HARRIS BRETALL SULLIVAN & SMITH L.L.C.
EMPLOYEE HANDBOOK
3/31/2000
CONFLICTS OF INTEREST INVOLVING TRADING FOR PERSONAL ACCOUNTS
FIDUCIARY DUTY TO AVOID CONFLICTS OF INTEREST
As noted above, because the Company and each of its employees is a fiduciary to
the Company's clients, the Company and such persons must avoid actual and
apparent conflicts of interest with the Company's clients. In any situation
where the potential for conflict exists, transactions for clients must take
precedence over personal transactions. If there is any doubt, resolve the matter
in the client's favor.
PERSONAL ACCOUNT DEFINED
The "personal account" of an employee of the Company shall include each and
every account (other than an account for the benefit of any of the Company's
clients) for which such employee influences or controls investment decisions.
Each account for the benefit of (i) any employee, (ii) the spouse of such
employee, (iii) any children under the age of 22 of such employee, or (iv) any
other dependent of such employee residing in the same household, shall be deemed
a personal account of the employee unless such employee certifies in writing to
the Compliance Officer (or, in the case of the Compliance Officer to a
Principal) that: (x) the certifying employee does not influence the investment
decisions for any specified account of such spouse, child or dependent person
and (y) the person or persons making the investment decisions for such account
do not make such decisions, in whole or in part, upon information that the
certifying employee has provided.
PROCEDURES REGARDING CONFLICTS OF INTEREST INVOLVING PERSONAL ACCOUNTS
RESTRICTED LIST
The Company has established and maintains a Restricted List. Promptly following
daily meetings of the Company's Strategy Committee, the Partner in charge of
supervising trading updates and circulates the Restricted List to each employee
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of the Company when appropriate changes are made to the list. The Restricted
List is dated and contains the names of specified securities and/or issuers of
securities. The Restricted List is circulated to all employees by electronic
mail each time a stock is added to or deleted from the list. The list contains
all stocks that are restricted from employee trading, and is broken down between
the stocks restricted for Growth Equity and Balanced Portfolios, and those for
the Technology, Entertainment and Communications Portfolio.
The Company's Strategy Committee may place a security on the Restricted list if,
for example, that security is currently included in the Company's Model
Portfolios and the securities is under consideration for sale in client
accounts; the security is not in the Company's Model Portfolios and the security
is being considered for purchase in client accounts; or if, for example, the
Strategy Committee determines that there may be the appearance that the Company
has obtained material, nonpublic information regarding such issuer as a result
of the Company's on-site visits to such issuer.
Transactions in the Company's Model Portfolios may be entered into before stock
is added on `Restricted List' and after it comes off the list.
PROHIBITION ON CERTAIN PERSONAL TRADES
PROHIBITED TRADES. Both to insure compliance with the insider trading laws
and to ensure fulfillment of the Company's fiduciary duty to its clients
and minimize conflicts of interest with the Company's clients, during the
period that any security or issuer of securities appears on the Restricted
list, no employee of the Company shall for his or her personal account (I)
purchase or sell any security appearing on such Restricted List, (ii)
purchase or sell any option or other instrument convertible into any
security appearing on such Restricted List or (iii) purchase or sell any
security or instrument convertible into any security of an issuer appearing
on such Restricted List.
DISCOURAGED TRADES. Even if a transaction is not prohibited pursuant to the
Restricted List procedure discussed in paragraph 1 above, the Company
discourages its employees from engaging in any personal securities
transactions in which the employee acts as a speculator, rather than an
investor, with respect to the transaction.
REPORTS OF PERSONAL TRANSACTIONS
SUBMISSION OF REPORTS. In order for the Company to monitor compliance with
its insider trading and conflict of interest policies and procedures, each
employee of the Company shall submit a "Quarterly Personal Transaction
Report" in the form attached to this Appendix 1 for each of his or her
personal accounts. The report shall be submitted to the Compliance Officer
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HARRIS BRETALL SULLIVAN & SMITH L.L.C. EMPLOYEE HANDBOOK
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within ten days following the end of each calendar quarter regardless of
whether any trading activity took place in that account during the quarter.
This includes all transactions in your immediate household, and all
transactions by persons for whom you provide advice or guidance in
securities transactions. All securities transactions are to be reported,
except mutual funds and government bonds.
REPORTING HBSS PORTFOLIO SECURITY TRANSACTIONS. When any order in a
security held in the Harris Bretall Portfolio is placed, an e-mail (or
voicemail if traveling - to be followed by an e-mail) must be sent to the
Compliance Officer immediately upon receiving an execution report. The
following information needs to be included:
* Issue (stock)
* Time and date executed
* Number of shares
* Price
REVIEW AND RETENTION OF REPORTS. The Compliance Officer shall promptly
review each Quarterly Personal Transaction Report and compare the
transactions reported against the Restricted Lists that were circulated
during the quarter to determine whether any violations of the Company's
policies or of the applicable securities laws took place. If any employee's
Quarterly Personal Transaction Report fails to contain all required
information, the Compliance Officer shall promptly contact such employee to
obtain the missing information. The Company shall retain all Quarterly
Personal Transaction Reports as part of the books and records required by
the Advisers Act and the rules promulgated thereunder.
The President of the firm will be responsible for reviewing the Personal
Transactions Reports of the Compliance Officer.
All employees are required to provide a list of assets owned by the
employee as of the last day of each calendar year. New employees are
required to provide said report at commencement of their employment with
the firm.
Any violations of the firm Code of Ethics and Personal Transaction Policy
will be promptly reported by the Compliance Officer to the Company's
Executive Committee, and may result in a reprimand, cancellation of the
trade(s) affected and disgorgement of profits, or other action deemed
appropriate by the Executive Committee depending on the circumstances of
the violation. Disgorgement of any profit resulting from trade cancellation
will involve payment of the profit amount to a charitable organization at
the firm's direction.
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HARRIS BRETALL SULLIVAN & SMITH L.L.C. EMPLOYEE HANDBOOK
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PERSONAL TRADING FOR ALL `ACCESS' PERSONS
ACCESS PERSONS DEFINED. Portfolio Managers for the mutual funds or
commingled funds (`Fund') managed by the firm and other staff directly
involved in daily portfolio administration and trading of Fund portfolios,
members of Strategy Committee, and members of the TCE Team. The Compliance
Officer will maintain the current list of access persons.
No personal trading by access persons for securities for which those access
persons have analytical responsibility `pre-clearance' by the Strategy
Committee. Said securities cannot be under consideration by the Strategy
Committee or TCE Team for purchase or sale by the firm for client accounts
or Funds.
Members of the Research Team are considered to be under the same
restrictions as access persons with respect to trading of securities for
which they have analytical responsibilities, whereby they are required to
have prior approval of the Strategy Committee before entering into any
trades involving securities in their assigned industries or sectors.
All access persons' securities transactions in IPOs must be `pre-cleared'
by Strategy Committee prior to being executed. Approval will be denied in
cases where it might be appropriate to offer participation in the IPO to
the firm's clients.
SUMMARY
IMPORTANCE OF ADHERENCE TO PROCEDURES
It is very important that all employees adhere strictly to the Personal
Trading/Confidential Information Compliance Procedures. Any violations of such
policies and procedures may result in serious sanctions, including dismissal
from the Company.
QUESTIONS
Any questions regarding the Company's policies or procedures regarding insider
trading, confidential information and conflicts of interest should be referred
to the Compliance Officer.
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HARRIS BRETALL SULLIVAN & SMITH L.L.C. EMPLOYEE HANDBOOK
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QUARTERLY PERSONAL TRANSACTION REPORT
For the Quarter Ended XX/XX/XX
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Employee Name:
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Account Name:
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Account Number:
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Relationship:
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Brokerage Firm:
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SECURITY BUY/SELL DATE # SHARES PRICE
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REVIEWED BY DATE
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HARRIS BRETALL SULLIVAN & SMITH L.L.C. EMPLOYEE HANDBOOK
