RESOLUTION OF THE PHILADELPHIA BAR ASSOCIATION SUPPORTING THE ADOPTION OF A SAFE HARBOR FOR PREARRANGED TRADING PROGRAMS UNDER THE PENNSYLVANIA SECURITIES ACT OF 1972

WHEREAS, the U.S. Securities and Exchange Commission (the "SEC") adopted Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), defining when a securities trade is made "on the basis of" material nonpublic information for purposes of determining a person's liability for "insider trading";

WHEREAS, subsection (c)(1) of Rule 10b5-1 provides an affirmative defense to individuals and entities that trade securities pursuant to a prior contract, instruction or plan that meets the criteria set forth in the rule ("prearranged trading plans");

WHEREAS, in providing that affirmative defense, the SEC sought to "provide appropriate flexibility to those who would like to plan securities transactions in advance at a time when they are not aware of material nonpublic information, and then carry out those pre-planned transactions at a later time, even if they later become aware of material nonpublic information";

WHEREAS, the only two states in the union whose state securities or "Blue Sky" laws contained statutory provisions defining "insider trading" in terms similar to Rule 10b5-1 are California and Pennsylvania;

WHEREAS, effective July 30, 2001, California adopted a regulation providing a "safe harbor" for securities trades pursuant to a prearranged trading plan conforming to the criteria of Rule 10b5-1(c);

WHEREAS, the Pennsylvania Securities Act of 1972, as amended (the "Pennsylvania Securities Act"), presently lacks a similar exclusion for trades conducted pursuant to prearranged trading plans;

WHEREAS, in release no. 01-ENF-1 dated August 21, 2001, the Pennsylvania Securities Commission announced that it will not take enforcement action with respect to security trades conducted pursuant to prearranged trading plans complying with the affirmative defenses described in Rule 10b5-1(c);

WHEREAS, because of the limitations of the action by the Pennsylvania Securities Commission, Pennsylvania-based insiders, including management of companies headquartered in Pennsylvania, remain exposed to civil liability in private actions brought by third parties under the Pennsylvania Securities Act;

WHEREAS, as result of all of the foregoing, Pennsylvania is the only state in the union that would leave company management without protection from civil liability in private actions in adopting and utilizing prearranged trading plans;

WHEREAS, it is in the public interest to eliminate anomalies in state law that create disadvantages to companies doing business and locating their headquarters in Pennsylvania,

WHEREAS, it is in the public interest to provide mechanisms which, with due regard for the protection of investors, enable the orderly diversification of concentrated security holdings in Pennsylvania based companies so as to avoid disruptions in those companies and the communities in which their employees reside;

NOW, THEREFORE, BE IT RESOLVED that the Philadelphia Bar Association supports and encourages the implementation of a "safe harbor" for prearranged trading plans meeting the criteria established in Rule 10b5-1(c) promulgated under the 1934 Act, whether through the adoption of a regulation or other administrative action by the Pennsylvania Securities Commission or by amendment of the Pennsylvania Securities Act;

AND BE IT FURTHER RESOLVED that the Philadelphia Bar Association shall take all actions in support of this resolution as is deemed appropriate, including communication of its position to the Pennsylvania Securities Commission, the Pennsylvania state legislature, the Governor of Pennsylvania, and the general public.

PHILADELPHIA BAR ASSOCIATION
BOARD OF GOVERNORS
ADOPTED: APRIL 25, 2002