EX-99.P 2 coe-ham.txt EXH. 99 P(I) CODE OF ETHICS HERITAGE ASSET MANAGEMENT, INC. I. STATEMENT OF GENERAL POLICY --------------------------- This Code of Ethics has been adopted by Heritage Asset Management, Inc. ("Heritage") in compliance with Rule 17j-1 under the Investment Company Act of 1940, as amended, ("Rule 17j-1") and applies to all Employees as defined in Section II. All Appendices referred to herein are attached hereto and are a part of this Code. Capitalized terms used in this Code are defined in Section II. This Code is based on the principle that the Employees of Heritage have a fiduciary duty to place the interests of Advisory Clients ahead of their own interests and to avoid activities, interests and relationships that might interfere with making decisions in the best interests of Advisory Clients. Doubtful situations should be resolved in favor of Advisory Clients because technical compliance with the Code's procedures will not automatically insulate from scrutiny activities that indicate an abuse of your fiduciary duties. Since we believe the actions of all our Employees, Access Persons and Investment Persons should be above reproach, we feel it important to affirm annually our individual and collective commitment to ethical business principles and procedures. This Code is designed to maintain high standards of practice and ethics. Since no set of rules can include all problems or issues that can arise, you are encouraged to address those issues which are unclear to you with the Compliance Officer. This Code imposes specific restrictions on Employees, Access Persons and Investment Persons (in some cases this includes immediate family members) based on their status relative to access to investment related data or their ability to influence investment decisions. Somewhat stricter restrictions on certain activities and/or transactions apply to Access Persons, Investment Personnel and Portfolio Managers due to their more direct involvement and greater influence on portfolio trading activities of Advisory Clients. For example, many Employees will be subject to reporting only mutual fund trades while Access Persons and Investment Personnel are required to report all trading. Violations can subject you to specific disciplinary action, as outlined in Section VIII.B. of this Code, including termination where appropriate. II. DEFINITIONS ----------- (a) "Access Person" means any director, officer or Investment Person of Heritage or any person who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a security by an Advisory Client. (b) "Advisory Client" means each of the Heritage Funds and any other client to whom Heritage provides investment advice including but not limited to those listed in Appendix 1. 1 (c) "Beneficial Interest" means the opportunity to share, directly or indirectly, in any profit or loss on a transaction in Securities, including, but not limited to, all joint accounts, partnerships, and trusts. (d) "Compliance Officer" means the so-designated individual at Heritage (or that person's designee if the compliance person is absent or unavailable) as set forth in Appendix 4 as amended from time to time. (e) "Directors of Heritage" means any person who serves as a director on the Board of Directors of Heritage. (f) "Dual Employee" means any person who is employed by Heritage and another affiliated company. (g) "Employee" means any person who is employed by Heritage in exchange for predetermined and periodic financial compensation. (h) "Equivalent Security" means any Security issued by the same entity as the issuer of a security, including options, rights, warrants, preferred stock, restricted stock, bonds, and other obligations of that issuer. (i) "Heritage" means Heritage Asset Management, Inc. (j) "Heritage Fund" means the Heritage investment companies listed in Appendix 1 as amended from time to time. (k) "Immediate Family" means any of the following persons who reside in the same household as an Employee named in this Section II: child grandparent son-in-law stepchild spouse daughter-in-law grandchild sibling brother-in-law parent mother-in-law sister-in-law stepparent father-in-law Immediate Family includes adoptive relationships. (l) "Initial Public Offering" is an offering of securities registered under the Securities Act of 1933 by an issuer who immediately before the registration of such securities was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934. (m) "Investment Account" means the following Securities accounts: any personal account of an Employee or Access Person; any joint or tenant-in-common account in which the Employee or Access Person has an interest or is a participant; any account for which the Employee or Access Person acts as trustee, executor, or custodian; any account over which the Employee or Access Person has investment discretion or otherwise can exercise control (other than non-related clients' accounts over which the Employee or Access Person has investment discretion), including the accounts of entities controlled directly or indirectly by the Employee or Access Person; as well as any account in which 2 an Access Person has a direct or indirect Beneficial Interest (other than such accounts over which the Access Person has no investment discretion and cannot otherwise exercise control). (n) "Investment Personnel" (or, singularly, "Investment Person") are (i) Employees of Heritage (or of any company in a control relationship to such companies) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of a security, or whose functions relate to the making of any recommendation with respect to the purchases and sales, or (ii) any person who controls a Heritage and who obtains information concerning recommendations made to an Advisory Client regarding the purchase and sale of securities by the Advisory Client. References to Investment Personnel include Portfolio Managers. (o) "Material Investigation" means an investigation that leads to the imposition of a significant remedial action for a violation of the Code. (p) "Portfolio Manager" means those natural persons employed by Heritage who are entrusted with the direct responsibility and authority to make investment decisions affecting any Advisory Client. (q) "Pre-Clearance Officer" means the so-designated individual at Heritage (or that person's designee if the Pre-Clearance Officer is absent or unavailable) as set forth in Appendix 5 as amended from time to time. (r) "Limited Offering" means a limited offering exempt from registration pursuant to Rules 504, 505 or 506 or under Section 4(2) or 4(6) of the Securities Act of 1933. (s) "Security" includes stock, restricted stock, private placement securities, notes, bonds, debentures, and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, registered investment companies, investment contracts, and all derivative instruments, such as options and warrants. (t) "Securities Transaction" means a purchase or sale of Securities. III. APPLICATION OF THE CODE OF ETHICS TO EMPLOYEES AND ACCESS PERSONS ----------------------------------------------------------------- All Employees and Access Persons are covered by some portion of this Code. It is the responsibility of each Employee or Access Person to read and understand which sections apply to them. If there is any doubt about the applicability of a particular provision, consult the Compliance or Pre-Clearance Officer. Notwithstanding the definition of Employee or Access Persons, the following provisions of the Code do not apply to Directors of Heritage, Dual Employees, and the Immediate Families of such persons: 1. pre-clearance of trades of all securities under Section IV.A, B, and C; and 3 2. prohibited transactions under Section IV.D. IV. PRE-CLEARANCE REQUIREMENTS AND PROHIBITED TRANSACTIONS ------------------------------------------------------ Pre-clearance is required for Securities Transactions based on your status relative to access to investment data or ability to influence investment decisions. These categories are described below. Procedures for pre-clearance are outlined as well as prohibited acts. A. PRE-CLEARANCE REQUIREMENTS -------------------------- Transactions described in this section require approval by the Pre-Clearance Officer prior to being placed. Section IV. D. of this Code describes Prohibited Transactions applicable to all Employees. 1. ALL EMPLOYEES - All Employees are required to pre-clear with the Pre-Clearance Officer any transaction involving a registered open-end investment company (mutual fund) unless such transaction is part of a periodic investment (including 401k plans) or redemption plan (i.e. systematic withdrawal). However, allocations for these periodic investments or redemptions must have initial pre-clearance by the Pre-Clearance Officer. Any allocation changes or transactions outside of a previously approved periodic investment or redemption plan must also receive pre-clearance. Pre-clearance is not necessary for transactions involving a money market mutual fund. Mutual fund transactions in which the Employee does not know of the transaction before it is completed (such as discretionary trades made by a fiduciary in which the Employee is not consulted or advised of the trade before it is executed) are exempt from this pre-clearance requirement. 2. ACCESS PERSONS AND INVESTMENT PERSONNEL - In addition to pre-clearance for trades listed in 1. above, all Access Persons and Investment Personnel must pre-clear trades in all other Securities unless specifically exempted by this Code section. Participation in an Initial Public Offering or Limited Offering is generally prohibited unless exceptional circumstances exist. In that case, pre-clearance is required using the form provided in Appendix 8. This limitation does not preclude participation in an initial offering of a registered open-end investment company with proper pre-clearance. a. Exemptions from pre-clearance requirements available to Access Persons and Investment Personnel: (1) Securities Transactions in which the Access Person has no knowledge of the transaction before it is completed (such as discretionary trades made by a fiduciary in which the Access Person is not consulted or advised of the trade before it is executed). (2) Securities Transactions for accounts of spouses of all Access Persons and Investment Persons; provided however, that the applicable Access Person or Investment Person is not listed as a party to his or her spouse's trading account. 4 (3) Any purchase or sale of Securities of any issuer with a market capitalization in excess of $10 billion (4) Any acquisition of Securities through stock dividends, dividend reinvestments, stock splits, mergers, consolidations, spin-offs, or other similar corporate reorganizations or distributions generally applicable to all holders of the same class of Securities. (5) Any acquisition of Securities through the exercise of rights issued by an issuer pro rata to all holders of a class of its Securities, to the extent the rights were acquired in the issue. (6) Any transaction involving: bankers' acceptances; bank certificates of deposit; commercial paper; high quality short-term debt (including repurchase agreements); commodity futures (including currency futures) and options thereon; interests in Securities comprising part of a broad-based, publicly traded market basket or index of stocks, approved for trading by the appropriate federal authority (for example, options on the S&P 500 Index); Securities directly issued by the U.S. Government; Raymond James Financial, Inc. stock purchased through a quarterly employee stock purchase plan; and other Securities as may from time to time be designated in writing by the Code of Ethics Review Committee on the ground that the risk of abuse is minimal or non-existent. B. PRE-CLEARANCE PROCEDURES ------------------------ Prior to entering an order for a Securities Transaction, an Employee or Access Person must fill out a Trade Authorization Request Form (Appendix 3) and submit the completed form to the Pre-Clearance Officer. (Proposed Securities Transactions for the Pre-Clearance Officer's Account must be submitted to the President of Heritage.) After receiving the completed Trade Authorization Request Form, the Pre-Clearance Officer will review the information in the form and, as soon as practicable (generally on the same day if the request is received before 2 PM and there is a Pre-clearance Officer available), determine whether to clear the proposed Securities Transaction. No order for a Securities Transaction for which pre-clearance authorization is sought may be placed prior to receipt of written authorization by the Pre-Clearance Officer. The date of any authorization must be reflected on the Trade Authorization Request Form. The Pre-Clearance Officer will send one copy of the completed form to the person seeking authorization and the other copy to the compliance department. Failure to comply with these pre-clearance provisions will subject you to disciplinary action as outlined in Code Section VIII.B. In some cases, the Pre-Clearance Officer may refuse to authorize a Securities Transaction for a reason that is confidential. The Pre-Clearance Officer is not required to give an explanation for refusing to authorize a Securities Transaction. 5 C. LENGTH OF TRADE AUTHORIZATION APPROVAL -------------------------------------- Authorizations provided by the Pre-Clearance Officer for personal trades of mutual funds are effective for one trading day only; all other Security Transactions authorizations are effective, unless earlier revoked, until the earlier of (1) the close of business on the third trading day after the authorization is granted, or (2) when the person requesting authorization learns that information in the Trade Authorization Request Form is not accurate. If a trade order is not placed within the applicable period, a new authorization must be obtained before the Securities Transaction is placed. If a trade order has been placed but has not been executed within the applicable effective period after authorization is granted (such as in the case of a limit order), no new authorization is necessary unless (1) the person requesting authorization amend the order, or (2) the order remains outstanding for more than 30 days. D. PROHIBITED ACTS --------------- The specific provisions and reporting requirements of this Code are concerned with certain investment activities of all Employees and Access Persons as herein defined, whom may benefit by, or interfere with, the purchase and sale of securities by an Advisory Client. Rule 17j-1 prohibits an Employee of an investment adviser or investment company from using information concerning the investments or investment intentions of an investment company, or from using their ability to influence such investment intentions, for personal gain or in a manner detrimental to the interest of an advisory client. In connection with the requirements of Rule 17j-1, it shall be a violation of this Code, for an Employee or Access Person, in connection with the purchase or sale, directly or indirectly, of a security held or to be acquired by an Advisory Client to: (a) employ any device, scheme or artifice to defraud an Advisory Client; (b) make to an Advisory Client (or its agents or affiliates) any untrue statement of a material fact, or to omit to state to an Advisory Client (or its agents or affiliates) a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (c) engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon an Advisory Client; or (d) engage in any manipulative practice with respect to an Advisory Client. In addition, the following activities constitute Prohibited Acts: 1. EMPLOYEES: a. Disclosure of confidential information. An Employee is prohibited from revealing non-public information relating to the investment intentions, activities or portfolios of the Heritage Funds except to (1) persons whose responsibilities require knowledge of the information, (2) regulatory authorities who have appropriate jurisdiction with respect to such matters, or (3) third parties who utilize such information for ratings or performance analysis. 6 b. Receiving or Offering of Gifts. Employees are prohibited from soliciting, accepting or giving of gifts or gratuities, except for gifts of a nominal value i.e., gifts whose reasonable value is no more than $100 a year) and customary business lunches, dinners, entertainment (e.g., sporting events), and promotional items (e.g., pens, mugs, T-shirts) in situations where the Employee, because of his or her position with Heritage, may be offered gifts or may wish to give gifts to unaffiliated persons or entities that do business with Heritage. If an Employee receives any gift that might be prohibited under this Code, s/he must promptly inform the Compliance Officer. c. Taking Advantage of Corporate Opportunities. Employees are prohibited from taking personal advantage of any opportunity properly belonging to the Advisory Clients. This includes, but is not limited to, acquiring Securities for one's own account that would otherwise be acquired for Advisory Clients. d. Using Position or Influence for Personal Benefit at Expense of Clients. Employees are prohibited from causing or attempting to cause an Advisory Client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the Employee. If an Employee or Immediate Family Member stands to materially benefit from an investment decision for an Advisory Client that the Employee or Access Person is recommending or participating in, the Employee or Access must disclose that interest to persons with authority to make investment decisions or to the Compliance Officer. Based on the information given, a decision will be made as to whether to restrict the Employee's or Access Person's participation in causing the Advisory Client to purchase or sell a Security in which the Employee or Access Person has an interest. Employees must disclose to the Portfolio Manager or to the Compliance Officer if the Employee in question is a Portfolio Manager, any Beneficial Interest that the Employee or Immediate Family member has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the Employee or Immediate Family Member or the appearance of impropriety. The person to whom the Employee reports the interest, in consultation with the Compliance Officer, must determine whether the Employee or Access Person will be restricted in making investment decisions. e. Personal Security Transactions. The following transactions are prohibited: (1) No Employee shall conduct a transaction while in possession of "inside" material nonpublic information regarding the Security or the issuer of the Security; (2) No Employee shall enter into a transaction intended to raise, lower, or maintain the price of any Security or to create a false appearance of active trading; and (3) No Employee shall purchase or sell a security (other than a registered open-end investment company) on any day during which that Employee or Access Person has knowledge that an Advisory Client has a pending "buy" or "sell" order in the same Security (or an Equivalent Security) until that order is executed or withdrawn, unless the Employee provides an explanation of why the trade is necessary and provision is made 7 for the Advisory Client trade to take precedence (in terms of price) over the Employee. Prior to approving a trade, the Pre-Clearance Officer must determine whether there is an open order for the Security by a Fund. (4) No Employee shall conduct any other transaction deemed by the Pre-Clearance Officer to involve a conflict of interest, possible diversion of corporate opportunity, or an appearance of impropriety. 2. ACCESS PERSONS: In addition to Prohibited Acts listed in 1. above, all Access Persons are subject to the further limitations shown below. a. No Access Person shall purchase a Security within 60 calendar days of the sale of that Security (or an Equivalent Security) or sell a Security within 60 calendar days of the purchase of the Security (or an Equivalent Security), unless the Access Person agrees to give up all profits on the transaction to a charitable organization designated by Heritage. This restriction shall not apply to purchases and sales or sales and purchases of: (1) shares of money market funds, (2) shares of mutual funds acquired through an automatic investment or redemption program, or (3) stock obtained through a quarterly employee stock purchase plan. b. No Access Person may serve on the board of directors of a publicly-traded company not affiliated with Heritage or the Heritage Funds absent prior written approval by the Compliance Officer. This approval rarely will be granted and, if granted, normally will require that the relevant Investment Person be isolated, through "Chinese Wall" or other procedures, from those making investment decisions related to the issuer on whose board the Investment Person sits. 3. PORTFOLIO MANAGER: Securities Transactions. In addition to the provisions applicable to all Employees and Access Persons listed above, no Portfolio Manager may buy or sell a Security in an investment account (or any account in which they hold a beneficial interest) within seven calendar days of a purchase or sale of the same Security (or an Equivalent Security) by any Advisory Client managed by the Portfolio Manager. For example, if an Advisory Client trades a security on day one, day eight (or the next trading day, whichever is later) is the first day its Portfolio Manager may trade that Security for an account in which he or she has a beneficial interest. This provision does not apply to mutual fund Advisory Client accounts in which the Portfolio Manager is a shareholder. 8 V. REPORTS ------- All Employees and Access Persons are required to provide certain periodic information to the Compliance Officer regarding their trading activity and holdings. The information required varies depending on your status relative to access to investment related data or ability to influence trading activity. The reporting requirements for Access Persons and Investment Persons include accounts in the name of Immediate Family (as defined in Section II. of the Code) member(s) residing in the same household - even if the Access Person or Investment Person is not named on the account. Certain transactions that are exempt from the reporting requirements are listed below. Failure to provide the required data in a timely fashion will subject you to disciplinary action as outlined in Code section VIII.B. A. INITIAL HOLDINGS REPORT ----------------------- Any person who becomes an Employee, Access Person or Investment Person of Heritage must submit, within 10 days of becoming such designation, an Initial Holdings Report (see Appendix 2) listing all of the securities held in an investment account. The Report will be sent by (and should be returned to) the Pre-Clearance Officer. B. QUARTERLY TRANSACTION REPORTS / DUPLICATE CONFIRMATIONS AND STATEMENTS ---------------------------------------------------------------------- Every Employee and Access Person must arrange for the Compliance Officer to receive directly from the broker, dealer, mutual fund company, or bank in question, duplicate copies of each confirmation and periodic statement for any Securities Transaction during the quarter for which that Employee or Access Person is required to obtain pre-clearance. All copies must be received no later than 10 days after the end of the calendar quarter. Each confirmation or statement must disclose the following information: 1. the date of the transaction; 2. the title (and interest rate and maturity date, if applicable); 3. the number of shares and principal amount; 4. the nature of the transaction (e.g., purchase, sale); 5. the price of the Security; and 6. the name of the broker, dealer, bank, or mutual fund through which the trade was effected. If an Employee or Access Person is not able to arrange for duplicate confirmations and statements to be sent that contain the information required above, the Employee or Access Person promptly must submit Quarterly Transaction Reports (see Appendix 7) within 10 days after the completion of each calendar quarter to the Compliance Officer. Every Employee or Access Person who establishes an account during the quarter must complete the required section pertaining to new accounts in the Quarterly Transaction Report (see Appendix 7). This Report must be submitted to the Compliance Officer within 10 days after the completion of each calendar quarter. In accordance with Raymond James Financial corporate policy, all Employee brokerage accounts must be maintained with a Raymond James affiliated 9 broker-dealer. All Employees opening or maintaining a brokerage account outside of Raymond James must receive written permission from the Compliance Officer. C. ANNUAL HOLDINGS REPORT ---------------------- Each Employee or Access Person must submit an Annual Holdings Report (see Appendix 2) listing all Securities in an Investment Account. The information in the Annual Holdings Report must be current as of a date no more than 30 days before the report is submitted. The completed report should be submitted to the Compliance Officer by January 31 following the end of the calendar year. VI. EXEMPTIONS, DISCLAIMERS AND AVAILABILITY OF REPORTS --------------------------------------------------- A. EXEMPTIONS FROM REPORTING REQUIREMENTS -------------------------------------- 1. Securities Transactions involving the following circumstances or Securities are exempt from reporting requirements: (1) the Employee or Access Person did not have direct or indirect influence or control over the transaction; (2) Securities directly issued by the U.S. Government; (3) bank certificates of deposit; (4) other Securities as may from time to time be designated in writing by the Code of Ethics Review Committee based on a determination that the risk of abuse is minimal or non-existent. 2. Notwithstanding the provisions of Section V above, no Employee, Access Person or Investment Person of Heritage shall be required to make a Quarterly Transaction Report where such report would duplicate information recorded by Heritage pursuant to Rule 204-2(a) of the Investment Advisers Act of 1940. B. DISCLAIMERS ----------- Any report of a Securities Transaction for the benefit of a person other than the individual in whose account the transaction is placed may contain a statement that the report should not be construed as an admission by the person making the report that he or she has any direct or indirect beneficial ownership in the Security to which the Report relates. C. AVAILABILITY OF REPORTS ----------------------- All information supplied pursuant to this Code may be available for inspection by the Trustees of the Heritage Funds, the President of Heritage, the Code of Ethics Review Committee, the Compliance Officer, the Pre-Clearance Officer, the Employee's department manager (or designee), any party to which any investigation is referred by any of the foregoing, the Securities and Exchange Commission, any self-regulatory organization of which Heritage is a member, and any state securities commission with appropriate jurisdiction. VII. CODE OF ETHICS REVIEW COMMITTEE ------------------------------- The Code of Ethics Review Committee shall investigate any reported or suspected violation of the Code and, as appropriate, take such actions as are authorized by Section VII. The Committee also shall review the Code at least once a year, in light of legal and business developments and experience in 10 implementing the Code, and will prepare an annual report to the President of Heritage and the Heritage Funds' Boards of Trustees that: 1. summarizes existing procedures concerning personal investing and any changes in the procedures made during the past year, 2. identifies any Material Investigations during the past year, and 3. identifies any recommended changes in existing restrictions or procedures based on the experience under the Code, evolving industry practices, or developments in applicable laws or regulations. Members of the Committee, the Compliance Officer and the Pre-Clearance officer are set forth in Appendix 4. VIII. REMEDIES -------- A. DETERMINATION: -------------- If the Code of Ethics Review Committee determines that any Employee or Access Person has violated one or more applicable provision(s) of this Code, the Committee may impose sanctions and take other actions as it deems appropriate, including a letter of censure or suspension or termination of employment. As part of any sanction, the Committee may require the Employee to reverse the trade(s) in question and forfeit any profit or absorb any loss derived there from. The Committee has sole authority to determine the remedy for any violation of the Code, including appropriate disposition of any monies forfeited pursuant to this provision. Failure to abide by a directive to reverse a trade may result in the imposition of additional sanctions. Any Employee or Access Person who either willfully or negligently violates the provisions of the Code may be subject to any or all of the following sanctions: Formal Written Warning (with copy to supervisor and personnel file), Bans on Personal Trading, Monetary Penalty, Disgorgement of Trading Profits, Suspension or Termination. B. SANCTIONS: ---------- The Code of Ethics Review Committee is charged with the responsibility of conducting informational hearings, assessing mitigating factors, and imposing sanctions consistent with the Code's Sanction Guidelines. The Committee will document instances in which variations from the Sanctions Guidelines were authorized due to mitigating factors. Below is the Code of Ethics Personal Trading Violation Matrix that outlines specific sanctions for failure to comply with the Code. 11 -------------------------------------------------------------------------------- SANCTIONS APPLICABLE TO EMPLOYEES: -------------------------------------------------------------------------------- VIOLATION SANCTION GUIDELINE+ -------------------------------------------------------------------------------- *Commission of a Prohibited 1st Offense or more: Monetary penalty, freeze Act not otherwise specifically trading accounts for 30-90 days and/or addressed in this Code section suspension or termination -------------------------------------------------------------------------------- No broker statements or 1st Offense: Written warning confirms on file or evidence 2nd Offense: (after 30 days of no action) that duplicate statements have Written reprimand and/or monetary penalty been requested 3rd Offense: (after 60 days of no action) Monetary penalty, freeze trading accounts for 30-90 days and/or suspension or termination -------------------------------------------------------------------------------- *Trading without receiving 1st Offense: Written warning appropriate pre-clearance or 2nd Offense: Written reprimand and/or trading outside the approval monetary penalty period 3rd Offense (or more): Monetary penalty, freeze trading accounts for 30-90 days and/or suspension or termination -------------------------------------------------------------------------------- *Trading after being denied 1st Offense or more: Monetary penalty, freeze approval trading accounts for 30-90 days and/or suspension or termination -------------------------------------------------------------------------------- Failure to file an Initial or 1st Offense: (not filed within 10 days) Annual Holdings Report Written warning 2nd Offense: (not filed within 10 days on more than one occasion or not filed within 30 days) Written reprimand and/or monetary -------------------------------------------------------------------------------- Failure to file an Annual Code penalty Acknowledgement and 3rd Offense: (not filed within 10 days on Certification Form more than two occasions or not filed within 60 days) Monetary penalty, freeze trading accounts for 30-90 days and/or suspension or termination -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SANCTIONS APPLICABLE TO ACCESS PERSONS (IN ADDITION TO ALL SANCTIONS APPLICABLE TO EMPLOYEES): -------------------------------------------------------------------------------- VIOLATION SANCTION GUIDELINE+ -------------------------------------------------------------------------------- *Purchasing a security within 1st offense: Written Reprimand and/or 60 days of a sale of the same Monetary Penalty security or selling a security 2nd or more offenses: Monetary Penalty, within 60 days of the purchase Freeze Trading accounts for 30-90 days and/or of the same security Suspension / Termination -------------------------------------------------------------------------------- Serving on the Board of a 1st offense: Written Reprimand and/or publicly-traded company Monetary Penalty without prior written consent 2nd or more offenses: Monetary Penalty, Freeze Trading accounts for 30-90 days and/or Suspension / Termination -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SANCTIONS APPLICABLE TO PORTFOLIO MANAGERS (IN ADDITION TO ALL SANCTIONS APPLICABLE TO EMPLOYEES AND ACCESS PERSONS): -------------------------------------------------------------------------------- VIOLATION SANCTION GUIDELINE+ -------------------------------------------------------------------------------- *Trading within the 7 day 1st offense or more offenses: Monetary blackout period Penalty, Freeze Trading accounts for 30-90 days and/or Suspension / Termination -------------------------------------------------------------------------------- * Includes Disgorgement of Trading Profits + The Code of Ethics Review Committee will take into consideration any mitigating circumstances when applying sanctions 12 The Heritage Compliance Administrator will arrange for a meeting of the Code of Ethics Review Committee in cases where a violation has occurred and the guidelines suggest monetary penalty, written reprimand or more serious action is warranted. The following schedule details the monetary penalties that may be applied for each offense. AVP and Staff- $100-$500 Vice President- $500-$1,000 Senior Vice President and above - $1,000-$5,000 Whenever the Code of Ethics Review Committee determines that an Employee or Access Person has committed a violation of this Code relating to a Heritage Fund that merits remedial action, it will report to the Board of Trustees of the appropriate Heritage Fund, at the next regularly scheduled meeting, information relating to the violation and any sanctions imposed. XIV. COMPLIANCE CERTIFICATION ------------------------ Each current Employee or Access Person and each newly-hired Employee or Access Person shall certify that he or she has received, read and understands this Code of Ethics by executing the Acknowledgment of Receipt of Code of Ethics Form set forth as Appendix 5. At least once a year, each Employee or Access Person will be required to certify on the Certification Form set forth as Appendix 6 that he or she has read and understands the Code, has complied with the requirements of the Code, and has reported all Securities Transactions required to be disclosed or reported pursuant to the Code. XV. INQUIRIES REGARDING THE CODE ---------------------------- Please call the Compliance Officer if you have any questions about this Code or any other compliance-related matters. Adopted effective as of March 1, 1995, as amended on August 7, 1995, November 18, 1996, May 12, 1998, February 14, 2000, May 22, 2000, May 30, 2003 and March 31, 2004. 13 Appendix 1 ---------- The following are Advisory Clients of Heritage: Heritage Cash Trust Money Market Fund Municipal Money Market Fund Heritage Capital Appreciation Trust Heritage Growth and Income Trust Heritage Income Trust High Yield Bond Fund Intermediate Government Bond Fund Heritage Series Trust Diversified Growth Fund Growth Equity Fund International Equity Fund Mid Cap Stock Fund Small Cap Stock Fund Value Equity Fund Raymond James Bank, FSB March 1, 1995, as amended on February 14, 2000, July 2, 2001, and March 31, 2004. 14 Appendix 2 ---------- PERSONAL SECURITIES HOLDINGS (use for Initial Holdings Report and Annual Holdings Report) In accordance with the Code of Ethics, please list all securities holdings for each of your Employee Accounts, including accounts of your Immediate Family (if required by this Code), as defined. (1) Initial or Annual Report (circle one) (2) Name of Employee: (3) If different than #1, name of the person in whose name the account is held: ----------------------------------------- (4) Relationship of (3) to (2): (5) Account Number: (6) For each account, attach your most recent account statement listing securities in that account. If you own securities that are not listed in an attached account statement, list them below: Name of Security Quantity Principal Amount Name of Broker/Dealer/Bank ---------------- -------- ---------------- -------------------------- 1. 2. 3. 4. (Attach separate sheet if necessary) I certify that this form and the attached statements (if any) constitute all of the securities in my Employee Accounts, including accounts of my Immediate Family. ----------------------------------- Employee Signature ----------------------------------- Print Name Dated: ------------------------- Appendix 3 ---------- TRADE AUTHORIZATION REQUEST FOR SECURITIES EXCLUDING MUTUAL FUNDS (1) Name of Employee requesting authorization: --------------------------------- (2) If different than #1, name of the person in whose account the trade will occur: ------------------------------------- (3) Relationship of (2) to (1): ------------------------------------------------ (4) Name of security: ---------------------------------------------------------- (5) Maximum # of shares or units to be purchased or sold or amount of bond: ----------------------------------------------- (6) Check if applicable: __ Purchase __ Sale __ Market Order __ Limit Order (7) Do you possess material nonpublic information regarding the security or the issuer of the security? __Yes __ No (8) To your knowledge, are the securities or "equivalent" securities (i.e., securities issued by the same issuer) held by any Advisory Client? __Yes __ No (9) To your knowledge, are there any outstanding purchase or sell orders for this security (or any equivalent security) by any Advisory Client? __Yes __ No (10) To your knowledge, are the securities (or equivalent securities) being considered for purchase or sale by any Advisory Client? __Yes __ No (11) If you are an Investment Person, are the securities being acquired in an Initial Public Offering? __Yes __ No (12) If you are an Investment Person, are the securities being acquired in a Private Placement? __Yes __ No (13) If you are a Portfolio Manager, has any account you managed purchased or sold these securities (or equivalent securities) within the past seven calendar days or do you expect the account to purchase or sell these securities (or equivalent securities)within seven calendar days after your purchase or sale? __Yes __ No (14) If you are an Investment Person, have you or any account covered by the Code's pre-authorization provisions purchased or sold these securities (or equivalent securities) in the prior 60 days? __Yes __ No I have read the currently effective Code of Ethics, and believe that the proposed trade complies fully with the requirements of the Code. ------------------------------------- Signature ------------------------------------- Print Name Authorized: ------------------------------ Date: ------------------------------ 2 TRADE AUTHORIZATION REQUEST FOR MUTUAL FUNDS (1) Name of Employee requesting authorization: --------------------------------- (2) If different than #1, name of the person in whose account the trade will occur: ------------------------------------- (3) Relationship of (2) to (1): ------------------------------------------------ (4) Type of Transaction: __ Purchase __ Sale __ Exchange __ Allocation Change (5) Name of mutual fund (if an exchange, list all funds involved): -------------------------------------------------------- -------------------------------------------------------- (6) Amount of transaction: $ ----------------------------- (7) Do you possess material nonpublic information regarding the mutual fund? __ Yes __ No (8) If you are an Access Person or Investment Person, have you or any account covered by the Code's pre-authorization provisions purchased or sold these securities (or equivalent securities) in the prior 60 days? __ Yes __ No I have read the currently effective Code of Ethics, and believe that the proposed trade complies fully with the requirements of the Code. ----------------------------------- Signature ----------------------------------- Print Name Authorized: ------------------------ Date: ------------------------ 3 Appendix 4 ---------- CONTACT PERSONS POSITION INDIVIDUAL DESIGNEE -------- ---------- -------- PRE-CLEARANCE OFFICER K. C. Clark x73548 COMPLIANCE OFFICER K. C. Clark x73548 CODE OF ETHICS REVIEW COMMITTEE Robert N. Brady x73560 K. C. Clark x73548 James Sutherland x73526 Adopted effective as of April 14, 2000, as amended on May 30, 2003 Appendix 5 ---------- ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS I acknowledge that I have received the Code of Ethics (as last amended on March 31, 2004), adopted by Heritage Asset Management, Inc. and represent that I have read the Code of Ethics, understand the Code of Ethics and will comply with the Code of Ethics. --------------------------------- Employee Signature --------------------------------- Print Name Dated: ------------------- Appendix 6 ---------- ANNUAL CERTIFICATION OF COMPLIANCE WITH THE CODE OF ETHICS I certify that during the past year I have complied with all applicable provisions of the Code of Ethics (as last amended on March 31, 2004) adopted by Heritage Asset Management, Inc. including all applicable, disclosure, pre-clearance and reporting requirements. --------------------------------- Employee Signature --------------------------------- Print Name Dated: ------------------- Appendix 7 ---------- REPORT OF SECURITY TRANSACTIONS FOR QUARTER ENDED ____________ ACCESS PERSONS AND INVESTMENT PERSONNEL: You do not need to report transactions in 1) direct obligations of the U.S. Government, 2) bankers' acceptances, bank CDs, commercial paper, high quality short-term debt instruments, 3) shares of an open-end investment company, and 4) transactions which you had no direct or indirect influence or control. Disclose all securities transactions for the period covered by this Report:
--------------------------------------------------------------------------------------------------------------------- Price at Name/Description of Number Date of Which Principal Bought Name of Security* Shares Transaction Effected Amount or Sold Broker/Dealer/Bank --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- * Please disclose the interest rate or maturity date, if applicable.
Did you establish any securities accounts during the period covered by this Report? __ Yes __ No If Yes, please complete the following: -------------------------------------------------------------------------------- Date of Name of Broker Account Opening Account Number -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ___ The above is a record of every transaction in a security or account opened which I had, or in which I acquired, any direct or indirect beneficial ownership during the period indicated above. ___ I certify that the Compliance Officer has received confirmations or account statements pertaining to all transactions executed and that disclose the information required above, and notice of any accounts opened, during the period covered by this Report. ___ I have nothing to report for the period covered by this Report. Date: Signature: ---------------- --------------------------------------- Appendix 8 ---------- INITIAL PUBLIC OFFERING / LIMITED OFFERING CLEARANCE FORM (for the use of the Compliance Officer only) The Code of Ethics for Heritage prohibits any acquisition of securities in an initial public offering (other than shares of open-end investment companies) and private placement by any Access Person or Investment Person. In cases of exceptional circumstances, however, investments in such securities may be permitted. In these instances, a record of the rationale supporting the approval of such transactions must be completed and retained for a period of 5 years after the end of the fiscal year in which approval is granted. This form should be used for such record keeping purposes. Name of Access/Investment Person: ----------------------------------- Date of Request: ----------------------------------- Name of IPO / Private Placement: ----------------------------------- Date of Offering: ----------------------------------- Number of Shares/Interests ----------------------------------- Price: ----------------------------------- Name of Broker/Dealer/Bank ----------------------------------- ___ I have cleared the IPO / Private Placement transaction described above. Reasons supporting the decision to approve the above transaction: ------------------------------------- Name of Compliance Officer ------------------------------------- Signature of Compliance Officer ------------------------------------- Date