LKCM FUNDS
CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER AND TREASURER
1. Covered Officers and Purposes of this Code
This code of ethics ("Code") applies to the Chief Executive Officer and
the Treasurer (the "Covered Officers") of the LKCM Funds (the "Trust"). The Code
serves to promote:
(a) honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and
professional relationships;
(b) 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 Trust;
(c) compliance with applicable laws and governmental rules and
regulations;
(d) the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
(e) 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 actual as
well as apparent conflicts of interest.
2. Covered Officers Should Resolve Ethically Any Actual or Apparent
Conflicts of Interest
A "conflict of interest" occurs when a Covered Officer's private
interest interferes with the interests of, or his or her service to, the Trust.
For example, a conflict of interest would arise if a Covered Officer, or a
member of his or her family, receives improper personal benefits as a result of
his position with the Trust.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Trust and already are subject to conflict of interest
provisions in the Investment Company Act of 1940, as amended ("1940 Act"), and
the Investment Advisers Act of 1940, as amended ("Advisers Act"). For example,
Covered Officers may not engage individually in certain transactions (such as
the purchase or sale of securities or other property) with the Trust because of
their status as "affiliated persons" of the Trust.
Conflicts also may arise from a Covered Officer's position or
employment at Luther King Capital Management Corporation ("LKCM") and his or her
position with the Trust. This Code recognizes that the Covered Officers, in the
normal course of their duties (whether formally for the Trust or for LKCM, or
for both), will be involved in establishing policies and implementing decisions
that will have different effects on LKCM and the Trust. The participation of the
Covered Officers in such activities is inherent in the contractual relationship
between the Trust and LKCM and is consistent with the performance by the Covered
Officers of their duties as officers of the Trust. Thus, if performed in
conformity with the provisions of the 1940 Act and the Advisers Act, such
activities will be deemed to have been handled ethically.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions in the 1940 Act and the
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 overarching principle is that the personal interest of a
Covered Officer should not be placed improperly before the interest of the
Trust. Thus, a Covered Officer should not:
(a) use personal influence or personal relationships improperly to
influence investment decisions or financial reporting by the Trust
whereby the Covered Officer would benefit personally to the
detriment of the Trust; or
(b) cause the Trust to take action, or fail to take action, for the
personal benefit of the Covered Officer, rather than the benefit
of the Trust.
At times, certain situations may arise that may, or may not be,
considered conflicts of interest under this Code. Covered Officers are
encouraged to discuss such situations with legal counsel to the Trust if they
are concerned that the situation poses a conflict of interest to him or her.
Examples of these types of situations include:
(a) service as director on the board of any public or private company;
(b) the receipt of any non-nominal gifts;
(c) the receipt of any entertainment from any company with which the
Trust 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;
(d) any ownership interest in, or any consulting or employment
relationship with, any of the Trusts' service providers, other
than LKCM, or any affiliated person thereof; and
(e) a direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Trust 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.
3. Disclosure and Compliance
It is Trust policy to make full, fair, accurate, timely and
understandable disclosure in compliance with all applicable laws and regulations
in all reports and documents that the Company files with, or submits to, the
Securities and Exchange Commission and in all other public communications made
by the Trust. Covered Officers are required to promote compliance with this
policy by all employees and to abide by Trust standards, policies and procedures
designed to promote compliance with this policy. Thus, a Covered Officer shall
(a) familiarize himself or herself with the disclosure requirements
generally applicable to the Trust;
(b) not knowingly misrepresent, or cause others to misrepresent, facts
regarding a Trust to others, whether within or outside the Trust,
including to the Trust's Trustees and auditors, and to
governmental regulators and self-regulatory organizations;
(c) to the extent appropriate, within his or her area of
responsibility, consult with other officers and employees of the
Trust and LKCM with the goal of promoting full, fair, accurate,
timely and understandable disclosure in the reports and documents
the Trust files with, or submit to, the SEC and in other public
communications made by the Trust; and
(d) promote compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
4. Reporting and Accountability
Each Covered Officer must:
(a) upon adoption of the Code (or thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Board that
he or she has received, read, and understands the Code;
(b) annually thereafter affirm to the Board that he or she has
complied with the requirements of the Code;
(c) not retaliate against any other Covered Officer or any employee of
the Trust or their affiliated persons for reports of potential
violations that are made in good faith;
(d) notify the Audit Committee ("Committee") promptly if he or she
knows of any violation of this Code (failure to do so is itself a
violation of the Code); and
(e) report at least annually any affiliations or other relationships
related to conflicts of interest in accordance with the Trust's
Trustees and Officers Questionnaire.
The Committee is responsible for applying this Code to any specific
situations presented to it and has the authority to interpret this Code in any
particular situation. Any approvals or waivers sought by Covered Officers shall
be considered by the Committee.
The following procedures will be used by the Committee in investigating
and enforcing this Code:
(a) the Committee will take all appropriate action to investigate any
potential violations reported to the Committee;
(b) if, after such investigation, the Committee believes that no
violation has occurred, no further action is required;
(c) if the Committee believes 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;
(d) the Committee will be responsible for granting waivers, as
appropriate; and
(e) any changes to or waivers of this Code will, to the extent
required, be disclosed as provided by SEC rules.
The Committee may retain appropriate counsel or other experts to assist
and to perform the foregoing duties and its other duties under this Code.
5. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Trust for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and
forms applicable to registered investment companies thereunder. Any other
policies or procedures of the Trust, LKCM, or other service providers that
govern or purport to govern the behavior or activities of the Covered Officers
who are subject to this Code are to be interpreted and enforced in conjunction
with this Code. The codes of ethics under Rule 17j-1 under the 1940 Act for the
Trust and LKCM, contain separate requirements applying to the Covered Officers
and others and are not part of this Code.
6. Amendments
Any amendments to this Code must be approved or ratified by a majority
vote of the Board, including a majority of independent Trustees.
7. 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 other than the Board, Trust counsel and LKCM.
8. Internal Use
The Code is intended solely for the internal use by the Trust and does
not constitute an admission, by or on behalf of the Trust, as to any fact,
circumstance, or legal conclusion.
Date: November 19, 2003