SUMMIT MUTUAL FUNDS, INC. EX-99.CODE OF ETHICS
ITEM 12(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
Exhibit A
Persons covered by this Code of Ethics:
Steven R. Sutermeister
Thomas G. Knipper
1.