CODE OF ETHICS
FOR ACCESS PERSONS OF
THE STRONG FAMILY OF MUTUAL FUNDS,
STRONG CAPITAL MANAGEMENT, INC.,
STRONG INVESTMENTS, INC.,
AND FLINT PRAIRIE, L. L. C.
[STRONG LOGO]
STRONG CAPITAL MANAGEMENT, INC.
October 22, 1999
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CODE OF ETHICS
For Access Persons of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.,
and Flint Prairie, L. L. C.
Dated October 22, 1999
TABLE OF CONTENTS
I. INTRODUCTION 1
A. Fiduciary Duty 1
1. Place the interests of Advisory Clients first 1
2. Avoid taking inappropriate advantage of their position 1
3. Conduct all Personal Securities Transactions in full compliance with this
Code including both the preclearance and reporting requirements 1
B. Appendices to the Code 1
1. Definitions 2
2. Contact Persons 2
3. Disclosure of Personal Holdings in Securities 2
4. Acknowledgment of Receipt of Code of Ethics and Limited Power of Attorney 2
5. Preclearance Request for Access Persons 2
6. Annual Code of Ethics Questionnaire 2
7. List of Broad-Based Indices 2
8. Gift Policy 2
9. Insider Trading Policy 2
10. Electronic Trading Authorization Form 2
11. Social Security Number/Tax Identification Form 2
C. Application of the Code to Independent Fund Directors 2
D. Application of the Code to Funds Subadvised by SCM 2
II. PERSONAL SECURITIES TRANSACTIONS 2
A. Annual Disclosure of Personal Holdings by Access Persons 2
B. Preclearance Requirements for Access Persons 3
1. General Requirement 3
2. Transactions Exempt from Preclearance Requirements 3
a. Mutual Funds 3
b. No Knowledge 3
c. Certain Corporate Actions 3
d. Rights 3
e. Application to Commodities, Futures, Options on Futures and Options on
Broad-Based Indices 3
f. Miscellaneous 4
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TABLE OF CONTENTS (CONTINUED)
C. Preclearance Requests 4
1. Trade Authorization Request Forms 4
2. Review of Form 4
3. Access Person Designees 4
D. Prohibited Transactions 5
1. Prohibited Securities Transactions 5
a. Initial Public Offerings 5
b. Pending Buy or Sell Orders 5
c. Seven Day Blackout 5
d. Intention to Buy or Sell for Advisory Client 6
e. 60-Day Blackout 6
2. Always Prohibited Securities Transactions 6
a. Inside Information 6
b. Market Manipulation 6
c. Large Positions in Registered Investment Companies 6
d. Others 6
3. Private Placements 6
4. No Explanation Required for Refusals 7
E. Execution of Personal Securities Transactions 7
F. Length of Trade Authorization Approval 7
G. Trade Reporting Requirements 7
1. Reporting Requirement 7
2. Disclaimers 8
3. Quarterly Review 8
4. Availability of Reports 8
III. FIDUCIARY DUTIES 9
A. Confidentiality 9
B. Gifts 9
1. Accepting Gifts 9
2. Solicitation of Gifts 9
3. Giving Gifts 9
C. Payments to Advisory Clients 9
D. Corporate Opportunities 9
E. Undue Influence 10
F. Service as a Director 10
G. Involvement in Criminal Matters or Investment-Related Civil Proceedings
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TABLE OF CONTENTS (CONTINUED)
IV. COMPLIANCE WITH THIS CODE OF ETHICS 10
A. Code of Ethics Review Committee 10
1. Membership, Voting, and Quorum 10
2. Investigating Violations of the Code 10
3. Annual Reports 11
B. Remedies 11
1. Sanctions 11
2. Sole Authority 11
3. Review 11
C. Exceptions to the Code 12
D. Compliance Certification 12
E. Record Retention 12
1. Code of Ethics 12
2. Violations 12
3. Required Reports 12
4. Access Person List 12
F. Inquiries Regarding the Code 12
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CODE OF ETHICS
For Access Persons of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.,
and Flint Prairie, L. L. C.
Dated October 22, 1999
TABLE OF APPENDICES
Appendix 1 (Definitions) 13
Appendix 2 (Contact Persons) 16
Appendix 3 (Disclosure of Personal Holdings in Securities) 17
Appendix 4 (Acknowledgment of Receipt of Code of Ethics and
Limited Power of Attorney) 18
Appendix 5 (Preclearance Request for Access Persons) 19
Appendix 6 (Annual Code of Ethics Questionnaire) 20
Appendix 7 (List of Broad-Based Indices) 23
Appendix 8 (Gift Policy) 24
Appendix 9 (Insider Trading Policy) 26
Appendix 10 (Electronic Trading Authorization Form) 30
Appendix 11 (Social Security Number/Tax Identification Form) 31
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CODE OF ETHICS
For Access Persons of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.,
and Flint Prairie, L. L. C.
Dated October 22, 1999
I. INTRODUCTION(1)
A. FIDUCIARY DUTY. This Code of Ethics is based upon the principle
that directors, officers and associates of Strong Capital Management, Inc.
("SCM"), Strong Investments, Inc. ("the Distributor"), the Strong Family of
Mutual Funds ("the Strong Funds") and Flint Prairie, L. L. C. ("Flint Prairie")
have a fiduciary duty to place the interests of clients ahead of their own.
The Code applies to all Access Persons and focuses principally on preclearance
and reporting of personal transactions in securities. Access Persons must
avoid activities, interests and relationships that might interfere with making
decisions in the best interests of the Advisory Clients of SCM.
As fiduciaries, Access Persons must at all times:
1. PLACE THE INTERESTS OF ADVISORY CLIENTS FIRST. Access Persons must
scrupulously avoid serving their own personal interests ahead of the interests
of the Advisory Clients of SCM. AN ACCESS PERSON MAY NOT INDUCE OR CAUSE AN
ADVISORY CLIENT TO TAKE ACTION, OR NOT TO TAKE ACTION, FOR PERSONAL BENEFIT
RATHER THAN FOR THE BENEFIT OF THE ADVISORY CLIENT. For example, an Access
Person would violate this Code by causing an Advisory Client to purchase a
Security he or she owned for the purpose of increasing the price of that
Security.
2. AVOID TAKING INAPPROPRIATE ADVANTAGE OF THEIR POSITION. The receipt of
investment opportunities, perquisites or gifts from persons seeking business
with the Strong Funds, SCM, the Distributor, Flint Prairie or their clients
could call into question the exercise of an Access Person's independent
judgment. Access persons may not, for example, use their knowledge of
portfolio transactions to profit by the market effect of such transactions.
3. CONDUCT ALL PERSONAL SECURITIES TRANSACTIONS IN FULL COMPLIANCE
WITH THIS CODE INCLUDING BOTH THE PRECLEARANCE AND REPORTING REQUIREMENTS.
Doubtful situations should be resolved in favor of Advisory Clients. Technical
compliance with the Code's procedures will not automatically insulate from
scrutiny any trades that may indicate an abuse of fiduciary duties.
[FN]
(1) Capitalized words are defined in Appendix 1.
</FN>
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B. APPENDICES TO THE CODE. The appendices to this Code are attached
hereto, are a part of the Code and include the following:
1. DEFINITIONS--capitalized words as defined in the Code (Appendix
1),
2. CONTACT PERSONS, including the Preclearance Officer designees and the
Code of Ethics Review Committee (Appendix 2),
3. DISCLOSURE OF PERSONAL HOLDINGS IN SECURITIES (Appendix 3),
4. ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS AND LIMITED POWER OF
ATTORNEY (Appendix 4),
5. PRECLEARANCE REQUEST FOR ACCESS PERSONS (Appendix 5),
6. ANNUAL CODE OF ETHICS QUESTIONNAIRE (Appendix 6),
7. LIST OF BROAD-BASED INDICES (Appendix 7),
8. GIFT POLICY (Appendix 8),
9. INSIDER TRADING POLICY (Appendix 9)
10. Electronic Trading Authorization Form (Appendix 10), and
11. Social Security Number/Tax Identification Form (Appendix 11).
C. APPLICATION OF THE CODE TO INDEPENDENT FUND DIRECTORS. This Code
applies to Independent Fund Directors and requires Independent Fund Directors
and their Immediate Families to report Securities Transactions to the
Compliance Department in accordance with the trade reporting requirements
(Section II.G.). However, provisions of the Code relating to the disclosure of
personal holdings (Section II.A.), preclearance of trades (Section II.B.),
prohibited transactions (II.D.1.), large positions in registered investment
companies (Section II.D.2.c.), private placements (Section II.D.3.),
restrictions on serving as a director of a publicly-traded company (Section
III.F.) and receipt of gifts (Section III.B.) do not apply to Independent Fund
Directors.
D. APPLICATION OF THE CODE TO FUNDS SUBADVISED BY SCM. This Code does
not apply to the directors, officers and general partners of Funds for which
SCM serves as a subadviser.
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II. PERSONAL SECURITIES TRANSACTIONS
A. ANNUAL DISCLOSURE OF PERSONAL HOLDINGS BY ACCESS PERSONS. Upon
designation as an Access Person, and thereafter on an annual basis, all Access
Persons must report on the Disclosure of Personal Holdings In Securities Form
(Appendix 3) (or a substantially similar form) all Securities, including
securities held in certificate form, in which they have a Beneficial Interest
and all Securities in non-client accounts for which they make investment
decisions (previously reported holdings, as well as those specifically excluded
from the definition of Security, need not be reported). This provision does
not apply to Independent Fund Directors.
B. PRECLEARANCE REQUIREMENTS FOR ACCESS PERSONS.
1. GENERAL REQUIREMENT. Except for the transactions set forth in
Section II.B.2., ALL SECURITIES TRANSACTIONS in which an Access Person or a
member of his or her Immediate Family has a Beneficial Interest MUST BE
PRECLEARED with the Preclearance Officer or his designee. This provision does
not apply to transactions of Independent Fund Directors and their Immediate
Families.
2. TRANSACTIONS EXEMPT FROM PRECLEARANCE REQUIREMENTS. The following
Securities Transactions are exempt from the preclearance requirements set forth
in Section II.B.1. of this Code:
a. MUTUAL FUNDS. Securities issued by any registered open-end
investment companies (including but not limited to the Strong Funds);
b. NO KNOWLEDGE. Securities Transactions where neither SCM, the
Access Person nor an Immediate Family member knows of the transaction before it
is completed (for example, Securities Transactions effected for an Access
Person by a trustee of a blind trust or discretionary trades involving an
investment partnership or investment club in which the Access Person is neither
consulted nor advised of the trade before it is executed);
c. CERTAIN CORPORATE ACTIONS. Any acquisition or disposition of
Securities through stock dividends, dividend reinvestments, stock splits,
reverse stock splits, mergers, consolidations, spin-offs or other similar
corporate reorganizations or distributions generally applicable to all holders
of the same class of Securities. Odd-lot tender offers are also exempt from
the preclearance requirements; however, all other tender offers must be
precleared;
d. RIGHTS. Any acquisition or disposition of Securities through the
exercise of rights, options, convertible bonds or other instruments acquired in
compliance with this Code;
e. APPLICATION TO COMMODITIES, FUTURES, OPTIONS ON FUTURES AND OPTIONS
ON BROAD-BASED INDICES. Commodities, futures (including currency futures and
futures on securities comprising part of a broad-based, publicly traded
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market based index of stocks), options on futures, options on currencies and
options on certain indices designated by the Compliance Department as
broad-based are not subject to preclearance or the seven day black out, 60-day
profit disgorgement and other prohibited transaction provisions of Section
II.D.1. of the Code but are subject to transaction reporting requirements
(Section II.G.). The options on indices designated by the Compliance Department
as broad-based may be changed from time to time and are listed in Appendix 7.
THE OPTIONS ON INDICES THAT ARE NOT DESIGNATED AS BROAD-BASED ARE SUBJECT TO
THE PRECLEARANCE, SEVEN-DAY BLACKOUT, 60-DAY PROFIT DISGORGEMENT, PROHIBITED
TRANSACTION AND REPORTING PROVISIONS OF THE CODE.
f. MISCELLANEOUS. Any transaction in the following: (1) bankers
acceptances; (2) bank certificates of deposit ("CDs"); (3) commercial paper;
(4) repurchase agreements (when backed by exempt securities); (5) U.S.
Government Securities; (6) the acquisition of equity securities in dividend
reinvestment plans ("DRIPs"), when the acquisition is directly through the
issuer or its non-broker agent; (7) Securities of the employer of a member of
the Access Person's Immediate Family if such securities are beneficially owned
through participation by the Immediate Family member in a Profit Sharing plan,
401(k) plan, ESOP or other similar plan; and (8) other Securities as may from
time to time be designated in writing by the Code of Ethics Review Committee on
the grounds that the risk of abuse is minimal or non-existent.
C. PRECLEARANCE REQUESTS.
1. TRADE AUTHORIZATION REQUEST FORMS. Prior to entering an order for
a Securities Transaction that requires preclearance, the Access Person must
complete, IN WRITING, a Preclearance Request For Access Persons Form (Appendix
5) and submit the completed form to the Preclearance Officer (or his or her
designee). The Preclearance Request For Access Persons Form requires Access
Persons to provide certain information and to make certain representations.
Proposed Securities Transactions of the Preclearance Officer that require
preclearance must be submitted to his designee.
2. REVIEW OF FORM. After receiving the completed Preclearance Request
For Access Persons Form, the Preclearance Officer (or his or her designee) will
(a) review the information set forth in the form, (b) independently confirm
whether the Securities are held by any Funds or other accounts managed by SCM
and whether there are any unexecuted orders to purchase or sell the Securities
by any Fund or accounts managed by SCM and (c) as soon as reasonably
practicable, determine whether to clear the proposed Securities Transaction.
The authorization, date, and time of the authorization must be reflected on the
Preclearance Request For Access Persons Form. The Preclearance Officer (or his
or her designee) will keep one copy of the completed form for the Compliance
Department, send one copy to the Access Person seeking authorization and send
the third copy to the Trading Department, which will cause the transaction to
be executed. If the brokerage account is an Electronic Trading Account and the
Access
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Person has completed the Electronic Trading Authorization Form (Appendix 10),
the Access Person will execute the transaction on his or her own behalf and
will provide Compliance with a copy of the electronic confirmation by the end
of the next business day.
No order for a securities transaction for which preclearance authorization is
sought may be placed prior to the receipt of WRITTEN authorization of the
transaction by the preclearance officer (or his or her designee). Verbal
approvals are not permitted.
3. ACCESS PERSON DESIGNEES. If an Access Person is unable to
personally effect a personal Securities Transaction, such Access Person may
designate an individual at SCM to complete and submit for preclearance on his
or her behalf a Preclearance Request For Access Persons Form provided the
following requirements are satisfied:
a. The Access Person communicates the details of the trade and affirms
the accuracy of the representations and warranties contained on the Form
directly to such designated person; and
b. The designated person completes the Preclearance Request For Access
Persons Form on behalf of the Access Person in accordance with the requirements
of the Code and then executes the Access Person Designee Certification
contained in the Form. The Access Person does not need to sign the Form so
long as the foregoing certification is provided.
D. PROHIBITED TRANSACTIONS.
1. PROHIBITED SECURITIES TRANSACTIONS. The following Securities
Transactions for accounts in which an Access Person or a member of his or her
Immediate Family have a Beneficial Interest, to the extent they require
preclearance under Section II.B. above, are prohibited and will not be
authorized by the Preclearance Officer (or his or her designee) absent
exceptional circumstances:
a. INITIAL PUBLIC OFFERINGS. Any purchase of Securities in an initial
public offering (other than a new offering of a registered open-end investment
company);
b. PENDING BUY OR SELL ORDERS. Any purchase or sale of Securities on
any day during which any Advisory Client has a pending "buy" or "sell" order in
the same Security (or Equivalent Security) until that order is executed or
withdrawn, unless the purchase or sale is a Program Trade;
c. SEVEN DAY BLACKOUT. Purchases or sales of Securities by a
Portfolio Manager within seven calendar days of a purchase or sale of the same
Securities (or Equivalent Securities) by an Advisory Client managed by that
Portfolio Manager, unless the purchase or sale is a Program Trade. For
example, if a Fund trades in a Security on day one, day eight is the first day
the Portfolio
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Manager may trade that Security for an account in which he or she has a
beneficial interest;
d. INTENTION TO BUY OR SELL FOR ADVISORY CLIENT. Purchases or sales
of Securities at a time when that Access Person intends, or knows of another's
intention, to purchase or sell that Security (or an Equivalent Security) on
behalf of an Advisory Client. This prohibition applies whether the Securities
Transaction is in the same (E.G., two purchases) or the opposite (a purchase
and sale) direction of the transaction of the Advisory Client, unless the
purchase or sale is a Program Trade; and
e. 60-DAY BLACKOUT. (1) Sales of a Security within 60 days of the
purchase of the Security (or an Equivalent Security) in which the Access Person
has a Beneficial Interest and (2) purchases of a Security within 60 days of the
sale of the Security (or an Equivalent Security) in which the Access Person had
a Beneficial Interest, unless in each case, the Access Person agrees to give up
all profits on the transaction to a charitable organization as specified by
remedies involving sanctions (Section IV.B.1.).
2. ALWAYS PROHIBITED SECURITIES TRANSACTIONS. The following
Securities Transactions are prohibited and will not be authorized under any
circumstances:
a. INSIDE INFORMATION. Any transaction in a Security while in
possession of material nonpublic information regarding the Security or the
issuer of the Security (see Insider Trading Policy, Appendix 9);
b. MARKET MANIPULATION. Transactions intended to raise, lower, or
maintain the price of any Security or to create a false appearance of active
trading;
c. LARGE POSITIONS IN REGISTERED INVESTMENT COMPANIES. Transactions
in a registered investment company, including Strong Funds, which result in the
Access Person owning five percent or more of any class of securities in such
investment company (this prohibition does not apply to Independent Fund
Directors); and
d. OTHERS. Any other transactions deemed by the Preclearance Officer
(or his designee) to involve a conflict of interest, possible diversion of
corporate opportunity or an appearance of impropriety.
3. PRIVATE PLACEMENTS. Acquisitions of Beneficial Interests in
Securities in a private placement by an Access Person is strongly discouraged.
The Preclearance Officer (or his or her designee) will give permission only
after considering, among other facts, whether the investment opportunity should
be reserved for Advisory Clients and whether the opportunity is being offered
to an Access Person by virtue of his or her position as an Access Person.
Access Persons who have been authorized to acquire and have acquired
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securities in a private placement are required to disclose that investment to
the Compliance Department when they play a part in any subsequent consideration
of an investment in the issuer by an Advisory Client. In such circumstances,
the decision to purchase securities of the issuer by an Advisory Client must be
independently authorized by a Portfolio Manager with no personal interest in
the issuer. This provision does not apply to Independent Fund Directors.
4. NO EXPLANATION REQUIRED FOR REFUSALS. In some cases, the
Preclearance Officer (or his or her designee) may refuse to authorize a
Securities Transaction for a reason that is confidential. The Preclearance
Officer is not required to give an explanation for refusing to authorize any
Securities Transaction.
E. EXECUTION OF PERSONAL SECURITIES TRANSACTIONS. Unless an exception
is provided in writing by the Compliance Department, all transactions in
Securities subject to the preclearance requirements for which an Access Person
or a member of his or her Immediate Family has a Beneficial Interest shall be
executed by the Trading Department. However, if the Access Person's brokerage
account is an Electronic Trading Account, the transaction may be placed by the
Access Person. IN ALL INSTANCES, THE TRADING DEPARTMENT MUST GIVE PRIORITY TO
CLIENT TRADES OVER ACCESS PERSON TRADES.
F. LENGTH OF TRADE AUTHORIZATION APPROVAL. The authorization provided
by the Preclearance Officer (or his or her designee) is effective until the
earlier of (1) its revocation; (2) the close of business on the second trading
day after the authorization is granted for transactions placed by the Trading
Department (for example, if authorization is provided on a Monday, it is
effective until the close of business on Wednesday); (3) the close of business
of the SAME TRADING DAY that the authorization is granted for transactions
placed through an Electronic Trading Account; or (4) the Access Person learns
that the information in the Trade Authorization Request Form is not accurate.
If the order for the Securities Transaction is not placed within that period, a
new advance authorization must be obtained before the Securities Transaction is
placed. For Securities Transactions placed by the Trading Deparment that have
not been executed within two trading days after the day the authorization is
granted (for example, in the case of a limit order or a Not Held Order), no new
authorization is necessary unless the person placing the original order for the
Securities Transaction amends it in any way.
G. TRADE REPORTING REQUIREMENTS.
1. REPORTING REQUIREMENT. EVERY ACCESS PERSON AND MEMBERS OF HIS OR
HER IMMEDIATE FAMILY (INCLUDING INDEPENDENT FUND DIRECTORS AND THEIR IMMEDIATE
FAMILIES) MUST ARRANGE FOR THE COMPLIANCE DEPARTMENT TO RECEIVE DIRECTLY FROM
ANY BROKER, DEALER OR BANK THAT EFFECTS ANY SECURITIES TRANSACTION, DUPLICATE
COPIES OF EACH CONFIRMATION FOR EACH SUCH TRANSACTION AND PERIODIC STATEMENTS
FOR EACH BROKERAGE ACCOUNT IN WHICH SUCH ACCESS PERSON HAS A BENEFICIAL
INTEREST. Additionally, securities held in certificate form that are not
included in the periodic statements, must also be reported. To assist in
making these arrangements, the
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Compliance Department will send a letter to each brokerage firm based on the
information provided by the Access Person in Appendix 3.
THE FOREGOING DOES NOT APPLY TO TRANSACTIONS AND HOLDINGS IN (1) OPEN-END
INVESTMENT COMPANIES INCLUDING BUT NOT LIMITED TO THE STRONG FUNDS, (2) BANKERS
ACCEPTANCES, (3) BANK CERTIFICATES OF DEPOSIT ("CDS"), (4) COMMERCIAL PAPER,
(5) REPURCHASE AGREEMENTS WHEN BACKED BY EXEMPT SECURITIES, (6) U. S.
GOVERNMENT SECURITIES, (7) THE ACQUISITION OF EQUITY SECURITIES IN DIVIDEND
REINVESTMENT PLANS ("DRIPS"), WHEN THE ACQUISITION IS DIRECTLY THROUGH THE
ISSUER OR ITS NON-BROKER AGENT; OR (8) SECURITIES OF THE EMPLOYER OF A MEMBER
OF THE ACCESS PERSON'S IMMEDIATE FAMILY IF SUCH SECURITIES ARE BENEFICIALLY
OWNED THROUGH PARTICIPATION BY THE IMMEDIATE FAMILY MEMBER IN A PROFIT SHARING
PLAN, 401(K) PLAN, ESOP OR OTHER SIMILAR PLAN.
2. DISCLAIMERS. Any report of a Securities Transaction for the
benefit of a person other than the individual in whose account the transaction
is placed may contain a statement that the report should not be construed as an
admission by the person making the report that he or she has any direct or
indirect beneficial ownership in the Security to which the report relates.
3. QUARTERLY REVIEW. At least quarterly, for Securities Transactions
requiring preclearance under this Code, the Preclearance Officer (or his or her
designee) shall compare the confirmations and periodic statements provided
pursuant to the trade reporting requirements (Section II.G.1.) to the approved
Trade Authorization Request Forms. Such review shall include:
a. Whether the Securities Transaction complied with this Code;
b. Whether the Securities Transaction was authorized in advance of its
placement;
c. Whether the Securities Transaction was executed within two full
trading days of when it was authorized;
d. Whether any Fund or accounts managed by SCM owned the Securities at
the time of the Securities Transaction, and;
e. Whether any Fund or separate accounts managed by SCM purchased or
sold the Securities in the Securities Transaction within at least 10 days of
the Securities Transaction.
4. AVAILABILITY OF REPORTS. All information supplied pursuant to this
Code will be available for inspection by the Boards of Directors of SCM and
SFDI; the Board of Directors of each Strong Fund; the Code of Ethics Review
Committee; the Compliance Department; the Access Person's department manager
(or designee); any party to which
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any investigation is referred by any of the foregoing, the SEC, any
self-regulatory organization of which the Strong Funds, SCM, the Distributor or
Flint Prairie is a member, and any state securities commission; as well as any
attorney or agent of the foregoing, the Strong Funds, SCM, the Distributor or
Flint Prairie.
III. FIDUCIARY DUTIES
A. CONFIDENTIALITY. Access Persons are prohibited from revealing
information relating to the investment intentions, activities or portfolios of
Advisory Clients except to persons whose responsibilities require knowledge of
the information.
B. GIFTS. The following provisions on gifts apply only to associates
of SCM, the Distributor and Flint Prairie.
1. ACCEPTING GIFTS. On occasion, because of their position with SCM,
the Distributor, the Strong Funds or Flint Prairie, associates may be offered,
or may receive without notice, gifts from clients, brokers, vendors or other
persons not affiliated with such entities. Acceptance of extraordinary or
extravagant gifts is not permissible. Any such gifts must be declined or
returned in order to protect the reputation and integrity of SCM, the
Distributor, the Strong Funds and Flint Prairie. Gifts of a nominal value
(i.e., gifts whose reasonable value is no more than $100 a year), customary
business meals, entertainment (E.G., sporting events) and promotional items
(E.G., pens, mugs, T-shirts) may be accepted. Please see the Gift Policy
(Appendix 8) for additional information.
If an associate receives any gift that might be prohibited under this
Code, the associate must inform the Compliance Department.
2. SOLICITATION OF GIFTS. Associates of SCM, the Distributor or Flint
Prairie may not solicit gifts or gratuities.
3. GIVING GIFTS. Associates of SCM, the Distributor or Flint Prairie
may not give any gift with a value in excess of $100 per year to persons
associated with securities or financial organizations, including exchanges,
other member organizations, commodity firms, news media or clients of the firm.
Please see the Gift Policy (Appendix 9) for additional information.
C. PAYMENTS TO ADVISORY CLIENTS. Access Persons may not make any
payments to Advisory Clients in order to resolve any type of Advisory Client
complaint. All such matters must be handled by the Legal Department.
D. CORPORATE OPPORTUNITIES. Access Persons may not take personal
advantage of any opportunity properly belonging to any Advisory Client, SCM,
the Distributor or Flint Prairie. This includes, but is not limited to,
acquiring Securities for one's own account that would otherwise be acquired for
an Advisory Client.
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E. UNDUE INFLUENCE. Access Persons may not cause or attempt to cause
any Advisory Client to purchase, sell or hold any Security in a manner
calculated to create any personal benefit to the Access Person. If an Access
Person or Immediate Family Member stands to materially benefit from an
investment decision for an Advisory Client that the Access Person is
recommending or participating in, the Access Person must disclose to those
persons with authority to make investment decisions for the Advisory Client,
any Beneficial Interest that the Access Person (or Immediate Family) has in
that Security or an Equivalent Security, or in the issuer thereof, where the
decision could create a material benefit to the Access Person (or Immediate
Family) or the appearance of impropriety. If the Access Person in question is
a person with authority to make investment decisions for the Advisory Client,
disclosure must also be made to the Compliance Department. The person to whom
the Access Person reports the interest, in consultation with the Compliance
Department, must determine whether the Access Person will be restricted in
making investment decisions.
F. SERVICE AS A DIRECTOR. No Access Person, other than an Independent
Fund Director, may serve on the board of directors of a publicly-held company
not affiliated with SCM, the Distributor, the Strong Funds or Flint Prairie
absent prior written authorization by the Code of Ethics Review Committee.
This authorization will rarely, if ever, be granted and, if granted, will
normally require that the affected Access Person be isolated through "Chinese
Wall" or other procedures from those making investment decisions related to the
issuer on whose board the Access Person sits.
G. INVOLVEMENT IN CRIMINAL MATTERS OR INVESTMENT-RELATED CIVIL
PROCEEDINGS. Each Access Person must notify the Compliance Department, as soon
as reasonably practical, if arrested, arraigned, indicted or pleads no contest
to any criminal offense (other than minor traffic violations) or if named as a
defendant in any Investment-Related civil proceedings or any administrative or
disciplinary action.
IV. COMPLIANCE WITH THIS CODE OF ETHICS
A. CODE OF ETHICS REVIEW COMMITTEE.
1. MEMBERSHIP, VOTING, AND QUORUM. The Code of Ethics Review
Committee shall consist of Senior Officers of SCM. The Committee shall vote by
majority vote with two members serving as a quorum. Vacancies may be filled;
and in the case of extended absences or periods of unavailability, alternates
may be selected by the majority vote of the remaining members of the Committee.
However, in the event that the General Counsel or Deputy General Counsel is
unavailable, at least one member of the Committee shall also be a member of the
Compliance Department.
2. INVESTIGATING VIOLATIONS OF THE CODE. The General Counsel, or his
or her designee, is responsible for investigating any suspected violation of
the Code and shall report the results of each investigation to the Code of
Ethics Review Committee. The Code of Ethics Review Committee is responsible
for reviewing the results of any investigation of any reported or suspected
violation of the Code. Any material violation
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of the Code by an associate of SCM, the Distributor or Flint Prairie for which
significant remedial action was taken will be reported to the Boards of
Directors of the Strong Funds at the next regularly scheduled quarterly Board
meeting.
3. ANNUAL REPORTS. The Code of Ethics Review Committee will review
the Code at least once a year, in light of legal and business developments and
experience in implementing the Code and will prepare an annual report to the
Boards of Directors of SCM, the Distributor and each Strong Fund that:
a. Summarizes existing procedures concerning personal investing and
any changes in the procedures made during the past year;
b. Identifies any violation requiring significant remedial action
during the past year; and
c. Identifies any recommended changes in existing restrictions or
procedures based on its experience under the Code, evolving industry practices
or developments in applicable laws or regulations.
B. REMEDIES.
1. SANCTIONS. If the Code of Ethics Review Committee determines that
an Access Person has committed a violation of the Code, the Committee may
impose sanctions and take other actions as it deems appropriate, including a
letter of caution or warning, suspension of personal trading rights, suspension
of employment (with or without compensation), fine, civil referral to the SEC,
criminal referral and termination of employment for cause. The Code of Ethics
Review Committee may also require the Access Person to reverse the trade(s) in
question and forfeit any profit or absorb any loss derived therefrom. The
amount of profit shall be calculated by the Code of Ethics Review Committee and
shall be forwarded to a charitable organization. No member of the Code of
Ethics Review Committee may review his or her own transaction.
2. SOLE AUTHORITY. The Code of Ethics Review Committee has sole
authority, subject to the review set forth in Section IV.B.3. below, to
determine the remedy for any violation of the Code, including appropriate
disposition of any moneys forfeited pursuant to this provision. Failure to
promptly abide by a directive to reverse a trade or forfeit profits may result
in the imposition of additional sanctions.
3. REVIEW. Whenever the Code of Ethics Review Committee determines
that an Access Person has committed a violation of this Code that merits
significant remedial action, it will report promptly to the Boards of Directors
of SCM and/or the Distributor (as appropriate), and no less frequently than the
quarterly meeting to the Boards of Directors of the applicable Strong Funds,
information relating to the investigation of the violation, including any
sanctions imposed. The Boards of Directors of SCM, the Distributor and the
Strong Funds may modify such sanctions as they deem appropriate.
11
<PAGE>
Such Boards may have access to all information considered by the Code of Ethics
Review Committee in relation to the case. The Code of Ethics Review Committee
may determine whether to delay the imposition of any sanctions pending review
by the applicable Boards of Directors.
C. EXCEPTIONS TO THE CODE. Although exceptions to the Code will
rarely, if ever, be granted, the General Counsel of SCM may grant exceptions to
the requirements of the Code on a case-by-case basis if he finds that the
proposed conduct involves negligible opportunity for abuse. All Material
exceptions must be in writing and must be reported as soon as practicable to
the Code of Ethics Review Committee and to the Boards of Directors of the SCM
Funds at their next regularly scheduled meeting after the exception is granted.
Refer to Appendix 1 for the definition of "Material."
D. COMPLIANCE CERTIFICATION. At least annually, all Access Persons
will be required to certify on the Annual Code of Ethics Questionnaire set
forth in Appendix 6, or on a document substantially in the form of Appendix 6,
that they have complied with the Code in all respects.
E. RECORD RETENTION. SCM will, at its principal place of business,
maintain the following records in an easily accessible place, for at least six
years and will make records available to the SEC or any representative thereof
at any time:
1. CODE OF ETHICS. A copy of the Code of Ethics which is, or at any
time has been, in effect.
2. VIOLATIONS. A record of any violation of such Code of Ethics and
any action taken as a result of such violation.
3. REQUIRED REPORTS. A copy of each report made by an Access Person
pursuant to the Code of Ethics shall include records of the procedures followed
in connection with the preclearance and reporting requirements of this Code and
information relied on by the Preclearance Officer in authorizing the Securities
Transaction and in making the post-Securities Transaction determination.
4. ACCESS PERSON LIST. A list of all persons who are, or have been,
required to make reports pursuant to the Code of Ethics.
F. INQUIRIES REGARDING THE CODE. The Compliance Department will
answer any questions about this Code or any other compliance-related matters.
12
<PAGE>
Appendix 1
DEFINITIONS
"ACCESS PERSON" means (1) every director, officer, and general partner of
SCM, the Distributor, the Strong Funds and Flint Prairie; (2) every associate
of SCM, the Distributor and Flint Prairie who, in connection with his or her
regular functions, makes, participates in, or obtains information regarding the
purchase or sale of a security by an Advisory Client's account; (3) every
associate of SCM, the Distributor and Flint Prairie who is involved in making
purchase or sale recommendations for an Advisory Client's account; (4) every
associate of SCM, the Distributor and Flint Prairie who obtains information
concerning such recommendations prior to their dissemination; and (5) such
agents of SCM, the Distributor, the Funds or Flint Prairie as the Compliance
Department shall designate who may be deemed an Access Person if they were an
associate of the foregoing. Any uncertainty as to whether an individual is an
Access Person should be brought to the attention of the Compliance Department.
Such questions will be resolved in accordance with, and this definition shall
be subject to, the definition of "Access Person" found in Rule 17j-1(e)(1)
promulgated under the Investment Company Act of 1940.
"ADVISORY CLIENT" means any client (including both investment companies
and managed accounts) for which SCM serves as an investment adviser or
subadviser, renders investment advice, makes investment decisions or places
orders through its Trading Department.
"BENEFICIAL INTEREST" means the opportunity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, to
profit or share in any profit derived from a transaction in the subject
Securities. An Access Person is deemed to have a Beneficial Interest in
Securities owned by members of his or her Immediate Family. Common examples of
Beneficial Interest include joint accounts, spousal accounts, UTMA accounts,
partnerships, trusts and controlling interests in corporations. Any
uncertainty as to whether an Access Person has a Beneficial Interest in a
Security should be brought to the attention of the Compliance Department. Such
questions will be resolved by reference to the principles set forth in the
definition of "beneficial owner" found in Rules 16a-1(a)(2) and (5) promulgated
under the Securities Exchange Act of 1934.
"CODE" means this Code of Ethics.
"COMPLIANCE DEPARTMENT" means the designated persons listed on Appendix 2,
as such Appendix shall be amended from time to time.
"THE DISTRIBUTOR" means Strong Investments, Inc.
"ELECTRONIC TRADING ACCOUNT" means a brokerage account held by an Access
Person where Securities Transactions are placed either electronically via the
Internet or the telephone. All such Securities Transactions must be precleared
by the Compliance Department.
13
<PAGE>
"EQUIVALENT SECURITY" means any Security issued by the same entity as the
issuer of a subject Security that is convertible into the equity Security of
the issuer. Examples include options but are not limited to rights, stock
appreciation rights, warrants and convertible bonds.
"FUND" means an investment company registered under the Investment Company
Act of 1940 (or a portfolio or series thereof) for which SCM serves as an
adviser or subadviser.
"IMMEDIATE FAMILY" of an Access Person means any of the following persons
who reside in the same household as the Access Person:
child grandparent son-in-law
stepchild spouse daughter-in-law
grandchild sibling brother-in-law
parent mother-in-law sister-in-law
stepparent father-in-law
Immediate Family includes adoptive relationships and any other relationship
(whether or not recognized by law) which the General Counsel determines could
lead to the possible conflicts of interest, diversions of corporate
opportunity, or appearances of impropriety which this Code is intended to
prevent.
"INDEPENDENT FUND DIRECTOR" means an independent director of an investment
company for which SCM serves as the advisor.
"LEGAL DEPARTMENT" means the SCM Legal/Compliance Department.
"MATERIAL" for purposes of this reporting requirement, shall mean the
following:
1. NUMBER OF SHARES - Any transaction for more than 1,000 shares shall be
deemed material and subject to reporting. Whether a transaction of 1,000
shares or less is material shall be determined on a case-by-case basis; in
particular, the less liquid a security is, the lower the threshold that
should be used for the materiality determination.
2. DOLLAR VALUE OF TRANSACTION - Any transaction with a dollar value in excess
of $25,000 shall be deemed material and subject to reporting. Whether a
transaction of $25,000 or less is material shall be determined on a
case-by-case basis.
3. NUMBER OF TRANSACTIONS IN A YEAR - The General Counsel may grant no more
than two exceptions per associate per year that are not subject to
reporting. For example, if the General Counsel has granted two exceptions
to an associate, ANY exception granted thereafter shall be deemed material
and subject to reporting (irrespective of the number of shares or other
circumstances of the transaction).
4. CONSULTATION WITH INDEPENDENT COUNSEL - In any case where the General
Counsel believes there is an issue of whether a proposed exception is
material and subject to reporting, he shall consult with counsel to the
independent directors for the Strong Funds.
14
<PAGE>
"NOT HELD ORDER" means an order placed with a broker and ultimately
executed at the discretion of the broker.
"PORTFOLIO MANAGER" means a person who has or shares principal day-to-day
responsibility for managing the portfolio of an Advisory Client.
"PRECLEARANCE OFFICER" means the person designated as the Preclearance
Officer in Appendix 2 hereof.
"PROGRAM TRADE" is where a Portfolio Manager directs a trader to do trades
in either an index-type account or portion of account or, at a minimum, 25-30%
of the Securities in a non-index account. Program Trades for non-index type
accounts generally arise in any of three situations: (1) cash or other assets
are being added to an account and the Portfolio Manager instructs the trader
that new securities are to be bought in a manner that maintains the account's
existing allocations; (2) cash is being withdrawn from an account and the
Portfolio Manager instructs the trader that securities are to be sold in a
manner that maintains the account's current securities allocations; and (3) a
new account is established and the Portfolio Manager instructs the trader to
buy specific securities in the same allocation percentages as are held by other
client accounts.
"SEC" means the Securities and Exchange Commission.
"SECURITY" includes stock; notes, bonds, debentures and other evidences of
indebtedness (including loan participations and assignments); limited
partnership interests; investment contracts; all derivative instruments of the
foregoing, such as options and warrants; and other items mentioned in Section
2(a)(36) of the 1940 Act, not specifically exempted by Rule 17j-1. Items
excluded from the definition of "Security" by Rule 17j-1 are U. S. Government
Securities, bankers acceptances, bank certificates of deposit, commercial paper
and shares of open-end investment companies. In addition, security does not
include futures, commodities, currencies or options on the aforementioned, but
the purchase and sale of such instruments are nevertheless subject to the
reporting requirements of the Code.
"SECURITIES TRANSACTION" means a purchase or sale of Securities in which
an Access Person or a members of his or her Immediate Family has or acquires a
Beneficial Interest.
"SCM" means Strong Capital Management, Inc.
"STRONG FUNDS" means the investment companies comprising the Strong Family
of Mutual Funds.
"U. S. GOVERNMENT SECURITY" means any security issued or guaranteed as to
principal or interest by the United States or by a person controlled or
supervised by and acting as an instrumentality of the Government of the United
States pursuant to authority granted by the Congress of the United States or
any certificate of deposit for any of the foregoing.
15
<PAGE>
Appendix 2
CONTACT PERSONS
PRECLEARANCE OFFICER
1. Stephen J. Shenkenberg, Deputy General Counsel and Chief Compliance
Officer of SCM
DESIGNEES OF PRECLEARANCE OFFICER
1. Thomas A. Hooker
2. Linda E. Meints
3. John S. Weitzer
4. Kelly M. Zeroth
COMPLIANCE DEPARTMENT
1. Stephen J. Shenkenberg
2. Thomas A. Hooker
3. Kathleen A. Flanagan
4. Linda E. Meints
5. Kelly M. Zeroth
CODE OF ETHICS REVIEW COMMITTEE
1. Stephen J. Shenkenberg, Deputy General Counsel and Chief Compliance
Officer of SCM
2. Thomas A. Hooker, Director of Compliance
16
<PAGE>
Appendix 3
PERSONAL HOLDINGS IN SECURITIES
In accordance with Section II.A. of the Code of Ethics, please provide a list
of all Securities (other than those specifically excluded from the definition
of Security), including physical certificates held, in which each Access Person
has a Beneficial Interest, including those in accounts of the Immediate Family
of the Access Person and all Securities in non-client accounts for which the
Access Person makes investment decisions.
(1) Name of Access Person: _____________________________________
(2) If different than (1), name of the person
in whose name the account is held: _________________________________
(3) Relationship of (2) to (1): ___________________________________
(4) Broker at which Account is maintained: ________________________________
(5) Account Number: ____________________________________
(6) Contact person at Broker and phone number _____________________________
(7) For each account, attach the most recent account statement listing
Securities in that account. If the Access Person owns Beneficial Interests in
Securities that are not listed in an attached account statement, or holds the
physical certificate, list them below:
NAME OF SECURITY QUANTITY VALUE CUSTODIAN
1. ______________________________________________________________________
2. ______________________________________________________________________
3. ______________________________________________________________________
4. ______________________________________________________________________
5. ______________________________________________________________________
6. ______________________________________________________________________
(ATTACH SEPARATE SHEET IF NECESSARY.)
I certify that this form and the attached statements (if any) constitute
all of the Securities in which I have a Beneficial Interest, including those
for which I hold physical certificates, as well as those held in accounts of my
Immediate Family.
____________________________
Access Person Signature
Dated: _________________ _____________________________
Print Name
17
<PAGE>
Appendix 4
ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS
AND LIMITED POWER OF ATTORNEY
I acknowledge that I have received the Code of Ethics dated October 22,
1999, and represent that:
1. In accordance with Section II.A. of the Code of Ethics, I will
fully disclose the Securities holdings in which I have, or a member of my
Immediate Family has, a Beneficial Interest.*
2. In accordance with Section II.B.1. of the Code of Ethics, I will
obtain prior authorization for all Securities Transactions in which I have, or
a member of my Immediate Family has, a Beneficial Interest except for
transactions exempt from preclearance under Section II.B. 2. of the Code of
Ethics.*
3. In accordance with Section II.G.1. of the Code of Ethics, I will
report all Securities Transactions in which I have, or a member of my Immediate
Family has, a Beneficial Interest, except for transactions exempt from
reporting under Section II.G.1. of the Code of Ethics.
4. I will comply with the Code of Ethics in all other respects.
5. I agree to disgorge and forfeit any profits on prohibited
transactions in accordance with the requirements of the Code.*
I hereby appoint Strong Capital Management, Inc. as my attorney-in-fact
for the purpose of placing orders for and on my behalf to buy, sell, tender,
exchange, convert, and otherwise effectuate transactions in any and all stocks,
bonds, options, and other securities. I agree that Strong Capital Management,
Inc. shall not be liable for the consequences of any errors made by the
executing brokers in connection with such transactions.*
____________________________
Access Person Signature
____________________________
Print Name
Dated: ____________________________
* Representations (1), (2) and (5) and the Limited Power of Attorney do
not apply to Independent Fund Directors.
18
<PAGE>
Appendix 5
Ctrl. No:_________________________ Associate ID #________________________
STRONG CAPITAL MANAGEMENT, INC.
PRECLEARANCE REQUEST FOR ACCESS PERSONS
1. Name of Access Person (and trading entity, if different): ______________
2. Name and symbol of Security: ______________
3. Maximum quantity to be purchased or sold: ______________
4. Name, account # & phone # of broker to effect transaction: ______________
5. Check if applicable: Purchase ___ Market Order ___
Sale ___ Limit Order ___ (Limit Order Price: _______)
Not Held Order ___
6. In connection with the foregoing transaction, I hereby make the
following representations and warranties:
(a) I do not possess any material nonpublic information regarding the
Security or the issuer of the Security.
(b) To my knowledge:
(1) The Securities or "equivalent" securities (I.E., securities issued by
the same issuer) [ ARE / ARE NOT ] (CIRCLE ONE) held by any investment
companies or other accounts managed by SCM;
(2) There are no outstanding purchase or sell orders for this Security (or
any equivalent security) by any investment companies or other accounts managed
by SCM; and
(3) None of the Securities (or equivalent securities) are actively being
considered for purchase or sale by any investment companies or other accounts
managed by SCM.
(c) The Securities are not being acquired in an initial public offering.
(d) The Securities are not being acquired in a private placement or, if
they are, I have reviewed Section II.D.3. of the Code and have attached hereto
a written explanation of such transaction.
(e) If I am a Portfolio Manager, none of the accounts I manage purchased
or sold these Securities (or equivalent securities) within the past seven
calendar days and I do not expect any such client accounts to purchase or sell
these Securities (or equivalent securities) within seven calendar days of my
purchase or sale.
(f) If I am purchasing these Securities, I have not directly or indirectly
(through any member of my Immediate Family, any account in which I have a
Beneficial Interest or otherwise) sold these Securities (or equivalent
securities) in the prior 60 days.
(g) If I am selling these Securities, I have not directly or indirectly
(through any member of my Immediate Family, any account in which I have a
Beneficial Interest or otherwise) purchased these Securities (or equivalent
securities) in the prior 60 days.
(h) I have read the SCM Code of Ethics within the prior 12 months and
believe that the proposed trade fully complies with the requirements of the
Code.
__________________________ ________________________________
Access Person Print Name
CERTIFICATION OF ACCESS PERSON DESIGNEE
The undersigned hereby certifies that the above Access Person (a) directly
instructed me to complete this form on his or her behalf, (b) to the best of my
knowledge, was out of the office at the time of such instruction and has not
returned, and (c) confirmed to me that the representations and warranties
contained in this form are accurate.
___________________________ ________________________________
Access Person Designee Print Name
AUTHORIZATION
Authorized By:_________________________ Date:______________ Time:___________
PLACEMENT
Trader:______________________ Date:___________ Time:__________ Qty:_____________
EXECUTION
Trader:_______________ Date:________ Time:_______ Qty:_________ Price:_________
(Original copy to Compliance Department, Yellow copy to Trading Department,
Pink copy to Access Person)
revised 7/98
19
<PAGE>
CONFIDENTIAL Appendix 6
ANNUAL CODE OF ETHICS QUESTIONNAIRE(1)
For ACCESS PERSONS of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.
and Flint Prairie, L. L. C.
September 14, 1999
Associate: ____________________________(please print name)
I. Introduction
Access Persons(2) are required to answer the following questions FOR
THE YEAR SEPTEMBER 1, 1998, THROUGH AUGUST 31, 1999. ANSWERS OF "NO" TO ANY OF
THE QUESTIONS IN SECTIONS II AND III MUST BE EXPLAINED ON THE "ATTACHMENT" ON
PAGE 3. Upon completion, please sign and return the questionnaire by Monday,
September 20th, to Kelly Zeroth in the Compliance Department. All information
provided is kept confidential to the maximum extent possible. If you have any
questions, please contact Kelly at extension 3549.
II. Annual certification of compliance with the Code of Ethics
A. Have you OBTAINED PRECLEARANCE for all Securities(3) Transactions in which
you have, or a member of your Immediate Family has, a Beneficial Interest,
except for transactions exempt from preclearance under the Code of Ethics?
(Circle "Yes" if there have been no Securities Transactions.)
YES NO (CIRCLE ONE)
B. Have you REPORTED all Securities Transactions in which you have, or a
member of your Immediate Family has, a Beneficial Interest, except for
transactions exempt from reporting under the Code of Ethics? (Reporting
requirements include arranging for the Compliance Department to receive,
directly from your broker, duplicate transaction confirmations and duplicate
periodic statements for each brokerage account in which you have, or a member
of your Immediate Family has, a Beneficial Interest, as well as reporting
securities held in certificate form(4). Circle "Yes" if there are no reportable
transactions.)
YES NO (CIRCLE ONE)
C. Do you understand that you are PROHIBITED from owning five percent or more
of any class of security of a registered investment company, and have you so
complied?
YES NO (CIRCLE ONE)
D. Have you notified the Compliance Department if you have been arrested,
arraigned, indicted, or have plead no contest to any criminal offense, or been
named as a defendant in any Investment-Related civil
[FN]
(1) All definitions used in this questionnaire have the same meaning as those in
the Code of Ethics.
(2) Non-Access Personas and Independent Fund Directors of the Strong Funds must
complete a separate questionnaire.
(3) Security, as defined, does NOT include open-end investment companies,
including the Strong Funds.
(4) Please contact Kelly Zeroth if you are uncertain as to what confirmations
and statements you have arranged for the Compliance Department to receive.
</FN>
20
<PAGE>
proceedings, or administrative or disciplinary action? (Circle "Yes" if you
have not been arrested, arraigned, etc.)
YES NO (CIRCLE ONE)
E. Have you complied with the Code of Ethics in all other respects,
including the gift policy?
YES NO (CIRCLE ONE)
LIST ON THE ATTACHMENT ALL REPORTABLE GIFTS(5) GIVEN OR RECEIVED FOR THE YEAR
SEPTEMBER 1, 1998, THROUGH AUGUST 31, 1999, NOTING THE MONTH, "COUNTERPARTY,"
GIFT DESCRIPTION, AND ESTIMATED VALUE.
III. Have you complied in all respects with the Insider Trading Policy
dated January 1, 1999?
YES NO (CIRCLE ONE)
ANSWERS OF "NO" TO ANY OF THE QUESTIONS IN SECTIONS II AND III MUST BE
EXPLAINED ON THE "ATTACHMENT" ON PAGE 3.
IV. Disclosure of directorships statement
A. Are you, or is any member of your Immediate Family, a director of any
for-profit, privately held companies(6)? (If "Yes," please list on the
Attachment each company for which you are, or a member of your Immediate Family
is, a director.)
YES NO (CIRCLE ONE)
B. If the response to IV.A. is "Yes," do you have knowledge that any of the
companies for which you are, or a member of your Immediate Family is, a
director will go public or be acquired within the next 12 months? (If the
answer is "YES," please be prepared to discuss this matter with a member of the
Compliance Department in the near future.)
YES NO (CIRCLE ONE)
I hereby represent that, to the best of my knowledge, the foregoing responses
are true and complete. I understand that any untrue or incomplete response may
be subject to disciplinary action by the firm.
___________________________________________
Access Person Signature
___________________________________________ ___________________________________
Print Name Date
[FN]
(5) Associates are NOT required to report the following: (I) usual and
customary promotional items given to or received from vendors, (ii) items
donated to charity (through Legal), or (iii) food items consumed on the
premises. Entertainment - i.e., a meal or activity with the vendor
present - does not have to be reported.
(6) Per Section III.F. of the Code of Ethics, no Access Person, other than an
Independent Fund Director, may serve on the board of directors of a PUBLICLY
HELD company.
</FN>
21
<PAGE>
ATTACHMENT TO
ANNUAL CODE OF ETHICS QUESTIONNAIRE
PLEASE EXPLAIN ALL "NO" RESPONSES TO QUESTIONS IN SECTIONS II AND III:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
PLEASE LIST EACH COMPANY FOR WHICH YOU ARE, OR A MEMBER OR YOUR IMMEDIATE
FAMILY IS, A DIRECTOR (SECTION IV):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________________________________________________
GIFTS FOR THE YEAR SEPTEMBER 1, 1998, THROUGH AUGUST 31, 1999:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MONTH GIFT GIVER / RECEIVER GIFT DESCRIPTION ESTIMATED VALUE
----------------- --------------------- ----------------- -----------------
</TABLE>
1.
_______________________________________________________________________________
2.
________________________________________________________________________________
3.
________________________________________________________________________________
4.
________________________________________________________________________________
5.
________________________________________________________________________________
6.
________________________________________________________________________________
7.
________________________________________________________________________________
8.
________________________________________________________________________________
9.
________________________________________________________________________________
10.
________________________________________________________________________________
(CONTINUE ON AN ADDITIONAL SHEET IF NECESSARY.)
22
<PAGE>
Appendix 7
LIST OF BROAD-BASED INDICES
Listed below are the broad-based indices as designated by the Compliance
Department. See Section II.B.2.e. for additional information.
<TABLE>
<CAPTION>
<S> <C> <C>
DESCRIPTION OF OPTION SYMBOL EXCHANGE
------------------------------ ------------ ----------
Computer Technology XCI AMEX
------------------------------ ------------ ----------
Eurotop 100 ERT AMEX
------------------------------ ------------ ----------
Biotechnology Index BTK AMEX
------------------------------ ------------ ----------
Gold / Silver Index * AUX PHLX
------------------------------ ------------ ----------
Hong Kong Option Index HKO AMEX
------------------------------ ------------ ----------
Inter@ctive Wk. Internet Index INX CBOE
------------------------------ ------------ ----------
Japan Index JPN AMEX
------------------------------ ------------ ----------
Major Market Index * XMI AMEX
------------------------------ ------------ ----------
Morgan Stanley High Tech Index MSH AMEX
------------------------------ ------------ ----------
NASDAQ-100 NDX CBOE
------------------------------ ------------ ----------
Oil Service Sector Index OSX PHLX
------------------------------ ------------ ----------
Pacific High Tech Index XPI PSE
------------------------------ ------------ ----------
Russell 2000 * RUT CBOE
------------------------------ ------------ ----------
Semiconductor Sector SOX PHLX
------------------------------ ------------ ----------
S & P 100 * OEX CBOE
------------------------------ ------------ ----------
S & P 400 Midcap Index * MID CBOE
------------------------------ ------------ ----------
S & P 500 * SPX CBOE
------------------------------ ------------ ----------
Technology Index TXX CBOE
------------------------------ ------------ ----------
Value Line Index * VLE PHLX
------------------------------ ------------ ----------
Wilshire Small Cap Index WSX PSE
------------------------------ ------------ ----------
* Includes LEAPs
------------------------------ ------------ ----------
</TABLE>
23
<PAGE>
Appendix 8
GIFT POLICY
The gift policy of Strong Capital Management, Inc., Strong Investments, Inc.
and Flint Prairie, L. L. C. covers both GIVING GIFTS TO and ACCEPTING GIFTS
FROM clients, brokers, persons with whom we do business or others
(collectively, "vendors"). It is based on the applicable requirements of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
("NASD") and is included as part of the firm's Codes of Ethics.
Under our policy, associates may not give gifts to or accept gifts from
vendors with a value in excess of $100 PER PERSON PER YEAR and must report to
the firm annually if they accept certain types of gifts. The NASD defines a
"gift" to include any kind of gratuity. Since giving or receiving any gifts in
a business setting may give rise to an appearance of impropriety or may raise a
potential conflict of interest, we are relying on your professional attitude
and good judgment to ensure that our policy is observed to the fullest extent
possible. The discussion below is designed to assist you in this regard.
Questions regarding the appropriateness of any gift should be directed to
the Legal/Compliance Department.
1. GIFTS GIVEN BY ASSOCIATES
Under applicable NASD rules, an associate may not give any gift with a
value in excess of $100 per year to any person associated with a securities or
financial organization, including exchanges, broker-dealers, commodity firms,
the news media, or clients of the firm. Please note, however, that the firm
may not take a tax deduction for any gift with a value exceeding $25.
This memorandum is not intended to authorize any associate to give a gift
to a vendor -- appropriate supervisory approval must be obtained before giving
any gifts.
2. GIFTS ACCEPTED BY ASSOCIATES
On occasion, because of their position within the firm, associates may be
offered, or may receive without notice, gifts from vendors. Associates may not
accept any gift or form of entertainment from vendors (E.G., tickets to the
theater or a sporting event where the vendor does not accompany the associate)
other than gifts of NOMINAL VALUE, which the NASD defines as under $100 in
total from any vendor in any year (managers may, if they deem it appropriate
for their department, adopt a lower dollar ceiling). Any gift accepted by an
associate must be reported to the firm, subject to certain exceptions (see
heading 4 below). In addition, note that our gift policy does not apply to
normal and customary business entertainment or to personal gifts (see heading 3
below).
Associates may not accept a gift of cash or a cash equivalent (E.G., gift
certificates) in ANY amount, and under no circumstances may an associate
solicit a gift from a vendor.
Associates may wish to have gifts from vendors donated to charity,
particularly where it might be awkward or impolite for an associate to decline
a gift not permitted by our policy. In such
24
<PAGE>
case, the gift should be forwarded to Legal, who will arrange for it to be
donated to charity. Similarly, associates may wish to suggest to vendors that,
in lieu of an annual gift, the vendors make a donation to charity. In either
situation discussed in this paragraph, an associate would not need to report
the gift to the firm (see heading 4 below).
3. EXCLUSION FOR BUSINESS ENTERTAINMENT/PERSONAL GIFTS
Our gift policy does not apply to normal and customary business meals and
entertainment with vendors. For example, if an associate has a business meal
and attends a sporting event or show with a vendor, that activity would not be
subject to our gift policy, provided the vendor is present. If, on the other
hand, a vendor gives an associate tickets to a sporting event and the associate
attends the event without the vendor also being present, the tickets would be
subject to the dollar limitation and reporting requirements of our gift policy.
Under no circumstances may associates accept business entertainment that is
extraordinary or extravagant in nature.
In addition, our gift policy does not apply to usual and customary gifts
given to or received from vendors based on a personal relationship (E.G., gifts
between an associate and a vendor where the vendor is a family member or
personal friend).
4. REPORTING
The NASD requires gifts to be reported to the firm. Except as noted
below, associates must report annually all gifts given to or accepted from
vendors (Legal will distribute the appropriate reporting form to associates).
Associates are NOT required to report the following: (i) usual and
customary promotional items given to or received from vendors (E.G., hats,
pens, T-shirts, and similar items marked with a firm's logo), (ii) items
donated to charity through Legal, or (iii) food items consumed on the firm's
premises (E.G., candy, popcorn, etc.).
January 1, 1999
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Appendix 9
INSIDER TRADING POLICY AND PROCEDURES
DESIGNED TO DETECT AND PREVENT INSIDER TRADING
A. POLICY STATEMENT.
1. INTRODUCTION. Strong Capital Management, Inc., Strong Investments,
Inc., Heritage Reserve Development Corporation, Flint Prairie, L. L. C. and
such other companies which adopt these Policies and Procedures (all of the
foregoing entities are collectively referred to herein as "Strong") seek to
foster a reputation for integrity and professionalism. That reputation is a
vital business asset. The confidence and trust placed in Strong by clients is
something we should value and endeavor to protect. To further that goal, the
Policy Statement implements procedures to deter the misuse of material,
nonpublic information in securities transactions.
2. PROHIBITIONS. Accordingly, associates are prohibited from trading,
either personally or on behalf of others (including advisory clients), on
material, nonpublic information or communicating material, nonpublic
information to others in violation of the law. This conduct is frequently
referred to as "insider trading." This policy applies to every associate and
extends to activities within and outside their duties at Strong. Any questions
regarding this policy should be referred to the Compliance Department.
3. GENERAL SANCTIONS. Trading securities while in possession of
material, nonpublic information or improperly communicating that information to
others may expose you to stringent penalties. Criminal sanctions may include a
fine of up to $1,000,000 and/or ten years imprisonment. The SEC can recover
the profits gained or losses avoided through the violative trading, a penalty
of up to three times the illicit windfall and an order permanently barring you
from the securities industry. Finally, you may be sued by investors seeking to
recover damages for insider trading violations.
4. INSIDER TRADING DEFINED. The term "insider trading" is not defined
in the federal securities laws, but generally is used to refer to the use of
material, nonpublic information to trade in securities (whether or not one is
an "insider") or to communications of material, nonpublic information to
others. While the law concerning insider trading is not static, it is
currently understood that the law generally prohibits:
a. trading by an insider, while in possession of material, nonpublic
information;
b. trading by a non-insider, while in possession of material,
nonpublic information, where the information either was disclosed to the
non-insider in violation of an insider's duty to keep it confidential or was
misappropriated;
c. recommending the purchase or sale of securities on the basis of
material, nonpublic information;
d. communicating material, nonpublic information to others; or
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e. providing substantial assistance to someone who is engaged in any
of the above activities.
The elements of insider trading and the penalties for such unlawful
conduct are described below. Any associate who, after reviewing these Policies
and Procedures has any question regarding insider trading should consult with
the Compliance Department. Often, a single question can forestall disciplinary
action or complex legal problems.
5. TENDER OFFERS. Tender offers represent a particular concern in the
law of insider trading for two reasons. First, tender offer activity often
produces extraordinary gyrations in the price of the target company's
securities. Trading during this time period is more likely to attract
regulatory attention (and produces a disproportionate percentage of insider
trading cases). Second, the SEC has adopted a rule which expressly forbids
trading and "tipping" while in possession of material, nonpublic information
regarding a tender offer received from the tender offeror, the target company
or anyone acting on behalf of either. Associates should exercise particular
caution any time they become aware of nonpublic information relating to a
tender offer.
6. CONTACT THE COMPLIANCE DEPARTMENT. To protect yourself, our
clients, and Strong, you should contact the Compliance Department immediately
if you believe that you may have received material, nonpublic information.
B. PROCEDURES DESIGNED TO DETECT AND PREVENT INSIDER TRADING. The
following procedures have been established to aid Strong and all associates in
avoiding insider trading, and to aid Strong in preventing, detecting, and
imposing sanctions against insider trading. Every associate must follow these
procedures or risk serious sanctions, including dismissal, substantial personal
liability and criminal penalties. Any questions about these procedures should
be directed to the Compliance Department.
1. INITIAL QUESTIONS. Before trading in the Securities of a company
about which an associate may have potential inside information, an associate,
whether trading for himself or herself or others, should ask himself or herself
the following questions:
a. IS THE INFORMATION MATERIAL? Is this information that an investor
would consider important in making his or her investment decisions? Is this
information that would substantially affect the market price of the securities
if generally disclosed?
b. IS THE INFORMATION NONPUBLIC? To whom has this information been
provided? Has the information been effectively communicated to the market
place by being published in Reuters, THE WALL STREET JOURNAL or other
publications of general circulation?
2. MATERIAL AND NONPUBLIC INFORMATION. If, after consideration of the
above, any associate believes that the information is material and nonpublic,
or if an associate has questions as to whether the information is material and
nonpublic, he or she should take the following steps:
a. Report the matter immediately to the Compliance Department.
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b. Do not purchase or sell the Securities either on the associate's
own behalf or on the behalf of others.
c. Do not communicate the information to anyone, other than to the
Compliance Department.
d. After the Compliance Department has reviewed the issue, the
associate will be instructed to continue the prohibitions against trading and
communication, or he or she will be allowed to trade and communicate the
information.
3. CONFIDENTIALITY. Information in an associate's possession that is
identified as material and nonpublic may not be communicated to anyone, include
persons within Strong, except as otherwise provided herein. In addition, care
should be taken so that such information is secure. For example, files
containing material, nonpublic information should be sealed, access to computer
files containing material, nonpublic information should be restricted and
conversations containing such information, if appropriate at all, should be
conducted in private (for example, not by cellular telephone to avoid potential
interception).
4. ASSISTANCE OF THE COMPLIANCE DEPARTMENT. If, after consideration
of the items set forth in Section B.2., doubt remains as to whether information
is material or nonpublic, or if there is any unresolved question as to the
applicability or interpretation of the foregoing procedures, or as to the
propriety of any action, it must be discussed with the Compliance Department
before trading or communicating the information to anyone.
5. REPORTING REQUIREMENT. In accordance with Strong's Code of Ethics,
every associate must arrange for the Compliance Department to receive directly
from the broker, dealer, or bank in question, duplicate copies of each
confirmation for each Securities Transaction and periodic statement for each
brokerage account in which such associate has a beneficial interest.
C. INSIDER TRADING EXPLANATIONS.
1. WHO IS AN INSIDER? The concept of "insider" is broad. It includes
officers, directors and associates of a company. In addition, a person can be
a "temporary insider" if he or she enters into a special confidential
relationship in the conduct of a company's affairs and as a result is given
access to information solely for the company's purposes. A temporary insider
can include, among others, a company's attorneys, accountants, consultants,
bank lending officers and the associates of such organizations. In addition,
Strong may become a temporary insider. According to the United States Supreme
Court, the company must expect the outsider to keep the disclosed nonpublic
information confidential, and the relationship must at least imply such a duty
before the outsider will be considered an insider.
2. WHAT IS MATERIAL INFORMATION? Trading on inside information is not
a basis for liability unless the information is material. "Material
information" generally is defined as information for which there is a
substantial likelihood that a reasonable investor would consider it important
in making his or her investment decisions, or information that is reasonably
certain to have a substantial effect on the price of a company's securities.
It need not be important that it would have changed the investor's decision to
buy or sell. No simple "bright line" test exists to
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determine when information is material; assessments of materiality involve a
highly fact-specific inquiry. For this reason, you should direct any question
about whether information is material to the Compliance Department.
Material information often relates to a company's results and
operations including, for example, dividend changes, earnings results, changes
in previously released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation problems and
extraordinary management developments.
Material information also may relate to the market for a company's
securities. Information about a significant order to purchase or sell
securities may, in some contexts, be deemed material.
Material information does not have to relate to a company's business.
For example, in CARPENTER V. U.S., 108 U.S. 316 (1987), the United States
Supreme Court considered as material certain information about the contents of
a forthcoming newspaper column that was expected to affect the market price of
a security. In that case, a Wall Street Journal reporter was found criminally
liable for disclosing to others the dates that reports on various companies
would appear in THE WALL STREET JOURNAL and whether those reports would be
favorable or unfavorable.
3. WHAT IS NONPUBLIC INFORMATION? Information is nonpublic until it
has been effectively disseminated broadly to investors in the market place.
One must be able to point to some fact to show that the information is
generally public. For example, information found in a report filed with the
SEC, or appearing in Dow Jones, Reuters Economic Services, THE WALL STREET
JOURNAL, or other publications of general circulation would be considered
public.
4. WHAT ARE THE PENALTIES FOR INSIDER TRADING? Penalties for trading
on or communicating material, nonpublic information are severe, both for
individuals involved in such unlawful conduct and their employers. A person
can be subject to some or all of the penalties below even if he or she does not
personally benefit from the violation. Penalties include: (a) civil
injunctions; (b) treble damages; (c) disgorgement of profits; (d) jail
sentences; (e) fines for the person who committed the violation of up to three
times the profit gained or loss avoided, whether or not the person actually
benefited; and (f) fines for the employer or other controlling person of up to
the greater of $1,000,000 or three times the amount of the profit gained or
loss avoided.
In addition to the foregoing, any violation of this Policy with
Respect to Insider Trading can be expected to result in serious sanctions,
including dismissal of the person or persons involved.
January 1, 1999
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Appendix 10
ELECTRONIC TRADING AUTHORIZATION FORM
Authorization has been granted to _____________________________("Access Person")
to open an Electronic Trading Account(1) at _________________("Brokerage Firm").
As a condition of approval, the Access Person agrees to the following
requirements, relating to all Securities Transactions:
1. All Securities Transactions as defined in the Code of Ethics, except those
specifically exempt, must be precleared by the Compliance Department;
2. All Securities Transactions will be placed and executed by the close of the
SAME trading day that the authorization is granted, otherwise the
authorization will expire. This includes Limit Orders. There will be no
open "until filled" orders;
3. The Access Person will provide the Compliance Department with documentation
from the Internet Site that shows when the order was placed and executed.
4. The Access Person will arrange for the Compliance Department to receive
directly from the Electronic Trading Firm, duplicate copies of each
confirmation for each Securities Transaction and periodic statements for
each brokerage account in which the Access Person has a Beneficial Interest.
THE ACCESS PERSON MAY NOT PLACE TRADES ON HIS OR HER OWN BEHALF UNTIL THESE
ARRANGEMENTS HAVE BEEN MADE.
5. The Access Person will comply with the Code of Ethics in all other respects.
I hereby agree to the terms and conditions stated above. Any abuse of this
privilege may result in disciplinary action by the firm.
_______________________________________________ __________________________
Access Person Date
AUTHORIZATION
___________________________________________ __________________________________
Director of Compliance (or designee) Date
[FN]
(1) Electronic Trading Account includes brokerage accounts where Securities
Transactions are placed electronically via the Internet or the telephone.
</FN>
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Appendix 11
TO: ALL ACCESS PERSONS
FROM: Director of Compliance
Subject: Social Security Number/Tax ID Information
Strong's Code of Ethics requires the Compliance Department to monitor the
personal investing activity of Access Persons, including investments in mutual
funds. To assist in this, we ask that you please provide your Social Security
Number, as well as the SSN of each member of your "IMMEDIATE FAMILY". In
addition, please list all accounts in which you may have a "BENEFICIAL
INTEREST".
(Please refer to your copy of the Code of Ethics for a definition of the
underlined words.)
Please complete this form return it to the Director of Compliance at your
earliest convenience. Thank you for your cooperation.
________________________________________________________________________
(Print Name) (SSN/TIN)
________________________________________________________________________
(Print Name) (SSN/TIN)
________________________________________________________________________
(Print Name) (SSN/TIN)
________________________________________________________________________
(Print Name) (SSN/TIN)
________________________________________________________________________
(Print Name) (SSN/TIN)
________________________________________________________________________
(Print Name) (SSN/TIN)
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