HARRIS BRETALL SULLIVAN & SMITH L.L.C.
EMPLOYEE HANDBOOK
CODE OF ETHICS
3/31/2000
CONFLICTS OF INTEREST INVOLVING TRADING FOR PERSONAL ACCOUNTS
FIDUCIARY DUTY TO AVOID CONFLICTS OF INTEREST
As noted above, because the Company and each of its employees is a
fiduciary to the Company's clients, the Company and such persons must avoid
actual and apparent conflicts of interest with the Company's clients. In any
situation where the potential for conflict exists, transactions for clients must
take precedence over personal transactions. If there is any doubt, resolve the
matter in the client's favor.
PERSONAL ACCOUNT DEFINED
The 'personal account' of an employee of the Company shall include each and
every account (other than an account for the benefit of any of the Company's
clients) for which such employee influences or controls investment decisions.
Each account for the benefit of (i) any employee, (ii) the spouse of such
employee, (iii) any children under the age of 22 of such employee, or (iv) any
other dependent of such employee residing in the same household, shall be deemed
a personal account of the employee unless such employee certifies in writing to
the Compliance Officer (or, in the case of the Compliance Officer to a
Principal) that: (x) the certifying employee does not influence the investment
decisions for any specified account of such spouse, child or dependent person
and (y) the person or persons making the investment decisions for such account
do not make such decisions, in whole or in part, upon information that the
certifying employee has provided.
PROCEDURES REGARDING CONFLICTS OF INTEREST INVOLVING PERSONAL ACCOUNTS
RESTRICTED LIST
The Company has established and maintains a Restricted List. Promptly
following daily meetings of the Company's Strategy Committee, the Partner in
charge of supervising trading updates circulates the Restricted List to each
employee of the Company when appropriate changes are made to the list. The
Restricted List is dated and contains the names of specified securities and/or
issuers of securities. The Restricted List is circulated to all employees by
electronic mail each time a stock is added to or deleted from the list. The list
contains all stocks that are restricted from employee trading, and is broken
down between the stocks restricted for Growth Equity and Balanced Portfolios,
and those for the Technology, Entertainment and Communications Portfolio.
The Company's Strategy Committee may place a security on the Restricted
List if, for example, that security is currently included in the Company's Model
Portfolios and the security is under consideration for sale in client accounts;
the security is not in the Company's Model Portfolios and the security is being
considered for purchase in client accounts; or if, for example, the Strategy
Committee determines that there may be the appearance that the Company has
obtained material, nonpublic information regarding such issuer as a result of
the Company's on-site visits to such issuer.
Transactions in securities held in the Company's Model Portfolios may be
entered into before the security is added to the 'Restricted List' and after it
comes off the list.
PROHIBITION ON CERTAIN PERSONAL TRADES
Prohibited Trades. Both to insure compliance with the insider trading laws
and to ensure fulfillment of the Company's fiduciary duty to its clients and
minimize conflicts of interest with the Company's clients, during the period
that any security or issuer of securities appears on the Restricted list, no
employee of the Company shall for his or her personal account (I) purchase or
sell any security appearing on such Restricted List, (ii) purchase or sell any
option or other instrument convertible into any security appearing on such
Restricted List or (iii) purchase or sell any security or instrument convertible
into any security of an issuer appearing on such Restricted List.
Discouraged Trades. Even if a transaction is not prohibited pursuant to the
Restricted List procedure discussed in paragraph 1 above, the Company
discourages its employees from engaging in any personal securities transactions
in which the employee acts as a speculator, rather than an investor, with
respect to the transaction.
REPORTS OF PERSONAL TRANSACTIONS
Submission of Reports. In order for the Company to monitor compliance with
its insider trading and conflict of interest policies and procedures, every
employee of the Company, including Access Persons, shall submit a 'Quarterly
Personal Transaction Report' in the form attached to this Appendix 1 for each of
his or her personal accounts. The report shall be submitted to the Compliance
Officer within ten days following the end of each calendar quarter regardless of
whether any trading activity took place in that account during the quarter. This
includes all transactions in your immediate household, and all transactions by
persons for whom you provide advice or guidance in securities transactions. All
securities transactions are to be reported, except mutual funds and government
bonds.
The Quarterly Personal Transaction Report will contain the following
information:
o Name of the employee
o Custodian account firm and number
o Account holder name
o Relationship of account holder to employee
o Nature of the transaction (i.e. purchase, sale)
o Name of the security, number of shares or units, execution price and
date of the transaction o Signature of employee and date signed
Reporting HBSS Portfolio Security Transactions. When any order in a
security held in a Harris Bretall Portfolio is placed, an e-mail (or voicemail
if traveling - to be followed by an e-mail) must be sent to the Compliance
Officer immediately upon receiving an execution report. The following
information needs to be included:
o Issue (stock)
o Time and date executed
o Number of shares
o Price
Review and Retention of Reports. The Compliance Officer shall promptly
review each Quarterly Personal Transaction Report and compare the transactions
reported against the Restricted Lists that were circulated during the quarter to
determine whether any violations of the Company's policies or of the applicable
securities laws took place. If any employee's Quarterly Personal Transaction
Report fails to contain all required information, the Compliance Officer shall
promptly contact such employee to obtain the missing information. The Company
shall retain all Quarterly Personal Transaction Reports (and any other reports
required by these guidelines) as part of the books and records required by the
Advisers Act and the rules promulgated thereunder.
The President of the firm will be responsible for reviewing the Personal
Transactions Reports of the Compliance Officer.
At the beginning of each calendar year, all employees are required to
provide a list of holdings 'Annual Holdings Report' owned by the employee as of
the last day of the prior calendar year. New employees are required to provide a
holdings report 'Initial Holdings Report' at commencement of their employment
with the firm. These reports of holdings should be in the form of a statement
(s) of the employee's brokerage account (s) or bank custody account (s).
Any violations of the firm Personal Transaction Policy will be promptly
reported by the Compliance Officer to the Company's Executive Committee, and may
result in a reprimand, cancellation of the trade(s) affected and disgorgement of
profits, or other action deemed appropriate by the Executive Committee depending
on the circumstances of the violation. Disgorgement of any profit resulting from
trade cancellation will involve payment of the profit amount to a charitable
organization at the firm's direction.
Personal Trading for All 'Access' Persons.
Access Persons Defined. For purposes of this definition, the firm will
define all Access Persons as Investment Personnel, and include all officers and
directors of the firm, as well as all employees involved with investment
transactions and recommendations for the mutual funds or commingled funds
('Fund') managed by the firm. This group encompasses portfolio managers and
other staff directly involved in daily portfolio administration and trading of
Fund portfolios, and members of investment Strategy Committee. The Compliance
Officer will maintain the current list of Access Persons.
No personal trading by Access Persons in securities for which those Access
Persons have analytical responsibility will be permitted unless 'pre-clearance'
of said transactions is approved by the Strategy Committee.
Members of the Research Team are considered to be under the same
restrictions as Access Persons with respect to trading of securities for which
they have analytical responsibilities, whereby they are required to have
'pre-clearance' of the Strategy Committee before entering into any trades
involving securities in their assigned industries or sectors.
All Access Persons' securities transactions in IPOs or private placements
must be 'pre-cleared' by the Strategy Committee prior to being executed.
Approval will be denied in cases where it might be appropriate to offer
participation in the IPO to the firm's clients.
The effective period for 'pre-clearance' approval will be five days from
the date granted, provided that the security for which approval was obtained is
not placed on the Restricted List before the transaction is effected by the
employee.
SUMMARY
IMPORTANCE OF ADHERENCE TO PROCEDURES
It is very important that all employees adhere strictly to the Personal
Trading/Confidential Information Compliance Procedures. Any violations of such
policies and procedures may result in serious sanctions, including dismissal
from the Company.
All new employees will be required to acknowledge that they have read and
understood the firm guidelines regarding personal securities transactions by
signing a statement to that effect.
QUESTIONS
Any questions regarding the Company's policies or procedures regarding
insider trading, confidential information and conflicts of interest should be
referred to the Compliance Officer.
QUARTERLY PERSONAL TRANSACTION REPORT
For the Quarter Ended XX/XX/XX
Employee Name:
Account Name:
Account Number:
Relationship:
Brokerage Firm:
Security Buy/Sell Date # Shares Price
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Signature__________________________ Date ___________________
