PALM BEACH INVESTMENT ADVISERS, INC.
CODE OF ETHICS - INVESTMENTS
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Effective as of January 1, 1997
I. Definitions
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A. "PBIA" means any employee of Palm Beach Investment Advisers.
B. "Access Persons" means any director, officer, or Advisory Person of
Palm Beach Investment Advisers who has access to client account
management, planning, and implementation. (Access Person includes:
Advisory Persons, Investment Personnel, and Portfolio Managers.)
C. "Advisory Person" means any employee of PBIA who, in connection with
his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of securities for
any client account, or whose functions relate to the making of any
recommendations with respect to such purchases or sales, and any
natural person in a control relationship to PBIA who obtains
information concerning recommendations made to any client account with
regard to the purchase of sale of securities.
D. "Investment Personnel" means Portfolio Managers as well as any
employee of: PBIA
II. Statement of General Principles
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It is the policy of Palm Beach Investment Advisers that:
A. With respect to their personal investment activities, it is the duty
of Access Persons at all times to place the interests of the clients
first.
B. All personal securities transactions of Access Persons be conducted
consistent with this Code of Ethics and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of Access
Person's and Advisory Person's position of trust and responsibility.
C. Access Persons should not take inappropriate advantage of their
positions with respect to their personal investment activities.
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III. Exempted Transactions
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The provisions of Section IV of this Code of Ethics shall not apply to
purchases or sales of securities which:
A. Are effected in an account or in a manner over which the Access Person
has no direct or indirect influence or control;
B. The client accounts are not permitted to purchase or sell in
accordance with their investment policies and restrictions;
C. Are effected pursuant to a systematic dividend reinvestment, cash
purchase, or withdrawal plan;
D. Are effected in connection with the exercise of sale of rights to
purchase additional securities from an issuer and granted by such
issuer pro rata to all holders of a class or its securities; or
E. Are issued by the government of the United States or, with respect to
short-term debt securities, its agencies or instrumentalities, or are
bankers' acceptances, bank certificates of deposits, commercial paper,
or shares of registered open-end investment companies (mutual funds);
F. Are effected in connection with the call by the issuer of a preferred
stock or bond:
G. Are effected in connection with the exercise by a second party of a
put or call option;
IV. Prohibited Purchases and Sales
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A. Except in a transaction exempted by Section III of this Code of
Ethics, no Access Person shall purchase or sell, directly or
indirectly, any security in which he or she has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership on a
day during which PBIA has a pending "buy" or "sell" order in the same
security until that order is executed or withdrawn.
B. Investment Personnel may not acquire any securities in an initial
public offering.
C. Investment Personnel may not invest in a private placement of
securities unless the individual receives prior approval of the
compliance officer of PBIA. Prior approval shall not be given if the
compliance officer of PBIA believes that the investment opportunity
should be reserved for PBIA clients or is being offered to the
individual by reason of his or her position with PBIA. Any such
investments by the compliance officer of PBIA must receive the prior
approval of a Disintered Director or PBIA director who is not an
access person.
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Investment Personnel who invest in a private placement must disclose
that investment to all Portfolio Managers of PBIA who are considering
an investment in the issuer thereof on behalf of PBIA, and all such
investments must be independently reviewed by the compliance officer
of PBIA.
D. Except in transactions exempted by Section III of this Code of Ethics,
Investment Personnel shall not profit from the purchase and sale, or
sale and purchase, of the same (or equivalent) securities within 60
calendar days.
E. Investment Personnel shall not serve on the board of directors of
publicly traded companies without prior authorization of the Board of
Directors of PBIA. The Board of Directors of PBIA may so authorize
such board service only if it determines that such board service is
consistent with the interests of PBIA and its clients.
V. Reporting and Compliance Procedures
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A. Every access Person shall report to PBIAs' compliance officer the
information described in Section V of this Code of Ethics which
respect to transactions in any security in which such Access Person,
has or by reason of such transaction acquires, any direct or indirect
beneficial ownership in the security. Prior to effecting a transaction
in any security subject to the pre-clearance requirement of Section
VI(A) of this Code of Ethics, any Access Person shall report to PBIA's
compliance officer the name of the security involved, the nature of
the transaction (i.e. purchase or sale or any other type of
acquisition or disposition) and the name of the broker, dealer, or
bank with or through whom the transaction will be affected.
B. With respect to the reports required to be made by Section V(A) of
this Code of Ethics, not later than ten (10) days after the end of the
calendar quarter the following information to be provided to the
compliance officer of PBIA:
(1) Title and the amount of the securities involved;
(2) Date and nature of the transaction (i.e., purchase, sale or other
acquisition or disposition);
(3) Price at which the transaction was effected; and,
(4) Name of the broker/dealer, or bank through whom the transaction
was effected.
C. Investment Personnel shall direct their brokers to supply Palm Beach
Investment Advisers' compliance officer, on a timely basis, duplicate
copies of confirmations of all personal securities transactions and
copies of all periodic statements for all accounts.
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D. Each year, Access Persons shall certify to Palm Beach Investment
Adviser's compliance officer that (1) they have read and understand
this Code of Ethics and recognize that they are subject thereto, and
(2) they have complied with the requirements of this Code of Ethics
and that they have disclosed or reported all personal securities
transactions required to be disclosed or reported pursuant to the
requirements of this Code of Ethics.
E. All Access persons are required within 10 days of commencement of
employment with PBIA and, thereafter within 30 days after the end of
each calendar year, to report all securities in which the Access
Person has any direct or indirect beneficial interest, as well as the
name of any broker, dealer or bank with whom the Access Person
maintained an account in which any such securities were so held, to
Palm Beach Investment Advisers' compliance officer.
F. Each year Palm Beach Investment Advisers' compliance officer shall
prepare an annual report to Palm Beach Investment Advisers' board of
directors that:
(1) Summarizes existing procedures concerning personal investment and
any changes in the procedures made during the past year;
(2) Identifies any violations requiring significant remedial action
during the past year; and,
(3) Identified any recommended changes in existing restrictions or
procedures based upon Palm Beach Investment Adviser's experience
under this Code of Ethics, evolving industry practices, or
developments in applicable laws or regulations.
G. Investment Personnel are required, upon commencement of employment, to
report all of their personal securities holdings to Palm Beach
Investment Advisers' compliance officer.
VI. Pre-Clearance Procedures
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The purpose of the pre-clearance procedures set forth below is to aid all
Access Persons in avoiding the making of prohibited purchase and sale
transactions for regular accounts (private, corporate, institutional), or
mutual funds. The supervision and administration of the pre-clearance
procedures set forth below will be the direct responsibility of PBIA's
compliance officer.
A. Responsibility of Access Persons. It will be the responsibility of
each Access Person to notify PBIA's compliance officer or designee of
the name of the company whose securities he or she intends to purchase
or sell prior to making a non-exempt transactions. (Security
transactions which will be exempt from pre-clearance procedures are
set forth below in Section E). It will be such Access Person's
additional responsibility not to conclude the contemplated
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security transaction until Palm Beach Investment Advisers' compliance
officer gives a "yes" answer. Should the compliance officer give a
"no" answer, the Access Person will have the responsibility of
abstaining from making the intended security transaction. The Access
Person may re-enter his or her request for pre-clearance of the same
company as many times as he or she wishes.
B. Automatic Pre-Clearance by Palm Beach Investment Advisers' Compliance
Officer. Upon being notified by an Access Person of the name and
company whose security he or she intends to purchase or sell as a
non-exempt transaction, Palm Beach Investment Advisers' compliance
officer, or designee, will take the following steps in a timely
manner, without revealing the name of the Access Person seeking the
pre-clearance authorization.
(1) Ask the Portfolio Managers whether any securities or options
therein of the company names is being considered for sale or
purchase within the next seven days.
(2) If any of the above respondents gives a "yes" answer, Palm Beach
Investment Advisers' compliance officer will give a "no" answer
to the Access Person requesting pre-clearance of the intended
personal security transaction. If all of the above respondents
give a "no" answer, the compliance officer of Palm Beach
Investment Advisers will give a "yes" answer to the Access Person
making the pre-clearance request. Such pre-clearance
authorization is valid for two days. Every effort will be made to
respond to the Access person's request for pre-clearance the same
day the request is made.
C. Pre-Clearance Request Within the Seven-Day Waiting Period. In addition
to the automatic pre-clearance procedure set forth in paragraph 2
above, any Access Person may submit a pre-clearance request within the
seven-day waiting period. Such request may be cleared at the
discretion of Palm Beach Investment Advisers' compliance officer if
all contemplated client activity in the security has been completed
and the proposed transaction is consistent with such client activity.
Consistent activity would be where an Access Person wishes to purchase
a security previously purchased by an individual client account or
fund or wishes to sell a security previously sold by an individual
account or fund.
D. Record Keeping Responsibility of Palm Beach Investment Advisers'
Compliance Officer. Palm Beach Investment Advisers' compliance officer
or designee, will maintain a pre-clearance logbook. In it will be
recorded information with regard to every pre-clearance request as
follows:
(1) Date
(2) Name of Access Person making request
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(3) Name of company for which securities were requested to be
pre-cleared
(4) Palm Beach Investment Advisers' Compliance Officer's Approval
(Section VI. A-"Yes" or "No")
The Palm Beach Investment Advisers' compliance officer will maintain
confidentiality of the pre-clearance logbook.
E. Security Transactions which are Exempt from Pre-Clearance Procedures.
Security transactions which are exempt from the above pre-clearance
procedures are those which:
(1) Are effected in an account or in a manner over which the Access
Person has no direct or indirect influence or control;
(2) The client accounts are not permitted to purchase or sell in
accordance with their investment policies and restrictions;
(3) Are effected pursuant to a systematic dividend reinvestment plan,
systematic cash purchase plan, or systematic withdrawal plan;
(4) Are effected in connection with the exercise or sale of rights to
purchase additional securities from an issuer and granted by such
issuer pro-rata to all holders of a class of its securities;
(5) Are effected in connection with the call by the issuer of a
preferred stock or bond;
(6) Are effected in connection with the exercise by a second party of
a put or call option;
(7) Are effected in connection with the approaching expiration of a
put or call option as a closing transaction no more than five
business days prior to such expiration; or
(8) Are for the purchase or sale of securities issued by the
government of the United States or its agencies or
instrumentalities, or are banker's acceptances, bank certificates
of deposit, commercial paper, or shares of registered open-end
investment companies.
F. Quarterly Review of Transactions. At the end of each quarter, Palm
Beach Investment Advisers' compliance officer will review the
exception report prepared by the accounting department of Palm Beach
Investment Advisers.
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VII. Operating Guidelines (Investment Personnel Only)
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A. Entertainment
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Entertainment by suppliers of goods and services to purchasers is an
established business practice. Also, many desire to give luncheon or
dinner meetings in order to make the best use of their own time in
contacting purchasers of their research services. Therefore, the
following entertainment practices will be acceptable:
X Breakfasts
X Luncheons
X After work cocktails
X Dinners
Also, the following entertainment practices will be acceptable on an
occasional basis:
X Tickets to theatrical performances and sporting events
X Other recreational events such as boating, fishing, golf, tennis,
etc.
All of the above should be accepted in moderation and on a selective
basis. Excessive entertainment is to be avoided in order to avoid any
suggestion of bias in favor of that suppliers goods or services.
B. Research Conferences
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Attendance at research conferences at which other benefits are
provided will be acceptable; however, reimbursements of travel and
hotel room expenses by brokers must not be accepted. In no case will
expenses of other family members be reimbursed.
C. Gifts
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Gifts by suppliers of goods and services to purchases is an
established business practice; however, any such gifts with a value in
excess of $50.00 must be returned. In no case should any gifts from a
single source be accepted which aggregate more than $50.00 in any
calendar year.
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VIII.Sanctions
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Upon discovering a violation of this Code of Ethics, the Board of Directors
of Palm Beach Investment Advisers shall impose appropriate sanctions
including censure, suspension, or termination of employment.
Revised 08/31/00
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