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.
November 9, 2000
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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 November 9, 2000
TABLE OF CONTENTS
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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)
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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.................................................................................10
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TABLE OF CONTENTS (CONTINUED)
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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
1. Material.......................................................................................12
2. Diminimus......................................................................................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 November 9, 2000
TABLE OF APPENDICES
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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 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"), 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 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
solely for the purpose of increasing the price of that Security.
2. AVOID TAKING INAPPROPRIATE ADVANTAGE OF THEIR POSITION. The
receipt of investment opportunities, perks 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 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.
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--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 or her 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 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, 30-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, 30-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, or
his/her designee, 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
or her 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, (except in the case of an on-line trade) which will
cause the transaction to be executed. If the brokerage account is an
Electronic Trading Account and the Access Person has completed the
Electronic Trading Authorization Form (Appendix 10), the Access Person will
execute the transaction before the close of trading on the day preclearance
is given 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 or an out-of-the-money limit order;
c. SEVEN DAY BLACKOUT. Purchases or sales of Securities within
seven calendar days of a purchase or sale of the same Securities (or
Equivalent Securities) by an Advisory Client , unless the purchase or
sale is a Program Trade. For example, if an Advisory Client trades in
a Security on day one, day eight is the first day the Access Person
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. 30-DAY BLACKOUT. (1) Sales of a Security within 30 days of the
purchase of the Security (or an Equivalent Security) (2) purchases of
a Security within 30 days of the sale of the Security (or an
Equivalent Security), unless in each case, the Access Person agrees to
give up all profits on the transaction to a charitable organization or
if a loss has been incurred.
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 non-public 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 or her 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 are 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 and after a Private Placement memorandum
is completed. Access Persons who have been authorized to acquire and have
acquired securities in a private placement are required to disclose that
investment to the Compliance Department if 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
or an immediate family member. 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 Department 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 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
SII; 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 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.
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, SII and Flint Prairie:
1. ACCEPTING GIFTS. On occasion, because of their position with
SCM, SII, 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, SII, 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, SII or Flint Prairie
may not solicit gifts or gratuities.
3. GIVING GIFTS. Associates of SCM, SII 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 8) 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, SII or Flint
Prairie. This includes, but is not limited to, acquiring Securities for one's
own account that could otherwise be acquired for an Advisory Client.
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, SII, 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 or similar 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 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; 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), 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 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 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 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 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. EXCEPTIONS TO THE CODE. Although exceptions to the Code will rarely, if
ever, be granted, the General Counsel of SCM or the Director of Compliance may
grant exceptions to the requirements of the Code on a case-by-case basis if he
or she finds that the proposed conduct involves negligible opportunity for
abuse.
1. MATERIAL. All Material exceptions must be in writing, and must be
pre-approved by the counsel to the independent directors for the Strong
Funds 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."
2. DIMINIMUS. Preclearance requests of 500 shares (or less) or less
than $10,000 in Large Capitalization Securities will be blocked only by
pending Advisory Client trades. Refer to Appendix 1 for the definition of
"Large Capitalization Security".
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.
Appendix 1
DEFINITIONS
"ACCESS PERSON" means (1) every director, officer, and general partner of
SCM, SII, the Strong Funds and Flint Prairie; (2) every associate of SCM, SII
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, SII and
Flint Prairie who is involved in making purchase or sale recommendations for an
Advisory Client's account; (4) every associate of SCM, SII and Flint Prairie who
obtains information concerning such recommendations prior to their
dissemination; and (5) such agents of SCM, SII, 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.
"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.
"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 or Director of
Compliance 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.
"LARGE CAPITALIZATION SECURITY" is over 5 billion in market capitalization.
"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 or Director of
Compliance may grant no more than two exceptions per associate per
year that are not subject to reporting to the Strong Funds Board of
Directors. For example, if the General Counsel or Director of
Compliance 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 or Director of Compliance believes there is an issue of
whether a proposed exception is material and subject to reporting, he
or she shall consult with counsel to the independent directors for the
Strong Funds.
"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 an 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 United States 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 member 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 or any derivation thereof.
"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.
<PAGE>
Appendix 2
CONTACT PERSONS
Preclearance Officer
Elizabeth Cohernour, General Counsel
Designees of Preclearance Officer
Thomas A. Hooker, Director of Compliance
Connie Wick
Susan Hollister
Jane Lisheron
Compliance Department
Thomas A. Hooker, Director of Compliance
Jane Lisheron
Kerry Laurin
Code of Ethics Review Committee
Elizabeth Cohernour, General Counsel
Thomas A. Hooker, Director of Compliance
<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.
<TABLE>
<CAPTION>
<S> <C> <C>
(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 _____________________________________________________
</TABLE>
(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
<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.
<PAGE>
31
Appendix 5
Ctrl. No:____________ Associate ID #______________
STRONG CAPITAL MANAGEMENT, INC.
PRECLEARANCE REQUEST FOR ACCESS PERSONS
<TABLE>
<CAPTION>
<S> <C> <C>
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: _________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
5. Check if applicable: Purchase ____ Market Order ____
Sale ____ Limit Order ____ (Limit Order Price: ___________)
Not Held Order ____
</TABLE>
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) is
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
<PAGE>
CONFIDENTIAL APPENDIX 6
ANNUAL CODE OF ETHICS QUESTIONNAIRE1
For ACCESS PERSONS of
The Strong Family of Mutual Funds,
Strong Capital Management, Inc.,
Strong Investments, Inc.
and Flint Prairie, L. L. C.
September 22, 2000
Associate: ____________________________(please print name)
I. Introduction
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
MONDAY, OCTOBER 2ND, 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 OBTAINED PRECLEARANCE for all Securities3 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 form4.
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/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)
1 All definitions used in this questionnaire have the same meaning as those
in the Code of Ethics.
2 Non-Access Persons 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.
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 GIFTS5 GIVEN OR RECEIVED FOR THE
YEAR SEPTEMBER 1, 1999, THROUGH AUGUST 31, 2000, NOTING THE MONTH,
"COUNTERPARTY," GIFT DESCRIPTION, AND ESTIMATED VALUE.
III. 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 companies6? (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 company, 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.
----------------------------
Access Person Signature
---------------------------- ---------------
Print Name Date
4 Please contact Jane Lisheron (x7126) if you are uncertain as to what
confirmations and statements you have arranged for the Compliance
Department to receive.
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.
<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, 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 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
----------------------------------------------------------- ----------------------------- ------------------------
Biotechnology Index BTK AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Computer Technology XCI AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Diamonds DIA,DJD,DXN,DXU, DXV
----------------------------------------------------------- ----------------------------- ------------------------
Eurotop 100 ERT AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Gold / Silver Index * AUX PHLX
----------------------------------------------------------- ----------------------------- ------------------------
Hong Kong Option Index HKO AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Inter@ctive Wk. Internet Index INX CBOE
----------------------------------------------------------- ----------------------------- ------------------------
I-Shares Various AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Japan Index JPN AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Major Market Index * XMI AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Morgan Stanley High Tech Index MSH AMEX
----------------------------------------------------------- ----------------------------- ------------------------
NASDAQ-100 NDX, QQQ 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, MDY CBOE
----------------------------------------------------------- ----------------------------- ------------------------
S & P 500 * SPX CBOE
----------------------------------------------------------- ----------------------------- ------------------------
S&P 1500 SPR CBOE
----------------------------------------------------------- ----------------------------- ------------------------
SPDRS Various AMEX
----------------------------------------------------------- ----------------------------- ------------------------
Technology Index TXX CBOE
----------------------------------------------------------- ----------------------------- ------------------------
Value Line Index * VLE PHLX
----------------------------------------------------------- ----------------------------- ------------------------
Wilshire Small Cap Index WSX PSE
----------------------------------------------------------- ----------------------------- ------------------------
----------------------------------------------------------- ----------------------------- ------------------------
* Includes LEAPs
----------------------------------------------------------- ----------------------------- ------------------------
</TABLE>
<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 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 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
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
<PAGE>
Appendix 10
ELECTRONIC TRADING AUTHORIZATION FORM
Authorization has been granted to ____________________________ ("Access Person")
to open an Electronic Trading Account1 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
1 Electronic Trading Account includes brokerage accounts where Securities
Transactions are placed electronically via the Internet or the telephone.
<PAGE>
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 and 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)
