Lindbergh Capital Management, Inc.
CODE OF ETHICS
Dated: September 22, 1999
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Code of Ethics
Table of Contents
Summary........................................................................3
Policy on Personal Securities Transactions.....................................3
Definition of "Personal Transactions"..........................................4
Pre-Clearance Required.........................................................5
Exceptions.....................................................................5
Effective Time of Clearance Authority..........................................6
How to Obtain Clearance........................................................6
Filing of Reports..............................................................6
Duplicate Brokerage Confirmations..............................................6
Filing of Quarterly Report of All Personal Securities Transactions.............7
Filing of Annual Personal Holding Report.......................................7
Confidential Nature of Documents...............................................7
Restrictions on "Personal Securities Transactions".............................8
Gifts and Other Sensitive Payments.............................................9
Other Conflicts of Interest....................................................9
Inside Information............................................................10
Use of Information............................................................10
Disclosure of Information.....................................................10
Outside Activities............................................................10
Exemption Procedure...........................................................10
Compliance with the Code of Ethics............................................11
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Summary
Lindbergh Capital Management, Inc. ("Adviser") and its affiliates (collectively
referred to as the "firm") have a fiduciary duty to investment adviser clients
-- including investment company clients such as Lindbergh Funds ("Funds"), which
duty requires each employee to act solely for the benefit of clients. Each
employee also has a duty to act in the best interest of the firm. In addition to
the various laws and regulations covering the firm's activities, it is clearly
in the firm's best interest as a professional investment advisory organization
to avoid potential conflicts of interest or even the appearance of such
conflicts with respect to the conduct of the firm's employees. The personal
trading and conduct of the firm and its employees must recognize that the firm's
clients always come first, that the firm must avoid any actual or potential
abuse of our positions of trust and responsibility, and that the firm must never
take inappropriate advantage of its positions. While it is not possible to
anticipate all instances of potential conflict, the standard is clear.
In light of the firm's professional and legal responsibilities, we believe it is
appropriate to restate and periodically distribute the firm's Code of Ethics to
all employees. The aim is to be as flexible as possible in the firm's internal
procedures, while simultaneously protecting the organization and its clients
from the damage that could arise from a situation involving a real or apparent
conflict of interest. While it is not possible to specifically define and
prescribe rules regarding all possible cases in which conflicts might arise,
this Code of Ethics is designed to set forth the policy regarding employee
conduct in those situations in which conflicts are most likely to develop. If an
employee has any doubt as to the propriety of any activity, he or she should
consult the firm's President.
Policy on Personal Securities Transactions
The Lindbergh Capital Management, Inc. (also "LCM") Schedule F continuation
sheet for Form ADV Part II, response for Page 5, Item 9-E, states:
Trading in securities by or on behalf of related persons, LCM will
generally invest in the same securities for its officers and managers
(known as related persons) who also happen to be clients of the firm
that it is purchasing for its other clients. Such investments, however,
are generally confined to securities that are actively traded and thus
highly liquid or in mutual funds. That is, the size of purchases by
related persons or those made on their behalf by LCM shall constitute
only a small amount of the total daily trading volume in any particular
security. As such, we foresee no potential for any market impact from
this type of investment activity made by or on the behalf of related
persons at this time. If the characteristics of investments by related
persons and/or LCM changed in some way that this could be a problem,
then steps would be taken such as delaying trades by related persons or
on behalf of related persons until after executing all other client
trades.
To help achieve best execution and price as well as for operational
efficiency, LCM aggregates trades (the combining of all client trades
into one large order). Whenever possible, trades made on the behalf of
related persons are aggregated with all other client orders. With
aggregated trades, clients who are also related persons receive the
same price as other clients. Also, orders aggregated for trading
purpose are pre-allocated among all clients, including those clients
that are related persons, before placing the trade. In the event the
trade is only partially filled, securities purchased will be allocated
among clients, including related persons, in a way to assure that there
is no deliberate systematic bias in favor of any one account.
To the extent not covered by the Form ADV, all personal securities transactions
(including acquisitions or dispositions other than through a purchase or sale)
by each employee actively engaged in the day-to-day affairs of the firm or with
knowledge of transactions for client accounts, must be cleared prior to
execution. The only exceptions to this policy of prior clearance are noted
below.
Definition of "Personal Transactions"
The following transactions by employees are considered "personal" and,
therefore, subject to this statement of policy:
_ transactions for an employee's own account, including self directed
retirement accounts
_ transactions for an account in which an employee has indirect beneficial
ownership, unless the employee has no direct or indirect influence or
control over the account
_ accounts involving family (including husband, wife, minor children or other
dependent relatives), or accounts in which an employee has a beneficial
interest (such as a trust of which the employee is a beneficiary) are
included within the meaning of "indirect beneficial interest"
If an employee has a substantial measure of influence or control over an account
but neither the employee nor the employee's family has any direct or indirect
beneficial interest (e.g. a trust for which the employee is a trustee but not a
direct or indirect beneficiary), the rules relating to personal securities
transactions are not considered to be directly applicable. Therefore, prior
clearance and subsequent reporting of such transactions are not required. In all
transactions involving such an account an employee should, however, conform to
the spirit of these rules and avoid any activity which might appear to conflict
with the investment company or counseling clients or with respect to the
employee's position within the firm. In this regard, please note "Other
Conflicts of Interest", found later in this Code of Ethics, which does apply to
such situations.
Pre-Clearance Required
Except as specifically exempted in this section, all employees must clear
personal securities transactions prior to execution. This includes:
_ stocks
_ bonds
_ closed-end mutual funds
_ convertibles
_ preferreds
_ options on securities
_ warrants
_ rights
All of the above are publicly traded and privately placed securities.
All initial public offering or private placement purchases by related persons,
whether or not actively involved in the firm's day-to-day affairs, require
pre-clearance. This approval will be based upon a determination that the
employee is not being offered the investment opportunity due to his or her
employment with the firm and other relevant factors on a case-by-case basis.
Exceptions
The only exceptions to this requirement are:
_ transactions in open-end mutual funds
_ trades $5,000 or less within a 24-hour period
_ trades of 500 shares of an exchanged listed or National Market System
listed securities of a company with assets in excess of $1 billion
_ automatic dividend reinvestment plan acquisitions
_ U.S. Government securities
_ automatic employee stock purchase plan acquisitions
_ commercial paper
_ non-volitional transactions
_ discretionary managed accounts
Non-volitional transactions include transactions which result from corporate
action applicable to all similar security holders (such as splits, tender
offers, mergers, stock dividends, etc.).
Please note that most of the excepted transactions must be reported even though
they do not have to be pre-cleared. See the following section on reporting
obligations.
Effective Time of Clearance Authority
Once a transaction is pre-cleared, the clearance for the personal securities
transaction for publicly traded companies will be in effect for seven trading
days only. Private placement (including both securities and partnership
interests) clearances will remain in effect for a reasonable period, not to
exceed 90-days.
How to Obtain Clearance
Clearance for personal securities transactions may be obtained by discussing the
proposed transactions with Adviser's President or by submitting a copy of the
pre-clearance form (which is attached to this Code of Ethics as Exhibit A) and
submitting it to the President.
Filing of Reports
The Code of Ethics requires a comprehensive "real time" system of maintaining
records of personal securities transaction by employees. As separately discussed
below, under this system, the following reporting requirements must be complied
with:
_ duplicate brokerage confirmations (see Exhibit B)
_ quarterly reporting of all securities transactions (see Exhibit C)
_ filing of annual personal holding report or initial report of personal
holding's (see Exhibit D)
Duplicate Brokerage Confirmations
All employees must require their securities brokers to send duplicate
confirmations of securities transactions, excluding transactions in mutual fund
shares, to the President. Brokerage firms are accustomed to providing this
service; a sample form is attached as Exhibit B. The form must be completed and
returned to the President. Each employee must return to the President a
completed form for each brokerage account that is used for personal securities
transactions of the employee. Employees should not send the completed forms to
their brokers directly.
Filing of Quarterly Report of All Personal Securities Transactions
The rules of the Securities and Exchange Commission (the "SEC") require that a
quarterly record of all personal securities transactions be available for SEC
inspection. All transactions, whether required to be pre-cleared or not, must be
reported. To comply with these rules, every employee must file a quarterly
report (on the form attached as Exhibit C) within 10-calendar days after the end
of each calendar quarter. Employees may direct the brokerage firms or mutual
funds where they maintain their accounts to send statements to the President in
lieu of filling out a handwritten quarterly report. However, employee's are
still required to sign the form even if the brokerage firms or mutual funds
provide statements and even if there were no reportable transactions during the
quarter, acknowledging that all accounts and transactions have been disclosed.
(Write "see brokerage firm statements" covering all transactions or "none", as
applicable, on the form, sign the form, and return it to the President.)
Important Notice: The quarterly report must include the required information for
all "personal securities transactions" as defined above. Non-volitional
transactions and those resulting from corporate actions must also be reported
even though pre-clearance is not required and the nature of the transaction must
be clearly specified in the report.
Filing of Annual Personal Holding Report
All employees must also file a schedule on the form attached as Exhibit D
indicating their personal securities holdings as of December 31st of each year
by the following February 15th. Newly hired employees are required to file an
initial holding report upon beginning employment on the form attached as Exhibit
D, marked to indicate that it is an initial report. Again, employees may
indicate securities held in a brokerage or mutual fund account by attaching an
account statement, but are not required to do so.
Confidential Nature of Documents
The firm recognizes and understands the confidential nature of the documents and
information employees are required to provide under this Code of Ethics.
Procedures have been established to ensure confidentiality of this information.
First, only the President is authorized to open mail containing copies of the
documents provided by brokerage firms. All such documents (such as confirms and
statements) should be directed to:
Attention: President
Lindbergh Capital Management, Inc.
5520 Telegraph Road, Suite 204
Saint Louis, Missouri 63129
Further, only the President will review this information (unless there is a
potential or real violation of the Code of Ethics) and keeps the required
documents in a secure place. Any unauthorized disclosure of this confidential
information will result in severe sanctions, including suspension or
termination.
Restrictions on "Personal Securities Transactions"
While personal securities transactions must be cleared prior to execution, the
following guidelines indicate which transactions will be prohibited,
discouraged, or subject to nearly automatic clearance. The clearance of personal
securities transactions also depends upon other circumstances, including the
timing of the proposed transaction relative to transactions for client accounts,
the nature of the securities and the parties involved in the transaction, and
the percentage of securities involved in the transaction relative to ownership
by clients. The word "clients" refers collectively to investment company clients
and advisory clients. Employees are expected to be particularly sensitive to
meeting the spirit as well as the letter of these restrictions.
Please note that the restrictions apply in the case of common stock, not only to
the common stock, but to any equity related security of the same issuer
including preferred stock, options, warrants and convertible bonds.
No employee may engage in any personal transactions (subject to this policy)
involving any securities which are:
_ Being bought or sold on behalf of clients until one trading day after
such buying or selling is completed or canceled. In addition, the
portfolio manger of a client account may not engage in a personal
transaction involving any security for seven days before and seven days
following, a transaction in the same security for a client account
without a special exemption. See "Exemption Procedures" below.
_ Actively contemplated for transactions on behalf of clients, even
though no buy or sell order has been placed. This restriction applies
from the moment an employee has knowledge that the firm is considering
purchasing or selling a specific security for any client account. This
is a particularly sensitive area in which employees must exercise
caution to avoid actions which, to his or her knowledge, are in
conflict or in competition with the interest of clients.
These provisions do not include transactions that involve routine maintenance of
a client account, such as honoring redemption requests, or to any model
reallocations.
No employee may enter into any personal securities transaction in which a client
is the counter party to the trade. Subject to pre-clearance, employees may
engage in short sales, options and margin transactions, but such transactions
are discouraged. Any employee engaging in such transactions should also
recognize the danger of being "frozen" or subject to a forced close out because
of the general restrictions which apply to personal transactions noted above. In
specific cases of hardship, an exception may be granted by upon approval by the
President, and for the President, the Board of Directors, with respect to an
otherwise "frozen" transaction.
Employees may not purchase securities in initial public offerings or private
placements offered by any firm or entity that the firm executes trades through.
Gifts and Other Sensitive Payments
Employees should not seek, accept or offer gifts or favors of more than minimal
value or any preferential treatments in dealing with any client, broker/dealer,
portfolio company, financial institution or any other organization with whom the
firm transacts business. Occasional participation in lunches, dinners, cocktail
parties, sporting activities or similar gatherings conducted for business
purposes are not prohibited. However, for both the employee's protection and
that of the firm, it is extremely important that even the appearance of a
possible conflict of interest be avoided. Extreme caution is to be exercised in
any instance in which business related travel and lodgings are paid for other
than by the firm.
Employees must not participate individually or on behalf of the firm, a
subsidiary, or any client, directly or indirectly, in any of the following
transactions:
_ use of the firm's funds for political purposes
_ payment or receipt of bribes, kickbacks, or payment or receipt of any other
amount, including any understanding that part or all of such amount will be
refunded or delivered to a third party in violation of any law applicable
to the transaction
_ payment to government officials or employees (other than disbursements in
the ordinary course of business for such legal purposes as payment of
taxes)
_ payment of compensation or fees in a manner the purpose of which is to
assist the recipient to evade taxes, or federal or state law
_ use of funds or assets of the firm or any subsidiary for any other unlawful
or improper purpose
Other Conflicts of Interest
Employees should also be aware that areas other than personal securities
transactions or gifts and sensitive payments may involve conflicts of interest.
The following should be regarded as examples of situations involving real or
potential conflicts, rather than a complete list of situations to avoid.
Inside Information. Specific reference is made to the firm's Insider Trading
Policy on the use of inside information, which applies to personal securities
transactions as well as to client transactions.
Use of Information. Information acquired in connection with employment by the
firm may not be used in any way which might be contrary to or in competition
with the interests of the clients. Employees are reminded that client
relationships with the firm are to be treated confidentially.
Disclosure of Information. Information regarding actual or contemplated
investment decisions, research priorities or client interests should not be
disclosed to persons outside the firm and in no way can be used for personal
gain.
Outside Activities. All outside relationships such as directorships or
trusteeships of any kind, or membership in investment organizations (e.g. an
investment club) must be cleared by the President prior to the acceptance of
such a position. As a general matter, directorships in unaffiliated public
companies or companies which may reasonably be expected to become public
companies will not be authorized because of the potential for conflicts which
may impede our freedom to act in the best interest of clients. Service with
charitable organizations generally will be authorized, subject to considerations
related to time required during working hours and use of proprietary
information.
Exemption Procedure
The President, and for the President, the Board of Directors, can grant
exemptions from the personal trading restrictions in this Code of Ethics upon
determining that the transaction for which an exemption is requested would not
result in a conflict of interest or violate any other policy embodied in this
Code of Ethics. Factors to be considered include:
_ the size and holding period of the employee's position in the security
_ the market capitalization of the issuer
_ the liquidity of the security
_ the reason for the employee's requested transaction
_ the amount and timing of client trading in the same or a related security
_ any other relevant factors
Any employee wishing an exemption should submit a written request to the
President setting forth the pertinent facts and reasons why the employee
believes that the exemption should be granted. Employees are cautioned that
exemptions are intended to be exceptions, and repetitive exemption applications
by an employee will not be well received.
Compliance with the Code of Ethics
Adherence to the Code of Ethics is considered a basic condition of employment
with the firm. The Board of Directors monitors compliance with the Code of
Ethics and reviews violations of the Code of Ethics to determine what action or
sanctions are appropriate.
If an employee fails to abide by the reporting provisions of this Code of
Ethics, paychecks will be withheld until the employee is in compliance.
Violations of the provisions regarding personal trading will presumptively be
subject to being reversed in the case of a violation purchase, and to
disgorgement of any profit realized from the position (net of transaction costs
and capital gains taxes payable with respect to the transaction) by payment of
the profit to any client disadvantaged by the transaction, or to a charitable
organization, as determined by the President, unless the employee establishes to
the satisfaction of the President that under the particular circumstances,
disgorgement would be an unreasonable remedy for the violation.
Violation of the Code of Ethics may also adversely affect an employee's career
with the firm with respect to such matters as compensation and advancement.
Employees must recognize that a serious violation of the Code of Ethics or
related polices may result, at a minimum, in an immediate dismissal. Since many
provisions of the Code of Ethics also reflect provisions of the federal
securities laws, employees should be aware that violations could also lead to
regulatory enforcement action resulting in suspension or expulsion from the
securities business, fines, penalties, and imprisonment.
Again, the firm would like to emphasize the importance of obtaining prior
clearance of all personal securities transactions subject to this Policy,
avoiding prohibited transactions, filing all required reports promptly and
avoiding other situations which might involve even an apparent conflict of
interest. Questions regarding interpretation of this policy or questions related
to specific situations should be directed to the firm's President.
