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
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in the 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
(PRESIDENT) (TREASURER)
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Sound Shore Fund, Inc. T. Gibbs Kane, Jr. Stacey E. Hong
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