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Exhibit (p)
CODE OF ETHICS FOR
DOMINI SOCIAL EQUITY FUND
DOMINI INSTITUTIONAL TRUST
DOMINI SOCIAL INDEX PORTFOLIO
Revised January 14, 2000
Domini Social Equity Fund, Domini Institutional Trust and Domini Social
Index Portfolio, each on behalf of its current and future series (each, an
"Investment Company"; collectively, the "Investment Companies") have each
determined to adopt this Code of Ethics (the "Code") as of January 14, 2000, to
specify and prohibit certain types of personal securities transactions deemed to
create a conflict of interest and to establish reporting requirements and
preventive procedures pursuant to the provisions of Rule 17j-1(c) under the
Investment Company Act of 1940 (the "1940 Act").
I. DEFINITIONS
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A An "Access Person" means (i) any Trustee, Director, officer or
Advisory Person (as defined below) of the Investment Company or any
investment adviser thereof, or (ii) any director or officer of a
principal underwriter of the Investment Company who, in the ordinary
course of his or her business, makes, participates in or obtains
information regarding the purchase or sale of securities for the
Investment Company for which the principal underwriter so acts or
whose functions or duties as part of the ordinary course of his or her
business relate to the making of any recommendation to the Investment
Company regarding the purchase or sale of securities; or (iii)
notwithstanding the provisions of clause (i) above, where the
investment adviser is primarily engaged in a business or businesses
other than advising registered investment companies or other advisory
clients (as determined in accordance with Rule 17j-1 of the 1940 Act),
any trustee, director, officer or Advisory Person of the investment
adviser who, with respect to the Investment Company, makes any
recommendation or participates in the determination of which
recommendations shall be made, or whose principal function or duties
relate to the determination of which recommendations shall be made to
the Investment Company or who in connection with his or her duties,
obtains any information concerning securities recommendations being
made by such investment adviser to the Investment Company.
B An "Advisory Person" means (i) any employee of the Investment Company
or any investment adviser or investment manager thereof (or of any
company in a control relationship to the Investment Company or such
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investment adviser), who, in connection with his or her regular
functions or duties, makes, participates in or obtains information
regarding the purchase or sale of securities by the Investment Company
or whose functions relate to any recommendations with respect to such
purchases or sales and (ii) any natural person in a control
relationship with the Investment Company or adviser who obtains
information regarding the purchase or sale of securities (or any
recommendation with respect thereto).
C A "Portfolio Manager" means any person or persons with the direct
responsibility and authority to make investment decisions affecting
the Investment Company.
D "Access Persons," "Advisory Persons" and "Portfolio Managers" shall
not include any individual who is required to file reports with any
investment adviser, subadviser, administrator or the principal
underwriter pursuant to a code of ethics described in Section V and
found by the Trustees to be substantially in conformity with Rule 17j-
1 of the 1940 Act.
E "Beneficial Ownership" shall be interpreted subject to the provisions
of Rule 16a-1(a) (exclusive of Section (a)(1) of such Rule) of the
Securities Exchange Act of 1934.
F "Control" shall have the same meaning as set forth in Section 2(a)(9)
of the 1940 Act.
G "Disinterested Trustee" means a Trustee who is not an "interested
person" of the Investment Company within the meaning of Section
2(a)(19) of the 1940 Act. An "interested person" includes any person
who is a trustee, director, officer or employee of any investment
adviser of the Investment Company, or owner of 5% or more of the
outstanding stock of any investment adviser of the Investment Company.
Affiliates of brokers or dealers are also "interested persons", except
as provided in Rule 2(a)(19)(1) under the 1940 Act.
H "Review Officer" is the person designated by the Investment Company's
Board of Trustees to monitor the overall compliance with this Code.
In the absence of any such designation the Review Officer shall be the
Treasurer or any Assistant Treasurer of the Investment Company.
I "Preclearance Officer" is the person designated by the Investment
Company's Board of Trustees to provide preclearance of any personal
security transaction as required by this Code.
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J "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security or the purchase or
sale of a future or index on a security or option thereon.
K "Security" shall have the meaning as set forth in Section 2(a)(36) of
the 1940 Act (in effect, all securities), except that it shall not
include securities issued by the Government of the United States (or
any short-term debt security that is a "government security" as that
term is defined in the 1940 Act), bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-term
debt instruments, including repurchase agreements, and shares of
registered open-end investment companies.
L A security is "being considered for purchase or sale" when a
recommendation to purchase or sell the security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such a
recommendation.
M A security "held or to be acquired" by the Investment Company means
(i) a security which, within the most recent 15 days (1) is or has
been held by the Investment Company or (2) is being or has been
considered by the Investment Company or its investment adviser for
purchase by the Investment Company and (ii) any option to purchase or
sell, and any security convertible into or exchangeable for, a
security described in clause (i) of this definition.
II. STATEMENT OF GENERAL PRINCIPLES
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The following general fiduciary principles shall govern the personal
investment activities of all Access Persons.
Each Access Person shall:
A at all times, place the interests of the Investment Company before his
or her personal interests;
B conduct all personal securities transactions in a manner consistent
with this Code, so as to avoid any actual or potential conflicts of
interest, or an abuse of position of trust and responsibility; and
C not take any inappropriate advantage of his or her position with or on
behalf of the Investment Company.
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III. RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES
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A. Unlawful Actions
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No Access Person shall, in connection with the purchase or sale,
directly or indirectly, by such person of a security held or to be
acquired by the Investment Company:
1. employ any device, scheme or artifice to defraud the Investment
Company;
2. make to the Investment Company any untrue statement of a material
fact or omit to state to the Investment Company a material fact
necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading;
3. engage in any act, practice or course of business which would
operate as a fraud or deceit upon the Investment Company; or
4. engage in any manipulative practice with respect to the
Investment Company.
B Blackout Periods
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1. No Access Person (other than a Disinterested Trustee) 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 he
or she knows or should have known the Investment Company has a
pending "buy" and "sell" order in that same security until that
order is executed or withdrawn.
2. No Advisory Person or Portfolio Manager 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 within at least seven calendar days before
and after the Investment Company trades (or has traded) in that
security.
C Initial Public Offerings
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No Advisory Person shall acquire any security in an initial public
offering for his or her personal account.
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D Private Placements
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With regard to private placements, each Advisory Person shall:
1. obtain express prior written approval from the Preclearance
Officer for any acquisition of securities in a private placement
(the Review Officer, in making such determination, shall
consider, among other factors, whether the investment opportunity
should be reserved for the Investment Company, and whether such
opportunity is being offered to such Advisory Person by virtue of
his or her position with the Investment Company); and
2. after authorization to acquire securities in a private placement
has been obtained, disclose such personal investment with respect
to any subsequent consideration by the Investment Company (or any
other investment company for which he or she acts in a capacity
as an Advisory Person) for investment in that issuer.
If the Investment Company decides to purchase securities of an issuer
the shares of which have been previously obtained for personal
investment by an Advisory Person, that decision shall be subject to an
independent review by Advisory Persons with no personal interest in
the issuer.
E Short-Term Trading Profits
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No Advisory Person shall profit from the purchase and sale, or sale
and purchase, of the same (or equivalent) securities of which such
Advisory Person has beneficial ownership within 60 calendar days. Any
profit so realized shall, unless the Investment Company's Board of
Trustees approves otherwise, be disgorged as directed by the
Investment Company's Board of Trustees.
F Gifts
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No Advisory Person shall receive any gift or other things of more than
de minimis value from any person or entity that does business with or on
behalf of the Investment Company.
G Service as a Director or Trustee
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1. No Advisory Person shall serve on a board of directors or
trustees of a publicly traded company without prior authorization
from the Board of Trustees of the Investment Company, based upon
a determination
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that such board service would be consistent with the interests of
the Investment Company and its investors.
2. If board service of an Advisory Person is authorized by the Board
of Trustees of the Investment Company such Advisory Person shall
be isolated from the investment-making decisions of the
Investment Company with respect to the companies of which he or
she is a director or trustee.
H Exempted Transactions
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The prohibitions of Section III (other than Section III.C and Section
III.D) shall not apply to:
1. purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control;
2. purchases or sales that are non-volitional on the part of the
Access Person or the Investment Company, including mergers,
recapitalizations or similar transactions;
3. purchases which are part of an automatic dividend reinvestment
plan;
4. purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired; and
5. purchases and sales that receive prior approval in writing by the
Preclearance Officer as (a) only remotely potentially harmful to
the Investment Company because they would be very unlikely to
affect a highly institutional market, (b) clearly not
economically related to the securities to be purchased or sold or
held by the Investment Company or client, and (c) not
representing any danger of the abuses proscribed by Rule 17j-1,
but only if in each case the prospective purchaser has identified
to the Review Officer all factors of which he or she is aware
which are potentially relevant to a conflict of interest
analysis, including the existence of any substantial economic
relationship between his or her transaction and securities held
or to be held by the Investment Company.
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IV. COMPLIANCE PROCEDURES
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A Preclearance
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An Access Person (other than a Disinterested Trustee) may not,
directly or indirectly, acquire or dispose of beneficial ownership of
a security except as provided below unless:
1. such purchase or sale has been approved by the Preclearance
Officer;
2. the approved transaction is completed on the same day approval is
received; and
3. the Preclearance Officer has not rescinded such approval prior to
execution of the transaction.
Each Access Person may effect total purchases and sales of up to
$25,000 of securities listed on a national securities exchange within
any six month period without preclearance from the Board of Trustees
or the Preclearance Officer, provided that:
1) The six month period is a "rolling" period, i.e., the limit
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is applicable between any two dates which are six months apart;
2) Transactions in options and futures, other than options or
futures on commodities, will be included for purposes of calculating
whether the $25,000 limit has been exceeded. Such transactions will
be measured by the value of the securities underlying the options
and futures; and
3) Although preclearance is not required for personal
transactions in securities which fall into this de minimis
exception, these trades must still be reported pursuant to Section
IV.B.
B. Reporting
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1. Unless excepted by paragraph 2 of this Section IV.B, every Access
Person of the Investment Company must report to the Review Officer as
described below.
a. Initial Holdings Reports. Not later than 10 days after the
person becomes an Access Person, the following information:
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. the title, number of shares and principal amount of each
security in which the Access Person had any direct or
indirect beneficial ownership when the person became an
Access Person;
. the name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were
held for the direct or indirect benefit of the Access Person
as of the date the person became an Access Person; and
. the date that the report is signed and submitted by the
Access Person.
b. Quarterly Transaction Reports. Not later than 10 days after the
end of each calendar quarter, the following information:
(i) With respect to any transaction during the quarter in a
security in which the Access Person had any direct or
indirect beneficial ownership:
. the date of the transaction, the title, the interest
rate and maturity date (if applicable), the number of
shares and the 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 of the security at which the transaction was
effected;
. the name of the broker, dealer or bank with or through
which the transaction was effected; and
. the date that the report is signed and submitted by the
Access Person.
(ii) With respect to any account established by the Access
Person in which any securities were held during the quarter
for the direct or indirect benefit of the Access Person:
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. the name of the broker, dealer or bank with whom the
Access Person established the account;
. the date that the account was established; and
. the date that the report is signed and submitted by the
Access Person.
(iii) In the event that no reportable transactions occurred
during the quarter, the report should be so noted and
returned signed and dated.
c. Annual Holdings Reports. Not later than each January 31st, the
following information (which information must be current as of
the immediately preceding December 31st):
. the title, number of shares and principal amount of each
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 on which the report is signed and submitted by the
Access Person.
2. The following are the exceptions to the reporting requirements
outlined in Section IV.B.1:
a. A person need not make any report required under of Section
IV.B.1 with respect to transactions effected for, and securities
held in, any account over which the person has no direct
influence or control, including such an account in which the
person has any beneficial ownership.
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b. A Disinterested Trustee who would be required to make the reports
required under Section IV.B.1 solely by reason of being a trustee
of the Investment Company need not make:
(i) an initial holdings report or an annual holdings report
under Section IV.B.1; or
(ii) a quarterly transaction report under Section IV.B.1 unless
the Disinterested Trustee knew or, in the ordinary course of
fulfilling his or her official duties as a Trustee of the
Investment Company, should have known, that during the 15-
day period immediately before or after the Trustee's
transaction in a security, the Investment Company purchased
or sold the security (or such security was added to or
deleted from the Domini 400 Social Index) or the Investment
Company or its investment adviser considered purchasing or
selling the security (or such security was being considered
for addition to or deletion from the Domini 400 Social
Index).
c. A person need not make a quarterly transaction report under
Section IV.B.1 if the report would duplicate information
contained in broker trade confirmations or account statements
received by the Review Officer with respect to the person in the
time period required under Section IV.B.1, if all of the
information required under Section IV.B.1 is contained in the
broker trade confirmations or account statements or in the
records of the Investment Company.
3. Any report delivered pursuant to Section IV.B.1 may contain a
statement that the report shall not be construed as an admission by
the person making such report that he or she has any direct or
indirect beneficial ownership in the securities to which the report
relates.
4. Each Access Person must certify annually (no later than each January
31st) that he or she has read and understands this Code of Ethics and
has complied with its provisions. Such certificates and reports are
to be given to the Review Officer.
C Review
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The Review Officer shall review all of the reports delivered under
Section IV.B to determine whether a violation of this Code of Ethics
may have
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occurred and shall take into account the exemptions allowed under
Section III.G hereunder to the extent applicable. Before making a
determination that a violation has been committed by an Access Person,
the Review Officer shall give such person an opportunity to supply
additional information regarding the transaction in question.
V. INVESTMENT ADVISER'S, ADMINISTRATOR'S OR PRINCIPAL UNDERWRITER'S CODE OF
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ETHICS
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This Code of Ethics does not apply to "access persons" (as defined in Rule
17j-1 under the 1940 Act) of any investment adviser, subadviser, administrator
or principal underwriter of the Investment Company who are not otherwise Access
Persons as defined herein. Each investment adviser (including, where applicable,
any subadviser), administrator (if any) or principal underwriter of the
Investment Company shall:
A submit to the Board of Trustees of the Investment Company a copy of its
Code of Ethics adopted pursuant to Rule 17j-1;
B promptly report to the Investment Company in writing any material
amendments to its Code of Ethics;
C promptly furnish to the Investment Company upon request copies of any
reports made pursuant to such Code of Ethics by any person who is an
Access Person of the Investment Company; and
D immediately furnish to the Investment Company, without request, all
material information regarding any violation of such Code of Ethics by
any person who is an Access Person of the Investment Company.
VI. REVIEW BY THE BOARD OF TRUSTEES
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Each of the Review Officer of the Investment Company and the Investment
Company's investment advisers, subadvisers, administrator and principal
underwriter shall furnish a written report to the Board of Trustees, at
least annually, that:
A describes any issues arising under the Code of Ethics or procedures of
such entity since the last report to the Board of Trustees, including,
but not limited to, information about material violations of its Code of
Ethics or procedures and sanctions imposed in response to the material
violations; and
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B certifies that the Investment Company, investment adviser, subadviser,
administrator or principal underwriter, as applicable, has adopted
procedures reasonably necessary to prevent its Access Persons from
violating its Code of Ethics.
VII. SANCTIONS
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A Sanctions for Violations by Access Persons
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If the Review Officer determines that a violation of this Code has
occurred, he or she shall so advise the Board of Trustees and the Board
may impose such sanctions as it deems appropriate, including, inter
alia, disgorgement of profits, censure, suspension or termination of the
employment of the violator. All material violations of the Code and any
sanctions imposed as a result thereto shall be reported periodically to
the Board of Trustees.
B Sanctions for Violations by Disinterested Trustees
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If the Review Officer determines that any Disinterested Trustee has
violated this Code, he or she shall so advise the President of the
Investment Company and also a committee consisting of the Disinterested
Trustees (other than the person whose transaction is at issue) and shall
provide the committee with a report, including the record of pertinent
actual or contemplated portfolio transactions of the Investment Company
and any additional information supplied by the person whose transaction
is at issue. The committee, at its option, shall either impose such
sanctions as it deems appropriate or refer the matter to the full Board
of Trustees of the Investment Company, which shall impose such sanctions
as it deems appropriate.
VIII. MISCELLANEOUS
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A Access Persons
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The Review Officer of the Investment Company will identify all Access
Persons who are under a duty to make reports to the Investment Company
and will inform such persons of such duty. Any failure by the Review
Officer to notify any person of his or her duties under this Code shall
not relieve such person of his or her obligations hereunder.
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B Records
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The Investment Company's administrator shall maintain records in the
manner and to the extent set forth below, which records may be
maintained on microfilm under the conditions described in Rule 31a-
2(f) under the 1940 Act, and shall be available for examination by
representatives of the Securities and Exchange Commission ("SEC"):
1. a copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved
in an easily accessible place;
2. a record of any violation of this Code and of any action taken as
a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
3. a copy of each report made pursuant to this Code shall be
preserved for a period of not less than five years from the end
of the fiscal year in which it is made, the first two years in an
easily accessible place;
4. a list of all persons who are required, or within the past five
years have been required, to make reports pursuant to this Code
shall be maintained in an easily accessible place;
5. copy of each report required under Section VI shall be preserved
for a period of not less than five years from the end of the
fiscal year in which it is made, the first two years in an early
accessible place; and
6. record of any decision, and the reasons supporting the decision,
to approve the acquisition by Advisory Persons of securities
under Section III.D shall be preserved for a period of not less
than five years from the end of the fiscal year in which the
approval is granted.
C Confidentiality
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All reports of securities transactions and any other information filed
pursuant to this Code shall be treated as confidential, except to the
extent required by law.
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D Interpretation of Provisions
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The Board of Trustees of the Investment Company may from time to time
adopt such interpretations of this Code as it deems appropriate.
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DOMINI SOCIAL EQUITY FUND
DOMINI INSTITUTIONAL TRUST
DOMINI SOCIAL INDEX PORTFOLIO
QUARTERLY TRANSACTIONS REPORT
-----------------------------
To: __________________________, Review Officer
From: ___________________________
(Your Name)
This Transaction Report (the "Report") is submitted pursuant to Section IV
of the Code of Ethics of Domini Social Equity Fund, Domini Institutional Trust
and Domini Social Index Portfolio (each, an "Investment Company"; collectively,
the "Investment Companies") and supplies (below) information with respect to
transactions in any security in which I may be deemed to have, or by reason of
such transaction acquire, any direct or indirect beneficial ownership interest
(whether or not such security is a security held or to be acquired by an
Investment Company) for the calendar quarter ended ____________.
Unless the context otherwise requires, all terms used in the Report shall
have the same meaning as set forth in the Code of Ethics.
For purposes of the Report, beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-1(a) (exclusive of
Section (a)(1) of such Rule) of the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Nature of
Transaction
(Whether Name of the
Purchase, Principal Broker, Dealer
Sale, or Amount of Price At Or Bank With
Other Type Of Securities Which the Whom The Nature Of
Title of Date of Disposition Acquired or Transaction Transaction Ownership
Securities Transaction Or Acquisition) Disposed Of Was Effected Was Effected Securities*
---------- ----------- --------------- ----------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
____________
* If appropriate, you may disclaim beneficial ownership of any security listed
in this report.
I HEREBY CERTIFY THAT I (1) HAVE READ AND UNDERSTAND THE CODE OF ETHICS OF
THE INVESTMENT COMPANY, DATED JANUARY 14, 2000, (2) RECOGNIZE THAT I AM SUBJECT
TO THE CODE OF ETHICS, (3) HAVE COMPLIED WITH THE REQUIREMENTS OF THE CODE OF
ETHICS OVER THE PAST YEAR, (4) HAVE DISCLOSED ALL PERSONAL SECURITIES
TRANSACTIONS OVER THE PAST YEAR REQUIRED TO BE DISCLOSED BY THE CODE OF ETHICS,
(5) HAVE SOUGHT AND OBTAINED PRECLEARANCE WHENEVER REQUIRED BY THE CODE OF
ETHICS AND (6) CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THE INFORMATION
FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
NAME (Print) ___________________________________________________________________
SIGNATURE ___________________________________________________________________
DATE ___________________________________________________________________
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DOMINI SOCIAL EQUITY FUND
DOMINI INSTITUTIONAL TRUST
DOMINI SOCIAL INDEX PORTFOLIO
(each an "Investment Company"; collectively the "Investment Companies"
PERSONAL TRADING REQUEST AND AUTHORIZATION
------------------------------------------
Personal Trading Request (to be completed by Access Person prior to any personal
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trade):
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Name: _________________________________
Date of proposed transaction: _________________________________
Name of the issuer and dollar amount or number of securities of the issuer to be
purchased or sold:
________________________________________________________________________________
Nature of the transaction (i.e., purchase, sale):/1/ ___________________________
Are you or a member of your immediate family an officer or director of the
issuer of the securities or of any affiliate/2/ of the issuer? Yes ____ No ____
If yes, please describe: ________________________________________________
Describe the nature of any direct or indirect professional or business
relationship that you may have with the issuer of the securities./3/
________________________________________________________________________________
Do you have any material nonpublic information concerning the issuer?
Yes _____ No ______
______________________
/1/If other than market order, please describe any proposed limits.
/2/For purposes of this question, "affiliate" includes (i) any entity that
directly or indirectly owns, controls or holds with power to vote 5% or more of
the outstanding voting securities of the issuer and (ii) any entity under common
control with the issuer.
/3/A "professional relationship" includes, for example, the provision of legal
counsel or accounting services. A "business relationship" includes, for
example, the provision of consulting services or insurance coverage.
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Do you beneficially own more than 1/2 of 1% of the outstanding equity securities
of the issuer?
Yes _______ No _______
If yes, please report the name of the issuer and the total number of shares
"beneficially owned":
________________________________________________________________________________
Are you aware of any facts regarding the proposed transaction, including the
existence of any substantial economic relationship between the proposed
transaction and any securities held or to be acquired by an Investment Company,
that may be relevant to a determination of the existence of a potential conflict
of interest?/4/
Yes _______ No _______
If yes, please describe:
________________________________________________________________________________
To the best of your knowledge and belief, the answers that you have
provided above are true and correct.
___________________________
Signature
_____________________
/4/ Facts that would be responsive to this question include, for example (i)
receipt of "special favors" from a stock promoter, including participation in a
private placement or initial public offering as an inducement to purchase other
securities for the Investment Company, or (ii) investment in securities of a
limited partnership that in turn owns warrants of a company formed for the
purpose of effecting a leveraged buy-out, in circumstances where the Investment
Company might invest in securities related to the leveraged buy-out. The
foregoing are only examples of pertinent facts and in no way limit the types of
facts that may be responsive to this question.
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Approval or Disapproval of Personal Trading Request (to be completed by
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Preclearance Officer):
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_____ I confirm that the above-described proposed transaction appears
to be consistent with the policies described in the Code of Ethics, and
that the conditions necessary/5/ for approval of the proposed transaction
have been satisfied.
_____ I do not believe the above-described proposed transaction is consistent
with the policies described in the Code of Ethics, or that the conditions
necessary for approval of the proposed transaction have been satisfied.
Dated: ____________ Signed: _______________________
Title: _______________________
__________________
/5/ In the case of a personal securities transaction by an Access Person of
the Investment Company (other than Disinterested Trustees), the Code of Ethics
requires that the Preclearance Officer determine that the proposed personal
securities transaction (i) is not potentially harmful to the Investment Company
(ii) would be unlikely to affect the market in which the Investment Company's
portfolio securities are traded, and (iii) is not related economically to
securities to be purchased, sold, or held by the Investment Company. In
addition, the Code requires that the Preclearance Officer determine that the
decision to purchase or sell the security at issue is not the result of
information obtained in the course of the Access Person's relationship with the
Investment Company.
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DOMINI SOCIAL INVESTMENTS LLC
(the "Adviser")
DSIL INVESTMENT SERVICES LLC
(the "Distributor")
Code of Ethics
Revised March 1, 2000
This Code of Ethics is intended to (a) minimize conflicts of interest, and
even the appearance of conflicts of interest, between the personnel of the
Adviser and the Distributor and their respective clients in the securities
markets and (b) effect compliance with applicable securities laws.
Each of the Adviser and the Distributor depends upon a high level of public
and client confidence for its success. That confidence can be maintained only if
the employees of the Adviser and the Distributor observe the highest standards
of ethical behavior in the performance of their duties. This Code (as it may be
amended or modified from time to time) is intended to inform all employees of
the Adviser and the Distributor of certain standards of conduct which they are
expected to observe.
It is not possible to provide a precise, comprehensive definition of a
conflict of interest. However, one factor which is common to all conflict of
interest situations is the possibility that an employee's actions or decisions
will be affected because of an actual or potential divergence between his or her
personal interests and those of the Adviser or the Distributor, as applicable,
or its clients. A particular activity or situation may be found to involve a
conflict of interest even though it does not result in any financial loss to the
Adviser or the Distributor, as applicable, or its clients and regardless of the
motivation of the employee involved. In all cases, if a conflict situation
arises between an employee and the Adviser or the Distributor, as applicable, or
its clients, the interest of the Adviser or the Distributor, as applicable, or
its client shall prevail.
This Code also addresses the possibility that personnel may, by virtue of
their positions with the Adviser or the Distributor, as applicable, be afforded
opportunities to participate in certain investment opportunities that are not
generally available to the investing public. Accepting such opportunities would
tend to compromise the independent judgment personnel are expected to exercise
for the benefit of clients and is therefore unacceptable.
This Code is intended to help address these concerns in a systematic way.
However, it is important that personnel go beyond the letter of this Code and
remain sensitive to the need to avoid improper conflicts of interest, or even
the appearance of such conflicts of interest, that are not expressly addressed
by this Code.
<PAGE>
-2-
This Code shall be administered by the Review Person and the Deputy Review
Person. Carole M. Laible is hereby named the "Review Person" and shall serve in
such capacity until the Management Committee of the Adviser and the
Distributor's Board of Managers designate a successor Review Person. Adam Kanzer
is hereby named the "Deputy Review Person" and shall serve in such capacity
until the Management Committee of the Adviser and the Distributor's Board of
Managers designate a successor Deputy Review Person. The Deputy Review Person
shall be responsible for administering the Code (including preclearance of
trades and review of transaction reports) for the Review Person.
1. Scope of this Code.
(a) Persons Covered. This Code applies to (i) each managing member,
manager, officer or Advisory Person (as defined below) of the Adviser
and (ii) each employee, managing member, manager or officer of the
Distributor who, in the ordinary course of business, makes,
participates in or obtains information regarding, the purchase or sale
of Covered Securities by a Fund (as defined below) for which the
Distributor acts, or whose functions or duties in the ordinary course
of business relate to the making of any recommendation to a Fund
regarding the purchase or sale of Covered Securities (each, an "Access
Person"). All full-time employees of the Adviser and the Distributor
----------------------------------------------------------
shall be considered Access Persons unless advised, in writing, to the
---------------------------------------------------------------------
contrary by the Review Person.
-----------------------------
An "Advisory Person" is (i) any employee of the Adviser (or of any
company in a control relationship to the Adviser) who, in connection
with his or her regular functions or duties, makes, participates in,
or obtains information regarding the purchase or sale of Covered
Securities by a Fund or any other client of the Adviser, or whose
functions relate to the making of any recommendations with respect to
such purchases or sales, and (ii) any natural person in a control
relationship with the Adviser who obtains information concerning the
recommendations made by the Adviser with regard to the purchase or
sale of Covered Securities.
A "Fund" is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act") for which the Adviser
provides investment advisory services or for which the Distributor
provides distribution services, as applicable.
(b) Definition of Securities. As used in this Code, the term "securities"
means all types of securities as defined in Section 2(a)(36) of the
1940 Act, and includes all types of debt, equity, and other
securities, including, among other things, common and preferred
stocks, bonds, mutual fund shares, money market instruments,
debentures, notes, limited partnership interests, warrants, depositary
receipts, options and other derivative securities. This Code does not
apply to savings, checking, NOW or money market accounts with banks,
savings and loan associations, credit unions or similar institutions.
<PAGE>
-3-
Definition of Covered Security. As used in this code "Covered
Security" means any security except for (i) direct obligations of the
Government of the United States, (ii) bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-term
debt instruments, including repurchase agreements, and (iii) shares
issued by open-end investment companies registered under the 1940 Act.
A direct obligation of the Government of the United States includes
any security issued or guaranteed as to principal or interest by the
Government of the United States or by any agency or instrumentality of
the Government of the United States.
A "Security Held or to be Acquired" by a Fund means (i) any Covered
Security which, within the most recent 15 days (A) is or has been held
by the Fund or (B) is being or has been considered by the Fund or the
Adviser for purchase by the Fund and (ii) any option to purchase or
sell, and any security convertible into or exchangeable for, a Covered
Security described in the preceding clause (i).
(c) Beneficial Ownership. For purposes of this Code, "beneficial
ownership" is interpreted in the same manner as it would be under Rule
16a-1(a)(2) of the Securities Exchange Act of 1934, and the rules and
regulations thereunder. Accordingly, a person shall have "beneficial
ownership" of any security if he or she, directly or indirectly,
through any contact, arrangement, understanding, relationship or
otherwise, has or shares a direct or indirect pecuniary interest in
the security. A person has a pecuniary interest in a security if he or
she has the opportunity, directly or indirectly, to profit or share in
any profit from a transaction in the subject security. A person may
have an indirect pecuniary interest in a security if, among other
things:
(i) the security is held by a member of that person's immediate
family sharing the same household;
(ii) the person is a general partner and the security is held by
the general partnership or limited partnership;
(iii) the person's interest in such security is held by a trust;
or
(iv) the person has a right to acquire such security through the
exercise or conversion of any derivative security, whether
or not presently exercisable.
(d) Types of Transactions Covered. This Code applies to all types of
transactions in securities, including purchases, sales, exchanges,
redemptions, short sales, donations, and gifts.
2. Prohibited Securities Transactions.
<PAGE>
-4-
(a) Unlawful Actions. No Access Person shall, in connection with the
purchase or sale, directly or indirectly, by such Access Person of a
Security Held or to be Acquired by a Fund:
(i) employ any device, scheme or artifice to defraud the Fund;
(ii) make any untrue statement of a material fact to the Fund or omit
to state to the Fund a material fact necessary in order to make
the statements made, in light of the circumstances under which
they are made, not misleading;
(iii) engage in any act, practice or course of business which would
operate as a fraud or deceit upon the Fund; or
(iv) engage in any manipulative practice with respect to the Fund.
(b) Restricted Securities. At the start of every month, the Review Person
will circulate a list of all issuers that during the month will be
reviewed or evaluated by the Adviser or its affiliate, Kinder,
Lydenberg, Domini & Co., Inc. ("KLD") for addition to, or removal
from, the Domini Social Index or any other index established or
maintained by the Adviser or KLD (each, an "Index"). The list will
also include issuers for which the Adviser or KLD completed an review
or evaluation for addition to or removal from an Index during the
preceding month. The securities of each issuer on that list will be
considered "Restricted Securities" until the circulation by the
Adviser of a subsequent monthly list that does not include such
issuer. An issuer shall remain on the list circulated for the next
month following the month in which the Adviser or KLD completes its
review or evaluation of the issuer for addition to or removal from an
Index and publishes the results of such review or evaluation
(including any decision to add the issuer to, or remove the issuer
from, an Index).
(c) Restrictions. No Access Person shall:
(i) effect any transaction in any security that is a Restricted
Security at the time such transaction is effected; or
(ii) purchase or otherwise acquire any security that reasonably
appears to have been offered or made available to such an Access
Person by virtue of his/her position with the Adviser or the
Distributor, as applicable, and is not generally available to the
investing public.
(d) Exceptions. The restrictions set forth in Sections 2(c), 5(a)(iii) and
5(a)(iv) of this Code shall not apply to the following:
(i) transactions in shares of any open-end investment companies
(open-end mutual funds) that are registered under the 1940 Act;
<PAGE>
-5-
(ii) purchases made pursuant to an automatic dividend reinvestment
plan;
(iii) receipts of stock dividends, stock splits, or similar
distributions;
(iv) transfers that are gifts or donations, provided that the donee
represents in writing that he or she has no present intention
of selling the securities;
(v) transactions for the sole account and benefit of other persons
to whom an Access Person has a fiduciary relationship apart
from the Adviser or the Distributor, as applicable;
(vi) transactions effected on behalf of an Access Person that are
beyond his or her reasonable control;
(vii) purchases made upon the exercise of rights distributed by an
issuer on a pro rata basis to all holders of a class of its
--------
securities, and sales of any such rights so acquired;
(viii) the receipt by an Access Person of securities as compensation
for, or in connection with, his or her employment or the
exercise by an Access Person of an option or warrant received
by such Access Person as compensation for, or in connection
with, his or her employment; and
(ix) transactions that receive prior written approval of the Review
Person, on the grounds that they are unlikely to have any
adverse effect on the Adviser or the Distributor, as
applicable, or their respective clients, involve no apparent
impropriety, and appear to be consistent with applicable
securities laws.
3. Misuse of Inside Information.
(a) Definition of Inside Information. For purposes of this Code, "Inside
Information" means any information obtained by an employee of the
Adviser or the Distributor in connection with his or her work on
behalf of the Adviser or the Distributor that such employee knows, or
in the exercise of reasonable care should know, is (i) not available
to the investing public generally, and (ii) material to a decision to
effect a transaction in a security.
(b) Ban on Trading. No employee of the Adviser or the Distributor shall
effect any transaction in, directly or indirectly, any security on the
basis of any Inside Information. This restriction is not subject to
the exceptions set forth in Sections 2(d), 4(b), or 5(b).
(c) Ban on Release or Disclosure. No employee of the Adviser or the
Distributor shall release or disclose Inside Information to any person
outside of the Adviser or the Distributor except that:
<PAGE>
-6-
(i) employees may release to authorized representatives of a client
Inside Information to which that client is entitled;
(ii) employees may release Inside Information to the Adviser's or the
Distributor's lawyers, accountants, and consultants as
appropriate in the conduct of the Adviser's or the Distributor's
affairs;
(iii) employees may release Inside Information to regulatory officials
and other persons as required by law; and
(iv) employees may release Inside Information in accordance with the
policies established by the Adviser's Management Committee or
the Distributor's Board of Managers, as applicable and the
instructions of the Review Person.
4. Reporting.
(a) Reporting Requirements. Each Access Person shall (unless excepted
under Section 4(b)) report to the Review Person as set forth below:
(i) Initial Holdings Reports. Not later than 10 days after the person
becomes an Access Person, the following information:
(A) the title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct
or indirect beneficial ownership when the person became an
Access Person;
(B) the name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were
held for the direct or indirect benefit of the Access Person
as of the date the person became an Access Person; and
(C) the date that the report is signed and submitted by the
Access Person.
(ii) Quarterly Transaction Reports. Not later than 10 days after the
end of each calendar quarter, the following information:
(A) With respect to any transaction during the quarter in a
Covered Security in which the Access Person had any direct
or indirect beneficial ownership:
. the date of the transaction, the title, the interest
rate and maturity date (if applicable), the number of
shares and the principal amount of each Covered
Security involved;
<PAGE>
-7-
. the nature of the transaction (i.e., purchase, sale or
any other type of acquisition or disposition);
. the price of the Covered Security at which the
transaction was effected;
. the name of the broker, dealer or bank with or through
which the transaction was effected; and
. the date that the report is signed and submitted by the
Access Person.
(B) With respect to any account established by the Access Person
in which any securities were held during the quarter for the
direct or indirect benefit of the Access Person:
the name of the broker, dealer or bank with whom the Access
Person established the account;
the date that the account was established; and
the date that the report is signed and submitted by the
Access Person.
(C) In the event that no reportable transactions occurred during
the quarter, the report should be so noted and returned
signed and dated.
(iii) Annual Holdings Reports. Not later than each January 31st, the
following information (which information must be current as of
the immediately preceding December 31st):
. 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 on which the report is signed and submitted by the
Access Person.
(b) Exceptions to Reporting Requirements. The following are the exceptions
to the reporting requirements outlined in Section 4(a):
<PAGE>
-8-
(i) A person need not make any report under Section 4(a) with respect
to transactions effected for, and Covered Securities held in, any
account over which the person has no direct influence or control.
(ii) A person need not make a quarterly transaction report under
Section 4(a)(ii) if the report would duplicate information
contained in broker trade confirmations or account statements
received by the Review Person with respect to the person in the
time period required under Section 4(a)(ii) and if all of the
information required under Section 4(a)(ii) is contained in the
broker trade confirmations or account statements or in the
records of the Adviser or the Distributor, as applicable.
(c) Certification. Each Access Person shall certify to the Review Person in
writing that (i) he or she has read and understands this Code, (ii) he
or she understands that he or she is subject to this Code, (iii) he or
she has complied with the requirements of this Code, and (iv) he or she
has disclosed or reported all securities transactions required to be
disclosed or reported under this Code, such certification to be given
at the following times: (A) in the case of persons that are Access
Persons at the date hereof, within 30 days after the adoption of this
Code; (B) in the case of persons that become Access Persons after the
date hereof, no later than 10 days after such person becomes an Access
Person; and (C) in all cases, once every calendar year on or before
January 31st.
5. Preclearance of Certain Securities Transactions.
(a) Preclearance Requirements. No Access Person shall:
(i) acquire, directly or indirectly, beneficial ownership in any
securities (including Restricted Securities) in an initial
public offering;
(ii) acquire, directly or indirectly, beneficial ownership in any
securities (including Restricted Securities) in a private
placement transaction;
(iii) effect any transaction (other than those transactions described
in clauses (i) and (ii) above) in any security; or
(iv) profit from the purchase and sale, or the sale and purchase, of
the same or equivalent securities within 60 calendar days;
unless, in each case, the transaction has been approved by the Review
Person not more than 72 hours prior to initiation of the transaction
(and such approval has not been rescinded).
(b) Exceptions to Preclearance Requirements. Sections 5(a)(iii) and
5(a)(iv) shall not apply to the following:
<PAGE>
-9-
(i) any transaction that is exempt under Section 2(d), including
transactions in shares of any open-end investment companies that
are registered under the 1940 Act;
(ii) any transactions in securities listed on a national securities
exchange of a company having a total market capitalization (at
the time of the transaction or, if such information is not
available, according to the company's most recent published
annual or quarterly financial statements) of not less than $5
billion;
(iii) transactions in the debt instruments issued or guaranteed by a
state or local government;
(iv) transactions in debt instruments issued or guaranteed by the
United States Government, Quasi United States Government Agency
or instrumentality of the United States; or
(v) total purchases and sales of up to $25,000 of securities listed
on a national securities exchange within any rolling six month
period.
6. Additional Restrictions on Access Persons.
(a) Gifts. No Access Person shall accept any gift or gratuity from any
person or business entity that does business with the Adviser or the
Distributor, provided this restriction does not apply to:
(i) any gifts or gratuities received in any 90 day period from any
one person or business entity, or several related persons or
business entities, having an aggregate fair market value of not
more than $150;
(ii) travel, lodging, entertainment, food, and beverages provided in
connection with a business or professional meeting or function;
and
(iii) goods and services, such as investment research reports and
newsletters, that are used in the conduct of the business of the
Adviser or the Distributor, as applicable.
(b) Service as a Director of a Publicly Traded Company. No Access Person
shall serve as a director of a company that files or is required to
file with the Securities and Exchange Commission periodic reports
under Section 13 or Section 15(d) of the Securities Exchange Act of
1934 (such as 10-Ks, 1O-Qs, and 8-Ks) without the prior approval of
the Review Person.
7. Review by the Review Person.
<PAGE>
-10-
(a) Review of Reports. The Review Person shall review all of the reports
delivered under Section 4 to determine whether a violation of this
Code may have occurred. Before making a determination that a
violation has been committed by an Access Person, the Review Officer
shall give such person an opportunity to supply additional information
regarding the transaction in question.
(b) Factors to be Considered. In reviewing proposed transactions and
other matters submitted for preclearance or approval under this Code,
the Review Person shall consider whether such transactions or matters
involve or are likely to involve: (i) violations of this Code or
applicable securities laws; (ii) improper use of Inside Information;
or (iii) an investment opportunity that should be reserved for the
Adviser or the Distributor, as applicable, or its clients.
(c) Approval Subject to Conditions. The Review Person may grant approval
of proposed transactions and other matters submitted for preclearance
or approval under this Code subject to such conditions as the Review
Person may impose to protect the interests of the Adviser and the
Distributor and their respective clients, including, among other
things, requiring that an Access Person who is authorized to acquire
securities in a private placement disclose that investment when he or
she plays a part in a review or analysis of the issuer of the
securities.
(d) Deputy Review Person May Act When Review Person is Unavailable. In the
event the Review Person is unavailable to review any report or
proposed transaction or other matter under this Code and it is
unlikely that the Review Person will become available in sufficient
time to review the report in a timely manner or for the transaction or
other matter to proceed without material hardship, the Deputy Review
Person may review such report or perform all functions of the Review
Person under the Code with respect to such transaction or other
matter. Nonetheless, the Deputy Review Person may defer review of any
report or transaction or other matter until the Review Person is
available to conduct such review.
8. Sanctions. Any violations of this Code will be reported to and subject to
review by the Management Committee of the Adviser or the President of the
Distributor, as applicable.
(a) If the Management Committee or the President, as applicable,
determines that a violation of this Code has occurred, the Management
Committee or the President, as applicable, may impose such sanctions
as is deemed appropriate, including, among other things:
(i) a letter of censure,
(ii) forfeiture of any profit made or loss avoided from a transaction
in violation of this Code, or
<PAGE>
-11-
(iii) suspension or termination of employment.
(b) Any Access Person subject to any sanctions imposed by the Management
Committee or the President under this Code shall be entitled, upon
request made within 60 days of the imposition of such sanctions, to a
complete review of the matter by the Board of Managers of the Adviser
or the Board of Managers of the Distributor, as applicable. Pending
such a review the Management Committee of the Adviser or the President
of the Distributor, as applicable, may impose such interim sanctions
as is deemed appropriate to protect the interests of the Adviser or
the Distributor, as applicable, until final resolution of the matter.
(c) Any violations resulting in sanctions will be reported to:
(i) the Board of Managers of the Adviser or the Board of Managers of
the Distributor, as applicable, and
(ii) (other than with respect to interim sanctions pending the
applicable Board of Managers review of a matter) the board of
directors or trustees of each Fund.
9. Miscellaneous.
(a) Access and Advisory Persons. The Review Person will identify all
Access and Advisory Persons who are under a duty to make reports under
this Code and will inform such persons of such duty. Any failure by
the Review Person to notify any person of his or her duties under this
Code shall not relieve such person of his or her obligations
hereunder.
(b) Records. Each of the Adviser and the Distributor shall maintain
records in the manner and to the extent set forth below, and shall be
available for examination by representatives of the Securities and
Exchange Commission ("SEC"):
(i) a copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be
preserved in an easily accessible place;
(ii) a record of any violation of this Code and of any action taken
as a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
(iii) a copy of each report made pursuant to this Code shall be
preserved for a period of not less than five years from the end
of the fiscal year in which it is made, the first two years in
an easily accessible place;
(iv) a list of all persons who are required, or within the past five
years have been required, to make reports pursuant to this Code
shall be maintained in an easily accessible place; and
<PAGE>
-12-
(v) record of any decision, and the reasons supporting the decision,
to approve the acquisition by an Access Person of securities
under Section 5(a) shall be preserved for a period of not less
than five years from the end of the fiscal year in which the
approval is granted.
(c) Confidentiality. All reports of securities transactions and any other
information filed pursuant to this Code shall be treated as
confidential, except to the extent required by law.
<PAGE>
[LOGO] Mellon
======-------------------------------------------------------------------
Securities Trading Policy
[PICTURE APPEARS HERE]
<PAGE>
[LOGO] Mellon
July 2000
Dear Mellon Financial Employee:
At Mellon, we take great pride in our transformation over the years from a
regional bank to a global financial services company. Our growth makes us better
able to meet customers' changing needs, gives us greater stability during any
unexpected economic downturn and affords us the opportunity to be the best
performing financial services company.
This diversity of our businesses also makes us a complex organization, which is
why it's more important than ever that you clearly understand Mellon's
Securities Trading Policy. Mellon has long maintained strict policies regarding
securities transactions, all with the same clear-cut objective: to establish and
demonstrate our compliance with the high standards with which we conduct our
business.
If you are new to Mellon, please take the time to fully understand the Policy
and consult it whenever you are unsure about appropriate actions. If you have
seen the Policy previously, I urge you to renew your understanding of the entire
document and its implications for you. Only by strict adherence to the Policy
can we ensure that our well-deserved reputation for integrity is preserved.
Sincerely yours,
/s/ Martin G. McGuinn
Martin G. McGuinn
Chairman and Chief Executive Officer
<PAGE>
Table of Contents
=================---------------------------------------------------------------
<TABLE>
<CAPTION>
Page #
<S> <C>
INTRODUCTION...................................................................... 1
CLASSIFICATION OF EMPLOYEES....................................................... 2
Insider Risk Employees....................................................... 2
Investment Employees......................................................... 2-3
Access Decision Makers....................................................... 3
Other Employees.............................................................. 3
Consultants, Independent Contractors and Temporary Employees................. 3
PERSONAL SECURITIES TRADING PRACTICES............................................. 4-45
Section One-Applicable to Insider Risk Employees
Quick Reference - Insider Risk Employees..................................... 4
Standards of Conduct for Insider Risk Employees.............................. 5-9
Restrictions on Transactions in Mellon Securities............................ 10-12
Restrictions on Transactions in Other Securities............................. 12-15
Protecting Confidential Information.......................................... 16-18
Section Two-Applicable to Investment Employees
Quick Reference - Investment Employees....................................... 19
Standards of Conduct for Investment Employees................................ 20-25
Restrictions on Transactions in Mellon Securities............................ 26-28
Restrictions on Transactions in Other Securities............................. 28-31
Protecting Confidential Information.......................................... 32-34
Special Procedures for Access Decision Makers................................ 34
Section Three-Applicable to Other Employees
Quick Reference - Other Employees............................................ 35
Standards of Conduct for Other Employees..................................... 36-37
Restrictions on Transactions in Mellon Securities............................ 37-39
Restrictions on Transactions in Other Securities............................. 39-42
Protecting Confidential Information.......................................... 43-45
GLOSSARY
Definitions.................................................................... 46-52
Exhibit A - Sample Letter to Broker............................................ 53
</TABLE>
<PAGE>
Introduction
============--------------------------------------------------------------------
The Securities Trading Policy (the "Policy") is designed to reinforce Mellon
Financial Corporation's ("Mellon's") reputation for integrity by avoiding even
the appearance of impropriety in the conduct of Mellon's business. The Policy
sets forth procedures and limitations which govern the personal securities
transactions of every Mellon employee.
Mellon and its employees are subject to certain laws and regulations governing
personal securities trading. Mellon has developed this Policy to promote the
highest standards of behavior and ensure compliance with applicable laws.
Employees should be aware that they may be held personally liable for any
improper or illegal acts committed during the course of their employment, and
that "ignorance of the law" is not a defense. Employees may be subject to civil
penalties such as fines, regulatory sanctions including suspensions, as well as
criminal penalties.
Employees outside the United States are also subject to applicable laws of
foreign jurisdictions, which may differ substantially from US law and which may
subject such employees to additional requirements. Such employees must comply
with applicable requirements of pertinent foreign laws as well as with the
provisions of the Policy. To the extent any particular portion of the Policy is
inconsistent with foreign law, employees should consult the General Counsel or
the Manager of Corporate Compliance.
Any provision of this Policy may be waived or exempted at the discretion of the
Manager of Corporate Compliance. Any such waiver or exemption will be evidenced
in writing and maintained in the Audit & Risk Review Department.
Employees must read the Policy and must comply with it. Failure to comply with
the provisions of the Policy may result in the imposition of serious sanctions,
including but not limited to disgorgement of profits, dismissal, substantial
personal liability and referral to law enforcement agencies or other regulatory
agencies. Employees should retain the Policy in their records for future
reference. Any questions regarding the Policy should be referred to the Manager
of Corporate Compliance or his/her designee.
--------------------------------------------------------------------------------
page 1
<PAGE>
Classification of Employees
=======================---------------------------------------------------------
The Policy is applicable to all employees
of Mellon and all of its subsidiaries
which are more than 50% owned by Mellon.
This includes all full-time, part-time,
benefited and non-benefited, exempt and
non-exempt, domestic and international
employees. It does not include consultants
and contract or temporary employees, nor
employees of subsidiaries which are 50% or
less owned by Mellon. Although the Policy
provisions generally have worldwide
applicability, some sections of the Policy
may conflict with the laws or customs of
the countries in which Mellon operations
are located. The Policy may be amended for
operations outside the United States only
with the approval of the Manager of
Corporate Compliance.
Employees are engaged in a wide variety of
activities for Mellon. In light of the
nature of their activities and the impact
of federal and state laws and the
regulations thereunder, the Policy imposes
different requirements and limitations on
employees based on the nature of their
activities for Mellon. To assist employees
in complying with the requirements and
limitations imposed on them in light of
their activities, employees are classified
into one of four categories: Insider Risk
Employee, Investment Employee, Access
Decision Maker and Other Employee.
Appropriate requirements and limitations
are specified in the Policy based upon an
employee's classification.
Business line management, in conjunction
with the Manager of Corporate Compliance,
will determine the classification of each
employee based on the following
guidelines. Employees should confirm their
classification with their Preclearance
Compliance Officer or the Manager of
Corporate Compliance.
Insider Risk Employee You are considered to be an Insider Risk
Employee if, in the normal conduct of your
Mellon responsibilities, you are likely to
receive or be perceived to possess or
receive, material nonpublic information
concerning Mellon's commercial credit or
corporate finance customers. This will
typically include certain employees in the
credit, lending and leasing businesses,
certain members of the Audit & Risk
Review, and Legal Departments, and all
members of the Senior Management Committee
who are not Investment Employees.
Investment Employee You are considered to be an Investment
Employee if, in the normal conduct of your
Mellon responsibilities, you are likely to
receive or be perceived to possess or
receive, material nonpublic information
concerning Mellon's trading in securities
for the accounts of others, and/or if you
provide investment advice.
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page 2
<PAGE>
Classification of Employees
=======================---------------------------------------------------------
Investment Employee This will typically include:
(cont.) . certain employees in fiduciary
securities sales and trading, investment
management and advisory services,
investment research and various trust or
fiduciary functions;
. an employee of a Mellon entity
registered under the Investment Advisers
Act of 1940 who is also an "Access
Person" as defined by Rule 17j-1 of the
Investment Company Act of 1940 (see
glossary); and
. any member of Mellon's Senior Management
Committee who, as part of his/her usual
duties, has management responsibility
for fiduciary activities or routinely
has access to information about
customers' securities transactions.
Access Decision Maker (ADM) A person designated as such by the
Investment Ethics Committee. Generally,
this will be portfolio managers and
research analysts who make recommendations
or decisions regarding the purchase or
sale of equity, convertible debt, and non-
investment grade debt securities for
mutual funds and other managed accounts.
See further details in the Access Decision
Maker edition of the Policy.
Other Employee You are considered to be an Other
Employee if you are an employee of Mellon
Financial Corporation or any of its direct
or indirect subsidiaries who is not an
Insider Risk Employee, Investment
Employee, or an ADM.
Consultants, Independent Managers should inform consultants,
Contractors and Temporary independent contractors and temporary
Employees employees of the general provisions of the
Policy (such asthe prohibition on trading
while in possession of material nonpublic
information), but generallythey will not
be required to preclear trades or report
their personal securities holdings. If one
of these persons would be considered an
Insider Risk Employee, Investment Employee
or Access Decision Maker if the person
were a Mellon employee, the person's
manager should advise the Manager of
Corporate Compliance who will determine
whether such individual should be subject
to the preclearance and reporting
requirements of the Policy.
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Section One-Applicable to Insider Risk Employees
QUICK REFERENCE-INSIDER RISK EMPLOYEES
Some things you must do
Duplicate Statements & Confirmations--Instruct your broker, trust account
manager or other entity through which you have a securities trading account to
send directly to Manager of Corporate Compliance, Mellon Financial Corporation,
PO Box 3130, Pittsburgh, PA 15230-3130:
. Trade confirmations summarizing each transaction
. Periodic statements
Exhibit A of this Policy can be used to notify your broker. This applies to all
accounts in which you have a beneficial interest. (See Glossary)
Preclearance--Before initiating a securities transaction,
written preclearance must be obtained from the
Manager of Corporate Compliance. This can be done
by completing a Preclearance Request Form and:
. delivering the request to the Manager of Corporate Compliance, AIM 151-4340,
. faxing the request to (412) 234-1516, or
. contacting the Manager of Corporate Compliance for other available
notification options.
Preclearance Request Forms can be obtained from Corporate Compliance (412)
234-1661. If preclearance approval is received the trade must be executed before
the end of the 3rd business day (with the date of approval being the 1st
business day), at which time the preclearance approval will expire.
Special Approvals
. Acquisition of securities in a Private Placement must be precleared by the
employee's Department/ Entity head and the Manager of Corporate Compliance.
. Acquisition of securities through an allocation by the underwriter of an
Initial Public Offering (IPO) is prohibited without the approval of the
Manager of Corporate Compliance. Approval can be given only when the
allocation is the result of a direct family relationship.
Some things you must not do Mellon Securities--The following transactions in
Mellon securities are prohibited for all Mellon Employees:
. Short sales
. Purchasing and selling or selling and purchasing within 60 days
. Purchasing or selling during a blackout period
. Margin purchases or options other than employee options.
Non-Mellon Securities--New investments in financial services organizations are
prohibited for certain employees only-see page 13.
Other restrictions are detailed throughout Section One.
Read the Policy!
Exemptions
Preclearance is NOT required for:
. Purchases or sales of municipal bonds, non-financial commodities (such as
agricultural futures, metals, oil, gas, etc.), currency futures, financial
futures, index futures, index securities, securities issued by investment
companies, commercial paper; CDs; bankers' acceptances; repurchase agreements;
and direct obligations of the government of the United States.
. Transactions in any account over which the employee has no direct or indirect
control over the investment decision making process.
. Transactions that are non-volitional on the part of an employee (such as stock
dividends).
. Changes in elections under Mellon's 401(k) Retirement Savings Plan.
. An exercise of an employee stock option administered by Human Resources.
. Automatic reinvestment of dividends under a DRIP or Automatic Investment Plan.
(Optional cash purchases under a DRIP or Direct Purchase Plan do require
preclearance.)
. Sales of securities pursuant to tender offers and sales or exercises of
"Rights" (see page 7).
Questions?
(412) 234-1661
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF CONDUCT FOR INSIDER RISK EMPLOYEES
Because of their particular
responsibilities, Insider Risk Employees
are subject to preclearance and personal
securities reporting requirements, as
discussed below.
Every Insider Risk Employee must follow
these procedures or risk serious
sanctions, including dismissal. If you
have any questions about these procedures
you should consult the Manager of
Corporate Compliance. Interpretive issues
that arise under these procedures shall be
decided by, and are subject to the
discretion of, the Manager of Corporate
Compliance.
Conflict of Interest No employee may engage in or recommend any
securities transac-tion that places, or
appears to place, his or her own interests
above those of any customer to whom
financial services are rendered, including
mutual funds and managed accounts, or
above the interests of Mellon.
Material Nonpublic Information No employee may engage in or recommend a
securities transaction, for his or her own
benefit or for the benefit of others,
including Mellon or its customers, while
in possession of material nonpublic
information regarding such securities. No
employee may communicate material
nonpublic information to others unless it
is properly within his or her job
responsibilities to do so.
Brokers Trading Accounts--All Insider Risk
Employees are encouraged to conduct their
personal investing through a Mellon
affiliate brokerage account. This will
assist in the monitoring of account
activity on an ongoing basis in order to
ensure compliance with the Policy.
Personal Securities Transactions Trading Accounts--All Insider Risk
Employees are required to instruct Reports
their broker, trust account manager or
other entity through which they have a
securities trading account to submit
directly to the Manager of Corporate
Compliance copies of all trade
confirmations and statements relating to
each account of which they are a
beneficial owner regardless of what, if
any, securities are maintained in such
accounts. Thus, for example, even if the
brokerage account contains only mutual
funds or other exempt securities as that
term is defined by the Policy and the
account has the capability to have
reportable securities traded in it, the
Insider Risk Employee maintaining such an
account must arrange for duplicate account
statements and trade confirmations to be
sent by the broker to the Manager of
Corporate Compliance. An example of an
instruction letter to a broker is in
Exhibit A.
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Preclearance for Personal All Insider Risk Employees must
Securities Transactions notify the Manager of Corporate
Compliance in writing and receive
preclearance before they engage in
any purchase or sale of a
security. Insider Risk Employees
should refer to the provisions
under "Beneficial Ownership" on
page 15, which are applicable to
these provisions.
All requests for preclearance for
a securities transaction shall be
submitted by completing a
Preclearance Request Form which
can be obtained from the Manager
of Corporate Compliance.
The Manager of Corporate
Compliance will notify the Insider
Risk Employee whether the request
is approved or denied, without
disclosing the reason for such
approval or denial.
Notifications may be given in
writing or verbally by the Manager
of Corporate Compliance to the
Insider Risk Employee. A record of
such notification will be
maintained by the Manager of
Corporate Compliance. However, it
shall be the responsibility of the
Insider Risk Employee to obtain a
written record of the Manager of
Corporate Compliance's
notification within 24 hours of
such notification. The Insider
Risk Employee should retain a copy
of this written record.
As there could be many reasons for
preclearance being granted or
denied, Insider Risk Employees
should not infer from the
preclear- ance response anything
regarding the security for which
preclearance was requested.
Although making a preclearance
request does not obligate an
Insider Risk Employee to do the
transaction, it should be noted
that:
. preclearance requests should not
be made for a transaction that
the Insider Risk Employee does
not intend to make.
. preclearance authorization will
expire at the end of the third
business day after it is
received. The day authorization
is granted is considered the
first business day.
. Insider Risk Employees should
not discuss with anyone else,
inside or outside Mellon, the
response they received to a pre-
clearance request. If the
Insider Risk Employee is
preclearing as beneficial owner
of another's account, the
response may be dis- closed to
the other owner.
. Good Until Canceled/Stop Loss
Orders ("Limit Orders") must be
precleared, and security
transactions receiving
preclearance authorization must
be executed before the
preclearance expires. At the end
of the three-day preclearance
authorization period, any
unexecuted Limit Order must be
canceled or a new preclearance
authorization must be obtained.
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Exemptions from Requirement Preclearance by Insider Risk Employees is not
to Preclear required for the following transactions:
. Purchases or sales of Exempt Securities
(direct obligations of the government of the
United States; high quality short-term debt
instruments; bankers' acceptances; CDs;
commercial paper; repurchase agreements; and
securities issued by open-end investment
companies);
. Purchases or sales of municipal bonds,
closed-end mutual funds; non-financial
commodities (such as agricultural futures,
metals, oil, gas, etc.), currency futures,
financial futures, index futures and index
securities;
. Purchases or sales effected in any account
over which an employee has no direct or
indirect control over the investment
decision making process (e.g., discretionary
trading accounts). Discretionary trading
accounts may only be exempted from
preclearance procedures, when the Manager of
Corporate Compliance, after a thorough
review, is satisfied that the account is
truly discretionary;
. Transactions that are non-volitional on the
part of an employee (such as stock
dividends);
. The sale of Mellon stock received upon the
exercise of an employee stock option if the
sale is part of a "netting of shares" or
"cashless exercise" administered by the
Human Resources Department (for which the
Human Resources Department will forward
information to the Manager of Corporate
Compliance);
. Changes to elections in the Mellon 401(k)
plan;
. Purchases effected upon the exercise of
rights issued by an issuer pro rata to all
holders of a class of securities, to the
extent such rights were acquired from such
issuer;
. Sales of rights acquired from an issuer, as
described above; and/or
. Sales effected pursuant to a bona fide
tender offer.
Gifting of Securities Insider Risk Employees desiring to make a bona
fide gift of securities or who receive a bona
fide gift, including an inheritance, of
securities do not need to preclear the
transaction. However, Insider Risk Employees
must report such bona fide gifts to the
Manager of Corporate Compliance. The report
must be made within 10 days of making or
receiving the gift and must disclose the
following informa-tion: the name of the person
receiving (giving) the gift, the date of the
transaction, and the name of the broker
through which the transac-tion was effected. A
bona fide gift is one where the donor does not
receive anything of monetary value in return.
An Insider Risk Employee who purchases a
security with the intention of making a gift
must preclear the purchase transaction.
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DRIPs, DPPs and AIPs Certain companies with publicly traded
securities establish:
. Dividend Reinvestment Plans (DRIPs)--
These permit shareholders to have their
dividend payments channeled to the
purchase of additional shares of such
company's stock. An additional benefit
offered to DRIP participants is the
right to buy additional shares by
sending in a check before the dividend
reinvestment date ("optional cash
purchases").
. Direct Purchase Plans (DPPs) -These
allow purchasers to buy stock by sending
a check directly to the issuer, without
using a broker.
. Automatic Investment Plans (AIPs)- These
allow purchasers to set up a plan
whereby a fixed amount of money is
automatically deducted from their
checking account each month and used to
purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP is
voluntary.
Insider Risk Employees who enroll in a DRIP
or AIP are not required to preclear
enrollment, the periodic reinvestment of
dividend payments into additional shares of
company stock through a DRIP, or the periodic
investments through an AIP.
Insider Risk Employees must preclear all
optional cash purchases through a DRIP and
all purchases through a DPP. Insider Risk
Employees must also preclear all sales
through a DRIP, DPP or AIP.
Restricted List The Manager of Corporate Compliance will
maintain a list (the "Restricted List") of
companies whose securities are deemed
appropriate for implementation of trading
restrictions for Insider Risk Employees. The
Restricted List will not be distributed
outside of the office of Corporate
Compliance. From time to time, such trading
restrictions may be appropriate to protect
Mellon and its Insider Risk Employees from
potential violations, or the appearance of
violations, of securities laws. The inclusion
of a company on the Restricted List provides
no indication of the advisability of an
investment in the company's securities or the
existence of material nonpublic information
on the company. Nevertheless, the contents of
the Restricted List will be treated as
confidential information to avoid unwarranted
inferences.
To assist the Manager of Corporate Compliance
in identifying companies that may be
appropriate for inclusion on the Restricted
List, the department/entity heads in which
Insider Risk Employees are employed are
required to inform the Manager of Corporate
Compliance in writing of any companies they
believe should be included on the Restricted
List, based upon facts known or readily
available to such department heads.
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Personal Securities Trading Practices
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Restricted List Although the reasons for inclusion on the
(cont.) Restricted List may vary, they could
typically include the following:
. Mellon is involved as a lender, investor
or adviser in a merger, acquisition or
financial restructuring involving the
company;
. Mellon is involved as a selling
shareholder in a public distribution of
the company's securities;
. Mellon is involved as an agent in the
distribution of the company's
securities;
. Mellon has received material nonpublic
information on the company;
. Mellon is considering the exercise of
significant creditors' rights against
the company; or
. The company is a Mellon borrower in
Credit Recovery.
Department heads of sections in which Insider
Risk Employees are employed are also
responsible for notifying the Manager of
Corporate Compliance in writing of any change
in circumstances making it appropriate to
remove a company from the Restricted List.
The Manager of Corporate Compliance will
retain copies of the restricted lists for
five years.
Confidential Treatment The Manager of Corporate Compliance will use
his or her best efforts to assure that all
requests for preclearance, all personal
securities transaction reports and all
reports of securities holdings are treated as
"Personal and Confidential. " However, such
documents will be available for inspection by
appropriate regulatory agencies and by other
parties within and outside Mellon as are
necessary to evaluate compliance with or
sanctions under this Policy.
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page 9
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RESTRICTIONS ON TRANSACTIONS IN MELLON SECURITIES
Employees who engage in transactions
involving Mellon securities should be aware
of their unique responsibilities with respect
to such transactions arising from the
employment relationship and should be
sensitive to even the appearance of
impropriety.
The following restrictions apply to all
transactions in Mellon's publicly traded
securities occurring in the employee's own
account and in all other accounts over which
the employee could be presumed to exercise
influence or control (see provisions under
"Beneficial Ownership" on page 15 for a more
complete discussion of the accounts to which
these restrictions apply). These restrictions
are to be followed in addition to any
restrictions that apply to particular
officers or directors (such as restrictions
under Section 16 of the Securities Exchange
Act of 1934).
. Short Sales--Short sales of Mellon
securities by employees are prohibited.
. Short Term Trading--Employees are
prohibited from purchasing and selling,
or from selling and purchasing, Mellon
securities within any 60 calendar day
period.
. Margin Transactions--Purchases on margin
of Mellon's publicly traded securities
by employees is prohibited. Margining
Mellon securities in connection with a
cashless exercise of an employee stock
option through the Human Resources
Department is exempt from this
restriction. Further, Mellon securities
may be used to collateralize loans or
the acquisition of securities other than
those issued by Mellon.
. Option Transactions--Option transactions
involving Mellon's publicly traded
securities are prohibited. Transactions
under Mellon's Long-Term Incentive Plan
or other employee option plans are
exempt from this restriction.
. Major Mellon Events--Employees who have
knowledge of major Mellon events that
have not yet been announced are
prohibited from buying or selling
Mellon's publicly traded securities
before such public announcements, even
if the employee believes the event does
not constitute material nonpublic
information.
. Mellon Blackout Period--Employees are
prohibited from buying or selling
Mellon's publicly traded securities
during a blackout period. The blackout
period begins the 16th day of the last
month of each calendar quarter and ends
3 business days after Mellon Financial
Corporation publicly announces the
financial results for that quarter.
Thus, the blackout periods begin on
March 16, June 16, September 16 and
December 16. The end of the blackout
period is determined by counting
business days only, and the day of the
earnings announcement is day 1. The
blackout period ends at the end of day
3, and employees can trade Mellon
securities on day 4.
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Personal Securities Trading Practices
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Mellon 401(k) Plan For purposes of the blackout period and the
short term trading rule, employees' changing
their existing account balance allocation to
increase or decrease the amount allocated to
Mellon Common Stock will be treated as a
purchase or sale of Mellon Stock,
respectively. This means:
. Employees are prohibited from increasing
or decreasing their existing account
balance allocation to Mellon Common
Stock during the blackout period.
. Employees are prohibited from increasing
their existing account balance
allocation to Mellon Common Stock and
then decreasing it within 60 days.
Similarly, employees are prohibited from
decreasing their existing account
balance allocation to Mellon Common
Stock and then increasing it within 60
days. However, changes to existing
account balance allocations in the
401(k) plan will not be compared to
transactions in Mellon securities
outside the 401(k) for purposes of the
60-day rule. (Note: This does not apply
to members of the Executive Management
Group, who should consult with the Legal
Department.)
Except for the above there are no other
restrictions applicable to the 401(k) plan.
This means, for example:
. Employees are not required to preclear
any elections or changes made in their
401(k) account.
. There is no restriction on employees'
changing their salary deferral
contribution percentages with regard to
either the blackout period or the 60-day
rule.
. The regular salary deferral contribution
to Mellon Common Stock in the 401(k)
that takes place with each pay will not
be considered a purchase for the
purposes of either the blackout or the
60-day rule.
Mellon Employee Receipt--Your receipt of an employee stock
Stock Options option from Mellon is not deemed to be a
purchase of a security. Therefore, it is
exempt from preclearance and reporting
requirements, can take place during the
blackout period and does not constitute a
purchase for purposes of the 60-day
prohibition.
Exercises--The exercise of an employee stock
option that results in your holding the
shares is exempt from preclearance and
reporting requirements, can take place during
the blackout period and does not constitute a
purchase for purposes of the 60-day
prohibition.
"Cashless" Exercises--The exercise of an
employee stock option which is part of a
"cashless exercise" or "netting of shares"
that is administered by the Human Resources
Department or Chase Mellon Shareholder
Services is exempt from the preclearance and
reporting requirements and will not
constitute a purchase or a sale for purposes
of the 60-day prohibition. A "cashless
exercise" or "netting of shares" transaction
is permitted during the blackout period for
ShareSuccess plan options only. They are not
permitted during the blackout period for any
other plan options.
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Mellon Employee Sales--The sale of the Mellon securities that
Stock Options were received in the exercise of an employee
stock option is treated like any other sale
(cont.) under the Policy (regardless of how
little time has elapsed between the option
exercise and the sale). Thus, such sales are
subject to the preclearance and reporting
requirements, are prohibited during the
blackout period and constitute sales for
purposes of the 60-day prohibition.
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES
Purchases or sales by an employee of the
securities of issuers with which Mellon does
business, or other third party issuers, could
result in liability on the part of such
employee. Employees should be sensitive to
even the appearance of impropriety in
connection with their personal securities
transactions. Employees should refer to
"Beneficial Ownership" on page 15, which is
applicable to the following restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that
do business with Mellon. Employees should
refer to the Code of Conduct and comply with
such restrictions in addition to the
restrictions and reporting requirements set
forth below. The following restrictions apply
to all securities transactions by employees:
. Credit, Consulting or Advisory
Relationship--Employees may not buy or
sell securities of a company if they are
considering granting, renewing,
modifying or denying any credit facility
to that company, acting as a benefits
consultant to that company, or acting as
an adviser to that company with respect
to the company's own securities. In
addition, lending employees who have
assigned responsibilities in a specific
industry group are not permitted to
trade securities in that industry. This
prohibition does not apply to
transactions in open end mutual funds.
. Customer Transactions--Trading for
customers and Mellon accounts should
always take precedence over employees'
transactions for their own or related
accounts.
. Excessive Trading, Naked Options--Mellon
discourages all employees from engaging
in short-term or speculative trading, in
trading naked options, in trading that
could be deemed excessive or in trading
that could interfere with an employee's
job responsibilities.
. Front Running--Employees may not engage
in "front running," that is, the
purchase or sale of securities for their
own accounts on the basis of their
knowledge of Mellon's trading positions
or plans.
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. Initial Public Offerings--Insider Risk
Employees are prohibited from acquiring
securities through an allocation by the
underwriter of an Initial Public
Offering (IPO) without the approval of
the Manager of Corporate Compliance.
Approval can be given only when the
allocation comes through an employee of
the issuer who is a direct family
relation of the Insider Risk Employee.
Due to NASD rules, this approval may not
be available to employees of registered
broker/dealers.
. Material Nonpublic Information--
Employees possessing material nonpublic
information regarding any issuer of
securities must refrain from purchasing
or selling securities of that issuer
until the information becomes public or
is no longer considered material.
. Private Placements--Insider Risk
Employees are prohibited from acquiring
any security in a private placement
unless they obtain the prior written
approval of the Manager of Corporate
Compliance and the employee's department
head. Approval must be given by both
persons for the acquisition to be
considered approved. After receipt of
the necessary approvals and the
acquisition, employees are required to
disclose that investment if they
participate in any subsequent
consideration of credit for the issuer,
or of an investment in the issuer for an
advised account. Final decision to
acquire such securities for an advised
account will be subject to independent
review.
. Scalping--Employees may not engage in
"scalping," that is, the purchase or
sale of securities for their own or
Mellon's accounts on the basis of
knowledge of customers' trading
positions or plans.
. Short Term Trading--All employees are
discouraged from purchasing and selling,
or from selling and purchasing, the same
(or equivalent) securities within any 60
calendar day period.
Prohibition on Investments in You are prohibited from acquiring any
Securities of Financial Services security issued by a financial services
Organizations organization if you are:
. a member of the Mellon Senior Management
Committee.
. employed in any of the following
departments:
. Corporate Strategy & Development
. Legal (Pittsburgh only)
. Finance (Pittsburgh only)
. an employee specifically designated by
the Manager of Corporate Compliance and
informed that this prohibition is
applicable to you.
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Prohibition on Investments in Financial Services Organizations--The
Securities of Financial Services term "security issued by a financial
Organizations services organization" includes any
(cont.) security issued by:
. Commercial Banks other than Mellon
. Bank Holding Companies other than
Mellon
. Insurance Companies
. Investment Advisory Companies
. Shareholder Servicing Companies
. Thrifts
. Savings and Loan Associations
. Broker/Dealers
. Transfer Agents
. Other Depository Institutions
The term "securities issued by a
financial services organization" does
not include securities issued by mutual
funds, variable annuities or insurance
policies. Further, for purposes of
determining whether a company is a
financial services organization,
subsidiaries and parent companies are
treated as separate issuers.
Effective Date--Securities of financial
services organizations properly acquired
before the employee's becoming subject
to this prohibition may be maintained or
disposed of at the owner's discretion
consistent with this policy.
Additional securities of a financial
services organization acquired through
the reinvestment of the dividends paid
by such financial services organization
through a dividend reinvestment program
(DRIP), or through an automatic
investment plan (AIP) are not subject to
this prohibition, provided the
employee's election to participate in
the DRIP or AIP predates the date of the
employee's becoming subject to this
prohibition. Optional cash purchases
through a DRIP or direct purchase plan
(DPP) are subject to this prohibition.
Securities acquired in any account over
which an employee has no direct or
indirect control over the investment
decision making process (e.g.,
discretionary trading accounts) are not
subject to this prohibition.
Within 30 days of becoming subject to
this prohibition, all holdings of
securities of financial services
organizations must be disclosed in
writing to the Manager of Corporate
Compliance.
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page 14
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Beneficial Ownership The provisions of the Policy apply to
transactions in the employee's own name and
to all other accounts over which the employee
could be presumed to exercise influence or
control, including:
. accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
. accounts of any other member of the
employee's household (e.g., a relative
living in the same home);
. trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or
influence;
. corporate accounts controlled, directly
or indirectly, by the employee;
. arrangements similar to trust accounts
that are established for bona fide
financial purposes and benefit the
employee; and
. any other account for which the employee
is the beneficial owner (see Glossary
for a more complete legal definition of
"beneficial owner").
Non-Mellon Employee The provisions discussed above do not apply
Benefit Plans to transactions done under a bona fide
employee benefits plan administered by an
organization not affiliated with Mellon and
by an employee of that organization who
shares beneficial interest with a Mellon
employee, and in the securities of the
employing organization. This means if a
Mellon employee's spouse is employed at a
non-Mellon company, the Mellon employee is
not required to obtain approval for
transactions in the employer's securities
done by the spouse as part of the spouse's
employee benefit plan.
The Securities Trading Policy does not apply
in such a situation. Rather, the other
organization is relied upon to provide
adequate supervision with respect to
conflicts of interest and compliance with
securities laws.
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page 15
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Personal Securities Trading Practices
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PROTECTING CONFIDENTIAL INFORMATION
As an employee you may receive information
about Mellon, its customers and other
parties that, for various reasons, should be
treated as confidential. All employees are
expected to strictly comply with measures
necessary to preserve the confidentiality of
information. Employees should refer to the
Mellon Code of Conduct.
Insider Trading and Tipping Federal securities laws generally prohibit
Legal Prohibitions the trading of securities while in possession
of "material nonpublic" information regarding
the issuer of those securities (insider
trading). Any person who passes along
material nonpublic information upon which a
trade is based (tipping) may also be liable.
Information is "material" if there is a
substantial likelihood that a reasonable
investor would consider it important in
deciding whether to buy, sell or hold
securities. Obviously, information that would
affect the market price of a security would
be material. Examples of information that
might be material include:
. a proposal or agreement for a merger,
acquisition or divestiture, or for the
sale or purchase of substantial assets;
. tender offers, which are often material
for the party making the tender offer as
well as for the issuer of the securities
for which the tender offer is made;
. dividend declarations or changes;
. extraordinary borrowings or liquidity
problems;
. defaults under agreements or actions by
creditors, customers or suppliers
relating to a company's credit standing;
. earnings and other financial
information, such as large or unusual
write-offs, write-downs, profits or
losses;
. pending discoveries or developments,
such as new products, sources of
materials, patents, processes,
inventions or discoveries of mineral
deposits;
. a proposal or agreement concerning a
financial restructuring;
. a proposal to issue or redeem
securities, or a development with
respect to a pending issuance or
redemption of securities;
. a significant expansion or contraction
of operations;
. information about major contracts or
increases or decreases in orders;
. the institution of, or a development in,
litigation or a regulatory proceeding;
. developments regarding a company's
senior management;
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Insider Trading and Tipping . information about a company received
Legal Prohibitions from a director of that company; and
(cont.)
. information regarding a company's
possible noncompliance with
environmental protection laws.
This list is not exhaustive. All relevant
circumstances must be considered when
determining whether an item of information is
material.
"Nonpublic"--Information about a company is
nonpublic if it is not generally available to
the investing public. Information received
under circumstances indicating that it is not
yet in general circulation and which may be
attributable, directly or indirectly, to the
company or its insiders is likely to be
deemed nonpublic information.
If you obtain material non-public information
you may not trade related securities until
you can refer to some public source to show
that the information is generally available
(that is, available from sources other than
inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in
widely accessible sources--such as in
newspapers or on the internet--becomes public
very soon after publication, information
appearing in less accessible sources--such as
regulatory filings, may take up to several
days to be deemed public. Similarly, highly
complex information might take longer to
become public than would information that is
easily understood by the average investor.
Mellon's Policy Employees who possess material nonpublic
information about a company--whether that
company is Mellon, another Mellon entity, a
Mellon customer or supplier, or other
company--may not trade in that company's
securities, either for their own accounts or
for any account over which they exercise
investment discretion. In addition, employees
may not recommend trading in those securities
and may not pass the information along to
others, except to employees who need to know
the information in order to perform their job
responsibilities with Mellon. These
prohibitions remain in effect until the
information has become public.
Employees who have investment
responsibilities should take appropriate
steps to avoid receiving material nonpublic
information. Receiving such information could
create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants
and temporary employees who have access to
the types of confidential information
described in this Policy are responsible for
ensuring that consultants and temporary
employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on
material nonpublic information, or specific
information that might be subject to it,
should be referred to the General Counsel.
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Restrictions on the Flow of As a diversified financial services
Information within Mellon organization, Mellon faces unique challenges
(The "Chinese Wall") in complying with the prohibitions on insider
trading and tipping of material non-public
information, and misuse of confidential
information. This is because one Mellon unit
might have material nonpublic information
about a company while other Mellon units may
have a desire, or even a fiduciary duty, to
buy or sell that company's securities or
recommend such purchases or sales to
customers. To engage in such broad-ranging
financial services activities without
violating laws or breaching Mellon's fiduciary
duties, Mellon has established a "Chinese
Wall" policy applicable to all employees. The
"Chinese Wall" separates the Mellon units or
individuals that are likely to receive
material nonpublic information (Potential
Insider Functions) from the Mellon units or
individuals that either trade in securities--
for Mellon's account or for the accounts of
others--or provide investment advice
(Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
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Section Two-Applicable to Investment Employees
QUICK REFERENCE-INVESTMENT EMPLOYEES
Some things you must do
Statement of Accounts and Holdings--Provide to your Preclearance Compliance
Officer a statement of all securities accounts and holdings within 10 days of
becoming an Investment Employee, and again annually on request.
Duplicate Statements & Confirmations--Instruct your broker, trust account
manager or other entity through which you have a securities trading account to
send directly to Compliance:
. Trade confirmations summarizing each transaction
. Periodic statements
Exhibit A can be used to notify your broker. Contact your designated
Preclearance Compliance Officer for the correct address. This applies to all
accounts in which you have a beneficial interest.
Preclearance--Before initiating a securities transaction, written preclearance
must be obtained from the designated Preclearance Compliance Officer. This can
be accomplished by completing a Preclearance Request Form and:
. delivering or faxing the request to the designated Preclearance
Compliance Officer, or
. contacting the designated Preclearance Compliance Officer for other
available notification options.
Preclearance Request Forms can be obtained from the designated Preclearance
Compliance Officer. If preclearance approval is received the trade should be
communicated to the broker on the same day, and executed before the end of the
next business day, at which time the preclearance approval will expire.
Special Approvals
. Acquisition of securities in a Private Placement must be precleared by the
employee's Department/Entity head, the Manager of Corporate Compliance and
the designated Preclearance Compliance Officer.
. Acquisition of securities through an allocation by the underwriter of an
Initial Public Offering (IPO) is prohibited without the approval of the
Manager of Corporate Compliance. Approval can be given only when the
allocation is the result of a direct family relationship.
Some things you must not do
Mellon Securities--The following transactions in Mellon securities are
prohibited for all Mellon Employees:
. Short sales;
. Purchasing and selling or selling and purchasing within 60 days;
. Purchasing or selling during a blackout period
. Margin purchases or options other than employee options.
Non-Mellon Securities--
. Purchasing and selling or selling and purchasing within 60 days is
discouraged, and any profits must be disgorged.
. New investments in financial services organizations are prohibited for
certain employees only (see page 30).
Other restrictions are detailed throughout Section Two.
Read the Policy!
Exemptions
Preclearance is NOT required for:
. Purchases or sales of high quality short-term debt instruments, non-
financial commodities (such as agricultural futures, metals, oil, gas,
etc.), currency futures, financial futures, index futures, index
securities, open-end mutual funds, non-affiliated closed-end investment
companies, commercial paper; CDs; bankers' acceptances; repurchase
agreements; and direct obligations of the government of the United
States.)
. Transactions in any account over which the employee has no direct or
indirect control over the investment decision making process.
. Transactions that are non-volitional on the part of an employee (such as
stock dividends).
. Changes in elections under Mellon's 401(k) Retirement Savings Plan.
. An exercise of an employee stock option administered by Human Resources.
. Automatic reinvestment of dividends under a DRIP or Automatic Investment
Plan. (Optional cash purchases under a DRIP or Direct Purchase Plan do
require preclearance.)
. Sales of securities pursuant to tender offers and sales or exercises of
"Rights" (see page 23).
Questions?
Contact your designated Preclearance Compliance
Officer. If you don't know who that is, call
412-234-1661
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF CONDUCT FOR INVESTMENT EMPLOYEES
Because of their particular
responsibilities, Investment Employees
are subject to preclearance and
personal securities reporting
requirements, as discussed below.
Every Investment Employee must follow
these procedures or risk serious
sanctions, including dismissal. If you
have any questions about these
procedures you should consult the
Manager of Corporate Compliance.
Interpretive issues that arise under
these procedures shall be decided by,
and are subject to the discretion of,
the Manager of Corporate Compliance.
Conflict of Interest No employee may engage in or recommend
any securities transaction that
places, or appears to place, his or
her own interests above those of any
customer to whom financial services
are rendered, including mutual funds
and managed accounts, or above the
interests of Mellon.
Material Nonpublic No employee may divulge the current
Information portfolio positions, or current or
anticipated portfolio transactions,
programs or studies, of Mellon or any
Mellon customer to anyone unless it is
properly within his or her job
responsibilities to do so.
No employee may engage in or recommend
a securities transaction, for his or
her own benefit or for the benefit of
others, including Mellon or its
customers, while in possession of
material nonpublic information
regarding such securities. No employee
may communicate material nonpublic
information to others unless it is
properly within his or her job
responsibilities to do so.
Brokers Trading Accounts--All Investment
Employees are encouraged to conduct
their personal investing through a
Mellon affiliate brokerage account.
This will assist in the monitoring of
account activity on an ongoing basis
in order to ensure compliance with the
Policy.
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Personal Securities Statements & Confirmations--All Investment
Transactions Reports Employees are required to instruct their
broker, trust account manager or other entity
through which they have a securities trading
account to submit directly to the Manager of
Corporate Compliance or designated
Preclearance Compliance Officer copies of all
trade confirmations and statements relating
to each account of which they are a
beneficial owner regardless of what, if any,
securities are maintained in such accounts.
Thus, for example, even if the brokerage
account contains only mutual funds or other
exempt securities as that term is defined by
the Policy and the account has the capability
to have reportable securities traded in it,
the Investment Employee maintaining such an
account must arrange for duplicate account
statements and trade confirmations to be sent
by the broker to the Manager of Corporate
Compliance or designated Preclearance
Compliance Officer. Exhibit A is an example
of an instruction letter to a broker.
Other securities transactions which were not
completed through a brokerage account, such
as gifts, inheritances, spin-offs from
securities held outside brokerage accounts,
or other transfers must be reported to the
designated Preclearance Compliance Officer
within 10 days.
Preclearance for Personal All Investment Employees must notify the
Securities Transactions designated Preclearance Compliance Officer
in writing and receive preclearance before
they engage in any purchase or sale of a
security for their own accounts. Investment
Employees should refer to the provisions
under "Beneficial Ownership" on page 31,
which are applicable to these provisions.
All requests for preclearance for a
securities transaction shall be submitted by
completing a Preclearance Request Form which
can be obtained from the designated
Preclearance Compliance Officer.
The designated Preclearance Compliance
Officer will notify the Investment Employee
whether the request is approved or denied,
without disclosing the reason for such
approval or denial.
Notifications may be given in writing or
verbally by the designated Preclearance
Compliance Officer to the Investment
Employee. A record of such notification will
be maintained by the designated Preclearance
Compliance Officer. However, it shall be the
responsibility of the Investment Employee
to obtain a written record of the designated
Preclearance Compliance Officer's
notification within 48 hours of such
notification. The Investment Employee should
retain a copy of this written record.
As there could be many reasons for
preclearance being granted or denied,
Investment Employees should not infer from
the preclearance response anything regarding
the security for which preclearance was
requested.
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Preclearance for Personal Although making a preclearance request does
Securities Transactions not obligate an Investment Employee to do
(cont.) the transaction, it should be noted that:
. Preclearance requests should not be made
for a transaction that the Investment
Employee does not intend to make.
. The order for a transaction should be
placed with the broker on the same day
that preclearance authorization is
received. The broker must execute the
trade by the close of business on the
next business day, at which time the
preclearance authorization will expire.
. Investment Employees should not discuss
with anyone else, inside or outside
Mellon, the response they received to a
preclearance request. If the
Investment Employee is preclearing as
beneficial owner of another's account,
the response may be disclosed to the
other owner.
. Good Until Canceled/Stop Loss Orders
("Limit Orders") must be precleared, and
security transactions receiving
preclearance authorization must be
executed before the preclearance
expires. At the end of the preclearance
authorization period, any unexecuted
Limit Order must be canceled or a new
preclearance authorization must be
obtained.
Blackout Policy Except as described below, Investment
Employees will not generally be given
clearance to execute a transaction in
any security that is on the restricted
list maintained by their Preclearance
Compliance Officer, or for which there
is a pending buy or sell order for an
affiliated account. This provision does
not apply to transactions effected or
contemplated by index funds.
Exceptions--Regardless of any
restrictions above, Investment Employees
will generally be given clearance to
execute the following transactions:
. Purchase or sale of up to $50,000
of securities of the top 200
issuers on the Russell list of
largest publicly traded companies.
. Purchase or sale of up to the
greater of 100 shares or $10,000 of
securities ranked 201 to 500 on the
Russell list of largest publicly
traded companies.
The Investment Employee is limited to
two such trades in the securities of any
one issuer in any calendar month.
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Exemptions from Requirement Preclearance is not required for the
to Preclear following transactions:
. Purchases or sales of Exempt Securities
(direct obligations of the government of
the United States; high quality short-
term debt instruments; bankers'
acceptances; CDs; commercial paper;
repurchase agreements; and securities
issued by open-end investment
companies);
. Purchases or sales of non-affiliated
closed-end investment companies; non-
financial commodities (such as
agricultural futures, metals, oil, gas,
etc.), currency futures, financial
futures, index futures and index
securities;
. Purchases or sales effected in any
account over which an employee has no
direct or indirect control over the
investment decision making process
(e.g., discretionary trading accounts).
Discretionary trading accounts may only
be maintained, without being subject to
preclearance procedures, when the
Manager of Corporate Compliance, after a
thorough review, is satisfied that the
account is truly discretionary;
. Transactions that are non-volitional on
the part of an employee (such as stock
dividends);
. The sale of Mellon stock received upon
the exercise of an employee stock option
if the sale is part of a "netting of
shares" or "cashless exercise"
administered by the Human Resources
Department (for which the Human
Resources Department will forward
information to the Manager of Corporate
Compliance);
. Changes to elections in the Mellon
401(k) plan;
. Purchases effected upon the exercise of
rights issued by an issuer pro rata to
all holders of a class of securities, to
the extent such rights were acquired
from such issuer;
. Sales of rights acquired from an issuer,
as described above; and/or
. Sales effected pursuant to a bona fide
tender offer.
Gifting of Securities Investment Employees desiring to make a bona
fide gift of securities or who receive a bona
fide gift of securities do not need to
preclear the transaction. However, Investment
Employees must report such bona fide gifts to
the designated Preclearance Compliance
Officer. The report must be made within 10
days of making or receiving the gift and must
disclose the following information: the name
of the person receiving (giving) the gift,
the date of the transaction, and the name of
the broker through which the transaction was
effected. A bona fide gift is one where the
donor does not receive anything of monetary
value in return. An Investment Employee who
purchases a security with the intention of
making a gift must preclear the purchase
transaction.
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DRIPS, DPPs and AIPs Certain companies with publicly traded
securities establish:
. Dividend Reinvestment Plans (DRIPs)--
These permit shareholders to have their
dividend payments channeled to the
purchase of additional shares of such
company's stock. An additional benefit
offered to DRIP participants is the
right to buy additional shares by
sending in a check before the dividend
reinvestment date ("optional cash
purchases").
. Direct Purchase Plans (DPPs)--These
allow purchasers to buy stock by sending
a check directly to the issuer, without
using a broker.
. Automatic Investment Plans (AIPs)--These
allow purchasers to set up a plan
whereby a fixed amount of money is
automatically deducted from their
checking account each month and used to
purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP
is voluntary.
Investment Employees who enroll in a DRIP or
AIP are not required to preclear enrollment,
the periodic reinvestment of dividend
payments into additional shares of company
stock through a DRIP, or the periodic
investments through an AIP.
Investment Employees must preclear all
optional cash purchases through a DRIP and
all purchases through a DPP. Investment
Employees must also preclear all sales
through a DRIP, DPP or AIP.
Statement of Securities Within ten days of receiving this Policy
Accounts and Holdings and on an annual basis thereafter, all
Investment Employees must submit to the
designated Preclearance Compliance Officer:
. a listing of all securities trading
accounts in which the employee has a
beneficial interest.
. a statement of all securities in which
they presently have any direct or
indirect beneficial ownership other than
Exempt Securities, as defined in the
Glossary.
The annual report must be completed upon the
request of Corporate Compliance, and the
information submitted must be current within
30 days of the date the report is submitted.
The annual statement of securities holdings
contains an acknowledgment that the
Investment Employee has read and complied
with this Policy.
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Restricted List Each Preclearance Compliance Officer will
maintain a list (the "Restricted List") of
companies whose securities are deemed
appropriate for implementation of trading
restrictions for Investment Employees in
their area. From time to time, such trading
restrictions may be appropriate to protect
Mellon and its Investment Employees from
potential violations, or the appearance of
violations, of securities laws. The inclusion
of a company on the Restricted List provides
no indication of the advisability of an
investment in the company's securities or the
existence of material nonpublic information
on the company. Nevertheless, the contents of
the Restricted List will be treated as
confidential information in order to avoid
unwarranted inferences.
The Preclearance Compliance Officer will
retain copies of the restricted lists for
five years.
Confidential Treatment The Manager of Corporate Compliance and/or
Preclearance Compliance Officer will use his
or her best efforts to assure that all
requests for preclearance, all personal
securities transaction reports and all
reports of securities holdings are treated as
"Personal and Confidential." However, such
documents will be available for inspection by
appropriate regulatory agencies, and by other
parties within and outside Mellon as are
necessary to evaluate compliance with or
sanctions under this Policy. Documents
received from Investment Employees are also
available for inspection by the boards of
directors of 40-Act entities and by the
boards of directors (or trustees or managing
general partners, as applicable) of the
investment companies managed or administered
by 40-Act entities.
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RESTRICTIONS ON TRANSACTIONS IN MELLON SECURITIES
Investment Employees who engage in transactions
involving Mellon securities should be aware of
their unique responsibilities with respect to such
transactions arising from the employment
relationship and should be sensitive to even the
appearance of impropriety.
The following restrictions apply to all
transactions in Mellon's publicly traded
securities occurring in the employee's own account
and in all other accounts over which the employee
could be presumed to exercise influence or control
(see provisions under "Beneficial Ownership" on
page 31 for a more complete discussion of the
accounts to which these restrictions apply). These
restrictions are to be followed in addition to any
restrictions that apply to particular officers or
directors (such as restrictions under Section 16
of the Securities Exchange Act of 1934).
. Short Sales-Short sales of Mellon securities
by employees are prohibited.
. Short Term Trading-Investment Employees are
prohibited from purchasing and selling, or
from selling and purchasing Mellon securities
within any 60 calendar day period. In
addition to any other sanction, any profits
realized on such short term trades must be
disgorged in accordance with procedures
established by senior management.
. Margin Transactions-Purchases on margin of
Mellon's publicly traded securities by
employees is prohibited. Margining Mellon
securities in connection with a cashless
exercise of an employee stock option through
the Human Resources Department is exempt from
this restriction. Further, Mellon securities
may be used to collateralize loans or the
acquisition of securities other than those
issued by Mellon.
. Option Transactions-Option transactions
involving Mellon's publicly traded securities
are prohibited. Transactions under Mellon's
Long-Term Incentive Plan or other employee
option plans are exempt from this
restriction.
. Major Mellon Events-Employees who have
knowledge of major Mellon events that have
not yet been announced are prohibited from
buying or selling Mellon's publicly traded
securities before such public announcements,
even if the employee believes the event does
not constitute material nonpublic
information.
. Mellon Blackout Period-Employees are
prohibited from buying or selling Mellon's
publicly traded securities during a blackout
period. The blackout period begins the 16th
day of the last month of each calendar
quarter and ends 3 business days after Mellon
Financial Corporation publicly announces the
financial results for that quarter. Thus, the
blackout periods begin on March 16, June 16,
September 16 and December 16. The end of the
blackout period is determined by counting
business days only, and the day of the
earnings announcement is day 1. The blackout
period ends at the end of day 3, and
employees can trade Mellon securities on day
4.
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Mellon 401(k) Plan For purposes of the blackout period and the short
term trading rule, employees' changing their
existing account balance allocation to increase or
decrease the amount allocated to Mellon Common
Stock will be treated as a purchase or sale of
Mellon Stock, respectively. This means:
. Employees are prohibited from increasing or
decreasing their existing account balance
allocation to Mellon Common Stock during the
blackout period.
. Employees are prohibited from increasing
their existing account balance allocation to
Mellon Common Stock and then decreasing it
within 60 days. Similarly, employees are
prohibited from decreasing their existing
account balance allocation to Mellon Common
Stock and then increasing it within 60 days.
However:
. with respect to Investment Employees,
any profits realized on short term
changes in the 401(k) will not have to
be disgorged.
. changes to existing account balance
allocations in the 401(k) plan will not
be compared to transactions in Mellon
securities outside the 401(k) for
purposes of the 60-day rule. (Note: This
does not apply to members of the
Executive Management Group, who should
consult with the Legal Department.)
Except for the above there are no other
restrictions applicable to the 401(k) plan. This
means, for example:
. Employees are not required to preclear any
elections or changes made in their 401(k)
account.
. There is no restriction on employees'
changing their salary deferral contribution
percentages with regard to either the
blackout period or the 60-day rule.
. The regular salary deferral contribution to
Mellon Common Stock in the 401(k) that takes
place with each pay will not be considered a
purchase for the purposes of either the
blackout or the 60-day rule.
Mellon Employee Receipt-Your receipt of an employee stock option
Stock Options from Mellon is not deemed to be a purchase of a
security. Therefore, it is exempt from
preclearance and reporting requirements, can take
place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
Exercises-The exercise of an employee stock option
that results in your holding the shares is exempt
from preclearance and reporting requirements, can
take place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
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Mellon Employee "Cashless" Exercises-The exercise of an employee
Stock Options stock option which is part of a "cashless
(cont.) exercise" or "netting of shares" that is
Shareholder Services is exempt from the
preclearance and reporting requirements and will
not constitute a purchase or a sale for purposes
of the 60-day prohibition. A "cashless exercise"
or "netting of shares" transaction is permitted
during the blackout period for ShareSuccess plan
options only. They are not permitted during the
blackout period for any other plan options.
Sales-The sale of the Mellon securities that were
received in the exercise of an employee stock
option is treated like any other sale under the
Policy (regardless of how little time has elapsed
between the option exercise and the sale). Thus,
such sales are subject to the preclearance and
reporting requirements, are prohibited during the
blackout period and constitute sales for purposes
of the 60-day prohibition.
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES
Purchases or sales by an employee of the
securities of issuers with which Mellon does
business, or other third party issuers, could
result in liability on the part of such employee.
Employees should be sensitive to even the
appearance of impropriety in connection with their
personal securities transactions. Employees should
refer to "Beneficial Ownership" below, which is
applicable to the following restrictions.
The Mellon Code of Conduct contains certain
restrictions on investments in parties that do
business with Mellon. Employees should refer to
the Code of Conduct and comply with such
restrictions in addition to the restrictions and
reporting requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
. Customer Transactions-Trading for customers
and Mellon accounts should always take
precedence over employees' transactions for
their own or related accounts.
. Excessive Trading, Naked Options-Mellon
discourages all employees from engaging in
short-term or speculative trading, in trading
naked options, in trading that could be
deemed excessive or in trading that could
interfere with an employee's job
responsibilities.
. Front Running-Employees may not engage in
"front running," that is, the purchase or
sale of securities for their own accounts on
the basis of their knowledge of Mellon's
trading positions or plans.
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. Initial Public Offerings-Investment Employees
are prohibited from acquiring securities
through an allocation by the under-writer of
an Initial Public Offering (IPO) without the
approval of the Manager of Corporate
Compliance. Approval can be given only when
the allocation comes through an employee of
the issuer who is a direct family relation of
the Investment Employee. Due to NASD rules,
this approval may not be available to
employees of registered broker/dealers.
. Material Nonpublic Information-Employees
possessing material nonpublic information
regarding any issuer of securities must
refrain from purchasing or selling securities
of that issuer until the information becomes
public or is no longer considered material.
. Private Placements-Investment Employees are
prohibited from acquiring any security in a
private placement unless they obtain the
prior written approval of the Manager of
Corporate Compliance, the designated
Preclearance Compliance Officer and the
Investment Employee's department head.
Approval must be given by all three persons
for the acquisition to be considered
approved. After receipt of the necessary
approvals and the acquisition, Investment
Employees are required to disclose that
investment if they participate in any
subsequent consideration of credit for the
issuer, or of an investment in the issuer for
an advised account. Final decision to acquire
such securities for an advised account will
be subject to independent review.
. Scalping-Employees may not engage in
"scalping," that is, the purchase or sale of
securities for their own or Mellon's accounts
on the basis of knowledge of customers'
trading positions or plans.
. Short Term Trading-All Employees are
discouraged from purchasing and selling, or
from selling and purchasing, the same (or
equivalent) securities within any 60 calendar
day period. With respect to Investment
Employees, any profits realized on such short
term trades must be disgorged in accordance
with procedures established by senior
management. Exception: securities may be sold
pursuant to a bona fide tender offer without
disgorgement under the 60-day rule.
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Personal Securities Trading Practices
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Prohibition on Investments in You are prohibited from acquiring any
Securities of Financial Services security issued by a financial services
Organization organization if you are:
. a member of the Mellon Senior Management
Committee.
. employed in any of the following
departments:
. Corporate Strategy & Development
. Legal (Pittsburgh only)
. Finance (Pittsburgh only)
. an employee specifically designated by
the Manager of Corporate Compliance and
informed that this prohibition is
applicable to you.
Financial Services Organizations-The term
"security issued by a financial services
organization" includes any security issued
by:
. Commercial Banks other than Mellon
. Bank Holding Companies other than
Mellon
. Insurance Companies
. Investment Advisory Companies
. Shareholder Servicing Companies
. Thrifts
. Savings and Loan Associations
. Broker/Dealers
. Transfer Agents
. Other Depository Institutions
The term "securities issued by a financial
services organization" does not include
securities issued by mutual funds, variable
annuities or insurance policies. Further, for
purposes of determining whether a company is
a financial services organization,
subsidiaries and parent companies are treated
as separate issuers.
Effective Date-Securities of financial
services organizations properly acquired
before the employee's becoming subject to
this prohibition may be maintained or
disposed of at the owner's discretion
consistent with this policy.
Additional securities of a financial services
organization acquired through the
reinvestment of the dividends paid by such
financial services organization through a
dividend reinvestment program (DRIP), or
through an automatic investment plan (AIP)
are not subject to this prohibition, provided
the employee's election to participate in the
DRIP or AIP predates the date of the
employee's becoming subject to this
prohibition. Optional cash purchases through
a DRIP or direct purchase plan (DPP) are
subject to this prohibition.
Securities acquired in any account over which
an employee has no direct or indirect control
over the investment decision making process
(e.g. discretionary trading accounts) are not
subject to this prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of
financial services organizations must be
disclosed in writing to the Manager of
Corporate Compliance.
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Beneficial Ownership The provisions of the Policy apply to
transactions in the employee's own name and
to all other accounts over which the employee
could be presumed to exercise influence or
control, including:
. accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
. accounts of any other member of the
employee's household (e.g., a relative
living in the same home);
. trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or
influence;
. corporate accounts controlled, directly
or indirectly, by the employee;
. arrangements similar to trust accounts
that are established for bona fide
financial purposes and benefit the
employee; and
. any other account for which the employee
is the beneficial owner (see Glossary
for a more complete legal definition of
"beneficial owner").
Non-Mellon Employee The provisions discussed above do not apply
Benefit Plans to transactions done under a bona fide
employee benefits plan administered by an
organization not affiliated with Mellon and
by an employee of that organization who
shares beneficial interest with a Mellon
employee, and in the securities of the
employing organization. This means if a
Mellon employee's spouse is employed at a
non-Mellon company, the Mellon employee is
not required to obtain approval for
transactions in the employer's securities
done by the spouse as part of the spouse's
employee benefit plan.
The Securities Trading Policy does not apply
in such a situation. Rather, the other
organization is relied upon to provide
adequate supervision with respect to
conflicts of interest and compliance with
securities laws.
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PROTECTING CONFIDENTIAL INFORMATION
As an employee you may receive information
about Mellon, its customers and other parties
that, for various reasons, should be treated
as confidential. All employees are expected
to strictly comply with measures necessary to
preserve the confidentiality of information.
Employees should refer to the Mellon Code of
Conduct.
Insider Trading and Tipping Federal securities laws generally prohibit
Legal Prohibitions the trading of securities while in possession
of "material nonpublic" information regarding
the issuer of those securities (insider
trading). Any person who passes along
material nonpublic information upon which a
trade is based (tipping) may also be liable.
Information is "material" if there is a
substantial likelihood that a reasonable
investor would consider it important in
deciding whether to buy, sell or hold
securities. Obviously, information that would
affect the market price of a security would
be material. Examples of information that
might be material include:
. a proposal or agreement for a merger,
acquisition or divestiture, or for the
sale or purchase of substantial assets;
. tender offers, which are often material
for the party making the tender offer as
well as for the issuer of the securities
for which the tender offer is made;
. dividend declarations or changes;
. extraordinary borrowings or liquidity
problems;
. defaults under agreements or actions by
creditors, customers or suppliers
relating to a company's credit standing;
. earnings and other financial
information, such as large or unusual
write-offs, write-downs, profits or
losses;
. pending discoveries or developments,
such as new products, sources of
materials, patents, processes,
inventions or discoveries of mineral
deposits;
. a proposal or agreement concerning a
financial restructuring;
. a proposal to issue or redeem
securities, or a development with
respect to a pending issuance or
redemption of securities;
. a significant expansion or contraction
of operations;
. information about major contracts or
increases or decreases in orders;
. the institution of, or a development in,
litigation or a regulatory proceeding;
. developments regarding a company's
senior management;
. information about a company received
from a director of that company; and
. information regarding a company's
possible noncompliance with
environmental protection laws.
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Insider Trading and Tipping This list is not exhaustive. All relevant
Legal Prohibitions circumstances must be considered when
(cont.) determining whether an item of information is
material.
"Nonpublic" - Information about a company is
nonpublic if it is not generally available to
the investing public. Information received
under circumstances indicating that it is not
yet in general circulation and which may be
attributable, directly or indirectly, to the
company or its insiders is likely to be
deemed nonpublic information.
If you obtain material non-public information
you may not trade related securities until
you can refer to some public source to show
that the information is generally available
(that is, available from sources other than
inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in
widely accessible sources--such as in
newspapers or on the internet--becomes public
very soon after publication, information
appearing in less accessible sources--such as
regulatory filings, may take up to several
days to be deemed public. Similarly, highly
complex information might take longer to
become public than would information that is
easily understood by the average investor.
Mellon's Policy Employees who possess material nonpublic
information about a company--whether that
company is Mellon, another Mellon entity, a
Mellon customer or supplier, or other
company--may not trade in that company's
securities, either for their own accounts or
for any account over which they exercise
investment discretion. In addition, employees
may not recommend trading in those securities
and may not pass the information along to
others, except to employees who need to know
the information in order to perform their job
responsibilities with Mellon. These
prohibitions remain in effect until the
information has become public.
Employees who have investment
responsibilities should take appropriate
steps to avoid receiving material nonpublic
information. Receiving such information could
create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants
and temporary employees who have access to
the types of confidential information
described in this Policy are responsible for
ensuring that consultants and temporary
employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on
material nonpublic information, or specific
information that might be subject to it,
should be referred to the General Counsel.
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Restrictions on the Flow of As a diversified financial services
Information within Mellon organization, Mellon faces unique challenges
(The "Chinese Wall") in complying with the prohibitions on insider
trading and tipping of material non-public
information, and misuse of confidential
information. This is because one Mellon unit
might have material nonpublic information
about a company while other Mellon units may
have a desire, or even a fiduciary duty, to
buy or sell that company's securities or
recommend such purchases or sales to
customers. To engage in such broad-ranging
financial services activities without
violating laws or breaching Mellon's
fiduciary duties, Mellon has established a
"Chinese Wall" policy applicable to all
employees. The "Chinese Wall" separates the
Mellon units or individuals that are likely
to receive material nonpublic information
(Potential Insider Functions) from the Mellon
units or individuals that either trade in
securities--for Mellon's account or for the
accounts of others--or provide investment
advice (Investment Functions). Employees
should refer to CPP 903-2(C) The Chinese
Wall.
SPECIAL PROCEDURES FOR ACCESS DECISION MAKERS
Certain Portfolio Managers and Research
Analysts in the fiduciary businesses have
been designated as Access Decision Makers and
are subject to additional procedures which
are discussed in a separate edition of the
Securities Trading Policy. If you have reason
to believe that you may be an Access Decision
Maker, contact your supervisor, designated
Preclearance Compliance Officer or the
Manager of Corporate Compliance.
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Section Three-Applicable to Other Employees
QUICK REFERENCE-OTHER EMPLOYEES
Some things you must do
. If you buy or sell Mellon Financial Corporation securities you must provide
a report of the trade and a copy of the broker confirmation within 10 days
of transaction to the Manager of Corporate Compliance, AIM 151-4340. This
does not apply to the exercise of employee stock options, or changes in
elections under Mellon's 401(k) Retirement Savings Plan.
. If you want to purchase any security in a Private Placement you must first
obtain the approval of your Department/Entity head and the Manager of
Corporate Compliance. Contact the Manager of Corporate Compliance at 412-
234-0810.
. Acquisition of securities through an allocation by the underwriter of an
Initial Public Offering (IPO) is prohibited without the approval of the
Manager of Corporate Compliance. Approval can be given only when the
allocation is the result of a direct family relationship.
. For Employees who are subject to the prohibition on new investments in
financial services organizations (certain employees only-see page 41),
broker must send directly to Manager of Corporate Compliance, Mellon
Financial Corporation, PO Box 3130, Pittsburgh, PA 15230-3130:
. Broker trade confirmations summarizing each transaction
. Periodic statements
Exhibit A can be used to notify your broker of all accounts for which your
broker will be responsible for sending duplicate confirmations and
statements.
Some things you must not do
Mellon Securities--The following transactions in Mellon
securities are prohibited for all Mellon Employees:
. Short sales
. Purchasing and selling or selling and purchasing within 60 days
. Purchasing or selling during a blackout period
. Margin purchases or options other than employee options.
Non-Mellon Securities--
. New investments in financial services organizations (certain employees
only-see page 41).
Other restrictions are detailed throughout Section Three. Read the Policy!
Questions?
412-234-1661
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF CONDUCT FOR OTHER EMPLOYEES
Every Other Employee must follow these
procedures or risk serious sanctions,
including dismissal. If you have any
questions about these procedures you should
consult the Manager of Corporate Compliance.
Interpretive issues that arise under these
procedures shall be decided by, and are
subject to the discretion of, the Manager of
Corporate Compliance.
Conflict of Interest No employee may engage in or recommend any
securities transaction that places, or
appears to place, his or her own interests
above those of any customer to whom financial
services are rendered, including mutual funds
and managed accounts, or above the interests
of Mellon.
Material Nonpublic No employee may engage in or recommend a
Information securities transaction, for his or her own
benefit or for the benefit of others,
including Mellon or its customers, while in
possession of material nonpublic information
regarding such securities. No employee may
communicate material nonpublic information to
others unless it is properly within his or
her job responsibilities to do so.
Brokers Trading Accounts-All employees are encouraged
to conduct their personal investing through a
Mellon affiliate brokerage account.
Personal Securities Transactions Other Employees must report in writing to the
Reports Manager of Corporate Compliance within ten
calendar days whenever they purchase or sell
Mellon securities. Purchases and sales
include optional cash purchases under
Mellon's Dividend Reinvestment and Common
Stock Purchase Plan (the "Mellon DRIP").
It should be noted that the reinvestment of
dividends under the DRIP, changes in
elections under Mellon's 401(k) Retirement
Savings Plan, the receipt of stock under
Mellon's Restricted Stock Award Plan, and the
receipt or exercise of options under Mellon's
employee stock option plans are not
considered purchases or sales for the purpose
of this reporting requirement.
Brokerage Account Statements Certain Other Employees are subject to the
restriction on investments in financial
services organizations and are required to
instruct their brokers to send statements
directly to Corporate Compliance. See page
41.
An example of an instruction letter to a
broker is contained in Exhibit A.
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Confidential Treatment The Manager of Corporate Compliance will use
his or her best efforts to assure that all
personal securities transaction reports and
all reports of securities holdings are
treated as "Personal and Confidential."
However, such documents will be available for
inspection by appropriate regulatory agencies
and by other parties within and outside
Mellon as are necessary to evaluate
compliance with or sanctions under this
Policy.
RESTRICTIONS ON TRANSACTIONS IN MELLON SECURITIES
Employees who engage in transactions
involving Mellon securities should be aware
of their unique responsibilities with respect
to such transactions arising from the
employment relationship and should be
sensitive to even the appearance of
impropriety.
The following restrictions apply to all
transactions in Mellon's publicly traded
securities occurring in the employee's own
account and in all other accounts over which
the employee could be expected to exercise
influence or control (see provisions under
"Beneficial Ownership" on page 42 for a more
complete discussion of the accounts to which
these restrictions apply). These restrictions
are to be followed in addition to any
restrictions that apply to particular
officers or directors (such as restrictions
under Section 16 of the Securities Exchange
Act of 1934).
. Short Sales-Short sales of Mellon
securities by employees are prohibited.
. Short Term Trading-Employees are
prohibited from purchasing and selling,
or from selling and purchasing Mellon
securities within any 60 calendar day
period.
. Margin Transactions-Purchases on margin
of Mellon's publicly traded securities
by employees is prohibited. Margining
Mellon securities in connection with a
cashless exercise of an employee stock
option through the Human Resources
Department is exempt from this
restriction. Further, Mellon securities
may be used to collateralize loans or
the acquisition of securities other than
those issued by Mellon.
. Option Transactions-Option transactions
involving Mellon's publicly traded
securities are prohibited. Transactions
under Mellon's Long-Term Incentive Plan
or other employee option plans are
exempt from this restriction.
. Major Mellon Events-Employees who have
knowledge of major Mellon events that
have not yet been announced are
prohibited from buying or selling
Mellon's publicly traded securities
before such public announcements, even
if the employee believes the event does
not constitute material nonpublic
information.
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. Mellon Blackout Period-Employees are prohibited from
buying or selling Mellon's publicly traded securities
during a blackout period. The blackout period begins
the 16th day of the last month of each calendar quarter
and ends 3 business days after Mellon Financial
Corporation publicly announces the financial results
for that quarter. Thus, the blackout periods begin on
March 16, June 16, September 16 and December 16. The
end of the blackout period is determined by counting
business days only, and the day of the earnings
announcement is day 1. The blackout period ends at the
end of day 3, and employees can trade Mellon securities
on day 4.
Mellon 401(k) Plan For purposes of the blackout period and the short term
trading rule, employees' changing their existing account
balance allocation to increase or decrease the amount
allocated to Mellon Common Stock will be treated as a
purchase or sale of Mellon Stock, respectively. This means:
. Employees are prohibited from increasing or decreasing
their existing account balance allocation to Mellon
Common Stock during the blackout period.
. Employees are prohibited from increasing their existing
account balance allocation to Mellon Common Stock and
then decreasing it within 60 days. Similarly, employees
are prohibited from decreasing their existing account
balance allocation to Mellon Common Stock and then
increasing it within 60 days. However, changes to
existing account balance allocations in the 401(k) plan
will not be compared to transactions in Mellon
securities outside the 401(k) for purposes of the
60-day rule. (Note: This does not apply to members of
the Executive Management Group, who should consult with
the Legal Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for example:
. Employees are not required to preclear any elections or
changes made in their 401(k) account.
. There is no restriction on employees' changing their
salary deferral contribution percentages with regard to
either the blackout period or the 60-day rule.
. The regular salary deferral contribution to Mellon
Common Stock in the 401(k) that takes place with each
pay will not be considered a purchase for the purposes
of either the blackout or the 60-day rule.
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Mellon Employee Receipt-Your receipt of an employee stock option from
Stock Options Mellon is not deemed to be a purchase of a security.
Therefore, it is exempt from reporting requirements, can
take place during the blackout period and does not
constitute a purchase for purposes of the 60-day
prohibition.
Exercises-The exercise of an employee stock option that
results in your holding the shares is exempt from reporting
requirements, can take place during the blackout period and
does not constitute a purchase for purposes of the 60-day
prohibition.
"Cashless" Exercises-The exercise of an employee stock
option which is part of a "cashless exercise" or "netting of
shares" that is administered by the Human Resources
Department or Chase Mellon Shareholder Services is exempt
from the preclearance and reporting requirements and will
not constitute a purchase or a sale for purposes of the
60-day prohibition. A "cashless exercise" or "netting of
shares" transaction is permitted during the blackout period
for ShareSuccess plan options only. They are not permitted
during the blackout period for any other plan options.
Sales-The sale of the Mellon securities that were received
in the exercise of an employee stock option is treated like
any other sale under the Policy (regardless of how little
time has elapsed between the option exercise and the sale).
Thus, such sales are subject to the reporting requirements,
are prohibited during the blackout period and constitute
sales for purposes of the 60-day prohibition.
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES
Purchases or sales by an employee of the securities of
issuers with which Mellon does business, or other third
party issuers, could result in liability on the part of such
employee. Employees should be sensi- tive to even the
appearance of impropriety in connection with their personal
securities transactions. Employees should refer to
"Beneficial Ownership" on page 42, which is applicable to
the following restrictions.The Mellon Code of Conduct
contains certain restrictions on investments in parties that
do business with Mellon. Employees should refer to the Code
of Conduct and comply with such restric- tions in addition
to the restrictions and reporting requirements set forth
below.
The following restrictions apply to all securities
transactions by employees:
. Credit, Consulting or Advisory Relationship-Employees
may not buy or sell securities of a company if they are
considering granting, renewing, modifying or denying
any credit facility to that company, acting as a
benefits consultant to that company, or acting as an
adviser to that company with respect to the company's
own securities. In addition, lending employees who have
assigned responsibilities in a specific industry group
are not permitted to trade securities in that industry.
This prohibition
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does not apply to transactions in open end mutual
funds.
. Customer Transactions-Trading for customers and Mellon
accounts should always take precedence over employees'
transactions for their own or related accounts.
. Excessive Trading, Naked Options-Mellon discourages all
employees from engaging in short-term or speculative
trading, in trading naked options, in trading that
could be deemed excessive or in trading that could
interfere with an employee's job responsibilities.
. Front Running-Employees may not engage in "front
running," that is, the purchase or sale of securities
for their own accounts on the basis of their knowledge
of Mellon's trading positions or plans.
. Initial Public Offerings-Other Employees are prohibited
from acquiring securities through an allocation by the
underwriter of an Initial Public Offering (IPO) without
the approval of the Manager of Corporate Compliance.
Approval can be given only when the allocation comes
through an employee of the issuer who is a direct
family relation of the Other Employee. Due to NASD
rules, this approval may not be available to employees
of registered broker/dealers.
. Material Nonpublic Information-Employees possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling
securities of that issuer until the information becomes
public or is no longer considered material.
. Private Placements-Other Employees are prohibited from
acquiring any security in a private placement unless
they obtain the prior written approval of the Manager
of Corporate Compliance and the employee's department
head. Approval must be given by both persons for the
acquisition to be considered approved. After receipt of
the necessary approvals and the acquisition, employees
are required to disclose that investment if they
participate in any subsequent consideration of credit
for the issuer, or of an investment in the issuer for
an advised account. Final decision to acquire such
securities for an advised account will be subject to
independent review.
. Scalping-Employees may not engage in "scalping," that
is, the purchase or sale of securities for their own or
Mellon's accounts on the basis of knowledge of
customers' trading positions or plans.
. Short Term Trading-Employees are discouraged from
purchasing and selling, or from selling and purchasing,
the same (or equivalent) securities within any 60
calendar day period.
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Prohibition on Investments in You are prohibited from acquiring any
Securities of Financial Services security issued by a financial services
Organizations organization if you are:
. a member of the Mellon Senior Management
Committee.
. employed in any of the following
departments:
. Corporate Strategy & Development
. Legal (Pittsburgh only)
. Finance (Pittsburgh only)
. an employee specifically designated by
the Manager of Corporate Compliance and
informed that this prohibition is
applicable to you.
Brokerage Accounts-All employees subject to
this restriction on investments in financial
services organizations are required to
instruct their brokers to submit directly to
the Manager of Corporate Compliance copies
of all trade confirmations and statements
relating to each account of which they are a
beneficial owner regardless of what, if any,
securities are maintained in such accounts.
Thus, for example, even if the brokerage
account has no reportable securities traded
in it, the employee maintaining such an
account must arrange for duplicate account
statements and trade confirmations to be
sent by the broker to the Manager of
Corporate Compliance. An example of an
instruction letter to a broker is contained
in Exhibit A.
Financial Services Organizations-The term
"security issued by a financial services
organization" includes any security issued
by:
. Commercial Banks other than Mellon
. Bank Holding Companies other than Mellon
. Insurance Companies
. Investment Advisory Companies
. Shareholder Servicing Companies
. Thrifts
. Savings and Loan Associations
. Broker/Dealers
. Transfer Agents
. Other Depository Institutions
The term "securities issued by a financial
services organization" does not include
securities issued by mutual funds, variable
annuities or insurance policies. Further,
for purposes of determining whether a
company is a financial services
organization, subsidiaries and parent
companies are treated as separate issuers.
Effective Date-Securities of financial
services organizations properly acquired
before the employee's becoming subject to
this prohibition may be maintained or
disposed of at the owner's discretion
consistent with this policy.
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Prohibition on Investments in Additional securities of a financial
Securities of Financial Services services organization acquired through the
Organizations reinvestment of the dividends paid by such
(cont.) financial services organization through a
dividend reinvestment program (DRIP), or
through an automatic investment plan (AIP)
are not subject to this prohibition,
provided the employee's election to
participate in the DRIP or AIP predates the
date of the employee's becoming subject to
this prohibition. Optional cash purchases
through a DRIP or direct purchase plan (DPP)
are subject to this prohibition.
Securities acquired in any account over
which an employee has no direct or indirect
control over the investment decision making
process (e.g. discretionary trading
accounts) are not subject to this
prohibition.
Within 30 days of becoming subject to this
prohibition, all holdings of securities of
financial services organizations must be
disclosed in writing to the Manager of
Corporate Compliance.
Beneficial Ownership The provisions of the Policy apply to
transactions in the employee's own name and
to all other accounts over which the
employee could be presumed to exercise
influence or control, including:
. accounts of a spouse, minor children or
relatives to whom substantial support is
contributed;
. accounts of any other member of the
employee's household (e.g. a relative
living in the same home);
. trust or other accounts for which the
employee acts as trustee or otherwise
exercises any type of guidance or
influence;
. corporate accounts controlled, directly or
indirectly, by the employee;
. arrangements similar to trust accounts
that are established for bona fide
financial purposes and benefit the
employee; and
. any other account for which the employee
is the beneficial owner (see Glossary for
a more complete legal definition of
"beneficial owner").
Non-Mellon Employee The provisions discussed above do not apply
Benefit Plans to transactions done Benefit Plans under a
bona fide employee benefits plan
administered by an organization not
affiliated with Mellon and by an employee of
that organization who shares beneficial
interest with a Mellon employee, and in the
securities of the employing organization.
This means if a Mellon employee's spouse is
employed at a non-Mellon company, the Mellon
employee is not required to obtain approval
for transactions in the employer's
securities done by the spouse as part of the
spouse's employee benefit plan.
The Securities Trading Policy does not apply
in such a situation. Rather, the other
organization is relied upon to provide
adequate supervision with respect to
conflicts of interest and compliance with
securities laws.
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PROTECTING CONFIDENTIAL INFORMATION
As an employee you may receive information
about Mellon, its cus-tomers and other
parties that, for various reasons, should
be treated as confidential. All employees
are expected to strictly comply with
measures necessary to preserve the
confidentiality of information. Employees
should refer to the Mellon Code of
Conduct.
Insider Trading and Tipping Federal securities laws generally prohibit
Legal Prohibitions the trading of securities while in
possession of "material nonpublic"
information regarding the issuer of those
securities (insider trading). Any person
who passes along material nonpublic
information upon which a trade is based
(tipping) may also be liable.
Information is "material" if there is a
substantial likelihood that a reasonable
investor would consider it important in
deciding whether to buy, sell or hold
securities. Obviously, information that
would affect the market price of a
security would be material. Examples of
information that might be material
include:
. a proposal or agreement for a merger,
acquisition or divestiture, or for the
sale or purchase of substantial assets;
. tender offers, which are often material
for the party making the tender offer
as well as for the issuer of the
securities for which the tender offer
is made;
. dividend declarations or changes;
. extraordinary borrowings or liquidity
problems;
. defaults under agreements or actions by
creditors, customers or suppliers
relating to a company's credit
standing;
. earnings and other financial
information, such as large or unusual
write-offs, write-downs, profits or
losses;
. pending discoveries or developments,
such as new products, sources of
materials, patents, processes,
inventions or discoveries of mineral
deposits;
. a proposal or agreement concerning a
financial restructuring;
. a proposal to issue or redeem
securities, or a development with
respect to a pending issuance or
redemption of securities;
. a significant expansion or contraction
of operations;
. information about major contracts or
increases or decreases in orders;
. the institution of, or a development
in, litigation or a regulatory
proceeding;
. developments regarding a company's
senior management; information about a
company received from a director of
that company; and
. information regarding a company's
possible noncompliance with
environmental protection laws.
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<PAGE>
Personal Securities Trading Practices
====================------------------------------------------------------------
Insider Trading and Tipping This list is not exhaustive. All relevant
Legal Prohibitions circumstances must be considered when
(cont.) determining whether an item of information
is material.
"Nonpublic"- Information about a company is
nonpublic if it is not generally available to
the investing public. Information received
under circumstances indicating that it is not
yet in general circulation and which may be
attributable, directly or indirectly, to the
company or its insiders is likely to be
deemed nonpublic information.
If you obtain material non-public information
you may not trade related securities until
you can refer to some public source to show
that the information is generally available
(that is, available from sources other than
inside sources) and that enough time has
passed to allow wide dissemination of the
information. While information appearing in
widely accessible sources--such as in
newspapers or on the internet--becomes public
very soon after publication, information
appearing in less accessible sources--such as
regulatory filings, may take up to several
days to be deemed public. Similarly, highly
complex information might take longer to
become public than would information that is
easily understood by the average investor.
Mellon's Policy Employees who possess material nonpublic
information about a company--whether that
company is Mellon, another Mellon entity, a
Mellon customer or supplier, or other
company--may not trade in that company's
securities, either for their own accounts or
for any account over which they exercise
investment discretion. In addition, employees
may not recommend trading in those securities
and may not pass the information along to
others, except to employees who need to know
the information in order to perform their job
responsibilities with Mellon. These
prohibitions remain in effect until the
information has become public.
Employees who have investment
responsibilities should take appropriate
steps to avoid receiving material nonpublic
information. Receiving such information could
create severe limitations on their ability to
carry out their responsibilities to Mellon's
fiduciary customers.
Employees managing the work of consultants
and temporary employees who have access to
the types of confidential information
described in this Policy are responsible for
ensuring that consultants and temporary
employees are aware of Mellon's policy and
the consequences of noncompliance.
Questions regarding Mellon's policy on
material nonpublic information, or specific
information that might be subject to it,
should be referred to the General Counsel.
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<PAGE>
Personal Securities Trading Practices
====================------------------------------------------------------------
Restrictions on the Flow of As a diversified financial services
Information within Mellon organization, Mellon faces unique
(The "Chinese Wall") challenges in complying with the
prohibitions on insider trading and tipping
of material non-public information, and
misuse of confidential information. This is
because one Mellon unit might have material
nonpublic information about a company while
other Mellon units may have a desire, or
even a fiduciary duty, to buy or sell that
com- pany's securities or recommend such
purchases or sales to customers. To engage
in such broad-ranging financial services
activities without violating laws or
breaching Mellon's fiduciary duties, Mellon
has established a "Chinese Wall" policy
applicable to all employees. The "Chinese
Wall" separates the Mellon units or
individuals that are likely to receive
material nonpublic information (Potential
Insider Functions) from the Mellon units or
individuals that either trade in
securities--for Mellon's account or for the
accounts of others--or provide investment
advice (Investment Functions). Employees
should refer to CPP 903-2(C) The Chinese
Wall.
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<PAGE>
Glossary
====================------------------------------------------------------------
Definitions . 40-Act entity-A Mellon entity registered under the
Investment Company Act and/or the Investment Advisers Act
of 1940.
. Access Decision Maker-A person designated as such by the
Investment Ethics Committee. Generally, this will be
portfolio managers and research analysts who make
recommendations or decisions regarding the purchase or
sale of equity, convertible debt, and non-investment grade
debt securities for investment companies and other managed
accounts. See further details in the Access Decision Maker
edition of the Policy.
. access person-As defined by Rule 17j-1 under the
Investment Company Act of 1940, "access person" means:
(A) With respect to a registered investment company or an
investment adviser thereof, any director, officer,
general partner, or advisory person (see definition
below), of such investment company or investment
adviser;
(B) With respect to a principal underwriter, any director,
officer, or general partner of such principal
underwriter who in the ordinary course of his business
makes, participates in or obtains information
regarding the purchase or sale of securities for the
registered investment company for which the principal
underwriter so acts, or whose functions or duties as
part of the ordinary course of his business relate to
the making of any recommendations to such investment
company regarding the purchase or sale of securities.
(C) Notwithstanding the provisions of paragraph (A)
hereinabove, where the investment adviser is primarily
engaged in a business or businesses other than
advising registered investment companies or other
advisory clients, the term "access person" shall mean:
any director, officer, general partner, or advisory
person of the investment adviser who, with respect to
any registered investment company, makes any
recommendations, participates in the determination of
which recommendation shall be made, or whose principal
function or duties relate to the determination of
which recommendation will be made, to any such
investment company; or who, in connection with his
duties, obtains any information concerning securities
recommendations being made by such investment adviser
to any registered investment company.
(D) An investment adviser is "primarily engaged in a
business or businesses other than advising registered
investment companies or other advisory clients" when,
for each of its most recent three fiscal years or for
the period of time since its organization, whichever
is less, the investment adviser derived, on an
unconsolidated basis, more than 50 percent of (i) its
total sales and revenues, and (ii) its income (or
loss) before income taxes and extraordinary items,
from such other business or businesses.
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<PAGE>
Glossary
====================------------------------------------------------------------
. advisory person of a registered investment company
or an investment adviser thereof means:
(A) Any employee of such company or investment
adviser (or any company in a control
relationship to such investment company or
investment adviser) who, in connection with
his regular functions or duties, makes,
participates in, or obtains information
regarding the purchase or sale of a security
by a registered investment company, or whose
functions relate to the making of any
recommendation with respect to such purchases
or sales; and
(B) Any natural person in a control relationship
to such company or investment adviser who
obtains information concerning
recommendations made to such company with
regard to the purchase or sale of a security.
. approval-written consent or written notice of non-
objection.
. beneficial ownership-The definition that follows
conforms to interpretations of the Securities and
Exchange Commission on this matter. Because a
determination of beneficial ownership requires a
detailed analysis of personal financial
circumstances that are subject to change,
Corporate Compliance ordinarily will not advise
employees on this definition. It is the
responsibility of employee to read the definition
and based on that definition, determine whether
he/she is the beneficial owner of an account. If
the employee determines that he/she is not a
beneficial owner of an account and Corporate
Compliance becomes aware of the existence of the
account, the employee will be responsible for
justifying his/her determination.
Securities owned of record or held in the
employee's name are generally considered to be
beneficially owned by the employee.
Securities held in the name of any other person
are deemed to be beneficially owned by the
employee if by reason of any contract,
understanding, relationship, agreement or other
arrangement, the employee obtains therefrom
benefits substantially equivalent to those of
ownership, including the power to vote, or to
direct the disposition of, such securities.
Beneficial ownership includes securities held by
others for the employee's benefit (regardless of
record ownership), e.g., securities held for the
employee or members of the employee's immediate
family, defined below, by agents, custodians,
brokers, trustees, executors or other adminis-
trators; securities owned by the employee, but
which have not been transferred into the
employee's name on the books of the company;
securities which the employee has pledged; or
securi- ties owned by a corporation that should be
regarded as the employee's personal holding
corporation. As a natural person, beneficial
ownership is deemed to include securities held in
the name or for the benefit of the employee's
immediate family, which includes the employee's
spouse, the employee's minor children and
stepchildren and the employee's relatives or
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<PAGE>
Glossary
=================---------------------------------------------------------------
. beneficial ownership-definition continued:
the relatives of the employee's spouse who are sharing the
employee's home, unless because of countervailing
circumstances, the employee does not enjoy benefits
substantially equivalent to those of ownership. Benefits
substantially equivalent to ownership include, for example,
application of the income derived from such securities to
maintain a common home, meeting expenses that such person
otherwise would meet from other sources, and the ability to
exercise a controlling influence over the purchase, sale or
voting of such securities. An employee is also deemed the
beneficial owner of securities held in the name of some
other person, even though the employee does not obtain
benefits of ownership, if the employee can vest or revest
title in himself at once, or at some future time.
In addition, a person will be deemed the beneficial owner of
a security if he has the right to acquire beneficial
ownership of such security at any time (within 60 days)
including but not limited to any right to acquire: (1)
through the exercise of any option, warrant or right; (2)
through the conversion of a security; or (3) pursuant to the
power to revoke a trust, discretionary account or similar
arrangement.
With respect to ownership of securities held in trust,
beneficial ownership includes ownership of securities as a
trustee in instances where either the employee as trustee or
a member of the employee's "immediate family" has a vested
interest in the income or corpus of the trust, the ownership
by the employee of a vested beneficial interest in the trust
and the ownership of securities as a settlor of a trust in
which the employee as the settlor has the power to revoke
the trust without obtaining the consent of the
beneficiaries. Certain exemptions to these trust beneficial
ownership rules exist, including an exemption for instances
where beneficial ownership is imposed solely by reason of
the employee being settlor or beneficiary of the securities
held in trust and the ownership, acquisition and disposition
of such securities by the trust is made without the
employee's prior approval as settlor or beneficiary.
"Immediate family" of an employee as trustee means the
employee's son or daughter (including any legally adopted
children) or any descendant of either, the employee's
stepson or stepdaughter, the employee's father or mother or
any ancestor of either, the employee's stepfather or
stepmother and the employee's spouse.
To the extent that stockholders of a company use it as a
personal trading or investment medium and the company has no
other substantial business, stockholders are regarded as
beneficial owners, to the extent of their respective
interests, of the stock thus invested or traded in. A
general partner in a partnership is considered to have
indirect beneficial ownership in the securities held by the
partnership to the extent of his pro rata interest in the
partnership. Indirect beneficial ownership is not, however,
considered to exist solely by reason of an indirect
interest in portfolio
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<PAGE>
Glossary
=====================-----------------------------------------------------------
. beneficial ownership-definition continued:
securities held by any holding company registered under
the Public Utility Holding Company Act of 1935, a
pension or retirement plan holding securities of an
issuer whose employees generally are beneficiaries of
the plan and a business trust with over 25
beneficiaries.
Any person who, directly or indirectly, creates or uses
a trust, proxy, power of attorney, pooling arrangement
or any other contract, arrangement or device with the
purpose or effect of divesting such person of
beneficial ownership as part of a plan or scheme to
evade the reporting requirements of the Securities
Exchange Act of 1934 shall be deemed the beneficial
owner of such security.
The final determination of beneficial ownership is a
question to be determined in light of the facts of a
particular case. Thus, while the employee may include
security holdings of other members of his family, the
employee may nonetheless disclaim beneficial ownership
of such securities.
. "Chinese Wall" Policy-procedures designed to restrict
the flow of information within Mellon from units or
individuals who are likely to receive material
nonpublic information to units or individuals who trade
in securities or provide investment advice.
. direct family relation-employee's husband, wife,
father, mother, brother, sister, daughter or son.
Includes the preceding plus, where appropriate, the
following prefixes/suffix: grand-, step-, foster-,
half- and -in-law.
. discretionary trading account-an account over which the
employee has no direct or indirect control over the
investment decision making process.
. employee-any employee of Mellon Financial Corporation
or its more-than-50%-owned direct or indirect
subsidiaries; includes all full-time, part-time,
benefited and non-benefited, exempt and non-exempt,
domestic and international employees; does not include
consultants and contract or temporary employees.
. exempt securities-Exempt Securities are defined as:
. direct obligations of the government of the United
States;
. high quality short-term debt instruments;
. bankers' acceptances;
. bank certificates of deposit and time deposits;
. commercial paper;
. repurchase agreements;
. securities issued by open-end investment companies;
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<PAGE>
Glossary
======================----------------------------------------------------------
. family relation-see direct family relation.
. General Counsel-General Counsel of Mellon Financial
Corporation or any person to whom relevant authority is
delegated by the General Counsel.
. index fund-an investment company or managed portfolio
which contains securities of an index in proportions
designed to replicate the return of the index.
. initial public offering (IPO)-the first offering of a
company's securities to the public through an
allocation by the underwriter.
. investment club- is a membership organization where
investors make joint decisions on which securities to
buy or sell. The securities are generally held in the
name of the investment club. Since each member of an
investment club participates in the investment decision
making process, Insider Risk Employees, Investment
Employees and Access Decision Makers belonging to such
investment clubs must preclear and report the
securities transactions contemplated by such investment
clubs. In contrast, a private investment company is an
organization where the investor invests his/her money,
but has no direct control over the way his/her money is
invested. Insider Risk Employees, Investment Employees
and Access Decision Makers investing in such a private
investment company are not required to preclear any of
the securities transactions made by the private
investment company. Insider Risk Employees, Investment
Employees and Access Decision Makers are required to
report their investment in a private investment company
to the Manager of Corporate Compliance and certify to
the Manager of Corporate Compliance that they have no
direct control over the way their money is invested.
. investment company-a company that issues securities
that represent an undivided interest in the net assets
held by the company. Mutual funds are investment
companies that issue and sell redeemable securities
representing an undivided interest in the net assets of
the company.
. Investment Ethics Committee is composed of investment,
legal, compliance, and audit management representatives
of Mellon and its affiliates. The members of the
Investment Ethics Committee are:
. President and Chief Investment Officer of The
Dreyfus Corporation (Committee Chair)
. General Counsel, Mellon Financial Corporation
. Chief Risk Management Officer, Mellon Trust
. Manager of Corporate Compliance, Mellon Financial
Corporation
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<PAGE>
Glossary
=====================-----------------------------------------------------------
. Corporate Chief Auditor, Mellon Financial
Corporation
. Chief Investment Officer, Mellon Private Asset
Management
. Executive Officer of a Mellon investment adviser
(rotating membership)
The Committee has oversight of issues related to
personal securities trading and investment activity
by Access Decision Makers.
. Manager of Corporate Compliance-the employee within the
Audit & Risk Review Department of Mellon Financial
Corporation who is responsible for administering the
Securities Trading Policy, or any person to whom
relevant authority is delegated by the Manager of
Corporate Compliance.
. Mellon-Mellon Financial Corporation and all of its
direct and indirect subsidiaries.
. Option-a security which gives the investor the right,
but not the obligation, to buy or sell a specific
security at a specified price within a specified time.
For purposes of compliance with the Policy, any Mellon
employee who buys/sells an option, is deemed to have
purchased/sold the underlying security when the option
was purchased/sold. Four combinations are possible as
described below.
. Call Options
If a Mellon employee buys a call option, the
employee is considered to have purchased the
underlying security on the date the option was
purchased.
If a Mellon employee sells a call option, the
employee is considered to have sold the underlying
security on the date the option was sold.
. Put Options
If a Mellon employee buys a put option, the
employee is considered to have sold the underlying
security on the date the option was purchased.
If a Mellon employee sells a put option, the
employee is considered to have bought the
underlying security on the date the option was
sold.
Below is a table describing the above:
Transaction Type
------------------------------------------------------
Option Type Buy Sale
------------------------------------------------------
Put Sale of Purchase of
Underlying Security Underlying Security
------------------------------------------------------
Call Purchase of Sale of
Underlying Security Underlying Security
------------------------------------------------------
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<PAGE>
Glossary
=========================-------------------------------------------------------
. Preclearance Compliance Officer-a person
designated by the Manager of Corporate Compliance
and/or the Investment Ethics Committee to
administer, among other things, employees'
preclearance requests for a specific business
unit.
. private placement-an offering of securities that
is exempt from registration under the Securities
Act of 1933 because it does not constitute a
public offering. Includes limited partnerships.
. Senior Management Committee-the Senior Management
Committee of Mellon Financial Corporation.
. short sale-the sale of a security that is not
owned by the seller at the time of the trade.
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<PAGE>
================================------------------------------------------------
Exhibit A-Sample Instruction
Letter to Broker
--------------------------------------------------------------------------------
[LOGO OF MELLON]
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your
firm noted above, please be advised that the Compliance
Department of my employer should be noted as an "Interested
Party" with respect to my accounts. They should, therefore,
be sent copies of all trade confirmations and account
statements relating to my account.
Please send the requested documentation ensuring the account
holder's name appears on all correspondence to:
Manager, Corporate Compliance
Mellon Financial Corporation
PO Box 3130 Pittsburgh, PA 15230-3130
or
Preclearance Compliance Officer
(obtain address from your designated Preclearance
Compliance Officer)
Thank you for your cooperation in this request.
Sincerely yours,
Employee
cc: Manager, Corporate Compliance (151-4340) or
Preclearance Compliance Officer
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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<PAGE>
Questions Concerning the Securities Trading Policy?
Contact Corporate Compliance, (412) 234-1661
AIM 151-4340, Mellon Bank, Pittsburgh, PA 15258-0001
[LOGO OF MELLON]
------------------------------------------------------------------
Corporate Compliance
www.mellon.com
