MARATHON ASSET MANAGEMENT LIMITED
CODE OF ETHICS
INTRODUCTION
------------
Set forth below is the Code of Ethics ("Code") of Marathon Asset Management
Limited ("Marathon"). The Code applies to every person "associated" with
Marathon ("Associated Person"), which means every officer, director and employee
of Marathon, as well as any person directly or indirectly controlling or
controlled by Marathon. The Code governs conflicts of interest in personal
securities transactions that typically arise when an Associated Person invests
in securities that are held or are to be acquired by the funds or other accounts
for which Marathon acts as the investment adviser ("managed accounts").
The effective date of this Code is DECEMBER 22, 1999.
Every Associated Person must read, acknowledge receipt and understanding of, and
retain this Code. Any questions regarding the Code should be referred to the
Compliance Officer.
PROHIBITED CONDUCT
------------------
Conflicts of Interest
---------------------
All Associated Persons are prohibited from engaging in, or recommending, any
securities transaction which places or appears to place their own interests
above that of any managed account. Similarly, all Associated Persons are
prohibited from recommending securities transactions by any managed account
without disclosing his or her interest, if any, in such securities or the issuer
thereof, including without limitation:
a) any direct or indirect beneficial ownership of any securities of such
issuer;
b) any contemplated transaction by such person in such securities;
c) any position with such issuer or its affiliates; and
d) any present or proposed business relationship between such issuer or
its affiliates and such person or any party in which such person has a
significant interest.
CONTD.....
<PAGE>
Confidentiality
---------------
All Associated Persons are prohibited from divulging the current portfolio
positions, and current and anticipated portfolio transactions, programs and
studies of Marathon or any managed account to anyone unless it is properly
within his or her duties to do so.
Inducements
-----------
Subject to certain common-sense limits and exceptions, no Associated Person may
accept gifts or benefits in any form from third parties.
For the purposes of this provision, the following gifts or benefits from third
parties will not be considered to be in violation of this requirement:
(i) an occasional meal;
(ii) an occasional ticket to a sporting event, the theatre or comparable
entertainment;
(iii) a holiday gift (food, wine etc.) with an estimated value of no more than
(pounds) 50.
The Compliance Officer must be notified immediately should any Associated Person
receive or be offered any gift or benefit.
Insider Dealing
---------------
All Associated Persons are prohibited from engaging in any securities
transaction, for their own benefit or the benefit of others, including managed
accounts, while in possession of "unpublished, price-sensitive" information
concerning such securities.
"Price-Sensitive" information means 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
material effect on the price of a company's securities.
Information that should be considered Price-Sensitive includes, but is not
limited to, dividend changes, earnings estimates, changes in previously released
earnings estimates, significant expansion or curtailment of operations, a
significant increase or decline in orders, significant new products or
discoveries, extraordinary borrowing, purchase or sale of substantial assets,
significant merger or acquisition proposals or agreements, major litigation,
liquidity problems, and extraordinary management developments.
CONTD.....
Price-Sensitive information does not have to relate to a company's business. For
example, information about the contents of a forthcoming newspaper or magazine
article that is expected to affect the price of a security should be considered
<PAGE>
material. Similarly, information concerning significant transactions which
Marathon intends to execute on behalf of managed accounts could be
Price-Sensitive information and is prohibited from being communicated.
Information is "Unpublished" until it has been effectively communicated to the
marketplace. One must be able to point to some fact to show that the information
is generally public. For example, information appearing in The Financial Times,
The Wall Street Journal or other publications of general circulation would be
considered public as would information released to a recognised Stock Exchange
or announced by a company at a presentation.
All Associated Persons are prohibited from communicating unpublished,
price-sensitive information concerning any security to others unless it is
properly within his or her duties to do so. In addition, care should be taken so
that such information is secure. For example files containing unpublished,
price-sensitive information should be sealed and access to computer files
containing such information should be restricted.
Any violation of this Code can be expected to result in serious sanctions by
Marathon, including dismissal of the persons involved, as well as possible
prosecution by the relevant authorities.
Appointment to other Boards
---------------------------
No Associated Person shall serve on the board of directors of any company
without prior authorisation of the Board of Directors of Marathon. Any such
authorisation shall be based upon a determination that the appointment would be
consistent with the interests of Marathon.
PROCEDURES FOR CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
------------------------------------------------------------
The following procedures have been established to aid Associated Persons in
avoiding conflicts of interest and insider dealing, and to aid Marathon in
preventing, detecting and imposing sanctions against such conduct. These
procedures apply to all transactions over which an Associated Person has
discretion, including but not limited to, transactions by self-managed PEPs,
ISAs, pension plans and trusts. The requirements in respect of obtaining consent
apply equally to Connected Persons. A full definition of Connected Persons is
included within Marathon's Compliance Manual but would typically include
spouses, partners and minor children.
The concept of Associated Persons and their Connected Parties is consistent with
the idea of Access persons under US regulation. Marathon is a small company and
information about investment strategy and forthcoming trades is quickly
disseminated. As such, with the exception of non-executive directors, all
Marathon personnel and their Connected Parties are considered to be Access
persons. Non-executives who do not participate in the day to day operation or
management of the business are considered to be Associated Persons, but not
Access persons.
Every Associated Person must follow these procedures or risk serious sanctions,
including dismissal, substantial personal liability and criminal penalties. If
you have any questions about these procedures you should consult the Compliance
<PAGE>
Officer. Interpretative issues which arise under these procedures shall be
decided by, and are subject to the discretion of, the Compliance Officer.
1. Employees or their connected persons wishing to deal for their own account
must FIRST obtain the written consent of a Director or the Compliance
Officer. In the first instance the individual should seek the consent of
the investment director responsible for that particular geographical area.
A Consent Form has been specifically devised for the purpose and should be
used for all trades (see Exhibit D). The Compliance Officer will keep a
record of all consents granted. The consent will be valid for one day.
Thereafter, the employee must seek a further consent.
Non-executive directors (provided that they have no direct involvement in
the day to day running of the business) have a general consent to effect
personal transactions and pre-clearance is not required.
If Clients are dealing in a given Security on the requested day no dealings
will be allowed in that Security until the Client's transactions are
completed.
To prevent frontrunning, consent will not be given for purchases if it is
known, or may reasonably be expected, that clients will purchase the same
stock within the next seven days. In the event that clients do purchase the
same stock within seven days (ie, through previously unforeseeable
circumstances), the purchaser shall be prohibited from selling that
security for a period of six months from the date of the trade. Any profits
realised from a sale of such security within the prescribed six months
shall be subject to disgorgement.
Consent will not be given for sales where there have been purchases of the
same stock for clients in the preceding SEVEN days. Should such a sale take
place, the seller shall disgorge any profits realised between the date of
his sale and the date of the purchase by our clients.
Consent will not be given for sales if it is known, or may reasonably be
expected, that there will be sales of the same stock for any clients within
the next seven days. Again any profits realised on transactions in breach
of this rule will be subject to disgorgement.
All disgorged profits will be surrendered to Marathon and paid over to one
or more charities chosen by the Board of Directors.
2. The Compliance Officer must be notified of all transactions effected by
Access persons as soon as practically possible.
3. Copies of contract notes for all personal deals by Access persons must be
lodged with the Compliance Officer.
4. A minimum holding period of sixty days is required for personal
investments, other than short dated instruments (e.g. options, futures).
Any proposed sale within this time frame will only be allowed in
<PAGE>
exceptional circumstances and will require written consent from a Director
or the Compliance Officer. Any profit realised on short term trades made
without consent shall be subject to disgorgement.
Exempted Transactions
---------------------
The requirement to obtain prior clearance for personal securities transactions
shall not apply to:
1. Purchases or sales effected in any account over which the Associated Person
has no direct or indirect influence or control;
2. Purchases or sales which are non-volitional on the part of the Associated
Person;
3. Purchases which are part of an automatic dividend reinvestment plan;
4. Purchases effected upon the exercise of rights issued by an issuer pro rata
to all holders of a class of its securities, to the extent that such rights
were acquired from such issuer, and sales of such rights, so acquired.
REPORTING PROCEDURES
--------------------
1. Every Associated Person shall disclose all of their personal securities
holdings upon commencement of employment and thereafter on an annual basis
as of December 31st. The disclosure will be limited to the names of all
securities held. The report shall be made on the form attached as Exhibit
A.
2. Every Associated Person shall certify upon commencement of employment and
thereafter on an annual basis as of December 31st that:
(i) they have read and understood the code and recognise that they
are subject thereto;
(ii) they have complied with the requirements of the code; and
(iii) they have reported all personal securities transactions required
to be reported pursuant to the requirements of the Code.
The annual report shall be made on the form attached as Exhibit B.
3. Every Associated Person shall submit a report no later than ten days (or as
soon as possible in the event of their absence) after the end of each
calendar quarter, of all the securities transactions they have effected in
that quarter. The report shall contain the following information:
<PAGE>
(i) the date of the transaction and the name of the shares transacted;
(ii) the nature of the transaction (ie. purchase or sale); and
(iii) the total value of the transaction.
The report shall be made on the form attached as Exhibit C.
4. These reporting requirements will not apply to non-executive directors of
the company. Non-executive directors are required to provide a list, on an
annual basis, of personal transactions undertaken. This list must include
the name of the security, the date, and the nature of the transaction (buy
or sell). The list should be accompanied by an appropriate declaration of
completeness.
<PAGE>
EXHIBIT A
MARATHON ASSET MANAGEMENT LTD
Statement of Personal Securities Holdings as at 31 December 1999
----------------
I certify that at the above date I held shares in the following companies:
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
--------------------------------- ------------------------------
Date: Name:
------------- ------------------------
Signature:
--------------------
<PAGE>
MARATHON ASSET MANAGEMENT LTD
ACKNOWLEDGEMENT OF CODE OF ETHICS
I acknowledge that:
(i) I have read and understood the Code of Ethics (dated 22 December 1999)
and recognise that I am subject thereto;
(ii) I have complied with the requirements of the Code;
(iii) I have reported all personal securities transactions required to be
reported pursuant to the requirements of the Code of Ethics; and
(iv) I have reported all gifts and benefits offered to me or received by me
from third parties to the Compliance Officer.
Employee Name:
Employee Signature:
Date:
<PAGE>
MARATHON ASSET MANAGEMENT LIMITED Exhibit C
Securities Transaction Report for the quarter ended: 31 December 1999
----------------
To the Compliance Officer, Marathon Asset Management Limited
During the quarter referred to above, I effected the following securities
transactions:
------------------------------------------------------------------------------
SECURITY DATE OF (pound) AMOUNT NATURE OF
TRANSACTION OF TRANSACTION TRANSACTION
------------|-----------------|---------------------|-------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
I confirm that this constitutes the complete list of transactions with respect
to which I had direct control or influence.
Date: Name:
----------------- ------------------------
Signature:
---------------------------
