CODE OF ETHICS AND PERSONAL INVESTMENT POLICY
FOR
LAZARD ASSET MANAGEMENT
A DIVISION OF
LAZARD FRRES & CO. LLC AND
CERTAIN REGISTERED Investment Companies
Lazard Asset Management ("LAM"), a division of Lazard Frres & Co. LLC
("LF&Co."), and those U.S.-registered investment companies advised or managed by
LAM that have adopted this policy ("Funds"), have adopted this policy in order
to accomplish two goals: first, to minimize conflicts and potential conflicts of
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interest between Managing Directors and employees and LAM's clients (including
the Funds), and between Fund directors or trustees ("Directors") and their
Funds, and second, to provide policies and procedures consistent with applicable
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law, including Rule 204-2 under the Investment Advisers Act of 1940 (the
"Advisers Act") and Rule 17j-1 under the Investment Company Act of 1940 ("1940
Act"), to prevent fraudulent or manipulative practices with respect to purchases
or sales of securities held or to be acquired by client accounts. ALL MANAGING
DIRECTORS AND EMPLOYEES OF LAM, INCLUDING EMPLOYEES WHO SERVE AS FUND OFFICERS
OR DIRECTORS, ARE "COVERED PERSONS" UNDER THIS POLICY. Additionally, all
Directors are subject to this policy as indicated below.
I. STATEMENT OF PRINCIPLES. All Covered Persons owe a fiduciary duty to LAM's
clients when conducting their personal investment transactions. Covered Persons
must place the interest of clients first and avoid activities, interests and
relationships that might interfere with the duty to make decisions in the best
interests of the clients. All Directors owe a fiduciary duty to each Fund of
which they are a director and to that Fund's shareholders when conducting their
personal investment transactions. At all times and in all matters Directors
shall place the interests of their Funds before their personal interests. The
fundamental standard to be followed in personal securities transactions is that
Covered Persons and Directors may not take inappropriate advantage of their
positions.
Covered Persons are reminded that they also are subject to other policies of LAM
and of LF&Co., including policies on insider trading, the purchase and sale of
securities listed on any applicable restricted list, the receipt of gifts and
service as a director of a publicly traded company. COVERED PERSONS MUST NEVER
TRADE IN A SECURITY WHILE IN POSSESSION OF MATERIAL, NON-PUBLIC INFORMATION
ABOUT THE ISSUER OR THE MARKET FOR THOSE SECURITIES, EVEN IF THE COVERED PERSON
HAS SATISFIED ALL OTHER REQUIREMENTS OF THIS POLICY.
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The Chief Executives of LAM have appointed the Chief Compliance Officer as the
person who shall be responsible for the implementation of this Code of Ethics
and Personal Investment Policy and all record-keeping functions mandated
hereunder, including the review of all initial and annual holding reports as
well as the quarterly transactions reports described below. The Chief Compliance
Officer may delegate this function to others in the Compliance Department, and
shall promptly report to the Chief Executives all violations of, or deviations
from, this policy.
II. PERSONAL SECURITIES ACCOUNTS.
A. Covered Accounts. This policy applies to all "Personal Securities
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Accounts." These include:
1. Accounts in the Covered Person's or Director's name or accounts in which
the Covered Person or Director has a direct or indirect beneficial interest
(a definition of Beneficial Ownership is included in Exhibit A);
2. Accounts in the name of the Covered Person's or Director's spouse;
3. Accounts in the name of children under the age of 18, whether or not living
with the Covered Person or Director, and accounts in the name of relatives
or other individuals living with the Covered Person or Director or for
whose support the Covered Person or Director is wholly or partially
responsible (together with the Covered Person's or Director's spouse and
minor children, "Related Persons");/1/
4. Accounts in which the Covered Person or Director or any Related Person
directly or indirectly controls, participates in, or has the right to
control or participate in, investment decisions.
B. Exceptions to Covered Accounts. For purposes of this Policy, Personal
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Securities Accounts shall not include:
1. Accounts at mutual fund companies that hold only shares of open-end funds
purchased directly from that fund company. NOTE: TRANSACTIONS RELATING TO
CLOSED-END FUNDS ARE SUBJECT TO THE PRE-CLEARANCE, BLACKOUT PERIOD AND
OTHER RESTRICTIONS OF THIS POLICY;
2. Estate or trust accounts in which a Covered Person, Director, or Related
Person has a beneficial interest, but no power to affect investment
decisions. There must be no communication between the account(s) and the
person with regard to investment decisions prior to execution.
3. Fully discretionary accounts managed by either an internal or external
registered investment adviser are permitted if, (i) for Covered Persons and
Related Persons, the Covered Persons receives permission from the
Compliance Department and a Managing Director, and (ii) for
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/1/ Unless otherwise indicated, all provisions of this Code apply to Related
Persons.
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all persons covered by this Code, there is no communication between the adviser
to the account and such person with regard to investment decisions prior to
execution. Covered Persons with managed accounts must designate that copies of
trade confirmations and monthly statements be sent to the Compliance Department;
4. Covered Persons and Directors may participate in direct investment programs
which allow the purchase of securities directly from the issuer without the
intermediation of a broker/dealer provided that the timing and size of the
purchases are established by a pre-arranged, regularized schedule (e.g.,
dividend reinvestment plans). Covered Persons must pre-clear the
transaction at the time that the dividend reinvestment plan is being set
up. Covered Persons also must provide documentation of these arrangements
and direct periodic (monthly or quarterly) statements to the Compliance
Department;
5. Other accounts over which the Covered Person or Director has no direct or
indirect influence or control.
III. OPENING AND MAINTAINING EMPLOYEE ACCOUNTS. All Covered Persons and their
Related Persons must maintain their Personal Securities Accounts at LF&Co.
("Inside Accounts"). For Related Persons who, by reason of their employment, are
required to conduct their securities transactions in a manner inconsistent with
this policy, or in other exceptional circumstances, Covered Persons may submit a
request for exemption to the Compliance Department. If approval is granted to
maintain an account outside LF&Co. ("Outside Accounts"), the Compliance
Department will send a letter to the broker-dealer that will be housing the
account granting permission for the employee to hold an account at that firm,
and directing the broker-dealer to send copies of trade confirmations and
monthly statements to the LAM Compliance Department. All other provisions of
this policy will continue to apply to such Outside Accounts.
IV. SECURITIES COVERED. Securities covered by this policy are stocks, bonds,
shares of closed-end mutual funds, debentures, and other evidences of
indebtedness, including senior debt, subordinated debt, investment contracts,
commodity contracts, futures and all derivative instruments such as options,
warrants and indexed instruments, or, in general, any interest or instrument
commonly known as a security. "SECURITY" also includes securities that are
"related" to a security being purchased or sold by a LAM client. A "RELATED
SECURITY" is one whose value is derived from the value of another security
(e.g., a warrant, option, or an indexed instrument).
For purposes of this policy, the definition of SECURITY DOES NOT INCLUDE shares
of registered open-end investment companies, shares of registered open-end unit
investment trusts, U.S. Treasury obligations, mortgage pass-throughs (e.g.,
Ginnie Maes) that are direct obligations of the U.S. government; bankers'
acceptances; bank certificates of deposit; commercial paper; and high quality
short-term debt instruments (meaning any instrument that has a maturity at
issuance of less than 366 days and that is rated in one of the two highest
rating categories by a nationally recognized statistical rating organization,
such as S&P or Moody's), including repurchase agreements.
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V. RESTRICTIONS. The following restrictions apply to trading for Personal
Securities Accounts of Covered Persons and Related Persons:
1. No transactions for a Personal Securities Account may be made in a security
that is on LF&Co.'s Restricted List;
2. No security may be purchased or sold in any Personal Securities Account
seven (7) calendar days before or after a LAM client account trades in the
same security.
3. Securities transactions must be for investment purposes rather than for
speculation. Consequently, Covered Persons may not profit from the purchase
and sale, or sale and purchase, of the same or equivalent securities within
sixty (60) calendar days (i.e., the security may be sold on the 61 st day),
calculated on a First In, First Out (FIFO) basis. All profits from
short-term trades are subject to disgorgement. However, with the prior
written approval of the Covered Person's supervising Managing Director and
the Chief Compliance Officer, and only in rare and/or unusual
circumstances, an employee may execute a short-term trade that results in a
significant loss or in break-even status.
4. No transaction for a Personal Securities Account may be made in securities
offered pursuant to a public offering.
5. Securities offered pursuant to a private placement may not be purchased for
Personal Securities Accounts without the approval of a LAM Chief Executive
and the Chief Compliance Officer. In connection with any decision to
approve such a private placement, the Compliance Department will prepare a
report of the decision that explains the reasoning for the decision and an
analysis of any potential conflict of interest. Any Covered Person
receiving approval to acquire securities in a private placement must
disclose that investment when the Covered Person participates in a LAM
client's subsequent consideration of an investment in such issuer and any
decision by or made on behalf of the LAM client to invest in such issuer
will be subject to an independent review by investment personnel of LAM
with no personal interest in the issuer.
6. Absent approval from the appropriate compliance personnel, Covered Persons
are prohibited from engaging in the trading of options or futures and from
engaging in speculative trading, as opposed to investment activity. The
Covered Person must wait 60 days from the date of the opening transaction
before effecting the closing transaction.
7. Covered Persons are prohibited from engaging in short sales of any
security.
8. No transaction may be made in violation of the Material Non-Public
Information Policies and Procedures as outlined in Chapter X of LF&Co.'s
Compliance Manual; and
9. Covered Persons may not serve on the board of directors of any corporation
(other than a not-for-profit corporation or a related Lazard entity)
without the prior approval of a LAM Chief Executive and the Chief
Compliance Officer.
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VI. PROHIBITED RECOMMENDATIONS. No Covered Person shall recommend or execute any
securities transaction for any client account, or, in the case of a Director,
for the Director's Fund, without having disclosed, in writing, to the Chief
Investment Officer, or designee, any direct or indirect interest in such
securities or issuers. Prior written approval of such recommendation or
execution also must be received from the Chief Investment Officer, or designee.
The interest in personal accounts could be in the form of:
1. Any direct or indirect beneficial ownership of any securities of such
issuer;
2. Any contemplated transaction by the person in such securities;
3. Any position with such issuer or its affiliates; or
4. Any present or proposed business relationship between such issuer or its
affiliates and the person or any party in which such person has a
significant interest.
VII. TRANSACTION APPROVAL PROCEDURES. All transactions by Covered Persons
(including Related Persons) in Personal Securities Accounts must receive prior
approval as described below. To pre-clear a transaction, Covered Persons must:
1. Electronically complete and "sign" a "New Equity Order" or "New Bond Order"
trade ticket located in the Firm's Lotus-Notes e-mail application under the
heading "Employee Trades." The ticket should be directed to the Covered
Person's supervising Managing Director, or, in the absence of the
supervising Managing Director, to another LAM Managing Director or one of
the LAM Directors designated in the database.
2. Upon review and approval of the request by the designated supervisor, the
Covered Person will receive an automatic e-mail notification informing
her/him that the trade has been approved or rejected.
3. Following the supervisor's approval, the ticket will be automatically
transmitted to the Compliance Department where it will be processed and, if
approved, routed to the trading desk for execution, provided the employee
selected the "Direct Execution" option when completing the ticket.
The cut-off time for receipt of supervisor-approved tickets in the Compliance
Department is 9:30 a.m. each trading day. Any ticket received after this time
will be processed for execution the next trading day. It is the responsibility
of each Covered Person to ensure that tickets sent to a supervisor for approval
receive the supervisor's timely attention.
NOTE
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In completing a ticket, if the employee does not select the "Direct Execution"
button, the ticket will be returned to her/him after Compliance approval for
submission to the trading desk. In such case, the trade must be submitted within
48 hours or it will expire and be null and void.
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VIII. ACKNOWLEDGMENT AND REPORTING.
1. Within 10 days of becoming a Covered Person or Director, such Covered
Person or Director must submit to the Compliance Department an
acknowledgement that they have received a copy of this policy, and that
they have read and understood its provisions. See Exhibit B for the form of
Acknowledgement.
2. Within 10 days of becoming a Covered Person, all LAM personnel must submit
to the Compliance Department a statement of all securities in which such
Covered Person has any direct or indirect beneficial ownership. This
statement must include (i) the title, number of shares and principal amount
of each security, (ii) the name of any broker, dealer or bank with whom the
Covered Person maintained an account in which any securities were held for
the direct or indirect benefit of such Covered Person and (iii) the date of
submission by the Covered Person. Such information should be provided on
the form attached as Exhibit B.
3. Within 10 days after the end of each calendar quarter, provide information
to the Compliance Department relating to securities transactions executed
during the previous quarter for all securities accounts. Any such report
may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any direct or
indirect beneficial ownership in the security to which the report relates.
NOTE: COVERED PERSONS SATISFY THIS REQUIREMENT BY HOLDING THEIR PERSONAL
SECURITIES ACCOUNTS AT LF&CO.
4. Each Covered Person shall submit an annual report to the Compliance
Department showing as of a date no more than 30 days before the report is
submitted (1) all holdings in securities in which the person had any direct
or indirect beneficial ownership and (2) the name of any broker, dealer or
bank with whom the person maintains an account in which any securities are
held for the direct or indirect benefit of the Covered Person or Related
Persons.
NOTE: COVERED PERSONS SATISFY THIS REQUIREMENT BY CERTIFYING ANNUALLY THAT
ALL TRANSACTIONS DURING THE YEAR WERE EXECUTED IN INTERNAL ACCOUNTS OR
OUTSIDE ACCOUNTS FOR WHICH THE COMPLIANCE DEPARTMENT RECEIVES CONFIRMATIONS
AND PERIODIC STATEMENTS.
5. All Covered Persons and Directors are required to certify annually that
they have (i) read and understand this policy and recognize that they are
subject to its terms and conditions, (ii) complied with the requirements of
this policy and (iii) disclosed or reported all personal securities
transactions required to be disclosed or reported pursuant to this Code of
Ethics and Personal Investment Policy.
IX. FUND DIRECTORS. A Director who is not an "interested person" of the Fund
within the meaning of Section 2(a)(19) of the 1940 Act, and who would be
required to make reports solely by reason of being a Director, is required to
make the quarterly transactions reports required by Section VIII(3.) as to any
security if at the time of a transaction by the Director in that security,
he/she knew, or in the ordinary course of fulfilling his/her official duties as
a Fund Director, should have known that during the 15-day period immediately
preceding or following the date of
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that transaction, that security was purchased or sold by that Director's Fund
or was being considered for purchase or sale by that Director's Fund.
X. EXEMPTIONS.
1. Purchases or sales of securities which receive the prior approval of the
Chief Compliance Officer (upon consultation with a supervising Managing
Director as appropriate) may be exempted from certain restrictions if such
purchases or sales are not likely to have any economic impact on any client
account managed or advised by LAM.
2. Section V(2) (blackout period) shall not apply to any securities
transaction, or series of related transactions, involving the greater of an
aggregate transaction amount of US $25,000, or 500 shares or less in the
aggregate of any security, if the issuer has a market capitalization
(outstanding shares multiplied by the current price per share) greater than
US $5 billion ("Large Cap/De Minimus exemption").
XI. SANCTIONS. The Compliance Department shall report all violations of this
Code of Ethics and Personal Investment Policy to the LAM Chief Executives, who
may impose such sanctions as they deem appropriate, including, among other
things, a letter of censure, fine or suspension or termination of the employment
of the violator.
XII. CONFIDENTIALITY. All information obtained from any person pursuant to this
policy shall be kept in strict confidence, except that such information will be
made available to the Securities and Exchange Commission or any other regulatory
or self-regulatory organization or to the Fund Boards of Directors to the extent
required by law, regulation or this policy.
XIII. RETENTION OF RECORDS. All records relating to personal securities
transactions hereunder and other records meeting the requirements of applicable
law, including a copy of this policy and any other policies covering the subject
matter hereof, shall be maintained in the manner and to the extent required by
applicable law, including Rule 204-2 under the Advisers Act and Rule 17j-1 under
the 1940 Act. The Compliance Department shall have the responsibility for
maintaining records created under this policy.
XIV. BOARD REVIEW. Fund management shall provide to the Board of Directors of
each Fund, on a quarterly basis, a written report of all material violations of
this policy, and at least annually, a written report and certification meeting
the requirements of Rule 17j-1 under the 1940 Act.
XV. OTHER CODES OF ETHICS. To the extent that any officer of any Fund is not a
Covered Person hereunder, or an investment subadviser of or principal
underwriter for any Fund and their respective access persons (as defined in Rule
17j-1) are not Covered Persons hereunder, those persons must be covered by
separate codes of ethics which are approved in accordance with applicable law.
XVI. AMENDMENTS.
(a) COVERED PERSONS. Unless otherwise noted herein, this policy shall become
effective as to all Covered Persons on August 15, 2000. This policy may be
amended as to Covered
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Persons from time to time by the Compliance Department. Any material
amendment of this policy shall be submitted to the Board of Directors of
each Fund for approval in accordance with Rule 17j-1 under the 1940 Act.
(b) FUND DIRECTORS. This policy shall become effective as to a Fund upon the
approval and adoption of this policy by the Board of Directors of that Fund
in accordance with Rule 17j-1 under the 1940 Act or at such earlier date as
determined by the Secretary of the Fund. Any material amendment of this
policy that applies to the Directors of a Fund shall become effective as to
the Directors of that Fund only when the Board of Directors of that Fund
has approved the amendment in accordance with Rule 17j-1 under the 1940 Act
or at such earlier date as determined by the Secretary of the Fund.
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EXHIBIT A
EXPLANATION OF BENEFICIAL OWNERSHIP
You are considered to have "Beneficial Ownership" of Securities if you have or
share a direct or indirect "PECUNIARY INTEREST" in the Securities.
You have a "Pecuniary Interest" in Securities if you have the opportunity,
directly or indirectly, to profit or share in any profit derived from a
transaction in the Securities.
The following are examples of an indirect Pecuniary Interest in Securities:
1. Securities held by members of your IMMEDIATE FAMILY sharing the same
household; however, this presumption may be rebutted by convincing
evidence that profits derived from transactions in these Securities
will not provide you with any economic benefit. "Immediate family"
means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and
includes any adoptive relationship.
2. Your interest as a general partner in Securities held by a general or
limited partnership.
3. Your interest as a manager-member in the Securities held by a limited
liability company.
You do NOT have an indirect Pecuniary Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which you
hold an equity interest, unless you are a controlling equityholder or you have
or share investment control over the Securities held by the entity.
The following circumstances constitute Beneficial Ownership by you of Securities
held by a trust:
1. Your ownership of Securities as a trustee where either you or members
of your immediate family have a vested interest in the principal or
income of the trust.
2. Your ownership of a vested interest in a trust.
3. Your status as a settlor of a trust, unless the consent of all of the
beneficiaries is required in order for you to revoke the trust.
THE FOREGOING IS A SUMMARY OF THE MEANING OF "BENEFICIAL OWNERSHIP". FOR
PURPOSES OF THE ATTACHED POLICY, "BENEFICIAL OWNERSHIP" SHALL BE INTERPRETED IN
THE SAME MANNER AS IT WOULD BE IN DETERMINING WHETHER A PERSON IS SUBJECT TO THE
PROVISIONS OF SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934 AND THE RULES
AND REGULATIONS THEREUNDER.
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EXHIBIT B
LAZARD ASSET MANAGEMENT
ACKNOWLEDGEMENT & INITIAL HOLDINGS REPORT
PURSUANT TO CODE OF ETHICS AND PERSONAL INVESTMENT POLICY ("POLICY")
THIS REPORT MUST BE COMPLETED AND RETURNED TO THE COMPLIANCE DEPARTMENT WITHIN
10 DAYS OF EMPLOYMENT.
NAME: DATE OF EMPLOYMENT:
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(Please print)
BROKERAGE ACCOUNT INFORMATION:
[] I do not have a BENEFICIAL INTEREST in any account(s) with any financial
services firm.
[] I maintain the following brokerage account(s). Please list any broker, dealer
or bank, which holds securities for your direct or indirect benefit as of the
date of your employment.
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Name of Financial Services Firm and Address Account Title Account Number
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SECURITIES HOLDINGS INFORMATION:
Complete the following (or attach a copy of your most recent statements(s))
listing all of your securities holdings as of the date of your employment. If
attaching statement(s), please be sure to include any additional securities
purchased since the date of the statement. Open-ended mutual funds and U.S.
Government securities do not need to be disclosed. For a list of other
securities not required to be reported, please see Section IV. of the Policy.
<TABLE>
<CAPTION>
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Title of Security Ticker Symbol # of Shares Principal Amt. Held Since Broker Name
<S> <C> <C> <C> <C> <C>
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</TABLE>
[] I have no securities holdings to report.
I CERTIFY THAT I HAVE RECEIVED A COPY OF THE POLICY, AND THAT I HAVE READ AND
UNDERSTOOD ITS PROVISIONS. I FURTHER CERTIFY THAT THE ABOVE REPRESENTS A
COMPLETE AND ACCURATE DESCRIPTION OF MY BROKERAGE ACCOUNT(S) AND SECURITIES
HOLDINGS AS OF MY INITIAL DATE OF EMPLOYMENT.
Signature: Date:
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