-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F9JerRSZE82LLpQ0PNrWueTBgmZ2WfIRHGl30aLp7jTDZBlo3YPY2duFKIClxvZl 9VQLZcEg5MZni2aQwvkmsA== /in/edgar/work/0001012709-00-000966/0001012709-00-000966.txt : 20001025 0001012709-00-000966.hdr.sgml : 20001025 ACCESSION NUMBER: 0001012709-00-000966 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20001024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPACT MANAGEMENT INVESTMENT TRUST CENTRAL INDEX KEY: 0001030805 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 232873254 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 333-22095 FILM NUMBER: 744820 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-08065 FILM NUMBER: 744821 BUSINESS ADDRESS: STREET 1: 1875 SKI TIME SQUARE DR STREET 2: STE ONE CITY: STEAMBOAT SPRINGS STATE: CO ZIP: 80487 BUSINESS PHONE: 9708791189 MAIL ADDRESS: STREET 1: ARROTT BUILDING STREET 2: 401 WOOD ST 3RD FL CITY: PITTSBURGH STATE: PA ZIP: 15222 485APOS 1 0001.txt IMPACT MANAGEMENT INVESTMENT TRUST - PEA #8 As filed with the Securities and Exchange Commission on October 24, 2000 1933 Act Registration No. 333-22095 1940 Act Registration No. 811-8065 - ------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. Post-Effective Amendment No. 8 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 8 [X] (Check appropriate box or boxes) IMPACT MANAGEMENT INVESTMENT TRUST ---------------------------------- (exact name of Registrant as Specified in Charter) 333 West Vine Street, Suite 206 Lexington, KY 40507 --------------------------------------- ---------- (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, including Area Code: 859-254-2240 Charles R. Clark Chairman Impact Management Investment Trust 333 West Vine Street, Suite 206 Lexington, KY 40507 (Name and Address of Agent for Service) Approximate date of proposed sale to the public: immediately upon effectiveness. It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) [x] 75 days after filing pursuant to paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of Rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment PROSPECTUS January __, 2001 IMPACT MANAGEMENT INVESTMENT TRUST Jordan 25 Fund Retail Class Shares Traditional Class Shares Wholesale Class Shares Institutional Class Shares 1-800-556-5856 (Toll Free) The U.S. Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. TABLE OF CONTENTS ----------------- Page PORTFOLIO SUMMARIES......................................................... Investment Objective and Principal Strategies...................... Principal Risks.................................................... Portfolio Expenses................................................. FINANCIAL HIGHLIGHTS........................................................ INVESTMENT POLICIES AND RISKS............................................... Risk Factors....................................................... MANAGEMENT OF THE PORTFOLIO................................................. Investment Adviser................................................. Advisory Fees...................................................... Portfolio Manager.................................................. Adviser's Performance Record....................................... PRICING PORTFOLIO SHARES.................................................... HOW TO PURCHASE SHARES...................................................... General............................................................ Purchasing By Mail................................................. Purchasing by Wire................................................. HOW TO REDEEM SHARES........................................................ Written Requests................................................... Signatures......................................................... Telephone Redemptions.............................................. Redemption in Kind................................................. Receiving Payment.................................................. Accounts with Low Balances......................................... -1- DISTRIBUTION ARRANGEMENTS................................................... General .......................................................... Plans Of Distribution.............................................. DIVIDENDS, DISTRIBUTIONS AND TAXES.......................................... Dividends and Distributions........................................ Tax Consequences................................................... PORTFOLIO SUMMARIES INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES The investment objective of the Jordan 25 Fund (the "Portfolio") is to provide long-term capital growth. The Portfolio seeks to achieve its objective by investing primarily in equity securities selected because of their potential for strong earnings growth. The Portfolio will normally hold a core group of 12 to 25 common stocks of U.S. companies. The Portfolio is non-diversified and may concentrate its investments in a particular industry or industries. There are no limitations on the size of companies in which the Portfolio may invest, and during periods when the stock market is rising, the Portfolio may invest primarily in small and mid-size U.S. companies. In addition to common stocks, the Portfolio may invest in preferred stocks and put and call options on common stocks. The portfolio manager will purchase stocks that exhibit the following characteristics: o consistent above-average earnings growth o attractive risk/reward characteristics; o higher forecasted growth rates than the universe of U.S. companies; The portfolio manager may choose to sell a stock when: o it becomes overvalued relative to what the portfolio manager considers to be its future earnings potential. o the company's earnings decelerate as a result of its growth rate declining or its industry leadership deteriorating. o The portfolio manager identifies a stronger holding (which could include cash). o The portfolio manager discovers something negative about the company that invalidates the original reason for the purchase or detracts from the growth estimates. o The trend of the stock market changes from positive to negative. -2- Although providing current income is not an objective of the Portfolio, the Portfolio may earn dividend income generated by its equity holdings and/or interest income generated by its invested cash positions. During periods of adverse market conditions, the Portfolio temporarily may hold a substantial percentage of its assets in cash or money market securities, at which time it is less likely to achieve growth of capital. PRINCIPAL RISKS o The Portfolio's share price will fluctuate in response to market conditions, economic conditions and financial conditions of issuers of the Portfolio's investments. o A relatively high percentage of the Portfolio's assets may be invested in securities of a limited number of issuers. Consequently, the Portfolio may be more sensitive to changes in the market price of its portfolio securities than a diversified fund. o The Portfolio may concentrate its investments in an industry, in which case portfolio companies may share common characteristics and react similarly to market developments. As a result, the Portfolio's returns could be more volatile than those of a less concentrated fund. o The stocks of small and mid-size companies historically have been more volatile in price than stocks of larger companies. o Growth-oriented investments may be more volatile than the rest of the U.S. stock market. o The Portfolio may invest in put and call options on stocks which can increase the volatility of the Portfolio's share price and decrease the liquidity of the Portfolio's investments. o As with an investment in any fund, there is risk of loss of all or part of your investment. PORTFOLIO EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Portfolio shares. SHAREHOLDER FEES (1) - -------------------- (paid directly from your investment) -3- RETAIL TRADITIONAL WHOLESALE INSTITUTIONAL CLASS CLASS CLASS CLASS ------ ----------- --------- ------------- Maximum Sales Charge (Load) None 5.75%(2) None None Imposed on Purchases (as a percentage of offering price) ANNUAL FUND OPERATING EXPENSES - ------------------------------ (expenses that are deducted from Fund assets) RETAIL TRADITIONAL WHOLESALE INSTITUTIONAL CLASS CLASS CLASS CLASS ------ ----------- --------- ------------- Management Fees (3) 1.20% 1.20% 1.20% 1.20% Distribution (12b-1)Fees (4) 1.00% 0.25% 0.25% None Other Expenses (5) 0.35% 0.35% 0.35% 0.35% ----- ----- ----- ----- Total Annual Fund 2.55% 1.80% 1.80% 1.55% Operating Expenses - -------------------- (1) Brokers which have not entered into a selling dealer's agreement with the Portfolio's principal distributor may impose a charge on the purchase of shares. If such a fee is charged, it will be charged directly by the broker, and not by the Portfolio. (2) Reduced for purchases of $50,000 or more, decreasing to zero for purchases over $1 million. See "Distribution Arrangements." (3) Management fees may either increase or decrease from the base rate of 1.20% depending upon the effect of the performance adjustment fee. See "ADVISORY FEES" on p. __. (4) Long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge permitted by rules of the National Association of Securities Dealers, Inc. See "Distribution Arrangements." (5) "Other Expenses" are based on estimated amounts for the current fiscal year. EXAMPLE - ------- This example is intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. You would pay the following expenses on a $10,000 investment, assuming (1) a 5% annual return, (2) redemption at the end of each time period, (3)reinvestment of all dividends and capital distribution, and (4) operating expenses remain the same. Actual expenses in the future may be greater or lesser than those shown. -4- 1 Year 3 Years Retail Class $261 $824 Traditional Class $749 $1,123 Wholesale Class $185 $582 Institutional Class $159 $501 This example should not be considered a representation of past or future expenses or performance. INVESTMENT POLICIES AND RISKS The Portfolio will invest its assets principally in a core group of 12 to 25 common stocks of U.S. issuers. The Portfolio is permitted to invest in companies of any size, from larger well-established companies to smaller emerging growth companies. It is anticipated that the Portfolio will be more fully invested in small and mid-size companies during favorable market periods. The Portfolio is classified as "non-diversified" because the proportion of its assets that may be invested in the securities of a single issuer is not limited by the Investment Company Act of 1940. The Portfolio may concentrate its investment in a particular industry or industries. The portfolio manager seeks to identify individual companies whose value and earnings potential have not been fully recognized by the market at large as reflected in its market price. Utilizing outside research, the portfolio manager's selection process includes analyzing historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management. The portfolio manager then monitors these stocks in the marketplace utilizing proprietary technical analysis to verify that the stock is consistent with the fundamental understanding of the company. PUT AND CALL OPTIONS. The Portfolio may purchase call options on securities in which it is authorized to invest in order to fix the cost of a future purchase or attempt to enhance return by, for example, participating in an anticipated increase in the value of a security. The Portfolio may purchase put options to hedge against a decline in the market value of securities held in the Portfolio or in an attempt to enhance return. The Portfolio may sell covered call options on the securities which it owns and covered put options which give the holder of the option the right to sell the underlying security to the Portfolio at the stated exercise price. The Portfolio may sell covered call and put options contracts on common stocks to the extent of 25% of the value of its net assets at the time such option contracts are sold. PORTFOLIO TURNOVER. Although the Portfolio does not intend to invest for the purpose of seeking short-term profits, securities held by it will be sold whenever the adviser believes it is appropriate to do so in light of the Portfolio's investment objective, without regard to the length of time a particular security may have been held. -5- The Portfolio does not attempt to set or meet any specific portfolio turnover rate, since turnover is incidental to transactions undertaken in an attempt to achieve the Portfolio's investment objective. A higher turnover rate (100% or more) increases transaction costs (i.e., brokerage commissions) and adverse tax consequences for Portfolio shareholders. With frequent trading activity, a greater proportion of any dividends that you receive from the Portfolio will be characterized as ordinary income, which is taxed at higher rates than long-term capital gains. It is expected that under normal market conditions, the annual turnover rate for the Portfolio will not exceed 100%. TEMPORARY INVESTMENTS. For temporary defensive purposes, when the adviser determines that market conditions so warrant, the Portfolio may invest up to 100% of its assets in cash, cash items, and money market instruments. When following such a defensive strategy (which may be as long as 24 months during a major bear market period), the Portfolio will be less likely to achieve its investment objective of capital growth. The foregoing investment policies of the Portfolio are non-fundamental and may be changed by the Board of Trustees without the approval of shareholders. RISK FACTORS The Portfolio is managed with a view to long-term growth with a minimum ten-year investment horizon. The Portfolio's net asset value will fluctuate to reflect the investment performance of the securities held by the Portfolio, so that the value that a shareholder receives upon redemption may be greater or lesser than the value of such shares when purchased. Investments in common stocks in general are subject to market risks that may cause their prices to fluctuate over time. In addition, investment in the securities of small and mid-sized companies in which the Portfolio may invest a majority of its assets presents risks. Such companies may be more volatile than larger companies, so there may be greater risk of a decline in the stock prices of small or mid-size companies than stocks of larger companies. As a non-diversified fund, the Portfolio may invest a greater percentage of its assets in a single issuer and invest in fewer companies than a diversified fund. Consequently, a decline in the value of a single stock held by the Portfolio may have a greater impact on the Portfolio's share price than on the share price of a diversified fund. Because the Portfolio may concentrate its investments in an industry or industries, portfolio companies may share common characteristics and react similarly to market developments. As a result, the Portfolio's returns could be more volatile than those of a less concentrated fund. The prices of the growth stocks owned by the Portfolio are based on future expectations, and growth stocks often are more sensitive than value stocks to bad economic news or negative earnings reports. Growth stocks may underperform during periods when the market favors value stocks. Also, to the extent that the portfolio manager sells growth stocks before they reach their market peak, the Portfolio may miss out on opportunities for higher performance. -6- While options transactions can be used effectively to further the Portfolio's investment objective, under certain market conditions, they can increase the volatility of the Portfolio's share price, decrease the liquidity of the Portfolio and make the accurate pricing of the Portfolio's investments more difficult. If the portfolio manager invests in options at inappropriate times or judges market conditions incorrectly, such investments may lower the Portfolio's return or result in a loss. The Portfolio also could experience losses if it is unable to liquidate its options positions because of an illiquid secondary market. The Portfolio must set aside liquid assets in a segregated account to cover its obligations relating to options transactions. To maintain this required cover, the Portfolio may have to sell portfolio securities at disadvantageous prices. MANAGEMENT OF THE PORTFOLIO INVESTMENT ADVISER Equity Assets Management, Inc. ("EAM") is the Portfolio's investment adviser. Subject to the authority of the Board of Trustees, EAM manages the Portfolio's assets in accordance with the Portfolio's investment objectives and policies described above. The adviser provides the Portfolio with on-going research, analysis, advice and judgments regarding the Portfolio's investments. The adviser also purchases and sells securities on behalf of the Portfolio. EAM is a professional investment manager and a registered investment adviser. EAM's principal place of business is located at 2155 Resort Drive, Suite 108, Steamboat Springs, Colorado 80487. In addition to advising the Portfolio, the adviser and its parent company provide investment advisory services to individuals, corporations, foundations, limited partnerships, and individual retirement, corporate, and group pension and profit-sharing plans. The adviser and its parent company currently have discretionary management authority with respect to approximately $75 million in assets. ADVISORY FEES Under the Portfolio's investment advisory contract, the Portfolio pays EAM a base fee which on an annual basis equals 1.20% of the Portfolio's average daily net assets, which shall be adjusted monthly depending on the Portfolio's investment performance compared to Lipper Growth Index. As a result of the performance fee adjustment, the annual advisory fee rate could be as high as 1.90%, but will not be less than 0.50%, of the Portfolio's average daily net assets. Pursuant to the investment advisory contract, the adviser may voluntarily waive some or all of its fees. PORTFOLIO MANAGER The portfolio manager of the Portfolio is: W. Neal Jordan, President of EAM and founder and Senior Portfolio Manager of EAM's parent company, Jordan American Holdings Inc., since 1972 -7- ADVISER'S PERFORMANCE RECORD Shown below is performance information for a composite of private accounts (the "Accounts")managed by W. Neal Jordan who now manages the Portfolio. The performance data for the Accounts is net of all fees and expenses. The additional expenses of the Portfolio would have lowered the performance results. The accounts are managed with the same investment objective and are subject to substantially identical investment policies and techniques as those used by the Portfolio. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return that an individual investor might achieve by investing in the Portfolio. The Portfolio's results may be different from the composite of Accounts because of, among other things, differences in fees and expenses and because private accounts are not subject to certain investment limitations, diversification requirements and other restrictions imposed by the Investment Company Act of 1940 and the Internal Revenue Code, which if applicable, may have adversely affected the performance of the Accounts. Past performance results of the Accounts are not indicative of the Portfolio's future performance.
Total Return of Accounts ======================================================================================================== 1 Year 3 Years 5 Years 10 Years Ended Ended Ended Ended Average Annual Return for the Periods Specified: Sept. 30, Sept. 30, Sept. 30, Sept. 30, --------- --------- --------- --------- 2000 2000 2000 2000 ---- ---- ---- ---- The Accounts (net of (expenses)................. S&P 500 Index................................... ========================================================================================================
Please read the following important notes concerning the Accounts: 1. The results for the Accounts reflect both income and capital appreciation or depreciation (total return). Dividends are accounted for on a cash basis; other items of income are accounted for on an accrual basis. Returns are time-weighted and represent the dollar-weighted average of the Accounts. Return figures are net of applicable fees and expenses (other than separate custody fees). 2. The S&P 500 Index consists of 500 stocks chosen by Standard & Poor's for market size, liquidity and industry group representation. It is a market-value weighted unmanaged index (stock price times number of shares outstanding), with each stock's weight in the S&P 500 Index proportionate to its market value. -8- PRICING PORTFOLIO SHARES Retail Class, Wholesale Class and Institutional Class shares are sold at net asset value per share, while Traditional Class shares are sold at the offering price per share. The offering price per share consists of the net asset value per share next computed after an order is received, plus any applicable front-end sales charges. The methodology and procedures for determining net asset value are identical for each class of shares of the Portfolio, but because the distribution expenses and other costs allocable to each class varies, the net asset value for each class likewise will vary. Net asset value fluctuates. The net asset value for shares of the Portfolio is determined by calculating the value of all securities and other assets of the Portfolio, subtracting the liabilities of the Portfolio, and dividing the remainder by the total number of shares outstanding. Expenses and fees of each class of the Portfolio, including the advisory, distribution and administrative fees, are accrued daily and taken into account for the purpose of determining the net asset value. Portfolio securities listed or traded on a securities exchange for which representative market quotations are available will be valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities which are traded in the over-the-counter market, will be valued at the mean between the last closing bid and asked prices in the market on that day, if any. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market value as determined in good faith by, or under procedures established by, the Board of Trustees. In determining fair value, the Trustees may employ an independent pricing service. Money market securities with less than sixty days remaining to maturity when acquired by the Portfolio will be valued on an amortized cost basis by the Portfolio, excluding unrealized gains or losses thereon from the valuation. This is accomplished by valuing the security at cost and then assuming a constant amortization to maturity of any premium or discount. If the Portfolio acquires a money market security with more than sixty days remaining to its maturity, it will be valued at current market until the 60th day prior to maturity, and will then be valued on an amortized cost basis based upon the value on such date unless the Trustees determine during such 60-day period that this amortized cost value does not represent fair market value. The offering price and net asset value of shares of each class of the Portfolio is determined as of the close of trading (normally 4:00 p.m., Eastern time) on the New York Stock Exchange (the "Exchange"), Monday through Friday, except on: (i) days on which there are not sufficient changes in the value of the Portfolio's portfolio securities that its net asset value might be materially affected; (ii) days during which no shares are tendered for redemption and no orders to purchase shares are received; or (iii) the following holidays when the Exchange is closed: New Year's Day, Martin Luther King Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. -9- HOW TO PURCHASE SHARES GENERAL Shares of the Portfolio are distributed through IMPACT Financial Network, Inc. ("IFNI"), the Portfolio's distributor. Shares are sold on days on which the Exchange is open. Retail Class, Wholesale Class and Institutional Class shares are sold without a sales charge at the net asset value next determined after receipt of a purchase order in proper form by the Portfolio's sub-transfer agent. Traditional Class shares are sold at the net asset value next determined, plus an initial maximum sales charge of up to 5.75% of the offering price (6.10% of the net amount invested), reduced for investments of $50,000 or more. See "Distribution Arrangements" below. The minimum initial investment for both the Retail Class and Traditional Class of the Portfolio is $1,000. The minimum initial investment in Wholesale Class shares is $10,000 and the minimum initial investment in Institutional Class shares is $250,000. Brokers that have not entered into a selling dealer's agreement with IFNI may impose their own charge on the purchase of shares. An institutional investor's minimum investment will be calculated by combining all of the accounts it maintains with the Portfolio. Accounts established through a non-affiliated bank or broker may, therefore, be subject to a smaller minimum investment. Accounts established through a qualified retirement plan and Individual Retirement Accounts ("IRAs") are not subject to the minimum investment requirement. The Portfolio reserves the right to vary the initial investment minimum and the minimum for subsequent investments at any time. Additional investments can be made in amounts of at least $100. No minimum applies to subsequent purchases effected through reinvestment of dividends and capital gains or for subsequent purchases through qualified retirement plans or IRAs. Purchases will be made in full and fractional shares of the Portfolio calculated to three decimal places. The Portfolio will not issue certificates representing shares of the Portfolio. Quarterly account statements will be sent to each shareholder. In addition, detailed confirmations of each purchase or redemption are sent to each shareholder. Annual confirmations are sent to each shareholder to report dividends paid during that period. The Portfolio reserves the right to reject any purchase request. PURCHASING BY MAIL To purchase shares by mail, complete and sign the attached Application and mail it together with a check (in the amount of at least $1,000 for an initial investment or $100 for a subsequent investment) made payable to Jordan 25 Fund: [SPECIFY SHARE CLASS] to: IMPACT MANAGEMENT PORTFOLIO c/o Fifth Third Bank, P.O. Box 632164, Cincinnati, OH 45263-2164. Payment for purchases of shares received by mail will be credited to an account at the next share price calculated for the Portfolio after receipt. Payment does not have to be converted into Federal Funds (monies credited to the Portfolio's custodian bank by a Federal Reserve Bank) before the Portfolio will accept it for investment. -10- PURCHASING BY WIRE To purchase shares by wire, contact Impact Administrative Services, Inc. ("IASI"), the Portfolio's transfer agent, at 1-800-556-5856 to obtain a shareholder account number and then wire the amount to be invested to Jordan 25 Fund: [SPECIFY SHARE CLASS] c/o Fifth Third Bank, the Portfolio's Custodian Bank, at the following address: The Fifth Third Bank ABA # 042000314 Jordan 25 Fund: Credit Account #728-62611 Account Name (your name) Account Number (your personal account number) Forward a completed Application to the Portfolio at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the Exchange and the Portfolio's custodian bank are open for business. HOW TO REDEEM SHARES The Portfolio redeems shares at net asset value as determined at the close of the day on which the Portfolio receives the redemption request. Redemption requests must be received in proper form and can be made by written request. WRITTEN REQUESTS Shares may be redeemed by sending a written request to IASI. Call toll-free at 1-800-556-5856 for specific instructions before redeeming by letter. The shareholder will be asked to provide in the request his or her name, the Portfolio name, his or her account number, and the share or dollar amount requested. SIGNATURES Shareholders requesting a redemption of $50,000 or more, a redemption of any amount to be sent to an address other than that on record with IASI, or a redemption payable other than to the shareholder of record must have signatures on written redemption requests guaranteed by: o a trust company or commercial bank whose deposits are insured by the Bank Insurance Fund, which is administered by the Federal Deposit Insurance Corporation ("FDIC"); o a member of the New York, American, Boston, Midwest, or Pacific Stock Exchange; o a savings bank or savings and loan association whose deposits are insured by the Savings Association Insurance Fund ("SAIF"), which is administered by the FDIC; or o any other "eligible guarantor institution," as defined in the Securities Exchange Act of 1934. -11- The Portfolio does not accept signatures guaranteed by a notary public. TELEPHONE REDEMPTIONS Shareholders who have so indicated on the Application, or have subsequently arranged in writing to do so, may redeem shares by instructing IASI by telephone. To arrange for redemption by wire or telephone after an account has been opened, or to change the bank or account designated to receive redemption proceeds, a written request, accompanied by a signature guarantee, must be sent to IASI at the address on the back of this prospectus. Neither the Portfolio nor any of its service contractors will be liable for any loss or expense in acting upon any telephone instructions that are reasonably believed to be genuine. In attempting to confirm that telephone instructions are genuine, the Portfolio will use such procedures as are considered reasonable, including requesting a shareholder to correctly state his or her Portfolio account number, the name in which his or her bank account is registered, his or her banking institution, bank account number and the name in which his or her bank account is registered. To the extent that the Portfolio fails to use reasonable procedures to verify the genuineness of telephone instructions, it and/or its service contractors may be liable for any such instructions that prove to be fraudulent or unauthorized. The Portfolio reserves the right to refuse a wire or telephone redemption if it is believed advisable to do so. Procedures for redeeming Portfolio shares by wire or telephone may be modified or terminated at any time by the Portfolio. The Portfolio and IASI have adopted standards for accepting signature guarantees from the above institutions. The Portfolio may elect in the future to limit eligible signature guarantors to institutions that are members of a signature guarantee program. The Portfolio and IASI reserve the right to amend these standards at any time without notice. REDEMPTION IN KIND Impact Management Investment Trust has elected to be governed by Rule 18f-1 of the Investment Company Act of 1940, under which the Trust is obligated to redeem Shares for any one shareholder in cash only up to the lesser of $250,000 or 1% of the respective class's net asset value during any 90-day period. Any redemption beyond this amount will also be in cash unless Trustees determine that payments should be in kind. In such a case, the Portfolio will pay all or a portion of the remainder of the redemption in portfolio instruments, valued in the same way as the Portfolio determines net asset value. The portfolio instruments will be selected in a manner that Trustees deem fair and equitable. Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, shareholders receiving their securities and selling them before their maturity could receive less than the redemption value of their securities and could incur certain transactions costs. -12- RECEIVING PAYMENT Normally, a check for the redemption proceeds is mailed within one business day, but in no event more than seven calendar days after the receipt of a proper written redemption request. ACCOUNTS WITH LOW BALANCES Due to the high cost of maintaining accounts with low balances, the Portfolio may redeem shares in any account and pay the proceeds to the shareholder if the balance falls below the required minimum of $1,000 due to shareholder redemptions. This procedure would not apply, however, if the balance falls below $1,000 solely because of a decline in the Portfolio's net asset value. DISTRIBUTION ARRANGEMENTS GENERAL The Portfolio offers four classes of shares: Retail Class, Traditional Class, Wholesale Class and Institutional Class. The four classes represent interests in the same portfolio of investments of the Portfolio, generally have the same rights and are identical in all respects, except for differing 12b-1 fees (none for Institutional Class), minimum investment requirements, and sales charges (imposed on Traditional Class only). Each class has exclusive voting rights with respect to its 12b-1 plan. Traditional Class ----------------- Total Sales Charge as a Percentage of ------------------------------------- Investment Amount Offering Price Net Amount Invested - ----------------- -------------- ------------------- Under $50,000 5.75% 6.10% $50,000, but less than $100,000 4.50% 4.71% $100,000, but less than $250,000 3.50% 3.63% $250,000, but less than $500,000 2.50% 2.56% $500,000, but less than $1,000,000 2.00% 2.04% $1,000,000 or more 0% 0% See "Distribution of Shares" in the Portfolio's Statement of Additional Information for more information about the purchase of Traditional Class shares. PLANS OF DISTRIBUTION The Portfolio has adopted separate plans of distribution ("Plans") pursuant to Rule 12b-1 for the Retail Class shares, Traditional Class shares and Wholesale Class shares of the Portfolio under the Investment Company Act of 1940, as amended. Pursuant to each Plan, the Portfolio may reimburse IFNI or others for expenses actually incurred by IFNI or others in the promotion and distribution of the shares of the Retail, Traditional and Wholesale Classes of the Portfolio ("distribution expense") and servicing their shareholders by providing personal services and/or maintaining shareholder accounts ("service fees"). With respect to Retail Class shares, the Portfolio reimburses IFNI and -13- others for distribution expenses and service fees at an annual rate of up to 1.00% (0.25% of which is a service fee) payable on a monthly basis, of the Portfolio's aggregate average daily net assets attributable to the Retail Class shares. With respect to Traditional Class shares, the Portfolio reimburses IFNI and others for distribution expenses at an annual rate of up to 0.25%, payable on a monthly basis, of the Portfolio's aggregate average daily net assets attributable to Traditional Class shares. With respect to Wholesale Class shares, the Portfolio reimburses IFNI and others for distribution expenses at an annual rate of up to 0.25%, payable on a monthly basis, of the Portfolio's aggregate average net assets attributable to Wholesale Class shares. Since 12b-1 fees are paid out of the Portfolio's assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS Substantially all of the net investment income and capital gains of the Portfolio is distributed at least annually. Shareholders automatically receive all dividends and capital gain distributions in additional shares at the net asset value determined on the next business day after the record date, unless the shareholder has elected to take such payment in cash. Shareholders may receive payments for cash distributions in the form of a check. Dividends and distributions of the Portfolio are paid on a per share basis. The value of each share will be reduced by the amount of the payment. If shares are purchased shortly before the record date for a dividend or distribution of capital gains, a shareholder will pay the full price for the shares and receive some portion of the price back as a taxable dividend or distribution. TAX CONSEQUENCES The Portfolio will distribute all of its net investment income (including, for this purpose, net short-term capital gain) to shareholders. Dividends from net investment income will be taxable to shareholders as ordinary income whether received in cash or in additional shares. Distributions from net investment income will qualify for the dividends-received deduction for corporate shareholders only to the extent such distributions are derived from dividends paid by domestic corporations. It can be expected that only certain dividends of the Portfolio will qualify for that deduction. Any net capital gains will be distributed annually and will be taxed to shareholders as long-term capital gains, subject to certain limitations regardless of how long the shareholder has held shares and regardless of whether the distributions are received in cash or in additional shares. The Portfolio will make annual reports to shareholders of the federal income tax status of all distributions, including the amount of dividends eligible for the dividends-received deduction. The Portfolio intends to qualify for treatment as a regulated investment company so that it will not be subject to federal income tax. If it fails to qualify for such treatment, it is required to pay such taxes. -14- Certain securities purchased by the Portfolio may be sold with original issue discount and thus would not make periodic cash interest payments. If the Portfolio acquired such securities, it would be required to include as part of its current net investment income the accrued discount on such obligations for purposes of the distribution requirement even though the portfolio has not received any interest payments on such obligations during that period. Because the Portfolio distributes all of its net investment income to its shareholders, the Portfolio may have to sell portfolio securities to distribute such accrued income, which may occur at a time when the Adviser would not have chosen to sell such securities and which may result in taxable gain or loss. Income received on direct U.S. obligations is exempt from income tax at the state level when received directly by the Portfolio and may be exempt, depending on the state, when received by a shareholder as income dividends from the Portfolio provided certain state-specific conditions are satisfied. Not all states permit such income dividends to be as exempt and some require that a certain minimum percentage of an investment company's income be derived from state tax-exempt interest. The Portfolio will inform shareholders annually of the percentage of income and distributions derived from direct U.S. obligations. You should consult your tax adviser to determine whether any portion of the income dividends received from the Portfolio is considered tax exempt in your particular state. Each sale or redemption of the Portfolio's shares is a taxable event to the shareholder. Shareholders are urged to consult their own tax advisers regarding the status of their accounts under state and local tax laws. -15- IMPACT MANAGEMENT INVESTMENT TRUST Jordan 25 Fund 333 West Vine Street, Suite 206 Lexington, KY 40507 Investment Adviser Equity Assets Management, Inc. 2155 Resort Drive, Suite 108 Steamboat Springs, CO 80487 Distributor IMPACT Financial Network, Inc. 2155 Resort Drive, Suite 108 Steamboat Springs, CO 80487 Administrator, Transfer Agent and Dividend Disbursing Agent IMPACT Administrative Services, Inc. 333 West Vine Street, Suite 206 Lexington, KY 40507 Custodian The Fifth Third Bank 38 Fountain Square Plaza Cincinnati, OH 45263 Legal Counsel Pepper Hamilton LLP 3000 Two Logan Square Philadelphia, PA 19103-7098 This prospectus contains the information you should read and know before you invest in shares of the Portfolio. Please read this prospectus carefully and keep it for future reference. The Portfolio has filed a Statement of Additional Information with the Securities and Exchange Commission. The information contained in the Statement of Additional Information is incorporated by reference into this prospectus. You may request a copy of the Statement of Additional Information, free of charge, or make inquiries about the Portfolio by contacting Impact Administrative Services, Inc., the Portfolio's administrator, by calling toll-free 1-800-556-5856. Information about the Portfolio (including the Statement of Additional Information) can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. The Public Reference Room's hours of operation may be obtained by calling 1-800-SEC-0330. Reports and other information about the Portfolio are available on the SEC's Internet site at http://www.sec.gov. Copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, Washington, D.C. 20549-6009. SEC File No. 811-8065 PROSPECTUS January ___, 2001 IMPACT MANAGEMENT INVESTMENT TRUST JORDAN 25 VARIABLE FUND SCHNEIDER LARGE CAP VARIABLE FUND Shares of the portfolios are offered only to insurance company separate accounts funding variable life insurance policies and variable annuity contracts. The U.S. Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. TABLE OF CONTENTS ----------------- PORTFOLIO SUMMARIES Investment Objectives and Strategies Principal Risks Portfolio Expenses INVESTMENT POLICIES AND RISKS Risk Factors MANAGEMENT OF THE PORTFOLIO Investment Advisers Portfolio Managers Advisory Fees Advisers' Performance Records PRICING PORTFOLIO SHARES HOW TO PURCHASE AND REDEEM SHARES DISTRIBUTION PLANS DIVIDENDS, DISTRIBUTIONS AND TAXES Dividends and Distributions Tax Consequences PORTFOLIO SUMMARIES INVESTMENT OBJECTIVES AND STRATEGIES JORDAN 25 VARIABLE FUND. The investment objective of the Jordan 25 Variable Fund (the "Jordan Portfolio") is to provide long-term capital growth. The portfolio seeks to achieve its objective by investing primarily in equity securities selected because of their potential for strong earnings growth. The portfolio will normally hold a core group of 12 to 25 common stocks of U.S. companies. The portfolio is non-diversified and may concentrate its investments in a particular industry or industries. There are no limitations on the size of companies in which the portfolio may invest, and during periods when the stock market is rising, the portfolio may invest primarily in small and mid-size U.S. companies. In addition to common stocks, the portfolio may invest in preferred stocks and put and call options on common stocks. The portfolio manager will purchase stocks that exhibit the following characteristics: o consistent above-average earnings growth o attractive risk/reward characteristics o higher forecasted growth rates than the universe of U.S. companies The portfolio manager may choose to sell a stock when: o it becomes overvalued relative to what the portfolio manager considers to be its future earnings potential o the company's earnings decelerate as a result of its growth rate declining or its industry leadership deteriorating o the portfolio manager identifies a stronger holding (which could include cash) o the portfolio manager discovers something negative about the company that invalidates the original reason for the purchase or detracts from the growth estimates o the trend of the stock market changes from positive to negative Although providing current income is not an objective of the portfolio, the portfolio may earn dividend income generated by its equity holdings and/or interest income generated by its invested cash positions. During periods of adverse market conditions, the Portfolio temporarily may hold a substantial percentage of its assets in cash or money market securities, at which time it is less likely to achieve growth of capital. SCHNEIDER LARGE CAP VARIABLE FUND. The investment objective of the Schneider Large Cap Variable Fund (the "Schneider Portfolio") is to provide maximum long-term total return consistent with reasonable risk to capital. The total return on the portfolio is expected to consist of capital appreciation and income. 1 The portfolio seeks to achieve its objective by investing on average 65% of its total assets in the equity securities of companies listed in the Russell 1000(R) Index. The Russell 1000 Index companies generally are the companies from which the Portfolio selects its portfolio securities; however, equity securities may also be selected from companies outside the Russell 1000 Index if such companies have characteristics similar to those of the Russell 1000 Index companies. The Russell 1000 Index consists of the 1000 largest U.S. companies with lower price-to-book ratios and lower forecasted growth than all companies included in the Russell 3000 Index. The Russell 3000 Index measures the performance of the 3000 largest U.S. companies based on total market capitalization. The smallest company in the Russell 1000 Index has an approximate market capitalization of $1.4 billion. The portfolio will invest in securities that exhibit the following characteristics: o have low price-to-earnings and low price-to-book value ratios o have higher dividend yields than the universe of growth stocks o have lower forecasted growth rates than the universe of growth stocks o are typically considered out of favor by the market The portfolio will sell securities when o a security becomes widely recognized by the professional investment community o a security appreciates in value to the point that it is considered to be overvalued o the portfolio's holdings should be rebalanced to include a more attractive stock or stocks o a security's earnings potential is believed to be jeopardized The portfolio seeks capital appreciation through investment in value-oriented growth securities. Income may come from dividend income generated by the portfolio's equity holdings, and/or interest income generated by the portfolio's invested cash positions. During periods of adverse market conditions, the portfolio may hold a substantial percentage of its assets in cash or money market securities, thereby seeking total return through income, without regard to capital appreciation. PRINCIPAL RISKS A portfolio's share price will fluctuate in response to market conditions, economic conditions and the financial conditions of the companies in which the portfolio invests. As with an investment in any fund, there is a risk of loss of all or part of your investment. In addition to these risks, the portfolios are subject to the following specific risks which are associated with their respective investment policies and strategies. 2 Jordan Portfolio - ---------------- o A relatively high percentage of the portfolio's assets may be invested in securities of a limited number of issuers. Consequently, the portfolio may be more sensitive to changes in the market price of its portfolio securities than a diversified fund. o The portfolio may concentrate its investments in an industry, in which case portfolio companies may share common characteristics and react similarly to market developments. As a result, the portfolio's returns could be more volatile than those of a less concentrated fund. o The stocks of small and mid-size companies historically have been more volatile in price than stocks of larger companies. o Growth-oriented investments may be more volatile than the rest of the U.S. stock market. o The portfolio may invest in put and call options on stocks which can increase the volatility of the portfolio's share price and decrease the liquidity of the portfolio's investments. Schneider Portfolio - ------------------- o Value investing involves risks because investments are made in securities that are sold at a discount to their intrinsic value. These securities are considered out-of-favor by the investment community because of their indeterminate growth potential. PORTFOLIO EXPENSES Investors using the Jordan Portfolio or the Schneider Portfolio to fund a variable annuity contract or a variable life insurance policy will pay certain fees and expenses in connection with such portfolios, which are described in the tables below. These fees and expenses are paid out of a portfolio's assets, so their effect is included in the portfolio's share price. The tables below do not reflect any fees or charges imposed by participating insurance companies under their variable annuity contracts or variable life insurance policies. Owners of variable annuity contracts or variable life insurance policies should refer to their applicable insurance company prospectus for information on those fees and charges. Fee Table for Jordan Portfolio Percentage of Average Daily Net Assets Management fees 0.60% Distribution (12b-1) fees 0.15% Other expenses(1) 0.15% - ----------------------------------------- TOTAL 0.90% 3 Fee Table for Schneider Portfolio Percentage of Average Daily Net Assets Management fees 0.60% Distribution (12b-1) fees 0.15% Other expenses(1) 0.15% - ----------------------------------------- TOTAL 0.90% (1) These expenses are based on estimated amounts for the current fiscal year. Expense Example The following examples are intended to help you compare the cost of investing in the Jordan Portfolio or the Schneider Portfolio with the cost of investing in other mutual funds. You would pay the following expenses on a $10,000 investment, assuming (1) 5% annual return, (2) redemption at the end of each time period, (3) reinvestment of all dividends and capital distribution, and (4) operating expenses remain the same. Actual expenses in the future may be greater or lesser than those shown. 1 Year 3 Years Jordan Portfolio $92 $291 Schneider Portfolio $92 $291 These examples should not be considered a representation of past or future expenses or performance. INVESTMENT POLICIES AND RISKS Jordan Portfolio - ---------------- The Jordan Portfolio will invest its assets principally in a core group of 12 to 25 common stocks of U.S. issuers. The portfolio is permitted to invest in companies of any size, from larger well-established companies to smaller emerging growth companies. It is anticipated that the portfolio will be more fully invested in small and mid-size companies during favorable market periods. The portfolio is classified as "non-diversified" because the proportion of its assets that may be invested in the securities of a single issuer is not limited by the Investment Company Act of 1940. The portfolio may concentrate its investment in a particular industry or industries. The portfolio manager seeks to identify individual companies whose value and earnings potential have not been fully recognized by the market at large as reflected in its market price. Utilizing outside research, the portfolio manager's selection process includes analyzing historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management. The portfolio manager then monitors these stocks in the marketplace utilizing proprietary technical analysis to verify that the stock is consistent with the fundamental understanding of the company. 4 The portfolio may purchase call options on securities in which it is authorized to invest in order to fix the cost of a future purchase or attempt to enhance return by, for example, participating in an anticipated increase in the value of a security. The portfolio may purchase put options to hedge against a decline in the market value of securities held in the portfolio or in an attempt to enhance return. The portfolio may sell covered call options on the securities which it owns and covered put options which give the holder of the option the right to sell the underlying security to the portfolio at the stated exercise price. The portfolio may sell covered call and put options contracts on common stocks to the extent of 25% of the value of its net assets at the time such option contracts are sold. SCHNEIDER PORTFOLIO - ------------------- The Schneider Portfolio seeks to achieve its objective by investing on average 65% of its total assets in the equity securities of the Russell 1000(R) Index (the "Index"). The Index is composed of the 1,000 largest stocks with a less-than-average growth orientation in the Russell 3000 Index, a market value weighted index of the 3,000 largest U.S. publicly traded companies. Securities in the Index tend to exhibit low price-to-book and price-to-earnings ratios, higher dividend yields and lower forecasted growth rates than the universe of growth stocks. It is anticipated that the portfolio will be more fully invested during favorable market periods and may reduce its investment in equity securities during unfavorable market periods. In pursuing a "value" investment strategy, the portfolio primarily invests in stocks with low prices in relation to their attractive earnings prospects. The adviser selects securities for the Portfolio using a fundamental method of analysis. Sources of information used in researching and selecting stocks include annual reports, prospectuses, filings with the Securities and Exchange Commission, company press releases, financial newspapers and magazines, research materials prepared by others and inspections of corporate activities. The adviser seeks to identify companies in which positive change is taking place that has not yet been fully recognized by the investing public and/or the professional investment community. Positive change can include change in management, change in the supply and demand relationships in a company's industry, forthcoming changes in response to capital expenditures necessary to expand or improve the company's business, and other changes that the adviser considers positive. The adviser sells securities when such securities become more widely recognized by the professional investment community, and have appreciated to the point that such securities are considered to be overvalued. A security may be sold and replaced by another security that presents greater potential for capital appreciation, and/or may be sold when upside earning potential is believed to be jeopardized. TEMPORARY INVESTMENTS The Jordan Portfolio and the Schneider Portfolio are each subject to the following policy relating to temporary defensive investments. 5 For temporary defensive purposes, when the adviser determines that market conditions so warrant, a portfolio may invest up to 100% of its assets in cash, cash items, and money market instruments. When following such a defensive strategy (which for the Jordan Portfolio may be as long as 24 months during a major bear market period), a portfolio will be less likely to achieve its investment objective. PORTFOLIO TURNOVER Although neither portfolio intends to invest for the purpose of seeking short-term profits, securities held will be sold whenever the adviser believes it is appropriate to do so in light of a portfolio's investment objectives, without regard to the length of time a particular security may have been held. The portfolios do not attempt to set or meet any specific portfolio turnover rate, since turnover is incidental to transactions undertaken in an attempt to achieve a portfolio's investment objective. A higher turnover rate (100% or more) increases transaction costs (i.e., brokerage commissions) and adverse tax consequences for portfolio shareholders. With frequent trading activity, a greater proportion of any dividends that you receive from a portfolio will be characterized as ordinary income, which is taxed at higher rates than long-term capital gains. It is expected that under normal market conditions, the annual turnover rate for a portfolio will not exceed 100%. The foregoing investment policies of the portfolios are non-fundamental and may be changed by the Board of Trustees without the approval of shareholders. RISK FACTORS Jordan Portfolio - ---------------- The Jordan Portfolio is managed with a view to long-term growth with a minimum ten-year investment horizon. The portfolio's net asset value will fluctuate to reflect the investment performance of the securities held by the portfolio, so that the value that a shareholder receives upon redemption may be greater or lesser than the value of such shares when purchased. Investments in common stocks in general are subject to market risks that may cause their prices to fluctuate over time. In addition, investment in the securities of small and mid-sized companies in which the portfolio may invest a majority of its assets presents risks. Such companies may be more volatile than larger companies, so there may be greater risk of a decline in the stock prices of small or mid-size companies than stocks of larger companies. As a non-diversified fund, the portfolio may invest a greater percentage of its assets in a single issuer and invest in fewer companies than a diversified fund. Consequently, a decline in the value of a single stock held by the portfolio may have a greater impact on the portfolio's share price than on the share price of a diversified fund. Because the portfolio may concentrate its investments in an industry or industries, portfolio companies may share common characteristics and react similarly to market developments. As a result, the portfolio's returns could be more volatile than those of a less concentrated fund. 6 The prices of the growth stocks owned by the portfolio are based on future expectations, and growth stocks often are more sensitive than value stocks to bad economic news or negative earnings reports. Growth stocks may underperform during periods when the market favors value stocks. Also, to the extent that the portfolio manager sells growth stocks before they reach their market peak, the portfolio may miss out on opportunities for higher performance. While options transactions can be used effectively to further the portfolio's investment objective, under certain market conditions, they can increase the volatility of the portfolio's share price, decrease the liquidity of the portfolio and make the accurate pricing of the portfolio's investments more difficult. If the portfolio manager invests in options at inappropriate times or judges market conditions incorrectly, such investments may lower the portfolio's return or result in a loss. The portfolio also could experience losses if it is unable to liquidate its options positions because of an illiquid secondary market. The portfolio must set aside liquid assets in a segregated account to cover its obligations relating to options transactions. To maintain this required cover, the portfolio may have to sell portfolio securities at disadvantageous prices. Schneider Portfolio - ------------------- The Schneider Portfolio is managed with a view to total return with a minimum ten-year investment horizon. The portfolio's net asset value will fluctuate to reflect the investment performance of the securities held by the portfolio, so that the value that a shareholder receives upon redemption may be greater or lesser than the value of such shares when purchased. Investments in common stocks in general are subject to market risks that may cause their prices to fluctuate over time. Value investing involves substantial risk because investments are made in securities that are sold at a discount to their intrinsic value. These securities are considered to be out-of-favor by the investment community because of their indeterminate growth potential. There is a risk that these securities may decline in value. MANAGEMENT OF THE PORTFOLIO INVESTMENT ADVISERS Schneider Capital Management ("Schneider Capital") is the investment adviser of the Schneider Portfolio, and Equity Assets Management, Inc. ("EAM") is the investment adviser of the Jordan Portfolio. Subject to the authority of the Board of Trustees, each adviser manages a portfolio's assets in accordance with the investment objectives and policies described above. Each adviser provides on-going research, analysis, advice and judgments regarding a portfolio's investments. The advisers also purchase and sell securities on behalf of the portfolio they manage. EAM is a registered investment adviser located at 2155 Resort Drive, Suite 108, Steamboat Springs, Colorado 80487. In addition to advising the portfolios, EAM and its affiliates provide investment advisory services to individuals, corporations, foundations, limited partnerships, and individual retirement, corporate, and group pension and profit-sharing plans. EAM and its affiliates together have discretionary management authority with respect to approximately $75 million in assets. 7 Schneider Capital, 460 East Swedesford Road, Suite 1080, Wayne, PA 19087, is a registered investment adviser founded in 1996. Schneider Capital provides discretionary investment management services primarily to institutional clients. Arnold C. Schneider, III, founder, President and Chief Investment Officer of Schneider Capital has over 17 years of investment management experience (see "Portfolio Manager" below). Mr. Schneider directs day-to-day investment activities for a number of Schneider Capital financial products, including SCM Small Cap Value Fund, approximating $1 billion in assets. PORTFOLIO MANAGERS The portfolio manager of the Jordan Portfolio is: W. Neal Jordan, President of EAM and founder and Senior Portfolio Manager of JAHI since its inception in 1972. Mr. Jordan continues to serve as Senior Portfolio Manager of JAHI and also serves as Chief Investment Officer. The portfolio manager of the Schneider Portfolio is: Arnold C. Schneider, III, CFA, founder, President and CIO of Schneider Capital Management since its inception in 1996. Mr. Schneider is also a Portfolio Manager with Schneider Capital. From 1982 through 1996, Mr. Schneider was employed with Wellington Management Company (1983-1991 as a securities analyst; 1991 to 1996 as Senior Vice President and portfolio manager). Mr. Schneider was made a partner at Wellington in 1991. Mr. Schneider managed the Compass Equity Income Fund from 1993-1995 and the Mentor Income Growth Fund from 1993-1996. ADVISORY FEES Under an investment advisory contract between Schneider Capital and the Trust, the Schneider Portfolio pays Schneider Capital an advisory fee which on an annual basis equals 0.60% of the portfolio's average daily net assets. Pursuant to a separate investment advisory contract between EAM and the Trust, the Jordan Portfolio pays EAM an advisory fee which on an annual basis equals 0.60% of the portfolio's average daily net assets. ADVISERS' PERFORMANCE RECORDS Shown below is performance information for a composite of private accounts (the "Accounts")managed by W. Neal Jordan who manages the Jordan Portfolio. The performance data for the Accounts is net of all fees and expenses. The additional expenses of the Jordan Portfolio would have lowered the performance results. The Accounts are managed with the same investment objective and are subject to substantially identical investment policies and technique as those used by the Jordan Portfolio. The results presented are not intended to predict or suggest the return to be experienced by the Jordan Portfolio or the return that an individual investor might achieve by investing in the Jordan Portfolio. The Jordan Portfolio's results may be different from the composite of Accounts because of, among other things, differences in fees and expenses and because private accounts are not subject 8 to certain investment limitations, diversification requirements and other restrictions imposed by the Investment Company Act of 1940 and the Internal Revenue Code, which if applicable, may have adversely affected the performance of the Accounts. Past performance results of the Accounts are not indicative of the Jordan Portfolio's future performance. Total Return of Accounts
============================================================================================================ 1 Year 3 Years 5 Years 10 Years Ended Ended Ended Ended Average Annual Return for the Periods Specified: 12/31/00 12/31/00 12/31/00 12/31/00 ---------- ---------- ---------- ---------- The Accounts (net of expenses).................. S&P 500 Index................................... ============================================================================================================
Please read the following important notes concerning the Accounts: 1. The results for the Accounts reflect both income and capital appreciation or depreciation (total return). Dividends are accounted for on a cash basis; other items of income are accounted for on an accrual basis. Returns are time-weighted and represent the dollar-weighted average of the Accounts. Return figures are net of applicable fees and expenses (other than separate custody fees). 2. The S&P 500 Index consists of 500 stocks chosen by Standard & Poor's for market size, liquidity and industry group representation. It is a market-value weighted unmanaged index (stock price times number of shares outstanding), with each stock's weight in the S&P 500 Index proportionate to its market value. The table below shows relevant performance data for the Schneider Large Cap Composite compared to a relevant broad-based securities market index. Schneider Large Cap Composite is a composite of private accounts that are managed by Schneider Capital with an investment objective and strategy that is similar to that of the Schneider Portfolio. The performance data are not intended to predict or suggest the return to be experienced by the Schneider Portfolio or the return you might achieve by investing in the Schneider Portfolio. You should not rely on the following performance data as an indication of future performance of the investment adviser or of Schneider Portfolio. The Schneider Portfolio's results may be different from the Schneider Large Cap Composite because of, among other things, differences in fees and expenses and because private accounts are not subject to certain limitations, diversification requirements and other restrictions imposed by the Investment Company Act of 1940 and the Internal Revenue Code, which, if applicable, may have adversely affected the performance of the Composite. The table shows you how the Schneider Large Cap Composite performed for the period 5/31/99 to 12/31/00 and the calendar year ended 12/31/2000. The table compares the Schneider Large Cap Composite's performance over time to that of the Russell 1000 Index, a widely recognized, unmanaged index of stock performance. The table assumes reinvestment of dividends and distributions. 9 Average Annual Return 1 Year Period from for the Periods Specified Ended 5/31/99 to 12/31/00 12/31/00 -------- -------- Schneider Large Cap Composite (net of expenses) _____% _____% Russell 1000 Index _____% _____% PRICING PORTFOLIO SHARES Each portfolio ordinarily effects orders to purchase and redeem shares at the portfolio's next computed net asset value after it receives an order. Net asset value fluctuates. The net asset value for shares of each portfolio is determined by calculating the value of all securities and other assets of the portfolio, subtracting the liabilities of the portfolio, and dividing the remainder by the total number of shares outstanding. Expenses and fees of each class of the portfolio, including the advisory fees, are accrued daily and taken into account for the purpose of determining the net asset value. Portfolio securities listed or traded on a securities exchange for which representative market quotations are available will be valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities which are traded in the over-the-counter market, will be valued at the mean between the last closing bid and asked prices in the market on that day, if any. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market value as determined in good faith by, or under procedures established by, the Board of Trustees. In determining fair value, the Trustees may employ an independent pricing service. Money market securities with less than sixty days remaining to maturity when acquired by a portfolio will be valued on an amortized cost basis by such portfolio, excluding unrealized gains or losses thereon from the valuation. This is accomplished by valuing the security at cost and then assuming a constant amortization to maturity of any premium or discount. If a portfolio acquires a money market security with more than sixty days remaining to its maturity, it will be valued at current market until the 60th day prior to maturity, and will then be valued on an amortized cost basis based upon the value on such date unless the Trustees determine during such 60-day period that this amortized cost value does not represent fair market value. The net asset value of shares of each portfolio is determined as of the close of trading (normally 4:00 p.m., Eastern time) on the New York Stock Exchange (the "Exchange"), Monday through Friday, except on: (i) days on which there are not sufficient changes in the value of a portfolio's portfolio securities that its net asset value might be materially affected; (ii) days during which no shares are tendered for redemption and no orders to purchase shares are received; or (iii) the following holidays when the Exchange is closed: New Year's Day, Martin Luther King Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. HOW TO PURCHASE AND REDEEM SHARES To invest in a portfolio, please see the prospectus of the insurance company's separate account which offers variable life insurance policies and 10 variable annuity contracts to investors. Insurance companies participating in each portfolio serve as the portfolio's designee for receiving orders of separate accounts that invest in the portfolio. Each portfolio currently offers shares only to insurance company separate accounts. The portfolios reserve the right to offer shares to pension and retirement plans that qualify for special federal income tax treatment. The Board of Trustees monitors for possible conflicts among separate accounts (and will do so for plans) buying shares of the portfolios. A portfolio's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a separate account (or plan) withdrawing because of a conflict. DISTRIBUTION PLANS The portfolios each have adopted separate plans of distribution ("Plans") pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended. Pursuant to the Plans, a portfolio may reimburse IFNI or others for expenses actually incurred by IFNI or others in the promotion and distribution of the shares of the portfolio ("distribution expense"). A portfolio may reimburse IFNI and others for distribution expenses and service fees at an annual rate of up to 0.25% of the portfolio's aggregate average daily net assets. Since 12b-1 fees are paid out of a portfolio's assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS Substantially all of the net investment income and capital gains of each portfolio is distributed at least annually. At the election of participating life insurance companies, all dividends and capital gain distributions are reinvested at the net asset value determined on the next business day after the record date. Dividends and distributions of a portfolio are paid on a per share basis. The value of each share will be reduced by the amount of the payment. If shares are purchased shortly before the record date for a dividend or distribution of capital gains, a shareholder will pay the full price for the shares and receive some portion of the price back as a taxable dividend or distribution. TAX CONSEQUENCES The tax status of your investment depends upon the features of your variable life insurance policy or variably annuity contract. For information concerning federal income tax consequences of your investments, please consult the applicable prospectus of the insurance company separate account or your tax adviser. Participating insurance companies should consult their tax advisers about federal, state and local tax consequences. 11 IMPACT MANAGEMENT INVESTMENT TRUST Jordan 25 Variable Fund Schneider Large Cap Variable Fund 333 West Vine Street, Suite 206 Lexington, KY 40507 Investment Advisers Equity Assets Management, Inc. 2155 Resort Drive, Suite 108 Steamboat Springs, CO 80487 Schneider Capital Management 460 East Swedesford Road Suite 1080 Wayne, PA 19087 Administrator, Transfer Agent and Dividend Disbursing Agent IMPACT Administrative Services, Inc. 333 West Vine Street, Suite 206 Lexington, KY 40507 Custodian The Fifth Third Bank 38 Fountain Square Plaza Cincinnati, OH 45263 Legal Counsel Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-7098 This prospectus is intended for use in connection with a variable life insurance policy or variable annuity contract. Please read this prospectus carefully and keep it for future reference. The portfolios have filed a Statement of Additional Information with the Securities and Exchange Commission. The information contained in the Statement of Additional Information is incorporated by reference into this prospectus. You may request a copy of the Statement of Additional Information, free of charge, or make inquiries about the portfolios by contacting IMPACT Administrative Services, Inc., the portfolios' administrator, or by calling toll-free 1-800-556-5856. Information about the portfolios (including the Statement of Additional Information) can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. The Public Reference Room's hours of operation may be obtained by calling 1-202-942-8090. Reports and other information about the portfolios are available on the SEC's Internet site at http://www.sec.gov. Copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following E-mail address: pubicinfo@sec.gov, or by writing the Public Reference Section of the SEC, Washington, D.C. 20549-0102. SEC File No. 811-8065 12 IMPACT MANAGEMENT INVESTMENT TRUST Jordan 25 Fund Retail Class Shares Traditional Class Shares Wholesale Class Shares Institutional Class Shares STATEMENT OF ADDITIONAL INFORMATION January __, 2001 This Statement of Additional Information is not a prospectus, but supplements and should be read in conjunction with the prospectus for Jordan 25 Fund dated January __, 2001. To receive a copy of the prospectus, call toll-free, at 1-800-556-5856. Retain this Statement of Additional Information for future reference. TABLE OF CONTENTS ----------------- Page ---- INFORMATION ABOUT THE TRUST................................................. INVESTMENT STRATEGIES, POLICIES AND RISKS................................... Restricted and Illiquid Securities................................. Temporary Investments.............................................. Money Market Instruments........................................... U.S. Government Obligations........................................ When-issued and Delayed Delivery Transactions...................... Repurchase Agreements.............................................. Options Transactions............................................... Securities of Other Investment Companies........................... Portfolio Turnover................................................. INVESTMENT LIMITATIONS...................................................... Investing In Real Estate........................................... Buying On Margin................................................... Selling Short...................................................... Issuing Senior Securities And Borrowing Money...................... Lending Cash Or Securities......................................... Underwriting....................................................... Commodities or Commodity Contracts................................. MANAGEMENT OF THE PORTFOLIO................................................. TRUST OWNERSHIP............................................................. INVESTMENT ADVISORY SERVICES................................................ DISTRIBUTION OF SHARES...................................................... CODE OF ETHICS.............................................................. ADMINISTRATIVE SERVICES, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT................................................... Custodian.......................................................... Independent Auditors............................................... BROKERAGE TRANSACTIONS...................................................... -1- SHARES OF BENEFICIAL INTEREST............................................... General Information................................................ Voting Rights...................................................... Massachusetts Partnership Law...................................... PURCHASING SHARES........................................................... REDEEMING SHARES............................................................ TAX STATUS.................................................................. PERFORMANCE INFORMATION..................................................... Performance Comparisons............................................ INFORMATION ABOUT THE TRUST Jordan 25 Fund (the "Portfolio") is a non-diversified portfolio of Impact Management Investment Trust ("IMIT"). IMIT was established as a Massachusetts business trust under a Declaration of Trust dated December 18, 1996. IMIT is an open-end management investment company. As of the date of this Statement of Additional Information, IMIT consists of four series, the Impact Total Return Portfolio, Impact Total Return Variable Portfolio, Jordan 25 Fund and Jordan 25 Variable Fund. INVESTMENT STRATEGIES, POLICIES AND RISKS RESTRICTED AND ILLIQUID SECURITIES. The Portfolio expects that any restricted securities acquired would be either from institutional investors who originally acquired the securities in private placements or directly from the issuers of the securities in private placements. Restricted securities and other securities that are not readily marketable may sell at a discount from the price they would bring if freely marketable. The Portfolio will not invest more than 15% of the value of its net assets in illiquid securities, including repurchase agreements providing for settlement in more than seven days after notice, and certain restricted securities not determined by Trustees to be liquid. TEMPORARY INVESTMENTS. The Portfolio may invest in the following temporary investments for defensive purposes: Money Market Instruments - ------------------------ The Portfolio may invest in the following money market instruments: o instruments of domestic and foreign banks and savings and loans if they have capital, surplus, and undivided profits of over $100,000,000, or if the principal amount of the instrument is insured in full by the Bank Insurance Fund, which is administered by the Federal Deposit Insurance Corporation ("FDIC"), or the Savings Association Insurance Fund, which is administered by the FDIC; and o prime commercial paper (rated A-1 by Standard and Poor's Ratings Group, Prime-1 by Moody's Investors Service, Inc., or F-1 by Fitch Investors Service, Inc.). -2- U.S. Government Obligations - --------------------------- The types of U.S. government obligations in which the Portfolio may invest generally include direct obligations of the U.S. Treasury (such as U.S. Treasury bills, notes, and bonds) and obligations issued or guaranteed by U.S. government agencies or instrumentalities. These securities are backed by: o the full faith and credit of the U.S. Treasury; o the issuer's right to borrow from the U.S. Treasury; o the discretionary authority of the U.S. government to purchase certain obligations of agencies or instrumentalities; or o the credit of the agency or instrumentality issuing the obligations. Examples of agencies and instrumentalities which may not always receive financial support from the U.S. government are: o Federal Farm Credit Banks; o Federal Home Loan Banks; o Federal National Mortgage Association; o Student Loan Marketing Association; and o Federal Home Loan Mortgage Corporation. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Portfolio may purchase and sell securities on a "when issued" or "delayed delivery" basis. "When-issued" refers to securities whose terms and indenture are available, and for which a market exists, but which are not available for immediate delivery. When-issued transactions may be expected to occur a month or more before delivery is due. Delayed delivery is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it receives payment or delivery from the other party to any of the above transactions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securities that fit with its investment objectives at attractive prices - not to increase its investment leverage. The Portfolio does not intend to engage in when-issued and delayed delivery transactions to an extent that would cause the segregation of more than 20% of the total value of its assets. -3- REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' acceptances and other securities outlined above under "Temporary Investments." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Portfolio's management acknowledges these risks, it is expected that they can be controlled through stringent security selection criteria and careful monitoring procedures. The Portfolio will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are found by the Portfolio's investment adviser to be creditworthy pursuant to guidelines established by the Board of Trustees (the "Trustees"). OPTIONS TRANSACTIONS. The Portfolio may purchase call options on securities that the adviser intends to include in the Portfolio in order to fix the cost of a future purchase or attempt to enhance return by, for example, participating in an anticipated increase in the value of a security. The Portfolio may purchase put options to hedge against a decline in the market value of securities held in the Portfolio or in an attempt to enhance return. The Portfolio may write (sell) put and covered call options on securities in which it is authorized to invest. Certain special characteristics of and risks associated with using these strategies are discussed below. Use of options contracts is subject to applicable regulations and/or interpretations of the SEC and the several options and futures exchanges upon which these instruments may be traded. COVER REQUIREMENTS The Portfolio will not use leverage in its options strategies. Accordingly, the Portfolio will comply with guidelines established by the SEC with respect to coverage of these strategies by either (1) setting aside cash or liquid, unencumbered, daily marked-to-market securities in one or more segregated accounts with the custodian in the prescribed amount; or (2) holding securities or other options contracts whose values are expected to offset ("cover") their obligations thereunder. Securities, currencies, or other options contracts used for cover cannot be sold or closed out while these strategies are outstanding, unless they are replaced with similar assets. As a result, there is a possibility that the use of cover involving a large percentage of the Portfolio's assets could impede portfolio management, or the Portfolio's ability to meet redemption requests or other current obligations. OPTIONS STRATEGIES. The Portfolio may purchase and write (sell) only those options on securities and securities indices that are traded on U.S. exchanges. Exchange-traded options in the U.S. are issued by a clearing organization affiliated with the exchange, on which the option is listed, which, in effect, guarantees completion of every exchange-traded option transaction. -4- The Portfolio may purchase call options on securities in which it is authorized to invest in order to fix the cost of a future purchase. Call options also may be used as a means of enhancing returns by, for example, participating in an anticipated price increase of a security. In the event of a decline in the price of the underlying security, use of this strategy would serve to limit the potential loss to the Portfolio to the option premium paid; conversely, if the market price of the underlying security increases above the exercise price and the Portfolio either sells or exercises the option, any profit eventually realized would be reduced by the premium paid. The Portfolio may purchase put options on securities that it holds in order to hedge against a decline in the market value of the securities held or to enhance return. The put option enables the Portfolio to sell the underlying security at the predetermined exercise price; thus, the potential for loss to the Portfolio below the exercise price is limited to the option premium paid. If the market price of the underlying security is higher than the exercise price of the put option, any profit the Portfolio realizes on the sale of the security is reduced by the premium paid for the put option less any amount for which the put option may be sold. The Portfolio may on certain occasions wish to hedge against a decline in the market value of securities that it holds at a time when put options on those particular securities are not available for purchase. At those times, the Portfolio may purchase a put option on other carefully selected securities in which it is authorized to invest, the values of which historically have a high degree of positive correlation to the value of the securities actually held. If the adviser's judgment is correct, changes in the value of the put options should generally offset changes in the value of the securities being hedged. However, the correlation between the two values may not be as close in these transactions as in transactions in which a the Portfolio purchases a put option on a security that it holds. If the value of the securities underlying the put option falls below the value of the portfolio securities, the put option may not provide complete protection against a decline in the value of the portfolio securities. The Portfolio may write covered call options on securities in which it is authorized to invest for hedging purposes or to increase return in the form of premiums received from the purchasers of the options. A call option gives the purchaser of the option the right to buy, and the writer (seller) the obligation to sell, the underlying security at the exercise price during the option period. The strategy may be used to provide limited protection against a decrease in the market price of the security, in an amount equal to the premium received for writing the call option less any transaction costs. Thus, if the market price of the underlying security held by the Portfolio declines, the amount of the decline will be offset wholly or in part by the amount of the premium received by the Portfolio. If, however, there is an increase in the market price of the underlying security and the option is exercised, the Portfolio will be obligated to sell the security at less than its market value. The Portfolio may also write covered put options on securities in which it is authorized to invest. A put option gives the purchaser of the option the right to sell, and the writer (seller) the obligation to buy, the underlying security at the exercise price during the option period. So long as the obligation of the writer continues, the writer may be assigned an exercise -5- notice by the broker-dealer through whom such option was sold, requiring it to make payment of the exercise price against delivery of the underlying security. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options. If the put option is not exercised, the Portfolio will realize income in the amount of the premium received. This technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying securities would decline below the exercise price less the premiums received, in which case the Portfolio would expect to suffer a loss. OPTIONS GUIDELINES. In view of the risks involved in using the options strategies described above, the Portfolio has adopted the following investment guidelines to govern its use of such strategies; these guidelines may be modified by the Board of Trustees without shareholder approval: (1) the Portfolio will write only covered options, and each such option will remain covered so long as the Series is obligated thereby; and (2) the Portfolio will not write options if aggregate exercise prices of previous written outstanding options, together with the value of assets used to cover all outstanding positions, would exceed 25% of its total net assets. RISKS OF OPTIONS TRADING. The Portfolio may effectively terminate its right or obligation under an option by entering into a closing transaction. If the Portfolio wishes to terminate its obligation to purchase or sell securities under a put or a call option it has written, the Portfolio may purchase a put or a call option of the same Portfolio (that is, an option identical in its terms to the option previously written). This is known as a closing purchase transaction. Conversely, in order to terminate its right to purchase or sell specified securities under a call or put option it has purchased, the Portfolio may sell an option of the same series as the option held. This is known as a closing sale transaction. Closing transactions essentially permit the Portfolio to realize profits or limit losses on its options positions prior to the exercise or expiration of the option. If a Portfolio is unable to effect a closing purchase transaction with respect to options it has acquired, the Portfolio will have to allow the options to expire without recovering all or a portion of the option premiums paid. If a Portfolio is unable to effect a closing purchase transaction with respect to covered options it has written, the Portfolio will not be able to sell the underlying securities or dispose of assets used as cover until the options expire or are exercised, and the Portfolio may experience material losses due to losses on the option transaction itself and in the covering securities. In considering the use of options to enhance returns or for hedging purposes, particular note should be taken of the following: -6- (1) The value of an option position will reflect, among other things, the current market price of the underlying security, the time remaining until expiration, the relationship of the exercise price to the market price, the historical price volatility of the underlying security, and general market conditions. For this reason, the successful use of options depends upon the adviser's ability to forecast the direction of price fluctuations in the underlying securities markets. (2) Options normally have expiration dates of up to three years. An American style put or call option may be exercised at any time during the option period while a European style put or call option may be exercised only upon expiration or during a fixed period prior to expiration. The exercise price of the options may be below, equal to or above the current market value of the underlying security or index. Purchased options that expire unexercised have no value. Unless an option purchased by the Portfolio is exercised or unless a closing transaction is effected with respect to that position, the Portfolio will realize a loss in the amount of the premium paid and any transaction costs. (3) A position in an exchange-listed option may be closed out only on an exchange that provides a secondary market for identical options. Although the Portfolio intends to purchase or write only those exchange-traded options for which there appears to be a liquid secondary market, there is no assurance that a liquid secondary market will exist for any particular option at any particular time. A liquid market may be absent if: (i) there is insufficient trading interest in the option; (ii) the exchange has imposed restrictions on trading, such as trading halts, trading suspensions or daily price limits; (iii) normal exchange operations have been disrupted; or (iv) the exchange has inadequate facilities to handle current trading volume. (4) The Portfolio's activities in the options markets may result in a higher Portfolio turnover rate and additional brokerage costs; however, the Portfolio also may save on commissions by using options as a hedge rather than buying or selling individual securities in anticipation of, or as a result of, market movements. SECURITIES OF OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10% of its assets in securities of other investment companies. Since all investment companies incur certain operating expenses, such as management fees and accounting fees, similar to the expenses of the Portfolio, any investment by the Portfolio in shares of another investment company would involve duplication of such expenses. PORTFOLIO TURNOVER. Although the Portfolio does not intend to invest for the purpose of seeking short-term profits, securities in its portfolio will be sold whenever the adviser believe it is appropriate to do so in light of the Portfolio's investment objective, without regard to the length of time a particular security may have been held. The Portfolio will not attempt to set or meet a portfolio turnover rate since any turnover would be incidental to transactions undertaken in an attempt to achieve the Portfolio's investment objective. -7- INVESTMENT LIMITATIONS The investment objectives of the Portfolio and certain investment limitations set forth herein are fundamental policies of the Portfolio. The Portfolio's fundamental limitations cannot be changed without the consent of the holders of a majority of the Portfolio's outstanding shares. The following limitations are fundamental policies of the Portfolio. INVESTING IN REAL ESTATE - ------------------------ The Portfolio will not purchase or sell real estate, although it may invest in the securities of companies whose business involves the purchase or sale of real estate, or in securities which are secured by real estate or interests in real estate. BUYING ON MARGIN - ---------------- The Portfolio will not purchase any securities on margin but may obtain such short-term credits as may be necessary for the clearance of transactions. SELLING SHORT - ------------- The Portfolio will not sell securities short. ISSUING SENIOR SECURITIES AND BORROWING MONEY - --------------------------------------------- The Portfolio will not issue senior securities, except as permitted by its investment objective and policies, and except that the Portfolio may borrow money only in amounts up to one-third of the value of its net assets, including the amounts borrowed. Any such borrowings shall be from banks. The Portfolio will borrow money only as a temporary, extraordinary, or emergency measure, to facilitate management of the portfolio by enabling the Portfolio to meet redemption requests where the liquidation of portfolio securities is deemed to be inconvenient or disadvantageous. The Portfolio will not purchase any securities while any such borrowings are outstanding. LENDING CASH OR SECURITIES - -------------------------- The Portfolio may not lend any of its assets except portfolio securities; however, it is not anticipated that the Portfolio will lend its portfolio securities. -8- UNDERWRITING - ------------ The Portfolio will not underwrite any issue of securities, except as it may be deemed to be an underwriter under the Securities Act of 1933 in connection with the sale of securities in accordance with its investment objective, policies, and limitations. COMMODITIES OR COMMODITY CONTRACTS - ---------------------------------- The Portfolio will not purchase or sell any commodities, or commodities contracts, including futures. For purposes of its policies and limitations, the Portfolio considers certificates of deposit and demand and time deposits issued by a U.S. branch of a domestic bank or savings and loan having capital, surplus, and undivided profits in excess of $100,000,000 at the time of investment to be "cash items." Except with respect to borrowing money, if a percentage limitation is adhered to at the time of investment, a later increase or decrease in percentage resulting from any change in value or net assets will not result in a violation of such restriction. The Portfolio has no present intent to borrow money in excess of 5% of the value of its total assets. MANAGEMENT OF THE PORTFOLIO IMIT and the Portfolio are managed by a Board of Trustees. The Trustees appoint officers to the Portfolio, and oversee the management and operations of the Portfolio. Officers and Trustees are listed with their addresses, birth dates, present positions with IMIT, and principal occupations. Name: Charles R. Clark* Birthdate: November 16, 1959 Address: 333 West Vine Street, Suite 206 Lexington, KY 40507 Position with Portfolio Chairman of the Board of Trustees Occupation: Chief Market Analyst of Jordan American Holdings, Inc. and Vice President of Equity Assets Management, Inc. since 1993. Vice-President of IMPACT Financial Network, Inc. since 1993. Name: A.J. Elko* Birthdate: September 4, 1963 Address: 333 West Vine Street, Suite 206 Lexington, KY 40507 -9- Position with Portfolio: President, Treasurer and Secretary Occupation: Chief Operating Officer and Chief Financial Officer of Jordan American Holdings, Inc. since 1999. Vice President of Equity Asset Management, Inc., IMPACT Financial Network, Inc. and Impact Administrative Services, Inc. since 1999. Chief Operating Manager and founder of A.J. Elko & Associates, LLC, (a tax planning and tax preparation services company) since 1995. President and co-founder of Tummino Construction, Inc. (a general contractor) since 1996. Name: Oleen Eagle Birthdate: September 28, 1930 Address: 3215 Chestnut Street Murrysville, PA 15668 Position with Portfolio: Trustee Occupation: President of Cornerstone TeleVision since 1987, Vice President and General Manager of Cornerstone TeleVision, 1976-1987, President and Director of Group C (a for profit subsidiary of Cornerstone TeleVision) since 1991, Vice President and Director of Christian Advance International (a nonprofit Christian missionary organization) since 1985. Name: Gerald L. Bowyer Birthdate: August 31, 1962 Address: 820 Pine Hollow Road McKees Rocks, PA 15136 Position with Portfolio: Trustee Occupation: President, Allegheny Institute (a non-partisan research and educational institute) since 1994; host of "Focus on the Issues," a syndicated public affairs television program originating on WPCB, Cornerstone TeleVision. Name: Steven J. Fellin* Birth date: April 1, 1965 Address: 460 E. Swedesford Rd, Suite 1080 Wayne, PA 19087 Position with Portfolio: Trustee Occupation: Vice President and Chief Financial Officer of Schneider Capital Management since 1998. Assistant Vice President of Schneider Capital Management since 1997. From July 1995 through October of 1997, he was a Senior Manager of Fund Accounting and Administration at SEI Investments. * An "interested person" of IMIT, as defined in the Investment Company Act of 1940, as amended. Trustees who are not interested persons of IMIT or the adviser receive compensation of $500 per meeting attended. For the fiscal year ended September 30, 2000, the non-interested trustees of IMIT received the following compensation: -10- Independent Compensation Total Compensation Trustee from IMIT from IMIT - ------- --------- --------- Oleen Eagle $2,000 $2,000 Gerald L. Bowyer $2,000 $2,000 TRUST OWNERSHIP As of September 15, 2000, officers and Trustees of IMIT owned individually and together less than 1% of IMIT's outstanding Shares. INVESTMENT ADVISORY SERVICES The Portfolio's adviser is Equity Assets Management, Inc. ("EAM"), a wholly-owned subsidiary of Jordan American Holdings, Inc. W. Neal Jordan is considered to be a control person of the adviser because he owns more than 25% of the voting stock of Jordan American Holdings, Inc. Mr. Jordan is the President, Senior Portfolio Manager and Chief Investment Officer of EAM, Inc. The Portfolio's principal distributor, IMPACT Financial Network, Inc., is an affiliate of EAM. Advisory Fee - ------------ Each class of shares of the Portfolio pays its respective pro rata portion of the advisory fee which is paid monthly by the Portfolio. For its services, EAM is paid an annual base fee equal to 1.20% of the Portfolio's average daily net assets. Before the fee based on the asset charge is paid, it is adjusted monthly for investment performance. The adjustment will be calculated using the percentage point difference between the change in the net asset value of one Traditional Class share of the Portfolio and the change in the Lipper Growth Index ("Index"). The performance of one Traditional Class share of the Portfolio is measured by computing the percentage difference between the opening and closing net asset value of one share of the Portfolio, as of the last business day of the period selected for comparison, adjusted for dividend or capital gain distributions, which are treated as reinvested at the end of the month during which the distribution was made. The performance of the Index for the same period is established by measuring the percentage difference between the beginning and ending Index for the comparison period. The Index performance is adjusted for dividend or capital gain distributions (on the securities which comprise the Index), which are treated as reinvested at the end of the month during which the distribution was made. One percentage point will be subtracted from the percentage point difference in performance to help assure that the performance adjustment is attributable to EAM's management abilities rather than random fluctuations. The result is multiplied by 0.01, then multiplied by the Portfolio's average net assets for the comparison period. This product next shall be divided by the number of months in the comparison period to determine the monthly performance adjustment. -11- Where the Portfolio's share performance exceeds that of the Index, the base fee will be increased by the adjustment amount determined in the preceding paragraph. Where the performance of the Index exceeds the performance of the Portfolio's Traditional Class shares, the base fee will be decreased by the amount of the performance adjustment. The maximum annual advisory fee that the Portfolio will pay will be 1.90% of average daily net assets and the minimum annual advisory fee will be 0.50% (unless the adviser voluntarily agrees to waive its fee). The 12-month comparison period rolls over with each succeeding month, so that it always equals 12 months, ending with the month for which the performance adjustment is being computed. DISTRIBUTION OF SHARES IMPACT Financial Network, Inc. ("IFNI") is the principal distributor of shares of IMIT. IFNI is located at 2155 Resort Drive, Suite 108 Steamboat Springs, CO 80487. IFNI is a Florida corporation, and is an affiliate of EAM. IFNI does not receive any fee or other compensation except as described under "Distribution Plan" below, and "Brokerage Transactions" herein. DISTRIBUTION OF TRADITIONAL CLASS SHARES - ---------------------------------------- Traditional Class shares of the Portfolio are sold with a front-end sales charge. This sales charge is discussed in the Portfolio's prospectus. The amount of sales charge reallowed to dealers, as a percentage of the offering price of Traditional Class shares, is as follows: Amount of Purchase Amount Paid to Dealers - -------------------- ---------------------- Under $50,000 5.00% $50,000, but less than $100,000 3.75% $100,000, but less than $250,000 2.75% $250,000, but less than $500,000 2.00% $500,000, but less than $1,000,000 1.60% A commission will be paid to authorized dealers who initiate and are responsible for purchases of $1 million or more of Traditional Class shares during the first 12 months of operation of the Traditional Class. IFNI will pay the dealer concession to those selected dealers who have entered into an agreement with IFNI. The dealer's concession may be changed from time to time. Further, IFNI may from time to time offer incentive compensation to dealers who sell Portfolio shares subject to sales charges, allowing such dealers to retain an additional portion of the sales charge. On some occasions, such cash or incentives will be conditioned upon the sale of a specified minimum dollar amount of the Portfolio shares during a specified period of time. A dealer who receives all or substantially all of the sales charge may be considered an "underwriter" under federal securities laws. All such sales charges are paid to the securities dealer involved in the trade, if any. No sales charge will be assessed on the reinvestment of dividends or distributions. -12- DISTRIBUTION PLANS - ------------------- The Portfolio has adopted Rule 12b-1 Plans (the "Plans"), for the Retail, Traditional and Wholesale Classes of its shares. The Plans provide that IFNI, as distributor, is entitled to a reimbursement each month for the actual expenses incurred in the distribution and promotion of the Portfolio's shares, including but not limited to, printing of prospectuses and reports used for sales purposes, preparation and printing of sales literature and related expenses, advertisements, and other distribution-related expenses as well as any distribution or service fees paid to securities dealers or others who have executed a dealer agreement with IFNI. Any expense of distribution in excess of the 12b-1 fees under the Plans will be borne by the adviser without any reimbursement or payment by the Portfolio. The Plans also provides that to the extent that the Portfolio, the adviser, IFNI or other parties on behalf of the Portfolio, the adviser or IFNI makes payments that are deemed to be payments for the financing of any activity primarily intended to result in the sale of shares issued by the Portfolio within the context of Rule 12b-1, such payments shall be deemed to be made pursuant to the applicable Plan. In no event shall the payments made under the Plans, plus any other payments deemed to be made pursuant to the Plan, exceed the amount permitted to be paid pursuant to the Conduct Rule 2830 of the National Association of Securities Dealers, Inc. Other expenses of distribution and marketing in excess of the maximum amounts permitted by the Plans per annum will be borne by IFNI, and any amounts paid for the above services will be paid pursuant to a servicing or other agreement. The Plans were approved by the Board, including a majority of the Trustees who are not "interested persons" of IMIT as defined in the 1940 Act (and each of whom has no direct or indirect financial interest in the Plans or any agreement related thereto, referred to herein as the ("12b-1 Trustees"). The Board determined that a Plan may be of benefit to the relevant class of the Portfolio, to the shareholders of such class, and to the Trust by helping the Portfolio and its classes facilitate sales of shares to increase the assets in the Portfolio, and, therefore, to achieve economies of scale. The Plans may be terminated at any time by the vote of the Board or the 12b-1 Trustees, or by the vote of a majority of the outstanding applicable class of shares of the Portfolio. IFNI, the Portfolio's distributor has a financial interest in the operation of the Plans. Charles R. Clark, Trustee of IMIT, and Vice President of IFNI, has a direct financial interest in the operation of the Plans. CODES OF ETHICS IMIT, the investment adviser and distributor each have adopted a code of ethics under Rule 17j-1 of the Investment Company Act. These codes permit personnel to invest in securities, including securities that may be purchased or sold by the Portfolio, subject to preclearance by IMIT's Compliance Officer and certain other conditions. -13- ADMINISTRATIVE SERVICES, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT IMPACT Administrative Services, Inc., ("IASI"), 333 West Vine Street, Suite 206, Lexington, Kentucky, 40507, is responsible for performing and overseeing administrative, transfer agent, dividend disbursing and fund accounting services on behalf of the Portfolio. The fee paid to IASI for services is 0.35% of the Portfolio's average net assets. In addition to the above, shareholders pay the transfer agent a fee in the amount of $2.00 per closed account. Closed accounts will remain in the shareholder files until all Forms 1099 and 5498 have been sent to shareholders and reported (via magnetic media) to the Internal Revenue Service. CUSTODIAN - --------- The custodian for the securities and cash of IMIT and the Portfolio is Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, OH 45263. The custodian's fee is paid by IASI from its administrative services fee. INDEPENDENT AUDITORS - -------------------- Spicer, Jeffries & Co. serves as the independent auditor for the Portfolio. The auditor's fees are paid by IASI from the administrative services fee. BROKERAGE TRANSACTIONS The adviser, when effecting the purchases and sales of portfolio securities for the account of the Portfolio, will seek execution of trades either (i) at the most favorable and competitive rate of commission charged by any broker, dealer or member of an exchange, or (ii) at a higher rate of commission charges if reasonable in relation to brokerage and research services provided to the Portfolio or the adviser by such member, broker, or dealer. Such services may include, but are not limited to, any one or more of the following: information on the availability of securities for purchase or sale, statistical or factual information, or opinions pertaining to investments. The adviser may use research and services provided to it by brokers and dealers in servicing all its clients; however, not all such services will be used by the adviser in connection with the Portfolio. Brokerage may also be allocated to dealers in consideration of the Portfolio's share distribution but only when execution and price are comparable to that offered by other brokers. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the adviser. If purchases or sales of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the adviser is considered at or about the same time, transactions in such securities will be allocated among the Portfolio and clients in a manner deemed fair and reasonable by the adviser. Although there is no specified formula for allocating such transactions, the various -14- allocation methods used by the adviser, and the results of such allocations, are subject to periodic review by the Portfolio's Board of Trustees. It is anticipated that the majority of the Portfolio's brokerage transactions will be executed by IFNI, an affiliate of the adviser. SHARES OF BENEFICIAL INTEREST GENERAL INFORMATION IMIT is a Massachusetts business trust. IMIT's Declaration of Trust authorizes the Board of Trustees to issue an unlimited number of shares, which are shares of beneficial interest, without par value. The Trust presently has four series of shares. The Declaration of Trust authorizes the Board of Trustees to divide or redivide any unissued shares of the Trust into one or more additional series by setting or changing in any one or more respects their respective preferences, conversion or other rights, voting power, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. Shares have no subscription or preemptive rights and only such conversion or exchange rights as the Board of Trustees may grant in its discretion. When issued for payment as described in the Prospectus and this Statement of Additional Information, the Portfolio's shares will be fully paid and non-assessable. In the event of a liquidation or dissolution of the Trust, shareholders of the Portfolio are entitled to receive the assets available for distribution belonging to the Portfolio. As used in the Prospectus and in this Statement of Additional Information, "assets belonging to the Portfolio" means the consideration received by the Portfolio upon the issuance or sale of shares in the Portfolio together with all income, earnings, profits, and proceeds derived from the investment thereof, including any proceeds from the sale, exchange or liquidation of such investments, and any funds or amounts derived from any reinvestment of such proceeds. VOTING RIGHTS Each share of the Portfolio gives the shareholder one vote in Trustee elections and all other matters submitted to shareholders for a vote. All shares in IMIT have equal voting rights. Shares of all the portfolios of IMIT would be able to vote on the election of Trustees and in certain trust matters. Only holders of shares of a particular portfolio or share class will be able to vote on matters relating solely to that portfolio or share class. As a Massachusetts business trust, IMIT is not required to hold annual shareholder meetings, and does not intend to hold annual meetings. Trustees may be removed by the Board of Trustees or by shareholders at a special meeting. A special meeting of shareholders may be called by the Board of Trustees at any time and will be called by Trustees upon the written request of shareholders owning at least 10% of IMIT's outstanding shares of all series entitled to vote. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Trust shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of -15- each series affected by the matter. For purposes of determining whether the approval of a majority of the outstanding shares of a series will be required in connection with a matter, a series will be deemed to be affected by a matter unless it is clear that the interests of each series in the matter are identical, or that the matter does not affect any interest of the series. Under Rule 18f-2, the approval of any amendment to the investment advisory agreement or any change in investment policy submitted to shareholders would be effectively acted upon with respect to a series only if approved by a majority of the outstanding shares of such series. However, Rule 18f-2 also provides that the ratification of independent public accountants, the approval of principal underwriting contracts, and the election of Trustees may be effectively acted upon by shareholders of the Trust voting without regard to series. MASSACHUSETTS PARTNERSHIP LAW Under certain circumstances, shareholders may be held personally liable as partners under Massachusetts law for obligations of IMIT. To protect its shareholders, IMIT has filed legal documents with Massachusetts that expressly disclaim the liability of its shareholders for acts or obligations of IMIT. These documents require notice of this disclaimer to be given in each agreement, obligation, or instrument IMIT or its Trustees enter into or sign. In the unlikely event that a shareholder is held personally liable for IMIT's obligations, IMIT is required by its Declaration of Trust to use its property to protect or compensate the shareholder. On request, IMIT will defend any claim made and pay any judgment against a shareholder for any act or obligation of IMIT. Therefore, financial loss resulting from liability as a shareholder will occur only if IMIT itself cannot meet its obligations to indemnify shareholders and pay judgments against them. PURCHASING SHARES Except under certain circumstances described in the prospectus, shares are sold at their net asset value on days the New York Stock Exchange is open for business. The procedure for purchasing shares is explained in the Prospectus under "How To Purchase Shares." REDEEMING SHARES The Portfolio redeems shares at the next computed net asset value after the Portfolio receives the redemption request. Redemption procedures are explained in the prospectus under "How To Redeem Shares." REDEMPTION IN KIND. IMIT has elected to be governed by Rule 18f-1 of the Investment Company Act of 1940, under which IMIT is obligated to redeem Shares for any one shareholder in cash only up to the lesser of $250,000 or 1% of the respective class's net asset value during any 90-day period. Any redemption beyond this amount will also be in cash unless Trustees determine that payments should be in kind. In such a case, the Portfolio will pay all or a portion of the remainder of the redemption in portfolio instruments, valued in the same way as the Portfolio determines net asset value. The portfolio instruments will be selected in a manner that Trustees deem fair and equitable. -16- Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, shareholders receiving their securities and selling them before their maturity could receive less than the redemption value of their securities and could incur certain transaction costs. TAX STATUS The Portfolio intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To qualify for this treatment, the Portfolio must, among other requirements: o derive at least 90% of its gross income from dividends, interest, and gains from the sale of securities; o invest in securities within certain statutory limits; and o distribute to its shareholders at least 90% of its net income earned during the year. To the extent that a fund qualifies for treatment as a regulated investment company, it will not be subject to federal income tax on income and net capital gains paid to shareholders in the form of dividends or capital gains distributions. If a fund fails to qualify for such treatment, it is required to pay such taxes. Shareholders are subject to federal income tax on dividends and capital gains received as cash or additional Shares. No portion of any income dividend paid by the Portfolio is eligible for the dividends received deduction available to corporations. These dividends, and any short-term capital gains, are taxable as ordinary income. Shareholders will pay federal tax at capital gains rates on long-term capital gains distributed to them regardless of how long they have held the Portfolio Shares. PERFORMANCE INFORMATION From time to time, the Portfolio may advertise its total return. These figures will be based on historical earnings and are not intended to indicate future performance. No representations can be made regarding actual future returns. Total return represents the change, over a specific period of time, in the value of an investment in the Portfolio after reinvesting all income and capital gains distributions. It is calculated by dividing that change by the initial investment and is expressed as a percentage. The average annual total return for shares of the Portfolio is the average compounded rate of return for a given period that would equate a $1,000 initial investment to the ending redeemable value of that investment. The ending redeemable value is computed by multiplying the number of shares owned at the end of the period by the net asset value per share at the end of the period. The number of shares owned at the end of the period is based on the number of shares -17- purchased at the beginning of the period with $1,000, less any applicable sales load adjusted over the period by any additional shares, assuming the quarterly reinvestment of all dividends and distributions. Average annual total return quotations used in the Portfolio's advertising and promotional materials are calculated according to the following formula: P(1 + T)(n) = ERV Where P equals a hypothetical initial payment of $1000; T equals average annual total return; n equals the number of years; and ERV equals the ending redeemable value at the end of the period of a hypothetical $1000 payment made at the beginning of the period. Under the foregoing formula, the time periods used in advertising will be based on rolling calendar quarters, updated to the last day of the most recent quarter prior to submission of the advertising for publication. Average annual total return, or "T" in the above formula, is computed by finding the average annual compounded rates of return over the period that would equate the initial amount invested to the ending redeemable value. Average annual total return assumes the reinvestment of all dividends and distributions. To the extent that financial institutions and broker/dealers charge fees in connection with services provided in conjunction with an investment in any class of shares, the performance will be reduced for those shareholders paying those fees. PERFORMANCE COMPARISONS - -------------------------------------------------------------------------------- The performance of shares depends upon such variables as: o portfolio quality; o average portfolio maturity; o type of instruments in which the portfolio is invested; o changes in interest rates and market value of portfolio securities; o changes in the Portfolio's expenses; and o various other factors. The Portfolio's performance fluctuates on a daily basis largely because net earnings and offering price per share fluctuate daily. Both net earnings and offering price per share are factors in the computation of total return. -18- To help investors evaluate how the Portfolio might satisfy their investment objective, advertisements regarding the Portfolio may discuss total return for the Portfolio as reported by various financial publications. Advertisements may also compare total return to total return as reported by other investments, indices and averages. The following publications, indices and averages may be used: o Standard & Poor's 500 Composite Stock Price Index o Russell 1000 Growth Index o Lipper Growth Index -19- IMPACT MANAGEMENT INVESTMENT TRUST Jordan 25 Variable Fund Schneider Large Cap Variable Fund STATEMENT OF ADDITIONAL INFORMATION January ___, 2001 This Statement of Additional Information is not a prospectus, but supplements and should be read in conjunction with the prospectus for Jordan 25 Variable Fund and Schneider Large Cap Variable Fund, dated January ____, 2001. To receive a copy of the prospectus, call toll-free, at 1-800-556-5856. Retain this Statement of Additional Information for future reference. Shares of the portfolios are offered only to insurance company separate accounts funding variable life insurance policies and variable annuity contracts. TABLE OF CONTENTS ----------------- INFORMATION ABOUT THE TRUST INVESTMENT STRATEGIES, POLICIES AND RISKS Fixed-Income Securities Restricted and Illiquid Securities Temporary Investments When-Issued and Delayed Delivery Transactions Repurchase Agreements Securities of Other Investment Companies Options Transactions Convertible Securities Portfolio Turnover INVESTMENT LIMITATIONS Investing in Real Estate Buying on Margin Selling Short Issuing Senior Securities and Borrowing Money Lending Cash or Securities Underwriting Investing in Minerals Commodities or Commodity Contracts Concentration of Investments Diversification Requirements Investing In Issuers Whose Securities are Owned by Officers and Trustees of IMIT Pledging Assets Acquiring Securities to Exercise Control MANAGEMENT OF THE PORTFOLIO TRUST OWNERSHIP INVESTMENT ADVISORY SERVICES DISTRIBUTION OF SHARES Distribution Plans ADMINISTRATIVE SERVICES, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT Custodian Independent Auditors BROKERAGE TRANSACTIONS SHARES OF BENEFICIAL INTEREST General Information Voting Rights Massachusetts Partnership Law PURCHASING AND REDEEMING SHARES TAX STATUS PERFORMANCE INFORMATION Performance Comparisons INFORMATION ABOUT THE TRUST Jordan 25 Variable Fund ("Jordan Portfolio") is a non-diversified portfolio, and Schneider Large Cap Variable Fund ("Schneider Portfolio") is a diversified portfolio, of Impact Management Investment Trust ("IMIT"). IMIT was established as a Massachusetts business trust under a Declaration of Trust dated December 18, 1996. IMIT is an open-end management investment company. As of the date of this Statement of Additional Information, IMIT consists of four series, IMPACT Total Return Portfolio, Schneider Large Cap Variable Fund, Jordan 25 Fund, and Jordan 25 Variable Fund. INVESTMENT STRATEGIES, POLICIES AND RISKS Information concerning each portfolio's non-fundamental investment objective, investment program and the primary risks associated with that investment program are set for the prospectus under the heading "Investment Policies and Risks." There can be no assurance that any portfolio will achieve its objective. The following discussion of investment policies supplements the discussion of the investment strategies and risks set forth in the prospectus. JORDAN PORTFOLIO AND SCHNEIDER PORTFOLIO Each portfolio may invest in the following investment vehicles: RESTRICTED AND ILLIQUID SECURITIES. The portfolios expect that any restricted securities acquired would be either from institutional investors who originally acquired the securities in private placements or directly from the issuers of the securities in private placements. Restricted securities and other securities that are not readily marketable may sell at a discount from the price they would bring if freely marketable. Each portfolio will not invest more than 15% of the value of its net assets in illiquid securities, including repurchase agreements providing for settlement in more than seven days after notice, and certain restricted securities not determined by Trustees to be liquid. TEMPORARY INVESTMENTS. Each portfolio may invest in the following temporary investments for defensive purposes: Money Market Instruments ------------------------ A portfolio may invest in the following money market instruments: o instruments of domestic and foreign banks and savings and loans if they have capital, surplus, and undivided profits of over $100,000,000, or if the principal amount of the instrument is insured in full by the Bank Insurance Fund, which is administered by the Federal Deposit Insurance Corporation ("FDIC"), or the Savings Association Insurance Fund, which is administered by the FDIC; and o prime commercial paper (rated A-1 by Standard and Poor's Ratings Group, Prime-1 by Moody's Investors Service, Inc., or F-1 by Fitch Investors Service, Inc.). 1 U.S. Government Obligations --------------------------- The types of U.S. government obligations in which a portfolio may invest generally include direct obligations of the U.S. Treasury (such as U.S. Treasury bills, notes, and bonds) and obligations issued or guaranteed by U.S. government agencies or instrumentalities. These securities are backed by: o the full faith and credit of the U.S. Treasury; o the issuer's right to borrow from the U.S. Treasury; o the discretionary authority of the U.S. government to purchase certain obligations of agencies or instrumentalities; or o the credit of the agency or instrumentality issuing the obligations. Examples of agencies and instrumentalities which may not always receive financial support from the U.S. government are: o Federal Farm Credit Banks; o Federal Home Loan Banks; o Federal National Mortgage Association; o Student Loan Marketing Association; and o Federal Home Loan Mortgage Corporation. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. Each portfolio may purchase and sell securities on a "when issued" or "delayed delivery" basis. "When-issued" refers to securities whose terms and indenture are available, and for which a market exists, but which are not available for immediate delivery. When-issued transactions may be expected to occur a month or more before delivery is due. Delayed delivery is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by a portfolio until it receives payment or delivery from the other party to any of the above transactions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. A portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery is made although the portfolio may earn income on securities it has deposited in a segregated account. Each portfolio may engage in these types of purchases in order to buy securities that fit with its investment objectives at attractive prices - not to increase its investment leverage. Each Portfolio does not intend to engage in when-issued and delayed delivery transactions to an extent that would cause the segregation of more than 20% of the total value of its assets. 2 REPURCHASE AGREEMENTS. Each portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' acceptances and other securities outlined above under "Temporary Investments." In a repurchase agreement, a portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause a portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. A portfolio might also incur disposition costs in liquidating the collateral. While the portfolios' management acknowledges these risks, it is expected that they can be controlled through stringent security selection criteria and careful monitoring procedures. The portfolios will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are found by the portfolios' investment adviser to be creditworthy pursuant to guidelines established by the Board of Trustees (the "Trustees"). SECURITIES OF OTHER INVESTMENT COMPANIES. Each portfolio may invest up to 10% of its assets in securities of other investment companies. Since all investment companies incur certain operating expenses, such as management fees and accounting fees, similar to the expenses of the portfolios, any investment by a portfolio in shares of another investment company would involve duplication of such expenses. PORTFOLIO TURNOVER. Although the portfolios do not intend to invest for the purpose of seeking short-term profits, securities in its portfolio will be sold whenever the adviser believe it is appropriate to do so in light of a portfolio's investment objective, without regard to the length of time a particular security may have been held. The portfolios will not attempt to set or meet a portfolio turnover rate since any turnover would be incidental to transactions undertaken in an attempt to achieve each portfolio's investment objective. In addition to the foregoing investment policies, the Jordan Portfolio is subject to the following specific investment polices: JORDAN PORTFOLIO OPTIONS TRANSACTIONS. The Jordan Portfolio may purchase call options on securities that the adviser intends to include in the Portfolio in order to fix the cost of a future purchase or attempt to enhance return by, for example, participating in an anticipated increase in the value of a security. The portfolio may purchase put options to hedge against a decline in the market value of securities held in the portfolio or in an attempt to enhance return. The portfolio may write (sell) put and covered call options on securities in which it is authorized to invest. 3 Certain special characteristics of and risks associated with using these strategies are discussed below. Use of options contracts is subject to applicable regulations and/or interpretations of the SEC and the several options and futures exchanges upon which these instruments may be traded. COVER REQUIREMENTS. The portfolio will not use leverage in its options strategies. Accordingly, the portfolio will comply with guidelines established by the SEC with respect to coverage of these strategies by either (1) setting aside cash or liquid, unencumbered, daily marked-to-market securities in one or more segregated accounts with the custodian in the prescribed amount; or (2) holding securities or other options contracts whose values are expected to offset ("cover") their obligations thereunder. Securities, currencies, or other options contracts used for cover cannot be sold or closed out while these strategies are outstanding, unless they are replaced with similar assets. As a result, there is a possibility that the use of cover involving a large percentage of the portfolio's assets could impede portfolio management, or the portfolio's ability to meet redemption requests or other current obligations. OPTIONS STRATEGIES. The portfolio may purchase and write (sell) only those options on securities and securities indices that are traded on U.S. exchanges. Exchange-traded options in the U.S. are issued by a clearing organization affiliated with the exchange, on which the option is listed, which, in effect, guarantees completion of every exchange-traded option transaction. The portfolio may purchase call options on securities in which it is authorized to invest in order to fix the cost of a future purchase. Call options also may be used as a means of enhancing returns by, for example, participating in an anticipated price increase of a security. In the event of a decline in the price of the underlying security, use of this strategy would serve to limit the potential loss to the portfolio to the option premium paid; conversely, if the market price of the underlying security increases above the exercise price and the portfolio either sells or exercises the option, any profit eventually realized would be reduced by the premium paid. The portfolio may purchase put options on securities that it holds in order to hedge against a decline in the market value of the securities held or to enhance return. The put option enables the portfolio to sell the underlying security at the predetermined exercise price; thus, the potential for loss to the Portfolio below the exercise price is limited to the option premium paid. If the market price of the underlying security is higher than the exercise price of the put option, any profit the portfolio realizes on the sale of the security is reduced by the premium paid for the put option less any amount for which the put option may be sold. The portfolio may on certain occasions wish to hedge against a decline in the market value of securities that it holds at a time when put options on those particular securities are not available for purchase. At those times, the portfolio may purchase a put option on other carefully selected securities in which it is authorized to invest, the values of which historically have a high degree of positive correlation to the value of the securities actually held. If the adviser's judgment is correct, changes in the value of the put options should generally offset changes in the value of the securities being hedged. However, the correlation between the two values 4 may not be as close in these transactions as in transactions in which a the Portfolio purchases a put option on a security that it holds. If the value of the securities underlying the put option falls below the value of the portfolio securities, the put option may not provide complete protection against a decline in the value of the portfolio securities. The portfolio may write covered call options on securities in which it is authorized to invest for hedging purposes or to increase return in the form of premiums received from the purchasers of the options. A call option gives the purchaser of the option the right to buy, and the writer (seller) the obligation to sell, the underlying security at the exercise price during the option period. The strategy may be used to provide limited protection against a decrease in the market price of the security, in an amount equal to the premium received for writing the call option less any transaction costs. Thus, if the market price of the underlying security held by the portfolio declines, the amount of the decline will be offset wholly or in part by the amount of the premium received by the portfolio. If, however, there is an increase in the market price of the underlying security and the option is exercised, the portfolio will be obligated to sell the security at less than its market value. The portfolio may also write covered put options on securities in which it is authorized to invest. A put option gives the purchaser of the option the right to sell, and the writer (seller) the obligation to buy, the underlying security at the exercise price during the option period. So long as the obligation of the writer continues, the writer may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring it to make payment of the exercise price against delivery of the underlying security. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options. If the put option is not exercised, the portfolio will realize income in the amount of the premium received. This technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying securities would decline below the exercise price less the premiums received, in which case the portfolio would expect to suffer a loss. OPTIONS GUIDELINES. In view of the risks involved in using the options strategies described above, the portfolio has adopted the following investment guidelines to govern its use of such strategies; these guidelines may be modified by the Board of Trustees without shareholder approval: (1) the portfolio will write only covered options, and each such option will remain covered so long as the Series is obligated thereby; and (2) the portfolio will not write options if aggregate exercise prices of previous written outstanding options, together with the value of assets used to cover all outstanding positions, would exceed 25% of its total net assets. RISKS OF OPTIONS TRADING. The portfolio may effectively terminate its right or obligation under an option by entering into a closing transaction. If the portfolio wishes to terminate its obligation to purchase or sell securities under a put or a call option it has written, the portfolio may purchase a put or a call option of the same portfolio (that is, an option identical in its terms to the option previously written). This is known as a 5 closing purchase transaction. Conversely, in order to terminate its right to purchase or sell specified securities under a call or put option it has purchased, the portfolio may sell an option of the same series as the option held. This is known as a closing sale transaction. Closing transactions essentially permit the portfolio to realize profits or limit losses on its options positions prior to the exercise or expiration of the option. If a portfolio is unable to effect a closing purchase transaction with respect to options it has acquired, the portfolio will have to allow the options to expire without recovering all or a portion of the option premiums paid. If a portfolio is unable to effect a closing purchase transaction with respect to covered options it has written, the portfolio will not be able to sell the underlying securities or dispose of assets used as cover until the options expire or are exercised, and the portfolio may experience material losses due to losses on the option transaction itself and in the covering securities. In considering the use of options to enhance returns or for hedging purposes, particular note should be taken of the following: (1) The value of an option position will reflect, among other things, the current market price of the underlying security, the time remaining until expiration, the relationship of the exercise price to the market price, the historical price volatility of the underlying security, and general market conditions. For this reason, the successful use of options depends upon the adviser's ability to forecast the direction of price fluctuations in the underlying securities markets. (2) Options normally have expiration dates of up to three years. An American style put or call option may be exercised at any time during the option period while a European style put or call option may be exercised only upon expiration or during a fixed period prior to expiration. The exercise price of the options may be below, equal to or above the current market value of the underlying security or index. Purchased options that expire unexercised have no value. Unless an option purchased by the portfolio is exercised or unless a closing transaction is effected with respect to that position, the portfolio will realize a loss in the amount of the premium paid and any transaction costs. (3) A position in an exchange-listed option may be closed out only on an exchange that provides a secondary market for identical options. Although the portfolio intends to purchase or write only those exchange-traded options for which there appears to be a liquid secondary market, there is no assurance that a liquid secondary market will exist for any particular option at any particular time. A liquid market may be absent if: (i) there is insufficient trading interest in the option; (ii) the exchange has imposed restrictions on trading, such as trading halts, trading suspensions or daily price limits; (iii) normal exchange operations have been disrupted; or (iv) the exchange has inadequate facilities to handle current trading volume. (4) The portfolio's activities in the options markets may result in a higher portfolio turnover rate and additional brokerage costs; however, the portfolio also may save on commissions by using options as a hedge rather than buying or selling individual securities in anticipation of, or as a result of, market movements. 6 INVESTMENT LIMITATIONS The investment objectives of the portfolios and certain investment limitations set forth herein are fundamental policies of the portfolios. A portfolio's fundamental limitations cannot be changed without the consent of the holders of a majority of its outstanding shares. Unless otherwise stated, each Portfolio is subject to the following limitations which are fundamental policies of the portfolios. INVESTING IN REAL ESTATE - ------------------------ No portfolio will purchase or sell real estate, although it may invest in the securities of companies whose business involves the purchase or sale of real estate, or in securities which are secured by real estate or interests in real estate. BUYING ON MARGIN - ---------------- No portfolio will purchase any securities on margin but may obtain such short-term credits as may be necessary for the clearance of transactions. SELLING SHORT - ------------- No portfolio will sell securities short. ISSUING SENIOR SECURITIES AND BORROWING MONEY - --------------------------------------------- No portfolio will issue senior securities, except as permitted by its investment objective and policies, and except that a portfolio may borrow money only in amounts up to one-third of the value of its net assets, including the amounts borrowed. Any such borrowings shall be from banks. A portfolio will borrow money only as a temporary, extraordinary, or emergency measure, to facilitate management of the portfolio by enabling the portfolio to meet redemption requests where the liquidation of portfolio securities is deemed to be inconvenient or disadvantageous. A portfolio will not purchase any securities while any such borrowings are outstanding. LENDING CASH OR SECURITIES - -------------------------- No portfolio may lend any of its assets except portfolio securities; however, it is not anticipated that any of the portfolios will lend its portfolio securities. UNDERWRITING - ------------ No portfolio will underwrite any issue of securities, except as it may be deemed to be an underwriter under the Securities Act of 1933 in connection with the sale of securities in accordance with its investment objective, policies, and limitations. COMMODITIES OR COMMODITY CONTRACTS - ---------------------------------- No Portfolio will purchase or sell any commodities, or commodities contracts, including futures. 7 CONCENTRATION OF INVESTMENTS - ---------------------------- The Schneider Portfolio will not purchase securities if, as a result of such purchase, 25% or more of the value of its total assets at the time of purchase would be invested in any one industry. However, the portfolio may at times invest 25% or more of the value of its total net assets in cash or cash items (not including certificates of deposit), securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, or repurchase agreements secured by such instruments. DIVERSIFICATION OF INVESTMENTS - ------------------------------ With respect to 75% of its assets, the Schneider Portfolio will not purchase the securities of any issuer (other than securities of the U.S. government, its agencies, or instrumentalities, or instruments secured by securities of such issuers, such as repurchase agreements) if, as a result, more than 5% of the value of its total assets would be invested in the securities of such issuer, nor will the Schneider Portfolio acquire more than 10% of any class of voting securities of any issuer. For these purposes, the Schneider Portfolio takes all common stock and all preferred stock of an issuer each as a single class, regardless of priorities, series, designations, or other differences. The following limitations are non-fundamental policies, which means that they may be changed by the Trustees without shareholder approval. Shareholders will be notified before any material changes in these limitations become effective. Except with respect to borrowing money, if a percentage limitation is adhered to at the time of investment, a later increase or decrease in percentage resulting from any change in value or net assets will not result in a violation of such restriction. Each portfolio has no present intent to borrow money in excess of 5% of the value of its total assets. MANAGEMENT OF THE PORTFOLIO IMIT and the portfolios are managed by a Board of Trustees. The Trustees appoint officers to the portfolios, and oversee the management and operations of the portfolios. Officers and Trustees are listed with their addresses, birth dates, present positions with IMIT, and principal occupations. Name: Charles R. Clark* Birthdate: November 16, 1959 Address: 333 West Vine Street, Suite 206 Lexington, KY 40507Position with Position with Portfolio: Chairman of the Board of Trustees Occupation: Chief Market Analyst and Senior Assistant Portfolio Manager of Jordan American Holdings, Inc. since 1993. Vice President of Equity Assets Management, Inc. since 2001. Vice-President of IMPACT Financial Network, Inc. since 1993. 8 Name: A.J. Elko* Birthdate: September 4, 1963 Address: 333 West Vine Street, Suite 206 Lexington, KY 40507 Position with Portfolio: President, Treasurer and Secretary Occupation: Chief Operating Officer and Chief Financial Officer of Jordan American Holdings, Inc. since 1999. Vice President of Equity Assets Management, Inc. since 2001. Vice President of IMPACT Financial Network, Inc. and Impact Administrative Services, Inc. since 1999. Chief Operating Manager and founder of A.J. Elko & Associates, LLC, (a tax planning and tax preparation services company) since 1995. President and co-founder of Tummino Construction, Inc. (a general contractor) since 1996. Name: Oleen Eagle Birthdate: September 28, 1930 Address: 3215 Chestnut Street Murrysville, PA 15668 Position with Portfolio: Trustee Occupation: President of Cornerstone TeleVision since 1987, Vice President and General Manager of Cornerstone TeleVision, 1976-1987, President and Director of Group C (a for profit subsidiary of Cornerstone TeleVision) since 1991, Vice President and Director of Christian Advance International (a nonprofit Christian missionary organization) since 1985. Name: Gerald L. Bowyer Birthdate: August 31, 1962 Address: 820 Pine Hollow Road McKees Rocks, PA 15136 Position with Portfolio: Trustee Occupation: President, Allegheny Institute (a non-partisan research and educational institute) since 1994; host of "Focus on the Issues," a syndicated public affairs television program originating on WPCB, Cornerstone TeleVision. Name: Steven J. Fellin* Birth date: April 1, 1965 Address: 460 E. Swedesford Rd, Suite 1080 Wayne, PA 19087 Position with Portfolio: Trustee Occupation: Vice President and Chief Financial Officer of Schneider Capital Management since 1998. Assistant Vice President of Schneider Capital Management since 1997. From July 1995 through October of 1997, he was a Senior Manager of Fund Accounting and Administration at SEI Investments. * An "interested person" of IMIT, as defined in the Investment Company Act of 1940, as amended. 9 Trustees who are not interested persons of IMIT or the adviser receive compensation of $500 per meeting attended. For the fiscal year ended September 30, 2000, the non-interested trustees of IMIT received the following compensation: Independent Compensation Total Compensation Trustee from IMIT from IMIT - ------- --------- --------- Oleen Eagle $2,000 $2,000 Gerald L. Bowyer $2,000 $2,000 TRUST OWNERSHIP As of __________ , 2000, officers and Trustees of IMIT owned individually and together less than 1% of IMIT's outstanding Shares. INVESTMENT ADVISORY SERVICES Schneider Capital Management ("Schneider Capital") is the investment adviser of the Schneider Portfolio, and Equity Assets Management, Inc. ("EAM"), a wholly owned subsidiary of Jordan American Holdings Inc, is the investment adviser of the Jordan Portfolio. W. Neal Jordan is considered to be a control person of EAM because he owns more than 25% of Jordan American Holdings, Inc.'s voting stock. Mr. Jordan is the founder, Senior Portfolio Manager and Chief Investment Officer of EAM. Schneider Capital is a Pennsylvania corporation and is employee owned. Arnold C. Schneider III is considered to be a control person of Schneider Capital because he owns more than 25% of Schneider Capital's voting stock. Pursuant to an investment advisory agreement between Schneider Capital and the Trust, the Schneider Portfolio pays Schneider Capital an advisory fee which on an annual basis equals 0.60% of the portfolio's average daily net assets for services to the portfolio Pursuant to a separate investment advisory agreement, the Jordan Portfolio pays EAM an advisory fee which on an annual basis equals 0.60% of the portfolio's average daily net assets for its services to the Jordan Portfolio. DISTRIBUTION OF SHARES IMIT has entered into a distribution agreement with IMPACT Financial Network, Inc. ("IFNI") in which IFNI is the principal distributor of shares of IMIT. IFNI is located at 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487. IFNI is a Florida corporation, and is a wholly-owned subsidiary of JAHI. IFNI does not receive any fee or other compensation except as described under "Distribution Plans" and "Brokerage Transactions" herein. Distribution Plans - ------------------ The portfolios have adopted Rule 12b-1 Plans (the "Plans"), which provide that IFNI, as distributor, is entitled to a reimbursement each month for the actual expenses incurred in the distribution and promotion of a portfolio's shares, including but not limited to, printing of prospectuses 10 and reports used for sales purposes, preparation and printing of sales literature and related expenses, advertisements, and other distribution-related expenses as well as any distribution or service fees paid to securities dealers or others who have executed a dealer agreement with IFNI. Any expense of distribution in excess of the 12b-1 fees under the Plans will be borne by the adviser without any reimbursement or payment by the portfolio. The Plans also provides that to the extent that a portfolio, its adviser, IFNI or other parties on behalf of the portfolio, the adviser or IFNI makes payments that are deemed to be payments for the financing of any activity primarily intended to result in the sale of shares issued by the portfolio within the context of Rule 12b-1, such payments shall be deemed to be made pursuant to the applicable Plan. In no event shall the payments made under the Plans, plus any other payments deemed to be made pursuant to the Plan, exceed the amount permitted to be paid pursuant to the Conduct Rule 2830 of the National Association of Securities Dealers, Inc. Other expenses of distribution and marketing in excess of the maximum amounts permitted by the plans per annum will be borne by IFNI, and any amounts paid for the above services will be paid pursuant to a servicing or other agreement. The Plans were approved by the Board, including a majority of the Trustees who are not "interested persons" of IMIT as defined in the 1940 Act (and each of whom has no direct or indirect financial interest in the Plans or any agreement related thereto, referred to herein as the ("12-b-1 Trustees"). The Board determined that a Plan may be of benefit to the portfolios, the shareholders and the Trust by helping a portfolio facilitate sales of shares to increase the assets in the portfolio, and, therefore, to achieve economies of scale. The Plans may be terminated at any time by the vote of the Board or the 12b-1 Trustees, or by the vote of a majority of the outstanding shares of a portfolio. IFNI, the Portfolio's distributor has a financial interest in the operation of the Plans. Charles R. Clark, Trustee of IMIT, and Vice President of IFNI, has a direct financial interest in the operation of the Plans. CODE OF ETHICS IMIT, the investment advisers and IFNI each have adopted a code of ethics under Rule 17j-1 of the Investment Company Act. These codes permit personnel to invest in securities, including securities that may be purchased or sold by the portfolios, subject to preclearance by IMIT's Compliance Officer and certain other conditions. ADMINISTRATIVE SERVICES, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT IMPACT Administrative Services, Inc., ("IASI"), 333 West Vine Street, Suite 206, Lexington, KY, 40507, is responsible for performing and overseeing administrative, transfer agent, dividend disbursing and fund accounting services on behalf of the portfolios. IASI is a wholly-owned subsidiary of JAHI., the adviser. The fee paid to IASI for services is 0.15% of each portfolio's average net assets. IASI provides all administrative 11 services to the portfolios other then those relating to the investment portfolio of the portfolios. IASI also provides the portfolios' transfer agency services and provides fund accounting services to the portfolios. CUSTODIAN - --------- The custodian for the securities and cash of IMIT and the portfolios is Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, OH 45263. The custodian's fee is paid by IASI from its administrative services fee. INDEPENDENT AUDITORS - -------------------- Spicer, Jeffries & Co. serves as the independent auditor for the portfolios. The auditor's fees are paid by IASI from the administrative services fee. BROKERAGE TRANSACTIONS The adviser, when effecting the purchases and sales of portfolio securities for the account of a portfolio, will seek execution of trades either (i) at the most favorable and competitive rate of commission charged by any broker, dealer or member of an exchange, or (ii) at a higher rate of commission charges if reasonable in relation to brokerage and research services provided to the Portfolios or the adviser by such member, broker, or dealer. Such services may include, but are not limited to, any one or more of the following: information on the availability of securities for purchase or sale, statistical or factual information, or opinions pertaining to investments. The adviser may use research and services provided to it by brokers and dealers in servicing all its clients; however, not all such services will be used by the adviser in connection with the Portfolios. Brokerage may also be allocated to dealers in consideration of a portfolio's share distribution but only when execution and price are comparable to that offered by other brokers. Some securities considered for investment by a portfolio may also be appropriate for other clients served by the adviser. If purchases or sales of securities consistent with the investment policies of a portfolio and one or more of these other clients served by the adviser is considered at or about the same time, transactions in such securities will be allocated among the portfolio and clients in a manner deemed fair and reasonable by the adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the adviser, and the results of such allocations, are subject to periodic review by the Portfolios' Board of Trustees. It is anticipated that the majority of the Jordan Portfolio's brokerage transactions will be executed by IFNI, an affiliate of the portfolio's adviser. SHARES OF BENEFICIAL INTEREST GENERAL INFORMATION IMIT is a Massachusetts business trust. IMIT's Declaration of Trust authorizes the Board of Trustees to issue an unlimited number of shares, 12 which are shares of beneficial interest, without par value. The Trust presently has four series of shares. The Declaration of Trust authorizes the Board of Trustees to divide or redivide any unissued shares of the Trust into one or more additional series by setting or changing in any one or more respects their respective preferences, conversion or other rights, voting power, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. Shares have no subscription or preemptive rights and only such conversion or exchange rights as the Board of Trustees may grant in its discretion. When issued for payment as described in the Prospectus and this Statement of Additional Information, a portfolio's shares will be fully paid and non-assessable. In the event of a liquidation or dissolution of the Trust, shareholders of a portfolio are entitled to receive the assets available for distribution belonging to a portfolio. As used in the Prospectus and in this Statement of Additional Information, "assets belonging to the portfolio" means the consideration received by a portfolio upon the issuance or sale of shares in the portfolio together with all income, earnings, profits, and proceeds derived from the investment thereof, including any proceeds from the sale, exchange or liquidation of such investments, and any funds or amounts derived from any reinvestment of such proceeds. VOTING RIGHTS The participating insurance companies and their respective separate accounts are the shareholders of the portfolios. As shareholders of the portfolios, they have certain voting rights. Each share of a portfolio gives the shareholder one vote in Trustee elections and all other matters submitted to shareholders for a vote. All shares in IMIT have equal voting rights. Shares of all the portfolios of IMIT will be able to vote on the election of Trustees and in certain trust matters. Only holders of shares of a particular portfolio or share class will be able to vote on matters relating solely to that portfolio or share class. As a Massachusetts business trust, IMIT is not required to hold annual shareholder meetings, and does not intend to hold annual meetings. Trustees may be removed by the Board of Trustees or by shareholders at a special meeting. A special meeting of shareholders may be called by the Board of Trustees at any time and will be called by Trustees upon the written request of shareholders owning at least 10% of IMIT's outstanding shares of all series entitled to vote. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Trust shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of each series affected by the matter. For purposes of determining whether the approval of a majority of the outstanding shares of a series will be required in connection with a matter, a series will be deemed to be affected by a matter unless it is clear that the interests of each series in the matter are identical, or that the matter does not affect any interest of the series. Under Rule 18f-2, the approval of any amendment to the investment advisory agreement or any change in investment policy submitted to shareholders would be effectively acted upon with respect to a 13 series only if approved by a majority of the outstanding shares of such series. However, Rule 18f-2 also provides that the ratification of independent public accountants, the approval of principal underwriting contracts, and the election of Trustees may be effectively acted upon by shareholders of the Trust voting without regard to series. MASSACHUSETTS PARTNERSHIP LAW Under certain circumstances, shareholders may be held personally liable as partners under Massachusetts law for obligations of IMIT. To protect its shareholders, IMIT has filed legal documents with Massachusetts that expressly disclaim the liability of its shareholders for acts or obligations of IMIT. These documents require notice of this disclaimer to be given in each agreement, obligation, or instrument IMIT or its Trustees enter into or sign. In the unlikely event that a shareholder is held personally liable for IMIT's obligations, IMIT is required by its Declaration of Trust to use its property to protect or compensate the shareholder. On request, IMIT will defend any claim made and pay any judgment against a shareholder for any act or obligation of IMIT. Therefore, financial loss resulting from liability as a shareholder will occur only if IMIT itself cannot meet its obligations to indemnify shareholders and pay judgments against them. PURCHASING AND REDEEMING SHARES Each portfolio ordinarily effects orders to purchase and redeem shares at the portfolio's next computed net asset value after it receives an order. Insurance companies participating in each portfolio serves as the portfolio's designee for receiving orders of separate accounts that invest in the portfolio. Each portfolio currently offers shares only to insurance company separate accounts. In the future, the portfolios may offer their shares to pension and retirement plans that qualify for special federal income tax treatment. The Board of Trustees monitors for possible conflicts among separate accounts (and will do so for plans) buying shares of the portfolios. A portfolio's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a separate account (or plan) withdrawing because of a conflict. TAX STATUS Each Portfolio intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To qualify for this treatment, a portfolio must, among other requirements: o derive at least 90% of its gross income from dividends, interest, and gains from the sale of securities; o invest in securities within certain statutory limits; and o distribute to its shareholders at least 90% of its net income earned during the year. 14 To the extent that a fund qualifies for treatment as a regulated investment company, it will not be subject to federal income tax on income and net capital gains paid to shareholders in the form of dividends or capital gains distributions. If a fund fails to qualify for such treatment, it is required to pay such taxes. Shareholders are subject to federal income tax on dividends and capital gains received as cash or additional Shares. No portion of any income dividend paid by a portfolio is eligible for the dividends received deduction available to corporations. These dividends, and any short-term capital gains, are taxable as ordinary income. Shareholders will pay federal tax at capital gains rates on long-term capital gains distributed to them regardless of how long they have held the portfolio Shares. Since each portfolio's shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal income tax consequences to variable annuity contract holders and variable life insurance policy holders. For this information, variable annuity contract holders and variable life insurance policy holders should consult the applicable prospectus of the separate account of the participating insurance company or their tax advisers. PERFORMANCE INFORMATION From time to time, the portfolios may advertise their respective total return. These figures will be based on historical earnings and are not intended to indicate future performance. No representations can be made regarding actual future returns. Total return represents the change, over a specific period of time, in the value of an investment in a portfolio after reinvesting all income and capital gains distributions. It is calculated by dividing that change by the initial investment and is expressed as a percentage. The average annual total return for shares of a portfolio is the average compounded rate of return for a given period that would equate a $1,000 initial investment to the ending redeemable value of that investment. The ending redeemable value is computed by multiplying the number of shares owned at the end of the period by the net asset value per share at the end of the period. The number of shares owned at the end of the period is based on the number of shares purchased at the beginning of the period with $1,000, less any applicable sales load adjusted over the period by any additional shares, assuming the quarterly reinvestment of all dividends and distributions. Average annual total return quotations used in a portfolio's advertising and promotional materials are calculated according to the following formula: n P(1 + T) = ERV 15 Where P equals a hypothetical initial payment of $1000; T equals average annual total return; n equals the number of years; and ERV equals the ending redeemable value at the end of the period of a hypothetical $1000 payment made at the beginning of the period. Under the foregoing formula, the time periods used in advertising will be based on rolling calendar quarters, updated to the last day of the most recent quarter prior to submission of the advertising for publication. Average annual total return, or "T" in the above formula, is computed by finding the average annual compounded rates of return over the period that would equate the initial amount invested to the ending redeemable value. Average annual total return assumes the reinvestment of all dividends and distributions. To the extent that financial institutions and broker/dealers charge fees in connection with services provided in conjunction with an investment in any class of shares, the performance will be reduced for those shareholders paying those fees. PERFORMANCE COMPARISONS - ----------------------- The performance of shares depends upon such variables as: o portfolio quality; o average portfolio maturity; o type of instruments in which the portfolio is invested; o changes in interest rates and market value of portfolio securities; o changes in the Portfolio's expenses; and o various other factors. A portfolio's performance fluctuates on a daily basis largely because net earnings and offering price per share fluctuate daily. Both net earnings and offering price per share are factors in the computation of total return. To help investors evaluate how a portfolio might satisfy their investment objective, advertisements regarding a portfolio may discuss total return for a portfolio as reported by various financial publications. Advertisements may also compare total return to total return as reported by other investments, indices and averages. The following publications, indices and averages may be used: o Standard & Poor's 500 Composite Stock Price Index o Russell 1000 Index o Russell 1000 Value Index 16 PART C Other Information Item 23. Exhibits a. Declaration of Trust dated December 18, 1996* b. By-Laws* c. Article III of the Declaration of Trust* d. (i) Amended and Restated Investment Advisory Agreement for Impact Total Return Portfolio*** (ii) Form of Sub-Investment Advisory Agreement with Schneider Capital Management for Impact Total Return Portfolio***** (iii) Form of Investment Advisory Agreement with respect to the Jordan 25 Fund - filed herewith (iv) Form of Investment Advisory Agreement with respect to the Schneider Large Cap Variable Fund - filed herewith (v) Form of Investment Advisory Agreement with respect to the Jordan 25 Variable Fund -filed herewith e. Amended and Restated Underwriting Agreement*** f. Inapplicable g. Form of Custody Agreement** h. (i) Administrative Services Agreement*** (ii) Form of Amendment to Administrative Services Agreement**** (iii) Mutual Fund Services Agreement*** i. Opinion and Consent of Counsel** j. Not Applicable k. Not Applicable l. Subscription Agreement** m. Distribution Plans pursuant to Rule 12b-1 (i) Retail Class*** (ii) Form of Amendment to Retail Class**** (iii) Form of 12b-1 Plan for Traditional Class**** (iv) Form of 12b-1 Plan for Wholesale Class**** n. (i) Rule 18f-3 Plan for Impact Total Return Portfolio**** (ii) Rule 18f-3 Plan for Jordan 25 Fund - filed herewith o. Inapplicable p. Codes of Ethics -filed herewith * Incorporated by reference to IMIT's Registration Statement on Form N-1A, which was filed via EDGAR on February 18, 1997. ** Incorporated by reference to Pre-Effective Amendment No. 2 which was filed via EDGAR on June 26, 1997. *** Incorporated by reference to Post-Effective Amendment No. 3, which was filed via EDGAR on April 3, 1998. **** Incorporated by reference to Post-Effective Amendment No. 4, which was filed via EDGAR on February 16, 1999. *****Incorporated by reference to Post-Effective Amendment No. 5, which was filed via EDGAR on April 30, 1999. Item 24. Persons Controlled by or Under Common Control with Registrant - Inapplicable Item 25. Indemnification Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question as to whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 26. Business and Other Connections of Investment Adviser Information pertaining to business and other connections of the Registrant's investment adviser is hereby incorporated by reference to the section of the Prospectus captioned "Management of the Portfolio" and to the section of the Statement of Additional Information captioned "Investment Advisers". Charles R. Clark, Trustee and officer of IMIT and A.J. Elko, Officer of IMIT are officers of the advisor. The advisor has engaged, and is currently engaged, in providing financial advisory services for individual investors as well as common trust funds. No director or officer of the advisor has engaged in any other business during the past two years; on Item 27. Principal Underwriters (a) Inapplicable (b) The following is certain information with respect to the officers and directors of IMPACT Financial Network, Inc., the principal distributor for IMIT: Positions and Positions and Offices with Offices with Name and Address Underwriter Registrant - ---------------- ----------- ---------- W. Neal Jordan 2155 Resort Drive, Suite 108 Steamboat Springs, CO 80487 President None Charles R. Clark 333 West Vine Street, Suite 206 Lexington, KY 40507 Vice-President Trustee and Chairman A.J. Elko 333 West Vine Street, Suite 206 Lexington, KY 40507 Vice-President President, Treasurer and Secretary (c) Inapplicable. Item 28. Location of Accounts and Records All such accounts, books and other documents are maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder are maintained at one or more of the following locations: Registrant, 333 West Vine Street, Suite 206, Lexington, KY 40507, EAM, Inc., 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487, IMPACT Administrative Services, Inc., 333 West Vine Street, Suite 206, Lexington, KY 40507 IMPACT Administrative Services, Inc., Shared Service Center, 2933 Jack's Run Road, White Oak, PA 15131 The Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263. Item 29. Management Services Inapplicable Item 30. Undertakings (a) Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders upon request and without charge. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Post Effective Amendment No. 8 to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lexington and the Commonwealth of Kentucky on the 24th day of October, 2000. Impact Management Investment Trust By: /s/ A.J. Elko President Pursuant to the requirement of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signature Title Date /s/ Charles R. Clark* Chairman of the October 24, 2000 Charles R. Clark Board of Trustees /s/ A.J. Elko* President, Treasurer and October 24, 2000 A.J. Elko Secretary /s/ Oleen Eagle* Trustee October 24, 2000 Oleen Eagle /s/ Gerald L. Bowyer* Trustee October 24, 2000 Gerald L. Bowyer /s/ Steven J. Fellin* Trustee October 24, 2000 Steven J. Fellin * By /s/ Charles R. Clark Charles R. Clark Attorney-in-fact (pursuant to power of attorney) INDEX TO EXHIBITS Item 23(d)iii-vi Forms of Investment Advisory Agreements Item 23(n)ii Rule 18f-3 Plan for Jordan 25 Fund Item 23(p) Codes of Ethics EX-99.23.D.III 2 0002.txt INV ADV AGT - JORDAN 25 FUND IMPACT MANAGEMENT INVESTMENT TRUST INVESTMENT ADVISORY AGREEMENT AGREEMENT, made by and between IMPACT MANAGEMENT INVESTMENT TRUST, a Massachusetts business trust (hereinafter called the "Trust"), on behalf of JORDAN 25 FUND (the "Portfolio"), and EQUITY ASSETS MANAGEMENT, INC., a Florida corporation (hereinafter called the "Investment Adviser"). WITNESSETH: WHEREAS, the Trust has been organized and operates as an investment company registered under the Investment Company Act of 1940 (the "1940 Act") and engages in the business of investing and reinvesting its assets in securities, and the Investment Adviser is a registered Investment Adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and engages in the business of providing investment management services; and WHEREAS, the Trust has selected the Investment Adviser to serve as the investment adviser for the Portfolio effective as of the date of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the parties hereto intending to be legally bound, it is agreed as follows: 1. The Trust on behalf of the Portfolio hereby employs the Investment Adviser to manage the investment and reinvestment of the Portfolio's assets and to administer its affairs, subject to the direction of the Board of Trustees and officers of the Trust for the period and on the terms hereinafter set forth. The Investment Adviser hereby accepts such employment and agrees during such period to render the services and assume the obligations herein set forth for the compensation herein provided. The Investment Adviser shall for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or to represent the Trust or the Portfolio in any way, or in any way be deemed an agent of the Trust or the Portfolio. The Investment Adviser shall regularly make decisions as to what securities to purchase and sell on behalf of the Portfolio and shall record and implement such decisions and shall furnish the Board of Trustees of the Trust with such information and reports regarding the Portfolio's investments as the Investment Adviser deems appropriate or as the Trustees of the Trust may reasonably request. Subject to compliance with the requirements of the 1940 Act, the Investment Adviser may retain as a sub-adviser to the Portfolio, at the Investment Adviser's own expense, any investment adviser registered under the Advisers Act. 2. The Portfolio shall conduct its own business and affairs and shall bear the expenses and salaries necessary and incidental thereto including, but not in limitation of the foregoing, the costs incurred in: the maintenance of its corporate existence; the maintenance of its own books, records and procedures; dealing with its own shareholders; the payment of dividends; transfer of stock, including issuance, redemption and repurchase of shares; preparation of share certificates; reports and notices to shareholders; calling and holding of shareholders' meetings; miscellaneous office expenses; brokerage commissions; custodian fees; legal and accounting fees; and taxes. Directors, officers and employees of the Investment Adviser may be trustees, directors, officers and employees of the funds of which the Investment Adviser serves as investment adviser. Directors, officers and employees of the Investment Adviser who are trustees, officers and/or employees of the Trust shall not receive any compensation from the Trust for acting in such dual capacity. In the conduct of the respective businesses of the parties hereto and in the performance of this Agreement, the Trust and Investment Adviser may share facilities common to each, with appropriate proration of expenses between them. 3. (a) The Investment Adviser shall place and execute Portfolio orders for the purchase and sale of portfolio securities with broker-dealers. Subject to the primary objective of obtaining the best available prices and execution, the Investment Adviser will place orders for the purchase and sale of portfolio securities for the Portfolio with such broker-dealers as it may select from time to time, including brokers who provide statistical, factual and financial information and services to the Portfolio, to the Investment Adviser, or to any other fund for which the Investment Adviser provides investment advisory services and/or with broker-dealers who sell shares of the Portfolio or who sell shares of any other fund for which the Investment Adviser provides investment advisory services. Broker-dealers who sell shares of the funds of which the Investment Adviser is investment adviser, shall only receive orders for the purchase or sale of portfolio securities to the extent that the placing of such orders is in compliance with the Rules of the Securities and Exchange Commission and the National Association of Securities Dealers, Inc. (b) Notwithstanding the provisions of subparagraph (a) above and subject to such policies and procedures as may be adopted by the Board of Trustees and officers of the Trust, the Investment Adviser is authorized to pay a member of an exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker or dealer would have charged for effecting that transaction, in such instances where the Investment Adviser has determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or the Investment Adviser's overall responsibilities with respect to the Portfolio and to other funds for which the Investment Adviser exercises investment discretion. 4. As compensation for the services to be rendered to the Portfolio by the Investment Adviser under the provisions of this Agreement, the Trust on behalf of the Portfolio shall pay to the Investment Adviser from the Portfolio's assets a fee composed of an asset charge and a performance incentive adjustment. (a) The asset charge (i) The asset charge for each calendar day of each year shall be equal to the total of 1/365th (1/366th in each leap year) of the amount computed in accordance with paragraph (ii) -2- below. The computation shall be made for each day on the basis of net assets as of the close of business of the full business day two (2) business days prior to the day for which the computation is being made. In the case of the suspension of the computation of net asset value, the asset charge for each day during such suspension shall be computed as of the close of business on the last full business day on which the net assets were computed. Net assets as of the close of a full business day shall include all transactions in shares of the Portfolio recorded on the books of the Portfolio for that day. (ii) The asset charge shall be equal to 1.20% of the average daily net assets of the Portfolio. (b) The performance incentive adjustment (i) The performance incentive adjustment, determined monthly, shall be computed by measuring the percentage point difference between the performance of one Traditional Class share of the Portfolio and the performance of the Lipper Growth Index (the "Index"). The performance of one Traditional Class share of the Portfolio shall be measured by computing the percentage difference, carried to two decimal places, between the opening net asset value of one share of the Portfolio and the closing net asset value of such share as of the last business day of the period selected for comparison, adjusted for dividends or capital gain distributions treated as reinvested at the end of the month during which the distribution was made but without adjustment for expenses related to a particular class of shares. The performance of the Index for the same period will then be established by measuring the percentage difference, carried to two decimal places, between the beginning and ending Index for the comparison period, with dividends or capital gain distributions on the securities which comprise the Index being treated as reinvested at the end of the month during which the distribution was made. (ii) In computing the adjustment, one percentage point shall be subtracted from the difference, as determined in (b)(i) above. The result shall be converted to a decimal value, multiplied by .01 and then multiplied by the Portfolio's average net assets for the comparison period. This product next shall be divided by 12 to put the adjustment on a monthly basis. Where the performance of the Portfolio exceeds the Index, the amount so determined shall be an increase in the fees computed under paragraph (a). Where Portfolio performance is exceeded by the Index, the amount so determined shall be a decrease in such fees. (iii)The 12 month comparison period will roll over with each succeeding month, so that it always equals 12 months, ending with the month for which the performance adjustment is being computed. (iv) If the Index ceases to be published for a period of more than 90 days, changes in any material respect or otherwise becomes impracticable to use for purposes of the adjustment, no adjustment will be made under this paragraph (b) until such time as the Board approves a substitute index. -3- (c) The maximum annual investment advisory fee that the Portfolio shall pay will be 1.90% of its average daily net assets and the minimum advisory fee shall be 0.50% (unless the Investment Adviser voluntarily agrees tow waive its fee). (d) The fee shall be paid on a monthly basis and, in the event of the termination of this Agreement, the fee accrued shall be prorated on the basis of the number of days that this Agreement, the fee accrued shall be prorated on the basis of the number of days that this Agreement is in effect during the month with respect to which such payment is made. (e) The fee provided for hereunder shall be paid in cash by the Portfolio to the Investment Adviser within five business days after the last day of each month. 5. The services to be rendered by the Investment Adviser to the Trust on behalf of the Portfolio under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby. 6. The Investment Adviser, its directors, officers, employees, and agents may engage in other businesses, may render investment advisory services to other investment companies, or to any other corporation, association, firm or individual, and may render underwriting services to the Trust on behalf of the Portfolio or to any other investment company, corporation, association, firm or individual. 7. In the absence of willful misfeasance, bad faith, gross negligence, or a reckless disregard of the performance of duties of the Investment Adviser to the Portfolio, the Investment Adviser shall not be subject to liabilities to the Trust, the Portfolio or to any shareholder of the Portfolio for any action or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security, or otherwise. 8. This Agreement shall be executed and become effective as of the date written below if approved by the vote of a majority of the outstanding voting securities of the Portfolio. It shall continue in effect for a period of two years and may be renewed thereafter only so long as such renewal and continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the outstanding voting securities of the Portfolio and only if the terms and the renewal hereof have been approved by the vote of a majority of the Trustees of the Trust who are not parties hereto or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. No material amendment to this Agreement shall be effective unless the terms thereof have been approved by the vote of a majority of the outstanding voting securities of the Portfolio and by the vote of a majority of Trustees of the Trust who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this Agreement may be terminated by the Trust at any time, without the payment of a penalty, on sixty days' written notice to the Investment Adviser of the Trust's intention to do so, pursuant to action by the Board of Trustees of the Trust or pursuant to a vote of a majority of the outstanding -4- voting securities of the Fund. The Investment Adviser may terminate this Agreement at any time, without the payment of penalty on sixty days' written notice to the Trust of its intention to do so. Upon termination of this Agreement, the obligations of all the parties hereunder shall cease and terminate as of the date of such termination, except for any obligation to respond for a breach of this Agreement committed prior to such termination, and except for the obligation of the Trust to pay to the Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the date of termination. This Agreement shall automatically terminate in the event of its assignment. The Investment Adviser will notify the Trust of any changes in the membership of the Investment Adviser within a reasonable time after such change. 9. This Agreement shall extend to and bind the heirs, executors, administrators and successors of the parties hereto. 10. For the purposes of this Agreement, the terms "vote of a majority of the outstanding voting securities"; "interested persons"; and "assignment" shall have the meaning defined in the 1940 Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers as of the _______ day of January, 2001. Attest: IMPACT MANAGEMENT INVESTMENT TRUST _________________________ By:__________________________________ President Attest: EQUITY ASSETS MANAGEMENT, INC. _________________________ By:__________________________________ President -5- EX-99.23.D.IV 3 0003.txt INV ADV AGT - SCHNEIDER LARGE CAP VARIABLE FUND IMPACT MANAGEMENT INVESTMENT TRUST INVESTMENT ADVISER AGREEMENT ---------------------------- AGREEMENT, made as of January ____, 2001, between Schneider Capital Management Corporation (the "Adviser"), a Pennsylvania Corporation, and Impact Management Investment Trust (the "Company") on behalf of Schneider Large Cap Variable Fund (the "Fund"); WHEREAS, the Company is a Massachusetts Business Trust authorized to issue shares in series and classes and is registered as an open-end, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund is one series of the Company; WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act"); WHEREAS, the Company wishes to retain the Adviser to render investment advisory services in connection with the management of the Fund, and the Adviser is willing to furnish such services to the Fund; NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed between the Adviser and the Company on behalf of the Fund as follows: 1. Appointment ----------- The Company hereby appoints the Adviser to act as Investment Adviser to the Fund for the period and on the terms set forth herein. The Adviser accepts the appointment and agrees to furnish the services set forth herein for the compensation provided herein. 2. Services as Investment Adviser ------------------------------ Subject to the general supervision and direction of the Board of Trustees of the Company, the Adviser will (a) manage the Fund in accordance with the Fund's Prospectus and Statement of Additional Information filed with the Securities and Exchange Commission ("SEC"), as they may be amended from time to time; (b) make investment decisions for the Fund; (c) place purchase and sale orders on behalf of the Fund; and (d) employ professional portfolio managers and securities analysts to provide research services to the Fund. In providing those services, the Adviser will provide the Fund ongoing research, analysis, advice, and judgments regarding individual investments, general economic conditions and trends and long-range investment policy. In addition, the Adviser will furnish the Fund with whatever statistical information the Fund may reasonably request with respect to the securities that the Fund may hold or contemplate purchasing. -1- The Adviser further agrees that, in performing its duties hereunder, it will: a. comply with the 1940 Act and all rules and regulations thereunder, the Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code") and all other applicable federal and state laws and regulations, and with any applicable procedures adopted by the Trustees; b. use reasonable efforts to manage the Fund so that it will qualify, and continue to qualify, as a regulated investment company under Subchapter M of the Code and regulations issued thereunder, c. maintain books and records with respect to the Fund's securities transactions, render to the Board of Trustees of the Company such periodic and special reports as the Board may reasonably request, and keep the Trustees informed of developments materially affecting the Fund's portfolio; d. make available to the Fund's administrator, and the Company, promptly upon their request, such copies of any investment records and ledgers with respect to the Fund as may be required to assist the administrator and the Company in their compliance with applicable laws and regulations. The Adviser will furnish the Trustees with such periodic and special reports regarding the Fund as they may reasonably request; e. immediately notify the Company in the event that the Adviser or any of its affiliates (1) becomes aware that it is subject to a statutory disqualification that prevents the Adviser from serving as investment adviser pursuant to this Agreement; or (2) becomes aware that it is the subject of an administrative proceeding or enforcement action by the SEC or other regulatory authority. The Adviser further agrees to notify the company immediately of any material fact known to the Adviser respecting or relating to the Adviser that is not contained in the Company's registration statement regarding the Fund (the "Registration Statement"), or any amendment or supplement thereto, but that is required by federal regulation to be disclosed therein, and of any statement contained therein that becomes untrue in any material respect. 3. Documents --------- The Fund has delivered properly certified or authenticated copies of each of the following documents to the Adviser and will deliver to it all future amendments and supplements thereto, if any: a. certified resolution of the Board of Trustees of the Company authorizing the appointment of the Adviser and approving the form of this Agreement; b. the Registration Statement as filed with the SEC and any amendments thereto; -2- c. exhibits, powers of attorneys, certificates and any and all other documents relating to or filed in connection with the Registration Statement described above. 4. Brokerage --------- Subject to the Adviser's obligation to obtain best execution, the Adviser shall have full discretion to select brokers or dealers to effect the purchase and sale of securities. When the Adviser places orders for the purchase or sale of securities for the Fund, in selecting brokers or dealers to execute such orders, the Adviser is expressly authorized to consider the fact that a broker or dealer has furnished statistical research or other information or services for the benefit of the Fund directly or indirectly. Without limiting the generality of the foregoing, the Adviser is authorized to cause the Fund to negotiate and pay brokerage commissions which may be in excess of the lowest rates available to brokers who execute transactions for the Fund or who otherwise provide brokerage and research services utilized by the Adviser, provided that the Adviser determines in good faith that the amount of each such commission paid to a broker is reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either the particular transaction to which the commission relates or the Adviser's overall responsibilities with respect to accounts as to which the Adviser exercises investment discretion. The Adviser may aggregate securities orders so long as the Adviser adheres to a policy of allocating investment opportunities to the Fund over a period of time on a fair and equitable basis relative to other clients. In no instance will the Fund's securities be purchased from or sold to the Fund's principal underwriter, the Adviser, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law. 5. Records ------- The Adviser agrees to maintain and to preserve for the periods prescribed under the 1940 Act any such records as are required to be maintained by the Adviser with respect to the Fund by the 1940 Act. The Adviser further agrees that all records which it maintains for the Fund are the property of the Fund and it will promptly surrender any of such records upon request. 6. Standard of Care ---------------- The Adviser shall exercise its best judgment in rendering the services under this Agreement. The Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Fund's shareholders in connection with the matters to which this Agreement relates, provided that nothing herein shall be deemed to protect or purport to protect the Adviser against any liability to the Fund or to its shareholders to which the Adviser would otherwise be subject by reason of misfeasance, bad faith or negligence on its part in the performance of its duties or by reason of the Advisers reckless disregard of its obligations and duties under this Agreement. As used in this Section 6, the term "Adviser" shall include any officers, directors, employees, or other affiliates of the Adviser performing services with respect to the Fund. -3- 7. Compensation ------------ In consideration of the services rendered pursuant to this Agreement, the Company will pay the Adviser a fee at an annual rate equal to 0.60% of the average daily net assets of the Fund. This fee shall be computed and accrued daily and payable monthly. For the purpose of determining fees payable to the Adviser, the value of the Fund's average daily net assets shall be computed at the times and in the manner specified in the Fund's Prospectus or Statement of Additional Information. 8. Expenses -------- The Adviser will bear all expenses in connection with the performance of its services under this Agreement, with the exception of the cost of investment securities, commodities or other instruments purchased for the Fund. The Fund will bear certain other expenses to be incurred in its operation, including: taxes, interest, brokerage fees and commission, if any, fees of Trustees of the Company who are not officers, directors or employees of the Adviser; Securities and Exchange Commission fees and state blue sky qualification fees; charges of custodians and transfer and dividend disbursing agents; the Fund's proportionate share of insurance premiums; outside auditing and legal expenses; costs of maintenance of the Fund's existence; cost attributable to investor services, including, without limitation, telephone and personnel expenses; charges of an independent pricing service; costs of preparing and printing prospectuses and statements of additional information for regulatory purposes and for distribution to existing shareholders' cost of shareholders reports and meetings of the shareholders of the Fund and of the officers or Board of Trustees of the Company; and any extraordinary expenses. 9. Services to Other Companies or Accounts --------------------------------------- The investment advisory services of the Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Adviser, or any affiliate thereof, shall be free to render similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of the Fund) and to engage in other activities, so long as its services hereunder are not impaired thereby. No provision of this Agreement shall limit or restrict Adviser or any such affiliated person from buying, selling or trading any securities or other investments (including any securities or other investments which the Fund is eligible to buy) for its or their own accounts or for the accounts of others for whom it or they may be acting; provided, however, that Advisor agrees that it will not undertake any activities which, in its reasonable judgment, will adversely affect the performance of its obligations to the Fund under this Agreement. -4- 10. Duration and Termination ------------------------ This Agreement shall become effective as of January ___, 2001, and shall remain in effect, unless sooner terminated as provided herein, for two years from such date and shall continue from year to year thereafter, provided each continuance is specifically approved at least annually by (i) the vote of a majority of the Board of Trustees of the Company or (ii) a vote of a "majority" (as defined in the 1940 Act) of the Fund's outstanding voting securities, provided that in either event the continuance is also approved by a majority of the Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable, without penalty, on sixty (60) days' written notice by the Board of Trustees of the Company or by vote of holders of a majority of the Fund's shares or by the Adviser. This Agreement will also terminate automatically in the event of its "assignment" (as defined in the 1940 Act). 11. Amendment --------- No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no amendment of this Agreement shall be effective until approved by an affirmative vote of (i) a majority of the outstanding voting securities of the Fund, and (ii) a majority of the Trustees of the Company, including a majority of Trustees who are not interested persons of any party to this Agreement, cast in person at a meeting called for the purpose of voting on such approval, if such approval is required by applicable law. 12. Use of Name ----------- It is understood that the name of Schneider Capital Management, or any derivation thereof or logo associated with that name is the valuable property of the Adviser and its affiliates, and that the Fund has the right to use such name (or derivative or logo) only so long as this Agreement shall continue with respect to the Fund. Upon termination of this Agreement, the Fund shall forthwith cease to use such name (or derivative or logo). 13. Miscellaneous ------------- a. This Agreement constitutes the full and complete agreement of the parties hereto with respect to the subject matter hereof. b. Titles or captions of Sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions thereof. -5- c. This Agreement may be executed in several counterparts, all of which together shall for all purposes constitute one Agreement, binding on all the parties. d. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and interpreted, construed and enforced in accordance with the laws of the state of Pennsylvania. e. If any provision of this Agreement or the application thereof to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstance, other than those as to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be valid and shall be enforced to the fullest extent permitted by law. f. Notices of any kind to be given to the Adviser by the Company shall be in writing and shall be duly given if mailed or delivered to the Adviser at: Schneider Capital Management, 460 East Swedesford Road, Suite 1080, Wayne, PA 19087, or at such other address or to such individual as shall be specified by the Adviser to the Company. Notices of any kind to be given to the Company by the Adviser shall be in writing and shall be duly given if mailed or delivered to: Impact Management Investment Trust, 333 West Vine Street, Suite 206, Lexington, KY 40507, or at such other address or to such individual as shall be specified by the Company to the Adviser. -6- IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below on the day and year first above written. Schneider Capital Management By: ____________________________ President Impact Management Investment Trust By: ____________________________ President EX-99.23.D.V 4 0004.txt INV ADV AGT - JORDAN 25 VARIABLE FUND IMPACT MANAGEMENT INVESTMENT TRUST INVESTMENT ADVISORY AGREEMENT AGREEMENT, made by and between IMPACT MANAGEMENT INVESTMENT TRUST, a Massachusetts business trust (hereinafter called the "Trust"), on behalf of JORDAN 25 VARIABLE FUND (the "Portfolio"), and EQUITY ASSETS MANAGEMENT, INC., a Florida corporation (hereinafter called the "Investment Adviser"). WITNESSETH: WHEREAS, the Trust has been organized and operates as an investment company registered under the Investment Company Act of 1940 (the "1940 Act") and engages in the business of investing and reinvesting its assets in securities, and the Investment Adviser is a registered Investment Adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and engages in the business of providing investment management services; and WHEREAS, the Trust has selected the Investment Adviser to serve as the investment adviser for the Portfolio effective as of the date of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the parties hereto intending to be legally bound, it is agreed as follows: 1. The Trust on behalf of the Portfolio hereby employs the Investment Adviser to manage the investment and reinvestment of the Portfolio's assets and to administer its affairs, subject to the direction of the Board of Trustees and officers of the Trust for the period and on the terms hereinafter set forth. The Investment Adviser hereby accepts such employment and agrees during such period to render the services and assume the obligations herein set forth for the compensation herein provided. The Investment Adviser shall for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or to represent the Trust or the Portfolio in any way, or in any way be deemed an agent of the Trust or the Portfolio. The Investment Adviser shall regularly make decisions as to what securities to purchase and sell on behalf of the Portfolio and shall record and implement such decisions and shall furnish the Board of Trustees of the Trust with such information and reports regarding the Portfolio's investments as the Investment Adviser deems appropriate or as the Trustees of the Trust may reasonably request. Subject to compliance with the requirements of the 1940 Act, the Investment Adviser may retain as a sub-adviser to the Portfolio, at the Investment Adviser's own expense, any investment adviser registered under the Advisers Act. 2. The Portfolio shall conduct its own business and affairs and shall bear the expenses and salaries necessary and incidental thereto including, but not in limitation of the foregoing, the costs incurred in: the maintenance of its corporate existence; the maintenance of its own books, records and procedures; dealing with its own shareholders; the payment of dividends; transfer of stock, including issuance, redemption and repurchase of shares; preparation of share certificates; reports and notices to shareholders; calling and holding of shareholders' meetings; miscellaneous office expenses; brokerage commissions; custodian fees; legal and accounting fees; and taxes. Directors, officers and employees of the Investment Adviser may be trustees, directors, officers and employees of the funds of which the Investment Adviser serves as investment adviser. Directors, officers and employees of the Investment Adviser who are trustees, officers and/or employees of the Trust shall not receive any compensation from the Trust for acting in such dual capacity. In the conduct of the respective businesses of the parties hereto and in the performance of this Agreement, the Trust and Investment Adviser may share facilities common to each, with appropriate proration of expenses between them. 3. (a) The Investment Adviser shall place and execute Portfolio orders for the purchase and sale of portfolio securities with broker-dealers. Subject to the primary objective of obtaining the best available prices and execution, the Investment Adviser will place orders for the purchase and sale of portfolio securities for the Portfolio with such broker-dealers as it may select from time to time, including brokers who provide statistical, factual and financial information and services to the Portfolio, to the Investment Adviser, or to any other fund for which the Investment Adviser provides investment advisory services and/or with broker-dealers who sell shares of the Portfolio or who sell shares of any other fund for which the Investment Adviser provides investment advisory services. Broker-dealers who sell shares of the funds of which the Investment Adviser is investment adviser, shall only receive orders for the purchase or sale of portfolio securities to the extent that the placing of such orders is in compliance with the Rules of the Securities and Exchange Commission and the National Association of Securities Dealers, Inc. (b) Notwithstanding the provisions of subparagraph (a) above and subject to such policies and procedures as may be adopted by the Board of Trustees and officers of the Trust, the Investment Adviser is authorized to pay a member of an exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker or dealer would have charged for effecting that transaction, in such instances where the Investment Adviser has determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or the Investment Adviser's overall responsibilities with respect to the Portfolio and to other funds for which the Investment Adviser exercises investment discretion. 4. As compensation for the services to be rendered to the Portfolio by the Investment Adviser under the provisions of this Agreement, the Trust on behalf of the Portfolio shall pay to the Investment Adviser from the Portfolio's assets an annual fee equal to 0.75% of the daily average net assets of the Portfolio, payable on a monthly basis. If this Agreement is terminated prior to the end of any calendar month, the management fee shall be prorated for the portion of any month in which this Agreement is in effect according to the proportion which the number of calendar days, during which the Agreement is in effect, bears to the number of calendar days in the month, and shall be payable within 10 days after the date of termination. -2- 5. The services to be rendered by the Investment Adviser to the Trust on behalf of the Portfolio under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby. 6. The Investment Adviser, its directors, officers, employees, and agents may engage in other businesses, may render investment advisory services to other investment companies, or to any other corporation, association, firm or individual, and may render underwriting services to the Trust on behalf of the Portfolio or to any other investment company, corporation, association, firm or individual. 7. In the absence of willful misfeasance, bad faith, gross negligence, or a reckless disregard of the performance of duties of the Investment Adviser to the Portfolio, the Investment Adviser shall not be subject to liabilities to the Trust, the Portfolio or to any shareholder of the Portfolio for any action or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security, or otherwise. 8. This Agreement shall be executed and become effective as of the date written below if approved by the vote of a majority of the outstanding voting securities of the Portfolio. It shall continue in effect for a period of two years and may be renewed thereafter only so long as such renewal and continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the outstanding voting securities of the Portfolio and only if the terms and the renewal hereof have been approved by the vote of a majority of the Trustees of the Trust who are not parties hereto or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. No material amendment to this Agreement shall be effective unless the terms thereof have been approved by the vote of a majority of the outstanding voting securities of the Portfolio and by the vote of a majority of Trustees of the Trust who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this Agreement may be terminated by the Trust at any time, without the payment of a penalty, on sixty days' written notice to the Investment Adviser of the Trust's intention to do so, pursuant to action by the Board of Trustees of the Trust or pursuant to a vote of a majority of the outstanding voting securities of the Fund. The Investment Adviser may terminate this Agreement at any time, without the payment of penalty on sixty days' written notice to the Trust of its intention to do so. Upon termination of this Agreement, the obligations of all the parties hereunder shall cease and terminate as of the date of such termination, except for any obligation to respond for a breach of this Agreement committed prior to such termination, and except for the obligation of the Trust to pay to the Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the date of termination. This Agreement shall automatically terminate in the event of its assignment. The Investment Adviser will notify the Trust of any changes in the membership of the Investment Adviser within a reasonable time after such change. -3- 9. This Agreement shall extend to and bind the heirs, executors, administrators and successors of the parties hereto. 10. For the purposes of this Agreement, the terms "vote of a majority of the outstanding voting securities"; "interested persons"; and "assignment" shall have the meaning defined in the 1940 Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers as of the _______ day of January, 2001. Attest: IMPACT MANAGEMENT INVESTMENT TRUST _________________________ By:__________________________________ President Attest: EQUITY ASSETS MANAGEMENT, INC. _________________________ By:__________________________________ President -4- EX-99.23.N.II 5 0005.txt RULE 18F-3 PLAN FOR JORDAN 25 FUND Exhibit 23(n)ii IMPACT MANAGEMENT INVESTMENT TRUST JORDAN 25 FUND Multiple Class Plan This Multiple Class Plan (the "Plan") has been adopted by a majority of the Board of Trustees, including a majority of the independent trustees, of Impact Management Investment Trust (the "Trust") on behalf of the Jordan 25 Fund series of the Trust (the "Fund"). The Board has determined that the Plan is in the best interests of each Class of the Fund, and the Trust as a whole. The Plan sets forth the provisions relating to the establishment of multiple classes of shares for the Fund. 1. The Fund may offer four classes of shares: the Retail Class, Traditional Class, Wholesale Class and Institutional Class shares. The Retail Class shares are subject to Rule 12b-1 charges. The Retail Class of the Fund shall reimburse Equity Assets Management, Inc. (the "Advisor"), IMPACT Financial Network, Inc., (the "Distributor") or others for all expenses incurred by such parties in the promotion and distribution of shares of the Retail Class of the Fund, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Retail Class, or the Distributor, which form of agreement has been approved by the Trustees, including the independent trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Fund on behalf of customers; forwarding certain shareholder communications from the Fund to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Retail Class. The maximum aggregate amount which may be reimbursed by the Retail Class of the Trust to such parties shall be 1.00% per annum of the average daily net assets of the Retail Class; provided however, that payment made under any servicing agreement entered into by the Retail Class shall not exceed 0.25% per annum of the average daily net assets of the Retail Class. The minimum initial investment for Retail Class shares is $1,000. 2. Traditional Class shares are subject to Rule 12b-1 charges. The Traditional Class of the Fund shall reimburse the Advisor, the Distributor or others for all -1- expenses incurred by such parties in the promotion and distribution of shares of the Traditional Class of the Fund, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Traditional Class, or the Distributor, which form of agreement has been approved by the Trustees, including the independent trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Fund on behalf of customers; forwarding certain shareholder communications from the Fund to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Traditional Class. The maximum aggregate amount which may be reimbursed by the Traditional Class of the Trust to such parties shall be 0.25% per annum of the average daily net assets of the Institutional Class. The minimum initial investment for Traditional Class shares is $1,000. Traditional Class shares are priced with a maximum front-end sales charge of 5.75%. 3. Wholesale Class shares are subject to Rule 12b-1 charges. The Wholesale Class of the Fund shall reimburse the Advisor, the Distributor or others for all expenses incurred by such parties in the promotion and distribution of shares of the Wholesale Class of the Fund, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Wholesale Class, or the Distributor, which form of agreement has been approved by the Trustees, including the independent trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Fund on behalf of customers; forwarding certain shareholder communications from the Fund to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Wholesale Class. The maximum aggregate amount which may be reimbursed by the Wholesale Class of the Trust to such parties shall be 0.25% per annum of the average daily net assets of the Wholesale Class. -2- The minimum initial investment for Wholesale Class shares is $10,000. 4. Institutional Class shares are not subject to Rule 12b-1 charges or sales loads. The minimum initial investment for Institutional Class shares is $250,000. 5. The Trust's Rule 12b-1 Plans relating to the Retail Class, Traditional Class and Wholesale Class shares of the Fund shall operate in accordance with the Conduct Rules of the National Association of Securities Dealers, Inc. 6. The only difference in expenses as between Retail Class, Traditional Class, Wholesale Class and Institutional Class shares shall relate to sales charges, if any, and differences in the Rule 12b-1 Plan expenses of each class, if any, as described in each Class's Rule 12b-1 Plan. 7. There shall be no conversion features associated with the Classes of shares. 8. Each Class will vote separately with respect to any Rule 12b-1 Plan related to the Class. 9. On an ongoing basis, the Trustees pursuant to their fiduciary responsibilities under the Investment Company Act of 1940, as amended, (the "Act"), and otherwise, will monitor the Trust for the existence of any material conflicts between the interests of the classes of shares. The Trustees, including a majority of the independent trustees, shall take such action as is reasonably necessary to eliminate any such conflict that may develop. The Advisor and the Distributor shall be responsible for alerting the Board to any material conflicts that arise. 10. All material amendments to this Plan must be approved by a majority of the Trustees of the Trust, including a majority of the Trustees who are not "interested persons" of the Trust, as defined in the Act. -3- EX-99.23.P 6 0006.txt CODES OF ETHICS Exhibit 23(p) CODE OF ETHICS OF IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. EQUITY ASSETS MANAGEMENT, INC. & IMPACT FINANCIAL NETWORK, INC. PREAMBLE This Code of Ethics is being adopted in compliance with the requirements of Rule 17j-1 (the "Rule") adopted by the United States Securities and Exchange Commission under the Investment Company Act of 1940 (the "Act") to effectuate the purposes and objectives of that Rule. The Rule makes it unlawful for certain persons, in connection with purchase or sale by such person of a security held or to be acquired by any series or class of Impact Management Investment Trust (the "Trust"): (1) To employ a device, scheme or artifice to defraud the Trust; (2) To make to the Trust any untrue statement of a material fact or omit to state to the Trust a material fact necessary in order to make the statements made, in light of the circumstances in which they are made, not misleading; (3) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon the Trust; or (4) To engage in a manipulative practice with respect to the Trust. The Rule also requires the Trust, its investment advisers and its distributor to adopt a written Code of Ethics containing provisions reasonably necessary to prevent persons from engaging in acts in violation of the above standard and to use reasonable diligence, and institute procedures reasonably necessary, to prevent violations of the Code. Set forth below is the Code of Ethics adopted by the Board of Trustees of the Trust and by Jordan American Holdings, Inc. and Equity Assets Management, Inc. (each an "Advisor") and IMPACT Financial Network, Inc. (the "Distributor") in compliance with the Rule. This Code is based upon the principle that the trustees and officers of the Trust, and certain affiliated persons of the Trust, the Advisor and the Distributor, owe a fiduciary duty to, among others, the -1- shareholders of the Trust to conduct their affairs, including their personal securities transactions, in such manner to avoid (i) serving their own personal interests ahead of shareholders; (ii) taking inappropriate advantage of their position with the Trust; and (iii) any actual or potential conflicts of interest or any abuse of their position of trust and responsibility. 1. DEFINITIONS (a) "Access Person" means (i) any director, trustee, officer, general partner or Advisory Person of the Trust, or of the Adviser; and (ii) any director, officer or general partner of the Distributor who, in the ordinary course of business, makes, participates in or obtains information regarding the purchase or sale of Covered Securities by the Trust, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Trust regarding the purchase or sale of Covered Securities. (b) "Advisory Person" means (i) any employee of the Trust or Adviser (or of any company in a control relationship to the Trust or Adviser) who, in connection with his regular functions or duties, makes, participates in, or obtains current information regarding the purchase or sale of a Covered Security by the Trust, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Trust or the Adviser who obtains information concerning recommendations made to the Trust with regard to the purchase or sale of a Covered Security by the Trust. (c) A security is "being considered for purchase or sale" or is "being purchased or sold" when a recommendation to purchase or sell the security has been made and communicated to the Trading Desk, which includes when the Trust has a pending "buy" or "sell" order with respect to a security, and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. (d) "Beneficial ownership" shall be as defined in, and interpreted in the same manner as it would be in determining whether a person is subject to the provisions of, Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder which, generally speaking, encompasses those situations where the -2- beneficial owner has the right to enjoy some economic benefit from the ownership of the security regardless of who is the registered owner. This would include: (i) securities which a person holds for his or her own benefit either in bearer form, registered in his or her own name or otherwise regardless of whether the securities are owned individually or jointly; (ii) securities held in the name of a member of his or her immediate family (spouse or child) sharing the same household; (iii) securities held by a trustee, executor, administrator, custodian or broker; (iv) securities owned by a general partnership of which the person is a member or a limited partnership of which such person is a general partner; (v) securities held by a corporation which can be regarded as a personal holding company of a person; and (vi) securities recently purchased by a person and awaiting transfer into his or her name. (e) "Compliance Officer" means ____________ or their successors appointed by the Trustees. (f) "Control" shall have the same meaning as that set forth in Section 2(a)(9) of the Act. (g) "Covered Security" means a security, except that it shall not include (i) direct obligations of the Government of the United States; (ii) bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and (iii) shares issued by registered, open-end investment companies, including the Trust. (h) "Independent Trustee" means a Trustee of the Trust who is not an "interested person" of the Trust within the meaning of Section 2(a)(19) of the Act. (i) "Initial Public Offering" ("IPO") means an offering of securities registered under the Securities Act of 1933 ("Securities Act"), the issuer of which, immediately -3- before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934. (j) "Investment Personnel" means: (i) any Advisory Person who, in connection with his regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Trust; and (ii) any natural person who controls the Trust Adviser and who obtains information concerning recommendations made to the Trust regarding the purchase or sale of securities by the Trust. (k) "Limited Offering" means an offering that is exempt from registration under the Securities Act pursuant to Section 4(2) or Section 4(6) or pursuant to rule 504, rule 505 or rule 506 under the Securities Act. (l) "Purchase or Sale of a Covered Security" includes the writing of an option to purchase or sell a Covered Security. (m) "Security Held or to be Acquired" by the Trust means: (i) any Covered Security which, within the most recent fifteen (15) days: (A) is or has been held by the Trust; or (B) is being or has been considered by the Trust or the Adviser for purchase by the Trust; and (ii) any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in paragraph (m)(i) of this section. (n) "Security" as defined in Section 2(a)(36) of the Act means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into in a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, -4- temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. 2. PROHIBITED TRANSACTIONS (a) No Access Person shall engage in any act, practice or course of conduct, which would violate the provisions of Rule 17j-1 set forth above in the Code's Preamble. (b) No Access Person shall: (i) purchase or sell, directly or indirectly, any security in which he or she has or by reason of such transaction acquires, any direct or indirect beneficial ownership and which to his or her actual knowledge at the time of such purchase or sale: (A) is being considered for purchase or sale by the Trust, or (B) is being purchased or sold by the Trust; (ii) disclose to other persons the securities activities engaged in or contemplated for the various series of the Trust; (iii) seek or accept anything of value, either directly or indirectly, from broker- dealers or other persons providing services to the Trust because of such person's association with the Trust. For the purposes of this provision, the following gifts from broker-dealers or other persons providing services to the Trust will not be considered to be in violation of this section: (A) an occasional meal; (B) an occasional ticket to a sporting event, the theater or comparable entertainment; (C) a holiday gift of fruit or other foods, or other comparable gift. (c) No Investment Personnel shall: (i) acquire directly or indirectly any beneficial ownership in any securities in an IPO or in a Limited Offering without prior approval of the Compliance Officer or other person designated by the Board of Trustees. Any person authorized to purchase securities in a Limited Offering shall disclose that investment when they play a part in any subsequent consideration of an investment by the Trust in the issuer. In such circumstances, -5- the Trust's decision to purchase securities of the issuer shall be subject to independent review by the Trust's officers with no personal interest in the issuer. (ii) profit in the purchase or sale, or sale and purchase, of the same (or equivalent) securities within sixty (60) calendar days. Any profit realized on such short-term trades shall be subject to disgorgement. (iii) buy or sell a Covered Security within at least seven (7) calendar days before and after any series of the Trust that he or she manages trades in that security. Any profits realized on trades within the proscribed period are required to be disgorged. (iv) serve on the board of directors of any publicly traded company without prior authorization of the Chairman and/or President of the Trust. Any such authorization shall be based upon a determination that the board service would be consistent with the interests of the Trust and its shareholders. 3. EXEMPTED TRANSACTIONS The prohibitions of Sections 2(b) and 2(c) shall not apply to: (a) purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control; (b) purchases or sales which are non-volitional on the part of either the Access Person or the Trust; (c) purchases which are part of an automatic dividend reinvestment plan; and (d) purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired. (e) purchases or sales of any series or class of the Trust. 4. COMPLIANCE PROCEDURES (a) Pre-clearance With the exception of the Independent Trustees, all Access Persons shall receive prior approval from the Compliance Officer or other officer designated by the Board of Trustees before purchasing or selling securities. -6- (b) Reporting Requirements INITIAL & ANNUAL REPORTS All Access Persons, except Independent Trustees, shall disclose to the Compliance Officer within 10 days of becoming an Access Person, and thereafter on an annual basis as of December 31,(i) the name, number of shares and principal amount of each Covered Security in which the Access Person has any direct or indirect beneficial ownership and (ii) the name of any broker, dealer or bank with whom the Access Person maintains a securities account. The initial holdings report shall be made on the form attached as Exhibit A, and the annual holdings report shall be made on the form attached as Exhibit B. QUARTERLY REPORTS Every Access Person shall report to the Compliance Officer the information described below with respect to transactions in any Covered Security in which such person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership in the security; provided, however, that an Access Person shall not be required to make a report with respect to transactions effected for any account over which such person has no direct or indirect influence or control. (i) Each Independent Trustee need only report a transaction in a Covered Security if such Trustee, at the time of that transaction, knew, or, in the ordinary course of fulfilling his official duties as a trustee, should have known that during the 15-day period immediately before or after the date of the Trustee's transaction, such Covered Security was purchased or sold by the Trust or was being considered for purchase or sale by the Trust or Adviser. (ii) Reports required to be made under this Paragraph (b) shall be made not later than 10 days after the end of the calendar quarter. Every Access Person shall be required to submit a report for all periods, including those periods in which no securities transactions were effected. A report shall be made on the form attached hereto as Exhibit C or on any other form containing the following information: (iii) With respect to any transaction during the quarter in a Covered Security in which the Access Person had any direct or indirect beneficial ownership: (A) the date of the transaction, the name, the interest rate and maturity date (if applicable), the number of shares, and the principal amount of each Covered Security involved; (B) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); -7- (C) the price of the Covered Security at which the transaction was effected; (D) the name of the broker, dealer or bank with or through which the transaction was effected; and (E) the date that the report is submitted by the Access Person. With respect to any securities account established at a broker, dealer, or bank during the quarter for the direct or indirect benefit of the Access Person: (A) the name of the broker, dealer or bank with whom the Access Person established the account; (B) the date the account was established; and (C) the date that the report is submitted by the Access Person. Any report may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect beneficial ownership in the security to which the report relates. (c) Provision of Brokers' Statements With the exception of the Independent Trustees, every Access Person shall direct their brokers to supply to the Compliance Officer, on a timely basis, duplicate copies of the confirmation of all personal securities transactions and copies of all periodic statements for all securities accounts. (d) Notification of Reporting Obligations The Compliance Officer shall notify each Access Person that he or she is subject to these reporting requirements, and shall deliver a copy of this Code of Ethics to each such person upon request. (e) Certification of Compliance with Code of Ethics With the exception of the Independent Trustees, every Access Person shall certify in an annual report that: (i) they have read and understand the Code of Ethics and recognize that they are subject thereto; -8- (ii) they have complied with the requirements of the Code of Ethics; and (iii) they have reported all personal securities transactions required to be reported pursuant to the requirements of the Code of Ethics. (f) Conflict of Interest Every Access Person shall notify the Compliance Officer of any personal conflict of interest relationship which may involve the Trust, such as the existence of any economic relationship between their transactions and securities held or to be acquired by any series of the Trust. Such notification shall occur in the pre- clearance process. (g) Review of Reports The Compliance Officer or his designate immediately shall review all personal holdings reports, submitted by each Access Person, including confirmations of personal securities transactions, to ensure no trading has taken place in violation of Rule 17j-1 or the Code of Ethics. Any violations of the Code of Ethics shall be reported to the Board in accordance with Section 5 of the Code. The Compliance Officer shall maintain a list of the personnel responsible for reviewing the transactions and personal holdings reports. 5. REPORTING OF VIOLATIONS TO THE BOARD OF TRUSTEES (a) The Compliance Officer shall promptly report to the Board of Trustees: (i) all apparent violations of this Code of Ethics and the reporting requirements thereunder; and (ii) any reported transaction in a Covered Security which was purchased or sold by the Trust within fifteen (15) days before or after the date of the reported transactions. (b) When the Compliance Officer finds that a transaction otherwise reportable to the Board of Trustees under Paragraph (a) of this Section could not reasonably be found to have resulted in a fraud, deceit or manipulative practice in violation of Rule 17j-1(a), it may, in its discretion, lodge a written memorandum of such finding and the reasons therefor with the reports made pursuant to this Code of Ethics, in lieu of reporting the transaction to the Board of Trustees. (c) The Board of Trustees, or a Committee of Trustees created by the Board of Trustees for that purpose, shall consider reports made to the Board of Trustees -9- hereunder and shall determine whether or not this Code of Ethics has been violated and what sanctions, if any, should be imposed. 6. ANNUAL REPORTING TO THE BOARD OF TRUSTEES (a) The Compliance Officer, Adviser and Distributor shall furnish to the Board of Trustees, and the Board of Trustees must consider, an annual report relating to this Code of Ethics. Such annual report shall: (i) describe any issues arising under the Code of Ethics or procedures during the past year; (ii) identify any material violations of this Code or procedures, including sanctions imposed in response to such violations during the past year; (iii) identify any recommended changes in the existing restrictions or procedures based upon the Trust's experience under its Code of Ethics, evolving industry practices or developments in applicable laws or regulations; and (iv) certify that the Trust, Adviser and Distributor have adopted procedures reasonably necessary to prevent Access Persons from violating the Code of Ethics. 7. SANCTIONS Upon discovering a violation of this Code, the Board of Trustees may impose such sanctions as they deem appropriate, including, among other things, a letter of censure or suspension or termination of the employment of the violator. 8. RETENTION OF RECORDS This Code of Ethics, a list of all persons required to make reports hereunder from time to time, a copy of each report made by an access person hereunder, a list of all persons responsible for reviewing the reports required hereunder, a record of any decision and the reasons supporting the decision to approve the acquisition by Investment Personnel of securities in an IPO or Limited Offering, each memorandum made by the Compliance Officer hereunder and a record of any violation hereof and any action taken as a result of such violation, shall be maintained by the Trust as required under Rule 17j-1. -10- 9. ADOPTION AND APPROVAL The Board of Trustees, including a majority of Independent Trustees, shall approve this Code of Ethics and any material changes to the Code. The Board of Trustees shall approve any material change to the Code no later than six (6) months after adoption of the material change. Before approving this Code or any amendment to this Code, the Board of Trustees shall have received a certification from the Trust, the Adviser or Distributor that it has adopted procedures reasonably necessary to prevent Access Persons from violating the Code. Dated: August 30, 2000 -11- JORDAN AMERICAN HOLDINGS, INC. POLICY STATEMENT ON INSIDER TRADING SECTION I. POLICY STATEMENT ON INSIDER TRADING ----------------------------------- A. Policy Statement on Insider Trading ----------------------------------- Jordan American Holdings, Inc. (the "Adviser") forbids any director, officer or employee from trading, either personally or on behalf of a Client Account, on material nonpublic information, or communicating material nonpublic information to other persons in violation of the law. This conduct is frequently referred to as "insider trading". The Adviser's policy applies to every director, officer and employee and extends to activities within and outside their duties for the Adviser. Every director, officer and employee must read and retain a copy of this policy statement. Any questions regarding the Adviser's policy and procedures should be referred to the Compliance Officer. The term "insider trading" is not defined in the federal securities laws, but generally is used to refer to the use of material nonpublic information to trade in securities (whether or not one is an "insider") or to communications of material nonpublic information to others. While the law concerning insider trading is not static, it is generally understood that the law prohibits: i) trading by an insider, while in possession of material nonpublic information, or ii) trading by a non-insider, while in possession of material nonpublic information, where the information either was disclosed to the non-insider in violation of an insider's duty to keep it confidential or was misappropriated, or iii) communicating material nonpublic information to others. The elements of insider trading and the penalties for such unlawful conduct are discussed below. If, after reviewing this policy statement, you have any questions, you should consult the Adviser's Compliance Officer. 1. Who is an Insider? ------------------ The concept of "insider" is broad. It includes partners and employees of a company. In addition, a person can be a "temporary insider" if he or she enters into a special confidential -1- relationship in the conduct of a company's affairs and as a result is given access to information solely for the company's purposes. A temporary insider can include, among others, a company's attorneys, accountants, consultants, bank lending officers, and the employees of such organizations. In addition, the Adviser may become a temporary insider of a company it advises or for which it performs other services. According to the U.S. Supreme Court, the company must expect the outsider to keep the disclosed nonpublic information confidential and the relationship must at least imply such a duty before the outsider will be considered an insider. 2. What is Material Information? ---------------------------- Trading on inside information is not a basis for liability unless the information is material. "Material information" generally is defined as information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company's securities. Information that directors, officers and employees should consider material includes, but is not limited to: dividend changes, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments. Material information does not have to relate to a company's business. For example, in CARPENTER V. U.S., 108 U.S. 316 (1987), the Supreme Court considered material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a WALL STREET JOURNAL reporter was found criminally liable for disclosing to others the dates that reports on various companies would appear in the JOURNAL and whether those reports would be favorable or not. 3. What is Nonpublic Information? ----------------------------- Information is nonpublic until it has been effectively communicated to the market place. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the SEC, or appearing in DOW JONES, REUTERS ECONOMIC SERVICES, THE WALL STREET JOURNAL or other publications of general circulation would be considered public. 4. Basis for Liability. ------------------- i) fiduciary duty theory In 1980, the Supreme Court found that there is no general duty to disclose before trading on material nonpublic information, but that such a duty arises only where there is a fiduciary relationship. That is, there must be a relationship between the parties to the transaction such that one party has a right to expect that the other party will disclose any material nonpublic information or refrain from trading. CHIARELLA V. U.S., 445 U.S. 22 (1980). -2- In DIRKS V. SEC, 463 U.S. 646 (1983), the Supreme Court stated alternate theories under which non-insiders can acquire the fiduciary duties of insiders: they can enter into a confidential relationship with the company through which they gain information (i.e., attorneys, accountants), or they can acquire a fiduciary duty to the company's shareholders as "tippees" if they are aware or should have been aware that they have been given confidential information by an insider who has violated his fiduciary duty to the company's shareholders. However, in the "tippee" situation, a breach of duty occurs only if the insider personally benefits, directly or indirectly from the disclosure. The benefit does not have to be pecuniary, but can be a gift, a reputational benefit that will translate into future earnings, or even evidence of a relationship that suggests a QUID PRO QUO. ii) misappropriation theory Another basis for insider trading liability is the "misappropriation" theory, where liability is established when trading occurs on material nonpublic information that was stolen or misappropriated from any other person. In U.S. v. Carpenter, supra, the Court found, in 1987, a columnist defrauded The Wall Street Journal when he stole information from the Journal and used it for trading in the securities markets. It should be noted that the misappropriation theory can be used to reach a variety of individuals not previously thought to be encompassed under the fiduciary duty theory. 5. Penalties for Insider Trading ----------------------------- Penalties for trading on or communicating material nonpublic information are severe, both for individuals involved in such unlawful conduct and their employers. A person can be subject to some or all of the penalties below even if he or she does not personally benefit from the violation. Penalties include: i) civil injunctions ii) treble damages iii) disgorgement of profits iv) jail sentences -3- v) fines for the person who committed the violation of up to three times the profit gained or loss avoided, whether or not the person actually benefitted, and vi) fines for the employer or other controlling person of up to the greater of $1,000,00 or three times the amount of the profit gained or loss avoided. In addition, any violation of this policy statement can be expected to result in serious sanctions by the Adviser, including dismissal of the persons involved. SECTION II. PROCEDURES TO IMPLEMENT INSIDER TRADING POLICY ---------------------------------------------- The following procedures have been established to aid the directors, officers and employees of Jordan American Holdings, Inc. to avoid insider trading, and to aid the Adviser in preventing, detecting and imposing sanctions against insider trading. EVERY DIRECTOR, OFFICER AND EMPLOYEE OF THE ADVISER MUST FOLLOW THESE PROCEDURES OR RISK SERIOUS SANCTIONS, INCLUDING DISMISSAL, SUBSTANTIAL PERSONAL LIABILITY AND CRIMINAL PENALTIES. If you have any questions about these procedures, you should consult the Adviser's Compliance Officer. 1. Identifying Inside Information ------------------------------ Before trading for yourself or others, including Client Accounts, in the securities of a company about which you may have potential inside information, ask yourself the following questions: i) Is the information material? Is this information that an investor would consider important in making his or her investment decisions? Is this information that would substantially effect the market price of the securities if generally disclosed? ii) Is the information nonpublic? To whom has this information been provided? Has the information been effectively communicated to the marketplace by being published in Reuters, The Wall Street Journal, or other publications of general circulation? If, after consideration of the above, you believe that the information is material and nonpublic, or if you have questions as to whether the information is material and nonpublic, you should take the following steps. i) Report the matter immediately to the Compliance Officer. ii) Do not purchase or sell the securities on behalf of yourself or others, including Client Accounts. -4- iii) Do not communicate the information inside or outside the Adviser, other than to the Compliance Officer. iv) After the Compliance Officer has reviewed the issue, you will be instructed to continue the prohibitions against trading and communication, or you will be allowed to trade and communicate the information. 2. PERSONAL SECURITY TRADING. All directors, officers and employees of the Adviser (other than persons who are required to report their securities Transactions to a registered investment company in accordance with a Code of Ethics) shall submit to the compliance officer, on a quarterly basis, a report of every securities transaction in which they, their families (including the spouse, minor children and adults living in the same household as the director, officer or employee), and trusts of which they are trustees or in which they have a beneficial interest have participated, or at such lesser intervals as may be required from time to time. The report shall include the name of the security, date of the transaction, quantity, price, and broker-dealer through which the transaction was effected. All directors, officers and employees must also instruct their broker(s) to supply the compliance officer, on a timely basis, with duplicate copies of confirmations of all personal securities transactions and copies of all periodic statements for all securities accounts. 3. RESTRICTING ACCESS TO MATERIAL NON-PUBLIC INFORMATION. Any information in your possession that you identify as material and non-public may not be communicated other than in the course of performing your duties to anyone, including persons within your company, except as provided in paragraph 1 above. In addition, care should be taken so that such information is secure. For example, files containing material non-public information should be sealed and access to computer files containing material non-public information should be restricted. 4. RESOLVING ISSUES CONCERNING INSIDER TRADING. If, after consideration of the items set forth in paragraph 1, doubt remains as to whether information is material or non-public, or if there is any unresolved question as to the applicability or interpretation of the foregoing procedures, or as to the propriety of any action, it must be discussed with the compliance officer before trading or communicating the information to anyone. SECTION III. SUPERVISION ----------- The role of the compliance officer is critical to the implementation and maintenance of this Statement on Insider Trading. These supervisory procedures can be divided into two classifications, (1) the prevention of insider trading, and (2) the detection of insider trading. 1. Prevention of Insider Trading: ----------------------------- To prevent insider trading the compliance official should: (a) answer promptly any questions regarding the Statement on Insider Trading; -5- (b) resolve issues of whether information received by a director, officer or employee is material and non-public; (c) review and ensure that directors, officers and employees review, at least annually, and update as necessary, the Statement on Insider Trading; and (d) when it has been determined that a person has material non-public information, (i) implement measures to prevent dissemination of such information, and (ii) if necessary, restrict officers, directors, and employees from trading the securities. 2. Detection of Insider Trading: ----------------------------- To detect insider trading, the compliance officer should: (a) review the trading activity reports filed by each director, officer and employee, to ensure no trading took place in securities in which the Adviser has material non- public information; (b) review the trading activity of the mutual funds managed by the Adviser; (c) coordinate, if necessary, the review of such reports with other appropriate directors, trustees, officers, or employees of the Adviser and Impact Management Investment Trust. 3. Special Reports to Management: ------------------------------ Promptly, upon learning of a potential violation of the Statement on Insider Trading, the compliance officer must prepare a written report to management of the Adviser, and provide a copy of such report to the Board of Trustees of Impact Management Investment Trust, providing full details and recommendations for further action. 4. Annual Reports: --------------- On an annual basis, the compliance officer of the Adviser will prepare a written report to the management of the Adviser, and provide a copy of such report to the Board of Trustees of Impact Management Investment Trust, setting forth the following: (a) a summary of the existing procedures to detect and prevent insider trading; (b) full details of any investigation, either internal or by a regulatory agency, of any suspected insider trading and the results of such investigation; (c) an evaluation of the current procedures and any recommendations for improvement. The Undersigned has read, understands and agrees to abide by the foregoing Insider Trading Policy and has retained a copy of the said document. -6- Date: Signature: --------------------------- ---------------------------- -7- ADDENDUM -------- "Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into in a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. -8- EXHIBIT A IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. IMPACT FINANCIAL NETWORK, INC. CODE OF ETHICS INITIAL HOLDINGS REPORT To the Compliance Officer of Impact Management Investment Trust, Jordan American Holdings, Inc. or IMPACT Financial Network, Inc.: 1. I hereby acknowledge receipt of a copy of the Code of Ethics for IMPACT MANAGEMENT INVESTMENT TRUST (the "Trust"), JORDAN AMERICAN HOLDINGS, INC. (the "Adviser"), and IMPACT FINANCIAL NETWORK, INC., (the "Distributor"). 2. I have read and understand the Code and recognize that I am subject thereto in the capacity of an "Access Person." 3. Except as noted below, I hereby certify that I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Trust, such as any economic relationship between my transactions and securities held or to be acquired by the Trust or any of its series. 4. As of the date below I had a direct or indirect beneficial ownership interest in the following securities: Type of Interest Name of Securities Number of Shares (Direct or Indirect) - ------------------ ---------------- -------------------- 5. As of the date below, the following is a list of all brokers, dealers or banks with whom I maintain an account in which securities are held for my direct or indirect benefit: Type of Interest Firm Account (Direct or Indirect) - ---- ------- -------------------- Date: Signature: --------------------------- ---------------------------- Print Name: ---------------------------- Title: ---------------------------- Employer's Name: ----------------------- -9- EXHIBIT B IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. IMPACT FINANCIAL NETWORK, INC. CODE OF ETHICS ANNUAL HOLDINGS REPORT To the Compliance Officer of Impact Management Investment Trust, Jordan American Holdings, Inc. or IMPACT Financial Network, Inc. 1. I have read and understand the Code of Ethics and recognize that I am subject thereto in the capacity of an "Access Person." 2. I hereby certify that, during the year ended December 31, ____, I have complied with the requirements of the Code and I have reported all securities transactions required to be reported pursuant to the Code. 3. Except as noted below, I hereby certify that I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Trust, such as any economic relationship between my transactions and securities held or to be acquired by the Trust or any of its Series or Classes. 4. As of December 31, ____, I had a direct or indirect beneficial ownership interest in the following securities: Type of Interest Name of Securities Number of Shares (Direct or Indirect) - ------------------ ---------------- -------------------- 5. As of the December 31, ____ the following is a list of all brokers, dealers or banks with whom I maintain an account in which securities are held for my direct or indirect benefit: Type of Interest Firm Account (Direct or Indirect) - ---- ------- -------------------- -10- Date: Signature: --------------------------- ---------------------------- Print Name: ---------------------------- Title: ---------------------------- Employer's Name: ----------------------- -11- EXHIBIT C IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. IMPACT FINANCIAL NETWORK, INC. SECURITIES TRANSACTIONS REPORT FOR THE CALENDAR QUARTER ENDED: _____________ To the Compliance Officer of Impact Management Investment Trust, Jordan American Holdings, Inc. or IMPACT Financial Network, Inc. During the quarter referred to above, the following transactions were effected in securities of which I had, or by reason of such transaction acquired, direct or indirect beneficial ownership, and which are required to be reported pursuant to the Code of Ethics adopted by the Trust.
SECURITY DATE OF NO. OF DOLLAR NATURE OF PRICE BROKER/ (including interest TRANSACTION SHARES AMOUNT OF TRANSACTION DEALER rate and maturity TRANSACTION (Purchase, Sale, OR BANK date, if applicable) Other) THROUGH WHOM EFFECTED ==================== ============ ====== ============ ================ ====== ==============
During the quarter referred to above, the following accounts were established by me in which securities were held for my direct or indirect benefit: FIRM NAME DATE THE (of broker, dealer or bank) ACCOUNT WAS ACCOUNT NUMBER ESTABLISHED This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above. Except as noted on the reverse side of this report, I hereby certify that I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Trust, such as the existence of any economic relationship between my transactions and securities held or to be acquired by the Trust or any of its series or classes. Date: Signature: --------------------------- ---------------------------- Print Name: ---------------------------- Title: ---------------------------- Employer's Name: ----------------------- -12- Exhibit D IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. INVESTMENT PERSONNEL Securities Transactions Report Relating to Short-Term Trading For the Sixty-Day Period from _____________ to _____________: To the Compliance Officer of Jordan American Holdings, Inc. on behalf of Impact Management Investment Trust ("the Trust"): During the 60 calendar day period referred to above, the following purchases and sales, or sales and purchases, of the same (or equivalent) securities were effected or are proposed to be effected in securities of which I have, or by reason of such transaction acquired, direct or indirect beneficial ownership.
DATE OF NATURE OF BROKER/DEALER TRANSACTION DOLLAR TRANSACTION OR BANK (OR PROPOSED NO. OF AMOUNT OF (Purchase, Sale, THROUGH WHOM SECURITY TRANSACTION) SHARES TRANSACTION Other) PRICE EFFECTED ======== ============ ====== =========== ================ ===== =============
This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above. With respect to the (1) portfolio of the Trust that serves as the basis for my "investment personnel" status with the Trust (the "Portfolio"); and (2) transactions in the securities set forth in the table above, hereby certify that: (a) I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Portfolio, such as front running -13- transactions or the existence of any economic relationship between my transactions and securities held or to be acquired by the Portfolio; (b) such securities, including securities that are economically related to such securities, involved in the transaction are not (i) being considered for purchase or sale by the Portfolio, or (ii) being purchased or sold by the Portfolio; and (c) are in compliance with the Code of Ethics of the Trust. Date: Signature: --------------------------- ---------------------------- Print Name: ---------------------------- Title: ---------------------------- Employer's Name: ----------------------- In accordance with the provisions of the Code of Ethics of the Trust, the transaction proposed to be effected as set forth in this Report is: Authorized: [ ] Unauthorized: [ ] Date: Signature: --------------------------- ---------------------------- Compliance Officer ================================================================================ -14- Exhibit E IMPACT MANAGEMENT INVESTMENT TRUST JORDAN AMERICAN HOLDINGS, INC. IMPACT FINANCIAL NETWORK, INC. ACCESS PERSONS Personal Securities Transactions Pre-clearance Form To the Compliance Officer of Impact Management Investment Trust, Jordan American Holdings, Inc. or IMPACT Financial Network, Inc.: I hereby request pre-clearance of the following proposed transactions:
BROKER/DEALER NATURE OF OR BANK DOLLAR TRANSACTION PRICE (OR THROUGH AUTHORIZED NO. OF AMOUNT OF (Purchase, Sale, PROPOSED WHOM SECURITY SHARES TRANSACTION Other) PRICE) EFFECTED YES NO ======== ====== =========== ================ ========= ============= ==== ====
Signature: ----------------------- ---------------------------- Date Print Name: ----------------------- Employer: ----------------------- Signature: ----------------------- ---------------------------- Compliance Officer Date -15- -----END PRIVACY-ENHANCED MESSAGE-----