EXHIBIT 99.CODE ETH
DECEMBER 2003
LONGLEAF PARTNERS FUNDS TRUST
CODE OF ETHICS UNDER SECTION 406 OF THE
SARBANES-OXLEY ACT
INTRODUCTION.
Southeastern Asset Management, Inc. ("Southeastern"), as investment adviser to
the Longleaf Partners Funds ("Longleaf" or the "Funds"), has stated publicly in
the Funds' Prospectus its intention to manage the Funds under certain governing
principles designed to put shareholders first. These principles go beyond what
the law requires, and reflect the commitment of Southeastern's management to
integrity, and its desire to avoid taking inappropriate advantage of its
position to achieve personal gain. Similarly, it is the expectation of
Longleaf's Board of Trustees, as well as the senior officers of Southeastern who
have been delegated responsibility for the management and administration of the
Funds, that the principles contained in this code of ethics will convey to
Longleaf's shareholders the importance the Board and Southeastern's management
place on integrity and regulatory compliance.
SECTION I. COVERED PERSONS/PURPOSE OF THE CODE
This code of ethics (the "Code") of Longleaf Partners Funds Trust ("Longleaf")
and each series of Longleaf, a "Fund") applies to the officers of Southeastern
performing for Longleaf the principal executive function, the principal
financial function, and the principal legal function (the "Covered Persons,"
each of whom is set forth in Exhibit A) for the purpose of promoting:
- honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and
professional relationships;
- 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 Funds;
- compliance with applicable laws and governmental rules and
regulations;
- the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
- accountability for adherence to the Code.
Each Covered Person 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.
SECTION II. COVERED PERSONS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT
CONFLICTS OF INTEREST
OVERVIEW. A "conflict of interest" occurs when a Covered Person's
private interest interferes with the interests of, or his/her service to, the
Funds. For example, a conflict of interest would arise if a Covered Person, or
such person's family member, receives improper personal benefits as a result of
the Covered Person's position with the Funds or the Funds' adviser.
Certain conflicts of interest arise out of the relationships between
Covered Persons and the Funds 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 Persons may not individually engage in certain transactions (such as the
purchase or sale of securities or other property) with the Funds because of
their status as "affiliated persons" of the Funds. The Funds' 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 Funds and the investment adviser of which the Covered Persons are
also officers or employees. As a result, this Code recognizes that the Covered
Persons will, in the normal course of their duties (whether formally for the
Funds 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
Funds. The participation of the Covered Persons in such activities is inherent
in the contractual relationship between the Funds and the adviser and is
consistent with the performance by the Covered Persons of their duties. 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.
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 Persons should keep in mind
that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Person should not be placed improperly before the
interest of the Funds.
* * * *
Each Covered Person must:
- not use his/her personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Funds whereby the Covered Person would
benefit personally to the detriment of the Funds;
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- not cause the Funds to take action, or fail to take action,
for the individual personal benefit of the Covered Person
rather than the benefit of the Funds.
There are some conflict of interest situations (if material) that
should always be approved by the Independent Trustees or their designee.
Examples of these include:
- service as a director on the board of any public company;
- the receipt of any entertainment from any company with which
the Funds 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;
- any ownership interest in, or any consulting or employment
relationship with, any of the Funds' service providers, other
than its investment adviser, principal underwriter,
administrator or any affiliated person thereof;
- a direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Funds for effecting
portfolio transactions or for selling or redeeming shares
other than an interest arising from the Covered Person's
employment, such as compensation or equity ownership.
SECTION III. DISCLOSURE AND COMPLIANCE
- Each Covered Person should familiarize him/herself with the
disclosure requirements generally applicable to the Funds;
- each Covered Person should not knowingly misrepresent, or
cause others to misrepresent, facts about the Funds to others,
including to the Funds' Trustees and auditors, and to
governmental regulators and self-regulatory organizations;
- each Covered Person should, to the extent appropriate within
his/her area of responsibility, consult with other officers
and employees of 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
- it is the responsibility of each Covered Person to promote
compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
SECTION IV. REPORTING AND ACCOUNTABILITY
Each Covered Person must:
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- upon adoption of the Code (or thereafter as applicable, upon
becoming a Covered Person), affirm in writing to the Board
that he or she has received, read, and understands the Code;
- annually thereafter affirm to the Board that he has complied
with the requirements of the Code;
- not retaliate against any other Covered Person or any employee
of the adviser or its affiliated persons for reports of
potential violations that are made in good faith; and
- notify the Independent Trustees or their designee promptly if
he/she knows of any violation of this Code. Failure to do so
is itself a violation of this Code.
Any approvals or waivers(1) sought by the Covered Persons will be
considered by the Independent Trustees.
The Funds will follow these procedures in investigating and enforcing
this Code:
- the Independent Trustees or their designee will take all
appropriate action to investigate any potential violations
reported;
- if, after such investigation, the Independent Trustees or
their designee believes that no violation has occurred, no
further action need be taken;
- if the Independent Trustees or their designee believes that a
violation has occurred, they will inform and make a
recommendation to the full 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 a recommendation to dismiss the Covered
Person; and
- the Independent Trustees will be responsible for granting
waivers, as appropriate.
SECTION V. OTHER POLICES 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. The Funds' and their
investment adviser's codes of ethics under Rule 17j-1 under the Investment
Company Act and the adviser's more detailed polices and procedures set forth in
the Longleaf Partners Funds
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(1) Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of
a material departure from provision of the code of ethics" and "implicit
waiver," which must also be disclosed, as "the registrant's failure to take
action within a reasonable period of time regarding a material departure
from a provision of the code of ethics that has been made known to an
executive officer" of the registrant.
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Trust/Southeastern Asset Management, Inc. 1996 Securities Trading Policy and
Personal Code of Ethics (as amended) are separate requirements applying to the
Covered Persons and others, and are not part of this Code.
SECTION 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 Trustees.
SECTION 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 other than the Board and its counsel.
SECTION 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 the Funds, as to any fact,
circumstance, or legal conclusion.
SECTION IX. PUBLICATION ON FORM N-CSR
A copy of this Code will be filed with the Securities and Exchange
Commission as an exhibit to the Funds' annual report on Form N-CSR. Other than
technical, administrative, and non-substantive amendments to the Code, a brief
description of any amendment to the Code will be placed on Form N-CSR for the
period in which the amendment took place. A copy of any such amendments will be
filed as an exhibit to the Funds' Form N-CSR as required by law.
Any waiver, or implicit waiver, to this Code shall be described on the
Form N-CSR for the period in which such waiver took place as required by law.
Date: December 8, 2003
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EXHIBIT A
Persons Covered by this Code of Ethics
O. MASON HAWKINS
CHAIRMAN OF THE BOARD AND CEO
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL EXECUTIVE FUNCTION FOR LONGLEAF PARTNERS FUNDS
JULIE DOUGLAS
VICE-PRESIDENT AND CFO-MUTUAL FUNDS
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL FINANCIAL FUNCTION FOR LONGLEAF PARTNERS FUNDS
ANDREW R. MCCARROLL
VICE-PRESIDENT AND GENERAL COUNSEL
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL LEGAL FUNCTION FOR LONGLEAF PARTNERS FUNDS
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LONGLEAF PARTNERS FUNDS TRUST
CODE OF ETHICS UNDER SECTION 406 OF THE SARBANES-OXLEY ACT
COVERED PERSON CERTIFICATION
The undersigned officers of Southeastern Asset Management, Inc. hereby
individually affirm that he or she has received, read, and understands the
above-referenced Code of Ethics.
/s/ O. Mason Hawkins 12/8/03
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O. MASON HAWKINS DATE
CHAIRMAN OF THE BOARD AND CEO
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL EXECUTIVE FUNCTION FOR LONGLEAF PARTNERS FUNDS
/s/ Julie M. Douglas 12/8/03
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JULIE M. DOUGLAS DATE
VICE-PRESIDENT AND CFO-MUTUAL FUNDS
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL FINANCIAL FUNCTION FOR LONGLEAF PARTNERS FUNDS
/s/ Andrew R. McCarroll 12/8/03
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ANDREW R. MCCARROLL DATE
VICE-PRESIDENT AND GENERAL COUNSEL
SOUTHEASTERN ASSET MANAGEMENT, INC.
PRINCIPAL LEGAL FUNCTION FOR LONGLEAF PARTNERS FUNDS
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