Document/Exhibit Description Pages Size
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2: EX-3.(III) By Laws 9± 38K
4: EX-23 Consent of Independent Accountant 1 5K
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5: EX-99 Code of Ethics 93± 298K
7: EX-99.B16B Certificate of Secretary 1 6K
3: EX-99.B6 Distribution Agreement 7± 27K
MELLON
SECURITIES TRADING POLICY
Questions Concerning the Securities Trading Policy?
Contact Corporate Compliance, (412) 234-1661
AIM 151-4340, Mellon Bank, Pittsburgh, PA 15258-0001
Dear Colleague:
At Mellon, we take great pride in our transformation over the years from a
regional bank to a global financial services company. Our growth makes us better
able to meet customers' changing needs, gives us greater stability during any
unexpected economic downturn and affords us the opportunity to be the best
performing financial services company.
This diversity of our businesses also makes us a complex organization, which is
why it's more important than ever that you clearly understand Mellon's
Securities Trading Policy. Mellon has long maintained strict policies regarding
securities transactions, all with the same clear-cut objective: to establish and
demonstrate our compliance with the high standards with which we conduct our
business.
If you are new to Mellon, please take the time to fully understand the Policy
and consult it whenever you are unsure about appropriate actions. If you have
seen the Policy previously, I urge you to renew your understanding of the entire
document and its implications for you. Only by strict adherence to the Policy
can we ensure that our well-deserved reputation for integrity is preserved.
Sincerely yours,
Martin G. McGuinn
[Download Table]
CONTENTS
PAGE
INTRODUCTION 1
CLASSIFICATION OF EMPLOYEES 2
-Insider Risk Employees
-Investment Employees
-Access Decision Makers
-Other Employees
-Consultants, Independent Contractors and Temporary Employees
PERSONAL SECURITIES TRADING PRACTICES 3
SECTION ONE - APPLICABLE TO INSIDER RISK EMPLOYEES 3
Quick Reference - Insider Risk Employees 5
Standards of Conduct for Insider Risk Employees 6
Restrictions on Transactions in Mellon Securities 9
Restrictions on Transactions in Other Securities 11
Protecting Confidential Information 14
SECTION TWO - APPLICABLE TO INVESTMENT EMPLOYEES 17
Quick Reference - Investment Employees 19
Standards of Conduct for Investment Employees 20
Restrictions on Transactions in Mellon Securities 24
Restrictions on Transactions in Other Securities 26
Protecting Confidential Information 29
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES 31
Quick Reference - Other Employees 33
Standards of Conduct for Other Employees 34
Restrictions on Transactions in Mellon Securities 35
Restrictions on Transactions in Other Securities 37
Protecting Confidential Information 39
GLOSSARY Definitions 43
Exhibit A - Sample Letter to Broker 49
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INTRODUCTION The Securities Trading Policy (the "Policy") is designed to
------------ reinforce Mellon Financial Corporation's ("Mellon's")
reputation for integrity by avoiding even the appearance of
impropriety in the conduct of Mellon's business. The Policy
sets forth procedures and limitations which govern the
personal securities transactions of every Mellon Employee.
Mellon and its employees are subject to certain laws and
regulations governing personal securities trading. Mellon has
developed this Policy to promote the highest standards of
behavior and ensure compliance with applicable laws.
Employees should be aware that they may be held personally
liable for any improper or illegal acts committed during the
course of their employment, and that "ignorance of the law"
is not a defense. Employees may be subject to civil penalties
such as fines, regulatory sanctions including suspensions, as
well as criminal penalties.
Employees outside the United States are also subject to
applicable laws of foreign jurisdictions, which may differ
substantially from US law and which may subject such
employees to additional requirements. Such employees must
comply with applicable requirements of pertinent foreign laws
as well as with the provisions of the Policy. To the extent
any particular portion of the Policy is inconsistent with
foreign law, employees should consult the General Counsel or
the Manager of Corporate Compliance.
Any provision of this Policy may be waived or exempted at the
discretion of the Manager of Corporate Compliance. Any such
waiver or exemption will be evidenced in writing and
maintained in the Audit and Risk Review Department.
Employees must read the Policy and must comply with it.
Failure to comply with the provisions of the Policy may
result in the imposition of serious sanctions, including but
not limited to disgorgement of profits, dismissal,
substantial personal liability and referral to law
enforcement agencies or other regulatory agencies. Employees
should retain the Policy in their records for future
reference. Any questions regarding the Policy should be
referred to the Manager of Corporate Compliance or his/her
designee.
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CLASSIFICATION OF The Policy is applicable to all employees of Mellon and all
EMPLOYEES of its subsidiaries which are more than 50% owned by Mellon.
This includes all full-time, part-time, benefited and
non-benefited, exempt and non-exempt, domestic and
international employees. It does not include consultants and
contract or temporary employees, nor employees of
subsidiaries which are 50% or less owned by Mellon. Although
the Policy provisions generally have worldwide applicability,
some sections of the Policy may conflict with the laws or
customs of the countries in which Mellon operations are
located. The Policy may be amended for operations outside the
United States only with the approval of the Manager of
Corporate Compliance.
Employees are engaged in a wide variety of activities for
Mellon. In light of the nature of their activities and the
impact of federal and state laws and the regulations
thereunder, the Policy imposes different requirements and
limitations on employees based on the nature of their
activities for Mellon. To assist employees in complying with
the requirements and limitations imposed on them in light of
their activities, employees are classified into one of four
categories: Insider Risk Employee, Investment Employee,
Access Decision Maker and Other Employee. Appropriate
requirements and limitations are specified in the Policy
based upon an employee's classification.
Business line management, in conjunction with the Manager of
Corporate Compliance, will determine the classification of
each employee based on the following guidelines. Employees
should confirm their classification with their Preclearance
Compliance Officer or the Manager of Corporate Compliance.
INSIDER RISK You are considered to be an Insider Risk Employee if, in the
EMPLOYEE normal conduct of your Mellon responsibilities, you are
likely to receive or be perceived to possess or receive,
material nonpublic information concerning Mellon's commercial
credit or corporate finance customers. This will typically
include certain employees in the credit, lending and leasing
businesses, certain members of the Audit and Risk Review, and
Legal Departments, and all members of the Senior Management
Committee who are not Investment Employees.
INVESTMENT You are considered to be an Investment Employee if, in the
EMPLOYEE normal conduct of your Mellon responsibilities, you are
likely to receive or be perceived to possess or receive,
material nonpublic information concerning Mellon's trading
in securities for Mellon's account or for the accounts of
others, and/or if you provide investment advice. This will
typically include:
o certain employees in fiduciary securities sales and
trading, investment management and advisory services,
investment research and various trust or fiduciary
functions;
o an employee of a Mellon entity registered under the
Investment Advisers Act of 1940 who is also an "Access
Person" as defined by Rule 17j-1 of the Investment Company
Act of 1940 (see glossary); and
o any member of Mellon's Senior Management Committee who, as
part of his/her usual duties, has management
responsibility for fiduciary activities or routinely has
access to information about customers' securities
transactions.
ACCESS DECISION A person designated as such by the Investment Ethics
MAKER (ADM) Committee. Generally, this will be portfolio managers
and research analysts who make recommendations or
decisions regarding the purchase or sale of equity,
convertible debt, and non-investment grade debt
securities for mutual funds and other managed accounts.
See further details in the Access Decision Maker edition
of the Policy.
OTHER You are considered to be an Other Employee if you are an
EMPLOYEE employee of Mellon Financial Corporation or any of
its direct or indirect subsidiaries who is not an Insider
Risk Employee, Investment Employee, or an ADM.
CONSULTANTS, Managers should inform consultants, independent contractors
INDEPENDENT and temporary employees of the general provisions of the
CONTRACTORS AND Policy (such as the prohibition on trading while in
TEMPORARY possession of material nonpublic information), but generally
EMPLOYEES they will not be required to preclear trades or report their
personal securities holdings. If one of these persons would
be considered an Insider Risk Employee, Investment Employee
or Access Decision Maker if the person were a Mellon
employee, the person's manager should advise the Manager of
Corporate Compliance who will determine whether such
individual should be subject to the preclearance and
reporting requirements of the Policy.
PERSONAL SECURITIES TRADING PRACTICES
SECTION ONE - APPLICABLE TO INSIDER RISK EMPLOYEES
[Download Table]
CONTENTS
Page
PERSONAL SECURITIES TRADING PRACTICES
SECTION ONE - APPLICABLE TO INSIDER RISK EMPLOYEES
Quick Reference - Insider Risk Employees 5
Standards of Conduct for Insider Risk Employees 6
--Conflict of Interest 6
--Material Nonpublic Information 6
--Brokers 6
--Personal Securities Transaction Reports 6
--Preclearance for Personal Securities Transactions 6
--Exemptions from Requirement to Preclear 7
--Gifting of Securities 8
--DRIPs, DPPs and AIPs 8
--Restricted List 8
--Confidential Treatment 9
Restrictions on Transactions in Mellon Securities 9
--Mellon 401(k) Plan 10
--Mellon Employee Stock Options 11
Restrictions on Transactions in Other Securities 11
--Prohibition on Investments in Securities of Financial 12
Services Organizations 13
Beneficial Ownership 13
Non-Mellon Employee Benefit Plans 13
Protecting Confidential Information 14
--Insider Trading and Tipping 15
--The "Chinese Wall"
GLOSSARY Definitions 43
Exhibit A - Sample Letter to Broker 49
QUICK REFERENCE - INSIDER RISK EMPLOYEES
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SOME THINGS 1. Duplicate Statements & Confirmations - Instruct your broker,
YOU MUST DO trust account manager or other entity through which you have
a securities trading account to send directly to MANAGER OF
CORPORATE COMPLIANCE, MELLON BANK, PO BOX 3130, PITTSBURGH,
PA 15230-3130:
o Trade confirmations summarizing each transaction
o Periodic statements
Exhibit B of this Policy can be used to notify your broker.
This applies to all accounts in which you have a beneficial
interest. (See Glossary)
2. Preclearance - Before initiating a securities transaction,
written preclearance must be obtained from the Manager of
Corporate Compliance. This can be done by completing a
Preclearance Request Form and:
o delivering the request to the Manager of Corporate
Compliance, AIM 151-4340,
o faxing the request to (412) 234-1516, or
o contacting the Manager of Corporate Compliance for
other available notification options.
Preclearance Request Forms can be obtained from Corporate
Compliance (412) 234-1661. If preclearance approval is
received the trade must be executed before the end of the 3rd
business day (with the date of approval being the 1st
business day), at which time the preclearance approval will
expire.
3. Special Approvals
o Acquisition of securities in a Private Placement must be
precleared by the employee's Department/Entity head and the
Manager of Corporate Compliance.
o Acquisition of securities through an allocation by the
underwriter of an Initial Public Offering (IPO) is prohibited
without the approval of the Manager of Corporate Compliance.
Approval can be given only when the allocation is the result
of a direct family relationship.
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SOME THINGS Mellon Securities - The following transactions in Mellon
YOU MUST NOT DO securities are prohibited for all Mellon Employees:
o Short sales
o Purchasing and selling or selling and purchasing within 60
days
o Purchasing or selling during a blackout period o Margin
purchases or options other than employee options.
Non-Mellon Securities - New investments in financial services
organizations are prohibited for certain employees only - see
page 12.
Other restrictions are detailed throughout Section One.
Read the Policy!
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EXEMPTIONS Preclearance is NOT required for:
---
o Purchases or sales of municipal bonds, non-financial
commodities (such as agricultural futures, metals, oil, gas,
etc.), currency futures, financial futures, index futures,
index securities, securities issued by investment companies,
commercial paper; CDs; bankers' acceptances; repurchase
agreements; and direct obligations of the government of the
United States.
o Transactions in any account over which the employee has no
direct or indirect control over the investment decision
making process.
o Transactions that are non-volitional on the part of an
employee (such as stock dividends).
o Changes in elections under Mellon's 401(k) Retirement Savings
Plan.
o An exercise of an employee stock option administered by Human
Resources.
o Automatic reinvestment of dividends under a DRIP or Automatic
Investment Plan. (Optional cash purchases under a DRIP or
Direct Purchase Plan do require preclearance.)
o Sales of securities pursuant to tender offers and sales or
exercises of "Rights".(see page 8).
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QUESTIONS? (412) 234-1661
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This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF Because of their particular responsibilities, Insider Risk
CONDUCT FOR Employees are subject to preclearance and personal securities
INSIDER RISK reporting requirements, as discussed below.
EMPLOYEES
Every Insider Risk Employee must follow these procedures or
risk serious sanctions, including dismissal. If you have any
questions about these procedures you should consult the
Manager of Corporate Compliance. Interpretive issues that
arise under these procedures shall be decided by, and are
subject to the discretion of, the Manager of Corporate
Compliance.
CONFLICT OF No employee may engage in or recommend any securities
INTEREST tansaction that places, or appears to place, his or her own
interests above those of any customer to whom financial
services are rendered, including mutual funds and managed
accounts, or above the interests of Mellon.
MATERIAL No employee may engage in or recommend a securities
NONPUBLIC transaction, for his or her own benefit or for the benefit
INFORMATION of others, including Mellon or its customers, while in
possession of material nonpublic information regarding such
securities. No employee may communicate material nonpublic
information to others unless it is properly within his or
her job responsibilities to do so.
BROKERS Trading Accounts - All Insider Risk Employees are encouraged
to conduct their personal investing through a Mellon
affiliate brokerage account. This will assist in the
monitoring of account activity on an ongoing basis in order
to ensure compliance with the Policy.
PERSONAL Trading Accounts - All Insider Risk Employees are required
SECURITIES to instruct their broker, trust account manager or other
TRANSACTIONS entity through which they have a securities trading account
REPORTS to submit directly to the Manager of Corporate Compliance
copies of all trade confirmations and statements relating to
each account of which they are a beneficial owner regardless
of what, if any, securities are maintained in such accounts.
Thus, for example, even if the brokerage account contains
only mutual funds or other exempt securities as that term is
defined by the Policy and the account has the capability to
have reportable securities traded in it, the Insider Risk
Employee maintaining such an account must arrange for
duplicate account statements and trade confirmations to be
sent by the broker to the Manager of Corporate Compliance.
An example of an instruction letter to a broker is contained
in Exhibit A.
PRECLEARANCE All Insider Risk Employees must notify the Manager of
FOR PERSONAL Corporate Compliance in writing and receive preclearance
SECURITIES before they engage in any purchase or sale of a
TRANSACTIONS security. Insider Risk Employees should refer
to the provisions under "Beneficial Ownership" below, which
are applicable to these provisions.
All requests for preclearance for a securities transaction
shall be submitted by completing a Preclearance Request Form
which can be obtained from the Manager of Corporate
Compliance.
The Manager of Corporate Compliance will notify the Insider
Risk Employee whether the request is approved or denied,
without disclosing the reason for such approval or denial.
Notifications may be given in writing or verbally by the
Manager of Corporate Compliance to the Insider Risk Employee.
A record of such notification will be maintained by the
Manager of Corporate Compliance. However, it shall be the
responsibility of the Insider Risk Employee to obtain a
written record of the Manager of Corporate Compliance's
notification within 24 hours of such notification. The
Insider Risk Employee should retain a copy of this written
record.
As there could be many reasons for preclearance being granted
or denied, Insider Risk Employees should not infer from the
preclearance response anything regarding the security for
which preclearance was requested.
Although making a preclearance request does not obligate an
Insider Risk Employee to do the transaction, it should be
noted that:
o preclearance requests should not be made for a transaction
that the Insider Risk Employee does not intend to make.
o preclearance authorization will expire at the end of the
third business day after it is received. The day
authorization is granted is considered the first business
day.
o Insider Risk Employees should not discuss with anyone
else, inside or outside Mellon, the response they received
to a preclearance request. If the Insider Risk Employee is
preclearing as beneficial owner of another's account, the
response may be disclosed to the other owner.
o Good Until Canceled/Stop Loss Orders ("Limit Orders") must
be precleared, and security transactions receiving
preclearance authorization must be executed before the
preclearance expires. At the end of the three-day
preclearance authorization period, any unexecuted Limit
Order must be canceled or a new preclearance authorization
must be obtained.
EXEMPTIONS FROM Preclearance by Insider Risk Employees is not required for
REQUIREMENT TO the following transactions:
PRECLEAR
o Purchases or sales of Exempt Securities (direct
obligations of the government of the United States; high
quality short-term debt instruments; bankers' acceptances;
CDs; commercial paper; repurchase agreements; and
securities issued by open-end investment companies);
o Purchases or sales of municipal bonds, closed-end mutual
funds; non-financial commodities (such as agricultural
futures, metals, oil, gas, etc.), currency futures,
financial futures, index futures and index securities;
o Purchases or sales effected in any account over which an
employee has no direct or indirect control over the
investment decision making process (e.g., discretionary
trading accounts). Discretionary trading accounts may only
be exempted from preclearance procedures, when the Manager
of Corporate Compliance, after a thorough review, is
satisfied that the account is truly discretionary;
o Transactions that are non-volitional on the part of an
employee (such as stock dividends);
o The sale of Mellon stock received upon the exercise of an
employee stock option if the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human
Resources Department (for which the Human Resources
Department will forward information to the Manager of
Corporate Compliance);
o Changes to elections in the Mellon 401(k) plan;
o Purchases effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of
securities, to the extent such rights were acquired from
such issuer;
o Sales of rights acquired from an issuer, as described
above; and/or
o Sales effected pursuant to a bona fide tender offer.
GIFTING OF Insider Risk Employees desiring to make a bona fide gift of
SECURITIES securities or who receive a bona fide gift, including an
inheritance, of securities do not need to preclear the
transaction. However, Insider Risk Employees must report such
bona fide gifts to the Manager of Corporate Compliance. The
report must be made within 10 days of making or receiving the
gift and must disclose the following information: the name of
the person receiving (giving) the gift, the date of the
transaction, and the name of the broker through which the
transaction was effected. A bona fide gift is one where the
donor does not receive anything of monetary value in return.
An Insider Risk Employee who purchases a security with the
intention of making a gift must preclear the purchase
transaction.
DRIPS, DPPS AND Certain companies with publicly traded securities establish:
AIPS
o Dividend Reinvestment Plans (DRIPs) - These permit
shareholders to have their dividend payments channeled to
the purchase of additional shares of such company's stock.
An additional benefit offered to DRIP participants is the
right to buy additional shares by sending in a check
before the dividend reinvestment date ("optional cash
purchases").
o Direct Purchase Plans (DPPs) - These allow purchasers to
buy stock by sending a check directly to the issuer,
without using a broker.
o Automatic Investment Plans (AIPs) - These allow purchasers
to set up a plan whereby a fixed amount of money is
automatically deducted from their checking account each
month and used to purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
Insider Risk Employees who enroll in a DRIP or AIP are not
required to preclear enrollment, the periodic reinvestment of
dividend payments into additional shares of company stock
through a DRIP, or the periodic investments through an AIP.
Insider Risk Employees must preclear all optional cash
purchases through a DRIP and all purchases through a DPP.
Insider Risk Employees must also preclear all sales through a
DRIP, DPP or AIP.
RESTRICTED LIST The Manager of Corporate Compliance will maintain a list
(the "Restricted List") of companies whose securities are
deemed appropriate for implementation of trading
restrictions for Insider Risk Employees. The Restricted List
will not be distributed outside of the office of Corporate
Compliance. From time to time, such trading restrictions may
be appropriate to protect Mellon and its Insider Risk
Employees from potential violations, or the appearance of
violations, of securities laws. The inclusion of a company
on the Restricted List provides no indication of the
advisability of an investment in the company's securities or
the existence of material nonpublic information on the
company. Nevertheless, the contents of the Restricted List
will be treated as confidential information to avoid
unwarranted inferences.
To assist the Manager of Corporate Compliance in identifying
companies that may be appropriate for inclusion on the
Restricted List, the department/entity heads in which Insider
Risk Employees are employed are required to inform the
Manager of Corporate Compliance in writing of any companies
they believe should be included on the Restricted List, based
upon facts known or readily available to such department
heads. Although the reasons for inclusion on the Restricted
List may vary, they could typically include the following:
o Mellon is involved as a lender, investor or adviser in a
merger, acquisition or financial restructuring involving
the company;
o Mellon is involved as a selling shareholder in a public
distribution of the company's securities;
o Mellon is involved as an agent in the distribution of the
company's securities;
o Mellon has received material nonpublic information on the
company;
o Mellon is considering the exercise of significant
creditors' rights against the company; or
o The company is a Mellon borrower in Credit Recovery.
Department heads of sections in which Insider Risk Employees
are employed are also responsible for notifying the Manager
of Corporate Compliance in writing of any change in
circumstances making it appropriate to remove a company from
the Restricted List.
The Manager of Corporate Compliance will retain copies of the
restricted lists for five years.
CONFIDENTIAL The Manager of Corporate Compliance will use his or her best
TREATMENT efforts to assure that all requests for preclearance, all
personal securities transaction reports and all reports of
securities holdings are treated as "Personal and
Confidential." However, such documents will be available for
inspection by appropriate regulatory agencies and by other
parties within and outside Mellon as are necessary to
evaluate compliance with or sanctions under this Policy.
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RESTRICTIONS ON Employees who engage in transactions involving Mellon
TRANSACTIONS IN securities should be aware of their unique responsibilities
MELLON with respect to such transactions arising from the
SECURITIES employment relationship and should be sensitive to even the
appearance of impropriety.
The following restrictions apply to all transactions in
Mellon's publicly traded securities occurring in the
employee's own account and in all other accounts over which
the employee could be presumed to exercise influence or
control (see provisions under "Beneficial Ownership" below
for a more complete discussion of the accounts to which these
restrictions apply). These restrictions are to be followed in
addition to any restrictions that apply to particular
officers or directors (such as restrictions under Section 16
of the Securities Exchange Act of 1934).
o Short Sales - Short sales of Mellon securities by
employees are prohibited.
o Short Term Trading - Employees are prohibited from
purchasing and selling, or from selling and purchasing,
Mellon securities within any 60 calendar day period.
o Margin Transactions - Purchases on margin of Mellon's
publicly traded securities by employees is prohibited.
Margining Mellon securities in connection with a cashless
exercise of an employee stock option through the Human
Resources Department is exempt from this restriction.
Further, Mellon securities may be used to collateralize
loans or the acquisition of securities other than those
issued by Mellon.
o Option Transactions - Option transactions involving
Mellon's publicly traded securities are prohibited.
Transactions under Mellon's Long-Term Incentive Plan or
other employee option plans are exempt from this
restriction.
o Major Mellon Events - Employees who have knowledge of
major Mellon events that have not yet been announced are
prohibited from buying or selling Mellon's publicly traded
securities before such public announcements, even if the
employee believes the event does not constitute material
nonpublic information.
o Mellon Blackout Period - Employees are prohibited from
buying or selling Mellon's publicly traded securities
during a blackout period. The blackout period begins the
16th day of the last month of each calendar quarter and
ends 3 business days after Mellon Financial Corporation
publicly announces the financial results for that quarter.
Thus, the blackout periods begin on March 16, June 16,
September 16 and December 16. The end of the blackout
period is determined by counting business days only, and
the day of the earnings announcement is day 1. The
blackout period ends at the end of day 3, and employees
can trade Mellon securities on day 4.
MELLON 401(K) For purposes of the blackout period and the short term
PLAN trading rule, employees' changing their existing account
balance allocation to increase or decrease the amount
allocated to Mellon Common Stock will be treated as a
purchase or sale of Mellon Stock, respectively. This means:
o Employees are prohibited from increasing or decreasing
their existing account balance allocation to Mellon Common
Stock during the blackout period.
o Employees are prohibited from increasing their existing
account balance allocation to Mellon Common Stock and then
decreasing it within 60 days. Similarly, employees are
prohibited from decreasing their existing account balance
allocation to Mellon Common Stock and then increasing it
within 60 days. However, changes to existing account
balance allocations in the 401(k) plan will not be
compared to transactions in Mellon securities outside the
401(k) for purposes of the 60-day rule. (Note: this does
not apply to members of the Executive Management Group,
who should consult with the Legal Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for example:
o Employees are not required to preclear any elections or
changes made in their 401(k) account.
o There is no restriction on employees' changing their
salary deferral contribution percentages with regard to
either the blackout period or the 60-day rule.
o The regular salary deferral contribution to Mellon Common
Stock in the 401(k) that takes place with each pay will
not be considered a purchase for the purposes of either
the blackout or the 60-day rule.
MELLON EMPLOYEE Receipt - Your receipt of an employee stock option from
STOCK OPTIONS Mellon is not deemed to be a purchase of a security.
Therefore, it is exempt from preclearance and reporting
requirements, can take place during the blackout period and
does not constitute a purchase for purposes of the 60-day
prohibition.
Exercises - The exercise of an employee stock option that
results in your holding the shares is exempt from
preclearance and reporting requirements, can take place
during the blackout period and does not constitute a purchase
for purposes of the 60-day prohibition.
"Cashless" Exercises - The exercise of an employee stock
option which is part of a "cashless exercise" or "netting of
shares" that is administered by the Human Resources
Department or Chase Mellon Shareholder Services is exempt
from the preclearance and reporting requirements and will not
constitute a purchase or a sale for purposes of the 60-day
prohibition. A "cashless exercise" or "netting of shares"
transaction is permitted during the blackout period for
ShareSuccess plan options only. They are not permitted during
the blackout period for any other plan options.
Sales - The sale of the Mellon securities that were received
in the exercise of an employee stock option is treated like
any other sale under the Policy (regardless of how little
time has elapsed between the option exercise and the sale).
Thus, such sales are subject to the preclearance and
reporting requirements, are prohibited during the blackout
period and constitute sales for purposes of the 60-day
prohibition.
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RESTRICTIONS ON Purchases or sales by an employee of the securities of
TRANSACTIONS IN issuers with which Mellon does business, or other third
OTHER party issuers, could result in liability on the part of such
SECURITIES employee. Employees should be sensitive to even the
appearance of impropriety in connection with their personal
securities transactions. Employees should refer to
"Beneficial Ownership" below, which is applicable to the
following restrictions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon.
Employees should refer to the Code of Conduct and comply with
such restrictions in addition to the restrictions and
reporting requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
o Credit, Consulting or Advisory Relationship - Employees
may not buy or sell securities of a company if they are
considering granting, renewing, modifying or denying any
credit facility to that company, acting as a benefits
consultant to that company, or acting as an adviser to
that company with respect to the company's own securities.
In addition, lending employees who have assigned
responsibilities in a specific industry group are not
permitted to trade securities in that industry. This
prohibition does not apply to transactions in open end
mutual funds.
o Customer Transactions - Trading for customers and Mellon
accounts should always take precedence over employees'
transactions for their own or related accounts.
o Excessive Trading, Naked Options - Mellon discourages all
employees from engaging in short-term or speculative
trading, in trading naked options, in trading that could
be deemed excessive or in trading that could interfere
with an employee's job responsibilities.
o Front Running - Employees may not engage in "front
running," that is, the purchase or sale of securities for
their own accounts on the basis of their knowledge of
Mellon's trading positions or plans.
o Initial Public Offerings - Insider Risk Employees are
prohibited from acquiring securities through an allocation
by the underwriter of an Initial Public Offering (IPO)
without the approval of the Manager of Corporate
Compliance. Approval can be given only when the allocation
comes through an employee of the issuer who is a direct
family relation of the Insider Risk Employee. Due to NASD
rules, this approval may not be available to employees of
registered broker/dealers.
o Material Nonpublic Information - Employees possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling
securities of that issuer until the information becomes
public or is no longer considered material.
o Private Placements - Insider Risk Employees are prohibited
from acquiring any security in a private placement unless
they obtain the prior written approval of the Manager of
Corporate Compliance and the employee's department head.
Approval must be given by both persons for the acquisition
to be considered approved. After receipt of the necessary
approvals and the acquisition, employees are required to
disclose that investment if they participate in any
subsequent consideration of credit for the issuer, or of
an investment in the issuer for an advised account. Final
decision to acquire such securities for an advised account
will be subject to independent review.
o Scalping - Employees may not engage in "scalping," that
is, the purchase or sale of securities for their own or
Mellon's accounts on the basis of knowledge of customers'
trading positions or plans.
o Short Term Trading - All Employees are discouraged from
purchasing and selling, or from selling and purchasing,
the same (or equivalent) securities within any 60 calendar
day period.
PROHIBITION ON You are prohibited from acquiring any security issued by a
INVESTMENTS IN financial services organization if you are:
SECURITIES OF
FINANCIAL o a member of the Mellon Senior Management Committee.
SERVICES
ORGANIZATIONS o employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
o an employee specifically designated by the Manager of
Corporate Compliance and informed that this prohibition is
applicable to you.
Financial Services Organizations - The term "security issued
by a financial services organization" includes any security
issued by:
- Commercial Banks other than - Thrifts
Mellon - Savings and Loan
- Bank Holding Companies other Associations
than Mellon - Broker/Dealers
- Insurance Companies - Transfer Agents
- Investment Advisory Companies - Other Depository
- Shareholder Servicing Companies Institutions
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by mutual
funds, variable annuities or insurance policies. Further, for
purposes of determining whether a company is a financial
services organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services
organizations properly acquired before the employee's
becoming subject to this prohibition may be maintained or
disposed of at the owner's discretion consistent with this
policy.
Additional securities of a financial services organization
acquired through the reinvestment of the dividends paid by
such financial services organization through a dividend
reinvestment program (DRIP), or through an automatic
investment plan (AIP) are not subject to this prohibition,
provided the employee's election to participate in the DRIP
or AIP predates the date of the employee's becoming subject
to this prohibition. Optional cash purchases through a DRIP
or direct purchase plan (DPP) are subject to this
prohibition.
Securities acquired in any account over which an employee has
no direct or indirect control over the investment decision
making process (e.g., discretionary trading accounts) are not
subject to this prohibition.
Within 30 days of becoming subject to this prohibition, all
holdings of securities of financial services organizations
must be disclosed in writing to the Manager of Corporate
Compliance.
BENEFICIAL The provisions of the Policy apply to transactions in the
OWNERSHIP employee's own name and to all other accounts over which the
employee could be presumed to exercise influence or control,
including:
o accounts of a spouse, minor children or relatives to whom
substantial support is contributed;
o accounts of any other member of the employee's household
(e.g., a relative living in the same home);
o trust or other accounts for which the employee acts as
trustee or otherwise exercises any type of guidance or
influence;
o corporate accounts controlled, directly or indirectly, by
the employee;
o arrangements similar to trust accounts that are
established for bona fide financial purposes and benefit
the employee; and
o any other account for which the employee is the beneficial
owner (see Glossary for a more complete legal definition
of "beneficial owner").
NON-MELLON The provisions discussed above do not apply to transactions
EMPLOYEE BENEFIT done under a bona fide employee benefit plan administered by an
PLANS organization not affiliated with Mellon and by an employee
of that organization who shares beneficial interest with a
Mellon employee, and in the securities of the employing
organization. This means if a Mellon employee's spouse is
employed at a non-Mellon company, the Mellon employee is not
required to obtain approval for transactions in the
employer's securities done by the spouse as part of the
spouse's employee benefit plan.
The Securities Trading Policy does not apply in such a
situation. Rather, the other organization is relied upon to
provide adequate supervision with respect to conflicts of
interest and compliance with securities laws.
--------------------------------------------------------------------------------
PROTECTING As an employee you may receive information about Mellon, its
CONFIDENTIAL customers and other parties that, for various reasons,
INFORMATION should be treated as confidential. All employees are
expected to strictly comply with measures necessary to
preserve the confidentiality of information. Employees
should refer to the Mellon Code of Conduct.
INSIDER TRADING Federal securities laws generally prohibit the trading of
AND TIPPING securities while in possession of "material nonpublic"
information regarding the issuer of those securities (insider
LEGAL trading). Any person who passes along material nonpublic
PROHIBITIONS information upon which a trade is based (tipping) may also be
liable.
Information is "material" if there is a substantial
likelihood that a reasonable investor would consider it
important in deciding whether to buy, sell or hold
securities. Obviously, information that would affect the
market price of a security would be material. Examples of
information that might be material include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial
assets;
o tender offers, which are often material for the party
making the tender offer as well as for the issuer of the
securities for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors,
customers or suppliers relating to a company's credit
standing;
o earnings and other financial information, such as large or
unusual write-offs, write-downs, profits or losses;
o pending discoveries or developments, such as new products,
sources of materials, patents, processes, inventions or
discoveries of mineral deposits;
o a proposal or agreement concerning a financial
restructuring;
o a proposal to issue or redeem securities, or a development
with respect to a pending issuance or redemption of
securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or
decreases in orders;
o the institution of, or a development in, litigation or a
regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director of
that company; and
o information regarding a company's possible noncompliance
with environmental protection laws.
This list is not exhaustive. All relevant circumstances must
be considered when determining whether an item of information
is material.
"Nonpublic" - Information about a company is nonpublic if it
is not generally available to the investing public.
Information received under circumstances indicating that it
is not yet in general circulation and which may be
attributable, directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic information.
If you obtain material non-public information you may not
trade related securities until you can refer to some public
source to show that the information is generally available
(that is, available from sources other than inside sources)
and that enough time has passed to allow wide dissemination
of the information. While information appearing in widely
accessible sources--such as in newspapers or on the
internet--becomes public very soon after publication,
information appearing in less accessible sources--such as
regulatory filings, may take up to several days to be deemed
public. Similarly, highly complex information might take
longer to become public than would information that is easily
understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information about a
company--whether that company is Mellon, another Mellon
entity, a Mellon customer or supplier, or other company--may
not trade in that company's securities, either for their own
accounts or for any account over which they exercise
investment discretion. In addition, employees may not
recommend trading in those securities and may not pass the
information along to others, except to employees who need to
know the information in order to perform their job
responsibilities with Mellon. These prohibitions remain in
effect until the information has become public.
Employees who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic
information. Receiving such information could create severe
limitations on their ability to carry out their
responsibilities to Mellon's fiduciary customers.
Employees managing the work of consultants and temporary
employees who have access to the types of confidential
information described in this Policy are responsible for
ensuring that consultants and temporary employees are aware
of Mellon's policy and the consequences of noncompliance.
Questions regarding Mellon's policy on material nonpublic
information, or specific information that might be subject to
it, should be referred to the General Counsel.
RESTRICTIONS ON As a diversified financial services organization, Mellon
THE faces unique challenges in complying with the prohibitions
FLOW OF on insider trading and tipping of material non-public
INFORMATION information, and misuse of confidential information. This is
WITHIN because one Mellon unit might have material nonpublic
MELLON information about a company while other Mellon units may
(THE "CHINESE have a desire, or even a fiduciary duty, to buy or sell that
WALL) company's securities or recommend such purchases or sales to
customers. To engage in such broad-ranging financial
services activities without violating laws or breaching
Mellon's fiduciary duties, Mellon has established a "Chinese
Wall" policy applicable to all employees. The "Chinese Wall"
separates the Mellon units or individuals that are likely to
receive material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that either
trade in securities--for Mellon's account or for the
accounts of others--or provide investment advice (Investment
Functions). Employees should refer to CPP 903-2(C) The
Chinese Wall. have a desire, or even a fiduciary duty, to
buy or sell that company's securities or recommend such
purchases or sales to customers. To engage in such
broad-ranging financial services activities without
violating laws or breaching Mellon's fiduciary duties,
Mellon has established a "Chinese Wall" policy applicable to
all employees. The "Chinese Wall" separates the Mellon units
or individuals that are likely to receive material nonpublic
information (Potential Insider Functions) from the Mellon
units or individuals that either trade in securities--for
Mellon's account or for the accounts of others--or provide
investment advice (Investment Functions). Employees should
refer to CPP 903-2(C) The Chinese Wall.
PERSONAL SECURITIES TRADING PRACTICES
SECTION TWO - APPLICABLE TO INVESTMENT EMPLOYEES
CONTENTS
Page
PERSONAL SECURITIES TRADING PRACTICES
SECTION TWO - APPLICABLE TO INVESTMENT EMPLOYEES
Quick Reference - Investment Employees .......................19
Standards of Conduct for Investment Employees ................20
--Conflict of Interest .....................................20
--Material Nonpublic Information ...........................20
--Brokers ..................................................20
--Personal Securities Transaction Reports ..................20
--Preclearance for Personal Securities Transactions ........21
--Blackout Policy ..........................................22
--Exemptions from Requirement to Preclear ..................22
--Gifting of Securities ....................................22
--DRIPs, DPPs and AIPs .....................................23
--Statement of Securities Accounts and Holdings ............23
--Restricted List ..........................................24
--Confidential Treatment ...................................24
Restrictions on Transactions in Mellon Securities ............24
--Mellon 401(k) Plan .......................................25
--Mellon Employee Stock Options ............................26
Restrictions on Transactions in Other Securities .............26
--Prohibition on Investments in Securities of
Financial Services Organizations .........................27
Beneficial Ownership .........................................28
Non-Mellon Employee Benefit Plans ............................28
Protecting Confidential Information ..........................29
--Insider Trading and Tipping ..............................29
--The "Chinese Wall" .......................................30
Special Procedures for Access Decision Makers ................30
GLOSSARY Definitions ..................................................43
Exhibit A - Sample Letter to Broker ..........................49
QUICK REFERENCE - INVESTMENT EMPLOYEES
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SOME THINGS 1. Statement of Accounts and Holdings - Provide to your
YOU MUST DO Preclearance Compliance Officer a statement of all
securities accounts and holdings within 10 days of becoming an
Investment Employee, and again annually on request.
2. Duplicate Statements & Confirmations - Instruct your broker,
trust account manager or other entity through which you have a
securities trading account to send directly to Compliance:
o Trade confirmations summarizing each transaction
o Periodic statements
Exhibit A can be used to notify your broker. Contact your
designated Preclearance Compliance Officer for the correct
address. This applies to all accounts in which you have a
beneficial interest.
3. Preclearance - Before initiating a securities transaction,
written preclearance must be obtained from the designated
Preclearance Compliance Officer. This can be accomplished by
completing a Preclearance Request Form and:
o delivering or faxing the request to the designated
Preclearance Compliance Officer, or
o contacting the designated Preclearance Compliance
Officer for other available notification options.
Preclearance Request Forms can be obtained from the designated
Preclearance Compliance Officer. If preclearance approval is
received the trade must be communicated to the broker on the
same day, and executed before the end of the next business day,
at which time the preclearance approval will expire.
4. Special Approvals
o Acquisition of securities in a Private Placement must be
precleared by the employee's Department/Entity head, the
Manager of Corporate Compliance and the designated Preclearance
Compliance Officer.
o Acquisition of securities through an allocation by the
underwriter of an Initial Public Offering (IPO) is prohibited
without the approval of the Manager of Corporate Compliance.
Approval can be given only when the allocation is the result of
a direct family relationship.
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SOME THINGS Mellon Securities - The following transactions in Mellon
YOU MUST NOT securities are prohibited for all Mellon Employees:
DO o Short sales
o Purchasing and selling or selling and purchasing within
60 days
o Purchasing or selling during a blackout period o Margin
purchases or options other than employee options.
Non-Mellon Securities
o Purchasing and selling or selling and purchasing within 60 days
is discouraged, and any profits must be disgorged.
o New investments in financial services organizations are
prohibited for certain employees only - see page 27.
Other restrictions are detailed throughout Section Two. Read
the Policy!
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EXEMPTIONS Preclearance is NOT required for:
o Purchases or sales of high quality short-term debt instruments,
non-financial commodities (such as agricultural futures,
metals, oil, gas, etc.), currency futures, financial futures,
index futures, index securities, open-end mutual funds,
non-affiliated closed-end investment companies, commercial
paper; CDs; bankers' acceptances; repurchase agreements; and
direct obligations of the government of the United States.)
o Transactions in any account over which the employee has no
direct or indirect control over the investment decision making
process.
o Transactions that are non-volitional on the part of an employee
(such as stock dividends).
o Changes in elections under Mellon's 401(k) Retirement Savings
Plan.
o An exercise of an employee stock option administered by Human
Resources.
o Automatic reinvestment of dividends under a DRIP or Automatic
Investment Plan. (Optional cash purchases under a DRIP or
Direct Purchase Plan do require preclearance.
o Sales of securities pursuant to tender offers and sales or
exercises of "Rights".(see page 22).
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
QUESTIONS? Contact your designated Preclearance Compliance Officer. If
you don't know who that is, call 412-234-1661
-----------------------------------------------------------------------------
This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
-----------------------------------------------------------------------------
STANDARDS OF Because of their particular responsibilities, Investment
CONDUCT FOR Employees are subject to preclearance and personal
INVESTMENT securities reporting requirements, as discussed below.
EMPLOYEES
Every Investment Employee must follow these procedures or risk
serious sanctions, including dismissal. If you have any
questions about these procedures you should consult the Manager
of Corporate Compliance. Interpretive issues that arise under
these procedures shall be decided by, and are subject to the
discretion of, the Manager of Corporate Compliance.
CONFLICT OF No employee may engage in or recommend any securities
INTEREST transaction that places, or appears to place, his or her
own interests above those of any customer to whom financial
services are rendered, including mutual funds and managed
accounts, or above the interests of Mellon.
MATERIAL No employee may divulge the current portfolio positions, or
NONPUBLIC current or anticipated portfolio transactions, programs or
INFORMATION studies, of Mellon or any Mellon customer to anyone unless
it is properly within his or her job responsibilities to do
so.
No employee may engage in or recommend a securities transaction,
for his or her own benefit or for the benefit of others,
including Mellon or its customers, while in possession of
material nonpublic information regarding such securities. No
employee may communicate material nonpublic information to
others unless it is properly within his or her job
responsibilities to do so.
BROKERS Trading Accounts - All Investment Employees are encouraged to
conduct their personal investing through a Mellon affiliate
brokerage account. This will assist in the monitoring of account
activity on an ongoing basis in order to ensure compliance with
the Policy.
PERSONAL Statements & Confirmations - All Investment Employees are
SECURITIES required to instruct their broker, trust account manager or
TRANSACTIONS other entity through which they have a securities trading
REPORTS account to submit directly to the Manager of Corporate
Compliance or designated Preclearance Compliance Officer copies
of all trade confirmations and statements relating to each
account of which they are a beneficial owner regardless of what,
if any, securities are maintained in such accounts. Thus, for
example, even if the brokerage account contains only mutual
funds or other exempt securities as that term is defined by the
Policy and the account has the capability to have reportable
securities traded in it, the Investment Employee maintaining
such an account must arrange for duplicate account statements
and trade confirmations to be sent by the broker to the Manager
of Corporate Compliance or designated Preclearance Compliance
Officer. Exhibit A is an example of an instruction letter to a
broker.
Other securities transactions which were not completed through a
brokerage account, such as gifts, inheritances, spin-offs from
securities held outside brokerage accounts, or other transfers
must be reported to the designated Preclearance Compliance
Officer within 10 days.
PRECLEARANCE All Investment Employees must notify the designated
FOR PERSONAL Preclearance Compliance Officer in writing and receive
SECURITIES preclearance before they engage in any purchase or sale of
TRANSACTIONS a security for their own accounts. Investment Employees
should refer to the provisions under "Beneficial Ownership"
below, which are applicable to these provisions.
All requests for preclearance for a securities transaction shall
be submitted by completing a Preclearance Request Form which can
be obtained from the designated Preclearance Compliance Officer.
The designated Preclearance Compliance Officer will notify the
Investment Employee whether the request is approved or denied,
without disclosing the reason for such approval or denial.
Notifications may be given in writing or verbally by the
designated Preclearance Compliance Officer to the Investment
Employee. A record of such notification will be maintained by
the designated Preclearance Compliance Officer. However, it
shall be the responsibility of the Investment Employee to obtain
a written record of the designated Preclearance Compliance
Officer's notification within 48 hours of such notification. The
Investment Employee should retain a copy of this written record.
As there could be many reasons for preclearance being granted or
denied, Investment Employees should not infer from the
preclearance response anything regarding the security for which
preclearance was requested.
Although making a preclearance request does not obligate an
Investment Employee to do the transaction, it should be noted
that:
o Preclearance requests should not be made for a transaction
that the Investment Employee does not intend to make.
o The order for a transaction must be placed with the broker on
the same day that preclearance authorization is received. The
broker must execute the trade close of business on the next
business day, at which time the preclearance authorization
will expire.
o Investment Employees should not discuss with anyone else,
inside or outside Mellon, the response they received to a
preclearance request. If the Investment Employee is
preclearing as beneficial owner of another's account, the
response may be disclosed to the other owner.
o Good Until Canceled/Stop Loss Orders ("Limit Orders") must be
precleared, and security transactions receiving preclearance
authorization must be executed before the preclearance
expires. At the end of the preclearance authorization period,
any unexecuted Limit Order must be canceled or a new
preclearance authorization must be obtained.
BLACKOUT POLICY Except as described below, Investment Employees will not
generally be given clearance to execute a transaction in any
security that is on the restricted list maintained by their
Preclearance Compliance Officer, or for which there is a pending
buy or sell order for an affiliated account. This provision does
not apply to transactions effected or contemplated by index
funds.
Exceptions - Regardless of any restrictions above, Investment
Employees will generally be given clearance to execute the
following transactions:
o Purchase or sale of up to $50,000 of securities of the
top 200 issuers on the Russell list of largest publicly
traded companies.
o Purchase or sale of up to the greater of 100 shares or
$10,000 of securities ranked 201 to 500 on the Russell
list of largest publicly traded companies.
The Investment Employee is limited to two such trades in the
securities of any one issuer in any calendar month.
EXEMPTIONS Preclearance is not required for the following transactions:
FROM
REQUIREMENT TO o Purchases or sales of Exempt Securities (direct
PRECLEAR obligations of the government of the United States; high
quality short-term debt instruments; bankers' acceptances;
CDs; commercial paper; repurchase agreements; and securities
issued by open-end investment companies);
o Purchases or sales of non-affiliated closed-end investment
companies; non-financial commodities (such as agricultural
futures, metals, oil, gas, etc.), currency futures, financial
futures, index futures and index securities;
o Purchases or sales effected in any account over which an
employee has no direct or indirect control over the
investment decision making process (e.g., discretionary
trading accounts). Discretionary trading accounts may only be
maintained, without being subject to preclearance procedures,
when the Manager of Corporate Compliance, after a thorough
review, is satisfied that the account is truly discretionary;
o Transactions that are non-volitional on the part of
an employee (such as stock dividends);
o The sale of Mellon stock received upon the exercise of an
employee stock option if the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human
Resources Department (for which the Human Resources
Department will forward information to the Manager of
Corporate Compliance);
o Changes to elections in the Mellon 401(k) plan;
o Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to
the extent such rights were acquired from such issuer;
o Sales of rights acquired from an issuer, as described
above; and/or
o Sales effected pursuant to a bona fide tender offer.
GIFTING OF Investment Employees desiring to make a bona fide gift of
SECURITIES securities or who receive a bona fide gift of securities do
not need to preclear the transaction. However, Investment
Employees must report such bona fide gifts to the Manager of
Corporate Compliance. The report must be made within 10 days of
making or receiving the gift and must disclose the following
information: the name of the person receiving (giving) the gift,
the date of the transaction, and the name of the broker through
which the transaction was effected. A bona fide gift is one
where the donor does not receive anything of monetary value in
return. An Investment Employee who purchases a security with the
intention of making a gift must preclear the purchase
transaction.
DRIPS, DPPS Certain companies with publicly traded securities establish:
AND AIPS
o Dividend Reinvestment Plans (DRIPs) - These permit
shareholders to have their dividend payments channeled to the
purchase of additional shares of such company's stock. An
additional benefit offered to DRIP participants is the right
to buy additional shares by sending in a check before the
dividend reinvestment date ("optional cash purchases").
o Direct Purchase Plans (DPPs) - These allow purchasers to buy
stock by sending a check directly to the issuer, without
using a broker.
o Automatic Investment Plans (AIPs) - These allow purchasers to
set up a plan whereby a fixed amount of money is
automatically deducted from their checking account each month
and used to purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
Investment Employees who enroll in a DRIP or AIP are not
required to preclear enrollment, the periodic reinvestment of
dividend payments into additional shares of company stock
through a DRIP, or the periodic investments through an AIP.
Investment Employees must preclear all optional cash purchases
through a DRIP and all purchases through a DPP. Investment
Employees must also preclear all sales through a DRIP, DPP or
AIP.
STATEMENT OF Within ten days of receiving this Policy and on an annual
SECURITIES basis thereafter, all Investment Employees must submit to
ACCOUNTS AND the Manager of Corporate Compliance:
HOLDINGS
o a listing of all securities trading accounts in which
the employee has a beneficial interest.
o a statement of all securities in which they presently have
any direct or indirect beneficial ownership other than Exempt
Securities, as defined in the Glossary.
The annual report must be completed upon the request of
Corporate Compliance, and the information submitted must be
current within 30 days of the date the report is submitted. The
annual statement of securities holdings contains an
acknowledgment that the Investment Employee has read and
complied with this Policy.
RESTRICTED LIST Each Preclearance Compliance Officer will maintain a list
(the "Restricted List") of companies whose securities are deemed
appropriate for implementation of trading restrictions for
Investment Employees in their area. From time to time, such
trading restrictions may be appropriate to protect Mellon and
its Investment Employees from potential violations, or the
appearance of violations, of securities laws. The inclusion of a
company on the Restricted List provides no indication of the
advisability of an investment in the company's securities or the
existence of material nonpublic information on the company.
Nevertheless, the contents of the Restricted List will be
treated as confidential information in order to avoid
unwarranted inferences.
The Preclearance Compliance Officer will retain copies of the
restricted lists for five years.
CONFIDENTIAL The Manager of Corporate Compliance and/or Preclearance
TREATMENT Compliance Officer will use his or her best efforts to
assure that all requests for preclearance, all personal
securities transaction reports and all reports of securities
holdings are treated as "Personal and Confidential." However,
such documents will be available for inspection by appropriate
regulatory agencies, and by other parties within and outside
Mellon as are necessary to evaluate compliance with or sanctions
under this Policy. Documents received from Investment Employees
are also available for inspection by the boards of directors of
40-Act entities and by the boards of directors (or trustees or
managing general partners, as applicable) of the investment
companies managed or administered by 40-Act entities.
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RESTRICTIONS Investment Employees who engage in transactions involving
ON Mellon securities should be aware of their unique
TRANSACTIONS responsibilities with respect to such transactions arising
IN MELLON from the employment relationship and should be sensitive to
SECURITIES even the appearance of impropriety.
The following restrictions apply to all transactions in Mellon's
publicly traded securities occurring in the employee's own
account and in all other accounts over which the employee could
be presumed to exercise influence or control (see provisions
under "Beneficial Ownership" below for a more complete
discussion of the accounts to which these restrictions apply).
These restrictions are to be followed in addition to any
restrictions that apply to particular officers or directors
(such as restrictions under Section 16 of the Securities
Exchange Act of 1934). o Short Sales - Short sales of Mellon
securities by employees are prohibited.
o Short Term Trading - Investment Employees are prohibited from
purchasing and selling, or from selling and purchasing Mellon
securities within any 60 calendar day period. In addition to
any other sanction, any profits realized on such short term
trades must be disgorged in accordance with procedures
established by senior management.
o Margin Transactions - Purchases on margin of Mellon's
publicly traded securities by employees is prohibited.
Margining Mellon securities in connection with a cashless
exercise of an employee stock option through the Human
Resources Department is exempt from this restriction.
Further, Mellon securities may be used to collateralize loans
or the acquisition of securities other than those issued by
Mellon.
o Option Transactions - Option transactions involving Mellon's
publicly traded securities are prohibited. Transactions under
Mellon's Long-Term Incentive Plan or other employee option
plans are exempt from this restriction.
o Major Mellon Events - Employees who have knowledge of major
Mellon events that have not yet been announced are prohibited
from buying or selling Mellon's publicly traded securities
before such public announcements, even if the employee
believes the event does not constitute material nonpublic
information.
o Mellon Blackout Period - Employees are prohibited from buying
or selling Mellon's publicly traded securities during a
blackout period. The blackout period begins the 16th day of
the last month of each calendar quarter and ends 3 business
days after Mellon Financial Corporation publicly announces
the financial results for that quarter. Thus, the blackout
periods begin on March 16, June 16, September 16 and December
16. The end of the blackout period is determined by counting
business days only, and the day of the earnings announcement
is day 1. The blackout period ends at the end of day 3, and
employees can trade Mellon securities on day 4.
MELLON 401(K) For purposes of the blackout period and the short term
PLAN trading rule, employees' changing their existing account
balance allocation to increase or decrease the amount allocated
to Mellon Common Stock will be treated as a purchase or sale of
Mellon Stock, respectively. This means:
o Employees are prohibited from increasing or decreasing their
existing account balance allocation to Mellon Common Stock
during the blackout period.
o Employees are prohibited from increasing their existing
account balance allocation to Mellon Common Stock and then
decreasing it within 60 days. Similarly, employees are
prohibited from decreasing their existing account balance
allocation to Mellon Common Stock and then increasing it
within 60 days. However:
- with respect to Investment Employees, any profits
realized on short term changes in the 401(k) will not
have to be disgorged.
- changes to existing account balance allocations in the
401(k) plan will not be compared to transactions in
Mellon securities outside the 401(k) for purposes of the
60-day rule. (Note: this does not apply to members of
the Executive Management Group, who should consult with
the Legal Department.)
Except for the above there are no other restrictions applicable
to the 401(k) plan. This means, for example:
o Employees are not required to preclear any elections or
changes made in their 401(k) account.
o There is no restriction on employees' changing their salary
deferral contribution percentages with regard to either the
blackout period or the 60-day rule.
o The regular salary deferral contribution to Mellon Common
Stock in the 401(k) that takes place with each pay will not
be considered a purchase for the purposes of either the
blackout or the 60-day rule.
MELLON Receipt - Your receipt of an employee stock option from
EMPLOYEE STOCK Mellon is not deemed to be a purchase of a security.
OPTIONS Therefore, it is exempt from preclearance and reporting
requirements, can take place during the blackout period and does
not constitute a purchase for purposes of the 60-day
prohibition.
Exercises - The exercise of an employee stock option that
results in your holding the shares is exempt from preclearance
and reporting requirements, can take place during the blackout
period and does not constitute a purchase for purposes of the
60-day prohibition.
"Cashless" Exercises - The exercise of an employee stock option
which is part of a "cashless exercise" or "netting of shares"
that is administered by the Human Resources Department or Chase
Mellon Shareholder Services is exempt from the preclearance and
reporting requirements and will not constitute a purchase or a
sale for purposes of the 60-day prohibition. A "cashless
exercise" or "netting of shares" transaction is permitted during
the blackout period for ShareSuccess plan options only. They are
not permitted during the blackout period for any other plan
options.
Sales - The sale of the Mellon securities that were received in
the exercise of an employee stock option is treated like any
other sale under the Policy (regardless of how little time has
elapsed between the option exercise and the sale). Thus, such
sales are subject to the preclearance and reporting
requirements, are prohibited during the blackout period and
constitute sales for purposes of the 60-day prohibition.
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RESTRICTIONS Purchases or sales by an employee of the securities of
ON issuers with which Mellon does business, or other third
TRANSACTIONS party issuers, could result in liability on the part of
IN OTHER such employee. Employees should be sensitive to even the
SECURITIES appearance of impropriety in connection with their personal
securities transactions. Employees should refer to
"Beneficial Ownership" below, which is applicable to the
following restrictions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon. Employees
should refer to the Code of Conduct and comply with such
restrictions in addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities transactions
by employees:
o Customer Transactions - Trading for customers and Mellon
accounts should always take precedence over employees'
transactions for their own or related accounts.
o Excessive Trading, Naked Options - Mellon discourages all
employees from engaging in short-term or speculative trading,
in trading naked options, in trading that could be deemed
excessive or in trading that could interfere with an
employee's job responsibilities.
o Front Running - Employees may not engage in "front running,"
that is, the purchase or sale of securities for their own
accounts on the basis of their knowledge of Mellon's trading
positions or plans.
o Initial Public Offerings - Investment Employees are
prohibited from acquiring securities through an allocation by
the underwriter of an Initial Public Offering (IPO) without
the approval of the Manager of Corporate Compliance. Approval
can be given only when the allocation comes through an
employee of the issuer who is a direct family relation of the
Investment Employee. Due to NASD rules, this approval may not
be available to employees of registered broker/dealers.
o Material Nonpublic Information - Employees possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling securities
of that issuer until the information becomes public or is no
longer considered material.
o Private Placements - Investment Employees are prohibited from
acquiring any security in a private placement unless they
obtain the prior written approval of the Manager of Corporate
Compliance, the designated Preclearance Compliance Officer
and the Investment Employee's department head. Approval must
be given by all three persons for the acquisition to be
considered approved. After receipt of the necessary approvals
and the acquisition, Investment Employees are required to
disclose that investment if they participate in any
subsequent consideration of credit for the issuer, or of an
investment in the issuer for an advised account. Final
decision to acquire such securities for an advised account
will be subject to independent review.
o Scalping - Employees may not engage in "scalping," that is,
the purchase or sale of securities for their own or Mellon's
accounts on the basis of knowledge of customers' trading
positions or plans.
o Short Term Trading - All Employees are discouraged from
purchasing and selling, or from selling and purchasing, the
same (or equivalent) securities within any 60 calendar day
period. With respect to Investment Employees, any profits
realized on such short term trades must be disgorged in
accordance with procedures established by senior management.
Exception: securities may be sold pursuant to a bona fide
tender offer without disgorgement under the 60-day rule.
PROHIBITION ON You are prohibited from acquiring any security issued by a
INVESTMENTS IN financial services organization if you are:
SECURITIES OF
FINANCIAL o a member of the Mellon Senior Management Committee.
SERVICES
ORGANIZATIONS o employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
o an employee specifically designated by the Manager of
Corporate Compliance and informed that this prohibition is
applicable to you.
Financial Services Organizations - The term "security issued by
a financial services organization" includes any security issued
by:
-Commercial Banks other - Thrifts
than Mellon - Savings and Loan
-Bank Holding Companies Associations
other than Mellon - Broker/Dealers
-Insurance Companies - Transfer Agents
-Investment Advisory - Other Depository
Companies Institutions
-Shareholder Servicing
Companies
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by mutual
funds, variable annuities or insurance policies. Further, for
purposes of determining whether a company is a financial
services organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services organizations
properly acquired before the employee's becoming subject to this
prohibition may be maintained or disposed of at the owner's
discretion consistent with this policy.
Additional securities of a financial services organization
acquired through the reinvestment of the dividends paid by such
financial services organization through a dividend reinvestment
program (DRIP), or through an automatic investment plan (AIP)
are not subject to this prohibition, provided the employee's
election to participate in the DRIP or AIP predates the date of
the employee's becoming subject to this prohibition. Optional
cash purchases through a DRIP or direct purchase plan (DPP) are
subject to this prohibition.
Securities acquired in any account over which an employee has no
direct or indirect control over the investment decision making
process (e.g. discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this prohibition, all
holdings of securities of financial services organizations must
be disclosed in writing to the Manager of Corporate Compliance.
BENEFICIAL The provisions of the Policy apply to transactions in the
OWNERSHIP employee's own name and to all other accounts over which
the employee could be presumed to exercise influence or
control, including:
o accounts of a spouse, minor children or relatives to
whom substantial support is contributed;
o accounts of any other member of the employee's
household (e.g., a relative living in the same home);
o trust or other accounts for which the employee acts
as trustee or otherwise exercises any type of guidance
or influence;
o corporate accounts controlled, directly or
indirectly, by the employee;
o arrangements similar to trust accounts that are
established for bona fide financial purposes and benefit
the employee; and
o any other account for which the employee is the beneficial
owner (see Glossary for a more complete legal definition of
"beneficial owner").
NON-MELLON The provisions discussed above do not apply to transactions
EMPLOYEE done under a bona fide employee benefit plan administered
BENEFIT PLANS by an organization not affiliated with Mellon and by an
employee of that organization who shares beneficial interest
with a Mellon employee, and in the securities of the employing
organization. This means if a Mellon employee's spouse is
employed at a non-Mellon company, the Mellon employee is not
required to obtain approval for transactions in the employer's
securities done by the spouse as part of the spouse's employee
benefit plan.
The Securities Trading Policy does not apply in such a
situation. Rather, the other organization is relied upon to
provide adequate supervision with respect to conflicts of
interest and compliance with securities laws.
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PROTECTING As an employee you may receive information about Mellon,
CONFIDENTIAL its customers and other parties that, for various reasons,
INFORMATION should be treated as confidential. All employees are
expected to strictly comply with measures necessary to preserve
the confidentiality of information. Employees should refer to
the Mellon Code of Conduct.
INSIDER Federal securities laws generally prohibit the trading of
TRADING AND securities while in possession of "material nonpublic"
TIPPING information regarding the issuer of those securities
(insider trading). Any person who passes along material
LEGAL nonpublic information upon which a trade is based (tipping)
PROHIBITIONS may also be liable.
Information is "material" if there is a substantial likelihood
that a reasonable investor would consider it important in
deciding whether to buy, sell or hold securities. Obviously,
information that would affect the market price of a security
would be material. Examples of information that might be
material include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial
assets;
o tender offers, which are often material for the party making
the tender offer as well as for the issuer of the securities
for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors,
customers or suppliers relating to a company's credit
standing;
o earnings and other financial information, such as
large or unusual write-offs, write-downs, profits or
losses;
o pending discoveries or developments, such as new
products, sources of materials, patents, processes,
inventions or discoveries of mineral deposits;
o a proposal or agreement concerning a financial
restructuring;
o a proposal to issue or redeem securities, or a
development with respect to a pending issuance or
redemption of securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or
decreases in orders;
o the institution of, or a development in, litigation
or a regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director
of that company; and
o information regarding a company's possible
noncompliance with environmental protection laws.
This list is not exhaustive. All relevant circumstances must be
considered when determining whether an item of information is
material.
"Nonpublic" - Information about a company is nonpublic if it is
not generally available to the investing public. Information
received under circumstances indicating that it is not yet in
general circulation and which may be attributable, directly or
indirectly, to the company or its insiders is likely to be
deemed nonpublic information.
If you obtain material non-public information you may not trade
related securities until you can refer to some public source to
show that the information is generally available (that is,
available from sources other than inside sources) and that
enough time has passed to allow wide dissemination of the
information. While information appearing in widely accessible
sources--such as in newspapers or on the internet--becomes
public very soon after publication, information appearing in
less accessible sources--such as regulatory filings, may take up
to several days to be deemed public. Similarly, highly complex
information might take longer to become public than would
information that is easily understood by the average investor.
MELLON'S Employees who possess material nonpublic information
POLICY about a company--whether that company is Mellon, another Mellon
entity, a Mellon customer or supplier, or other company--may not
trade in that company's securities, either for their own
accounts or for any account over which they exercise investment
discretion. In addition, employees may not recommend trading in
those securities and may not pass the information along to
others, except to employees who need to know the information in
order to perform their job responsibilities with Mellon. These
prohibitions remain in effect until the information has become
public.
Employees who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic
information. Receiving such information could create severe
limitations on their ability to carry out their responsibilities
to Mellon's fiduciary customers.
Employees managing the work of consultants and temporary
employees who have access to the types of confidential
information described in this Policy are responsible for
ensuring that consultants and temporary employees are aware of
Mellon's policy and the consequences of noncompliance.
Questions regarding Mellon's policy on material nonpublic
information, or specific information that might be subject to
it, should be referred to the General Counsel.
RESTRICTIONS As a diversified financial services organization, Mellon
ON THE FLOW OF faces unique challenges in complying with the prohibitions
INFORMATION on insider trading and tipping of material non-public
WITHIN MELLON information, and misuse of confidential information. This
(THE "CHINESE is because one Mellon unit might have material nonpublic
WALL") information about a company while other Mellon units may
have a desire, or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or sales to
customers. To engage in such broad-ranging financial services
activities without violating laws or breaching Mellon's
fiduciary duties, Mellon has established a "Chinese Wall" policy
applicable to all employees. The "Chinese Wall" separates the
Mellon units or individuals that are likely to receive material
nonpublic information (Potential Insider Functions) from the
Mellon units or individuals that either trade in securities--for
Mellon's account or for the accounts of others--or provide
investment advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
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SPECIAL Certain Portfolio Managers and Research Analysts in the
PROCEDURES FOR fiduciary businesses have been designated as Access
ACCESS Decision Makers and are subject to additional procedures
DECISION MAKERS which are discussed in a separate edition of the Securities
Trading Policy. If you have reason to believe that you may be an
Access Decision Maker, contact your supervisor, designated
Preclearance Compliance Officer or the Manager of Corporate
Compliance.
PERSONAL SECURITIES TRADING PRACTICES
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES
CONTENTS
Page
PERSONAL SECURITIES TRADING PRACTICES
SECTION THREE - APPLICABLE TO OTHER EMPLOYEES
Quick Reference - Other Employees ..........................33
Standards of Conduct .......................................34
--Conflict of Interest ................................34
--Material Nonpublic Information ......................34
--Brokers .............................................34
--Personal Securities Transaction Reports .............34
--Brokerage Account Statements ........................34
--Confidential Treatment ..............................34
Restrictions on Transactions in Mellon Securities ..........35
--Mellon 401(k) Plan ..................................36
--Mellon Employee Stock Options .......................36
Restrictions on Transactions in Other Securities ...........37
--Prohibition on Investments in Securities of .........38
Financial Services Organizations
Beneficial Ownership .......................................39
Non-Mellon Employee Benefit Plans ..........................39
Protecting Confidential Information ........................39
--Insider Trading and Tipping .........................39
--The "Chinese Wall" ..................................41
GLOSSARY Definitions ................................................43
Exhibit A - Sample Letter to Broker ........................49
QUICK REFERENCE - OTHER EMPLOYEES
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SOME THINGS YOU o If you buy or sell Mellon Financial
MUST DO Corporation securities you must provide a report
of the trade and a copy of the broker confirmation within
10 days of transaction to the Manager of Corporate
Compliance, AIM 151-4340. This does not apply to the
exercise of employee stock options, or changes in elections
under Mellon's 401(k) Retirement Savings Plan.
o If you want to purchase any security in a Private Placement
you must first obtain the approval of your
Department/Entity head and the Manager of Corporate
Compliance. Contact the Manager of Corporate Compliance at
412-234-0810.
o Acquisition of securities through an allocation by the
underwriter of an Initial Public Offering (IPO) is
prohibited without the approval of the Manager of Corporate
Compliance. Approval can be given only when the allocation
is the result of a direct family relationship.
o For Employees who are subject to the prohibition on new
investments in financial services organizations (certain
employees only - see page 38), broker must send directly to
MANAGER OF CORPORATE COMPLIANCE, MELLON BANK, PO BOX 3130,
PITTSBURGH, PA 15230-3130:
o Broker trade confirmations summarizing each
transaction
o Periodic statements
Exhibit A can be used to notify your broker of all accounts
for which your broker will be responsible for sending
duplicate confirmations and statements.
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SOME THINGS YOU Mellon Securities - The following transactions in
MUST NOT DO Mellon securities are prohibited for all Mellon
employees:
o Short sales
o Purchasing and selling or selling and
purchasing within 60 days
o Purchasing or selling during a blackout period
o Margin purchases or options other than
employee options.
Non-Mellon Securities
o New investments in financial services organizations
(certain employees only - see page 38.)
Other restrictions are detailed throughout Section
Three. Read the Policy!
===============
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QUESTIONS? (412) 234-1661
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This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
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STANDARDS OF Every Other Employee must follow these procedures or risk
CONDUCT FOR serious sanctions, including dismissal. If you have any
OTHER EMPLOYEES questions about these procedures you should consult the
Manager of Corporate Compliance. Interpretive issues that arise
under these procedures shall be decided by, and are subject to
the discretion of, the Manager of Corporate Compliance.
CONFLICT OF No employee may engage in or recommend any securities
INTEREST transaction that places, or appears to place, his or her
own interests above those of any customer to whom financial
services are rendered, including mutual funds and managed
accounts, or above the interests of Mellon.
MATERIAL No employee may engage in or recommend a securities
NONPUBLIC transaction, for his or her own benefit or for the benefit
INFORMATION of others, including Mellon or its customers, while in
possession of material nonpublic information regarding such
securities. No employee may communicate material nonpublic
information to others unless it is properly within his or her
job responsibilities to do so.
BROKERS Trading Accounts - All employees are encouraged to conduct their
personal investing through a Mellon affiliate brokerage account.
PERSONAL Other Employees must report in writing to the Manager of
SECURITIES Corporate Compliance within ten calendar days whenever they
TRANSACTIONS purchase or sell Mellon securities. Purchases and sales
REPORTS include optional cash purchases under Mellon's Dividend
Reinvestment and Common Stock Purchase Plan (the "Mellon
DRIP").
It should be noted that the reinvestment of dividends under the
DRIP, changes in elections under Mellon's 401(k) Retirement
Savings Plan, the receipt of stock under Mellon's Restricted
Stock Award Plan, and the receipt or exercise of options under
Mellon's employee stock option plans are not considered
purchases or sales for the purpose of this reporting
requirement.
BROKERAGE Certain Other Employees are subject to the restriction on
ACCOUNT investments in financial services organizations and are
STATEMENTS required to instruct their brokers to send statements
directly to Corporate Compliance. See page 38.
An example of an instruction letter to a broker is contained in
Exhibit A.
CONFIDENTIAL The Manager of Corporate Compliance will use his or her
TREATMENT best efforts to assure that all personal securities
transaction reports and all reports of securities holdings are
treated as "Personal and Confidential." However, such documents
will be available for inspection by appropriate regulatory
agencies and by other parties within and outside Mellon as are
necessary to evaluate compliance with or sanctions under this
Policy.
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RESTRICTIONS Employees who engage in transactions involving Mellon
ON securities should be aware of their unique responsibilities
TRANSACTIONS with respect to such transactions arising from the
IN MELLON employment relationship and should be sensitive to even the
SECURITIES appearance of impropriety.
The following restrictions apply to all transactions in Mellon's
publicly traded securities occurring in the employee's own
account and in all other accounts over which the employee could
be expected to exercise influence or control (see provisions
under "Beneficial Ownership" below for a more complete
discussion of the accounts to which these restrictions apply).
These restrictions are to be followed in addition to any
restrictions that apply to particular officers or directors
(such as restrictions under Section 16 of the Securities
Exchange Act of 1934). o Short Sales - Short sales of Mellon
securities by employees are prohibited.
o Short Term Trading - Employees are prohibited from purchasing
and selling, or from selling and purchasing Mellon securities
within any 60 calendar day period.
o Margin Transactions - Purchases on margin of Mellon's
publicly traded securities by employees is prohibited.
Margining Mellon securities in connection with a cashless
exercise of an employee stock option through the Human
Resources Department is exempt from this restriction.
Further, Mellon securities may be used to collateralize loans
or the acquisition of securities other than those issued by
Mellon.
o Option Transactions - Option transactions involving Mellon's
publicly traded securities are prohibited. Transactions under
Mellon's Long-Term Incentive Plan or other employee option
plans are exempt from this restriction.
o Major Mellon Events - Employees who have knowledge of major
Mellon events that have not yet been announced are prohibited
from buying or selling Mellon's publicly traded securities
before such public announcements, even if the employee
believes the event does not constitute material nonpublic
information.
o Mellon Blackout Period - Employees are prohibited from buying
or selling Mellon's publicly traded securities during a
blackout period. The blackout period begins the 16th day of
the last month of each calendar quarter and ends 3 business
days after Mellon Financial Corporation publicly announces
the financial results for that quarter. Thus, the blackout
periods begin on March 16, June 16, September 16 and December
16. The end of the blackout period is determined by counting
business days only, and the day of the earnings announcement
is day 1. The blackout period ends at the end of day 3, and
employees can trade Mellon securities on day 4.
MELLON 401(K) For purposes of the blackout period and the short term
PLAN trading rule, employees' changing their existing account
balance allocation to increase or decrease the amount allocated
to Mellon Common Stock will be treated as a purchase or sale of
Mellon Stock, respectively. This means:
o Employees are prohibited from increasing or decreasing their
existing account balance allocation to Mellon Common Stock
during the blackout period.
o Employees are prohibited from increasing their existing
account balance allocation to Mellon Common Stock and then
decreasing it within 60 days. Similarly, employees are
prohibited from decreasing their existing account balance
allocation to Mellon Common Stock and then increasing it
within 60 days. However, changes to existing account balance
allocations in the 401(k) plan will not be compared to
transactions in Mellon securities outside the 401(k) for
purposes of the 60-day rule. (Note: this does not apply to
members of the Executive Management Group, who should consult
with the Legal Department.)
Except for the above there are no other restrictions applicable
to the 401(k) plan. This means, for example:
o There is no restriction on employees' changing their salary
deferral contribution percentages with regard to either the
blackout period or the 60-day rule.
o The regular salary deferral contribution to Mellon Common
Stock in the 401(k) that takes place with each pay will not
be considered a purchase for the purposes of either the
blackout or the 60-day rule.
MELLON Receipt - Your receipt of an employee stock option from
EMPLOYEE STOCK Mellon is not deemed to be a purchase of a security.
OPTIONS Therefore, it is exempt from reporting requirements, can
take place during the blackout period and does not constitute a
purchase for purposes of the 60-day prohibition.
Exercises - The exercise of an employee stock option that
results in your holding the shares is exempt from reporting
requirements, can take place during the blackout period and does
not constitute a purchase for purposes of the 60-day
prohibition.
"Cashless" Exercises - The exercise of an employee stock option
which is part of a "cashless exercise" or "netting of shares"
that is administered by the Human Resources Department or Chase
Mellon Shareholder Services is exempt from the preclearance and
reporting requirements and will not constitute a purchase or a
sale for purposes of the 60-day prohibition. A "cashless
exercise" or "netting of shares" transaction is permitted during
the blackout period for ShareSuccess plan options only. They are
not permitted during the blackout period for any other plan
options.
Sales - The sale of the Mellon securities that were received in
the exercise of an employee stock option is treated like any
other sale under the Policy (regardless of how little time has
elapsed between the option exercise and the sale). Thus, such
sales are subject to the reporting requirements, are prohibited
during the blackout period and constitute sales for purposes of
the 60-day prohibition.
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RESTRICTIONS Purchases or sales by an employee of the securities of
ON issuers with which Mellon does business, or other third
TRANSACTIONS party issuers, could result in liability on the part of
IN OTHER such employee. Employees should be sensitive to even the
SECURITIES appearance of impropriety in connection with their personal
securities transactions. Employees should refer to
"Beneficial Ownership" below, which is applicable to the
following restrictions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon. Employees
should refer to the Code of Conduct and comply with such
restrictions in addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities
transactions by employees:
o Credit, Consulting or Advisory Relationship - Employees may
not buy or sell securities of a company if they are
considering granting, renewing, modifying or denying any
credit facility to that company, acting as a benefits
consultant to that company, or acting as an adviser to that
company with respect to the company's own securities. In
addition, lending employees who have assigned
responsibilities in a specific industry group are not
permitted to trade securities in that industry. This
prohibition does not apply to transactions in open end mutual
funds.
o Customer Transactions - Trading for customers and Mellon
accounts should always take precedence over employees'
transactions for their own or related accounts.
o Excessive Trading, Naked Options - Mellon discourages all
employees from engaging in short-term or speculative trading,
in trading naked options, in trading that could be deemed
excessive or in trading that could interfere with an
employee's job responsibilities.
o Front Running - Employees may not engage in "front running,"
that is, the purchase or sale of securities for their own
accounts on the basis of their knowledge of Mellon's trading
positions or plans.
o Initial Public Offerings - Other Employees are prohibited
from acquiring securities through an allocation by the
underwriter of an Initial Public Offering (IPO) without the
approval of the Manager of Corporate Compliance. Approval can
be given only when the allocation comes through an employee
of the issuer who is a direct family relation of the Other
Employee. Due to NASD rules, this approval may not be
available to employees of registered broker/dealers.
o Material Nonpublic Information - Employees possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling securities
of that issuer until the information becomes public or is no
longer considered material.
o Private Placements - Other Employees are prohibited from
acquiring any security in a private placement unless they
obtain the prior written approval of the Manager of Corporate
Compliance and the employee's department head. Approval must
be given by both persons for the acquisition to be considered
approved. After receipt of the necessary approvals and the
acquisition, employees are required to disclose that
investment if they participate in any subsequent
consideration of credit for the issuer, or of an investment
in the issuer for an advised account. Final decision to
acquire such securities for an advised account will be
subject to independent review.
o Scalping - Employees may not engage in "scalping," that is,
the purchase or sale of securities for their own or Mellon's
accounts on the basis of knowledge of customers' trading
positions or plans.
o Short Term Trading - Employees are discouraged from
purchasing and selling, or from selling and purchasing, the
same (or equivalent) securities within any 60 calendar day
period.
PROHIBITION ON You are prohibited from acquiring any security issued by a
INVESTMENTS IN financial services organization if you are:
SECURITIES OF
FINANCIAL o a member of the Mellon Senior Management Committee.
SERVICES
ORGANIZATIONS o employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
o an employee specifically designated by the Manager of
Corporate Compliance and informed that this prohibition is
applicable to you.
Brokerage Accounts - All employees subject to this restriction
on investments in financial services organizations are required
to instruct their brokers to submit directly to the Manager of
Corporate Compliance copies of all trade confirmations and
statements relating to each account of which they are a
beneficial owner regardless of what, if any, securities are
maintained in such accounts. Thus, for example, even if the
brokerage account has no reportable securities traded in it, the
employee maintaining such an account must arrange for duplicate
account statements and trade confirmations to be sent by the
broker to the Manager of Corporate Compliance. An example of an
instruction letter to a broker is contained in Exhibit A.
Financial Services Organizations - The term "security issued by
a financial services organization" includes any security issued
by:
- Commercial Banks other - Thrifts
than Mellon - Savings and Loan
- Bank Holding Companies Associations
other than Mellon - Broker/Dealers
- Insurance Companies - Transfer Agents
- Investment Advisory - Other Depository
Companies Institutions
- Shareholder Servicing
Companies
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by mutual
funds, variable annuities or insurance policies. Further, for
purposes of determining whether a company is a financial
services organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services organizations
properly acquired before the employee's becoming subject to this
prohibition may be maintained or disposed of at the owner's
discretion consistent with this policy.
Additional securities of a financial services organization
acquired through the reinvestment of the dividends paid by such
financial services organization through a dividend reinvestment
program (DRIP), or through an automatic investment plan (AIP)
are not subject to this prohibition, provided the employee's
election to participate in the DRIP or AIP predates the date of
the employee's becoming subject to this prohibition. Optional
cash purchases through a DRIP or direct purchase plan (DPP) are
subject to this prohibition.
Securities acquired in any account over which an employee has no
direct or indirect control over the investment decision making
process (e.g. discretionary trading accounts) are not subject to
this prohibition.
Within 30 days of becoming subject to this prohibition, all
holdings of securities of financial services organizations must
be disclosed in writing to the Manager of Corporate Compliance.
BENEFICIAL The provisions of the Policy apply to transactions in the
OWNERSHIP employee's own name and to all other accounts over which
the employee could be presumed to exercise influence or
control, including:
o accounts of a spouse, minor children or relatives to
whom substantial support is contributed;
o accounts of any other member of the employee's
household (e.g., a relative living in the same home);
o trust or other accounts for which the employee acts
as trustee or otherwise exercises any type of guidance
or influence;
o corporate accounts controlled, directly or
indirectly, by the employee;
o arrangements similar to trust accounts that are
established for bona fide financial purposes and benefit
the employee; and
o any other account for which the employee is the beneficial
owner (see Glossary for a more complete legal definition of
"beneficial owner").
NON-MELLON The provisions discussed above do not apply to transactions
EMPLOYEE done under a bona fide employee benefit plan administered
BENEFIT PLANS by an organization not affiliated with Mellon and by an
employee of that organization who shares beneficial interest
with a Mellon employee, and in the securities of the employing
organization. This means if a Mellon employee's spouse is
employed at a non-Mellon company, the Mellon employee is not
required to obtain approval for transactions in the employer's
securities done by the spouse as part of the spouse's employee
benefit plan.
The Securities Trading Policy does not apply in such a
situation. Rather, the other organization is relied upon to
provide adequate supervision with respect to conflicts of
interest and compliance with securities laws.
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PROTECTING As an employee you may receive information about Mellon,
CONFIDENTIAL its customers and other parties that, for various reasons,
INFORMATION should be treated as confidential. All employees are
expected to strictly comply with measures necessary to preserve
the confidentiality of information. Employees should refer to
the Mellon Code of Conduct.
INSIDER Federal securities laws generally prohibit the trading of
TRADING AND securities while in possession of "material nonpublic"
TIPPING information regarding the issuer of those securities
(insider trading). Any person who passes along material
LEGAL nonpublic information upon which a trade is based (tipping)
PROHIBITIONS may also be liable.
Information is "material" if there is a substantial likelihood
that a reasonable investor would consider it important in
deciding whether to buy, sell or hold securities. Obviously,
information that would affect the market price of a security
would be material. Examples of information that might be
material include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial
assets;
o tender offers, which are often material for the party making
the tender offer as well as for the issuer of the securities
for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors,
customers or suppliers relating to a company's credit
standing;
o earnings and other financial information, such as
large or unusual write-offs, write-downs, profits or
losses;
o pending discoveries or developments, such as new
products, sources of materials, patents, processes,
inventions or discoveries of mineral deposits;
o a proposal or agreement concerning a financial
restructuring;
o a proposal to issue or redeem securities, or a
development with respect to a pending issuance or
redemption of securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or
decreases in orders;
o the institution of, or a development in, litigation
or a regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director
of that company; and
o information regarding a company's possible
noncompliance with environmental protection laws.
This list is not exhaustive. All relevant circumstances must be
considered when determining whether an item of information is
material.
"Nonpublic" - Information about a company is nonpublic if it is
not generally available to the investing public. Information
received under circumstances indicating that it is not yet in
general circulation and which may be attributable, directly or
indirectly, to the company or its insiders is likely to be
deemed nonpublic information.
If you obtain material non-public information you may not trade
related securities until you can refer to some public source to
show that the information is generally available (that is,
available from sources other than inside sources) and that
enough time has passed to allow wide dissemination of the
information. While information appearing in widely accessible
sources--such as in newspapers or on the internet--becomes
public very soon after publication, information appearing in
less accessible sources--such as regulatory filings, may take up
to several days to be deemed public. Similarly, highly complex
information might take longer to become public than would
information that is easily understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information
about a company--whether that company is Mellon, another Mellon
entity, a Mellon customer or supplier, or other company--may not
trade in that company's securities, either for their own
accounts or for any account over which they exercise investment
discretion. In addition, employees may not recommend trading in
those securities and may not pass the information along to
others, except to employees who need to know the information in
order to perform their job responsibilities with Mellon. These
prohibitions remain in effect until the information has become
public.
Employees who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic
information. Receiving such information could create severe
limitations on their ability to carry out their responsibilities
to Mellon's fiduciary customers.
Employees managing the work of consultants and temporary
employees who have access to the types of confidential
information described in this Policy are responsible for
ensuring that consultants and temporary employees are aware of
Mellon's policy and the consequences of noncompliance.
Questions regarding Mellon's policy on material nonpublic
information, or specific information that might be subject to
it, should be referred to the General Counsel.
RESTRICTIONS As a diversified financial services organization, Mellon
ON THE FLOW OF faces unique challenges in complying with the prohibitions
INFORMATION on insider trading and tipping of material non-public
WITHIN MELLON information, and misuse of confidential information. This
(THE "CHINESE is because one Mellon unit might have material nonpublic
WALL") information about a company while other Mellon units may
have a desire, or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or sales to
customers. To engage in such broad-ranging financial services
activities without violating laws or breaching Mellon's
fiduciary duties, Mellon has established a "Chinese Wall" policy
applicable to all employees. The "Chinese Wall" separates the
Mellon units or individuals that are likely to receive material
nonpublic information (Potential Insider Functions) from the
Mellon units or individuals that either trade in securities--for
Mellon's account or for the accounts of others--or provide
investment advice (Investment Functions). Employees should refer
to CPP 903-2(C) The Chinese Wall.
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GLOSSARY
DEFINITIONS o 40-ACT ENTITY - A Mellon entity registered under the
Investment Company Act and/or the Investment Advisers Act of
1940
o ACCESS DECISION MAKER - A person designated as such by the
Investment Ethics Committee. Generally, this will be
portfolio managers and research analysts who make
recommendations or decisions regarding the purchase or sale
of equity, convertible debt, and non-investment grade debt
securities for investment companies and other managed
accounts. See further details in the Access Decision Maker
edition of the Policy.
o ACCESS PERSON - As defined by Rule 17j-1 under the Investment
Company Act of 1940, "access person" means:
(A) With respect to a registered investment company or an
investment adviser thereof, any director, officer,
general partner, or advisory person (see definition
below), of such investment company or investment
adviser;
(B) With respect to a principal underwriter, any
director, officer, or general partner of such
principal underwriter who in the ordinary course of
his business makes, participates in or obtains
information regarding the purchase or sale of
securities for the registered investment company
for which the principal underwriter so acts, or
whose functions or duties as part of the ordinary
course of his business relate to the making of any
recommendations to such investment company
regarding the purchase or sale of securities.
(C) Notwithstanding the provisions of paragraph (A)
hereinabove, where the investment adviser is
primarily engaged in a business or businesses other
than advising registered investment companies or
other advisory clients, the term "access person"
shall mean: any director, officer, general
partner, or advisory person of the investment
adviser who, with respect to any registered
investment company, makes any recommendations,
participates in the determination of which
recommendation shall be made, or whose principal
function or duties relate to the determination of
which recommendation will be made, to any such
investment company; or who, in connection with his
duties, obtains any information concerning
securities recommendations being made by such
investment adviser to any registered investment
company.
(D) An investment adviser is "primarily engaged in a
business or businesses other than advising
registered investment companies or other advisory
clients" when, for each of its most recent three
fiscal years or for the period of time since its
organization, whichever is less, the investment
adviser derived, on an unconsolidated basis, more
than 50 percent of (i) its total sales and
revenues, and (ii) its income (or loss) before
income taxes and extraordinary items, from such
other business or businesses.
o ADVISORY PERSON of a registered investment company or
an investment adviser thereof means:
(A) Any employee of such company or investment adviser (or
any company in a control relationship to such investment
company or investment adviser) who, in connection with
his regular functions or duties, makes, participates in,
or obtains information regarding the purchase or sale of
a security by a registered investment company, or whose
functions relate to the making of any recommendation
with respect to such purchases or sales; and
(B) Any natural person in a control relationship to such
company or investment adviser who obtains information
concerning recommendations made to such company with
regard to the purchase or sale of a security.
o APPROVAL - written consent or written notice of
non-objection.
o BENEFICIAL OWNERSHIP - The definition that follows conforms
to interpretations of the Securities and Exchange Commission
on this matter. Because a determination of beneficial
ownership requires a detailed analysis of personal financial
circumstances that are subject to change, Corporate
Compliance ordinarily will not advise employees on this
definition. It is the responsibility of each employee to read
the definition and based on that definition, determine
whether he/she is the beneficial owner of an account. If the
employee determines that he/she is not a beneficial owner of
an account and Corporate Compliance becomes aware of the
existence of the account, the employee will be responsible
for justifying his/her determination.
Securities owned of record or held in the employee's name are
generally considered to be beneficially owned by the
employee.
Securities held in the name of any other person are deemed to
be beneficially owned by the employee if by reason of any
contract, understanding, relationship, agreement or other
arrangement, the employee obtains therefrom benefits
substantially equivalent to those of ownership, including the
power to vote, or to direct the disposition of, such
securities. Beneficial ownership includes securities held by
others for the employee's benefit (regardless of record
ownership), e.g., securities held for the employee or members
of the employee's immediate family, defined below, by agents,
custodians, brokers, trustees, executors or other
administrators; securities owned by the employee, but which
have not been transferred into the employee's name on the
books of the company; securities which the employee has
pledged; or securities owned by a corporation that should be
regarded as the employee's personal holding corporation. As a
natural person, beneficial ownership is deemed to include
securities held in the name or for the benefit of the
employee's immediate family, which includes the employee's
spouse, the employee's minor children and stepchildren and
the employee's relatives or the relatives of the employee's
spouse who are sharing the employee's home, unless because of
countervailing circumstances, the employee does not enjoy
benefits substantially equivalent to those of ownership.
Benefits substantially equivalent to ownership include, for
example, application of the income derived from such
securities to maintain a common home, meeting expenses that
such person otherwise would meet from other sources, and the
ability to exercise a controlling influence over the
purchase, sale or voting of such securities. An employee is
also deemed the beneficial owner of securities held in the
name of some other person, even though the employee does not
obtain benefits of ownership, if the employee can vest or
revest title in himself at once, or at some future time.
In addition, a person will be deemed the beneficial owner of
a security if he has the right to acquire beneficial
ownership of such security at any time (within 60 days)
including but not limited to any right to acquire: (1)
through the exercise of any option, warrant or right; (2)
through the conversion of a security; or (3) pursuant to the
power to revoke a trust, discretionary account or similar
arrangement.
With respect to ownership of securities held in trust,
beneficial ownership includes ownership of securities as a
trustee in instances where either the employee as trustee or
a member of the employee's "immediate family" has a vested
interest in the income or corpus of the trust, the ownership
by the employee of a vested beneficial interest in the trust
and the ownership of securities as a settlor of a trust in
which the employee as the settlor has the power to revoke the
trust without obtaining the consent of the beneficiaries.
Certain exemptions to these trust beneficial ownership rules
exist, including an exemption for instances where beneficial
ownership is imposed solely by reason of the employee being
settlor or beneficiary of the securities held in trust and
the ownership, acquisition and disposition of such securities
by the trust is made without the employee's prior approval as
settlor or beneficiary. "Immediate family" of an employee as
trustee means the employee's son or daughter (including any
legally adopted children) or any descendant of either, the
employee's stepson or stepdaughter, the employee's father or
mother or any ancestor of either, the employee's stepfather
or stepmother and the employee's spouse.
To the extent that stockholders of a company use it as a
personal trading or investment medium and the company has no
other substantial business, stockholders are regarded as
beneficial owners, to the extent of their respective
interests, of the stock thus invested or traded in. A general
partner in a partnership is considered to have indirect
beneficial ownership in the securities held by the
partnership to the extent of his pro rata interest in the
partnership. Indirect beneficial ownership is not, however,
considered to exist solely by reason of an indirect interest
in portfolio securities held by any holding company
registered under the Public Utility Holding Company Act of
1935, a pension or retirement plan holding securities of an
issuer whose employees generally are beneficiaries of the
plan and a business trust with over 25 beneficiaries.
Any person who, directly or indirectly, creates or uses a
trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement or device with the purpose or
effect of divesting such person of beneficial ownership as
part of a plan or scheme to evade the reporting requirements
of the Securities Exchange Act of 1934 shall be deemed the
beneficial owner of such security.
The final determination of beneficial ownership is a question
to be determined in light of the facts of a particular case.
Thus, while the employee may include security holdings of
other members of his family, the employee may nonetheless
disclaim beneficial ownership of such securities.
o "CHINESE WALL" POLICY - procedures designed to restrict the
flow of information within Mellon from units or individuals
who are likely to receive material nonpublic information to
units or individuals who trade in securities or provide
investment advice.
o DIRECT FAMILY RELATION - employee's husband, wife,
father, mother, brother, sister, daughter or son.
Includes the preceding plus, where appropriate, the
following prefixes/suffix: grand-, step-, foster-,
half- and -in-law.
o DISCRETIONARY TRADING ACCOUNT - an account over which the
employee has no direct or indirect control over the
investment decision making process.
o EMPLOYEE - any employee of Mellon Financial Corporation or
its more-than-50%-owned direct or indirect subsidiaries;
includes all full-time, part-time, benefited and
non-benefited, exempt and non-exempt, domestic and
international employees; does not include consultants and
contract or temporary employees
o EXEMPT SECURITIES - Exempt Securities are defined as:
- direct obligations of the government of the United
States;
- high quality short-term debt instruments;
- bankers' acceptances;
- bank certificates of deposit and time deposits;
- commercial paper;
- repurchase agreements;
- securities issued by open-end investment companies;
o FAMILY RELATION - see direct family relation.
o GENERAL COUNSEL - General Counsel of Mellon Financial
Corporation or any person to whom relevant authority is
delegated by the General Counsel.
o INDEX FUND - an investment company or managed portfolio which
contains securities of an index in proportions designed to
replicate the return of the index.
o INITIAL PUBLIC OFFERING (IPO) - the first offering of a
company's securities to the public through an allocation by
the underwriter.
o INVESTMENT CLUB - is a membership organization where
investors make joint decisions on which securities to buy or
sell. The securities are generally held in the name of the
investment club. Since each member of an investment club
participates in the investment decision making process,
Insider Risk Employees, Investment Employees and Access
Decision Makers belonging to such investment clubs must
preclear and report the securities transactions contemplated
by such investment clubs. In contrast, a private investment
company is an organization where the investor invests his/her
money, but has no direct control over the way his/her money
is invested. Insider Risk Employees, Investment Employees and
Access Decision Makers investing in such a private investment
company are not required to preclear any of the securities
transactions made by the private investment company. Insider
Risk Employees, Investment Employees and Access Decision
Makers are required to report their investment in a private
investment company to the Manager of Corporate Compliance and
certify to the Manager of Corporate Compliance that they have
no direct control over the way their money is invested.
o INVESTMENT COMPANY - a company that issues securities that
represent an undivided interest in the net assets held by the
company. Mutual funds are investment companies that issue and
sell redeemable securities representing an undivided interest
in the net assets of the company.
o INVESTMENT ETHICS COMMITTEE is composed of investment, legal,
compliance, and audit management representatives of Mellon
and its affiliates. The members of the Investment Ethics
Committee are:
President and Chief Investment Officer of The Dreyfus
Corporation (Committee Chair)
General Counsel, Mellon Financial Corporation
Chief Risk Management Officer, Mellon Trust
Manager of Corporate Compliance, Mellon Financial
Corporation
Corporate Chief Auditor, Mellon Financial Corporation
Chief Investment Officer, Mellon Private Asset Management
Executive Officer of a Mellon investment adviser
(rotating membership)
The Committee has oversight of issues related to personal
securities trading and investment activity by Access Decision
Makers.
o MANAGER OF CORPORATE COMPLIANCE - the employee within the
Audit and Risk Review Department of Mellon Financial
Corporation who is responsible for administering the
Securities Trading Policy, or any person to whom relevant
authority is delegated by the Manager of Corporate
Compliance.
o MELLON - Mellon Financial Corporation and all of its direct
and indirect subsidiaries.
o OPTION - a security which gives the investor the right, but
not the obligation, to buy or sell a specific security at a
specified price within a specified time. For purposes of
compliance with the Policy, any Mellon employee who
buys/sells an option, is deemed to have purchased/sold the
underlying security when the option was purchased/sold. Four
combinations are possible as described below.
Call Options
Ifa Mellon employee buys a call option, the employee
is considered to have purchased the underlying
security on the date the option was purchased.
Ifa Mellon employee sells a call option, the
employee is considered to have sold the underlying
security on the date the option was sold.
Put Options
Ifa Mellon employee buys a put option, the employee
is considered to have sold the underlying security
on the date the option was purchased.
Ifa Mellon employee sells a put option, the employee
is considered to have bought the underlying
security on the date the option was sold.
Below is a table describing the above:
------------------------------------------------
Transaction Type
------------------------------------------------
---------------------------------------------------------
Option Buy Sale
Type
---------------------------------------------------------
---------------------------------------------------------
Put Sale of Underlying Purchase of
Security Underlying Security
---------------------------------------------------------
---------------------------------------------------------
Call Purchase of Underlying Sale of Underlying
Security Security
---------------------------------------------------------
o PRECLEARANCE COMPLIANCE OFFICER - a person designated by the
Manager of Corporate Compliance and/or the Investment Ethics
Committee to administer, among other things, employees'
preclearance requests for a specific business unit.
o PRIVATE PLACEMENT - an offering of securities that is exempt
from registration under the Securities Act of 1933 because it
does not constitute a public offering. Includes limited
partnerships.
o SENIOR MANAGEMENT COMMITTEE - the Senior Management
Committee of Mellon Financial Corporation.
o SHORT SALE - the sale of a security that is not owned
by the seller at the time of the trade.
EXHIBIT A - SAMPLE INSTRUCTION LETTER TO BROKER
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted above,
please be advised that the Compliance Department of my employer should be noted
as an "Interested Party" with respect to my accounts. They should, therefore, be
sent copies of all trade confirmations and account statements relating to my
account.
Please send the requested documentation ensuring the account holder's name
appears on all correspondence to:
Manager, Corporate Compliance Preclearance Compliance Officer
Mellon Bank or (obtain address from your
PO Box 3130 Pittsburgh, PA designated Preclearance
15230-3130 Compliance Officer)
Thank you for your cooperation in this request.
Sincerely yours,
Employee
cc: Manager, Corporate Compliance (151-4340) or Preclearance Compliance Officer
MELLON
SECURITIES TRADING POLICY
ACCESS DECISION MAKER EDITION
QUICK REFERENCE - ACCESS DECISION MAKERS
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SOME THINGS 1. Statement of Holdings - Provide to your Preclearance
YOU MUST DO Compliance Officer a statement of all securities holdings
within 10 days of becoming an ADM, and within 30 days after
every quarter-end thereafter.
2. Duplicate Statements & Confirmations - Instruct your broker,
trust account manager or other entity through which you have a
securities trading account to send directly to Compliance:
o Trade confirmations summarizing each transaction
o Periodic statements
Exhibit A can be used to notify your broker. Contact your
designated Preclearance Compliance Officer for the correct
address. This applies to all accounts in which you have a
beneficial interest.
3. Preclearance - Before initiating a securities transaction,
written preclearance must be obtained from the designated
Preclearance Compliance Officer. This can be accomplished by
completing a Preclearance Request Form and:
o delivering or faxing the request to the designated
Preclearance Compliance Officer, or
o contacting the designated Preclearance Compliance
Officer for other available notification options.
Preclearance Request Forms can be obtained from the designated
Preclearance Compliance Officer. If preclearance approval is
received the trade must be communicated to the broker on the
same day, and executed before the end of the next business day,
at which time the preclearance approval will expire.
4. Contemporaneous Disclosure - ADMs must obtain written
authorization from the ADM's CIO or other Investment Ethics
Committee designee prior to making or acting upon a portfolio
recommendation in a security which they own personally.
5. Private Placements - Purchases must be precleared by the
Investment Ethics Committee. Prior holdings must be approved by
the Investment Ethics Committee within 90 days of becoming an
ADM. To initiate preclearance or approval, contact the Manager
of Corporate Compliance.
6. IPOs - Acquisition of securities through an allocation by the
underwriter of an Initial Public Offering (IPO) is prohibited
without the approval of the Manager of Corporate Compliance.
Approval can be given only when the allocation is the result of
a direct family relationship.
7. Micro-Cap Securities - MCADMs are prohibited from purchasing
any security of an issuer with a common equity market
capitalization of $100 million or less at the time of
acquisition unless approved by the Investment Ethics Committee.
MCADMs must obtain on their Preclearance Request Forms the
written authorization of their immediate supervisor and their
Chief Investment Officer prior to trading any security of an
issuer with a common equity market capitalization of more than
$100 million but less than or equal to $250 million at the time
of trade. Any prior holding of such securities must be approved
by the CIO.
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SOME THINGS Mellon Securities - The following transactions in Mellon
YOU MUST NOT securities are prohibited for all Mellon employees:
DO o Short sales
o Purchasing and selling or selling and purchasing within 60 days
o Purchasing or selling during a blackout period
o Margin purchases or options other than employee options.
Non-Mellon Securities
o Portfolio Managers are prohibited from purchasing/selling 7
days before or after a fund or other advised account
transaction.
o For all ADMs, purchasing and selling or selling and purchasing
the same or equivalent security within 60 days is discouraged,
and any profits must be disgorged.
Other restrictions are detailed throughout the Policy. Read
------------------ ====
the Policy!
==========
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EXEMPTIONS Preclearance is NOT required for certain other types of
transactions, and transactions in certain other types of
securities. See pages 6 & 7.
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-----------------------------------------------------------------------------
QUESTIONS? Contact your designated Preclearance Compliance Officer. If
you don't know who that is, call 412-234-1661
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This page is for reference purposes only. Employees are reminded they must read
the Policy and comply with its provisions.
Dear Colleague:
At Mellon, we take great pride in our transformation over the years from a
regional bank to a global financial services company. Our growth makes us better
able to meet customers' changing needs, gives us greater stability during any
unexpected economic downturn and affords us the opportunity to be the best
performing financial services company.
This diversity of our businesses also makes us a complex organization, which is
why it's more important than ever that you clearly understand Mellon's
SECURITIES TRADING POLICY. Mellon has long maintained strict policies regarding
securities transactions, all with the same clear-cut objective: to establish and
demonstrate our compliance with the high standards with which we conduct our
business.
If you are new to Mellon, please take the time to fully understand the POLICY
and consult it whenever you are unsure about appropriate actions. If you have
seen the POLICY previously, I urge you to renew your understanding of the entire
document and its implications for you. Only by strict adherence to the POLICY
can we ensure that our well-deserved reputation for integrity is preserved.
Sincerely yours,
Martin G. McGuinn
Questions Concerning the Securities Trading Policy?
Contact Corporate Compliance, (412) 234-1661
AIM 151-4340, Mellon Bank, Pittsburgh, PA 15258-0001
CONTENTS
PAGE
INTRODUCTION .................................................................1
Purpose .......................................................1
CLASSIFICATION OF EMPLOYEES ..................................................2
The Investment Ethics Committee ...............................2
PERSONAL SECURITIES TRADING PRACTICES ........................................3
Standards of Conduct for Access Decision Makers ...............3
Conflict of Interest ......................................3
Material Nonpublic Information ............................3
Brokers ...................................................3
Personal Securities Transaction Reports ...................3
Statement of Securities Accounts and Holdings .............4
Quarterly Reporting .......................................4
Preclearance for Personal Securities Transactions .........4
Contemporaneous Disclosure ................................5
Blackout Policy ...........................................6
Exemptions from Requirement to Preclear ...................6
Gifting of Securities .....................................7
DRIPs, DPPs, and AIPs .....................................7
Restricted List ...........................................7
Confidential Treatment ....................................8
Restrictions on Transactions in Mellon Securities .............9
Mellon 401(k) Plan ........................................9
Mellon Employee Stock Options ............................10
Restrictions on Transactions in Other Securities .............11
Initial Public Offerings .................................11
Micro-Cap Securities .....................................11
Private Placements .......................................12
Prohibition on Investments in Securities of
Financial Services Organizations .........................13
Beneficial Ownership .....................................14
Non-Mellon Employee Benefit Plans ........................14
Protecting Confidential Information ..........................15
Insider Trading and Tipping - Legal Prohibitions .........15
Insider Trading and Tipping - Mellon's Policy ............16
The "Chinese Wall" .......................................16
GLOSSARY Definitions ..................................................17
Exhibit A - Sample Letter to Broker ..........................23
1
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INTRODUCTION The SECURITIES TRADING POLICY (the "Policy") is designed to
reinforce Mellon Financial Corporation's ("Mellon's") reputation
for integrity by avoiding even the appearance of impropriety in
the conduct of Mellon's business. The Policy sets forth
procedures and limitations which govern the personal securities
transactions of every Mellon Employee.
Mellon and its employees are subject to certain laws and
regulations governing personal securities trading. Mellon has
developed this Policy to promote the highest standards of
behavior and ensure compliance with applicable laws.
Employees should be aware that they may be held personally
liable for any improper or illegal acts committed during the
course of their employment, and that "ignorance of the law" is
not a defense. Employees may be subject to civil penalties such
as fines, regulatory sanctions including suspensions, as well as
criminal penalties.
Employees outside the United States are also subject to
applicable laws of foreign jurisdictions, which may differ
substantially from US law and which may subject such employees
to additional requirements. Such employees must comply with
applicable requirements of pertinent foreign laws as well as
with the provisions of the Policy. To the extent any particular
portion of the Policy is inconsistent with foreign law,
employees should consult the General Counsel or the Manager of
Corporate Compliance.
Any provision of this Policy may be waived or exempted at the
discretion of the Manager of Corporate Compliance. Any such
waiver or exemption will be evidenced in writing and maintained
in the Audit and Risk Review Department.
Employees must read the Policy and must comply with it. Failure
to comply with the provisions of the Policy may result in the
imposition of serious sanctions, including but not limited to
disgorgement of profits, dismissal, substantial personal
liability and referral to law enforcement agencies or other
regulatory agencies. Employees should retain the Policy in their
records for future reference. Any questions regarding the Policy
should be referred to the Manager of Corporate Compliance or
his/her designee.
SPECIAL EDITION This edition of the SECURITIES TRADING POLICY has been
prepared especially for Access Decision Makers. If you believe
you are not an Access Decision Maker, please contact your
supervisor, designated Preclearance Compliance Officer or the
Manager of Corporate Compliance to obtain the standard edition
of the Policy.
PURPOSE It is imperative that Mellon and its affiliates avoid even
the appearance of a conflict between the personal
securities trading of its employees and its fiduciary
duties to investment companies and managed account
clients. Potential conflicts of interest are most acute
with respect to personal securities trading by those
employees most responsible for directing managed fund and
account trades: portfolio managers and research analysts.
In order to avoid even the appearance of impropriety, an
Investment Ethics Committee has been formed. The
Committee, in turn, has established the following practices
which apply to Access Decision Makers. These practices do
not limit the authority of any Mellon affiliate to impose
additional restrictions or limitations.
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CLASSIFICATION Employees are engaged in a wide variety of activities for
OF EMPLOYEES Mellon. In light of the nature of their activities and the
impact of federal and state laws and the regulations thereunder,
the Policy imposes different requirements and limitations on
employees based on the nature of their activities for Mellon. To
assist the employees in complying with the requirements and
limitations imposed on them in light of their activities,
employees are classified into one or both of the following
categories: Access Decision Maker and Micro-Cap Access Decision
Maker. Appropriate requirements and limitations are specified in
the Policy based upon the employee's classification.
The Investment Ethics Committee will determine the
classification of each employee based on the following
guidelines.
ACCESS DECISION A person designated as such by the Investment Ethics Committee.
MAKER (ADM) Generally, this will be portfolio managers and research
analysts who make recommendations or decisions regarding the
purchase or sale of equity, convertible debt, and
non-investment grade debt securities for mutual funds and
other managed accounts. Portfolio managers in Mellon Private
Capital Management are generally ADMs; other personal trust
officers are generally not ADMs unless the investment
discretion they exercise warrants ADM designation. Traders are
not ADMs. Portfolio managers of funds which are limited to
replicating an index are not ADMs.
MICRO-CAP An ADM designated as such by the Investment Ethics Committee.
ACCESS Generally, this will be ADMs who make recommendations or
DECISION decisions regarding the purchase or sale of any security of an
MAKERS MCADM) issuer with a common equity market capitalization equal to or
less than two-hundred fifty million dollars.
MCADMs are also ADMs.
CONSULTANTS, Managers should inform consultants, independent contractors
INDEPENDENT and temporary employees of the general provisions of the
CONTRACTORS Policy (such as the prohibition on trading while in possession
AND of material nonpublic information), but generally they will
TEMPORARY not be required to preclear trades or report their personal
EMPLOYEES securities holdings. If one of these persons would be
considered an ADM if the person were a Mellon employee, the
person's manager should advise the Manager of Corporate
Compliance who will determine whether such individual should
be subject to the preclearance and reporting requirements of
the Policy.
THE INVESTMENT The Investment Ethics Committee is composed of investment,
ETHICS legal, compliance, and audit management representatives of
COMMITTEE Mellon and its affiliates.
The chief executive officer, senior investment officer and the
Preclearance Compliance Officer at each Mellon investment
affiliate, working together, will be designees of the Investment
Ethics Committee. The Investment Ethics Committee will meet
periodically to review the actions taken by its designees and to
consider issues related to personal securities trading and
investment activity by ADMs.
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Personal Securities Trading Practices
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STANDARDS OF Because of their particular responsibilities, ADMs
CONDUCT FOR are subject to preclearance and personal securities
ACCESS reporting requirements, as discussed below.
DECISION MAKERS
Every ADM must follow these procedures or risk serious
sanctions, including dismissal. If you have any questions about
these procedures you should consult the Manager of Corporate
Compliance or your Preclearance Compliance Officer. Interpretive
issues that arise under these procedures shall be decided by,
and are subject to the discretion of, the Manager of Corporate
Compliance.
CONFLICT OF No employee may engage in or recommend any securities
INTEREST transaction that places, or appears to place, his or her own
interests above those of any customer to whom financial services
are rendered, including mutual funds and managed accounts, or
above the interests of Mellon.
MATERIAL No employee may divulge the current portfolio positions, or
NONPUBLIC current or anticipated portfolio transactions, programs or
INFORMATION studies, of Mellon or any Mellon customer to anyone unless it
is properly within his or her job responsibilities to do so.
No employee may engage in or recommend a securities transaction,
for his or her own benefit or for the benefit of others,
including Mellon or its customers, while in possession of
material nonpublic information regarding such securities. No
employee may communicate material nonpublic information to
others unless it is properly within his or her job
responsibilities to do so.
BROKERS Trading Accounts - All ADMs are encouraged to conduct their
personal investing through a Mellon affiliate brokerage account.
This will assist in the monitoring of account activity on an
ongoing basis in order to ensure compliance with the Policy.
PERSONAL Statements & Confirmations - All ADMs are required to instruct
SECURITIES their broker, trust account manager or other entity through
TRANSACTIONS which they have a securities trading account to submit
REPORTS directly to the Manager of Corporate Compliance or designated
Preclearance Compliance Officer copies of all trade
confirmations and statements relating to each account of which
they are a beneficial owner regardless of what, if any,
securities are maintained in such accounts. Thus, for example,
even if the brokerage account contains only mutual funds or
other Exempt Securities as that term is defined in the glossary
and the account has the capability to have reportable securities
traded in it, the ADM maintaining such an account must arrange
for duplicate account statements and trade confirmations to be
sent by the broker to the Manager of Corporate Compliance or
designated Preclearance Compliance Officer. Exhibit A is an
example of an instruction letter to a broker.
Other securities transactions which were not completed through a
brokerage account, such as gifts, inheritances, spin-offs from
securities held outside brokerage accounts, or other transfers
must be reported to the designated Preclearance Compliance
Officer within 10 days.
STATEMENT OF Within ten days of becoming an ADM and on an annual basis
SECURITIES thereafter, all ADMs must submit to their designated
ACCOUNTS Preclearance Compliance Officer:
AND HOLDINGS
o a listing of all securities trading accounts in which the
employee has a beneficial interest.
o a statement of all securities in which they presently have any
direct or indirect beneficial ownership other than Exempt
Securities.
The annual report must be completed upon the request of
Corporate Compliance, and the information submitted must be
current within 30 days of the date the report is submitted.
The annual statement of securities holdings contains an
acknowledgment that the ADM has read and complied with this
Policy.
QUARTERLY ADMs are required to submit quarterly to their Preclearance
REPORTING Compliance Officer the Quarterly Securities Report. This
report must be submitted within 30 days of each quarter end and
includes information on:
o securities beneficially owned at any time during the quarter
which were also either recommended for a transaction or in the
portfolio managed by the ADM during the quarter.
o positions obtained in private placements.
o securities of issuers with a common equity market
capitalization of $250 million or less at security acquisition
or at the date designated by the Preclearance Compliance
Officer, whichever is later, which were beneficially owned at
any time during the quarter.
o Securities transactions which were not completed through a
brokerage account, such as gifts inheritances, spin-offs from
securities held outside brokerage accounts, or other
transfers.
A form for making this report can be obtained from your
designated Preclearance Compliance Officer or from the
Securities Trading Site on the Mellon intranet.
PRECLEARANCE All ADMs must notify the designated Preclearance Compliance
FOR PERSONAL Officer in writing and receive preclearance before they engage
SECURITIES in any purchase or sale of a security for their own accounts.
TRANSACTIONS ADMs should refer to the provisions under "Beneficial
Ownership" below, which are applicable to these provisions.
All requests for preclearance for a securities transaction shall
be submitted by completing a Preclearance Request Form which can
be obtained from the designated Preclearance Compliance Officer.
The designated Preclearance Compliance Officer will notify the
ADM whether the request is approved or denied, without
disclosing the reason for such approval or denial.
Notifications may be given in writing or verbally by the
designated Preclearance Compliance Officer to the ADM. A record
of such notification will be maintained by the designated
Preclearance Compliance Officer. However, it shall be the
responsibility of the ADM to obtain a written record of the
designated Preclearance Compliance Officer's notification within
48 hours of such notification. The ADM should retain a copy of
this written record for at least two years.
As there could be many reasons for preclearance being granted or
denied, ADMs should not infer from the preclearance response
anything regarding the security for which preclearance was
requested.
Although making a preclearance request does not obligate an ADM
to do the transaction, it should be noted that:
o Preclearance requests should not be made for a transaction
that the ADM does not intend to make.
o The order for a transaction must be placed with the broker on
the same day that preclearance authorization is received. The
broker must execute the trade by 4:00 p.m. Eastern Time on the
next business day, at which time the preclearance
authorization will expire.
o ADMs should not discuss with anyone else, inside or outside
Mellon, the response they received to a preclearance request.
If the ADM is preclearing as beneficial owner of another's
account, the response may be disclosed to the other owner.
o Good Until Canceled/Stop Loss Orders ("Limit Orders") must be
precleared, and security transactions receiving preclearance
authorization must be executed before the preclearance
expires. At the end of the preclearance authorization period,
any unexecuted Limit Order must be canceled or a new
preclearance authorization must be obtained. There are
additional pre-approval requirements for initial public
offerings, micro-cap securities and private placements. See
page 11.
CONTEMPORANEOUS ADMs must obtain written authorization prior to making or
DISCLOSURE acting upon a portfolio recommendation in a security which
they own personally. This authorization must be obtained from
the ADM's CIO/CEO or other Investment Ethics Committee designee
immediately prior to the first such portfolio recommendation in
a particular security in a calendar month. The following
personal securities holdings are exempt from the requirement to
obtain written authorization immediately preceding a portfolio
recommendation or transaction:
o Exempt Securities (see glossary).
o Securities held in accounts over which the ADM has no
investment discretion, which are professionally managed by a
non-family member, and where the ADM has no actual knowledge
that such account is currently holding the same or equivalent
security at the time of the portfolio recommendation.
o Personal holdings of equity securities of the top 200 issuers
on the Russell list of largest publicly traded companies.
o Personal equity holdings of securities of non-US issuers with
a common equity market capitalization of $20 billion or more.
o Personal holdings of debt securities which do not have a
conversion feature and are rated BBB or better.
o Personal holdings of ADMs who are index fund managers and who
have no investment discretion in replicating an index.
o Personal holdings of Portfolio Managers in Mellon Private
Capital Management and Mellon Private Asset Management if the
Portfolio Manager exactly replicates the model or clone
portfolio. A disclosure form is required if the Portfolio
Manager recommends securities which are not in the clone or
model portfolio or recommends a model or clone security in a
different percentage than model or clone amounts. Disclosure
forms are also required when the Portfolio Manager recommends
individual securities to clients, even if Mellon shares
control of the investment process with other parties.
If a personal securities holding does not fall under one of
these exemptions, the ADM must complete and forward a
disclosure form for authorization by the CIO/CEO or designee,
immediately prior to the first recommendation or transaction
in the security in the current calendar month. Disclosure
forms for subsequent transactions in the same security are not
required for the remainder of the calendar month as long as
purchases (or sales) in all portfolios do not exceed the
maximum number of shares, options, or bonds disclosed on the
disclosure form. If the ADM seeks to effect a transaction or
makes a recommendation in a direction opposite to the most
recent disclosure form, a new disclosure form must be
completed prior to the transaction or recommendation.
Once the CIO/CEO's authorization is obtained, the ADM may make
the recommendation or trade the security in the managed
portfolio without the Preclearance Compliance Officer's
signature. However, the ADM must deliver the authorization
form to the Preclearance Compliance Officer on the day of the
CIO/CEO's authorization. The Preclearance Compliance Officer
will forward a copy of the completed form for the ADM's files.
The ADM is responsible for following-up with the Preclearance
Compliance Officer in the event a completed form is not
returned to the ADM within 5 business days. It is recommended
that the ADM retain completed forms for two years.
A listing of Investment Ethics Committee designees, a listing
of the Russell 200, and the personal securities disclosure
forms are available on the Mellon intranet , or can be
obtained from your designated Preclearance Compliance Officer.
BLACKOUT POLICY Except as described below, ADMs will generally not be given
clearance to execute a transaction in any security that is on
the restricted list maintained by their Preclearance
Compliance Officer, or for which there is a pending buy or
sell order for an affiliated account. This provision does not
apply to transactions effected or contemplated by index funds.
In addition, portfolio managers (except index fund managers)
are prohibited from buying or selling a security within seven
calendar days before and after their investment company or
managed account has effected a transaction in that security.
In addition to other appropriate sanctions, if such ADMs
effect such a personal transactions during that period, these
individuals must disgorge any and all profit realized from
such transactions. The amount of the disgorgement will be
determined by the Investment Ethics Committee.
Exceptions - Regardless of any restrictions above, ADMs will
generally be given clearance to buy or sell up to the greater
of 100 shares or $10,000 of securities of the top 500 issuers
on the Russell list of largest publicly traded companies. In
addition, ADMs will be exempt from the 7-day disgorgement for
the described transactions (but not the disgorgement for
short-term/60-day trading). An ADM is limited to two such
purchases or two such sales in the securities of any one
issuer in any calendar month.
EXEMPTIONS FROM Preclearance is not required for the following transactions:
REQUIREMENT TO
PRECLEAR o purchases or sales of Exempt Securities (see Glossary);
o purchases or sales of securities issued by non-affiliated
closed-end investment companies; non-financial commodities
(such as agricultural futures, metals, oil, gas, etc.),
currency futures, financial futures, index futures and index
securities;
o purchases or sales effected in any account over which an
employee has no direct or indirect control over the investment
decision making process (e.g., discretionary trading
accounts). Discretionary trading accounts may be maintained,
without being subject to preclearance procedures, only when
the Manager of Corporate Compliance, after a thorough review,
is satisfied that the account is truly discretionary;
o transactions that are non-volitional on the part of an
employee (such as stock dividends);
o the sale of Mellon stock received upon the exercise of an
employee stock option if the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human
Resources Department (for which the Human Resources Department
will forward information to the Manager of Corporate
Compliance);
o changes to elections in the Mellon 401(k) plan;
o purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to
the extent such rights were acquired from such issuer;
o sales of rights acquired from an issuer, as described above;
and/or
o sales effected pursuant to a bona fide tender offer.
GIFTING OF ADMs desiring to make a bona fide gift of securities or who
SECURITIES receive a bona fide gift of securities do not need to preclear
the transaction. However, ADMs must report such bona fide
gifts to the designated Preclearance Compliance Officer. The
report must be made within 10 days of making or receiving the
gift and must disclose the following information: the name of
the person receiving (giving) the gift, the date of the
transaction, and the name of the broker through which the
transaction was effected. A bona fide gift is one where the
donor does not receive anything of monetary value in return.
An ADM who purchases a security with the intention of making a
gift must preclear the purchase transaction.
DRIPs, DPPs Certain companies with publicly traded securities establish:
AND AIPs
o Dividend reinvestment plans (DRIPs) - These permit
shareholders to have their dividend payments channeled to the
purchase of additional shares of such company's stock. An
additional benefit offered by many DRIPs to DRIP participants
is the right to buy additional shares by sending in a check
before the dividend reinvestment date ("optional cash
purchases").
o Direct Purchase Plans (DPPs) - These allow purchasers to buy
stock by sending a check directly to the issuer, without using
a broker.
o Automatic Investment Plans (AIPs) - These allow purchasers
to set up a plan whereby a fixed amount of money is
automatically deducted from their checking account each month
and used to purchase stock directly from the issuer.
Participation in a DRIP, DPP or AIP is voluntary.
ADMs who enroll in a DRIP or AIP are not required to preclear
enrollment, the periodic reinvestment of dividend payments
into additional shares of company stock through a DRIP, or the
periodic investments through an AIP.
ADMs must preclear all optional cash purchases through a DRIP
and all purchases through a DPP. ADMs must also preclear all
sales through a DRIP, DPP or AIP.
RESTRICTED LIST Each Preclearance Compliance Officer will maintain a list (the
"Restricted List") of companies whose securities are deemed
appropriate for implementation of trading restrictions for
ADMs in their area. From time to time, such trading
restrictions may be appropriate to protect Mellon and its ADMs
from potential violations, or the appearance of violations, of
securities laws. The inclusion of a company on the Restricted
List provides no indication of the advisability of an
investment in the company's securities or the existence of
material nonpublic information on the company. Nevertheless,
the contents of the Restricted List will be treated as
confidential information in order to avoid unwarranted
inferences.
The Preclearance Compliance Officer will retain copies of the
restricted lists for five years.
CONFIDENTIAL The Manager of Corporate Compliance and/or Preclearance
TREATMENT Compliance Officer will use his or her best efforts to assure
that all requests for preclearance, all personal securities
transaction reports and all reports of securities holdings are
treated as "Personal and Confidential." However, such
documents will be available for inspection by appropriate
regulatory agencies, and by other parties within and outside
Mellon as are necessary to evaluate compliance with or
sanctions under this Policy. Documents received from ADMs are
also available for inspection by the boards of directors of
40-Act entities and by the boards of directors (or trustees or
managing general partners, as applicable) of the investment
companies managed or administered by 40-Act entities.
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RESTRICTIONS ON Employees who engage in transactions involving Mellon
TRANSACTIONS IN securities should be aware of their unique responsibilities
MELLON with respect to such transactions arising from the employment
SECURITIES relationship and should be sensitive to even the appearance of
impropriety. The following restrictions apply to all
transactions in Mellon's publicly traded securities occurring
in the employee's own account and in all other accounts over
which the employee could be presumed to exercise influence or
control (see provisions under "Beneficial Ownership" below for
a more complete discussion of the accounts to which these
restrictions apply). These restrictions are to be followed in
addition to any restrictions that apply to particular officers
or directors (such as restrictions under Section 16 of the
Securities Exchange Act of 1934).
o Short Sales - Short sales of Mellon securities by employees
are prohibited.
o Short Term Trading - ADMs are prohibited from purchasing and
selling, or from selling and purchasing Mellon securities
within any 60 calendar day period. In addition to any other
sanctions, any profits realized on such short term trades must
be disgorged in accordance with procedures established by
senior management.
o Margin Transactions - Purchases on margin of Mellon's
publicly traded securities by employees is prohibited.
Margining Mellon securities in connection with a cashless
exercise of an employee stock option through the Human
Resources Department is exempt from this restriction. Further,
Mellon securities may be used to collateralize loans or the
acquisition of securities other than those issued by Mellon.
o Option Transactions - Option transactions involving Mellon's
publicly traded securities are prohibited. Transactions under
Mellon's Long-Term Incentive Plan or other employee option
plans are exempt from this restriction.
o Major Mellon Events - Employees who have knowledge of major
Mellon events that have not yet been announced are prohibited
from buying or selling Mellon's publicly traded securities
before such public announcements, even if the employee
believes the event does not constitute material nonpublic
information.
o Mellon Blackout Period - Employees are prohibited from
buying or selling Mellon's publicly traded securities during a
blackout period. The blackout period begins the 16th day of
the last month of each calendar quarter and ends 3 business
days after Mellon Financial Corporation publicly announces the
financial results for that quarter. Thus, the blackout periods
begin on March 16, June 16, September 16 and December 16. The
end of the blackout period is determined by counting business
days only, and the day of the earnings announcement is day 1.
The blackout period ends at the end of day 3, and employees
can trade Mellon securities on day 4.
MELLON 401(K) For purposes of the blackout period and the short term trading
PLAN rule, employees' changing their existing account balance
allocation to increase or decrease the amount allocated to
Mellon Common Stock will be treated as a purchase or sale of
Mellon Stock, respectively. This means:
o Employees are prohibited from increasing or decreasing their
existing account balance allocation to Mellon Common Stock
during the blackout period.
o Employees are prohibited from increasing their existing
account balance allocation to Mellon Common Stock and then
decreasing it within 60 days. Similarly, employees are
prohibited from decreasing their existing account balance
allocation to Mellon Common Stock and then increasing it
within 60 days. However:
- with respect to ADMs, any profits realized on short
term changes in the 401(k) will not have to be
disgorged.
- changes to existing account balance allocations in the
401(k) plan will not be compared to transactions in
Mellon securities outside the 401(k) for purposes of the
60-day rule. (Note: this does not apply to members of
the Executive Management Group, who should consult with
the Legal Department.)
Except for the above there are no other restrictions
applicable to the 401(k) plan. This means, for example:
o Employees are not required to preclear any elections or
changes made in their 401(k) account.
o There is no restriction on employees' changing their salary
deferral contribution percentages with regard to either the
blackout period or the 60-day rule.
o The regular salary deferral contribution to Mellon Common
Stock in the 401(k) that takes place with each pay will not be
considered a purchase for the purposes of either the blackout
or the 60-day rule.
MELLON EMPLOYEE Receipt - Your receipt of an employee stock option from Mellon
STOCK OPTIONS is not deemed to be a purchase of a security. Therefore, it is
exempt from preclearance and reporting requirements, can take
place during the blackout period and does not constitute a
purchase for purposes of the 60-day prohibition.
Exercises - The exercise of an employee stock option that
results in your holding the shares is exempt from preclearance
and reporting requirements, can take place during the blackout
period and does not constitute a purchase for purposes of the
60-day prohibition.
"Cashless" Exercises - The exercise of an employee stock
option which is part of a "cashless exercise" or "netting of
shares" that is administered by the Human Resources Department
or Chase Mellon Shareholder Services is exempt from the
preclearance and reporting requirements and will not
constitute a purchase or a sale for purposes of the 60-day
prohibition. A "cashless exercise" or "netting of shares"
transaction is permitted during the blackout period for
ShareSuccess plan options only. They are not permitted during
the blackout period for any other plan options.
Sales - The sale of the Mellon securities that were received
in the exercise of an employee stock option is treated like
any other sale under the Policy (regardless of how little time
has elapsed between the option exercise and the sale). Thus,
such sales are subject to the preclearance and reporting
requirements, are prohibited during the blackout period and
constitute sales for purposes of the 60-day prohibition.
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RESTRICTIONS ON Purchases or sales by an employee of the securities of issuers
TRANSACTIONS IN with which Mellon does business, or other third party issuers,
OTHER could result in liability on the part of such employee.
SECURITIES Employees should be sensitive to even the appearance of
impropriety in connection with their personal securities
transactions. Employees should refer to "Beneficial Ownership"
below, which is applicable to the following restrictions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon. Employees
should refer to the Code of Conduct and comply with such
restrictions in addition to the restrictions and reporting
requirements set forth below.
The following restrictions apply to all securities
transactions by ADMs:
o Customer Transactions - Trading for customers and Mellon
accounts should always take precedence over employees'
transactions for their own or related accounts.
o Excessive Trading, Naked Options - Mellon discourages all
employees from engaging in short-term or speculative trading,
in trading naked options, in trading that could be deemed
excessive or in trading that could interfere with an
employee's job responsibilities.
o Front Running - Employees may not engage in "front running,"
that is, the purchase or sale of securities for their own
accounts on the basis of their knowledge of Mellon's trading
positions or plans.
o Initial Public Offerings - ADMs are prohibited from
acquiring securities through an allocation by the underwriter
of an Initial Public Offering (IPO) without the approval of
the Investment Ethics Committee. Approval can be given only
when the allocation comes through an employee of the issuer
who is a direct family relation of the ADM. Due to NASD rules,
this approval may not be available to employees of registered
broker/dealers.
o Material Nonpublic Information - Employees possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling securities
of that issuer until the information becomes public or is no
longer considered material.
o Micro-Cap Securities - Unless specifically authorized in
writing by the Investment Ethics Committee, MCADMs are
prohibited from voluntarily obtaining beneficial ownership of
any security of an issuer with a common equity market
capitalization of $100 million or less at the time of
acquisition. If any MCADM involuntarily acquires such a
micro-cap security through inheritance, gift, or spin-off,
this fact must be disclosed in a memo to the MCADM's
Preclearance Compliance Officer within 10 business days of the
MCADM's knowledge of this fact. A copy of this memo should be
attached to the MCADM's next Quarterly Securities Report. A
form for making this report can be obtained from your
designated Preclearance Compliance Officer.
MCADMs must obtain on their Preclearance Request Forms the
written authorization of their immediate supervisor and their
Chief Investment Officer prior to voluntarily obtaining, or
disposing of, a beneficial ownership of any security of an
issuer with a common equity market capitalization of more than
$100 million but less than or equal to $250 million at the
time of acquisition.
MCADMs who have prior holdings of securities of an issuer with
a common equity market capitalization of $250 million or less
must disclose on their next Quarterly Securities Report that
they have not yet received CIO/CEO authorization for these
holdings. The Preclearance Compliance Officer will utilize
these forms to request the appropriate authorizations.
o Private Placements - Participation in private placements is
prohibited without the prior written approval of the
Investment Ethics Committee. The Committee will generally not
approve an ADM's acquiring, in a private placement, beneficial
ownership of any security of an issuer in which any managed
fund or account is authorized to invest within the ADM's fund
complex.
Private placements include certain co-operative investments in
real estate, co-mingled investment vehicles such as hedge
funds, and investments in family owned businesses. For the
purpose of this policy, time-shares and cooperative
investments in real estate used as a primary or secondary
residence are not considered to be private placements.
When considering requests for participation in private
placements, the Investment Ethics Committee will take into
account the specific facts and circumstances of the request
prior to reaching a decision on whether to authorize a private
placement investment by an ADM. These factors include, among
other things, whether the opportunity is being offered to an
individual by virtue of his or her position with Mellon or its
affiliates, or his or her relationship to a managed fund or
account. The Investment Ethics Committee will also consider
whether a fund or account managed by the ADM is authorized to
invest in securities of the issuer in which the ADM is seeking
to invest. At its discretion, the Investment Ethics Committee
may request any and all information and/or documentation
necessary to satisfy itself that no actual or potential
conflict, or appearance of a conflict, exists between the
proposed private placement purchase and the interests of any
managed fund or account.
ADMs who have prior holdings of securities obtained in a
private placement must request the written authorization of
the Investment Ethics Committee to continue holding the
security. This request for authorization must be initiated
within 90 days of becoming an ADM.
To request authorization for prior holdings or new proposed
acquisitions of securities issued in an eligible private
placement, contact the Manager of Corporate Compliance.
o Scalping - Employees may not engage in "scalping," that is,
the purchase or sale of securities for their own or Mellon's
accounts on the basis of knowledge of customers' trading
positions or plans.
o Short Term Trading - ADMs are discouraged from purchasing
and selling, or from selling and purchasing, the same (or
equivalent) securities within any 60 calendar day period. Any
profits realized on such short term trades must be disgorged
in accordance with procedures established by senior
management. Exception: securities may be sold pursuant to a
bona fide tender offer without disgorgement under the 60-day
rule.
PROHIBITION ON You are prohibited from acquiring any security issued by a
INVESTMENTS IN financial services organization if you are:
SECURITIES OF
FINANCIAL o a member of the Mellon Senior Management Committee.
SERVICES
ORGANIZATIONS o employed in any of the following departments:
- Corporate Strategy & Development
- Legal (Pittsburgh only)
- Finance (Pittsburgh only)
o an employee specifically designated by the Manager of
Corporate Compliance and informed that this prohibition is
applicable to you.
Financial Services Organizations - The term "security issued
by a financial services organization" includes any security
issued by:
- Commercial Banks other than Mellon - Thrifts
- Bank Holding Companies other than Mellon - Savings and Loan
Associations
- Insurance Companies - Broker/Dealers
- Investment Advisory Companies - Transfer Agents
- Shareholder Servicing Companies - Other Depository
Institutions
The term "securities issued by a financial services
organization" does not include securities issued by mutual
funds, variable annuities or insurance policies. Further, for
purposes of determining whether a company is a financial
services organization, subsidiaries and parent companies are
treated as separate issuers.
Effective Date - Securities of financial services
organizations properly acquired before the employee's becoming
subject to this prohibition may be maintained or disposed of
at the owner's discretion consistent with this policy.
Additional securities of a financial services organization
acquired through the reinvestment of the dividends paid by
such financial services organization through a dividend
reinvestment program (DRIP), or through an automatic
investment plan (AIP) are not subject to this prohibition,
provided the employee's election to participate in the DRIP or
AIP predates the date of the employee's becoming subject to
this prohibition. Optional cash purchases through a DRIP or
direct purchase plan (DPP) are subject to this prohibition.
Securities acquired in any account over which an employee has
no direct or indirect control over the investment decision
making process (e.g. discretionary trading accounts) are not
subject to this prohibition.
Within 30 days of becoming subject to this prohibition, all
holdings of securities of financial services organizations
must be disclosed in writing to the Manager of Corporate
Compliance.
BENEFICIAL The provisions of the Policy apply to transactions in the
OWNERSHIP employee's own name and to all other accounts over which the
employee could be presumed to exercise influence or control,
including:
o accounts of a spouse, minor children or relatives to whom
substantial support is contributed;
o accounts of any other member of the employee's household
(e.g., a relative living in the same home);
o trust or other accounts for which the employee acts as
trustee or otherwise exercises any type of guidance or
influence;
o corporate accounts controlled, directly or indirectly, by
the employee;
o arrangements similar to trust accounts that are established
for bona fide financial purposes and benefit the employee; and
o any other account for which the employee is the beneficial
owner (see Glossary for a more complete legal definition of
"beneficial owner").
NON-MELLON The provisions discussed above do not apply to transactions
EMPLOYEE done under a bona fide employee benefit plan administered by
BENEFIT PLANS an organization not affiliated with Mellon and by an employee
of that organization who shares beneficial interest with a
Mellon employee, and in the securities of the employing
organization. This means if a Mellon employee's spouse is
employed at a non-Mellon company, the Mellon employee is not
required to obtain approval for transactions in the employer's
securities done by the spouse as part of the spouse's employee
benefit plan.
The Securities Trading Policy does not apply in such a
situation. Rather, the other organization is relied upon to
provide adequate supervision with respect to conflicts of
interest and compliance with securities laws.
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PROTECTING As an employee you may receive information about Mellon, its
CONFIDENTIAL customers and other parties that, for various reasons, should
INFORMATION be treated as confidential. All employees are expected to
strictly comply with measures necessary to preserve the
confidentiality of information. Employees should refer to the
Mellon Code of Conduct.
INSIDER TRADING Federal securities laws generally prohibit the trading of
AND TIPPING securities while in possession of "material nonpublic"
information regarding the issuer of those securities (insider
LEGAL trading). Any person who passes along material nonpublic
PROHIBITIONS information upon which a trade is based (tipping) may also be
liable.
Information is "material" if there is a substantial likelihood
that a reasonable investor would consider it important in
deciding whether to buy, sell or hold securities. Obviously,
information that would affect the market price of a security
would be material. Examples of information that might be
material include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial
assets;
o tender offers, which are often material for the party making
the tender offer as well as for the issuer of the securities
for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors, customers
or suppliers relating to a company's credit standing;
o earnings and other financial information, such as large or
unusual write-offs, write-downs, profits or losses;
o pending discoveries or developments, such as new products,
sources of materials, patents, processes, inventions or
discoveries of mineral deposits;
o a proposal or agreement concerning a financial
restructuring;
o a proposal to issue or redeem securities, or a development
with respect to a pending issuance or redemption of
securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or decreases
in orders;
o the institution of, or a development in, litigation or a
regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director of that
company; and
o information regarding a company's possible noncompliance
with environmental protection laws.
This list is not exhaustive. All relevant circumstances must
be considered when determining whether an item of information
is material.
"Nonpublic" - Information about a company is nonpublic if it
is not generally available to the investing public.
Information received under circumstances indicating that it is
not yet in general circulation and which may be attributable,
directly or indirectly, to the company or its insiders is
likely to be deemed nonpublic information.
If you obtain material non-public information you may not
trade related securities until you can refer to some public
source to show that the information is generally available
(that is, available from sources other than inside sources)
and that enough time has passed to allow wide dissemination of
the information. While information appearing in widely
accessible sources--such as in newspapers or on the
internet--becomes public very soon after publication,
information appearing in less accessible sources--such as
regulatory filings, may take up to several days to be deemed
public. Similarly, highly complex information might take
longer to become public than would information that is easily
understood by the average investor.
MELLON'S POLICY Employees who possess material nonpublic information about a
company--whether that company is Mellon, another Mellon
entity, a Mellon customer or supplier, or other company--may
not trade in that company's securities, either for their own
accounts or for any account over which they exercise
investment discretion. In addition, employees may not
recommend trading in those securities and may not pass the
information along to others, except to employees who need to
know the information in order to perform their job
responsibilities with Mellon. These prohibitions remain in
effect until the information has become public.
Employees who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic
information. Receiving such information could create severe
limitations on their ability to carry out their
responsibilities to Mellon's fiduciary customers.
Employees managing the work of consultants and temporary
employees who have access to the types of confidential
information described in this Policy are responsible for
ensuring that consultants and temporary employees are aware of
Mellon's policy and the consequences of noncompliance.
Questions regarding Mellon's policy on material nonpublic
information, or specific information that might be subject to
it, should be referred to the General Counsel.
RESTRICTIONS As a diversified financial services organization, Mellon faces
ON THE FLOW OF unique challenges in complying with the prohibitions on
INFORMATION insider trading and tipping of material non-public
WITHIN MELLON information, and misuse of confidential information. This is
(THE "CHINESE because one Mellon unit might have material nonpublic
WALL") information about a company while other Mellon units may have
a desire, or even a fiduciary duty, to buy or sell that
company's securities or recommend such purchases or sales to
customers. To engage in such broad-ranging financial services
activities without violating laws or breaching Mellon's
fiduciary duties, Mellon has established a "Chinese Wall"
policy applicable to all employees. The "Chinese Wall"
separates the Mellon units or individuals that are likely to
receive material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that either
trade in securities--for Mellon's account or for the accounts
of others--or provide investment advice (Investment
Functions). Employees should refer to CPP 903-2(C) The Chinese
Wall.
1
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GLOSSARY
DEFINITIONS o 40-ACT ENTITY - A Mellon entity registered under the
Investment Company Act and/or the Investment Advisers Act of
1940
o ACCESS DECISION MAKER - A person designated as such by the
Investment Ethics Committee. Generally, this will be portfolio
managers and research analysts who make recommendations or
decisions regarding the purchase or sale of equity,
convertible debt, and non-investment grade debt securities for
investment companies and other managed accounts.
o ACCESS PERSON - As defined by Rule 17j-1 under the
Investment Company Act of 1940, "access person" means:
(A) With respect to a registered investment company or
an investment adviser thereof, any director, officer,
general partner, or advisory person (see definition
below), of such investment company or investment
adviser;
(B) With respect to a principal underwriter, any
director, officer, or general partner of such principal
underwriter who in the ordinary course of his business
makes, participates in or obtains information regarding
the purchase or sale of securities for the registered
investment company for which the principal underwriter
so acts, or whose functions or duties as part of the
ordinary course of his business relate to the making of
any recommendations to such investment company regarding
the purchase or sale of securities.
(C) Notwithstanding the provisions of paragraph (A)
hereinabove, where the investment adviser is primarily
engaged in a business or businesses other than advising
registered investment companies or other advisory
clients, the term "access person" shall mean: any
director, officer, general partner, or advisory person
of the investment adviser who, with respect to any
registered investment company, makes any
recommendations, participates in the determination of
which recommendation shall be made, or whose principal
function or duties relate to the determination of which
recommendation will be made, to any such investment
company; or who, in connection with his duties, obtains
any information concerning securities recommendations
being made by such investment adviser to any registered
investment company.
(D) An investment adviser is "primarily engaged in a
business or businesses other than advising registered
investment companies or other advisory clients" when,
for each of its most recent three fiscal years or for
the period of time since its organization, whichever is
lesser, the investment adviser derived, on an
unconsolidated basis, more than 50 percent of (i) its
total sales and revenues, and (ii) its income (or loss)
before income taxes and extraordinary items, from such
other business or businesses.
o ADVISORY PERSON of a registered investment company or an
investment adviser thereof means:
(A) Any employee of such company or investment adviser
(or any company in a control relationship to such
investment company or investment adviser) who, in
connection with his regular functions or duties, makes,
participates in, or obtains information regarding the
purchase or sale of a security by a registered
investment company, or whose functions relate to the
making of any recommendation with respect to such
purchases or sales; and
(B) Any natural person in a control relationship to such
company or investment adviser who obtains information
concerning recommendations made to such company with
regard to the purchase or sale of a security.
o APPROVAL - written consent or written notice of
non-objection.
o BENEFICIAL OWNERSHIP - The definition that follows conforms
to interpretations of the Securities and Exchange Commission
on this matter. Because a determination of beneficial
ownership requires a detailed analysis of personal financial
circumstances that are subject to change, Corporate Compliance
ordinarily will not advise employees on this definition. It is
the responsibility of each employee to read the definition and
based on that definition, determine whether he/she is the
beneficial owner of an account. If the employee determines
that he/she is not a beneficial owner of an account and
Corporate Compliance becomes aware of the existence of the
account, the employee will be responsible for justifying
his/her determination.
Securities owned of record or held in the employee's name are
generally considered to be beneficially owned by the employee.
Securities held in the name of any other person are deemed to
be beneficially owned by the employee if by reason of any
contract, understanding, relationship, agreement or other
arrangement, the employee obtains therefrom benefits
substantially equivalent to those of ownership, including the
power to vote, or to direct the disposition of, such
securities. Beneficial ownership includes securities held by
others for the employee's benefit (regardless of record
ownership), e.g., securities held for the employee or members
of the employee's immediate family, defined below, by agents,
custodians, brokers, trustees, executors or other
administrators; securities owned by the employee, but which
have not been transferred into the employee's name on the
books of the company; securities which the employee has
pledged; or securities owned by a corporation that should be
regarded as the employee's personal holding corporation. As a
natural person, beneficial ownership is deemed to include
securities held in the name or for the benefit of the
employee's immediate family, which includes the employee's
spouse, the employee's minor children and stepchildren and the
employee's relatives or the relatives of the employee's spouse
who are sharing the employee's home, unless because of
countervailing circumstances, the employee does not enjoy
benefits substantially equivalent to those of ownership.
Benefits substantially equivalent to ownership include, for
example, application of the income derived from such
securities to maintain a common home, meeting expenses that
such person otherwise would meet from other sources, and the
ability to exercise a controlling influence over the purchase,
sale or voting of such securities. An employee is also deemed
the beneficial owner of securities held in the name of some
other person, even though the employee does not obtain
benefits of ownership, if the employee can vest or revest
title in himself at once, or at some future time.
In addition, a person will be deemed the beneficial owner of a
security if he has the right to acquire beneficial ownership
of such security at any time (within 60 days) including but
not limited to any right to acquire: (1) through the exercise
of any option, warrant or right; (2) through the conversion of
a security; or (3) pursuant to the power to revoke a trust,
nondiscretionary account or similar arrangement.
With respect to ownership of securities held in trust,
beneficial ownership includes ownership of securities as a
trustee in instances where either the employee as trustee or a
member of the employee's "immediate family" has a vested
interest in the income or corpus of the trust, the ownership
by the employee of a vested beneficial interest in the trust
and the ownership of securities as a settlor of a trust in
which the employee as the settlor has the power to revoke the
trust without obtaining the consent of the beneficiaries.
Certain exemptions to these trust beneficial ownership rules
exist, including an exemption for instances where beneficial
ownership is imposed solely by reason of the employee being
settlor or beneficiary of the securities held in trust and the
ownership, acquisition and disposition of such securities by
the trust is made without the employee's prior approval as
settlor or beneficiary. "Immediate family" of an employee as
trustee means the employee's son or daughter (including any
legally adopted children) or any descendant of either, the
employee's stepson or stepdaughter, the employee's father or
mother or any ancestor of either, the employee's stepfather or
stepmother and the employee's spouse.
To the extent that stockholders of a company use it as a
personal trading or investment medium and the company has no
other substantial business, stockholders are regarded as
beneficial owners, to the extent of their respective
interests, of the stock thus invested or traded in. A general
partner in a partnership is considered to have indirect
beneficial ownership in the securities held by the partnership
to the extent of his pro rata interest in the partnership.
Indirect beneficial ownership is not, however, considered to
exist solely by reason of an indirect interest in portfolio
securities held by any holding company registered under the
Public Utility Holding Company Act of 1935, a pension or
retirement plan holding securities of an issuer whose
employees generally are beneficiaries of the plan and a
business trust with over 25 beneficiaries.
Any person who, directly or indirectly, creates or uses a
trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement or device with the purpose or
effect of divesting such person of beneficial ownership as
part of a plan or scheme to evade the reporting requirements
of the Securities Exchange Act of 1934 shall be deemed the
beneficial owner of such security.
The final determination of beneficial ownership is a question
to be determined in light of the facts of a particular case.
Thus, while the employee may include security holdings of
other members of his family, the employee may nonetheless
disclaim beneficial ownership of such securities.
o "CHINESE WALL" POLICY - procedures designed to restrict the
flow of information within Mellon from units or individuals
who are likely to receive material nonpublic information to
units or individuals who trade in securities or provide
investment advice.
o DIRECT FAMILY RELATION - employee's husband, wife, father,
mother, brother, sister, daughter or son. Includes the
preceding plus, where appropriate, the following
prefixes/suffix: grand-, step-, foster-, half- and -in-law.
o DISCRETIONARY TRADING ACCOUNT - an account over which the
employee has no direct or indirect control over the investment
decision making process.
o EMPLOYEE - any employee of Mellon Financial Corporation or
its more-than-50%-owned direct or indirect subsidiaries;
includes all full-time, part-time, benefited and
non-benefited, exempt and non-exempt, domestic and
international employees; does not include consultants and
contract or temporary employees.
o EXEMPT SECURITIES - Exempt Securities are defined as:
- direct obligations of the government of the United
States;
- high quality short-term debt instruments;
- bankers' acceptances;
- bank certificates of deposit and time deposits;
- commercial paper;
- repurchase agreements;
- securities issued by open-end investment companies;
o FAMILY RELATION - see direct family relation.
o GENERAL COUNSEL - General Counsel of Mellon Financial
Corporation or any person to whom relevant authority is
delegated by the General Counsel.
o INDEX FUND - an investment company or managed portfolio
which contains securities of an index in proportions designed
to replicate the return of the index.
o INITIAL PUBLIC OFFERING (IPO) - the first offering of a
company's securities to the public through an allocation by
the underwriter.
o INVESTMENT CLUB - is a membership organization where
investors make joint decisions on which securities to buy or
sell. The securities are generally held in the name of the
investment club. Since each member of an investment club
participates in the investment decision making process,
Insider Risk Employees, Investment Employees and Access
Decision Makers belonging to such investment clubs must
preclear and report the securities transactions contemplated
by such investment clubs. In contrast, a private investment
company is an organization where the investor invests his/her
money, but has no direct control over the way his/her money is
invested. Insider Risk Employees, Investment Employees and
Access Decision Makers investing in such a private investment
company are not required to preclear any of the securities
transactions made by the private investment company. Insider
Risk Employees, Investment Employees and Access Decision
Makers are required to report their investment in a private
investment company to the Manager of Corporate Compliance and
certify to the Manager of Corporate Compliance that they have
no direct control over the way their money is invested.
o INVESTMENT COMPANY - a company that issues securities that
represent an undivided interest in the net assets held by the
company. Mutual funds are investment companies that issue and
sell redeemable securities representing an undivided interest
in the net assets of the company.
o INVESTMENT ETHICS COMMITTEE is composed of investment,
legal, compliance, and audit management representatives of
Mellon and its affiliates. The members of the Investment
Ethics Committee are:
President and Chief Investment Officer of The Dreyfus
Corporation (Committee Chair)
General Counsel, Mellon Financial Corporation
Chief Risk Management Officer, Mellon Trust
Manager of Corporate Compliance, Mellon Financial
Corporation
Corporate Chief Auditor, Mellon Financial Corporation
Chief Investment Officer, Mellon Private Asset
Management
Executive Officer of a Mellon investment adviser
(rotating membership)
The Committee has oversight of issues related to personal
securities trading and investment activity by Access Decision
Makers.
o MANAGER OF CORPORATE COMPLIANCE - the employee within the
Audit and Risk Review Department of Mellon Financial
Corporation who is responsible for administering the
Securities Trading Policy, or any person to whom relevant
authority is delegated by the Manager of Corporate Compliance.
o MELLON - Mellon Financial Corporation and all of its direct
and indirect subsidiaries.
o OPTION - a security which gives the investor the right, but
not the obligation, to buy or sell a specific security at a
specified price within a specified time. For purposes of
compliance with the Policy, any Mellon employee who buys/sells
an option, is deemed to have purchased/sold the underlying
security when the option was purchased/sold. Four combinations
are possible as described below.
- Call Options
If a Mellon employee buys a call option, the employee
is considered to have purchased the underlying
security on the date the option was purchased.
If a Mellon employee sells a call option, the
employee is considered to have sold the underlying
security on the date the option was sold.
- Put Options
If a Mellon employee buys a put option, the employee
is considered to have sold the underlying security
on the date the option was purchased.
If a Mellon employee sells a put option, the employee
is considered to have bought the underlying
security on the date the option was sold.
Below is a table describing the above:
------------------------------------------------
Transaction Type
------------------------------------------------
---------------------------------------------------------
Option Type Buy Sale
---------------------------------------------------------
---------------------------------------------------------
Put Sale of Underlying Purchase of
Security Underlying Security
---------------------------------------------------------
---------------------------------------------------------
Call Purchase of Underlying Sale of Underlying
Security Security
---------------------------------------------------------
o PRECLEARANCE COMPLIANCE OFFICER - a person designated by the
Manager of Corporate Compliance and/or the Investment Ethics
Committee to administer, among other things, employees'
preclearance requests for a specific business unit.
o PRIVATE PLACEMENT - an offering of securities that is exempt
from registration under the Securities Act of 1933 because it
does not constitute a public offering. Includes limited
partnerships.
o SENIOR MANAGEMENT COMMITTEE - the Senior Management
Committee of Mellon Financial Corporation.
o SHORT SALE - the sale of a security that is not owned by the
seller at the time of the trade.
EXHIBIT A - SAMPLE INSTRUCTION LETTER TO BROKER
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted above,
please be advised that the Compliance Department of my employer should be noted
as an "Interested Party" with respect to my accounts. They should, therefore, be
sent copies of all trade confirmations and account statements relating to my
account.
Please send the requested documentation ensuring the account holder's name
appears on all correspondence to:
Manager, Corporate Compliance Preclearance Compliance Officer
Mellon Bank or (obtain address from your
PO Box 3130 Pittsburgh, PA designated Preclearance
15230-3130 Compliance Officer)
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Manager, Corporate Compliance (151-4340) or Preclearance Compliance Officer
Securities Trading Policy
Dreyfus Nonmanagement Board Member Edition
INTRODUCTION The Securities Trading Policy (the "Policy") is designed to
reinforce the reputation for integrity of The Dreyfus Corporation
and its subsidiaries (collectively, "Dreyfus") by avoiding even
the appearance of impropriety in the conduct of their businesses.
The Policy sets forth procedures and limitations which govern the
personal securities transactions of every Dreyfus employee.
SPECIAL This edition of the Policy has been prepared specifically
EDITION for Nonmanagement Board Members of Dreyfus and the investment
companies advised by Dreyfus (each a "Fund").
NONMANAGEMENT You are considered to be a Nonmanagement Board Member if you are:
BOARD MEMBER
o a director of Dreyfus who is not also an officer or employee
of Dreyfus ("Dreyfus Board Member"); or
o a director or trustee of any Fund who is not also an officer
or employee of Dreyfus ("Mutual Fund Board Member").
INDEPENDENT The term "Independent Mutual Fund Board Member" means those
MUTUAL FUND Mutual Fund Board Members who are not deemed "interested
BOARD MEMBER persons" of their Fund(s), as defined by the Investment
Company Act of 1940, as amended.
STANDARDS OF Outside Activities
CONDUCT FOR
NONMANAGEMENT - Mutual Fund Board Members are prohibited from accepting
BOARD MEMBERS nomination or serving as a director, trustee or managing general
partner of an investment company not advised by Dreyfus, or
accepting employment with or acting as a consultant to any person
acting as a registered investment adviser to an investment
company, without the express prior approval of the board of
directors/trustees of the pertinent Fund(s) for which the Mutual
Fund Board Member serves as a director/trustee. In any such
circumstance, management of Dreyfus must be given advance notice
by the Mutual Fund Board Member of his/her request in order to
allow management to provide its input, if any, for the relevant
Fund board of directors/trustees' consideration.
- Dreyfus Board Members are prohibited from accepting nomination
or serving as a director, trustee or managing general partner
of an investment company not advised by Dreyfus, or accepting
employment with or acting as a consultant to any person acting
as a registered investment adviser to an investment company,
without Dreyfus's express prior approval.
- Independent Mutual Fund Board Members are prohibited from
owning Mellon securities (since that would destroy his or her
independent status).
- Nonmanagement Board Members are prohibited from buying or
selling Mellon's publicly traded securities during a blackout
period, which begins the 16th day of the last month of each
calendar quarter and ends three business days after Mellon
publicly announces the financial results for that quarter.
Insider Trading and Tipping
Federal securities laws generally prohibit the trading of
securities while in possession of "material nonpublic"
information regarding the issuer of those securities (insider
trading). Any person who passes along material nonpublic
information upon which a trade is based (tipping) may also be
liable.
Information is "material" if there is a substantial likelihood
that a reasonable investor would consider it important in
deciding whether to buy, sell or hold securities. Obviously,
information that would affect the market price of a security
would be material. Examples of information that might be material
include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial assets;
o tender offers, which are often material for the party making
the tender offer as well as for the issuer of the securities
for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors, customers or
suppliers relating to a company's credit standing;
o earnings and other financial information, such as large or
unusual write-offs, write-downs, profits or losses;
o pending discoveries or developments, such as new products,
sources of materials, patents, processes, inventions or
discoveries of mineral deposits;
o a proposal or agreement concerning a financial restructuring;
o a proposal to issue or redeem securities, or a development
with respect to a pending issuance or redemption of securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or decreases in
orders;
o the institution of, or a development in, litigation or a
regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director of that
company; and
o information regarding a company's possible noncompliance with
environmental protection laws.
This list is not exhaustive. All relevant circumstances must be
considered when determining whether an item of information is
material.
"Nonpublic"- Information about a company is nonpublic if it is
not generally available to the investing public. Information
received under circumstances indicating that it is not yet in
general circulation and which may be attributable, directly or
indirectly, to the company or its insiders is likely to be deemed
nonpublic information.
If you obtain material non-public information you may not trade
related securities until you can refer to some public source to
show that the information is generally available (that is,
available from sources other than inside sources) and that enough
time has passed to allow wide dissemination of the information,
While information appearing in widely accessible sources--such as
in newspapers or on the internet--becomes public very soon after
publication, information appearing in less accessible
sources--such as regulatory filings, may take up to several days
to be deemed public. Similarly, highly complex information might
take longer to become public than would information that is
easily understood by the average investor.
Conflict of Interest--No Nonmanagement Board Member may recommend
a securities transaction for Mellon, Dreyfus or any Fund without
disclosing any interest he or she has in such securities or
issuer thereof (other than an interest in publicly traded
securities where the total investment is less than or equal to
$25,000), including:
o any direct or indirect beneficial ownership of any securities
of such issuer;
o any contemplated transaction by the Nonmanagement Board Member
in such securities;
o any position with such issuer or its affiliates; and
o any present or proposed business relationship between such
issuer or its affiliates and the Nonmanagement Board Member or
any party in which the Nonmanagement Board Member has a
beneficial ownership interest (see "Beneficial Ownership" in
the Glossary).
Portfolio Information--No Nonmanagement Board Member may divulge
the current portfolio positions, or current or anticipated
portfolio transactions, programs or studies, of Mellon, Dreyfus
or any Fund, to anyone unless it is properly within his or her
responsibilities as a Nonmanagement Board Member to do so.
Material Nonpublic Information--No Nonmanagement Board Member may
engage in or recommend any securities transaction, for his or her
own benefit or for the benefit of others, including Mellon,
Dreyfus or any Fund, while in possession of material nonpublic
information. No Nonmanagement Board Member may communicate
material nonpublic information to others unless it is properly
within his or her responsibilities as a Nonmanagement Board
Member to do so.
PRECLEARANCE Nonmanagement Board Members are permitted to engage in personal
FOR securities transactions without obtaining prior approval
PERSONAL from the Preclearance Compliance Officer.
SECURITIES
TRANSACTIONS
PERSONAL - Independent Mutual Fund Board Members--Any Independent Mutual
SECURITIES Fund Board Member, as defined above, who effects a securities
TRANSACTIONS transaction where he or she knew, or in the ordinary course of
REPORTS fulfilling his or her official duties should have
known, that during the 15-day period
immediately preceding or after the date of such
transaction, the same security was purchased or sold, or was
being considered for purchase or sale by Dreyfus (including any
Fund or other account managed by Dreyfus), is required to
report such personal securities transaction. In the event a
personal securities transaction report is required, it must be
submitted to the Preclearance Compliance Officer not later than
ten days after the end of the calendar quarter in which the
transaction to which the report relates was effected. The
report must include the date of the transaction, the title and
number of shares or principal amount of the security, the
nature of the transaction (e.g., purchase, sale or any other
type of acquisition or disposition), the price at which the
transaction was effected and the name of the broker or other
entity with or through whom the transaction was effected. This
reporting requirement can be satisfied by sending a copy of the
confirmation statement regarding such transaction to the
Preclearance Compliance Officer within the time period
specified.
o Dreyfus Board Members and "Interested" Mutual Fund Board
Members--Dreyfus Board Members and Mutual Fund Board Members
who are "interested persons" of a Fund, as defined by the
Investment Company Act of 1940, are required to report their
personal securities transactions. Personal securities
transaction reports are required to be submitted to the
Preclearance Compliance Officer not later than ten days after
the end of the calendar quarter in which the transaction to
which the report relates was effected. The report must include
the date of the transaction, the title and number of shares or
principal amount of the security, the nature of the
transaction (e.g., purchase, sale or any other type of
acquisition or disposition), the price at which the
transaction was effected and the name of the broker or other
entity with or through whom the transaction was effected.
This reporting requirement can be satisfied by sending a copy
of the confirmation statement regarding such transaction to
the Preclearance Compliance Officer within the time period
specified.
EXEMPTIONS FROM Notwithstanding the foregoing, securities transaction reports
REPORTING are not required for the following transactions purchases or
REQUIREMENTS sales of "Exempt Securities" (see Glossary);
purchases or sales effected in any account over which the
Nonmanagement Board Member has no direct or indirect control
over the investment decision-making process (i.e.,
discretionary trading accounts); transactions which are
non-volitional on the part of the Nonmanagement Board Member
(such as stock dividends);
purchases which are part of an automatic reinvestment of
dividends under a DRIP;
purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to the
extent such rights were acquired from such issuer; and\or
sales of rights acquired from an issuer, as described above.
CONFIDENTIAL TREATMENT
THE PRECLEARANCE COMPLIANCE OFFICER WILL USE HIS OR HER BEST
EFFORTS TO ASSURE THAT ALL PERSONAL SECURITIES TRANSACTION
REPORTS ARE TREATED AS "PERSONAL AND CONFIDENTIAL." HOWEVER, SUCH
DOCUMENTS WILL BE AVAILABLE FOR INSPECTION BY APPROPRIATE
REGULATORY AGENCIES AND OTHER PARTIES WITHIN AND OUTSIDE MELLON
AS ARE NECESSARY TO EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER
THIS POLICY.
GLOSSARY
DEFINITIONS - ACCESS PERSON - As defined by Rule 17j-1 under the Investment
Company Act of 1940, "access person" includes, with respect to
a registered investment company or an investment adviser
thereof, any director of such investment company or investment
adviser. Each Nonmanagement Board Member is therefore
considered an access person of Dreyfus or their respective
Funds.
- APPROVAL - written consent or written notice of nonobjection.
- BENEFICIAL OWNERSHIP - The definition that follows conforms to
interpretations of the Securities and Exchange Commission on
this matter. Because a determination of beneficial ownership
requires a detailed analysis of personal financial
circumstances that are subject to change, Corporate
Compliance ordinarily will not advise Nonmanagement Board
Members ("NBM") on this definition. It is the responsibility
of each NBM to read the definition, and based on that
definition determine whether he/she is the beneficial owner
of a security.
Securities owned of record or held in the NBM's name are
generally considered to be beneficially owned by the NBM.
Securities held in the name of any other person are deemed to be
beneficially owned by the NBM if by reason of any contract,
understanding, relationship, agreement or other arrangement,
the NBM obtains therefrom benefits substantially equivalent to
those of ownership, including the power to vote, or to direct
the disposition of, such securities. Beneficial ownership
includes securities held by others for the NBM's benefit
(regardless of record ownership), e.g., securities held for the
NBM or members of the NBM's immediate family, defined below, by
agents, custodians, brokers, trustees, executors or other
administrators; securities owned by the NBM, but which have not
been transferred into the NBM's name on the books of the
company; securities which the NBM has pledged; or securities
owned by a corporation that should be regarded as the NBM's
personal holding corporation. As a natural person, beneficial
ownership is deemed to include securities held in the name or
for the benefit of the NBM's immediate family, which includes
the NBM's spouse, the NBM's minor children and stepchildren and
the NBM's relatives or the relatives of the NBM's spouse who
are sharing the NBM's home, unless because of countervailing
circumstances, the NBM does not enjoy benefits substantially
equivalent to those of ownership. Benefits substantially
equivalent to ownership include, for example, application of
the income derived from such securities to maintain a common
home, meeting expenses that such person otherwise would meet
from other sources, and the ability to exercise a controlling
influence over the purchase, sale or voting of such securities.
An NBM is also deemed the beneficial owner of securities held
in the name of some other person even through the NBM does not
obtain benefits of ownership, if the NBM can vest or revest
title in himself or herself at once, or at some future time.
In addition, a person will be deemed the beneficial owner of a
security if he/she has the right to acquire beneficial
ownership of such security at any time (within 60 days)
including but not limited to any right to acquire: (1) through
the exercise of any option, warrant or right; (2) through the
conversion of a security; or (3) pursuant to the power to
revoke a trust, discretionary account or similar arrangement.
With respect to ownership of securities held in trust, beneficial
ownership includes ownership of securities as a trustee in
instances where either the NBM as trustee or a member of the
NBM's "immediate family" has a vested interest in the income or
corpus of the trust, the ownership by the NBM of a vested
beneficial interest in the trust and the ownership of
securities as a settlor of a trust in which the NBM as the
settlor has the power to revoke the trust without obtaining the
consent of the beneficiaries. Certain exemptions to these trust
beneficial ownership rules exist, including an exemption for
instances where beneficial ownership is imposed solely by
reason of the NBM being settlor or beneficiary of the
securities held in trust and the ownership, acquisition and
disposition of such securities by the trust is made without the
NBM's prior approval as settlor or beneficiary. "Immediate
family" of an NBM as trustee means the NBM's son or daughter
(including any legally adopted children or any descendant of
either), the NBM's stepson or stepdaughter, the NBM's father or
mother or any ancestor of either, the NBM's stepfather or
stepmother and the NBM's spouse.
To the extent that stockholders of a company use it as a personal
trading or investment medium and the company has no other
substantial business, stockholders are regarded as beneficial
owners, to the extent of their respective interests, of the
stock thus invested or traded in. A general partner in a
partnership is considered to have indirect beneficial ownership
in the securities held by the partnership to the extent of his
pro rata interest in the partnership. Indirect beneficial
ownership is not, however, considered to exist solely by reason
of an indirect interest in portfolio securities held by any
holding company registered under the Public Utility Holding
Company Act of 1935, a pension or retirement plan holding
securities of an issuer whose employees generally are
beneficiaries of the plan, and a business trust with over 25
beneficiaries.
Any person who, directly or indirectly, creates or uses a trust,
proxy, power of attorney, pooling arrangement or any other
contract, arrangement or device with the purpose or effect of
divesting such person of beneficial ownership as part of a plan
or scheme to evade the reporting requirements of the Securities
Exchange Act of 1934 shall be deemed the beneficial owner of
such security.
The final determination of beneficial ownership is a question to
be determined in light of the facts of a particular case. Thus,
while the NBM may report the security holdings of other members
of his family, the NBM may nonetheless disclaim beneficial
ownership of such securities.
o DISCRETIONARY TRADING ACCOUNT - an account over which the NBM
has no direct or indirect control over the investment decision
making process.
o EXEMPT SECURITIES - Exempt Securities are defined as:
- direct obligations of the government of the United
States;
- bankers' acceptances;
- bank certificates of deposit and time deposits;
- commercial paper;
- high quality short-term debt instruments;
- repurchase agreements;
- securities issued by open-end investment companies.
o INVESTMENT COMPANY - a company that issues securities that
represent an undivided interest in the net assets held by the
company. Mutual funds are investment companies that issue and
sell redeemable securities representing an undivided interest
in the net assets of the company.
o INVESTMENT ETHICS COMMITTEE is composed of investment, legal,
compliance, and audit management representatives of Mellon and
its affiliates. The members of the Investment Ethics Committee
are:
President and Chief Investment Officer of The Dreyfus
Corporation (Committee Chair)
General Counsel, Mellon Financial Corporation
Chief Risk Management Officer, Mellon Trust
Manager of Corporate Compliance, Mellon Financial
Corporation
Corporate Chief Auditor, Mellon Financial Corporation
Chief Investment/Executive Officers of two
investment departments or affiliates (rotating memberships)
The Committee has oversight of issues related to personal
securities trading and investment activity by certain
employees, including those who make recommendations or
decisions regarding the purchase or sale of portfolio
securities by Funds or other managed accounts.
o MELLON - Mellon Financial Corporation and all of its direct and
indirect subsidiaries.
o PRECLEARANCE COMPLIANCE OFFICER - a person designated by the
Manager of Corporate Compliance and/or the Investment Ethics
Committee to administer, among other things, employees'
preclearance requests for a specific business unit.
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