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.
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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.
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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.
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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
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