounts No No
--------------------------------------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C>
--------------------------------------------------------------------------------------------------------------
All securities other than those described above,
including but not limited to:
- corporate bonds, notes and debentures
- equity stock, including common and preferred
(and options thereon) Yes Yes
- foreign securities, including ADRS, GDRS, etc.
- limited partnership interests
- rights and warrants
- securities acquired upon the exercise of rights,
warrants and options
--------------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
NOTES:
The following transactions are exempted from the pre-clearance and/or reporting
process, even it the security involved requires pre-clearance and/or reporting:
- Automatic reinvestment plans for mutual funds and other securities (the
initial investment is NOT EXEMPTED from this process)
- Purchases and sales that are non-violation
Municipal bonds, notes and debentures are exempted from the pre-clearance
requirement provided, the Adviser continues not to have any client account
activity in these types of securities.
================================================================================
B-2
<PAGE>
EXHIBIT C
(Privileged And Confidential Information)
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
LEPERCQ, DE NEUFLIZE SECURITIES, INC.
INITIAL HOLDINGS REPORT AND ACKNOWLEDGMENT FORM
To: ___________________________ , Compliance Officer
From: ______________________________________________ (Your Name)
Date: _________________________________________________________________________
This Initial Holdings Report (the "Report") is submitted pursuant to
Section 13 of the Code of Ethics and supplies information with respect to
securities in which I may be deemed to have, or to have had, any direct or
indirect beneficial ownership interest (whether or not such security is a
security held or to be acquired by a Client Account).
Unless the context otherwise requires, all terms used in the Report shall
have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics.
<TABLE>
<CAPTION>
Name of the Broker,
Dealer or Bank With
Whom Account in
Principal Amount Which Securities Were
Title of Securities Number of Shares Of Securities Held is Maintained
------------------- ---------------- ---------------- ---------------------
<S> <C> <C> <C>
</TABLE>
C-1
<PAGE>
ACKNOWLEDGMENT
I have read the Code of Ethics, the Policy Statement on Insider Trading and
the related Procedures, and I understand the requirements thereof. I certify
that I will comply with the above. I understand that any violation of the Policy
Statement on Insider Trading or the Code and the related Procedures may lead to
sanctions or other significant remedial action. I understand that, if I am an
"investment person," I may also be subject to disgorgement proceedings for any
short-term transactions that I may conduct that are inconsistent with Sections
5.l. and 5.m. of the Code.
I have disclosed to the Compliance Officer or designee all personal
securities holdings for which I have direct or indirect beneficial ownership and
I will continue to do so on an annual basis as long as I am employed with
Lepercq, de Neuflize & Co. Incorporated or any of its affiliates, and I will
continue to keep this information current with the Compliance Officer or
designee.
I understand that there are prohibitions, restrictions and blackout periods
on certain types of securities transactions.
Print Name
Signature
Date
C-2
<PAGE>
EXHIBIT D
(Privileged And Confidential Information)
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
LEPERCQ, DE NEUFLIZE SECURITIES, INC.
ANNUAL HOLDINGS REPORT AND ACKNOWLEDGMENT FORM
To: ___________________________ , Compliance Officer
From: ______________________________________________ (Your Name)
Date: _________________________________________________________________________
This Annual Holdings Report (the "Report") is submitted pursuant to Section
13 of the Code of Ethics and supplies information with respect to securities in
which I may be deemed to have any direct or indirect beneficial ownership
interest (whether or not such security is a security held or to be acquired by a
Client Account) as of December 31, ______.
Unless the context otherwise requires, all terms used in the Report shall
have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics.
<TABLE>
<CAPTION>
Name of the Broker,
Dealer or Bank With
Whom Account in
Principal Amount Which Securities Were
Title of Securities Number of Shares Of Securities Held is Maintained
------------------- ---------------- ---------------- ---------------------
<S> <C> <C> <C>
</TABLE>
D-1
<PAGE>
ACKNOWLEDGMENT
I have read the Code of Ethics, the Policy Statement on Insider Trading and
the related Procedures. I understand the requirements thereof, and except as
otherwise disclosed to the Compliance Officer or designee, I certify that I
have, to date, complied with, and will continue to comply with, such
requirements. I understand that any violation of the Policy Statement on Insider
Trading or the Code and the related Procedures may lead to sanctions or
significant remedial action. I understand that, if I am an "investment person,"
I may also be subject to disgorgement proceedings for any short-term
transactions that I may conduct that are inconsistent with Sections 5.l. and
5.m. of the Code.
In addition, I have reported or disclosed all personal securities
transactions required to be reported or disclosed pursuant to the requirements
of the Code and the related Procedures. I have reported to the Compliance
Officer or designee all additions and/or deletions of accounts for reportable
securities for which I have direct or indirect beneficial ownership held at
broker/dealers, companies or other institutions. I have disclosed all personal
securities for which I have direct or indirect beneficial ownership. I will
continue to do so on an annual basis as long as I am employed by Lepercq, de
Neuflize & Co. Incorporated or its affiliates.
I understand that there are prohibitions, restrictions and blackout periods
on certain types of securities transactions.
Print Name
Signature
Date
D-2
<PAGE>
EXHIBIT E
(Privileged And Confidential Information)
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
LEPERCQ, DE NEUFLIZE SECURITIES, INC.
QUARTERLY PERSONAL SECURITIES TRANSACTION REPORT
To: _______________________ , Compliance Officer
From: ____________________________________________ (Your Name)
Date: _______________________________________________________________________
This Quarterly Personal Securities Transaction Report ("Report") is
submitted pursuant to the Procedures under the Code of Ethics. The table below
lists information with respect to purchases or sales in any reportable security
in which I may be deemed to have a direct or indirect beneficial ownership
interest (whether or not such security is a security held or to be acquired by a
Client Account). I understand that I may have direct or indirect beneficial
ownership of securities of which certain other persons are the record owners as
well as securities of which I am the record owner, and I have included
transactions in such securities in this Report where applicable. I also
understand that I am not required to include in this Report transactions
effected for any account over which I do not have any direct or indirect
beneficial interest, influence or control.
I hereby certify that:
1. I am fully familiar with the Code of Ethics and the related Procedures and
the Policy Statement on Insider Trading.
2. To the best of my knowledge, the information furnished in this Report is
complete, true and correct.
Employee Signature
E-1
<PAGE>
<TABLE>
<CAPTION>
Nature of Name of the
Transaction Broker, Dealer
(whether Principal or Bank with
Purchase, Sale Amount of Price At or Through
or Other Type Number Securities Which the Whom The Nature of
Date of Title of Interest Maturity of Disposition Of Acquired or Transaction Transaction Ownership of
Transaction Security Rate Date Or Acquisition Shares Disposed Of Was Effected Was Effected Securities*
----------- -------- -------- -------- -------------- ------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
* If appropriate, you may disclaim beneficial ownership of any security
listed in this report.
Important Note: This Report is due no later than 10 calendar days after the end
of the calendar quarter.
E-2
<PAGE>
EXHIBIT F
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
LEPERCQ, DE NEUFLIZE SECURITIES, INC.
TRANSACTION REPORT: NEW ACCOUNT
To: ___________________________ , Compliance Officer or designee
From: ______________________________________________ (Your Name)
Date: _________________________________________________________________________
This Transaction Report: New Account (the "Report") is submitted pursuant
to Section 9 of the Procedures under the Code and supplies information with
respect to any account established by me in which any securities were held
during the quarter in which I may be deemed to have any direct or indirect
beneficial ownership interest (whether or not such security is a security held
or to be acquired by a Client Account) for the calendar quarter ended
________________.
Unless the context otherwise requires, all terms used in the Report shall
have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics.
<TABLE>
<CAPTION>
Name of Broker, Dealer or Bank With Whom Date Account
Account Was Established Was Established
---------------------------------------- ---------------
<S> <C>
</TABLE>
F-1
<PAGE>
EXHIBIT G
PROCEDURES FOR THE PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
1. SECURITIES TRANSACTIONS REQUIRING PRE-CLEARANCE
Employees who are deemed to be access persons desiring to purchase or sell a
security requiring prior approval must request approval from the Compliance
Officer or designee prior to execution of such transaction. (Note: Pre-clearance
is also required for transactions in securities requiring prior approval
whenever an employee has or acquires a beneficial ownership interest in such
security.) Failure to obtain pre-clearance when required will generally be
considered a violation of these Procedures.
Employees are encouraged to seek pre-clearance for all of their transactions in
reportable securities; however, pre-clearance is required only for transactions
in securities requiring prior approval. Exhibit B summarizes the difference
between reportable securities and securities requiring prior approval.
2. PRE-CLEARANCE PROCEDURE
The procedure described below shall be followed in order to ascertain whether a
proposed personal securities transaction by an employee should be approved or
disapproved. Employees should recognize that this procedure is designed to
provide legal protection to the Adviser, its clients and employees.
i. COMPLETION OF PART I OF PRE-CLEARANCE FORM
Requests for the pre-clearance of securities transactions shall be
documented by completion of the Pre-Clearance Form (see Exhibit H).
The employee seeking to purchase or sell a security requiring prior
approval shall complete Part I of the form in full and submit it to
the Compliance Officer or designee, and shall provide all of the
information required by Part I of the form.)
ii. COMPLETION OF PART II OF PRE-CLEARANCE FORM
The Compliance Officer or designee shall review the information in
Part I of the Pre-Clearance Form for completeness. If the proposed
transaction requires pre-clearance, or the employee seeks
pre-clearance even though it is not required, the Compliance Officer
or designee works with the Investments Department to complete Part II
of the form.
Part II of the Pre-Clearance Form is completed for the purpose of
ascertaining whether there are any potential conflicts of interest
between recent or anticipated securities transactions in client
accounts and proposed transactions by employees. However, the Adviser
believes that before an employee engages in any securities
transaction, such employee has a duty to determine that the proposed
transaction would not be in conflict with recent or proposed
securities transactions in client accounts and would otherwise be in
compliance with the Code and these Procedures.
G-1
<PAGE>
3. CONSIDERATIONS DURING THE PRE-CLEARANCE PROCESS
i. ANTICIPATED CLIENT ACCOUNT TRADES
For ACCESS PERSONS if any client account is considering the purchase
of the same or equivalent security, the Compliance Officer or designee
disapproves the proposed transaction if it is a purchase of the same
or equivalent security of the same issuer. If any client account is
considering the sale of the same or equivalent security, the
Compliance Officer or designee disapproves the transaction if it is a
sale of the same or equivalent security of the same issuer.
ii. PARALLEL TRANSACTIONS
For ACCESS PERSONS if a client account has recently purchased a
security, ordinarily there is no reason for the Compliance Officer or
designee to disapprove a subsequent purchase of the same or equivalent
security of the same issuer, provided all client account transactions
have taken precedence over the employee's proposed transaction and
there are no anticipated client account transactions in the same or
equivalent security of the same issuer. Likewise, if a client account
has recently sold a security, ordinarily there is no reason for the
Compliance Officer or designee to disapprove a subsequent sale of the
same or equivalent security, so long as there are no anticipated
client account transactions in the same or equivalent security of the
same issuer. Investment persons are subject to the seven-day blackout
period on all proposed transactions as described in Section II.C.4.
below.
iii. OPPOSITE TRANSACTIONS
If any client account has, within the past seven calendar days, sold
the same or equivalent security of the same issuer, the Compliance
Officer or designee disapproves the ACCESS PERSON'S proposed security
transaction if it is a purchase. If any client account has, within the
past seven calendar days, purchased the same or equivalent security of
the same issuer, the Compliance Officer or designee disapproves the
ACCESS PERSON'S transaction if it is a sale. INVESTMENT PERSONS are
subject to the seven-day blackout period on all proposed transactions
as described in Section H.C.4. below.
Depending on the circumstances in each case, it may be appropriate for
the Compliance Officer or designee to impose a "cooling-off period"
longer or shorter than the seven-day period described above. Some of
these circumstances could include whether the security is thinly
traded, the number and dollar volume of transactions of employees and
client accounts, and the employee's involvement in the investment
process. (Note: The day of the last client account trade is counted as
the first day of this seven day period.)
G-2
<PAGE>
iv. BLACKOUT PERIODS
A. Same Day
ACCESS PERSONS are prohibited from executing a securities
transaction on any day during which a client account has a
pending "buy" or "sell" order in that same or equivalent security
until that order is executed or withdrawn. "Pending" shall mean
that the Adviser is awaiting confirmation of the client's "buy"
or "sell" order for that day.
B. Seven-Day
INVESTMENT PERSONS are prohibited from buying or selling a
security within at least seven calendar days before or after a
client account trades in the same or equivalent security. (Note:
The day of the last client account trade is counted as the first
day of this seven calendar day period.)
If any client account purchases or sells a security within seven
days before or after a trade by an INVESTMENT PERSON, the
Compliance Officer or designee has the authority to require that
the employee's trade be unwound or canceled. The Compliance
Officer or designee shall require that the employee take such
action as necessary to unwind, reverse or disgorge such
securities. The Compliance Officer or designee shall direct the
employee to relinquish any profits obtained as a result of
unwinding or canceling the trade. Any losses or associated
commissions realized on trades within the prescribed period are
the responsibility of the employee who executed the trade during
a blackout period and as a result had to unwind or cancel the
trade.
C. 60-Day
INVESTMENT PERSONS are prohibited from profiting in the purchase
and voluntary sale, or sale and voluntary purchase, of the same
or equivalent security within 60 calendar days of a trade by any
client account.
If such employee purchases and sells the same or equivalent
security or other property of the same issuer during this 60-day
blackout period, the Compliance Officer or designee shall direct
the employee to relinquish any profits obtained from such
short-term transactions. The Compliance Officer or designee may
adopt rules providing for exceptions upon application on a
case-by case basis.
D. Conflict of Interest Monitoring
All personal trades executed by ACCESS PERSONS will be monitored
by the Compliance Officer or designee for current and future
conflicts of interest with client accounts.
G-3
<PAGE>
4. OPTIONS
Any transaction in an option by an ACCESS PERSON will require pre-clearance
by the Compliance Officer or designee and may be approved but only if there
are no apparent conflicts of interest as a result of the pre-clearance
process.
As described previously, an option relating to common stock will be treated
as an "equity security" for purposes of the pre-clearance process. If the
employee has sought pre-clearance for an options transaction, the
Compliance Officer or designee reminds the employee that pre-clearance is
required for both the opening and closing transaction. He/She also advises
the employee that if the opening transaction is approved, the closing
transaction could be difficult to approve due to apparent conflicts of
interest or competing obligations that arise after the time the employee's
opening transaction was approved. In cases where the pre-clearance process
indicates that bona fide, apparent conflicts of interest exist or where
obligations to client accounts appear to be in competition with the
securities transactions of employees, the first preference and priority
must be given to transactions of client accounts. Consequently, the
approval of options transactions can be delayed in order to establish that
first preference and priority has been given to client accounts.
Effectively, therefore, options transactions take on an added element of
risk -- the rapidly declining time value of options is coupled with the
need, in some cases, to delay closing transactions of individuals to ensure
that first preference and priority is given to the execution of any pending
client account transactions.
Because of the foregoing, employees must recognize that closing options
transactions can be disapproved or delayed in certain cases and that
additional risks can therefore result from engaging in options
transactions.
5. INITIAL PUBLIC OFFERING (IPOS) AND PRIVATE PLACEMENTS
INVESTMENT PERSONS are prohibited from acquiring a Security issued during
an IPO or an unregistered security issued in a private placement without
the prior written approval of the Compliance Officer or designee. Under
normal circumstances, such approval will not be withheld if the employee
demonstrates in writing that: (1) the investment is not suitable for one or
more of the Adviser's clients, (2) the investment opportunity was unique to
the individual circumstances of the employee, (3) the investment did not
involve employment with the Adviser or its affiliated broker-dealer as a
consideration by the offeree, and (4) no overreaching would or could occur.
INVESTMENT PERSONS who have been authorized to acquire securities issued
during an IPO or in a private placement must disclose such investment to
the Investment Policy Committee when such INVESTMENT PERSON plays a part in
any subsequent consideration of any investment in the issuer by a client
account and that the client's decision to purchase securities of the issuer
should be subject to an independent review by the Committee.
G-4
<PAGE>
6. NON-INVESTMENT GRADE CORPORATE BONDS
If an ACCESS PERSON wishes to purchase a corporate bond that is held in one
or more client accounts AND which is currently not rated or rated less than
investment grade, the Compliance Officer or designee disapproves the
proposed transaction. (For further details, see Section 7 of the Procedures
adopted under the Code.)
7. APPROVAL
Unless the employee's proposed transaction has been disapproved, the
Compliance Officer or designee indicates his approval of the transaction by
signing the Pre-Clearance Form. The form is kept on file in the Compliance
Office, as required under Section 17 of the Procedures.
Ordinarily, the securities transactions of employees will be disapproved if
they fail to meet the foregoing approval criteria. However, in some
circumstances it may be appropriate for a securities transaction to be
approved even though one or more of the above criterion indicates that the
transaction should be disapproved. In such cases, the reason for justifying
such a trade will be described in the "Comments" section of the
Pre-Clearance Form or on a supplemental sheet to the form.
8. APPROVAL PERIOD
Execution of an approved securities transaction is permissible through the
date indicated in Part I of the Pre-Clearance Form, provided that,
ordinarily, execution shall be effected no later than the day following the
date of the request for pre-clearance.
9. PROCEDURE FOR APPEALING DISAPPROVED SECURITIES TRANSACTIONS
If any employee believes that a disapproved securities transaction should
have been approved, he/she may appeal the decision of the Compliance
Officer or designee by presenting a written request for approval to the
Chief Executive Officer of the Adviser.
G-5
<PAGE>
EXHIBIT H
PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
(Note: Execution of all approved transactions should be effected no later than
the following the date of request for prior approval.)
PART 1: To be completed by Lepercq, de Neuflize & Co. Incorporated and Lepercq,
de Neuflize Securities, Inc. employee seeking pre-clearance.
<TABLE>
<S> <C>
-------------------------------------------------------------------------------------------------------------------
1a. Employee Name:
-------------------------------------------------------------------------------------------------------------------
2. Department:
-------------------------------------------------------------------------------------------------------------------
3. Phone #:
-------------------------------------------------------------------------------------------------------------------
4. Date of Request:
-------------------------------------------------------------------------------------------------------------------
5. Name of Issuer/Security:
-------------------------------------------------------------------------------------------------------------------
5a. Quantity (specify Par/Shares/Contracts):
-------------------------------------------------------------------------------------------------------------------
5b. Is this a purchase or sell transaction?
-------------------------------------------------------------------------------------------------------------------
5c. Security Type (common, option, bond etc.):
-------------------------------------------------------------------------------------------------------------------
5d. CUSIP Number and TICKER Symbol:
-------------------------------------------------------------------------------------------------------------------
5e. Is this security a new issue (IPO)?
-------------------------------------------------------------------------------------------------------------------
5e. Is this an unregistered or private placement security?
-------------------------------------------------------------------------------------------------------------------
5f. Is this security a corporate bond that is unrated below investment grade?
-------------------------------------------------------------------------------------------------------------------
6. Have you purchased or sold equivalent securities, of the same issuer, within the past 60 calendar days
-------------------------------------------------------------------------------------------------------------------
7. Date by which proposed transaction is to be completed:
-------------------------------------------------------------------------------------------------------------------
8. Name of broker/dealer to provide duplicate confirmation to Compliance Office:
-------------------------------------------------------------------------------------------------------------------
</TABLE>
H-1
<PAGE>
--------------------------------------------------------------------------------
Employee Certification:
To the best of my knowledge, no Lepercq, de Neuflize & Co. Incorporated client
account is considering the purchase or sale of the same (or equivalent)
securities of this issuer.
I have read the Code of Ethics and related Procedures and the Policy Statement
on Insider Trading within the past year, and I believe that this transaction
complies with the Code and related Procedures and with the Statement of Policy
on Insider Trading.
Employee's Signature:
----------------------------
--------------------------------------------------------------------------------
H-2
<PAGE>
PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
PART II: TO BE COMPLETED BY COMPLIANCE OFFICER OR DESIGNEE AND TRADING DESK
--------------------------------------------------------------------------------
CUSICUSIP Number or TICKER Symbol:
--------------------------------------------------------------------------------
Issuer/Issuer/Security Name:
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
----------------------------------------------------------------------------
1. Have any transaction involving this security been made in any
Lepercq, de Neuflize & Co. Incorporated client account within the
last 15 days?
----------------------------------------------------------------------------
2. Are there any pending or anticipated transactions by any Lepercq,
de Neuflize & Co. Incorporated client account involving this
security?
----------------------------------------------------------------------------
3. Do any Lepercq, de Neuflize & Co. Incorporated client accounts
currently holding this security? If, Yes,
----------------------------------------------------------------------------
4. (a) Qty Held (b) Date and (c) Type ("P" or "S") of last
transaction/ (d) "*" if any transaction is pending
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>
5. Reviewed By: ________________________
(Head Trader) (Date)
6. Approved By: ________________________
(Compliance Officer) (Date)
7.
----------------------------------------------------------------------------
Comments:
----------------------------------------------------------------------------
H-3
