ARK ASSET MANAGEMENT CO., INC.
CODE OF ETHICS
January 1, 2000
I. Statement of General Principles
Ark Asset Management Co., Inc. ("Ark" or the "Firm") holds its
employees to a high standard of integrity and business practice. In serving its
clients, the Firm strives to avoid conflicts of interest or the appearance of
conflicts in connection with the securities transactions of the Firm and its
employees. This Code of Ethics (the "Code") is intended to serve as a guide to
administering and overseeing procedures relating to the personal trading
practices of the Firm's personnel (and certain entities in which such persons
have an interest) in accordance with the Investment Advisers Act of 1940
("Advisers Act") and the Investment Company Act of 1940 ("1940 Act") as each
relates to the Firm's investment advisory business.
Ark is an investment adviser registered under the Advisers Act and
provides investment advice to its clients, which include corporate and
multi-employer pension plans, charitable trusts and foundations, corporations,
investment companies registered under the 1940 Act and others. Consistent with
Rule 17j-1 of the 1940 Act and Section 204A of the Advisers Act, Ark has adopted
this Code of Ethics which contains provisions reasonably necessary to prevent
the Firm's employees from engaging in any act, practice, or course of business
that would defraud or mislead any of its clients, or that would constitute a
manipulative practice.
II. Applicability
This Code of Ethics applies to all employees of Ark, as well as to
Ark's directors and officers, and as set forth herein, to certain entities in
which such persons have a "beneficial interest" (as defined below). For purposes
of this Code the term "employee" includes, but is not limited to, persons who,
in the course of their regular functions or duties, participate in the process
of purchasing or selling securities, or participate in making recommendations or
obtaining information with respect to the purchase or sale of securities, on
behalf of any of the Firm's clients, including investment companies. A
Compliance Officer shall mean either Lauri London, Jay Mermelstein, or Lalaine
Gines.
III. Definitions
A. An "approved trade" is a trade for which an employee has received
prior approval pursuant to the procedures described in this Code.
B. A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and/or, with respect to the person making the
recommendation, when such person considers making the recommendation.1
C. An employee will be deemed to have a "beneficial interest" in a
security or in an account in which the employee, his or her spouse,
minor child or relative who shares the same household as the employee
has a direct or indirect economic or pecuniary interest, and/or an
account over which the employee exercises trading discretion or
otherwise exercises control (collectively, an "Investment Account").
D. A "Firm trade" is a transaction in a security in which the Firm has
entered orders for one or more clients, for the Ark Asset North Star
Fund I, LLC ("North Star Fund") or for the Ark Asset Management Co.,
Inc. Retirement Plan (the "Plan").
E. "Security" means any stocks, bonds, notes, debentures and any interest
commonly known as a security, including options, warrants and rights
to purchase or sell securities, and options on and futures contracts
for securities and securities indices, and any security issued in a
limited offering or initial public offering, other than those
securities set forth in Section VI. A. 1. If an employee is not
certain whether a particular security falls within this Section or
Section VI. A. 1., that employee should consult with a Compliance
Officer.
F. "Initial public offering" means an offering of securities registered
under the Securities Act of 1933, the issuer of which, immediately
before the registration, was not subject to the reporting requirements
of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
G. "Limited offering" means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) or section
4(6) or pursuant to rule 504, rule 505, or rule 506 under the
Securities Act of 1933.
H. "Access Person" means any director or officer of the Firm and any
employee, who, in connection with his or her regular duties or
functions, makes, participates in, obtains information regarding, or
whose functions relate to the making of any recommendation with
respect to, the purchase or sale of a security on behalf of a
registered investment company.
IV. Standards of Conduct
A. Investment-related information learned by an employee during the
course of carrying out Firm-related duties or in communications
between Firm employees is to be kept confidential until or unless
publicly available. Such information may include, but is not limited
to, portfolio-related research activity, brokerage orders being placed
on behalf of a client, and recommendations to purchase or sell
specific securities.
B. Employees may not take or omit to take an action on behalf of a Firm's
client or intentionally induce a Firm's client to take action for the
purpose of achieving a personal benefit.
C. Employees may not use actual knowledge of a client's transactions to
profit by the market effect of the client's transaction.
D. Employees will not take unique investment opportunities which should
be made in the Firm's clients' accounts for accounts in which they
have a beneficial interest.
V. Restrictions on Personal Investment and Related Activities
A. Opening an Account. Each employee who wishes to establish a securities
account, including an Investment Account, must notify and obtain
approval from a Compliance Officer prior to opening such account.
B. General Trading Prohibitions. In general, an employee trade of a
security (including a security in a limited offering) for an
Investment Account will not be approved when (i) that security is
being considered for purchase or sale or is otherwise subject to an
outstanding order, (ii) a Firm trade is being made or will be made in
that security that day, or (iii) during the three business days
following a Firm trade in that security. In addition, if the Ark
Trading Desk otherwise anticipates trading in that security, the trade
may be denied. Except as may be set forth in Section VI., the Firm's
policy is that no employee may buy or sell a security which is part of
an initial public offering for an Investment Account.
C. Trading Approvals. Each employee who wishes to trade Securities in an
Investment Account (other than as described in VI. A. herein) must
notify and obtain prior approval from one of the Firm's Compliance
Officer prior to effecting the trade.
1. Approval is to be requested by submitting a form (in the form of
Exhibit A attached hereto) entitled "Buy or Sell Order for
Employee's Personal Account" to a Compliance Officer and then to
the Firm's Trading Desk.
2. Approvals will be granted at the discretion of a Compliance
Officer and then must also be approved by the Trading Desk. If a
Compliance Officer approves the trade, the Trading Desk will
review the trade, prior to its execution, by reviewing completed
and outstanding orders. The Trading Desk will not approve a trade
in a security if that security (i) has been traded that day or
(ii) is subject to any outstanding orders, unless a Compliance
Officer is aware of such trades or outstanding orders and decides
to approve the trade. If any trade subject to a prohibition in
this Code is approved, a Compliance Officer will document the
reason an exception to the Code was made.
3. All trading approvals must be submitted to the Compliance Officer
on the date of the proposed trade. A trading approval is
effective for one business day only, unless explicitly provided
for otherwise or extended in writing by a Compliance Officer. If
employees do not effect trades by the close of business on the
same day approval is received, they must obtain approval again,
if they wish to trade that Security on a later date.
D. Firm Trade Occurring after Approved Employee Trade. If the Firm enters
an order for a security within 72 hours after an employee has effected
an approved trade, a Compliance Officer will discuss the trade with
the employee and document the employee's reason for making the trade.
Depending on the circumstances, a Compliance Officer may, for example:
1. Break the trade (a) if it appears that the employee may have had
advance information concerning the Firm's trade, or (b) to avoid
the appearance of impropriety; or
2. Allow the trade if circumstances justify such action. If this
option is exercised, a Compliance Officer will write an
explanatory memo to the Firm's files.
E. Post-Trade Monitoring and Recordkeeping. Pursuant to Section VII. B.,
for all Investment Accounts, each employee shall authorize duplicate
confirmations and monthly statements to be sent to a Compliance
Officer. After trading approval of each transaction under this
Section, a Compliance Officer shall cross-reference the confirmation
received with respect to the applicable securities transaction for
which a trading approval was given. Copies of all duplicate
confirmations and statements and Buy or Sell Orders for Employee's
Personal Account (with trading approvals) as well as other records and
reports pursuant to the Code (defined in Section VII. C.), shall be
kept by the Firm for each employee. A Compliance Officer shall review
such records at least annually to determine if there are any trading
patterns or series of transactions which may indicate possible
violations of the Code.
F. Trading by Research Analysts. Subject to Section VI., the Firm's
research analysts and portfolio managers may not trade, for any
account or accounts in which they have a beneficial interest, in any
security they are considering recommending for a Firm Trade. A
Compliance Officer may grant exceptions in advance of trades as deemed
appropriate pursuant to this Code.
G. Outside Directorships. Firm employees may not serve on the boards of
directors of publicly traded companies unless (i) the Firm's board of
directors grants prior authorization, and (ii) a mechanism such as a
"Chinese Wall" is put into place and maintained for the purpose of
preventing the flow of information from the employee serving on the
board to the employees making investment decisions on behalf of the
Firm's clients.
H. Holding Period. Firm employees must hold securities which are subject
to the Code for at least five (5) business days unless otherwise
approved by a Compliance Officer.
VI. Exceptions and Special Provisions
A. The provisions of Section V. and VII. C. are not applicable to:
1. Purchases or sales of securities issued by the Government of the
United States or any state or local government, instrumentality
or agency thereof, bankers' acceptances, bank certificates of
deposit, commercial paper, money market instruments, registered
unit investment trusts (UITs) such as S&P Depositary Receipts
(SPDRs) and options on such securities, or shares of registered
open-end investment companies (mutual funds).
2. Purchases or sales of securities which are non-volitional on the
part of either the employee or the Firm client.
3. Purchases which are part of an automatic dividend reinvestment
plan.
4. Purchases effected pursuant to the exercise of rights issued by
an issuer pro rata to all holders of a class of its securities,
to the extent such rights were acquired from the issuer, and the
subsequent sale of those rights.
B. The following special provisions apply to the North Star Fund, the
Plan, and other investment funds or entities in which an employee of
Ark may be deemed to have a beneficial interest as well as be
responsible for such entities' trading decisions, or have knowledge of
such entities' securities positions or be deemed to control such
entity, as set forth below:
1. Employees of Ark that invest in the North Star Fund will be
deemed to have a beneficial interest in the North Star Fund.
Because of the nature of the Plan, purchases and sales by the
Plan shall not be subject to the Code except as Firm Trades and
as otherwise set forth herein. Except as otherwise provided for
in the Code, purchases or sales of interests in the North Star
Fund will not be subject to the pre-approval requirements of
Section V. but any employee who has an interest in the North Star
Fund (other than an employee making trading decisions on behalf
of the North Star Fund) should report the North Star Fund, and
his interest therein, pursuant to Section VII as an Investment
Account subject to the Code. Employees making trading decisions
on behalf of the North Star Fund must report the North Star Fund
and their interest therein, as well as the North Star Fund's
underlying security holdings, pursuant to Section VII. For
purposes of the Code, employees making trading decisions on
behalf of the North Star Fund are "Access Persons" under the
Code. Purchases and sales for the North Star Fund will be bunched
with orders for Ark's clients whenever appropriate.
2. A Compliance Officer will review all transactions of the North
Star Fund and the Plan monthly. The personal trading done by
employees making trading decisions on behalf of the North Star
Fund (other than with respect to the North Star Fund) is fully
subject to the Code.
3. Purchases or sales of securities made by an employee who makes
trading decisions on behalf on an entity in which he or she has a
beneficial interest, or who has prior knowledge of the trading
decisions and/or securities positions of such entity, or who may
be deemed to control such entity (other than the North Star Fund)
shall be subject to the Code and exceptions to the Code, if any,
will be evaluated and made by a Compliance Officer on a
case-by-case basis.
4. Notwithstanding anything to the contrary contained herein, any
investment by the North Star Fund in a limited offering must be
pre-approved by a Compliance Officer, as set forth in the Code,
prior to such investment being acquired.
5. Because of certain carve-out provisions under applicable rules of
the National Association of Securities Dealers, Inc. governing
initial public offerings, and the nature of the Firm employees
who will be investing in the North Star Fund, purchases and sales
of securities in an initial public offering by the North Star
Fund are not subject to the Code because no employee or Access
Person of the Firm will be deemed to acquire a direct or indirect
beneficial ownership in a security in an initial public offering.
C. A Compliance Officer may exercise discretion to approve a trade and/or
make an exception to this Code if, for example, it appears that:
1. The potential harm to the Firm's clients is remote;
2. The trade is unlikely to affect large capitalization stock or a
highly institutionalized market;
3. The trade is clearly not related economically to securities to be
purchased, sold or held by any of the Firm's clients; and/or
4. At the discretion of a Compliance Officer, a Firm trade is being
made in a security only to size-up or size-down an account (due
to deposits and/or withdrawals), if such a trade is deemed
immaterial considering all relevant facts.
VII. Reporting
A. Upon being hired by the Firm, each employee must submit to a
Compliance Officer (i) an acknowledgment regarding their understanding
of and intent to comply with the Code, (ii) a list of all securities
accounts in which the employee has a beneficial interest (i.e.,
Investment Accounts) and (iii) a representation that the employee will
request that duplicate statements and confirmations be sent to Ark's
General Counsel with regard to such accounts. All Access Persons must
also provide within ten days of either becoming an Access Person or
joining the Firm, current statements providing an initial list of all
securities holdings in which the Access Person has a beneficial
interest. The acknowledgment form for new employees, the initial
holdings report for Access Persons and a form letter to be completed
and signed by the new employee during their orientation session with
Ark's Human Resources Department are attached as Exhibit B hereto.
B. For each Investment Account, an employee must arrange with the
broker-dealer or custodian to have duplicate confirmations and
statements sent to a Compliance Officer. Exhibit B, page 3 is a form
of letter which may be used for such purpose.
C. On an annual basis, each employee must submit to a Compliance Officer
an "Annual Acknowledgment Form", in the Form of Exhibit C hereto. The
Annual Acknowledgment Form includes representations by the employee
regarding compliance with the Code in the previous year, intent to
comply in the current year and provides for the reporting of any
exceptions. All Access Persons must also submit an annual holdings
report by January 31 of each year to reflect securities holdings as of
December 31 of the prior year in the form attached to Exhibit C
hereof.
D. As described in Section V, employees will report on each securities
transaction by submitting their Buy or Sell Orders for Employee's
Personal Account to a Compliance Officer.
E. Any report, confirmation or statement submitted pursuant to this
Section is not to be construed as an admission of beneficial interest
in the security or account to which the item relates.
F. A Compliance Officer will notify each Access Person that such person
is considered an Access Person under the Code and of their reporting
obligations under the Code.
VIII. Sanctions
A. In the event of a failure by any employee to comply with the
provisions of this Code or of applicable securities laws, the General
Counsel and/or the Chief Operating Officer may impose, or recommend
that the Firm's board of directors or other officers impose,
appropriate sanctions, including, among other things, disgorgement to
a charity chosen by Ark of any profits obtained from violations of the
Code and/or dismissal.
B. Consistent with the statement of the Securities and Exchange
Commission in connection with its adoption of Rule 17j-1 of the 1940
Act, violations of this Code are not to be construed as per se
violations of the law.
<PAGE>
EXHIBIT A
BUY OR SELL APPROVAL
FOR ARK EMPLOYEES PERSONAL ACCOUNT
Buy _____ Sell _____
Shares of at
-------------------- ------------------------- --------------
(Amount) (Name of Issue/ Ticker) (Price)
For the following account:
Name of Account:
----------------------------------------------------------
Brokerage Firm:
----------------------------------------------------------
Account Number:
-----------------------------------------------------------
If selling, please indicate date the security was purchased if purchased within
the last thirty days:
-------------
My signature below attests that in placing this order I am not seeking to
capitalize upon or take personal advantage of any investment recommendations,
decisions or programs of Ark Asset Management Co., Inc., and, to the best of my
knowledge and belief, the execution of this order will not have an adverse
effect on any account managed by Ark Asset Management Co., Inc. I have not
received what might be material non-public information on this stock.
_____________________________________
(Signature of Employee)
_____________________________________________
Date
<PAGE>
EXHIBIT B
PAGE 1 OF 4
ARK ASSET MANAGEMENT CO., INC.
CODE OF ETHICS
ACKNOWLEDGMENT FORM FOR NEW EMPLOYEES
1. I certify that I have read and am familiar with Ark Asset Management Co.,
Inc.'s (the "Firm's") Code of Ethics (the "Code").
2. I represent that I will comply with the Code at all times during the
current calendar year, subsequent to the date hereof.
3. I will disclose, report and confirm all holdings and transactions required
to be disclosed, reported or confirmed pursuant to the Code. I will
authorize duplicate statements and confirms with respect to all accounts in
which I have beneficial interests to be sent to a Compliance Officer. I
have forwarded the attached letter to all appropriate parties to authorize
such reporting.
4. All accounts in which I have a beneficial interest, as defined in the Code
(including any and all accounts over which I exercise trading discretion or
otherwise control), are listed below.
5. If any new accounts in which I will have a beneficial interest are opened
in the future, I will notify the Firm and I will authorize duplicate
statements and confirms with respect to such account to be sent to the
Firm.
Name (print):__________________________________________
Position:______________________________________________
Signature:_____________________________________________
Date:__________________________________________________
<PAGE>
EXHIBIT B
PAGE 2 OF 4
List of all accounts in which has a beneficial interest
---------------------
name
as of . (Attach additional sheets, if necessary)
-------------------
date
Account Title:
-------------------------------------------------
Broker Dealer:
----------------------------------------------------
Account Number:
---------------------------------------------
Date Established:
-------------------------------------------
Account Title:
-------------------------------------------------
Broker Dealer:
---------------------------------------------------
Account Number:
------------------------------------------------------
Date Established:
-------------------------------------------
Account Title:
-------------------------------------------------
Broker Dealer:
---------------------------------------------------
Account Number:
------------------------------------------------------
Date Established:
-------------------------------------------
<PAGE>
EXHIBIT B
PAGE 3 OF 4
INITIAL HOLDINGS REPORT
FOR ALL ACCESS PERSONS
List of all holdings in which has a beneficial interest
------------------------
name
as of . (Attach additional sheets, if necessary)
-------------------
date
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
<PAGE>
EXHIBIT B
PAGE 4 OF 4
Name of Contact
------------------------------------
Name of Firm
------------------------------------------------
Address/Fax Number
------------------------------------------
This letter shall provide authorization for you to send duplicate account
statements and duplicate trade confirmations for all activity in the accounts
below to:
Ark Asset Management Co., Inc.
125 Broad Street
New York, NY 10004
Attention : General Counsel
Sincerely,
_______________________________________
Name:
_________________________________________
Name of Account
_________________________________________
Account Number
_________________________________________
Name of Account
_________________________________________
Account Number
_________________________________________
Name of Account
_________________________________________
Account Number
<PAGE>
EXHIBIT C
PAGE 1 OF 3
ARK ASSET MANAGEMENT CO., INC.
CODE OF ETHICS
ANNUAL ACKNOWLEDGMENT FORM
Unless otherwise noted below:
1. I certify that I have read and am familiar with Ark Asset Management Co.,
Inc.'s (the "Firm's") Code of Ethics (the "Code").
2. I represent that I have complied with the Code at all times during the
previous calendar year and will comply with the Code during the current
calendar year.
3. I have, during the previous calendar year, disclosed and confirmed all
holdings and transactions required to be disclosed or confirmed pursuant to
the Code.
4. I have, during the previous calendar year, disclosed and confirmed all
accounts in which I have a beneficial interest, as defined in the Code
(including any and all accounts over which I exercise trading discretion or
otherwise control), and reported all securities transactions required to be
reported under the Code. A list of such accounts is attached hereto.
5. If any new accounts in which have a beneficial interest were opened during
the previous year, I notified the Firm and I authorized duplicate
statements, confirms and monthly statements with respect to such account to
be sent to the Firm.
Name (print):________________________________________
Position:____________________________________________
Signature:___________________________________________
Date:________________________________________________
Exceptions:
Item Number Explanation
<PAGE>
EXHIBIT C
PAGE 2 OF 3
List of all accounts in which has a beneficial interest
------------------------
name
as of . (Attach additional sheets, if necessary)
-------------------
date
Account Title:
-------------------------------------------------
Broker Dealer:
----------------------------------------------------
Account Number:
---------------------------------------------
Account Title:
-------------------------------------------------
Broker Dealer:
---------------------------------------------------
Account Number:
------------------------------------------------------
Account Title:
-------------------------------------------------
Broker Dealer:
---------------------------------------------------
Account Number:
------------------------------------------------------
Account Title:
-------------------------------------------------
Broker Dealer:
---------------------------------------------------
Account Number:
------------------------------------------------------
<PAGE>
EXHIBIT C
PAGE 3 OF 3
ANNUAL HOLDINGS REPORT
FOR ALL ACCESS PERSONS
List of all holdings in which has a beneficial interest
-----------------------
name
as of . (Attach additional sheets, if necessary)
-------------------
date
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
Security _______________________________
Number of Shares _______________________________
Principal Amount _______________________________
--------
1 Subject to Section V. E., the mere issuance of a research report shall not
mean a security is "being considered for purchase or sale."
