SUMMIT MUTUAL FUNDS, INC. EX-99.CODE OF ETHICS
ITEM 10(1) TO FORM N-CSR
SUMMIT MUTUAL FUNDS, INC.
CODE OF ETHICS
FOR
PRINCIPAL EXECUTIVE
AND
SENIOR FINANCIAL OFFICERS
I. Covered Officers/Purpose of the Code
Summit Mutual Funds, Inc.'s code of ethics (this "Code") for the
investment companies within the complex (collectively, "Funds" and each,
"Company") applies to the Company's principal Executive Officer, principal
financial officer, and principal accounting officer (the "Covered
Officers", each of whom are set forth in Exhibit A), for the purpose of
promoting:
o Honest and ethical conduct, including ethical handling of
actual or apparent conflicts of interest between personal
and professional relationships;
o Full, fair, accurate, timely and understandable disclosure
in reports and documents that a registrant files with, or
submits to, the Securities and Exchange Commission ("SEC")
and in other public communications made by the Company;
o Compliance with applicable laws and governmental rules and
regulations;
o The prompt internal reporting of violations of the Code to
an appropriate person or persons identified in the Code;
and
o Accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to
apparent as well as actual conflicts of interest.
II. Covered Officers Should Handle Ethically Actual and Apparent
Conflicts of Interest
Overview. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his service to, the
Company. For example, a conflict of interest would arise if a Covered
Officer, or a member of his family, receives improper personal benefits as
a result of his position with the Company.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Company and already are subject to conflict of
interest provisions in the Investment Company Act of 1940 ("Investment
Company Act") and the Investment Advisers Act of 1940 ("Investment
Advisers Act"). For example, Covered Officers may not individually engage
in certain transactions (such as the purchase or sale of securities or
other property) with the Company because of their status as "affiliated
persons" of the Company. The Company's and the investment adviser's
compliance programs and procedures are designed to prevent, or identify
and correct, violations of these provisions. This Code does not, and is
not intended to, repeat or replace these programs and procedures, and such
conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper
personal benefit, conflicts arise from, or as a result of, the contractual
relationship between the Company and the investment adviser of which the
Covered Officers are also officers or employees. As a result, this Code
recognizes that the Covered Officers will, in the normal course of their
duties (whether formally for the Company or for the adviser, or for both),
be involved in establishing policies and implementing decisions that will
have different effects on the adviser and the Company. The participation
of the Covered Officers in such activities is inherent in the contractual
relationship between the Company and the adviser and is consistent with
the performance by the Covered Officers of their duties as officers of the
Company. Thus, if performed in conformity with the provisions of the
Investment Company Act and the Investment Advisers Act, such activities
will be deemed to have been handled ethically. In addition, it is
recognized by the Funds' Boards of Directors ("Boards") that the Covered
Officers may also be officers or employees of one or more other investment
companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions in the Investment
Company Act and the Investment Advisers Act. The following list provides
examples of conflicts of interest under the Code, but Covered Officers
should keep in mind that these examples are not exhaustive. The overriding
principle is that the personal interest of a Covered Officer should not be
placed improperly before the interest of the Company.
Each Covered Officer must:
o Not use his personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Company whereby the Covered Officer would
benefit personally to the detriment of the Company;
o Not cause the Company to take action, or fail to take
action, for the individual personal benefit of the Covered
Officer rather than the benefit the Company;
o Not use material non-public knowledge of portfolio
transactions made or contemplated for the Company to trade
personally or cause others to trade personally in
contemplation of the market effect of such transactions;
There are some conflict of interest situations that should
always be discussed with the Company's in-house legal counsel
("Legal Counsel") if material. Examples of these include:
o Service as a director on the board of any public or
private company;
o The receipt of any non-nominal gifts;
o The receipt of any entertainment from any company with
which the Company has current or prospective business
dealings unless such entertainment is business related,
reasonable in cost, appropriate as to time and place, and
not so frequent as to raise any question of impropriety;
o Any ownership interest in, or any consulting or employment
relationship with, any of the Company's service providers,
other than its investment adviser, principal underwriter,
administrator or any affiliated person thereof;
o A direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Company for
effecting portfolio transactions or for selling or
redeeming shares other than an interest arising from the
Covered Officer's employment, such as compensation or
equity ownership.
III. Disclosure and Compliance
o Each Covered Officer should familiarize himself with the
disclosure requirements generally applicable to the
Company;
o Each Covered Officer should not knowingly misrepresent, or
cause others to misrepresent, facts about the Company to
others, whether within or outside the Company, including
to the Company's directors and auditors, and to
governmental regulators and self-regulatory organizations;
o Each Covered Officer should, to the extent appropriate
within his area of responsibility, consult with other
officers and employees of the Funds and the adviser with
the goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the
Funds file with, or submit to, the SEC and in other public
communications made by the Funds; and
o It is the responsibility of each Covered Officer to
promote compliance with the standards and restrictions
imposed by applicable laws, rules and regulations.
IV. Reporting and Accountability
Each Covered Officer must:
o Upon adoption of the Code (or thereafter as applicable,
upon becoming a Covered Officer), affirm in writing to
the Board that he has received, read, and understands the
Code;
o Annually thereafter affirm to the Board that he has
complied with the requirements of the Code;
o Annually report to the Legal Counsel affiliations or other
relationships related to conflicts of interest.
o Not retaliate against any other Covered Officer or any
employee of the Funds or their affiliated persons for
reports of potential violations that are made in good
faith; and
o Notify the Legal Counsel promptly if he knows of any
violation of this Code. Failure to do so is itself a
violation of this Code.
The Legal Counsel is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority
to interpret this Code in any particular situation. However, any
approvals or waivers sought by the Principal Executive Officer will be
considered by the Audit Committee (the "Committee").
The Funds will follow these procedures in investigating and enforcing
this Code:
o The Legal Counsel will take all appropriate action to
investigate any potential violations reported to him;
o If, after such investigation, the Legal Counsel believes
that no violation has occurred, he is not required to take
any further action;
o Any matter that the Legal Counsel believes is a violation
will be reported to the Committee;
o If the Committee concurs that a violation has occurred, it
will inform and make a recommendation to the Board, which
will consider appropriate action, which may include review
of, and appropriate modifications to, applicable policies
and procedures; notification to appropriate personnel of
the investment adviser or its board; or a recommendation
to dismiss the Covered Officer;
o The Committee will be responsible for granting waivers, as
appropriate; and
o Any changes to or waivers of this Code will, to the extent
required, be disclosed as provided by SEC rules.
A report on compliance with this Code will be presented at each
regular meeting of the Boards.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds, the Funds' adviser, principal
underwriter, or other service providers govern or purport to govern the
behavior or activities of the Covered Officers who are subject to this
Code, they are superseded by this Code to the extent that they overlap or
conflict with the provisions of this Code. The Funds' and their investment
adviser's codes of ethics under Rule 17j- 1 under the Investment Company
Act are separate requirements applying to the Covered Officers and others,
and are not part of this Code.
VI. Amendments
Any amendments to this Code, other than amendments to Exhibit A, must
be approved or ratified by a majority vote of the Board, including a
majority of independent directors.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such
matters shall not be disclosed to anyone.
VIII. Internal Use
The Code is intended solely for the internal use by the Funds and
does not constitute an admission, by or on behalf of any Company, as to
any fact, circumstance, or legal conclusion.
Date: August 11, 2003
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Exhibit A
Persons covered by this Code of Ethics:
Steven R. Sutermeister
Thomas G. Knipper