THE CHARTWELL DIVIDEND AND INCOME FUND, INC.
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
The Board of Directors (the "Board") of The Chartwell Dividend and Income Fund,
Inc. (the "Fund") has adopted this Code of Ethics (the "Code") for certain
senior officers of the Fund to guide and remind such officers of their
responsibilities to the Fund and its shareholders. Such officers are expected to
act in accordance with the guidance and standards set forth in this Code.
I. COVERED OFFICERS AND PURPOSE OF THE CODE
The Code applies to the Fund's principal executive officer(s) and principal
financial officer(s), and any persons performing similar functions on behalf of
the Fund, regardless of whether such persons are employed by the Fund or a third
party (the "Covered Officers") (each of whom is listed in Exhibit A). The
purpose of the Code is to promote:
o honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional
relationships;
o full, fair, accurate, timely and understandable disclosure in reports
and documents that the Fund files with, or submits to, the Securities
and Exchange Commission ("SEC") and in other public communications
made by the Fund*;
o compliance with applicable laws and governmental rules and regulations;
o the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
o accountability for adherence to the Code.
Each Covered Officer is obligated to use his or her best efforts to promote the
factors listed above, should adhere to a high standard of business ethics and
should be sensitive to situations that may give rise to actual as well as
apparent conflicts of interest.
- -------------------------
* If a Covered Person becomes aware that information filed with the SEC or
made available to the public contains any false or misleading information
or omits to disclose necessary information, he or she shall promptly report
it to the Audit Committee.
1
II. ETHICAL HANDLING OF ACTUAL AND APPARENT CONFLICTS OF INTEREST
A. CONFLICTS OF INTEREST - GENERAL
1. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his or
her service to, the Fund and its shareholders, including if a
Covered Officer, or a member of his or her family, receives
improper personal benefits as a result of his or her position
with the Fund.
2. A conflict of interest generally arises if a Covered Officer,
or a member of his or her family, directly or indirectly
participates in any investment, interest, association,
activity or relationship that may impair or appear to impair
the Covered Officer's objectivity.
B. SCOPE
This Code does not, and is not intended to, repeat or replace the
following programs and procedures, and such conflicts that fall
outside of the parameters of this Code:
1. Certain conflicts of interest already are subject to conflicts
of interest provisions in the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Investment Advisers Act
of 1940 (the "Advisers Act").
2. The Fund's and the investment adviser's compliance programs
and procedures that are designed to prevent, or identify and
correct, violations of these provisions.
C. TYPES OF CONFLICTS
1. CONTRACTUAL RELATIONSHIPS
Although typically not presenting an opportunity for improper
personal benefit, conflicts arise from, or as a result of, the
contractual relationship between the Fund, investment adviser,
or service providers of which the Covered Officers may also be
officers or employees. As a result, this Code recognizes that
the Covered Officers may, in the normal course of their duties
(whether formally for the Fund, for the investment adviser or
for the service providers), be involved in establishing
policies and implementing decisions that will have different
effects on the Fund, the adviser or other service providers.
The participation of the Covered Officers in such activities
is inherent in the contractual relationship between the Fund
and the investment adviser or other service provider and is
consistent with the performance by the Covered Officers of
their duties as officers of the Fund. Thus, if performed in
conformity with the provisions of the 1940 Act and the
Advisers Act, such activities will be deemed to have been
handled ethically.
2
2. OTHER INVESTMENT COMPANIES
In addition, it is recognized by the Fund's Board that the
Covered Officers may also be officers or employees of one or
more other investment companies covered by this or other
codes.
3. ADDITIONAL CONFLICTS
Other conflicts of interest may be covered by the Code, even
if such conflicts of interest are not subject to provisions in
the 1940 Act and the Advisers Act.
D. PERSONAL INTERESTS
The major principle of this Code is that the personal interest of a
Covered Officer should not be placed improperly before the interest
of the Fund. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should keep in mind
that this list is not exhaustive.
Each Covered Officer must:
o not use his or her personal influence or personal relationships
improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally to
the detriment of the Fund;
o not cause the Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit the Fund;
o not use material non-public knowledge of portfolio transactions made
or contemplated for the Fund to trade personally or cause others to
trade personally in contemplation of the market effect of such
transactions; and
o report at least annually affiliations or other relationships with
the Fund or the investment adviser, including any related conflict
of interest.
E. REPORTING OF CONFLICTS
There are some actual or potential conflicts of interest situations
that should always be approved by the Audit Committee if material.
Covered Officers are encouraged to discuss with the Audit Committee any
potential conflict the materiality of which is uncertain. Examples of
reportable conflicts include:
o service as a director on the board of any public or private company;
o the receipt of any non-nominal gifts, i.e., those in excess of
$250.00, in connection with the management, operations, sale or
distribution of the Fund;
3
o the receipt of any entertainment from any company with which the
Fund has current or prospective business dealings unless such
entertainment is business-related, reasonable in cost, appropriate
as to time and place, and not so frequent as to raise any question
of impropriety;
o any ownership interest in, or any consulting or employment
relationship with, any of the Fund's service providers, other than
its investment adviser, principal underwriter, administrator or any
affiliated person thereof;
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Fund for effecting portfolio
transactions or for selling or redeeming shares other than an
interest arising from the Covered Officer's employment, such as
compensation or equity ownership; and
o any other interest, relationship or matter that a Covered Person or
the Board determines, in his or her reasonable judgement, warrants
disclosure.
There are potential conflict of interest situations, which may be
engaged in by Covered Officers or by members of their family, that
should be discussed with the Audit Committee. A Covered Person should
use reasonable judgement to determine if a conflict, other than
conflicts listed above, is material and warrants disclosure to the
Audit Committee.
III. COMPLIANCE AND DISCLOSURE
A. COMPLIANCE
Each Covered Officer should:
1. familiarize himself or herself with the disclosure requirements
generally applicable to the Fund;
2. not knowingly misrepresent, or cause others to misrepresent, facts
about the Fund to others, whether within or outside the Fund,
including to the Fund's directors and auditors, governmental
regulators and self-regulatory organizations and any other
organization;
3. to the extent appropriate within his or her area of responsibility,
consult with other officers and employees of the Fund, investment
adviser and other service providers with the goal of promoting full,
fair, accurate, timely and understandable disclosure in the reports
and documents the Fund files with, or submits to, the SEC and in
other public communications made by the Fund; and
4. promote compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
4
B. DISCLOSURE
Unless otherwise required by law, this Code shall be disclosed as
required by the SEC.
IV. ACCOUNTABILITY
Each Covered Officer must:
o upon adoption of the Code (or thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Board that he
or she has received, read, and understands the Code;
o annually thereafter affirm to the Board that he or she has complied
with the requirements of the Code and reported any violations of the
Code;
o not retaliate against any other Covered Officer or any employee of
the Fund, affiliated persons of the Fund or the Fund's service
providers for reports of potential violations that are made in good
faith; and
o notify the Chairman of the Audit Committee promptly if he or she
knows of any violation of this Code. Failure to do so is itself a
violation of this Code.
V. REPORTING PROCEDURES
1. RESPONSIBILITY**
o The Fund's Audit Committee is responsible for applying this
Code to specific situations in which questions are presented
under it and has the authority to interpret this Code in any
particular situation.
o The Fund's Audit Committee may consult Fund counsel in order
to effectively discharge its responsibilities.
o Records shall be maintained of all activities related to this
Code.
2. INVESTIGATION PROCEDURES**
The Fund will follow these procedures in investigating and enforcing
the Code:
- -------------------------
** The Audit Committee may delegate its reporting procedures, responsibilities
and investigation procedures to the Chairman of the Audit Committee.
5
o The Audit Committee will take all appropriate action to
investigate any potential violations of the Code;
o If, after such investigation, the Audit Committee believes
that no violation has occurred, the Audit Committee is not
required to take any further action;
o Any matter that the Audit Committee believes is a violation of
this Code will be reported to the Board; and
o If the Board concurs that a violation has occurred, it will
take action which it considers appropriate. Such action may
include a review of, and appropriate modifications to,
applicable policies and procedures; notification to
appropriate personnel of each service provider or its
governing body; or a recommendation to dismiss the Covered
Officer.
3. WAIVERS
Any approvals or waivers, implicit or otherwise, sought by a Covered
Person will be considered by the Audit Committee. Such Committee
will be responsible for granting waivers, as appropriate; and any
changes to or waivers of this Code will, to the extent required, be
disclosed as provided by SEC rules.
A waiver is the approval of a material departure from a provision of
this Code. An implicit waiver is the Fund's failure to take action
within a reasonable period of time regarding a material departure
from a provision of this Code that has been made known to an
executive officer of the Fund.
VI. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Fund for purposes of
Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to
registered investment companies thereunder. Insofar as other policies or
procedures of the Fund, the investment adviser or other service providers govern
or purport to govern the behavior or activities of the Covered Officers who are
subject to this Code, they are superseded by this Code to the extent that they
overlap or conflict with the provisions of this Code. The Fund's and its
investment adviser's codes of ethics under Rule 17j-1 under the 1940 Act are
separate requirements applying to the Covered Officers and others, and are not
part of this Code.
VII. AMENDMENTS
Any amendments to this Code must be approved or ratified by a majority vote of
the Board, including a majority of disinterested directors, as that term is
defined by the 1940 Act.
6
VIII. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code will be
considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the Audit Committee.
IX. INTERNAL USE
The Code is intended solely for the internal use by the Fund and does not
constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion.
Adopted: October 15, 2003
7
EXHIBIT A
- ---------
Persons Covered by this Code of Ethics:
Winthrop S. Jessup, President and Principal Executive Officer
G. Gregory Hagar, Vice President and Principal Financial Officer
8