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SECTION 18
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CODE OF ETHICS
While SAM is confident of its employees integrity and good faith, there are,
certain instances, where employees possess knowledge regarding present or
future transactions or have the ability to influence portfolio transactions
made by the Company for its clients in securities in which they personally
invest. In these situations personal interest may conflict with that of the
Company's clients.
In view of the above, SAM has adopted this Code of Ethics to specify or
prohibit certain types of transactions deemed to create conflicts of interest
(or the potential for or appearance of), and to establish reporting
requirements and enforcement procedures.
18.1 STATEMENT OF GENERAL PRINCIPLES
In recognition of the trust and confidence placed in SAM by its clients
and to stress SAM's belief that its operations are directed to the
benefit of its clients, the Company has developed and adopted the
following general principles to guide its employees, officers, and
directors.
1. The interests of the clients are paramount and all associated persons of
the Company must conduct themselves in such a manner that the interests of
the clients take precedence over all others.
2. All personal securities transactions by associated persons of the Company
must be accomplished in such a way as to avoid any conflict between the
interest of the Company's clients and the interest of any associated
person.
3. All associated persons of the Company must avoid actions or activities
that allow personal benefit or profit from their position with regard to
the Company's clients.
18.2 DEFINITIONS
1. "Access Person"-any director, officer, or associated person who recommends
the purchase or sale of securities for the Company on behalf of the
client.
2. "Beneficial Ownership" of a security - a person is considered to be a
beneficial owner of any securities in which he has a direct or indirect
monetary interest or is held by his spouse, his minor children, a relative
who shares his home, or other persons by reason of any contract,
arrangement, understanding or relationship that provides him with sole or
shared voting or investment power.
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3. "Control" - means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the
result of an official position with such company. Ownership of 25% or more
of a company's outstanding voting security is presumed to give the holder
control over the company.
4. "Investment Personnel" - means all Access Persons who occupy the position
of portfolio manager with respect to the clients of SAM or any
separately-managed series thereof (a "Fund"), and all Access Persons who
provide or supply information and/or advice to any portfolio manager (or
Trust Officer), or who execute or help execute any portfolio manager's
decisions.
5. "Purchase or Sale of a Security" includes, among other things, the writing
of an option to purchase or sell a security.
6. "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act, except that it shall not include securities
issued by the Government of the United States or an agency thereof,
banker's acceptances, bank certificates of deposit, commercial paper and
registered open-end mutual funds.
7. A "Security Held or to be Acquired" by the clients means any security
which, within the most recent fifteen days, (i) is or has been held by the
clients or (ii) is being or has been considered by the Company for
purchase by the clients.
8. A Security is "being purchased or sold" by the clients from the time when
a purchase or sale has been communicated to the Company until the time
when such transaction has been fully completed or terminated.
18.3 PROHIBITED PURCHASES AND SALES OF SECURITIES
1. No access person shall, in connection with the purchase or sale, directly
or indirectly:
a. employ any device, scheme or artifice to defraud;
b. make any untrue statement of a material fact or omit to state a
material fact;
c. engage in any act, practice or course of business which would
operate as a fraud or deceit; or
d. engage in any manipulative practice.
2. No access person may purchase or sell, directly or indirectly, any
security in which he had or by reason of such transaction acquires any
beneficial ownership, within 24 hours before or after the time that the
same (or a related) security is being purchased or sold by a client.
3. No investment personnel may acquire securities as part of an initial
public offering by the issuer.
4. No investment personnel shall purchase or sell, directly or indirectly,
any security in which he had or by reason of such transaction acquires any
beneficial ownership within 7 days before or after the time that the same
(or a related) security is being purchased or sold by any client for which
he acts as the portfolio manager.
18.4 PRE-CLEARANCE OF TRANSACTIONS
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1. Except as provided in Section 18.4.2, below, all investment personnel must
pre-clear each proposed transaction in securities with a designated
Supervisor prior to proceeding with the transaction. In determining
whether to grant such clearance, the designated Supervisor shall refer to
the Section 18.4.3, below.
2. The requirements of Section 18.4.1 shall not apply to the following
transactions:
a. Purchases or sales over which the Investment Personnel has no
direct or indirect influence or control.
b. Purchases or sales which are non-volitional on the part of either
the Investment Personnel or any Fund, including purchases or sales
upon exercise of puts or calls written by the Investment Personnel
and sales from a margin account pursuant to a BONA FIDE margin
call.
c. Purchases which are part of an automatic dividend reinvestment
plan.
d. Purchases effected upon the exercise of rights issued by an issuer
PRO RATA to all
e. holders of a class of its securities, to the extent such rights
were acquired from such issuer.
3. The following transactions must be approved by the designated Supervisor.
a. Transactions which appear upon reasonable inquiry and investigation
to present no reasonable likelihood of harm to the clients and which
are otherwise in accordance with Rule 17j-1.
b. Purchases or sales of securities which are not eligible for purchase
or sale by any client, as determined by reference to the Act and
blue sky laws and regulations hereunder, the investment objectives
and policies and investment restrictions of the clients and their
series, and undertakings made to regulatory authorities.
c. Transactions which the designated Supervisor after consideration of
all the facts and circumstances, determines to be in accordance with
Section 18.3 and to present no reasonable likelihood of harm to the
clients.
18.5 ADDITIONAL RESTRICTIONS AND REQUIREMENTS
1. No Access Person shall accept or receive any gift in excess of $100 value
from any person or entity that does business with or on behalf of SAM.
2. EACH ACCESS PERSON MUST HAVE DUPLICATE STATEMENTS FOR ALL PERSONAL
BROKERAGE ACCOUNTS SENT TO THE DESIGNATED SUPERVISOR DIRECTLY FROM HIS/HER
BROKER/DEALER. Compliance with this provision can be effected by the
Access Person providing duplicate copies of all such statements directly
to the designated Supervisor within two business days of receipt by the
Access Person.
3. No Investment Personnel may accept a position as a director, trustee or
general partner of a publicly-traded company unless such position has been
presented to and approved by the Company and by Trusts' Board of Trustees
as consistent with the interests of the Trusts and their shareholders.
4. All Investment Personnel must provide to the designated Supervisor a
complete listing of all securities owned by such person as of the
effective date of employment, and thereafter must submit a revised list of
such holdings to the designated Supervisor as of January 1 of each
subsequent year. The initial listing must be submitted within 10 days of
the date upon which such person first became an Access Person of the
Trusts, a
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and each update thereafter must be provided no later than 10 days after
the start of the subsequent year. A report form and reminder will be sent
to all Investment Personnel prior to year-end. (see Exhibit 10).
5. INVESTMENT PERSONNEL MAY NOT PROFIT FROM THE PURCHASE AND SALE OR SALE AND
PURCHASE OF A SECURITY WITHIN 60 DAYS OF ACQUIRING OR DISPOSING OF
BENEFICIAL OWNERSHIP OF THAT SECURITY. THIS PROHIBITION DOES NOT APPLY TO
TRANSACTIONS RESULTING IN A LOSS, OR TO FUTURES OR OPTIONS ON FUTURES ON
BROAD-BASED SECURITIES INDEXES OR U.S. GOVERNMENT SECURITIES.
18.6 REPORTING OBLIGATION
1. The Advisor shall create and maintain a listing of all Access Persons,
Investment Personnel, and designated Supervisors.
2. Each Access Person shall report all transactions in securities in which
the person has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership. (see Exhibit 5).
3. Each Access Person shall sign an acknowledgment at the time this Code is
adopted or at the time such person becomes an Access Person and on an
annual basis thereafter that he has read, understands, and agrees to abide
by this Code.
18.7 REPORTS
1. Each Access Person shall submit quarterly reports of personal securities
transactions to the designated Supervisor. The designated Supervisor shall
submit confidential quarterly reports with respect to his or her own
personal securities transactions to an officer designated to receive his
or her reports ("Alternate designated Supervisor"), who shall act in all
respects in the manner prescribed herein for the designated Supervisor.
2. Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he has any
direct or indirect beneficial ownership in the security to which the
report relates.
3. Every Access Person shall report the name of any publicly-owned company
(or any company anticipating a public offering of its equity securities)
and the total number of its shares beneficially owned by him if such total
ownership is more than 1/2 of 1% of the company's outstanding shares.
4. Every report shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report relates was
effected, and shall contain the following information:
a. The date of the transaction, the title and the number of shares or
the principal amount of each security involved;
b. The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
c. The price at which the transaction was effected;
d. The name of the broker/dealer or bank with or through whom the
transaction was effected; and
e. The date the report was signed.
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5. In the event no reportable transactions occurred during the quarter, the
report should be so noted and returned, signed and dated.
6. Report forms will be sent to all Access Persons by the designated
Supervisor prior to the end of each quarter.
18.8 REVIEW AND ENFORCEMENT
The designated Supervisor shall review reported personal securities
transactions, brokerage statements, and/or the clients' securities
transactions to determine whether a violation of this Code may have
occurred. Before making any determination that a violation has been
committed by any person, the designated Supervisor shall give such
person an opportunity to supply additional explanatory material.
If the designated Supervisor determines that a violation of this Code
may have occurred, he shall submit his written determination, together
with the confidential monthly report and any additional explanatory
material provided by the individual, to the Counsel for the Advisor,
who shall make an independent determination as to whether a violation
has occurred.
If the Counsel for the Advisor finds that a violation has occurred, the
Counsel for the Advisor shall impose upon the individual such sanctions
as he or she deems appropriate and shall report the violation and the
sanction imposed to the Board of Trustees of the Trusts.
No person shall participate in a determination of whether he has
committed a violation of the Code or of the imposition of any sanction
against himself. If a securities transaction of the Counsel for the
Advisor is under consideration, any other Counsel shall act in all
respects in the manner prescribed herein for the Counsel for the
Advisor.
18.9 RECORDS
The Company shall maintain records in the manner and to the extent set
forth below, and will make them available for examination by
representatives of the Securities and Exchange Commission.
1. A copy of this Code and any other code which is, or at any time within the
past five years has been, in effect shall be preserved in an easily
accessible place;
2. A record of any violation of this Code and any action taken as a result of
such violation shall be preserved in an easily accessible place for a
period of not less than five years following the end of the fiscal year in
which the violation occurs;
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3. A copy of each report made by an officer or Supervisor pursuant to this
Code shall be preserved for a period of not less than five years from the
end of the fiscal year in which it is made, the first two years in an
easily accessible place; and
4. A list of all persons who are, or within the past five years have been,
required to make reports pursuant to this Code shall be maintained in an
easily accessible place.
18.10 MISCELLANEOUS
All reports of securities transactions and any other information filed
with the Company pursuant to this Code shall be treated as
confidential. The Company may from time to time adopt such
interpretations of this Code as it deems appropriate.
The Counsel for the Company, or an appropriate member of SAM, shall
report to SAM and to the Board of Trustees of the Trusts at least
annually as to the operation of this Code and shall address in any
such report the need (if any) for further changes or modifications to
this Code.
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