CODE OF ETHICS
SMITH HAYES FINANCIAL SERVICES CORPORATION
This Code of Ethics has been adopted by SMITH HAYES
Financial Services, the "Distributor" for Stratus Funds, in
compliance with Rule 17j-1 (the "Rule") under the Investment
Company Act of 1940 (the "Act") to establish standards and
procedures for the detection and prevention of activities by
which person having knowledge of the investments and investment
intentions of the Fund may abuse their fiduciary duties to the
Fund and to deal with other types of conflict of interest
situations to which the Rule is addressed. Persons acting on
behalf of SMITH HAYES, as Distributor for the Funds, are
independent of the Fund's investment direction and decisions.
Such persons have no influence or control and do not have the
power to exercise indirect influence or control of the Fund's
investment decisions. The CEO of SMITH HAYES is also a Board
Member of the Stratus Funds Board. As such, the CEO is an Access
Person, as defined in paragraph 2. of this Code and the Rule. Mr.
Smith is obligated and responsible to comply with the Fund's
independent Code of Ethics. The premise of this Code serves to
acknowledge the ethical responsibilities and obligations of
individuals acting on behalf of the Distributor and requirements
of the Rule if such capacity changes to include direction or
influence of the Fund's investment decisions.
1. Objective and General Prohibitions
The specific provisions and reporting requirements of the
Rule are concerned primarily with those investment activities of
Access Person defined below, who are associated with the Fund and
who thus may benefit from or interfere with the purchase or sale
of portfolio securities by the Fund. However, the Rule and this
Paragraph 1 apply to all affiliated persons of the Fund,
including the Adviser and the Distributor, and affiliated persons
of the Adviser and the Distributor ("Covered Persons"). The Rule
makes it "unlawful" for Covered Persons to engage in conduct that
is deceitful, fraudulent, or manipulative, or which involves
false or misleading statements, in connection with the purchase
or sale of securities by an investment company. Accordingly,
under the Rule and this Code no Covered Person shall use any
information concerning the investments or investment intentions
of the Fund, or his or her ability to influence such investment
intentions, for personal gain or in a manner detrimental to the
interests of the Fund. In addition, no Covered Person shall,
directly or indirectly in connection with the purchase or sale of
a "security held or to be acquired" by the Fund:
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(i) employ any device, scheme or artifice to defraud the
Fund; or
(ii) make to the Fund or the Adviser any untrue statement of
a material fact or omit to state to any of the foregoing
a material fact necessary in order to make the
statements made, in light of the circumstances under
which they are made, no misleading; or
(iii) engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the
Fund; or (iv) engage in any manipulative practice with
respect to the Fund.
2. Definitions
"Access Person" means: (1) any officer, director or
employee of the Adviser or to the Fund; (2) any employee of any
company in a control relationship to the Adviser or the Fund who,
in connection with his or her regular functions or duties, makes,
participate in or obtains information regarding the purchase or
sale of securities by the Fund, or whose functions or duties
relate to the making of any recommendations with respect to such
purchases or sales; (3) any natural person in a control
relationship to the Adviser or the Fund who obtains information
made for the purchase or sale of securities by the Fund; and (4)
the Distributor, defined by this Code and in the context of the
Rule is any partner, officer or employee who, in the ordinary
course of business, makes, participating or obtains information
regarding the purchase or sale of securities for the Fund or
whose functions or duties as part of the ordinary course of
business related to the making of any recommendations regarding
the purchase or sale of securities by the Fund.
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3. Prohibited Transactions
Access Persons may not purchase or sell or otherwise
acquire or dispose of any security, as defined by the Rule, in
which he or she has or acquires a direct or indirect beneficial
interest, as defined by the Rule, if he/she knows or should know
at the time of entering into the transaction by reason of which
such Access Person has or acquires such direct or beneficial
interest that: (i) the Fund such direct or indirect beneficial
interest that: the Fund has engaged in a transaction in the same
security within the last 15 days, or is engaging in a transaction
or is going to engage in a transaction in the same security in
the next 15 days or (ii) the Adviser has within the last 15 days;
considered a transaction in the same security for the Fund or is
considering such a transaction in the security or within the next
15 days is going to consider such a transaction in the security
unless such Access person (i) obtains advance clearance of such
transaction and(ii) reports to the Fund the information described
in Paragraph 5 of the Code of Ethics.
IF A COVERED PERSON(S) DEFINED BY THE RULE BECOMES AN
ACCESS PERSON, DEFINED BY THE RULE, SUCH INDIVIDUAL(S) WILL BE
OBLIGATED AND RESPONSIBLE TO COMPLY WITH THE FUND'S CODE OF
ETHICS.
4. Administration
The Administration of this Code of Ethics will be the
responsibility of the Compliance Officer of SMITH HAYES. The
responsibilities include implementing, updating and maintaining
the Code.
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