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EXHIBIT h(3)
SAMCO FUNDS, INC. &
SEIX INVESTMENT ADVISORS, INC.
CODE OF ETHICS
(Rule 17j-l Policy)
Governing Purchase and Sale of Securities by Each
Officer, Director, and Employee
Amended and Restated June 7, 2000
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I. Legal Requirement
Rule 17j-l under the Investment Company Act of 1940 ("Rule 17j-1") makes
it unlawful for any director, officer or employee of SAMCO Funds, Inc. (the
"Fund") or of its investment adviser or principal underwriter (as well as other
persons), in connection with the purchase and sale by such person of a security
"held or to be acquired" by the Fund:
1. To employ any device, scheme or artifice to defraud the Fund;
2. To make to the Fund any untrue statement of a material fact or
omit to state to the Fund a material fact necessary in order to
make the statements made, in light of the circumstances under
which they are made, not misleading;
3. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Fund; or
4. To engage in any manipulative practice with respect to the Fund.
A security is "held or to be acquired" if within the most recent 15 days
it (i) is or has been held by the Fund, or (ii) is being considered by the Fund
or Seix Investment Advisors Inc. (the "Adviser") for purchase by the Fund.
To assure compliance with these restrictions, the Fund and the Adviser
adopt and agree to be governed by the provisions contained in this Code of
Ethics, PROVIDED THAT the Adviser and each person affiliated with the Adviser,
as applicable, who would otherwise be subject to the provisions of this Code
will instead be governed by the provisions of the Code of Ethics of the Adviser
as long as such Code of Ethics and any changes thereto have been approved in
accordance with the requirements of Rule 17j-1, if applicable, PROVIDED FURTHER
THAT the Adviser shall provide to the Compliance Officer, in advance of each
meeting of the Board of Directors, information regarding any violations of the
Code of Ethics of the Adviser, as applicable, involving persons who would
otherwise be Access Persons hereunder whose violations were relevant to the
Fund.
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II. General Principles
The Fund shall be governed by the following principles and shall apply
them to their directors, officers, employees and "Access Persons," as
applicable.(1)
A. No Access Person shall engage in any act, practice or course of conduct
that would violate the provisions of Rule 17j-l set forth above.
B. The interests of the Fund and its shareholders are paramount and come
before the interests of any Access Person or employee.
C. Personal investing activities of all Access Persons and employees shall
be conducted in a manner that shall avoid actual or potential conflicts
of interest with the Fund and its shareholders.
D. Access Persons shall not use such positions, or any investment
opportunities presented by virtue of such positions, to the detriment of
the Fund and its shareholders.
III. Substantive Restrictions
A. The price paid or received by the Fund for any security should not be
affected by a buying or selling interest on the part of an Access Person,
or otherwise result in an inappropriate advantage to the Access Person.
To that end:
(a) no Access Person shall enter an order for the purchase or sale of
a security which the Fund is, or is considering, purchasing or
selling until the day after the Fund's transactions in that
security have been completed unless the Compliance Officer
determines that it is clear that, in view of the nature of the
security and the market for such security, the order of the Access
Person will not affect the price paid or received by the Fund,
PROVIDED THAT the provisions of this paragraph III. A shall not
apply to any director of the Fund who is not an "interested
person" of the Fund (as defined in Section 2(a)(19) of the
Investment Company Act of 1940) except with respect to securities
transactions where such director knew or, in the ordinary course
of fulfilling his or her official duties as a director of the
Fund, should have known that such security was being purchased or
sold by the Fund or a purchase or sale of such security was being
considered by or with respect to the Fund; and
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(1) An "Access Person" is (1) each director, or officer of the Fund, or the
Adviser; (2) any natural person in a control relationship (25% ownership)
to the Fund and the Adviser; (3) each of those employees of the Fund and
the Adviser who in connection with his or her regular duties obtains
information about the purchase or sale of a security by the Fund or whose
functions relate to the making of such recommendations, PROVIDED THAT,
each Access Person who is affiliated with the Adviser will be governed by
the provisions of the Code of Ethics of the Adviser and will not be
subject to the provisions of this Code.
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(b) a Portfolio Manager of the Fund may not buy or sell a security
within seven days before or after the Fund trades in the
security.(2)
B. No "Investment Person" may acquire any securities issued as part of an
initial public offering of the issuer.(3)
C. Each Investment Person must seek prior approval from the Compliance
Officer for private placement transactions. Such approval shall take into
account, among other factors, whether the investment opportunity should
be reserved for the Fund and whether the opportunity is being offered to
such person because of his or her position with the Fund. Any such
Investment Person who has been authorized to acquire securities in a
private placement must disclose his or her interest if he or she is
involved in the Fund's consideration of an investment in such issuer. Any
decision to acquire such issuer's securities on behalf of the Fund shall
be subject to review by Investment Persons with no personal interest in
the issuer.
D. An Investment Person may not profit from the purchase and sale or sale
and purchase of the same or equivalent securities within sixty calendar
days. Nothing in this restriction shall be deemed to prohibit avoidance
of a net loss from a purchase and sale or sale and purchase of the same
or equivalent securities within a period shorter than sixty calendar
days.
E. An Investment Person must not accept gifts in excess of limits contained
in Conduct Rule 3060 of The National Association of Securities Dealers
from any entity doing business with or on behalf of the Fund or the
Adviser.
F. An Investment Person shall not serve on the boards of directors of
publicly traded companies, or in any similar capacity, absent the prior
approval of such service by the Compliance Officer following the receipt
of a written request for such approval. In the event such a request is
approved, procedures shall be developed to avoid potential conflicts of
interest.
G. Any profits derived from securities transactions in violation of
paragraphs A, B, C or D, above, shall be forfeited and paid to the Fund
for the benefit of its shareholders. Gifts accepted in violation of
paragraph E shall be forfeited, if practicable, and/or dealt with in any
manner determined appropriate and in the best interests of the Fund and
its shareholders.
H. The restrictions of this Section III shall not apply to the following
transactions unless the Compliance Officer determines that such
transactions violate the General Principles of this Code:
1. reinvestments of dividends pursuant to a plan;
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(2) "Portfolio Managers" include those employees of the Fund or the Adviser
authorized to make investment decisions on behalf of the Fund.
(3) An "Investment Person" includes any Portfolio Manager or employee of the
Fund or the Adviser such as a securities analyst and trader, who advises
Portfolio Managers or executes their decisions.
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2. transactions in: short-term securities issued or guaranteed by an
agency or instrumentality of the U.S. Government; bankers'
acceptances; U.S. bank certificates of deposit; and commercial
paper;
3. transactions in which direct or indirect beneficial ownership is
not acquired or disposed of;
4. transactions in accounts as to which an Access Person has no
investment control, subject, as applicable, to subparagraph IV.A
4;
5. transactions in accounts of an Access Person for which investment
discretion is not maintained by the Access Person but is granted
to any of the following that are unaffiliated with the Adviser or
Manager: a registered broker-dealer, registered investment adviser
or other investment manager acting in a similar fiduciary
capacity, PROVIDED the following conditions are satisfied:
(a) The terms of the account agreement ("Agreement") must be in
writing and filed with the Compliance Officer prior to any
transactions;
(b) Any amendment to the Agreement must be filed with the
Compliance Officer prior to its effective date;
(c) The Agreement must require the account manager to comply
with the reporting provisions of paragraph 3 of Section
IV.A;
(d) The exemptions provided by this Section shall not be
available for a transaction or class of transactions which
is suggested or directed by the Access Person or as to
which the Access Person acquires advance information; and
6. transactions in securities in connection with an employer
sponsored or other tax qualified plan, such as a 401(k) plan, an
IRA, or ESOP, in an amount not exceeding $1,000 in any calendar
month.
7. transactions in shares issued by open-end investment companies.
IV. Procedures
A. To enable the Fund to determine with reasonable assurance whether the
provisions of Rule 17j-l (b) and this Code of Ethics are being observed
by its Access Persons:
1. Upon commencement of employment by the Fund or otherwise assuming
the status of "Access Person", each Access Person shall within ten
days of attaining such status disclose in writing, in a form
acceptable to the Compliance Officer, all
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direct or indirect "Beneficial Ownership" interests of such Access
Person in "Reportable Securities." (4) Such form shall include, at
a minimum:
a. The title, number of shares and principal amount of each
security in which the Access Person had any direct or
indirect Beneficial Ownership when the person became an
Access Person;
b. The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were
held for the direct or indirect benefit of the Access
Person as of the date the person became an Access Person;
and
c. The date that the report was submitted by the Access
Person.
2. Each Access Person shall obtain the prior approval of the
Compliance Officer of all personal securities transactions in any
security in which the Fund may invest.
3. Each Access Person shall notify the Compliance Officer of all
brokerage accounts in which he or she has any beneficial interest
(a) within ten days of receipt of this Code or (b) within ten days
after the later opening of any such account. With respect to any
new account established by the Access Person in which any
securities are held for the direct or indirect benefit of the
Access Person, the following information must be reported:
a. The name of the broker, dealer or bank with whom the Access
Person established the account;
b. The date that the account was established; and,
c. The date that the report is submitted by the Access Person.
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(4) (a) "Beneficial Ownership" generally means having a direct or indirect
pecuniary interest in a security and is legally defined to be beneficial
ownership as used in Rule 16a-1(a)(2) under Section 16 of the Securities
Exchange Act of 1934. Beneficial ownership is presumed regarding
securities and accounts held in the name of a spouse or any other family
member living in the same household. Beneficial ownership also extends to
transactions by entities over which a person has ownership, voting or
investment control, including corporations (and similar entities), trusts
and foundations.
(b) "Reportable Securities" include generally all securities, and
financial instruments related to securities, except: securities issued
by, or that are direct obligations of, the United States Government;
bankers' acceptances; bank certificates of deposit; commercial paper; and
shares of registered open-end investment companies.
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4. Each Access Person, with respect to each brokerage account in
which such Access Person has any beneficial interest shall arrange
that the broker shall mail directly to the Compliance Officer at
the same time they are mailed or furnished to such Access Person
(a) duplicate copies of brokers' advice covering each transaction
in Reportable Securities in such account, (b) copies of periodic
statements with respect to the account, and (c) copies of broker
trade confirmations.
5. Annually, each Access Person must submit a report containing the
following information (which information must be current as of a
date no more than 30 days before the report is submitted):
a. The title, number of shares and principal amount of each
security in which the Access Person had any direct or
indirect Beneficial Ownership;
b. The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities were
held for the direct or indirect benefit of the Access
Person; and
c. The date that the report is submitted.
6. The provisions of this Section IV.A shall not apply to any
director of the Fund who is not an "interested person" of the Fund
(as defined in Section 2(a)(19) of the Investment Company Act of
1940) except with respect to reporting of securities transactions
where such director knew or, in the ordinary course of fulfilling
his or her official duties as a director of the Fund, should have
known that, during the 15-day period immediately preceding or
after the date of a transaction in a security by the director,
such security was purchased or sold by the Fund or a purchase or
sale of such security was considered by the Fund or the Adviser.
7. Notwithstanding the provisions of this Section IV.A. no Access
Person shall be required to make any report with respect to
securities held in any account over which such person does not
have any direct or indirect influence or control.
B. The Compliance Officer shall notify each Access Person that he or she is
subject to this reporting requirement, and shall deliver a copy of this
policy to each Access Person. The Compliance Officer shall annually
obtain written assurances from each Access Person that he or she is aware
of his or her obligations under this Code of Ethics and has complied with
the Code and with its reporting requirements.
C. The Compliance Officer shall cause a system of monitoring personal
investment activity by Access Persons to be designed that would identify
abusive or inappropriate trading patterns or other practices of Access
Persons. The Compliance Officer shall report on such system to the Board
of Directors of the Fund at the next Board meeting following its design
and thereafter in connection with the annual review of this Code referred
to in paragraph IV.G, below.
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D. The Compliance Officer shall report to the Board of Directors of the Fund
at each meeting regarding the following matters not previously reported:
1. Any information pursuant to Sections IV.A.4 and 6 with respect to
each reported transaction in a security which was held by or
acquired by the Fund within 15 days before or after the date of
the reported transaction or at a time when, to the knowledge of
the individual responsible for monitoring compliance with the Code
of Ethics, the Fund or the investment adviser was considering the
purchase or sale of such security, unless the transaction was a
reinvestment of dividends pursuant to a plan.
2. With respect to any transaction not required to be reported to the
Board of Directors by the operation of subparagraph (1) that he
believes nonetheless may evidence violation of this policy.
3. Apparent violations of the reporting requirement.
4. Other material violations of this Code of Ethics of which the
Compliance Officer has become aware since the previous report
pursuant to this Section IV.D.
5. Any violations of the Code of Ethics of the Adviser reported by
the Adviser in accordance with Section I hereof.
6. The results of monitoring of personal investment activities of
Access Persons in accordance with the procedures referred to in
Section IV.C hereof.
E. The Compliance Officer shall have discretion not to make a report to the
Board of Directors under paragraph IV.D if he or she finds that by reason
of the size of the transaction, the circumstances or otherwise, no fraud
or deceit or manipulative practice could reasonably be found to have been
practiced on the Fund in connection with its holding or acquisition of
the security or that no other material violation of this Code has
occurred. A written memorandum of any such finding shall be filed with
reports made pursuant to this Code.
F. The Board of Directors shall consider reports made to it hereunder and
upon discovering that a violation of this Code has occurred, the Board of
Directors may impose such sanctions, in addition to any forfeitures
imposed pursuant to Section III.G. hereof, as it deems appropriate,
including, among other things, a letter of sanction or suspension or
termination of the employment of the violator.
G. The Compliance Officer shall report to the Board of Directors on an
annual basis concerning existing personal investing procedures,
violations during the prior year, sanctions imposed and any recommended
changes in existing restrictions or procedures. The Compliance Officer
shall also certify on an annual basis that the Fund, the investment
adviser, and the principal underwriter, as applicable, has adopted
procedures necessary to prevent Access Persons from violating the Code.
H. The Board of Directors shall review the Code and its operation at least
once a year.
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I. This Code and any related procedures, a copy of each report by (or
duplicate brokers' advice for the account of) an Access Person, any
written report or memorandum hereunder by the Compliance Officer, and
lists of all persons required to make reports shall be preserved with the
Fund's records for the period required by Rule 17j-l.
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