CODE OF ETHICS
FOR NON-ACCESS PERSONS OF
STRONG CAPITAL MANAGEMENT, INC.,
STRONG INVESTMENTS, INC.,
HERITAGE RESERVE DEVELOPMENT
CORPORATION, INC.
AND FLINT PRAIRIE, L. L. C.
[Strong Logo]
STRONG CAPITAL MANAGEMENT, INC.
November 9, 2000
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CODE OF ETHICS
For Non-Access Persons of
Strong Capital Management, Inc.,
Strong Investments, Inc.,
Heritage Reserve Development Corporation, Inc.
and Flint Prairie, L. L. C.
Dated November 9, 2000
TABLE OF CONTENTS
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I. INTRODUCTION.........................................................................................1
A. Fiduciary Duty....................................................................................1
1. Place the interests of 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 reporting requirements.....................................................1
B. Appendices to the Code............................................................................1
1. Definitions....................................................................................1
2. Acknowledgment of Receipt of Code of Ethics....................................................1
3. Annual Code of Ethics Questionnaire............................................................2
4. Gift Policy....................................................................................2
5. Insider Trading Policy.........................................................................2
II. TRADE REPORTING REQUIREMENTS........................................................................2
A. Reporting Requirements...........................................................................2
B. Disclaimers......................................................................................2
C. Availability of Reports..........................................................................2
D. Record Retention.................................................................................2
III. FIDUCIARY DUTIES....................................................................................3
A. Confidentiality..................................................................................3
B. Gifts............................................................................................3
1. Accepting Gifts...............................................................................3
2. Solicitation of Gifts.........................................................................3
3. Giving Gifts..................................................................................3
C. Payments to Advisory Clients or Shareholders.....................................................3
D. Corporate Opportunities..........................................................................3
E. Service as a Director............................................................................3
F. Involvement in Criminal Matters or Investment-Related Civil Proceedings..........................3
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TABLE OF CONTENTS (CONTINUED)
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IV. COMPLIANCE WITH THIS CODE OF ETHICS..................................................................4
A. Code of Ethics Review Committee...................................................................4
1. Membership, Voting, and Quorum.................................................................4
2. Investigating Violations of the Code...........................................................4
B. Remedies..........................................................................................4
1. Sanctions......................................................................................4
2. Sole Authority.................................................................................4
3. Review.........................................................................................4
C. Compliance Certification..........................................................................5
D. Inquiries Regarding the Code......................................................................5
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CODE OF ETHICS
For Non-Access Persons of
Strong Capital Management, Inc.,
Strong Investments, Inc.,
Heritage Reserve Development Corporation, Inc.
and Flint Prairie, L. L. C.
Dated November 9, 2000
TABLE OF APPENDICES
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Appendix 1 (Definitions).............................................................................6
Appendix 2 (Acknowledgment of Receipt of Code of Ethics).............................................8
Appendix 3 (Annual Code of Ethics Questionnaire).....................................................9
Appendix 4 (Gift Policy)............................................................................13
Appendix 5 (Insider Trading Policy).................................................................15
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17
CODE OF ETHICS
For Non-Access Persons of
Strong Capital Management, Inc.,
Strong Investments, Inc.,
Heritage Reserve Development Corporation, Inc.
and Flint Prairie, L. L. C.
Dated November 9, 2000
I. INTRODUCTION1
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. ("SII"), and Flint Prairie, L. L. C. ("Flint Prairie")
and such other affiliated entities of the foregoing that may from time to time
adopt this Code (each of which is individually referred to herein as a
"Company") have a fiduciary duty to place the interests of clients ahead of
their own. Associates must avoid activities, interests and relationships that
might interfere with making decisions in the best interests of each Company and
its clients.
As fiduciaries, associates must at all times:
1. PLACE THE INTERESTS OF CLIENTS FIRST. Associates must scrupulously
avoid serving their own personal interests ahead of the interests of the
clients of each Company. AN ASSOCIATE 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 CLIENT.
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, SII, Flint Prairie or their clients
could call into question the exercise of an associate's independent
judgment. Associates 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 REPORTING REQUIREMENTS. Doubtful situations should
be resolved in favor of clients and each Company. Technical compliance with
the Code's procedures will not automatically insulate from scrutiny any
trades that may indicate an abuse of fiduciary duties.
a. Associates are prohibited from purchasing any Securities in an
initial public offering (IPO).
b. Associates are prohibited from any transactions in a Security
while in possession of material non-public information regarding
the Security or the issuer of the Security (see Insider Trading
Policy, Appendix 5).
c. Associates are prohibited from transactions intended to raise,
lower, or maintain the price of any Security or to create a false
appearance of active trading.
1 Capitalized words are defined in Appendix 1.
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 (Appendix 1),
2. ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS (Appendix 2),
3. ANNUAL CODE OF ETHICS QUESTIONNAIRE (Appendix 3),
4. GIFT POLICY (Appendix 4), and
5. INSIDER TRADING POLICY (Appendix 5).
II. TRADE REPORTING REQUIREMENTS
A. REPORTING REQUIREMENT. EVERY ASSOCIATE AND MEMBERS OF HIS OR HER
IMMEDIATE FAMILY 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 ASSOCIATE 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 Compliance Department will send a letter to each
brokerage firm based on the information provided by the Non-Access Person in
Appendix 2.
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
SECURITY, (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
ASSOCIATE'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.
B. 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.
C. 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 associate's department manager (or designee); any
party to which any investigation is referred by any of the foregoing, the SEC,
any self-regulatory organization of which the Strong Funds, SCM, SII 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, SII or Flint Prairie.
D. RECORD RETENTION. The Company shall keep and maintain for at least six
years records of the procedures it follows in connection with the reporting
requirements of this Code.
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.
III. FIDUCIARY DUTIES
A. CONFIDENTIALITY. Associates 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, SII and Flint Prairie.
1. ACCEPTING GIFTS. On occasion, because of their position with
the Company and its affiliates, associates thereof may be offered, or
may receive without notice, gifts from clients, brokers, vendors or
other persons not affiliated with the Company. 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 the Company. 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 4) 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 may not solicit gifts or
gratuities.
3. GIVING GIFTS. Associates 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 Company.
Please see the Gift Policy (Appendix 4) for additional information.
C. PAYMENTS TO ADVISORY CLIENTS OR SHAREHOLDER. Associates may not make any
payments to Advisory Clients or Shareholders in order to resolve any type of
Advisory Client or Shareholder complaint. All such matters must be handled by
the Legal Department.
D. CORPORATE OPPORTUNITIES. Associates may not take personal advantage of
any opportunity properly belonging to any client or Company.
E. SERVICE AS A DIRECTOR. No associate may serve on the board of directors
of a publicly-held company not affiliated with the Company or the Strong Funds
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 associate be isolated through "Chinese Wall" or other
procedures from those making investment decisions related to the issuer on whose
board the associate sits.
F. INVOLVEMENT IN CRIMINAL MATTERS OR INVESTMENT-RELATED CIVIL PROCEEDINGS.
Each Non-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 of the Code by an associate of SCM, SII 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, SII 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;
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 associate 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), impose a fine, civil referral to the SEC, criminal
referral, and termination of employment for cause. The Code of Ethics
Review Committee may also require the associate 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.
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 monies 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 associate 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 SII (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, SII and the Strong Funds may modify such
sanctions as they deem appropriate. 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. COMPLIANCE CERTIFICATION. At least annually, all associates will be
required to certify on the Annual Code of Ethics Questionnaire set forth in
Appendix 3, or on a document substantially in the form of Appendix 3, that they
have complied with the Code in all respects.
D. INQUIRIES REGARDING THE CODE. The Compliance Department will answer any
questions about this Code or any other compliance-related matters.
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Appendix 1
DEFINITIONS
"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 associate 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 associate 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.
"COMPANY" means "SCM", "SII", "Flint Prairie" and such other affiliated
entities of the foregoing that may from time to time adopt this Code.
"CODE" means this Code of Ethics.
"COMPLIANCE DEPARTMENT" means the designated persons in the Strong
Legal/Compliance Department.
"IMMEDIATE FAMILY" of an associate means any of the following persons who
reside in the same household as the associate:
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.
"LEGAL DEPARTMENT" means the SCM Legal/Compliance Department.
"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
associate 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.
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Appendix 2
ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS
I acknowledge that I have received the Code of Ethics dated January 1,
1999, and represent that:
1. In accordance with Section II.A. 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 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
associate'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. I have circled the letter next to the statement(s) that apply to me:
a. I have a Beneficial Interest in Securities that are held in a
brokerage account(s) in my name and/or another name.
b. A member of my Immediate Family has a Beneficial Interest in
Securities that are held in a brokerage account(s).
c. I hold, or a member of my Immediate Family holds, securities in
certificate form.
d. I do not currently have a brokerage account, however, I will
notify the Legal Department prior to opening one.
If items (a) and/or (b) are circled, please provide the following
information:
i. Name and Address of Brokerage Firm /
Account Name / Account Number:
-------------------------------------------
-------------------------------------------
-------------------------------------------
ii. Please note - The Compliance Department will
arrange for duplicate statements and
confirmations for each account to be sent to
Strong Capital Management.
If item (c) is circled, please provide the following information:
i. Company Name / Quantity of Shares Held /
Certificate Owner:
-------------------------------------------
3. I will comply with the Code of Ethics in all other respects.
------------------------------ ------------------------------
Associate Signature Date
----------------------------
Print Name
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CONFIDENTIAL APPENDIX 3
ANNUAL CODE OF ETHICS QUESTIONNAIRE1
For NON-ACCESS PERSONS of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.
and Flint Prairie, L. L. C.
September 27, 2000
Associate: ____________________________ (please print name)
I. Introduction
Non-Access Persons2 are required to answer the following questions FOR THE
YEAR SEPTEMBER 1, 1999, THROUGH AUGUST 31, 2000. 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
FRIDAY, OCTOBER 6TH, to Jane Lisheron in the Compliance Department. All
information provided is kept confidential to the maximum extent possible.
If you have any questions, please contact Jane at extension 7126.
II. Annual certification of compliance with the Code of Ethics
A. 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
Interest3, as well as reporting securities held in certificate form.
Circle "Yes", if there are no reportable transactions.)
YES NO (CIRCLE ONE)
B. Have/will you notify the Compliance Department if you have been
arrested, arraigned, indicted, convicted or have plead no contest to
any criminal offense (misdemeanor and/or felony) or been named as a
defendant in any Investment or Non-Investment Related proceeding, or
administrative or disciplinary action in a domestic, foreign or
military court? (Circle "Yes" if you have not been arrested, arraigned,
etc.)
YES NO (CIRCLE ONE)
C. 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 GIFTS4 GIVEN OR RECEIVED FOR THE
YEAR SEPTEMBER 1, 1999, THROUGH AUGUST 31, 2000, NOTING THE MONTH,
"COUNTERPARTY," GIFT DESCRIPTION AND VALUE.
1 All definitions used in this questionnaire have the same meaning as those in
the Code of Ethics.
2 Access Persons and Independent Fund Directors of the Strong Funds must
complete a separate questionnaire.
3 Please contact Jane Lisheron (x7126) if you are uncertain as to what
confirmations and statements you have arranged for the Compliance Department to
receive.
4 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.
III. Annual certification of compliance with Insider Trading Policy
A. Have you complied in all respects with the Insider Trading Policy
dated October 22, 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
publicly held companies5? (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 you, or any member of your Immediate Family, is a director of any
for profit, privately held companies, do you have knowledge that any of
these companies 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.
---------------------------------------------
Non-Access Person Signature
--------------------------------------------- ------------------------
Print Name Date
5 Per Section III.F. of the Code of Ethics, no associate, other than an
Independent Fund Director, may serve on the board of directors of a PUBLICLY
HELD company.
<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 OF YOUR IMMEDIATE FAMILY
IS, A DIRECTOR (SECTION IV):
-------------------------------------------------------------------------------
GIFTS FOR THE YEAR SEPTEMBER 1, 1999, THROUGH AUGUST 31, 2000:
MONTH GIFT GIVER / RECEIVER GIFT DESCRIPTION ESTIMATED VALUE
----- --------------------- ---------------- ---------------
1._____________________________________________________________________________
2._____________________________________________________________________________
3._____________________________________________________________________________
4._____________________________________________________________________________
5._____________________________________________________________________________
6______________________________________________________________________________
7._____________________________________________________________________________
8._____________________________________________________________________________
9._____________________________________________________________________________
10.____________________________________________________________________________
(CONTINUE ON AN ADDITIONAL SHEET IF NECESSARY.)
<PAGE>
Appendix 4
GIFT POLICY
The gift policy of Strong Capital Management, Inc., Strong Investments,
Inc. and Flint Prairie, L. L. C., which 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 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
<PAGE>
Appendix 5
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
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.
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
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
