EXHIBIT (17)(c)
STATE STREET RESEARCH & MANAGEMENT COMPANY
CODE OF ETHICS
Revised March 1, 2000
This Code of Ethics establishes rules of conduct that govern the personal
investment activities of employees, officers and directors or trustees of (i)
State Street Research & Management Company and its subsidiaries (collectively,
"State Street Research" or the "Company"), and (ii) registered investment
companies (other than money market funds) for which the Company is the primary
investment adviser ("Funds").
1. General Provisions.
1.1. Purpose Statement. In pursuing its mission of being a premier
investment management organization, State Street Research has earned a
reputation for the highest integrity. An important contributor to this
reputation is our philosophy of always placing the interests of our clients
first. This Code contains uniform standards which are intended to provide us
with a high level of confidence that our personal investment activities are
consistent with our clients' interests and do not interfere with our mission.
1.2. Overriding Principles. Every Access Person who engages in Personal
Transactions must: (i) consider the interests of the Company's clients before
initiating a Personal Transaction, and place the clients' interests first,
particularly in the case of any security that might provide a suitable and
beneficial opportunity for any client; (ii) not use his or her position with the
Company to influence a broker, dealer or underwriter to effect a Personal
Transaction for the benefit of the Access Person; and (iii) conduct all Personal
Transactions in accordance with the provisions of this Code and in avoidance of
any actual or potential conflicts of interest or abuse of fiduciary
responsibilities.
2. Applicability and Definitions. The following definitions describe the
persons, securities, accounts and transactions to which this Code applies:
2.1. "Associate" means any person in the employment of the Company.
2.2. "Access Person " means any director or officer of State Street
Research or any associate of State Street Research who, in connection with his
or her regular functions or duties, participates in the selection of a client's
portfolio securities or has access to information regarding a fund's future
purchases or sales of portfolio securities on behalf of any clients.
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2.3. "Investment Person" means any Access Person directly involved in the
investment process of the Company, including portfolio managers, security
analysts, research associates and trading personnel.
2.4. "Portfolio Manager" means any Access Person responsible for the
overall investment management of a client's portfolio and any Access Person
assisting directly in such management, and also includes any member of the
Company's Management Committee.
2.5. "Security" means any stock, bond, debenture, note, convertible
security, or any put, call, straddle, warrant, right or option with respect to a
security, or any future or other investment contract or derivative, or, in
general, any interest or investment commonly known as a security, but does not
include securities which are direct obligations of the Government of the United
States, bankers' acceptances, bank certificates of deposit, commercial paper and
high quality short-term debt instruments (including repurchase agreements), or
shares of registered open-end investment companies.
2.6. "Personal Account" means (a) any securities account in which an Access
Person has "beneficial ownership" (as described in Exhibit A), including certain
accounts of family members and other related accounts, or (b) any account over
which the Access Person (or any member of the Access Person's immediate family
sharing the same household, except as exempted under Section 6.2) has direct or
indirect influence or control with respect to the purchase or sale of individual
securities. See Exhibit A for a fuller explanation and examples of situations
involving beneficial ownership. Unless otherwise specified, the provisions of
this Code applicable to transactions by Access Persons are applicable to
transactions in their Personal Accounts.
2.7. "Personal Transaction" means any transaction with respect to a
security for any Personal Account, including without limitation purchases and
sales, entering into or closing out futures or other derivatives, and exercising
warrants, rights or options but not including the acceptance of tender offers.
3. Prohibitions.
3.1. Restrictions Applicable to all Access Persons An Access Person should
not place an order to enter into a Personal Security Transaction during any of
the following times:
(a) When the Access Person knows, or has reason to believe, that the
security may in the near future be recommended for action or
acted upon by the Company for any client account; or
(b) For a period of ten (10) business days after a security has been
recommended for action by the Company for any client account,
including any rating change, even though no action has been taken
for the Company's clients with respect to the security during
that period; or
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(c) When the security is on order for purchase or sale for a client's
account, or has been on order at any time during the five (5)
preceding trading days (either as a completed order, an
uncompleted order or an order on hold), as reflected on the
Company's Restricted List.
3.2. Restrictions Applicable Only to Investment Persons. In addition to the
restrictions applicable to all Access Persons, an Investment Person may not:
(a) Purchase a security in an initial public offering; or
(b) Acquire a security in a private placement unless advance written
approval is obtained from the Chief Executive Officer or the
Chief Investment Officer of the Equity or Fixed Income
Department, as appropriate. In the event that the Investment
Person plays a part in any subsequent consideration of the
security for investment for a client account, he or she must
disclose the holding to the Chief Executive Officer or the
appropriate Chief Investment Officer, and any decision to make
the investment for a client account will be subject to an
independent review and approval by senior investment personnel
with no personal interest in the issuer or its securities; or
(c) Realize a profit from any transaction involving the purchase and
sale, or sale and purchase, of the same (or equivalent)
securities within a period of sixty (60) calendar days. For
purposes of this rule, transactions will be reviewed on a
first-in-first-out basis.
(d) Participate in an investment club.
3.3. Restrictions Applicable Only to Portfolio Managers. In addition to the
restrictions applicable to all Access Persons and Investment Persons, a
Portfolio Manager may not purchase or sell a security within a period of seven
(7) calendar days before or after a client account managed by the Portfolio
Manager trades in that security.
3.4. Special Provisions for Options and Futures.
(a) The general principle governing transactions in options, futures
and other derivatives is that they are treated as transactions in
the underlying security for all purposes of this Code.
(b) Purchased options must comply with the Code both at the time of
initial purchase and at the time of exercise. However, if an
Access Person buys a call or put option at a time when the
purchase is not restricted by Section 3.1, the option may be
exercised automatically at expiration by the relevant exchange or
clearing corporation without violating that provision.
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(c) Written options must comply with this Code at the time of the
transaction. Exercise by a counterparty, however, is not a
voluntary transaction by an Access Person and is not governed by
Section 3.1.
(d) In the case of a purchased call or a written put, the security
received upon exercise (whether voluntary or automatic) is
subject to the 60-day period in Section 3.2 (c) measured from the
time of purchasing the call or writing the put. As a result, if
such an option is exercised within the 60-day period, the
Investment Person cannot sell the security at a gain until
expiration of the 60-day period from the time of the original
option transaction. In these circumstances, the Investment Person
must be prepared to pay for the security, accept delivery and
bear the risk of holding the security until expiration of the
period.
(e) An Access Person may not write an uncovered call or sell an
uncovered future. An Investment Person may not write a covered
call option unless the underlying security has been held for 60
days. Where an Investment Person purchases a put option and owns
the underlying security, the put option may not expire or be
exercised within 60 days after purchase of the underlying
security. Where an Investment Person purchases a put option
without owning the underlying security, the option cannot be
exercised and can only be closed through a sale more than 60 days
after the purchase.
Futures and other derivatives will be treated consistently with
the provisions applicable to options.
3.5. Receipt of Gifts. Except for an occasional meal or ticket to a
sporting event or the theater, or comparable entertainment which is not so
frequent or extensive as to raise questions of propriety, or except with the
approval of the Company's Chief Executive Officer, an Associate must not accept
cash or non-cash gifts from any person or entity which directly or indirectly
does business with or performs services for the Company or any client, which
exceed the dollar limit imposed by the NASD from time to time under Conduct Rule
2830(1)(5)(A) or any successor rule ($100 as of February 1999), or such other
level as established from time to time by the Compliance Committee.
3.6. Service as a Director. An Investment Person may not serve on the board
of directors, or similar governing body, of an organization the shares of which
are publicly traded without obtaining prior approval of the Company's Chief
Executive Officer (or, in case such Investment Person is the Chief Executive
Officer, the Company's Board of Directors with the Chief Executive Officer
abstaining). Any such approval will be reported to the Board of Directors of
each Fund at least annually.
3.7. Promotion of Personal Investments. Associates are free to refer
investment opportunities to other Associates for their personal consideration.
However, Associates should not engage in the active promotion of securities to
other Associates and should not receive any payment or other benefit for the
sale of a security to another associate.
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3.8. Conflicts of Interest. Associates should not engage in activities that
could create a conflict of interest or the appearance of a conflict of interest
between the interests of the Company's clients and the interests of the Company
or its Associates. For example, no Associate should condition the company's
purchase or continued holding of any security for its clients on whether the
issuer of that security becomes or remains a client of the Company.
4. Pre-Clearance.
Any Access Person who plans to place an order to enter into a Personal
Transaction must first pre-clear the transaction by obtaining approval from the
Equity Trading Desk, the Fixed Income Trading Desk, the Head Municipal Bond
Trader, the Head High Yield Trader or the Head International Fixed Income
Trader, as appropriate, either directly or through other communications links
established for this purpose. The appropriate trading personnel will only
pre-clear the transaction after determining that the security is not on the
Company's Restricted List and that no order has been placed or, to their
knowledge, is about to be placed with respect to the security. All clearances
(including time of clearance) will be recorded by the appropriate trading
personnel in the Investment Clearance Database or other system used to maintain
this information.
Generally, a pre-clearance is effective only for the business day on which
it is obtained. A clearance for an open order (such as a limit order or "good
until cancelled" order) is effective until the transaction is completed, except
that any change in the terms of the order will require a new pre-clearance.
5. Disclosure and Reporting.
5.1. List of Holdings. Each Access Person shall provide a list of all of
his or her personal securities holdings to the Compliance Department within 10
days of commencement of his or her employment or within 10 days of becoming an
Access Person, and will also provide an updated list on an annual basis at the
time designated by the Compliance Department
5.2. Confirmations and Statements. Each Access Person who engages in
Personal Transactions shall instruct his or her broker(s) or dealer(s) to
deliver duplicate copies of any confirmation of a transaction, and duplicate
copies of all periodic statements with respect to his or her Personal
Account(s), to the Company, P.O. Box 2794, Boston, MA 02208-2794. (See Exhibit B
for a sample letter to a broker or dealer.
5.3. Transaction Reports. Each Access Person shall report on a quarterly
basis any Personal Transactions in his or her Personal Account(s), except for
transactions in securities which are excluded from the term "security" for
purposes of this Code under Section 2.5. The report shall be made on the
official form designed for this purpose within ten (10) calendar days following
the quarter in which the transactions occur, shall be dated and signed by the
Access Person, and shall contain the following information:
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(a) With respect to any security transaction during the quarter:
(1) The title and number of shares (or principal amount) of the
security;
(2) The date and nature of the transaction (purchase or sale or
other);
(3) The transaction price;
(4) The name of the broker (or bank or dealer); and
(5) Such additional information as may be requested on the reporting
form.
(b) With respect to any account established by the Access Person in which
any securities were held during the quarter:
(1) The name of the broker (or bank or dealer) with whom the account
was established; and
(2) The date the account was established.
The quarterly report of any Investment Person must contain a
representation that the Investment Person: as a portfolio manager, has reviewed
the suitability of the security for each of the clients whose accounts he or she
manages; or as an investment analyst, has presented any opportunity for
securities within his or her area of coverage to the firm for consideration for
client accounts.
5.4 Certification of Compliance. Each Access Person shall be required to
certify annually that he or she:
(a) Has read and understands this Code and is subject thereto;
(b) Has complied with the requirements of the Code; and
(c) Has disclosed or reported all Personal Securities Transactions
required to be disclosed or reported under the Code.
6. Exemptions.
6.1. Transactional Exemptions. The prohibitions and restrictions in Section
3 and the pre-clearance requirements in Section 4 shall not apply (but the
reporting requirements in Section 5 shall continue to apply) to:
(a) Transactions by investment clubs in which non-Investment Persons are
participants;
(b) Purchases or sales of securities which are not voluntary;
(c) Purchases which are part of an automatic dividend reinvestment plan;
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(d) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities;
(e) Transactions in derivatives tied to the performance of a broad-based
index, and transactions in SPDR's and shares of other UIT's or
vehicles the performance of which is designed to track closely the
performance of a broad- based index;
(f) Transactions in currencies and related options, futures contracts and
forward contracts; and
(g) Transactions in other securities determined by the Compliance
Committee to present a similarly low potential for impropriety or the
appearance of impropriety.
6.2. Complete Exemption. The prohibitions and restrictions in Section 3,
the pre-clearance requirements in Section 4 and the reporting requirements in
Section 5 shall not apply to:
(a) Any transaction in an instrument which is not included in the
definition of "security" contained in Section 2.5.
(b) Transactions effected for any account which is a Personal Account
solely because it is directly or indirectly influenced or controlled
by an Access Person's immediate family member sharing the same
household, so long as neither the Access Person nor the family member
has any beneficial ownership of securities in the Account and so long
as the Access Person agrees in writing not to discuss with the family
member any specific investment ideas or transactions arising in the
course of the Access Person's employment with the Company.
(c) Transactions effected for any account over which neither the Access
Person nor any immediate family member sharing the same household has
any direct or indirect influence or control; provided that in the case
of an account exempted because it is under the discretionary
management of another person (including an interest in a hedge fund or
investment partnership or enterprise but not including an interest in
a trust that is not revocable by the Access Person or an immediate
family member sharing the same household), the Access Person must
enter into a letter agreement with that person in substantially the
form of Exhibit C at the later of the time the account is opened or
the Access Person joins the Company, and on an annual basis
thereafter, and the Access Person must provide an annual inventory of
the securities in such account.
6.3. Large Cap Stock Exemption. The prohibitions of Section 3.1 and Section
3.3 shall not apply (but the prohibitions in Section 3.2 (Restrictions
Applicable Only to Investment Persons), the preclearance requirements in Section
4 and the reporting requirements in Section 5 shall continue to apply) to equity
securities with a market capitalization of $5 billion or greater as of the end
of the previous month.
7. Compliance Committee.
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The Chief Executive Officer of the Company will from time to time appoint
the members of the Company's Compliance Committee, which is charged with the
duties and responsibilities of administering the Code, ensuring compliance with
the Code, and recommending sanctions for violations of the Code. The Compliance
Committee may amend the Code, interpret its provisions, make decisions with
respect to the classes of Access Persons covered by provisions of the Code, and
grant waivers and establish exceptions, including waivers and exceptions for
particular securities or transactions and other situations it deems to require
special treatment. The Committee may appoint one or more of its members to
fulfill its duties between meetings, subject to ratification by the Committee at
its next regular meeting. The Committee has appointed the Director of Compliance
as the person responsible for monitoring compliance with the Code of Ethics,
including the review of the quarterly transaction reports and the annual
holdings reports.
8. Sanctions.
Upon the occurrence of any violation of this Code, the Company acting
through its Compliance Committee may impose such sanctions as it deems
appropriate, including disgorgement of any profit, a warning, probation,
suspension or termination of employment.
9. Reports To Trustees/Directors of Investment Companies Under Management.
A report shall be prepared annually for submission to the Board of Trustees
or Directors of each investment company under the management of the Company. The
report will:
(a) Summarize current procedures under the Code and any changes in
those procedures since the prior report;
(b) Identify all material violations of the Code or any related
procedures, and any sanctions imposed with respect thereto;
(c) List any recommended changes to the Code or procedures under the
Code as the result of experience, evolving industry practices or
changes in the applicable laws or regulations; and
(d) Certify that procedures, reasonably necessary to prevent
violations of the Code, have been adopted.
10. Provisions Applicable To Mutual Fund Trustees
10.1. General Provision. An independent trustee of an investment company
for which the Company is the primary adviser should not purchase or sell a
security in an account in which he or she may be deemed to have a direct or
indirect beneficial interest, as defined in Exhibit A hereto, when he or she
knows, or in the ordinary course of his or her duties should know, that such
security is under consideration for purchase or sale, or being purchased or
sold, by the investment company. In addition, an independent trustee must report
to the investment company
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any transactions in a security where the trustee knew, or in the ordinary course
of fulfilling his or her official duties should have known, that during the 15
day period immediately preceding or after the date of the transaction, the
investment company was buying or selling, or considering buying or selling, that
security.
10.2. Portfolio Reports. In connection with their duties, independent
trustees of an investment company are provided, prior to a trustees' meeting,
with schedules of securities transactions effected by such investment company
during a specific period (generally a calendar quarter) ended more than 15 days
prior to delivery of the schedules. Consequently, an independent trustee in the
ordinary course of fulfilling his or her duties shall be deemed to have no duty,
and would have no reason, to know of, or inquire about, a transaction in a
security by the investment company during a 15 day period immediately preceding
or after the trustee's transaction in that security. In the event an independent
trustee does become aware of such a transaction, the independent trustee shall
file a report under this Code containing the information described in Section
5.3.
10.3. Exempted Transactions. Transactions by independent trustees which do
not fall within the above restrictions and reporting requirements are
transactions in securities which are direct obligations of the Government of the
United States, bankers' acceptances, bank certificates of deposit, commercial
paper, shares of registered open-end investment companies, and transactions as
to which the trustee had no investment discretion.
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EXHIBIT A
BENEFICIAL OWNERSHIP
"Beneficial ownership" is an important concept in determining which
personal securities accounts are covered by the Code. Beneficial ownership
exists when you have a "pecuniary interest" in securities.
More specifically, beneficial ownership of securities in an account means
directly or indirectly having or sharing a direct or indirect pecuniary interest
in the securities, whether through any contract, arrangement, understanding,
relationship or otherwise. A "pecuniary interest", in turn, means the
opportunity, directly or indirectly, to profit, or share in any profit derived,
from the transactions in question.
The pecuniary interest standard looks beyond the record owner of
securities. As a result, the definition of beneficial ownership is extremely
broad and encompasses many situations which might not ordinarily be thought to
confer ownership of securities.
Set forth below are some examples of how beneficial ownership may arise in
different contexts:
Family Holdings. Securities held by members of your immediate family
sharing the same household are presumed to be beneficially owned by you. Your
"immediate family" includes any child, step-child, grandchild, parent,
step-parent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law (but does not
include aunts and uncles, or nieces and nephews). The definition also includes
adoptive relationships. You may also be deemed to be the beneficial owner of
securities held by an immediate family member not living in your household if
the family member is economically dependent upon you.
Partnership and Corporate Holdings. A general partner of a general or
limited partnership will generally be deemed to beneficially own securities held
by the partnership. A limited partner or a stockholder will generally not be
deemed to beneficially own securities held by a limited partnership or
corporation, respectively, provided he or she does not own a controlling voting
interest in the entity, he or she does not have or share investment control over
the entity's portfolio, and the entity is not an "alter ego" or "personal
holding company". However, see Section 6.2(c) of the Code.
Derivatives. A person having the right to acquire securities through the
exercise or conversion of any derivative security, whether or not presently
exercisable, has beneficial ownership of the underlying securities. For this
purpose the term "derivative security" means any option, future, warrant,
convertible security, stock appreciation right, or similar right with an
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exercise or conversion privilege at a price related to a security, or similar
security with a value derived from the value of a security.
Trust Holdings. In general, a person's interest in a trust will amount to
an indirect pecuniary interest in the securities held by that trust. Therefore,
among other examples, a beneficiary of a trust will generally be deemed the
beneficial owner of securities held by the trust. However, the following persons
will generally not be deemed beneficial owners of the securities held by a
trust:
(a) Trustees, unless the trustee has a pecuniary interest in any holding
or transaction of the trust, or unless the trustee has any direct or
indirect influence or control with respect to the purchase or sale of
individual securities. A trustee will be deemed to have a pecuniary
interest in the trust's holdings if at least one beneficiary of the
trust is a member of the trustee's immediate family;
(b) Settlors, unless a settlor reserves the right to revoke the trust
without the consent of another person.
Securities Not Beneficially Owned. You are not deemed to have beneficial
ownership of:
(a) Portfolio securities held by an investment company registered under
the Investment Company Act of 1940;
(b) Securities of which you are a pledgee with the right to sell the
pledged security, provided that you will have beneficial ownership
upon any foreclosure or exercise of the right of sale;
(c) Rights you may have which are the same as all holders of a class of
securities of any issuer to receive securities pro rata, or
obligations to dispose of securities as a result of a merger, exchange
offer, or consolidation involving the issuer of the securities;
(d) An interest in broad-based index options, broad-based index futures,
and broad-based publicly traded market baskets of stocks approved for
trading by the appropriate federal government authority, nor in an
interest in any underlying securities of these instruments. A
broad-based index is one that provides investors with a performance
indicator of the overall applicable stock or bond market (or market
segment) as appropriate. An index would not be considered to be
broad-based if it is composed of securities of firms in a particular
industry or group of related industries;
(e) A security that may be redeemed or exercised only for cash and does
not permit the receipt of equity securities in lieu of cash, if the
security either:
(i) is awarded pursuant to an employee benefit plan satisfying the
provisions of 240.16b-3(c); or
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(ii) may be redeemed or exercised only upon a fixed date or dates at
least six months after award, or upon death, retirement, disability or
termination of employment; or
(f) An interest or right to participate in employee benefit plans of the
issuer.
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EXHIBIT B
(SAMPLE LETTER TO BROKER)
(Date)
(Name and Address of Broker)
Dear :
In connection with my brokerage account (Account No. ________) at your
firm, please be advised that State Street Research & Management Company should
be designated an "interested party" with respect to my account and should,
therefore, be sent copies of all trade confirmations and account statements
relating to my account. Please send the information to:
State Street Research & Management Company
John W. McCormick Post Office
P. O. Box 2794
Boston, MA 02208-2794
Any questions should be submitted to our Director of Compliance, (617)
357-1398.
Thank you for your attention to this matter.
Sincerely,
(SSRM Access Person)
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EXHIBIT C
_________ __, 2000
[Name of Investment Adviser]
[Address of Investment Adviser]
Dear Mr. _______________:
As you know, I am an employee of State Street Research & Management Company
("SSRM"), and I therefore need to comply with SSRM's Code of Ethics with respect
to all accounts in which I have a beneficial interest, including the [identify
specific account]. Accordingly, I would like to confirm with you, as investment
adviser for such account, the manner in which the assets of the account are to
be invested and the degree of communication which you and I will have with
respect to the account.
Please note that I must not be consulted about, or have any input into or
knowledge of, the transactions placed by you, as an investment adviser for the
account, in any individual securities prior to the execution of such
transactions. I am permitted, consistent with SSRM's Codes of Ethics, to discuss
with you broad policy matters, such as: overall defensive or aggressive
postures, asset allocation by broad categories, tax matters such as tolerance
for gains and losses, and cash disbursement requirements for taxes or otherwise.
Please sign in the space indicated below acknowledging your agreement with
this arrangement and return it to me.
Thank you very much for your assistance.
Sincerely,
[SSRM employee]
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The foregoing is accepted and agreed to:
[Name of Investment Adviser]
By:________________________
Name:
Title:
Dated: _____________ __, 2000
cc: Director of Compliance
State Street Research
& Management Company
