CODE OF ETHICS
CAPITAL MANAGEMENT GROUP OF FIRST UNION NATIONAL BANK
EVERGREEN INVESTMENT MANAGEMENT
FIRST CAPITAL GROUP
FIRST INVESTMENT ADVISORS
EVERGREEN ASSET MANAGEMENT CORP.
EVERGREEN INVESTMENT MANAGEMENT COMPANY
LIEBER & COMPANY
MENTOR INVESTMENT ADVISORS
MENTOR PERPETUAL ADVISORS
MERIDIAN INVESTMENT COMPANY
TATTERSALL ADVISORY GROUP, INC.
Effective December 17, 1999
As an Employee of any of the CMG Covered Companies, you are required to read,
understand and abide by this Code of Ethics. The Code contains affirmative
requirements as well as prohibitions that you are required to adhere to in
connection with securities transactions effected on your behalf and on behalf of
clients (including the Evergreen Funds). Such requirements include, among other
things, (i.) notifying the Compliance Department upon establishing a personal
securities account with a broker/dealer, (ii.) in certain cases, obtaining
permission prior to engaging in a personal securities transaction, and (iii.)
reporting personal securities transactions to the Compliance Department. Failure
to adhere to the Code could result in sanctions, including dismissal from
employment, and could also in certain cases expose you to civil or criminal
penalties such as fines and/or imprisonment.
No written code can explicitly cover every situation that possibly may arise.
Even in situations not expressly described, the Code and your fiduciary
obligations generally require you to put the interests of your clients ahead of
your own. If you have any questions regarding the appropriateness of any action
under this Code or under your fiduciary duties generally, you should contact
your Compliance Officer or Assistant General Counsel to discuss the matter
before taking the action in question. Similarly, you should consult with your
Compliance or Legal officer if you have any questions concerning the meaning or
interpretation of any provision of the Code.
Finally, as an Employee of First Union Corporation or one of its divisions or
subsidiaries, you should consult First Union's Code of Conduct contained in your
Employee Handbook. This Code uses many defined terms that are defined in Section
V.
I. PROHIBITED ACTIVITIES
A. No Employee shall engage in any Security transactions, activity or
relationship that creates or has the appearance of creating a conflict of
interest (financial or other) between the Employee and a Covered Company or
a Client Account. Each Employee shall always
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place the financial and business interests of the Covered Companies and
Client Accounts before his or her own personal financial and business
interests.
B. No Employee shall:
(1) employ any device, scheme or artifice to defraud a Client Account;
(2) engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon a Client Account; or
(3) engage in any fraudulent, deceptive or manipulative practice with
respect to a Client Account.
C. No Employee shall purchase or sell, directly or indirectly, any Security
for any Personal Account, any Client Account, the account of a Covered
Company, or any other account, while in possession of Inside Information
concerning that Security or the issuer without the prior written approval
of the Compliance Officer and the Assistant General Counsel and (per First
Union's Code of Conduct) First Union's Conflict of Interest Committee,
which approval shall specifically determine that such trading would not
constitute an improper use of such Inside Information. Employees possessing
Inside Information shall take reasonable precautions to ensure that such
information is not disseminated beyond those Employees with a need to know
such information. Any questions should be directed to the Compliance
Officer or Assistant General Counsel.
D. No Employee shall recommend or cause a Covered Company or Client Account to
take action or refrain from taking action for the Employee's own personal
benefit.
E. It is presumed that Employees in one geographic location will not have
knowledge of transactions effected in another geographic location, but use
of any such information would likewise be prohibited.
(1) No Employee shall purchase or sell any Security for any Personal
Account if he or she knows such Security (i.) is being purchased or
sold for any Covered Company or Client Account or (ii.) is being
actively considered for purchase or sale by any Covered Company or
Client account.
(2) A Covered Company shall not purchase or sell any Security for its own
account if the Employee making such purchase or sale knows such
Security (i.) is being purchased or sold for any Client Account or
(ii.) is being actively considered for purchase or sale by any Client
Account.
The prohibitions contained in E.(1) and E.(2) shall not apply to:
(a) purchases pursuant to a dividend reinvestment program or
purchases based upon preexisting status as a security holder,
policy holder or depositor;
(b) purchases of Securities through the exercise of rights issued to
the Employee as part of a pro rata issue to all holders of such
Securities, and the sale of such rights;
(c) transactions that are non-volitional, including any sale out of a
brokerage account resulting from a bona fide margin call as long
as collateral was not withdrawn from such account within 10 days
prior to the call; and
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(d) transactions previously approved in writing by the Compliance
Officer that have been determined not to be harmful to any Client
Account because of the volume of trading in the Security.
F. No Employee shall purchase a Security for any Personal Account in an
initial public offering, except for initial public offerings where the
individual has a right to purchase the Security based on a preexisting
status as a security holder, policy holder or depositor.
G. No Employee shall maintain or open a brokerage account constituting a
Personal Account unless duplicate confirmations and statements of all
account activity are forwarded to the Compliance Officer.
H. No Employee shall use any Derivative to evade the restrictions of this Code
of Ethics.
I. No Investment Person shall be a director of a publicly traded company other
than First Union Corporation without prior written approval of the
Compliance Officer. Approval generally will not be granted.
J. No Access Person shall make investments for any Personal Account in any
investment club without prior written approval from the Compliance Officer.
K. No Access Person may purchase a Security for any Personal Account in a
private offering without prior written approval of the person's Chief
Investment Officer or the Compliance Officer. In considering whether to
grant such approval, the Compliance Officer or Chief Investment Officer
will consider several factors, including but not limited to:
(1) whether the investment opportunity should be reserved for a Client
Account; and
(2) whether the opportunity is being offered to the Access Person by
virtue of his or her position with respect to a Client Account or a
Covered Company.
If approval is granted, the Access Person must disclose the investment to the
appropriate Chief Investment Officer before participating in any way in any
decision as to whether a Client Account should invest in such Security or in
another Security issued by the same issuer. In such circumstances, the Chief
Investment Officer will conduct a review by investment personnel with no
interest in the issuer prior to a purchase on behalf of a Client Account. The
Compliance Officer shall retain a record of this approval and the rationale
supporting it.
L. No Access Person may offer investment advice or manage any person's
portfolio in which he or she does not have Beneficial Ownership other than
a Client Account without prior written approval from the Compliance
Officer.
M. No Investment Person may profit from the purchase and sale or sale and
purchase of the same (or equivalent) Securities (other than securities
issued by First Union Corporation) in a Personal Account within 60 calendar
days. Any resulting profits will be disgorged as instructed by the
Compliance Officer.
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N. No Investment Person may buy or sell a Security for any Personal Account
within seven calendar days before or after a Client Account that he or she
manages, or provides information or advice to, or executes investment
decisions for, trades in that Security, except:
(1) purchases pursuant to a dividend reinvestment program or purchases
based upon preexisting status as a security holder, policy holder or
depositor;
(2) purchases of Securities through the exercise of rights issued to the
Employee as part of a pro rata issue to all holders of such
Securities, and the sale of such rights;
(3) transactions that are non-volitional, including any sale out of a
brokerage account resulting from a bona fide margin call as long as
collateral was not withdrawn from such account within ten days prior
to the call; and
(4) transactions previously approved in writing by the Compliance Officer
that have been determined not to be harmful to any Client Account
because of the volume of trading in the Security.
Any related profits from such transaction will be disgorged as
instructed by the Compliance Officer.
O. No Employee shall, directly or indirectly, in connection with any purchase
or sale of any Security by a Client Account or a Covered Company or in
connection with the business of a Client Account or a Covered Company,
accept or receive from a third party any gift or other thing of more than
de minimis value, other than (i.) business entertainment such as meals and
sporting events involving no more than ordinary amenities and (ii.)
unsolicited advertising or promotional materials that are generally
available. An Employee also should consult First Union Corporation's Code
of Conduct relating to acceptance of gifts from customers and suppliers. An
Employee shall refer questions regarding the permissibility of accepting
items of more than de minimis value to the Compliance Officer.
II. PRE-CLEARING PERSONAL TRADES
Pre-Clearance Procedures and Standards
A. No Access Person may engage in a Securities transaction (other than a
transaction described in Section B. below) involving a Personal Account
unless he/she has first pre-cleared the transaction by completing a
Personal Investment Pre-Clearance Form and had the form signed and/or
initialed as set forth therein. Approval shall be indicated by the Access
Person's Chief Investment Officer or other designated supervisor signing
and dating the Form where indicated at the bottom. Any such approval shall
only be valid until the end of the next trading day. The time allotment is
limited to the actual time of purchase or sale of the Security. If
execution of the trade does not take place by the end of the next trading
day, then another pre-clearance request must be processed and approved.
"Good till cancelled" orders are forbidden and "no limit" orders must be
cancelled or pre-cleared again by the end of the next trading day after the
approval if the trade is not executed.
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B. The following transactions are excluded from the pre-clearance requirement:
(1) any transactions in Securities traded on a national securities
exchange or NASDAQ NMS with an aggregate amount of (i.) 500 shares or
less or (ii.) $25,000 or less (whichever is a lessor amount) of a
particular security within a seven-day window. The de minimis is not
valid for an Investment Person who has knowledge of recent purchases
and sales of the same security within Client accounts.
(2) purchases pursuant to a dividend reinvestment program (DRIP) or
purchases based upon preexisting status as a security holder, policy
holder or depositor;
(3) purchases of Securities through the exercise of rights issued to the
Employee as part of a pro rata issue to all holders of such
Securities, and the sale of such rights;
(4) transactions that are non-volitional, including any sale out of a
brokerage account resulting from a bona fide margin call as long as
collateral was not withdrawn from such account within ten days prior
to the call;
(5) transactions in Securities issued by First Union Corporation;
(6) transactions by an Investment Person in a Security that all Client
Accounts for which the person makes or executes investment decisions
or recommendations are prohibited under their investment guidelines
from purchasing; and
(7) transactions previously approved in writing by the Compliance Officer
that have been determined not to be harmful to any Client Account
because of the volume of trading in the Security.
C. Failure to receive pre-approval on applicable trades will result in the
following actions:
(1) First Failure: Letter of Reprimand;
(2) Second Failure: $100.00 fine, payable to a charity agreeable to the
Compliance Officer and the Access Person;
(3) Third Failure: $250.00 fine, payable to a charity agreeable to the
Compliance Officer and the Access Person;
(4) Fourth Failure: Referral to appropriate management for action.
D. All employees should consult the First Union Code of Conduct regarding the
permissibility of investing in other financial institutions.
III. REPORTING REQUIREMENTS
A. Each year every Employee must sign an acknowledgment stating that he/she
has received and reviewed and will comply with this Code of Ethics. New
Employees should read and sign the policy within 30 days of employment.
B. Each Employee shall give written instructions to every broker with whom he
or she transacts for any Personal Account to provide duplicate confirmation
for all purchases and sales of Securities to:
For First Union Capital Management Group, First Capital Group, and Evergreen
Investment Management (not EIMCO) Employees:
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First Union National Bank
401 S. Tryon Street, 3FU, 15th Floor
Charlotte, NC 28202-0137
ATTN: CMG Compliance
For Lieber & Company and Evergreen Asset Management Corp. Employees:
Evergreen Funds
1311 Mamaroneck Avenue
White Plains, NY 10605
ATTN: Compliance Department
For Evergreen Investment Management Company, Inc. Employees:
Evergreen Funds
200 Berkeley Street
Boston, MA 02116
ATTN: Compliance Department
For Mentor Investment Advisor and Mentor Perpetual Advisors Employees:
Evergreen Funds
901 E. Byrd St.
Richmond, VA 23219
ATTN: Compliance Department
For Tattersall Advisory Group, Inc. Employees:
Tattersall Advisory Group, Inc.
6802 Paragon Place, Suite 200
Richmond, VA 23230
ATTN: Compliance Department
For Meridian Investment Company Employees:
Vicki Calhoun
First Union National Bank/Trust Compliance
PO Box 7558
Philadelphia, PA 19101-7558
C. Employees who are not Investment Persons or Access Persons must report all
transactions for their Personal Account annually for each year ending
December 31 by the following January 31.
D. Each Access Person must report all Securities holdings in all Personal
Accounts upon commencement of employment (or within ten days of becoming an
Access Person) and thereafter annually, for each year ending December 31 by
the following January 31. A
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separate holdings list need not be provided if all personal security
holdings are otherwise listed on copies of brokerage statements received by
Compliance.
E. Each Access Person shall file with the Compliance Officer within ten
calendar days after the end of each calendar quarter (March 31, June 30,
September 30, December 31) a report listing each Security transaction
(including those exempt from the pre-clearance requirements) effected
during the quarter for any Personal Account; provided, however, a Security
transaction need not be separately reported under this paragraph if a copy
of a broker confirmation for the transaction was forwarded to the
appropriate Compliance Officer as required under Section 1.G.
F. Any Employee who becomes aware of any person trading on or communicating
Inside Information (or contemplating such actions) must report such event
to the Compliance Officer or the Assistant General Counsel.
G. Any Employee who becomes aware of any person violating this Code of Ethics
must report such event to the Compliance Officer or the Assistant General
Counsel.
IV. ENFORCEMENT
A. Review - The Compliance Officer shall review reports filed under the Code
of Ethics to determine whether any violation of this Code of Ethics may
have occurred.
B. Investigation - The Assistant General Counsel shall investigate any
substantive alleged violation of the Code of Ethics. An Employee allegedly
involved in a violation of the Code of Ethics may be required to deliver to
the Assistant General Counsel or his/her designee all tax returns involving
any Personal Account or any Securities for which the Employee has
Beneficial Ownership for all years requested. Failure to comply may result
in termination.
C. Sanctions - In determining the sanctions to be imposed for a violation of
this Code of Ethics, the following factors, among others, may be
considered:
(1) the degree of willfulness of the violation;
(2) the severity of the violation;
(3) the extent, if any, to which an Employee profited or benefited from
the violation;
(4) the adverse effect, if any, of the violation on a Covered Company or a
Client Account; and
(5) any history of prior violation of the Code.
The following sanctions, among others, may be considered:
(1) disgorgement of profits;
(2) fines;
(3) letter of reprimand;
(4) suspension or termination of employment; and
(5) such other actions as the Compliance Officer in concert with
appropriate legal counsel, or the Boards of Trustees of the Evergreen
Funds, shall determine.
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D. All violations of the Code of Ethics involving Employees with
responsibilities relating to the Evergreen Funds or otherwise involving the
Evergreen Funds, and any sanctions imposed shall be reported to the Boards
of Trustees of the Evergreen Funds. All violations of the Code and any
sanctions also shall be reported to the Employee's supervisor, and any
regulatory agency requiring such reporting, and shall be filed in the
Employee's personnel record.
E. Potential Legal Penalties for Misuse of Inside Information
(1) civil penalties up to three times the profit gained or loss avoided;
(2) disgorgement of profits;
(3) injunctions, including being banned from the securities industry;
(4) criminal penalties up to $1 million; and/or
(5) jail sentences.
V. DEFINITIONS
Access Person: Access Person includes: (i.) any director of a Covered Company or
any officer of a Covered Company with the title of Vice President or above, but
excluding any such director or officer excluded in writing by the Covered
Company's Compliance Officer with the approval of the Assistant General Counsel;
(ii.) any Investment Person, but excluding any such person excluded in writing
by the appropriate person's Compliance Officer with the approval of the
Assistant General Counsel; and (iii.) any Employee of a Covered Company who, in
connection with his or her regular duties, makes, participates in, or obtains
information regarding the purchase or sale of a Security by a Client Account or
a Covered Company. Upon being notified of the hiring of a new Employee or of a
change in an Employee's job title or responsibilities, the appropriate
Compliance Officer will determine and notify the Employee as to whether he/she
is or has become an Access Person under the Code.
Assistant General Counsel: Michael H. Koonce - 617/210-3663
Beneficial Ownership: A direct or indirect financial interest in an investment
giving a person the opportunity directly or indirectly to participate in the
risks and rewards of the investment, regardless of the actual owner of record.
Securities of which a person may have Beneficial Ownership include, but are not
limited to:
(1) securities owned by a spouse, by or for minor children, or by
relatives of the person or his/her spouse who live in his/her home,
including Securities in trusts of which such persons are
beneficiaries;
(2) a proportionate interest in Securities held by a partnership of which
the person is a general partner;
(3) securities for which a person has a right to dividends that are
separated or separable from the underlying securities; and
(4) securities that a person has a right to acquire through the exercise
or conversion of another Security.
Client Account: Any account of any person or entity (including an investment
company) for which a Covered Company provides investment advisory or investment
management services.
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Client Account does not include brokerage or other accounts not involving
investment advisory or management services.
Compliance Officer: The Compliance Officers for each Covered Company are set
forth below:
First Union Capital Management Group
Evergreen Investment Management, and
First Capital Group
Clint Lackey 704/374-3473
Karen Knudtsen 704-374-2249
Joni McCabe 704/374-6404
Donna Mooney 704/383-8197
Vicki Calhoun 215/985-8742
Evergreen Asset Management Corp.
Lieber & Company
Christina Carroll 914/644-1122
Jim Angelos 617/210-3690
Evergreen Investment Management Company, Inc.
Cathy White 617/210-3606
Jim Angelos 617/210-3690
Meridian Investment Company
Vicki Calhoun 215/985-8742
Tattersall Advisory Group
Margaret Corwin 804/289-2663
Mentor Investment Advisors
Mentor Perpetual Advisors
Taylor Nelson 804/782-3209
Covered Company: Includes Evergreen Asset Management Corp., Evergreen Investment
Management Company, Inc., Lieber & Company, Mentor Investment Advisors, Mentor
Perpetual Advisors, Meridian Investment Company, Tattersall Advisory Group, Inc.
and the investment groups included within the Capital Management Group of First
Union National Bank, which currently include Evergreen Investment Management,
First Capital Group, and First Investment Advisors. Covered Company also
includes any CMG advisors that are acquired during the time this Code is in
effect.
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Derivative: Every financial arrangement whose value is linked to, or derived
from, fluctuations in the prices of stock, bonds, currencies or other assets.
Derivatives include but are not limited to futures, forward contracts, options
and swaps on interest rates, currencies, and stocks.
Direct or Indirect Influence or Control: The power on the part of an Employee,
his/her spouse or a relative living in his/her home to directly or indirectly
influence the selection or disposition of investments.
Employee: Any director, officer, or employee of a Covered Company, including
temporary or part-time employees and employees on short-term disability or leave
of absence. Independent contractors and their employees providing services to a
Covered Company, if designated by the Compliance Officer, shall be treated as
Employees under this Code.
Evergreen Funds: The open and closed-end investment companies advised or
administered by the Covered Companies.
Inside Information: Information regarding a Security or its issuer that has not
yet been effectively communicated to the public through an SEC filing or widely
distributed news release, and which a reasonable investor would consider
important in making an investment decision or which is reasonably likely to
impact the trading price of the Security. Inside Information includes, but is
not limited to, information about (i.) dividend changes, (ii.) earnings
estimates and changes to previously released estimates, (iii.) other changes in
financial status, (iv.) proposed mergers or acquisitions, (v.) purchases or
sales of material amounts of assets, (vi.) significant new business, products or
discoveries or losses of business, (vii.) litigation or investigations, (viii.)
liquidity difficulties or (ix.) management changes.
Investment Person: An Employee who is a portfolio manager, securities analyst,
or trader, or who otherwise makes recommendations regarding or effects the
purchase or sale of securities by a Client Account.
Personal Account: Any holding of Securities constituting Beneficial Ownership,
other than a holding of Securities previously approved by the Compliance Officer
over which the Employee has no Direct Influence or Control. A Personal Account
is not limited to securities accounts maintained at brokerage firms, but also
includes holdings of Securities owned directly by an Employee.
Security: Any type of equity or debt instrument and any rights relating thereto,
such as derivatives, warrants and convertible securities.
Unless otherwise noted, Security does not include:
(1) US Government Securities (see definition below);
(2) commercial paper, certificates of deposit, repurchase agreements,
bankers' acceptances, or any other money market instruments;
(3) shares of registered open-end investment companies (i.e., mutual
funds);
(4) commodities (except the Security that does include options on
individual equity or debt securities);
(5) real estate investment trusts;
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(6) guaranteed insurance contracts/bank investment contracts; or
(7) index based securities;
(8) derivatives based on any instruments listed above.
Shares issued by all closed end funds (excluding index-based derivatives) are
included in the definition of Security.
U.S. Government Securities: All direct obligations of the U.S. Government and
its agencies and instrumentalities (for instance, obligations of GNMA, FHLCC, or
FHLBs).
