<PAGE>
Exhibit 2(r)(2)
DENVER INVESTMENT ADVISORS LLC
ETHICS RULES
including
CODE OF ETHICS, INSIDER TRADING POLICY, and
GIFT and OUTSIDE EMPLOYMENT POLICY
Amended Effective December 15, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
I. INTRODUCTION AND STATEMENT OF POLICY...................................................................... 1
A. STATEMENT OF GENERAL PRINCIPLES...................................................................... 1
B. THE ETHICS RULES..................................................................................... 1
II. SUMMARY OF ETHICS RULES.................................................................................. 3
A. CODE OF ETHICS....................................................................................... 3
1 Securities to Which the Code Applies............................................................ 3
2 Persons to Whom the Code Applies and Applicable Rules........................................... 3
2.1 Access Persons............................................................................. 3
2.2 General.................................................................................... 3
2.3 Preclearance and Reporting................................................................. 4
2.4 Restrictions............................................................................... 4
B. INSIDER TRADING POLICY............................................................................... 4
1 General......................................................................................... 4
2 What to do if in Possession of Material Nonpublic Information................................... 5
C. GIFT AND OUTSIDE EMPLOYMENT POLICY................................................................... 5
III. GENERAL INFORMATION....................................................................................... 6
A. ENFORCEMENT.......................................................................................... 6
B. CAUTION REGARDING PERSONAL TRADING ACTIVITIES........................................................ 6
C. COMMUNICATIONS WITH OUTSIDE DIRECTORS AND TRUSTEES OF INVESTMENT COMPANIES ADVISED BY DENVER
INVESTMENT ADVISORS.................................................................................. 6
D. INTERNAL USE......................................................................................... 6
E. FORMS................................................................................................ 7
IV: APPENDICES DETAILING THE ETHICS RULES(Index).............................................................. 8
</TABLE>
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION I: INTRODUCTION AND STATEMENT OF POLICY
A. STATEMENT OF GENERAL PRINCIPLES
Denver Investment Advisors LLC ("Denver Investment Advisors") and its members,
officers, and employees (as defined herein, "Access Persons") are cognizant of
and committed to the performance of their fiduciary duties under general
corporate law and as more specifically articulated in the Investment Company Act
of 1940 (the "1940 Act") and the Investment Advisers Act of 1940 (the "Advisers
Act"), including, without limitation, proscriptions against overreaching, self-
dealing, insider trading, and conflicts of interests. Moreover, with respect to
certain legal matters and ethical questions arising in the course of their
deliberations and actions, Denver Investment Advisors and its Access Persons
regularly seek the advice of counsel.
These Ethics Rules are directed to the particular objectives of compliance with
the provisions of Rule 17j-1 under the 1940 Act and with various provisions of
the Advisers Act, and to the prevention of engagement in any personal securities
transactions by Access Persons which might conflict with or adversely affect the
interests and welfare of the Clients of Denver Investment Advisors.
The general principles and procedures which guide the activities of all Access
Persons are augmented by these Ethics Rules, which are based upon the
fundamental recognition that Access Persons have a fiduciary relationship with
Denver Investment Advisors' clients, which requires the maintenance by all such
individuals of the highest standards of integrity and conduct.
Professional and legal responsibilities to Denver Investment Advisors' Clients
dictate that not only conflicts of interests, but the appearance of conflicts of
interests, be avoided. Although compliance by Access Persons with the
provisions of these Ethics Rules is mandatory, codes of ethics cannot define all
conflict and potential conflict situations. Therefore, in addition to assuring
that one's conduct comports with these Rules, Access Persons must avoid engaging
in any conduct that may create a conflict of interest or the potential for a
conflict of interest. Access Persons must adhere not only to the letter but
also to the spirit of the Ethics Rules and the principles articulated herein.
B. THE ETHICS RULES
Denver Investment Advisors operates under this Code of Ethics, Insider Trading
Policy, and Gift and Outside Employment Policy (collectively the "Ethics Rules")
which apply to all members, officers and employees of Denver Investment Advisors
and, in certain instances, to their family members. Persons subject to the
Ethics Rules are encouraged to invest in investment companies advised by Denver
Investment Advisors. These persons are also permitted to personally invest in
individual securities in accordance with the Ethics Rules. Outside Directors of
Denver Investment Advisors advised investment companies who are not members,
officers or employees of Denver Investment Advisors are not subject to the
Ethics Rules.
<PAGE>
The Ethics Rules are intended to ensure that these persons (i) at all times
place first the interests of Denver Investment Advisors' clients (collectively
and as applicable "Clients"), (ii) recognize, respect, and act in the best
interests of the Clients, (iii) conduct all personal trading consistently with
the Ethics Rules and in such a manner as to avoid any actual or potential
conflict of interest or any abuse of the person's position of trust and
responsibility, (iv) not take inappropriate advantage of their positions with
Denver Investment Advisors, (v) not use any material nonpublic information in
securities trading, and (vi) avoid any situations which might compromise their
exercise of fully independent judgment in the interests of or on behalf of
Clients. In May 1994 the Investment Company Institute issued the REPORT OF THE
-------------
ADVISORY GROUP ON PERSONAL INVESTING. The Denver Investment Advisors' code
------------------------------------
incorporates the general principles and virtually all of the suggestions of the
ICI report. The Ethics Rules also establish policies regarding other matters,
such as outside employment and the disbursement or receipt of gifts.
Each member, officer and employee will be provided a copy of the Ethics Rules,
as well as a copy of the Code of Ethics for any registered investment company
for which Denver Investment Advisors serves as investment Adviser or Sub-
Adviser. Each member, officer and employee of Denver Investment Advisors is
required to read and retain the Ethics Rules, as well as the Codes of Ethics for
various investment companies for which Denver Investment Advisors serves as
Adviser or Sub-Adviser, and to sign and return the attached Acknowledgment Form
to Designated Investment Representatives upon commencement of employment or
other services, and on an annual basis thereafter. The Acknowledgment (i)
confirms that the person signing it has received, read and asked any questions
necessary to understand the Ethics Rules, (ii) evidences the person's agreement
to conduct himself in accordance therewith, and (iii) confirms that the person
has complied with the Ethics Rules during such time as the person has been with
Denver Investment Advisors. Various persons will be required to submit reports
or obtain clearances as discussed more fully below and in the applicable
Appendices.
The Ethics Rules are administered by the Compliance Officer and the Management
Committee, and certain matters relating to the Ethics Rules are referred
specifically to a Designated Investment Representative, the Compliance Officer,
and other individuals with compliance responsibility. Such compliance personnel
and committee members are identified in Appendix 1 Part A. The supervisory
procedures relating to the Ethics Rules and the duties and operations of the
Management Committee are discussed in Appendix 5 Parts A and B, respectively.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION II: SUMMARY OF ETHICS RULES
The Ethics Rules, including especially the Code of Ethics and the Insider
Trading Policy discussed below, apply to transactions in Covered Securities for
your personal accounts and any other accounts in which you have any beneficial
ownership. Generally speaking, you may be deemed the beneficial owner of any
account in which you have a direct or indirect financial interest. Such
accounts include, without limitation, accounts held in the name of your spouse,
your minor children, a relative sharing your home, or a trust under which you or
such persons are a beneficiary. See Appendix 1 Part B for a more complete
discussion of beneficial ownership.
A. CODE OF ETHICS
The Code of Ethics (the "Code") imposes certain investment restrictions and
prohibitions, and requires certain reports as set forth below:
1 Securities to Which the Code Applies
------------------------------------
The Code applies to Covered Securities, which are subject to various
trading prohibitions and reporting obligations. "Covered Securities"
generally include all securities and their derivatives, whether publicly or
privately traded. However, Covered Securities do not include
. shares of registered open-end investment companies,
. direct obligations of the U.S. government,
. high quality short-term debt instruments, including but not limited to
bankers acceptances, bank certificates of deposit, commercial paper, and
repurchase agreements, and
. exempt investments.
Some Covered Securities, such as direct obligations of foreign governments,
derivatives on indices, and various securities acquired through dividends,
pro rata rights, or other corporate actions, must be reported but are
exempt from the trading prohibitions. See Appendix 2 Part A for additional
information.
2 Persons to Whom the Code Applies and Applicable Rules
-----------------------------------------------------
2.1 Access Persons. For purposes of these Ethics Rules, "Access Persons"
include all members, officers and employees of Denver Investment
Advisors. The Code applies to all Access Persons.
2.2 General. Any person subject to the Code is prohibited from:
2.2.1 Engaging in short sales of Covered Securities known by such
person to be owned by Clients;
<PAGE>
2.2.2 Purchasing initial public offerings and hot issues;
2.2.3 Short-term trading;
2.2.4 Benefitting personally from actions taken for Clients;
2.2.5 Profiting from the market effect of Client transactions;
2.2.6 Disclosing Client portfolio transactions without prior
approval;
2.2.7 Engaging in fraudulent conduct; or
2.2.8 Investing in derivatives to evade application of the Code.
2.3 Preclearance and Reporting. Access Persons must preclear all
transactions in Covered Securities, must provide periodic reports
regarding their holdings and personal transactions in Covered
Securities, and are subject to various additional investment
restrictions.
2.4 Restrictions. The following is a list of some restrictions applicable
to Access Persons:
2.4.1 Blackout Period
2.4.2 Restrictions on Service as a Director
2.4.3 Disclosure of Interests
2.4.4 Broker-Dealer Investments
2.4.5 Hedge Funds, Investment Clubs, and Other Groups
2.4.6 Investments in Investment Companies advised by Denver
Investment Advisors
See Appendix 2 Part C for additional information.
B. INSIDER TRADING POLICY
The Insider Trading Policy prohibits persons from communicating or acting on
material nonpublic information and requires persons to report such information
to a Designated Investment Representative or the Management Committee.
1 General
-------
The Insider Trading Policy (the "Policy") applies to every member, officer
and employee of Denver Investment Advisors and prohibits such persons, as
well as their spouses and others, from trading on material nonpublic
information, either personally or on behalf of others (including Clients),
and from communicating material nonpublic information to others in
violation of the law. Material nonpublic information is commonly known as
"Inside Information," and trading on such information is commonly referred
to as "Insider Trading." The Policy is drafted broadly, and will be
applied and interpreted in a similar manner. See Appendix 3 Part B for
additional information on Insider Trading and the proper treatment of
Inside Information.
<PAGE>
2 What to do if in Possession of Material Nonpublic Information
-------------------------------------------------------------
If you think you may have Inside Information, you should immediately report
such information to one of the Designated Investment Representatives and
refrain from discussing it with any other person. See Appendix 3 Part B
for additional information on these and related procedures.
C. GIFT AND OUTSIDE EMPLOYMENT POLICY
The Ethics Rules prohibit persons from giving or receiving certain business-
related gifts. The Ethics Rules also prohibit any member, officer or employee
from engaging in outside employment unless he or she has given written notice to
a Designated Investment Representative and, in the case of securities-related
employment, has received the prior written approval of a Designated Investment
Representative. See Appendix 4 for additional information.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION III: GENERAL INFORMATION
A. ENFORCEMENT
Upon discovering a violation of the Ethics Rules, Denver Investment Advisors may
impose such sanctions as it deems appropriate, including termination of
employment. For more information about sanctions which may be imposed, see
Appendix 5 Part C.
B. CAUTION REGARDING PERSONAL TRADING ACTIVITIES
Certain personal trading activities may be risky not only because of the nature
of the transactions, but also because the potential action necessary to close
out a position may, for some personnel, become prohibited while the position
remains open. For example, the fulfillment of the obligations owed by Access
Persons to Denver Investment Advisors may heighten the risks associated with
various investments, such as short sales and transactions in derivatives.
Furthermore, if Denver Investment Advisors becomes aware of material nonpublic
information, or if a Client is active in a given security, some personnel may
find themselves "frozen" in a position. Denver Investment Advisors will not
bear any losses in personal accounts resulting from the implementation of these
Ethics Rules.
C. COMMUNICATIONS WITH OUTSIDE DIRECTORS AND TRUSTEES OF INVESTMENT COMPANIES
ADVISED BY DENVER INVESTMENT ADVISORS
As a regular business practice, Denver Investment Advisors attempts to keep the
Trustees and Directors of its investment company clients informed with respect
to its investment activities through reports and other information provided to
them in connection with board meetings and other events. In addition,
personnel are encouraged to respond to inquiries from Trustees and Directors,
particularly as they relate to general strategy considerations or economic or
market conditions affecting the funds. However, it is Denver Investment
Advisors' policy not to communicate specific trading information and advice on
specific securities to the Trustees and Directors; i.e., no information should
be given on securities for which current activity is being considered for
Clients. Any pattern of repeated requests by a Trustee or Director should be
reported to the Compliance Officer.
D. INTERNAL USE
The Ethics Rules are intended solely for internal use. For more information
regarding limitations on disclosing to others the Ethics Rules and actions taken
pursuant to the Rules, see Appendix 5 Part C.
<PAGE>
E. FORMS
Blank forms for use in complying with the Ethics Rules are contained in Appendix
6. Such forms may be revised from time to time, as the Management Committee
shall determine. Please contact the Compliance Officer if you need additional
forms or if you have any questions.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION IV: APPENDICES DETAILING THE ETHICS RULES
(Index)
The following appendices set forth in detail the Ethics Rules summarized above.
Such appendices are incorporated herein by reference.
APPENDICES
1 DEFINITIONS
A. Personnel..................................................... 1-1
B. Beneficial Ownership.......................................... 1-1
2 CODE OF ETHICS
A. Overview and Covered Securities (including exemptions)........ 2-1
B. Periodic Acknowledgments and General Prohibitions............. 2-2
C. Investment and Trade Limitations.............................. 2-4
3 INSIDER TRADING POLICY
A. Background Information........................................ 3-1
B. Procedures to Implement Policy................................ 3-3
4 GIFT AND OUTSIDE EMPLOYMENT POLICY
A. Gifts......................................................... 4-1
B. Outside Employment............................................ 4-1
5 OTHER
A. Supervisory and Compliance Review Procedures.................. 5-1
B. Role of the Management Committee in Compliance................ 5-4
C. General Information About the Ethics Rule..................... 5-5
6 FORMS
A. Forms......................................................... 6-1
- Request for Preclearance
- Request for Special Preclearance
- Acknowledgment
- Securities Ownership and Business Positions
- Account Information
- Certification of Non-influence and Non-control over Beneficially
Owned Accounts
- Quarterly Verification
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 1 DEFINITIONS
A. PERSONNEL
References in the Ethics Rules to the following persons shall mean:
Designated Investment Representatives - Todger Anderson and Jeff Adams
Designated Trading Representatives - Corporate Bonds - Bill Stafford and
Jerry Powers
Designated Trading Representatives - Municipal Bonds - Tom Stevens
Compliance Manager - Pam Weber
Compliance Officer - Lou Kahanek
The above information shall be updated from time to time to reflect any changes
in personnel that may occur.
B. BENEFICIAL OWNERSHIP
The provisions of the Ethics Rules apply to transactions in securities for any
account "beneficially owned" by a person subject to the Rules. "Beneficial
ownership" shall be interpreted in the same manner as it would be in determining
whether a person is subject to the provisions of Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934 and the rules and regulations thereunder. Thus,
for example, you should be aware that the term "beneficial ownership"
encompasses securities held in the name of your spouse, your minor children, or
a relative sharing your home (collectively "Related Parties"), or held in the
name of a trust under which you or a Related Party are a beneficiary, or held
under any other arrangement in which you share a pecuniary interest (that is,
the opportunity, directly or indirectly, to profit or share in any profit
derived from a transaction in a Covered Security). The Management Committee may,
on a case-by-case basis, exempt certain accounts and transactions from any
provision of the Ethics Rules, if, in its view, application of the Ethics Rules
is not necessary or appropriate.
The provisions of these Ethics Rules shall not apply to purchases or sales
effected in any account over which there is no direct or indirect influence or
control. Access Persons relying upon this provision will be required to file a
certification form with the Compliance Officer regarding any such accounts (see
form entitled "Certification of Non-influence and Non-control Over Beneficially
Owned Accounts" in Appendix 6).
"Managed Accounts," defined as accounts for members, officers or employees, or
their family members, that are managed by Denver Investment Advisors or other
investment advisers in a discretionary capacity, except for reporting
requirements, are not covered by these Ethics Rules so long as such person has
no direct or indirect influence or control over the account. The employment
relationship between the account holder and the individual managing the account,
in the absence of other facts indicating control, will not be deemed to give
such account holder influence or control over the account.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 2 CODE OF ETHICS
A. OVERVIEW AND COVERED SECURITIES (including exemptions)
Following is an overview of the Code and a discussion of securities covered by,
and exempted from the Code.
1 Overview
--------
In general, it is unlawful for persons affiliated with investment advisers
and investment companies to engage in personal transactions in securities
which are held or are to be acquired by the investment adviser or the
registered investment company, if such personal transactions are made in
contravention of rules which the Securities and Exchange Commission (the
"SEC") has adopted to prevent fraudulent, deceptive and manipulative
practices. Such rules require each registered investment company and each
investment adviser for such investment company to adopt its own written
code of ethics containing provisions reasonably necessary to prevent its
access persons from engaging in such conduct, and to maintain records, use
reasonable diligence, and institute such procedures as are reasonably
necessary to prevent violations of such code. This Code and information
reported hereunder will enable Denver Investment Advisors to fulfill its
obligations under such rules.
2 Covered Securities (including exemptions)
-----------------------------------------
2.1 Code Applicability and Definition of Covered Securities. The trading
prohibitions and reporting obligations of the Code apply to all direct
or indirect acquisitions or dispositions of Covered Securities,
whether by purchase, sale, gift, inheritance, or otherwise, including
Covered Securities acquired in any Denver Investment Advisors
compensation benefit or retirement plan. Employees do not need to
separately report on Denver Investment Advisors benefit and retirement
plan. Compliance staff will review files maintained by the personnel
department to ensure compliance. "Covered Securities" generally
include all securities, whether publicly or privately traded, and any
option, or forward contract, or other obligation, including a security
whose value is derived or based on any of the above (a "derivative").
However, the following shall not be deemed to be Covered Securities
and shall be exempt from the trading prohibitions, preclearance
requirements, and reporting obligations of this Code:
2.1.1 Shares of registered open-end investment companies;
<PAGE>
2.1.1.1 See Appendix 2, Section C. 11 for specific
restrictions on investments in open-end investment
companies advised by Denver Investment Advisors.
2.1.2 Direct obligations of the U.S. government;
2.1.3 High quality short-term debt instruments, including, but not
limited to, bank certificates of deposit, bankers' acceptances,
repurchase agreements, and commercial paper; and
2.1.4 "Exempt Investments" include all obligations that are not
securities as defined in the Investment Company Act of 1940, as
amended, including, but not limited to; commodities,
derivatives not traded on a national securities exchange on
commodities or currencies, and life insurance or annuity
contracts.
2.2 Covered Securities and Transactions Exempt from Trading Prohibitions
(but Reportable)
The following Covered Securities and transactions are exempt from the
trading prohibitions and preclearance requirements, but are
nevertheless subject to the reporting obligations, of this Code:
2.2.1 the purchase or receipt of direct obligations of a foreign
government for which a liquid market exists;
2.2.2 the purchase or receipt of any derivative on any index of
securities (not otherwise exempted as an Exempt Investment
above);
2.2.3 the acquisition of securities through stock dividends, dividend
reinvestments, stock splits, reverse stock splits, mergers,
consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all
holders of the same class of such securities; and
2.2.4 the acquisition of securities through the exercise of rights
issued by an issuer pro rata to all holders of a class of
securities, to the extent the rights were acquired in the
issue.
B. PERIODIC ACKNOWLEDGMENTS AND GENERAL PROHIBITIONS
All Access Persons must provide Acknowledgment Forms and comply with the General
Prohibitions as discussed below and must also comply with the applicable
provisions of Part C below.
<PAGE>
1 Acknowledgment Forms
--------------------
Each Access Person must, within 10 calendar days of commencement of
services and annually thereafter, complete an Acknowledgment Form stating
that he or she has reviewed and complied with the Ethics Rules including
the Code of Ethics, Insider Trading Policy, and Gift and Outside Employment
Policy and has disclosed or reported all applicable securities
transactions. Each Access Person must also complete the "Securities Owned
and Business Position form" and attach it to the Acknowledgment form.
Unless otherwise directed, such forms should be given to the Compliance
Manager.
2 General Prohibitions
--------------------
Any Access Person subject to this Code is prohibited from:
2.1 Engaging in short sales of Covered Securities that such person knows
are held by or being considered for sale by, any Client.
2.2 Purchasing, in an initial public offering, Covered Securities for
which no public market in the same or similar securities of that
issuer has previously existed. No securities may be purchased in an
offering that constitutes a "hot issue" as defined in the rules of the
NASD. Such securities may be purchased, however, where the individual
has an existing right to purchase the security based on his or her
status as an investor, policyholder or depositor of the issuer and the
Access Person has obtained preclearance for the transaction in
accordance with section C.1 of this code. In addition, securities
issued in reorganizations are also outside the scope of this
prohibition if the transaction involves no investment decision on the
part of the employee except in connection with a shareholder vote.
2.3 Inducing or causing a Client to take action, or to fail to take
action, to benefit an account in which the person has a beneficial
interest, rather than to benefit such Client. For example, an employee
would violate this Code by causing a Client to purchase a security
owned by the employee for the purpose of supporting or increasing the
price of that security or causing a Client to refrain from selling a
security in an attempt to protect a personal investment, such as an
option on that security.
2.4 Using knowledge of portfolio transactions made or contemplated for
Clients to profit by the market effect of such transactions.
2.5 Disclosing current portfolio transactions made or contemplated for
Clients as well as any other nonpublic information to anyone outside
of Denver Investment Advisors without the prior written approval of a
Designated Investment Representative. "Current" transactions shall
include transactions for which information is not provided to
investment company customers as a matter of policy. Such policy is
separately set by the Management Committee and may be amended from
time to time.
<PAGE>
2.6 Engaging in fraudulent conduct in connection with the purchase or
sale, directly or indirectly, of a security held or to be acquired by
a Client, including without limitation:
. Employing any device, scheme or artifice to defraud any Client;
. Making to any Client any untrue statement of material fact or
omitting to state to any Client a material fact necessary in
order to make the statements made, in light of the circumstances
under which they are made, not misleading;
. Engaging in any act, practice or course of business which
operates or would operate as a fraud or deceit upon any Client;
or
. Engaging in any manipulative practice with respect to any Client.
For purposes of this Section 2.6, a security held or to be acquired by
a Client means any Covered Security as defined herein which, within
the most recent 15-day period, is or has been held by a Client or is
being or has been considered by Denver Investment Advisors for
purchase by a Client.
The provisions of these Ethics Rules have been instituted, in part, in
an effort to ensure that Access Persons do not, inadvertently or
otherwise, violate these proscriptions.
2.7 Investing in derivatives to evade the restrictions of this Code.
Accordingly, individuals may not use derivatives to take positions in
securities which the Code would prohibit if the positions were taken
directly.
Persons who violate any prohibition in this Section 2 shall disgorge any profits
realized on such trades to the appropriate Client(s), or alternatively, to a
charitable organization, as the Management Committee, in its sole discretion,
shall determine.
C. INVESTMENT AND TRADE LIMITATIONS
The following sets forth various investment and trade limitations. If
reimbursement is required under more than one of the following, the Management
Committee shall, in its sole discretion, determine under which provision
reimbursement shall be required.
1 Procedures and Limitations Regarding Trade Execution
----------------------------------------------------
Access Persons must preclear and execute trades as noted below. Access
persons who fail to preclear a trade or who execute a trade by means of a
prohibited brokerage arrangement must disgorge any profits realized on such
trades to the appropriate
<PAGE>
Client(s), or alternatively, to a charitable organization, as the
Management Committee, in its sole discretion, shall determine./1/
1.1 Preclearance of Transactions. Access Persons must obtain preclearance
prior to engaging in any personal transaction in Covered Securities.
The procedures for preclearing transactions are set forth below.
Clearances to trade will be in effect only for the day of their
authorization by a Designated Trading Representative,a Designated
Investment Representative or Compliance personnel. Open orders,
including stop loss orders, will not be allowed. Precleared
transactions not executed on the day of their authorization must be
precleared again before execution. The preclearance requirement
applies to transactions in which the Access Person has a beneficial
interest as defined in Appendix 1 Part B. An Access Person must
complete the Preclearance, a copy of which is attached, in order to
obtain preclearance. Copies of completed requests for Preclearance
must be promptly forwarded to, and maintained by the Compliance
Manager.
Any Access Person who has obtained written approval to purchase a
restricted security and who has purchased and continues to maintain
the security in reliance upon such approval must disclose the
investment to appropriate personnel in any instance in which the
Access Person is involved in consideration by a client of an
investment in the issuer of the restricted security. In any such
instance, the decision of a Client to purchase an investment in the
issuer of the restricted security must be reviewed independently by
one or more investment personnel of Denver Investment Advisors,
selected by a Designated Investment Representative, who has no
personal interest in the issuer, who must execute written approval of
the investment in the issuer prior to the investment's being made.
For purposes of the above paragraph, a restricted security is defined
as a security which is not readily marketable and a security which
cannot be resold or distributed to the public or to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as Amended (the "1933 Act"), without an effective registration
statement under the 1933 Act. A security which is not readily
marketable is one which, for whatever reason, cannot be disposed of
within seven days in the ordinary course of business at approximately
the amount at which the security is reasonably valued.
__________________
/1/ Restrictions on personal transactions apply to transactions involving
Covered Securities as well as any derivatives thereof. When determining the
amount of disgorgement required with respect to derivatives, consideration will
be given to price differences in both the derivative and the underlying
securities, with the smaller difference being used for purposes of computing
disgorgement. For example, in determining whether a reimbursement is required
when the applicable personal trade is in a derivative and the Client transaction
is in the underlying security, the amount shall be calculated using the lesser
of (a) the difference between the price paid or received for the derivative and
the closing bid or ask price (as appropriate) for the derivative on the date of
the Client transaction, or (b) the difference between the last sale price, or
the last bid or ask price (as appropriate) of the underlying security on the
date of the derivative transaction, and the price received or paid by the Client
for the underlying security. Neither preclearance nor disgorgement shall be
required if such person's transaction is to close, sell or exercise a derivative
within five days of its expiration.
<PAGE>
1.2 Preclearance. General preclearance may be obtained from a Designated
Trading Representative or Compliance personnel using a Request for
Preclearance.
. A Designated Trading Representative or Compliance personnel may
provide clearance if the security is not being purchased or sold
for a Client. A security is being purchased or sold when, within
--
the most recent seven calendar day period, a transaction in such
security has been effected for a Client, or when a transaction in
such security is pending or in progress for a Client. Any
profits realized on transactions which occur during the
proscribed period shall be disgorged, with the profit to be
allocated in whole or in part to the appropriate Client(s), if
any, or alternatively to a charitable organization, as the
Management Committee in its sole discretion shall determine;
provided, however, that such disgorgement of short-term trading
profits shall not apply to securities transactions of Access
Persons under circumstances, determined in the sole discretion of
the Management Committee, in which disgorgement of profits would
be inequitable.
1.3 Special Preclearance. Special Preclearance may be obtained from a
Designated Investment Representative for an investment by an Access
Person that would otherwise be prohibited by the Code. To obtain
special preclearance, an Access Person must submit both a Request for
Preclearance and a Request for Special Preclearance to a Designated
Investment Representative. The Designated Investment Representative
may provide specific preclearance if the Designated Investment
Representative determines that the particular circumstances of the
person's proposed trade make it unlikely that the trade would
disadvantage any Client.
1.4 Evaluation of Client Interests. The Ethics Rules require Access
Persons to at all times place the interests of Clients first and to
conduct all personal trading consistently with the Ethics Rules and in
such a manner as to avoid any actual or potential conflict of
interest. Accordingly, any Access Person contemplating a personal
investment that has not been made or considered for Client accounts
for which the Access Person has investment responsibility is reminded
to evaluate the appropriateness or inappropriateness of the investment
for those accounts.
2 Seven Day After Rule
--------------------
If a transaction in a security has been effected for a Client or when a
transaction in the security is pending or in progress, preclearance may be
given on the eighth calendar day after the transaction is executed or
withdrawn. The existence of pending transactions will be checked as a part
of the preclearance process discussed above.
3 Short-Term Trading Rule
-----------------------
Every Access Person who obtains a profit from a purchase and sale, or a
sale and purchase, of the same or equivalent securities within sixty (60)
calendar days shall
<PAGE>
disgorge such profit, with the profit to be allocated in whole or in part
to the appropriate Client(s), if any, or alternatively to a charitable
organization, as the Management Committee in its sole discretion shall
determine; provided, however, that such disgorgement of short-term trading
profits shall not apply to securities transactions of Access Persons under
circumstances, determined in the sole discretion of the Management
Committee, in which disgorgement of profits would be inequitable.
The Compliance Officer may provide for preclearance of a short-term trading
transaction in instances in which no abuse would be involved and the
equities of the situation support an exemption from the prohibition.
4 De Minimus Rule
---------------
Employees will be allowed to make de minimus trades which would otherwise
be subject to the preclearance requirements if the following guidelines are
adhered to:
. Employees are allowed two de minimus trades in any calendar month.
. A de minimus trade may be made for any security in which the issuer
has a market capitalization of equal to or greater than $10 billion.
. The total dollar amount of a de minimus trade may not exceed $15,000.
De minimus trades will not be subject to either the seven day preclearance
or the seven day post-trade blackout period provisions of the Code of
Ethics. Employees must fill out a de minimus preclearance form and this
form must be approved by compliance personnel. Compliance personnel must
also be notified if a de minimus approval goes unexecuted.
De minimus trades will still be subject to the sixty day short-term trading
rule. Furthermore, employees should also note that the de minimus rule
does not exempt employees from violations of the insider trading rules.
Employee trades will be monitored to ensure that a pattern of trading with
client accounts is not present.
5 Service as a Director
---------------------
No Access Person may serve on the board of directors of a publicly traded
company without prior authorization of the Management Committee. No such
service shall be approved without a finding by the Committee that the board
service would not be inconsistent with the interests of Clients. If board
service is authorized, the Access Person serving as a director normally
should be isolated through "Chinese Walls" or other procedures from persons
making investment decisions with respect to the company involved.
6 Disclosure of Interests
-----------------------
No Access Person shall, for or on behalf of a Client, recommend or invest
in entities with which the Access Person or a Related Party (as defined in
Appendix 1 Part B) has a material business interest, without first
disclosing such interest to the Designated
<PAGE>
Investment Representatives or subjecting the recommendation or investment
to an independent review and approval by the Management Committee with no
such interest. A material business interest may be direct or indirect and
may include, without limitation, beneficial ownership of publicly or
privately traded securities (including derivatives, options, warrants or
rights), offices, directorships, significant contracts, or similar
interests or relationships held by such person or a Related Party, which
might affect such person's judgment.
7 Investments in Broker-Dealers
-----------------------------
No Access Person may purchase Covered Securities issued by broker-dealers
unless brokerage commissions or implied commissions on principal
transactions directed by Denver Investment Advisors on behalf of Clients
constitute less than 2% of such broker-dealer's gross revenues for the
prior calendar year. Information regarding the amount of gross revenues
may be relied upon if obtained from the issuer's most recent (i) annual
report to shareholders, or (ii) periodic reports or registration statements
filed with the SEC, or from other sources if there is reason to believe any
of the information contained in (i) or (ii), above, is inaccurate.
8 Hedge Funds and Other Groups
----------------------------
No Access Person may participate in hedge funds or similar investment
groups except as a passive investor.
9 Investment Clubs
----------------
Access Persons may participate in investment clubs provided the club's
transactions are reported as if they were made directly on behalf of the
Access Person, and all trades by the investment club are effected in
conformance with the prohibitions, restrictions and procedures in this Code
of Ethics.
10 Prohibited Brokerage Arrangements
---------------------------------
No Access Person may place his or her personal securities transactions
through a Denver Investment Advisors trading desk employee or a brokerage
firm that such Access Person deals with in his or her professional capacity
unless such brokerage firm (i) is a discount broker that does not
underwrite or make markets in securities; (ii) is a local branch of a
brokerage firm, if the local branch is not used to effect transactions for
Clients and the Access Person's transactions do not involve an
underwriting, private placement or security in which such brokerage firm is
making a market; or (iii) is a local branch or local brokerage firm used by
the Access Person to effect precleared transactions in Colorado tax exempt
securities, precleared pursuant to this Code of Ethics. The Designated
Investment Representatives may, from time to time, grant exceptions from
this prohibition when particular circumstances make it unlikely that such
trading activity would disadvantage Clients, such as, for example, when
different types of securities are involved in the Client and personal
trading or when foreign securities are involved which
<PAGE>
are not handled by brokerage firms referenced in (i) or (ii) above. The
Designated Investment Representative's approval can be noted on the
Preclearance Form.
11 Investments in Investment Companies advised by Denver Investment Advisors
-------------------------------------------------------------------------
11.1 Investment Companies ("equity funds") with assets under management of
less than $100 million have greater volatility, therefore,
investments in such funds must adhere to the following:
. Denver Investment Advisors' employees' new investments greater
than $10,000 in equity funds with less than $100 million in
assets may only be made on a payroll date.
. Denver Investment Advisors' money purchase plan and employee
retirement savings plan are not currently subject to these
restrictions.
Employees that do not follow this procedure may have their trades
cancelled and monies returned to them.
11.2 A portfolio manager who wishes to make redemptions from a fund that
he/she manages which are greater than $250,000 or 1% of the fund's
net asset value, whichever is less, in any 90 day period must seek
and receive the written approval of a Designated Investment
Representative prior to making such redemptions.
12 Required Reports
----------------
12.1 Duplicate Account Information and Notification. Access Persons must
arrange for their brokers, investment advisers, trustees or
custodians to provide, on a timely basis, to the Designated
Investment Representative, duplicate account statements and
confirmation of all transactions in Covered Securities for all
accounts in which they have a beneficial interest (see Appendix 1
Part B regarding beneficial ownership). Access Persons must also
notify the Designated Investment Representative of each such account,
indicating the name of the brokerage firm, the name under which the
account is carried and the date the account was established. An
Account Information Form should be completed for this purpose.
Duplicate account information will be organized and filed by the
Compliance Manager and exceptions will be reviewed by the Designated
Investment Representative to determine that no trades violate the
Code of Ethics and that there is no pattern of trading that suggests
a potential violation.
12.2 Quarterly Verification. Access persons must, no later than 10 days
after the end of a calendar quarter, verify that their trading
activity as shown on a report provided to them by the Compliance
Manager is complete and accurate or make appropriate corrections.
12.3 Monthly Reports. Access Persons must provide monthly reports within
10 days after month end with respect to all transactions for which
confirmations are not timely provided, including without limitation,
brokered and nonbrokered private
<PAGE>
placements, gifts, inheritances, and other transactions in Covered
Securities otherwise not reported. Such monthly reports must provide
the following information:
. The date of the transaction;
. The name of the security;
. The interest rate and maturity date if applicable;
. The number of shares and principal amount of each security
involved;
. The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
. The price at which the transaction was effected;
. The name of the broker, dealer, bank, or other entity with or
through whom the transaction was effected and;
. The date that the report was submitted.
The Designated Investment Representative may request Access Persons
to provide monthly reports regardless of whether their broker has
been instructed to provide duplicate confirmations. Such reports may
be requested, for example, to check that all applicable confirmations
are being received or to supplement the requested confirmations where
a broker is difficult to work with or otherwise fails to provide
duplicate confirmations on a timely basis. Such reports will be
requested if the confirmations do not provide the foregoing
information.
12.4 Annual Acknowledgments and Reports. Access Persons must also submit
an Acknowledgment Form as discussed under Part B, 1 above annually.
Access Persons must attach to each such Acknowledgment the following
information:
. The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial ownership;
. 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
. The date that the report is submitted by the Access Person.
The Securities Ownership and Business Positions Form is designed for
this reporting. Furthermore, Access Persons are required to briefly
describe any positions held (e.g., director, officer, other) with
entities other than Denver Investment Advisors on this form.
12.5 Review of Reports. The Compliance Officer shall, on a timely basis,
review all reports submitted pursuant to this Section 10 to determine
whether trading patterns and other activities of Access Persons may
suggest either violations of the Ethics Rules or a failure to comply
not only with the letter, but also with the spirit, of the Ethics
Rules and their general principles.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 3 INSIDER TRADING POLICY
A. BACKGROUND INFORMATION
The term "insider trading" is not defined in the federal securities statutes,
but generally is used to refer to the use of material nonpublic information to
trade in securities (whether or not one is an "insider") or to communications of
material nonpublic information to others.
While the law concerning insider trading is not settled, it is appropriate to
assume that the law prohibits:
. trading by an insider, while in possession of material nonpublic
information, or
. trading by a non-insider, while in possession of material nonpublic
information, where the information either was disclosed to the non-insider
(directly or through one or more intermediaries) in violation of an
insider's duty to keep it confidential or was misappropriated or otherwise
improperly obtained by the non-insider, or
. communicating material nonpublic information to others in breach of a duty
not to disclose such information.
Trading based on material nonpublic information about an issuer does not violate
this policy unless the trader (i) is an "insider" with respect to an issuer;
(ii) receives the information from someone that the trader knows received the
information from an insider, either directly or indirectly, or (iii)
misappropriates the nonpublic information or obtains or misuses it in breach of
a duty of trust and confidence. Accordingly, trading based on material
nonpublic information about an issuer can be, but is not necessarily, a
violation of this Policy.
Application of the law of insider trading to particular transactions can be
difficult, particularly if it involves a determination about trading based on
material nonpublic information. An individual legitimately may be uncertain
about the application of this Policy in particular circumstances. If you have
any questions regarding the application of the Policy, you should contact a
Designated Investment Representative. You should also notify a Designated
Investment Representative immediately if you have any reason to believe that a
violation of the Policy has occurred or is about to occur.
The following discussion is intended to help you understand the principal
concepts involved in insider trading.
<PAGE>
1 Who is an Insider?
------------------
The concept of "insider" is broad. It includes officers, directors and
employees of a company. In addition, a person can be a "temporary insider"
if he or 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, Denver
Investment Advisors may become a temporary insider of a company it advises
or for which it performs other services. To be considered an insider, the
company must expect the outsider to keep the disclosed nonpublic
information confidential and/or the relationship must at least imply such a
duty.
2 When is Information Nonpublic?
------------------------------
Information remains nonpublic until it has been made public. Information
becomes public when it has been effectively communicated to the market
place, such as by a public filing with the SEC or other governmental
agency, inclusion in the Dow Jones "tape" or publication in the Wall Street
Journal or another publication of general circulation. Moreover,
sufficient time must have passed so that the information has been
disseminated widely.
3 What is Material Information?
-----------------------------
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally means
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment
decisions, or information that is reasonably certain to have a substantial
effect on the price of a company's securities. Information that should be
considered 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 may also relate to the market for a company's
------
securities. Information about a significant order to purchase or sell
securities may, in some contexts, be deemed material. Similarly,
prepublication information regarding reports in the financial press also
may be deemed material. For example, the Supreme Court upheld the criminal
convictions of insider trading defendants who capitalized on prepublication
information about the Wall Street Journal's "Heard on the Street" column.
4 Penalties for Insider Trading
-----------------------------
Penalties for trading on or communicating material nonpublic information
are severe, both for individuals involved in such unlawful conduct and
their employers or other controlling persons. A person can be subject to
some or all of the penalties below even if he or she does not personally
benefit from the violation. Penalties include:
<PAGE>
. civil injunctions
. treble damages
. disgorgement of profits
. jail sentences for up to 10 years
. fines up to $1,000,000 (or $2,500,000 for corporations and other
entities)
. civil penalties for the person who committed the violation of up to
three times the profit gained or loss avoided, whether or not the
person actually benefitted, and
. civil penalties for the employer or other controlling person of up to
the greater of $1,000,000 or three times the amount of the profit
gained or loss avoided.
In addition, any violation can be expected to result in serious sanctions
by Denver Investment Advisors, including termination of employment.
5 Who is a Controlling Person?
----------------------------
Included as controlling persons are Denver Investment Advisors and its
members and officers. If you are a member or officer, you have a duty to
act to prevent insider trading. Failure to fulfill such a duty may result
in penalties as described in Part A, 4, above.
B. PROCEDURES TO IMPLEMENT POLICY
The following procedures have been established to aid the members, officers and
employees of Denver Investment Advisors in avoiding insider trading, and to aid
Denver Investment Advisors in preventing, detecting and imposing sanctions
against insider trading.
1 Identifying Inside Information
------------------------------
Before trading for yourself or others, including Clients, in the securities
of a company about which you may have potential inside information, ask
yourself the following questions:
1.1 To whom has this information been provided? Has the information been
effectively communicated to the marketplace?
1.2 Is the information material? Is this information that an investor
would consider important in making his or her investment decisions? Is
this information that would affect the market price of the securities
if generally disclosed?
2 Reporting Inside Information
----------------------------
If, after consideration of the above, you believe that the information is
material and nonpublic, or if you have questions as to whether the
information is material and nonpublic, you should take the following steps.
2.1 Do not purchase or sell the securities on behalf of yourself or
others, including Clients.
<PAGE>
2.2 Do not communicate the information inside or outside of Denver
Investment Advisors, other than to the Compliance Officer.
2.3 Immediately advise a Designated Investment Representative of the
nature and source of such information, and he will determine if the
information needs to be reviewed by the Management Committee.
2.4 Depending upon the determination made by the Management Committee, or
by a Designated Investment Representative until the Committee can be
convened, you, or you and others may be instructed to continue the
prohibition against trading and communication. Alternatively, if it is
determined that the information obtained is not material nonpublic
information, you may be allowed to trade and communicate the
information.
3 Protecting Information
----------------------
Members, officers and employees of Denver Investment Advisors shall not
disclose any nonpublic information (whether or not it is material) relating
to Denver Investment Advisors or its securities transactions to any person
outside Denver Investment Advisors (unless such disclosure has been
authorized by the Compliance Officer). Material nonpublic information may
not be communicated to anyone, including any member, officer or employee of
Denver Investment Advisors, except as provided in this Policy. Access to
such information must be restricted. For example, access to files
containing material nonpublic information and computer files containing
such information should be restricted, and conversations pertaining to such
information, if appropriate at all, should be conducted in private.
To avoid unintended disclosures, it is important that all employees take
the following steps to safeguard the confidentiality of material and
nonmaterial nonpublic information:
. Do not discuss confidential information in public places such as
elevators, hallways or social gatherings;
. To the extent practical, limit access to the areas of the firm where
confidential information could be observed or overheard by employees
with a business need for being in the area;
. Avoid use of speaker phones in areas where unauthorized persons may
overhear conversations;
. Avoid use of wireless and cellular phones, or other means of
communication which may be intercepted;
. Where appropriate, maintain the confidentiality of Client identities
by using code names or numbers for confidential projects;
<PAGE>
. Exercise care to avoid placing documents containing confidential
information in areas where they may be read by unauthorized persons
and to store such documents in secure locations when they are not in
use; and
. Destroy copies of confidential documents no longer needed for a
project unless required to be saved pursuant to applicable
recordkeeping policies or requirements.
4 Responsibility to Monitor Transactions
--------------------------------------
The Compliance Manager will monitor Client and employee transactions for
which reports are received to detect the existence of any unusual trading
activities. The Compliance Manager will immediately report any unusual
trading activity directly to a Designated Investment Representative, who
will be responsible for determining what, if any, action should be taken.
5 Preclearance and Other Requirements
-----------------------------------
No person to whom this Policy applies may trade, either personally or on
behalf of others (including Clients), while in possession of material
nonpublic information, nor may such Denver Investment Advisors personnel
communicate material nonpublic information to others in violation of the
law. Even if information is not deemed to be material nonpublic
information, Denver Investment Advisors personnel must nevertheless comply
with the other provisions of the Ethics Rules. For example, please refer
to Appendix 2 Part C, 1.1 of the Ethics Rules, regarding the preclearance
requirement applicable to Access Persons.
6 Tender Offers
-------------
Tender offers represent a particular concern in the law of insider trading
for two reasons. First, tender offer activity often produces extraordinary
gyrations in the price of the target company's securities. Trading during
this time period is more likely to attract regulatory attention (and
produces a disproportionate percentage of insider trading cases). Second,
the SEC has adopted a rule which expressly forbids trading and "tipping"
while in possession of material nonpublic information regarding a tender
offer received from the tender offeror, the target company or anyone acting
on behalf of either. Denver Investment Advisors employees and others
subject to this Policy should exercise particular caution any time they
become aware of nonpublic information relating to a tender offer.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 4 GIFT AND OUTSIDE EMPLOYMENT POLICY
A. GIFTS
The following outlines the policy on giving and receiving gifts.
1 Given
-----
No member, officer or employee shall, directly or indirectly, give or
permit to be given anything of value, including gratuities, in excess of
$100 per year, to any principal, proprietor, employee, agent, or
representative of a broker-dealer if such payment is in relation to the
business of the employer of the recipient.
2 Received
--------
No member, officer or employee may receive any gift or other thing of value
in excess of $100 per year from any person or entity that does business
with or on behalf of Denver Investment Advisors or any Client, provided
however, receipt of the following shall not be prohibited:
. an occasional dinner, ticket to a sporting event or the
theater, or comparable entertainment, which is neither so frequent nor
so costly as to raise any question of impropriety; or
. a breakfast, luncheon, dinner, reception, or cocktail party
given in conjunction with a bona fide business meeting.
B. OUTSIDE EMPLOYMENT
No member, officer or employee of Denver Investment Advisors shall be employed
by, or accept compensation from any other person as a result of any business
activity, other than a passive investment, outside the scope of his relationship
with Denver Investment Advisors unless such person has provided prompt written
notice of such employment to the Compliance Officer, and, in the case of
securities-related employment or compensation, has received the prior written
approval of the Compliance Officer.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 5 OTHER
A. SUPERVISORY AND COMPLIANCE REVIEW PROCEDURES
Supervisory procedures can be divided into two classifications: prevention of
violations and detection of violations. Compliance review procedures include
preparation of special and annual reports, record maintenance and review, and
confidentiality preservation.
1 Prevention of Violations
------------------------
In an effort to prevent violations of the Ethics Rules, the Designated
Investment Representative should, in addition to the procedures previously
outlined in the Ethics Rules:
1.1 Review and update the Ethics Rules as necessary, at least
once annually, including but not limited to a review of the Code by
the Compliance Officer, the Management Committee and/or counsel;
1.2 Answer questions regarding the Ethics Rules;
1.3 With such assistance from the Designated Investment
Representatives, outside counsel, or Human Resources Manager as may be
appropriate, maintain a continuing education program consisting of the
following:
1.3.1 orienting members, officers, and employees who
are new to Denver Investment Advisors. The orientation shall
include without limitation a discussion of the Ethics Rules,
1.3.2 further educating members, officers, and
employees by distributing memos or other materials that may be
issued by outside organizations such as the Investment Company
Institute discussing the issue of insider trading and other
issues raised by the Ethics Rules;
1.4 Request from all persons upon commencement of services and
annually thereafter, any applicable forms and reports as required by
the Ethics Rules;
1.5 Write letters to securities firms requesting duplicate
confirmations and account statements where necessary; and
1.6 Resolve with the Management Committee issues of whether information
received by a member, officer or employee of Denver Investment
Advisors is material and nonpublic and determine what action, if any,
should be taken.
<PAGE>
2 Detection of Violations
-----------------------
In an effort to detect violations of these Ethics Rules, the Compliance
Officer and Designated Investment Representative should, in addition to the
procedures previously outlined in the Ethics Rules:
2.1 Review reports, confirmations, and statements relative to applicable
restrictions, as provided under the Code;
2.2 Spot checks of certain information are permitted as noted under the
Code.
3 Reports of Potential Deviations or Violations
---------------------------------------------
Upon learning of a potential deviation or violation of the Ethics Rules, a
Designated Investment Representative should promptly report to the
Management Committee providing full details and recommendations for further
action. The Management Committee shall thereafter take such action as
deemed appropriate.
4 Annual Reports
--------------
The Designated Investment Representative should prepare at least annually a
written report for the Management Committee and for the Boards of Directors
of any registered investment company for which Denver Investment Advisors
serves as investment adviser. This report shall be confidential and set
forth the following information:
4.1 Copies of the Ethics Rules, as revised, including a summary of any
changes made during the past year;
4.2 Identification of any violations requiring remedial action during the
past year, and the sanctions imposed for each such violation;
4.3 Recommendations, if any, regarding changes in existing restrictions or
procedures based upon Denver Investment Advisor's experience under
these Ethics Rules, evolving industry practices, or developments in
applicable laws or regulations; and
4.4 Certification that, in the opinion of the Compliance Officer, the
Ethics Rules include such procedures as are reasonably necessary to
prevent Access Persons from violating the Ethics Rules.
5 Records
-------
The Compliance Officer is responsible for ensuring that the following
records are created and maintained:
5.1 A copy of the Ethics Rules which are, or at any time within the past
five years have been, in effect;
<PAGE>
5.2 Files for personal securities transaction confirmations and account
statements, all reports and other forms submitted pursuant to these
Ethics Rules and any other pertinent information;
5.3 A copy of each preclearance;
5.4 A record of any violation of the Ethics Rules and of any action taken
as a result of such violation;
5.5 A log noting the dates of review, annual update activity and any other
information pertaining to implementation of these procedures; and
5.6 A list of all persons who are, or have been, required to make reports
pursuant to these Ethics Rules.
6 Inspection
----------
The records and reports maintained by the Designated Investment
Representative, Designated Trading Representatives, the Compliance Manager,
and the Compliance Officer pursuant to the Ethics Rules shall at all times
be available for inspection, without prior notice, by any member of the
Management Committee.
7 Record Retention
----------------
Copies of the records specified in Section 5 above and of memoranda and
minutes regarding the administration of these procedures shall be
maintained by the Compliance Officer for a minimum of six years. All
records listed in Section 5 above shall be kept in an easily accessible
place except that the records specified in Section 5.1 need only be kept in
an easily accessible place for two years.
8 Confidentiality
---------------
All procedures, reports and records monitored, prepared or maintained
relating to the Code of Ethics shall be considered confidential and
proprietary to Denver Investment Advisors and shall be maintained and
protected accordingly. Except as otherwise required by law or this Ethics
Code no disclosure shall be made about Ethics Code issues other than to
members of the Management Committee.
B. ROLE OF THE MANAGEMENT COMMITTEE IN COMPLIANCE
One of the roles of the Management Committee is to provide an effective
mechanism for monitoring compliance with the standards and procedures contained
in the Ethics Rules and to take appropriate action at such times as violations
or potential violations are discovered.
1 Membership of the Committee
---------------------------
The members of the Committee will be the Executive Managers and the three
Managers elected annually pursuant to the LLC Operating Agreement.
<PAGE>
2 Committee Meetings
------------------
The Committee shall review on a quarterly basis or as often as necessary
the operations of the compliance program and consider technical deviations
from operational procedures, inadvertent oversights, or any other potential
violation of the Ethics Rules. The Designated Investment Representative
shall report information about potential violations, together with all
documents relating to the matter at the next regular meeting of the
Committee, or convene a special meeting.
Deviations alternatively may be addressed by including them in the
employee's personnel records maintained by Denver Investment Advisors.
Management Committee reviews are primarily intended for consideration of
the general operation of the compliance program and substantive or serious
departures from standards and procedures in the Ethics Rules.
A Committee meeting may be attended, at the discretion of the Committee, by
such other persons as the Committee shall deem appropriate. Any individual
whose conduct has given rise to the meeting may also be called upon, but
shall not have the right, to appear before the Committee.
It is not required that minutes of Committee meetings be maintained; in
lieu of minutes the Committee may issue a report describing any action
taken. The report shall be included in the confidential file maintained by
the Designated Investment Representative with respect to the particular
employee or employees whose conduct has been the subject of the meeting.
The Committee will also prepare reports or make copies of minutes available
as needed for Directors/Trustees of investment companies advised by Denver
Investment Advisors.
3 Special Discretion
------------------
The Committee shall have the authority by a majority vote to exempt any
person or class of persons from all or a portion of the Ethics Rules,
provided that:
3.1 The Committee determines, on advice of counsel, that the particular
application of all or a portion of the Ethics Rules is not legally
required;
3.2 The Committee determines that the likelihood of any abuse of the
Ethics Rules by such exempted person(s) is remote;
3.3 The terms or conditions upon which any such exemption is granted is
evidenced in a written instrument; and
3.4 The exempted person(s) agrees to execute and deliver to the Compliance
Officer, at least annually, a signed Acknowledgment Form, a copy of
which can be found in Appendix 6 of the Ethics Rules, which
Acknowledgment shall, by operation of this
<PAGE>
provision, include such exemptions and the terms and conditions upon
which it was granted.
The Committee shall also have the authority by a majority vote to impose
such additional requirements or restrictions as it, in its sole discretion,
determines appropriate or necessary.
Any exemption, and any additional requirement or restriction, may be
withdrawn by the Committee at any time.
C. GENERAL INFORMATION ABOUT THE ETHICS RULES
The following describes additional information generally applicable to the
Ethics Rules.
1 Designees
---------
The Management Committee, the Designated Investment Representatives, and
the Compliance Officer may appoint designees to carry out certain functions
pursuant to these Ethics Rules.
2 Enforcement
-----------
In addition to the penalties described elsewhere in the Ethics Rules, upon
discovering a violation of the Ethics Rules, Denver Investment Advisors may
impose such sanctions as it deems appropriate, including without
limitation, a letter of censure or suspension or termination of employment
or personal trading privileges of the violator or disgorgement of any
profits realized on certain transactions to the appropriate client(s), or
alternatively to a charitable organization, as the Management Committee in
its sole discretion shall determine. All material violations of the Ethics
Rules and any sanctions imposed with respect thereto shall be reported
periodically to the Management Committee.
3 Internal Use
------------
The Ethics Rules are intended solely for internal use by Denver Investment
Advisors and do not constitute an admission, by or on behalf of Denver
Investment Advisors, as to any fact, circumstance or legal conclusion. The
Ethics Rules are not intended to evidence, describe or define any
relationship of control between or among any persons. Further, the Ethics
Rules are not intended to form the basis for describing or defining any
conduct by a person that should result in such person being liable to any
other person, except insofar as the conduct of such person in violation of
the Ethics Rules may constitute sufficient cause for Denver Investment
Advisors to terminate or otherwise adversely affect such person's
relationship with Denver Investment Advisors.
<PAGE>
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 6 FORMS
A. FORMS
Following are blank forms for your use in complying with the foregoing Policy.
NOTE: FORMS ARE IN SEPARATE FILE
