SOUND SHORE FUND, INC.
CODE OF ETHICS PURSUANT TO SECTION 406 OF THE SARBANES-OXLEY
ACT OF 2002 FOR PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS
JANUARY 29, 2004
I. COVERED OFFICERS/PURPOSE OF THE CODE
This Code of Ethics ("Code") has been adopted by Sound Shore Fund, Inc.
(the "Fund") pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (the
"Act"). This Code applies to the Fund's Principal Executive Officer and
Principal Financial Officer (or others serving in a similar capacity) (the
"Covered Officers," as identified in EXHIBIT A). This Code has been adopted for
the purpose of promoting:
o honest and ethical conduct, including the 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 the Fund files with, or submits to,
the Securities and Exchange Commission ("SEC") and in other
public communications made by the Fund;
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 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 Fund.
For example, a conflict of interest would arise if a Covered Officer, or a
member of the Covered Officer's family, receives improper personal benefits as a
result of the Covered Officer's position with the Fund.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Fund and already are subject to conflict of interest
provisions in the
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Investment Company Act of 1940 (including the regulations thereunder, the "1940
Act") and the Investment Advisers Act of 1940 (including the regulations
thereunder, the "Investment Advisers Act"). For example, Covered Officers may
not engage in certain transactions (such as the purchase or sale of portfolio
securities or other property) with the Fund because of their status as
"affiliated persons" of the Fund. The compliance programs and procedures of the
Fund and its investment adviser, Sound Shore Management, Inc. (the "Adviser")
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. See also Section V of this Code.
Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Fund and the Adviser or the Fund's administrator or
fund accounting agent ("other service providers"), 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 for the
Fund or for the Adviser or other service providers, or for any of them), be
involved in establishing policies and implementing decisions that will have
different effects on the Adviser and other service providers and the Fund. The
participation of the Covered Officers in such activities is inherent in the
contractual relationships between the Fund and the Adviser and such other
service providers and is consistent with the performance by the Covered Officers
of their duties as officers of the Fund. Thus, if performed in conformity with
the provisions of the 1940 Act and the Investment Advisers Act, such activities
will be deemed to have been handled ethically. In addition, the Fund's Board of
Directors ("Board") recognize that the Covered Officers may also be officers or
employees of one or more other investment companies covered by this or other
codes and that such service, by itself, does not give rise to a conflict of
interest.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not the subject of provisions of the 1940 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 overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the Fund.
* * * *
Each Covered Officer must not:
o use his personal influence or personal relationships improperly
to influence investment decisions or financial reporting by
the Fund whereby the Covered Officer would benefit personally
to the detriment of the Fund;
o cause the Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than
the benefit of the Fund; or
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o retaliate against any other Covered Officer or any employee of
the Fund or their service providers for reports of potential
violations that are made in good faith.
There are some conflict of interest situations that should always be
approved by the President of the Fund (or, with respect to activities of the
President, by the chairman of the Fund's audit committee). These conflict of
interest situations are listed below:
o service on the board of directors or governing board of a
publicly traded entity;
o the receipt of any non-nominal gifts from persons or entities
who have or are seeking business relationships with the Fund;
o the receipt of any entertainment from any company with which the
Fund 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 entities doing business with the Fund,
other than the Adviser or another service provider or their
respective affiliates. This restriction shall not apply to or
otherwise limit the ownership of publicly traded securities so
long as the Covered Person's ownership does not exceed more than
2% of the outstanding securities of the relevant class.
o a direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Fund for effecting
portfolio transactions or for selling or redeeming shares other
than an interest arising from the Covered Officer's employment
with the Adviser, the Fund's principal underwriter or their
respective affiliates. This restriction shall not apply to or
otherwise limit (i) the ownership of publicly traded securities
so long as the Covered Person's ownership does not exceed
more than 2% of the particular class of security outstanding or
(ii) the receipt by the Adviser or an affiliate of research or
other benefits in exchange for "soft dollars" in accordance with
the safe harbor provisions of Section 28(e) under the Securities
Exchange Act of 1934, as amended.
III. DISCLOSURE AND COMPLIANCE
o Each Covered Officer should familiarize himself or herself with
the disclosure requirements generally applicable to the Fund;
o each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Fund to others, whether
within or outside the Fund, including to the Fund's Board and
auditors, and to governmental regulators and self-regulatory
organizations;
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o each Covered Officer should, to the extent appropriate within
his area of responsibility, consult with other officers and
employees of the Fund and the Adviser and, as applicable, other
service providers with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports
and documents the Fund file with, or submit to, the SEC and in
other public communications made by the Fund; 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 this Code (or thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Fund
that he has received, read and understands the Code;
o annually thereafter affirm to the Fund that he has complied with
the requirements of the Code;
o provide full and fair responses to all questions asked in the
Fund's periodic Director and Officer Questionnaire as well as
with respect to any supplemental request for information; and
o notify the President of the Fund promptly if he knows of any
violation of this Code (with respect to violations by the
President, the Covered Officer shall report to the chairman of
the Fund's audit committee). Failure to do so is itself a
violation of this Code.
The President of the Fund 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 President will be considered by the audit
committee (the "Committee").
The Fund will follow these procedures in investigating and enforcing
this Code (in the case of a suspected violation of this Code by the President,
the actions specified below to be taken by the President will instead be the
responsibility of the chairman of the Committee):
o the President will take all appropriate action to investigate
any potential violations reported to him, which may include the
use of internal or external counsel, accountants or other
personnel;
o if, after such investigation, the President believes that no
violation has occurred, the President is not required to take
any further action;
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o any matter that the President 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 Adviser or its
board; or a recommendation to dismiss the Covered Officer;
o the Committee will be authorized to grant waivers, as it deems
appropriate; and
o any changes to or waivers of this Code will, to the extent
required, be disclosed as provided by SEC rules.
V. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Fund 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 Fund or the Adviser 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 conflict with the provisions of this Code. The Fund's and their
Adviser's and service providers' codes of ethics under Rule 17j-1 under the 1940
Act and the Adviser's and other service providers' more detailed compliance
policies and procedures 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
directors not considered "interested persons" within the meaning of the 1940
Act.
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 except as authorized by the Board.
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VIII. INTERNAL USE
The Code is intended solely for the internal use by the Fund and does
not constitute an admission, by or on behalf of the Fund, as to any fact,
circumstance or legal conclusion.
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EXHIBIT A
PERSONS COVERED BY THIS CODE OF ETHICS
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FUND PRINCIPAL EXECUTIVE OFFICER PRINCIPAL FINANCIAL OFFICER
OFFICER (PRESIDENT) OFFICER (TREASURER)
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Sound Shore Fund, Inc. T. Gibbs Kane, Jr. Stacey E. Hong
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